	September 30,			Restatement			September 30,
	2014			adjustment			2014
	(Unaudited)			Unaudited			Unaudited
							Restated
ASSETS

CURRENT ASSETS

Cash and cash equivalents	$	1,176,650		$	-		$	1,176,650
Restricted cash		169,536			-			169,536
Accounts receivable, net of an allowance for doubtful accounts of $0 at September 30, 2014		6,754,447			(907,023	)		5,847,424
Prepaid expenses and other current assets		2,319,310			-			2,319,310
Total current assets		10,419,943			(907,023	)		9,512,920

NON-CURRENT ASSETS

OTHER ASSETS		1,093,977			-			1,093,977

PROPERTY AND EQUIPMENT, NET		19,603,707			-			19,603,707

INTANGIBLE ASSETS, NET		6,000,884			-			6,000,884

GOODWILL		3,490,242			-			3,490,242

TOTAL ASSETS	$	40,608,753		$	(907,023	)	$	39,701,730

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Overdraft	$	425,144		$	-		$	425,144
Accounts payable and customer deposits		2,063,304			-			2,063,304
Obligations under capital leases - current portion		1,828,083			-			1,828,083
Deferred Revenue		127,456			468,256			595,712
Accrued expenses and other payables		5,804,999			-			5,804,999
Loans payable		961,550			-			961,550
Total current liabilities		11,210,536			468,256			11,678,792

LONG TERM LIABILITIES
2013 10% 3rd Party Loan -net of Debt Discount of $410,853 at September 30, 2014)		4,663,227			-			4,663,227
Warrant liabilities		2,248,169			-			2,248,169
Non-current portion of obligation under capital leases		261,912			-			261,912
Non-current portion of deferred revenue		-			7,788,843			7,788,843
Total long term liabilities		7,173,308			7,788,843			14,962,151

Total liabilities		18,383,844			8,257,099			26,640,943

STOCKHOLDERS' EQUITY
Preferred Stock $0.00001 par value, 50,000,000 shares authorized, 0 issued and outstanding		-			-			-
Common Stock $0.00001 par value, 250,000,000 shares authorized, 151,312,189 issued and outstanding as of September 30, 2014		260,616,570			-			260,616,570
Accumulated other comprehensive income -loss)		(2,003,871	)		-			(2,003,871	)
Accumulated deficit		(236,521,852	)		(9,164,122	)		(245,685,974	)
Elephant Talk Communications, Corp. stockholders' equity		22,090,847			(9,164,122	)		12,926,725

NON-CONTROLLING INTEREST		134,062			-			134,062
Total stockholders' equity		22,224,909			(9,164,122	)		13,060,787

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	40,608,753		$	(907,023	)	$	39,701,730

	For the three month
	period ended
	September 30, 2014			Restatement adjustments			Re- classifications			Restated
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
REVENUES	$	7,298,988		$	(2,853,749	)	$	-		$	4,445,239

COST AND OPERATING EXPENSES
Cost of service (exclusive of depreciation and amortization shown separately below)		848,771			-			716,283			1,565,054
Product development		-			-			1,707,102			1,707,102
Sales and marketing		-			-			555,519			555,519
General and administrative		6,227,147			-			(2,978,904	)		3,248,243
Depreciation and amortization		1,900,251			-			-			1,900,251
Total cost and operating expenses		8,976,169			-			-			8,976,169

LOSS FROM OPERATIONS		(1,677,181	)		(2,853,749	)		-			(4,530,930	)

OTHER INCOME (EXPENSE)
Interest income		36,684			-			-			36,684
Interest expense		(260,295	)		-			-			(260,295	)
Interest expense related to debt discount and conversion feature		(1,287,717	)		-			-			(1,287,717	)
Changes in fair value of warrant liabilities		(103,311	)		-			-			(103,311	)
Gain / (Loss) on Extinguishment of Debt		626,534			-			-			626,534
Other income & (expense), net		301,199			-			-			301,199
Amortization of deferred financing costs		(73,789	)		-			-			(73,789	)
Total other income (expense)		(760,695	)		-			-			(760,695	)

LOSS BEFORE (BENEFIT) PROVISION FOR INCOME TAXES		(2,437,876	)		(2,853,749	)		-			(5,291,625	)
(Benefit) / provision for income taxes		(44,938	)		-			-			(44,938	)
NET LOSS		(2,392,938	)		(2,853,749	)		-			(5,246,687	)

OTHER COMPREHENSIVE (LOSS) INCOME
Foreign currency translation gain (loss)		(2,273,740	)		-			-			(2,273,740	)
COMPREHENSIVE LOSS	$	(4,666,678	)	$	(2,853,749	)	$	-		$	(7,520,427	)

Net loss per common share and equivalents - basic and diluted	$	(0.02	)	$	-		$	-		$	(0.04	)

Weighted average shares outstanding during the period - basic and diluted		149,468,618			-			-			149,468,618

	For the nine month
	period ended
	September 30, 2014			Restatement adjustments			Re- classifications			Restated
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
REVENUES	$	20,690,609		$	(5,788,665	)	$	-		$	14,901,944

COST AND OPERATING EXPENSES
Cost of service (exclusive of depreciation and amortization shown separately below)		2,660,816			-			2,388,897			5,049,713
Product development		-			-			5,699,451			5,699,451
Sales and marketing		-			-			1,784,161			1,784,161
General and administrative		19,636,038			-			(9,872,509	)		9,763,529
Depreciation and amortization		5,836,857			-			-			5,836,857
Total cost and operating expenses		28,133,711			-			-			28,133,711

LOSS FROM OPERATIONS		(7,443,102	)		(5,788,665	)		-			(13,231,767	)

OTHER INCOME (EXPENSE)
Interest income		93,840			-			-			93,840
Interest expense		(895,453	)		-			-			(895,453	)
Interest expense related to debt discount and conversion feature		(3,197,749	)		-			-			(3,197,749	)
Changes in fair value of warrant liabilities		(274,635	)		-			-			(274,635	)
Gain / (Loss) on Extinguishment of Debt		626,108			-			-			626,108
Other income & (expense), net		372,597			-			-			372,597
Amortization of deferred financing costs		(323,246	)		-			-			(323,246	)
Total other income (expense)		(3,598,538	)		-			-			(3,598,538	)

LOSS BEFORE (BENEFIT) PROVISION FOR INCOME TAXES		(11,041,640	)		(5,788,665	)		-			(16,830,305	)
(Benefit) / provision for income taxes		88,290			-			-			88,290
NET LOSS		(11,129,930	)		(5,788,665	)		-			(16,918,595	)

OTHER COMPREHENSIVE (LOSS) INCOME
Foreign currency translation gain (loss)		(2,424,192	)		-			-			(2,424,192	)
COMPREHENSIVE LOSS	$	(13,554,122	)	$	(5,788,665	)	$	-		$	(19,342,787	)

Net loss per common share and equivalents - basic and diluted	$	(0.08	)	$	-		$	-		$	(0.12	)

Weighted average shares outstanding during the period - basic and diluted		145,929,455			-			-			145,929,455

The correction of the errors described above did not impact our total cash flows from operating activities, investing activities or financing activities within our consolidated statements of cash flows.

	Nine month period ended
	September 30, 2014			Restatement			Restated
				Unaudited			Unaudited
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(11,129,930	)	$	(5,788,665	)	$	(16,918,595	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		5,836,857			-			5,836,857
Provision for doubtful accounts		(10,661	)		-			(10,661	)
Stock based compensation		3,536,680			-			3,536,680
Change in fair value of warrant liability		274,635			-			274,635
Amortization of deferred financing costs		323,246			-			323,246
Interest expense relating to debt discount and conversion feature		3,197,749			-			3,197,749
Unrealized foreign currency translation gain (loss)		(501,571	)		-			(501,571	)
Extinguishment of Debt		(626,108	)		-			(626,108	)
Changes in operating assets and liabilities:					-			-
Decrease (increase) in accounts receivable		(1,366,947	)		21,669			(1,345,278	)
Decrease (increase) in prepaid expenses, deposits and other assets		(101,971	)		-			(101,971	)
Increase (decrease) in accounts payable and customer deposits		362,685			-			362,685
Increase (decrease) in deferred revenue		(11,931	)		5,766,996			5,755,065
Increase (decrease) in accrued expenses and other payables		1,493,594			-			1,493,168
Increase (decrease) in non-cash accrued expenses related to extinguishment of Debt		(426	)		-
Net cash provided by operating activities		1,275,901			-			1,275,901

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(5,611,023	)		-			(5,611,023	)
Loan to third party		-			-			-
Net cash used in investing activities		(5,611,023	)		-			(5,611,023	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Financing related fees		(125,793	)		-			(125,793	)
Exercise of warrants and options		4,286,576			-			4,286,576
Interest paid for property and equipment acquired under capital leases		(57,079	)		-			(57,079	)
Net cash provided by financing activities		4,103,704			-			4,103,704

EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS		155,753			-			155,753
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(75,665	)		-			(75,665	)
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD		1,252,315			-			1,252,315
CASH AND CASH EQUIVALENTS, END OF THE PERIOD	$	1,176,650		$	-		$	1,176,650

*the Company reclassified the line items Accounts Receivable and Deferred Revenue compared to what was reported in the annual report 2014 on Form 10-K for the above quarter. The restatement for accounts receivable changed from ($2,468,434) to $21,669 and Deferred Revenue increase (decrease) changed from $8,257,099 to $5,766,996. In addition minor changes were made to Loss on Extinguishment of Debt ($426 added) and Increase in accrued expenses of 426. There was no impact of these reclassifications on Net Cash provided by (used in) operating activities, Net Loss or Equity.