Net Element, Inc. (NETE)

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They are voting in May to increase authorized shares four fold- from a little over 100 million to 400 million. that means 40 cent shares will be worth 10 cents and the the size of the reverse split will be 1:30? 1:50? Of course they have to increase the number of shares. Otherwise they would only have about 3 million shares outstanding after the RS. Am I missing something here? Is this a disaster in the making?



General



Net Element, Inc. (the "Company," "we," "us," or "our") is a Delaware corporation with its principal executive offices located at 3363 NE 163rd Street, Suite 705, North Miami Beach, Florida 33160. The Company's telephone number is [phone]. Unless you elected to receive printed copies of the proxy materials in prior years, you will receive a Notice of Internet Availability of Proxy Materials by mail (the “Internet Notice”). The Internet Notice will tell you how to access and review the proxy materials. If you received an Internet Notice by mail and would like to receive a printed copy of the proxy materials, you should follow the instructions included on the Internet Notice. The Internet Notice is first being sent to shareholders on or about April [___], 2016. The proxy statement and the form of proxy relating to the annual meeting are first being made available to shareholders on or about April [_____], 2016.



The 2016 annual meeting of shareholders will be held on May [____], 2016, at 11:00 am, local time, at the Company’s offices located at 3363 NE 163rd Street, Suite 705, North Miami Beach, Florida 33160.



We are paying the cost of this solicitation. In addition to solicitation by mail, proxies may be solicited in person or by telephone, e-mail, facsimile or other means by our officers or regular employees, without paying them any additional compensation or remuneration. Arrangements have also been made with brokers, dealers, banks, voting trustees and other custodians, nominees and fiduciaries to forward proxy materials and annual reports to the beneficial owners of the shares held of record by such persons, and we will, upon request, reimburse them for their reasonable expenses in so doing.



A copy of our annual report for the fiscal year ended December 31, 2015 (which includes our audited financial statements for the two fiscal years ended December 31, 2015) is accessible via the Internet at our web site (http://www.netelement.com), and copies of the annual report will be provided to any shareholder promptly upon request. Such annual report is not, however, incorporated into this proxy statement and it is not to be deemed a part of the proxy soliciting material.



Purpose of the Annual Meeting



The following matters are being submitted for a vote at the annual meeting


1. To elect six directors of the Company, four of whom shall be independent directors as defined by applicable rules, to serve for a one-year term expiring in 2017.

2. To approve an amendment to the Company’s Amended and Restated Certificate of Incorporation to increase authorized common stock, par value $0.0001 per share (the “Common Stock”) to 400 million shares.


3. To approve an amendment to the Company’s 2013 Equity Incentive Plan, as amended, to increase the number of shares of the Company’s common stock available for issuance thereunder to 22,610,000 shares of the Company’s common stock, which represents approximately 20% of our issued and outstanding common stock.


4. To approve the issuance by the Company of restricted shares of Common Stock and options to purchase restricted shares of Common Stock (including restricted shares of Common Stock issuable upon the exercise of such options) issuable pursuant to the terms of that certain Second Additional Letter Agreement, dated January 21, 2016 (the “Second Letter Agreement”), by and between the Company and Kenges Rakishev, an accredited investor and a director of the Company, as required by and in accordance with NASDAQ Listing Rule 5635.



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5. To approve the issuance by the Company of restricted shares of Common Stock to the Company’s Chief Executive Officer, Oleg Firer, (i) in lieu of and in satisfaction of accrued and unpaid compensation due to him in the amount of $1,042,509 and (ii) as an additional performance bonus, and to the Chief Legal Officer, Steven Wolberg, as a performance bonus, in each case as required by and in accordance with NASDAQ Listing Rule 5635.


6. To approve, on an advisory basis, the compensation of the Company’s named executive officers.


7. To transact such other business as may properly come before the annual meeting or any postponement or adjournment thereof.