SecProbe.io

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Mail Stop 4-6

March 9, 2005

Mr. Naeem Ghauri
Chief Executive Officer
NetSol Technologies, Inc.
23901 Calabasas Road, Suite 2072
Calabasas, California 91302

Re:	NetSol Technologies, Inc.
	Post-effective Amendment No. 1 to Registration Statement on
Form
SB-2
	Filed February 18, 2005
	File No. 333-116512

      Form 10-KSB for the fiscal year ended June 30, 2004
	Form 10-QSB for the fiscal quarter ended September 30, 2004
      Form 10-QSB for the fiscal quarter ended December 31, 2004
	File No. 0-22773

Dear Mr. Ghauri:

      This is to advise you that we have limited our review of the
above registration statement to the limited matters addressed in
the
comments below.  No further review of the registration statement
has
been or will be made.  All persons who are by statute responsible
for
the adequacy and accuracy of the registration statement are urged
to
be certain that all information required under the Securities Act
has
been included.

      We have also made a full financial review of the above
referenced periodic filings and have the comments set forth below.

      Where indicated, we think you should revise your document in
response to these comments.  If you disagree, we will consider
your
explanation as to why our comment is inapplicable or a revision is
unnecessary.  Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.  You should respond to the comments relating to the Form
10-KSB and other periodic reports no later than March 23, 2005.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.   Feel free to call us at the telephone numbers listed
at
the end of this letter.

Post-effective Amendment to Registration Statement on Form SB-2
filed
February 17, 2005

General

1. We note your recent press accounts regarding the closing of
your
acquisition of CQ Systems Limited on February 22, 2005.  Please
revise your disclosure throughout to reflect the consummation of
the
transaction.  Further, please provide us with your analysis
explaining why you did not believe it was necessary to file a Form
8-
K announcing the consummation of the CQ Systems acquisition.
Please
also advise us whether you plan to file financial statements
related
to CQ Systems and your analysis resulting in your conclusion
whether
to file.  Please see Items 2.01 and 9.01 of Form 8-K and Rule 3-05
and Article 11 of Regulation S-X.  We note that your Form 8-K
filed
January 25, 2005 states that "any required" financial statement
and
pro forma financial information will be filed no later than April
4,
2005.

2. We note your disclosure on page 24 of your filing in which you
state that you are "extremely optimistic that [you] will
experience
huge opportunities for [your] products offerings in 2005" and that
you believe "the year 2005 will be a year for some landmark
growth."
What are the opportunities and what is the nature and amount of
the
growth you predict?  Please provide meaningful context such as
competitive conditions and your business that will enable an
investor
to understand what you mean by referring to "huge opportunities"
and
"landmark growth."  Disclose the reasonable basis on which these
beliefs of management as to business opportunities and future
performance are made.  What conditions would need to be satisfied
in
order for the company to attain "landmark growth" and in what
circumstances would the achievement of this objective be
frustrated?
Do you intend to inform investors in the event management`s views
change about the likelihood of "landmark growth."  Please see Item
10(b) of Regulation S-K for additional guidance.

3. Please file the consent required by Item 601(b)(23) of
Regulation
S-K with respect to the audited financial statements of CQ
Systems.

NetSol Technologies Inc. and Subsidiaries Pro-Forma Financial
Statements, p. 36

4. For each of your pro forma adjustments, provide more detail
information.  For example, describe your purchase price allocation
methodology.  Supplementally tell us how you determined the fair
value of the assets and liabilities of CQ Systems in your purchase
price allocation.  Also tell us why there are no pro forma
adjustments to the statements of operations for any periods
presented.  For example, tell us whether you acquired any
amortizable
intangible assets.

CQ Systems Limited Financial Statements

5. Revise each of the Independent Auditors` Reports for the
financial
statements prepared under U.S. GAAP to indicate the city and state
where issued and to provide the signature of the accountant.

6. Revise to include financial statements for CQ Systems for the
most
recent interim period and the comparable period of the preceding
fiscal year.  Refer to Item 310(b) of Regulation S-B.

Form 10-KSB for the Year Ended June 30, 2004

Item 6 - Management`s Discussion and Analysis Plan of Operations

Results of Operations, pp. 19-21

7. Consider expanding your discussion of licenses revenue versus
service revenue.  In this regard, quantify the changes in each
source
of revenue for each period presented and explain what contributing
or
offsetting factors are included in any fluctuations.  Also explain
the factors contributing to the decrease in revenue generated from
NetSol Connect.  Describe any known or expected trends and the
impact
on future operating results or liquidity.  Refer to FR 72.

8. We note from page 10 of your Business section that you
introduced
`Pay Per Use` pricing strategy for all LeaseSoft constituent
applications at the end of the first quarter 2004.  Tell us how
changing your pricing methodology affects your current and
expected
future operating results, financial condition and liquidity.  Also
explain how this impacts your current revenue recognition policy.

Liquidity and Capital Resources, p. 21

9. Your filing should discuss long-term and short-term needs and
sources of capital.  In this regard, clearly indicate the
principal
sources of liquidity to focus on the primary drivers and other
material factors necessary to understand your cash flows and the
indicative value of historical cash flows as opposed to a
recitation
of amounts that are readily computable from the face of the
financial
statements.  Please refer to Section IV of Release No. 33-8350.

10. Tell us how you determined your working capital as of June 30,
2004 of $400,000.  We note that current assets less current
liabilities amounts to negative working capital of $10,000.
Ensure
statements that are similar in nature throughout your filing are
consistent.  Please advise or revise your filing to clearly
identify
your amount of working capital.

Item 8A. Controls and Procedures

11. You state that your "disclosure controls and procedures are
effective to ensure that all material information required to be
filed in [your annual report] has been made known to [your chief
executive officer and chief financial officer]."  Please revise to
disclose whether your chief executive officer and chief financial
officer had concluded that as of the end of the period your
disclosure controls and procedures were effective in recording,
processing, summarizing and reporting on timely basis information
required to be disclosed by you in your reports filed or submitted
under the Exchange Act.  Further, disclose whether your officers
concluded that as of the end of the period your disclosure
controls
and procedures are effective to ensure that information required
to
be disclosed in such reports are accumulated and communicated to
your
management, including your chief executive officer and chief
financial officer, to allow timely decisions regarding required
disclosure.  Please see Rule 13a-15(e) of the Exchange Act.
Please
note this comment with respect to your subsequently filed
quarterly
reports on Form 10-Q and in the preparation of future periodic
reports.

12. We note your disclosure regarding the formation of your
nominating and corporate governance committee.  Please note that
Rule
13a-15(d) requires disclosure of "any change in [your] internal
control over financial reporting, that occurred during each of
[your]
fiscal quarters,...that has materially affected, or is reasonably
likely to materially affect, [your] internal control over
financial
reporting."  Your present disclosure concerns a committee created
to
review and recommend changes to your "disclosure controls and
procedures."  Please supplementally clarify whether this committee
reviews and recommends changes to your "internal control over
financial reporting" and whether the committee has recommended any
changes that you have or will implement that will reasonably
likely
affect your internal control over financial reporting.  Please see
Rule 13a-15(f) for additional guidance.  Further, please note that
such disclosure is with respect to the fiscal quarter that is the
subject of your report.  As a result, please advise us whether the
committee was created in your fiscal quarter ended June 30, 2004
and
what specific changes were recommended and subsequently
implemented
that materially affected your internal control over financial
reporting.  Please note this comment with respect to your
subsequently filed quarterly reports on Form 10-Q and in the
preparation of future periodic reports.

Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm, pp. F-2
to
F-5

13. We note that the principal auditor did not assume
responsibility
for the work performed by the other auditor, Saeed Kamran Patel &
Co., which represents 61% of the June 30, 2004 total assets as
well
as 77% and 74% of the total net revenues for June 30, 2004 and
2003,
respectively.  In this regard, please tell us why Saeed Kamran
Patel
& Co. is not considered the principal auditor.  Explain how the
principal auditor decided that it was appropriate for them to
serve
as the principal auditor.  Refer to Statement on Auditing
Standards
(SAS) No. 1, Sections 543.02, 543.03 and 543.10.

14. We note that your principal auditor`s report indicates that
they
did not audit the financial statements of Network Technologies
(PVT)
Limited, among other subsidiaries.  Provide the audit report of
the
other auditor for Network Technologies (PVT) Limited.
Alternatively,
identify where the audit report is included.  In addition, we note
that you make reference to the reports for Network Technologies
(PVT)
Limited.  Explain why you do not reference the reports of other
auditor for NetSol Technologies (PVT) Limited, NetSol (PVT)
Limited
and NetSol Connect (PVT) Limited.  We further note your principal
auditor`s statement that they believe that their audits provide a
reasonable basis for their opinion.  Tell us why the principal
auditor`s audit opinion does not also make reference in the scope
paragraph to the work performed by the other auditor.  Refer to
SAS
No. 1, Section 543.09.

15. We note that the audit opinions of the other auditor do not
reference the Standards of the Public Company Accounting Oversight
Board.  Please see Public Company Accounting Oversight Board
Auditing
Standard No. 1.  Furthermore, we note that the financial
statements
conform with approved accounting standards as applicable in
Pakistan.
Please request your auditor to confirm that the audits were
conducted
in accordance with the Standards of the Public Company Accounting
Oversight Board (United States) and that in their opinion the
financial statements are presented in all material respects in
accordance with accounting principals generally accepted in the
United States.  Revise the audit opinions accordingly.

16. We note that the audit report of the principal auditor refers
to
the audit reports of the significant subsidiaries for each of the
years ended June 30, 2004 and 2003.  We further note that the
audit
reports of the other auditor included in the filing are for the
year
ended June 30, 2004 only.  Provide the audit reports of the other
auditor for the year ended June 30, 2003.  Refer to Rule 2-05 of
Regulation S-X.

17. We note that your principal auditor, Kabani & Company, placed
reliance on the report of Saeed Kamran Patel & Co., an accounting
firm based in Pakistan and registered with the Public Company
Accounting Oversight Board (PCAOB).  In fulfilling a principal
auditor`s responsibility under AU 543 to determine whether the
principal auditor may rely on the work of a subsidiary auditor,
the
principal auditor should ensure that the subsidiary auditor has
demonstrated sufficient knowledge and experience in applying U.S.
GAAP, PCAOB Standards, SEC financial reporting rules and SEC
independence requirements.  A foreign auditor that has
demonstrated
such knowledge and experience to the SEC staff generally should
have
documentation of that fact.  A foreign audit firm`s registration
with
the PCAOB does not supersede existing means by which a firm
demonstrates its knowledge and experience in applying U.S. GAAP,
PCAOB Standards, SEC financial reporting rules and SEC
independence
requirements.  Foreign auditors are still expected to demonstrate
their knowledge and experience (U.S. affiliation and Appendix K
compliance, or demonstrate to the Office of the Chief Accountant
sufficient knowledge and experience in applying U.S. GAAP, U.S.
GAAS,
SEC financial reporting rules and SEC independence requirements).

Please tell us how Kabani & Company determined that Saeed Kamran
Patel & Co. has sufficient knowledge and experience in applying
U.S.
GAAP, PCAOB Standards, SEC financial reporting rules and SEC
indpendence requirements.  Please also provide us with the name,
address and facsimile number of the principal partner at Saeed
Kamran
Patel & Co. that was involved in the audits of NetSol Technologies
(Pvt.) Limited, NetSol (Pvt.) Limited and NetSol Connect (Pvt.)
Limited.

Consolidated Statements of Operations, p. F-7

18. We note on page F-27 in Note 9 that the fair market value of
warrants issued included in other income and expenses relates to
the
fair value of warrants issued in connection with the sale of
stock.
Explain why you do not consider the fair value of this
consideration
to be an offering cost that would be charged against the gross
proceeds of the private placement.  Refer to SAB Topic 5A.  Cite
the
authoritative accounting literature relied upon in your
presentation.

Note 2 - Summary of Significant Accounting Policies

Accounts Receivable, p. F-15

19. We note that you analyze certain factors to evaluate the
adequacy
of the allowance for doubtful accounts.  Supplementally explain
how
you considered increasing revenue, higher receivables and your
history of bad debts in your analysis of the adequacy of the
allowance for doubtful accounts of $80,000.  Also tell us what
consideration you gave to discussing the impact of your history of
bad debts in your liquidity section of management`s discussion and
analysis.

Intangible Assets, p. F-16

20. Supplementally tell us the amount of amortization expense
recognized in the periods presented related to capitalized
software
development costs.  Tell us where you have classified the
amortization on your statements of operations.  Refer to FASB
Staff
Implementation Guides, SFAS 86, Question 17.

Revenue Recognition, pp. F-17 to F-18

21. Explain the nature of "Revenue in excess of billings" listed
on
the face of the consolidated balance sheet.  Disclose the nature
of
these unbilled amounts in the financial statement footnotes.

22. We note your disclosure on page 7 stating that "[t