What changed in this filing

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Item 9A. Controls and Procedures

2022-09-27 compared with 2021-09-28 · 926 added, 936 removed, 1827 unchanged (50% of the section changed)

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and procedures were effective.

Management’s

Report on Internal Control over Financial Reporting

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Treadway Commission.

Based on the results of our assessment, the Company has determined that as of June 30, 2021, the Company’s

Based on the results of our assessment, the Company has determined that as of June 30, 2022, the Company’s

internal control over financial reporting are effective.

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have been no changes in our internal controls over financial reporting during the fourth quarter of fiscal year 2022, that have materially

affected, or are reasonable likely to materially affect, the Company’s internal control over financial reporting (as defined in

Exchange Act Rules 13a –

15(f) and 15d –

affected, or are reasonable likely to materially affect, the Company’s internal control over financial reporting (as defined in

Exchange Act Rules 13a – 15(f) and 15d – 15(f)).

OTHER INFORMATION

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16(a) Beneficial Ownership Reporting Compliance

16(a) of the Securities Exchange Act of 1934, as amended, requires that the Company’s directors and executive officers and persons

owning more than 10% of the outstanding Common Stock, file reports of ownership and changes in ownership with the Securities and Exchange

Commission (“SEC”).

Executive officers, directors and beneficial owners of more than 10% of the Company’s Common Stock

Commission (“SEC”).

Executive officers, directors and beneficial owners of more than 10% of the Company’s Common Stock

are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.

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to the bylaws of the Company shall retain their position as directors until the next meeting.

The board of directors is made up

The board of directors is made up of Mr.

Ghauri (Chairman of the Board), Mr.

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directors and executive officers of the Company are as follows:

First Elected as an Officer or Director

Held with the Registrant

Executive Officer, Chairman and Director

of Naeem Ghauri

of Najeeb Ghauri

Financial Officer

Year First Elected

as an Officer

Position Held with the Registrant

Family Relationship

Najeeb Ghauri

Chief Executive Officer, Chairman and Director

Brother of Naeem Ghauri

Brother of Najeeb Ghauri

Chief Financial Officer

V.P., Legal and Corporate Affairs;

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Corporate Counsel

Henry Tolentino

Syed Kausar Kazmi

Experience of Officers and Directors:

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responsible for NETSOL listing on NASDAQ in 1999 and NETSOL Pakistan subsidiary listing on the Karachi Stock Exchange in 2005.

served as the Company’s Chief Executive Officer from 1999 to 2001 and as the Chief Financial Officer from 2001 to 2005.

Ghauri is responsible for managing the day-to-day operations of the Company, as well as the Company’s overall growth and expansion

served as the Company’s Chief Executive Officer from 1999 to 2001 and as the Chief Financial Officer from 2001 to 2005.

Ghauri is responsible for managing the day-to-day operations of the Company, as well as the Company’s overall growth and expansion

Najeeb Ghauri as the CEO, implemented a Company-wide initiative cutting costs which saved the Company in excess of

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September 2020, Mr.

Ghauri was presented with the highest civilian award in Pakistan, “Sitar e Imtiaz”, a medal of pride,

in recognition for his work in IT and charitable causes in Pakistan.

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substantial experience in establishing management performance objective and establishing goals.

GHAURI was a Director of the Company from 1999 through 2020 and was the Company’s Chief Executive Officer

from August 2001 to October 2006.

Ghauri not only serves the Board

with his experience as a chief executive officer, but also his skills and insight into global operational logistics, which he developed

over the course of his 25-year career in technology industry.

GHAURI was a Director of the Company from 1999 through 2020 and was the Company’s Chief Executive Officer from August 2001

to October 2006.

Ghauri is also a co-founder of the Company.

Currently, Mr.

Ghauri serves as the President and Director

of Global Sales of NETSOL as well as the director of NETSOL (UK) Ltd., a wholly owned subsidiary of the Company located

While instrumental in numerous transactions, his most significant contribution to the revenue of the Company was his role

in overseeing and leading the closing of the largest contract to date for the Company worth $100 million signed in December 2015.

recently, Mr.

Ghauri serves as the President and Director of Global

Sales of NETSOL, director of NETSOL (UK) Ltd., a wholly owned subsidiary of the Company located in London, and Chairman of NetSol Technologies

Limited in Pakistan.

While instrumental in numerous transactions, his most significant contribution to the revenue of the Company was

his role in overseeing and leading the closing of the largest contract to date for the Company worth $100 million signed in December

More recently, Mr.

Ghauri headed the sales team that signed a contract valued in excess of $35 million.

Ghauri has spearheaded the Innovation

practice of the Company while located in Thailand with an eye towards working with rideshare platforms as sustainable business models

for the Company as the CEO of OTOZ, Inc.

Ghauri has spearheaded

the Innovation practice of the Company while located in Thailand with an eye towards working with rideshare platforms as sustainable

business models for the Company as the CEO of OTOZ, Inc.

Prior to joining the Company, Mr.

Ghauri was Program Director for Mercedes-Benz Finance Ltd.,

from 1994-1999.

Ghauri was Program Director for Mercedes-Benz

Finance Ltd., from 1994-1999.

Ghauri supervised over 200 project managers, developers, analysts and users in nine European Countries.

is a board member of Drivemate Co., Ltd., the Company’s partner in Thailand, as a representative of NetSol.

Ghauri earned his

degree in computer science from Brighton University in England.

Ghauri is a board member of Drivemate Co., Ltd., the Company’s partner in Thailand, as a representative of NetSol.

earned his degree in computer science from Brighton University in England.

and Qualifications :

Naeem Ghauri has served in many leadership capacities within the Company throughout the past 23 years.

his various senior leadership positions and extensive executive experience, Mr.

Ghauri brings to NetSol his unique insight related to

technology, innovation, marketing, and growth, including digital and mobility strategy.

ALMOND was appointed Chief Financial Officer on September 9, 2013.

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with their financial reporting requirements to the SEC.

Roger Almond’s duties also included overseeing multiple entity consolidations,

converting financial data to US GAAP, preparing financials statements, footnotes and MD&A.

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He has also completed executive management courses at UCLA in 2001.

and Qualifications:

Through his senior leadership as Chief Financial Officer, Mr.

Almond possesses extensive knowledge in several

important business areas, including public company accounting, leadership, risk assessment, and international, cross-border accounting.

MCGLASSON joined NETSOL as General Counsel in January 2004 and was elected to the position of Secretary in March 2004.

She was appointed Senior Vice President, Corporate and Legal Affairs in 2013.

was appointed Senior Vice President, Corporate and Legal Affairs in 2013.

the role of General Counsel, Ms.

McGlasson is responsible for leading NETSOL’s legal department company-wide.

responsible for the implementation of the Company’s internal corporate governance and policy plans, ethics and business conduct.

She oversees all board meetings in her executive position as corporate secretary.

McGlasson has nearly 30 years of experience in corporate law, mergers and acquisitions, business and cross-border transactions

and securities law.

McGlasson is responsible for leading NETSOL’s legal department company-wide.

She is also responsible

for the implementation of the Company’s internal corporate governance and policy plans, ethics and business conduct.

all board meetings in her executive position as corporate secretary.

McGlasson has over 30 years of experience in corporate law, mergers and acquisitions, business and cross-border transactions and securities

Immediately prior to joining NETSOL, Patti practiced at Vogt & Resnick, law corporation.

She was admitted

to practice in California in 1991.

She was admitted to practice in California

received her Bachelor of Arts in Political Science in 1987 from the University of California, San Diego and, her Juris Doctor and Masters

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of her Masters in Law in Transnational Business, she interned at the law firm of Loeff Claeys Verbeke in Rotterdam, the Netherlands in

and Qualifications:

As General Counsel, Ms.

McGlasson offers extensive knowledge in several important strategic areas, including

innovative problem-solving related to global risks and opportunities.

Her legal expertise also helps NetSol navigate cross-cultural and

cross-border opportunities.

CATON joined the Board of Directors in 2007.

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Caton has over 35 years of experience in sales, marketing and management in the financial leasing and software

FARSAI joined the Board of Directors for the first time in 2018 and is currently the Company’s Corporate Counsel.

Before joining

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Farsai continues to work part-time as

Corporate Counsel overseeing the Company’s insurance as well as day to day corporate legal needs.

has also obtained many of NETSOL’s various trademarks.

Farsai has been actively updating and overseeing the Company’s

Corporate and Social Responsibilities (CSR) globally and has effectively established a 501(c)(3) foundation for NETSOL to continue its

charitable work internationally.

Corporate Counsel overseeing the Company’s insurance as well as day to day corporate legal needs.

has also obtained many of NETSOL’s various trademarks.

Farsai has been actively updating and overseeing the Company’s Corporate and Social Responsibilities (CSR) globally and has effectively

established a 501(c)(3) foundation for NETSOL to continue its charitable work internationally.

Farsai received her B.A.

degree from University of California, Irvine and her J.D.

has been a member of the California State Bar since 1996.

She sits on the board of various charitable organizations in Los Angeles.

University of California, Irvine and her J.D.

in 1996, and has been a member of the California State Bar since 1996.

She sits on the

board of various charitable organizations in Los Angeles.

and Qualifications:

Farsai has served the Company and its legal department since its inception and has a breadth of knowledge

and understanding about NETSOL’s business through her role as Corporate Counsel.

She also has an understanding of Public Company

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auto finance industry working with global manufacturers such as Toyota and General Motors.

Prior to joining NETSOL’s advisory board,

Tolentino has held several executive positions at Toyota Leasing (Thailand) Co., Ltd., including most recently as president from

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Kazmi was the CEO of the UK operations of Habib Bank AG Zurich from 2009-2012.

was awarded by Power 100, Parliamentary Review in association with The British Publishing Company a “Lifetime Achievement Award”

for his significant and lasting impact on the banking sector.

In addition, Mr.

Kazmi has been awarded by the Asian Media Group the “GG2

Power List”

celebrating Britain’s 101 most influential Asians from 2016-2018.

Kazmi has been awarded by the Asian Media Group the “GG2

Power List” celebrating Britain’s 101 most influential Asians from 2016-2018.

Kazmi received his BSc in Chemical Engineering with II Class Honors from Habib Institute of Technology in 1974.

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of many charitable organizations, with a focus on helping raise funds.

Kazmi is the Chairman

of the Audit Committee and is a member of the Nominating and Corporate Governance and Compensation Committees.

Kazmi is the Chairman of the Audit Committee and is a member of the Nominating and Corporate Governance and Compensation Committees.

and Qualifications :

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Company adopted its Code of Business Conduct & Ethics, as amended and restated on September 9, 2013, applicable to every officer,

director and employee of the Company, including, but not limited to the Company’s principal executive officer, principal financial

officer, and principal accounting officer or controller, or persons performing similar functions.

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member as the term is defined in the Nasdaq Listing Rules.

Kazmi’s over 40 years of experience in the banking industry including

his current tenure as Head of Commercial Banking and Business Development for UK and Europe for Habib Bank AG Zurich as well as his service

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experience analyzing financial statements

that were comparable in the breadth and complexity of issues that can be reasonably expected to be raised by the Company’s financial

an understanding of internal control over financial reporting;

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11-EXECUTIVE COMPENSATION

Compensation Committee is responsible for establishing and overseeing compensation programs that comply with NetSol’s executive

compensation philosophy.

As described in this Compensation Discussion and Analysis (“CD&A”), the Compensation Committee

follows a disciplined process for setting executive compensation.

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providing advice, information, and an objective opinion.

This CD&A will focus on the compensation awarded to NetSol’s “named

executive officers”—the Chief Executive Officer, Chief Financial Officer, and General Counsel, Corporate Secretary.

This CD&A will focus on the compensation awarded to NetSol’s “named

executive officers”—the Chief Executive Officer, Chief Financial Officer, and General Counsel, Corporate Secretary.

find more complete information about all elements of compensation for the named executive officers in the following discussion and in

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2022 Executive Compensation Highlights and Governance

section identifies the most significant decisions and changes made regarding NETSOL’s executive compensation in fiscal year 2021.

section identifies the most significant decisions and changes made regarding NETSOL’s executive compensation in fiscal year 2022.

Approval of Compensation

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vote and the sentiments of our shareholders when making future compensation decisions for the named executive officers.

results from our last annual general meeting, the Compensation Committee believes shareholders support the Company’s executive

compensation philosophy and the compensation paid to the named executive officers.

into account the marked increase in support of this plan at the June 14, 2021 Annual Shareholders Meeting, the Compensation Committee

believes the compensation program meaningfully explains the Compensation Committee’s compensation decisions and its determination

to tie long term incentives of the Chief Executive Officer to performance criteria.

The Compensation Committee continues to reach out

to its shareholders regarding their positions on the Company’s compensation program.

In connection with the proxy solicitations,

the executive compensation was discussed with certain of our top shareholders and their general acceptance of the compensation structure

is reflected in the proxy vote results.

Accordingly, the Compensation Committee will continue to provide the CEO with a bonus criterion

that is based on total revenues and income from operations on a graduated basis.

Bonuses would be paid 60% in cash and 40% in stock valued

at the share price on June 30 th of the fiscal year in which it was earned.

into account the support of this plan at the June 7, 2022 Annual Shareholders Meeting, the Compensation Committee believes the compensation

program meaningfully explains the Compensation Committee’s compensation decisions and its determination to tie long term incentives

of the Chief Executive Officer to performance criteria.

The Compensation Committee continues to reach out to its shareholders regarding

their positions on the Company’s compensation program.

In connection with the proxy solicitations, the executive compensation was

discussed with certain of our top shareholders and their general acceptance of the compensation structure is reflected in the proxy vote

Accordingly, the Compensation Committee will continue to provide the CEO with a bonus criterion that is based on total revenues

and income from operations on a graduated basis.

Bonuses would be paid 60% in cash and 40% in stock valued at the share price on June

30 th of the fiscal year in which it was earned.

on the 2016 Annual Meeting of Shareholders vote on the Frequency of Say on Pay voting, we will continue to provide our stockholders with

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Compensation Committee and the Board are aware of evolving practices in executive compensation and corporate governance.

we have adopted and/or maintained certain policies and practices that are in keeping with “best practices”

in many areas.

The Compensation Committee engages an independent compensation consultant to evaluate our chief executive officer’s executive

we have adopted and/or maintained certain policies and practices that are in keeping with “best practices” in many areas.

Compensation Committee engages an independent compensation consultant to evaluate our chief executive officer’s executive

compensation practices in comparison to a peer group.

We do not provide excessive executive perquisites to our named executive officers.

Our incentive plans expressly prohibit repricing of options (directly or indirectly) without prior shareholder approval.

Our policy on the prevention of insider trading prohibits various types of transactions involving Company stock or securities, including

do not provide excessive executive perquisites to our named executive officers.

incentive plans expressly prohibit repricing of options (directly or indirectly) without prior shareholder approval.

policy on the prevention of insider trading prohibits various types of transactions involving Company stock or securities, including

short sales, options trading, hedging, margin purchases and pledges.

Our stock ownership guidelines require our executive officers to align their long-term interests with those of our stockholders.

Our policy prohibits the named executive officers from selling any newly issued shares for a period of three months, in an open market

Beginning with our fiscal year 2018 to current, we modified our compensation practices for our CEO to tie a significant portion to

financial results both on a top line and bottom-line basis.

stock ownership guidelines require our executive officers to align their long-term interests with those of our

stockholders.

policy prohibits the named executive officers from selling any newly issued shares for a period of three months, in an open market

with our fiscal year 2019 to current, we modified our compensation practices for our CEO to tie a significant portion to financial

results both on a top line and bottom-line basis.

Compensation Overview

2022, compensation designed for our executive officers consisted of:

Cash awards at the discretion

of the Compensation Committee

Long term equity in the form

of time-based restricted stock;

Ability to participate generally

in all group health and welfare benefit programs and tax-qualified retirement plans on the same basis as applicable to all of our

awards at the discretion of the Compensation Committee

term equity in the form of time-based restricted stock;

to participate generally in all group health and welfare benefit programs and tax-qualified

retirement plans on the same basis as applicable to all of our employees.

response to discussions we have had with certain shareholders and given the percentage voting in favor of our executive compensation,

beginning with the 2019 fiscal year, Chief Executive Officer compensation shall consist of:

Short-term cash awards conditioned

upon achieving objective performance targets

Long-term equity in the form

of time and objective performance targets;

Ability to participate generally

in all group health and welfare benefit programs and tax-qualified retirement plans on the same basis as applicable to all of our

cash awards conditioned upon achieving objective performance targets

equity in the form of time and objective performance targets;

to participate generally in all group health and welfare benefit programs and tax-qualified

retirement plans on the same basis as applicable to all of our employees.

Compensation Committee administers the cash and non-cash compensation programs applicable to our executive officers.

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after discussion with our Chief Executive Officer about his direct reports.

The Compensation Committee has often refined the direct reports’

compensation recommendations made by the Chief Executive Officer.

Our Chief Executive Officer’s compensation is determined solely

by the Compensation Committee, which, consistent with NASDAQ requirements, is comprised exclusively of independent directors, and the

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to the Compensation Committee Chair and interaction with executives was generally limited to discussions as required to compile information

at the Compensation Committee’s direction.

During fiscal year 2022, Compensation Resources did not provide services to the Company.

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The Compensation Committee reviews the compensation

and benefit programs for executive officers, including the named executive officers, and performs an annual assessment of the Company’s

executive compensation policy.

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Compensation Principles

executive compensation programs are designed to create shareholder value.

incentive awards, delivered in the form of equity, make up a portion of our executives’

total compensation and closely align

the interests of executives with the long-term interests of our shareholders.

Our policy prohibits the named executive officers from

selling any newly issued shares for a period of three months, on an open market transaction.

incentive awards are designed to reward our executive officers for creating long-term shareholder value.

Long-term incentive awards

are granted primarily in the form of stock options and/or shares.

executive compensation programs are designed to encourage executive officers to take appropriate risks in managing their businesses

to achieve optimal performance.

with external talent markets

executive compensation programs are designed to be competitive within the relevant markets.

and transparent

executive compensation programs are designed to be readily understood by our executives, and transparent to our investors.

Shareholder Alignment

Our executive compensation programs are designed to create shareholder value.

Long-term incentive awards, delivered in the form of equity, make up a portion of our executives’ total compensation and closely align the interests of executives with the long-term interests of our shareholders.

Our policy prohibits the named executive officers from selling any newly issued shares for a period of three months, on an open market transaction.

Performance based

Long-term incentive awards are designed to reward our executive officers for creating long-term shareholder value.

Long-term incentive awards are granted primarily in the form of stock options and/or shares.

Appropriate Risk

Our executive compensation programs are designed to encourage executive officers to take appropriate risks in managing their businesses to achieve optimal performance.

Competitive with external talent markets

Our executive compensation programs are designed to be competitive within the relevant markets.

Simple and transparent

Our executive compensation programs are designed to be readily understood by our executives, and transparent to our investors.

Analysis Peer Group

consideration of business models, company revenue and market capitalization of other companies in the Company’s technology industry

segment, and with the input from Compensation Resources, Inc., the compensation consultant used by the Company at the time the study

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Commerce Inc.

Technologies, Inc.

Officer Base Salaries and Compensation Comparisons

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of these consultants will be utilized by the Compensation Committee in determining the appropriate compensation packages in addition

to taking into account the unique global scale of the Company’s business.

While these consultants may make general recommendations

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In connection with the other named executive officers, we also relied on the recommendations of the Chief Executive

Officer’s analysis relative to those individuals’

performance and compensation.

Officer’s analysis relative to those individuals’ performance and compensation.

We also examined the outstanding stock options

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Executive Compensation Components

executive’s base salary is a fixed element of the executive’s compensation intended to attract and retain executives.

is evaluated together with components of the executive’s other compensation to ensure that the executive’s total compensation

executive’s base salary is a fixed element of the executive’s compensation intended to attract and retain executives.

is evaluated together with components of the executive’s other compensation to ensure that the executive’s total compensation

is consistent with our overall compensation philosophy.

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The Company expects each named executive officer

to contribute to the Company’s overall success as a member of the executive team rather than focus solely on specific objectives

within the officer’s area of responsibility.

provided a 3% increase in base salary for Ms.

McGlasson in fiscal 2020.

Due to the effects of COVID-19, the Company reduced her base

salary by 13%.

We provided a 4% increase in base salary for Mr.

Almond in fiscal 2020.

Due to the effects of COVID-19, the Company reduced

his salary by 13%.

In fiscal year 2020, Mr.

Ghauri’s base salary did not increase.

Due to the effects of COVID-19, Mr.

Ghauri’s

base salary was reduced by 4.7%.

Ghauri’s perquisites were reduced by 8% for a total compensation reduction of 5.4%.

The Compensation

Committee determined that salary alone was an adequate basis for short term compensation, and that equity incentives would be used for

the long-term elements of incentive programs for Ms.

to contribute to the Company’s overall success as a member of the executive team rather than focus solely on specific objectives

within the officer’s area of responsibility.

Ghauri’s base salary for fiscal year 2022 was $700,000 and in addition he received $200,000 in allowances.

Ghauri’s base

salary and allowances will remain the same for fiscal year 2023.

Almond’s base salary for fiscal year 2022 was $197, 041 and

in addition he received $24,000 in allowances.

For fiscal year 2023, Mr.

Almonds salary will be $226,000 and he will receive $24,000

in allowances.

McGlasson salary for fiscal year 2022 was $212,384 and her base salary for fiscal year 2023 will be $233,622.

Compensation Committee determined that salary alone was an adequate basis for short term compensation, and that equity incentives would

be used for the long-term elements of incentive programs for Ms.

McGlasson and Mr.

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performance-based cash bonuses in accordance with Company policies.

The Compensation Committee takes into consideration the executive’s

performance during the previous year to determine eligibility for discretionary bonuses.

Further, the compensation committee will review,

if applicable, the performance criteria set forth in an executive’s previous year’s agreement and will determine if the executive

has met such criteria in order to achieve the bonus.

The Company’s bonus criteria at the executive management level, is typically

based on a gross revenue and income from operations targets.

Cash bonuses, if any for 2022 are reflected in the summary of compensation

discussed below starting on page 43.

For 2021, based on structured KPI’s by the compensation committee, Mr.

Ghauri earned a bonus

See bonus structure as discussed below on page 41.

The Compensation Committee determined that Gross Revenue and Income from

Operations structure used in fiscal 2021 continues to be a proper measure for measuring Mr.

Ghauri’s performance in that it encourages

his participation in revenue generating activities and continues to incentivize him to monitor and maximize cost efficiency.

table on page 46.

For 2022, based on structured KPI’s by the compensation committee, Mr.

Ghauri earned a bonus of $69,922.

bonus structure as discussed below on page 44.

The Compensation Committee determined that Gross Revenue and Income from Operations structure

used in fiscal 2022 continues to be a proper measure for measuring Mr.

Ghauri’s performance in that it encourages his participation

in revenue generating activities and continues to incentivize him to monitor and maximize cost efficiency.

Equity Incentive Compensation

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In determining the number of shares to be granted

to executives, we take into account the individual’s position, scope of responsibility, ability to affect profits and shareholder

value, past and recent performance, and the estimated value of shares at the time of grant.

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incentives provided to executives are determined by the Fair Market Value of our common stock on the grant date.

Each executive’s

stock award was based on an analysis of the Compensation Committee of an appropriate overall cash compensation for each individual taking

into account their position and compensation at similarly situated companies.

Each executive’s stock award was based on a desired

overall compensation cash value less the base salary as approved by the Compensation Committee.

fiscal year 2020, Ms.

McGlasson and Mr.

Almond received a grant of 7,500 and 10,000 shares of common stock, respectively, vesting quarterly

over a two-year period.

Najeeb Ghauri is eligible to receive grants of shares based on the

performance criteria connected to gross revenues and net income from operations as discussed below.

The total compensation including

equity grants is designed to bring the Chief Executive Officer to the mean market average.

Najeeb Ghauri’s bonus for fiscal year 2021 is based on the total

revenues and income from operations on a graduated basis.

The following table demonstrates the graduated percentage of bonus that Mr.

Ghauri will be eligible to earn based on the percentage of the goal achieved.

Bonuses will be paid 60% in cash and 40% in shares of common

stock valued on June 30, 2021.

Total net revenues and income from operations are based on those values reported for the year ending June

30, 2021 excluding any adjustments relating to changes in revenue recognition policy.

Najeeb Ghauri is eligible to receive grants of shares based on the performance criteria connected to gross revenues and net income from

operations as discussed below.

The total compensation including equity grants is designed to bring the Chief Executive Officer to the

mean market average.

Najeeb Ghauri’s bonus for fiscal year 2022 is based on the total revenues and income from operations on a graduated basis.

following table demonstrates the graduated percentage of bonus that Mr.

Ghauri will be eligible to earn based on the percentage of the

goal achieved.

Bonuses will be paid 60% in cash and 40% in shares of common stock valued on June 30, 2022.

Total net revenues and income

from operations are based on those values reported for the year ending June 30, 2022 excluding any adjustments relating to changes in

revenue recognition policy.

Allocated Bonus

from Operations

from Operations %

Ghauri’s bonus for the fiscal year 2022 will be based on the same criteria stated above.

Ghauri’s bonus for the fiscal year 2023 will be based on the same criteria stated above.

and Other Personal Benefits

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The Compensation

Committee periodically reviews the level of perquisites and other personal benefits provided to NETSOL’s executive officers.

maintain benefits and perquisites that are offered to all employees, including health and dental insurance.

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Termination and Change in Control Payments considered

both the risk and the dedication of these executives’

service to the Company.

both the risk and the dedication of these executives’ service to the Company.

Chief Executive Officer has an employment agreement that provides, if his employment is terminated without cause or if the executive

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on July 1, 2006, we began accounting for stock-based payments, including awards under our Employee Stock Option Plans, in accordance

with the of Financial Accounting Standards Board’s Accounting Standards Codification Topic 718, Compensation –

Stock Compensation .

with the of Financial Accounting Standards Board’s Accounting Standards Codification Topic 718, Compensation – Stock Compensation .

following table shows the compensation for the fiscal year ended June 30, 2022, 2021, and 2020, earned by our Chairman and Chief Executive

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vesting conditions.

The awards for which the aggregate grant date fair value is shown in this column include awards

described under the Grants of Plan-Based Awards Table and in the Outstanding Equity Awards at Fiscal Year-End Table.

The awards for which the aggregate grant date fair value is shown in this column include awards described under the

Grants of Plan-Based Awards Table and in the Outstanding Equity Awards at Fiscal Year-End Table.

Bonus was awarded based on Mr.

Ghauri’s bonus structure as detailed on page 41.

The life of 20,000 outstanding options, granted in February 2009, was extended for one year for the year ended June 30, 2019.

Najeeb Ghauri’s compensation agreement, he received $180,383, $156,586 and $200,000 in allowances, perquisites and benefits

Ghauri’s bonus structure as detailed on page 44.

Najeeb Ghauri’s compensation agreement, he received $200,000, $180,383 and $156,586 in allowances, perquisites and benefits

such as car allowance, insurance premiums, and home office allowance for the fiscal years ended June 30, 2022, 2021 and 2020, respectively.

Consists of $400,000 base salary and $367,768 commission for the fiscal year ended June 30, 2021.

Naeem Ghauri’s compensation agreement, he received $77,045 in allowances, perquisites and benefits for the fiscal year

ended June 30, 2021.

Consists of $586,397 and $400,000 base salary and $207,031 and $367,768 commission for the fiscal years ended June 30, 2022 and 2021,

respectively.

Naeem Ghauri’s compensation agreement, he received $45,830 and $77,045 in allowances, perquisites and benefits for the

fiscal years ended June 30, 2022 and 2021, respectively.

Consists of $10,066, $8,872 and $10,639 paid for medical and dental insurance premiums for participation in the health insurance program

for the fiscal year ended June 30, 2021, 2020 and 2019, respectively, and $24,000 paid as car allowance for the year ended June 30, 2021.

for the fiscal year ended June 30, 2022, 2021 and 2020, respectively, and $24,000 paid as car allowance for the years ended June 30,

2022 and 2021, respectively.

Consists of $10,426, $9,784 and $10,019 paid for medical and dental insurance premiums for participation in the health insurance program

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of Plan-Based Awards

September 2016, Mr.

Najeeb Ghauri was granted 82,644 shares of the Company’s common stock which 50% vested immediately and the

remaining 50% vested annually from June 2017 to June 2021.

The shares were approved by the Compensation Committee as an incentive for

the named officer.

July 2018, Mr.

Roger Almond was granted 10,000 shares of the Company’s common stock, which vest quarterly over the period of three

The shares were approved by the Compensation Committee as an incentive for the named officer.

August 2019, Mr.

Roger Almond was granted 10,000 shares of the Company’s common stock, which vest quarterly over the period of

The shares were approved by the Compensation Committee as an incentive for the named officer.

July 2018, Ms.

Patti McGlasson was granted 7,500 shares of the Company’s common stock, which vest quarterly over the period of

Roger Almond was granted 10,000 shares of the Company’s common stock, which vest quarterly over the period of

The shares were approved by the Compensation Committee as an incentive for the named officer.

August 2019, Ms.

Patti McGlasson was granted 7,500 shares of the Company’s common stock, which vest quarterly over the period of

The shares were approved by the Compensation Committee as an incentive for the named officer.

of Summary Compensation Table

terms of our executive officers’

compensation are derived from our employment agreements with them and the annual performance review

terms of our executive officers’ compensation are derived from our employment agreements with them and the annual performance review

by our Compensation Committee.

The terms of Mr.

Najeeb Ghauri’s employment agreement with the Company were the result of negotiations

between the Company and the executive and were approved by our Compensation Committee and Board of Directors.

The terms of Ms.

McGlasson’s

Almond’s employment agreement with the Company were the result of negotiations between our Chief Executive Officer and

the employees and were approved by our Compensation Committee.

Agreement with Najeeb Ghauri

January 1, 2007, the Company entered into an Employment Agreement with our Chief Executive Officer, Najeeb Ghauri (the “CEO Agreement”).

The CEO Agreement was amended effective January 1, 2008, January 1, 2010, July 25, 2013 and again on June 30, 2014.

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Ghauri and the Company (the

“CEO Agreement”), the Company agreed to employ Mr.

Ghauri as its Chief Executive Officer for a five-year term.

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Committee as described in Item 11 under Executive Compensation beginning on page 39.

As previously discussed, the $900,000 was temporarily

reduced to $851,000 in response to the COVID-19 pandemic.

Effective July 1, 2021, Mr.

Ghauri’s salary, including allowances, was

increased to $900,000.

Ghauri is entitled to six weeks of paid vacation per calendar year.

For fiscal year 2023, Mr.

Ghauri’s annualized

compensation consisting of salary, allowance, perquisites and benefits will be $900,000.

Ghauri is entitled to six weeks of paid

vacation per calendar year.

CEO Agreement also includes provisions respecting severance, non-solicitation, non-competition, and confidentiality obligations.

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Under the CEO Agreement, Good Reason includes the

assignment of duties inconsistent with his title, a material reduction in salary and perquisites, the relocation of the Company’s

principal office by 30 miles, if the Company asks him to perform any act which is illegal, including the commission of a crime or act

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above summary of the CEO Agreement is qualified in its entirety by reference to the full text of the CEO Agreement, a copy of which was

filed as an exhibit to the Company’s 10-KSB for the fiscal year ended June 30, 2007.

The above summary of the First Amendment is

qualified in its entirety by reference to the full text of the Amendment, a copy of which was filed as an exhibit to the Company’s

10-KSB for the fiscal year ended June 30, 2008.

The above summary of the Second Amendment is qualified in its entirety by reference to

the full text of the Amendment, a copy of which was filed as an exhibit to the Company’s 10-Q for the fiscal year ended December

The above summary of the Third Amendment is qualified in its entirety by reference to the full text of the Amendment, a copy

of which was filed as an exhibit to the Company’s 8-K filed on July 26, 2013.

The above summary of the Fourth Amendment is qualified

in its entirety by reference to the full text of the Amendment, a copy of which was filed as an exhibit to the Company’s 8-K filed

on July 3, 2014.

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Employment Agreement, between Mr.

Almond and the Company (the “CFO Agreement”), the Company agreed to employ Mr.

its Chief Financial Officer from the date of the CFO Agreement through February 28, 2017.

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For the fiscal year 2022, Mr.

Almond is entitled to an annualized base salary

of $230,381 per annum, a $2,000 per month car allowance, 10,000 shares of common stock to be granted equally on a quarterly basis over

2 years issued after each quarter of service through June 30, 2021 and is eligible for annual bonuses at the discretion of the Chief

Executive Officer.

As previously discussed, the $230,381 base salary was temporarily reduced to $186,515 in response to the COVID-19

Almond was entitled to an annualized base

salary of $197,041 per annum and a $2,000 per month car allowance, and eligible for annual bonuses at the discretion of the Chief Executive

Effective July 1, 2022, Mr.

Almond’s salary, was increased to $221,041.

Almond’s salary, was increased to $226,000 per annum and a $2,000 per month car allowance,

and is eligible for annual bonuses at the discretion of the Chief Executive Officer.

In addition, Mr.

Almond is entitled to participate

in the Company’s equity incentive plans and is entitled to four weeks of paid vacation per calendar year.

CFO Agreement also includes provisions respecting severance, non-solicitation, non-competition, and confidentiality obligations.

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Under the CFO Agreement, Good Reason includes the

assignment of duties inconsistent with his title, a material reduction in salary and perquisites, the relocation of the Company’s

principal office by 60 miles, if the Company asks him to perform any act which is illegal, including the commission of a crime or act

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above summary of the CFO Agreement is qualified in its entirety by reference to the full text of the CFO Agreement, a copy of which was

filed as an exhibit to the Company’s 8-K filed on March 4, 2015.

Agreement with Patti L.

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McGlasson and the Company

(the “General Counsel Agreement”), the Company agreed to employ Ms.

McGlasson as its Secretary and General Counsel from the

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The General Counsel Agreement was amended on July 25, 2013 and again on June 30, 2014 (the

General Counsel Agreement and all amendments referred to as the “GC Agreement”).

Changes made in the June 30, 2014 amendment

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Under the GC Agreement, Ms.

McGlasson is entitled to an annualized base salary of $232,896 per annum, 7,500

shares of common stock to be granted equally on a quarterly basis over 2 years issued after each quarter of service through June 30,

2021 and is eligible for annual bonuses at the discretion of the Chief Executive Officer.

As previously discussed, the $232,896 was temporarily

reduced to $188,552 in response to the COVID-19 pandemic.

McGlasson is entitled to an annualized base salary of $212,384 per annum, and

is eligible for annual bonuses at the discretion of the Chief Executive Officer.

Effective July 1, 2022, Ms.

McGlasson’s salary, was increased to $212,384.

McGlasson’s salary,

was increased to $233,622.

In addition, Ms.

McGlasson is entitled to participate in the Company’s equity incentive plans and, is entitled to six weeks of

paid vacation per calendar year.

McGlasson is entitled to participate in the Company’s equity incentive plans and, is

entitled to six weeks of paid vacation per calendar year.

General Counsel Agreement also includes provisions respecting severance, non-solicitation, non-competition, and confidentiality obligations.

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Good Reason includes the assignment of duties inconsistent with her title, a material reduction in salary and perquisites, the relocation

of the Company’s principal office by 60 miles, if the Company asks her to perform any act which is illegal, including the commission

of a crime or act of moral turpitude, or a material breach of the General Counsel Agreement by the Company.

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above summary of the General Counsel Agreement is qualified in its entirety by reference to the full text of the General Counsel Agreement,

a copy of which was filed as an exhibit to the Company’s 10-KSB for the fiscal year ended June 30, 2006 on September 27, 2006.

The above summary is also qualified in its entirety by reference to the full text of the Amendment to the General Counsel Agreement,

a copy of which was filed as an exhibit to the Company’s 10-Q for the quarter ended March 31, 2010.

The above summary is also qualified

in its entirety by reference to the full text of the Second Amendment to the General Counsel Agreement, a copy of which was filed as

an exhibit to the Company’s 8-K filed on July 26, 2013.

The above summary is also qualified in its entirety by reference to the

full text of the Third Amendment to the General Counsel Agreement, a copy of which was filed as an exhibit to the Company’s 8-K

filed on July 3, 2014.

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Payments upon Termination or Change of Control

regardless of the manner in which a named executive officer’s employment terminates, the executive officer is entitled to receive

amounts earned during the term of employment.

Such amounts include the portion of the executive’s base salary that has accrued

prior to any termination and not yet been paid, and unused vacation pay.

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(a) a onetime payment equal to the product of 2.99 and his salary during the preceding 12 months;

one-time payment equal to the higher of (i) Executive’s bonus for the previous year and (ii) one percent of the Company’s

consolidated gross revenues for the previous twelve (12) months;

and at the election of the Executive, (c) a one-time cash payment equal

to the cash value of all shares eligible for exercise upon the exercise of Executive’s Options then currently outstanding and exercisable

as if they had been exercised in full (the “Change of Control Termination Payment”).

to the cash value of all shares eligible for exercise upon the exercise of Executive’s Options then currently outstanding and exercisable

as if they had been exercised in full (the “Change of Control Termination Payment”).

In the event Executive elects to receive

the cash value of the shares underlying Executive’s options, he shall so notify the Company of his intent.

following table summarizes the potential payments to Mr.

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(a) a onetime payment equal to the product of 2.99 and his salary during the preceding 12 months;

one-time payment equal to the higher of (i) Executive’s bonus for the previous year and (ii) one-half of one percent of the Company’s

consolidated gross revenues for the previous twelve (12) months (the “Change of Control Termination Payment”).

one-time payment equal to the higher of (i) Executive’s bonus for the previous year and (ii) one-half of one percent of the Company’s

consolidated gross revenues for the previous twelve (12) months (the “Change of Control Termination Payment”).

following table summarizes the potential payments to Mr.

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(a) a onetime payment equal to the product of 2.99 and her salary during the preceding 12 months;

(b) a one-time payment equal to the higher of (i) Executive’s bonus for the previous year and (ii) one-half of one percent of the

Company’s consolidated gross revenues for the previous twelve (12) months (the “Change of Control Termination Payment”).

(b) a one-time payment equal to the higher of (i) Executive’s bonus for the previous year and (ii) one-half of one percent of the

Company’s consolidated gross revenues for the previous twelve (12) months (the “Change of Control Termination Payment”).

following table summarizes the potential payments to Ms.

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following table sets forth a summary of the compensation earned by our Directors and/or paid to certain of our Directors pursuant to

the Company’s compensation policies for the fiscal year ended June 30, 2021, other than Najeeb Ghauri and Malea Farsai who were

the Company’s compensation policies for the fiscal year ended June 30, 2022, other than Najeeb Ghauri and Malea Farsai who were

paid as part of their employment agreements with the Company and not as directors.

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Compensation Policy

Najeeb and Naeem Ghauri and Ms.

Farsai are not paid any fees or other compensation for services as members of our Board of Directors.

Najeeb Ghauri and Ms.

Malea Farsai are not paid any fees or other compensation for services as members of our Board of Directors.

Committee relied on a survey conducted by Compensation Resources, Inc.

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BOARD ACTIVITY

CASH PAYMENTS

Board Member Fee

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Chairperson for Nominating and Corporate Governance Committee

previous years, the committee chairs have received additional compensation, but was eliminated as part of the Company’s Covid-19

mitigation measures.

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All current members of the Compensation

Committee are “independent directors”

as defined under the NASDAQ Listing Rules.

Committee are “independent directors” as defined under the NASDAQ Listing Rules.

None of these individuals were at any time

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executive officer of the Company serves as a member of the board of directors or compensation committee of any entity that has one or

more executive officers serving as a member of the Company’s Board of Directors or Compensation Committee.

Number of Options Authorized

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12- SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

following table sets forth certain information regarding the beneficial ownership of the Company’s Common Stock, its only class

of outstanding voting securities as of September 20, 2022, by (i) each person who is known to the Company to own beneficially more than

5% of the outstanding common Stock with the address of each such person, (ii) each of the Company’s present directors and officers,

and (iii) all officers and directors as a group:

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Renaissance Technologies Holdings Corp.

Topline Capital Management LLC

All officers and directors as a group (eight persons)

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which does not include Najeeb Ghauri.

Company entered into an agreement with WRLD3D, whereby the Company was issued a Convertible Promissory Note (the “Convertible Note”)

which was fully executed on May 25, 2017.

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The Convertible Note bears interest at 5% per annum and all unpaid interest and principal is due

and payable upon the Company’s request on or after February 1, 2018.

Company entered into an agreement with WRLD3D, whereby NetSol Thai was issued a Convertible Promissory Note (the “Thai Convertible

Note”) which was fully executed on February 9, 2018.

and payable upon the Company’s request on or after February 1, 2018.

Company entered into an agreement with WRLD3D, whereby NetSol Thai was issued a Convertible Promissory Note (the “Thai Convertible

Note”) which was fully executed on February 9, 2018.

The maximum principal amount of the Convertible Note is $2,500,000, and as

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The Thai Convertible Note bears interest at 10% per annum and all unpaid interest

and principal is due and payable upon NetSol Thai’s request on or after March 31, 2019.

Company entered into an agreement with WRLD3D, whereby the Company was issued a Convertible Promissory Note (the “April 1, 2019

Note”) which was fully executed on April 1, 2019.

and principal is due and payable upon NetSol Thai’s request on or after March 31, 2019.

Company entered into an agreement with WRLD3D, whereby the Company was issued a Convertible Promissory Note (the “April 1, 2019

Note”) which was fully executed on April 1, 2019.

The maximum principal amount of the April 1, 2019 Note is $600,000, and as of

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The April 1, 2019 Note bears interest at 10% per annum and all unpaid interest and

principal is due and payable upon the Company’s request on or after March 31, 2020.

Company entered into an agreement with WRLD3D, whereby the Company was issued a Convertible Promissory Note (the “August 2019 Note”)

principal is due and payable upon the Company’s request on or after March 31, 2020.

Company entered into an agreement with WRLD3D, whereby the Company was issued a Convertible Promissory Note (the “August 2019 Note”)

which was fully executed on August 19, 2019.

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The August 2019

Note bears interest at 10% per annum and all unpaid interest and principal is due and payable upon the Company’s request on or

after March 31, 2020.

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PRINCIPAL ACCOUNTANT FEES AND SERVICES

Borgers audited the Company’s financial statements for the fiscal year ended June 30, 2021 and 2020.

Borgers audited the Company’s financial statements for the fiscal year ended June 30, 2022 and 2021.

The aggregate fees billed

by principal accountants for the annual audit and review of financial statements included in the Company’s Form 10-K, services

related to providing an opinion in connection with our public offering of shares of common stock and/or services that are normally provided

by the accountant in connection with statutory and regulatory filings or engagements was $250,000 for the years ended June 30, 2022 and

fees for fiscal year 2021 were $13,000 and consisted of the preparation of the Company’s federal and state tax returns for the

fees for fiscal year 2022 were $13,000 and consisted of the preparation of the Company’s federal and state tax returns for the

fiscal years 2021.

Tax fees for fiscal year 2020 were $15,000 and consisted of the preparation of the Company’s federal and state

Tax fees for fiscal year 2021 were $13,000 and consisted of the preparation of the Company’s federal and state

tax returns for the fiscal year 2020.

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The Audit Committee maintains a policy

for the engagement of the independent auditors that is intended to maintain the independent auditor’s independence from NetSol.

In adopting the policy, the Audit Committee considered the various services that the independent auditors have historically performed

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The policy, which is to be reviewed and re-adopted at least annually by the Audit Committee:

Approves the performance by the independent auditors of certain types of service (principally audit-related and tax), subject to

restrictions in some cases, based on the Committee’s determination that this would not be likely to impair the independent

auditors’

independence from NetSol;

Requires that management obtain the specific prior approval of the Audit Committee for each engagement of the independent auditors

to perform other types of permitted services;

Prohibits the performance by the independent auditors of certain types of services due to the likelihood that their independence

would be impaired.

Approves the performance by the independent auditors of certain types of service (principally audit-related and tax), subject to restrictions

in some cases, based on the Committee’s determination that this would not be likely to impair the independent auditors’ independence

Requires that management obtain the specific prior approval of the Audit Committee for each engagement of the independent auditors to

perform other types of permitted services;

Prohibits the performance by the independent auditors of certain types of services due to the likelihood that their independence would

approval required under the policy must be given by the Audit Committee, by the Chairman of the Committee in office at the time, or by

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standard applied by the Audit Committee in determining whether to grant approval of an engagement of the independent auditors is whether

the services to be performed, the compensation to be paid therefore and other related factors are consistent with the independent auditors’

independence under guidelines of the Securities and Exchange Commission and applicable professional standards.

1 unchanged sentence

include, but are not limited to, whether the work product is likely to be subject to, or implicated in, audit procedures during the audit

of NetSol’s financial statements;

whether the independent auditors would be functioning in the role of management or in an advocacy

whether performance of the service by the independent auditors would enhance NetSol’s ability to manage or control risk or

improve audit quality;

whether performance of the service by the independent auditors would increase efficiency because of their familiarity

with NetSol’s business, personnel, culture, systems, risk profile and other factors;

and whether the amount of fees involved, or

the proportion of the total fees payable to the independent auditors in the period that is for tax and other non-audit services, would

tend to reduce the independent auditors’

ability to exercise independent judgment in performing the audit.

tend to reduce the independent auditors’ ability to exercise independent judgment in performing the audit.

15 – EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

Articles of Incorporation of Mirage Holdings, Inc., a Nevada corporation, dated March 18, 1997, incorporated by reference as Exhibit 3.1 to NETSOL’s Registration Statement No.

333-28861 filed on Form SB-2 filed June 10, 1997.

Amendment to Articles of Incorporation dated May 21, 1999, incorporated by reference as Exhibit 3.2 to NETSOL’s Annual Report for the fiscal year ended June 30, 1999 on Form 10K-SB filed September 28, 1999.

Amendment to the Articles of Incorporation of NETSOL International, Inc.

dated March 20, 2002 incorporated by reference as Exhibit 3.3 to NETSOL’s Annual Report on Form 10-KSB/A filed on February 2, 2001.

Amendment to the Articles of Incorporation of NetSol Technologies, Inc.

dated August 20, 2003 filed as Exhibit A to NETSOL’s Definitive Proxy Statement filed June 27, 2003.

Amendment to the Articles of Incorporation of NetSol Technologies, Inc.

dated March 14, 2005 filed as Exhibit 3.0 to NETSOL’s quarterly report filed on Form 10-QSB for the period ended March 31, 2005.

Amendment to the Articles of Incorporation dated October 18, 2006 filed as Exhibit 3.5 to NETSOL’s Annual Report for the fiscal year ended June 30, 2007 on Form 10-KSB.

dated March 14, 2005 filed as Exhibit 3.0 to NETSOL’s quarterly report filed on Form 10-QSB for the period ended March 31, 2005.

Amendment to the Articles of Incorporation dated October 18, 2006 filed as Exhibit 3.5 to NETSOL’s Annual Report for the fiscal year ended June 30, 2007 on Form 10-KSB.

Amendment to Articles of Incorporation dated May 12, 2008.

Amendment to the Articles of Incorporation dated August 6, 2012, filed as Appendix A to NETSOL’s Definitive Proxy Statement filed June 14, 2012.

Amended and Restated Bylaws of NetSol Technologies, Inc.

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and the shareholders of McCue Systems, Inc.

incorporated by reference as Exhibit 2.1 to NETSOL’s Current Report filed on form 8-K on May 8, 2006.

Employment Agreement by and between NetSol Technologies, Inc.

McGlasson dated May 1, 2006 incorporated by reference as Exhibit 10.20 to NETSOL’s Annual Report on form 10-KSB dated September 18, 2006.

Employment Agreement by and between the Company and Najeeb Ghauri dated January 1, 2007 filed as Exhibit 10.11 to the Company’s Annual Report filed on Form 10-KSB for the year ended June 30, 2007.

Employment Agreement by and between the Company and Naeem Ghauri dated January 1, 2007 filed as Exhibit 10.11 to the Company’s Annual Report filed on Form 10-KSB for the year ended June 30, 2007.

McGlasson dated May 1, 2006 incorporated by reference as Exhibit 10.20 to NETSOL’s Annual Report on form 10-KSB dated September 18, 2006.

Employment Agreement by and between the Company and Najeeb Ghauri dated January 1, 2007 filed as Exhibit 10.11 to the Company’s Annual Report filed on Form 10-KSB for the year ended June 30, 2007.

Employment Agreement by and between the Company and Naeem Ghauri dated January 1, 2007 filed as Exhibit 10.11 to the Company’s Annual Report filed on Form 10-KSB for the year ended June 30, 2007.

Amendment to Employment Agreement by and between Company and Najeeb Ghauri dated effective January 1, 2007.

Amendment to Employment Agreement by and between Company and Naeem Ghauri dated effective January 1, 2007.

Company 2005 Stock Option Plan incorporated by reference as Exhibit 1.1 to NETSOL’s Definitive Proxy Statement filed on March 3, 2006.

Amendment to Employment Agreement by and between Company and Najeeb Ghauri dated effective January 1, 2010.

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McGlasson dated effective April 1, 2010.

Company’s 2011 Equity Incentive and Nonstatutory Plan incorporated by reference as Appendix A to NETSOL’s Proxy Statement filed on April 11, 2011.

Company’s 2013 Equity Incentive Plan incorporated by reference as Appendix A to NETSOL’s Definitive Proxy Statement filed on May 29, 2013.

Company’s 2011 Equity Incentive and Nonstatutory Plan incorporated by reference as Appendix A to NETSOL’s Proxy Statement filed on April 11, 2011.

Company’s 2013 Equity Incentive Plan incorporated by reference as Appendix A to NETSOL’s Definitive Proxy Statement filed on May 29, 2013.

Amendment to Employment Agreement between NetSol Technologies, Inc.

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Restated Code of Business Conduct & Ethics dated effective September 10, 2013.

Company’s 2015 Equity Incentive Plan incorporated by reference as Appendix A to NETSOL’s Definitive Proxy Statement filed on April 15, 2015.

A list of all subsidiaries of the Company (1)

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley act of 2002 (CFO) (1)

XBRL Instance Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension definition Linkbase Document

XBRL Taxonomy Extension Label Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

Page Interactive Data File (embedded within the Inline XBRL document)

Filed Herewith

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September 27, 2022

Chief Financial Officer

Principal Accounting Officer

Financial Officer

Accounting Officer

September 27,2022

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TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of June 30, 2021 and 2020

of Independent Registered Public Accounting Firm

Balance Sheets as of June 30, 2022 and 2021

Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended June 30, 2022 and 2021

Consolidated Statement of Equity for the Years Ended June 30, 2021 and 2020

Consolidated Statements of Cash Flows for the Years Ended June 30, 2021 and 2020

Notes to Consolidated Financial Statements

Statement of Equity for the Years Ended June 30, 2022 and 2021

Statements of Cash Flows for the Years Ended June 30, 2022 and 2021

to Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

1 unchanged sentence

and subsidiaries

Calabasas, California

on the Financial Statements

have audited the accompanying consolidated balance sheets of NetSol Technologies, Inc.

and subsidiaries (the “Company”) as

of June 30, 2021 and 2020, and the related consolidated statements of operations, comprehensive income (loss), stockholders’

and cash flows for the period then ended.

In our opinion, the consolidated financial statements present fairly, in all material respects,

the consolidated financial positions of NetSol Technologies, Inc.

and subsidiaries as of June 30, 2021 and 2020 and the results of their

operations and their cash flows for the period then ended in conformity with accounting principles generally accepted in the United States

consolidated financial statements are the responsibility of the Company’s management.

and subsidiaries (the “Company”) as

of June 30, 2022 and 2021, and the related consolidated statements of operations and comprehensive income (loss), stockholders’

equity and cash flows for the year ended June 30, 2022, and the related notes (collectively referred to as the “financial statements”).

our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial positions

of NetSol Technologies, Inc.

and subsidiaries as of June 30, 2022 and 2021 and the results of their operations and their cash flows for

the year ended June 30, 2022, in conformity with accounting principles generally accepted in the United States of America.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion

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understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of

the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

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matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

recognition —

identification of contractual terms in certain customer arrangements

recognition — identification of contractual terms in certain customer arrangements

Audit Matter Description

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arrangements to determine the transaction price is a critical audit matter are there was significant judgment by management in identifying

contractual terms due to the volume and customized nature of the Company’s customer arrangements.

This in turn led to significant

1 unchanged sentence

the transaction price and the timing of revenue recognition were appropriately identified and determined by management and to evaluate

the reasonableness of management’s estimates.

the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated

3 unchanged sentences

and revenue recognition.

These procedures also included, among others, (i) testing the completeness and accuracy of management’s

identification of the contractual terms by examining customer arrangements on a test basis, and (ii) testing management’s process

These procedures also included, among others, (i) testing the completeness and accuracy of management’s

identification of the contractual terms by examining customer arrangements on a test basis, and (ii) testing management’s process

for determining the appropriate amount and timing of revenue recognition based on the contractual terms identified in the customer arrangements.

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make significant estimates and assumptions related to projected revenue growth rates, discount rates, and earnings before interest, taxes,

depreciation and amortization (“EBITDA”).

Changes in these assumptions could have a significant impact on the fair value

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the significant judgments made by management to estimate the fair value of the reporting units, performing audit procedures to evaluate

the reasonableness of management’s estimates and assumptions related to projected revenue growth rates, discount rates, EBITDA

and EBITDA margin required a high degree of auditor judgment and an increased extent of effort, including the assistance of our fair

1 unchanged sentence

the Critical Audit Matter Was Addressed in the Audit

Our audit procedures

related to management’s estimates and assumptions related to projected revenue growth rates, discount rates, EBITDA and EBITDA

margin for the reporting units included the following, among other procedures:

We tested the effectiveness

of internal controls over the goodwill impairment evaluation, including controls over the selection of the discount rates and over

forecasts of future revenue growth rates, EBITDA, and EBITDA margin.

We performed a retrospective

review comparing actual revenue and EBITDA results of the reporting unit for 2021 to the forecasted results from 2020.

We performed a retrospective

review comparing management’s estimates and assumptions relating to revenue, EBITDA, and EBITDA margin projections for the

reporting unit used for the purpose of current year’s annual impairment test to the projections previously used in connection

with the prior year annual impairment test.

We evaluated the consistency

of estimates and assumptions relating to revenue and EBITDA growth inherent in the discounted cash flow model for the reporting unit

to those used by management in other annual forecasting activities.

With the assistance of

our fair value specialists, we performed a benchmarking exercise comparing management’s estimates and assumptions related to

revenue growth, EBITDA and EBITDA margin for the reporting unit as of the measurement date to the revenue growth, EBITDA and EBITDA

margins of a peer group of public companies for the most recent three years and the projection period.

With the assistance of

our fair value specialists, we evaluated (1) the valuation methodology used and (2) the projections of long-term revenue growth and

the discount rates by testing the underlying source information, and by developing a range of independent estimates and comparing

those to the rates selected by management.

audit procedures related to management’s estimates and assumptions related to projected revenue growth rates, discount rates,

EBITDA and EBITDA margin for the reporting units included the following, among other procedures:

tested the effectiveness of internal controls over the goodwill impairment evaluation, including controls over the selection of the

discount rates and over forecasts of future revenue growth rates, EBITDA, and EBITDA margin.

performed a retrospective review comparing actual revenue and EBITDA results of the reporting unit for 2022 to the forecasted results

performed a retrospective review comparing management’s estimates and assumptions relating to revenue, EBITDA, and EBITDA margin

projections for the reporting unit used for the purpose of current year’s annual impairment test to the projections previously

used in connection with the prior year annual impairment test.

evaluated the consistency of estimates and assumptions relating to revenue and EBITDA growth inherent in the discounted cash flow

model for the reporting unit to those used by management in other annual forecasting activities.

the assistance of our fair value specialists, we performed a benchmarking exercise comparing management’s estimates and assumptions

related to revenue growth, EBITDA and EBITDA margin for the reporting unit as of the measurement date to the revenue growth, EBITDA

and EBITDA margins of a peer group of public companies for the most recent three years and the projection period.

the assistance of our fair value specialists, we evaluated (1) the valuation methodology used and (2) the projections of long-term

revenue growth and the discount rates by testing the underlying source information, and by developing a range of independent estimates

and comparing those to the rates selected by management.

BF Borgers CPA PC.

PUBLIC ACCOUNTANTS

have served as the Company’s auditor since 2020.

have served as the Company’s auditor since 2020

BF Borgers CPA PC (PCAOB ID 5041 ).

TECHNOLOGIES, INC.

AND SUBSIDIARIES

Balance Sheets

June 30, 2021

June 30, 2020

Consolidated Balance Sheets

and cash equivalents

receivable, net of allowance of $ 156,846 and $ 166,231

in excess of billings, net of allowance of $ 136,839 and $ 136,976

current assets, net of allowance of $ 1,243,633 and $ 1,243,633

current assets

Cash and cash equivalents

Accounts receivable, net of allowance of $166,231 and $435,611

Accounts receivable - related party, net of allowance of $1,373,099 and $90,594

Revenues in excess of billings, net of allowance of $136,976 and $188,914

Revenues in excess of billings - related party, net of allowance of $8,163 and $0

Other current assets, net of allowance of $1,243,633 and $0

Total current assets

Revenues in excess of billings, net - long term

Convertible note receivable - related party, net of allowance of $4,250,000 and $0

Property and equipment, net

Right of use of assets - operating leases

Long term investment

Intangible assets, net

LIABILITIES AND STOCKHOLDERS’

in excess of billings, net - long term

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

and equipment, net

of use 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

Accounts payable and accrued expenses

Current portion of loans and obligations under finance leases

Current portion of operating lease obligations

Unearned revenue

Total current liabilities

Loans and obligations under finance leases;

and obligations under finance leases;

less current maturities

Operating lease obligations;

lease obligations;

less current maturities

Total liabilities

Commitments and contingencies

Stockholders’

Preferred stock, $.01 par value;

and contingencies

Stockholders’

stock, $ .01 par value;

500,000 shares authorized;

Common stock, $.01 par value;

stock, $ .01 par value;

14,500,000 shares authorized;

12,181,585 shares issued and 11,265,064 outstanding as of June 30, 2021 and 12,122,149 shares issued and 11,874,646 outstanding as of June 30, 2020

Additional paid-in-capital

Treasury stock (at cost, 916,521 shares and 247,503 shares as of June 30, 2021 and June 30, 2020, respectively)

Accumulated deficit

12,196,570 shares issued and 11,257,539 outstanding as of June 30, 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 June 30, 2022 and June 30, 2021, respectively)

( 3,920,856 )

( 3,820,750 )

Other comprehensive loss

( 39,652,438 )

( 38,801,282 )

Total NetSol stockholders’

Non-controlling interest

Total stockholders’

Total liabilities and stockholders’

comprehensive loss

( 39,363,085 )

( 31,868,481 )

NetSol stockholders’ equity

Non-controlling

stockholders’ equity

liabilities and stockholders’ equity

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

2 unchanged sentences

Statements of Operations

For the Years

Ended June 30,

Net Revenues:

Subscription and support

Services - related party

Total net revenues

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 from operations

Other income and (expenses)

Gain (loss) on sale of assets

Interest expense

Interest income

Gain (loss) on foreign currency exchange transactions

Share of net loss from equity investment

Total other income (expenses)

Net income before income taxes

Income tax provision

Non-controlling interest

Net income attributable to NetSol

Net income per share:

Net income per common share

Weighted average number of shares outstanding

(loss) from operations

( 1,078,323 )

income and (expenses)

on sale of assets

(loss) on foreign currency exchange transactions

of net loss from equity investment

( 2,021,480 )

income (expense)

other income (expenses)

income before income taxes

tax provision

( 1,026,617 )

Non-controlling

( 1,951,959 )

income (loss) attributable to NetSol

$ ( 851,156 )

income (loss) per share:

income (loss) per common share

Weighted average

number of shares outstanding

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

1 unchanged sentence

AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss)

For the Years

Ended June 30,

Other comprehensive income (loss):

Statements of Comprehensive Income (Loss)

income (loss)

$ ( 851,156 )

comprehensive income (loss):

( 11,175,077 )

adjustment attributable to non-controlling interest

translation adjustment

Translation adjustment attributable to non-controlling interest

Net translation adjustment

Comprehensive income (loss) attributable to NetSol

( 7,494,604 )

Comprehensive

income (loss) attributable to NetSol

$ ( 8,345,760 )

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

1 unchanged sentence

AND SUBSIDIARIES

Statement of Stockholders’

the Years Ended June 30, 2021 and 2020

Consolidated Statement of Stockholders’ Equity

For the Years Ended June 30, 2022 and 2021

Comprehensive

Stockholders’

Balance at June 30, 2019

Stockholders’

at June 30, 2020

$ 128,677,754

2 unchanged sentences

$ ( 34,085,047 )

Exercise of subsidiary common stock options

Subsidiary common stock issued for:

effect adjustment (1)

( 6,309,722 )

( 6,784,300 )

common stock issued for:

Acquisition of non-controlling interest in subsidiary

Dividend to non-controlling interest

Foreign currency translation adjustment

Net income for the year

Balance at June 30, 2020

stock issued for:

of treasury shares

( 2,364,781 )

currency translation adjustment

income for the year

at June 30, 2021

$ 129,018,826

$ ( 3,820,750 )

$ ( 38,801,282 )

$ ( 31,868,481 )

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

2016-13, Financial Instruments – Credit Losses (Topic

Measurement of Credit Losses on Financial Instruments.

Refer to Note 2 – Accounting Policies for more information.

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

1 unchanged sentence

AND SUBSIDIARIES

Consolidated Statement of Stockholders’

For the Years Ended June 30, 2021 and 2020

Statement of Stockholders’ Equity

the Years Ended June 30, 2022 and 2021

Comprehensive

Stockholders’

Balance at June 30, 2020

Stockholders’

at June 30, 2021

$ 129,018,826

2 unchanged sentences

$ ( 31,868,481 )

Cumulative effect adjustment (1)

Subsidiary common stock issued for:

common stock issued for:

Purchase of treasury shares

Foreign currency translation adjustment

Net income for the year

Balance at June 30, 2021

stock issued for:

of treasury shares

of subsidiary treasury shares

in APIC for purchase of subsidiary treasury shares

value of subsidiary options issued

currency translation adjustment

( 7,494,604 )

1 unchanged sentence

( 11,175,077 )

income (loss) for the year

income (loss)

at June 30, 2022

$ 128,218,247

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

2016-13, Financial Instruments –

Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments.

Refer to Note 2 –

Accounting Policies for more information.

$ ( 3,920,856 )

$ ( 39,652,438 )

$ ( 39,363,085 )

accompanying notes are an integral part of these consolidated financial statements

1 unchanged sentence

AND SUBSIDIARIES

Statements of Cash Flows

For the Years

Ended June 30,

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

(Gain) loss on sale of assets

Gain on forgiveness of loan

Stock based compensation

Changes in operating assets and liabilities:

Accounts receivable

Accounts receivable - related party

Revenues in excess of billing

Revenues in excess of billing - related party

Other current assets

Accounts payable and accrued expenses

Unearned revenue

Net cash provided by operating activities

Cash flows from investing activities:

Purchases of property and equipment

Sales of property and equipment

Convertible note receivable - related party

Investment in associates

Purchase of subsidiary shares

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from exercise of subsidiary options

Purchase of treasury stock

Dividend paid by subsidiary to non-controlling interest

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

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of the period

Cash and cash equivalents at end of period

Consolidated Statements of Cash Flows

flows from operating activities:

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

and amortization

for bad debts

of net loss from investment under equity method

on sale of assets

on forgiveness of loan

based compensation

in operating assets and liabilities:

( 5,669,262 )

in excess of billing

( 1,273,693 )

current assets

payable and accrued expenses

cash provided by operating activities

flows from investing activities:

of property and equipment

( 2,609,205 )

( 2,551,283 )

of property and equipment

in associates

cash used in investing activities

( 2,260,147 )

( 2,518,550 )

flows from financing activities:

of treasury stock

( 2,364,781 )

of subsidiary treasury stock

from bank loans

on finance lease obligations and loans - net

( 1,270,104 )

cash used in financing activities

( 1,378,721 )

( 1,165,565 )

of exchange rate changes

( 9,163,111 )

increase (decrease) in cash and cash equivalents

( 9,741,357 )

and cash equivalents at beginning of the period

and cash equivalents at end of period

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

2 unchanged sentences

Consolidated Statements of Cash Flows (Continued)

For the Years

Ended June 30,

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

Assets recognized under operating lease

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 consolidated financial statements.

6 unchanged sentences

and subsidiaries

collectively referred to as the “Company”)

Company designs, develops, markets, and exports proprietary software products to customers in the automobile financing and leasing, banking,

7 unchanged sentences

Technologies Americas, Inc.

(“NTA”)

Connect (Private), Ltd.

(“Connect”)

Technologies Australia Pty Ltd.

(“Australia”)

Technologies Europe Limited (“NTE”)

(Thailand) Co.

Limited (“NTPK Thailand”)

NetSol Technologies Australia Pty Ltd.

(“Australia”)

NetSol Technologies Europe Limited (“NTE”)

NTPK (Thailand) Co.

Limited (“NTPK Thailand”)

Technologies (Beijing) Co.

(“NetSol Beijing”)

(“AEL”)

Lease Services Holdings Limited (“VLSH”)

Lease Services Limited (“VLS”)

Lease Services (Ireland) Limited (“VLSIL”)

(“NetSol Beijing”)

NuoJinZhiCheng Co., Ltd (“Tianjin”)

Lease Services Holdings Limited (“VLSH”)

Virtual Lease Services Limited (“VLS”)

Virtual Lease Services (Ireland) Limited (“VLSIL”)

Majority-owned

Technologies, Ltd.

(“NetSol PK”)

Innovation (Private) Limited (“NetSol Innovation”)

Technologies Thailand Limited (“NetSol Thai”)

(“OTOZ”)

(Thailand) Limited (“OTOZ Thai”)

NetSol Technologies, Ltd.

(“NetSol PK”)

NetSol Innovation (Private) Limited (“NetSol Innovation”)

NetSol Technologies Thailand Limited (“NetSol Thai”)

(Thailand) Limited (“OTOZ Thai”)

Company consolidates any variable interest entities of which it is the primary beneficiary.

Equity investments through which the Company

exercises significant influence over but does not control the investee and is not the primary beneficiary of the investee’s activities

are accounted for using the equity method.

3 unchanged sentences

have been eliminated in the consolidation.

of Presentation

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

States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

TECHNOLOGIES, INC.

1 unchanged sentence

30, 2022 and 2021

Reclassifications

comparative purposes, prior year’s consolidated financial statements have been reclassified to conform to report classifications

of the current period.

Below is the table of reclassified amounts:

For the Years ended

June 30, 2020

Originally reported

Subscription and support

Services - related party

Total net revenues

of Presentation

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

States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of

20 unchanged sentences

maintained in China are insured for RMB 500,000 ($ 74,627 ) in each bank and in the UK for GBP 85,000 ($ 103,659 ) in each bank.

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

As of June 30, 2021 and 2020, the Company had uninsured

deposits related to cash deposits in accounts maintained within foreign entities of approximately $31,662,035 and $18,210,378, respectively.

The Company has not experienced any losses in such accounts.

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2021 and 2020

Company’s operations are carried out globally.

Accordingly, the Company’s business, financial condition and results of operations

may be influenced by the political, economic and legal environments of each country and by the general state of the country’s economy.

The Company’s operations in each foreign country are subject to specific considerations and significant risks not typically associated

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

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

related to cash deposits in accounts maintained within foreign entities of approximately $ 22,758,963 and $ 31,662,035 , respectively.

Company has not experienced any losses in such accounts.

Company’s operations are carried out globally.

Accordingly, the Company’s business, financial condition and results of operations

may be influenced by the political, economic and legal environments of each country and by the general state of the country’s economy.

The Company’s operations in each foreign country are subject to specific considerations and significant risks not typically associated

with companies in economically developed nations.

1 unchanged sentence

environments and foreign currency exchange.

The Company’s results may be adversely affected by changes in governmental policies

with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of

15 unchanged sentences

and recognized in interest income.

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2022 and 2021

in Excess of Billings

1 unchanged sentence

As the customers

are billed under the terms of their contract, the corresponding amount is transferred from this account to “Accounts Receivable.”

Company uses the equity investment without readily determinable fair value method to account for investments in businesses that are not

5 unchanged sentences

In accordance with the equity method, these investments

are originally recorded at cost and are adjusted for the Company’s proportionate share of earnings, losses and distributions.

investments are classified as long-term.

2 unchanged sentences

are recognized when realized and recorded in other income (expense) in the accompanying Consolidated Statements of Operations.

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2021 and 2020

and Equipment

9 unchanged sentences

of the assets:

Estimated Useful Life

Computer equipment and software

Office furniture and equipment

5 to 10 Years

Assets under capital leases

3 to 10 Years

5 to 10 Years

OF ESTIMATED USEFUL LIVES OF ASSETS

equipment and software

furniture and equipment

under capital leases

Company capitalizes costs of materials, consultants, and payroll and payroll-related costs for employees incurred in developing internal-use

computer software.

These costs are included with “Computer equipment and software.”

of Long-Lived Assets

3 unchanged sentences

the fair value.

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2022 and 2021

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

21 unchanged sentences

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

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2021 and 2020

and Development Costs

10 unchanged sentences

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

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

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

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2022 and 2021

Value of Financial Instruments

Company applies the provisions of ASC 820-10, “Fair Value Measurements and Disclosures.”

ASC 820-10 defines fair value

Company applies the provisions of ASC 820-10, “Fair Value Measurements and Disclosures.” ASC 820-10 defines fair value

and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for

10 unchanged sentences

and are less observable and thus have the lowest priority.

financial assets that are measured at fair value on a recurring basis as of June 30, 2022 are as follows:

OF FAIR VALUE OF FINANCIAL ASSETS MEASURED ON RECURRING BASIS

in excess of billings - long term

financial assets that are measured at fair value on a recurring basis as of June 30, 2021, are as follows:

in excess of billings - long term

TECHNOLOGIES, INC.

1 unchanged sentence

30, 2022 and 2021

financial assets that are measured at fair value on a recurring basis as of June 30, 2021 are as follows:

Revenues in excess of billings - long term

financial assets that are measured at fair value on a recurring basis as of June 30, 2020, are as follows:

Revenues in excess of billings - long term

reconciliation for the years ended June 30, 2022 and 2021 is as follows:

Revenues in excess of billings - long term

Fair value discount

Balance at June 30, 2019

Amortization during the period

Effect of Translation Adjustment

Balance at June 30, 2020

Amortization during the period

Transfers to short term

Effect of Translation Adjustment

SCHEDULE OF FAIR VALUE OF FINANCIAL INSTRUMENTS RECONCILIATION

of billings - long term

at June 30, 2020

during the period

to short term

( 1,341,575 )

of Translation Adjustment

Balance at June 30,

Company used the discounted cash flow method with interest rates ranging from 4.65% to 6.25% and 4.35% for the years ended June 30, 2021

and 2020, respectively.

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

Equity”

and ASC 815, “Derivatives and Hedging.”

Derivative liabilities are adjusted to reflect fair value

during the period

to short term

of Translation Adjustment

at June 30, 2022

Company used the discounted cash flow method with an interest rate of 4.35 % for the years ended June 30, 2021 and 2022.

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

Equity” and ASC 815, “Derivatives and Hedging.” Derivative liabilities are adjusted to reflect fair value

at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value

5 unchanged sentences

revenue represents billings in excess of revenue earned on contracts and are recognized on a pro-rata basis over the life of the contract.

Unearned revenue was $4,556,626 and $4,095,472 at June 30, 2021 and 2020, respectively.

of revenues includes salaries and benefits for technical employees, consultant costs, amortization of capitalized computer software development

costs, depreciation of computer and equipment, travel costs, and indirect costs such as rent and insurance.

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2021 and 2020

Company expenses the cost of advertising as incurred.

1 unchanged sentence

$ 224,933 , respectively.

Company records stock compensation in accordance with ASC 718, Compensation –

Stock Compensation .

Company records stock compensation in accordance with ASC 718, Compensation – Stock Compensation .

ASC 718 requires companies

to measure compensation cost for stock employee compensation at fair value at the grant date and recognize the expense over the employee’s

requisite service period.

2 unchanged sentences

grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees.

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2022 and 2021

taxes are accounted for under the asset and liability method.

28 unchanged sentences

NetSol Australia uses the Australian dollar;

and NetSol Beijing uses the Chinese Yuan as the functional currencies.

NetSol Technologies,

Inc., and its subsidiaries, NTA and OTOZ, use the U.S.

and NetSol Beijing and Tianjin use the Chinese Yuan as the functional currencies.

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

dollar as the functional currency.

Consequently, revenues and expenses of operations

outside the United States are translated into U.S.

Dollars using average exchange rates while assets and liabilities of operations outside

the United States are translated into U.S.

Consequently, revenues

and expenses of operations outside the United States are translated into U.S.

Dollars using average exchange rates while assets and liabilities

of operations outside the United States are translated into U.S.

Dollars using exchange rates at the balance sheet date.

The effects of foreign currency translation

adjustments are recorded to other comprehensive income.

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2021 and 2020

of foreign currency translation adjustments are recorded to other comprehensive income.

of Cash Flows

Company’s cash flows from operations are calculated based upon the local currencies.

As a result, amounts related to assets and

5 unchanged sentences

resources and assesses the performance of its sales activities based on the geographic locations of its subsidiaries.

(See Note 21 “Segment

Information and Geographic Areas”)

Accounting Standards Adopted by the Company:

January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-04, Simplifying the Test for Goodwill

Under the new standard, goodwill impairment would be measured as the amount by which a reporting unit’s carrying

value exceeds its fair value, not to exceed the carrying value of goodwill.

This ASU eliminates existing guidance that requires an entity

to determine goodwill impairment by calculating the implied fair value of goodwill by hypothetically assigning the fair value of a reporting

unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination.

This update is effective

for annual periods beginning after December 15, 2019, and interim periods within those periods.

Early adoption is permitted for interim

or annual goodwill impairment test performed on testing dates after January 1, 2017.

The Company adopted this standard on July 1, 2020

and the adoption did not have a material effect on our consolidated financial statements.

June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses on Financial

Instruments .

ASU 2016-13 introduced a new forward-looking approach, based on expected losses, to estimate credit losses on certain

types of financial instruments, including trade receivables, contract assets and held-to-maturity debt securities, which requires the

Company to incorporate considerations of historical information, current information and reasonable and supportable forecasts.

also expands disclosure requirements.

Company adopted the standard on July 1, 2020 using the modified retrospective approach.

The adoption of ASU 2016-13 resulted in changes

to the Company’s accounting policies for trade and other receivables, contract assets and convertible notes receivable.

the results of the Company’s evaluation, the adoption of ASU 2016-13 resulted in a one-time cumulative-effect adjustment through

retained earnings of $6,784,300 to increase its allowance for credit losses related to the convertible notes receivable, interest receivable,

accounts receivable, revenues in excess of billings, and other receivables.

following table presents the impact of adopting ASC Topic 326 as of July 1, 2020:

Asset Classification

ASC Topic 326

Allowance for credit losses - accounts receivable

Allowance for credit losses - accounts receivable - related party

Allowance for credit losses - revenue in excess of billings - related party

Allowance for credit losses - convertible notes receivable - related party

Allowance for credit losses - other current assets

receivable includes trade accounts receivables from the Company’s customers, net of an allowance for credit risk.

Accounts receivable

are recorded at the invoiced amount and do not bear interest.

In establishing the required allowance, management regularly reviews the

composition of accounts receivable and analyzes customer credit worthiness, customer concentrations, current economic trends and changes

in customer payment patterns.

Account balances are charged off against the allowance after all means of collection have been exhausted

and the potential for recovery is considered remote.

(See Note 21 “Segment

Information and Geographic Areas”)

TECHNOLOGIES, INC.

1 unchanged sentence

30, 2022 and 2021

in excess of billings, relates to services performed which were not billed, net of an allowance for credit risk.

As customers are billed

under the terms of the contract, the corresponding amount is transferred to accounts receivable.

In establishing the required allowance,

management regularly reviews the composition of and analyzes customer credit worthiness, customer concentrations, current economic trends,

changes in customer payment patterns, the project status and assesses individual unbilled contract assets over a specific aging and amount.

Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery

is considered remote.

convertible notes receivable represents loans provided to WRLD3D.

The allowance for credit risk for the convertible notes is established

based on various quantitative and qualitative factors including customer credit worthiness, current economic trends and changes in payment

Account balances are charged off against the allowance after all means of collection have been exhausted and the potential

for recovery is considered remote.

Standards Recently Issued but Not Yet Adopted by the Company:

Accounting Standards Adopted by the Company :

December 2019, the FASB issued ASU No.

2019-12, “Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes”

2019-12”).

ASU 2019-12 removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation

and calculating income taxes in interim periods.

The ASU also adds guidance to reduce complexity in certain areas, including recognizing

deferred taxes for tax goodwill and allocating taxes to members of a consolidated group.

This ASU is effective for fiscal years (and

interim periods within those fiscal years) beginning after December 15, 2020, which for the Company is the first quarter of fiscal 2022.

Early adoption is permitted.

The Company does not expect this update to have a material impact on its Consolidated Financial Statements.

2019-12, Income Taxes (ASC 740):

Simplifying the Accounting for Income Taxes , which is

intended to simplify the accounting for income taxes by removing certain exceptions and by updating accounting requirements around franchise

taxes, goodwill recognized for tax purposes, the allocation of current and deferred tax expense among legal entities, among other minor

Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied

on a retrospective or modified retrospective basis.

This new standard is effective for fiscal years beginning after December 15, 2020

and was adopted by the Company July 1, 2021.

The adoption of the new standard did not have a material impact on the Company’s consolidated

financial statements.

Standards Recently Issued but Not Yet Adopted by the Company :

August 2020, the FASB issued ASU No.

2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives

and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives

and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an

Entity’s Own Equity”

(“ASU 2020-06”).

Entity’s Own Equity” (“ASU 2020-06”).

ASU 2020-06 reduces the number of accounting models for convertible debt

11 unchanged sentences

permitted beginning in the first quarter of fiscal 2022.

The Company is currently assessing the impact and timing of adoption of this

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

financial statements.

March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

5 unchanged sentences

The expedients and exceptions provided by this guidance apply only to contracts,

hedging relationships, and other transactions that reference the London interbank offered rate (“LIBOR”) or another reference

rate expected to be discontinued as a result of reference rate reform.

4 unchanged sentences

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

August 2020, the FASB issued ASU 2020-06, “ Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”,

which simplifies accounting for convertible instruments by removing major separation models required under current Generally Accepted

Accounting Principles (GAAP).” In addition, the ASU “removes certain settlement conditions that are required for equity contracts

to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it” and “simplifies

the diluted earnings per share (EPS) calculation in certain areas.

The guidance is effective for fiscal years beginning after December

15, 2021 and interim periods therein, with early adoption permitted.

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

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.

30 unchanged sentences

to take possession of the software.

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

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

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.

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

licenses and a professional services engagement.

1 unchanged sentence

post contract support and services in addition to the licenses.

The Company’s single performance obligation arrangements are typically

post contract support renewals, subscription renewals and services engagements.

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

for any distinct good or service, the Company may be required to allocate the contract’s transaction price to each performance

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

for any distinct good or service, the Company may be required to allocate the contract’s transaction price to each performance

obligation using its best estimate for the SSP.

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

The Company’s typical payment

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

12 unchanged sentences

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

The Company’s customers

purchase both product support and license updates when they acquire new software licenses.

20 unchanged sentences

Disaggregated

Company disaggregates revenue from contracts with customers by category —

core and non-core, as it believes it best depicts how

Company disaggregates revenue from contracts with customers by category — core and non-core, as it believes it best depicts how

the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

2 unchanged sentences

30, 2022 and 2021

Company’s disaggregated revenue by category is as follows:

SCHEDULE OF DISAGGREGATED REVENUE BY CATEGORY

For the Years

7 unchanged sentences

Due to the complexity of certain contracts,

the actual revenue recognition treatment required under Topic 606 for the Company’s arrangements may be dependent on contract-specific

terms and may vary in some instances.

8 unchanged sentences

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

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

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

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

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

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

4 unchanged sentences

those modules at an optional price.

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

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

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

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

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

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

that the work requires.

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

the work requires.

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

4 unchanged sentences

30, 2022 and 2021

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

performance obligations.

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

or hours expended to measure progress.

6 unchanged sentences

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

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

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

6 unchanged sentences

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

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

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

4 unchanged sentences

of a milestone.

Company’s revenues in excess of billings and unearned revenue are as follows:

SCHEDULE OF REVENUES IN EXCESS OF BILLINGS AND DEFERRED REVENUE

June 30, 2022

14 unchanged sentences

Accordingly, some factors

that affect the Company’s revenue, such as the availability and demand for modules within customer geographic locations, is not

entirely within the Company’s control.

that affect the Company’s revenue, such as the availability and demand for modules within customer geographic locations, is not

entirely within the Company’s control.

In instances where the timing of revenue recognition differs from the timing of invoicing,

1 unchanged sentence

The primary purpose of invoicing

terms is to provide customers with simplified and predictable ways of purchasing the Company’s products and services, and not to

facilitate financing arrangements.

4 unchanged sentences

Expedients and Exemptions

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

The Company has applied the following practical expedients:

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

transfer of the promised items to the customer.

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

the transfer of the promised items to the customer.

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

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

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

Statement of Operations.

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

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

These costs are recorded within sales and marketing expense in the

Consolidated Statement of Operations.

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

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

engagements).

to Obtain a Contract

4 unchanged sentences

enter into contractual arrangements with customers.

In addition, the Company’s sales personnel receive fees that are referred to

as commissions, but that are based on more than simply signing up new customers.

The Company’s sales personnel are required to

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

6 unchanged sentences

shares outstanding during the period using the treasury stock method.

Dilutive potential common shares include outstanding stock options

and stock awards.

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

For the year ended June 30, 2021

Basic income per share:

Net income available to common shareholders

Effect of dilutive securities

Diluted income per share

For the year ended June 30, 2020

Basic income per share:

Net income available to common shareholders

Effect of dilutive securities

Diluted income per share

During the years ended June 30, 2022 and 2021, there were no outstanding dilutive instruments.

5 – MAJOR CUSTOMERS

the year ended June 30, 2021, revenues from Daimler Financial Services (“DFS”) and BMW Financial (“BMW”) were

$11,522,694 and $7,137,653, respectively representing 21.0% and 13.0%, respectively of revenues.

During the year ended June 30, 2020,

revenues from Daimler Financial Services (“DFS”) and BMW Financial (“BMW”) were $14,869,030 and $8,904,809, respectively

representing 26.4% and 15.8%, respectively of revenues.

The revenue from these customers are shown in the Asia –

Pacific segment.

the year ended June 30, 2022, revenues from Daimler Financial Services (“DFS”) and BMW Financial (“BMW”)

were $ 18,090,059

and $ 4,273,740 ,

respectively representing 31.6 %

respectively of revenues.

During the year ended June 30, 2021, revenues from DFS and BMW were $ 11,522,694

and $ 7,137,653 ,

respectively representing 21.0 %

respectively of revenues.

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

receivable from DFS and BMW at June 30, 2022, were $ 2,005,463 and $ 2,498,645 , respectively.

3 unchanged sentences

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

Included in this amount was $1,300,289

shown as long term at June 30, 2020.

CONVERTIBLE NOTE RECEIVABLE –

RELATED PARTY

6 – CONVERTIBLE NOTE RECEIVABLE – RELATED PARTY

Company has entered into multiple convertible note receivable agreements with WRLD3D.

3 unchanged sentences

shares of WRLD3D stock upon the occurrence of certain events.

The Company has a security interest in all of WRLD3D’s personal property,

inventory, equipment, general intangibles, financial assets, investment property, securities, deposit accounts and the proceeds thereof.

3 unchanged sentences

following table summarizes the convertible notes receivable from WRLD3D.

SCHEDULE OF CONVERTIBLE NOTES

Convertible Note

Agreement Date

Interest Rate

Maturity Date

March 2, 2018

6 unchanged sentences

Less allowance for doubtful account

Company has accrued interest of $701,062 at June 30, 2021 and 2020, which is included in “Other current assets”.

( 4,250,000 )

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

has not been accruing interest since July 1, 2020.

1 unchanged sentence

current assets consisted of the following:

SCHEDULE OF OTHER CURRENT ASSETS

June 30, 2022

7 unchanged sentences

Less allowance for doubtful account

REVENUES IN EXCESS OF BILLINGS –

( 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 .

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2022 and 2021

8 – REVENUES IN EXCESS OF BILLINGS – LONG TERM

in excess of billings, net consisted of the following:

OF REVENUE IN EXCESS OF BILLING

June 30, 2022

6 unchanged sentences

in interest income for that period.

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

for the year ended June 30, 2021 and 4.35% during the year ended June 30, 2020.

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2021 and 2020

The Company used the discounted cash flow method with an interest rate of 4.35 % during the years

ended June 30, 2022 and 2021.

9 - PROPERTY AND EQUIPMENT

and equipment consisted of the following:

SCHEDULE OF PROPERTY AND EQUIPMENT

June 30, 2022

3 unchanged sentences

Assets Under Capital Leases

Capital Work In Progress

Accumulated Depreciation

6 unchanged sentences

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

SUMMARY OF FIXED ASSETS HELD UNDER CAPITAL LEASES

June 30, 2022

3 unchanged sentences

Accumulated Depreciation - Net

Fixed assets held under

finance leases, Total

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2022 and 2021

lease term and discount rate were as follows:

SCHEDULE OF FINANCE LEASE TERM

June 30, 2022

2 unchanged sentences

Weighted average discount rate - Finance leases

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2021 and 2020

Company leases certain office space, office equipment and autos with remaining lease terms of one year to 10 years under leases classified

4 unchanged sentences

for consideration, or the Company directs the use of the asset and obtains substantially all the economic benefits of the asset.

leases are recorded as right-of-use (“ROU”) assets and lease obligation liabilities for leases with terms greater than 12

ROU assets represent the Company’s right to use an underlying asset for the entirety of the lease term.

leases are recorded as right-of-use (“ROU”) assets and lease obligation liabilities for leases with terms greater than 12

ROU assets represent the Company’s right to use an underlying asset for the entirety of the lease term.

Lease liabilities

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

A ROU asset and a lease liability are recognized

10 unchanged sentences

For finance leases, the Company used the incremental borrowing rate implicit in the lease.

Company reviews the impairment of ROU assets consistent with the approach applied for the Company’s other long-lived assets.

Company reviews the recoverability of long-lived assets when events or changes in circumstances occur that indicate that the carrying

value of the asset may not be recoverable.

The assessment of possible impairment is based on the Company’s ability to recover the

carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations.

4 unchanged sentences

in a re-measurement of lease liabilities.

The Company’s variable lease payments include payments for finance leases that are adjusted

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.

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2022 and 2021

balance sheet information related to leases was as follows:

SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO LEASE

June 30, 2022

2 unchanged sentences

Total Lease Liabilities

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2021 and 2020

components of lease cost were as follows:

SCHEDULE OF COMPONENTS OF LEASE COST

For the Years

7 unchanged sentences

term and discount rate were as follows:

June 30, 2021

June 30, 2020

Weighted average remaining lease term - Operating leases

Weighted average discount rate - Operating leases

SCHEDULE OF LEASE TERM AND DISCOUNT RATE

average remaining lease term - Operating leases

average discount rate - Operating leases

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2022 and 2021

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

SCHEDULE OF SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION RELATED TO LEASES

For the Years

Ended June 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

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2021 and 2020

Operating cash flows related to finance leases

Financing cash flows related finance leases

of operating lease liabilities were as follows as of June 30, 2022:

SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES

Within year 1

9 unchanged sentences

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

agreements provide for a fixed base rent and terminate by July 2021.

agreements provide for a fixed base rent and terminate by January 2027.

All leases are considered operating leases.

There are no rights

to purchase the premises and no residual value guarantees.

For the years ended June 30, 2021 and 2020, the Company received $35,740 and

$33,426, respectively, of lease income.

rights to purchase the premises and no residual value guarantees.

For the years ended June 30, 2022 and 2021, the Company received

lease income of $ 35,356

and $ 35,740 ,

respectively.

11 – LONG-TERM INVESTMENT

Drivemate – Related Party

Company and Drivemate Co., Ltd.

(“Drivemate”) entered into a subscription agreement on April 25, 2019, (“Drivemate

Agreement”) whereby the Company purchased an equity interest of 30% in Drivemate.

(“Drivemate”) entered into a subscription agreement on April 25, 2019, (“Drivemate

Agreement”) whereby the Company purchased an equity interest of 30 % in Drivemate.

Per the Drivemate Agreement, the Company purchased

5,469 preferred shares for $1,800,000 consisting of $500,000 cash to be paid over a two-year period and $1,300,000 to be provided

5,469 preferred shares for $ 1,800,000 consisting of $ 500,000 cash to be paid over a two-year period and $ 1,300,000 to be provided in

The Company has paid the $ 500,000 in cash and has provided services of $ 1,300,000 .

Pursuant to the agreement, the number

of shares to be issued is adjusted as necessary to result in an equity ownership equal to 30% of the issued and outstanding shares at

the final payment date.

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

Per the Drivemate

Agreement, the Company appointed two directors to the Drivemate board.

The Company determined that it met the significant influence criteria

since two of the four directors are appointed by the Company and the Company owns 30% of Drivemate;

therefore, the Company accounts for

the investment using the equity method of accounting.

the years ended June 30, 2021 and 2020, the Company performed services of $18,006 and $1,054,372, respectively.

the equity method of accounting, the Company recorded its share of net loss of $20,001 and $16,714 for the years ended June 30, 2021

and 2020, respectively.

Pursuant to the agreement, the number of

shares to be issued is adjusted as necessary to result in an equity ownership equal to 30% of the issued and outstanding shares at the

final payment date.

As of June 30, 2022 and 2021, the Company owns 8,178 shares equal to 30.0% of Drivemate.

Per the Drivemate Agreement,

the Company appointed two directors to the Drivemate board.

The Company determined that it met the significant influence criteria since

two of the four directors are appointed by the Company and the Company owns 30% of Drivemate;

therefore, the Company accounts for the

investment using the equity method of accounting.

TECHNOLOGIES, INC.

1 unchanged sentence

30, 2022 and 2021

the years ended June 30, 2022 and 2021, the Company performed services of $ 12,528 and $ 18,006 , respectively.

the equity method of accounting, the Company recorded its share of net loss of $ 49,664 and $ 20,001 for the years ended June 30, 2022

and 2021, respectively.

For the year ended June 30, 2022, the Company performed a fair value analysis and determined that the carrying

amount of the investment exceeded the investment’s fair value;

therefore, the Company recorded an impairment of $ 651,018 .

The impairment

expense is recorded in the line item “share of net loss under equity method” in the “Consolidated Statement of Operations”.

WRLD3D-Related

4 unchanged sentences

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

As of June 30, 2021, NTI and NTPK own 1,636,876 and

4,092,189, respectively, of Series BB Preferred Stock.

As of June 30, 2022 and 2021, NTI and NTPK own 1,636,876

and 4,092,189 , respectively, of Series BB Preferred Stock.

connection with the investment, the Company and NetSol PK received a warrant to purchase preferred stock of WRLD3D, which warrants expired

2 unchanged sentences

an employee of the Company;

therefore, the Company accounts for the investment using equity method of accounting.

the years ended June 30, 2021 and 2020, NetSol PK provided services valued at $48,775 and $300,821, respectively, which is recorded as

services-related party.

Accounts receivable and revenue in excess of billing were $1,373,099 and $8,163 at June 30, 2020, respectively.

Upon adoption of ASC 326, an allowance was established for the full amounts of these accounts.

Under the equity method of accounting,

the Company recorded its share of net loss of $233,818 and $589,150 for the years ended June 30, 2021 and 2020, respectively.

therefore, the Company accounts for the investment using the equity method of accounting.

the year ended June 30, 2022 NetSol PK did no t provide any services and during the year ended June 30, 2021, NetSol PK provided services

valued at $ 48,775 , which is recorded as services-related party.

Under the equity method of accounting, the Company recorded its share

of net loss of $ 354,802 and $ 233,818 for the years ended June 30, 2022 and 2021, respectively.

For the year ended June 30, 2022, the

Company performed a fair value analysis and determined that the carrying amount of the investment exceeded the investment’s fair

therefore, the Company recorded an impairment of $ 965,996 .

The impairment expense is recorded in the line item “share of

net loss under equity method” in the “Consolidated Statement of Operations”.

following table reflects the above investments at June 30, 2022.

SCHEDULE OF LONG TERM INVESTMENT

Gross investment

Cumulative net loss on investment

( 3,238,647 )

( 3,979,279 )

Cumulative other comprehensive income (loss)

Net investment

The following table reflects the above investments at June 30, 2021.

Gross investment

Cumulative net loss on investment

( 1,924,134 )

( 1,962,987 )

Cumulative other comprehensive income (loss)

Net investment

12 - INTANGIBLE ASSETS

assets consisted of the following:

SCHEDULE OF INTANGIBLE ASSETS

June 30, 2022

7 unchanged sentences

( 28,900,340 )

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2022 and 2021

Product Licenses

3 unchanged sentences

Amortization expense for the years ended June 30, 2022 and 2021 was $ 1,632,764 and $ 1,807,736 , respectively.

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2021 and 2020

Future Amortization

amortization expense of intangible assets over the next five years is as follows:

June 30, 2022

SUMMARY OF ESTIMATED AMORTIZATION EXPENSE OF INTANGIBLE ASSETS

Period ended:

June 30, 2023

June 30, 2024

13 – GOODWILL

represents the excess of the aggregate purchase price over the fair value of the net assets acquired in prior period business combinations.

Goodwill was comprised of the following amounts:

As of June 30,

OF GOODWILL ACQUIRED

June 30, 2021

June 30, 2022

NetSol PK (Asia - Pacific)

NTA (North America)

$ ( 214,044 )

Company tests for goodwill impairment at each reporting unit and recorded an impairment of $ 214,044 at June 30, 2022.

The Company performed

the goodwill analysis using a combination of an income approach and a market approach.

The impairment was caused by the decline in VLS’

revenue due to the loss of their largest customer and some smaller customers.

The expense is recorded in the line item of “other

income (expense)” in the “Consolidated Statement of Operations”.

14 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

payable and accrued expenses consisted of the following:

OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

June 30, 2022

2 unchanged sentences

Accrued Liabilities

Accrued Payroll

Accrued Payroll Taxes

5 unchanged sentences

payable and capital leases consisted of the following:

SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES

As of June 30, 2022

D&O Insurance

Paycheck Protection Program Loans

Bank Overdraft Facility

3 unchanged sentences

Loan Payable Bank - Export Refinance II

Loan Payable Bank - Running Finance II

Loan Payable Bank - Export Refinance III

5 unchanged sentences

D&O Insurance

Paycheck Protection Program Loans

Bank Overdraft Facility

3 unchanged sentences

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

1 unchanged sentence

Subsidiary Finance Leases

The Company finances Directors’

and Officers’

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

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

3 unchanged sentences

30, 2022 and 2021

The Company and its subsidiary, NTA, received Paycheck Protection Program loans of $469,721 introduced by the U.S.

Government during

the COVID-19 Pandemic.

The loans carry an interest rate of 1% and have a maturity date of two years from the date of the disbursement

This loan is forgivable if the Company meets the criteria set by the U.S.

During the year ended June 30, 2021,

the Company applied for the loan forgiveness, which was approved by the U.S.

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

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

or approximately $ 365,854 .

The annual interest rate was 5.1% as of June 30, 2021 and 2020.

Total outstanding balance as of June 30, 2021

and 2020 was £nil.

overdraft facility requires that the aggregate amount of invoiced trade debtors (net of provisions for bad and doubtful debts and excluding

The annual interest rate was 5.5 %

as of June 30, 2022 and 2021, respectively.

The total outstanding balance as of June 30, 2022 and 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 June 30,

30, 2022, 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.

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

260,678,180 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

The availed facility amount is Rs.

232,042,664 or $1,380,878, at June 30, 2020, of which $354,337 is shown as current and the remaining

$1,026,541 is shown as long term.

86,887,974 or $ 423,101 , at June 30, 2022, which is shown

The availed facility amount was Rs.

260,678,180 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.

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

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

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

This is a revolving loan that matures every six months.

Total facility amount is Rs.

500,000,000 or $3,162,555 and Rs.

The total facility amount is Rs.

or $ 2,434,749

or $ 3,162,555

at June 30, 2022 and 2021, respectively.

The interest rate for the loan was 3% at June 30, 2021 and 2020.

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

Total facility amount is Rs.

75,000,000 or $474,383 and Rs.

75,000,000 or $446,322, at June 30, 2021 and 2020, respectively.

outstanding at June 30, 2021 and 2020 was Rs.

The interest rate for the loan was 9.5% and 7.2% at June 30, 2021 and 2020, respectively.

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

As of June 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.

The interest rate for the loan was 3 %

at June 30, 2022 and 2021.

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.

or $ 474,383 ,

at June 30, 2022 and 2021, respectively.

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

The interest rate for the loan was 14.0 %

at June 30, 2022 and 2021, respectively.

These facilities require

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

As of June 30, 2022, NetSol PK was in

compliance with this covenant.

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

This is a revolving loan that matures every six months.

Total facility amount is Rs.

380,000,000 or $2,403,542 and Rs.

The total facility amount is Rs.

or $ 1,850,409

or $ 2,403,542 ,

at June 30, 2022 and 2021, respectively.

The interest rate for the loan was 3% at June 30, 2021 and 2020.

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

Total facility amount is Rs.

120,000,000 or $759,013 and Rs.

120,000,000 or $714,116, at June 30, 2021 and 2020, respectively.

rate for the loan was 9.0% and 7.7% at June 30, 2021 and 2020, respectively.

Total outstanding balance at June 30, 2021 and 2020 was

the loan tenure, 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 June 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

The interest rate for the loan was 3 %

at June 30, 2022 and 2021.

During the loan tenure, 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 June 30, 2022, 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

This is a revolving loan that matures every nine months.

Total facility amount is Rs.

900,000,000 or $5,692,600 and Rs.

or $5,355,868, at June 30, 2021 and 2020, respectively.

The total facility amount is Rs.

or $ 4,382,548

or $ 5,692,600 ,

at June 30, 2022 and 2021, respectively.

NetSol PK used Rs.

700,000,000 or $4,427,578 and Rs.

or $ 3,408,648

or $ 4,427,578 ,

at June 30, 2022 and 2021, respectively.

The interest rate for the loan was 3% at June 30, 2021 and 2020.

The interest rate for the loan was 3 %

at June 30, 2022 and 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, 2022, NetSol PK used

127,140,038 or $ 619,108 of which $ 429,882 was shown as long term and $ 189,226 as current.

As of June 30, 2021, NetSol PK used Rs.

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 ranging from

9.0 % to 16.0 % at June 30, 2022 and 2021.

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

into a loan agreement with Investec Bank PLC.

The loan amount was £ 69,549 , or $ 84,816 , for a period of 5 years with monthly payments

of £ 1,349 , or $ 1,645 .

As of June 30, 2022, the subsidiary has used this facility up to $ 31,204 , of which $ 12,865 was shown as long-term

and $ 18,339 as current.

The interest rate was 6.14 % at June 30, 2022.

TECHNOLOGIES, INC.

1 unchanged sentence

30, 2022 and 2021

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

the vehicles’

As of June 30, 2021, NetSol PK used Rs.

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 June 30, 2021.

In March 2020, the Company’s subsidiary, VLS, entered into a loan agreement with Investec Bank PLC.

The loan amount was £69,549,

or $96,596, for a period of 5 years with monthly payments of £1,349, or $1,874.

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 June 30, 2021.

The Company’s subsidiary, VLS, finances Directors’

and Officers’

(“D&O”) liability insurance, and the

$41,774 is recorded in current maturities.

The interest rate on this financing was 4.5% as of June 30, 2021.

The Company leases various fixed assets under capital lease arrangements expiring in various years through 2024.

The assets and liabilities

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

assets are secured by the assets themselves.

Depreciation of assets under capital leases is included in depreciation expense for the

years ended June 30, 2021 and 2020.

The Company’s subsidiary, VLS, finances Directors’

and Officers’ (“D&O”) liability insurance, and the $ 96,781 and $ 41,774 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 June 30, 2022 and was 9.7 %

as of June 30, 2021.

The Company leases various fixed assets under capital lease

arrangements expiring in various years through 2024.

The assets and liabilities under capital 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 capital leases is included in depreciation expense for the years ended June 30, 2022 and 2021.

is the aggregate minimum future lease payments under capital leases as of June 30, 2022:

SCHEDULE OF AGGREGATE MINIMUM FUTURE LEASE PAYMENTS UNDER CAPITAL LEASES

Minimum Lease Payments

7 unchanged sentences

Non-Current portion

is the aggregate future long term debt payments as of June 30, 2021:

is the aggregate future long term debt payments, which consists of “Term Finance Facility (3)”, “Sale and Leasback

Financing (8)” and “Term Finance Facility (9)”, as of June 30, 2022:

SCHEDULE OF AGGREGATE FUTURE LONG TERM DEBT PAYMENTS

Loan Payments

8 unchanged sentences

30, 2022 and 2021

16 – INCOME TAXES

Company is incorporated in the State of Nevada and registered to do business in the State of California.

2 unchanged sentences

pre-tax income (loss) consists of the following:

Years Ended June 30,

SCHEDULE OF CONSOLIDATED PRE-TAX INCOME (LOSS)

US operations

$ ( 1,140,443 )

Foreign operations

Net income before income

components of the provision for income taxes are as follows:

OF COMPONENTS OF PROVISION FOR INCOME TAXES

Years Ended June 30,

3 unchanged sentences

reconciliation of taxes computed at the statutory federal income tax rate to income tax expense (benefit) is as follows:

SCHEDULE OF RECONCILIATION OF TAXES AT STATUTORY FEDERAL INCOME TAX RATE INCOME TAX EXPENSE BENEFITS

Years Ended June 30,

8 unchanged sentences

income tax assets and liabilities as of June 30, 2022 and 2021 consist of tax effects of temporary differences related to the following:

of deferred tax asset

SCHEDULE OF DEFERRED INCOME TAX ASSETS AND LIABILITIES

Net operating loss carry forwards

1 unchanged sentence

Valuation allowance for deferred tax assets

( 7,965,644 )

( 7,563,293 )

Net deferred tax assets

18 unchanged sentences

deferred US income taxes have been provided is $ 28,816,721 as of June 30, 2022.

The additional US income tax on unremitted foreign

earnings, if repatriated, would be offset in part by foreign tax credits.

The extent of this offset would depend on many factors, including

the method of distribution, and specific earnings distributed.

The additional US income tax on unremitted foreign earnings,

if repatriated, would be offset in part by foreign tax credits.

The extent of this offset would depend on many factors, including the

method of distribution, and specific earnings distributed.

The Company determined that it is not practicable to determine unrecognized

8 unchanged sentences

30, 2022 and 2021

17 - STOCKHOLDERS’

the years ended June 30, 2021 and 2020, the Company issued 20,353 and 55,044 shares of common stock, respectively, for services rendered

17 - STOCKHOLDERS’ EQUITY

the years ended June 30, 2022 and 2021, the Company issued nil and 20,353 shares of common stock, respectively, for services rendered

by officers of the Company.

These shares were valued at the fair market value of $118,316 and $312,090, respectively, and recorded as

compensation expense in the accompanying consolidated financial statements.

These shares were valued at the fair market value of $ Nil and $ 118,316 , respectively, and recorded as compensation

expense in the accompanying consolidated financial statements.

the years ended June 30, 2022 and 2021, the Company issued 1,985 and 1,983 shares of common stock respectively, for services rendered

6 unchanged sentences

and recorded as compensation expense in the accompanying consolidated financial statements.

the year ended June 30, 2021, the Company purchased 669,018 shares of its common stock from the open market for cash proceeds of $2,364,781

at an average price of $3.53 per share pursuant to the Company’s stock buy-back plan.

the year ended June 30, 2022, the Company issued 5,000 shares of common stock for services received from one of its vendors.

were valued at the fair market value of $ 19,525 , respectively.

the years ended June 30, 2022 and 2021, the Company purchased 22,510 and 669,018 shares of its common stock from the open market for

cash proceeds of $ 100,106 and $ 2,364,781 at an average price of $ 4.45 and $ 3.53 per share, respectively, pursuant to the Company’s

stock buy-back plan.

18 - INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN

Company maintains several Incentive and Non-Statutory Stock Option Plans (“Plans”) for its employees and consultants.

granted under these Plans to an employee of the Company become exercisable over a period of no longer than ten ( 10 ) years and no less

27 unchanged sentences

granted under the Plans are not generally transferable and must be exercised within 10 years, subject to earlier termination upon termination

of the option holder’s employment, but in no event later than the expiration of the option’s term.

The exercise price of

each option may not be less than the fair market value of a share of the Company’s common stock on the date of grant (except in

connection with the assumption or substitution for another option in a manner qualifying under Section 424(a) of the Internal Revenue

3 unchanged sentences

30, 2022 and 2021

stock options granted to any participant who owns 10% or more of the Company’s outstanding common stock (a “Ten Percent Shareholder”)

stock options granted to any participant who owns 10 % or more of the Company’s outstanding common stock (a “Ten Percent Shareholder”)

must have an exercise price equal to or exceeding 110 % of the fair market value of a share of our common stock on the date of the grant

5 unchanged sentences

not exceeding five years.

the Plans, a participant may also be awarded a “performance award,”

which means that the participant may receive cash, stock

the Plans, a participant may also be awarded a “performance award,” which means that the participant may receive cash, stock

or other awards contingent upon achieving performance goals established by the Board of Directors.

The Board of Directors may also make

“deferred share”

awards, which entitle the participant to receive the Company’s stock in the future for services performed

“deferred share” awards, which entitle the participant to receive the Company’s stock in the future for services performed

between the date of the award and the date the participant may receive the stock.

1 unchanged sentence

performance criteria and/or continued service with the Company.

A participant who is granted a “stock appreciation right”

under the Plan has the right to receive all or a percentage of the fair market value of a share of stock on the date of exercise of the

1 unchanged sentence

less than the fair market value of the stock on the date of grant).

Finally, the Board of Directors may make “restricted stock”

awards under the Plans, which are subject to such terms and conditions as the Board of Directors determines and as are set forth in the

award agreement related to the restricted stock.

As of June 30, 2021, the remaining shares to be granted are 20,386 under the

2005 Plan, 98,196 under the 2013 Plan and 306,422 under the 2015 Plan.

As of June 30, 2021, the remaining shares to be granted are 17,386 under the 2005 Plan,

98,196 under the 2013 Plan and 306,422 under the 2015 Plan.

following table summarizes stock grants awarded as compensation:

SUMMARY OF UNVESTED STOCK GRANTS AWARDED AS COMPENSATION

Number of shares

Weighted Average Grant Date Fair Value ($)

5 unchanged sentences

the years ended June 30, 2022 and 2021, the Company recorded compensation expense of $ 44,053 and $ 341,773 , respectively.

The compensation

expense related to the unvested stock grants as of June 30, 2021 was $31,455 which will be recognized during the fiscal year 2022.

19 – COMMITMENTS AND CONTINGENCIES

33 unchanged sentences

following table presents a summary of identifiable assets as of June 30, 2022 and 2021:

OF IDENTIFIABLE ASSETS

June 30, 2022

4 unchanged sentences

Asia - Pacific

Identifiable assets

following table presents a summary of investments under the equity method as of June 30, 2022 and 2021:

OF INVESTMENT UNDER EQUITY METHOD

June 30, 2022

3 unchanged sentences

Asia - Pacific

Equity method investment

TECHNOLOGIES, INC.

2 unchanged sentences

following table presents a summary of operating information for the years ended June 30:

OF OPERATING INFORMATION

For the Years

9 unchanged sentences

Corporate headquarters

$ ( 1,027,044 )

North America

( 1,407,252 )

Asia - Pacific

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

Depreciation and amortization:

1 unchanged sentence

Asia - Pacific

Depreciation and amortization

Interest expense:

1 unchanged sentence

Asia - Pacific

Interest expense

Income tax expense:

2 unchanged sentences

Asia - Pacific

Income tax expense

TECHNOLOGIES, INC.

2 unchanged sentences

following table presents a summary of capital expenditures for the years ended June 30:

SUMMARY OF CAPITAL EXPENDITURES

For the Years

3 unchanged sentences

Asia - Pacific

Capital expenditures

in the table below is geographic information for each country that comprised greater than five percent of total revenues for the years

ended June 30, 2022 and 2021.

SCHEDULE OF GEOGRAPHIC INFORMATION

June 30, 2022

5 unchanged sentences

Other Countries

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2021 and 2020

in the table below is the geographic information of total revenues by country for the years ended June 30, 2022 and 2021.

OF RECONCILIATION OF REVENUE

& New Zealand

North America:

Asia-Pacific:

& New Zealand

Revenues 2021

Pakistan & India

Australia & New Zealand

Other Countries

North America:

Asia-Pacific:

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2022 and 2021

22 – NON-CONTROLLING INTEREST IN SUBSIDIARY

1 unchanged sentence

The balance of non-controlling interest was as follows:

SCHEDULE OF BALANCE OF NON-CONTROLLING INTEREST

Non-Controlling Interest %

Non-Controlling

Non-Controlling Interest at

June 30, 2022

4 unchanged sentences

NetSol-Innovation

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2021 and 2020

the year ended June 30, 2020, employees of NetSol PK exercised and 114,000 options of common stock and NetSol PK received cash of $11,261,

respectively.

Due to the exercise of options, the non-controlling interest increased from 33.80% at June 30, 2019 to 33.88% at June 30,

the year ended June 30, 2020, NetSol PK paid a cash dividend of $1,610,909.

the year ended June 30, 2020, the Company’s subsidiary NetSol PK purchased NetSol Innovation, from 1insurer for $89,425.

this purchase, the non-controlling interest decreased from 49.90% at June 30, 2019 to 33.88% at June 30, 2020.

the year ended June 30, 2020, NetSol Innovation paid a cash dividend of $2,778,453.

SUBSEQUENT EVENTS

to year end, the Company purchased 22,510 shares of the Company’s common stock for $100,106 pursuant to the stock repurchase plan.

the year ended June 30, 2022, NetSol PK purchased 2,000,000 shares of common stock from open market for $ 950,352 .

Due to this purchase,

the non-controlling interest decreased from 33.88 % at June 30, 2021 to 32.38 % at June 30, 2022.

The following schedule discloses the

effect to the Company’s equity due to the changes in the Company’s ownership interest in NetSol PK.

OF CHANGE IN OWNERSHIP INTEREST

For the Years

Ended June 30,

Net income (loss) attributable to NetSol

$ ( 851,156 )

Transfer (to) from non-controlling interest

Increase in paid-in

capital for purchase of 2,000,000 treasury shares of NetSol Pk’s common stock

Net transfer (to) from non-controlling interest

Change from net income (loss) attributable to NetSol and transfer (to) from non-controlling interest

$ ( 814,753 )

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

What changed 10-K

Item 9A. Controls and Procedures