What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-02-12 compared with 2025-11-12 · 458 added, 277 removed, 818 unchanged (47% of the section changed)

9 unchanged sentences

net of allowance of $ 84,882 and $ 34,496

Other current assets

current assets

Revenues in excess of billings, net - long

Property and equipment, net

Right of use assets - operating leases

current assets

Revenues in excess of billings,

net - long term

Property and equipment,

Right of use assets - operating

LIABILITIES AND STOCKHOLDERS’

5 unchanged sentences

lease obligations

Unearned revenue

current liabilities

Loans and obligations under finance leases;

Loans and obligations under

finance leases;

less current maturities

Operating lease obligations;

lease obligations;

less current maturities

4 unchanged sentences

shares authorized;

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

12,753,209 shares issued and 11,814,178 outstanding

as of December 31, 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 September 30, 2025 and June 30, 2025)

of December 31, 2025 and June 30, 2025)

( 3,920,856 )

3 unchanged sentences

( 41,289,080 )

Other comprehensive loss

comprehensive loss

( 46,413,009 )

1 unchanged sentence

NetSol stockholders’ equity

Non-controlling interest

Non-controlling

stockholders’ equity

4 unchanged sentences

Consolidated Statements of Operations

the Three Months Ended September 30,

For the Three Months

For the Six Months

Net Revenues:

1 unchanged sentence

Total net revenues

Cost of revenues

Operating expenses:

Selling, general and administrative

1 unchanged sentence

Total operating expenses

(loss) from operations

Income (loss) from operations

( 1,247,108 )

income and (expenses)

Other income and (expenses)

Interest expense

3 unchanged sentences

Total other income (expenses)

income before income taxes

( 2,001,590 )

Net income (loss) before

tax provision

Net income (loss)

( 1,186,206 )

( 1,255,326 )

Non-controlling

income attributable to NetSol

income (loss) attributable to NetSol

$ ( 1,147,042 )

income per share:

Net income per common share

average number of shares outstanding

$ ( 2,110,531 )

$ ( 1,076,247 )

Net income (loss) per share:

Net income (loss) per common

Weighted 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)

the Three Months Ended September 30,

For the Three Months

For the Six Months

Net income (loss)

$ ( 1,147,042 )

$ ( 2,110,531 )

$ ( 1,076,247 )

Other comprehensive income

Translation adjustment

adjustment attributable to non-controlling interest

translation adjustment

attributable to non-controlling interest

Net translation adjustment

Comprehensive income (loss)

attributable to NetSol

Comprehensive

income (loss) attributable to NetSol

$ ( 1,285,785 )

$ ( 1,910,332 )

$ ( 1,328,397 )

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

2 unchanged sentences

Consolidated Statement of Stockholders’ Equity

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

Stockholders’

Balance at September 30, 2025

$ 129,636,251

$ ( 3,920,856 )

$ ( 43,646,368 )

$ ( 46,402,374 )

Exercise of subsidiary common stock options

Common stock issued for:

Foreign currency translation adjustment

Balance at December 31, 2025

$ 129,545,854

$ ( 3,920,856 )

$ ( 43,399,611 )

$ ( 46,413,009 )

statement of the changes in equity for the three months ended September 30, 2025 is provided below:

Comprehensive

Stockholders’

4 unchanged sentences

$ ( 46,613,208 )

Exercise of subsidiary common

stock options

Exercise of subsidiary common stock options

Common stock issued for:

Foreign currency translation

Foreign currency translation adjustment

( 2,357,288 )

5 unchanged sentences

$ ( 46,402,374 )

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

Comprehensive

The 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 December 31, 2024 is provided below:

Stockholders’

Balance at June 30, 2024

Balance at September 30, 2024

$ 128,709,890

2 unchanged sentences

$ ( 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

( 1,147,042 )

( 1,186,206 )

Balance at December

$ 129,194,697

$ ( 3,920,856 )

Exercise of common stock

Common stock issued for:

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

$ ( 45,288,560 )

$ ( 46,187,766 )

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

Stockholders’

Balance at June 30, 2024

$ 128,783,865

2 unchanged sentences

$ ( 45,935,616 )

Exercise of common stock options

Common stock issued for:

Common stock issued for Services

Fair value of subsidiary options issued

Acquisition of non-controlling interest in

Foreign currency translation adjustment

Net income (loss)

Balance at September

$ 128,709,890

$ ( 3,920,856 )

$ ( 44,141,518 )

$ ( 46,049,023 )

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

2 unchanged sentences

Consolidated Statements of Cash Flows

the Three Months Ended September 30,

flows from operating activities:

For the Six Months

Cash flows from operating

$ ( 1,255,326 )

$ ( 968,497 )

Adjustments to reconcile

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

net loss to net cash provided by operating activities:

Depreciation and amortization

20 unchanged sentences

of subsidiary options

Dividend paid by subsidiary

to non-controlling interest

Proceeds from bank loans

2 unchanged sentences

of exchange rate changes

(decrease) in cash and cash equivalents

and cash equivalents at beginning of the period

Net increase (decrease)

in cash and cash equivalents

Cash and cash equivalents

at beginning of the period

and cash equivalents at end of period

2 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

the Three Months Ended September 30,

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

For the Six Months

SUPPLEMENTAL DISCLOSURES:

6 unchanged sentences

products to customers in the automobile financing and leasing, banking, and financial services industries worldwide.

The Company also

provides system integration, consulting, and IT products and services in exchange for fees from customers.

Company also provides system integration, consulting, and IT products and services in exchange for fees from customers.

consolidated condensed interim financial statements included herein have been prepared by the Company, without audit, pursuant to the

59 unchanged sentences

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

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

As of December 31, 2025, and June 30, 2025, the Company had

uninsured deposits related to cash deposits in accounts maintained within foreign entities of approximately $ 17,335,174 and $ 16,386,079 ,

27 unchanged sentences

to Condensed Consolidated Financial Statements

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

Company’s financial assets that were measured at fair value on a recurring basis as of December 31, 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, 2025 to September 30, 2025 is as follows:

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

SCHEDULE OF FAIR VALUE OF FINANCIAL INSTRUMENTS RECONCILIATION

Revenues in excess of

billings - long term

value discount

Balance at June 30, 2025

3 unchanged sentences

Effect of Translation

Balance at September 30, 2025

Balance at December 31, 2025

$ ( 170,629 )

7 unchanged sentences

derivatives are valued using the Black-Scholes model.

Accounting Standards :

December 2023, the FASB issued ASU No.

Accounting Standards Not Yet Implemented :

December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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.

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, 2024.

2 unchanged sentences

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,

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.

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

Disaggregation

of Income Statement Expenses

November 2024, the FASB issued ASU No.

2024-03, 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

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.

September 2025, the FASB issued ASU No.

2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software .

This ASU eliminates references to “project stages”

and clarifies the criteria for capitalizing costs related to internal-use software.

The amendments apply to all entities subject to the

guidance in Subtopic 350-40.

The ASU is effective for fiscal years beginning after December 15, 2027, and interim periods within those

fiscal years, which corresponds to the Company’s fiscal year 2029.

Early adoption is permitted.

The Company is currently evaluating

the impact this ASU will have on its consolidated financial statements and related disclosures.

December 2025, the FASB issued ASU No.

2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements , which clarifies the

application of interim reporting guidance, including the types of interim reporting and the form and content of interim financial statements

The amendments are intended to clarify and improve the organization of existing interim reporting requirements and do

not change the fundamental principles of interim reporting.

The ASU is effective for interim reporting periods within fiscal years beginning

after December 15, 2027, which corresponds to the interim periods within the Company’s fiscal year 2029.

The Company is currently

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

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

14 unchanged sentences

taxes collected from customers and remitted to government authorities.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

Company has two primary revenue streams:

27 unchanged sentences

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.

15 unchanged sentences

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

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

19 unchanged sentences

the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

Company’s disaggregated revenue by category is as follows:

SCHEDULE OF DISAGGREGATED REVENUE BY CATEGORY

the Three Months Ended September 30,

core revenue, net

non-core revenue, net

For the Three Months

For the Six Months

Ended December 31,

Subscription and support

Total core revenue, net

Total non-core revenue, net

Total net revenue

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

9 unchanged sentences

Based on these results, the estimated SSP is set for each distinct product or service delivered to customers.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

most significant inputs involved in the Company’s revenue recognition policies are:

21 unchanged sentences

requirement changes.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

a group of agreements are entered at or near the same time and so closely related that they are, in effect, part of a single arrangement,

18 unchanged sentences

of a milestone.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

SCHEDULE OF REVENUES IN EXCESS OF BILLINGS AND DEFERRED REVENUE

in excess of billings

December 31, 2025

June 30, 2025

Revenues in excess of billings

Unearned revenue

1 unchanged sentence

SCHEDULE OF UNEARNED REVENUE RECONCILIATION

Unearned Revenue

Balance at June 30, 2025

1 unchanged sentence

( 16,384,671 )

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.

to Condensed Consolidated Financial Statements

Balance at December 31, 2025

the three and six months ended December 31, 2025, the Company recognized revenue of $ 771,000 and $ 2,340,000 , which was included in the

unearned revenue balance at the beginning of the period.

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

relation to the timing of revenue recognition.

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

1 unchanged sentence

future periods.

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 .

Contracted but unsatisfied performance obligations were approximately $ 13,240,000 as of December 31, 2025, of which the

Company estimates to recognize approximately $ 10,300,000 in revenue over the next 12 months and the remainder over an estimated 3 years

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

10 unchanged sentences

are included in accounts receivable and unearned revenue.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

Expedients and Exemptions

28 unchanged sentences

SCHEDULE OF DILUTIVE POTENTIAL COMMON SHARES

the three months ended September 30, 2025

For the three months ended

December 31, 2025

For the six months ended

December 31, 2025

Basic income (loss) per share:

Net income (loss)

$ ( 2,110,531 )

Effect of dilutive securities

Stock options

Diluted income (loss) per share

$ ( 2,110,531 )

For the three months ended

December 31, 2024

For the six months ended

December 31, 2024

Basic loss per share:

$ ( 1,147,042 )

$ ( 1,076,247 )

Effect of dilutive securities

Stock options

Diluted loss per share

$ ( 1,147,042 )

the three months ended September 30, 2024

Basic income per share:

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.

$ ( 1,076,247 )

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

of December 31, 2025, 50,000 options were outstanding.

For the six months ended December 31, 2025, the Company reported a net loss;

these options were excluded from the computation of diluted earnings per share as their effect would have been anti-dilutive.

5 – OTHER COMPREHENSIVE INCOME AND FOREIGN CURRENCY

1 unchanged sentence

SCHEDULE OF FOREIGN CURRENCY TRANSLATION

Company and Subsidiaries

Technologies, Inc.

The Company and Subsidiaries

Functional Currency

NetSol Technologies, Inc.

British Pound

Pakistan Rupee

NetSol Innovation

Pakistan Rupee

Australian Dollar

NetSol Beijing

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 $ 46,402,374 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.

equity section of the consolidated balance sheet were $ 46,413,009 and $ 46,613,208 as of December 31, 2025 and June 30, 2025, respectively.

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

income (loss) included a translation loss attributable to NetSol of $ 10,635 and a translation gain of $ 200,199 , respectively.

the three and six months ended December 31, 2024, comprehensive income (loss) in the consolidated statements of comprehensive income

(loss) included a translation loss attributable to NetSol of $ 138,743 and $ 252,150 , respectively.

6 – MAJOR CUSTOMERS

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.

Concentration

the three months ended December 31, 2025, three customers accounted for 24.3 %, 18.9 %, and 11.4 % of net revenues.

For the six months ended

December 31, 2025, three customers accounted for 21.5 %, 20.1 %, and 11.0 % of net revenues.

the three months ended December 31, 2024, two customers accounted for 20.1 % and 19.6 % of net revenues.

For the six months ended December

31, 2024, two customers accounted for 20.8 % and 18.5 % of net revenues.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

Receivable Concentration

of December 31, 2025, four customers accounted for 14.8 %, 13.5 %, 10.1 %, and 10.0 % of accounts receivable.

As of June 30, 2025, three

customers accounted for 16.8 %, 16.1 %, and 10.8 % of accounts receivable.

in Excess of Billings Concentration

of December 31, 2025, four customers accounted for 21.4 %, 19.7 %, 10.8 %, and 10.0 % of revenues in excess of billings.

As of June 30, 2025,

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

7 - OTHER CURRENT ASSETS

1 unchanged sentence

SCHEDULE OF OTHER CURRENT ASSETS

September 30, 2025

December 31, 2025

June 30, 2025

7 unchanged sentences

SCHEDULE OF REVENUE IN EXCESS OF BILLING

September 30, 2025

December 31, 2025

June 30, 2025

Revenues in excess of billings

Revenues in excess of billings - long term

Present value discount

1 unchanged sentence

after one year.

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

During the three and six months ended December 31, 2025, the Company accreted $ 12,504 and $ 37,318 , respectively, which

was recorded in interest income for that period.

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.

During the three and six months ended December 31, 2024, the Company accreted $ 18,367

and $ 36,734 , respectively, which was recorded in interest income for that period.

The Company used the discounted cash flow method with

interest rates ranging from 4.2 % to 17.5 %, for the period ended December 31, 2025 and June 30, 2025.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

9 - PROPERTY AND EQUIPMENT

1 unchanged sentence

SCHEDULE OF PROPERTY AND EQUIPMENT

September 30, 2025

December 31, 2025

June 30, 2025

5 unchanged sentences

( 13,269,682 )

Property and Equipment,

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

Property and Equipment, Net

the three and six months ended December 31, 2025, depreciation expense totaled $ 299,746 and $ 624,352 , respectively.

Of these amounts,

$ 190,066 and $ 398,797 , respectively, are reflected in cost of revenues.

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

For the three and six months ended December 31, 2024,

depreciation expense totaled $ 372,585 and $ 738,582 , respectively.

Of these amounts, $ 237,882 and $ 466,432 , respectively, are reflected

in cost of revenues.

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

SCHEDULE OF FIXED ASSETS HELD UNDER CAPITAL LEASES

September 30, 2025

December 31, 2025

June 30, 2025

Accumulated Depreciation

Accumulated Depreciation - Net

Fixed assets held under

2 unchanged sentences

SCHEDULE OF FINANCE LEASE TERM

average remaining lease term - Finance leases

Weighted average discount

rate - Finance leases

December 31, 2025

June 30, 2025

Weighted average remaining lease term - Finance leases

Weighted average discount rate - Finance leases

TECHNOLOGIES, INC.

34 unchanged sentences

SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO LEASE

lease assets, net

December 31, 2025

June 30, 2025

Operating lease assets, net

Operating, Noncurrent

Lease Liabilities

Total Lease Liabilities

TECHNOLOGIES, INC.

2 unchanged sentences

SCHEDULE OF COMPONENTS OF LEASE COST

the Three Months Ended September 30,

For the Three Months

For the Six Months

Ended December 31,

Amortization of finance lease assets

6 unchanged sentences

SCHEDULE OF LEASE TERM AND DISCOUNT RATE

average remaining lease term - Operating leases

Weighted average discount

rate - Operating leases

December 31, 2025

June 30, 2025

Weighted average remaining lease term - Operating leases

Weighted average discount rate - Operating leases

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

SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES

For the Three Months Ended

September 30,

cash flows related to operating leases

Operating cash flows

related to finance leases

Financing cash flows

related finance leases

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

For the Six Months

Ended December 31,

Operating cash flows related to operating leases

Operating cash flows related to finance leases

Financing cash flows related finance leases

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES

1 unchanged sentence

Within year 2

Within year 3

Within year 4

Total Lease Payments

3 unchanged sentences

Non-Current portion

Company is a lessor for certain office space leased by the Company and sub-leased to others under non-cancelable leases.

Company is a lessor for certain office space leased by the Company and sub-leased to others under non-cancellable leases.

agreements provide for a fixed base rent and are currently on a month-by-month basis.

1 unchanged sentence

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

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

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

For the three and six months ended December 31, 2025, the Company

received lease income of $ 8,854 and $ 17,828 , respectively.

For the three and six months ended December 31, 2024, the Company received

lease income of $ 8,514 and $ 16,920 , respectively.

11 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

1 unchanged sentence

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Payroll Taxes

December 31, 2025

June 30, 2025

Accounts Payable

Accrued Liabilities

Accrued Payroll

Accrued Payroll Taxes

Taxes Payable

Other Payable

TECHNOLOGIES, INC.

2 unchanged sentences

SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES

of September 30, 2025

Current Maturities

Long-Term Maturities

As of December 31, 2025

D&O Insurance

9 unchanged sentences

Subsidiary Finance Leases

of June 30, 2025

Current Maturities

Long-Term Maturities

As of June 30, 2025

D&O Insurance

1 unchanged sentence

Bank Overdraft Facility

Loan Payable Bank - Export

Loan Payable Bank - Running

Loan Payable Bank - Export

Refinance III

Loan Payable Bank - Export

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 Refinance IV

Sale and Leaseback Financing

4 unchanged sentences

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

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

The interest rate on these financings were ranging from 7.8 % to 11.6 % as of December 31, 2025 and 8.4 % to 11.6 % as of 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 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.

The annual interest rate was 7.0 % as of December 31, 2025 and 7.75 % as of June 30, 2025.

The total outstanding balance as of

December 31, 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 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 .

The annual interest rate was 8.0 % as of December 31, 2025 and 8.5 % as of June 30, 2025.

The total outstanding balance as of

December 31, 2025 and June 30, 2025 was £ Nil .

This overdraft facility

1 unchanged sentence

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

As of September 30, 2025,

As of December 31, 2025,

NTE was in compliance with this covenant.

4 unchanged sentences

The total facility amount is Rs.

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

600,000,000 or $ 2,140,029 at December 31, 2025 and Rs.

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

NetSol PK used Rs.

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.

500,000,000 or $ 1,783,358 at December 31, 2025 and Rs.

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

June 30, 2025.

The interest rate for the loan was 7.5 % at December 31, 2025 and 8.0 % at June 30, 2025.

(5) The Company’s

3 unchanged sentences

4,050,937 or $ 14,449 and Rs.

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

4,050,937 or $ 14,256 , at December 31, 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

at December 31, 2025 and June 30, 2025 was Rs.

The interest rate for the loan was 12.6 % at December 31, 2025 and 13.2 % at June 30,

(6) The Company’s

3 unchanged sentences

The total facility amount is Rs.

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

400,000,000 or $ 1,426,687 at December 31, 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.

used this facility at December 31, 2025.

The interest rate for the loan was 7.5 % at December 31, 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 September 30, 2025, NetSol PK was in

As of December 31, 2025, NetSol PK was in

compliance with this covenant.

5 unchanged sentences

380,000,000 or $ 1,355,352 and Rs.

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

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

31, 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

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

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

As of September 30, 2025, NetSol PK was

in compliance with these covenants.

The interest rate for the loan was 7.5 % at December 31, 2025 and 8.0 % at June 30, 2025.

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

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

As of December 31,

2025, NetSol PK was in compliance with these covenants.

(8) The Company’s

4 unchanged sentences

1,300,000,000 or

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

$ 4,575,048 , at December 31, 2025 and June 30, 2025, respectively.

NetSol PK used Rs.

1 unchanged sentence

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.

or $ 4,575,048 , at December 31, 2025 and June 30, 2025, respectively.

The interest rate for the loan was 7.5 % at December 31, 2025 and

8.0 % at 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 September 30, 2025, NetSol PK used Rs.

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

108,456,123 or $ 386,832 of which $ 257,376 was shown as long term and $ 129,456 as current.

1 unchanged sentence

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

various fixed assets under finance lease arrangements expiring in various years through 2028.

The assets and liabilities under finance

leases are recorded at the lower of the present value of the minimum lease payments or the fair value of the asset.

The assets are secured

by the assets themselves.

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

September 30, 2025 and 2024.

rate for the loan was from 12.3 % to 22.7 % at December 31, 2025 and June 30, 2025.

Company leases various fixed assets under finance lease arrangements expiring in various years through 2028.

The assets and

liabilities under finance leases are recorded at the lower of the present value of the minimum lease payments or the fair value of

The assets are secured by the assets themselves.

Depreciation of assets under finance leases is included in depreciation

expense for the three and six months ended December 31, 2025 and 2024.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

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

SCHEDULE OF AGGREGATE MINIMUM FUTURE LEASE PAYMENTS UNDER CAPITAL LEASES

8 unchanged sentences

Non-Current portion

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

following are the aggregate future long-term debt payments as of December 31, 2025, which consist of “Sale and Leaseback

Financing (9)”.

SCHEDULE OF AGGREGATE FUTURE LONG TERM DEBT PAYMENTS

7 unchanged sentences

13 - STOCKHOLDERS’ EQUITY

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

the three and six months ended December 31, 2025, the Company issued 11,883 and 19,464 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 $ 72,000 , respectively, and was recorded

as compensation expense in the accompanying consolidated financial statements.

the three and six months ended December 31, 2025, the Company issued 7,419 and 13,280 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 $ 50,000 , respectively, and was recorded

as compensation expense in the accompanying consolidated financial statements.

the six months ended December 31, 2025, the Company issued 20,000 shares of common stock to employees pursuant to the terms of their

employment agreements.

1 unchanged sentence

financial statements.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

following table summarizes stock grants awarded as compensation:

SUMMARY OF UNVESTED STOCK GRANTS AWARDED AS COMPENSATION

Weighted Average

Grant Date Fair

# Number of shares

Weighted Average Grant Date Fair Value ($)

Unvested, June 30, 2025

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

Unvested, December 31, 2025

the three and six months ended December 31, 2025, the Company recorded compensation expense of $ 61,000 and $ 206,400 , respectively.

the three and six months ended December 31, 2024, the Company recorded compensation expense of $ 39,750 and $ 79,500 , respectively.

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

14 – INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN

1 unchanged sentence

SCHEDULE OF COMMON STOCK PURCHASE OPTIONS

Weighted Average

Life (in years)

Intrinsic Value

Weighted Average Exercise Price

Weighted Average Remaining Contractual Life (in years)

Aggregated Intrinsic Value

Outstanding and exercisable, June 30, 2025

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.

Outstanding and exercisable, December 31, 2025

aggregate intrinsic value at December 31, 2025 represents the difference between the Company’s closing stock price of $ 3.03 on

December 31, 2025 and the exercise price of the in-the-money stock options.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

following table summarizes information about stock options outstanding and exercisable at December 31, 2025.

SUMMARY OF STOCK OPTIONS OUTSTANDING

Exercise Price

Weighted Average

Contractual Life

Weighted Average

Exercise Price

Number Outstanding and Exercisable

Weighted Average Remaining Contractual Life

Weighted Average Exercise Price

15– OPERATING SEGMENTS

19 unchanged sentences

to Condensed Consolidated Financial Statements

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

The following tables present financial information

by reportable segment for the three months ended December 31, 2025:

SCHEDULE OF FINANCIAL INFORMATION BY REPORTABLE SEGMENT

North America

Asia - Pacific

For the Three Months Ended September 30, 2025

For the Three Months Ended

December 31, 2025

North America

11 unchanged sentences

Income (loss) from operations - reportable segments

Reconciliation:

Income (loss) from operations - reportable segments

Corporate operating expenses

( 1,269,902 )

Interest expense

Interest income

Gain (loss) on foreign currency exchange transactions

Other income (expense)

Net income (loss) before income taxes

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

following tables present financial information by reportable segment for the six months ended December 31, 2025:

For the Six Months Ended

December 31, 2025

North America

Asia - Pacific

Subscription and support

Intersegment revenues

Total revenue from reportable segments

Elimination of intersegment revenues

( 2,304,832 )

Total consolidated revenues

Revenues from reportable segments

Salaries and consultants

Selling and marketing

General and administrative

Income (loss) from operations - reportable segments

$ ( 190,654 )

1 unchanged sentence

Income (loss) from operations - reportable segments

$ ( 605,225 )

Corporate operating expenses

6 unchanged sentences

$ ( 559,357 )

North America

Asia - Pacific

September 30, 2025

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

December 31, 2025

North America

10 unchanged sentences

Consolidated total

North America

Asia - Pacific

For the Three Months ended September 30, 2025

For the Six Months ended December 31, 2025

North America

3 unchanged sentences

to Condensed Consolidated Financial Statements

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

North America

Asia - Pacific

For the Three Months Ended September 30, 2024

following tables present financial information by reportable segment for the three months ended December 31, 2024:

For the Three Months Ended

December 31, 2024

North America

4 unchanged sentences

Elimination of intersegment revenues

( 2,326,738 )

Total consolidated revenues

14 unchanged sentences

Net income (loss) before income taxes

$ ( 854,592 )

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

following tables present financial information by reportable segment for the six months ended December 31, 2024:

For the Six Months Ended

December 31, 2024

North America

Asia - Pacific

Subscription and support

Intersegment revenues

Total revenue from reportable segments

Elimination of intersegment revenues

( 2,948,130 )

Total consolidated revenues

Revenues from reportable segments

Salaries and consultants

Selling and marketing

General and administrative

Income (loss) from operations - reportable segments

$ ( 744,979 )

Reconciliation:

Income (loss) from operations - reportable segments

Corporate operating expenses

( 2,822,183 )

Interest expense

Interest income

Gain (loss) on foreign currency exchange transactions

Other income (expense)

Net income (loss) before income taxes

$ ( 407,066 )

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

June 30, 2025

11 unchanged sentences

Consolidated total

North America

Asia - Pacific

For the Three Months ended September 30, 2024

For the Six Months ended December 31, 2024

North America

11 unchanged sentences

SCHEDULE OF BALANCE OF NON-CONTROLLING INTEREST

Non-Controlling

Non-Controlling Interest %

Non-Controlling Interest at

September 30, 2025

December 31, 2025

NetSol Innovation

Non-Controlling

Non-Controlling Interest %

Non-Controlling Interest at

1 unchanged sentence

NetSol Innovation

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

the six months ended December 31, 2025, employees of NetSol PK, a majority-owned subsidiary of the Company, exercised stock options to

purchase an aggregate of 1,346,330 shares of the subsidiary’s common stock for total proceeds of $ 370,553 .

Of this amount, $ 358,133

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.

was received during the six months ended December 31, 2025, and $ 12,420 was received during the fiscal year ended June 30, 2025.

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

to 31.33 % at December 31, 2025.

The carrying amount of the non-controlling interest was increased by $ 560,473 , and the difference of

$ 189,920 was recognized as a decrease in additional paid-in capital in the Company’s consolidated equity.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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 Ended September 30,

Net income (loss) attributable to NetSol

the Three Months

income (loss) attributable to NetSol

$ ( 1,147,042 )

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

$ ( 2,110,531 )

$ ( 1,076,247 )

to (from) non-controlling interest

in paid-in capital for purchase of 177,558 shares of OTOZ Inc common stock

in paid-in capital for option exercise of 1,346,330 shares of common stock of NetSol PK by employees

Net transfer to (from) non-controlling

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

$ ( 1,116,038 )

$ ( 2,300,451 )

$ ( 1,188,257 )

17– INCOME TAXES

6 unchanged sentences

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

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

the three and six months ended December 31, 2025, the Company recorded an income tax provision of $ 480,194 and $ 695,969 , respectively.

During the three and six months ended December 31, 2024, the Company recorded an income tax provision of $ 331,614 and $ 561,431 , 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