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)
 6 Months Ended
Dec. 31, 2017
Accounting Changes and Error Corrections [Abstract]  
Schedule of Restated Condensed Consolidated Financial Statements

The following tables present the restated financial statements for the three and six months ended December 31, 2016.

  

    Balance Sheet  
    As of December 31, 2016  
      As Originally       Amount of          
      Presented       Restatement       As Restated  
ASSETS                        
Current assets:                        
Cash and cash equivalents   $ 9,505,383             $ 9,505,383  
Accounts receivable, net of allowance of $495,760 and $492,498     5,840,490               5,840,490  
Accounts receivable, net - related party     4,303,380               4,303,380  
Revenues in excess of billings     17,646,488       373,406       18,019,894  
Revenues in excess of billings - related party     469,030               469,030  
Other current assets     2,904,650               2,904,650  
Total current assets     40,669,421       373,406       41,042,827  
Restricted cash     90,000               90,000  
Property and equipment, net     21,873,277               21,873,277  
Other assets     2,054,938               2,054,938  
Intangible assets, net     18,423,439               18,423,439  
Goodwill     9,516,568               9,516,568  
Total assets   $ 92,627,643     $ 373,406     $ 93,001,049  
                         
LIABILITIES AND STOCKHOLDERS’ EQUITY                        
Current liabilities:                        
Accounts payable and accrued expenses   $ 7,373,097             $ 7,373,097  
Current portion of loans and obligations under capitalized leases     4,368,930               4,368,930  
Unearned revenues     2,806,804       77,821       2,884,625  
Common stock to be issued     88,324               88,324  
Total current liabilities     14,637,155       77,821       14,714,976  
Long term loans and obligations under capitalized leases; less current maturities     501,554               501,554  
Total liabilities     15,138,709       77,821       15,216,530  
Commitments and contingencies                        
Stockholders’ equity:                        
Preferred stock, $.01 par value; 500,000 shares authorized;     -       -       -  
Common stock, $.01 par value; 14,500,000 shares authorized;                        
10,993,054 shares issued and 10,958,275 outstanding as of December 31, 2016 and 10,713,372 shares issued and 10,686,093 outstanding as of June 30, 2016     109,931               109,931  
Additional paid-in-capital     123,019,215               123,019,215  
Treasury stock (34,779 shares and 27,279 shares)     (454,310 )             (454,310 )
Accumulated deficit     (40,074,755 )     196,890       (39,877,865 )
Stock subscription receivable     (450,220 )             (450,220 )
Other comprehensive loss     (18,628,395 )             (18,628,395 )
Total NetSol stockholders’ equity     63,521,466       196,890       63,718,356  
Non-controlling interest     13,967,468       98,695       14,066,163  
Total stockholders’ equity     77,488,934       295,585       77,784,519  
Total liabilities and stockholders’ equity   $ 92,627,643     $ 373,406     $ 93,001,049  

  

    For the Three Months     For the Six Months  
    Ended December 31, 2016     Ended December 31, 2016  
    As Originally     Amount of           As Originally     Amount of        
    Presented     Restatement     As Restated     Presented     Restatement     As Restated  
Net Revenues:                                                
License fees   $ 5,350,086     $ (1,580,529 )   $ 3,769,557     $ 8,849,946     $ 373,406     $ 9,223,352  
Maintenance fees     3,787,696       (198,797 )     3,588,899       7,190,517       (77,821 )     7,112,696  
Services     6,984,084               6,984,084       12,790,801               12,790,801  
License fees - related party     -               -       246,957               246,957  
Maintenance fees - related party     51,345               51,345       181,976               181,976  
Services - related party     1,464,901               1,464,901       3,379,473               3,379,473  
Total net revenues     17,638,112       (1,779,326 )     15,858,786       32,639,670       295,585       32,935,255  
                                                 
Cost of revenues:                                                
Salaries and consultants     5,979,804               5,979,804       11,873,153               11,873,153  
Travel     836,240               836,240       1,548,135               1,548,135  
Depreciation and amortization     1,318,764               1,318,764       2,649,636               2,649,636  
Other     1,065,727               1,065,727       2,038,065               2,038,065  
Total cost of revenues     9,200,535       -       9,200,535       18,108,989       -       18,108,989  
                                                 
Gross profit     8,437,577       (1,779,326 )     6,658,251       14,530,681       295,585       14,826,266  
                                                 
Operating expenses:                                                
Selling and marketing     2,713,478               2,713,478       5,057,516               5,057,516  
Depreciation and amortization     271,485               271,485       540,582               540,582  
General and administrative     3,933,413               3,933,413       8,552,609               8,552,609  
Research and development cost     91,607               91,607       184,539               184,539  
Total operating expenses     7,009,983       -       7,009,983       14,335,246       -       14,335,246  
                                                 
Income (loss) from operations     1,427,594       (1,779,326 )     (351,732 )     195,435       295,585       491,020  
                                                 
Other income and (expenses)                                                
Loss on sale of assets     (32,339 )             (32,339 )     (34,742 )             (34,742 )
Interest expense     (62,127 )             (62,127 )     (116,602 )             (116,602 )
Interest income     23,416               23,416       53,856               53,856  
Loss on foreign currency exchange transactions     (621,887 )             (621,887 )     (1,036,783 )             (1,036,783 )
Other income     6,823               6,823       28,383               28,383  
Total other income (expenses)     (686,114 )     -       (686,114 )     (1,105,888 )     -       (1,105,888 )
                                                 
Net income (loss) before income taxes     741,480       (1,779,326 )     (1,037,846 )     (910,453 )     295,585       (614,868 )
Income tax provision     (338,884 )             (338,884 )     (378,759 )             (378,759 )
Net income (loss) from continuing operations     402,596       (1,779,326 )     (1,376,730 )     (1,289,212 )     295,585       (993,627 )
Non-controlling interest     (1,388,272 )     596,608       (791,664 )     (1,462,183 )     (98,695 )     (1,560,878 )
Net income (loss) attributable to NetSol   $ (985,676 )   $ (1,182,718 )   $ (2,168,394 )   $ (2,751,395 )   $ 196,890     $ (2,554,505 )
                                                 
Net income (loss) per share:                                                
                                                 
Net income (loss) per common share                                                
Basic   $ (0.09 )   $ (0.11 )   $ (0.20 )   $ (0.26 )   $ 0.03     $ (0.24 )
Diluted   $ (0.09 )   $ (0.11 )   $ (0.20 )   $ (0.26 )   $ 0.03     $ (0.24 )
                                                 
Weighted average number of shares outstanding                                                
Basic     10,877,446       10,877,446       10,877,446       10,783,685       10,783,685       10,783,685  
Diluted     10,877,446       10,877,446       10,877,446       10,783,685       10,783,685       10,783,685  

  

    For the Three Months  
    Ended December 31, 2016  
    As Originally     Amount of        
    Presented     Restatement     As Restated  
Net income (loss)   $ (985,676 )   $ (1,182,718 )   $ (2,168,394 )
Other comprehensive income (loss):                        
Translation adjustment     (944,837 )     -       (944,837 )
Comprehensive income (loss)     (1,930,513 )     (1,182,718 )     (3,113,231 )
Comprehensive income (loss) attributable to non-controlling interest     (276,575 )     -       (276,575 )
Comprehensive income (loss) attributable to NetSol   $ (1,653,938 )   $ (1,182,718 )   $ (2,836,656 )

 

    For the Six Months  
    Ended December 31, 2016  
    As Originally     Amount of        
    Presented     Restatement     As Restated  
Net income (loss)   $ (2,751,395 )   $ 262,469     $ (2,488,926 )
Other comprehensive income (loss):                        
Translation adjustment     149,237       -       149,237  
Comprehensive income (loss)     (2,602,158 )     262,469       (2,339,689 )
Comprehensive income (loss) attributable to non-controlling interest     47,138       -       47,138  
Comprehensive income (loss) attributable to NetSol   $ (2,649,296 )   $ 262,469     $ (2,386,827 )

  

    For the Six Months  
    Ended December 31, 2016  
    As Originally     Amount of        
    Presented     Restatement     As Restated  
Cash flows from operating activities:                        
Net income (loss)   $ (1,289,212 )   $ 295,585     $ (993,627 )
Adjustments to reconcile net income (loss) to net cash used in operating activities:                        
Depreciation and amortization     3,190,218               3,190,218  
Provision for bad debts     1,026               1,026  
Loss on sale of assets     34,742               34,742  
Stock issued for services     1,525,775               1,525,775  
Fair market value of warrants and stock options granted     21,804               21,804  
Changes in operating assets and liabilities:                        
Accounts receivable     3,678,110               3,678,110  
Accounts receivable - related party     829,285               829,285  
Revenues in excess of billing     (7,219,089 )     (373,406 )     (7,592,495 )
Revenues in excess of billing - related party     285,791               285,791  
Other current assets     585,147               585,147  
Accounts payable and accrued expenses     334,241               334,241  
Unearned revenue     (1,908,440 )     77,821       (1,830,619 )
Net cash used in operating activities     69,398       -       69,398  
                         
Cash flows from investing activities:                        
Purchases of property and equipment     (1,074,316 )             (1,074,316 )
Sales of property and equipment     181,087               181,087  
Purchase of treasury stock     (38,885 )             (38,885 )
Investment     (705,555 )             (705,555 )
Net cash used in investing activities     (1,637,669 )     -       (1,637,669 )
                         
Cash flows from financing activities:                        
Proceeds from the exercise of stock options and warrants     429,452               429,452  
Proceeds from exercise of subsidiary options     18,089               18,089  
Dividend paid by subsidiary to Non controlling interest     (968,657 )             (968,657 )
Payments on capital lease obligations and loans - net     (69,998 )             (69,998 )
Net cash provided by financing activities     (591,114 )     -       (591,114 )
Effect of exchange rate changes     107,241               107,241  
Net decrease in cash and cash equivalents     (2,052,144 )     -       (2,052,144 )
Cash and cash equivalents, beginning of the period     11,557,527               11,557,527  
Cash and cash equivalents, end of period   $ 9,505,383     $ -     $ 9,505,383