Elephant Talk, Inc. (OTCBB:ETAK)

Dear StockUpTicks Reader:

Today's featured company, Elephant Talk Communications, Inc., is a true global company with operations in a dozen markets in Europe, Asia Pacific, and the Middle East. Its customers are a virtual who's-who in the telecom sector including such notable entities as T-Mobile, Vodafone and British Telecom, to mention just a few.

Elephant Talk's technology allows mobile phone companies to operate "virtually" on its wireless and telephony services platform. These customers, called Mobile Virtual Network Operators ("MVNO's"), represent a fast-growing segment of the telecom market operating under various brands and consumer applications.  Its Mobile Virtual Network Enabler ("MVNE") platform provides all the necessary lines, towers, spectrum and software infrastructure to enable any company to enter the cell phone service business on a turnkey basis.

• Elephant Talk expects to have 12 fully operational MVNO's by the end of this year, together creating monthly revenues for ETAK of at least $ 1.0 million with a healthy margin.
• The Company is currently involved in negotiations for additional MVNE platforms in 3 European markets to be installed over the next 12 months. 

About Elephant Talk

Elephant Talk Communications, Inc. (OTCBB: ETAK), has uniquely positioned itself, with its proprietary technology, to become one of the world’s best telecom and enabler/ system operators to the multimedia industry by facilitating the distribution of all forms of content, as well as mobile and fixed-line telecom services, in the business-to-business global telecommunications’ industry. Its multi-national customers include such  global companies as: T-Mobile (part of Deutsche Telecom), Dutch Telecom, Vodafone (the largest shareholder in Verizon U.S.A.),  and British Telecom, to name just a few.

  Elephant Talk Communications provides traditional telecom services, media streaming, and distribution services primarily to the business-to-business (B2B) community within the telecommunications market where it has a presence. 
The Company's global footprint as a fully licensed carrier, supported by its propriety IN (Intelligent Network) and Billing/CRM (Client Relationship Management) Systems, has been designed to offer cutting-edge solutions to the increasingly competitive global multimedia industry. 

Elephant Talk's telecommunications platform eliminates the usual limitations caused by national borders, networks, devices or media and, therefore, enables its B2B customers to operate as independent telecom and multimedia distribution organizations. Elephant Talk is also a developer for mobile telecom and content distribution solutions; and, as a Mobile Virtual Network Enabler (MVNE), the company has positioned itself as the premier outsourcing partner for both Mobile Network Operators (MNO's) and for Mobile Virtual Network Operators (MVNO's). At the same time, Elephant Talk assists its MNO partners to more efficiently provide a broad range of sophisticated services to their own existing base of MVNO's. Elephant Talk is positioning itself as the preferred MVNE partner of the larger, global Mobile Operators and currently operates sophisticated networks in over a dozen markets in Europe, Asia Pacific, and the Middle East. The Company was ranked fifth on the Orange County 2008 Deloitte Technology Fast 50. For more information, visit: elephanttalk.com.
 

** BREAKING NEWS ** Elephant Talk Communications Provides Guidance for  New Netherlands & Spain Agreements --- $6 Million of New Revenue for Q3 & Q4 of 2009 --- Growing to $24 Million of Additional Revenue in 2010 --- Gross Margins Expected to Reach 40% SCHIPHOL, Netherlands, July 13, 2009 /PRNewswire-FirstCall via COMTEX/ -- Elephant Talk Communications, Inc. (OTC Bulletin Board: ETAK), an international telecom and multimedia content distributor, specializing in carrier grade mobile delivery platforms, today announced revenue guidance pertaining to contracts recently signed in the Netherlands and Spain. These agreements are expected to generate revenues in excess of $6 million in the 2nd half of 2009 and over $24 million in 2010. The contracts are a result of Elephant Talk's relationships with Vizzavi Espana, a Vodafone Group Company, and T-Mobile Netherlands B.V and represent a new revenue stream for the Company above the trailing twelve months revenue of approximately $42 million. View the entire news release HERE

View all of ETAK's Recent News HERE<<<Spacer>>>

Operational and Financial Highlights

KEY OPERATIONAL HIGHLIGHTS:

• Entered into a letter of intent to acquire controlling interest in ValidSoft Limited. ValidSoft is an emerging global leader in preventing electronic bank theft, credit card fraud, and identity theft.
• Through its proprietary software, ValidSoft provides strong mobile authentication, transaction verification capabilities and location based services. ValidSoft's software allows organizations to quickly implement solutions that protect against the latest sophisticated fraud.
• The Company internally funded and implemented a state of the art wireless and converging telephony services platform that enables mobile phone companies to operate on its platform. These customers are called Mobile Virtual Network Operators ("MVNO's") and represent a fast growing segment of the telecom industry and differentiate themselves through branding and client oriented applications such as pre-paid phone services and specific content.
• Elephant Talk's wireless platform called a Mobile Virtual Network Enabler ("MVNE") provides all the necessary lines, towers, spectrum and software infrastructure to enable any company to enter the cell phone service business on a turnkey basis. Our MVNE contract with T-Mobile in the Netherlands became operational in September 2008; currently 2 rapidly growing MVNO's are active on our Dutch MVNE platform with at least 3 more contracted that should become operational in the course of the second quarter of 2009.
• In September 2008 Vizzavi Espana, a Vodafone Group Company, rewarded ETAK with a contract to manage their Spanish MVNE platform;
• Final contracts are expected to be signed at the end of April 2009.
• The first MVNO will go operational in 2009, soon to be followed by additional MVNO's.
• Elephant Talk expects to have 12 fully operational MVNO's by the end of this year, together creating monthly revenues for ETAK of at least $ 1.0 million with a healthy margin.
• The Company is currently involved in negotiations for additional MVNE platforms in 3 European markets to be installed over the next 12 months. 
<<<Spacer>>>
KEY FINANCIAL HIGHLIGHTS:
Comparison for fiscal year ended December 31, 2008 versus December 31, 2007
 
• Revenue recorded was $44,359,007 and $47,361,028 for the years ended December 31, 2008 and 2007, respectively.
• The decrease in the revenue, is due to repositioning the focus of the company more towards new mobile services. Revenue consisted of fixed line telecommunications services such as premium rate, carrier select, carrier pre-select, Freephone (toll free) and pre-paid calling cards services provided to a wide range of customers.
• Cost of service was $43,336,111 and $45,608,557 for the years ended December 31, 2008.
• Cost of service include origination, termination, network and billing charges from telecommunications operators, out payment costs to content and information providers, network costs, data centre costs, facility cost of hosting network and equipment and cost in providing resale arrangements with long distance service providers, cost of leasing transmission facilities and international gateway switches for voice and data transmission services.
• The Company recorded a net loss of $16.0 million and $12.1 million for the year ended December 31, 2008 and 2007 respectively.
• The increase in net loss was primarily due to a significant increase in Operational Expenditures for the development of the new Mobile Services Platform of the company and an impairment charge of almost $ 4 million to intangible assets.
• Current liabilities decreased to $10.0 million from $34.1 million compared with December 31, 2007.
• Current ratio of assets to liabilities improved from .27 to 1 to .83 to 1 compared with December 31, 2007.
• Shareholders Equity improved from ($9.7) million to $8.8 million for an improvement of $18.6 million compared with December 31, 2007.

Entry into the Multi-Billion Dollar I.D. Theft / Credit Card Fraud Prevention Market

In March 2009 Elephant Talk announced that it had entered into a letter of intent to acquire controlling interest in ValidSoft Limited. ValidSoft is an emerging global leader in preventing electronic bank theft, credit card fraud, and identity theft. Through its proprietary software, ValidSoft provides strong mobile authentication, transaction verification capabilities and location based services. ValidSoft's software allows organizations to quickly implement solutions that protect against the latest sophisticated fraud.

The strategic transaction will combine ValidSoft's best in class proprietary software with Elephant Talk's telecommunication platform to create the best electronic fraud prevention total solution on the market. ValidSoft's patent pending software is primarily based on accurately detecting real time electronic fraud while minimizing false positives detection. A false positive causes many legitimate transactions to be denied which results in a leading reason for customer dissatisfaction with the card issuing bank. Since ValidSoft can accurately detect electronic fraud, and eliminate up to 95% of false positives, the software offers card issuing banks significant operational cost savings, high customer satisfaction, greater customer protection, higher transaction completion and significantly reduced fraud.

ValidSoft is a real-time, risk-based, Out-of-Band Multi-factor Authentication and Transaction Verification platform with solutions designed to help prevent fraud across a variety of transaction types and channels including: Card Present (ATM/POS), Card Not Present, Internet Banking, Telephone Banking, Mobile Financial Services, Extranet, VPN, Remote Access, Business Continuity. The Company provides a real-time, cost effective solution for banks, online buyers and regulatory agencies in securing all financial transactions, while greatly reducing operational costs.

ValidSoft provides products and services designed to meet the needs of organisations operating in dynamic business environments where e-channel
applications provide competitive advantage. The demands of today's business environment have increased dramatically in recent years, driven by technologies
such as the Internet, card, e-Business and the penetration of mobile phone technology into all aspects of business. ValidSoft solutions provide
Strong Authentication and Transaction Verification capabilities allowing organisations to quickly implement solutions that protect against the latest
sophisticated fraud and are yet simple and convenient for users.
 
 

ValidSoft's focus is strongly product driven through various product offerings, including:

    * VALid which is a risk-based, Out-of-band Multi-factor Authentication and Transaction Verification platform designed for use across
      multiple electronic channels including Internet, Phone Banking (IVR), Call Centre, VPN and Extranet.

    * VALid-POS dramatically alters the way cross-border card-present fraud is detected and resolved, providing massive savings
      from reducing both false-positives and actual fraud losses anomaly detection

Elephant Talk Products and Services

Elephant Talk is the supplier of choice of all telecommunications and content services for the B-2-B customer. The company’s global footprint, Intelligent Network and content management services have been designed to offer cutting edge solutions to the increasingly competitive global multimedia industry.

By combining fixed line and wireless access services through contractual arrangements with an unrestricted number of first/last mile telecom providers, Elephant Talk is able to offer innovative Mobile, Content, VoIP and Media Streaming as well as more traditional telecom services including: Carrier (Pre) Select, Premium Rate, Shared Cost and Toll Free Services.

All operations are backed up by Elephant Talk’s state-of-the-art in-house CRM/billing system ensuring proper support and reliable data reports for our customers. Elephant Talk therefore offers the ideal platform for the B-2-B customer who wishes to operate cost efficiently as an independent global telecom and multi media distribution organization.

Elephant Talk is an international telecom operator for fixed and mobile solutions. As a system integrator ETAK provides comprehensive telecommunication and white label services in Europe, Middle East, Far East and United States. 

Products and services:

Mobile Solutions
full MVNE with its own integrated mobile service platforms, switches and international network for back-office and customer interactive solutions.

Premium Rate Services
for easy payment solution for paid content, data services, interactive & value added services over fixed and mobile devices as well as over the internet.

Media Phone
advanced internet and mobile VoIP Soft Phone and Content Engine. 

Streaming
high quality streaming of video and audio for the internet and mobile phone.

Carrier (Pre) Select:
call routing over Elephant Talk’s own international network at very competitive end-user rates.

Two Stage Dialing
facilitates access to our international carrier network from any non-nominated telephone, fixed as well as mobile.
 

ET Media Phone

The ET-Media Phone is an integrated PC application

The Media Phone is an advanced telecommunication soft phone and content distribution engine. The Distribution of content driven services to end-users via PC, laptop, fixed telephone or mobile device is made possible by a proprietary software interface. The device is not only ideal for a useful all-round communication device for the end consumer, but is also can be put to work as a marketing tool by the B-2-B customer. 

Video Streaming

Streaming Technology
 

High quality streaming Elephant Talk provides high quality streaming of video and audio for the internet and mobile phones. Its Streaming facility is based on a newly developed compression technology that is applied specifically for encoding and transmitting video via any standard mobile telephone communication protocol including: GSM, GPRS, EDGE, UMTS, HSDPA, CDMA, WCDMA.

Low bandwidth streaming  At less quality live stream is also possible via analogue modems in including ISDN, double ISDN, Cable, xDSL, Wi-Fi, Wimax and LAN. The technology allows Elephant Talk’s customers to not only offer services to broadband users, but to reach the vast market of low bandwidth end-users as well. Events streaming ET-Stream’s unique Codec can be used for live streaming of events such as concerts, sports, etc. Its lowest stream is based on 22Kb (16Kb for video and 6Kb for audio).

Management Team

Steven van der Velden (Chairman & CEO)
Steven van der Velden, Chairman & CEO, has extensive entrepreneurial experience in logistics, telecommunications, e-commerce and investment management. He successfully started over a dozen companies. Mr. van der Velden is involved in various ICT ventures throughout Europe, North America, the Far East and Caribbean. He co-founded E-commerce Park NV in Curacao, which developed a 50,000 sq.ft. data centre and Internet hosting facility, the International Telemedia Association (known today as Network for Online Commerce), and InTouch Telecom SA/NV, where he served as CEO until the company was successfully sold to GTS in 1999. He earned his MBA from Rotterdam School of Management and his Master's Degree in Law from Leiden University.

Financial Highlights

<<<Spacer>>>

Market Data	2008 FYE 12/31/08
Symbol	ETAK
Exchange	OTC BB
52-week range	$0.15 - $2.00
Recent Price (07/13/09)	$0.90
Shares Outstanding	53.7M as of March 31, 2009
Public Float (approx)	12.5M shares
Insider Ownership	76% as of March 31, 2009
Market Cap. (approx)	$51M as of 7/10/09
Revenue (2008 annual)	$44.3M
Cash	$1.65M
Shareholder Equity	$8.8M
Average 3mo Volume	3,817
Source:	Yahoo Finance

View ETAK's SEC filings HERE

Company Contacts

Elephant Talk Communications, Inc.
Schiphol Boulevard 249
Schiphol 1118 BH 
Netherlands
Phone: 011-31-20-6541015 
Fax: 011-31-20-6535916 

Steven van der Velden, CEO 
Email: steven.vandervelden@elephanttalk.com 
Website: www.elephanttalk.com 
 

---

***Bull or Bear***
There may never be a better time to feature YOUR company
to over 1 MILLION investors.

To learn more about our programs email us directly at info@stockupticks.com

Market Pathways
17595 Harvard Ave., Suite C519 Irvine, CA  92614
949-955-0107

Disclaimer: StockUpTicks.com is a property of Market Pathways Financial Relations Incorporated (MP).  The information, opinions and analysis contained herein are based on sources believed to be reliable but no representation, expressed or implied, is made as to its accuracy, completeness or correctness. Past performance is no guarantee of future results. This report is a paid advertisement and is for information purposes only and should not be used as the basis for any investment decision.  MP was paid ten thousand dollars by OTC Global LLC in April of 2009 on behalf of this company and others for preparation and distribution of this report and other advertising services. This constitutes a conflict of interest as to MP’s ability to remain objective in its communication regarding the subject company.  Write or call MP for detailed disclosure as required by Rule 17b of the Securities Act of 1933/1934.  MP is not an investment advisor and this report is not investment advice. This information is neither a solicitation to buy nor an offer to sell securities but is a paid advertisement.  Information contained herein contains forward-looking statements and is subject to significant risks and uncertainties, which will affect the results.  The opinions contained herein reflect our current judgment and are subject to change without notice. MP and/or its affiliates, associates and employees from time to time may have either a long or short position in securities mentioned.  Information contained herein may not be reproduced in whole or in part without the express written consent of Market Pathways Financial Relations Incorporated.