UPDATE: Net Element Offers Investors Update In Light of Recent Capital Infusion: Says Primary Goal for 2H'15 is Integration of PayOnline's Value-Added TEchnologies with US Offerings

Net Element, Inc.

("Net Element" or the "Company") -- In response to shareholder inquiries regarding the recent decline in share price and a resulting price non-compliance notice received from NASDAQ, Net Element management wishes to update shareholders on its business especially in light of our recent capital infusion. The Company's primary goal in the second half of 2015 is to integrate PayOnline's value-added technologies with its US offerings and to execute on our objective to become a premier payments-as-a-service company with a centralized, omni-channel, global platform. The first half of 2015 was spent completing the financial turnaround culminating in a financing of at least $10.5 million and creating the operational infrastructure required to sustain our rapidly growing businesses. Growth initiatives The acquisition of PayOnline will be transformative for the Company not only as a profitable acquisition but for the cutting edge payments tools it provides such as its recently announced availability of an online transactional platform for iOS apps (iPhone and iPad). We have begun to deploy these technologies and have already added to the business by facilitating PayOnline's entry into Kazakhstan with contracts with the country's largest bank and second largest online merchant. In our US payments business (2014 revenues of $21 million), we've already seen results from the launch of certain US marketing initiatives announced in May, with over $2 million in sales partner financings and recent renewals of key sales partnerships. Growth of our Russia mobile payments continues with a target of 100% annual growth of Russian mobile subscribers. We crossed the threshold of 1 million recurring subscribers in January while ending May with over 1.3 million subscribers. Financial stability Profitability continues to improve with net loss reduced from $0.11 in the first quarter of 2014 to $0.04 in the first quarter of 2015. General and administrative expense were reduced from $3.1 million for the three months ended March 31, 2014 to $2.6 million for the same period in 2015; a decrease of 19%. We continue to streamline operations and improve efficiency. Over $25 million in debt has been eliminated in the past 2 years and with the addition of May's $10.5 million in growth capital, the company is able to continue its strategic plans of business expansion and improved profitability. Share price It is our belief that the current share price does not fairly represent the potential of our business and as this potential is realized through the achievement of coming milestones, it is our hope that the share price will reflect this and that we will regain compliance with NASDAQ listing requirements. We will continue communicating our developments to the investment community via press releases and current reports on Form 8-K, and encourage shareholders and potential investors to visit our website and follow our social media channels, such as Facebook and Twitter to stay informed and fully aware of new developments as they occur.