Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 1-May-15 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Entity Registrant Name | ELEPHANT TALK COMMUNICATIONS CORP | |
Entity Central Index Key | 1084384 | |
Current Fiscal Year End Date | -19 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2015 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 155,410,343 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
CURRENT ASSETS | ||
Cash and cash equivalents | $994,693 | $1,904,160 |
Financing receivable | 2,000,000 | |
Restricted cash | 416,304 | 312,935 |
Accounts receivable | 13,562,151 | 8,877,213 |
Prepaid expenses and other current assets | 1,888,499 | 2,478,681 |
Total current assets | 16,861,647 | 15,572,989 |
NON-CURRENT ASSETS | ||
OTHER ASSETS | 1,326,090 | 1,600,335 |
PROPERTY AND EQUIPMENT, NET | 17,796,754 | 19,319,202 |
INTANGIBLE ASSETS, NET | 4,111,695 | 5,076,208 |
GOODWILL | 3,012,954 | 3,352,264 |
TOTAL ASSETS | 43,109,140 | 44,920,998 |
CURRENT LIABILITIES | ||
Overdraft | 433,366 | |
Accounts payable and customer deposits | 2,331,938 | 1,856,014 |
Obligations under capital leases (current portion) | 1,757,809 | 1,831,050 |
Deferred Revenue | 12,891,050 | 8,813,385 |
Accrued expenses and other payables | 3,054,813 | 4,061,652 |
Loans payable | 962,269 | |
2014 10% + libor 3rd Party Loan (net of OID of $733,353 at March 31, 2015 and $798,894 at December 31, 2014) | 11,266,647 | 11,201,106 |
Total current liabilities | 31,302,257 | 29,158,842 |
LONG TERM LIABILITIES | ||
Warrant liabilities | 1,841,290 | 2,087,992 |
Non-current portion of obligation under capital leases | 176,298 | 272,460 |
Other long term loan | 302,533 | 354,880 |
Non-current portion of deferred revenue | 1,873,088 | 2,434,257 |
Total long term liabilities | 4,193,209 | 5,149,589 |
Total liabilities | 35,495,466 | 34,308,431 |
Commitments and Contingencies (See Notes) | ||
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, 154,866,885 issued and outstanding as of March 31, 2015 and 154,671,258 shares issued and outstanding as of December 31, 2014 | 265,198,811 | 264,359,674 |
Accumulated other comprehensive income (loss) | -4,839,570 | -3,127,132 |
Accumulated deficit | -252,754,469 | -250,629,296 |
Elephant Talk Communications, Corp. stockholders' equity | 7,604,772 | 10,603,246 |
NON-CONTROLLING INTEREST | 8,902 | 9,321 |
Total stockholders' equity | 7,613,674 | 10,612,567 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $43,109,140 | $44,920,998 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
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 | 154,866,885 | 154,671,258 |
Common stock, shares outstanding | 154,866,885 | 154,671,258 |
Term Loan 2014 [Member] | ||
Loan payable, interest rate spread | 10.00% | 10.00% |
Description of variable rate basis | libor | libor |
Discount on debt | $733,353 | $798,894 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS [Abstract] | ||
REVENUES | $5,013,016 | $5,384,265 |
COST AND OPERATING EXPENSES | ||
Cost of service (excluding depreciation and amortization) | 1,868,846 | 1,635,972 |
Product development | 1,036,121 | 1,711,817 |
Sales and marketing | 662,160 | 563,835 |
General and administrative | 2,961,096 | 3,047,947 |
Depreciation and amortization of intangibles assets | 1,746,147 | 2,008,214 |
Total cost and operating expenses | 8,274,370 | 8,967,785 |
LOSS FROM OPERATIONS | -3,261,354 | -3,583,520 |
OTHER INCOME (EXPENSE) | ||
Interest income | 30,272 | 27,611 |
Interest expense | -367,340 | -301,944 |
Interest expense related to debt discount and conversion feature | -63,972 | -884,740 |
Changes in fair value of warrant liabilities | 246,702 | -210,272 |
Gain / (Loss) on Extinguishment of Debt | 2,475,799 | -426 |
Other income & (expense), net | -1,191,270 | 3,390 |
Amortization of deferred financing costs | -62,502 | -136,367 |
Total other income (expense) | 1,067,689 | -1,502,748 |
LOSS BEFORE (BENEFIT) PROVISION FOR INCOME TAXES | -2,193,665 | -5,086,268 |
(Benefit) / provision for income taxes | -68,492 | 135,437 |
NET LOSS | -2,125,173 | -5,221,705 |
OTHER COMPREHENSIVE (LOSS) INCOME | ||
Foreign currency translation gain (loss) | -1,712,438 | -2,219 |
COMPREHENSIVE LOSS | ($3,837,611) | ($5,223,924) |
Net loss per common share and equivalents - basic and diluted | ($0.01) | ($0.04) |
Weighted average shares outstanding during the period - basic and diluted | 154,854,572 | 141,752,128 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | ($2,125,173) | ($5,221,705) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 1,746,147 | 2,008,214 |
Provision for doubtful accounts | 8,184 | 611 |
Stock based compensation | 831,813 | 771,724 |
Change in fair value of warrant liability | -246,702 | 210,272 |
Amortization of deferred financing costs | 62,502 | 136,367 |
Interest expense relating to debt discount and conversion feature | 63,972 | 884,740 |
Unrealized foreign currency translation gain loss | 1,191,270 | -3,390 |
(Profit) / Loss on Extinguishment of Debt | -2,475,799 | 426 |
Changes in operating assets and liabilities: | ||
Decrease (increase) in accounts receivable | -5,983,834 | 52,538 |
Decrease (increase) in prepaid expenses, deposits and other assets | 489,564 | 165,627 |
Increase (decrease) in accounts payable and customer deposits | 626,729 | 319,553 |
Increase (decrease) in deferred revenue | 2,981,659 | 809,561 |
Increase (decrease) in accrued expenses and other payables | 296,266 | 643,281 |
Net cash (used in) provided by operating activities | -2,533,402 | 777,819 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | -1,511,179 | -1,802,951 |
Net cash used in investing activities | -1,511,179 | -1,802,951 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Financing related fees | -90,000 | |
Financing receivable | 2,000,000 | |
Exercise of warrants & options | 5,861 | 4,093,480 |
Net cash provided by financing activities | 2,005,861 | 4,003,480 |
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | 1,129,253 | -312,617 |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | -909,467 | 2,665,731 |
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD | 1,904,160 | 1,252,315 |
CASH AND CASH EQUIVALENTS, END OF THE PERIOD | 994,693 | 3,918,046 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Cash paid during the period for interest | 359,521 | 68,190 |
Cash paid during the period for income taxes | $14,246 | $56,881 |
Financial_Condition
Financial Condition | 3 Months Ended |
Mar. 31, 2015 | |
Financial Condition [Abstract] | |
Financial Condition | Note 1. Financial Condition |
As reflected in the accompanying consolidated financial statements the Company incurred net losses of $2,125,173 for the three month period ended March 31, 2015, and had an accumulated deficit of $252,754,469 as of March 31, 2015. | |
Cash balance of the company at March 31st 2015 was $994,693 which was negatively impacted by an increase of the accounts receivable of $5,983,834 following the increase of $3,131,407 that already occurred in the fourth quarter 2014, totaling an accounts receivable increase of $9,115,241 over the six months ended March 31, 2015. The primary cause of the accounts receivable increases are the result of Grupo lusacell, S.A.'s (“Iusacell”) deferring the payment for services performed during the fourth quarter 2014 to the first quarter 2015. The outstanding receivables of Iusacell constituted 72% and 64% of total accounts receivable at December 31st 2014 and March 31st, 2015 respectively. After Iusacell was acquired by AT&T, AT&T/Iusacell indicated its intention to terminate the five-year agreement between the Company and Iusacell dated September 10, 2013 (the “Iusacell Agreement”). The Company received a settlement proposal from Iusacell/AT&T, in exchange for the termination of the Iusacell Agreement, payment of a certain amount of cash, consisting of outstanding account payables and additional payment to compensate the Company for the loss of future fees to be due under the Iusacell Agreement.Presently management is evaluating the settlement proposal of Iusacell/AT&T. The intended termination of Iusacell Agreement has and will have a significant impact to our revenue, financial conditions and liquidity. We expect reaching a settlement agreement with AT&T/Iusacell in the near future. | |
During the three months ended March 31, 2015, if Iusacell would have paid the agreed amounts for first quarter 2015 we would have received a cash payments of $1.3 million per month. In addition to the Iusacell termination negotiations and associated expected cash inflow the Company has started to reduce cash expenses, has initiated a staff reduction program, made benefit reductions and payment of stock in lieu arrangements of cash compensation for senior management. Furthermore, sales efforts have increased in order to accelerate new customer take-on. In parallel, the Company is in discussions with its lender Atalaya Administrative LLC in order to resolve the impact of occurrence of events of default as defined in the Credit Agreement as a result of the pending Iusacell termination. The Company anticipates resolution both with AT&T/Iusacell as well as with Atalaya Administrative LLC. There can be no assurance that the outcome will be successful as the Company expected. In case the outcome falls short of the Company's expectations, the Company will need to pursue financing and/or further scale back its operations. Even though the Company has been successful in the past to arrange for sufficient liquidity for the Company, the above conditions raise substantial doubt as to 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. | |
Description_of_Business_Basis_
Description of Business, Basis of Presentation and Use of Estimates | 3 Months Ended |
Mar. 31, 2015 | |
Description of Business, Basis of Presentation and Use of Estimates [Abstract] | |
Description of Business, Basis of Presentation and Use of Estimates | Note 2. Description of Business, Basis of Presentation and Use of Estimates |
Description of Business | |
As a mobile Software Defined Network Architecture (ET Software DNA® 2.0) vendor Elephant Talk Communications Corp. and its subsidiaries (also referred to as “Elephant Talk”, “ET” and “the Company”) provide a one stop solution for a full suite of mobile, fixed and convergent telecommunications software services. We also provide layered security services for mission critical applications in the cloud, through our wholly owned subsidiary, ValidSoft UK Limited (“ValidSoft”). | |
Over the last decade, Elephant Talk has developed a comprehensive virtualized (NFV & SDN) Mobile Software Platform, capable of hosting an integrated IT/BackOffice and Core Network for Mobile Network Operators (MNOs), Mobile Virtual Network Operators (MVNOs), Enablers (MVNEs) and Aggregators (MVNAs) on a fully outsourced basis. Our mobile enabling platform is either made available as an on premise solution or as a fully hosted service in ‘the cloud', depending on the individual needs of our customers. Our mobile security services supply voice biometric and telecommunications-based multi-factor authentication, identity and transaction verification solutions for all electronic transaction channels. This integrated suite of security services provides mission critical applications in the cloud to enterprise customers in a range of industries including financial services, government, insurance, as well as electronic medical record providers and MNOs. Our company provides customers the means to effectively combat a variety of electronic fraud while at the same time protecting consumer privacy. | |
Basis of Presentation of Interim Periods | |
The interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, for interim financial information and with the instructions to Securities and Exchange Commission, or SEC, Form 10-Q and Article 10 of SEC Regulation S-X. They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended December 31, 2014, included in our 2014 Annual Report on Form 10-K filed with the SEC on April 1, 2015, referred to as our 2014 Annual Report. | |
The interim condensed consolidated financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly our results of operations and financial position for the interim periods. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results to be expected for future quarters or the full year. | |
For a complete summary of our significant accounting policies, please refer to Note 2, “Business and Summary of Significant Accounting Policies,” of our 2014 Annual Report. There have been no material changes to our significant accounting policies during the three months ended March 31, 2015. | |
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 financial instruments, useful lives and share-based compensation. Actual results may differ from these estimates under different assumptions or conditions. |
Supplemental_Financial_Informa
Supplemental Financial Information | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Supplemental Financial Information [Abstract] | |||||||||||||
Supplemental Financial Information | Note 3. Supplemental Financial Information | ||||||||||||
The following tables present details of our condensed consolidated financial statements: | |||||||||||||
Prepaid expenses and other current assets | |||||||||||||
March 31, | December 31, | ||||||||||||
2015 | 2014 | ||||||||||||
Recurring prepaid expenses | $ | 691,287 | $ | 455,529 | |||||||||
Non recurring prepaid expenses | 202,755 | 731,725 | |||||||||||
Taxes | 321,700 | 359,087 | |||||||||||
VAT | 665,731 | 742,773 | |||||||||||
Inventory SIM cards | 7,026 | 189,567 | |||||||||||
$ | 1,888,499 | $ | 2,478,681 | ||||||||||
Other Assets | March 31, | December 31, | |||||||||||
2015 | 2014 | ||||||||||||
Long term deposits | $ | 415,571 | $ | 653,002 | |||||||||
Deferred Financing Costs | 660,609 | 682,878 | |||||||||||
Due from third parties | 249,910 | 264,455 | |||||||||||
$ | 1,326,090 | $ | 1,600,335 | ||||||||||
Property and equipment | March 31, | December 31, | |||||||||||
2015 | 2014 | ||||||||||||
Furniture & fixtures | $ | 287,543 | $ | 281,214 | |||||||||
Computer, communications and network equipment | 23,590,770 | 23,904,494 | |||||||||||
Software | 4,694,417 | 4,556,364 | |||||||||||
Automobiles | 72,183 | 80,860 | |||||||||||
Construction in progress | 2,438,237 | 4,044,932 | |||||||||||
Acc. Depreciation Property & Equipment | (13,286,396 | ) | (13,548,662 | ) | |||||||||
$ | 17,796,754 | $ | 19,319,202 | ||||||||||
Intangible assets | March 31, | December 31, | |||||||||||
2015 | 2014 | ||||||||||||
Validsoft IP & Technology | $ | 11,342,770 | $ | 14,344,604 | |||||||||
Customer Contracts, Licenses , Interconnect & Technology | 3,282,608 | 1,870,523 | |||||||||||
Accumulated amortization Validsoft IP & Technology | (8,111,372 | ) | (9,973,063 | ) | |||||||||
Accumulated amortization Customer Contracts, Licenses, Interconnect & Technology | (2,402,311 | ) | (1,165,856 | ) | |||||||||
$ | 4,111,695 | $ | 5,076,208 | ||||||||||
Goodwill | March 31, | December 31, | |||||||||||
2015 | 2014 | ||||||||||||
Goodwill ValidSoft Ltd | $ | 2,646,301 | $ | 2,964,423 | |||||||||
Goodwill Morodo Ltd. | 176,252 | 197,440 | |||||||||||
Goodwill Telnicity | 190,401 | 190,401 | |||||||||||
$ | 3,012,954 | $ | 3,352,264 | ||||||||||
Accrued expenses and other payables | March 31, | December 31, | |||||||||||
2015 | 2014 | ||||||||||||
Accrued Selling, General & Administrative expenses | $ | 2,058,157 | $ | 1,863,020 | |||||||||
Accrued cost of service | 364,929 | 291,553 | |||||||||||
Accrued taxes (including VAT) | 428,988 | 570,616 | |||||||||||
Accrued interest payable | 106,222 | 1,184,418 | |||||||||||
Other accrued expenses | 96,517 | 152,045 | |||||||||||
$ | 3,054,813 | $ | 4,061,652 | ||||||||||
2014 10% + libor 3rd Party Term Loan Agreement | March 31, | December 31, | |||||||||||
2015 | 2014 | ||||||||||||
2014 10% Term Loan (principal amount) | $ | 12,000,000 | $ | 12,000,000 | |||||||||
Debt Discount - Original Issue Discount | (335,223 | ) | (365,231 | ) | |||||||||
Debt Discount - Warrants | (398,130 | ) | (433,663 | ) | |||||||||
$ | 11,266,647 | $ | 11,201,106 | ||||||||||
On March 26, 2015, the Company was notified by Atalaya Capital Management LP , the agent for Corbin Mezzanine Fund I, L. P. that certain events of default as defined in the Credit Agreement have occurred and that for so long as an event of default shall be continuing, interest shall accrue and be payable by the Company in cash at the default rate as defined in the Credit Agreement. Atalaya Capital Management LP indicated in the notification that they will continue to monitor the default situation and reserve all their respective rights and remedies under the Credit Agreement. |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Fair Value Measurements [Abstract] | |||||||||||||||||
Fair Value Measurements | Note 4. 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. | |||||||||||||||||
The Company has three asset groups that are valued at fair value categorized within Level 3: Warrant liabilities (recurring measurement), goodwill and intangibles (non-recurring measurements) for the impairment test. Below are discussions of the main assumptions used for the recurring measurements. | |||||||||||||||||
The following tables summarize fair value measurements by level as of March 31, 2015 and December 31, 2014 for financial assets and liabilities measured at fair value on a recurring basis: | |||||||||||||||||
31-Mar-15 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Derivative Liabilities | |||||||||||||||||
Warrant Liabilities | $ | - | $ | - | $ | 1,841,290 | $ | 1,841,290 | |||||||||
Total Derivatives Liabilities | $ | - | $ | - | $ | 1,841,290 | $ | 1,841,290 | |||||||||
31-Dec-14 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Derivative Liabilities | |||||||||||||||||
Warrant Liabilities | $ | - | $ | - | $ | 2,087,992 | $ | 2,087,992 | |||||||||
Total Derivatives Liabilities | $ | - | $ | - | $ | 2,087,992 | $ | 2,087,992 | |||||||||
The Company has classified the outstanding warrant liabilities into level 3 due to the fact that some inputs are not published and not easily comparable to industry peers. The differences in level 3 items from December 31, 2014 to March 31, 2015 were only as a result in changes in the fair values. 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. |
Stockholders_Equity
Stockholders' Equity | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Stockholders' Equity [Abstract] | |||||||||||||
Stockholders' Equity | Note 5. Stockholders' Equity | ||||||||||||
(A) Common Stock | |||||||||||||
The Company is presently authorized to issue 250,000,000 shares common stock. The Company had 154,866,885 and 154,671,258 shares of common stock issued and outstanding as of March 31, 2015 (unaudited) and December 31, 2014, respectively, an increase of 195,627 shares, 8,668 shares were issued to employees as a result of exercised employee stock options, and a total of 186,959 shares were issued from the 2008 Option Plan as compensation to the Company's executive officers and non-executive directors. | |||||||||||||
Reconciliation with Stock Transfer Agent Records: | |||||||||||||
The shares issued and outstanding as of March 31, 2015 and December 31, 2014 according to the Company's stock transfer agent's records were 155,112,785 and 154,917,158, respectively. The difference in number of issued shares recognized by the Company of 154,866,885 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 preferred stock $0.00001 par value per share (the “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, subject to the rules of the NYSE MKT LLC, 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. | |||||||||||||
For the period ended March 31, 2015, the Company did not issue any shares of Preferred Stock, and no shares of Preferred Stock are outstanding. | |||||||||||||
(C) Warrants | |||||||||||||
Throughout the years, the Company has issued warrants with varying terms and conditions related to multiple financing rounds, acquisitions and other transactions. The warrants outstanding at March 31, 2015 (unaudited) and December 31, 2014 have been recorded and classified as equity, except as of March 31, 2015 and December 31, 2014, the Company has recorded $1,841,290 and $2,087,992, respectively, in the balance sheet for the warrant liabilities issued in connection with the Registered Direct Offering from 2013. The Weighted Average Exercise Price for the currently outstanding warrants in the table below is $1.20. The table below summarizes the warrants outstanding as of March 31, 2015 and as of December 31, 2014: | |||||||||||||
Outstanding | Exercise/ | Expiring | 2015 | 2014 | |||||||||
Warrants | Conversion | ||||||||||||
price(s) | |||||||||||||
(range) | |||||||||||||
Warrants – Fundraising | $0.853- $2.00 | 2013 – 2018 | 29,610,206 | 29,610,206 | |||||||||
Warrants – Other | $2.21 | 2016 | 18,659 | 18,659 | |||||||||
29,628,865 | 29,628,865 |
2006_NonQualified_Stock_and_Op
2006 Non-Qualified Stock and Option Compensation Plan and Amended and Restated 2008 Long Term Incentive Compensation Plan | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
2006 Non-Qualified Stock and Option Compensation Plan and Amended and Restated 2008 Long Term Incentive Compensation Plan [Abstract] | ||||||||||||
2006 Non-Qualified Stock and Option Compensation Plan and Amended and Restated 2008 Long Term Incentive Compensation Plan | Note 6. 2006 Non-Qualified Stock and Option Compensation Plan and Amended and Restated 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 March 31, 2015 and December 31, 2014. All remaining outstanding options expired in December 2013. | ||||||||||||
Amended and Restated 2008 Long-Term Incentive Compensation Plan | ||||||||||||
Total Authorized under the plan | 56,000,000 | |||||||||||
Shares issued in prior years | 1,951,031 | |||||||||||
Shares issued in 2015 | 186,959 | |||||||||||
Options exercised | 2,382,110 | |||||||||||
Outstanding options | 42,037,535 | |||||||||||
Available for grant at 31 March 2015: | 9,442,365 | |||||||||||
During the first quarter of 2015, the Company issued 186,959 freely tradable shares to various directors and officers under the 2008 Plan, in conjunction with their willingness to receive all or part of their cash compensation for the fourth quarter of 2014 in shares of the Company. | ||||||||||||
Stock option activity is set forth below: | ||||||||||||
Options: | Number of Options | Weighted Average Exercise Price | ||||||||||
Outstanding as of December 31, 2014 | 40,056,080 | $ | 1.32 | |||||||||
Granted in 2015 | 6,685,230 | $ | 0.81 | |||||||||
Exercised (with delivery of shares) | (8,668 | ) | $ | 0.68 | ||||||||
Forfeitures (Pre-vesting) | (3,875,185 | ) | $ | 1.24 | ||||||||
Expirations (Post-vesting) | (819,922 | ) | $ | 2.2 | ||||||||
Exchanged for Cashless exercise | - | $ | - | |||||||||
Outstanding as of March 31, 2015 | 42,037,535 | $ | 1.31 | |||||||||
At March 31, 2015, the unrecognized expense portion of stock-based awards granted to employees under the 2008 Plan was approximately $7,419,546, compared to $11,952,452 for the same period in 2014, 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. If there are any modifications or cancellations of the underlying unvested awards, we may be required to accelerate, increase or cancel any remaining unearned stock-based compensation expense. |
Income_taxes
Income taxes | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Income taxes [Abstract] | |||||||||||||
Income taxes | Note 7. Income taxes | ||||||||||||
Income Taxes | |||||||||||||
The following table presents details of the net (benefit) provision for income taxes: | |||||||||||||
March 31, | |||||||||||||
2015 | 2014 | ||||||||||||
Net (Benefit) Provision for income taxes | $ | (68,492 | ) | $ | 135,437 | ||||||||
As a result of our cumulative tax losses in the U.S. and certain foreign jurisdictions, and the full utilization of our loss carryback opportunities, we have concluded that a full valuation allowance should be recorded in such jurisdictions. In certain other foreign jurisdictions where we do not have cumulative losses, we had net deferred tax liabilities. |
Significant_Customer_and_Geogr
Significant Customer and Geographical Information | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Significant Customer and Geographical Information [Abstract] | ||||||||||||
Significant Customer and Geographical Information | Note 8. Significant Customer and Geographical Information | |||||||||||
Sales to our significant customers, as a percentage of net revenue were as follows: | ||||||||||||
Three Months Ended | ||||||||||||
31-Mar | ||||||||||||
2015 | 2014 | |||||||||||
Two largest customers | 67.4 | % | 77.5 | % | ||||||||
The geographical distribution of our revenue, as a percentage of revenue, was as follows: | ||||||||||||
Three Months Ended | ||||||||||||
31-Mar | ||||||||||||
2015 | 2014 | |||||||||||
Europe | 64.9 | % | 65.6 | % | ||||||||
All other (non-European) countries | 35.1 | 34.4 | ||||||||||
100 | % | 100 | % |
Restatement
Restatement | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Restatement [Abstract] | ||||||||||||||||||||
Restatement | Note 9. Restatement | |||||||||||||||||||
In our 2014 Form 10-K, we restated our audited financial statements for fiscal year ended December 31, 2013 and our unaudited interim consolidated financial statements 2013 and 2014 to reflect certain corrections in the manner in which we recognize revenue related to our long term managed service contracts. | ||||||||||||||||||||
The restatement is a result of the failure to identify all delivery obligations associated with multi-element revenue arrangements and an improper interpretation of standalone value of delivered elements. The revenue recognition errors identified by the Company, do not affect the total revenues ultimately earned or to be earned, or the amount or timing of cash received or to be received from individual customer arrangements. | ||||||||||||||||||||
As a result of our restatement and in accordance with U.S. GAAP, revenues that had originally been recognized in 2013 are now being recognized ratably over an extended timeframe. The amount of revenues earned or to be earned over the entire period of recognition essentially remain unchanged from the amount we historically recognized, however the timing of when and the amount of revenues recognized for those periods discussed above were restated and certain amounts of revenues were restated. There was neither change to the cash characteristics of the transactions being restated nor the Company's liquidity directly relating to these transactions. As a result of the restatement, the balance sheet reflects a significant increase in deferred revenue, which will be recognized in revenue over a number of years. | ||||||||||||||||||||
See our 2014 Form 10-K for additional information regarding the restatement of our unaudited consolidated financial statements for the quarter ended March 31, 2014 and for information regarding the restatement in the 2012 Form 10-K of our audited consolidated financial statements for the years ended December 31, 2013 and of our unaudited consolidated financial statements for each of the quarters in the year ended December 31, 2013 and 2014. | ||||||||||||||||||||
This Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 (this “Form 10-Q”) reflects the impact of the restatement on the applicable unaudited quarterly financial information for the three months ended March 31, 2014. | ||||||||||||||||||||
The combined impact of the adjustments to specified line items included in this Form 10-Q have been restated to reflect the corrections of the above errors, which impact revenues from products, revenues from services and deferred revenues (current and non-current). The following schedules reconcile the amounts as originally reported in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 to the corresponding restated amounts as reported herein and in our 2014 Form 10-K. | ||||||||||||||||||||
March 31, | March 31, | |||||||||||||||||||
2014 | 2014 | |||||||||||||||||||
(UNAUDITED) | restatement | Restated | ||||||||||||||||||
Unaudited | Unaudited | |||||||||||||||||||
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 | |||||||||||||
31-Mar-14 | Restatement | Re-classifications | Restated | |||||||||||||||||
adjustments | ||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||
REVENUES | $ | 6,479,853 | $ | (1,095,588 | ) | $ | - | $ | 5,384,265 | |||||||||||
COST AND OPERATING EXPENSES | ||||||||||||||||||||
Cost of service (excluding depreciation and amortization) | 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 | - | (2,928,160 | ) | 3,047,947 | |||||||||||||||
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 | ||||||||||||||||
The correction of the errors described above did not impact our total cash flows from operating activities, investing activities or financing activities within our consolidated statements of cash flows. | ||||||||||||||||||||
For the three months | ||||||||||||||||||||
ended March 31, 2014 | Restatement | Restated | ||||||||||||||||||
Unaudited* | Unaudited* | |||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||||||
Net loss | $ | (4,126,117 | ) | $ | (1,095,588 | ) | $ | (5,221,705 | ) | |||||||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||||||||||
Depreciation and amortization | 2,008,214 | - | 2,008,214 | |||||||||||||||||
Provision for doubtful accounts | 611 | - | 611 | |||||||||||||||||
Stock based compensation | 771,724 | - | 771,724 | |||||||||||||||||
Change in the fair value of the warrant liability | 210,272 | - | 210,272 | |||||||||||||||||
Amortization of deferred financing costs | 136,367 | - | 136,367 | |||||||||||||||||
Interest expense relating to debt discount and conversion feature | 884,740 | - | 884,740 | |||||||||||||||||
Unrealized foreign currency translation gain/(loss) | (3,390 | ) | - | (3,390 | ) | |||||||||||||||
(Profit)/Loss on Extinguishment of Debt* | - | 426 | ||||||||||||||||||
Changes in operating assets and liabilities, net of acquired assets and assumed liabilities: | ||||||||||||||||||||
Decrease (increase) in accounts receivable* | (293,435 | ) | 345,973 | 52,538 | ||||||||||||||||
Decrease (increase) in prepaid expenses, deposits and other assets | 165,627 | - | 165,627 | |||||||||||||||||
Increase (decrease) in accounts payable, proceeds from related parties and customer deposits | 319,553 | - | 319,553 | |||||||||||||||||
Increase (decrease) in deferred revenue* | 59,946 | 749,615 | 809,561 | |||||||||||||||||
Increase (decrease) in accrued expenses and other payables* | 643,707 | - | 643,281 | |||||||||||||||||
Net cash provided by (used in) operating activities | 777,819 | - | 777,819 | |||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||
Purchases of Property and Equipment | (1,802,951 | ) | - | (1,802,951 | ) | |||||||||||||||
Net cash used in investing activities | (1,802,951 | ) | - | (1,802,951 | ) | |||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||
Financing related fees | (90,000 | ) | - | (90,000 | ) | |||||||||||||||
Exercise of warrants and Options | 4,093,480 | - | 4,093,480 | |||||||||||||||||
Net cash provided by financing activities | 4,003,480 | - | 4,003,480 | |||||||||||||||||
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | (312,617 | ) | - | (312,617 | ) | |||||||||||||||
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS | 2,665,731 | - | 2,665,731 | |||||||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD | 1,252,315 | - | 1,252,315 | |||||||||||||||||
CASH AND CASH EQUIVALENTS, END OF THE PERIOD | $ | 3,918,046 | $ | - | $ | 3,918,046 | ||||||||||||||
*the Company reclassified the line items Accounts Receivable and Deferred Revenue compared to what was reported in the annual report 2014 on Form 10-K for the above quarter. Accounts Receivable decrease (increase) changed from ($2,440,518) to $52,538, and Deferred Revenue increase (decrease) changed from $3,302,617 to $809,561. In addition minor changes were made to Loss on Extinguishment of Debt ($426 added) and Increase in accrued expenses of 426. There was no impact of these reclassifications on Net Cash provided by (used in) operating activities, Net Loss or Equity. |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 10. Subsequent Events |
The Company's management evaluated subsequent events through the date the financial statements were available to be issued, and concluded that there are no reportable events. | |
Supplemental_Financial_Informa1
Supplemental Financial Information (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Supplemental Financial Information [Abstract] | |||||||||||||
Schedule of Prepaid Expenses And Other Current Assets | March 31, | December 31, | |||||||||||
2015 | 2014 | ||||||||||||
Recurring prepaid expenses | $ | 691,287 | $ | 455,529 | |||||||||
Non recurring prepaid expenses | 202,755 | 731,725 | |||||||||||
Taxes | 321,700 | 359,087 | |||||||||||
VAT | 665,731 | 742,773 | |||||||||||
Inventory SIM cards | 7,026 | 189,567 | |||||||||||
$ | 1,888,499 | $ | 2,478,681 | ||||||||||
Schedule of Other Assets | Other Assets | March 31, | December 31, | ||||||||||
2015 | 2014 | ||||||||||||
Long term deposits | $ | 415,571 | $ | 653,002 | |||||||||
Deferred Financing Costs | 660,609 | 682,878 | |||||||||||
Due from third parties | 249,910 | 264,455 | |||||||||||
$ | 1,326,090 | $ | 1,600,335 | ||||||||||
Schedule of Property and Equipment | Property and equipment | March 31, | December 31, | ||||||||||
2015 | 2014 | ||||||||||||
Furniture & fixtures | $ | 287,543 | $ | 281,214 | |||||||||
Computer, communications and network equipment | 23,590,770 | 23,904,494 | |||||||||||
Software | 4,694,417 | 4,556,364 | |||||||||||
Automobiles | 72,183 | 80,860 | |||||||||||
Construction in progress | 2,438,237 | 4,044,932 | |||||||||||
Acc. Depreciation Property & Equipment | (13,286,396 | ) | (13,548,662 | ) | |||||||||
$ | 17,796,754 | $ | 19,319,202 | ||||||||||
Schedule of Intangible Assets | Intangible assets | March 31, | December 31, | ||||||||||
2015 | 2014 | ||||||||||||
Validsoft IP & Technology | $ | 11,342,770 | $ | 14,344,604 | |||||||||
Customer Contracts, Licenses , Interconnect & Technology | 3,282,608 | 1,870,523 | |||||||||||
Accumulated amortization Validsoft IP & Technology | (8,111,372 | ) | (9,973,063 | ) | |||||||||
Accumulated amortization Customer Contracts, Licenses, Interconnect & Technology | (2,402,311 | ) | (1,165,856 | ) | |||||||||
$ | 4,111,695 | $ | 5,076,208 | ||||||||||
Schedule of Goodwill | Goodwill | March 31, | December 31, | ||||||||||
2015 | 2014 | ||||||||||||
Goodwill ValidSoft Ltd | $ | 2,646,301 | $ | 2,964,423 | |||||||||
Goodwill Morodo Ltd. | 176,252 | 197,440 | |||||||||||
Goodwill Telnicity | 190,401 | 190,401 | |||||||||||
$ | 3,012,954 | $ | 3,352,264 | ||||||||||
Accrued Expenses | Accrued expenses and other payables | March 31, | December 31, | ||||||||||
2015 | 2014 | ||||||||||||
Accrued Selling, General & Administrative expenses | $ | 2,058,157 | $ | 1,863,020 | |||||||||
Accrued cost of service | 364,929 | 291,553 | |||||||||||
Accrued taxes (including VAT) | 428,988 | 570,616 | |||||||||||
Accrued interest payable | 106,222 | 1,184,418 | |||||||||||
Other accrued expenses | 96,517 | 152,045 | |||||||||||
$ | 3,054,813 | $ | 4,061,652 | ||||||||||
Schedule of 2014 10% + libor 3rd Party Term Loan Agreement | 2014 10% + libor 3rd Party Term Loan Agreement | March 31, | December 31, | ||||||||||
2015 | 2014 | ||||||||||||
2014 10% Term Loan (principal amount) | $ | 12,000,000 | $ | 12,000,000 | |||||||||
Debt Discount - Original Issue Discount | (335,223 | ) | (365,231 | ) | |||||||||
Debt Discount - Warrants | (398,130 | ) | (433,663 | ) | |||||||||
$ | 11,266,647 | $ | 11,201,106 |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Fair Value Measurements [Abstract] | |||||||||||||||||
Schedule of Financial Assets And Liabilities Measured at Fair Value on a Recurring Basis | 31-Mar-15 | ||||||||||||||||
(Unaudited) | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Derivative Liabilities | |||||||||||||||||
Warrant Liabilities | $ | - | $ | - | $ | 1,841,290 | $ | 1,841,290 | |||||||||
Total Derivatives Liabilities | $ | - | $ | - | $ | 1,841,290 | $ | 1,841,290 | |||||||||
31-Dec-14 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Derivative Liabilities | |||||||||||||||||
Warrant Liabilities | $ | - | $ | - | $ | 2,087,992 | $ | 2,087,992 | |||||||||
Total Derivatives Liabilities | $ | - | $ | - | $ | 2,087,992 | $ | 2,087,992 |
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Stockholders' Equity [Abstract] | |||||||||||||
Summary of Warrants | Outstanding | Exercise/ | Expiring | 2015 | 2014 | ||||||||
Warrants | Conversion | ||||||||||||
price(s) | |||||||||||||
(range) | |||||||||||||
Warrants – Fundraising | $0.853- $2.00 | 2013 – 2018 | 29,610,206 | 29,610,206 | |||||||||
Warrants – Other | $2.21 | 2016 | 18,659 | 18,659 | |||||||||
29,628,865 | 29,628,865 |
2006_NonQualified_Stock_and_Op1
2006 Non-Qualified Stock and Option Compensation Plan and Amended and Restated 2008 Long Term Incentive Compensation Plan (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
2006 Non-Qualified Stock and Option Compensation Plan and Amended and Restated 2008 Long Term Incentive Compensation Plan [Abstract] | ||||||||||||
Amended and Restated 2008 Long-Term Incentive Compensation Plan | Total Authorized under the plan | 56,000,000 | ||||||||||
Shares issued in prior years | 1,951,031 | |||||||||||
Shares issued in 2015 | 186,959 | |||||||||||
Options exercised | 2,382,110 | |||||||||||
Outstanding options | 42,037,535 | |||||||||||
Available for grant at 31 March 2015: | 9,442,365 | |||||||||||
Stock option activity | Options: | Number of Options | Weighted Average Exercise Price | |||||||||
Outstanding as of December 31, 2014 | 40,056,080 | $ | 1.32 | |||||||||
Granted in 2015 | 6,685,230 | $ | 0.81 | |||||||||
Exercised (with delivery of shares) | (8,668 | ) | $ | 0.68 | ||||||||
Forfeitures (Pre-vesting) | (3,875,185 | ) | $ | 1.24 | ||||||||
Expirations (Post-vesting) | (819,922 | ) | $ | 2.2 | ||||||||
Exchanged for Cashless exercise | - | $ | - | |||||||||
Outstanding as of March 31, 2015 | 42,037,535 | $ | 1.31 |
Income_taxes_Tables
Income taxes (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Income taxes [Abstract] | |||||||||||||
Schedule of net (benefit) provision for income taxes | March 31, | ||||||||||||
2015 | 2014 | ||||||||||||
Net (Benefit) Provision for income taxes | $ | (68,492 | ) | $ | 135,437 |
Significant_Customer_and_Geogr1
Significant Customer and Geographical Information (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Significant Customer and Geographical Information [Abstract] | ||||||||||||
Schedule of Significant Customer and Geographical Information | Three Months Ended | |||||||||||
31-Mar | ||||||||||||
2015 | 2014 | |||||||||||
Two largest customers | 67.4 | % | 77.5 | % | ||||||||
Three Months Ended | ||||||||||||
31-Mar | ||||||||||||
2015 | 2014 | |||||||||||
Europe | 64.9 | % | 65.6 | % | ||||||||
All other (non-European) countries | 35.1 | 34.4 | ||||||||||
100 | % | 100 | % |
Restatement_Tables
Restatement (Tables) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Restatement [Abstract] | ||||||||||||||||||||
Schedule of restatement of previously issued financial statements and financial information | March 31, | March 31, | ||||||||||||||||||
2014 | 2014 | |||||||||||||||||||
(UNAUDITED) | restatement | Restated | ||||||||||||||||||
Unaudited | Unaudited | |||||||||||||||||||
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 | |||||||||||||
For the three months | ||||||||||||||||||||
ended March 31, 2014 | Restatement | Restated | ||||||||||||||||||
Unaudited* | Unaudited* | |||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||||||
Net loss | $ | (4,126,117 | ) | $ | (1,095,588 | ) | $ | (5,221,705 | ) | |||||||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||||||||||
Depreciation and amortization | 2,008,214 | - | 2,008,214 | |||||||||||||||||
Provision for doubtful accounts | 611 | - | 611 | |||||||||||||||||
Stock based compensation | 771,724 | - | 771,724 | |||||||||||||||||
Change in the fair value of the warrant liability | 210,272 | - | 210,272 | |||||||||||||||||
Amortization of deferred financing costs | 136,367 | - | 136,367 | |||||||||||||||||
Interest expense relating to debt discount and conversion feature | 884,740 | - | 884,740 | |||||||||||||||||
Unrealized foreign currency translation gain/(loss) | (3,390 | ) | - | (3,390 | ) | |||||||||||||||
(Profit)/Loss on Extinguishment of Debt* | - | 426 | ||||||||||||||||||
Changes in operating assets and liabilities, net of acquired assets and assumed liabilities: | ||||||||||||||||||||
Decrease (increase) in accounts receivable* | (293,435 | ) | 345,973 | 52,538 | ||||||||||||||||
Decrease (increase) in prepaid expenses, deposits and other assets | 165,627 | - | 165,627 | |||||||||||||||||
Increase (decrease) in accounts payable, proceeds from related parties and customer deposits | 319,553 | - | 319,553 | |||||||||||||||||
Increase (decrease) in deferred revenue* | 59,946 | 749,615 | 809,561 | |||||||||||||||||
Increase (decrease) in accrued expenses and other payables* | 643,707 | - | 643,281 | |||||||||||||||||
Net cash provided by (used in) operating activities | 777,819 | - | 777,819 | |||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||
Purchases of Property and Equipment | (1,802,951 | ) | - | (1,802,951 | ) | |||||||||||||||
Net cash used in investing activities | (1,802,951 | ) | - | (1,802,951 | ) | |||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||
Financing related fees | (90,000 | ) | - | (90,000 | ) | |||||||||||||||
Exercise of warrants and Options | 4,093,480 | - | 4,093,480 | |||||||||||||||||
Net cash provided by financing activities | 4,003,480 | - | 4,003,480 | |||||||||||||||||
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | (312,617 | ) | - | (312,617 | ) | |||||||||||||||
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS | 2,665,731 | - | 2,665,731 | |||||||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD | 1,252,315 | - | 1,252,315 | |||||||||||||||||
CASH AND CASH EQUIVALENTS, END OF THE PERIOD | $ | 3,918,046 | $ | - | $ | 3,918,046 |
Financial_Condition_Details
Financial Condition (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Financial Condition [Abstract] | ||||||
Net losses | ($2,125,173) | ($5,221,705) | ||||
Accumulated deficit | -252,754,469 | -250,629,296 | -233,989,084 | -252,754,469 | -250,629,296 | |
Cash and cash equivalents | 994,693 | 1,904,160 | 3,918,046 | 994,693 | 1,904,160 | 1,252,315 |
Change in accounts receivable | 5,983,834 | 3,131,407 | -52,538 | 9,115,241 | ||
Non-GAAP revenue, impact per month | $1,300,000 | |||||
Accounts Receivable [Member] | Credit Concentration Risk [Member] | Customer One [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Percentage of accounts receivable | 64.00% | 72.00% |
Supplemental_Financial_Informa2
Supplemental Financial Information (Prepaid Expenses And Other Current Assets) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 |
Supplemental Financial Information [Abstract] | |||
Recurring prepaid expenses | $691,287 | $455,529 | |
Non recurring prepaid expenses | 202,755 | 731,725 | |
Taxes | 321,700 | 359,087 | |
VAT | 665,731 | 742,773 | |
Inventory SIM cards | 7,026 | 189,567 | |
Prepaid expenses and other current assets | $1,888,499 | $2,478,681 | $2,147,686 |
Supplemental_Financial_Informa3
Supplemental Financial Information (Other Assets) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 |
Supplemental Financial Information [Abstract] | |||
Long term deposits | $415,571 | $653,002 | |
Deferred Financing Costs | 660,609 | 682,878 | |
Due from third parties | 249,910 | 264,455 | |
Other Assets | $1,326,090 | $1,600,335 | $1,357,728 |
Supplemental_Financial_Informa4
Supplemental Financial Information (Property And Equipment) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 |
Property, Plant and Equipment [Line Items] | |||
Acc. Depreciation Property & Equipment | ($13,286,396) | ($13,548,662) | |
Property and equipment | 17,796,754 | 19,319,202 | 19,954,703 |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 287,543 | 281,214 | |
Computer, communications and network equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 23,590,770 | 23,904,494 | |
Software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 4,694,417 | 4,556,364 | |
Automobiles [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 72,183 | 80,860 | |
Construction in Progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $2,438,237 | $4,044,932 |
Supplemental_Financial_Informa5
Supplemental Financial Information (Intangible Assets) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 |
Finite-Lived Intangible Assets [Line Items] | |||
Total intangible assets, net | $4,111,695 | $5,076,208 | $7,903,149 |
ValidSoft IP & Technology [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, Gross | 11,342,770 | 14,344,604 | |
Accumulated amortization | -8,111,372 | -9,973,063 | |
Customer Contracts, Licenses, Interconnect & Technology [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, Gross | 3,282,608 | 1,870,523 | |
Accumulated amortization | ($2,402,311) | ($1,165,856) |
Supplemental_Financial_Informa6
Supplemental Financial Information (Goodwill) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 |
Goodwill [Line Items] | |||
Goodwill | $3,012,954 | $3,352,264 | $3,769,199 |
ValidSoft Ltd [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 2,646,301 | 2,964,423 | |
Morodo Ltd. [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 176,252 | 197,440 | |
Telnicity LLC [Member] | |||
Goodwill [Line Items] | |||
Goodwill | $190,401 | $190,401 |
Supplemental_Financial_Informa7
Supplemental Financial Information (Accrued Expenses And Other Payables) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 |
Supplemental Financial Information [Abstract] | |||
Accrued Selling, General & Administrative expenses | $2,058,157 | $1,863,020 | |
Accrued cost of service | 364,929 | 291,553 | |
Accrued taxes (including VAT) | 428,988 | 570,616 | |
Accrued interest payable | 106,222 | 1,184,418 | |
Other accrued expenses | 96,517 | 152,045 | |
Total accrued expenses and other payables | $3,054,813 | $4,061,652 | $5,936,989 |
Supplemental_Financial_Informa8
Supplemental Financial Information (2014 10% + libor 3rd Party Term Loan Agreement) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
2014 10% + libor 3rd Party Term Loan Agreement | $11,266,647 | $11,201,106 |
2014 10% Term Loan Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | 12,000,000 | 12,000,000 |
Debt Discount - Original Issue Discount | -335,223 | -365,231 |
Debt Discount - Warrants | -398,130 | -433,663 |
2014 10% + libor 3rd Party Term Loan Agreement | $11,266,647 | $11,201,106 |
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 $) | Mar. 31, 2015 | Dec. 31, 2014 |
Derivative Liabilities | ||
Derivative liabilities | $1,841,290 | $2,087,992 |
Warrants [Member] | ||
Derivative Liabilities | ||
Derivative liabilities | 1,841,290 | 2,087,992 |
Fair Value, Inputs, Level 1 [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] | Warrants [Member] | ||
Derivative Liabilities | ||
Derivative liabilities | ||
Fair Value, Inputs, Level 3 [Member] | ||
Derivative Liabilities | ||
Derivative liabilities | 1,841,290 | 2,087,992 |
Fair Value, Inputs, Level 3 [Member] | Warrants [Member] | ||
Derivative Liabilities | ||
Derivative liabilities | $1,841,290 | $2,087,992 |
Stockholders_Equity_Narrative_
Stockholders' Equity (Narrative) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | |
Common Stock: | |||
Common stock, shares authorized | 250,000,000 | 250,000,000 | 250,000,000 |
Common stock, shares issued | 154,866,885 | 154,671,258 | 146,364,577 |
Common stock, shares outstanding | 154,866,885 | 154,671,258 | 146,364,577 |
Common stock, increase in shares issued during the period | 195,627 | ||
Shares issued in connection with warrant exercises | 8,668 | ||
Shares issued to the Company's executive officers and non-executive directors | 186,959 | ||
Number of shares issued according to Stock Transfer Agent | 155,112,785 | 154,917,158 | |
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 | 50,000,000 |
Preferred stock, par or stated value per share | $0.00 | $0.00 | $0.00 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Stockholders_Equity_Summary_of
Stockholders' Equity (Summary of Warrants) (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | |
Class of Warrant or Right [Line Items] | |||
Warrants outstanding | 29,628,865 | 29,628,865 | |
Warrant liabilities | $1,841,290 | $2,087,992 | $2,183,806 |
Weighted Average [Member] | |||
Class of Warrant or Right [Line Items] | |||
Exercise price (in dollars per share) | $1.20 | ||
Warrants - Fundraising [Member] | |||
Class of Warrant or Right [Line Items] | |||
Warrants outstanding | 29,610,206 | 29,610,206 | |
Warrants - Fundraising [Member] | Minimum [Member] | |||
Class of Warrant or Right [Line Items] | |||
Exercise price (in dollars per share) | $0.85 | ||
Expiring | 31-Dec-13 | ||
Warrants - Fundraising [Member] | Maximum [Member] | |||
Class of Warrant or Right [Line Items] | |||
Exercise price (in dollars per share) | $2 | ||
Expiring | 31-Dec-18 | ||
Warrants - Other [Member] | |||
Class of Warrant or Right [Line Items] | |||
Exercise price (in dollars per share) | $2.21 | ||
Expiring | 31-Dec-16 | ||
Warrants outstanding | 18,659 | 18,659 |
2006_NonQualified_Stock_and_Op2
2006 Non-Qualified Stock and Option Compensation Plan and Amended and Restated 2008 Long Term Incentive Compensation Plan (Amended and Restated 2008 Long-Term Incentive Compensation Plan) (Details) (Employee Stock Option [Member]) | 3 Months Ended |
Mar. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total Authorized under the plan | 56,000,000 |
Shares issued in prior years | 1,951,031 |
Shares issued in 2015 | 186,959 |
Options exercised | 2,382,110 |
Outstanding options | 42,037,535 |
Available for grant at 31 March 2015: | 9,442,365 |
Directors And Officers [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares issued in 2015 | 186,959 |
2006_NonQualified_Stock_and_Op3
2006 Non-Qualified Stock and Option Compensation Plan and Amended and Restated 2008 Long Term Incentive Compensation Plan (Stock Option Activity) (Details) (2008 Long-Term Incentive Plan [Member], USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
2008 Long-Term Incentive Plan [Member] | ||
Number of Options | ||
Beginning Balance | 40,056,080 | |
Granted | 6,685,230 | |
Exercised (with delivery of shares) | -8,668 | |
Forfeitures (Pre-vesting) | -3,875,185 | |
Expirations (Post-vesting) | -819,922 | |
Exchanged for Cashless exercise | ||
Ending Balance | 42,037,535 | |
Weighted Average Exercise Price | ||
Beginning Balance | $1.32 | |
Granted | $0.81 | |
Exercised (with delivery of shares) | $0.68 | |
Forfeitures (Pre-vesting) | $1.24 | |
Expirations (Post-vesting) | $2.20 | |
Exchanged for cashless exercise | ||
Ending Balance | $1.31 | |
Unrecognized share-based compensation expense | $7,419,546 | $11,952,452 |
Income_taxes_Details
Income taxes (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Income taxes [Abstract] | ||
Net (Benefit) Provision for income taxes | ($68,492) | $135,437 |
Significant_Customer_and_Geogr2
Significant Customer and Geographical Information (Sales to Significant Customers) (Details) (Revenue Concentration [Member], Customer Concentration Risk [Member], Two largest customers [Member]) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Revenue Concentration [Member] | Customer Concentration Risk [Member] | Two largest customers [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of revenues | 67.40% | 77.50% |
Significant_Customer_and_Geogr3
Significant Customer and Geographical Information (Geographical Distribution of Revenue) (Details) (Revenue Concentration [Member], Geographic Concentration Risk [Member]) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Concentration Risk [Line Items] | ||
Percentage of revenues | 100.00% | 100.00% |
Europe [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of revenues | 64.90% | 65.60% |
All Other (Non-European) Countries [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of revenues | 35.10% | 34.40% |
Restatement_CONSOLIDATED_BALAN
Restatement (CONSOLIDATED BALANCE SHEET) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 |
CURRENT ASSETS | ||||
Cash and cash equivalents | $994,693 | $1,904,160 | $3,918,046 | $1,252,315 |
Financing receivables | 2,000,000 | |||
Restricted cash | 416,304 | 312,935 | 192,161 | |
Accounts receivable, net of allowance for doubtful accounts | 13,562,151 | 8,877,213 | 5,033,667 | |
Prepaid expenses and other current assets | 1,888,499 | 2,478,681 | 2,147,686 | |
Total current assets | 16,861,647 | 15,572,989 | 11,291,560 | |
NON-CURRENT ASSETS | ||||
OTHER ASSETS | 1,326,090 | 1,600,335 | 1,357,728 | |
PROPERTY AND EQUIPMENT, NET | 17,796,754 | 19,319,202 | 19,954,703 | |
INTANGIBLE ASSETS, NET | 4,111,695 | 5,076,208 | 7,903,149 | |
GOODWILL | 3,012,954 | 3,352,264 | 3,769,199 | |
TOTAL ASSETS | 43,109,140 | 44,920,998 | 44,276,339 | |
CURRENT LIABILITIES | ||||
Overdraft | 433,366 | 402,234 | ||
Accounts payable and customer deposits | 2,331,938 | 1,856,014 | 2,419,325 | |
Obligations under capital leases (current portion) | 1,757,809 | 1,831,050 | 1,348,705 | |
Deferred revenue | 12,891,050 | 8,813,385 | 671,879 | |
Accrued expenses and other payables | 3,054,813 | 4,061,652 | 5,936,989 | |
Loans payable | 962,269 | 962,269 | ||
10% Related Party Loan (net of Debt Discount) | 1,812,506 | |||
Total current liabilities | 31,302,257 | 29,158,842 | 13,553,907 | |
LONG TERM LIABILITIES | ||||
10% 3rd Party Loan (net of Debt Discount) | 4,876,914 | |||
Warrant liabilities | 1,841,290 | 2,087,992 | 2,183,806 | |
Non-current portion of obligation under capital leases | 176,298 | 272,460 | 465,954 | |
Non-current portion of deferred revenue | 1,873,088 | 2,434,257 | 2,774,415 | |
Loan from joint venture partner | 614,169 | |||
Total long term liabilities | 4,193,209 | 5,149,589 | 10,915,258 | |
Total liabilities | 35,495,466 | 34,308,431 | 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 value | 265,198,811 | 264,359,674 | 253,383,860 | |
Accumulated other comprehensive income | -4,839,570 | -3,127,132 | 267,650 | |
Accumulated deficit | -252,754,469 | -250,629,296 | -233,989,084 | |
Elephant Talk Communications, Corp. stockholders' equity | 7,604,772 | 10,603,246 | 19,662,426 | |
NON-CONTROLLING INTEREST | 8,902 | 9,321 | 144,748 | |
Total stockholders' equity | 7,613,674 | 10,612,567 | 19,807,174 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 43,109,140 | 44,920,998 | 44,276,339 | |
As previously reported [Member] | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | 3,918,046 | 1,252,315 | ||
Restricted cash | 192,161 | |||
Accounts receivable, net of allowance for doubtful accounts | 6,262,041 | |||
Prepaid expenses and other current assets | 2,147,686 | |||
Total current assets | 12,519,934 | |||
NON-CURRENT ASSETS | ||||
OTHER ASSETS | 1,357,728 | |||
PROPERTY AND EQUIPMENT, NET | 19,954,703 | |||
INTANGIBLE ASSETS, NET | 7,903,149 | |||
GOODWILL | 3,769,199 | |||
TOTAL ASSETS | 45,504,713 | |||
CURRENT LIABILITIES | ||||
Overdraft | 402,234 | |||
Accounts payable and customer deposits | 2,419,325 | |||
Obligations under capital leases (current portion) | 1,348,705 | |||
Deferred revenue | 203,623 | |||
Accrued expenses and other payables | 5,936,989 | |||
Loans payable | 962,269 | |||
10% Related Party Loan (net of Debt Discount) | 1,812,506 | |||
Total current liabilities | 13,085,651 | |||
LONG TERM LIABILITIES | ||||
10% 3rd Party Loan (net of Debt Discount) | 4,876,914 | |||
Warrant liabilities | 2,183,806 | |||
Non-current portion of obligation under capital leases | 465,954 | |||
Non-current portion of deferred revenue | ||||
Loan from joint venture partner | 614,169 | |||
Total long term liabilities | 8,140,843 | |||
Total liabilities | 21,226,494 | |||
Commitments and Contingencies | ||||
STOCKHOLDERS' EQUITY | ||||
Preferred Stock $0.00001 par value, 50,000,000 shares authorized, 0 issued and outstanding | ||||
Common Stock value | 253,383,860 | |||
Accumulated other comprehensive income | 267,650 | |||
Accumulated deficit | -229,518,039 | |||
Elephant Talk Communications, Corp. stockholders' equity | 24,133,471 | |||
NON-CONTROLLING INTEREST | 144,748 | |||
Total stockholders' equity | 24,278,219 | |||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 45,504,713 | |||
Restatement change [Member] | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | ||||
Restricted cash | ||||
Accounts receivable, net of allowance for doubtful accounts | -1,228,374 | |||
Prepaid expenses and other current assets | ||||
Total current assets | -1,228,374 | |||
NON-CURRENT ASSETS | ||||
OTHER ASSETS | ||||
PROPERTY AND EQUIPMENT, NET | ||||
INTANGIBLE ASSETS, NET | ||||
GOODWILL | ||||
TOTAL ASSETS | -1,228,374 | |||
CURRENT LIABILITIES | ||||
Overdraft | ||||
Accounts payable and customer deposits | ||||
Obligations under capital leases (current portion) | ||||
Deferred revenue | 468,256 | |||
Accrued expenses and other payables | ||||
Loans payable | ||||
10% Related Party Loan (net of Debt Discount) | ||||
Total current liabilities | 468,256 | |||
LONG TERM LIABILITIES | ||||
10% 3rd Party Loan (net of Debt Discount) | ||||
Warrant liabilities | ||||
Non-current portion of obligation under capital leases | ||||
Non-current portion of deferred revenue | 2,774,415 | |||
Loan from joint venture partner | ||||
Total long term liabilities | 2,774,415 | |||
Total liabilities | 3,242,671 | |||
Commitments and Contingencies | ||||
STOCKHOLDERS' EQUITY | ||||
Preferred Stock $0.00001 par value, 50,000,000 shares authorized, 0 issued and outstanding | ||||
Common Stock value | ||||
Accumulated other comprehensive income | ||||
Accumulated deficit | -4,471,045 | |||
Elephant Talk Communications, Corp. stockholders' equity | -4,471,045 | |||
NON-CONTROLLING INTEREST | ||||
Total stockholders' equity | -4,471,045 | |||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | ($1,228,374) |
Restatement_CONSOLIDATED_BALAN1
Restatement (CONSOLIDATED BALANCE SHEET) (Parenthetical) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 |
Accounts receivable, allowance for doubtful accounts | $11,307 | ||
Preferred stock, par or stated value per share | $0.00 | $0.00 | $0.00 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Common stock, par value per share | $0.00 | $0.00 | $0.00 |
Common stock, shares authorized | 250,000,000 | 250,000,000 | 250,000,000 |
Common stock, shares issued | 154,866,885 | 154,671,258 | 146,364,577 |
Common stock, shares outstanding | 154,866,885 | 154,671,258 | 146,364,577 |
Convertible Note One [Member] | |||
Discount on debt | 937,814 | ||
Convertible Note Two [Member] | |||
Discount on debt | $623,726 |
Restatement_CONSOLIDATED_STATE
Restatement (CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS) (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS [Abstract] | ||
REVENUES | $5,013,016 | $5,384,265 |
COST AND OPERATING EXPENSES | ||
Cost of service (excluding depreciation and amortization) | 1,868,846 | 1,635,972 |
Product development | 1,036,121 | 1,711,817 |
Sales and marketing | 662,160 | 563,835 |
General and administrative | 2,961,096 | 3,047,947 |
Depreciation and amortization | 1,746,147 | 2,008,214 |
Total cost and operating expenses | 8,274,370 | 8,967,785 |
LOSS FROM OPERATIONS | -3,261,354 | -3,583,520 |
OTHER INCOME (EXPENSE) | ||
Interest income | 30,272 | 27,611 |
Interest expense | -367,340 | -301,944 |
Interest expense related to debt discount and conversion feature | -63,972 | -884,740 |
Changes in fair value of warrant liabilities | 246,702 | -210,272 |
Loss on extinguishment of debt | 2,475,799 | -426 |
Other income and (expense) | -1,191,270 | 3,390 |
Amortization of deferred financing costs | -62,502 | -136,367 |
Total other income (expense) | 1,067,689 | -1,502,748 |
LOSS BEFORE (BENEFIT) PROVISION FOR INCOME TAXES | -2,193,665 | -5,086,268 |
Provision for income taxes | 68,492 | -135,437 |
NET LOSS | -2,125,173 | -5,221,705 |
OTHER COMPREHENSIVE (LOSS) INCOME | ||
Foreign currency translation (loss) | -1,712,438 | -2,219 |
COMPREHENSIVE LOSS | -3,837,611 | -5,223,924 |
Net loss per common share and equivalents - basic and diluted | ($0.01) | ($0.04) |
Weighted average shares outstanding during the period - basic and diluted | 154,854,572 | 141,752,128 |
As previously reported [Member] | ||
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS [Abstract] | ||
REVENUES | 6,479,853 | |
COST AND OPERATING EXPENSES | ||
Cost of service (excluding depreciation and amortization) | 983,464 | |
Product development | ||
Sales and marketing | ||
General and administrative | 5,976,107 | |
Depreciation and amortization | 2,008,214 | |
Total cost and operating expenses | 8,967,785 | |
LOSS FROM OPERATIONS | -2,487,932 | |
OTHER INCOME (EXPENSE) | ||
Interest income | 27,611 | |
Interest expense | -301,944 | |
Interest expense related to debt discount and conversion feature | -884,740 | |
Changes in fair value of warrant liabilities | -210,272 | |
Loss on extinguishment of debt | -426 | |
Other income and (expense) | 3,390 | |
Amortization of deferred financing costs | -136,367 | |
Total other income (expense) | -1,502,748 | |
LOSS BEFORE (BENEFIT) PROVISION FOR INCOME TAXES | -3,990,680 | |
Provision for income taxes | -135,437 | |
NET LOSS | -4,126,117 | |
OTHER COMPREHENSIVE (LOSS) INCOME | ||
Foreign currency translation (loss) | -2,219 | |
COMPREHENSIVE LOSS | -4,128,336 | |
Net loss per common share and equivalents - basic and diluted | ($0.03) | |
Weighted average shares outstanding during the period - basic and diluted | 141,752,128 | |
Restatement adjustments/Re-classifications | ||
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS [Abstract] | ||
REVENUES | -1,095,588 | |
COST AND OPERATING EXPENSES | ||
Cost of service (excluding depreciation and amortization) | 652,508 | |
Product development | 1,711,817 | |
Sales and marketing | 563,835 | |
General and administrative | -2,928,160 | |
Depreciation and amortization | ||
Total cost and operating expenses | ||
LOSS FROM OPERATIONS | -1,095,588 | |
OTHER INCOME (EXPENSE) | ||
Interest income | ||
Interest expense | ||
Interest expense related to debt discount and conversion feature | ||
Changes in fair value of warrant liabilities | ||
Loss on extinguishment of debt | ||
Other income and (expense) | ||
Amortization of deferred financing costs | ||
Total other income (expense) | ||
LOSS BEFORE (BENEFIT) PROVISION FOR INCOME TAXES | -1,095,588 | |
Provision for income taxes | ||
NET LOSS | -1,095,588 | |
OTHER COMPREHENSIVE (LOSS) INCOME | ||
Foreign currency translation (loss) | ||
COMPREHENSIVE LOSS | ($1,095,588) | |
Net loss per common share and equivalents - basic and diluted | ||
Weighted average shares outstanding during the period - basic and diluted |
Restatement_CONSOLIDATED_STATE1
Restatement (CONSOLIDATED STATEMENTS OF CASH FLOWS) (Details) (USD $) | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | ($2,125,173) | ($5,221,705) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 1,746,147 | 2,008,214 | |
Provision for doubtful accounts | 8,184 | 611 | |
Stock-based compensation | 831,813 | 771,724 | |
Change in the fair value of the warrant liability | -246,702 | 210,272 | |
Amortization of deferred financing costs | 62,502 | 136,367 | |
Interest expense relating to debt discount and conversion feature | 63,972 | 884,740 | |
Unrealized foreign currency translation gain/(loss) | 1,191,270 | -3,390 | |
(Profit) / Loss on Extinguishment of Debt | -2,475,799 | 426 | |
Changes in operating assets and liabilities, net of acquired assets and assumed liabilities: | |||
Decrease (increase) in accounts receivable | -5,983,834 | 52,538 | -9,115,241 |
Decrease (increase) in prepaid expenses, deposits and other assets | 489,564 | 165,627 | |
Increase (decrease) in accounts payable, proceeds from related parties and customer deposits | 626,729 | 319,553 | |
Increase (decrease) in deferred revenue | 2,981,659 | 809,561 | |
Increase (decrease) in accrued expenses and other payables | 296,266 | 643,281 | |
Net cash (used in) provided by operating activities | -2,533,402 | 777,819 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of property and equipment | -1,511,179 | -1,802,951 | |
Net cash used in investing activities | -1,511,179 | -1,802,951 | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Financing related fees | -90,000 | ||
Exercise of warrants & options | 5,861 | 4,093,480 | |
Net cash provided by financing activities | 2,005,861 | 4,003,480 | |
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | 1,129,253 | -312,617 | |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | -909,467 | 2,665,731 | |
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD | 1,904,160 | 1,252,315 | |
CASH AND CASH EQUIVALENTS, END OF THE PERIOD | 994,693 | 3,918,046 | 994,693 |
As previously reported [Member] | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | -4,126,117 | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 2,008,214 | ||
Provision for doubtful accounts | 611 | ||
Stock-based compensation | 771,724 | ||
Change in the fair value of the warrant liability | 210,272 | ||
Amortization of deferred financing costs | 136,367 | ||
Interest expense relating to debt discount and conversion feature | 884,740 | ||
Unrealized foreign currency translation gain/(loss) | -3,390 | ||
(Profit) / Loss on Extinguishment of Debt | 426 | ||
Changes in operating assets and liabilities, net of acquired assets and assumed liabilities: | |||
Decrease (increase) in accounts receivable | -293,435 | ||
Decrease (increase) in prepaid expenses, deposits and other assets | 165,627 | ||
Increase (decrease) in accounts payable, proceeds from related parties and customer deposits | 319,553 | ||
Increase (decrease) in deferred revenue | 59,946 | ||
Increase (decrease) in accrued expenses and other payables | 643,707 | ||
Net cash (used in) provided by operating activities | 777,819 | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of property and equipment | -1,802,951 | ||
Net cash used in investing activities | -1,802,951 | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Financing related fees | -90,000 | ||
Exercise of warrants & options | 4,093,480 | ||
Net cash provided by financing activities | 4,003,480 | ||
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | -312,617 | ||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | 2,665,731 | ||
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD | 1,252,315 | ||
CASH AND CASH EQUIVALENTS, END OF THE PERIOD | 3,918,046 | ||
Restatement change [Member] | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | -1,095,588 | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | |||
Provision for doubtful accounts | |||
Stock-based compensation | |||
Change in the fair value of the warrant liability | |||
Amortization of deferred financing costs | |||
Interest expense relating to debt discount and conversion feature | |||
Unrealized foreign currency translation gain/(loss) | |||
(Profit) / Loss on Extinguishment of Debt | |||
Changes in operating assets and liabilities, net of acquired assets and assumed liabilities: | |||
Decrease (increase) in accounts receivable | 345,973 | ||
Decrease (increase) in prepaid expenses, deposits and other assets | |||
Increase (decrease) in accounts payable, proceeds from related parties and customer deposits | |||
Increase (decrease) in deferred revenue | 749,615 | ||
Increase (decrease) in accrued expenses and other payables | |||
Net cash (used in) provided by operating activities | |||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of property and equipment | |||
Net cash used in investing activities | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Financing related fees | |||
Exercise of warrants & options | |||
Net cash provided by financing activities | |||
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | |||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | |||
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD | |||
CASH AND CASH EQUIVALENTS, END OF THE PERIOD | |||
As Reported In Annual Report [Member] | |||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
(Profit) / Loss on Extinguishment of Debt | 426 | ||
Changes in operating assets and liabilities, net of acquired assets and assumed liabilities: | |||
Decrease (increase) in accounts receivable | 2,440,518 | ||
Increase (decrease) in deferred revenue | $3,302,617 |