PARETEUM (TEUM) 10-Q 10 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Jul. 31, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2015
Entity Registrant Name	ELEPHANT TALK COMMUNICATIONS CORP
Entity Central Index Key	1,084,384
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,015
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		160,488,671

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2015	Dec. 31, 2014
CURRENT ASSETS
Cash and cash equivalents	$ 1,232,525	$ 1,904,160
Financing receivable		2,000,000
Restricted cash	$ 304,676	312,935
Accounts receivable	3,720,881	8,877,213
Prepaid expenses and other current assets	1,549,827	2,478,681
Total current assets	6,807,909	15,572,989
NON-CURRENT ASSETS
OTHER ASSETS	1,105,224	1,600,335
PROPERTY AND EQUIPMENT, NET	17,528,492	19,319,202
INTANGIBLE ASSETS, NET	3,756,889	5,076,208
GOODWILL	3,076,526	3,352,264
TOTAL ASSETS	$ 32,275,040	44,920,998
CURRENT LIABILITIES
Overdraft		433,366
Accounts payable and customer deposits	$ 3,783,252	1,856,014
Obligations under capital leases (current portion)	706,385	1,831,050
Deferred Revenue	2,649,051	8,813,385
Accrued expenses and other payables	$ 3,022,436	4,061,652
Loans payable		962,269
2014 10% + libor 3rd Party Loan (net of Debt Discount of $332,304 at June 30, 2015 and $798,894 at December 31, 2014)		11,201,106
Total current liabilities	$ 10,161,124	$ 29,158,842
LONG TERM LIABILITIES
2014 10% + libor 3rd Party Loan (net of Debt Discount of $332,304 at June 30, 2015 and $798,894 at December 31, 2014)	1,740,365
Warrant liabilities		$ 2,087,992
Non-current portion of obligation under capital leases	95,532	272,460
Other long term loan	294,632	354,880
Non-current portion of deferred revenue	541,577	2,434,257
Total long term liabilities	2,672,106	5,149,589
Total liabilities	$ 12,833,230	$ 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, 159,194,181 issued and outstanding as of June 30, 2015 and 154,671,258 shares issued and outstanding as of December 31, 2014	$ 266,995,681	$ 264,359,674
Accumulated other comprehensive income (loss)	(4,330,752)	(3,127,132)
Accumulated deficit	(243,232,551)	(250,629,296)
Elephant Talk Communications, Corp. stockholders' equity	19,432,378	10,603,246
NON-CONTROLLING INTEREST	9,432	9,321
Total stockholders' equity	19,441,810	10,612,567
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 32,275,040	$ 44,920,998

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Preferred stock, par or stated value per share	$ 0.00001	$ 0.00001
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	$ 0.00001	$ 0.00001
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	159,194,181	154,671,258
Common stock, shares outstanding	159,194,181	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	$ 332,304	$ 798,894

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS [Abstract]
REVENUES	$ 19,244,383	$ 5,072,440	$ 24,257,399	$ 10,456,705
COST AND OPERATING EXPENSES
Cost of service (excluding depreciation and amortization)	1,440,914	1,848,687	3,309,760	3,484,659
Product development	1,490,683	2,280,532	2,526,804	3,992,349
Sales and marketing	336,960	664,807	999,120	1,228,642
General and administrative	2,664,281	3,467,338	5,625,377	6,515,286
Depreciation and amortization of intangibles assets	1,745,034	$ 1,928,392	3,491,181	$ 3,936,606
Impairment for assets held and used	937,835		937,835
Total cost and operating expenses	8,615,707	$ 10,189,756	16,890,077	$ 19,157,542
INCOME / (LOSS) FROM OPERATIONS	10,628,676	(5,117,316)	7,367,322	(8,700,837)
OTHER INCOME (EXPENSE)
Interest income	22,587	29,545	52,859	57,156
Interest expense	(555,826)	(333,214)	(923,166)	(635,158)
Interest expense related to debt discount and conversion feature	(403,679)	(1,025,292)	(467,651)	(1,910,032)
Changes in fair value of warrant liabilities	149,203	$ 38,948	395,905	(171,324)
Gain / (Loss) on Extinguishment of Debt			2,475,799	(426)
Other income & (expense), net	155,252	$ 68,008	(1,036,018)	71,398
Amortization of deferred financing costs	(362,845)	(113,090)	(425,347)	(249,457)
Total other income (expense)	(995,308)	(1,335,095)	72,381	(2,837,843)
INCOME / (LOSS) BEFORE (BENEFIT) PROVISION FOR INCOME TAXES	9,633,368	(6,452,411)	7,439,703	(11,538,680)
(Benefit) / provision for income taxes	111,450	(2,209)	42,958	133,228
NET INCOME / (LOSS)	9,521,918	(6,450,202)	7,396,745	(11,671,908)
OTHER COMPREHENSIVE INCOME / (LOSS) INCOME
Foreign currency translation gain (loss)	508,818	(148,233)	(1,203,620)	(150,452)
COMPREHENSIVE INCOME / (LOSS)	$ 10,030,736	$ (6,598,435)	$ 6,193,125	$ (11,822,360)
Net income / (loss) per common share and equivalents - basic	$ 0.06	$ (0.04)	$ 0.05	$ (0.08)
Net income / (loss) per common share and equivalents - diluted	$ 0.06	$ (0.04)	$ 0.05	$ (0.08)
Weighted average shares outstanding during the period - basic	156,384,740	146,482,547	155,623,883	144,130,543
Weighted average shares outstanding during the period - diluted	157,936,092	146,482,547	157,175,235	144,130,543

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income / (loss)	$ 7,396,745	$ (11,671,908)
Adjustments to reconcile net income / (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	3,491,181	3,936,606
Provision for doubtful accounts	25,414	18,865
Stock based compensation	1,584,323	2,674,261
Change in fair value of warrant liability	(395,905)	171,324
Amortization of deferred financing costs	425,347	249,457
Interest expense relating to debt discount and conversion feature	467,651	1,910,032
Unrealized foreign currency translation gain (loss)	1,036,018	(71,398)
(Gain) / Loss on Extinguishment of Debt	(2,475,799)	$ 426
Impairment for assets held and used	937,835
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable	4,305,466	$ (1,914,324)
Decrease (increase) in prepaid expenses, deposits and other assets	1,100,067	(346,129)
Increase (decrease) in accounts payable and customer deposits	2,027,904	210,932
Increase (decrease) in deferred revenue	(8,889,549)	2,537,091
Increase (decrease) in accrued expenses and other payables	(740,868)	1,909,830
Net cash provided by (used in) operating activities	10,295,830	(384,935)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(4,113,308)	(3,922,724)
Net cash used in investing activities	(4,113,308)	(3,922,724)
CASH FLOWS FROM FINANCING ACTIVITIES:
Financing related fees	(67,445)	(90,000)
Exercise of warrants & options	5,861	$ 4,283,033
Financing receivable	2,000,000
Principal payment on 2014 10% + libor 3rd Party Loan	(9,927,333)
Net cash (used in) provided by financing activities	(7,988,917)	$ 4,193,033
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS	1,134,760	(308,301)
NET (DECREASE) IN CASH AND CASH EQUIVALENTS	(671,635)	(422,927)
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD	1,904,160	1,252,315
CASH AND CASH EQUIVALENTS, END OF THE PERIOD	1,232,525	829,388
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest	866,432	123,644
Cash paid during the period for income taxes	$ 14,481	$ 56,881

Financial Condition

Financial Condition	6 Months Ended
	Jun. 30, 2015
Financial Condition [Abstract]
Financial Condition	Note 1. Financial Condition As reflected in the accompanying condensed consolidated financial statements the Company reported net income of $ 9,521,918 7,396,745 243,232,551 The company's financial statements were substantially impacted by two events, namely the settlement and termination agreement with Grupo Iusacell S.A. on June 12, 2015 and the resolution of the Atalaya/Corbin Capital credit agreement which had been in default since March 2015 which resulted in the amendment dated July 9, 2015 to the November 17 2014 credit agreement. The termination of the relationship with Iusacell resulted in a settlement agreement on June 12, 2015 of $ 13.5 0.9 12.6 In parallel the Company completed an amendment of the Atalaya/Corbin credit agreement and used $ 10.1 12.6 2.5 2 4.5 4.2 6.5 The termination of the Iusacell contract is expected to result in the loss of approximately $ 1.3 The Company recently completed its expense reduction plan in response to the termination of the Iusacell contract and estimates this can reduce reduce the Company's product development, selling, general and administrative cash expenses this year by approximately 5 In addition, the Company is focused on increasing sales efforts and streamlining global business operations, including a cautious policy on capital expenditures. With a cash balance at June 30, 2015 of $ 1.2 4.2 As of June 30, 2015, these conditions raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Description of Business, Basis

Description of Business, Basis of Presentation and Use of Estimates	6 Months Ended
	Jun. 30, 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 S oftware Defined Network Architecture (ET Software DNA® 2.0) 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 amended Annual Report on Form 10-K/A filed with the SEC on April 3, 2015 and April 30, 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 and six months period ended June 30, 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 and six months period ended June 30, 2015. Use of Estimates The preparation of the accompanying financial statements conforms to 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 revenue recognition, bad debt allowance, valuation of financial instruments, useful lives of long-lived assets and share-based compensation. Actual results may differ from these estimates under different assumptions or conditions. Basic and diluted earnings per share Net earnings per share is calculated in accordance with ASC 260, Earnings per Share (“ASC 260”). Basic net earnings per share is based upon the weighted average number of common shares outstanding. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase Common Stock at the average market price during the period. Weighted average number of shares used to compute basic and diluted in periods with a loss situation per share are the same as basic since the effect of the dilutive securities is anti-dilutive.

Supplemental Financial Informat

Supplemental Financial Information	6 Months Ended
	Jun. 30, 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 June 30, December 31, 2015 2014 (unaudited) Recurring prepaid expenses $ 290,159 $ 455,529 Non recurring prepaid expenses 293,233 731,725 Taxes 328,708 359,087 VAT 630,621 742,773 Inventory SIM cards 7,106 189,567 $ 1,549,827 $ 2,478,681 Other Assets June 30, December 31, 2015 2014 (unaudited) Long term deposits $ 487,442 $ 653,002 Deferred Financing Costs 347,586 682,878 Due from third parties 270,196 264,455 $ 1,105,224 $ 1,600,335 Property and equipment June 30, December 31, 2015 2014 (unaudited) Furniture & fixtures $ 301,441 $ 281,214 Computer, communications and network equipment 24,142,700 23,904,494 Software 5,941,981 4,556,364 Automobiles 73,809 80,860 Construction in progress 1,886,575 4,044,932 Acc. Depreciation Property & Equipment (14,818,014 ) (13,548,662 ) $ 17,528,492 $ 19,319,202 Intangible assets June 30, December 31, 2015 2014 Validsoft IP & Technology $ 13,181,868 $ 14,344,604 Customer Contracts, Licenses , Interconnect & Technology 1,807,074 1,870,523 Accumulated amortization Validsoft IP & Technology (9,966,097 ) (9,973,063 ) Accumulated amortization Customer Contracts, Licenses, Interconnect & Technology (1,265,956 ) (1,165,856 ) $ 3,756,889 $ 5,076,208 Goodwill June 30, December 31, 2015 2014 Goodwill ValidSoft Ltd $ 2,705,903 $ 2,964,423 Goodwill Morodo Ltd. 180,222 197,440 Goodwill Telnicity 190,401 190,401 $ 3,076,526 $ 3,352,264 Accrued expenses and other payables June 30, December 31, 2015 2014 Accrued Selling, General & Administrative expenses $ 2,049,441 $ 1,863,020 Accrued cost of service 265,965 291,553 Accrued taxes (including VAT) 563,721 570,616 Accrued interest payable 43,052 1,184,418 Other accrued expenses 100,257 152,045 $ 3,022,436 $ 4,061,652 2014 10% + libor 3rd Party Term Loan Agreement June 30, December 31, 2015 2014 2014 10% Term Loan (principal amount) $ 2,072,669 $ 12,000,000 Debt Discount - Original Issue Discount (165,286 ) (365,231 ) Debt Discount - Warrants (167,018 ) (433,663 ) $ 1,740,365 $ 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 dated 17, November 2014 had occurred and that for so long as an event of default be continuing, interest should 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 would continue to monitor the default situation and reserve all their respective rights and remedies under the Credit Agreement. In anticipation of an amendment of the original Credit Agreement combined with the receipt of the Iusacell settlement payment, the Company transferred $10,100,000 on June 22, 2015 to the lenders pending the closing of an amendment of the credit agreement, which amendment was executed on July 9, 2015. See also Note 11 subsequent events. The $ 10,100,000 5,500,000 172,667 110,000 62,667 4,427,333

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jun. 30, 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 Level 2 Level 3 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 June 30, 2015 and December 31, 2014 for financial assets and liabilities measured at fair value on a recurring basis: June 30, 2015 (Unaudited) Level 1 Level 2 Level 3 Total Derivative Liabilities Warrant Liabilities $ - $ - $ - $ - Total Derivatives Liabilities $ - $ - $ - $ - December 31, 2014 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 previously outstanding warrant liabilities into level 3 1,692,087 149,203

Stockholders' Equity

Stockholders' Equity	6 Months Ended
	Jun. 30, 2015
Stockholders' Equity [Abstract]
Stockholders' Equity	Note 5. Stockholders' Equity (A) Common Stock The Company is presently authorized to issue 250,000,000 159,194,181 154,671,258 4,522,923 4,029,738 8,668 484,517 (B) Preferred Stock The Company's Certificate of Incorporation (“Articles”) authorizes the issuance of 50,000,000 0.00001 For the period ended June 30, 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 June 30, 2015 (unaudited) and December 31, 2014 have been recorded and classified as equity. The Weighted Average Exercise Price for the currently outstanding warrants in the table below is $ 1.26 Outstanding Warrants Exercise/ Conversion price(s) (range) Expiring 2015 2014 Warrants – Fundraising $ 0.700 1.50 2015 2018 25,320,386 29,610,206 Warrants – Other $ 2.21 2016 18,659 18,659 25,339,045 29,628,865

2006 Non-Qualified Stock and Op

2006 Non-Qualified Stock and Option Compensation Plan and Amended and Restated 2008 Long Term Incentive Compensation Plan	6 Months Ended
	Jun. 30, 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 484,517 Options exercised 2,382,110 Outstanding options 42,136,739 Available for grant at June 30, 2015 (unaudited) 9,045,603 During the first half year of 2015, the Company issued 484,517 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 11,014,402 $ 0.70 Exercised (with delivery of shares) (8,668 ) $ 0.68 Forfeitures (Pre-vesting) (6,481,215 ) $ 1.09 Expirations (Post-vesting) (2,443,860 ) $ 1.74 Outstanding as of June 30, 2015 (unaudited) 42,136,739 $ 1.28 At June 30, 2015, the unrecognized expense portion of stock-based awards granted to employees under the 2008 Plan was approximately $ 5,854,531 11,607,937

Income taxes

Income taxes	6 Months Ended
	Jun. 30, 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: Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 (Benefit) Provision for income taxes $ 111,450 $ (2,209 ) $ 42,958 $ 133,228 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 Geogra

Significant Customer and Geographical Information	6 Months Ended
	Jun. 30, 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 Six Months Ended June 30, June 30, 2015 2014 2015 2014 Two largest customers 87.4 % 77.4 % 83.3 % 77.4 % The geographical distribution of our revenue, as a percentage of revenue, was as follows: Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Europe 16.6 % 65.4 % 26.3 % 65.5 % All other (non-European) countries 83.4 % 34.6 % 73.7 % 34.5 % 100.0 % 100.0 % 100.0 % 100.0 %

Per Common Share Information

Per Common Share Information	6 Months Ended
	Jun. 30, 2015
Per Common Share Information [Abstract]
Per Common Share Information	Note 9. Per Common Share Information Diluted earnings per common share is calculated using net income divided by the weighted-average basic and diluted shares. Diluted weighted-average shares include weighted-average shares outstanding plus the calculated dilutive effect of employee options and outstanding warrants using the treasury stock method. The dilutive effect has been determined to be 1,551,352

Restatement

Restatement	6 Months Ended
	Jun. 30, 2015
Restatement [Abstract]
Restatement	Note 10. 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, as amended, for additional information regarding the restatement of our unaudited consolidated financial statements for the quarter ended June 30, 2014 and for information regarding the restatement 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 June 30, 2015 (this “Form 10-Q”) reflects the impact of the restatement on the applicable unaudited quarterly financial information for the quarter ended June 30, 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 June 30, 2014 to the corresponding restated amounts as reported herein and in our 2014 Form 10-K. June 30, June 30, 2014 2014 ( unaudited restatement Restated Unaudited Unaudited 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 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 10% Related Party Loan - - - Total current liabilities 12,338,081 468,256 12,806,337 LONG TERM LIABILITIES 10% 3rd Party Loan (net of Debt Discount of $ 518,463 726,695 4,940,798 - 4,940,798 10% Related Party Loan (net of Debt Discount of $ 17,786 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 50,000,000 0 - - - Common Stock $ 0.00001 250,000,000 146,364,577 255,328,306 - 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 Three months period ended June 30, 2014 Restatement adjustments Re-classifications Restated (unaudited) (unaudited) (unaudited) (unaudited) REVENUES $ 6,911,768 $ (1,839,328 ) $ - $ 5,072,440 COST AND OPERATING EXPENSES Cost of service (excluding depreciation and amortization) 828,581 - 1,020,107 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 ) - (5,117,316 ) 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 ) Change in fair value of warrant liabilities 38,948 - - 38,948 Loss on extinguishment of debt - - - - Other income and (expense) 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 PROVISION FOR INCOME TAXES (4,613,084 ) (1,839,328 ) - (6,452,411 ) (Benefit) / Provision for income taxes (2,209 ) - - (2,209 ) NET LOSS (4,610,875 ) (1,839,328 ) - (6,450,202 ) 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 Six months period ended June 30, 2014 Restatement adjustments Re-classifications Restated (unaudited) (unaudited) (unaudited) (unaudited) REVENUES $ 13,391,621 $ (2,934,916 ) $ - $ 10,456,705 COST AND OPERATING EXPENSES Cost of service (excluding depreciation and amortization) 1,812,045 - 1,672,614 3,484,659 Product development - - 3,992,349 3,992,349 Sales and marketing - - 1,228,642 1,228,642 General and administrative 13,408,891 - (6,893,605 ) 6,515,286 Depreciation and amortization 3,936,606 - - 3,936,606 Total cost and operating expenses 19,157,542 - - 19,157,542 LOSS FROM OPERATIONS (5,765,921 ) (2,934,916 ) - (8,700,837 ) OTHER INCOME (EXPENSE) Interest income 57,156 - - 57,156 Interest expense (635,158 ) - - (635,158 ) Interest expense related to Debt Discount and Conversion Feature (1,910,032 ) - - (1,910,032 ) Change in fair value of warrant liabilities (171,324 ) - - (171,324 ) Loss on extinguishment of debt (426 ) - - (426 ) Other income and (expense) 71,398 - - 71,398 Amortization of deferred financing costs (249,457 ) - - (249,457 ) Total other income (expense) (2,837,843 ) - - (2,837,843 ) LOSS BEFORE PROVISION FOR INCOME TAXES (8,603,764 ) (2,934,916 ) - (11,538,680 ) Provision for income taxes 133,228 - - 133,228 NET LOSS (8,736,992 ) (2,934,916 ) - (11,671,908 ) OTHER COMPREHENSIVE (LOSS) INCOME Foreign currency translation (loss) (150,452 ) - - (150,452 ) COMPREHENSIVE LOSS $ (8,887,444 ) $ (2,934,916 ) $ - $ (11,822,360 ) Net loss per common share and equivalents - basic and diluted $ (0.06 ) $ - $ - $ (0.08 ) Weighted average shares outstanding during the period - basic and diluted 144,130,543 - - 144,130,543 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 six months ended June 30, 2014 Restatement Restated Unaudited Unaudited* Unaudited* CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (8,736,992 ) $ (2,934,916 ) $ (11,671,908 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 3,936,606 - 3,936,606 Provision for doubtful accounts 18,865 - 18,865 Stock based compensation 2,674,261 - 2,674,261 Change in the fair value of the warrant liability 171,324 - 171,324 Amortization of deferred financing costs 249,457 - 249,457 Interest expense relating to debt discount and conversion feature 1,910,032 - 1,910,032 Unrealized foreign currency translation gain/(loss) (71,398 ) - (71,398 ) (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* (2,329,143 ) 414,819 (1,914,324 ) Decrease (increase) in prepaid expenses, deposits and other assets (346,129 ) - (346,129 ) Increase (decrease) in accounts payable, proceeds from related parties and customer deposits 210,932 - 210,932 Increase (decrease) in deferred revenue* 16,994 2,552,097 2,537,091 Increase (decrease) in accrued expenses and other payables* 1,910,256 - 1,909,830 Net cash provided by (used in) operating activities (384,935 ) - (384,935 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of Property and Equipment (3,922,724 ) - (3,922,724 ) Net cash used in investing activities (3,922,724 ) - (3,922,724 ) CASH FLOWS FROM FINANCING ACTIVITIES: Financing related fees (90,000 ) - (90,000 ) Exercise of warrants and Options 4,283,033 - 4,283,033 Net cash provided by financing activities 4,193,033 - 4,193,033 EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS (308,301 ) - (308,301 ) NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (422,927 ) - (422,927 ) CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD 1,252,315 - 1,252,315 CASH AND CASH EQUIVALENTS, END OF THE PERIOD $ 829,388 $ - $ 829,388 *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 ($ 2,076,250 414,819 5,011,166 2,552,097 426 426

Subsequent Events

Subsequent Events	6 Months Ended
	Jun. 30, 2015
Subsequent Events [Abstract]
Subsequent Events	Note 11. Subsequent Events The Company's management evaluated subsequent events through the date the financial statements were available to be issued. On July 9, 2015 the Company entered into a First Amendment to the Credit Agreement dated November 17, 2014 with Corbin Mezzanine Fund I, L.P. (‘Lender') and Atalaya Administrative LLC as administrative agent and collateral agent for Corbin Mezzanine Fund I. In this amendment, Lender and Atalaya agreed to waive the existing default as defined in the November 17, 2014 credit agreement subject to certain terms and conditions in the Amendment. Upon repayment of approximately $ 5.7 6.5 6.5 11.00 0.5 two 30 0.38 0.02 0.36 one 18 0.38 0.02 0.36 Leading up to the amendment of the credit agreement the Company paid on June 22, 2015 $10,100,000 to Atalaya, comprising $ 5,500,000 4,427,333 9,927,333 12,000,000 2,072,667 10,100,000 4.5 6,500,000 Upon closing of the amendment the company performed an analysis to determine if this amendment to the Credit Agreement of November 17, 2014 constituted a substantial modification to the original credit agreement and concluded that such was not the case.

Supplemental Financial Inform17

Supplemental Financial Information (Tables)	6 Months Ended
	Jun. 30, 2015
Supplemental Financial Information [Abstract]
Schedule of Prepaid Expenses And Other Current Assets	June 30, December 31, 2015 2014 (unaudited) Recurring prepaid expenses $ 290,159 $ 455,529 Non recurring prepaid expenses 293,233 731,725 Taxes 328,708 359,087 VAT 630,621 742,773 Inventory SIM cards 7,106 189,567 $ 1,549,827 $ 2,478,681
Schedule of Other Assets	Other Assets June 30, December 31, 2015 2014 (unaudited) Long term deposits $ 487,442 $ 653,002 Deferred Financing Costs 347,586 682,878 Due from third parties 270,196 264,455 $ 1,105,224 $ 1,600,335
Schedule of Property and Equipment	Property and equipment June 30, December 31, 2015 2014 (unaudited) Furniture & fixtures $ 301,441 $ 281,214 Computer, communications and network equipment 24,142,700 23,904,494 Software 5,941,981 4,556,364 Automobiles 73,809 80,860 Construction in progress 1,886,575 4,044,932 Acc. Depreciation Property & Equipment (14,818,014 ) (13,548,662 ) $ 17,528,492 $ 19,319,202
Schedule of Intangible Assets	Intangible assets June 30, December 31, 2015 2014 Validsoft IP & Technology $ 13,181,868 $ 14,344,604 Customer Contracts, Licenses , Interconnect & Technology 1,807,074 1,870,523 Accumulated amortization Validsoft IP & Technology (9,966,097 ) (9,973,063 ) Accumulated amortization Customer Contracts, Licenses, Interconnect & Technology (1,265,956 ) (1,165,856 ) $ 3,756,889 $ 5,076,208
Schedule of Goodwill	Goodwill June 30, December 31, 2015 2014 Goodwill ValidSoft Ltd $ 2,705,903 $ 2,964,423 Goodwill Morodo Ltd. 180,222 197,440 Goodwill Telnicity 190,401 190,401 $ 3,076,526 $ 3,352,264
Accrued Expenses	Accrued expenses and other payables June 30, December 31, 2015 2014 Accrued Selling, General & Administrative expenses $ 2,049,441 $ 1,863,020 Accrued cost of service 265,965 291,553 Accrued taxes (including VAT) 563,721 570,616 Accrued interest payable 43,052 1,184,418 Other accrued expenses 100,257 152,045 $ 3,022,436 $ 4,061,652
Schedule of 2014 10% + libor 3rd Party Term Loan Agreement	2014 10% + libor 3rd Party Term Loan Agreement June 30, December 31, 2015 2014 2014 10% Term Loan (principal amount) $ 2,072,669 $ 12,000,000 Debt Discount - Original Issue Discount (165,286 ) (365,231 ) Debt Discount - Warrants (167,018 ) (433,663 ) $ 1,740,365 $ 11,201,106

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 2015
Fair Value Measurements [Abstract]
Schedule of Financial Assets And Liabilities Measured at Fair Value on a Recurring Basis	June 30, 2015 (Unaudited) Level 1 Level 2 Level 3 Total Derivative Liabilities Warrant Liabilities $ - $ - $ - $ - Total Derivatives Liabilities $ - $ - $ - $ - December 31, 2014 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)	6 Months Ended
	Jun. 30, 2015
Stockholders' Equity [Abstract]
Summary of Warrants	Outstanding Warrants Exercise/ Conversion price(s) (range) Expiring 2015 2014 Warrants – Fundraising $ 0.700 1.50 2015 2018 25,320,386 29,610,206 Warrants – Other $ 2.21 2016 18,659 18,659 25,339,045 29,628,865

2006 Non-Qualified Stock and 20

2006 Non-Qualified Stock and Option Compensation Plan and Amended and Restated 2008 Long Term Incentive Compensation Plan (Tables)	6 Months Ended
	Jun. 30, 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 484,517 Options exercised 2,382,110 Outstanding options 42,136,739 Available for grant at June 30, 2015 (unaudited) 9,045,603
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 11,014,402 $ 0.70 Exercised (with delivery of shares) (8,668 ) $ 0.68 Forfeitures (Pre-vesting) (6,481,215 ) $ 1.09 Expirations (Post-vesting) (2,443,860 ) $ 1.74 Outstanding as of June 30, 2015 (unaudited) 42,136,739 $ 1.28

Income taxes (Tables)

Income taxes (Tables)	6 Months Ended
	Jun. 30, 2015
Income taxes [Abstract]
Schedule of net (benefit) provision for income taxes	Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 (Benefit) Provision for income taxes $ 111,450 $ (2,209 ) $ 42,958 $ 133,228

Significant Customer and Geog22

Significant Customer and Geographical Information (Tables)	6 Months Ended
	Jun. 30, 2015
Significant Customer and Geographical Information [Abstract]
Schedule of Significant Customer and Geographical Information	Sales to our significant customers, as a percentage of net revenue were as follows: Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Two largest customers 87.4 % 77.4 % 83.3 % 77.4 % The geographical distribution of our revenue, as a percentage of revenue, was as follows: Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Europe 16.6 % 65.4 % 26.3 % 65.5 % All other (non-European) countries 83.4 % 34.6 % 73.7 % 34.5 % 100.0 % 100.0 % 100.0 % 100.0 %

Restatement (Tables)

Restatement (Tables)	6 Months Ended
	Jun. 30, 2015
Restatement [Abstract]
Schedule of restatement of previously issued financial statements and financial information	For the six months ended June 30, 2014 Restatement Restated Unaudited Unaudited* Unaudited* CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (8,736,992 ) $ (2,934,916 ) $ (11,671,908 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 3,936,606 - 3,936,606 Provision for doubtful accounts 18,865 - 18,865 Stock based compensation 2,674,261 - 2,674,261 Change in the fair value of the warrant liability 171,324 - 171,324 Amortization of deferred financing costs 249,457 - 249,457 Interest expense relating to debt discount and conversion feature 1,910,032 - 1,910,032 Unrealized foreign currency translation gain/(loss) (71,398 ) - (71,398 ) (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* (2,329,143 ) 414,819 (1,914,324 ) Decrease (increase) in prepaid expenses, deposits and other assets (346,129 ) - (346,129 ) Increase (decrease) in accounts payable, proceeds from related parties and customer deposits 210,932 - 210,932 Increase (decrease) in deferred revenue* 16,994 2,552,097 2,537,091 Increase (decrease) in accrued expenses and other payables* 1,910,256 - 1,909,830 Net cash provided by (used in) operating activities (384,935 ) - (384,935 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of Property and Equipment (3,922,724 ) - (3,922,724 ) Net cash used in investing activities (3,922,724 ) - (3,922,724 ) CASH FLOWS FROM FINANCING ACTIVITIES: Financing related fees (90,000 ) - (90,000 ) Exercise of warrants and Options 4,283,033 - 4,283,033 Net cash provided by financing activities 4,193,033 - 4,193,033 EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS (308,301 ) - (308,301 ) NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (422,927 ) - (422,927 ) CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD 1,252,315 - 1,252,315 CASH AND CASH EQUIVALENTS, END OF THE PERIOD $ 829,388 $ - $ 829,388 June 30, June 30, 2014 2014 ( unaudited restatement Restated Unaudited Unaudited 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 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 10% Related Party Loan - - - Total current liabilities 12,338,081 468,256 12,806,337 LONG TERM LIABILITIES 10% 3rd Party Loan (net of Debt Discount of $ 518,463 726,695 4,940,798 - 4,940,798 10% Related Party Loan (net of Debt Discount of $ 17,786 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 50,000,000 0 - - - Common Stock $ 0.00001 250,000,000 146,364,577 255,328,306 - 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 Three months period ended June 30, 2014 Restatement adjustments Re-classifications Restated (unaudited) (unaudited) (unaudited) (unaudited) REVENUES $ 6,911,768 $ (1,839,328 ) $ - $ 5,072,440 COST AND OPERATING EXPENSES Cost of service (excluding depreciation and amortization) 828,581 - 1,020,107 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 ) - (5,117,316 ) 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 ) Change in fair value of warrant liabilities 38,948 - - 38,948 Loss on extinguishment of debt - - - - Other income and (expense) 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 PROVISION FOR INCOME TAXES (4,613,084 ) (1,839,328 ) - (6,452,411 ) (Benefit) / Provision for income taxes (2,209 ) - - (2,209 ) NET LOSS (4,610,875 ) (1,839,328 ) - (6,450,202 ) 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 Six months period ended June 30, 2014 Restatement adjustments Re-classifications Restated (unaudited) (unaudited) (unaudited) (unaudited) REVENUES $ 13,391,621 $ (2,934,916 ) $ - $ 10,456,705 COST AND OPERATING EXPENSES Cost of service (excluding depreciation and amortization) 1,812,045 - 1,672,614 3,484,659 Product development - - 3,992,349 3,992,349 Sales and marketing - - 1,228,642 1,228,642 General and administrative 13,408,891 - (6,893,605 ) 6,515,286 Depreciation and amortization 3,936,606 - - 3,936,606 Total cost and operating expenses 19,157,542 - - 19,157,542 LOSS FROM OPERATIONS (5,765,921 ) (2,934,916 ) - (8,700,837 ) OTHER INCOME (EXPENSE) Interest income 57,156 - - 57,156 Interest expense (635,158 ) - - (635,158 ) Interest expense related to Debt Discount and Conversion Feature (1,910,032 ) - - (1,910,032 ) Change in fair value of warrant liabilities (171,324 ) - - (171,324 ) Loss on extinguishment of debt (426 ) - - (426 ) Other income and (expense) 71,398 - - 71,398 Amortization of deferred financing costs (249,457 ) - - (249,457 ) Total other income (expense) (2,837,843 ) - - (2,837,843 ) LOSS BEFORE PROVISION FOR INCOME TAXES (8,603,764 ) (2,934,916 ) - (11,538,680 ) Provision for income taxes 133,228 - - 133,228 NET LOSS (8,736,992 ) (2,934,916 ) - (11,671,908 ) OTHER COMPREHENSIVE (LOSS) INCOME Foreign currency translation (loss) (150,452 ) - - (150,452 ) COMPREHENSIVE LOSS $ (8,887,444 ) $ (2,934,916 ) $ - $ (11,822,360 ) Net loss per common share and equivalents - basic and diluted $ (0.06 ) $ - $ - $ (0.08 ) Weighted average shares outstanding during the period - basic and diluted 144,130,543 - - 144,130,543

Financial Condition (Details)

Financial Condition (Details) - Concentration Risk Benchmark [Domain] - Concentration Risk Type [Domain] - USD ($)	Jun. 12, 2015	Jul. 31, 2015	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Jul. 14, 2015	Jul. 09, 2015	Dec. 31, 2014	Dec. 31, 2013
Financial Condition [Abstract]
Net losses			$ 9,521,918	$ (6,450,202)	$ 7,396,745	$ (11,671,908)
Accumulated deficit			(243,232,551)	(240,425,532)	(243,232,551)	(240,425,532)			$ (250,629,296)
Cash and cash equivalents			1,232,525	$ 829,388	1,232,525	829,388			1,904,160	$ 1,252,315
Change in accounts receivable					(4,305,466)	$ 1,914,324
Concentration Risk [Line Items]
Net proceeds from settlement	$ 12,600,000
Amount of debt assumed in agreement	900,000
Amount of settlement	$ 13,500,000
Amount available			2,500,000		2,500,000
Net proceeds							$ 4,200,000
Subsequent Event [Member]
Concentration Risk [Line Items]
Proceeds from agreement		$ 4,500,000
Amount of facility								$ 6,500,000
Term Loan 2014 [Member]
Concentration Risk [Line Items]
Repayments					10,100,000
Debt instrument, principal amount			2,072,669		2,072,669				$ 12,000,000
Amount of facility			$ 12,600,000		12,600,000
Customer One [Member]
Concentration Risk [Line Items]
Loss of monthly billings					1,300,000
Estimated decrease in annual expenses					$ 5,000,000

Supplemental Financial Inform25

Supplemental Financial Information (Prepaid Expenses And Other Current Assets) (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014
Supplemental Financial Information [Abstract]
Recurring prepaid expenses	$ 290,159	$ 455,529
Non recurring prepaid expenses	293,233	731,725
Taxes	328,708	359,087
VAT	630,621	742,773
Inventory SIM cards	7,106	189,567
Prepaid expenses and other current assets	$ 1,549,827	$ 2,478,681	$ 2,619,882

Supplemental Financial Inform26

Supplemental Financial Information (Other Assets) (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014
Supplemental Financial Information [Abstract]
Long term deposits	$ 487,442	$ 653,002
Deferred Financing Costs	347,586	682,878
Due from third parties	270,196	264,455
Other Assets	$ 1,105,224	$ 1,600,335	$ 1,288,246

Supplemental Financial Inform27

Supplemental Financial Information (Property And Equipment) (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014
Property, Plant and Equipment [Line Items]
Acc. Depreciation Property & Equipment	$ (14,818,014)	$ (13,548,662)
Property and equipment	17,528,492	19,319,202	$ 20,711,832
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	301,441	281,214
Computer, communications and network equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	24,142,700	23,904,494
Software [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	5,941,981	4,556,364
Automobiles [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	73,809	80,860
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 1,886,575	$ 4,044,932

Supplemental Financial Inform28

Supplemental Financial Information (Intangible Assets) (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014
Finite-Lived Intangible Assets [Line Items]
Total intangible assets, net	$ 3,756,889	$ 5,076,208	$ 7,122,940
ValidSoft IP & Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, Gross	13,181,868	14,344,604
Accumulated amortization	(9,966,097)	(9,973,063)
Customer Contracts, Licenses, Interconnect & Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, Gross	1,807,074	1,870,523
Accumulated amortization	$ (1,265,956)	$ (1,165,856)

Supplemental Financial Inform29

Supplemental Financial Information (Goodwill) (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014
Goodwill [Line Items]
Goodwill	$ 3,076,526	$ 3,352,264	$ 3,740,646
ValidSoft Ltd [Member]
Goodwill [Line Items]
Goodwill	2,705,903	2,964,423
Morodo Ltd. [Member]
Goodwill [Line Items]
Goodwill	180,222	197,440
Telnicity LLC [Member]
Goodwill [Line Items]
Goodwill	$ 190,401	$ 190,401

Supplemental Financial Inform30

Supplemental Financial Information (Accrued Expenses And Other Payables) (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014
Supplemental Financial Information [Abstract]
Accrued Selling, General & Administrative expenses	$ 2,049,441	$ 1,863,020
Accrued cost of service	265,965	291,553
Accrued taxes (including VAT)	563,721	570,616
Accrued interest payable	43,052	1,184,418
Other accrued expenses	100,257	152,045
Total accrued expenses and other payables	$ 3,022,436	$ 4,061,652	$ 6,592,945

Supplemental Financial Inform31

Supplemental Financial Information (2014 10% + libor 3rd Party Term Loan Agreement) (Details) - 2014 10% Term Loan Agreement [Member] - USD ($)	6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Debt instrument, principal amount	$ 2,072,669	$ 12,000,000
Debt Discount - Original Issue Discount	(165,286)	(365,231)
Debt Discount - Warrants	(167,018)	(433,663)
Long-term debt (Net of Debt Discount)	1,740,365	$ 11,201,106
Repayments	10,100,000
Prepayment of debt	5,500,000
Reduction in principal	4,427,333
Prepayment charges	172,667
Other charges	110,000
Interest cost	$ 62,667

Fair Value Measurements (Schedu

Fair Value Measurements (Schedule of Financial Assets and Liabilities Measured at Fair Value on Rrecurring Basis) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Derivative Liabilities
Shares issued for warrant exercise	$ 1,692,087
Change in fair value of warrants	$ 149,203	$ 38,948	$ 395,905	$ (171,324)
Fair Value, Measurements, Recurring [Member]
Derivative Liabilities
Derivative liabilities					$ 2,087,992
Fair Value, Measurements, Recurring [Member] | Warrants [Member]
Derivative Liabilities
Derivative liabilities					$ 2,087,992
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Derivative Liabilities
Derivative liabilities
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Warrants [Member]
Derivative Liabilities
Derivative liabilities
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Derivative Liabilities
Derivative liabilities
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Warrants [Member]
Derivative Liabilities
Derivative liabilities
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Derivative Liabilities
Derivative liabilities					$ 2,087,992
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Warrants [Member]
Derivative Liabilities
Derivative liabilities					$ 2,087,992

Stockholders' Equity (Narrative

Stockholders' Equity (Narrative) (Details) - $ / shares	6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014
Common Stock:
Common stock, shares authorized	250,000,000	250,000,000	250,000,000
Common stock, shares issued	159,194,181	154,671,258	146,364,577
Common stock, shares outstanding	159,194,181	154,671,258	146,364,577
Common stock, increase in shares issued during the period	4,522,923
Shares issued in connection with warrant exercises	4,029,738
Shares issued to the Company's executive officers and non-executive directors	484,517
Shares issued for employee stock option exercises, shares	8,668
Preferred Stock:
Preferred stock, shares authorized	50,000,000	50,000,000	50,000,000
Preferred stock, par or stated value per share	$ 0.00001	$ 0.00001	$ 0.00001
Preferred stock, shares outstanding	0	0	0

Stockholders' Equity (Summary o

Stockholders' Equity (Summary of Warrants) (Details) - $ / shares	6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Class of Warrant or Right [Line Items]
Warrants outstanding	25,339,045	29,628,865
Weighted Average [Member]
Class of Warrant or Right [Line Items]
Exercise price (in dollars per share)	$ 1.26
Warrants - Fundraising [Member]
Class of Warrant or Right [Line Items]
Warrants outstanding	25,320,386	29,610,206
Warrants - Fundraising [Member] | Minimum [Member]
Class of Warrant or Right [Line Items]
Exercise price (in dollars per share)	$ 0.700
Expiring	Dec. 31, 2015
Warrants - Fundraising [Member] | Maximum [Member]
Class of Warrant or Right [Line Items]
Exercise price (in dollars per share)	$ 1.50
Expiring	Dec. 31, 2018
Warrants - Other [Member]
Class of Warrant or Right [Line Items]
Exercise price (in dollars per share)	$ 2.21
Expiring	Dec. 31, 2016
Warrants outstanding	18,659	18,659

2006 Non-Qualified Stock and 35

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) - Jun. 30, 2015 - shares	Total
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options exercised	8,668
Employee Stock Option [Member]
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	484,517
Options exercised	2,382,110
Outstanding options	42,136,739
Available for grant	9,045,603
Directors And Officers [Member] | Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued in 2015	484,517

2006 Non-Qualified Stock and 36

2006 Non-Qualified Stock and Option Compensation Plan and Amended and Restated 2008 Long Term Incentive Compensation Plan (Stock Option Activity) (Details) - Award Type [Domain] - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Number of Options
Exercised (with delivery of shares)	(8,668)
2008 Long-Term Incentive Plan [Member]
Number of Options
Beginning Balance	40,056,080
Granted	11,014,402
Exercised (with delivery of shares)	(8,668)
Forfeitures (Pre-vesting)	(6,481,215)
Expirations (Post-vesting)	(2,443,860)
Ending Balance	42,136,739
Weighted Average Exercise Price
Beginning Balance	$ 1.32
Granted	0.70
Exercised (with delivery of shares)	0.68
Forfeitures (Pre-vesting)	1.09
Expirations (Post-vesting)	1.74
Ending Balance	$ 1.28
Initial Fair Market Value (Outstanding Options)
Unrecognized share-based compensation expense	$ 5,854,531	$ 11,607,937

Income taxes (Details)

Income taxes (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Income taxes [Abstract]
(Benefit) Provision for income taxes	$ 111,450	$ (2,209)	$ 42,958	$ 133,228

Significant Customer and Geog38

Significant Customer and Geographical Information (Sales to Significant Customers) (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenue Concentration [Member] | Customer Concentration Risk [Member] | Two largest customers [Member]
Concentration Risk [Line Items]
Percentage of revenues	87.40%	77.40%	83.30%	77.40%

Significant Customer and Geog39

Significant Customer and Geographical Information (Geographical Distribution of Revenue) (Details) - Revenue Concentration [Member] - Geographic Concentration Risk [Member]	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Concentration Risk [Line Items]
Percentage of revenues	100.00%	100.00%	100.00%	100.00%
Europe [Member]
Concentration Risk [Line Items]
Percentage of revenues	16.60%	65.40%	26.30%	65.50%
All Other (Non-European) Countries [Member]
Concentration Risk [Line Items]
Percentage of revenues	83.40%	34.60%	73.70%	34.50%

Per Common Share Information (D

Per Common Share Information (Details) - Jun. 30, 2015 - shares	Total	Total
Per Common Share Information [Abstract]
Weighted Average Number Diluted Shares Outstanding Adjustment	1,551,352	1,551,352

Restatement (CONSOLIDATED BALAN

Restatement (CONSOLIDATED BALANCE SHEET) (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014	Dec. 31, 2013
CURRENT ASSETS
Cash and cash equivalents	$ 1,232,525	$ 1,904,160	$ 829,388	$ 1,252,315
Restricted cash	304,676	312,935	191,703
Accounts receivable, net of allowance for doubtful accounts	3,720,881	8,877,213	6,924,756
Prepaid expenses and other current assets	1,549,827	2,478,681	2,619,882
Total current assets	6,807,909	15,572,989	10,565,729
NON-CURRENT ASSETS
OTHER ASSETS	1,105,224	1,600,335	1,288,246
PROPERTY AND EQUIPMENT, NET	17,528,492	19,319,202	20,711,832
INTANGIBLE ASSETS, NET	3,756,889	5,076,208	7,122,940
GOODWILL	3,076,526	3,352,264	3,740,646
TOTAL ASSETS	$ 32,275,040	44,920,998	43,429,393
CURRENT LIABILITIES
Overdraft		433,366	413,958
Accounts payable and customer deposits	$ 3,783,252	1,856,014	2,305,933
Obligations under capital leases (current portion)	706,385	1,831,050	1,898,346
Deferred revenue	2,649,051	8,813,385	632,104
Accrued expenses and other payables	$ 3,022,436	4,061,652	6,592,945
Loans payable		962,269	$ 963,051
10% Related Party Loan (net of Debt Discount)
Total current liabilities	$ 10,161,124	29,158,842	$ 12,806,337
LONG TERM LIABILITIES
10% 3rd Party Loan (net of Debt Discount)			4,940,798
10% Related Party Loan (net of Debt Discount)			2,711,844
Warrant liabilities		2,087,992	2,144,858
Non-current portion of obligation under capital leases	95,532	272,460	487,728
Non-current portion of deferred revenue	541,577	2,434,257	4,542,910
Loan from joint venture partner			626,534
Total long term liabilities	2,672,106	5,149,589	15,454,672
Total liabilities	$ 12,833,230	$ 34,308,431	$ 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, 146,364,577 issued and outstanding as of June 30, 2014	$ 266,995,681	$ 264,359,674	$ 255,328,306
Accumulated other comprehensive income	(4,330,752)	(3,127,132)	121,636
Accumulated deficit	(243,232,551)	(250,629,296)	(240,425,532)
Elephant Talk Communications, Corp. stockholders' equity	19,432,378	10,603,246	15,024,410
NON-CONTROLLING INTEREST	9,432	9,321	143,974
Total stockholders' equity	19,441,810	10,612,567	15,168,384
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 32,275,040	$ 44,920,998	43,429,393
As previously reported [Member]
CURRENT ASSETS
Cash and cash equivalents			829,388	$ 1,252,315
Restricted cash			191,703
Accounts receivable, net of allowance for doubtful accounts			8,223,963
Prepaid expenses and other current assets			2,619,882
Total current assets			11,864,936
NON-CURRENT ASSETS
OTHER ASSETS			1,288,246
PROPERTY AND EQUIPMENT, NET			20,711,832
INTANGIBLE ASSETS, NET			7,122,940
GOODWILL			3,740,646
TOTAL ASSETS			44,728,600
CURRENT LIABILITIES
Overdraft			413,958
Accounts payable and customer deposits			2,305,933
Obligations under capital leases (current portion)			1,898,346
Deferred revenue			163,848
Accrued expenses and other payables			6,592,945
Loans payable			$ 963,051
10% Related Party Loan (net of Debt Discount)
Total current liabilities			$ 12,338,081
LONG TERM LIABILITIES
10% 3rd Party Loan (net of Debt Discount)			4,940,798
10% Related Party Loan (net of Debt Discount)			2,711,844
Warrant liabilities			2,144,858
Non-current portion of obligation under capital leases			487,728
Loan from joint venture partner			626,534
Total long term liabilities			10,911,762
Total liabilities			$ 23,249,843
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 June 30, 2014			$ 255,328,306
Accumulated other comprehensive income			121,636
Accumulated deficit			(234,115,159)
Elephant Talk Communications, Corp. stockholders' equity			21,334,783
NON-CONTROLLING INTEREST			143,974
Total stockholders' equity			21,478,757
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY			$ 44,728,600
Restatement change [Member]
CURRENT ASSETS
Cash and cash equivalents
Restricted cash
Accounts receivable, net of allowance for doubtful accounts			$ (1,299,207)
Prepaid expenses and other current assets
Total current assets			$ (1,299,207)
NON-CURRENT ASSETS
OTHER ASSETS
PROPERTY AND EQUIPMENT, NET
INTANGIBLE ASSETS, NET
GOODWILL
TOTAL ASSETS			$ (1,299,207)
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)
10% Related Party Loan (net of Debt Discount)
Warrant liabilities
Non-current portion of obligation under capital leases
Non-current portion of deferred revenue			$ 4,542,910
Loan from joint venture partner
Total long term liabilities			$ 4,542,910
Total liabilities			$ 5,011,166
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 June 30, 2014
Accumulated other comprehensive income
Accumulated deficit			$ (6,310,373)
Elephant Talk Communications, Corp. stockholders' equity			$ (6,310,373)
NON-CONTROLLING INTEREST
Total stockholders' equity			$ (6,310,373)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY			$ (1,299,207)

Restatement (CONSOLIDATED BAL42

Restatement (CONSOLIDATED BALANCE SHEET) (Parenthetical) (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014	Dec. 31, 2013
Accounts receivable, allowance for doubtful accounts			$ 29,547
Preferred stock, par or stated value per share	$ 0.00001	$ 0.00001	$ 0.00001
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	$ 0.00001	$ 0.00001	$ 0.00001
Common stock, shares authorized	250,000,000	250,000,000	250,000,000
Common stock, shares issued	159,194,181	154,671,258	146,364,577
Common stock, shares outstanding	159,194,181	154,671,258	146,364,577
Convertible Note One [Member]
Discount on debt			$ 518,463	$ 726,695
Convertible Note Two [Member]
Discount on debt			$ 17,786

Restatement (CONSOLIDATED STATE

Restatement (CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS [Abstract]
REVENUES	$ 19,244,383	$ 5,072,440	$ 24,257,399	$ 10,456,705
COST AND OPERATING EXPENSES
Cost of service (excluding depreciation and amortization)	1,440,914	1,848,687	3,309,760	3,484,659
Product development	1,490,683	2,280,532	2,526,804	3,992,349
Sales and marketing	336,960	664,807	999,120	1,228,642
General and administrative	2,664,281	3,467,338	5,625,377	6,515,286
Depreciation and amortization	1,745,034	1,928,392	3,491,181	3,936,606
Total cost and operating expenses	8,615,707	10,189,756	16,890,077	19,157,542
INCOME / (LOSS) FROM OPERATIONS	10,628,676	(5,117,316)	7,367,322	(8,700,837)
OTHER INCOME (EXPENSE)
Interest income	22,587	29,545	52,859	57,156
Interest expense	(555,826)	(333,214)	(923,166)	(635,158)
Interest expense related to debt discount and conversion feature	(403,679)	(1,025,292)	(467,651)	(1,910,032)
Changes in fair value of warrant liabilities	149,203	$ 38,948	395,905	(171,324)
Loss on extinguishment of debt			2,475,799	(426)
Other income and (expense)	155,252	$ 68,008	(1,036,018)	71,398
Amortization of deferred financing costs	(362,845)	(113,090)	(425,347)	(249,457)
Total other income (expense)	(995,308)	(1,335,095)	72,381	(2,837,843)
INCOME / (LOSS) BEFORE (BENEFIT) PROVISION FOR INCOME TAXES	9,633,368	(6,452,411)	7,439,703	(11,538,680)
(Benefit) / provision for income taxes	111,450	(2,209)	42,958	133,228
NET INCOME / (LOSS)	9,521,918	(6,450,202)	7,396,745	(11,671,908)
OTHER COMPREHENSIVE INCOME / (LOSS) INCOME
Foreign currency translation (loss)	508,818	(148,233)	(1,203,620)	(150,452)
COMPREHENSIVE INCOME / (LOSS)	$ 10,030,736	$ (6,598,435)	$ 6,193,125	$ (11,822,360)
Net income / (loss) per common share and equivalents - basic and diluted		$ (0.04)		$ (0.08)
Weighted average shares outstanding during the period - basic and diluted		146,482,547		144,130,543
As previously reported [Member]
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS [Abstract]
REVENUES		$ 6,911,768		$ 13,391,621
COST AND OPERATING EXPENSES
Cost of service (excluding depreciation and amortization)		$ 828,581		$ 1,812,045
Product development
Sales and marketing
General and administrative		$ 7,432,784		$ 13,408,891
Depreciation and amortization		1,928,392		3,936,606
Total cost and operating expenses		10,189,757		19,157,542
INCOME / (LOSS) FROM OPERATIONS		(3,277,989)		(5,765,921)
OTHER INCOME (EXPENSE)
Interest income		29,545		57,156
Interest expense		(333,214)		(635,158)
Interest expense related to debt discount and conversion feature		(1,025,292)		(1,910,032)
Changes in fair value of warrant liabilities		$ 38,948		(171,324)
Loss on extinguishment of debt				(426)
Other income and (expense)		$ 68,008		71,398
Amortization of deferred financing costs		(113,090)		(249,457)
Total other income (expense)		(1,335,095)		(2,837,843)
INCOME / (LOSS) BEFORE (BENEFIT) PROVISION FOR INCOME TAXES		(4,613,084)		(8,603,764)
(Benefit) / provision for income taxes		(2,209)		133,228
NET INCOME / (LOSS)		(4,610,875)		(8,736,992)
OTHER COMPREHENSIVE INCOME / (LOSS) INCOME
Foreign currency translation (loss)		(148,233)		(150,452)
COMPREHENSIVE INCOME / (LOSS)		$ (4,759,108)		$ (8,887,444)
Net income / (loss) per common share and equivalents - basic and diluted		$ (0.03)		$ (0.06)
Weighted average shares outstanding during the period - basic and diluted		146,482,547		144,130,543
Restatement adjustments/Re-classifications
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS [Abstract]
REVENUES		$ (1,839,328)		$ (2,934,916)
COST AND OPERATING EXPENSES
Cost of service (excluding depreciation and amortization)		1,020,107		1,672,614
Product development		2,280,532		3,992,349
Sales and marketing		664,807		1,228,642
General and administrative		$ (3,965,446)		$ (6,893,605)
Depreciation and amortization
Total cost and operating expenses
INCOME / (LOSS) FROM OPERATIONS		$ (1,839,328)		$ (2,934,916)
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)
INCOME / (LOSS) BEFORE (BENEFIT) PROVISION FOR INCOME TAXES		$ (1,839,328)		$ (2,934,916)
(Benefit) / provision for income taxes
NET INCOME / (LOSS)		$ (1,839,328)		$ (2,934,916)
OTHER COMPREHENSIVE INCOME / (LOSS) INCOME
Foreign currency translation (loss)
COMPREHENSIVE INCOME / (LOSS)		$ (1,839,328)		$ (2,934,916)
Net income / (loss) per common share and equivalents - basic and diluted
Weighted average shares outstanding during the period - basic and diluted

Restatement (CONSOLIDATED STA44

Restatement (CONSOLIDATED STATEMENTS OF CASH FLOWS) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income / (loss)			$ 7,396,745	$ (11,671,908)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	$ 1,745,034	$ 1,928,392	3,491,181	3,936,606
Provision for doubtful accounts			25,414	18,865
Stock-based compensation			1,584,323	2,674,261
Change in the fair value of the warrant liability	(149,203)	(38,948)	(395,905)	171,324
Amortization of deferred financing costs			425,347	249,457
Interest expense relating to debt discount and conversion feature	403,679	$ 1,025,292	467,651	1,910,032
Unrealized foreign currency translation gain/(loss)			1,036,018	(71,398)
(Gain) / 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			4,305,466	(1,914,324)
Decrease (increase) in prepaid expenses, deposits and other assets			1,100,067	(346,129)
Increase (decrease) in accounts payable, proceeds from related parties and customer deposits			2,027,904	210,932
Increase (decrease) in deferred revenue			(8,889,549)	2,537,091
Increase (decrease) in accrued expenses and other payables			(740,868)	1,909,830
Net cash provided by (used in) operating activities			10,295,830	(384,935)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment			(4,113,308)	(3,922,724)
Net cash used in investing activities			(4,113,308)	(3,922,724)
CASH FLOWS FROM FINANCING ACTIVITIES:
Financing related fees			(67,445)	(90,000)
Exercise of warrants & options			5,861	4,283,033
Net cash (used in) provided by financing activities			(7,988,917)	4,193,033
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS			1,134,760	(308,301)
NET (DECREASE) IN CASH AND CASH EQUIVALENTS			(671,635)	(422,927)
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD			1,904,160	1,252,315
CASH AND CASH EQUIVALENTS, END OF THE PERIOD	$ 1,232,525	$ 829,388	$ 1,232,525	829,388
As previously reported [Member]
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income / (loss)				(8,736,992)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		1,928,392		3,936,606
Provision for doubtful accounts				18,865
Stock-based compensation				2,674,261
Change in the fair value of the warrant liability		(38,948)		171,324
Amortization of deferred financing costs				249,457
Interest expense relating to debt discount and conversion feature		$ 1,025,292		1,910,032
Unrealized foreign currency translation gain/(loss)				(71,398)
(Gain) / Loss on Extinguishment of Debt				426
Changes in operating assets and liabilities, net of acquired assets and assumed liabilities:
Decrease (increase) in accounts receivable				(2,329,143)
Decrease (increase) in prepaid expenses, deposits and other assets				(346,129)
Increase (decrease) in accounts payable, proceeds from related parties and customer deposits				210,932
Increase (decrease) in deferred revenue				16,994
Increase (decrease) in accrued expenses and other payables				1,910,256
Net cash provided by (used in) operating activities				(384,935)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment				(3,922,724)
Net cash used in investing activities				(3,922,724)
CASH FLOWS FROM FINANCING ACTIVITIES:
Financing related fees				(90,000)
Exercise of warrants & options				4,283,033
Net cash (used in) provided by financing activities				4,193,033
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS				(308,301)
NET (DECREASE) IN CASH AND CASH EQUIVALENTS				(422,927)
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD				1,252,315
CASH AND CASH EQUIVALENTS, END OF THE PERIOD		$ 829,388		829,388
Restatement change [Member]
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income / (loss)				$ (2,934,916)
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)
(Gain) / Loss on Extinguishment of Debt
Changes in operating assets and liabilities, net of acquired assets and assumed liabilities:
Decrease (increase) in accounts receivable				$ 414,819
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				$ 2,552,097
Increase (decrease) in accrued expenses and other payables
Net cash provided by (used in) 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 (used in) provided by financing activities
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS
NET (DECREASE) 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:
(Gain) / Loss on Extinguishment of Debt				$ 426
Changes in operating assets and liabilities, net of acquired assets and assumed liabilities:
Decrease (increase) in accounts receivable				2,076,250
Increase (decrease) in deferred revenue				$ 5,011,166

Subsequent Events (Details)

Subsequent Events (Details) - USD ($) $ / shares in Units, shares in Millions	Jul. 09, 2015	Jul. 31, 2015	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Subsequent Event [Line Items]
Principal payment on 2014 10% libor 3rd Party Loan			$ 9,927,333
Term Loan 2014 [Member]
Subsequent Event [Line Items]
Amount of facility			$ 12,600,000
Loan payable, interest rate spread			10.00%		10.00%
Debt instrument, principal amount			$ 2,072,669		$ 12,000,000
Repayments			10,100,000
Prepayment of debt			5,500,000
Reduction in principal			$ 4,427,333
Subsequent Event [Member]
Subsequent Event [Line Items]
Amount of facility	$ 6,500,000
Potential decrease in rate	(0.50%)
Loan payable, interest rate spread	11.00%
Repayments of debt	$ 5,700,000
Proceeds from agreement		$ 4,500,000
Subsequent Event [Member] | 30-Month-Term Warrant [Member]
Subsequent Event [Line Items]
Number of shares covered by warrants	2
Term of warrant	30 months
Per share price, in excess of bid price	$ 0.02
Exercise/ Conversion price(s) (range)	0.38
Share Price	$ 0.36
Subsequent Event [Member] | 18-Month-Term Warrant [Member]
Subsequent Event [Line Items]
Number of shares covered by warrants	1
Term of warrant	18 months
Per share price, in excess of bid price	$ 0.02
Exercise/ Conversion price(s) (range)	0.38
Share Price	$ 0.36