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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; 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; text-align: center">October 24, 2012</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 12pt; font-weight: bold; text-align: center">Net Element International, Inc.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">(Exact name of registrant as specified in its charter)</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 30%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center">Delaware</TD>
    <TD STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 18%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center">001-34887</TD>
    <TD STYLE="width: 16%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 22%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center">96-0668024</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 STYLE="vertical-align: top">
    <TD STYLE="width: 52%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center">1450 S. Miami Avenue, Miami, FL</TD>
    <TD STYLE="width: 34%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 14%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center">33130</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>

<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: 50%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Registrant's telephone number, including area code:</TD>
    <TD STYLE="width: 50%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">(305) 507-8808</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">Not Applicable</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">Former name or former address, if changed
        since last report</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P></TD></TR>
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<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>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Wingdings">&uml;</FONT>
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Wingdings">&uml;</FONT>
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</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"><FONT STYLE="font-family: Wingdings">&uml;</FONT>
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(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"><FONT STYLE="font-family: Wingdings">&uml;</FONT>
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</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"><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-indent: 0.5in">On October 24, 2012, Net Element International
Inc. (the &ldquo;Company&rdquo;) entered into a Management and Consulting Services Agreement (the &ldquo;Consulting Agreement&rdquo;)
with Bond Street Management, LLC (&ldquo;BSM&rdquo;). Pursuant to the Consulting Agreement, BSM will provide certain management
and consulting services, as well as other services, to the Company and its subsidiaries in particular, Net Element Russia, OOO,
TOT Money, OOO, Music 1 Russia, OOO and Motorsport, LLC.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The services to be provided under the Consulting
Agreement include, but are not limited to: (i) consulting with respect to borrowings, acquisitions, and operations; (ii) advising
with respect to investment opportunities; (iii) providing investment banking and other financial advisory services; (iv) coordinating
investor relations and stockholder communications; (v) advising on board of director policies; (vi) evaluating and recommending
hedging strategies; (vii) counseling on regulatory requirements; (viii) consulting with regard to the capital structure and potential
capital raising opportunities for the Company and its subsidiaries; (ix) assisting in retaining advisors to develop accounting
and compliance programs; (x) assisting with corporate filings and necessary business licenses; (xi) assisting with regulatory requirements,
including the preparation of financial statements, and providing information related to the certification of the financial statements
to the chief executive officer and chief financial officer of the Company; (xii) advising in connection with litigation or other
claims; (xiii) advising on expenses and budgetary matters; and (xiv) providing other services reasonably requested in writing from
time to time for the management. BSM may also enter into agreements with third parties for and on behalf of the Company and retain
professional services, such as legal counsel, appraiser, insurer, transfer agent, investment banks, as BSM deems necessary or advisable.
BSM will further provide the Company with qualified personnel to serve as chief executive officer and chief operating officer,
which persons shall devote as much of their time to the management of the Company and its subsidiaries as the Company deems necessary.
BSM may also from time to time provide other senior officers or personnel to the Company.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition, BSM will provide the Company
with qualified personnel to serve as Chief Executive Officer and Chief Operating Officer.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The initial term of the Consulting Agreement
is until December 31, 2013 and it will automatically renew for a one-year term on each anniversary of that date. The Company and
BSM can each terminate the Consulting Agreement for convenience upon 90 days prior written notice. The Company can also terminate
immediately upon written notice in the event of (i) any act of fraud, misappropriation of funds or embezzlements by BSM, (ii) willful
misconduct, bad faith or gross negligence, (iii) material breach of the agreement which remains uncured for 45 days, (iv) bankruptcy
or insolvency, or (v) dissolution of BSM. BSM may terminate upon 60 days prior written notice in case the Company or its subsidiaries
default in the performance of any material term, condition or covenant and such default remains uncured for 45 days.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">For the services provided, including the
compensation of the Company&rsquo;s Chief Executive Officer and Chief Operating Officer, under the Consulting Agreement, the Company
will pay BSM a service fee of $50,000 per month and reimburse BSM for all of its documented business expenses incurred directly
on behalf of the Company. The parties shall apply their best effort to renegotiate the service fee by December 31, 2012, to reflect
the actual services being provided by BSM and expected services to be provided during the calendar year 2013 and on a going forward
basis. BSM is also eligible for a discretionary performance based fee, which shall be payable in cash or non-cash equitable compensation
at the sole discretion of the independent directors of the Company or by the Company if the chief executive officer is not an employee,
officer or affiliate of BSM.</P>

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition, the Company shall bear all
costs and expenses that are directly attributable to the salaries, bonuses and fringe benefits payable to accounting and operations
employees of BSM, to the extent of the accounting, operating and other administrative services provided by BSM on behalf of the
Company.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Under the Consulting Agreement, BSM does
not assume any responsibility other than to render the services in good faith and is not responsible for any actions of the board
of directors or other governing body of any of the Company&rsquo;s subsidiaries and has no responsibility for the directors, officers
and employees of the Company and its subsidiaries. The Company has the obligation to indemnify BSM, its affiliates and their respective
directors, managers, members, officers, employees and other representatives to the full extent permitted by the law, for any losses
and liabilities arising out of acts or omissions of such person in connection with the provision of services under the Consulting
Agreement, unless such act or omission constitutes bad faith, willful misconduct, gross negligence or reckless disregard of BSM&rsquo;s
duties. BSM shall, to extent lawful, indemnify the Company for any losses and liabilities arising out of BSM&rsquo;s breach of
the Consulting Agreement, bad faith, willful misconduct, gross negligence or reckless disregard of BSM&rsquo;s duties.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Francesco Piovanetti, the Chief Executive
Officer of the Company and Alberto Hernandez, the Chief Operating Officer of the Company, owns 25% each of the outstanding equity
interest in BSM.</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>Item 5.02 Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.</B></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; text-indent: 0.5in">The disclosures contained under Item 1.01
are incorporated herein by this reference.</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">&nbsp;</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">10.1</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Management and Consulting Services Agreement dated October 24, 2012 between Bond Street Management LLC and Net Element International Inc.</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; text-indent: 0.5in">&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"><B>NET ELEMENT, INC.</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; width: 50%">Date: October 30, 2012</TD>
    <TD STYLE="width: 4%">By:&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 46%">/s/ Francesco Piovanetti&#9;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-top: #000000 1px solid">Name: &#9;Francesco Piovanetti&#9;<BR>Title:&#9;Chief
Executive Officer</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: 0pt; margin-top: 0pt; margin-bottom: 6pt">&nbsp;</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">10.1</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Management and Consulting Services Agreement dated October 24, 2012 between Bond Street Management LLC and Net Element International Inc.</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: center">&nbsp;</P>

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



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

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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):
October 24, 2012
Net Element International, Inc.
(Exact name of registrant as specified in its charter)
Delaware
001-34887
96-0668024
(State or other jurisdiction
of incorporation)
(Commission
(File Number)
(I.R.S. Employer
Identification No.)
1450 S. Miami Avenue, Miami, FL
33130
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code:
(305) 507-8808
Not Applicable
Former name or former address, if changed
        since last report
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:
¨
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 October 24, 2012, Net Element International
Inc. (the "Company") entered into a Management and Consulting Services Agreement (the "Consulting Agreement")
with Bond Street Management, LLC ("BSM"). Pursuant to the Consulting Agreement, BSM will provide certain management
and consulting services, as well as other services, to the Company and its subsidiaries in particular, Net Element Russia, OOO,
TOT Money, OOO, Music 1 Russia, OOO and Motorsport, LLC.
The services to be provided under the Consulting
Agreement include, but are not limited to: (i) consulting with respect to borrowings, acquisitions, and operations; (ii) advising
with respect to investment opportunities; (iii) providing investment banking and other financial advisory services; (iv) coordinating
investor relations and stockholder communications; (v) advising on board of director policies; (vi) evaluating and recommending
hedging strategies; (vii) counseling on regulatory requirements; (viii) consulting with regard to the capital structure and potential
capital raising opportunities for the Company and its subsidiaries; (ix) assisting in retaining advisors to develop accounting
and compliance programs; (x) assisting with corporate filings and necessary business licenses; (xi) assisting with regulatory requirements,
including the preparation of financial statements, and providing information related to the certification of the financial statements
to the chief executive officer and chief financial officer of the Company; (xii) advising in connection with litigation or other
claims; (xiii) advising on expenses and budgetary matters; and (xiv) providing other services reasonably requested in writing from
time to time for the management. BSM may also enter into agreements with third parties for and on behalf of the Company and retain
professional services, such as legal counsel, appraiser, insurer, transfer agent, investment banks, as BSM deems necessary or advisable.
BSM will further provide the Company with qualified personnel to serve as chief executive officer and chief operating officer,
which persons shall devote as much of their time to the management of the Company and its subsidiaries as the Company deems necessary.
BSM may also from time to time provide other senior officers or personnel to the Company.
In addition, BSM will provide the Company
with qualified personnel to serve as Chief Executive Officer and Chief Operating Officer.
The initial term of the Consulting Agreement
is until December 31, 2013 and it will automatically renew for a one-year term on each anniversary of that date. The Company and
BSM can each terminate the Consulting Agreement for convenience upon 90 days prior written notice. The Company can also terminate
immediately upon written notice in the event of (i) any act of fraud, misappropriation of funds or embezzlements by BSM, (ii) willful
misconduct, bad faith or gross negligence, (iii) material breach of the agreement which remains uncured for 45 days, (iv) bankruptcy
or insolvency, or (v) dissolution of BSM. BSM may terminate upon 60 days prior written notice in case the Company or its subsidiaries
default in the performance of any material term, condition or covenant and such default remains uncured for 45 days.
For the services provided, including the
compensation of the Company's Chief Executive Officer and Chief Operating Officer, under the Consulting Agreement, the Company
will pay BSM a service fee of $50,000 per month and reimburse BSM for all of its documented business expenses incurred directly
on behalf of the Company. The parties shall apply their best effort to renegotiate the service fee by December 31, 2012, to reflect
the actual services being provided by BSM and expected services to be provided during the calendar year 2013 and on a going forward
basis. BSM is also eligible for a discretionary performance based fee, which shall be payable in cash or non-cash equitable compensation
at the sole discretion of the independent directors of the Company or by the Company if the chief executive officer is not an employee,
officer or affiliate of BSM.
In addition, the Company shall bear all
costs and expenses that are directly attributable to the salaries, bonuses and fringe benefits payable to accounting and operations
employees of BSM, to the extent of the accounting, operating and other administrative services provided by BSM on behalf of the
Company.
Under the Consulting Agreement, BSM does
not assume any responsibility other than to render the services in good faith and is not responsible for any actions of the board
of directors or other governing body of any of the Company's subsidiaries and has no responsibility for the directors, officers
and employees of the Company and its subsidiaries. The Company has the obligation to indemnify BSM, its affiliates and their respective
directors, managers, members, officers, employees and other representatives to the full extent permitted by the law, for any losses
and liabilities arising out of acts or omissions of such person in connection with the provision of services under the Consulting
Agreement, unless such act or omission constitutes bad faith, willful misconduct, gross negligence or reckless disregard of BSM's
duties. BSM shall, to extent lawful, indemnify the Company for any losses and liabilities arising out of BSM's breach of
the Consulting Agreement, bad faith, willful misconduct, gross negligence or reckless disregard of BSM's duties.
Francesco Piovanetti, the Chief Executive
Officer of the Company and Alberto Hernandez, the Chief Operating Officer of the Company, owns 25% each of the outstanding equity
interest in BSM.
Item 5.02 Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The disclosures contained under Item 1.01
are incorporated herein by this reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No.
Description
10.1
Management and Consulting Services Agreement dated October 24, 2012 between Bond Street Management LLC and Net Element International Inc.
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.
NET ELEMENT, INC.
Date: October 30, 2012
By:
/s/ Francesco Piovanetti
Name: 	Francesco Piovanetti
Title:	Chief
Executive Officer
EXHIBIT INDEX
Exhibit No.
Description
10.1
Management and Consulting Services Agreement dated October 24, 2012 between Bond Street Management LLC and Net Element International Inc.