Elephant Talk Obtains NYSE MKT LLC Acceptance Of Compliance Plan
September 13, 2016
NEW YORK, Sept. 13, 2016 /PRNewswire/ -- Elephant Talk Communications Corp. (NYSE MKT: ETAK) ("ET" or the "Company"), a leading international provider of mobile networking software and services, today announced that the NYSE MKT LLC (the "Exchange") has issued a determination accepting the Company's August 19, 2016, plan of compliance, as amended, and granted the Company a conditional plan period through December 31, 2016, as described below.
On September 7, 2016, the Company received a notice from the Exchange indicating that the Company is not currently in compliance with the Exchange's continued listing standards as set forth in Section 1003(a)(ii) of the NYSE MKT Company Guide (the "Company Guide"), since the Company's reported stockholders' equity as of June 30, 2016 is $2.5 million and the Company has net losses in its last five most recent fiscal years ended December 31, 2015. Notwithstanding such notice, the Exchange also informed the Company that it had reviewed the Company's August 19, 2016 plan of compliance, as amended, and determined to accept the plan and grant a conditional plan period through December 31, 2016. The Exchange has indicated that it will formally review the Company at the end of each month to ensure that it has demonstrated progress and achieved the milestones set forth in the plan. If the Company is not in compliance with the continued listing standards by December 31, 2016 or if the Company does not make progress consistent with the plan during the plan period, the Exchange may initiate delisting proceedings as appropriate. The Company may appeal a staff delisting determination in accordance with Section 1010 and Part 12 of the Company Guide.
The Company also announced that on September 2, 2016 it has initially sold 73 shares of Series A Preferred Stock for aggregate gross proceeds of $729,968, before deducting commissions and other estimated offering expenses, in an private placement offering of Series A Preferred Stock, par value $0.00001 per share (the "Series A Preferred Stock"), to "accredited investors" (as defined in Rule 501(a) of the Securities Act of 1933, as amended, the "Securities Act") (the "Investors"). The Series A Preferred Stock was offered and sold pursuant to an exemption from registration under Section 4(a)(2) and Regulation D of the Securities Act. For more information, please refer to the Company's 8k which has been filed with the SEC and is available on the SEC's website located at sec.gov.
"We are pleased with the Exchange's acceptance of our plan to regain compliance through December 31, 2016. Both the management team and Board of Directors are committed to restoring full compliance within this timeframe. We are aggressively implementing the final phase of our restructuring which includes securing new investment capital and further headcount reduction, which has resulted in the company nearing its breakeven operations point," said Hal Turner, Executive Chairman of Elephant Talk. "The sale of our Series A Preferred stock is an important first step in our capital plan and will provide much-needed working capital as we complete our restructuring and drive new revenue growth. We confirm that payrolls for July and August have been met for our go-forward, post restructured team," he added.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.