What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-13 compared with 2024-05-20 · 371 added, 632 removed, 181 unchanged (85% of the section changed)

1 unchanged sentence

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

the three and nine months ended March 31, 2024.

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

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

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

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

following filings are available through our investor relations website after we file with the SEC:

the three months ended September 30, 2024.

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

our Annual Report on Form 10-K for the year ended June 30, 2024, and the Condensed Consolidated Financial Statements and notes thereto

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

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

The following filings are available through our investor relations website after we file with the SEC:

Annual Reports on Form 10-K, Quarterly

37 unchanged sentences

The Company does not intend to update these forward-looking statements.

Technologies, Inc.

NTWK) is a worldwide provider of IT and enterprise software solutions.

We believe that our solutions constitute

mission critical applications for clients, as they encapsulate end-to-end business processes, facilitating faster processing and increased

transactions.

Technologies is a global leader in delivering state-of-the-art solutions for the asset finance and leasing industry, serving automotive

and equipment OEMs, auto captives and financial institutions across over 30 countries.

Since its inception in 1997, NETSOL has been at

the cutting edge of technology, pioneering innovations with its asset finance solutions and leveraging advanced AI and cloud services

to meet the complex needs of the global market.

for its deep industry expertise, customer-centric approach and commitment to excellence, NETSOL fosters strong partnerships with its

clients, ensuring their success in an ever-evolving landscape.

With a rich history of innovation, ethical business practices and a focus

on sustainability, NETSOL is dedicated to empowering businesses worldwide, securing its position as the trusted partner for leading firms

around the globe.

primary sources of revenues have been licensing, subscriptions, modification, enhancement and support of our suite of financial applications,

under the brand name NFS Ascent ® for leading businesses in the global finance and leasing space.

With constant innovation

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

live and some underway.

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

the traditional licensing model.

under the brand name Transcend™ Finance (formerly called NFS Ascent ® ) for leading businesses in the global finance

and leasing space.

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

1 unchanged sentence

around the globe.

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

While the Company follows a global strategy for sales and delivery

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

are also committed to serving Tier-2 and Tier-3 banks and financial institutions.

We understand the unique challenges faced by these

institutions, which is why we offer innovative cloud implementation solutions without any license fees, rapid deployments and the ability

Further, our out-of-the-box, API-first products are designed to seamlessly integrate into existing systems, providing flexibility

and scalability that smaller institutions often need.

By prioritizing accessibility and ease of use, we empower smaller financial companies

to enhance their service offerings and streamline operations, positioning ourselves as a trusted partner in their digital transformation

in 1997, NETSOL is headquartered in Encino, California.

While the Company follows a global strategy for sales and delivery of its portfolio

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

California and Austin, Texas

Metropolitan area, Horsham and Flintshire

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

Karachi, Bangkok, Beijing, Tianjin, Jakarta and Sydney

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

2 unchanged sentences

We believe that people are the drivers of success;

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

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

satisfaction of our clients.

3 unchanged sentences

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

primary offerings include the following:

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

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

and multi-manufacturer environments.

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

those with multi-billion-dollar portfolios.

NFS Ascent ® empowers financial institutions to effectively manage their complex

expertise in enterprise technology and financial application development has helped us emerge as a global player in the finance and leasing

industry and enabled us to secure a broad footprint across the major markets of North America, Asia Pacific and Europe.

The Asia Pacific

region has particularly benefitted from the organic growth in the fast-developing leasing automation industry, which is still nascent

as per Western standards.

is a dynamic leader and has been able to accumulate a wealth of experience in the global asset finance and leasing industry.

built a large knowledge base which is regularly refined and updated to ensure the most up-to-date best practices and business solutions

for the benefit of our clients and partners.

We have a strong presence in the captive asset-finance domain.

We have had continual operations

for nearly three decades in Asia Pacific and Europe and over four decades in North America.

with Global and Regional Customers

have offices across the world, located strategically to maintain close contact and proximity with our customers in various key markets.

This has not only helped us strengthen our customer relationships, but also build a deeper understanding of local market dynamics.

Simultaneously,

we are able to extend services and support development through a combination of onsite and offsite resources.

This approach has allowed

us to offer blended rates to our customers by employing a unique and cost-effective global development model.

our business model is built around the development, implementation and maintenance of our suite of financial applications, we employ

the same facilities and competencies to extend our services to related segments, including but not limited to:

ML and data analytics

global operations are broken down into three primary regions:

North America, Europe and Asia Pacific.

All of the subsidiaries are seamlessly

integrated to function effectively with global delivery capabilities, cross selling to multinational asset finance companies, leveraging

the centralized marketing and pre-sales organization, and a network of employees connected across the globe to support local and global

customers and partners.

PRODUCTS AND SERVICES

the complete finance and leasing lifecycle starting from quotation origination through contract settlements, our products are designed

and developed for highly flexible settings and are capable of dealing with multinational, multi-company, multi-asset, multi-lingual,

multi-distributor and multi-manufacturer environments.

Our solutions empower financial institutions to effectively manage their complex

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

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

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

With comprehensive domain coverage and powerful configuration engines,

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

and transactions.

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

NFS Ascent’s ®

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

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

The platform’s framework allows auto captive and

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

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

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

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

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

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

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

empowers users with:

in overall productivity within the delivery organization:

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

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

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

our existing services.

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

The loose coupling between

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

the system and follows proven and accepted SOA principles.

customer satisfaction:

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

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

ASCENT ® CONSTITUENT APPLICATIONS

Point of Sale (Omni POS)

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

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

Information captured at the point of sale can be made available

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

Management System (CMS)

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

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

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

Finance System (WFS)

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

of wholesale finance.

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

Dealers, distributors,

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

business intelligence.

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

Auditor Access System (DAAS)

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

It addresses the needs

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

Ascent ® deployed on the cloud

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

With swift, seamless deployments and easy

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

This cloud-version

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

license fees.

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

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

NFS Digital is

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

Our insight into the evolving landscape together with our valuable experience

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

remain competitive and relevant to the dynamic environment.

Our digital transformation solutions are extremely robust and can be used

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

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

car configuration, generating quotations, and filling out applications.

It is the ultimate origination application that enables users

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

is a powerful, self-service mobile solution.

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

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

calls for customer queries and improving turnaround time for repayments.

Point of Sale

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

loan calculator, work queues and detailed reporting.

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

increasing overall productivity and system-wide efficiency.

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

Dealers can view their use of floor plan facility,

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

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

It also enables the auditor to conduct

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

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

The tool exponentially increases

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

Field Investigator

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

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

enabling the client to achieve daily goals while tracking performance.

Digital Auto Retail and Mobility Orchestration

Otoz TM provides

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

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

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

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

enables both direct-to-consumer transactions as well as traditional dealer models with the option to add peer-to-peer marketplace functionalities

for the future of EV pay-per-use and mobility orchestration.

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

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

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

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

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

fraud detection tools, CRM systems, website providers (Tier 1 – Tier 3), marketing toolkits, inventory feeds, pricing engines,

tax engine, payment processors, an insurance marketplace and vehicle delivery logistics providers.

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

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

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

both online and offline.

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

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

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

Otoz TM platform

consists of two portals:

● Dealer/Admin

management work queue

roles and rights

delivery scheduling

and insurance products feed and prioritization

■ Accessories/add-on

management and association

fee management

search and selection

■ Multi-lender

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

■ Dealer-Customer-Chat

finance and insurance products including collision & liability insurance via integrated

provider marketplaces

checks (paperless)

options and finance and insurance products

application and decision

contracts and e-signing

delivery and pick-up scheduling

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

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

NetSol will introduce and launch further

products and services under this marketplace in the future.

is an API-based, ready-to-use calculation engine.

It is a pure play SaaS product that is cloud-based and can be integrated seamlessly

into an organization’s products, services, and ecosystem.

The calculation engine intelligently adapts to demand by monitoring usage

to maintain reliable and predictable performance at desired costs.

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

all stages of the contract lifecycle through various calculation types.

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

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

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

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

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

on cutting-edge, modern technology, NETSOL’s unified Transcend™ Platform is an AI-powered digital retail and asset finance

solution for automotive and equipment OEMs, auto captives, commercial lenders, dealers, brokers and financial institutions.

AND SERVICES:

TRANSCEND™ PLATFORM

Transcend™ Platform, powered by NETSOL, is an AI-driven unified ecosystem that revolutionizes how assets are sold, financed and

Designed to automate and optimize every step - from sales to originations to servicing, Transcend™ leverages AI and ML

to drive predictive insights and smarter decision-making.

Retail (Formerly Known as Otoz®)

revolutionize auto and equipment retail with a fully digital, integrated platform that simplifies the entire customer journey.

purchasing to finance approval, Transcend™ Retail (formerly known as Otoz®) offers advanced retail and mobility solutions that

keep dealerships or OEMs at the cutting edge of consumer expectations.

Finance (Formerly Known as Ascent®)

streamline finance and leasing operations with a comprehensive solution for originations, servicing and wholesale finance.

Finance (formerly known as Ascent®) empowers automotive and equipment OEMs, auto captives, commercial lenders, dealers, brokers and

financial institutions with end-to-end visibility and control, ensuring seamless workflows and accelerated business outcomes.

streamline the entire origination process, from submission to approval, with advanced features such as real-time, AI-powered credit decisioning,

automated deal flows and more.

enable financial institutions to attain real-time insights into portfolio performance, delinquencies and losses, enabling proactive portfolio

management and strategic decision-making.

wholesale finance solution empowers customers to gain a competitive edge by automating their wholesale finance and floor planning operations

effortlessly.

Marketplace (Formerly Known as Appex Now)

Marketplace (formerly known as Appex Now) offers a suite of flexible, component-based solutions that integrate seamlessly with the customer’s

existing infrastructure.

Transcend™ Marketplace is a modular, API-first solution that addresses every aspect of finance and leasing

using tools for calculations, document generation, loan origination and lending configurations.

is an API-first, ready-to-use calculation and quotation engine.

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

stages of the contract lifecycle through various calculation types.

All the calculations are parameter-driven, which helps perform simple,

multi-dimensional or complex calculations based on the needs of a business.

Flex™ has a lightning-fast onboarding process, which

can take place in mere minutes.

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

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

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

an API library.

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

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

their desired outcomes.

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

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

and notification service.

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

These services primarily

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

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

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

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

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

their roadmap, and optimize service quality.

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

We aim for our cloud services to

be well recognized, expanding our reach to relevant prospects.

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

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

AWS customer offerings include:

analytics, data pipeline and big data services;

application modernization services;

database migration

and modernization;

development operations;

managed services;

and, information security services.

the leadership of Dr.

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

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

Ahmed has extensive experience in developing

and implementing algorithms for industrial solutions in predictive maintenance.

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

and provide a holistic view of their business processes.

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

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

This solution will facilitate running complex calculations for their business.

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

cloud investments.

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

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

This move aligns with Haydock Finance’s subscription to additional

products from Appex Now.

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

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

This expanded scope implementation

will generate approximately $3.5 Million in additional revenues.

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

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

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

We signed a contract with

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

This contract will generate

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

We generated approximately

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

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

account authentication, finance and insurance products, fraud check, know your customer (KYC) service, driver license verification, address

validation, vehicle valuation and notification service.

is a cloud-based parameter storage that smoothly runs all of a company’s core lending operations.

It is an accumulation of all

the master setups, including asset catalog and inventory, programs, rates, and profiles for lenders, dealers and multiple partners,

in one centralized location for all business types.

Index™ can enhance delivery efficiency and program management for easy

integration into all systems.

is an advanced document generation tool that lets a company create accurate and professional-looking documents in just seconds.

Dock™’s template-based configuration, a company can set up placeholders for data, essentially simplifying the document creation

process and reducing the chance of human error.

Its API-first architecture ensures scalability, making it capable of handling any document

generation task, from single documents to millions, with ease.

offers a feature-rich, end-to-end order management system for asset leasing and loans and credit companies.

Our platform covers all aspects,

from conducting end-to-end sales to performing dealer and partner-related tasks and marketing-related activities.

The system offers a

variety of dashboards that provide vital information for dealers and partners while enabling quick order management and providing a way

for users to record and submit a complete credit application for their clients.

is a purpose-built platform designed for brokers, lenders, dealers and borrowers to work seamlessly together.

With tailored solutions

that simplify applications and automate key processes, Link™ is designed to enhance customer relationships whilst making compliance effortless.

This results in faster approvals, enriched customer experiences and stronger loyalty via elevated customer satisfaction.

and effectiveness are paramount for any broker.

Managing disparate systems and processes can be cumbersome and time consuming, often

leading to inefficiencies and missed opportunities.

NETSOL offers a solution to these challenges by consolidating disparate processes

into a single unified interface, revolutionizing the way a brokerage operates.

lender-specific portals are designed to transform the lending process by enhancing risk management and driving profitability.

tools not only streamline loan origination, but also facilitate seamless communication and collaboration with the lending ecosystem.

We empower a company’s lending process with intuitive and efficient lender portals designed for a seamless user experience.

the competitive automotive industry, dealers need efficient and comprehensive solutions to manage their operations effectively.

intermediary portals serve as digital command centers, providing dealers with a wide array of tools, resources and services to optimize

every aspect of their business, from inventory management to sales and marketing.

businesses with Transcend™ Consulting Services, we offer expert guidance across critical areas like information security, data

engineering and cloud services.

Our team partners with businesses to create tailored solutions that drive innovation, efficiency and

are leading AI-driven innovation with our Transcend™ AI Labs, integrating advanced AI services into our product suite to solve

the unique challenges of BFSI, equipment and auto OEMs and dealerships.

Our tailored solutions drive industry-specific advancements,

helping companies stay ahead in a competitive market.

below are a few of NetSol’s highlights for the quarter ended September 30, 2024:

renewed a support contract with one of our existing clients in China for the next 5 years that will generate over $30 million in revenues.

signed a contract with an independent finance company operating in the UK, particularly across Northern Ireland and Scotland that

will generate approximately $600K in revenues over the next 5 years.

The client specializes in providing personal and commercial

asset finance products, serving various markets including motor, agricultural, insurance premium, and leisure finance.

signed contracts that are expected to generate approximately $225K in revenue from professional services for two of our customers

generated nearly $1.7 million in services revenues from modifications and enhancements for multiple customers across various regions.

successfully went live with our wholesale platform with a leading leasing company based in the Netherlands that is primarily focused

on small and medium-sized enterprises (SMEs).

business effectively rebranded and repositioned its products on the Transcend™ platform.

The platform is an AI-driven unified

ecosystem that revolutionizes how assets are sold, financed and leased.

Designed to automate and optimize every step - from sales

to originations to servicing, Transcend™ leverages AI and ML to drive predictive insights and facilitate smarter decision-making.

Company launched its new corporate website.

The new website represents a significant leap forward in unifying our products and

services under a single, cohesive platform.

The new corporate website facilitates a simplified customer journey and has our design

refreshed with a vibrant, modern and aesthetically appealing visuals and comes with an engaging and easy-to-understand

has identified the following material trends affecting NETSOL.

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

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

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

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

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

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

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

(CNBC April 24, 2024)

market remains strong and resilient for NetSol to continue investing in building local

teams for its core offerings.

Chinese car market is expected to maintain its position as the world’s largest and

fastest growing, projecting 10% sales growth to 25.5 million units, with electric vehicles

(EVs) representing nearly 35% of new sales.

Government incentives, reduced car taxes, and

preferential financing rates contributed to an 8.8% increase in Chinese auto sales in the

first half of 2023, with total vehicle sales, including trucks and buses, rising by 9.8%

to 13.2 million.

China Pakistan Economic Corridor (CPEC) investment, initiated by China, has exceeded $65

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

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

as a short-term loan.

overall size of the mobility market in the Europe and the United States is projected to increase

over $425 billion combined, by 2035 or a compound CAGR of 5% from 2022.

(Deloitte Global

Automotive Mobility Market Simulation Tool)

global automotive finance market accounted for $245 billion in 2022 and is expected to more

than double by 2035 at a CAGR of 7.4% according to Precedence Research.

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

(CBS News December

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

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

In the third quarter, real GDP increased 4.9%.

(Bureau of Economic Analysis - January 25,

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

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

automotive sales volumes are expected to reach approximately 15.9 million units, in 2024 sales, an estimated increase of 2%

compared to 2023.

(S&P Global Mobility)

inflation rate decreased and ended at 2.4% at September 2024.

(US Inflation Rate – Trading Economics)

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

2024, China domestic auto sales are expected to be at approximately 31 million units, a 3% increase from 2023.

(China Passenger Car

China, domestic electric vehicles sales are up 73% compared to August 2023.

(Clean Technica 09/01/2024)

China Pakistan Economic Corridor (CPEC) investment, initiated by China, has exceeded $65 billion from the originally planned $46

billion, in Pakistan energy and infrastructure sectors.

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

to Pakistan as a short-term loan.

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

or a compound CAGR of 5% from 2022.

(Deloitte Global Automotive Mobility Market Simulation Tool)

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

according to Precedence Research.

economy grew at an annual rate of 3% for the second quarter of 2024.

This report reflects the U.S.

economy to be resilient despite

other pressures including inflation and higher interest rates.

(Associated Press August 29, 2024)

Federal Reserve cut interest rates by half a point in September 2024 and another half point reduction is forecasted by December 2024.

Russell index has returned an average of 14.4% during 2024.

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

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

The conflict has expanded to neighboring nations

such as Syria, Lebanon and Iran.

The unrest and turmoil in the region is negative for the regional business environment.

economic conditions in our geographic markets;

inflation, geopolitical tensions, including

trade wars, tariffs and/or sanctions in geographic areas;

and global conflicts or disasters

that impact the global economy or one or more sectors of the global economy.

interest rate increases by the U.S.

Federal Reserve Board is restricting buying power for

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

impacting Pakistan exports.

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

salaries and benefits worldwide, affecting profitability.

inflation, pending U.S.

elections, geopolitical tensions, including trade wars, tariffs

and/or sanctions in geographic areas;

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

the global economy.

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

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

affecting profitability.

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

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

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

for a robust economic recovery.

geo-political environment in South Asia will continue to influence Pakistan’s economic prospects.

Pakistan’s political

uncertainty has caused higher inflation with constant pressure on its currency being devalued against the US Dollar.

a report issued by the World Bank, while marginal economic growth is expected in Pakistan, implementing an ambitious and credibly

communicated economic reform plan is critical for a robust economic recovery.

There is no guarantee that such reforms will be implemented.

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

is no guarantee that such reforms will be implemented.

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

Continued trade tensions between the U.S.

and China are causing some American

companies to pull out of China and move their supply chain elsewhere.

(Business Insider,

Bookings, January 12, 2024).

the US-China bilateral summit in January 2024 exceeded expectations, the tensions between the two countries continue.

EU have placed tariffs on a range of high-tech products from China including the US placing 100% tariffs on EV vehicles and 25% tariffs

on EV batteries imported from China.

(Center for Strategic and International Studies June 28, 2024).

IN FINANCIAL CONDITION

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

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

Ended September 30, 2024 Compared to the Quarter Ended September 30, 2023

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

30, 2024 and 2023 as a percentage of revenues.

For the Three Months

Ended March 31,

Net Revenues:

Subscription and support

Total net revenues

Cost of revenues

the Three Months

September 30,

general and administrative

and development cost

operating expenses

Selling, general and administrative

Research and development cost

Total operating expenses

Income (loss) from operations

Other income and (expenses)

Interest expense

Interest income

Gain (loss) on foreign currency exchange transactions

Share of net loss from equity investment

Other income (expense)

Total other income (expenses)

Net income before income taxes

Income tax provision

Non-controlling interest

Net income (loss) attributable to NetSol

Net income (loss) per share:

Net income (loss) per common

Weighted average number of

shares outstanding

(loss) from operations

income and (expenses)

(loss) on foreign currency exchange transactions

other income (expenses)

income before income taxes

tax provision

Non-controlling

income attributable to NetSol

income per share:

income per common share

average number of shares outstanding

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

10 unchanged sentences

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

In order to provide a framework for

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

in results from one period to another period using constant currency.

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

current period results to the prior period foreign currency exchange rates.

In the table below, we present the change based on actual

results in reported currency and in constant currency.

In order to provide a framework for assessing

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

one period to another period using constant currency.

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

results to the prior period foreign currency exchange rates.

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

currency and in constant currency.

the Three Months

(Unfavorable)

For the Three Months

(Unfavorable) Change in

Change due to

Favorable (Unfavorable)

Ended March 31,

Net Revenues:

Cost of revenues:

Operating expenses:

Income (loss) from operations

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

North America

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

(Unfavorable)

September 30,

(loss) from operations

$ (1,110,787 )

revenues for the three months ended September 30, 2024 and 2023 are broken out among the segments as follows:

fees for the three months ended September 30, 2024 were $1,229 compared to $1,280,449 for the three months ended September 30, 2023 reflecting

a decrease of $1,279,220 with a decrease in constant currency of $1,279,251.

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

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

During the three months ended March 31, 2023, we recognized approximately $1,918,000 related to a new NFS Ascent® agreement

with Kubota in Australia.

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

During the three months ended September 30, 2023, we recognized

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

and support fees for the three months ended September 30, 2024 were $8,192,471 compared to $6,512,243 for the three months ended September

30, 2023 reflecting an increase of $1,680,228 with an increase in constant currency of $1,625,032.

Subscription and support fees begin once a

customer has “gone live” with our product.

The increase includes a one-time catch

up of approximately $639,000 upon signing a new contract with an existing customer in China.

Subscription and support fees begin once

a customer has “gone live” with our product.

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

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

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

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

The increase is due to the increase in fees associated

with current implementations.

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

income for the three months ended September 30, 2024 was $6,404,798 compared to $6,449,489 for the three months ended September 30, 2023

reflecting a decrease of $44,691 with a decrease in constant currency of $147,175.

gross profit was $6,564,112, for the three months ended September 30, 2024 compared with $6,162,017 for the three months ended

September 30, 2023.

This is an increase of $402,095 with an increase in constant currency of $523,754.

The gross profit percentage for the three

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

The cost of sales was $7,989,696

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

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

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

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

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

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

As a percentage of sales, salaries and consultant expense

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

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

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

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

for the current implementations.

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

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

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

The gross profit percentage

for the three months ended September 30, 2024 also increased to 45.0% from 43.3% for the three months ended September 30, 2023.

cost of sales was $8,034,386 for the three months ended September 30, 2024 compared to $8,080,164 for the three months ended

September 30, 2023 for a decrease of $45,778 and on a constant currency basis a decrease of $303,414.

As a percentage of sales, cost

of sales decreased from 56.7% for the three months ended September 30, 2023 to 55.0% for the three months ended September 30,

and consultant fees increased by $245,591 from $5,958,143 for the three months ended September 30, 2023 to $6,203,734 for the three months

ended September 30, 2024 and on a constant currency basis increased by $48,406.

The increase is due to annual salary raises.

As a percentage

of sales, salaries and consultant expense increased from 41.8% for the three months ended September 30, 2023 to 42.5% for the three months

ended September 30, 2024.

expenses were $570,862 for the three months ended September 30, 2024 compared to $660,367 for the three months ended September 30, 2023

for a decrease of $89,505 with a decrease in constant currency of $104,248.

As a percentage of sales, travel expense decreased from 4.6%

for the three months ended September 30, 2023 to 3.9% for the three months ended September 30, 2024.

and amortization expense decreased to $228,550 compared to $392,983 for the three months ended September 30, 2023 or a decrease of $164,433

and on a constant currency basis a decrease of $173,914.

The decrease is primarily attributed to the full amortization of capitalized

software costs in the quarter ending March 31, 2024.

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

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

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

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

As a percentage of sales, it decreased from 41.7%

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

other general and administrative expenses.

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

costs decreased to $1,031,240 for the three months ended September 30, 2024 compared to $1,068,671 for the three months ended September

30, 2023 or a decrease of $37,431 and on a constant currency basis a decrease of $73,658.

expenses were $7,324,270 for the three months ended September 30, 2024 compared to $5,811,388, for the three months ended September 30,

2023 for an increase of $1,512,882 and on a constant currency basis an increase of $1,345,545.

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

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

During the three months ended March

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

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

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

As a percentage of sales, it increased

from 40.8% to 50.2%.

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

wages, professional services, provision for doubtful accounts, and other general and administrative expenses.

expenses were $2,292,199 for the three months ended September 30, 2024 compared to $1,708,865, for the three months ended September 30,

2023 for an increase of $583,334 and on a constant currency basis an increase of $535,603.

The increase is mainly due to increases is

salaries and consultants of approximately $434,000, due to annual raises and the hiring of additional marketing personnel.

Other marketing

expenses increased by approximately $110,000 due to the increase in marketing events.

and administrative expenses were $4,534,675 for the three months ended September 30, 2024 compared to $3,586,301 for the three months

ended September 30, 2023 or an increase of $948,374 and on a constant currency basis an increase of $848,669.

During the three months

ended September 30, 2024, salaries increased by approximately $439,044 and increased $385,664 on a constant currency basis, and other

general and administrative expenses increased approximately $99,770 or increased by $69,090 on a constant currency basis.

and development cost was $359,949 for the three months ended September 30, 2024 compared to $378,419, for the three months ended September

30, 2023 for a decrease of $18,470 and on a constant currency basis a decrease of $33,790.

from Operations

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

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

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

from operations was $760,158 for the three months ended September 30, 2024 compared to income from operations of $350,629 for the three

months ended September 30, 2023.

This represents an increase in loss of $1,110,787 with an increase in loss of $821,791 on a constant

currency basis for the three months ended September 30, 2024 compared with the three months ended September 30, 2023.

As a percentage

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

March 31, 2023.

of sales, loss from operations was 5.2% for the three months ended September 30, 2024 compared to income from operations of 2.5% for the

three months ended September 30, 2023.

Income and Expense

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

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

is primarily due to the foreign currency exchange transactions.

income was $1,207,684 for the three months ended September 30, 2024 compared to $62,329 for the three months ended September 30, 2023.

This represents an increase of $1,145,355 with an increase of $1,095,873 on a constant currency basis.

The increase is primarily due

to the foreign currency exchange transactions and interest income.

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

2 unchanged sentences

dollar and the Euro.

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

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

During the three months ended March

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

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

During the three months ended March

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

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

Non-controlling

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

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

The decrease in non-controlling interest is primarily

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

income (loss) attributable to NetSol

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

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

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

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

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

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

31, 2024 and 2023 as a percentage of revenues.

For the Nine Months

Ended March 31,

Net Revenues:

Subscription and support

Total net revenues

Cost of revenues

Operating expenses:

Selling, general and administrative

Research and development cost

Total operating expenses

Income (loss) from operations

Other income and (expenses)

Interest expense

Interest income

Gain (loss) on foreign currency exchange transactions

Share of net loss from equity investment

Other income (expense)

Total other income (expenses)

Net income before income taxes

Income tax provision

Non-controlling interest

Net income (loss) attributable to NetSol

Net income (loss) per share:

Net income (loss) per common share

Weighted average number of shares outstanding

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

We operate in several geographical regions

as described in Note 16 “Operating Segments” within the Notes to the Condensed Consolidated Financial Statements.

of the value of the U.S.

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

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

Similarly, strengthening of the U.S.

dollar compared to

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

other than the U.S.

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

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

In order to provide a framework for

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

in results from one period to another period using constant currency.

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

current period results to the prior period foreign currency exchange rates.

In the table below, we present the change based on actual

results in reported currency and in constant currency.

(Unfavorable)

For the Nine Months

(Unfavorable) Change in

Change due to

Favorable (Unfavorable)

Ended March 31,

Net Revenues:

Cost of revenues:

Operating expenses:

Income (loss) from operations

$ (5,873,140 )

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

North America

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

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

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

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

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

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

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

to a renowned German auto manufacturer based in China, approximately $1,918,000 related to a new NFS Ascent ® agreement

with Kubota in Australia and approximately $188,000 related to a new agreement with the Government of Khyber Pakhtunkhwa for the sale

of our Ascent ® product.

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

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

Subscription and support fees begin once

a customer has “gone live” with our product.

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

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

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

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

The increase is due to the increase in fees associated

with current implementations.

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

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

The gross profit percentage for the nine

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

The cost of sales was $24,132,064

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

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

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

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

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

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

The increase on a constant currency basis is due

to annual salary raises.

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

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

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

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

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

for current implementations.

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

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

The decrease is primarily attributed to the full amortization of capitalized

software costs in the quarter ending March 31, 2024.

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

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

The increase on a constant currency basis is mainly

due to increases in computer costs.

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

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

As a percentage of sales, it decreased from 46.6%

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

administrative expenses, and research and development costs.

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

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

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

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

During the nine months ended March

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

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

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

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

from Operations

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

nine months ended March 31, 2023.

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

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

ended March 31, 2023.

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

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

Income and Expense

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

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

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

dollars or Euros;

therefore, the currency fluctuations will lead to foreign currency

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

dollar and the Euro.

During the nine months ended March

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

months ended March 31, 2023.

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

dollar and the Euro decreased 3.2% and

4.0%, respectively, compared to the PKR.

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

dollar and the Euro increased

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

During the three months ended September 30, 2024, we recognized a gain of $542,545 in foreign

currency exchange transactions compared to a loss of $134,253 for the three months ended September 30, 2023.

During the three months

ended September 30, 2024, the value of the U.S.

dollar decreased 0.2% and the Euro increased 3.9%, compared to the PKR.

During the three

months ended September 30, 2023, the value of the U.S.

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

the three months ended September 30, 2024, interest income was $769,867 compared to $414,718 for the three months ended September 30,

2023, for an increase of $355,149 and on constant currency basis an increase of $322,401.

Non-controlling

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

the nine months ended March 31, 2023.

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

PK and an increase in net loss from NetSol Innovation.

the three months ended September 30, 2024, the net income attributable to non-controlling interest was $146,914, compared to $260,173

for the three months ended September 30, 2023.

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

of NetSol Innovation.

income (loss) attributable to NetSol

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

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

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

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

net income was $70,795 for the three months ended September 30, 2024 compared to $30,890 for the three months ended September 30, 2023.

This is an increase in income of $39,905 with an increase of $153,796 on a constant currency basis, compared to the prior year.

three months ended September 30, 2024, net income per share was $0.006 for basic and diluted shares compared to net income per share

of $0.003 for basic and diluted shares for the three months ended September 30, 2023.

Financial Measures

4 unchanged sentences

define the non-GAAP measures as follows:

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

and amortization.

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

adjusted EBITDA is EBITDA plus stock-based compensation expense.

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

by the weighted average shares outstanding and diluted shares outstanding.

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

and diluted shares outstanding.

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

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

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

For the Three Months

For the nine Months

Ended March 31,

Net Income (loss) attributable to NetSol

Non-controlling interest

Depreciation and amortization

Interest expense

Interest (income)

Non-cash stock-based compensation

Adjusted EBITDA, gross

Less non-controlling interest (a)

Adjusted EBITDA, net

Weighted Average number of shares outstanding

Basic adjusted EBITDA

Diluted adjusted EBITDA

(a)The reconciliation of adjusted EBITDA of non-controlling interest

to net income attributable to non-controlling interest is as follows

Net Income (loss) attributable to non-controlling interest

Depreciation and amortization

Interest expense

Interest (income)

Non-cash stock-based compensation

Adjusted EBITDA of non-controlling interest

GAAP measures for the three months ended September 30, 2024 and 2023 are as follows:

the Three Months

September 30,

Income (loss) attributable to NetSol

Non-controlling

and amortization

stock-based compensation

EBITDA, gross

non-controlling interest (a)

Weighted Average

number of shares outstanding

adjusted EBITDA

reconciliation of adjusted EBITDA of non-controlling interest to net income attributable to non-controlling interest is as follows

Income (loss) attributable to non-controlling interest

and amortization

stock-based compensation

EBITDA of non-controlling interest

AND CAPITAL RESOURCES

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

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

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

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

of $22,894,164.

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

We had revenues

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

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

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

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

During the nine months ended

March 31, 2024, our revenues in excess of billings were reclassified to accounts receivable pursuant to billing requirements detailed

in each contract.

The combined totals for accounts receivable and revenues in excess of billings increased by $8,146,499 from $24,092,099

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

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

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

cash position was $24,525,956 at September 30, 2024, compared to $19,127,165 at June 30, 2024.

cash provided by operating activities was $5,517,745 for the three months ended September 30, 2024 compared to $1,663,619 for the three

months ended September 30, 2023.

At September 30, 2024, we had current assets of $46,533,702 and current liabilities of $22,372,380.

We had accounts receivable of $5,936,063 at September 30, 2024 compared to $13,049,614 at June 30, 2024.

We had revenues in excess of

billings of $13,609,959 at September 30, 2024 compared to $13,638,547 at June 30, 2024 of which $866,388 and $954,029 is shown as long

term as of September 30, 2024 and June 30, 2024, respectively.

The long-term portion was discounted by $133,867 and $152,446 at September

30, 2024 and June 30, 2024, respectively, using the discounted cash flow method with interest rates ranging from 7.3% to 17.5%.

the three months ended September 30, 2024, our revenues in excess of billings were reclassified to accounts receivable pursuant to billing

requirements detailed in each contract.

The combined totals for accounts receivable and revenues in excess of billings decreased by $7,142,139

from $26,688,161 at June 30, 2024 to $19,546,022 at September 30, 2024.

Accounts payable and accrued expenses, and current portions of

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

average days sales outstanding for the nine months ended March 31, 2024 and 2023 were 172 and 167 days, respectively, for each period.

loans and lease obligations amounted to $8,414,790 and $6,443,937, respectively at September 30, 2024.

Accounts payable and accrued expenses,

and current portions of loans and lease obligations amounted to $8,232,342 and $6,276,125, respectively, at June 30, 2024.

average days sales outstanding for the three months ended September 30, 2024 and 2023 were 150 and 144 days, respectively, for each period.

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

revenues in excess of billings.

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

March 31, 2023.

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

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

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

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

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

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

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

We are operating in various geographical regions of

the world through our various subsidiaries.

Those subsidiaries have financial arrangements from various financial institutions to meet

both their short and long-term funding requirements.

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

of the financial statements.

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

lead to early payment of these obligations.

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

cash used in investing activities was $108,632 for the three months ended September 30, 2024, compared to $370,400 for the three months

ended September 30, 2023.

We had purchases of property and equipment of $100,737 compared to $371,630 for the three months ended September

cash provided by financing activities was $153,189 for the three months ended September 30, 2024, compared to net cash used in financing

activities of $44,474 for the three months ended September 30, 2023.

During the three months ended September 30, 2024, we had net payments

for bank loans and finance leases of $118,311 compared to $44,474 for the three months ended September 30, 2023.

We are operating in

various geographical regions of the world through our various subsidiaries.

Those subsidiaries have financial arrangements from various

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

These loans will become due at different maturity

dates as described in Note 12 of the financial statements.

We are in compliance with the covenants of the financial arrangements and

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

We anticipate paying back all these obligations on their respective

due dates from its own sources.

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

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

As of March 31, 2024, we had approximately

As of September 30, 2024, we had approximately

$24.5 million of cash, cash equivalents and marketable securities of which approximately $22.8 million is held by our foreign subsidiaries.

45 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis