<SEC-DOCUMENT>0001171843-11-002780.txt : 20110916
<SEC-HEADER>0001171843-11-002780.hdr.sgml : 20110916
<ACCEPTANCE-DATETIME>20110916155229
ACCESSION NUMBER:		0001171843-11-002780
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20110916
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20110916
DATE AS OF CHANGE:		20110916

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NETSOL TECHNOLOGIES INC
		CENTRAL INDEX KEY:			0001039280
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-PREPACKAGED SOFTWARE [7372]
		IRS NUMBER:				954627685
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-22773
		FILM NUMBER:		111095297

	BUSINESS ADDRESS:	
		STREET 1:		23901 CALABASAS ROAD
		STREET 2:		SUITE 2072
		CITY:			CALABASAS
		STATE:			CA
		ZIP:			91302
		BUSINESS PHONE:		8182229195

	MAIL ADDRESS:	
		STREET 1:		23901 CALABASAS ROAD
		STREET 2:		SUITE 2072
		CITY:			CALABASAS
		STATE:			CA
		ZIP:			91302

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	NETSOL INTERNATIONAL INC
		DATE OF NAME CHANGE:	19990819

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MIRAGE HOLDINGS INC
		DATE OF NAME CHANGE:	19970519
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>document.htm
<DESCRIPTION>FORM 8-K FILING DOCUMENT
<TEXT>
<!DOCTYPE html
	PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN"
	"http://www.w3.org/TR/html4/loose.dtd">

<html lang="en-US">

	<head>
		<title>Form 8-K Filing</title>
	</head>

	<body>
		<p align="center"><font size="5"><b>UNITED STATES<br>
					SECURITIES AND EXCHANGE COMMISSION<br>
				</b></font></p>
		<p align="center"><font size="3"><b>Washington, D.C. 20549</b><br>
			</font></p>
		<hr noshade="1" width="150" align="center">
		<p align="center"><font size="5"><b>FORM 8-K</b><br>
			</font></p>
		<hr noshade="1" width="150" align="center">
		<p align="center"><font size="3"><b>CURRENT REPORT</b><br>
			</font></p>
		<p align="center"><font size="3"><b>Pursuant to Section&nbsp;13 or 15(d) of<br>
					The Securities Exchange Act of 1934</b><br>
			</font></p>
		<p align="center"><font size="3">Date of Report (Date of earliest event reported) <b>September 16, 2011</b>&nbsp; <br>
			</font></p>
		<hr noshade="1" width="150" align="center">
		<p align="center"><font size="5"><b>NetSol Technologies Inc.</b></font><br>
			<font size="2">(Exact name of registrant as specified in its charter) </font></p>
		<!-- Registrant's State of Inc, File and IRS Number -->
		<table cellpadding="0" border="0" width="100%" cellspacing="0">
			<tr valign="top">
				<td width="33%" align="center"><br>
					<font size="2"><b>Nevada</b></font></td>
				<td width="34%" align="center"><br>
					<font size="2"><b>000-22773</b></font></td>
				<td width="33%" align="center"><br>
					<font size="2"><b>95-4627685</b></font></td>
			</tr>
			<tr valign="top">
				<td width="33%" align="center"><font size="2">(State or other jurisdiction<br>
						of incorporation) </font></td>
				<td width="34%" align="center"><font size="2">(Commission File Number) </font></td>
				<td width="33%" align="center"><font size="2">(IRS Employer Identification No.) </font></td>
			</tr>
		</table>
		<!-- Registrant's Postal Addess and Zip Code --><br>
		<br>
		<table cellpadding="0" border="0" width="100%" cellspacing="0">
			<tr valign="top">
				<td width="50%" align="center"><br>
					<font size="2"><b>23901 Calabasas Road, Suite 2072, Calabasas, CA</b></font></td>
				<td width="50%" align="center"><br>
					<font size="2"><b>91302</b></font></td>
			</tr>
			<tr valign="top">
				<td width="50%" align="center"><font size="2">(Address of principal executive offices) </font></td>
				<td width="50%" align="center"><font size="2">(Zip Code) </font></td>
			</tr>
		</table>
		<p align="center"><font size="2">Registrant's telephone number, including area code: &nbsp; <b>(818) 222-9195 / (818) 222-9197</b></font></p>
		<p align="center"><font size="2"><br>
			<br>
			________________________________________________________________________________<br>
			(Former name or former address, if changed since last report)</font></p>
		<!-- Simultaneous filing obligation checkboxes --><br>
		<br>
		<table cellpadding="0" border="0" width="100%" cellspacing="0">
			<tr valign="top">
				<td colspan="3"><font size="2">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:</font></td>
			</tr>
			<tr valign="top">
				<td>&nbsp; &nbsp;</td>
				<td nowrap="1"><font size="2">[ &nbsp;&nbsp;]</font></td>
				<td><font size="2">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) </font></td>
			</tr>
			<tr valign="top">
				<td>&nbsp; &nbsp;</td>
				<td nowrap="1"><font size="2">[ &nbsp;&nbsp;]</font></td>
				<td><font size="2">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) </font></td>
			</tr>
			<tr valign="top">
				<td>&nbsp; &nbsp;</td>
				<td nowrap="1"><font size="2">[ &nbsp;&nbsp;]</font></td>
				<td><font size="2">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) </font></td>
			</tr>
			<tr valign="top">
				<td>&nbsp; &nbsp;</td>
				<td nowrap="1"><font size="2">[ &nbsp;&nbsp;]</font></td>
				<td><font size="2">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) </font></td>
			</tr>
		</table>
		<hr noshade="1">

		<p><font size="3"><b>Item 2.02. Results of Operations and Financial Condition.</b></font></p>
		<p><font size="2"><p>On September 16, 2011, NetSol Technologies, Inc. issued a press release announcing results of operations and financial conditions for the year ended June 30, 2011.  The press release is furnished as Exhibit 99.1 to this Form 8-K. </p>
<p>The information in this report shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document field under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.</p></font></p>

		<p><font size="3"><b>Item 9.01. Financial Statements and Exhibits.</b></font></p>
		<p><font size="2"><p><b>Exhibits</b></p>
99.1 News Release dated September 16, 2011</font></p>
		<hr noshade="1">
		<!-- Registrant's Signature -->
		<p align="center"><font size="3"><b>SIGNATURE</b> </font></p>
		<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. </font></p>
		<table cellpadding="0" border="0" width="100%" cellspacing="0">
			<tr valign="top">
				<td width="47%">&nbsp;</td>
				<td width="5%">&nbsp;</td>
				<td width="47%" align="center"><font size="2"><b>NetSol Technologies Inc.</b></font>
					<hr noshade="1">
					<font size="2">(Registrant)<br>
						<br>
					</font></td>
			</tr>
			<tr valign="top">
				<td width="47%" align="center"><font size="2"><b>September 16, 2011</b></font>
					<hr noshade="1">
					<font size="2">(Date) </font></td>
				<td width="5%">&nbsp;</td>
				<td width="47%" align="center"><font size="2"><b>/s/ &nbsp; NAJEEB GHAURI</b></font>
					<hr noshade="1">
					<font size="2">Najeeb Ghauri</font><br>
					<font size="2"><i>Chief Executive Officer</i></font><br>
					<br>
				</td>
			</tr>
			<tr valign="top">
				<td width="47%" align="center"><font size="2"><b>September 16, 2011</b></font>
					<hr noshade="1">
					<font size="2">(Date) </font></td>
				<td width="5%">&nbsp;</td>
				<td width="47%" align="center"><font size="2"><b>/s/ &nbsp;BOO-ALI SIDDIQUI</b><!--NAJEEB GHAURI--></font>
					<hr noshade="1">
					<font size="2">Boo-Ali Siddiqui<!--Najeeb Ghauri--></font><br>
					<font size="2"><i>Chief Financial Officer<!--Chief Executive Officer--></i></font></td>
			</tr>
		</table>

	</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>newsrelease.htm
<DESCRIPTION>PRESS RELEASE
<TEXT>
<html><head><title>NetSol Technologies Reports Fiscal 2011 Fourth-Quarter and Full-Year Financial Results</title></head><body><p align="right">EXHIBIT 99.1</p><h3 align="center">NetSol Technologies Reports Fiscal 2011 Fourth-Quarter and Full-Year Financial Results</h3><p align="center">
	<strong>--</strong><i>Fiscal 2011 Full-Year Net Income Rises to $5.7 Million, or $0.12 Per Diluted Share</i><strong>--<br>
	<br>
	</strong><strong>--</strong><i>Company Expects to Maintain Profitability in Fiscal 2012</i><strong>--</strong></p><p>
	CALABASAS, Calif., Sept. 16, 2011 (GLOBE NEWSWIRE) -- NetSol Technologies, Inc. (Nasdaq:NTWK), a worldwide provider of global IT and enterprise application solutions, today reported financial results for its fiscal 2011 fourth quarter and full year ended June 30, 2011. The company said that full-year revenues are modestly better than the company's fiscal 2011 preview announced in July, while full-year net income is in line with revised guidance.</p><p>
	<strong>Recent highlights:</strong></p><ul type="disc">
	<li>
		Established new e-commerce division, Vroozi Inc., to focus on the sales and marketing of smartOCI and build on the momentum of recent agreements with Fortune 500 companies;</li>
	<li>
		Formalized joint venture agreement with Brasilinvest to deploy NetSol's Financial Suite (NFS)&#8482; solution for the asset and auto finance and leasing markets in Brazil;</li>
	<li>
		Signed agreement valued at more than $2 million to implement the entire NFS&#8482; solution, including its Wholesale and Retail platforms, with a major auto manufacturer's captive finance arm in India;</li>
	<li>
		Signed agreement to implement the complete back-office retail module of NFS&#8482; platform for a major auto captive finance company based in Tokyo, Japan;</li>
	<li>
		Signed $4-million agreement to implement the financial suite solution for a China-based customer; and</li>
	<li>
		Signed contract to provide IT consulting services to a major software company in Saudi Arabia through NetSol's Saudi Arabia joint venture partner.</li>
</ul><p>
	<strong>Fiscal 2011 Fourth-Quarter Financial Results <br>
	<br>
	</strong>Total revenue was $6.9 million for the fourth quarter of fiscal 2011, compared with $10.7 million for the same period last year. The decrease in revenue is primarily attributable to an unexpected delay in two license agreements.</p><p>
	License revenue totaled $1.0 million for the fiscal 2011 fourth quarter, versus $4.6 million for the fiscal 2010 fourth quarter.&#160;Maintenance revenue increased to $1.9 million, from $1.7 million in the prior year period. Services revenue was $4.0 million, versus $4.3 million for the fourth quarter of fiscal 2010.</p><p>
	"While results for the quarter were impacted by a delay in license agreements, we are beginning to see some of those orders come to fruition," said Najeeb Ghauri, chairman and CEO of NetSol. "As we move forward, we are focused on driving the global growth of NFS and further building upon the momentum for smartOCI, which has already gained traction among several Fortune 500 companies. To capture the market opportunity for smartOCI, we recently formed a new division called Vroozi that has a dedicated sales and delivery channel to develop next generation e-commerce and search engine technologies."</p><p>
	Operating expenses for the fiscal 2011 fourth quarter were $3.4 million, compared with $3.1 million for the fiscal 2010 fourth quarter.&#160;</p><p>
	Operating loss for the fourth quarter of 2011 was $564,000, compared with operating income of $4.4 million in the fourth quarter of fiscal 2010.</p><p>
	Net loss for the fiscal fourth quarter was $1.1 million, or $0.02 per share, compared with net income of $1.5 million, or $0.04 per diluted share, in the fourth quarter of fiscal 2010.</p><p>
	<strong>Fiscal 2011 Full-Year Financial Results</strong></p><p>
	Total revenue for fiscal 2011 totaled $36.5 million, compared with $36.8 million for the fiscal year 2010.</p><p>
	License revenue totaled $11.3 million for fiscal 2011, versus $14.2 million for fiscal 2010.&#160;Maintenance revenue was up to $7.5 million, from $7.0 million in the same period a year ago. Services revenue was $17.8 million, compared with $15.6 million for fiscal 2010.</p><p>
	"Results for the year were solid, and we are confident in our prospects for the future, as new initiatives take hold in Asia-Pacific, Europe, Brazil and North America," Ghauri said.&#160;"We remain committed to managing resources and adjusting our strategy accordingly to improve financial performance, as well as to continue to provide NetSol customers with high-quality and innovative software solutions."</p><p>
	Fiscal 2011 operating expenses were $11.6 million, compared with $13.2 million for fiscal 2010, primarily due to a reduction in general and administrative expenses and lease abandonment charges.&#160;</p><p>
	Operating income for fiscal 2011 was $10.2 million, compared with $9.7 million for fiscal 2010.</p><p>
	Fiscal 2011 net income was $5.7 million, or $0.12 per diluted share, up from $1.4 million or $0.04 per diluted share for fiscal 2010.&#160;</p><p>
	At June 30, 2011 cash, cash equivalents and marketable securities balance (including restricted cash) amounted to $9.9 million. Total number of shares outstanding as of June 30, 2011 was 55.5 million.</p><p>
	<strong>Financial Outlook</strong></p><p>
	Looking forward, NetSol expects some variability in revenue for fiscal 2012, but anticipates maintaining profitability for the full year.&#160;</p><p>
	<strong>Conference Call and Webcast Information</strong></p><p>
	NetSol will host a conference call today, at 11 a.m. EDT to review its financial results.&#160;To participate in the conference call, please dial <strong>(877) 941-8609 </strong>(domestic) or<strong> (</strong><strong>480) 629-9818 </strong>(international), password: <strong>4469439. </strong>The call is also available through a live, listen-only audio webcast at www.netsoltech.com in the investor relations section. For those who are unable to listen to the live webcast, the call will be archived for 90 days.</p><p>
	Additionally, a telephone playback of the conference call will also be available until 11:59 p.m. EDT, Friday, September 23, 2011.&#160;Listeners should call <strong>(</strong><strong>800) 406-7325</strong> (domestic) or <strong>(</strong><strong>303) 590-3030 </strong>(international) and use reservation: <strong>4469439 </strong>to access the call.</p><p>
	<strong>About NetSol Technologies</strong></p><p>
	NetSol Technologies, Inc. (www.netsoltech.com) is a worldwide provider of global IT and enterprise application solutions that include credit and finance portfolio management systems, SAP consulting and services, custom development, systems integration, and technical services for the global Financial, Leasing, Insurance, Energy, and Technology markets.&#160;Headquartered in Calabasas, Calif., NetSol's product and services offerings have achieved ISO 9001, ISO 20000, ISO 27001, and SEI (Software Engineering Institute) CMMI (Capability Maturity Model) Maturity Level 5 assessments, a distinction shared by only 178 companies worldwide. The company's clients include Fortune 500 manufacturers, global automakers, financial institutions, utilities, technology providers, and government agencies.&#160;Netsol has delivery and support locations in San Francisco, London, Beijing, Bangkok, Lahore, Adelaide and Riyadh.</p><p>
	Investors can receive news releases and invitations to special events by accessing our online signup form at http://bit.ly/NetSol_Investor_Signup_Form.</p><p>
	The NetSol Technologies, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=9832</p><p>
	<strong>Forward-Looking Statements </strong></p><p>
	<i>This press release may contain forward-looking statements relating to the development of the Company's products and services and future operation results, including statements regarding the Company that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words "expects," "anticipates," variations of such words, and similar expressions, identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, but their absence does not mean that the statement is not forward-looking. These statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict. Factors that could affect the Company's actual results include the progress and costs of the development of products and services and the timing of the market acceptance. The subject Companies expressly disclaim any obligation or undertaking to update or revise any forward-looking statement contained herein to reflect any change in the company's expectations with regard thereto or any change in events, conditions or circumstances upon which any statement is based.</i></p><p style="text-align: center">
	(Tables Follow)</p><table cellpadding="0" cellspacing="6" style=" border-collapse: separate; border-spacing: 6px ">

		<tr>
			<td colspan="3" style="font: 12px Arial; text-align: center">
				<strong>NetSol Technologies, Inc. and Subsidiaries</strong></td>
		</tr>
		<tr>
			<td colspan="3" style="font: 12px Arial; text-align: center">
				<strong>Consolidated Balance Sheets</strong></td>
		</tr>
		<tr>
			<td colspan="3" style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; text-align: center">
				<strong>ASSETS</strong></td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				As of June 30,<br>
				&#160;2011</td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				As of June 30,<br>
				&#160;2010</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Current assets:</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Cash and cash equivalents</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				$&#160;4,172,802</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				$&#160;4,075,546</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Restricted Cash</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;5,700,000</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;5,700,000</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Accounts receivable, net</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;15,062,503</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;12,280,331</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Revenues in excess of billings</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;7,601,230</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;9,477,278</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Other current assets</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;2,053,904</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;1,821,661</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 20.0px;">
				Total current assets</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;34,590,439</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;33,354,816</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Investment under equity method</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;--</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;200,506</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Property and equipment</strong>, net</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;16,014,461</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;9,472,917</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Intangibles:</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Product licenses, renewals, enhancements, copyrights, trademarks, and tradenames, net</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;25,437,479</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;19,002,081</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Customer lists, net</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;164,715</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;666,575</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Goodwill</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;9,439,285</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;9,439,285</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 20.0px;">
				Total intangibles</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;35,041,480</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;29,107,941</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 20.0px;">
				<strong>Total assets</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				$&#160;85,646,380</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				$&#160;72,136,180</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; text-align: center">
				<strong>LIABILITIES AND STOCKHOLDERS' EQUITY</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Current liabilities:</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Accounts payable and accrued expenses</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				$&#160;4,730,027</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				$&#160;4,937,987</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Due to officers</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;--</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;10,911</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Current portion of loans and obligations under capitalized leases</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;7,062,535</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;7,285,773</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Other payables - acquisitions</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;103,226</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;103,226</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Unearned revenues</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;2,653,460</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;2,545,314</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Convertible notes payable, current portion</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;2,745,524</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;3,017,096</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Loans payable, bank</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;2,319,378</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;2,327,476</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Common stock to be issued</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;400,700</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;239,525</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 20.0px;">
				Total current liabilities</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;20,014,850</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;20,467,308</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Obligations under capitalized leases, </strong>less current maturities</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;285,472</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;204,620</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Convertible notes payable less current maturities</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;--</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;4,066,109</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Long term loans; </strong>less current maturities</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;434,884</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;727,336</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Lease abandonment liability; long term</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;--</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;867,583</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 20.0px;">
				<strong>Total liabilities</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;20,735,206</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;26,332,956</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Commitments and contingencies</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Stockholders' equity:</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Common stock, $.001 par value; 95,000,000 shares authorized; 55,531,855 &amp; 37,103,396 issued and outstanding as of June 30, 2011 and 2010</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;55,532</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;37,104</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Additional paid-in-capital</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;97,886,492</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;86,002,648</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Treasury stock</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;(396,008)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;(396,008)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Accumulated deficit</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;(34,130,944)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;(39,859,030)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Stock subscription receivable</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;(2,198,460)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;(2,007,960)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Other comprehensive loss</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;(8,805,922)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;(8,396,086)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 20.0px;">
				Total NetSol shareholders' equity</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;52,410,690</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;35,380,668</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Non-controlling interest</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;12,500,484</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;10,422,557</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 20.0px;">
				<strong>Total stockholders' equity</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;64,911,174</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;45,803,224</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 20.0px;">
				<strong>Total liabilities and stockholders' equity</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				$&#160;85,646,380</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				$&#160;72,136,180</td>
		</tr>

</table><table cellpadding="0" cellspacing="6" style=" border-collapse: separate; border-spacing: 6px ">

		<tr>
			<td colspan="3" style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td colspan="3" style="font: 12px Arial; text-align: center">
				&#160;</td>
		</tr>
		<tr>
			<td colspan="3" style="font: 12px Arial; text-align: center">
				<strong>NetSol Technologies, Inc. and Subsidiaries</strong></td>
		</tr>
		<tr>
			<td colspan="3" style="font: 12px Arial; text-align: center">
				<strong>Consolidated Statement of Operations</strong></td>
		</tr>
		<tr>
			<td colspan="3" style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td colspan="2" style="font: 12px Arial; text-align: center">
				For the Year Ended June 30,</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				2011</td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				2010</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Net Revenues:</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				License fees</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;$&#160;11,284,472</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;$&#160;14,157,107</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Maintenance fees</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;7,488,387</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;7,047,936</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Services</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;17,774,715</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;15,574,853</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 20.0px;">
				Total revenues</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;36,547,575</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;36,779,897</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Cost of revenues:</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 15.0px;">
				Salaries and consultants</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;8,716,495</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;8,164,147</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 15.0px;">
				Travel</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;1,044,767</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;843,626</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 15.0px;">
				Repairs and maintenance</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;307,115</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;256,997</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 15.0px;">
				Insurance</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;126,584</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;140,496</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 15.0px;">
				Depreciation and amortization</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;3,108,286</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;2,298,092</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 15.0px;">
				Other</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;1,500,880</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;2,163,689</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 20.0px;">
				Total cost of revenues</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;14,804,127</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;13,867,048</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Gross profit</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;21,743,448</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;22,912,849</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Operating expenses:</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Selling and marketing</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;3,016,402</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;2,222,841</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Depreciation and amortization</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;1,180,226</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;1,609,854</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Bad debt expense</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;367,064</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;442,804</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Salaries and wages</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;3,347,896</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;3,026,275</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Professional services, including non-cash compensation</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;806,212</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;900,125</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Lease abandonment charges</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;(858,969)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;867,583</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				General and administrative</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;3,719,797</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;4,115,658</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 20.0px;">
				Total operating expenses</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;11,578,627</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;13,185,141</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Income from operations</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;10,164,821</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;9,727,709</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Other income and (expenses)</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Loss on sale of assets</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;(21,461)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;(224,741)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Interest expense</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;(863,707)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;(1,478,474)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Interest income</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;154,856</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;261,296</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Gain (loss) on foreign currency exchange transactions</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;1,115,647</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;(66,919)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Share of net loss from equity investment</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;(220,506)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;(67,494)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Beneficial conversion feature</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;(453,989)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;(1,867,787)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Other (expense) income</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;(52,149)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;56,571</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 20.0px;">
				Total other income (expenses)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;(341,309)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;(3,387,548)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Net income before&#160;income taxes</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;9,823,512</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;6,340,160</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Income taxes</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;(120,542)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;(53,943)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Net income after tax</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;9,702,970</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;6,286,217</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				<strong>Non-controlling interest</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;(3,974,882)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;(4,892,097)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Net income attributable to NetSol</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;5,728,087</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;1,394,120</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Other comprehensive loss:</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Translation adjustment</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;(525,907)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;(1,874,242)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Comprehensive income (loss)</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				5,202,180</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;(480,122)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Comprehensive loss attributable to non-controlling interest</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;(116,070)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				&#160;(579,849)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Comprehensive income attributable to NetSol</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				&#160;$&#160;5,318,251</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				&#160;$&#160;99,727</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Net income (loss) per share:</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Basic</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				&#160;$&#160;0.12</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				&#160;$&#160;0.04</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Diluted</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				&#160;$&#160;0.12</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				&#160;$&#160;0.04</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				Weighted average number of shares outstanding</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Basic</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				&#160;48,543,200</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				&#160;34,516,428</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Diluted</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				&#160;49,568,190</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				&#160;37,796,745</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Amounts attributable to NetSol common shareholders</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Net income</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				&#160;$&#160;5,728,087</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				&#160;$&#160;1,394,120</td>
		</tr>

</table><table cellpadding="0" cellspacing="6" style=" border-collapse: separate; border-spacing: 6px ">

		<tr>
			<td colspan="3" style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td colspan="3" style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td colspan="3" style="font: 12px Arial; text-align: center">
				<strong>NetSol Technologies, Inc. and Subsidiaries</strong></td>
		</tr>
		<tr>
			<td colspan="3" style="font: 12px Arial; text-align: center">
				<strong>Statement of Cash Flows</strong></td>
		</tr>
		<tr>
			<td colspan="3" style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td colspan="2" style="font: 12px Arial; text-align: center">
				&#160;For the Year Ended June 30,&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				2011</td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				2010</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;Cash flows from operating activities:&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Net income&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				$ 9,702,970</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				$ 6,286,217</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Adjustments to reconcile net income&#160;to net cash provided by operating activities:&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Depreciation and amortization&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				4,288,512</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				3,907,945</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Provision for bad debts&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				367,064</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				442,804</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Loss on foreign currency exchange transaction&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;--&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				4,144</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Share of net loss from investment under equity method&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				220,506</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				67,494</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Loss on sale of assets&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				21,462</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				224,741</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;(Gain) on settlement of lease abandonment provision&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(858,969)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				867,583</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Stock issued for interest on notes payable&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				191,808</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				39,960</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Stock issued for services&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				886,218</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				801,684</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Fair market value of warrants and stock options granted&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				459,174</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				803,508</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Beneficial conversion feature&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				453,989</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				1,867,787</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				<strong>&#160;Changes in operating assets and liabilities:&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 20.0px;">
				&#160;Increase/ decrease in accounts receivable&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(3,422,252)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(1,316,995)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 20.0px;">
				&#160;Increase/ decrease in other current assets&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				1,987,996</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(3,701,022)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 20.0px;">
				&#160;Increase/ decrease in accounts payable and accrued expenses&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				(376,287)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				(1,626,140)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				<strong>&#160;Net cash provided by operating activities&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				13,922,189</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				8,669,710</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;Cash flows from investing activities:&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Purchases of property and equipment&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(9,085,148)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(2,986,495)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Sales of property and equipment&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				313,935</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				641,484</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Purchase of non-controlling interest in subsidiary&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(671,460)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;--&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Short-term investments held for sale&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(256,522)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;--&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Investment under equity method&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;--&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(268,000)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Increase in intangible assets&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				(8,096,401)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				(7,603,779)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				<strong>&#160;Net cash used in investing activities&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(17,795,596)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(10,216,790)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;Cash flows from financing activities:&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Proceeds from sale of common stock&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				4,099,250</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				854,509</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Proceeds from the exercise of stock options and warrants&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				1,615,050</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				71,250</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Proceeds from convertible notes payable&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;--&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				3,500,000</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Redemption of preferred stock&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;--&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(1,920,000)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Restricted cash&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;--&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(700,000)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Dividend Paid&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(1,291,313)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(43,828)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Bank overdraft&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				39,026</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(7,008)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Proceeds from bank loans&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				2,969,146</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				4,540,971</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Payments on bank loans&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(46,033)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(258,358)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				&#160;Payments on capital lease obligations &amp; loans - net&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				(3,118,344)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				(4,328,700)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				<strong>&#160;Net cash provided by financing activities&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				4,266,782</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				1,708,837</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;Effect of exchange rate changes in cash&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				(296,116)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				(489,973)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;Net increase in cash and cash equivalents&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				97,259</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(328,216)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;Cash and cash equivalents, beginning of year&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				4,075,546</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				4,403,762</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;Cash and cash equivalents, end of year&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				$ 4,172,802</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				$ 4,075,546</td>
		</tr>

</table><pre>CONTACT: PondelWilkinson Inc.
         Evan Pondel (310) 279-5973
         investors@netsoltech.com</pre></body></html>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
