The notes, which mature one year from the date of issuance, will be converted into Series A cumulative convertible preferred stock upon shareholder approval. Maxim Group LLC served as the exclusive placement agent for the transaction.

"We are pleased to announce the completion of this capital raise," said NetSol Chairman, Najeeb U. Ghauri. "The transaction will serve as a springboard for our growth strategy, driving the integration of our acquisition of CQ Systems and McCue Systems, and providing the necessary working capital for our continued global expansion."

The shares of preferred stock which may be issued in the financing, as well as the shares of common stock underlying the convertible notes or the preferred stock and the warrants issued in the financing have not been registered under the Securities Act of 1933, as amended. Accordingly, these shares may not be offered or sold in the United States, except pursuant to the effectiveness of a registration statement or an applicable exemption from the registration requirements of the Securities Act. Under the terms of the financing, NetSol is obligated to file a proxy statement seeking shareholder approval of the conversion of the note into the preferred and the conversion feature of the preferred stock, within 30 days of closing. The company is also obligated to file a registration statement covering the shares of common stock into which the note is convertible, and the common stock underlying the preferred stock and warrants.