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<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>&nbsp;</b></p>

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<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>UNITED STATES</b></p>

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<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>SECURITIES AND EXCHANGE COMMISSION<br>
WASHINGTON, DC 20549</b></p>

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<p style="font-family:'Times New Roman', Times, serif;font-size:18pt;margin:0pt;text-align:center;"><b>FORM</b><b> </b><b>8-K</b></p>

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<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>CURRENT REPORT</b></p>

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<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>Pursuant to Section 13 or 15(d) of the Securities </b><b>Exchange Act of 1934</b></p>

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<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>Date of report (Date of earliest event reported) </b><b>December 26, 2018</b></p>

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<p style="font-family:'Times New Roman', Times, serif;font-size:18pt;margin:0pt;text-align:center;"><b>Net</b><b> </b><b>Element,</b><b> </b><b>Inc.</b></p>

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<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>(Exact Name of Registrant as Specified in Charter)</b></p>

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			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>Del</b><b>a</b><b>w</b><b>a</b><b>re</b></p>
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			<td style="vertical-align:top;width:2.8%;">&nbsp;</td>
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			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>00</b><b>1</b><b>-34</b><b>8</b><b>8</b><b>7</b></p>
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			<td style="vertical-align:top;width:2.8%;">&nbsp;</td>
			<td colspan="2" style="vertical-align: top; width: 33%; border-bottom: thin solid rgb(0, 0, 0);">
			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>90-1025599</b></p>
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			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>(State or Other Jurisdiction<br>
			of Incorporation)</b></p>
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			<td style="vertical-align:top;width:2.8%;">&nbsp;</td>
			<td style="vertical-align:top;width:29.2%;">
			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>(Commission File<br>
			Number)</b></p>
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			<td style="vertical-align:top;width:2.8%;">&nbsp;</td>
			<td colspan="2" style="vertical-align:top;width:33%;">
			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>(IRS Employer<br>
			Identification No.)</b></p>
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			<p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b>3</b><b>3</b><b>6</b><b>3</b><b>&nbsp;</b><b>N</b><b>E</b><b>&nbsp;</b><b>1</b><b>6</b><b>3</b><b>rd</b><b>&nbsp;</b><b>S</b><b>t</b><b>ree</b><b>t</b><b>, </b><b>Su</b><b>i</b><b>t</b><b>e </b><b>7</b><b>0</b><b>5</b><b>, N</b><b>o</b><b>r</b><b>t</b><b>h</b><b>&nbsp;</b><b>M</b><b>i</b><b>a</b><b>mi</b><b>&nbsp;</b><b>B</b><b>e</b><b>a</b><b>c</b><b>h</b><b>, </b><b>F</b><b>L</b><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;33160 </b></p>
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			<td style="vertical-align:top;width:8.7%;">&nbsp;</td>
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			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Address of Principal </b><b>Executive Offices)&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</b><b>(Zip Code)</b></p>
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			<td colspan="5" style="vertical-align:top;width:83%;">&nbsp;</td>
			<td style="vertical-align:top;width:9.4%;">&nbsp;</td>
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			<td style="vertical-align:top;width:8.7%;">&nbsp;</td>
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			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>(</b><b>30</b><b>5</b><b>)</b><b>&nbsp;</b><b>5</b><b>0</b><b>7-</b><b>8</b><b>80</b><b>8</b></p>
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			<td style="vertical-align:top;width:8.7%;">&nbsp;</td>
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			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>(Registrant</b><b>&rsquo;</b><b>s telephone number, including area code)</b></p>
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			<td style="vertical-align:top;width:9.4%;">&nbsp;</td>
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			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>Not Applicable</b></p>
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			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>(Former Name or Former Address, if Changed Since Last Report)</b></p>
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			<td style="vertical-align:top;width:8.7%;">&nbsp;</td>
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			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">&nbsp;</p>

			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;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-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

			<p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt 0pt 0pt 18pt; text-align: justify; text-indent: 0pt;">&#9744;Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</p>

			<p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt 0pt 0pt 18pt; text-align: justify; text-indent: 0pt;">&#9744;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</p>

			<p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt 0pt 0pt 18pt; text-align: justify; text-indent: 0pt;">&#9744;Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</p>

			<p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt 0pt 0pt 18pt; text-align: justify; text-indent: 0pt;">&#9744;Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</p>
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<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (&sect;230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (&sect;240.12b-2 of this chapter).</p>

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			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:36pt;margin-right:0pt;margin-top:0pt;text-align:justify;text-indent:-36pt;">Emerging growth company</p>
			</td>
			<td colspan="3" style="vertical-align:bottom;width:68.6%;">
			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:36pt;margin-right:0pt;margin-top:0pt;text-align:justify;text-indent:-36pt;">&#9744;</p>
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			<td colspan="2" style="vertical-align:bottom;width:94.1%;">
			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. &#9744;</p>
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			<td style="vertical-align:bottom;width:0.9%;">&nbsp;</td>
			<td>&nbsp;</td>
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<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>Item </b><b>1.01</b><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</b><b>Entry into a Material Definitive Agreement</b><b>.</b></p>

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<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">On December 26, 2018, Unified Portfolio Acquisitions, LLC (the &ldquo;Purchaser&rdquo;), a subsidiary of Net Element, Inc. (the &ldquo;Company&rdquo;), entered into an Advance and Residual Purchase Agreement (the &ldquo;Agreement&rdquo;) with Argus Merchant Services, LLC (&quot;Argus&quot;) and Treasury Payments, LLC (&quot;Treasury&quot;); Argus and Treasury are collectively referred to herein as the &ldquo;Seller&rdquo;). Pursuant to the Agreement, the Purchaser acquired certain transactional services portfolios (&ldquo;cash flow assets&rdquo;) from the Seller for a total purchase consideration of $1,426,000. The cash flow assets consist of residuals (the &ldquo;Residuals&rdquo;) that the Seller is entitled to receive pursuant to certain agreements (including any amendments of such agreements, the &ldquo;Combined Marketing Agreements&rdquo;) with TOT Payments, LLC (doing business as Unified Payments), a subsidiary of the Company.</p>

<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">On October 27, 2018, the Purchaser paid to Seller $1,150,000 (the &ldquo;Advance Amount&rdquo;). The Advance Amount and the balance of the purchase consideration is to be repaid to the Purchaser from Residuals due to the Seller, whereby each and every month, commencing from January 2019 (the &ldquo;Effective Date&rdquo;) and for a period of 24 months (the &ldquo;Advance Period&rdquo;), the Purchaser will be entitled to a certain amount of the Seller&rsquo;s Residuals. Such Residuals due to the Purchaser are secured by certain of the Seller&rsquo;s property as collateral.</p>

<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>

<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;text-indent:36pt;">At the end of the Advance Period (the &ldquo;Transfer Date&rdquo;), the Purchaser will receive an ownership interest in a portfolio of cash flow assets by creating with the Seller, a new static portfolio pool of mutually agreed residual income from Seller ISO codes comprising merchant accounts boarded by the Seller under the Combined Marketing Agreements.</p>

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<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>Item 9.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial Statements and Exhibits.</b></p>

<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>&nbsp;</b></p>

<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>(d) Exhibits</b></p>

<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>&nbsp;</b></p>

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			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>Exhibit</b></p>

			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><u><b>Number</b></u></p>
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			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>
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			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>Description</b></p>
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			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>
			</td>
			<td colspan="2" style="vertical-align:middle;width:87%;">
			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>
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			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">10.1</p>
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			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>
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			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><a href="ex_132210.htm" style="-sec-extract:exhibit;">Advance and Residual Purchase Agreement, dated December 26, 2018,&nbsp;among Unified Portfolio Acquisitions, LLC, Argus Merchant Services, LLC and Treasury Payments, LLC*</a></p>
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			<td colspan="2" style="vertical-align:middle;width:87%;">&nbsp;</td>
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			<td style="vertical-align:bottom;width:0.4%;">
			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;&nbsp;</p>
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			<td style="vertical-align:top;width:86.6%;">
			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">_________________</p>

			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">*Filed herewith.</p>
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<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">&nbsp;</p>

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<div id="PGNUM" style="text-align: center; width: 100%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">2</div>

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<p style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin: 0pt; text-align: left">&nbsp;</p>

<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>SIGNATURES</b></p>

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<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36.7pt;">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-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">&nbsp;</p>

<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Dated: December 28, 2018</p>

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<p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt 0pt 0pt 55.8%; text-align: left; text-indent: -27pt;">NET ELEMENT, INC.</p>

<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:234pt;margin-right:0pt;margin-top:0pt;text-align:left;">&nbsp;</p>

<p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt 0pt 0pt 55.8%; text-align: left; text-indent: -27pt;">By:&nbsp; &nbsp; &nbsp; &nbsp;<u>/s/ Jeffrey Ginsberg</u>______</p>

<p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt 0pt 0pt 55.8%; text-align: left; text-indent: -27pt;">Name:&nbsp; Jeffrey Ginsberg</p>

<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin-bottom:0pt;margin-left:55.8%;margin-right:0pt;margin-top:0pt;text-align:left;text-indent:-27pt;">Title: &nbsp;&nbsp;&nbsp;Chief Financial Officer</p>

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<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b>EXHIBIT INDEX</b></p>

<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">&nbsp;</p>

<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">&nbsp;</p>

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			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>Exhibit</b></p>

			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><u><b>Number</b></u></p>
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			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>Description</b></p>
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			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>
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			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">&nbsp;</p>
			</td>
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			<td style="vertical-align:top;width:8.9%;">
			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">10.1</p>
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			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">Advance and Residual Purchase Agreement, dated December 26, 2018,&nbsp;among Unified Portfolio Acquisitions, LLC, Argus Merchant Services, LLC and Treasury Payments, LLC*</p>
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			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">_________________</p>

			<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">*Filed herewith.</p>
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<p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;">4</p>
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nete20181228_8k.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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)
December 26, 2018
Net
Element,
Inc.
(Exact Name of Registrant as Specified in Charter)
Del
a
w
a
re
00
1
-34
8
8
7
90-1025599
(State or Other Jurisdiction
of Incorporation)
(Commission File
Number)
(IRS Employer
Identification No.)
3
3
6
3
N
E
1
6
3
rd
S
t
ree
t
,
Su
i
t
e
7
0
5
, N
o
r
t
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M
i
a
mi
B
e
a
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h
,
F
L
33160
(Address of Principal
Executive Offices)
(Zip Code)
(
30
5
)
5
0
7-
8
80
8
(Registrant
'
s telephone number, including area code)
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))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01
Entry into a Material Definitive Agreement
.
On December 26, 2018, Unified Portfolio Acquisitions, LLC (the "Purchaser"), a subsidiary of Net Element, Inc. (the "Company"), entered into an Advance and Residual Purchase Agreement (the "Agreement") with Argus Merchant Services, LLC ("Argus") and Treasury Payments, LLC ("Treasury"); Argus and Treasury are collectively referred to herein as the "Seller"). Pursuant to the Agreement, the Purchaser acquired certain transactional services portfolios ("cash flow assets") from the Seller for a total purchase consideration of $1,426,000. The cash flow assets consist of residuals (the "Residuals") that the Seller is entitled to receive pursuant to certain agreements (including any amendments of such agreements, the "Combined Marketing Agreements") with TOT Payments, LLC (doing business as Unified Payments), a subsidiary of the Company.
On October 27, 2018, the Purchaser paid to Seller $1,150,000 (the "Advance Amount"). The Advance Amount and the balance of the purchase consideration is to be repaid to the Purchaser from Residuals due to the Seller, whereby each and every month, commencing from January 2019 (the "Effective Date") and for a period of 24 months (the "Advance Period"), the Purchaser will be entitled to a certain amount of the Seller's Residuals. Such Residuals due to the Purchaser are secured by certain of the Seller's property as collateral.
At the end of the Advance Period (the "Transfer Date"), the Purchaser will receive an ownership interest in a portfolio of cash flow assets by creating with the Seller, a new static portfolio pool of mutually agreed residual income from Seller ISO codes comprising merchant accounts boarded by the Seller under the Combined Marketing Agreements.
Item 9.01     Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number
Description
10.1
Advance and Residual Purchase Agreement, dated December 26, 2018, among Unified Portfolio Acquisitions, LLC, Argus Merchant Services, LLC and Treasury Payments, LLC*
_________________
*Filed herewith.
2
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.
Dated: December 28, 2018
NET ELEMENT, INC.
By:
/s/ Jeffrey Ginsberg
______
Name:  Jeffrey Ginsberg
Title:    Chief Financial Officer
3
EXHIBIT INDEX
Exhibit
Number
Description
10.1
Advance and Residual Purchase Agreement, dated December 26, 2018, among Unified Portfolio Acquisitions, LLC, Argus Merchant Services, LLC and Treasury Payments, LLC*
_________________
*Filed herewith.
4