Elephant Talk Communications Corp. (NYSE MKT: ETAK) said it has received a USD500,000 advance, structured in the form of a loan, which, upon completion of due diligence by the potential buyer of ValidSoft Limited, the company´s wholly owned subsidiary, such funds may be applied towards the final purchase price of ValidSoft.
In addition to the principal amount of USD500,000, the company may receive an additional USD1,500,000 advance from the potential buyer. In the event ValidSoft Limited is sold to the potential buyer, the aggregate loan of USD2,000,000 shall be applied toward the purchase price to be paid.
In the event the potential buyer does not fund the additional USD1,500,000 by January 25, 2016, the company shall convert the initial USD500,000 received to an unsecured subordinated convertible promissory note, which will be convertible into shares of common stock of the company at USD0.30 per share as well as a five-year warrant to purchase additional common shares of the company at USD0.45, subject to certain exceptions.
There is no assurance that the company will consummate the proposed transaction with the potential buyer for ValidSoft Limited or receive the additional USD1,500,000 loan from such buyer.
Elephant Talk Communications is a global provider of mobile proprietary Software Defined Network Architecture (ET Software DNAÂ® 2.0) platforms for the telecommunications industry. The company empowers Mobile Network Operators (MNOs), Mobile Virtual Network Operators (MVNOs), Enablers (MVNEs) and Aggregators (MVNAs) with a full suite of applications, reliable industry expertise and high quality customer service without the need for substantial upfront investment.
ValidSoft, a subsidiary of Elephant Talk Communications Corp., secures transactions using personal authentication and device assurance.