NetSol Technologies, Inc.

(NasdaqCM: NTWK, Nasdaq Dubai: NTWK)

TM
TM
november 19, 2010 | TARGET PRICE: $4.00 | RATING: STRONG BUY
Discovering Tomorrow’s Blue Chips Today TM

Visibility increase in worldwide demand drives 1qfy11 growth

Research Update 1QFY11 was another strong quarter for NTWK. Its $0.04 EPS equaled 4QFY10
results, despite 1QFY11 being, historically, the Company’s weakest quarter.
Though revenues of $8.4 million came in significantly below our $9.2 million
Analyst estimate, EPS surpassed our estimate of $0.03. Revenue growth from 1QFY10
Bill Matson, CFA
was 10.2%, and gross margin rose to 62.1% from 53.3%, buoyed by a 36.3%
Market data increase in license fees.
TICKER ntwk 1stQuarterSummary
FISCAL YEAR june 1QFY11 1QFY11 Diff.vs
application Actual YOY RedChip RedChip
SEctor
software Results Change estimates estimates
RECENT PRICE $1.42 Revenue 8.4 10.2% 9.5 Ͳ11.1%
TARGET PRICE $4.00 GrossProfit 5.2 28.5% 5.7 Ͳ8.0%
MARKET CAP $69.5M GrossMargin 62.1% 884bps 60.1% 210bps
52-WEEK HIGH - Low $2.11 - $0.70 OperatingIncome 2.0 76.7% 2.8 Ͳ27.0%
PRICE/EARNINGS (ttm) 17.9x OperatingMargin 24.1% 907bps 29.4% Ͳ525bps
PRICE/BOOK (MRQ) 1.5x NetIncome 1.6 N/A 1.4 9.1%
PRICE/SALES (TTM) 1.5x NetMargin 18.6% N/A 15.2% 345bps
SHAREs OUTSTANDING 49.0M EPS 0.04 N/A 0.04 2.5%
FLOAT 37.5M inUS$millions,exceptpercentage,andEPSdata
Avg DAILY VOLUME (3 mos) 1,121,090
INsider OWNERSHIP 23.4%
As of November 18, 2010
Unrestricted cash and cash equivalents dropped from $4.1 million to $2.2
million during the quarter, as cash flow was negatively impacted by increases
in net receivables and revenues in excess of billings of $3.5 million and $1.2
Financial Data million, respectively. We do not believe, however, that this is cause for concern,
Revenue (TTM) $37.6M
given the Company’s favorable historical bad debt experience and the rock
Rev (ttm)per share $0.92
Qrtly Rev Grwth Yoy 10.2%
solid creditworthiness of its customer base.
Gross profit (TTM) $24.1M BalanceSheetandLiquiditySummary
OPERATING MARGIN (TTM) 28.2% 1QFY11 1QFY10
ebitda $14.4M Cash 2.2 4.0
net income (ttm) $3.2M AccountsReceivableTurnover 2.6 1.9
diluted EPS (TTM) $0.08 WorkingCapital 12.6 12.5
qrtly eps grwth (yoy) N/A ShortͲtermdebt 13.7 9.2
cash & equiv (Mrq) $2.2M LongͲtermdebt 1.8 7.8
cash (MRQ) per share $0.05 Cashfromoperations(ttm) 7.9 4.0
total debt/equity 64.1% Cashfromfinancing(ttm) 2.0 (1.0)
BOOK VALUE per share $0.93 Capex(ttm) 3.6 1.3
ROE (ttm) 9.0% FreeCashFlow(ttm) 4.3 2.7
ROA (ttm) 4.6% inUS$millions
*Cashdoesnotincluderestrictedcash

© RedChip Visibility, a division of RedChip Companies, Inc. | 500 Winderley Place, Suite 100, Maitland, FL 32751 | 1-800-RED-CHIP | www.RedChip.com
For analyst rating definitions, research coverage universe and other disclosures, please refer to page 9 of this report or write to research@redchip.com
 NetSol Technologies, Inc. (NasdaqCM: NTWK)
Research Update

recent developments

NetSol continues to add clients in Asia. NetSol’s new business development efforts have produced solid
results during 1QFY11 and early 2QFY11, and much of the benefit from its recently acquired contracts
will be reflected in future quarters. Of particular interest is the Company’s new business in Asia. A contract
signed in 1QFY11 with a major U.S. auto maker in China gave NTWK over a 90% IT market share in the
Chinese captive auto finance sector. In addition, a major captive auto finance company expanded its service
relationship with NTWK in nine countries, while purchasing the complete NetSol Financial Suite (NFSTM)
suite for Japan, Korea, and India at a price of $1.5-$2 million for each of these three licenses.

NetSol’s NFS was also successfully implemented by Minsheng Financial Leasing. This represented NTWK’s
initial penetration of the Chinese financial leasing sector, which enjoyed 138.7% growth in 2009.

On 11/16/10, NTWK announced that it had signed an agreement worth over $2 million to implement its
entire (NFS™) solution, including its wholesale and retail platforms, with the captive finance arm of a
major auto manufacturer in China.

The client company is a planned joint venture between a leading Chinese auto manufacturer and a major
European bank. NetSol expects to begin implementing its NFS™ solution for the client in early December
2010.

This agreement was of particular significance because it:

• Improved financial clarity for the second quarter of fiscal 2011,

• Added to NTWK’s sales backlog for the rest of the fiscal year,

• Reinforced the Company’s dominance of the market for software solutions and services within China’s
finance and leasing segments, and

• Provides another potential reference point for attracting future high-profile clients, further establishing
the maturity of NFS™ within the Chinese market.

NTWK’s solid foothold in China leaves it well positioned to piggyback on the future growth of that nation’s
economy. Existing Chinese clients are requesting NFS platform enhancements in record numbers due to
a growing need to perform complex transactions. To capitalize on this opportunity, a new subsidiary will
be created in China by early calendar 2011, which will accelerate local hiring to meet increasing sales,
marketing, and support requirements.

The Company also showed strength outside Asia, winning a LeaseSoft license upgrade deal with Singers
Healthcare Finance Ltd. Singers is a leading UK provider of leasing solutions to the healthcare industry.
North American users of NTWK’s LeasePak lease management solution significantly increased their
purchases of enhancements such as software upgrades and additional services.

RedChip Visibility |  | NetSol Technologies, Inc.

 NetSol Technologies, Inc. (NasdaqCM: NTWK)
Research Update
SmartOCI currently in beta testing. NetSol launched smartOCI, an SAP-compatible multiple catalog
search engine, during 4Q10. This product provides corporate buyers using SAP SRM with a simple,
intuitive interface capable of searching multiple catalogs simultaneously. At present, smartOCI is in
beta testing mode with over 20 customers, primarily Fortune 500 businesses. Due to the complexity of
enterprise software systems, the sales cycle for this product is quite lengthy. However, at least two sales
are expected in Q2, with many more closing in Q3 and thereafter. The approximately 1000 users of the
SAP SRM module constitute the potential market for smartOCI. These tend to be very large businesses,
and sales of smartOCI to these businesses may well prove to be a door opener for NTWK with respect to
future sales of its other products and services.

Pakistan government projects put on hold due to floods. Though NTWK’s Pakistani personnel and
facilities were unharmed by the recent floods, megaprojects such as the digitization of Pakistan’s military
records and development of its Land Records Management Information System (LRMIS) have been
postponed indefinitely. There is good reason to believe, however, that these initiatives will assume their
former priority when Pakistan’s national focus shifts away from disaster remediation. The Company
remains a leading contender for these contracts when they are awarded.

Saudi partnership formalized. NetSol’s Saudi partnership with Atheeb was formalized this summer.
Headquartered in Riyadh, this venture currently employs a 15 person team, including seven NTWK
personnel from Lahore. It is bidding on a variety of large ticket projects in the defense, banking, and public
infrastructure sectors and is likely to benefit as a result of Atheeb being a multi-billion dollar diversified
business and Atheeb’s CEO being a member of the Saudi Royal Family.

Ownership increase in NetSol Technologies Ltd. under review by Pakistan SEC. NTWK’s ownership
increase in NetSol Technologies Ltd. (NTPK), its majority-owned subsidiary in Pakistan, is taking longer
than expected due to the unusual nature of the transaction. The Pakistan SEC has no precedent on which to
rely, in that this transaction involves the transfer of ownership of, arguably, the most prominent information
technology based business in Pakistan to a foreign acquirer. Understandably, the regulators are employing
an abundance of caution, and this has resulted in delay. NetSol has been working closely with them,
however, and it is likely that the transaction will ultimately be approved.

OUTLOOK

Having been overly conservative, along with our peers, with respect to our projection of NTWK’s 1QFY11
EPS, we are developing a strong appreciation for the conservatism of NTWK’s management insofar as its
guidance is concerned. So we listened especially carefully to the Company’s 11/10/10 conference call for
the soft pedaling of potentially favorable future developments, such as:

1) The omission of Pakistani government contracts from NTWK’s revenue forecast, due to a reallocation
of government resources to disaster remediation. Though such contracts are unlikely to result in FY11
revenues, there is a strong chance that they will give rise to an enormous revenue and earnings windfall
for NTWK when they are awarded.

2) NTWK being likely to increase its ownership of NTPK from 58% to 76% in the near future, a transaction

RedChip Visibility |  | NetSol Technologies, Inc.

 NetSol Technologies, Inc. (NasdaqCM: NTWK)
Research Update

expected to be accretive to NTWK EPS. The Company is exercising an abundance of caution in not
reflecting this transfer of ownership in its current guidance.

3) Interest on the part of potential acquirers. Management acknowledged briefly that approaches had been
made during the past year, but noted during its 4QFY10 earnings call that the asking price would be in the
range of $8 to $10 per share.

4) The extremely guarded approach NTWK has taken to publicizing the strengths, benefits, and revenue
potential of its next generation product.

The Company’s existential risks, most notably its operations in an unstable region, are well recognized
and undoubtedly overly-discounted by investors. Its potentially game changing opportunities, however,
possess strong likelihoods of coming to fruition and have been systematically downplayed if not ignored
in management’s forecasts. We will not be shocked if NetSol ultimately nets tens (if not hundreds) of
millions of dollars from contracts with the Pakistani government or if its Saudi Arabian joint venture
ultimately dwarfs the profitability of NTWK’s current operations.

If the Company were seeking venture funding, these opportunities would certainly be reflected in its
business plan and given serious consideration by the venture capital community. Profitable public
companies, though, tend to be valued on the basis of near term forward earnings projections, and not on
potential that may be realized beyond the next few quarters. NTWK’s most enticing possibilities continue
to remain severely undervalued by investors.

peer comparison
NTWK PEER COMPARISON
Market P/E Fwd. P/S P/B Revs. Rev. Per EV/EBITDA BVPS Fwd. Fwd. Net
Name Ticker Price Cap (M) (ttm) P/E (ttm) (mrq) (ttm) Share (ttm) (ttm) (mrq) Revs. Income
Wipro Ltd. WIT US 13.86 33,988.01 21.9x N/A 3.7x 5.6x 5,726.0 2.37 20.4x 1.66 N/A N/A
Infosys Technologies INFY US 66.34 38,081.46 27.3x N/A 7.5x 7.5x 4,801.0 8.42 21.7x 8.94 N/A N/A
Cognizant Tech Solutions CTSH US 64.67 19,626.21 29.8x 24.1x 4.6x 5.9x 4,184.5 13.99 20.0x 11.10 5,533.0 839.9

Median 28.6x 24.1x 6.1x 6.7x

NetSol Technologies NTWK US 1.42 69.53 17.9x 7.5x 1.5x 1.5x 37.6 0.92 5.8x 0.93 42.0 8.9
AsofNovember18,2010
Source:Bloomberg

investment CONCLUSION

NetSol’s management has given EPS guidance of $0.15 to $0.20 for FY11. But given the conservatism
observed in NTWK’s management insofar as its forward looking statements are concerned, we are
projecting $42 million in revenues and $0.19 EPS – near the top of the guidance range - and wouldn’t be
at all surprised to see actual results exceed that.

In addition, we are maintaining our Target Price of $4.00. The $4.00 target price is, at 21 times forward
earnings, entirely reasonable given NTWK’s expected five year growth rate, which is in excess of 20%.
Our target price ignores the Company’s megaproject opportunities, as well as much of its potential for huge
deals in the Middle East that might be facilitated through its connection with the Saudi Royal Family.

RedChip Visibility |  | NetSol Technologies, Inc.

 NetSol Technologies, Inc. (NasdaqCM: NTWK)
Financial Statements Research Update
Quarterly Income Statement
All Figures in US$, except share data
FY Ending June 30, 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11

Net Revenues:
License fees 2,551,593 3,318,936 3,644,809 4,641,770 3,477,793
Maintenance fees 1,807,716 1,780,336 1,739,799 1,720,084 1,669,919
Services 3,262,764 4,420,535 3,548,348 4,343,206 3,255,360
Total revenues 7,622,073 9,519,808 8,932,956 10,705,060 8,403,072

Cost of revenues:
Salaries and consultants 2,013,753 2,005,845 2,154,369 1,990,180
Travel 60,200 329,008 222,136 232,283
Repairs and maintenance 67,611 69,112 43,364 76,911
Insurance 36,679 36,030 40,235 27,553
Depreciation and amortization 498,504 573,267 578,904 647,415 897,383
Other 882,338 585,157 416,931 279,263
Total cost of revenues 3,559,085 3,598,418 3,455,939 3,253,605 3,180,629
Gross profit 4,062,988 5,921,390 5,477,017 7,451,455 5,222,443

Operating expenses:
Selling and marketing 493,629 526,751 651,485 550,307 2,942,281
Depreciation and amortization 512,362 418,023 411,563 267,907 -
Bad debt expense - 212,840 (3,236) 233,200 254,632
Salaries and wages 714,899 743,970 746,095 802,585 -
Professional services, including non-cash compensation 96,106 210,795 242,177 350,647 -
Lease abandonment charges - 1,076,347 (208,764) - -
General and adminstrative 1,099,806 1,042,172 1,056,718 858,328 -
Total operating expenses 2,916,802 4,230,898 2,896,038 3,062,974 -
Income (loss) from operations 1,146,186 1,690,492 2,580,979 4,388,481 2,025,531

Other income and (expenses)

(Loss) Gain on sale of assets 18 (89,119) (125,419) (10,221) (14,794)
Interest expense (468,615) (372,273) (312,671) (314,981) (315,644)
Interest income 47,352 33,752 82,637 27,096 84,461
(Loss) Gain on foreign currency exchange transactions 383,825 (3,247) (190,082) (257,414) 1,073,894
Gain on sale of subsidiary shares - - - - -
Share of net loss from equity investment - - (23,984) (43,510) -
Beneficial conversion feature - (595,215) (458,758) (515,815) -
Other income (258,691) (50,825) 144,609 (94,426) (247,849)
Total other (expense) income (296,111) (1,076,927) (883,667) (1,209,271) (55,554)

Income (loss) before non-controlling interest and taxes 850,075 613,565 1,697,312 3,179,210 2,550,046
Non-controlling interest (1,108,975) (1,028,917) (1,097,201) (1,657,004) (974,508)
Income taxes (5,017) (32,526) (11,064) (5,337) (8,556)
Net income (loss) (263,917) (447,878) 589,047 1,516,869 1,566,982

Net income (loss) per share:

Basic (0.01) (0.01) 0.02 0.04 0.04
Diluted (0.01) (0.01) 0.02 0.04 0.04
Weighted average number of shares outstanding
Basic 31,636,379 34,447,142 35,636,259 36,587,938 39,544,096
Diluted 31,636,379 34,447,142 36,988,542 39,868,255 43,250,000

RedChip Visibility |  | NetSol Technologies, Inc.

 NetSol Technologies, Inc. (NasdaqCM: NTWK)
Financial Statements Research Update
Quarterly Balance Sheet
All Figures in US$
FY Ending June 30, 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11

Assets
Current assets
Cash and cash equivalents 3,956,279 5,211,674 4,275,443 4,075,546 2,154,813
Restricted Cash 5,000,000 5,000,000 5,000,000 5,700,000 5,700,000
Accounts receivable, net 12,724,576 11,085,142 13,682,521 12,280,331 15,824,893
Revenues in excess of billings 6,362,818 7,803,936 8,497,742 9,477,278 10,556,037
Other current assets 2,042,661 1,974,048 2,496,949 1,821,661 2,174,872
Total current assets 30,086,334 31,074,801 33,952,656 33,354,816 36,410,614

Investment under equity method - - 244,016 200,506 130,068

Property and equipment, net 8,705,379 9,063,503 8,457,622 9,472,917 9,582,056
Other assets - - - -
Intangibles:
Product licenses, renewals, enhancements,
copyrights, trademarks, and tradenames, net 14,633,099 15,679,647 16,492,134 19,002,081 20,070,648
Customer lists, net 1,152,710 961,401 792,040 666,575 541,110
Goodwill 9,439,285 9,439,285 9,439,285 9,439,285 9,439,285
Total intangibles 25,225,094 26,080,334 26,723,459 29,107,941 30,051,043
Total assets 64,016,807 66,218,638 69,377,753 72,136,180 76,173,782

Liabilities and stockholders' equity

Current liabilities
Accounts payable and accrued expenses 5,177,398 5,244,176 4,642,835 4,890,921 5,567,954
Due to officers - - 13,911 10,911 -
Current portion of loans and obligations under capitalized leases 6,771,389 6,564,633 7,134,527 7,285,773 6,072,547
Other payables - acquisitions 103,226 103,226 103,226 103,226 103,226
Unearned revenues 3,131,669 3,153,926 3,449,817 2,545,314 2,930,308
Deferred liability - - - 47,066 32,066
Dividend to preferred stockholders payable 2,445 - - -
Convertible notes payable , current portion - 1,131,115 2,983,366 3,017,096 5,360,018
Loans payable, bank 2,398,369 2,386,549 2,363,507 2,327,476 2,302,291
Total current liabilities 17,584,496 18,583,625 20,691,189 20,227,783 23,819,235

Obligations under capitalized leases, less current maturities 973,828 878,586 368,709 204,620 167,312
Convertible notes payable less current maturities 5,763,418 4,227,517 4,084,024 4,066,109 -
Long term loans; less current maturities 1,049,287 969,536 886,316 727,336 719,465
Lease abandonment liability; long term - 1,076,347 867,583 867,583 867,583
Total liabilities 25,371,029 25,735,611 26,897,821 26,093,431 25,573,595

Stockholders' equity
Preferred stock - - - - -
Common stock 33,461 35,437 35,962 37,104 43,004
Additional paid-in-capital 83,037,807 84,702,035 85,203,134 86,002,648 89,365,991
Treasury stock (396,008) (396,008) (396,008) (396,008) (396,008)
Accumulated deficit (41,492,581) (41,940,459) (41,351,411) (39,859,030) (38,292,049)
Stock subscription receivable (2,549,813) (2,347,930) (2,107,960) (2,007,960) (2,174,460)
Common stock to be issued 98,075 88,325 251,450 239,525 1,450,825
Other comprehensive loss (7,215,261) (7,754,102) (8,193,790) (8,396,086) (8,665,100)
Total stockholders' equity 31,515,680 32,387,298 33,441,376 35,620,193 50,600,186
Non-controlling interest 7,130,098 8,095,729 9,038,556 10,422,557 10,718,808
Total stockholders' equity attributable to shareholders 38,645,778 40,483,027 42,479,932 46,042,749 76,173,782

RedChip Visibility |  | NetSol Technologies, Inc.

 NetSol Technologies, Inc. (NasdaqCM: NTWK)
Financial Statements Research Update
Quarterly Cash Flow Statement
All Figures in US$
FY Ending June 30, 1QFY10 6MFY10 9MFY10 FY10 1QFY11

Cash flows from operating activities:

Net income (loss) (263,917) (711,795) (122,748) 1,394,120 1,566,981
Depreciation and amortization 1,010,867 2,002,157 2,992,624 3,907,945 897,383
Loss on transaction of debt 16,429 19,582 - - -
Provision for bad debts - 212,840 209,604 442,804 254,632
Gain on sale of subsidiary shares in Pakistan - - - - -
Loss on foreign currency exchange transaction - - 25,900 4,144 -
Share of net loss from investment under equity method - - 23,984 67,494 70,438
Loss on sale of assets - 89,101 214,520 224,741 14,794
Non controlling interest in subsidiary 1,108,975 2,137,892 3,235,093 4,892,097 974,508
Stock issued for notes payable and related interest - 27,825 30,207 39,960 14,419
Stock issued for services 226,720 300,329 572,184 801,684 383,950
Fair market value of warrants and stock options granted 283,500 651,018 791,530 803,508 53,594
Beneficial conversion feature 297,999 893,214 1,351,972 1,867,787 177,411
Changes in operating assets and liabilities:
(Increase)/ Decrease in accounts receivable (693,290) 237,431 (2,658,139) (1,316,995) (2,708,406)
Increase/ decrease in other current assets (345,240) (1,632,327) (2,703,402) (3,701,022) (1,453,577)
Decrease in long-term assets - - - - -
Decrease/ Increase in accounts payable and accrued expenses (949,731) 147,556 (52,914) (758,557) (359,946)
Net cash provided by operating activities 692,312 4,374,822 3,910,415 8,669,710 (113,820)

Cash flows from investing activities:

Purchases of property and equipment (95,160) (1,085,787) (1,458,050) (2,986,495) (682,676)
Sales of property and equipment - 227,773 232,783 641,484 4,550
Payments of acquisition payable - - - - -
Purchase of non-controlling interest in subsidiary - - - - (180,000)
Short-term investments held for sale - - - - (254,632)
Investment under equity method - - (268,000) (268,000) -
Increase in intangible assets (1,612,840) (3,118,094) (4,562,044) (7,603,779) (1,574,143)
Net cash used in investing activities (1,708,000) (3,976,108) (6,055,311) (10,216,790) (2,686,900)

Cash flows from financing activities:

Proceeds from sale of common stock 158,906 514,539 754,509 854,509 2,021,139
Proceeds from the exercise of stock options and warrants - 33,750 33,750 71,250 186,875
Purchase of subsidary stock in Pakistan - - - - -
Proceeds from sale of subsidiary stock - - - - -
Purchase of treasury stock - - - - -
Proceeds from convertible notes payable 2,000,000 2,000,000 3,500,000 3,500,000 -
Redemption of preferred stock (1,920,000) (1,920,000) (1,920,000) (1,920,000) -
Restricted cash - - - (700,000) -
Dividend Paid (41,740) (44,090) (43,988) (43,828) -
Bank overdraft 86,922 (221,382) (176,377) (7,008) 90,944
Proceeds from bank loans 2,617,881 2,727,657 4,320,534 4,540,971 1,064,554
Payments on bank loans (215,144) (352,887) (484,507) (258,358) (45,427)
Payments on capital lease obligations & loans - net (2,043,769) (2,183,189) (3,664,176) (4,328,700) (2,365,852)
Net cash provided by financing activities 643,057 554,399 2,319,746 1,708,837 952,233

Effect of exchange rate changes in cash (74,852) (145,201) (303,170) (489,973) (72,246)
Net decrease in cash and cash equivalents (447,483) 807,912 (128,319) (328,216) (1,920,733)
Cash and cash equivalents, beginning of year 4,403,762 4,403,762 4,403,762 4,403,762 4,075,546
Cash and cash equivalents, end of year 3,956,279 5,211,674 4,275,443 4,075,546 2,154,813

RedChip Visibility |  | NetSol Technologies, Inc.

 NetSol Technologies, Inc. (NasdaqCM: NTWK)
Projected Financial Statements Research Update
Quarterly Income Statement
All Figures in US$, except share data
FY Ending June 30, 1QFY11 2QFY11E 3QFY11E 4QFY11E FY11E

Net Revenues:
License fees 3,477,793 3,780,000 4,846,800 5,470,528 17,575,121
Maintenance fees 1,669,919 1,800,000 2,308,000 2,616,000 8,393,919
Services 3,255,360 3,420,000 4,385,200 4,970,400 16,030,960
Total revenues 8,403,072 9,000,000 11,540,000 13,056,928 42,000,000

Cost of revenues:
Total cost of revenues 3,180,629 3,240,000 4,039,000 4,569,925 15,029,554
Gross profit 5,222,443 5,760,000 7,501,000 8,487,003 26,970,446

Operating expenses:
Selling and marketing 2,942,281 2,790,000 3,577,400 4,047,648 13,357,329
Total operating expenses - - - - -
Income (loss) from operations 2,025,531 2,970,000 3,923,600 4,439,356 13,358,487

Other income and (expenses)

(Loss) Gain on sale of assets (14,794) - - - -
Interest expense (315,644) (429,700) (429,700) (429,700) (1,604,744)
Interest income 84,461 60,500 60,500 60,500 265,961
(Loss) Gain on foreign currency exchange transactions 1,073,894 - - - 1,073,894
Gain on sale of subsidiary shares - - - - -
Share of net loss from equity investment - - - - -
Beneficial conversion feature - - - - -
Other income (247,849) - - - -
Total other (expense) income (55,554) (77,500) (77,500) (77,500) (288,054)

Income (loss) before non-controlling interest and taxes 2,550,046 2,523,300 3,476,900 3,992,656 12,542,902
Non-controlling interest (974,508) (865,407) (865,407) (865,407) (3,570,729)
Income taxes (8,556) (8,579) (11,821) (13,575) (42,532)
Net income (loss) 1,566,982 1,649,314 2,599,672 3,113,673 8,929,641

Net income (loss) per share:

Basic 0.04 0.04 0.05 0.06 0.20
Diluted 0.04 0.04 0.05 0.06 0.19
Weighted average number of shares outstanding
Basic 39,544,096 44,570,000 47,900,000 48,740,000 45,188,524
Diluted 43,250,000 45,750,000 49,080,000 49,920,000 47,000,000

RedChip Visibility |  | NetSol Technologies, Inc.

 NetSol Technologies, Inc. (NasdaqCM: NTWK)
Disclosures Research Update
Analyst Certification
The analysts contributing to this report do not hold any shares of NTWK. Additionally, the analysts contributing to this report certify that the views
expressed herein accurately reflect the analysts’ personal views as to the subject securities and issuers. RedChip Companies Inc. certifies that no
part of the analysts’ compensation was, is, or will be, directly or indirectly, related to the specific recommendation or views expressed by the analyst
authoring this report.

RedChip Visibility Research Universe

RedChip Visibility, a division of RedChip Companies Inc., covers small and micro cap companies with market caps ranging from $5.5M to $1.2B. Each
company is typically covered for at least 12 months. New companies may be added or removed at any time.

Percentage of
Rating Number of Covered Companies Universe

Strong Buy 4 14.8%

Buy 15 55.6%

Speculative Buy 7 25.9%

Hold 0 0.0%

Sell 1 3.7%

RedChip Rating System

STRONG BUY
The current price reflects a substantial discount from the market and from its peers, and the company does not possess significant financial risk
within its risk category. Future growth potential is undervalued relative to the company’s stock price. The analyst believes the stock at current levels
represents a compelling opportunity for capital gains over the time period to its target price.

BUY
The current price reflects a discount from the market and from its peers, and the company does not possess significant financial risk within its risk
category. The analyst believes the stock at current levels will provide an opportunity for capital gains over the period of its target price. Several fac-
tors can indicate an undervaluation of the company’s shares.

SPECULATIVE BUY
The current price appears to offer potential gains though risk is considerably higher given its risk category. There may be insufficient historical data
or clear-cut prospects to warrant a “Buy,” but the analyst believes that the long run prospects of the Company are positive. The analyst believes its
risk reward ratio advocates purchase of the stock. In the short term, the stock may be subject to high volatility and continue to trade at a discount to
its market.

HOLD
The analyst is unable to assign a buy rating due to a number of specified factors noted in the report. These include the stock being fairly valued rela-
tive to its peers and the market, or the company may have risks that make it potentially unsuitable for investment within its risk category. Similarly
there are no currently known compelling factors that would warrant selling. The analyst will remain neutral pending developments.

SELL
The analyst believes that the Company is overvalued based on its current status. The future of the Company’s operations may be questionable and
there is an extreme level of investment risk relative to reward given its risk category. An investment in the company may produce below market
returns and/or deficits.

About RedChip
RedChip Companies is an international, small-cap research and financial public relations firm headquartered in Orlando, Florida; with affiliate
offices in Beijing, China; Paris, France; and Seoul, Korea. RedChip delivers concrete, measurable results for its clients through its extensive national
and international network of small-cap institutional and retail investors. RedChip has developed the most comprehensive platform of products and
services for small-cap companies, including: RedChip Research™, Traditional Investor Relations, Digital Investor Relations, Institutional and Retail
Conferences, RedChip Small-Cap TV™, Shareholder Intelligence, Social Media and Blogging Services, Webcasts, and RedChip Radio™. RedChip is not
a FINRA member or registered broker/dealer.

None of the profiles issued by RedChip Companies, Inc., constitutes a recommendation for any investor to purchase or sell any particular security or
that any security is suitable for any investor. Any investor should determine whether a particular security is suitable based on the investor’s objec-
tives, other securities holdings, financial situation needs, and tax status. NetSol Technologies Inc. (“NTWK”) is a client of RedChip Companies, Inc. and
of RedChip Visibility, a division of RedChip Companies. NetSol Technologies Inc. has agreed to pay RedChip Companies, Inc. thirty six thousand dol-
lars in cash for twelve months of RedChip Visibility Program services, which includes the preparation of the equity research report(s). The equity re-
search report(s) are prepared for informational purposes only and are paid for by the company portrayed in the report. The equity research report(s)
are not a recommendation of a solicitation to purchase or sell any security, nor do they constitute investment advice. RedChip Companies, Inc., is
currently engaged by this company to provide investor awareness services. Investor awareness services and programs are designed to help compa-
nies communicate their investment characteristics. These services may include investor conferences, digital and print distribution of NTWK investor-
related materials or services, and radio programming. NTWK agreed to pay RedChip Companies, Inc. a monthly fee of eight thousand dollars in cash
and one hundred thousand shares of Rule 144 stock for twelve months of these services. RedChip Companies, Inc., employees and affiliates may have
positions and affect transactions in the securities or options of the issuers mentioned herein.

Additional information about the subject security, analyst, or RedChip Companies Inc. is available upon request. To learn more about RedChip’s
products and services, visit http://www.redchip.com/visibility/productsandservices.asp, call 1-800-RedChip (733-2447), or email at info@redchip.com

Company Contact Info:

23901 Calabasas Rd. Suite 2072
Calabasas, CA 91302
Phone: 818-222-9195
Email: webinquiry@netsoltech.com

RedChip Visibility |  | NetSol Technologies, Inc.