Has anyone even bothered to read the S3 Filing or did they just jump to conclusion like most do best. Most of these shares were registered to cover the financing they already announced. This is not new dilution. It is shares be registered to cover the financing they already did. Being by law they had to registered more shares then what was actually done they had to issue more shares.
There are being registered under this registration statement an aggregate of up to 53,600,000 shares of Common Stock, which includes (i) shares of Common Stock issuable upon conversion of Senior Convertible Notes in the aggregate principal amount of $5,000,000 and interest of 7% per annum payable under certain conditions, due April 30, 2018 and any additional Senior Convertible Notes up to aggregate principal amount of $10,000,000 issuable pursuant to the Securities Purchase Agreement dated April 30, 2015 (collectively, the “Notes”) and (ii) shares of Common Stock issuable upon exercise of Registrant’s warrants to purchase such number of shares that equal 88% of the shares of Common Stock underlying the Notes (the “Warrants”). Pursuant to Rule 416 under the Securities Act of 1933, as amended (the “Securities Act”), there is also being registered such indeterminable number of additional shares of Common Stock, preferred stock, warrants, units and subscription rights as may be issued to prevent dilution resulting from share dividends, split-up, reverse split-up or similar events.
(2) In accordance with Rule 457(g) under the Securities Act, the proposed maximum offering price per security (and, accordingly, the amount of the registration fee) has been calculated pursuant to Rule 457(c) based on the average of the high and low trading price of shares of the Registrant’s Common Stock on June 5, 2015, as quoted on the NASDAQ Capital Market.
The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete and may be changed. The selling securityholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where this offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JUNE 9, 2015
PROSPECTUS
NET ELEMENT, INC.
Up to 53,600,000 Shares of Common Stock Offered by Selling Securityholders
This prospectus relates to the resale, from time to time, in one or more offerings, by certain selling securityholders (described in the section entitled “Selling Securityholders” on page 13 of this prospectus) of up to 53,600,000 shares of Common Stock of Net Element, Inc., a Delaware corporation (“us”, “we”, “our”, “Net Element” or the “Company”) in amounts, at prices, and on terms that will be determined at the time these securities are offered. This amount is calculated based on an expected (i) 25,000,000 shares of Common Stock that are issuable upon conversion of an aggregate principal amount of $5,000,000 and interest of 7% per annum on Senior Convertible Notes (the “Initial Notes”) and additional Senior Convertible Notes up to an aggregate principal amount of $10,000,000 (the “Additional Notes,” together with the Initial Notes, the “Notes”) issuable pursuant to the Securities Purchase Agreement dated April 30, 2015 (the “Securities Purchase Agreement”) and (ii) 28,600,000 shares of Common Stock, which equals 130% of the maximum number of shares of Common Stock underlying certain warrants issued in connection with the Initial Notes (the “Initial Warrants”) and additional warrants issuable in connection with the Additional Notes (the “Additional Warrants,” together with the Initial Warrants, the “Warrants”), which shares of Common Stock we are contractually obligated to reserve for issuance in connection with the exercise of the Warrants. Because we are contractually required to register 130% of the maximum number of shares of Common Stock, and the shares of Common Stock issuable upon exercise of the Warrants equals an amount equal to 88% of the shares of Common Stock underlying the Notes, the actual number of shares that will be issued may be less than the number of shares being offered by this prospectus. To the extent the shares offered by this prospectus are not issued pursuant to the terms of either the Notes or the Warrants, we will deregister them.
The selling securityholders may offer their shares from time to time directly or through one or more underwriters, broker-dealers or agents, in the over-the-counter market at market prices prevailing at the time of sale, in one or more privately negotiated transactions at prices acceptable to the selling securityholders, or otherwise, so long as our Common Stock is trading on The NASDAQ Capital Market or another listed exchange, or any OTC market, and, if not, sales may only take place at fixed prices. We are registering these shares of our Common Stock for resale by the selling securityholders named in this prospectus, or their transferees, pledgees, donees or assigns or other successors-in-interest that receive any of the shares as a gift, distribution, or other non-sale related transfer. We will not receive any proceeds from the sale of shares by the selling securityholders. These shares are being registered to permit the selling securityholders to sell shares from time to time, in amounts, at prices and on terms determined at the time of offering. The selling securityholders may sell this Common Stock through ordinary brokerage transactions, directly to market makers of our shares or through any other means described in the section entitled “Plan of Distribution” beginning of page 14. In connection with any sales of the Common Stock offered hereunder, the selling securityholders, any underwriters, agents, brokers or dealers participating in such sales may be deemed to be “underwriters” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”).
Our Common Stock is listed on The NASDAQ Capital Market under the symbol “NETE.” On June 8, 2015, the last reported price of a share of our Common Stock on The NASDAQ Capital Market was $0.63.
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