UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
WASHINGTON, DC 20549
_________________________
FORM 8-K
_________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported ) May 24, 2016
_________________________
Net Element, Inc.
(Exact Name of Registrant as Specified in Charter)
|
Delaware |
001-34887 |
90-1025599 |
||
|
(State or Other Jurisdiction
of Incorporation) |
(Commission File
Number) |
(IRS Employer
|
| 3363 NE 163rd Street, Suite 705, North Miami Beach, FL | 33160 | |
| (Address of Principal Executive Offices) | (Zip Code) |
|
(305) 507-8808 |
| (Registrant’s telephone number, including area code) |
|
Not Applicable |
| (Former Name or Former Address, if Changed Since Last Report) |
| Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 3.03 | Material Modification to Rights of Security Holders |
As previously announced in our Current Report on Form 8-K filed on November 18, 2015, at a special meeting of stockholders of Net Element, Inc. (the “Company”), the Company’s stockholders, by an affirmative vote of at least a majority of the Company’s issued and outstanding shares of capital stock, approved a proposal authorizing the Company’s Board of Directors, in its discretion, to effect a reverse stock split of the Company’s outstanding shares of common stock (the “Common Stock”), at any ratio not less than 1-for-10 and not greater than 1-for-30 (the “Reverse Stock Split”).
On May 24, 2016, the Board of Directors approved the Reverse Stock Split with a ratio of 1-for-10. On May 24, 2016, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation, as amended (the “Certificate of Amendment”), with the Secretary of State of the State of Delaware to effect a 1-for-10 reverse stock split of the Common Stock effective as of 12:01 a.m., Eastern Time on May 25, 2016. As a result of the Reverse Stock split, every ten shares of the Company’s Common Stock will be automatically combined into one issued and outstanding share of the Company’s Common Stock, without any change in the par value per share. No fractional shares will be issued as a result of the Reverse Stock Split. Any fractional shares resulting from the Reverse Stock Split will be rounded up to the nearest whole share.
Commencing on May 25, 2016, trading of the Company’s Common Stock will continue on the NASDAQ Capital Market on a reverse stock split-adjusted basis. The Company’s trading symbol will remain “NETE.” The new CUSIP number for the Company’s Common Stock following the Reverse Stock Split is 64111R201.
A copy of the Certificate of Amendment is filed herewith as Exhibit 3.1 and incorporated herein by reference. This discussion is qualified in its entirety by reference to the full text of the Certificate of Amendment.
| Item 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year |
The information set forth in Item 3.03 of this Current Report on Form 8-K is incorporated herein by reference.
| Item 8.01 | Other Events. |
On May 24, 2016, the Company issued a press release announcing the Reverse Stock Split. A copy of the press release is filed herewith as Exhibit 99.1 and is incorporated by reference herein.
| Item 9.01 | Financial Statements and Exhibits |
| (d) | Exhibits |
| 3.1 | Certificate of Amendment to Amended and Restated Certificate of Incorporation, as amended, of Net Element, Inc. |
| 99.1 | Press Release of Net Element, Inc., dated May 24, 2016. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: May 24, 2016
| NET ELEMENT, INC. | ||
| By: | /s/ Jonathan New | |
| Name: Jonathan New | ||
| Title: Chief Financial Officer | ||
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EXHIBIT INDEX
| Exhibit No. | Description |
| 3.1 | Certificate of Amendment to Amended and Restated Certificate of Incorporation, as amended, of Net Element, Inc. |
| 99.1 | Press Release of Net Element, Inc., dated May 24, 2016. |
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Exhibit 3.1
CERTIFICATE OF AMENDMENT
TO THE AMENDED AND RESTATED CERTIFICATE OF NET ELEMENT, INC.
Net Element, Inc. (the "Corporation"), a corporation organized and existing under the General Corporation Law of the State of Delaware, hereby certifies as follows:
1. The Corporation filed its original Certificate of Incorporation with the Secretary of State of the State of Delaware on October 2, 2012 (the "Original Certificate").
2.
The Corporation amended and restated the Original Certificate by filing the Corporation's Amended and Restated Certificate
of Incorporation with the Secretary of State of the State of Delaware on October 2, 2012 (the "Amended and Restated Certificate").
3. The Corporation amended the Amended and Restated Certificate by filing (i) an amendment thereto with the Secretary of State of the State of Delaware on December 5, 2013, (ii) an amendment thereto with the Secretary of State of the State of Delaware on December 16, 2014, and (iii) an amendment thereto with the Secretary of State of the State of Delaware on June 15, 2015 (together with the Amended and Restated Certificate, as amended, the “Certificate.”)
4. This Certificate of Amendment amends the provisions of the Certificate.
5. Article IV Section A of the Certificate is hereby amended by adding the following paragraph at the end of such Section A:
“Upon the filing and effectiveness (the “Effective Time”) pursuant to the Delaware General Corporation Law of this Certificate of Amendment to the Restated Certificate of Incorporation of the Corporation, each ten (10) shares of Corporation’s common stock, par value $0.0001 per share (“Common Stock”), issued and outstanding immediately prior to the Effective Time shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one (1) share of Common Stock (the “Reverse Stock Split”). No fractional shares shall be issued in connection with the Reverse Stock Split. Stockholders who otherwise would be entitled to receive fractional share interests of Common Stock as a result of the Reverse Stock Split shall be entitled to receive in lieu of such fractional share interests, upon the Effective Time, one whole share of Common Stock in lieu of such fractional share interests.”
6. Pursuant to resolution of the Board of Directors of the Corporation setting forth this proposed amendment of the Certificate, declaring said amendment to be advisable and calling a meeting of the stockholders of said corporation for consideration and approval, among other agenda items, of this proposed amendment, a special meeting of the stockholders of said corporation was duly called and held upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware, at which meeting the necessary number of shares as required by statute were voted in favor of the amendment.
7. This amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.
8. The Effective Time of this amendment is May 25, 2016 at 12:01 a.m. Eastern Time.
9. All other provisions of the Certificate shall remain in full force and effect.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed this 24 th day of May, 2016.
| NET ELEMENT, INC., a Delaware corporation | ||
| By: | /s/ Steven Wolberg | |
| Name: | Steven Wolberg | |
| Title: | Chief Legal Officer |
Exhibit 99.1
Net Element Announces Reverse Stock Split
MIAMI, FL – May 24, 2016 - Net Element, Inc. (NASDAQ: NETE) (“Net Element” or the “Company”), a provider of global mobile payment technology solutions and value-added transactional services, today announced that effective at 12:01 am, Eastern Time, on May 25, 2016 (“Effective Date”), the Company will effect a one-for-ten reverse stock split (the “Reverse Stock Split”) of its outstanding common stock. The Company’s common stock will open for trading on the NASDAQ Capital Market on May 25, 2016 on a post-split basis.
Net Element will host a conference call on Tuesday, May 24, 2016 at 4:30pm Eastern Time to discuss the reverse stock split and provide business highlights for first quarter 2016. The conference call can be accessed by dialing +1(877) 303-9858, or for international callers +1(408) 337-0139, interested participants are encouraged to call approximately 10 minutes prior to the start of the call. The conference call will also be webcast live at http://edge.media-server.com/m/p/7gbnd96i.
“We believe this reverse stock split is an important step in attracting a broader spectrum of investors and regaining compliance with NASDAQ,” commented Oleg Firer, CEO of Net Element. “The board and management of Net Element consider NASDAQ listing as an important tool to support stock liquidity and company recognition for Net Element’s stockholders.”
The Reverse Stock Split is intended to increase the per share trading price of the Company’s common stock to satisfy the $1.00 minimum bid price requirement for continued listing on the NASDAQ Capital Market. When the reverse stock split becomes effective, every ten (10) shares of common stock will automatically convert into one (1) share of common stock with no change in par value per share. This will reduce the number of shares outstanding as of May 25 th , 2016 from approximately 115,169,896 to approximately 11,516,990. Any fractional shares resulting from the reverse stock split will be rounded up to the next whole share. There is no impact on the actual trading of Net Element’s shares. They will continue to trade on the NASDAQ Capital Market without interruption under the symbol NETE. The new CUSIP number for the common stock following the reverse split will be 64111R201.
Proportional adjustments will be made to Net Element’s outstanding stock options, outstanding warrants and equity-compensation plans. The number of authorized shares of the Company will remain unchanged and the reverse stock split will not affect the common stock capital account on our balance sheet.
Stockholders holding common shares though a brokerage account or book entry form will have their shares automatically adjusted to reflect the reverse stock split as of the effective date. The Company’s transfer agent, Continental Stock Transfer & Trust Company will act as the exchange agent for the reverse stock split. If you have shares held a brokerage or bank, you can contact them directly with any questions. If you hold shares in book entry form or you hold physical certificates, you should contact Continental at 917-262-2378.
About Net Element
Net Element, Inc. (NASDAQ: NETE) operates a payments-as-a-service transactional and value-added services platform for small to medium enterprise (“SME”) in the US and selected emerging 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, Kyrgyzstan and Azerbaijan where initiatives have been recently launched. 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 reverse stock split will be beneficial to the Company and its stockholders, whether the reverse stock split will result in the Company regaining NASDAQ listing requirements or attract a broader universe of investors, 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:
Net Element, Inc.
media@netelement.com
+1 (786) 923-0502