MANAGEMENT PRESENTATION 2018 H ALF Y EAR R ESULTS SAFE HARBOR - PowerPoint PPT Presentation

MANAGEMENT PRESENTATION 2018 H ALF 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 CHARTERING A COURSE TOWARDS SEAMLESS COMMERCE www.netelement.com

COMPANY OVERVIEW NET ELEMENT OVERVIEW ‣ Net Element, Inc. (NASDAQ: NETE) (“Net Element”) is a global technology and value-added solu>ons group ‣ Provides secure, reliable, easy-to-use and cost-effec>ve payment acceptance, processing, support, authoriza>on and se\lement services for tradi>onal, mobile and alterna>ve payments in a mul>-channel environment ‣ Fully-integrated payment solu>ons incorpora>ng fraud management and tokeniza>on technologies ‣ Developing decentralized blockchain ecosystem to act as a framework for a number of value-added payment services ‣ Diversified client base with strong recurring revenues ‣ Surpassed $60 million in revenue in 2017 ‣ $32.45 million in revenues for the First Half 2018 ‣ Highly ac>ve in world’s fastest growing markets ‣ 97 full->me employees www.netelement.com �4

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 ‣ ‣ Proved business in the United States with recurring revenues ‣ Diverse, low-risk, recession proved recurring revenue stream ‣ Strong established customer & partner base RESILIENT OPERATING LEVERAGE ‣ Resilient business with strong recurring revenue, diversified customer base 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 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 �5

COMPANY HIGHLIGHTS CONTINUED GROWTH Acquisi>on of recurring cash flows porkolio, projected to add over $5 ‣ million in gross profits over 4 years H1 2018 ‣ Launched subscrip>on-based payment processing, signed partnership agreement, projected to add over $1.5 million in gross profits 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 rela>onships with financial ins>tu>ons ‣ ‣ Expanded service offerings to over 100 payment methods interna>onally 2016 ‣ 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% OPERATIONAL OPTIMIZATION ‣ Debt reduced from $31 million to $3 million ‣ G&A reduced from $12 million to $7 million, excluding non-cash items 2014 ‣ $10 million credit facility to implement strategic ini>a>ves www.netelement.com www.netelement.com �6

PORTFOLIO OF BRANDS We focus on maximizing opportuni>es for our brands. Our vision is to set the standard for global cross-channel payments acceptance and value-added service offerings with focus on crea>on of unified global transac>on acceptance ecosystem One of the leading providers All the features and No fees. Merchants get of payment acceptance building blocks to make the full purchase price for solu>ons in the United States global commerce a reality the transac>on Payment acceptance without Visual POS solu>on includes Enterprise-class borders. Fully-integrated all that the business needs to infrastructure tools for Sales Central online processing plakorm streamline opera>ons back-office processing Our technology Allows users to make purchases Seamlessly redefine and development team brings by charging payments to their modernize experience at the ideas to life mobile phone bill POS and behind the scenes www.netelement.com www.netelement.com www.netelement.com �7

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 ALEXANDER SHAWN GIOVANNI CHRISTA SADOVSKIY BORISOV BROWN DI FEBO SHOOK Head of Integrated Head of Online Head of Risk Head of Acquiring Partner Payments Solu>ons Management & Compliance Growth BOARD OF DIRECTORS DREW FREEMAN KENES RAKISHEV HOWARD ASH JON NAJARIAN JONATHAN FICHMAN JAMES CAAN OLEG FIRER Chairman Director Director Director Director Director Director Noted global 30+ yrs payments International CNBC cast member Seasoned Fintech Accomplished Chief Execu>ve Officer Industrialist Experience Value-added specialist “Haloime Report” Execu>ve Actor & director Net Element TEAM EXPERIENCE www.netelement.com www.netelement.com �8

REVENUE GROWTH 2013-18 CAGR 26.4% $ 60.1 For the five-year period ending December 31, 2017, $ 54.3 Net Element has executed several complex ini>a>ves and con>nued to deliver double digit $ 40.2 percentage year-over-year organic growth $ 21.2 $ 18.7 223% GROWTH 2013 2014 2015 2016 2017 Revenue growth over five-year period ending December 31, 2017 www.netelement.com www.netelement.com www.netelement.com �9 �9

RECURRING REVENUE STREAMS 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 TRANSACTION SOFTWARE DATA & PROCESSING LICENSE ANALYTICS RECURRING REVENUE Fees charged on a per Sooware as a license Business Intelligence SOFTWARE DATA & transac>on and (SaaS) model allows tools are priced based on LICENSE ANALYTICS processed volume basis merchants to get point- usage. A percentage fee for payment acceptance of-sale sooware without is charged over volume services provided to the upfront capital processed merchant expenditure www.netelement.com www.netelement.com �10