NOTE 13 – LONG TERM INVESTMENT

Drivemate

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 three and nine months ended March 31, 2020, the Company performed $355,051 and $862,767 of services, respectively.

Under the equity method of accounting, the Company recorded its share of net loss of $5,667 and $16,915 for the three and nine months ended March 31, 2020, respectively.

WRLD3D-Related Party

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.

During the three and nine months ended March 31, 2020, NetSol PK provided services valued at $61,842 and $202,199, respectively, which is recorded as services-related party. During the three months and nine months ended March 31, 2019, NetSol PK provided services valued at $156,996 and $494,333, respectively, which is recorded as services-related party. Accounts receivable at March 31, 2020 and June 30, 2019 were $1,332,575 and $1,020,589, respectively. Revenue in excess of billings at March 31, 2020 and June 30, 2019 were $8,245 and $110,827, respectively.

Under the equity method of accounting, the Company recorded its share of net loss of $72,835 and $415,607 for the three and nine months ended March 31, 2020, respectively, and the Company recorded its share of net loss of $245,389 and $843,373 for the three and nine months ended March 31, 2019, respectively.

The following table reflects the above investments at March 31, 2020.