SCHIPHOL, THE NETHERLANDS--(Marketwire -08/01/12)- Elephant Talk Communications, Corp. (ETAK) (www.elephanttalk.com), an international provider of software and services developed to manage network, billing and systems infrastructure for the telecommunication industry and a market leader in providing solutions to counter electronic fraud for the financial services industry, today announced total revenue of $7.1 million for the second quarter ended June 30, 2012. Revenue for the higher margin mobile and security solutions business increased 193.2% year-over-year to $2.8 million in the second quarter of 2012.
Revenue from mobile and security solutions accounted for 39.3% of total revenue for second quarter ended June 30, 2012 compared to 12.2% for the three months ending June 30, 2011. Revenue minus Cost of Service (further referred to as 'margin') for the second quarter ended June 30, 2012 increased 541.2% year-over-year to $1.9 million, 26.8% of total revenue, compared to $0.3 million, 3.8% of revenue, for the three months ending June 30, 2011. The increase in margin was primarily attributable to the increased revenue contribution from the higher-margin mobile and security solutions business.
"We are excited about the numerous milestone achievements Elephant Talk accomplished in the second quarter," said Steven van der Velden, Chairman and Chief Executive Officer of Elephant Talk Communications. "We successfully surpassed one million active mobile subscribers on our platform in Spain, signed our first large contract in Germany that we expect to generate revenue of over $30 million over its initial two year period, and ValidSoft began providing a SIM swap fraud solution to one of the World's largest banks."
Key Operational Highlights for Second Quarter 2012
- World's First SIM Swap Solution for Banking Industry - ValidSoft, in partnership with Adeptra, a global leader in the business of automated, fully interactive consumer communications, began providing a SIM swap fraud solution to one of the World's largest banks
- Contract with large German MVNO - The contract, expected to generate at least $30 million of mobile revenue over the initial two-year contract period, began contributing revenue to the Company in July 2012 and based on the planned rollout and a 1 EUR to 1.21 USD exchange rate is expected to generate approximately $8.0 million of total revenue for 2012. Approximately half of this mobile revenue will be recognized on the Company's income statement during 2012, with approximately 50% recorded as deferred revenue on its balance sheet to be recognized over the 24 month life of each activated SIM
- Spain Surpasses One Million Active Mobile Subscribers Level - Elephant Talk passed the one million subscriber level on the Vodafone Spain network
- Utiba Global Partnership - ValidSoft's SMART™ (Secure Mobile Architecture for Real-time Transactions) to be integrated into Utiba's market leading suite of mobile financial services
- ValidSoft European Privacy Seal Renewed - The privacy seal for VALid-POS, a telecom-based security solution designed to combat card transaction fraud at ATMs or points of sale (POS), was renewed until 2014
- Spindle & SOCURE Partnerships - ValidSoft signed partnership agreements with Spindle, US-based provider of mobile commerce and alternative payment solutions for merchants and consumers, and SOCURE, a US-based provider of applications that protect the identity and reputation of users across social networks
- Russell Global Index - Began trading in the index during the quarter
Financial Results for the Second Quarter and Six Months Ended June 30, 2012
For the three months ended June 30, 2012, total revenue was $7.1 million, a decrease of $0.7 million or 9.1% year-over-year, compared to $7.8 million for the three months ending June 30, 2011. A $1.8 million, or 193.2%, year-over-year increase in the Company's high margin mobile and security solutions business was offset by a $2.5 million, or 37.1%, year-over-year decline in the lower margin legacy landline business. The decrease in total revenue was the result of reporting currency translation effects. When adjusted for these currency effects, total revenue increased 2.3% year-over-year. On a constant currency basis, mobile and security revenue increased 233% year-over-year while the landline revenue decreased 29.3% year-over-year. To determine the revenue growth rates on a constant currency basis revenue from entities reporting in non-U.S. dollars were translated into U.S. dollars using the average exchange rates over the six months ended June 30, 2012. The same exchange rates are used for the six month period ended June 30, 2011.
Contributing to the year-over-year growth of our higher margin mobile and security solutions revenue in the second quarter were the migration of a customer with a large consumer base in the 4th quarter of 2011, higher revenue from existing mobile customers and the implementation of ValidSoft SIM Swap solution by one of the World's largest financial institutions under our Adeptra partnership. Contributing to the decline of landline revenue was the Company's decision to terminate a landline contract due to its limited contribution to the Company's margin and the global trend of communication moving to mobile and wireless platforms.
"We expect to report our fifth consecutive quarter of quarter-over-quarter growth in our mobile and security revenue on a reported and constant currency basis when we report third quarter results later this year and we believe we are on track to achieve our first month whereby the Company's margin (defined as revenues minus cost of service) should be sufficient to cover operational cash outflow, not including non-cash expenses and capital expenditures by the end of 2012, or the beginning of 2013," stated Mark Nije, Chief Financial Officer of Elephant Talk Communications. "Growth will be driven by our German contract, the migration in early July of an additional 100,000 mobile users from a mobile virtual network operator in Spain and ValidSoft's further roll-out of its SIM swap fraud and other prevention solutions."
Total revenue for the six months ended June 30, 2012 was $15.7 million, a decrease of 3.9% year-over-year when compared to $16.3 million for the six months ending June 30, 2011. The decrease in total revenue was the result of reporting currency translation effects. When adjusted for these effects, total revenue increased 3.8% year-over-year on a constant currency basis for the first six month of 2012 when compared to the year earlier period.
For the six months ended June 30, 2012, mobile and security revenue increased 111.8% year-over-year and landline revenue declined 24.3% year-over-year when compared to the same period a year earlier. When adjusting for currency translation effects, mobile and security revenue increased 128.9% year-over-year and landline revenue decreased 18.3% year-over-year when compared to the first six months of 2011.
Cost of service for the three months ended June 30, 2012 was $5.2 million, a decrease of $2.3 million, or 30.8%, compared to $7.5 million for the three months ending June 30, 2011. This decrease is fully related to the decline in landline revenue.
Margin improved to 26.8% for the second quarter of 2012 compared to 3.8% in the same period a year earlier.
The following tables summarize the Company's quarterly mobile and security revenue and Elephant Talk's total margin since 2Q11. Mobile and security revenue increased as a percentage of total Company revenue to 39.3% in the second quarter of 2012 from 12.2% in the prior year period.
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Mobile and Security
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Quarter Reported Revenue $ in millions % of Total Company Revenue
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Q211 0.9 12.2
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Q311 1.4 18.1
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Q411 1.9 23.5
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Q112 2.4 28.3
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Q212 2.8 39.3
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Total margin as a percentage of total Company revenue increased to 26.8% in the second quarter of 2012 from 3.8% in the prior year period.
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Total Company Margin*
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Quarter Margin $ in millions % of Total Company Revenue
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Q211 0.3 3.8
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Q311 0.8 10.3
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Q411 1.5 18.0
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Q112 1.7 19.7
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Q212 1.9 26.8
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* Revenues minus Cost of Service
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Selling, general and administrative ("SG&A") expense for the three months ended June 30, 2012 and 2011 were $4.6 million and $3.8 million, respectively. SG&A expenses increased $0.7 million, or 19.4%, in the three months ending June 30, 2012 when compared to the same period in 2011. Higher year-over-year SG&A expenses in the second quarter of 2012 were mainly the result of a 22.2% year-over-year increase in staffing levels, largely European (mobile and security) hires, as well as higher investor relations and sales, marketing & communication related staffing and expenses.
Adjusted EBITDA (a non-GAAP measure) improved to a loss of $2.7 million for the period ending June 30, 2012 from a loss of $3.5 million in the three months ended June 30, 2011. Adjusted EBITDA improved $0.2 million quarter-over-quarter for the quarter ended June 30, 2012.
The tables at the end of this press release include a reconciliation of net loss to non-GAAP Adjusted EBITDA for the three and six months ended June 30, 2012 and 2011. An explanation of this along with constant currency comparisons and margin, are also included below under the heading "Non-GAAP Financial Measures."
Net Loss was $5.0 million and $6.7 million for the three months ended June 30, 2012 and 2011, respectively. The $1.7 million improvement in net loss for the quarter was driven by a $1.5 million decrease in the loss from operations and a $0.2 million improvement in other income. Net loss improved $1.0 million quarter-over-quarter for the second quarter of 2012.
Conference Call Reminder
As a reminder, Elephant Talk Communications will host a Shareholder Update Conference Call on August 1, 2012 at 11:00 a.m. (EDT). Anyone interested in participating should dial 1-480-629-9713 approximately 5 to 10 minutes prior to the start of the call. Participants should ask for the Elephant Talk Shareholder Update conference call. To listen to the playback please utilize the webcast by visiting the company's website at www.elephanttalk.com.
This call is being webcast by ViaVid Broadcasting and can be accessed at either Elephant Talk's website at www.elephanttalk.com or ViaVid's website at http://www.viavid.net. To access the webcast, you will need to have the Windows Media Player on your desktop. For the free download of the Media Player, please visit: http://www.microsoft.com/windows/windowsmedia/en/download/default.asp
Non-GAAP Financial Measures
To supplement the consolidated financial statements presented in accordance with generally accepted accounting principles, or GAAP, Elephant Talk uses measures of non-GAAP Adjusted EBITDA, constant currency and margin. A reconciliation of the non-GAAP financial measures Adjusted EBITDA and constant currency to the closest GAAP financial measure, is presented in the financial table below under the heading "Reconciliation of Non-GAAP Measures to GAAP." Margin is derived from the income statements by subtracting cost of service from revenues. Elephant Talk believes that the non-GAAP financial information provided in this release can assist investors in understanding and assessing Elephant Talk's on-going core operations and prospects for the future and provides an additional tool for investors to use in comparing Elephant Talk's financial results with other companies in Elephant Talk's industry, many of which present similar non-GAAP financial measures to investors. In addition, Elephant Talk believes that these non-GAAP financial measures are useful to investors because they allow for greater transparency into the indicators used by management as a basis for its internal budgeting and operational decision making.
In order to provide investors additional information regarding our financial results, we are disclosing Adjusted EBITDA, a non-GAAP financial measure. We employ Adjusted EBITDA for several purposes, including as a measure of our operating performance. We use Adjusted EBITDA because it removes the impact of items not directly resulting from our core operations, thus allowing us to better assess whether the elements of our growth strategy are yielding the desired results. Accordingly, we believe that Adjusted EBITDA provides useful information for investors and others, which allows them to better understand and evaluate our operating results.
For the three and six months ended June 30, 2012 and 2011, non-GAAP Adjusted EBITDA is defined as earnings before derivative accounting, such as warrant liabilities and conversion feature expensing, income taxes, depreciation and amortization and stock-based compensation. It is determined by taking net loss and adding back provision for income taxes, interest income and expense, net loss attributable to non-controlling interest, depreciation and amortization, stock-based compensation expense, other income and expenses, and equity in earnings of unconsolidated joint venture.
Elephant Talk believes these adjustments provide useful information to both management and investors due to the following factors:
- Stock-based compensation. Although stock-based compensation is an important aspect of the compensation of Elephant Talk's employees and executives, determining the fair value of the stock-based instruments involves a high degree of judgment and estimation and the expense recorded may bear little resemblance to the actual value realized upon the future exercise or termination of the related stock-based awards. Furthermore, unlike cash compensation, the value of stock-based compensation is determined using a complex formula that incorporates factors, such as market volatility, that are beyond Elephant Talk's control. Management believes it is useful to exclude stock-based compensation in order to better understand the long-term performance of Elephant Talk's core business and to facilitate comparison of its results to those of peer companies.
To determine the revenue growth rates on a constant currency basis for the three and six months ended June 30, 2012, revenue from entities reporting in non-U.S. dollars were translated into U.S. dollars using the average exchange rates over the six months ended June 30, 2012. The same exchange rates are used in the income statement of the six months ended June 30, 2011.
The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant elements that are required by GAAP to be recorded in Elephant Talk's financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management in determining these non-GAAP financial measures. In order to compensate for these limitations, management of Elephant Talk presents its non-GAAP financial measures in connection with its GAAP results. Investors are encouraged to review the reconciliation of our non-GAAP financial measures to their most directly comparable GAAP financial measure. As previously mentioned, a reconciliation of our historic non-GAAP financial measures to their most directly comparable GAAP measures has been provided below.
About Elephant Talk Communications
Elephant Talk Communications Corp. (ETAK) (www.elephanttalk.com) is an international provider of software and services developed to manage network, billing and systems infrastructure for the telecommunications industry and a market leader in providing solutions to counter electronic fraud for the financial services industry. The Company enables both mobile carriers and virtual operators to offer a full suite of products, delivery platforms, support services, superior industry expertise and high quality customer service without substantial upfront investments from clients. Elephant Talk provides global telecommunication companies, mobile network operators, banks, supermarkets, consumer product companies, media firms, and other businesses a full suite of products and services that enables them to fully provide telecom services as part of their business offerings. The Company offers various dynamic products that include remote health care, credit card fraud prevention, mobile internet ID security, multi-country discounted phone services, loyalty management services, and a whole range of other emerging customized mobile services. For more information, visit (www.elephanttalk.com).
About ValidSoft
ValidSoft is a subsidiary of Elephant Talk Communications Corp. (ETAK) (www.elephanttalk.com) and is a market leader in providing solutions to counter electronic fraud relating to card, the internet, and telephone channels. ValidSoft's solutions are at the cutting edge of the market and are used to verify the authenticity of both parties to a transaction (Mutual Authentication), and the integrity of the transaction itself (Transaction Verification) for the mass market, in a highly cost effective and secure manner, yet easy to use and intuitive. For more information, please visit (www.validsoft.com).
Forward-Looking Statements
Certain statements contained herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, without limitation, statements with respect to the Company's plans and objectives, projections, expectations and intentions. These forward-looking statements are based on current expectations, estimates and projections about the Company's industry, management's beliefs and certain assumptions made by management. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Because such statements involve risks and uncertainties, the actual results and performance of the Company may differ materially from the results expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Unless otherwise required by law, the Company also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made here. Additional information concerning certain risks and uncertainties that could cause actual results to differ materially from that projected or suggested is contained in the Company's filings with the Securities and Exchange Commission (SEC), copies of which are available from the SEC or may be obtained upon request from the Company.
ELEPHANT TALK COMMUNICATIONS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
For the Three Months For the Six Months
Period ended June 30, Period ended June 30,
-------------------------- --------------------------
2012 2011 2012 2011
------------ ------------ ------------ ------------
REVENUES $ 7,084,969 $ 7,790,976 $ 15,665,937 $ 16,298,990
COST AND OPERATING
EXPENSES
Cost of service 5,185,048 7,494,679 12,074,265 15,052,164
Selling, general and
administrative
expenses 4,565,181 3,824,756 9,135,139 7,241,113
Non-cash compensation
to officers,
directors and
employees 1,538,982 2,037,903 3,230,728 3,167,966
Depreciation and
amortization of
intangibles assets 1,224,888 1,337,775 2,503,357 2,640,450
------------ ------------ ------------ ------------
Total cost and
operating expenses 12,514,099 14,695,113 26,943,489 28,101,693
LOSS FROM OPERATIONS (5,429,130) (6,904,137) (11,277,552) (11,802,703)
Interest income 174,756 24,145 279,918 47,131
Interest expense,
amortization of
discount and
financing costs (836,580) (71,511) (938,847) (138,275)
Other income &
(expense) - 230,000 - 460,000
Change in fair value
of conversion
feature 1,226,417 - 1,230,086 -
------------ ------------ ------------ ------------
Total other
income (expense) 564,593 182,634 571,157 368,856
LOSS BEFORE PROVISION
FOR INCOME TAXES (4,864,537) (6,721,503) (10,706,395) (11,433,847)
Provision for income
taxes (97,288) - (97,288) (800)
------------ ------------ ------------ ------------
NET LOSS BEFORE
NONCONTROLLING
INTEREST (4,961,825) (6,721,503) (10,803,683) (11,434,647)
Net (loss) income
attributable to non-
controlling interest - 80 -
Equity in earnings of
unconsolidated joint
venture (29,084) - (192,415) -
------------ ------------ ------------ ------------
NET LOSS (4,990,909) (6,721,423) (10,996,098) (11,434,647)
OTHER COMPREHENSIVE
(LOSS) INCOME
Foreign currency
translation gain
(loss) (1,779,477) 938,039 (909,694) 3,257,603
------------ ------------ ------------ ------------
(1,779,477) 938,039 (909,694) 3,257,603
COMPREHENSIVE LOSS $ (6,770,386) $ (5,783,384) $(11,905,792) $ (8,177,044)
============ ============ ============ ============
Net loss per common
share and
equivalents - basic
and diluted $ (0.04) $ (0.07) $ (0.10) $ (0.12)
============ ============ ============ ============
Weighted average
shares outstanding
during the period -
basic and diluted 111,167,932 100,467,832 110,912,231 98,264,677
============ ============ ============ ============
Non-GAAP Financial Measures
Elephant Talk Communication Corp.
Reconciliation of Net Loss to Adjusted EBITDA, reported and constant
currency
Six months ended June 30,
----------------------------------------
2011 in
constant
EBITDA Adjusted 2012 2011 currency
------------ ------------ ------------
Net loss $(10,996,098) (11,434,647) (10,656,167)
Provision for income taxes 97,288 800 800
Depreciation and amortization 2,503,357 2,640,450 2,457,599
Stock-based compensation 3,230,728 3,167,966 3,130,325
Other income & expenses (571,157) (368,856) (371,572)
Equity in earnings of
unconsolidated joint venture 192,415 0 0
------------ ------------ ------------
Adjusted EBITDA $ (5,543,467) (5,994,287) (5,439,015)
============ ============ ============
Three months ended June 30,
----------------------------------------
2011 in
constant
EBITDA Adjusted 2012 2011 currency
------------ ------------ ------------
Net loss $ (4,990,909) $ (6,721,423) $ (6,066,364)
Provision for income taxes 97,288 0 0
Net loss attributable to non-
controlling interest 0 (80) (80)
Depreciation and amortization 1,224,888 1,337,775 1,215,660
Stock-based compensation 1,538,982 2,037,903 2,008,209
Other income & expenses (564,593) (182,634) (185,192)
Equity in earnings of
unconsolidated joint venture 29,084 0 0
------------ ------------ ------------
Adjusted EBITDA $ (2,665,260) $ (3,528,459) $ (3,027,767)
============ ============ ============
Elephant Talk Communications Corp.
Reconciliation of non-GAAP Revenue to GAAP Revenue
Three months ended June 30, Six months ended June 30,
% %
2012 2011 change 2012 2011 change
---------- ---------- ------ ----------- ----------- ------
(unaudited) (unaudited)
Constant
currency
reconciliation:
Total revenue,
as reported $7,084,969 $7,790,976 -9.1% $15,665,937 $16,298,990 -3.9%
Estimated
impact of
foreign
currency
fluctuations 11.4% 7.7%
Total revenue
constant
currency
growth rate 2.3% 3.8%
Three months ended June 30, Six months ended June 30,
% %
2012 2011 change 2012 2011 change
---------- ---------- ------ ----------- ----------- ------
(unaudited) (unaudited)
Constant
currency
reconciliation:
Landline
revenue, as
reported $4,301,249 $6,841,552 -37.1% $10,454,510 $13,838,887 -24.5%
Estimated
impact of
foreign
currency
fluctuations 7.8% 6.1%
Landline
revenue
constant
currency
growth rate -29.3% -18.4%
Three months ended June 30, Six months ended June 30,
% %
2012 2011 change 2012 2011 change
---------- ---------- ------ ----------- ----------- ------
(unaudited) (unaudited)
Constant
currency
reconciliation:
Mobile &
Security
revenue, as
reported $2,783,720 $ 949,424 193.2% $ 5,211,427 $ 2,460,103 111.8%
Estimated
impact of
foreign
currency
fluctuations 39.8% 17.1%
Mobile &
Security
revenue
constant
currency
growth rate 233.0% 128.9%
ELEPHANT TALK COMMUNICATIONS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2012 2011
------------- -------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 4,051,777 $ 6,009,576
Financing receivables - -
Restricted cash 2,613,083 190,844
Accounts receivable, net of an allowance for
doubtful accounts of $546,238 and $436,546 at
June 30, 2012 and December 31, 2011
respectively 5,676,402 6,441,528
Prepaid expenses and other current assets 1,809,532 1,522,461
------------- -------------
Total current assets 14,150,794 14,164,409
OTHER ASSETS 1,878,125 1,392,837
DUE FROM RELATED PARTIES 1,002,153 -
PROPERTY AND EQUIPMENT, NET 13,103,226 13,315,687
INTANGIBLE ASSETS, NET 11,434,099 12,784,199
GOODWILL 3,062,285 3,154,971
------------- -------------
TOTAL ASSETS $ 44,630,682 $ 44,812,103
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Overdraft $ 330,647 $ 312,236
Accounts payable and customer deposits 4,475,427 4,490,455
Deferred Revenue 140,556 132,467
Accrued expenses and other payables 3,758,081 3,035,758
8% Convertible Note 363,799 -
Loans payable 962,319 960,869
------------- -------------
Total current liabilities 10,030,829 8,931,785
LONG TERM LIABILITIES
8% Convertible Note 5,104,116 -
Conversion feature 1,469,226 -
Trade note payable 165,074 271,915
Loan from joint venture partner 534,181 513,303
------------- -------------
Total long term liabilities 7,272,597 785,218
------------- -------------
Total liabilities 17,303,426 9,717,003
------------- -------------
STOCKHOLDERS' EQUITY
Common stock, no par value, 250,000,000 shares
authorized, 111,240,995 issued and
outstanding as of June 30, 2012 compared to
110,525,229 shares issued and outstanding as
of December 31, 2011 220,331,381 216,188,899
Accumulated other comprehensive income (loss) (2,052,989) (1,143,295)
Accumulated deficit (191,124,469) (180,128,371)
------------- -------------
Elephant Talk Communications Corp.
stockholders' equity 27,153,923 34,917,233
------------- -------------
NON-CONTROLLING INTEREST 173,333 177,867
------------- -------------
Total stockholders' equity 27,327,256 35,095,100
------------- -------------
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 44,630,682 $ 44,812,103
============= =============
ELEPHANT TALK COMMUNICATIONS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
June 30, 2012 June 30, 2011
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (10,996,098) $ (11,434,647)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 2,503,357 2,640,450
Provision for doubtful accounts 115,684 (26,465)
Non-cash compensation 3,230,728 2,881,617
Equity in earnings of joint venture 192,415 -
Amortization of shares issued for
consultancy - 286,349
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable 492,139 (1,188,582)
Increase in prepaid expenses, deposits and
other assets (320,444) (2,409,125)
Increase in accounts payable, proceeds
from related parties and customer
deposits 2,339 1,835,548
Increase in deferred revenue 11,250 396,484
Increase in accrued expenses and other
payables 686,173 987,048
------------- -------------
Net cash used in operating activities (4,082,457) (6,031,323)
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (1,616,811) (5,754,894)
Restricted cash (2,439,408) 24
Loans to related party (1,011,265) -
Loans to joint venture partners (63,447) -
Loan to third party (216,970) -
------------- -------------
Net cash used in investing activities (5,347,901) (5,754,870)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Bank overdraft - (9,285)
Deferred financing costs (446,000) -
Proceeds from 8% convertible note, net of
original issue discount 8,000,000 -
Payments on 8% convertible note
installment payments and interest (388,358) -
Proceeds from loan from related party - 19,277
Proceeds from exercise of warrants &
options 742,130 13,587,674
Payments for share issue costs (13,643) -
------------- -------------
Net cash provided by financing activities 7,894,129 13,597,666
------------- -------------
EFFECT OF EXCHANGE RATES ON CASH AND CASH
EQUIVALENTS (421,570) 595,012
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (1,957,799) 2,406,485
CASH AND CASH EQUIVALENTS, BEGINNING OF THE
PERIOD 6,009,576 2,245,697
------------- -------------
CASH AND CASH EQUIVALENTS, END OF THE PERIOD $ 4,051,777 $ 4,652,182
============= =============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the period for interest $ 118,358 $ -
------------- -------------
UK/Europe:
Fishburn Hedges
+44 (0)20 7839 4321
Email Contact
US/North America:
Jed Hamilton
Intermarket Communications
+1 212 754 5479
Email Contact
Investor Relations Contacts
Steve Gersten
Elephant Talk Communications
+1 813-926-8920
Email Contact
Peter Salkowski
The Blueshirt Group
+1 415 489 2184
Email Contact
