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Net Element Releases Letter to Shareholders

CEO Oleg Firer highlights milestones in 2018 and focus for the year ahead 

MIAMI, FL, Feb. 07, 2019 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE -- Net Element, Inc. (NASDAQ: NETE) (“Net Element” or the “Company”), a global technology and value-added solutions group that supports electronic payments acceptance in a multi-channel environment including point-of-sale (“POS”), today issues the following letter to shareholders from the Company’s chief executive officer, Oleg Firer:

Dear Fellow Shareholders,

The payments industry remained one of the bright spots in the financial services sector during 2018. Propelled by positive macroeconomic tailwinds, technological advances, and expanding digital and non-cash mechanisms, payments businesses globally are on track to add over $1 trillion in new revenue through 2027 (according to Global Payments 2018 report by the Boston Consulting Group). Exciting projects and disruptive technologies, like blockchain and Internet of Things (“IoT”), will provide us the opportunity to continue developing and delivering innovative payments solutions in 2019 and beyond.

For us, 2018 was a year of continued organic growth in the United States. We strengthened our competitive posture by focusing on value-added payment solutions, and along the way executed several complex initiatives, took bold steps to increase our gross margins, and were again regarded as one of the fastest growing technology companies in America. We are pleased to highlight the following achievements, which we believe are a strong catalyst for growth in the years ahead.

Accomplishments:

  • Acquired recurring cash flow portfolio from Argus Merchant Services. Acquisition is projected to add over $4 million in gross profits over the next 4 years
  • Completed acquisition of recurring cash flow portfolio from Universal Payment Systems. Acquisition is projected to add over $5 million in gross profits over the next 4 years
  • Ranked as one of the fastest growing companies in North America on Deloitte’s 2018 Technology Fast 500TM
  • Winner of two categories at ACQ5 Global Awards 2018, CEO named “Gamechanger of the Year”
  • Jon Najarian of CNBC “Halftime Report” and “Fast Money,” and Jonathan Fichman, fintech & startup executive joined Net Element’s board of directors 

Transaction Performance:

  • Achieved organic growth across all categories
  • Total transaction dollars processed during 2018 increased 18% to more than $3.3 billion compared to $2.8 billion in 2017
  • Total transaction dollars processed geographically in North American and international markets in 2018 were $2.9 billion and $354 million, respectfully
  • Total transactions processed for 2018 exceeded 149 million, a decline of 3% due to the consolidation of the mobile solutions business
  • North American segment transactions processed for 2018 increased 37% to 59 million compared to 43 million transactions in 2017

Partnerships: 

  • Entered into a partnership with Payment Club for subscription-based payment processing services for small businesses. New agreement projected to add over $1.5 million in gross profits over the next 4 years
  • Partnered with VIP Systems to launch seamless payments for the hospitality industry. New offering targets the multi-billion dollar travel and hospitality industry
  • Entered into a joint venture with Bank Sputnik to launch a new payment processing center that will enable financial institutions and value-added providers to meet consumer demand for secure frictionless payment acceptance services

Product launches:

  • Launched Netevia, future-ready multi-channel payments platform
  • Launched multi-channel blockchain powered payments acceptance application as part of the Netevia platform
  • Launched subscription-based payment processing services for small businesses. New offering targets the multi-billion dollar subscription economy
  • Launched Netevia Light POS, a seamless and secure mobile payments acceptance software available on smart terminals by PAX Technology
  • Launched Aptito on the world’s first smart payment terminal. This comprehensive POS solution is now available for restaurants on the Poynt Smart Payment terminal
  • Launched compliant payments solution for the legal cannabis industry.  This new secure and regulatory compliant offering targets the fast growing cannabidiol (“CBD”) industry
  • Launched Netevia Smart Vendor payment solutions for B2B sales, breaking into the $7.7 trillion B2B sales market
  • Launched an intelligent payments solution that addresses the needs of North America’s $845 billion events industry
  • Launched “Fast Pass Funding”, a same-day funding service available through our Netevia platform. 

Moving forward, exciting projects and disruptive technologies like blockchain and Internet of Things (“IoT”) will provide us the opportunity to continue developing and delivering innovative payments solutions. We remain focused on reaching sustainable profitability for the Company, and expanding and monetizing value-added services around Netevia, our future-ready multi-channel payments platform.

On behalf of our entire team, I want to personally thank all of you for your continued support.

Sincerely,

Oleg Firer
Executive Chairman 
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 U.S. and selected emerging markets. In the U.S., the Company aims to grow transactional revenue by innovating SME productivity services using various technology solutions and Aptito, our cloud-based, restaurant and retail point-of-sale solution. 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. Net Element was ranked as one of the fastest growing companies in North America on Deloitte's 2017 and 2018 Technology Fast 500™. In 2017 we were recognized by South Florida Business Journal as one of 2016's 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. An example of such risk and uncertainty is whether the Company will be successful in developing additional innovative payments solutions in the future;  whether the projected gross profits from the acquisition of the referenced recurring cash flow portfolios will materialize; whether the projected gross profits from the partnership agreement with Payment Club will be realized; and whether the Company will be successful with its 2019 initiatives.  Additional 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; and (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.

Contact:
Net Element, Inc.
+1 (786) 923-0502
www.NetElement.com
Media@NetElement.com

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