| 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, 2023 |
|
| |
|
|
|
|
|
Current |
|
|
Long-Term |
|
| Name |
|
|
Total |
|
|
Maturities |
|
|
Maturities |
|
| |
|
|
|
|
|
|
|
|
|
|
| D&O Insurance |
(1) |
|
$ |
120,533 |
|
|
$ |
120,533 |
|
|
$ |
- |
|
| Bank Overdraft Facility |
(2) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance |
(3) |
|
|
1,787,821 |
|
|
|
1,787,821 |
|
|
|
- |
|
| Loan Payable Bank - Running Finance |
(4) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance II |
(5) |
|
|
1,358,744 |
|
|
|
1,358,744 |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance III |
(6) |
|
|
2,502,951 |
|
|
|
2,502,951 |
|
|
|
- |
|
| Sale and Leaseback Financing |
(7) |
|
|
256,921 |
|
|
|
157,394 |
|
|
|
99,527 |
|
| Term Finance Facility |
(8) |
|
|
3,392 |
|
|
|
3,392 |
|
|
|
- |
|
| Insurance Financing |
(9) |
|
|
39,587 |
|
|
|
39,587 |
|
|
|
- |
|
| |
|
|
|
6,069,949 |
|
|
|
5,970,422 |
|
|
|
99,527 |
|
| Subsidiary Finance Leases |
(10) |
|
|
12,044 |
|
|
|
12,044 |
|
|
|
- |
|
| |
|
|
$ |
6,081,993 |
|
|
$ |
5,982,466 |
|
|
$ |
99,527 |
|
| |
|
|
As of June 30, 2023 |
|
| |
|
|
|
|
|
Current |
|
|
Long-Term |
|
| Name |
|
|
Total |
|
|
Maturities |
|
|
Maturities |
|
| |
|
|
|
|
|
|
|
|
|
|
| D&O Insurance |
(1) |
|
$ |
89,823 |
|
|
$ |
89,823 |
|
|
$ |
- |
|
| Bank Overdraft Facility |
(2) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance |
(3) |
|
|
1,741,493 |
|
|
|
1,741,493 |
|
|
|
- |
|
| Loan Payable Bank - Running Finance |
(4) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance II |
(5) |
|
|
1,323,535 |
|
|
|
1,323,535 |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance III |
(6) |
|
|
2,438,089 |
|
|
|
2,438,089 |
|
|
|
- |
|
| Sale and Leaseback Financing |
(7) |
|
|
321,113 |
|
|
|
148,264 |
|
|
|
172,849 |
|
| Term Finance Facility |
(8) |
|
|
13,356 |
|
|
|
13,356 |
|
|
|
- |
|
| Insurance Financing |
(9) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| |
|
|
|
5,927,409 |
|
|
|
5,754,560 |
|
|
|
172,849 |
|
| Subsidiary Finance Leases |
(10) |
|
|
28,330 |
|
|
|
24,950 |
|
|
|
3,380 |
|
| |
|
|
$ |
5,955,739 |
|
|
$ |
5,779,510 |
|
|
$ |
176,229 |
|
| (1) |
|
The Company finances
Directors’ and Officers’ (“D&O”) liability insurance and Errors and Omissions (“E&O”) liability
insurance, for which the D&O and E&O balances are renewed on an annual basis and, as such, are recorded in current maturities.
The interest rate on these financings were ranging from 5.0% to 7.9% as of December 31, 2023 and June 30, 2023, respectively. |
| (2) |
|
The Company’s
subsidiary, NTE, has an overdraft facility with HSBC Bank plc whereby the bank would cover any overdrafts up to £300,000, or approximately
$379,747. The annual interest rate was 9.5% as of December 31, 2023. The total outstanding balance as of December 31, 2023 and June 30,
2023 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, 2023, NTE
was in compliance with this covenant. |
NETSOL
TECHNOLOGIES, INC.
Notes
to Condensed Consolidated Financial Statements
December
31, 2023
(Unaudited)
| (3) |
|
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 $1,787,821 at December 31, 2023 and Rs. 500,000,000
or $1,741,493 at June 30, 2023. The interest rate for the loan was 19.0% and 17.0% at December 31, 2023 and June 30, 2023, respectively. |
| (4) |
|
The Company’s
subsidiary, NetSol PK, has a running finance facility with Askari Bank Limited, secured by NetSol PK’s assets. The total facility
amount is Rs. 53,000,000 or $191,654, at December 31, 2023. The balance outstanding at December 31, 2023 and June 30, 2023 was Rs. Nil.
The interest rate for the loan was 23.5 and 24.9% at December 31, 2023 and June 30, 2023, respectively. |
|
|
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, 2023, NetSol PK was in compliance
with this covenant. |
| (5) |
|
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 $1,358,744 and Rs. 380,000,000 or $1,323,535 at
December 31, 2023 and June 30, 2023, respectively. The interest rate for the loan was 19.0% and 18.0% at December 31, 2023 and June 30,
2023, 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, 2023, NetSol PK was in
compliance with these covenants. |
| (6) |
|
The Company’s
subsidiary, NetSol PK, has an export refinance facility with Habib Metro Bank Limited, secured by NetSol PK’s assets. This is a
revolving loan that matures every nine months. The total facility amount is Rs. 900,000,000 or $3,218,078 and Rs. 900,000,000 or $3,134,687,
at December 31, 2023 and June 30, 2023, respectively. NetSol PK used Rs. 700,000,000 or $2,502,951 and Rs. 700,000,000 or $2,438,089,
at December 31, 2023 and June 30, 2023, respectively. The interest rate for the loan was 19.0% and 18.0% at December 31, 2023 and June
30, 2023, respectively. |
| (7) |
|
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, 2023, NetSol PK used Rs. 71,853,193 or $256,921 of which $99,527 was shown as long term and $157,394 as current.
As of June 30, 2023, NetSol PK used Rs. 92,194,774 or $321,113 of which $172,849 was shown as long term and $148,264 as current. The
interest rate for the loan was 9.0% to 16.0% at December 31, 2023, and June 30, 2023. |
| (8) |
|
In March 2019,
the Company’s subsidiary, VLS, entered into a loan agreement. The loan amount was £69,549, or $88,037, for a period of 5
years with monthly payments of £1,349, or $1,708. As of December 31, 2023, the subsidiary has used this facility up to $3,392,
which was shown as current. As of June 30, 2023, the subsidiary has used this facility up to $13,356, which was shown as current. The
interest rate was 6.14% at December 31, 2023 and June 30, 2023. |
| (9) |
|
The Company’s
subsidiary, VLS, finances Directors’ and Officers’ (“D&O”) liability insurance, and the $39,587 and $nil
was recorded in current maturities, at December 31, 2023 and June 30, 2023, respectively. The interest rate on this financing ranged
from 9.7% to 12.7% as of December 31, 2023 and June 30, 2023. |
| (10) |
|
The Company leases
various fixed assets under finance lease arrangements expiring in various years through 2024. 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, 2023 and 2022. |
|