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 ) June 13, 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
Identification No.)

 

 

  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 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

 

On June 16, 2016, Net Element, Inc. (the “Company”), after the requisite approval by the Company’s stockholders at the 2016 annual meeting of stockholders of the Company (the “Annual Meeting”), amended its Amended and Restated Certificate of Incorporation by filing with the Secretary of State of the State of Delaware a Certificate of Amendment to its Amended and Restated Certificate of Incorporation, which increased authorized common stock of Net Element, Inc. to 400 million shares.

 

The foregoing is only a brief description of the terms of the Certificate of Amendment, does not purport to be a complete description of the Certificate of Amendment, and is qualified in its entirety by reference to the Certificate of Amendment which is filed as Exhibit 3.1 to this Current Report on Form 8-K and incorporated by reference herein.

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

On June 15, 2016, the Company, after the requisite approval by the Company’s stockholders at the Annual Meeting, amended its 2013 Equity Incentive Plan, as amended (the “Plan”), to (a) increase the number of shares of the Company’s common stock available for issuance thereunder to 22,610,000 shares (to be adjusted for the reverse stock split of May 25, 2016) of the Company’s common stock, which represents approximately 20% of our issued and outstanding common stock; (b) increase the limitation on individual grants of (i) Options or Stock Appreciation Rights (each as defined in the Plan) during any 12-month period that are intended to comply with the performance-based exception under Section 162(m) of the Internal Revenue Code of 1986 (as amended) (the “Code”) with respect to more than 5,000,000 shares (to be adjusted for the reverse stock split of May 25, 2016) of Company common stock or (ii) Restricted Shares, Performance Units and/or Performance Shares (each as defined in the Plan) in any 12-month period that are intended to comply with the performance-based exception under Section 162(m) of the Code and are denominated in shares of the Company common stock with respect to more than 5,000,000 shares (to be adjusted for the reverse stock split of May 25, 2016) of Company common stock; and (c) add a new Section 2.3 to the Plan to establish the maximum dollar value of awards granted under the Plan to any one non-employee director during any 12-month period to not exceed $200,000 (the “Plan Amendment”).

 

The form of the Plan Amendment was previously filed as Appendix “B” to the Company’s definitive proxy statement on Schedule 14A filed with the Securities and Exchange Commission on April 25, 2016.

 

Item 5.07 Submission of Matters to a Vote of Security Holders.

 

The Company held its Annual Meeting on June 13, 2016. The matters voted upon at the Annual Meeting and the results of such voting are set forth below.

 

Proposal 1 : To elect six directors of the Company, four of whom shall be independent directors as defined by applicable rules, to serve for a one-year term expiring in 2017.

 

Name of Director   For   Withheld   Broker Non-Vote
             
Oleg Firer   46,929,836   409,816   26,243,898
             
Kenges Rakishev   47,036,437   303,215   26,243,898
             
William Healy   46,708,464   631,188   26,243,898
             
James Caan   46,865,549   474,103   26,243,898
             
Drew Freeman   46,896,733   442,919   26,243,898
             
Howard Ash   46,982,179   357,473   26,243,898
             

All director nominees were duly elected.

   

 

 

 

 

Proposal 2 : To approve an amendment to the Company’s Amended and Restated Certificate of Incorporation to increase authorized common stock, par value $0.0001 per share (the “Common Stock”) to 400 million shares.

 

For   Against   Abstain    
60,867,995   15,634,342   81,213    

 

Proposal 2 was approved.

 

Proposal 3 : To approve an amendment to the Company’s 2013 Equity Incentive Plan, as amended (the “Plan”), to (a) increase the number of shares of the Company’s common stock available for issuance thereunder to 22,610,000 shares (to be adjusted for the reverse stock split of May 25, 2016) of the Company’s common stock, which represents approximately 20% of our issued and outstanding common stock; (b) increase the limitation on individual grants of (i) Options or Stock Appreciation Rights (each as defined in the Plan) during any 12-month period that are intended to comply with the performance-based exception under Section 162(m) of the Internal Revenue Code of 1986 (as amended) (the “Code”) with respect to more than 5,000,000 shares (to be adjusted for the reverse stock split of May 25, 2016) of Company common stock or (ii) Restricted Shares, Performance Units and/or Performance Shares (each as defined in the Plan) in any 12-month period that are intended to comply with the performance-based exception under Section 162(m) of the Code and are denominated in shares of the Company common stock with respect to more than 5,000,000 shares (to be adjusted for the reverse stock split of May 25, 2016) of Company common stock; and (c) add a new Section 2.3 to the Plan to establish the maximum dollar value of awards granted under the Plan to any one non-employee director during any 12-month period to not exceed $200,000.

 

For   Against   Abstain   Broker Non-Vote
44,277,468   2,853,019   209,165   26,243,898

 

Proposal 3 was approved.

 

Proposal 4 : To approve the issuance by the Company of restricted shares (to be adjusted for the reverse stock split of May 25, 2016) of Common Stock and options (to be adjusted for the reverse stock split of May 25, 2016) to purchase restricted shares of Common Stock (including restricted shares of Common Stock issuable upon the exercise of such options) issuable pursuant to the terms of that certain Second Additional Letter Agreement, dated January 21, 2016, as amended, by and between the Company and Kenges Rakishev, an accredited investor and a director of the Company, as required by and in accordance with NASDAQ Listing Rule 5635.

 

For   Against   Abstain   Broker Non-Vote
44,753,455   2,413,996   172,201   26,243,898

 

Proposal 4 was approved.

 

 

 

 

Proposal 5 : To approve the issuance by the Company of 5,791,717 restricted shares (to be adjusted for the reverse stock split of May 25, 2016) of Common Stock to the Company’s Chief Executive Officer, Oleg Firer, in lieu of and in satisfaction of accrued and unpaid compensation due to him in the amount of $1,042,509, as required by and in accordance with NASDAQ Listing Rule 5635.

 

For   Against   Abstain   Broker Non-Vote
44,860,333   2,434,177   45,142   26,243,898

 

Proposal 5 was approved.

 

 

Proposal 6 : To approve the issuance by the Company of 3,750,000 restricted shares (to be adjusted for the reverse stock split of May 25, 2016) of Common Stock to the Company’s Chief Executive Officer, Oleg Firer as a performance bonus, as required by and in accordance with NASDAQ Listing Rule 5635.

 

For   Against   Abstain   Broker Non-Vote
44,270,422   3,028,397   40,833   26,243,898

 

Proposal 6 was approved.

 

 

Proposal 7 : To approve the issuance by the Company of 1,000,000 restricted shares (to be adjusted for the reverse stock split of May 25, 2016) of Common Stock to the Company’s Chief Legal Officer, Steven Wolberg as a performance bonus, as required by and in accordance with NASDAQ Listing Rule 5635.

 

For   Against   Abstain   Broker Non-Vote
44,273,992   2,958,286   107,374   26,243,898

 

Proposal 7 was approved.

 

 

Proposal 8 : To approve, on an advisory basis, the compensation of the Company’s named executive officers.

 

For   Against   Abstain   Broker Non-Vote
44,592,378   2,582,839   164,435   263,243,898

 

Proposal 8 was approved.

 

 

Item 8.01 Other Events.

 

On June 16, 2016, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to its Amended and Restated Certificate of Incorporation, which increased authorized common stock of Net Element, Inc. to 400 million shares (after the requisite approval by the Company’s stockholders at the Annual Meeting).

  

 

 

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.   Description
3.1   Certificate of Amendment to Amended and Restated Certificate of Incorporation, to increase authorized common stock to 400 million shares.

 

 

 

 

 

 

 

 

 

 

 

 

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: June 15, 2016

 

  NET ELEMENT, INC.  
       
       
  By: /s/  Jonathan New  
  Name: Jonathan New  
  Title: Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

EXHIBIT INDEX

 

Exhibit No.   Description
3.1   Certificate of Amendment to Amended and Restated Certificate of Incorporation, to increase authorized common stock to 400 million shares.

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 3.1

 

CERTIFICATE OF AMENDMENT

TO THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO INCREASE
AUTHORIZED COMMON STOCK TO 400 MILLION SHARES

 

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 an amendment thereto with the Secretary of State of the State of Delaware on December 5, 2013, on December 16, 2014 and on June 15, 2015 (together with the Amended and Restated Certificate, the “Certificate.”)

 

4.           This Certificate of Amendment amends the provisions of the Certificate.

 

5.           Article IV Section A of the Certificate is hereby amended and restated in its entirety to be and read as follows:

 

" ARTICLE IV : A. The total number of shares of all classes of stock which the Corporation shall have authority to issue is 401,000,000 shares consisting of:

 

1. 400,000,000 shares of Common Stock, with a par value of $0.0001 per share (the “Common Stock”); and

 

2. 1,000,000 shares of Preferred Stock, with a par value of $0.01 per share (the “Preferred Stock”). "

 

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, an annual 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.           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 15 th day of June, 2016.

 

  NET ELEMENT, INC., a Delaware corporation  
       
       
  By: /s/ Steven Wolberg   
  Name: Steven Wolberg  
  Title: Chief Legal Officer and Secretary