SOURCE: Net Element, Inc.

Net Element, Inc.

June 23, 2015 11:50 ET

Net Element Provides Business Update

Strategic Objectives for Second Half of 2015

MIAMI, FL--(Marketwired - Jun 23, 2015) - Net Element, Inc. (NASDAQ: NETE) ("Net Element" or the "Company") -- In response to shareholder inquiries regarding the recent decline in share price and a resulting price non-compliance notice received from NASDAQ, Net Element management wishes to update shareholders on its business especially in light of our recent capital infusion.

The Company's primary goal in the second half of 2015 is to integrate PayOnline's value-added technologies with its US offerings and to execute on our objective to become a premier payments-as-a-service company with a centralized, omni-channel, global platform.

The first half of 2015 was spent completing the financial turnaround culminating in a financing of at least $10.5 million and creating the operational infrastructure required to sustain our rapidly growing businesses.

Growth initiatives

The acquisition of PayOnline will be transformative for the Company not only as a profitable acquisition but for the cutting edge payments tools it provides such as its recently announced availability of an online transactional platform for iOS apps (iPhone and iPad).

We have begun to deploy these technologies and have already added to the business by facilitating PayOnline's entry into Kazakhstan with contracts with the country's largest bank and second largest online merchant.

In our US payments business (2014 revenues of $21 million), we've already seen results from the launch of certain US marketing initiatives announced in May, with over $2 million in sales partner financings and recent renewals of key sales partnerships.

Growth of our Russia mobile payments continues with a target of 100% annual growth of Russian mobile subscribers. We crossed the threshold of 1 million recurring subscribers in January while ending May with over 1.3 million subscribers.

Financial stability

Profitability continues to improve with net loss reduced from $0.11 in the first quarter of 2014 to $0.04 in the first quarter of 2015.

General and administrative expense were reduced from $3.1 million for the three months ended March 31, 2014 to $2.6 million for the same period in 2015; a decrease of 19%. We continue to streamline operations and improve efficiency.

Over $25 million in debt has been eliminated in the past 2 years and with the addition of May's $10.5 million in growth capital, the company is able to continue its strategic plans of business expansion and improved profitability.

Share price

It is our belief that the current share price does not fairly represent the potential of our business and as this potential is realized through the achievement of coming milestones, it is our hope that the share price will reflect this and that we will regain compliance with NASDAQ listing requirements.

We will continue communicating our developments to the investment community via press releases and current reports on Form 8-K, and encourage shareholders and potential investors to visit our website and follow our social media channels, such as Facebook and Twitter to stay informed and fully aware of new developments as they occur.

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, Kazakhstan, India and Latin America. It maintains offices in Miami, FL and in Russia. 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 Company's pending acquisition of PayOnline will be finalized, whether the PayOnline acquisition will have the desired impact on the Company's business and whether its value-added technologies will be successfully integrated with the Company's US offerings, whether the Company will be able to continue its business expansion, including in Russia and Kazakhstan, whether the Company will achieve its target growth objectives, 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.

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