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):
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March 1, 2005 (January 19, 2005)
Commission file number: 0-22773
NETSOL TECHNOLOGIES, INC.
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(Exact name of small business issuer as specified in its charter)
NEVADA 95-4627685
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(State or other Jurisdiction of (I.R.S. Employer NO.)
Incorporation or Organization)
23901 Calabasas Road, Suite 2072, Calabasas, CA 91302
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(Address of principal executive offices) (Zip Code)
(818) 222-9195 / (818) 222-9197
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(Issuer's telephone/facsimile numbers, including area code)
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Item 1.01. Entry into a Material Definitive Agreement.
On January 19, 2005, NetSol Technologies, Inc., a Nevada corporation (the
"Company") entered into a Share Purchase Agreement whereby the Company agreed to
acquire 100% of the issued and outstanding shares of CQ Systems Ltd., a company
organized under the laws of England and Wales ("CQ") (the "Share Purchase
Agreement"). Prior to the execution of the Share Purchase Agreement, there was
no relationship between the Company and any of the parties to the Share Purchase
Agreement.
According to the terms of the Share Purchase Agreement, the Company shall
acquire 100% of the issued and outstanding shares of CQ from CQ's current
shareholders, whose identity is set forth in the Share Purchase Agreement (the
"CQ Shareholders") at the completion date in exchange for a purchase price
consisting of: a) 50.1% of CQ's total gross revenue for the twelve month period
ending 31st of March, 2005 after an adjustment for any extraordinary revenue,
i.e. non-trading revenue ("LTM Revenue") multiplied by 1.3 payable: (i) 50% in
shares of restricted common stock of the Company at a per share cost basis of
$2.313 and as adjusted by the exchange rate of U.S. Dollar to British Pound (at
the spot rate for the purchase of sterling with U.S. dollars certified by
NatWest Bank plc as prevailing at or about 11:00 a.m.) on January 19, 2005 and,
(ii) 50% in cash; and b) 49.9% of CQ's LTM Revenue for the period ending 31st
March 2006 multiplied by 1.3 payable, at the Company's discretion: (i) wholly in
cash; or (ii) on the same basis and on the same terms as the initial payment
provided, however that the cost basis of the Company's common stock shall be
based on the 20 day volume weighted average of the Company's shares of common
stock as traded on NASDAQ 20 days prior to March 31, 2006 and, provided that
under no circumstances shall the total number of shares of common stock issued
to the CQ Shareholders exceed 19% of the issued and outstanding shares of common
stock, less treasury shares, of the Company at January 19, 2005.
The acquisition closed on February 21, 2005 based on March 31, 2004 financial
statements of CQ Systems Ltd. with the payment of approximately $1.7 million in
cash and 675,292 shares of Company common stock based on a $2.46 per share cost
basis. Consideration will be adjusted when March 31, 2005 financials are
received. The final payment of consideration will be made after the completion
of CQ's March 31, 2006 fiscal year end.
Exhibits
Listed below are the financial statements, pro forma financial information filed
as a part of this report.
(a) Financial Statements of the Business Acquired.
(1) CQ Systems Ltd.'s Financial Statements for the year ended March 31, 2004
(2) CQ Systems Ltd. Financial Statements for the year ended March 31, 2003
(b) Pro Forma Financial Information.
(1) NetSol Technologies Inc. and Subsidiaries Pro Forma Financial Statements
June 30, 2004 (Unaudited)
(2) NetSol Technologies Inc. and Subsidiaries Pro Forma Financial Statements
June 30, 2003 (Unaudited)
(3) NetSol Technologies, Inc. and Subsidiaries Pro Forma Financial Statements
for the quarter and six months ended December 31, 2004 (Unaudited)
(c) Exhibits
2.1 Share Purchase Agreement dated as of January 19, 2005 by and between the
Company and the shareholders of CQ Systems Ltd.*
*Previously filed
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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 31, 2005 /s/ Naeem Ghauri
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NAEEM GHAURI
Chief Executive Officer
Date: March 31, 2005 /s/ Najeeb Ghauri
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NAJEEB GHAURI
Chief Financial Officer and Chairman
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