| SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES |
Notes
payable and capital leases consisted of the following:
SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES
| |
|
|
|
As
of June 30, 2025 |
|
| |
|
|
|
|
|
|
Current |
|
|
Long-Term |
|
| Name |
|
|
|
Total |
|
|
Maturities |
|
|
Maturities |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| D&O
Insurance |
|
(1) |
|
$ |
119,542 |
|
|
$ |
119,542 |
|
|
$ |
- |
|
| Line
of Credit |
|
(2) |
|
|
405,000 |
|
|
|
405,000 |
|
|
|
- |
|
| Bank
Overdraft Facility |
|
(3) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan
Payable Bank - Export Refinance |
|
(4) |
|
|
1,759,634 |
|
|
|
1,759,634 |
|
|
|
- |
|
| Loan
Payable Bank - Running Finance |
|
(5) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan
Payable Bank - Export Refinance II |
|
(6) |
|
|
1,337,322 |
|
|
|
1,337,322 |
|
|
|
- |
|
| Loan
Payable Bank - Export Refinance III |
|
(7) |
|
|
4,575,048 |
|
|
|
4,575,048 |
|
|
|
- |
|
| Sale
and Leaseback Financing |
|
(8) |
|
|
76,618 |
|
|
|
29,660 |
|
|
|
46,958 |
|
| Short
Term Financing |
|
(9) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
8,273,164 |
|
|
|
8,226,206 |
|
|
|
46,958 |
|
| Subsidiary
Finance Leases |
|
(10) |
|
|
101,505 |
|
|
|
13,855 |
|
|
|
87,650 |
|
| |
|
|
|
$ |
8,374,669 |
|
|
$ |
8,240,061 |
|
|
$ |
134,608 |
|
| |
|
|
|
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 rates on these financings range from 8.4% to 11.6% and 8.6% to 10.9% as of June 30, 2025 and 2024, respectively. |
NETSOL
TECHNOLOGIES, INC.
Notes
to Consolidated Financial Statements
June
30, 2025 and 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
7.75% and 8.75%
as of June 30, 2025 and 2024, respectively. The total outstanding balance as of June 30, 2025 and 2024, was $405,000
and $nil,
respectively. |
| (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
$410,959. The annual interest rate was 8.5% and 9.5% as of June 30, 2025 and 2024, respectively. The total outstanding balance as of
June 30, 2025 and 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 June 30, 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 six months. The total facility amount is Rs. 600,000,000 or $2,111,561 and Rs. 500,000,000 or $1,796,558 at June
30, 2025 and 2024, respectively. NetSol PK used Rs. 500,000,000 or $1,759,634 at June 30, 2025 and Rs. 500,000,000 or $1,796,558 at June
30, 2024. The interest rate for the loan was 8.0% and 17.5% at June 30, 2025 and 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 $14,256 and Rs. 53,600,000 or $192,591, at June 30, 2025 and 2024, respectively. The balance outstanding at
June 30, 2025 and 2024 was Rs. Nil. The interest rate for the loan was 13.2% and 22.2% at June 30, 2025 and 2024, respectively. |
|
|
These facilities require
NetSol PK to maintain a long-term debt equity ratio of 60:40 and the current ratio of 1:1. As of June 30, 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 six months. The total facility amount is Rs. 380,000,000 or $1,337,322 and Rs. 380,000,000 or $1,365,384, at
June 30, 2025 and 2024, respectively. NetSol PK used Rs. 380,000,000 or $1,337,322 and Rs. 380,000,000 or $1,365,384, at June 30, 2025
and 2024, respectively. The interest rate for the loan was 8.0% and 17.5% at June 30, 2025 and 2024, respectively. |
|
|
During the loan tenure,
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 June 30, 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 $4,575,048 and Rs. 900,000,000 or $3,233,804,
at June 30, 2025 and 2024, respectively. NetSol PK used Rs. 1,300,000,000 or $4,575,048 and Rs. 700,000,000 or $2,515,181, at June 30,
2025 and 2024, respectively. The interest rate for the loan was 8.0% and 17.5% at June 30, 2025 and 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 June 30, 2025, NetSol PK used Rs. 21,771,042 or $76,618 of which $46,958 was shown as long-term and $29,660 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 ranged between 12.3% and 24.2% at June 30, 2025. The interest rate for the loan ranged between 22.7% and 24.2% at June
30, 2024. |
| (9) |
|
The Company’s
subsidiary, NetSol Beijing, has a short-term loan facility with Bank of China, secured by the personal guarantee of the General Manager
of NetSol Beijing for a period of one year. The facility amount was CNY 3,000,000 or $418,410. NetSol Beijing paid off this facility
during the period ended June 30, 2025. At June 30, 2024, NetSol Beijing used CNY 3,000,000 or $412,655. The interest rate of the loan
was 3.8% at June 30, 2025 and 2024, respectively. |
| (10) |
|
The Company leases
various fixed assets under capital lease arrangements expiring in various years through 2028. The assets and liabilities under capital
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 capital leases is included in depreciation expense for the years ended June 30,
2025 and 2024. |
|