SecProbe.io

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Mail Stop 4-6

April 27, 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. 2 to Registration Statement on
Form
SB-2
	Filed March 24, 2005
	File No. 333-116512

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

Dear Mr. Ghauri:

      We have reviewed your amended filings and have the following
comments.

Post-effective Amendment No. 2 to Registration Statement on Form
SB-2

Experts, p. 18

1. We noted that the other auditor, Saeed Kamran Patel & Co., was
not
included in the experts section of your registration statement.
Explain why this information was omitted from your filing.  Refer
to
Item 509 of Regulation S-B.

NetSol Technologies Inc. and Subsidiaries Pro-Forma Financial
Statements, pp. 35-43

Prior Comment No. 4

2. Tell us more about how you estimated the amount of the purchase
price for CQ Systems based on the terms of the arrangement.
Provide
us with your calculations of each of the components of the
purchase
price.  Explain how you were able to estimate the contingent
consideration beyond a reasonable doubt.  Cite the authoritative
U.S.
GAAP literature relied upon in recording the contingent
consideration
as part of the purchase price at the time of closing.  Also,
describe
how you valued the shares issued as part of the purchase price and
how you considered the guidance in EITF 99-12.  We note that part
of
the purchase price also included $1.7 million in cash that was
paid
at closing.  Accordingly, explain why your pro forma adjustments
do
not contemplate a reduction of cash of $1.7 million.

3. Provide us with your allocation of the purchase price of CQ
Systems to the specific identifiable tangible and intangible
assets
acquired and specific liabilities assumed.  As previously
requested,
tell us how you determined the fair value of the assets and
liabilities assumed.  Provide us with the assumptions used in
determining that the fair value of the assets and liabilities are
equal to the historical cost.  Refer to paragraph 37 of SFAS 141
in
your response.  Also describe your methodology for determining the
value assigned to each major intangible asset class and the
related
useful lives or amortization periods.  Consider providing similar
information in the notes to your pro forma financial information
in
your Form 8-K/A and Form SB-2.  In addition, reconcile your
purchase
price allocation disclosed in the notes to your pro forma
financial
statements to the purchase price allocation as disclosed in Note
15
of the Form 10-QSB/A for the quarter ended December 31, 2004.

4. Refer to your pro forma financial statements as of June 30,
2004
and December 31, 2004. Explain why it is appropriate to assume the
acquisition was consummated as of July 1, 2003.  Pro forma
adjustments related to the pro forma statements of operations
should
be computed assuming the transaction was consummated at the
beginning
of the fiscal years presented, while pro forma adjustments related
to
the pro forma statements of financial condition should be computed
assuming the transaction was consummated at the end of the most
recent period for which the statement of financial condition is
presented.  Refer to Article 11-02(b)(6) of Regulation S-X.

5. Refer to your pro forma financial statements as of December 31,
2004.  Explain why you believe it is appropriate to include
financial
statements of CQ Systems for the nine months ended December 31,
2004,
rather than six-month financial statements, in the pro forma
financial statements for the six months ended December 31, 2004.

CQ Systems Limited Financial Statements

Prior Comment No. 6

6. You indicate in your response that CQ Systems did not prepare
financial statements on a quarterly basis for a comparable period
ending December 31, 2004.  However, we note that you have included
interim financial statements for CQ Systems for the period ended
December 31, 2004 in your Form 8-K/A filed April 1, 2005.  Explain
why you believe that your current presentation in your Form SB-2
adheres to the guidance in Item 310(c)(3)(i) of Regulation S-B,
which
states that financial statements shall be furnished for the two
most
recent fiscal years and any interim periods.

Independent Auditor`s Report

7. We note your inclusion, in the Post-Effective Amendment to the
Form SB-2 and in your Form 8-K/A filed on April 1, 2005, of the
CMB
audit report dated October 29, 2003 that covers the audited
financial
statements for the period ended March 31, 2003 and 2002.  Please
note
that Item 310(c)(3)(i)(b) of Regulation S-B only requires
financial
statements of an acquired business to be furnished for the two
most
recent fiscal years, which you presented with the audit report
dated
November 23, 2004.  Please consider removing from your filing the
audit report dated October 29, 2003 as well as the related 2003
and
2002 financial statements, as this information is not required and
may be confusing to investors.  We also note your inclusion of the
audit report that is based on U.K. GAAP and U.K. GAAS, in addition
to
the U.S. GAAS and U.S. GAAP opinion which is required.  Please
consider removing the U.K. GAAP and U.K. GAAS report from your
filing
as this report does not comply with Commission rules and is not
required in the filing.

8. We note the report of CMB Partnership on the financial
statements
of CQ Systems states that the audits were conducted in accordance
with generally accepted auditing standards.  Revise to state, if
true, that the audits were conducted in accordance with generally
accepted auditing standards in the United States.  Furthermore, we
note the inclusion of the statement that "the scope of our work
for
the purpose in U.S. GAAP financial statements did not include
examining or dealing with events after the date of the audit
report
on the U.K. GAAP accounts."  Please supplementally tell us why
this
qualification is appropriate and how CMB Partnership believes it
is
able to issue the audit report that states that a U.S. GAAS audit
has
been conducted in light of this statement.

CQ Systems Limited

Notes to Financial Statements

Note 1.b. Turnover

9. For contracts with multiple elements, describe the nature of
each
element.  Tell us how you identify each element sold, explain how
revenue is allocated to each element, and describe the related
accounting policy for each element.  Ensure that your response
addresses your application of EITF 00-21 to these types of
arrangements.

10. Tell us the nature of the other services CQ Systems provides.
Explain why the use of contract accounting is appropriate for
these
contracts.  In this regard, note that footnote 1 of SOP 81-1 does
not
permit the use of contract accounting for service contracts.

Form 10-KSB/A for the fiscal year ended June 30, 2004

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

Results of Operations, pp. 19-21

Prior Comment No. 8

11. Your response provides disclosure that should have been
provided
in your liquidity discussion in greater detail.  The expected
changes
in the "Excess of revenues over billing account" should have been
disclosed.  The expectations of management`s ability to better
project revenues should have been disclosed.  Your disclosure
should
also include the reasons why management is expecting these
changes,
such as the terms and conditions of "pay per use" pricing
strategy.
Explain what factors you considered in excluding this information
from your liquidity discussion.  In addition, tell us and consider
disclosing how you will recognize revenue for "pay per use"
arrangements.

Item 8A. Controls and Procedures

12. We note that your chief executive officer and chief financial
officer concluded that your disclosure controls and procedures
were
effective as of the end of the periods covered by the reports in
your
2004 Form 10-K/A and 2004 Form 10-Q/As.  Tell us why, in light of
what you now know regarding the circumstances leading to your
restatement, the officers continue to believe that your disclosure
controls and procedures were effective as of the end of the June
30,
2004 and each of the quarterly periods ended September 30, 2004
and
December 31, 2004.

Prior Comment No. 11

13. We note your response to our prior comment.  In our
understanding, however, your statement appears to suggest that
your
disclosure controls and procedures are effective, but only to the
extent that "all material information required to be filed in
[your
annual report] on Form 10-KSB/A has been made known to [your chief
executive officer and chief financial officer]."  In other words,
your disclosure does not appear to address the effectiveness of
your
disclosure controls and procedures with respect to whether
information required to be disclosed is recorded, processed,
summarized and reported on a timely basis or whether such
information
is made known to your officers to allow timely decisions regarding
required disclosure.  Please revise your Form 10-KSB and
subsequent
interim filings to disclose whether your disclosure controls and
procedures, as defined in Rule 13a-15(e) of the Exchange Act, are
effective.

Prior Comment No. 12

14. We note your response to our prior comment.  Please clarify
the
disclosure to include the date the committee was formed.  Further,
in
light of the fact that your nominating and corporate governance
committee is not a change to your internal control over financial
reporting, please remove the reference to "[o]ther than as
described
above" unless a change to your "internal control over financial
reporting" has, in fact, been disclosed above.

15. In addition, we note your disclosure in your Forms 10-QSB and
10-
KSB that "there have been no changes...in [your] internal
controls...that could significantly affect these controls."
Consistent with the requirements of Item 308(c) of Regulation S-B,
please revise your Form 10-KSB/A and subsequent interim filings to
disclose whether there has been any change in your "internal
control
over financial reporting" identified in connection with the
evaluation required by Rule 13a-15(d) of the Exchange Act that
occurred during the applicable fiscal period that has materially
affected or is reasonably likely to materially affect your
internal
control over financial reporting.  Please see Item 308(c) and
Release
No. 33-8328 for additional guidance.

Consolidated Financial Statements

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

Prior Comment No. 13

16. We note your response on why you consider Kabani & Company,
Inc.
to be the principal auditor.  Explain why the work performed by
the
other auditor (i.e., the audit of 60% of the June 30, 2004
consolidated total assets as well as 77% and 74% of the
consolidated
total net revenues for June 30, 2004 and 2003, respectively) is
less
material in nature than the portion of the consolidated financial
statements audited by Kabani & Company.  Furthermore, we note that
the majority of the business operations and workforces are located
in
Pakistan.  Indicate which auditor was responsible for auditing the
financial information at this location and how you considered this
in
your determination that Kabani & Company was the principal
auditor.
We may have further comment.

Prior Comment No. 14

17. We note your response that the audit report for NetSol
(emphasis
added) Technologies (PVT) Limited was filed with the Form10-KSB.
However, as stated in our prior comment no. 14, provide the audit
report of the other auditor for Network (emphasis added)
Technologies
(PVT) Limited since the principal auditor`s report indicates that
they did not audit the financial statements of Network
Technologies
(PVT) Limited.  Alternatively, identify where the audit report is
included in the Forms 10-KSB and SB-2.

Prior Comment No. 15

18. We note your revisions in response to prior comment no. 15.
PCAOB Auditing Standard No. 1 (AS 1) requires auditors to state
that
the audit was conducted in accordance with "the standards of the
Public Company Accounting Oversight Board (United States)."  We
note
that the reports of Saeed Kamran Patel & Co. on the financial
statements of Netsol (Pvt.) Ltd., Netsol Technologies (Pvt.)
Limited,
and Netsol Connect (Pvt.) Ltd. state that the audits were
conducted
"in accordance with International Standards on Auditing, which are
comparable in all material respects with the standards of the
Public
Company Accounting Oversight Board (United States)."  As noted in
the
July 27, 2004 International Practices Task Force minutes available
at
http://www.aicpa.org/download/belt/2004_0727_IPTF_HLs.pdf, the
staff
will not object to references to both home-country GAAS and PCAOB
standards in audit reports.  However, the audit reports should be
revised to state, if true, that the audits were conducted in
accordance with "the standards of the Public Company Accounting
Oversight Board (United States) and International Standards on
Auditing."  Alternatively, please revise to only state the audits
were conducted in accordance with the standards of the Public
Company
Accounting Oversight Board (United States), if true.  You may also
refer to Interpretation 14 to AU 508 which provides further
clarification and an example on reporting on audits conducted in
accordance with the standards of the Public Company Accounting
Oversight Board (United States) and in accordance with
International
Standards on Auditing.

19. Please revise the audit reports issued by Saeed Kamran Patel &
Co. on the financial statements of Netsol (Pvt.) Ltd, Netsol
Technologies (Pvt.) Limited, and Netsol Connect (Pvt.) Ltd. to
clearly express an opinion, if true, that the financial statements
are presented in accordance with U.S. GAAP.  It is not appropriate
to
state that the financial statements are in accordance with
approved
accounting standards as applicable in Pakistan "which are
comparable
in all respects with U.S. Generally Accepted Accounting
Principles"
given that there are differences between approved accounting
standards as applicable in Pakistan and U.S. GAAP.

Prior Comment No. 16

20. We note that the reports of Saeed Kamran Patel & Co. express
"true and fair" opinions on the audits of Netsol (Pvt.) Ltd,
Netsol
Technologies (Pvt.) Limited, and Netsol Connect (Pvt.) Ltd.  We
require foreign audit firms to issue "present fairly" opinion
paragraphs that comply with PCAOB Standards wording requirements
for
all audit reports issued on or after September 30, 2002 included
within filings with the Commission.  Please refer to the minutes
from
the May 23, 2002 AICPA International Practices Task Force meeting
available at the following website: http://www.aicpa.org/belt/sec-
hl.htm.  Please revise all applicable audit reports to express
"present fairly" opinions.

Furthermore, paragraph 65 of AU 508 states that an auditor should
update the report on the individual financial statements of the
one
or more prior periods presented on a comparative basis with those
of
the current period.  Ordinarily, the auditor`s report on
comparative
financial statements should be dated as of the date of completion
of
fieldwork for the most recent audit.  Therefore, please request
that
Saeed Kamran Patel & Co. revise the audit reports for Netsol
(Pvt.)
Ltd, Netsol Technologies (Pvt.) Limited, and Netsol Connect (Pvt.)
Ltd. to combine the audit reports for the two audit periods, June
30,
2004 and 2003, into one report following the guidance in AU 508.

Prior Comment No. 17

21. The audit firm Saeed Kamran Patel & Co. is not recognized by
the
staff of the Commission.  Foreign auditors that wish to practice
before the Commission are expected to demonstrate their know