Entry into a Material Definitive

On May 20, 2017, Net Element, Inc. (the Company), Maglenta Enterprises Inc. (Maglenta) and Champfremont Holding Ltd. (Champfremont; together with Maglenta collectively the Sellers) entered into the Amendment (the Amendment) to the Settlement Agreement effective as of October 21, 2016 (the Settlement Agreement). The Amendment was accepted and agreed to by TOT Group Europe, Ltd., OT Group Russia LLC, each a subsidiary of the Company.

Pursuant to the Amendment, Section 1 of the Settlement Agreement was amended in its entirety to reflect the new terms under which the Company agreed to pay to the Sellers an aggregate of $1,792,071 (the Principal Balance) plus $29,604 in interest in installments pursuant to the payment schedule set forth in Exhibit A to the Amendme nt. Further, Subsections 2 (a) through (f) of the Settlement Agreement were amended in their entirety to reflect the new amounts and dates of such payments (consistent with the payment schedule set forth in Exhibit A to the Amendment) and to provide for the remedies to the Sellers if any payment is past due for more than 5 business days. Further, Exhibit B, attached to the Settlement Agreement, showing amounts and timing for payments, assuming timely payment of all amounts due, was replaced by Exhibit A attached to the Amendment. The Company already made the initial installment payment to the Sellers in the amount of $800,000.

The foregoing is a summary description of certain terms of the Amendment and, by its nature, is incomplete. Copy of the Amendment (including Exhibit B to the Amendment) is filed herewith as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference. All readers are encouraged to read the entire text of the Amendment (including Exhibit B to the Amendment).

Item 2.03

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On May 24, 2017, the Company opted to exchange a tranche in the aggregate amount of $150,000 for 230,875 shares of the Company common stock based on the exchange price of $0.6497 per share for this tranche pursuant to the Master Exchange Agreement (as amended, the Agreement) with Crede CG III, Ltd. (Crede). The Agreement and its terms were disclosed in our Current Report on Form 8-K filed on May 3, 2016 and our Current Report on Form 8-K filed on March 8, 2017. Such shares of common stock of the Company were issued to Crede under an exemption from the registration requirements of the Securities Act of 1933, as amended (the Securities Act), in reliance upon Section 3(a)(9) of the Securities Act.

Item 3.02

Unregistered Sales of Equity Securities.

The disclosure provided in Item 2.03 of this Report is hereby incorporated by reference into this Item 3.02.

Item 9.01

Financial Statements and Exhibits.

(d)

Exhibits

Exhibit

Number

Description

10.1

A

mendment of Settlement Agreement among Net Element, Inc., Maglenta Enterprises Inc. and Champfremont Holding Ltd. (accepted and agreed to by TOT Group Europe, Ltd., TOT Group Russia LLC)*

_________________

*Filed herewith.

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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: May 24, 2017

NET ELEMENT, INC.

By:

/s/ Jonathan New

Name: Jonathan New

Title: Chief Financial Officer

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EXHIBIT INDEX

Exhibit

Number

Description

10.1

A

mendment of Settlement Agreement among Net Element, Inc., Maglenta Enterprises Inc. and Champfremont Holding Ltd. (accepted and agreed to by TOT Group Europe, Ltd., TOT Group Russia LLC)*

_________________

*Filed herewith.

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Other recent filings from the company include the following:

Net Element International releases salary data. CEO sees compensation fall -51% - Oct. 10, 2018

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