Elephant Talk Communications Corp. (NYSE MKT: ETAK) has signed a binding letter agreement with Cross River Initiatives LLC to divest ValidSoft for a total consideration of USD12.5 million, the company said.
On January 19, 2016, a USD500,000 advance was paid to ET, by Cross River, for their proposed purchase of ValidSoft. Cross River will wire transfer USD8 million to ET no later than March 21, 2016, and will issue a USD4 million short-term secured note in favor of ET for the balance of the purchase price.
Cross River has agreed to assume all actual working capital and general business expenses of ValidSoft. Any and all working capital payments will be non-refundable in the event that the Transaction fails to close before 21 March 2016 (or at all) for reasons attributable to Cross River´s failure to adhere to the terms of the binding letter agreement, in which case such cash will likewise be rolled into ET´s PIPE placement.
Elephant Talk Communications has developed a proprietary software and telecoms platform to provide cloud-based mobile network solutions to Communications Services Providers (MNOs, MVNOs), Enterprise, Government/Education Organizations, Application/Content and Retail Providers.
ValidSoft, a subsidiary of Elephant Talk Communications Corp., secures transactions using personal authentication and device assurance.