Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Feb. 28, 2014 | Jun. 28, 2013 |
Document And Entity Information [Abstract] | ' | ' | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Entity Registrant Name | 'ELEPHANT TALK COMMUNICATIONS CORP | ' | ' |
Entity Central Index Key | '0001084384 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Entity Filer Category | 'Accelerated Filer | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 141,201,742 | ' |
Entity Public Float | ' | ' | $59 |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
CURRENT ASSETS | ' | ' |
Cash and cash equivalents | $1,252,315 | $1,233,268 |
Restricted cash | 191,600 | 1,230,918 |
Accounts receivable, net of an allowance for doubtful accounts of $7,693 and $559,120 at December 31, 2013 and December 31, 2012 respectively | 5,976,879 | 5,123,803 |
Prepaid expenses and other current assets | 2,254,213 | 1,821,218 |
Total current assets | 9,675,007 | 9,409,207 |
NON-CURRENT ASSETS | ' | ' |
OTHER ASSETS | 1,412,408 | 1,038,306 |
PROPERTY AND EQUIPMENT, NET | 19,786,122 | 13,088,271 |
INTANGIBLE ASSETS, NET | 8,670,677 | 10,503,026 |
GOODWILL | 3,773,226 | 3,436,731 |
TOTAL ASSETS | 43,317,440 | 37,475,541 |
CURRENT LIABILITIES | ' | ' |
Overdraft | 391,436 | 350,114 |
Accounts payable and customer deposits | 2,586,662 | 5,139,292 |
Obligations under capital leases (current portion) | 1,302,838 | ' |
Deferred Revenue | 142,731 | 252,551 |
Accrued expenses and other payables | 4,961,303 | 4,120,536 |
8% Convertible Notes (current portion) | ' | 3,067,416 |
Loans payable | 962,654 | 963,051 |
10% Related Party Loan (net of Debt Discount of $1,719,585) | 1,033,719 | ' |
Total current liabilities | 11,381,343 | 13,892,960 |
LONG TERM LIABILITIES | ' | ' |
8% Convertible Notes, net of current portion | ' | 2,565,202 |
10% 3rd Party Loan (net of Debt Discount of $726,695) | 4,779,913 | ' |
Warrant liabilities | 1,973,534 | ' |
Conversion feature | ' | 311,986 |
Non-current portion of obligation under capital leases | 845,529 | ' |
Loan from joint venture partner | 602,047 | 555,907 |
Total long term liabilities | 8,201,023 | 3,433,095 |
Total liabilities | 19,582,366 | 17,326,055 |
Commitments and Contingencies (See Note 28) | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' |
Preferred Stock 0.00001 par value, 50,000 shares authorized, 0 issued and outstanding | ' | ' |
Common Stock, .00001 par value, 250,000,000 shares authorized, 140,466,801 issued and outstanding as of December 31, 2013 and 111,918,386 shares issued and outstanding as of December 31, 2012 | 248,712,321 | 223,965,907 |
Accumulated other comprehensive income (loss) | 269,869 | -732,090 |
Accumulated deficit | -225,391,922 | -203,260,307 |
Elephant Talk Communications Corp. stockholders' equity | 23,590,268 | 19,973,510 |
NON-CONTROLLING INTEREST | 144,806 | 175,976 |
Total stockholders' equity | 23,735,074 | 20,149,486 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $43,317,440 | $37,475,541 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Accounts receivable, allowance for doubtful accounts | $7,693 | $559,120 |
Preferred stock, par or stated value per share | $0.00 | $0.00 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | $0.00 | $0.00 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 140,466,801 | 111,918,386 |
Common stock, shares outstanding | 140,466,801 | 111,918,386 |
Convertible Note One [Member] | ' | ' |
Discount on debt | 1,719,585 | ' |
Convertible Note Two [Member] | ' | ' |
Discount on debt | $726,695 | ' |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS [Abstract] | ' | ' | ' |
REVENUES | $22,827,261 | $29,202,188 | $32,232,981 |
COST AND OPERATING EXPENSES | ' | ' | ' |
Cost of service | 7,149,153 | 20,819,327 | 28,723,265 |
Selling, general and administrative expenses | 26,533,283 | 24,186,278 | 23,408,554 |
Depreciation and amortization | 6,601,246 | 5,710,396 | 5,254,708 |
Intangible assets impairment charge | ' | ' | 522,726 |
Total cost and operating expenses | 40,283,682 | 50,716,001 | 57,909,253 |
LOSS FROM OPERATIONS | -17,456,421 | -21,513,813 | -25,676,272 |
OTHER INCOME (EXPENSE) | ' | ' | ' |
Interest income | 103,627 | 248,017 | 106,721 |
Interest expense | -1,064,999 | -780,852 | -201,184 |
Interest expense related to Debt Discount and conversion feature | -2,069,649 | -1,089,126 | ' |
Change in fair value of conversion feature | 232,267 | 2,387,326 | ' |
Loss on extinguishment of debt | -2,005,100 | ' | ' |
Change in fair value of warrant liabilities | 479,322 | ' | ' |
Other Income & (expense) | -302,112 | ' | 460,000 |
Impairment of related party loans | ' | -1,060,784 | ' |
Amortization of deferred financing costs | -248,851 | -531,792 | ' |
Net loss from joint venture | ' | -501,776 | ' |
Total other income (expense) | -4,875,495 | -1,328,987 | 365,537 |
LOSS BEFORE PROVISION FOR INCOME TAXES | -22,331,916 | -22,842,800 | -25,310,735 |
Benefit from provision for income taxes | 200,301 | -289,136 | ' |
NET LOSS | -22,131,615 | -23,131,936 | -25,310,735 |
OTHER COMPREHENSIVE (LOSS) INCOME | ' | ' | ' |
Foreign currency translation gain (loss) | 1,001,959 | 411,205 | -624,275 |
Total Other Comprehensive Income (Loss), Net of Tax | 1,001,959 | 411,205 | -624,275 |
COMPREHENSIVE LOSS | ($21,129,656) | ($22,720,731) | ($25,935,010) |
Net loss per common share and equivalents - basic and diluted | ($0.18) | ($0.21) | ($0.24) |
Weighted average shares outstanding during the period - basic and diluted | 126,259,634 | 111,322,029 | 104,326,066 |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (USD $) | Total | Party One [Member] | Party Two [Member] | Common Shares [Member] | Common Shares [Member] | Common Shares [Member] | Common Amount [Member] | Common Amount [Member] | Common Amount [Member] | Other comprehensive income (loss) [Member] | Other comprehensive income (loss) [Member] | Other comprehensive income (loss) [Member] | Accummulated Deficit [Member] | Accummulated Deficit [Member] | Accummulated Deficit [Member] |
USD ($) | USD ($) | USD ($) | Party One [Member] | Party Two [Member] | USD ($) | Party One [Member] | Party Two [Member] | USD ($) | Party One [Member] | Party Two [Member] | USD ($) | Party One [Member] | Party Two [Member] | ||
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | ||||||||||
Beginning balance at Dec. 31, 2010 | $28,488,208 | ' | ' | ' | ' | ' | $183,825,664 | ' | ' | ($519,020) | ' | ' | ($154,818,436) | ' | ' |
Beginning balance, shares at Dec. 31, 2010 | ' | ' | ' | 88,660,848 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for note conversions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for note conversions, shares | ' | ' | ' | 2,210,367 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for warrant exercises | 25,489,729 | ' | ' | ' | ' | ' | 25,489,729 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for warrant exercises, shares | ' | ' | ' | 18,063,551 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for employee stock option exercises | 1,255,237 | ' | ' | ' | ' | ' | 1,255,237 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for employee stock option exercises, shares | ' | ' | ' | 786,672 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for board & management compensation | 1,343,208 | ' | ' | ' | ' | ' | 1,343,208 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for board & management compensation, shares | ' | ' | ' | 500,287 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued to consultants | 737,611 | ' | ' | ' | ' | ' | 737,611 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued to consultants, shares | ' | ' | ' | 303,506 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares to be issued | 5,269 | ' | ' | ' | ' | ' | 5,269 | ' | ' | ' | ' | ' | ' | ' | ' |
Warrant solicitation fee | -1,052,897 | ' | ' | ' | ' | ' | -1,052,897 | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Options compensation expense | 4,697,305 | ' | ' | ' | ' | ' | 4,697,305 | ' | ' | ' | ' | ' | ' | ' | ' |
Expenses attributable to share issuances | -112,227 | ' | ' | ' | ' | ' | -112,227 | ' | ' | ' | ' | ' | ' | ' | ' |
Other comprehensive loss due to foreign exchange rate translation net of tax | -624,275 | ' | ' | ' | ' | ' | ' | ' | ' | -624,275 | ' | ' | ' | ' | ' |
Other | 800 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 800 | ' | ' |
Other, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net Loss | -25,310,735 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -25,310,735 | ' | ' |
Ending balance at Dec. 31, 2011 | 34,917,233 | ' | ' | ' | ' | ' | 216,188,899 | ' | ' | -1,143,295 | ' | ' | -180,128,371 | ' | ' |
Ending balance, shares at Dec. 31, 2011 | ' | ' | ' | 110,525,231 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for warrant exercises | 650,000 | ' | ' | ' | ' | ' | 650,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for warrant exercises, shares | ' | ' | ' | 595,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for employee stock option exercises | 519,425 | ' | ' | ' | ' | ' | 519,425 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for employee stock option exercises, shares | ' | ' | ' | 464,972 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for board & management compensation | 1,144,498 | ' | ' | ' | ' | ' | 1,144,498 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for board & management compensation, shares | ' | ' | ' | 499,121 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for acquisitions | 300,272 | ' | ' | ' | ' | ' | 300,272 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for acquisitions, shares | ' | ' | ' | 134,046 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares returned by former CFO | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares returned by former CFO, shares | ' | ' | ' | -300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares to be issued | 50,100 | ' | ' | ' | ' | ' | 50,100 | ' | ' | ' | ' | ' | ' | ' | ' |
Warrant solicitation fee | -28,438 | ' | ' | ' | ' | ' | -28,438 | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Options compensation expense | 5,220,793 | ' | ' | ' | ' | ' | 5,220,793 | ' | ' | ' | ' | ' | ' | ' | ' |
Expenses attributable to share issuances | -79,642 | ' | ' | ' | ' | ' | -79,642 | ' | ' | ' | ' | ' | ' | ' | ' |
Other comprehensive loss due to foreign exchange rate translation net of tax | 411,205 | ' | ' | ' | ' | ' | ' | ' | ' | 411,205 | ' | ' | ' | ' | ' |
Net Loss | -23,131,936 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -23,131,936 | ' | ' |
Ending balance at Dec. 31, 2012 | 19,973,510 | ' | ' | ' | ' | ' | 223,965,907 | ' | ' | -732,090 | ' | ' | -203,260,307 | ' | ' |
Ending balance, shares at Dec. 31, 2012 | 111,918,386 | ' | ' | 111,918,368 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for note conversions | 1,306,848 | ' | ' | ' | ' | ' | 1,306,848 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for note conversions, shares | ' | ' | ' | 1,840,631 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for warrant exercises | 3,200,590 | ' | ' | ' | ' | ' | 3,200,590 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for warrant exercises, shares | ' | ' | ' | 5,596,459 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for employee stock option exercises | 529,648 | ' | ' | ' | ' | ' | 529,648 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for employee stock option exercises, shares | ' | ' | ' | 809,737 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for board & management compensation | 758,964 | ' | ' | ' | ' | ' | 758,964 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for board & management compensation, shares | ' | ' | ' | 775,985 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for acquisitions | 1,455,000 | ' | ' | ' | ' | ' | 1,455,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for acquisitions, shares | ' | ' | ' | 1,250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued to consultants | 152,000 | ' | ' | ' | ' | ' | 152,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued to consultants, shares | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for rental termination settlement | 468,000 | ' | ' | ' | ' | ' | 468,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for rental termination settlement, shares | ' | ' | ' | 400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for financing | ' | 12,000,000 | 225,000 | ' | ' | ' | ' | 12,000,000 | 225,000 | ' | ' | ' | ' | ' | ' |
Shares issued for financing, shares | ' | ' | ' | ' | 17,425,621 | 250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares to be issued | -323,987 | ' | ' | ' | ' | ' | -323,987 | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Options compensation expense | 7,764,830 | ' | ' | ' | ' | ' | 7,764,830 | ' | ' | ' | ' | ' | ' | ' | ' |
Expenses attributable to share issuances | -790,498 | ' | ' | ' | ' | ' | -790,498 | ' | ' | ' | ' | ' | ' | ' | ' |
FMV Warrants issued in relation to SPA closings and issued as Warrant liability | -5,636,315 | ' | ' | ' | ' | ' | -5,636,315 | ' | ' | ' | ' | ' | ' | ' | ' |
FMV of Warrants issued classified as Debt Discount | 1,398,121 | ' | ' | ' | ' | ' | 1,398,121 | ' | ' | ' | ' | ' | ' | ' | ' |
FMV of Beneficial Conversion Feature classified as Debt Discount | 1,105,809 | ' | ' | ' | ' | ' | 1,105,809 | ' | ' | ' | ' | ' | ' | ' | ' |
FMV of Beneficial Conversion Feature classified as debt discount | 1,132,404 | ' | ' | ' | ' | ' | 1,132,404 | ' | ' | ' | ' | ' | ' | ' | ' |
Other comprehensive loss due to foreign exchange rate translation net of tax | 1,001,959 | ' | ' | ' | ' | ' | ' | ' | ' | 1,001,959 | ' | ' | ' | ' | ' |
Net Loss | -22,131,615 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -22,131,615 | ' | ' |
Ending balance at Dec. 31, 2013 | $23,590,268 | ' | ' | ' | ' | ' | $248,712,321 | ' | ' | $269,869 | ' | ' | ($225,391,922) | ' | ' |
Ending balance, shares at Dec. 31, 2013 | 140,466,801 | ' | ' | 140,466,801 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' | ' |
Net loss | ($22,131,615) | ($23,131,936) | ($25,310,735) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' | ' |
Depreciation and amortization | 6,601,246 | 5,710,396 | 5,254,708 |
Provision for doubtful accounts | 22,005 | 117,394 | 318,443 |
Stock based compensation | 8,515,391 | 6,302,141 | 6,319,314 |
Loss on Extinguishment of Debt | 2,005,100 | ' | ' |
Net loss from joint venture | ' | 501,776 | ' |
Amortization of shares issued for consultancy | ' | ' | 499,591 |
Change in fair value of conversion feature | -232,267 | -2,387,326 | ' |
Change in fair value of warrant liability | -479,322 | ' | ' |
Amortization of deferred financing costs | 248,851 | 531,792 | ' |
Interest expense relating to debt discount and conversion feature | 2,069,649 | 1,089,126 | ' |
Loans to related party impairment charge | ' | 1,060,784 | ' |
Unrealized foreign currency translation gain (loss) | 302,112 | ' | ' |
Intangible assets impairment charge | ' | ' | 522,726 |
Changes in operating assets and liabilities: | ' | ' | ' |
Decrease (increase) in restricted cash | 1,052,257 | -1,040,074 | ' |
Decrease (increase) in accounts receivable | -82,763 | 1,292,883 | -1,372,719 |
Decrease (increase) in prepaid expenses, deposits and other assets | -465,026 | -247,443 | 782,920 |
Increase (decrease) in accounts payable, proceeds from related parties and customer deposits | -3,415,032 | 272,500 | -140,229 |
Increase (decrease) in deferred revenue | -118,786 | 114,673 | 142,309 |
Increase (decrease) in accrued expenses and other payables | 140,514 | 1,014,042 | -1,587,264 |
Net cash used in operating activities | -5,967,686 | -8,799,272 | -14,570,936 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' | ' |
Purchases of property and equipment | -5,898,169 | -2,224,923 | -7,721,307 |
Restricted cash | ' | ' | 49 |
Cash received from acquisition of subsidiary | ' | 36,188 | ' |
Impairment of related party loans | ' | -1,060,784 | ' |
Payments for acquisition | ' | ' | -347,758 |
Loan to joint venture party | ' | -146,496 | ' |
Loan to third party | -163,542 | -111,023 | -448,195 |
Net cash used in investing activities | -6,061,711 | -3,507,038 | -8,517,211 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' | ' |
Proceeds from 12% Unsecured Loan from Related Party | 1,290,790 | ' | ' |
Proceeds from Share Purchase Agreement - unregistered securities | 225,000 | ' | ' |
Proceeds from Share Purchase Agreement - Registered Direct | 7,500,000 | ' | ' |
Proceeds from Share Purchase Agreement - Related Party | 4,500,000 | ' | ' |
Proceeds from 10% Affiliate Loan | 2,652,600 | ' | ' |
Proceeds from 10% 3rd Party Loan | 5,305,200 | ' | ' |
Deferred financing costs | ' | -543,437 | ' |
Proceeds from 8% Convertible Note, net of OID | ' | 8,000,000 | ' |
Restricted cash | ' | -2,273,720 | ' |
(Payments on) proceeds from convertible note installment payments and interest | -8,642,149 | 1,531,293 | ' |
Cash from Escrow account for principal and interest payments on 8% Convertible Notes | 742,427 | ' | ' |
Trade note payable | -512,732 | -315,000 | 271,915 |
Proceeds from exercise of warrants & options | 581,142 | 1,081,925 | 26,808,067 |
Payment of placement & solicitation fees | -1,362,124 | ' | -1,185,741 |
Net cash provided by financing activities | 12,280,154 | 7,481,061 | 25,894,241 |
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | -231,711 | 48,941 | 957,785 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 19,047 | -4,776,308 | 3,763,879 |
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD | 1,233,268 | 6,009,576 | 2,245,697 |
CASH AND CASH EQUIVALENTS, END OF THE PERIOD | 1,252,315 | 1,233,268 | 6,009,576 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ' | ' | ' |
Cash paid during the period for interest | 745,096 | 504,718 | 39,460 |
Non-cash rent termination settlement | 468,000 | 342,006 | ' |
Share capital issued to acquire Telnicity | 1,180,000 | 578,357 | ' |
Purchase of property and equipment under capital lease agreements | 2,620,182 | ' | ' |
Amount of cash paid for taxes | ' | ' | ' |
Reclassification_of_changes_to
Reclassification of changes to prior year information | 12 Months Ended |
Dec. 31, 2013 | |
Reclassification of changes to prior year information [Abstract] | ' |
Reclassification of changes to prior year information | ' |
Note 1. Reclassification of changes to prior year information | |
Certain reclassifications have been made to the 2012 Financial Statements to conform to the current year presentation. Prior to June 30, 2013, the Company presented the stock-based compensation as one line item in the Company's Consolidated Statement of Comprehensive Loss. The Company now includes the stock-based compensation of $8,515,391, $6,302,141, and $6,818,905 for 2013, 2012 and 2011, respectively, within Selling, General & Administrative expenses in the Consolidated Statement of Comprehensive Loss. These reclassifications had no effect on previously reported results of operations or retained earnings. |
Financial_Condition
Financial Condition | 12 Months Ended |
Dec. 31, 2013 | |
Financial Condition [Abstract] | ' |
Financial Condition | ' |
Note 2. Financial Condition | |
As reflected in the accompanying consolidated financial statements the Company incurred net losses of $22,131,615 and cash flow deficits from operations of $5,967,686 for the year ended December 31, 2013, and had an accumulated deficit of $225,391,923 as of December 31, 2013. | |
With cash and cash equivalents at December 31, 2013 of $1,252,315, proceeds from warrant and option exercises through March 14, 2014 of $350,903, the net proceeds of $3,732,668 following the exercise of at warrant on March 17, 2014 and the improvement of net cash used in operating activities, we believe that we can carry out our operational plans for the coming 12 months. For the longer term growth of the company we will continue to attract financing in order to finance or lease our capital expenditures. | |
In case the Company is not able to achieve the anticipated revenues or financing arrangement with the company's major vendors, the Company will need to attract further debt or equity financing. Although the Company has been succesfull in the past in meeting its cash needs, there can be no assurance that these additional revenues, vendor financings or debt and equity financing where required will be closed in the required time frames. The Company may therefore arrive in a situation that it may not be able to continue operations. As of December 31, 2013, these conditions raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Significant_Accounting_Policie
Significant Accounting Policies | 12 Months Ended | ||
Dec. 31, 2013 | |||
Significant Accounting Policies [Abstract] | ' | ||
Significant Accounting Policies | ' | ||
Note 3. Significant Accounting Policies | |||
Principles of Consolidation | |||
The accompanying consolidated financial statements for December 31, 2013 and December 31, 2012 include the accounts of Elephant Talk Communications Corp., including: | |||
· | its wholly-owned subsidiary Elephant Talk Europe Holding B.V. and its wholly owned subsidiaries Elephant Talk North America Corp., Elephant Talk Communications Luxembourg SA, Elephant Talk Communications France S.A.S., Elephant Talk Communications Italy S.R.L., ET-Stream GmbH, Elephant Talk Business Services W.L.L., Guangzhou Elephant Talk Information Technology Limited, Elephant Talk Deutschland GmbH, Morodo Group Ltd., Elephant Talk Belgium BVBA, and the majority owned (51%) subsidiaries Elephant Talk Communications PRS U.K. Limited and (51%) ET-UTS NV; | ||
· | Elephant Talk Europe Holding B.V.'s wholly-owned subsidiary Elephant Talk Communication Holding AG and its wholly-owned subsidiaries Elephant Talk Communications S.L.U., Elephant Talk Mobile Services B.V., Elephant Talk Telekom GmbH, Elephant Talk Communication Carrier Services GmbH, Elephant Talk Communication Schweiz GmbH, Elephant Talk Communication (Europe) GmbH and the majority owned (51%) subsidiary Elephant Talk Communications Premium Rate Services Netherlands B.V.; | ||
· | Elephant Talk Telecomunicação do Brasil LTDA, owned 90% by Elephant Talk Europe Holding B.V. and 10% by Elephant Talk Communication Holding AG; | ||
· | Elephant Talk Europe Holding B.V.'s majority (60%) owned subsidiary Elephant Talk Middle East & Africa (Holding) W.L.L., its wholly owned (100%) and its majority owned (99%) subsidiaries Elephant Talk Middle East & Africa (Holding) Jordan L.L.C. and Elephant Talk Middle East & Africa Bahrain W.L.L.; | ||
· | its wholly-owned subsidiary Elephant Talk Limited ("ETL") and its majority owned (50.54%) subsidiary Elephant Talk Middle East & Africa FZ-LLC; and | ||
· | its wholly-owned subsidiary ValidSoft Ltd and its wholly-owned subsidiaries ValidSoft and ValidSoft (Australia) Pty Ltd.; and | ||
· | its wholly-owned subsidiary Elephant Talk Group International B.V., based in The Netherlands. | ||
Business combinations: | |||
On April 1, 2013, the Company, through its subsidiary Elephant Talk North America Corp, entered into an asset purchase agreement to acquire most of the assets of Telnicity LLC, a company established in the U.S. The assets and operations are consolidated into the financials of the Company as of April 1, 2013. Refer to Note 11 of the Financial Statements for more information. | |||
All intercompany balances and transactions are eliminated in consolidation. | |||
Foreign Currency Translation | |||
The functional currency is Euros for the Company's wholly-owned subsidiary Elephant Talk Europe Holding B.V. and its subsidiaries, Euros for its wholly-owned subsidiary Elephant Talk Global Holding B.V., the Hong Kong Dollar for its wholly-owned subsidiary ETL and the British Pound Sterling for its wholly-owned subsidiary ValidSoft. The financial statements of the Company were translated to USD using period-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses, and capital accounts were translated at their historical exchange rates when the capital transaction occurred. In accordance with ASC 830, Foreign Currency Matters, net gains and losses resulting from translation of foreign currency financial statements are included in the statement of stockholder's equity as other comprehensive income (loss). Foreign currency transaction gains and losses are included in consolidated income/(loss), under the line item 'Other income/(expense)'. | |||
Use of Estimates | |||
The preparation of the accompanying financial statements conforms with accounting principles generally accepted in the U.S. and requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Significant areas of estimates include bad debt allowance, valuation of of financial instruments, useful lives and stock-based compensation. Actual results may differ from these estimates under different assumptions or conditions. | |||
Cash and Cash Equivalents | |||
For purposes of the cash flow statements, the Company would normally consider all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. The Company has full access to the whole balance of cash and cash equivalents on a daily basis without any delay. | |||
Restricted Cash | |||
Restricted cash as of December 31, 2013 and 2012 was $191,600 and $1,230,918 respectively, and consists of cash deposited in blocked accounts as bank guarantees for national interconnection and wholesale agreements with telecom operators. The decrease in 2013 is due to the extinguishment of debt, as described in this section, under Notes 17 and 18 of the Financial Statements. | |||
Accounts Receivables, Net | |||
The Company's customer base consists of a geographically dispersed customer base. The Company maintains an allowance for potential credit losses on accounts receivable. The Company makes ongoing assumptions relating to the collectibility of our accounts receivable. The accounts receivable amounts presented on our balance sheets include reserves for accounts that might not be collected. In determining the amount of these reserves, the Company considers its historical level of credit losses. The Company also makes judgments about the creditworthiness of significant customers based on ongoing credit evaluations, and the Company assesses current economic trends that might impact the level of credit losses in the future. The Company's reserves have generally been adequate to cover its actual credit losses. However, since the Company cannot reliably predict future changes in the financial stability of its customers, it cannot guarantee that its reserves will continue to be adequate. If actual credit losses are significantly greater than the reserves, the Company has established that it would increase its general and administrative expenses and reduce its reported net losses. Conversely, if actual credit losses are significantly less than our reserve, this would eventually decrease the Company's general and administrative expenses and decrease its reported net losses. Allowances are recorded primarily on a specific identification basis. See Note 4 of the Financial Statements for more information. | |||
Leasing Arrangements | |||
At the inception of a lease covering equipment or real estate, the lease agreement is evaluated under the criteria of ASC 840, Leases. Leases meeting one of the four key criteria are accounted for as capital leases and all others are treated as operating leases. Under a capital lease, the discounted value of future lease payments becomes the basis for recognizing an asset and a borrowing, and lease payments are allocated between debt reduction and interest. For operating leases, payments are recorded as rent expense. Criteria for a capital lease include (i) transfer of ownership during the lease term; (ii) existence of a bargain purchase option under terms that make it likely to be exercised; (iii) a lease term equal to 75 percent or more of the economic life of the leased equipment; and (iv) minimum lease payments that equal or exceed 90 percent of the fair value of the property. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that type of asset. The assets are amortized as per our accounting policy for property & equipment, and intangibles, as applicable. | |||
Revenue Recognition and Deferred Revenue | |||
The Company derives revenue from outsourced services in telecommunications based activities by deploying its operational management services, network, switching technology and mobile enabling platform. Revenue represents amounts earned for these services provided to customers (net of value added tax). | |||
The Company follows ASC 605, Revenue Recognition ("ASC 605") and recognizes revenue when all of the following conditions have been met: (i) there is persuasive evidence of an arrangement; (ii) delivery has occurred; (iii) the fee is fixed or determinable; and (iv) collectability of the fee is reasonably assured. Revenues are recognized on a gross basis as the Company acts as principal in the transaction and has risk of loss for collection and delivery of service. | |||
In the landline business, and specifically in the Premium Rate Services (PRS), the Company provides technical, operational and financial telecom infrastructure to telecommunication service providersprovidersRevenues are recognized when delivery occurs based on a pre-determined rate, number of calls and number of user minutes that the Company has managed in a given month. | |||
For the mobile solutions the Company recognizes revenues from two different service offerings, namely managed services and bundled services. For managed services, revenues are recognized for network administration services provided to end users on behalf of Mobile Network Operators (MNO). Managed service revenues are recognized monthly based on an average number of end-users managed and calculated on a pre-determined service fee per user. For bundled services, the Company provides both network administration as well as mobile airtime management services. Revenues for bundled services are recognized monthly based on an average number of end-users managed and mobile air time and calculated based on a pre-determined service fee. | |||
For the security solutions we recognize revenues primarily from SIM lookup services using the VALid-SSD platform. Security solutions revenue is recognized based on the number of SIM lookups performed and calculated based on a pre-determined service fee per lookup. Other revenues recognized in the security business include consulting services which are recognized as the services are performed. | |||
Cost of Revenues and Operating Expenses | |||
Cost of service includes origination, termination, network and billing charges from telecommunications operators, out payment costs to content and information providers, network costs, data center costs, facility costs of hosting network and equipment, and costs of providing resale arrangements with long distance service providers, costs of leasing transmission facilities and international gateway switches for voice and data transmission services. | |||
Within the caption "total costs and operating expenses" in line item selling, general and administrative expenses ("SG&A") in the accompanying statement of comprehensive loss, the Company presents the costs incurred in the development of the Company's services which are expensed as incurred. Costs incurred during the application development stage of internal-use software projects, such as those used in the Company's network operations, are capitalized in accordance with the accounting guidance for costs of computer software developed for internal use. | |||
Reporting Segments | |||
ASC 280, Segment Reporting ("ASC 280"), defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performances. The business operates as one single segment and discrete financial information is based on the whole, not segregted; and is used by the chief decision maker accordingly. | |||
Financial Instruments | |||
The carrying values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and customer deposits approximate their fair values based on their short-term nature. The recorded values of long-term debt approximate their fair values, as interest approximates market rates. The Company's conversion feature, a derivative instrument, is recognized in the balance sheet at its fair values with changes in fair market value reported in earnings. | |||
Fair Value Measurements | |||
In accordance with ASC 820 Fair Value Measurement (ASC 820), the Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date. ASC 820 establishes a fair value hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. | |||
Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company's assumptions about the inputs that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. | |||
The fair value hierarchy is categorized into three levels based on the inputs as follows: | |||
Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reported date. | |||
Level 2 - Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these financial instruments include cash instruments for which quoted prices are available but are traded less frequently, derivative instruments whose fair values have been derived using a model where inputs to the model are directly observable in the market and instruments that are fair valued using other financial instruments, the parameters of which can be directly observed. | |||
Level 3 - Instruments that have little to no pricing observability as of the reported date. These financial instruments are measured using management's best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. | |||
The degree of judgment exercised by the Company in determining fair value is greatest for securities categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined by the lowest level input that is significant to the fair value measurement. | |||
Stock-based Compensation | |||
The Company follows the provisions of ASC 718, Compensation-Stock Compensation, ("ASC 718"). Under ASC 718, stock-based awards are recorded at fair value as of the grant date and recognized as expense with an adjustment for forfeiture over the employee's requisite service period (the vesting period, generally up to three years). The stock-based compensation cost based on the grant date fair value is amortized over the period in which services are received. | |||
To determine the value of our stock options at grant date under our employee stock option plan, the Company uses the Black-Scholes option-pricing model. The use of this model requires the Company to make a number of subjective assumptions. The following addresses each of these assumptions and describes our methodology for determining each assumption: | |||
Expected Life | |||
The expected life represents the period that the stock option awards are expected to be outstanding. The Company uses the simplified method for estimating the expected life of the option, by taking the average between time to vesting and the contract life of the award. | |||
Expected Volatility | |||
The Company estimates expected cumulative volatility giving consideration to the expected life of the option of the respective award, and the calculated annual volatility by using the continuously compounded return calculated by using the share closing prices of an equal number of days prior to the grant-date (reference period). The annual volatility is used to determine the (cumulative) volatility of its Common Stock (=nnual volatility x square root (expected life)). | |||
Forfeiture rate | |||
The Company is using the aggregate forfeiture rate. The aggregate forfeiture rate is the ratio of pre-vesting forfeitures over the awards granted (pre-vesting forfeitures/grants). The forfeiture discount (additional loss) is released into the profit and loss in the same period as the option vesting-date. The forfeiture rate is actualized every reporting period. | |||
Risk-Free Interest Rate | |||
The Company estimates the risk-free interest rate using the "Daily Treasury Yield Curve Rates" from the U.S. Treasury Department with a term equal to the reported rate, or derived by using both spread in intermediate term and rates, to the expected life of the award. | |||
Expected Dividend Yield | |||
The Company estimates the expected dividend yield by giving consideration to our current dividend policies as well as those anticipated in the future considering our current plans and projections. The Company does not currently calculate a discount for any post-vesting restrictions to which our awards may be subject. | |||
Income Taxes | |||
The Company accounts for income taxes under the provisions of ASC 740, Accounting for Income Taxes ("ASC 740"). Income taxes are provided on an asset and liability approach for financial accounting and reporting of income taxes. Current tax is based on the income or loss from ordinary activities adjusted for items that are non-assessable or disallowable for income tax purpose and is calculated using tax rates that have been enacted or substantively enacted at the balance sheet date. The recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carry-forwards. Establishment of a valuation allowance is provided when the likelihood of realization of deferred tax assets it is more -likely -than-not to be realized. Deferred taxes are recorded at tax rates for each respective tax jurisdictions in which the Company operates. | |||
In the ordinary course of a global business, there are many transactions and calculations where the ultimate tax outcome is uncertain. Some of these uncertainties arise as a consequence of revenue sharing and reimbursement arrangements among related entities, the process of identifying items of revenue and expenses that qualify for preferential tax treatment and segregation of foreign and domestic income and expense to avoid double taxation. | |||
The Company recognizes and measures benefits for uncertain tax positions using a two-step approach. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained upon audit, including resolution of any related appeals or litigation processes. For tax positions that are more likely than not of being sustained upon audit, the second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. Significant judgment is required to evaluate uncertain tax positions. The Company evaluates its uncertain tax positions on a quarterly basis. The Company's evaluations are based upon a number of factors, including changes in facts or circumstances, changes in tax law, correspondence with tax authorities during the course of audits and effective settlement of audit issues. Changes in the recognition or measurement of uncertain tax positions could result in material increases or decreases in our income tax expense in the period in which the Company makes the change, which could have a material impact on our effective tax rate and operating results. The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions and various foreign jurisdictions. The Company's income tax returns are open to examination by federal, state and foreign tax authorities, generally for the years ended December 31, 2008 and later, with certain state jurisdictions open for audit for earlier years. The Company had an amount of zero and $289,136 recorded for unrecognized tax losses at December 31, 2013 and 2012, respectively. The Company's policy is to record estimated interest and penalty related to the underpayment of income taxes or unrecognized tax benefits as part of other income and expenses. During the years ended 2013, 2012 and 2011, the Company did not recognize any interest or penalties in its statements of operations and there are no accruals for interest or penalties at December 31, 2013 or 2012. | |||
Comprehensive Income/ (Loss) | |||
Comprehensive income/ (loss) include all changes in equity during a period from non-owner sources. For the years ended December 31, 2013 and 2012, the Company's comprehensive income/ (loss) consisted of its net loss and foreign currency translation adjustments. | |||
Business Combinations | |||
The acquisition method of accounting for business combinations as per ASC 805, Business Combinations ("ASC 805"), requires us to use significant estimates and assumptions, including fair value estimates, as of the business combination date and to refine those estimates as necessary during the measurement period (defined as the period, not to exceed one year, in which the Company may adjust the provisional amounts recognized for a business combination). | |||
Under the acquisition method of accounting, the identifiable assets acquired, the liabilities assumed, and any non-controlling interests in an acquire are recognized at the acquisition date fair value. The Company measures goodwill as of the acquisition date as the excess of consideration transferred, over the net of the acquisition date fair value of the identifiable assets acquired and liabilities assumed. Costs that the Company incurs to complete the business combination such as investment banking, legal and other professional fees are not considered part of consideration and the Company charges them to general and administrative expense as they are incurred. | |||
During the measurement period, the Company adjusts the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. Measurement period adjustments are reflected retrospectively in all periods being presented in the financial statements. | |||
Goodwill | |||
The Company records goodwill when the fair value of consideration transferred in a business combination exceeds the fair value of the identifiable assets acquired and liabilities assumed. Goodwill and other intangible assets that have indefinite useful lives are not amortized, but the Company tests them for impairment annually during its fourth fiscal quarter and whenever an event or change in circumstances indicates that the carrying value of the asset is impaired. | |||
The authoritative guidance for the goodwill impairment model includes a two-step process. First, it requires a comparison of the carrying value of the reporting unit to its fair value. If the fair value is determined to be less than the carrying value, a second step is performed. In the second step, the Company compares the implied fair value of goodwill to its carrying value in the reporting unit. The shortfall of the fair value below carrying value, if any, would represent the amount of goodwill impairment charge. We are using the criteria in ASU no. 2011-08 Intangibles - Goodwill and Other (Topic 350): Testing Goodwill for Impairment, which permits the Company to make a qualitative assessment of whether it is more likely than not than not that a reporting unit's fair value is less than the carrying amount before applying the two-step goodwill impairment test. If the Company concludes that it is not more likely than not that the fair value of a reporting unit is less that its carrying amount, it would not need to perform the two-step impairment test for that reporting unit. | |||
The Company tests goodwill for impairment in the fourth quarter of each fiscal year, or sooner should there be an indicator of impairment as per ASC 350, Intangibles - Goodwill and Other. The Company periodically analyzes whether any such indicators of impairment exist. Such indicators include a sustained, significant decline in the Company's stock price and market capitalization, a decline in the Company's expected future cash flows, a significant adverse change in legal factors or in the business climate, unanticipated competition, and/or slower growth rate, among others. In the Company's case, the indicator is the continuing losses. | |||
Long-lived Assets and Intangible Assets | |||
In accordance with ASC 350, Intangibles - Goodwill and Other ("ASC 350"), intangible assets are carried at cost less accumulated amortization and impairment charges. Intangible assets are amortized on a straight-line basis over the expected useful lives of the assets, between three and ten years. Other indefinite life intangible assets are reviewed for impairment in accordance with ASC 350, on an annual basis, or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Measurement of any impairment loss for long-lived assets and amortizing intangible assets that management expects to hold and use is tested for impairment when amounts may not be recoverable. Impairment is measured based on the amount of the carrying value that exceeds the fair value of the asset. | |||
Property and Equipment, Internal Use Software and Third Party Software | |||
Property and equipment are initially recorded at cost. Additions and improvements are capitalized, while expenditures that do not enhance the assets or extend the useful life are charged to operating expenses as incurred. Included in property and equipment are certain costs related to the development of the Company's internally developed software technology platform. | |||
The Company has adopted the provisions of ASC 350-40, Accounting for the Costs of Computer Software developed or obtained for internal use (former AICPA SOP 98-1, "ASC 350-40"), and therefore the costs incurred in the preliminary stages of development are expensed as incurred. The Company capitalizes all costs related to software developed or obtained for internal use when management commits to funding the project; the preliminary project stage is completed and when technological feasibility is established. Software developed for internal use has generally been used to deliver hosted services to our customers. Technological feasibility is considered to have occurred upon completion of a detailed program design that has been confirmed by documenting the product specifications, or to the extent that a detailed program design is not pursued, upon completion of a working model that has been confirmed by testing to be consistent with the product design. Once a new functionality or improvement is released for operational use, the asset is moved from the property and equipment category "projects under construction" to a property and equipment asset subject to depreciation in accordance with the principle described in the previous sentence. Capitalization of such costs ceases when the project is substantially complete and ready for its intended use. Depreciation is applied using the straight-line method over the estimated useful lives of the assets once the assets are placed in service. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. There were no impairments to internal use software during the years ended December 31, 2013, 2012 or 2011. Capitalized costs of internal use software included in Property & Equipment was $2,603,731 and $1,962,315 at December 31, 2013 and 2012, respectively. The capitalized amount during the years ended December 31, 2013 and 2012 amounted to $3,505,742 and $1,731,341, respectively. The difference between capitalized amounts in the balance sheet and the amount adjusted from the Consolidated Statement of Comprehensive Loss is due to the use of different exchange rates for balance sheet and income statement items. | |||
Recent Accounting Pronouncements | |||
On July of 2013 the Financial Accounting Standards Board or FASB issued Accounting Standards Update, or ASU, No. 2013-11, Income Taxes (Topic 740), Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carry forward, a Similar Tax Loss, or a Tax Credit Carry forward exists. This guidance provides that an unrecognized tax benefit, or a portion thereof, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carry forward, except to the extent that carry forwards are not available to settle any additional income taxes that would result from disallowance of a tax position. The unrecognized tax benefit should be presented as a liability. This guidance is applicable for fiscal years and interim periods beginning after December 15, 2013. We are evaluating the potential impact of adopting this standard on our consolidated financial statements. | |||
On March 4, 2013, the FASB issued ASU 2013-05, Foreign Currency Matters (Topic 830) Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity ("ASU 2013-05"). ASU 2013-05 updates accounting guidance related to the application of consolidation guidance and foreign currency matters. This guidance resolves the diversity in practice about what guidance applies to the release of the cumulative translation adjustment into net income. This guidance is effective for interim and annual periods beginning after December 15, 2013. We are evaluating the potential impact of this adoption on our consolidated financial statements. | |||
On March of 2013, the FASB issued ASU No. 2013-05, Foreign Currency Matters (Topic 830)-Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. These amendments provide guidance on releasing Cumulative Translation Adjustments when a parent company sells partially equity method investments and in step acquisitions. The amendments are effective on a prospective basis for fiscal years and interim reporting periods beginning after December 15, 2013. The guidance is applicable to us in principle, but since its enactment, we have not derecognized any subsidiary or group of assets as of December 31, 2013. |
Allowance_for_Doubtful_Account
Allowance for Doubtful Accounts | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Allowance for Doubtful Accounts [Abstract] | ' | ||||||||||||||||||||||||
Allowance for Doubtful Accounts | ' | ||||||||||||||||||||||||
Note 4. Allowance for Doubtful Accounts | |||||||||||||||||||||||||
Accounts receivable are presented on the balance sheet net of estimated uncollectible amounts. The Company records an allowance for estimated uncollectible accounts in an amount approximating anticipated losses. Individual uncollectible accounts are written off against the allowance when collection of the individual accounts appears doubtful. The Company recorded an allowance for doubtful accounts of $7,693 and $559,120 as of December 31, 2013 and 2012, respectively. | |||||||||||||||||||||||||
Changes in the allowance for doubtful accounts are as follows: | |||||||||||||||||||||||||
Allowance for | Balance | Currency | Total Allowance | Additions- | Release for | Balance at | |||||||||||||||||||
doubtful | at the | revaluation | for doubtful | allowance for | doubtful | the end of | |||||||||||||||||||
accounts | beginning | B | accounts | doubtful | accounts | the period | |||||||||||||||||||
of the | A+B | accounts | |||||||||||||||||||||||
period | |||||||||||||||||||||||||
A | |||||||||||||||||||||||||
Year ended December 31, 2013 | $ | 559,120 | $ | 8,313 | $ | 567,433 | $ | 22,005 | $ | (581,745 | ) | $ | 7,693 | ||||||||||||
Year ended December 31, 2012 | $ | 436,546 | $ | 1,832 | $ | 438,378 | $ | 117,394 | $ | 3,348 | $ | 559,120 | |||||||||||||
Year ended December 31, 2011 | $ | 119,044 | - | $ | 119,044 | $ | 318,443 | $ | (941 | ) | $ | 436,546 |
Prepaid_Expenses_and_Other_Cur
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2013 | |
Prepaid Expenses and Other Current Assets [Abstract] | ' |
Prepaid Expenses and Other Current Assets | ' |
Note 5. Prepaid Expenses and Other Current Assets | |
Prepaid expenses and other current assets recorded at $2,254,213 as of December 31, 2013, compared with $1,821,218 as of December 31, 2012. As of December 31, 2013, $732,838 of the prepaid expenses was related to prepaid Value Added Tax ("VAT"). On December 31, 2012, prepaid VAT represented $534,327. |
Other_Assets
Other Assets | 12 Months Ended |
Dec. 31, 2013 | |
Other Assets [Abstract] | ' |
Other Assets | ' |
Note 6. Other Assets | |
Other assets at December 31, 2013 and December 31, 2012 are long-term in nature and were $1,412,408 and $1,038,306, respectively. Details on the composition of Other Assets are included below. | |
Due from Third Parties | |
On July 4, 2013 the Company provided a $150,000 loan to a third party at an interest rate of 5% per annum, with an option to acquire an equity interest. The loan is provided to fund the development and exploitation of applications using electronic medical health records. The loans will be repaid at the completion of the proof of concept. The loan has a carrying value of $160,518 as of December 31, 2013. | |
Long-term Deposit | |
As of December 31, 2013, there were long-term deposits to various telecom carriers and a deposit towards the French Tax Authorities amounting to $ 771,193, compared with $657,192 as of December 31, 2012. The deposits are refundable at the termination of the business relationship with the carriers. | |
Deferred Financing Costs | |
During 2013, the Company paid financing costs of $636,624 which were related to the issuance of two convertible notes in the quarter ended September 30, 2013: a 10% Convertible Note with a nominated amount of €2,000,000 (valued at $2,753,304) and another 10% Convertible Note with a nominated amount of €4,000,000 (valued at $5,506,608). These costs are amortized using the effective interest method over the term of each applicable convertible note. The outstanding deferred financing cost balances were $477,673 as of December 31, 2013 and $381,114 as of December 31, 2012. |
Impairment_of_Related_Party_Lo
Impairment of Related Party Loans | 12 Months Ended |
Dec. 31, 2013 | |
Impairment of Related Party Loans [Abstract] | ' |
Impairment of Related Party Loans | ' |
Note 7. Impairment of Related Party Loans | |
During 2012, the Company provided loans with an interest rate of 7% per annum to Elephant Security B.V., in the amount of $1,060,784. Elephant Security B.V. was a related party entity since it was majority owned and controlled by QAT, an affiliate of the Company. Following the bankruptcy of Elephant Security B.V. on January 30, 2013, all related loans and the associated accrued interest income of $57,160 have been impaired in the Consolidated Statement of Comprehensive Loss for the year ended December 31, 2012. |
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Property and Equipment [Abstract] | ' | ||||||||||
Property and Equipment | ' | ||||||||||
Note 8. Property and Equipment | |||||||||||
Property and equipment at December 31, 2013 and December 31, 2012 consisted of: | |||||||||||
Average | |||||||||||
Estimated | |||||||||||
Useful | December 31, | December 31, | |||||||||
Lives | 2013 | 2012 | |||||||||
Furniture and fixtures | 5 | 314,686 | 269,731 | ||||||||
Computer, communication and network equipment | 10-Mar | 24,287,111 | 17,056,396 | ||||||||
Software | 5 | 8,473,042 | 6,123,371 | ||||||||
Automobiles | 5 | 91,580 | 87,925 | ||||||||
Construction in progress for internal use software | 2,603,731 | 1,962,315 | |||||||||
Total property and equipment | 35,770,150 | 25,499,738 | |||||||||
Less: accumulated depreciation and amortization | (15,984,028 | ) | (12,411,467 | ) | |||||||
Total property and equipment, Net | $ | 19,786,122 | $ | 13,088,271 | |||||||
Computers, communications and network equipment includes the capitalization of our systems engineering and software programming activities. Typically, these investments pertain to the Company's: | |||||||||||
· | Intelligent Network (IN) platform; | ||||||||||
· | CRM provisioning Software; | ||||||||||
· | Mediation, Rating & Pricing engine; | ||||||||||
· | ValidSoft security software applications; | ||||||||||
· | Operations and business support software; | ||||||||||
· | Network management tools. | ||||||||||
Construction in progress consists of software projects in development that have not yet been completed. Capitalized costs of internal use software included in Property & Equipment was $2,603,731 and $1,962,315 at December 31, 2013 and 2012, respectively. |
Intangible_Assets
Intangible Assets | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Intangible Assets [Abstract] | ' | ||||||||||||||||||||||||
Intangible Assets | ' | ||||||||||||||||||||||||
Note 9. Intangible Assets | |||||||||||||||||||||||||
Intangible assets include customer contracts, telecommunication licenses and integrated, multi-country, centrally managed switch-based interconnects as well as ValidSoft Intellectual Property, including but not limited to software source codes, applications, customer list & pipeline, registration & licenses, patents and trademark/brands. | |||||||||||||||||||||||||
Intangible assets as of December 31, 2013 and 2012 consisted of the following: | |||||||||||||||||||||||||
Estimated | December 31, | December 31, | |||||||||||||||||||||||
Useful Lives | 2013 | 2012 | |||||||||||||||||||||||
Customer Contracts, Licenses , Interconnect & Technology | 10-May | $ | 13,005,460 | $ | 12,096,592 | ||||||||||||||||||||
ValidSoft IP & Technology | 10-Jan | 16,246,291 | 15,597,814 | ||||||||||||||||||||||
Total intangible assets | 29,251,751 | 27,694,406 | |||||||||||||||||||||||
Less: Accumulated Amortization | (11,484,600 | ) | (10,569,693 | ) | |||||||||||||||||||||
Less: Impairment charges | - | - | |||||||||||||||||||||||
Less: Accumulated Amortization ValidSoft IP & Technology | (9,096,474 | ) | (6,621,687 | ) | |||||||||||||||||||||
Total intangible assets, Net | $ | 8,670,677 | $ | 10,503,026 | |||||||||||||||||||||
The increase in intangible assets during the twelve months ended December 31, 2013 was due to the acquisition of Telnicity on April 1, 2013. See Note 11 of the Financial Statements for more information. | |||||||||||||||||||||||||
Total amortization expense for the year ended December 31, 2013 totaled $3,070,244 compared to $2,761,135 and $3,022,909 for 2012 and 2011, respectively. In 2013 and 2012, the Company did not record any impairment. In 2011 the Company recorded an impairment charge of ($522,726) in the Consolidated Statement of Comprehensive Loss and ($486,575) in the balance sheet. The assets impaired pertained primarily to the acquired two-stage dialing product offerings, which were part of the landline revenues. | |||||||||||||||||||||||||
Estimated future amortization expense related to our intangible assets is: | |||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | 2019 and | ||||||||||||||||||||
thereafter | |||||||||||||||||||||||||
Interconnect licenses and contracts | $ | 610,341 | $ | 266,175 | $ | 135,073 | $ | 77,556 | $ | 59,000 | $ | 32,500 | |||||||||||||
ValidSoft IP & Technology | 2,365,045 | 2,216,170 | 2,132,804 | 528,047 | 110,132 | 137,834 | |||||||||||||||||||
$ | 2,975,386 | $ | 2,482,345 | $ | 2,267,877 | $ | 605,603 | $ | 169,132 | $ | 170,334 |
Goodwill
Goodwill | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Goodwill [Abstract] | ' | ||||||||
Goodwill | ' | ||||||||
Note 10. Goodwill | |||||||||
The carrying value of the Company's goodwill as of December 31, 2013 and as of December 31, 2012 was as follows: | |||||||||
Goodwill | December 31, | December 31, | |||||||
2013 | 2012 | ||||||||
Goodwill ValidSoft Ltd | $ | 3,433,833 | $ | 3,433,833 | |||||
Goodwill Morodo Ltd. | 214,689 | 214,689 | |||||||
Goodwill Telnicity | 190,401 | - | |||||||
End of period exchange rate translation | (65,697 | ) | (211,791 | ) | |||||
Total | $ | 3,773,226 | $ | 3,436,731 | |||||
The increase in goodwill during the twelve months ended December 31, 2013 was due to the acquisition of most of the assets of Telnicity. See Note 11 of the Financial Statements for more information. | |||||||||
During the fourth quarter of 2013, the Company commenced its annual goodwill impairment test for 2013 and after considering qualitative factors including our market capitalization and the Company's 2013 outlook, management concluded that a two-step goodwill impairment test was not required. |
The_acquisition_of_assets_of_T
The acquisition of assets of Telnicity | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
The acquisition of assets of Telnicity [Abstract] | ' | ||||
The acquisition of assets of Telnicity | ' | ||||
Note 11. The acquisition of assets of Telnicity | |||||
On April 1, 2013, the Company, through its subsidiary Elephant Talk North America Corp, entered into an asset purchase agreement to acquire most of the assets of Telnicity LLC, a company established in the U.S. The transaction was accounted for as a business combination. The assets provide access to the U.S. mobile telecommunications market through Telnicity's relationships with several major U.S.-based mobile telecommunication companies as well as its complementary technological mobile capabilities. The net assets and operations are consolidated into the financials of the Company as of April 1, 2013. | |||||
Consideration paid | Total | ||||
Consideration | |||||
Number of shares of Common Stock | 1,000,000 | ||||
Fair value of the share price at April 1, 2013 | $ | 1.18 | |||
Total Consideration Paid | $ | 1,180,000 | |||
Following the valuation of Telnicity, the Company allocated the above purchase price to the identifiable assets and liabilities. A summary of the assets acquired assumed for Telnicity are: | |||||
Estimated fair values: | |||||
Assets acquired | $ | 989,599 | |||
Liabilities assumed | - | ||||
Net assets acquired | 989,599 | ||||
Consideration paid | 1,180,000 | ||||
Goodwill | $ | 190,401 | |||
During the third quarter of 2013, the Company prepared a preliminary internal fair value analysis of Telnicity's intangible assets and allocated the following values: $218,599 to relationship with customers, $366,112 to relationships with carriers and $404,888 to technology and intellectual property, which have been presented on the balance sheet in the line item "Customer Contracts, Licenses, Interconnect & Technology" totaling $989,598. The Company recorded $190,401 of goodwill, which is not deductible for income tax purposes. The intangible assets recognized have useful lives ranging from three to five years, based on estimates of the life of the customer relationship, the contractual life of contracts with carriers and government authorities/licenses. Related transaction costs (legal fees) amounted to $15,885 and were expensed as incurred. | |||||
The above mentioned amounts represent the preliminary allocation of purchase price, and are subject to revision when the purchase price adjustments are finalized, which will occur in the first quarter of 2014. We are refining the discount and attrition rates used, and the forecasts used for the valuation of the acquired intangibles. | |||||
The assets and operations are consolidated into the financial statements of the Company as of April 1, 2013, and amounted to $91,885 of revenues and $903,245 of losses in 2013. The amount of revenues and earnings (losses) of Telnicity in 2012 amounted to $570,223 (unaudited) of revenues and $159,784 (unaudited) of losses as of September 30, 2012 (comparative information provided as supplemental information). |
Overdraft_and_Loan_Payable
Overdraft and Loan Payable | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Overdraft and Loan Payable [Abstract] | ' | ||||||||
Overdraft and Loan Payable | ' | ||||||||
Note 12. Overdraft and Loan Payable | |||||||||
In 2004, Elephant Talk Ltd, a subsidiary of the Company, executed a credit facility with a bank in Hong Kong pursuant to which Elephant Talk Ltd. borrowed funds. As of December 31, 2013, the overdraft balance, including accrued interest totaled $391,436, compared to $350,114 as of December 31, 2012. The interest rate and default payment interest rate were charged at 2% and 6% per annum respectively, above the lender's Hong Kong Dollar Prime Rate quoted by the lender from time to time. The Company has not guaranteed the credit facility nor is it otherwise obligated to pay funds drawn upon it on behalf of Elephant Talk Ltd. | |||||||||
The related loans payable at December 31, 2013 and 2012 are summarized as follows: | |||||||||
December | December | ||||||||
31, 2013 | 31, 2012 | ||||||||
Installment loan payable due December 24, 2006, secured by personal guarantees of two stockholders, a former director, and a third party | $ | 320,358 | $ | 320,491 | |||||
Installment loan payable, monthly principal and interest payments of $2,798 including interest at bank's prime rate plus 1.5% per annum, 8.25% at November 30, 2008, due December 24, 2011, secured by personal guarantees of three stockholders and a former director | 254,696 | 254,800 | |||||||
Installment loan payable, monthly principal and interest payments of $1,729 including interest at bank's prime rate plus 1.5% per annum, 8.25% at November 24, 2008, due June 28, 2009, secured by personal guarantees of three stockholders and a former director | 103,897 | 103,940 | |||||||
Term loan payable, monthly payments of interest at bank's prime rate, 7.0% at December 31, 2007 | 283,703 | 283,820 | |||||||
Total | $ | 962,654 | $ | 963,051 | |||||
In December 2009 Chong Hing Bank Limited, formerly known as Liu Chong Hing Bank Limited, a foreign banking services company based in Hong Kong (Bank), commenced a lawsuit in the California Orange County Superior Court called Chong Hing Bank Limited v. Elephant Talk Communications, Inc., Case No. 30-2009-00328467. | |||||||||
The Bank alleged that it entered into various installment and term loan agreements and an overdraft account with ETL, a wholly-owned Hong Kong subsidiary of the Company. Various former officers and directors of ETL personally guaranteed the loans and overdraft account. | |||||||||
The Bank alleged that ETL was in default on the loans and overdraft account, and that approximately $1,933,308 including interest and default interest was due. The Bank alleged that the Company was directly liable to repay the loans and overdraft account as a successor in interest to ETL or because the Company expressly or impliedly assumed direct liability for the loans and overdraft account. The Company denied the Bank's allegations and asserted several affirmative defenses. The Company contended that it had no direct liability to the Bank, and that the Bank must pursue its recourse against ETL and its personal guarantors. | |||||||||
The Bank and the Company tried the case to the court without a jury between October, 5 and 12, 2011. The court found, among other things, that | |||||||||
· | The Company was not liable as a successor in interest or otherwise on the Bank loans and overdraft account to ETL; | ||||||||
· | The Company was not liable on the Bank's claims because the Bank filed its action after the applicable California 4-year statute of limitations had expired; and | ||||||||
· | The Company was not liable to the Bank under the alternative theories of negligent or intentional misrepresentation. | ||||||||
The court entered judgment in favor of Elephant Talk Communications Corp. and against the Bank on December 14, 2011, and awarded the Company $5,925 in costs. The judgment became final on February 16, 2012. The Company continues to accrue for these loans since its subsidiary ETL in Hong Kong, alleged by the Bank as the contractual party, may be still held liable for these loans. |
Deferred_Revenue
Deferred Revenue | 12 Months Ended |
Dec. 31, 2013 | |
Deferred Revenue [Abstract] | ' |
Deferred Revenue | ' |
Note 13. Deferred Revenue | |
Because the Company recognizes revenue upon performance of services, deferred revenue represents amounts received from the customers against future sales of services, such as in pre-paid mobile services, pre-paid maintenance fees and mobile and security project work. . Deferred revenue was $142,731 and $252,551 as of December 31, 2013 and December 31, 2012, respectively. |
Accrued_expenses
Accrued expenses | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accrued Expenses [Abstract] | ' | ||||||||
Accrued Expenses | ' | ||||||||
Note 14. Accrued Expenses | |||||||||
As of December 31, 2013 and December 31, 2012, the accrued expenses were comprised of the following: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Accrued Selling, General & Administrative expenses | $ | 2,271,086 | $ | 2,175,845 | |||||
Accrued cost of service | 547,111 | 648,958 | |||||||
Accrued taxes (including VAT) | 255,577 | 288,651 | |||||||
Accrued interest payable | 1,300,101 | 882,181 | |||||||
Other accrued expenses | 587,428 | 124,901 | |||||||
Total accrued expenses | $ | 4,961,303 | $ | 4,120,536 | |||||
Within accrued taxes is income taxes payable as of December 31, 2013 amounting to $88,420. See Note 27 of the Financial Statements for more information. | |||||||||
Accrued Selling, General & Administrative expenses include social security premiums, personnel related costs such as payroll taxes, provision for holiday allowance, accruals for marketing & sales expenses, and office related expenses. |
10_Related_Party_Loan_and_Conv
10% Related Party Loan and Convertible Note (Convertible Note One [Member]) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Convertible Note One [Member] | ' | ||||||||
Debt Instrument [Line Items] | ' | ||||||||
10% Convertible Note | ' | ||||||||
Note 15. 10% Related Party Loan and Convertible Note | |||||||||
The following table shows the composition of the 10% Related Party Loan and Convertible Note as shown in the Consolidated Statement of Financial Position: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
10% Convertible Note (principal amount) | € | 2,000,000 | € | - | |||||
Exchange rate December 31, 2013: EURO 0.7264=$1 | |||||||||
10% Convertible Note | $ | 2,753,304 | $ | - | |||||
Less: | |||||||||
Debt Discount (Beneficial Conversion Feature) | 728,332 | - | |||||||
Debt Discount (Extended Warrants) | 849,451 | - | |||||||
Debt Discount (Warrants) | 141,800 | - | |||||||
10% Related Party Loan and Convertible Note (Net of Debt Discount) | $ | 1,033,721 | $ | - | |||||
In August 17, 2013, the Company issued a Convertible Note for the amount of € 2,000,000 ($2,753,304 at December 31, 2013) to an affiliate investor at an interest rate of 10% per annum. At any time after August 17, 2013, the Convertible Note is convertible, in whole or in part, at the option of the investor, into a number of shares of Common Stock of the Company equal to the quotient of the outstanding balance under the Convertible Note by $0.887. The Convertible Note also contains default provisions, including provisions for potential acceleration of the Convertible Note. Interest is computed on the basis of the actual number of days elapsed in a 365-day year, and shall accrue from the date negotiated, and shall continue to accrue on the outstanding principal balance until paid in full or converted. The maturity date is July 2, 2014. | |||||||||
In conjunction with the issuance of the Convertible Note, on August 17, 2013, the Company issued a Warrant to the investor to purchase 1,000,000 shares of restricted Common Stock. The Warrant is exercisable at any time on or after February 17, 2014 at a price of $0.887 per share for a term of 5 years, after the issuance date. In connection with the issuance of the Convertible Note and the Warrant, the Company also issued letters of extension to certain investors holding warrants issued previously by the Company to purchase shares of Common Stock of the Company. Pursuant to the Extensions, the expiration date of these registered warrants has been extended for a period of two years from the original expiration date of these warrants, which now expire in 2015. | |||||||||
The securities underlying the Warrant and the shares of Common Stock issuable upon conversion of the Convertible Note have not been registered under the Securities Act, as amended, or any state securities laws. | |||||||||
The Company concluded that the Warrants and the extended warrants do not require liability classification and are considered equity instruments. The Warrants are recognized at the relative fair value on the issue date of the Convertible Note as a debt discount and will be amortized using the effective interest method from issuance to the maturity date of the Convertible Note. The other warrants were valued using the binomial model and a relative fair value at issuance of $1,535,656 was determined and accounted for as debt discount of which currently $544,404 has been amortized and accounted for in the Consoldiated Statement of Comprehensive Loss in 2013. At December 31, 2013, the balance of the debt discount due to warrants was $991,251. Also, a beneficial conversion feature of $1,132,404 was identified, of which $404,072 has been amortized, and the unamortized portion of the beneficial conversion feature amounted to $728,332 as of December 31, 2013. The embedded conversion feature is not required to be separated. |
10_3rd_Party_Loan_and_Converti
10% 3rd Party Loan and Convertible Note (Convertible Note Two [Member]) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Convertible Note Two [Member] | ' | ||||||||
Debt Instrument [Line Items] | ' | ||||||||
10% Convertible Note | ' | ||||||||
Note 16. 10% 3rd Party Loan and Convertible Note | |||||||||
The following table shows the composition of the 10% 3rd Party Loan and Convertible Note as shown in the Consolidated Statement of Financial Position: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
10% Convertible Note (principal amount) | € | 4,000,000 | € | - | |||||
Exchange rate December 31, 2013: EURO 0.7264=$1 | |||||||||
10% Convertible Note | $ | 5,506,608 | $ | - | |||||
Less: | |||||||||
Debt Discount (Warrants) | 726,695 | - | |||||||
10% 3rd Party Loan and Convertible Note (Net of Debt Discount) | $ | 4,779,913 | $ | - | |||||
In August 28, 2013, the Company issued a Convertible Note for the amount of €4,000,000 ($5,506,608 at December 31, 2013) to an accredited investor at an interest rate of 10% per annum with maturity date of August 28, 2015. At any time after August 28, 2013, the Convertible Note is convertible, in whole or in part, at the option of the investor, into a number of shares of Common Stock equal to the quotient of the outstanding balance under the Convertible Note divided by $0.887. The Convertible Note also contains default provisions, including provisions for potential acceleration of the Convertible Note. Interest is computed on the basis of the actual number of days elapsed in a 365-day year, and shall accrue from the date negotiated, and shall continue to accrue on the outstanding principal balance until paid in full or converted. The maturity date is August 28, 2015. | |||||||||
In conjunction with the issuance of the Convertible Note, on August 28, 2013, the Company issued a Warrant to the investor to purchase 2,000,000 shares of restricted Common Stock. The Warrant is exercisable at any time on or after February 28, 2014 at a price of $0.887 per share. The Warrant has a five year term. | |||||||||
The securities underlying the Warrant and the shares of Common Stock issuable upon conversion of the Convertible Note have not been registered under the Securities Act, as amended, or any state security laws. | |||||||||
The Company concluded that the Warrant does not require liability classification and is considered an equity instrument. The Warrants is recognized at a relative fair value on the issue date of the Note as a debt discount which was amortized using the effective interest method from issuance to the maturity date of the Note. The Warrant was valued using the binomial model at $864,394 on date of issuance of the Note. The debt discount balance at December 31, 2013 was $726,695. | |||||||||
The embedded conversion feature is not required to be separated. |
Conversion_and_Termination_of_
Conversion and Termination of the May 24, 2013 Loan Agreement | 12 Months Ended |
Dec. 31, 2013 | |
Conversion and Termination of the May 24, 2013 Loan Agreement [Abstract] | ' |
Conversion and Termination of the May 24, 2013 Loan Agreement | ' |
Note 17. Conversion and Termination of the May 24, 2013 Loan Agreement | |
On May 24, 2013, the Company entered into a certain loan agreement with a member of its board of directors pursuant to which the Company borrowed a principal amount of €1,000,000 at an interest rate of 12% per annum (the "May 24, 2013 Loan Agreement") and issued a warrant (the "May 24, 2013 Warrant") to the director to purchase 1,253,194 restricted shares of the Company's Common Stock, exercisable at $1.03 per share for a term of 5 years, with a mandatory cash exercise after 12 months in the event the average closing bid price is $1.55 or higher for 10 consecutive trading days. The Company used the proceeds from the Loan Agreement of May 24, 2013 primarily for working capital. The securities were offered and sold only in Europe to "accredited investors" (as defined in Rule 501(a) of the Securities Act) pursuant to an exemption from registration under Section 4(2) and Regulation S of the Securities Act. | |
Following ASC 470-20 Debt - Debt with Conversion and Other Options guidance, the Company allocated the fair market value, using the binomial valuation method, of the detachable warrants between equity and debt and accounted for the debt component separately, with the debt discount offset against paid-in capital. The debt discount was amortized using the effective interest method during the life of the loan. | |
On July 14, 2013, the Company entered into an amendment (the "Amendment") to terminate the Loan Agreement and cancel the Warrant. In exchange for termination of the Loan Agreement of May 24, 2013 and the cancellation of the May 24, 2013 Warrant, the Company entered into a Stock Purchase Agreement, dated July 15, 2013 (the "Purchase Agreement") with the director pursuant to which the Company agreed to convert the principal amount of the loan into 1,840,631 restricted shares of the Company's Common Stock, and resulting in gross proceeds amounting to $1,306,848 which were recorded in equity as of December 31, 2013. The conversion rate was calculated using the Euros (€) to USD ($) exchange rate as of July 12, 2013 which was $0.71 per share (the "Conversion"). The closing of the Conversion will occur upon satisfaction or waiver of the customary closing conditions set forth in the Purchase Agreement. | |
Upon conversion and termination of the loan agreement the Company accelerated the debt discount amortization, which resulted in a loss on extinguishment of debt of $44,506 in July 2013. |
8_Senior_Secured_Convertible_N
8% Senior Secured Convertible Note | 12 Months Ended |
Dec. 31, 2013 | |
8% Senior Secured Convertible Note [Abstract] | ' |
8% Senior Secured Convertible Note | ' |
Note 18. 8% Senior Secured Convertible Note | |
On June 11, 2013, Elephant Talk Communications Corp. entered into a purchase agreement (together, the "2013 Purchase Agreements") with each holder of the Company's Senior Secured Convertible Notes issued on March 29, 2012 pursuant to which the Company purchased the Convertible Notes at the purchase price equal to 110% of the aggregate of the outstanding principal amount of the Convertible Notes and interest due. The aggregate purchase price paid to the holders of the Convertible Notes was $6,701,824 which was paid out from the proceeds of the 2013 Share Purchase Agreements described in Note 19 of the Financial Statements. | |
The Purchase Agreement with the note holders resulted in the regular and accelerated amortization expenses during the second quarter of $349,639 for the original issue discount (OID), $1,179,732 for the conversion feature (CF) and $311,048 for the remaining financing costs of the note. The release of the balance of the fair market value of the conversion feature resulted in a gain of $451,779. Furthermore the 10% prepayment fee of $607,539 on the purchase price compared to the net outstanding principal was recorded as a loss in the Consolidated Statement of Comprehensive Loss as part of the Loss of Extinguishment of Debt. The total Loss on Extinguishment of Debt related to this transaction was calculated at an amount of $1,960,594. |
Registered_Direct_Offering_and
Registered Direct Offering and Warrant Liabilities | 12 Months Ended |
Dec. 31, 2013 | |
Registered Direct Offering and Warrant Liabilities [Abstract] | ' |
Registered Direct Offering and Warrant Liabilities | ' |
Note 19. Registered Direct Offering and Warrant Liabilities | |
In June 11, 2013, the "Company" entered into an Amendment No. 1 (the "Amendment to SPA") to certain Securities Purchase Agreement (the "SPA") dated June 3, 2013 with certain institutional and other investors ("DJ Investors") placed by Dawson James Securities Inc. (the "Placement Agent") and Mr. Steven van der Velden, the Chief Executive Officer and Chairman of the Board ("Affiliated Investors"), relating to a registered direct public offering by the Company (the "Offering"). The gross proceeds of this SPA were $12,000,000 and resulted in net proceeds of $11,292,500 after the deduction of $707,500 for fundraising related expenses to various parties involved. The majority of the net proceeds were used to pay off the outstanding Senior 8% Secured Convertible Notes issued in 2012. | |
The number of shares issued relating to this SPA amounted to 17,425,621, the number of warrants amounted to 7,841,537 and were covered by the registration statement filed in 2012 for an amount of $75,000,000 (S-3/A Amendment No. 2, File No. 333-181738 dated June 6, 2012). The Company determined the fair value of the remaining outstanding warrants, totaling 2,892,857 using a Monte-Carlo Simulation model, which as of December 31, 2013 amounted to $1,973,534. | |
The SPA included the issuance of 7,841,537 investor warrants ("investor warrants") and 183,284 warrants issued to the fund raise agent ("agent warrants" and together with the investor warrants, the "RD warrants"). The RD warrants have a five year term from the date of issuance, are exercisable at the price of $0.887 per share for the investor warrants and $0.853 per share for the agent warrants immediately from the date of issuance and include provisions governing the adjustments to the number of Warrant Shares issuable upon exercise of the RD warrants upon stock dividends, stock splits, and other events. The RD warrants may be transferred by a holder thereof in accordance with applicable securities laws. | |
In the event that among other things, the registration statement relating to the shares of Common Stock is not effective, a holder of RD Warrants will also have the right, in its sole discretion, to exercise its RD Warrants for a net number of RD Warrant Shares pursuant to the cashless exercise procedures specified in the RD Warrants. The RD Warrants may be exercised in whole or in part, and any portion of a RD Warrant not exercised prior to the termination date shall be and become void and of no value. The absence of an effective registration statement or applicable exemption from registration does not alleviate the Company's obligation to deliver Common Stock issuable upon exercise of a RD Warrant. | |
Each RD Warrant also allows the holder the ability, at any time after 90 days from the issuance of the RD Warrant through its expiration, to exchange the RD Warrant with the Company for shares of Common Stock equal to the value of the RD Warrant at the time of the exchange based on a negotiated Black-Scholes formula. Under certain circumstances, the holder may receive cash in lieu of such shares of Common Stock. | |
Under certain circumstances after 90 days from the issuance of the RD Warrant, in the event that the Common Stock trades at a price that is 20% or more above the exercise price of the RD Warrants for a period of twenty consecutive trading days (with an average daily volume equal to or greater than $350,000), the Company may require the holder of the RD Warrants to exercise the RD Warrants for cash. After the 90 days waiting period some RD Warrant holders indeed did decide to use their right to exchange their RD Warrants, and subsequently, the Company did use its right to issue shares instead of paying cash. The number of RD Warrants exchanged amounted to 5,131,965 which resulted in the issuance of 4,102,792 shares of Common Stock. The exchange of the RD Warrants did not result in any cash inflow or cash outflow. | |
If, at any time a RD Warrant is outstanding, the Company consummates any fundamental transaction, as described in the RD Warrants and generally including any consolidation or merger into another corporation, or the sale of all or substantially all of our assets, or other transaction in which the Common Stock is converted into or exchanged for other securities or other consideration, the holder of any RD Warrants will thereafter receive the securities or other consideration to which a holder of the number of shares of Common Stock then deliverable upon the exercise or exchange of such RD Warrants would have been entitled upon such consolidation or merger or other transaction. | |
The exercisability or exchangeability of the RD Warrants may be limited in certain circumstances if, after giving effect to such exercise or exchange, the holder or any of its affiliates would beneficially own (as determined pursuant to Section 13(d) of the Securities Act, as amended, and the rules and regulations promulgated thereunder) more than 9.9% of the Common Stock issued and outstanding. | |
According to ASC 480-10 Distinguishing Liabilities from Equity, the accounting for an equity instrument with detachable warrants classified as a liability reflects the notion that the consideration received upon issuance must be allocated between the instruments issued. Proceeds from the issuance of an equity instrument with stock purchase warrants are allocated to the two elements based on the following: (i) the liability element has initially been recorded at fair market value; and (ii) the remaining portion of the consideration has been allocated to the equity element. | |
The liability instrument will be re-evaluated at each reporting period with changes in the fair value recognized through the applicable period Consolidated Statement of Comprehensive Loss. |
Obligations_under_Capital_Leas
Obligations under Capital Leases | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Obligations under Capital Leases [Abstract] | ' | ||||||||
Obligations under Capital Leases | ' | ||||||||
Note 20. Obligations under Capital Leases | |||||||||
The Company has a number of financing arrangements with its vendors to acquire equipment and licenses. These trade arrangements contain maturity periods ranging from two to three years, and interest rates between 8.65% and Euribor (3M) +1.5% at different foreign exchange rates. The following is an analysis of the property & equipment acquired under capital leases, recorded in the Property & Equipment line item by major classes: | |||||||||
December | December | ||||||||
31, 2013 | 31, 2012 | ||||||||
Network equipment | $ | 1,642,759 | $ | - | |||||
Software licenses | 874,174 | - | |||||||
Other | 103,249 | - | |||||||
Total | $ | 2,620,182 | - | ||||||
Less: accumulated depreciation and amortization | $ | (101,209 | ) | $ | - | ||||
Total | $ | 2,518,973 | - | ||||||
The current portion of the Capital Leases of $1,302,838 as of December 31, 2013 is included in Current Liabilities "Obligations under capital leases" in the accompanying balance sheet and the long term portion of $845,529 is reported as "Non-current portion of obligations under capital lease" as of December 31, 2013. Accrued interest is included in 'Accrued expenses' in the balance sheet. Depreciation of assets recorded under the capital leases is included in depreciation expense. |
Loan_from_Joint_Venture_Partne
Loan from Joint Venture Partner | 12 Months Ended |
Dec. 31, 2013 | |
Loan from Joint Venture Partner [Abstract] | ' |
Loan from Joint Venture Partner | ' |
Note 21. Loan from Joint Venture Partner | |
The Company entered into a 51% owned joint venture with ET-UTS N.V. on December 17, 2008 and received an unsecured loan with a principal amount of ANG (Antillian Guilder) 724,264 ($402,424) at an interest rate of 8% per annum, from the 49% shareholder in the joint venture, United Telecommunication Services N.V. that is the government owned incumbent telecom operator of Curaçao. No maturity date has been fixed. The amount outstanding as of December 31, 2013 and 2012 was $602,047 and $555,907, respectively, inclusive of accumulated accrued interest and is reflected as a long term liability on the accompanying balance sheets. |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Fair Value Measurements [Abstract] | ' | ||||||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||||||
Note 22. Fair Value Measurements | |||||||||||||||||||||
The following tables summarize fair value measurements by level at December 31, 2013 for financial assets and liabilities measured at fair value on a recurring basis: | |||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||
Derivative Liabilities | |||||||||||||||||||||
Conversion feature | $ | - | $ | - | $ | - | $ | - | |||||||||||||
Warrant Liabilities | $ | - | $ | - | $ | 1,973,534 | $ | 1,973,534 | |||||||||||||
Total Derivatives Liabilities | $ | - | $ | - | $ | 1,973,534 | $ | 1,973,534 | |||||||||||||
The Company uses the Monte Carlo valuation model to determine the value of the remaining outstanding warrants from the Registered Direct Offering of June 2013, discussed in Note 19 under the title "Registered Direct Offering and Warrant Liabilities". Since this model requires special software and expertise to model the assumptions to be used, the Company hired a third party valuation expert. | |||||||||||||||||||||
The following table summarizes fair value measurements by level at December 31, 2012 for financial assets and liabilities measured at fair value on a recurring basis: | |||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||
Derivative Liabilities | |||||||||||||||||||||
Conversion feature | $ | - | $ | - | $ | 311,986 | $ | 311,986 | |||||||||||||
Warrant Liabilities | $ | - | $ | - | $ | - | $ | - | |||||||||||||
Total Derivative liabilities | $ | - | $ | - | $ | 311,986 | $ | 311,986 | |||||||||||||
The Company has classified the outstanding conversion feature into level 3 due to the fact that some inputs are not published and not easily comparable to industry peers. | |||||||||||||||||||||
The Company determines the "Fair Market Value" using a lattice model by using the following assumptions: | |||||||||||||||||||||
Number of outstanding conversion rights | |||||||||||||||||||||
The number of outstanding conversion rights is adjusted every re-measurement date after deducting the repayment of any principal amount during the previous reporting period. The number of conversion rights is determined by dividing the principal amount by the conversion price agreed in the convertible note agreement. | |||||||||||||||||||||
Stock price at valuation date | |||||||||||||||||||||
The closing stock price at re-measurement date being the last available closing price of the reporting period taken from www.nasdaq.com. | |||||||||||||||||||||
Exercise Price | |||||||||||||||||||||
The exercise price is fixed and determined in the note agreement. | |||||||||||||||||||||
Remaining Term | |||||||||||||||||||||
The remaining term is calculated by using the contractual expiration date of the note at the moment of re-measurement. | |||||||||||||||||||||
Expected Volatility | |||||||||||||||||||||
We estimate expected cumulative volatility giving consideration to the expected life of the note and calculated the annual volatility by using the continuously compounded return calculated by using the share closing prices of an equal number of days prior to the maturity date of the note (reference period). The annual volatility is used to determine the (cumulative) volatility of our common stock (=nnual volatility x SQRT (expected life)). | |||||||||||||||||||||
Risk-Free Interest Rate | |||||||||||||||||||||
We estimate the risk-free interest rate using the "Daily Treasury Yield Curve Rates" from the U.S. Treasury Department with a term equal to the reported rate, or derived by using both spread in intermediate term and rates, up to the maturity date of the note. | |||||||||||||||||||||
Expected Dividend Yield | |||||||||||||||||||||
We estimate the expected dividend yield by giving consideration to our current dividend policies as well as those anticipated in the future considering our current plans and projections. | |||||||||||||||||||||
Hereby we present the movements in the carrying value of the conversion feature discussed in the table above: | |||||||||||||||||||||
Conversion | Balance | Entered into | Change in fair | Extinguishment | Balance at | ||||||||||||||||
feature | at the | Conversion | value | of debt | the end of | ||||||||||||||||
beginning | feature on | (Convertible | the period | ||||||||||||||||||
of the | March 29, | Note) | |||||||||||||||||||
period | 2012 | ||||||||||||||||||||
A | |||||||||||||||||||||
Year ended December 31, 2013 | $ | 311,986 | - | $ | (232,266 | ) | $ | (79,720 | ) | - | |||||||||||
Year ended December 31, 2012 | - | $ | 2,699,312 | $ | (2,387,326 | ) | - | $ | 311,986 |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Stockholders' Equity [Abstract] | ' | ||||||||||||||||||||
Stockholders' Equity | ' | ||||||||||||||||||||
Note 23. Stockholders' Equity | |||||||||||||||||||||
(A) Common Stock | |||||||||||||||||||||
The Company is presently authorized to issue 250,000,000 shares Common Stock. The Company had 140,466,801 shares of common stock issued and outstanding as of December 31, 2013, an increase of 28,548,433 shares from December 31, 2012, largely due to the shares issued in connection with the 2013 Registered Direct Offering (described in Note 19 of the Financial Statements) which resulted in the issuance of a total of 17,425,621 shares; another 4,102,792 shares were issued as a result of "exchanges" of warrants which had been issued under the same Registered Direct Offering; 250,000 shares were issued as a result of a share purchase agreement with a non-affiliate investor; 1,493,667 shares were issued as a result of the exercise of 5,781,597 warrants; 809,737 shares were issued to employees as a result of exercised employee stock options; 775,985 shares were issued as consideration for executive officers and directors compensation; 400,000 shares were issued after a settlement agreement with a former landlord of one of our offices after termination of the rental contract; 200,000 shares were issued as consideration for consultancy services; 1,840,631 shares as a result of the conversion of convertible debt and 250,000 shares were issued for the acquisition of Morodo, and 1,000,000 shares were issued for the asset purchase agreement with Telnicity, which was concluded during the twelve months period ended December 31, 2013. | |||||||||||||||||||||
Reconciliation with Stock Transfer Agent Records: | |||||||||||||||||||||
The shares issued and outstanding as of December 31, 2013 according to the stock transfer agent's records are 140,712,701. The difference in number of issued shares recognized by the Company of 140,466,801 amounts to 245,900 and it is the result of the exclusion of the 233,900 unreturned shares from 'cancelled' acquisitions (pre-2006) and 12,000 treasury shares issued under the former employee benefits plan. | |||||||||||||||||||||
(B) Preferred Stock | |||||||||||||||||||||
The Company's Certificate of Incorporation ("Articles") authorizes the issuance of 50,000,000 shares of 0.00001 par value Preferred Stock. No shares of Preferred Stock are currently issued and outstanding. Under the Company's Articles, the board of directors has the power, without further action by the holders of the Common Stock, to designate the relative rights and preferences of the Preferred Stock, and issue the Preferred Stock in such one or more series as designated by the Board of Directors. The designation of rights and preferences could include preferences as to liquidation, redemption and conversion rights, voting rights, dividends or other preferences, any of which may be dilutive of the interest of the holders of the Common Stock or the Preferred Stock of any other series. The issuance of Preferred Stock may have the effect of delaying or preventing a change in control of the Company without further stockholder action and may adversely affect the rights and powers, including voting rights, of the holders of Common Stock. In certain circumstances, the issuance of Preferred Stock could depress the market price of the Common Stock. | |||||||||||||||||||||
During 2013 and 2012 the Company did not issue any shares of Preferred Stock, and 0 shares of Preferred Stock are outstanding. | |||||||||||||||||||||
(C) Warrants | |||||||||||||||||||||
Throughout the years the Company has issued warrants with varying terms and conditions related to multiple funding rounds, acquisitions and other transactions. The warrants outstanding at December 31, 2013 have been recorded and classified as equity, except as of December 31, 2013 the Company has recorded $1,973,534 in the balance sheet for the warrant liabilities issued in connection with the Registered Direct Offering described in Note 19. The Weighted Average Exercise Price for the currently outstanding warrants in the table below is $1.20. The below table summarizes the warrants outstanding as per the below reporting dates. | |||||||||||||||||||||
Outstanding | Exercise/ | Expiring | 2013 | 2012 | 2011 | ||||||||||||||||
Warrants | Conversion | ||||||||||||||||||||
price(s) | |||||||||||||||||||||
(range) | |||||||||||||||||||||
Warrants - Acquisitions | $0.63- $2.25 | 2013 | - | 3,437,953 | 3,879,485 | ||||||||||||||||
Warrants - Fundraising | $0.85- $2.00 | 2013 - 2018 | 37,229,230 | 46,322,101 | 46,867,101 | ||||||||||||||||
Warrants - Other | $2.21 | 2016 | 18,659 | 18,659 | 18,659 | ||||||||||||||||
37,247,889 | 49,778,713 | 50,765,245 |
Noncontrolling_Interest
Non-controlling Interest | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Non-controlling Interest [Abstract] | ' | ||||||||||||
Non-controlling Interest | ' | ||||||||||||
Note 24. Non-controlling Interest | |||||||||||||
The Company had non-controlling interests in several of its subsidiaries. The balance of the non-controlling interests as of December 31, 2013 and December 31, 2012 were as follows: | |||||||||||||
Noncontrolling interest | |||||||||||||
Balance at | |||||||||||||
Subsidiary | Noncontrolling | December | December | ||||||||||
Interest % | 31, 2013 | 31, 2012 | |||||||||||
ETC PRS UK | 49 | % | $ | 9,894 | $ | 9,434 | |||||||
ETC PRS Netherlands | 49 | % | 134,912 | 126,013 | |||||||||
ET Bahrain WLL | 1 | % | - | 3,438 | |||||||||
ET ME&A FZ LLC | 49.46 | % | - | 37,091 | |||||||||
Total | $ | 144,806 | $ | 175,976 | |||||||||
Net losses attributable tot noncontrolling interest were insignificant for all the years presented. |
Basic_and_diluted_net_loss_per
Basic and diluted net loss per share | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Basic and diluted net loss per share [Abstract] | ' | ||||||||||||
Basic and diluted net loss per Share | ' | ||||||||||||
Note 25. Basic and diluted net loss per share | |||||||||||||
Net loss per share is calculated in accordance with ASC 260, Earnings per Share ("ASC 260"). Basic net loss per share is based upon the weighted average number of common shares outstanding. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase Common Stock at the average market price during the period. The Company uses the if converted method for its senior secured convertible notes. Weighted average number of shares used to compute basic and diluted loss per share is the same since the effect of dilutive securities is anti-dilutive. | |||||||||||||
The diluted share base for fiscal 2013, 2012 and 2011 excludes incremental shares related to convertible debt, warrants to purchase Common Stock and employee stock options as follows: | |||||||||||||
Dilutive Securities | 2013 | 2012 | 2011 | ||||||||||
Convertible Notes | 9,635,838 | 2,957,855 | - | ||||||||||
Warrants | 37,247,889 | 49,778,713 | 50,765,245 | ||||||||||
Employee Stock Options | 34,272,503 | 12,280,717 | 7,868,989 | ||||||||||
81,156,230 | 65,017,285 | 58,634,234 | |||||||||||
These shares were excluded due to their anti-dilutive effect on the loss per share recorded in each of the years presented. No additional securities were outstanding that could potentially dilute basic earnings per share. |
2006_NonQualified_Stock_and_Op
2006 Non-Qualified Stock and Option Compensation Plan and 2008 Long Term Incentive Compensation Plan | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
2006 Non-Qualified Stock and Option Compensation Plan and 2008 Long Term Incentive Compensation Plan [Abstract] | ' | ||||||||||||
2006 Non-Qualified Stock and Option Compensation Plan and 2008 Long Term Incentive Compensation Plan | ' | ||||||||||||
Note 26. 2006 Non-Qualified Stock and Option Compensation Plan and 2008 Long Term Incentive Compensation Plan | |||||||||||||
2006 Non-Qualified Stock and Option Compensation Plan | |||||||||||||
The Company has a 2006 Non-Qualified Stock and Option Compensation Plan (the "2006 Plan"). Under the 2006 Plan, there are no stock options outstanding as of December 31, 2013; recently all remaining outstanding options expired. There are 103,450 shares that remain available for issuance under the 2006 Plan. During 2013, there were no option grants or exercises made under the 2006 Plan. During 2013, 75,000 options issued under the 2006 Plan have expired. | |||||||||||||
During the second quarter of 2013, 235,947 restricted shares were issued under the 2006 Plan as non-cash compensation granted to management and board members for service during the first quarter of 2013. During the third quarter of 2013, another 180,368 restricted shares were issued under the 2006 Plan as non-cash compensation granted to management and board members for service during the second quarter of 2013. During the fourth quarter of 2013, 169,725 restricted shares were issued under the Plan as non-cash compensation granted to management and board members for service during the third quarter of 2013. The shares issued under this plan as non-cash compensation granted to management and board members have been expensed in the Consolidated Statement of Comprehensive Loss for an amount of $531,030 for 2013. These non-cash compensation shares are accounted for and valued using the share price and number of shares issued at issuance date, and they vest immediately when issued. | |||||||||||||
2008 Long-Term Incentive Compensation Plan | |||||||||||||
In 2008, the Company adopted the 2008 Plan. The 2008 Plan initially authorized total awards of up to 5,000,000 shares of Common Stock, in the form of incentive and non-qualified stock options, stock appreciation rights, performance units, restricted stock awards and performance bonuses. The amount of Common Stock underlying the awards to be granted remained the same after the 25 to one reverse stock-split that was effectuated on June 11, 2008. | |||||||||||||
In 2011, the stockholders approved an increase in the shares available under the 2008 Plan from 5,000,000 to 23,000,000 shares of Common Stock. As of December 31, 2013, 34,479,773 options and/or shares were issued and outstanding under the 2008 Plan, and there were 8,247,057 remaining shares available for issuance under the 2008 Plan. | |||||||||||||
In 2013, the Company's stockholders approved the amendment and restatement of the 2008 Plan, which increased the number of authorized shares from 23,000,000 to 46,000,000 shares of Common Stock. | |||||||||||||
Reconciliation of registered and available shares and/or options as of December 31, 2013: | |||||||||||||
Full Year 2013 | Total | ||||||||||||
Registered 2008 | - | 5,000,000 | |||||||||||
Registered 2011 | - | 18,000,000 | |||||||||||
Approved increase 2013 | - | 23,000,000 | |||||||||||
Total Registered under this plan | 46,000,000 | ||||||||||||
Shares (issued to): | |||||||||||||
Consultants | - | 325,000 | |||||||||||
Directors and Officers | 189,945 | 1,196,366 | |||||||||||
Options exercised | 809,737 | 1,751,804 | |||||||||||
Options (movements): | |||||||||||||
Issued and Outstanding | 34,479,773 | ||||||||||||
Available for grant at December 31, 2013: | 8,247,057 | ||||||||||||
During 2013, no shares were issued to consultants under the 2008 Plan, although the Company issued a total number of 325,000 shares to consultants during the term of the 2008 Plan. As of December 31, 2012, the Company began to issue non-cash compensation to directors and officers under this 2008 Plan. During the first quarter of 2013, the Company issued 189,945 restricted shares to various directors and officers under the 2008 Plan, which were issued in conjunction with their willingness to receive all or part of their cash compensation for the fourth quarter of 2012 in shares of the Company. Options issued to directors and officers vested immediately upon grant. | |||||||||||||
During the fourth quarter of 2013, the total authorized shares under the 2008 Plan increased by 23,000,000, and the increase was approved at the Company's shareholders meeting held at December 18, 2013. Currently a total of 34,479,773 stock options are outstanding at December 31, 2013 under the 2008 Plan. As of December 31, 2013, 325,000 shares of restricted Common Stock were issued to consultants, 1,196,366 shares of Common Stock were issued to directors and officers and another 1,751,804 shares were issued as a result of options that were exercised during the existence of this Plan. Options awards generally vest immediately or over a three-year period after the grant date. Options generally expire between three and four years from the date of grant. | |||||||||||||
Common Stock purchase options consisted of the following as of the years ended December 31, 2013, 2012 and 2011: | |||||||||||||
Number of | Weighted | Initial Fair | |||||||||||
Options | Average | Market | |||||||||||
Exercise | Value (Outstanding | ||||||||||||
Price | Options) | ||||||||||||
Options: | |||||||||||||
Outstanding as of December 31, 2010 | 4,083,100 | $ | 1.35 | $ | 5,002,238 | ||||||||
Granted in 2011 | 4,644,883 | $ | 2.52 | $ | 6,312,781 | ||||||||
Exercised (with delivery of shares) | -510,095 | $ | 1.14 | $ | -626,179 | ||||||||
Forfeitures (Pre-vesting) | (391,618 | ) | $ | 1.64 | $ | (458,144 | ) | ||||||
Expirations (Post-vesting) | -3,000 | $ | 0.82 | $ | -2,076 | ||||||||
Exchanged for Cashless exercise | -29,281 | $ | 1.24 | $ | -33,141 | ||||||||
Outstanding as of December 31, 2011 | 7,793,989 | $ | 2.03 | $ | 10,195,479 | ||||||||
Granted in 2012 | 6,107,719 | $ | 2.24 | $ | 7,259,422 | ||||||||
Exercised (with delivery of shares) | (431,972 | ) | $ | 1 | $ | (403,382 | ) | ||||||
Forfeitures (Pre-vesting) | (1,042,071 | ) | $ | 2.29 | $ | (1,404,105 | ) | ||||||
Expirations (Post-vesting) | (281,667 | ) | $ | 2.23 | $ | (398,199 | ) | ||||||
Exchanged for Cashless exercise | (43,916 | ) | $ | 1.66 | $ | (56,248 | ) | ||||||
Outstanding as of December 31, 2012 | 12,102,082 | $ | 2.15 | $ | 15,192,967 | ||||||||
Granted in 2013 | 24,393,106 | $ | 1.12 | $ | 1,163,197 | ||||||||
Exercised (with delivery of shares) | (809,737 | ) | $ | 0.66 | $ | (284,515 | ) | ||||||
Forfeitures (Pre-vesting) | (800,351 | ) | $ | 1 | $ | (807,662 | ) | ||||||
Expirations (Post-vesting) | (586,026 | ) | $ | 1.92 | $ | (648,529 | ) | ||||||
Exchanged for Cashless exercise | (26,571 | ) | $ | 0.6 | $ | (13,834 | ) | ||||||
Outstanding as of December 31, 2013 | 34,272,503 | $ | 1.47 | $ | 27,601,624 | ||||||||
In 2013, options awarded had a weighted average exercise price of $1.12. The grant date fair market value of the options, in the aggregate, was $14,163,197. | |||||||||||||
The weighted average assumptions used for the options granted in 2013 using the Black-Scholes options model are: expected cumulative volatility of 192% based on calculated annual volatility of 89%, contractual life of 5.1 years, expected option life of 4.7 years (using the simplified method) and a Risk Free Interest Rate of 1.5%. The expected dividend yield is zero. | |||||||||||||
Following is a summary of the status and assumptions used of options outstanding as of the years ended December 31, 2013, 2012 and 2011: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Grants | |||||||||||||
During the year | 24,496,741 | 6,211,354 | 4,644,883 | ||||||||||
Weighted Average Annual Volatility | 89 | % | 81 | % | 64 | % | |||||||
Weighted Average Cumulative Volatility | 192 | % | 134 | % | 152 | % | |||||||
Weighted Average Contractual Life of grants (Years) | 5.11 | 3.84 | 9.66 | ||||||||||
Weighted Average Expected Life of grants (Years) | 4.73 | 2.69 | 5.6 | ||||||||||
Weighted Average Risk Free Interest Rate | 1.5017 | % | 0.4553 | % | 1.8993 | % | |||||||
Dividend yield | 0 | % | 0 | % | 0 | % | |||||||
Weighted Average Fair Value at grant-date | $ | 0.58 | $ | 1.1 | $ | 1.45 | |||||||
Options Outstanding | |||||||||||||
Total Options Outstanding | 34,272,503 | 12,205,717 | 7,793,989 | ||||||||||
Weighted Average Remaining Contractual Life (Years) | 4.68 | 5.34 | 7.81 | ||||||||||
Weighted Average Remaining Expected Life (Years) | 4.91 | 5.02 | 6.93 | ||||||||||
Weighted Average Exercise Price | $ | 1.47 | $ | 1.73 | $ | 2.03 | |||||||
Aggregate Intrinsic Value (all options) | $ | (8,189,063 | ) | $ | (13,972,731 | ) | $ | 6,801,540 | |||||
Aggregate Intrinsic Value (only in-the-money options) | $ | 6,312,036 | $ | 100,611 | $ | 4,870,394 | |||||||
Options Exercisable | |||||||||||||
Total Options Exercisable | 18,180,371 | 4,358,510 | 1,284,547 | ||||||||||
Weighted Average Exercise Price | $ | 1.62 | $ | 1.96 | $ | 1.12 | |||||||
Weighted Average Remaining Contractual Life (Years) | 3.79 | 5.97 | 4.89 | ||||||||||
Aggregate Intrinsic Value (all options) | $ | (7,126,025 | ) | $ | (4,178,337 | ) | $ | 1,966,195 | |||||
Aggregate Intrinsic Value (only in-the-money options) | $ | 3,091,811 | $ | 100,465 | $ | 1,899,945 | |||||||
Unvested Options | |||||||||||||
Total Unvested Options | 16,299,402 | 7,847,207 | 6,509,442 | ||||||||||
Weighted Average Exercise Price | $ | 1.21 | $ | 2.25 | $ | 2.21 | |||||||
Forfeiture rate used for this period ending | 11.074 | % | 10.673 | % | 6.509 | % | |||||||
Options expected to vest | |||||||||||||
Number of options expected to vest corrected by forfeiture | 15,553,067 | 7,009,645 | 6,085,741 | ||||||||||
Unrecognized stock-based compensation expense | $ | 8,787,636 | $ | 3,014,397 | $ | 3,109,478 | |||||||
Weighted Average remaining contract life (Years) | 5.68 | 4.99 | 8.69 | ||||||||||
Exercises | |||||||||||||
Total shares delivered/issued | 809,737 | 431,972 | 510,095 | ||||||||||
Weighted Average Exercise Price | $ | 0.66 | $ | 1 | $ | 1.14 | |||||||
Intrinsic Value of Options Exercised | $ | 306,883 | $ | 177,547 | $ | 755,991 | |||||||
At December 31, 2013 the unrecognized expense portion of stock-based awards granted to employees under the 2008 Plan was approximately $8,787,636, under the provisions of ASC 718. The future expensing takes place proportionally to the vesting associated with each stock-award, adjusted for cancellations, forfeitures and returns. The forfeiture rate was adjusted from 10.74% as per closing December 2012 to 11.1% as per closing December 2013 and the corresponding profit and loss effect has been accounted for in 2013. | |||||||||||||
Stock-Based Compensation Expense | |||||||||||||
The Company recorded for the twelve months ended December 31, 2013, $8,515,391 in stock based compensation expense for the 2008 Plan. For the comparable period in 2012 the expensing was $6,302,140. The Company utilized the Black-Scholes valuation model for estimating the fair value of the stock-options at grant. The main reason for the nine month increase is caused by the grant and immediate vesting and therefore expensing of bonus options granted to employees as well as the options granted to the executive officers. During 2013, the Company issued 200,000 shares to a non-affiliate consultancy firm. The shares were valued at issuance for an amount of $152,000 and will be recognized as an expense in the Consolidated Statement of Comprehensive Loss in the line "Selling, general and administrative expenses" during the 12 months when the Company receives the services. As of December 31, 2013, $76,000 has been recognized in the Consolidated Statement of Comprehensive Loss. | |||||||||||||
Stock-Based Compensation Expense | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Consultancy services | $ | 76,000 | $ | - | $ | 714,259 | |||||||
Directors and officers (shares and options) | 4,510,240 | 1,141,812 | 1,448,192 | ||||||||||
Employee (options) | 3,929,151 | 5,160,329 | 4,656,454 | ||||||||||
$ | 8,515,391 | $ | 6,302,141 | $ | 6,818,905 | ||||||||
As explained in Note 1 to the Financial Statements, under the title "Reclassification of changes to prior year information", certain reclassifications have been made to the 2012 and 2011 Financial Statements to conform to the current year presentation. Prior to June 30, 2013, the Company presented the stock-based compensation as one line item in the Company's Consolidated Statement of Comprehensive Loss. The Company now includes the stock-based compensation within Selling, General & Administrative expenses line in the Consolidated Statement of Comprehensive Loss. These reclassifications had no effect on previously reported results of operations or retained earnings. |
Income_taxes
Income taxes | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income taxes [Abstract] | ' | ||||||||
Income taxes | ' | ||||||||
Note 27. Income taxes | |||||||||
For financial statement purposes, loss before the income tax provision is divided amongst the following; | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Domestic | $ | (14,759,886 | ) | $ | (6,574,394 | ) | |||
Foreign | (7,572,030 | ) | (16,268,406 | ) | |||||
Total | $ | (22,331,916 | ) | $ | (22,842,800 | ) | |||
The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The applicable statutory tax rates vary between none (zero) and 34%. However, because the Company and its subsidiaries have incurred annual corporate income tax losses since their inception, management has determined that it is more likely than not that the Company will not realize the benefits of its US and foreign net deferred tax assets. Therefore, the Company has recorded a full valuation allowance to reduce the net carrying amount of the deferred taxes to zero. The Company's 2013 provision for income taxes relates to current foreign income tax amounting to $88,835 reduced by the release of the potential income tax exposure booked in 2013 and amounting to euro 225,000 ($289,136) which was settled in the current year. | |||||||||
In the ordinary course of business the Company is subject to tax examinations in the jurisdictions in which it files tax returns. The Company's statute of limitations for tax examinations is four years for federal and state purposes and four to six years in the major foreign jurisdictions in which the company files. | |||||||||
Income tax expense (benefit) for the period ended December 31, 2013 and December 31, 2012 is summarized as follows: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Current: | |||||||||
Federal | $ | - | $ | - | |||||
State | - | - | |||||||
Foreign | (200,301 | ) | 289,136 | ||||||
Deferred: | |||||||||
Federal | - | - | |||||||
State | - | - | |||||||
Foreign | - | $ | - | ||||||
Income tax expense (benefit) | $ | (200,301 | ) | $ | 289,136 | ||||
The following is a reconciliation of the provision for income taxes at the US federal statutory rate (34%) to the foreign income tax rate at December 31, 2013: | |||||||||
2013 | 2012 | ||||||||
Tax expense (credit) at statutory rate-federal | 34 | % | 34 | % | |||||
Other | 1.2 | % | (1.3 | )% | |||||
State tax expense net of federal tax | - | - | |||||||
Foreign income tax rate difference | (10.1 | )% | (8.4 | )% | |||||
Change in valuation allowance | (24.3 | )% | (25.6 | )% | |||||
Tax expense at actual rate | (0.8 | )% | (1.3 | )% | |||||
The tax effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities at December 31, 2013 are as follows: | |||||||||
Deferred tax assets: | 2013 | 2012 | |||||||
Net Operating Losses | $ | 35,701,315 | $ | 30,552,587 | |||||
Total gross deferred tax assets | 35,701,315 | 30,552,587 | |||||||
Less: Valuation allowance | (35,701,315 | ) | (30,552,587 | ) | |||||
Net deferred tax assets | $ | - | $ | - | |||||
As of December 31, 2013 and 2012, the Company had significant net operating losses carryforwards. The deferred tax assets have been offset by a full valuation allowance in 2013 and 2012 due to the uncertainty of realizing any tax benefit for such losses. Releases of the valuation allowances, if any, will be recognized through earnings. | |||||||||
As of December 31, 2013 and 2012, the Company had net federal and state operating loss carryforwards of approximately $ 39 million and $28 million, respectively. Federal and state net operating loss carry forwards in the US start to expire in 2018. The net operating loss carryforwards for foreign countries amounts to approximately $105 million. Losses in material foreign jurisdictions will begin to expire in 2014. | |||||||||
Section 382 of the Internal Revenue Code limits the use of net operating loss and tax credit carry forwards in certain situations where changes occur in the stock ownership of a company. In the event the Company has a change in ownership, utilization of the carry forward could be restricted. | |||||||||
The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. Due to the net operating loss, all the tax years are open for tax examination. As of December 31, 2013 and 2012, the Company accrued ASC 740-10 tax reserve of $0 and $289,136 for uncertain tax liability including interest and penalties. This provision has been released as of December 31, 2013 because the issue was effectively settled and management determined that a reserve was no longer required. | |||||||||
The Company does not currently anticipate recording any amount for unrecognized tax benefits within the next 12 months. The following table summarizes the 2012 and 2013 activity related to the unrecognized tax benefits and related tax carry forward: | |||||||||
Balance at December 31, 2011 | $ | 20,000 | |||||||
Decreases related to prior year tax positions | $ | (10,000 | ) | ||||||
Increases related to current year tax positions | $ | 279,136 | |||||||
Balance at December 31, 2012 | $ | 289,136 | |||||||
Increases related to prior year tax positions | $ | - | |||||||
Decreases related to prior year tax positions | $ | (289,136 | ) | ||||||
Increases related to current year tax positions | $ | - | |||||||
Balance at December 31, 2013 | $ | 0 |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2013 | |
Contingencies [Abstract] | ' |
Contingencies | ' |
Note 28. Contingencies | |
Rescission of the Purchase Agreement of March 31, 2004 of New Times Navigation Limited. | |
As previously described in our 2004 Annual Report on Form 10-K, the Company and New Times Navigation mutually agreed to terminate a purchase agreement. The Company returned the shares filed on April 1, 2005, on May 24, 2004, the Company issued 5,100,000 shares of restricted Common Stock to four shareholders of New Times Navigation Limited ("NTVL") and the Company received back 90,100 of its shares of Common Stock out of the 204,000 issued under the terms of the purchase agreement. In addition, the Company issued 37 unsecured convertible promissory notes for a total amount of $3,600,000. Upon the Company's request 21 of the unsecured convertible promissory notes were returned for a total value of $2,040,000. | |
On April 28, 2006 the Company instituted proceedings to seek relief from the High Court of the Hong Kong Special Administrative Region against the holders of the unreturned shares to return the remaining 113,900 shares of common stock (valued at $381,565) and return the remaining 18 unsecured convertible promissory notes, representing a total amount of $1,740,000, and rescind the purchase agreement underlying the Purchase Transaction. The case is currently pending. | |
Other. | |
The Company is involved in various claims and lawsuits incidental to our business. In the opinion of management, the ultimate resolution of such claims and lawsuits will not have a material effect on our financial position, liquidity, or results of operations. |
Geographic_Information
Geographic Information | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Geographic Information [Abstract] | ' | ||||||||||||
Geographic Information | ' | ||||||||||||
Note 29. Geographic Information | |||||||||||||
Twelve months ended December 31, 2013 | |||||||||||||
Europe | Other foreign | Total | |||||||||||
countries | |||||||||||||
Revenues from unaffiliated customers | $ | 17,092,830 | $ | 5,734,431 | $ | 22,827,261 | |||||||
Identifiable assets | $ | 32,693,551 | $ | 10,623,889 | $ | 43,317,440 | |||||||
Twelve months ended December 31, 2012 | |||||||||||||
Europe | Other foreign | Total | |||||||||||
countries | |||||||||||||
Revenues from unaffiliated customers | $ | 29,053,151 | $ | 149,037 | $ | 29,202,188 | |||||||
Identifiable assets | $ | 35,682,490 | $ | 1,793,051 | $ | 37,475,541 |
Concentrations
Concentrations | 12 Months Ended |
Dec. 31, 2013 | |
Concentrations [Abstract] | ' |
Concentrations | ' |
Note 30. Concentrations | |
Financial instruments that potentially subject us to concentrations of credit risk consist of accounts receivable and unbilled receivables. Those customers that comprised 10% or more of our revenue, accounts receivable and unbilled receivables are summarized as follows: | |
For the year ended December 31, 2013, the Company had two customers that accounted for 48% and 15% of total revenue. For the year ended December 31, 2012, the Company had a customer, which accounted for 42% of the revenue. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2013 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
Note 31. Related Party Transactions | |
On May 24, 2013, the Company entered into a certain loan agreement with a member of its board of directors pursuant to which the Company borrowed a principal amount of €1,000,000 (the "Principal Amount") at an interest rate of 12% per annum ("Loan Agreement") and issued a warrant ("Warrant") to the director to purchase 1,253,194 restricted shares of the Company's Common Stock. On July 14, 2013, the Company entered into an amendment (the "Amendment") to terminate the Loan Agreement and cancel the Warrant. In exchange for termination of the Loan Agreement and the Warrant, the Company entered into a Stock Purchase Agreement, dated July 15, 2013 (the "Purchase Agreement") with the director pursuant to which the Company agreed to convert the Principal Amount of the loan into 1,840,631 restricted shares of the Company's Common Stock. See Note 17 of the Financial Statements for more information. | |
On June 3, 2013, the Company closed an affiliated registered direct offering with Steven van der Velden, our Chief Executive Officer and President for the purchase of 6,428,571 shares of Common Stock, at the purchase price of $0.70, and issued warrants to initially purchase an aggregate of 2,892,857 shares of Common Stock with an exercise price of $0.887 per share (the "Affiliate Offering"). Mr. van der Velden cannot exercise the warrants until, amongst other things, the issuance of the warrants is approved by our stockholders. Mr. van der Velden's participation in the Affiliate Offering was unanimously approved by our independent directors. | |
On August 17, 2013, the Company issued a Convertible Note to an accredited investor ("the Investor"), who is a director of QAT., an entity affiliated with certain officers and directors of the Company, pursuant to which the Company borrowed a principal amount of $2,652,600 (€2,000,000) at an interest rate of 10% per annum ("the Convertible Note"). At any time after August 17, 2013, the Convertible Note is convertible, in whole or in part, at the option of the investor, into a number of shares of the Company's Common Stock, par value $0.00001, equal to the quotient of the outstanding balance under the Convertible Note including accumulated interest divided by $0.887. The accumulated interest expensed during 2013 is $96,972. The Convertible Note also contains default provisions, including provisions for potential acceleration of the Convertible Note. | |
In conjunction with the issuance of the Convertible Note, on August 17, 2013, the Company issued a warrant ("the 2013 Warrant") to the Investor to purchase 1,000,000 shares of restricted Common Stock. The Warrant is exercisable at any time on or after February 17, 2013 at a price of $0.887 per share for a term of 5 years. In connection with the issuance of the Convertible Note and the 2013 Warrant, the Company also issued letters of extension ("the Extensions") to certain investors holding warrants issued previously by the Company ("the Old Warrants") to purchase shares of Common Stock of the Company. Pursuant to the Extensions, the expiration date of the Old Warrants has been extended for a period of two years from the original expiration date of the Old Warrants. The securities underlying the 2013 Warrant and the shares of Common Stock issuable upon conversion of the Convertible Note have not been registered under the Securities Act, as amended, or any state securities laws. See Note 15 of the Financial Statements for more information. | |
QMG, an entity affiliated with certain officers and directors of the Company served as fundraising agent for Stock Purchase Agreements (the "SPA") with a non-affiliated investor pursuant to which $225,000 was raised. QMG received a selling concession of 8%, or $18,000. | |
During 2013, QMG received $32,827 for provided office space, back office support and certain automobile travel expenses. | |
During 2013, Q.A.T. III Cooperatief U.A. ("QAT III"), an entity affiliated with certain officers and directors of the Company, was charged by the Company $7,967 for the occasional usage of the office in the Netherlands. | |
During 2013, Johan Dejager, a director of the Company, and Yves van Sante, a board observer of the Company elected to receive their compensation in shares of the Company's Common Stock for the first, third and fourth quarter of 2013. As such, the Company indirectly issued 21,863 shares to Mr. Dejager and 21,863 shares to Mr. van Sante, which are held directly by QAT II, and indirectly issued 21,863 shares to Mr. Dejager and 21,863 shares to Mr. van Sante, which are held directly by QAT. The value of the shares issued to QAT and QAT II was $50,544, respectively. In addition, for the second quarter of 2013, Messrs. Dejager and van Sante elected to receive their compensation in cash. Accordingly, cash compensation, in the aggregate, of $120,000 was paid to QAT and QAT II as compensation for Messrs. Dejager and van Sante. QAT and QAT II are both affiliated entities of the Company. |
Selected_Quarterly_Financial_D
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Selected Quarterly Financial Data (Unaudited) [Abstract] | ' | ||||||||||||||||
Selected Quarterly Financial Data (Unaudited) | ' | ||||||||||||||||
Note 32: Selected Quarterly Financial Data (Unaudited) | |||||||||||||||||
Selected quarterly financial data is as follows: | |||||||||||||||||
Year ended December 31, 2013 | |||||||||||||||||
Q1 | Q2 | Q3 | Q4 | ||||||||||||||
REVENUES | $ | 6,596,500 | $ | 4,994,145 | $ | 5,204,982 | $ | 6,031,634 | |||||||||
Cost of service | 3,548,277 | 1,465,517 | 1,080,174 | 1,055,185 | |||||||||||||
3,048,223 | 3,528,628 | 4,124,808 | 4,976,449 | ||||||||||||||
Selling, general and administrative expenses - Note 32a | 5,907,974 | 7,472,772 | 5,422,869 | 7,709,668 | |||||||||||||
LOSS FROM OPERATIONS | (4,179,739 | ) | (5,780,375 | ) | (2,861,748 | ) | (4,634,559 | ) | |||||||||
Adjusted EBITDA- Note 32b | (1,448,841 | ) | (949,095 | ) | (84,896 | ) | 143,048 | ||||||||||
NET LOSS | (5,137,923 | ) | (7,692,561 | ) | (3,225,592 | ) | (6,075,540 | ) | |||||||||
Net loss per common share and equivalents - basic and diluted | (0.05 | ) | (0.06 | ) | (0.07 | ) | (0.03 | ) | |||||||||
Note 32a | |||||||||||||||||
Until the third quarter of 2013, the Company has showed the non-cash compensation as a line item in the Consolidated Statement of Operations and Comprehensive Loss. This presentation is not in accordance with the guidance of SAB Topic 14.F, which requires that the expense related to share-based payment should be presented in the same line as where the cash compensation is presented | |||||||||||||||||
Note 32b - Adjusted EBITDA | |||||||||||||||||
In order to provide investors additional information regarding our financial results, we are disclosing Adjusted EBITDA, a non-GAAP financial measure. We employ Adjusted EBITDA, defined as earnings before derivative accounting, such as warrant liabilities and conversion feature expensing, income taxes, depreciation and amortization, impairments, non-operating income and expenses and stock-based compensation, for several purposes, including as a measure of our operating performance. We use Adjusted EBITDA because it removes the impact of items not directly resulting from our core operations, thus allowing us to better assess whether the elements of our growth strategy are yielding the desired results. Accordingly, we believe that Adjusted EBITDA provides useful information for investors and others which allow them to better understand and evaluate our operating results. | |||||||||||||||||
Adjusted EBITDA | 2013 | 2012 | 2011 | ||||||||||||||
Net loss - GAAP | $ | (22,131,615 | ) | $ | (23,131,936 | ) | $ | (25,310,735 | ) | ||||||||
Provision for income taxes | (200,301 | ) | 289,136 | - | |||||||||||||
Depreciation and amortization | 6,601,246 | 5,710,396 | 5,254,708 | ||||||||||||||
Stock-based compensation | 8,515,391 | 6,302,141 | 6,818,905 | ||||||||||||||
Interest income and expenses | 961,372 | 532,835 | 94,463 | ||||||||||||||
Interest expense related to debt discount and conversion feature | 2,069,649 | 1,089,126 | - | ||||||||||||||
Change in fair value of conversion feature | (232,267 | ) | (2,387,326 | ) | - | ||||||||||||
Loss on extinguishment of debt | 2,005,100 | - | - | ||||||||||||||
Changes in fair value of warrant liabilities | (479,322 | ) | - | - | |||||||||||||
Other income & (expense) | 302,112 | - | (460,000 | ) | |||||||||||||
Impairment of related party loans | - | 1,060,784 | - | ||||||||||||||
Amortization of deferred financing costs | 248,851 | 531,792 | - | ||||||||||||||
Equity in earnings of unconsolidated joint venture | - | 501,776 | - | ||||||||||||||
Intangible assets impairment charge | - | - | 522,726 | ||||||||||||||
Adjusted EBITDA | $ | (2,339,784 | ) | $ | (9,501,276 | ) | $ | (13,079,933 | ) | ||||||||
Year ended December 31, 2012 | |||||||||||||||||
Q1 | Q2 | Q3 | Q4 | ||||||||||||||
REVENUES | $ | 8,580,968 | $ | 7,084,969 | $ | 6,699,381 | $ | 6,836,870 | |||||||||
Cost of service | 6,889,217 | 5,185,048 | 4,603,588 | 4,141,474 | |||||||||||||
1,691,751 | 1,899,921 | 2,095,793 | $ | 2,695,396 | |||||||||||||
Selling, general and administrative expenses | 6,261,704 | 6,104,163 | 5,931,170 | 5,889,241 | |||||||||||||
LOSS FROM OPERATIONS | (5,848,422 | ) | (5,429,130 | ) | (5,098,514 | ) | $ | (5,137,747 | ) | ||||||||
Adjusted EBITDA - Note 32b | (2,878,207 | ) | (2,665,260 | ) | (2,125,974 | ) | (1,831,835 | ) | |||||||||
NET LOSS | (6,005,189 | ) | (4,990,909 | ) | (5,474,665 | ) | $ | (6,661,173 | ) | ||||||||
Net loss per common share and equivalents - basic and diluted | (0.05 | ) | (0.04 | ) | (0.05 | ) | $ | (0.06 | ) |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Note 33. Subsequent Events | |
On March 26, 2014, we announced in a press release the appointment of two independent directors to the Company's board of directors effective April 1, 2014. The two appointees will join our independent director as members of the Board's Audit and Finance Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. | |
On March 17, 2014, a warrant holder affiliated with the Company exercised certain of its warrants to purchase an aggregate of 5,332,383 shares of the Company's common stock at an exercise price of $0.70 per share, for gross proceeds to the Company of $3,732,668. The warrants were originally issued in 2009 with an exercise price of $1.00 per share. A Special Committee of the Company's board of directors authorized the reduction of the exercise price in order to induce the holder to immediately exercise the warrant for cash providing additional liquidity to the Company, which reduction was subsequently ratified by the Company's board of directors. |
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 12 Months Ended | ||
Dec. 31, 2013 | |||
Significant Accounting Policies [Abstract] | ' | ||
Principles of Consolidation | ' | ||
Principles of Consolidation | |||
The accompanying consolidated financial statements for December 31, 2013 and December 31, 2012 include the accounts of Elephant Talk Communications Corp., including: | |||
· | its wholly-owned subsidiary Elephant Talk Europe Holding B.V. and its wholly owned subsidiaries Elephant Talk North America Corp., Elephant Talk Communications Luxembourg SA, Elephant Talk Communications France S.A.S., Elephant Talk Communications Italy S.R.L., ET-Stream GmbH, Elephant Talk Business Services W.L.L., Guangzhou Elephant Talk Information Technology Limited, Elephant Talk Deutschland GmbH, Morodo Group Ltd., Elephant Talk Belgium BVBA, and the majority owned (51%) subsidiaries Elephant Talk Communications PRS U.K. Limited and (51%) ET-UTS NV; | ||
· | Elephant Talk Europe Holding B.V.'s wholly-owned subsidiary Elephant Talk Communication Holding AG and its wholly-owned subsidiaries Elephant Talk Communications S.L.U., Elephant Talk Mobile Services B.V., Elephant Talk Telekom GmbH, Elephant Talk Communication Carrier Services GmbH, Elephant Talk Communication Schweiz GmbH, Elephant Talk Communication (Europe) GmbH and the majority owned (51%) subsidiary Elephant Talk Communications Premium Rate Services Netherlands B.V.; | ||
· | Elephant Talk Telecomunicação do Brasil LTDA, owned 90% by Elephant Talk Europe Holding B.V. and 10% by Elephant Talk Communication Holding AG; | ||
· | Elephant Talk Europe Holding B.V.'s majority (60%) owned subsidiary Elephant Talk Middle East & Africa (Holding) W.L.L., its wholly owned (100%) and its majority owned (99%) subsidiaries Elephant Talk Middle East & Africa (Holding) Jordan L.L.C. and Elephant Talk Middle East & Africa Bahrain W.L.L.; | ||
· | its wholly-owned subsidiary Elephant Talk Limited ("ETL") and its majority owned (50.54%) subsidiary Elephant Talk Middle East & Africa FZ-LLC; and | ||
· | its wholly-owned subsidiary ValidSoft Ltd and its wholly-owned subsidiaries ValidSoft and ValidSoft (Australia) Pty Ltd.; and | ||
· | its wholly-owned subsidiary Elephant Talk Group International B.V., based in The Netherlands. | ||
Business combinations: | |||
On April 1, 2013, the Company, through its subsidiary Elephant Talk North America Corp, entered into an asset purchase agreement to acquire most of the assets of Telnicity LLC, a company established in the U.S. The assets and operations are consolidated into the financials of the Company as of April 1, 2013. Refer to Note 11 of the Financial Statements for more information. | |||
All intercompany balances and transactions are eliminated in consolidation. | |||
Foreign Currency Translation | ' | ||
Foreign Currency Translation | |||
The functional currency is Euros for the Company's wholly-owned subsidiary Elephant Talk Europe Holding B.V. and its subsidiaries, Euros for its wholly-owned subsidiary Elephant Talk Global Holding B.V., the Hong Kong Dollar for its wholly-owned subsidiary ETL and the British Pound Sterling for its wholly-owned subsidiary ValidSoft. The financial statements of the Company were translated to USD using period-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses, and capital accounts were translated at their historical exchange rates when the capital transaction occurred. In accordance with ASC 830, Foreign Currency Matters, net gains and losses resulting from translation of foreign currency financial statements are included in the statement of stockholder's equity as other comprehensive income (loss). Foreign currency transaction gains and losses are included in consolidated income/(loss), under the line item 'Other income/(expense)'. | |||
Use of Estimates | ' | ||
Use of Estimates | |||
The preparation of the accompanying financial statements conforms with accounting principles generally accepted in the U.S. and requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Significant areas of estimates include bad debt allowance, valuation of of financial instruments, useful lives and stock-based compensation. Actual results may differ from these estimates under different assumptions or conditions. | |||
Cash and Cash Equivalents | ' | ||
Cash and Cash Equivalents | |||
For purposes of the cash flow statements, the Company would normally consider all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. The Company has full access to the whole balance of cash and cash equivalents on a daily basis without any delay. | |||
Restricted Cash | ' | ||
Restricted Cash | |||
Restricted cash as of December 31, 2013 and 2012 was $191,600 and $1,230,918 respectively, and consists of cash deposited in blocked accounts as bank guarantees for national interconnection and wholesale agreements with telecom operators. The decrease in 2013 is due to the extinguishment of debt, as described in this section, under Notes 17 and 18 of the Financial Statements. | |||
Accounts Receivables, Net | ' | ||
Accounts Receivables, Net | |||
The Company's customer base consists of a geographically dispersed customer base. The Company maintains an allowance for potential credit losses on accounts receivable. The Company makes ongoing assumptions relating to the collectibility of our accounts receivable. The accounts receivable amounts presented on our balance sheets include reserves for accounts that might not be collected. In determining the amount of these reserves, the Company considers its historical level of credit losses. The Company also makes judgments about the creditworthiness of significant customers based on ongoing credit evaluations, and the Company assesses current economic trends that might impact the level of credit losses in the future. The Company's reserves have generally been adequate to cover its actual credit losses. However, since the Company cannot reliably predict future changes in the financial stability of its customers, it cannot guarantee that its reserves will continue to be adequate. If actual credit losses are significantly greater than the reserves, the Company has established that it would increase its general and administrative expenses and reduce its reported net losses. Conversely, if actual credit losses are significantly less than our reserve, this would eventually decrease the Company's general and administrative expenses and decrease its reported net losses. Allowances are recorded primarily on a specific identification basis. See Note 4 of the Financial Statements for more information. | |||
Leasing Arrangements | ' | ||
Leasing Arrangements | |||
At the inception of a lease covering equipment or real estate, the lease agreement is evaluated under the criteria of ASC 840, Leases. Leases meeting one of the four key criteria are accounted for as capital leases and all others are treated as operating leases. Under a capital lease, the discounted value of future lease payments becomes the basis for recognizing an asset and a borrowing, and lease payments are allocated between debt reduction and interest. For operating leases, payments are recorded as rent expense. Criteria for a capital lease include (i) transfer of ownership during the lease term; (ii) existence of a bargain purchase option under terms that make it likely to be exercised; (iii) a lease term equal to 75 percent or more of the economic life of the leased equipment; and (iv) minimum lease payments that equal or exceed 90 percent of the fair value of the property. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that type of asset. The assets are amortized as per our accounting policy for property & equipment, and intangibles, as applicable. | |||
Revenue Recognition and Deferred Revenue | ' | ||
Revenue Recognition and Deferred Revenue | |||
The Company derives revenue from outsourced services in telecommunications based activities by deploying its operational management services, network, switching technology and mobile enabling platform. Revenue represents amounts earned for these services provided to customers (net of value added tax). | |||
The Company follows ASC 605, Revenue Recognition ("ASC 605") and recognizes revenue when all of the following conditions have been met: (i) there is persuasive evidence of an arrangement; (ii) delivery has occurred; (iii) the fee is fixed or determinable; and (iv) collectability of the fee is reasonably assured. Revenues are recognized on a gross basis as the Company acts as principal in the transaction and has risk of loss for collection and delivery of service. | |||
In the landline business, and specifically in the Premium Rate Services (PRS), the Company provides technical, operational and financial telecom infrastructure to telecommunication service providersprovidersRevenues are recognized when delivery occurs based on a pre-determined rate, number of calls and number of user minutes that the Company has managed in a given month. | |||
For the mobile solutions the Company recognizes revenues from two different service offerings, namely managed services and bundled services. For managed services, revenues are recognized for network administration services provided to end users on behalf of Mobile Network Operators (MNO). Managed service revenues are recognized monthly based on an average number of end-users managed and calculated on a pre-determined service fee per user. For bundled services, the Company provides both network administration as well as mobile airtime management services. Revenues for bundled services are recognized monthly based on an average number of end-users managed and mobile air time and calculated based on a pre-determined service fee. | |||
For the security solutions we recognize revenues primarily from SIM lookup services using the VALid-SSD platform. Security solutions revenue is recognized based on the number of SIM lookups performed and calculated based on a pre-determined service fee per lookup. Other revenues recognized in the security business include consulting services which are recognized as the services are performed. | |||
Cost of Revenues and Operating Expenses | ' | ||
Cost of Revenues and Operating Expenses | |||
Cost of service includes origination, termination, network and billing charges from telecommunications operators, out payment costs to content and information providers, network costs, data center costs, facility costs of hosting network and equipment, and costs of providing resale arrangements with long distance service providers, costs of leasing transmission facilities and international gateway switches for voice and data transmission services. | |||
Within the caption "total costs and operating expenses" in line item selling, general and administrative expenses ("SG&A") in the accompanying statement of comprehensive loss, the Company presents the costs incurred in the development of the Company's services which are expensed as incurred. Costs incurred during the application development stage of internal-use software projects, such as those used in the Company's network operations, are capitalized in accordance with the accounting guidance for costs of computer software developed for internal use. | |||
Reporting Segments | ' | ||
Reporting Segments | |||
ASC 280, Segment Reporting ("ASC 280"), defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performances. The business operates as one single segment and discrete financial information is based on the whole, not segregted; and is used by the chief decision maker accordingly. | |||
Financial Instruments | ' | ||
Financial Instruments | |||
The carrying values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and customer deposits approximate their fair values based on their short-term nature. The recorded values of long-term debt approximate their fair values, as interest approximates market rates. The Company's conversion feature, a derivative instrument, is recognized in the balance sheet at its fair values with changes in fair market value reported in earnings. | |||
Fair Value Measurements | ' | ||
Fair Value Measurements | |||
In accordance with ASC 820 Fair Value Measurement (ASC 820), the Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date. ASC 820 establishes a fair value hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. | |||
Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company's assumptions about the inputs that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. | |||
The fair value hierarchy is categorized into three levels based on the inputs as follows: | |||
Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reported date. | |||
Level 2 - Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these financial instruments include cash instruments for which quoted prices are available but are traded less frequently, derivative instruments whose fair values have been derived using a model where inputs to the model are directly observable in the market and instruments that are fair valued using other financial instruments, the parameters of which can be directly observed. | |||
Level 3 - Instruments that have little to no pricing observability as of the reported date. These financial instruments are measured using management's best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. | |||
The degree of judgment exercised by the Company in determining fair value is greatest for securities categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined by the lowest level input that is significant to the fair value measurement. | |||
Stock-based Compensation | ' | ||
Stock-based Compensation | |||
The Company follows the provisions of ASC 718, Compensation-Stock Compensation, ("ASC 718"). Under ASC 718, stock-based awards are recorded at fair value as of the grant date and recognized as expense with an adjustment for forfeiture over the employee's requisite service period (the vesting period, generally up to three years). The stock-based compensation cost based on the grant date fair value is amortized over the period in which services are received. | |||
To determine the value of our stock options at grant date under our employee stock option plan, the Company uses the Black-Scholes option-pricing model. The use of this model requires the Company to make a number of subjective assumptions. The following addresses each of these assumptions and describes our methodology for determining each assumption: | |||
Expected Life | |||
The expected life represents the period that the stock option awards are expected to be outstanding. The Company uses the simplified method for estimating the expected life of the option, by taking the average between time to vesting and the contract life of the award. | |||
Expected Volatility | |||
The Company estimates expected cumulative volatility giving consideration to the expected life of the option of the respective award, and the calculated annual volatility by using the continuously compounded return calculated by using the share closing prices of an equal number of days prior to the grant-date (reference period). The annual volatility is used to determine the (cumulative) volatility of its Common Stock (=nnual volatility x square root (expected life)). | |||
Forfeiture rate | |||
The Company is using the aggregate forfeiture rate. The aggregate forfeiture rate is the ratio of pre-vesting forfeitures over the awards granted (pre-vesting forfeitures/grants). The forfeiture discount (additional loss) is released into the profit and loss in the same period as the option vesting-date. The forfeiture rate is actualized every reporting period. | |||
Risk-Free Interest Rate | |||
The Company estimates the risk-free interest rate using the "Daily Treasury Yield Curve Rates" from the U.S. Treasury Department with a term equal to the reported rate, or derived by using both spread in intermediate term and rates, to the expected life of the award. | |||
Expected Dividend Yield | |||
The Company estimates the expected dividend yield by giving consideration to our current dividend policies as well as those anticipated in the future considering our current plans and projections. The Company does not currently calculate a discount for any post-vesting restrictions to which our awards may be subject. | |||
Income Taxes | ' | ||
Income Taxes | |||
The Company accounts for income taxes under the provisions of ASC 740, Accounting for Income Taxes ("ASC 740"). Income taxes are provided on an asset and liability approach for financial accounting and reporting of income taxes. Current tax is based on the income or loss from ordinary activities adjusted for items that are non-assessable or disallowable for income tax purpose and is calculated using tax rates that have been enacted or substantively enacted at the balance sheet date. The recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carry-forwards. Establishment of a valuation allowance is provided when the likelihood of realization of deferred tax assets it is more -likely -than-not to be realized. Deferred taxes are recorded at tax rates for each respective tax jurisdictions in which the Company operates. | |||
In the ordinary course of a global business, there are many transactions and calculations where the ultimate tax outcome is uncertain. Some of these uncertainties arise as a consequence of revenue sharing and reimbursement arrangements among related entities, the process of identifying items of revenue and expenses that qualify for preferential tax treatment and segregation of foreign and domestic income and expense to avoid double taxation. | |||
The Company recognizes and measures benefits for uncertain tax positions using a two-step approach. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained upon audit, including resolution of any related appeals or litigation processes. For tax positions that are more likely than not of being sustained upon audit, the second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. Significant judgment is required to evaluate uncertain tax positions. The Company evaluates its uncertain tax positions on a quarterly basis. The Company's evaluations are based upon a number of factors, including changes in facts or circumstances, changes in tax law, correspondence with tax authorities during the course of audits and effective settlement of audit issues. Changes in the recognition or measurement of uncertain tax positions could result in material increases or decreases in our income tax expense in the period in which the Company makes the change, which could have a material impact on our effective tax rate and operating results. The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions and various foreign jurisdictions. The Company's income tax returns are open to examination by federal, state and foreign tax authorities, generally for the years ended December 31, 2008 and later, with certain state jurisdictions open for audit for earlier years. The Company had an amount of zero and $289,136 recorded for unrecognized tax losses at December 31, 2013 and 2012, respectively. The Company's policy is to record estimated interest and penalty related to the underpayment of income taxes or unrecognized tax benefits as part of other income and expenses. During the years ended 2013, 2012 and 2011, the Company did not recognize any interest or penalties in its statements of operations and there are no accruals for interest or penalties at December 31, 2013 or 2012. | |||
Comprehensive Income/(Loss) | ' | ||
Comprehensive Income/ (Loss) | |||
Comprehensive income/ (loss) include all changes in equity during a period from non-owner sources. For the years ended December 31, 2013 and 2012, the Company's comprehensive income/ (loss) consisted of its net loss and foreign currency translation adjustments. | |||
Business Combinations | ' | ||
Business Combinations | |||
The acquisition method of accounting for business combinations as per ASC 805, Business Combinations ("ASC 805"), requires us to use significant estimates and assumptions, including fair value estimates, as of the business combination date and to refine those estimates as necessary during the measurement period (defined as the period, not to exceed one year, in which the Company may adjust the provisional amounts recognized for a business combination). | |||
Under the acquisition method of accounting, the identifiable assets acquired, the liabilities assumed, and any non-controlling interests in an acquire are recognized at the acquisition date fair value. The Company measures goodwill as of the acquisition date as the excess of consideration transferred, over the net of the acquisition date fair value of the identifiable assets acquired and liabilities assumed. Costs that the Company incurs to complete the business combination such as investment banking, legal and other professional fees are not considered part of consideration and the Company charges them to general and administrative expense as they are incurred. | |||
During the measurement period, the Company adjusts the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. Measurement period adjustments are reflected retrospectively in all periods being presented in the financial statements. | |||
Goodwill | ' | ||
Goodwill | |||
The Company records goodwill when the fair value of consideration transferred in a business combination exceeds the fair value of the identifiable assets acquired and liabilities assumed. Goodwill and other intangible assets that have indefinite useful lives are not amortized, but the Company tests them for impairment annually during its fourth fiscal quarter and whenever an event or change in circumstances indicates that the carrying value of the asset is impaired. | |||
The authoritative guidance for the goodwill impairment model includes a two-step process. First, it requires a comparison of the carrying value of the reporting unit to its fair value. If the fair value is determined to be less than the carrying value, a second step is performed. In the second step, the Company compares the implied fair value of goodwill to its carrying value in the reporting unit. The shortfall of the fair value below carrying value, if any, would represent the amount of goodwill impairment charge. We are using the criteria in ASU no. 2011-08 Intangibles - Goodwill and Other (Topic 350): Testing Goodwill for Impairment, which permits the Company to make a qualitative assessment of whether it is more likely than not than not that a reporting unit's fair value is less than the carrying amount before applying the two-step goodwill impairment test. If the Company concludes that it is not more likely than not that the fair value of a reporting unit is less that its carrying amount, it would not need to perform the two-step impairment test for that reporting unit. | |||
The Company tests goodwill for impairment in the fourth quarter of each fiscal year, or sooner should there be an indicator of impairment as per ASC 350, Intangibles - Goodwill and Other. The Company periodically analyzes whether any such indicators of impairment exist. Such indicators include a sustained, significant decline in the Company's stock price and market capitalization, a decline in the Company's expected future cash flows, a significant adverse change in legal factors or in the business climate, unanticipated competition, and/or slower growth rate, among others. In the Company's case, the indicator is the continuing losses. | |||
Long-lived Assets and Intangible Assets | ' | ||
Long-lived Assets and Intangible Assets | |||
In accordance with ASC 350, Intangibles - Goodwill and Other ("ASC 350"), intangible assets are carried at cost less accumulated amortization and impairment charges. Intangible assets are amortized on a straight-line basis over the expected useful lives of the assets, between three and ten years. Other indefinite life intangible assets are reviewed for impairment in accordance with ASC 350, on an annual basis, or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Measurement of any impairment loss for long-lived assets and amortizing intangible assets that management expects to hold and use is tested for impairment when amounts may not be recoverable. Impairment is measured based on the amount of the carrying value that exceeds the fair value of the asset. | |||
Property and Equipment, Internal Use Software and Third Party Software | ' | ||
Property and Equipment, Internal Use Software and Third Party Software | |||
Property and equipment are initially recorded at cost. Additions and improvements are capitalized, while expenditures that do not enhance the assets or extend the useful life are charged to operating expenses as incurred. Included in property and equipment are certain costs related to the development of the Company's internally developed software technology platform. | |||
The Company has adopted the provisions of ASC 350-40, Accounting for the Costs of Computer Software developed or obtained for internal use (former AICPA SOP 98-1, "ASC 350-40"), and therefore the costs incurred in the preliminary stages of development are expensed as incurred. The Company capitalizes all costs related to software developed or obtained for internal use when management commits to funding the project; the preliminary project stage is completed and when technological feasibility is established. Software developed for internal use has generally been used to deliver hosted services to our customers. Technological feasibility is considered to have occurred upon completion of a detailed program design that has been confirmed by documenting the product specifications, or to the extent that a detailed program design is not pursued, upon completion of a working model that has been confirmed by testing to be consistent with the product design. Once a new functionality or improvement is released for operational use, the asset is moved from the property and equipment category "projects under construction" to a property and equipment asset subject to depreciation in accordance with the principle described in the previous sentence. Capitalization of such costs ceases when the project is substantially complete and ready for its intended use. Depreciation is applied using the straight-line method over the estimated useful lives of the assets once the assets are placed in service. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. There were no impairments to internal use software during the years ended December 31, 2013, 2012 or 2011. Capitalized costs of internal use software included in Property & Equipment was $2,603,731 and $1,962,315 at December 31, 2013 and 2012, respectively. The capitalized amount during the years ended December 31, 2013 and 2012 amounted to $3,505,742 and $1,731,341, respectively. The difference between capitalized amounts in the balance sheet and the amount adjusted from the Consolidated Statement of Comprehensive Loss is due to the use of different exchange rates for balance sheet and income statement items. | |||
Recent Accounting Pronouncements | ' | ||
Recent Accounting Pronouncements | |||
On July of 2013 the Financial Accounting Standards Board or FASB issued Accounting Standards Update, or ASU, No. 2013-11, Income Taxes (Topic 740), Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carry forward, a Similar Tax Loss, or a Tax Credit Carry forward exists. This guidance provides that an unrecognized tax benefit, or a portion thereof, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carry forward, except to the extent that carry forwards are not available to settle any additional income taxes that would result from disallowance of a tax position. The unrecognized tax benefit should be presented as a liability. This guidance is applicable for fiscal years and interim periods beginning after December 15, 2013. We are evaluating the potential impact of adopting this standard on our consolidated financial statements. | |||
On March 4, 2013, the FASB issued ASU 2013-05, Foreign Currency Matters (Topic 830) Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity ("ASU 2013-05"). ASU 2013-05 updates accounting guidance related to the application of consolidation guidance and foreign currency matters. This guidance resolves the diversity in practice about what guidance applies to the release of the cumulative translation adjustment into net income. This guidance is effective for interim and annual periods beginning after December 15, 2013. We are evaluating the potential impact of this adoption on our consolidated financial statements. | |||
On March of 2013, the FASB issued ASU No. 2013-05, Foreign Currency Matters (Topic 830)-Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. These amendments provide guidance on releasing Cumulative Translation Adjustments when a parent company sells partially equity method investments and in step acquisitions. The amendments are effective on a prospective basis for fiscal years and interim reporting periods beginning after December 15, 2013. The guidance is applicable to us in principle, but since its enactment, we have not derecognized any subsidiary or group of assets as of December 31, 2013. |
Recovered_Sheet1
Allowance for doubtful accounts (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Allowance for Doubtful Accounts [Abstract] | ' | ||||||||||||||||||||||||
Schedule of Allowance for Doubtful Accounts | ' | ||||||||||||||||||||||||
Changes in the allowance for doubtful accounts are as follows: | |||||||||||||||||||||||||
Allowance for | Balance | Currency | Total Allowance | Additions- | Release for | Balance at | |||||||||||||||||||
doubtful | at the | revaluation | for doubtful | allowance for | doubtful | the end of | |||||||||||||||||||
accounts | beginning | B | accounts | doubtful | accounts | the period | |||||||||||||||||||
of the | A+B | accounts | |||||||||||||||||||||||
period | |||||||||||||||||||||||||
A | |||||||||||||||||||||||||
Year ended December 31, 2013 | $ | 559,120 | $ | 8,313 | $ | 567,433 | $ | 22,005 | $ | (581,745 | ) | $ | 7,693 | ||||||||||||
Year ended December 31, 2012 | $ | 436,546 | $ | 1,832 | $ | 438,378 | $ | 117,394 | $ | 3,348 | $ | 559,120 | |||||||||||||
Year ended December 31, 2011 | $ | 119,044 | - | $ | 119,044 | $ | 318,443 | $ | (941 | ) | $ | 436,546 |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Property and Equipment [Abstract] | ' | ||||||||||
Schedule of Property and Equipment | ' | ||||||||||
Property and equipment at December 31, 2013 and December 31, 2012 consisted of: | |||||||||||
Average | |||||||||||
Estimated | |||||||||||
Useful | December 31, | December 31, | |||||||||
Lives | 2013 | 2012 | |||||||||
Furniture and fixtures | 5 | 314,686 | 269,731 | ||||||||
Computer, communication and network equipment | 10-Mar | 24,287,111 | 17,056,396 | ||||||||
Software | 5 | 8,473,042 | 6,123,371 | ||||||||
Automobiles | 5 | 91,580 | 87,925 | ||||||||
Construction in progress for internal use software | 2,603,731 | 1,962,315 | |||||||||
Total property and equipment | 35,770,150 | 25,499,738 | |||||||||
Less: accumulated depreciation and amortization | (15,984,028 | ) | (12,411,467 | ) | |||||||
Total property and equipment, Net | $ | 19,786,122 | $ | 13,088,271 |
Intangible_Assets_Tables
Intangible Assets (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Intangible Assets [Abstract] | ' | ||||||||||||||||||||||||
Schedule of Intangible Assets | ' | ||||||||||||||||||||||||
Intangible assets as of December 31, 2013 and 2012 consisted of the following: | |||||||||||||||||||||||||
Estimated | December 31, | December 31, | |||||||||||||||||||||||
Useful Lives | 2013 | 2012 | |||||||||||||||||||||||
Customer Contracts, Licenses , Interconnect & Technology | 10-May | $ | 13,005,460 | $ | 12,096,592 | ||||||||||||||||||||
ValidSoft IP & Technology | 10-Jan | 16,246,291 | 15,597,814 | ||||||||||||||||||||||
Total intangible assets | 29,251,751 | 27,694,406 | |||||||||||||||||||||||
Less: Accumulated Amortization | (11,484,600 | ) | (10,569,693 | ) | |||||||||||||||||||||
Less: Impairment charges | - | - | |||||||||||||||||||||||
Less: Accumulated Amortization ValidSoft IP & Technology | (9,096,474 | ) | (6,621,687 | ) | |||||||||||||||||||||
Total intangible assets, Net | $ | 8,670,677 | $ | 10,503,026 | |||||||||||||||||||||
Estimated Future Amortization Expense Related to Intangible Assets | ' | ||||||||||||||||||||||||
Estimated future amortization expense related to our intangible assets is: | |||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | 2019 and | ||||||||||||||||||||
thereafter | |||||||||||||||||||||||||
Interconnect licenses and contracts | $ | 610,341 | $ | 266,175 | $ | 135,073 | $ | 77,556 | $ | 59,000 | $ | 32,500 | |||||||||||||
ValidSoft IP & Technology | 2,365,045 | 2,216,170 | 2,132,804 | 528,047 | 110,132 | 137,834 | |||||||||||||||||||
$ | 2,975,386 | $ | 2,482,345 | $ | 2,267,877 | $ | 605,603 | $ | 169,132 | $ | 170,334 |
Goodwill_Tables
Goodwill (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Goodwill [Abstract] | ' | ||||||||
Schedule of Goodwill | ' | ||||||||
The carrying value of the Company's goodwill as of December 31, 2013 and as of December 31, 2012 was as follows: | |||||||||
Goodwill | December 31, | December 31, | |||||||
2013 | 2012 | ||||||||
Goodwill ValidSoft Ltd | $ | 3,433,833 | $ | 3,433,833 | |||||
Goodwill Morodo Ltd. | 214,689 | 214,689 | |||||||
Goodwill Telnicity | 190,401 | - | |||||||
End of period exchange rate translation | (65,697 | ) | (211,791 | ) | |||||
Total | $ | 3,773,226 | $ | 3,436,731 |
The_acquisition_of_assets_of_T1
The acquisition of assets of Telnicity (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
The acquisition of assets of Telnicity [Abstract] | ' | ||||
Schedule of Acquisition of Telnicity | ' | ||||
Consideration paid | Total | ||||
Consideration | |||||
Number of shares of Common Stock | 1,000,000 | ||||
Fair value of the share price at April 1, 2013 | $ | 1.18 | |||
Total Consideration Paid | $ | 1,180,000 | |||
Following the valuation of Telnicity, the Company allocated the above purchase price to the identifiable assets and liabilities. A summary of the assets acquired assumed for Telnicity are: | |||||
Estimated fair values: | |||||
Assets acquired | $ | 989,599 | |||
Liabilities assumed | - | ||||
Net assets acquired | 989,599 | ||||
Consideration paid | 1,180,000 | ||||
Goodwill | $ | 190,401 |
Overdraft_and_Loan_Payable_Tab
Overdraft and Loan Payable (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Overdraft and Loan Payable [Abstract] | ' | ||||||||
Loans Payable | ' | ||||||||
The related loans payable at December 31, 2013 and 2012 are summarized as follows: | |||||||||
December | December | ||||||||
31, 2013 | 31, 2012 | ||||||||
Installment loan payable due December 24, 2006, secured by personal guarantees of two stockholders, a former director, and a third party | $ | 320,358 | $ | 320,491 | |||||
Installment loan payable, monthly principal and interest payments of $2,798 including interest at bank's prime rate plus 1.5% per annum, 8.25% at November 30, 2008, due December 24, 2011, secured by personal guarantees of three stockholders and a former director | 254,696 | 254,800 | |||||||
Installment loan payable, monthly principal and interest payments of $1,729 including interest at bank's prime rate plus 1.5% per annum, 8.25% at November 24, 2008, due June 28, 2009, secured by personal guarantees of three stockholders and a former director | 103,897 | 103,940 | |||||||
Term loan payable, monthly payments of interest at bank's prime rate, 7.0% at December 31, 2007 | 283,703 | 283,820 | |||||||
Total | $ | 962,654 | $ | 963,051 |
Accrued_expenses_Tables
Accrued expenses (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accrued Expenses [Abstract] | ' | ||||||||
Accrued Expenses | ' | ||||||||
As of December 31, 2013 and December 31, 2012, the accrued expenses were comprised of the following: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Accrued Selling, General & Administrative expenses | $ | 2,271,086 | $ | 2,175,845 | |||||
Accrued cost of service | 547,111 | 648,958 | |||||||
Accrued taxes (including VAT) | 255,577 | 288,651 | |||||||
Accrued interest payable | 1,300,101 | 882,181 | |||||||
Other accrued expenses | 587,428 | 124,901 | |||||||
Total accrued expenses | $ | 4,961,303 | $ | 4,120,536 |
10_Related_Party_Loan_and_Conv1
10% Related Party Loan and Convertible Note (Tables) (Convertible Note One [Member]) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Convertible Note One [Member] | ' | ||||||||
Debt Instrument [Line Items] | ' | ||||||||
Schedule of Loan and Convertible Note | ' | ||||||||
The following table shows the composition of the 10% Related Party Loan and Convertible Note as shown in the Consolidated Statement of Financial Position: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
10% Convertible Note (principal amount) | € | 2,000,000 | € | - | |||||
Exchange rate December 31, 2013: EURO 0.7264=$1 | |||||||||
10% Convertible Note | $ | 2,753,304 | $ | - | |||||
Less: | |||||||||
Debt Discount (Beneficial Conversion Feature) | 728,332 | - | |||||||
Debt Discount (Extended Warrants) | 849,451 | - | |||||||
Debt Discount (Warrants) | 141,800 | - | |||||||
10% Related Party Loan and Convertible Note (Net of Debt Discount) | $ | 1,033,721 | $ | - |
10_3rd_Party_Loan_and_Converti1
10% 3rd Party Loan and Convertible Note (Tables) (Convertible Note Two [Member]) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Convertible Note Two [Member] | ' | ||||||||
Debt Instrument [Line Items] | ' | ||||||||
Schedule of Loan and Convertible Note | ' | ||||||||
The following table shows the composition of the 10% 3rd Party Loan and Convertible Note as shown in the Consolidated Statement of Financial Position: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
10% Convertible Note (principal amount) | € | 4,000,000 | € | - | |||||
Exchange rate December 31, 2013: EURO 0.7264=$1 | |||||||||
10% Convertible Note | $ | 5,506,608 | $ | - | |||||
Less: | |||||||||
Debt Discount (Warrants) | 726,695 | - | |||||||
10% 3rd Party Loan and Convertible Note (Net of Debt Discount) | $ | 4,779,913 | $ | - |
Obligations_under_Capital_Leas1
Obligations under Capital Leases (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Obligations under Capital Leases [Abstract] | ' | ||||||||
Schedule of Equipment under Capital Leases | ' | ||||||||
The following is an analysis of the property & equipment acquired under capital leases, recorded in the Property & Equipment line item by major classes: | |||||||||
December | December | ||||||||
31, 2013 | 31, 2012 | ||||||||
Network equipment | $ | 1,642,759 | $ | - | |||||
Software licenses | 874,174 | - | |||||||
Other | 103,249 | - | |||||||
Total | $ | 2,620,182 | - | ||||||
Less: accumulated depreciation and amortization | $ | (101,209 | ) | $ | - | ||||
Total | $ | 2,518,973 | - |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Fair Value Measurements [Abstract] | ' | ||||||||||||||||||||
Schedule of Financial Liabilities Measured at Fair Value on a Recurring Basis | ' | ||||||||||||||||||||
The following tables summarize fair value measurements by level at December 31, 2013 for financial assets and liabilities measured at fair value on a recurring basis: | |||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||
Derivative Liabilities | |||||||||||||||||||||
Conversion feature | $ | - | $ | - | $ | - | $ | - | |||||||||||||
Warrant Liabilities | $ | - | $ | - | $ | 1,973,534 | $ | 1,973,534 | |||||||||||||
Total Derivatives Liabilities | $ | - | $ | - | $ | 1,973,534 | $ | 1,973,534 | |||||||||||||
The following table summarizes fair value measurements by level at December 31, 2012 for financial assets and liabilities measured at fair value on a recurring basis: | |||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||
Derivative Liabilities | |||||||||||||||||||||
Conversion feature | $ | - | $ | - | $ | 311,986 | $ | 311,986 | |||||||||||||
Warrant Liabilities | $ | - | $ | - | $ | - | $ | - | |||||||||||||
Total Derivative liabilities | $ | - | $ | - | $ | 311,986 | $ | 311,986 | |||||||||||||
Summary of Movements in Carrying Value of Derivatives | ' | ||||||||||||||||||||
Hereby we present the movements in the carrying value of the conversion feature discussed in the table above: | |||||||||||||||||||||
Conversion | Balance | Entered into | Change in fair | Extinguishment | Balance at | ||||||||||||||||
feature | at the | Conversion | value | of debt | the end of | ||||||||||||||||
beginning | feature on | (Convertible | the period | ||||||||||||||||||
of the | March 29, | Note) | |||||||||||||||||||
period | 2012 | ||||||||||||||||||||
A | |||||||||||||||||||||
Year ended December 31, 2013 | $ | 311,986 | - | $ | (232,266 | ) | $ | (79,720 | ) | - | |||||||||||
Year ended December 31, 2012 | - | $ | 2,699,312 | $ | (2,387,326 | ) | - | $ | 311,986 |
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Stockholders' Equity [Abstract] | ' | ||||||||||||||||||||
Summary of Warrants Outstanding | ' | ||||||||||||||||||||
The below table summarizes the warrants outstanding as per the below reporting dates. | |||||||||||||||||||||
Outstanding | Exercise/ | Expiring | 2013 | 2012 | 2011 | ||||||||||||||||
Warrants | Conversion | ||||||||||||||||||||
price(s) | |||||||||||||||||||||
(range) | |||||||||||||||||||||
Warrants - Acquisitions | $0.63- $2.25 | 2013 | - | 3,437,953 | 3,879,485 | ||||||||||||||||
Warrants - Fundraising | $0.85- $2.00 | 2013 - 2018 | 37,229,230 | 46,322,101 | 46,867,101 | ||||||||||||||||
Warrants - Other | $2.21 | 2016 | 18,659 | 18,659 | 18,659 | ||||||||||||||||
37,247,889 | 49,778,713 | 50,765,245 |
Noncontrolling_Interest_Tables
Non-controlling Interest (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Non-controlling Interest [Abstract] | ' | ||||||||||||
Schedule of Non-controlling Interests | ' | ||||||||||||
The Company had non-controlling interests in several of its subsidiaries. The balance of the non-controlling interests as of December 31, 2013 and December 31, 2012 were as follows: | |||||||||||||
Noncontrolling interest | |||||||||||||
Balance at | |||||||||||||
Subsidiary | Noncontrolling | December | December | ||||||||||
Interest % | 31, 2013 | 31, 2012 | |||||||||||
ETC PRS UK | 49 | % | $ | 9,894 | $ | 9,434 | |||||||
ETC PRS Netherlands | 49 | % | 134,912 | 126,013 | |||||||||
ET Bahrain WLL | 1 | % | - | 3,438 | |||||||||
ET ME&A FZ LLC | 49.46 | % | - | 37,091 | |||||||||
Total | $ | 144,806 | $ | 175,976 |
Basic_and_diluted_net_loss_per1
Basic and diluted net loss per share (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Basic and diluted net loss per share [Abstract] | ' | ||||||||||||
Schedule of Anti-dilutive Securities | ' | ||||||||||||
The diluted share base for fiscal 2013, 2012 and 2011 excludes incremental shares related to convertible debt, warrants to purchase Common Stock and employee stock options as follows: | |||||||||||||
Dilutive Securities | 2013 | 2012 | 2011 | ||||||||||
Convertible Notes | 9,635,838 | 2,957,855 | - | ||||||||||
Warrants | 37,247,889 | 49,778,713 | 50,765,245 | ||||||||||
Employee Stock Options | 34,272,503 | 12,280,717 | 7,868,989 | ||||||||||
81,156,230 | 65,017,285 | 58,634,234 |
2006_NonQualified_Stock_and_Op1
2006 Non-Qualified Stock and Option Compensation Plan and 2008 Long Term Incentive Compensation Plan (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
2006 Non-Qualified Stock and Option Compensation Plan and 2008 Long Term Incentive Compensation Plan [Abstract] | ' | ||||||||||||
Reconciliation of Registered and Available Shares and/or Options | ' | ||||||||||||
Reconciliation of registered and available shares and/or options as of December 31, 2013: | |||||||||||||
Full Year 2013 | Total | ||||||||||||
Registered 2008 | - | 5,000,000 | |||||||||||
Registered 2011 | - | 18,000,000 | |||||||||||
Approved increase 2013 | - | 23,000,000 | |||||||||||
Total Registered under this plan | 46,000,000 | ||||||||||||
Shares (issued to): | |||||||||||||
Consultants | - | 325,000 | |||||||||||
Directors and Officers | 189,945 | 1,196,366 | |||||||||||
Options exercised | 809,737 | 1,751,804 | |||||||||||
Options (movements): | |||||||||||||
Issued and Outstanding | 34,479,773 | ||||||||||||
Available for grant at December 31, 2013: | 8,247,057 | ||||||||||||
Schedule of common stock purchase options | ' | ||||||||||||
Common Stock purchase options consisted of the following as of the years ended December 31, 2013, 2012 and 2011: | |||||||||||||
Number of | Weighted | Initial Fair | |||||||||||
Options | Average | Market | |||||||||||
Exercise | Value (Outstanding | ||||||||||||
Price | Options) | ||||||||||||
Options: | |||||||||||||
Outstanding as of December 31, 2010 | 4,083,100 | $ | 1.35 | $ | 5,002,238 | ||||||||
Granted in 2011 | 4,644,883 | $ | 2.52 | $ | 6,312,781 | ||||||||
Exercised (with delivery of shares) | -510,095 | $ | 1.14 | $ | -626,179 | ||||||||
Forfeitures (Pre-vesting) | (391,618 | ) | $ | 1.64 | $ | (458,144 | ) | ||||||
Expirations (Post-vesting) | -3,000 | $ | 0.82 | $ | -2,076 | ||||||||
Exchanged for Cashless exercise | -29,281 | $ | 1.24 | $ | -33,141 | ||||||||
Outstanding as of December 31, 2011 | 7,793,989 | $ | 2.03 | $ | 10,195,479 | ||||||||
Granted in 2012 | 6,107,719 | $ | 2.24 | $ | 7,259,422 | ||||||||
Exercised (with delivery of shares) | (431,972 | ) | $ | 1 | $ | (403,382 | ) | ||||||
Forfeitures (Pre-vesting) | (1,042,071 | ) | $ | 2.29 | $ | (1,404,105 | ) | ||||||
Expirations (Post-vesting) | (281,667 | ) | $ | 2.23 | $ | (398,199 | ) | ||||||
Exchanged for Cashless exercise | (43,916 | ) | $ | 1.66 | $ | (56,248 | ) | ||||||
Outstanding as of December 31, 2012 | 12,102,082 | $ | 2.15 | $ | 15,192,967 | ||||||||
Granted in 2013 | 24,393,106 | $ | 1.12 | $ | 1,163,197 | ||||||||
Exercised (with delivery of shares) | (809,737 | ) | $ | 0.66 | $ | (284,515 | ) | ||||||
Forfeitures (Pre-vesting) | (800,351 | ) | $ | 1 | $ | (807,662 | ) | ||||||
Expirations (Post-vesting) | (586,026 | ) | $ | 1.92 | $ | (648,529 | ) | ||||||
Exchanged for Cashless exercise | (26,571 | ) | $ | 0.6 | $ | (13,834 | ) | ||||||
Outstanding as of December 31, 2013 | 34,272,503 | $ | 1.47 | $ | 27,601,624 | ||||||||
Schedule of Weighted Average Assumptions | ' | ||||||||||||
Following is a summary of the status and assumptions used of options outstanding as of the years ended December 31, 2013, 2012 and 2011: | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Grants | |||||||||||||
During the year | 24,496,741 | 6,211,354 | 4,644,883 | ||||||||||
Weighted Average Annual Volatility | 89 | % | 81 | % | 64 | % | |||||||
Weighted Average Cumulative Volatility | 192 | % | 134 | % | 152 | % | |||||||
Weighted Average Contractual Life of grants (Years) | 5.11 | 3.84 | 9.66 | ||||||||||
Weighted Average Expected Life of grants (Years) | 4.73 | 2.69 | 5.6 | ||||||||||
Weighted Average Risk Free Interest Rate | 1.5017 | % | 0.4553 | % | 1.8993 | % | |||||||
Dividend yield | 0 | % | 0 | % | 0 | % | |||||||
Weighted Average Fair Value at grant-date | $ | 0.58 | $ | 1.1 | $ | 1.45 | |||||||
Options Outstanding | |||||||||||||
Total Options Outstanding | 34,272,503 | 12,205,717 | 7,793,989 | ||||||||||
Weighted Average Remaining Contractual Life (Years) | 4.68 | 5.34 | 7.81 | ||||||||||
Weighted Average Remaining Expected Life (Years) | 4.91 | 5.02 | 6.93 | ||||||||||
Weighted Average Exercise Price | $ | 1.47 | $ | 1.73 | $ | 2.03 | |||||||
Aggregate Intrinsic Value (all options) | $ | (8,189,063 | ) | $ | (13,972,731 | ) | $ | 6,801,540 | |||||
Aggregate Intrinsic Value (only in-the-money options) | $ | 6,312,036 | $ | 100,611 | $ | 4,870,394 | |||||||
Options Exercisable | |||||||||||||
Total Options Exercisable | 18,180,371 | 4,358,510 | 1,284,547 | ||||||||||
Weighted Average Exercise Price | $ | 1.62 | $ | 1.96 | $ | 1.12 | |||||||
Weighted Average Remaining Contractual Life (Years) | 3.79 | 5.97 | 4.89 | ||||||||||
Aggregate Intrinsic Value (all options) | $ | (7,126,025 | ) | $ | (4,178,337 | ) | $ | 1,966,195 | |||||
Aggregate Intrinsic Value (only in-the-money options) | $ | 3,091,811 | $ | 100,465 | $ | 1,899,945 | |||||||
Unvested Options | |||||||||||||
Total Unvested Options | 16,299,402 | 7,847,207 | 6,509,442 | ||||||||||
Weighted Average Exercise Price | $ | 1.21 | $ | 2.25 | $ | 2.21 | |||||||
Forfeiture rate used for this period ending | 11.074 | % | 10.673 | % | 6.509 | % | |||||||
Options expected to vest | |||||||||||||
Number of options expected to vest corrected by forfeiture | 15,553,067 | 7,009,645 | 6,085,741 | ||||||||||
Unrecognized stock-based compensation expense | $ | 8,787,636 | $ | 3,014,397 | $ | 3,109,478 | |||||||
Weighted Average remaining contract life (Years) | 5.68 | 4.99 | 8.69 | ||||||||||
Exercises | |||||||||||||
Total shares delivered/issued | 809,737 | 431,972 | 510,095 | ||||||||||
Weighted Average Exercise Price | $ | 0.66 | $ | 1 | $ | 1.14 | |||||||
Intrinsic Value of Options Exercised | $ | 306,883 | $ | 177,547 | $ | 755,991 | |||||||
Schedule of Stock-Based Compensation Expense | ' | ||||||||||||
Stock-Based Compensation Expense | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Consultancy services | $ | 76,000 | $ | - | $ | 714,259 | |||||||
Directors and officers (shares and options) | 4,510,240 | 1,141,812 | 1,448,192 | ||||||||||
Employee (options) | 3,929,151 | 5,160,329 | 4,656,454 | ||||||||||
$ | 8,515,391 | $ | 6,302,141 | $ | 6,818,905 |
Income_taxes_Tables
Income taxes (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income taxes [Abstract] | ' | ||||||||
Schedule of Loss before Income Tax Provision | ' | ||||||||
For financial statement purposes, loss before the income tax provision is divided amongst the following; | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Domestic | $ | (14,759,886 | ) | $ | (6,574,394 | ) | |||
Foreign | (7,572,030 | ) | (16,268,406 | ) | |||||
Total | $ | (22,331,916 | ) | $ | (22,842,800 | ) | |||
Schedule of Income Tax Expense (Benefit) | ' | ||||||||
Income tax expense (benefit) for the period ended December 31, 2013 and December 31, 2012 is summarized as follows: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Current: | |||||||||
Federal | $ | - | $ | - | |||||
State | - | - | |||||||
Foreign | (200,301 | ) | 289,136 | ||||||
Deferred: | |||||||||
Federal | - | - | |||||||
State | - | - | |||||||
Foreign | - | $ | - | ||||||
Income tax expense (benefit) | $ | (200,301 | ) | $ | 289,136 | ||||
Schedule of the Reconciliation of the Provision for Income Taxes at the United States Federal Statutory Rate to the Foreign Income Tax Rate | ' | ||||||||
The following is a reconciliation of the provision for income taxes at the US federal statutory rate (34%) to the foreign income tax rate at December 31, 2013: | |||||||||
2013 | 2012 | ||||||||
Tax expense (credit) at statutory rate-federal | 34 | % | 34 | % | |||||
Other | 1.2 | % | (1.3 | )% | |||||
State tax expense net of federal tax | - | - | |||||||
Foreign income tax rate difference | (10.1 | )% | (8.4 | )% | |||||
Change in valuation allowance | (24.3 | )% | (25.6 | )% | |||||
Tax expense at actual rate | (0.8 | )% | (1.3 | )% | |||||
Schedule of Deferred Tax Assets | ' | ||||||||
The tax effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities at December 31, 2013 are as follows: | |||||||||
Deferred tax assets: | 2013 | 2012 | |||||||
Net Operating Losses | $ | 35,701,315 | $ | 30,552,587 | |||||
Total gross deferred tax assets | 35,701,315 | 30,552,587 | |||||||
Less: Valuation allowance | (35,701,315 | ) | (30,552,587 | ) | |||||
Net deferred tax assets | $ | - | $ | - | |||||
Schedule of Unrecognized Tax Benefits | ' | ||||||||
The Company does not currently anticipate recording any amount for unrecognized tax benefits within the next 12 months. The following table summarizes the 2012 and 2013 activity related to the unrecognized tax benefits and related tax carry forward: | |||||||||
Balance at December 31, 2011 | $ | 20,000 | |||||||
Decreases related to prior year tax positions | $ | (10,000 | ) | ||||||
Increases related to current year tax positions | $ | 279,136 | |||||||
Balance at December 31, 2012 | $ | 289,136 | |||||||
Increases related to prior year tax positions | $ | - | |||||||
Decreases related to prior year tax positions | $ | (289,136 | ) | ||||||
Increases related to current year tax positions | $ | - | |||||||
Balance at December 31, 2013 | $ | 0 |
Geographic_Information_Tables
Geographic Information (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Geographic Information [Abstract] | ' | ||||||||||||
Geographic Information | ' | ||||||||||||
Twelve months ended December 31, 2013 | |||||||||||||
Europe | Other foreign | Total | |||||||||||
countries | |||||||||||||
Revenues from unaffiliated customers | $ | 17,092,830 | $ | 5,734,431 | $ | 22,827,261 | |||||||
Identifiable assets | $ | 32,693,551 | $ | 10,623,889 | $ | 43,317,440 | |||||||
Twelve months ended December 31, 2012 | |||||||||||||
Europe | Other foreign | Total | |||||||||||
countries | |||||||||||||
Revenues from unaffiliated customers | $ | 29,053,151 | $ | 149,037 | $ | 29,202,188 | |||||||
Identifiable assets | $ | 35,682,490 | $ | 1,793,051 | $ | 37,475,541 |
Selected_Quarterly_Financial_D1
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Selected Quarterly Financial Data (Unaudited) [Abstract] | ' | ||||||||||||||||
Schedule of Selected Quarterly Financial Data (Unaudited) | ' | ||||||||||||||||
Selected quarterly financial data is as follows: | |||||||||||||||||
Year ended December 31, 2013 | |||||||||||||||||
Q1 | Q2 | Q3 | Q4 | ||||||||||||||
REVENUES | $ | 6,596,500 | $ | 4,994,145 | $ | 5,204,982 | $ | 6,031,634 | |||||||||
Cost of service | 3,548,277 | 1,465,517 | 1,080,174 | 1,055,185 | |||||||||||||
3,048,223 | 3,528,628 | 4,124,808 | 4,976,449 | ||||||||||||||
Selling, general and administrative expenses - Note 32a | 5,907,974 | 7,472,772 | 5,422,869 | 7,709,668 | |||||||||||||
LOSS FROM OPERATIONS | (4,179,739 | ) | (5,780,375 | ) | (2,861,748 | ) | (4,634,559 | ) | |||||||||
Adjusted EBITDA- Note 32b | (1,448,841 | ) | (949,095 | ) | (84,896 | ) | 143,048 | ||||||||||
NET LOSS | (5,137,923 | ) | (7,692,561 | ) | (3,225,592 | ) | (6,075,540 | ) | |||||||||
Net loss per common share and equivalents - basic and diluted | (0.05 | ) | (0.06 | ) | (0.07 | ) | (0.03 | ) | |||||||||
Note 32a | |||||||||||||||||
Until the third quarter of 2013, the Company has showed the non-cash compensation as a line item in the Consolidated Statement of Operations and Comprehensive Loss. This presentation is not in accordance with the guidance of SAB Topic 14.F, which requires that the expense related to share-based payment should be presented in the same line as where the cash compensation is presented | |||||||||||||||||
Note 32b - Adjusted EBITDA | |||||||||||||||||
In order to provide investors additional information regarding our financial results, we are disclosing Adjusted EBITDA, a non-GAAP financial measure. We employ Adjusted EBITDA, defined as earnings before derivative accounting, such as warrant liabilities and conversion feature expensing, income taxes, depreciation and amortization, impairments, non-operating income and expenses and stock-based compensation, for several purposes, including as a measure of our operating performance. We use Adjusted EBITDA because it removes the impact of items not directly resulting from our core operations, thus allowing us to better assess whether the elements of our growth strategy are yielding the desired results. Accordingly, we believe that Adjusted EBITDA provides useful information for investors and others which allow them to better understand and evaluate our operating results. | |||||||||||||||||
Adjusted EBITDA | 2013 | 2012 | 2011 | ||||||||||||||
Net loss - GAAP | $ | (22,131,615 | ) | $ | (23,131,936 | ) | $ | (25,310,735 | ) | ||||||||
Provision for income taxes | (200,301 | ) | 289,136 | - | |||||||||||||
Depreciation and amortization | 6,601,246 | 5,710,396 | 5,254,708 | ||||||||||||||
Stock-based compensation | 8,515,391 | 6,302,141 | 6,818,905 | ||||||||||||||
Interest income and expenses | 961,372 | 532,835 | 94,463 | ||||||||||||||
Interest expense related to debt discount and conversion feature | 2,069,649 | 1,089,126 | - | ||||||||||||||
Change in fair value of conversion feature | (232,267 | ) | (2,387,326 | ) | - | ||||||||||||
Loss on extinguishment of debt | 2,005,100 | - | - | ||||||||||||||
Changes in fair value of warrant liabilities | (479,322 | ) | - | - | |||||||||||||
Other income & (expense) | 302,112 | - | (460,000 | ) | |||||||||||||
Impairment of related party loans | - | 1,060,784 | - | ||||||||||||||
Amortization of deferred financing costs | 248,851 | 531,792 | - | ||||||||||||||
Equity in earnings of unconsolidated joint venture | - | 501,776 | - | ||||||||||||||
Intangible assets impairment charge | - | - | 522,726 | ||||||||||||||
Adjusted EBITDA | $ | (2,339,784 | ) | $ | (9,501,276 | ) | $ | (13,079,933 | ) | ||||||||
Year ended December 31, 2012 | |||||||||||||||||
Q1 | Q2 | Q3 | Q4 | ||||||||||||||
REVENUES | $ | 8,580,968 | $ | 7,084,969 | $ | 6,699,381 | $ | 6,836,870 | |||||||||
Cost of service | 6,889,217 | 5,185,048 | 4,603,588 | 4,141,474 | |||||||||||||
1,691,751 | 1,899,921 | 2,095,793 | $ | 2,695,396 | |||||||||||||
Selling, general and administrative expenses | 6,261,704 | 6,104,163 | 5,931,170 | 5,889,241 | |||||||||||||
LOSS FROM OPERATIONS | (5,848,422 | ) | (5,429,130 | ) | (5,098,514 | ) | $ | (5,137,747 | ) | ||||||||
Adjusted EBITDA - Note 32b | (2,878,207 | ) | (2,665,260 | ) | (2,125,974 | ) | (1,831,835 | ) | |||||||||
NET LOSS | (6,005,189 | ) | (4,990,909 | ) | (5,474,665 | ) | $ | (6,661,173 | ) | ||||||||
Net loss per common share and equivalents - basic and diluted | (0.05 | ) | (0.04 | ) | (0.05 | ) | $ | (0.06 | ) |
Reclassification_of_changes_to1
Reclassification of changes to prior year information (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Reclassification of changes to prior year information [Abstract] | ' | ' | ' |
Non-cash compensation to officers, directors and employees | $8,515,391 | $6,302,141 | $6,818,905 |
Financial_Condition_Details
Financial Condition (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
Mar. 14, 2014 | Mar. 17, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
Financial Condition [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | ' | ' | $1,252,315 | ' | ' | ' | $1,233,268 | ' | ' | ' | $1,252,315 | $1,233,268 | $6,009,576 | $2,245,697 |
Proceeds from exercise of warrants | ' | 3,732,668 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net loss | ' | ' | -6,075,540 | -3,225,592 | -7,692,561 | -5,137,923 | -6,661,173 | -5,474,665 | -4,990,909 | -6,005,189 | -22,131,615 | -23,131,936 | -25,310,735 | ' |
Cash flow deficits from operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -5,967,686 | -8,799,272 | -14,570,936 | ' |
Accumulated deficit | ' | ' | -225,391,922 | ' | ' | ' | -203,260,307 | ' | ' | ' | -225,391,922 | -203,260,307 | ' | ' |
Proceeds from exercise of warrants & options | $350,903 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $581,142 | $1,081,925 | $26,808,067 | ' |
Significant_Accounting_Policie2
Significant Accounting Policies (Principles of Consolidation) (Details) | Dec. 31, 2013 |
Elephant Talk Communications PRS U.K. Limited [Member] | ' |
Noncontrolling Interest [Line Items] | ' |
Non-controlling Interest % | 51.00% |
Elephant Talk United Telecommunication Services N.V. [Member] | ' |
Noncontrolling Interest [Line Items] | ' |
Non-controlling Interest % | 51.00% |
Elephant Talk Communications Premium Rate Services Netherlands B.V. [Member] | ' |
Noncontrolling Interest [Line Items] | ' |
Non-controlling Interest % | 51.00% |
Elephant Talk Middle East & Africa (Holding) W.L.L. [Member] | ' |
Noncontrolling Interest [Line Items] | ' |
Non-controlling Interest % | 60.00% |
Elephant Talk Middle East & Africa (Holding) Jordan L.L.C. [Member] | ' |
Noncontrolling Interest [Line Items] | ' |
Non-controlling Interest % | 100.00% |
Elephant Talk Middle East & Africa Bahrain W.L.L. [Member] | ' |
Noncontrolling Interest [Line Items] | ' |
Non-controlling Interest % | 99.00% |
Elephant Talk Middle East & Africa FZ-LLC [Member] | ' |
Noncontrolling Interest [Line Items] | ' |
Non-controlling Interest % | 50.54% |
Elephant Talk Telecomunicacao do Brasil LTDA [Member] | Elephant Talk Europe Holding B.V. [Member] | ' |
Noncontrolling Interest [Line Items] | ' |
Non-controlling Interest % | 90.00% |
Elephant Talk Telecomunicacao do Brasil LTDA [Member] | Elephant Talk Communication Holding AG [Member] | ' |
Noncontrolling Interest [Line Items] | ' |
Non-controlling Interest % | 10.00% |
Significant_Accounting_Policie3
Significant Accounting Policies (Additional Information) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' |
Restricted cash | $191,600 | $1,230,918 | ' |
Options granted vesting period | '3 years | ' | ' |
Unrecognized tax losses | 0 | 289,136 | 20,000 |
Net capitalization | 2,603,731 | 1,962,315 | ' |
Amount of capitalized expenses | $3,505,742 | $1,731,341 | ' |
Minimum [Member] | ' | ' | ' |
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' |
Expected useful lives of intangible assets | '3 years | ' | ' |
Maximum [Member] | ' | ' | ' |
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' |
Expected useful lives of intangible assets | '10 years | ' | ' |
Allowance_for_Doubtful_Account1
Allowance for Doubtful Accounts (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Allowance for doubtful accounts: | ' | ' | ' |
Balance at the beginning of the period | $559,120 | $436,546 | $119,044 |
Additions- allowance for doubtful accounts | 22,005 | 117,394 | 318,443 |
Release for doubtful accounts | -581,745 | 3,348 | -941 |
Balance at the end of the period | 7,693 | 559,120 | 436,546 |
Allowance for Doubtful Accounts, Current [Member] | ' | ' | ' |
Allowance for doubtful accounts: | ' | ' | ' |
Currency revaluation | 8,313 | 1,832 | ' |
Total Allowance for doubtful accounts | $438,378 | $119,044 | ' |
Prepaid_Expenses_and_Other_Cur1
Prepaid Expenses and Other Current Assets (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Prepaid Expenses and Other Current Assets [Abstract] | ' | ' |
Prepaid expenses and other current assets | $2,254,213 | $1,821,218 |
Prepaid value added tax | $732,838 | $534,327 |
Other_Assets_Details
Other Assets (Details) | 12 Months Ended | |||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Aug. 17, 2013 | Aug. 17, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Aug. 28, 2013 | Aug. 28, 2013 | |
USD ($) | USD ($) | Convertible Note One [Member] | Convertible Note One [Member] | Convertible Note One [Member] | Convertible Note One [Member] | Convertible Note Two [Member] | Convertible Note Two [Member] | Convertible Note Two [Member] | Convertible Note Two [Member] | |
USD ($) | EUR (€) | USD ($) | EUR (€) | USD ($) | EUR (€) | USD ($) | EUR (€) | |||
Other Assets [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other assets, noncurrent | $1,412,408 | $1,038,306 | ' | ' | ' | ' | ' | ' | ' | ' |
Principal amount of loan to third party | 150,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loan to third party, interest rate | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Carrying amount of loan to third party | 160,518 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, principal amount | ' | ' | 2,753,304 | 2,000,000 | 2,753,304 | 2,000,000 | 5,506,608 | 4,000,000 | 5,506,608 | 4,000,000 |
Debt, interest rate | ' | ' | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% |
Debt issuance costs | 636,624 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term deposits | 771,193 | 657,192 | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred financing cost, net | $477,673 | $381,114 | ' | ' | ' | ' | ' | ' | ' | ' |
Impairment_of_Related_Party_Lo1
Impairment of Related Party Loans (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Related Party Transaction [Line Items] | ' | ' | ' |
Loans to related party impairment charge | ' | $1,060,784 | ' |
Elephant Security BV [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Interest rate on loans | 7.00% | ' | ' |
Total interest accrued | ' | $57,160 | ' |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment | $35,770,150 | $25,499,738 |
Less: accumulated depreciation and amortization | -15,984,028 | -12,411,467 |
Total property and equipment, Net | 19,786,122 | 13,088,271 |
Furniture and Fixtures [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Average Estimated Useful Lives | '5 years | ' |
Property and equipment | 314,686 | 269,731 |
Computer, Communication and Network Equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment | 24,287,111 | 17,056,396 |
Computer, Communication and Network Equipment [Member] | Minimum [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Average Estimated Useful Lives | '3 years | ' |
Computer, Communication and Network Equipment [Member] | Maximum [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Average Estimated Useful Lives | '10 years | ' |
Software [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Average Estimated Useful Lives | '5 years | ' |
Property and equipment | 8,473,042 | 6,123,371 |
Automobiles [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Average Estimated Useful Lives | '5 years | ' |
Property and equipment | 91,580 | 87,925 |
Construction in Progress for Internal Use Software[Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment | $2,603,731 | $1,962,315 |
Intangible_Assets_Schedule_of_
Intangible Assets (Schedule of Intangible Assets) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 |
Minimum [Member] | Maximum [Member] | Customer Contracts, Licenses, Interconnect & Technology [Member] | Customer Contracts, Licenses, Interconnect & Technology [Member] | Customer Contracts, Licenses, Interconnect & Technology [Member] | Customer Contracts, Licenses, Interconnect & Technology [Member] | ValidSoft IP & Technology [Member] | ValidSoft IP & Technology [Member] | ValidSoft IP & Technology [Member] | ValidSoft IP & Technology [Member] | |||
Minimum [Member] | Maximum [Member] | Minimum [Member] | Maximum [Member] | |||||||||
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected useful lives of intangible assets | ' | ' | '3 years | '10 years | ' | ' | '5 years | '10 years | ' | ' | '1 year | '10 years |
Intangible assets | $29,251,751 | $27,694,406 | ' | ' | $13,005,460 | $12,096,592 | ' | ' | $16,246,291 | $15,597,814 | ' | ' |
Accumulated amortization | ' | ' | ' | ' | -11,484,600 | -10,569,693 | ' | ' | -9,096,474 | -6,621,687 | ' | ' |
Total intangible assets, Net | $8,670,677 | $10,503,026 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intangible_Assets_Additional_I
Intangible Assets (Additional Information) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' |
Amortization Expense | $3,070,244 | $2,761,135 | $3,022,909 |
Impairment charge | ' | ' | -522,726 |
Impairment charge recorded to the balance sheet | ' | ' | $486,575 |
Intangible_Assets_Estimated_Fu
Intangible Assets (Estimated Future Amortization Expense Related to Intangible Assets) (Details) (USD $) | Dec. 31, 2013 |
Finite-Lived Intangible Assets [Line Items] | ' |
2014 | $2,975,386 |
2015 | 2,482,345 |
2016 | 2,267,877 |
2017 | 605,603 |
2018 | 169,132 |
2019 and thereafter | 170,334 |
Customer Contracts, Licenses, Interconnect & Technology [Member] | ' |
Finite-Lived Intangible Assets [Line Items] | ' |
2014 | 610,341 |
2015 | 266,175 |
2016 | 135,073 |
2017 | 77,556 |
2018 | 59,000 |
2019 and thereafter | 32,500 |
ValidSoft IP & Technology [Member] | ' |
Finite-Lived Intangible Assets [Line Items] | ' |
2014 | 2,365,045 |
2015 | 2,216,170 |
2016 | 2,132,804 |
2017 | 528,047 |
2018 | 110,132 |
2019 and thereafter | $137,834 |
Goodwill_Details
Goodwill (Details) (USD $) | 12 Months Ended | ||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Apr. 02, 2013 | Dec. 31, 2012 | |
ValidSoft Ltd [Member] | ValidSoft Ltd [Member] | Morodo Ltd. [Member] | Morodo Ltd. [Member] | Telnicity LLC [Member] | Telnicity LLC [Member] | Telnicity LLC [Member] | |||
Goodwill [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
End of period exchange rate translation | ($65,697) | ($211,791) | ' | ' | ' | ' | ' | ' | ' |
Goodwill | $3,773,226 | $3,436,731 | $3,433,833 | $3,433,833 | $214,689 | $214,689 | $190,401 | $190,401 | ' |
The_acquisition_of_assets_of_T2
The acquisition of assets of Telnicity (Details) (USD $) | 0 Months Ended | 12 Months Ended | |
Apr. 02, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Estimated fair values: | ' | ' | ' |
Goodwill | ' | $3,773,226 | $3,436,731 |
Telnicity LLC [Member] | ' | ' | ' |
Consideration paid: | ' | ' | ' |
Number of shares of Common Stock | 1,000,000 | ' | ' |
Fair value of the share price at April 1, 2013 | $1.18 | ' | ' |
Total Consideration Paid | 1,180,000 | ' | ' |
Estimated fair values: | ' | ' | ' |
Assets acquired | 989,599 | ' | ' |
Liabilities assumed | ' | ' | ' |
Net assets acquired | 989,599 | ' | ' |
Goodwill | 190,401 | 190,401 | ' |
Consideration paid | 1,180,000 | ' | ' |
Related transaction costs | 15,885 | ' | ' |
Intangible assets acquired | 989,599 | ' | ' |
Revenues | ' | 91,885 | 570,223 |
Net losses | ' | -903,245 | -159,784 |
Telnicity LLC [Member] | Minimum [Member] | ' | ' | ' |
Estimated fair values: | ' | ' | ' |
Useful lives of acquired intangibles | ' | '3 years | ' |
Telnicity LLC [Member] | Maximum [Member] | ' | ' | ' |
Estimated fair values: | ' | ' | ' |
Useful lives of acquired intangibles | ' | '5 years | ' |
Telnicity LLC [Member] | Relationship with Customers [Member] | ' | ' | ' |
Estimated fair values: | ' | ' | ' |
Intangible assets acquired | 218,599 | ' | ' |
Telnicity LLC [Member] | Relationships with Carriers [Member] | ' | ' | ' |
Estimated fair values: | ' | ' | ' |
Intangible assets acquired | 366,112 | ' | ' |
Telnicity LLC [Member] | Technology and Intellectual Property [Member] | ' | ' | ' |
Estimated fair values: | ' | ' | ' |
Intangible assets acquired | $404,888 | ' | ' |
Overdraft_and_Loan_Payable_Det
Overdraft and Loan Payable (Details) (USD $) | 0 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||
Dec. 14, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 30, 2008 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 24, 2008 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2007 | |
Elephant Talk Ltd [Member] | Elephant Talk Ltd [Member] | Installment Loan Payable Due December 24, 2006 [Member] | Installment Loan Payable Due December 24, 2006 [Member] | Installment Loan Payable Due December 24, 2011 [Member] | Installment Loan Payable Due December 24, 2011 [Member] | Installment Loan Payable Due December 24, 2011 [Member] | Installment Bank Loan Payable Due June 28, 2011 [Member] | Installment Bank Loan Payable Due June 28, 2011 [Member] | Installment Bank Loan Payable Due June 28, 2011 [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | ||||
Short-term Debt [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loans payable | ' | $962,654 | $963,051 | ' | ' | $320,358 | $320,491 | $254,696 | $254,800 | ' | $103,897 | $103,940 | ' | $283,703 | $283,820 | ' |
Loan payable, monthly principal and interest payments | ' | ' | ' | ' | ' | ' | ' | 2,798 | ' | ' | 1,729 | ' | ' | ' | ' | ' |
Loan payable, Interest rate | ' | ' | ' | ' | ' | ' | ' | 1.50% | ' | 8.25% | 1.50% | ' | 8.25% | ' | ' | 7.00% |
Debt instrument, maturity date | ' | ' | ' | ' | ' | 24-Dec-06 | ' | 24-Dec-11 | ' | ' | 28-Jun-09 | ' | ' | ' | ' | ' |
Personal guarantee, number of shareholders | ' | ' | ' | ' | ' | 2 | ' | 3 | ' | ' | 3 | ' | ' | ' | ' | ' |
Personal guarantee, number of former directors | ' | ' | ' | ' | ' | 1 | ' | 1 | ' | ' | 1 | ' | ' | ' | ' | ' |
Personal guarantee, number of third parties | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Potential loss from default on bank loans and overdraft account that are still in litigation | ' | 1,933,308 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Litigation awarded value | 5,925 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Overdraft | ' | $391,436 | $350,114 | $391,436 | $350,114 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Bank interest rate above prime rate | ' | ' | ' | 2.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Bank interest rate above prime rate upon default | ' | ' | ' | 6.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred_Revenue_Details
Deferred Revenue (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Deferred Revenue [Abstract] | ' | ' |
Deferred Revenue | $142,731 | $252,551 |
Accrued_Expenses_Details
Accrued Expenses (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Accrued Expenses [Abstract] | ' | ' |
Accrued Selling, General & Administrative expenses | $2,271,086 | $2,175,845 |
Accrued cost of service | 547,111 | 648,958 |
Accrued taxes (including VAT) | 255,577 | 288,651 |
Accrued interest payable | 1,300,101 | 882,181 |
Other accrued expenses | 587,428 | 124,901 |
Total accrued expenses | 4,961,303 | 4,120,536 |
Provision for income taxes | $88,420 | ' |
10_Related_Party_Loan_and_Conv2
10% Related Party Loan and Convertible Note (Schedule of Notes) (Details) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
EUR (€) | Convertible Note One [Member] | Convertible Note One [Member] | Convertible Note One [Member] | |
USD ($) | EUR (€) | USD ($) | ||
Debt Instrument [Line Items] | ' | ' | ' | ' |
Debt instrument, carrying amount | ' | $2,753,304 | € 2,000,000 | ' |
Exchange rate | 0.7264 | ' | ' | ' |
Debt Discount (Beneficial Conversion Feature) | ' | 728,332 | ' | ' |
Debt Discount (Extended Warrants) | ' | 849,451 | ' | ' |
Debt Discount (Warrants) | ' | 141,800 | ' | ' |
10% Loan and Convertible Note (Net of Debt Discount) | ' | $1,033,721 | ' | ' |
10_Related_Party_Loan_and_Conv3
10% Related Party Loan and Convertible Note (Narrative) (Details) (Convertible Note One [Member]) | 1 Months Ended | 12 Months Ended | |||
Aug. 17, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Aug. 17, 2013 | Dec. 31, 2012 | |
USD ($) | USD ($) | EUR (€) | EUR (€) | USD ($) | |
Debt Instrument [Line Items] | ' | ' | ' | ' | ' |
Debt instrument, principal amount | $2,753,304 | $2,753,304 | € 2,000,000 | € 2,000,000 | ' |
Debt, interest rate | 10.00% | 10.00% | ' | ' | ' |
Debt instrument, maturity date | ' | 2-Jul-14 | ' | ' | ' |
Deb instrument, earliest conversion date | ' | 17-Aug-13 | ' | ' | ' |
Debt Instrument, fixed conversion price | $0.89 | ' | ' | ' | ' |
Number of shares covered by warrants | 1,000,000 | ' | ' | ' | ' |
Warrants, exercisable date | ' | 17-Feb-14 | ' | ' | ' |
Exercise/ Conversion price(s) (range) | 0.887 | ' | ' | ' | ' |
Term of warrant | ' | '5 years | ' | ' | ' |
Discount on debt | ' | 1,719,585 | ' | ' | ' |
Debt discount due to warrants | 1,535,656 | 991,251 | ' | ' | ' |
Amortization of warrants | ' | 544,404 | ' | ' | ' |
Fair market value of conversion feature | 1,132,404 | ' | ' | ' | ' |
Beneficial conversion feature | ' | 728,332 | ' | ' | ' |
Amortization of debt conversion feature | ' | $404,072 | ' | ' | ' |
10_3rd_Party_Loan_and_Converti2
10% 3rd Party Loan and Convertible Note (Schedule of Note) (Details) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
EUR (€) | Convertible Note Two [Member] | Convertible Note Two [Member] | Convertible Note Two [Member] | |
USD ($) | EUR (€) | USD ($) | ||
Debt Instrument [Line Items] | ' | ' | ' | ' |
Debt instrument, carrying amount | ' | $5,506,608 | € 4,000,000 | ' |
Exchange rate | 0.7264 | ' | ' | ' |
Debt Discount (Warrants) | ' | 726,695 | ' | ' |
10% Loan and Convertible Note (Net of Debt Discount) | ' | $4,779,913 | ' | ' |
10_3rd_Party_Loan_and_Converti3
10% 3rd Party Loan and Convertible Note (Narrative) (Details) (Convertible Note Two [Member]) | 12 Months Ended | ||||
Dec. 31, 2013 | Dec. 31, 2013 | Aug. 28, 2013 | Aug. 28, 2013 | Dec. 31, 2012 | |
USD ($) | EUR (€) | USD ($) | EUR (€) | USD ($) | |
Debt Instrument [Line Items] | ' | ' | ' | ' | ' |
Debt instrument, principal amount | $5,506,608 | € 4,000,000 | $5,506,608 | € 4,000,000 | ' |
Debt, interest rate | 10.00% | 10.00% | 10.00% | 10.00% | ' |
Debt instrument, maturity date | 28-Aug-15 | 28-Aug-15 | ' | ' | ' |
Deb instrument, earliest conversion date | 28-Aug-13 | 28-Aug-13 | ' | ' | ' |
Debt Instrument, fixed conversion price | ' | ' | $0.89 | ' | ' |
Number of shares covered by warrants | ' | ' | 2,000,000 | 2,000,000 | ' |
Warrants, exercisable date | 28-Feb-14 | 28-Feb-14 | ' | ' | ' |
Exercise/ Conversion price(s) (range) | ' | ' | 0.887 | 0.887 | ' |
Term of warrant | '5 years | '5 years | ' | ' | ' |
Discount on debt | $726,695 | ' | $864,394 | ' | ' |
Conversion_and_Termination_of_1
Conversion and Termination of the May 24, 2013 Loan Agreement (Details) | 12 Months Ended | 0 Months Ended | ||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jul. 14, 2013 | 24-May-13 | 24-May-13 | |
USD ($) | USD ($) | USD ($) | Unsecured Loan from Affiliate [Member] | Unsecured Loan from Affiliate [Member] | Unsecured Loan from Affiliate [Member] | |
USD ($) | USD ($) | EUR (€) | ||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' |
Debt instrument, principal amount | ' | ' | ' | ' | ' | € 1,000,000 |
Debt, interest rate | ' | ' | ' | ' | 12.00% | 12.00% |
Number of shares covered by warrants | ' | ' | ' | ' | 1,253,194 | 1,253,194 |
Warrant exercise price | ' | ' | ' | ' | 1.03 | 1.03 |
Term of warrant | ' | ' | ' | ' | '5 years | '5 years |
Term allowing put of warrant | ' | ' | ' | ' | '12 months | '12 months |
Share price requiring warrant exercise | ' | ' | ' | ' | $1.55 | ' |
Number of consecutive trading days | ' | ' | ' | ' | '10 days | '10 days |
Debt conversion, shares issued | ' | ' | ' | 1,840,631 | ' | ' |
Debt Instrument, fixed conversion price | ' | ' | ' | $0.71 | ' | ' |
Shares issued for note conversions | 1,306,848 | ' | ' | ' | ' | ' |
Loss on extinguishment of debt | ($2,005,100) | ' | ' | ($44,506) | ' | ' |
8_Senior_Secured_Convertible_N1
8% Senior Secured Convertible Note (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 11, 2013 | |
Convertible 8.0% Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ' | ' | ' | ' |
Debt purchase price, percentage | ' | ' | ' | 110.00% |
Debt purchase price | ' | ' | ' | $6,701,824 |
Amortization of original issue discount | ' | ' | ' | 349,639 |
Amortization of debt conversion feature | ' | ' | ' | 1,179,732 |
Write off of remaining financing costs | ' | ' | ' | 311,048 |
Fair market value of conversion feature | ' | ' | ' | 451,779 |
Purchase price surplus | ' | ' | ' | 10.00% |
Prepayment fee | ' | ' | ' | 607,539 |
Loss on extinguishment of debt | ($2,005,100) | ' | ' | ($1,960,594) |
Registered_Direct_Offering_and1
Registered Direct Offering and Warrant Liabilities (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Class of Stock [Line Items] | ' | ' | ' |
Gross proceeds of SPA | $12,000,000 | ' | ' |
Net proceeds of SPA | 11,292,500 | ' | ' |
Fundraising related expenses | 707,500 | ' | ' |
Warrants outstanding | 37,247,889 | 49,778,713 | 50,765,245 |
Warrant liabilities | 1,973,534 | ' | ' |
Investors [Member] | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' |
Shares issued per SPA | 17,425,621 | ' | ' |
Number of warrants issued | 7,841,537 | ' | ' |
Warrants outstanding | 2,892,857 | ' | ' |
Warrant liabilities | 1,973,534 | ' | ' |
Term of warrant | '5 years | ' | ' |
Warrant exercise price | 0.887 | ' | ' |
Term allowing put of warrant | '90 days | ' | ' |
Percentage of trading price requiring exercise of warrants | 20.00% | ' | ' |
Number of consecutive trading days | '20 days | ' | ' |
Average daily trading volume | $350,000 | ' | ' |
Number of warrants exercised | 5,131,965 | ' | ' |
Shares issued in connection with warrant exercises | 4,102,792 | ' | ' |
Placement Agent [Member] | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' |
Warrants issued to placement agent | 183,284 | ' | ' |
Warrant exercise price | 0.853 | ' | ' |
Obligations_under_Capital_Leas2
Obligations under Capital Leases (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Capital Lease Obligations [Member] | Capital Lease Obligations [Member] | Capital Lease Obligations [Member] | Network Equipment [Member] | Network Equipment [Member] | Software Licenses [Member] | Software Licenses [Member] | Other [Member] | Other [Member] | |||
Minimum [Member] | Maximum [Member] | ||||||||||
Capital Leased Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equipment | $2,620,182 | ' | ' | ' | ' | $1,642,759 | ' | $874,174 | ' | $103,249 | ' |
Less: accumulated depreciation and amortization | -101,209 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total | 2,518,973 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Obligations under capital leases (current portion) | 1,302,838 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Non-current portion of obligation under capital leases | $845,529 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt term | ' | ' | ' | '2 years | '3 years | ' | ' | ' | ' | ' | ' |
Minimum interest rate | ' | ' | 8.65% | ' | ' | ' | ' | ' | ' | ' | ' |
Loan payable, interest rate spread | ' | ' | ' | ' | 1.50% | ' | ' | ' | ' | ' | ' |
Loan_from_Joint_Venture_Partne1
Loan from Joint Venture Partner (Details) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 17, 2008 | Dec. 17, 2008 |
USD ($) | USD ($) | Elephant Talk United Telecommunication Services N.V. [Member] | Elephant Talk United Telecommunication Services N.V. [Member] | Elephant Talk United Telecommunication Services N.V. [Member] | Elephant Talk United Telecommunication Services N.V. [Member] | |
USD ($) | USD ($) | USD ($) | ANG | |||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' |
Loan from related party | $602,047 | $555,907 | $602,047 | $555,907 | $402,424 | 724,264 |
Stated interest per annum | ' | ' | 8.00% | ' | ' | ' |
Ownership percentage | ' | ' | 51.00% | ' | ' | ' |
Ownership percentage by noncontrolling shareholders | ' | ' | 49.00% | ' | ' | ' |
Fair_Value_Measurements_Schedu
Fair Value Measurements (Schedule of Financial Assets and Liabilities Measured at Fair Value on Rrecurring Basis) (Details) (Fair Value, Measurements, Recurring [Member], USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Derivative Liabilities | ' | ' |
Derivative liabilities | $1,973,534 | $311,986 |
Conversion Feature [Member] | ' | ' |
Derivative Liabilities | ' | ' |
Derivative liabilities | ' | 311,986 |
Warrants [Member] | ' | ' |
Derivative Liabilities | ' | ' |
Derivative liabilities | 1,973,534 | ' |
Fair Value, Inputs, Level 1 [Member] | ' | ' |
Derivative Liabilities | ' | ' |
Derivative liabilities | ' | ' |
Fair Value, Inputs, Level 1 [Member] | Conversion Feature [Member] | ' | ' |
Derivative Liabilities | ' | ' |
Derivative liabilities | ' | ' |
Fair Value, Inputs, Level 1 [Member] | Warrants [Member] | ' | ' |
Derivative Liabilities | ' | ' |
Derivative liabilities | ' | ' |
Fair Value, Inputs, Level 2 [Member] | ' | ' |
Derivative Liabilities | ' | ' |
Derivative liabilities | ' | ' |
Fair Value, Inputs, Level 2 [Member] | Conversion Feature [Member] | ' | ' |
Derivative Liabilities | ' | ' |
Derivative liabilities | ' | ' |
Fair Value, Inputs, Level 2 [Member] | Warrants [Member] | ' | ' |
Derivative Liabilities | ' | ' |
Derivative liabilities | ' | ' |
Fair Value, Inputs, Level 3 [Member] | ' | ' |
Derivative Liabilities | ' | ' |
Derivative liabilities | 1,973,534 | 311,986 |
Fair Value, Inputs, Level 3 [Member] | Conversion Feature [Member] | ' | ' |
Derivative Liabilities | ' | ' |
Derivative liabilities | ' | 311,986 |
Fair Value, Inputs, Level 3 [Member] | Warrants [Member] | ' | ' |
Derivative Liabilities | ' | ' |
Derivative liabilities | $1,973,534 | ' |
Fair_Value_Measurements_Schedu1
Fair Value Measurements (Schedule of Movements in Carrying Value of Derivatives) (Details) (Conversion Feature [Member], USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Conversion Feature [Member] | ' | ' |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' |
Balance at the beginning of the period | $311,986 | ' |
Entered into Conversion feature on March 29, 2012 | ' | 2,699,312 |
Change in fair value | -232,266 | -2,387,326 |
Extinguishment of debt (Convertible Note) | -79,720 | ' |
Balance at the end of the period | ' | $311,986 |
Stockholders_Equity_Narrative_
Stockholders' Equity (Narrative) (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
Common Stock: | ' | ' | ' | ' |
Common stock, shares authorized | 250,000,000 | 250,000,000 | ' | ' |
Common stock, shares issued | 140,466,801 | 111,918,386 | ' | ' |
Common stock, shares outstanding | 140,466,801 | 111,918,386 | ' | ' |
Common stock, increase in shares issued during the period | 28,548,433 | ' | ' | ' |
Number of shares issued according to Stock Transfer Agent | 140,712,701 | ' | ' | ' |
Unreturned shares from 'cancelled' acquisitions (pre-2006) | 233,900 | ' | ' | ' |
Shares issued under Employee benefits plan (Treasury shares) | 12,000 | ' | ' | ' |
Difference in number of issued shares | 245,900 | ' | ' | ' |
Preferred Stock: | ' | ' | ' | ' |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | ' | ' |
Preferred stock, par or stated value per share | 0.00001 | 0.00001 | ' | ' |
Preferred stock, shares outstanding | 0 | 0 | ' | ' |
Common Shares [Member] | ' | ' | ' | ' |
Common Stock: | ' | ' | ' | ' |
Common stock, shares outstanding | 140,466,801 | 111,918,368 | 110,525,231 | 88,660,848 |
Shares issued for board & management compensation, shares | 775,985 | 499,121 | 500,287 | ' |
Shares issued for employee stock option exercises, shares | 809,737 | 464,972 | 786,672 | ' |
Shares issued to consultants, shares | 200,000 | ' | 303,506 | ' |
Shares issued for note conversions, shares | 1,840,631 | ' | 2,210,367 | ' |
Shares issued for rental termination settlement, shares | 400,000 | ' | ' | ' |
Shares issued for acquisitions | 1,250,000 | 134,046 | ' | ' |
Investors [Member] | ' | ' | ' | ' |
Common Stock: | ' | ' | ' | ' |
Shares issued per SPA | 17,425,621 | ' | ' | ' |
Shares issued in connection with warrant exercises | 4,102,792 | ' | ' | ' |
Number of warrants exercised | 5,131,965 | ' | ' | ' |
Non Affiliate Investors [Member] | Common Shares [Member] | ' | ' | ' | ' |
Common Stock: | ' | ' | ' | ' |
Shares issued per SPA | 250,000 | ' | ' | ' |
Other Counterparties [Member] | Common Shares [Member] | ' | ' | ' | ' |
Common Stock: | ' | ' | ' | ' |
Shares issued in connection with warrant exercises | 1,493,667 | ' | ' | ' |
Number of warrants exercised | 5,781,597 | ' | ' | ' |
Morodo Limited [Member] | Common Shares [Member] | ' | ' | ' | ' |
Common Stock: | ' | ' | ' | ' |
Shares issued for acquisitions | 250,000 | ' | ' | ' |
Telnicity LLC [Member] | Common Shares [Member] | ' | ' | ' | ' |
Common Stock: | ' | ' | ' | ' |
Shares issued for acquisitions | 1,000,000 | ' | ' | ' |
Stockholders_Equity_Warrants_D
Stockholders' Equity (Warrants) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Class of Warrant or Right [Line Items] | ' | ' | ' |
Warrants outstanding | 37,247,889 | 49,778,713 | 50,765,245 |
Warrant liabilities | 1,973,534 | ' | ' |
Weighted Average [Member] | ' | ' | ' |
Class of Warrant or Right [Line Items] | ' | ' | ' |
Exercise/ Conversion price(s) (range) | 1.2 | ' | ' |
Warrants - Acquisitions [Member] | ' | ' | ' |
Class of Warrant or Right [Line Items] | ' | ' | ' |
Expiring | 31-Dec-13 | ' | ' |
Warrants outstanding | ' | 3,437,953 | 3,879,485 |
Warrants - Acquisitions [Member] | Minimum [Member] | ' | ' | ' |
Class of Warrant or Right [Line Items] | ' | ' | ' |
Exercise/ Conversion price(s) (range) | 0.63 | ' | ' |
Warrants - Acquisitions [Member] | Maximum [Member] | ' | ' | ' |
Class of Warrant or Right [Line Items] | ' | ' | ' |
Exercise/ Conversion price(s) (range) | 2.25 | ' | ' |
Warrants - Fundraising [Member] | ' | ' | ' |
Class of Warrant or Right [Line Items] | ' | ' | ' |
Warrants outstanding | 37,229,230 | 46,322,101 | 46,867,101 |
Warrants - Fundraising [Member] | Minimum [Member] | ' | ' | ' |
Class of Warrant or Right [Line Items] | ' | ' | ' |
Exercise/ Conversion price(s) (range) | 0.85 | ' | ' |
Expiring | 1-Jan-13 | ' | ' |
Warrants - Fundraising [Member] | Maximum [Member] | ' | ' | ' |
Class of Warrant or Right [Line Items] | ' | ' | ' |
Exercise/ Conversion price(s) (range) | 2 | ' | ' |
Expiring | 31-Dec-18 | ' | ' |
Warrants - Other [Member] | ' | ' | ' |
Class of Warrant or Right [Line Items] | ' | ' | ' |
Exercise/ Conversion price(s) (range) | 2.21 | ' | ' |
Expiring | 31-Dec-16 | ' | ' |
Warrants outstanding | 18,659 | 18,659 | 18,659 |
Noncontrolling_Interest_Detail
Non-controlling Interest (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Noncontrolling Interest [Line Items] | ' | ' |
Noncontrolling interest balance | $144,806 | $175,976 |
Elephant Talk Communications PRS U.K. Limited [Member] | ' | ' |
Noncontrolling Interest [Line Items] | ' | ' |
Noncontrolling Interest % | 49.00% | ' |
Noncontrolling interest balance | 9,894 | 9,434 |
Elephant Talk Communications Premium Rate Services Netherlands B.V. [Member] | ' | ' |
Noncontrolling Interest [Line Items] | ' | ' |
Noncontrolling Interest % | 49.00% | ' |
Noncontrolling interest balance | 134,912 | 126,013 |
ET Bahrain WLL [Member] | ' | ' |
Noncontrolling Interest [Line Items] | ' | ' |
Noncontrolling Interest % | 1.00% | ' |
Noncontrolling interest balance | ' | 3,438 |
Elephant Talk Middle East & Africa FZ-LLC [Member] | ' | ' |
Noncontrolling Interest [Line Items] | ' | ' |
Noncontrolling Interest % | 49.46% | ' |
Noncontrolling interest balance | ' | $37,091 |
Basic_and_diluted_net_loss_per2
Basic and diluted net loss per share (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' |
Anti-dilutive securities | $81,156,230 | $65,017,285 | $58,634,234 |
Convertible Notes [Member] | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' |
Anti-dilutive securities | $9,635,838 | $2,957,855 | ' |
Warrants [Member] | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' |
Anti-dilutive securities | $37,247,889 | $49,778,713 | $50,765,245 |
Employee Stock Option [Member] | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' |
Anti-dilutive securities | $34,272,503 | $12,280,717 | $7,868,989 |
2006_NonQualified_Stock_and_Op2
2006 Non-Qualified Stock and Option Compensation Plan and 2008 Long Term Incentive Compensation Plan (2006 Non-Qualified Stock and Option Compensation Plan) (Details) (USD $) | 12 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2013 | |
2006 Non-Qualified Stock and Option Compensation Plan [Member] | 2006 Non-Qualified Stock and Option Compensation Plan [Member] | 2006 Non-Qualified Stock and Option Compensation Plan [Member] | 2006 Non-Qualified Stock and Option Compensation Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Total Options Issued and Outstanding | 34,479,773 | ' | ' | ' | ' | ' | ' |
Remaining shares available for grant | 8,247,057 | ' | ' | 103,450 | ' | ' | 103,450 |
Share issued | ' | ' | ' | 169,725 | 180,368 | 235,947 | ' |
Options expired | ' | ' | ' | ' | ' | ' | 75,000 |
Non-cash compensation to officers, directors and employees | $8,515,391 | $6,302,141 | $6,818,905 | ' | ' | ' | $531,030 |
2006_NonQualified_Stock_and_Op3
2006 Non-Qualified Stock and Option Compensation Plan and 2008 Long Term Incentive Compensation Plan (2008 Long-Term Incentive Plan) (Details) (USD $) | 0 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||
Jun. 11, 2008 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 17, 2013 | Oct. 06, 2011 | Dec. 31, 2010 | Jan. 15, 2008 | Dec. 31, 2013 | Dec. 31, 2013 | |
Directors And Officers [Member] | Consultant [Member] | 2008 Long-Term Incentive Plan [Member] | 2008 Long-Term Incentive Plan [Member] | 2008 Long-Term Incentive Plan [Member] | 2008 Long-Term Incentive Plan [Member] | 2008 Long-Term Incentive Plan [Member] | 2008 Long-Term Incentive Plan [Member] | 2008 Long-Term Incentive Plan [Member] | 2008 Long-Term Incentive Plan [Member] | 2008 Long-Term Incentive Plan [Member] | |||
Minimum [Member] | Maximum [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total Options Issued and Outstanding | ' | 34,479,773 | ' | ' | 34,272,503 | 12,102,082 | 7,793,989 | ' | ' | 4,083,100 | ' | ' | ' |
Remaining shares available for grant | ' | 8,247,057 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options granted vesting period | ' | '3 years | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' |
Options expiration period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | '4 years |
Stock-based awards granted to employees, not yet expensed | ' | ' | ' | ' | $8,787,636 | $3,014,397 | $3,109,478 | ' | ' | ' | ' | ' | ' |
Number of shares authorized | ' | 46,000,000 | ' | ' | ' | ' | ' | 46,000,000 | 23,000,000 | ' | 5,000,000 | ' | ' |
Stock split ratio | 0.04 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share issued | ' | ' | 189,945 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued since inception of plan | ' | ' | 1,196,366 | 325,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options granted | ' | ' | ' | ' | 24,496,741 | 6,211,354 | 4,644,883 | ' | ' | ' | ' | ' | ' |
Granted | ' | ' | ' | ' | $1.12 | $2.24 | $2.52 | ' | ' | ' | ' | ' | ' |
Forfeiture rate used in this reporting | ' | ' | ' | ' | 11.07% | 10.67% | 6.51% | ' | ' | ' | ' | ' | ' |
2006_NonQualified_Stock_and_Op4
2006 Non-Qualified Stock and Option Compensation Plan and 2008 Long Term Incentive Compensation Plan (Reconciliation of Registered and Available Shares and or Options) (Details) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2008 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Number registered | 23,000,000 | 18,000,000 | 5,000,000 |
Total registered under this plan | 46,000,000 | ' | ' |
Total options exercised since inception of plan | 1,751,804 | ' | ' |
Total Options Issued and Outstanding | 34,479,773 | ' | ' |
Total shares available for grant | 8,247,057 | ' | ' |
Employee Stock Option [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Options exercised | 809,737 | ' | ' |
Consultant [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Share issued | ' | ' | ' |
Shares issued since inception of plan | 325,000 | ' | ' |
Directors And Officers [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Share issued | 189,945 | ' | ' |
Shares issued since inception of plan | 1,196,366 | ' | ' |
2006_NonQualified_Stock_and_Op5
2006 Non-Qualified Stock and Option Compensation Plan and 2008 Long Term Incentive Compensation Plan (Common Stock Purchase Options, 2008 Long Term Incentive Plan) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Number of Options | ' | ' | ' |
Ending Balance | 34,479,773 | ' | ' |
2008 Long-Term Incentive Plan [Member] | ' | ' | ' |
Number of Options | ' | ' | ' |
Beginning Balance | 12,102,082 | 7,793,989 | 4,083,100 |
Granted | 24,393,106 | 6,107,719 | 4,644,883 |
Exercised (with delivery of shares) | -809,737 | -431,972 | -510,095 |
Forfeitures (Pre-vesting) | -800,351 | -1,042,071 | -391,618 |
Expirations (Post-vesting) | -586,026 | -281,667 | -3,000 |
Exchanged for Cashless exercise | -26,571 | -43,916 | -29,281 |
Ending Balance | 34,272,503 | 12,102,082 | 7,793,989 |
Weighted Average Exercise Price | ' | ' | ' |
Beginning Balance | $2.15 | $2.03 | $1.35 |
Granted | $1.12 | $2.24 | $2.52 |
Exercised (with delivery of shares) | $0.66 | $1 | $1.14 |
Forfeitures (Pre-vesting) | $1 | $2.29 | $1.64 |
Expirations (Post-vesting) | $1.92 | $2.23 | $0.82 |
Exchanged for cashless exercise | $0.60 | $1.66 | $1.24 |
Ending Balance | $1.47 | $2.15 | $2.03 |
Initial Fair Market Value (Outstanding Options) | ' | ' | ' |
Beginning Balance | $15,192,967 | $10,195,479 | $5,002,238 |
Granted | 14,163,197 | 7,259,422 | 6,312,781 |
Exercised (with delivery of shares) | -284,515 | -403,382 | -626,179 |
Forfeitures (Pre-vesting) | -807,662 | -1,404,105 | -458,144 |
Expirations (Post-vesting) | -648,529 | -398,199 | -2,076 |
Exchanged for Cashless exercise | -13,834 | -56,248 | -33,141 |
Ending Balance | $27,601,624 | $15,192,967 | $10,195,479 |
2006_NonQualified_Stock_and_Op6
2006 Non-Qualified Stock and Option Compensation Plan and 2008 Long Term Incentive Compensation Plan (Summary of Status of Options Outstanding, 2008 Long Term Incentive Plan) (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
Options Outstanding | ' | ' | ' | ' |
Total options outstanding | 34,479,773 | ' | ' | ' |
2008 Long-Term Incentive Plan [Member] | ' | ' | ' | ' |
Grants | ' | ' | ' | ' |
During the year | 24,496,741 | 6,211,354 | 4,644,883 | ' |
Weighted Average Annual Volatility | 89.00% | 81.00% | 64.00% | ' |
Weighted Average Cumulative Volatility | 192.00% | 134.00% | 152.00% | ' |
Weighted Average Contractual Life of grants | '5 years 1 month 10 days | '3 years 10 months 2 days | '9 years 7 months 28 days | ' |
Weighted Average Expected Life of grants | '4 years 8 months 23 days | '2 years 8 months 9 days | '5 years 7 months 6 days | ' |
Weighted Average Risk Free Interest Rate | 1.50% | 0.46% | 1.90% | ' |
Dividend yield | 0.00% | 0.00% | 0.00% | ' |
Weighted Average Fair Value at grant-date | $0.58 | $1.10 | $1.45 | ' |
Options Outstanding | ' | ' | ' | ' |
Total options outstanding | 34,272,503 | 12,102,082 | 7,793,989 | 4,083,100 |
Weighted Average Remaining Contractual Life | '4 years 8 months 5 days | '5 years 4 months 2 days | '7 years 9 months 22 days | ' |
Weighted Average Remaining Expected Life | '4 years 10 months 28 days | '5 years 7 days | '6 years 11 months 5 days | ' |
Weighted Average Exercise Price | $1.47 | $2.15 | $2.03 | $1.35 |
Aggregate Intrinsic Value | ($8,189,063) | ($13,972,731) | $6,801,540 | ' |
Options Exercisable | ' | ' | ' | ' |
Total Options Exercisable | 18,180,371 | 4,358,510 | 1,284,547 | ' |
Weighted Average Exercise Price | $1.62 | $1.96 | $1.12 | ' |
Weighted Average Remaining Contractual Life | '3 years 9 months 15 days | '5 years 11 months 19 days | '4 years 10 months 21 days | ' |
Aggregate Intrinsic Value | -7,126,025 | -4,178,337 | 1,966,195 | ' |
Unvested Options | ' | ' | ' | ' |
Total Unvested Options | 16,299,402 | 7,847,207 | 6,509,442 | ' |
Weighted Average Exercise Price | $1.21 | $2.25 | $2.21 | ' |
Forfeiture rate used in this reporting | 11.07% | 10.67% | 6.51% | ' |
Options expected to vest | ' | ' | ' | ' |
Number of options expected to vest corrected by forfeiture rate | 15,553,067 | 7,009,645 | 6,085,741 | ' |
Unrecognized stock-based compensation expense | 8,787,636 | 3,014,397 | 3,109,478 | ' |
Weighting Average remaining contract life | '5 years 8 months 5 days | '4 years 11 months 27 days | '8 years 8 months 9 days | ' |
Exercises | ' | ' | ' | ' |
Total shares delivered/issued | 809,737 | 431,972 | 510,095 | ' |
Weighted Average Exercise Price | $0.66 | $1 | $1.14 | ' |
Intrinsic Value of Options Exercised | 306,883 | 177,547 | 755,991 | ' |
2008 Long-Term Incentive Plan [Member] | In the Money Options [Member] | ' | ' | ' | ' |
Options Outstanding | ' | ' | ' | ' |
Aggregate Intrinsic Value | 6,312,036 | 100,611 | 4,870,394 | ' |
Options Exercisable | ' | ' | ' | ' |
Aggregate Intrinsic Value | $3,091,811 | $100,465 | $1,899,945 | ' |
2006_NonQualified_Stock_and_Op7
2006 Non-Qualified Stock and Option Compensation Plan and 2008 Long Term Incentive Compensation Plan (Schedule of Stock-based Compensation Expense) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Non-cash compensation to officers, directors and employees | $8,515,391 | $6,302,141 | $6,818,905 |
2008 Long-Term Incentive Plan [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Non-cash compensation to officers, directors and employees | 8,515,391 | 6,302,140 | ' |
2006 Non-Qualified Stock and Option Compensation Plan [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Non-cash compensation to officers, directors and employees | 531,030 | ' | ' |
Directors and Officers [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Non-cash compensation to officers, directors and employees | 4,510,240 | 1,141,812 | 1,448,192 |
Employees [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Non-cash compensation to officers, directors and employees | 3,929,151 | 5,160,329 | 4,656,454 |
Consultant [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Non-cash compensation to officers, directors and employees | 76,000 | ' | 714,259 |
Shares issued to consultants | 200,000 | ' | ' |
Value of shares issued to consultants | $152,000 | ' | ' |
Income_taxes_Narrative_Details
Income taxes (Narrative) (Details) | 12 Months Ended | 12 Months Ended | ||||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
USD ($) | EUR (€) | USD ($) | Foreign Tax Authority [Member] | Federal And State Jurisdiction [Member] | Federal And State Jurisdiction [Member] | |
USD ($) | USD ($) | USD ($) | ||||
Operating Loss Carryforwards [Line Items] | ' | ' | ' | ' | ' | ' |
Net operating loss carry forwards | ' | ' | ' | $105,000,000 | $39,000,000 | $28,000,000 |
Net operating loss carry forwards, expiration date | ' | ' | ' | 31-Dec-14 | 31-Dec-18 | ' |
Uncertain tax liability | 0 | ' | 289,136 | ' | ' | ' |
Current foreign income tax | 88,835 | ' | ' | ' | ' | ' |
Release of potential income tax exposure | ($289,136) | -€ 225,000 | ' | ' | ' | ' |
Income_taxes_Schedule_of_Loss_
Income taxes (Schedule of Loss before Income Tax Provision) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income taxes [Abstract] | ' | ' |
Domestic | ($14,759,886) | ($6,574,394) |
Foreign | -7,572,030 | -16,268,406 |
Income from operations before income taxes | ($22,331,916) | ($22,842,800) |
Income_taxes_Schedule_of_Incom
Income taxes (Schedule of Income Tax Expense (Benefit)) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Current: | ' | ' | ' |
Federal | ' | ' | ' |
State | ' | ' | ' |
Foreign | -200,301 | 289,136 | ' |
Deferred: | ' | ' | ' |
Federal | ' | ' | ' |
State | ' | ' | ' |
Foreign | ' | ' | ' |
Income tax expense (benefit) | ($200,301) | $289,136 | ' |
Income_taxes_Reconciliation_of
Income taxes (Reconciliation of the Provision for Income Taxes at the United States Federal Statutory Rate to the Foreign Income Tax Rate) (Details) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income taxes [Abstract] | ' | ' |
Tax expense (credit) at statutory rate-federal | 34.00% | 34.00% |
Other | 1.20% | -1.30% |
State tax expense net of federal tax | ' | ' |
Foreign income tax rate difference | -10.10% | -8.40% |
Change in valuation allowance | -24.30% | -25.60% |
Tax expense at actual rate | -0.80% | -1.30% |
Income_taxes_Schedule_of_Defer
Income taxes (Schedule of Deferred Tax Assets) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Income taxes [Abstract] | ' | ' |
Net Operating Losses | $35,701,315 | $30,552,587 |
Total gross deferred tax assets | 35,701,315 | 30,552,587 |
Less: Valuation allowance | -35,701,315 | -30,552,587 |
Net deferred tax assets | ' | ' |
Income_taxes_Schedule_of_Unrec
Income taxes (Schedule of Unrecognized Tax Benefits) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income taxes [Abstract] | ' | ' |
Balance | $289,136 | $20,000 |
Increases related to prior year tax positions | ' | ' |
Decreases related to prior year tax positions | -289,136 | -10,000 |
Increases related to current year tax positions | ' | 279,136 |
Balance | $0 | $289,136 |
Contingencies_Details
Contingencies (Details) (USD $) | 24-May-04 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
Contracts And Purchase Agreement [Member] | Contracts And Purchase Agreement [Member] | Contracts And Purchase Agreement [Member] | ||
notes | Returned [Member] | Unreturned [Member] | ||
notes | notes | |||
Loss Contingencies [Line Items] | ' | ' | ' | ' |
Common stock received for termination of purchase agreement | ' | 90,100 | ' | ' |
Common stock issued for purchase agreement | 5,100,000 | 204,000 | ' | ' |
Unsecured convertible promissory notes, number | ' | 37 | 21 | 18 |
Unsecured convertible promissory notes issued, amount | ' | $3,600,000 | ' | ' |
Unsecured convertible promissory notes returned | ' | ' | 2,040,000 | ' |
Common stock, shares | ' | ' | ' | 113,900 |
Common stock, value | ' | ' | ' | 381,565 |
Unsecured convertible promissory notes unreturned, value | ' | ' | ' | $1,740,000 |
Geographic_Information_Details
Geographic Information (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues from unaffiliated customers | $6,031,634 | $5,204,982 | $4,994,145 | $6,596,500 | $6,836,870 | $6,699,381 | $7,084,969 | $8,580,968 | $22,827,261 | $29,202,188 | $32,232,981 |
Identifiable assets | 43,317,440 | ' | ' | ' | 37,475,541 | ' | ' | ' | 43,317,440 | 37,475,541 | ' |
Europe [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues from unaffiliated customers | ' | ' | ' | ' | ' | ' | ' | ' | 17,092,830 | 29,053,151 | ' |
Identifiable assets | 32,693,551 | ' | ' | ' | 35,682,490 | ' | ' | ' | 32,693,551 | 35,682,490 | ' |
Other Foreign Countries [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues from unaffiliated customers | ' | ' | ' | ' | ' | ' | ' | ' | 5,734,431 | 149,037 | ' |
Identifiable assets | $10,623,889 | ' | ' | ' | $1,793,051 | ' | ' | ' | $10,623,889 | $1,793,051 | ' |
Concentrations_Details
Concentrations (Details) (Revenue Concentration [Member]) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Customer One [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Percentage of revenues | 48.00% | 42.00% |
Customer Two [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Percentage of revenues | 15.00% | ' |
Related_Party_Transactions_Det
Related Party Transactions (Details) | 12 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Aug. 17, 2013 | Aug. 17, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Aug. 28, 2013 | Aug. 28, 2013 | Jul. 14, 2013 | 24-May-13 | 24-May-13 | Jun. 30, 2013 | Dec. 31, 2013 | Jul. 03, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
USD ($) | USD ($) | USD ($) | Convertible Note One [Member] | Convertible Note One [Member] | Convertible Note One [Member] | Convertible Note One [Member] | Convertible Note Two [Member] | Convertible Note Two [Member] | Convertible Note Two [Member] | Convertible Note Two [Member] | Unsecured Loan from Affiliate [Member] | Unsecured Loan from Affiliate [Member] | Unsecured Loan from Affiliate [Member] | Affiliated Entity [Member] | Affiliated Entity [Member] | Chief Executive Officer [Member] | Quercus Management Group [Member] | Q.A.T. III Cooperatief U.A. [Member] | Q.A.T. III Cooperatief U.A. [Member] | Q.A.T. III Cooperatief U.A. [Member] | QAT II Investments, SA [Member] | QAT II Investments, SA [Member] | |
USD ($) | EUR (€) | USD ($) | EUR (€) | USD ($) | EUR (€) | USD ($) | EUR (€) | USD ($) | EUR (€) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Johan Dejager [Member] | Yves van Sante [Member] | Johan Dejager [Member] | Yves van Sante [Member] | |||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, principal amount | ' | ' | ' | $2,753,304 | € 2,000,000 | $2,753,304 | € 2,000,000 | $5,506,608 | € 4,000,000 | $5,506,608 | € 4,000,000 | ' | ' | € 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stated interest per annum | ' | ' | ' | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | ' | 12.00% | 12.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deb instrument, earliest conversion date | ' | ' | ' | 17-Aug-13 | 17-Aug-13 | ' | ' | 28-Aug-13 | 28-Aug-13 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion price | ' | ' | ' | ' | ' | $0.89 | ' | ' | ' | $0.89 | ' | $0.71 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued per SPA | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,428,571 | ' | ' | ' | ' | ' | ' |
Shares issued, price per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.70 | ' | ' | ' | ' | ' | ' |
Exercise/ Conversion price(s) (range) | ' | ' | ' | ' | ' | 0.887 | 0.887 | ' | ' | 0.887 | 0.887 | ' | 1.03 | 1.03 | ' | ' | 0.887 | ' | ' | ' | ' | ' | ' |
Number of shares covered by warrants | ' | ' | ' | ' | ' | 1,000,000 | 1,000,000 | ' | ' | 2,000,000 | 2,000,000 | ' | 1,253,194 | 1,253,194 | ' | ' | 2,892,857 | ' | ' | ' | ' | ' | ' |
Warrants, exercisable date | ' | ' | ' | 17-Feb-14 | 17-Feb-14 | ' | ' | 28-Feb-14 | 28-Feb-14 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 96,972 | ' | ' | ' | ' | ' | ' | ' |
Selling concession | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8.00% | ' | ' | ' | ' | ' |
Fundraising related expenses | 707,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 18,000 | ' | ' | ' | ' | ' |
Debt conversion, shares issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,840,631 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Invoices due to related party for office space, back office support and car travel expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 32,827 | 7,967 | ' | ' | ' | ' |
Shares issued for compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 21,863 | 21,863 | 21,863 | 21,863 |
Value of shares issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,544 | ' | ' | ' | ' | ' | ' | ' |
Directors' compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $120,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Selected_Quarterly_Financial_D2
Selected Quarterly Financial Data (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||||||||
Selected Quarterly Financial Data (Unaudited) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
REVENUES | $6,031,634 | $5,204,982 | $4,994,145 | $6,596,500 | $6,836,870 | $6,699,381 | $7,084,969 | $8,580,968 | $22,827,261 | $29,202,188 | $32,232,981 | ||||||||
Cost of service | 1,055,185 | 1,080,174 | 1,465,517 | 3,548,277 | 4,141,474 | 4,603,588 | 5,185,048 | 6,889,217 | 7,149,153 | 20,819,327 | 28,723,265 | ||||||||
Gross Profit | 4,976,449 | 4,124,808 | 3,528,628 | 3,048,223 | 2,695,396 | 2,095,793 | 1,899,921 | 1,691,751 | ' | ' | ' | ||||||||
Selling, general and administrative expenses | 7,709,668 | [1] | 5,422,869 | [1] | 7,472,772 | [1] | 5,907,974 | [1] | 5,889,241 | 5,931,170 | 6,104,163 | 6,261,704 | 26,533,283 | 24,186,278 | 23,408,554 | ||||
LOSS FROM OPERATIONS | -4,634,559 | -2,861,748 | -5,780,375 | -4,179,739 | -5,137,747 | -5,098,514 | -5,429,130 | -5,848,422 | -17,456,421 | -21,513,813 | -25,676,272 | ||||||||
Adjusted EBITDA | 143,048 | [2] | -84,896 | [2] | -949,095 | [2] | -1,448,841 | [2] | -1,831,835 | [2] | -2,125,974 | [2] | -2,665,260 | [2] | -2,878,207 | [2] | -2,339,784 | -9,501,276 | -13,079,933 |
NET LOSS | -6,075,540 | -3,225,592 | -7,692,561 | -5,137,923 | -6,661,173 | -5,474,665 | -4,990,909 | -6,005,189 | -22,131,615 | -23,131,936 | -25,310,735 | ||||||||
Net loss per common share and equivalents - basic and diluted | ($0.03) | ($0.07) | ($0.06) | ($0.05) | ($0.06) | ($0.05) | ($0.04) | ($0.05) | ($0.18) | ($0.21) | ($0.24) | ||||||||
Adjusted EBITDA | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Net loss - GAAP | -6,075,540 | -3,225,592 | -7,692,561 | -5,137,923 | -6,661,173 | -5,474,665 | -4,990,909 | -6,005,189 | -22,131,615 | -23,131,936 | -25,310,735 | ||||||||
Provision for income taxes | ' | ' | ' | ' | ' | ' | ' | ' | -200,301 | 289,136 | ' | ||||||||
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | 6,601,246 | 5,710,396 | 5,254,708 | ||||||||
Stock based compensation | ' | ' | ' | ' | ' | ' | ' | ' | 8,515,391 | 6,302,141 | 6,319,314 | ||||||||
Interest income and expenses | ' | ' | ' | ' | ' | ' | ' | ' | 961,372 | 532,835 | 94,463 | ||||||||
Interest expense relating to debt discount and conversion feature | ' | ' | ' | ' | ' | ' | ' | ' | 2,069,649 | 1,089,126 | ' | ||||||||
Change in fair value of conversion feature | ' | ' | ' | ' | ' | ' | ' | ' | -232,267 | -2,387,326 | ' | ||||||||
Loss on extinguishment of debt | ' | ' | ' | ' | ' | ' | ' | ' | 2,005,100 | ' | ' | ||||||||
Change in fair value of warrant liability | ' | ' | ' | ' | ' | ' | ' | ' | -479,322 | ' | ' | ||||||||
Other income & (expense) | ' | ' | ' | ' | ' | ' | ' | ' | 302,112 | ' | -460,000 | ||||||||
Impairment of related party loans | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,060,784 | ' | ||||||||
Amortization of deferred financing costs | ' | ' | ' | ' | ' | ' | ' | ' | 248,851 | 531,792 | ' | ||||||||
Equity in earnings of unconsolidated joint venture | ' | ' | ' | ' | ' | ' | ' | ' | ' | 501,776 | ' | ||||||||
Intangible assets impairment charge | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 522,726 | ||||||||
Adjusted EBITDA | $143,048 | [2] | ($84,896) | [2] | ($949,095) | [2] | ($1,448,841) | [2] | ($1,831,835) | [2] | ($2,125,974) | [2] | ($2,665,260) | [2] | ($2,878,207) | [2] | ($2,339,784) | ($9,501,276) | ($13,079,933) |
[1] | Until the third quarter of 2013, the Company has showed the non-cash compensation as a line item in the Consolidated Statement of Operations and Comprehensive Loss. This presentation is not in accordance with the guidance of SAB Topic 14.F, which requires that the expense related to share-based payment should be presented in the same line as where the cash compensation is presented. Therefore, as of December 31, 2013, the Company includes the non-cash compensation within Selling, General & Administrative expenses in the Consolidated Statement of Operations and Comprehensive Loss. For comparison purposes, the Company applied the same principle for all the four quarters of 2013 and 2012. See Note 1 to the Financial Statements for more information. | ||||||||||||||||||
[2] | In order to provide investors additional information regarding our financial results, we are disclosing Adjusted EBITDA, a non-GAAP financial measure. We employ Adjusted EBITDA, defined as earnings before derivative accounting, such as warrant liabilities and conversion feature expensing, income taxes, depreciation and amortization, impairments, non-operating income and expenses and stock-based compensation, for several purposes, including as a measure of our operating performance. We use Adjusted EBITDA because it removes the impact of items not directly resulting from our core operations, thus allowing us to better assess whether the elements of our growth strategy are yielding the desired results. Accordingly, we believe that Adjusted EBITDA provides useful information for investors and others which allow them to better understand and evaluate our operating results. |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 3 Months Ended | 3 Months Ended | |
Mar. 17, 2014 | Dec. 31, 2009 | Mar. 17, 2014 | |
Warrants Issued at $1.00 Exercise Price [Member] | Subsequent Event [Member] | ||
Warrants Issued at $1.00 Exercise Price [Member] | |||
Subsequent Event [Line Items] | ' | ' | ' |
Shares issued for warrant exercises, shares | ' | ' | 5,332,383 |
Exercise/ Conversion price(s) (range) | ' | 1 | 0.7 |
Proceeds from exercise of warrants | $3,732,668 | ' | ' |