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Executing on its strategy to enter the United States telecommunications
market, Elephant Talk Communications, Corp.
(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
plans to acquire 100% of the assets of Telnicity, LLC, a U.S. MVNE/MVNO
enabler company headquartered in Oklahoma City, Oklahoma in an all-equity
transaction.
(Logo: http://photos.prnewswire.com/prnh/20120917/MM75872LOGO)
(Logo: http://photos.prnewswire.com/prnh/20120917/MM75492LOGO)
According to the acquisition agreement between Elephant Talk and Telnicity,
which is subject to certain closing conditions and based on the closing price
of Elephant Talk stock on January 8, 2013, the transaction value is
approximately $1 million, with Elephant Talk issuing 1 million shares of
common stock at closing. The shares will be subject to a lock-up agreement
restricting sale or disposition of the shares for 18 months. The terms of the
acquisition agreement also provides for a bonus arrangement applicable when
revenue minus cost of sales is in excess of $1.00 per customer per month and
payable once the cash flow from the Telnicity business is sufficient to cover
the payments. The transaction is expected to close on or before March 8,
2013.
"We will work on a seamless and efficient global platform for MNO's, MVNE's,
and MVNO's to operate by taking advantage of the technologies of both
companies," said Steven van der Velden, Chairman and Chief Executive Officer
of Elephant Talk Communications. "Telnicity's relationships with several North
American based telecommunications companies provide a head start for the
launch of Elephant Talk's services into the U.S. mobile telecommunication
market. In addition, Telnicity's existing customer base will be able to
leverage Elephant Talk's technology and telecommunications relationships to
offer more complete international calling and roaming packages."
According to the terms of the acquisition agreement, Elephant Talk will
acquire all of the assets of Telnicity, LLC, a U.S. MVNE/MVNO enabler company
including the company's existing customer contracts, carrier agreements, and
access to telSPACE and mCASH, Telnicity's propriety turnkey back office
infrastructure and billing systems. Telnicity's 6 full-time equivalent
employees will remain in their current positions.
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