SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) April 1, 2015
ELEPHANT TALK COMMUNICATIONS CORP.
(Exact name of registrant as specified in Charter)
Delaware | 000-030061 | 95-4557538 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
100 Park Avenue
New York, NY 10017
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: +31.20.653.5916
N/A |
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 4.02 | Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review |
On March 27, 2015, the Audit Committee of the Board of Directors of Elephant Talk Communications Corp. (the “Company”), concurred with and approved management’s recommendation, that the following financial statements should no longer be relied upon due to material errors in such financial statements in the application of revenue recognition policies related to accounting for multiple element arrangements and should be restated:
· | The Company’s unaudited financial statements included in the Quarterly Reports on Form 10-Q for each of the first three quarters in the fiscal year ended 2014; |
· | The Company’s audited financial statements for the year ended December 31, 2013, and |
· | The Company’s unaudited financial statements included in the Quarterly Reports on Form 10-Q for each of the first three quarters in the fiscal year ended 2013. |
The Company’s Management and the Audit Committee Chair discussed the matters related to the restatements with Squar, Milner, Peterson, Miranda & Williamson, LLP, the Company’s independent registered public accounting firm, and matters relating to the restatement of the financial statements included in the Annual report on Form 10-K for the fiscal 2013 year with BDO USA, LLP, the Company’s prior independent registered public accounting firm. The Company is including certain restated financial statements and financial information with respect to such periods in its Annual Report on Form 10-K for the fiscal year ended December 31, 2014 to be filed with the Commission on or about the date of this Current Report on Form 8-K.
The restated financial statements reflect that the Company overstated amounts of revenues recognized in those periods identified above due to inadequate controls over inadequate controls over the lack of competency of accounting staff regarding the application of accounting for multiple element arrangements and the proper monitoring and review of new arrangements entered into by the company. In accordance with ASC 250-10-S99-2, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” (ASC 250), the Company recorded an adjustment to decrease revenue by $3,375,457to $19,451,804 from $22,827,261 (previously reported) and increased the net loss to $25,507,072, from $22,131,165 (previously reported) for the year ended December 31, 2013. The related adjustment also increased deferred revenue by $2,493,425 to $2,636,156 and increased the accumulated deficit to $228,767,379 from $225,391,922 (previously reported) at December 31, 2013.
The following tables set forth the corrections to individual affected line items in the consolidated balance sheet, stockholders’ equity section of the consolidated balance sheet as of December 31, 2013 and the consolidated statement of operations for fiscal year ended December 31, 2013.
2 |
ELEPHANT TALK COMMUNICATION CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
AS AT DECEMBER 31, 2013
December 31, | December 31, | December 31, | ||||||||||
2013 | 2013 | 2013 | ||||||||||
As previously reported | Restatement adjustments | Restated | ||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS | ||||||||||||
Cash and cash equivalents | $ | 1,252,315 | $ | - | $ | 1,252,315 | ||||||
Restricted cash | 191,600 | - | 191,600 | |||||||||
Accounts receivable, net of an allowance for doubtful accounts of $7,693 at December 31, 2013 | 5,976,879 | (882,032 | ) | 5,094,847 | ||||||||
Prepaid expenses and other current assets | 2,254,213 | - | 2,254,213 | |||||||||
Total current assets | 9,675,007 | (882,032 | ) | 8,792,975 | ||||||||
NON-CURRENT ASSETS | ||||||||||||
OTHER ASSETS | 1,412,408 | - | 1,412,408 | |||||||||
PROPERTY AND EQUIPMENT, NET | 19,786,122 | - | 19,786,122 | |||||||||
INTANGIBLE ASSETS, NET | 8,670,677 | - | 8,670,677 | |||||||||
GOODWILL | 3,773,226 | - | 3,773,226 | |||||||||
$ | 43,317,440 | $ | (882,032 | ) | $ | 42,435,408 | ||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
CURRENT LIABILITIES | ||||||||||||
Overdraft | $ | 391,436 | $ | - | $ | 391,436 | ||||||
Accounts payable and customer deposits | 2,586,662 | - | 2,586,662 | |||||||||
Obligations under capital leases (current portion) | 1,302,838 | - | 1,302,838 | |||||||||
Deferred Revenue | 142,731 | 129,036 | 271,767 | |||||||||
Accrued expenses and other payables | 4,961,303 | - | 4,961,303 | |||||||||
Loans payable | 962,654 | - | 962,654 | |||||||||
10% Related Party Loan (net of Debt Discount of $1,719,585 at December 31, 2013) | 1,033,719 | - | 1,033,719 | |||||||||
Total current liabilities | 11,381,343 | 129,036 | 11,510,379 | |||||||||
LONG TERM LIABILITIES | ||||||||||||
10% 3rd Party Loan (net of Debt Discount of $726,695 at December, 2013) | 4,779,913 | - | 4,779,913 | |||||||||
Warrant liabilities | 1,973,534 | - | 1,973,534 | |||||||||
Non-current portion of obligation under capital leases | 845,529 | - | 845,529 | |||||||||
Non-current portion of deferred revenue | - | 2,364,389 | 2,364,389 | |||||||||
Loan from joint venture partner | 602,047 | - | 602,047 | |||||||||
Total long term liabilities | 8,201,023 | 2,364,389 | 10,565,412 | |||||||||
Total liabilities | 19,582,366 | 2,493,425 | 22,075,791 | |||||||||
STOCKHOLDERS' EQUITY | ||||||||||||
Preferred Stock $0.00001 par value, 50,000,000 shares authorized, 0 issued and outstanding | - | - | - | |||||||||
Common Stock $0.00001 par value, 250,000,000 shares authorized, 140,466,801 shares issued and outstanding as of December 31, 2013 | 248,712,321 | - | 248,712,321 | |||||||||
Accumulated other comprehensive income (loss) | 269,869 | - | 269,869 | |||||||||
Accumulated deficit | (225,391,922 | ) | (3,375,457 | ) | (228,767,379 | ) | ||||||
Elephant Talk Communications, Corp. stockholders' equity | 23,590,268 | (3,375,457 | ) | 20,214,811 | ||||||||
NON-CONTROLLING INTEREST | 144,806 | - | 144,806 | |||||||||
Total stockholders' equity | 23,735,074 | (3,375,457 | ) | 20,359,617 | ||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 43,317,440 | $ | (882,032 | ) | $ | 42,435,408 |
3 |
ELEPHANT TALK COMMUNICATIONS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
FOR THE YEAR ENDED DECEMBER 31, 2013
Year end December 31, 2013 | ||||||||||||||||
As previously reported | Restatement adjustments | Reclassifications | Restated | |||||||||||||
REVENUES | $ | 22,827,261 | $ | (3,375,457 | ) | $ | - | $ | 19,451,804 | |||||||
COST AND OPERATING EXPENSES | ||||||||||||||||
Cost of service | 7,149,153 | - | 2,240,144 | 9,389,297 | ||||||||||||
Product development | - | - | 6,091,484 | 6,091,484 | ||||||||||||
Sales and marketing | - | - | 3,139,015 | 3,139,015 | ||||||||||||
General and administrative | 26,533,283 | - | (11,470,643 | ) | 15,062,640 | |||||||||||
Depreciation and amortization of intangibles assets | 6,601,246 | - | - | 6,601,246 | ||||||||||||
Total cost and operating expenses | 40,283,682 | - | 40,283,682 | |||||||||||||
LOSS FROM OPERATIONS | (17,456,421 | ) | (3,375,457 | ) | - | (20,831,878 | ) | |||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||
Interest income | 103,627 | - | - | 103,627 | ||||||||||||
Interest expense | (1,064,999 | ) | - | - | (1,064,999 | ) | ||||||||||
Interest expense related to debt discount and conversion feature | (2,069,649 | ) | - | - | (2,069,649 | ) | ||||||||||
Change in fair value of conversion feature | 232,267 | - | - | 232,267 | ||||||||||||
Changes in fair value of warrant liabilities | 479,322 | - | - | 479,322 | ||||||||||||
Gain / (Loss) on Extinguishment of Debt | (2,005,100 | ) | - | - | (2,005,100 | ) | ||||||||||
Other income & (expense), net | (302,112 | ) | - | - | (302,112 | ) | ||||||||||
Amortization of deferred financing costs | (248,851 | ) | - | - | (248,851 | ) | ||||||||||
Total other income (expense) | (4,875,495 | ) | - | - | (4,875,495 | ) | ||||||||||
LOSS BEFORE (BENEFIT) PROVISION FOR INCOME TAXES | (22,331,916 | ) | (3,375,457 | ) | - | (25,707,373 | ) | |||||||||
(Benefit) / provision for income taxes | (200,301 | ) | (200,301 | ) | ||||||||||||
NET LOSS | (22,131,615 | ) | (3,375,457 | ) | - | (25,507,072 | ) | |||||||||
OTHER COMPREHENSIVE (LOSS) INCOME | ||||||||||||||||
Foreign currency translation gain (loss) | 1,001,959 | - | - | 1,001,959 | ||||||||||||
COMPREHENSIVE LOSS | $ | (21,129,656 | ) | $ | (3,375,457 | ) | $ | - | $ | (24,505,113 | ) | |||||
Net loss per common share and equivalents - basic and diluted | $ | (0.18 | ) | $ | - | $ | - | $ | (0.20 | ) | ||||||
Weighted average shares outstanding during the period - basic and diluted | 126,259,634 | - | - | 126,259,634 |
The following tables set forth the corrections to the quarterly consolidated balance sheets for the first three quarterly periods of the fiscal year ended December 31, 2013.
4 |
ELEPHANT TALK COMMUNICATION CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
AS AT MARCH 31, 2013
March 31, | March 31, | |||||||||||
2013 | Change | 2013 | ||||||||||
(UNAUDITED) | Restated | |||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS | ||||||||||||
Cash and cash equivalents | $ | 570,579 | $ | - | $ | 570,579.00 | ||||||
Restricted cash | 664,679 | 664,679 | ||||||||||
Accounts receivable, net of an allowance for doubtful accounts of $558,438 at March 31, 2013 | 4,502,499 | - | 4,502,499 | |||||||||
Prepaid expenses and other current assets | 2,342,762 | 2,342,762 | ||||||||||
Total current assets | 8,080,519 | - | 8,080,519 | |||||||||
OTHER ASSETS | 898,001 | - | 898,001 | |||||||||
PROPERTY AND EQUIPMENT, NET | 12,674,383 | - | 12,674,383 | |||||||||
INTANGIBLE ASSETS, NET | 9,495,999 | - | 9,495,999 | |||||||||
GOODWILL | 3,330,438 | - | 3,330,438 | |||||||||
TOTAL ASSETS | $ | 34,479,340 | $ | - | $ | 34,479,340 | ||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
CURRENT LIABILITIES | ||||||||||||
Overdraft | $ | 359,017 | $ | - | $ | 359,017 | ||||||
Accounts payable and customer deposits | 5,738,518 | - | 5,738,518 | |||||||||
Deferred Revenue | 281,536 | - | 281,536 | |||||||||
Accrued expenses and other payables | 4,149,966 | - | 4,149,966 | |||||||||
8% Convertible Note | 4,701,714 | - | 4,701,714 | |||||||||
Loans payable | 961,525 | - | 961,525 | |||||||||
Total current liabilities | 16,192,276 | - | 16,192,276 | |||||||||
LONG TERM LIABILITIES | ||||||||||||
8% Convertible Note | 1,083,932 | - | 1,083,932 | |||||||||
Conversion feature | 451,779 | - | 451,779 | |||||||||
Non-current portion of deferred revenue | - | 356,386 | 356,386 | |||||||||
Loan from joint venture partner | 567,100 | - | 567,100 | |||||||||
Total long term liabilities | 2,102,811 | 356,386 | 2,459,197 | |||||||||
Total liabilities | 18,295,087 | 356,386 | 18,651,473 | |||||||||
STOCKHOLDERS' EQUITY | ||||||||||||
Preferred Stock $0.00001 par value, 50,000,000 shares authorized, 0 issued and outstanding | - | - | - | |||||||||
Common stock, no par value, 250,000,000 shares authorized, 113,369,656 issued and outstanding as of March 31, 2013 | 225,902,751 | - | 225,902,751 | |||||||||
Accumulated other comprehensive income (loss) | (1,493,852 | ) | - | (1,493,852 | ) | |||||||
Accumulated deficit | (208,398,230 | ) | (356,386 | ) | (208,754,616 | ) | ||||||
Elephant Talk Communications, Corp. stockholders' equity | 16,010,669 | (356,386 | ) | 15,654,283 | ||||||||
NON-CONTROLLING INTEREST | 173,584 | - | 173,584 | |||||||||
Total stockholders' equity | 16,184,253 | (356,386 | ) | 15,827,867 | ||||||||
- | ||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 34,479,340 | $ | - | $ | 34,479,340 |
5 |
ELEPHANT TALK COMMUNICATION CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
AS AT JUNE 30, 2013
June 30, | June 30, | |||||||||||
2013 | Change | 2013 | ||||||||||
(restated) | Restated | |||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS | ||||||||||||
Cash and cash equivalents | $ | 2,979,673 | $ | - | $ | 2,979,673 | ||||||
Restricted cash | 483,120 | - | 483,120 | |||||||||
Accounts receivable, net of allowance for doubtful accounts of $486,591 at June 30, 2013 | 3,408,278 | (542,527 | ) | 2,865,751 | ||||||||
Prepaid expenses and other current assets | 2,194,320 | - | 2,194,320 | |||||||||
Total current assets | 9,065,391 | (542,527 | ) | 8,522,864 | ||||||||
OTHER ASSETS | 621,182 | - | 621,182 | |||||||||
PROPERTY AND EQUIPMENT, NET | 17,065,123 | - | 17,065,123 | |||||||||
INTANGIBLE ASSETS, NET | 9,966,563 | - | 9,966,563 | |||||||||
GOODWILL | 3,381,418 | - | 3,381,418 | |||||||||
TOTAL ASSETS | $ | 40,099,677 | $ | (542,527 | ) | $ | 39,557,150 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
CURRENT LIABILITIES | ||||||||||||
Overdraft | $ | 369,859 | $ | - | $ | 369,859 | ||||||
Accounts payable and customer deposits | 4,809,726 | - | 4,809,726 | |||||||||
Deferred Revenue | 482,381 | - | 482,381 | |||||||||
Accrued expenses and other payables | 6,566,324 | - | 6,566,324 | |||||||||
Loans payable | 962,418 | - | 962,418 | |||||||||
12% Related Party Loan | 975,763 | - | 975,763 | |||||||||
Total current liabilities | 14,166,471 | - | 14,166,471 | |||||||||
LONG TERM LIABILITIES | ||||||||||||
Warrant liabilities | 5,291,351 | - | 5,291,351 | |||||||||
Trade note payable | 869,450 | - | 869,450 | |||||||||
Non-current portion of deferred revenue | - | 1,243,755 | 1,243,755 | |||||||||
Loan from joint venture partner | 578,518 | - | 578,518 | |||||||||
Total long term liabilities | 6,739,319 | 1,243,755 | 7,983,074 | |||||||||
Total liabilities | 20,905,790 | 1,243,755 | 22,149,545 | |||||||||
STOCKHOLDERS' EQUITY | ||||||||||||
Preferred Stock $0.00001 par value, 50,000,000 shares authorized, 0 issued and outstanding | - | - | - | |||||||||
Common stock, no par value, 250,000,000 shares authorized, 133,139,900 issued and outstanding as of June 30, 2013 | 236,377,879 | - | 236,377,879 | |||||||||
Accumulated other comprehensive loss | (1,266,977 | ) | - | (1,266,977 | ) | |||||||
Accumulated deficit | (216,090,791 | ) | (1,786,282 | ) | (217,877,073 | ) | ||||||
Elephant Talk Communications Corp. stockholders' equity | 19,020,111 | (1,786,282 | ) | 17,233,829 | ||||||||
NON-CONTROLLING INTEREST | 173,776 | - | 173,776 | |||||||||
Total stockholders' equity | 19,193,887 | (1,786,282 | ) | 17,407,605 | ||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 40,099,677 | $ | (542,527 | ) | $ | 39,557,150 |
6 |
ELEPHANT TALK COMMUNICATION CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
AS AT SEPTEMBER 30, 2013
September 30, | September 30, | |||||||||||
2013 | Change | 2013 | ||||||||||
(UNAUDITED) | Restated | |||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS | ||||||||||||
Cash and cash equivalents | $ | 6,085,215 | $ | - | $ | 6,085,215 | ||||||
Restricted cash | 495,983 | - | 495,983 | |||||||||
Accounts receivable, net of allowance for doubtful accounts of $25,225 and $559,120 at September 30, 2013 | 4,173,398 | (978,579 | ) | 3,194,819 | ||||||||
Prepaid expenses and other current assets | 2,531,602 | - | 2,531,602 | |||||||||
Total current assets | 13,286,198 | (978,579 | ) | 12,307,619 | ||||||||
NON-CURRENT ASSETS | ||||||||||||
OTHER ASSETS | 1,382,857 | - | 1,382,857 | |||||||||
PROPERTY AND EQUIPMENT, NET | 18,663,407 | - | 18,663,407 | |||||||||
INTANGIBLE ASSETS, NET | 9,412,581 | - | 9,412,581 | |||||||||
GOODWILL | 3,707,903 | - | 3,707,903 | |||||||||
TOTAL ASSETS | $ | 46,452,946 | $ | (978,579 | ) | $ | 45,474,367 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
CURRENT LIABILITIES | ||||||||||||
Overdraft | $ | 380,550 | $ | - | $ | 380,550 | ||||||
Accounts payable and customer deposits | 4,905,101 | - | 4,905,101 | |||||||||
Deferred Revenue | 428,473 | - | 428,473 | |||||||||
Accrued expenses and other payables | 5,816,271 | - | 5,816,271 | |||||||||
Loans payable | 962,418 | - | 962,418 | |||||||||
10% Related Party Loan (net of Debt Discount of $2,385,206) | 267,393 | - | 267,393 | |||||||||
Total current liabilities | 12,760,206 | - | 12,760,206 | |||||||||
LONG TERM LIABILITIES | ||||||||||||
10% 3rd Party Loan (net of Debt Discount of $827,421) | 4,477,780 | - | 4,477,780 | |||||||||
Warrant liabilities | 4,116,480 | - | 4,116,480 | |||||||||
Trade note payable | 593,903 | - | 593,903 | |||||||||
Non-current portion of deferred revenue | - | 1,888,891 | 1,888,891 | |||||||||
Loan from joint venture partner | 590,165 | - | 590,165 | |||||||||
Total long term liabilities | 9,778,328 | 1,888,891 | 11,667,219 | |||||||||
Total liabilities | 22,538,534 | 1,888,891 | 24,427,425 | |||||||||
Commitments and Contingencies | ||||||||||||
STOCKHOLDERS' EQUITY | ||||||||||||
Preferred Stock $0.00001 par value, 50,000,000 shares authorized, 0 issued and outstanding | - | - | - | |||||||||
Common stock, .00001 par value, 250,000,000 shares authorized, 134,440,221 issued and outstanding as of September 30, 2013 | 243,294,324 | - | 243,294,324 | |||||||||
Accumulated other comprehensive income (loss) | (242,647 | ) | - | (242,647 | ) | |||||||
Accumulated deficit | (219,316,384 | ) | (2,867,470 | ) | (222,183,854 | ) | ||||||
Elephant Talk Communications, Corp. stockholders' equity | 23,735,293 | (2,867,470 | ) | 20,867,823 | ||||||||
NON-CONTROLLING INTEREST | 179,119 | - | 179,119 | |||||||||
Total stockholders' equity | 23,914,412 | (2,867,470 | ) | 21,046,942 | ||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 46,452,946 | $ | (978,579 | ) | $ | 45,474,367 |
The following tables set forth the correction to quarterly consolidated balance sheets for the first three quarterly periods of the fiscal year ended December 31, 2014
7 |
ELEPHANT TALK COMMUNICATION CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
AS AT MARCH 31, 2014
March 31, | March 31, | |||||||||||
2014 | 2014 | |||||||||||
(UNAUDITED) | Change | Restated | ||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS | ||||||||||||
Cash and cash equivalents | $ | 3,918,046 | $ | - | $ | 3,918,046 | ||||||
Restricted cash | 192,161 | - | 192,161 | |||||||||
Accounts receivable, net of allowance for doubtful accounts of $11,307 at March 31, 2014 | 6,262,041 | (1,228,374 | ) | 5,033,667 | ||||||||
Prepaid expenses and other current assets | 2,147,686 | - | 2,147,686 | |||||||||
Total current assets | 12,519,934 | (1,228,374 | ) | 11,291,560 | ||||||||
NON-CURRENT ASSETS | ||||||||||||
OTHER ASSETS | 1,357,728 | - | 1,357,728 | |||||||||
PROPERTY AND EQUIPMENT, NET | 19,954,703 | - | 19,954,703 | |||||||||
INTANGIBLE ASSETS, NET | 7,903,149 | - | 7,903,149 | |||||||||
GOODWILL | 3,769,199 | - | 3,769,199 | |||||||||
TOTAL ASSETS | $ | 45,504,713 | $ | (1,228,374 | ) | $ | 44,276,339 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
CURRENT LIABILITIES | ||||||||||||
Overdraft | $ | 402,234 | $ | - | $ | 402,234 | ||||||
Accounts payable and customer deposits | 2,419,325 | - | 2,419,325 | |||||||||
Obligations under capital leases (current portion) | 1,348,705 | - | 1,348,705 | |||||||||
Deferred revenue | 203,623 | 468,256 | 671,879 | |||||||||
Accrued expenses and other payables | 5,936,989 | - | 5,936,989 | |||||||||
Loans payable | 962,269 | - | 962,269 | |||||||||
10% Related Party Loan (net of Debt Discount of $937,814 at March 31, 2014 | 1,812,506 | - | 1,812,506 | |||||||||
Total current liabilities | 13,085,651 | 468,256 | 13,553,907 | |||||||||
LONG TERM LIABILITIES | ||||||||||||
10% 3rd Party Loan (net of Debt Discount of $623,726 at March 31, 2014) | 4,876,914 | - | 4,876,914 | |||||||||
Warrant liabilities | 2,183,806 | - | 2,183,806 | |||||||||
Non-current portion of obligation under capital leases | 465,954 | - | 465,954 | |||||||||
Non-current portion of deferred revenue | - | 2,774,415 | 2,774,415 | |||||||||
Loan from joint venture partner | 614,169 | - | 614,169 | |||||||||
Total long term liabilities | 8,140,843 | 2,774,415 | 10,915,258 | |||||||||
Total liabilities | 21,226,494 | 3,242,671 | 24,469,165 | |||||||||
Commitments and Contingencies | ||||||||||||
STOCKHOLDERS' EQUITY | ||||||||||||
Preferred Stock $0.00001 par value, 50,000,000 shares authorized, 0 issued and outstanding | - | - | - | |||||||||
Common Stock $0.00001 par value, 250,000,000 shares authorized, 146,364,577 issued and outstanding as of March 31, 2014 | 253,383,860 | - | 253,383,860 | |||||||||
Accumulated other comprehensive income | 267,650 | - | 267,650 | |||||||||
Accumulated deficit | (229,518,039 | ) | (4,471,045 | ) | (233,989,084 | ) | ||||||
Elephant Talk Communications, Corp. stockholders' equity | 24,133,471 | (4,471,045 | ) | 19,662,426 | ||||||||
NON-CONTROLLING INTEREST | 144,748 | - | 144,748 | |||||||||
Total stockholders' equity | 24,278,219 | (4,471,045 | ) | 19,807,174 | ||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 45,504,713 | $ | (1,228,374 | ) | $ | 44,276,339 |
8 |
ELEPHANT TALK COMMUNICATION CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
AS AT JUNE 30, 2014
June 30, | June 30, | |||||||||||
2014 | 2014 | |||||||||||
(UNAUDITED) | Change | Restated | ||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS | ||||||||||||
Cash and cash equivalents | $ | 829,388 | $ | - | $ | 829,388 | ||||||
Restricted cash | 191,703 | - | 191,703 | |||||||||
Accounts receivable, net of allowance for doubtful accounts of $29,547 and $7,693 at June 30, 2014 | 8,223,963 | (1,299,207 | ) | 6,924,756 | ||||||||
Prepaid expenses and other current assets | 2,619,882 | - | 2,619,882 | |||||||||
Total current assets | 11,864,936 | (1,299,207 | ) | 10,565,729 | ||||||||
NON-CURRENT ASSETS | ||||||||||||
OTHER ASSETS | 1,288,246 | - | 1,288,246 | |||||||||
PROPERTY AND EQUIPMENT, NET | 20,711,832 | - | 20,711,832 | |||||||||
INTANGIBLE ASSETS, NET | 7,122,940 | - | 7,122,940 | |||||||||
GOODWILL | 3,740,646 | - | 3,740,646 | |||||||||
TOTAL ASSETS | $ | 44,728,600 | $ | (1,299,207 | ) | $ | 43,429,393 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
CURRENT LIABILITIES | ||||||||||||
Overdraft | $ | 413,958 | $ | - | $ | 413,958 | ||||||
Accounts payable and customer deposits | 2,305,933 | - | 2,305,933 | |||||||||
Obligations under capital leases (current portion) | 1,898,346 | - | 1,898,346 | |||||||||
Deferred revenue | 163,848 | 468,256 | 632,104 | |||||||||
Accrued expenses and other payables | 6,592,945 | - | 6,592,945 | |||||||||
Loans payable | 963,051 | - | 963,051 | |||||||||
Total current liabilities | 12,338,081 | 468,256 | 12,806,337 | |||||||||
LONG TERM LIABILITIES | ||||||||||||
10% 3rd Party Loan (net of Debt Discount of $518,463 at June 30, 2014) | 4,940,798 | - | 4,940,798 | |||||||||
10% Related Party Loan (net of Debt Discount of $17,786 at June 30, 2014) | 2,711,844 | - | 2,711,844 | |||||||||
Warrant liabilities | 2,144,858 | - | 2,144,858 | |||||||||
Non-current portion of obligation under capital leases | 487,728 | - | 487,728 | |||||||||
Non-current portion of deferred revenue | - | 4,542,910 | 4,542,910 | |||||||||
Loan from joint venture partner | 626,534 | - | 626,534 | |||||||||
Total long term liabilities | 10,911,762 | 4,542,910 | 15,454,672 | |||||||||
Total liabilities | 23,249,843 | 5,011,166 | 28,261,009 | |||||||||
Commitments and Contingencies | ||||||||||||
STOCKHOLDERS' EQUITY | ||||||||||||
Preferred Stock $0.00001 par value, 50,000,000 shares authorized, 0 issued and outstanding | - | - | - | |||||||||
Common Stock $0.00001 par value, 250,000,000 shares authorized, 146,525,302 issued and outstanding as of June 30, 2014 (unaudited) | 255,328,306 | - | 255,328,306 | |||||||||
Accumulated other comprehensive income | 121,636 | - | 121,636 | |||||||||
Accumulated deficit | (234,115,159 | ) | (6,310,373 | ) | (240,425,532 | ) | ||||||
Elephant Talk Communications, Corp. stockholders' equity | 21,334,783 | (6,310,373 | ) | 15,024,410 | ||||||||
NON-CONTROLLING INTEREST | 143,974 | - | 143,974 | |||||||||
Total stockholders' equity | 21,478,757 | (6,310,373 | ) | 15,168,384 | ||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 44,728,600 | $ | (1,299,207 | ) | $ | 43,429,393 |
9 |
ELEPHANT TALK COMMUNICATION CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
AS AT SEPTEMBER 30, 2014
September 30, | September 30, | |||||||||||
2014 | 2014 | |||||||||||
(UNAUDITED) | Change | Restated | ||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS | ||||||||||||
Cash and cash equivalents | $ | 1,176,650 | $ | - | $ | 1,176,650 | ||||||
Restricted cash | 169,536 | - | 169,536 | |||||||||
Accounts receivable, net of an allowance for doubtful accounts of $0 at September 30, 2014 | 6,754,447 | (907,023 | ) | 5,847,424 | ||||||||
Prepaid expenses and other current assets | 2,319,310 | - | 2,319,310 | |||||||||
Total current assets | 10,419,943 | (907,023 | ) | 9,512,920 | ||||||||
NON-CURRENT ASSETS | ||||||||||||
OTHER ASSETS | 1,093,977 | - | 1,093,977 | |||||||||
PROPERTY AND EQUIPMENT, NET | 19,603,707 | - | 19,603,707 | |||||||||
INTANGIBLE ASSETS, NET | 6,000,884 | - | 6,000,884 | |||||||||
GOODWILL | 3,490,242 | - | 3,490,242 | |||||||||
TOTAL ASSETS | $ | 40,608,753 | $ | (907,023 | ) | $ | 39,701,730 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
CURRENT LIABILITIES | ||||||||||||
Overdraft | $ | 425,144 | $ | - | $ | 425,144 | ||||||
Accounts payable and customer deposits | 2,063,304 | - | 2,063,304 | |||||||||
Obligations under capital leases (current portion) | 1,828,083 | - | 1,828,083 | |||||||||
Deferred Revenue | 127,456 | 468,256 | 595,712 | |||||||||
Accrued expenses and other payables | 5,804,999 | - | 5,804,999 | |||||||||
Loans payable | 961,550 | - | 961,550 | |||||||||
Total current liabilities | 11,210,536 | 468,256 | 11,678,792 | |||||||||
LONG TERM LIABILITIES | ||||||||||||
2013 10% 3rd Party Loan (net of Debt Discount of $410,853 at September 30, 2014) | 4,663,227 | - | 4,663,227 | |||||||||
Warrant liabilities | 2,248,169 | - | 2,248,169 | |||||||||
Non-current portion of obligation under capital leases | 261,912 | - | 261,912 | |||||||||
Non-current portion of deferred revenue | - | 7,788,843 | 7,788,843 | |||||||||
Total long term liabilities | 7,173,308 | 7,788,843 | 14,962,151 | |||||||||
Total liabilities | 18,383,844 | 8,257,099 | 26,640,943 | |||||||||
Commitments and Contingencies | ||||||||||||
STOCKHOLDERS' EQUITY | ||||||||||||
Preferred Stock $0.00001 par value, 50,000,000 shares authorized, 0 issued and outstanding | - | - | - | |||||||||
Common Stock $0.00001 par value, 250,000,000 shares authorized, 151,312,189 issued and outstanding as of September 30, 2014 | 260,616,570 | - | 260,616,570 | |||||||||
Accumulated other comprehensive income (loss) | (2,003,871 | ) | - | (2,003,871 | ) | |||||||
Accumulated deficit | (236,521,852 | ) | (9,164,122 | ) | (245,685,974 | ) | ||||||
Elephant Talk Communications, Corp. stockholders' equity | 22,090,847 | (9,164,122 | ) | 12,926,725 | ||||||||
NON-CONTROLLING INTEREST | 134,062 | - | 134,062 | |||||||||
Total stockholders' equity | 22,224,909 | (9,164,122 | ) | 13,060,787 | ||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 40,608,753 | $ | (907,023 | ) | $ | 39,701,730 |
The following tables set forth the correction to the quarterly consolidated statement of comprehensive loss for the quarterly periods for the fiscal year 2013 and the reclassifications of certain operating expenses to conform to the current years reporting format.
10 |
ELEPHANT TALK COMMUNICATIONS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
FOR THE THREE MONTHS ENDED MARCH 31, 2013
March 31, 2013 | ||||||||||||||||
(unaudited) | Restatement adjustments | Re- classifications | Restated | |||||||||||||
REVENUES | $ | 6,596,500 | $ | (356,386 | ) | $ | - | $ | 6,240,114 | |||||||
COST AND OPERATING EXPENSES | ||||||||||||||||
Cost of service | 3,548,277 | - | 412,526 | 3,960,803 | ||||||||||||
Product development | - | - | 1,349,623 | 1,349,623 | ||||||||||||
Sales and marketing | - | - | 722,952 | 722,952 | ||||||||||||
General and administrative | 5,907,974 | - | (2,485,101 | ) | 3,422,873 | |||||||||||
Depreciation and amortization | 1,319,988 | - | - | 1,319,988 | ||||||||||||
Total cost and operating expenses | 10,776,239 | - | - | 10,776,239 | ||||||||||||
LOSS FROM OPERATIONS | (4,179,739 | ) | (356,386 | ) | - | (4,536,125 | ) | |||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||
Interest income | 33,721 | - | - | 33,721 | ||||||||||||
Interest expense | (223,752 | ) | - | - | (223,752 | ) | ||||||||||
Interest expense related to debt discount and conversion feature | (558,028 | ) | - | - | (558,028 | ) | ||||||||||
Change in fair value of conversion feature | (139,792 | ) | - | - | (139,792 | ) | ||||||||||
Amortization of deferred financing costs | (70,332 | ) | - | - | (70,332 | ) | ||||||||||
Total other income (expense) | (958,183 | ) | - | - | (958,183 | ) | ||||||||||
LOSS BEFORE PROVISION FOR INCOME TAXES | (5,137,922 | ) | (356,386 | ) | - | (5,494,308 | ) | |||||||||
Provision for income taxes | - | - | - | - | ||||||||||||
NET LOSS | (5,137,922 | ) | (356,386 | ) | - | (5,494,308 | ) | |||||||||
OTHER COMPREHENSIVE (LOSS) INCOME | ||||||||||||||||
Foreign currency translation gain (loss) | (761,762 | ) | - | - | (761,762 | ) | ||||||||||
(761,762 | ) | - | - | (761,762 | ) | |||||||||||
COMPREHENSIVE LOSS | $ | (5,899,684 | ) | (356,386 | ) | $ | - | $ | (6,256,070 | ) | ||||||
Net loss per common share and equivalents - basic and diluted | $ | (0.05 | ) | - | $ | - | $ | (0.05 | ) | |||||||
Weighted average shares outstanding during the period - basic and diluted | 112,748,951 | - | - | 112,748,951 |
11 |
ELEPHANT TALK COMMUNICATIONS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
FOR THE THREE MONTHS PERIOD ENDED JUNE 30, 2013
For the Three Months | ||||||||||||||||
Period ended | ||||||||||||||||
June 30, 2013 | Restatement adjustments | Re- classifications | Restated | |||||||||||||
REVENUES | $ | 4,994,145 | $ | (1,429,896 | ) | $ | - | $ | 3,564,249 | |||||||
COST AND OPERATING EXPENSES | ||||||||||||||||
Cost of service | 1,465,517 | - | 679,382 | 2,144,899 | ||||||||||||
Product development | - | - | 1,819,480 | 1,819,480 | ||||||||||||
Sales and marketing | - | - | 882,418 | 882,418 | ||||||||||||
General and administrative | 7,472,772 | - | (3,381,280 | ) | 4,091,492 | |||||||||||
Depreciation and amortization | 1,836,231 | - | - | 1,836,231 | ||||||||||||
Total cost and operating expenses | 10,774,520 | - | - | 10,774,520 | ||||||||||||
LOSS FROM OPERATIONS | (5,780,375 | ) | (1,429,896 | ) | - | (7,210,271 | ) | |||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||
Interest income | 21,527 | - | - | 21,527 | ||||||||||||
Interest expense | (208,144 | ) | - | - | (208,144 | ) | ||||||||||
Interest expense related to debt discount and conversion feature | (502,972 | ) | - | - | (502,972 | ) | ||||||||||
Change in fair value of conversion feature | 372,059 | - | - | 372,059 | ||||||||||||
Changes in fair value of warrant liabilities | 346,016 | - | - | 346,016 | ||||||||||||
Loss on Extinguishment of Debt | (1,938,597 | ) | - | - | (1,938,597 | ) | ||||||||||
Amortization of deferred financing costs | (2,075 | ) | - | - | (2,075 | ) | ||||||||||
Total other income (expense) | (1,912,186 | ) | - | - | (1,912,186 | ) | ||||||||||
LOSS BEFORE PROVISION FOR INCOME TAXES | (7,692,561 | ) | (1,429,896 | ) | - | (9,122,457 | ) | |||||||||
Provision for income taxes | - | - | - | - | ||||||||||||
NET LOSS | (7,692,561 | ) | (1,429,896 | ) | - | (9,122,457 | ) | |||||||||
- | - | |||||||||||||||
OTHER COMPREHENSIVE (LOSS) INCOME | ||||||||||||||||
Foreign currency translation loss | (534,887 | ) | - | - | (534,887 | ) | ||||||||||
(534,887 | ) | - | - | (534,887 | ) | |||||||||||
COMPREHENSIVE LOSS | $ | (8,227,448 | ) | $ | (1,429,896 | ) | $ | - | $ | (9,657,344 | ) | |||||
Net loss per common share and equivalents - basic and diluted | $ | (0.06 | ) | $ | - | $ | - | $ | (0.08 | ) | ||||||
Weighted average shares outstanding during the period - basic and diluted | 118,686,598 | - | - | 118,686,598 |
12 |
ELEPHANT TALK COMMUNICATIONS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
FOR THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2013
For the Three Months | ||||||||||||||||
Period ended | ||||||||||||||||
September 30, 2013 | Restatement adjustments | Re- classifications | Restated | |||||||||||||
REVENUES | $ | 5,204,982 | $ | (1,081,188 | ) | $ | - | $ | 4,123,794 | |||||||
COST AND OPERATING EXPENSES | ||||||||||||||||
Cost of service | 1,080,174 | - | 468,402 | 1,548,576 | ||||||||||||
Product development | - | - | 1,354,105 | 1,354,105 | ||||||||||||
Sales and marketing | - | - | 623,644 | 623,644 | ||||||||||||
General and administrative | 5,442,869 | - | (2,446,151 | ) | 2,996,718 | |||||||||||
Depreciation and amortization | 1,543,687 | - | - | 1,543,687 | ||||||||||||
Total cost and operating expenses | 8,066,730 | - | - | 8,066,730 | ||||||||||||
LOSS FROM OPERATIONS | (2,861,748 | ) | (1,081,188 | ) | - | (3,942,936 | ) | |||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||
Interest income | 33,773 | - | - | 33,773 | ||||||||||||
Interest expense | (181,074 | ) | - | - | (181,074 | ) | ||||||||||
Interest expense related to debt discount and conversion feature | (259,795 | ) | - | - | (259,795 | ) | ||||||||||
Loss on Extinguishment of Debt | (44,506 | ) | - | - | (44,506 | ) | ||||||||||
Changes in fair value of warrant liabilities | 173,333 | - | - | 173,333 | ||||||||||||
Amortization of deferred financing costs | (44,076 | ) | - | - | (44,076 | ) | ||||||||||
Total other income (expense) | (322,345 | ) | - | - | (322,345 | ) | ||||||||||
LOSS BEFORE PROVISION FOR INCOME TAXES | (3,184,093 | ) | (1,081,188 | ) | - | (4,265,281 | ) | |||||||||
Provision for income taxes | 41,500 | - | - | 41,500 | ||||||||||||
NET LOSS | (3,225,593 | ) | (1,081,188 | ) | - | (4,306,781 | ) | |||||||||
OTHER COMPREHENSIVE (LOSS) INCOME | ||||||||||||||||
Foreign currency translation gain (loss) | 489,443 | - | - | 489,443 | ||||||||||||
489,443 | - | - | 489,443 | |||||||||||||
COMPREHENSIVE LOSS | $ | (2,736,150 | ) | $ | (1,081,188 | ) | $ | - | $ | (3,817,338 | ) | |||||
Net loss per common share and equivalents - basic and diluted | $ | (0.02 | ) | $ | - | $ | - | $ | (0.03 | ) | ||||||
Weighted average shares outstanding during the period - basic and diluted | 134,440,221 | - | - | 134,440,221 |
The following tables set forth the correction to quarterly consolidated statements of comprehensive loss for the quarterly periods for the fiscal year 2014 and the reclassifications of certain operating expenses to conform to the current years reporting format.
13 |
ELEPHANT TALK COMMUNICATIONS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
FOR THE THREE MONTHS ENDED MARCH 31, 2014
March 31, 2014 | Restatement adjustments | Re- classifications | Restated | |||||||||||||
REVENUES | $ | 6,479,853 | $ | (1,095,588 | ) | $ | - | $ | 5,384,265 | |||||||
COST AND OPERATING EXPENSES | ||||||||||||||||
Cost of service | 983,464 | - | 652,508 | 1,635,972 | ||||||||||||
Product development | - | - | 1,711,817 | 1,711,817 | ||||||||||||
Sales and marketing | - | - | 563,835 | 563,835 | ||||||||||||
General and administrative | 5,976,107 | - | (2,928,159 | ) | 3,047,948 | |||||||||||
Depreciation and amortization | 2,008,214 | - | - | 2,008,214 | ||||||||||||
Total cost and operating expenses | 8,967,785 | - | - | 8,967,785 | ||||||||||||
LOSS FROM OPERATIONS | (2,487,932 | ) | (1,095,588 | ) | - | (3,583,520 | ) | |||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||
Interest income | 27,611 | - | - | 27,611 | ||||||||||||
Interest expense | (301,944 | ) | - | - | (301,944 | ) | ||||||||||
Interest expense related to Debt Discount and Conversion Feature | (884,740 | ) | - | - | (884,740 | ) | ||||||||||
Change in fair value of warrant liabilities | (210,272 | ) | - | - | (210,272 | ) | ||||||||||
Loss on extinguishment of debt | (426 | ) | - | - | (426 | ) | ||||||||||
Other income and (expense) | 3,390 | - | - | 3,390 | ||||||||||||
Amortization of deferred financing costs | (136,367 | ) | - | - | (136,367 | ) | ||||||||||
Total other income (expense) | (1,502,748 | ) | - | - | (1,502,748 | ) | ||||||||||
LOSS BEFORE PROVISION FOR INCOME TAXES | (3,990,680 | ) | (1,095,588 | ) | - | (5,086,268 | ) | |||||||||
Provision for income taxes | (135,437 | ) | - | - | (135,437 | ) | ||||||||||
NET LOSS | (4,126,117 | ) | (1,095,588 | ) | - | (5,221,705 | ) | |||||||||
OTHER COMPREHENSIVE (LOSS) INCOME | ||||||||||||||||
Foreign currency translation (loss) | (2,219 | ) | - | - | (2,219 | ) | ||||||||||
COMPREHENSIVE LOSS | $ | (4,128,336 | ) | (1,095,588 | ) | $ | - | $ | (5,223,924 | ) | ||||||
Net loss per common share and equivalents - basic and diluted | $ | (0.03 | ) | - | $ | - | $ | (0.04 | ) | |||||||
Weighted average shares outstanding during the period - basic and diluted | 141,752,128 | - | - | 141,752,128 |
14 |
ELEPHANT TALK COMMUNICATIONS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
FOR THE THREE MONTHS PERIOD ENDED JUNE 30, 2014
For the three month | ||||||||||||||||
period ended | ||||||||||||||||
June 30, 2014 | Restatement adjustments | Re- classifications | Restated | |||||||||||||
REVENUES | $ | 6,911,768 | (1,839,328 | ) | $ | - | $ | 5,072,440 | ||||||||
COST AND OPERATING EXPENSES | ||||||||||||||||
Cost of service | 828,581 | - | 1,020,106 | 1,848,687 | ||||||||||||
Product development | - | - | 2,280,532 | 2,280,532 | ||||||||||||
Sales and marketing | - | - | 664,807 | 664,807 | ||||||||||||
General and administrative | 7,432,784 | - | (3,965,446 | ) | 3,467,338 | |||||||||||
Depreciation and amortization | 1,928,392 | - | - | 1,928,392 | ||||||||||||
Total cost and operating expenses | 10,189,757 | - | - | 10,189,757 | ||||||||||||
LOSS FROM OPERATIONS | (3,277,989 | ) | (1,839,328 | ) | - | (5,117,317 | ) | |||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||
Interest income | 29,545 | - | - | 29,545 | ||||||||||||
Interest expense | (333,214 | ) | - | - | (333,214 | ) | ||||||||||
Interest expense related to debt discount and conversion feature | (1,025,292 | ) | - | - | (1,025,292 | ) | ||||||||||
Changes in fair value of warrant liabilities | 38,948 | - | - | 38,948 | ||||||||||||
Other income and (expense), net | 68,008 | - | - | 68,008 | ||||||||||||
Amortization of deferred financing costs | (113,090 | ) | - | - | (113,090 | ) | ||||||||||
Total other income (expense) | (1,335,095 | ) | - | - | (1,335,095 | ) | ||||||||||
LOSS BEFORE (BENEFIT) PROVISION FOR INCOME TAXES | (4,613,084 | ) | (1,839,328 | ) | - | (6,452,412 | ) | |||||||||
Provision (benefit) for income taxes | (2,209 | ) | - | - | (2,209 | ) | ||||||||||
NET LOSS | (4,610,875 | ) | (1,839,328 | ) | - | (6,450,203 | ) | |||||||||
OTHER COMPREHENSIVE (LOSS) INCOME | ||||||||||||||||
Foreign currency translation loss | (148,233 | ) | - | - | (148,233 | ) | ||||||||||
COMPREHENSIVE LOSS | $ | (4,759,108 | ) | (1,839,328 | ) | $ | - | $ | (6,598,436 | ) | ||||||
Net loss per common share and equivalents - basic and diluted | $ | (0.03 | ) | - | $ | - | $ | (0.04 | ) | |||||||
Weighted average shares outstanding during the period - basic and diluted | 146,482,547 | - | - | 146,482,547 |
15 |
ELEPHANT TALK COMMUNICATIONS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
FOR THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2014
For the three month | ||||||||||||||||
period ended | ||||||||||||||||
September 30, 2014 | Restatement adjustments | Re- classifications | Restated | |||||||||||||
REVENUES | $ | 7,298,988 | $ | (2,853,749 | ) | $ | - | $ | 4,445,239 | |||||||
COST AND OPERATING EXPENSES | ||||||||||||||||
Cost of service (exclusive of depreciation and amortization shown separately below) | 848,771 | - | 716,283 | 1,565,054 | ||||||||||||
Product development | - | - | 1,707,102 | 1,707,102 | ||||||||||||
Sales and marketing | - | - | 555,519 | 555,519 | ||||||||||||
General and administrative | 6,227,147 | - | (2,978,904 | ) | 3,248,243 | |||||||||||
Depreciation and amortization | 1,900,251 | - | - | 1,900,251 | ||||||||||||
Total cost and operating expenses | 8,976,169 | - | - | 8,976,169 | ||||||||||||
LOSS FROM OPERATIONS | (1,677,181 | ) | (2,853,749 | ) | - | (4,530,930 | ) | |||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||
Interest income | 36,684 | - | - | 36,684 | ||||||||||||
Interest expense | (260,295 | ) | - | - | (260,295 | ) | ||||||||||
Interest expense related to debt discount and conversion feature | (1,287,717 | ) | - | - | (1,287,717 | ) | ||||||||||
Changes in fair value of warrant liabilities | (103,311 | ) | - | - | (103,311 | ) | ||||||||||
Gain / (Loss) on Extinguishment of Debt | 626,534 | - | - | 626,534 | ||||||||||||
Other income & (expense), net | 301,199 | - | - | 301,199 | ||||||||||||
Amortization of deferred financing costs | (73,789 | ) | - | - | (73,789 | ) | ||||||||||
Total other income (expense) | (760,695 | ) | - | - | (760,695 | ) | ||||||||||
LOSS BEFORE (BENEFIT) PROVISION FOR INCOME TAXES | (2,437,876 | ) | (2,853,749 | ) | - | (5,291,625 | ) | |||||||||
(Benefit) / provision for income taxes | (44,938 | ) | - | - | (44,938 | ) | ||||||||||
NET LOSS | (2,392,938 | ) | (2,853,749 | ) | - | (5,246,687 | ) | |||||||||
OTHER COMPREHENSIVE (LOSS) INCOME | ||||||||||||||||
Foreign currency translation gain (loss) | (2,273,740 | ) | - | - | (2,273,740 | ) | ||||||||||
COMPREHENSIVE LOSS | $ | (4,666,678 | ) | $ | (2,853,749 | ) | $ | - | $ | (7,520,427 | ) | |||||
Net loss per common share and equivalents - basic and diluted | $ | (0.02 | ) | $ | - | $ | - | $ | (0.04 | ) | ||||||
Weighted average shares outstanding during the period - basic and diluted | 149,468,618 | - | - | 149,468,618 |
All earnings press releases and similar prior communications issued by the Company as well as other prior statements made by or on behalf of the Company relating to financial reporting or results of operations of the above periods should not be relied upon. Additionally, BDO’s opinion on the consolidated financial statements for the year ended December 31, 2013, as well as BDO’s adverse opinion on the effectiveness of the Company’s internal controls over financial reporting as of December 31, 2013 should no longer be relied upon.
Cautionary Statement Regarding Forward Looking Information
This report includes “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These statements include statements about our plans, strategies, financial performance, prospects or future events and involve known and unknown risks that are difficult to predict. As a result, our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “likely,” “will,” “would” and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by the Company and our management team, are inherently uncertain. A description of the risks and uncertainties can be found in the reports and other documents filed with the U.S. Securities and Exchange Commission. The Company cautions readers not to rely on these forward-looking statements. The Company undertakes no obligation to update any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable laws.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: April 1, 2015
| ELEPHANT TALK COMMUNICATIONS CORP. | ||
By: | /s/ Alex Vermeulen | ||
Alex Vermeulen | |||
General Counsel |
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