Ownership Submission
FORM 5
Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
Form 3 Holdings Reported
Form 4 Transactions Reported
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

ANNUAL STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940
OMB APPROVAL
OMB Number: 3235-0362
Expires: January 31, 2005
Estimated average burden hours per response... 1.0

1. Name and Address of Reporting Person *
Lappenbusch Richard William
 2. Issuer Name and Ticker or Trading Symbol
Net Element, Inc. [NETE] 		5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
_____ Director _____ 10% Owner
__X__ Officer (give title below) _____ Other (specify below)
President, COO
(Last)
(First)
(Middle)

1450 SOUTH MIAMI AVENUE		 3. Statement for Issuer's Fiscal Year Ended (Month/Day/Year)
12/31/2011
(Street)


MIAMI, FL 33130		 4. If Amendment, Date Original Filed(Month/Day/Year)
 6. Individual or Joint/Group Reporting
(check applicable line)

_X_ Form Filed by One Reporting Person
___ Form Filed by More than One Reporting Person
(City)
(State)
(Zip)
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security
(Instr. 3)		 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code
(Instr. 8)		 4. Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4 and 5)		 5. Amount of Securities Beneficially Owned at end of Issuer's Fiscal Year
(Instr. 3 and 4)		 6. Ownership Form: Direct (D) or Indirect (I)
(Instr. 4)		 7. Nature of Indirect Beneficial Ownership
(Instr. 4)
Amount (A) or (D) Price

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly. Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. SEC 2270 (9-02)

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security
(Instr. 3)		 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code
(Instr. 8)		 5. Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4, and 5)		 6. Date Exercisable and Expiration Date
(Month/Day/Year)		 7. Title and Amount of Underlying Securities
(Instr. 3 and 4)		 8. Price of Derivative Security
(Instr. 5)		 9. Number of Derivative Securities Beneficially Owned at End of Issuer's Fiscal Year
(Instr. 4)		 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)		 11. Nature of Indirect Beneficial Ownership
(Instr. 4)
(A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Stock Option (Right to Buy) $ 0.06 07/31/2011   A4 125,000   07/31/2011 07/31/2016 Common Stock
125,000
$ 0 (1) 125,000
D
 
Stock Option (Right to Buy) $ 0.37 08/31/2011   A4 13,514   08/31/2011 08/31/2016 Common Stock
13,514
$ 0 (1) 13,514
D
 
Stock Option (Right to Buy) $ 0.15 09/30/2011   A4 100,000   09/30/2011 09/30/2016 Common Stock
100,000
$ 0 (1) 100,000
D
 
Stock Option (Right to Buy) $ 0.15 10/31/2011   A4 100,000   10/31/2011 10/31/2016 Common Stock
100,000
$ 0 (1) 100,000
D
 
Stock Option (Right to Buy) $ 0.21 11/30/2011   A4 71,429   11/30/2011 11/30/2016 Common Stock
71,429
$ 0 (1) 71,429
D
 
Stock Option (Right to Buy) $ 0.6 12/31/2011   A4 25,000   12/31/2011 12/31/2016 Common Stock
25,000
$ 0 (1) 25,000
D
 

Reporting Owners

Reporting Owner Name / Address Relationships
Director 10% Owner Officer Other
Lappenbusch Richard William
1450 SOUTH MIAMI AVENUE
MIAMI, FL 33130		       President, COO  

Signatures

/s/ Richard William Lappenbusch 05/03/2012
**Signature of Reporting Person Date

Explanation of Responses:

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1) These stock options were issued to the reporting person in connection with company-wide salary reductions, as consideration for his services to the issuer.

Note: File three copies of this Form, one of which must be manually signed. If space provided is insufficient, see Instruction 6 for procedure.

Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB number.