Cover
Cover - shares | 3 Months Ended | |
Sep. 30, 2022 | Nov. 06, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --06-30 | |
Entity File Number | 0-22773 | |
Entity Registrant Name | NETSOL TECHNOLOGIES, INC. | |
Entity Central Index Key | 0001039280 | |
Entity Tax Identification Number | 95-4627685 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 23975 Park Sorrento | |
Entity Address, Address Line Two | Suite 250 | |
Entity Address, City or Town | Calabasas | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 91302 | |
City Area Code | (818) | |
Local Phone Number | 222-9195 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | NTWK | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 11,270,199 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2022 | Jun. 30, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 20,922,948 | $ 23,963,797 |
Accounts receivable, net of allowance of $153,580 and $166,231 | 7,319,856 | 8,669,202 |
Revenues in excess of billings, net of allowance of $77,525 and $136,976 | 13,347,524 | 14,571,776 |
Other current assets, net of allowance of $1,243,633 and $1,243,633 | 2,480,415 | 2,223,361 |
Total current assets | 44,070,743 | 49,428,136 |
Revenues in excess of billings, net - long term | 714,458 | 853,601 |
Convertible note receivable - related party, net of allowance of $4,250,000 and $4,250,000 | ||
Property and equipment, net | 8,850,651 | 9,382,624 |
Right of use of assets - operating leases | 1,336,742 | 969,163 |
Long term investment | 1,059,368 | 1,059,368 |
Other assets | 529 | 25,546 |
Intangible assets, net | 1,110,617 | 1,587,670 |
Goodwill | 9,302,524 | 9,302,524 |
Total assets | 66,445,632 | 72,608,632 |
Current liabilities: | ||
Accounts payable and accrued expenses | 7,029,527 | 6,813,541 |
Current portion of loans and obligations under finance leases | 7,426,972 | 8,567,145 |
Current portion of operating lease obligations | 531,021 | 548,678 |
Unearned revenue | 3,982,198 | 4,901,562 |
Total current liabilities | 18,969,718 | 20,830,926 |
Loans and obligations under finance leases; less current maturities | 292,456 | 476,223 |
Operating lease obligations; less current maturities | 836,891 | 447,260 |
Total liabilities | 20,099,065 | 21,754,409 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $.01 par value; 500,000 shares authorized; | ||
Common stock, $.01 par value; 14,500,000 shares authorized; 12,209,230 shares issued and 11,270,199 outstanding as of September 30, 2022 and 12,196,570 shares issued and 11,257,539 outstanding as of June 30, 2022 | 122,093 | 121,966 |
Additional paid-in-capital | 128,420,519 | 128,218,247 |
Treasury stock (at cost, 939,031 shares as of September 30, 2022 and June 30, 2022) | (3,920,856) | (3,920,856) |
Accumulated deficit | (40,273,167) | (39,652,438) |
Other comprehensive loss | (42,281,135) | (39,363,085) |
Total NetSol stockholders’ equity | 42,067,454 | 45,403,834 |
Non-controlling interest | 4,279,113 | 5,450,389 |
Total stockholders’ equity | 46,346,567 | 50,854,223 |
Total liabilities and stockholders’ equity | $ 66,445,632 | $ 72,608,632 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2022 | Jun. 30, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 153,580 | $ 166,231 |
Revenues in excess of billings, allowance | 77,525 | 136,976 |
Other current assets allowance | 1,243,633 | 1,243,633 |
Convertible note receivable related party allowances | $ 4,250,000 | $ 4,250,000 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 14,500,000 | 14,500,000 |
Common stock, shares issued | 12,209,230 | 12,196,570 |
Common stock, shares outstanding | 11,270,199 | 11,257,539 |
Treasury stock, shares | 939,031 | 939,031 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Net Revenues: | ||
Total net revenues | $ 12,706,119 | $ 13,420,761 |
Cost of revenues: | ||
Salaries and consultants | 6,086,735 | 5,662,410 |
Travel | 392,345 | 214,132 |
Depreciation and amortization | 654,049 | 765,735 |
Other | 1,320,993 | 1,335,461 |
Total cost of revenues | 8,454,122 | 7,977,738 |
Gross profit | 4,251,997 | 5,443,023 |
Operating expenses: | ||
Selling and marketing | 1,762,177 | 1,619,993 |
Depreciation and amortization | 190,954 | 214,271 |
General and administrative | 3,725,430 | 3,973,139 |
Research and development cost | 469,627 | 275,230 |
Total operating expenses | 6,148,188 | 6,082,633 |
Loss from operations | (1,896,191) | (639,610) |
Other income and (expenses) | ||
Gain (loss) on sale of assets | 23,296 | (110,600) |
Interest expense | (121,610) | (101,013) |
Interest income | 431,857 | 443,133 |
Gain on foreign currency exchange transactions | 1,315,705 | 1,284,148 |
Share of net loss from equity investment | (160,965) | |
Other income (expense) | 2,320 | 3,029 |
Total other income (expenses) | 1,651,568 | 1,357,732 |
Net income (loss) before income taxes | (244,623) | 718,122 |
Income tax provision | (193,348) | (167,627) |
Net income (loss) | (437,971) | 550,495 |
Non-controlling interest | (182,758) | (362,526) |
Net income (loss) attributable to NetSol | $ (620,729) | $ 187,969 |
Net income (loss) per share: | ||
Basic | $ (0.06) | $ 0.02 |
Diluted | $ (0.06) | $ 0.02 |
Weighted average number of shares outstanding | ||
Basic | 11,257,539 | 11,254,205 |
Diluted | 11,257,539 | 11,254,205 |
License [Member] | ||
Net Revenues: | ||
Total net revenues | $ 249,960 | $ 10,716 |
Subscription And Support [Member] | ||
Net Revenues: | ||
Total net revenues | 6,016,834 | 6,230,389 |
Service [Member] | ||
Net Revenues: | ||
Total net revenues | $ 6,439,325 | $ 7,179,656 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||
Net income (loss) | $ (620,729) | $ 187,969 |
Other comprehensive income (loss): | ||
Translation adjustment | (4,151,519) | (3,284,396) |
Translation adjustment attributable to non-controlling interest | 1,233,469 | 1,138,991 |
Net translation adjustment | (2,918,050) | (2,145,405) |
Comprehensive income (loss) attributable to NetSol | $ (3,538,779) | $ (1,957,436) |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Noncontrolling Interest [Member] | Total |
Beginning balance at Jun. 30, 2021 | $ 121,816 | $ 129,018,826 | $ (3,820,750) | $ (38,801,282) | $ (31,868,481) | $ 7,215,473 | $ 61,865,602 |
Beginning balance, shares at Jun. 30, 2021 | 12,181,585 | ||||||
Common stock issued for: | |||||||
Services | $ 20 | 11,989 | 12,009 | ||||
Services, shares | 1,985 | ||||||
Foreign currency translation adjustment | (2,145,405) | (1,138,991) | (3,284,396) | ||||
Net income (loss) for the year | 187,969 | 362,526 | 550,495 | ||||
Subsidiary common stock issued for: | |||||||
-Services | 167 | (167) | |||||
Purchase of treasury shares | (100,106) | (100,106) | |||||
Ending balance at Sep. 30, 2021 | $ 121,836 | 129,030,982 | (3,920,856) | (38,613,313) | (34,013,886) | 6,438,841 | 59,043,604 |
Ending balance, shares at Sep. 30, 2021 | 12,183,570 | ||||||
Beginning balance at Jun. 30, 2022 | $ 121,966 | 128,218,247 | (3,920,856) | (39,652,438) | (39,363,085) | 5,450,389 | 50,854,223 |
Beginning balance, shares at Jun. 30, 2022 | 12,196,570 | ||||||
Common stock issued for: | |||||||
Services | $ 127 | 39,623 | 39,750 | ||||
Services, shares | 12,660 | ||||||
Adjustment in APIC for change in subsidiary shares to non-controlling interest | 120,565 | (120,565) | |||||
Fair value of subsidiary options issued | 42,084 | 42,084 | |||||
Foreign currency translation adjustment | (2,918,050) | (1,233,469) | (4,151,519) | ||||
Net income (loss) for the year | (620,729) | 182,758 | (437,971) | ||||
Ending balance at Sep. 30, 2022 | $ 122,093 | $ 128,420,519 | $ (3,920,856) | $ (40,273,167) | $ (42,281,135) | $ 4,279,113 | $ 46,346,567 |
Ending balance, shares at Sep. 30, 2022 | 12,209,230 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (437,971) | $ 550,495 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 845,003 | 980,006 |
Provision for bad debts | (47,479) | (45,274) |
Share of net loss from investment under equity method | 160,965 | |
(Gain) loss on sale of assets | (23,296) | 110,600 |
Stock based compensation | 81,834 | 3,003 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 815,132 | (2,034,434) |
Revenues in excess of billing | 337,996 | (1,952,228) |
Other current assets | (340,390) | (35,342) |
Accounts payable and accrued expenses | 687,453 | (43,293) |
Unearned revenue | (619,425) | (1,086,151) |
Net cash provided by (used in) operating activities | 1,298,857 | (3,391,653) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (1,347,601) | (216,112) |
Sales of property and equipment | 453,607 | 19,705 |
Net cash used in investing activities | (893,994) | (196,407) |
Cash flows from financing activities: | ||
Purchase of treasury stock | (100,106) | |
Payments on finance lease obligations and loans - net | (445,737) | (363,464) |
Net cash used in financing activities | (445,737) | (463,570) |
Effect of exchange rate changes | (2,999,975) | (2,653,648) |
Net decrease in cash and cash equivalents | (3,040,849) | (6,705,278) |
Cash and cash equivalents at beginning of the period | 23,963,797 | 33,705,154 |
Cash and cash equivalents at end of period | 20,922,948 | 26,999,876 |
Cash paid during the period for: | ||
Interest | 94,942 | 191,835 |
Taxes | $ 172,064 | $ 155,098 |
BASIS OF PRESENTATION AND PRINC
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION | 3 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION | NOTE 1 - BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION The Company designs, develops, markets, and exports proprietary software 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. The consolidated condensed interim financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended June 30, 2022. The Company follows the same accounting policies in preparation of interim reports. Results of operations for the interim periods are not indicative of annual results. The accompanying consolidated financial statements include the accounts of the Company as follows: Wholly owned Subsidiaries NetSol Technologies Americas, Inc. (“NTA”) NetSol Connect (Private), Ltd. (“Connect”) NetSol Technologies Australia Pty Ltd. (“Australia”) NetSol Technologies Europe Limited (“NTE”) NTPK (Thailand) Co. Limited (“NTPK Thailand”) NetSol Technologies (Beijing) Co. Ltd. (“NetSol Beijing”) Tianjin NuoJinZhiCheng Co., Ltd (“Tianjin”) Ascent Europe Ltd. (“AEL”) Virtual Lease Services Holdings Limited (“VLSH”) Virtual Lease Services Limited (“VLS”) Virtual Lease Services (Ireland) Limited (“VLSIL”) Majority-owned Subsidiaries NetSol Technologies, Ltd. (“NetSol PK”) NetSol Innovation (Private) Limited (“NetSol Innovation”) NetSol Technologies Thailand Limited (“NetSol Thai”) OTOZ, Inc. (“OTOZ”) OTOZ (Thailand) Limited (“OTOZ Thai”) |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 3 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
ACCOUNTING POLICIES | NOTE 2 – ACCOUNTING POLICIES Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The areas requiring significant estimates are provision for doubtful accounts, provision for taxation, useful life of depreciable assets, useful life of intangible assets, contingencies, assumptions used to determine the net present value of operating lease liabilities, and estimated contract costs. The estimates and underlying assumptions are reviewed on an ongoing basis. Actual results could differ from those estimates. NETSOL TECHNOLOGIES, INC. Notes to Condensed Consolidated Financial Statements September 30, 2022 (Unaudited) Concentration of Credit Risk Cash includes cash on hand and demand deposits in accounts maintained within the United States as well as in foreign countries. Certain financial instruments, which subject the Company to concentration of credit risk, consist of cash and restricted cash. The Company maintains balances at financial institutions which, from time to time, may exceed Federal Deposit Insurance Corporation insured limits for the banks located in the United States. Balances at financial institutions within certain foreign countries are not covered by insurance except balances maintained in China are insured for RMB 500,000 70,323 85,000 94,444 18,393,548 22,758,963 The Company’s operations are carried out globally. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments of each country and by the general state of the country’s economy. The Company’s operations in each foreign country are subject to specific considerations and significant risks not typically associated with companies in economically developed nations. These include risks associated with, among others, the political, economic and legal environments and foreign currency exchange. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Fair Value of Financial Instruments The Company applies the provisions of Accounting Standards Codification (“ASC”) 820-10, “Fair Value Measurements and Disclosures.” The three levels of valuation hierarchy are defined as follows: Level 1: Valuations consist of unadjusted quoted prices in active markets for identical assets and liabilities and has the highest priority. Level 2: Valuations rely on quoted prices in markets that are not active or observable inputs over the full term of the asset or liability. Level 3: Valuations are based on prices or third party or internal valuation models that require inputs that are significant to the fair value measurement and are less observable and thus have the lowest priority. The Company’s financial assets that were measured at fair value on a recurring basis as of September 30, 2022, were as follows: SCHEDULE OF FAIR VALUE OF FINANCIAL ASSETS MEASURED ON RECURRING BASIS Level 1 Level 2 Level 3 Total Assets Revenues in excess of billings - long term $ - $ - $ 714,458 $ 714,458 Total $ - $ - $ 714,458 $ 714,458 The Company’s financial assets that were measured at fair value on a recurring basis as of June 30, 2022, were as follows: Level 1 Level 2 Level 3 Total Assets Revenues in excess of billings - long term $ - $ - $ 853,601 $ 853,601 Total $ - $ - $ 853,601 $ 853,601 NETSOL TECHNOLOGIES, INC. Notes to Condensed Consolidated Financial Statements September 30, 2022 (Unaudited) The reconciliation from June 30, 2022 to September 30, 2022 is as follows: SCHEDULE OF FAIR VALUE OF FINANCIAL INSTRUMENTS RECONCILIATION Revenues in excess of billings - long term Fair value discount Total Balance at June 30, 2022 $ 881,940 $ (28,339 ) $ 853,601 Amortization during the period - 9,369 9,369 Transfers to short term (93,245 ) - (93,245 ) Effect of Translation Adjustment (55,581 ) 314 (55,267 ) Balance at September 30, 2022 $ 733,114 $ (18,656 ) $ 714,458 Management analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity” “Derivatives and Hedging.” Recent Accounting Standards: In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock and results in fewer instruments with embedded conversion features being separately recognized from the host contract as compared with current standards. Those instruments that do not have a separately recognized embedded conversion feature will no longer recognize a debt issuance discount related to such a conversion feature and would recognize less interest expense on a periodic basis. Additionally, the ASU amends the calculation of the share dilution impact related to a conversion feature and eliminates the treasury method as an option. For instruments that do not have a component mandatorily settled in cash, the change will likely result in a higher amount of share dilution in the calculation of earnings per share. This ASU is effective for fiscal years (and interim periods within those fiscal years) beginning after December 15, 2021, which for the Company is the first quarter of fiscal 2023. The adoption of ASU No. 2020-06 did not have a material impact on the Company’s financial condition, results of operations or disclosures. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, as if the acquirer had originated the contracts. ASU 2021-08 is effective for annual periods beginning after December 15, 2022, and interim periods within those years, with early adoption permitted. The Company does not expect the standard to have a material effect on its consolidated financial statements. All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | NOTE 3 – REVENUE RECOGNITION The Company determines revenue recognition through the following steps: ● Identification of the contract, or contracts, with a customer; ● Identification of the performance obligations in the contract; ● Determination of the transaction price; ● Allocation of the transaction price to the performance obligations in the contract; and ● Recognition of revenue when, or as, the Company satisfies a performance obligation. The Company records the amount of revenue and related costs by considering whether the entity is a principal (gross presentation) or an agent (net presentation) by evaluating the nature of its promise to the customer. Revenue is presented net of sales, value-added and other taxes collected from customers and remitted to government authorities. The Company has two primary revenue streams: core revenue and non-core revenue. NETSOL TECHNOLOGIES, INC. Notes to Condensed Consolidated Financial Statements September 30, 2022 (Unaudited) Core Revenue The Company generates its core revenue from the following sources: (1) software licenses, (2) services, which include implementation and consulting services, and (3) subscription and support, which includes post contract support, of its enterprise software solutions for the lease and finance industry. The Company offers its software using the same underlying technology via two models: a traditional on-premises licensing model and a subscription model. The on-premises model involves the sale or license of software on a perpetual basis to customers who take possession of the software and install and maintain the software on their own hardware. Under the subscription delivery model, the Company provides access to its software on a hosted basis as a service and customers generally do not have the contractual right to take possession of the software. Non-Core Revenue The Company generates its non-core revenue by providing business process outsourcing (“BPO”), other IT services and internet services. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account under Topic 606. The transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied by transferring the promised good or service to the customer. The Company identifies and tracks the performance obligations at contract inception so that the Company can monitor and account for the performance obligations over the life of the contract. The Company’s contracts which contain multiple performance obligations generally consist of the initial purchase of subscription or licenses and a professional services engagement. License purchases generally have multiple performance obligations as customers purchase post contract support and services in addition to the licenses. The Company’s single performance obligation arrangements are typically post contract support renewals, subscription renewals and services engagements. For contracts with multiple performance obligations where the contracted price differs from the standalone selling price (“SSP”) for any distinct good or service, the Company may be required to allocate the contract’s transaction price to each performance obligation using its best estimate for the SSP. Software Licenses Transfer 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. Subscription Subscription revenue is recognized ratably over the initial subscription period committed to by the customer commencing when the product is made available to the customer. The initial subscription period is typically 12 to 60 months. The Company generally invoices its customers in advance in quarterly or annual installments and typical payment terms provide that customers make payment within 30 days of invoice. Post Contract Support Revenue from support services and product updates, referred to as subscription and support revenue, is recognized ratably over the term of the maintenance period, which in most instances is one year. Software license updates provide customers with rights to unspecified software product updates and patches released during the term of the support period on a when-and-if available basis. The Company’s customers purchase both product support and license updates when they acquire new software licenses. In addition, a majority of customers renew their support services contracts annually and typical payment terms provide that customers make payment within 30 days of invoice. Professional Services Revenue from professional services is typically comprised of implementation, development, data migration, training or other consulting services. Consulting services are generally sold on a time-and-materials or fixed fee basis and can include services ranging from software installation to data conversion and building non-complex interfaces to allow the software to operate in integrated environments. The Company recognizes revenue for time-and-materials arrangements as the services are performed. In fixed fee arrangements, revenue is recognized as services are performed as measured by costs incurred to date, compared to total estimated costs to complete the services project. Management applies judgment when estimating project status and the costs necessary to complete the services projects. A number of internal and external factors can affect these estimates, including labor rates, utilization and efficiency variances and specification and testing requirement changes. Services are generally invoiced upon milestones in the contract or upon consumption of the hourly resources and payments are typically due 30 days after invoice. NETSOL TECHNOLOGIES, INC. Notes to Condensed Consolidated Financial Statements September 30, 2022 (Unaudited) BPO and Internet Services Revenue from BPO services is recognized based on the stage of completion which is measured by reference to labor hours incurred to date as a percentage of total estimated labor hours for each contract. Internet services are invoiced either monthly, quarterly or half yearly in advance to the customers and revenue is recognized ratably overtime on a monthly basis. Disaggregated Revenue The Company disaggregates revenue from contracts with customers by category — core and non-core, as it believes it best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The Company’s disaggregated revenue by category is as follows: SCHEDULE OF DISAGGREGATED REVENUE BY CATEGORY 1 2 For the Three Months Ended September 30, 2022 2021 Core: License $ 249,960 $ 10,716 Subscription and support 6,016,834 6,230,389 Services 5,421,366 5,856,279 Total core revenue, net 11,688,160 12,097,384 Non-Core: Services 1,017,959 1,323,377 Total non-core revenue, net 1,017,959 1,323,377 Total net revenue $ 12,706,119 $ 13,420,761 Significant Judgments Due to the complexity of certain contracts, the actual revenue recognition treatment required under Topic 606 for the Company’s arrangements may be dependent on contract-specific terms and may vary in some instances. Judgment is required to determine the SSP for each distinct performance obligation. The Company rarely licenses or sells products on a stand-alone basis, so the Company is required to estimate the range of SSPs for each performance obligation. In instances where SSP is not directly observable because the Company does not sell the license, product or service separately, the Company determines the SSP using information that may include market conditions and other observable inputs. In making these judgments, the Company analyzes various factors, including its pricing methodology and consistency, size of the arrangement, length of term, customer demographics and overall market and economic conditions. Based on these results, the estimated SSP is set for each distinct product or service delivered to customers. The most significant inputs involved in the Company’s revenue recognition policies are: The (1) stand-alone selling prices of the Company’s software license, and the (2) the method of recognizing revenue for installation/customization, and other services. The stand-alone selling price of the licenses was measured primarily through an analysis of pricing that management evaluated when quoting prices to customers. Although the Company has no history of selling its software separately from post contract support and other services, the Company does have historical experience with amending contracts with customers to provide additional modules of its software or providing those modules at an optional price. This information guides the Company in assessing the stand-alone selling price of the Company’s software, since the Company can observe instances where a customer had a particular component of the Company’s software that was essentially priced separate from other goods and services that the Company delivered to that customer. The Company recognizes revenue from implementation and customization services using the percentage of estimated “man-days” that the work requires. The Company believes the level of effort to complete the services is best measured by the amount of time (measured as an employee working for one day on implementation/customization work) that is required to complete the implementation or customization work. The Company reviews its estimate of man-days required to complete implementation and customization services each reporting period. NETSOL TECHNOLOGIES, INC. Notes to Condensed Consolidated Financial Statements September 30, 2022 (Unaudited) Revenue is recognized over time for the Company’s subscription, post contract support and fixed fee professional services that are separate performance obligations. For the Company’s professional services, revenue is recognized over time, generally using costs incurred or hours expended to measure progress. Judgment is required in estimating project status and the costs necessary to complete projects. A number of internal and external factors can affect these estimates, including labor rates, utilization, specification variances and testing requirement changes. If 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, such agreements are deemed to be combined as one arrangement for revenue recognition purposes. The Company exercises significant judgment to evaluate the relevant facts and circumstances in determining whether agreements should be accounted for separately or as a single arrangement. 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. If a contract includes variable consideration, the Company exercises judgment in estimating the amount of consideration to which the entity will be entitled in exchange for transferring the promised goods or services to a customer. When estimating variable consideration, the Company will consider all relevant facts and circumstances. Variable consideration will be estimated and included in the contract price only when it is probable that a significant reversal in the amount of revenue recognized will not occur. Contract Balances The timing of revenue recognition may differ from the timing of invoicing to customers and these timing differences result in receivables, contract assets (revenues in excess of billings), or contract liabilities (unearned revenue) on the Company’s Consolidated Balance Sheets. The Company records revenues in excess of billings when the Company has transferred goods or services but does not yet have the right to consideration. The Company records unearned revenue when the Company has received or has the right to receive consideration but has not yet transferred goods or services to the customer. The revenues in excess of billings are transferred to receivables when the rights to consideration become unconditional, usually upon completion of a milestone. The Company’s revenues in excess of billings and unearned revenue are as follows: SCHEDULE OF REVENUES IN EXCESS OF BILLINGS AND DEFERRED REVENUE 1 2 As of As of September 30, 2022 June 30, 2022 Revenues in excess of billings $ 14,061,982 $ 15,425,377 Unearned revenue $ 3,982,198 $ 4,901,562 During the three months ended September 30, 2022, the Company recognized revenue of $ 2,108,715 Revenue allocated to 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 $ 38,252,000 15,400,000 5 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 term. Unpaid invoice amounts for non-cancelable license and services starting in future periods are included in accounts receivable and unearned revenue. NETSOL TECHNOLOGIES, INC. Notes to Condensed Consolidated Financial Statements September 30, 2022 (Unaudited) Practical Expedients and Exemptions There are several practical expedients and exemptions allowed under Topic 606 that impact timing of revenue recognition and the Company’s disclosures. The Company has applied the following practical expedients: ● The Company does not evaluate a contract for a significant financing component if payment is expected within one year or less from the transfer of the promised items to the customer. ● The 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 received. These costs are recorded within sales and marketing expense in the Consolidated Statement of Operations. ● The Company does not disclose the value of unsatisfied performance obligations for contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed (applies to time-and-material engagements). 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. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 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. During the three months ended September 30, 2022 and 2021, there were no outstanding dilutive instruments. |
OTHER COMPREHENSIVE INCOME AND
OTHER COMPREHENSIVE INCOME AND FOREIGN CURRENCY | 3 Months Ended |
Sep. 30, 2022 | |
Other Comprehensive Income And Foreign Currency | |
OTHER COMPREHENSIVE INCOME AND FOREIGN CURRENCY | NOTE 5 – OTHER COMPREHENSIVE INCOME AND FOREIGN CURRENCY The accounts of NTE, AEL, VLSH and VLS use the British Pound; VLSIL uses the Euro; NetSol PK, Connect, and NetSol Innovation use the Pakistan Rupee; NTPK Thailand and NetSol Thai use the Thai Baht; Australia uses the Australian dollar; and NetSol Beijing and Tianjin use the Chinese Yuan as the functional currencies. NetSol Technologies, Inc., and its subsidiary, NTA, use the U.S. dollar as the functional currency. 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 $ 42,281,135 39,363,085 2,918,050 2,145,405 |
MAJOR CUSTOMERS
MAJOR CUSTOMERS | 3 Months Ended |
Sep. 30, 2022 | |
Risks and Uncertainties [Abstract] | |
MAJOR CUSTOMERS | NOTE 6 – MAJOR CUSTOMERS During the three months ended September 30, 2022, revenues from Daimler Financial Services (“DFS”) and BMW Financial (“BMW”) were $ 3,591,807 1,469,147 28.3% 11.6% 3,542,284 891,679 26.4% 6.6% Accounts receivable from DFS and BMW at September 30, 2022, were $ 600,925 132,392 2,005,463 2,498,645 1,804,728 2,533,172 365,863 2,199,381 NETSOL TECHNOLOGIES, INC. Notes to Condensed Consolidated Financial Statements September 30, 2022 (Unaudited) |
CONVERTIBLE NOTES RECEIVABLE _
CONVERTIBLE NOTES RECEIVABLE – RELATED PARTY | 3 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
CONVERTIBLE NOTES RECEIVABLE – RELATED PARTY | NOTE 7 – CONVERTIBLE NOTES RECEIVABLE – RELATED PARTY The Company has entered into multiple convertible note receivable agreements with WRLD3D. The convertible notes bear interest ranging from 5% 10% The following table summarizes the convertible notes receivable from WRLD3D. SCHEDULE OF CONVERTIBLE NOTES Convertible Agreement Interest Maturity Note Accrued Date Rate Date Amount Interest May 25, 2017 5 % March 2, 2018 $ 750,000 $ 110,202 February 9, 2018 10 % March 31, 2019 2,500,000 500,773 April 1, 2019 10 % March 31, 2020 600,000 57,648 August 19, 2019 10 % March 31, 2020 400,000 32,439 4,250,000 701,062 Less allowance for doubtful account (4,250,000 ) (701,062 ) Net Balance $ - $ - The Company has accrued interest of $ 701,062 |
OTHER CURRENT ASSETS
OTHER CURRENT ASSETS | 3 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER CURRENT ASSETS | NOTE 8 - OTHER CURRENT ASSETS Other current assets consisted of the following: SCHEDULE OF OTHER CURRENT ASSETS As of As of September 30, 2022 June 30, 2022 Prepaid Expenses $ 1,356,902 $ 1,389,370 Advance Income Tax 199,320 202,783 Employee Advances 90,550 87,627 Security Deposits 331,301 236,909 Other Receivables 61,614 21,581 Other Assets 440,728 285,091 Due From Related Party 1,243,633 1,243,633 Total 3,724,048 3,466,994 Less allowance for doubtful account (1,243,633 ) (1,243,633 ) Net Balance $ 2,480,415 $ 2,223,361 Due from related party is the amount receivable from WRLD3D for which the Company has provided an allowance for credit loss for the full amount, leaving a net balance of $ 0 |
REVENUES IN EXCESS OF BILLINGS
REVENUES IN EXCESS OF BILLINGS – LONG TERM | 3 Months Ended |
Sep. 30, 2022 | |
Contractors [Abstract] | |
REVENUES IN EXCESS OF BILLINGS – LONG TERM | NOTE 9 – REVENUES IN EXCESS OF BILLINGS – LONG TERM Revenues in excess of billings, net consisted of the following: SCHEDULE OF REVENUE IN EXCESS OF BILLING As of As of September 30, 2022 June 30, 2022 Revenues in excess of billings - long term $ 733,114 $ 881,940 Present value discount (18,656 ) (28,339 ) Net Balance $ 714,458 $ 853,601 Pursuant to revenue recognition for contract accounting, the Company had recorded revenues in excess of billings long-term for amounts billable after one year. During the three months ended September 30, 2022 and 2021, the Company accreted $ 9,369 9,502 4.65% 6.25% NETSOL TECHNOLOGIES, INC. Notes to Condensed Consolidated Financial Statements September 30, 2022 (Unaudited) |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 10 - PROPERTY AND EQUIPMENT Property and equipment consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT As of As of September 30, 2022 June 30, 2022 Office Furniture and Equipment $ 2,792,403 $ 3,021,586 Computer Equipment 11,147,529 11,388,856 Assets Under Capital Leases 58,616 305,081 Building 4,357,506 4,818,650 Land 1,114,891 1,237,965 Autos 2,411,407 2,503,990 Improvements 215,538 175,560 Subtotal 22,097,890 23,451,688 Accumulated Depreciation (13,247,239 ) (14,069,064 ) Property and Equipment, Net $ 8,850,651 $ 9,382,624 For the three months ended September 30, 2022 and 2021, depreciation expense totaled $ 522,183 539,722 331,229 325,451 Following is a summary of fixed assets held under finance leases as of September 30, 2022 and June 30, 2022: SUMMARY OF FIXED ASSETS HELD UNDER CAPITAL LEASES As of As of September 30, 2022 June 30, 2022 Vehicles $ 58,616 $ 305,081 Total 58,616 305,081 Less: Accumulated Depreciation - Net (13,073 ) (145,658 ) Fixed assets held under finance leases, Total $ 45,543 $ 159,423 Finance lease term and discount rate were as follows: SCHEDULE OF FINANCE LEASE TERM As of As of September 30, 2022 June 30, 2022 Weighted average remaining lease term - Finance leases 2.55 2.39 Weighted average discount rate - Finance leases 16.0 % 12.5 % |
LEASES
LEASES | 3 Months Ended |
Sep. 30, 2022 | |
Leases | |
LEASES | NOTE 11 - LEASES The Company leases certain office space, office equipment and autos with remaining lease terms of one year 10 one year 10 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 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. NETSOL TECHNOLOGIES, INC. Notes to Condensed Consolidated Financial Statements September 30, 2022 (Unaudited) The Company reviews the impairment of ROU assets consistent with the approach applied for 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. 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. Supplemental balance sheet information related to leases was as follows: SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO LEASE As of As of September 30, 2022 June 30, 2022 Assets Operating lease assets, net $ 1,336,742 $ 969,163 Liabilities Current Operating $ 531,021 $ 548,678 Operating, Current $ 531,021 $ 548,678 Non-current Operating 836,891 447,260 Operating, Non-current 836,891 447,260 Total Lease Liabilities $ 1,367,912 $ 995,938 The components of lease cost were as follows: SCHEDULE OF COMPONENTS OF LEASE COST 1 2 For the Three Months Ended September 30, 2022 2021 Amortization of finance lease assets $ 2,896 $ 21,033 Interest on finance lease obligation 1,807 4,936 Operating lease cost 118,522 282,951 Short term lease cost 66,636 - Sub lease income (7,812 ) (9,155 ) Total lease cost $ 182,049 $ 299,765 Lease term and discount rate were as follows: SCHEDULE OF LEASE TERM AND DISCOUNT RATE As of As of September 30, 2022 June 30, 2022 Weighted average remaining lease term - Operating leases 3.32 3.34 Weighted average discount rate - Operating leases 3.9 % 4.2 % Supplemental disclosures of cash flow information related to leases were as follows: SCHEDULE OF SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION RELATED TO LEASES 1 2 For the Three Months Ended September 30 2022 2021 Operating cash flows related to operating leases $ 122,121 $ 272,478 Operating cash flows related to finance leases $ 1,807 $ 3,502 Financing cash flows related finance leases $ 3,679 $ 48,908 NETSOL TECHNOLOGIES, INC. Notes to Condensed Consolidated Financial Statements September 30, 2022 (Unaudited) Maturities of operating lease liabilities were as follows as of September 30, 2022: SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES Amount Within year 1 $ 569,691 Within year 2 381,217 Within year 3 323,713 Within year 4 138,102 Within year 5 28,237 Thereafter 1,013 Total Lease Payments 1,441,973 Less: Imputed interest (74,061 ) Present Value of lease liabilities 1,367,912 Less: Current portion (531,021 ) Non-Current portion $ 836,891 The Company is a lessor for certain office space leased by the Company and sub-leased to others under non-cancelable 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. There are no rights to purchase the premises and no residual value guarantees. For the three months ended September 30, 2022 and 2021, the Company received lease income of $ 7,812 9,155 |
LONG TERM INVESTMENT
LONG TERM INVESTMENT | 3 Months Ended |
Sep. 30, 2022 | |
Investments, All Other Investments [Abstract] | |
LONG TERM INVESTMENT | NOTE 12 – LONG TERM INVESTMENT Drivemate – Related Party The Company and Drivemate Co., Ltd. (“Drivemate”) entered into a subscription agreement on April 25, 2019, (“Drivemate Agreement”) whereby the Company purchased an equity interest of 30% 5,469 1,800,000 500,000 1,300,000 500,000 1,300,000 Pursuant to the agreement, the number of shares to be issued is adjusted as necessary to result in an equity ownership equal to 30% of the issued and outstanding shares at the final payment date. As of September 30, 2022, the Company has been issued 8,178 shares equal to 30% of Drivemate. Per the Drivemate Agreement, the Company appointed two directors to the Drivemate board. The Company determined that it met the significant influence criteria since two of the four directors are appointed by the Company and the Company owns 30% of Drivemate; therefore, the Company accounts for the investment using the equity method of accounting. Under the equity method of accounting, the Company recorded its share of net loss of $ nil 63,571 WRLD3D-Related Party On March 2, 2017, the Company purchased a 4.9% 1,111,111 555,556 555,555 12.2% 2,777,778 Under the equity method of accounting, the Company recorded its share of net loss of $ nil 97,394 The following table reflects the above investments at September 30, 2022. SCHEDULE OF LONG TERM INVESTMENT Drivemate WRLD3D Total Gross investment $ 1,800,000 $ 3,888,889 $ 5,688,889 Cumulative net loss on investment (740,632 ) (3,238,647 ) (3,979,279 ) Cumulative other comprehensive income (loss) - (650,242 ) (650,242 ) Net investment $ 1,059,368 $ - $ 1,059,368 NETSOL TECHNOLOGIES, INC. Notes to Condensed Consolidated Financial Statements September 30, 2022 (Unaudited) The following table reflects the above investments at June 30, 2022. Drivemate WRLD3D Total Gross investment $ 1,800,000 $ 3,888,889 $ 5,688,889 Cumulative net loss on investment (740,632 ) (3,238,647 ) (3,979,279 ) Cumulative other comprehensive income (loss) - (650,242 ) (650,242 ) Net investment $ 1,059,368 $ - $ 1,059,368 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 13 - INTANGIBLE ASSETS Intangible assets consisted of the following: SCHEDULE OF INTANGIBLE ASSETS As of As of September 30, 2022 June 30, 2022 Product Licenses - Cost $ 47,244,997 $ 47,244,997 Effect of Translation Adjustment (21,828,001 ) (19,914,206 ) Accumulated Amortization (24,306,379 ) (25,743,121 ) Net Balance $ 1,110,617 $ 1,587,670 Product Licenses Product licenses include internally developed original license issues, renewals, enhancements, copyrights, trademarks, and trade names. Product licenses are amortized on a straight-line basis over their respective lives, and the unamortized amount of $ 1,110,617 322,820 440,284 |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 3 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 14 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following: SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES As of As of September 30, 2022 June 30, 2022 Accounts Payable $ 1,192,101 $ 1,175,527 Accrued Liabilities 3,559,319 3,507,415 Accrued Payroll 1,462,209 1,397,605 Accrued Payroll Taxes 143,409 153,416 Taxes Payable 398,392 328,755 Other Payable 274,097 250,823 Total $ 7,029,527 $ 6,813,541 NETSOL TECHNOLOGIES, INC. Notes to Condensed Consolidated Financial Statements September 30, 2022 (Unaudited) |
DEBTS
DEBTS | 3 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
DEBTS | NOTE 15 – DEBTS Notes payable and finance leases consisted of the following: SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES As of September 30, 2022 Current Long-Term Name Total Maturities Maturities D&O Insurance (1) $ 34,344 $ 34,344 $ - Bank Overdraft Facility (2) - - - Term Finance Facility (3) 190,425 190,425 - Loan Payable Bank - Export Refinance (4) 2,192,694 2,192,694 - Loan Payable Bank - Running Finance (5) - - - Loan Payable Bank - Export Refinance II (6) 1,666,447 1,666,447 - Loan Payable Bank - Export Refinance III (7) 3,069,772 3,069,772 - Sale and Leaseback Financing (8) 407,166 144,372 262,794 Term Finance Facility (9) 24,348 16,966 7,382 Insurance Financing (10) 79,234 79,234 - 7,664,430 7,394,254 270,176 Subsidiary Finance Leases (11) 54,998 32,718 22,280 $ 7,719,428 $ 7,426,972 $ 292,456 As of June 30, 2022 Current Long-Term Name Total Maturities Maturities D&O Insurance (1) $ 89,552 $ 89,552 $ - Bank Overdraft Facility (2) - - - Term Finance Facility (3) 423,101 423,101 - Loan Payable Bank - Export Refinance (4) 2,434,749 2,434,749 - Loan Payable Bank - Running Finance (5) - - - Loan Payable Bank - Export Refinance II (6) 1,850,409 1,850,409 - Loan Payable Bank - Export Refinance III (7) 3,408,648 3,408,648 - Sale and Leaseback Financing (8) 619,108 189,226 429,882 Term Finance Facility (9) 31,204 18,339 12,865 Insurance Financing (10) 118,026 118,026 - 8,974,797 8,532,050 442,747 Subsidiary Finance Leases (11) 68,571 35,095 33,476 $ 9,043,368 $ 8,567,145 $ 476,223 (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 5.0% 7.0% (2) The Company’s subsidiary, NTE, has an overdraft facility with HSBC Bank plc whereby the bank would cover any overdrafts up to £ 300,000 333,333 5.5% Ni 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% NETSOL TECHNOLOGIES, INC. Notes to Condensed Consolidated Financial Statements September 30, 2022 (Unaudited) (3) The Company’s subsidiary, NetSol PK, has a term finance facility from Askari Bank Limited, approved by the Government of Pakistan to protect the employment situation during the COVID-19 pandemic. This is a term loan payable in three years. The availed facility amount was Rs. 43,422,699 190,425 86,887,974 423,101 3% (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 nine months. The total facility amount is Rs. 500,000,000 2,192,694 500,000,000 2,434,749 10% 3% (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. 53,000,000 235,057 Nil 17.8% 14.0% This facility requires NetSol PK to maintain a long-term debt equity ratio of 60:40 and the current ratio of 1:1. As of September 30, 2022, NetSol PK was in compliance with this covenant. (6) 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 nine months. The total facility amount is Rs. 380,000,000 1,666,447 380,000,000 1,850,409 10% 3% 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, 2022, NetSol PK was in compliance with these covenants. (7) 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 nine months. The total facility amount is Rs. 900,000,000 3,946,849 900,000,000 4,382,548 700,000,000 3,069,772 700,000,000 3,408,648 10% 3% (8) 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 September 30, 2022, NetSol PK used Rs. 92,846,015 407,166 262,794 144,372 127,140,038 619,108 429,882 189,226 9.0% 16.0% (9) In March 2019, the Company’s subsidiary, VLS, entered into a loan agreement. The loan amount was £ 69,549 77,277 1,349 1,499 24,348 7,382 16,966 31,204 12,865 18,339 6.14% (10) The Company’s subsidiary, VLS, finances Directors’ and Officers’ (“D&O”) liability insurance, and the $ 79,234 96,781 9.7% 12.7% (11) The Company leases various fixed assets under finance lease arrangements expiring in various years through 2025. 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, 2022 and 2021. NETSOL TECHNOLOGIES, INC. Notes to Condensed Consolidated Financial Statements September 30, 2022 (Unaudited) Following is the aggregate minimum future lease payments under finance leases as of September 30, 2022: SCHEDULE OF AGGREGATE MINIMUM FUTURE LEASE PAYMENTS UNDER CAPITAL LEASES Amount Minimum Lease Payments Within year 1 $ 37,312 Within year 2 22,390 Within year 3 1,058 Total Minimum Lease Payments 60,760 Interest Expense relating to future periods (5,762 ) Present Value of minimum lease payments 54,998 Less: Current portion (32,718 ) Current portion of loans and obligations under finance leases Non-Current portion $ 22,280 Loans and obligations under finance leases; less current maturities Following is the aggregate future long term debt payments as of September 30, 2022 SCHEDULE OF AGGREGATE FUTURE LONG TERM DEBT PAYMENTS Amount Loan Payments Within year 1 $ 351,765 Within year 2 164,169 Within year 3 106,005 Total Loan Payments 621,939 Less: Current portion (351,763 ) Non-Current portion $ 270,176 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 3 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 16 - STOCKHOLDERS’ EQUITY During the three months ended September 30, 2022, the Company issued 12,660 39,750 |
CONTINGENCIES
CONTINGENCIES | 3 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | NOTE 17 – CONTINGENCIES From time to time, the Company is subject to legal proceedings, claims, and litigation arising in the ordinary course of business including tax assessments. The Company defends itself vigorously against any such claims. When (i) it is probable that an asset has been impaired or a liability has been incurred and (ii) the amount of the loss can be reasonably estimated, the Company records the estimated loss. The Company provides disclosure in the notes to the consolidated financial statements for loss contingencies that do not meet both conditions if there is a reasonable possibility that a loss may have been incurred that would be material to the financial statements. Significant judgment is required to determine the probability that a liability has been incurred and whether such liability is reasonably estimable. The Company bases accruals on the best information available at the time, which can be highly subjective. The final outcome of these matters could vary significantly from the amounts included in the accompanying consolidated financial statements. |
OPERATING SEGMENTS
OPERATING SEGMENTS | 3 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
OPERATING SEGMENTS | NOTE 18 – OPERATING SEGMENTS The Company has identified three The following table presents a summary of identifiable assets as of September 30, 2022 and June 30, 2022: SUMMARY OF IDENTIFIABLE ASSETS As of As of September 30, 2022 June 30, 2022 Identifiable assets: Corporate headquarters $ 1,758,935 $ 844,178 North America 6,548,741 6,442,219 Europe 8,354,174 8,727,530 Asia - Pacific 49,783,782 56,594,705 Consolidated $ 66,445,632 $ 72,608,632 NETSOL TECHNOLOGIES, INC. Notes to Condensed Consolidated Financial Statements September 30, 2022 (Unaudited) The following table presents a summary of investment under equity method as of September 30, 2022 and June 30, 2022: SUMMARY OF INVESTMENT UNDER EQUITY METHOD As of As of September 30, 2022 June 30, 2022 Investment in associates under equity method: Corporate headquarters $ - $ - Asia - Pacific 1,059,368 1,059,368 Consolidated $ 1,059,368 $ 1,059,368 The following table presents a summary of operating information for the three months ended September 30: SUMMARY OF OPERATING INFORMATION For the Three Months Ended September 30, 2022 2021 Revenues from unaffiliated customers: North America $ 1,125,288 $ 930,234 Europe 2,247,335 3,272,899 Asia - Pacific 9,333,496 9,217,628 12,706,119 13,420,761 Revenue from affiliated customers Asia - Pacific - - - - Consolidated $ 12,706,119 $ 13,420,761 Intercompany revenue Europe $ 95,725 $ 127,198 Asia - Pacific 1,729,953 2,560,100 Eliminated $ 1,825,678 $ 2,687,298 Net income (loss) after taxes and before non-controlling interest: Corporate headquarters $ 1,327,200 $ 128,544 North America (18,947 ) (68,093 ) Europe (319,755 ) 191,443 Asia - Pacific (1,426,469 ) 298,601 Consolidated $ (437,971 ) $ 550,495 Depreciation and amortization: North America $ 482 $ 566 Europe 75,171 98,848 Asia - Pacific 769,350 880,592 Consolidated $ 845,003 $ 980,006 Interest expense: Corporate headquarters $ 2,480 $ 10,441 North America - - Europe 3,638 3,796 Asia - Pacific 115,492 86,776 Consolidated $ 121,610 $ 101,013 Income tax expense: Corporate headquarters $ - $ 800 North America - 1,600 Europe - - Asia - Pacific 193,348 165,227 Consolidated $ 193,348 $ 167,627 NETSOL TECHNOLOGIES, INC. Notes to Condensed Consolidated Financial Statements September 30, 2022 (Unaudited) The following table presents a summary of capital expenditures for the three months ended September 30: SUMMARY OF CAPITAL EXPENDITURES For the Three Months Ended September 30, 2022 2021 Capital expenditures: North America $ 1,133 $ - Europe - 54,380 Asia - Pacific 1,346,468 161,732 Consolidated $ 1,347,601 $ 216,112 |
NON-CONTROLLING INTEREST IN SUB
NON-CONTROLLING INTEREST IN SUBSIDIARY | 3 Months Ended |
Sep. 30, 2022 | |
Noncontrolling Interest [Abstract] | |
NON-CONTROLLING INTEREST IN SUBSIDIARY | NOTE 19 – NON-CONTROLLING INTEREST IN SUBSIDIARY The Company had non-controlling interests in several of its subsidiaries. The balance of non-controlling interest was as follows: SCHEDULE OF BALANCE OF NON-CONTROLLING INTEREST SUBSIDIARY Non-Controlling Interest % Non-Controlling Interest at NetSol PK 32.38 % $ 4,474,385 NetSol-Innovation 32.38 % (10,332 ) NetSol Thai 0.006 % (184 ) OTOZ Thai 10.95 % (19,803 ) OTOZ 10.94 % (164,953 ) Total $ 4,279,113 SUBSIDIARY Non-Controlling Interest % Non-Controlling Interest at NetSol PK 32.38 % $ 5,479,905 NetSol-Innovation 32.38 % 49,146 NetSol Thai 0.006 % (196 ) OTOZ Thai 5.60 % (30,768 ) OTOZ 5.59 % (47,698 ) Total $ 5,450,389 The Company’s subsidiary, OTOZ, issued 191,011 5.59% 10.94% 10.95% The following schedule discloses the effect to the Company’s equity due to the changes in the Company’s ownership interest in OTOZ and OTOZ Thai. SCHEDULE OF CHANGE IN OWNERSHIP INTEREST 1 2 For the Three Months Ended September 30, 2022 2021 Net income (loss) attributable to NetSol $ (620,729 ) $ 187,969 Transfer (to) from non-controlling interest Increase in paid-in capital for issuance of 191,011 120,565 - Net transfer (to) from non-controlling interest 120,565 - Change from net income (loss) attributable to NetSol and transfer (to) from non-controlling interest $ (500,164 ) $ 187,969 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 20 – INCOME TAXES The current tax provision is based on taxable income for the year determined in accordance with the prevailing law for taxation of income. The charge for tax on income is calculated at the current rates of taxation as applicable after considering tax credit and tax rebates available, if any. We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Our effective tax rate is lower than the U.S. statutory rate primarily because of more earnings realized in countries that have lower statutory tax rates. Our effective tax rate in the future will depend on the portion of our profits earned within and outside the United States. Income from the export of computer software and its related services developed in Pakistan is exempt from tax through June 30, 2025; however, tax at the applicable rates is charged to the income from revenue generated from other than core business activities. During the three months ended September 30, 2022 and 2021, the Company recorded an income tax provision of $ 193,348 167,627 |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The areas requiring significant estimates are provision for doubtful accounts, provision for taxation, useful life of depreciable assets, useful life of intangible assets, contingencies, assumptions used to determine the net present value of operating lease liabilities, and estimated contract costs. The estimates and underlying assumptions are reviewed on an ongoing basis. Actual results could differ from those estimates. NETSOL TECHNOLOGIES, INC. Notes to Condensed Consolidated Financial Statements September 30, 2022 (Unaudited) |
Concentration of Credit Risk | Concentration of Credit Risk Cash includes cash on hand and demand deposits in accounts maintained within the United States as well as in foreign countries. Certain financial instruments, which subject the Company to concentration of credit risk, consist of cash and restricted cash. The Company maintains balances at financial institutions which, from time to time, may exceed Federal Deposit Insurance Corporation insured limits for the banks located in the United States. Balances at financial institutions within certain foreign countries are not covered by insurance except balances maintained in China are insured for RMB 500,000 70,323 85,000 94,444 18,393,548 22,758,963 The Company’s operations are carried out globally. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments of each country and by the general state of the country’s economy. The Company’s operations in each foreign country are subject to specific considerations and significant risks not typically associated with companies in economically developed nations. These include risks associated with, among others, the political, economic and legal environments and foreign currency exchange. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company applies the provisions of Accounting Standards Codification (“ASC”) 820-10, “Fair Value Measurements and Disclosures.” The three levels of valuation hierarchy are defined as follows: Level 1: Valuations consist of unadjusted quoted prices in active markets for identical assets and liabilities and has the highest priority. Level 2: Valuations rely on quoted prices in markets that are not active or observable inputs over the full term of the asset or liability. Level 3: Valuations are based on prices or third party or internal valuation models that require inputs that are significant to the fair value measurement and are less observable and thus have the lowest priority. The Company’s financial assets that were measured at fair value on a recurring basis as of September 30, 2022, were as follows: SCHEDULE OF FAIR VALUE OF FINANCIAL ASSETS MEASURED ON RECURRING BASIS Level 1 Level 2 Level 3 Total Assets Revenues in excess of billings - long term $ - $ - $ 714,458 $ 714,458 Total $ - $ - $ 714,458 $ 714,458 The Company’s financial assets that were measured at fair value on a recurring basis as of June 30, 2022, were as follows: Level 1 Level 2 Level 3 Total Assets Revenues in excess of billings - long term $ - $ - $ 853,601 $ 853,601 Total $ - $ - $ 853,601 $ 853,601 NETSOL TECHNOLOGIES, INC. Notes to Condensed Consolidated Financial Statements September 30, 2022 (Unaudited) The reconciliation from June 30, 2022 to September 30, 2022 is as follows: SCHEDULE OF FAIR VALUE OF FINANCIAL INSTRUMENTS RECONCILIATION Revenues in excess of billings - long term Fair value discount Total Balance at June 30, 2022 $ 881,940 $ (28,339 ) $ 853,601 Amortization during the period - 9,369 9,369 Transfers to short term (93,245 ) - (93,245 ) Effect of Translation Adjustment (55,581 ) 314 (55,267 ) Balance at September 30, 2022 $ 733,114 $ (18,656 ) $ 714,458 Management analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity” “Derivatives and Hedging.” |
Recent Accounting Standards: | Recent Accounting Standards: In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock and results in fewer instruments with embedded conversion features being separately recognized from the host contract as compared with current standards. Those instruments that do not have a separately recognized embedded conversion feature will no longer recognize a debt issuance discount related to such a conversion feature and would recognize less interest expense on a periodic basis. Additionally, the ASU amends the calculation of the share dilution impact related to a conversion feature and eliminates the treasury method as an option. For instruments that do not have a component mandatorily settled in cash, the change will likely result in a higher amount of share dilution in the calculation of earnings per share. This ASU is effective for fiscal years (and interim periods within those fiscal years) beginning after December 15, 2021, which for the Company is the first quarter of fiscal 2023. The adoption of ASU No. 2020-06 did not have a material impact on the Company’s financial condition, results of operations or disclosures. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, as if the acquirer had originated the contracts. ASU 2021-08 is effective for annual periods beginning after December 15, 2022, and interim periods within those years, with early adoption permitted. The Company does not expect the standard to have a material effect on its consolidated financial statements. All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable. |
ACCOUNTING POLICIES (Tables)
ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
SCHEDULE OF FAIR VALUE OF FINANCIAL ASSETS MEASURED ON RECURRING BASIS | The Company’s financial assets that were measured at fair value on a recurring basis as of September 30, 2022, were as follows: SCHEDULE OF FAIR VALUE OF FINANCIAL ASSETS MEASURED ON RECURRING BASIS Level 1 Level 2 Level 3 Total Assets Revenues in excess of billings - long term $ - $ - $ 714,458 $ 714,458 Total $ - $ - $ 714,458 $ 714,458 The Company’s financial assets that were measured at fair value on a recurring basis as of June 30, 2022, were as follows: Level 1 Level 2 Level 3 Total Assets Revenues in excess of billings - long term $ - $ - $ 853,601 $ 853,601 Total $ - $ - $ 853,601 $ 853,601 |
SCHEDULE OF FAIR VALUE OF FINANCIAL INSTRUMENTS RECONCILIATION | The reconciliation from June 30, 2022 to September 30, 2022 is as follows: SCHEDULE OF FAIR VALUE OF FINANCIAL INSTRUMENTS RECONCILIATION Revenues in excess of billings - long term Fair value discount Total Balance at June 30, 2022 $ 881,940 $ (28,339 ) $ 853,601 Amortization during the period - 9,369 9,369 Transfers to short term (93,245 ) - (93,245 ) Effect of Translation Adjustment (55,581 ) 314 (55,267 ) Balance at September 30, 2022 $ 733,114 $ (18,656 ) $ 714,458 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
SCHEDULE OF DISAGGREGATED REVENUE BY CATEGORY | The Company’s disaggregated revenue by category is as follows: SCHEDULE OF DISAGGREGATED REVENUE BY CATEGORY 1 2 For the Three Months Ended September 30, 2022 2021 Core: License $ 249,960 $ 10,716 Subscription and support 6,016,834 6,230,389 Services 5,421,366 5,856,279 Total core revenue, net 11,688,160 12,097,384 Non-Core: Services 1,017,959 1,323,377 Total non-core revenue, net 1,017,959 1,323,377 Total net revenue $ 12,706,119 $ 13,420,761 |
SCHEDULE OF REVENUES IN EXCESS OF BILLINGS AND DEFERRED REVENUE | The Company’s revenues in excess of billings and unearned revenue are as follows: SCHEDULE OF REVENUES IN EXCESS OF BILLINGS AND DEFERRED REVENUE 1 2 As of As of September 30, 2022 June 30, 2022 Revenues in excess of billings $ 14,061,982 $ 15,425,377 Unearned revenue $ 3,982,198 $ 4,901,562 |
CONVERTIBLE NOTES RECEIVABLE _2
CONVERTIBLE NOTES RECEIVABLE – RELATED PARTY (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
SCHEDULE OF CONVERTIBLE NOTES | The following table summarizes the convertible notes receivable from WRLD3D. SCHEDULE OF CONVERTIBLE NOTES Convertible Agreement Interest Maturity Note Accrued Date Rate Date Amount Interest May 25, 2017 5 % March 2, 2018 $ 750,000 $ 110,202 February 9, 2018 10 % March 31, 2019 2,500,000 500,773 April 1, 2019 10 % March 31, 2020 600,000 57,648 August 19, 2019 10 % March 31, 2020 400,000 32,439 4,250,000 701,062 Less allowance for doubtful account (4,250,000 ) (701,062 ) Net Balance $ - $ - |
OTHER CURRENT ASSETS (Tables)
OTHER CURRENT ASSETS (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
SCHEDULE OF OTHER CURRENT ASSETS | Other current assets consisted of the following: SCHEDULE OF OTHER CURRENT ASSETS As of As of September 30, 2022 June 30, 2022 Prepaid Expenses $ 1,356,902 $ 1,389,370 Advance Income Tax 199,320 202,783 Employee Advances 90,550 87,627 Security Deposits 331,301 236,909 Other Receivables 61,614 21,581 Other Assets 440,728 285,091 Due From Related Party 1,243,633 1,243,633 Total 3,724,048 3,466,994 Less allowance for doubtful account (1,243,633 ) (1,243,633 ) Net Balance $ 2,480,415 $ 2,223,361 |
REVENUES IN EXCESS OF BILLING_2
REVENUES IN EXCESS OF BILLINGS – LONG TERM (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Contractors [Abstract] | |
SCHEDULE OF REVENUE IN EXCESS OF BILLING | Revenues in excess of billings, net consisted of the following: SCHEDULE OF REVENUE IN EXCESS OF BILLING As of As of September 30, 2022 June 30, 2022 Revenues in excess of billings - long term $ 733,114 $ 881,940 Present value discount (18,656 ) (28,339 ) Net Balance $ 714,458 $ 853,601 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | Property and equipment consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT As of As of September 30, 2022 June 30, 2022 Office Furniture and Equipment $ 2,792,403 $ 3,021,586 Computer Equipment 11,147,529 11,388,856 Assets Under Capital Leases 58,616 305,081 Building 4,357,506 4,818,650 Land 1,114,891 1,237,965 Autos 2,411,407 2,503,990 Improvements 215,538 175,560 Subtotal 22,097,890 23,451,688 Accumulated Depreciation (13,247,239 ) (14,069,064 ) Property and Equipment, Net $ 8,850,651 $ 9,382,624 |
SUMMARY OF FIXED ASSETS HELD UNDER CAPITAL LEASES | Following is a summary of fixed assets held under finance leases as of September 30, 2022 and June 30, 2022: SUMMARY OF FIXED ASSETS HELD UNDER CAPITAL LEASES As of As of September 30, 2022 June 30, 2022 Vehicles $ 58,616 $ 305,081 Total 58,616 305,081 Less: Accumulated Depreciation - Net (13,073 ) (145,658 ) Fixed assets held under finance leases, Total $ 45,543 $ 159,423 |
SCHEDULE OF FINANCE LEASE TERM | Finance lease term and discount rate were as follows: SCHEDULE OF FINANCE LEASE TERM As of As of September 30, 2022 June 30, 2022 Weighted average remaining lease term - Finance leases 2.55 2.39 Weighted average discount rate - Finance leases 16.0 % 12.5 % |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Leases | |
SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO LEASE | Supplemental balance sheet information related to leases was as follows: SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO LEASE As of As of September 30, 2022 June 30, 2022 Assets Operating lease assets, net $ 1,336,742 $ 969,163 Liabilities Current Operating $ 531,021 $ 548,678 Operating, Current $ 531,021 $ 548,678 Non-current Operating 836,891 447,260 Operating, Non-current 836,891 447,260 Total Lease Liabilities $ 1,367,912 $ 995,938 |
SCHEDULE OF COMPONENTS OF LEASE COST | The components of lease cost were as follows: SCHEDULE OF COMPONENTS OF LEASE COST 1 2 For the Three Months Ended September 30, 2022 2021 Amortization of finance lease assets $ 2,896 $ 21,033 Interest on finance lease obligation 1,807 4,936 Operating lease cost 118,522 282,951 Short term lease cost 66,636 - Sub lease income (7,812 ) (9,155 ) Total lease cost $ 182,049 $ 299,765 |
SCHEDULE OF LEASE TERM AND DISCOUNT RATE | Lease term and discount rate were as follows: SCHEDULE OF LEASE TERM AND DISCOUNT RATE As of As of September 30, 2022 June 30, 2022 Weighted average remaining lease term - Operating leases 3.32 3.34 Weighted average discount rate - Operating leases 3.9 % 4.2 % |
SCHEDULE OF SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION RELATED TO LEASES | Supplemental disclosures of cash flow information related to leases were as follows: SCHEDULE OF SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION RELATED TO LEASES 1 2 For the Three Months Ended September 30 2022 2021 Operating cash flows related to operating leases $ 122,121 $ 272,478 Operating cash flows related to finance leases $ 1,807 $ 3,502 Financing cash flows related finance leases $ 3,679 $ 48,908 |
SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES | Maturities of operating lease liabilities were as follows as of September 30, 2022: SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES Amount Within year 1 $ 569,691 Within year 2 381,217 Within year 3 323,713 Within year 4 138,102 Within year 5 28,237 Thereafter 1,013 Total Lease Payments 1,441,973 Less: Imputed interest (74,061 ) Present Value of lease liabilities 1,367,912 Less: Current portion (531,021 ) Non-Current portion $ 836,891 |
LONG TERM INVESTMENT (Tables)
LONG TERM INVESTMENT (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Investments, All Other Investments [Abstract] | |
SCHEDULE OF LONG TERM INVESTMENT | The following table reflects the above investments at September 30, 2022. SCHEDULE OF LONG TERM INVESTMENT Drivemate WRLD3D Total Gross investment $ 1,800,000 $ 3,888,889 $ 5,688,889 Cumulative net loss on investment (740,632 ) (3,238,647 ) (3,979,279 ) Cumulative other comprehensive income (loss) - (650,242 ) (650,242 ) Net investment $ 1,059,368 $ - $ 1,059,368 NETSOL TECHNOLOGIES, INC. Notes to Condensed Consolidated Financial Statements September 30, 2022 (Unaudited) The following table reflects the above investments at June 30, 2022. Drivemate WRLD3D Total Gross investment $ 1,800,000 $ 3,888,889 $ 5,688,889 Cumulative net loss on investment (740,632 ) (3,238,647 ) (3,979,279 ) Cumulative other comprehensive income (loss) - (650,242 ) (650,242 ) Net investment $ 1,059,368 $ - $ 1,059,368 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF INTANGIBLE ASSETS | Intangible assets consisted of the following: SCHEDULE OF INTANGIBLE ASSETS As of As of September 30, 2022 June 30, 2022 Product Licenses - Cost $ 47,244,997 $ 47,244,997 Effect of Translation Adjustment (21,828,001 ) (19,914,206 ) Accumulated Amortization (24,306,379 ) (25,743,121 ) Net Balance $ 1,110,617 $ 1,587,670 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES | Accounts payable and accrued expenses consisted of the following: SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES As of As of September 30, 2022 June 30, 2022 Accounts Payable $ 1,192,101 $ 1,175,527 Accrued Liabilities 3,559,319 3,507,415 Accrued Payroll 1,462,209 1,397,605 Accrued Payroll Taxes 143,409 153,416 Taxes Payable 398,392 328,755 Other Payable 274,097 250,823 Total $ 7,029,527 $ 6,813,541 |
DEBTS (Tables)
DEBTS (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES | Notes payable and finance leases consisted of the following: SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES As of September 30, 2022 Current Long-Term Name Total Maturities Maturities D&O Insurance (1) $ 34,344 $ 34,344 $ - Bank Overdraft Facility (2) - - - Term Finance Facility (3) 190,425 190,425 - Loan Payable Bank - Export Refinance (4) 2,192,694 2,192,694 - Loan Payable Bank - Running Finance (5) - - - Loan Payable Bank - Export Refinance II (6) 1,666,447 1,666,447 - Loan Payable Bank - Export Refinance III (7) 3,069,772 3,069,772 - Sale and Leaseback Financing (8) 407,166 144,372 262,794 Term Finance Facility (9) 24,348 16,966 7,382 Insurance Financing (10) 79,234 79,234 - 7,664,430 7,394,254 270,176 Subsidiary Finance Leases (11) 54,998 32,718 22,280 $ 7,719,428 $ 7,426,972 $ 292,456 As of June 30, 2022 Current Long-Term Name Total Maturities Maturities D&O Insurance (1) $ 89,552 $ 89,552 $ - Bank Overdraft Facility (2) - - - Term Finance Facility (3) 423,101 423,101 - Loan Payable Bank - Export Refinance (4) 2,434,749 2,434,749 - Loan Payable Bank - Running Finance (5) - - - Loan Payable Bank - Export Refinance II (6) 1,850,409 1,850,409 - Loan Payable Bank - Export Refinance III (7) 3,408,648 3,408,648 - Sale and Leaseback Financing (8) 619,108 189,226 429,882 Term Finance Facility (9) 31,204 18,339 12,865 Insurance Financing (10) 118,026 118,026 - 8,974,797 8,532,050 442,747 Subsidiary Finance Leases (11) 68,571 35,095 33,476 $ 9,043,368 $ 8,567,145 $ 476,223 (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 5.0% 7.0% (2) The Company’s subsidiary, NTE, has an overdraft facility with HSBC Bank plc whereby the bank would cover any overdrafts up to £ 300,000 333,333 5.5% Ni 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% NETSOL TECHNOLOGIES, INC. Notes to Condensed Consolidated Financial Statements September 30, 2022 (Unaudited) (3) The Company’s subsidiary, NetSol PK, has a term finance facility from Askari Bank Limited, approved by the Government of Pakistan to protect the employment situation during the COVID-19 pandemic. This is a term loan payable in three years. The availed facility amount was Rs. 43,422,699 190,425 86,887,974 423,101 3% (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 nine months. The total facility amount is Rs. 500,000,000 2,192,694 500,000,000 2,434,749 10% 3% (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. 53,000,000 235,057 Nil 17.8% 14.0% This facility requires NetSol PK to maintain a long-term debt equity ratio of 60:40 and the current ratio of 1:1. As of September 30, 2022, NetSol PK was in compliance with this covenant. (6) 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 nine months. The total facility amount is Rs. 380,000,000 1,666,447 380,000,000 1,850,409 10% 3% 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, 2022, NetSol PK was in compliance with these covenants. (7) 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 nine months. The total facility amount is Rs. 900,000,000 3,946,849 900,000,000 4,382,548 700,000,000 3,069,772 700,000,000 3,408,648 10% 3% (8) 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 September 30, 2022, NetSol PK used Rs. 92,846,015 407,166 262,794 144,372 127,140,038 619,108 429,882 189,226 9.0% 16.0% (9) In March 2019, the Company’s subsidiary, VLS, entered into a loan agreement. The loan amount was £ 69,549 77,277 1,349 1,499 24,348 7,382 16,966 31,204 12,865 18,339 6.14% (10) The Company’s subsidiary, VLS, finances Directors’ and Officers’ (“D&O”) liability insurance, and the $ 79,234 96,781 9.7% 12.7% (11) The Company leases various fixed assets under finance lease arrangements expiring in various years through 2025. 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, 2022 and 2021. |
SCHEDULE OF AGGREGATE MINIMUM FUTURE LEASE PAYMENTS UNDER CAPITAL LEASES | Following is the aggregate minimum future lease payments under finance leases as of September 30, 2022: SCHEDULE OF AGGREGATE MINIMUM FUTURE LEASE PAYMENTS UNDER CAPITAL LEASES Amount Minimum Lease Payments Within year 1 $ 37,312 Within year 2 22,390 Within year 3 1,058 Total Minimum Lease Payments 60,760 Interest Expense relating to future periods (5,762 ) Present Value of minimum lease payments 54,998 Less: Current portion (32,718 ) Current portion of loans and obligations under finance leases Non-Current portion $ 22,280 Loans and obligations under finance leases; less current maturities |
SCHEDULE OF AGGREGATE FUTURE LONG TERM DEBT PAYMENTS | Following is the aggregate future long term debt payments as of September 30, 2022 SCHEDULE OF AGGREGATE FUTURE LONG TERM DEBT PAYMENTS Amount Loan Payments Within year 1 $ 351,765 Within year 2 164,169 Within year 3 106,005 Total Loan Payments 621,939 Less: Current portion (351,763 ) Non-Current portion $ 270,176 |
OPERATING SEGMENTS (Tables)
OPERATING SEGMENTS (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
SUMMARY OF IDENTIFIABLE ASSETS | The following table presents a summary of identifiable assets as of September 30, 2022 and June 30, 2022: SUMMARY OF IDENTIFIABLE ASSETS As of As of September 30, 2022 June 30, 2022 Identifiable assets: Corporate headquarters $ 1,758,935 $ 844,178 North America 6,548,741 6,442,219 Europe 8,354,174 8,727,530 Asia - Pacific 49,783,782 56,594,705 Consolidated $ 66,445,632 $ 72,608,632 |
SUMMARY OF INVESTMENT UNDER EQUITY METHOD | The following table presents a summary of investment under equity method as of September 30, 2022 and June 30, 2022: SUMMARY OF INVESTMENT UNDER EQUITY METHOD As of As of September 30, 2022 June 30, 2022 Investment in associates under equity method: Corporate headquarters $ - $ - Asia - Pacific 1,059,368 1,059,368 Consolidated $ 1,059,368 $ 1,059,368 |
SUMMARY OF OPERATING INFORMATION | The following table presents a summary of operating information for the three months ended September 30: SUMMARY OF OPERATING INFORMATION For the Three Months Ended September 30, 2022 2021 Revenues from unaffiliated customers: North America $ 1,125,288 $ 930,234 Europe 2,247,335 3,272,899 Asia - Pacific 9,333,496 9,217,628 12,706,119 13,420,761 Revenue from affiliated customers Asia - Pacific - - - - Consolidated $ 12,706,119 $ 13,420,761 Intercompany revenue Europe $ 95,725 $ 127,198 Asia - Pacific 1,729,953 2,560,100 Eliminated $ 1,825,678 $ 2,687,298 Net income (loss) after taxes and before non-controlling interest: Corporate headquarters $ 1,327,200 $ 128,544 North America (18,947 ) (68,093 ) Europe (319,755 ) 191,443 Asia - Pacific (1,426,469 ) 298,601 Consolidated $ (437,971 ) $ 550,495 Depreciation and amortization: North America $ 482 $ 566 Europe 75,171 98,848 Asia - Pacific 769,350 880,592 Consolidated $ 845,003 $ 980,006 Interest expense: Corporate headquarters $ 2,480 $ 10,441 North America - - Europe 3,638 3,796 Asia - Pacific 115,492 86,776 Consolidated $ 121,610 $ 101,013 Income tax expense: Corporate headquarters $ - $ 800 North America - 1,600 Europe - - Asia - Pacific 193,348 165,227 Consolidated $ 193,348 $ 167,627 |
SUMMARY OF CAPITAL EXPENDITURES | The following table presents a summary of capital expenditures for the three months ended September 30: SUMMARY OF CAPITAL EXPENDITURES For the Three Months Ended September 30, 2022 2021 Capital expenditures: North America $ 1,133 $ - Europe - 54,380 Asia - Pacific 1,346,468 161,732 Consolidated $ 1,347,601 $ 216,112 |
NON-CONTROLLING INTEREST IN S_2
NON-CONTROLLING INTEREST IN SUBSIDIARY (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Noncontrolling Interest [Abstract] | |
SCHEDULE OF BALANCE OF NON-CONTROLLING INTEREST | The Company had non-controlling interests in several of its subsidiaries. The balance of non-controlling interest was as follows: SCHEDULE OF BALANCE OF NON-CONTROLLING INTEREST SUBSIDIARY Non-Controlling Interest % Non-Controlling Interest at NetSol PK 32.38 % $ 4,474,385 NetSol-Innovation 32.38 % (10,332 ) NetSol Thai 0.006 % (184 ) OTOZ Thai 10.95 % (19,803 ) OTOZ 10.94 % (164,953 ) Total $ 4,279,113 SUBSIDIARY Non-Controlling Interest % Non-Controlling Interest at NetSol PK 32.38 % $ 5,479,905 NetSol-Innovation 32.38 % 49,146 NetSol Thai 0.006 % (196 ) OTOZ Thai 5.60 % (30,768 ) OTOZ 5.59 % (47,698 ) Total $ 5,450,389 |
SCHEDULE OF CHANGE IN OWNERSHIP INTEREST | SCHEDULE OF CHANGE IN OWNERSHIP INTEREST 1 2 For the Three Months Ended September 30, 2022 2021 Net income (loss) attributable to NetSol $ (620,729 ) $ 187,969 Transfer (to) from non-controlling interest Increase in paid-in capital for issuance of 191,011 120,565 - Net transfer (to) from non-controlling interest 120,565 - Change from net income (loss) attributable to NetSol and transfer (to) from non-controlling interest $ (500,164 ) $ 187,969 |
SCHEDULE OF FAIR VALUE OF FINAN
SCHEDULE OF FAIR VALUE OF FINANCIAL ASSETS MEASURED ON RECURRING BASIS (Details) - USD ($) | Sep. 30, 2022 | Jun. 30, 2022 |
Defined Benefit Plan Disclosure [Line Items] | ||
Revenues in excess of billings - long term | $ 714,458 | $ 853,601 |
Total | 714,458 | 853,601 |
Fair Value, Inputs, Level 1 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Revenues in excess of billings - long term | ||
Total | ||
Fair Value, Inputs, Level 2 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Revenues in excess of billings - long term | ||
Total | ||
Fair Value, Inputs, Level 3 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Revenues in excess of billings - long term | 714,458 | 853,601 |
Total | $ 714,458 | $ 853,601 |
SCHEDULE OF FAIR VALUE OF FIN_2
SCHEDULE OF FAIR VALUE OF FINANCIAL INSTRUMENTS RECONCILIATION (Details) | 3 Months Ended |
Sep. 30, 2022 USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Beginning balance | $ 853,601 |
Amortization during the period | 9,369 |
Transfers to short term | (93,245) |
Effect of Translation Adjustment | (55,267) |
Ending balance | 714,458 |
Revenue in Excess of Billing Long Term [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Beginning balance | 881,940 |
Amortization during the period | |
Transfers to short term | (93,245) |
Effect of Translation Adjustment | (55,581) |
Ending balance | 733,114 |
Fair Value Discount [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Beginning balance | (28,339) |
Amortization during the period | 9,369 |
Transfers to short term | |
Effect of Translation Adjustment | 314 |
Ending balance | $ (18,656) |
ACCOUNTING POLICIES (Details Na
ACCOUNTING POLICIES (Details Narrative) | Sep. 30, 2022 USD ($) | Sep. 30, 2022 CNY (¥) | Sep. 30, 2022 GBP (£) | Jun. 30, 2022 USD ($) |
Uninsured deposits related to cash deposits | $ 18,393,548 | $ 22,758,963 | ||
CHINA | ||||
Cash, FDIC insured amount | 70,323 | ¥ 500,000 | ||
UNITED KINGDOM | ||||
Cash, FDIC insured amount | $ 94,444 | £ 85,000 |
SCHEDULE OF DISAGGREGATED REVEN
SCHEDULE OF DISAGGREGATED REVENUE BY CATEGORY (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total net revenue | $ 12,706,119 | $ 13,420,761 |
License [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenue | 249,960 | 10,716 |
Subscription And Support [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenue | 6,016,834 | 6,230,389 |
Service [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenue | 6,439,325 | 7,179,656 |
Core Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenue | 11,688,160 | 12,097,384 |
Core Revenue [Member] | License [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenue | 249,960 | 10,716 |
Core Revenue [Member] | Subscription And Support [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenue | 6,016,834 | 6,230,389 |
Core Revenue [Member] | Service [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenue | 5,421,366 | 5,856,279 |
Non Core Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenue | 1,017,959 | 1,323,377 |
Non Core Revenue [Member] | Service [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenue | $ 1,017,959 | $ 1,323,377 |
SCHEDULE OF REVENUES IN EXCESS
SCHEDULE OF REVENUES IN EXCESS OF BILLINGS AND DEFERRED REVENUE (Details) - USD ($) | Sep. 30, 2022 | Jun. 30, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Revenues in excess of billings | $ 14,061,982 | $ 15,425,377 |
Unearned revenue | $ 3,982,198 | $ 4,901,562 |
REVENUE RECOGNITION (Details Na
REVENUE RECOGNITION (Details Narrative) | 3 Months Ended |
Sep. 30, 2022 USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Deferred revenue, revenue recognized | $ 2,108,715 |
Contracted but unsatisfied performance obligations | 38,252,000 |
Contracted but unsatisfied performance obligations, next twelve months | $ 15,400,000 |
Estimated revenue recognized term | 5 years |
OTHER COMPREHENSIVE INCOME AN_2
OTHER COMPREHENSIVE INCOME AND FOREIGN CURRENCY (Details Narrative) - USD ($) | 3 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | |
Other Comprehensive Income And Foreign Currency | |||
Accumulated other comprehensive loss | $ 42,281,135 | $ 39,363,085 | |
Net translation adjustment | $ 2,918,050 | $ 2,145,405 |
MAJOR CUSTOMERS (Details Narrat
MAJOR CUSTOMERS (Details Narrative) - USD ($) | 3 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | |
Concentration Risk [Line Items] | |||
Revenue | $ 12,706,119 | $ 13,420,761 | |
Revenues in excess of billings | 13,347,524 | $ 14,571,776 | |
Daimler Financial Services [Member] | |||
Concentration Risk [Line Items] | |||
Revenues in excess of billings | 1,804,728 | 365,863 | |
BMW Financial (BMW) [Member] | |||
Concentration Risk [Line Items] | |||
Revenues in excess of billings | $ 2,533,172 | 2,199,381 | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Daimler Financial Services [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 28.30% | 26.40% | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | BMW Financial (BMW) [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 11.60% | 6.60% | |
Accounts Receivable [Member] | Daimler Financial Services [Member] | |||
Concentration Risk [Line Items] | |||
Accounts receivable, gross | $ 600,925 | 2,005,463 | |
Accounts Receivable [Member] | BMW Financial (BMW) [Member] | |||
Concentration Risk [Line Items] | |||
Accounts receivable, gross | 132,392 | $ 2,498,645 | |
Daimler Financial Services [Member] | |||
Concentration Risk [Line Items] | |||
Revenue | 3,591,807 | $ 3,542,284 | |
BMW Financial (BMW) [Member] | |||
Concentration Risk [Line Items] | |||
Revenue | $ 1,469,147 | $ 891,679 |
SCHEDULE OF CONVERTIBLE NOTES (
SCHEDULE OF CONVERTIBLE NOTES (Details) - USD ($) | Aug. 19, 2019 | Apr. 01, 2019 | Feb. 09, 2018 | May 25, 2017 | Sep. 30, 2022 | Jun. 30, 2022 |
Receivables [Abstract] | ||||||
Interest Rate | 10% | 10% | 10% | 5% | ||
Maturity Date | Mar. 31, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 02, 2018 | ||
Convertible Note Amount | $ 400,000 | $ 600,000 | $ 2,500,000 | $ 750,000 | $ 4,250,000 | |
Accrued Interest | $ 32,439 | $ 57,648 | $ 500,773 | $ 110,202 | 701,062 | $ 701,062 |
Less allowance for doubtful account | (4,250,000) | |||||
Less allowance for doubtful account, Accrued Interest | (701,062) | |||||
Net Balance | ||||||
Net Balance, Accrued Interest |
CONVERTIBLE NOTES RECEIVABLE _3
CONVERTIBLE NOTES RECEIVABLE – RELATED PARTY (Details Narrative) - USD ($) | Sep. 30, 2022 | Jun. 30, 2022 | Aug. 19, 2019 | Apr. 01, 2019 | Feb. 09, 2018 | May 25, 2017 |
Defined Benefit Plan Disclosure [Line Items] | ||||||
Convertible note, interest rate | 10% | 10% | 10% | 5% | ||
Accrued interest | $ 701,062 | $ 701,062 | $ 32,439 | $ 57,648 | $ 500,773 | $ 110,202 |
WRLD3D [Member] | Minimum [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Convertible note, interest rate | 5% | |||||
WRLD3D [Member] | Maximum [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Convertible note, interest rate | 10% |
SCHEDULE OF OTHER CURRENT ASSET
SCHEDULE OF OTHER CURRENT ASSETS (Details) - USD ($) | Sep. 30, 2022 | Jun. 30, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid Expenses | $ 1,356,902 | $ 1,389,370 |
Advance Income Tax | 199,320 | 202,783 |
Employee Advances | 90,550 | 87,627 |
Security Deposits | 331,301 | 236,909 |
Other Receivables | 61,614 | 21,581 |
Other Assets | 440,728 | 285,091 |
Due From Related Party | 1,243,633 | 1,243,633 |
Total | 3,724,048 | 3,466,994 |
Less allowance for doubtful account | (1,243,633) | (1,243,633) |
Net Balance | $ 2,480,415 | $ 2,223,361 |
OTHER CURRENT ASSETS (Details N
OTHER CURRENT ASSETS (Details Narrative) - USD ($) | Sep. 30, 2022 | Jun. 30, 2022 |
Defined Benefit Plan Disclosure [Line Items] | ||
Allowance for credit loss | $ 153,580 | $ 166,231 |
WRLD3D [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Allowance for credit loss | $ 0 |
SCHEDULE OF REVENUE IN EXCESS O
SCHEDULE OF REVENUE IN EXCESS OF BILLING (Details) - USD ($) | Sep. 30, 2022 | Jun. 30, 2022 |
Contractors [Abstract] | ||
Revenues in excess of billings - long term | $ 733,114 | $ 881,940 |
Present value discount | (18,656) | (28,339) |
Net Balance | $ 714,458 | $ 853,601 |
REVENUES IN EXCESS OF BILLING_3
REVENUES IN EXCESS OF BILLINGS – LONG TERM (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Construction Contractor, Receivable, after Year One, Interest Rate [Line Items] | ||
Interest income | $ 9,369 | $ 9,502 |
Minimum [Member] | ||
Construction Contractor, Receivable, after Year One, Interest Rate [Line Items] | ||
Interest rate discount | 4.65% | |
Maximum [Member] | ||
Construction Contractor, Receivable, after Year One, Interest Rate [Line Items] | ||
Interest rate discount | 6.25% |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) | Sep. 30, 2022 | Jun. 30, 2022 |
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 22,097,890 | $ 23,451,688 |
Accumulated Depreciation | (13,247,239) | (14,069,064) |
Property and Equipment, Net | 8,850,651 | 9,382,624 |
Office Furniture And Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 2,792,403 | 3,021,586 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 11,147,529 | 11,388,856 |
Assets Held under Capital Leases [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 58,616 | 305,081 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 4,357,506 | 4,818,650 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 1,114,891 | 1,237,965 |
Automobiles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 2,411,407 | 2,503,990 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 215,538 | $ 175,560 |
SUMMARY OF FIXED ASSETS HELD UN
SUMMARY OF FIXED ASSETS HELD UNDER CAPITAL LEASES (Details) - USD ($) | Sep. 30, 2022 | Jun. 30, 2022 |
Property, Plant and Equipment [Line Items] | ||
Total | $ 58,616 | $ 305,081 |
Less: Accumulated Depreciation - Net | (13,073) | (145,658) |
Fixed assets held under finance leases, Total | 45,543 | 159,423 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 58,616 | $ 305,081 |
SCHEDULE OF FINANCE LEASE TERM
SCHEDULE OF FINANCE LEASE TERM (Details) | Sep. 30, 2022 | Jun. 30, 2022 |
Property, Plant and Equipment [Abstract] | ||
Weighted average remaining lease term - Finance leases | 2 years 6 months 18 days | 2 years 4 months 20 days |
Weighted average discount rate - Finance leases | 16% | 12.50% |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 522,183 | $ 539,722 |
Depreciation reflected in cost of revenues | $ 331,229 | $ 325,451 |
SCHEDULE OF BALANCE SHEET INFOR
SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO LEASE (Details) - USD ($) | Sep. 30, 2022 | Jun. 30, 2022 |
Leases | ||
Operating lease assets, net | $ 1,336,742 | $ 969,163 |
Operating, Current | 531,021 | 548,678 |
Operating, Non-current | 836,891 | 447,260 |
Total Lease Liabilities | $ 1,367,912 | $ 995,938 |
SCHEDULE OF COMPONENTS OF LEASE
SCHEDULE OF COMPONENTS OF LEASE COST (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Leases | ||
Amortization of finance lease assets | $ 2,896 | $ 21,033 |
Interest on finance lease obligation | 1,807 | 4,936 |
Operating lease cost | 118,522 | 282,951 |
Short term lease cost | 66,636 | |
Sub lease income | (7,812) | (9,155) |
Total lease cost | $ 182,049 | $ 299,765 |
SCHEDULE OF LEASE TERM AND DISC
SCHEDULE OF LEASE TERM AND DISCOUNT RATE (Details) | Sep. 30, 2022 | Jun. 30, 2022 |
Leases | ||
Weighted average remaining lease term - Operating leases | 3 years 3 months 25 days | 3 years 4 months 2 days |
Weighted average discount rate - Operating leases | 3.90% | 4.20% |
SCHEDULE OF SUPPLEMENTAL DISCLO
SCHEDULE OF SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION RELATED TO LEASES (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Leases | ||
Operating cash flows related to operating leases | $ 122,121 | $ 272,478 |
Operating cash flows related to finance leases | 1,807 | 3,502 |
Financing cash flows related finance leases | $ 3,679 | $ 48,908 |
SCHEDULE OF MATURITIES OF OPERA
SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES (Details) - USD ($) | Sep. 30, 2022 | Jun. 30, 2022 |
Leases | ||
Within year 1 | $ 569,691 | |
Within year 2 | 381,217 | |
Within year 3 | 323,713 | |
Within year 4 | 138,102 | |
Within year 5 | 28,237 | |
Thereafter | 1,013 | |
Total Lease Payments | 1,441,973 | |
Less: Imputed interest | (74,061) | |
Present Value of lease liabilities | 1,367,912 | $ 995,938 |
Less: Current portion | (531,021) | (548,678) |
Non-Current portion | $ 836,891 | $ 447,260 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Lease Agreement [Member] | ||
Operating lease income | $ 7,812 | $ 9,155 |
Minimum [Member] | ||
Finance lease term | 1 year | |
Operating lease term | 1 year | |
Maximum [Member] | ||
Finance lease term | 10 years | |
Operating lease term | 10 years |
SCHEDULE OF LONG TERM INVESTMEN
SCHEDULE OF LONG TERM INVESTMENT (Details) - USD ($) | Sep. 30, 2022 | Jun. 30, 2022 |
Gross investment | $ 5,688,889 | $ 5,688,889 |
Cumulative net loss on investment | (3,979,279) | (3,979,279) |
Cumulative other comprehensive income (loss) | (650,242) | (650,242) |
Net investment | 1,059,368 | 1,059,368 |
Drive Mate [Member] | ||
Gross investment | 1,800,000 | 1,800,000 |
Cumulative net loss on investment | (740,632) | (740,632) |
Cumulative other comprehensive income (loss) | ||
Net investment | 1,059,368 | 1,059,368 |
WRLD 3D Inc [Member] | ||
Gross investment | 3,888,889 | 3,888,889 |
Cumulative net loss on investment | (3,238,647) | (3,238,647) |
Cumulative other comprehensive income (loss) | (650,242) | (650,242) |
Net investment |
LONG TERM INVESTMENT (Details N
LONG TERM INVESTMENT (Details Narrative) - USD ($) | 2 Months Ended | 3 Months Ended | ||||
Apr. 25, 2019 | Sep. 01, 2017 | Mar. 02, 2017 | Aug. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share of net income loss from equity investment | $ (160,965) | |||||
WRLD3D [Member] | ||||||
Payments for financial interest | $ 1,111,111 | |||||
Payments to acquire investment | $ 555,555 | $ 555,556 | ||||
WRLD3D [Member] | ||||||
Percentage of interest in subsidiary | 4.90% | |||||
Drivemate agreement [Member] | Drivemate co ltd [Member] | ||||||
Debt instrument, description | Pursuant to the agreement, the number of shares to be issued is adjusted as necessary to result in an equity ownership equal to 30% of the issued and outstanding shares at the final payment date. As of September 30, 2022, the Company has been issued 8,178 shares equal to 30% of Drivemate. Per the Drivemate Agreement, the Company appointed two directors to the Drivemate board. The Company determined that it met the significant influence criteria since two of the four directors are appointed by the Company and the Company owns 30% of Drivemate; therefore, the Company accounts for the investment using the equity method of accounting. | |||||
Share of net income loss from equity investment | $ 63,571 | |||||
Drivemate co ltd [Member] | Drivemate agreement [Member] | ||||||
Number of shares purchased | 5,469 | |||||
Number of shares purchased, value | $ 1,800,000 | |||||
Drivemate co ltd [Member] | Drivemate agreement [Member] | Service [Member] | ||||||
Number of shares purchased, value | 1,300,000 | |||||
Drivemate co ltd [Member] | Drivemate agreement [Member] | Service [Member] | Payment [Member] | ||||||
Number of shares purchased, value | 1,300,000 | |||||
Drivemate co ltd [Member] | Drivemate agreement [Member] | Cash [Member] | ||||||
Number of shares purchased, value | 500,000 | |||||
Drivemate co ltd [Member] | Drivemate agreement [Member] | Cash [Member] | Payment [Member] | ||||||
Number of shares purchased, value | $ 500,000 | |||||
NetSol PK [Member] | ||||||
Share of net income loss from equity investment | $ 97,394 | |||||
Payments to acquire investment | $ 2,777,778 | |||||
Purchase of investment, percentage | 12.20% | |||||
Drivemate agreement [Member] | Drivemate co ltd [Member] | ||||||
Equity interest, percentage | 30% |
SCHEDULE OF INTANGIBLE ASSETS (
SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($) | Sep. 30, 2022 | Jun. 30, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Product Licenses - Cost | $ 47,244,997 | $ 47,244,997 |
Effect of Translation Adjustment | (21,828,001) | (19,914,206) |
Accumulated Amortization | (24,306,379) | (25,743,121) |
Net Balance | $ 1,110,617 | $ 1,587,670 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | |
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, net | $ 1,110,617 | $ 1,587,670 | |
Product Licenses [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, net | 1,110,617 | ||
Amortization expenses of intangible assets | $ 322,820 | $ 440,284 |
SCHEDULE OF ACCOUNTS PAYABLE AN
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) | Sep. 30, 2022 | Jun. 30, 2022 |
Payables and Accruals [Abstract] | ||
Accounts Payable | $ 1,192,101 | $ 1,175,527 |
Accrued Liabilities | 3,559,319 | 3,507,415 |
Accrued Payroll | 1,462,209 | 1,397,605 |
Accrued Payroll Taxes | 143,409 | 153,416 |
Taxes Payable | 398,392 | 328,755 |
Other Payable | 274,097 | 250,823 |
Total | $ 7,029,527 | $ 6,813,541 |
SCHEDULE OF COMPONENTS OF NOTES
SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES (Details) - USD ($) | Sep. 30, 2022 | Jun. 30, 2022 | |
Debt Instrument [Line Items] | |||
Total | $ 7,664,430 | $ 8,974,797 | |
Current Maturities | 7,394,254 | 8,532,050 | |
Long-Term Maturities | 270,176 | 442,747 | |
Subsidiary Finance Leases, Total | [1] | 54,998 | 68,571 |
Subsidiary Finance Leases, Current Maturities | [1] | 32,718 | 35,095 |
Subsidiary Finance Leases, Long-Term Maturities | [1] | 22,280 | 33,476 |
Total | 7,719,428 | 9,043,368 | |
Current Maturities | 7,426,972 | 8,567,145 | |
Long-Term Maturities | 292,456 | 476,223 | |
D And O Insurance [Member] | |||
Debt Instrument [Line Items] | |||
Total | [2] | 34,344 | 89,552 |
Current Maturities | [2] | 34,344 | 89,552 |
Long-Term Maturities | [2] | ||
Bank Overdraft Facility [Member] | |||
Debt Instrument [Line Items] | |||
Total | [3] | ||
Current Maturities | [3] | ||
Long-Term Maturities | [3] | ||
Term Finance Facility [Member] | |||
Debt Instrument [Line Items] | |||
Total | [4] | 190,425 | 423,101 |
Current Maturities | [4] | 190,425 | 423,101 |
Long-Term Maturities | [4] | ||
Loan Payable Bank One [Member] | |||
Debt Instrument [Line Items] | |||
Total | [5] | 2,192,694 | 2,434,749 |
Current Maturities | [5] | 2,192,694 | 2,434,749 |
Long-Term Maturities | [5] | ||
Loan Payable Bank Two [Member] | |||
Debt Instrument [Line Items] | |||
Total | [6] | ||
Current Maturities | [6] | ||
Long-Term Maturities | [6] | ||
Loan Payable Bank Three [Member] | |||
Debt Instrument [Line Items] | |||
Total | [7] | 1,666,447 | 1,850,409 |
Current Maturities | [7] | 1,666,447 | 1,850,409 |
Long-Term Maturities | [7] | ||
Loan Payable Bank Four [Member] | |||
Debt Instrument [Line Items] | |||
Total | [8] | 3,069,772 | 3,408,648 |
Current Maturities | [8] | 3,069,772 | 3,408,648 |
Long-Term Maturities | [8] | ||
Sale and Lease Back Financing [Member] | |||
Debt Instrument [Line Items] | |||
Total | [9] | 407,166 | 619,108 |
Current Maturities | [9] | 144,372 | 189,226 |
Long-Term Maturities | [9] | 262,794 | 429,882 |
Term Finance Facility One [Member] | |||
Debt Instrument [Line Items] | |||
Total | [10] | 24,348 | 31,204 |
Current Maturities | [10] | 16,966 | 18,339 |
Long-Term Maturities | [10] | 7,382 | 12,865 |
Insurance Financing [Member] | |||
Debt Instrument [Line Items] | |||
Total | [11] | 79,234 | 118,026 |
Current Maturities | [11] | 79,234 | 118,026 |
Long-Term Maturities | [11] | ||
[1]The Company leases various fixed assets under finance lease arrangements expiring in various years through 2025. 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, 2022 and 2021.[2]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 5.0% 7.0% 300,000 333,333 5.5% Ni 43,422,699 190,425 86,887,974 423,101 3% 500,000,000 2,192,694 500,000,000 2,434,749 10% 3% 53,000,000 235,057 Nil 17.8% 14.0% 380,000,000 1,666,447 380,000,000 1,850,409 10% 3% 900,000,000 3,946,849 900,000,000 4,382,548 700,000,000 3,069,772 700,000,000 3,408,648 10% 3% 92,846,015 407,166 262,794 144,372 127,140,038 619,108 429,882 189,226 9.0% 16.0% 69,549 77,277 1,349 1,499 24,348 7,382 16,966 31,204 12,865 18,339 6.14% 79,234 96,781 9.7% 12.7% |
SCHEDULE OF COMPONENTS OF NOT_2
SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES (Details) (Parenthetical) | 3 Months Ended | ||||||||||||
Mar. 31, 2019 USD ($) | Mar. 31, 2019 GBP (£) | Sep. 30, 2022 USD ($) | Sep. 30, 2022 INR (₨) | Sep. 30, 2022 GBP (£) | Jun. 30, 2022 USD ($) | Jun. 30, 2022 INR (₨) | Jun. 30, 2022 GBP (£) | Aug. 19, 2019 | Apr. 01, 2019 | Mar. 31, 2019 GBP (£) | Feb. 09, 2018 | May 25, 2017 | |
Line of Credit Facility [Line Items] | |||||||||||||
Debt instrument, interest rate | 10% | 10% | 10% | 5% | |||||||||
Long term liabilities | $ 621,939 | ||||||||||||
Virtual Lease Services Limited [Member] | Loan Agreement [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Line of credit facility, maximum borrowing capacity | $ 24,348 | $ 31,204 | |||||||||||
Debt instrument, interest rate | 6.14% | 6.14% | 6.14% | 6.14% | 6.14% | 6.14% | |||||||
Line of credit | $ 77,277 | £ 69,549 | |||||||||||
Line of credit, current | $ 16,966 | $ 18,339 | |||||||||||
Line of credit monthly payments | $ 1,499 | £ 1,349 | |||||||||||
Long term liabilities | 7,382 | 12,865 | |||||||||||
Virtual Lease Services Limited [Member] | Insurance Financing [Member] | Directors and Officers [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Line of credit, current | 79,234 | 96,781 | |||||||||||
HSBC Bank [Member] | NetSol PK Asia - Pacific [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Line of credit facility, maximum borrowing capacity | $ 333,333 | £ 300,000 | |||||||||||
Debt instrument, interest rate | 5.50% | 5.50% | 5.50% | ||||||||||
Line of credit | £ | |||||||||||||
Commitment fee percentage | 200% | ||||||||||||
Askari Bank Limited [Member] | NetSol PK [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Line of credit facility, maximum borrowing capacity | $ 2,192,694 | ₨ 500,000,000 | $ 2,434,749 | ₨ 500,000,000 | |||||||||
Debt instrument, interest rate | 10% | 10% | 10% | 3% | 3% | 3% | |||||||
Askari Bank Limited [Member] | NetSol PK [Member] | Refinance Facility [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Line of credit facility, maximum borrowing capacity | $ 190,425 | ₨ 43,422,699 | $ 423,101 | ₨ 86,887,974 | |||||||||
Debt instrument, interest rate | 3% | 3% | 3% | 3% | 3% | 3% | |||||||
Askari Bank Limited [Member] | NetSol PK [Member] | Running Finance Facility [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Line of credit facility, maximum borrowing capacity | $ 235,057 | ₨ 53,000,000 | |||||||||||
Debt instrument, interest rate | 17.80% | 17.80% | 17.80% | 14% | 14% | 14% | |||||||
Line of credit | ₨ | |||||||||||||
Debt instrument covenant description | This facility requires NetSol PK to maintain a long-term debt equity ratio of 60:40 and the current ratio of 1:1. As of September 30, 2022, NetSol PK was in compliance with this covenant. | ||||||||||||
Samba Bank Limited [Member] | NetSol PK [Member] | Refinance Facility [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Line of credit facility, maximum borrowing capacity | $ 1,666,447 | ₨ 380,000,000 | $ 1,850,409 | ₨ 380,000,000 | |||||||||
Debt instrument, interest rate | 10% | 10% | 10% | 3% | 3% | 3% | |||||||
Debt instrument covenant description | 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, 2022, NetSol PK was in compliance with these covenants. | ||||||||||||
Habib Metro Bank Limited [Member] | Refinance Facility [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Line of credit facility, maximum borrowing capacity | $ 3,946,849 | ₨ 900,000,000 | $ 4,382,548 | ₨ 900,000,000 | |||||||||
Habib Metro Bank Limited [Member] | NetSol PK [Member] | Refinance Facility [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Line of credit facility, maximum borrowing capacity | $ 3,069,772 | ₨ 700,000,000 | $ 3,408,648 | ₨ 700,000,000 | |||||||||
Debt instrument, interest rate | 10% | 10% | 10% | 3% | 3% | 3% | |||||||
Habib Metro Bank Limited [Member] | NetSol PK [Member] | Sale and Lease Back Financing [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Line of credit facility, maximum borrowing capacity | $ 407,166 | ₨ 92,846,015 | $ 619,108 | ₨ 127,140,038 | |||||||||
Debt instrument, interest rate | 9% | 9% | 9% | 16% | 16% | 16% | |||||||
Line of credit, long term | $ 262,794 | $ 429,882 | |||||||||||
Line of credit, current | $ 144,372 | $ 189,226 | |||||||||||
Minimum [Member] | Virtual Lease Services Limited [Member] | Insurance Financing [Member] | Directors and Officers [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Debt instrument, interest rate | 9.70% | 9.70% | 9.70% | ||||||||||
Maximum [Member] | Virtual Lease Services Limited [Member] | Insurance Financing [Member] | Directors and Officers [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Debt instrument, interest rate | 12.70% | 12.70% | 12.70% | ||||||||||
Directors and Officers and Error and Omissions Liability Insurance [Member] | Minimum [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Line of credit facility interest rate | 5% | 5% | 5% | ||||||||||
Directors and Officers and Error and Omissions Liability Insurance [Member] | Maximum [Member] | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Line of credit facility interest rate | 7% | 7% | 7% |
SCHEDULE OF AGGREGATE MINIMUM F
SCHEDULE OF AGGREGATE MINIMUM FUTURE LEASE PAYMENTS UNDER CAPITAL LEASES (Details) | Sep. 30, 2022 USD ($) |
Debt Disclosure [Abstract] | |
Within year 1 | $ 37,312 |
Within year 2 | 22,390 |
Within year 3 | 1,058 |
Total Minimum Lease Payments | 60,760 |
Interest Expense relating to future periods | (5,762) |
Present Value of minimum lease payments | 54,998 |
Less: Current portion | $ (32,718) |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Current portion of loans and obligations under finance leases |
Non-Current portion | $ 22,280 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Loans and obligations under finance leases; less current maturities |
SCHEDULE OF AGGREGATE FUTURE LO
SCHEDULE OF AGGREGATE FUTURE LONG TERM DEBT PAYMENTS (Details) | Sep. 30, 2022 USD ($) |
Debt Disclosure [Abstract] | |
Within year 1 | $ 351,765 |
Within year 2 | 164,169 |
Within year 3 | 106,005 |
Total Loan Payments | 621,939 |
Less: Current portion | (351,763) |
Non-Current portion | $ 270,176 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Issuance of common stock value for services | $ 39,750 | $ 12,009 |
Board of Directors [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Issuance of common stock shares for services | 12,660 | |
Issuance of common stock value for services | $ 39,750 |
SUMMARY OF IDENTIFIABLE ASSETS
SUMMARY OF IDENTIFIABLE ASSETS (Details) - USD ($) | Sep. 30, 2022 | Jun. 30, 2022 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Identifiable assets | $ 66,445,632 | $ 72,608,632 |
Corporate Headquarters [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Identifiable assets | 1,758,935 | 844,178 |
North America [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Identifiable assets | 6,548,741 | 6,442,219 |
Europe [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Identifiable assets | 8,354,174 | 8,727,530 |
Asia Pacific [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Identifiable assets | $ 49,783,782 | $ 56,594,705 |
SUMMARY OF INVESTMENT UNDER EQU
SUMMARY OF INVESTMENT UNDER EQUITY METHOD (Details) - USD ($) | Sep. 30, 2022 | Jun. 30, 2022 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Equity method investments | $ 1,059,368 | $ 1,059,368 |
Corporate Headquarters [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Equity method investments | ||
Asia Pacific [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Equity method investments | $ 1,059,368 | $ 1,059,368 |
SUMMARY OF OPERATING INFORMATIO
SUMMARY OF OPERATING INFORMATION (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||
Total net revenues | $ 12,706,119 | $ 13,420,761 |
Net income (loss) after taxes and before non-controlling interest | (437,971) | 550,495 |
Depreciation and amortization | 845,003 | 980,006 |
Interest expense | 121,610 | 101,013 |
Income tax expense | 193,348 | 167,627 |
Intersegment Eliminations [Member] | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | 1,825,678 | 2,687,298 |
North America [Member] | ||
Segment Reporting Information [Line Items] | ||
Net income (loss) after taxes and before non-controlling interest | (18,947) | (68,093) |
Depreciation and amortization | 482 | 566 |
Interest expense | ||
Income tax expense | 1,600 | |
Europe [Member] | ||
Segment Reporting Information [Line Items] | ||
Net income (loss) after taxes and before non-controlling interest | (319,755) | 191,443 |
Depreciation and amortization | 75,171 | 98,848 |
Interest expense | 3,638 | 3,796 |
Income tax expense | ||
Europe [Member] | Intersegment Eliminations [Member] | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | 95,725 | 127,198 |
Asia Pacific [Member] | ||
Segment Reporting Information [Line Items] | ||
Net income (loss) after taxes and before non-controlling interest | (1,426,469) | 298,601 |
Depreciation and amortization | 769,350 | 880,592 |
Interest expense | 115,492 | 86,776 |
Income tax expense | 193,348 | 165,227 |
Asia Pacific [Member] | Intersegment Eliminations [Member] | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | 1,729,953 | 2,560,100 |
Corporate Headquaters [Member] | ||
Segment Reporting Information [Line Items] | ||
Net income (loss) after taxes and before non-controlling interest | 1,327,200 | 128,544 |
Interest expense | 2,480 | 10,441 |
Income tax expense | 800 | |
Unaffiliated Customers [Member] | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | 12,706,119 | 13,420,761 |
Unaffiliated Customers [Member] | North America [Member] | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | 1,125,288 | 930,234 |
Unaffiliated Customers [Member] | Europe [Member] | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | 2,247,335 | 3,272,899 |
Unaffiliated Customers [Member] | Asia Pacific [Member] | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | 9,333,496 | 9,217,628 |
Affiliated Customers [Member] | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | 12,706,119 | 13,420,761 |
Affiliated Customers [Member] | Asia Pacific [Member] | ||
Segment Reporting Information [Line Items] | ||
Total net revenues |
SUMMARY OF CAPITAL EXPENDITURES
SUMMARY OF CAPITAL EXPENDITURES (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Capital expenditures | $ 1,347,601 | $ 216,112 |
North America [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Capital expenditures | 1,133 | |
Europe [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Capital expenditures | 54,380 | |
Asia Pacific [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Capital expenditures | $ 1,346,468 | $ 161,732 |
OPERATING SEGMENTS (Details Nar
OPERATING SEGMENTS (Details Narrative) | 3 Months Ended |
Sep. 30, 2022 Segments | |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
SCHEDULE OF BALANCE OF NON-CONT
SCHEDULE OF BALANCE OF NON-CONTROLLING INTEREST (Details) - USD ($) | Sep. 30, 2022 | Jun. 30, 2022 |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Non-Controlling Interest | $ 4,279,113 | $ 5,450,389 |
NetSol PK [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Non-Controlling Interest, Percentage | 32.38% | 32.38% |
Non-Controlling Interest | $ 4,474,385 | $ 5,479,905 |
NetSol Innovation [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Non-Controlling Interest, Percentage | 32.38% | 32.38% |
Non-Controlling Interest | $ (10,332) | $ 49,146 |
NetSol Thai [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Non-Controlling Interest, Percentage | 0.006% | 0.006% |
Non-Controlling Interest | $ (184) | $ (196) |
OTOZ Thai [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Non-Controlling Interest, Percentage | 10.95% | 5.60% |
Non-Controlling Interest | $ (19,803) | $ (30,768) |
OTOZ [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Non-Controlling Interest, Percentage | 10.94% | 5.59% |
Non-Controlling Interest | $ (164,953) | $ (47,698) |
SCHEDULE OF CHANGE IN OWNERSHIP
SCHEDULE OF CHANGE IN OWNERSHIP INTEREST (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Net income (loss) attributable to NetSol | $ (620,729) | $ 187,969 |
Net transfer (to) from non-controlling interest | (182,758) | (362,526) |
OTOZ And OTOZ Thai [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Net income (loss) attributable to NetSol | (620,729) | 187,969 |
Increase in paid-in capital for issuance of 191,011 shares of OTOZ Inc. common stock | 120,565 | |
Net transfer (to) from non-controlling interest | 120,565 | |
Change from net income (loss) attributable to NetSol and transfer (to) from non-controlling interest | $ (500,164) | $ 187,969 |
SCHEDULE OF CHANGE IN OWNERSH_2
SCHEDULE OF CHANGE IN OWNERSHIP INTEREST (Details) (Paranthetical) | 3 Months Ended |
Sep. 30, 2022 shares | |
OTOZ [Member] | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Number of shares purchased, Shares | 191,011 |
NON-CONTROLLING INTEREST IN S_3
NON-CONTROLLING INTEREST IN SUBSIDIARY (Details Narrative) - shares | 3 Months Ended | |
Sep. 30, 2022 | Jun. 30, 2022 | |
OTOZ [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Number of common shares issued | 191,011 | |
Non-controlling interest, percentage | 10.94% | 5.59% |
OTOZ [Member] | Minimum [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Non-controlling interest, percentage | 5.59% | |
OTOZ [Member] | Maximum [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Non-controlling interest, percentage | 10.94% | |
OTOZ Thai [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Non-controlling interest, percentage | 10.95% | 5.60% |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income tax provision | $ 193,348 | $ 167,627 |