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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNITED STATES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">WASHINGTON, D.C. 20549</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FORM 8-K</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">CURRENT REPORT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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    <TD STYLE="width: 50%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center">Date of Report (Date of earliest event reported):</TD>
    <TD STYLE="width: 50%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center">June 12, 2012</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Cazador Acquisition Corporation Ltd.</B></P>

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<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Exact name of registrant as specified in
its charter)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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    <TD STYLE="width: 32%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Cayman Islands</TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 32%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">001-34887</TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 32%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">98-0668024</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(State or other jurisdiction</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">of incorporation)</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Commission</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(File Number)</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(I.R.S. Employer</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Identification No.)</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 66%; vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">BBVA Building, P1</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">254 Mu&ntilde;oz Rivera Avenue</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">San Juan, Puerto Rico</P></TD>
    <TD STYLE="width: 2%; vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 32%; vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">00918</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">(Address of principal executive offices)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">(Zip Code)</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Registrant&rsquo;s telephone number, including area code:</TD>
    <TD STYLE="width: 50%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">(787) 993-9650</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Wingdings">x</FONT></TD><TD STYLE="text-align: justify">Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)</TD>
</TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD><TD STYLE="text-align: justify">Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)</TD>
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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD><TD STYLE="text-align: justify">Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))</TD>
</TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD><TD STYLE="text-align: justify">Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))</TD>
</TR></TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item 1.01 Entry into a Material Definitive Agreement.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 12, 2012, Cazador
Acquisition Corporation Ltd. (the &ldquo;<U>Company</U>&rdquo;) entered into an Agreement and Plan of Merger (the &ldquo;<U>Merger
Agreement</U>&rdquo;) with Net Element, Inc., a Delaware corporation (&ldquo;<U>Net Element</U>&rdquo;). Subject to the terms and
conditions of the Merger Agreement, the Net Element will merge (the &ldquo;<U>Merger</U>&rdquo;) with and into the Company, resulting
in Net Element&rsquo;s ceasing to exist and the Company continuing as the surviving company in the Merger (the &ldquo;<U>Surviving
Company</U>&rdquo;). The Merger is intended to qualify as a tax-free reorganization. The Company is a blank check company whose
ordinary shares and warrants are listed on The NASDAQ Capital Market. The Company was incorporated on April 2, 2010 for the purpose
of effecting a merger, share capital exchange, asset acquisition, share purchase, reorganization or similar business combination
with one or more operating businesses or assets. Net Element develops and operates online media websites in the film, motorsport
and emerging music talent markets, and is developing additional sites and services in these markets as well as the legal information
and peer-to-peer application markets. Shares of Net Element&rsquo;s common stock are currently quoted on the OTCQB electronic quotation
system under the symbol &ldquo;NETE.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Following the Merger,
the Surviving Company is expected to retain Net Element&rsquo;s ticker symbol &ldquo;NETE&rdquo; upon Nasdaq&rsquo;s approval of
the Company&rsquo;s listing application, and as promptly as practicable after the effective time of the Merger, the Surviving Company
intends to change its name to &ldquo;Net Element International, Inc.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Consideration</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At the effective time
of the Merger, each share of common stock of the Net Element (&ldquo;<U>Net Element Shares</U>&rdquo;) issued and outstanding immediately
prior to the effective time of the Merger (other than Net Element Shares held by the Net Element as treasury stock or by any of
its direct or indirect wholly-owned subsidiaries, which will be cancelled at the effect time of the Merger, and Net Element Shares
with respect to which appraisal rights, to the extent available under the Delaware General Corporation Law (&ldquo;<U>DGCL</U>&rdquo;),
are properly exercised and not withdrawn) will be cancelled and converted into the right to receive 1/40 (or 0.025) of an ordinary
share of the Company (&ldquo;<U>Company Shares</U>&rdquo;) (in other words, subject to stockholders properly exercising appraisal
rights, to the extent available under the DGCL, every 40 issued and outstanding Net Element Shares will be converted into one Company
Share in the Merger). However, to the extent a holder of Net Element Shares would receive fewer than 100 Company Shares as a result
of this exchange ratio, the Company will have the right, exercisable in its sole and absolute discretion, to issue in the Merger
an additional number of Company Shares to bring such holder&rsquo;s aggregate Company equity holdings to 100 Company Shares. No
fractional Company Shares will be issued in the Merger; instead, the Company will issue one Company Share to the holder of any
Net Element Shares that would otherwise be entitled to receive a fraction of a Company Share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Conditions to Consummation of the Merger</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Consummation of the
Merger is subject to a number of conditions, including, among others: (i) that a registration statement on Form S-4 (the &ldquo;<U>Registration
Statement</U>&rdquo;) registering the Company Shares to be issued to Net Element&rsquo;s shareholders pursuant to the Merger must
have been declared effective by the Securities and Exchange Commission (the &ldquo;<U>SEC</U>&rdquo;); (ii) the Merger Agreement
must have been approved and adopted by the requisite number of Net Element stockholders; (iii) the Merger Agreement must have been
approved and adopted by the requisite number of Net Element&rsquo;s shareholders; (iv) the Company must have completed its conversion
into a Delaware corporation; (v) the Company Shares to be issued to Net Element&rsquo;s shareholders pursuant to the Merger must
have been approved for listing on The NASDAQ Capital Market; (vi) the Company must have at least $23,500,000 in cash held in its
trust account immediately after the effective time of the Merger (after giving effect to payment of all of the Company&rsquo;s
shareholders who exercise their redemption rights under the Company&rsquo;s organizational documents); (vii) all notes and payables
of Net Element and/or its subsidiaries owed to the Net Element&rsquo;s Chairman and Chief Executive Officer, Mike Zoi, or any of
his affiliates, that are outstanding as of the closing of the transactions under the Merger Agreement must be repaid immediately
after the effective time of the Merger; (viii) the Company must have received satisfactory evidence of the termination of the Shareholder
Rights Agreement, dated February 24, 2012, among Mark Global Corporation, Kenges Rakishev, Mike Zoi, TGR Capital, LLC, MZ Capital,
LLC (Delaware), MZ Capital, LLC (Florida), Enerfund, LLC and Net Element; and (ix) other customary closing conditions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Representations, Warranties and Covenants</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">The
Company and Net Element have made customary representations, warranties and covenants in the Merger Agreement, including, among
others, covenants (i) to prepare and file with the SEC a joint proxy statement/prospectus (which will be included in the Registration
Statement); (ii) to call and hold shareholder meetings of the Company and Net Element as soon as practicable after the date on
which the Registration Statement becomes effective for the purpose of voting upon the approval and adoption of the Merger Agreement
and, in the case of the Company, the conversion of the Company into a Delaware corporation; (iii) that, except as described in
the following paragraph, the Board of Directors of the Company (the &ldquo;<U>Company Board</U>&rdquo;) and the Board of Directors
of Net Element (the &ldquo;<U>Net Element Board</U>&rdquo;) will not withdraw or modify, or propose to withdraw or modify, in a
manner adverse to the other party, its approval or recommendation of the Merger Agreement or the Merger; and (iv) to use reasonable
efforts to consummate the Merger. From the date of the Merger Agreement until the effective time of the Merger, the Net Element
has agreed to conduct, and to cause its subsidiaries to conduct, their business in the ordinary course and in a manner consistent
with past practice and to use reasonable efforts to keep available the services of their current officers, employees and consultants
and to preserve their relationships with customers, suppliers and others with which they have significant business relations.</FONT>
<FONT STYLE="font-size: 10pt">From the date of the Merger Agreement until the earlier of the termination of the Merger Agreement
or the effective time of the Merger, the Company has agreed not to take any action that would reasonably be likely to prevent,
interfere with or materially delay the Merger.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Net Element has agreed
not to solicit or take any action to facilitate any inquiries or the making of any proposal or offer that constitutes, or may reasonably
be expected to lead to, any Competing Transaction (as defined in the Merger Agreement), and it must notify the Company if any proposal
or offer regarding a Competing Transaction is made. However, if an unsolicited, written, bona fide proposal or offer regarding
a Competing Transaction is made that the Net Element Board determines is a Superior Proposal (as defined in the Merger Agreement),
then Net Element may, under certain circumstances, furnish information to and enter into discussions with the person who has made
that proposal or offer. In the event that an unsolicited, written, bona fide proposal or offer regarding a Competing Transaction
is made that the Net Element Board determines is a Superior Proposal, then under certain circumstances the Net Element Board may
withdraw or modify, or propose to withdraw or modify, in a manner adverse to the Company, its approval or recommendation of the
Merger Agreement and the Merger, and the Net Element Board may recommend the Superior Proposal, provided that Net Element in any
such event must still call and hold a meeting of its shareholders for the purpose of voting upon the approval and adoption of the
Merger Agreement. Prior to a withdrawal or modification of the recommendation by the Net Element Board due to a Superior Proposal,
Net Element must provide the Company with at least five business days&rsquo; prior notice of its intention to take such actions,
and thereby provide the Company with an opportunity within such five business days to make a new offer. The Company Board may withdraw
or modify, or propose to withdraw or modify, in a manner adverse to Net Element, its approval or recommendation of the Merger Agreement
and the Merger in certain circumstances if the Company Board determines that it is required to make a change in its recommendation
to comply with its fiduciary duties to the Company and its shareholders under applicable law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Termination of the Merger Agreement</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger Agreement
may be terminated in certain customary circumstances, including, but not limited to: (i) by the Company if the Net Element Board
withdraws, modifies or changes its approval or recommendation of the Merger Agreement and the Merger in a manner adverse to the
Company; (ii) by either the Company or Net Element if the Merger does not occur on or before October 14, 2012; (iii) by either
the Company or Net Element if the Merger Agreement fails to receive the requisite vote for approval and adoption at the meeting
of shareholders of either the Company or Net Element; or (iv) subject to certain cure rights, by either the Company or Net Element
in the event of a breach of any representation, warranty, covenant or agreement under the Merger Agreement by the other party.
The Merger Agreement provides that all expenses incurred in connection with the Merger Agreement and the Merger will be paid by
the Surviving Company, except that if the Merger is not consummated then each party will pay its own expenses. However, Mike Zoi,
through Enerfund, LLC (of which Mr. Zoi is the sole and managing member), has paid, on behalf of the Company, $150,000 of the Company
&lsquo;s legal fees in connection with the Merger Agreement and the Merger and has agreed to pay, on behalf of the Company, additional
legal fees of the Company up to a maximum of $250,000 if the Merger is not consummated or is otherwise terminated or abandoned.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Treatment of Options and Other Derivative
Securities</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Immediately prior to
the effective time of the Merger, all outstanding shares of unvested restricted stock of Net Element will accelerate and become
fully vested and, at the effective time of the Merger, such shares will be cancelled and converted into the right to receive Company
Shares on the same basis as other issued and outstanding Net Element Shares as described above. Immediately prior to the effective
time of the Merger, all outstanding convertible debt instruments of Net Element will be converted into Net Element Shares pursuant
to the terms of such instruments and, at the effective time of the Merger, such shares will be cancelled and converted into the
right to receive Company Shares on the same basis as other issued and outstanding Net Element Shares as described above. Immediately
prior to the effective time of the Merger, all outstanding Net Element stock options and warrants (collectively, &ldquo; <U>Net
Element Convertible Securities</U>&rdquo;) will accelerate and become fully vested and exercisable (to the extent that they are
unvested). If the Net Element Convertible Securities are &ldquo;in-the-money&rdquo; (meaning that the exercise price is lower than
the product obtained by multiplying the price of a Company Share as of the close of The NASDAQ Capital Market on the day immediately
prior to the closing date under the Merger Agreement by 0.025 (the &ldquo;<U>Cashless Share Price</U>&rdquo;)), then, immediately
prior to the effective time of the Merger, they will be terminated and exercised into the number of Net Element Shares that would
have been issuable if the Net Element Convertible Securities were exercised on a cashless basis based on the Cashless Share Price,
and, at the effective time of the Merger, such shares will be cancelled and converted into the right to receive Company Shares
on the same basis as other issued and outstanding Net Element Shares as described above. More specifically, each Net Element Convertible
Security that is &ldquo;in-the-money&rdquo; will be exercised into a number of Net Element Shares equal to the quotient obtained
by dividing [(Cashless Share Price - B) * X] by the Cashless Share Price, where B equals the exercise price of such Net Element
Convertible Security, and X equals the number of Net Element Shares that would be issuable upon exercise of such Net Element Convertible
Security if such exercise were by means of a cash exercise rather than a cashless exercise. Any Net Element Convertible Securities
that are &ldquo;out-of-the-money&rdquo; (meaning that the exercise price is equal to or higher than the Cashless Share Price) will
be cancelled at the effective time of the Merger and no consideration will be delivered in exchange therefor; provided that, with
respect to Net Element &ldquo;out-of-the-money&rdquo; stock options that were granted to employees under the 2011 Equity Incentive
Plan of Net Element in lieu of cash compensation in connection with compensation reductions previously implemented by Net Element,
employees will have the right to be paid the amount of cash compensation that was previously foregone in connection with the compensation
reductions. With respect to Net Element &ldquo;in-the-money&rdquo; stock options that were granted to employees under the 2011
Equity Incentive Plan of Net Element in lieu of cash compensation in connection with compensation reductions previously implemented
by Net Element, employees of Net Element will be given a choice to, immediately prior to the effective time of the Merger, either
(i) exercise such stock options on a cashless basis as described above or (ii) cancel all of such stock options and be paid the
amount of cash compensation that was previously foregone in connection with the compensation reductions.]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Post-Closing Directors and Officers</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company agreed
to take such actions as may be necessary to cause each of the following persons to be appointed to the Company Board as of the
effective time of the Merger, to serve until the next annual election of directors of Cazador: Mike Zoi (as Non-Executive Chairman),
Francesco Piovanetti, Dmitry Kozko, Kenges Rakishev, James Caan, David P. Kelley and Felix Vulis. In addition, the Company agreed
to take such actions as may be necessary to cause each of the following persons to be elected as officers of the Company effective
immediately after the closing under the Merger Agreement: Francesco Piovanetti, Chief Executive Officer; Dmitry Kozko, President;
Alberto Hernandez, Chief Operating Officer; Curtis Wolfe, Secretary; Jonathan New, Chief Financial Officer; Richard Lappenbusch,
Executive Vice President and Chief Strategic Officer and Ivan Onuchin, Chief Technology Officer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The foregoing description
of the Merger and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger
Agreement, a copy of which is attached hereto as Exhibit 2.1. The Merger Agreement has been incorporated herein by reference to
provide information regarding the terms of the Merger Agreement and is not intended to modify or supplement any factual disclosures
about the Company or Net Element in any public reports filed with the SEC by the Company or Net Element. In particular, the assertions
embodied in the representations and warranties contained in the Merger Agreement are qualified by information in confidential disclosure
schedules provided by the Company to Net Element and by Net Element to the Company in connection with the signing of the Merger
Agreement. These disclosure schedules contain information that modifies, qualifies and creates exceptions to the representations
and warranties set forth in the Merger Agreement. Moreover, certain representations and warranties in the Merger Agreement were
used for the purpose of allocating risk between the Company and Net Element, rather than establishing matters of fact. Accordingly,
the representations and warranties in the Merger Agreement may not constitute the actual state of facts about the Company or Net
Element. The representations and warranties set forth in the Merger Agreement may also be subject to a contractual standard of
materiality different from that generally applicable under federal securities laws.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">______________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Disclaimer</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This current report
on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any
sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of such jurisdiction. No offer or sale of securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Additional Information</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection with
the proposed Merger, the Company and Net Element will prepare and file with the SEC a joint proxy statement/prospectus (which will
be included in the Registration Statement). When completed, a definitive joint proxy statement/prospectus and a form of proxy will
be mailed to the shareholders of the Company and the shareholders of Net Element. Before making any voting decision, stockholders
are urged to read the joint proxy statement/prospectus carefully and in its entirety because it will contain important information
about the proposed Merger. Shareholders will be able to obtain, without charge, a copy of the joint proxy statement/prospectus
and other relevant documents filed with the SEC when they become available through the SEC&rsquo;s website at http://www.sec.gov.
Shareholders will also be able to obtain, without charge, a copy of the joint proxy statement/prospectus and other relevant documents
when they become available by contacting the Company at BBVA Building, P1, 254 Mu&ntilde;oz Rivera Avenue, San Juan, Puerto Rico,
00918, telephone number (787) 993-9650, Attn: Jorge De Jesus, or from the Company&rsquo;s website at http://www.cazador1.com.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Forward-Looking Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This report contains
forward-looking statements that reflect the Company&rsquo;s and Net Element&rsquo;s current beliefs, expectations or intentions
regarding future events. Any statements contained in this report that are not statements of historical fact may be deemed forward-looking
statements. Words such as &ldquo;may,&rdquo; &ldquo;will,&rdquo; &ldquo;could,&rdquo; &ldquo;should,&rdquo; &ldquo;expect,&rdquo;
&ldquo;proposed,&rdquo; &ldquo;contemplated,&rdquo; &ldquo;plan,&rdquo; &ldquo;project,&rdquo; &ldquo;intend,&rdquo; &ldquo;anticipate,&rdquo;
&ldquo;believe,&rdquo; &ldquo;estimate,&rdquo; &ldquo;predict,&rdquo; &ldquo;potential,&rdquo; &ldquo;pursue,&rdquo; &ldquo;target,&rdquo;
&ldquo;continue,&rdquo; and similar expressions are intended to identify such forward-looking statements. These forward-looking
statements include, without limitation, the Company&rsquo;s and Net Element&rsquo;s expectations with respect to the Surviving
Company&rsquo;s plans, objectives, expectations and intentions with respect to future operations; approval and adoption of the
Merger Agreement by the requisite number of stockholders; the satisfaction of closing conditions to the proposed transaction; and
the timing of the completion of the proposed transaction. 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 the Company and Net Element and are difficult to predict. Examples of such risks and
uncertainties include, but are not limited to: (i) the failure of the Merger to close for any reason; (ii) general business and
economic conditions; (iii) the performance of financial markets; (iv) risks relating to the consummation of the contemplated Merger,
including the risk that required stockholder approval and regulatory agencies might not be obtained in a timely manner or at all
or that other closing conditions are not satisfied; (v) the impact of the Merger on the markets for the Surviving Company&rsquo;s
products and services; (vi) the employees of the Company and Net Element not being combined and integrated successfully; (vii)
operating costs and business disruption following the Merger, including adverse effects on employee retention and on the Net Element&rsquo;s
business relationships with third parties; (viii) the inability of the Surviving Company following the closing of the Merger to
meet Nasdaq&rsquo;s listing requirements; and (ix) the future performance of the Surviving Company following the closing of the
Merger. 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 each of the Company and Net Element with the SEC. Each of the Company and Net Element
anticipate that subsequent events and developments may cause their views and expectations to change. Neither the Company nor Net
Element assumes any obligation, and they specifically disclaim any intention or obligation, to update any forward-looking statements,
whether as a result of new information, future events or otherwise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Participants in the Solicitation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company and Net
Element and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in
respect of the proposed transaction. Information about the Company&rsquo;s directors and executive officers is set forth in the
Company&rsquo;s annual report on Form 10-K for the fiscal year ended December 31, 2011. Information about Net Element&rsquo;s directors
and executive officers is set forth in Net Element&rsquo;s annual report on Form 10-K for the fiscal year ended December 31, 2011.
Additional information regarding the interests of such potential participants in the Merger, which may be different than those
of the Company&rsquo;s shareholders and/or Net Element&rsquo;s shareholders generally, will be included in the joint proxy statement/prospectus
and other relevant documents filed with the SEC when they become available.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item 9.01 Financial Statements and Exhibits.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(d) Exhibits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 15%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">Exhibit No.</TD>
    <TD STYLE="width: 4%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 81%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">Description</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">2.1</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Agreement and Plan of Merger, dated as of June 12, 2012, between Cazador Acquisition Corporation Ltd. and Net Element, Inc.*</TD></TR>
</TABLE>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.15in"></TD><TD STYLE="width: 0.15in"><FONT STYLE="font-family: Times New Roman, Times, Serif">*</FONT></TD><TD STYLE="text-align: justify">Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company
hereby undertakes to furnish supplementally copies of any of the omitted schedules and exhibits upon request by the SEC.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SIGNATURES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</P>

<TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2">CAZADOR ACQUISITION CORPORATION LTD.</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; width: 50%">&nbsp;</TD>
    <TD STYLE="width: 4%">By:&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 46%">/s/ Francesco Piovanetti</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-top: #000000 1px solid">Name:&nbsp;&nbsp;&nbsp;Francesco Piovanetti<BR>
Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chairman, Chief Executive Officer, Chief Financial Officer and President</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Date: June 13, 2012</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXHIBIT INDEX</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 15%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">Exhibit No.</TD>
    <TD STYLE="width: 4%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 81%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">Description</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">2.1</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Agreement and Plan of Merger, dated as of June 12, 2012, between Cazador Acquisition Corporation Ltd. and Net Element, Inc.*</TD></TR>
</TABLE>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">*</FONT></TD><TD STYLE="text-align: justify">Schedules and exhibits have been omitted pursuant
to Item 601(b)(2) of Regulation S-K. The Company hereby undertakes to furnish supplementally copies of any of the omitted schedules
and exhibits upon request by the SEC.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="margin: 0"></P>

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{"company-data": {"conformed-name": "Cazador Acquisition Corp Ltd.", "cik": "0001499961", "assigned-sic": "6770", "irs-number": "000000000", "state-of-incorporation": "E9", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-34887", "film-number": "12907299"}, "business-address": {"street1": "C/O ARCO CAPITAL MANAGEMENT LLC", "street2": "7 SHEINOVO STREET", "city": "SOFIA", "state": "E0", "zip": "1504", "phone": "359 2 895 2000"}, "mail-address": {"street1": "C/O ARCO CAPITAL MANAGEMENT LLC", "street2": "7 SHEINOVO STREET", "city": "SOFIA", "state": "E0", "zip": "1504"}}
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported):
June 12, 2012
Cazador Acquisition Corporation Ltd.
(Exact name of registrant as specified in
its charter)
Cayman Islands
001-34887
98-0668024
(State or other jurisdiction
of incorporation)
(Commission
(File Number)
(I.R.S. Employer
Identification No.)
BBVA Building, P1
254 Muñoz Rivera Avenue
San Juan, Puerto Rico
00918
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code:
(787) 993-9650
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
x
Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On June 12, 2012, Cazador
Acquisition Corporation Ltd. (the "
Company
") entered into an Agreement and Plan of Merger (the "
Merger
Agreement
") with Net Element, Inc., a Delaware corporation ("
Net Element
"). Subject to the terms and
conditions of the Merger Agreement, the Net Element will merge (the "
Merger
") with and into the Company, resulting
in Net Element's ceasing to exist and the Company continuing as the surviving company in the Merger (the "
Surviving
Company
"). The Merger is intended to qualify as a tax-free reorganization. The Company is a blank check company whose
ordinary shares and warrants are listed on The NASDAQ Capital Market. The Company was incorporated on April 2, 2010 for the purpose
of effecting a merger, share capital exchange, asset acquisition, share purchase, reorganization or similar business combination
with one or more operating businesses or assets. Net Element develops and operates online media websites in the film, motorsport
and emerging music talent markets, and is developing additional sites and services in these markets as well as the legal information
and peer-to-peer application markets. Shares of Net Element's common stock are currently quoted on the OTCQB electronic quotation
system under the symbol "NETE."
Following the Merger,
the Surviving Company is expected to retain Net Element's ticker symbol "NETE" upon Nasdaq's approval of
the Company's listing application, and as promptly as practicable after the effective time of the Merger, the Surviving Company
intends to change its name to "Net Element International, Inc."
Consideration
At the effective time
of the Merger, each share of common stock of the Net Element ("
Net Element Shares
") issued and outstanding immediately
prior to the effective time of the Merger (other than Net Element Shares held by the Net Element as treasury stock or by any of
its direct or indirect wholly-owned subsidiaries, which will be cancelled at the effect time of the Merger, and Net Element Shares
with respect to which appraisal rights, to the extent available under the Delaware General Corporation Law ("
DGCL
"),
are properly exercised and not withdrawn) will be cancelled and converted into the right to receive 1/40 (or 0.025) of an ordinary
share of the Company ("
Company Shares
") (in other words, subject to stockholders properly exercising appraisal
rights, to the extent available under the DGCL, every 40 issued and outstanding Net Element Shares will be converted into one Company
Share in the Merger). However, to the extent a holder of Net Element Shares would receive fewer than 100 Company Shares as a result
of this exchange ratio, the Company will have the right, exercisable in its sole and absolute discretion, to issue in the Merger
an additional number of Company Shares to bring such holder's aggregate Company equity holdings to 100 Company Shares. No
fractional Company Shares will be issued in the Merger; instead, the Company will issue one Company Share to the holder of any
Net Element Shares that would otherwise be entitled to receive a fraction of a Company Share.
Conditions to Consummation of the Merger
Consummation of the
Merger is subject to a number of conditions, including, among others: (i) that a registration statement on Form S-4 (the "
Registration
Statement
") registering the Company Shares to be issued to Net Element's shareholders pursuant to the Merger must
have been declared effective by the Securities and Exchange Commission (the "
SEC
"); (ii) the Merger Agreement
must have been approved and adopted by the requisite number of Net Element stockholders; (iii) the Merger Agreement must have been
approved and adopted by the requisite number of Net Element's shareholders; (iv) the Company must have completed its conversion
into a Delaware corporation; (v) the Company Shares to be issued to Net Element's shareholders pursuant to the Merger must
have been approved for listing on The NASDAQ Capital Market; (vi) the Company must have at least $23,500,000 in cash held in its
trust account immediately after the effective time of the Merger (after giving effect to payment of all of the Company's
shareholders who exercise their redemption rights under the Company's organizational documents); (vii) all notes and payables
of Net Element and/or its subsidiaries owed to the Net Element's Chairman and Chief Executive Officer, Mike Zoi, or any of
his affiliates, that are outstanding as of the closing of the transactions under the Merger Agreement must be repaid immediately
after the effective time of the Merger; (viii) the Company must have received satisfactory evidence of the termination of the Shareholder
Rights Agreement, dated February 24, 2012, among Mark Global Corporation, Kenges Rakishev, Mike Zoi, TGR Capital, LLC, MZ Capital,
LLC (Delaware), MZ Capital, LLC (Florida), Enerfund, LLC and Net Element; and (ix) other customary closing conditions.
2
Representations, Warranties and Covenants
The
Company and Net Element have made customary representations, warranties and covenants in the Merger Agreement, including, among
others, covenants (i) to prepare and file with the SEC a joint proxy statement/prospectus (which will be included in the Registration
Statement); (ii) to call and hold shareholder meetings of the Company and Net Element as soon as practicable after the date on
which the Registration Statement becomes effective for the purpose of voting upon the approval and adoption of the Merger Agreement
and, in the case of the Company, the conversion of the Company into a Delaware corporation; (iii) that, except as described in
the following paragraph, the Board of Directors of the Company (the "
Company Board
") and the Board of Directors
of Net Element (the "
Net Element Board
") will not withdraw or modify, or propose to withdraw or modify, in a
manner adverse to the other party, its approval or recommendation of the Merger Agreement or the Merger; and (iv) to use reasonable
efforts to consummate the Merger. From the date of the Merger Agreement until the effective time of the Merger, the Net Element
has agreed to conduct, and to cause its subsidiaries to conduct, their business in the ordinary course and in a manner consistent
with past practice and to use reasonable efforts to keep available the services of their current officers, employees and consultants
and to preserve their relationships with customers, suppliers and others with which they have significant business relations.
From the date of the Merger Agreement until the earlier of the termination of the Merger Agreement
or the effective time of the Merger, the Company has agreed not to take any action that would reasonably be likely to prevent,
interfere with or materially delay the Merger.
Net Element has agreed
not to solicit or take any action to facilitate any inquiries or the making of any proposal or offer that constitutes, or may reasonably
be expected to lead to, any Competing Transaction (as defined in the Merger Agreement), and it must notify the Company if any proposal
or offer regarding a Competing Transaction is made. However, if an unsolicited, written, bona fide proposal or offer regarding
a Competing Transaction is made that the Net Element Board determines is a Superior Proposal (as defined in the Merger Agreement),
then Net Element may, under certain circumstances, furnish information to and enter into discussions with the person who has made
that proposal or offer. In the event that an unsolicited, written, bona fide proposal or offer regarding a Competing Transaction
is made that the Net Element Board determines is a Superior Proposal, then under certain circumstances the Net Element Board may
withdraw or modify, or propose to withdraw or modify, in a manner adverse to the Company, its approval or recommendation of the
Merger Agreement and the Merger, and the Net Element Board may recommend the Superior Proposal, provided that Net Element in any
such event must still call and hold a meeting of its shareholders for the purpose of voting upon the approval and adoption of the
Merger Agreement. Prior to a withdrawal or modification of the recommendation by the Net Element Board due to a Superior Proposal,
Net Element must provide the Company with at least five business days' prior notice of its intention to take such actions,
and thereby provide the Company with an opportunity within such five business days to make a new offer. The Company Board may withdraw
or modify, or propose to withdraw or modify, in a manner adverse to Net Element, its approval or recommendation of the Merger Agreement
and the Merger in certain circumstances if the Company Board determines that it is required to make a change in its recommendation
to comply with its fiduciary duties to the Company and its shareholders under applicable law.
Termination of the Merger Agreement
The Merger Agreement
may be terminated in certain customary circumstances, including, but not limited to: (i) by the Company if the Net Element Board
withdraws, modifies or changes its approval or recommendation of the Merger Agreement and the Merger in a manner adverse to the
Company; (ii) by either the Company or Net Element if the Merger does not occur on or before October 14, 2012; (iii) by either
the Company or Net Element if the Merger Agreement fails to receive the requisite vote for approval and adoption at the meeting
of shareholders of either the Company or Net Element; or (iv) subject to certain cure rights, by either the Company or Net Element
in the event of a breach of any representation, warranty, covenant or agreement under the Merger Agreement by the other party.
The Merger Agreement provides that all expenses incurred in connection with the Merger Agreement and the Merger will be paid by
the Surviving Company, except that if the Merger is not consummated then each party will pay its own expenses. However, Mike Zoi,
through Enerfund, LLC (of which Mr. Zoi is the sole and managing member), has paid, on behalf of the Company, $150,000 of the Company
's legal fees in connection with the Merger Agreement and the Merger and has agreed to pay, on behalf of the Company, additional
legal fees of the Company up to a maximum of $250,000 if the Merger is not consummated or is otherwise terminated or abandoned.
3
Treatment of Options and Other Derivative
Securities
Immediately prior to
the effective time of the Merger, all outstanding shares of unvested restricted stock of Net Element will accelerate and become
fully vested and, at the effective time of the Merger, such shares will be cancelled and converted into the right to receive Company
Shares on the same basis as other issued and outstanding Net Element Shares as described above. Immediately prior to the effective
time of the Merger, all outstanding convertible debt instruments of Net Element will be converted into Net Element Shares pursuant
to the terms of such instruments and, at the effective time of the Merger, such shares will be cancelled and converted into the
right to receive Company Shares on the same basis as other issued and outstanding Net Element Shares as described above. Immediately
prior to the effective time of the Merger, all outstanding Net Element stock options and warrants (collectively, "
Net
Element Convertible Securities
") will accelerate and become fully vested and exercisable (to the extent that they are
unvested). If the Net Element Convertible Securities are "in-the-money" (meaning that the exercise price is lower than
the product obtained by multiplying the price of a Company Share as of the close of The NASDAQ Capital Market on the day immediately
prior to the closing date under the Merger Agreement by 0.025 (the "
Cashless Share Price
")), then, immediately
prior to the effective time of the Merger, they will be terminated and exercised into the number of Net Element Shares that would
have been issuable if the Net Element Convertible Securities were exercised on a cashless basis based on the Cashless Share Price,
and, at the effective time of the Merger, such shares will be cancelled and converted into the right to receive Company Shares
on the same basis as other issued and outstanding Net Element Shares as described above. More specifically, each Net Element Convertible
Security that is "in-the-money" will be exercised into a number of Net Element Shares equal to the quotient obtained
by dividing [(Cashless Share Price - B) * X] by the Cashless Share Price, where B equals the exercise price of such Net Element
Convertible Security, and X equals the number of Net Element Shares that would be issuable upon exercise of such Net Element Convertible
Security if such exercise were by means of a cash exercise rather than a cashless exercise. Any Net Element Convertible Securities
that are "out-of-the-money" (meaning that the exercise price is equal to or higher than the Cashless Share Price) will
be cancelled at the effective time of the Merger and no consideration will be delivered in exchange therefor; provided that, with
respect to Net Element "out-of-the-money" stock options that were granted to employees under the 2011 Equity Incentive
Plan of Net Element in lieu of cash compensation in connection with compensation reductions previously implemented by Net Element,
employees will have the right to be paid the amount of cash compensation that was previously foregone in connection with the compensation
reductions. With respect to Net Element "in-the-money" stock options that were granted to employees under the 2011
Equity Incentive Plan of Net Element in lieu of cash compensation in connection with compensation reductions previously implemented
by Net Element, employees of Net Element will be given a choice to, immediately prior to the effective time of the Merger, either
(i) exercise such stock options on a cashless basis as described above or (ii) cancel all of such stock options and be paid the
amount of cash compensation that was previously foregone in connection with the compensation reductions.]
Post-Closing Directors and Officers
The Company agreed
to take such actions as may be necessary to cause each of the following persons to be appointed to the Company Board as of the
effective time of the Merger, to serve until the next annual election of directors of Cazador: Mike Zoi (as Non-Executive Chairman),
Francesco Piovanetti, Dmitry Kozko, Kenges Rakishev, James Caan, David P. Kelley and Felix Vulis. In addition, the Company agreed
to take such actions as may be necessary to cause each of the following persons to be elected as officers of the Company effective
immediately after the closing under the Merger Agreement: Francesco Piovanetti, Chief Executive Officer; Dmitry Kozko, President;
Alberto Hernandez, Chief Operating Officer; Curtis Wolfe, Secretary; Jonathan New, Chief Financial Officer; Richard Lappenbusch,
Executive Vice President and Chief Strategic Officer and Ivan Onuchin, Chief Technology Officer.
The foregoing description
of the Merger and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger
Agreement, a copy of which is attached hereto as Exhibit 2.1. The Merger Agreement has been incorporated herein by reference to
provide information regarding the terms of the Merger Agreement and is not intended to modify or supplement any factual disclosures
about the Company or Net Element in any public reports filed with the SEC by the Company or Net Element. In particular, the assertions
embodied in the representations and warranties contained in the Merger Agreement are qualified by information in confidential disclosure
schedules provided by the Company to Net Element and by Net Element to the Company in connection with the signing of the Merger
Agreement. These disclosure schedules contain information that modifies, qualifies and creates exceptions to the representations
and warranties set forth in the Merger Agreement. Moreover, certain representations and warranties in the Merger Agreement were
used for the purpose of allocating risk between the Company and Net Element, rather than establishing matters of fact. Accordingly,
the representations and warranties in the Merger Agreement may not constitute the actual state of facts about the Company or Net
Element. The representations and warranties set forth in the Merger Agreement may also be subject to a contractual standard of
materiality different from that generally applicable under federal securities laws.
4
______________________________
Disclaimer
This current report
on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any
sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of such jurisdiction. No offer or sale of securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as amended.
Additional Information
In connection with
the proposed Merger, the Company and Net Element will prepare and file with the SEC a joint proxy statement/prospectus (which will
be included in the Registration Statement). When completed, a definitive joint proxy statement/prospectus and a form of proxy will
be mailed to the shareholders of the Company and the shareholders of Net Element. Before making any voting decision, stockholders
are urged to read the joint proxy statement/prospectus carefully and in its entirety because it will contain important information
about the proposed Merger. Shareholders will be able to obtain, without charge, a copy of the joint proxy statement/prospectus
and other relevant documents filed with the SEC when they become available through the SEC's website at http://www.sec.gov.
Shareholders will also be able to obtain, without charge, a copy of the joint proxy statement/prospectus and other relevant documents
when they become available by contacting the Company at BBVA Building, P1, 254 Muñoz Rivera Avenue, San Juan, Puerto Rico,
00918, telephone number (787) 993-9650, Attn: Jorge De Jesus, or from the Company's website at http://www.cazador1.com.
Forward-Looking Statements
This report contains
forward-looking statements that reflect the Company's and Net Element's current beliefs, expectations or intentions
regarding future events. Any statements contained in this report that are not statements of historical fact may be deemed forward-looking
statements. Words such as "may," "will," "could," "should," "expect,"
"proposed," "contemplated," "plan," "project," "intend," "anticipate,"
"believe," "estimate," "predict," "potential," "pursue," "target,"
"continue," and similar expressions are intended to identify such forward-looking statements. These forward-looking
statements include, without limitation, the Company's and Net Element's expectations with respect to the Surviving
Company's plans, objectives, expectations and intentions with respect to future operations; approval and adoption of the
Merger Agreement by the requisite number of stockholders; the satisfaction of closing conditions to the proposed transaction; and
the timing of the completion of the proposed transaction. 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 the Company and Net Element and are difficult to predict. Examples of such risks and
uncertainties include, but are not limited to: (i) the failure of the Merger to close for any reason; (ii) general business and
economic conditions; (iii) the performance of financial markets; (iv) risks relating to the consummation of the contemplated Merger,
including the risk that required stockholder approval and regulatory agencies might not be obtained in a timely manner or at all
or that other closing conditions are not satisfied; (v) the impact of the Merger on the markets for the Surviving Company's
products and services; (vi) the employees of the Company and Net Element not being combined and integrated successfully; (vii)
operating costs and business disruption following the Merger, including adverse effects on employee retention and on the Net Element's
business relationships with third parties; (viii) the inability of the Surviving Company following the closing of the Merger to
meet Nasdaq's listing requirements; and (ix) the future performance of the Surviving Company following the closing of the
Merger. 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 each of the Company and Net Element with the SEC. Each of the Company and Net Element
anticipate that subsequent events and developments may cause their views and expectations to change. Neither the Company nor Net
Element assumes any obligation, and they specifically disclaim any intention or obligation, to update any forward-looking statements,
whether as a result of new information, future events or otherwise.
5
Participants in the Solicitation
The Company and Net
Element and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in
respect of the proposed transaction. Information about the Company's directors and executive officers is set forth in the
Company's annual report on Form 10-K for the fiscal year ended December 31, 2011. Information about Net Element's directors
and executive officers is set forth in Net Element's annual report on Form 10-K for the fiscal year ended December 31, 2011.
Additional information regarding the interests of such potential participants in the Merger, which may be different than those
of the Company's shareholders and/or Net Element's shareholders generally, will be included in the joint proxy statement/prospectus
and other relevant documents filed with the SEC when they become available.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No.
Description
2.1
Agreement and Plan of Merger, dated as of June 12, 2012, between Cazador Acquisition Corporation Ltd. and Net Element, Inc.*
*
Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company
hereby undertakes to furnish supplementally copies of any of the omitted schedules and exhibits upon request by the SEC.
6
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
CAZADOR ACQUISITION CORPORATION LTD.
By:
/s/ Francesco Piovanetti
Name:   Francesco Piovanetti
Title:     Chairman, Chief Executive Officer, Chief Financial Officer and President
Date: June 13, 2012
7
EXHIBIT INDEX
Exhibit No.
Description
2.1
Agreement and Plan of Merger, dated as of June 12, 2012, between Cazador Acquisition Corporation Ltd. and Net Element, Inc.*
*
Schedules and exhibits have been omitted pursuant
to Item 601(b)(2) of Regulation S-K. The Company hereby undertakes to furnish supplementally copies of any of the omitted schedules
and exhibits upon request by the SEC.
8