Quarterly report pursuant to Section 13 or 15(d)

Restatement of Previously Issued Financial Statements (Tables)

v3.8.0.1
Restatement of Previously Issued Financial Statements (Tables)
 3 Months Ended
Sep. 30, 2017
Accounting Changes and Error Corrections [Abstract]  
Schedule of Restated Condensed Consolidated Financial Statements

The following tables present the restated financial statements for the quarter ended September 30, 2016.

 

   

Balance Sheet

As of September 30, 2016

  
    As Originally Presented     Amount of Restatement     As Restated  
ASSETS                        
Current assets:                        
Cash and cash equivalents   $ 11,156,437             $ 11,156,437  
Accounts receivable, net of allowance of $500,853 and $492,498     7,142,255               7,142,255  
Accounts receivable, net - related party     5,384,573               5,384,573  
Revenues in excess of billings     13,358,858       2,074,911       15,433,769  
Revenues in excess of billings - related party     682,049               682,049  
Other current assets     3,192,425               3,192,425  
Total current assets     40,916,597       2,074,911       42,991,508  
Restricted cash     90,000               90,000  
Property and equipment, net     22,612,752               22,612,752  
Other assets     1,604,731               1,604,731  
Intangible assets, net     19,326,259               19,326,259  
Goodwill     9,516,568               9,516,568  
Total assets   $ 94,066,907     $ 2,074,911     $ 96,141,818  
                         
LIABILITIES AND STOCKHOLDERS’ EQUITY                        
Current liabilities:                        
Accounts payable and accrued expenses   $ 6,389,128             $ 6,389,128  
Current portion of loans and obligations under capitalized leases     4,408,173               4,408,173  
Unearned revenues     4,419,692               4,419,692  
Common stock to be issued     88,324               88,324  
Total current liabilities     15,305,317       -       15,305,317  
Long term loans and obligations under capitalized leases; less current maturities     539,859               539,859  
Total liabilities     15,845,176       -       15,845,176  
Commitments and contingencies                        
Stockholders’ equity:                        
Preferred stock, $.01 par value; 500,000 shares authorized;     -       -       -  
Common stock, $.01 par value; 14,500,000 shares authorized; 10,882,281 shares issued and 10,855,002 outstanding as of September 30, 2016 and 10,713,372 shares issued and 10,686,093 outstanding as of June 30, 2016     108,823               108,823  
Additional paid-in-capital     122,367,231               122,367,231  
Treasury stock (27,279 shares)     (415,425 )             (415,425 )
Accumulated deficit     (39,089,079 )     1,379,608       (37,709,471 )
Stock subscription receivable     (602,811 )             (602,811 )
Other comprehensive loss     (17,960,133 )             (17,960,133 )
Total NetSol stockholders’ equity     64,408,606       1,379,608       65,788,214  
Non-controlling interest     13,813,125       695,303       14,508,428  
Total stockholders’ equity     78,221,731       2,074,911       80,296,642  
Total liabilities and stockholders’ equity   $ 94,066,907     $ 2,074,911     $ 96,141,818  

 

    For the Three Months  
    Ended September 30, 2016  
    As Originally     Amount of        
    Presented     Restatement     As Restated  
Net Revenues:                        
License fees   $ 3,499,860     $ 1,953,935     $ 5,453,795  
Maintenance fees     3,402,821       120,976       3,523,797  
Services     5,806,717               5,806,717  
License fees - related party     246,957               246,957  
Maintenance fees - related party     130,631               130,631  
Services - related party     1,914,572               1,914,572  
Total net revenues     15,001,558       2,074,911       17,076,469  
                         
Cost of revenues:                        
Salaries and consultants     5,893,349               5,893,349  
Travel     711,895               711,895  
Depreciation and amortization     1,330,872               1,330,872  
Other     972,338               972,338  
Total cost of revenues     8,908,454       -       8,908,454  
                         
Gross profit     6,093,104       2,074,911       8,168,015  
                         
Operating expenses:                        
Selling and marketing     2,411,136               2,411,136  
Depreciation and amortization     269,097               269,097  
General and administrative     4,552,098               4,552,098  
Research and development cost     92,932               92,932  
Total operating expenses     7,325,263       -       7,325,263  
                         
Income (loss) from operations     (1,232,159 )     2,074,911       842,752  
                         
Other income and (expenses)                        
Loss on sale of assets     (2,403 )             (2,403 )
Interest expense     (54,475 )             (54,475 )
Interest income     30,440               30,440  
Loss on foreign currency exchange transactions     (414,896 )             (414,896 )
Other income     21,560               21,560  
Total other income (expenses)     (419,774 )     -       (419,774 )
                         
Net income (loss) before  income taxes     (1,651,933 )     2,074,911       422,978  
Income tax provision     (39,875 )             (39,875 )
Net income (loss)     (1,691,808 )     2,074,911       383,103  
Non-controlling interest     (73,911 )     (695,303 )     (769,214 )
Net income (loss) attributable to NetSol   $ (1,765,719 )   $ 1,379,608     $ (386,111 )
                         
Net Income (loss) per share:                        
Net income (loss) per common share                        
Basic   $ (0.17 )   $ 0.14     $ (0.04 )
Diluted   $ (0.17 )   $ 0.14     $ (0.04 )
                         
Weighted average number of shares outstanding                        
Basic     10,697,425       10,697,425       10,697,425  
Diluted     10,697,425       10,697,425       10,697,425  

 

    For the Three Months  
    Ended September 30, 2016  
    As Originally     Amount of        
    Presented     Restatement     As Restated  
Net income (loss)   $ (1,765,719 )   $ 1,379,608     $ (386,111 )
Other comprehensive income (loss):                        
                         
Translation adjustment     1,094,074       -       1,094,074  
Comprehensive income (loss)     (671,645 )     1,379,608       707,963  
Comprehensive income (loss) attributable to non-controlling interest     323,713       -       323,713  
Comprehensive income (loss) attributable to NetSol   $ (995,358 )   $ 1,379,608     $ 384,250  

 

    For the Three Months  
    Ended September 30, 2016  
                   
    As Originally     Amount of        
    Presented     Restatement     As Restated  
Cash flows from operating activities:                        
Net income (loss)   $ (1,691,808 )   $ 2,074,911     $ 383,103  
Adjustments to reconcile net income (loss) to net cash used in operating activities:                        
Depreciation and amortization     1,599,969               1,599,969  
Loss on sale of assets     2,403               2,403  
Stock issued for services     865,456               865,456  
Fair market value of warrants and stock options granted     21,804               21,804  
Changes in operating assets and liabilities:                        
Accounts receivable     2,336,894               2,336,894  
Accounts receivable - related party     121,800               121,800  
Revenues in excess of billing     (2,746,917 )     (2,074,911 )     (4,821,828 )
Revenues in excess of billing - related party     93,208               93,208  
Other current assets     306,339               306,339  
Accounts payable and accrued expenses     (780,569 )             (780,569 )
Unearned revenue     (346,108 )             (346,108 )
Net cash used in operating activities     (217,529 )     -       (217,529 )
                         
Cash flows from investing activities:                        
Purchases of property and equipment     (554,873 )             (554,873 )
Sales of property and equipment     151,818               151,818  
Investment     (555,555 )             (555,555 )
Net cash used in investing activities     (958,610 )     -       (958,610 )
                         
Cash flows from financing activities:                        
Proceeds from the exercise of stock options and warrants     276,861               276,861  
Proceeds from exercise of subsidiary options     14,013               14,013  
Payments on capital lease obligations and loans - net     (49,117 )             (49,117 )
Net cash provided by financing activities     241,757       -       241,757  
Effect of exchange rate changes     533,292               533,292  
Net decrease in cash and cash equivalents     (401,090 )     -       (401,090 )
Cash and cash equivalents, beginning of the period     11,557,527               11,557,527  
Cash and cash equivalents, end of period   $ 11,156,437     $ -     $ 11,156,437