What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-10 compared with 2022-05-12 · 252 added, 437 removed, 870 unchanged (44% of the section changed)

3 unchanged sentences

Condensed Consolidated Balance Sheets

and cash equivalents

receivable, net of allowance of $ 208,547 and $ 166,231

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

in excess of billings, net of allowance of $ 84,209 and $ 136,976

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

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

September 30, 2022

June 30, 2022

Current assets:

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 of assets - operating leases

term investment

AND STOCKHOLDERS’ EQUITY

payable and accrued expenses

portion of loans and obligations under finance leases

portion of operating lease obligations

Cash and cash equivalents

Accounts receivable, net of allowance of $ 153,580 and $ 166,231

Revenues in excess of billings, net of allowance of $ 77,525 and $ 136,976

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

Total current assets

Revenues in excess of billings, net - long term

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

Property and equipment, net

Right of use of assets - operating leases

Long term investment

Intangible assets, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

and obligations under finance leases;

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;

less current maturities

lease obligations;

Operating lease obligations;

less current maturities

and contingencies

Stockholders’

stock, $ .01 par value;

Total liabilities

Commitments and contingencies

Stockholders’ equity:

Preferred stock, $ .01 par value;

500,000 shares authorized;

stock, $ .01 par value;

Common stock, $ .01 par value;

14,500,000 shares authorized;

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

of March 31, 2022 and 12,181,585 shares issued and 11,265,064 outstanding as of June 30, 2021

paid-in-capital

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

12,209,230 shares issued and 11,270,199 outstanding as of September 30, 2022 and 12,196,570 shares issued and 11,257,539 outstanding as of June 30, 2022

Additional paid-in-capital

Treasury stock (at cost, 939,031 shares as of September 30, 2022 and June 30, 2022)

( 3,920,856 )

Accumulated deficit

( 40,273,167 )

( 39,652,438 )

comprehensive loss

Other comprehensive loss

( 42,281,135 )

( 39,363,085 )

NetSol stockholders’ equity

Non-controlling

stockholders’ equity

liabilities and stockholders’ equity

Total NetSol stockholders’ equity

Non-controlling interest

Total stockholders’ equity

Total liabilities and stockholders’ equity

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

3 unchanged sentences

For the Three Months

For the Nine Months

Ended March 31,

Ended September 30,

Net Revenues:

11 unchanged sentences

Total operating expenses

Income (loss) from operations

Loss from operations

( 1,896,191 )

Other income and (expenses)

2 unchanged sentences

Interest income

Gain (loss) on foreign currency exchange transactions

( 1,825,349 )

( 1,515,327 )

Gain on foreign currency exchange transactions

Share of net loss from equity investment

Other income (expense)

Total other income (expenses)

( 1,304,233 )

Net income (loss) before income taxes

2 unchanged sentences

Non-controlling interest

( 1,655,287 )

Net income (loss) attributable to NetSol

$ ( 620,729 )

$ ( 623,231 )

$ ( 147,781 )

Net income (loss) per share:

2 unchanged sentences

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

NETSOL TECHNOLOGIES,

TECHNOLOGIES, INC.

AND SUBSIDIARIES

1 unchanged sentence

For the Three Months

For the Nine Months

Ended March 31,

Ended September 30,

Net income (loss)

$ ( 620,729 )

$ ( 623,231 )

$ ( 147,781 )

Other comprehensive income (loss):

3 unchanged sentences

Translation adjustment attributable to non-controlling interest

( 1,211,174 )

Net translation adjustment

8 unchanged sentences

Condensed Consolidated Statement of Stockholders’ Equity

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

Comprehensive

Stockholders’

Balance at December 31, 2021

statement of the changes in equity for the three months ended September 30, 2022 is provided below:

Additional Paid-in

Other Compre- hensive

Non Controlling

Total Stockholders’

Balance at June 30, 2022

$ 128,218,247

3 unchanged sentences

Common stock issued for:

Adjustment in APIC for change in subsidiary shares to non-controlling interest

Fair value of subsidiary options issued

2 unchanged sentences

( 1,233,469 )

Net income (loss)

Balance at March 31, 2022

( 4,151,519 )

$ ( 3,920,856 )

$ ( 37,484,998 )

$ ( 36,740,406 )

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

Comprehensive

Stockholders’

Net income (loss) for the year

Balance at September

3 unchanged sentences

$ ( 42,281,135 )

Common stock issued for:

Fair value of subsidiary options issued

Foreign currency translation adjustment

( 1,466,995 )

Balance at December 31, 2021

$ 129,042,021

$ ( 3,920,856 )

$ ( 37,206,528 )

$ ( 34,935,629 )

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

TECHNOLOGIES, INC.

AND SUBSIDIARIES

Condensed Consolidated Statement of Stockholders’ Equity

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

Comprehensive

Stockholders’

Additional Paid-in

Other Compre- hensive

Non Controlling

Total Stockholders’

Balance at June 30, 2021

3 unchanged sentences

$ ( 31,868,481 )

Subsidiary common stock issued for:

Common stock issued for:

Purchase of treasury shares

Foreign currency translation adjustment

( 2,145,405 )

( 1,138,991 )

( 3,284,396 )

Balance at September 30, 2021

$ 129,030,982

$ ( 3,920,856 )

$ ( 38,613,313 )

$ ( 34,013,886 )

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

Comprehensive

Stockholders’

Balance at December 31, 2020

$ 128,823,181

$ ( 2,848,640 )

$ ( 40,104,089 )

$ ( 32,060,151 )

Common stock issued for:

Purchase of treasury shares

Foreign currency translation adjustment

Balance at March 31, 2021

$ 128,881,744

$ ( 3,520,769 )

$ ( 40,727,320 )

$ ( 31,118,798 )

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

TECHNOLOGIES, INC.

AND SUBSIDIARIES

Condensed Consolidated Statement of Stockholders’ Equity

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

Comprehensive

Stockholders’

Balance at September 30, 2020

Beginning balance

$ 129,018,826

2 unchanged sentences

$ ( 31,868,481 )

Subsidiary common stock issued for:

Common stock issued for:

1 unchanged sentence

Foreign currency translation adjustment

Net income (loss)

Balance at December 31, 2020

( 2,145,405 )

1 unchanged sentence

( 3,284,396 )

$ ( 32,060,151 )

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

Comprehensive

Stockholders’

Balance at June 30, 2020

$ 128,677,754

$ ( 1,455,969 )

$ ( 34,269,817 )

$ ( 34,085,047 )

$ 128,677,754

$ ( 1,455,969 )

$ ( 34,269,817 )

$ ( 34,085,047 )

Cumulative effect adjustment (1)

( 6,309,722 )

( 6,784,300 )

Subsidiary common stock issued for:

Common stock issued for:

Purchase of treasury shares

Foreign currency translation adjustment

Net income (loss) for the year

Balance at September 30, 2021

3 unchanged sentences

$ ( 34,013,886 )

Ending balance

$ 129,030,982

2 unchanged sentences

$ ( 34,013,886 )

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

2016-13, Financial Instruments – Credit Losses

Measurement of Credit Losses on Financial Instruments.

Refer to Note 2 – Accounting Policies for more information.

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

1 unchanged sentence

AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the Nine Months

Ended March 31,

Condensed Consolidated Statements of Cash Flows

For the Three Months

Ended September 30,

Cash flows from operating activities:

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

Net income (loss)

$ ( 437,971 )

Adjustments to reconcile net income (loss) to net cash provided by (used in)

operating activities:

Depreciation and amortization

1 unchanged sentence

Share of net loss from investment under equity method

Loss on sale of assets

(Gain) loss on sale of assets

Stock based compensation

Changes in operating assets

and liabilities:

Changes in operating assets and liabilities:

Accounts receivable

1 unchanged sentence

Revenues in excess of billing

( 1,952,228 )

Other current assets

1 unchanged sentence

Unearned revenue

Net cash provided by operating

( 1,086,151 )

Net cash provided by (used in) operating activities

( 3,391,653 )

Cash flows from investing activities:

1 unchanged sentence

( 1,347,601 )

( 2,109,058 )

Sales of property and equipment

Investment in associates

Net cash used in investing

( 1,359,605 )

( 2,133,265 )

Net cash used in investing activities

Cash flows from financing activities:

Purchase of treasury stock

( 2,064,800 )

Proceeds from bank loans

Payments on finance lease obligations and loans - net

( 1,045,464 )

Net cash used in financing

Net cash used in financing activities

Effect of exchange rate changes

( 2,999,975 )

Net increase (decrease) in cash and cash equivalents

( 2,653,648 )

Net decrease in cash and cash equivalents

( 3,040,849 )

( 6,705,278 )

Cash and cash equivalents at beginning of the period

3 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

For the Nine Months

Ended March 31,

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

For the Three Months

Ended September 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

Shares issued to vendor for services received

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

42 unchanged sentences

(Thailand) Limited (“OTOZ Thai”)

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

2 – ACCOUNTING POLICIES

9 unchanged sentences

could differ from those estimates.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

Concentration

7 unchanged sentences

Balances at financial institutions within certain foreign countries are not covered by insurance except balances

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

maintained in China are insured for RMB 500,000 ($ 70,323 ) in each bank and in the UK for GBP 85,000 ($ 94,444 ) in each bank.

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

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

deposits related to cash deposits in accounts maintained within foreign entities of approximately $ 29,315,355 and $ 31,662,035 , respectively.

As of September 30, 2022, and June 30, 2022, the Company had

uninsured deposits related to cash deposits in accounts maintained within foreign entities of approximately $ 18,393,548 and $ 22,758,963 ,

respectively.

The Company has not experienced any losses in such accounts.

23 unchanged sentences

and are less observable and thus have the lowest priority.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

Company’s financial assets that were measured at fair value on a recurring basis as of September 30, 2022, were as follows:

SCHEDULE OF FAIR VALUE OF FINANCIAL ASSETS MEASURED ON RECURRING BASIS

1 unchanged sentence

Company’s financial assets that were measured at fair value on a recurring basis as of June 30, 2022, were as follows:

Revenues in excess of billing - long term

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

Revenues in excess of billings - long term

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

reconciliation from June 30, 2022 to September 30, 2022 is as follows:

SCHEDULE OF FAIR VALUE OF FINANCIAL INSTRUMENTS RECONCILIATION

3 unchanged sentences

Amortization during the period

Transfers to short term

Effect of Translation Adjustment

Balance at March 31, 2022

Balance at September 30, 2022

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

7 unchanged sentences

Accounting Standards:

Standards Recently Issued but Not Yet Adopted by the Company:

August 2020, the FASB issued ASU No.

14 unchanged sentences

This ASU is effective for fiscal years (and interim periods

within those fiscal years) beginning after December 15, 2021, which for the Company is the first quarter of fiscal 2023, with early adoption

permitted beginning in the first quarter of fiscal 2022.

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

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

Facilitation of Effects of Reference Rate Reform on Financial

Reporting , which provides practical expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions

affected by reference rate reform if certain criteria are met.

The elective amendments provide expedients to contract modification, affected

by reference rate reform if certain criteria are met.

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.

This guidance is not applicable to contract modifications made

and hedging relationships entered into or evaluated after December 31, 2022.

The guidance can be applied immediately through December

The Company will adopt this standard when LIBOR is discontinued and does not expect a material impact to its financial condition,

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

within those fiscal years) beginning after December 15, 2021, which for the Company is the first quarter of fiscal 2023.

2020-06 did not have a material impact on the Company’s financial condition, results of operations or disclosures.

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

23 unchanged sentences

core revenue and non-core revenue.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

Company generates its core revenue from the following sources:

11 unchanged sentences

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

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

55 unchanged sentences

For the Three Months

For the Nine Months

Ended March 31,

Ended September 30,

Subscription and support

Services - related party

Total core revenue, net

23 unchanged sentences

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

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

3 unchanged sentences

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

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

18 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

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

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

right to consideration.

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

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

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

2 unchanged sentences

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

OF REVENUES IN EXCESS OF BILLINGS AND DEFERRED REVENUE

March 31, 2022

SCHEDULE OF REVENUES IN EXCESS OF BILLINGS AND DEFERRED REVENUE

September 30, 2022

June 30, 2022

1 unchanged sentence

Unearned revenue

the nine months ended March 31, 2022, the Company recognized revenue of $ 3,282,962 that was included in the deferred revenue balance

the three months ended September 30, 2022, the Company recognized revenue of $ 2,108,715 that was included in the unearned revenue balance

at the beginning of the period.

All other activity in deferred revenue is due to the timing of invoicing in relation to the timing of

All other activity in unearned revenue is due to the timing of invoicing in relation to the timing of

revenue recognition.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

allocated to remaining performance obligations represents the transaction price allocated to the performance obligations that are unsatisfied,

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

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

Contracted but unsatisfied performance obligations were approximately $ 38,252,000 as of September 30, 2022, of which the Company estimates

to recognize approximately $ 15,400,000 in revenue over the next 12 months and the remainder over an estimated 5 years thereafter.

12 unchanged sentences

are included in accounts receivable and unearned revenue.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

Expedients and Exemptions

1 unchanged sentence

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

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

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

These costs are recorded within sales and marketing expense in the

Consolidated Statement of Operations.

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

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

9 unchanged sentences

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

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

4 – EARNINGS PER SHARE

2 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:

SCHEDULE OF COMPONENTS OF BASIC AND DILUTED EARNINGS PER SHARE

For the three months ended

March 31, 2022

For the nine months ended

March 31, 2022

Basic income (loss) per share:

Net income (loss) available to common shareholders

$ ( 278,470 )

Effect of dilutive securities

Diluted income (loss) per share

$ ( 278,470 )

For the three months ended

March 31, 2021

For the nine months ended

March 31, 2021

Basic loss per share:

Net loss available to common shareholders

$ ( 623,231 )

$ ( 147,781 )

Effect of dilutive securities

Diluted loss per share

$ ( 623,231 )

$ ( 147,781 )

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

their inclusion would have been anti-dilutive.

the three and nine months ended March 31, 2021, 30,699 share grants were excluded from the shares used to calculate diluted earnings

per share as their inclusion would have been anti-dilutive.

During the three months ended September 30, 2022 and 2021, there

were no outstanding dilutive instruments.

5 – OTHER COMPREHENSIVE INCOME AND FOREIGN CURRENCY

11 unchanged sentences

Accumulated translation losses classified as an item of accumulated other comprehensive

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

loss in the stockholders’ equity section of the consolidated balance sheet were $ 42,281,135 and $ 39,363,085 as of September 30,

2022 and June 30, 2022, respectively.

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

During the three months ended September 30, 2022 and 2021, comprehensive income (loss) in the consolidated

statements of comprehensive income (loss) included a translation loss attributable to NetSol of $ 2,918,050 and $ 2,145,405 , respectively.

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

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

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

6 – MAJOR CUSTOMERS

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

the three months ended September 30, 2022, revenues from Daimler Financial Services (“DFS”) and BMW Financial (“BMW”)

were $ 3,591,807 and $ 1,469,147 , respectively representing 28.3 % and 11.6 % , respectively of revenues.

During the nine months ended March

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

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

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

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

During the three months ended September

30, 2021, revenues from DFS and BMW were $ 3,542,284 and $ 891,679 , respectively representing 26.4 % and 6.6 % , respectively of revenues.

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

receivable from DFS and BMW at September 30, 2022, were $ 600,925 and $ 132,392 , respectively.

Accounts receivable at June 30, 2022, were

$ 2,005,463 and $ 2,498,645 , respectively.

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

respectively.

Revenues in excess of billings at September 30, 2022 were $ 1,804,728 and $ 2,533,172 for DFS

and BMW, respectively.

Revenues in excess of billings at June 30, 2022, were $ 365,863 and $ 2,199,381 for DFS and BMW, respectively.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

7 – CONVERTIBLE NOTES RECEIVABLE – RELATED PARTY

17 unchanged sentences

( 4,250,000 )

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

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

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

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

8 - OTHER CURRENT ASSETS

1 unchanged sentence

SCHEDULE OF OTHER CURRENT ASSETS

March 31, 2022

September 30, 2022

June 30, 2022

8 unchanged sentences

( 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,

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

leaving a net balance of $ 0 .

2 unchanged sentences

SCHEDULE OF REVENUE IN EXCESS OF BILLING

March 31, 2022

September 30, 2022

June 30, 2022

3 unchanged sentences

after one year.

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

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

income for that period.

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

During the three months ended September 30, 2022 and 2021, the Company accreted $ 9,369 and $ 9,502 , respectively, which

was recorded in interest income for that period.

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

TECHNOLOGIES, INC.

3 unchanged sentences

SCHEDULE OF PROPERTY AND EQUIPMENT

March 31, 2022

September 30, 2022

June 30, 2022

6 unchanged sentences

Property and Equipment, Net

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

the three months ended September 30, 2022 and 2021, depreciation expense totaled $ 522,183 and $ 539,722 , respectively.

Of these amounts,

$ 331,229 and $ 325,451 , respectively, are reflected in cost of revenues.

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

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

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

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

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

SUMMARY OF FIXED ASSETS HELD UNDER CAPITAL LEASES

March 31, 2022

September 30, 2022

June 30, 2022

Computers and Other Equipment

Furniture and Fixtures

Accumulated Depreciation - Net

3 unchanged sentences

SCHEDULE OF FINANCE LEASE TERM

March 31, 2022

September 30, 2022

June 30, 2022

1 unchanged sentence

Weighted average discount rate - Finance leases

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

17 unchanged sentences

term to obtain an asset of similar value.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

14 unchanged sentences

SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO LEASE

March 31, 2022

September 30, 2022

June 30, 2022

3 unchanged sentences

Total Lease Liabilities

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

components of lease cost were as follows:

1 unchanged sentence

For the Three Months

For the Nine Months

Ended March 31,

Ended September 30,

Amortization of finance lease assets

6 unchanged sentences

SCHEDULE OF LEASE TERM AND DISCOUNT RATE

March 31, 2022

September 30, 2022

June 30, 2022

3 unchanged sentences

SCHEDULE OF SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION RELATED TO LEASES

For the Nine Months

Ended March 31

For the Three Months

Ended September 30

Operating cash flows related to operating leases

Operating cash flows related to finance leases

Financing cash flows related to finance leases

Financing cash flows related finance leases

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

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

SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES

13 unchanged sentences

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

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

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

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

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

For the three months ended September 30, 2022 and 2021, the

Company received lease income of $ 7,812 and $ 9,155 , respectively.

12 – LONG TERM INVESTMENT

Drivemate – Related Party

Company and Drivemate Co., Ltd.

7 unchanged sentences

final payment date.

As of March 31, 2022, the Company has been issued 8,178 shares equal to 30% of Drivemate.

As of September 30, 2022, the Company has been issued 8,178 shares equal to 30% of Drivemate.

Per the Drivemate Agreement,

4 unchanged sentences

investment using the equity method of accounting.

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

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

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

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

months ended March 31, 2021, respectively.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

the equity method of accounting, the Company recorded its share of net loss of $ nil and $ 63,571 for the three months ended September

30, 2022 and 2021, respectively.

WRLD3D-Related

4 unchanged sentences

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

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

Accounts receivable and

revenue in excess of billing were $ 1,373,099 and $ 8,163 at March 31, 2022, respectively.

The Company has established an allowance for

the full amounts of these accounts.

the equity method of accounting, the Company recorded its share of net loss of $ 81,510 and $ 263,388 for the three and nine months ended

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

2021, respectively.

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

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

30, 2022 and 2021, respectively.

following table reflects the above investments at September 30, 2022.

SCHEDULE OF LONG TERM INVESTMENT

5 unchanged sentences

Net investment

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

following table reflects the above investments at June 30, 2022.

Gross investment

Cumulative net loss on investment

( 3,238,647 )

( 3,979,279 )

Cumulative other comprehensive income (loss)

Net investment

13 - INTANGIBLE ASSETS

1 unchanged sentence

SCHEDULE OF INTANGIBLE ASSETS

March 31, 2022

September 30, 2022

June 30, 2022

6 unchanged sentences

( 25,743,121 )

Product Licenses

licenses include internally developed original license issues, renewals, enhancements, copyrights, trademarks, and trade names.

licenses are amortized on a straight-line basis over their respective lives, and the unamortized amount of $ 1,110,617 will be amortized

over the next 1.5 years.

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

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

Future Amortization

amortization expense of intangible assets is as follows:

SUMMARY OF ESTIMATED AMORTIZATION EXPENSE OF INTANGIBLE ASSETS

Period ended:

March 31, 2023

March 31, 2024

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

over one year.

Amortization expense for the three months ended September 30, 2022 and 2021 was $ 322,820 and $ 440,284 , respectively.

14 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

payable and accrued expenses consisted of the following:

OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

March 31, 2022

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

September 30, 2022

June 30, 2022

5 unchanged sentences

Other Payable

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

payable and finance leases consisted of the following:

SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES

As of March 31, 2022

As of September 30, 2022

D&O Insurance

4 unchanged sentences

Loan Payable Bank - Export Refinance II

Loan Payable Bank - Running Finance II

Loan Payable Bank - Export Refinance III

10 unchanged sentences

Loan Payable Bank - Export Refinance II

Loan Payable Bank - Running Finance II

Loan Payable Bank - Export Refinance III

6 unchanged sentences

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

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

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

(2) The Company’s

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

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

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

The annual interest rate was 5.5 % as of September 30, 2022.

The total outstanding balance as of September 30, 2022 and June

30, 2022 was £ Ni l .

This overdraft facility

1 unchanged sentence

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

As of March 31, 2022, NTE

was in compliance with this covenant.

As of September 30, 2022,

NTE was in compliance with this covenant.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

(3) The Company’s

4 unchanged sentences

43,422,699 or

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

The availed facility amount was Rs.

$ 190,425 , at September 30, 2022, which is shown as current.

The availed facility amount is Rs.

86,887,974 or $ 423,101 , at June 30, 2022,

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 March

31, 2022 and June 30, 2021.

which is shown as current.

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

(4) The Company’s

3 unchanged sentences

The total facility amount is Rs.

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

500,000,000 or $ 2,192,694 at September 30, 2022 and Rs.

or $ 2,434,749 at June 30, 2022.

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

The interest rate for the loan was 10 % and 3 % at September 30, 2022 and June 30, 2022, respectively.

(5) The Company’s

2 unchanged sentences

amount is Rs.

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

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

interest rate for the loan was 14.0 % and 9.5 % at March 31, 2022 and June 30, 2021, respectively.

53,000,000 or $ 235,057 , at September 30, 2022.

The balance outstanding at September 30, 2022 and June 30, 2022 was Rs.

The interest rate for the loan was 17.8 % and 14.0 % at September 30, 2022 and June 30, 2022, respectively.

This facility requires

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

As of March 31, 2022, NetSol PK was in

compliance with this covenant.

As of September 30, 2022, NetSol PK was

in compliance with this covenant.

(6) The Company’s

5 unchanged sentences

380,000,000 or $ 1,850,409 at

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

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

(7) The Company’s

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

The total facility

amount is Rs.

120,000,000 or $ 654,915 and Rs.

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

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

The balance outstanding at March 31, 2022 and

June 30, 2021 was Rs.

September 30, 2022 and June 30, 2022, respectively.

The interest rate for the loan was 10 % and 3 % at September 30, 2022 and June 30,

2022, respectively.

During the tenure of the

1 unchanged sentence

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

As of March 31, 2022, NetSol PK was in

compliance with these covenants.

As of September 30, 2022, NetSol PK was

in compliance with these covenants.

(7) The Company’s

4 unchanged sentences

900,000,000 or $ 4,382,548 ,

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

at September 30, 2022 and June 30, 2022, respectively.

NetSol PK used Rs.

700,000,000 or $ 3,069,772 and Rs.

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

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

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

700,000,000 or $ 3,408,648 ,

at September 30, 2022 and June 30, 2022, respectively.

The interest rate for the loan was 10 % and 3 % at September 30, 2022 and June 30,

2022, respectively.

(8) The Company’s

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

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

As of September 30, 2022, NetSol PK used Rs.

92,846,015 or $ 407,166 of which $ 262,794 was shown as long term and $ 144,372 as current.

1 unchanged sentence

127,140,038 or $ 619,108 of which $ 429,882 was shown as long term and $ 189,226 as current.

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

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

interest rate for the loan was 9.0 % to 16.0 % at September 30, 2022, and June 30, 2022.

(9) In March 2019,

2 unchanged sentences

years with monthly payments of £ 1,349 , or $ 1,499 .

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

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

As of September 30, 2022, the subsidiary has used this facility up to $ 24,348 ,

of which $ 7,382 was shown as long-term and $ 16,966 as current.

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 March 31, 2022 and June 30, 2021.

The interest rate was 6.14 % at September 30, 2022 and June 30, 2022.

(10) The Company’s

subsidiary, VLS, finances Directors’ and Officers’ (“D&O”) liability insurance, and the $ 79,234 and $ 96,781

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

The interest rate on this financing ranged from

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

was recorded in current maturities, at September 30, 2022 and June 30, 2022, respectively.

The interest rate on this financing ranged

from 9.7 % to 12.7 % as of September 30, 2022 and June 30, 2022.

(11) The Company leases

4 unchanged sentences

by the assets themselves.

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

ended March 31, 2022 and 2021.

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

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

September 30, 2022 and 2021.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

is the aggregate minimum future lease payments under finance leases as of September 30, 2022:

SCHEDULE OF AGGREGATE MINIMUM FUTURE LEASE PAYMENTS UNDER CAPITAL LEASES

7 unchanged sentences

Current portion

Current portion of loans and obligations under finance leases

Non-Current portion

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

Loans and obligations under finance leases;

less current maturities

is the aggregate future long term debt payments as of September 30, 2022

SCHEDULE OF AGGREGATE FUTURE LONG TERM DEBT PAYMENTS

6 unchanged sentences

Non-Current portion

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

16 - STOCKHOLDERS’ EQUITY

the three and nine months ended March 31, 2022, the Company issued nil and 1,985 shares of common stock for services rendered by the

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

These shares were valued at the fair market value

of $ 12,009 .

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

of their employment agreements valued at $ 12,600 .

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

shares of common stock for services received

from one of its vendors.

the three months ended September 30, 2022, the Company issued 12,660 shares of common stock for services rendered by the independent

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

These shares were valued at the fair market value of $ 39,750 .

and $ 19,525 ,

respectively.

the three and nine months ended March 31, 2022, the Company purchased nil and 22,510 shares of its own stock for $ 100,106 pursuant to

the Company’s stock repurchase plan.

17 – SHARE BASED PAYMENTS

following table summarizes stock grants awarded as compensation:

SUMMARY OF UNVESTED STOCK GRANTS AWARDED AS COMPENSATION

Weighted Average Grant Date Fair Value ($)

Unvested, June 30, 2021

Forfeited / Cancelled

Unvested, March 31, 2022

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

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

The compensation

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

17 – CONTINGENCIES

10 unchanged sentences

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

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

18 – OPERATING SEGMENTS

10 unchanged sentences

consolidation.

following table presents a summary of identifiable assets as of March 31, 2022 and June 30, 2021:

OF IDENTIFIABLE ASSETS

March 31, 2022

following table presents a summary of identifiable assets as of September 30, 2022 and June 30, 2022:

SUMMARY OF IDENTIFIABLE ASSETS

September 30, 2022

June 30, 2022

3 unchanged sentences

Asia - Pacific

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

OF INVESTMENT UNDER EQUITY METHOD

March 31, 2022

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

SUMMARY OF INVESTMENT UNDER EQUITY METHOD

September 30, 2022

June 30, 2022

2 unchanged sentences

Asia - Pacific

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

OF OPERATING INFORMATION

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

SUMMARY OF OPERATING INFORMATION

For the Three Months

For the Nine Months

Ended March 31,

Ended September 30,

Revenues from unaffiliated customers:

7 unchanged sentences

Corporate headquarters

$ ( 394,375 )

$ ( 804,636 )

$ ( 127,742 )

North America

15 unchanged sentences

to Condensed Consolidated Financial Statements

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

OF CAPITAL EXPENDITURES

For the Nine Months

Ended March 31,

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

SUMMARY OF CAPITAL EXPENDITURES

For the Three Months

Ended September 30,

Capital expenditures:

7 unchanged sentences

Non-Controlling Interest at

March 31, 2022

September 30, 2022

NetSol-Innovation

5 unchanged sentences

increase of non-controlling interest from 5.59 % to 10.94 % .

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

The effective shareholding of the non-controlling interest for OTOZ Thai increased

following schedule discloses the effect to the Company’s equity due to the changes in the Company’s ownership interest in

OTOZ and OTOZ Thai.

SCHEDULE OF CHANGE IN OWNERSHIP INTEREST

For the Three Months

Ended September 30,

Net income (loss) attributable to NetSol

$ ( 620,729 )

Transfer (to) from non-controlling interest

Increase in paid-in capital for issuance of 191,011 shares of OTOZ Inc.

Net transfer (to) from non-controlling interest

Change from net income (loss) attributable to NetSol and transfer (to) from non-controlling interest

$ ( 500,164 )

20 – INCOME TAXES

12 unchanged sentences

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

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

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

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

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

the three months ended September 30, 2022 and 2021, the Company recorded an income tax provision of $ 193,348 and $ 167,627 , respectively.

The tax is derived from non-core business activities generated from Netsol PK.

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

What changed 10-Q

Item 1. Financial Statements