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 ) March 3, 2017

 

 

 

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 1.01 Entry into a Material Definitive Agreement.

 

On March 3, 2017, Net Element, Inc., a Delaware corporation (the “Company”), entered into an Amendment (the “Amendment”) to Master Exchange Agreement dated as of May 2, 2016 (the “Agreement”) with Crede CG III, Ltd., an exempted company incorporated under the laws of Bermuda (“Crede”). The Amendment extended the Outside Date (as defined in the Agreement) from December 31, 2016 to August 31, 2017, which extends the time prior to which the Company has the right, pursuant to the Agreement, to request Crede, and Crede agreed upon each such request, to exchange the promissory notes that are subject to the Agreement for shares of the Company’s common stock on the terms and conditions set forth in the Agreement (as previously disclosed in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 3, 2016).

 

The above description of the Amendment is intended as a summary only and is qualified in its entirety by the terms and conditions set forth therein. A copy of the Agreement is attached hereto as Exhibit 10.1 and is incorporated herein by this reference.

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The disclosure provided in Item 1.01 of this Report is hereby incorporated by reference into this Item 2.03.

 

Item 3.02 Unregistered Sales of Equity Securities.

 

The disclosure provided in Item 1.01 of this Report is hereby incorporated by reference into this Item 3.02.

 

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits

 

10.1 Amendment, dated as of March 3, 2017, to Master Exchange Agreement dated as of May 2, 2016 between the Company and Crede CG III, Ltd.

 

2  

 

 

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: March 7, 2017

 

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

 

3  

 

 

EXHIBIT INDEX

 

Exhibit No.   Description
     
10.1   Amendment, dated as of March 3, 2017, to Master Exchange Agreement dated as of May 2, 2016 between the Company and Crede CG III, Ltd.

 

4  

 

Exhibit 10.1

 

AMENDMENT TO MASTER EXCHANGE AGREEMENT

 

This Amendment to the Master Exchange Agreement (this “ Amendment ”) is effective as of March 3, 2017.

 

WHEREAS, Net Element, Inc., a Delaware corporation (the “ Company ”), and Crede CG III, Ltd., an exempted company incorporated under the laws of Bermuda (the “ Creditor ”), are parties to that certain Master Exchange Agreement, dated as of May 2, 2016 (the “ Agreement ”). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Agreement.

 

WHEREAS, the Company and Creditor desire to amend certain provisions of the Agreement, and Section 8(c) of the Agreement permits the Agreement to be amended by amended in writing signed by the Company and by the Creditor.

 

NOW THEREFORE, in consideration of the mutual covenants contained herein, the Company and the Creditor hereby agree that the Agreement shall be amended as follows:

 

1.                   Recitals . All of the recitals contained herein are true and correct and are incorporated herein by this reference.

 

2.                   Amendment . The first sentence in Section 1(a) of the Agreement is hereby amended and restated in its entirety by deleting such second sentence and replacing it with the following:

 

“Subject to the provisions of Section 1(d), at any time or times from the date hereof up to August 31, 2017 (the “ Outside Date ”), the Creditor shall be obligated to exchange upon the Company issuing an Exchange Notice (as defined below) the Tranche (in the amount specified in the Exchange Notice representing a portion of the outstanding and unpaid Existing Debt into validly issued, fully paid and non-assessable shares of Common Stock in accordance with Section 1(c), at the Exchange Rate (as defined below).”

 

3.                   Limited Effect . Except as expressly amended and modified by this Amendment, the Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.

 

4.                   Governing Law . This Amendment and the rights and obligations of the parties hereto shall be construed in accordance with and governed by the internal laws of the State of New York.

 

5.                   Counterparts . This Amendment may be executed simultaneously in any number of counterparts. Each counterpart shall be deemed to be an original, and all such counterparts shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Amendment in Portable Document Format (PDF) or by facsimile transmission shall be as effective as delivery of a manually executed original counterpart of this Amendment.

 

IN WITNESS WHEREOF, the parties to this Amendment have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the date first set forth above.

 

  NET ELEMENT, INC.
     
  By: /s/  Oleg Firer
  Name:    Oleg Firer
  Title: CEO
     
  CREDE CG III, LTD.
     
  By:   /s/ Terren Peizer
  Name: Terren Peizer
  Title: Managing Member