MIAMI, FL–(May 15, 2015) –  Net Element, Inc. (NASDAQ: NETE) (“Net Element” or the “Company”), a technology provider in global mobile payments and value-added transactional services, today announced the scheduling of a conference call at 2:30 PM Eastern Time Monday, May 18, 2015 to review operating results for its fiscal first quarter ended March 31, 2015.

Participating will be Net Element chief executive Oleg Firer and chief financial officer Jonathan New both of whom will discuss operational and financial highlights.

Conference Call Information

Date: Monday, May 18, 2015
Time: 2:30 PM Eastern Time

Conference ID: 49977269

Participant Toll-Free Dial-In Number: (877) 303-9858
Participant International Dial-In Number:(Outside of the U.S. & Canada): (408) 337-0139

To join the live conference call, please dial into the above referenced telephone numbers five to ten minutes prior to the scheduled conference call time.

An archive of the call will also be available on Net Element’s website at: http://www.netelement.com/en/ir.

The company also reported financial results for its first quarter (ended March 31, 2015).

Key Q1 milestones and subsequent events:

• Reduced adjusted quarterly net loss year over year from $0.11 to $0.04
• Executed financing of up to $24 million
• Agreed to acquire global payments innovator PayOnline
• Surpassed 1 million recurring Russia mobile payment subscribers
• Launched UAE-based joint venture to exclusively deliver Net Element payment-as-a-service solutions to Gulf states and India markets
• Provided payment solutions for the 2015 College Football Playoff National Championship presented by AT&T
• Appointed industry veteran Eric Kirk as Aptito Executive Vice President
• Aptito named 2014’s most innovative product and wins silver in Best in Biz Awards
• Sales Central version 1.2 released, a cloud-based, proprietary management portal for Net Element sales partners
• Upgraded Aptito mPOS software to version 2.3 powerful all-in-one hospitality solution

“We’re pleased with our continued growth in revenues and reduced costs for the first quarter of 2015,” commented Oleg Firer, CEO. “Going forward we will continue to focus on increased gross margins through acquisitions and providing additional, higher margin services such as Aptito.”

Non GAAP Discussion

In an effort to present a more comparative, period on period analysis, we have adjusted net loss to remove the effects of non-cash share based compensation. The adjusted net loss for the three months ended March 31, 2015 was $1,646,584 or a loss of $0.04 per share as compared to an adjusted net loss of $3,569,968 or a loss of $0.11 per share for the three months ended March 31, 2014. The adjusted net loss reduction of $1,923 thousand was due to reductions of the following:

Net revenues were $5,540,207 for the three months ended March 31, 2015 as compared to $4,843,479 for the three months ended March 31, 2014 and $5,411,986 for the three months ended December 31, 2014. The increase in net revenues is primarily a result of previous quarter purchases of portfolios and organic net increases in merchants. This was offset by a decrease in the mobile payment processing revenues due to restructuring of our mobile payments business which affected the second quarter of 2014 and periods forward.

Gross Margin for the three months ended March 31, 2015 was $926,135 (17%) as compared to $1,314,985 (27%) for the three months ended March 31, 2014. The primary reason for the decrease in the margin percentage was a continuing change in business mix and portfolio composition. Our business mix had lower margin transaction processing volume in the three months ended March 31, 2015 versus 2014.

General and administrative expenses, excluding non-cash compensation were $2,036,098 for the three months ended March 31, 2015 as compared to $3,089,895 for the three months ended March 31, 2014. The reduction of $1,053,797 was primarily due to transaction losses incurred during the first quarter of 2014 that did not occur in the first quarter of 2015.

Non-cash compensation expense from share-based compensation was $601,371 for the three months ended March 31, 2015 compared to $52,050 for the three months ended March 31, 2014. The non-cash compensation expenses were higher for the three months ended March 31, 2015 primarily due to first quarter vesting of stock issued in the third and fourth quarters of 2014.

Depreciation and amortization expense was $438,769 for the three months ended March 31, 2015 as compared to $591,699 for the three months ended March 31, 2014. The $152,930 decrease in depreciation and amortization expense was primarily due to purchased merchant portfolios reaching full amortization during 2014.

Interest expense was $117,594 for the three months ended March 31, 2015 as compared to $1,061,480 for the three months ended March 31, 2014, representing a decrease of $943,886. The decrease is due to reduced debt outstanding of $4 million at March 31, 2015 as compared to $29 million of notes payable and short term loans outstanding at March 31, 2014.

Reconciliation of Non-GAAP Financial Measures and Regulation G Disclosure

To supplement its consolidated financial statements presented in accordance with United Stated generally accepted accounting principles (“GAAP”), the Company provides additional measures of its operating results by disclosing its adjusted net loss . Adjusted net loss is calculated as net loss excluding non-cash share based compensation and other one-time, non-recurring items not present in this quarter or same quarter last year results. Net Element discloses this amount on an aggregate and per share basis. These measures meet the definition of non-GAAP financial measures. The Company believes that application of these non-GAAP financial measures is appropriate to enhance the understanding of its historical performance through use of a metric that seeks to normalize period to period earnings.

This press release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. Pursuant to Regulation G, a reconciliation of these non-GAAP financial measures with the comparable financial measures calculated in accordance with GAAP for the three months ended March 31, 2015 and 2014 is presented in the following Non-GAAP Financial Measures Table.

About Net Element
Net Element (NASDAQ: NETE) is a global payments-as-a-service, technology provider with an integrated mobile and transactional services platform serving millions of emerging market clients. Its wholly owned subsidiary, TOT Group operates Unified Payments, a U.S. focused transaction processing and value-added services brand, Aptito, a next generation, cloud-based point of sale payments platform and TOT Money, a leading mobile payments service provider that is gaining significant traction in the mobile payments market in Russia and for two consecutive years, has been ranked in the Top 3 mobile payments providers by Beeline, Russia’s second largest telecommunications operator. 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 Net Element will conclude further acquisitions or be able to offer additional higher margin services, 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.