Investor Corbin Mezzanine Fund receives warrants for 3 million shares
By Toni Weeks
San Luis Obispo, Calif., July 14 – Elephant Talk Communications Corp. wholly owned subsidiary Elephant Talk Europe Holding BV amended its credit agreement dated Nov. 17, 2014, reducing the facility to $6.5 million, according to an 8-K filing with the Securities and Exchange Commission.
Corbin Mezzanine Fund I, LP is the lender, and Atalaya Administrative LLC is the administrative agent and collateral agent.
Corbin also received two warrants: a 30-month warrant for 2 million common shares and an 18-month warrant for 1 million common shares. The warrants are exercisable at $0.38, a 2.56% discount to the closing share price of $0.39 on July 8.
“We are pleased to enter into an amended long-term credit agreement with our existing lender for a term loan facility of $6.5 million,” chairman and chief executive officer Steven van der Velden said in a press release. “With the completion of this agreement and our recent settlement with Grupo Iusacell, which included $12.6 million in cash that was partially used to retire $5.7 million of the lender’s original 2014 $12 million term loan and certain expenses in connection with the amended $6.5 million loan, we are well positioned to execute on our strategic growth initiatives currently underway in North America, Latin America, Europe and the Middle East.”
As part of the amendment, Corbin and Atalaya agreed to waive the existing default caused by the termination of the Iusacell agreement on June 16.
Borrowings bear interest at Libor plus 1,100 basis points, which may be decreased by 50 bps if the company achieves certain adjusted EBITDA.
The amended term loan facility matures Dec. 31, 2017.
Based in New York, Elephant Talk is a global provider of Software Defined Network Architecture platforms and cyber security solutions.
| Issuer: | Elephant Talk Communications Corp.
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| Issue: | Term loan
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| Amount: | $6.5 million
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| Maturity: | Dec. 31, 2017
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| Coupon: | Libor plus 1,100 bps
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| Warrants: | For 3 million shares
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| Warrant expiration: | Jan. 9, 2018 (for 2 million shares), Jan. 9 2017 (for 1 million shares)
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| Warrant strike price: | $0.38
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| Investor: | Corbin Mezzanine Fund I, LP
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| Settlement date: | July 9
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| Stock symbol: | NYSE: ETAK
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| Stock price: | $0.39 at close July 8
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| Market capitalization: | $55.95 million
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