SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
Net Element, Inc.
(Name of Issuer)
Common Stock, $0.0001 per share par value
(Title of Class of Securities)
64111R 102
(CUSIP Number)
Nurlan Abduov
100 Gagarin Street, Apt. 142, Almaty, Kazakhstan
+41 44 287 24 52
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
April 13, 2015
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ¨
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
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CUSIP No. 64111R 102
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| 1 |
Names of Reporting Persons.
Nurlan Abduov
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| 2 |
Check the Appropriate Box if a Member of a Group |
(a) x (b) ¨ | ||
| 3 | SEC Use Only | |||
| 4 | Source of Funds | PF | ||
| 5 | Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) | ¨ | ||
| 6 | Citizenship or Place of Organization | Republic of Kazakhstan | ||
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | Sole Voting Power | 0 | |
| 8 | Shared Voting Power | 4,538,737 | ||
| 9 | Sole Dispositive Power | 0 | ||
| 10 | Shared Dispositive Power | 4,538,737 | ||
| 11 | Aggregate Amount Beneficially Owned by Each Reporting Person | 4,538,737 | ||
| 12 | Check if the Aggregate Amount in Row (11) Excludes Certain Shares | ¨ | ||
| 13 | Percent of Class Represented by Amount in Row (11) | 9.6% | ||
| 14 | Type of Reporting Person | IN | ||
* Number of shares reflects 9.6% of 47,460,032, which was the number of the outstanding shares of Common Stock as of March 30, 2015.
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CUSIP No. 64111R 102
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| 1 |
Names of Reporting Persons.
Beno Distribution, Ltd.
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| 2 |
Check the Appropriate Box if a Member of a Group |
(a) x (b) ¨ | ||
| 3 | SEC Use Only | |||
| 4 | Source of Funds | AF | ||
| 5 | Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) | ¨ | ||
| 6 | Citizenship or Place of Organization | British Virgin Islands | ||
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | Sole Voting Power | 4,538,737* | |
| 8 | Shared Voting Power | 0 | ||
| 9 | Sole Dispositive Power | 4,538,737* | ||
| 10 | Shared Dispositive Power | 0 | ||
| 11 | Aggregate Amount Beneficially Owned by Each Reporting Person | 4,538,737 | ||
| 12 | Check if the Aggregate Amount in Row (11) Excludes Certain Shares | ¨ | ||
| 13 | Percent of Class Represented by Amount in Row (11) | 9.6% | ||
| 14 | Type of Reporting Person | OO | ||
* Number of shares reflects 9.6% of 47,460,032, which was the number of the outstanding shares of Common Stock as of March 30, 2015.
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CUSIP No. 64111R 102
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| 1 |
Names of Reporting Persons.
K 1 Holding Limited
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| 2 |
Check the Appropriate Box if a Member of a Group
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(a) x (b) ¨ | ||
| 3 | SEC Use Only | |||
| 4 | Source of Funds | AF | ||
| 5 | Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) | ¨ | ||
| 6 | Citizenship or Place of Organization | British Virgin Islands | ||
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | Sole Voting Power | 0 | |
| 8 | Shared Voting Power | 0 | ||
| 9 | Sole Dispositive Power | 0 | ||
| 10 | Shared Dispositive Power | 0 | ||
| 11 | Aggregate Amount Beneficially Owned by Each Reporting Person | 0 | ||
| 12 | Check if the Aggregate Amount in Row (11) Excludes Certain Shares | ¨ | ||
| 13 | Percent of Class Represented by Amount in Row (11) | 0% | ||
| 14 | Type of Reporting Person | OO | ||
* On April 13, 2015, K 1 Holding Limited sold all of the shares of Common Stock of Net Element, Inc. held by K 1 Holding Limited. Therefore, K 1 Holding Limited no longer owns any shares of Common Stock of Net Element, Inc.
Item 1. Security and Issuer
This Amendment No. 1 to Schedule 13D (the “Amendment No. 1”) relates to the common stock, $0.0001 per share par value (the “Common Stock”), of Net Element, Inc., a Delaware corporation (the “Company”), and amends the Schedule 13D filed by Nurlan Abduov, Beno Distribution, Ltd., a company organized and existing under the laws of the British Virgin Islands (“Beno”) and K 1 Holding Limited, a company organized and existing under the laws of the British Virgin Islands (“K 1 Holding”) (collectively, the “Reporting Persons”) with the Securities and Exchange Commission on October 14, 2014 (the “Schedule 13D”). The Company’s principal executive offices are located at 3363 NE 163rd Street, Suite 705, North Miami Beach, FL 33160.
This Amendment No. 1 is being filed by the Reporting Persons to report that K 1 Holding sold 2,518,688 of its shares of Common Stock in the Company. Except as specifically provided herein, this Amendment No. 1 does not modify any of the information previously reported in the Schedule 13D. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Schedule 13D.
Item 4. Purpose of Transaction
Item 4 is hereby amended by the addition of the following:
On April 13, 2015, K1 Holding sold 2,518,688 of its shares of Common Stock in the Company to Mayor Trans Ltd., a company incorporated in the Republic of Seychelles (“Mayor Trans”), for $2.00 per share, pursuant to a Stock Purchase Agreement dated April 13, 2015 by and between K 1 Holding and Mayor Trans.
Item 5. Interest in Securities of Issuer
Items 5(a), (b) and (c) are hereby amended and restated in their entirety by the following:
(a) – (b) As of the date hereof, Beno is the beneficial owner of 4,538,737 shares of Common Stock of the Company, representing approximately 9.6% of the outstanding shares of Common Stock (based on 47,460,032 shares outstanding as of March 30, 2015, as reported in the Company’s Form 10-K for the year ended December 31, 2014) and has sole voting power and sole dispositive power with respect to such shares. Nurlan Abduov, as the sole shareholder of Beno, may also be deemed to beneficially own the above-described shares of Common Stock beneficially owned by Beno and has shared voting power and shared dispositive power with respect to such shares. As of the date hereof, K 1 Holding no longer owns any shares of Common Stock of the Company.
(c) None of Nurlan Abduov, Beno or K 1 Holding has effected any transaction in the Common Stock in the past 60 days, except as disclosed under Item 3 of this Schedule 13D, all of which disclosures are incorporated herein by this reference.
Item 7. Material to be Filed as Exhibits
Item 7 is hereby amended by the addition of the following:
| Exhibit 99.4 | Stock Purchase Agreement, dated April 13, 2015, by and between K 1 Holding and Mayor Trans. |
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete, and correct.
| Date: April 15, 2015 | /s/ Nurlan Abduov | |||
| Nurlan Abduov | ||||
| Date: April 15, 2015 | BENO DISTRIBUTION, LTD. | |||
| By: | /s/ Andrew T. Moustras | |||
| Andrew T. Moustras, Director | ||||
| Date: April 15, 2015 | K 1 HOLDING LIMITED | |||
| By: | /s/ Andrew T. Moustras | |||
| Andrew T. Moustras, Director | ||||
EXHIBIT INDEX
| Exhibit 99.4 | Stock Purchase Agreement, dated April 13, 2015, by and between K 1 Holding and Mayor Trans. |
Exhibit 99.4
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (“Agreement”) is entered into as of 13th of April, 2015 by and between K1 Holding Limited. (“Seller”) and Mayor Trans Ltd. (“Purchaser”). Purchaser and Seller may collectively be referred to as the “Parties.”
WHEREAS, Seller is the record owner and holder of shares of the capital stock of Net Element, Inc (the “Company”), a Delaware Corporation; and
WHEREAS, the Parties desire to enter into this Agreement pursuant to which Purchaser will purchase from Seller shares of capital stock of the Company.
NOW, THEREFORE, in consideration for the promises set forth in this Agreement, the Parties agree as follows:
| 1. | PURCHASE AND SALE: Subject to the terms and conditions set forth in this Agreement, Purchaser hereby agrees to purchase from Seller, and Seller hereby agrees to sell, transfer and convey to the Purchaser 2,518,688 (two million five hundred eighteen thousand six hundred eighty eight) shares of ordinary voting stock of the Company (the “Stock”). |
| 2. | PURCHASE PRICE: The purchase price for each share of Stock shall be two USA dollars and zero cents ($2.00) for an aggregate purchase price of five million thirty seven thousand three hundred seventy six USA dollars and zero cents ($5,037,376.00) (the “Purchase Price”), already paid in full to the Seller. |
| 3. | CLOSING: The closing contemplated by this Agreement for the transfer of the Stock shall take place at 4-2 Degtyarny Pereulok, Moscow, Russian Federation on 13th of Apil, 2015 at 20:00. The certificates representing the Stock (if issued) shall be duly endorsed for transfer or accompanied by an appropriate stock transfer. |
| 4. | REPRESENTATIONS AND WARRANTIES OF SELLER: Seller hereby warrants and represents that: |
| (a) | Restrictions on Stock. The Seller is not a party to any agreements that create rights or obligations in the Stock relating to any third party including voting or stockholder agreements. The Seller is the lawful owner of the Stock, free and clear of any encumbrances, security interests or liens of any kind and has full power and authority to sell and transfer the Stock as contemplated in this Agreement. |
| (b) | Organization and Standing. To the Seller’s knowledge, the Company is duly organized, validly existing and in good standing under the laws of the State of Delaware and has full power and authority to own and operate its property and assets and to carry on its business as presently conducted. |
| 5. | SEVERABILITY: If any part or parts of this Agreement shall be held unenforceable for any reason, the remainder of this Agreement shall continue in full force and effect. If any provision of this Agreement is deemed invalid or unenforceable by any court of competent jurisdiction, and if limiting such provision would make the provision valid, then such provision shall be deemed to be construed as so limited. |
| 6. | BINDING EFFECT: The covenants and conditions contained in this Agreement shall apply to and bind the parties and the heirs, legal representatives, successors and permitted assigns of the Parties. |
| 7. | BROKER’S FEES: The Parties represent that there has been no act in connection with the transactions contemplated in this Agreement that would give rise to a valid claim against either party for a broker’s fee, finder’s fee or other similar payment. |
| 8. | ENTIRE AGREEMENT: This Agreement constitutes the entire agreement between the Parties and supersedes any prior understanding or representation of any kind preceding the date of this Agreement. There are no other promises, conditions, understandings or other agreements, whether oral or written, relating to the subject matter of this Agreement. This Agreement may be modified in writing and must be signed by both the Seller and Purchaser. |
| 9. | GOVERNING LAW: This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware. |
| 10. | NOTICE: Any notice required or otherwise given pursuant to this Agreement shall be in writing and mailed certified return receipt requested, postage prepaid, or delivered by overnight delivery service: |
| (a) | If to Purchaser: |
Mayor Trans Ltd.
103 Sham Peng Tong Plaza
Victoria, Mahe, Seychelles
| (b) | If to Seller: |
K1 Holding Limited
BVI, Trident Chambers,
P.O.Box 146, Road Town, Tortola
| Stock Purchase Agreement | 2 |
| 11. | WAIVER: The failure of either party to enforce any provisions of this Agreement shall not be deemed a waiver or limitation of that party's right to subsequently enforce and compel strict compliance with every provision of this Agreement. |
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed the day and year first above written.
| PURCHASER: | SELLER: | ||
| /s/ Rufat Baratzada | /s/ Irene G Spoerry | ||
| Rufat Baratzada | Irene G Spoerry | ||
| Director & Owner | Owner |
| Stock Purchase Agreement | 3 |