Quarterly report [Sections 13 or 15(d)]

DEBTS

v3.25.4
DEBTS
 6 Months Ended
Dec. 31, 2025
Debt Disclosure [Abstract]  
DEBTS

NOTE 12 – DEBTS

 

Notes payable and finance leases consisted of the following:

 

        As of December 31, 2025  
              Current     Long-Term  
Name       Total     Maturities     Maturities  
                       
D&O Insurance   (1)   $ 86,082     $ 86,082     $ -  
Line of Credit   (2)     505,000       505,000       -  
Bank Overdraft Facility   (3)     -       -       -  
Loan Payable Bank - Export Refinance   (4)     1,783,358       1,783,358       -  
Loan Payable Bank - Running Finance   (5)     -       -       -  
Loan Payable Bank - Export Refinance II   (6)     1,355,352       1,355,352       -  
Loan Payable Bank - Export Refinance III   (7)     4,636,730       4,636,730       -  
Loan Payable Bank - Export Refinance IV   (8)     -       -       -  
Sale and Leaseback Financing   (9)     386,832       129,456       257,376  
Short Term Financing   (10)     -       -       -  
          8,753,354       8,495,978       257,376  
Subsidiary Finance Leases   (11)     93,515       13,863       79,652  
        $ 8,846,869     $ 8,509,841     $ 337,028  

 

      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       -  
Loan Payable Bank - Export Refinance IV   (8)     -       -       -  
Sale and Leaseback Financing   (9)     76,618       29,660       46,958  
Short Term Financing   (10)     -       -       -  
          8,273,164       8,226,206       46,958  
Subsidiary Finance Leases   (11)     101,505       13,855       87,650  
        $ 8,374,669     $ 8,240,061     $ 134,608  

 

(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 7.8% to 11.6% as of December 31, 2025 and 8.4% to 11.6% as of June 30, 2025.

 

(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 7.0% as of December 31, 2025 and 7.75% as of June 30, 2025. The total outstanding balance as of December 31, 2025 and June 30, 2025 was $505,000 and $405,000, respectively.

 

 

NETSOL TECHNOLOGIES, INC.

Notes to Condensed Consolidated Financial Statements

December 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 $405,405. The annual interest rate was 8.0% as of December 31, 2025 and 8.5% as of June 30, 2025. The total outstanding balance as of December 31, 2025 and June 30, 2025 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, 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 $2,140,029 at December 31, 2025 and Rs. 600,000,000 or $2,111,561 at June 30, 2025. NetSol PK used Rs. 500,000,000 or $1,783,358 at December 31, 2025 and Rs. 500,000,000 or $1,759,634 at June 30, 2025. The interest rate for the loan was 7.5% at December 31, 2025 and 8.0% at June 30, 2025.

 

(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 $14,449 and Rs. 4,050,937 or $14,256, at December 31, 2025 and June 30, 2025, respectively. The balance outstanding at December 31, 2025 and June 30, 2025 was Rs. Nil. The interest rate for the loan was 12.6% at December 31, 2025 and 13.2% at June 30, 2025.

 

(6) The Company’s subsidiary, NetSol PK, has an export refinance facility with Bank Al-Habib Limited, secured by NetSol PK’s assets. This is a revolving loan that matures every six months. The total facility amount is Rs. 400,000,000 or $1,426,687 at December 31, 2025. NetSol PK has not used this facility at December 31, 2025. The interest rate for the loan was 7.5% at December 31, 2025.

 

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, 2025, NetSol PK was in compliance with this covenant.

 

(7) 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 $1,355,352 and Rs. 380,000,000 or $1,337,322 at December 31, 2025 and June 30, 2025, respectively. The interest rate for the loan was 7.5% at December 31, 2025 and 8.0% at June 30, 2025.

 

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, 2025, NetSol PK was in compliance with these covenants.

 

(8) 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 $4,636,730 and Rs. 1,300,000,000 or $4,575,048, at December 31, 2025 and June 30, 2025, respectively. NetSol PK used Rs. 1,300,000,000 or $4,636,730 and Rs. 1,300,000,000 or $4,575,048, at December 31, 2025 and June 30, 2025, respectively. The interest rate for the loan was 7.5% at December 31, 2025 and 8.0% at June 30, 2025.

 

(9) 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, 2025, NetSol PK used Rs. 108,456,123 or $386,832 of which $257,376 was shown as long term and $129,456 as current. 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. The interest rate for the loan was from 12.3% to 22.7% at December 31, 2025 and June 30, 2025.

 

(10) The Company leases various fixed assets under finance lease arrangements expiring in various years through 2028. 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 and six months ended December 31, 2025 and 2024.

 

 

NETSOL TECHNOLOGIES, INC.

Notes to Condensed Consolidated Financial Statements

December 31, 2025

(Unaudited)

 

Following are the aggregate minimum future lease payments under finance leases as of December 31, 2025:

 

    Amount  
Minimum Lease Payments        
Within year 1   $ 26,970  
Within year 2     78,334  
Within year 3     4,416  
Total Minimum Lease Payments     109,720  
Interest Expense relating to future periods     (16,205 )
Present Value of minimum lease payments     93,515  
Less: Current portion     (13,863 )
Non-Current portion   $ 79,652  

 

The following are the aggregate future long-term debt payments as of December 31, 2025, which consist of “Sale and Leaseback Financing (9)”.

 

    Amount  
Loan Payments        
Within year 1   $ 129,456  
Within year 2     144,265  
Within year 3     113,111  
Total Loan Payments     386,832  
Less: Current portion     (129,456 )
Non-Current portion   $ 257,376