What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-20 compared with 2024-02-13 · 351 added, 336 removed, 462 unchanged (60% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

for the three and six months ended December 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, 2023, and the Condensed Consolidated Financial Statements

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

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

the three and nine months ended March 31, 2024.

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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California and Austin, Texas

Metropolitan area and Horsham, Flintshire

Metropolitan area, Horsham, and Flintshire

Karachi, Bangkok, Beijing, Tianjin, Shanghai, Jakarta and Sydney

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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 application.

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.

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

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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.

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.

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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.

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.

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

Otoz TM 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.

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.

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.

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

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

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

platform consists of two portals:

Otoz TM platform

consists of two portals:

● Dealer/Admin

management work queue

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search and selection

■ Multi-lender

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

finance and insurance products including collision & liability insurance via integrated

provider marketplaces

checks (paperless)

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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.

Two products, Flex and Hubex, have been launched under the umbrella of the AppexNow marketplace.

NetSol will introduce and launch further

products and services under this marketplace in the future.

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.

It is a one-stop solution that guarantees precise calculations at

all stages of the contract lifecycle through various calculation types.

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

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

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.

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

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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.

the leadership of Dr.

Ali Ahmed, Chief Data Scientist at NetSol, a dedicated team is developing artificial intelligence and machine learning

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.

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 December 31, 2023:

Company contracted with an auto captive finance company of a renowned US auto manufacturer based in China.

This contract is expected

to generate approximately $12 million over the next five years.

Company implemented modifications requested by several of its existing customers across multiple geographies to generate over $1.7

million in revenues.

went live in Taiwan with the Company’s NFS retail product.

& Dean Finance was onboarded on Flex, and Haydock, an existing Flex customer, purchased additional products within our ApexNow

Company hired and appointed Mr.

Erik Wagner as its Chief Marketing Officer.

Mr Wagner is a seasoned professional and brings diversified

experience of over sixteen years in the field of marketing with a special focus on the technology sector across different regions

of the globe.

below are a few of NetSol’s highlights for the quarter ended March 31, 2024:

Brothers, a UK based merchant banking group, successfully went live with Flex Calculation Engine which is part of the Apex Now suite.

This solution will facilitate running complex calculations for their business.

secured Advanced Tier status in the AWS Partner Network, showcasing expertise in cloud transformations and optimizing client’s

cloud investments.

Finance, an award-winning business finance specialist based in the UK, is now offering access to our API-based Flex Calculation Engine

to its broker division, following its initial use since 2023.

This move aligns with Haydock Finance’s subscription to additional

products from Appex Now.

successfully implemented our NFS Ascent® platform at a captive auto finance company of a notable German auto manufacturer based

successfully renegotiated an existing contract in the UK to accommodate an enhanced scope implementation.

This expanded scope implementation

will generate approximately $3.5 Million in additional revenues.

secured a contract to implement our NFS Ascent® wholesale platform at an independent leasing company based in the Netherlands.

This contract will generate approximately $1 Million in revenues over forthcoming quarters.

successfully took GAC-Sofinco Automobile Finance Co., LTD live on our NFC Ascent® platform in China.

We signed a contract with

a new customer in the Middle East to develop a ride hailing app under our Professional Services vertical.

This contract will generate

nearly $300,000 in revenues over the coming months.

We generated approximately

$1.5 Million in revenues by successfully implementing modifications and enhancements requests from multiple customers across various

has identified the following material trends affecting NetSol.

to PR Newswire, December 14, 2023, and the S&P Global Mobility, new vehicles sales globally are expected to reach 86 million

units in 2023 for an 8.9% increase over 2022 and forecasts 2024 auto sales at 88.3 million for a 2.8% increase over 2023.

automotive sales volumes are expected to reach approximately 15.5 million units, an estimated increase of 9% from the projected 2022

levels, and 2024 sales are expected to reach 15.9 million for an estimated increase of 2% compared to 2023.

inflation rate ended at 3.4% for 2023.

(CNN Business, January 11, 2024)

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

planned $46 billion, in Pakistan energy and infrastructure sectors.

Last June, China authorized a new $2.3 billion loan at a discounted

rate to Pakistan as a short-term loan.

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.

to PR Newswire, December 14, 2023, and the S&P Global Mobility, new vehicles sales globally

are expected to reach 86 million units in 2023 for an 8.9% increase over 2022 and forecasts

2024 auto sales at 88.3 million for a 2.8% increase over 2023.

automotive sales volumes are expected to reach approximately 15.5 million units, an estimated

increase of 9% from the projected 2022 levels, and 2024 sales are expected to reach 15.9

million for an estimated increase of 2% compared to 2023.

inflation rate ended at 3.5% as of end of March 2024.

(CNBC April 24, 2024)

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 from the originally planned $46 billion, in Pakistan energy and infrastructure

Last June, China authorized a new $2.3 billion loan at a discounted rate to Pakistan

as a short-term loan.

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.

Russell Index finished 2023 with a 15.1% gain after falling 21.6% in 2022.

(CBS News December

real gross domestic product (GDP) for the US increased at an annual rate of 3.3% in the fourth quarter of 2023 according to the advance

estimate released by the Bureau of Economic Analysis.

real gross domestic product (GDP) for the US increased at an annual rate of 3.3% in the fourth

quarter of 2023 according to the advance estimate released by the Bureau of Economic Analysis.

In the third quarter, real GDP increased 4.9%.

(Bureau of Economic Analysis

- January 25, 2024)

(Bureau of Economic Analysis - January 25,

conflict in Gaza has disrupted the entire Middle East region since October 7, 2023.

This has created uncertainty and has affected

the economies of the neighboring nations.

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

has created uncertainty and has affected the economies of the neighboring nations.

economic conditions in our geographic markets;

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.

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.

interest rate increases by the U.S.

Federal Reserve Board in 2023 restricting buying power for consumers.

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

and higher interest rates globally have greatly increased the cost of doing business, including salaries and benefits worldwide,

affecting profitability.

Federal Reserve Board is restricting buying power for

monetary, and economic challenges and a higher inflation rate than other regional countries

impacting Pakistan exports.

and higher interest rates globally have greatly increased the cost of doing business, including

salaries and benefits worldwide, affecting profitability.

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

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 schedule on February 8, 2024.

the US-China bilateral summit exceeded expectations, the objective of the summit was risk management.

Continued trade tensions between

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

marginal economic growth is expected in Pakistan, according to a report issued by the World

Bank, implementing an ambitious and credibly communicated economic reform plan is critical

for a robust economic recovery.

See Press Release, dated April 2, 2024, World Bank.

is no guarantee that such reforms will be implemented.

the US-China bilateral summit exceeded expectations, the objective of the summit was risk

Continued trade 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,

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IN FINANCIAL CONDITION

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

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

Ended March 31, 2024 Compared to the Quarter Ended March 31, 2023

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

31, 2024 and 2023 as a percentage of revenues.

For the Three Months

Ended December 31,

Ended March 31,

Net Revenues:

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Total other income (expenses)

Net income (loss) before income taxes

Net income before income taxes

Income tax provision

Net income (loss)

Non-controlling interest

Net income (loss) attributable to NetSol

$ (2,092,926 )

Net income (loss) per share:

Net income (loss) per common share

Weighted average number of shares outstanding

Net income (loss) per common

Weighted average number of

shares outstanding

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

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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)

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 Three Months

(Unfavorable) Change in

Change due to

(Unfavorable)

Ended December 31,

Favorable (Unfavorable)

Ended March 31,

Net Revenues:

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Income (loss) from operations

$ (3,046,514 )

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

revenues for the three months ended March 31, 2024 and 2023 are broken out among the segments as follows:

North America

fees for the three months ended December 31, 2023 were $2,990,453 compared to $15,884 for the three months ended December 31, 2022 reflecting

an increase of $2,974,569 with an increase in constant currency of $3,037,196.

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

approximately $2,800,000 related to the sale of our NFS Ascent® CMS software to a renowned US auto manufacturer based in China.

and support fees for the three months ended December 31, 2023 were $6,827,781 compared to $6,502,669 for the three months ended December

fees for the three months ended March 31, 2024 were $558,340 compared to $1,982,985 for the three months ended March 31, 2023 reflecting

a decrease of $1,424,645 with a decrease in constant currency of $1,406,271.

During the three months ended March 31, 2024, we recognized

approximately $465,000 related to the additional sale of our NFS Ascent® CMS software to a renowned German auto manufacturer based

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.

and support fees for the three months ended March 31, 2024 were $7,140,358 compared to $6,656,082 for the three months ended March 31,

2023 reflecting an increase of $484,276 with an increase in constant currency of $534,352.

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 December 31, 2023 was $5,419,707 compared to $5,871,805 for the three months ended December 31, 2022

reflecting a decrease of $452,098 with a decrease in constant currency of $470,501.

The decrease is due to the decrease in fees associated

income for the three months ended March 31, 2024 was $7,765,818 compared to $4,867,322 for the three months ended March 31, 2023 reflecting

an increase of $2,898,496 with an increase in constant currency of $2,968,472.

The increase is due to the increase in fees associated

with current implementations.

gross profit was $7,175,737, for the three months ended December 31, 2023 compared with $3,142.463 for the three months ended December

gross profit was $7,474,820, for the three months ended March 31, 2024 compared with $4,705,029 for the three months ended March 31,

This is an increase of $2,769,791 with an increase in constant currency of $2,524,063.

The gross profit percentage for the

three months ended December 31, 2023 also increased to 47.1% from 25.4% for the three months ended December 31, 2022.

The cost of sales

was $8,062,204 for the three months ended December 31, 2023 compared to $9,247,895 for the three months ended December 31, 2022 for a

decrease of $1,185,691 and on a constant currency basis an increase of $105,865.

As a percentage of sales, cost of sales decreased from

74.6% for the three months ended December 31, 2022 to 52.9% for the three months ended December 31, 2023.

and consultant fees decreased by $1,038,809 from $6,942,171 for the three months ended December 31, 2022 to $5,903,362 for the three

months ended December 31, 2023 and on a constant currency basis decreased by $128,762.

As a percentage of sales, salaries and consultant

expense decreased from 56.0% for the three months ended December 31, 2022 to 38.7% for the three months ended December 31, 2023.

expenses were $748,072 for the three months ended December 31, 2023 compared to $635,298 for the three months ended December 31, 2022

for an increase of $112,774 with an increase in constant currency of $229,251.

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 decreased from 5.1% for the three

months ended December 31, 2022 to 4.9% for the three months ended December 31, 2023.

and amortization expense decreased to $264,374 compared to $693,278 for the three months ended December 31, 2022 or a decrease of $428,904

The gross profit percentage for the three

months ended March 31, 2024 also increased to 48.3% from 34.8% for the three months ended March 31, 2023.

The cost of sales was $7,989,696

for the three months ended March 31, 2024 compared to $8,801,360 for the three months ended March 31, 2023 for a decrease of $811,664

and on a constant currency basis a decrease of $427,511.

As a percentage of sales, cost of sales decreased from 65.2% for the three months

ended March 31, 2023 to 51.7% for the three months ended March 31, 2024.

and consultant fees decreased by $649,904 from $6,453,814 for the three months ended March 31, 2023 to $5,803,910 for the three months

ended March 31, 2024 and on a constant currency basis decreased by $377,178.

As a percentage of sales, salaries and consultant expense

decreased from 47.8% for the three months ended March 31, 2023 to 37.5% for the three months ended March 31, 2024.

expenses were $799,560 for the three months ended March 31, 2024 compared to $724,431 for the three months ended March 31, 2023 for an

increase of $75,129 with an increase in constant currency of $119,840.

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

for the current implementations.

As a percentage of sales, travel expense slightly decreased from 5.4% for the three months ended March

31, 2023 to 5.2% for the three months ended March 31, 2024.

and amortization expense decreased to $250,126 compared to $602,829 for the three months ended March 31, 2023 or a decrease of $352,703

and on a constant currency basis a decrease of $334,639.

The decrease is primarily attributed to the full amortization of capitalized

software costs in the quarter ending December 31, 2023.

costs increased to $1,146,396 for the three months ended December 31, 2023 compared to $977,148 for the three months ended December 31,

software costs in the quarter ending March 31, 2024.

costs increased to $1,136,100 for the three months ended March 31, 2024 compared to $1,020,286 for the three months ended March 31, 2023

or an increase of $115,814 and on a constant currency basis an increase of $164,466.

expenses were $6,148,905 for the three months ended December 31, 2023 compared to $6,188,977, for the three months ended December 31,

2022 for a decrease of $40,072 and on a constant currency basis an increase of $521,827.

expenses were $6,156,917 for the three months ended March 31, 2024 compared to $5,635,464, for the three months ended March 31, 2023

for an increase of $521,453 and on a constant currency basis an increase of $692,778.

As a percentage of sales, it decreased from 41.7%

50.0% to 40.4%.

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

professional services, and other general and administrative expenses, offset by a decrease in selling and marketing expenses.

expenses were $1,784,510 for the three months ended December 31, 2023 compared to $2,007,462, for the three months ended December 31,

2022 for a decrease of $222,952 and on a constant currency basis a decrease of $52,890.

and administrative expenses were $3,858,195 for the three months ended December 31, 2023 compared to $3,510,389 for the three months

ended December 31, 2022 or an increase of $347,806 and on a constant currency basis an increase of $629,121.

During the three months

ended December 31, 2023, salaries increased by approximately $154,192 and increased $350,096 on a constant currency basis, and other

general and administrative expenses increased approximately $193,6124 or increased by $279,025 on a constant currency basis.

and development cost was $341,411 for the three months ended December 31, 2023 compared to $472,904, for the three months ended December

31, 2022 for a decrease of $131,493 and on a constant currency basis a decrease of $44,230.

The increase in operating expenses was primarily due to increases in selling and marketing expenses, salaries and wages and

other general and administrative expenses.

expenses were $1,830,025 for the three months ended March 31, 2024 compared to $1,643,853, for the three months ended March 31, 2023

for an increase of $186,172 and on a constant currency basis an increase of $254,342.

and administrative expenses were $3,840,146 for the three months ended March 31, 2024 compared to $3,509,212 for the three months ended

March 31, 2023 or an increase of $330,934 and on a constant currency basis an increase of $406,122.

During the three months ended March

31, 2024, salaries increased by approximately $214,275 and increased $265,787 on a constant currency basis, and other general and administrative

expenses increased approximately $116,659 or increased by $140,335 on a constant currency basis.

and development cost was $345,582 for the three months ended March 31, 2024 compared to $302,262, for the three months ended March 31,

2023 for an increase of $43,320 and on a constant currency basis an increase of $67,526.

from Operations

from operations was $1,026,832 for the three months ended December 31, 2023 compared to a loss of $3,046,514 for the three months ended

December 31, 2022.

from operations was $1,317,903 for the three months ended March 31, 2024 compared to a loss of $930,435 for the three months ended March

This represents an increase in income from operations of $2,248,338 with an increase in income from operations of $1,831,285

$2,251,204 on a constant currency basis for the three months ended December 31, 2023 compared with the three months ended December 31,

As a percentage of sales, income from operations was 6.7% for the three months ended December 31, 2023 compared to loss of 24.6%

for the three months ended December 31, 2022.

on a constant currency basis for the three months ended March 31, 2024 compared with the three months ended March 31, 2023.

As a percentage

of sales, income from operations was 8.5% for the three months ended March 31, 2024 compared to loss of 6.9% for the three months ended

March 31, 2023.

Income and Expense

income was $106,036 for the three months ended December 31, 2023 compared to $864,607 for the three months ended December 31, 2022.

This represents a decrease of $758,571 with a decrease of $738,519 on a constant currency basis.

The decrease is primarily due to

the foreign currency exchange transactions.

expense was $855,464 for the three months ended March 31, 2024 compared to other income of $5,400,684 for the three months ended March

This represents a decrease in other income of $6,256,148 with a decrease of $6,318,621 on a constant currency basis.

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;

therefore, the currency fluctuations will lead to foreign currency exchange gains or losses depending on the value of the PKR

1 unchanged sentence

dollar and the Euro.

During the three months ended December 31, 2023, we recognized a loss of $14,617 in

foreign currency exchange transactions compared to a gain of $657,223 for the three months ended December 31, 2022.

During the three

months ended December 31, 2023, the value of the U.S.

dollar decreased 2.8% and the Euro increased 1.5%, compared to the PKR.

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

dollar decreased 0.7% and the Euro increased 8.5%, compared to the

During the three months ended March 31, 2024, we recognized a loss of $963,887 in foreign currency

exchange transactions compared to a gain of $5,385,591 for the three months ended March 31, 2023.

During the three months ended March

31, 2024, the value of the U.S.

dollar and the Euro decreased 0.6% and 2.8%, compared to the PKR.

During the three months ended March

31, 2023, the value of the U.S.

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

Non-controlling

the three months ended December 31, 2023, the net income attributable to non-controlling interest was $574,499, compared to a net

loss attributable to non-controlling interest of $309,037 for the three months ended December 31, 2022.

The increase in

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

the three months ended March 31, 2024, the net loss attributable to non-controlling interest was $11,679, compared to a net income attributable

to non-controlling interest of $1,697,908 for the three months ended March 31, 2023.

The decrease in non-controlling interest is primarily

due to the decrease in net income from NetSol PK and an increase in net loss from NetSol Innovation.

income (loss) attributable to NetSol

net income was $408,316 for the three months ended December 31, 2023 compared to a net loss of $2,092,926 for the three months ended

December 31, 2022.

This is an increase in net income of $2,501,242 with an increase of $1,191,078 on a constant currency basis, compared

to the prior year.

For the three months ended December 31, 2023, net income per share was $0.04 for basic and diluted shares compared

to net loss per share of $0.19 for basic and diluted shares for the three months ended December 31, 2022.

Months Ended December 31, 2023 Compared to the Six Months Ended December 31, 2022

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

Net income was $327,549 for the three months ended March 31, 2024 compared to $2,544,623 for the three months ended March 31, 2023.

is a decrease in net income of $2,217,074 with a decrease of $2,579,348 on a constant currency basis, compared to the prior year.

the three months ended March 31, 2024, net income per share was $0.03 for basic and diluted shares compared to net income per share of

$0.23 for basic and diluted shares for the three months ended March 31, 2023.

Months Ended March 31, 2024 Compared to the Nine Months Ended March 31, 2023

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

31, 2024 and 2023 as a percentage of revenues.

For the Six Months

Ended December 31,

For the Nine Months

Ended March 31,

Net Revenues:

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Total other income (expenses)

Net income (loss) before income taxes

Net income before income taxes

Income tax provision

Net income (loss)

Non-controlling interest

Net income (loss) attributable to NetSol

$ (2,713,655 )

Net income (loss) per share:

13 unchanged sentences

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)

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 Six Months

For the Nine Months

(Unfavorable) Change in

Change due to

(Unfavorable)

Ended December 31,

Favorable (Unfavorable)

Ended March 31,

Net Revenues:

3 unchanged sentences

$ (5,873,140 )

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

revenues for the nine months ended March 31, 2024 and 2023 are broken out among the segments as follows:

North America

fees for the six months ended December 31, 2023 were $4,270,902 compared to $265,844 for the six months ended December 31, 2022

reflecting an increase of $4,005,058 with an increase in constant currency of $4,037,015.

During the six months ended December 31,

2023, we recognized approximately $2,800,000 related to the sale of our NFS Ascent® CMS software to a renowned US auto

manufacturer based in China and we recognized approximately $1,142,000 related to the license renewal with an existing

During the six months ended December 31, 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 six months ended December 31, 2023 were $13,340,024 compared to $12,519,503 for the six months ended December

fees for the nine months ended March 31, 2024 were $4,829,242 compared to $2,248,829 for the nine months ended March 31, 2023 reflecting

an increase of $2,580,413 with an increase in constant currency of $2,631,044.

During the nine months ended March 31, 2024, we recognized

approximately $2,800,000 related to the sale of our NFS Ascent® CMS software to a renowned US auto manufacturer based in China and

we recognized approximately $1,142,000 related to the license renewal with an existing customer, and we recognized approximately $465,000

related to the additional sale of our NFS Ascent® CMS software to a renowned German auto manufacturer based in China.

nine months ended March 31, 2023, we recognized approximately $465,000 related to the additional sale of our NFS Ascent® CMS software

to a renowned German auto manufacturer based in China, 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.

and support fees for the nine months ended March 31, 2024 were $20,480,382 compared to $19,175,585 for the nine months ended March 31,

2023 reflecting an increase of $1,304,797 with an increase in constant currency of $1,326,644.

3 unchanged sentences

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

income for the six months ended December 31, 2023 was $11,869,196 compared to $12,311,130 for the six months ended December 31, 2022

reflecting a decrease of $441,934 with a decrease in constant currency of $393,906.

The decrease is due to the decrease in fees associated

income for the nine months ended March 31, 2024 was $19,635,014 compared to $17,178,452 for the nine months ended March 31, 2023 reflecting

an increase of $2,456,562 with an increase in constant currency of $2,593,634.

The increase is due to the increase in fees associated

with current implementations.

gross profit was $13,337,754, for the six months ended December 31, 2023 compared with $7,394,460 for the six months ended December 31,

gross profit was $20,812,574, for the nine months ended March 31, 2024 compared with $12,099,489 for the nine months ended March 31,

This is an increase of $8,713,085 with an increase in constant currency of $5,707,400.

The gross profit percentage for the six

months ended December 31, 2023 also increased to 45.2% from 29.5% for the six months ended December 31, 2022.

The gross profit percentage for the nine

months ended March 31, 2024 increased to 46.3% from 31.3% for the nine months ended March 31, 2023.

The cost of sales was $24,132,064

for the six months ended December 31, 2023 compared to $17,702,017 for the six months ended December 31, 2022 for a decrease of $1,559,649

for the nine months ended March 31, 2024 compared to $26,503,377 for the nine months ended March 31, 2023 for a decrease of $2,371,313

and on a constant currency basis an increase of $843,921.

As a percentage of sales, cost of sales decreased from 70.5% for the six

months ended December 31, 2022 to 54.8% for the six months ended December 31, 2023.

and consultant fees decreased by $1,167,401 from $13,028,906 for the six months ended December 31, 2022 to $11,861,505 for the six months

ended December 31, 2023 and on a constant currency basis increased by $834,064.

The increase is due to annual salary raises.

As a percentage

of sales, salaries and consultant expense decreased from 51.9% for the six months ended December 31, 2022 to 40.2% for the six months

ended December 31, 2023.

expense was $1,408,439 for the six months ended December 31, 2023 compared to $1,027,643 for the six months ended December 31, 2022 for

an increase of $380,796 with an increase in constant currency of $618,393.

As a percentage of sales, cost of sales decreased from 68.7% for the nine months

ended March 31, 2023 to 53.7% for the nine months ended March 31, 2024.

and consultant fees decreased by $1,817,305 from $19,482,720 for the nine months ended March 31, 2023 to $17,665,415 for the nine

months ended March 31, 2024 and on a constant currency basis increased by $456,886.

The increase on a constant currency basis is due

to annual salary raises.

As a percentage of sales, salaries and consultant expense decreased from 50.5% for the nine months ended

March 31, 2023 to 39.3% for the nine months ended March 31, 2024.

expense was $2,207,999 for the nine months ended March 31, 2024 compared to $1,752,074 for the nine months ended March 31, 2023 for an

increase of $455,925 with an increase in constant currency of $738,233.

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

as countries begin lifting travel restrictions.

and amortization expense decreased to $657,357 compared to $1,347,327 for the six months ended December 31, 2022 or a decrease of $689,970

for current implementations.

and amortization expense decreased to $907,483 compared to $1,950,156 for the nine months ended March 31, 2023 or a decrease of $1,042,673

and on a constant currency basis a decrease of $836,777.

costs decreased to $2,215,067 for the six months ended December 31, 2023 compared to $2,298,141 for the six months ended December 31,

2022 or a decrease of $83,074 and on a constant currency basis an increase of $321,113.

The increase on a constant currency basis is

mainly due to increases in computer costs.

expenses were $11,960,293 for the six months ended December 31, 2023 compared to $12,337,165, for the six months ended December 31, 2022

for a decrease of $376,872 and on a constant currency basis an increase of $806,689.

The decrease is primarily attributed to the full amortization of capitalized

software costs in the quarter ending March 31, 2024.

costs increased to $3,351,167 for the nine months ended March 31, 2024 compared to $3,318,427 for the nine months ended March 31, 2023

or an increase of $32,740 and on a constant currency basis an increase of $485,579.

The increase on a constant currency basis is mainly

due to increases in computer costs.

expenses were $18,117,210 for the nine months ended March 31, 2024 compared to $17,972,629, for the nine months ended March 31, 2023

for an increase of $144,581 and on a constant currency basis an increase of $1,499,467.

As a percentage of sales, it decreased from 46.6%

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

services and general and administrative expenses offset by a decrease in research and development costs.

expenses were $3,493,375 for the six months ended December 31, 2023 compared to $3,769,639, for the six months ended December 31, 2022

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

administrative expenses, and research and development costs.

expenses were $5,323,400 for the nine months ended March 31, 2024 compared to $5,413,492, for the nine months ended March 31, 2023 for

a decrease of $90,092 and on a constant currency basis an increase of $356,925.

and administrative expenses were $11,284,642 for the nine months ended March 31, 2024 compared to $10,745,031 for the nine months ended

March 31, 2023 or an increase of $539,611 and on a constant currency basis an increase of $1,197,129.

During the nine months ended March

31, 2024, salaries increased by approximately $447,568 and increased $900,149 on a constant currency basis, and other general and administrative

expenses increased approximately $92,043 and increased $296,980 on a constant currency basis.

and development cost was $1,065,412 for the nine months ended March 31, 2024 compared to $1,244,793, for the nine months ended March

31, 2023 for a decrease of $179,381 and on a constant currency basis an increase of $28,575.

and administrative expenses were $7,444,496 for the six months ended December 31, 2023 compared to $7,235,819 for the six months ended December 31, 2022 or

an increase of $208,677 and on a constant currency basis an increase of $791,007.

During the six months ended December 31, 2023, salaries

increased by approximately $233,293 and increased $634,362 on a constant currency basis, and other general and administrative expenses

decreased approximately $24,616 and increased $156,645 on a constant currency basis.

and development cost was $719,830 for the six months ended December 31, 2023 compared to $942,531, for the six months ended December

31, 2022 for a decrease of $222,701 and on a constant currency basis a decrease of $38,951.

from Operations

from operations was $1,377,461 for the six months ended December 31, 2023 compared to a loss from operations of $4,942,705 for the six

months ended December 31, 2022.

This represents an increase in income from operations of $6,320,166 with an increase in income from operations

of $2,376,648 on a constant currency basis for the six months ended December 31, 2023 compared with the six months ended December 31,

As a percentage of sales, income from operations was 4.7% for the six months ended December 31, 2023 compared to loss from operations

of 19.7% for the six months ended December 31, 2022.

from operations was $2,695,364 for the nine months ended March 31, 2024 compared to a loss from operations of $5,873,140 for the

nine months ended March 31, 2023.

This represents an increase in income from operations of $8,568,504 with an increase in income

from operations of $4,207,933 on a constant currency basis for the nine months ended March 31, 2024 compared with the nine months

ended March 31, 2023.

As a percentage of sales, income from operations was 6.0% for the nine months ended March 31, 2024 compared to

a loss from operations of 15.2% for the nine months ended March 31, 2023.

Income and Expense

income was $168,365 for the six months ended December 31, 2023 compared to $2,516,175 for the six months ended December 31, 2022.

This represents a decrease of $2,347,810 with a decrease of $2,308,740 on a constant currency basis.

The majority of the contracts

with NetSol PK are either in U.S.

expense was $687,099 for the nine months ended March 31, 2024 compared to other income of $7,916,859 for the nine months ended March

This represents a decrease in other income of $8,603,958 with a decrease of $8,627,361 on a constant currency basis.

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

dollars or Euros;

therefore, the currency fluctuations will lead to foreign currency exchange

gains or losses depending on the value of the PKR compared to the U.S.

therefore, 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 six months ended December 31,

2023, we recognized a loss of $148,870 in foreign currency exchange transactions compared to a gain of $1,972,928 for the six months

ended December 31, 2022.

During the six months ended December 31, 2023, the value of the U.S.

During the nine months ended March

31, 2024, we recognized a loss of $1,112,757 in foreign currency exchange transactions compared to a gain of $7,358,519 for the nine

months ended March 31, 2023.

During the nine months ended March 31, 2024, the value of the U.S.

dollar and the Euro decreased 3.2% and

4.0%, respectively, compared to the PKR.

During the six months ended December 31, 2022, the value of the U.S.

dollar and the Euro

increased 10.3% and 12.9%, respectively, compared to the PKR.

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

dollar and the Euro increased

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

Non-controlling

the six months ended December 31, 2023, the net income attributable to non-controlling interest was $834,672, compared to a net loss

of $126,279 for the six months ended December 31, 2022.

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

net income of NetSol PK.

loss attributable to NetSol

net income was $439,206 for the six months ended December 31, 2023 compared to a net loss of $2,713,655 for the six months ended December

This is an increase of $3,152,861 with an increase of $355,783 on a constant currency basis, compared to the prior year.

the six months ended December 31, 2023, net income per share was $0.04 for basic and diluted shares compared to net loss per share of

$0.24 for basic and diluted shares for the six months ended December 31, 2022.

the nine months ended March 31, 2024, the net income attributable to non-controlling interest was $822,993, compared to $1,571,629 for

the nine months ended March 31, 2023.

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

PK and an increase in net loss from NetSol Innovation.

income (loss) attributable to NetSol

Net income was $766,755 for the nine months ended March 31, 2024 compared to a net loss of $169,032 for the nine months ended March 31,

This is an increase of $935,787 with a decrease of $2,223,565 on a constant currency basis, compared to the prior year.

nine months ended March 31, 2024, net income per share was $0.07 for basic and diluted shares compared to net loss per share of $0.01

for basic and diluted shares for the nine months ended March 31, 2023.

Financial Measures

4 unchanged sentences

define the non-GAAP measures as follows:

is GAAP net income or loss before net interest expense, income tax expense, depreciation and amortization.

is GAAP net income or loss before net interest expense, income tax expense, depreciation

and amortization.

adjusted EBITDA is EBITDA plus stock-based compensation expense.

EBITDA per basic and diluted share – Adjusted EBITDA allocated to common stock divided by the weighted average shares outstanding

and diluted shares outstanding.

EBITDA per basic and diluted share – Adjusted EBITDA allocated to common stock divided

by the weighted average shares outstanding and diluted shares outstanding.

use non-GAAP measures internally to evaluate the business and believe that presenting non-GAAP measures provides useful information to

21 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 six months ended December 31, 2023 and 2022 are as follows:

GAAP measures for the three and nine months ended March 31, 2024 and 2023 are as follows:

For the Three Months

For the Six Months

Ended December 31,

For the nine Months

Ended March 31,

Net Income (loss) attributable to NetSol

$ (2,092,926 )

$ (2,713,655 )

Non-controlling interest

2 unchanged sentences

Interest (income)

$ (1,397,950 )

$ (1,107,817 )

Non-cash stock-based compensation

Adjusted EBITDA, gross

$ (1,333,617 )

Less non-controlling interest (a)

Adjusted EBITDA, net

$ (1,326,254 )

$ (1,353,822 )

Weighted Average number of shares outstanding

1 unchanged sentence

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 $15,659,516 at December 31, 2023, compared to $15,533,254 at June 30, 2023.

cash provided by operating activities was $604,684 for the six months ended December 31, 2023 compared to $1,689,543 for the six months

ended December 31, 2022.

At December 31, 2023, we had current assets of $40,077,006 and current liabilities of $17,812,164.

We had accounts

receivable of $5,975,716 at December 31, 2023 compared to $11,714,422 at June 30, 2023.

We had revenues in excess of billings of $17,033,684

at December 31, 2023 compared to $12,377,677 at June 30, 2023 of which $734,397 and $nil is shown as long term as of December 31, 2023

and June 30, 2023, respectively.

The long-term portion was discounted by $85,488 and $nil at December 31, 2023 and June 30, 2023, respectively,

using the discounted cash flow method with an interest rate of 7.24%.

During the six months ended December 31, 2023, our revenues in

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

totals for accounts receivable and revenues in excess of billings decreased by $1,082,699 from $24,092,099 at June 30, 2023 to $23,009,400

at December 31, 2023.

Accounts payable and accrued expenses, and current portions of loans and lease obligations amounted to $6,713,920

and $5,982,466, respectively at December 31, 2023.

cash position was $12,338,642 at March 31, 2024, compared to $15,533,254 at June 30, 2023.

cash used in operating activities was $3,602,677 for the nine months ended March 31, 2024 compared to cash provided by operating activities

of $2,564,619 for the nine months ended March 31, 2023.

At March 31, 2024, we had current assets of $46,223,061 and current liabilities

of $22,894,164.

We had accounts receivable of $15,826,210 at March 31, 2024 compared to $11,714,422 at June 30, 2023.

We had revenues

in excess of billings of $16,412,388 at March 31, 2024 compared to $12,377,677 at June 30, 2023 of which $752,582 and $nil is shown as

long term as of March 31, 2024 and June 30, 2023, respectively.

The long-term portion was discounted by $73,867 and $nil at March 31,

2024 and June 30, 2023, respectively, using the discounted cash flow method with an interest rate of 7.24%.

During the nine months ended

March 31, 2024, 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 increased by $8,146,499 from $24,092,099

at June 30, 2023 to $32,238,598 at March 31, 2024.

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 six months ended December 31, 2023 and 2022 were 147 and 162 days, respectively, for each period.

amounted to $6,707,937 and $6,047,511, respectively at March 31, 2024.

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 nine months ended March 31, 2024 and 2023 were 172 and 167 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 $569,336 for the six months ended December 31, 2023, compared to $1,182,042 for the six months

ended December 31, 2022.

We had purchases of property and equipment of $570,584 compared to $1,252,325 for the six months ended December

cash used in financing activities was $27,359 for the six months ended December 31, 2023, compared to $537,180 for the six months ended

December 31, 2022.

During the six months ended December 31, 2023, we had net payments for bank loans and finance leases of $162,482 compared

to $537,180 for the six months ended December 31, 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 statements.

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

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

cash used in investing activities was $822,451 for the nine months ended March 31, 2024, compared to $1,421,657 for the nine months ended

March 31, 2023.

We had purchases of property and equipment of $948,337 compared to $1,575,059 for the nine months ended March 31, 2023.

cash provided by financing activities was $33,612 for the nine months ended March 31, 2024, compared to cash used in financing activities

of $517,349 for the nine months ended March 31, 2023.

The nine months ended March 31, 2024 and 2023 included the cash inflow of $340,847

and $270,292, respectively, from bank proceeds.

During the nine months ended March 31, 2024, we had net payments for bank loans and finance

leases of $307,235 compared to $787,641 for the nine months ended March 31, 2023.

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 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

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 December 31, 2023, we had approximately

As of March 31, 2024, we had approximately

$12.3 million of cash, cash equivalents and marketable securities of which approximately $11.8 million is held by our foreign subsidiaries.

45 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