- Proxy to shareholders seeks a reduction in Net Element’s common shares from 400 million to 100 million
- NETE reaches 30-month term stock purchase agreement with Cobblestone Partners
- Sets August 10 meeting with NASDAQ to present plan for listing compliance
Net Element, Inc. (NASDAQ: NETE) has proposed to shareholders a reverse split of its common stock at a ratio of between 1-for-10 and 1-for-30 on the proxy at its annual meeting in 2017 (http://dtn.fm/mod3S). It also plans to put to a vote of shareholders a reduction in common stock from 400 million shares to 100 million shares in the hope that fewer shares will result in an increase in the market price of its common shares.
NETE is a cloud-based global financial company that accepts electronic payments in an omni-channel environment. It processes payments in what is becoming a cashless economy at point-of-sale and on mobile devices. It also offers clients management tools in its systems. A Zack’s Research Report (http://dtn.fm/1uNBd) projects that the company will generate revenues of $74.6 million by 2018.
In the SEC filing of the proxy (http://dtn.fm/lIbk9), NETE said that it will appeal the NASDAQ market’s deficiency letter in a meeting on August 10. NETE said the purpose of the reverse stock split amendment is to decrease the number of outstanding shares of common stock and potentially increase the market price of its common stock. A stay of the decision by NASDAQ is in effect pending an appeal by the company.
“The company is considering several paths to regain compliance with the minimum bid price requirement, including, among other things, a reverse stock split,” the company said in the filing.
The proxy also detailed its July 5, 2017, agreement with Cobblestone Partners, LLC, to purchase up to an aggregate of $10 million of NETE’s common stock over the 30-month term of the purchase agreement. Proceeds from the agreement will be used by the company for working capital and general corporate purposes. The proposal, approved by shareholders in the proxy, would permit Cobblestone Partners to buy in excess of 19.99% of NETE’s outstanding shares, as per NASDAQ rules.
In a letter to shareholders (http://dtn.fm/i2aLL), NETE management also said that it has a program of cost cuts that should be realized by the third quarter of 2017.
For more information, visit the company’s website at www.NetElement.com