Quarterly report pursuant to Section 13 or 15(d)

DEBTS

v3.24.3
DEBTS
 3 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
DEBTS

NOTE 12 – DEBTS

 

Notes payable and finance leases consisted of the following:

 

        As of September 30, 2024  
              Current     Long-Term  
Name       Total     Maturities     Maturities  
                       
D&O Insurance   (1)   $ 23,706     $ 23,706     $ -  
Line of Credit   (2)     250,000       250,000       -  
Bank Overdraft Facility   (3)     -       -       -  
Loan Payable Bank - Export Refinance   (4)     1,800,504       1,800,504       -  
Loan Payable Bank - Running Finance   (5)     -       -       -  
Loan Payable Bank - Export Refinance II   (6)     1,368,383       1,368,383       -  
Loan Payable Bank - Export Refinance III   (7)     2,520,706       2,520,706       -  
Sale and Leaseback Financing   (8)     44,746       39,789       4,957  
Short Term Financing   (9)     427,960       427,960       -  
          6,436,005       6,431,048       4,957  
Subsidiary Finance Leases   (10)     100,570       12,889       87,681  
        $ 6,536,575     $ 6,443,937     $ 92,638  

 

        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 September 30, 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 September 30, 2024 and 8.75% as of June 30, 2024. The total outstanding balance as of September 30, 2024 and June 30, 2024 was $250,000 and $nil, respectively.

 

 

NETSOL TECHNOLOGIES, INC.

Notes to Condensed Consolidated Financial Statements

September 30, 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 $400,000. The annual interest rate was 9.5% as of September 30, 2024 and June 30, 2024. The total outstanding balance as of September 30, 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 September 30, 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 $1,800,504 at September 30, 2024 and Rs. 500,000,000 or $1,796,558 at June 30, 2024. The interest rate for the loan was 14.5% and 17.5% at September 30, 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. 53,000,000 or $193,014, at September 30, 2024. The balance outstanding at September 30, 2024 and June 30, 2024 was Rs. Nil. The interest rate for the loan was 18.1% at September 30, 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 September 30, 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 $1,368,383 and Rs. 380,000,000 or $1,365,384 at September 30, 2024 and June 30, 2024, respectively. The interest rate for the loan was 14.5% and 17.5% at September 30, 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 September 30, 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. 900,000,000 or $3,240,907 and Rs. 900,000,000 or $3,233,804, at September 30, 2024 and June 30, 2024, respectively. NetSol PK used Rs. 700,000,000 or $2,520,706 and Rs. 700,000,000 or $2,515,181, at September 30, 2024 and June 30, 2024, respectively. The interest rate for the loan was 14.5% and 17.5% at September 30, 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 September 30, 2024, NetSol PK used Rs. 12,425,952 or $44,746 of which $4,957 was shown as long term and $39,789 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 September 30, 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 $427,960. NetSol Beijing used CNY 3,000,000 or $427,960 at September 30, 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 September 30, 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 September 30, 2024 and 2023.

 

 

NETSOL TECHNOLOGIES, INC.

Notes to Condensed Consolidated Financial Statements

September 30, 2024

(Unaudited)

 

Following are the aggregate minimum future lease payments under finance leases as of September 30, 2024:

 

    Amount  
Minimum Lease Payments        
Within year 1   $ 24,938  
Within year 2     24,022  
Within year 3     80,706  
Total Minimum Lease Payments     129,666  
Interest Expense relating to future periods     (29,096 )
Present Value of minimum lease payments     100,570  
Less: Current portion     (12,889 )
Non-Current portion   $ 87,681  

 

Following are the aggregate future long term debt payments as of September 30, 2024 which consists of “Sale and Leaseback Financing (7)” and “Term Finance Facility (8)”.

 

    Amount  
Loan Payments        
Within year 1   $ 39,789  
Within year 2     4,957  
Total Loan Payments     44,746  
Less: Current portion     (39,789 )
Non-Current portion   $ 4,957