|12 Months Ended|
Jun. 30, 2019
|Investments, All Other Investments [Abstract]|
NOTE 11 – LONG-TERM INVESTMENT
The Company and Drivemate Co., Ltd. (“Drivemate”) entered into a subscription agreement (“Drivemate Agreement”) whereby the Company will purchase an equity interest of 30% in Drivemate. Per the Drivemate Agreement, the Company will purchase 5,469 preferred shares for $1,800,000 consisting of $500,000 cash and $1,300,000 in services. The Company paid $250,000 on May 2, 2019 and received 760 shares for a 5.27% holding in Drivemate. The remaining $250,000 will be paid in $62,500 increments beginning 15 months from the date of the Drivemate Agreement signing with the final payment due 24 months from the date of the Drivemate Agreement signing. Per the Drivemate Agreement, the Company appointed two directors to the Drivemate board. The Company determined that it met the significant influence criteria since two of the four directors are appointed by the Company and the Company is to own 30% of Drivemate at the final payment date; therefore, the Company accounts for the investment using the equity method of accounting.
During the year ended June 30, 2019, the Company performed $245,280 of services.
Under the equity method of accounting, the Company recorded its share of net loss of $3,235 for the year ended June 30, 2019.
On March 2, 2017, 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, 2017. NetSol PK, the subsidiary of the Company, purchased a 12.2% investment in WRLD3D, for $2,777,778 which was earned by providing IT and enterprise software solutions. As of June 30, 2019, the investment earned by NetSol PK was $2,777,778.
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 determined that it met the significant influence criteria since the CEO of WRLD3D is the son of the CEO, Najeeb Ghauri, and also an employee of the Company; therefore, the Company accounts for the investment using equity method of accounting.
During the years ended June 30, 2019 and 2018, NetSol PK provided services valued at $636,731 and $939,749, respectively, which is recorded as services-related party. Accounts receivable at June 30, 2019 and 2018 were $1,020,589 and $473,218, respectively. Revenue in excess of billing at June 30, 2019 and 2018 were $110,827 and $Nil, respectively. Under the equity method of accounting, the Company recorded its share of net loss of $838,610 and $262,556 for the years ended June 30, 2019 and 2018, respectively.
The entire disclosure for investment.
Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef