What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-05-14 compared with 2026-02-12 · 667 added, 609 removed, 667 unchanged (66% of the section changed)

2 unchanged sentences

AND SUBSIDIARIES

Consolidated Balance Sheets

Current assets:

Cash and cash

Accounts receivable, net

of allowance of $ 401,507 and $ 355,464

Revenues in excess of billings,

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

current assets

Condensed Consolidated Balance Sheets

March 31, 2026

June 30, 2025

Current assets:

Revenues in excess of billings,

net - long term

Property and equipment,

Right of use assets - operating

LIABILITIES AND STOCKHOLDERS’

Current liabilities:

Accounts payable and accrued

Current portion of loans

and obligations under finance leases

Current portion of operating

lease obligations

Cash and cash equivalents

Accounts receivable, net of allowance of $ 92,025 and $ 355,464

Revenues in excess of billings, net of allowance of $ 256,812 and $ 34,496

Other current assets

Total current assets

Revenues in excess of billings, net - long term

Property and equipment, net

Right of use assets - operating leases

Other intangible assets, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Loans and obligations under

finance leases;

Accounts payable and accrued expenses

Current portion of loans and obligations under finance leases

Current portion of operating lease obligations

Unearned revenue

Total current liabilities

Loans and obligations under finance leases;

less current maturities

lease obligations;

Operating lease obligations;

less current maturities

Total liabilities

Stockholders’ equity:

3 unchanged sentences

18,000,000 shares authorized;

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

12,785,940 shares

issued and 11,846,909 outstanding as of March 31, 2026, 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 December 31, 2025 and June 30, 2025)

( 3,920,856 )

Treasury stock (at cost, 939,031 shares as of March 31, 2026 and June 30,

Accumulated deficit

1 unchanged sentence

( 41,289,080 )

comprehensive loss

Other comprehensive loss

( 46,563,902 )

( 46,613,208 )

NetSol stockholders’ equity

Non-controlling

stockholders’ equity

liabilities and stockholders’ equity

Total NetSol stockholders’ equity

Non-controlling interest

Total stockholders’ equity

Total liabilities and stockholders’ equity

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

1 unchanged sentence

AND SUBSIDIARIES

Consolidated Statements of Operations

For the Three Months

For the Six Months

Condensed Consolidated Statements of Operations

For the Three

Net Revenues:

4 unchanged sentences

Selling, general and administrative

and development cost

Research and development cost

Total operating expenses

Income (loss) from operations

( 1,247,108 )

Income from operations

Other income and (expenses)

1 unchanged sentence

Interest income

Gain (loss) on foreign

currency exchange transactions

Gain (loss) on foreign currency exchange transactions

Total other income (expenses)

Net income (loss) before

tax provision

Net income (loss)

( 1,186,206 )

Net income before income taxes

Income tax provision

( 1,477,212 )

Non-controlling

income (loss) attributable to NetSol

Net income (loss)

Non-controlling interest

( 1,013,664 )

( 1,868,869 )

Net income (loss) attributable to NetSol

$ ( 809,567 )

Net income (loss) per share:

Net income (loss) per common

Net income (loss) per common share

Weighted average number of shares outstanding

2 unchanged sentences

AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss)

Condensed Consolidated Statements of Comprehensive Income (Loss)

For the Three Months

For the Six Months

Ended March 31,

For the Nine Months

Ended March 31,

Net income (loss)

$ ( 809,567 )

$ ( 2,110,531 )

$ ( 1,076,247 )

Other comprehensive income

Translation adjustment

adjustment attributable to non-controlling interest

Other comprehensive income (loss):

Translation adjustment

Comprehensive

income (loss) attributable to NetSol

$ ( 1,285,785 )

$ ( 1,910,332 )

Translation adjustment attributable to non-controlling interest

Net translation adjustment

Comprehensive income (loss) attributable to NetSol

$ ( 760,261 )

2 unchanged sentences

AND SUBSIDIARIES

Consolidated Statement of Stockholders’ Equity

Condensed Consolidated Statement of Stockholders’ Equity

statement of the changes in equity for the three months ended March 31, 2026, is provided below:

Stockholders’

Balance at December 31, 2025

$ 129,545,854

$ ( 3,920,856 )

$ ( 43,399,611 )

$ ( 46,413,009 )

Exercise of subsidiary common stock options

Common stock issued for:

Foreign currency translation adjustment

Balance at March 31, 2026

$ 129,631,529

$ ( 3,920,856 )

$ ( 42,098,647 )

$ ( 46,563,902 )

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

30 unchanged sentences

$ ( 46,402,374 )

The accompanying notes are an integral part of these unaudited condensed

consolidated financial statements.

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

TECHNOLOGIES, INC.

AND SUBSIDIARIES

Consolidated Statement of Stockholders’ Equity

Condensed Consolidated Statement of Stockholders’ Equity

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

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, 2025

$ 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:

8 unchanged sentences

Fair value of subsidiary options issued

Acquisition of non-controlling interest in

Acquisition of non-controlling

interest in subsidiary

Dividend to non-controlling interest

7 unchanged sentences

$ ( 46,187,766 )

TECHNOLOGIES, INC.

AND SUBSIDIARIES

Condensed Consolidated Statement of Stockholders’ Equity

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

5 unchanged sentences

$ ( 45,935,616 )

$ 128,783,865

$ ( 3,920,856 )

$ ( 44,212,313 )

$ ( 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

of subsidiary options issued

Acquisition of non-controlling interest in subsidiary

Foreign currency translation adjustment

5 unchanged sentences

$ ( 46,049,023 )

$ 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.

1 unchanged sentence

AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the Six Months

Cash flows from operating

$ ( 1,255,326 )

$ ( 968,497 )

Adjustments to reconcile

net loss to net cash provided by operating activities:

Condensed Consolidated Statements of Cash Flows

For the Nine Months Ended

Cash flows from operating activities:

Adjustments to reconcile net income to net cash provided by (used in) operating

Depreciation and amortization

2 unchanged sentences

Stock based compensation

in operating assets and liabilities:

Changes in operating assets and liabilities:

Accounts receivable

( 9,180,034 )

Revenues in excess of billing

( 1,611,662 )

( 1,411,983 )

Other current assets

Accounts payable and accrued

Accounts payable and accrued expenses

( 1,136,533 )

cash provided by operating activities

flows from investing activities:

Purchases of property and

Unearned revenue

( 6,646,170 )

Net cash provided by (used in) operating activities

Cash flows from investing activities:

Purchases of property and equipment

( 1,379,262 )

Sales of property and equipment

Investment in associates

Purchase of subsidiary

cash used in investing activities

flows from financing activities:

Proceeds from the exercise

of stock options and warrants

Proceeds from exercise

of subsidiary options

Dividend paid by subsidiary

to non-controlling interest

Purchase of subsidiary shares

Increase in intangible assets

( 1,039,989 )

Net cash used in investing activities

( 2,308,004 )

Cash flows from financing activities:

Proceeds from the exercise of stock options and warrants

Proceeds from exercise of subsidiary options

Dividend paid by subsidiary to non-controlling interest

Purchase of subsidiary treasury stock

( 1,503,662 )

Proceeds from bank loans

on finance lease obligations and loans - net

cash provided by financing activities

of exchange rate changes

Net increase (decrease)

in cash and cash equivalents

Cash and cash equivalents

at beginning of the period

and cash equivalents at end of period

Payments on finance lease obligations and loans - net

( 1,093,671 )

Net cash provided by financing activities

Effect of exchange rate changes

Net increase (decrease) in cash and cash equivalents

( 2,613,552 )

Cash and cash equivalents at beginning of the period

Cash and cash equivalents at end of period

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

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

For the Six Months

For the Nine Months

Ended March 31,

SUPPLEMENTAL DISCLOSURES:

Cash paid during the period

Cash paid during the period for:

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

2 unchanged sentences

1 - BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

Company is a business services and asset finance solutions provider that designs, develops, markets, and exports proprietary software

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

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

Company develops, licenses and supports enterprise software solutions for asset finance, leasing and digital retail, and provides related

The Company’s customers include automotive and equipment OEMs, captive finance companies, dealerships and financial institutions

The Company also provides consulting, implementation and integration services.

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

44 unchanged sentences

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.

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

lives of software development and internal-use software costs.

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

Actual results could differ from those estimates.

9 unchanged sentences

maintained in China are insured for RMB 500,000 ($ 72,464 ) in each bank and in the UK for GBP 85,000 ($ 111,842 ) in each bank.

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

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 ,

respectively.

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

As of March 31, 2026, and June 30, 2025, the Company had uninsured

deposits related to cash deposits in accounts maintained within foreign entities of approximately $ 14,165,752 and $ 16,386,079 , respectively.

The Company has not experienced any losses in such accounts.

9 unchanged sentences

taxation, among other things.

Company capitalizes certain costs incurred in connection with the development and implementation of internal-use software in accordance

with ASC 350-40, Internal-Use Software .

Capitalized costs include external direct costs of materials and services, payroll and

payroll-related costs for employees directly associated with the development of the software, and interest costs incurred during the

application development stage, if applicable.

incurred during the preliminary project stage and post-implementation/operation stage, including training and maintenance, are expensed

Capitalization begins when the preliminary project stage is complete, management authorizes and commits to funding the project,

and it is probable that the project will be completed and the software will be used as intended.

internal-use software costs are included within other intangible assets and are amortized on a straight-line basis over the estimated

useful life of the software.

Amortization commences when the software is placed into service.

Company evaluates capitalized internal-use software for impairment whenever events or changes in circumstances indicate that the carrying

amount may not be recoverable.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

Value of Financial Instruments

12 unchanged sentences

and are less observable and thus have the lowest priority.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

Company’s financial assets that were measured at fair value on a recurring basis as of March 31, 2026, were as follows:

SCHEDULE OF FAIR VALUE OF FINANCIAL ASSETS MEASURED ON RECURRING BASIS

excess of billings - long term

Revenues in excess of billings - long term

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

excess of billings - long term

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

Revenues in excess of billings - long term

reconciliation from June 30, 2025 to March 31, 2026 is as follows:

SCHEDULE OF FAIR VALUE OF FINANCIAL INSTRUMENTS RECONCILIATION

billings - long term

Balance at June 30, 2025

2 unchanged sentences

Transfers to short term

Effect of Translation

Balance at December 31, 2025

Effect of Translation Adjustment

Balance at March 31, 2026

$ ( 420,429 )

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

18 unchanged sentences

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

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

Disaggregation

40 unchanged sentences

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

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

3 – REVENUE RECOGNITION

13 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.

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

The Company’s typical payment

terms tend to vary by region, but its standard payment terms are within 30 days of invoice.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

from software licenses is recognized when control of the software license transfers to the customer, which is generally upon delivery

of the software and when the customer has the ability to use and benefit from the software.

Software licenses are generally provided

as perpetual licenses deployed in customer-hosted or on-premise environments.

The Company’s typical payment terms tend to vary

by region, but its standard payment terms are within 30 days of invoice.

revenue is recognized ratably over the initial subscription period committed to by the customer commencing when the product is made available

12 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:

1 unchanged sentence

For the Three Months

For the Six Months

Ended December 31,

Ended March 31,

For the Nine Months

Ended March 31,

Subscription and support

13 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.

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,

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

such agreements are deemed to be combined as one arrangement for revenue recognition purposes.

1 unchanged sentence

to evaluate the relevant facts and circumstances in determining whether agreements should be accounted for separately or as a single

The Company’s judgments about whether a group of contracts comprise a single arrangement can affect the allocation

of consideration to the distinct performance obligations, which could have an effect on results of operations for the periods involved.

The Company’s judgments about whether a group of contracts comprises a single arrangement can affect the allocation

of consideration to the distinct performance obligations, which could have an effect on the results of operations for the periods involved.

a contract includes variable consideration, the Company exercises judgment in estimating the amount of consideration to which the entity

12 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

December 31, 2025

June 30, 2025

Revenues in excess of billings

Unearned revenue

Company’s unearned revenue reconciliation is as follows:

SCHEDULE OF REVENUES IN EXCESS OF BILLINGS AND UNEARNED REVENUE

in excess of billings

The Company’s unearned revenue

reconciliation is as follows:

SCHEDULE OF UNEARNED REVENUE RECONCILIATION

3 unchanged sentences

( 22,858,713 )

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

unsatisfied, or partially unsatisfied, which includes unearned revenue and amounts that will be invoiced and recognized as revenue in

future periods.

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.

some factors that affect the Company’s revenue, such as the availability and demand for modules within customer geographic locations,

is not entirely within the Company’s control.

In instances where the timing of revenue recognition differs from the timing of invoicing,

the Company has determined that its contracts generally do not include a significant financing component.

The primary purpose of invoicing

terms is to provide customers with simplified and predictable ways of purchasing the Company’s products and services, and not to

facilitate financing arrangements.

Company typically invoices its customers for subscription and support fees in advance on a quarterly or annual basis, with payment due

at the start of the subscription or support term.

Unpaid invoice amounts for non-cancelable license and services starting in future periods

are included in accounts receivable and unearned revenue.

Balance at March 31, 2026

During the three and nine months ended

March 31, 2026, the Company recognized revenue of $ 362,000 and $ 2,697,000 , 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

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

Expedients and Exemptions

are several practical expedients and exemptions allowed under Topic 606 that impact timing of revenue recognition and the Company’s

The Company has applied the following practical expedients:

Revenue allocated to the remaining performance

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

which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods.

Contracted but unsatisfied

performance obligations were approximately $ 19,381,000 as of March 31, 2026, of which the Company estimates to recognize approximately

$ 17,876,000 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.

Accordingly, some factors that affect the Company’s

revenue, such as the availability and demand for modules within customer geographic locations, is not entirely within the Company’s

In certain arrangements, the timing of revenue recognition differs from the timing of invoicing and cash collections, which

may result in Revenue in Excess of Billings or Unearned Revenue balances.

The Company evaluates its contracts to determine whether a

significant financing component exists.

In arrangements where payment terms are extended beyond one year and are determined to provide

financing to the customer, the transaction price is adjusted to reflect the time value of money.

The related financing component is recognized

as interest income over the payment term using the effective interest method.

For other arrangements, the primary purpose of the Company’s

billing terms is to align invoicing with contractual milestones, customer acceptance provisions, or implementation schedules, and not

to provide financing to customers or the Company.

Unearned Revenue

The Company typically invoices its customers

for subscription and support fees in advance on a quarterly or annual basis, with payment due at the start of the subscription or support

Unpaid invoice amounts for non-cancelable licenses and services starting in future periods are included in accounts receivable

and unearned revenue.

Practical Expedients and Exemptions

There are several practical expedients

and exemptions allowed under Topic 606 that impact the timing of revenue recognition and the Company’s disclosures.

has applied the following practical expedients:

Company does not evaluate a contract for a significant financing component if payment is

1 unchanged sentence

Company generally expenses sales commissions and sales agent fees when incurred when the

amortization period would have been one year or less or the commissions are based on cashed

amortization period would have been one year or less or the commissions are based on cash

These costs are recorded within sales and marketing expense in the Consolidated

3 unchanged sentences

for services performed (applies to time-and-material engagements).

to Obtain a Contract

Company does not have a material amount of costs to obtain a contract capitalized at any balance sheet date.

In general, the Company

incurs few direct incremental costs of obtaining new customer contracts.

The Company rarely incurs incremental costs to review or otherwise

enter into contractual arrangements with customers.

In addition, the Company’s sales personnel receive fees that are referred to

as commissions, but that are based on more than simply signing up new customers.

The Company’s sales personnel are required to

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

4 – EARNINGS PER SHARE

earnings per share are computed based on the weighted average number of shares of common stock outstanding during the period.

earnings per share is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common

shares outstanding during the period using the treasury stock method.

Dilutive potential common shares include outstanding stock options

and stock awards.

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

Costs to Obtain a Contract

The Company does not have a material

amount of costs to obtain a contract capitalized at any balance sheet date.

In general, the Company incurs few direct incremental costs

of obtaining new customer contracts.

The Company rarely incurs incremental costs to review or otherwise enter into contractual arrangements

with customers.

In addition, the Company’s sales personnel receive fees that are referred to as commissions, but that are based

on more than simply signing up new customers.

The Company’s sales personnel are required to perform additional duties beyond new

customer contract inception dates, including fulfillment duties and collections efforts.

NOTE 4 – EARNINGS PER SHARE

Basic earnings per share are computed

based on the weighted average number of shares of common stock outstanding during the period.

Diluted earnings per share is computed

based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during

the period using the treasury stock method.

Dilutive potential common shares include outstanding stock options and stock awards.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

The components of basic and diluted earnings

per share were as follows:

SCHEDULE OF DILUTIVE POTENTIAL COMMON SHARES

For the three months ended

December 31, 2025

For the six months ended

December 31, 2025

March 31, 2026

For the nine months ended

March 31, 2026

Basic income (loss) per share:

6 unchanged sentences

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 )

March 31, 2025

For the nine months ended

March 31, 2025

Basic income per share:

Effect of dilutive securities

Stock options

Diluted loss per share

$ ( 1,147,042 )

$ ( 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

following table represents the functional currencies of the Company and its subsidiaries:

Diluted income per share

As of March 31, 2026, 50,000 options

were outstanding.

For the nine months ended March 31, 2026, the Company reported a net loss;

accordingly, these options were excluded

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

NOTE 5 – OTHER COMPREHENSIVE INCOME AND FOREIGN

The following table represents the functional

currencies of the Company and its subsidiaries:

SCHEDULE OF FOREIGN CURRENCY TRANSLATION

13 unchanged sentences

NetSol Beijing

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

rate throughout the period.

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

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

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

current assets consisted of the following:

Assets and liabilities are translated

at the exchange rate on the balance sheet date, and operating results are translated at the average exchange rate throughout the period.

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

of the consolidated balance sheet were $ 46,563,902 and $ 46,613,208 as of March 31, 2026 and June 30, 2025, respectively.

During the three

and nine months ended March 31, 2026, comprehensive income (loss) in the consolidated statements of comprehensive income (loss) included

a translation loss attributable to NetSol of $ 150,893 and a translation gain of $ 49,306 , 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.

NOTE 6 – MAJOR CUSTOMERS

Revenue Concentration

For the three months ended March 31,

2026, one customer accounted for 40.3 % of net revenues.

For the nine months ended March 31, 2026, two customers accounted for 28.5 % and

14.6 % of net revenues.

For the three months ended March 31,

2025, three customers accounted for 18.9 % , 18.1 % and 16.5 % of net revenues.

For the nine months ended March 31, 2025, two customers accounted

for 19.2 % and 18.7 % of net revenues.

Accounts Receivable Concentration

As of March 31, 2026, one customer accounted

for 49.8 % of accounts receivable.

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

Revenues in Excess of Billings Concentration

As of March 31, 2026, four customers

accounted for 20.1 % , 17.7 % , 11.5 % , and 10.9 % 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.

NOTE 7 - OTHER CURRENT ASSETS

Other current assets consisted of the following:

SCHEDULE OF OTHER CURRENT ASSETS

December 31, 2025

March 31, 2026

June 30, 2025

4 unchanged sentences

Other Receivables

8 – REVENUES IN EXCESS OF BILLINGS – LONG TERM

in excess of billings, net consisted of the following:

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

NOTE 8 – REVENUES IN EXCESS OF BILLINGS – LONG

Revenues in excess of billings, net consisted of the following:

SCHEDULE OF REVENUE IN EXCESS OF BILLING

December 31, 2025

March 31, 2026

June 30, 2025

1 unchanged sentence

Present value discount

to revenue recognition for contract accounting, the Company has recorded revenues in excess of billings long-term for amounts billable

after one year.

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.

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

and equipment consisted of the following:

Pursuant to revenue recognition for contract

accounting, the Company has recorded revenues in excess of billings long-term for amounts billable after one year.

During the three and

nine months ended March 31, 2026, the Company accreted $ 12,504 and $ 49,822 , respectively, which were recorded in interest income for

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

recorded in interest income for that period.

The Company used the discounted cash flow method with interest rates ranging from 4.5 % to

6.6 % , for the period ended March 31, 2026.

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

17.5 % , for the period ended June 30, 2025.

NOTE 9 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

SCHEDULE OF PROPERTY AND EQUIPMENT

December 31, 2025

March 31, 2026

June 30, 2025

2 unchanged sentences

Assets Under Capital Leases

Property and Equipment, Gross

Accumulated Depreciation

2 unchanged sentences

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.

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

For the three and nine months ended March

31, 2026, depreciation expense totaled $ 307,416 and $ 931,771 , 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

December 31, 2025

Of these amounts, $ 192,897 and $ 591,694 , respectively, are

reflected in cost of revenues.

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

respectively.

Of these amounts, $ 240,444 and $ 706,876 , respectively, are reflected in cost of revenues.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

Following is a summary of fixed assets held under finance

leases as of March 31, 2026 and June 30, 2025:

SCHEDULE OF FIXED ASSETS HELD UNDER FINANCE LEASES

March 31, 2026

June 30, 2025

1 unchanged sentence

Fixed assets held under

capital leases, Total

lease term and discount rate were as follows:

SCHEDULE OF FINANCE LEASE TERM

December 31, 2025

finance leases, Total

Finance lease term and discount rate were as follows:

OF FINANCE LEASE TERM AND DISCOUNT RATE

March 31, 2026

June 30, 2025

1 unchanged sentence

Weighted average discount rate - Finance leases

NOTE 10 - LEASES

The Company leases certain office space, office equipment

and autos with remaining lease terms of one year to 10 years under leases classified as financing and operating.

For certain leases,

the Company has options to extend the lease term for additional periods ranging from one year to 10 years.

The Company treats a contract as a lease

when the contract conveys the right to use a physically distinct asset for a period of time in exchange for consideration, or the Company

directs the use of the asset and obtains substantially all the economic benefits of the asset.

These leases are recorded as right-of-use

(“ROU”) assets and lease obligation liabilities for leases with terms greater than 12 months.

ROU assets represent the Company’s

right to use an underlying asset for the entirety of the lease term.

Lease liabilities represent the Company’s obligation to make

payments over the life of the lease.

A ROU asset and a lease liability are recognized 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

The Company reviews the impairment of

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

The Company reviews the recoverability

of long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable.

The assessment of possible impairment is based on the Company’s ability to recover the carrying value of the asset from the expected

undiscounted future pre-tax cash flows of the related operations.

The Company elected the practical expedient

to exclude short-term leases (leases with original terms of 12 months or less) from ROU asset and lease liability accounts.

Lease expense is recognized on a straight-line

basis over the lease term, while variable lease payments are expensed as incurred.

Variable payments change due to facts or circumstances

occurring after the commencement date, other than the passage of time, and do not result in a re-measurement of lease liabilities.

Company’s variable lease payments include payments for finance leases that are adjusted based on a change in the Karachi Inter

Bank Offer Rate.

The Company’s lease agreements do not contain any significant residual value guarantees or restrictive covenants.

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

as financing and operating.

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

one year to 10 years.

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

for consideration, or the Company directs the use of the asset and obtains substantially all the economic benefits of the asset.

leases are recorded as right-of-use (“ROU”) assets and lease obligation liabilities for leases with terms greater than 12

ROU assets represent the Company’s right to use an underlying asset for the entirety of the lease term.

Lease liabilities

represent the Company’s obligation to make payments over the life of the lease.

A ROU asset and a lease liability are recognized

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.

Company reviews the recoverability of long-lived assets when events or changes in circumstances occur that indicate that the carrying

value of the asset may not be recoverable.

The assessment of possible impairment is based on the Company’s ability to recover the

carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations.

Company elected the practical expedient to exclude short-term leases (leases with original terms of 12 months or less) from ROU asset

and lease liability accounts.

expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred.

payments change due to facts or circumstances occurring after the commencement date, other than the passage of time, and do not result

in a re-measurement of lease liabilities.

The Company’s variable lease payments include payments for finance leases that are adjusted

based on a change in the Karachi Inter Bank Offer Rate.

The Company’s lease agreements do not contain any significant residual

value guarantees or restrictive covenants.

balance sheet information related to leases was as follows:

Supplemental balance sheet information related to leases was

SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO LEASE

December 31, 2025

March 31, 2026

June 30, 2025

Operating lease assets, net

Operating, Noncurrent

Operating lease liability,

lease liability, Noncurrent

Total Lease Liabilities

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

components of lease cost were as follows:

The components of lease cost were as follows:

SCHEDULE OF COMPONENTS OF LEASE COST

For the Three Months

For the Six Months

Ended December 31,

the Three Months

Ended March 31,

the Nine Months

Ended March 31,

Amortization of finance lease assets

4 unchanged sentences

Total lease cost

term and discount rate were as follows:

Lease term and discount rate were as follows:

SCHEDULE OF LEASE TERM AND DISCOUNT RATE

December 31, 2025

March 31, 2026

June 30, 2025

1 unchanged sentence

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 Six Months

Ended December 31,

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

Supplemental 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

Ended March 31,

Operating cash flows related to operating leases

1 unchanged sentence

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:

Maturities of operating lease liabilities were as follows

as of March 31, 2026:

SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES

8 unchanged sentences

Non-Current portion

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.

The Company is a lessor for certain office

space leased by the Company and sub-leased to others under non-cancellable leases.

These lease agreements provide for a fixed base rent

and are currently on a month-by-month basis .

All leases are considered operating leases.

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

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

payable and accrued expenses consisted of the following:

There are no rights to purchase the premises

and no residual value guarantees.

For the three and nine months ended March 31, 2026, the Company received lease income of $ 8,974 and

$ 26,802 , respectively.

For the three and nine months ended March 31, 2025, the Company received lease income of $ 8,406 and $ 25,326 , respectively.

NOTE 11 – OTHER INTANGIBLE ASSETS

Other intangible assets consist of capitalized costs of internally

developed software.

SCHEDULE OF OTHER INTANGIBLE ASSETS

March 31, 2026

Balance at June 30, 2025

Capitalized development costs

Amortization expense

Net carrying value at March 31, 2026

Additions to internal-use software represent

capitalized costs incurred during the application development stage under ASC 350-40, including direct labor and external development

Costs related to preliminary project activities, training and maintenance are expensed as incurred.

Amortization begins when the

software is placed into service and is recognized on a straight-line basis over the estimated useful lives.

NOTE 12 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following:

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

December 31, 2025

March 31, 2026

June 30, 2025

7 unchanged sentences

to Condensed Consolidated Financial Statements

payable and finance leases consisted of the following:

NOTE 13 – DEBTS

Notes payable and finance leases consisted of the following:

SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES

As of December 31, 2025

As of March 31, 2026

D&O Insurance

7 unchanged sentences

Sale and Leaseback Financing

Short Term Financing

Subsidiary Finance Leases

9 unchanged sentences

Sale and Leaseback Financing

Short Term Financing

Subsidiary Finance Leases

(1) The Company finances

Directors’ and Officers’ (“D&O”) liability insurance and Errors and Omissions (“E&O”) liability

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 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 7.0 % 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.

(1) The Company finances Directors’ and Officers’ (“D&O”) liability

insurance and Errors and Omissions (“E&O”) liability 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 ranged from 7.4 % to 7.8 % as

of March 31, 2026, 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 assets.

The annual interest rate was 8.0 % as of March 31, 2026, and

7.75 % as of June 30, 2025.

The Company paid down the full amount during the nine months ended March 31, 2026.

The total outstanding balance

as of June 30, 2025, was $ 405,000 .

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

(3) The Company’s

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

The annual interest rate was 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

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

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

As of December 31, 2025,

NTE was in compliance with this covenant.

(4) The Company’s

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

This is a revolving

loan that matures every six months.

(3) The Company’s subsidiary, NTE, has an overdraft facility with HSBC Bank plc whereby

the bank would cover any overdrafts up to £ 300,000 , or approximately $ 394,737 .

The annual interest rate was 8.0 % as of March 31,

2026 and 8.5 % as of June 30, 2025.

The total outstanding balance as of March 31, 2026 and June 30, 2025 was £ Nil .

This overdraft facility requires that the aggregate amount of invoiced trade debtors (net of

provisions for bad and doubtful debts and excluding intra-group debtors) of NTE, not exceeding 90 days old, will not be less than an

amount equal to 200 % of the facility.

As of March 31, 2026, NTE was in compliance with this covenant.

(4) The Company’s subsidiary, NetSol PK, has an export refinance facility with Askari Bank

Limited, secured by NetSol PK’s assets.

This is a revolving loan that matures every six months.

The total facility amount is Rs.

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

600,000,000 or $ 2,148,382 at March 31, 2026 and Rs.

600,000,000 or $ 2,111,561 at June 30, 2025.

NetSol PK used Rs.

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

subsidiary, NetSol PK, has a running finance facility with Askari Bank Limited, secured by NetSol PK’s assets.

The total facility

amount is Rs.

500,000,000 or $ 1,790,317

at March 31, 2026 and Rs.

500,000,000 or $ 1,759,634 at June 30, 2025.

The interest rate for the loan was 4.5 % at March 31, 2026 and 8.0 %

at June 30, 2025.

(5) The Company’s subsidiary, NetSol PK, has a running finance facility with Askari Bank

Limited, secured by NetSol PK’s assets.

The total facility amount is Rs.

4,050,937 or $ 14,505 and Rs.

4,050,937 or $ 14,256 , at December 31, 2025 and June 30, 2025, respectively.

The balance outstanding

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

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.

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

March 31, 2026 and June 30, 2025, respectively.

The balance outstanding at March 31, 2026 and June 30, 2025 was Rs.

rate for the loan was 13.5 % at March 31, 2026 and 13.2 % at June 30, 2025.

(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 $ 1,426,687 at December 31, 2025.

NetSol PK has not

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 December 31, 2025, NetSol PK was in

compliance with this covenant.

(7) The Company’s

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

This is a revolving

loan that matures every six months.

400,000,000 or $ 1,432,254 at March 31, 2026.

NetSol PK has not used this facility at March 31, 2026.

The interest rate for the loan was

4.5 % at March 31, 2026.

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, 2026, NetSol PK was in compliance with this covenant.

(7) The Company’s subsidiary, NetSol PK, has an export refinance facility with Samba Bank

Limited, secured by NetSol PK’s assets.

This is a revolving loan that matures every six months.

The total facility amount is Rs.

380,000,000 or $ 1,360,642 and Rs.

380,000,000 or $ 1,337,322 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.

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

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

revolving loan that matures every nine months.

The total facility amount is Rs.

380,000,000 or $ 1,337,322 at March 31, 2026 and June 30, 2025, respectively.

The interest rate for

the loan was 4.5 % at March 31, 2026 and 8.0 % at 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 March 31, 2026, NetSol PK was in compliance with these covenants .

(8) The Company’s subsidiary, NetSol PK, has an export refinance facility with Habib Metro

Bank Limited, secured by NetSol PK’s assets.

This is a revolving loan that matures every six months.

The total facility amount

1,300,000,000 or $ 4,654,827 and Rs.

1,300,000,000 or

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

NetSol PK used Rs.

1,300,000,000 or $ 4,575,048 , at March 31, 2026 and June 30, 2025, respectively.

1,300,000,000 or $ 4,654,827 and Rs.

1,300,000,000

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 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.

1,300,000,000 or $ 4,575,048 , at March 31, 2026 and June 30, 2025, respectively.

rate for the loan was 4.5 % at March 31, 2026 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’ title.

As of March 31, 2026, NetSol PK used Rs.

107,868,491 or $ 386,238

of which $ 244,269 was shown as long term and $ 141,969 as current.

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 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

21,771,042 or $ 76,618 of which

$ 46,958 was shown as long-term and $ 29,660 as current.

The interest rate for the loan was from 11.4 % to 12.3 % at March 31, 2026.

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

(10) The Company leases various fixed assets under finance lease arrangements expiring in various

years through 2029.

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 and six months ended December 31, 2025 and 2024.

Depreciation of assets under finance leases

is included in depreciation expense for the three and nine months ended March 31, 2026 and 2025.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

Following are the aggregate minimum future lease payments

under finance leases as of March 31, 2026:

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 December 31, 2025, which consist of “Sale and Leaseback

Financing (9)”.

The following are the aggregate future long-term debt payments

as of March 31, 2026, which consist of “Sale and Leaseback Financing (9)”.

SCHEDULE OF AGGREGATE FUTURE LONG TERM DEBT PAYMENTS

6 unchanged sentences

Non-Current portion

13 - STOCKHOLDERS’ EQUITY

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.

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

financial statements.

NOTE 14 - STOCKHOLDERS’ EQUITY

During the three and nine months ended

March 31, 2026, the Company issued 10,620 and 30,084 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 $ 108,000 , respectively, and was recorded as compensation expense

in the accompanying consolidated financial statements.

During the three and nine months ended

March 31, 2026, the Company issued 14,943 shares of common stock to one officer of the Company for his accrued bonus for the fiscal year

ended June 30, 2024 pursuant to the bonus policy of the Company.

The grant date fair value of the shares was $ 37,955 , and was recorded

as compensation expense in the consolidated financial statements for the fiscal year ended June 30, 2024.

During the three and nine months ended

March 31, 2026, the Company issued 7,168 and 20,448 shares of common stock to a consultant pursuant to the terms of its consultancy agreement.

The grant date fair value of the shares was $ 25,000 and $ 75,000 , respectively, and was recorded as compensation expense in the accompanying

consolidated financial statements.

During the nine months ended March 31,

2026, 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.

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

following table summarizes stock grants awarded as compensation:

The following table summarizes stock grants awarded as compensation:

SUMMARY OF UNVESTED STOCK GRANTS AWARDED AS COMPENSATION

# Number of shares

Weighted Average Grant Date Fair Value ($)

Average Grant

Date Fair Value

Unvested, June 30, 2025

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

stock purchase options consisted of the following:

Unvested, March 31, 2026

For the three and nine months ended March

31, 2026, the Company recorded compensation expense of $ 61,000 and $ 267,400 , respectively.

For the three and nine months ended March

31, 2025, the Company recorded compensation expense of $ 39,750 and $ 79,500 , respectively.

The weighted average grant date fair value

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

NOTE 15 – INCENTIVE AND NON-STATUTORY STOCK OPTION

Common stock purchase options consisted of the following:

SCHEDULE OF COMMON STOCK PURCHASE OPTIONS

Weighted Average Exercise Price

Weighted Average Remaining Contractual Life (in years)

Aggregated Intrinsic Value

Exercise Price

Life (in years)

Outstanding and exercisable, June 30, 2025

Expired / Cancelled

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.

Outstanding and exercisable, March 31, 2026

The aggregate intrinsic value at March

31, 2026 represents the difference between the Company’s closing stock price of $ 3.39 on March 31, 2026 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.

The following table summarizes information about stock options

outstanding and exercisable at March 31, 2026.

SUMMARY OF STOCK OPTIONS OUTSTANDING

Exercise Price

Number Outstanding and Exercisable

Weighted Average Remaining Contractual Life

Weighted Average Exercise Price

15– OPERATING SEGMENTS

Company has identified three segments for its products and services:

NOTE 16– OPERATING SEGMENTS

The Company has identified three segments

for its products and services:

North America, Europe, and Asia-Pacific.

The reportable segments

are business units located in different global regions.

The reportable segments are business units located in different

global regions.

Each business unit provides similar products and services:

license fees for leasing

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 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.

license fees for leasing 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 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.

Company has designated its Chief Executive Officer as the CODM.

Segment 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.

Prior 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

The following tables present financial information

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

following tables present financial information by reportable segment for the three months ended March 31, 2026:

SCHEDULE OF FINANCIAL INFORMATION BY REPORTABLE SEGMENT

For the Three Months Ended

December 31, 2025

North America

Asia - Pacific

Subscription and support

Intersegment revenues

Total revenue from reportable segments

Elimination of intersegment revenues

the Three Months Ended

revenue from reportable segments

of intersegment revenues

( 1,462,892 )

Total consolidated revenues

Revenues from reportable segments

Salaries and consultants

Selling and marketing

General and administrative

Income (loss) from operations - reportable segments

consolidated revenues

from reportable segments

and consultants

and marketing

and administrative

(loss) from operations - reportable segments

Reconciliation:

Income (loss) from operations - reportable segments

Corporate operating expenses

(loss) from operations - reportable segments

operating expenses

( 1,461,448 )

Interest expense

Interest income

Gain (loss) on foreign currency exchange transactions

Other income (expense)

Net income (loss) before income taxes

(loss) on foreign currency exchange transactions

income (expense)

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

following tables present financial information by reportable segment for the nine months ended March 31, 2026:

the Nine Months Ended

revenue from reportable segments

of intersegment revenues

( 3,767,724 )

consolidated revenues

from reportable segments

and consultants

and marketing

and administrative

(loss) from operations - reportable segments

Reconciliation:

Income (loss) from operations - reportable segments

Corporate operating expenses

( 2,503,383 )

Interest expense

Interest income

Gain (loss) on foreign currency exchange transactions

Other income (expense)

Net income (loss) before income taxes

(loss) from operations - reportable segments

operating expenses

( 3,964,831 )

(loss) on foreign currency exchange transactions

income (expense)

income (loss) before income taxes

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

December 31, 2025

North America

Asia - Pacific

receivable, net of allowance

in excess of billings, net of allowance

segment assets (b)

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

For the Six Months ended December 31, 2025

North America

Asia - Pacific

Expenditures for property, plant and equipment

Reconciliation

assets for reportable segments

not allocated to segments

the Nine Months ended March 31, 2026

for property, plant and equipment

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

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

Asia - Pacific

Subscription and support

Intersegment revenues

Total revenue from reportable segments

Elimination of intersegment revenues

( 2,326,738 )

Total consolidated revenues

Revenues from reportable segments

Salaries and consultants

Selling and marketing

General and administrative

Income (loss) from operations - reportable segments

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

the Three Months Ended

revenue from reportable segments

of intersegment revenues

( 2,976,720 )

consolidated revenues

from reportable segments

and consultants

and marketing

and administrative

(loss) from operations - reportable segments

Reconciliation:

Income (loss) from operations - reportable segments

Corporate operating expenses

(loss) from operations - reportable segments

$ ( 170,786 )

Interest expense

Interest income

Gain (loss) on foreign currency exchange transactions

Other income (expense)

Net income (loss) before income taxes

operating expenses

( 1,198,345 )

(loss) on foreign currency exchange transactions

income (expense)

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, 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

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

the Nine Months Ended

revenue from reportable segments

of intersegment revenues

( 5,924,850 )

consolidated revenues

from reportable segments

and consultants

and marketing

and administrative

(loss) from operations - reportable segments

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

(loss) from operations - reportable segments

operating expenses

( 4,020,528 )

(loss) on foreign currency exchange transactions

income (expense)

income (loss) before income taxes

TECHNOLOGIES, INC.

to Condensed Consolidated Financial Statements

June 30, 2025

North America

Asia - Pacific

receivable, net of allowance

in excess of billings, net of allowance

segment assets (b)

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

For the Six Months ended December 31, 2024

North America

Asia - Pacific

Expenditures for property, plant and equipment

Reconciliation

assets for reportable segments

not allocated to segments

For the Nine Months ended

March 31, 2025

for property, plant and equipment

(a) Other costs of

1 unchanged sentence

(b) Other assets include

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

property and equipment, right of use of assets, internally developed software cost, advances, deposits, and prepayments.

TECHNOLOGIES, INC.

4 unchanged sentences

SCHEDULE OF BALANCE OF NON-CONTROLLING INTEREST

Non-Controlling Interest %

Non-Controlling Interest at

December 31, 2025

NetSol Innovation

Non-Controlling Interest %

Non-Controlling Interest at

June 30, 2025

NetSol Innovation

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

Non-Controlling

Interest at March 31, 2026

Non-Controlling

Interest at June 30, 2025

the nine months ended March 31, 2026, employees of NetSol PK, a majority-owned subsidiary of the Company, exercised stock options to

purchase an aggregate of 1,443,874 shares of the subsidiary’s common stock for total proceeds of $ 399,620 .

Of this amount, $ 387,200

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.

was received during the nine months ended March 31, 2026, 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 31.41 % at March 31, 2026.

The carrying amount of the non-controlling interest was increased by $ 602,493 , and the difference of $ 202,873

5 unchanged sentences

the Three Months

income (loss) attributable to NetSol

$ ( 1,147,042 )

$ ( 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 )

the Nine Months

in paid-in capital for purchase of 177,558

shares of OTOZ Inc common stock

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

$ ( 809,567 )

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

in paid-in capital for option exercise of 1,443,874

shares of common stock of NetSol PK by employees

transfer to (from) non-controlling interest

from net income (loss) attributable to NetSol and

transfer (to) from non-controlling interest

$ ( 1,012,440 )

7 unchanged sentences

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

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.

the three and nine months ended March 31, 2026, the Company recorded an income tax provision of $ 781,243 and $ 1,477,212 , respectively.

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