What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-09-22 compared with 2022-09-27 · 813 added, 852 removed, 1901 unchanged (47% of the section changed)

48 unchanged sentences

Kausar Kazmi and Mr.

Michael Francis.

Henry Tolentino

Audit Committee is made up of Mr.

Kazmi, as Chairman, with Mr.

did not stand for re-election due to personal reasons and Mr.

Michael Francis was nominated and elected to the Board.

the fiscal year 2023, the Audit Committee, the Compensation Committee and the Nominating and Corporate Government Committee were structured

The Audit Committee consisted of Mr.

Kazmi, as Chair, with Mr.

Caton and Mr.

Tolentino as members.

The Compensation Committee consists

Caton, as Chairman, with Mr.

The Compensation Committee

consisted of Mr.

Caton, as Chair, with Mr.

Kazmi and Mr.

Tolentino as its members.

The Nominating and Corporate Governance Committee consists

Tolentino, as Chairman, with Mr.

The Nominating and Corporate Governance Committee

consisted of Mr.

Tolentino, as Chair, with Mr.

Caton and Mr.

Kazmi as its members.

In September 2023, Mr.

Michael Francis was appointed

as the Chair of the Nominating and Corporate Governance Committee and was appointed as a member of the Audit Committee and the Compensation

table below provides the membership for each of the committees during Fiscal Year 2023.

Tolentino * (I)

Francis ** (I) (N)

Tolentino’s term ended June 2023.

Francis was elected to the Board in June 2023, but did not join as a committee member until September 2023.

Denotes an Independent Director.

Denotes the Chairperson of the Committee.

Francis became the Nominating Committee Chairman in September 2023.

AND EXECUTIVE OFFICERS

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Year First Elected

as an Officer

as an Officer or

Position Held with the Registrant

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Syed Kausar Kazmi

Michael Francis

Experience of Officers and Directors:

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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

Ghauri spearheaded

the Innovation practice of the Company while he was 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 supervised over 200 project managers, developers, analysts and users in nine European Countries.

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.

He is currently based out of NetSol’s Pakistan office, Prior to

joining the Company, Mr.

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.

Ghauri 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.

and Qualifications :

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for US sales, from June 2002 to December 2003.

Caton was employed by ePlus from 1994 to 2002 as Senior Vice President-Business Development.

Caton was previously employed by ePlus from 1994 to 2002 as Senior Vice President-Business

He was a member of the UCLA Alumni Association Board of Directors and served on the Board of Directors of NETSOL from 2002-2005.

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

received his BA from UCLA in psychology in 1971.

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

Caton received his BA from UCLA in psychology in 1971.

and Qualifications:

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

Caton serves the Board with his 45 years of experience in sales, marketing and management in the financial

leasing and software industries.

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

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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 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.

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.

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.

and Qualifications:

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corporate governance as well as the management and retention of a diverse group of employees.

TOLENTINO joined the Board of Directors for the first time in 2018.

Tolentino brings more than 30 years of experience in the

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

2006 to 2014 and then served as an advisor from 2015 to 2016.

Prior to Toyota Leasing, Mr.

Tolentino spent more than 10 years with Toyota

Motor Credit Corporation, USA.

He began his career in the auto finance industry with General Motors Acceptance Corporation.

joined the advisory board of NETSOL in September 2017 where he provided strategic advice to the senior management of the Company.

Tolentino is the Chairman of the Nomination and Corporate Governance Committee and member of the Audit and Compensation Committees.

TOLENTINO joined the Board of Directors for the first time in 2018 and served as a director until his term ended in June 2023.

Tolentino brought over than 30 years of experience in the auto finance industry working with global manufacturers such as Toyota and

General Motors.

Prior to joining NETSOL’s advisory board in 2017, Mr.

Tolentino held several executive positions at Toyota Leasing

(Thailand) Co., Ltd., including most recently as president from 2006 to 2014 and then served as an advisor from 2015 to 2016.

Toyota Leasing, Mr.

Tolentino spent more than 10 years with Toyota Motor Credit Corporation, USA.

He began his career in the auto finance

industry with General Motors Acceptance Corporation.

Tolentino served as the Chair of the Nomination

and Corporate Governance Committee and member of the Audit and Compensation Committees until the end of his term in June 2023.

and Qualifications :

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growth in the automotive industry.

Using his experience, he provided the Company’s management with strategic advice.

KAUSAR KAZMI joined the Board of Directors in 2019.

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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 Chair of

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

and Qualifications :

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business, expending its focus on business development.

FRANCIS is nominated to the Board of Directors for the first time this year in June 2023.

Francis brings over 30 years of expertise

in the banking and finance industry.

He is currently Joint Managing Partner of Alderson Francis Associates Ltd, which provides business

consulting to UK finance, software, and private equity businesses.

Prior to this, he was Co-Head of Investment Banking at Investec Bank

UK PLC, until October 2020.

He was at Investec for 18 years, in various roles, most significantly as the founder and CEO of Investec

asset Finance PLC, which is a significant client of NETSOL.

From November 2022 to May 2023, Mr.

Francis served as an interim executive

director for VLS, a subsidiary of NTE to utilize his Financial Conduct Authority (FCA) authorization to assist VLS in strategic management

of its business and to meet VLS’s FCA requirements.

Francis also held senior management positions at Barclays Bank PLC and

ANZ Investment Bank.

Francis received his BSc in Biochemistry with II Class Honors from The University College of Wales, Aberystwyth

He is also a Fellow of the Institute of Chartered Accountants in England and Wales, qualifying with Ernst & Young in 1992.

Francis is currently a trustee of the School of Hard Knocks located in the United Kingdom.

He also served as the Chair of the Finance

Committee of The Beacon School, located in the UK, for nine years.

In September 2023, Mr.

Francis was appointed as the Chair of the Nomination

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

and Qualifications :

Francis brings to the Board a seasoned expertise in financial services strategy, especially in the field

of Lease and Finance as well as management proficiency.

of Business Conduct & Ethics

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Caton, and Mr.

Kazmi is the current Chairman of the Audit Committee.

Tolentino with Mr.

Francis replacing Mr.

Tolentino after being elected to the Board in June 2023 and being appointed as a member of the

Audit Committee in September 2023.

Kazmi is the current Chair of the Audit Committee.

Committee Financial Expert

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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

an annual opportunity to cast an advisory vote on the compensation programs for our named executive officers and as always, the stockholders

are welcome to contact Investor Relations with any questions.

the annual general meeting on June 7, 2023, the Shareholders overwhelmingly approved an annual vote on the Frequency of Say on Pay voting.

Accordingly, we will continue to provide our stockholders with an annual opportunity to cast an advisory vote on the compensation programs

for our named executive officers and as always, the stockholders are welcome to contact Investor Relations with any questions.

and Evolving Compensation Practices

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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.

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.

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.

The 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

Our 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 transaction.

Beginning 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

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Compensation Principles

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.

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.

Analysis Peer Group

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use in setting executive compensation:

Software, Inc.

Information Systems

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For fiscal year 2024, 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.

Almonds salary will remain the same.

McGlasson salary for

fiscal year 2023 was $233,622 and her base salary for fiscal year 2024 will remain the same.

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.

McGlasson and Mr.

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For 2023, 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.

Ghauri did not earn any bonus.

structure as discussed below on page 41.

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

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revenue recognition policy.

Allocated Bonus

from Operations

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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

Officer, our Chief Financial Officer who is our Principal Financial and Accounting Officer, and others considered to be executive officers

of the Company.

Name and Principle Position

Fiscal Year Ended

Stock Awards ($) (1)

Option Awards ($)

All Other Compensation ($)

following table shows the compensation for the fiscal years ended June 30, 2023 and 2022, earned by our Chairman and Chief

Executive Officer, our Chief Financial Officer who is our Principal Financial and Accounting Officer, and others considered to be

executive officers of the Company.

and Principle

Najeeb Ghauri

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$ 793,428 (4)

$ 767,768 (4)

Roger K Almond

1 unchanged sentence

Secretary, General Counsel

The stock was awarded as compensation to the officers.

See also Grants of Plan Based Awards.

These amounts do not reflect compensation

actually received by the named executive officer.

These amounts represent the aggregate grant date fair value of the stock awards granted

during the relevant time period, computed in accordance with FASB ASC 718, excluding the effect of any estimated forfeitures based on

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.

There were no stock awards during the three years presented.

Bonus was awarded based on Mr.

Ghauri’s bonus structure as detailed on page 41.

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.

Najeeb Ghauri’s compensation agreement, he received $200,000 in allowances, perquisites and benefits such as car

allowance, insurance premiums, and home office allowance for the fiscal years ended June 30, 2023 and 2022.

Consists of $610,068 and $586,397 base salary and $192,815 and $207,031 commission for the fiscal years ended June 30, 2023 and 2022,

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, 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

for the fiscal year ended June 30, 2022, 2021 and 2020, respectively.

Naeem Ghauri’s compensation agreement, he received $47,220 and $45,830 in allowances, perquisites and

benefits for the fiscal years ended June 30, 2023 and 2022, respectively.

Consists of $12,871 and $10,066 paid for medical and dental insurance premiums for participation in the health insurance program for

the fiscal years ended June 30, 2023 and 2022, respectively, and $24,000 paid as car allowance for the years ended June 30,

2023 and 2022.

Consists of $11,719 and $10,426 paid for medical and dental insurance premiums for participation in the health insurance

program for the fiscal years ended June 30, 2023 and 2022, respectively.

of Plan-Based Awards

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.

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.

were no stock grants during the three years presented.

of Summary Compensation Table

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salary of $226,000 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 $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.

There is no change in Mr.

Almond’s salary for the fiscal year 2024, 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.

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

Effective July 1, 2022, Ms.

McGlasson’s salary,

was increased to $233,622.

There is no change in Ms.

McGlasson’s salary for

fiscal year 2024.

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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occurred on June 30, 2023, the last day of our most recently completed fiscal year.

BENEFITS AND PAYMENTS

TERMINATION AFTER CHANGE OF CONTROL

TERMINATION UPON DEATH OR DISABILITY

TERMINATION BY US WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD REASON

Base Salary Continuance

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occurred on June 30, 2023, the last day of our most recently completed fiscal year.

BENEFITS AND PAYMENTS

TERMINATION AFTER CHANGE OF CONTROL

TERMINATION UPON DEATH OR DISABILITY

TERMINATION BY US WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD REASON

BY US WITHOUT

Base Salary Continuance

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occurred on June 30, 2023, the last day of our most recently completed fiscal year.

BENEFITS AND PAYMENTS

TERMINATION AFTER CHANGE OF CONTROL

TERMINATION UPON DEATH OR DISABILITY

TERMINATION BY US WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD REASON

UPON DEATH OR

BY US WITHOUT

EXECUTIVE FOR

Base Salary Continuance

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Net Cash Value of Options

Compensation Table

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, 2022, other than Najeeb Ghauri and Malea Farsai who were

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

FEES EARNED OR PAID IN CASH ($)

SHARE AWARDS ($)

Henry Tolentino

Compensation Policy

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reasonable expenses incurred in connection with attendance at meetings of our Board of Directors and the committees thereof.

paid the following amounts to members of the Board of Directors for the activities shown during the fiscal year ended June 30, 2022.

BOARD ACTIVITY

CASH PAYMENTS

Board Member Fee

Chairperson for Audit Committee

Chairperson for Compensation Committee

Chairperson for Nominating and Corporate Governance Committee

Compensation Table

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, 2023, other than Najeeb Ghauri and Malea Farsai who were

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

Henry Tolentino

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

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of Directors are eligible to receive stock grants that may be granted if and only if approved by the shareholders of the Company.

September 12, 2016, the Compensation Committee granted independent board members 19,834 shares of common stock vesting at 50% immediately

and rest at the completion of each year served commencing with the period ended September 30, 2017 and ending September 30, 2021.

Committee Interlocks and Insider Participation

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Kazmi, and Mr.

All current members of the Compensation

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

None of these individuals were at any time

during the fiscal year ended June 30, 2022, or at any other relevant time, an officer or employee of the Company.

All current members of the

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

None of these individuals

were at any time during the fiscal year ended June 30, 2023, or at any other relevant time, an officer or employee of the

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

Options Grants Issued

Options Grants Cancelled / Expired

Available for Issue

Options Issued but Outstanding

The 2005 stock option plan

but Outstanding

The 2005 stock option plan

The 2013 stock option plan

The 2015 stock option

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

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

Number of Shares

Name of Beneficial Owner (1)

Beneficially Owned (2)

of Beneficial Owner (1)

Najeeb Ghauri

Henry Tolentino **

Michael Francis

Patti McGlasson

Renaissance Technologies Holdings Corp.

Topline Capital Management LLC

All officers and directors as a group (eight persons)

The Vanguard Group

All officers and directors

as a group (nine persons)

Less than one percent

He is no longer director of the Company

Except as otherwise indicated, the Company believes that the beneficial owners of the common stock listed below, based on information

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Address c/o NetSol Technologies, Inc.

at 23975 Park Sorrento, Suite 250, Calabasas, CA 91302.

at 16000 Ventura Blvd., Suite 770, Encino, CA 91436.

Shares issued and outstanding as of September 15, 2023 were 11,345,856.

5% or greater shareholder based on Schedule 13G filing on February 11, 2022.

5% or greater shareholder based on Schedule 13G filing on April 13, 2023.

5% or greater shareholder based on Schedule 13G filing on June 30, 2023.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.

May 31, 2017, Faizaan Ghauri, son of CEO Najeeb Ghauri, and an employee of the Company, was appointed CEO of WRLD3D by the Board of WRLD3D

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.

The maximum principal amount of the Convertible Note is $750,000, and as of June 30, 2018,

the Company had disbursed $750,000.

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.

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

of June 30, 2019, NetSol Thai had disbursed $2,500,000.

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.

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

June 30, 2020, the Company had disbursed $600,000.

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”)

which was fully executed on August 19, 2019.

The maximum principal amount of $400,000 was paid on September 9, 2019.

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.

Ghauri, CEO and Chairman of the Board, and Naeem Ghauri, Director, have a financial interest in G-Force, LLC which purchased a 4.9% investment

in WRLD3D for $1,111,111.

with Related Persons, Promoters and Certain Control Persons

than compensation arrangements for our executive officers and directors, which are described under “Executive and Director Compensation”,

since July 1, 2022, there are no transactions to which we were a party in which (i) the amount involved exceeded or will exceed the lesser

of $120,000 of one percent (1%) of our average total assets at year-end for the last two completed fiscal years and (ii) any of our directors,

executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of, or person sharing the household

with, any of the foregoing persons, had or will have a direct or indirect material interest.

Nasdaq Stock Market LLC (“Nasdaq”) requires that a majority of our board of directors must be composed of “independent

directors,” which is defined generally as a person other than an officer or employee of the company or its subsidiaries or any

other individual having a relationship, which, in the opinion of the company’s board of directors would interfere with the director’s

exercise of independent judgment in carrying out the responsibilities of a director.

The board has determined that Mark Caton, Kausar

Henry Tolentino, and Michael Francis are “independent”.

Our board currently consists of three independent directors

and two non-independent directors.

Tolentino’s term ended in June 2023 and Mr.

Francis was elected to the Board of Directors

in June 2023.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

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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

by the accountant in connection with statutory and regulatory filings or engagements was $262,500 and $250,000 for the years ended June

30, 2023 and 2022, respectively.

fees for fiscal year 2023 were $16,000 and consisted of the preparation of the Company’s federal and state tax returns for the

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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

any other Committee member to whom the Committee has delegated that authority.

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

other Committee member to whom the Committee has delegated that authority.

The Audit Committee does not delegate its responsibilities

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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.

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.

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.

3.2 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.

3.3 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

3.4 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.

3.5 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.

3.6 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.

3.7 Amendment

to Articles of Incorporation dated May 12, 2008.

3.8 Amendment

to the Articles of Incorporation dated August 6, 2012, filed as Appendix A to NETSOL’s

Definitive Proxy Statement filed June 14, 2012.

and Restated Bylaws of NetSol Technologies, Inc.

dated February 9, 2018*.

Form of Common Stock Certificate.

Stock Purchase Agreement dated May 6, 2006 by and between the Company, McCue Systems, Inc.

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.

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.

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

Amendment to Employment Agreement by and between Company and Patti L.

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.

Amendment to Employment Agreement between NetSol Technologies, Inc.

and Najeeb Ghauri dated effective July 25, 2013.

Amendment to Employment Agreement between NetSol Technologies, Inc.

of Common Stock Certificate.

Purchase Agreement dated May 6, 2006 by and between the Company, McCue Systems, Inc.

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.

10.3 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.

10.4 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,

10.5 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,

10.6 Amendment

to Employment Agreement by and between Company and Najeeb Ghauri dated effective January

10.7 Amendment

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

2005 Stock Option Plan incorporated by reference as Exhibit 1.1 to NETSOL’s Definitive

Proxy Statement filed on March 3, 2006.

10.9 Amendment

to Employment Agreement by and between Company and Najeeb Ghauri dated effective January

10.10 Amendment

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

10.11 Amendment

to Employment Agreement by and between Company and Patti L.

McGlasson dated effective

April 1, 2010.

10.12 Company’s

2011 Equity Incentive and Nonstatutory Plan incorporated by reference as Appendix A to NETSOL’s

Proxy Statement filed on April 11, 2011.

10.13 Company’s

2013 Equity Incentive Plan incorporated by reference as Appendix A to NETSOL’s Definitive

Proxy Statement filed on May 29, 2013.

10.14 Amendment

to Employment Agreement between NetSol Technologies, Inc.

and Najeeb Ghauri dated effective

July 25, 2013.

10.15 Amendment

to Employment Agreement between NetSol Technologies, Inc.

and Patti L.W.

McGlasson dated effective July 25, 2013.

Restated Charter of the Compensation Committee dated effective September 10, 2013.

Restated Charter of the Nominating and Corporate Governance Committee dated effective September 10, 2013.

Restated Charter of the Audit Committee dated effective September 10, 2013.

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)

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (CEO) (1)

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (CFO) (1)

Certification pursuant to 18 U.S.C.

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

Certification pursuant to 18 U.S.C.

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

McGlasson dated

effective July 25, 2013.

10.16 Restated

Charter of the Compensation Committee dated effective September 10, 2013.

10.17 Restated

Charter of the Nominating and Corporate Governance Committee dated effective September 10,

10.18 Restated

Charter of the Audit Committee dated effective September 10, 2013.

10.19 Restated

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

10.20 Company’s

2015 Equity Incentive Plan incorporated by reference as Appendix A to NETSOL’s Definitive

Proxy Statement filed on April 15, 2015.

list of all subsidiaries of the Company (1)

31.1 Certification

pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (CEO) (1)

31.2 Certification

pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (CFO) (1)

32.1 Certification

pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley

Act of 2002 (CEO) (1)

32.2 Certification

pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley

act of 2002 (CFO) (1)

XBRL Instance Document

25 unchanged sentences

September 22, 2023

HENRY TOLENTINO

MICHAEL FRANCIS

September 22, 2023

3 unchanged sentences

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

Statements Consolidated Balance Sheets as of June 30, 2023 and 2022

Statements of Operations and Comprehensive Income (Loss) for the Years Ended June 30, 2023 and 2022

Statement of Equity for the Years Ended June 30, 2023 and 2022

2 unchanged sentences

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Technologies, Inc.

and subsidiaries

Calabasas, California

the shareholders and the board of directors of NetSol Technologies, Inc.

on the Financial Statements

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

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

on these consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting

Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

as of June 30, 2023 and 2022, the related consolidated

statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes (collectively

referred to as the “financial statements”).

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

respects, the financial position of the Company as of June 30, 2023 and 2022, and the results of its operations and its cash flows for

the years then ended, in conformity with accounting principles generally accepted in the United States.

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

Our responsibility is to express an opinion on the Company’s

financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits of these consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight

Board (United States).

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated

financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were

we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an

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.

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits,

we are required to obtain an 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.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or

fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

Our audit also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

Audit Matters

critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated

or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

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

Audit Matter Description

described in Note 3 to the consolidated financial statements, management assesses relevant contractual terms in its customer arrangements

to determine the transaction price and recognizes revenue upon transfer of control of the promised goods or services in an amount that

reflects the consideration the Company expects to receive in exchange for those products or services.

Management applies judgment in

determining the transaction price which is dependent on the contractual terms.

In order to determine the transaction price, management

may be required to estimate variable consideration when determining the amount and timing of revenue recognition.

the Critical Audit Matter Was Addressed in the Audit

principal considerations for our determination that performing procedures relating to the identification of contractual terms in customer

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

effort in performing our audit procedures which were designed to evaluate whether the contractual terms used in the determination of

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

financial statements.

These procedures included testing the effectiveness of controls relating to the revenue recognition process, including

those related to the identification of contractual terms in customer arrangements that impact the determination of the transaction price

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

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

and Intangible asset- Refer to Note 12 and Note 13 to the financial statements

Audit Matter Description

Company tests goodwill and intangible assets for impairment annually (in the fourth quarter), or more frequently when events or changes

in circumstances indicate it is more likely than not that the fair value of a reporting unit has declined below its carrying value.

Company utilizes a discounted cash flow methodology to calculate the fair value of its reporting units, which requires management to

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

of the reporting unit and the amount of any goodwill impairment charge.

As of June 30, 2022, the Company has four reporting units, but

only three of which have goodwill.

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

value specialists.

the Critical Audit Matter Was Addressed in the Audit

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

We believe that our audit provides

a reasonable basis for our opinion.

audit matters are matters arising from the current-period audit of the financial statements that were communicated or required to be

communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and

(2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

BF Borgers CPA PC (PCAOB ID 5041 )

We have served as the Company’s auditor since 2020

TECHNOLOGIES, INC.

AND SUBSIDIARIES

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

Balance Sheets

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 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

Accounts receivable, net

of allowance of $ 420,354 and $ 166,231

Revenues in excess of billings,

net of allowance of $ 1,380,141 and $ 136,976

current assets

Total current assets

Revenues in excess of billings, net - long

Property and equipment, net

Right of use assets - operating leases

Long term investment

Intangible assets, net

LIABILITIES AND STOCKHOLDERS’

Current liabilities:

Accounts payable and accrued

Current portion of loans

and obligations under finance leases

less current maturities

Current portion of operating

lease obligations

Total current liabilities

Loans and obligations under finance leases;

less current maturities

and contingencies

Stockholders’

stock, $ .01 par value;

Operating lease obligations;

less current maturities

Stockholders’ equity:

Preferred stock, $ .01 par value;

shares authorized;

stock, $ .01 par value;

Common stock, $ .01 par value;

14,500,000 shares authorized;

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)

12,284,887 shares issued and 11,345,856 outstanding as of June 30, 2023 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 June 30, 2023 and June 30, 2022)

( 3,920,856 )

Accumulated deficit

( 44,896,186 )

3 unchanged sentences

( 39,363,085 )

NetSol stockholders’ equity

Total NetSol stockholders’

Non-controlling

5 unchanged sentences

Statements of Operations

Services - related party

and consultants

and amortization

For the Years

Net Revenues:

Subscription and support

Total net revenues

Cost of revenues

and marketing

and amortization

and administrative

and development cost

Operating expenses:

Selling, general and administrative

and development cost

Total operating expenses

Loss from operations

( 8,779,958 )

income and (expenses)

on sale of assets

(loss) on foreign currency exchange transactions

of net loss from equity investment

( 1,078,323 )

Other income and (expenses)

Interest expense

Interest income

Gain on foreign currency

exchange transactions

Share of net loss from

equity investment

( 1,033,243 )

( 2,021,480 )

income (expense)

other income (expenses)

income before income taxes

Net income (loss) before

( 3,217,913 )

tax provision

Net income (loss)

( 4,144,473 )

1 unchanged sentence

( 1,099,275 )

( 1,951,959 )

income (loss) attributable to NetSol

$ ( 5,243,748 )

income (loss) per share:

income (loss) per common share

Weighted average

number of shares outstanding

$ ( 851,156 )

Net income (loss) per share:

Net income (loss) per common

Weighted average number of shares outstanding

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

2 unchanged sentences

Statements of Comprehensive Income (Loss)

For the Years

income (loss)

$ ( 5,243,748 )

comprehensive income (loss):

$ ( 851,156 )

Other comprehensive income

Translation adjustment

( 10,184,324 )

( 11,175,077 )

adjustment attributable to non-controlling interest

1 unchanged sentence

( 6,612,071 )

( 7,494,604 )

Comprehensive

1 unchanged sentence

$ ( 11,855,819 )

$ ( 8,345,760 )

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

1 unchanged sentence

AND SUBSIDIARIES

Consolidated Statement of Stockholders’ Equity

For the Years Ended June 30, 2022 and 2021

Statement of Stockholders’ Equity

the Years Ended June 30, 2023 and 2022

Comprehensive

Stockholders’

at June 30, 2020

$ 128,677,754

$ ( 1,455,969 )

Balance at June 30, 2021

$ 129,018,826

$ ( 3,820,750 )

effect adjustment (1)

$ ( 38,801,282 )

$ ( 31,868,481 )

Subsidiary common stock issued for:

Common stock issued for:

stock issued for:

of treasury shares

Purchase of treasury shares

Purchase of subsidiary treasury shares

Adjustment in APIC for purchase of subsidiary

treasury shares

Fair value of subsidiary options issued

Foreign currency translation adjustment

( 7,494,604 )

( 3,680,473 )

currency translation adjustment

income for the year

at June 30, 2021

( 11,175,077 )

Net income (loss) for

Balance at June 30, 2022

$ 128,218,247

1 unchanged sentence

$ ( 39,652,438 )

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.

$ ( 39,363,085 )

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

5 unchanged sentences

Stockholders’

at June 30, 2021

Balance at June 30, 2022

$ 128,218,247

3 unchanged sentences

Common stock issued for:

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

Adjustment in APIC for change in subsidiary

shares to non-controlling interest

Fair value of subsidiary options issued

Acquisition of non-controlling interest in

Foreign currency translation adjustment

( 6,612,071 )

1 unchanged sentence

( 10,184,324 )

income (loss) for the year

income (loss)

at June 30, 2022

Net income (loss) for

( 5,243,748 )

( 4,144,473 )

Balance at June 30, 2023

$ 128,476,048

$ ( 3,920,856 )

$ ( 44,896,186 )

$ ( 45,975,156 )

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

1 unchanged sentence

AND SUBSIDIARIES

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

Statements of Cash Flows

For the Years

Cash flows from operating

$ ( 4,144,473 )

Adjustments to reconcile

net income (loss) to net cash provided by operating activities:

Depreciation and amortization

Provision for bad debts

Goodwill impairment

Impairment and share of

net loss from investment under equity method

Loss on sale of assets

Stock based compensation

in operating assets and liabilities:

Accounts receivable

( 6,860,983 )

in excess of billing

( 5,669,262 )

current assets

payable and accrued expenses

Revenues in excess of billing

( 1,273,693 )

Other current assets

Accounts payable and accrued

cash provided by operating activities

flows from investing activities:

of property and equipment

Cash flows from investing

Purchases of property and

( 1,639,438 )

1 unchanged sentence

of property and equipment

in associates

cash used in investing activities

1 unchanged sentence

( 2,260,147 )

flows from financing activities:

of treasury stock

( 2,364,781 )

of subsidiary treasury stock

from bank loans

Cash flows from financing

Purchase of treasury stock

Purchase of subsidiary

treasury stock

Proceeds from bank loans

on finance lease obligations and loans - net

2 unchanged sentences

( 1,378,721 )

( 1,165,565 )

of exchange rate changes

( 8,321,891 )

increase (decrease) in cash and cash equivalents

( 9,163,111 )

and cash equivalents at beginning of the period

Net decrease in cash and

cash equivalents

( 8,430,543 )

( 9,741,357 )

Cash and cash equivalents

at beginning of the period

and cash equivalents at end of period

2 unchanged sentences

AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Continued)

paid during the period for:

INVESTING AND FINANCING ACTIVITIES:

Statements of Cash Flows (Continued)

For the Years

SUPPLEMENTAL DISCLOSURES:

Cash paid during the period

NON-CASH INVESTING AND FINANCING ACTIVITIES:

acquired under finance lease

shares acquired for services rendered

issued to vendor for services received

18 unchanged sentences

Connect (Private), Ltd.

NetSol Technologies Australia Pty Ltd.

Technologies Australia Pty Ltd.

(“Australia”)

NetSol Technologies Europe Limited (“NTE”)

NTPK (Thailand) Co.

Technologies Europe Limited (“NTE”)

(Thailand) Co.

Limited (“NTPK Thailand”)

3 unchanged sentences

Lease Services Holdings Limited (“VLSH”)

Virtual Lease Services Limited (“VLS”)

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

Lease Services Limited (“VLS”)

Lease Services (Ireland) Limited (“VLSIL”)

Majority-owned

NetSol Technologies, Ltd.

Technologies, Ltd.

(“NetSol PK”)

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

NetSol Technologies Thailand Limited (“NetSol Thai”)

Innovation (Private) Limited (“NetSol Innovation”)

Ascent Middle East Computer Equipment Trading LLC (“Namecet”)

Technologies Thailand Limited (“NetSol Thai”)

(Thailand) Limited (“OTOZ Thai”)

71 unchanged sentences

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

The Company recognizes the potential risk associated with recognizing revenues in excess of billings, including the risk of non-payment

by the customer.

Therefore, management continually assesses the collectability of such amounts and makes appropriate provisions or adjustments

if collectability becomes doubtful.

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

36 unchanged sentences

30, 2023 and 2022

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

Intangible assets

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

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

The Company assesses recoverability by determining

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

If the future discounted

cash flows are less than the carrying amount of these assets, the Company recognizes an impairment loss based on the excess of the carrying

amount over the fair value of the assets.

assets consist of capitalized software cost.

Intangible assets with finite lives are amortized over the estimated useful life and are

evaluated for impairment at least on an annual basis and whenever events or changes in circumstances indicate that the carrying value

may not be recoverable.

The Company assesses recoverability by determining whether the carrying value of such assets will be recovered

through the discounted expected future cash flows.

If the future discounted cash flows are less than the carrying amount of these assets,

the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets.

Development Costs

19 unchanged sentences

amount of goodwill may be impaired.

In conducting its annual impairment test, the Company first

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

carrying amount.

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

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

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

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

In conducting its annual impairment test, the Company first reviews qualitative factors to determine

whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount.

If factors indicate that

the fair value of the reporting unit is less than its carrying amount, the Company performs a quantitative assessment and the fair value

of the reporting unit is determined by analyzing the expected present value of future cash flows.

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.

15 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:

Company did not have any financial assets that were measured at fair value on a recurring basis at June 30, 2023.

Company’s financial assets that were 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.

to Consolidated Financial Statements

30, 2022 and 2021

reconciliation for the years ended June 30, 2023 and 2022 is as follows:

1 unchanged sentence

of billings - long term

at June 30, 2020

during the period

to short term

( 1,341,575 )

of Translation Adjustment

Balance at June 30, 2021

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.

Amortization during the period

Transfers to short term

Effect of Translation

Balance at June 30, 2022

Amortization during the period

Transfers to short term

Effect of Translation

Balance at June 30, 2023

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

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

6 unchanged sentences

derivatives are valued using the Black-Scholes model.

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2023 and 2022

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

11 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.

21 unchanged sentences

penalties associated with unrecognized tax benefits are classified as additional income taxes in the statements of operations.

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2023 and 2022

Currency Translation

2 unchanged sentences

uses the Euro;

NetSol PK, Connect, Omni and NetSol Innovation use Pakistan Rupees;

NTPK Thailand, NetSol Thai and OTOZ Thai use Thai

NetSol PK, Connect, and NetSol Innovation use Pakistan Rupees;

NTPK Thailand, NetSol Thai and OTOZ Thai use Thai Baht;

NetSol Australia uses the Australian dollar;

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

Namecet uses AED;

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

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.

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

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

of Cash Flows

9 unchanged sentences

Information and Geographic Areas”)

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2022 and 2021

Accounting Standards Adopted by the Company:

10 unchanged sentences

financial statements.

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

financial statements.

within those fiscal years) beginning after December 15, 2021, and was adopted by the Company July 1, 2022.

The adoption of the new standard

did not have a material impact on the Company’s consolidated financial statements.

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2023 and 2022

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

10 unchanged sentences

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.

The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

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

4 unchanged sentences

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.

15, 2021 and interim periods therein, and was adopted by the Company on July 1, 2022.

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:

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

7 unchanged sentences

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

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2022 and 2021

3 – REVENUE RECOGNITION

7 unchanged sentences

of the transaction price to the performance obligations in the contract;

● Recognition

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

17 unchanged sentences

to take possession of the software.

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2023 and 2022

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

16 unchanged sentences

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

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2022 and 2021

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

12 unchanged sentences

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

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2023 and 2022

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

19 unchanged sentences

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

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2022 and 2021

Company’s disaggregated revenue by category is as follows:

SCHEDULE OF DISAGGREGATED REVENUE BY CATEGORY

OF DISAGGREGATED REVENUE BY CATEGORY

For the Years

Ended June 30,

Subscription and support

Services - related party

Total core revenue, net

5 unchanged sentences

terms and may vary in some instances.

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2023 and 2022

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

23 unchanged sentences

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

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2022 and 2021

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.

1 unchanged sentence

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

June 30, 2021

Revenues in excess of billings

Unearned revenue

the year ended June 30, 2022, the Company recognized revenue of $ 3,480,224 , which was included in the deferred 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 revenue

TECHNOLOGIES, INC.

1 unchanged sentence

30, 2023 and 2022

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

OF REVENUES IN EXCESS OF BILLINGS AND DEFERRED REVENUE

in excess of billings

Unearned revenue

The Company’s unearned revenue reconciliation is as follows:

OF UNEARNED REVENUE RECONCILIATION

Unearned Revenue

Balance at June 30, 2021

Revenue Recognized

( 17,881,803 )

Balance at June 30, 2022

Revenue Recognized

( 19,762,568 )

Balance at June 30, 2023

June 30, 2023, the Company recorded a provision of $ 1,275,000 against revenues in excess of billings related to an overdue balance from

a customer in the Asia-Pacific segment, which the Company determined to be uncollectible.

the year ended June 30, 2023, the Company recognized revenue of $ 3,453,962 ,

which was included in the unearned revenue balance at the beginning of the period.

All other activity in unearned revenue is due to the

timing of invoicing in relation to the timing of revenue recognition.

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

18 unchanged sentences

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).

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2023 and 2022

to Obtain a Contract

8 unchanged sentences

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

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2022 and 2021

4 – RE-CLASSIFICATION OF OTHER COMPREHENSIVE INCOME (LOSS)

Company re-classified certain foreign currency translation adjustments of foreign entities in other comprehensive income (loss) to income

(loss) for the period ended June 30, 2023.

OF RECLASSIFICATION OF FOREIGN CURRENCY TRANSLATION ADJUSTMENTS

Details about Accumulated

Comprehensive

Income (Loss) Components

the Year ended June 30, 2023

Reclassified from

Other Income (Loss)

Line Item in the Statement

Statement of Operations

Net Loss is Presented

Foreign currency translation gain (loss) on

liquidation of NTPK Thailand

$ ( 323,764 )

Gain on foreign currency exchange

Foreign currency translation gain (loss) on

investment in WRLD3D

Other income (expense)

Total reclassification

for the period

$ ( 974,006 )

Thailand had been a dormant company in Thailand since 2016 when it was replaced by NetSol Technologies Thailand Limited.

During the year

ended June 30, 2023, the dissolution of NTPK Thailand was finalized by Thailand’s authorities.

5 – EARNINGS PER SHARE

2 unchanged sentences

shares outstanding during the period using the treasury stock method.

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

During the years ended June 30, 2023 and 2022, there were no outstanding

dilutive instruments.

6 – MAJOR CUSTOMERS

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.

Accounts receivable from DFS and BMW at June

30, 2021, were $ 462,861 and $ 35,063 , respectively.

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

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

6 – CONVERTIBLE NOTE RECEIVABLE – RELATED PARTY

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

The convertible notes bear interest ranging from

5 % to 10 % with various maturity dates.

The convertible notes have conversion features which allow the Company to convert the notes into

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.

the year ended June 30, 2023, revenues from Daimler Financial Services (“DFS”) were $ 14,982,394 representing 28.6 % of revenues.

During the year ended June 30, 2022, revenues from Daimler Financial Services (“DFS”) were $ 18,090,059 representing 31.6 %

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

receivable from DFS at June 30, 2023 and 2022 were $ 4,368,881 and $ 2,005,463 , respectively.

Revenues in excess of billings at June 30,

2023 and 2022 were $ 1,961,750 and $ 365,863 , respectively.

TECHNOLOGIES, INC.

1 unchanged sentence

30, 2023 and 2022

following table summarizes the convertible notes receivable from WRLD3D.

SCHEDULE OF CONVERTIBLE NOTES

Convertible Note

Agreement Date

Interest Rate

Maturity Date

March 2, 2018

February 9, 2018

March 31, 2019

April 1, 2019

March 31, 2020

August 19, 2019

March 31, 2020

Less allowance for doubtful account

( 4,250,000 )

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

has not been accruing interest since July 1, 2020.

7 - OTHER CURRENT ASSETS

1 unchanged sentence

SCHEDULE OF OTHER CURRENT ASSETS

June 30, 2022

June 30, 2021

Prepaid Expenses

3 unchanged sentences

Other Receivables

Due From Related Party

Less allowance for doubtful account

( 1,243,633 )

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

leaving a net balance of $ 0 .

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

June 30, 2021

SCHEDULE OF REVENUE IN EXCESS OF BILLING

Revenues in excess of billings - long term

6 unchanged sentences

ended June 30, 2023 and 2022.

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2023 and 2022

9 - PROPERTY AND EQUIPMENT

1 unchanged sentence

SCHEDULE OF PROPERTY AND EQUIPMENT

June 30, 2022

June 30, 2021

Office Furniture and Equipment

4 unchanged sentences

( 14,069,064 )

Property and Equipment, Net

Property and Equipment,

the years ended June 30, 2023 and 2022, depreciation expense totaled $ 2,072,897 and $ 2,179,509 , respectively.

3 unchanged sentences

SUMMARY OF FIXED ASSETS HELD UNDER CAPITAL LEASES

June 30, 2022

June 30, 2021

Computers and Other Equipment

Furniture and Fixtures

Accumulated Depreciation - Net

Accumulated Depreciation

Fixed assets held under

finance leases, Total

capital leases, Total

lease term and discount rate were as follows:

SCHEDULE OF FINANCE LEASE TERM

average remaining lease term - Finance leases

Weighted average discount

rate - Finance leases

TECHNOLOGIES, INC.

1 unchanged sentence

30, 2023 and 2022

lease term and discount rate were as follows:

SCHEDULE OF FINANCE LEASE TERM

June 30, 2022

June 30, 2021

Weighted average remaining lease term - Finance leases

Weighted average discount rate - Finance leases

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.

The Company used the incremental borrowing rate on July 1, 2019 for all leases that commenced

prior to that date.

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

13 unchanged sentences

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

June 30, 2021

Operating lease assets, net

lease assets, net

Operating, Current

Operating, Non Current

Total Lease Liabilities

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2023 and 2022

components of lease cost were as follows:

1 unchanged sentence

For the Years

Ended June 30,

Amortization of finance lease assets

7 unchanged sentences

average remaining lease term - Operating leases

average discount rate - Operating leases

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2022 and 2021

Weighted average discount

rate - Operating leases

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

1 unchanged sentence

For the Years

Ended June 30

Operating cash flows related to operating leases

Operating cash flows related to finance leases

Financing cash flows related finance leases

cash flows related to operating leases

Operating cash flows

related to finance leases

Financing cash flows

related finance leases

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2023 and 2022

of operating lease liabilities were as follows as of June 30, 2023:

4 unchanged sentences

Within year 5

Total Lease Payments

6 unchanged sentences

All leases are considered operating leases.

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.

There are no rights

to purchase the premises and no residual value guarantees.

For the years ended June 30, 2023 and 2022, the Company received lease income

of $ 31,998 and $ 35,356 , respectively.

Company signed an agreement for office space in Austin, Texas in April 2023 with effective date of August 2023.

The lease agreement is

a three year agreement with monthly payments ranging from $ 10,790 for year one to $ 11,448 for year three.

11 – LONG-TERM INVESTMENT

Drivemate – Related Party

Drivemate-Related

Company and Drivemate Co., Ltd.

14 unchanged sentences

investment using the equity method of accounting .

the years ended June 30, 2023 and 2022, the Company performed services of $ nil and $ 12,528 , respectively.

the equity method of accounting, the Company recorded its share of net income of $ 7,510 and share of net loss of $ 49,664 for the years

ended June 30, 2023 and 2022, respectively.

For the year ended June 30, 2023, 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 $ 1,041,482 .

The impairment expense is recorded in the line item “share of net loss under equity method” in the “Consolidated

Statement of Operations”.

TECHNOLOGIES, INC.

1 unchanged sentence

30, 2023 and 2022

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

March 2, 2017, the Company purchased a 4.9 % interest in WRLD3D, a non-public company, for $ 1,111,111 .

The Company paid $ 555,556 at the

initial closing and $ 555,555 on September 1, 2017.

NetSol PK, the subsidiary of the Company, purchased a 12.2 % investment in WRLD3D,

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

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

on March 2, 2020.

Company determined that it met the significant influence criteria since the CEO of WRLD3D is the son of the CEO, Najeeb Ghauri, and also

an employee of the Company;

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.

following table reflects the above investments at June 30, 2023 and 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

Investment in

Gross investment at June 30, 2021

Cumulative net loss on investment

( 1,924,134 )

Share of net income for the year

Net investment at June 30, 2022

Beginning balance, net investment

Share of net income for the year

( 1,041,482 )

Cumulative other comprehensive income (loss)

Net investment

Net investment at June 30, 2023

Ending balance, net

12 - INTANGIBLE ASSETS

1 unchanged sentence

SCHEDULE OF INTANGIBLE ASSETS

June 30, 2022

June 30, 2021

Product Licenses - Cost

5 unchanged sentences

( 25,743,121 )

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2022 and 2021

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 $ 1,587,670 will be amortized

over the next 1.25 years.

Amortization expense for the years ended June 30, 2022 and 2021 was $ 1,632,764 and $ 1,807,736 , respectively.

Future Amortization

amortization expense of intangible assets over the next five years is as follows:

SUMMARY OF ESTIMATED AMORTIZATION EXPENSE OF INTANGIBLE ASSETS

Period ended:

June 30, 2023

June 30, 2024

licenses include internally-developed software cost.

Product licenses are amortized on a straight-line basis over their respective lives,

and the unamortized amount of $ 127,931 will be amortized over one month.

Amortization expense for the years ended June 30, 2023 and 2022

was $ 1,171,641 and $ 1,632,764 , respectively.

13 – GOODWILL

2 unchanged sentences

OF GOODWILL ACQUIRED

June 30, 2021

June 30, 2022

Entity (Segment)

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”.

the goodwill analysis using an income approach.

14 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

1 unchanged sentence

OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

June 30, 2022

June 30, 2021

Accounts Payable

33 unchanged sentences

Subsidiary Finance Leases

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

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

The interest rate on these financings range from 5.0 % to 7.0 % as of June 30, 2022 and 2021, respectively.

(1) The Company finances

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

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

The interest rate on these financings range from 5.0 % to 7.9 % and 5.0 % to 7.0 % as of June 30, 2023 and 2022, respectively.

TECHNOLOGIES, INC.

1 unchanged sentence

30, 2023 and 2022

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 5.5 %

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.

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.

(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 9.5 % and 5.5 % as of June 30, 2023 and 2022, respectively.

The total outstanding balance as of

June 30, 2023 and 2022 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, 2023, NTE

was in compliance with this covenant.

(3) The Company’s

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

situation during the COVID-19 Pandemic.

This is a term loan payable in three years.

The availed facility amount is Rs.

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.

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.

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, 2022 and 2021.

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

nil or $ nil , at

June 30, 2023.

The availed facility amount is Rs.

86,887,974 or $ 423,101 , at June 30, 2022, which is shown as current.

The interest rate

for the loan was 3 % at June 30, 2023 and 2022.

(4) The Company’s

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

This is a revolving

loan that matures every six months.

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.

500,000,000 or $ 1,741,493 and Rs.

500,000,000 or $ 2,434,749 at June

30, 2023 and 2022, respectively.

The interest rate for the loan was 17.0 % and 3.0 % at June 30, 2023 and 2022, respectively.

(5) The Company’s

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

The total facility

amount is Rs.

53,600,000 or $ 186,688 and Rs.

53,600,000 or $ 261,005 , at June 30, 2023 and 2022, respectively.

The balance outstanding

at June 30, 2023 and 2022 was Rs.

The interest rate for the loan was 24.9 % and 14.0 % at June 30, 2023 and 2022, respectively.

These facilities require

2 unchanged sentences

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.

(6) The Company’s

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

This is a revolving

loan that matures every six months.

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, 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.

380,000,000 or $ 1,323,535 and Rs.

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

June 30, 2023 and 2022, respectively.

The interest rate for the loan was 18.0 % and 3.0 % at June 30, 2023 and 2022, respectively.

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, 2023, NetSol PK was in

compliance with these covenants .

(7) The Company’s

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

revolving loan that matures every nine months.

The total facility amount is Rs.

or $ 4,382,548

900,000,000 or $ 3,134,687 and Rs.

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

1 unchanged sentence

NetSol PK used 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, 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

700,000,000 or $ 2,438,089 and Rs.

700,000,000 or $ 3,408,648 , at June 30,

2023 and 2022, respectively.

The interest rate for the loan was 18.0 % and 3.0 % at June 30, 2023 and 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 June 30, 2023, NetSol PK used Rs.

92,194,774 or $ 321,113 of which $ 172,849 was shown as long term and $ 148,264 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.

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.

interest rate for the loan was ranging from 9.0 % to 16.0 % at June 30, 2023 and 2022.

(9) In March 2020,

the Company’s subsidiary, VLS, entered into a loan agreement with Investec Bank PLC.

The loan amount was £ 69,549 , or $ 88,037 ,

for a period of 5 years with monthly payments of £ 1,349 , or $ 1,708 .

As of June 30, 2023, the subsidiary has used this facility

up to $ 13,356 , which was shown as current.

The interest rate was 6.14 % at June 30, 2023.

(10) The Company’s

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

recorded in current maturities, at June 30, 2023 and 2022, respectively.

The interest rate on this financing ranged from 9.7 % to 12.7 %

as of June 30, 2023 and 2022.

TECHNOLOGIES, INC.

1 unchanged sentence

30, 2023 and 2022

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.

(11) 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.

Depreciation of assets under capital leases is included in depreciation expense for the years ended June 30,

2023 and 2022.

is the aggregate minimum future lease payments under capital leases as of June 30, 2023:

SCHEDULE OF AGGREGATE MINIMUM FUTURE LEASE PAYMENTS UNDER CAPITAL LEASES

OF AGGREGATE MINIMUM FUTURE LEASE PAYMENTS UNDER CAPITAL LEASES

Minimum Lease Payments

Within year 1

Within year 2

Within year 3

Total Minimum Lease Payments

Interest Expense relating to future periods

Interest Expense relating

to future periods

Present Value of minimum lease payments

Current portion

Current portion of loans and obligations under finance leases

Non-Current portion

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:

Loans and obligations under finance leases;

less current maturities

is the aggregate future long term debt payments, which consists of “Sale and Leasback Financing (8)” and “Term Finance

Facility (9)”, as of June 30, 2023:

SCHEDULE OF AGGREGATE FUTURE LONG TERM DEBT PAYMENTS

1 unchanged sentence

Within year 2

Within year 3

Total Loan Payments

10 unchanged sentences

SCHEDULE OF CONSOLIDATED PRE-TAX INCOME (LOSS)

Ended June 30,

US operations

$ ( 394,914 )

$ ( 1,140,443 )

Foreign operations

( 2,822,999 )

Net income before income

$ ( 3,217,913 )

components of the provision for income taxes are as follows:

OF COMPONENTS OF PROVISION FOR INCOME TAXES

Years Ended June 30,

Ended June 30,

State and Local

Provision for income taxes

Provision for income

reconciliation of taxes computed at the statutory federal income tax rate to income tax expense (benefit) is as follows:

Reconciliation

of effective income tax rate

SCHEDULE OF RECONCILIATION OF TAXES AT STATUTORY FEDERAL INCOME TAX RATE INCOME TAX EXPENSE BENEFITS

1 unchanged sentence

Income tax (benefit) provision at statutory rate

$ ( 675,762 )

State income (benefit) taxes, net of federal tax benefit

6 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

Ended June 30,

Net operating loss carry forwards

Net deferred tax assets

Valuation allowance for deferred tax assets

Valuation allowance

for deferred tax assets

( 8,466,078 )

35 unchanged sentences

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 $ Nil and $ 118,316 , respectively, and recorded as compensation

expense in the accompanying consolidated financial statements.

the years ended June 30, 2023 and 2022, the Company issued 58,317 and 1,985 shares of common stock respectively, for services rendered

2 unchanged sentences

value of $ 159,000 and $ 12,009 , respectively, and recorded as compensation expense in the accompanying consolidated financial statements.

the years ended June 30, 2022 and 2021, the Company issued 8,000 and 37,100 shares of common stock, respectively, to employees pursuant

to the terms of their employment agreements.

the year ended June 30, 2022, the Company issued 8,000 shares of common stock, to employees pursuant to the terms of their employment

These shares were valued at the fair market value of $ 41,050 , and recorded as compensation expense in the accompanying consolidated

financial statements.

the years ended June 30, 2023 and 2022, the Company issued 30,000 and 5,000 shares of common stock for services received from one of

These shares were valued at the fair market value of $ 67,500 and $ 19,525 , respectively.

and recorded as compensation expense in the accompanying consolidated financial statements.

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.

the year ended June 30, 2022, the Company purchased 22,510 shares of its common stock from the open market for cash proceeds of $ 100,106

at an average price of $ 4.45 per share, pursuant to the Company’s stock buy-back plan.

18 - INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN

64 unchanged sentences

Number of shares

Weighted Average Grant Date Fair Value ($)

Average Grant Date Fair Value ($)

Unvested, June 30, 2021

Forfeited / Cancelled

Unvested, June 30, 2022

Forfeited / Cancelled

Unvested, June 30, 2023

the years ended June 30, 2023 and 2022, the Company recorded compensation expense of $ 159,000 and $ 44,053 , respectively.

19 – COMMITMENTS AND CONTINGENCIES

time to time, the Company is subject to legal proceedings, claims, and litigation arising in the ordinary course of business including

tax assessments.

The Company defends itself vigorously against any such claims.

When (i) it is probable that an asset has been impaired

or a liability has been incurred and (ii) the amount of the loss can be reasonably estimated, the Company records the estimated loss.

The Company provides disclosure in the notes to the consolidated financial statements for loss contingencies that do not meet both conditions

if there is a reasonable possibility that a loss may have been incurred that would be material to the financial statements.

judgment is required to determine the probability that a liability has been incurred and whether such liability is reasonably estimable.

The Company bases accruals on the best information available at the time, which can be highly subjective.

The final outcome of these

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

average grant date fair value is determined by the Company’s closing stock price on the grant date.

TECHNOLOGIES, INC.

22 unchanged sentences

OF IDENTIFIABLE ASSETS

June 30, 2022

June 30, 2021

Identifiable assets:

1 unchanged sentence

North America

Asia - Pacific

Identifiable assets

following table presents a summary of investments under the equity method as of June 30, 2023 and 2022:

OF INVESTMENT UNDER EQUITY METHOD

June 30, 2022

June 30, 2021

SUMMARY OF INVESTMENT UNDER EQUITY METHOD

Investment in associates under equity method:

Corporate headquarters

Asia - Pacific

Equity method investment

following table presents a summary of revenue streams by segment for the years ended June 30, 2023 and 2022:

SUMMARY OF REVENUE STREAMS

North America

TECHNOLOGIES, INC.

2 unchanged sentences

following table presents a summary of operating information for the years ended June 30:

OF OPERATING INFORMATION

SUMMARY OF OPERATING INFORMATION

For the Years

Ended June 30,

Revenues from unaffiliated customers:

North America

Asia - Pacific

Revenue from unaffiliated

Revenue from affiliated customers

Asia - Pacific

from affiliated

Intercompany revenue

Asia - Pacific

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

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

Corporate headquarters

$ ( 501,560 )

$ ( 1,027,044 )

North America

( 1,407,252 )

Asia - Pacific

( 2,786,373 )

$ ( 4,144,473 )

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

$ ( 4,144,473 )

Depreciation and amortization:

North America

Asia - Pacific

Depreciation and amortization

1 unchanged sentence

Corporate headquarters

Asia - Pacific

North America

Interest expense

2 unchanged sentences

North America

Asia - Pacific

Income tax expense

5 unchanged sentences

For the Years

Ended June 30,

Capital expenditures:

North America

Asia - Pacific

Capital expenditures

2 unchanged sentences

SCHEDULE OF GEOGRAPHIC INFORMATION

June 30, 2022

June 30, 2021

Long-lived Assets

Pakistan & India

1 unchanged sentence

Other Countries

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2023 and 2022

in the table below is the geographic information of total revenues by country for the years ended June 30, 2023 and 2022.

OF RECONCILIATION OF REVENUE

& New Zealand

Revenues 2023

Pakistan & India

Australia & New Zealand

Other Countries

North America:

6 unchanged sentences

Asia-Pacific:

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2022 and 2021

21 – NON-CONTROLLING INTEREST IN SUBSIDIARY

2 unchanged sentences

SCHEDULE OF BALANCE OF NON-CONTROLLING INTEREST

Non-Controlling Interest %

Non-Controlling Interest at

Non-Controlling

June 30, 2023

NetSol-Innovation

Non-Controlling Interest %

Non-Controlling Interest at

Non-Controlling

June 30, 2022

NetSol-Innovation

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2023 and 2022

September 2022, the Company’s subsidiary, Otoz, issued 191,011 shares to an employee per the employment agreement resulting in

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

The effective shareholding of the non-controlling interest for Otoz Thai

increased to 10.95 %.

June 2023, the Company’s subsidiary, Otoz, repurchased the 191,011 shares from the same employee per the employment agreement,

after his resignation, resulting in a decrease of non-controlling interest from 10.94 % to 5.59 %.

The effective shareholding of the non-controlling

interest for Otoz Thai decreased to 5.60 %.

the year ended June 30, 2022, NetSol PK purchased 2,000,000 shares of common stock from open market for $ 950,352 .

1 unchanged sentence

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

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

NetSol PK and OTOZ.

SCHEDULE OF CHANGE IN OWNERSHIP INTEREST

For the Years

Ended June 30,

Net income (loss) attributable to NetSol

income (loss) attributable to NetSol

$ ( 5,243,748 )

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

$ ( 851,156 )

Transfer (to) from non-controlling

Increase in paid-in capital

for issuance of 191,011 shares of OTOZ Inc common stock

Decrease in paid-in capital

for purchase of 191,011 shares of OTOZ Inc common stock

in paid-in capital for purchase of 2,000,000 shares of common stock of NetSol PK from Open Market

Net transfer (to) from

non-controlling interest

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

$ ( 5,241,390 )

$ ( 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