What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-07 compared with 2023-05-11 · 380 added, 407 removed, 250 unchanged (76% of the section changed)

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following discussion is intended to assist in an understanding of the Company’s financial position and results of operations for

the three months ended March 31, 2023.

The following discussion should be read in conjunction with the information included within our

Annual Report on Form 10-K for the year ended June 30, 2022, and the Condensed Consolidated Financial Statements and notes thereto included

elsewhere in this Quarterly Report on Form 10-Q.

the three months ended September 30, 2023.

The following discussion should be read in conjunction with the information included within

our Annual Report on Form 10-K for the year ended June 30, 2023, and the Condensed Consolidated Financial Statements and notes thereto

included elsewhere in this Quarterly Report on Form 10-Q.

website is located at www.netsoltech.com , and our investor relations website is located at https://ir.netsoltech.com .

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With constant innovation

being a major part of NETSOL’s DNA, we have enabled NFS Ascent ® deployment on the cloud with several implementations

already live and some underway.

This shift to the cloud will enable NETSOL’s new customers to opt for a subscription-based pricing

model rather than the traditional licensing model.

being a major part of our DNA, we have enabled NFS Ascent ® deployment on the cloud with several implementations already

live and some underway.

This shift to the cloud will enable our new customers to opt for a subscription-based pricing model rather than

the traditional licensing model.

clients include blue chip organizations, Dow-Jones 30 Industrials, Fortune 500 manufacturers, financial institutions, global vehicle

manufacturers and enterprise technology providers, all of which are serviced by NETSOL’s strategically placed support and delivery

locations around the globe.

manufacturers and enterprise technology providers, all of which are serviced by our strategically placed support and delivery locations

around the globe.

in 1997, NetSol is headquartered in Los Angeles County, California.

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of its portfolio of solutions and services, it continues to maintain regional offices in the following locations:

Angeles and Austin, Texas Area

Metropolitan area and Horsham in the UK

California and Austin, Texas

Metropolitan area and Horsham, Flintshire

Karachi, Bangkok, Beijing, Shanghai, Jakarta and Sydney

believes that our strong technology solutions offer our customers a return on their investment and allows us to thrive in a hyper competitive

believe that our strong technology solutions offer our customers a return on their investment and allows us to thrive in a hyper competitive

and mature global marketplace.

Our solutions are bolstered by our people.

NETSOL believes that people are the drivers of success;

We believe that people are the drivers of success;

we invest heavily in our hiring, training and retention of top-notch staff to ensure not only successful selling, but also the ongoing

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Taken together, this “selling and attentive servicing” approach creates a distinctive advantage

for NETSOL and a unique value for its customers.

NETSOL continues to underpin its proven and effective business model which is a combination

of careful cost arbitrage, subject matter expertise, domain experience, scalability and proximity with its global and regional customers.

for us and a unique value for our customers.

We continue to underpin our proven and effective business model which is a combination of

careful cost arbitrage, subject matter expertise, domain experience, scalability and proximity with our global and regional customers.

primary offerings include the following:

Ascent ® , the Company’s next generation platform, offers a technologically advanced solution for the auto and equipment

finance and leasing industry.

NFS Ascent’s ® architecture and user interfaces were designed based on the Company’s

collective experience with global Fortune 500 companies over the past 40 years combined with UX design concepts.

The platform’s

framework allows auto captive and asset finance companies to rapidly transform legacy driven technology into a state-of-the-art IT and

business process environment.

At the core of the NFS Ascent ® platform, is a lease accounting and contract processing engine,

which allows for an array of interest calculation methods, as well as robust accounting of multi-billion-dollar lease portfolios.

Ascent ® , with its distributed and clustered deployment across parallel application and high-volume data servers, enables

finance companies to process voluminous data in a hyper speed environment.

NFS Ascent ® has been developed using the latest

tools and technologies and its n-tier SOA architecture allows the system to greatly improve a myriad of areas including, but not limited

to, scalability, performance, fault tolerance and security.

Our premier, next generation solution NFS Ascent ® is now also

available on the cloud via SaaS/subscription-based pricing.

With swift, seamless deployments and easy scalability, it is an extremely

adaptive retail and wholesale platform for the global finance and leasing industry.

This cloud-version of NFS Ascent ®

is offered via flexible, value-driven subscription-based pricing options without the need to pay any upfront license fees.

Digital is a combination of our core strengths, domain, and technology.

Our insight into the evolving landscape along with our valuable

experience enables us to define sound digital transformation strategies and compliment them with smart digital solutions so our customers

always remain competitive and relevant to the dynamic environment.

Our digital transformation solutions are extremely robust and can

be used with or without our core, next-gen solution (NFS Ascent ® ) to effectively augment and enhance our customer’s

NFS Digital includes Self-Point of Sale, Mobile Account, Mobile Point of Sale, Mobile Dealer, Mobile Auditor, Mobile Collector

and Mobile Field Investigator.

Digital Auto Retail

provides a white-labelled SaaS platform to OEMs, auto-captives, dealers and start-ups that helps them launch short and long-term on-demand

mobility models (car-share and car subscription) and digital retail in minimum time.

Our white-label, turn-key platform helps dealers

to make the move into digital era by offering an end-to-end car buying experience completely online.

Digital auto-retail is not a one-size-fits-all.

Otoz provides a flexible, configurable and scalable turn-key platform that helps define, launch and scale a variety of retail products

(finance, lease, buy, etc.).

Otoz platform empowers dealers to compete in digital era by addressing a range of customer segments with

varied needs.

Otoz powerful Application Program Interface (API) based architecture allows OEMs, auto-captives and dealerships to integrate with a plethora

of providers to offer an end-to-end Omni-channel digital car finance and lease experience.

Out-of-the-box APIs by Otoz help dealers and

auto-captives connect with ecosystem partners which are crucial for running their auto retail business.

It includes, finance and insurance

products, trade-in tools, fraud checks, CRM system, websites (Tier 1 – Tier 3), marketing toolkit, inventory feeds, Know Your Customers

(KYC), payment processors, and vehicle delivery providers amongst others.

In addition, Otoz is equipped with smart lead generation and

product analytics capabilities.

It empowers dealers with the capability to convert qualified leads and never lose contact with customers.

The product analytics capability allows us to improve the customer journey by addressing friction points, herein improving customer experience

and conversions – a win-win scenario for dealers and customers.

fully digital, white label platform for lease, finance, and cash transactions that delivers a frictionless customer experience.

platform consists of two components the Dealer Tool and the Customer Application (APP) of a Dealer Tool which provides for a myriad of

services including account creation, order management work queue, user roles and rights, tax configurator, customer KYC reports, vehicle

delivery scheduling, payment gateways and inventory management, finance and insurance products feed and prioritization, dealer fee management

and ecosystem APIs.

The Customer App permits the dealer to work with the customer to get a vehicle via cash, finance or lease, manage

vehicle delivery and pick-up scheduling, buy finance and insurance products, buy accessories, paperless license checks, personalized

pricing, vehicle options, trade-in valuation, credit application and decision, paperless contracts and e-signing, digital payments and

a deal builder.

Company continues to support its North America and European legacy systems including LeasePak and LeaseSoft.

below are a few of NetSol’s highlights for the quarter ended March 31, 2023:

signed a new agreement with Kubota Australia Pty Ltd (“Kubota”) to implement our NFS Ascent ® product.

The contract relates to its operations in Australia and is expected to generate revenues of $5 million over 5 years.

went live with the Company’s API-first cloud-based calculation engine, Flex™, for Haydock Finance, a business finance provider

in the United Kingdom.

continued our successful implementations with DFS by going live in Japan with our NFS Ascent ® CMS system.

went live with its 38th dealer and has dealers in 16 states.

effectively generated approximately $1.0 million by successfully implementing change requests from various customers across multiple

achieved the status of API Gateway Delivery Partner with Amazon Web Services (AWS).

With this extended APN partnership, we will have

access to AWS API Gateway, a fully managed service that makes it easy for developers to create, publish, maintain, monitor, and secure

APIs (application programming interfaces) at any scale.

This partnership is expected to help the business generate new sales for

this growth vertical.

the complete finance and leasing cycle starting from quotation origination through contract settlements, NFS Ascent ® is

designed and developed for a highly flexible setting and can deal with multinational, multi-company, multi-asset, multi-lingual, multi-distributor

and multi-manufacturer environments.

The solution fully automates the entire financing/leasing cycle for companies of any size, including

those with multi-billion-dollar portfolios.

NFS Ascent ® empowers financial institutions to effectively manage their complex

lending portfolios, enabling them to thrive in hyper-competitive global markets.

Ascent ® is built on cutting-edge, modern technology that enables auto, equipment and big-ticket finance companies, alongside

banks, to run their retail and wholesale finance business with ease.

With comprehensive domain coverage and powerful configuration engines,

it is well architected to empower finance and leasing companies with a platform that supports their growth in terms of business volume

and transactions.

next generation platform offers a technologically advanced solution for the asset finance and leasing industry.

NFS Ascent’s ®

architecture and user interfaces were designed based on our collective experience with blue chip organizations and global Fortune

500 companies over the past 40 years combined with modern UX design concepts.

The platform’s framework allows auto captive and

asset finance companies to rapidly transform legacy driven technology into a state-of-the-art IT and business process environment.

the core of the NFS Ascent ® platform, is a lease accounting and contract processing engine, which allows for an array

of interest calculation methods, as well as robust accounting for multi-billion-dollar lease portfolios in compliance with various regulatory

NFS Ascent ® , with its distributed and clustered deployment across parallel application and high-volume data

servers, enables finance companies to process voluminous data in a hyper speed environment.

premier solution has been developed using the latest tools and technologies and its n-tier SOA architecture allows the system to greatly

improve a myriad of areas including, but not limited to, scalability, performance, fault tolerance and security.

empowers users with:

in overall productivity within the delivery organization:

features of the integrated Business Process Manager, Workflow Engine, Business Rule Engine and Integration Hub provide flexibility

to our clients allowing them to configure certain parts of the application themselves rather than requesting customization.

NFS Ascent ® platform and the SOA architecture allow us to develop portals and mobile applications quickly by utilizing

our existing services.

n-tier architecture allows us to intelligently distribute processing and eases application maintenance.

The loose coupling between

various modules and layers reduces the risk of regression in other parts of the system as a result of changes made in one part of

the system and follows proven and accepted SOA principles.

customer satisfaction:

Ascent ® and NFS Digital empower not only the finance company and dealerships, but the end customer as well with self-service

digital tools allowing a seamless customer experience throughout the customer journey from origination through contract maturity.

ASCENT ® CONSTITUENT APPLICATIONS

Point of Sale (Omni POS)

highly agile, easy-to-use, web-based application - also accessible through mobile devices - Ascent’s Omni POS system delivers an

intuitive user experience, with features that enable rapid data capture.

Information captured at the point of sale can be made available

to anyone in an organization at any point in the lifecycle of each transaction.

Management System (CMS)

Contract Management System (CMS) is a powerful, highly agile, functionally rich application for managing and maintaining detailed credit

contracts throughout their lifecycle – from pre-activation and activation through customer management, asset financial management,

billing and collections, finance and accounting, restructuring and maturity.

Finance System (WFS)

Ascent Wholesale Finance System (WFS) provides a powerful, seamless and efficient system for automating and managing the entire lifecycle

of wholesale finance.

With floor planning, dealer and inventory financing, it is ideal for a culture of collaboration.

Dealers, distributors,

partners and anyone in the supply chain are empowered to realize the benefits of financing – and leverage the advantages of real-time

business intelligence.

The system also supports asset and non-asset-based financing.

Auditor Access System (DAAS)

is a web-based solution that can be used in conjunction with WFS or any third-party wholesale finance system.

It addresses the needs

of dealer, distributor, and auditor access in a wholesale financing arrangement.

Ascent ® deployed on the cloud

premier, next generation solution NFS Ascent ® is also available on the cloud.

With swift, seamless deployments and easy

scalability, it is an extremely adaptive retail and wholesale platform for the global finance and leasing industry.

This cloud-version

of NFS Ascent ® is offered via flexible, value-driven subscription-based pricing options without the need to pay any upfront

license fees.

Clients further benefit from a rapid deployment process and the ability to scale on demand.

is the pioneer in the global finance and leasing industry providing a full suite of digital transformation solutions.

NFS Digital is

a combination of our core strengths, domain, and technology.

Our insight into the evolving landscape together with our valuable experience

led us to define sound digital transformation strategies and compliment them with smart digital solutions so that our customers always

remain competitive and relevant to the dynamic environment.

Our digital transformation solutions are extremely robust and can be used

with or without our core, next-gen solution (NFS Ascent ® ) to effectively augment and enhance our customer’s ecosystem.

Self POS portal allows customers to go through the complete buying and financing process online and on their mobile devices including

car configuration, generating quotations, and filling out applications.

It is the ultimate origination application that enables users

to compare, select and configure an asset using a mobile device anywhere, at any time and submit an accompanying financial product

is a powerful, self-service mobile solution.

It empowers the dealer with a powerful backend system and allows the customer to setup

a secure account and view information 24/7 to keep track of contract status, resolve queries and make payments, reducing inbound

calls for customer queries and improving turnaround time for repayments.

Point of Sale

mPOS application is a web and mobile-enabled platform featuring a customizable dashboard along with menu selling, application submission,

loan calculator, work queues and detailed reporting.

mPOS empowers the dealer to make the origination process quick and seamless,

increasing overall productivity and system-wide efficiency.

provides more visibility and control over inventories – with minimal effort.

Dealers can view their use of floor plan facility,

stock status and financial conditions, while entering settlement requests or relocating assets.

schedules visits, records audit exceptions and tracks assets for higher levels of transparency.

It also enables the auditor to conduct

audits and submit results in real-time through quick audit processing tools, providing visibility and saving significant time.

empowers collections teams to do more, with an easy-to-use interface and intelligent architecture.

The tool exponentially increases

the productivity of field teams by enabling them to carry out all collection related tasks on the go.

Field Investigator

using Mobile Field Investigator (mFI), the applicant has access to powerful features that permit detailed applicant field verifications

The application features a reporting dashboard that displays progress stats, action items and the latest notifications,

enabling the client to achieve daily goals while tracking performance.

Digital Auto Retail and Mobility Orchestration

provides a white-label SaaS platform to OEMs, finance companies, dealers, and start-ups that enables short and long-term on-demand

mobility models (subscriptions, rental and car-sharing) and digital retail.

turn-key platform helps automotive companies make a move into the digital era, addressing a range of customer segments with evolving

needs by offering them a seamless, omni-channel, end-to-end car buying and usage experience.

It enables both direct-to-consumer transactions

as well as traditional dealer models with the option to add peer-to-peer marketplace functionalities for the future of EV pay-per-use

and mobility orchestration.

auto-retail is not a one-size-fits-all.

Otoz TM offers a flexible, configurable, and scalable platform along with a proven

launch strategy framework for auto companies that intend to launch and grow digital retail and mobility businesses quickly and seamlessly.

is built on state-of-the-art technology, offering open Application Programming Interfaces (APIs) and ecosystem partner integrations

that are crucial to digital retail and mobility operations including finance and insurance providers, trade-in tools, KYC and fraud detection

tools, CRM systems, website providers (Tier 1 – Tier 3), marketing toolkits, inventory feeds, pricing engines, tax engine, payment

processors, an insurance marketplace and vehicle delivery logistics providers.

addition, Otoz TM is equipped with intelligent lead generation and product analytics capabilities, empowering dealerships with

the tools to track customer journeys, personalize customer engagements, and convert qualified leads.

fully digital, white-label platform for digital auto retail and mobility orchestration that delivers an intuitive and elegant user experience,

both online and offline.

expands into a comprehensive in-life subscription and rental platform that empowers in-life and end-of-life management of such

The platform’s seamless handling of complex tax rules and contract management processes are compliant with local and

state standards for jurisdictions it operates in across the U.S.

platform consists of two portals:

management work queue

roles and rights

delivery scheduling

and insurance products feed and prioritization

Accessories/add-on

management and association

fee management

search and selection

builder and personalized pricing for purchase, lease, finance, subscription, and rentals

Dealer-Customer-Chat

finance and insurance products including collision & liability insurance via integrated provider marketplaces

checks (paperless)

options and finance and insurance products

application and decision

contracts and e-signing

delivery and pick-up scheduling

introduced AppexNow - the first marketplace for API-first products specifically for the global credit, finance, and leasing industry.

Two products have been launched under the umbrella of the AppexNow marketplace until now;

i.e., Flex and Hubex.

NetSol will introduce

and launch further products and services under this marketplace in the future.

first product offering from the AppexNow marketplace, Flex is an API-based, ready-to-use calculation engine.

It is a pure play SaaS product

that is cloud-based and can be integrated seamlessly into an organization’s products, services, and ecosystem.

The calculation

engine intelligently adapts to demand by monitoring usage to maintain reliable and predictable performance at desired costs.

one-stop solution that guarantees precise calculations at all stages of the contract lifecycle through various calculation types.

is a comprehensive solution which creates an ecosystem of value across multiple functions, systems and industries to fuel growth and

propel businesses into the future by increasing delivery efficiency and product management, centralization through a connected ecosystem

resulting in a higher ROI and a larger market share.

proves versatility by covering all the calculation aspects ranging from the pricing for the end customer at inception, in-life financial

modifications, the re-creation of the repayment plan, termination, amortizations/re-amortizations, among other calculation types.

the calculations are parameter-driven, which helps perform simple, multi-dimensional, or complex calculations based on the needs.

is an API library that enables companies to standardize all their API integration procedures across multiple API services through a single

Hubex is NetSol’s second product offering from the AppexNow marketplace following Flex.

addition to traditional lending companies, Hubex can also streamline the operations of dealerships, vendors, and consultants through

an API library.

With a ready-to-use service, Hubex makes it easy for businesses to seamlessly connect with multiple APIs and achieve

their desired outcomes.

Pre-integrated services in the Hubex library include, but are not limited to, payment processing, bank account

authentication, finance and insurance products, fraud check, KYC service, driver license verification, address validation, vehicle valuation

and notification service.

offer professional services to organizations in different regions to enable them to meet their business objectives.

These services primarily

consist of technical consultancy, web development, app development, digital marketing, cloud services, outsourcing and co-sourcing.

to our professional services offerings, our highly skilled and experienced professionals include skilled software programmers, well-versed

business analysists, competent quality assurance engineers, technical and solution architects, project managers, cloud native developers

and architects, mobile/web app developers and automation specialists.

enable businesses to employ the industry’s best talent to help them develop and refine their technology strategy, innovate, execute

their roadmap, and optimize service quality.

have expanded our footprint in the cloud services domain by offering services to the AWS community.

We aim for our cloud services to

be well recognized, expanding our reach to relevant prospects.

Since AWS is the most comprehensive and highly adopted cloud offering,

we are leveraging its power to ensure lower costs, increased agility, a secure environment, and innovative solutions across all domains.

AWS customer offerings include:

analytics, data pipeline and big data services;

application modernization services;

database migration

and modernization;

development operations;

managed services;

and, information security services.

dedicated team is under the leadership of Dr.

Ali Ahmed, Chief Data Scientist at NetSol, to develop artificial intelligence and machine

learning solutions.

With experience in machine learning, scientific computing and computer vision, Dr.

Ahmed has extensive experience

in developing and implementing algorithms for industrial solutions in predictive maintenance.

AI team seeks to deploy AI solutions leveraging cutting-edge technologies to enable clients to optimize production, decrease downtime

and provide a holistic view of their business processes.

below are a few of NetSol’s highlights for the quarter ended September 30, 2023:

Company renegotiated to extend the NFS Ascent license term for an existing client in Thailand for another 3 years.

The extension

generated approximately $1.1 million in revenues.

Company implemented modifications requested by a number of its existing customers across multiple geographies to generate over $1.1

million in revenues.

Company concluded the implementation re-planning activity with one of its existing clients to generate nearly $1.7 million in revenues

on top of the previously contracted revenues.

Company onboarded two new asset finance companies to use its recently launched product FLEX, which will further strengthen the recurring

revenues of the business.

Company concluded its discussions with an existing customer to generate additional service revenue of approximately $1.9 million

across the APAC region.

Company began a professional services project with the finance company of a current customer in China.

This contract is expected

to generate approximately $1 million in revenues for the business.

Company signed a professional services contract with a renowned IT consultancy firm based in the US which would generate approximately

$300K in revenues over the term of the contract.

has identified the following material trends affecting NetSol.

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sales volumes are expected to reach approximately 15 million units, an estimated increase of 8% from the projected 2022 levels.

inflation rate over the last few months to approximately 5% annually.

elimination of travel related COVID-19 testing increases opportunities to meet face to face with current and potential customers.

Ascent ® SaaS offerings and major on-premise license offerings are gaining traction in both mid and large size auto

captives in the North American and European markets.

auto and banking sectors continue momentum towards increased mobility and digital solutions according to Forbes and Insider Intelligence

inflation rate over the last few months to approximately 3.7% in 2023.

market remains strong and resilient for NetSol to continue investing in building local teams for its core offerings.

Chinese car market is expected to maintain its position as the world’s largest and fastest growing, projecting 10% sales

growth to 25.5 million units, with electric vehicles (EVs) representing nearly 35% of new sales.

Government incentives, reduced car

taxes, and preferential financing rates contributed to an 8.8% increase in Chinese auto sales in the first half of 2023, with total

vehicle sales, including trucks and buses, rising by 9.8% to 13.2 million.

China Pakistan Economic Corridor (CPEC) investment, initiated by China, has exceeded $65 billion investment, from the originally

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rate to Pakistan as a short-term loan.

auto sector remains steady with government year-end incentives and customers requesting additional services reflecting the resilience

of our offerings.

has been a positive trend in business development activities in the US and China as both countries are interested in a stable and

bilateral relationship.

overall size of the mobility market in the Europe and the United States is projected to increase over $425 billion combined, by 2035

or a compound CAGR of 5% from 2022.

(Deloitte Global Automotive Mobility Market Simulation Tool).

global automotive finance market accounted for $245 billion in 2022 and is expected to more than double by 2035 at a CAGR of 7.4%

according to Precedence Research.

conflict escalating in the Middle East region has disturbed the entire area, which could cause higher global inflation amid growing

concerns over sharp rise in oil prices (Guardian, October 18, 2023).

European Union Real GDP growth is at 0.7% annual growth rate per the World Economic Report October, 2023.

economic conditions in our geographic markets;

geopolitical tensions, including trade wars, tariffs and/or sanctions in geographic

Global pandemics, including COVID-19;

and, global conflicts or disasters that impact the global economy or one or more sectors

of the global economy.

inflation, geopolitical tensions, including trade wars, tariffs and/or sanctions in

geographic areas;

and, global conflicts or disasters that impact the global economy or one or more sectors of the global economy.

global recession fear impacts the future expansions and budgets in every country and every sector.

The World Bank forecasts that

global growth will slow to 1.7% in 2023, down from 3% forecasted last June.

interest rate increases by the U.S.

Federal Reserve Board in 2023 restricting buying power for consumers.

negative currency impact on our financial statements due to the devaluation of the Pakistan Rupee and the British Pound Sterling

in comparison to the US Dollar.

monetary, and economic challenges and higher inflation rate than other regional countries impacting Pakistan exports.

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and hostility between Russia and Ukraine continue to foster global uncertainty.

decline by over 20% in 2022 of the U.S.

markets including the NASDAQ index and the Russell 2000 index limiting access to capital

Russell 2000 index, a major benchmark for U.S.

stocks, turned negative for the year in late September 2023.

The index’s year-to-date

performance is a loss of 0.2%.

from the office might not return to pre-pandemic levels which may affect employee collaboration potentially lessening efficiency.

Pakistan political and economic environment will likely remain unsteady until new elections are called.

tensions between the U.S.

and China are causing some American companies to pull out of China and move their supply chain elsewhere.

(Business Insider, Aug.

IN FINANCIAL CONDITION

Ended March 31, 2023 Compared to the Quarter Ended March 31, 2022

following table sets forth the items in our unaudited condensed consolidated statement of operations for the three months ended March

Ended September 30, 2023 Compared to the Quarter Ended September 30, 2022

following table sets forth the items in our unaudited condensed consolidated statement of operations for the three months ended September

30, 2023 and 2022 as a percentage of revenues.

For the Three Months

Ended March 31,

Ended September 30,

Net Revenues:

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Cost of revenues

Salaries and consultants

Depreciation and amortization

Total cost of revenues

Operating expenses:

Selling and marketing

Depreciation and amortization

General and administrative

Selling, general and administrative

Research and development cost

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Other income and (expenses)

Gain (loss) on sale of assets

Interest expense

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Gain (loss) on foreign currency exchange transactions

Share of net loss from equity investment

Other income (expense)

Total other income (expenses)

Net income before income taxes

Net income (loss) before income taxes

Income tax provision

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(Unfavorable)

Ended March 31,

Ended September 30,

Net Revenues:

$ (1,303,437 )

Cost of revenues:

2 unchanged sentences

$ (1,896,191 )

revenues for the three months ended March 31, 2023 and 2022 are broken out among the segments as follows:

revenues for the three months ended September 30, 2023 and 2022 are broken out among the segments as follows:

North America

fees for the three months ended March 31, 2023 were $1,982,985 compared to $1,620,827 for the three months ended March 31, 2022 reflecting

an increase of $362,158 with an increase in constant currency of $479,420.

During the three months ended March 31, 2023, we recognized

approximately $1,918,000 related to a new NFS Ascent ® agreement with Kubota in Australia.

fees for the three months ended September 30, 2023 were $1,280,449 compared to $249,960 for the three months ended September 30, 2022

reflecting an increase of $1,030,489 with an increase in constant currency of $1,250,079.

During the three months ended September 30,

2023, we recognized approximately $1,142,000 related to the license renewal with an existing customer.

During the three months ended

March 31, 2022, we recognized approximately $1,117,000 related to a new agreement with DTFS for the sale of both our legacy and Ascent

product ® for their new business segment in the South African market and $465,000 from the DFS contract.

and support fees for the three months ended March 31, 2023 were $6,656,082 compared to $6,554,540 for the three months ended March 31,

September 30, 2022, we recognized approximately $188,000 related to a new agreement with the Government of Khyber Pakhtunkhwa for the

sale of our Ascent ® product.

and support fees for the three months ended September 30, 2023 were $6,512,243 compared to $6,016,834 for the three months ended September

30, 2022 reflecting an increase of $495,409 with an increase in constant currency of $499,159.

Subscription and support fees begin once a

customer has “gone live” with our product.

Subscription and support fees begin once

a customer has “gone live” with our product.

Subscription and support fees are recurring in nature, and we anticipate these

fees to gradually increase as we implement both our NFS legacy products and NFS Ascent ® .

income for the three months ended March 31, 2023 was $4,867,322 compared to $6,634,459 for the three months ended March 31, 2022 reflecting

a decrease of $1,767,137 with a decrease in constant currency of $1,452,128.

The decrease is primarily due to the decrease in services

provided for ongoing implementations and additional change requests.

gross profit was $4,705,029, for the three months ended March 31, 2023 compared with $5,834,570 for the three months ended March 31,

This is a decrease of $1,129,541 with a decrease in constant currency of $3,424,282.

income for the three months ended September 30, 2023 was $6,449,489 compared to $6,439,325 for the three months ended September 30, 2022

reflecting an increase of $10,164 with an increase in constant currency of $76,595.

gross profit was $6,162,067, for the three months ended September 30, 2023 compared with $4,251,997 for the three months ended September

This is an increase of $1,910,020 with an increase in constant currency of $410,306.

The gross profit percentage for the three

months ended March 31, 2023 also decreased to 34.8% from 39.4% for the three months ended March 31, 2022.

months ended September 30, 2023 also increased to 43.3% from 33.5% for the three months ended September 30, 2022.

The cost of sales was

for the three months ended March 31, 2023 compared to $8,975,256 for the three months ended March 31, 2022 for a decrease of $173,896

and on a constant currency basis an increase of $2,716,350.

As a percentage of sales, cost of sales increased from 60.6% for the three

months ended March 31, 2022 to 65.2% for the three months ended March 31, 2023.

and consultant fees decreased by $303,084 from $6,756,898 for the three months ended March 31, 2022 to $6,453,814 for the three months

ended March 31, 2023 and on a constant currency basis increased by $1,741,371.

The increase on a constant currency basis is due to annual

salary raises and new hirings.

As a percentage of sales, salaries and consultant expense increased from 45.6% for the three months ended

March 31, 2022 to 47.8% for the three months ended March 31, 2023.

expense was $724,431 for the three months ended March 31, 2023 compared to $256,730 for the three months ended March 31, 2022 for an

increase of $467,701 with an increase in constant currency of $700,226.

The increase in travel expense is due to the increase in travel

as countries have been lifting travel restrictions.

and amortization expense decreased to $602,829 compared to $741,587 for the three months ended March 31, 2022 or a decrease of $138,758

and on a constant currency basis an increase of $139,936.

costs decreased to $1,020,286 for the three months ended March 31, 2023 compared to $1,220,041 for the three months ended March 31, 2022

or a decrease of $199,755 and on a constant currency basis an increase of $134,817.

expenses were $5,635,464 for the three months ended March 31, 2023 compared to $6,373,875, for the three months ended March 31, 2022

for a decrease of 11.6% or $738,411 and on a constant currency basis an increase of 7.7% or $490,388.

As a percentage of sales, it decreased

from 43.0% to 41.7%.

The increase in operating expenses on a constant currency basis was primarily due to increases in salaries and wages

and research and development costs, offset by decreases in selling and marketing expense and other general and administrative expenses.

expenses were $1,643,853 for the three months ended March 31, 2023 compared to $2,074,873, for the three months ended March 31, 2022

for a decrease of $431,020 and on a constant currency basis a decrease of $57,742.

and administrative expenses were $3,509,212 for the three months ended March 31, 2023 compared to $3,841,655 for the three months ended

March 31, 2022 or a decrease of $332,443 or 8.7% and on a constant currency basis an increase of $304,475 or 7.9%.

$8,080,164 for the three months ended September 30, 2023 compared to $8,454,122 for the three months ended September 30, 2022 for a decrease

of $373,958 and on a constant currency basis an increase of $1,165,567.

As a percentage of sales, cost of sales decreased from 66.5%

for the three months ended September 30, 2022 to 56.7% for the three months ended September 30, 2023.

and consultant fees decreased by $128,592 from $6,086,735 for the three months ended September 30, 2022 to $5,958,143 for the three months

ended September 30, 2023 and on a constant currency basis increased by $962,826.

The increase on a constant currency basis is due to

annual salary raises.

As a percentage of sales, salaries and consultant expense decreased from 47.9% for the three months ended September

30, 2022 to 41.8% for the three months ended September 30, 2023.

expenses were $660,367 for the three months ended September 30, 2023 compared to $392,345 for the three months ended September 30, 2022

for an increase of $268,022 with an increase in constant currency of $389,142.

The increase in travel expense is due to the increase

in travel as countries have been lifting travel restrictions.

As a percentage of sales, travel expense increased from 3.1% for the three

months ended September 30, 2022 to 4.6% for the three months ended September 30, 2023.

and amortization expense decreased to $392,983 compared to $654,049 for the three months ended September 30, 2022 or a decrease of $261,066

and on a constant currency basis a decrease of $140,417.

The decrease is primarily attributed to the full amortization of capitalized software costs

in the quarter ending September 30, 2023.

costs decreased to $1,068,671 for the three months ended September 30, 2023 compared to $1,320,993 for the three months ended September

30, 2022 or a decrease of $252,322 and on a constant currency basis a decrease of $45,984.

expenses were $5,811,388 for the three months ended September 30, 2023 compared to $6,148,188, for the three months ended September 30,

2022 for a decrease of $336,800 and on a constant currency basis an increase of $284,862.

As a percentage of sales, it decreased from

48.4% to 40.8%.

The increase in operating expenses on a constant currency basis was primarily due to increases in selling and marketing

expenses, salaries and wages, professional services, and provision for doubtful debts, offset by a decrease in other general and administrative

expenses were $1,708,865 for the three months ended September 30, 2023 compared to $1,762,177, for the three months ended September 30,

2022 for a decrease of $53,312 and on a constant currency basis an increase of $155,473.

and administrative expenses were $3,586,301 for the three months ended September 30, 2023 compared to $3,725,430 for the three months

ended September 30, 2022 or a decrease of $139,129 and on a constant currency basis an increase of $161,886.

During the three months

ended March 31, 2023, salaries decreased by approximately $52,981 and increased $389,564 on a constant currency basis, and other general

and administrative expenses decreased approximately $308,825 or decreased by $129,617 on a constant currency basis.

and development cost was $302,262 for the three months ended March 31, 2023 compared to $251,001, for the three months ended March 31,

2022 for an increase of $51,261 and on a constant currency basis an increase of $215,444.

from Operations

from operations was $930,435 for the three months ended March 31, 2023 compared to a loss of $539,305 for the three months ended March

This represents an increase in the loss of $391,130 with an increase in the loss of $3,914,670 on a constant currency basis

for the three months ended March 31, 2023 compared with the three months ended March 31, 2022.

As a percentage of sales, loss from operations

was 6.9% for the three months ended March 31, 2023 compared to 3.6% for the three months ended March 31, 2022.

Income and Expense

income was $5,400,684 for the three months ended March 31, 2023 compared to $679,437 for the three months ended March 31, 2022.

represents an increase of $4,721,247 with an increase of $7,233,035 on a constant currency basis.

The increase is primarily due to the

foreign currency exchange transactions.

The majority of the contracts with NetSol PK are either in U.S.

dollars or Euros;

the currency fluctuations will lead to foreign currency exchange gains or losses depending on the value of the PKR compared to the U.S.

dollar and the Euro.

During the three months ended March 31, 2023, we recognized a gain of $5,385,591 in foreign currency exchange transactions

compared to $499,516 for the three months ended March 31, 2022.

During the three months ended March 31, 2023, the value of the U.S.

increased 25.3% and the Euro increased 27.3%, compared to the PKR.

During the three months ended March 31, 2022, the value of the U.S.

dollar and the Euro increased 3.2% and 1.2%, respectively, compared to the PKR.

Non-controlling

the three months ended March 31, 2023, the net income attributable to non-controlling interest was $1,697,908, compared to $260,998 for

the three months ended March 31, 2022.

The increase in non-controlling interest is primarily due to the increase in net income of NetSol

income (loss) attributable to NetSol

net income was $2,544,623 for the three months ended March 31, 2023 compared to a net loss of $278,470 for the three months ended March

This is an increase of $2,823,093 with an increase of $1,511,612 on a constant currency basis, compared to the prior year.

For the three months ended March 31, 2023, net income per share was $0.23 for basic and diluted shares compared to net loss per share

of $0.02 for basic and diluted shares for the three months ended March 31, 2022.

Months Ended March 31, 2023 Compared to the Nine Months Ended March 31, 2022

following table sets forth the items in our unaudited condensed consolidated statement of operations for the nine months ended March

31, 2023 and 2022 as a percentage of revenues.

For the Nine Months

Ended March 31,

Net Revenues:

Subscription and support

Total net revenues

Cost of revenues:

Salaries and consultants

Depreciation and amortization

Total cost of revenues

Operating expenses:

Selling and marketing

Depreciation and amortization

General and administrative

Research and development cost

Total operating expenses

Income (loss) from operations

Other income and (expenses)

Gain (loss) on sale of assets

Interest expense

Interest income

Gain (loss) on foreign currency exchange transactions

Share of net loss from equity investment

Other income (expense)

Total other income (expenses)

Net income before income taxes

Income tax provision

Net income (loss)

Non-controlling interest

Net income (loss) attributable to NetSol

Net income (loss) per share:

Net income (loss) per common share

Weighted average number of shares outstanding

significant portion of our business is conducted in currencies other than the U.S.

We operate in several geographical regions

as described in Note 17 “Operating Segments” within the Notes to the Condensed Consolidated Financial Statements.

of the value of the U.S.

dollar compared to foreign currency exchange rates generally has the effect of increasing our revenues but also

increasing our expenses denominated in currencies other than the U.S.

Similarly, strengthening of the U.S.

dollar compared to

foreign currency exchange rates generally has the effect of reducing our revenues but also reducing our expenses denominated in currencies

other than the U.S.

We plan our business accordingly by deploying additional resources to areas of expansion, while continuing

to monitor our overall expenditures given the economic uncertainties of our target markets.

In order to provide a framework for assessing

how our underlying businesses performed excluding the effect of foreign currency fluctuations, we compare the changes in results from

one period to another period using constant currency.

In order to calculate our constant currency results, we apply the current period

results to the prior period foreign currency exchange rates.

In the table below, we present the change based on actual results in reported

currency and in constant currency.

(Unfavorable)

For the Nine Months

(Unfavorable)

Change due to

(Unfavorable)

Ended March 31,

Net Revenues:

$ (3,069,077 )

$ (2,031,606 )

$ (5,100,683 )

Cost of revenues:

(12,116,799 )

Operating expenses:

Income (loss) from operations

$ (5,873,140 )

$ (15,133,081 )

$ (6,348,093 )

revenues for the nine months ended March 31, 2023 and 2022 are broken out among the segments as follows:

North America

fees for the nine months ended March 31, 2023 were $2,248,829 compared to $3,586,874 for the nine months ended March 31, 2022 reflecting

a decrease of $1,338,045 with a decrease in constant currency of $1,212,555.

During the nine months ended March 31, 2023, we recognized

approximately $1,918,000 related to a new NFS Ascent ® agreement with Kubota in Australia and approximately $188,000 related

to a new agreement with the Government of Khyber Pakhtunkhwa for the sale of our Ascent ® product.

During the nine months

ended March 31, 2022, we recognized approximately $3,039,000 related to a new agreement with DTFS for the sale of both our legacy and

Ascent product ® for their new business segment in the Japanese, Australian and South African markets and $465,000 from

the DFS contract.

and support fees for the nine months ended March 31, 2023 were $19,175,585 compared to $22,159,798 for the nine months ended March 31,

2022 reflecting a decrease of $2,984,213 with a decrease in constant currency of $2,370,859.

The decrease in subscription and support

revenue is related to the revised ceiling amount for post contract support due to the software customizations related to the DFS contract.

The Company recorded a one-time post contract support revenue of approximately $3,480,000 using the catch-up approach during the nine

months ended March 31, 2022.

Subscription and support fees begin once a customer has “gone live” with our product.

and support fees are recurring in nature, and we anticipate these fees to gradually increase as we implement both our NFS legacy products

and NFS Ascent ® .

income for the nine months ended March 31, 2023 was $17,178,452 compared to $17,956,877 for the nine months ended March 31, 2022 reflecting

a decrease of $778,425 with an increase in constant currency of $514,337.

The change is primarily due to services provided for ongoing

implementations plus additional change requests.

gross profit was $12,099,489 for the nine months ended March 31, 2023 compared with $18,920,180 for the nine months ended March 31, 2022.

This is a decrease of $6,820,691 with a decrease in constant currency of $12,116,799.

The gross profit percentage for the nine months

ended March 31, 2023 also decreased to 31.3% from 43.3% for the nine months ended March 31, 2022.

The cost of sales was $26,503,377 for

the nine months ended March 31, 2023 compared to $24,783,369 for the nine months ended March 31, 2022 for an increase of $1,720,008 and

on a constant currency basis an increase of $9,047,722.

As a percentage of sales, cost of sales increased from 56.7% for the nine months

ended March 31, 2022 to 68.7% for the nine months ended March 31, 2023.

and consultant fees increased by $1,401,495 from $18,081,225 for the nine months ended March 31, 2022 to $19,482,720 for the nine months

ended March 31, 2023 and on a constant currency basis increased by $6,651,377.

The increase is due to annual salary raises and new hirings.

As a percentage of sales, salaries and consultant expense increased from 41.4% for the nine months ended March 31, 2022 to 50.5% for

the nine months ended March 31, 2023.

expense was $1,752,074 for the nine months ended March 31, 2023 compared to $753,698 for the nine months ended March 31, 2022 for an

increase of $998,376 with an increase in constant currency of $1,487,642.

The increase in travel expense is due to the increase in travel

as countries have been lifting travel restrictions.

and amortization expense decreased to $1,950,156 compared to $2,236,190 for the nine months ended March 31, 2022 or a decrease of $286,034

and on a constant currency basis an increase of $418,918.

costs decreased to $3,318,427 for the nine months ended March 31, 2023 compared to $3,712,256 for the nine months ended March 31, 2022

or a decrease of $393,829 and on a constant currency basis an increase of $489,785.

The increase on a constant currency basis is mainly

due to increases in computer costs.

expenses were $17,972,629 for the nine months ended March 31, 2023 compared to $18,445,227, for the nine months ended March 31, 2022

for a decrease of 2.6% or $472,598 and on a constant currency basis an increase of 16.3% or $3,016,282.

As a percentage of sales, it

increased from 42.2% to 46.6%.

The increase in operating expenses on a constant currency basis was primarily due to increases in selling

expenses, general and administrative expenses and research and development costs.

expenses were $5,413,492 for the nine months ended March 31, 2023 compared to $5,502,028, for the nine months ended March 31, 2022 for

a decrease of $88,536 and on a constant currency basis an increase of $986,779.

and administrative expenses were $10,745,031 for the nine months ended March 31, 2023 compared to $11,548,097 at March 31, 2022 or a

decrease of $803,066 or 7.0% and on a constant currency basis an increase of $1,024,055 or 8.9%.

During the nine months ended March 31,

2023, salaries decreased by approximately $364,975 and increased $805,877 on a constant currency basis, and other general and administrative

expenses decreased approximately $438,091 and increased $218,178 on a constant currency basis.

and development cost was $1,244,793 for the nine months ended March 31, 2023 compared to $761,621, for the nine months ended March 31,

2022 for an increase of $483,172 and on a constant currency basis an increase of $920,289.

ended September 30, 2023, salaries increased by approximately $79,101 and increased $284,266 on a constant currency basis, and other

general and administrative expenses decreased approximately $218,230 or decreased by $122,380 on a constant currency basis.

and development cost was $378,419 for the three months ended September 30, 2023 compared to $469,627, for the three months ended September

30, 2022 for a decrease of $91,208 and on a constant currency basis an increase of $5,279.

from Operations

from operations was $5,873,140 for the nine months ended March 31, 2023 compared to income from operations of $474,953 for the nine months

ended March 31, 2022.

This represents an increase in the loss of $6,348,093 with an increase in the loss of $15,133,081 on a constant

currency basis for the nine months ended March 31, 2023 compared with the nine months ended March 31, 2022.

from operations was $350,629 for the three months ended September 30, 2023 compared to a loss of $1,896,191 for the three months ended

September 30, 2022.

This represents an increase in income of $2,246,820 with an increase in income of $125,444 on a constant currency

basis for the three months ended September 30, 2023 compared with the three months ended September 30, 2022.

As a percentage of sales,

loss from operations was 15.2% for the nine months ended March 31, 2023 compared to income from operations of 1.1% for the nine months

ended March 31, 2022.

income from operations was 2.5% for the three months ended September 30, 2023 compared to loss of 14.9% for the three months ended September

Income and Expense

income was $7,916,859 for the nine months ended March 31, 2023 compared to $3,023,355 for the nine months ended March 31, 2022.

represents an increase of $4,893,504 with an increase of $8,201,958 on a constant currency basis.

The increase is primarily due to the

foreign currency exchange transactions.

income was $62,329 for the three months ended September 30, 2023 compared to $1,651,568 for the three months ended September 30, 2022.

This represents a decrease of $1,589,239 with a decrease of $1,570,221 on a constant currency basis.

The decrease is primarily due to

the foreign currency exchange transactions.

The majority of the contracts with NetSol PK are either in U.S.

2 unchanged sentences

dollar and the Euro.

During the nine months ended March 31, 2023, we recognized a gain of $7,358,519 in foreign currency exchange transactions

compared to $2,684,680 for the nine months ended March 31, 2022.

During the nine months ended March 31, 2023, the value of the U.S.

and the Euro increased 38.2% and 43.8%, respectively, compared to the PKR.

During the nine months ended March 31, 2022, the value of

During the three months ended September 30, 2023, we recognized a loss of $134,253 in foreign currency exchange

transactions compared to gain of $1,315,705 for the three months ended September 30, 2022.

During the three months ended September 30,

2023, the value of the U.S.

dollar increased 0.2% and the Euro decreased 2.6%, compared to the PKR.

During the three months ended September

30, 2022, the value of the U.S.

dollar and the Euro increased 11.0% and 4.11%, respectively, compared to the PKR.

Non-controlling

the nine months ended March 31, 2023, the net income attributable to non-controlling interest was $1,571,629, compared to $1,655,287

for the nine months ended March 31, 2022.

The decrease in non-controlling interest is primarily due to the decrease in net income of

the three months ended September 30, 2023, the net income attributable to non-controlling interest was $260,173, compared to $182,758

for the three months ended September 30, 2022.

The increase in non-controlling interest is primarily due to the increase in net income

of NetSol PK.

income (loss) attributable to NetSol

net loss was $169,032 for the nine months ended March 31, 2023 compared to net income of $1,316,284 for the nine months ended March 31,

This is a decrease of $1,485,316 with a decrease of $6,151,678 on a constant currency basis, compared to the prior year.

nine months ended March 31, 2023, net loss per share was $0.01 for basic and diluted shares compared to net income per share of $0.12

for basic and diluted shares for the nine months ended March 31, 2022.

net income was $30,890 for the three months ended September 30, 2023 compared to a net loss of $620,729 for the three months ended September

This is an increase in income of $651,619 with an increase in loss of $835,295 on a constant currency basis, compared to the

For the three months ended September 30, 2023, net income per share was $0.003 for basic and diluted shares compared to net

loss per share of $0.06 for basic and diluted shares for the three months ended September 30, 2022.

Financial Measures

31 unchanged sentences

reconciliation of the non-GAAP financial measures of adjusted EBITDA and non-GAAP earnings per basic and diluted share to the most comparable

GAAP measures for the three and nine months ended March 31, 2023 and 2022 are as follows:

GAAP measures for the three months ended September 30, 2023 and 2022 are as follows:

For the Three Months

Ended March 31,

For the Nine Months

Ended March 31,

Ended September 30,

Net Income (loss) attributable to NetSol

10 unchanged sentences

Diluted adjusted EBITDA

(a) The reconciliation of adjusted EBITDA of non-controlling interest to net income attributable to

non-controlling interest is as follows

(a)The reconciliation of adjusted EBITDA of non-controlling interest to net income attributable to non-controlling interest is as follows

Net Income (loss) attributable to non-controlling interest

5 unchanged sentences

AND CAPITAL RESOURCES

cash position was $15,259,497 at March 31, 2023, compared to $23,963,797 at June 30, 2022.

cash provided by operating activities was $2,564,619 for the nine months ended March 31, 2023 compared to $5,525,951 for the nine months

ended March 31, 2022.

At March 31, 2023, we had current assets of $40,824,397 and current liabilities of $17,656,128.

We had accounts

receivable of $9,223,484 at March 31, 2023 compared to $8,669,202 at June 30, 2022.

We had revenues in excess of billings of $13,741,884

at March 31, 2023 compared to $15,425,377 at June 30, 2022 of which $nil and $853,601 is shown as long term as of March 31, 2023 and

June 30, 2022, respectively.

The long-term portion was discounted by $nil and $28,339 at March 31, 2023 and June 30, 2022, respectively,

using the discounted cash flow method with interest rates ranging from 4.65% to 6.25%.

During the nine months ended March 31, 2023, our

revenues in excess of billings were reclassified to accounts receivable pursuant to billing requirements detailed in each contract.

combined totals for accounts receivable and revenues in excess of billings decreased by $1,129,211 from $24,094,579 at June 30, 2022

to $22,965,368 at March 31, 2023.

Accounts payable and accrued expenses, and current portions of loans and lease obligations amounted

to $7,098,206 and $5,969,044, respectively at March 31, 2023.

Accounts payable and accrued expenses, and current portions of loans and

lease obligations amounted to $6,813,541 and $8,567,145, respectively at June 30, 2022.

average days sales outstanding for the nine months ended March 31, 2023 and 2022 were 167 and 137 days, respectively, for each period.

cash position was $16,551,677 at September 30, 2023, compared to $15,533,254 at June 30, 2023.

cash provided by operating activities was $1,663,619 for the three months ended September 30, 2023 compared to $1,298,857 for the three

months ended September 30, 2022.

At September 30, 2023, we had current assets of $38,675,408 and current liabilities of $18,268,130.

We had accounts receivable of $6,870,956 at September 30, 2023 compared to $11,714,422 at June 30, 2023.

We had revenues in excess of

billings of $13,733,160 at September 30, 2023 compared to $12,377,677 at June 30, 2023 of which $724,875 and $nil is shown as long term

as of September 30, 2023 and June 30, 2023, respectively.

The long-term portion was discounted by $98,103 and $nil at September 30, 2023

and June 30, 2023, respectively, using the discounted cash flow method with an interest rate of 7.24%.

During the three months ended

September 30, 2023, our revenues in excess of billings were reclassified to accounts receivable pursuant to billing requirements detailed

in each contract.

The combined totals for accounts receivable and revenues in excess of billings decreased by $3,487,983 from $24,092,099

at June 30, 2023 to $20,604,116 at September 30, 2023.

Accounts payable and accrued expenses, and current portions of loans and lease

obligations amounted to $6,802,879 and $5,756,553, respectively at September 30, 2023.

Accounts payable and accrued expenses, and current

portions of loans and lease obligations amounted to $6,552,181 and $5,779,510, respectively, at June 30, 2023.

average days sales outstanding for the three months ended September 30, 2023 and 2022 were 144 and 165 days, respectively, for each period.

The days sales outstanding have been calculated by taking into consideration the average combined balances of accounts receivable and

revenues in excess of billings.

cash used in investing activities was $1,421,657 for the nine months ended March 31, 2023, compared to $1,359,605 for the nine months

ended December 31, 2021.

We had purchases of property and equipment of $1,575,059 compared to $1,680,856 for the nine months ended March

cash used in financing activities was $517,349 for the nine months ended March 31, 2023, compared to $833,103 for the nine months ended

March 31, 2022.

For the nine months ended March 31, 2022, we purchased 22,510 shares of our own stock for $100,106.

The nine months ended

March 31, 2023 and 2022 included the cash inflow of $270,292 and $312,467, respectively, from bank proceeds.

During the nine months ended

March 31, 2023, we had net payments for bank loans and finance leases of $787,641 compared to $1,045,464 for the nine months ended March

We are operating in various geographical regions of the world through our various subsidiaries.

Those subsidiaries have financial

arrangements from various financial institutions to meet both their short and long-term funding requirements.

These loans will become

due at different maturity dates as described in Note 14 of the financial statements.

We are in compliance with the covenants of the financial

arrangements and there is no default, which may lead to early payment of these obligations.

We anticipate paying back all these obligations

on their respective due dates from its own sources.

cash used in investing activities was $370,400 for the three months ended September 30, 2023, compared to $893,994 for the three months

ended September 30, 2022.

We had purchases of property and equipment of $371,630 compared to $1,347,601 for the three months ended September

cash used in financing activities was $44,474 for the three months ended September 30, 2023, compared to $445,737 for the three months

ended September 30, 2022.

During the three months ended September 30, 2023, we had net payments for bank loans and finance leases of

$44,474 compared to $445,737 for the three months ended September 30, 2022.

We are operating in various geographical regions of the world

through our various subsidiaries.

Those subsidiaries have financial arrangements from various financial institutions to meet both their

short and long-term funding requirements.

These loans will become due at different maturity dates as described in Note 13 of the financial

We are in compliance with the covenants of the financial arrangements and there is no default, which may lead to early payment

of these obligations.

We anticipate paying back all these obligations on their respective due dates from its own sources.

typically fund the cash requirements for our operations in the U.S.

1 unchanged sentence

intercompany charges for corporate services, and through the exercise of options and warrants.

As of March 31, 2023, we had approximately

As of September 30, 2023, we had approximately

$16.6 million of cash, cash equivalents and marketable securities of which approximately $15.2 million is held by our foreign subsidiaries.

As of June 30, 2023, we had approximately $15.5 million of cash, cash equivalents and marketable securities of which approximately $13.5

million was held by our foreign subsidiaries.

million is held by our foreign subsidiaries.

remain open to strategic relationships that would provide value added benefits.

16 unchanged sentences

380 million ($1,320,591) from Samba Bank Limited.

During the tenure of loan,

these two facilities 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.

During the loan tenure, these

two facilities 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.

of the date of this report, we are in compliance with the financial covenants associated with our borrowings.

21 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis