NETSOL TECHNOLOGIES INC

APPROVAL OF AN AMENDMENT OF THE ARTICLES OF INCORPORATION TO INCREASE THE AUTHORIZED SHARES OF CAPITAL STOCK FROM 15,000,000 TO 18,500,000 AND TO INCREASE THE AUTHORIZED NUMBER OF COMMON STOCK FROM 14,500,000 SHARES TO 18,000,000 SHARES OF COMMON STOCK

On April 14, 2025, subject to shareholders’ approval, our Board approved an amendment to our Articles of Incorporation. Our Board is requesting stockholder approval of an amendment to our Articles of Incorporation, to increase the number of authorized shares of capital stock from 15,000,000 to 18,500,00 and to increase the number of common stock from 14,500,000 shares to 18,000,000 shares.

The text of the form of proposed Articles of Incorporation increasing the number of shares of capital stock from 15,000,000 to 18,500,000 and to increase the authorized shares of our common stock from 14,500,000 shares to 18,000,000 is attached to this Proxy Statement as Annex A. If our stockholders approve this Proposal No. 4, we expect to file the Amendment of Articles of Incorporation with the Secretary of State of the State of Nevada as soon as practicable following stockholder approval. Upon filing of the Articles of Amendment with the Secretary of State of the State of Nevada, the first sentence of the Second Article of our Amendment will read as follows:

“THREE: The Corporation shall be authorized to issue 18,500,000 shares of capital stock of which 18,000,000 shares shall be shares of Common stock, $.01 par value (“Common Stock”) and 500,000 shares shall be shares of Preferred Stock, $.01 par value (“Preferred Stock.”).

Our Articles of Incorporation currently authorizes the issuance of up to 15,000,000 shares of capital stock, consisting of 14,500,000 shares of common stock, par value $.01 per share, and 500,000 shares of preferred stock, par value $.01 per share. An increase in the number of authorized shares of our common stock to 18,000,000 shares will increase our total authorized capitalization to 18,500,000, which includes our previously authorized 500,000 shares of preferred stock.

Of the 14,500,000 shares of our common stock currently authorized, as of the close of business on April 30, 2025, there were 11,709,543 shares of common stock issued and outstanding. There are no shares of preferred stock issued and outstanding

The Board has approved the proposed increase in authorized common stock for the primary purpose of bringing our capital structure in line with those of similarly situated companies with respect to shares of common stock available for issuance as a percentage of total authorized shares. Although, at present, the Board has no immediate plans to issue the additional shares of common stock, it desires to have the shares available to provide additional flexibility to use our common stock for business and financial purposes in the future. The additional shares may be used for various purposes without further stockholder approval. These purposes may include raising capital; establishing strategic relationships with other companies; expanding our business through the acquisition of other businesses, products or technologies; and other purposes. If this Proposal No. 4 is not approved by our stockholders, it is possible that our financing and business development alternatives may be limited by the lack of unissued and unreserved authorized shares of common stock, and stockholder value may be harmed by this limitation. In short, if our stockholders do not approve this Proposal No. 4, we may not be able to access the capital markets, complete corporate collaborations or partnerships, and pursue other business opportunities integral to our growth and success.

The additional common stock to be authorized by stockholder approval of this Proposal 4 would have rights identical to the currently outstanding shares of our common stock. Approval of this Proposal 4 and issuance of the additional authorized shares of common stock would not affect the rights of the holders of currently outstanding shares of our common stock, except for effects incidental to increasing the number of shares of our common stock outstanding, such as dilution of any earnings per share and voting rights of current holders of common stock. The additional shares of common stock authorized by the approval of this Proposal 4 could be issued by the Board without further vote of our stockholders except as may be required in particular cases by our Amended Articles of Incorporation, applicable law, regulatory agencies or the NASDAQ listing standards. Under our Amended Articles of Incorporation, stockholders do not have preemptive rights to subscribe to additional securities that we may issue, which means that current stockholders do not have a prior right there under to purchase any new issue of common stock in order to maintain their proportionate ownership interests in NetSol.

Once Proposal 4 is passed by the stockholders, the Board of Directors have the authority to increase the number of authorized shares of stock of the Company.

The proposed amendment to our Amendment of Articles of Incorporation to increase the number of authorized shares of our common stock could, under certain circumstances, have an anti-takeover effect. The additional shares of common stock that would become available for issuance if this Proposal 4 is approved could also be used by us to oppose a hostile takeover attempt or to delay or prevent changes in control or our management. For example, without further stockholder approval, the Board could strategically sell shares of common stock in a private transaction to purchasers who would oppose a takeover or favor the current Board. Although this proposal to increase the authorized common stock has been prompted by business and financial considerations and not by the threat of any hostile takeover attempt (nor is the Board currently aware of any attempts directed at us), stockholders should be aware that approval of this Proposal 4 could facilitate future efforts by us to deter or prevent changes in control, including transactions in which the stockholders might otherwise receive a premium for their shares over then current market prices.

Your board unanimously recommends a vote “FOR” the amendment of our articles of incorporation to increase the number of authorized shares of capital stock from 15,000,000 to 18,500,000 and to increase the number of authorized shares of common stock from 14,500,000 shares to 18,000,000 for the following reasons:

● Provides necessary flexibility in our corporate planning in responding to developments in our business, including possible financing and acquisition transactions, common stock splits or dividends and for other general corporate purposes,

**●**No current plan to issue additional shares, but it is important for management to have additional capital stock available in order to address new initiatives without undue delay or cost.

Approval of this proposal requires the affirmative vote of the holders of a majority of the outstanding shares of our common stock.

THE COMPANY’S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE AMENDMENT OF THE ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF CAPITAL STOCK FROM 15,000,000 TO 18,500,000 AND INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FROM 14,500,000 TO 18,000,000 SHARES