Entry into a Material Definitive

On August 29, 2017, TOT Group, Inc., a Delaware corporation and a subsidiary of Net Element, Inc. (the Company), issued a Promissory Note (the Note) to MBF Merchant Capital, LLC (the Lender). Pursuant to the Note, TOT Group, Inc. borrowed from the Lender $275,000. Prior to maturity of the loan, the principal amount of the loan will carry an interest rate 13.95% per annum. TOT Group, Inc. agreed to pay $16,500 finance fee to the Lender, $5,500 of which is due at funding of this loan and the remainder together with the final payment due under the Note. TOT Group, Inc. may prepay the amounts due under the Note at any time upon providing prior written notice to the Lender and paying all amounts due under the Note as of the date of prepayment including, but not limited to, any unpaid portion of the finance fee described above. The principal and interest under the Note is repayable in 10 monthly installments of $29,288.76 each. This loan is maturing and becoming due and payable in full on June 28, 2018 to the extent not prepaid.

The above description of the Note is intended as a summary only and is qualified in its entirety by the terms and conditions set forth therein. Copy of the Note is attached hereto as Exhibit 10.1, and is incorporated herein by this reference. All readers are encouraged to read the entire text of the Note.

Item 2.03

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

The disclosures contained under Item 1.01 are incorporated herein by this reference.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits

Exhibit

Number

Description

10.1

Promissory Note, dated August 29, 2017, by TOT Group, Inc. in favor of MBF Merchant Capital, LLC

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: September 1, 2017

NET ELEMENT, INC.

By:

/s/ Jonathan New

Name:Jonathan New

Title:Chief Financial Officer

3

EXHIBIT INDEX

Exhibit

Number

Description

10.1

Promissory Note, dated August 29, 2017, by TOT Group, Inc. in favor of MBF Merchant Capital, LLC

4

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Other recent filings from the company include the following:

Major owner of Net Element International just disposed of 28,572 shares - June 12, 2018
Registration statement under Securities Act of 1933 - June 1, 2018

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