8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 30, 2012

Net Element, Inc.

(Exact name of registrant as specified in its charter)

Delaware	000-51108	20-0715816
(State or other jurisdiction of incorporation)	(Commission (File Number)	(I.R.S. Employer Identification No.)

1450 S. Miami Avenue, Miami, FL	33130
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (305) 507-8808

Not Applicable

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On August 30, 2012, OOO TOT Money (which is a subsidiary of Net Element, Inc.) ("TOT Money") entered into an Agreement on transfer of rights and obligations dated July 1, 2012 (the "Assignment Agreement") with Mobile TeleSystems OJSC ("MTS") and OOO RM-Invest ("RM-Invest"). Pursuant to the Assignment Agreement, effective as of August 1, 2012, RM-Invest transferred to TOT Money all of RM-Invest’s rights and obligations under that certain Contract No. D0811373 dated July 1, 2008 (the "Mobile Carrier Agreement") between MTS and RM-Invest, and MTS agreed to the transfer. MTS is a leading telecommunications provider in Russia and the Commonwealth of Independent States. Pursuant to the Mobile Carrier Agreement, TOT Money is using its mobile commerce payment platform to facilitate payments using SMS (short message services, which is a text messaging service) and MMS (multimedia message services) for MTS mobile phone subscribers. The Mobile Carrier Agreement was amended pursuant to the Assignment Agreement to extend the initial term of the Mobile Carrier Agreement to June 14, 2017. Thereafter, the term of the Mobile Carrier Agreement will be automatically extended for additional one-year periods unless either TOT Money or MTS notifies the other party in writing of its decision to terminate the Mobile Carrier Agreement 30 days before the then-current expiration date. Either TOT Money or MTS has the right to terminate the Mobile Carrier Agreement prior to its expiration by providing advance written notice to the other party at least 30 calendar days before the proposed date of termination.

Item 8.01 Other Events.

On September 12, 2012, the Company issued a press release announcing TOT Money's partnership with MTS pursuant to which TOT Money is providing payment processing services to MTS subscribers. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by this reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release dated September 12, 2012

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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.

	NET ELEMENT, INC.
Date: September 12, 2012	By:	/s/ Jonathan New
	Name:	Jonathan New
	Title:	Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated September 12, 2012

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EX-99.1

Net Element Partners with Number One Mobile Telecom Provider in Russia and CIS

Partnership Will Focus on Driving Revenues from the Fast-Growing Russian

SMS Payments and Mobile Commerce Market

MIAMI & MOSCOW – (BUSINESS WIRE) – Net Element (OTCQB: NETE), a global technology and publishing company that operates in mobile commerce and payment processing, and also publishes popular entertainment portals and destinations, and Mobile TeleSystems OJSC (NYSE: MBT) (MTS), the leading telecommunications provider in Russia and the Commonwealth of Independent States, today announced their partnership to provide payment processing services to MTS’ 100 million-plus subscribers. The agreement, effective as of August 1, 2012, calls for MTS to allow Net Element’s mobile payment platform, TOT Money, to facilitate the payment processing for MTS subscribers. In first month of processing for MTS, TOT Money processed about 80 million rubles (approximately $2.5 million) for MTS customers.

TOT Money, which will facilitate transactions via SMS on any phone and mobile network in Russia, is expected to become a leading value-added services provider for the $1.5 billion Russian SMS payments market and the $475 million Russian mobile commerce market. The market’s growth is being driven by Russia’s booming mobile marketplace with more than 227 million active SIM cards.

“As MTS continues to expand and upgrade our infrastructure to meet a growing demand in our markets for data services, we are excited to partner with technology leaders like Net Element and TOT Money and roll out their world-class SMS payment processing services,” said Andrey A. Dubovskov, president and CEO of MTS. “This partnership will be an important part of our growth strategy that will enable us to seize the significant revenue opportunities in the mobile commerce market.”

Added Dmitry Kozko, Net Element’s executive vice president: “Our partnership with MTS, a leading telecommunications provider in Russia and CIS, will strategically position TOT Money to become the leader in Russia’s mobile commerce boom.”

About Mobile TeleSystems OJSC (MBT)

Mobile TeleSystems OJSC (NYSE: MBT) (MTS) is the leading telecommunications group in Russia and the Commonwealth of Independent States, offering mobile and fixed voice, broadband, pay TV as well as content and entertainment services in one of the world's fastest-growing regions. Including its subsidiaries, the Group services more than 100 million mobile subscribers. The Group has been awarded GSM licenses in Russia, Ukraine, Turkmenistan, Armenia and Belarus, a region that boasts a total population of more than 200 million. Since June 2000, MTS' Level 3 ADRs have been listed on the New York Stock Exchange (ticker symbol MBT). Additional information about the MTS Group may be found at www.mtsgsm.com.

About Net Element (NETE)

Net Element (OTCQB:NETE) is a global technology and publishing company that operates in mobile commerce and payment processing, as well as publishes popular Internet portals and destinations. Its international development centers and influential relationships in Russia and Commonwealth Independent States strategically position the company for growth in Russia and other emerging markets. Net Element owns and operates a mobile-commerce company, TOT Money, as well as several Internet properties that create social and business communities in the entertainment, music, motorsports and film industries. Net Element’s portfolio includes: www.TOTmoney.ru; www.Motorsport.com; www.Openfilm.com; and www.Music1.ru; www.ARLive.com and www.Yapik.com. For more information, visit www.NetElement.com.

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