| 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, 2026 |
|
| |
|
|
|
|
|
|
Current |
|
|
Long-Term |
|
| Name |
|
|
|
Total |
|
|
Maturities |
|
|
Maturities |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| D&O Insurance |
|
(1) |
|
$ |
211,439 |
|
|
$ |
211,439 |
|
|
$ |
- |
|
| Line of Credit |
|
(2) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Bank Overdraft Facility |
|
(3) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance |
|
(4) |
|
|
1,790,317 |
|
|
|
1,790,317 |
|
|
|
- |
|
| Loan Payable Bank - Running Finance |
|
(5) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance II |
|
(6) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance III |
|
(7) |
|
|
1,360,642 |
|
|
|
1,360,642 |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance IV |
|
(8) |
|
|
4,654,827 |
|
|
|
4,654,827 |
|
|
|
- |
|
| Sale and Leaseback Financing |
|
(9) |
|
|
386,238 |
|
|
|
141,969 |
|
|
|
244,269 |
|
| |
|
|
|
|
8,403,463 |
|
|
|
8,159,194 |
|
|
|
244,269 |
|
| Subsidiary Finance Leases |
|
(10) |
|
|
87,920 |
|
|
|
82,390 |
|
|
|
5,530 |
|
| |
|
|
|
$ |
8,491,383 |
|
|
$ |
8,241,584 |
|
|
$ |
249,799 |
|
| |
|
|
|
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) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance III |
|
(7) |
|
|
1,337,322 |
|
|
|
1,337,322 |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance IV |
|
(8) |
|
|
4,575,048 |
|
|
|
4,575,048 |
|
|
|
- |
|
| Sale and Leaseback Financing |
|
(9) |
|
|
76,618 |
|
|
|
29,660 |
|
|
|
46,958 |
|
| |
|
|
|
|
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 |
|
| (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 ranged from 7.4% to 7.8% as
of March 31, 2026, 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 8.0% as of March 31, 2026, and
7.75% as of June 30, 2025. The Company paid down the full amount during the nine months ended March 31, 2026. The total outstanding balance
as of June 30, 2025, was $405,000. |
NETSOL
TECHNOLOGIES, INC.
Notes
to Condensed Consolidated Financial Statements
March
31, 2026
(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 $394,737. The annual interest rate was 8.0% as of March 31,
2026 and 8.5% as of June 30, 2025. The total outstanding balance as of March 31, 2026 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 March 31, 2026, 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 $2,148,382 at March 31, 2026 and Rs. 600,000,000 or $2,111,561 at June 30, 2025. NetSol PK used Rs. 500,000,000 or $1,790,317
at March 31, 2026 and Rs. 500,000,000 or $1,759,634 at June 30, 2025. The interest rate for the loan was 4.5% at March 31, 2026 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 $14,505 and Rs. 4,050,937 or $14,256, at
March 31, 2026 and June 30, 2025, respectively. The balance outstanding at March 31, 2026 and June 30, 2025 was Rs. Nil. The interest
rate for the loan was 13.5% at March 31, 2026 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 $1,432,254 at March 31, 2026. NetSol PK has not used this facility at March 31, 2026. The interest rate for the loan was
4.5% at March 31, 2026. |
|
|
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, 2026, 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 $1,360,642 and Rs. 380,000,000 or $1,337,322 at March 31, 2026 and June 30, 2025, respectively. The interest rate for
the loan was 4.5% at March 31, 2026 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 March 31, 2026, 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 six months. The total facility amount
is Rs. 1,300,000,000 or $4,654,827 and Rs. 1,300,000,000 or $4,575,048, at March 31, 2026 and June 30, 2025, respectively. NetSol PK
used Rs. 1,300,000,000 or $4,654,827 and Rs. 1,300,000,000 or $4,575,048, at March 31, 2026 and June 30, 2025, respectively. The interest
rate for the loan was 4.5% at March 31, 2026 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 March 31, 2026, NetSol PK used Rs. 107,868,491 or $386,238
of which $244,269 was shown as long term and $141,969 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 11.4% to 12.3% at March 31, 2026. The
interest rate for the loan was from 12.3% to 22.7% at June 30, 2025. |
| (10) |
|
The Company leases various fixed assets under finance lease arrangements expiring in various
years through 2029. 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 nine months ended March 31, 2026 and 2025. |
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