Hello Shareholders and Friends of Elephant Talk Communications, Corp. (NYSE MKT: ETAK formerly NYSE Amex: ETAK
There has been quite a bit of information in the last few weeks and this update will provide the latest Company news, articles and other key information that will help our shareholders continue to gain a better understanding of Elephant Talk and ValidSoft successes and what it means for the company going forward.
Elephant Talk announced one of their most important contracts in the company’s history recently, valued at 30-40 Million Dollars over the next 2 years, when our acquisition of the assets of Ensercom and the relationship with Telekom Deutschland and one of the largest MVNO’s in Germany, the Union of German Police immediately allowed us to Expand our Mobile Services into Germany, the largest mobile market in Europe. This deal was completed in under 60 days from the time of the acquisition, which showcases the stability and strength of our technology.
On the ValidSoft front, it was announced with our partner Adeptra, that we closed and have gone live, with one of the largest global banks (Top 5) for the World’s first SIM swap fraud solution for the banking industry.
Both these contracts were picked up worldwide by many media outlets which provided strong coverage for these very important milestones in the company’s history. As you will find below, there are many updates and articles discussing the recent achievements of the company.
On June 18, 2012 we announced that Elephant Talk is set to join the Russell Global Index. (See release below.)
Frequently Asked Questions (FAQ’s)
- The most commonly asked questions are about some of our recent contracts and the shelf registration. We will give our shareholders an understanding why it is management’s belief that business is firing on all fronts as explained below.
- As for the bank deal it was originally expected to go live before Christmas, but due to administrative issues the contract was signed in February and the bank went live in April, after an unprecedented 2 month period from the signing and final testing. A press release went out with Adeptra announcing the World’s First SIM Swap Fraud Solution for the Banking Industry. This is a major milestone and the integration with the bank and Adeptra have gone so well that we are confident that this contract will prove out to be the launch for many other banks in the future to use all the solutions from ValidSoft through the Adeptra platform. We are very excited about the relationship with Adeptra and the ongoing success with this first bank contract.
- The announcement of Utiba partnering with ValidSoft is very strategic and brings our advanced security to the emerging arena of mobile payments and mobile financial services solutions. What makes this announcement so unique and important is that Utiba chose ValidSoft. We are the new kid on the block and our technology is the clear winner in regards to product, solutions, culture and roadmap. Richard Matotek, Co-CEO of Utiba, commented, “As mobile commerce takes off around the globe, we are very aware of the importance of security for the success of any offering. As we look to deploy sophisticated financial services solutions under our Converging Payments strategy, ValidSoft is a natural choice for us. We feel ValidSoft’s advanced mobile payments authentication platform (SMART™) delivers proven, real-time and user-friendly authentication that is ideally suited for mobile payments, and we are delighted to announce this partnership with them to deliver the most sophisticated and secure mobile financial services in the world.” And Pat Carroll, CEO of ValidSoft, added, “We’re particularly excited about this partnership with Utiba because of the scale at which Utiba operates. Utiba processes 12 billion mobile commerce transactions annually, and has processed over 3 billion so far this year. This is a huge technology win for ValidSoft and now we can focus on integration and commercialization with Utiba. Expectations is that we will launch the solution with Utiba sometime in the second half of 2012. Utiba Americas and Utiba also announced that they expect to be present in 14 countries in the Americas including the United States and Canada by the end of 2013, serving a potential market of over 600 million mobile and internet users and a population of over 900 million people. In the press release Utiba mentions two partners involved in their expansion– ValidSoft and MasterCard. (See Utiba press release below)
- The announcement of Spindle partnering up with ValidSoft also showcases that after analyzing the market, they also chose ValidSoft. If you take a good look at the technology and patents that Spindle has to offer and the strength and history of its management team, you can clearly determine that the potential of this relationship has large upside in the emerging markets of mobile payments and mobile financial services. “Spindle offers customers a patented solution and approach to mobile and alternative commerce,” said Bill Clark, president of Spindle. Mr. Clark continued, “With global mobile payments transactions projected to rise to $945 billion in 2015, and mobile payment users to rise to 893.3million, Spindle continues to seek best in breed international partners for this emerging mobile community.” “Maintaining the security and privacy of customer data has been—and will continue to be— Spindle’s highest priority,” said Clark. “Our relationship with ValidSoft enables us to integrate a ‘best-in-class’ payments-specific layered authentication and security solution that is seamless, transparent, and above all, highly effective. The integration of ValidSoft’s SMART into the RhinoVerify solution will further differentiate Spindle’s solutions in a burgeoning marketplace and we expect to be live in the second half of 2012.” “This is a strong technical win for ValidSoft, which provides further validation of our advanced security capabilities in the mobile payments arena and gives ValidSoft the ability to greatly expand our company’s presence in the United States, stated Pat Carroll.” Once again, our technology was the clear winner in regards to product, solutions, culture and roadmap.
- The acquisition of the assets of Ensercom was questioned by all, but produced in under 60 days a very important deal for Elephant Talk. In this short period of time the company was able to integrate its own platform, ET-Boss on top of the Ensercom platform and forge ahead with an agreement with Telekom Deutschland, the German operating company of Deutsche Telekom and the Union of German Police (“GdP”). The contract is anticipated to provide $30-40 million in revenue to Elephant Talk over the initial 2 year contract period and in the future this project has the potential for further roll-outs to more of GdP’s 130,000+ mobile users. Under the contract Elephant Talk will deliver its mobile services, including SIM-Cards, Airtime and a variety of Service Options, based on its carrier grade Mobile Virtual Network Enabling Platform including CRM, Billing Solutions and Online Self-service portals. This shows the strength of the Elephant talk Platform that will allow Telekom Deutschland to offer specific services to this MVNO (Union of German Police) and the MVNO community at a much lower cost to the MNO (Telekom Deutschland) while maintaining margins and with the ability to outsource these services through Elephant Talk’s carrier grade Platform. Steven van der Velden, CEO of Elephant Talk stated, “The size and scope of this contract materially impacts our financial results over the next two years. We are very pleased with the closing of this contract in just a short time after entering the German market via our recent acquisition of the assets of Ensercom. Since Germany is Europe’s largest telecom market, we believe this project provides validation that our world class platform and services are being adopted by the largest names in the industry and coupled with our integration of Ensercom, should lead to additional contracts in the German marketplace. Elephant Talk's efforts to expand its business are expected to increase both revenue and earnings throughout 2012. We believe that the adoption of our platform in Germany will allow us to forge relationships with additional new customers, secure new contract awards, enter new markets, increase earnings, and improve shareholder value." Here is another deal where our technology and the capability to integrate in such a quick timeframe brought Elephant Talk Shareholders one of their most important contracts to date.
- As we move forward with one of our longest relationships, Vodafone, business is progressing well on that front as well. Late last year we announced the migration of 600 thousand SIM Cards from Vodafone to our platform in Spain. This is considered the largest migration of its kind, which also did not provide any downtime to their customers during the migration. Over the last 6 months the cost savings to Vodafone has been substantial, as we provide to their customers excellent flexibility in the products and services. Vodafone gave testimony at one of the largest MVNO Industry Summits in Brazil on May 29 about the case study of the success of the Elephant Talk partnership and products. More information about that summit will follow. We are in talks with Vodafone and other parties to grow the MVNO business around the world.
- On May 29, 2012 Elephant Talk Communications Corp. filed a “shelf registration” allowing the potential issuance of up to $75 million of securities. If securities are sold under the shelf registration, the net proceeds of the shelf registration could be used for general corporate purposes, future acquisitions and capital expenditures to enhance shareholder value. This type of shelf registrations are very common in NYSE and NASDAQ listed companies. It gives management after the shelf is approved the ability to issue registered securities and to use if necessary to raise capital over a 3 year time period. This will shorten the process of going out on the street and doing a standard type of raise and road show, which normally utilizes an enormous amount of management’s time. The advantage is that the availability is there to raise the money by issuing registered securities if management and the board approve its use. By using a shelf registration, the firm can fulfill all registration-related procedures beforehand and go to market quickly when conditions become more favorable or when specific events occur. This is a very positive opportunity as the money can be used for expanding into new markets around the world. In our last conference call we discussed expansion into the Americas and we will need to build infrastructure to provide our services.
As you can see, we have progressed well on all fronts and we are very excited about the future of our company.
Press Releases and Articles:
- The link below is a press release dated June 18, 2012 announcing that Elephant Talk is set to join the Russell Global Index when Russell Investments reconstitutes its set of global equity indexes on June 25, 2012. Russell Indexes are widely used by investment managers and institutional investors for index funds and as benchmarks for passive and active investment strategies. “Inclusion in the Russell Indexes is an important step in the evolution of Elephant Talk and is expected to increase awareness of ETAK among institutional investors and the investment community in general,” said Mr. Steven van der Velden, Chief Executive Officer of Elephant Talk Communications. “We believe that being part of such a broadly benchmarked index should increase demand for our stock from investors seeking to track index performance.”
http://finance.yahoo.com/news/elephant-talk-set-join-russell-121500837.html
- The link below is a press release dated May 31, 2012 announcing that Elephant Talk signs a Contract with the Union of German Police (GdP) to Expand Mobile Services into Germany with Revenues Projected to be $30-40 Million over Initial 2 year Period. Hamit Pourian, Wholesale Manager of Telekom Deutschland, stated, “The partnership between Elephant Talk and Deutsche Telekom guarantees the members of the GdP the best network quality and provides us with excellent flexibility in the products and services to ensure our high quality approach for the German market.” “Based on our superior world class mobile enabling platform and the strength of our operations team the implementation of the entire project just took six weeks from the purchase of the assets of Ensercom, which is a great accomplishment for a project of this magnitude,” said Martin Zuurbier, Chief Technology Officer of Elephant Talk. This deal produced strong media coverage around the world. http://www.elephanttalk.com/news/elephant-talk-signs-contract-with-the-union-of-german-police-news-21531202196
- Attached you will find the Elephant Talk excerpt from the May 31, 2012 edition of Josh Levin’s MicroCapInvestor Newsletter, which provides interesting commentary about the announcement with the Union of German Police. Permission was granted to share the Elephant Talk info only from the newsletter on our shareholder updates. (Mr. Levine is not a paid consultant of the company)
- The link below is a press release dated May 23, 2012 announcing that ValidSoft and Adeptra has implemented the World’s first SIM Swap fraud solution for the banking industry. This is a major milestone in the continued evolution for ValidSoft and we see these type of deals to range from 500 Thousand to 1.5 Million dollars per year as a minimum to start for the Sim Swap fraud detection solution only. We also expect revenue to increase throughout the multi-year agreement. Pat Carroll, CEO of ValidSoft commented: “We are very pleased to see our partnership with Adeptra bearing fruits so quickly. The contract with a global leader in the banking industry demonstrates that ValidSoft's security technology is at the forefront of fraud prevention solutions. Our partnership with Adeptra combines the market leader in sophisticated customer care with the best of breed in fraud prevention solutions.” Adeptra’s CTO, Tony McGivern, commented: “Once again, Adeptra leads the market into a new territory by engaging and delivering the most sophisticated anti-fraud solutions in the industry today. Without any additional capital investment and using existing technology, banks can benefit from best-in-class fraud detection applications that deliver loss avoidance options to our clients. Adeptra assesses and defines the intervention necessary to prevent further losses based on the critical data that ValidSoft delivers.” We are very excited about the potential business with our partner Adeptra.
http://www2.marketwire.com/mw/release_html_b1?release_id=890602
- The link below is a press release dated May16, 2012 announcing that ValidSoft signs a strategic partnership with Spindle, Inc., (OTCBB: SPDL) a US-based provider of innovative mobile commerce and alternative payment solutions for merchants and consumers. Pat Carroll, chief executive officer of ValidSoft stated. “This is another technical win for ValidSoft and showcases our capability to deliver its superior security and authentication solutions which are custom built for the mobile payments ecosystem in one of the world’s most security-demanding markets.”
http://www2.marketwire.com/mw/release_html_b1?release_id=888455
- The link below is a press release dated June 1, 2012 from Utiba announcing their expansion in the Americas. Utiba Americas and Utiba expect to be present in 14 countries in the Americas including the United States and Canada by the end of 2013, serving a potential market of over 600 million mobile and internet users and a population of over 900 million people. In the press release Utiba mentions two partners involved in their expansion– ValidSoft and MasterCard. Also we have included the link below to the original ValidSoft press release with Utiba. http://www.marketwire.com/press-release/utiba-leading-provider-mobile-financial-services-solutions-expands-presence-americas-otcqb-alyi-1664330.htm
http://www.elephanttalk.com/news/validsoft-and-utiba-partner-to-lead-the-way-in-bringing-advanced-security-news-29439202892
- The link below is for Pat Carroll’s Blog on the site of Finextra. Pat is the CEO of ValidSoft and a well respected and established industry expert in the field of financial security, fraud and data privacy. This link will take you to all his Blogs. Here are some examples of his latest Blog headlines for you to review and read.
- June 19, 2012 – Securing our Social Media Identity
- June 1, 2012 – Shaping the Future of Mobile Banking
- May 24, 2012 – Securing Faster Payments
- May 22, 2012 – MITB (Man in the Browser) Type Attacks Put Customers Off Banking Online
- May 8, 2012 – Keep It Private
- April 30, 2012 – Casting a Vote in the Race Towards American Mobile Payments
http://www.finextra.com/community/blogs.aspx?MemberID=53952
- Below you will find links to interesting articles that showcase the ValidSoft technology and solutions are in the sweet spot for many emerging markets such as mobile banking and mobile financial services, as well as articles about ValidSoft and industry news.
- http://www.finextra.com/News/Fullstory.aspx?newsitemid=23782
- http://www.validsoft.com/resources/PaymentsCards&MobileMayJune2012.pdf
- http://www.paymentssource.com/news/ValidSoft-Tackles-Emerging-Threat-From-SIM-Card-Swap-Mobile-Banking-Fraud-3010827-1.html
- http://www.argusresearchgroup.com/email_pdf/ALL_Outgoing_PDFs/mwmon0611.pdf
- http://mobile-banking.tmcnet.com/articles/291660-adeptra-validsoft-collaborate-develop-first-sim-swap-fraud.htm
- http://www.bobsguide.com//guide/news/2012/May/16/what-security-lesson-can-be-learnt-from-the-global-payments-data-breach.html
- http://www.nytimes.com/2012/02/25/your-money/why-its-so-hard-to-transfer-cash-to-your-friends-your-money.html?pagewanted=1&_r=1&hp
- Attached is the May 2012 edition of The KonLin Letter which did a feature stock follow-up on Elephant Talk Communications. Permission was granted to share the May 2012 KonLin Letter on our shareholder update. (The KonLin Letter was not paid for this report)
- Attached is an excellently written document titled ValidSoft – Data Protection and Privacy Q&A. This document discusses all the ValidSoft products and what measures are taken to secure and minimize personal data. It also talks about the European privacy Seal and the conditions of it use. This document will give our shareholders a much clearer understanding of ValidSoft security and policies.
As always, if there are any questions, please not hesitate to contact me at anytime. If you know of any shareholders that want to be added to this list, please have them get in touch with me.
Best Regards,
Steve
Steve Gersten
Vice President
Elephant Talk Communications/
ValidSoft Limited |
