NetSol International, Inc. Announces Divestiture of German Subsidiary and Scale Down of U.K. Subsidiary Operations

    CALABASAS, Calif.--May 14, 2001--NetSol International Inc. (NASDAQ: NTWK, www.netsol-intl.com) announced today that it has divested itself of its German subsidiary, Supernet AG. The terms of the divestiture call for NetSol to pay a one-time fee of approximately $160,000. NetSol is expecting to record a one-time charge to earnings of approximately $615,000, which includes the one-time fee as well as a write-off of net assets. As a result of this action, NetSol was able to divest itself of more than $600,000 of liabilities. The formal agreement was signed on May 1, 2001, and will be closed on May 21. NetSol, in following professional accounting literature, has recorded this divestiture in the third quarter ended March 31, 2001 as a discontinued operation.
    NetSol also announced it is moving forward on its previously declared intention to significantly scale down its U.K. subsidiary, Network Solutions Group, which was acquired in August 1999. As a result of this scaling down, NetSol is taking a one-time non-cash charge to earnings of approximately $1.2 million, for impairment losses on purchased intangible assets. This charge will appear in the financials for the third quarter ended March 31, 2001. NetSol incurred losses in fiscal year 2001 of approximately $450,000 related to this subsidiary.
    NetSol's third quarter earnings will be released tomorrow, Tuesday, May 15.
    NetSol International Inc. is an ISO-9001 certified software developer in the global information technology industry. With an international workforce of more than 400 employees, NetSol specializes in software development, proprietary and asset-based leasing and finance programs, IT consulting, and creation of eBusiness and Web-based solutions for a growing list of blue-chip customers worldwide. Clients include Daimler Chrysler Taiwan; Mercedes Benz Financing, Australia; Mercedes Benz Leasing, Thailand; CFS Groups U.K., St. George Bank, Australia; GMAC in Australia, and Debis Porfolio Systems, U.K. For more information about NetSol and its subsidiaries, visit the company's web site at www.netsol-intl.com.

    Safe Harbor Statement

    This release contains forward looking statements relating to the development of the Company's products and services and future operation results, including statements regarding the Company that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words "believe," "expect," "anticipate," "intend," variations of such words, and similar expressions identify forward looking statements, but their absence does not mean that the statement is not forward looking. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Factors that could affect the Company's actual results include the progress and costs of the development of products and services and the timing of the market acceptance of those products and services. A more detailed description of certain factors that could affect actual results include those factors discussed in the Company's filings with the United States Securities and Exchange Commission, including its annual report on Form 10-KSB and quarterly reports on Form 10-QSB. NetSol International Inc. undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the occurrences of unanticipated events. Readers are cautioned not to put undue reliance on forward-looking statements, which speak only as of the date of this release. The company disclaims any intent or obligation to update publicly these forward-looking statements, whether as a result of new information, future events or for any other reason.