What changed in this filing

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Item 1. Financial Statements

2025-11-12 compared with 2025-05-14 · 419 added, 436 removed, 676 unchanged (56% of the section changed)

9 unchanged sentences

net of allowance of $ 31,662 and $ 34,496

current assets

Other current assets

current assets

9 unchanged sentences

lease obligations

Unearned revenue

current liabilities

4 unchanged sentences

Stockholders’ equity:

Preferred stock, $ .01 par

Preferred stock, $ .01 par value;

shares authorized;

Common stock, $ .01 par

Common stock, $ .01 par value;

shares authorized;

12,648,574 shares issued and 11,709,543 outstanding as of March 31, 2025, 12,359,922

shares issued and 11,420,891 outstanding as of June 30, 2024

12,733,907 shares issued and 11,794,876 outstanding as of September 30, 2025;

12,700,465 shares issued and 11,761,434

outstanding as of June 30, 2025

Additional paid-in-capital

Treasury stock (at cost,

939,031 shares as of March 31, 2025 and June 30, 2024)

Treasury stock (at cost, 939,031 shares as

of September 30, 2025 and June 30, 2025)

( 3,920,856 )

3 unchanged sentences

( 41,289,080 )

comprehensive loss

Other comprehensive loss

( 46,402,374 )

1 unchanged sentence

NetSol stockholders’ equity

Non-controlling

Non-controlling interest

stockholders’ equity

4 unchanged sentences

Consolidated Statements of Operations

For the Three Months

For the Nine Months

the Three Months Ended September 30,

Net Revenues:

1 unchanged sentence

Total net revenues

Operating expenses:

Selling, general and administrative

1 unchanged sentence

Total operating expenses

Income (loss) from operations

Other income and (expenses)

(loss) from operations

( 1,838,706 )

income and (expenses)

Interest expense

2 unchanged sentences

currency exchange transactions

( 1,112,757 )

Total other income (expenses)

Net income before income

income before income taxes

( 2,001,590 )

tax provision

( 2,217,365 )

Non-controlling

income attributable to NetSol

Net income per share:

$ ( 2,357,288 )

income per share:

Net income per common share

Weighted average number of shares outstanding

average number of shares outstanding

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

2 unchanged sentences

Consolidated Statements of Comprehensive Income (Loss)

For the Three Months

For the Nine Months

the Three Months Ended September 30,

$ ( 2,357,288 )

Other comprehensive income

Translation adjustment

adjustment attributable to non-controlling interest

Translation adjustment

Comprehensive

income (loss) attributable to NetSol

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

TECHNOLOGIES, INC.

AND SUBSIDIARIES

Consolidated Statement of Stockholders’ Equity

statement of the changes in equity for the three months ended March 31, 2025 is provided below:

Comprehensive

Stockholders’

Balance at December 31, 2024

$ 129,194,697

$ ( 3,920,856 )

$ ( 45,288,560 )

$ ( 46,187,766 )

Exercise of common stock options

Common stock issued for:

Purchase of subsidiary treasury shares

( 1,503,662 )

Adjustment in APIC for change in subsidiary

shares to non-controlling interest

Foreign currency translation adjustment

Net income for the period

Balance at March 31,

$ 129,366,638

$ ( 3,920,856 )

$ ( 43,864,592 )

$ ( 46,253,619 )

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

Comprehensive

Stockholders’

Balance at September 30, 2024

$ 128,709,890

$ ( 3,920,856 )

$ ( 44,141,518 )

$ ( 46,049,023 )

Exercise of common stock options

Common stock issued for:

Fair value of subsidiary options issued

Acquisition of non-controlling interest in

Dividend to non-controlling interest

Foreign currency translation adjustment

Net income (loss) for

( 1,147,042 )

( 1,186,206 )

Balance at December

$ 129,194,697

$ ( 3,920,856 )

$ ( 45,288,560 )

attributable to non-controlling interest

Net translation adjustment

Comprehensive income (loss)

attributable to NetSol

$ ( 2,146,454 )

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

TECHNOLOGIES, INC.

9 unchanged sentences

$ ( 46,613,208 )

Exercise of common stock options

Common stock issued for:

Fair value of subsidiary options issued

Acquisition of non-controlling interest in

Foreign currency translation adjustment

Net income (loss) for

Balance at September

$ 128,709,890

$ ( 3,920,856 )

$ ( 44,141,518 )

$ ( 46,049,023 )

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

Comprehensive

Stockholders’

Balance at December 31, 2023

$ 128,587,384

$ ( 3,920,856 )

$ ( 44,456,980 )

$ ( 45,870,309 )

Exercise of subsidiary common

stock options

Common stock issued for:

of options issued

Fair value of options issued

of subsidiary options issued

Foreign currency translation adjustment

Net income (loss) for

Balance at March 31,

$ 128,736,328

$ ( 3,920,856 )

Foreign currency translation

( 2,357,288 )

( 2,217,365 )

TECHNOLOGIES, INC.

AND SUBSIDIARIES

Consolidated Statement of Stockholders’ Equity

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

Comprehensive

Stockholders’

Balance at September

3 unchanged sentences

$ ( 46,402,374 )

Common stock issued for:

Fair value of subsidiary options issued

Foreign currency translation adjustment

Net income (loss) for

Balance at December

$ 128,587,384

$ ( 3,920,856 )

$ ( 44,456,980 )

$ ( 45,870,309 )

statement of the changes in equity for the three months ended September 30, 2024 is provided below:

10 unchanged sentences

$ ( 45,935,616 )

Common stock issued for:

Exercise of common stock

Common stock issued for:

Fair value of subsidiary options issued

Foreign currency translation adjustment

Common stock issued for Services

Fair value of subsidiary

options issued

Acquisition of non-controlling

interest in subsidiary

Foreign currency translation

Net income (loss) for

Net income (loss)

Balance at September 30, 2024

11 unchanged sentences

Consolidated Statements of Cash Flows

For the Nine Months

Cash flows from operating

the Three Months Ended September 30,

flows from operating activities:

$ ( 2,217,365 )

Adjustments to reconcile

net income to net cash provided by operating activities:

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

Depreciation and amortization

4 unchanged sentences

Accounts receivable

( 3,922,773 )

Revenues in excess of

( 1,411,983 )

( 3,904,609 )

Revenues in excess of billing

Other current assets

Accounts payable and

accrued expenses

( 1,136,533 )

( 6,646,170 )

cash provided by (used in) operating activities

Accounts payable and accrued

( 2,813,220 )

Cash flows from investing

Purchases of property

and equipment

Sales of property and

of subsidiary shares

cash provided by operating activities

flows from investing activities:

Purchases of property and

Sales of property and equipment

Investment in associates

Purchase of subsidiary

cash used in investing activities

Cash flows from financing

flows from financing activities:

Proceeds from the exercise

of stock options and warrants

Dividend paid by subsidiary

to non-controlling interest

Purchase of subsidiary

treasury stock

( 1,503,662 )

Proceeds from exercise

of subsidiary options

Proceeds from bank loans

2 unchanged sentences

of exchange rate changes

Net increase (decrease)

in cash and cash equivalents

( 3,194,612 )

Cash and cash equivalents

at beginning of the period

(decrease) in cash and cash equivalents

and cash equivalents at beginning of the period

and cash equivalents at end of period

3 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

For the Nine Months

the Three Months Ended September 30,

SUPPLEMENTAL DISCLOSURES:

Cash paid during the period

NON-CASH INVESTING AND FINANCING ACTIVITIES:

acquired under finance lease

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

38 unchanged sentences

Innovation (Private) Limited (“NetSol Innovation”)

Institute of Artificial Intelligence (Private) Limited (“NIAI”)

Ascent Middle East Computer Equipment Trading LLC (“Namecet”)

8 unchanged sentences

the reporting period.

The areas requiring significant estimates are provision for doubtful accounts, provision for taxation, useful life

of depreciable assets, useful life of intangible assets, contingencies, assumptions used to determine the net present value of operating

lease liabilities, and estimated contract costs.

The estimates and underlying assumptions are reviewed on an ongoing basis.

Actual results

could differ from those estimates.

The areas requiring significant estimates are the measurement of progress toward completion of long-term software

implementation projects, the allocation of the transaction price in multiple performance obligations, expected credit loss on accounts

receivable and revenues in excess of billings, provision for taxation, useful life of depreciable assets, useful life of intangible assets,

contingencies, the determination of stock-based compensation expense and estimated contract costs.

The estimates and underlying assumptions

are reviewed on an ongoing basis.

Actual results could differ from those estimates.

Concentration

9 unchanged sentences

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

As of March 31, 2025, and June 30, 2024, the Company had uninsured

deposits related to cash deposits in accounts maintained within foreign entities of approximately $ 17,848,732 and $ 18,182,002 , respectively.

As of September 30, 2025, and June 30, 2025, the Company had

uninsured deposits related to cash deposits in accounts maintained within foreign entities of approximately $ 21,972,967 and $ 16,386,079 ,

respectively.

The Company has not experienced any losses in such accounts.

25 unchanged sentences

to Condensed Consolidated Financial Statements

Company’s financial assets that were measured at fair value on a recurring basis as of March 31, 2025, were as follows:

Company’s financial assets that were measured at fair value on a recurring basis as of September 30, 2025, were as follows:

SCHEDULE OF FAIR VALUE OF FINANCIAL ASSETS MEASURED ON RECURRING BASIS

2 unchanged sentences

excess of billings - long term

reconciliation from June 30, 2024 to March 31, 2025 is as follows:

reconciliation from June 30, 2025 to September 30, 2025 is as follows:

SCHEDULE OF FAIR VALUE OF FINANCIAL INSTRUMENTS RECONCILIATION

in excess of billings - long term

Revenues in excess of

billings - long term

value discount

4 unchanged sentences

Effect of Translation

Balance at March

Balance at September 30, 2025

$ ( 183,137 )

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

7 unchanged sentences

Accounting Standards :

December 2023, the FASB issued ASU No.

2023-09 – Income Taxes (Topic ASC 740) Income Taxes .

This ASU improves the transparency

of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation, as

well as disaggregated income taxes paid by jurisdiction.

The amendments are effective for annual periods beginning after December 15,

For the Company, this corresponds to fiscal year 2026.

The amendments will be applied on a prospective basis, although retrospective

application for prior periods is permitted.

The Company expects the adoption of this ASU to result in additional disclosures but does

not anticipate any impact on its financial position, results of operations, or cash flows.

November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03,

Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

ASU 2023-07 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.

ASU 2023-07 is effective for the Company’s Annual

Report on Form 10-K for the fiscal year ending June 30, 2025, and subsequent interim periods, with early adoption permitted.

We are evaluating

the impact of adopting this ASU on our consolidated financial statements and related disclosures.

Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of

Income Statement Expenses .

Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03.

The standard requires disclosure of specified information about certain costs and expenses, including purchases of inventory, employee

compensation, depreciation, and intangible asset amortization from each relevant expense caption.

The amendments are effective for annual

reporting periods beginning after December 15, 2026, which corresponds to the Company’s fiscal year 2028 and interim periods beginning

after December 15, 2027, which corresponds to the Company’s first quarter of fiscal 2029.

Early adoption and retrospective application

are permitted but not required.

The Company plans to adopt the standard and make the required disclosures beginning in fiscal year 2028

for annual periods and in Q1 of fiscal 2029 for interim periods.

The Company expects the adoption of this ASU to result in additional

disclosures but does not anticipate any impact on its financial position, results of operations, or cash flows.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , to enhance transparency

and decision usefulness of income tax disclosures, particularly around rate reconciliations and income taxes paid information.

is effective for our Annual Report on Form 10-K for the fiscal year ending June 30, 2026, on a prospective basis, with early adoption

We are evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.

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

40 unchanged sentences

post contract support renewals, subscription renewals and services engagements.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

contracts with multiple performance obligations where the contracted price differs from the standalone selling price (“SSP”)

1 unchanged sentence

obligation using its best estimate for the SSP.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

of control for software is considered to have occurred upon delivery of the product to the customer.

40 unchanged sentences

SCHEDULE OF DISAGGREGATED REVENUE BY CATEGORY

For the Three Months

For the Nine Months

Subscription and support

Total core revenue, net

Total non-core revenue, net

Total net revenue

the Three Months Ended September 30,

core revenue, net

non-core revenue, net

to the complexity of certain contracts, the actual revenue recognition treatment required under Topic 606 for the Company’s arrangements

57 unchanged sentences

in excess of billings

Unearned revenue

Company’s unearned revenue reconciliation is as follows:

SCHEDULE OF UNEARNED REVENUE RECONCILIATION

at June 30, 2024

Balance at June 30, 2025

Revenue Recognized

( 8,003,905 )

at March 31, 2025

the three and nine months ended March 31, 2025, the Company recognized revenue of $ 549,933 and $ 8,236,336 , that was included in the unearned

revenue balance at the beginning of the period.

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

to the timing of revenue recognition.

Balance at September 30, 2025

the three months ended September 30, 2025, the Company recognized revenue of $ 1,570,000 , that was included in the unearned revenue balance

at the beginning of the period.

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

revenue recognition.

TECHNOLOGIES, INC.

3 unchanged sentences

future periods.

Contracted but unsatisfied performance obligations were approximately $ 16,000,000 as of March 31, 2025, of which the

Company estimates to recognize approximately $ 15,000,000 in revenue over the next 12 months and the remainder over an estimated 3 years

Contracted but unsatisfied performance obligations were approximately $ 18,664,000 as of September 30, 2025, of which

the Company estimates to recognize approximately $ 13,440,000 in revenue over the next 12 months and the remainder over an estimated 3

years thereafter .

Actual revenue recognition depends in part on the timing of software modules installed at various customer sites.

32 unchanged sentences

perform additional duties beyond new customer contract inception dates, including fulfillment duties and collections efforts.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

4 – EARNINGS PER SHARE

6 unchanged sentences

SCHEDULE OF DILUTIVE POTENTIAL COMMON SHARES

the three months ended

the nine months ended

Basic income per share:

available to common shareholders

the three months ended September 30, 2025

Basic loss per share:

$ ( 2,357,288 )

Effect of dilutive securities

Diluted income per share

the three months ended

the nine months ended

Diluted loss per share

$ ( 2,357,288 )

the three months ended September 30, 2024

Basic income per share:

available to common shareholders

Effect of dilutive securities

Diluted income per share

of September 30, 2025, 50,000 options were outstanding.

These options were not included in the computation of diluted earnings per share

because of the loss during the quarter ended September 30, 2025;

therefore, their effect would have been anti-dilutive.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

5 – OTHER COMPREHENSIVE INCOME AND FOREIGN CURRENCY

2 unchanged sentences

Company and Subsidiaries

NetSol Technologies, Inc.

British Pound

Pakistan Rupee

NetSol Innovation

Pakistan Rupee

Australian Dollar

NetSol Beijing

Technologies, Inc.

to Condensed Consolidated Financial Statements

and liabilities are translated at the exchange rate on the balance sheet date, and operating results are translated at the average exchange

1 unchanged sentence

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

equity section of the consolidated balance sheet were $ 46,253,619 and $ 45,935,616 as of March 31, 2025 and June 30, 2024, respectively.

During the three and nine months ended March 31, 2025, comprehensive income (loss) in the consolidated statements of comprehensive income

(loss) included a translation loss attributable to NetSol of $ 65,853 and $ 318,003 , respectively.

During the three and nine months ended

March 31, 2024, comprehensive income (loss) in the consolidated statements of comprehensive income (loss) included a translation gain

attributable to NetSol of $ 364,389 and $ 469,236 , respectively.

equity section of the consolidated balance sheet were $ 46,402,374 and $ 46,613,208 as of September 30, 2025 and June 30, 2025, respectively.

During the three months ended September 30, 2025 and 2024, comprehensive income (loss) in the consolidated statements of comprehensive

income (loss) included a translation gain attributable to NetSol of $ 210,834 and a translation loss of $ 113,407 , respectively.

6 – MAJOR CUSTOMERS

following table describes the revenues from major customers:

OF REVENUES AND RECEIVABLES FROM MAJOR CUSTOMERS

For the Three Months

For the Nine Months

Net Revenues:

Daimler Financial

BMW Financial

following table describes the receivables from major customers:

Accounts Receivable

Financial Services

BMW Financial

Revenue in Excess of Billing

Daimler Financial Services

BMW Financial

the three months ended September 30, 2025, the Company had three customers that comprised 24.7 %, 14.8 % and 10.4 % of the Company’s

net revenues, respectively.

the three months ended September 30, 2024, the Company had two customers that comprised 22 % and 16.9 % of the Company’s net revenues,

respectively.

of September 30, 2025, no customer accounted for more than 10 % of accounts receivable.

of June 30, 2025, three customers accounted for 16.8 %, 16.1 % and 10.8 % of accounts receivable, respectively.

of September 30, 2025, four customers accounted for 22.2 %, 20.7 %, 12.1 % and 11.5 % of revenues in excess of billings, respectively.

of June 30, 2025, four customers accounted for 24.2 %, 16.9 %, 15.9 % and 11.9 % of revenues in excess of billings, respectively.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

7 - OTHER CURRENT ASSETS

1 unchanged sentence

SCHEDULE OF OTHER CURRENT ASSETS

September 30, 2025

June 30, 2025

Prepaid Expenses

3 unchanged sentences

Other Receivables

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

8 – REVENUES IN EXCESS OF BILLINGS – LONG TERM

1 unchanged sentence

SCHEDULE OF REVENUE IN EXCESS OF BILLING

September 30, 2025

June 30, 2025

Revenues in excess of billings

2 unchanged sentences

after one year.

During the three and nine months ended March 31, 2025, the Company accreted $ 18,099 and $ 54,833 , respectively, which

During the three months ended September 30, 2025 and 2024, the Company accreted $ 24,814 and $ 18,367 , respectively, which

was recorded in interest income for that period.

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

and $ 30,773 , respectively, which was recorded in interest income for that period.

The Company used the discounted cash flow method with

interest rates ranging from 7.3 % to 17.5 %, for the period ended March 31, 2025 and June 30, 2024.

The Company used the discounted cash flow method with interest rates ranging from 4.2 %

to 17.5 %, for the period ended September 30, 2025 and June 30, 2025.

9 - PROPERTY AND EQUIPMENT

1 unchanged sentence

SCHEDULE OF PROPERTY AND EQUIPMENT

September 30, 2025

June 30, 2025

Office Furniture and Equipment

5 unchanged sentences

Property and Equipment,

the three and nine months ended March 31, 2025, depreciation expense totaled $ 363,503 and $ 1,102,085 , respectively.

the three months ended September 30, 2025 and 2024, depreciation expense totaled $ 324,606 and $ 365,997 , respectively.

Of these amounts,

$ 208,731 and $ 228,550 , respectively, are reflected in cost of revenues.

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

expense totaled $ 391,290 and $ 1,225,198 , respectively.

Of these amounts, $ 250,126 and $ 781,442 , respectively, are reflected in cost of

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

is a summary of fixed assets held under finance leases as of March 31, 2025 and June 30, 2024:

is a summary of fixed assets held under finance leases as of September 30, 2025 and June 30, 2025:

SCHEDULE OF FIXED ASSETS HELD UNDER CAPITAL LEASES

Depreciation - Net

September 30, 2025

June 30, 2025

Accumulated Depreciation

Fixed assets held under

3 unchanged sentences

average remaining lease term - Finance leases

average discount rate - Finance leases

Weighted average discount

rate - Finance leases

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

9 unchanged sentences

A ROU asset and a lease liability are recognized

at commencement of the lease based on the present value of the lease payments over the life of the lease.

Initial direct costs are included

as part of the ROU asset upon commencement of the lease.

Since the interest rate implicit in a lease is generally not readily determinable

for the operating leases, the Company uses an incremental borrowing rate to determine the present value of the lease payments.

The incremental

borrowing rate represents the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar lease

term to obtain an asset of similar value.

at the commencement of the lease based on the present value of the lease payments over the life of the lease.

Initial direct costs are

included as part of the ROU asset upon commencement of the lease.

Since the interest rate implicit in a lease is generally not readily

determinable for the operating leases, the Company uses an incremental borrowing rate to determine the present value of the lease payments.

The incremental borrowing rate represents the rate of interest the Company would have to pay to borrow on a collateralized basis over

a similar lease term to obtain an asset of similar value.

Company reviews the impairment of ROU assets consistent with the approach applied to the Company’s other long-lived assets.

12 unchanged sentences

value guarantees or restrictive covenants.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

balance sheet information related to leases was as follows:

1 unchanged sentence

lease assets, net

Operating, Current

Operating, Noncurrent

Total Lease Liabilities

Lease Liabilities

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

components of lease cost were as follows:

SCHEDULE OF COMPONENTS OF LEASE COST

For the Three Months

For the Nine Months

of finance lease assets

Interest on finance lease

the Three Months Ended September 30,

Amortization of finance lease assets

Interest on finance lease obligation

Operating lease cost

Short term lease cost

Sub lease income

Total lease cost

term and discount rate were as follows:

1 unchanged sentence

average remaining lease term - Operating leases

Weighted average

discount rate - Operating leases

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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 Nine Months

SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES

For the Three Months Ended

September 30,

cash flows related to operating leases

3 unchanged sentences

related finance leases

of operating lease liabilities were as follows as of March 31, 2025:

of operating lease liabilities were as follows as of September 30, 2025:

SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES

1 unchanged sentence

Within year 3

Within year 4

Total Lease Payments

7 unchanged sentences

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

For the three and nine months ended March 31, 2025, the Company

received lease income of $ 8,406 and $ 25,326 , respectively.

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

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

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

For the three months ended September 30, 2025 and 2024, the

Company received lease income of $ 8,974 and $ 8,406 , respectively.

11 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

1 unchanged sentence

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts Payable

Accrued Liabilities

Accrued Payroll

Accrued Payroll Taxes

Taxes Payable

Other Payable

Payroll Taxes

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

payable and finance leases consisted of the following:

SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES

of March 31, 2025

of September 30, 2025

Current Maturities

Long-Term Maturities

D&O Insurance

5 unchanged sentences

Loan Payable Bank - Export Refinance III

Loan Payable Bank - Export Refinance IV

Sale and Leaseback Financing

Short Term Financing

Subsidiary Finance

Subsidiary Finance Leases

of June 30, 2025

Current Maturities

Long-Term Maturities

D&O Insurance

1 unchanged sentence

Bank Overdraft Facility

Loan Payable Bank - Export Refinance

Loan Payable Bank - Running Finance

Loan Payable Bank - Export Refinance II

Loan Payable Bank - Export Refinance III

Loan Payable Bank - Export

Loan Payable Bank - Running

Loan Payable Bank - Export

Refinance III

Loan Payable Bank - Export

Sale and Leaseback Financing

Short Term Financing

Subsidiary Finance

Subsidiary Finance Leases

(1) The Company finances

1 unchanged sentence

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

The interest rate on these financings were ranging from 8.6 % to 10.9 % as of March 31, 2025 and June 30, 2024.

The interest rate on these financings were ranging from 8.4 % to 11.6 % as of September 30, 2025 and June 30, 2025.

(2) The Company has

an uncommitted discretionary demand line of credit up to an aggregate amount of $ 1,000,000 with HSBC, secured by a lien on the Company’s

The annual interest rate was 8.25 % at March 31, 2025 and 8.75 % as of June 30, 2024.

The total outstanding balance as of March

31, 2025 and June 30, 2024 was $ 405,000 and $ nil , respectively.

The annual interest rate was 7.75 % as of September 30, 2025 and June 30, 2025.

The total outstanding balance as of September

30, 2025 and June 30, 2025 was $ 505,000 and $ 405,000 , respectively.

TECHNOLOGIES, INC.

2 unchanged sentences

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

The annual interest rate was 9.5 % as of March 31, 2025 and June 30, 2024.

The total outstanding balance as of March 31, 2025

The annual interest rate was 8.5 % as of September 30, 2025 and June 30, 2025.

The total outstanding balance as of September

30, 2025 and June 30, 2025 was £ Nil .

2 unchanged sentences

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

As of March 31, 2025, NTE

was in compliance with this covenant.

As of September 30, 2025,

NTE was in compliance with this covenant.

(4) The Company’s

1 unchanged sentence

This is a revolving

loan that matures every nine months.

loan that matures every six months.

The total facility amount is Rs.

600,000,000 or $ 2,145,846 at March 31, 2025 and Rs.

600,000,000 or $ 2,124,495 at September 30, 2025 and Rs.

or $ 2,111,561 at June 30, 2025.

NetSol PK used Rs.

500,000,000 or $ 1,788,205 at March 31, 2025 and Rs.

500,000,000 or $ 1,796,558 at June

The interest rate for the loan was 10.0 % and 17.5 % at March 31, 2025 and June 30, 2024, respectively.

500,000,000 or $ 1,770,413 at September 30, 2025 and Rs.

500,000,000 or $ 1,759,634

at June 30, 2025.

The interest rate for the loan was 8.0 % at September 30, 2025 and June 30, 2025.

(5) The Company’s

2 unchanged sentences

amount is Rs.

4,050,937 or $ 14,488 , at March 31, 2025.

The balance outstanding at March 31, 2025 and June 30, 2024 was Rs.

rate for the loan was 14.1 % at March 31, 2025 and 22.2% at June 30, 2024.

4,050,937 or $ 14,344 and Rs.

4,050,937 or $ 14,256 , at September 30, 2025 and June 30, 2025, respectively.

The balance outstanding

at September 30, 2025 and June 30, 2025 was Rs.

The interest rate for the loan was 13.1 % at September 30, 2025 and 13.2 % at June

(6) The Company’s

subsidiary, NetSol PK, has an export refinance facility with Bank Al-Habib Limited, secured by NetSol PK’s assets.

This is a revolving

loan that matures every six months.

The total facility amount is Rs.

400,000,000 or $ 1,416,331 at September 30, 2025.

NetSol PK has not

used this facility at September 30, 2025.

The interest rate for the loan was 8.0 % at September 30, 2025.

This facility requires

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

As of March 31, 2025, NetSol PK was in

As of September 30, 2025, NetSol PK was in

compliance with this covenant.

2 unchanged sentences

This is a revolving

loan that matures every nine months.

loan that matures every six months.

The total facility amount is Rs.

380,000,000 or $ 1,345,514 and Rs.

380,000,000 or $ 1,365,384 at

March 31, 2025 and June 30, 2024, respectively.

The interest rate for the loan was 10.0 % and 17.5 % at March 31, 2025 and June 30, 2024,

respectively.

380,000,000 or $ 1,337,322 at September

30, 2025 and June 30, 2025, respectively.

The interest rate for the loan was 8.0 % at September 30, 2025 and June 30, 2025.

During the tenure of the

1 unchanged sentence

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

As of March 31, 2025, NetSol PK was in

compliance with these covenants.

As of September 30, 2025, NetSol PK was

in compliance with these covenants.

(8) The Company’s

4 unchanged sentences

1,300,000,000 or

at March 31, 2025 and June 30, 2024, respectively.

$ 4,575,048 , at September 30, 2025 and June 30, 2025, respectively.

NetSol PK used Rs.

1,300,000,000 or $ 4,603,073 and Rs.

700,000,000 or $ 2,515,181 ,

at March 31, 2025 and June 30, 2024, respectively.

The interest rate for the loan was 10.0 % and 17.5 % at March 31, 2025 and June 30,

2024, respectively.

1,300,000,000

or $ 4,575,048 , at September 30, 2025 and June 30, 2025, respectively.

The interest rate for the loan was 8.0 % at September 30, 2025 and

June 30, 2025.

(9) The Company’s

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

As of March 31, 2025, NetSol PK used Rs.

5,307,080 or $ 18,980 which was shown as current.

As of June 30, 2024, NetSol PK used

As of September 30, 2025, NetSol PK used Rs.

57,587,011 or $ 203,906 of which $ 134,983 was shown as long term and $ 68,923 as current.

The interest rate for the loan was from 22.7 %

to 24.2 % at March 31, 2025 and June 30, 2024.

(9) The Company’s

subsidiary, NetSol Beijing, had a one year, short-term loan facility with Bank of China, secured by a personal guarantee from NetSol

Beijing’s General Manager.

The facility amount was CNY 3,000,000 or $ 413,223 .

NetSol Beijing has paid off this facility during

the period ended March 31, 2025.

NetSol Beijing used CNY 3,000,000 or $ 412,655 , at June 30, 2024.

The interest rate of the loan was 3.8 %

at March 31, 2025 and June 30, 2024.

As of June 30, 2025, NetSol PK used Rs.

21,771,042 or $ 76,618 of which $ 46,958 was shown as long-term and $ 29,660 as current.

rate for the loan was from 12.3 % to 22.7 % at September 30, 2025 and June 30, 2025.

(10) The Company leases

5 unchanged sentences

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

March 31, 2025 and 2024.

September 30, 2025 and 2024.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

are the aggregate minimum future lease payments under finance leases as of March 31, 2025:

are the aggregate minimum future lease payments under finance leases as of September 30, 2025:

SCHEDULE OF AGGREGATE MINIMUM FUTURE LEASE PAYMENTS UNDER CAPITAL LEASES

1 unchanged sentence

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

Non-Current portion

are the aggregate future long term debt payments as of March 31, 2025 which consists of “Sale and Leaseback Financing (8)”.

following are the aggregate future long-term debt payments as of September 30, 2025 which consist of “Sale and Leaseback Financing

SCHEDULE OF AGGREGATE FUTURE LONG TERM DEBT PAYMENTS

Loan Payments

Within year 1

Within year 2

Within year 3

Total Loan Payments

2 unchanged sentences

13 - STOCKHOLDERS’ EQUITY

the three and nine months ended March 31, 2025, the Company issued nil and 29,124 shares of common stock for services rendered by the

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

These shares were valued at the fair market value

of $ nil and $ 79,500 , respectively.

The Company grants share-based compensation to its independent Board of Directors as part of their

service compensation.

These awards are typically settled in shares under the Company’s equity incentive plan.

As of March 31, 2025,

the Company did not have a sufficient number of shares available for issuance under the current equity incentive plan to settle the equity

portion of the director’s compensation for the period.

In accordance with ASC 718 – Compensation – Stock Compensation,

the Company has accounted for these awards as a liability and has recorded an accrued liability of $ 39,750 as of March 31, 2025.

Company will reclassify the liability to equity upon the issuance of shares once additional shares are made available under a new equity

incentive plan, or will settle the liability in cash if shares are not issued.

the three and nine months ended March 31, 2025, the employees of the Company exercised 20,000 and 220,000 options of common stock with

an exercise price of $ 2.15 per share for cash proceeds of $ 473,000 .

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

the three months ended September 30, 2025, the Company issued 7,581 shares of common stock, respectively, to the independent Board of

Directors as part of their board compensation.

The grant date fair value was $ 36,000 and was recorded as compensation expense in the

accompanying consolidated financial statements.

the three months ended September 30, 2025, the Company issued 5,861 shares of common stock to a consultant pursuant to the terms of his

consultancy agreement.

The grant date fair value of the shares was $ 25,000 and was recorded as compensation expense in the accompanying

consolidated financial statements.

the three months ended September 30, 2025, the Company issued 20,000 shares of common stock to employees pursuant to the terms of their

employment agreements.

The grant date fair value was $ 84,400 and was recorded as compensation expense in the accompanying consolidated

financial statements.

following table summarizes stock grants awarded as compensation:

SUMMARY OF UNVESTED STOCK GRANTS AWARDED AS COMPENSATION

Weighted Average

Grant Date Fair

Unvested, June 30, 2025

Unvested, March 31,

the three and nine months ended March 31, 2025, the Company recorded compensation expense of $ 39,750 and $ 79,500 , respectively.

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

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

Unvested, September 30, 2025

the three months ended September 30, 2025 and 2024, the Company recorded compensation expense of $ 145,400 and $ 39,750 , respectively.

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

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

14 – INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN

1 unchanged sentence

SCHEDULE OF COMMON STOCK PURCHASE OPTIONS

Weighted Average

Life (in years)

Intrinsic Value

Outstanding and exercisable, June 30, 2025

Outstanding and exercisable, March 31,

Expired / Cancelled

Outstanding and exercisable, September 30, 2025

aggregate intrinsic value at September 30, 2025 represents the difference between the Company’s closing stock price of $ 4.75 on

September 30, 2025 and the exercise price of the in-the-money stock options.

following table summarizes information about stock options outstanding and exercisable at September 30, 2025.

SUMMARY OF STOCK OPTIONS OUTSTANDING

Exercise Price

Weighted Average

Contractual Life

Weighted Average

Exercise Price

15– OPERATING SEGMENTS

1 unchanged sentence

North America, Europe, and Asia-Pacific.

Our reportable segments

The reportable segments

are business units located in different global regions.

1 unchanged sentence

license fees for leasing

and asset-based software, related maintenance fees, and implementation and IT consulting services.

and asset-based software, subscription and support fees, and implementation and IT consulting services.

Separate management of each segment

is required because each business unit is subject to different operational issues and strategies due to their particular regional location.

The Company accounts for intra-company sales and expenses as if the sales or expenses were to third parties and eliminates them in the

consolidation.

is required because each business unit is subject to different operational issues and strategies due to its particular regional location.

The Company’s chief operating decision maker (“CODM”) evaluates performance and allocates resources based on gross

profit and income from operations.

The Company has designated its Chief Executive Officer as the CODM.

assets include all assets attributable to operations within the respective geographic regions, including cash, accounts receivable, revenue

in excess of billings, and property, plant, and equipment.

Corporate assets, which primarily consist of cash and cash equivalents, goodwill,

and assets associated with the Company’s corporate headquarters, are not allocated to the geographic segments and are shown separately.

year results have been restated to conform to the current year presentation, reflecting the use of gross profit and income from operations

as the measures of segment performance evaluated by the CODM.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

following table presents a summary of identifiable assets as of March 31, 2025 and June 30, 2024:

SUMMARY OF IDENTIFIABLE ASSETS

Identifiable assets:

Corporate headquarters

following tables present financial information by reportable segment for the three months ended September 30, 2025:

SCHEDULE OF FINANCIAL INFORMATION BY REPORTABLE SEGMENT

North America

following table presents a summary of revenue streams by segment for the three months ended March 31, 2025 and 2024:

SUMMARY OF REVENUE STREAMS

Asia - Pacific

For the Three Months Ended September 30, 2025

North America

following table presents a summary of revenue streams by segment for the nine months ended March 31, 2025 and 2024:

Asia - Pacific

Subscription and support

Intersegment revenues

Total revenue from reportable segments

Elimination of intersegment revenues

( 1,061,771 )

Total consolidated revenues

Revenues from reportable segments

Salaries and consultants

Selling and marketing

General and administrative

Income (loss) from operations - reportable segments

$ ( 143,264 )

$ ( 584,471 )

$ ( 605,225 )

Reconciliation:

Income (loss) from operations - reportable segments

$ ( 605,225 )

Corporate operating expenses

( 1,233,481 )

Interest expense

Interest income

Gain (loss) on foreign currency exchange transactions

Other income (expense)

Net income (loss) before income taxes

$ ( 2,001,590 )

North America

Asia - Pacific

September 30, 2025

North America

Asia - Pacific

Segment assets:

Accounts receivable, net of allowance

Revenue in excess of billings, net of allowance

Other segment assets (b)

Total segment assets

Asset Reconciliation

Total assets for reportable segments

Corporate assets

Goodwill not allocated to segments

Consolidated total

North America

Asia - Pacific

For the Three Months ended September 30, 2025

North America

Asia - Pacific

Expenditures for property, plant and equipment

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

SUMMARY OF OPERATING INFORMATION

the Three Months

Ended March 31,

the Nine Months

Ended March 31,

Revenues from unaffiliated customers:

following tables present financial information by reportable segment for the three months ended September 30, 2024:

North America

Revenues from unaffiliated customers

Revenue from affiliated customers

Revenue from affiliated

Intercompany revenue

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

Corporate headquarters

$ ( 209,221 )

$ ( 1,003,157 )

Asia - Pacific

For the Three Months Ended September 30, 2024

North America

Asia - Pacific

Subscription and support

Intersegment revenues

Total revenue from reportable segments

Elimination of intersegment revenues

Total consolidated revenues

Revenues from reportable segments

Salaries and consultants

Selling and marketing

General and administrative

Income (loss) from operations - reportable segments

$ ( 426,693 )

Reconciliation:

Income (loss) from operations - reportable segments

Corporate operating expenses

( 1,456,535 )

Interest expense

Interest income

Gain (loss) on foreign currency exchange transactions

Other income (expense)

Net income (loss) before income taxes

North America

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

Depreciation and amortization:

Asia - Pacific

June 30, 2025

North America

Depreciation and amortization

Interest expense:

Corporate headquarters

Income tax expense:

Asia - Pacific

Segment assets:

Accounts receivable, net of allowance

Revenue in excess of billings, net of allowance

Other segment assets (b)

Total segment assets

Asset Reconciliation

Total assets for reportable segments

Corporate assets

Goodwill not allocated to segments

Consolidated total

North America

Income tax expense

Asia - Pacific

For the Three Months ended September 30, 2024

North America

Asia - Pacific

Expenditures for property, plant and equipment

(a) Other costs of

goods sold include computer costs, third-party hardware and software costs, repair and maintenance, insurance, utilities, and communication

(b) Other assets include

property and equipment, right of use of assets, advances, deposits, and prepayments.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

SUMMARY OF CAPITAL EXPENDITURES

For the Nine Months

Capital expenditures:

North America

Capital expenditures

16 – NON-CONTROLLING INTEREST IN SUBSIDIARY

3 unchanged sentences

Non-Controlling

Non-Controlling Interest at

September 30, 2025

NetSol Innovation

Non-Controlling

Non-Controlling Interest at

June 30, 2025

NetSol Innovation

the quarter ended March 31, 2025, NetSol PK, a majority owned subsidiary of the Company, repurchased 2,690,251 shares of its outstanding

common stock from the open market for $ 1,503,662 .

The repurchase did not result in a change of control and was therefore accounted for

as an equity transaction in accordance with ASC 810-10.

Due to this purchase, the non-controlling interest in NetSol PK, NetSol Innovation

and NAMECET, decreased from 32.38 % at June 30, 2024 to 30.24 % at March 31, 2025.

The carrying amount of the non-controlling interest

was reduced by $ 1,532,797 , and the difference of $ 29,135 was recognized as an increase in additional paid-in capital in the Company’s

consolidated equity.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

the nine months ended March 31, 2025, the Company acquired the remaining 177,558 minority shares from the OTOZ non-controlling shareholders

for $ 8,878 .

As a result, the Company’s ownership interest increased, reducing the non-controlling interest from 5.59 % to 0.0 %.

The effective non-controlling interest in Otoz® Thai decreased to 0.01 %.

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

Otoz® and Otoz® Thai.

the quarter ended September 30, 2025, employees of NetSol PK, a majority-owned subsidiary of the Company, exercised stock options to

purchase an aggregate of 278,455 shares of the subsidiary’s common stock for total proceeds of $ 76,567 .

Of this amount, $ 64,147

was received during the quarter ended September 30, 2025, and $ 12,420 was received during the fiscal year ended June 30, 2025.

this exercise, the non-controlling interest in NetSol PK, NetSol Innovation, NAMECET and NIAI, increased from 30.24 % at June 30, 2025

to 30.47 % at September 30, 2025.

The carrying amount of the non-controlling interest was increased by $ 115,283 , and the difference of

$ 38,716 was recognized as a decrease in additional paid-in capital in the Company’s consolidated equity.

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

SCHEDULE OF CHANGE IN OWNERSHIP INTEREST

For the Three Months

For the Nine Months

income (loss) attributable to NetSol Transfer to (from) non-controlling interest

Decrease in paid-in capital

for purchase of 177,558 shares of OTOZ Inc common stock

in paid-in capital for purchase of 2,690,251 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

For the Three Months Ended September 30,

Net income (loss) attributable to NetSol

$ ( 2,357,288 )

Transfer to (from) non-controlling interest

Decrease in paid-in capital for purchase of 157,895 shares of OTOZ Inc common stock

Decrease in paid-in capital for option exercise of 278,455 shares of common

stock of NetSol PK by emplyees

Net transfer to (from) non-controlling interest

Change from net income (loss) attributable to NetSol and

transfer (to) from non-controlling interest

$ ( 2,396,004 )

17– INCOME TAXES

6 unchanged sentences

on the portion of our profits earned within and outside the United States.

the three and nine months ended March 31, 2025, the Company recorded an income tax provision of $ 151,334 and $ 712,765 , respectively.

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

18– SUBSEQUENT EVENTS

Company’s subsidiary OTOZ Inc.

has been merged with NTA effective April 1, 2025.

The merger has no financial impact on the consolidated

financial statements.

the three months ended September 30, 2025 and 2024, the Company recorded an income tax provision of $ 215,775 and $ 229,817 , respectively.

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

What changed 10-Q

Item 1. Financial Statements