| 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 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. |
|