NETE Net Element Inc

On August 18, 2017, Net Element, Inc. (the “Company”) received a letter (the “Letter”) from the Nasdaq Listing Qualifications Staff (the "Staff") advising that the Staff had determined that, because the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2017 (the “June 30 Form 10Q”) reported stockholders’ equity of $1,975,435 is less than the $2.5 million requirement for continued listing, the Company no longer complies with Nasdaq Listing Rule 5550(b) (the “Rule”), which serves as an additional basis for delisting the Company’s securities from The Nasdaq Stock Market.

In anticipation of this deficiency, the Company addressed its plan for demonstrating compliance with the stockholders’ equity requirement at its hearing before the Nasdaq Hearings Panel (the “Panel”), which was the basis for the decision of the Panel to grant the Company an exception through October 20, 2017 to comply with the stockholders’ equity and $1.00 bid price requirements, as further described in Item 8.01 below and related press release of the Company dated August 21, 2017. Notwithstanding, the Staff was required to provide the Company with formal notice of the stockholders’ equity issue following the filing of the June 30 Form 10Q. While the Staff’s letter affords the Company the opportunity to make a further submission to the Panel addressing this issue, the Company does not intend to do so given that the Panel has already granted the Company the requested exception. Notwithstanding the foregoing, there can be no assurance that the Company will cure its stockholders’ equity or bid price deficiencies.

Except for the factual statements made herein, information contained in this report consists of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks, uncertainties and assumptions that are difficult to predict. Words and expressions reflecting optimism, satisfaction or disappointment with current prospects or future events, as well as words such as “believes,” “intends,” “considers,” “expects,” “plans,” and similar expressions, or the use of future tense, identify forward-looking statements, but their absence does not mean that a statement is not forward-looking. Such forward-looking statements are not guarantees of performance and actual actions or events could differ materially from those contained in such statements. For example, there can be no assurance that the Panel will grant the Company any relief from the delisting or that the Company can agree to or ultimately meet the specific requirements of any such relief, or remain listed on Nasdaq or otherwise be publicly traded. Reference is also made to other factors detailed from time to time in our periodic reports filed with the Commission. The forward-looking statements contained in this report speak only as of the date of this report and we undertake no obligation to publicly update any forward-looking statements to reflect new information, events or circumstances after the date of this report, unless required by law.