EX-99.1 2 v424840_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

 

Net Element Reports Third Quarter 2015 Results;
Q3 2015 Revenues up 110% vs Q3 2014

 

Company Demonstrates Revenue Growth of 59% Year Over Year

 

MIAMI – November 17, 2015 - Net Element, Inc. (NASDAQ: NETE) (“Net Element” or the “Company”), a provider of global mobile payment technology solutions and value-added transactional services, reported financial results for its quarter ended September 30, 2015.

 

Key Q3 milestones and subsequent events:

 

·Increased revenues by 110% Q3 2015 vs Q3 2014

 

·Increased revenues by 59% year over year

 

·Executed partnership agreements with mobile operators in Kazakhstan to provide mobile payment services to millions of subscribers

 

·Completed insider financing to strengthen the Company’s working capital

 

·Expanded to Kyrgyzstan by signing leading electronic commerce company in the region

 

·Announced the termination of Senior Convertible Notes

 

·Integrated Mobile Payments and EMV acceptance into Aptito, cloud-based restaurant management and payment system

 

·Expanded mobile commerce offerings to market branded content

 

·Launched “Restoactive”, a comprehensive mobile restaurant solution, available to over 500,000 restaurants using trusted legacy POS system

 

·PayOnline’s unique Pay-Travel solution provides industry solution to automate payments for the travel industry including integration with GDS

 

·S&P Capital IQ initiated coverage on the Company in S&P Capital IQ factual stock reports

  

“We’re pleased to continue to demonstrate solid revenue growth in the United States and selected emerging markets,” commented Oleg Firer, CEO. “We remain focused on product innovation and advancing our platform to bring even more value to our growing client base, which will contribute to our continued growth.”

 

In an effort to present a more comparative period on period analysis, we have adjusted net loss to remove the effects of non-cash share based compensation, gains & losses from non-cash debt activities (including extinguishment) and derivative activity.

 

Results of Operations for the Three Months Ended September 30, 2015 Compared to the Three Months Ended September 30, 2014

 

 

 

 

We reported an adjusted net loss of $2,931,704, or $0.04 per share for the three months ended September 30, 2015 as compared to an adjusted net loss of $2,225,498, or $0.06 per share, for the three months ended September 30, 2014. This resulted in a net loss increase of $706,206 which is discussed further below.

 

Net revenues consist primarily of payment processing fees. Net revenues were $12,675,123 for the three months ended September 30, 2015 as compared to $6,026,961 for the three months ended September 30, 2014. The increase in net revenues is primarily a result of previous quarter purchases of portfolios and organic net increases in merchants. In addition, we consolidated online payments revenue for PayOnline and began reporting mobile commerce revenues for branded content.

 

Gross margin for the three months ended September 30, 2015 was $1,969,796 as compared to $1,309,106 for the three months ended September 30, 2014. The year over year increase in gross margin of $660,690 is primarily a result of increases in US Transaction Processing of $535,783 and $595,630 resulting from PayOnline operations (Acquired May 20, 2015). This was offset by a decrease in mobile gross margin of $470,723 resulting primarily from penalty recoveries in 2014 that decreased mobile cost of sales.

 

Adjusted general and administrative expenses increased by $248,855 to $2,159,170 for the three months ended September 30, 2015 as compared to $1,910,315 for the three months ended September 30, 2014. This was primarily due to a $229,975 increase in salaries, benefits, taxes and contractor payments.

 

Item  Three Months Ended September 30, 2015   Three Months Ended September 30, 2014   Increase / (Decrease) 
Salaries, benefits, taxes and contractor payments   1,009,441    779,466    229,975 
Professional fees   676,531    721,555    (45,024)
Rent   97,166    106,749    (9,583)
Product development   14,144    (20625)   34,769 
Travel expense   57,674    85,337    (27,663)
Filing fees   1,258    12,774    (11,516)
Transaction losses   2,687    1,423    1,264 
Other expenses   300,269    223,636    76,633 
Total  $2,159,170   $1,910,315   $248,855 

 

 

Salaries, benefits, taxes and contractor payments were $1,009,441 for the three months ended September 30, 2015 as compared to $779,466 for the three months ended September, 2014, representing an increase of $229,975 as follows: 

 

 

 

 

Group  Salaries and benefits for the three months ended September 30, 2015   Salaries and benefits for the three months ended September 30, 2014  

Increase /

(Decrease)

 
Corporate  $419,116   $287,624   $131,492 
Engineering   29,343    89,086    (59,743)
Transaction Processing   560,982    402,756    158,226 
Total  $1,089,441   $779,466   $229,975 

 

 

The primary reason for the increase was $158,266 in salaries from transactional processing due to $120,763 from the acquisition of PayOnline (acquired May 20, 2015). Additionally, there was a $29,751 increase from corporate due to the hiring of management. This was offset by a decrease from engineering of $59,743 due to reduction in staff.

 

We recorded a provision for bad debts of $284,384 for the three months ended September 30, 2015 as compared to $136,150 for the three months ended September 30, 2014. For the three months ended September 30, 2015, we recorded a loss provision which was primarily comprised of $307,154 in ACH rejects offset by a $22,811 recovery from our Russian operations.

 

Depreciation and amortization expense consists primarily of the amortization of merchant portfolios plus depreciation expense on fixed assets, client acquisition costs, capitalized software expenses and employee non-compete agreements.  Depreciation and amortization expense was $851,636 for the three months ended September 30, 2015 as compared to $684,503 for the three months ended September 30, 2014. The $167,133 increase in depreciation and amortization expense was primarily due to purchased merchant portfolios reaching full amortization during 2014 resulting in a decrease of $292,089, offset by the amortization of intangible assets acquired in the purchase of PayOnline, which amounted to an increase of $459,220.

 

Interest expense was $1,605,034 for the three months ended September 30, 2015 as compared to $790,490 for the three months ended September 30, 2014, representing an increase of $814,544 as follows:

Funding Source  Three months ended September 30, 2015   Three months ended September 30, 2014  

Increase /

(Decrease)

 
Convertible Notes Payable  $1,416,314   $-   $1,463,314 
Capital Sources NY   -    57,500    (57,500)
Georgia Notes LLC   -    436,005    (436,005)
MBF Note   -    229,956    (229,956)
RBL Note   137,784    63,647    74,137 
Other   3,963    3,382    554 
Total  $1,605,034   $790,490   $814,544 

 

The increase primarily consisted of the $1,463,314 interest expense attributed to the convertible notes payable offset by a $436,005 decrease from the Georgia Notes LLC note that was paid off September 15, 2014, a decrease of $57,500 related to the Capital Sources note payable which was repaid on September 15, 2014, a decrease of $229,956 that was related to the MBF note which was repaid in July 2014.

 

 

 

 

For the three months ended September 30, 2015 we recognized a net gain from asset disposal of $44,928 primarily consisting of a loss from the disposal of obsolete terminal inventory for $91,561 offset by a gain on a sale of portfolios for $139,25 and other gains and losses of $2,761. We recognized a gain from asset disposal of $44,456 for the three months ended September 30, 2014 due to the closing of our Netlab division.

 

Results of Operations for the Nine Months Ended September 30, 2015 Compared to the Nine Months Ended September 30, 2014.

 

We reported an adjusted net loss of $7,773,765 or $0.14 per share for the nine months ended September 30, 2015 as compared to an adjusted net loss of $6,962,945, or $0.20 per share, for the nine months ended September 30, 2014. The net loss is discussed further below. 

 

Net revenues consist primarily of payment processing fees. Net revenues were $25,122,250 for the nine months ended September 30, 2015 as compared to $15,782,475 for the nine months ended September 30, 2014. The $9,339,775 increase in net revenues is primarily a result of previous quarter purchases of portfolios and organic net increases in our U.S. merchant portfolio ($5,041,632), increases in mobile commerce revenues for mobile operator and content provider fees where we are primary obligor ($1,941,328) and the acquisition of PayOnline online payments on May 20, 2015 ($2,356,815).

 

Gross margin for the nine months ended September 30, 2015 was $4,335,034 as compared to $4,191,040 for the nine months ended September 30, 2014. The year over year increase of $143,994 is primarily a result of an $899,773 increase in volume from the PayOnline acquisition and an $188,656 from our US transaction processing business growth. This was offset by a decrease of $944,435 from our mobile payments business resulting from business reorganization that occurred in the second half of 2014 reducing net revenues.

 

Adjusted general and administrative expenses were $6,778,751 for the nine months ended September 30, 2015 as compared to $6,844,240 for the nine months ended September 30, 2014 as follows:

 

Category  Nine Months Ended September 30, 2015   Nine Months Ended September 30, 2014   Increase / (Decrease) 
Salaries, benefits, taxes and contractor payments   2,727,785    2,335,774    392,011 
Professional fees   2,619682    2,102,719    516,963 
Rent   338,252    303,580    34,672 
Product development   49,028    47,683    1,345 
Travel expense   190,987    218,194    (27,207)
Filing fees   84,690    23,985    60,705 
Transaction (gains) losses   (86,346)   1,228,372    (1,314,718)
Other expenses   854,673    583,933    270,740 
Total  $6,778,751   $6,844,240   $(65,489)

 

 

 

 

The increase in salaries of $392,011 was due primarily to the increase of $308,112 in transaction processing and mobile payments. Of this amount $180,021 was attributed to acquiring PayOnline and $128,091 was due to hiring of in-house sales and risk management. Corporate salaries increased $232,957 due to an increase in corporate headcount for two new management positions. This was offset by a decrease from engineering of $89,316 due to reduction in staff in this area.

 

Professional fees were $2,619,682 for the nine months ended September 30, 2015 as compared to $2,102,719 for the nine months ended September 30, 2014, representing an increase of $516,963 primarily due to increases of $557,083 in general legal fees and $173,428 in accounting and auditing fees. General legal fees were higher due to increased litigation and accounting fees were higher due to transactions and other one time charges for accounting services.

 

Transaction gains, primarily resulting from realized foreign currency gains were $86,346 versus losses of $1,228,372 representing a decrease in expenses of $1,314,718.

 

We recorded a provision for bad debts of $425,225 for the nine months ended September 30, 2015 as compared to a net recovery of $1,302,554 for the nine months ended September 30, 2014. For the nine months ended September 30, 2015, we recorded a loss provision which was primarily comprised of $542,763 in ACH rejects offset by $117,569 recovery from our mobile payments business. We recorded a recovery in the provision for loan losses of $1,302,554 for the nine months ended September 30, 2014 which consisted of a favorable adjustment to the bad debt allowance of $1,640,111from our mobile payments business, offset by net ACH rejects of $337,557 in the normal course of operations. 

 

Depreciation and amortization expense consists primarily of the amortization of merchant portfolios plus depreciation expense on fixed assets, client acquisition costs, capitalized software expenses and employee non-compete agreements. Depreciation and amortization expense was $1,916,901 for the nine months ended September 30, 2015 as compared to $1,900,995 for the nine months ended September 30, 2014. The $15,906 increase in depreciation and amortization expense was primarily due to additional amortization of intangible assets as a result of the PayOnline acquisition offset by a decrease in merchant portfolio amortization during 2015 as certain portfolios are fully amortized.

 

Interest expense was $3,007,216 for the nine months ended September 30, 2015 as compared to $3,622,225 for the nine months ended September 30, 2014, representing a decrease of $615,009.

 

 

 

 

Funding Source  Nine months ended September 30, 2015   Nine months ended September 30, 2014  

Increase /

(Decrease)

 
Alfa Bank  $-   $243,036   $(243,036)
Convertible Notes Payable   2,610,030    -    2,610,030 
Capital Sources NY   -    212,750    (212,750)
Cayman Invest   -    1,043,843    (1,043,843)
Georgia Notes LLC   -    1,302,148    (1,302,148)
MBF Note   -    483,515    (483,515)
RBL Note   366,210    277,609    88,601 
Other   30,976    59,324    (28,348)
Total  $3,007,216   $3,622,225   $(615,009)

 

 

The decrease primarily consisted of $1,302,148 from the Georgia Notes LLC note payable that was paid off September 15, 2014, a decrease in interest expense of $212,750 related to the Capital Sources note payable which was repaid on September 15, 2014, a decrease in interest expense of $483,515 that was related to the MBF note which was repaid in July 2014 and $1,043,843 relating to financing from Cayman Invest which was paid off September, 2014. Interest from the Alfa Bank factoring line decreased $243,036 because it was not utilized during the nine months ended September 30, 2015. This was offset by an increase of $2,610,0303 from the interest from the Notes financing and Convertible Preferred Stock financing with certain qualified institutional investors and certain institutional accredited investors dated April 30, 2015.

 

For the nine months ended September 30, 2015 we recognized a net gain of $68,786 from the disposal of certain assets. This was comprised of a loss from obsolete terminal inventory of $91,561 offset by a gain on a sale of portfolios for $139,250 and the gain on the disposal of other assets $21,098. For the nine months ended September 30, 2014, the gain on asset disposal was $16,137.

 

Other expenses consisted primarily of foreign taxes for $49,487, for the nine months ended September 30, 2015 as compared to $105,217 of foreign taxes for the same comparative period in 2014.

 

Reconciliation of Non-GAAP Financial Measures and Regulation G Disclosure

 

To supplement its consolidated financial statements presented in accordance with United Stated generally accepted accounting principles ("GAAP"), the Company provides additional measures of its operating results by disclosing its adjusted net loss. Adjusted net loss is calculated as net loss excluding non-cash share based compensation and other one-time, non-recurring items not present in this quarter or same quarter last year results. Net Element discloses this amount on an aggregate and per share basis. These measures meet the definition of non-GAAP financial measures. The Company believes that application of these non-GAAP financial measures is appropriate to enhance the understanding of its historical performance through use of a metric that seeks to normalize period-to-period earnings.

 

 

 

 

This press release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. Pursuant to Regulation G, a reconciliation of these non-GAAP financial measures with the comparable financial measures calculated in accordance with GAAP for the three and nine months ended September 30, 2015 and 2014 is presented in the following Non-GAAP Financial Measures Table.

 

   GAAP   Share-based Compensation   Derivative Activity, Debt Extinguishment and Restructure   Adjusted Non-GAAP 
Three Months Ended September 30, 2015                
Net loss  $(4,536,778)  $601,371   $1,003,703   $(2,931,704)
Basic and diluted loss per share  $(0.07)  $0.01   $0.01   $(0.04)
Basic and diluted shares used in computing loss per share   68,504,421              68,504,421 
                     
                     
     GAAP      Share-based Compensation      Debt Extinguishment and Debt Restructure      Adjusted Non-GAAP  
Three Months Ended September 30, 2014 (per 10Q/A filed 2/18/15)                    
Net loss from continuing operations  $(4,970,292)  $522,981   $2,221,813   $(2,225,498)
Basic and diluted loss per share  $(0.13)  $0.01   $0.06   $(0.06)
Basic and diluted shares used in computing loss per share from continuing operations   39,316,693              39,316,693 
                     
     GAAP      Share-based Compensation      Derivative Activity, Debt Extinguishment and Restructure      Adjusted Non-GAAP  
Nine Months Ended September 30, 2015                    
Net loss  $(8,559,545)  $1,804,113   $(1,018,333)  $(7,773,765)
Basic and diluted loss per share  $(0.16)  $0.03   $(0.02)  $(0.14)
Basic and diluted shares used in computing loss per share   53,969,603              53,969,603 
                     
     GAAP      Share-based Compensation      Debt Extinguishment and Debt Restructure      Adjusted Non-GAAP  
Nine Months Ended September 30, 2014 (per 10Q/A filed 2/18/15)                    
Net loss from continuing operations  $(7,257,505)  $1,275,498   $(980,939)  $(6,962,945)
Basic and diluted loss per share  $(0.21)  $0.04   $(0.03)  $(0.20)
Basic and diluted shares used in computing loss per share from continuing operations   34,683,766              34,683,766 

 

 

 

 

 

NET ELEMENT, INC.        
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS        
         
   September 30, 2015   December 31, 2014 
ASSETS          
Current assets:          
Cash  $315,728   $503,343 
Funds in Escrow   5,000,000    - 
Accounts receivable, net   4,539,765    3,417,173 
Advances to aggregators, net   45,114    18,455 
Prepaid expenses and other assets   952,283    944,243 
Total current assets, net   10,852,890    4,883,214 
Fixed assets, net   200,932    70,918 
Intangible assets, net   8,116,787    2,492,050 
Goodwill   6,671,750    6,671,750 
Other long term assets   335,268    204,737 
Total assets  $26,177,627   $14,322,669 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
Current liabilities:          
Accounts payable  $4,388,770   $2,698,257 
Deferred revenue   530,013    472,482 
Accrued expenses   2,580,818    2,351,885 
Derivative liability conversion feature   428,884    - 
Warrant derivative liability   3,978,495    - 
Short term notes payable (net of discount)   694,445    - 
Notes payable (current portion)   950,894    98,493 
Due to related parties   467,806    - 
Total current liabilities   14,020,125    5,621,117 
Note payable (non-current portion)   3,014,106    3,216,507 
Total liabilities   17,034,231    8,837,624 
           
Series A Convertible Preferred stock ($1,000 stated value, 1,000,000 shares authorized, 972 shares issued and outstanding, at September 30, 2015, net of discount)   953,903    - 
           
Commitments and contingencies          
           
STOCKHOLDERS' EQUITY          
Common stock ($.0001 par value, 300,000,000 shares authorized and 77,752,600 and 45,881,523 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively)   7,775    4,589 
Paid in capital   149,507,581    136,689,629 
Stock subscription receivable   (1,111,130)   (1,111,130)
Accumulated other comprehensive loss   (1,665,625)   (1,251,461)
Accumulated deficit   (138,779,508)   (129,116,344)
Noncontrolling interest   230,400    269,762 
Total stockholders' equity   9,143,396    5,485,045 
Total liabilities, mezzanine and stockholders' equity  $26,177,627   $14,322,669 

 

 

 

 

 

 

 

NET ELEMENT, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS   

 

                 
   Three months ended September 30,   Nine months ended September 30, 
   2014   2015   2014   2014 
                 
Net revenues  $12,675,123   $6,026,961   $25,122,250   $15,782,475 
                     
Costs and expenses:                    
Cost of revenues   10,705,327    4,717,855    20,787,216    11,591,435 
General and administrative (includes $601,371, $522,981, $1,804,113 and $1,275,498 of share based compensation for the three and nine months ended September 30, 2015 and 2014, respectively)   2,760,541    2,433,296    8,582,864    8,119,738 
Provision for (recovery of) bad debt   284,384    136,150    425,225    (1,302,554)
Depreciation and amortization   851,636    684,503    1,916,901    1,900,995 
Total costs and operating expenses   14,601,888    7,971,804    31,712,206    20,309,614 
Loss from operations   (1,926,765)   (1,944,843)   (6,589,956)   (4,527,139)
   Interest expense, net   (1,605,034)   (790,490)   (3,007,216)   (3,622,225)
   (Loss) gain on change in fair value and settlement of beneficial conversion derivative   (1,083,028)   -    939,008    5,569,158 
   Gain (loss) on debt extinguishment   79,325    (2,221,813)   79,325    (6,184,219)
   Gain on debt restructure   -    -    -    1,596,000 
   Gain from asset disposal   44,928    44,456    68,786    16,137 
   Other expense   (46,204)   (57,602)   (49,492)   (105,217)
Net loss before income taxes   (4,536,778)   (4,970,292)   (8,559,545)   (7,257,505)
Income taxes   -    -    -    - 
Net loss   (4,536,778)   (4,970,292)   (8,559,545)   (7,257,505)
Net loss attributable to the noncontrolling interest   23,577    9,912    42,850    51,567 
Net loss attributable to Net Element, Inc. shareholders   (4,513,201)   (4,960,380)   (8,516,695)   (7,205,938)
                     
Dividends for the benefit of preferred stockholders   (621,273)   -    (1,146,470)   - 
                     
Net loss attributable to common stock   (5,134,474)   (4,960,380)   (9,663,165)   (7,205,938)
                     
Foreign currency translation   (189,644)   (273,679)   (414,168)   887,400 
Comprehensive loss attributable to common stock  $(5,324,118)  $(5,234,059)  $(10,077,333)  $(6,318,538)
                     
Loss per share - basic and diluted  $(0.07)  $(0.13)  $(0.18)  $(0.21)
                     
Weighted average number of common shares outstanding - basic and diluted   68,504,421    39,316,693    53,969,603    34,683,766 

 

 

 

  

NET ELEMENT, INC.        
CONSOLIDATED STATEMENT OF CASH FLOWS        
  

 

 

Nine Months Ended September 30, 

 
   2015   2014 
Cash flows from operating activities        
Net loss  $(8,516,695)  $(7,205,938)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities          
Non controlling interest   (42,850)   376,059 
Share based compensation   1,202,742    1,275,498 
Deferred revenue   (36,764)   26,310 
Gain on change in fair value and settlement of beneficial conversion derivative   (939,008)   (5,569,158)
Depreciation and amortization   1,916,901    1,900,995 
Amortization of debt discount   2,610,030    1,644,626 
(Recovery of ) provision for loan losses   -    (1,640,109)
(Gain) loss on disposal of fixed assets   (68,786)   16,137 
(Gain) loss on debt extinguishment   (79,325)   6,184,219 
Gain on MBF debt restructure   -    (1,596,000)
Changes in assets and liabilities, net of acquisitions and the effect of consolidation of equity affiliates          
Account receivable   (1,203,429)   8,274,683 
Advances to aggregators   (32,890)   923,016 
Prepaid expenses and other assets   (89,835)   (270,642)
Accounts payable   1,728,877    (310,965)
Accrued expenses   45,473    (1,069,530)
Net cash (used in) provided by operating activities   (3,505,559)   2,959,201 
           
Cash flows from investing activities          
Purchase of portfolio and client acquisition costs   (423,250)   (1,339,096)
Sale of portfolio   300,000    - 
Note receivable   (26,795)   - 
Acquisition of PayOnline assets, net of cash received   (3,195,452)   - 
Purchase of fixed and other assets   (484,137)   (5,019)
Net cash used in investing activities   (3,829,634)   (1,344,115)
           
Cash flows from financing activities          
Repayment to Financial Institutions   -    (8,454,027)
Proceeds from preferred stock   5,500,000    - 
Proceeds from indebtedness   650,000    8,879,898 
Repayment of indebtedness   -    (3,112,775)
Related party advances   650,000    - 
Net cash provided by (used in) financing activities   6,800,000    (2,686,904)
           
Effect of exchange rate changes on cash   347,578    2,350,870 
Net (decrease) increase in cash   (187,615)   1,279,052 
           
Cash at beginning of period   503,343    126,319 
Cash at end of period  $315,728   $1,405,371 
           
Supplemental disclosure of cash flow information          
Cash paid during the period for:          
Interest  $397,186   $1,338,402 
Taxes  $74,417   $296,844 
           
Non Cash activities:          
Notes payable (net of discount)  $694,445   $- 
Funds in escrow from issuance of notes  $5,000,000   $- 
Derivative Liability - warrants  $3,978,495   $- 
Preferred dividends paid in common stock  $1,146,470   $- 
           

 

 

 

 

 

 

 

 

 

Additional information regarding Net Element’s results for its third-quarter ended September 30, 2015 may be found in Net Element’s quarterly report on Form 10-Q, which was filed with the Security and Exchange Commission (SEC) on November 16, 2015 and may be obtained from the SEC’s Internet website at http://www.sec.gov.

 

About Net Element

Net Element, Inc. (NASDAQ: NETE) operates a payments-as-a-service platform for small to medium enterprise ("SME") in the US, Russian Federation and other international markets. In the US it aims to grow transactional revenue by innovating SME productivity services such as its cloud based, restaurant point-of-sale solution Aptito. Internationally, Net Element's strategy is to leverage its omni-channel platform to deliver flexible offerings to emerging markets with diverse banking, regulatory and demographic conditions such as UAE, Russia, Kazakhstan, India and Latin America. It maintains offices in Miami, FL, Russia and in the Republic of Cyprus. Further information is available at www.netelement.com.

 

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Any statements contained in this press release that are not statements of historical fact may be deemed forward-looking statements. Words such as "continue," "will," "may," "could," "should," "expect," "expected," "plans," "intend," "anticipate," "believe," "estimate," "predict," "potential," and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, whether the release of the new Sales Central Product will have any positive impact on the Company, whether the new product features will enhance the experience of ISG’s and Merchants, whether ISG’s and Merchants will derive any benefit from the new product features, whether the Sales Central new features will be adequate to address the needs of ISG’s and Merchants, whether Net Element can secure any additional financing, and if such additional financing will be adequate to meet the Company's objectives.

 

 

 

 

All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, many of which are generally outside the control of Net Element and are difficult to predict. Examples of such risks and uncertainties include, but are not limited to: (i) Net Element's ability (or inability) to obtain additional financing in sufficient amounts or on acceptable terms when needed; (ii) Net Element's ability to maintain existing, and secure additional, contracts with users of its payment processing services; (iii) Net Element's ability to successfully expand in existing markets and enter new markets; (iv) Net Element's ability to successfully manage and integrate any acquisitions of businesses, solutions or technologies; (v) unanticipated operating costs, transaction costs and actual or contingent liabilities; (vi) the ability to attract and retain qualified employees and key personnel; (vii) adverse effects of increased competition on Net Element's business; (viii) changes in government licensing and regulation that may adversely affect Net Element's business; (ix) the risk that changes in consumer behavior could adversely affect Net Element's business; (x) Net Element's ability to protect its intellectual property; (xi) local, industry and general business and economic conditions; (xii) adverse effects of potentially deteriorating U.S.-Russia relations, including, without limitation, over a conflict related to Ukraine, including a risk of further U.S. government sanctions or other legal restrictions on U.S. businesses doing business in Russia. Additional factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements can be found in the most recent annual report on Form 10-K and the subsequently filed quarterly reports on Form 10-Q and current reports on Form 8-K filed by Net Element with the Securities and Exchange Commission. Net Element anticipates that subsequent events and developments may cause its plans, intentions and expectations to change. Net Element assumes no obligation, and it specifically disclaims any intention or obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by law.

 

Contact:

Media

Net Element, Inc.

media@netelement.com

+1 (786) 923-0502