What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2021-09-28 compared with 2020-09-28 · 589 added, 626 removed, 163 unchanged (88% of the section changed)

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INFORMATION - Common stock of NetSol Technologies, Inc.

is listed and traded on NASDAQ Capital Market under the ticker symbol

“NTWK”.

table shows the high and low intra-day prices of the Company’s common stock as reported on the composite tape of the NASDAQ

for each quarter during the last two fiscal years.

is listed and traded on NASDAQ Capital Market under the ticker symbol “NTWK”.

table shows the high and low intra-day prices of the Company’s common stock as reported on the composite tape of the NASDAQ for

each quarter during the last two fiscal years.

Fiscal Year 2021

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Fiscal Year 2020

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

HOLDERS - As of September 16, 2021, the number of holders of record of the Company’s common stock was 144.

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securities to

Weighted average

exercise price of

options, warrants

of securities

Number of securities

available for

future issuance

Equity Compensation

Plans approved by

Security holders

Equity Compensation

Plans not approved by

Security holders

20,386 available for issuance under the 2005 Incentive and Nonstatutory Stock Option Plan, 98,196 under the 2013 Incentive

and Nonstatutory Stock Option Plan and 306,422 under the 2015 Incentive and Nonstatutory Stock Option Plan.

of June 30, 2020, 66,421 shares of common stock that have been granted as compensation, but have not yet vested.

20,386 available for issuance under the 2005 Incentive and Nonstatutory Stock Option Plan, 98,196 under the 2013 Incentive and Nonstatutory

Stock Option Plan and 306,422 under the 2015 Incentive and Nonstatutory Stock Option Plan.

of June 30, 2021, 6,985 shares of common stock have been granted as compensation, but have not yet vested.

RECENT SALES OF UNREGISTERED SECURITIES

ISSUER PURCHASES OF EQUITY SECURITIES

July 30, 2020, the Company’s, Board of Directors authorized the repurchase of up to two million dollars’

of the Company’s issued and outstanding common shares.

The repurchase plan is authorized commencing July 30, 2020,

and ending December 24, 2020, subject to an additional six-month extension at the discretion of management.

shares were repurchased during fiscal year 2020, the Company purchased 147,052 shares at an average price of $3.16 per share subsequent

to the fiscal year ended June 30, 2020.

SELECTED FINANCIAL DATA

repurchases provided in the table below were made through the year ended June 30, 2021:

Issuer Purchases of Equity Securities (1)

Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs

Maximum Number of Shares that may be Purchased Under the Plans or Programs

The Board of Directors approved a repurchase of shares up to $2,000,000 on July 30, 2020.

All shares permitted to be purchased under

this July 2020 plan were purchased during the plan’s original date and prior to the conclusion of the extension of the plan.

May 21, 2021, the Board of Directors authorized an additional repurchase plan of up to $2,000,000 worth of shares of common stock.

plan was authorized commencing May 21, 2021 through November 20, 2021 subject to an additional six months extension at the discretion

of management.

As of June 30, 2021, the total number of shares that could be purchased under both plans was 849,256.

The actual maximum

number of shares will vary depending on the actual price paid per share purchased.

The Company purchased a cumulative 669,018 shares

of its common stock from the open market for cash proceeds of $2,364,781 at an average price of $3.53 per share during fiscal year ended

June 30, 2021 from both repurchase plans.

7- MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

following discussion is intended to assist in understanding our financial position and results of operations for the year ended

June 30, 2020.

It should be read together with our consolidated financial statements and related notes included under Item 8 of

this Annual Report on Form 10-K.

following discussion is intended to assist in understanding our financial position and results of operations for the year ended June

It should be read together with our consolidated financial statements and related notes included under Item 8 of this Annual

Report on Form 10-K.

few of our highlights for the fiscal year ended June 30, 2021 were:

acquired the remaining stake in Virtual Lease Services, a UK-based portfolio and risk management servicing partner for business

and consumer finance providers.

By acquiring the remaining stake, NETSOL became the outright owner of the organization.

to the demand for the Company’s premier solution NFS Ascent’s ®

Wholesale Platform in Europe, NETSOL

appointed Chris Mobley as Head of NFS Ascent ®

Wholesale Operations in Europe.

Mobley brings over two decades

of industry experience to NETSOL with an accomplished background and domain-specific knowledge and expertise within the wholesale

finance space.

announced the SaaS or subscription-based pricing model for our global markets in addition to its existing license options.

All global contracts now provide NETSOL customers with the option for subscription-based pricing as an alternative to the

traditional license model.

This Software-as-a-Service (SaaS) pricing option is now available for all cloud-based NETSOL products

and services, including NETSOL’s core, next-gen solution NFS Ascent ®

signed a multi-million-dollar agreement with a large UK vehicle finance company to implement its NFS Ascent ®

Wholesale Platform.

This agreement pertains to accessing NFS Ascent ®

Wholesale Finance System (WFS) via subscription-based

pricing, the dynamic pricing model that NETSOL has introduced in all operating regions in response to growing demand for this

This monumental implementation marked the first roll-out of NFS Ascent ®

in the United Kingdom.

signed an agreement with a bank in the United Kingdom for NFS Ascent ®

on the cloud.

This contract covers the

implementation of NFS Ascent’s ®

Retail platform, including its Omni Point of Sale solution (Omni POS)

and Contract Management System (CMS).

Similar to the previous contract with a large independent used vehicle finance company

in the United Kingdom, implementation is expected in less than six months, enabling the bank to gain value from Ascent’s

technology in the shortest possible timeframe and setting a new standard for time to deployment in the industry.

agreement not only validates increasing traction and demand for NFS Ascent ®

in the United Kingdom, but also

its European market readiness.

announced its first North American customer for NFS Ascent ®

This was done as the company secured a contract

with SCI Lease Corp, a Canadian-based national automotive leasing company, for the deployment of its NFS Ascent ®

Contract Management System (CMS) on the cloud.

This contract represented NETSOL’s first official sale of NFS Ascent ®

in the North American market and also the first Software-as-a-Service (SaaS) based agreement for Ascent in this region.

major American multinational automaker went live in China with NETSOL’s next-gen solution NFS Ascent’s ®

Lease Corp, our first North American Ascent™

customer, successfully went live with NFS Ascent ®

Minshall was appointed Executive Vice President for NetSol Technologies Americas.

leading captive finance company of a notable U.S.

based auto manufacturer went live with LeasePak cloud.

NETSOL’s

based mobility startup, Otoz TM , launched its digital automotive retail platform for BMW Group Financial Services

for its key brand Mini Anywhere.

This represents NETSOL’s first retail platform solution in the North American

market for Mini dealerships.

Financial Services went live with NFS Ascent ®

Retail Platform on a single code, single instance and involving

multi-tenancy setup in Singapore.

Daimler also went live with our NSF Ascent ®

Retail Platform in Thailand and began

the implementation process of our NSF Ascent ®

Retail Platform in New Zealand and Australia.

entered into an agreement with an existing tier one finance company in China for them to upgrade to our NFS Ascent ®

and Wholesale platforms.

The contract is expected to generate approximately $9,000,000 during the contract term.

Captive auto finance company of a leading German Auto manufacturer based in China went successfully live with our NFS Ascent ®

Retail Platform.

This deployment covered the complete Ascent ®

Retail Platform, which includes its Omni-Point

of Sale (Omni-POS) and Contract Management System (CMS).

This multi-million-dollar contract marked the second successful implementation

of NETSOL’s next-gen product NFS Ascent ®

went live with its NFS Ascent ®

Wholesale Platform with BMW Automotive Finance in China.

This second largest

customer has a strong presence in China as well as the rest of the Asia-Pacific region, and this deployment was part of a

previously announced $30 million contract in which NETSOL was selected as the vendor of choice after an extensive evaluation

went live with its NFS Digital Mobile Collector application for a top tier multi-finance company in Indonesia.

This mCollector

go-live, which was part of a larger contract originally signed in 2018, was carried out to improve the client’s existing

business practices through the use of new digital technology.

part of the previously announced $100 million plus contract with Daimler Financial Services, the largest signing in NETSOL’s

history, for implementations in 12 countries, NFS Ascent ®

went live in Hong Kong.

NETSOL implemented its NFS

Retail Platform, consisting of its Omni Point of Sale (Omni POS) and Contract Management System (CMS),

for this existing customer.

part of the DFS contract, the Company’s next-gen solution NFS Ascent ®

also went live in Malaysia.

implementation consisted of the full suite of NFS Ascent ®

, including its Omni Point of Sale (Omni POS) and

Contract Management System (CMS), as well as its Wholesale Finance System (WFS).

Malaysia marked the ninth deployment to go

live following successful implementations in Japan, China, South Africa, Thailand, New Zealand, Australia, South Korea, and

This series of deployments constitutes the largest and most prestigious contract signing in NETSOL’s history.

to NETSOL’s wholly-owned subsidiary Otoz, as the first in a number of planned rollouts, the new mobility technology

startup announced the creation of an Ai-powered chatbot that is intended to cater to renters and car owners, which will be

integrated into the current Drivemate chat application LINE.

Otoz also provided further information regarding its ongoing

strategic partnership with Drivemate, the leading peer-to-peer car-sharing service in Thailand.

also announced a pilot car-sharing program with an existing tier-one European auto captive finance customer in China.

of the program, thousands of the auto captive’s employees will be eligible to use flexible car-sharing products, all

of which will be deployed on the Otoz platform.

Among the many use cases and trials being conducted, Otoz will enable options

for flexible car rentals as well as peer-to-peer car-sharing and other subscription-based programs.

and WRLD3D introduced NXT - a smart workplace platform to support

companies to return to work safely.

rapidly growing U.K.

bank serving small and medium-sized enterprises has successfully gone live with the NFS Ascent ®

This is our first go live of an NFS Ascent ®

Retail client in the U.K.

entered into an agreement with a renowned financial services company in the U.S.

to implement LeasePak, one of our legacy solutions.

The contract is expected to generate approximately $1,000,000 over the life of the contract.

leasing division of a mid-sized regional bank in the U.S.

went live with the SaaS version of our LeasePak solution.

started the NFS Ascent ®

Retail implementation process for the subsidiary of a leading German Auto Manufacturer

based in South Korea.

signed an agreement with Motorcycle Group “Motolease”

to deploy our cloud-based version of our NFS Ascent ®

This agreement is the first official sale for NFS Ascent ®

generated approximately $2,100,000 of license revenue with the renewal of our NFS CAP and CMS legacy solutions with an existing customer

generated approximately $1,400,000 of license revenue from an existing customer due to the increase in contracts being serviced on

their system.

effectively executed the share buyback plan with the purchase of 669,018 shares during the 2021 Fiscal Year.

and Business Development Activities

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growth strategy contemplates the following enhanced activities and initiatives to accomplish these goals:

strong C-level executive teams in each key location to execute our long-term strategy.

strong C-level executive professional teams in each key location to execute our long-term strategy.

groom and retain the next tier level management for leadership to navigate long term growth.

Bangkok and Beijing offices to support the growing and existing client relationships and new client acquisitions in the region.

the NETSOL brand in the Americas and Europe and further penetrate the APAC markets such as China, Thailand, Indonesia, Japan,

Australia and New Zealand.

the NETSOL brand in the Americas and Europe and further penetrate the APAC markets such as China, Thailand, Indonesia, Japan, Australia

and New Zealand.

the quality of our delivery, after delivery support, and client relationships.

penetration of NFS Ascent ®

into the leasing and financing sectors in China, APAC, Europe and North America

by focusing on multi-national auto captive Fortune 500 companies.

a well thought out strategy to diversify into complimentary verticals by way of organic expansion, partnerships and synergistic

into the leasing and financing sectors in China, APAC, Europe and North America by focusing

on multi-national auto captive Fortune 500 companies.

a well thought out strategy to diversify into complimentary verticals by way of organic expansion, partnerships and synergistic M&A.

to implement new tools, systems and processes, such as JIRA, and the Agile framework to further enhance productivity, efficiencies

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at subscription-based pricing models to generate additional interest from prospects.

investing in Otoz and our innovation lab to generate new verticals for the business.

investing in Otoz TM and our innovation lab to generate new verticals for the business.

Prospects for NFS Ascent ®

prospects for NFS Ascent ®

are linked to the maturing of the product portfolio and its growing customer base across

different geographic and product markets.

are linked to the maturing of the product portfolio and its growing customer base across different

geographic and product markets.

We are eyeing key international markets for growth in sales.

Our sales strategy now

carefully balances expansion into new geographic markets, including the Americas, Europe, and further penetration of our leading

position in Asia Pacific.

Our sales strategy now carefully balances

expansion into new geographic markets, including the Americas, Europe, and further penetration of our leading position in Asia Pacific.

in North America is expected to come from the potential market for replacement of legacy systems.

NFS Ascent ®

aimed at providing a highly flexible and robust solution based on the latest technology and advanced architecture for the North

American customers looking to replace their legacy systems.

at providing a highly flexible and robust solution based on the latest technology and advanced architecture for the North American customers

looking to replace their legacy systems.

We believe that NFS Ascent ®

can provide substantial

competitive disruption to the market’s lagging technology provided by incumbent vendors.

The existing customer base may

also represent latent demand for increased service and maintenance revenues by offering business process optimization, customization

and upgrade services.

can provide substantial competitive disruption to

the market’s lagging technology provided by incumbent vendors.

The existing customer base may also represent latent demand for

increased service and maintenance revenues by offering business process optimization, customization and upgrade services.

in Europe will come from the introduction of NFS Ascent ®

, which will allow NTE to support larger organizations

than those typically selecting the existing LeaseSoft product set, and opens the door for European expansion.

This is designed

to attract larger license and professional services revenues across a wider geography.

In addition, leveraging the core strengths

of NFS Ascent ®

, which will allow NTE to support larger organizations than those

typically selecting the existing LeaseSoft product set, and opens the door for European expansion.

This is designed to attract larger

license and professional services revenues across a wider geography.

In addition, leveraging the core strengths of NFS Ascent ®

will increasingly provide opportunities in the automotive sector where NTE is currently underrepresented.

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in related banking and commercial lending areas.

At the same time, the existing customer base is tapped for increased service

and maintenance revenues by offering enhanced features and new solutions to emerging customer needs.

In addition, there is a potential

for NFS Ascent ®

in Asia Pacific in the form of existing customers who are looking for replacement of their current

At the same time, the existing customer base is tapped for increased service and maintenance

revenues by offering enhanced features and new solutions to emerging customer needs.

In addition, there is a potential for NFS Ascent ®

in Asia Pacific in the form of existing customers who are looking for replacement of their current system.

China, we are a de facto leader in the leasing and finance enterprise solution domain.

With this position, we continue to enjoy

demand for the current NFS™

With this position, we continue to enjoy demand

for the current NFS™

solution, as well as NFS Ascent ®

We will continue strengthening our position

within existing multinational auto manufacturers, as well as, local Chinese captive finance and leasing companies.

auto leasing market is young and low on consumer penetration in comparison with the giant U.S.

Thailand, we established a sales headquarters, client service center, as well as a headquarters for OTOZ.

The NetSol Thai operation

is the hub for our global markets and directly supports all APAC markets including China, Indonesia and Australia.

Our operation

in Bangkok serves a very robust and growing market for leasing companies and regional banks.

We will continue strengthening our position within existing

multinational auto manufacturers, as well as, local Chinese captive finance and leasing companies.

The Chinese auto leasing market is

young and low on consumer penetration in comparison with the giant U.S.

Thailand, we established a sales headquarters, client service center, as well as a headquarters for Otoz TM .

Thai operation is the hub for our global markets and directly supports all APAC markets including China, Indonesia and Australia.

operation in Bangkok serves a very robust and growing market for leasing companies and regional banks.

TRENDS AFFECTING NETSOL

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Cloud demand for our solution is on the rise.

COVID-19 has created new dynamics for businesses and corporations with employees and executives working from home.

the decreased office and maintenance costs, as well as the sharply reduced travel expenses, should positively impact our financials.

has created new dynamics for businesses and corporations with employees and executives working from home.

Essentially, the decreased

office and maintenance costs, as well as the sharply reduced travel expenses, should positively impact our financials.

is creating new opportunities for our R&D teams to expand and monetize mobile and digital solutions in our space and complementary

developing markets, new interests are emerging from existing clients for upgrades and mobility platforms.

opportunities and dynamics of shared car ownership either through ride hailing and car sharing encouraging our innovation

and development tools.

platform is showing positive trajectory of interest from existing and new auto leasing and Tier 1 companies in all of our

markets, including China, the US and Europe.

opportunities and dynamics of shared car ownership either through ride hailing and car sharing encouraging our innovation and development

platform is showing positive trajectory of interest from

existing and new auto leasing and Tier 1 companies in all of our markets, including China, the US and Europe.

stability in US and Pakistan relationship boosting confidence and trade relations.

China Pakistan Economic Corridor (CPEC) investment, initiated

by China, has exceeded $62 billion investment from the originally planned $46 billion on Pakistan energy and infrastructure sectors.

China’s

China Pakistan Economic Corridor (CPEC) investment has exceeded $62 billion investment from the originally planned $46 billion

on Pakistan energy and infrastructure sectors.

auto sector remains strong as our customers are constantly demanding ‘Change Requests’

or additional services

and reflects resilience.

has caused a global recession that will adversely impact every one of our business sectors.

OEMs and auto sectors are experiencing major slowdown due to lockdowns and health concerns.

auto sector remains strong as our customers

are constantly demanding ‘Change Requests’

or additional services and reflects resilience.

degree to which the COVID-19 pandemic impacts our future business globally, results of operations and financial condition will depend

on future developments, which are uncertain, including but not limited to the duration, spread and severity of the pandemic, the

availability, adoption and efficacy of vaccines, government responses and other actions to mitigate the spread of and to treat COVID-19,

and when and to what extent normal business, economic and social activity and conditions resume.

are unable to predict the extent to which the pandemic impacts our customers and other partners and their financial conditions, but

adverse effects on these parties could also adversely affect us.

OEMs and auto sectors are experiencing a major slowdown due to lockdowns and health concerns.

C-level decision making to acquire new systems or even upgrade will be elongated due to uncertainty of the COVID-19 virus.

steep drop of global oil prices reflects a sudden drop in transportation, air travels and road travels.

The lockdowns worldwide

present layers of challenges for every business worldwide.

and China trade conflicts tend to further aggravate the global business environment.

from office poses its own risk of virus spread until it vanishes completely.

outlook for auto sector is uncertain if the recessionary impact worsens.

This might cause delay or procrastination on decision

making by our customers.

activities have been reduced dramatically particularly global and regional industry conferences.

The indications it will be

quite some time before these marketing activities can resume.

to travel restrictions caused by COVID-19, it is increasingly difficult to conduct face to face meetings for global clients and new

prospects removing the personal connection essential to some decision making.

COVID-19 pandemic has adversely affected live industry conferences and events, such as those held by the Equipment Leasing and Finance

Association (ELFA), reducing leads and market exposure.

from the office poses its own risk of virus spread until it vanishes completely.

actions, including trade protection and national security policies of the U.S.

and Chinese governments, such as tariffs or bans could

in the future limit or prevent companies from transacting business with China and aggravate the global business environment.

ACCOUNTING POLICIES

financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United

States (“U.S.

financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States

GAAP”).

Preparing financial statements requires management to make estimates and assumptions that affect

the reported amounts of assets, liabilities, revenue, and expenses.

These estimates and assumptions are affected by management’s

application of accounting policies.

Critical accounting policies for us include revenue recognition and multiple element arrangements,

intangible assets, software development costs, and goodwill.

Preparing financial statements requires management to make estimates and assumptions that affect the reported

amounts of assets, liabilities, revenue, and expenses.

These estimates and assumptions are affected by management’s application

of accounting policies.

Critical accounting policies for us include revenue recognition and multiple element arrangements, intangible

assets, software development costs, and goodwill.

Company determines revenue recognition through the following steps:

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of revenue when, or as, the Company satisfies a performance obligation.

Company records the amount of revenue and related costs by considering whether the entity is a principal (gross presentation)

or an agent (net presentation) by evaluating the nature of its promise to the customer.

Revenue is presented net of sales, value-added

and other taxes collected from customers and remitted to government authorities.

Company records the amount of revenue and related costs by considering whether the entity is a principal (gross presentation) or an agent

(net presentation) by evaluating the nature of its promise to the customer.

Revenue is presented net of sales, value-added and other

taxes collected from customers and remitted to government authorities.

Company has two primary revenue streams:

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Company generates its core revenue from the following sources:

(1) software licenses, (2) services, which include implementation

and consulting services, and (3) maintenance, which includes post contract support, of its enterprise software solutions for the

lease and finance industry.

(1) software licenses, (2) services, which include implementation and

consulting services, and (3) subscription and support, which includes post contract support, of its enterprise software solutions for

the lease and finance industry.

The Company offers its software using the same underlying technology via two models:

a traditional

on-premises licensing model and a subscription model.

The on-premises model involves the sale or license of software on a perpetual

basis to customers who take possession of the software and install and maintain the software on their own hardware.

subscription delivery model, the Company provides access to its software on a hosted basis as a service and customers generally

do not have the contractual right to take possession of the software.

a traditional on-premises

licensing model and a subscription model.

The on-premises model involves the sale or license of software on a perpetual basis to customers

who take possession of the software and install and maintain the software on their own hardware.

Under the subscription delivery model,

the Company provides access to its software on a hosted basis as a service and customers generally do not have the contractual right

to take possession of the software.

Company generates its non-core revenue by providing business process outsourcing (“BPO”), other IT services and internet

performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account

under Topic 606.

The transaction price is allocated to each distinct performance obligation and recognized as revenue when, or

as, the performance obligation is satisfied by transferring the promised good or service to the customer.

The Company identifies

and tracks the performance obligations at contract inception so that the Company can monitor and account for the performance obligations

over the life of the contract.

Company’s contracts which contain multiple performance obligations generally consist of the initial purchase of subscription

or licenses and a professional services engagement.

License purchases generally have multiple performance obligations as customers

purchase maintenance and services in addition to the licenses.

The Company’s single performance obligation arrangements

are typically maintenance renewals, subscription renewals and services engagements.

performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account under

The transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance

obligation is satisfied by transferring the promised good or service to the customer.

The Company identifies and tracks the performance

obligations at contract inception so that the Company can monitor and account for the performance obligations over the life of the contract.

Company’s contracts which contain multiple performance obligations generally consist of the initial purchase of subscription or

licenses and a professional services engagement.

License purchases generally have multiple performance obligations as customers purchase

post contract support and services in addition to the licenses.

The Company’s single performance obligation arrangements are typically

post contract support renewals, subscription renewals and services engagements.

contracts with multiple performance obligations where the contracted price differs from the standalone selling price (“SSP”)

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obligation using its best estimate for the SSP.

revenue is recognized ratably over the initial subscription period committed to by the customer commencing when the product is

made available to the customer.

revenue is recognized ratably over the initial subscription period committed to by the customer commencing when the product is made available

to the customer.

The initial subscription period is typically 12 to 60 months.

The Company generally invoices its

customers in advance in quarterly or annual installments and typical payment terms provide that customers make payment within

30 days of invoice.

The Company generally invoices its customers in advance

in quarterly or annual installments and typical payment terms provide that customers make payment within 30 days of invoice.

of control for software is considered to have occurred upon delivery of the product to the customer.

The Company’s typical

payment terms tend to vary by region, but its standard payment terms are within 30 days of invoice.

from support services and product updates, referred to as maintenance revenue, is recognized ratably over the term of the maintenance

period, which in most instances is one year.

Software license updates provide customers with rights to unspecified software product

updates, maintenance releases and patches released during the term of the support period on a when-and-if available basis.

The Company’s typical payment

terms tend to vary by region, but its standard payment terms are within 30 days of invoice.

Contract Support

from support services and product updates, referred to as subscription and support revenue, is recognized ratably over the term of the

maintenance period, which in most instances is one year.

Software license updates provide customers with rights to unspecified software

product updates, maintenance releases and patches released during the term of the support period on a when-and-if available basis.

Company’s customers purchase both product support and license updates when they acquire new software licenses.

a majority of customers renew their support services contracts annually and typical payment terms provide that customers make

payment within 30 days of invoice.

from professional services is typically comprised of implementation, development, data migration, training or other consulting

Consulting services are generally sold on a time-and-materials or fixed fee basis and can include services ranging from

software installation to data conversion and building non-complex interfaces to allow the software to operate in integrated environments.

The Company recognizes revenue for time-and-materials arrangements as the services are performed.

In fixed fee arrangements, revenue

is recognized as services are performed as measured by costs incurred to date, compared to total estimated costs to complete the

services project.

Management applies judgment when estimating project status and the costs necessary to complete the services

A number of internal and external factors can affect these estimates, including labor rates, utilization and efficiency

variances and specification and testing requirement changes.

Services are generally invoiced upon milestones in the contract or

upon consumption of the hourly resources and payments are typically due 30 days after invoice.

In addition, a majority

of customers renew their support services contracts annually and typical payment terms provide that customers make payment within 30

days of invoice.

from professional services is typically comprised of implementation, development, data migration, training or other consulting services.

Consulting services are generally sold on a time-and-materials or fixed fee basis and can include services ranging from software installation

to data conversion and building non-complex interfaces to allow the software to operate in integrated environments.

The Company recognizes

revenue for time-and-materials arrangements as the services are performed.

In fixed fee arrangements, revenue is recognized as services

are performed as measured by costs incurred to date, compared to total estimated costs to complete the services project.

Management applies

judgment when estimating project status and the costs necessary to complete the services projects.

A number of internal and external

factors can affect these estimates, including labor rates, utilization and efficiency variances and specification and testing requirement

Services are generally invoiced upon milestones in the contract or upon consumption of the hourly resources and payments are

typically due 30 days after invoice.

and Internet Services

from BPO services is recognized based on the stage of completion which is measured by reference to labor hours incurred to date

as a percentage of total estimated labor hours for each contract.

Internet services are invoiced either monthly, quarterly or

half yearly in advance to the customers and revenue is recognized ratably overtime on a monthly basis.

from BPO services is recognized based on the stage of completion which is measured by reference to labor hours incurred to date as a

percentage of total estimated labor hours for each contract.

Internet services are invoiced either monthly, quarterly or half yearly

in advance to the customers and revenue is recognized ratably overtime on a monthly basis.

judgments and estimates are required under Topic 606 than were required under Topic 605.

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is required to determine the SSP for each distinct performance obligation.

The Company rarely licenses or sells products on a

stand-alone basis, so the Company is required to estimate the range of SSPs for each performance obligation.

In instances where

SSP is not directly observable because the Company does not sell the license, product or service separately, the Company determines

the SSP using information that may include market conditions and other observable inputs.

In making these judgments, the Company

analyzes various factors, including its pricing methodology and consistency, size of the arrangement, length of term, customer

demographics and overall market and economic conditions.

Based on these results, the estimated SSP is set for each distinct product

or service delivered to customers.

The Company rarely licenses or sells products on a stand-alone

basis, so the Company is required to estimate the range of SSPs for each performance obligation.

In instances where SSP is not directly

observable because the Company does not sell the license, product or service separately, the Company determines the SSP using information

that may include market conditions and other observable inputs.

In making these judgments, the Company analyzes various factors, including

its pricing methodology and consistency, size of the arrangement, length of term, customer demographics and overall market and economic

Based on these results, the estimated SSP is set for each distinct product or service delivered to customers.

most significant inputs involved in the Company’s revenue recognition policies are:

The (1) stand-alone selling prices of

the Company’s software license, and the (2) the method of recognizing revenue for installation/customization, and other

stand-alone selling price of the licenses was measured primarily through an analysis of pricing that management evaluated when

quoting prices to customers.

Although the Company has no history of selling its software separately from maintenance and other

services, the Company does have historical experience with amending contracts with customers to provide additional modules of

its software or providing those modules at an optional price.

This information guides the Company in assessing the stand-alone

selling price of the Company’s software, since the Company can observe instances where a customer had a particular component

of the Company’s software that was essentially priced separate from other goods and services that the Company delivered

to that customer.

Company recognized revenue from implementation and customization services using the percentage of estimated “man-days”

The (1) stand-alone selling prices of the Company’s

software license, and (2) the method of recognizing revenue for installation/customization, and other services.

stand-alone selling price of the licenses was measured primarily through an analysis of pricing that management evaluated when quoting

prices to customers.

Although the Company has no history of selling its software separately from post contract support and other services,

the Company does have historical experience with amending contracts with customers to provide additional modules of its software or providing

those modules at an optional price.

This information guides the Company in assessing the stand-alone selling price of the Company’s

software, since the Company can observe instances where a customer had a particular component of the Company’s software that was

essentially priced separate from other goods and services that the Company delivered to that customer.

Company recognizes revenue from implementation and customization services using the percentage of estimated “man-days”

that the work requires.

The Company believes the level of effort to complete the services is best measured by the amount of time

(measured as an employee working for one day on implementation/customization work) that is required to complete the implementation

or customization work.

The Company reviews its estimate of man-days required to complete implementation and customization services

each reporting period.

is recognized over time for the Company’s subscription, maintenance and fixed fee professional services that are separate

The Company believes the level of effort to complete the services is best measured by the amount of time (measured

as an employee working for one day on implementation/customization work) that is required to complete the implementation or customization

The Company reviews its estimate of man-days required to complete implementation and customization services each reporting period.

is recognized over time for the Company’s subscription, post contract support and fixed fee professional services that are separate

performance obligations.

For the Company’s professional services, revenue is recognized over time, generally using costs

incurred or hours expended to measure progress.

Judgment is required in estimating project status and the costs necessary to complete

A number of internal and external factors can affect these estimates, including labor rates, utilization, specification

variances and testing requirement changes.

For the Company’s professional services, revenue is recognized over time, generally using costs incurred

or hours expended to measure progress.

Judgment is required in estimating project status and the costs necessary to complete projects.

A number of internal and external factors can affect these estimates, including labor rates, utilization, specification variances and

testing requirement changes.

a group of agreements are entered at or near the same time and so closely related that they are, in effect, part of a single arrangement,

such agreements are deemed to be combined as one arrangement for revenue recognition purposes.

The Company exercises significant

judgment to evaluate the relevant facts and circumstances in determining whether agreements should be accounted for separately

or as a single arrangement.

The Company’s judgments about whether a group of contracts comprise a single arrangement can

affect the allocation of consideration to the distinct performance obligations, which could have an effect on results of operations

for the periods involved.

a contract includes variable consideration, the Company exercises judgment in estimating the amount of consideration to which

the entity will be entitled in exchange for transferring the promised goods or services to a customer.

When estimating variable

consideration, the Company will consider all relevant facts and circumstances.

Variable consideration will be estimated and included

in the contract price only when it is probable that a significant reversal in the amount of revenue recognized will not occur.

The Company exercises significant judgment

to evaluate the relevant facts and circumstances in determining whether agreements should be accounted for separately or as a single

The Company’s judgments about whether a group of contracts comprise a single arrangement can affect the allocation

of consideration to the distinct performance obligations, which could have an effect on results of operations for the periods involved.

a contract includes variable consideration, the Company exercises judgment in estimating the amount of consideration to which the entity

will be entitled in exchange for transferring the promised goods or services to a customer.

When estimating variable consideration, the

Company will consider all relevant facts and circumstances.

Variable consideration will be estimated and included in the contract price

only when it is probable that a significant reversal in the amount of revenue recognized will not occur.

timing of revenue recognition may differ from the timing of invoicing to customers and these timing differences result in receivables,

contract assets (revenues in excess of billings), or contract liabilities (deferred revenue) on the Company’s Consolidated

Balance Sheets.

The Company records revenues in excess of billings when the Company has transferred goods or services but does

not yet have the right to consideration.

The Company records deferred revenue when the Company has received or has the right to

receive consideration but has not yet transferred goods or services to the customer.

Company typically invoices its customers for subscription and support fees in advance on a quarterly or annual basis, with payment

due at the start of the subscription or support term.

Unpaid invoice amounts for non-cancelable license and services starting

in future periods are included in accounts receivable and deferred revenue.

contract assets (revenues in excess of billings), or contract liabilities (deferred revenue) on the Company’s Consolidated Balance

The Company records revenues in excess of billings when the Company has transferred goods or services but does not yet have the

right to consideration.

The Company records deferred revenue when the Company has received or has the right to receive consideration

but has not yet transferred goods or services to the customer.

Company typically invoices its customers for subscription and support fees in advance on a quarterly or annual basis, with payment due

at the start of the subscription or support term.

Unpaid invoice amounts for non-cancellable license and services starting in

future periods are included in accounts receivable and unearned revenue.

Expedients and Exemptions

are several practical expedients and exemptions allowed under Topic 606 that impact timing of revenue recognition and the Company’s

Below is a list of practical expedients the Company applied in the adoption and application of Topic 606:

Company does not evaluate a contract for a significant financing component if payment is expected within one year or less from

the transfer of the promised items to the customer.

Company generally expenses sales commissions and sales agent fees when incurred when the amortization period would have been one

year or less or the commissions are based on cashed received.

These costs are recorded within sales and marketing expense in the

Consolidated Statement of Operations.

Company does not disclose the value of unsatisfied performance obligations for contracts for which the Company recognizes revenue

at the amount to which it has the right to invoice for services performed (applies to time-and-material engagements).

Retrospective Transition Adjustments

contract modifications, the Company reflected the aggregate effect of all modifications that occurred prior to the adoption date

when identifying the satisfied and unsatisfied performance obligations, determining the transaction price and allocating the transaction

price to satisfied and unsatisfied performance obligations for the modified contract at transition.

The Company has applied the following practical expedients:

Company does not evaluate a contract for a significant financing component if payment is expected within one year or less from the transfer

of the promised items to the customer.

Company generally expenses sales commissions and sales agent fees when incurred when the amortization period would have been one year

or less or the commissions are based on cashed received.

These costs are recorded within sales and marketing expense in the Consolidated

Statement of Operations.

Company does not disclose the value of unsatisfied performance obligations for contracts for which the Company recognizes revenue at

the amount to which it has the right to invoice for services performed (applies to time-and-material engagements).

to Obtain a Contract

Company does not have a material amount of costs to obtain a contract capitalized at any balance sheet date.

In general, we incur

few direct incremental costs of obtaining new customer contracts.

We rarely incur incremental costs to review or otherwise enter

into contractual arrangements with customers.

In addition, our sales personnel receive fees that we refer to as commissions, but

that are based on more than simply signing up new customers.

Our sales personnel are required to perform additional duties beyond

new customer contract inception dates, including fulfillment duties and collections efforts.

In general, we incur few

direct incremental costs of obtaining new customer contracts.

We rarely incur incremental costs to review or otherwise enter into contractual

arrangements with customers.

In addition, our sales personnel receive fees that we refer to as commissions, but that are based on more

than simply signing up new customers.

Our sales personnel are required to perform additional duties beyond new customer contract inception

dates, including fulfillment duties and collections efforts.

assets consist of product licenses, renewals, enhancements, copyrights, trademarks, trade names, and customer lists.

assets with finite lives are amortized over the estimated useful life and are evaluated for impairment at least on an annual basis

and whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

We assess recoverability

by determining whether the carrying value of such assets will be recovered through the undiscounted expected future cash flows.

If the future undiscounted cash flows are less than the carrying amount of these assets, we recognize an impairment loss based

on the excess of the carrying amount over the fair value of the assets.

Intangible assets

with finite lives are amortized over the estimated useful life and are evaluated for impairment at least on an annual basis and whenever

events or changes in circumstances indicate that the carrying value may not be recoverable.

We assess recoverability by determining whether

the carrying value of such assets will be recovered through the undiscounted expected future cash flows.

If the future undiscounted cash

flows are less than the carrying amount of these assets, we recognize an impairment loss based on the excess of the carrying amount over

the fair value of the assets.

DEVELOPMENT COSTS

3 unchanged sentences

development costs are capitalized and reported at the lower of unamortized cost or net realizable value.

Capitalization ceases

when the product or enhancement is available for general release to customers.

Company makes on-going evaluations of the recoverability of its capitalized software projects by comparing the amount capitalized

for each product to the estimated net realizable value of the product.

If such evaluations indicate that the unamortized software

development costs exceed the net realizable value, the Company writes off the amount which the unamortized software development

costs exceed net realizable value.

Capitalized and purchased computer software development costs are being amortized ratably based

on the projected revenue associated with the related software or on a straight-line basis.

Capitalization ceases when the

product or enhancement is available for general release to customers.

Company makes on-going evaluations of the recoverability of its capitalized software projects by comparing the amount capitalized for

each product to the estimated net realizable value of the product.

If such evaluations indicate that the unamortized software development

costs exceed the net realizable value, the Company writes off the amount which the unamortized software development costs exceed net

realizable value.

Capitalized and purchased computer software development costs are being amortized ratably based on the projected revenue

associated with the related software or on a straight-line basis.

stock-based compensation expense is estimated at the grant date based on the award’s fair value as calculated by the Black-Scholes-Merton

(BSM) option pricing model and is recognized as expense over the requisite service period.

The BSM model requires various highly

judgmental assumptions including expected volatility and expected term.

If any of the assumptions used in the BSM model changes

significantly, stock-based compensation expense may differ materially in the future from that recorded in the current period.

In addition, we are required to estimate the expected forfeiture rate and only recognize expense for those shares expected to

We estimate the forfeiture rate based on historical experience and our expectations regarding future pre-vesting termination

behavior of employees.

To the extent our actual forfeiture rate is different from our estimate;

stock-based compensation expense

is adjusted accordingly.

represents the excess of the aggregate purchase price over the fair value of the net assets acquired in a purchase businesses

Goodwill is reviewed for impairment on an annual basis, or more frequently if events or changes in circumstances

indicate that the carrying amount of goodwill may be impaired.

The goodwill impairment test is a two-step test.

Under the first

step, the fair value of the reporting unit is compared with its carrying value (including goodwill).

If the fair value of the

reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and the enterprise

must perform step two of the impairment test (measurement).

Under step two, an impairment loss is recognized for any excess of

the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill.

The implied fair value

of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation.

The residual fair value after this allocation is the implied fair value of the reporting unit goodwill.

Fair value of the reporting

unit is determined using a discounted cash flow analysis.

If the fair value of the reporting unit exceeds its carrying value,

step two does not need to be performed.

The BSM model requires various highly judgmental

assumptions including expected volatility and expected term.

If any of the assumptions used in the BSM model changes significantly, stock-based

compensation expense may differ materially in the future from that recorded in the current period.

In addition, we are required to estimate

the expected forfeiture rate and only recognize expense for those shares expected to vest.

We estimate the forfeiture rate based on historical

experience and our expectations regarding future pre-vesting termination behavior of employees.

To the extent our actual forfeiture rate

is different from our estimate;

stock-based compensation expense is adjusted accordingly.

represents the excess of the aggregate purchase price over the fair value of the net assets acquired in a purchase business combination.

Goodwill is reviewed for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the carrying

amount of goodwill may be impaired.

In conducting its annual impairment test, the Company first

reviews qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its

carrying amount.

If factors indicate that the fair value of the reporting unit is less than its carrying amount, the Company performs

a quantitative assessment and the fair value of the reporting unit is determined by analyzing the expected present value of future cash

If the carrying value of the reporting unit continues to exceed its fair value, the fair value of the reporting unit’s goodwill

is calculated and an impairment loss equal to the excess is recorded.

Accounting Pronouncement

Note 2 “Summary of Significant Accounting Policies”

in the Notes to the Consolidated Financial Statements in Item

8 of Part II of this Annual Report on Form 10-K, for a full description of recent accounting pronouncements, including the expected

dates of adoption.

in the Notes to the Consolidated Financial Statements in Item 8 of Part

II of this Annual Report on Form 10-K, for a full description of recent accounting pronouncements, including the expected dates of adoption.

OF OPERATIONS

YEAR ENDED JUNE 30, 2021 COMPARED TO THE YEAR ENDED JUNE 30, 2020

following table sets forth the items in our consolidated statement of operations for the years ended June 30, 2020 and 2019 as

a percentage of revenues.

- related party

and consultants

and amortization

following table sets forth the items in our consolidated statement of operations for the years ended June 30, 2021 and 2020 as a percentage

For the Years

Ended June 30,

Net Revenues:

Subscription and support

Services - related party

Total net revenues

Cost of revenues:

and marketing

and amortization

and administrative

and development cost

Salaries and consultants

Depreciation and amortization

Total cost of revenues

Operating expenses:

from operations

income and (expenses)

on sale of assets

on foreign currency exchange transactions

of net loss from equity investment

other income (expenses)

income before income taxes

tax provision

Non-controlling

income attributable to NetSol

Selling and marketing

Depreciation and amortization

General and administrative

Research and development cost

Total operating expenses

Income from operations

Other income and (expenses)

Gain (loss) on sale of assets

Interest expense

Interest income

Gain (loss) on foreign currency exchange transactions

Share of net loss from equity investment

Total other income (expenses)

Net income before income taxes

Income tax provision

Non-controlling interest

Net income attributable to NetSol

significant portion of our business is conducted in currencies other than the U.S.

We operate in several geographical

regions as described in Note 21 “Segment Information and Geographic Areas”

within the Notes to the Consolidated Financial

We operate in several geographical regions

as described in Note 21 “Segment Information and Geographic Areas”

within the Notes to the Consolidated Financial Statements.

Weakening of the value of the U.S.

dollar compared to foreign currency exchange rates generally has the effect of

increasing our revenues but also increasing our expenses denominated in currencies other than the U.S.

Similarly, strengthening

dollar compared to foreign currency exchange rates generally has the effect of reducing our revenues but also reducing

our expenses denominated in currencies other than the U.S.

We plan our business accordingly by deploying additional resources

to areas of expansion, while continuing to monitor our overall expenditures given the economic uncertainties of our target markets.

In order to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency

fluctuations, we compare the changes in results from one period to another period using constant currency.

In order to calculate

our constant currency results, we apply the current period results to the prior period foreign currency exchange rates.

table below, we present the change based on actual results in reported currency and in constant currency.

dollar compared to foreign currency exchange rates generally has the effect of increasing our revenues

but also increasing our expenses denominated in currencies other than the U.S.

Similarly, strengthening of the U.S.

dollar compared

to foreign currency exchange rates generally has the effect of reducing our revenues but also reducing our expenses denominated in currencies

other than the U.S.

We plan our business accordingly by deploying additional resources to areas of expansion, while continuing

to monitor our overall expenditures given the economic uncertainties of our target markets.

In order to provide a framework for assessing

how our underlying businesses performed excluding the effect of foreign currency fluctuations, we compare the changes in results from

one period to another period using constant currency.

In order to calculate our constant currency results, we apply the current period

results to the prior period foreign currency exchange rates.

In the table below, we present the change based on actual results in reported

currency and in constant currency.

(Unfavorable)

For the Years

(Unfavorable)

$ (5,684,344 )

$ (5,762,520 )

$ (11,446,864 )

(loss) from operations

Ended June 30,

Net Revenues:

$ (2,351,850 )

$ (1,451,704 )

Cost of revenues:

Operating expenses:

Income (loss) from operations

revenues for the years ended June 30, 2021 and 2020 by segment are as follows:

fees for the year ended June 30, 2020 were $4,564,560 compared to $16,768,749 for the year ended June 30, 2019 reflecting a decrease

North America

fees for the year ended June 30, 2021 were $6,249,924 compared to $3,260,891 for the year ended June 30, 2020 reflecting an increase

of $2,989,033 with a change in constant currency of $2,633,782.

The decrease in license revenue for the fiscal year ended June

30, 2020 compared to 2019 is primarily due to the decrease in license revenue recognized for the DFS and BMW contracts to implement

our NFS Ascent ®

The increase in license revenue for the fiscal year ended June 30, 2021

compared to 2020 is primarily due to the increase in license revenue recognized for the GAC, TIL and BMW contracts to implement our NFS

Retail Platform.

In the fiscal year ended June 30, 2020, we recorded $2,500,000 of license revenue

for the DFS, 12 country NFS Ascent ®

In the fiscal year ended June 30, 2021, we recorded $2,400,000 of license revenue for the GAC

NFS Ascent ®

contract, $2,100,000 for the TIL NFS Ascent ®

contract, and $1,400,000 for the BMW NFS Ascent ®

In fiscal year ended June 30, 2020, we recorded $2,500,000 of license revenue for the DFS, 12 country NFS Ascent ®

contract, $470,000 for an NFS Ascent ®

contract in the U.K.,

and $1,540,000 from license revenues through sales of our regional offerings in China, Australia, the U.S.

year ended June 30, 2019, we recorded $6,600,000 of license revenue recognized for the DFS, 12 country NFS Ascent ®

contract, $8,000,000 related to the NFS Ascent ®

contracts signed with a tier-one auto captive finance company and

a major American multinational automaker to implement our product in China, and $2,200,000 from license revenues through sales

of our regional offerings in China, Australia, the U.S.

fees for the year ended June 30, 2020, were $18,951,248 compared to $15,521,413 for the year ended June 30, 2019 reflecting an

increase of $3,429,835 with a change in constant currency of $5,286,321.

Maintenance fees begin once a customer has “gone

contract in the U.K., and $1,540,000 from license revenues through sales of

our regional offerings in China, Australia, the U.S.

and support fees for the year ended June 30, 2021, were $22,173,745 compared to $20,254,917 for the year ended June 30, 2020 reflecting

an increase of $1,918,828 with a change in constant currency of $1,754,369.

The increase in subscription and support fees is due to going

live with several markets related to the DFS contract and going live with the BMW contract.

Subscription and support fees begin once

a customer has “gone live”

with our product.

The increase was due to the start of new maintenance agreements from customers who went live with

our product during the latter stages of fiscal year 2019 and into fiscal year 2020.

We anticipate maintenance fees to gradually

increase as we implement both our NFS legacy product and NFS Ascent ®

income for the year ended June 30, 2020, was $32,555,690 compared to $34,892,290 for the year ended June 30, 2019, reflecting

a decrease of $2,336,600 with an increase in constant currency of $751,124.

The services revenue increase based on constant currency

was due to an increase in services revenue associated with new implementations and change requests.

Services revenue is derived

from services provided to both current customers as well as services provided to new customers as part of the implementation process.

Subscription and support fees are recurring in nature, and we anticipate these

fees to gradually increase as we implement both our NFS legacy products and NFS Ascent ®

income for the year ended June 30, 2021, was $26,448,171 compared to $32,555,690 for the year ended June 30, 2020, reflecting a decrease

of $6,107,519 with a decrease in constant currency of $6,485,196.

The decrease in services revenue is due to the decrease in implementation

revenue associated with customers who have gone live with our products.

Services revenue is derived from services provided to both current

customers as well as services provided to new customers as part of the implementation process.

Related Party

income from related party for the year ended June 30, 2020 was $300,821 compared to $636,731 for the year ended June 30, 2019

reflecting a decrease of $335,910 with a decrease in constant currency of $228,507.

The decrease in related party service revenue

is due to a decrease in revenue due to less services performed for WRLD3D.

income from related party for the year ended June 30, 2021 was $48,775 compared to $300,821 for the year ended June 30, 2020 reflecting

a decrease of $252,046 with a decrease in constant currency of $254,805.

The decrease in related party service revenue is due to a decrease

in revenue due to less services performed for WRLD3D.

gross profit was $26,353,028 for the year ended June 30, 2021 as compared with $26,963,370 for the year ended June 30, 2020.

This is a decrease of $7,923,246 with a decrease in constant currency of $5,774,477.

The gross profit percentage for the year

ended June 30, 2020 also decreased to 47.8% from 51.4% for the year ended June 30, 2019.

The cost of sales was $29,408,949 for

the year ended June 30, 2020 compared to $32,932,567 for the year ended June 30, 2019 for a decrease of $3,523,618 and on a constant

currency basis a decrease of $90,133.

As a percentage of sales, cost of sales increased from 48.6% for the year ended June 30,

2019 to 52.2% for the year ended June 30, 2020.

and consultant fees decreased by $431,626 from $19,253,364 for the year ended June 30, 2019 to $18,821,738 for the year ended

June 30, 2020 and on a constant currency basis increased by $1,754,053.

The decrease in salaries and consultant fees is due to

the devaluation of the Pakistan Rupee (“PKR”) compared to the U.S.

The increase in salaries on a constant

currency basis is due to the increase in the number of technical employees and the annual increase in salaries and wages.

976, 932, and 1,009 technical employees as of June 30, 2018, 2019 and 2020, respectively.

As a percentage of sales, salaries and

consultant expense increased from 28.4% for the year ended June 30, 2019 to 33.4% for the year ended June 30, 2020.

decreased by $2,346,126 from $6,527,868 for the year ended June 30, 2019 to $4,181,742 for the year ended June 30, 2020 and on

a constant currency basis decreased by $1,799,905.

a decrease of $610,342 with a decrease in constant currency of $1,312,086.

The gross profit percentage for the year ended June 30, 2021

increased to 48.0% from 47.8% for the year ended June 30, 2020.

The cost of sales was $28,567,587 for the year ended June 30, 2021 compared

to $29,408,949 for the year ended June 30, 2020 for a decrease of $841,362 and on a constant currency basis a decrease of $1,039,764.

As a percentage of sales, cost of sales decreased from 52.2% for the year ended June 30, 2020 to 52.0% for the year ended June 30, 2021.

and consultant fees increased by $2,147,560 from $18,821,738 for the year ended June 30, 2020 to $20,969,298 for the year ended June

30, 2021 and on a constant currency basis increased by $1,984,188.

The increase in salaries is due to the increase in the number of technical

employees and the annual increase in salaries and wages.

We had 932, 1,009, and 1,036 technical employees as of June 30, 2019, 2020 and

2021, respectively.

As a percentage of sales, salaries and consultant expense increased from 33.4% for the year ended June 30, 2020 to

38.2% for the year ended June 30, 2021.

decreased by $3,518,339 from $4,181,742 for the year ended June 30, 2020 to $663,403 for the year ended June 30, 2021 and on a constant

currency basis decreased by $3,558,950.

The decrease in travel is due to the COVID-19 Pandemic.

As a percentage of

sales, travel expense decreased from 9.6% for year ended June 30, 2019 to 7.4% for the year ended June 30, 2020.

and amortization expense decreased to $2,897,371 compared to $3,525,857 for the year ended June 30, 2019 or a decrease of $628,486

and on a constant currency basis a decrease of $146,175.

Depreciation and amortization expense decreased as some products became

fully amortized.

expenses were $25,893,032 for the year ended June 30, 2020 compared to $28,058,704, for the year ended June 30, 2019 for a decrease

of 7.7% or $2,165,672 and on a constant currency basis a decrease of 1.0% or $287,257.

As a percentage of sales,

it increased from 41.4% to 45.9%.

The decrease in operating expenses was primarily due to decreases in selling and marketing expenses,

salaries and wages and research and development cost offset by an increase in general and administrative expenses.

and marketing expenses decreased $1,381,095 or 17.6% and on a constant currency basis a decrease of $844,758 or 10.8%.

in selling and marketing expenses is due to decrease in our salaries and commissions, travel expenses, and business development

costs to market and sell NFS Ascent ®

As a percentage of sales, travel expense

decreased from 7.4% for year ended June 30, 2020 to 1.2% for the year ended June 30, 2021.

and amortization expense increased to $2,990,689 compared to $2,897,371 for the year ended June 30, 2020 or an increase of $93,318 and

on a constant currency basis an increase of $123,117.

expenses were $23,632,179 for the year ended June 30, 2021 compared to $25,893,032, for the year ended June 30, 2020 for a decrease of

8.7% or $2,260,853 and on a constant currency basis a decrease of 9.0% or $2,298,574.

As a percentage of sales, it decreased from 45.9%

The decrease in operating expenses was primarily due to decreases in general and administrative expenses and research and development

cost offset by an increase in selling and marketing expenses, salaries and wages and depreciation expense.

and marketing expenses increased $104,341 or 1.6% and on a constant currency basis an increase of $42,010 or 0.7%.

The increase in selling

and marketing expenses is due to increase in our salaries and commissions, and business development costs to market and sell NFS Ascent ®

and administrative expenses were $15,437,382 for the year ended June 30, 2021 compared to $17,138,832 at June 30, 2020 or a decrease

of $219,086 or 1.3% and on a constant currency basis an increase of $797,684 or 4.6%.

During the year ended June 30, 2020, salaries

decreased by $1,112,184 or $512,629 on a constant currency basis due to reduction in salaries, and less share grants.

services increased by $104,726 or $130,533 on a constant currency basis and other general and administrative expenses increased

by $1,077,944 or increased $1,466,481 on a constant currency basis.

The increase on a constant currency basis is primarily due

to the increase in withholding taxes on payments from customers and funds transferred from China of approximately $850,000, a

new office lease in London of approximately $150,000, and software license and subscription fees of approximately $140,000.

of $1,701,450 or 9.9% and on a constant currency basis a decrease of $1,641,828 or 9.6%.

The decrease is primarily due to a reduction

of approximately $795,000 related to a withholding tax on dividends and by customers, approximately $395,000 of reduced travel expenses,

approximately $56,000 of reduced professional services, approximately $517,000 related to the decrease in the provision for doubtful

accounts and approximately $157,000 reduction in rent expense offset by an increase in salaries of approximately $402,000.

and development costs were $674,168 for the year ended June 30, 2021 compared to $1,468,954 at June 30, 2020 or a decrease of $794,786

or 54.1% and on constant currency basis a decrease of $799,928 or 54.5%.

The decrease in research and development costs

is due to less spending on our innovation initiatives with Blockchain, AI, and IoT.

The decrease in research and development costs is due to less

spending on our innovation initiatives with Blockchain, AI, and IoT.

from Operations

from operations was $2,720,849 for the year ended June 30, 2021 compared to $1,070,338 for the year ended June 30, 2020.

represents a decrease of $5,757,574 with a decrease of $5,487,220 on a constant currency basis for the year ended June 30, 2020

compared with the year ended June 30, 2019.

As a percentage of sales, income from operations was 1.9% for the year ended June

30, 2020 compared to 10.1% for the year ended June 30, 2019.

This represents

an increase of $1,650,511 with an increase of $986,488 on a constant currency basis for the year ended June 30, 2021 compared with the

year ended June 30, 2020.

As a percentage of sales, income from operations was 5.0% for the year ended June 30, 2021 compared to 1.9%

for the year ended June 30, 2020.

Income and Expense

income was $567,400 for the year ended June 30, 2021 compared to $1,262,753 for the year ended June 30, 2020.

This represents

a decrease of $4,984,659 with a decrease of $5,137,165 on a constant currency basis.

The decrease is primarily due to the foreign

currency exchange transactions.

This represents a

decrease of $695,353 with a decrease of $893,154 on a constant currency basis.

The decrease is primarily due to the interest income

and foreign currency exchange transactions.

Interest income was $1,017,432 for the year ended June 30, 2021 compared to $1,569,536

for the period ended June 30, 2020.

This represent a decrease of $552,104 or a change of $557,829 on constant currency basis.

not accrue any interest income on the convertible notes receivable for the year ended June 30, 2021 compared to $372,314 for the

year ended June 30, 2020.

The majority of the contracts with NetSol PK are either in U.S.

dollars or Euros;

therefore, the

currency fluctuations will lead to foreign currency exchange gains or losses depending on the value of the PKR compared to the

Dollar and the Euro.

During the year ended June 30, 2020, we recognized a gain of $398,610 in foreign currency exchange transactions

therefore, the currency

fluctuations will lead to foreign currency exchange gains or losses depending on the value of the PKR compared to the U.S.

and the Euro.

During the year ended June 30, 2021, we recognized a loss of $597,433 in foreign currency exchange transactions

compared to a gain of $398,610 for the year ended June 30, 2020.

During the year ended June 30, 2021, the value of the U.S.

dollar and the Euro increased 3.1% and 1.8%, respectively, compared to the PKR.

During year ended June 30, 2019, the value of

and the Euro decreased 5.9% and 0.5%, respectively, compared to the PKR.

During the year ended June 30, 2020, the value of the U.S.

dollar and the Euro increased 3.1% and 1.8%, respectively, compared to the PKR.

Interest income was $1,569,536 for

the year ended June 30, 2020 compared to $955,061 for the period ended June 30, 2019.

This represent an increase of $614,475 or

a change of $800,815 on constant currency basis.

The increase is due to the increase in cash which is invested into short term

deposits and interest accrued on convertible note receivables.

Non-controlling

the year ended June 30, 2021 and 2020, the net income attributable to non-controlling interest was $483,375 and $254,942, respectively.

The decrease in non-controlling interest is primarily due to the decrease in net income of NetSol PK.

The increase in non-controlling interest is primarily due to the increase in net income of NetSol PK.

Income/Loss Attributable to NetSol

income was $1,778,257 for the year ended June 30, 2021 compared to $937,081 for the year ended June 30, 2020.

This is a decrease

of $7,646,318 with a decrease of $7,622,678 on a constant currency basis, compared to the prior year.

For the year ended June

30, 2020, net income per share was $0.08 for basic and diluted shares.

For the year ended June 30, 2019, net income per share

was $0.74 for basic and diluted shares.

This is an increase of

$841,176 with a decrease of $9,399 on a constant currency basis, compared to the prior year.

For the year ended June 30, 2021, net income

per share was $0.15 for basic and diluted shares.

For the year ended June 30, 2020, net income per share was $0.08 for basic and diluted

Financial Measures

S-K Item 10(e), “Use of Non-GAAP Financial Measures in Commission Filings,”

defines and prescribes the conditions

for use of non-GAAP financial information.

Our measures of adjusted EBITDA and adjusted EBITDA per basic and diluted share meet

the definition of a non-GAAP financial measure.

defines and prescribes the conditions for use

of non-GAAP financial information.

Our measures of adjusted EBITDA and adjusted EBITDA per basic and diluted share meet the definition

of a non-GAAP financial measure.

define the non-GAAP measures as follows:

2 unchanged sentences

EBITDA per basic and diluted share –

Adjusted EBITDA allocated to common stock divided by the weighted average shares

outstanding and diluted shares outstanding.

use non-GAAP measures internally to evaluate the business and believe that presenting non-GAAP measures provides useful information

to investors regarding the underlying business trends and performance of our ongoing operations as well as useful metrics for

monitoring our performance and evaluating it against industry peers.

The non-GAAP financial measures presented should be used

in addition to, and in conjunction with, results presented in accordance with GAAP, and should not be relied upon to the exclusion

of GAAP financial measures.

Management strongly encourages investors to review our consolidated financial statements in their

entirety and not to rely on any single financial measure in evaluating the Company.

Adjusted EBITDA allocated to common stock divided by the weighted average shares outstanding

and diluted shares outstanding.

use non-GAAP measures internally to evaluate the business and believe that presenting non-GAAP measures provides useful information to

investors regarding the underlying business trends and performance of our ongoing operations as well as useful metrics for monitoring

our performance and evaluating it against industry peers.

The non-GAAP financial measures presented should be used in addition to, and

in conjunction with, results presented in accordance with GAAP, and should not be relied upon to the exclusion of GAAP financial measures.

Management strongly encourages investors to review our consolidated financial statements in their entirety and not to rely on any single

financial measure in evaluating the Company.

non-GAAP measures reflect adjustments based on the following items:

1 unchanged sentence

from net income because doing so makes internal comparisons to our historical operating results more consistent.

we believe providing an EBITDA calculation is a more useful comparison of our operating results to the operating results of our

In addition, we believe

providing an EBITDA calculation is a more useful comparison of our operating results to the operating results of our peers.

compensation expense :

We have excluded the effect of stock-based compensation expense from the non-GAAP adjusted EBITDA and

non-GAAP adjusted EBITDA per basic and diluted share calculations.

Although stock-based compensation expense is calculated in

accordance with current GAAP and constitutes an ongoing and recurring expense, such expense is excluded from non-GAAP results

because it is not an expense which generally requires cash settlement by NetSol, and therefore is not used by us to assess the

profitability of our operations.

We also believe the exclusion of stock-based compensation expense provides a more useful comparison

of our operating results to the operating results of our peers.

Non-controlling

We add back the non-controlling interest in calculating gross adjusted EBITDA and then subtract out the income taxes,

depreciation and amortization and net interest expense attributable to the non-controlling interest to arrive at a net adjusted

reconciliation of the non-GAAP financial measures of adjusted EBITDA and non-GAAP earnings per basic and diluted share to the

most comparable GAAP measures for the years ended June 30, 2020 and 2019 are as follows:

the Year Ended

Income (loss) attributable to NetSol

We have excluded the effect of stock-based compensation expense from the non-GAAP adjusted EBITDA and non-GAAP

adjusted EBITDA per basic and diluted share calculations.

Although stock-based compensation expense is calculated in accordance with

current GAAP and constitutes an ongoing and recurring expense, such expense is excluded from non-GAAP results because it is not an expense

which generally requires cash settlement by NetSol, and therefore is not used by us to assess the profitability of our operations.

also believe the exclusion of stock-based compensation expense provides a more useful comparison of our operating results to the operating

results of our peers.

Non-controlling

and amortization

stock-based compensation

EBITDA, gross

non-controlling interest (a)

Weighted Average

number of shares outstanding

adjusted EBITDA

The reconciliation of adjusted EBITDA of non-controlling interest

net income attributable to non-controlling interest is as follows

Income attributable to non-controlling interest

and amortization

stock-based compensation

EBITDA of non-controlling interest

We add back the non-controlling interest in calculating gross adjusted EBITDA and then subtract out the income taxes, depreciation

and amortization and net interest expense attributable to the non-controlling interest to arrive at a net adjusted EBITDA.

reconciliation of the non-GAAP financial measures of adjusted EBITDA and non-GAAP earnings per basic and diluted share to the most comparable

GAAP measures for the years ended June 30, 2021 and 2020 are as follows:

For the Year Ended

June 30, 2021

June 30, 2020

Net Income (loss) attributable to NetSol

Non-controlling interest

Depreciation and amortization

Interest expense

Interest (income)

Non-cash stock-based compensation

Adjusted EBITDA, gross

Less non-controlling interest (a)

Adjusted EBITDA, net

Weighted Average number of shares outstanding

Basic adjusted EBITDA

Diluted adjusted EBITDA

(a) The reconciliation of adjusted EBITDA of non-controlling interest to net income attributable to

non-controlling interest is as follows

Net Income (loss) attributable to non-controlling interest

Depreciation and amortization

Interest expense

Interest (income)

Non-cash stock-based compensation

Adjusted EBITDA of non-controlling interest

AND CAPITAL RESOURCES

cash position was $33,705,154 at June 30, 2021, compared to $20,166,830 at June 30, 2020.

cash provided by operating activities was $3,972,426 for the year ended June 30, 2020 compared to $4,933,210 for the year ended

June 30, 2019.

cash provided by operating activities was $15,725,923 for the year ended June 30, 2021 compared to $3,972,426 for the year ended June

At June 30, 2021, we had current assets of $55,578,774 and current liabilities of $23,476,561.

We had accounts

receivable of $11,414,257 at June 30, 2020 compared to $15,599,314 at June 30, 2019.

We had revenues in excess of billings of

$18,506,733 at June 30, 2020 compared to $16,111,366 at June 30, 2019 of which $1,300,289 and $1,281,492 are shown as long term

as of June 30, 2020 and 2019, respectively.

The long-term portion was discounted by $41,286 and $99,139 at June 30, 2020 and 2019,

respectively, using the discounted cash flow method with an interest rate of 4.35%, during years ended June 30, 2020 and 2019.

During the year ended June 30, 2020, our revenues in excess of billings were reclassified to accounts receivable pursuant to billing

requirements detailed in each contract.

The combined totals for accounts receivable and revenues in excess of billings decreased

by $1,789,690 from $31,710,680 at June 30, 2019 to $29,920,990 at June 30, 2020.

Accounts payable and accrued expenses, and current

portions of loans and lease obligations amounted to $5,680,837 and $9,139,561, respectively at June 30, 2020.

The average days

sales outstanding for the years ended June 30, 2020 and 2019 were 200 and 171 days respectively.

The days sales outstanding have

been calculated by taking into consideration the average combined balances of accounts receivable and revenue in excess of billings.

cash used by investing activities amounted to $2,054,890 for the year ended June 30, 2020, compared to $3,649,680 for the year

ended June 30, 2019.

We had net purchases of property and equipment of $1,270,965 compared to $1,555,680 for the comparable period

last fiscal year.

For the year ended June 30, 2020 and 2019, we invested $600,000 and $1,526,500, respectively, in short-term

convertible notes.

For the year ended June 30, 2019, we purchased the remaining 49% share of VLS for $927,100.

We paid cash of

$317,500 at the closing date and accrued the remaining $609,600, which was subsequently paid during the fiscal year ended June

Net cash provided by financing activities was $1,700,293 compared

to $17,167, for the years ended June 30, 2020, and 2019, respectively.

The year ended June 30, 2020 included the cash inflow of

$Nil from the exercising of stock options compared to $85,000 for the year ended June 30, 2019.

We had accounts receivable of

$4,184,096 at June 30, 2021 compared to $11,414,257 at June 30, 2020.

We had revenues in excess of billings of $15,637,734 at June 30,

2021 compared to $18,506,733 at June 30, 2020 of which $957,603 and $1,300,289 are shown as long term as of June 30, 2021 and 2020, respectively.

The long-term portion was discounted by $66,779 and $41,286 at June 30, 2021 and 2020, respectively, using the discounted cash flow method

with interest rates ranging from 4.65% to 6.25% and 4.35%, for the years ended June 30, 2021 and 2020, respectively.

During the year

ended June 30, 2021, our revenues in excess of billings were reclassified to accounts receivable pursuant to billing requirements detailed

in each contract.

The combined totals for accounts receivable and revenues in excess of billings decreased by $10,099,160 from $29,920,990

at June 30, 2020 to $19,821,830 at June 30, 2021.

Accounts payable and accrued expenses, and current portions of loans and lease obligations

amounted to $6,696,035 and $11,366,171, respectively at June 30, 2021.

The average days sales outstanding for the years ended June 30,

2021 and 2020 were 165 and 200 days respectively.

The days sales outstanding have been calculated by taking into consideration the average

combined balances of accounts receivable and revenue in excess of billings.

cash used by investing activities amounted to $2,518,550 for the year ended June 30, 2021, compared to $2,054,890 for the year ended

June 30, 2020.

We had net purchases of property and equipment of $2,363,050 compared to $1,270,965 for the comparable period last fiscal

We did not invest in short-term convertible notes for the year ended June 30, 2021, compared to $600,000, for the fiscal year ended

June 30, 2020.

For the year ended June 30, 2021 and 2020, we invested $155,500 and $94,500, respectively, in DriveMate.

cash used in financing activities was $1,165,565 compared to net cash provided by financing activities of $1,700,293, for the years ended

June 30, 2021, and 2020, respectively.

During the year ended June 30, 2021, we purchased 669,018 shares of our common stock from the

open market for $2,364,781 compared to zero shares of common stock for the year ended June 30, 2020.

The year ended June 30, 2021, included

cash inflow of $1,898,013 from bank proceeds compared to $4,221,203 for the same period last year.

During the year ended June 30, 2021,

2020, we purchased zero shares of our common stock from the open market compared to 41,650 shares of common stock for $250,945

for the same period last year.

The year ended June 30, 2020, included cash inflow of $4,221,203 from bank proceeds compared to

$1,227,158 for the same period last year.

During the year ended June 30, 2020, we had net payments for bank loans and capital leases

of $611,913 compared to $480,231 for the year ended June 30, 2019.

We are operating in various geographical regions of the world

through our various subsidiaries.

Those subsidiaries have financial arrangements from various financial institutions to meet both

their short and long-term funding requirements.

These loans will become due at different maturity dates as described in Note 15

of the financial statements.

We are in compliance with the covenants of the financial arrangements and there is no default which

may lead to early payment of these obligations.

We anticipate paying back all these obligations on their respective due dates.

we had net payments for bank loans and capital leases of $698,797 compared to $611,913 for the year ended June 30, 2020.

We are operating

in various geographical regions of the world through our various subsidiaries.

Those subsidiaries have financial arrangements from various

financial institutions to meet both their short and long-term funding requirements.

These loans will become due at different maturity

dates as described in Note 15 of the financial statements.

We are in compliance with the covenants of the financial arrangements and

there is no default which may lead to early payment of these obligations.

We anticipate paying back all these obligations on their respective

typically fund the cash requirements for our operations in the U.S.

through our license, services, and maintenance agreements,

intercompany charges for corporate services, and through the exercise of options.

As of June 30, 2020, we had approximately $20.2

million of cash, cash equivalents and marketable securities of which approximately $18.2 million is held by our foreign subsidiaries.

As of June 30, 2019, we have approximately $17.4 million of cash, cash equivalents and marketable securities of which approximately

$16.1 million is held by our foreign subsidiaries.

through our license, services, and maintenance agreements, intercompany

charges for corporate services, and through the exercise of options.

As of June 30, 2021, we had approximately $33.7 million of cash,

cash equivalents and marketable securities of which approximately $31.7 million is held by our foreign subsidiaries.

As of June 30, 2020,

we have approximately $20.2 million of cash, cash equivalents and marketable securities of which approximately $18.2 million is held

by our foreign subsidiaries.

remain open to strategic relationships that would provide value added benefits.

The focus will remain on continuously improving

cash reserves internally and reduced reliance on external capital raise.

The focus will remain on continuously improving cash

reserves internally and reduced reliance on external capital raise.

a growing company, we have on-going capital expenditure needs based on our short term and long-term business plans.

requirements for capital expenses vary from time to time, for the next 12 months, we anticipate needing working capital of $2

to $3 million for APAC, U.S.

Although our requirements

for capital expenses vary from time to time, for the next 12 months, we anticipate needing working capital of $2 to $3 million for APAC,

and European new business development activities and infrastructure enhancements.

there is no guarantee that any of these methods will result in raising sufficient funds to meet our capital needs or that even

if available will be on terms acceptable to us, we will be very cautious and prudent about any new capital raise given the global

market uncertainties.

there is no guarantee that any of these methods will result in raising sufficient funds to meet our capital needs or that even if available

will be on terms acceptable to us, we will be very cautious and prudent about any new capital raise given the global market uncertainties.

However, we are very conscious of the dilutive effect and price pressures in raising equity-based capital.

UK based subsidiary, NTE, has an approved overdraft facility of £300,000 ($370,370) which requires that the aggregate amount

of invoiced trade debtors (net of provisions for bad and doubtful debts and excluding intra-group debtors) of NTE, not exceeding

90 days old, will not be less than an amount equal to 200% of the facility.

The Pakistani subsidiary, NetSol PK has an approved

facility for export refinance from Askari Bank Limited amounting to Rupees 500 million ($2,975,482) and a running finance facility

of Rupees 75 million ($446,322).

NetSol PK has an approved facility for export refinance from another Habib Metro Bank Limited

amounting to Rupees 900 million ($5,355,868).

These facilities require NetSol PK to maintain a long-term debt equity ratio of

60:40 and the current ratio of 1:1.

NetSol PK also has an approved export refinance facility of Rs.

380 million ($2,261,366) and

a running finance facility of Rs.

120 million ($714,116) from Samba Bank Limited.

During the tenure of loan, these two facilities

require NetSol PK to maintain at a minimum a current ratio of 1:1, an interest coverage ratio of 4 times, a leverage ratio of

2 times, and a debt service coverage ratio of 4 times.

UK based subsidiary, NTE, has an approved overdraft facility of £300,000 ($416,667) which requires that the aggregate amount of

invoiced trade debtors (net of provisions for bad and doubtful debts and excluding intra-group debtors) of NTE, not exceeding 90 days

old, will not be less than an amount equal to 200% of the facility.

The Pakistani subsidiary, NetSol PK has an approved facility for

export refinance from Askari Bank Limited amounting to Rupees 500 million ($3,162,555) and a running finance facility of Rupees 75 million

NetSol PK has an approved facility for export refinance from Habib Metro Bank Limited amounting to Rupees 900 million ($5,692,600).

These facilities require NetSol PK to maintain a long-term debt equity ratio of 60:40 and the current ratio of 1:1.

NetSol PK also has

an approved export refinance facility of Rs.

380 million ($2,403,542) and a running finance facility of Rs.

120 million ($759,013) from

Samba Bank Limited.

During the tenure of loan, these two facilities require NetSol PK to maintain at a minimum a current ratio of 1:1,

an interest coverage ratio of 4 times, a leverage ratio of 2 times, and a debt service coverage ratio of 4 times.

of the date of this report, we are in compliance with the financial covenants associated with our borrowings.

The maturity dates

of the borrowings of respective subsidiaries may accelerate if they do not comply with these covenants.

In case of any change

in control in subsidiaries, they may have to repay their respective credit facilities.

The maturity dates of the

borrowings of respective subsidiaries may accelerate if they do not comply with these covenants.

In case of any change in control in

subsidiaries, they may have to repay their respective credit facilities.

and Redemption

has been our policy to invest earnings in growth rather than distribute earnings as common stock dividends.

This policy, under

which common stock dividends have not been paid since our inception is expected to continue but is subject to regular review by

the Board of Directors.

This policy, under which

common stock dividends have not been paid since our inception is expected to continue but is subject to regular review by the Board of

contractual obligations are as follows:

due by period

Protection Program Loans

Finance Facility

Payable Bank - Export Refinance

Payable Bank - Export Refinance II

Payable Bank - Export Refinance III

Finance Facility

Finance Leases

Lease Obligations

Payment due by period

Contractual Obligation

More than 5 years

Debt Obligations

D&O Insurance

Term Finance Facility

Loan Payable Bank - Export Refinance

Loan Payable Bank - Export Refinance II

Loan Payable Bank - Export Refinance III

Term Finance Facility

Sale and Leaseback Financing

Insurance financing

Subsidiary Finance Leases

Operating Lease Obligations

Sheet Arrangements

do not maintain any off-balance sheet arrangements, transactions, obligations or other relationships with unconsolidated entities

that would be expected to have a material current or future effect upon our financial condition or results of operations.

do not maintain any off-balance sheet arrangements, transactions, obligations or other relationships with unconsolidated entities that

would be expected to have a material current or future effect upon our financial condition or results of operations.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity