UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): March 22, 2006
(March 24, 2005)
Commission file number: 0-22773
NETSOL TECHNOLOGIES, INC.
(Exact name of small business issuer as specified in its charter)
NEVADA 95-4627685
(State or other Jurisdiction of (I.R.S. Employer NO.)
Incorporation or Organization)
23901 Calabasas Road, Suite 2072, Calabasas, CA 91302
(Address of principal executive offices) (Zip Code)
(818) 222-9195 / (818) 222-9197
(Issuer's telephone/facsimile numbers, including area code)
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Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Internal Review.
On March 24, 2005, we filed an 8-K disclosing the restatement of aspects of our
financial statements on our 10-KSB for the period ended June 30, 2004 and our
quarterly reports on Form 10-QSB for the periods ended September 30, 2004 and
December 31, 2004. Subsequent SEC comments led to further adjustments to these
filings and for the period ended March 31, 2004 and the year ended June 30,
2005. This filing summarizes the financial modifications already disclosed in
our March 24, 2005 current report and the as-filed modifications to the
subsequent reports.
As a result of these discussions, the Company concluded that the amount of
impairment of goodwill was over-recorded and classified as amortization expense,
the expense due to issuance of warrants in connection with the PIPE financing
was recorded as finance charges instead of charging it against the gross
proceeds of the private placement, the beneficial conversion feature of the
convertible debenture was overstated and the amount due by officers on an
exercise of options hadn't been properly reflected on the financial statements
and these exercise of options had been recorded as receivables as of June 30,
2004. In addition for the period ended March 31, 2005, the amount of deferred
liability in connection with the acquisition of CQ Systems was over-stated.
The restatement of the Balance Sheet for the fiscal year ended June 30, 2004
increased Net Shareholder's Equity from $7.1 million to $7.3 million. The
restatement of the Statement of Operations reduced the net loss to approximately
$2.6 million, or a net loss per share of $0.32 versus the previously stated net
loss of approximately $3 million, or a net loss per share of $0.38.
Subsequent to the issuance of the Company's financial statements for the three
months ended September 30, 2004 and 2003, the Company determined that certain
transactions and presentation in the financial statements had not been accounted
for properly in the Company's financial statements. Specifically, the amount of
impairment of goodwill was over-recorded and classified as amortization expense.
In addition, the beneficial conversion feature of the convertible debenture was
overstated and loans to officers hadn't been properly reflected on the financial
statements and the exercise of options against these loans had been recorded as
receivables as of June 30, 2004.
Subsequent to the issuance of the Company's financial statements for the six
months ended December 31, 2004 and 2003, the Company determined that certain
transactions and presentation in the financial statements had not been accounted
for properly in the Company's financial statements. Specifically, the amount of
impairment of goodwill was over-recorded and classified as amortization expense.
In addition, the beneficial conversion feature of the convertible debenture was
overstated and loans to officers hadn't been properly reflected on the financial
statements and the exercise of options against these loans had been recorded as
receivables as of June 30, 2004.
The restatement of the Balance Sheet for the first six months of fiscal 2005
ended December 31, 2004 increased the Net Shareholders Equity from $10.6 million
to $11.0 million. The restatement of the Statement of Operations increased net
income to $318,380, or basic net income per share of $0.03 versus previously
stated net income of approximately $78,692, or basic net income per share of
$0.01.
The Chief Financial Officer, after consultation with the audit committee, has
discussed the matters disclosed in this Current Report on Form 8-K with Kabani &
Company, Certified Public Accountants. The following previously issued audit
report, and interim reviews related to the previously issued financial
statements and quarterly reports have been restated and, the restated
information is contained in the following forms filed with the SEC: the
10-KSB/As for the periods ending June 30, 2004 and June 30, 2005 filed on March
21, 2005; the 10-QSB/A for the period ended September 30, 2004 filed on March
21, 2006, the 10-QSB/A for the period ended December 31, 2004 filed on March 21,
2006, and the 10-QSB/A for the period ended March 31, 2005 filed on March 21,
2006.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
NETSOL TECHNOLOGIES, INC.
Date: March 22, 2006 /s/ Naeem Ghauri
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NAEEM GHAURI
Chief Executive Officer
Date: March 22, 2006 /s/ Tina Gilger
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TINA GILGER
Chief Financial Officer
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