What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-05-12 compared with 2022-02-14 · 528 added, 369 removed, 779 unchanged (54% of the section changed)

2 unchanged sentences

AND SUBSIDIARIES

Consolidated Balance Sheets

Condensed Consolidated Balance Sheets

and cash equivalents

25 unchanged sentences

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

12,191,570 shares issued and 11,252,539 outstanding as

of March 31, 2022 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)

stock (at cost, 939,031 shares and 916,521 shares as of March 31, 2022 and June 30, 2021, respectively)

( 3,920,856 )

12 unchanged sentences

AND SUBSIDIARIES

Consolidated Statements of Operations

the Three Months

the Six Months

and consultants

and amortization

Condensed Consolidated Statements of Operations

For the Three Months

For the Nine Months

Ended March 31,

Net Revenues:

Subscription and support

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)

(loss) on sale of assets

(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

Selling and marketing

Depreciation and amortization

General and administrative

Research and development cost

Total operating expenses

Income (loss) from operations

Other income and (expenses)

Gain (loss) on sale of assets

Interest expense

Interest income

Gain (loss) on foreign currency exchange transactions

( 1,825,349 )

( 1,515,327 )

income (loss) attributable to NetSol

Share of net loss from equity investment

Total other income (expenses)

( 1,304,233 )

income (loss) per share:

income (loss) per common share

Weighted average

number of shares outstanding

Net income (loss) before income taxes

Income tax provision

Net income (loss)

Non-controlling interest

( 1,655,287 )

Net income (loss) attributable to NetSol

$ ( 278,470 )

$ ( 623,231 )

$ ( 147,781 )

Net income (loss) per share:

Net income (loss) per common share

Weighted average number of shares outstanding

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

TECHNOLOGIES, INC.

NETSOL TECHNOLOGIES,

AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss)

the Three Months

the Six Months

income (loss)

Condensed Consolidated Statements of Comprehensive Income (Loss)

For the Three Months

For the Nine Months

Ended March 31,

Net income (loss)

$ ( 278,470 )

comprehensive income (loss):

$ ( 623,231 )

$ ( 147,781 )

adjustment attributable to non-controlling interest

Other comprehensive income (loss):

Translation adjustment

( 2,269,229 )

Comprehensive

income (loss) attributable to NetSol

( 7,020,620 )

Translation adjustment attributable to non-controlling interest

( 1,211,174 )

Net translation adjustment

( 1,804,777 )

( 4,871,925 )

Comprehensive income (loss) attributable to NetSol

$ ( 2,083,247 )

$ ( 3,555,641 )

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

1 unchanged sentence

AND SUBSIDIARIES

Consolidated Statement of Stockholders’ Equity

Condensed Consolidated Statement of Stockholders’ Equity

statement of the changes in equity for the three months ended March 31, 2022 is provided below:

Comprehensive

Stockholders’

Balance at December 31, 2021

$ 129,042,021

$ ( 3,920,856 )

$ ( 37,206,528 )

$ ( 34,935,629 )

Common stock issued for:

Fair value of subsidiary options issued

Foreign currency translation adjustment

( 1,804,777 )

( 2,269,229 )

Net income (loss)

Balance at March 31, 2022

$ 129,084,786

$ ( 3,920,856 )

$ ( 37,484,998 )

$ ( 36,740,406 )

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

Comprehensive

Stockholders’

Balance at September 30, 2021

$ 129,030,982

2 unchanged sentences

$ ( 34,013,886 )

effect adjustment (1)

Subsidiary common stock issued for:

stock issued for:

Purchase of treasury shares

Fair value of subsidiary

options issued

currency translation adjustment

Common stock issued for:

Fair value of subsidiary options issued

Foreign currency translation adjustment

( 1,466,995 )

income for the year

Balance at December 31, 2021

$ 129,042,021

2 unchanged sentences

$ ( 34,935,629 )

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

TECHNOLOGIES, INC.

AND SUBSIDIARIES

Condensed Consolidated Statement of Stockholders’ Equity

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

Comprehensive

Stockholders’

Balance at June 30, 2021

$ 129,018,826

2 unchanged sentences

$ ( 31,868,481 )

Subsidiary common stock issued for:

Common stock issued for:

stock issued for:

Purchase of treasury

currency translation adjustment

Purchase of treasury shares

Foreign currency translation adjustment

( 2,145,405 )

1 unchanged sentence

( 3,284,396 )

Balance at September 30, 2021

$ 129,030,982

2 unchanged sentences

$ ( 34,013,886 )

The accompanying notes are

an integral part of these unaudited condensed consolidated financial statements.

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

Comprehensive

Stockholders’

Balance at December 31, 2020

$ 128,823,181

$ ( 2,848,640 )

$ ( 40,104,089 )

$ ( 32,060,151 )

Common stock issued for:

Purchase of treasury shares

Foreign currency translation adjustment

Balance at March 31, 2021

$ 128,881,744

$ ( 3,520,769 )

$ ( 40,727,320 )

$ ( 31,118,798 )

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

TECHNOLOGIES, INC.

AND SUBSIDIARIES

Consolidated Statement of Stockholders’ Equity

Condensed Consolidated Statement of Stockholders’ Equity

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

Comprehensive

Stockholders’

Balance at September 30, 2020

$ 128,764,618

2 unchanged sentences

$ ( 33,210,231 )

stock issued for:

Purchase of treasury

currency translation adjustment

income (loss) for the period

Common stock issued for:

Purchase of treasury shares

Foreign currency translation adjustment

Net income (loss)

Balance at December 31, 2020

$ 128,823,181

3 unchanged sentences

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

Comprehensive

Stockholders’

Balance at June 30, 2020

$ 128,677,754

6 unchanged sentences

$ ( 34,085,047 )

effect adjustment (1)

Cumulative effect adjustment (1)

( 6,309,722 )

( 6,784,300 )

Subsidiary common stock issued for:

Common stock issued for:

stock issued for:

Purchase of treasury

currency translation adjustment

Net income (loss)

Purchase of treasury shares

Foreign currency translation adjustment

Balance at September 30, 2020

$ 128,764,618

6 unchanged sentences

$ ( 33,210,231 )

effect adjustment relates to the adoption of Accounting Standard Update No.

2016-13, Financial Instruments – Credit Losses

Measurement of Credit Losses on Financial Instruments.

Refer to Note 2 – Accounting Policies for more information.

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

2 unchanged sentences

Consolidated Statements of Cash Flows

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:

For the Nine Months

Ended March 31,

Cash flows from operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

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

( 3,404,247 )

in excess of billing

Revenues in excess of billing

Other current assets

Accounts payable and accrued expenses

Unearned revenue

Net cash provided by operating

Cash flows from investing activities:

Purchases of property and equipment

( 1,680,856 )

current assets

payable and accrued expenses

cash provided by (used in) operating activities

( 2,109,058 )

flows from investing activities:

of property and equipment

Sales of property and equipment

Investment in associates

Net cash used in investing

( 1,359,605 )

of property and equipment

in associates

cash used in investing activities

( 2,133,265 )

flows from financing activities:

of treasury stock

Cash flows from financing activities:

Purchase of treasury stock

( 2,064,800 )

from bank loans

on finance lease obligations and loans - net

cash used in financing activities

of exchange rate changes

Proceeds from bank loans

Payments on finance lease obligations and loans - net

( 1,045,464 )

increase (decrease) in cash and cash equivalents

Net cash used in financing

Effect of exchange rate changes

( 6,465,085 )

and cash equivalents at beginning of the period

and cash equivalents at end of period

Net increase (decrease) in cash and cash equivalents

( 3,131,842 )

Cash and cash equivalents at beginning of the period

Cash 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)

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

For the Nine Months

Ended March 31,

SUPPLEMENTAL DISCLOSURES:

Cash paid during the period for:

NON-CASH INVESTING AND FINANCING ACTIVITIES:

Assets acquired under finance lease

Drivemate shares acquired for services rendered

Shares issued to vendor for services received

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

32 unchanged sentences

(“NetSol Beijing”)

NuoJinZhiCheng Co., Ltd (“Tianjin”)

Lease Services Holdings Limited (“VLSH”)

30 unchanged sentences

maintained in China are insured for RMB 500,000 ($ 78,864 ) in each bank and in UK for GBP 85,000 ($ 111,842 ) in each bank.

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

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

maintains three bank accounts in China and nine bank accounts in the UK.

As of March 31, 2022, and June 30, 2021, the Company had uninsured

deposits related to cash deposits in accounts maintained within foreign entities of approximately $ 29,315,355 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 December 31, 2021, were as follows:

Company’s financial assets that were measured at fair value on a recurring basis as of March 31, 2022, were as follows:

SCHEDULE OF FAIR VALUE OF FINANCIAL ASSETS MEASURED ON RECURRING BASIS

in excess of billings - long term

Revenues 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:

in excess of billing - long term

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

Revenues in excess of billing - long term

reconciliation from June 30, 2021 to March 31, 2022 is as follows:

SCHEDULE OF FAIR VALUE OF FINANCIAL INSTRUMENTS RECONCILIATION

in excess of billings - long term

value discount

at June 30, 2021

during the period

of Translation Adjustment

at December 31, 2021

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 March 31, 2022

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

139 unchanged sentences

SCHEDULE OF DISAGGREGATED REVENUE BY CATEGORY

the Three Months

the Six Months

- related party

core revenue, net

non-core revenue, net

For the Three Months

For the Nine Months

Ended March 31,

Subscription and support

Services - related party

Total core revenue, net

Total non-core revenue, net

Total net revenue

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

56 unchanged sentences

OF REVENUES IN EXCESS OF BILLINGS AND DEFERRED REVENUE

December 31, 2021

March 31, 2022

June 30, 2021

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

Revenues in excess of billings

Unearned revenue

the nine months ended March 31, 2022, the Company recognized revenue of $ 3,282,962 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 $ 45,996,382 as of December 31, 2021, of which the Company estimates

Contracted but unsatisfied performance obligations were approximately $ 43,389,621 as of March 31, 2022, of which the Company estimates

to recognize approximately $ 15,344,251 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:

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

SCHEDULE OF COMPONENTS OF BASIC AND DILUTED EARNINGS PER SHARE

For the three months ended

March 31, 2022

For the nine months ended

March 31, 2022

Basic income (loss) per share:

Net income (loss) available to common shareholders

$ ( 278,470 )

of dilutive securities

income per share

Effect of dilutive securities

Diluted income (loss) per share

$ ( 278,470 )

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.

For the three months ended

March 31, 2021

For the nine months ended

March 31, 2021

Basic loss per share:

Net loss available to common shareholders

$ ( 623,231 )

$ ( 147,781 )

Effect of dilutive securities

Diluted loss per share

$ ( 623,231 )

$ ( 147,781 )

the three month ended March 31, 2022, 5,000 share grants were excluded from the shares used to calculate diluted earnings per share as

their inclusion would have been anti-dilutive.

the three and nine months ended March 31, 2021, 30,699 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

4 unchanged sentences

Australia uses the Australian dollar;

and NetSol Beijing uses the Chinese Yuan

as the functional currencies.

and NetSol Beijing and Tianjin use the

Chinese Yuan as the functional currencies.

NetSol Technologies, Inc., and its subsidiary, NTA, use the U.S.

dollar as the functional currency.

and liabilities are translated at the exchange rate on the balance sheet date, and operating results are translated at the average exchange

rate throughout the period.

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

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.

dollar as the functional

Assets and liabilities are translated at the exchange rate on the balance sheet date, and operating results are translated

at the average exchange rate throughout the period.

Accumulated translation losses classified as an item of accumulated other comprehensive

loss in the stockholders’ equity section of the consolidated balance sheet were $ 36,740,406 and $ 31,868,481 as of March 31, 2022

and June 30, 2021, respectively.

During the three and nine months ended March 31, 2022, comprehensive income (loss) in the consolidated

statements of comprehensive income (loss) included a translation loss attributable to NetSol of $ ( 1,804,777 ) and $ ( 4,871,925 ) , respectively.

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

(loss) included a translation gain attributable to NetSol of $ 941,353 and $ 2,966,249 , respectively.

TECHNOLOGIES, INC.

1 unchanged sentence

6 – MAJOR CUSTOMERS

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

the nine months ended March 31, 2022, revenues from Daimler Financial Services (“DFS”) and BMW Financial (“BMW”)

were $ 15,692,171 and $ 3,203,536 , respectively representing 35.9 % and 7.3 %, respectively of revenues.

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 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 December 31, 2021 were $ 8,336,839 and $ 3,326,380 for DFS and

BMW, respectively.

During the nine months ended March

31, 2021, revenues from Daimler Financial Services (“DFS”) and BMW Financial (“BMW”) were $ 7,763,189 and $ 4,295,139 ,

respectively representing 19.6 % and 10.9 %, respectively of revenues.

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

receivable from DFS and BMW at March 31, 2022, were $ 3,168,260 and $ 305,321 , respectively.

Accounts receivable at June 30, 2021, were

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

Revenues in excess of billings at March 31, 2022 were $ 1,252,548 and $ 3,696,816 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.

OF CONVERTIBLE NOTES

SCHEDULE OF CONVERTIBLE NOTES

March 2, 2018

February 9, 2018

March 31, 2019

April 1, 2019

allowance for doubtful account

March 31, 2020

August 19, 2019

March 31, 2020

Less allowance for doubtful account

( 4,250,000 )

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

Company has accrued interest of $ 701,062 at March 31, 2022 and June 30, 2021, which is included in “Other current assets”.

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

3 unchanged sentences

current assets consisted of the following:

OF OTHER CURRENT ASSETS

December 31, 2021

SCHEDULE OF OTHER CURRENT ASSETS

March 31, 2022

June 30, 2021

From Related Party

allowance for doubtful account

Prepaid Expenses

Advance Income Tax

Employee Advances

Security Deposits

Other Receivables

Due From Related Party

Less allowance for doubtful account

( 1,243,633 )

4 unchanged sentences

in excess of billings, net consisted of the following:

OF REVENUE IN EXCESS OF BILLING

in excess of billings - long term

value discount

SCHEDULE OF REVENUE IN EXCESS OF BILLING

March 31, 2022

June 30, 2021

Revenues in excess of billings - long term

Present 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 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

During the three and nine months ended March 31, 2022, the Company accreted $ 9,546 and $ 28,587 , respectively.

the three and nine months ended March 31, 2021, the Company accreted $ 2,331 and $ 44,157 , respectively, which was recorded in interest

income for that period.

4 unchanged sentences

and equipment consisted of the following:

OF PROPERTY AND EQUIPMENT

December 31, 2021

SCHEDULE OF PROPERTY AND EQUIPMENT

March 31, 2022

June 30, 2021

Furniture and Equipment

Under Capital Leases

Office Furniture and Equipment

Computer Equipment

Assets Under Capital Leases

Accumulated Depreciation

( 16,840,008 )

( 20,785,781 )

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

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.

Property and Equipment, Net

the three and nine months ended March 31, 2022, depreciation expense was $ 540,822 and $ 1,608,007 , respectively.

Of these amounts, $ 334,476

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

and $ 974,526 , respectively, are reflected in cost of revenues.

For the three and nine months ended March 31, 2021, depreciation expense

was $ 575,855 and $ 1,557,578 , respectively.

Of these amounts, $ 303,780 and $ 842,141 , respectively, are reflected in cost of revenues.

is a summary of fixed assets held under finance leases as of March 31, 2022 and June 30, 2021:

SUMMARY OF FIXED ASSETS HELD UNDER CAPITAL LEASES

March 31, 2022

June 30, 2021

and Other Equipment

Computers and Other Equipment

Furniture and Fixtures

Accumulated Depreciation - Net

Fixed assets held under

finance leases, Total

lease term and discount rate were as follows:

OF FINANCE LEASE TERM

December 31, 2021

SCHEDULE OF FINANCE LEASE TERM

March 31, 2022

June 30, 2021

average remaining lease term - Finance leases

average discount rate - Finance leases

Weighted average remaining lease term - Finance leases

Weighted average discount rate - Finance leases

TECHNOLOGIES, INC.

34 unchanged sentences

balance sheet information related to leases was as follows:

OF BALANCE SHEET INFORMATION RELATED TO LEASE

lease assets, net

SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO LEASE

March 31, 2022

June 30, 2021

Operating lease assets, net

Operating, Current

Operating, Non-current

Lease Liabilities

Total Lease Liabilities

TECHNOLOGIES, INC.

1 unchanged sentence

components of lease cost were as follows:

OF COMPONENTS OF LEASE COST

the Three Months

the Six Months

of finance lease assets

on finance lease obligation

term lease cost

SCHEDULE OF COMPONENTS OF LEASE COST

For the Three Months

For the Nine Months

Ended March 31,

Amortization of finance lease assets

Interest on finance lease obligation

Operating lease cost

Short term lease cost

Sub lease income

Total lease cost

term and discount rate were as follows:

OF LEASE TERM AND DISCOUNT RATE

average remaining lease term - Operating leases

average discount rate - Operating leases

SCHEDULE OF LEASE TERM AND DISCOUNT RATE

March 31, 2022

June 30, 2021

Weighted average remaining lease term - Operating leases

Weighted average discount rate - Operating leases

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

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

SCHEDULE OF SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION RELATED TO LEASES

For the Nine Months

Ended March 31

Operating cash flows related to operating leases

Operating cash flows related to finance leases

Financing cash flows related to finance leases

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

OF MATURITIES OF OPERATING LEASE LIABILITIES

Lease Payments

of operating lease liabilities were as follows as of March 31, 2022:

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

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 and six months ended December 31, 2021, the Company

For the three and nine months ended March 31, 2022, the Company

received lease income of $ 8,907 and $ 27,012 , respectively.

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

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

For the three and nine months ended March 31, 2021, the Company received lease

income of $ 9,155 and $ 26,517 , respectively.

12 – LONG TERM INVESTMENT

8 unchanged sentences

final payment date.

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

As of March 31, 2022, 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 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.

Company provided services of $ Nil and $ 12,528 during the three and nine months ended March 31, 2022, respectively and did no t provide

any services during the three and nine months ended March 31, 2021.

the equity method of accounting, the Company recorded its share of net income of $ 4,712 and net loss of $ 54,193 for the three and nine

months ended March 31, 2022, respectively and the Company recorded its share of net income of $ Nil and $ 3,919 for the three and nine

months ended March 31, 2021, respectively.

TECHNOLOGIES, INC.

6 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 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 $ 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

PK has no t provided services to WRLD3D for the three and nine months ended March 31, 2022 and March 31, 2021.

Accounts receivable and

revenue in excess of billing were $ 1,373,099 and $ 8,163 at March 31, 2022, 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 $ 81,510 and $ 263,388 for the three and nine months ended

March 31, 2022, and the Company recorded its share of net loss of $ 80,953 and $ 236,407 for the three and nine months ended March 31,

2021, respectively.

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

OF LONG TERM INVESTMENT

net loss on investment

following table reflects the above investments at March 31, 2022.

SCHEDULE OF LONG TERM INVESTMENT

Gross investment

Cumulative net loss on investment

( 2,184,775 )

( 2,278,918 )

other comprehensive income (loss)

Cumulative other comprehensive income (loss)

Net investment

13 - INTANGIBLE ASSETS

assets consisted of the following:

OF INTANGIBLE ASSETS

December 31, 2021

SCHEDULE OF INTANGIBLE ASSETS

March 31, 2022

June 30, 2021

Licenses - Cost

of Translation Adjustment

Product Licenses - Cost

Effect of Translation Adjustment

( 17,652,591 )

( 14,440,001 )

Accumulated Amortization

( 27,414,278 )

4 unchanged sentences

over the next 1.5 years.

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.

Amortization expense for the three and nine months ended March 31, 2022 was $ 407,111 and $ 1,261,664 , respectively.

Amortization expense for the three and nine months ended March 31, 2021 was $ 455,988 and $ 1,338,625 , respectively.

Future Amortization

amortization expense of intangible assets is as follows:

OF ESTIMATED AMORTIZATION EXPENSE OF INTANGIBLE ASSETS

SUMMARY OF ESTIMATED AMORTIZATION EXPENSE OF INTANGIBLE ASSETS

Period ended:

March 31, 2023

March 31, 2024

TECHNOLOGIES, INC.

3 unchanged sentences

OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

March 31, 2022

June 30, 2021

Accounts Payable

Accrued Liabilities

Accrued Payroll

Payroll Taxes

Accrued Payroll Taxes

Taxes Payable

Other Payable

payable and finance leases consisted of the following:

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”)

liability insurance and Errors and Omissions (“E&O”) liability insurance, for which the D&O and E&O balances

are renewed on an annual basis and, as such, are recorded in current maturities.

The interest rate on these financings were ranging from

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

SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES

As of March 31, 2022

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

(1) The Company finances

Directors’ and Officers’ (“D&O”) liability insurance and Errors and Omissions (“E&O”) liability

insurance, for which the D&O and E&O balances are renewed on an annual basis and, as such, are recorded in current maturities.

The interest rate on these financings were ranging from 5.0 % to 7.0 % as of March 31, 2022 and June 30, 2021.

TECHNOLOGIES, INC.

2 unchanged sentences

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 .

The annual interest rate was 5.12 % as of March 31, 2022.

The total outstanding balance as of March 31, 2022 and June 30, 2021

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

As of March 31, 2022, NTE

was in compliance with this covenant.

5 unchanged sentences

130,324,892 or

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

$ 711,264 , at March 31, 2022, which is shown as current.

The availed facility amount was Rs.

1 unchanged sentence

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.

The interest rate for the loan was 3 % at March

31, 2022 and June 30, 2021.

(4) The Company’s

3 unchanged sentences

The total facility amount is Rs.

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

500,000,000 or $ 2,728,811 at March 31, 2022 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.

The interest rate for the loan was 3 % at March 31, 2022 and June 30, 2021.

(5) The Company’s

2 unchanged sentences

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 $ 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.

75,000,000 or $ 409,322 , at March 31, 2022.

The balance outstanding at March 31, 2022 and June 30, 2021 was Rs.

interest rate for the loan was 14.0 % and 9.5 % at March 31, 2022 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 March 31, 2022, NetSol PK was in

compliance with this covenant.

(6) The Company’s

5 unchanged sentences

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.

March 31, 2022 and June 30, 2021, respectively.

The interest rate for the loan was 3 % at March 31, 2022 and June 30, 2021.

(7) The Company’s

3 unchanged sentences

120,000,000 or $ 654,915 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.

120,000,000 or $ 759,013 , at March 31, 2022 and June 30, 2021, respectively.

rate for the loan was 13.5 % and 9.0 % at March 31, 2022 and June 30, 2021, respectively.

The balance outstanding at March 31, 2022 and

June 30, 2021 was Rs.

During the tenure of the

1 unchanged sentence

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.

As of March 31, 2022, NetSol PK was in

compliance with these covenants.

(8) The Company’s

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

revolving loan that matures every nine months.

The total facility amount is Rs.

or $ 5,070,994

900,000,000 or $ 4,911,859 and Rs.

900,000,000 or $ 5,692,600 ,

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

at March 31, 2022 and June 30, 2021, respectively.

NetSol PK used Rs.

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.

700,000,000 or $ 3,820,335 and Rs.

700,000,000 or $ 4,427,578 , at

March 31, 2022 and June 30, 2021, respectively.

The interest rate for the loan was 3 % at March 31, 2022 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.

As of March 31, 2022, NetSol PK used Rs.

18,568,847 or $ 101,342 of which $ 61,925 was shown as long term and $ 39,417 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.

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

rate for the loan was 9.0 % at March 31, 2022, and June 30, 2021.

TECHNOLOGIES, INC.

4 unchanged sentences

years with monthly payments of £ 1,349 , or $ 1,775 .

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 March 31, 2022, the subsidiary has used this facility up to $ 34,428 , of

which $ 18,942 was shown as long-term and $ 19,486 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.

The interest rate was 6.14 % at March 31, 2022 and June 30, 2021.

(11) The Company’s

subsidiary, VLS, finances Directors’ and Officers’ (“D&O”) liability insurance, and the $ 5,011 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.

was recorded in current maturities, at March 31, 2022 and June 30, 2021, respectively.

The interest rate on this financing ranged from

9.7 % to 12.7 % as of March 31, 2022 and was 9.7 % as of June 30, 2021.

(12) The Company leases

4 unchanged sentences

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

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

ended March 31, 2022 and 2021.

is the aggregate minimum future lease payments under finance leases as of March 31, 2022:

SCHEDULE OF AGGREGATE MINIMUM FUTURE LEASE PAYMENTS UNDER CAPITAL LEASES

Minimum Lease Payments

Expense relating to future periods

Value of minimum lease payments

Within year 1

Within year 2

Within year 3

Total Minimum Lease Payments

Interest Expense relating to future periods

Present 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

Non-Current portion

is the aggregate future long term debt payments as of March 31, 2022

SCHEDULE OF AGGREGATE FUTURE LONG TERM DEBT PAYMENTS

Loan Payments

4 unchanged sentences

Current portion

( 1,025,400 )

Non-Current portion

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

16 - STOCKHOLDERS’ EQUITY

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

the three and nine months ended March 31, 2022, 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.

1 unchanged sentence

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

the three and nine months ended March 31, 2022, the Company issued 3,000 shares of its common stock to employees pursuant to the terms

of their employment agreements valued at $ 12,600 .

the three and nine months ended March 31, 2022, the Company issued 2,500

shares of common stock for services received

from one of its vendors.

These shares were valued at the fair market value of $ 9,625

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

and $ 19,525 ,

respectively.

the three and nine months ended March 31, 2022, the Company purchased nil and 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:

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

SUMMARY OF UNVESTED STOCK GRANTS AWARDED AS COMPENSATION

Weighted Average Grant Date Fair Value ($)

Unvested, June 30, 2021

Forfeited / Cancelled

Unvested, March 31, 2022

the three and nine months ended March 31, 2022, the Company recorded compensation expense of $ 19,713 and $ 36,941 , respectively.

three and nine months ended March 31, 2021, the Company recorded compensation expense of $ 74,169 and $ 239,333 , respectively.

The compensation

expense related to the unvested stock grants as of March 31, 2022 was $ 7,112 which will be recognized during the fiscal year 2022.

18 – CONTINGENCIES

10 unchanged sentences

matters could vary significantly from the amounts included in the accompanying consolidated financial statements.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

19 – OPERATING SEGMENTS

10 unchanged sentences

consolidation.

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

following table presents a summary of identifiable assets as of March 31, 2022 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:

March 31, 2022

June 30, 2021

Identifiable assets:

Corporate headquarters

North America

Asia - Pacific

following table presents a summary of investment under equity method as of March 31, 2022 and June 30, 2021:

OF INVESTMENT UNDER EQUITY METHOD

in associates under equity method:

March 31, 2022

June 30, 2021

Investment in associates under equity method:

Corporate headquarters

Asia - Pacific

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

following table presents a summary of operating information for the three and nine months ended March 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:

For the Three Months

For the Nine Months

Ended March 31,

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

$ ( 394,375 )

$ ( 804,636 )

and amortization:

$ ( 127,742 )

North America

Asia - Pacific

( 1,497,302 )

$ ( 975,170 )

Depreciation and amortization:

North America

Asia - Pacific

Interest expense:

Corporate headquarters

North America

Asia - Pacific

Income tax expense:

Corporate headquarters

North America

Asia - Pacific

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

following table presents a summary of capital expenditures for the nine months ended March 31:

OF CAPITAL EXPENDITURES

the Six Months

expenditures:

For the Nine Months

Ended March 31,

Capital expenditures:

North America

Asia - Pacific

20 – NON-CONTROLLING INTEREST IN SUBSIDIARY

2 unchanged sentences

SCHEDULE OF BALANCE OF NON-CONTROLLING INTEREST

Non-Controlling

Interest at December 31, 2021

Non-Controlling Interest %

Non-Controlling Interest at

March 31, 2022

NetSol-Innovation

Non-Controlling

Non-Controlling Interest %

Non-Controlling Interest at

June 30, 2021

17 unchanged sentences

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

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

the three and nine months ended March 31, 2022, the Company recorded an income tax provision of $ 157,604 and $ 526,737 , respectively,

resulting in an effective tax rate of ( 112.5 %) and 15.1 %, respectively.

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

During the three and nine months ended March 31, 2021, the Company

recorded an income tax provision of $ 133,156 and $ 642,884 , respectively, resulting in an effective tax rate of ( 15.8 %) and 90.3 %, 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