SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ELEPHANT TALK COMMUNICATIONS, INC.
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(Exact name of Registrant as specified in its charter)
CALIFORNIA 95-2210753
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
438 E. Katella Avenue, Suite 217, Orange, California 92867
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(Address of Principal Executive Offices, including ZIP Code)
Consulting Fee Agreements with Nils A. Ollquist
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("Consultants")
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(Full title of the plan)
Russelle Choi, 438 E. Katella Avenue, Suite 217, Orange, California 92867
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(Name and address of agent for service)
(714) 288-1570
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(Telephone number, including area code, of agent for service)
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CALCULATION OF REGISTRATION FEE
Title of Securities Amount of Shares Proposed Maximum Proposed Maximum
to be Registered to be Registered Offering Aggregate Offering Registration
Price Per Share(1) Price(1) Fee
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$.01 par value
Common Stock 900,000 $0.27 $243,000.00 $22.36
(1) This calculation is made solely for the purposes of determining the
registration fee pursuant to the provisions of Rule 457 under the Securities Act
and is calculated on the basis of the price at which the securities are to be
offered to the public.
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PROSPECTUS
ELEPHANT TALK COMMUNICATIONS, INC.
438 E. Katella Avenue, Suite 217, Orange, California 92867
(714) 288-1570
900,000 SHARES OF COMMON STOCK
This Prospectus relates to the offer and sale by Elephant Talk Communications,
Inc., a California corporation ("ElephantTalk"), of shares of its common shares,
zero par value, ("Common Stock") to certain consultants and advisors (the
"Consultants") pursuant to option agreements entered into between the Company
and the Consultants for payment of services to be rendered. ElephantTalk is
registering hereunder and then issuing, upon receipt of adequate consideration
therefore, to the Consultants 900,000 shares of Common Stock underlying certain
stock options in consideration for services to be performed under the respective
agreements.
The Common Stock is not subject to any restriction on transferability.
Recipients of shares other than persons who are "affiliates" of ElephantTalk
within the meaning of the Securities Act of 1933 (the "Act") may sell all or
part of the shares in any way permitted by law, including sales in the
over-the-counter market at prices prevailing at the time of such sale. Of the
shares registered hereunder, no shares are being registered to an affiliate of
ElephantTalk. An affiliate is summarily, any director, executive officer or
controlling shareholder of ElephantTalk or anyone of its subsidiaries. An
"affiliate" of ElephantTalk is subject to Section 16(b) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). If a Consultant who is
not now an "affiliate" becomes an "affiliate" of the ElephantTalk in the future,
he would then be subject to Section 16(b) of the Exchange Act.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is August 5, 2003.
This Prospectus is part of a Registration Statement which was filed and became
effective under the Securities Act of 1933, as amended (the "Securities Act"),
and does not contain all of the information set forth in the Registration
Statement, certain portions of which have been omitted pursuant to the rules and
regulations promulgated by the U.S. Securities and Exchange Commission (the
"Commission") under the Securities Act. The statements in this Prospectus as to
the contents of any contracts or other documents filed as an exhibit to either
the Registration Statement or other filings by ElephantTalk with the Commission
are qualified in their entirety by the reference thereto.
A copy of any document or part thereof incorporated by reference in this
Prospectus but not delivered herewith will be furnished without charge upon
written or oral request. Requests should be addressed to: Elephant Talk
Communications, Inc., 438 E. Katella Avenue, Suite 217, Orange, California
92867. Tel No. (714) 288-1570.
ElephantTalk is subject to the reporting requirements of the Exchange Act and in
accordance therewith files reports and other information with the Commission.
These reports, as well as the proxy statements, information statements and other
information filed by ElephantTalk under the Exchange Act may be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W. Washington D.C. 20549. Copies may be obtained at the
prescribed rates. ElephantTalk's stock has been traded on the over-the-counter
market since March 20, 2000 and is currently reported by the National Quotation
Bureau Electronic Bulletin Board.
No person has been authorized to give any information or to make any
representation, other than those contained in this Prospectus, and, if given or
made, such other information or representation must not be relied upon as having
been authorized by ElephantTalk. This Prospectus does not constitute an offer or
a solicitation by anyone in any state in which such is not authorized or in
which the person making such is not qualified or to any person to whom it is
unlawful to make an offer or solicitation.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create any implication that there has not been a change in
the affairs of ElephantTalk since the date hereof.
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TABLE OF CONTENTS
PART I. Information Required in the Section 10(a) Prospectus 6
Item 1. Plan Information 6
General Information 6
The Company 6
Purposes 6
Common Stock 6
The Consultants 6
No Restrictions on Transfer 6
Tax Treatment to the Consultants 6
Tax Treatment to ElephantTalk 7
Restrictions on Re-sales 7
Documents Incorporated by Reference and Additional Information 7
Item 2. Registrant Information and Employee Plan Annual Information 7
Legal Opinion and Experts 8
Indemnification of Officers and Directors 8
PART II. Information Required in the Registration Statement 9
Item 3. Incorporation of Documents by Reference 9
Item 4. Description of Securities 9
Item 5. Interests of Named Experts and Counsel 9
Item 6. Indemnification of Directors and Officers 9
Item 7. Exemption from Registration Claimed 10
Item 8. Exhibits 10
Item 9. Undertakings 10
Signatures . . . . . . . 12
Exhibit Index . . . . . 13
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PART I: INFORMATION REQUIRED IN THE SECTION 10(a)
PROSPECTUS
Item 1. Plan Information
GENERAL INFORMATION
The Company
ElephantTalk has its principal executive offices at 438 E. Katella Avenue, Suite
217, Orange, California 92867, where its telephone number is (714) 288-1570.
Purposes
The Common Stock to be issued by ElephantTalk to certain Consultants will be
issued pursuant to consulting agreements entered into between Consultants and
ElephantTalk for payment of services rendered, which the agreements have been
approved by the Board of Directors of ElephantTalk (the "Board of Directors").
ElephantTalk is registering hereunder and then issuing, upon receipt of adequate
consideration therefor, to the Consultants 900,000 shares of Common Stock in
consideration for services to be performed under the respective agreements.
Common Stock
The Board has authorized the issuance of up to 900,000 shares of the Common
Stock to the Consultants upon effectiveness of this Registration Statement.
The Consultants
The Consultants have agreed to provide their expertise and advice to
ElephantTalk for the purposes set forth in their agreements with ElephantTalk.
No Restrictions on Transfer
The Consultants will become the record and beneficial owners of the shares of
Common Stock upon issuance and delivery, and are entitled to all of the rights
of ownership, including the right to vote any shares awarded and to receive
ordinary cash dividends on the Common Stock.
Tax Treatment to the Consultants
The Common Stock is not qualified under Section 401(a) of the Internal Revenue
Code. The Consultants, therefore, will be required for federal income tax
purposes to recognize ordinary income during the taxable year in which the first
of the following events occurs: (a) the shares become freely transferable, or
(b) the shares cease to be subject to a substantial risk of forfeiture.
Accordingly, absent a specific contractual provision to the contrary the
Consultants will receive compensation taxable at ordinary rates equal to the
fair market value of the shares on the date of receipt since there will be no
substantial risk of forfeiture or other restrictions on transfer. If, however,
the Consultants receive shares of common stock pursuant to the exercise of an
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option or options at an exercise price below the fair market value of the shares
on the date of exercise, the difference between the exercise price and the fair
market value of the stock on the date of exercise will be deemed ordinary income
for federal income tax purposes. The Consultants are urged to consult each of
their tax advisors on this matter. Further, if any recipient is an "affiliate,"
Section 16(b) of the Exchange Act is applicable and will affect the issue of
taxation.
Tax Treatment to ElephantTalk
The amount of income recognized by any recipient hereunder in accordance with
the foregoing discussion will be an expense deductible by ElephantTalk for
federal income tax purposes in the taxable year of ElephantTalk during which the
recipient recognizes income.
Restrictions on Re-sales
In the event that an affiliate of ElephantTalk acquires shares of Common Stock
hereunder, the affiliate will be subject to Section 16(b) of the Exchange Act.
Further, in the event that any affiliate acquiring shares hereunder has sold or
sells any shares of Common Stock in the six months preceding or following the
receipt of shares hereunder, any so called "profit", as computed under Section
16(b) of the Exchange Act, would be required to be disgorged from the recipient
to ElephantTalk. Services rendered have been recognized as valid consideration
for the "purchase" of shares in connection with the "profit" computation under
Section 16(b) of the Exchange Act. ElephantTalk has agreed that for the purpose
of any "profit" computation under 16(b) the price paid for ElephantTalk's Common
Stock issued hereunder to affiliates is equal to the value of services rendered.
Shares of ElephantTalk's Common Stock acquired hereunder by persons other than
affiliates are not subject to Section 16(b) of the Exchange Act.
DOCUMENTS INCORPORATED BY REFERENCE AND ADDITIONAL INFORMATION
ElephantTalk hereby incorporates by reference (i) its annual report on Form
10-KSB for the year ended December 31, 2002, filed pursuant to Section 13 of the
Exchange Act, (ii) any and all Quarterly Reports and Current Reports on Forms
10-Q (or 10-QSB or 8-K) filed under the Securities or Exchange Act subsequent to
the filing of ElephantTalk's Annual Report on Form 10-K (or 10-KSB) for the
fiscal year ended December 31, 2002, as well as all other reports filed under
Section 13 of the Exchange Act, and (iii) its annual report, if any, to
shareholders delivered pursuant to Rule 14a-3 of the Exchange Act. In addition,
all further documents filed by ElephantTalk pursuant to Section 13, 14, or 15(d)
of the Exchange Act prior to the termination of this offering are deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing. All documents which when together, constitute this Prospectus,
will be sent or given to participants by the Registrant as specified by Rule
428(b)(1) of the Securities Act.
Item 2. Registrant Information and Employee Plan Annual Information
A copy of any document or part thereof incorporated by reference in this
Registration Statement but not delivered with this Prospectus or any document
required to be delivered pursuant to Rule 428(b) under the Securities Act will
be furnished without charge upon written or oral request. Requests should be
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addressed to: Elephant Talk Communications, Inc., 438 E. Katella Avenue, Suite
217, Orange, California 92867. Tel: (714) 288-1570.
Legal Opinion and Experts
John A. Furutani, Attorney at Law, has rendered an opinion on the validity of
the securities being registered. Mr. Furutani is not an "affiliate" of
ElephantTalk. Mr. Furutani currently owns 54,950 shares of ElephantTalk's common
stock.
The consolidated financial statements of Elephant Talk Communications, Inc.
incorporated by reference in this Prospectus for the year ended December 31,
2002, have been audited by Kabani & Company, Inc., independent certified public
accountants, as set forth in their report incorporated herein by reference, and
are incorporated herein in reliance upon such report given upon the authority of
said firm as experts in auditing and accounting.
Indemnification of Officers and Directors
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of registrant
pursuant to the foregoing provisions, or otherwise, registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by registrant of expenses
incurred or paid by a director, officer or controlling person of registrant in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification is against public policy
as expressed in the Act and will be governed by the final adjudication of such
issue.
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PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
Registrant hereby states that (i) all documents set forth in (a) through (c)
below, are incorporated by reference in this registration statement, and (ii)
all documents subsequently filed by registrant pursuant to Section 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934, as amended, prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which de-registers all securities then remaining unsold, shall
be deemed to be incorporated by reference in this registration statement and to
be a part hereof from the date of filing of such documents.
(a) Registrant's latest Annual Report, whether filed pursuant to Section
13(a) or 15(d) of the Exchange Act;
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by annual report referred
to in (a), above; and
(c) The latest prospectus filed pursuant to Rule 424(b) under the Securities
Act.
Item 4. Description of Securities
No description of the class of securities (i.e. no par value Common Stock) is
required under this item because the Common Stock is registered under Section 12
of the Exchange Act.
Item 5. Interests of Named Experts and Counsel
Mr. Furutani currently own 54,950 shares of ElephantTalk's common stock.
Item 6. Indemnification of Directors and Officers
Article VII, Section 1 of ElephantTalk's Bylaws limit the liability of any
officer or Director and permit ElephantTalk to indemnify its directors and
officers as follows:
No officer or Director shall be personally liable for any obligations of the
corporation or for any duties or obligations arising out of any acts or conduct
of said officer or director performed for or on behalf of the corporation. The
corporation shall and does hereby indemnify and hold harmless each person and
his heirs and administrators who shall serve at any time hereafter as a Director
or officer of the corporation from and against any and all claims, judgments and
liabilities to which such persons shall become subject by reason of his having
heretofore or hereafter been a Director or officer of the corporation or by
reason of any action alleged to have been heretofore or hereafter taken or
omitted to have been taken by him as such Director or officer, and shall
reimburse each such person for all legal and all other expenses reasonably
incurred by him in connection with any such claim or liability, including power
to defend such person from all suits or claims as provided for under the
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provisions of the California corporation's code; provided, however, that no such
person shall be indemnified against, or be reimbursed for, any expense incurred
in connection with any claim or liability arising out of his own negligence or
willful misconduct. The rights accruing to any person under the foregoing
provisions of this section shall not exclude any right to which he may lawfully
be entitled, nor shall anything herein contained restrict the right of the
corporation to indemnify or reimburse such person in any proper case, even
though not specifically herein provided for. The corporation, its directors,
officers, Consultants and agents shall be fully protected in taking any action
or making any payment, or in refusing so to do in reliance upon the advice of
counsel.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
(a) The following exhibits are filed as part of this registration statement
pursuant to Item 601 of Regulation S-B and are specifically incorporated herein
by this reference:
Exhibit No. Title
5 Opinion of John A. Furutani regarding the legality of the securities
registered.
23.1 Consent of John A. Furutani, special counsel to registrant, to the use
of his opinion with respect to the legality of the securities being
registered hereby and to the references to him in the Prospectus filed
as a part hereof.
23.2 Consent of Kabani & Company, Inc., independent auditors of registrant.
Item 9. Undertakings
The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to:
(i) include any prospectus required by Section 10 (a) (3) of the
Securities Act;
(ii) reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represents a fundamental change in the information set
forth in the registration statement;
(iii) include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
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provided, however, paragraphs (i) and (ii) shall not apply if the information
required to be included in a post-effective amendment by those paragraphs are
incorporated by reference from periodic reports filed by the registrant small
business issuer under the Exchange Act.
(2) That, for the purpose of determining any liability under the Securities Act,
each post-effective amendment to the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(4) To deliver or cause to be delivered with the prospectus, to each person to
whom the prospectus is sent or given, the latest annual report to security
holders that is incorporated by reference in the prospectus and furnished
pursuant to and meeting the requirements of Rule 14a-3 or Rule 14e-3 under the
Securities Exchange Act of 1934; and, where interim financial information
require to be presented by Article 3 of Regulation S-X is not set forth in the
prospectus, to deliver, or cause to be delivered to each person to whom the
prospectus is sent or given, the latest quarterly report that is specifically
incorporated by reference in the prospectus to provide such interim financial
information.
Registrant hereby undertakes that, for purposes of determining any liability
under the Securities Act of 1933, each filing of registrant's annual report
pursuant to Section 13(a) of the Securities Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned thereunto duly
authorized in Hong Kong, China on the 5th day of August 2003.
Elephant Talk Communications, Inc.
(Registrant)
By: /s/ Russelle Choi
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Russelle Choi, Chairman
Pursuant to the requirements of the 1933 Act, this registration statement or
amendment has been signed by the following persons in the capacities and on the
dates indicated:
Signatures Title Date
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Mr. Russelle Choi Director August 5, 2003
Mr. Manu Ohri Director August 5, 2003
Mr. Thomas Wong Director August 5, 2003
Mr. Ken Ieong Director August 5, 2003
Mr. Pius Lam Director August 5, 2003
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FORM S-8 REGISTRATION STATEMENT
EXHIBIT INDEX
The following Exhibits are filed as part of this registration statement pursuant
to Item 601 of Regulation S-B and are specifically incorporated herein by this
reference:
Exhibit No.
in Registration
Statement Description
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5.1 Opinion of John A. Furutani regarding the legality of
the securities registered.
23.1 Consent of John A. Furutani, special counsel to
registrant, to the use of his opinion with respect to
the legality of the securities being registered hereby
and to the references to him in the Prospectus filed as
a part hereof.
23.2 Consent of Kabani & Company, Inc., independent auditors
of registrant.
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