What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-20 compared with 2024-02-13 · 345 added, 262 removed, 806 unchanged (43% of the section changed)

2 unchanged sentences

AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2023

June 30, 2023

Current assets:

Cash and cash equivalents

Accounts receivable, net of allowance of $ 421,288 and $ 420,354

Revenues in excess of billings, net of allowance of $ 137,406 and $ 1,380,141

Condensed Consolidated Balance Sheets

Cash and cash

Accounts receivable, net of

allowance of $ 414,745 and $ 420,354

Revenues in excess of billings,

net of allowance of $ 116,023 and $ 1,380,141

Other current assets

Total current assets

Revenues in excess of billings, net - long term

Revenues in excess of billings,

net - long term

Property and equipment, net

Right of use assets - operating leases

Right of use assets - operating

Intangible assets, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable and accrued expenses

Current portion of loans and obligations under finance leases

Current portion of operating lease obligations

AND STOCKHOLDERS’ EQUITY

Accounts payable and accrued

Current portion of loans and

obligations under finance leases

Current portion of operating

lease obligations

Unearned revenue

Total current liabilities

Loans and obligations under finance leases;

Loans and obligations under

finance leases;

less current maturities

2 unchanged sentences

Total liabilities

Stockholders’ equity:

Stockholders’

Preferred stock, $ .01 par value;

500,000 shares authorized;

Common stock, $ .01 par value;

stock, $ .01 par value;

14,500,000 shares authorized;

12,329,919 shares issued and 11,390,888 outstanding as of December 31, 2023;

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

shares issued and 11,405,240 outstanding as of March 31, 2024, 12,284,887 shares issued and 11,345,856 outstanding

as of June 30, 2023

Additional paid-in-capital

Treasury stock (at cost, 939,031 shares as of December 31, 2023 and June 30, 2023)

stock (at cost, 939,031 shares as of March 31, 2024 and June 30, 2023)

( 3,920,856 )

6 unchanged sentences

( 45,975,156 )

Total NetSol stockholders’ equity

Total NetSol stockholders’

Non-controlling interest

Total stockholders’ equity

Total liabilities and stockholders’ equity

Total stockholders’

Total liabilities

and stockholders’ equity

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

1 unchanged sentence

AND SUBSIDIARIES

Consolidated Statements of Operations

For the Three Months

For the Six Months

Ended December 31,

Condensed Consolidated Statements of Operations

For the Three

Net Revenues:

2 unchanged sentences

Cost of revenues

Operating expenses:

Selling, general and administrative

1 unchanged sentence

Total operating expenses

Income (loss) from operations

( 3,046,514 )

(loss) from operations

( 5,873,140 )

Other income and (expenses)

and (expenses)

Interest expense

Interest income

Gain (loss) on foreign currency exchange transactions

Share of net loss from equity investment

Gain (loss) on foreign currency

exchange transactions

( 1,112,757 )

Share of net loss from equity

Other income (expense)

Total other income (expenses)

Net income (loss) before income taxes

( 2,181,907 )

( 2,426,530 )

Income tax provision

Net income (loss)

before income taxes

tax provision

Non-controlling

( 1,697,908 )

( 1,571,629 )

Non-controlling interest

Net income (loss) attributable to NetSol

(loss) attributable to NetSol

$ 2,544,623 #

1 unchanged sentence

Net income (loss) per share:

Net income (loss) per common share

Net income (loss) per common

Weighted average number of shares outstanding

2 unchanged sentences

AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss)

For the Three Months

For the Six Months

Ended December 31,

Net income (loss)

$ ( 2,092,926 )

Condensed Consolidated Statements of Comprehensive Income (Loss)

For the Three

income (loss)

$ ( 169,032 )

Other comprehensive income (loss):

Other comprehensive

income (loss):

Translation adjustment

( 7,628,982 )

Translation adjustment attributable to non-controlling interest

( 11,428,326 )

Translation adjustment attributable

to non-controlling interest

Net translation adjustment

( 5,181,654 )

Comprehensive income (loss) attributable to NetSol

( 7,829,909 )

Comprehensive

income (loss) attributable to NetSol

$ ( 2,637,031 )

$ ( 7,998,941 )

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

1 unchanged sentence

AND SUBSIDIARIES

Consolidated Statement of Stockholders’ Equity

Condensed Consolidated Statement of Stockholders’ Equity

statement of the changes in equity for the three months ended March 31, 2024 is provided below:

Stockholders’

at December 31, 2023

$ 128,587,384

$ ( 3,920,856 )

$ ( 44,456,980 )

$ ( 45,870,309 )

stock issued for:

value of options issued

value of subsidiary options issued

currency translation adjustment

Net income (loss) for the

at March 31, 2024

$ 128,736,328

$ ( 3,920,856 )

$ ( 44,129,431 )

$ ( 45,505,920 )

statement of the changes in equity for the three months ended December 31, 2023 is provided below:

Comprehensive

Stockholders’

Balance at September 30, 2023

at September 30, 2023

$ 128,536,132

2 unchanged sentences

$ ( 46,411,702 )

Common stock issued for:

Fair value of subsidiary options issued

Foreign currency translation adjustment

Net income (loss) for the year

Balance at December 31, 2023

stock issued for:

value of subsidiary options issued

currency translation adjustment

Net income (loss) for the

at December 31, 2023

$ 128,587,384

2 unchanged sentences

$ ( 45,870,309 )

TECHNOLOGIES, INC.

AND SUBSIDIARIES

Condensed Consolidated Statement of Stockholders’ Equity

statement of the changes in equity for the three months ended September 30, 2023 is provided below:

Comprehensive

Stockholders’

Balance at June 30, 2023

at June 30, 2023

$ 128,476,048

2 unchanged sentences

$ ( 45,975,156 )

Common stock issued for:

Fair value of subsidiary options issued

Foreign currency translation adjustment

Net income (loss) for the year

Balance at September 30, 2023

stock issued for:

value of subsidiary options issued

currency translation adjustment

Net income (loss) for the

at September 30, 2023

$ 128,536,132

2 unchanged sentences

$ ( 46,411,702 )

statement of the changes in equity for the three months ended March 31, 2023 is provided below:

Stockholders’

at December 31, 2022

$ 128,484,714

$ ( 3,920,856 )

$ ( 42,366,093 )

$ ( 42,011,340 )

stock issued for:

value of subsidiary options issued

currency translation adjustment

( 5,181,654 )

( 2,447,328 )

( 7,628,982 )

Net income (loss) for the

at March 31, 2023

$ 128,536,955

$ ( 3,920,856 )

$ ( 39,821,470 )

$ ( 47,192,994 )

TECHNOLOGIES, INC.

AND SUBSIDIARIES

Consolidated Statement of Stockholders’ Equity

Condensed Consolidated Statement of Stockholders’ Equity

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

Comprehensive

Stockholders’

Balance at September 30, 2022

at September 30, 2022

$ 128,420,519

2 unchanged sentences

$ ( 42,281,135 )

Common stock issued for:

Fair value of subsidiary options issued

Foreign currency translation adjustment

Net income (loss) for the year

stock issued for:

value of subsidiary options issued

currency translation adjustment

Net income (loss) for the

( 2,092,926 )

( 2,401,963 )

Balance at December 31, 2022

at December 31, 2022

$ 128,484,714

3 unchanged sentences

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

Comprehensive

Stockholders’

Balance at June 30, 2022

at June 30, 2022

$ 128,218,247

6 unchanged sentences

$ ( 39,363,085 )

Common stock issued for:

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

Fair value of subsidiary options issued

Foreign currency translation adjustment

stock issued for:

Adjustment in APIC for change

in subsidiary shares to non-controlling

value of subsidiary options issued

currency translation adjustment

( 2,918,050 )

1 unchanged sentence

( 4,151,519 )

Net income (loss) for the year

Balance at September 30, 2022

Net income (loss) for the

Net income (loss)

at September 30, 2022

$ 128,420,519

10 unchanged sentences

Consolidated Statements of Cash Flows

For the Six Months

Ended December 31,

Cash flows from operating activities:

Net income (loss)

$ ( 2,839,934 )

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

from operating activities:

to reconcile net income to net cash provided by (used in) operating

Depreciation and amortization

Provision for bad debts

Share of net (gain) loss from investment under equity method

Gain on sale of assets

Share of net (gain) loss from

investment under equity method

(Gain) loss on sale of assets

Stock based compensation

Changes in operating assets and liabilities:

in operating assets and liabilities:

Accounts receivable

( 3,922,773 )

( 1,855,899 )

Revenues in excess of billing

1 unchanged sentence

Other current assets

Accounts payable and accrued expenses

Accounts payable and accrued

Unearned revenue

cash provided by (used in) operating activities

( 3,602,677 )

Net cash provided by operating activities

Cash flows from investing activities:

Purchases of property and equipment

from investing activities:

Purchases of property and

( 1,575,059 )

Sales of property and equipment

Net cash used in investing activities

cash used in investing activities

( 1,421,657 )

Cash flows from financing activities:

from financing activities:

Proceeds from bank loans

Payments on finance lease obligations and loans - net

Net cash used in financing activities

Effect of exchange rate changes

Payments on finance lease

obligations and loans - net

cash provided by (used in) financing activities

of exchange rate changes

( 9,329,913 )

Net increase (decrease) in cash and cash equivalents

in cash and cash equivalents

( 3,194,612 )

Cash and cash equivalents at beginning of the period

Cash and cash equivalents at end of period

( 8,704,300 )

Cash and cash equivalents

at beginning of the period

cash equivalents at end of period

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

1 unchanged sentence

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

the Six Months

paid during the period for:

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

SUPPLEMENTAL DISCLOSURES:

Cash paid during the period

NON-CASH INVESTING AND FINANCING

Assets acquired under finance

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

65 unchanged sentences

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

As of December 31, 2023, and June 30, 2023, the Company had

uninsured deposits related to cash deposits in accounts maintained within foreign entities of approximately $ 14,517,520 and $ 13,524,518 ,

respectively.

As of March 31, 2024, and June 30, 2023, the Company had uninsured

deposits related to cash deposits in accounts maintained within foreign entities of approximately $ 11,779,289 and $ 13,524,518 , respectively.

The Company has not experienced any losses in such accounts.

25 unchanged sentences

to Condensed Consolidated Financial Statements

Company’s financial assets that were measured at fair value on a recurring basis as of December 31, 2023, were as follows:

Company’s financial assets that were measured at fair value on a recurring basis as of March 31, 2024, were as follows:

OF FAIR VALUE OF FINANCIAL ASSETS MEASURED ON RECURRING BASIS

Revenues in excess of billings - long term

Revenues in excess

of billings - long term

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

reconciliation from June 30, 2023 to December 31, 2023 is as follows:

reconciliation from June 30, 2023 to March 31, 2024 is as follows:

SCHEDULE OF FAIR VALUE OF FINANCIAL INSTRUMENTS RECONCILIATION

billings - long term

value discount

Balance at June 30, 2023

1 unchanged sentence

Effect of Translation Adjustment

Balance at December 31, 2023

Balance at March 31, 2024

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

32 unchanged sentences

Company determines revenue recognition through the following steps:

Identification

of the contract, or contracts, with a customer;

Identification

of the performance obligations in the contract;

Determination

of the transaction price;

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

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

Identification of the contract, or contracts, with

Identification of the performance obligations in the

Determination of the transaction price;

Allocation of the transaction price to the performance

obligations in the contract;

Recognition of revenue when, or as, the Company satisfies

a performance obligation.

Company records the amount of revenue and related costs by considering whether the entity is a principal (gross presentation) or an agent

76 unchanged sentences

For the Three Months

For the Six Months

Ended December 31,

For the Nine Months

Ended March 31,

Subscription and support

60 unchanged sentences

SCHEDULE OF REVENUES IN EXCESS OF BILLINGS AND DEFERRED REVENUE

March 31, 2024

June 30, 2023

Revenues in excess of billings

2 unchanged sentences

SCHEDULE OF UNEARNED REVENUE RECONCILIATION

Unearned Revenue

Balance at June 30, 2023

1 unchanged sentence

( 17,213,051 )

Balance at December 31, 2023

the three and six months ended December 31, 2023, the Company recognized revenue of $ 2,248,000 and $ 6,454,000 that 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.

Balance at March 31, 2024

the three and nine months ended March 31, 2024, the Company recognized revenue of $ 620,000 and $ 7,074,000 that 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.

TECHNOLOGIES, INC.

2 unchanged sentences

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

Contracted but unsatisfied performance obligations were approximately $ 32,816,000 as of December 31, 2023, of which the Company estimates

Contracted but unsatisfied performance obligations were approximately $ 36,014,000 as of March 31, 2024, of which the Company estimates

to recognize approximately $ 24,225,000 in revenue over the next 12 months and the remainder over an estimated 3 years thereafter.

15 unchanged sentences

The Company has applied the following practical expedients:

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.

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.

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).

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.

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

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

Statement of Operations.

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

for which the Company recognizes revenue at the amount to which it has the right to invoice

for services performed (applies to time-and-material engagements).

to Obtain a Contract

12 unchanged sentences

shares outstanding during the period using the treasury stock method.

During the three and six months ended December 31, 2023 and 2022,

there were no outstanding dilutive instruments.

Dilutive potential common shares include outstanding stock options

and stock awards.

SCHEDULE OF DILUTIVE POTENTIAL COMMON SHARES

For the three months

ended March 31, 2024

the nine months

ended March 31, 2024

Basic income (loss) per share:

Net income (loss) available to common shareholders

Effect of dilutive securities

Stock options

Diluted income (loss) per share

For the three months

March 31, 2023

For the nine months

ended March 31, 2023

Basic income (loss) per share:

Net income (loss) available to common shareholders

$ ( 169,032 )

Effect of dilutive securities

Stock options

Diluted income (loss) per share

$ ( 169,032 )

TECHNOLOGIES, INC.

7 unchanged sentences

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

equity section of the consolidated balance sheet were $ 45,870,309 and $ 45,975,156 as of December 31, 2023 and June 30, 2023, respectively.

During the three and six months ended December 31, 2023, comprehensive income (loss) in the consolidated statements of comprehensive

income (loss) included a translation gain attributable to NetSol of $ 541,393 and $ 104,847 , respectively.

During the three and six months

ended December 31, 2022, comprehensive income (loss) in the consolidated statements of comprehensive income (loss) included a $ 269,795

translation gain attributable to NetSol and a $ ( 2,648,255 ) translation loss attributable to NetSol, respectively.

equity section of the consolidated balance sheet were $ 45,505,920 and $ 45,975,156 as of March 31, 2024 and June 30, 2023, respectively.

During the three and nine months ended March 31, 2024, comprehensive income (loss) in the consolidated statements of comprehensive income

(loss) included a translation gain attributable to NetSol of $ 364,389 and $ 469,236 , respectively.

During the three and nine months ended

March 31, 2023, comprehensive income (loss) in the consolidated statements of comprehensive income (loss) included a translation loss

attributable to NetSol of $ ( 5,181,654 ) and $ ( 7,829,909 ) , respectively.

6 – MAJOR CUSTOMERS

the three and six months ended December 31, 2023, revenues from Daimler Financial Services (“DFS”) were $ 3,945,061

and $ 7,632,692 ,

representing 25.9 %

During the three and six months ended December 31, 2022, revenues from Daimler Financial Services (“DFS”)

were $ 3,478,077

and $ 7,069,884 ,

representing 28.1 %

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

receivable from DFS at December 31, 2023 and June 30, 2023, were $ 1,014,503 and $ 4,368,881 , respectively.

the three and nine months ended March 31, 2024, revenues from Daimler Financial Services (“DFS”) were $ 4,207,409 and $ 11,840,101 ,

representing 27.2 % and 26.3 % of revenues, respectively.

During the three and nine months ended March 31, 2023, revenues from Daimler

Financial Services (“DFS”) were $ 3,754,752 and $ 10,824,636 , representing 27.8 % and 28.0 % of revenues.

The revenues from DFS

are shown in the Asia – Pacific segment.

receivable from DFS at March 31, 2024 and June 30, 2023, were $ 7,379,879 and $ 4,368,881 , respectively.

Revenues in excess of billings

at December 31, 2023 and June 30, 2023, were $ 2,497,783 and $ 1,961,750 , respectively.

at March 31, 2024 and June 30, 2023, were $ 2,275,426 and $ 1,961,750 , respectively.

TECHNOLOGIES, INC.

3 unchanged sentences

SCHEDULE OF OTHER CURRENT ASSETS

March 31, 2024

June 30, 2023

Prepaid Expenses

6 unchanged sentences

SCHEDULE OF REVENUE IN EXCESS OF BILLING

March 31, 2024

June 30, 2023

Revenues in excess of billings - long term

2 unchanged sentences

after one year.

During the three and six months ended December 31, 2023, the Company accreted $ 12,309 and $ 18,464 , respectively, which

During the three and nine months ended March 31, 2024, the Company accreted $ 12,309 and $ 30,773 , respectively, which

was recorded in interest income for that period.

During the three and six months ended December 31, 2022, the Company accreted $ 9,288

and $ 18,657 , respectively.

The Company used the discounted cash flow method with an interest rate of 7.34 % for the period ended December

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

During the three and nine months ended March 31, 2023, the Company accreted $ 9,372 and

$ 28,029 , respectively.

The Company used the discounted cash flow method with an interest rate of 7.34 % for the period ended March 31,

The Company used the discounted cash flow method with interest rates ranging from 4.65 % to 6.25 % for the period ended March 31,

TECHNOLOGIES, INC.

3 unchanged sentences

SCHEDULE OF PROPERTY AND EQUIPMENT

March 31, 2024

June 30, 2023

Office Furniture and Equipment

5 unchanged sentences

Property and Equipment, Net

the three and six months ended December 31, 2023, depreciation expense totaled $ 429,163 and $ 833,908 , respectively.

the three and nine months ended March 31, 2024, depreciation expense totaled $ 391,290

and $ 1,225,198 , respectively.

Of these amounts,

$ 250,126 and $ 781,442 , respectively, are reflected in cost of revenues.

For the three and six months ended December 31, 2022, depreciation

For the three and nine months ended March 31, 2023, depreciation

expense totaled $ 507,314 and $ 1,598,325 , respectively.

Of these amounts, $ 370,606 and $ 701,835 , respectively, are reflected in cost of

is a summary of fixed assets held under finance leases as of December 31, 2023 and June 30, 2023:

SUMMARY OF FIXED ASSETS HELD UNDER CAPITAL LEASES

Of these amounts, $ 327,177 and $ 1,029,012 , respectively, are reflected in cost

is a summary of fixed assets held under finance leases as of March 31, 2024 and June 30, 2023:

SCHEDULE OF FIXED ASSETS HELD UNDER CAPITAL LEASES

March 31, 2024

June 30, 2023

Accumulated Depreciation - Net

held under capital leases, Total

Fixed assets held under

capital leases, Total

lease term and discount rate were as follows:

SCHEDULE OF FINANCE LEASE TERM

December 31, 2023

March 31, 2024

June 30, 2023

38 unchanged sentences

SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO LEASE

March 31, 2024

June 30, 2023

Operating lease assets, net

7 unchanged sentences

For the Three Months

For the Six Months

Ended December 31,

For the Nine Months

Ended March 31,

Amortization of finance lease assets

6 unchanged sentences

SCHEDULE OF LEASE TERM AND DISCOUNT RATE

December 31, 2023

March 31, 2024

June 30, 2023

3 unchanged sentences

SCHEDULE OF SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION RELATED TO LEASES

For the Six Months

Ended December 31,

For the Nine Months

Ended March 31,

Operating cash flows related to operating leases

3 unchanged sentences

to Condensed Consolidated Financial Statements

of operating lease liabilities were as follows as of December 31, 2023:

of operating lease liabilities were as follows as of March 31, 2024:

SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES

13 unchanged sentences

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

For the three and six months ended December 31, 2023, the Company

For the three and nine months ended March 31, 2024, the Company

received lease income of $ 8,406 and $ 25,011 , respectively.

For the three and six months ended December 31, 2022, the Company received

lease income of $ 7,786 and $ 15,598 , respectively.

For the three and nine months ended March 31, 2023, the Company received lease

income of $ 8,099 and $ 23,697 , respectively.

11 - INTANGIBLE ASSETS

1 unchanged sentence

SCHEDULE OF INTANGIBLE ASSETS

March 31, 2024

June 30, 2023

Product Licenses - Cost

7 unchanged sentences

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

Amortization expense for the three and six months ended December 31, 2023, was $ nil and $ 126,041 , respectively.

Amortization expense

for the three and six months ended December 31, 2022, was $ 322,672 and $ 645,492 , respectively.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

Amortization expense for the three and nine months ended March 31, 2024, was $ nil and $ 126,041 , respectively.

Amortization expense for

the three and nine months ended March 31, 2023, was $ 275,652 and $ 921,144 , respectively.

12 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

1 unchanged sentence

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

March 31, 2024

June 30, 2023

Accounts Payable

8 unchanged sentences

SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES

As of December 31, 2023

As of March 31, 2024

D&O Insurance

6 unchanged sentences

Term Finance Facility

Insurance Financing

Subsidiary Finance Leases

8 unchanged sentences

Term Finance Facility

Insurance Financing

Subsidiary Finance Leases

2 unchanged sentences

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

The interest rate on these financings were ranging from 5.0 % to 7.9 % as of December 31, 2023 and June 30, 2023, respectively.

The interest rate on these financings were ranging from 8.6 % to 10.9 % as of March 31, 2024 and 5.0 % to 7.9 % as of June 30, 2023, respectively.

(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 % as of December 31, 2023.

The total outstanding balance as of December 31, 2023 and June 30,

2023 was £ Nil .

The annual interest rate was 9.5 % as of March 31, 2024.

The total outstanding balance as of March 31, 2024 and June 30, 2023

This overdraft facility

1 unchanged sentence

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

As of December 31, 2023, NTE

As of March 31, 2024, NTE

was in compliance with this covenant.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated Financial Statements

March 31, 2024

(3) The Company’s

3 unchanged sentences

The total facility amount is Rs.

500,000,000 or $ 1,787,821 at December 31, 2023 and Rs.

500,000,000 or $ 1,799,014 at March 31, 2024 and Rs.

or $ 1,741,493 at June 30, 2023.

The interest rate for the loan was 19.0 % and 17.0 % at December 31, 2023 and June 30, 2023, respectively.

The interest rate for the loan was 19.0 % and 17.0 % at March 31, 2024 and June 30, 2023, respectively.

(4) The Company’s

2 unchanged sentences

amount is Rs.

53,000,000 or $ 191,654 , at December 31, 2023.

The balance outstanding at December 31, 2023 and June 30, 2023 was Rs.

The interest rate for the loan was 23.5 and 24.9 % at December 31, 2023 and June 30, 2023, respectively.

53,000,000 or $ 192,854 , at March 31, 2024.

The balance outstanding at March 31, 2024 and June 30, 2023 was Rs.

interest rate for the loan was 24.0 % and 24.9 % at March 31, 2024 and June 30, 2023, respectively.

This facility requires

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

As of December 31, 2023, NetSol PK was in compliance

with this covenant.

As of March 31, 2024, NetSol PK was in

compliance with this covenant.

(5) The Company’s

5 unchanged sentences

380,000,000 or $ 1,323,535 at

December 31, 2023 and June 30, 2023, respectively.

The interest rate for the loan was 19.0 % and 18.0 % at December 31, 2023 and June 30,

March 31, 2024 and June 30, 2023, respectively.

The interest rate for the loan was 19.0 % and 18.0 % at March 31, 2024 and June 30, 2023,

respectively.

2 unchanged sentences

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

As of December 31, 2023, NetSol PK was in

As of March 31, 2024, NetSol PK was in

compliance with these covenants.

5 unchanged sentences

900,000,000 or $ 3,134,687 ,

at December 31, 2023 and June 30, 2023, respectively.

at March 31, 2024 and June 30, 2023, respectively.

NetSol PK used Rs.

700,000,000 or $ 2,518,620 and Rs.

700,000,000 or $ 2,438,089 ,

at December 31, 2023 and June 30, 2023, respectively.

The interest rate for the loan was 19.0 % and 18.0 % at December 31, 2023 and June

700,000,000 or $ 2,438,089 , at

March 31, 2024 and June 30, 2023, respectively.

The interest rate for the loan was 19.0 % and 18.0 % at March 31, 2024 and June 30, 2023,

respectively.

1 unchanged sentence

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

As of December 31, 2023, NetSol PK used Rs.

As of March 31, 2024, NetSol PK used Rs.

41,450,876 or $ 149,141 of which $ 41,447 was shown as long term and $ 107,694 as current.

1 unchanged sentence

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

interest rate for the loan was 9.0 % to 16.0 % at December 31, 2023, and June 30, 2023.

interest rate for the loan was 9.0 % to 16.0 % at March 31, 2024, and June 30, 2023.

(8) In March 2019,

2 unchanged sentences

years with monthly payments of £ 1,349 , or $ 1,708 .

As of December 31, 2023, the subsidiary has used this facility up to $ 3,392 ,

which was shown as current.

As of June 30, 2023, the subsidiary has used this facility up to $ 13,356 , which was shown as current.

interest rate was 6.14 % at December 31, 2023 and June 30, 2023.

(9) The Company’s

subsidiary, VLS, finances Directors’ and Officers’ (“D&O”) liability insurance, and the $ 39,587 and $ nil

was recorded in current maturities, at December 31, 2023 and June 30, 2023, respectively.

The interest rate on this financing ranged

from 9.7 % to 12.7 % as of December 31, 2023 and June 30, 2023.

As of March 31, 2024, the subsidiary has paid this facility in full.

30, 2023, the subsidiary has used this facility up to $ 13,356 , which was shown as current.

The interest rate was 6.14 % at March 31, 2024

and June 30, 2023.

(9) The Company leases

5 unchanged sentences

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

December 31, 2023 and 2022.

March 31, 2024 and 2023.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

are the aggregate minimum future lease payments under finance leases as of December 31, 2023:

are the aggregate minimum future lease payments under finance leases as of March 31, 2024:

SCHEDULE OF AGGREGATE MINIMUM FUTURE LEASE PAYMENTS UNDER CAPITAL LEASES

Minimum Lease Payments Within year 1

Minimum Lease Payments

Within year 1

Within year 2

Within year 3

Total Minimum Lease Payments

2 unchanged sentences

Current portion

Current portion of loans and obligations under finance leases

Non-Current portion

Loans and obligations under finance leases;

less current maturities

are the aggregate future long term debt payments as of December 31, 2023 which consists of “Sale and Leaseback Financing (7)”

are the aggregate future long term debt payments as of March 31, 2024 which consists of “Sale and Leaseback Financing (7)”

and “Term Finance Facility (8)”.

3 unchanged sentences

Within year 2

Within year 3

Total Loan Payments

2 unchanged sentences

14 - STOCKHOLDERS’ EQUITY

the three and six months ended December 31, 2023, the Company issued 18,069 and 40,032 shares of common stock for services rendered by

the three and nine months ended March 31, 2024, the Company issued 14,352 and 54,384 shares of common stock for services rendered by

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

1 unchanged sentence

of $ 39,750 and $ 119,250 , respectively.

the three and six months ended December 31, 2023, the Company issued nil and 5,000 shares of common stock for services rendered by the

the three and nine months ended March 31, 2024, the Company issued nil and 5,000 shares of common stock for services rendered by the

employees of the Company as part of their compensation.

5 unchanged sentences

Average Grant

Date Fair Value

Unvested, June 30, 2022

Unvested, June 30, 2023

Unvested, December 31, 2023

the three and six months ended December 31, 2023, the Company recorded compensation expense of $ 39,750 and $ 88,550 , respectively.

the three and six months ended December 31, 2022, the Company recorded compensation expense of $ 39,750 and $ 79,500 , respectively.

Unvested, March 31, 2024

the three and nine months ended March 31, 2024, the Company recorded compensation expense of $ 39,750 and $ 128,300 , respectively.

the three and nine months ended March 31, 2023, the Company recorded compensation expense of $ 39,750 and $ 119,250 , respectively.

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

15 – INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN

stock purchase options consisted of the following:

OF COMMON STOCK PURCHASE OPTIONS

Exercise Price

Contractual Life

Intrinsic Value

Outstanding and exercisable, June 30, 2023

Expired / Cancelled

Outstanding and exercisable, March 31, 2024

aggregate intrinsic value at March 31, 2024 represents the difference between the Company’s closing stock price of $ 2.77 on March

31, 2024 and the exercise price of the in-the-money stock options.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

following table summarizes information about stock options outstanding and exercisable at March 31, 2024.

OF STOCK OPTIONS OUTSTANDING

Exercise Price

the nine months ended March 31, 2024, the Company granted 250,000 options to officers and employees with an exercise price of $ 2.15 per

share, an expiration date of one year , and immediate vesting.

Using the Black-Scholes method to value the options, the Company recorded

$ 101,424 in compensation expense for these options in the accompanying condensed consolidated financial statements.

The fair market value

was calculated using the Black-Scholes option pricing model with the following assumptions:

interest rate - 5.24 %

life – 6 months

volatility – 63.6 %

dividend - 0 %

16– OPERATING SEGMENTS

10 unchanged sentences

consolidation.

following table presents a summary of identifiable assets as of December 31, 2023 and June 30, 2023:

following table presents a summary of identifiable assets as of March 31, 2024 and June 30, 2023:

SUMMARY OF IDENTIFIABLE ASSETS

December 31, 2023

March 31, 2024

June 30, 2023

6 unchanged sentences

to Condensed Consolidated Financial Statements

following table presents a summary of revenue streams by segment for the three months ended December 31, 2023 and 2022:

following table presents a summary of revenue streams by segment for the three months ended March 31, 2024 and 2023:

SUMMARY OF REVENUE STREAMS

Subscription and support

North America

following table presents a summary of revenue streams by segment for the six months ended December 31, 2023 and 2022:

Subscription and support

following table presents a summary of revenue streams by segment for the nine months ended March 31, 2024 and 2023:

North America

1 unchanged sentence

to Condensed Consolidated Financial Statements

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

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

SUMMARY OF OPERATING INFORMATION

For the Three Months

For the Six Months

Ended December 31,

For the Nine Months

Ended March 31,

Revenues from unaffiliated customers:

1 unchanged sentence

Asia - Pacific

Revenues from unaffiliated

Revenues from unaffiliated customers

Revenue from affiliated customers

Asia - Pacific

Revenue from affiliated

from affiliated customers

Intercompany revenue

4 unchanged sentences

$ ( 2,229,549 )

$ ( 1,226,392 )

North America

Asia - Pacific

( 1,646,718 )

( 3,073,187 )

$ ( 2,401,963 )

$ ( 2,839,934 )

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

$ ( 2,401,963 )

$ ( 2,839,934 )

Depreciation and amortization:

14 unchanged sentences

to Condensed Consolidated Financial Statements

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

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

SUMMARY OF CAPITAL EXPENDITURES

For the Six Months

Ended December 31,

For the Nine Months

Ended March 31,

Capital expenditures:

8 unchanged sentences

Non-Controlling

December 31, 2023

March 31, 2024

NetSol-Innovation

3 unchanged sentences

NetSol-Innovation

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

18– INCOME TAXES

12 unchanged sentences

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

the three and six months ended December 31, 2023, the Company recorded an income tax provision of $ 150,053 and $ 271,948 , respectively.

During the three and six months ended December 31, 2022, the Company recorded an income tax provision of $ 220,056 and $ 413,404 , respectively.

the three and nine months ended March 31, 2024, the Company recorded an income tax provision of $ 146,569 and $ 418,517 , respectively.

During the three and nine months ended March 31, 2023, the Company recorded an income tax provision of $ 227,718 and $ 641,122 , respectively.

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

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

What changed 10-Q

Item 1. Financial Statements