INVESTOR PRESENTATION 2019 F ULL -Y EAR R ESULTS
SAFE HARBOR STATEMENT Net Element, Inc. is traded on the NASDAQ Capital Market under the >cker symbol “NETE” This presenta>on is for discussion purposes only. All prices and rates referenced herein are indica>ve and subject to market condi>ons. The material is based upon informa>on that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. The material available in this presenta>on may contain forward-looking statements, which are subject to risks, uncertain>es and assump>ons. In some cases, you can iden>fy these statements by forward-looking words such as “may”, “might”, “will”, “should”, “expect”, “plan”, “an>cipate”, “believe”, “es>mate”, “predict”, “op>mis>c”, “poten>al”, “future” or “con>nue”, the nega>ve of these terms and other comparable terminology. Such forward-looking statements are based on current plans, es>mates and expecta>ons and are made pursuant to the Private Securi>es Li>ga>on Reform Act of 1995. Forward-looking statements are based on known and unknown risks, assump>ons, uncertain>es and other factors. The Company’s actual results, performance and achievements may differ materially from any future results, performance, or achievements expressed or implied by such forward- looking statements. We do not assume responsibility for the accuracy or completeness of any forward-looking statement and you should not rely on forward-looking statements as predic>ons of future events. We are under no duty to update any of these forward- looking statements to conform them to actual results or revised expecta>ons. This presenta>on contains certain non-GAAP financial measures determined by methods other than in accordance with generally accepted accoun>ng principles. Such non-GAAP financial measures include: general and administra>ve expense before non-cash compensa>on expense. Management uses these non-GAAP financial measures to assess the performance of Net Element’s core business. Net Element believes that these non-GAAP financial measures provide meaningful addi>onal informa>on about Net Element to assist investors in evalua>ng Net Element’s opera>ng results. These non-GAAP financial measures should not be considered as a subs>tute for opera>ng results determined in accordance with GAAP and may not be comparable to other similarly >tled measures of other companies. Any investment in Net Element will be subject to certain risks related to the nature of the Company’s business and the structure and opera>ons of the Company. Any investment in the Company should be made only with an apprecia>on of the applicable risks, which are described in the Company’s filings with the SEC. www.netelement.com www.netelement.com 2
COMPANY OVERVIEW Net Element, Inc. (NASDAQ: NETE) (“Net Element”) is a global technology and value-added payment acceptance solu>ons group ‣ Net Element enables merchants to accept electronic payments (e.g. credit, debit) at the point of sale (“POS”), online and via mobile payment technologies ‣ Broad range of payment acceptance and transac>on processing services that enable merchants of all sizes to accept and process over 100 different payment op>ons in a mul>-channel environment ‣ Fully-integrated payment solu>ons incorpora>ng fraud management and tokeniza>on technologies ‣ Con>nued development of disrup>ve technologies such as blockchain, payments enablement for Internet of Things, biometrics payment acceptance and ar>ficial intelligence ‣ Diversified client base with strong recurring revenues ‣ Achieved $65 million in revenue in 2019 ‣ Surpassed $3.7 billion in total transac>on volume ‣ 82 full->me employees www.netelement.com 3
INVESTMENT HIGHLIGHTS LARGE & GROWING INDUSTRY ‣ Large and growing market with favorable economic trends ‣ The use of non-cash forms of payments including mobile payments has steadily increased over the past then years and con>nues to climb RECURRING REVENUE BUSINESS MODEL ‣ Focused on fast growing and highly profitable market segments ‣ Proven business model in the United States with recurring revenues ‣ Diverse, low-risk, recession proof recurring revenue stream ‣ Strong established customer & partner base RESILIENT OPERATING LEVERAGE ‣ Resilient business with strong recurring revenue and good visibility ‣ Full front and back office opera>ons including risk, underwri>ng, deployment, ac>va>on, client services, data entry and reten>on ‣ Significant, untapped opportuni>es for expansion and growth in selected ver>cals and markets with the focus on value-added offerings PROVEN MANAGEMENT TEAM ‣ Track record of scaling businesses and delivering shareholder value ‣ Proven achievements in new product launch ‣ Proven achievements in new market development ‣ Relentless focus on value crea>on and growth www.netelement.com www.netelement.com 4
COMPANY EVOLUTION ACHIEVED OPERATING EFFICIENCY ‣ Achieved organic growth across all categories ‣ Launched Netevia In-App Payments SDK for Internet of Things (“IoT”) 2019 ‣ Launched Blade, proprietary, fully-automated, AI-powered underwri>ng solu>on with predic>ve scoring EXECUTED STRATEGIC OPPORTUNITIES ‣ Acquired recurring cash flows porkolios, projected to add over $9 million in gross profits over 4 years 2018 ‣ Launched subscrip>on-based payment processing, signed partnership agreement, projected to add over $1.5 million in gross profit over 4 years POSITIONED FOR GROWTH ‣ Received $7.55 million ins>tu>onal investment to support growth ‣ Ensured con>nued compliance with NASDAQ lis>ng requirements 2017 ‣ Launched business unit focused on blockchain technology FOCUS ON VALUE-ADDED RELATIONSHIPS ‣ Expanded direct processing rela>onships with financial ins>tu>ons ‣ Expanded service offerings to over 100 payment methods 2016 interna>onally ‣ Annual revenues increased 35% ACQUISITION OF ONLINE PAYMENT PLATFORM ‣ Acquisi>on of PayOnline, leading online payment plakorm ‣ Expanded PayOnline to selected emerging markets 2015 ‣ Annual revenues increased 89.5% www.netelement.com www.netelement.com 5
MANAGEMENT TEAM EXECUTIVE MANAGEMENT OLEG STEVEN JEFFREY ANDREY DAYAN FIRER WOLBERG GINSBERG KROTOV MARTINEZ Chief Execu>ve Chief Legal Chief Financial Chief Technology Investor Officer Officer Officer Officer Rela>ons BUSINESS LINE MANAGEMENT VLAD SVETLANA SHAWN GIOVANNI TOM ESENNIKOVA SADOVSKIY BROWN DI FEBO LINEEN Head of Online Head of Integrated Head of Risk Head of Acquiring Vice President Payments Solu>ons Management & Compliance Strategic Ini>a>ves BOARD OF DIRECTORS OLEG FIRER JON NAJARIAN JAMES CAAN HOWARD ASH Execu>ve Chairman Director Non-Vo>ng Director Director Chief Execu>ve CNBC cast member Accomplished Interna>onal Officer, Net Element Value-added “Halnime Report” Actor & director specialist TEAM EXPERIENCE www.netelement.com www.netelement.com 6
RECURRING REVENUE STREAMS RECURRING REVENUE AS PERCENTAGE OF TOTAL REVENUE 2019 We have amassed a broad porkolio of value added applica>ons that leverage the growth in payments to create a diverse array of recurring revenues and differen>ate us in the marketplace. Recurring service revenue is the primary revenue component for the Company TRANSACTION PROCESSING 85% TRANSACTION SOFTWARE DATA & RECURRING PROCESSING LICENSE ANALYTICS REVENUE 100% SOFTWARE DATA & Fees charged on a per Sonware as a license Business Intelligence LICENSE ANALYTICS transac>on and (SaaS) model allows tools are priced based on 3% 12% processed volume basis merchants to get point- usage. A percentage fee for payment acceptance of-sale sonware without is charged over volume services provided to the upfront capital processed merchant expenditure www.netelement.com www.netelement.com 7
POWERFUL ECOSYSTEM CONSUMERS MERCHANTS • Allows fric@onless commerce on • Allows real-@me engagement any device worldwide with consumers • Cloud-based plaTorm provides • Maintain control of consumer enhanced security rela@onship • Omni-channel giU and loyalty • Merchant-branded, white label solu@on (“Payment as a program allowing consumers to earn points across all devices Service”) � � | � � Payment Acceptance Value-Add Offerings Big Data/Analytics Mobile Payments FINANCIAL INSTITUTIONS MOBILE NETWORK OPERATORS POS Solutions • Maintain control of their network • Enables MNOs to provide full mobile commerce solu@ons • Acquire new consumers seeking including DCB, one-click, PSMS, innova@ve technology under the WAP, A2P/P2A and PIN submit trusted bank brand w � � � � � � � � � � � � • Significant pathway for growing • Effec@ve adver@sing and loyalty MULTI-CHANNEL PROCESSING consumer engagement channel OPTIONS � � 1 Integration API 100+ � 1 Back Office PAYMENT WITH � 1 Settlement � 1 Dedicated Team www.netelement.com www.netelement.com 8
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