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Elephant Talk Reports 2014 Fourth Quarter and Year End Financial Results
[March 31, 2015]

Elephant Talk Reports 2014 Fourth Quarter and Year End Financial Results


NEW YORK, March 31, 2015 /PRNewswire/ -- Elephant Talk Communications Corp. (NYSE MKT: ETAK) ("Elephant Talk" or the "Company"), a global provider of Software Defined Network Architecture (ET Software DNA® 2.0) platforms and cyber security solutions, today announced total revenue of approximately $20.4 million for the year ended December 31, 2014 as compared to a restated $19.5 million for the year ended December 31, 2013.

Elephant Talk Communications' Logo.

At the end of calendar 2014, the Company had completed its multi-year transition away from its legacy landline business to the current mobile and security services business. As a result and following an exchange with the Audit and Finance Committee of the Board of Directors and management on revenue recognition, the Company started a comprehensive review of the revenue recognition policies applicable to its mobile and security business and after discussion and consultation with its auditors and advisors, determined that it was necessary to restate previously reported financial results to comply with US GAAP accounting rules used by similar service providers. In accordance with US GAAP, certain revenue that had originally been recognized in 2013 and part of 2014 is now being recognized over an extended timeframe. The amount of revenue earned or to be earned over the entire period of recognition essentially remains unchanged from the amount historically recognized. There was neither a change to the cash characteristics of the transactions being restated nor the Company's liquidity directly relating to these transactions. As a result of the restatement, the balance sheet reflects a significant increase in deferred revenue, which will be recognized as revenue over a number of years.

Mr. Steven van der Velden, Chairman and CEO of Elephant Talk, stated, "2014 saw the successful completion of a number of strategic developments that will allow us to unlock the true value of our business while remaining an innovator in mobile telecommunications and payment transaction security. Through the formation of new and expanded relationships with technology partners like HP and Affirmed Networks, and under the guidance of an expanded board of directors and management team including the recent addition of Dr. Armin Hessler, we have created a platform that will power our growth in the months and years ahead. Despite the fact that our Iusacell contract is under review and likely will not be continued due to the preference of AT&T, which recently acquired the carrier, to work with existing legacy vendors, our entire management team is confident in the capabilities of our platform and are now focused on converting our pipeline into large-scale global contracts in a number of new markets in the Americas as well as in EMEA."

2014 Company Highlights:

  • Further strengthening the capabilities of its industry-leading mobile ET Software DNA® 2.0 platform, Affirmed Networks and Elephant Talk Communications Corp. announced the deployment of Affirmed Networks' Network Functions Virtualization (NFV) solution, the Affirmed Mobile Content Cloud™, as part of Elephant Talk's Software Defined Network Architecture with mobile operators in Europe and the Middle East. The key technology will allow Affirmed Networks and Elephant Talk to provide current and future clients with a fully virtualized Evolved Packet Core, encompassing a breadth of capability and services for 3G and 4G core networks.
  • Continuing its six-year partnership with Vodafone in Spain, in December 2014, LOWI, Vodafone's newest MVNO brand was launched on Elephant Talk's fully redundant mobile platform. Launched in only three months, LOWI has grown rapidly, becoming one of the most successful new MVNO launches in Spain.
  • Adding to its management capabilities, the Company recently announced the appointment of Dr. Armin Hessler formerly Head of Global Data Center Management and Service Excellence at Vodafone Group PLC. as co-president of its platform business. Together with Martin Zuurbier, Armin will play a key role in securing and managing the continued growth, development and financial performance of the Company.
  • To further guide the Company's growth, Elephant Talk expanded its board of directors with the additions of Mr. Jaime Bustillo and Dr. Francisco Ros, resulting in a board which is now comprised of a majority of high profile independent directors, all of whom have held senior roles at leading telecom and technology providers including Qualcomm, Telefonica, Vodafone and IBM.
  • Throughout 2014, ValidSoft continued to make significant progress on its product development and commercialization efforts for its portfolio of transaction security and authentication products, efforts that have resulted in significant new contracts both in the UK through its partnership with FICO where it announced the signing a second major bank and its first North American contract with a large commercial customer for its newly enhanced User Authentication platform featuring Voice Biometric technology. Voice Biometric adoption continues to be one of the leading security topics discussed across a number of industry sectors as they move to improve their security and enhance their user experience. Biometric technology is complementary to the major shifts already occurring in the US, such as the adoption of EMV. As such, the team is focusing on capitalizing on these opportunities in the near-term.

Recent Financial Highlights:

  • Revenue for the fourth quarter of 2014 increased to approximately $5.5 million compared to a restated $4.4 million for the third quarter of 2014.
  • Deferred Revenue at 31 December 2014 was $11.2 Million compared to $2.6 million at 31 December 2013, an increase of $8.6 million.
  • Net Cash used in operations for 2014 improved by approximately $3.9 million to approximately negative $2.1 million from a negative $6.0 million in 2013.
  • Loss from operations for the fourth quarter of 2014 was reduced by approximately $1.6 million, resulting in a loss from operations of approximately $3.5 million for the fourth quarter of 2014 versus a restated operational loss of approximately $5.1 million in the same quarter of the prior year.




Conference Call Information:


Date:

Tuesday, March 31, 2015

Time:

11:00 a.m. ET

Domestic Dial-in number:

719-325-2452

Live webcast:

http://public.viavid.com/index.php?id=113601


All interested in participating should dial in approximately 5 to 10 minutes prior to the 11:00 a.m. ET conference call. Participants should ask for the Elephant Talk 2014 year-end conference call.

About Elephant Talk Communications Corp.:
Elephant Talk Communications Corp. (NYSE MKT: ETAK), is a global provider of mobile proprietary Software Defined Network Architecture (ET Software DNA® 2.0) platforms for the telecommunications industry. The Company empowers Mobile Network Operators (MNOs), Mobile Virtual Network Operators (MVNOs), Enablers (MVNEs) and Aggregators (MVNAs) with a full suite of applications, superior industry expertise and high quality customer service without the need for substantial upfront investment. Elephant Talk counts several of the world's leading MNOs and technology companies amongst its customers and partners, including Vodafone, T-Mobile, Zain, Iusacell and HP. Visit: www.elephanttalk.com.

About ValidSoft:
ValidSoft, a subsidiary of Elephant Talk Communications Corp., secures transactions using personal authentication and device assurance. We enable our customers to enhance their security while improving their user experience, utilising our multi-factor authentication platform, Voice Biometric engine and Device Trust technology, all of which may be used as 'stand-alone' or integrated into multi-vendor solutions. ValidSoft serves multiple clients across the financial services, government and enterprise sectors and is the only company to have been granted four European Privacy Seals, reflecting its commitment to strong data privacy. Visit: www.validsoft.com.

Forward-Looking Statements:
Certain statements contained herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, without limitation, statements with respect to Elephant Talk's plans and objectives, projections, expectations and intentions. These forward-looking statements are based on current expectations, estimates and projections about Elephant Talk's industry, management's beliefs and certain assumptions made by management. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Because such statements involve risks and uncertainties, the actual results and performance of Elephant Talk may differ materially from the results expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Unless otherwise required by law, Elephant Talk also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made here. Additional information concerning certain risks and uncertainties that could cause actual results to differ materially from those projected or suggested in Elephant Talk's filings with the Securities and Exchange Commission (the "SEC"), copies of which are available from the SEC or may be obtained upon request from Elephant Talk.

Contacts:
Investor Relations:
Steve Gersten
Capital Markets Group
813-926-8920
[email protected]

Public Relations:
Michael Glickman
MWG CO.
917-596-1883
[email protected]

 

ValidSoft's logo.

 

Logo - http://photos.prnewswire.com/prnh/20120917/MM75872LOGO
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To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/elephant-talk-reports-2014-fourth-quarter-and-year-end-financial-results-300058422.html

SOURCE Elephant Talk Communications Corp.


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