| 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 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 |
|
|
|
|
|
|
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. |
|