Net Element Announces up to $20 Million Financing: $15 Million Credit Facility and Agreement to Exchange up to $5 Million of Existing Debt
MIAMI, FL–(Marketwired – May 4, 2016) – Net Element, Inc. (NASDAQ: NETE) (“Net Element” or the “Company”), a provider of global mobile payment technology solutions and value-added transactional services, announced today that it has completed the closing of a renewal and increase to $15 million of the credit facility from payments industry-leader lender, RBL Capital Group, LLC (“RBL Capital”) and entered into a debt exchange agreement (“Exchange Agreement”) with Crede CG III, Ltd. (“Crede”), a wholly owned subsidiary of Crede Capital Group, LLC. Under the Exchange Agreement, the Company has the ability to exchange up to $5 million of indebtedness under certain promissory notes through December 31, 2016.
The Company continues to grow rapidly with 89.5% growth in revenue in 2015 over the prior year. The $15 million credit facility extended to the Company by RBL Capital coupled with the debt exchange will be used to accelerate the Company’s organic and acquisition growth initiatives. This $15 million credit facility replaces the Company’s $10 million credit facility with RBL Capital that has expired.
In May 2015, the Company announced that it had partnered with RBL Capital to create Unified Prosperity Financing, a financial facility aimed at fueling the Company’s sales partner’s growth initiatives by allocating up to $50 million for merchant portfolio financing.
“RBL Capital is pleased to have this opportunity to support Net Element’s next phase of growth given the company’s proven growth over the past few years, highly efficient merchant acquisition capabilities, technological advancements and strong management team,” commented William W. Williams, speaking on behalf of RBL Capital. “Net Element is poised for growth and RBL Capital is excited to be a part of this growth.”
Pursuant to the terms and conditions of the Exchange Agreement, the Company will have the sole option to require Crede to exchange the referenced debt in tranches of $100,000 (such tranche amount could be increased or decreased subject to Crede’s consent) for shares of common stock of the Company on the terms and conditions set forth in the Agreement, each by providing three business days’ notice to Crede prior to each exchange.
“This financing will accelerate our growth initiatives as we expand our presence in the United States and selected emerging markets,” commented Oleg Firer, CEO of Net Element. “We are pleased to have transacted with Crede and to have the continued support of RBL Capital, which has been an integral partner in growing our business over the past several years.”
Additional information regarding these financings and the terms and conditions of these agreements may be found in Net Element’s Current Report on Form 8-K, which was filed with the Securities and Exchange Commission (SEC) on May 3, 2016 and May 4, 2016, and may be obtained from the SEC’s Internet website at https://www.sec.gov.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Crede Capital
Crede Capital Group, LLC (“Crede”) is a family office based in Los Angeles, New York, Beijing and Singapore. Crede has completed more than 100 investments in eleven countries on four continents, providing both growth capital as well as business support to emerging growth companies. More information is available at www.credecg.com.
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.
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 enhanced debt facility from RBL or the proposed pay down of the debt on the terms agreed to by the Company will positively impact the Company and its shareholders, 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) the Company’s issuances of the Company’s common stock from time to time in exchange for retiring the Company’s debt may cause substantial dilution to our existing stockholders and the sale of the shares of our common stock acquired by Crede in exchange for our debt could cause the price of our common stock to decline; (xiii) 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.
Net Element, Inc.