NTWK NetSol Technologies Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

 

(Mark One)

☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended December 31, 2024

 

☐ For the transition period from __________ to __________

 

Commission file number: 0-22773

 

 

NETSOL TECHNOLOGIES, INC.

(Exact name of Registrant as specified in its charter)

 

nevada		95-4627685
(State or other Jurisdiction of		(I.R.S. Employer NO.)
Incorporation or Organization)

 

16000 Ventura Blvd., Suite 770, Encino, CA 91436
(Address of principal executive offices) (Zip Code)

 

(818) 222-9195 / (818) 222-9197
(Issuer’s telephone/facsimile numbers, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of exchange on which registered
Common Stock, $0.01 par value per share		NTWK		NASDAQ

 

Indicate by check mark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act (Check one):

 

	Large Accelerated Filer ☐	Accelerated Filer ☐
	Non-accelerated Filer ☒	Smaller reporting company ☒
		Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

 

Yes ☐ No ☒

 

The issuer had 12,609,046 shares issued and 11,670,015 outstanding of its $.01 par value Common Stock and no Preferred Stock outstanding as of February 5, 2025.

 

 

 

NETSOL TECHNOLOGIES, INC.

 

		Page No.
PART I. FINANCIAL INFORMATION		3
Item 1. Financial Statements (Unaudited)		3
Condensed Consolidated Balance Sheets as of December 31, 2024 and June 30, 2024		3
Condensed Consolidated Statements of Operations for the Three and Six Months Ended December 31, 2024 and 2023		4
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended December 31, 2024 and 2023		5
Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended December 31, 2024 and 2023		6
Condensed Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2024 and 2023		8
Notes to the Condensed Consolidated Financial Statements		10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		32
Item 3. Quantitative and Qualitative Disclosures about Market Risk		50
Item 4. Controls and Procedures		50
PART II. OTHER INFORMATION		51
Item 1. Legal Proceedings		51
Item 1A Risk Factors		51
Item 2. Unregistered Sales of Equity and Use of Proceeds		51
Item 3. Defaults Upon Senior Securities		51
Item 4. Mine Safety Disclosures		51
Item 5. Other Information		51
Item 6. Exhibits		51

 

 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

 

NETSOL TECHNOLOGIES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

 

		As of				As of
		December 31, 2024				June 30, 2024
ASSETS
Current assets:
Cash and cash equivalents		$	21,270,642			$	19,127,165
Accounts receivable, net of allowance of $17,028 and $398,809			7,829,823				13,049,614
Revenues in excess of billings, net of allowance of $595,875 and $116,148			10,661,549				12,684,518
Other current assets			3,191,378				2,600,786
Total current assets			42,953,392				47,462,083
Revenues in excess of billings, net - long term			777,428				954,029
Property and equipment, net			4,934,498				5,106,842
Right of use assets - operating leases			1,069,948				1,328,624
Other assets			32,339				32,340
Intangible assets, net			-				-
Goodwill			9,302,524				9,302,524
Total assets		$	59,070,129			$	64,186,442
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses		$	7,332,560			$	8,232,342
Current portion of loans and obligations under finance leases			8,784,232				6,276,125
Current portion of operating lease obligations			518,075				608,202
Unearned revenue			3,320,286				8,752,153
Total current liabilities			19,955,153				23,868,822
Loans and obligations under finance leases; less current maturities			86,951				95,771
Operating lease obligations; less current maturities			512,062				688,749
Total liabilities			20,554,166				24,653,342
Stockholders’ equity:
Preferred stock, $.01 par value; 500,000 shares authorized;			-				-
Common stock, $.01 par value; 14,500,000 shares authorized; 12,589,046  shares issued and 11,650,015  outstanding as of December 31, 2024 , 12,359,922  shares issued and 11,420,891  outstanding as of June 30, 2024			125,894				123,602
Additional paid-in-capital			129,194,697				128,783,865
Treasury stock (at cost, 939,031 shares as of December 31, 2024  and  June 30, 2024)			(3,920,856	)			(3,920,856	)
Accumulated deficit			(45,288,560	)			(44,212,313	)
Other comprehensive loss			(46,187,766	)			(45,935,616	)
Total NetSol stockholders’ equity			33,923,409				34,838,682
Non-controlling interest			4,592,554				4,694,418
Total stockholders’ equity			38,515,963				39,533,100
Total liabilities and stockholders’ equity		$	59,070,129			$	64,186,442

 

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

 

 

NETSOL TECHNOLOGIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)

 

		2024				2023				2024				2023
		For the Three Months Ended December 31,								For the Six Months Ended December 31,
		2024				2023				2024				2023
Net Revenues:
License fees		$	72,688			$	2,990,453			$	73,917			$	4,270,902
Subscription and support			8,642,629				6,827,781				16,835,100				13,340,024
Services			6,821,344				5,419,707				13,226,142				11,869,196
Total net revenues			15,536,661				15,237,941				30,135,159				29,480,122
Cost of revenues			8,616,320				8,062,204				16,650,706				16,142,368
Gross profit			6,920,341				7,175,737				13,484,453				13,337,754
Operating expenses:
Selling, general and administrative			7,073,622				5,807,494				14,037,943				11,240,463
Research and development cost			333,669				341,411				693,618				719,830
Total operating expenses			7,407,291				6,148,905				14,731,561				11,960,293
Income (loss) from operations			(486,950	)			1,026,832				(1,247,108	)			1,377,461
Other income and (expenses)
Interest expense			(236,386	)			(290,322	)			(494,605	)			(566,339	)
Interest income			529,072				468,280				1,298,939				882,998
Gain (loss) on foreign currency exchange transactions			(698,392	)			(14,617	)			(155,847	)			(148,870	)
Other income			38,064				(57,305	)			191,555				576
Total other income (expenses)			(367,642	)			106,036				840,042				168,365
Net income before  income taxes			(854,592	)			1,132,868				(407,066	)			1,545,826
Income tax provision			(331,614	)			(150,053	)			(561,431	)			(271,948	)
Net income			(1,186,206	)			982,815				(968,497	)			1,273,878
Non-controlling interest			39,164				(574,499	)			(107,750	)			(834,672	)
Net income attributable to NetSol		$	(1,147,042	)		$	408,316			$	(1,076,247	)		$	439,206
Net income per share:
Net income per common share
Basic		$	(0.10	)		$	0.04			$	(0.09	)		$	0.04
Diluted		$	(0.10	)		$	0.04			$	(0.09	)		$	0.04
Weighted average number of shares outstanding
Basic			11,484,298				11,372,819				11,456,996				11,359,338
Diluted			11,484,298				11,372,819				11,456,996				11,359,338

 

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

 

 

NETSOL TECHNOLOGIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

 

		2024				2023				2024				2023
		For the Three Months Ended December 31,								For the Six Months Ended December 31,
		2024				2023				2024				2023
Net income		$	(1,147,042	)		$	408,316			$	(1,076,247	)		$	439,206
Other comprehensive income (loss):
Translation adjustment			(185,914	)			840,165				(258,097	)			370,116
Translation adjustment attributable to non-controlling interest			47,171				(298,772	)			5,947				(265,269	)
Net translation adjustment			(138,743	)			541,393				(252,150	)			104,847
Comprehensive income (loss) attributable to NetSol		$	(1,285,785	)		$	949,709			$	(1,328,397	)		$	544,053

 

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

 

 

NETSOL TECHNOLOGIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statement of Stockholders’ Equity

(Unaudited)

 

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

 

		Shares				Amount				Capital				Shares				Deficit				Loss				Interest				Equity
																						Other
										Additional												Compre-				Non				Total
		Common Stock								Paid-in				Treasury				Accumulated				hensive				Controlling				Stockholders’
		Shares				Amount				Capital				Shares				Deficit				Loss				Interest				Equity
Balance at September 30, 2024			12,383,872			$	123,842			$	128,709,890			$	(3,920,856	)		$	(44,141,518	)		$	(46,049,023	)		$	5,017,675			$	39,740,010
Exercise of common stock options			190,000				1,900				406,600				-				-				-				-				408,500
Common stock issued for: Services			15,174				152				39,598				-				-				-				-				39,750
Fair value of subsidiary options issued			-				-				7,605				-				-				-				-				7,605
Acquisition of non-controlling interest in subsidiary			-				-				31,004				-				-				-				(31,987	)			(983	)
Dividend to non-controlling interest			-				-				-				-				-				-				(306,799	)			(306,799	)
Foreign currency translation adjustment			-				-				-				-				-				(138,743	)			(47,171	)			(185,914	)
Net income (loss) for the year			-				-				-				-				(1,147,042	)			-				(39,164	)			(1,186,206	)
Balance at December 31, 2024			12,589,046			$	125,894			$	129,194,697			$	(3,920,856	)		$	(45,288,560	)		$	(46,187,766	)		$	4,592,554			$	38,515,963

 

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

 

																						Other
										Additional												Compre-				Non				Total
		Common Stock								Paid-in				Treasury				Accumulated				hensive				Controlling				Stockholders’
		Shares				Amount				Capital				Shares				Deficit				Loss				Interest				Equity
Balance at June 30, 2024			12,359,922			$	123,602			$	128,783,865			$	(3,920,856	)		$	(44,212,313	)		$	(45,935,616	)		$	4,694,418			$	39,533,100
Exercise of common stock options			10,000				100				21,400				-				-				-				-				21,500
Common stock issued for: Services			13,950				140				39,610				-				-				-				-				39,750
Fair value of subsidiary options issued											8,029				-				-				-				-				8,029
Acquisition of non-controlling interest in subsidiary			-				-				(143,014	)			-				-				-				135,119				(7,895	)
Foreign currency translation adjustment			-				-				-				-				-				(113,407	)			41,224				(72,183	)
Net income (loss) for the year			-				-				-				-				70,795				-				146,914				217,709
Balance at September 30, 2024			12,383,872			$	123,842			$	128,709,890			$	(3,920,856	)		$	(44,141,518	)		$	(46,049,023	)		$	5,017,675			$	39,740,010

 

 

NETSOL TECHNOLOGIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statement of Stockholders’ Equity

(Unaudited)

 

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

 

																						Other
										Additional												Compre-				Non				Total
		Common Stock								Paid-in				Treasury				Accumulated				hensive				Controlling				Stockholders’
		Shares				Amount				Capital				Shares				Deficit				Loss				Interest				Equity
Balance at September 30, 2023			12,311,850			$	123,120			$	128,536,132			$	(3,920,856	)		$	(44,865,296	)		$	(46,411,702	)		$	3,201,723			$	36,663,121
Common stock issued for: Services			18,069				181				39,569				-				-				-				-				39,750
Fair value of subsidiary options issued			-				-				11,683				-				-				-				-				11,683
Foreign currency translation adjustment			-				-				-				-				-				541,393				298,772				840,165
Net income (loss) for the year			-				-				-				-				408,316				-				574,499				982,815
Balance at December 31, 2023			12,329,919			$	123,301			$	128,587,384			$	(3,920,856	)		$	(44,456,980	)		$	(45,870,309	)		$	4,074,994			$	38,537,534

 

A statement of the changes in equity for the three months ended September 30, 2023 is provided below:

 

																						Other
										Additional												Compre-				Non				Total
		Common Stock								Paid-in				Treasury				Accumulated				hensive				Controlling				Stockholders’
		Shares				Amount				Capital				Shares				Deficit				Loss				Interest				Equity
Balance at June 30, 2023			12,284,887			$	122,850			$	128,476,048			$	(3,920,856	)		$	(44,896,186	)		$	(45,975,156	)		$	2,975,053			$	36,781,753
Balance			12,284,887			$	122,850			$	128,476,048			$	(3,920,856	)		$	(44,896,186	)		$	(45,975,156	)		$	2,975,053			$	36,781,753
Common stock issued for: Services			26,963				270				48,530				-				-				-				-				48,800
Fair value of subsidiary options issued											11,554				-				-				-				-				11,554
Foreign currency translation adjustment			-				-				-				-				-				(436,546	)			(33,503	)			(470,049	)
Net income (loss) for the year											-				-				30,890				-				260,173				291,063
Balance at September 30, 2023			12,311,850			$	123,120			$	128,536,132			$	(3,920,856	)		$	(44,865,296	)		$	(46,411,702	)		$	3,201,723			$	36,663,121
Balance			12,311,850			$	123,120			$	128,536,132			$	(3,920,856	)		$	(44,865,296	)		$	(46,411,702	)		$	3,201,723			$	36,663,121

 

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

 

 

NETSOL TECHNOLOGIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

		2024				2023
		For the Six Months
		Ended December 31,
		2024				2023
Cash flows from operating activities:
Net income (loss)		$	(968,497	)		$	1,273,878
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization			738,582				959,949
Provision (reversal) for bad debts			475,172				29,191
Gain on sale of assets			(25,084	)			(98	)
Stock based compensation			95,134				111,787
Changes in operating assets and liabilities:
Accounts receivable			4,405,610				5,722,791
Revenues in excess of billing			2,688,774				(4,239,762	)
Other current assets			(170,856	)			329,171
Accounts payable and accrued expenses			(878,148	)			72,501
Unearned revenue			(5,990,971	)			(3,654,724	)
Net cash provided by operating activities			369,716				604,684
Cash flows from investing activities:
Purchases of property and equipment			(568,134	)			(570,584	)
Sales of property and equipment			45,535				1,248
Purchase of subsidiary shares			(8,878	)			-
Net cash used in investing activities			(531,477	)			(569,336	)
Cash flows from financing activities:
Proceeds from the exercise of stock options and warrants			430,000				-
Dividend paid by subsidiary to non-controlling interest			(306,799	)			-
Proceeds from bank loans			2,676,932				135,123
Payments on finance lease obligations and loans - net			(162,370	)			(162,482	)
Net cash provided by (used in) financing activities			2,637,763				(27,359	)
Effect of exchange rate changes			(332,525	)			118,273
Net increase (decrease) in cash and cash equivalents			2,143,477				126,262
Cash and cash equivalents at beginning of the period			19,127,165				15,533,254
Cash and cash equivalents at end of period		$	21,270,642			$	15,659,516

 

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

 

 

NETSOL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(UNAUDITED)

 

		For the Six Months
		Ended December 31,
		2024				2023
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
Interest		$	503,375			$	670,330
Taxes		$	942,413			$	342,643

 

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

 

 

NETSOL TECHNOLOGIES, INC.

Notes to Condensed Consolidated Financial Statements

December 31, 2024

(Unaudited)

 

NOTE 1 - BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

 

The Company is a business services and asset finance solutions provider that designs, develops, markets, and exports proprietary software products to customers in the automobile financing and leasing, banking, and financial services industries worldwide. 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, 2024. 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”) 

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”) 

 Otoz, Inc. (“Otoz®”)

 

Majority-owned Subsidiaries

 

NetSol Technologies, Ltd. (“NetSol PK”) 

NetSol Innovation (Private) Limited (“NetSol Innovation”) 

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

NetSol Technologies Thailand Limited (“NetSol Thai”) 

Otoz (Thailand) Limited (“Otoz® Thai”)

 

Page 10

 

 

NETSOL TECHNOLOGIES, INC. 

Notes to Condensed Consolidated Financial Statements 

December 31, 2024 

(Unaudited)

 

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.

 

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 ($68,493) in each bank and in the UK for GBP 85,000 ($106,250) in each bank. The Company maintains three bank accounts in China and nine bank accounts in the UK. As of December 31, 2024, and June 30, 2024, the Company had uninsured deposits related to cash deposits in accounts maintained within foreign entities of approximately $20,027,837 and $18,182,002, respectively. The Company has not experienced any losses in such accounts.

 

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.” ASC 820-10 defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. For certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and short-term debt, the carrying amounts approximate fair value due to their relatively short maturities. The carrying amounts of the long-term debt approximate their fair values based on current interest rates for instruments with similar characteristics.

 

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.

 

Page 11

 

 

NETSOL TECHNOLOGIES, INC. 

Notes to Condensed Consolidated Financial Statements 

December 31, 2024 

(Unaudited)

 

The Company’s financial assets that were measured at fair value on a recurring basis as of December 31, 2024, 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		$	-			$	-			$	777,428			$	777,428
Total		$	-			$	-			$	777,428			$	777,428

 

The Company’s financial assets that were measured at fair value on a recurring basis as of June 30, 2024, are as follows:

 

		Level 1				Level 2				Level 3				Total Assets
Revenues in excess of billings - long term		$	-			$	-			$	954,029			$	954,029
Total		$	-			$	-			$	954,029			$	954,029

 

The reconciliation from June 30, 2024 to December 31, 2024 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, 2024		$	1,106,475			$	(152,446	)		$	954,029
Amortization during the period			-				36,734				36,734
Transfers to short term			(206,964	)			-				(206,964	)
Effect of Translation Adjustment			(6,957	)			586				(6,371	)
Balance at December 31, 2024		$	892,554			$	(115,126	)		$	777,428

 

Management analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity” and ASC 815, “Derivatives and Hedging.” Derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives. The effects of interactions between embedded derivatives are calculated and accounted for in arriving at the overall fair value of the financial instruments. In addition, the fair values of freestanding derivative instruments such as warrants and option derivatives are valued using the Black-Scholes model.

 

Recent Accounting Standards:

 

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. ASU 2023-07 is effective for the Company’s Annual Report on Form 10-K for the fiscal year ending June 30, 2025, and subsequent interim periods, with early adoption permitted. We are evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.

 

Page 12

 

 

NETSOL TECHNOLOGIES, INC. 

Notes to Condensed Consolidated Financial Statements 

December 31, 2024 

(Unaudited)

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance transparency and decision usefulness of income tax disclosures, particularly around rate reconciliations and income taxes paid information. ASU 2023-09 is effective for our Annual Report on Form 10-K for the fiscal year ending June 30, 2026, on a prospective basis, with early adoption permitted. We are evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.

 

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

 

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.

 

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.

 

Page 13

 

 

NETSOL TECHNOLOGIES, INC. 

Notes to Condensed Consolidated Financial Statements 

December 31, 2024 

(Unaudited)

 

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, most 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. Several 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.

 

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.

 

Page 14

 

 

NETSOL TECHNOLOGIES, INC. 

Notes to Condensed Consolidated Financial Statements 

December 31, 2024 

(Unaudited)

 

The Company’s disaggregated revenue by category is as follows: 

 

SCHEDULE OF DISAGGREGATED REVENUE BY CATEGORY

		2024				2023				2024				2023
		For the Three Months Ended December 31,								For the Six Months Ended December 31,
		2024				2023				2024				2023
Core:
License		$	72,688			$	2,990,453			$	73,917			$	4,270,902
Subscription and support			8,642,629				6,827,781				16,835,100				13,340,024
Services			5,872,590				4,114,077				11,399,225				9,088,631
Total core revenue, net			14,587,907				13,932,311				28,308,242				26,699,557
Non-Core:
Services			948,754				1,305,630				1,826,917				2,780,565
Total non-core revenue, net			948,754				1,305,630				1,826,917				2,780,565
Total net revenue		$	15,536,661			$	15,237,941			$	30,135,159			$	29,480,122

 

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 “person-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 person-days required to complete implementation and customization services each reporting period.

 

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. Several internal and external factors can affect these estimates, including labor rates, utilization, specification variances and testing requirement changes.

 

Page 15

 

 

NETSOL TECHNOLOGIES, INC. 

Notes to Condensed Consolidated Financial Statements 

December 31, 2024 

(Unaudited)

 

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 

		As of				As of
		December 31, 2024				June 30, 2024
Revenues in excess of billings		$	11,438,977			$	13,638,547
Unearned revenue		$	3,320,286			$	8,752,153

 

The Company’s unearned revenue reconciliation is as follows:

SCHEDULE OF UNEARNED REVENUE RECONCILIATION 

		Unearned Revenue
Balance at June 30, 2024		$	8,752,153
Invoiced			9,309,191
Revenue Recognized			(14,644,315	)
Adjustments			(96,743	)
Balance at December 31, 2024		$	3,320,286

 

During the three and six months ended December 31, 2024, the Company recognized revenue of $3,514,159 and $7,686,403 that was included in the unearned revenue balance at the beginning of the period. All other activity in unearned revenue is due to the timing of invoicing in relation to the timing of revenue recognition.

 

Page 16

 

 

NETSOL TECHNOLOGIES, INC. 

Notes to Condensed Consolidated Financial Statements 

December 31, 2024 

(Unaudited)

 

Revenue allocated to the remaining performance obligations represents the transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied, which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods. Contracted but unsatisfied performance obligations were approximately $20,000,000 as of December 31, 2024, of which the Company estimates to recognize approximately $17,000,000 in revenue over the next 12 months and the remainder over an estimated 3 years thereafter. Actual revenue recognition depends in part on the timing of software modules installed at various customer sites. Accordingly, some factors that affect the Company’s revenue, such as the availability and demand for modules within customer geographic locations, is not entirely within the Company’s control.  In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that its contracts generally do not include a significant financing component. The primary purpose of invoicing terms is to provide customers with simplified and predictable ways of purchasing the Company’s products and services, and not to facilitate financing arrangements.

 

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.

 

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.

 

Page 17

 

 

NETSOL TECHNOLOGIES, INC. 

Notes to Condensed Consolidated Financial Statements 

December 31, 2024 

(Unaudited)

 

NOTE 4 – EARNINGS PER SHARE

 

Basic earnings per share are computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options and stock awards.

 

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

 

SCHEDULE OF DILUTIVE POTENTIAL COMMON SHARES

		For the three months ended December 31, 2024												For the six months ended December 31, 2024
		Net Loss				Shares				Per Share				Net Loss				Shares				Per Share
Basic loss per share:
Net loss		$	(1,147,042	)			11,484,298			$	(0.10	)		$	(1,076,247	)			11,456,996			$	(0.09	)
Effect of dilutive securities
Stock options			-				-				-				-				-				-
Diluted loss per share		$	(1,147,042	)			11,484,298			$	(0.10	)		$	(1,076,247	)			11,456,996			$	(0.09	)

  

		For the three months ended December 31, 2023												For the six months ended December 31, 2023
		Net Income				Shares				Per Share				Net Income				Shares				Per Share
Basic income per share:
Net income		$	408,316				11,372,819			$	0.04			$	439,206				11,359,338			$	0.04
Effect of dilutive securities
Stock options			-				-				-				-				-				-
Diluted income per share		$	408,316				11,372,819			$	0.04			$	439,206				11,359,338			$	0.04

 

NOTE 5 – OTHER COMPREHENSIVE INCOME AND FOREIGN CURRENCY

 

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

SCHEDULE OF FOREIGN CURRENCY TRANSLATION 

The Company and Subsidiaries		Functional Currency
NetSol Technologies, Inc.		USD
NTA		USD
Otoz		USD
NTE		British Pound
AEL		British Pound
VLSH		British Pound
VLS		British Pound
VLSIL		Euro
NetSol PK		Pakistan Rupee
Connect		Pakistan Rupee
NetSol Innovation		Pakistan Rupee
NetSol Thai		Thai Bhat
Otoz Thai		Thai Bhat
Australia		Australian Dollar
Namecet		AED
NetSol Beijing		Chinese Yuan
Tianjin		Chinese Yuan

 

Page 18

 

 

NETSOL TECHNOLOGIES, INC. 

Notes to Condensed Consolidated Financial Statements 

December 31, 2024 

(Unaudited)

 

Assets and liabilities are translated at the exchange rate on the balance sheet date, and operating results are translated at the average exchange rate throughout the period. Accumulated translation losses classified as an item of accumulated other comprehensive loss in the stockholders’ equity section of the consolidated balance sheet were $46,187,766 and $45,935,616 as of December 31, 2024 and June 30, 2024, respectively. During the three and six months ended December 31, 2024, comprehensive income (loss) in the consolidated statements of comprehensive income (loss) included a translation loss attributable to NetSol of $138,743 and $252,150, respectively. During the three and six months ended December 31, 2023, comprehensive income (loss) in the consolidated statements of comprehensive income (loss) included a translation gain attributable to NetSol of $541,393 and $104,847, respectively.

 

NOTE 6 – MAJOR CUSTOMERS

 

During the three and six months ended December 31, 2024, revenues from Daimler Financial Services (“DFS”) were $3,042,849 and $6,260,390, respectively representing 19.6% and 20.8%, respectively of revenues. During the three and six months ended December 31, 2024, revenues from BMW Financial (“BMW”) were $3,116,086 and $5,588,787, respectively representing 20.1% and 18.5%, respectively of revenues. During the three and six months ended December 31, 2023, revenues from DFS were $3,945,061 and $7,632,692, representing 25.9% of revenues. During the three and six months ended December 31, 2023, revenues from BMW were $699,966 and $1,109,955, respectively representing 4.6% and 6.0%, respectively of revenues. The revenues from DFS are shown in the Asia – Pacific segment. The revenues from BMW are shown in the Asia – Pacific and North America segments.

 

Accounts receivable from DFS and BMW at December 31, 2024, were $368,862 and $107,716, respectively. Accounts receivable from DFS and BMW at June 30, 2024, were $538,648 and $505,875, respectively. Revenues in excess of billings at December 31, 2024, were $761,367 and $1,375,671, respectively. Revenues in excess of billings at June 30, 2024, were $892,109 and $1,419,997, respectively.

 

NOTE 7 - OTHER CURRENT ASSETS

 

Other current assets consisted of the following:

SCHEDULE OF OTHER CURRENT ASSETS 

		As of				As of
		December 31, 2024				June 30, 2024
Prepaid Expenses		$	1,554,542			$	1,314,524
Advance Income Tax			361,010				300,368
Employee Advances			209,650				165,264
Security Deposits			157,548				199,633
Other Receivables			553,283				258,880
Other Assets			355,345				362,117
Net Balance		$	3,191,378			$	2,600,786

 

Page 19

 

 

NETSOL TECHNOLOGIES, INC. 

Notes to Condensed Consolidated Financial Statements 

December 31, 2024 

(Unaudited)

 

NOTE 8 – 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
		December 31, 2024				June 30, 2024
Revenues in excess of billings - long term		$	892,554			$	1,106,475
Present value discount			(115,126	)			(152,446	)
Net Balance		$	777,428			$	954,029

 

Pursuant to revenue recognition for contract accounting, the Company has recorded revenues in excess of billings long-term for amounts billable after one year. During the three and six months ended December 31, 2024, the Company accreted $18,367 and $36,734, respectively, which was recorded in interest income for that period. During the three and six months ended December 31, 2023, the Company accreted $12,309 and $18,464, respectively, which was recorded in interest income for that period. The Company used the discounted cash flow method with interest rates ranging from 7.3% to 17.5%, for the period ended December 31, 2024 and June 30, 2024.

 

NOTE 9 - PROPERTY AND EQUIPMENT

 

Property and equipment consisted of the following:

SCHEDULE OF PROPERTY AND EQUIPMENT 

		As of				As of
		December 31, 2024				June 30, 2024
Office Furniture and Equipment		$	2,377,621			$	2,352,940
Computer Equipment			9,156,088				8,679,791
Assets Under Capital Leases			133,897				154,718
Building			3,597,784				3,602,819
Land			912,129				913,473
Autos			1,594,928				1,658,961
Improvements			212,897				206,387
Subtotal			17,985,344				17,569,089
Accumulated Depreciation			(13,050,846	)			(12,462,247	)
Property and Equipment, Net		$	4,934,498			$	5,106,842

 

For the three and six months ended December 31, 2024 and 2023, depreciation expense totaled $372,585 and $738,582, respectively. Of these amounts, $237,882 and $466,432, respectively, are reflected in cost of revenues. For the three and six months ended December 31, 2023, depreciation expense totaled $429,163 and $833,908, respectively. Of these amounts, $264,374 and $531,316, respectively, are reflected in cost of revenues.

 

Page 20

 

 

NETSOL TECHNOLOGIES, INC. 

Notes to Condensed Consolidated Financial Statements 

December 31, 2024 

(Unaudited)

 

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

SCHEDULE OF FIXED ASSETS HELD UNDER CAPITAL LEASES 

		As of				As of
		December 31, 2024				June 30, 2024
Vehicles		$	133,897			$	154,718
Total			133,897				154,718
Less:  Accumulated Depreciation - Net			(27,478	)			(25,078	)
Fixed assets held under capital leases, Total		$	106,419			$	129,640

 

Finance lease term and discount rate were as follows:

SCHEDULE OF FINANCE LEASE TERM 

		As of				As of
		December 31, 2024				June 30, 2024
Weighted average remaining lease term - Finance leases			2.25 Years				2.75 Years
Weighted average discount rate - Finance leases			11.3	%			11.3	%

 

NOTE 10 - LEASES

 

The Company leases certain office space, office equipment and autos with remaining lease terms of one year to 10 years under leases classified as financing and operating. For certain leases, the Company has options to extend the lease term for additional periods ranging from one year to 10 years.

 

The Company treats a contract as a lease when the contract conveys the right to use a physically distinct asset for a period of time in exchange for consideration, or the Company directs the use of the asset and obtains substantially all the economic benefits of the asset. These leases are recorded as right-of-use (“ROU”) assets and lease obligation liabilities for leases with terms greater than 12 months.  ROU assets represent the Company’s right to use an underlying asset for the entirety of the lease term. Lease liabilities represent the Company’s obligation to make payments over the life of the lease. A ROU asset and a lease liability are recognized at 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.

 

The Company reviews the impairment of ROU assets consistent with the approach applied to the Company’s other long-lived assets. The Company reviews the recoverability of long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the Company’s ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations.

 

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

 

Lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred. Variable payments change due to facts or circumstances occurring after the commencement date, other than the passage of time, and do not result in a re-measurement of lease liabilities. 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.

 

Page 21

 

 

NETSOL TECHNOLOGIES, INC. 

Notes to Condensed Consolidated Financial Statements 

December 31, 2024 

(Unaudited)

 

Supplemental balance sheet information related to leases was as follows:

SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO LEASE 

		As of				As of
		December 31, 2024				June 30, 2024
Assets
Operating lease assets, net		$	1,069,948			$	1,328,624
Liabilities
Current
Operating		$	518,075			$	608,202
Operating, Current		$	518,075			$	608,202
Non-current
Operating			512,062				688,749
Operating, Noncurrent			512,062				688,749
Total Lease Liabilities		$	1,030,137			$	1,296,951

 

The components of lease cost were as follows: 

 

SCHEDULE OF COMPONENTS OF LEASE COST

		2024				2023				2024				2023
		For the Three Months Ended December 31,								For the Six Months Ended December 31,
		2024				2023				2024				2023
Amortization of finance lease assets		$	7,720			$	2,365			$	21,597			$	4,661
Interest on finance lease obligation			2,907				770				5,994				1,639
Operating lease cost			98,492				98,309				198,338				205,342
Short term lease cost			60,477				40,216				110,040				81,224
Sub lease income			(8,514	)			(8,199	)			(16,920	)			(16,605	)
Total lease cost		$	161,082			$	133,461			$	319,049			$	276,261

 

Lease term and discount rate were as follows:

SCHEDULE OF LEASE TERM AND DISCOUNT RATE 

		As of				As of
		December 31, 2024				June 30, 2024
Weighted average remaining lease term - Operating leases			1.59 Years				1.99 Years
Weighted average discount rate - Operating leases			4.5	%			4.5	%

 

Page 22

 

 

NETSOL TECHNOLOGIES, INC. 

Notes to Condensed Consolidated Financial Statements 

December 31, 2024 

(Unaudited)

 

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

SCHEDULE OF SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION RELATED TO LEASES 

		2024				2023
		For the Six Months
		Ended December 31,
		2024				2023
Operating cash flows related to operating leases		$	185,514			$	140,514
Operating cash flows related to finance leases		$	5,994			$	1,638
Financing cash flows related finance leases		$	9,296			$	16,424

 

Maturities of operating lease liabilities were as follows as of December 31, 2024:

SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES 

		Amount
Within year 1		$	559,279
Within year 2			367,204
Within year 3			127,730
Within year 4			53,837
Within year 5			237
Total Lease Payments			1,108,287
Less: Imputed interest			(78,150	)
Present Value of lease liabilities			1,030,137
Less: Current portion			(518,075	)
Non-Current portion		$	512,062

 

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 and six months ended December 31, 2024, the Company received lease income of $8,514 and $16,920, respectively. For the three and six months ended December 31, 2023, the Company received lease income of $8,199 and $16,605, respectively.

 

NOTE 11 - 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
		December 31, 2024				June 30, 2024
Accounts Payable		$	969,495			$	1,426,930
Accrued Liabilities			4,333,709				4,323,662
Accrued Payroll			1,336,128				1,392,112
Accrued Payroll Taxes			191,462				215,197
Taxes Payable			267,422				634,035
Other Payable			234,344				240,406
Total		$	7,332,560			$	8,232,342

 

Page 23

 

 

NETSOL TECHNOLOGIES, INC. 

Notes to Condensed Consolidated Financial Statements 

December 31, 2024 

(Unaudited)

 

NOTE 12 – DEBTS

 

Notes payable and finance leases consisted of the following:

SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES 

				As of December 31, 2024
								Current				Long-Term
Name				Total				Maturities				Maturities
D&O Insurance		(1)		$	102,626			$	102,626			$	-
Line of Credit		(2)			405,000				405,000				-
Bank Overdraft Facility		(3)			-				-				-
Loan Payable Bank - Export Refinance		(4)			1,793,915				1,793,915				-
Loan Payable Bank - Running Finance		(5)			-				-				-
Loan Payable Bank - Export Refinance II		(6)			1,363,375				1,363,375				-
Loan Payable Bank - Export Refinance III		(7)			4,664,180				4,664,180				-
Sale and Leaseback Financing		(8)			31,589				31,589				-
Short Term Financing		(9)			410,959				410,959				-
					8,771,644				8,771,644				-
Subsidiary Finance Leases		(10)			99,539				12,588				86,951
				$	8,871,183			$	8,784,232			$	86,951

 

				As of June 30, 2024
								Current				Long-Term
Name				Total				Maturities				Maturities
D&O Insurance		(1)		$	124,314			$	124,314			$	-
Line of Credit		(2)			-				-				-
Bank Overdraft Facility		(3)			-				-				-
Loan Payable Bank - Export Refinance		(4)			1,796,558				1,796,558				-
Loan Payable Bank - Running Finance		(5)			-				-				-
Loan Payable Bank - Export Refinance II		(6)			1,365,384				1,365,384				-
Loan Payable Bank - Export Refinance III		(7)			2,515,181				2,515,181				-
Sale and Leaseback Financing		(8)			56,842				47,158				9,684
Short Term Financing		(9)			412,655				412,655				-
					6,270,934				6,261,250				9,684
Subsidiary Finance Leases		(10)			100,962				14,875				86,087
				$	6,371,896			$	6,276,125			$	95,771

 

(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 8.6% to 10.9% as of December 31, 2024 and June 30, 2024.

 

(2)

The Company has an uncommitted discretionary demand line of credit up to an aggregate amount of $1,000,000 with HSBC, secured by a lien on the Company’s assets. The annual interest rate was 8.25% at December 31, 2024 and 8.75% as of June 30, 2024. The total outstanding balance as of December 31, 2024 and June 30, 2024 was $405,000 and $nil, respectively.

 

Page 24

 

 

NETSOL TECHNOLOGIES, INC. 

Notes to Condensed Consolidated Financial Statements 

December 31, 2024 

(Unaudited)

 

(3)

The Company’s subsidiary, NTE, has an overdraft facility with HSBC Bank plc whereby the bank would cover any overdrafts up to £300,000, or approximately $375,000. The annual interest rate was 9.5% as of December 31, 2024 and June 30, 2024. The total outstanding balance as of December 31, 2024 and June 30, 2024 was £Nil.

 

This overdraft facility requires that the aggregate amount of invoiced trade debtors (net of provisions for bad and doubtful debts and excluding intra-group debtors) of NTE, not exceeding 90 days old, will not be less than an amount equal to 200% of the facility. As of December 31, 2024, NTE was in compliance with this covenant.

 

(4)

The Company’s subsidiary, NetSol PK, has an export refinance facility with Askari Bank Limited, secured by NetSol PK’s assets. This is a revolving loan that matures every nine months. The total facility amount is Rs. 500,000,000 or $1,793,915 at December 31, 2024 and Rs. 500,000,000 or $1,796,558 at June 30, 2024. The interest rate for the loan was 10.0% and 17.5% at December 31, 2024 and June 30, 2024, respectively.

 

(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. 3,550,937 or $12,740, at December 31, 2024. The balance outstanding at December 31, 2024 and June 30, 2024 was Rs. Nil. The interest rate for the loan was 14.1% at December 31, 2024 and 22.2% at June 30, 2024.

 

This facility requires NetSol PK to maintain a long-term debt equity ratio of 60:40 and a current ratio of 1:1. As of December 31, 2024, 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 or $1,363,375 and Rs. 380,000,000 or $1,365,384 at December 31, 2024 and June 30, 2024, respectively. The interest rate for the loan was 10.0% and 17.5% at December 31, 2024 and June 30, 2024, respectively.

 

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 December 31, 2024, 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. 1,300,000,000 or $4,664,180 and Rs. 900,000,000 or $3,233,804, at December 31, 2024 and June 30, 2024, respectively. NetSol PK used Rs. 1,300,000,000 or $4,664,180 and Rs. 700,000,000 or $2,515,181, at December 31, 2024 and June 30, 2024, respectively. The interest rate for the loan was 10.0% and 17.5% at December 31, 2024 and June 30, 2024, respectively.

 

(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 December 31, 2024, NetSol PK used Rs. 8,804,426 or $31,589 which was shown as current. As of June 30, 2024, NetSol PK used Rs. 15,819,683 or $56,842 of which $9,684 was shown as long term and $47,158 as current. The interest rate for the loan was from 22.7% to 24.2% at December 31, 2024 and June 30, 2024.

 

(9)

The Company’s subsidiary, NetSol Beijing, has a one year, short-term loan facility with Bank of China, secured by a personal guarantee from NetSol Beijing’s General Manager. The facility amount is CNY 3,000,000 or $410,959. NetSol Beijing used CNY 3,000,000 or $410,959 at December 31, 2024. NetSol Beijing used CNY 3,000,000 or $412,655, at June 30, 2024. The interest rate of the loan was 3.8% at December 31, 2024 and June 30, 2024.

 

(10)

The Company leases various fixed assets under finance lease arrangements expiring in various years through 2027. 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 December 31, 2024 and 2023.

 

Page 25

 

 

NETSOL TECHNOLOGIES, INC. 

Notes to Condensed Consolidated Financial Statements 

December 31, 2024 

(Unaudited)

 

Following are the aggregate minimum future lease payments under finance leases as of December 31, 2024:

SCHEDULE OF AGGREGATE MINIMUM FUTURE LEASE PAYMENTS UNDER CAPITAL LEASES 

		Amount
Minimum Lease Payments
Within year 1		$	25,403
Within year 2			25,403
Within year 3			77,567
Total Minimum Lease Payments			128,373
Interest Expense relating to future periods			(28,834	)
Present Value of minimum lease payments			99,539
Less: Current portion			(12,588	)
Non-Current portion		$	86,951

 

Following are the aggregate future long term debt payments as of December 31, 2024 which consists of “Sale and Leaseback Financing (8)”.

SCHEDULE OF AGGREGATE FUTURE LONG TERM DEBT PAYMENTS 

		Amount
Loan Payments
Within year 1		$	30,754
Within year 2			835
Total Loan Payments			31,589
Less: Current portion			(31,589	)
Non-Current portion		$	-

 

NOTE 13 - STOCKHOLDERS’ EQUITY

 

During the three and six months ended December 31, 2024, the Company issued 15,174 and 29,124 shares of common stock for services rendered by the independent members of the Board of Directors as part of their board compensation. These shares were valued at the fair market value of $39,750 and $79,500, respectively.

 

During the three and six months ended December 31, 2024, the employees of the Company exercised 190,000 and 200,000 options of common stock with an exercise price of $2.15 per share for cash proceeds of $430,000.

 

Stock Grants

 

The following table summarizes stock grants awarded as compensation:

SUMMARY OF UNVESTED STOCK GRANTS AWARDED AS COMPENSATION 

		# Number of shares				Weighted Average Grant Date Fair Value ($)
Unvested, June 30, 2024			-			$	-
Granted			29,124			$	2.73
Vested			(29,124	)		$	2.73
Unvested, December 31, 2024			-			$	-

 

For the three and six months ended December 31, 2024, the Company recorded compensation expense of $39,750 and $79,500, respectively. For the three and six months ended December 31, 2023, the Company recorded compensation expense of $39,750 and $88,550, respectively. The weighted average grant date fair value is determined by the Company’s closing stock price on the grant date.

 

Page 26

 

 

NETSOL TECHNOLOGIES, INC. 

Notes to Condensed Consolidated Financial Statements 

December 31, 2024 

(Unaudited)

 

NOTE 14 – INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN

 

Common stock purchase options consisted of the following:

SCHEDULE OF COMMON STOCK PURCHASE OPTIONS 

OPTIONS:
		# of shares				Weighted Average Exercise Price				Weighted Average Remaining Contractual Life (in years)				Aggregated Intrinsic Value
Outstanding and exercisable, June 30, 2024			250,000			$	2.15				0.50
Granted			-				-				-				-
Exercised			(200,000	)			2.15				-				-
Expired / Cancelled			-				-				-				-
Outstanding and exercisable, December 31, 2024			50,000			$	2.15				0.003			$	23,500

 

The aggregate intrinsic value at December 31, 2024 represents the difference between the Company’s closing stock price of $2.62 on December 31, 2024 and the exercise price of the in-the-money stock options.

 

The following table summarizes information about stock options outstanding and exercisable at December 31, 2024.

SUMMARY OF STOCK OPTIONS OUTSTANDING 

Exercise Price		Number Outstanding and Exercisable				Weighted Average Remaining Contractual Life				Weighted Average Exercise Price
OPTIONS:
$2.15			50,000				0.003			$	2.15
$2.15			50,000				0.003			$	2.15
Totals			50,000				0.003			$	2.15

 

NOTE 15– OPERATING SEGMENTS

 

The Company has identified three segments for its products and services; North America, Europe and Asia-Pacific. Our reportable segments are business units located in different global regions. Each business unit provides similar products and services; license fees for leasing and asset-based software, related maintenance fees, and implementation and IT consulting services. Separate management of each segment is required because each business unit is subject to different operational issues and strategies due to their particular regional location. The Company accounts for intra-company sales and expenses as if the sales or expenses were to third parties and eliminates them in the consolidation.

 

Page 27

 

 

NETSOL TECHNOLOGIES, INC. 

Notes to Condensed Consolidated Financial Statements 

December 31, 2024 

(Unaudited)

 

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

SUMMARY OF IDENTIFIABLE ASSETS 

		As of				As of
		December 31, 2024				June 30, 2024
Identifiable assets:
Corporate headquarters		$	906,828			$	808,385
North America			7,246,715				6,114,142
Europe			8,516,144				9,410,098
Asia - Pacific			42,400,442				47,853,817
Consolidated		$	59,070,129			$	64,186,442
Identifiable assets		$	59,070,129			$	64,186,442

 

The following table presents a summary of revenue streams by segment for the three months ended December 31, 2024 and 2023:

SUMMARY OF REVENUE STREAMS 

		2024																2023
		License fees				Subscription and support				Services				Total				License fees				Subscription and support				Services				Total
North America		$	-			$	1,606,262			$	1,601,011			$	3,207,273			$	-			$	1,168,224			$	296,997			$	1,465,221
Europe			72,688				1,202,858				1,985,634				3,261,180				4,650				874,096				1,593,611				2,472,357
Asia-Pacific			-				5,833,509				3,234,699				9,068,208				2,985,803				4,785,461				3,529,099				11,300,363
Total		$	72,688			$	8,642,629			$	6,821,344			$	15,536,661			$	2,990,453			$	6,827,781			$	5,419,707			$	15,237,941

 

The following table presents a summary of revenue streams by segment for the six months ended December 31, 2024 and 2023:

 

		2024																2023
		License fees				Subscription and support				Services				Total				License fees				Subscription and support				Services				Total
North America		$	-			$	2,868,907			$	3,207,027			$	6,075,934			$	-			$	2,293,038			$	580,798			$	2,873,836
Europe			73,917				2,095,630				3,586,919				5,756,466				8,966				1,588,084				3,437,340				5,034,390
Asia-Pacific			-				11,870,563				6,432,196				18,302,759				4,261,936				9,458,902				7,851,058				21,571,896
Total		$	73,917			$	16,835,100			$	13,226,142			$	30,135,159			$	4,270,902			$	13,340,024			$	11,869,196			$	29,480,122

 

Page 28

 

 

NETSOL TECHNOLOGIES, INC. 

Notes to Condensed Consolidated Financial Statements 

December 31, 2024 

(Unaudited)

 

The following table presents a summary of operating information for the three and six months ended December 31: 

 

SUMMARY OF OPERATING INFORMATION

		2024				2023				2024				2023
		For the Three Months Ended December 31,								For the Six Months Ended December 31,
		2024				2023				2024				2023
Revenues from unaffiliated customers:
North America		$	3,207,273			$	1,465,221			$	6,075,934			$	2,873,836
Europe			3,261,180				2,472,357				5,756,466				5,034,390
Asia - Pacific			9,068,208				11,300,363				18,302,759				21,571,896
Revenues from unaffiliated customers			15,536,661				15,237,941				30,135,159				29,480,122
Revenue from affiliated customers
Asia - Pacific			-				-				-				-
Revenue from affiliated customers			-				-				-				-
Consolidated		$	15,536,661			$	15,237,941			$	30,135,159			$	29,480,122
Revenue		$	15,536,661			$	15,237,941			$	30,135,159			$	29,480,122
Intercompany revenue
Europe		$	188,756			$	100,100			$	205,314			$	200,417
Asia - Pacific			4,713,799				2,865,277				7,983,143				5,485,596
Eliminated		$	4,902,555			$	2,965,377			$	8,188,457			$	5,686,013
Revenue		$	4,902,555			$	2,965,377			$	8,188,457			$	5,686,013
Net income (loss) after taxes and before non-controlling interest:
Corporate headquarters		$	(103,088	)		$	(922,670	)		$	(765,146	)		$	(1,226,392	)
North America			(380,582	)			(13,278	)			234,261				(69,225	)
Europe			(450,678	)			(150,935	)			(973,676	)			(242,819	)
Asia - Pacific			(251,858	)			2,069,698				536,064				2,812,314
Consolidated		$	(1,186,206	)		$	982,815			$	(968,497	)		$	1,273,878
Net income (loss) after taxes and before non-controlling interest		$	(1,186,206	)		$	982,815			$	(968,497	)		$	1,273,878
Depreciation and amortization:
North America		$	599			$	407			$	1,070			$	898
Europe			53,179				57,758				112,859				120,659
Asia - Pacific			318,807				370,998				624,653				838,392
Consolidated		$	372,585			$	429,163			$	738,582			$	959,949
Depreciation and amortization		$	372,585			$	429,163			$	738,582			$	959,949
Interest expense:
Corporate headquarters		$	11,059			$	6,538			$	20,451			$	12,659
Europe			12,059				1,834				12,059				6,476
Asia - Pacific			213,268				281,950				462,095				547,204
Consolidated		$	236,386			$	290,322			$	494,605			$	566,339
Interest expense		$	236,386			$	290,322			$	494,605			$	566,339
Income tax expense:
Europe		$	-			$	(93,583	)		$	-			$	(93,583	)
Asia - Pacific			331,614				243,636				561,431				365,531
Consolidated		$	331,614			$	150,053			$	561,431			$	271,948
Income tax expense		$	331,614			$	150,053			$	561,431			$	271,948

 

Page 29

 

 

NETSOL TECHNOLOGIES, INC. 

Notes to Condensed Consolidated Financial Statements 

December 31, 2024 

(Unaudited)

 

The following table presents a summary of capital expenditures for the six months ended December 31:

SUMMARY OF CAPITAL EXPENDITURES 

		2024				2023
		For the Six Months
		Ended December 31,
		2024				2023
Capital expenditures:
North America		$	3,841			$	-
Europe			56,204				417,104
Asia - Pacific			508,089				153,480
Consolidated		$	568,134			$	570,584
Capital expenditures		$	568,134			$	570,584

 

NOTE 16 – 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 December 31, 2024
NetSol PK			32.38	%		$	5,163,259
NetSol-Innovation			32.38	%			(538,843	)
NAMECET			32.38	%			(31,713	)
NetSol Thai			0.006	%			(169	)
OTOZ Thai			0.01	%			20
OTOZ			0.00	%			-
Total						$	4,592,554

 

SUBSIDIARY		Non-Controlling Interest %				Non-Controlling Interest at June 30, 2024
NetSol PK			32.38	%		$	4,679,101
NetSol-Innovation			32.38	%			137,232
NAMECET			32.38	%			(21,014	)
NetSol Thai			0.006	%			(163	)
OTOZ Thai			5.60	%			(17,483	)
OTOZ			5.59	%			(83,255	)
Total						$	4,694,418

 

During the six months ended December 31, 2024, the Company acquired the remaining 177,558 minority shares from the non-controlling shareholders for $8,878. As a result, the Company’s ownership interest increased, reducing the non-controlling interest from 5.59% to 0.0%. The effective non-controlling interest in Otoz® Thai decreased to 0.01%.

 

Page 30

 

 

NETSOL TECHNOLOGIES, INC. 

Notes to Condensed Consolidated Financial Statements 

December 31, 2024 

(Unaudited)

 

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

		2024				2023				2024				2023
		For the Three Months Ended December 31,								For the Six Months Ended December 31,
		2024				2023				2024				2023
Net income (loss) attributable to NetSol		$	(1,147,042	)		$	408,316			$	(1,076,247	)		$	439,206
Transfer to (from) non-controlling interest
Decrease in paid-in capital for purchase of 177,558 shares of OTOZ Inc common stock			(31,004	)							(166,123	)			-
Net transfer to (from) non-controlling interest			(31,004	)			-				(166,123	)			-
Change from net income (loss) attributable to NetSol and transfer to (from) non-controlling interest		$	(1,178,046	)		$	408,316			$	(1,242,370	)		$	439,206

 

NOTE 17– 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 will depend on the portion of our profits earned within and outside the United States.

 

During the three and six months ended December 31, 2024, the Company recorded an income tax provision of $331,614 and $561,431, respectively. During the three and six months ended December 31, 2023, the Company recorded an income tax provision of $150,053 and $271,948, respectively.

 

NOTE 18– SUBSEQUENT EVENTS

 

NetSol PK announced a share buyback program for the repurchase of up to 10,000,000 shares representing approximately 11.1% of the estimated 89,837,000 outstanding shares. The buyback program was announced on January 3, 2025, and will continue through June 29, 2025. As of February 10, 2025, NetSol PK had repurchased approximately 2,358,000 shares valued at approximately $1,345,000.

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The following discussion is intended to assist in an understanding of the Company’s financial position and results of operations for the three months ended December 31, 2024. The following discussion should be read in conjunction with the information included within our Annual Report on Form 10-K for the year ended June 30, 2024, and the Condensed Consolidated Financial Statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q.

 

Our website is located at https://netsoltech.com/, and our investor relations website is located at https://ir.netsoltech.com. The following filings are available through our investor relations website after we file with the SEC: Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and our Proxy Statements for our annual meetings of stockholders. These filings are also available for download free of charge on our investor relations website. We also provide a link to the section of the SEC’s website at www.sec.gov that has all of our public filings, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, all amendments to those reports, our Proxy Statements and other ownership related filings. Further, a copy of this Quarterly Report on Form 10-Q is located at the SEC’s Public Reference Room at 100 F Street, NE, Washington D.C. 20549. Information on the operation of the Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330.

 

We webcast our earnings calls and certain events we participate in or host with members of the investment community on our investor relations website. Additionally, we provide notifications of news or announcements regarding our financial performance, including SEC filings, investor events, press and earnings releases, and blogs as part of our investor relations website and on social media platforms linked to our corporate website. Investors and others can receive notifications of new information posted on our investor relations website by signing up for e-mail alerts. Further corporate governance information, including our committee charters and code of conduct, is also available on our investor relations website at https://netsoltech.com/about-us. The content of our websites is not intended to be incorporated by reference into this or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.

 

Forward-Looking Information

 

This report contains certain forward-looking statements and information relating to the Company that is based on the beliefs of its management as well as assumptions made by and information currently available to its management. When used in this report, the words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “plan”, and similar expressions as they relate to the Company or its management, are intended to identify forward-looking statements. These statements reflect management’s current view of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions. Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this report as anticipated, estimated or expected. The Company’s realization of its business aims could be materially and adversely affected by any technical or other problems in, or difficulties with, planned funding and technologies, third party technologies which render the Company’s technologies obsolete, the unavailability of required third party technology licenses on commercially reasonable terms, the loss of key research and development personnel, the inability or failure to recruit and retain qualified research and development personnel, or the adoption of technology standards which are different from technologies around which the Company’s business ultimately is built. The Company does not intend to update these forward-looking statements.

 

 

Business Overview

 

NETSOL Technologies is a global business services and asset finance solutions provider. NETSOL delivers state-of-the-art solutions for the asset finance and leasing industry, serving automotive and equipment OEMs, auto captives and financial institutions across over 30 countries. Since its inception in 1997, NETSOL has been at the cutting edge of technology, pioneering innovations with its asset finance solutions and leveraging advanced AI and cloud services to meet the complex needs of the global market.

 

Renowned for its deep industry expertise, customer-centric approach and commitment to excellence, NETSOL fosters strong partnerships with its clients, ensuring their success in an ever-evolving landscape. With a rich history of innovation, ethical business practices and a focus on sustainability, NETSOL is dedicated to empowering businesses worldwide, securing its position as the trusted partner for leading firms around the globe.

 

Our primary sources of revenues have been licensing, subscriptions, modification, enhancement and support of our suite of financial applications, under the brand name Transcend™ Finance (formerly called NFS Ascent^®) for leading businesses in the global finance and leasing space.

 

Our clients include blue chip organizations, Dow-Jones 30 Industrials, Fortune 500 manufacturers, financial institutions, global vehicle manufacturers and enterprise technology providers, all of which are serviced by our strategically placed support and delivery locations around the globe.

 

We are also committed to serving Tier-2 and Tier-3 banks and financial institutions. We understand the unique challenges faced by these institutions, which is why we offer innovative cloud implementation solutions without any license fees, rapid deployments and the ability to scale. Further, our out-of-the-box, API-first products are designed to seamlessly integrate into existing systems, providing flexibility and scalability that smaller institutions often need. By prioritizing accessibility and ease of use, we empower smaller financial companies to enhance their service offerings and streamline operations, positioning ourselves as a trusted partner in their digital transformation journey.

 

Founded in 1997, NETSOL is headquartered in Encino, California. While the Company follows a global strategy for sales and delivery of its portfolio of solutions and services, it continues to maintain regional offices in the following locations:

 

·	North America	Encino, California and Austin, Texas
·	Europe	London Metropolitan area, Horsham and Flintshire
·	Asia Pacific	Lahore, Karachi, Bangkok, Beijing, Tianjin, Jakarta and Sydney
·	Middle East	Dubai

 

We believe that our strong technology solutions offer our customers a return on their investment and allows us to thrive in a hyper competitive and mature global marketplace. Our solutions are bolstered by our people. We believe that people are the drivers of success; therefore, we invest heavily in our hiring, training and retention of top-notch staff to ensure not only successful selling, but also the ongoing satisfaction of our clients. Taken together, this “selling and attentive servicing” approach creates a distinctive advantage for us and a unique value for our customers. We continue to underpin our proven and effective business model which is a combination of careful cost arbitrage, subject matter expertise, domain experience, scalability and proximity with our global and regional customers.

 

Expertise 

 

Our expertise in enterprise technology and financial application development has helped us emerge as a global player in the finance and leasing industry and enabled us to secure a broad footprint across the major markets of North America, Asia Pacific and Europe. The Asia Pacific region has particularly benefitted from the organic growth in the fast-developing leasing automation industry, which is still nascent as per Western standards. 

 

 

Domain Experience 

 

NETSOL is a dynamic leader and has been able to accumulate a wealth of experience in the global asset finance and leasing industry. We have built a large knowledge base which is regularly refined and updated to ensure the most up-to-date best practices and business solutions for the benefit of our clients and partners. We have a strong presence in the captive asset-finance domain. We have had continual operations for nearly three decades in Asia Pacific and Europe and over four decades in North America. 

 

Proximity with Global and Regional Customers 

 

We have offices across the world, located strategically to maintain close contact and proximity with our customers in various key markets. This has not only helped us strengthen our customer relationships, but also build a deeper understanding of local market dynamics. Simultaneously, we can extend services and support development through a combination of onsite and offsite resources. This approach has allowed us to offer blended rates to our customers by employing a unique and cost-effective global development model.  

 

While our business model is built around the development, implementation and maintenance of our suite of financial applications, we employ the same facilities and competencies to extend our services to related segments, including but not limited to: 

 

·

Information security

·

Digital solutions

·

AI, ML and data analytics

·

Generative AI

·

Policy and strategy

·

Emerging technologies|

·

Cloud services

·

Data engineering

 

Our global operations are broken down into three primary regions: North America, Europe and Asia Pacific. All of the subsidiaries are seamlessly integrated to function effectively with global delivery capabilities, cross selling to multinational asset finance companies, leveraging the centralized marketing and pre-sales organization, and a network of employees connected across the globe to support local and global customers and partners.  

 

OUR PRODUCTS AND SERVICES 

 

Covering the complete finance and leasing lifecycle starting from quotation origination through contract settlements, our products are designed and developed for highly flexible settings and are capable of dealing with multinational, multi-company, multi-asset, multi-lingual, multi-distributor and multi-manufacturer environments. Our solutions empower financial institutions to effectively manage their complex lending portfolios, enabling them to thrive in hyper-competitive global markets.   

 

Built on cutting-edge, modern technology, NETSOL’s unified Transcend™ Platform is an AI-powered digital retail and asset finance solution for automotive and equipment OEMs, auto captives, commercial lenders, dealers, brokers and financial institutions.

 

PRODUCTS AND SERVICES: TRANSCEND™ PLATFORM   

 

The Transcend™ Platform, powered by NETSOL, is an AI-driven unified ecosystem that revolutionizes how assets are sold, financed and leased. Designed to automate and optimize every step - from sales to originations to servicing, Transcend™ leverages AI and ML to drive predictive insights and smarter decision-making.

 

 

Transcend™ Retail (Formerly Known as Otoz®)

 

We revolutionize auto and equipment retail with a fully digital, integrated platform that simplifies the entire customer journey. From online purchasing to finance approval, Transcend™ Retail (formerly known as Otoz®) offers advanced retail and mobility solutions that keep dealerships or OEMs at the cutting edge of consumer expectations. 

 

Transcend™ Finance (Formerly Known as Ascent®)

 

We streamline finance and leasing operations with a comprehensive solution for originations, servicing and wholesale finance. Transcend™ Finance (formerly known as Ascent®) empowers automotive and equipment OEMs, auto captives, commercial lenders, dealers, brokers and financial institutions with end-to-end visibility and control, ensuring seamless workflows and accelerated business outcomes.

 

Originations

 

We streamline the entire origination process, from submission to approval, with advanced features such as real-time, AI-powered credit decisioning, automated deal flows and more.

 

Servicing

 

We enable financial institutions to attain real-time insights into portfolio performance, delinquencies and losses, enabling proactive portfolio management and strategic decision-making.

 

Wholesale finance

 

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

 

Transcend™ Marketplace (Formerly Known as Appex Now)

 

Transcend™ Marketplace (formerly known as Appex Now) offers a suite of flexible, component-based solutions that integrate seamlessly with the customer’s existing infrastructure.  Transcend™ Marketplace is a modular, API-first solution that addresses every aspect of finance and leasing using tools for calculations, document generation, loan origination and lending configurations.

 

Flex™  

 

Flex is an API-first, ready-to-use calculation and quotation engine. It is a one-stop solution that guarantees precise calculations at all stages of the contract lifecycle through various calculation types. All the calculations are parameter-driven, which helps perform simple, multi-dimensional or complex calculations based on the needs of a business. Flex™ has a lightning-fast onboarding process, which can take place in mere minutes.  

 

Hubex™  

 

Hubex™ is an API library that enables companies to standardize all their API integration procedures across multiple API services through a single integration. In addition to traditional lending companies, Hubex™ can also streamline the operations of dealerships, vendors and consultants. With a ready-to-use service, Hubex™ makes it easy for businesses to seamlessly connect with multiple APIs and achieve their desired outcomes. Pre-integrated services in the Hubex™ library include, but are not limited to, payment processing, bank account authentication, finance and insurance products, fraud check, know your customer (KYC) service, driver license verification, address validation, vehicle valuation and notification service. 

 

Index™ 

 

Index™ is a cloud-based parameter storage that smoothly runs all of a company’s core lending operations. It is an accumulation of all the master setups, including asset catalog and inventory, programs, rates, and profiles for lenders, dealers and multiple partners, in one centralized location for all business types. Index^TM can enhance delivery efficiency and program management for easy integration into all systems. 

 

Dock™ 

 

Dock™ is an advanced document generation tool that lets a company create accurate and professional-looking documents in just seconds. With Dock^TM’s template-based configuration, a company can set up placeholders for data, essentially simplifying the document creation process and reducing the chance of human error. Its API-first architecture ensures scalability, making it capable of handling any document generation task, from single documents to millions, with ease. 

 

 

Lane™

 

Lane™ offers a feature-rich, end-to-end order management system for asset leasing and loans and credit companies. Our platform covers all aspects, from conducting end-to-end sales to performing dealer and partner-related tasks and marketing-related activities. The system offers a variety of dashboards that provide vital information for dealers and partners while enabling quick order management and providing a way for users to record and submit a complete credit application for their clients. 

 

Link™

 

Link is a purpose-built platform designed for brokers, lenders, dealers and borrowers to work seamlessly together. With tailored solutions that simplify applications and automate key processes, Link^TM is designed to enhance customer relationships whilst making compliance effortless. This results in faster approvals, enriched customer experiences and stronger loyalty via elevated customer satisfaction.

 

Intermediary portals:

 

Broker portals

 

Efficiency and effectiveness are paramount for any broker. Managing disparate systems and processes can be cumbersome and time consuming, often leading to inefficiencies and missed opportunities. NETSOL offers a solution to these challenges by consolidating disparate processes into a single unified interface, revolutionizing the way a brokerage operates.

 

Lender portals

 

NETSOL’s lender-specific portals are designed to transform the lending process by enhancing risk management and driving profitability. Our advanced tools not only streamline loan origination, but also facilitate seamless communication and collaboration with the lending ecosystem. We empower a company’s lending process with intuitive and efficient lender portals designed for a seamless user experience.

 

Dealer portals

 

In the competitive automotive industry, dealers need efficient and comprehensive solutions to manage their operations effectively. NETSOL’s intermediary portals serve as digital command centers, providing dealers with a wide array of tools, resources and services to optimize every aspect of their business, from inventory management to sales and marketing.

 

Transcend™ Consultancy

 

Empowering businesses with Transcend™ Consulting Services, we offer expert guidance across critical areas like information security, data engineering and cloud services. Our team partners with businesses to create tailored solutions that drive innovation, efficiency and growth.

 

Transcend™ AI Labs

 

We are leading AI-driven innovation with our Transcend™ AI Labs, integrating advanced AI services into our product suite to solve the unique challenges of BFSI, equipment and auto OEMs and dealerships. Our tailored solutions drive industry-specific advancements, helping companies stay ahead in a competitive market.

 

 

Highlights

 

Listed below are a few of NETSOL’s highlights for the quarter ended December 31, 2024:

 

·

We generated nearly $1.6 million in services revenues from modifications and enhancements for multiple customers across various regions.

 

·

Under our Transcend Consultancy banner, we entered into an agreement with a client for the development of an application with a total contract value of $225,000.

 

·

We entered into an agreement with a U.K. based financial services provider to provide subscription services under our Transcend Marketplace banner with an estimated contract value of $250,000.

 

·

We continued to make significant progress in the implementation of our solution at the auto captive finance company of a notable US manufacturer in China.

 

Management has identified the following material trends affecting NETSOL.

 

Positive trends:

 

·

According to S&P Global Mobility, the forecast for new vehicle sales worldwide in 2025 is 89.6 million units, which is a modest 1.7% year-over-year growth in light vehicle sales.

 

·

According to S&P Global Mobility and Edmunds, the US automotive sales of new vehicles in 2025 are expected to be around 16.2 million units, which is a 1.2% to 1.4% increase from 2024. This would be the highest annual sales figure since 2019.

 

·

As of January 15, 2025, the U.S. inflation rate was 2.89% which is lower than the long-term average of 3.28%.

 

·

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

 

·

According to recent forecasts, China’s auto sales in 2025 are expected to reach approximately 32 million units representing a 3% year-over-year increase. (China Automobile Manufacturers Association)

 

·

The China Pakistan Economic Corridor (CPEC) investment, initiated by China, has exceeded $65 billion from the originally planned $46 billion, in Pakistan energy and infrastructure sectors. In June 2024, China authorized a new $2.3 billion loan at a discounted rate to Pakistan as a short-term loan.

 

·

The overall size of the mobility market in Europe and the United States is projected to increase over $425 billion combined, by 2035 or a compound CAGR of 5% from 2022. (Deloitte Global Automotive Mobility Market Simulation Tool)

 

·

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

 

·

The U.S. economy grew at an annual rate of 3% for the second quarter of 2024. This report reflects the U.S. economy to be resilient despite other pressures including inflation and higher interest rates. (Associated Press August 29, 2024)

 

·

The Federal Reserve cut interest rates by 50 basis points in September 2024 and by 25 basis points in December 2024.

 

·

The Russell Microcap index has returned an average of 13.7% during 2024. (Royce Investment Partners)

 

 

Negative trends:

 

·

The conflict in Gaza has disrupted the entire Middle East region since October 7, 2023. The conflict has expanded to neighboring nations such as Syria, Lebanon and Iran. The unrest and turmoil in the region is viewed unfavorably by the regional business community.

 

·

General economic conditions in our geographic markets; inflation, geopolitical tensions, including trade wars, tariffs and/or sanctions in geographic areas; and global conflicts or disasters that impact the global economy or one or more sectors of the global economy.

 

·

The imposition of tariffs on China and threatened tariffs on other US trading partners may affect the price of consumer goods including vehicles amongst others, negatively affecting the profitability of many of our customers.

 

·

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

      

·

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

 

·

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

 

·

The geo-political environment in South Asia will continue to influence Pakistan’s economic prospects. Pakistan’s political uncertainty has caused higher inflation with constant pressure on its currency being devalued against the US Dollar. According to a report issued by the World Bank, while marginal economic growth is expected in Pakistan, implementing an ambitious and credibly communicated economic reform plan is critical for a robust economic recovery. There is no guarantee that such reforms will be implemented. See Press Release, dated April 2, 2024, World Bank.

 

·

The US and EU have placed tariffs on a range of high-tech products from China including the US placing 100% tariffs on EV vehicles and 25% tariffs on EV batteries imported from China. (Center for Strategic and International Studies June 28, 2024). The US imposed additional tariffs on China in February 2025 with retaliatory tariffs from China on US goods.

 

 

CHANGES IN FINANCIAL CONDITION

 

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

 

The following table sets forth the items in our unaudited condensed consolidated statement of operations for the three months ended December 31, 2024 and 2023 as a percentage of revenues.

 

		For the Three Months
		Ended December 31,
		2024				%				2023
Net Revenues:
License fees		$	72,688				0.5	%		$	2,990,453
Subscription and support			8,642,629				55.6	%			6,827,781
Services			6,821,344				43.9	%			5,419,707
Total net revenues			15,536,661				100.0	%			15,237,941
Cost of revenues			8,616,320				55.5	%			8,062,204
Gross profit			6,920,341				44.5	%			7,175,737
Operating expenses:
Selling, general and administrative			7,073,622				45.5	%			5,807,494
Research and development cost			333,669				2.1	%			341,411
Total operating expenses			7,407,291				47.7	%			6,148,905
Income (loss) from operations			(486,950	)			-3.1	%			1,026,832
Other income and (expenses)
Interest expense			(236,386	)			-1.5	%			(290,322	)
Interest income			529,072				3.4	%			468,280
Gain (loss) on foreign currency exchange transactions			(698,392	)			-4.5	%			(14,617	)
Other income			38,064				0.2	%			(57,305	)
Total other income (expenses)			(367,642	)			-2.4	%			106,036
Net income before  income taxes			(854,592	)			-5.5	%			1,132,868
Income tax provision			(331,614	)			-2.1	%			(150,053	)
Net income			(1,186,206	)			-7.6	%			982,815
Non-controlling interest			39,164				0.3	%			(574,499	)
Net income attributable to NetSol		$	(1,147,042	)			-7.4	%		$	408,316
Net income per share:
Net income per common share
Basic		$	(0.10	)						$	0.04
Diluted		$	(0.10	)						$	0.04
Weighted average number of shares outstanding
Basic			11,484,298								11,372,819
Diluted			11,496,038								11,372,819

 

 

A significant portion of our business is conducted in currencies other than the U.S. dollar.  We operate in several geographical regions as described in Note 15 “Operating Segments” within the Notes to the Condensed Consolidated Financial Statements. Weakening of the value of the U.S. dollar compared to foreign currency exchange rates generally has the effect of increasing our revenues but also increasing our expenses denominated in currencies other than the U.S. dollar. Similarly, strengthening of the U.S. dollar compared to foreign currency exchange rates generally has the effect of reducing our revenues but also reducing our expenses denominated in currencies other than the U.S. dollar. We plan our business accordingly by deploying additional resources to areas of expansion, while continuing to monitor our overall expenditures given the economic uncertainties of our target markets. In order to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency fluctuations, we compare the changes in results from one period to another period using constant currency. In order to calculate our constant currency results, we apply the current period results to the prior period foreign currency exchange rates. In the table below, we present the change based on actual results in reported currency and in constant currency.

 

																		Favorable				Favorable				Total
																		(Unfavorable)				(Unfavorable)				Favorable
		For the Three Months																Change in				Change due to				(Unfavorable)
		Ended December 31,																Constant				Currency				Change as
		2024				%				2023				%				Currency				Fluctuation				Reported
Net Revenues:		$	15,536,661				100.0	%		$	15,237,941				100.0	%		$	136,930			$	161,790			$	298,720
Cost of revenues:			8,616,320				55.5	%			8,062,204				52.9	%			(412,633	)			(141,483	)			(554,116	)
Gross profit			6,920,341				44.5	%			7,175,737				47.1	%			(275,703	)			20,307				(255,396	)
Operating expenses:			7,407,291				47.7	%			6,148,905				40.4	%			(1,139,949	)			(118,437	)			(1,258,386	)
Income (loss) from operations		$	(486,950	)			-3.1	%		$	1,026,832				6.7	%		$	(1,415,652	)		$	(98,130	)		$	(1,513,782	)

 

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

 

		2024								2023
		Revenue				%				Revenue				%
North America		$	3,207,273				20.6	%		$	1,465,221				9.6	%
Europe			3,261,180				21.0	%			2,472,357				16.2	%
Asia-Pacific			9,068,208				58.4	%			11,300,363				74.2	%
Total		$	15,536,661				100.0	%		$	15,237,941				100.0	%

 

Revenues

 

License fees

 

License fees for the three months ended December 31, 2024 were $72,688 compared to $2,990,453 for the three months ended December 31, 2023 reflecting a decrease of $2,917,765 with a decrease in constant currency of $2,920,457. During the three months ended December 31, 2023, we recognized approximately $2,800,000 related to the sale of our NFS Ascent® CMS software to a renowned US auto manufacturer based in China.

 

 

Subscription and support

 

Subscription and support fees for the three months ended December 31, 2024 were $8,642,629 compared to $6,827,781 for the three months ended December 31, 2023 reflecting an increase of $1,814,848 with an increase in constant currency of $1,746,037. The increase includes a one-time catch up of approximately $1,000,000 from four of our customers. Subscription and support fees begin once a customer has “gone live” with our product. Subscription and support fees are recurring in nature, and we anticipate these fees to gradually increase as we implement both our NFS legacy products and NFS Ascent^®.

 

Services

 

Services income for the three months ended December 31, 2024 was $6,821,344 compared to $5,419,707 for the three months ended December 31, 2023 reflecting an increase of $1,401,637 with an increase in constant currency of $1,286,921. The increase is mainly due to implementation services in US and Europe.

 

Gross Profit

 

The gross profit was $6,920,341, for the three months ended December 31, 2024 compared with $7,175,737 for the three months ended December 31, 2023. This is a decrease of $255,396 with a decrease in constant currency of $275,703. The gross profit percentage for the three months ended December 31, 2024 also decreased to 44.5% from 47.1% for the three months ended December 31, 2023. The cost of sales was $8,616,320 for the three months ended December 31, 2024 compared to $8,062,204 for the three months ended December 31, 2023 for an increase of $554,116 and on a constant currency basis an increase of $412,633. As a percentage of sales, cost of sales increased from 52.9% for the three months ended December 31, 2023 to 55.5% for the three months ended December 31, 2024.

 

Salaries and consultant fees increased by $811,075 from $5,903,362 for the three months ended December 31, 2023 to $6,714,437 for the three months ended December 31, 2024 and on a constant currency basis increased by $701,239. The increase is due to annual salary raises. As a percentage of sales, salaries and consultant expense increased from 38.7% for the three months ended December 31, 2023 to 43.2% for the three months ended December 31, 2024.

 

Travel expenses were $601,251 for the three months ended December 31, 2024 compared to $748,072 for the three months ended December 31, 2023 for a decrease of $146,821 with a decrease in constant currency of $155,834. As a percentage of sales, travel expense decreased from 4.9% for the three months ended December 31, 2023 to 3.9% for the three months ended December 31, 2024.

 

Depreciation and amortization expense decreased to $237,882 compared to $264,374 for the three months ended December 31, 2023 or a decrease of $26,492 and on a constant currency basis a decrease of $30,214.

 

Other costs decreased to $1,062,750 for the three months ended December 31, 2024 compared to $1,146,396 for the three months ended December 31, 2023 or a decrease of $83,646 and on a constant currency basis a decrease of $102,558.

 

Operating Expenses

 

Operating expenses were $7,407,291 for the three months ended December 31, 2024 compared to $6,148,905, for the three months ended December 31, 2023 for an increase of $1,258,386 and on a constant currency basis an increase of $1,139,949. As a percentage of sales, it increased from 40.4% to 47.7%. The increase in operating expenses was primarily due to increases in selling and marketing expenses, salaries and wages, provision for doubtful accounts, and other general and administrative expenses.

 

Selling expenses were $2,662,397 for the three months ended December 31, 2024 compared to $1,784,510, for the three months ended December 31, 2023 for an increase of $877,887 and on a constant currency basis an increase of $831,571. The increase is mainly due to increases is salaries and consultants of approximately $586,000, due to annual raises and the hiring of additional marketing personnel. Other marketing expenses increased by approximately $108,000 due to the increase in marketing events.

 

 

General and administrative expenses were $4,411,225 for the three months ended December 31, 2024 compared to $4,022,984 for the three months ended December 31, 2023 or an increase of $388,241 and on a constant currency basis an increase of $321,393. During the three months ended December 31, 2024, salaries increased by $123,788 and increased $86,685 on a constant currency basis, bad debt expense increased $117,355 and increased $114,936 on a constant currency basis, and other general and administrative expenses increased $147,098 or increased by $119,772 on a constant currency basis.

 

Research and development cost was $333,669 for the three months ended December 31, 2024 compared to $341,411, for the three months ended December 31, 2023 for a decrease of $7,742 and on a constant currency basis a decrease of $13,015.

 

Income/Loss from Operations

 

Loss from operations was $486,950 for the three months ended December 31, 2024 compared to income from operations of $1,026,832 for the three months ended December 31, 2023. This represents an increase in loss of $1,513,782 with an increase in loss of $1,415,652 on a constant currency basis for the three months ended December 31, 2024 compared with the three months ended December 31, 2023. As a percentage of sales, loss from operations was 3.1% for the three months ended December 31, 2024 compared to income from operations of 6.7% for the three months ended December 31, 2023.

 

Other Income and Expense

 

Other expense was $367,642 for the three months ended December 31, 2024 compared to other income of $106,036 for the three months ended December 31, 2023. This represents an increase in other expense of $473,678 with an increase of $457,864 on a constant currency basis. The increase is primarily due to the foreign currency exchange transactions and interest income. The majority of the contracts with NetSol PK are either in U.S. dollars or Euros; therefore, the currency fluctuations will lead to foreign currency exchange gains or losses depending on the value of the PKR compared to the U.S. dollar and the Euro. During the three months ended December 31, 2024, we recognized a loss of $698,392 in foreign currency exchange transactions compared to a loss of $14,617 for the three months ended December 31, 2023. During the three months ended December 31, 2024, the value of the U.S. dollar increased 0.4% and the Euro decreased 6.6%, compared to the PKR. During the three months ended December 31, 2023, the value of the U.S. dollar decreased 2.8% and the Euro increased 1.5%, compared to the PKR.

 

Non-controlling Interest

 

For the three months ended December 31, 2024, the net loss attributable to non-controlling interest was $39,164, compared to net income of $574,499 for the three months ended December 31, 2023. The decrease in non-controlling interest is primarily due to the increase in net loss of NetSol PK and NetSol Innovation.

 

Net income (loss) attributable to NetSol

 

The net loss was $1,147,042 for the three months ended December 31, 2024 compared to net income of $408,316 for the three months ended December 31, 2023. This is an increase in loss of $1,555,358 with an increase of net loss of $1,520,406 on a constant currency basis, compared to the prior year. For the three months ended December 31, 2024, net loss per share was $0.10 for basic and diluted shares compared to net income per share of $0.04 for basic and diluted shares for the three months ended December 31, 2023.

 

 

Six Months Ended December 31, 2024 Compared to the Six Months Ended December 31, 2023

 

The following table sets forth the items in our unaudited condensed consolidated statement of operations for the six months ended December 31, 2024 and 2023 as a percentage of revenues.

 

		For the Six Months
		Ended December 31,
		2024				%				2023				%
Net Revenues:
License fees		$	73,917				0.2	%		$	4,270,902				14.5	%
Subscription and support			16,835,100				55.9	%			13,340,024				45.3	%
Services			13,226,142				43.9	%			11,869,196				40.3	%
Total net revenues			30,135,159				100.0	%			29,480,122				100.0	%
Cost of revenues			16,650,706				55.3	%			16,142,368				54.8	%
Gross profit			13,484,453				44.7	%			13,337,754				45.2	%
Operating expenses:
Selling, general and administrative			14,037,943				46.6	%			11,240,463				38.1	%
Research and development cost			693,618				2.3	%			719,830				2.4	%
Total operating expenses			14,731,561				48.9	%			11,960,293				40.6	%
Income (loss) from operations			(1,247,108	)			-4.1	%			1,377,461				4.7	%
Other income and (expenses)
Interest expense			(494,605	)			-1.6	%			(566,339	)			-1.9	%
Interest income			1,298,939				4.3	%			882,998				3.0	%
Gain (loss) on foreign currency exchange transactions			(155,847	)			-0.5	%			(148,870	)			-0.5	%
Other income			191,555				0.6	%			576				0.0	%
Total other income (expenses)			840,042				2.8	%			168,365				0.6	%
Net income before  income taxes			(407,066	)			-1.4	%			1,545,826				5.2	%
Income tax provision			(561,431	)			-1.9	%			(271,948	)			-0.9	%
Net income			(968,497	)			-3.2	%			1,273,878				4.3	%
Non-controlling interest			(107,750	)			-0.4	%			(834,672	)			-2.8	%
Net income attributable to NetSol		$	(1,076,247	)			-3.6	%		$	439,206				1.5	%
Net income per share:
Net income per common share
Basic		$	(0.09	)						$	0.04
Diluted		$	(0.09	)						$	0.04
Weighted average number of shares outstanding
Basic			11,456,996								11,359,338
Diluted			11,456,996								11,359,338

 

 

A significant portion of our business is conducted in currencies other than the U.S. dollar.  We operate in several geographical regions as described in Note 15 “Operating Segments” within the Notes to the Condensed Consolidated Financial Statements. Weakening of the value of the U.S. dollar compared to foreign currency exchange rates generally has the effect of increasing our revenues but also increasing our expenses denominated in currencies other than the U.S. dollar. Similarly, strengthening of the U.S. dollar compared to foreign currency exchange rates generally has the effect of reducing our revenues but also reducing our expenses denominated in currencies other than the U.S. dollar. We plan our business accordingly by deploying additional resources to areas of expansion, while continuing to monitor our overall expenditures given the economic uncertainties of our target markets. In order to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency fluctuations, we compare the changes in results from one period to another period using constant currency. In order to calculate our constant currency results, we apply the current period results to the prior period foreign currency exchange rates. In the table below, we present the change based on actual results in reported currency and in constant currency.

 

																		Favorable				Favorable				Total
																		(Unfavorable)				(Unfavorable)				Favorable
		For the Six Months																Change in				Change due to				(Unfavorable)
		Ended December 31,																Constant				Currency				Change as
		2024				%				2023				%				Currency				Fluctuation				Reported
Net Revenues:		$	30,135,159				100.0	%		$	29,480,122				100.0	%		$	357,270			$	297,767			$	655,037
Cost of revenues:			16,650,706				55.3	%			16,142,368				54.8	%			(109,219	)			(399,119	)			(508,338	)
Gross profit			13,484,453				44.7	%			13,337,754				45.2	%			248,051				(101,352	)			146,699
Operating expenses:			14,731,561				48.9	%			11,960,293				40.6	%			(2,435,341	)			(335,927	)			(2,771,268	)
Income (loss) from operations		$	(1,247,108	)			-4.1	%		$	1,377,461				4.7	%		$	(2,187,290	)		$	(437,279	)		$	(2,624,569	)

 

Net revenues for the six months ended December 31, 2024 and 2023 are broken out among the segments as follows:

 

		2024								2023
		Revenue				%				Revenue				%
North America		$	6,075,934				20.2	%		$	2,873,836				9.7	%
Europe			5,756,466				19.1	%			5,034,390				17.1	%
Asia-Pacific			18,302,759				60.7	%			21,571,896				73.2	%
Total		$	30,135,159				100.0	%		$	29,480,122				100.0	%

 

Revenues

 

License fees

 

License fees for the six months ended December 31, 2024 were $73,917 compared to $4,270,902 for the six months ended December 31, 2023 reflecting a decrease of $4,196,985 with a decrease in constant currency of $4,199,708. During the six months ended December 31, 2023, we recognized approximately $2,800,000 related to the sale of our NFS Ascent® CMS software to a renowned US auto manufacturer based in China and we recognized approximately $1,142,000 related to the license renewal with an existing customer.

 

 

Subscription and support

 

Subscription and support fees for the six months ended December 31, 2024 were $16,835,100 compared to $13,340,024 for the six months ended December 31, 2023 reflecting an increase of $3,495,076 with an increase in constant currency of $3,371,069. The increase includes a one-time catch up of approximately $1,693,000 from five of our customers. Subscription and support fees begin once a customer has “gone live” with our product. Subscription and support fees are recurring in nature, and we anticipate these fees to gradually increase as we implement both our NFS legacy products and NFS Ascent^®.

 

Services

 

Services income for the six months ended December 31, 2024 was $13,226,142 compared to $11,869,196 for the six months ended December 31, 2023 reflecting an increase of $1,356,946 with an increase in constant currency of $1,139,746. The increase is mainly due to implementation services in US and Europe.

 

Gross Profit

 

The gross profit was $13,484,453, for the six months ended December 31, 2024 compared with $13,337,754 for the six months ended December 31, 2023. This is an increase of $146,699 with an increase in constant currency of $248,051. The gross profit percentage for the six months ended December 31, 2024 decreased to 44.8% from 45.2% for the six months ended December 31, 2023. The cost of sales was $16,650,706 for the six months ended December 31, 2024 compared to $16,142,368 for the six months ended December 31, 2023 for an increase of $508,338 and on a constant currency basis an increase of $109,219. As a percentage of sales, cost of sales increased from 54.8% for the six months ended December 31, 2023 to 55.3% for the six months ended December 31, 2024.

 

Salaries and consultant fees increased by $1,056,666 from $11,861,505 for the six months ended December 31, 2023 to $12,918,171 for the six months ended December 31, 2024 and on a constant currency basis increased by $749,645. The increase is due to annual salary raises. As a percentage of sales, salaries and consultant expense increased from 40.2% for the six months ended December 31, 2023 to 42.9% for the six months ended December 31, 2024.

 

Travel expenses were $1,172,113 for the six months ended December 31, 2024 compared to $1,408,439 for the six months ended December 31, 2023 for a decrease of $236,326 with a decrease in constant currency of $260,082. As a percentage of sales, travel expense decreased from 4.8% for the six months ended December 31, 2023 to 3.9% for the six months ended December 31, 2024.

 

Depreciation and amortization expense decreased to $466,432 compared to $657,357 for the six months ended December 31, 2023 or a decrease of $190,925 and on a constant currency basis a decrease of $204,128.

 

Other costs decreased to $2,093,990 for the six months ended December 31, 2024 compared to $2,215,067 for the six months ended December 31, 2023 or a decrease of $121,077 and on a constant currency basis a decrease of $176,216.

 

Operating Expenses

 

Operating expenses were $14,731,561 for the six months ended December 31, 2024 compared to $11,960,293, for the six months ended December 31, 2023 for an increase of $2,771,268 and on a constant currency basis an increase of $2,435,341. As a percentage of sales, it increased from 40.6% to 48.9%. The increase in operating expenses was primarily due to increases in selling and marketing expenses, salaries and wages, provision for doubtful accounts, and other general and administrative expenses.

 

Selling expenses were $4,954,596 for the six months ended December 31, 2024 compared to $3,493,375, for the six months ended December 31, 2023 for an increase of $1,461,221 and on a constant currency basis an increase of $1,367,174. The increase is mainly due to increases is salaries and consultants of approximately $1,021,000, due to annual raises and the hiring of additional marketing personnel. Other marketing expenses increased by approximately $443,000 due to the increase in marketing events.

 

 

General and administrative expenses were $9,083,347 for the six months ended December 31, 2024 compared to $7,747,088 for the six months ended December 31, 2023 or an increase of $1,336,259 and on a constant currency basis an increase of $1,114,972. During the six months ended December 31, 2024, salaries increased by approximately $562,832 and increased $472,349 on a constant currency basis, bad debt expense increased $445,981 and $430,243 on a constant currency basis, and other general and administrative expenses increased approximately $327,446 or increased by $212,380 on a constant currency basis.

 

Research and development cost was $693,618 for the six months ended December 31, 2024 compared to $719,830, for the six months ended December 31, 2023 for a decrease of $26,212 and on a constant currency basis a decrease of $46,805.

 

Income/Loss from Operations

 

Loss from operations was $1,247,108 for the six months ended December 31, 2024 compared to income from operations of $1,377,461 for the six months ended December 31, 2023. This represents an increase in loss of $2,624,569 with an increase in loss of $2,187,290 on a constant currency basis for the six months ended December 31, 2024 compared with the six months ended December 31, 2023. As a percentage of sales, loss from operations was 4.1% for the six months ended December 31, 2024 compared to income from operations of 4.7% for the six months ended December 31, 2023.

 

Other Income and Expense

 

Other income was $840,042 for the six months ended December 31, 2024 compared to $168,365 for the six months ended December 31, 2023. This represents an increase of $671,677 with an increase of $638,009 on a constant currency basis. The increase is primarily due to the foreign currency exchange transactions and interest income. The majority of the contracts with NetSol PK are either in U.S. dollars or Euros; therefore, the currency fluctuations will lead to foreign currency exchange gains or losses depending on the value of the PKR compared to the U.S. dollar and the Euro. During the six months ended December 31, 2024, we recognized a loss of $155,847 in foreign currency exchange transactions compared to $148,870 for the six months ended December 31, 2023. During the six months ended December 31, 2024, the value of the U.S. dollar increased 0.2% and the Euro decreased 2.9%, compared to the PKR. During the six months ended December 31, 2023, the value of the U.S. dollar and the Euro decreased 2.6% and 1.2%, respectively, compared to the PKR. During the six months ended December 31, 2024, interest income was $1,298,939 compared to $882,998 for the six months ended December 31, 2023, for an increase of $415,941 and on constant currency basis an increase of $374,167. The increase in interest income was driven by a higher balance of interest-bearing funds during the period.

 

Non-controlling Interest

 

For the six months ended December 31, 2024, the net income attributable to non-controlling interest was $107,750, compared to $834,672 for the six months ended December 31, 2023. The decrease in non-controlling interest is primarily due to the increase in net loss of NetSol PK and NetSol Innovation.

 

Net income (loss) attributable to NetSol

 

The net loss was $1,076,247 for the six months ended December 31, 2024 compared to net income of $439,206 for the six months ended December 31, 2023. This is an increase in loss of $1,515,453 with an increase of $1,316,457 on a constant currency basis, compared to the prior year. For the six months ended December 31, 2024, net loss per share was $0.09 for basic and diluted shares compared to net income per share of $0.04 for basic and diluted shares for the six months ended December 31, 2023.

 

 

Non-GAAP Financial Measures

 

Regulation S-K Item 10(e), “Use of Non-GAAP Financial Measures in Commission Filings,” defines and prescribes the conditions for use of non-GAAP financial information. Our measures of adjusted EBITDA and adjusted EBITDA per basic and diluted share meet the definition of a non-GAAP financial measure.

 

We define the non-GAAP measures as follows:

 

·

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

·

Non-GAAP adjusted EBITDA is EBITDA plus stock-based compensation expense.

·

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

 

We use non-GAAP measures internally to evaluate the business and believe that presenting non-GAAP measures provides useful information to investors regarding the underlying business trends and performance of our ongoing operations as well as useful metrics for monitoring our performance and evaluating it against industry peers. The non-GAAP financial measures presented should be used in addition to, and in conjunction with, results presented in accordance with GAAP, and should not be relied upon to the exclusion of GAAP financial measures. Management strongly encourages investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure in evaluating the Company.

 

The non-GAAP measures reflect adjustments based on the following items:

 

EBITDA: We report EBITDA as a non-GAAP metric by excluding the effect of net interest expense, income tax expense, depreciation and amortization from net income or loss because doing so makes internal comparisons to our historical operating results more consistent. In addition, we believe providing an EBITDA calculation is a more useful comparison of our operating results to the operating results of our peers.

 

Stock-based compensation expense: We have excluded the effect of stock-based compensation expense from the non-GAAP adjusted EBITDA and non-GAAP adjusted EBITDA per basic and diluted share calculations. Although stock-based compensation expense is calculated in accordance with current GAAP and constitutes an ongoing and recurring expense, such expense is excluded from non-GAAP results because it is not an expense which generally requires cash settlement by NetSol, and therefore is not used by us to assess the profitability of our operations. We also believe the exclusion of stock-based compensation expense provides a more useful comparison of our operating results to the operating results of our peers.

 

Non-controlling interest: We add back the non-controlling interest in calculating gross adjusted EBITDA and then subtract out the income taxes, depreciation and amortization and net interest expense attributable to the non-controlling interest to arrive at a net adjusted EBITDA.

 

 

Our reconciliation of the non-GAAP financial measures of adjusted EBITDA and non-GAAP earnings per basic and diluted share to the most comparable GAAP measures for the three and six months ended December 31, 2024 and 2023 are as follows: 

 

		For the Three Months Ended December 31,								For the Six Months Ended December 31,
		2024				2023				2024				2023
Net Income (loss) attributable to NetSol		$	(1,147,042	)		$	408,316			$	(1,076,247	)		$	439,206
Non-controlling interest			(39,164	)			574,499				107,750				834,672
Income taxes			331,614				150,053				561,431				271,948
Depreciation and amortization			372,585				429,163				738,582				959,949
Interest expense			236,386				290,322				494,605				566,339
Interest (income)			(529,072	)			(468,280	)			(1,298,939	)			(882,998	)
EBITDA		$	(774,693	)		$	1,384,073			$	(472,818	)		$	2,189,116
Add back:
Non-cash stock-based compensation			47,355				51,433				95,134				111,787
Adjusted EBITDA, gross		$	(727,338	)		$	1,435,506			$	(377,684	)		$	2,300,903
Less non-controlling interest (a)			(61,529	)			(710,171	)			(207,310	)			(1,109,611	)
Adjusted EBITDA, net		$	(788,867	)		$	725,335			$	(584,994	)		$	1,191,292
Weighted Average number of shares outstanding
Basic			11,484,298				11,372,819				11,456,996				11,359,338
Diluted			11,484,298				11,372,819				11,456,996				11,359,338
Basic adjusted EBITDA		$	(0.07	)		$	0.06			$	(0.05	)		$	0.10
Diluted adjusted EBITDA		$	(0.07	)		$	0.06			$	(0.05	)		$	0.10
(a)The reconciliation of adjusted EBITDA of non-controlling interest to net income attributable to non-controlling interest is as follows
Net Income (loss) attributable to non-controlling interest		$	(39,164	)		$	574,499			$	107,750			$	834,672
Income Taxes			102,414				75,407				173,001				111,784
Depreciation and amortization			92,546				109,765				181,681				251,116
Interest expense			68,636				91,295				147,828				177,184
Interest (income)			(165,365	)			(144,578	)			(408,012	)			(272,669	)
EBITDA		$	59,067			$	706,388			$	202,248			$	1,102,087
Add back:
Non-cash stock-based compensation			2,462				3,783				5,062				7,524
Adjusted EBITDA of non-controlling interest		$	61,529			$	710,171			$	207,310			$	1,109,611

 

 

LIQUIDITY AND CAPITAL RESOURCES

 

Our cash position was $21,270,642 at December 31, 2024, compared to $19,127,165 at June 30, 2024.

 

Net cash provided by operating activities was $369,716 for the six months ended December 31, 2024 compared to $604,684 for the six months ended December 31, 2023. At December 31, 2024, we had current assets of $42,953,392 and current liabilities of $19,955,153. We had accounts receivable of $7,829,823 at December 31, 2024 compared to $13,049,614 at June 30, 2024. We had revenues in excess of billings of $11,438,977 at December 31, 2024 compared to $13,638,547 at June 30, 2024 of which $777,428 and $954,029 is shown as long term as of December 31, 2024 and June 30, 2024, respectively. The long-term portion was discounted by $115,126 and $152,446 at December 31, 2024 and June 30, 2024, respectively, using the discounted cash flow method with interest rates ranging from 7.3% to 17.5%. During the six months ended December 31, 2024, our revenues in excess of billings were reclassified to accounts receivable pursuant to billing requirements detailed in each contract. The combined totals for accounts receivable and revenues in excess of billings decreased by $4,508,691 from $26,688,161 at June 30, 2024 to $19,268,800 at December 31, 2024. Accounts payable and accrued expenses, and current portions of loans and lease obligations amounted to $7,332,560 and $8,784,232, respectively at December 31, 2024. Accounts payable and accrued expenses, and current portions of loans and lease obligations amounted to $8,232,342 and $6,276,125, respectively, at June 30, 2024.

 

The average days sales outstanding for the six months ended December 31, 2024 and 2023 were 140 and 147 days, respectively, for each period. The days sales outstanding have been calculated by taking into consideration the average combined balances of accounts receivable and revenues in excess of billings.

 

Net cash used in investing activities was $531,477 for the six months ended December 31, 2024, compared to $569,336 for the six months ended December 31, 2023. We had purchases of property and equipment of $568,134 compared to $570,584 for the six months ended December 31, 2023.

 

Net cash provided by financing activities was $2,637,763 for the six months ended December 31, 2024, compared to net cash used in financing activities of $27,359 for the six months ended December 31, 2023. During the six months ended December 31, 2024, we received bank proceeds of $2,676,932 compared to $135,123 during the six months ended December 31, 2023. During the six months ended December 31, 2024, we had net payments for bank loans and finance leases of $162,370 compared to $162,482 for the six months ended December 31, 2023. Employees of the Company exercised 200,00 options of common stock for $430,000. NetSol PK, a subsidiary of the Company, paid a dividend of $306,799 to the non-controlling interest. We are operating in various geographical regions of the world through our various subsidiaries. Those subsidiaries have financial arrangements from various financial institutions to meet both their short and long-term funding requirements. These loans will become due at different maturity dates as described in Note 12 of the financial statements. We are in compliance with the covenants of the financial arrangements and there is no default, which may lead to early payment of these obligations. We anticipate paying back all these obligations on their respective due dates from its own sources.

 

We typically fund the cash requirements for our operations in the U.S. through our license, services, and subscription and support agreements, intercompany charges for corporate services, and through the exercise of options and warrants. As of December 31, 2024, we had approximately $21.3 million of cash, cash equivalents and marketable securities of which approximately $20 million is held by our foreign subsidiaries. As of June 30, 2024, we had approximately $19.1 million of cash, cash equivalents and marketable securities of which approximately $18.2 million is held by our foreign subsidiaries.

 

We remain open to strategic relationships that would provide value added benefits. The focus will remain on continuously improving cash reserves internally and reduced reliance on external capital raise.

 

As a growing company, we have on-going capital expenditure needs based on our short term and long-term business plans. Although our requirements for capital expenses vary from time to time, for the next 12 months, we anticipate needing $2.5 million for APAC, U.S. and Europe new business development activities and infrastructure enhancements, which we expect to provide from current operations.

 

 

Financial Covenants

 

Our UK based subsidiary, NTE, has an approved overdraft facility of £300,000 ($375,000) which requires that the aggregate amount of invoiced trade debtors (net of provisions for bad and doubtful debts and excluding intra-group debtors) of NTE, not exceeding 90 days old, will not be less than an amount equal to 200% of the facility. The Pakistani subsidiary, NetSol PK has an approved facility for export refinance from Askari Bank Limited amounting to Rupees 500 million ($1,793,915) and a running finance facility of Rupees 3.6 million ($12,740). NetSol PK has an approved facility for export refinance from another Habib Metro Bank Limited amounting to Rupees 1.3 billion ($4,664,180). These facilities require NetSol PK to maintain a long-term debt equity ratio of 60:40 and the current ratio of 1:1. NetSol PK also has an approved export refinance facility of Rs. 380 million ($1,363,375) from Samba Bank Limited. During the loan tenure, these two facilities 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 the date of this report, we are in compliance with the financial covenants associated with our borrowings. The maturity dates of the borrowings of respective subsidiaries may accelerate if they do not comply with these covenants. In case of any change in control in subsidiaries, they may have to repay their respective credit facilities.

 

CRITICAL ACCOUNTING POLICIES

 

Our condensed consolidated financial statements are prepared applying certain critical accounting policies. The SEC defines “critical accounting policies” as those that require application of management’s most difficult, subjective, or complex judgments. Critical accounting policies require numerous estimates and strategic or economic assumptions that may prove inaccurate or subject to variations and may significantly affect our reported results and financial position for the period or in future periods. Changes in underlying factors, assumptions, or estimates in any of these areas could have a material impact on our future financial condition and results of operations. Our financial statements are prepared in accordance with U.S. GAAP, and they conform to general practices in our industry. We apply critical accounting policies consistently from period to period and intend that any change in methodology occur in an appropriate manner. There have been no significant changes to our accounting policies and estimates as discussed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024. 

 

RECENT ACCOUNTING PRONOUNCEMENTS

 

For information with respect to recent accounting pronouncements and the impact of these pronouncements on our consolidated financial statements, see Note 2 of Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risks.

 

None.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, the Chief Financial Officer and Chief Executive Officer concluded that our disclosure controls and procedures were effective.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal controls over financial reporting during the three months ended December 31, 2024, that have materially affected, or are reasonable likely to materially affect, the Company’s internal control over financial reporting (as defined in Exchange Act Rules 13a – 15(f) and 15d – 15(f)).

 

 

PART II OTHER INFORMATION

 

Item 1. Legal Proceedings

 

NA

 

Item 1A. Risk Factors

 

Other than stated below, as of the date of this Quarterly Report on Form 10-Q, there have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K for the year ended June 30, 2024, filed with the SEC on September 30, 2024. Any of such factors could result in a significant or material adverse effect on our result of operations or financial conditions. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.

 

The imposition of tariffs on China and threatened tariffs on other US trading partners may affect the price of consumer goods including vehicles amongst others, negatively the profitability of many of our customers. Unilateral trade actions by the US may also result in companies from affected countries being unwilling to enter into agreements with US based or owned companies resulting in a potential decline in revenue.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

None.

 

Item 6. Exhibits

 

31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (CEO)
31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (CFO)
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (CEO)
32.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (CFO)
101.	INS  Inline XBRL Instance Document
101.	SCH Inline XBRL Taxonomy Extension Schema Document
101.	CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.	DFE Inline XBRL Taxonomy Extension definition Linkbase Document
101.	LAB Inline XBRL Taxonomy Extension Label Linkbase Document
101.	PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

NETSOL TECHNOLOGIES, INC.

 

Date:	February 13, 2025	/s/ Najeeb U. Ghauri
		NAJEEB U. GHAURI
		Chief Executive Officer
Date:	February 13, 2025	/s/ Roger K. Almond
		ROGER K. ALMOND
		Chief Financial Officer
		Principal Accounting Officer

 

 

Exhibit 31.1

 

Certification Pursuant to 18 U.S.C. Section 1350 

As Adopted Pursuant to 

Section 302 of the Sarbanes-Oxley Act of 2002

 

I, Najeeb Ghauri, certify that:

 

(1) I have reviewed this quarterly report on Form 10-Q for the quarter ended December 31, 2024 of NetSol Technologies, Inc., (“Registrant”).

 

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

 

(3) Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

(4) The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) designed such disclosure controls and procedure, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) disclosed in this report any changes in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and;

 

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

 

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: February 13, 2025	/s/ Najeeb Ghauri
	Najeeb Ghauri,
	Chief Executive Officer
	Principal executive officer

 

 

 

Exhibit 31.2

 

Certification Pursuant to 18 U.S.C. Section 1350 

As Adopted Pursuant to 

Section 302 of the Sarbanes-Oxley Act of 2002

 

I, Roger K. Almond, certify that:

 

(1) I have reviewed this quarterly report on Form 10-Q for the quarter ended December 31, 2024 of NetSol Technologies, Inc., (“Registrant”).

 

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

 

(3) Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

(4) The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) designed such disclosure controls and procedure, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) disclosed in this report any changes in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and;

 

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

 

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: February 13, 2025	/s/ Roger K. Almond
	Roger K. Almond
	Chief Financial Officer
	Principal Accounting Officer

 

 

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, 

AS ADOPTED PURSUANT BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of NetSol Technologies, Inc. on Form 10-Q for the period ending December 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Najeeb Ghauri, Chief Executive Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1) The Report fully complies with the requirements of section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and,

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

Date: February 13, 2025

 

/s/ Najeeb Ghauri
Najeeb Ghauri,
Chief Executive Officer
Principal Executive Officer

 

 

 

Exhibit 32.2

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, 

AS ADOPTED PURSUANT BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of NetSol Technologies, Inc. on Form 10-Q for the period ending December 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Roger K. Almond, Chief Financial Officer, and Principal Accounting Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1) The Report fully complies with the requirements of section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and,

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

Date: February 13, 2025

 

/s/ Roger K. Almond
Roger K. Almond
Chief Financial Officer
Principal Accounting Officer

 

 

v3.25.0.1

Cover - $ / shares	6 Months Ended
	Dec. 31, 2024	Feb. 05, 2025
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Dec. 31, 2024
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2025
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	16000 Ventura Blvd.
Entity Address, Address Line Two	Suite 770
Entity Address, City or Town	Encino
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	91436
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		11,670,015
Entity Listing, Par Value Per Share	$ 0.01

v3.25.0.1

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Dec. 31, 2024	Jun. 30, 2024
Current assets:
Cash and cash equivalents	$ 21,270,642	$ 19,127,165
Accounts receivable, net of allowance of $17,028 and $398,809	7,829,823	13,049,614
Revenues in excess of billings, net of allowance of $595,875 and $116,148	10,661,549	12,684,518
Other current assets	3,191,378	2,600,786
Total current assets	42,953,392	47,462,083
Revenues in excess of billings, net - long term	777,428	954,029
Property and equipment, net	4,934,498	5,106,842
Right of use assets - operating leases	1,069,948	1,328,624
Other assets	32,339	32,340
Intangible assets, net
Goodwill	9,302,524	9,302,524
Total assets	59,070,129	64,186,442
Current liabilities:
Accounts payable and accrued expenses	7,332,560	8,232,342
Current portion of loans and obligations under finance leases	8,784,232	6,276,125
Current portion of operating lease obligations	518,075	608,202
Unearned revenue	3,320,286	8,752,153
Total current liabilities	19,955,153	23,868,822
Loans and obligations under finance leases; less current maturities	86,951	95,771
Operating lease obligations; less current maturities	512,062	688,749
Total liabilities	20,554,166	24,653,342
Stockholders’ equity:
Preferred stock, $.01 par value; 500,000 shares authorized;
Common stock, $.01 par value; 14,500,000 shares authorized; 12,589,046  shares issued and 11,650,015  outstanding as of December 31, 2024 , 12,359,922  shares issued and 11,420,891  outstanding as of June 30, 2024	125,894	123,602
Additional paid-in-capital	129,194,697	128,783,865
Treasury stock (at cost, 939,031 shares as of December 31, 2024  and  June 30, 2024)	(3,920,856)	(3,920,856)
Accumulated deficit	(45,288,560)	(44,212,313)
Other comprehensive loss	(46,187,766)	(45,935,616)
Total NetSol stockholders’ equity	33,923,409	34,838,682
Non-controlling interest	4,592,554	4,694,418
Total stockholders’ equity	38,515,963	39,533,100
Total liabilities and stockholders’ equity	$ 59,070,129	$ 64,186,442

v3.25.0.1

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)	Dec. 31, 2024	Jun. 30, 2024
Statement of Financial Position [Abstract]
Accounts receivable, allowance	$ 17,028	$ 398,809
Revenues in excess of billings, allowance	$ 595,875	$ 116,148
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	12,589,046	12,359,922
Common stock, shares outstanding	11,650,015	11,420,891
Treasury stock, shares	939,031	939,031

v3.25.0.1

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2024	Dec. 31, 2023
Net Revenues:
Total net revenues	$ 15,536,661	$ 15,237,941	$ 30,135,159	$ 29,480,122
Cost of revenues	8,616,320	8,062,204	16,650,706	16,142,368
Gross profit	6,920,341	7,175,737	13,484,453	13,337,754
Operating expenses:
Selling, general and administrative	7,073,622	5,807,494	14,037,943	11,240,463
Research and development cost	333,669	341,411	693,618	719,830
Total operating expenses	7,407,291	6,148,905	14,731,561	11,960,293
Income (loss) from operations	(486,950)	1,026,832	(1,247,108)	1,377,461
Other income and (expenses)
Interest expense	(236,386)	(290,322)	(494,605)	(566,339)
Interest income	529,072	468,280	1,298,939	882,998
Gain (loss) on foreign currency exchange transactions	(698,392)	(14,617)	(155,847)	(148,870)
Other income	38,064	(57,305)	191,555	576
Total other income (expenses)	(367,642)	106,036	840,042	168,365
Net income before  income taxes	(854,592)	1,132,868	(407,066)	1,545,826
Income tax provision	(331,614)	(150,053)	(561,431)	(271,948)
Net income	(1,186,206)	982,815	(968,497)	1,273,878
Non-controlling interest	39,164	(574,499)	(107,750)	(834,672)
Net income attributable to NetSol	$ (1,147,042)	$ 408,316	$ (1,076,247)	$ 439,206
Net income per share:
Basic	$ (0.10)	$ 0.04	$ (0.09)	$ 0.04
Diluted	$ (0.10)	$ 0.04	$ (0.09)	$ 0.04
Weighted average number of shares outstanding
Basic	11,484,298	11,372,819	11,456,996	11,359,338
Diluted	11,484,298	11,372,819	11,456,996	11,359,338
License [Member]
Net Revenues:
Total net revenues	$ 72,688	$ 2,990,453	$ 73,917	$ 4,270,902
Subscription and Support [Member]
Net Revenues:
Total net revenues	8,642,629	6,827,781	16,835,100	13,340,024
Service [Member]
Net Revenues:
Total net revenues	$ 6,821,344	$ 5,419,707	$ 13,226,142	$ 11,869,196

v3.25.0.1

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2024	Dec. 31, 2023
Income Statement [Abstract]
Net income	$ (1,147,042)	$ 408,316	$ (1,076,247)	$ 439,206
Other comprehensive income (loss):
Translation adjustment	(185,914)	840,165	(258,097)	370,116
Translation adjustment attributable to non-controlling interest	47,171	(298,772)	5,947	(265,269)
Net translation adjustment	(138,743)	541,393	(252,150)	104,847
Comprehensive income (loss) attributable to NetSol	$ (1,285,785)	$ 949,709	$ (1,328,397)	$ 544,053

v3.25.0.1

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock, Common [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Noncontrolling Interest [Member]	Total
Balance at Jun. 30, 2023	$ 122,850	$ 128,476,048	$ (3,920,856)	$ (44,896,186)	$ (45,975,156)	$ 2,975,053	$ 36,781,753
Balance, shares at Jun. 30, 2023	12,284,887
Common stock issued for: Services	$ 270	48,530					48,800
Common stock issued for: Services, shares	26,963
Fair value of subsidiary options issued		11,554					11,554
Foreign currency translation adjustment					(436,546)	(33,503)	(470,049)
Net income (loss) for the year				30,890		260,173	291,063
Balance at Sep. 30, 2023	$ 123,120	128,536,132	(3,920,856)	(44,865,296)	(46,411,702)	3,201,723	36,663,121
Balance, shares at Sep. 30, 2023	12,311,850
Balance at Jun. 30, 2023	$ 122,850	128,476,048	(3,920,856)	(44,896,186)	(45,975,156)	2,975,053	36,781,753
Balance, shares at Jun. 30, 2023	12,284,887
Net income (loss) for the year							1,273,878
Balance at Dec. 31, 2023	$ 123,301	128,587,384	(3,920,856)	(44,456,980)	(45,870,309)	4,074,994	38,537,534
Balance, shares at Dec. 31, 2023	12,329,919
Balance at Sep. 30, 2023	$ 123,120	128,536,132	(3,920,856)	(44,865,296)	(46,411,702)	3,201,723	36,663,121
Balance, shares at Sep. 30, 2023	12,311,850
Common stock issued for: Services	$ 181	39,569					39,750
Common stock issued for: Services, shares	18,069
Fair value of subsidiary options issued		11,683					11,683
Foreign currency translation adjustment					541,393	298,772	840,165
Net income (loss) for the year				408,316		574,499	982,815
Balance at Dec. 31, 2023	$ 123,301	128,587,384	(3,920,856)	(44,456,980)	(45,870,309)	4,074,994	38,537,534
Balance, shares at Dec. 31, 2023	12,329,919
Balance at Jun. 30, 2024	$ 123,602	128,783,865	(3,920,856)	(44,212,313)	(45,935,616)	4,694,418	39,533,100
Balance, shares at Jun. 30, 2024	12,359,922
Exercise of common stock options	$ 100	21,400					21,500
Exercise of common stock options, shares	10,000
Common stock issued for: Services	$ 140	39,610					39,750
Common stock issued for: Services, shares	13,950
Fair value of subsidiary options issued		8,029					8,029
Acquisition of non-controlling interest in subsidiary		(143,014)				135,119	(7,895)
Foreign currency translation adjustment					(113,407)	41,224	(72,183)
Net income (loss) for the year				70,795		146,914	217,709
Balance at Sep. 30, 2024	$ 123,842	128,709,890	(3,920,856)	(44,141,518)	(46,049,023)	5,017,675	39,740,010
Balance, shares at Sep. 30, 2024	12,383,872
Balance at Jun. 30, 2024	$ 123,602	128,783,865	(3,920,856)	(44,212,313)	(45,935,616)	4,694,418	$ 39,533,100
Balance, shares at Jun. 30, 2024	12,359,922
Exercise of common stock options, shares							200,000
Net income (loss) for the year							$ (968,497)
Balance at Dec. 31, 2024	$ 125,894	129,194,697	(3,920,856)	(45,288,560)	(46,187,766)	4,592,554	38,515,963
Balance, shares at Dec. 31, 2024	12,589,046
Balance at Sep. 30, 2024	$ 123,842	128,709,890	(3,920,856)	(44,141,518)	(46,049,023)	5,017,675	39,740,010
Balance, shares at Sep. 30, 2024	12,383,872
Exercise of common stock options	$ 1,900	406,600					$ 408,500
Exercise of common stock options, shares	190,000						190,000
Common stock issued for: Services	$ 152	39,598					$ 39,750
Common stock issued for: Services, shares	15,174
Fair value of subsidiary options issued		7,605					7,605
Acquisition of non-controlling interest in subsidiary		31,004				(31,987)	(983)
Dividend to non-controlling interest						(306,799)	(306,799)
Foreign currency translation adjustment					(138,743)	(47,171)	(185,914)
Net income (loss) for the year				(1,147,042)		(39,164)	(1,186,206)
Balance at Dec. 31, 2024	$ 125,894	$ 129,194,697	$ (3,920,856)	$ (45,288,560)	$ (46,187,766)	$ 4,592,554	$ 38,515,963
Balance, shares at Dec. 31, 2024	12,589,046

v3.25.0.1

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Dec. 31, 2024	Dec. 31, 2023
Cash flows from operating activities:
Net income (loss)	$ (968,497)	$ 1,273,878
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	738,582	959,949
Provision (reversal) for bad debts	475,172	29,191
Gain on sale of assets	(25,084)	(98)
Stock based compensation	95,134	111,787
Changes in operating assets and liabilities:
Accounts receivable	4,405,610	5,722,791
Revenues in excess of billing	2,688,774	(4,239,762)
Other current assets	(170,856)	329,171
Accounts payable and accrued expenses	(878,148)	72,501
Unearned revenue	(5,990,971)	(3,654,724)
Net cash provided by operating activities	369,716	604,684
Cash flows from investing activities:
Purchases of property and equipment	(568,134)	(570,584)
Sales of property and equipment	45,535	1,248
Purchase of subsidiary shares	(8,878)
Net cash used in investing activities	(531,477)	(569,336)
Cash flows from financing activities:
Proceeds from the exercise of stock options and warrants	430,000
Dividend paid by subsidiary to non-controlling interest	(306,799)
Proceeds from bank loans	2,676,932	135,123
Payments on finance lease obligations and loans - net	(162,370)	(162,482)
Net cash provided by (used in) financing activities	2,637,763	(27,359)
Effect of exchange rate changes	(332,525)	118,273
Net increase (decrease) in cash and cash equivalents	2,143,477	126,262
Cash and cash equivalents at beginning of the period	19,127,165	15,533,254
Cash and cash equivalents at end of period	21,270,642	15,659,516
Cash paid during the period for:
Interest	503,375	670,330
Taxes	$ 942,413	$ 342,643

v3.25.0.1

BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION	6 Months Ended
	Dec. 31, 2024
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 is a business services and asset finance solutions provider that designs, develops, markets, and exports proprietary software products to customers in the automobile financing and leasing, banking, and financial services industries worldwide. 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, 2024. 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”)  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”)   Otoz, Inc. (“Otoz®”)   Majority-owned Subsidiaries   NetSol Technologies, Ltd. (“NetSol PK”)  NetSol Innovation (Private) Limited (“NetSol Innovation”)  NETSOL Ascent Middle East Computer Equipment Trading LLC (“Namecet”)  NetSol Technologies Thailand Limited (“NetSol Thai”)  Otoz (Thailand) Limited (“Otoz® Thai”)     NETSOL TECHNOLOGIES, INC.  Notes to Condensed Consolidated Financial Statements  December 31, 2024  (Unaudited)

v3.25.0.1

ACCOUNTING POLICIES	6 Months Ended
	Dec. 31, 2024
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.   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 ($68,493) in each bank and in the UK for GBP 85,000 ($106,250) in each bank. The Company maintains three bank accounts in China and nine bank accounts in the UK. As of December 31, 2024, and June 30, 2024, the Company had uninsured deposits related to cash deposits in accounts maintained within foreign entities of approximately $20,027,837 and $18,182,002, respectively. The Company has not experienced any losses in such accounts.   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.” ASC 820-10 defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. For certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and short-term debt, the carrying amounts approximate fair value due to their relatively short maturities. The carrying amounts of the long-term debt approximate their fair values based on current interest rates for instruments with similar characteristics.   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.     NETSOL TECHNOLOGIES, INC.  Notes to Condensed Consolidated Financial Statements  December 31, 2024  (Unaudited)   The Company’s financial assets that were measured at fair value on a recurring basis as of December 31, 2024, 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   $      -     $      -     $ 777,428     $ 777,428   Total   $ -     $ -     $ 777,428     $ 777,428     The Company’s financial assets that were measured at fair value on a recurring basis as of June 30, 2024, are as follows:       Level 1     Level 2     Level 3     Total Assets   Revenues in excess of billings - long term   $      -     $      -     $ 954,029     $ 954,029   Total   $ -     $ -     $ 954,029     $ 954,029     The reconciliation from June 30, 2024 to December 31, 2024 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, 2024   $ 1,106,475     $ (152,446 )   $ 954,029   Amortization during the period     -       36,734       36,734   Transfers to short term     (206,964 )     -       (206,964 ) Effect of Translation Adjustment     (6,957 )     586       (6,371 ) Balance at December 31, 2024   $ 892,554     $ (115,126 )   $ 777,428     Management analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity” and ASC 815, “Derivatives and Hedging.” Derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives. The effects of interactions between embedded derivatives are calculated and accounted for in arriving at the overall fair value of the financial instruments. In addition, the fair values of freestanding derivative instruments such as warrants and option derivatives are valued using the Black-Scholes model.   Recent Accounting Standards:   In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. ASU 2023-07 is effective for the Company’s Annual Report on Form 10-K for the fiscal year ending June 30, 2025, and subsequent interim periods, with early adoption permitted. We are evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.     NETSOL TECHNOLOGIES, INC.  Notes to Condensed Consolidated Financial Statements  December 31, 2024  (Unaudited)   In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance transparency and decision usefulness of income tax disclosures, particularly around rate reconciliations and income taxes paid information. ASU 2023-09 is effective for our Annual Report on Form 10-K for the fiscal year ending June 30, 2026, on a prospective basis, with early adoption permitted. We are evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.   All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable.

v3.25.0.1

REVENUE RECOGNITION	6 Months Ended
	Dec. 31, 2024
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.   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.     NETSOL TECHNOLOGIES, INC.  Notes to Condensed Consolidated Financial Statements  December 31, 2024  (Unaudited)   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, most 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. Several 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.   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.     NETSOL TECHNOLOGIES, INC.  Notes to Condensed Consolidated Financial Statements  December 31, 2024  (Unaudited)   The Company’s disaggregated revenue by category is as follows:    SCHEDULE OF DISAGGREGATED REVENUE BY CATEGORY     2024     2023     2024     2023       For the Three Months Ended December 31,     For the Six Months Ended December 31,       2024     2023     2024     2023   Core:                                 License   $ 72,688     $ 2,990,453     $ 73,917     $ 4,270,902   Subscription and support     8,642,629       6,827,781       16,835,100       13,340,024   Services     5,872,590       4,114,077       11,399,225       9,088,631   Total core revenue, net     14,587,907       13,932,311       28,308,242       26,699,557                                     Non-Core:                                 Services     948,754       1,305,630       1,826,917       2,780,565   Total non-core revenue, net     948,754       1,305,630       1,826,917       2,780,565                                     Total net revenue   $ 15,536,661     $ 15,237,941     $ 30,135,159     $ 29,480,122     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 “person-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 person-days required to complete implementation and customization services each reporting period.   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. Several internal and external factors can affect these estimates, including labor rates, utilization, specification variances and testing requirement changes.     NETSOL TECHNOLOGIES, INC.  Notes to Condensed Consolidated Financial Statements  December 31, 2024  (Unaudited)   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      As of     As of       December 31, 2024     June 30, 2024                 Revenues in excess of billings   $ 11,438,977     $ 13,638,547                     Unearned revenue   $ 3,320,286     $ 8,752,153     The Company’s unearned revenue reconciliation is as follows: SCHEDULE OF UNEARNED REVENUE RECONCILIATION      Unearned Revenue   Balance at June 30, 2024   $ 8,752,153   Invoiced     9,309,191   Revenue Recognized     (14,644,315 ) Adjustments     (96,743 ) Balance at December 31, 2024   $ 3,320,286     During the three and six months ended December 31, 2024, the Company recognized revenue of $3,514,159 and $7,686,403 that was included in the unearned revenue balance at the beginning of the period. All other activity in unearned revenue is due to the timing of invoicing in relation to the timing of revenue recognition.     NETSOL TECHNOLOGIES, INC.  Notes to Condensed Consolidated Financial Statements  December 31, 2024  (Unaudited)   Revenue allocated to the remaining performance obligations represents the transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied, which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods. Contracted but unsatisfied performance obligations were approximately $20,000,000 as of December 31, 2024, of which the Company estimates to recognize approximately $17,000,000 in revenue over the next 12 months and the remainder over an estimated 3 years thereafter. Actual revenue recognition depends in part on the timing of software modules installed at various customer sites. Accordingly, some factors that affect the Company’s revenue, such as the availability and demand for modules within customer geographic locations, is not entirely within the Company’s control.  In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that its contracts generally do not include a significant financing component. The primary purpose of invoicing terms is to provide customers with simplified and predictable ways of purchasing the Company’s products and services, and not to facilitate financing arrangements.   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.   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.     NETSOL TECHNOLOGIES, INC.  Notes to Condensed Consolidated Financial Statements  December 31, 2024  (Unaudited)

v3.25.0.1

EARNINGS PER SHARE	6 Months Ended
	Dec. 31, 2024
Net income per share:
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. Dilutive potential common shares include outstanding stock options and stock awards.   The components of basic and diluted earnings per share were as follows:    SCHEDULE OF DILUTIVE POTENTIAL COMMON SHARES     For the three months ended December 31, 2024     For the six months ended December 31, 2024       Net Loss     Shares     Per Share     Net Loss     Shares     Per Share   Basic loss per share:                                     Net loss   $ (1,147,042 )     11,484,298     $ (0.10 )   $ (1,076,247 )     11,456,996     $ (0.09 ) Effect of dilutive securities                                                 Stock options     -       -       -       -       -       -   Diluted loss per share   $ (1,147,042 )     11,484,298     $ (0.10 )   $ (1,076,247 )     11,456,996     $ (0.09 )        For the three months ended December 31, 2023     For the six months ended December 31, 2023       Net Income     Shares     Per Share     Net Income     Shares     Per Share                                         Basic income per share:                                                 Net income   $ 408,316       11,372,819     $ 0.04     $ 439,206       11,359,338     $ 0.04   Effect of dilutive securities                                                 Stock options     -       -       -       -       -       -   Diluted income per share   $ 408,316       11,372,819     $ 0.04     $ 439,206       11,359,338     $ 0.04

v3.25.0.1

OTHER COMPREHENSIVE INCOME AND FOREIGN CURRENCY	6 Months Ended
	Dec. 31, 2024
Other Comprehensive Income And Foreign Currency
OTHER COMPREHENSIVE INCOME AND FOREIGN CURRENCY	NOTE 5 – OTHER COMPREHENSIVE INCOME AND FOREIGN CURRENCY   The following table represents the functional currencies of the Company and its subsidiaries: SCHEDULE OF FOREIGN CURRENCY TRANSLATION  The Company and Subsidiaries   Functional Currency       NetSol Technologies, Inc.   USD NTA   USD Otoz    USD NTE   British Pound AEL   British Pound VLSH   British Pound VLS   British Pound VLSIL   Euro NetSol PK   Pakistan Rupee Connect   Pakistan Rupee NetSol Innovation   Pakistan Rupee NetSol Thai   Thai Bhat Otoz Thai     Thai Bhat Australia   Australian Dollar Namecet   AED NetSol Beijing   Chinese Yuan Tianjin   Chinese Yuan     NETSOL TECHNOLOGIES, INC.  Notes to Condensed Consolidated Financial Statements  December 31, 2024  (Unaudited)   Assets and liabilities are translated at the exchange rate on the balance sheet date, and operating results are translated at the average exchange rate throughout the period. Accumulated translation losses classified as an item of accumulated other comprehensive loss in the stockholders’ equity section of the consolidated balance sheet were $46,187,766 and $45,935,616 as of December 31, 2024 and June 30, 2024, respectively. During the three and six months ended December 31, 2024, comprehensive income (loss) in the consolidated statements of comprehensive income (loss) included a translation loss attributable to NetSol of $138,743 and $252,150, respectively. During the three and six months ended December 31, 2023, comprehensive income (loss) in the consolidated statements of comprehensive income (loss) included a translation gain attributable to NetSol of $541,393 and $104,847, respectively.

v3.25.0.1

MAJOR CUSTOMERS	6 Months Ended
	Dec. 31, 2024
Risks and Uncertainties [Abstract]
MAJOR CUSTOMERS	NOTE 6 – MAJOR CUSTOMERS   During the three and six months ended December 31, 2024, revenues from Daimler Financial Services (“DFS”) were $3,042,849 and $6,260,390, respectively representing 19.6% and 20.8%, respectively of revenues. During the three and six months ended December 31, 2024, revenues from BMW Financial (“BMW”) were $3,116,086 and $5,588,787, respectively representing 20.1% and 18.5%, respectively of revenues. During the three and six months ended December 31, 2023, revenues from DFS were $3,945,061 and $7,632,692, representing 25.9% of revenues. During the three and six months ended December 31, 2023, revenues from BMW were $699,966 and $1,109,955, respectively representing 4.6% and 6.0%, respectively of revenues. The revenues from DFS are shown in the Asia – Pacific segment. The revenues from BMW are shown in the Asia – Pacific and North America segments.   Accounts receivable from DFS and BMW at December 31, 2024, were $368,862 and $107,716, respectively. Accounts receivable from DFS and BMW at June 30, 2024, were $538,648 and $505,875, respectively. Revenues in excess of billings at December 31, 2024, were $761,367 and $1,375,671, respectively. Revenues in excess of billings at June 30, 2024, were $892,109 and $1,419,997, respectively.

v3.25.0.1

OTHER CURRENT ASSETS	6 Months Ended
	Dec. 31, 2024
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
OTHER CURRENT ASSETS	NOTE 7 - OTHER CURRENT ASSETS   Other current assets consisted of the following: SCHEDULE OF OTHER CURRENT ASSETS      As of     As of       December 31, 2024     June 30, 2024                 Prepaid Expenses   $ 1,554,542     $ 1,314,524   Advance Income Tax     361,010       300,368   Employee Advances     209,650       165,264   Security Deposits     157,548       199,633   Other Receivables     553,283       258,880   Other Assets     355,345       362,117   Net Balance   $ 3,191,378     $ 2,600,786       NETSOL TECHNOLOGIES, INC.  Notes to Condensed Consolidated Financial Statements  December 31, 2024  (Unaudited)

v3.25.0.1

REVENUES IN EXCESS OF BILLINGS – LONG TERM	6 Months Ended
	Dec. 31, 2024
Contractors [Abstract]
REVENUES IN EXCESS OF BILLINGS – LONG TERM	NOTE 8 – 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       December 31, 2024     June 30, 2024                 Revenues in excess of billings - long term   $ 892,554     $ 1,106,475   Present value discount     (115,126 )     (152,446 ) Net Balance   $ 777,428     $ 954,029     Pursuant to revenue recognition for contract accounting, the Company has recorded revenues in excess of billings long-term for amounts billable after one year. During the three and six months ended December 31, 2024, the Company accreted $18,367 and $36,734, respectively, which was recorded in interest income for that period. During the three and six months ended December 31, 2023, the Company accreted $12,309 and $18,464, respectively, which was recorded in interest income for that period. The Company used the discounted cash flow method with interest rates ranging from 7.3% to 17.5%, for the period ended December 31, 2024 and June 30, 2024.

v3.25.0.1

PROPERTY AND EQUIPMENT	6 Months Ended
	Dec. 31, 2024
Property, Plant and Equipment [Abstract]
PROPERTY AND EQUIPMENT	NOTE 9 - PROPERTY AND EQUIPMENT   Property and equipment consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT      As of     As of       December 31, 2024     June 30, 2024                 Office Furniture and Equipment   $ 2,377,621     $ 2,352,940   Computer Equipment     9,156,088       8,679,791   Assets Under Capital Leases     133,897       154,718   Building     3,597,784       3,602,819   Land     912,129       913,473   Autos     1,594,928       1,658,961   Improvements     212,897       206,387   Subtotal     17,985,344       17,569,089   Accumulated Depreciation     (13,050,846 )     (12,462,247 ) Property and Equipment, Net   $ 4,934,498     $ 5,106,842     For the three and six months ended December 31, 2024 and 2023, depreciation expense totaled $372,585 and $738,582, respectively. Of these amounts, $237,882 and $466,432, respectively, are reflected in cost of revenues. For the three and six months ended December 31, 2023, depreciation expense totaled $429,163 and $833,908, respectively. Of these amounts, $264,374 and $531,316, respectively, are reflected in cost of revenues.     NETSOL TECHNOLOGIES, INC.  Notes to Condensed Consolidated Financial Statements  December 31, 2024  (Unaudited)   Following is a summary of fixed assets held under finance leases as of December 31, 2024 and June 30, 2024: SCHEDULE OF FIXED ASSETS HELD UNDER CAPITAL LEASES      As of     As of       December 31, 2024     June 30, 2024   Vehicles   $ 133,897     $ 154,718   Total     133,897       154,718   Less:  Accumulated Depreciation - Net     (27,478 )     (25,078 ) Fixed assets held under capital leases, Total   $ 106,419     $ 129,640     Finance lease term and discount rate were as follows: SCHEDULE OF FINANCE LEASE TERM      As of     As of       December 31, 2024     June 30, 2024                 Weighted average remaining lease term - Finance leases      2.25 Years        2.75 Years                     Weighted average discount rate - Finance leases     11.3 %     11.3 %

v3.25.0.1

LEASES	6 Months Ended
	Dec. 31, 2024
Leases
LEASES	NOTE 10 - LEASES   The Company leases certain office space, office equipment and autos with remaining lease terms of one year to 10 years under leases classified as financing and operating. For certain leases, the Company has options to extend the lease term for additional periods ranging from one year to 10 years.   The Company treats a contract as a lease when the contract conveys the right to use a physically distinct asset for a period of time in exchange for consideration, or the Company directs the use of the asset and obtains substantially all the economic benefits of the asset. These leases are recorded as right-of-use (“ROU”) assets and lease obligation liabilities for leases with terms greater than 12 months.  ROU assets represent the Company’s right to use an underlying asset for the entirety of the lease term. Lease liabilities represent the Company’s obligation to make payments over the life of the lease. A ROU asset and a lease liability are recognized at 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.   The Company reviews the impairment of ROU assets consistent with the approach applied to the Company’s other long-lived assets. The Company reviews the recoverability of long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the Company’s ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations.   The Company elected the practical expedient to exclude short-term leases (leases with original terms of 12 months or less) from ROU asset and lease liability accounts.   Lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred. Variable payments change due to facts or circumstances occurring after the commencement date, other than the passage of time, and do not result in a re-measurement of lease liabilities. 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.     NETSOL TECHNOLOGIES, INC.  Notes to Condensed Consolidated Financial Statements  December 31, 2024  (Unaudited)   Supplemental balance sheet information related to leases was as follows: SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO LEASE      As of     As of       December 31, 2024     June 30, 2024   Assets                 Operating lease assets, net   $ 1,069,948     $ 1,328,624                     Liabilities                 Current                 Operating   $ 518,075     $ 608,202   Operating, Current   $ 518,075     $ 608,202   Non-current                 Operating     512,062       688,749   Operating, Noncurrent     512,062       688,749   Total Lease Liabilities   $ 1,030,137     $ 1,296,951     The components of lease cost were as follows:    SCHEDULE OF COMPONENTS OF LEASE COST     2024     2023     2024     2023       For the Three Months Ended December 31,     For the Six Months Ended December 31,       2024     2023     2024     2023                             Amortization of finance lease assets   $ 7,720     $ 2,365     $ 21,597     $ 4,661   Interest on finance lease obligation     2,907       770       5,994       1,639   Operating lease cost     98,492       98,309       198,338       205,342   Short term lease cost     60,477       40,216       110,040       81,224   Sub lease income     (8,514 )     (8,199 )     (16,920 )     (16,605 ) Total lease cost   $ 161,082     $ 133,461     $ 319,049     $ 276,261     Lease term and discount rate were as follows: SCHEDULE OF LEASE TERM AND DISCOUNT RATE      As of     As of       December 31, 2024     June 30, 2024                 Weighted average remaining lease term - Operating leases      1.59 Years        1.99 Years                     Weighted average discount rate - Operating leases     4.5 %     4.5 %     NETSOL TECHNOLOGIES, INC.  Notes to Condensed Consolidated Financial Statements  December 31, 2024  (Unaudited)   Supplemental disclosures of cash flow information related to leases were as follows: SCHEDULE OF SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION RELATED TO LEASES      2024     2023       For the Six Months       Ended December 31,       2024     2023                 Operating cash flows related to operating leases   $ 185,514     $ 140,514                     Operating cash flows related to finance leases   $ 5,994     $ 1,638                     Financing cash flows related finance leases   $ 9,296     $ 16,424     Maturities of operating lease liabilities were as follows as of December 31, 2024: SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES      Amount   Within year 1   $ 559,279   Within year 2     367,204   Within year 3     127,730   Within year 4     53,837   Within year 5     237   Total Lease Payments     1,108,287   Less: Imputed interest     (78,150 ) Present Value of lease liabilities     1,030,137   Less: Current portion     (518,075 ) Non-Current portion   $ 512,062     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 and six months ended December 31, 2024, the Company received lease income of $8,514 and $16,920, respectively. For the three and six months ended December 31, 2023, the Company received lease income of $8,199 and $16,605, respectively.

v3.25.0.1

ACCOUNTS PAYABLE AND ACCRUED EXPENSES	6 Months Ended
	Dec. 31, 2024
Payables and Accruals [Abstract]
ACCOUNTS PAYABLE AND ACCRUED EXPENSES	NOTE 11 - 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       December 31, 2024     June 30, 2024                 Accounts Payable   $ 969,495     $ 1,426,930   Accrued Liabilities     4,333,709       4,323,662   Accrued Payroll     1,336,128       1,392,112   Accrued Payroll Taxes     191,462       215,197   Taxes Payable     267,422       634,035   Other Payable     234,344       240,406   Total   $ 7,332,560     $ 8,232,342       NETSOL TECHNOLOGIES, INC.  Notes to Condensed Consolidated Financial Statements  December 31, 2024  (Unaudited)

v3.25.0.1

DEBTS	6 Months Ended
	Dec. 31, 2024
Debt Disclosure [Abstract]
DEBTS	NOTE 12 – DEBTS   Notes payable and finance leases consisted of the following: SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES          As of December 31, 2024                 Current     Long-Term   Name       Total     Maturities     Maturities                           D&O Insurance   (1)   $ 102,626     $ 102,626     $ -   Line of Credit   (2)     405,000       405,000       -   Bank Overdraft Facility   (3)     -       -       -   Loan Payable Bank - Export Refinance   (4)     1,793,915       1,793,915       -   Loan Payable Bank - Running Finance   (5)     -       -       -   Loan Payable Bank - Export Refinance II   (6)     1,363,375       1,363,375       -   Loan Payable Bank - Export Refinance III   (7)     4,664,180       4,664,180       -   Sale and Leaseback Financing   (8)     31,589       31,589       -   Short Term Financing   (9)     410,959       410,959       -             8,771,644       8,771,644       -   Subsidiary Finance Leases   (10)     99,539       12,588       86,951           $ 8,871,183     $ 8,784,232     $ 86,951             As of June 30, 2024                 Current     Long-Term   Name       Total     Maturities     Maturities                           D&O Insurance   (1)   $ 124,314     $ 124,314     $ -   Line of Credit   (2)     -       -       -   Bank Overdraft Facility   (3)     -       -       -   Loan Payable Bank - Export Refinance   (4)     1,796,558       1,796,558       -   Loan Payable Bank - Running Finance   (5)     -       -       -   Loan Payable Bank - Export Refinance II   (6)     1,365,384       1,365,384       -   Loan Payable Bank - Export Refinance III   (7)     2,515,181       2,515,181       -   Sale and Leaseback Financing   (8)     56,842       47,158       9,684   Short Term Financing   (9)     412,655       412,655       -             6,270,934       6,261,250       9,684   Subsidiary Finance Leases   (10)     100,962       14,875       86,087           $ 6,371,896     $ 6,276,125     $ 95,771     (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 8.6% to 10.9% as of December 31, 2024 and June 30, 2024.   (2) The Company has an uncommitted discretionary demand line of credit up to an aggregate amount of $1,000,000 with HSBC, secured by a lien on the Company’s assets. The annual interest rate was 8.25% at December 31, 2024 and 8.75% as of June 30, 2024. The total outstanding balance as of December 31, 2024 and June 30, 2024 was $405,000 and $nil, respectively.     NETSOL TECHNOLOGIES, INC.  Notes to Condensed Consolidated Financial Statements  December 31, 2024  (Unaudited)   (3) The Company’s subsidiary, NTE, has an overdraft facility with HSBC Bank plc whereby the bank would cover any overdrafts up to £300,000, or approximately $375,000. The annual interest rate was 9.5% as of December 31, 2024 and June 30, 2024. The total outstanding balance as of December 31, 2024 and June 30, 2024 was £Nil.   This overdraft facility requires that the aggregate amount of invoiced trade debtors (net of provisions for bad and doubtful debts and excluding intra-group debtors) of NTE, not exceeding 90 days old, will not be less than an amount equal to 200% of the facility. As of December 31, 2024, NTE was in compliance with this covenant.   (4) The Company’s subsidiary, NetSol PK, has an export refinance facility with Askari Bank Limited, secured by NetSol PK’s assets. This is a revolving loan that matures every nine months. The total facility amount is Rs. 500,000,000 or $1,793,915 at December 31, 2024 and Rs. 500,000,000 or $1,796,558 at June 30, 2024. The interest rate for the loan was 10.0% and 17.5% at December 31, 2024 and June 30, 2024, respectively.   (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. 3,550,937 or $12,740, at December 31, 2024. The balance outstanding at December 31, 2024 and June 30, 2024 was Rs. Nil. The interest rate for the loan was 14.1% at December 31, 2024 and 22.2% at June 30, 2024.   This facility requires NetSol PK to maintain a long-term debt equity ratio of 60:40 and a current ratio of 1:1. As of December 31, 2024, 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 or $1,363,375 and Rs. 380,000,000 or $1,365,384 at December 31, 2024 and June 30, 2024, respectively. The interest rate for the loan was 10.0% and 17.5% at December 31, 2024 and June 30, 2024, respectively.   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 December 31, 2024, 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. 1,300,000,000 or $4,664,180 and Rs. 900,000,000 or $3,233,804, at December 31, 2024 and June 30, 2024, respectively. NetSol PK used Rs. 1,300,000,000 or $4,664,180 and Rs. 700,000,000 or $2,515,181, at December 31, 2024 and June 30, 2024, respectively. The interest rate for the loan was 10.0% and 17.5% at December 31, 2024 and June 30, 2024, respectively.   (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 December 31, 2024, NetSol PK used Rs. 8,804,426 or $31,589 which was shown as current. As of June 30, 2024, NetSol PK used Rs. 15,819,683 or $56,842 of which $9,684 was shown as long term and $47,158 as current. The interest rate for the loan was from 22.7% to 24.2% at December 31, 2024 and June 30, 2024.   (9) The Company’s subsidiary, NetSol Beijing, has a one year, short-term loan facility with Bank of China, secured by a personal guarantee from NetSol Beijing’s General Manager. The facility amount is CNY 3,000,000 or $410,959. NetSol Beijing used CNY 3,000,000 or $410,959 at December 31, 2024. NetSol Beijing used CNY 3,000,000 or $412,655, at June 30, 2024. The interest rate of the loan was 3.8% at December 31, 2024 and June 30, 2024.   (10) The Company leases various fixed assets under finance lease arrangements expiring in various years through 2027. 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 December 31, 2024 and 2023.     NETSOL TECHNOLOGIES, INC.  Notes to Condensed Consolidated Financial Statements  December 31, 2024  (Unaudited)   Following are the aggregate minimum future lease payments under finance leases as of December 31, 2024: SCHEDULE OF AGGREGATE MINIMUM FUTURE LEASE PAYMENTS UNDER CAPITAL LEASES      Amount   Minimum Lease Payments         Within year 1   $ 25,403   Within year 2     25,403   Within year 3     77,567   Total Minimum Lease Payments     128,373   Interest Expense relating to future periods     (28,834 ) Present Value of minimum lease payments     99,539   Less: Current portion     (12,588 ) Non-Current portion   $ 86,951     Following are the aggregate future long term debt payments as of December 31, 2024 which consists of “Sale and Leaseback Financing (8)”. SCHEDULE OF AGGREGATE FUTURE LONG TERM DEBT PAYMENTS      Amount   Loan Payments         Within year 1   $ 30,754   Within year 2     835   Total Loan Payments     31,589   Less: Current portion     (31,589 ) Non-Current portion   $ -

v3.25.0.1

STOCKHOLDERS’ EQUITY	6 Months Ended
	Dec. 31, 2024
Equity [Abstract]
STOCKHOLDERS’ EQUITY	NOTE 13 - STOCKHOLDERS’ EQUITY   During the three and six months ended December 31, 2024, the Company issued 15,174 and 29,124 shares of common stock for services rendered by the independent members of the Board of Directors as part of their board compensation. These shares were valued at the fair market value of $39,750 and $79,500, respectively.   During the three and six months ended December 31, 2024, the employees of the Company exercised 190,000 and 200,000 options of common stock with an exercise price of $2.15 per share for cash proceeds of $430,000.   Stock Grants   The following table summarizes stock grants awarded as compensation: SUMMARY OF UNVESTED STOCK GRANTS AWARDED AS COMPENSATION      # Number of shares     Weighted Average Grant Date Fair Value ($)   Unvested, June 30, 2024     -     $ -   Granted     29,124     $ 2.73   Vested     (29,124 )   $ 2.73   Unvested, December 31, 2024     -     $ -     For the three and six months ended December 31, 2024, the Company recorded compensation expense of $39,750 and $79,500, respectively. For the three and six months ended December 31, 2023, the Company recorded compensation expense of $39,750 and $88,550, respectively. The weighted average grant date fair value is determined by the Company’s closing stock price on the grant date.     NETSOL TECHNOLOGIES, INC.  Notes to Condensed Consolidated Financial Statements  December 31, 2024  (Unaudited)

v3.25.0.1

INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN	6 Months Ended
	Dec. 31, 2024
Share-Based Payment Arrangement [Abstract]
INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN	NOTE 14 – INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN   Common stock purchase options consisted of the following: SCHEDULE OF COMMON STOCK PURCHASE OPTIONS  OPTIONS:                             # of shares     Weighted Average Exercise Price     Weighted Average Remaining Contractual Life (in years)     Aggregated Intrinsic Value                             Outstanding and exercisable, June 30, 2024     250,000     $ 2.15       0.50           Granted     -       -       -       -   Exercised     (200,000 )     2.15       -       -   Expired / Cancelled     -       -       -       -   Outstanding and exercisable, December 31, 2024     50,000     $ 2.15       0.003     $ 23,500     The aggregate intrinsic value at December 31, 2024 represents the difference between the Company’s closing stock price of $2.62 on December 31, 2024 and the exercise price of the in-the-money stock options.   The following table summarizes information about stock options outstanding and exercisable at December 31, 2024. SUMMARY OF STOCK OPTIONS OUTSTANDING  Exercise Price   Number Outstanding and Exercisable     Weighted Average Remaining Contractual Life     Weighted Average Exercise Price   OPTIONS:                                                   $2.15     50,000       0.003     $ 2.15   $2.15     50,000       0.003     $ 2.15   Totals     50,000       0.003     $ 2.15

v3.25.0.1

OPERATING SEGMENTS	6 Months Ended
	Dec. 31, 2024
Segment Reporting [Abstract]
OPERATING SEGMENTS	NOTE 15– OPERATING SEGMENTS   The Company has identified three segments for its products and services; North America, Europe and Asia-Pacific. Our reportable segments are business units located in different global regions. Each business unit provides similar products and services; license fees for leasing and asset-based software, related maintenance fees, and implementation and IT consulting services. Separate management of each segment is required because each business unit is subject to different operational issues and strategies due to their particular regional location. The Company accounts for intra-company sales and expenses as if the sales or expenses were to third parties and eliminates them in the consolidation.     NETSOL TECHNOLOGIES, INC.  Notes to Condensed Consolidated Financial Statements  December 31, 2024  (Unaudited)   The following table presents a summary of identifiable assets as of December 31, 2024 and June 30, 2024: SUMMARY OF IDENTIFIABLE ASSETS      As of     As of       December 31, 2024     June 30, 2024   Identifiable assets:                 Corporate headquarters   $ 906,828     $ 808,385   North America     7,246,715       6,114,142   Europe     8,516,144       9,410,098   Asia - Pacific     42,400,442       47,853,817   Consolidated   $ 59,070,129     $ 64,186,442   Identifiable assets   $ 59,070,129     $ 64,186,442     The following table presents a summary of revenue streams by segment for the three months ended December 31, 2024 and 2023: SUMMARY OF REVENUE STREAMS                                                        2024     2023       License fees     Subscription and support     Services     Total     License fees     Subscription and support     Services     Total                                                     North America   $ -     $ 1,606,262     $ 1,601,011     $ 3,207,273     $ -     $ 1,168,224     $ 296,997     $ 1,465,221   Europe     72,688       1,202,858       1,985,634       3,261,180       4,650       874,096       1,593,611       2,472,357   Asia-Pacific     -       5,833,509       3,234,699       9,068,208       2,985,803       4,785,461       3,529,099       11,300,363   Total   $ 72,688     $ 8,642,629     $ 6,821,344     $ 15,536,661     $ 2,990,453     $ 6,827,781     $ 5,419,707     $ 15,237,941     The following table presents a summary of revenue streams by segment for the six months ended December 31, 2024 and 2023:                                                         2024     2023       License fees     Subscription and support     Services     Total     License fees     Subscription and support     Services     Total                                                     North America   $ -     $ 2,868,907     $ 3,207,027     $ 6,075,934     $ -     $ 2,293,038     $ 580,798     $ 2,873,836   Europe     73,917       2,095,630       3,586,919       5,756,466       8,966       1,588,084       3,437,340       5,034,390   Asia-Pacific     -       11,870,563       6,432,196       18,302,759       4,261,936       9,458,902       7,851,058       21,571,896   Total   $ 73,917     $ 16,835,100     $ 13,226,142     $ 30,135,159     $ 4,270,902     $ 13,340,024     $ 11,869,196     $ 29,480,122       NETSOL TECHNOLOGIES, INC.  Notes to Condensed Consolidated Financial Statements  December 31, 2024  (Unaudited)   The following table presents a summary of operating information for the three and six months ended December 31:    SUMMARY OF OPERATING INFORMATION     2024     2023     2024     2023       For the Three Months Ended December 31,     For the Six Months Ended December 31,       2024     2023     2024     2023   Revenues from unaffiliated customers:                                 North America   $ 3,207,273     $ 1,465,221     $ 6,075,934     $ 2,873,836   Europe     3,261,180       2,472,357       5,756,466       5,034,390   Asia - Pacific     9,068,208       11,300,363       18,302,759       21,571,896   Revenues from unaffiliated customers     15,536,661       15,237,941       30,135,159       29,480,122   Revenue from affiliated customers                                 Asia - Pacific     -       -       -       -   Revenue from affiliated customers     -       -       -       -   Consolidated   $ 15,536,661     $ 15,237,941     $ 30,135,159     $ 29,480,122   Revenue   $ 15,536,661     $ 15,237,941     $ 30,135,159     $ 29,480,122                                     Intercompany revenue                                 Europe   $ 188,756     $ 100,100     $ 205,314     $ 200,417   Asia - Pacific     4,713,799       2,865,277       7,983,143       5,485,596   Eliminated   $ 4,902,555     $ 2,965,377     $ 8,188,457     $ 5,686,013   Revenue   $ 4,902,555     $ 2,965,377     $ 8,188,457     $ 5,686,013                                     Net income (loss) after taxes and before non-controlling interest:                                 Corporate headquarters   $ (103,088 )   $ (922,670 )   $ (765,146 )   $ (1,226,392 ) North America     (380,582 )     (13,278 )     234,261       (69,225 ) Europe     (450,678 )     (150,935 )     (973,676 )     (242,819 ) Asia - Pacific     (251,858 )     2,069,698       536,064       2,812,314   Consolidated   $ (1,186,206 )   $ 982,815     $ (968,497 )   $ 1,273,878   Net income (loss) after taxes and before non-controlling interest   $ (1,186,206 )   $ 982,815     $ (968,497 )   $ 1,273,878                                     Depreciation and amortization:                                 North America   $ 599     $ 407     $ 1,070     $ 898   Europe     53,179       57,758       112,859       120,659   Asia - Pacific     318,807       370,998       624,653       838,392   Consolidated   $ 372,585     $ 429,163     $ 738,582     $ 959,949   Depreciation and amortization   $ 372,585     $ 429,163     $ 738,582     $ 959,949                                     Interest expense:                                 Corporate headquarters   $ 11,059     $ 6,538     $ 20,451     $ 12,659   Europe     12,059       1,834       12,059       6,476   Asia - Pacific     213,268       281,950       462,095       547,204   Consolidated   $ 236,386     $ 290,322     $ 494,605     $ 566,339   Interest expense   $ 236,386     $ 290,322     $ 494,605     $ 566,339                                     Income tax expense:                                 Europe   $ -     $ (93,583 )   $ -     $ (93,583 ) Asia - Pacific     331,614       243,636       561,431       365,531   Consolidated   $ 331,614     $ 150,053     $ 561,431     $ 271,948   Income tax expense   $ 331,614     $ 150,053     $ 561,431     $ 271,948       NETSOL TECHNOLOGIES, INC.  Notes to Condensed Consolidated Financial Statements  December 31, 2024  (Unaudited)   The following table presents a summary of capital expenditures for the six months ended December 31: SUMMARY OF CAPITAL EXPENDITURES      2024     2023       For the Six Months       Ended December 31,       2024     2023   Capital expenditures:                 North America   $ 3,841     $ -   Europe     56,204       417,104   Asia - Pacific     508,089       153,480   Consolidated   $ 568,134     $ 570,584   Capital expenditures   $ 568,134     $ 570,584

v3.25.0.1

NON-CONTROLLING INTEREST IN SUBSIDIARY	6 Months Ended
	Dec. 31, 2024
Noncontrolling Interest [Abstract]
NON-CONTROLLING INTEREST IN SUBSIDIARY	NOTE 16 – 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 December 31, 2024                 NetSol PK     32.38 %   $ 5,163,259   NetSol-Innovation     32.38 %     (538,843 ) NAMECET     32.38 %     (31,713 ) NetSol Thai     0.006 %     (169 ) OTOZ Thai     0.01 %     20   OTOZ     0.00 %     -   Total           $ 4,592,554     SUBSIDIARY   Non-Controlling Interest %     Non-Controlling Interest at June 30, 2024                 NetSol PK     32.38 %   $ 4,679,101   NetSol-Innovation     32.38 %     137,232   NAMECET     32.38 %     (21,014 ) NetSol Thai     0.006 %     (163 ) OTOZ Thai     5.60 %     (17,483 ) OTOZ     5.59 %     (83,255 ) Total           $ 4,694,418     During the six months ended December 31, 2024, the Company acquired the remaining 177,558 minority shares from the non-controlling shareholders for $8,878. As a result, the Company’s ownership interest increased, reducing the non-controlling interest from 5.59% to 0.0%. The effective non-controlling interest in Otoz® Thai decreased to 0.01%.     NETSOL TECHNOLOGIES, INC.  Notes to Condensed Consolidated Financial Statements  December 31, 2024  (Unaudited)   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     2024     2023     2024     2023       For the Three Months Ended December 31,     For the Six Months Ended December 31,       2024     2023     2024     2023                             Net income (loss) attributable to NetSol    $ (1,147,042 )   $ 408,316     $ (1,076,247 )   $ 439,206   Transfer to (from) non-controlling interest                                  Decrease in paid-in capital for purchase of 177,558 shares of OTOZ Inc common stock     (31,004 )             (166,123 )     -   Net transfer to (from) non-controlling interest     (31,004 )     -       (166,123 )     -   Change from net income (loss) attributable to NetSol and transfer to (from) non-controlling interest   $ (1,178,046 )   $ 408,316     $ (1,242,370 )   $ 439,206

v3.25.0.1

INCOME TAXES	6 Months Ended
	Dec. 31, 2024
Income Tax Disclosure [Abstract]
INCOME TAXES	NOTE 17– 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 will depend on the portion of our profits earned within and outside the United States.   During the three and six months ended December 31, 2024, the Company recorded an income tax provision of $331,614 and $561,431, respectively. During the three and six months ended December 31, 2023, the Company recorded an income tax provision of $150,053 and $271,948, respectively.

v3.25.0.1

SUBSEQUENT EVENTS	6 Months Ended
	Dec. 31, 2024
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 18– SUBSEQUENT EVENTS   NetSol PK announced a share buyback program for the repurchase of up to 10,000,000 shares representing approximately 11.1% of the estimated 89,837,000 outstanding shares. The buyback program was announced on January 3, 2025, and will continue through June 29, 2025. As of February 10, 2025, NetSol PK had repurchased approximately 2,358,000 shares valued at approximately $1,345,000.

v3.25.0.1

ACCOUNTING POLICIES (Policies)	6 Months Ended
	Dec. 31, 2024
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.
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 ($68,493) in each bank and in the UK for GBP 85,000 ($106,250) in each bank. The Company maintains three bank accounts in China and nine bank accounts in the UK. As of December 31, 2024, and June 30, 2024, the Company had uninsured deposits related to cash deposits in accounts maintained within foreign entities of approximately $20,027,837 and $18,182,002, respectively. The Company has not experienced any losses in such accounts.   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.” ASC 820-10 defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. For certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and short-term debt, the carrying amounts approximate fair value due to their relatively short maturities. The carrying amounts of the long-term debt approximate their fair values based on current interest rates for instruments with similar characteristics.   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.     NETSOL TECHNOLOGIES, INC.  Notes to Condensed Consolidated Financial Statements  December 31, 2024  (Unaudited)   The Company’s financial assets that were measured at fair value on a recurring basis as of December 31, 2024, 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   $      -     $      -     $ 777,428     $ 777,428   Total   $ -     $ -     $ 777,428     $ 777,428     The Company’s financial assets that were measured at fair value on a recurring basis as of June 30, 2024, are as follows:       Level 1     Level 2     Level 3     Total Assets   Revenues in excess of billings - long term   $      -     $      -     $ 954,029     $ 954,029   Total   $ -     $ -     $ 954,029     $ 954,029     The reconciliation from June 30, 2024 to December 31, 2024 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, 2024   $ 1,106,475     $ (152,446 )   $ 954,029   Amortization during the period     -       36,734       36,734   Transfers to short term     (206,964 )     -       (206,964 ) Effect of Translation Adjustment     (6,957 )     586       (6,371 ) Balance at December 31, 2024   $ 892,554     $ (115,126 )   $ 777,428     Management analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity” and ASC 815, “Derivatives and Hedging.” Derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives. The effects of interactions between embedded derivatives are calculated and accounted for in arriving at the overall fair value of the financial instruments. In addition, the fair values of freestanding derivative instruments such as warrants and option derivatives are valued using the Black-Scholes model.
Recent Accounting Standards:	Recent Accounting Standards:   In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. ASU 2023-07 is effective for the Company’s Annual Report on Form 10-K for the fiscal year ending June 30, 2025, and subsequent interim periods, with early adoption permitted. We are evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.     NETSOL TECHNOLOGIES, INC.  Notes to Condensed Consolidated Financial Statements  December 31, 2024  (Unaudited)   In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance transparency and decision usefulness of income tax disclosures, particularly around rate reconciliations and income taxes paid information. ASU 2023-09 is effective for our Annual Report on Form 10-K for the fiscal year ending June 30, 2026, on a prospective basis, with early adoption permitted. We are evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.   All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable.

v3.25.0.1

ACCOUNTING POLICIES (Tables)	6 Months Ended
	Dec. 31, 2024
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 December 31, 2024, 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   $      -     $      -     $ 777,428     $ 777,428   Total   $ -     $ -     $ 777,428     $ 777,428     The Company’s financial assets that were measured at fair value on a recurring basis as of June 30, 2024, are as follows:       Level 1     Level 2     Level 3     Total Assets   Revenues in excess of billings - long term   $      -     $      -     $ 954,029     $ 954,029   Total   $ -     $ -     $ 954,029     $ 954,029
SCHEDULE OF FAIR VALUE OF FINANCIAL INSTRUMENTS RECONCILIATION	The reconciliation from June 30, 2024 to December 31, 2024 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, 2024   $ 1,106,475     $ (152,446 )   $ 954,029   Amortization during the period     -       36,734       36,734   Transfers to short term     (206,964 )     -       (206,964 ) Effect of Translation Adjustment     (6,957 )     586       (6,371 ) Balance at December 31, 2024   $ 892,554     $ (115,126 )   $ 777,428

v3.25.0.1

REVENUE RECOGNITION (Tables)	6 Months Ended
	Dec. 31, 2024
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     2024     2023     2024     2023       For the Three Months Ended December 31,     For the Six Months Ended December 31,       2024     2023     2024     2023   Core:                                 License   $ 72,688     $ 2,990,453     $ 73,917     $ 4,270,902   Subscription and support     8,642,629       6,827,781       16,835,100       13,340,024   Services     5,872,590       4,114,077       11,399,225       9,088,631   Total core revenue, net     14,587,907       13,932,311       28,308,242       26,699,557                                     Non-Core:                                 Services     948,754       1,305,630       1,826,917       2,780,565   Total non-core revenue, net     948,754       1,305,630       1,826,917       2,780,565                                     Total net revenue   $ 15,536,661     $ 15,237,941     $ 30,135,159     $ 29,480,122
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      As of     As of       December 31, 2024     June 30, 2024                 Revenues in excess of billings   $ 11,438,977     $ 13,638,547                     Unearned revenue   $ 3,320,286     $ 8,752,153
SCHEDULE OF UNEARNED REVENUE RECONCILIATION	The Company’s unearned revenue reconciliation is as follows: SCHEDULE OF UNEARNED REVENUE RECONCILIATION      Unearned Revenue   Balance at June 30, 2024   $ 8,752,153   Invoiced     9,309,191   Revenue Recognized     (14,644,315 ) Adjustments     (96,743 ) Balance at December 31, 2024   $ 3,320,286

v3.25.0.1

EARNINGS PER SHARE (Tables)	6 Months Ended
	Dec. 31, 2024
Net income per share:
SCHEDULE OF DILUTIVE POTENTIAL COMMON SHARES	The components of basic and diluted earnings per share were as follows:    SCHEDULE OF DILUTIVE POTENTIAL COMMON SHARES     For the three months ended December 31, 2024     For the six months ended December 31, 2024       Net Loss     Shares     Per Share     Net Loss     Shares     Per Share   Basic loss per share:                                     Net loss   $ (1,147,042 )     11,484,298     $ (0.10 )   $ (1,076,247 )     11,456,996     $ (0.09 ) Effect of dilutive securities                                                 Stock options     -       -       -       -       -       -   Diluted loss per share   $ (1,147,042 )     11,484,298     $ (0.10 )   $ (1,076,247 )     11,456,996     $ (0.09 )        For the three months ended December 31, 2023     For the six months ended December 31, 2023       Net Income     Shares     Per Share     Net Income     Shares     Per Share                                         Basic income per share:                                                 Net income   $ 408,316       11,372,819     $ 0.04     $ 439,206       11,359,338     $ 0.04   Effect of dilutive securities                                                 Stock options     -       -       -       -       -       -   Diluted income per share   $ 408,316       11,372,819     $ 0.04     $ 439,206       11,359,338     $ 0.04

v3.25.0.1

OTHER COMPREHENSIVE INCOME AND FOREIGN CURRENCY (Tables)	6 Months Ended
	Dec. 31, 2024
Other Comprehensive Income And Foreign Currency
SCHEDULE OF FOREIGN CURRENCY TRANSLATION	The following table represents the functional currencies of the Company and its subsidiaries: SCHEDULE OF FOREIGN CURRENCY TRANSLATION  The Company and Subsidiaries   Functional Currency       NetSol Technologies, Inc.   USD NTA   USD Otoz    USD NTE   British Pound AEL   British Pound VLSH   British Pound VLS   British Pound VLSIL   Euro NetSol PK   Pakistan Rupee Connect   Pakistan Rupee NetSol Innovation   Pakistan Rupee NetSol Thai   Thai Bhat Otoz Thai     Thai Bhat Australia   Australian Dollar Namecet   AED NetSol Beijing   Chinese Yuan Tianjin   Chinese Yuan

v3.25.0.1

OTHER CURRENT ASSETS (Tables)	6 Months Ended
	Dec. 31, 2024
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       December 31, 2024     June 30, 2024                 Prepaid Expenses   $ 1,554,542     $ 1,314,524   Advance Income Tax     361,010       300,368   Employee Advances     209,650       165,264   Security Deposits     157,548       199,633   Other Receivables     553,283       258,880   Other Assets     355,345       362,117   Net Balance   $ 3,191,378     $ 2,600,786

v3.25.0.1

REVENUES IN EXCESS OF BILLINGS – LONG TERM (Tables)	6 Months Ended
	Dec. 31, 2024
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       December 31, 2024     June 30, 2024                 Revenues in excess of billings - long term   $ 892,554     $ 1,106,475   Present value discount     (115,126 )     (152,446 ) Net Balance   $ 777,428     $ 954,029

v3.25.0.1

PROPERTY AND EQUIPMENT (Tables)	6 Months Ended
	Dec. 31, 2024
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       December 31, 2024     June 30, 2024                 Office Furniture and Equipment   $ 2,377,621     $ 2,352,940   Computer Equipment     9,156,088       8,679,791   Assets Under Capital Leases     133,897       154,718   Building     3,597,784       3,602,819   Land     912,129       913,473   Autos     1,594,928       1,658,961   Improvements     212,897       206,387   Subtotal     17,985,344       17,569,089   Accumulated Depreciation     (13,050,846 )     (12,462,247 ) Property and Equipment, Net   $ 4,934,498     $ 5,106,842
SCHEDULE OF FIXED ASSETS HELD UNDER CAPITAL LEASES	Following is a summary of fixed assets held under finance leases as of December 31, 2024 and June 30, 2024: SCHEDULE OF FIXED ASSETS HELD UNDER CAPITAL LEASES      As of     As of       December 31, 2024     June 30, 2024   Vehicles   $ 133,897     $ 154,718   Total     133,897       154,718   Less:  Accumulated Depreciation - Net     (27,478 )     (25,078 ) Fixed assets held under capital leases, Total   $ 106,419     $ 129,640
SCHEDULE OF FINANCE LEASE TERM	Finance lease term and discount rate were as follows: SCHEDULE OF FINANCE LEASE TERM      As of     As of       December 31, 2024     June 30, 2024                 Weighted average remaining lease term - Finance leases      2.25 Years        2.75 Years                     Weighted average discount rate - Finance leases     11.3 %     11.3 %

v3.25.0.1

LEASES (Tables)	6 Months Ended
	Dec. 31, 2024
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       December 31, 2024     June 30, 2024   Assets                 Operating lease assets, net   $ 1,069,948     $ 1,328,624                     Liabilities                 Current                 Operating   $ 518,075     $ 608,202   Operating, Current   $ 518,075     $ 608,202   Non-current                 Operating     512,062       688,749   Operating, Noncurrent     512,062       688,749   Total Lease Liabilities   $ 1,030,137     $ 1,296,951
SCHEDULE OF COMPONENTS OF LEASE COST	The components of lease cost were as follows:    SCHEDULE OF COMPONENTS OF LEASE COST     2024     2023     2024     2023       For the Three Months Ended December 31,     For the Six Months Ended December 31,       2024     2023     2024     2023                             Amortization of finance lease assets   $ 7,720     $ 2,365     $ 21,597     $ 4,661   Interest on finance lease obligation     2,907       770       5,994       1,639   Operating lease cost     98,492       98,309       198,338       205,342   Short term lease cost     60,477       40,216       110,040       81,224   Sub lease income     (8,514 )     (8,199 )     (16,920 )     (16,605 ) Total lease cost   $ 161,082     $ 133,461     $ 319,049     $ 276,261
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       December 31, 2024     June 30, 2024                 Weighted average remaining lease term - Operating leases      1.59 Years        1.99 Years                     Weighted average discount rate - Operating leases     4.5 %     4.5 %
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      2024     2023       For the Six Months       Ended December 31,       2024     2023                 Operating cash flows related to operating leases   $ 185,514     $ 140,514                     Operating cash flows related to finance leases   $ 5,994     $ 1,638                     Financing cash flows related finance leases   $ 9,296     $ 16,424
SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES	Maturities of operating lease liabilities were as follows as of December 31, 2024: SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES      Amount   Within year 1   $ 559,279   Within year 2     367,204   Within year 3     127,730   Within year 4     53,837   Within year 5     237   Total Lease Payments     1,108,287   Less: Imputed interest     (78,150 ) Present Value of lease liabilities     1,030,137   Less: Current portion     (518,075 ) Non-Current portion   $ 512,062

v3.25.0.1

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)	6 Months Ended
	Dec. 31, 2024
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       December 31, 2024     June 30, 2024                 Accounts Payable   $ 969,495     $ 1,426,930   Accrued Liabilities     4,333,709       4,323,662   Accrued Payroll     1,336,128       1,392,112   Accrued Payroll Taxes     191,462       215,197   Taxes Payable     267,422       634,035   Other Payable     234,344       240,406   Total   $ 7,332,560     $ 8,232,342

v3.25.0.1

DEBTS (Tables)	6 Months Ended
	Dec. 31, 2024
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 December 31, 2024                 Current     Long-Term   Name       Total     Maturities     Maturities                           D&O Insurance   (1)   $ 102,626     $ 102,626     $ -   Line of Credit   (2)     405,000       405,000       -   Bank Overdraft Facility   (3)     -       -       -   Loan Payable Bank - Export Refinance   (4)     1,793,915       1,793,915       -   Loan Payable Bank - Running Finance   (5)     -       -       -   Loan Payable Bank - Export Refinance II   (6)     1,363,375       1,363,375       -   Loan Payable Bank - Export Refinance III   (7)     4,664,180       4,664,180       -   Sale and Leaseback Financing   (8)     31,589       31,589       -   Short Term Financing   (9)     410,959       410,959       -             8,771,644       8,771,644       -   Subsidiary Finance Leases   (10)     99,539       12,588       86,951           $ 8,871,183     $ 8,784,232     $ 86,951             As of June 30, 2024                 Current     Long-Term   Name       Total     Maturities     Maturities                           D&O Insurance   (1)   $ 124,314     $ 124,314     $ -   Line of Credit   (2)     -       -       -   Bank Overdraft Facility   (3)     -       -       -   Loan Payable Bank - Export Refinance   (4)     1,796,558       1,796,558       -   Loan Payable Bank - Running Finance   (5)     -       -       -   Loan Payable Bank - Export Refinance II   (6)     1,365,384       1,365,384       -   Loan Payable Bank - Export Refinance III   (7)     2,515,181       2,515,181       -   Sale and Leaseback Financing   (8)     56,842       47,158       9,684   Short Term Financing   (9)     412,655       412,655       -             6,270,934       6,261,250       9,684   Subsidiary Finance Leases   (10)     100,962       14,875       86,087           $ 6,371,896     $ 6,276,125     $ 95,771     (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 8.6% to 10.9% as of December 31, 2024 and June 30, 2024.   (2) The Company has an uncommitted discretionary demand line of credit up to an aggregate amount of $1,000,000 with HSBC, secured by a lien on the Company’s assets. The annual interest rate was 8.25% at December 31, 2024 and 8.75% as of June 30, 2024. The total outstanding balance as of December 31, 2024 and June 30, 2024 was $405,000 and $nil, respectively.     NETSOL TECHNOLOGIES, INC.  Notes to Condensed Consolidated Financial Statements  December 31, 2024  (Unaudited)   (3) The Company’s subsidiary, NTE, has an overdraft facility with HSBC Bank plc whereby the bank would cover any overdrafts up to £300,000, or approximately $375,000. The annual interest rate was 9.5% as of December 31, 2024 and June 30, 2024. The total outstanding balance as of December 31, 2024 and June 30, 2024 was £Nil.   This overdraft facility requires that the aggregate amount of invoiced trade debtors (net of provisions for bad and doubtful debts and excluding intra-group debtors) of NTE, not exceeding 90 days old, will not be less than an amount equal to 200% of the facility. As of December 31, 2024, NTE was in compliance with this covenant.   (4) The Company’s subsidiary, NetSol PK, has an export refinance facility with Askari Bank Limited, secured by NetSol PK’s assets. This is a revolving loan that matures every nine months. The total facility amount is Rs. 500,000,000 or $1,793,915 at December 31, 2024 and Rs. 500,000,000 or $1,796,558 at June 30, 2024. The interest rate for the loan was 10.0% and 17.5% at December 31, 2024 and June 30, 2024, respectively.   (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. 3,550,937 or $12,740, at December 31, 2024. The balance outstanding at December 31, 2024 and June 30, 2024 was Rs. Nil. The interest rate for the loan was 14.1% at December 31, 2024 and 22.2% at June 30, 2024.   This facility requires NetSol PK to maintain a long-term debt equity ratio of 60:40 and a current ratio of 1:1. As of December 31, 2024, 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 or $1,363,375 and Rs. 380,000,000 or $1,365,384 at December 31, 2024 and June 30, 2024, respectively. The interest rate for the loan was 10.0% and 17.5% at December 31, 2024 and June 30, 2024, respectively.   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 December 31, 2024, 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. 1,300,000,000 or $4,664,180 and Rs. 900,000,000 or $3,233,804, at December 31, 2024 and June 30, 2024, respectively. NetSol PK used Rs. 1,300,000,000 or $4,664,180 and Rs. 700,000,000 or $2,515,181, at December 31, 2024 and June 30, 2024, respectively. The interest rate for the loan was 10.0% and 17.5% at December 31, 2024 and June 30, 2024, respectively.   (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 December 31, 2024, NetSol PK used Rs. 8,804,426 or $31,589 which was shown as current. As of June 30, 2024, NetSol PK used Rs. 15,819,683 or $56,842 of which $9,684 was shown as long term and $47,158 as current. The interest rate for the loan was from 22.7% to 24.2% at December 31, 2024 and June 30, 2024.   (9) The Company’s subsidiary, NetSol Beijing, has a one year, short-term loan facility with Bank of China, secured by a personal guarantee from NetSol Beijing’s General Manager. The facility amount is CNY 3,000,000 or $410,959. NetSol Beijing used CNY 3,000,000 or $410,959 at December 31, 2024. NetSol Beijing used CNY 3,000,000 or $412,655, at June 30, 2024. The interest rate of the loan was 3.8% at December 31, 2024 and June 30, 2024.   (10) The Company leases various fixed assets under finance lease arrangements expiring in various years through 2027. 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 December 31, 2024 and 2023.
SCHEDULE OF AGGREGATE MINIMUM FUTURE LEASE PAYMENTS UNDER CAPITAL LEASES	Following are the aggregate minimum future lease payments under finance leases as of December 31, 2024: SCHEDULE OF AGGREGATE MINIMUM FUTURE LEASE PAYMENTS UNDER CAPITAL LEASES      Amount   Minimum Lease Payments         Within year 1   $ 25,403   Within year 2     25,403   Within year 3     77,567   Total Minimum Lease Payments     128,373   Interest Expense relating to future periods     (28,834 ) Present Value of minimum lease payments     99,539   Less: Current portion     (12,588 ) Non-Current portion   $ 86,951
SCHEDULE OF AGGREGATE FUTURE LONG TERM DEBT PAYMENTS	Following are the aggregate future long term debt payments as of December 31, 2024 which consists of “Sale and Leaseback Financing (8)”. SCHEDULE OF AGGREGATE FUTURE LONG TERM DEBT PAYMENTS      Amount   Loan Payments         Within year 1   $ 30,754   Within year 2     835   Total Loan Payments     31,589   Less: Current portion     (31,589 ) Non-Current portion   $ -

v3.25.0.1

STOCKHOLDERS’ EQUITY (Tables)	6 Months Ended
	Dec. 31, 2024
Equity [Abstract]
SUMMARY OF UNVESTED STOCK GRANTS AWARDED AS COMPENSATION	The following table summarizes stock grants awarded as compensation: SUMMARY OF UNVESTED STOCK GRANTS AWARDED AS COMPENSATION      # Number of shares     Weighted Average Grant Date Fair Value ($)   Unvested, June 30, 2024     -     $ -   Granted     29,124     $ 2.73   Vested     (29,124 )   $ 2.73   Unvested, December 31, 2024     -     $ -

v3.25.0.1

INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN (Tables)	6 Months Ended
	Dec. 31, 2024
Share-Based Payment Arrangement [Abstract]
SCHEDULE OF COMMON STOCK PURCHASE OPTIONS	SCHEDULE OF COMMON STOCK PURCHASE OPTIONS  OPTIONS:                             # of shares     Weighted Average Exercise Price     Weighted Average Remaining Contractual Life (in years)     Aggregated Intrinsic Value                             Outstanding and exercisable, June 30, 2024     250,000     $ 2.15       0.50           Granted     -       -       -       -   Exercised     (200,000 )     2.15       -       -   Expired / Cancelled     -       -       -       -   Outstanding and exercisable, December 31, 2024     50,000     $ 2.15       0.003     $ 23,500
SUMMARY OF STOCK OPTIONS OUTSTANDING	The following table summarizes information about stock options outstanding and exercisable at December 31, 2024. SUMMARY OF STOCK OPTIONS OUTSTANDING  Exercise Price   Number Outstanding and Exercisable     Weighted Average Remaining Contractual Life     Weighted Average Exercise Price   OPTIONS:                                                   $2.15     50,000       0.003     $ 2.15   $2.15     50,000       0.003     $ 2.15   Totals     50,000       0.003     $ 2.15

v3.25.0.1

OPERATING SEGMENTS (Tables)	6 Months Ended
	Dec. 31, 2024
Segment Reporting [Abstract]
SUMMARY OF IDENTIFIABLE ASSETS	The following table presents a summary of identifiable assets as of December 31, 2024 and June 30, 2024: SUMMARY OF IDENTIFIABLE ASSETS      As of     As of       December 31, 2024     June 30, 2024   Identifiable assets:                 Corporate headquarters   $ 906,828     $ 808,385   North America     7,246,715       6,114,142   Europe     8,516,144       9,410,098   Asia - Pacific     42,400,442       47,853,817   Consolidated   $ 59,070,129     $ 64,186,442   Identifiable assets   $ 59,070,129     $ 64,186,442
SUMMARY OF REVENUE STREAMS	The following table presents a summary of revenue streams by segment for the three months ended December 31, 2024 and 2023: SUMMARY OF REVENUE STREAMS                                                        2024     2023       License fees     Subscription and support     Services     Total     License fees     Subscription and support     Services     Total                                                     North America   $ -     $ 1,606,262     $ 1,601,011     $ 3,207,273     $ -     $ 1,168,224     $ 296,997     $ 1,465,221   Europe     72,688       1,202,858       1,985,634       3,261,180       4,650       874,096       1,593,611       2,472,357   Asia-Pacific     -       5,833,509       3,234,699       9,068,208       2,985,803       4,785,461       3,529,099       11,300,363   Total   $ 72,688     $ 8,642,629     $ 6,821,344     $ 15,536,661     $ 2,990,453     $ 6,827,781     $ 5,419,707     $ 15,237,941     The following table presents a summary of revenue streams by segment for the six months ended December 31, 2024 and 2023:                                                         2024     2023       License fees     Subscription and support     Services     Total     License fees     Subscription and support     Services     Total                                                     North America   $ -     $ 2,868,907     $ 3,207,027     $ 6,075,934     $ -     $ 2,293,038     $ 580,798     $ 2,873,836   Europe     73,917       2,095,630       3,586,919       5,756,466       8,966       1,588,084       3,437,340       5,034,390   Asia-Pacific     -       11,870,563       6,432,196       18,302,759       4,261,936       9,458,902       7,851,058       21,571,896   Total   $ 73,917     $ 16,835,100     $ 13,226,142     $ 30,135,159     $ 4,270,902     $ 13,340,024     $ 11,869,196     $ 29,480,122
SUMMARY OF OPERATING INFORMATION	The following table presents a summary of operating information for the three and six months ended December 31:    SUMMARY OF OPERATING INFORMATION     2024     2023     2024     2023       For the Three Months Ended December 31,     For the Six Months Ended December 31,       2024     2023     2024     2023   Revenues from unaffiliated customers:                                 North America   $ 3,207,273     $ 1,465,221     $ 6,075,934     $ 2,873,836   Europe     3,261,180       2,472,357       5,756,466       5,034,390   Asia - Pacific     9,068,208       11,300,363       18,302,759       21,571,896   Revenues from unaffiliated customers     15,536,661       15,237,941       30,135,159       29,480,122   Revenue from affiliated customers                                 Asia - Pacific     -       -       -       -   Revenue from affiliated customers     -       -       -       -   Consolidated   $ 15,536,661     $ 15,237,941     $ 30,135,159     $ 29,480,122   Revenue   $ 15,536,661     $ 15,237,941     $ 30,135,159     $ 29,480,122                                     Intercompany revenue                                 Europe   $ 188,756     $ 100,100     $ 205,314     $ 200,417   Asia - Pacific     4,713,799       2,865,277       7,983,143       5,485,596   Eliminated   $ 4,902,555     $ 2,965,377     $ 8,188,457     $ 5,686,013   Revenue   $ 4,902,555     $ 2,965,377     $ 8,188,457     $ 5,686,013                                     Net income (loss) after taxes and before non-controlling interest:                                 Corporate headquarters   $ (103,088 )   $ (922,670 )   $ (765,146 )   $ (1,226,392 ) North America     (380,582 )     (13,278 )     234,261       (69,225 ) Europe     (450,678 )     (150,935 )     (973,676 )     (242,819 ) Asia - Pacific     (251,858 )     2,069,698       536,064       2,812,314   Consolidated   $ (1,186,206 )   $ 982,815     $ (968,497 )   $ 1,273,878   Net income (loss) after taxes and before non-controlling interest   $ (1,186,206 )   $ 982,815     $ (968,497 )   $ 1,273,878                                     Depreciation and amortization:                                 North America   $ 599     $ 407     $ 1,070     $ 898   Europe     53,179       57,758       112,859       120,659   Asia - Pacific     318,807       370,998       624,653       838,392   Consolidated   $ 372,585     $ 429,163     $ 738,582     $ 959,949   Depreciation and amortization   $ 372,585     $ 429,163     $ 738,582     $ 959,949                                     Interest expense:                                 Corporate headquarters   $ 11,059     $ 6,538     $ 20,451     $ 12,659   Europe     12,059       1,834       12,059       6,476   Asia - Pacific     213,268       281,950       462,095       547,204   Consolidated   $ 236,386     $ 290,322     $ 494,605     $ 566,339   Interest expense   $ 236,386     $ 290,322     $ 494,605     $ 566,339                                     Income tax expense:                                 Europe   $ -     $ (93,583 )   $ -     $ (93,583 ) Asia - Pacific     331,614       243,636       561,431       365,531   Consolidated   $ 331,614     $ 150,053     $ 561,431     $ 271,948   Income tax expense   $ 331,614     $ 150,053     $ 561,431     $ 271,948
SUMMARY OF CAPITAL EXPENDITURES	The following table presents a summary of capital expenditures for the six months ended December 31: SUMMARY OF CAPITAL EXPENDITURES      2024     2023       For the Six Months       Ended December 31,       2024     2023   Capital expenditures:                 North America   $ 3,841     $ -   Europe     56,204       417,104   Asia - Pacific     508,089       153,480   Consolidated   $ 568,134     $ 570,584   Capital expenditures   $ 568,134     $ 570,584

v3.25.0.1

NON-CONTROLLING INTEREST IN SUBSIDIARY (Tables)	6 Months Ended
	Dec. 31, 2024
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 December 31, 2024                 NetSol PK     32.38 %   $ 5,163,259   NetSol-Innovation     32.38 %     (538,843 ) NAMECET     32.38 %     (31,713 ) NetSol Thai     0.006 %     (169 ) OTOZ Thai     0.01 %     20   OTOZ     0.00 %     -   Total           $ 4,592,554     SUBSIDIARY   Non-Controlling Interest %     Non-Controlling Interest at June 30, 2024                 NetSol PK     32.38 %   $ 4,679,101   NetSol-Innovation     32.38 %     137,232   NAMECET     32.38 %     (21,014 ) NetSol Thai     0.006 %     (163 ) OTOZ Thai     5.60 %     (17,483 ) OTOZ     5.59 %     (83,255 ) Total           $ 4,694,418
SCHEDULE OF CHANGE IN OWNERSHIP INTEREST	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     2024     2023     2024     2023       For the Three Months Ended December 31,     For the Six Months Ended December 31,       2024     2023     2024     2023                             Net income (loss) attributable to NetSol    $ (1,147,042 )   $ 408,316     $ (1,076,247 )   $ 439,206   Transfer to (from) non-controlling interest                                  Decrease in paid-in capital for purchase of 177,558 shares of OTOZ Inc common stock     (31,004 )             (166,123 )     -   Net transfer to (from) non-controlling interest     (31,004 )     -       (166,123 )     -   Change from net income (loss) attributable to NetSol and transfer to (from) non-controlling interest   $ (1,178,046 )   $ 408,316     $ (1,242,370 )   $ 439,206

v3.25.0.1

SCHEDULE OF FAIR VALUE OF FINANCIAL ASSETS MEASURED ON RECURRING BASIS (Details) - USD ($)	Dec. 31, 2024	Jun. 30, 2024
Platform Operator, Crypto Asset [Line Items]
Revenues in excess of billings - long term	$ 777,428	$ 954,029
Total	777,428	954,029
Fair Value, Inputs, Level 1 [Member]
Platform Operator, Crypto Asset [Line Items]
Revenues in excess of billings - long term
Total
Fair Value, Inputs, Level 2 [Member]
Platform Operator, Crypto Asset [Line Items]
Revenues in excess of billings - long term
Total
Fair Value, Inputs, Level 3 [Member]
Platform Operator, Crypto Asset [Line Items]
Revenues in excess of billings - long term	777,428	954,029
Total	$ 777,428	$ 954,029

v3.25.0.1

SCHEDULE OF FAIR VALUE OF FINANCIAL INSTRUMENTS RECONCILIATION (Details)	6 Months Ended
	Dec. 31, 2024 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning balance	$ 954,029
Amortization during the period	36,734
Transfers to short term	(206,964)
Effect of Translation Adjustment	(6,371)
Ending balance	777,428
Revenues in Excess of Billings - Long Term [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning balance	1,106,475
Amortization during the period
Transfers to short term	(206,964)
Effect of Translation Adjustment	(6,957)
Ending balance	892,554
Fair Value Discount [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Beginning balance	(152,446)
Amortization during the period	36,734
Transfers to short term
Effect of Translation Adjustment	586
Ending balance	$ (115,126)

v3.25.0.1

ACCOUNTING POLICIES (Details Narrative)	Dec. 31, 2024 USD ($)	Dec. 31, 2024 CNY (¥)	Dec. 31, 2024 GBP (£)	Jun. 30, 2024 USD ($)
Uninsured deposits related to cash deposits	$ 20,027,837			$ 18,182,002
CHINA
Uninsured deposits related to cash deposits	68,493	¥ 500,000
UNITED KINGDOM
Uninsured deposits related to cash deposits	$ 106,250		£ 85,000

v3.25.0.1

SCHEDULE OF DISAGGREGATED REVENUE BY CATEGORY (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2024	Dec. 31, 2023
Disaggregation of Revenue [Line Items]
Total net revenue	$ 15,536,661	$ 15,237,941	$ 30,135,159	$ 29,480,122
License [Member]
Disaggregation of Revenue [Line Items]
Total net revenue	72,688	2,990,453	73,917	4,270,902
Subscription and Support [Member]
Disaggregation of Revenue [Line Items]
Total net revenue	8,642,629	6,827,781	16,835,100	13,340,024
Service [Member]
Disaggregation of Revenue [Line Items]
Total net revenue	6,821,344	5,419,707	13,226,142	11,869,196
Core Revenue [Member]
Disaggregation of Revenue [Line Items]
Total net revenue	14,587,907	13,932,311	28,308,242	26,699,557
Core Revenue [Member] | License [Member]
Disaggregation of Revenue [Line Items]
Total net revenue	72,688	2,990,453	73,917	4,270,902
Core Revenue [Member] | Subscription and Support [Member]
Disaggregation of Revenue [Line Items]
Total net revenue	8,642,629	6,827,781	16,835,100	13,340,024
Core Revenue [Member] | Service [Member]
Disaggregation of Revenue [Line Items]
Total net revenue	5,872,590	4,114,077	11,399,225	9,088,631
Non-Core Revenue [Member]
Disaggregation of Revenue [Line Items]
Total net revenue	948,754	1,305,630	1,826,917	2,780,565
Non-Core Revenue [Member] | Service [Member]
Disaggregation of Revenue [Line Items]
Total net revenue	$ 948,754	$ 1,305,630	$ 1,826,917	$ 2,780,565

v3.25.0.1

SCHEDULE OF REVENUES IN EXCESS OF BILLINGS AND DEFERRED REVENUE (Details) - USD ($)	Dec. 31, 2024	Jun. 30, 2024
Revenue from Contract with Customer [Abstract]
Revenues in excess of billings	$ 11,438,977	$ 13,638,547
Unearned revenue	$ 3,320,286	$ 8,752,153

v3.25.0.1

SCHEDULE OF UNEARNED REVENUE RECONCILIATION (Details)	6 Months Ended
	Dec. 31, 2024 USD ($)
Revenue from Contract with Customer [Abstract]
Beginning balance	$ 8,752,153
Invoiced	9,309,191
Revenue Recognized	(14,644,315)
Adjustments	(96,743)
Ending balance	$ 3,320,286

v3.25.0.1

REVENUE RECOGNITION (Details Narrative)	3 Months Ended	6 Months Ended
	Dec. 31, 2024 USD ($)	Dec. 31, 2024 USD ($)
Revenue from Contract with Customer [Abstract]
Company recognized revenue	$ 3,514,159	$ 7,686,403
Unsatisfied performance obligation	20,000,000	20,000,000
Revenue remaining performance obligation	$ 17,000,000	$ 17,000,000

v3.25.0.1

SCHEDULE OF DILUTIVE POTENTIAL COMMON SHARES (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2024	Dec. 31, 2023
Net income per share:
Net income (loss) available to common shareholders, Basic Net Income	$ (1,147,042)	$ 408,316	$ (1,076,247)	$ 439,206
Net income (loss) available to common shareholders, Basic Shares	11,484,298	11,372,819	11,456,996	11,359,338
Net income (loss) available to common shareholders, Basic Per Share	$ (0.10)	$ 0.04	$ (0.09)	$ 0.04
Net income (loss) available to common shareholders, Diluted Net Income	$ (1,147,042)	$ 408,316	$ (1,076,247)	$ 439,206
Net income (loss) available to common shareholders, Diluted Shares	11,484,298	11,372,819	11,456,996	11,359,338
Net income (loss) available to common shareholders, Diluted Per Share	$ (0.10)	$ 0.04	$ (0.09)	$ 0.04

v3.25.0.1

SCHEDULE OF FOREIGN CURRENCY TRANSLATION (Details)	6 Months Ended
	Dec. 31, 2024
AUSTRALIA
Foreign currency translation	Australian Dollar
NTA [Member]
Foreign currency translation	USD
Otoz [Member]
Foreign currency translation	USD
NTE [Member]
Foreign currency translation	British Pound
AEL [Member]
Foreign currency translation	British Pound
VLSH [Member]
Foreign currency translation	British Pound
VLS [Member]
Foreign currency translation	British Pound
VLSIL [Member]
Foreign currency translation	Euro
NetSol PK [Member]
Foreign currency translation	Pakistan Rupee
Connect [Member]
Foreign currency translation	Pakistan Rupee
NetSol Innovation [Member]
Foreign currency translation	Pakistan Rupee
NetSol Thai [Member]
Foreign currency translation	Thai Bhat
Otoz Thai [Member]
Foreign currency translation	Thai Bhat
Namecet [Member]
Foreign currency translation	AED
NetSol Beijing [Member]
Foreign currency translation	Chinese Yuan
Tianjin [Member]
Foreign currency translation	Chinese Yuan
Parent Company [Member]
Foreign currency translation	USD

v3.25.0.1

OTHER COMPREHENSIVE INCOME AND FOREIGN CURRENCY (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2024	Dec. 31, 2023	Jun. 30, 2024
Other Comprehensive Income And Foreign Currency
Accumulated other comprehensive loss	$ 46,187,766		$ 46,187,766		$ 45,935,616
Net translation adjustment	(138,743)	$ 541,393	(252,150)	$ 104,847
Net translation adjustment	$ 138,743	$ (541,393)	$ 252,150	$ (104,847)

v3.25.0.1

MAJOR CUSTOMERS (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2024	Dec. 31, 2023	Jun. 30, 2024
Concentration Risk [Line Items]
Revenue	$ 15,536,661	$ 15,237,941	$ 30,135,159	$ 29,480,122
Revenues in excess of billings	10,661,549		10,661,549		$ 12,684,518
Daimler Financial Services [Member]
Concentration Risk [Line Items]
Revenues in excess of billings	761,367		761,367		892,109
BMW Financial [Member]
Concentration Risk [Line Items]
Revenues in excess of billings	$ 1,375,671		$ 1,375,671		1,419,997
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Daimler Financial Services [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	19.60%	25.90%	20.80%	25.90%
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | BMW Financial [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	20.10%	4.60%	18.50%	6.00%
Accounts Receivable [Member] | Daimler Financial Services [Member]
Concentration Risk [Line Items]
Accounts receivable, gross	$ 368,862		$ 368,862		538,648
Accounts Receivable [Member] | BMW Financial [Member]
Concentration Risk [Line Items]
Accounts receivable, gross	107,716		107,716		$ 505,875
Daimler Financial Services [Member]
Concentration Risk [Line Items]
Revenue	3,042,849	$ 3,945,061	6,260,390	$ 7,632,692
BMW Financial [Member]
Concentration Risk [Line Items]
Revenue	$ 3,116,086	$ 699,966	$ 5,588,787	$ 1,109,955

v3.25.0.1

SCHEDULE OF OTHER CURRENT ASSETS (Details) - USD ($)	Dec. 31, 2024	Jun. 30, 2024
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid Expenses	$ 1,554,542	$ 1,314,524
Advance Income Tax	361,010	300,368
Employee Advances	209,650	165,264
Security Deposits	157,548	199,633
Other Receivables	553,283	258,880
Other Assets	355,345	362,117
Net Balance	$ 3,191,378	$ 2,600,786

v3.25.0.1

SCHEDULE OF REVENUE IN EXCESS OF BILLING (Details) - USD ($)	Dec. 31, 2024	Jun. 30, 2024
Contractors [Abstract]
Revenues in excess of billings - long term	$ 892,554	$ 1,106,475
Present value discount	(115,126)	(152,446)
Net Balance	$ 777,428	$ 954,029

v3.25.0.1

REVENUES IN EXCESS OF BILLINGS – LONG TERM (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2024	Dec. 31, 2023	Jun. 30, 2024
Construction Contractor, Receivable, after Year One, Interest Rate [Line Items]
Interest income	$ 18,367	$ 12,309	$ 36,734	$ 18,464
Minimum [Member]
Construction Contractor, Receivable, after Year One, Interest Rate [Line Items]
Interest rate discount			7.30%		7.30%
Maximum [Member]
Construction Contractor, Receivable, after Year One, Interest Rate [Line Items]
Interest rate discount			17.50%		17.50%

v3.25.0.1

SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($)	Dec. 31, 2024	Jun. 30, 2024
Property, Plant and Equipment [Line Items]
Subtotal	$ 17,985,344	$ 17,569,089
Accumulated Depreciation	(13,050,846)	(12,462,247)
Property and Equipment, Net	4,934,498	5,106,842
Office Furniture and Equipment [Member]
Property, Plant and Equipment [Line Items]
Subtotal	2,377,621	2,352,940
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Subtotal	9,156,088	8,679,791
Assets Held under Capital Leases [Member]
Property, Plant and Equipment [Line Items]
Subtotal	133,897	154,718
Building [Member]
Property, Plant and Equipment [Line Items]
Subtotal	3,597,784	3,602,819
Land [Member]
Property, Plant and Equipment [Line Items]
Subtotal	912,129	913,473
Automobiles [Member]
Property, Plant and Equipment [Line Items]
Subtotal	1,594,928	1,658,961
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Subtotal	$ 212,897	$ 206,387

v3.25.0.1

SCHEDULE OF FIXED ASSETS HELD UNDER CAPITAL LEASES (Details) - USD ($)	Dec. 31, 2024	Jun. 30, 2024
Property, Plant and Equipment [Line Items]
Total	$ 133,897	$ 154,718
Less:  Accumulated Depreciation - Net	(27,478)	(25,078)
Fixed assets held under capital leases, Total	106,419	129,640
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Total	$ 133,897	$ 154,718

v3.25.0.1

SCHEDULE OF FINANCE LEASE TERM (Details)	Dec. 31, 2024	Jun. 30, 2024
Property, Plant and Equipment [Abstract]
Weighted average remaining lease term - Finance leases	2 years 3 months	2 years 9 months
Weighted average discount rate - Finance leases	11.30%	11.30%

v3.25.0.1

PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2024	Dec. 31, 2023
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 372,585	$ 429,163	$ 738,582	$ 833,908
Depreciation reflected in cost of revenues	$ 237,882	$ 264,374	$ 466,432	$ 531,316

v3.25.0.1

SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO LEASE (Details) - USD ($)	Dec. 31, 2024	Jun. 30, 2024
Leases
Operating lease assets, net	$ 1,069,948	$ 1,328,624
Operating, Current	518,075	608,202
Operating, Noncurrent	512,062	688,749
Total Lease Liabilities	$ 1,030,137	$ 1,296,951

v3.25.0.1

SCHEDULE OF COMPONENTS OF LEASE COST (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2024	Dec. 31, 2023
Leases
Amortization of finance lease assets	$ 7,720	$ 2,365	$ 21,597	$ 4,661
Interest on finance lease obligation	2,907	770	5,994	1,639
Operating lease cost	98,492	98,309	198,338	205,342
Short term lease cost	60,477	40,216	110,040	81,224
Sub lease income	(8,514)	(8,199)	(16,920)	(16,605)
Total lease cost	$ 161,082	$ 133,461	$ 319,049	$ 276,261

v3.25.0.1

SCHEDULE OF LEASE TERM AND DISCOUNT RATE (Details)	Dec. 31, 2024	Jun. 30, 2024
Leases
Weighted average remaining lease term - Operating leases	1 year 7 months 2 days	1 year 11 months 26 days
Weighted average discount rate - Operating leases	4.50%	4.50%

v3.25.0.1

SCHEDULE OF SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION RELATED TO LEASES (Details) - USD ($)	6 Months Ended
	Dec. 31, 2024	Dec. 31, 2023
Leases
Operating cash flows related to operating leases	$ 185,514	$ 140,514
Operating cash flows related to finance leases	5,994	1,638
Financing cash flows related finance leases	$ 9,296	$ 16,424

v3.25.0.1

SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES (Details) - USD ($)	Dec. 31, 2024	Jun. 30, 2024
Leases
Within year 1	$ 559,279
Within year 2	367,204
Within year 3	127,730
Within year 4	53,837
Within year 5	237
Total Lease Payments	1,108,287
Less: Imputed interest	(78,150)
Present Value of lease liabilities	1,030,137	$ 1,296,951
Less: Current portion	(518,075)	(608,202)
Non-Current portion	$ 512,062	$ 688,749

v3.25.0.1

LEASES (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2024	Dec. 31, 2023
Lease Agreement [Member]
Operating lease income	$ 8,514	$ 8,199	$ 16,920	$ 16,605
Minimum [Member]
Finance lease term	1 year		1 year
Operating lease term	1 year		1 year
Maximum [Member]
Finance lease term	10 years		10 years
Operating lease term	10 years		10 years

v3.25.0.1

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($)	Dec. 31, 2024	Jun. 30, 2024
Payables and Accruals [Abstract]
Accounts Payable	$ 969,495	$ 1,426,930
Accrued Liabilities	4,333,709	4,323,662
Accrued Payroll	1,336,128	1,392,112
Accrued Payroll Taxes	191,462	215,197
Taxes Payable	267,422	634,035
Other Payable	234,344	240,406
Total	$ 7,332,560	$ 8,232,342

v3.25.0.1

SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES (Details) - USD ($)		Dec. 31, 2024	Jun. 30, 2024
Debt Instrument [Line Items]
Total		$ 8,771,644	$ 6,270,934
Current Maturities		8,771,644	6,261,250
Long-Term Maturities			9,684
Subsidiary Finance Leases, Total	[1]	99,539	100,962
Subsidiary Finance Leases, Current Maturities	[1]	12,588	14,875
Subsidiary Finance Leases, Long-Term Maturities	[1]	86,951	86,087
Total		8,871,183	6,371,896
Current Maturities		8,784,232	6,276,125
Long-Term Maturities		86,951	95,771
D&O Insurance [Member]
Debt Instrument [Line Items]
Total	[2]	102,626	124,314
Current Maturities	[2]	102,626	124,314
Long-Term Maturities	[2]
Line of Credit [Member]
Debt Instrument [Line Items]
Total	[3]	405,000
Current Maturities	[3]	405,000
Long-Term Maturities	[3]
Bank Overdraft Facility [Member]
Debt Instrument [Line Items]
Total	[4]
Current Maturities	[4]
Long-Term Maturities	[4]
Loan Payable Bank - Export Refinance [Member]
Debt Instrument [Line Items]
Total	[5]	1,793,915	1,796,558
Current Maturities	[5]	1,793,915	1,796,558
Long-Term Maturities	[5]
Loan Payable Bank - Running Finance [Member]
Debt Instrument [Line Items]
Total	[6]
Current Maturities	[6]
Long-Term Maturities	[6]
Loan Payable Bank - Export Refinance II [Member]
Debt Instrument [Line Items]
Total	[7]	1,363,375	1,365,384
Current Maturities	[7]	1,363,375	1,365,384
Long-Term Maturities	[7]
Loan Payable Bank - Export Refinance III [Member]
Debt Instrument [Line Items]
Total	[8]	4,664,180	2,515,181
Current Maturities	[8]	4,664,180	2,515,181
Long-Term Maturities	[8]
Sale and Leaseback Financing [Member]
Debt Instrument [Line Items]
Total	[9]	31,589	56,842
Current Maturities	[9]	31,589	47,158
Long-Term Maturities	[9]		9,684
Short Term Financing [Member]
Debt Instrument [Line Items]
Total	[10]	410,959	412,655
Current Maturities	[10]	410,959	412,655
Long-Term Maturities	[10]
[1] The Company leases various fixed assets under finance lease arrangements expiring in various years through 2027. 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 December 31, 2024 and 2023. [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 8.6% to 10.9% as of December 31, 2024 and June 30, 2024. [3] The Company has an uncommitted discretionary demand line of credit up to an aggregate amount of $1,000,000 with HSBC, secured by a lien on the Company’s assets. The annual interest rate was 8.25% at December 31, 2024 and 8.75% as of June 30, 2024. The total outstanding balance as of December 31, 2024 and June 30, 2024 was $405,000 and $nil, respectively. [4] The Company’s subsidiary, NTE, has an overdraft facility with HSBC Bank plc whereby the bank would cover any overdrafts up to £300,000, or approximately $375,000. The annual interest rate was 9.5% as of December 31, 2024 and June 30, 2024. The total outstanding balance as of December 31, 2024 and June 30, 2024 was £Nil. [5] 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 or $1,793,915 at December 31, 2024 and Rs. 500,000,000 or $1,796,558 at June 30, 2024. The interest rate for the loan was 10.0% and 17.5% at December 31, 2024 and June 30, 2024, respectively. [6] 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. 3,550,937 or $12,740, at December 31, 2024. The balance outstanding at December 31, 2024 and June 30, 2024 was Rs. Nil. The interest rate for the loan was 14.1% at December 31, 2024 and 22.2% at June 30, 2024. [7] The Company’s subsidiary, NetSol PK, has an export refinance facility with Samba Bank Limited, secured by NetSol PK’s assets. This is a revolving loan that matures every nine months. The total facility amount is Rs. 380,000,000 or $1,363,375 and Rs. 380,000,000 or $1,365,384 at December 31, 2024 and June 30, 2024, respectively. The interest rate for the loan was 10.0% and 17.5% at December 31, 2024 and June 30, 2024, respectively. [8] The Company’s subsidiary, NetSol PK, has an export refinance facility with Habib Metro Bank Limited, secured by NetSol PK’s assets. This is a revolving loan that matures every nine months. The total facility amount is Rs. 1,300,000,000 or $4,664,180 and Rs. 900,000,000 or $3,233,804, at December 31, 2024 and June 30, 2024, respectively. NetSol PK used Rs. 1,300,000,000 or $4,664,180 and Rs. 700,000,000 or $2,515,181, at December 31, 2024 and June 30, 2024, respectively. The interest rate for the loan was 10.0% and 17.5% at December 31, 2024 and June 30, 2024, respectively. [9] The Company’s subsidiary, NetSol PK, availed sale and leaseback financing from First Habib Modaraba secured by the transfer of the vehicles’ title. As of December 31, 2024, NetSol PK used Rs. 8,804,426 or $31,589 which was shown as current. As of June 30, 2024, NetSol PK used Rs. 15,819,683 or $56,842 of which $9,684 was shown as long term and $47,158 as current. The interest rate for the loan was from 22.7% to 24.2% at December 31, 2024 and June 30, 2024. [10] The Company’s subsidiary, NetSol Beijing, has a one year, short-term loan facility with Bank of China, secured by a personal guarantee from NetSol Beijing’s General Manager. The facility amount is CNY 3,000,000 or $410,959. NetSol Beijing used CNY 3,000,000 or $410,959 at December 31, 2024. NetSol Beijing used CNY 3,000,000 or $412,655, at June 30, 2024. The interest rate of the loan was 3.8% at December 31, 2024 and June 30, 2024.

v3.25.0.1

SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES (Details) (Parenthetical)	6 Months Ended
	Dec. 31, 2024 USD ($)	Dec. 31, 2024 CNY (¥)	Dec. 31, 2024 INR (₨)	Dec. 31, 2024 GBP (£)	Jun. 30, 2024 USD ($)	Jun. 30, 2024 CNY (¥)	Jun. 30, 2024 INR (₨)	Jun. 30, 2024 GBP (£)
Short Term Financing [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 410,959	¥ 3,000,000
NetSol Beijing [Member] | Short Term Financing [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 410,959	¥ 3,000,000			$ 412,655	¥ 3,000,000
Debt instrument, interest rate	3.80%	3.80%	3.80%	3.80%	3.80%	3.80%	3.80%	3.80%
HSBC Bank [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 1,000,000
Debt instrument, interest rate	8.25%	8.25%	8.25%	8.25%	8.75%	8.75%	8.75%	8.75%
Line of credit	$ 405,000
HSBC Bank [Member] | NTE [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 375,000			£ 300,000
Debt instrument, interest rate	9.50%	9.50%	9.50%	9.50%	9.50%	9.50%	9.50%	9.50%
Line of credit | £
Commitment fee percentage	200.00%
Askari Bank Limited [Member] | NetSol PK [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 1,793,915		₨ 500,000,000		$ 1,796,558		₨ 500,000,000
Debt instrument, interest rate	10.00%	10.00%	10.00%	10.00%	17.50%	17.50%	17.50%	17.50%
Askari Bank Limited [Member] | NetSol PK [Member] | Running Finance Facility [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 12,740		₨ 3,550,937
Debt instrument, interest rate	14.10%	14.10%	14.10%	14.10%	22.20%	22.20%	22.20%	22.20%
Line of credit | ₨
Debt instrument, covenant description	This facility requires NetSol PK to maintain a long-term debt equity ratio of 60:40 and a current ratio of 1:1. As of December 31, 2024, NetSol PK was in compliance with this covenant.
Samba Bank Limited [Member] | NetSol PK [Member] | Refinance Facility [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 1,363,375		₨ 380,000,000		$ 1,365,384		₨ 380,000,000
Debt instrument, interest rate	10.00%	10.00%	10.00%	10.00%	17.50%	17.50%	17.50%	17.50%
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 December 31, 2024, NetSol PK was in compliance with these covenants.
Habib Metro Bank Limited [Member] | Refinance Facility [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 4,664,180		₨ 1,300,000,000		$ 3,233,804		₨ 900,000,000
Habib Metro Bank Limited [Member] | NetSol PK [Member] | Refinance Facility [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 4,664,180		₨ 1,300,000,000		$ 2,515,181		₨ 700,000,000
Debt instrument, interest rate	10.00%	10.00%	10.00%	10.00%	17.50%	17.50%	17.50%	17.50%
Habib Metro Bank Limited [Member] | NetSol PK [Member] | Sale and Leaseback Financing [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 31,589		₨ 8,804,426		$ 56,842		₨ 15,819,683
Line of credit, long term					9,684
Line of credit facility current					$ 47,158
Minimum [Member] | Habib Metro Bank Limited [Member] | NetSol PK [Member] | Sale and Leaseback Financing [Member]
Debt Instrument [Line Items]
Debt instrument, interest rate	22.70%	22.70%	22.70%	22.70%	22.70%	22.70%	22.70%	22.70%
Maximum [Member] | Habib Metro Bank Limited [Member] | NetSol PK [Member] | Sale and Leaseback Financing [Member]
Debt Instrument [Line Items]
Debt instrument, interest rate	24.20%	24.20%	24.20%	24.20%	24.20%	24.20%	24.20%	24.20%
Directors and Officers and Error and Omissions Liability Insurance [Member] | Minimum [Member]
Debt Instrument [Line Items]
Line of credit facility interest rate	8.60%	8.60%	8.60%	8.60%	8.60%	8.60%	8.60%	8.60%
Directors and Officers and Error and Omissions Liability Insurance [Member] | Maximum [Member]
Debt Instrument [Line Items]
Line of credit facility interest rate	10.90%	10.90%	10.90%	10.90%	10.90%	10.90%	10.90%	10.90%

v3.25.0.1

SCHEDULE OF AGGREGATE MINIMUM FUTURE LEASE PAYMENTS UNDER CAPITAL LEASES (Details)	Dec. 31, 2024 USD ($)
Debt Disclosure [Abstract]
Within year 1	$ 25,403
Within year 2	25,403
Within year 3	77,567
Total Minimum Lease Payments	128,373
Interest Expense relating to future periods	(28,834)
Present Value of minimum lease payments	99,539
Less: Current portion	(12,588)
Non-Current portion	$ 86,951

v3.25.0.1

SCHEDULE OF AGGREGATE FUTURE LONG TERM DEBT PAYMENTS (Details)	Dec. 31, 2024 USD ($)
Debt Disclosure [Abstract]
Within year 1	$ 30,754
Within year 2	835
Total Loan Payments	31,589
Less: Current portion	(31,589)
Non-Current portion

v3.25.0.1

SUMMARY OF UNVESTED STOCK GRANTS AWARDED AS COMPENSATION (Details)	6 Months Ended
	Dec. 31, 2024 $ / shares shares
Equity [Abstract]
Number of shares Unvested | shares
Weighted Average Grant Date Fair Value Unvested | $ / shares
Number of shares Granted | shares	29,124
Weighted Average Grant Date Fair Value Granted | $ / shares	$ 2.73
Number of shares Vested | shares	(29,124)
Weighted Average Grant Date Fair Value Vested | $ / shares	$ 2.73
Number of shares Unvested | shares
Weighted Average Grant Date Fair Value Unvested | $ / shares

v3.25.0.1

STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($)	3 Months Ended				6 Months Ended
	Dec. 31, 2024	Sep. 30, 2024	Dec. 31, 2023	Sep. 30, 2023	Dec. 31, 2024	Dec. 31, 2023
Issuance of common stock value for services	$ 39,750	$ 39,750	$ 39,750	$ 48,800
Stock options exercised, shares	190,000				200,000
Exercise price					$ 2.15
Proceeds from stock options exercised					$ 430,000
Compensation expenses	$ 39,750		$ 39,750		$ 79,500	$ 88,550
Board of Directors Chairman [Member]
Issuance of common stock shares for services	15,174				29,124
Issuance of common stock value for services	$ 39,750				$ 79,500

v3.25.0.1

SCHEDULE OF COMMON STOCK PURCHASE OPTIONS (Details) - USD ($)	3 Months Ended	6 Months Ended	12 Months Ended
	Dec. 31, 2024	Dec. 31, 2024	Jun. 30, 2024
Share-Based Payment Arrangement [Abstract]
Number of shares options outstanding, beginning shares		250,000
Number of shares options exercisable, beginning shares		250,000
Weighted average exercise price options outstanding, beginning balance		$ 2.15
Weighted average exercise price option exercisable, beginning balance		$ 2.15
Weighted average remaining life in years outstanding		1 day	6 months
Weighted average remaining life in years exercisable		1 day	6 months
Number of shares options granted, shares
Weighted average exercise price options granted
Number of shares options exercised, shares	(190,000)	(200,000)
Weighted average exercise price options exercised		$ 2.15
Number of shares options expired/cancelled, shares
Weighted average exercise price options expired/cancelled
Number of shares options outstanding, ending shares	50,000	50,000	250,000
Number of shares options exercisable, ending shares	50,000	50,000	250,000
Weighted average exercise price options outstanding, ending balance	$ 2.15	$ 2.15	$ 2.15
Weighted average exercise price option exercisable, ending balance	$ 2.15	$ 2.15	$ 2.15
Aggregate intrinsic value outstanding	$ 23,500	$ 23,500
Aggregate intrinsic value exercisable	$ 23,500	$ 23,500

v3.25.0.1

SUMMARY OF STOCK OPTIONS OUTSTANDING (Details) (Parenthetical)	6 Months Ended
	Dec. 31, 2024 $ / shares
Range One [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise price	$ 2.15

v3.25.0.1

SUMMARY OF STOCK OPTIONS OUTSTANDING (Details) - $ / shares	6 Months Ended	12 Months Ended
	Dec. 31, 2024	Jun. 30, 2024
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Options outstanding, outstanding number of options, shares	50,000
Options exercisable, exercisable number of options, shares	50,000
Options outstanding weighted average remaining life in years	1 day
Options exercisable weighted average remaining life in years	1 day	6 months
Options outstanding weighted average exercise price	$ 2.15
Options exercisable weighted average exercise price	$ 2.15	$ 2.15
Range One [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Options outstanding, outstanding number of options, shares	50,000
Options exercisable, exercisable number of options, shares	50,000
Options outstanding weighted average remaining life in years	1 day
Options exercisable weighted average remaining life in years	1 day
Options outstanding weighted average exercise price	$ 2.15
Options exercisable weighted average exercise price	$ 2.15

v3.25.0.1

INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN (Details Narrative)	6 Months Ended
	Dec. 31, 2024 $ / shares
Share-Based Payment Arrangement [Abstract]
Closing stock price	$ 2.62

v3.25.0.1

SUMMARY OF IDENTIFIABLE ASSETS (Details) - USD ($)	Dec. 31, 2024	Jun. 30, 2024
Revenues from External Customers and Long-Lived Assets [Line Items]
Identifiable assets	$ 59,070,129	$ 64,186,442
Corporate Headquarters [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Identifiable assets	906,828	808,385
North America [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Identifiable assets	7,246,715	6,114,142
Europe [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Identifiable assets	8,516,144	9,410,098
Asia Pacific [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Identifiable assets	$ 42,400,442	$ 47,853,817

v3.25.0.1

SUMMARY OF REVENUE STREAMS (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2024	Dec. 31, 2023
Revenue from External Customer [Line Items]
Total net revenues	$ 15,536,661	$ 15,237,941	$ 30,135,159	$ 29,480,122
North America [Member]
Revenue from External Customer [Line Items]
Total net revenues	3,207,273	1,465,221	6,075,934	2,873,836
Europe [Member]
Revenue from External Customer [Line Items]
Total net revenues	3,261,180	2,472,357	5,756,466	5,034,390
Asia Pacific [Member]
Revenue from External Customer [Line Items]
Total net revenues	9,068,208	11,300,363	18,302,759	21,571,896
License [Member]
Revenue from External Customer [Line Items]
Total net revenues	72,688	2,990,453	73,917	4,270,902
License [Member] | North America [Member]
Revenue from External Customer [Line Items]
Total net revenues
License [Member] | Europe [Member]
Revenue from External Customer [Line Items]
Total net revenues	72,688	4,650	73,917	8,966
License [Member] | Asia Pacific [Member]
Revenue from External Customer [Line Items]
Total net revenues		2,985,803		4,261,936
Subscription and Support [Member]
Revenue from External Customer [Line Items]
Total net revenues	8,642,629	6,827,781	16,835,100	13,340,024
Subscription and Support [Member] | North America [Member]
Revenue from External Customer [Line Items]
Total net revenues	1,606,262	1,168,224	2,868,907	2,293,038
Subscription and Support [Member] | Europe [Member]
Revenue from External Customer [Line Items]
Total net revenues	1,202,858	874,096	2,095,630	1,588,084
Subscription and Support [Member] | Asia Pacific [Member]
Revenue from External Customer [Line Items]
Total net revenues	5,833,509	4,785,461	11,870,563	9,458,902
Service [Member]
Revenue from External Customer [Line Items]
Total net revenues	6,821,344	5,419,707	13,226,142	11,869,196
Service [Member] | North America [Member]
Revenue from External Customer [Line Items]
Total net revenues	1,601,011	296,997	3,207,027	580,798
Service [Member] | Europe [Member]
Revenue from External Customer [Line Items]
Total net revenues	1,985,634	1,593,611	3,586,919	3,437,340
Service [Member] | Asia Pacific [Member]
Revenue from External Customer [Line Items]
Total net revenues	$ 3,234,699	$ 3,529,099	$ 6,432,196	$ 7,851,058

v3.25.0.1

SUMMARY OF OPERATING INFORMATION (Details) - USD ($)	3 Months Ended				6 Months Ended
	Dec. 31, 2024	Sep. 30, 2024	Dec. 31, 2023	Sep. 30, 2023	Dec. 31, 2024	Dec. 31, 2023
Segment Reporting Information [Line Items]
Revenue	$ 15,536,661		$ 15,237,941		$ 30,135,159	$ 29,480,122
Net income (loss) after taxes and before non-controlling interest	(1,186,206)	$ 217,709	982,815	$ 291,063	(968,497)	1,273,878
Depreciation and amortization	372,585		429,163		738,582	959,949
Interest expense	236,386		290,322		494,605	566,339
Income tax expense	331,614		150,053		561,431	271,948
North America [Member]
Segment Reporting Information [Line Items]
Revenue	3,207,273		1,465,221		6,075,934	2,873,836
Net income (loss) after taxes and before non-controlling interest	(380,582)		(13,278)		234,261	(69,225)
Depreciation and amortization	599		407		1,070	898
Europe [Member]
Segment Reporting Information [Line Items]
Revenue	3,261,180		2,472,357		5,756,466	5,034,390
Net income (loss) after taxes and before non-controlling interest	(450,678)		(150,935)		(973,676)	(242,819)
Depreciation and amortization	53,179		57,758		112,859	120,659
Interest expense	12,059		1,834		12,059	6,476
Income tax expense			(93,583)			(93,583)
Asia Pacific [Member]
Segment Reporting Information [Line Items]
Revenue	9,068,208		11,300,363		18,302,759	21,571,896
Net income (loss) after taxes and before non-controlling interest	(251,858)		2,069,698		536,064	2,812,314
Depreciation and amortization	318,807		370,998		624,653	838,392
Interest expense	213,268		281,950		462,095	547,204
Income tax expense	331,614		243,636		561,431	365,531
Corporate Headquarters [Member]
Segment Reporting Information [Line Items]
Net income (loss) after taxes and before non-controlling interest	(103,088)		(922,670)		(765,146)	(1,226,392)
Interest expense	11,059		6,538		20,451	12,659
Unaffiliated Customers [Member]
Segment Reporting Information [Line Items]
Revenue	15,536,661		15,237,941		30,135,159	29,480,122
Unaffiliated Customers [Member] | North America [Member]
Segment Reporting Information [Line Items]
Revenue	3,207,273		1,465,221		6,075,934	2,873,836
Unaffiliated Customers [Member] | Europe [Member]
Segment Reporting Information [Line Items]
Revenue	3,261,180		2,472,357		5,756,466	5,034,390
Unaffiliated Customers [Member] | Asia Pacific [Member]
Segment Reporting Information [Line Items]
Revenue	9,068,208		11,300,363		18,302,759	21,571,896
Affiliated Customers [Member]
Segment Reporting Information [Line Items]
Revenue
Affiliated Customers [Member] | Asia Pacific [Member]
Segment Reporting Information [Line Items]
Revenue
Intercompany Revenue [Member]
Segment Reporting Information [Line Items]
Revenue	4,902,555		2,965,377		8,188,457	5,686,013
Intercompany Revenue [Member] | Europe [Member]
Segment Reporting Information [Line Items]
Revenue	188,756		100,100		205,314	200,417
Intercompany Revenue [Member] | Asia Pacific [Member]
Segment Reporting Information [Line Items]
Revenue	$ 4,713,799		$ 2,865,277		$ 7,983,143	$ 5,485,596

v3.25.0.1

SUMMARY OF CAPITAL EXPENDITURES (Details) - USD ($)	6 Months Ended
	Dec. 31, 2024	Dec. 31, 2023
Revenues from External Customers and Long-Lived Assets [Line Items]
Capital expenditures	$ 568,134	$ 570,584
North America [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Capital expenditures	3,841
Europe [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Capital expenditures	56,204	417,104
Asia Pacific [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Capital expenditures	$ 508,089	$ 153,480

v3.25.0.1

OPERATING SEGMENTS (Details Narrative)	6 Months Ended
	Dec. 31, 2024 Segments
Segment Reporting [Abstract]
Number of operating segments	3

v3.25.0.1

SCHEDULE OF BALANCE OF NON-CONTROLLING INTEREST (Details) - USD ($)	Dec. 31, 2024	Dec. 30, 2024	Jun. 30, 2024
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Non-Controlling Interest	$ 4,592,554		$ 4,694,418
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	$ 5,163,259		$ 4,679,101
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	$ (538,843)		$ 137,232
Namecet [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	$ (31,713)		$ (21,014)
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	$ (169)		$ (163)
Otoz Thai [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Non-Controlling Interest, Percentage	0.01%		5.60%
Non-Controlling Interest	$ 20		$ (17,483)
Otoz [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Non-Controlling Interest, Percentage	0.00%	5.59%	5.59%
Non-Controlling Interest			$ (83,255)

v3.25.0.1

SCHEDULE OF CHANGE IN OWNERSHIP INTEREST (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2024	Dec. 31, 2023
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Net income (loss) attributable to NetSol	$ (1,147,042)	$ 408,316	$ (1,076,247)	$ 439,206
Net transfer to (from) non-controlling interest	39,164	(574,499)	(107,750)	(834,672)
Change from net income (loss) attributable to NetSol and transfer to (from) non-controlling interest	(1,147,042)	408,316	(1,076,247)	439,206
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	(1,147,042)	408,316	(1,076,247)	439,206
Decrease in paid-in capital for purchase of 177,558 shares of OTOZ Inc common stock	(31,004)		(166,123)
Net transfer to (from) non-controlling interest	(31,004)		(166,123)
Change from net income (loss) attributable to NetSol and transfer to (from) non-controlling interest	$ (1,178,046)	$ 408,316	$ (1,242,370)	$ 439,206

v3.25.0.1

SCHEDULE OF CHANGE IN OWNERSHIP INTEREST (Details) (Parenthetical)	6 Months Ended
	Dec. 31, 2024 shares
Otoz and Otoz Thai [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Number of shares purchased, shares	177,558

v3.25.0.1

NON-CONTROLLING INTEREST IN SUBSIDIARY (Details Narrative) - USD ($)	6 Months Ended
	Dec. 31, 2024	Dec. 30, 2024	Jun. 30, 2024
Otoz [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Number of common shares issued	177,558
Number of common shares issued, value	$ 8,878
Non-controlling interest, percentage	0.00%	5.59%	5.59%
Otoz Thai [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Non-controlling interest, percentage	0.01%		5.60%

v3.25.0.1

INCOME TAXES (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2024	Dec. 31, 2023
Income Tax Disclosure [Abstract]
Income tax provision	$ 331,614	$ 150,053	$ 561,431	$ 271,948

v3.25.0.1

SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - USD ($)	Feb. 10, 2025	Jan. 03, 2025
Subsequent Event [Line Items]
Stpock repurchased shares	2,358,000
Estimated outstanding shares		89,837,000
Stpock repurchased value	$ 1,345,000
Maximum [Member]
Subsequent Event [Line Items]
Stpock repurchased shares		10,000,000

---