What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-02-14 compared with 2021-11-12 · 493 added, 472 removed, 655 unchanged (60% of the section changed)

10 unchanged sentences

current assets

Revenues in excess of billings,

net - long term

in excess of billings, net - long term

note receivable - related party, net of allowance of $ 4,250,000 and $ 4,250,000

Property and equipment, net

Right of use of assets - operating

Long term investment

Intangible assets, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

Accounts payable and accrued

Current portion of loans and

obligations under finance leases

Current portion of operating

lease obligations

Total current liabilities

Loans and obligations under

finance leases;

and equipment, net

of use of assets - operating leases

term investment

AND STOCKHOLDERS’ EQUITY

payable and accrued expenses

portion of loans and obligations under finance leases

portion of operating lease obligations

current liabilities

and obligations under finance leases;

less current maturities

1 unchanged sentence

less current maturities

Total liabilities

and contingencies

Stockholders’

Preferred stock, $ .01 par value;

stock, $ .01 par value;

500,000 shares authorized;

stock, $ .01 par

14,500,000 shares

12,183,570 shares issued and 11,244,539

outstanding as of September 30, 2021 and 12,181,585

shares issued and 11,265,064

outstanding as of June 30, 2021

Additional paid-in-capital

Treasury stock (at cost, 939,031 shares and 916,521 shares as

of September 30, 2021 and June 30, 2021, respectively)

stock, $ .01 par value;

14,500,000 shares authorized;

12,186,070 shares issued and 11,247,039 outstanding as of December 31, 2021

and 12,181,585 shares issued and 11,265,064 outstanding as of June 30, 2021

paid-in-capital

stock (at cost, 939,031 shares and 916,521 shares as of December 31, 2021 and June 30, 2021, respectively)

( 3,920,856 )

( 3,820,750 )

Accumulated deficit

( 37,206,528 )

3 unchanged sentences

( 31,868,481 )

Total NetSol stockholders’

NetSol stockholders’ equity

Non-controlling

5 unchanged sentences

Consolidated Statements of Operations

For the Three Months

Ended September 30,

Net Revenues:

Subscription and support

Total net revenues

the Three Months

the Six Months

and consultants

and amortization

cost of revenues

Salaries and consultants

Depreciation and amortization

Total cost of revenues

and marketing

and amortization

and administrative

and development cost

operating expenses

Selling and marketing

Depreciation and amortization

General and administrative

Research and development cost

Total operating expenses

Income (loss) from operations

Other income and (expenses)

from operations

income and (expenses)

(loss) on sale of assets

Interest expense

Interest income

Gain 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

Net income per share:

Net income per common share

Weighted average number of shares outstanding

(loss) on foreign currency exchange transactions

of net loss from equity investment

other income (expenses)

income before income taxes

tax provision

income (loss)

Non-controlling

( 1,031,763 )

( 1,394,289 )

income (loss) attributable to NetSol

$ ( 242,104 )

income (loss) per share:

income (loss) per common share

Weighted average

number of shares outstanding

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

Consolidated Statements of Comprehensive Income (Loss)

For the Three

September 30,

the Three Months

the Six Months

income (loss)

$ ( 242,104 )

comprehensive income (loss):

Translation adjustment

( 1,466,995 )

( 4,751,391 )

adjustment attributable to non-controlling interest

Net translation

translation adjustment

( 3,067,148 )

6 unchanged sentences

Consolidated Statement of Stockholders’ Equity

statement of the changes in equity for the three months ended September 30, 2021 is provided below:

statement of the changes in equity for the three months ended December 31, 2021 is provided below:

Stockholders’

Balance at June 30, 2021

$ 129,030,982

2 unchanged sentences

$ ( 34,013,886 )

Cumulative effect adjustment (1)

effect adjustment (1)

Subsidiary common stock issued for:

Common stock issued for:

stock issued for:

Purchase of treasury shares

Foreign currency translation adjustment

Fair value of subsidiary

options issued

currency translation adjustment

( 1,466,995 )

income for the year

$ 129,042,021

$ ( 3,920,856 )

Balance at September 30, 2021

$ ( 37,206,528 )

$ ( 34,935,629 )

statement of the changes in equity for the three months ended September 30, 2021 is provided below:

Stockholders’

$ 129,018,826

$ ( 3,820,750 )

$ ( 38,801,282 )

$ ( 31,868,481 )

common stock issued for:

stock issued for:

Purchase of treasury

currency translation adjustment

( 2,145,405 )

( 1,138,991 )

( 3,284,396 )

$ 129,030,982

$ ( 3,920,856 )

$ ( 38,613,313 )

$ ( 34,013,886 )

The accompanying notes are

an integral part of these unaudited condensed consolidated financial statements.

TECHNOLOGIES, INC.

AND SUBSIDIARIES

Consolidated Statement of Stockholders’ Equity

statement of the changes in equity for the three months ended December 31, 2020 is provided below:

Stockholders’

$ 128,764,618

$ ( 1,920,645 )

$ ( 39,861,985 )

$ ( 33,210,231 )

stock issued for:

Purchase of treasury

currency translation adjustment

income (loss) for the period

$ 128,823,181

$ ( 2,848,640 )

$ ( 40,104,089 )

$ ( 32,060,151 )

statement of the changes in equity for the three months ended September 30, 2020 is provided below:

Stockholders’

Balance at June 30, 2020

$ 128,677,754

2 unchanged sentences

$ ( 34,085,047 )

Cumulative effect adjustment (1)

$ 128,677,754

$ ( 1,455,969 )

Subsidiary common stock issued for:

$ ( 34,269,817 )

$ ( 34,085,047 )

effect adjustment (1)

( 6,309,722 )

( 6,784,300 )

common stock issued for:

Purchase of treasury shares

Foreign currency translation adjustment

Balance at September 30, 2020

stock issued for:

Purchase of treasury

currency translation adjustment

Net income (loss)

$ 128,764,618

2 unchanged sentences

$ ( 33,210,231 )

$ 128,764,618

$ ( 1,920,645 )

$ ( 39,861,985 )

$ ( 33,210,231 )

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

Consolidated Statements of Cash Flows

For the Three Months

Ended September 30,

Cash flows from operating activities:

Adjustments to reconcile net income to net cash provided by operating

Depreciation and amortization

Provision for bad debts

Share of net loss from investment under equity method

Loss on sale of assets

Stock based compensation

Changes in operating assets and liabilities:

Accounts receivable

the Six Months

flows from operating activities:

to reconcile net income to net cash provided by (used in) operating activities:

and amortization

for bad debts

of net loss from investment under equity method

on sale of assets

based compensation

in operating assets and liabilities:

( 3,243,348 )

Revenues in excess of billing

in excess of billing

( 4,741,806 )

Other current assets

Accounts payable and accrued expenses

Unearned revenue

current assets

payable and accrued expenses

cash provided by (used in) operating activities

( 3,036,634 )

flows from investing activities:

of property and equipment

( 1,249,895 )

Net cash provided by (used in) operating activities

of property and equipment

in associates

cash used in investing activities

( 1,219,701 )

Cash flows from investing activities:

Purchases of property and equipment

Sales of property and equipment

Investment in associates

Net cash used in investing activities

Cash flows from financing activities:

Purchase of treasury stock

Proceeds from bank loans

Payments on finance lease obligations and loans - net

Net cash provided by (used in) financing activities

Effect of exchange rate changes

flows from financing activities:

of treasury stock

( 1,392,671 )

Net increase (decrease) in cash and cash equivalents

from bank loans

on finance lease obligations and loans - net

cash used in financing activities

of exchange rate changes

( 3,881,870 )

Cash and cash equivalents at beginning of the period

Cash and cash equivalents at end of period

increase (decrease) in cash and cash equivalents

( 8,117,639 )

and cash equivalents at beginning of the period

and cash equivalents at end of period

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

For the Three Months

Ended September 30,

SUPPLEMENTAL DISCLOSURES:

Cash paid during the period for:

the Six Months

paid during the period for:

INVESTING AND FINANCING ACTIVITIES:

acquired under finance lease

shares acquired for services rendered

issued to vendor for services received

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

65 unchanged sentences

maintains two bank accounts in China and six bank accounts in the UK.

As of September 30, 2021, and June 30, 2021, the Company had uninsured

As of December 31, 2021, and June 30, 2021, the Company had uninsured

deposits related to cash deposits in accounts maintained within foreign entities of approximately $ 23,506,089 and $ 31,662,035 , respectively.

26 unchanged sentences

to Condensed Consolidated Financial Statements

Company’s financial assets that were measured at fair value on a recurring basis as of September 30, 2021, were as follows:

Company’s financial assets that were measured at fair value on a recurring basis as of December 31, 2021, were as follows:

SCHEDULE OF FAIR VALUE OF FINANCIAL ASSETS MEASURED ON RECURRING BASIS

Revenues in excess of billings - long term

in excess of billings - long term

Company’s financial assets that were measured at fair value on a recurring basis as of June 30, 2021, were as follows:

Revenues in excess of billing - long term

reconciliation from June 30, 2021 to September 30, 2021 is as follows:

in excess of billing - long term

reconciliation from June 30, 2021 to December 31, 2021 is as follows:

SCHEDULE OF FAIR VALUE OF FINANCIAL INSTRUMENTS RECONCILIATION

Revenues in excess of billings - long term

Fair value discount

Balance at June 30, 2021

Amortization during the period

Effect of Translation Adjustment

Balance at September 30, 2021

in excess of billings - long term

value discount

at June 30, 2021

during the period

of Translation Adjustment

at December 31, 2021

analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from

43 unchanged sentences

results of operations or disclosures based on the current debt portfolio and capital structure.

October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities

from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized

in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, as if the acquirer

had originated the contracts.

ASU 2021-08 is effective for annual periods beginning after December 15, 2022, and interim periods within

those years, with early adoption permitted.

The Company does not expect the standard to have a material effect on its consolidated financial

other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable.

28 unchanged sentences

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

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

3 unchanged sentences

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

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

37 unchanged sentences

typically due 30 days after invoice.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

and Internet Services

3 unchanged sentences

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

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

Disaggregated

3 unchanged sentences

SCHEDULE OF DISAGGREGATED REVENUE BY CATEGORY

For the Three Months

Ended September 30,

Subscription and support

Total core revenue, net

Total non-core revenue, net

Total net revenue

the Three Months

the Six Months

- related party

core revenue, net

non-core revenue, net

to the complexity of certain contracts, the actual revenue recognition treatment required under Topic 606 for the Company’s arrangements

20 unchanged sentences

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

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

3 unchanged sentences

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

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

27 unchanged sentences

OF REVENUES IN EXCESS OF BILLINGS AND DEFERRED REVENUE

September 30, 2021

December 31, 2021

June 30, 2021

Revenues in excess of billings

Unearned revenue

the three months ended September 30, 2021, the Company recognized revenue of $ 1,996,511 that was included in the deferred revenue balance

in excess of billings

the six months ended December 31, 2021, the Company recognized revenue of $ 2,710,059 that was included in the deferred revenue balance

at the beginning of the period.

5 unchanged sentences

or partially unsatisfied, which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods.

Contracted but unsatisfied performance obligations were approximately $ 44,365,579 as of September 30, 2021, of which the Company estimates

Contracted but unsatisfied performance obligations were approximately $ 45,996,382 as of December 31, 2021, of which the Company estimates

to recognize approximately $ 16,566,939 in revenue over the next 12 months and the remainder over an estimated 6 years thereafter.

42 unchanged sentences

components of basic and diluted earnings per share were as follows:

SCHEDULE OF COMPONENTS OF BASIC AND DILUTED EARNINGS PER SHARE

For the three months ended September 30, 2021

Basic income per share:

Net income available to common shareholders

Effect of dilutive securities

Diluted income per share

For the three months ended September 30, 2020

Basic income per share:

Net income available to common shareholders

Effect of dilutive securities

Diluted income per share

OF COMPONENTS OF BASIC AND DILUTED EARNINGS PER SHARE

the three months ended December 31, 2021

the six months ended

December 31, 2021

Basic income per

income available to common shareholders

of dilutive securities

income per share

the three months ended December 31, 2020

the six months ended

December 31, 2020

Basic income (loss)

income (loss) available to common shareholders

$ ( 242,104 )

of dilutive securities

income per share

$ ( 242,104 )

the three months ended December 31, 2020, 41,112 share grants were excluded from the shares used to calculate diluted earnings per share

as their inclusion would have been anti-dilutive.

5 – OTHER COMPREHENSIVE INCOME AND FOREIGN CURRENCY

11 unchanged sentences

Accumulated translation losses classified as an item of accumulated other comprehensive loss in the stockholders’

equity section of the consolidated balance sheet were $ 34,013,886 and $ 31,868,481 as of September 30, 2021 and June 30, 2021, respectively.

During the three months ended September 30, 2021 and 2020, comprehensive income (loss) in the consolidated statements of comprehensive

income (loss) included a translation loss attributable to NetSol of $ ( 2,145,405 ) and a translation gain of $ 874,816 , respectively.

equity section of the consolidated balance sheet were $ 34,935,629 and $ 31,868,481 as of December 31, 2021 and June 30, 2021, respectively.

During the three and six months ended December 31, 2021, comprehensive income (loss) in the consolidated statements of comprehensive

income (loss) included a translation loss attributable to NetSol of $ ( 921,743 ) and $ ( 3,067,148 ) , respectively.

During the three and six

months ended December 31, 2020, comprehensive income (loss) in the consolidated statements of comprehensive income (loss) included a

translation gain attributable to NetSol of $ 1,150,080 and $ 2,024,896 , respectively.

TECHNOLOGIES, INC.

1 unchanged sentence

6 – MAJOR CUSTOMERS

the three months ended September 30, 2021, revenues from Daimler Financial Services (“DFS”) and BMW Financial (“BMW”)

the six months ended December 31, 2021, revenues from Daimler Financial Services (“DFS”) and BMW Financial (“BMW”)

were $ 11,421,688 and $ 1,531,588 , respectively representing 39.5 % and 5.3 %, respectively of revenues.

During the three months ended September

During the six months ended December

31, 2020 revenues from these two customers were $ 5,402,152 and $ 3,051,244 , respectively representing 21.0 % and 11.8 %, respectively of

The revenue from these customers are shown in the Asia – Pacific segment.

receivable from DFS and BMW at September 30, 2021, were $ 1,198,049 and $ 189,964 , respectively.

receivable from DFS and BMW at December 31, 2021, were $ 1,163,468 and $ 1,601,071 , respectively.

Accounts receivable at June 30, 2021,

were $ 462,861 and $ 35,063 , respectively.

Revenues in excess of billings at September 30, 2021 were $ 2,987,736 and $ 5,158,269 for DFS

and BMW, respectively.

Revenues in excess of billings at December 31, 2021 were $ 8,336,839 and $ 3,326,380 for DFS and

BMW, respectively.

Revenues in excess of billings at June 30, 2021, were $ 2,041,750 and $ 4,453,299 for DFS and BMW, respectively.

8 unchanged sentences

following table summarizes the convertible notes receivable from WRLD3D.

SCHEDULE OF CONVERTIBLE NOTES

March 2, 2018

OF CONVERTIBLE NOTES

February 9, 2018

March 31, 2019

April 1, 2019

March 31, 2020

August 19, 2019

March 31, 2020

Less allowance for doubtful

allowance for doubtful account

( 4,250,000 )

Company has accrued interest of $ 701,062 at September 30, 2021 and June 30, 2021, which is included in “Other current assets”.

Company has accrued interest of $ 701,062 at December 31, 2021 and June 30, 2021, which is included in “Other current assets”.

As of July 1, 2020, the Company stopped accruing interest.

4 unchanged sentences

OF OTHER CURRENT ASSETS

September 30,

Prepaid Expenses

Advance Income Tax

Employee Advances

Security Deposits

Other Receivables

Due From Related Party

Less allowance for doubtful account

December 31, 2021

June 30, 2021

From Related Party

allowance for doubtful account

( 1,243,633 )

from related party is the amount receivable from WRLD3D for which we have provided an allowance for credit loss for the full amount,

leaving a net balance of $ 0 .

9 – REVENUES IN EXCESS OF BILLINGS – LONG TERM

in excess of billings, net consisted of the following:

SCHEDULE OF REVENUES IN EXCESS OF BILLINGS

September 30,

Revenues in excess of billings - long term

Present value discount

OF REVENUE IN EXCESS OF BILLING

in excess of billings - long term

value discount

to revenue recognition for contract accounting, the Company had recorded revenues in excess of billings long-term for amounts billable

after one year.

During the three months ended September 30, 2021 and 2020, the Company accreted $ 9,502 and $ 14,060 , respectively, which

was recorded in interest income for that period.

The Company used the discounted cash flow method with interest rates ranging from 4.65 %

During the three and six months ended December 31, 2021, the Company accreted $ 9,539 and $ 19,041 , respectively.

the three and six months ended December 31, 2020, the Company accreted $ 27,766 and $ 41,826 , respectively, which was recorded in interest

income for that period.

The Company used the discounted cash flow method with interest rates ranging from 4.65 % to 6.25 %.

TECHNOLOGIES, INC.

2 unchanged sentences

and equipment consisted of the following:

SCHEDULE OF PROPERTY AND EQUIPMENT

September 30,

Office Furniture and Equipment

Computer Equipment

Assets Under Capital Leases

Accumulated Depreciation

OF PROPERTY AND EQUIPMENT

December 31, 2021

June 30, 2021

Furniture and Equipment

Under Capital Leases

( 16,797,295 )

( 20,785,781 )

Property and Equipment, Net

the three months ended September 30, 2021 and 2020, depreciation expense totaled $ 539,722 and $ 496,267 , respectively.

and Equipment, Net

the three and six months ended December 31, 2021, depreciation expense was $ 527,463

and $ 1,067,185 ,

respectively.

Of these amounts, $ 314,599

$ 325,451 and $ 274,477 , respectively, are reflected in cost of revenues.

is a summary of fixed assets held under finance leases as of September 30, 2021 and June 30, 2021:

OF FIXED ASSETS HELD UNDER FINANCE LEASES

September 30,

Computers and Other Equipment

Furniture and Fixtures

and $ 640,050 ,

respectively, are reflected in cost of revenues.

For the three and six months ended December 31, 2020, depreciation expense was

$ 485,456 and

respectively.

Of these amounts, $ 263,884

and $ 538,361 ,

respectively, are reflected in cost of revenues.

is a summary of fixed assets held under finance leases as of December 31, 2021 and June 30, 2021:

OF FIXED ASSETS HELD UNDER CAPITAL LEASES

December 31, 2021

June 30, 2021

and Other Equipment

Accumulated Depreciation - Net

lease term and discount rate were as follows:

SCHEDULE OF FINANCE LEASE TERM

September 30,

Weighted average remaining lease term - Finance leases

Weighted average discount rate - Finance leases

OF FINANCE LEASE TERM

December 31, 2021

June 30, 2021

average remaining lease term - Finance leases

average discount rate - Finance leases

TECHNOLOGIES, INC.

10 unchanged sentences

represent the Company’s obligation to make payments over the life of the lease.

A ROU asset and a lease liability are recognized at commencement

of the lease based on the present value of the lease payments over the life of the lease.

Initial direct costs are included as part of

the ROU asset upon commencement of the lease.

Since the interest rate implicit in a lease is generally not readily determinable for the

operating leases, the Company uses an incremental borrowing rate to determine the present value of the lease payments.

A ROU asset and a lease liability are recognized

at commencement of the lease based on the present value of the lease payments over the life of the lease.

Initial direct costs are included

as part of the ROU asset upon commencement of the lease.

Since the interest rate implicit in a lease is generally not readily determinable

for the operating leases, the Company uses an incremental borrowing rate to determine the present value of the lease payments.

The incremental

13 unchanged sentences

based on a change in the Karachi Inter Bank Offer Rate.

The Company’s lease agreements do not contain any significant residual value

guarantees or restrictive covenants.

The Company’s lease agreements do not contain any significant residual

value guarantees or restrictive covenants.

balance sheet information related to leases was as follows:

SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO LEASES

September 30,

Operating lease assets, net

OF BALANCE SHEET INFORMATION RELATED TO LEASE

lease assets, net

Operating, current

Operating, non-current

Total Lease Liabilities

Lease Liabilities

TECHNOLOGIES, INC.

1 unchanged sentence

components of lease cost were as follows:

SCHEDULE OF COMPONENTS OF LEASE COST

For the Three Months

Ended September 30,

Amortization of finance lease assets

Interest on finance lease obligation

Operating lease cost

Short term lease cost

Sub lease income

Total lease cost

OF COMPONENTS OF LEASE COST

the Three Months

the Six Months

of finance lease assets

on finance lease obligation

term lease cost

term and discount rate were as follows:

SCHEDULE OF LEASE TERM AND DISCOUNT RATE

September 30,

Weighted average remaining lease term - Operating leases

Weighted average discount rate - Operating leases

OF LEASE TERM AND DISCOUNT RATE

average remaining lease term - Operating leases

average discount rate - Operating leases

disclosures of cash flow information related to leases were as follows:

SCHEDULE OF SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION RELATED TO LEASES

For the Three Months

Ended September 30

Cash flows related to lease liabilities

Operating cash flows related to operating leases

Operating cash flows from finance leases

Financing cash flows from finance leases

OF SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION RELATED TO LEASES

the Six Months

flows related to lease liabilities

cash flows related to operating leases

cash flows from finance leases

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

of operating lease liabilities were as follows as of September 30, 2021:

SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES

Within year 1

Within year 2

Within year 3

Within year 4

Within year 5

Total Lease Payments

of operating lease liabilities were as follows as of December 31, 2021:

OF MATURITIES OF OPERATING LEASE LIABILITIES

Lease Payments

Imputed interest

Present Value of lease liabilities

Present Value of

lease liabilities

Current portion

Non-Current portion

Company is a lessor for certain office space leased by the Company and sub-leased to others under non-cancelable leases.

2 unchanged sentences

are no rights to purchase the premises and no residual value guarantees.

For the three months ended September 30, 2021 and 2020, the

Company received lease income of $ 9,155 and $ 8,624 , respectively.

For the three and six months ended December 31, 2021, the Company

received lease income of $ 8,950 and $ 18,105 , respectively.

For the three and six months ended December 31, 2020, the Company received

lease income of $ 8,738 and $ 17,362 , respectively.

12 – LONG TERM INVESTMENT

8 unchanged sentences

final payment date.

As of September 30, 2021, the Company has been issued 8,178 shares equal to 30% of Drivemate.

As of December 31, 2021, the Company has been issued 8,178 shares equal to 30% of Drivemate.

Per the Drivemate Agreement,

4 unchanged sentences

investment using the equity method of accounting .

Company did no t provide any services during the three months ended September 30, 2021 and 2020.

the equity method of accounting, the Company recorded its share of net loss of $ 63,571 compared to its share of net income of $ 595 for

the three months ended September 30, 2021 and 2020, respectively.

Company provided services of $ 12,528 during the three and six months ended December 31, 2021 and did no t provide any services during

the three and six months ended December 31, 2020.

the equity method of accounting, the Company recorded its share of net income of $ 4,666 and net loss of $ 58,905 for the three and six

months ended December 31, 2021, respectively and the Company recorded its share of net income of $ 3,324 and $ 3,919 for the three and

six months ended December 31, 2020, respectively.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

WRLD3D-Related

4 unchanged sentences

for $ 2,777,778 which was earned by providing IT and enterprise software solutions.

PK has no t provided services to WRLD3D for the three months ended September 30, 2021 and September 30, 2020.

Accounts receivable and

revenue in excess of billing were $ 1,373,099 and $ 8,163 at September 30, 2021, respectively.

PK has no t provided services to WRLD3D for the three and six months ended December 31, 2021 and December 31, 2020.

Accounts receivable

and revenue in excess of billing were $ 1,373,099 and $ 8,163 at December 31, 2021, respectively.

The Company has established an allowance

for the full amounts of these accounts.

the equity method of accounting, the Company recorded its share of net loss of $ 97,394 and $ 108,445 for the three months ended September

30, 2021 and 2020, respectively.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

following table reflects the above investments at September 30, 2021.

SCHEDULE OF LONG TERM INVESTMENT

Gross investment

Cumulative net loss on investment

the equity method of accounting, the Company recorded its share of net loss of $ 84,484 and $ 181,878 for the three and six months ended

December 31, 2021, and the Company recorded its share of net loss of $ 47,009 and $ 155,454 for the three and six months ended December

31, 2020, respectively.

following table reflects the above investments at December 31, 2021.

OF LONG TERM INVESTMENT

net loss on investment

( 2,103,266 )

( 2,206,787 )

Cumulative other comprehensive income (loss)

Net investment

other comprehensive income (loss)

13 - INTANGIBLE ASSETS

assets consisted of the following:

SCHEDULE OF INTANGIBLE ASSETS

September 30,

Product Licenses - Cost

Effect of Translation Adjustment

OF INTANGIBLE ASSETS

December 31, 2021

June 30, 2021

Licenses - Cost

of Translation Adjustment

( 16,960,809 )

( 14,440,001 )

Accumulated Amortization

( 27,626,984 )

4 unchanged sentences

over the next 1.75 years.

Amortization expense for the three months ended September 30, 2021 and 2020 was $ 440,284 and $ 432,772 , respectively.

Amortization expense for the three and six months ended December 31, 2021was $ 414,269 and $ 854,553 , respectively.

Amortization expense for the three and six months ended December 31, 2020 was $ 449,865 and $ 882,637 , respectively.

Future Amortization

amortization expense of intangible assets is as follows:

SUMMARY OF ESTIMATED AMORTIZATION EXPENSE OF INTANGIBLE ASSETS

Period ended:

September 30, 2022

September 30, 2023

14 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

payable and accrued expenses consisted of the following:

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

September 30,

Accounts Payable

Accrued Liabilities

Accrued Payroll & Taxes

Taxes Payable

Other Payable

OF ESTIMATED AMORTIZATION EXPENSE OF INTANGIBLE ASSETS

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

14 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

payable and accrued expenses consisted of the following:

OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

June 30, 2021

Accrued Payroll

Payroll Taxes

payable and finance leases consisted of the following:

SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES

As of September 30, 2021

D&O Insurance

Bank Overdraft Facility

Term Finance Facility

Loan Payable Bank - Export Refinance

Loan Payable Bank - Running Finance

Loan Payable Bank - Export Refinance II

Loan Payable Bank - Running Finance II

Loan Payable Bank - Export Refinance III

Sale and Leaseback Financing

Term Finance Facility

Insurance Financing

Subsidiary Finance Leases

As of June 30, 2021

D&O Insurance

Bank Overdraft Facility

Term Finance Facility

Loan Payable Bank - Export Refinance

Loan Payable Bank - Running Finance

Loan Payable Bank - Export Refinance II

Loan Payable Bank - Running Finance II

Loan Payable Bank - Export Refinance III

Sale and Leaseback Financing

Term Finance Facility

Insurance Financing

Subsidiary Finance Leases

OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES

of December 31, 2021

Overdraft Facility

Finance Facility

Payable Bank - Export Refinance

Payable Bank - Running Finance

Payable Bank - Export Refinance II

Payable Bank - Running Finance II

Payable Bank - Export Refinance III

and Leaseback Financing

Finance Facility

Finance Leases

of June 30, 2021

Overdraft Facility

Finance Facility

Payable Bank - Export Refinance

Payable Bank - Running Finance

Payable Bank - Export Refinance II

Payable Bank - Running Finance II

Payable Bank - Export Refinance III

and Leaseback Financing

Finance Facility

Finance Leases

The Company finances Directors’ and Officers’ (“D&O”)

2 unchanged sentences

The interest rate on these financings were ranging from

5.0 % to 7.0 % as of September 30, 2021 and June 30, 2021.

Company’s subsidiary, NTE, has an overdraft facility with HSBC Bank plc whereby the bank would cover any overdrafts up to £ 300,000 ,

or approximately $ 405,405 .

The annual interest rate was 5.12 %

as of September 30, 2021.

The total outstanding balance as of September 30, 2021 was £ Nil .

5.0 % to 7.0 % as of December 31, 2021 and June 30, 2021.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

This overdraft

facility 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.

September 30, 2021, NTE was in compliance with this covenant.

The Company’s subsidiary, NTE, has an overdraft facility with HSBC Bank plc whereby the bank

would cover any overdrafts up to £ 300,000 , or approximately $ 405,405 .

The annual interest rate was 5.12 % as of September 30, 2021.

The total outstanding balance as of September 30, 2021 was £ Nil .

This overdraft facility 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.

As of September 30, 2021, NTE was in compliance with this covenant.

The Company’s subsidiary, NetSol PK, has a term finance

facility from Askari Bank Limited, approved by the Government of Pakistan to protect the employment situation during the COVID-19 pandemic.

(2) The Company’s

subsidiary, NTE, has an overdraft facility with HSBC Bank plc whereby the bank would cover any overdrafts up to £ 300,000 , or approximately

The annual interest rate was 5.12 % as of December 31, 2021.

The total outstanding balance as of December 31, 2021 and June

30, 2021 was £ Nil .

This overdraft facility

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.

As of December 31, 2021, NTE was in compliance with this covenant.

(2) The Company’s

subsidiary, NTE, has an overdraft facility with HSBC Bank plc whereby the bank would cover any overdrafts up to £ 300,000 , or approximately

The annual interest rate was 5.12 % as of December 31, 2021.

The total outstanding balance as of December 31, 2021 and June

30, 2021 was £ Nil .

Thisoverdraft facility

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.

As of December 31, 2021, NTE

was in compliance with this covenant.

(3) The Company’s

subsidiary, NetSol PK, has a term finance facility from Askari Bank Limited, approved by the Government of Pakistan to protect the employment

situation during the COVID-19 pandemic.

This is a term loan payable in three years.

The availed facility amount was Rs.

217,248,351 or $ 1,270,755 , at September 30, 2021, of

which $ 990,623 is shown as current and the remaining $ 280,132 is shown as long term.

173,797,255 or

$ 979,250 , at December 31, 2021, which is shown as current.

The availed facility amount was Rs.

or $ 1,648,818 , at June 30, 2021, of which $ 1,090,259 is shown as current and the remaining $ 558,559 is shown as long term.

rate for the loan was 3 % at September 30, 2021 and June 30, 2021.

The Company’s subsidiary, NetSol PK, has an export refinance

facility with Askari Bank Limited, secured by NetSol PK’s assets.

This is a revolving loan that matures every nine months.

total facility amount is Rs.

500,000,000 or $ 2,924,661 at September 30, 2021 and Rs.

260,678,818 or $ 1,648,818 , at June 30,

interest rate for the loan was 3 % at September 30, 2021 and June 30, 2021.

The Company’s subsidiary, NetSol PK, has a running finance

facility with Askari Bank Limited, secured by NetSol PK’s assets.

2021, of which $ 1,090,259 is shown as current and the remaining $ 558,559 is shown as long term.

The interest rate for the loan was 3 %

at December 31, 2021 and June 30, 2021.

(4) The Company’s

subsidiary, NetSol PK, has an export refinance facility with Askari Bank Limited, secured by NetSol PK’s assets.

This is a revolving

loan that matures every nine months.

The total facility amount is Rs.

75,000,000 or $ 438,699 , at September

The balance outstanding at September 30, 2021 and June 30, 2021 was Rs.

The interest rate for the loan was 9.8 % and 9.5 %

at September 30, 2021 and June 30, 2021, respectively.

This facility

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

As of September 30, 2021, NetSol

PK was in compliance with this covenant.

500,000,000 or $ 2,817,219 at December 31, 2021 and Rs.

or $ 3,162,555 at June 30, 2021.

The interest rate for the loan was 3 % at December 31, 2021 and June 30, 2021.

(5) The Company’s

subsidiary, NetSol PK, has a running finance facility with Askari Bank Limited, secured by NetSol PK’s assets.

The total facility

amount is Rs.

75,000,000 or $ 422,583 , at December 31, 2021.

The balance outstanding at December 31, 2021 and June 30, 2021 was Rs.

The interest rate for the loan was 12.5 % and 9.5 % at December 31, 2021 and June 30, 2021, respectively.

This facility requires NetSol PK to maintain a long-term debt equity ratio of 60:40 and the current ratio of 1:1.

As of December 31, 2021, NetSol PK was in compliance with this covenant .

Company’s subsidiary, NetSol PK, has a running finance facility with Askari Bank Limited, secured by NetSol PK’s assets.

The total facility amount is Rs.

75,000,000 or $ 438,699 , at September 30, 2021.

The balance outstanding at September 30, 2021 and June 30, 2021 was Rs.

The interest rate for the loan was 9.8 % and 9.5 % at September 30, 2021 and June 30, 2021, respectively.

This facility requires NetSol PK to maintain a long-term debt equity ratio of 60:40 and the current ratio of 1:1.

As of September 30, 2021, NetSol PK was in compliance with this covenant.

The Company’s subsidiary, NetSol PK, has an export refinance

facility with Samba Bank Limited, secured by NetSol PK’s assets.

This is a revolving loan that matures every nine months.

facility amount is Rs.

75,000,000 or $ 422,583 , at December 31, 2021.

The balance outstanding at December 31, 2021 and June

30, 2021 was Rs.

The interest rate for the loan was 12.5 % and 9.5 % at December 31, 2021 and June 30, 2021, respectively.

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

As of December 31,

2021, NetSol PK was in compliance with this covenant.

(6) The Company’s

subsidiary, NetSol PK, has an export refinance facility with Samba Bank Limited, secured by NetSol PK’s assets.

This is a revolving

loan that matures every nine months.

The total facility amount is Rs.

380,000,000 or $ 2,141,086 and Rs.

380,000,000 or $ 2,403,542 at September 30, 2021 and June 30, 2021, respectively.

The interest rate for the loan was 3 % at September 30, 2021 and June 30, 2021.

380,000,000 or $ 2,403,542 at

December 31, 2021 and June 30, 2021, respectively.

The interest rate for the loan was 3 % at December 31, 2021 and June 30, 2021.

(7) The Company’s

subsidiary, NetSol PK, has a running finance facility with Samba Bank Limited, secured by NetSol PK’s assets.

facility amount is Rs.

The total facility

amount is Rs.

120,000,000 or $ 676,133 and Rs.

120,000,000 or $ 759,013 , at December 31, 2021 and June 30, 2021, respectively.

rate for the loan was 12.0 % and 9.0 % at December 31, 2021 and June 30, 2021, respectively.

The balance outstanding at December 31, 2021

and June 30, 2021 was Rs.

During the tenure of the

loan, the facilities from Samba Bank Limited 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.

As of December 31, 2021, NetSol PK was

in compliance with these covenants.

Company’s subsidiary, NetSol PK, has an export refinance facility with Habib Metro Bank Limited, secured by NetSol PK’s assets.

This is a revolving loan that matures every nine months.

The total facility amount is Rs.

or $ 5,070,994

at September 30, 2021 and June 30, 2021, respectively.

The interest rate for the loan was 9.3 %

at September 30, 2021 and June 30, 2021, respectively.

The balance outstanding at September 30, 2021 and June 30, 2021 was Rs.

tenure of the loan, the facilities from Samba Bank Limited 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.

As of September 30,

2021, NetSol PK was in compliance with these covenants.

The Company’s

subsidiary, NetSol PK, has a running finance facility with Samba Bank Limited, secured by NetSol PK’s assets.

facility amount is Rs.

or $ 5,692,600 ,

at September 30, 2021 and June 30, 2021, respectively.

The interest rate for the loan was 9.3 %

at September 30, 2021 and June 30, 2021, respectively.

The balance outstanding at September 30, 2021 and June 30, 2021 was Rs.

tenure of the loan, the facilities from Samba Bank Limited 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.

As of September 30,

2021, NetSol PK was in compliance with these covenants.

The Company’s subsidiary, NetSol PK, has an export refinance

facility with Habib Metro Bank Limited, secured by NetSol PK’s assets.

This is a revolving loan that matures every nine months.

Total facility amount is Rs.

900,000,000 or $ 5,264,389 and Rs.

900,000,000 or $ 5,692,600 , at September 30, 2021 and June 30, 2021, respectively.

at December 31, 2021 and June 30, 2021, respectively.

NetSol PK used Rs.

700,000,000 or $ 4,094,525 and Rs.

700,000,000 or $ 4,427,578 , at September 30, 2021 and June 30, 2021, respectively.

The interest rate for the loan was 3 % at September 30, 2021 and June 30, 2021.

The Company’s subsidiary, NetSol PK, availed sale and

leaseback financing from First Habib Modaraba secured by the transfer of the vehicles’ title.

As of June 30, 2021, NetSol PK used

or $ 3,944,107

or $ 4,427,578 ,

at December 31, 2021 and June 30, 2021, respectively.

The interest rate for the loan was 3 %

at December 31, 2021 and June 30, 2021.

(9) The Company’s

subsidiary, NetSol PK, availed sale and leaseback financing from First Habib Modaraba secured by the transfer of the vehicles’

As of December 31 2021, NetSol PK used Rs.

11,392,924 or $ 64,193 of which $ 37,751 was shown as long term and $ 26,442 as current.

1 unchanged sentence

13,487,949 or $ 85,313 of which $ 57,130 was shown as long term and $ 28,183 as current.

The interest rate for the loan was 9.0 % at September 30, 2021,

and June 30, 2021.

In March 2020, the Company’s subsidiary, VLS, entered

into a loan agreement.

The loan amount was £ 69,549 , or $ 93,985 , for a period of 5 years with monthly payments of £ 1,349 ,

As of September 30, 2021, the subsidiary has used this facility up to $ 49,021 , of which $ 29,613 was shown as long-term and

$ 19,408 as current.

As of June 30, 2021, the subsidiary has used this facility up to $ 55,182 , of which $ 35,538 was shown as long-term

and $ 19,644 as current.

The interest rate was 6.14 % at September 30, 2021 and June 30, 2021.

rate for the loan was 9.0 % at December 31, 2021, and June 30, 2021.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

The Company’s subsidiary, VLS, finances Directors’

and Officers’ (“D&O”) liability insurance, and the $ 45,198 and $ 41,774 was recorded in current maturities, at September

30, 2021 and June 30, 2021, respectively.

The interest rate on this financing ranged from 9.7 % to 12.7 % as of September 30, 2021 and

was 9.7 % as of June 30, 2021.

The Company leases various fixed assets under finance lease

arrangements expiring in various years through 2024.

The assets and liabilities under finance leases are recorded at the lower of the

present value of the minimum lease payments or the fair value of the asset.

The assets are secured by the assets themselves.

of assets under finance leases is included in depreciation expense for the three months ended September 30, 2021 and 2020.

is the aggregate minimum future lease payments under finance leases as of September 30, 2021:

SCHEDULE OF AGGREGATE FUTURE LONG TERM DEBT PAYMENTS

(10) In March 2019,

the Company’s subsidiary, VLS, entered into a loan agreement.

The loan amount was £ 69,549 , or $ 93,985 , for a period of 5

years with monthly payments of £ 1,349 , or $ 1,823 .

As of December 31, 2021, the subsidiary has used this facility up to $ 44,280 ,

of which $ 24,572 was shown as long-term and $ 19,708 as current.

As of June 30, 2021, the subsidiary has used this facility up to $ 55,182 ,

of which $ 35,538 was shown as long-term and $ 19,644 as current.

The interest rate was 6.14 % at December 31, 2021 and June 30, 2021.

(11) The Company’s

subsidiary, VLS, finances Directors’ and Officers’ (“D&O”) liability insurance, and the $ 20,264 and $ 41,774

was recorded in current maturities, at December 31, 2021 and June 30, 2021, respectively.

The interest rate on this financing ranged

from 9.7 % to 12.7 % as of December 31, 2021 and was 9.7 % as of June 30, 2021.

(12) The Company leases

various fixed assets under finance lease arrangements expiring in various years through 2024.

The assets and liabilities under finance

leases are recorded at the lower of the present value of the minimum lease payments or the fair value of the asset.

The assets are secured

by the assets themselves.

Depreciation of assets under finance leases is included in depreciation expense for the three months ended

December 31, 2021 and 2020.

is the aggregate minimum future lease payments under finance leases as of December 31, 2021:

SCHEDULE OF AGGREGATE MINIMUM FUTURE LEASE PAYMENTS UNDER CAPITAL

Lease Payments

Minimum Lease Payments

Expense relating to future periods

Value of minimum lease payments

Current portion

is the aggregate future long term debt payments as of December 31, 2021

OF AGGREGATE FUTURE LONG TERM DEBT PAYMENTS

Loan Payments

Within year 1

1 unchanged sentence

Within year 3

Total Minimum Lease Payments

Interest Expense relating to future periods

Present Value of minimum lease payments

Total Loan Payments

Current portion

( 1,025,400 )

Non-Current portion

16 - STOCKHOLDERS’ EQUITY

the three months ended September 30, 2021, the Company issued 1,985 shares of common stock for services rendered by the independent members

of the Board of Directors as part of their board compensation.

the three and six months ended December 31, 2021, the Company issued nil and 1,985 shares of common stock for services rendered by the

independent members of the Board of Directors as part of their board compensation.

These shares were valued at the fair market value

of $ 12,009 .

the three and six months ended December 31, 2021, the Company issued 2,500 shares of common stock for services received from one of its

These shares were valued at the fair market value of $ 9,900 .

the three months ended September 30, 2021, the Company purchased 22,510 shares of its own stock for $ 100,106 pursuant to the Company’s

stock repurchase plan.

17 – SHARE BASED PAYMENTS

following table summarizes stock grants awarded as compensation:

SUMMARY OF UNVESTED STOCK GRANTS AWARDED AS COMPENSATION

Weighted Average Grant Date Fair Value ($)

Unvested, June 30, 2021

Forfeited / Cancelled

Unvested, September 30, 2021

the three months ended September 30, 2021 and 2020, the Company recorded compensation expense of $ 3,003 and $ 90,617 , respectively.

compensation expense related to the unvested stock grants as of September 30, 2021 was $ 28,450 which will be recognized during the fiscal

the three and six months ended December 31, 2021, the Company purchased nil and 22,510 shares of its own stock for $ 100,106 pursuant

to the Company’s stock repurchase plan.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

17 – SHARE BASED PAYMENTS

following table summarizes stock grants awarded as compensation:

OF UNVESTED STOCK GRANTS AWARDED AS COMPENSATION

Average Grant Date Fair Value ($)

June 30, 2021

December 31, 2021

the three and six months ended December 31, 2021, the Company recorded compensation expense of $ 14,225 and $ 17,228 , respectively.

the three and six months ended December 31, 2020, the Company recorded compensation expense of $ 74,167 and $ 164,784 , respectively.

compensation expense related to the unvested stock grants as of December 31, 2021 was $ 14,225 which will be recognized during the fiscal

18 – CONTINGENCIES

22 unchanged sentences

consolidation.

following table presents a summary of identifiable assets as of September 30, 2021 and June 30, 2021:

SUMMARY OF IDENTIFIABLE ASSETS

September 30,

Identifiable assets:

Corporate headquarters

North America

Asia - Pacific

following table presents a summary of investment under equity method as of September 30, 2021 and June 30, 2021:

SUMMARY OF INVESTMENT UNDER EQUITY METHOD

September 30,

Investment in associates under equity method:

Corporate headquarters

Asia - Pacific

following table presents a summary of identifiable assets as of December 31, 2021 and June 30, 2021:

OF IDENTIFIABLE ASSETS

following table presents a summary of investment under equity method as of December 31, 2021 and June 30, 2021:

OF INVESTMENT UNDER EQUITY METHOD

in associates under equity method:

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

following table presents a summary of operating information for the three months ended September 30:

SUMMARY OF OPERATING INFORMATION

For the Three Months

Ended September 30,

Revenues from unaffiliated customers:

North America

Asia - Pacific

Revenue from affiliated customers

Asia - Pacific

Intercompany revenue

Asia - Pacific

Net income (loss) after taxes and before non-controlling interest:

Corporate headquarters

North America

Asia - Pacific

Depreciation and amortization:

North America

Asia - Pacific

Interest expense:

Corporate headquarters

North America

Asia - Pacific

Income tax expense:

Corporate headquarters

North America

Asia - Pacific

following table presents a summary of operating information for the three and six months ended December 31:

OF OPERATING INFORMATION

the Three Months

the Six Months

from unaffiliated customers:

from affiliated customers

income (loss) after taxes and before non-controlling interest:

( 1,378,400 )

( 1,743,937 )

and amortization:

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

following table presents a summary of capital expenditures for the three months ended September 30:

SUMMARY OF CAPITAL EXPENDITURES

For the Three Months

Ended September 30,

Capital expenditures:

North America

Asia - Pacific

following table presents a summary of capital expenditures for the six months ended December 31:

OF CAPITAL EXPENDITURES

the Six Months

expenditures:

20 – NON-CONTROLLING INTEREST IN SUBSIDIARY

2 unchanged sentences

SCHEDULE OF BALANCE OF NON-CONTROLLING INTEREST

Non-Controlling Interest %

Non-Controlling

September 30, 2021

Non-Controlling

Interest at December 31, 2021

NetSol-Innovation

Non-Controlling Interest %

Non-Controlling

June 30, 2021

3 unchanged sentences

effective shareholding of the non-controlling interest for OTOZ Thai increased to 5.6 %.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

21 – INCOME TAXES

12 unchanged sentences

is charged to the income from revenue generated from other than core business activities.

the three months ended September 30, 20120 and 2020, the Company recorded an income tax provision of $ 167,627 and $ 264,294 , respectively,

the three and six months ended December 31, 2021, the Company recorded an income tax provision of $ 201,506 and $ 369,133 , respectively,

resulting in an effective tax rate of 7.6 % and 11.0 %, respectively.

During the three and six months ended December 31, 2020, the Company

recorded an income tax provision of $ 245,434 and $ 509,728 , respectively, resulting in an effective tax rate of 147.6 % and 32.8 %, respectively.

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-Q

Item 1. Financial Statements