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NetSol International Gets $1 Million Boost in Stock Sale

NetSol International Gets $1 Million Boost in Stock Sale Media & Technology by Carlos Martinez Calabasas-based software maker NetSol International Inc. has secured $1.1 million in new funding in a stock deal that gives Red Sea Ltd., an investment banking firm, about 10 percent of the company’s stock. “We hope to build some positive momentum through this alliance that will greatly benefit the company in 2002,” said Naeem Ghauri, NetSol’s CEO. He said the contract will give his company much-needed capital to develop its business after it was forced to shut down for a month in June due to a proxy fight with a group of shareholders over who would control the company. Besides the capital, Ghauri said, the pact gives NetSol access to Red Sea’s contacts in the Middle East and Asia to further develop its software and IT products. “Gaining access to build business relationships is an important part of this agreement,” he said. Under the deal, Red Sea purchased 3 million shares and warrants at 38 cents apiece. Red Sea will pay $440,000 for the shares in the next two months, with an additional $700,000 to be paid upon exercising the warrants sometime in the next 12 months. At the end of last week, NetSol’s stock was trading at about 41 cents a share. For the fiscal year ended June 30, NetSol lost $14.1 million on $6.7 million in total revenue, compared to a $3.4 million loss on $7 million in revenue a year earlier. Meanwhile, the company last week agreed to a partnership deal with Askari Information Systems Ltd. of India to become its main outsourcing partner. NetSol would not say how much additional revenue it expects from the deal. Sabeus Plans Consolidation Chatsworth-based Sabeus Photonics Inc. says it plans to close its Long Beach plant by the end of the year and bring the 60 employees it has there to its new facility on Nordhoff Avenue. Sabeus CEO Andre De Fusco said work will be phased out at the plant where the bulk of its fiber optics manufacturing is now being done. De Fusco said the new Chatsworth facility’s remodeling is nearly complete. He said the company plans to begin manufacturing low-cost fiber optic components through its proprietary process that would eventually help speed the spread of fiber optics networks. High Hopes for Defragger Executive Software International says the new 7.0 version of its Diskeeper defragmenter software could be worth $200 million to the Burbank-based company over the next two years. Rudi C. Loehwing, Executive Software director of public affairs, said the new software gives system management administrators the chance to defrag PCs remotely, without having to defrag each network PC manually. “There’s nothing else like it,” Loehwing said, adding that if the company revenue projections are accurate, it would easily be the company’s biggest seller. The company grossed $33 million in 2000. Loehwing said the software defrags large amounts of data and reorganizes it in order to restore system speed in minutes, rather than hours, unlike other defragmenting software. Computer files are often fragmented and located throughout a disk, making it difficult to access needed files. He said that only in recent years have system management administrators recognized the value of defragmentation. When a system slowed, most would just add memory or more CPUs, he said. “But today, people recognize defragmentation is important,” Loehwing said. Key Code Media Cited Key Code Media Inc. of Burbank has received the Premier Gold Reseller Award by Massachusetts-based Avid Technology Inc. Key Code was cited by Adam Taylor, Avid’s vice president of sales, for its work in service and performance record on deliveries of Avid’s digital film editing and sound equipment. Key Code provides equipment for digital video production, systems integration, service and training for the motion picture, television, corporate and government markets. The company also has offices in Irvine and Seattle. More Kudos Chatsworth Products Inc., an employee-owned firm, has won Business Ethics Magazine’s Employee Ownership Award. The Minneapolis-based publication cited the company for “providing a decade of leadership in promoting employee ownership, both inside and outside the company.” “It confirms what we have held dear for more than a decade things like ethics, corporate responsibility and a family work environment,” said Terry Tyndall, vice president of human resources. The company was established in 1991 and makes racks, cabinets and cables for computer and other electronic equipment. Optimistic About 2002 Fred Sturm, CEO of California Amplifier Inc., a Camarillo-based satellite communications company, said he’s looking forward to improved earnings in 2002, after his company’s revenue declined during its most recent quarter. “You have to be optimistic,” said Sturm, after the company posted $1.4 million in net income on revenue of $24.7 million during the second quarter ended Nov. 30, compared to $1.8 million net income on revenue of $30.9 million in the same quarter a year earlier. The company’s declining numbers, he said, were due largely to cutbacks in purchases by Sprint, one of its biggest customers. Earlier this year, Sprint suspended plans to expand its broadband business in anticipation of lower revenues. Cal Amp’s woes, however, were compounded by 20 class-action lawsuits filed against it because of overstated net income figures. The company agreed to settle the cases for $1.5 million. Sturm said he agreed to settle the lawsuits rather than risk high legal costs in battling them. Sturm said he believes wireless broadband services will begin to grow in 2002 and continue into 2003, helping to push his company’s revenue. Staff reporter Carlos Martinez can be reached at (818) 676-1750 ext. 17 or by e-mail at cmartinez@sfvbj.com

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