<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
(X) Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 2000
( ) For the transition period from __________ to __________
Commission file number: 333-28861
NETSOL INTERNATIONAL, INC.
(Exact name of small business issuer as specified in its charter)
NEVADA 95-4627685
(State or other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
5000 North Parkway Calabasas, Suite 202, Calabasas, CA 91302
(Address of principal executive offices) (Zip Code)
(818) 222-9195 / (818) 222-9197
(Issuer's telephone/facsimile numbers, including area code)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes X No
--- ---
The issuer had 10,475,531 shares of its $.001 par value Common Stock
issued and outstanding as of March 31, 2000.
Transitional Small Business Disclosure Format (check one)
Yes No X
--- ---
<PAGE>
NETSOL INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE NO.
<S> <C> <C> <C>
Item 1. Financial Statements
Consolidated Balance Sheet as of
March 31, 2000 3
Comparative Unaudited Consolidated Statements of
Operations for the Three and Nine Months Ended
March 31, 2000, and 1999 4
Unaudited Consolidated Statement of Changes in
Stockholders' Equity for the Nine Months Ended
March 31, 2000 5
Comparative Unaudited Consolidated Statements of
Cash Flows for the Three and Nine Months Ended
March 31, 2000, and 1999 6-7
Notes to the Unaudited Consolidated Financial
Statements 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities and Use of Proceeds 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits 13
(b) Reports on Form 8-K 13
</TABLE>
-2-
<PAGE>
NETSOL INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2000
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Current Assets:
Cash $ 4,402,497
Accounts receivable 1,942,094
Other current assets 1,305,810
----------------
Total Current Assets 7,650,401
----------------
Property and Equipment, at cost,
net of accumulated depreciation 1,032,603
----------------
Other Assets:
Deposits 5,285
Product license, renewals, enhancements and copyrights, net 6,124,848
Customer lists, net 1,612,304
Goodwill, net 5,008,680
----------------
Total Other Assets 12,751,117
----------------
Total Assets $ 21,434,121
================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses
Current maturities of obligations under capital lease $ 1,748,060
Loan payable 57,605
39,461
----------------
Total Current Liabilities 1,845,126
----------------
Obligations under capitalized leases, less current maturities 230,418
----------------
Total Liabilities 2,075,544
----------------
Stockholders' Equity:
Common stock; $.001 par value, 25,000,000 shares authorized,
10,475,531 shares issued and outstanding 10,476
Common stock receivable (25,000)
Additional paid-in capital 23,813,865
Accumulated deficiency (4,440,764)
----------------
Total Stockholders' Equity 19,358,577
----------------
Total Liabilities and Stockholders' Equity $ 21,434,121
================
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
-3-
<PAGE>
NETSOL INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Forthe Three Months Ended March 31, 2000 & 1999
and For the Nine Months Ended March 31, 2000 & 1999
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
MARCH 31 MARCH 31
-------------------------------------- -------------------------------------
2000 1999 2000 1999
------------------ ------------------ ----------------- -----------------
(unaudited) (unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C>
Net revenues $ 1,858,348 $ 897,759 $ 4,848,665 $ 3,421,582
Cost of revenues 725,484 -0- 1,700,329 -0-
------------------ ------------------ ----------------- -----------------
Gross profit 1,132,864 897,759 3,148,336 3,421,582
Operating expenses 1,919,625 980,748 5,047,798 4,062,245
Other income/(expense) (10,842) 46,713 (39,198) 12,441
------------------ ------------------ ----------------- -----------------
Net loss before income allocated
to minority interest (797,603) (36,276) (1,938,660) (628,222)
Minority interest in subsidiaries earnings -0- (137,470) -0- (305,616)
------------------ ------------------ ----------------- -----------------
Net loss $ (797,603) $ (173,746) $ (1,938,660) $ (933,838)
================== ================== ================= =================
Net loss per share:
Basic and diluted ($0.08) ($0.06) ($0.22) ($0.37)
Weighted average shares outstanding:
Basic and diluted 9,600,865 2,809,188 8,963,798 2,521,142
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
-4-
<PAGE>
NETSOL INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEAR ENDED JUNE 30, 1999 AND
THE NINE MONTHS ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
COMMON
---------------------------- Common Additional
No. of $0.001 par stock paid-in
SHARES AMOUNT RECEIVABLE CAPITAL
---------------------------- --------------- --------------
<S> <C> <C> <C> <C>
Balance at June 30, 1998 1,774,065 $ 1,774 $ -0- $ 542,061
Common stock and warrants sold through
Initial public offering 251,000 251 -- 987,733
Issuance of common stock in exchange for
Services rendered 235,000 235 -- 710,631
Common stock options granted for services -- -- -- 199,844
Exercise of common stock options 105,000 105 -- 945
Sale of common stock warrants -- -- -- 5,667
Exercise of warrants to convert to common stock 397,000 397 -- 294,952
Issuance of common stock relating to acquisition
of subsidiaries 4,690,000 4,690 -- 9,658,810
Net loss for the year ended June 30, 1999 -- -- -- --
---------------------------------------------------------------------
Balance at June 30, 1999 7,452,065 7,452 -0- 12,400,643
---------------------------------------------------------------------
Sale of common stock through private placement 611,333 612 (25,000) 1,907,701
Issuance of common stock in exchange for services 448,083 448 -- 936,917
Exercise of common stock options 596,250 596 -- 911,317
Exercise of warrants to convert to common stock 812,800 813 -- 4,875,987
Issuance of common stock relating to acquisition
of subsidiaries 555,000 555 -- 2,781,300
Net loss for the nine months ended
March 31, 2000 -- -- -- --
---------------------------------------------------------------------
Balance at March 31, 2000 10,475,531 $ 10,476 $ (25,000) $ 23,813,865
=====================================================================
<CAPTION>
To
Accumulated stockholders'
(DEFICIENCY) EQUITY/(DEFICIENCY)
------------ -------------------
<S> <C> <C>
Balance at June 30, 1998 $ (875,370) $ (331,535)
Common stock and warrants sold through
Initial public offering -- 987,984
Issuance of common stock in exchange for
Services rendered -- 710,866
Common stock options granted for services -- 199,844
Exercise of common stock options -- 1,050
Sale of common stock warrants -- 5,667
Exercise of warrants to convert to common stock -- 295,349
Issuance of common stock relating to acquisition
of subsidiaries -- 9,663,500
Net loss for the year ended June 30, 1999 (1,626,734) (1,626,734)
----------------------------------
Balance at June 30, 1999 (2,502,104) 9,905,991
----------------------------------
Sale of common stock through private placement -- 1,883,313
Issuance of common stock in exchange for services -- 937,365
Exercise of common stock options -- 911,913
Exercise of warrants to convert to common stock -- 4,876,800
Issuance of common stock relating to acquisition
of subsidiaries -- 2,781,855
Net loss for the nine months ended
March 31, 2000 (1,938,660) (1,938,660)
----------------------------------
Balance at March 31, 2000 $(4,440,764) $ 19,358,577
==================================
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
-5-
<PAGE>
NETSOL INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
For the Three Months Ended March 31, 2000 & 1999 and
For the Nine Months Ended March 31, 2000 & 1999
<TABLE>
<CAPTION>
Three months ended Nine months ended
MARCH 31, MARCH 31,
-------------------------------------- -----------------------------------
2000 1999 2000 1999
------------------ ------------------ ----------------- ---------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) $ (797,603) $ (173,746) $ (1,938,660) $ (933,838)
---------------------------------------------------------------------------
ADJUSTMENTS TO RECONCILE NET LOSS TO
NET CASH PROVIDED BY OPERATING ACTIVITIES:
Depreciation and amortization 287,360 74,640 274,560 154,331
Non-cash compensation expense 336,875 78,751 777,500 644,751
Minority interest income -0- 137,470 -0- 305,616
(Increase) decrease in accounts receivable 636,151 (38,060) (1,422,988) (260,383)
(Increase) decrease other current assets (345,845) (66,424) (1,138,740) (81,584)
(Increase) decrease in deposits 2,336 (3,199) (869) (3,886)
Increase (decrease) in accounts
payable & accrued expenses (1,559,899) (332,106) 748,787 (446,259)
---------------------------------------------------------------------------
Total adjustments (643,022) (148,928) (761,750) 312,586
---------------------------------------------------------------------------
Net cash provided by (used for) operating
activities (1,440,625) (322,674) (2,700,410) (621,252)
---------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Purchase) sale of investments, net -0- -0- -0- (161,539)
Purchase of property, plant and equipment (401,583) (12,587) (685,303) (131,339)
---------------------------------------------------------------------------
Net cash provided by (used for) investing
activities (401,583) (12,587) (685,303) (292,878)
---------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock and warrants, net 5,805,335 117,150 7,696,121 1,127,139
Proceeds from (payments on) notes payable 39,461 -0- 141,788 (228,300)
Payments on loan payable, related party -0- -0- (44,750) (100,000)
Deferred offering costs -0- -0- -0- 203,813
Payments on capital lease obligations (21,462) (871) (36,662) (3,629)
---------------------------------------------------------------------------
Net cash provided by (used for) financing
activities 5,823,334 116,279 7,756,497 999,023
---------------------------------------------------------------------------
Net increase (decrease) in cash 3,981,126 (218,982) 4,370,784 84,893
Cash and equivalents, beginning of period 421,371 298,357 31,713 (5,518)
------------------ ------------------ ----------------- ---------------
Cash and equivalents, end of period $ 4,402,497 $ 79,375 $ 4,402,497 $ 79,375
================== ================== = ================ ===============
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
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<PAGE>
NETSOL INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)
Increase (Decrease) in Cash and Cash Equivalents
Forthe Three Months Ended March 31, 2000 & 1999
and For the Nine Months Ended March 31, 2000 & 1999
<TABLE>
<CAPTION>
Three months ended Nine months ended
MARCH 31, MARCH 31,
-------------------------------------- -----------------------------------
2000 1999 2000 1999
------------------ ------------------ ----------------- ---------------
<S> <C> <C> <C> <C>
Supplemental Cash Flow Information:
Cash paid during the period for interest: $ 12,554 $ 4,546 $ 38,585 $ 16,840
================== ================== ================= ===============
Cash paid during the period for income taxes: $ -0- $ -0- $ -0- $ -0-
================== ================== ================= ===============
Supplemental disclosure of non-cash investing
and financing activities:
Issuance of 490,000 shares of common stock
per stock purchase agreement -- -- -- $ 2,523,500
===========================================================================
Issuance of 175,000 shares of common stock
per stock purchase agreement -- -- -- $ 566,000
===========================================================================
Issuance of 4,200,000 shares of common stock
per stock purchase agreements -- $ 7,140,000 $ 1,071,855 $ 7,140,000
===========================================================================
Issuance of common stock shares
for services rendered $ 336,875 $ 138,750 $ 777,500 $ 138,750
===========================================================================
Issuance of 150,000 shares of common stock
for Abraxas acquisition $ 1,710,000 -- $ 1,710,000 --
===========================================================================
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
-7-
<PAGE>
NETSOL INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED MARCH 31, 2000 AND 1999 (UNAUDITED)
PRINCIPLES OF CONSOLIDATION: The accompanying consolidated financial
statements include the accounts of the Company and its wholly owned
subsidiaries, Network Solutions PVT, Ltd., NetSol UK, Ltd., Netsol USA, Inc.,
(formerly Mindsources, Inc.), Network Solutions Group Limited, Abraxas
Software PTY, Ltd., and Netsol eR, Inc. All material inter-company accounts
have been eliminated in consolidation.
BUSINESS COMBINATIONS: During August of 1999, the Company acquired Network
Solutions Group Limited, (a United Kingdom company) and Mindsources, Inc. (a
United States company) in exchange for 155,000 and 250,000 Rule 144
restricted shares of the Company's common stock, respectively. On January 2,
2000, the Company acquired Abraxas Software PTY, Ltd. (Abraxas), a company
organized under the laws of the Country of Australia, in exchange for 150,000
Rule 144 restricted shares of the Company's common stock. All these
acquisitions have been accounted for as purchase transactions and,
accordingly, the fair value of the Company's stock that was issued was
allocated to assets and liabilities based on estimated fair values as of the
acquisition date.
PRIVATE PLACEMENT: The Company sold 611,333 shares of its restricted Rule 144
common stock in the amount of $1,883,313 through private placement offerings
pursuant to Regulation D of the Securities and Exchange Act of 1933.
UNAUDITED PROFORMA CONDENSED STATEMENT OF OPERATIONS:
As reported on Form 8-K, the Company acquired Abraxas. The acquisition was
recorded as a purchase acquisition on January 2, 2000, whereby the Company
acquired 100% of the outstanding capital stock of Abraxas in exchange for
150,000 shares of the Company's restricted common shares valued at
$1,710,000. Abraxas had a negative net equity at December 31, 1999 of
$96,743, resulting in the recording of goodwill in the amount of $1,806,743.
The audited financial statements for the acquired subsidiary were filed on
Form 8-K on January 14, 2000 and on Form 8-K/A on March 14, 2000. Since the
acquisition did not constitute a significant acquisition and the proforma
adjustments related to the acquisition are immaterial to the financial
statement presentation as a whole, proforma financial information, is not
presented.
SUBSEQUENT EVENTS:
The Company acquired SuperNet AG (a German ISP providing high quality,
low-cost Internet-access nationwide in Germany on May 3, 2000. Under the
terms of the definitive agreement, valued at approximately $20 million, the
Company is acquiring all of SuperNet AG's issued and outstanding stock in
exchange for 425,600 shares of the Company's restricted common stock. The
required audited statements and proforma information are currently being
gathered and will be filed on Form 8-K.
On April 25, 2000, the Company announced that its wholly owned subsidiary
NetSol eR, Inc. (eReady) will launch NetSolCONNECT, a nationwide ISP in
Pakistan with plans to commence operations in June of 2000.
On April 4, 2000, the Company named Syed Husain as its chief financial
officer. Mr. Husain will report to President Najeeb Ghauri, who had been
the acting CFO.
<PAGE>
PART 1 - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
THE COMPANY
NetSol International, Inc. ("Company") was incorporated under the laws of the
State of Nevada on March 18, 1997. The Company's address is 5000 North
Parkway Calabasas, Suite 202, Calabasas, California 91302 and its telephone
number is (818) 222-9195.
Effective September 15, 1998, the Company acquired 51% of the outstanding
capital stock of Network Solutions PVT Limited ("NetSol PVT"), a software
development company in Lahore, Pakistan. In addition, the Company purchased
43% of the outstanding capital stock of NetSol (UK) Limited, a corporation
organized under the laws of the United Kingdom ("NetSol UK"), which is a
sister company to NetSol PVT. The Company paid a purchase price for the
increased interest in NetSol and the interest in NetSol UK of $500,000, plus
490,000 shares of common stock of the Company. The Company already owned 10%
of the outstanding capital stock of NetSol PVT.
On April 17, 1999, the Company entered into an agreement with NetSol PVT and
NetSol UK to acquire the remaining 49% of NetSol PVT and 57% of NetSol UK in
exchange for 4.2 million shares of restricted common stock of the Company.
NetSol PVT was incorporated in Pakistan on August 22, 1996, under the
companies ordinance of 1984, as a private company limited by shares. NetSol
PVT's principle business is the design and development on new software
applications and designs.
NetSol PVT has developed several leasing and finance products creating a
market within the finance industry. Currently, NetSol PVT has developed a
fully integrated leasing and finance package, which is a series of seven
products that can be marketed in an integrated system. Mercedes Benz Finance
- - Singapore, Mercedes Benz Leasing - Thailand, Mercedes Benz Finance Ltd. -
United Kingdom and Mercedes Benz Finance - Australia are some of NetSol PVT's
customers which account for a majority of its revenues. In addition, NetSol
provides off shore development and customized Information Technology ("IT")
solutions and has blue chip customers such as ICI of UK, Fuzzy Informatik of
Germany, and 1st Net Technologies, Inc., USA. NetSol PVT has over 250
employees, of which approximately 90% are IT specialized. NetSol PVT is the
first company in Pakistan to achieve ISO 9001 accreditation.
NetSol UK was incorporated in December 1997 under the laws of the United
Kingdom. NetSol UK was established for service and support of customers in
the European markets. In addition, NetSol UK was established to function as a
marketing arm of the Company in Europe.
<PAGE>
PRODUCTS AND PROJECTS IN QUARTER ENDING MARCH 31, 2000
PROJECTS:
The Company's projects in the quarter ending March 31, 2000, include NetSol
USA's development and service agreement with Omnipoint Technologies, Inc.
NetSol USA is to develop software applications with the ability of tracking
key components in the wireless environment. The contract is valued at
$600,000 with an option to renew.
The Company also entered into a partnership with CFS Group PLC of London
(CFS), whereby NetSol in Pakistan will develop and maintain software to be
marketed and distributed by CFS.
Additionally, the Company broke ground on the first phase of development for
its new technology campus in Lahore, Pakistan. The first phase is expected to
be completed by the Fall of 2000.
PRODUCTS:
The Company launched two new products during the quarter ended March 31,
2000. The first product is a Contract Management System (CMS), which
automates and manages contracts at the finance level of a company. The second
, is an electronic Point of Sale system (ePos), which is a browser based
point of sale system that is used by auto dealerships and other outlets. The
electronic point of sale system can be used on the Intranet and is platform
independent.
RESULTS OF OPERATIONS
Three Months Ended March 31, 2000, as compared to the Three Months Ended
March, 31, 1999.
NET SALES
Net sales of $1,858,348 for the third quarter ended March 31, 2000, were
greater than the sales of the same quarter, for the previous year of
$897,759, by $960,589. Likewise, net sales of $4,848,665 for the nine months
ended March 31, 2000, were greater than net sales for same nine month period
of the prior year of $3,421,582, by $1,427,083. The augmented sales levels
are due to the acquisitions of the subsidiaries centralized in Europe and
Asia.
<PAGE>
COST OF SALES AND GROSS PROFIT
The gross profit was $1,132,864 in the quarter ending March 31, 2000. This
favorably compares to a gross profit level of $897,759 for the corresponding
quarter of the previous fiscal year. Additionally, the gross profit for the
current quarter illustrates a consistent gross profit level for each quarter of
this fiscal year. Again, this increase is substantially due to the subsidiaries
operations in Europe and Asia.
OPERATING EXPENSES
Operating expenses were $1,919,625 during the quarter ended March 31, 2000. This
is $938,877 greater than the operating expenses for the same quarter of the
previous fiscal year ended March 31, 1999, of $980,748. This increase was due to
additional acquisition expenses during the quarter and stock issued for services
amounting to $336,875.
The overall net loss per share for the quarter ended March 31, 2000, was
$0.08. This represented an increase of $0.02 per share from the net loss
per share in the same quarter of the previous year.
INTEREST
Net interest expenses paid were $12,554, during the quarter ended March 31,
2000. This compares with $4,546 for the same period in the previous fiscal year,
and is due to an increase in capital lease obligations entered into by the
subsidiaries in Europe and Asia.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary cash requirements are for operating expenses, including
the funding of accounts receivable, labor costs, and raw material purchases. The
Company also has cash requirements for capital expenditures and for the funding
of additional business acquisitions. The Company's primary sources of cash from
operations are from the operations in the United Kingdom, Pakistan, United
States, and Australia.
For the quarter ended March 31, 2000, the overall increase in cash totaled
$3,981,126. This increase was attributable to sales of common shares and
exercising of warrants amounting to $5,805,335, which was in excess of the cash
used for operating and investing activities. The net cash used for operating
activities of $1,440,625, resulted in large part from a decrease in payables of
$1,559,899. The net cash used for investing activities of $401,583 was solely
due to the purchases of property, plant and equipment.
For comparative purposes, the quarter ended March 31, 1999, resulted in a
decrease in cash of $218,982, which was substantially due to the net cash
used by operations of $322,674.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
The Company's current plans require additional capital expenditures for the
remainder of the year of approximately $2,000,000 to support additional
acquisitions and fund additional increases in accounts receivable of the
subsidiaries. During the quarter ended March 31, 2000, the Company had cash of
$5,823,334 provided by financing activities and expects similar capital
infusions in the remaining quarters of this fiscal year.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
To the best knowledge of management and the Company's counsel, there is no
material litigation pending or threatened against the Company.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The Company did not receive any additional proceeds from its Public Offering
since its Annual Report.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
Form 8-K filed on January 14, 2000, for the acquisition of
Abraxas Software (PTY) Ltd.
Form 8-K/A filed on March 14, 2000, for the acquisition of
Abraxas Software (PTY) Ltd. filing audited financial
statements for Abraxas.
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 International, Inc.
Registrant
Date: May 11, 2000 /s/ Najeeb U. Ghauri
----------------------------
NAJEEB U. GHAURI
PRESIDENT
/s/ Syed Husain
----------------------------
SYED HUSAIN
CHIEF FINANCIAL OFFICER
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS 9-MOS 9-MOS
<FISCAL-YEAR-END> JUN-30-2000 JUN-30-2000 JUN-30-2000 JUN-30-2000
<PERIOD-START> JAN-01-2000 JAN-01-1999 JUL-01-1999 JUL-01-1998
<PERIOD-END> MAR-31-2000 MAR-31-1999 MAR-31-2000 MAR-31-1999
<CASH> 4,402,497 0 0 0
<SECURITIES> 0 0 0 0
<RECEIVABLES> 1,942,094 0 0 0
<ALLOWANCES> 0 0 0 0
<INVENTORY> 0 0 0 0
<CURRENT-ASSETS> 7,650,401 0 0 0
<PP&E> 1,032,603 0 0 0
<DEPRECIATION> 0 0 0 0
<TOTAL-ASSETS> 21,434,121 0 0 0
<CURRENT-LIABILITIES> 1,845,126 0 0 0
<BONDS> 0 0 0 0
0 0 0 0
0 0 0 0
<COMMON> 10,476 0 0 0
<OTHER-SE> 19,348,101 0 0 0
<TOTAL-LIABILITY-AND-EQUITY> 21,434,121 0 0 0
<SALES> 1,858,348 897,759 4,848,665 3,421,582
<TOTAL-REVENUES> 0 0 0 0
<CGS> 725,484 0 1,700,329 0
<TOTAL-COSTS> 1,919,625 980,748 5,047,798 4,062,245
<OTHER-EXPENSES> (10,842) 46,713 (39,198) 12,441
<LOSS-PROVISION> 0 0 0 0
<INTEREST-EXPENSE> 0 0 0 0
<INCOME-PRETAX> 0 0 0 0
<INCOME-TAX> 0 0 0 0
<INCOME-CONTINUING> 0 0 0 0
<DISCONTINUED> 0 0 0 0
<EXTRAORDINARY> 0 0 0 0
<CHANGES> 0 0 0 0
<NET-INCOME> (797,603) (173,746) (1,938,660) (933,838)
<EPS-BASIC> (0.08) (0.06) (0.22) (0.37)
<EPS-DILUTED> (0.08) (0.06) (0.22) (0.37)
</TABLE>
