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NETE > SEC Filings for NETE > Form 8-K/A on 19-Nov-2012All Recent SEC Filings

Show all filings for NET ELEMENT INTERNATIONAL, INC.

Form 8-K/A for NET ELEMENT INTERNATIONAL, INC.


19-Nov-2012

Completion of Acquisition or Disposition of Assets, Notice of D


Item 2.01 Completion of Acquisition or Disposition of Assets.

On October 2, 2012, Cazador Acquisition Corporation Ltd., a Cayman Islands exempted company ("Cazador"), completed its merger (the "Merger") with Net Element, Inc. ("Net Element"), and the various transactions contemplated by the Agreement and Plan of Merger, dated as of June 12, 2012 (the "Merger Agreement"), between Cazador and Net Element were consummated. Immediately prior to the effectiveness of the Merger, Cazador changed its jurisdiction of incorporation by discontinuing as an exempted company in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware. Effective upon consummation of the Merger (the "Closing"),
(i) Net Element was merged with and into Cazador, resulting in Net Element ceasing to exist and Cazador continuing as the surviving company, and (ii) Cazador changed its name to "Net Element International, Inc." (the "Company"). The Merger, the Merger Agreement and the transactions effected in connection therewith are more fully disclosed under the headings "Summary - The Proposed Business Combination," "The Business Combination" and "The Merger Agreement" in the Definitive Joint Proxy Statement and Prospectus, dated September 4, 2012 (the "Final Prospectus"), filed by the Company with the Securities and Exchange Commission ("SEC"), which disclosures are incorporated herein by reference. Capitalized terms used herein but not defined have the meanings ascribed to them in the Final Prospectus.

Upon consummation of the Merger, the common stock, par value $0.0001 per share, of the Company (the "Company's Common Stock") was listed on The NASDAQ Capital Market under the symbol "NETE." Additionally, upon consummation of the Merger, the warrants of Cazador are now quoted on the OTCBB under the symbol "NETEW." Further, in connection with Cazador's changing its jurisdiction of incorporation from the Cayman Islands to Delaware, the outstanding units of Cazador automatically separated into the underlying ordinary shares and warrants of Cazador. As a result, the Cazador units are no longer listed on The NASDAQ Capital Market.

The description of the terms of the Merger Agreement is qualified in its entirety by reference to the complete text of the Merger Agreement, which is filed as Exhibit 2.1 to this Form 8-K which is incorporated herein by reference.

Pursuant to the terms of the Merger Agreement, upon completion of the Merger, each share of then-issued and outstanding common stock of Net Element was automatically cancelled and converted into the right to receive one-fortieth (1/40) of a share of the Company's Common Stock.

On October 2, 2012, the Company issued a press release announcing that it had completed the Merger and that the Company's Common Stock began trading under new ticker symbol "NETE." A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

. . .



Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

On October 2, 2012, in connection with the consummation of the Merger, the Company notified the NASDAQ Stock Market LLC that the Merger had become effective and requested that the NASDAQ Stock Market LLC file a Notification of Removal From Listing and/or Registration under Section 12(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), on Form 25 to notify the Securities and Exchange Commission (the "SEC") that the Cazador units and warrants were to be delisted and deregistered under Section 12(b) of the Exchange Act. As a result of the Merger having become effective, the NASDAQ Stock Market LLC determined to permanently suspend trading of the Cazador units and warrants prior to the open of trading on October 3, 2012. The deregistration will become effective 10 days from the filing of the Form 25.

In accordance with Rule 12g-3(a) under the Exchange Act, the shares of the Company's Common Stock, as the successor to Cazador, are deemed to be registered under Section 12(b) of the Exchange Act. The Company's Common Stock is currently listed for trading on The NASDAQ Capital Market under the symbol "NETE." The warrants to purchase shares of Common Stock of the Company are quoted on the OTCBB under the symbol "NETEW" and deemed to be registered under Section 12(g) of the Exchange Act. Following the Closing, the CUSIP numbers relating to the Company's Common Stock and warrants changed to 64111R 102 and 64111R 110, respectively.

On the effective date of the Domestication, the outstanding units of Cazador automatically separated into the underlying Cazador Ordinary Shares and Cazador warrants. As a result, the Cazador units are no longer listed on The NASDAQ Capital Market.



Item 3.03 Material Modification to Rights of Security Holders.

Effective October 2, 2012, the Company changed its jurisdiction of incorporation from the Cayman Islands to the State of Delaware (the "Domestication"). The Company discontinued its existence as a Cayman Island exempted company as provided under Article 206 of the Companies Law (2011 Revision) of the Cayman Islands and, pursuant to Section 388 of the DGCL, continued its existence under the DGCL as a corporation incorporated in the State of Delaware.

In connection with the Domestication, each currently issued and outstanding ordinary share of Cazador ("Cazador Ordinary Shares") automatically converted by operation of law, on a one-for-one basis, into shares of the Company's Common Stock. Consequently, each holder of an outstanding Cazador Ordinary Shares immediately prior to the Domestication now holds a share of the Company's Common Stock.

Similarly, upon effectiveness of the Domestication, outstanding options, warrants and other rights to acquire Cazador Ordinary Shares automatically converted to become options, warrants or rights to acquire the corresponding shares of the Company's Common Stock. No other changes were made to the terms of any outstanding options, warrants and other rights to acquire Cazador Ordinary Shares as a result of the domestication.

It is not necessary for stockholders to exchange their existing Cazador Ordinary Share certificates for new stock certificates of the Company's Common Stock. Until surrendered and exchanged, each certificate evidencing Cazador Ordinary Shares will be deemed for all purposes of the Company to evidence the identical number of shares of the Company's Common Stock. Holders of uncertificated Cazador Ordinary Shares immediately prior to the Domestication continued as holders of uncertificated shares of the Company's Common Stock upon effectiveness of the Domestication.

The rights of holders of the Company's Common Stock are now governed by the Company Charter, its Amended and Restated Bylaws (the "Company Bylaws") and the DGCL. If you are a U.S. holder of the Company's Common Stock or warrants, you may be subject to U.S. federal income tax as a result of the Domestication unless you make a timely election on your filing with the Internal Revenue Service. In addition, if you are a non-U.S. holder of the Company's Common Stock or warrants, you may become subject to withholding tax on any dividends paid on such Common Stock subsequent to the effectiveness of the Domestication.

The sections of the Final Prospectus entitled "Description of NEI Securities," "The Business Combination - The Cazador Domestication," "Comparison of Shareholder Rights," and "Material U.S. Federal Income Tax Consequences - Material U.S. Federal Income Tax Consequences of the Cazador Domestication" are incorporated herein by reference. The Company Charter and the Company Bylaws are filed as Exhibits 3.2 and 3.3 to this Current Report on 8-K, respectively, and are hereby incorporated by reference into this Item 3.03. The description of the Company Charter and the Company Bylaws referenced above is a summary and does not purport to be a complete description of those documents and is qualified in its entirety by reference to the copies of those documents filed as exhibits hereto.



Item 5.01 Changes in Control of Registrant.

As a result of the consummation of the Merger, the former shareholders of Net Element own approximately 94.8% of the outstanding Company's Common Stock (or approximately 75.8% of the outstanding Company's Common Stock (calculated on a fully diluted basis)) and the former holders of Cazador Ordinary Shares own approximately 5.2% of the outstanding Company's Common Stock (or approximately 24.2% of the outstanding Company's Common Stock (calculated on a fully diluted basis)).

The information set forth in 2.01 above is incorporated herein by reference.



Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Effective as of the Closing, each of Carlos Valle, Shai Novik and Facundo Bacardí resigned as directors of Cazador. The Company made a payment of $100,000 to Mr. Novik in connection with his resignation.

The information set forth in Item 2.01 above and the section of the Final Prospectus entitled "Post-Merger NEI Executive Officers and Directors" is incorporated herein by reference.



Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On October 2, 2012, the Company filed with the Delaware Secretary of State a Certificate of Domestication and the Company Charter, copies of which are filed hereto as Exhibits 3.1 and 3.2 respectively and incorporated herein by reference. Additionally, upon the Closing of the Merger, the Company adopted the Company Bylaws, a copy of which is filed hereto as Exhibit 3.3 and incorporated herein by reference.

The information included in Item 3.03 above and the section of the Final Prospectus entitled "Comparison of Shareholder Rights" are incorporated herein by reference.



Item 5.07 Submission of Matters to a Vote of Security Holders.

On October 2, 2012, Cazador held a special meeting of its stockholders at which Cazador's shareholders voted on (i) the approval and adoption of the Merger Agreement, (ii) the approval of the Domestication, and (iii) if either the Merger Agreement or the Domestication were not approved, then the adjournment of the special meeting. The final voting results were as follows:

Approval of Merger Agreement



                                                                                             Broker Non-
                                        For             Against        Abstain/Withhold      Votes
Number of votes                           5,047,291        386,127                   500                   0

Percentage of shares outstanding and
entitled to vote                               87.8 %          6.7 %                   *

* Less than 1%.

Shares Electing to Exercise Redemption Rights - 2,060,895 (or 44.8% of the public ordinary shares of Cazador Acquisition Corporation Ltd.)

Approval of the Domestication



                                                                                             Broker Non-
                                        For             Against        Abstain/Withhold      Votes
Number of votes                           4,944,291        377,127               112,500                   0

Percentage of shares outstanding and
entitled to vote                               86.0 %          6.6 %                 2.0 %

* Less than 1%.



Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

The following unaudited financial statements of Net Element included herewith beginning on page F-1 of this Amendment are incorporated herein by reference:

Net Element, Inc. Unaudited Condensed Consolidated Balance Sheets as of September 30, 2012 and December 31, 2011

Net Element, Inc. Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2012 and 2011

Net Element, Inc. Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2012 and 2011

Net Element, Inc. Notes to Unaudited Condensed Consolidated Financial Statements

The following audited financial statements of Net Element are incorporated herein by reference to such statements contained in the Final Prospectus:

Report of Independent Registered Public Accounting Firm dated March 30, 2012

Consolidated Balance Sheets at December 31, 2011 and 2010

Consolidated Statements of Operations for the twelve and nine months ended December 31, 2011 and December 31, 2010, respectively

Consolidated Statement of Changes in Stockholders' Deficiency in Assets for the year ended December 31, 2011 and the nine months ended December 31, 2010

Consolidated Statements of Cash Flows for the year ended December 31, 2011 and the nine months ended December 31, 2010

Notes to Consolidated Financial Statements

(b) Pro Forma Financial Information.

The following pro forma consolidated financial statements included herewith beginning on page F-27 of this Amendment are incorporated herein by reference:

Unaudited Pro Forma Consolidated Combined Balance Sheets as of September 30, 2012

Unaudited Pro Forma Consolidated Combined Statements of Operations for the Nine Months Ended September 30, 2012

Unaudited Pro Forma Consolidated Combined Statements of Operations for the Year Ended December 31, 2011

Notes to the Unaudited Pro Forma Consolidated Combined Financial Statements

(d) Exhibits.

The following exhibits are filed herewith:

  Exhibit No.                         Description of Exhibit

      2.1         Agreement and Plan of Merger, dated as of June 12, 2012, by and
                  between Cazador Acquisition Corporation Ltd. and Net Element,
                  Inc. (incorporated by reference from Exhibit 2.1 to the Form
                  8-K filed by the Company on June 12, 2012)

      3.1         Certificate of Corporate Domestication of Cazador, filed with
                  the Secretary of State of the State of Delaware on October 2,
                  2012 (incorporated by reference from Exhibit 3.1 to the Form
                  8-K filed by the Company on October 5, 2012)

      3.2         Amended and Restated Certificate of Incorporation of Net
                  Element International, Inc., a Delaware corporation, filed with
                  the Secretary of State of the State of Delaware on October 2,
                  2012 (incorporated by reference from Exhibit 3.2 to the Form
                  8-K filed by the Company on October 5, 2012)

      3.3         Amended and Restated Bylaws of Net Element International, Inc.,
                  a Delaware corporation (incorporated by reference from Exhibit
                  3.3 to the Form 8-K filed by the Company on October 5, 2012)

      3.4         Certificate of Merger, filed with the Secretary of State of the
                  State of Delaware on October 2, 2012 (incorporated by reference
                  from Exhibit 3.4 to the Form 8-K filed by the Company on
                  October 5, 2012)

      4.1         Specimen Common Stock Certificate of Net Element International,
                  Inc. (incorporated by reference from Exhibit 4.2 to the Form
                  S-4 filed by the Company on August 31, 2012)

      4.2         Warrant Certificate of Cazador Acquisition Corporation Ltd.
                  (incorporated by reference to Cazador Acquisition Corporation
                  Ltd.'s Form F-1 (SEC File No. 333-169231) filed with the SEC on
                  September 3, 2010)

      4.3         Registration Rights Agreement by and between Cazador
                  Acquisition Corporation Ltd., Cazador Sub Holdings Ltd. and
                  Others (incorporated by reference to Cazador Acquisition
                  Corporation Ltd.'s Form F-1/A (SEC File No. 333-169231) filed
                  with the SEC on October 6, 2010)

      4.4         Warrant Agreement by and between Cazador Acquisition
                  Corporation Ltd. and Continental Stock Transfer & Trust Company
                  (incorporated by reference to Cazador Acquisition Corporation
                  Ltd.'s Form F-1/A (SEC File No. 333-169231) filed with the SEC
                  on October 6, 2010)

     10.1         Letter Agreement among Cazador Acquisition Corporation Ltd.,
                  Arco Capital Management LLC, and Cazador Sub Holdings Ltd.
                  (incorporated by reference to Cazador Acquisition Corporation
                  Ltd.'s Form F-1/A (SEC File No. 333-169231) filed with the SEC
                  on October 6, 2010)

     10.2         Letter Agreement among Cazador Acquisition Corporation Ltd. and
                  Each of the Directors and Executive Officers of Cazador
                  Acquisition Corporation Ltd. (incorporated by reference to
                  Cazador Acquisition Corporation Ltd.'s Form F-1/A (SEC File No.
                  333-169231) filed with the SEC on October 6, 2010)

     10.3         Form of Subscription Agreement between Cazador Acquisition
                  Corporation Ltd. and Cazador Sub Holdings Ltd. (incorporated by
                  reference to Cazador Acquisition Corporation Ltd.'s Form F-1
                  (SEC File No. 333-169231) filed with the SEC on September 3,
                  2010)

     10.4         Warrant Subscription Agreement between Cazador Acquisition
                  Corporation Ltd. and Cazador Sub Holdings Ltd. (incorporated by
                  reference to Cazador Acquisition Corporation Ltd.'s Form F-1/A
                  (SEC File No. 333-169231) filed with the SEC on October 6,
                  2010)

     10.5         Investment Management Trust Agreement between Cazador
                  Acquisition Corporation Ltd. and Continental Stock Transfer &
                  Trust Company (incorporated by reference to Cazador Acquisition
                  Corporation Ltd.'s Form F-1/A (SEC File No. 333-169231) filed
                  with the SEC on October 6, 2010)

     10.6         Indemnification Agreement for Cazador Acquisition Corporation
                  Ltd. (incorporated by reference to Cazador Acquisition
                  Corporation Ltd.'s Form F-1 (SEC File No. 333-169231) filed
                  with the SEC on September 3, 2010)

     10.7         Form of Security Escrow Agreement by and among Cazador
                  Acquisition Corporation Ltd., Cazador Sub Holdings Ltd., and
                  Continental Stock Transfer & Trust Company (incorporated by
                  reference to Cazador Acquisition Corporation Ltd.'s Form F-1/A
                  (SEC File No. 333-169231) filed with the SEC on October 6,
                  2010)

     10.8         Repurchase Agreement between Cazador Acquisition Corporation
                  Ltd. and Cazador Sub Holdings Ltd. (incorporated by reference
                  to Cazador Acquisition Corporation Ltd.'s Form F-1/A (SEC File
                  No. 333-169231) filed with the SEC on October 6, 2010)

     10.9         Memorandum of Understanding by and between Cazador Acquisition
                  Corporation Ltd. and Cazador Sub-Holdings Ltd. (incorporated by
                  reference to Cazador Acquisition Corporation Ltd.'s Annual
                  Report on Form 10-K for the year ended December 31, 2011, filed
                  with the SEC on March 29, 2012)

     10.10        Lease Agreement, dated October 8, 2010, between Net Element,
                  Inc. and 1450 South Miami, LLC (incorporated by reference to
                  Exhibit 10.1 to Net Element's Current Report on Form 8-K filed
                  with the SEC on March 1, 2012)

     10.11        Amendment, dated November 16, 2011, between Net Element, Inc.
                  and 1450 South Miami, LLC (incorporated by reference to Exhibit
                  10.2 to Net Element's Current Report on Form 8-K filed with the
                  SEC on March 1, 2012)

     10.12        Technology Transfer and License Agreement dated December 14,
                  2010 between Netlab Systems, LLC and Openfilm, LLC
                  (incorporated by reference to Exhibit 10.28 to Net Element's
                  Current Report on Form 8-K filed with the SEC on December 15,
                  2010)
. . .
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