What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-09-30 compared with 2023-09-22 · 685 added, 766 removed, 1948 unchanged (43% of the section changed)

49 unchanged sentences

Michael Francis.

Henry Tolentino

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

Michael Francis was nominated and elected to the Board.

the fiscal year 2024, the Audit Committee, the Compensation Committee and the Nominating and Corporate Government Committee were structured

2 unchanged sentences

Caton and Mr.

Tolentino as members.

Francis as members.

The Compensation Committee

2 unchanged sentences

Kazmi and Mr.

Tolentino as its members.

The Nominating and Corporate Governance Committee

consisted of Mr.

Tolentino, as Chair, with Mr.

Francis as its members.

The Nominating and Corporate Governance Committee consisted

Francis, as Chair, with Mr.

Caton and Mr.

Kazmi as its members.

In September 2023, Mr.

Michael Francis was appointed

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

table below provides the membership for each of the committees during Fiscal Year 2024.

Tolentino * (I)

Francis ** (I) (N)

Tolentino’s term ended June 2023.

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

Denotes an Independent Director.

Denotes the Chairperson of the Committee.

Francis became the Nominating Committee Chairman in September 2023.

an Independent Director.

the Chairperson of the Committee.

AND EXECUTIVE OFFICERS

8 unchanged sentences

directors and executive officers of the Company are as follows:

Year First Elected

as an Officer or

Position Held with the Registrant

Family Relationship

Najeeb Ghauri

Chief Executive Officer, Chairman and Director

Brother of Naeem Ghauri

Brother of Najeeb Ghauri

Chief Financial Officer

First Elected as an Officer or Director

Held with the Registrant

Executive Officer, Chairman and Director

of Naeem Ghauri

of Najeeb Ghauri

Financial Officer

V.P., Legal and Corporate Affairs;

1 unchanged sentence

Corporate Counsel

Henry Tolentino

Syed Kausar Kazmi

Michael Francis

Experience of Officers and Directors:

121 unchanged sentences

has maintained its listing since then to current.

After nearly two decades with the Company, Ms.

Farsai continues to work part-time as

Corporate Counsel overseeing the Company’s insurance as well as day to day corporate legal needs.

After two decades with the Company, Ms.

Farsai continues to work part-time as Corporate

Counsel overseeing the Company’s insurance as well as day to day corporate legal needs.

has also obtained many of NETSOL’s various trademarks.

11 unchanged sentences

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

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

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

General Motors.

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

Tolentino held several executive positions at Toyota Leasing

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

Toyota Leasing, Mr.

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

He began his career in the auto finance

industry with General Motors Acceptance Corporation.

Tolentino served as the Chair of the Nomination

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

and Qualifications :

Tolentino has significant knowledge in international automobile manufacturing, business strategy and managing

growth in the automotive industry.

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

KAUSAR KAZMI joined the Board of Directors in 2019.

19 unchanged sentences

business, expending its focus on business development.

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

Francis brings over 30 years of expertise

in the banking and finance industry.

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

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

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

UK PLC, until October 2020.

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

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

FRANCIS served his first year on the Board of Directors in 2023.Mr.

Francis brings over 30 years of expertise in the banking and

finance industry.

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

finance, software, and private equity businesses.

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

October 2020.

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

PLC, which is a significant client of NETSOL.

From November 2022 to May 2023, Mr.

Francis served as an interim executive

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

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

Francis also held senior management positions at Barclays Bank PLC and

ANZ Investment Bank.

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

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

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

He also served as the Chair of the Finance

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

Francis served as an interim executive director for

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

business and to meet VLS’s FCA requirements.

Francis also held senior management positions at Barclays Bank PLC and ANZ Investment

Francis received his BSc in Biochemistry with II Class Honors from The University College of Wales, Aberystwyth in 1987.

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

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

He also served as the Chair of the Finance Committee

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

In September 2023, Mr.

4 unchanged sentences

of Lease and Finance as well as management proficiency.

of Business Conduct & Ethics

Company adopted its Code of Business Conduct & Ethics, as amended and restated on September 9, 2013, applicable to every officer,

director and employee of the Company, including, but not limited to the Company’s principal executive officer, principal financial

officer, and principal accounting officer or controller, or persons performing similar functions.

Our Code of Business Conduct &

Ethics has been posted on our website and may be viewed at http://ir.netsoltech.com/governance-docs .

of Ethics & Insider Trading Policy

Company adopted its Code of Ethics and Business Conduct, as amended and restated on September 9, 2013, applicable to every officer, director and

employee of the Company, including, but not limited to the Company’s principal executive officer, principal financial officer,

and principal accounting officer or controller, or persons performing similar functions.

Our Code of Business Conduct & Ethics

has been posted on our website and may be viewed at https://ir.netsoltech.com/governance-docs .

Our Company has an Insider Trading

Policy which explains the insider trading rules to all employees and proscribes employee conduct as it relates to trading in shares

of stock of the Company.

Our insider trading policy is set forth in full in the Company’s Code of Ethics and Business Conduct.

Company has an Audit Committee whose members are the independent directors of the Company, specifically, Mr.

56 unchanged sentences

30 th of the fiscal year in which it was earned.

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

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

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

and Evolving Compensation Practices

1 unchanged sentence

we have adopted and/or maintained certain policies and practices that are in keeping with “best practices” in many areas.

The Compensation Committee engages an independent compensation consultant to evaluate our chief executive

officer’s executive compensation practices in comparison to a peer group.

We do not provide excessive executive perquisites to our named executive officers.

Our incentive plans expressly prohibit repricing of options (directly or indirectly) without prior shareholder

Our policy on the prevention of insider trading prohibits various types of transactions involving Company

stock or securities, including short sales, options trading, hedging, margin purchases and pledges.

Our stock ownership guidelines require our executive officers to align their long-term interests with those

of our stockholders.

Our policy prohibits the named executive officers from selling any newly issued shares for a period of

three months, in an open market transaction.

Beginning with our fiscal year 2019 to current, we modified our compensation practices for our CEO to tie

a significant portion to financial results both on a top line and bottom-line basis.

Compensation Committee periodically engages an independent compensation consultant to evaluate our chief executive officer’s

executive compensation practices in comparison to a peer group.

do not provide excessive executive perquisites to our named executive officers.

incentive plans expressly prohibit repricing of options (directly or indirectly) without prior shareholder approval.

policy on the prevention of insider trading prohibits various types of transactions involving Company stock or securities, including

short sales, options trading, hedging, margin purchases and pledges.

stock ownership guidelines require our executive officers to align their long-term interests with those of our

stockholders.

policy prohibits the named executive officers from selling any newly issued shares for a period of three months, in an open market

with our fiscal year 2019 to current, we modified our compensation practices for our CEO to tie a significant portion to financial

results both on a top line and bottom-line basis.

Compensation Overview

1 unchanged sentence

awards at the discretion of the Compensation Committee

term equity in the form of time-based restricted stock;

to participate generally in all group health and welfare benefit programs and tax-qualified

retirement plans on the same basis as applicable to all of our employees.

purchase options;

to participate generally in all group health and welfare benefit programs and tax-qualified retirement plans on the same basis as

applicable to all of our employees.

response to discussions we have had with certain shareholders and given the percentage voting in favor of our executive compensation,

2 unchanged sentences

equity in the form of time and objective performance targets;

to participate generally in all group health and welfare benefit programs and tax-qualified

retirement plans on the same basis as applicable to all of our employees.

to participate generally in all group health and welfare benefit programs and tax-qualified retirement plans on the same basis as

applicable to all of our employees.

Compensation Committee administers the cash and non-cash compensation programs applicable to our executive officers.

8 unchanged sentences

Compensation Consultant

Compensation Committee retained Compensation Resources, Inc.

Compensation Committee has retained Compensation Resources, Inc.

as its independent compensation consultant.

58 unchanged sentences

about the size and components of compensation, we anticipate our philosophy to continue on the basis of a pay-for-performance philosophy.

establishing the compensation of our named Chief Executive Officer, we based the amounts primarily on the market data and advice provided

by Compensation Resources, Inc.

with respect to the compensation paid to individuals who perform substantially similar functions within

the peer group companies.

In connection with the other named executive officers, we also relied on the recommendations of the Chief Executive

Officer’s analysis relative to those individuals’ performance and compensation.

We also examined the outstanding stock options

and equity grants held by the executive officers for the purpose of considering the retention value of any additional equity awards.

establishing the compensation of our named Chief Executive Officer and President, we based the amounts primarily on the market data and

advice provided by Compensation Resources, Inc.

with respect to the compensation paid to individuals who perform substantially similar

functions within the peer group companies.

In connection with the other named executive officers, we also relied on the recommendations

of the Chief Executive Officer’s analysis relative to those individuals’ performance and compensation.

We also examined the

outstanding stock options and equity grants held by the executive officers for the purpose of considering the retention value of any

additional equity awards.

a general guideline, for our named executive officers, we aim to set base salary, cash compensation and total compensation at approximately

16 unchanged sentences

Ghauri’s base

salary and allowances will remain the same for fiscal year 2024.

Almond’s base salary for fiscal year 2023 was $226,000 and

in addition he received $24,000 in allowances.

salary will be $840,000 and allowances will remain the same for fiscal year 2025.

Almond’s base salary for fiscal year 2024

was $226,000 and in addition he received $24,000 in allowances.

For fiscal year 2025, Mr.

Almonds salary will remain the same.

McGlasson salary for

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

The Compensation Committee determined that

salary alone was an adequate basis for short term compensation, and that equity incentives would be used for the long-term elements of

incentive programs for Ms.

Almonds salary will be $275,000.

salary for fiscal year 2024 was $233,622 and her base salary for fiscal year 2025 will be $252,312.

The Compensation Committee determined

that salary alone was an adequate basis for short term compensation, and that equity incentives would be used for the long-term elements

of incentive programs for Ms.

McGlasson and Mr.

11 unchanged sentences

table on page 46.

For 2023, based on structured KPI’s by the compensation committee, Mr.

Ghauri did not earn any bonus.

structure as discussed below on page 41.

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

used in fiscal 2023 continues to be a proper measure for measuring Mr.

Ghauri’s performance in that it encourages his participation

in revenue generating activities and continues to incentivize him to monitor and maximize cost efficiency.

For 2024, based on structured key performance indices (KPI)’) by the Compensation Committee, Mr.

Ghauri earned

a bonus of $472,890.

See bonus structure as discussed below on page 44.

The Compensation Committee determined that Gross Revenue and

Income from Operations structure used in fiscal 2024 continues to be a proper measure for measuring Mr.

Ghauri’s performance in

that it encourages his participation in revenue generating activities and continues to incentivize him to monitor and maximize cost efficiency.

Equity Incentive Compensation

39 unchanged sentences

revenue recognition policy.

from Operations

from Operations %

Ghauri’s bonus for the fiscal year 2024 will be based on the same criteria stated above.

Ghauri’s bonus for fiscal year 2025 shall be based on total revenues and income from operations on a graduated basis.

The following

table demonstrates the graduated percentage of bonus that Mr.

Ghauri will be eligible to earn based on the percentage of the goal achieved.

Bonuses will be paid 60% in cash and 40% in shares of common stock valued on June 30 of the fiscal year in question The bonus shall be

calculated based on the increase in annual revenues compared to the baseline revenue.

The baseline revenue for the purpose of this bonus

calculation shall be defined as the highest annual revenue achieved in any previous year beginning with Fiscal Year End June 30, 2024.

Under no circumstances shall the baseline revenue be adjusted downward, even if annual revenues in subsequent years fall below this highest

annual revenue mark.

Allocated Bonus %

Increase in revenues

Income from Operations

Income from Operations %

and Other Personal Benefits

64 unchanged sentences

with the of Financial Accounting Standards Board’s Accounting Standards Codification Topic 718, Compensation – Stock Compensation .

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

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

executive officers of the Company.

and Principle

following table shows the compensation for the fiscal years ended June 30, 2024 and 2023, earned by our Chairman and Chief Executive

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

of the Company.

Name and Principle Position

Fiscal Year Ended

Stock Awards ($) (1)

Option Awards ($)

All Other Compensation ($)

Najeeb Ghauri

$ 472,890 (2)

$ 200,000 (3)

CEO & Chairman

5 unchanged sentences

Secretary, General Counsel

There were no stock awards during the three years presented.

There were no stock awards during the two years presented.

Bonus was awarded based on Mr.

Ghauri’s bonus structure as detailed on page 42.

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

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

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

insurance premiums, and home office allowance for the fiscal years ended June 30, 2024 and 2023.

Consists of $780,000 and $610,068 base salary and $140,000 and $192,815 commission for the fiscal years ended June 30, 2024 and 2023,

respectively.

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

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

Naeem Ghauri’s compensation agreement, he received $nil and $47,220 in allowances, perquisites and benefits for the fiscal

years ended June 30, 2024 and 2023, respectively.

Consists of $13,713 and $12,871 paid for medical and dental insurance premiums for participation in the health insurance program for

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

2023 and 2022.

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

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

the fiscal years ended June 30, 2024 and 2023, respectively, and $24,000 paid as car allowance for the years ended June 30, 2024 and

Consists of $13,073 and $11,719 paid for medical and dental insurance premiums for participation in the health insurance program for

the fiscal years ended June 30, 2024 and 2023, respectively.

of Plan-Based Awards

were no stock grants during the three years presented.

were no stock grants during the two years presented.

of Summary Compensation Table

8 unchanged sentences

Agreement with Najeeb Ghauri

January 1, 2007, the Company entered into an Employment Agreement with our Chief Executive Officer, Najeeb Ghauri (the “CEO Agreement”).

The CEO Agreement was amended effective January 1, 2008, January 1, 2010, July 25, 2013 and again on June 30, 2014.

Changes made in the

June 30, 2014 amendment are effective July 1, 2014.

Pursuant to the CEO Agreement, as amended, between Mr.

Ghauri and the Company (the

“CEO Agreement”), the Company agreed to employ Mr.

Ghauri as its Chief Executive Officer for a five-year term.

employment automatically renews for 12 additional months unless notice of intent to terminate is received by either party at least 6

months prior to the end of the term.

July 1, 2024, the Company entered into an amended and restated employment agreement with our Chief Executive Officer, Najeeb Ghauri (the

“CEO Agreement”).

The CEO Agreement was amended solely to place the base salary and bonus structure for Mr.

Ghauri into the

Appendix to the CEO Agreement.

All other material terms remain unchanged.

From the agreement entered into with Mr.

Ghauri in January

1, 2007 and amended thereafter.

Pursuant to the CEO Agreement between Mr.

Ghauri and the Company the Company agreed to employ Mr.

as its Chief Executive Officer for a five-year term.

The term of employment automatically renews for 12 additional months unless notice

of intent to terminate is received by either party at least 6 months prior to the end of the term.

For the fiscal year 2024, Mr.

Ghauri is entitled to an annualized compensation of $900,000 consisting

of salary, allowances, perquisites and benefits, and is eligible for annual bonuses based on the bonus structure adopted by the Compensation

Committee as described in Item 11 under Executive Compensation beginning on page 37.

is entitled to an annualized compensation of $900,000 consisting of salary, allowances, perquisites and benefits, and is eligible for

annual bonuses based on the bonus structure adopted by the Compensation Committee as described in Item 11 under Executive Compensation

beginning on page 40.

For fiscal year 2025, Mr.

Ghauri’s annualized

compensation consisting of salary, allowance, perquisites and benefits will be $900,000.

Ghauri is entitled to six weeks of paid

vacation per calendar year.

Ghauri’s annualized compensation consisting of salary, allowance, perquisites and

benefits will be $1,040,000.

Ghauri is entitled to six weeks of paid vacation per calendar year.

CEO Agreement also includes provisions respecting severance, non-solicitation, non-competition, and confidentiality obligations.

15 unchanged sentences

above summary of the CEO Agreement is qualified in its entirety by reference to the full text of the CEO Agreement, a copy of which was

filed as an exhibit to the Company’s 10-KSB for the fiscal year ended June 30, 2007.

The above summary of the First Amendment is

qualified in its entirety by reference to the full text of the Amendment, a copy of which was filed as an exhibit to the Company’s

10-KSB for the fiscal year ended June 30, 2008.

The above summary of the Second Amendment is qualified in its entirety by reference to

the full text of the Amendment, a copy of which was filed as an exhibit to the Company’s 10-Q for the fiscal year ended December

The above summary of the Third Amendment is qualified in its entirety by reference to the full text of the Amendment, a copy

of which was filed as an exhibit to the Company’s 8-K filed on July 26, 2013.

The above summary of the Fourth Amendment is qualified

in its entirety by reference to the full text of the Amendment, a copy of which was filed as an exhibit to the Company’s 8-K filed

on July 3, 2014.

filed as an exhibit to the Company’s 10-K for the fiscal year ended June 30, 2024.

Agreement with Roger K.

March 1, 2015, the Company entered into an Employment Agreement with our Chief Financial Officer, Mr.

Pursuant to the

Employment Agreement, between Mr.

Almond and the Company (the “CFO Agreement”), the Company agreed to employ Mr.

its Chief Financial Officer from the date of the CFO Agreement through February 28, 2017.

According to the terms of the CFO Agreement,

the term of the agreement automatically extends for an additional one-year period unless notice of intent to terminate is received by

either party at least 6 months prior to the end of the term.

July 1, 2024, the Company entered into an amended and restated employment agreement with our Chief Executive Officer, Roger Almond (the

“CFO Agreement”).

The CFO Agreement was amended solely to place the base salary for Mr.

Almond into the Appendix to the CFO

All other material terms remain unchanged from the agreement entered into with Mr.

Almond on March 1, 2015 and amended thereafter.

According to the terms of the CFO Agreement, the term of the agreement automatically extends for an additional one-year period unless

notice of intent to terminate is received by either party at least 6 months prior to the end of the term.

For the fiscal year 2024, Mr.

Almond was entitled to an annualized base

salary of $226,000 per annum and a $2,000 per month car allowance, and eligible for annual bonuses at the discretion of the Chief Executive

There is no change in Mr.

Almond’s salary for the fiscal year 2024, and is eligible for annual bonuses at the discretion

of the Chief Executive Officer.

Almond was entitled to an annualized base salary of $226,000 per annum and a $2,000 per month car allowance, and eligible for annual

bonuses at the discretion of the Chief Executive Officer.

Almond’s salary for the fiscal year 2025 will be $275,000, and is

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

In addition, Mr.

Almond is entitled to participate in the Company’s equity incentive plans and

is entitled to four weeks of paid vacation per calendar year.

Almond is entitled to participate in the

Company’s equity incentive plans and is entitled to six weeks of paid vacation per calendar year.

CFO Agreement also includes provisions respecting severance, non-solicitation, non-competition, and confidentiality obligations.

15 unchanged sentences

above summary of the CFO Agreement is qualified in its entirety by reference to the full text of the CFO Agreement, a copy of which was

filed as an exhibit to the Company’s 8-K filed on March 4, 2015.

filed as an exhibit to this form 10-K.

Agreement with Patti L.

May 1, 2006, the Company entered into an Employment Agreement with our Secretary, General Counsel and Sr.

Vice President, Legal and Corporate

Pursuant to the Employment Agreement and its related amendments, between Ms.

McGlasson and the Company

(the “General Counsel Agreement”), the Company agreed to employ Ms.

McGlasson as its Secretary and General Counsel from the

date of the General Counsel Agreement through June 30, 2017.

According to the terms of the General Counsel Agreement, the term of the

agreement automatically extends for an additional one-year period unless notice of intent to terminate is received by either party at

least 6 months prior to the end of the term.

The General Counsel Agreement was amended on July 25, 2013 and again on June 30, 2014 (the

General Counsel Agreement and all amendments referred to as the “GC Agreement”).

Changes made in the June 30, 2014 amendment

are effective July 1, 2014.

Under the GC Agreement, Ms.

McGlasson is entitled to an annualized base salary of $233,622 per annum, and

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

There is no change in Ms.

McGlasson’s salary for

fiscal year 2024.

July 1, 2024, the Company entered into an amended and restated employment agreement with our Secretary, General Counsel and Senior Vice

President, Legal and Corporate Affairs, Patti L.

McGlasson (the “GC Agreement”).

The GC Agreement was amended solely to

McGlasson’s current title and to place the base salary for Ms.

McGlasson into the Appendix to the GC Agreement.

other material terms remain unchanged from the agreement entered into with Ms.

McGlasson in January 1, 2006 and amended thereafter.

to the General Counsel Agreement, the Company agreed to employ Ms.

McGlasson as its Secretary, General Counsel and Sr.

Vice President

of Legal and Corporate Affairs for one year terms.

According to the terms of the GC Agreement, the term of the agreement automatically

extends for an additional one-year period unless notice of intent to terminate is received by either party at least 6 months prior to

the end of the term.

GC Agreement, Ms.

McGlasson is entitled to an annualized base salary of $233,622 per annum for the fiscal year 2024,

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

McGlasson’s salary for fiscal year 2025

will be $252,312.

In addition, Ms.

1 unchanged sentence

to six weeks of paid vacation per calendar year.

General Counsel Agreement also includes provisions respecting severance, non-solicitation, non-competition, and confidentiality obligations.

Pursuant to the General Counsel Agreement, if she terminates her employment for Good Reason (as described below), or, is terminated prior

to the end of the employment term by the Company other than for Cause (as described below) or death, she shall be entitled to all remaining

GC Agreement also includes provisions respecting severance, non-solicitation, non-competition, and confidentiality obligations.

to the General Counsel Agreement, if she terminates her employment for Good Reason (as described below), or, is terminated prior to the

end of the employment term by the Company other than for Cause (as described below) or death, she shall be entitled to all remaining

salary from the termination date until 24 months thereafter, at the rate of salary in effect on the date of termination, immediate vesting

11 unchanged sentences

which are directly competitive to or intentionally injurious to the Company, or any material breach of the General Counsel Agreement

above summary of the General Counsel Agreement is qualified in its entirety by reference to the full text of the General Counsel Agreement,

a copy of which was filed as an exhibit to the Company’s 10-KSB for the fiscal year ended June 30, 2006 on September 27, 2006.

The above summary is also qualified in its entirety by reference to the full text of the Amendment to the General Counsel Agreement,

a copy of which was filed as an exhibit to the Company’s 10-Q for the quarter ended March 31, 2010.

The above summary is also qualified

in its entirety by reference to the full text of the Second Amendment to the General Counsel Agreement, a copy of which was filed as

an exhibit to the Company’s 8-K filed on July 26, 2013.

The above summary is also qualified in its entirety by reference to the

full text of the Third Amendment to the General Counsel Agreement, a copy of which was filed as an exhibit to the Company’s 8-K

filed on July 3, 2014.

above summary of the General Counsel Agreement is qualified in its entirety by reference to the full text of the GC Agreement filed with

Equity Awards at Fiscal Year-End

of June 30, 2023, there are no outstanding stock options or grants of unvested stock awards.

following table shows grants of stock options and grants of unvested stock awards outstanding on June 30, 2024, the last day of our fiscal

year, to each of the individuals named in the Summary Compensation Table.

OPTION AWARDS

NUMBER OF SECURITIES UNDERLYING OPTIONS (#) EXERCISABLE

NUMBER OF SECURITIES UNDERLYING OPTIONS (#) UNEXERCISABLE

OPTION EXERCISE PRICE ($)

OPTION EXPIRATION DATE

NUMBER OF SHARES OF COMMON STOCK THAT HAVE NOT VESTED

MARKET VALUE OF SHARES THAT HAVE NOT VESTED ($)

EQUITY INCENTIVE PLAN AWARDS:

NUMBER OF UNEARNED SHARES THAT HAVE NOT VESTED

EQUITY INCENTIVE PLAN AWARDS:

MARKET OR PAYOUT VALUE OF SHARES THAT HAVE NOT VESTED ($)

Najeeb Ghauri

Roger K Almond

do not have any qualified or non-qualified defined benefit plans.

22 unchanged sentences

occurred on June 30, 2024, the last day of our most recently completed fiscal year.

BENEFITS AND PAYMENTS

TERMINATION AFTER CHANGE OF CONTROL

TERMINATION UPON DEATH OR DISABILITY

TERMINATION BY US WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD REASON

Base Salary Continuance

13 unchanged sentences

occurred on June 30, 2024, the last day of our most recently completed fiscal year.

BY US WITHOUT

BENEFITS AND PAYMENTS

TERMINATION AFTER CHANGE OF CONTROL

TERMINATION UPON DEATH OR DISABILITY

TERMINATION BY US WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD REASON

Base Salary Continuance

14 unchanged sentences

occurred on June 30, 2024, the last day of our most recently completed fiscal year.

UPON DEATH OR

BY US WITHOUT

EXECUTIVE FOR

BENEFITS AND PAYMENTS

TERMINATION AFTER CHANGE OF CONTROL

TERMINATION UPON DEATH OR DISABILITY

TERMINATION BY US WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD REASON

Base Salary Continuance

18 unchanged sentences

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

Henry Tolentino

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

mitigation measures.

Independent members of our Board of Directors are also eligible to receive stock option or stock award grants both

upon joining the Board of Directors and on an annual basis in line with recommendations by the Compensation Committee, which grants are

non-qualified stock options under our Employee Stock Option Plans.

Further, from time to time, the non-employee members of the Board

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

FEES EARNED OR PAID IN CASH ($)

SHARE AWARDS ($)

Michael Francis

members of our Board of Directors are also eligible to receive stock option or stock award grants both upon joining the Board of Directors

and on an annual basis in line with recommendations by the Compensation Committee, which grants are non-qualified stock options under

our Employee Stock Option Plans.

Further, from time to time, the non-employee members of the Board of Directors are eligible to receive

stock grants that may be granted if and only if approved by the shareholders of the Company.

Committee Interlocks and Insider Participation

2 unchanged sentences

Kazmi, and Mr.

All current members of the

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

None of these individuals

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

All current members of the Compensation

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

None of these individuals were at any time

during the fiscal year ended June 30, 2024, or at any other relevant time, an officer or employee of the Company.

executive officer of the Company serves as a member of the board of directors or compensation committee of any entity that has one or

more executive officers serving as a member of the Company’s Board of Directors or Compensation Committee.

but Outstanding

The 2005 stock option plan

The 2013 stock option plan

The 2015 stock option

The 2015 stock option plan

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

3 unchanged sentences

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

of Beneficial Owner (1)

Number of Shares

Name of Beneficial Owner (1)

Beneficially Owned (2)

Najeeb Ghauri

Henry Tolentino **

Michael Francis

1 unchanged sentence

The Vanguard Group

All officers and directors

as a group (nine persons)

All officers and directors as a group (eight persons)

Less than one percent

He is no longer director of the Company

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

13 unchanged sentences

Shares issued and outstanding as of September 20, 2024 were 11,430,891.

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

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

5% or greater shareholder based on Schedule 13G filing on January 30, 2024.

5% or greater shareholder based on Schedule 13G filing on February 13, 2024.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.

17 unchanged sentences

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Borgers audited the Company’s financial statements for the fiscal year ended June 30, 2023 and 2022.

The aggregate fees billed

by principal accountants for the annual audit and review of financial statements included in the Company’s Form 10-K, services

related to providing an opinion in connection with our public offering of shares of common stock and/or services that are normally provided

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

30, 2023 and 2022, respectively.

the fiscal year ended June 30, 2024, we engaged two independent registered public accounting firms due to a change in auditors during

Borgers CPA PC (“BF Borgers”) was engaged

to audit our financial statements and perform review services for the fiscal year ended June 30, 2023.

We incurred fees of $262,500

for these audit services.

In addition, BF Borgers was engaged to review our quarterly financial statements for the first two quarters

of fiscal year ended 2024, for which we incurred fees of $60,000.

to subsequent sanctions imposed by the SEC on BF Borgers, we engaged Fortune CPA (“Fortune”) to re-audit the financial

statements for the fiscal year ended June 30, 2023, and to audit our financial statements for the fiscal year ended June 30, 2024.

In addition, Fortune reviewed our quarterly financial statements for the third quarter of fiscal year 2024 and 2023.

The total amount

paid to Fortune for these services was $563,500.

fees for fiscal year 2024 were $19,000 and consisted of the preparation of the Company’s federal and state tax returns for the

2 unchanged sentences

tax returns for the fiscal year 2022.

other fees were paid to principal accountant during the fiscal year 2023 and 2022.

other fees were paid to principal accountant during the fiscal years 2024 and 2023.

Audit Committee and the Board of Directors are responsible for the engagement of the independent auditors and for approving, in advance,

5 unchanged sentences

The policy, which is to be reviewed and re-adopted at least annually by the Audit Committee:

Approves the performance by the independent auditors of certain types of service (principally audit-related and tax), subject to restrictions

in some cases, based on the Committee’s determination that this would not be likely to impair the independent auditors’ independence

Requires that management obtain the specific prior approval of the Audit Committee for each engagement of the independent auditors to

perform other types of permitted services;

Prohibits the performance by the independent auditors of certain types of services due to the likelihood that their independence would

Approves the performance by the independent auditors of certain types of service (principally audit-related and tax), subject to

restrictions in some cases, based on the Committee’s determination that this would not be likely to impair the independent

auditors’ independence from NETSOL;

Requires that management obtain the specific prior approval of the Audit Committee for each engagement of the independent auditors

to perform other types of permitted services;

Prohibits the performance by the independent auditors of certain types of services due to the likelihood that their independence

would be impaired.

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

17 unchanged sentences

15 – EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

of Incorporation of Mirage Holdings, Inc., a Nevada corporation, dated March 18, 1997, incorporated

by reference as Exhibit 3.1 to NETSOL’s Registration Statement No.

333-28861 filed

on Form SB-2 filed June 10, 1997.

3.2 Amendment

to Articles of Incorporation dated May 21, 1999, incorporated by reference as Exhibit 3.2

to NETSOL’s Annual Report for the fiscal year ended June 30, 1999 on Form 10K-SB filed

September 28, 1999.

3.3 Amendment

to the Articles of Incorporation of NETSOL International, Inc.

dated March 20, 2002 incorporated

by reference as Exhibit 3.3 to NETSOL’s Annual Report on Form 10-KSB/A filed on February

3.4 Amendment

to the Articles of Incorporation of NetSol Technologies, Inc.

dated August 20, 2003 filed

as Exhibit A to NETSOL’s Definitive Proxy Statement filed June 27, 2003.

3.5 Amendment

to the Articles of Incorporation of NetSol Technologies, Inc.

dated March 14, 2005 filed

as Exhibit 3.0 to NETSOL’s quarterly report filed on Form 10-QSB for the period ended

March 31, 2005.

3.6 Amendment

to the Articles of Incorporation dated October 18, 2006 filed as Exhibit 3.5 to NETSOL’s

Annual Report for the fiscal year ended June 30, 2007 on Form 10-KSB.

3.7 Amendment

to Articles of Incorporation dated May 12, 2008.

3.8 Amendment

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

Definitive Proxy Statement filed June 14, 2012.

Amendments to and Original Articles of Incorporation of NetSol Technologies from the inception date of March 18, 1997 to the most recent Amendment on August 6, 2012.

and Restated Bylaws of NetSol Technologies, Inc.

2 unchanged sentences

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

the shareholders of McCue Systems, Inc.

incorporated by reference as Exhibit 2.1 to NETSOL’s

Current Report filed on form 8-K on May 8, 2006.

10.3 Employment

Agreement by and between NetSol Technologies, Inc.

McGlasson dated May 1,

2006 incorporated by reference as Exhibit 10.20 to NETSOL’s Annual Report on form 10-KSB

dated September 18, 2006.

10.4 Employment

Agreement by and between the Company and Najeeb Ghauri dated January 1, 2007 filed as Exhibit

10.11 to the Company’s Annual Report filed on Form 10-KSB for the year ended June 30,

10.5 Employment

Agreement by and between the Company and Naeem Ghauri dated January 1, 2007 filed as Exhibit

10.11 to the Company’s Annual Report filed on Form 10-KSB for the year ended June 30,

10.6 Amendment

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

10.7 Amendment

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

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

Proxy Statement filed on March 3, 2006.

10.9 Amendment

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

10.10 Amendment

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

10.11 Amendment

to Employment Agreement by and between Company and Patti L.

McGlasson dated effective

April 1, 2010.

10.12 Company’s

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

Proxy Statement filed on April 11, 2011.

10.13 Company’s

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

Proxy Statement filed on May 29, 2013.

10.14 Amendment

to Employment Agreement between NetSol Technologies, Inc.

and Najeeb Ghauri dated effective

July 25, 2013.

10.15 Amendment

to Employment Agreement between NetSol Technologies, Inc.

and Patti L.W.

McGlasson dated

effective July 25, 2013.

10.16 Restated

and the shareholders of McCue Systems, Inc.

incorporated by reference as Exhibit 2.1 to NETSOL’s Current Report filed on form 8-K on May 8, 2006.

Employment Agreement by and between the Company and Patti L.

McGlasson dated September 25, 2024.

Employment Agreement by and between the Company and Najeeb Ghauri dated September 25, 2024.

Employment Agreement by and between the Company and Roger K.

Almond dated September 25, 2024.

2005 Stock Option Plan incorporated by reference as Exhibit 1.1 to NETSOL’s Definitive Proxy Statement filed on March 3, 2006.

2011 Equity Incentive and Nonstatutory Plan incorporated by reference as Appendix A to NETSOL’s Proxy Statement filed on April

2013 Equity Incentive Plan incorporated by reference as Appendix A to NETSOL’s Definitive Proxy Statement filed on May 29,

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

10.17 Restated

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

10.18 Restated

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

10.19 Restated

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

10.20 Company’s

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

Proxy Statement filed on April 15, 2015.

2015 Equity Incentive Plan incorporated by reference as Appendix A to NETSOL’s Definitive Proxy Statement filed on April 15,

list of all subsidiaries of the Company (1)

5 unchanged sentences

pursuant to 18 U.S.C.

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

Act of 2002 (CEO) (1)

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

Certification

pursuant to 18 U.S.C.

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

act of 2002 (CFO) (1)

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

XBRL Instance Document

30 unchanged sentences

TO CONSOLIDATED FINANCIAL STATEMENTS

of Independent Registered Public Accounting Firm

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

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

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

Statements of Cash Flows for the Years Ended June 30, 2023 and 2022

to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of June 30, 2024 and 2023

Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended June 30, 2024 and 2023

Consolidated Statement of Equity for the Years Ended June 30, 2024 and 2023

Consolidated Statements of Cash Flows for the Years Ended June 30, 2024 and 2023

Notes to Consolidated Financial Statements

of Independent Registered Public Accounting Firm

2 unchanged sentences

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

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

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

referred to as the “financial statements”).

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

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

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

(the “Company”) and its subsidiaries as

of June 30, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’

equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30,

2024 and 2023, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles

generally accepted in the United States of America.

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

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

financial statements based on our audit.

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

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

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

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

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

Our responsibility is to express an opinion on these financial

statements based on our audits.

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

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

federal securities

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

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

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

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

2 unchanged sentences

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

on the effectiveness of the entity’s internal control over financial reporting.

Accordingly, we express no such opinion.

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

fraud, and performing procedures that respond to those risks.

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

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

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

the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant

Our audits also included evaluating the accounting principles used and significant

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

We believe that our audit provides

a reasonable basis for our opinion.

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

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

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

We determined that there are no critical audit matters.

BF Borgers CPA PC (PCAOB ID 5041 )

We have served as the Company’s auditor since 2020

We believe that our audits

provide a reasonable basis for our opinion.

Audit Matters

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

or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial

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

The communication of critical audit matters

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

matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

determined that there are no critical audit matters.

Fortune CPA, Inc

have served as the Company’s auditor since 2024.

September 30, 2024

TECHNOLOGIES, INC.

8 unchanged sentences

current assets

Total current assets

current assets

Revenues in excess of billings, net - long

1 unchanged sentence

Right of use assets - operating leases

Long term investment

Intangible assets, net

6 unchanged sentences

lease obligations

Total current liabilities

current liabilities

Loans and obligations under finance leases;

5 unchanged sentences

shares authorized;

Common stock, $ .01 par value;

Common stock, $ .01 par

14,500,000 shares authorized;

12,284,887 shares issued and 11,345,856 outstanding as of June 30, 2023 12,196,570 shares issued and

11,257,539 outstanding as of June 30, 2022

12,359,922 shares issued and 11,420,891 outstanding as of June 30, 2024 , 12,284,887 shares

issued and 11,345,856 outstanding as of June 30, 2023

Additional paid-in-capital

9 unchanged sentences

( 45,975,156 )

Total NetSol stockholders’

NetSol stockholders’ equity

Non-controlling

5 unchanged sentences

Statements of Operations

For the Years

Net Revenues:

5 unchanged sentences

and development cost

Total operating expenses

Loss from operations

( 8,779,958 )

operating expenses

Income (loss) from operations

( 8,779,958 )

1 unchanged sentence

Interest expense

( 1,142,166 )

Interest income

Gain on foreign currency

exchange transactions

Gain (loss) on foreign

currency exchange transactions

( 1,187,320 )

Share of net loss from

1 unchanged sentence

( 1,033,243 )

( 2,021,480 )

income (expense)

3 unchanged sentences

tax provision

( 1,145,518 )

Net income (loss)

5 unchanged sentences

$ ( 5,243,748 )

$ ( 851,156 )

Net income (loss) per share:

6 unchanged sentences

For the Years

income (loss)

$ ( 5,243,748 )

Net income (loss)

$ ( 5,243,748 )

2 unchanged sentences

( 10,184,324 )

( 11,175,077 )

adjustment attributable to non-controlling interest

1 unchanged sentence

( 6,612,071 )

( 7,494,604 )

Comprehensive

1 unchanged sentence

$ ( 11,855,819 )

$ ( 8,345,760 )

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

3 unchanged sentences

the Years Ended June 30, 2024 and 2023

Comprehensive

Stockholders’

4 unchanged sentences

$ ( 39,363,085 )

Subsidiary common stock issued for:

Common stock issued for:

Purchase of treasury shares

Purchase of subsidiary treasury shares

Adjustment in APIC for purchase of subsidiary

treasury shares

Fair value of subsidiary options issued

Foreign currency translation adjustment

Adjustment in APIC for change

in subsidiary shares to non-controlling interest

Fair value of subsidiary

options issued

Acquisition of non-controlling

interest in subsidiary

Foreign currency translation

( 6,612,071 )

1 unchanged sentence

( 10,184,324 )

Net income (loss) for

income (loss) for the year

( 5,243,748 )

( 4,144,473 )

Balance at June 30,

8 unchanged sentences

the Years Ended June 30, 2024 and 2023

Comprehensive

Stockholders’

4 unchanged sentences

$ ( 45,975,156 )

Common stock issued for:

Adjustment in APIC for change in subsidiary

shares to non-controlling interest

Fair value of subsidiary options issued

Acquisition of non-controlling interest in

Foreign currency translation adjustment

$ 128,476,048

1 unchanged sentence

$ ( 44,896,186 )

$ ( 45,975,156 )

Common stock issued for:

of options issued

value of options issued

of subsidiary options issued

Fair value of subsidiary options issued

Foreign currency translation

Net income (loss) for

Balance at June 30,

$ 128,783,865

$ ( 3,920,856 )

Balance at June 30, 2023

$ ( 44,212,313 )

2 unchanged sentences

$ ( 3,920,856 )

$ ( 44,212,313 )

$ ( 45,935,616 )

accompanying notes are an integral part of these consolidated financial statements

8 unchanged sentences

Depreciation and amortization

Provision for bad debts

Goodwill impairment

Provision (reversal) for

Impairment and share of

net loss from investment under equity method

Loss on sale of assets

(Gain) loss on sale of

Stock based compensation

3 unchanged sentences

( 6,860,983 )

Accounts receivable - related

Revenues in excess of billing

6 unchanged sentences

( 1,639,438 )

( 2,609,205 )

of property and equipment

1 unchanged sentence

( 1,399,231 )

( 2,260,147 )

Cash flows from financing

Purchase of treasury stock

Purchase of subsidiary

2 unchanged sentences

on finance lease obligations and loans - net

( 1,270,104 )

cash used in financing activities

( 1,378,721 )

cash provided by (used in) financing activities

of exchange rate changes

( 8,321,891 )

( 9,163,111 )

Net decrease in cash and

cash equivalents

( 8,430,543 )

Net increase (decrease)

in cash and cash equivalents

( 8,430,543 )

6 unchanged sentences

Statements of Cash Flows (Continued)

For the Years

SUPPLEMENTAL DISCLOSURES:

25 unchanged sentences

Technologies Europe Limited (“NTE”)

(Thailand) Co.

Limited (“NTPK Thailand”)

Technologies (Beijing) Co.

19 unchanged sentences

have been eliminated in the consolidation.

of Presentation

accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United

States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

TECHNOLOGIES, INC.

1 unchanged sentence

30, 2024 and 2023

of Presentation

accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United

States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of

44 unchanged sentences

off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

Receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at

the principal balance outstanding, net of purchase premiums and discounts, deferred loan fees and costs, and an allowance for loan losses.

Interest income is accrued on the unpaid principal balance.

Loan origination fees, net of certain direct origination costs, are deferred

and recognized in interest income.

TECHNOLOGIES, INC.

35 unchanged sentences

furniture and equipment

5 to 10 Years

under capital leases

39 unchanged sentences

amount of goodwill may be impaired.

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

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

If factors indicate that

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

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

If the carrying value of the reporting

unit continues to exceed its fair value, the fair value of the reporting unit’s goodwill is calculated and an impairment loss equal

to the excess is recorded.

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2023 and 2022

In conducting its annual impairment test, the Company first

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

carrying amount.

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

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

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

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

Value of Financial Instruments

4 unchanged sentences

payable and short-term debt, the carrying amounts approximate fair value due to their relatively short maturities.

The carrying amounts

of the convertible notes receivable and long-term debt approximate their fair values based on current interest rates for instruments

with similar characteristics.

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2024 and 2023

three levels of valuation hierarchy are defined as follows:

3 unchanged sentences

and are less observable and thus have the lowest priority.

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

Company’s financial assets that were measured at fair value on a recurring basis as of June 30, 2024, are as follows:

1 unchanged sentence

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 for the years ended June 30, 2024 and 2023 is as follows:

SCHEDULE OF FAIR VALUE OF FINANCIAL INSTRUMENTS RECONCILIATION

of billings - long term

billings - long term

value discount

Balance at June 30, 2022

4 unchanged sentences

Amortization during the period

Transfers to short term

Effect of Translation

Balance at June 30,

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

$ ( 152,446 )

Company used the discounted cash flow method with interest rates ranging from 7.3 % to 17.5 %, for the year ended June 30, 2024.

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

50 unchanged sentences

Company transacts business in various foreign currencies.

The accounts of NetSol UK, NTE, AEL, VLSH and VLS use the British Pound;

uses the Euro;

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

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

NetSol Australia uses the Australian dollar;

Namecet uses AED;

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

NetSol Technologies, Inc., and its subsidiaries, NTA and OTOZ, use the U.S.

dollar as the functional currency.

Consequently,

revenues and expenses of operations outside the United States are translated into U.S.

Dollars using average exchange rates while assets

and liabilities of operations outside the United States are translated into U.S.

Dollars using exchange rates at the balance sheet date.

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

The following table represents the functional currencies of the Company and

its subsidiaries:

OF FOREIGN CURRENCY TRANSLATION

Company and Subsidiaries

Technologies, Inc.

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

of Cash Flows

9 unchanged sentences

Information and Geographic Areas”)

Accounting Standards Adopted by the Company:

December 2019, the FASB issued ASU No.

2019-12, Income Taxes (ASC 740):

Simplifying the Accounting for Income Taxes , which is

intended to simplify the accounting for income taxes by removing certain exceptions and by updating accounting requirements around franchise

taxes, goodwill recognized for tax purposes, the allocation of current and deferred tax expense among legal entities, among other minor

Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied

on a retrospective or modified retrospective basis.

This new standard is effective for fiscal years beginning after December 15, 2020

and was adopted by the Company July 1, 2021.

The adoption of the new standard did not have a material impact on the Company’s consolidated

financial statements.

August 2020, the FASB issued ASU No.

2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives

and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an

Entity’s Own Equity” (“ASU 2020-06”).

ASU 2020-06 reduces the number of accounting models for convertible debt

instruments and convertible preferred stock and results in fewer instruments with embedded conversion features being separately recognized

from the host contract as compared with current standards.

Those instruments that do not have a separately recognized embedded conversion

feature will no longer recognize a debt issuance discount related to such a conversion feature and would recognize less interest expense

on a periodic basis.

Additionally, the ASU amends the calculation of the share dilution impact related to a conversion feature and eliminates

the treasury method as an option.

For instruments that do not have a component mandatorily settled in cash, the change will likely result

in a higher amount of share dilution in the calculation of earnings per share.

This ASU is effective for fiscal years (and interim periods

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

The adoption of the new standard

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

TECHNOLOGIES, INC.

1 unchanged sentence

30, 2024 and 2023

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

Facilitation of Effects of Reference Rate Reform on Financial

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

affected by reference rate reform if certain criteria are met.

The elective amendments provide expedients to contract modification, affected

by reference rate reform if certain criteria are met.

The expedients and exceptions provided by this guidance apply only to contracts,

hedging relationships, and other transactions that reference the London interbank offered rate (“LIBOR”) or another reference

rate expected to be discontinued as a result of reference rate reform.

This guidance is not applicable to contract modifications made

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

The guidance can be applied immediately through December

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

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

which simplifies accounting for convertible instruments by removing major separation models required under current Generally Accepted

Accounting Principles (GAAP).” In addition, the ASU “removes certain settlement conditions that are required for equity contracts

to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it” and “simplifies

the diluted earnings per share (EPS) calculation in certain areas.

The guidance is effective for fiscal years beginning after December

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

The adoption of the new standard did not have a

material impact on the Company’s consolidated financial statements.

Standards Recently Issued but Not Yet Adopted by the Company:

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

Accounting for Contract Assets and Contract Liabilities

from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized

in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, as if the acquirer

had originated the contracts.

ASU 2021-08 is effective for annual periods beginning after December 15, 2022, and interim periods within

those years, with early adoption permitted.

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

Accounting Standards Adopted by the Company:

November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2023-07 “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.” This ASU expands public entities’ segment disclosures by requiring disclosure

of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure

of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable

segment’s profit or loss and assets.

This ASU is effective for fiscal years beginning after December 15, 2023, and for interim

periods within fiscal years beginning after December 15, 2024.

This ASU is applicable to the Company’s Annual Report on Form 10-K

for the fiscal year ended June 30, 2025, and subsequent interim periods, with early application permitted.

The Company is currently evaluating

the impact of the application of this ASU on its consolidated financial statements and disclosures.

December 2023, the FASB issued ASU No.

2023-09 “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.” This ASU

updates income tax disclosure requirements primarily by requiring specific categories and greater disaggregation within the rate reconciliation

and disaggregation of income taxes paid by jurisdiction.

This ASU is effective for annual periods beginning after December 15, 2024,

and is applicable to the Company’s fiscal year beginning July 1, 2025, with early application permitted.

The Company is currently

evaluating the impact of the application of this ASU on its consolidated financial statements and disclosures.

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

28 unchanged sentences

to take possession of the software.

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

TECHNOLOGIES, INC.

1 unchanged sentence

30, 2024 and 2023

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

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

29 unchanged sentences

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

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2023 and 2022

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

11 unchanged sentences

typically due 30 days after invoice.

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2024 and 2023

and Internet Services

11 unchanged sentences

Total core revenue, net

Total non-core revenue, net

Total non-core revenue,

Total net revenue

3 unchanged sentences

terms and may vary in some instances.

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2023 and 2022

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

10 unchanged sentences

software license, and the (2) the method of recognizing revenue for installation/customization, and other services.

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2024 and 2023

stand-alone selling price of the licenses was measured primarily through an analysis of pricing that management evaluated when quoting

38 unchanged sentences

of a milestone.

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2023 and 2022

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

1 unchanged sentence

in excess of billings

Unearned revenue

The Company’s unearned revenue reconciliation is as follows:

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2024 and 2023

Company’s unearned revenue reconciliation is as follows:

OF UNEARNED REVENUE RECONCILIATION

Unearned Revenue

Balance at June 30, 2021

Revenue Recognized

at June 30, 2022

( 19,762,568 )

Balance at June 30, 2022

Revenue Recognized

at June 30, 2023

( 23,216,573 )

Balance at June 30, 2023

at June 30, 2024

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

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

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

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

All other activity in unearned revenue is due to the

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

the year ended June 30, 2024, the Company recognized revenue of $ 7,424,262 , which was included in the unearned revenue balance at the

beginning of the period.

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

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

43 unchanged sentences

OF RECLASSIFICATION OF FOREIGN CURRENCY TRANSLATION ADJUSTMENTS

Details about Accumulated

Comprehensive

Income (Loss) Components

the Year ended June 30, 2023

Reclassified from

Other Income (Loss)

Line Item in the Statement

Statement of Operations

Net Loss is Presented

Foreign currency translation gain (loss) on

liquidation of NTPK Thailand

For the Year ended June 30, 2023

Affected Line Item in the Statement

Details about Accumulated Other

Amount Reclassified from Accumulated

Consolidated Statement of Operations

Comprehensive Income (Loss) Components

Income (Loss)

Loss is Presented

Foreign currency translation gain

(loss) on liquidation of NTPK Thailand

$ ( 323,764 )

Gain on foreign currency exchange

Foreign currency translation gain (loss) on

investment in WRLD3D

Foreign currency translation

gain (loss) on investment in WRLD3D

Other income (expense)

5 unchanged sentences

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

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2024 and 2023

5 – EARNINGS PER SHARE

2 unchanged sentences

shares outstanding during the period using the treasury stock method.

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

dilutive instruments.

Dilutive potential common shares include outstanding stock options

and stock awards.

components of basic and diluted earnings per share were as follows:

SCHEDULE OF DILUTIVE POTENTIAL COMMON SHARES

the year ended June 30, 2024

Basic income (loss) per share:

(loss) available to common shareholders

Effect of dilutive securities

Diluted income (loss)

the year ended June 30, 2023

Basic income (loss) per share:

(loss) available to common shareholders

$ ( 5,243,748 )

Effect of dilutive securities

Diluted income (loss)

$ ( 5,243,748 )

6 – MAJOR CUSTOMERS

1 unchanged sentence

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

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

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

receivable from DFS at June 30, 2024 and 2023 were $ 538,648 and $ 4,368,881 , respectively.

1 unchanged sentence

2024 and 2023 were $ 892,109 and $ 1,961,750 , respectively.

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2023 and 2022

7 - OTHER CURRENT ASSETS

6 unchanged sentences

Other Receivables

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2024 and 2023

8 – REVENUES IN EXCESS OF BILLINGS – LONG TERM

1 unchanged sentence

SCHEDULE OF REVENUE IN EXCESS OF BILLING

June 30, 2024

June 30, 2023

Revenues in excess of billings - long term

4 unchanged sentences

in interest income for that period.

The Company used the discounted cash flow method with an interest rate of 4.35 % during the years

ended June 30, 2023 and 2022.

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2023 and 2022

The Company used the discounted cash flow method with interest rates ranging from 7.3 % to 17.5 %,

for the year ended June 30, 2024, an interest rate of 4.35 % during the year ended June 30, 2023.

9 - PROPERTY AND EQUIPMENT

1 unchanged sentence

SCHEDULE OF PROPERTY AND EQUIPMENT

June 30, 2024

June 30, 2023

Office Furniture and Equipment

4 unchanged sentences

( 11,410,902 )

Property and Equipment,

Property and Equipment, Net

the years ended June 30, 2024 and 2023, depreciation expense totaled $ 1,595,959 and $ 2,072,897 , respectively.

2 unchanged sentences

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

SUMMARY OF FIXED ASSETS HELD UNDER CAPITAL LEASES

Accumulated Depreciation

SCHEDULE OF FIXED ASSETS HELD UNDER CAPITAL LEASES

June 30, 2024

June 30, 2023

Accumulated Depreciation - Net

Fixed assets held under

capital leases, Total

lease term and discount rate were as follows:

SCHEDULE OF FINANCE LEASE TERM

average remaining lease term - Finance leases

Weighted average discount

rate - Finance leases

TECHNOLOGIES, INC.

1 unchanged sentence

30, 2024 and 2023

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

as financing and operating.

For certain leases, the Company has options to extend the lease term for additional periods ranging from

one year to 10 years.

lease term and discount rate were as follows:

SCHEDULE OF FINANCE LEASE TERM

June 30, 2024

June 30, 2023

Weighted average remaining lease term - Finance leases

Weighted average discount rate - Finance leases

Company leases certain office space, office equipment and autos with remaining lease terms of 1 to 10 years under leases classified as

financing and operating.

For certain leases, the Company has options to extend the lease term for additional periods ranging from 1 to

Company treats a contract as a lease when the contract conveys the right to use a physically distinct asset for a period of time in exchange

28 unchanged sentences

value guarantees or restrictive covenants.

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2024 and 2023

balance sheet information related to leases was as follows:

SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO LEASE

lease assets, net

June 30, 2024

June 30, 2023

Operating lease assets, net

Operating, Current

1 unchanged sentence

Total Lease Liabilities

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2023 and 2022

components of lease cost were as follows:

1 unchanged sentence

For the Years

Ended June 30,

Amortization of finance lease assets

6 unchanged sentences

SCHEDULE OF LEASE TERM AND DISCOUNT RATE

average remaining lease term - Operating leases

Weighted average discount

rate - Operating leases

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

SCHEDULE OF SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION RELATED TO LEASES

For the Years

cash flows related to operating leases

Operating cash flows

related to finance leases

Financing cash flows

related finance leases

June 30, 2024

June 30, 2023

Weighted average remaining lease term - Operating leases

Weighted average discount rate - Operating leases

TECHNOLOGIES, INC.

1 unchanged sentence

30, 2024 and 2023

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

SCHEDULE OF SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION RELATED TO LEASES

For the Years

Ended June 30,

Operating cash flows related to operating leases

Operating cash flows related to finance leases

Financing cash flows related finance leases

of operating lease liabilities were as follows as of June 30, 2024:

4 unchanged sentences

Within year 4

Within year 5

Total Lease Payments

10 unchanged sentences

of $ 33,417 and $ 31,998 , respectively.

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

The lease agreement is

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

11 – LONG-TERM INVESTMENT

1 unchanged sentence

Company and Drivemate Co., Ltd.

(“Drivemate”) entered into a subscription agreement on April 25, 2019, (“Drivemate

Agreement”) whereby the Company purchased an equity interest of 30 % in Drivemate.

Per the Drivemate Agreement, the Company purchased

5,469 preferred shares for $ 1,800,000 consisting of $ 500,000 cash to be paid over a two-year period and $ 1,300,000 to be provided in

The Company has paid the $ 500,000 in cash and has provided services of $ 1,300,000 .

Pursuant to the agreement, the number of

shares to be issued is adjusted as necessary to result in an equity ownership equal to 30% of the issued and outstanding shares at the

final payment date.

As of June 30, 2023 and 2022, the Company owns 8,178 shares equal to 30% of Drivemate.

Per the Drivemate Agreement,

the Company appointed two directors to the Drivemate board.

The Company determined that it met the significant influence criteria since

two of the four directors are appointed by the Company and the Company owns 30% of Drivemate;

therefore, the Company accounts for the

investment using the equity method of accounting .

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

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

ended June 30, 2023 and 2022, respectively.

For the year ended June 30, 2023, the Company performed a fair value analysis and determined

that the carrying amount of the investment exceeded the investment’s fair value;

therefore, the Company recorded an impairment

of $ 1,041,482 .

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

Statement of Operations”.

(“Drivemate”) entered into a subscription agreement on April 25, 2019, whereby the Company

purchased an equity interest of 30 % in Drivemate and appointed two directors to the Drivemate board.

the equity method of accounting, the Company recorded its share of net income of $ 7,510 for the year ended June 30, 2023.

ended June 30, 2023, the Company performed a fair value analysis and determined that the carrying amount of the investment exceeded the

investment’s fair value;

therefore, the Company recorded an impairment of $ 1,041,482 .

The impairment expense is recorded in the

line item “share of net loss under equity method” in the “Consolidated Statement of Operations”.

October 10, 2023, a third-party company acquired 100 % of Drivemate in a share exchange valued at THB 3,000,000 (approximately $ 87,000 ).

In return, the Company will receive 1,381 shares of the third-party company, representing less than one percent ownership.

the Company’s investment was valued at approximately $ 26,000 and has been classified under “other assets” on the consolidated

balance sheet.

TECHNOLOGIES, INC.

3 unchanged sentences

SCHEDULE OF LONG TERM INVESTMENT

Investment in

Gross investment at June 30, 2021

Cumulative net loss on investment

Share of net income for the year

Net investment at June 30, 2022

Beginning balance, net investment

Share of net income for the year

Net income on investment for the year ended June 30, 2023

( 1,041,482 )

Net investment at June 30, 2023

Ending balance, net

Net investment, beginning balance

Net investment at June 30, 2024

Net investment, ending balance

12 - INTANGIBLE ASSETS

1 unchanged sentence

SCHEDULE OF INTANGIBLE ASSETS

June 30, 2024

June 30, 2023

Product Licenses - Cost

5 unchanged sentences

( 22,360,107 )

licenses include internally-developed software cost.

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

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

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

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

expense for the years ended June 30, 2024 and 2023 was $ 126,041 and $ 1,171,641 , respectively.

13 – GOODWILL

1 unchanged sentence

Goodwill was comprised of the following amounts:

OF GOODWILL ACQUIRED

SCHEDULE OF GOODWILL ACQUIRED

Entity (Segment)

June 30, 2024

June 30, 2023

NetSol PK (Asia - Pacific)

NTA (North America)

Company tests for goodwill impairment at each reporting unit and recorded an impairment of $ 214,044 at June 30, 2022.

The Company performed

the goodwill analysis using an income approach.

14 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

payable and accrued expenses consisted of the following:

OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

June 30, 2024

June 30, 2023

Accounts Payable

11 unchanged sentences

D&O Insurance

Line of Credit

Bank Overdraft Facility

Term Finance Facility

Loan Payable Bank - Export Refinance

4 unchanged sentences

Term Finance Facility

Insurance Financing

Short Term Financing

Subsidiary Finance Leases

1 unchanged sentence

D&O Insurance

Line of Credit

Bank Overdraft Facility

Term Finance Facility

Loan Payable Bank - Export Refinance

4 unchanged sentences

Term Finance Facility

Insurance Financing

Short Term 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 range from 5.0 % to 7.9 % and 5.0 % to 7.0 % as of June 30, 2023 and 2022, respectively.

The interest rate on these financings range from 8.6 %

as of June 30, 2024 and 2023, respectively.

TECHNOLOGIES, INC.

1 unchanged sentence

30, 2024 and 2023

(2) The Company has

an uncommitted discretionary demand line of credit up to an aggregate amount of $ 1,000,000

with HSBC, secured by lien on the Company’s

The annual interest rate was 8.75 %

as of June 30, 2024.

The total outstanding balance as of June 30, 2024 was $ nil .

(3) The Company’s

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

The annual interest rate was 9.5 % and 5.5 % as of June 30, 2023 and 2022, respectively.

The total outstanding balance as of

June 30, 2023 and 2022 was £ nil .

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

or approximately $ 379,747 .

The annual interest rate was 9.5 %%

as of June 30, 2024 and 2023.

The total outstanding balance as of June 30, 2024 and 2023 was £ nil .

This overdraft facility

requires that the aggregate amount of invoiced trade debtors (net of provisions for bad and doubtful debts and excluding intra-group

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

As of June 30, 2023, NTE

was in compliance with this covenant.

(3) The Company’s

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

situation during the COVID-19 Pandemic.

This is a term loan payable in three years.

The availed facility amount is Rs.

nil or $ nil , at

June 30, 2023.

The availed facility amount is Rs.

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

The interest rate

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

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

of the facility.

As of June 30, 2024, NTE was in compliance with this covenant.

(4) The Company’s

3 unchanged sentences

The total facility amount is Rs.

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

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

30, 2023 and 2022, respectively.

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

or $ 1,796,558

or $ 1,741,493

at June 30, 2024 and 2023, respectively.

interest rate for the loan was 17.5 %

at June 30, 2024 and 2023, respectively.

(5) The Company’s

2 unchanged sentences

amount is Rs.

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

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

The balance outstanding

at June 30, 2023 and 2022 was Rs.

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

These facilities require

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

As of June 30, 2023, NetSol PK was in

compliance with this covenant .

or $ 186,688 ,

at June 30, 2024 and 2023, respectively.

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

The interest rate for the loan was 22.2 %

at June 30, 2024 and 2023, respectively.

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

As of June 30, 2024,

NetSol PK was in compliance with this covenant.

(6) The Company’s

3 unchanged sentences

The total facility amount is Rs.

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

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

June 30, 2023 and 2022, respectively.

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

During the loan tenure,

the facilities from Samba Bank Limited require NetSol PK to maintain at a minimum a current ratio of 1:1, an interest coverage ratio

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

As of June 30, 2023, NetSol PK was in

compliance with these covenants .

or $ 1,365,384

or $ 1,323,535 ,

at June 30, 2024 and 2023, respectively.

The interest rate for the loan was 17.5 %

at June 30, 2024 and 2023, respectively.

the loan tenure, the facilities from Samba Bank Limited require NetSol PK to maintain at a minimum a current ratio of 1:1, an

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

As of June 30, 2024,

NetSol PK was in compliance with these covenants.

(7) The Company’s

2 unchanged sentences

The total facility amount is Rs.

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

or $ 3,233,804

or $ 3,134,687 ,

at June 30, 2024 and 2023, respectively.

NetSol PK used Rs.

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

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

2023 and 2022, respectively.

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

or $ 2,515,181

or $ 2,438,089 ,

at June 30, 2024 and 2023, respectively.

The interest rate for the loan was 17.5 %

at June 30, 2024 and 2023, respectively.

(8) The Company’s

1 unchanged sentence

As of June 30, 2024, NetSol PK used Rs.

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

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

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

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

of which $ 9,684

was shown as long term and $ 47,158

As of June 30, 2023, NetSol PK used

of which $ 172,849

was shown as long term and $ 148,264

The interest rate for the loan was

ranging from 22.7 %

at June 30, 2024.

The interest rate for the loan was ranging from 9.0 %

at June 30, 2023.

(9) In March 2020,

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

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

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

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

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

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

The loan amount was £ 69,549 ,

or $ 88,037 ,

for a period of 5

years with monthly payments of £ 1,349 ,

The subsidiary has paid this facility in full.

As of June 30, 2023, the subsidiary has used this facility up to $ 13,356 ,

which was shown as current.

The interest rate was 6.14 %

at June 30, 2023.

(10) The Company’s

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

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

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

as of June 30, 2023 and 2022.

subsidiary, NetSol Beijing , has a short term loan facility with Bank of China, secured by personal guarantee of General Manager of NetSol

Beijing for a period of one year.

The facility amount is CNY 3,000,000

or $ 412,655 .

NetSol Beijing used CNY 3,000,000

or $ 412,655 ,

at June 30, 2024.

The interest rate of the loan was 3.8 %

at June 30, 2024.

TECHNOLOGIES, INC.

10 unchanged sentences

is the aggregate minimum future lease payments under capital leases as of June 30, 2024:

OF AGGREGATE MINIMUM FUTURE LEASE PAYMENTS UNDER CAPITAL LEASES

SCHEDULE OF AGGREGATE MINIMUM FUTURE LEASE PAYMENTS UNDER CAPITAL LEASES

Minimum Lease Payments

Within year 1

Within year 2

Within year 3

Total Minimum Lease Payments

Interest Expense relating

to future periods

Interest Expense relating to future periods

Present Value of minimum lease payments

Current portion

Current portion of loans and obligations under finance leases

Non-Current portion

Loans and obligations under finance leases;

less current maturities

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

Facility (9)”, as of June 30, 2023:

is the aggregate future long term debt payments, which consists of “Sale and Leaseback Financing (8)”, as of June 30, 2024:

SCHEDULE OF AGGREGATE FUTURE LONG TERM DEBT PAYMENTS

1 unchanged sentence

Within year 1

Within year 2

Total Loan Payments

10 unchanged sentences

SCHEDULE OF CONSOLIDATED PRE-TAX INCOME (LOSS)

Ended June 30,

Years Ended June 30,

US operations

6 unchanged sentences

components of the provision for income taxes are as follows:

OF COMPONENTS OF PROVISION FOR INCOME TAXES

Ended June 30,

SCHEDULE OF COMPONENTS OF PROVISION FOR INCOME TAXES

Years Ended June 30,

State and Local

Provision for income

Provision for income taxes

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

Reconciliation

of effective income tax rate

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

10 unchanged sentences

income tax assets and liabilities as of June 30, 2024 and 2023 consist of tax effects of temporary differences related to the following:

of deferred tax asset

SCHEDULE OF DEFERRED INCOME TAX ASSETS AND LIABILITIES

Ended June 30,

Years Ended June 30,

Net operating loss carry forwards

Net deferred tax assets

Valuation allowance

for deferred tax assets

Valuation allowance for deferred tax assets

( 11,343,517 )

8 unchanged sentences

be limited pursuant to section 382 of the Internal Revenue Code.

California has suspended the net operating loss carryover deduction

for taxable years 2020, 2021 and 2022.

Net operating losses related to foreign entities were $ 6,022,156 at June 30, 2023.

Net operating losses related to foreign entities were $ 12,978,466 at

June 30, 2024.

of June 30, 2024, the Company does not have any unrecognized tax benefits related to various federal and state income tax matters.

13 unchanged sentences

deferred tax liability associated with the unremitted earnings attributable to the foreign subsidiaries.

from the export of computer software and its related services developed in Pakistan is exempt from tax through June 30, 2025.

The aggregate

effect of the tax holiday for June 30, 2023 and 2022 is $ 1,359,169 and $ 1,260,502 , respectively.

The effect on basic and diluted earnings

per share is $ 0.12 and $ 0.11 for June 30, 2023 and 2022, respectively.

from the export of computer software and its related services developed in Pakistan was exempt from tax for the year ended June 30, 2023.

The aggregate effect of the tax holiday for June 30, 2023 was $ 1,359,169 .

The effect on basic and diluted earnings per share was $ 0.12

for June 30, 2023.

TECHNOLOGIES, INC.

9 unchanged sentences

financial statements.

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

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

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

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

the years ended June 30, 2024 and 2023, the Company issued Nil and 30,000 shares of common stock for services received from one of its

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

18 - INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN

64 unchanged sentences

# Number of shares

Average Grant Date Fair Value ($)

Weighted Average Grant Date Fair Value ($)

Unvested, June 30, 2022

6 unchanged sentences

30, 2024 and 2023

stock purchase options consisted of the following:

SCHEDULE OF COMMON STOCK PURCHASE OPTIONS

Weighted Average Exercise Price

Weighted Average Remaining Contractual Life (in years)

Aggregated Intrinsic Value

Outstanding and exercisable, June 30, 2023

Expired / Cancelled

Outstanding and exercisable, June 30, 2024

aggregate intrinsic value at June 30, 2024 represents the difference between the Company’s closing stock price of $ 2.54 on June

30, 2024 and the exercise price of the in-the-money stock options.

following table summarizes information about stock options outstanding and exercisable at June 30, 2024.

SUMMARY OF STOCK OPTIONS OUTSTANDING

Exercise Price

Number Outstanding and Exercisable

Weighted Average Remaining Contractual Life

Weighted Average Exercise Price

the year ended June 30, 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 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 %

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2024 and 2023

determining the fair value of share options, the Company utilized the simplified method to estimate the expected term for certain share

option grants.

The simplified method was applied due to the Company’s lack of sufficient historical data on employee exercise behavior,

which would otherwise be necessary to develop a more precise estimate of the expected term.

The simplified method estimates the expected

term as the midpoint between the vesting period and the contractual term of the options.

determining the fair value of share options, the Company utilized historical volatility as the basis for its expected volatility assumption.

Historical volatility was calculated using the daily closing prices of the Company’s common stock over a period commensurate with

the expected term of the share options.

The Company determined that historical volatility was an appropriate measure of future expectations,

as it reflects the stock’s past performance and market conditions.

No significant adjustments were made to historical volatility,

as the Company believes it provides a reasonable estimate of expected volatility for the purposes of option valuation.

19 – RETIREMENT PLANS

18 unchanged sentences

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

OF IDENTIFIABLE ASSETS

SUMMARY OF IDENTIFIABLE ASSETS

June 30, 2024

June 30, 2023

Identifiable assets:

1 unchanged sentence

North America

Asia - Pacific

Identifiable assets

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

SUMMARY OF INVESTMENT UNDER EQUITY METHOD

Investment in associates under equity method:

following table presents a summary of revenue streams by segment for the years ended June 30, 2024 and 2023:

SUMMARY OF REVENUE STREAMS

Subscription and support

North America

5 unchanged sentences

For the Years

Ended June 30,

Revenues from unaffiliated customers:

North America

Revenue from unaffiliated

Asia - Pacific

Revenues from unaffiliated customers

Revenue from affiliated customers

from affiliated

Asia - Pacific

Intercompany revenue

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

Asia - Pacific

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

Corporate headquarters

2 unchanged sentences

North America

( 1,407,252 )

Asia - Pacific

( 2,786,373 )

4 unchanged sentences

North America

Asia - Pacific

Depreciation and amortization

2 unchanged sentences

North America

Asia - Pacific

Interest Expense

2 unchanged sentences

North America

Asia - Pacific

Income tax expense

5 unchanged sentences

For the Years

Ended June 30,

Capital expenditures:

North America

Asia - Pacific

Capital expenditures

2 unchanged sentences

SCHEDULE OF GEOGRAPHIC INFORMATION

June 30, 2024

June 30, 2023

Long-lived Assets

Pakistan & India

5 unchanged sentences

in the table below is the geographic information of total revenues by country for the years ended June 30, 2024 and 2023.

OF RECONCILIATION OF REVENUE

SCHEDULE OF RECONCILIATION OF REVENUE

Pakistan & India

Australia & New Zealand

Other Countries

Revenues 2024

4 unchanged sentences

Asia-Pacific:

Pakistan & India

Australia & New Zealand

Other Countries

Revenues 2023

4 unchanged sentences

Asia-Pacific:

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2024 and 2023

21 – NON-CONTROLLING INTEREST IN SUBSIDIARY

2 unchanged sentences

SCHEDULE OF BALANCE OF NON-CONTROLLING INTEREST

Non-Controlling

June 30, 2023

Non-Controlling Interest %

Non-Controlling Interest at June 30, 2024

NetSol-Innovation

Non-Controlling

June 30, 2022

Non-Controlling Interest %

Non-Controlling Interest at June 30, 2023

NetSol-Innovation

TECHNOLOGIES, INC.

to Consolidated Financial Statements

30, 2023 and 2022

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

6 unchanged sentences

interest for Otoz Thai decreased to 5.60 %.

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

Due to this purchase,

the non-controlling interest decreased from 33.88 % at June 30, 2021 to 32.38 % at June 30, 2022.

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

NetSol PK and OTOZ.

SCHEDULE OF CHANGE IN OWNERSHIP INTEREST

For the Years

income (loss) attributable to NetSol

$ ( 5,243,748 )

$ ( 851,156 )

Transfer (to) from non-controlling

Increase in paid-in capital

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

Decrease in paid-in capital

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

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

Net transfer (to) from

non-controlling interest

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

Ended June 30,

Net income (loss) attributable to NetSol

$ ( 5,243,748 )

Transfer (to) from non-controlling interest

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

Decrease in paid-in capital for purchase of 191,011 shares of OTOZ Inc common stock

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

Net transfer (to) from non-controlling interest

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

$ ( 5,241,390 )

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

What changed 10-K

Item 9A. Controls and Procedures