MIAMI, FL–(Jul 12, 2017) – Net Element, Inc. (NASDAQ: NETE) (“Net Element” or the “Company”), a global financial technology and value-added solutions group that supports electronic payments acceptance in an omni-channel environment spanning across point-of-sale (POS), e-commerce and mobile devices, today released the following letter to shareholders from the Company’s chief executive officer, Oleg Firer:

Dear Fellow Shareholders,

As we begin the second half of 2017, I would like to take this opportunity to recap our achievements for the first half of the year and discuss recent corporate events that contribute to our future.

To date, our focus has been on growing our business and creating an efficient, well-functioning company by laying the foundation for a scalable business. In this regard, we established the following priorities:

• Generate sales and expand our distribution network
• Create a scalable infrastructure
• Develop disruptive product offerings and further development of our technology

I am pleased to say that we have been successful in the execution of these priorities and that we are growing our business both domestically and internationally. We have re-organized our international operations and expect to see cost reductions beginning in the third quarter of 2017.

Unfortunately, our business success is not being reflected in our stock price. I fully understand that many of our shareholders are disappointed by the declining share price in 2017. I am personally a Net Element shareholder, and together with the members of senior management team have invested a significant amount of capital into the Company during 2016. In short, I understand your frustration. Be assured that we are working diligently to create a perpetual and sustainable cycle of growth that over time we hope will result in a gain for all our shareholders.

As evident from our public filings, on July 5 we received a notice from NASDAQ stating that our stock does not meet the requirements for continued listing. We have a hearing scheduled with NASDAQ on August 10, 2017, to present our plan to regain compliance. Delisting of our stock is stayed pending the outcome of the hearing. We will make every attempt to remain listed on NASDAQ, but under any and all circumstances we intend to remain a public entity.

As for liquidity, we recently obtained a subordinated $2.5 million credit line and we are working diligently to obtain a larger credit facility to replace our main existing credit facility at more favorable rates and terms.

We will continue communicating our developments to the investment community, and encourage shareholders and potential investors to visit our website and follow our social media channels, such as Facebook (https://www.Facebook.com/NetElement) and Twitter (https://Twitter.com/NeteInc), to stay informed and fully aware of new developments as they occur.

I continue to be excited and encouraged about Net Element’s potential and its future.

Sincerely,

Oleg Firer
Chief Executive Officer
Net Element, Inc.

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 and retail 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. Net Element was named in 2016 by South Florida Business Journal as one of the fastest growing technology companies. Further information is available at www.netelement.com.

Forward-Looking Statements
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. 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 whether the Company will be successful in its delisting appeal with Nasdaq, its expansion and growth endeavors and in entering into new partnerships; and even if it is successful in any or all of these endeavors, whether this will positively impact the Company or result in improved shareholder value. Additional examples of such risks and uncertainties are : (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, 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.
1-786-923-0502
media@netelement.com