The closing payment is $3.6 million cash, which has been paid
into escrow and $3.6 million in stock. Additional consideration
from earn-out incentives up to $1.282 million in cash and stock
based on performance.
Net Element is entitled to the full economic benefit from the
acquisition of PayOnline from the effective date of the Acquisition
Agreement.
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. Card issuance is growing at 30% per year.
Net Element plans to integrate PayOnline leading payments
platform into its existing global payments-as-a-service network to
expand its transaction processing offerings.
Upon the closing of the acquisition, the Company will be able to
sell its mobile payment services to PayOnline's merchants who
process transactions for 10+ million active Russia, Asia and Europe
consumers.
Upon the closing of the acquisition, 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).
Also, because of their direct agreements with European and
Russian Federation banks, PayOnline's thousands of merchants will
be able to transact in the U.S. while Net Element's U.S. merchants
will have an ability to transact in Asia, Europe and Russia.
"PayOnline and Net Element's assets are highly complementary and
we can now leverage them to grow revenues by attracting more
merchants and consumers to our omni-channel payments platform,"
comments Oleg Firer, CEO. "Well deserved congratulations to all
involved in bringing this transaction to a successful signing."
Additional terms of this acquisition are disclosed in Net
Element's Form 8-K filed with the SEC today.
The parties intend to close this acquisition as soon as the
customary closing conditions are satisfied.
PayOnline majority shareholder Social Discovery Ventures ("SD
Ventures"), who now becomes a Net Element shareholder, and Net
Element intend to collaborate on business with SD Ventures' other
portfolio companies including Shocase, Shazam and Anastasia
Date.
About Net Element
Net Element (NASDAQ: NETE) is a global payments-as-a-service,
technology provider with an integrated mobile and transactional
services platform. Its wholly owned subsidiary, TOT Group operates
Aptito providing transaction processing and value-added services
utilizing a next generation, cloud-based, point of sale payments
platform. We also operate TOT Money, a leading mobile payments
service provider that has been ranked in the Top 3 mobile payments
providers by Beeline, Russia's second largest telecommunications
operator and, upon the closing of this acquisition, PayOnline which
is a leading online payment solution in Russia today. 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 acquisition of PayOnline will be beneficial
for the Company, whether PayOnline's payments platform will be
successfully integrated into the Company's existing network,
whether the acquisition will result in the expansion of the
Company's transaction processing offerings or result in cross
selling of the Company's mobile payment services to PayOnline's
merchants and whether Social Discovery Ventures ("SD Ventures") and
the Company will collaborate on any other business ventures . These
forward-looking statements include additionally, without
limitation, 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.