| 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 March 31, 2025 |
|
| |
|
|
|
|
|
|
Current |
|
|
Long-Term |
|
| Name |
|
|
|
Total |
|
|
Maturities |
|
|
Maturities |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| D&O Insurance |
|
(1) |
|
$ |
226,199 |
|
|
$ |
226,199 |
|
|
$ |
- |
|
| Line of Credit |
|
(2) |
|
|
405,000 |
|
|
|
405,000 |
|
|
|
- |
|
| Bank Overdraft Facility |
|
(3) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance |
|
(4) |
|
|
1,788,205 |
|
|
|
1,788,205 |
|
|
|
- |
|
| Loan Payable Bank - Running Finance |
|
(5) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance II |
|
(6) |
|
|
1,359,036 |
|
|
|
1,359,036 |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance III |
|
(7) |
|
|
4,649,333 |
|
|
|
4,649,333 |
|
|
|
- |
|
| Sale and Leaseback Financing |
|
(8) |
|
|
18,980 |
|
|
|
18,980 |
|
|
|
- |
|
| Short Term Financing |
|
(9) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
8,446,753 |
|
|
|
8,446,753 |
|
|
|
- |
|
| Subsidiary Finance
Leases |
|
(10) |
|
|
100,038 |
|
|
|
13,238 |
|
|
|
86,800 |
|
| |
|
|
|
$ |
8,546,791 |
|
|
$ |
8,459,991 |
|
|
$ |
86,800 |
|
| |
|
|
|
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 March 31, 2025 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 March 31, 2025 and 8.75% as of June 30, 2024. The total outstanding balance as of March
31, 2025 and June 30, 2024 was $405,000 and $nil, respectively. |
NETSOL
TECHNOLOGIES, INC.
Notes
to Condensed Consolidated Financial Statements
March
31, 2025
(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
$389,610. The annual interest rate was 9.5% as of March 31, 2025 and June 30, 2024. The total outstanding balance as of March 31, 2025
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 March 31, 2025, 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. 600,000,000 or $2,145,846 at March 31, 2025 and Rs. 500,000,000
or $1,796,558 at June 30, 2024. NetSol PK used Rs. 500,000,000 or $1,788,205 at March 31, 2025 and Rs. 500,000,000 or $1,796,558 at June
30, 2024. The interest rate for the loan was 10.0% and 17.5% at March 31, 2025 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. 4,050,937 or $14,488, at March 31, 2025. The balance outstanding at March 31, 2025 and June 30, 2024 was Rs. Nil. The interest
rate for the loan was 14.1% at March 31, 2025 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 March 31, 2025, 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 $1,359,036 and Rs. 380,000,000 or $1,365,384 at
March 31, 2025 and June 30, 2024, respectively. The interest rate for the loan was 10.0% and 17.5% at March 31, 2025 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 March 31, 2025, 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. 1,300,000,000 or $4,649,333 and Rs. 900,000,000 or $3,233,804,
at March 31, 2025 and June 30, 2024, respectively. NetSol PK used Rs. 1,300,000,000 or $4,649,333 and Rs. 700,000,000 or $2,515,181,
at March 31, 2025 and June 30, 2024, respectively. The interest rate for the loan was 10.0% and 17.5% at March 31, 2025 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 March 31, 2025, NetSol PK used Rs. 5,307,080 or $18,980 which was shown 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 March 31, 2025 and June 30, 2024. |
| (9) |
|
The Company’s
subsidiary, NetSol Beijing, had 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 was CNY 3,000,000 or $413,223. NetSol Beijing has paid off this facility during
the period ended March 31, 2025. NetSol Beijing used CNY 3,000,000 or $412,655, at June 30, 2024. The interest rate of the loan was 3.8%
at March 31, 2025 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
March 31, 2025 and 2024. |
|