CALABASAS, Calif., Oct. 3, 2013 (GLOBE NEWSWIRE) -- NetSol Technologies, Inc. (Nasdaq:NTWK), a worldwide provider of global IT and enterprise application solutions, today issued the following statement in response to an article published Wednesday, October 2, 2013 in Seeking Alpha:
R&D Expense: When modeling the company and calculating research and development expense, the author fails to include amortization from the past year. In fact, by not including it, an investor would be double counting, a fundamental error. NetSol has capitalized costs for all projects that have established technological feasibility.
Accounts Receivable: The author erroneously aggregates the accounts receivable and revenues in excess of billings when calculating Days Sales Outstanding (DSO). Furthermore, the author is misleading in his description of NetSol's accounts receivable because he does not factor the payment cycles of customers in foreign countries, many of which are Fortune 500 manufacturers, global automakers, and financial institutions. In addition, a majority of NetSol's customers are in Asia where the duration of payment cycles are longer than in the United States. NetSol continues to report a decrease in DSO. For the period ended June 30, 2013, DSO was 106, compared with 127 days in the corresponding period last year.CFO and Auditors: NetSol has been a publicly traded company for more than a decade and has full confidence in its financial staff, which must undergo rigorous due diligence checks. NetSol hired its new CFO for his breadth of accounting and finance experience. He is a certified public accountant, with nearly 20 years of experience working in accounting, 13 of which were in public accounting. The author notes that NetSol's CFO has only 13-plus years of experience without citing his other work experience. The author also draws misleading connections between the CFO's firm and various companies. Additionally, NetSol's auditors were approved by shareholders and have a strong presence in Pakistan, an important characteristic for the company. They, like other accounting firms across the industry, have encountered challenges with China-based reverse mergers.