MIAMI, FL - (NewMediaWire) - August 04, 2015 - Net Element, Inc. (NASDAQ: NETE) ("Net Element" or the "Company"), a provider of global mobile payment technology solutions and value-added transactional services today presented historical financial results for PayOnline for periods prior to our ownership.
PayOnline acquisition creates a unique platform for further consolidation and positions the Company to lead in the fragmented and growing emerging market payments industry.
Acquisition of PayOnline
As previously reported, on May 20, 2015, Net Element entered into a definitive agreement with PayOnline pursuant to which Net Element is to acquire PayOnline for up to $8.4 million in total consideration. The closing payment is $3.6 million cash, which has been paid into escrow and $3.6 million in Net Element stock. There is the potential for additional consideration of up to $1.282 million in cash and stock from earn-out incentives based on performance.
Net Element assumed operational and financial control of PayOnline and its subsidiaries as of May 20, 2015, and will consolidate PayOnline results in the second quarter from May 20, 2015 to June 30, 2015.
PayOnline processes online payments for over 10 million active consumers and thousands of merchants in the Russian Federation, Europe and Asia.
The 2014 McKinsey Global Payments Map released October 2014, states Russia is the world's 6th largest payments market, accounting for $50 billion in payments with a rapidly growing online population. They state that Card issuance is growing at 30% per year.
Net Element plans to integrate PayOnline's payments platform into its existing global payments-as-a-service network to expand its transaction processing offerings.
Upon integration, Net Element global merchants will have access to a broad array of value-added services including card2card transfer, payment split and the highest level of data security (Validated Level 1 PCI DSS Compliance).
- On July 28, 2015, PayOnline released an updated solution for the travel industry. PayOnline's Pay-Travel product provides an industry solution to automated payments for the travel industry including integration with GDS;
- On June 29, 2015, PayOnline announced signing of a 3-year contract to process transactions for certain international dating networks, including AnastasiaDate, AmoLatina and AsianDate. The contract provides for a minimum processing commitment of $300 million in transactions over 3 years and minimum net revenues to PayOnline in the amount of $1.2 million over contract period;
- On June 4, 2015, PayOnline launched payment processing in Kazakhstan by integrating with Kazkommertsbank ("KAZKOM"), Kazakhstan's largest bank and signed with Kassir.com, the country's largest online events ticketing website and one of the largest online merchants serving in the Kazakhstan market.
Additional information regarding Net Element's results of operations can be found in Net Element's report on Form 8-K/A, which was filed with the Securities and Exchange Commission (SEC) on August 3, 2015 and may be obtained from the SEC's Internet website at http://www.sec.gov.
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.
PayOnline provides flexible high-tech payment solutions to companies doing business on the Internet. They have wide experience in integration and customization of payment solutions for websites and mobile apps. They are able to arrange payments on the website of any commercial organization that increases convenience with highest possible level of successful transactions. Thousands of companies in CIS, Europe and Asia use PayOnline to accept payments online. PayOnline offices are located in Russia and in the Republic of Cyprus. For more information, please visit: www.payonline.ru/en or www.payonline.ru.
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 integration of PayOnline's payments platform into its existing global payments-as-a-service network will occur, whether the Company will be successful in selling its mobile payment services to PayOnline's merchants, whether the enhanced Pay-Travel platform will have any direct or indirect benefits to PayOnline or the Company, 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.