Other Long Term Assets
|12 Months Ended|
Jun. 30, 2017
|Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]|
|Other Long Term Assets||
NOTE 10 – OTHER LONG TERM ASSETS
(1) INVESTMENT IN WRLD3D
On March 2, 2016, the Company purchased a 4.9% interest in WRLD3D, a non-public company, for $1,111,111. The Company paid $555,556 at the initial closing and $555,555 on September 1, 2016. NetSol PK, the subsidiary of the Company, purchased a 12.2% investment in WRLD3D, for $2,777,778 which will be earned over future periods by providing IT and enterprise software solutions. Per the agreement, NetSol PK is to provide a minimum of $200,000 of services in each three-month period and the entire balance is required to be provided within three years of the date of the agreement. If NetSol PK fails to provide the future services, it may be required to forfeit the shares back to WRLD3D. As of June 30, 2017, the investment earned by NetSol PK is $1,945,909.
In connection with the investment, the Company and NetSol PK received a warrant to purchase preferred stock of WRLD3D which included the following key terms and features:
The Company had originally accounted for the investment under the cost method. On May 31, 2017, the Company determined that it met the significant influence criteria since the newly appointed CEO of WRLD3D is the son of the CEO, Najeeb Ghauri, and also an employee of the Company; therefore, the Company changed the accounting treatment from the cost method to the equity method.
During the years ended June 30, 2017 and 2016, NetSol PK provided services valued at $1,225,434 and $250,770, respectively, which is recorded as services-related party. These services are recorded as accounts receivable until approved by WRLD3D after which the shares are released from restriction. During the year ended June 30, 2017 and 2016, NetSol PK services valued at $1,231,115 and $164,794, respectively, were released from restriction. Revenue in excess of billing at June 30, 2017 and 2016 were $80,705 and $86,385, respectively. During the year ended June 30, 2017, NetSol PK paid $550,000 to WRLD3D to buy out a portion of the services requirement.
At June 30, 2017, the Company has determined that there is no impairment.
The entire disclosure for other assets. This disclosure includes other current assets and other noncurrent assets.
No definition available.