Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Sep. 30, 2014 | Nov. 04, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'NETSOL TECHNOLOGIES INC | ' |
Document Type | '10-Q | ' |
Current Fiscal Year End Date | '--09-30 | ' |
Entity Common Stock, Shares Outstanding | ' | 9,588,485 |
Amendment Flag | 'false | ' |
Entity Central Index Key | '0001039280 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Year Focus | '2015 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Sep. 30, 2014 | Jun. 30, 2014 |
Current assets: | ' | ' |
Cash and cash equivalents | $10,382,556 | $11,462,695 |
Restricted cash | 90,000 | 2,528,844 |
Accounts receivable, net | 11,082,983 | 5,403,165 |
Accounts receivable, net - related party | 2,603,418 | 2,232,610 |
Revenues in excess of billings | 2,173,990 | 2,377,367 |
Other current assets | 2,405,266 | 2,857,879 |
Total current assets | 28,738,213 | 26,862,560 |
Property and equipment, net | 27,852,410 | 29,721,128 |
Intangible assets, net | 26,376,366 | 28,803,018 |
Goodwill | 9,516,568 | 9,516,568 |
Total assets | 92,483,557 | 94,903,274 |
Current liabilities: | ' | ' |
Accounts payable and accrued expenses | 4,653,499 | 5,234,887 |
Current portion of loans and obligations under capitalized leases | 3,212,477 | 5,791,258 |
Unearned revenues | 8,081,082 | 3,239,852 |
Common stock to be issued | 378,487 | 347,518 |
Total current liabilities | 16,325,545 | 14,613,515 |
Long term loans and obligations under capitalized leases; less current maturities | 1,390,770 | 1,532,080 |
Total liabilities | 17,716,315 | 16,145,595 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Common stock, $.01 par value; 14,500,000 shares authorized; 9,477,860 and 9,150,889 issued and outstanding as of September 30, 2014 and June 30, 2014 | 94,778 | 91,509 |
Additional paid-in-capital | 116,655,643 | 115,394,097 |
Treasury stock | -415,425 | -415,425 |
Accumulated deficit | -37,015,329 | -35,177,303 |
Stock subscription receivable | -2,280,488 | -2,280,488 |
Other comprehensive loss | -16,934,777 | -14,979,223 |
Total NetSol stockholders' equity | 60,104,402 | 62,633,167 |
Non-controlling interest | 14,662,840 | 16,124,512 |
Total stockholders' equity | 74,767,242 | 78,757,679 |
Total liabilities and stockholders' equity | $92,483,557 | $94,903,274 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) (USD $) | Sep. 30, 2014 | Jun. 30, 2014 |
Common stock par value (in Dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 14,500,000 | 14,500,000 |
Common stock, shares issued | 9,477,860 | 9,150,889 |
Common stock, shares outstanding | 9,477,860 | 9,150,889 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Net Revenues: | ' | ' |
License fees | $1,584,553 | $2,252,567 |
Maintenance fees | 2,848,641 | 2,380,409 |
Services | 4,397,957 | 3,320,223 |
Services - related party | 1,396,000 | 967,543 |
Total net revenues | 10,227,151 | 8,920,742 |
Cost of revenues: | ' | ' |
Salaries and consultants | 4,116,217 | 3,259,791 |
Travel | 421,871 | 388,585 |
Depreciation and amortization | 1,801,567 | 926,315 |
Other | 674,863 | 688,544 |
Total cost of revenues | 7,014,518 | 5,263,235 |
Gross profit | 3,212,633 | 3,657,507 |
Operating expenses: | ' | ' |
Selling and marketing | 1,132,360 | 1,055,141 |
Depreciation and amortization | 580,773 | 426,617 |
General and administrative | 3,675,755 | 3,407,000 |
Research and development cost | 66,265 | 58,688 |
Total operating expenses | 5,455,153 | 4,947,446 |
Loss from operations | -2,242,520 | -1,289,939 |
Other income and (expenses) | ' | ' |
Loss on sale of assets | -11,052 | -13,795 |
Interest expense | -73,093 | -69,217 |
Interest income | 57,919 | 32,854 |
Gain on foreign currency exchange transactions | 79,220 | 1,111,423 |
Other income | 379 | 9,798 |
Total other income (expenses) | 53,373 | 1,071,063 |
Net loss before income taxes | -2,189,147 | -218,876 |
Income tax provision | -40,076 | -11,131 |
Net loss from continuing operations | -2,229,223 | -230,007 |
Loss from discontinued operations | ' | -201,249 |
Net loss | -2,229,223 | -431,256 |
Non-controlling interest | 391,197 | -665,859 |
Net income (loss) | -1,838,026 | -1,097,115 |
Net loss per share from continuing operations: | ' | ' |
Basic (in Dollars per share) | ($0.20) | ($0.10) |
Diluted (in Dollars per share) | ($0.20) | ($0.10) |
Net loss per share from discontinued operations: | ' | ' |
Basic (in Dollars per share) | ' | ($0.02) |
Diluted (in Dollars per share) | ' | ($0.02) |
Net loss per common share | ' | ' |
Basic (in Dollars per share) | ($0.20) | ($0.12) |
Diluted (in Dollars per share) | ($0.20) | ($0.12) |
Weighted average number of shares outstanding | ' | ' |
Basic (in Shares) | 9,213,324 | 8,956,007 |
Diluted (in Shares) | 9,213,324 | 8,956,007 |
Loss from continuing operations | -1,838,026 | -895,866 |
Loss from discontinued operations | ' | ($201,249) |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (USD $) | 3 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Net loss | ($1,838,026) | ($1,097,115) |
Other comprehensive income (loss): | ' | ' |
Translation adjustment | -3,026,029 | -3,422,716 |
Comprehensive loss | -4,864,055 | -4,519,831 |
Comprehensive loss attributable to non-controlling interest | -1,070,475 | -1,220,534 |
Comprehensive loss attributable to NetSol | ($3,793,580) | ($3,299,297) |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Cash flows from operating activities: | ' | ' |
Net loss | ($2,229,223) | ($431,256) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ' | ' |
Depreciation and amortization | 2,382,340 | 1,473,286 |
Provision for bad debts | ' | 251,673 |
Share of net loss (income) from investment under equity method | ' | -9,192 |
Loss on sale of assets | 11,052 | 13,795 |
Stock issued for services | 290,162 | 318,857 |
Fair market value of warrants and stock options granted | 155,622 | 125,568 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -5,723,728 | -3,582,074 |
Accounts receivable - related party | -495,357 | -377,848 |
Revenues in excess of billing | 133,763 | 3,565,290 |
Other current assets | 479,340 | -438,780 |
Accounts payable, accrued expenses and unearned revenue | 4,515,004 | 2,014,051 |
Net cash provided by (used in) operating activities | -481,025 | 2,923,370 |
Cash flows from investing activities: | ' | ' |
Purchases of property and equipment | -1,031,128 | -2,691,066 |
Sales of property and equipment | 90,841 | 80,287 |
Increase in intangible assets | ' | -1,362,026 |
Net cash used in investing activities | -940,287 | -3,972,805 |
Proceeds from sale of common stock | 850,000 | ' |
Proceeds from the exercise of stock options and warrants | ' | 560,500 |
Proceeds from exercise of subsidiary options | ' | 176,280 |
Restricted cash | 2,438,844 | -426,585 |
Proceeds from bank loans | 109,211 | 519,040 |
Payments on capital lease obligations and loans - net | -2,591,334 | -198,853 |
Net cash provided by financing activities | 806,721 | 630,382 |
Effect of exchange rate changes | -465,548 | -699,315 |
Net decrease in cash and cash equivalents | -1,080,139 | -1,118,368 |
Cash and cash equivalents, beginning of the period | 11,462,695 | 7,874,318 |
Cash and cash equivalents, end of period | 10,382,556 | 6,755,950 |
Cash paid during the period for: | ' | ' |
Interest | 58,091 | 61,466 |
Taxes | $28,494 | ' |
Note_1_Basis_of_Presentation_a
Note 1 - Basis of Presentation and Principles of Consolidation | 3 Months Ended |
Sep. 30, 2014 | |
Disclosure Text Block [Abstract] | ' |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | ' |
The Company designs, develops, markets, and exports proprietary software products to customers in the automobile financing and leasing, banking, healthcare, and financial services industries worldwide. The Company also provides system integration, consulting, and IT products and services in exchange for fees from customers. | |
The consolidated condensed interim financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. | |
These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended June 30, 2014. The Company follows the same accounting policies in preparation of interim reports. Results of operations for the interim periods are not indicative of annual results. | |
The accompanying condensed consolidated financial statements include the accounts of NetSol Technologies, Inc. and subsidiaries (collectively, the “Company”) as follows: | |
Wholly owned Subsidiaries | |
NetSol Technologies Americas, Inc. (“NTA”) | |
NetSol Connect (Private), Ltd. (“Connect”) | |
NetSol-Abraxas Australia Pty Ltd. (“Abraxas”) | |
NetSol Technologies Europe Limited (“NTE”) | |
NetSol Technologies Limited (“NetSol UK”) | |
NTPK (Thailand) Co. Limited (“NTPK Thailand”) | |
NetSol Technologies Thailand Limited (“NetSol Thai”) | |
NetSol Technologies (Beijing) Co. Ltd. (“NetSol Beijing”) | |
NetSol Omni (Private) Ltd. (“Omni”) | |
NetSol Technologies (GmbH) (“NTG”) | |
Majority-owned Subsidiaries | |
NetSol Technologies, Ltd. (“NetSol PK”) | |
NetSol Innovation (Private) Limited (“NetSol Innovation”) | |
Virtual Lease Services Holdings Limited (“VLSH”) | |
Virtual Lease Services Limited (“VLS”) | |
Virtual Lease Services (Ireland) Limited (“VLSIL”) | |
For comparative purposes, prior year’s condensed consolidated financial statements have been reclassified to conform to report classifications of the current year. | |
Note_2_Accounting_Policies
Note 2 - Accounting Policies | 3 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Significant Accounting Policies [Text Block] | ' |
NOTE 2 – ACCOUNTING POLICIES | |
Use of Estimates | |
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |
New Accounting Pronouncements | |
In April 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-08, "Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360)." ASU 2014-08 amends the requirements for reporting discontinued operations and requires additional disclosures about discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations or that have a major effect on the Company's operations and financial results should be presented as discontinued operations. This new accounting guidance is effective for annual periods beginning after December 15, 2014. The Company is currently evaluating the impact of adopting ASU 2014-08 on the Company's results of operations or financial condition. | |
In May 2014, the ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers, which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2014-09 will be effective for the Company in the first quarter of its fiscal year ending June 30, 2018. The Company is currently in the process of evaluating the impact of adoption of this ASU on its consolidated financial statements. | |
In June 2014, the FASB issued Accounting Standards Update No. 2014-12, Compensation — Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force) (ASU 2014-12). The guidance applies to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. For all entities, the amendments in this Update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The effective date is the same for both public business entities and all other entities. The Company is currently evaluating the impact of adopting ASU 2014-12 on the Company's results of operations or financial condition. | |
In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entities Ability to Continue as a Going Concern(ASU 2014-15). The guidance in ASU 2014-15 sets forth management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern as well as required disclosures. ASU 2014-15 indicates that, when preparing financial statements for interim and annual financial statements, management should evaluate whether conditions or events, in the aggregate, raise substantial doubt about the entity's ability to continue as a going concern for one year from the date the financial statements are issued or are available to be issued. This evaluation should include consideration of conditions and events that are either known or are reasonably knowable at the date the financial statements are issued or are available to be issued, as well as whether it is probable that management's plans to address the substantial doubt will be implemented and, if so, whether it is probable that the plans will alleviate the substantial doubt. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods and annual periods thereafter. Early application is permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. | |
Note_3_Earnings_Per_Share
Note 3 - Earnings Per Share | 3 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Earnings Per Share [Text Block] | ' | ||||||||
NOTE 3 – EARNINGS PER SHARE | |||||||||
Basic earnings per share are computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options, warrants, and stock awards. All options, warrants and stock awards were excluded from the diluted loss per share calculation due to their anti-dilution effect. | |||||||||
As of September 30, 2014 and 2013, the following potential dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive. | |||||||||
As of September 30, | |||||||||
2014 | 2013 | ||||||||
Stock Options | 757,462 | 302,462 | |||||||
Warrants | 163,124 | 163,124 | |||||||
920,586 | 465,586 | ||||||||
Note_4_Other_Comprehensive_Inc
Note 4 - Other Comprehensive Income and Foreign Currency | 3 Months Ended |
Sep. 30, 2014 | |
Other Comprehensive Income And Foreign Currency [Abstract] | ' |
Other Comprehensive Income And Foreign Currency | ' |
NOTE 4 – OTHER COMPREHENSIVE INCOME AND FOREIGN CURRENCY: | |
The accounts of NTE, NetSol UK, VLSH and VLS use the British Pound; VLSIL and NTG use the Euro; NetSol PK, Connect, Omni and NetSol Innovation use Pakistan Rupees; NTPK Thailand and NetSol Thai use Thai Baht; Abraxas uses the Australian dollar; and NetSol Beijing uses Chinese Yuan as the functional currencies. NetSol Technologies, Inc., and its subsidiaries, NTA and Vroozi, use the U.S. dollar as the functional currency. Assets and liabilities are translated at the exchange rate on the balance sheet date, and operating results are translated at the average exchange rate throughout the period. Accumulated translation losses classified as an item of accumulated other comprehensive loss in the stockholders’ equity section of the consolidated balance sheet were $16,934,777, and $14,979,223 as of September 30, 2014 and June 30, 2014, respectively. During the three months ended September 30, 2014 and 2013, comprehensive loss in the consolidated statements of operations included translation loss of $1,955,554, and $2,202,182, respectively. | |
Note_5_Related_Party_Transacti
Note 5 - Related Party Transactions | 3 Months Ended |
Sep. 30, 2014 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions Disclosure [Text Block] | ' |
NOTE 5 – RELATED PARTY TRANSACTIONS | |
In November 2004, the Company entered into a joint venture agreement with the Innovation Group called NetSol-Innovation (Pvt) Ltd., (“NetSol-Innovation”), a Pakistani company. NetSol-Innovation provides support services to the Innovation Group. During the quarters ended September 30, 2014 and 2013, NetSol-Innovation provided services of $1,396,000 and $967,543 respectively. Accounts receivable at September 30, 2014 and June 30, 2014 were $2,603,418 and $2,232,610, respectively. | |
Note_6_Other_Current_Assets
Note 6 - Other Current Assets | 3 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Disclosure Text Block Supplement [Abstract] | ' | ||||||||
Other Assets Disclosure [Text Block] | ' | ||||||||
NOTE 6 - OTHER CURRENT ASSETS | |||||||||
Other current assets consisted of the following: | |||||||||
As of September 30, | As of June 30, | ||||||||
2014 | 2014 | ||||||||
Prepaid Expenses | $ | 604,132 | $ | 450,451 | |||||
Advance Income Tax | 789,444 | 918,300 | |||||||
Employee Advances | 29,173 | 46,730 | |||||||
Security Deposits | 137,814 | 189,905 | |||||||
Tender Money Receivable | 77,345 | 81,420 | |||||||
Other Receivables | 250,273 | 645,397 | |||||||
Other Assets | 421,917 | 430,508 | |||||||
Due From Related Party | -1 | 95,168 | 95,168 | ||||||
Total | $ | 2,405,266 | $ | 2,857,879 | |||||
(1) Due from related party as of September 30, 2014 and June 30, 2014 is a receivable from Atheeb NetSol Saudi Company Limited. | |||||||||
Note_7_Property_and_Equipment
Note 7 - Property and Equipment | 3 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Property, Plant and Equipment Disclosure [Text Block] | ' | ||||||||
NOTE 7 - PROPERTY AND EQUIPMENT | |||||||||
Property and equipment, net, consisted of the following: | |||||||||
As of September 30, | As of June 30, | ||||||||
2014 | 2014 | ||||||||
Office Furniture and Equipment | $ | 2,604,368 | $ | 2,628,814 | |||||
Computer Equipment | 26,325,684 | 27,215,091 | |||||||
Assets Under Capital Leases | 1,946,650 | 1,861,445 | |||||||
Building | 5,947,499 | 6,259,290 | |||||||
Land | 3,184,379 | 3,351,316 | |||||||
Capital Work In Progress | 2,860,802 | 2,812,181 | |||||||
Autos | 922,681 | 999,277 | |||||||
Improvements | 506,424 | 533,102 | |||||||
Subtotal | 44,298,487 | 45,660,516 | |||||||
Accumulated Depreciation | (16,446,077 | ) | (15,939,388 | ) | |||||
Property and Equipment, Net | $ | 27,852,410 | $ | 29,721,128 | |||||
For the three months ended September 30, 2014 and 2013, depreciation expense totaled $1,368,707, and $997,560, respectively. Of these amounts, $918,892, and $613,110, respectively, is reflected in cost of revenues. | |||||||||
The Company’s capital work in progress consists of ongoing enhancements to its facilities and infrastructure necessary to meet expected long term growth needs. Accumulated capitalized interest was $693,367, and $664,614 as of September 30, 2014 and June 30, 2014, respectively. | |||||||||
Following is a summary of fixed assets held under capital leases as of September 30, 2014 and June 30, 2014: | |||||||||
As of September 30, | As of June 30, | ||||||||
2014 | 2014 | ||||||||
Computers, Software and Other Equipment | $ | 780,977 | $ | 731,354 | |||||
Furniture and Fixtures | 347,966 | 280,184 | |||||||
Vehicles | 817,707 | 849,907 | |||||||
Total | 1,946,650 | 1,861,445 | |||||||
Less: Accumulated Depreciation, Net | (525,387 | ) | (469,336 | ) | |||||
$ | 1,421,263 | $ | 1,392,109 | ||||||
Note_8_Intangible_Assets
Note 8 - Intangible Assets | 3 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Disclosure Text Block [Abstract] | ' | ||||||||||||||||
Intangible Assets Disclosure [Text Block] | ' | ||||||||||||||||
NOTE 8 - INTANGIBLE ASSETS | |||||||||||||||||
Intangible assets consisted of the following: | |||||||||||||||||
Product Licenses | Customer Lists | Technology | Total | ||||||||||||||
Intangible Assets - June 30, 2014 - Cost | $ | 48,632,368 | $ | 6,052,377 | $ | 242,702 | $ | 54,927,447 | |||||||||
Additions | - | - | - | - | |||||||||||||
Effect of Translation Adjustment | (2,776,099 | ) | - | - | (2,776,099 | ) | |||||||||||
Accumulated Amortization | (19,579,231 | ) | (5,953,049 | ) | (242,702 | ) | (25,774,982 | ) | |||||||||
Net Balance - September 30, 2014 | $ | 26,277,038 | $ | 99,328 | $ | - | $ | 26,376,366 | |||||||||
(A) Product Licenses | |||||||||||||||||
Product licenses include internally developed original license issues, renewals, enhancements, copyrights, trademarks, and trade names. Product licenses are amortized on a straight-line basis over their respective lives, and the unamortized amount of $26,277,038 will be amortized over the next 9.5 years. Amortization expense for the three months ended September 30, 2014 and 2013 was $882,675 and $433,559, respectively. | |||||||||||||||||
(B) Customer Lists | |||||||||||||||||
Customer lists are being amortized on a straight-line basis over five years, which approximates the anticipated rate of attrition. The unamortized balance of $99,328 will be amortized over the next two years. Amortization expense for the three months ended September 30, 2014 and 2013 was $13,368 and $30,048, respectively. | |||||||||||||||||
(C) Technology | |||||||||||||||||
Technology assets are being amortized on a straight-line basis over five years, which approximates the anticipated rate of attrition. Amortization expense for the three months ended September 30, 2014 and 2013 was $117,590 and $12,119, respectively. | |||||||||||||||||
(D) Future Amortization | |||||||||||||||||
Estimated amortization expense of intangible assets over the next five years is as follows: | |||||||||||||||||
Year ended: | |||||||||||||||||
30-Sep-15 | $ | 3,384,397 | |||||||||||||||
30-Sep-16 | 3,081,686 | ||||||||||||||||
30-Sep-17 | 3,032,026 | ||||||||||||||||
30-Sep-18 | 3,032,026 | ||||||||||||||||
30-Sep-19 | 2,999,054 | ||||||||||||||||
Thereafter | 10,847,177 | ||||||||||||||||
$ | 26,376,366 | ||||||||||||||||
Note_9_Goodwill
Note 9 - Goodwill | 3 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Disclosure Text Block Supplement [Abstract] | ' | ||||||||
Goodwill Disclosure [Text Block] | ' | ||||||||
NOTE 9 – GOODWILL | |||||||||
Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in businesses combinations. Goodwill was comprised of the following amounts: | |||||||||
As of September 30, | As of June 30, | ||||||||
2014 | 2014 | ||||||||
NetSol PK | $ | 1,166,610 | $ | 1,166,610 | |||||
NTE | 3,471,814 | 3,471,814 | |||||||
VLS | 214,044 | 214,044 | |||||||
NTA | 4,664,100 | 4,664,100 | |||||||
Total | $ | 9,516,568 | $ | 9,516,568 | |||||
The Company tests for goodwill impairment at each reporting unit. There was no goodwill impairment for the period ended September 30, 2014. | |||||||||
Note_10_Accounts_Payable_and_A
Note 10 - Accounts Payable and Accrued Expenses | 3 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | ' | ||||||||
NOTE 10 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |||||||||
Accounts payable and accrued expenses consisted of the following: | |||||||||
As of September 30, | As of June 30, | ||||||||
2014 | 2014 | ||||||||
Accounts Payable | $ | 1,344,466 | $ | 1,642,325 | |||||
Accrued Liabilities | 2,767,466 | 2,956,686 | |||||||
Accrued Payroll | 38,968 | 44,185 | |||||||
Accrued Payroll Taxes | 147,150 | 261,261 | |||||||
Interest Payable | 74,491 | 61,555 | |||||||
Taxes Payable | 177,732 | 165,649 | |||||||
Other Payable | 103,226 | 103,226 | |||||||
Total | $ | 4,653,499 | $ | 5,234,887 | |||||
Note_11_Debts
Note 11 - Debts | 3 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Disclosure Text Block Supplement [Abstract] | ' | |||||||||||||
Debt and Capital Leases Disclosures [Text Block] | ' | |||||||||||||
NOTE 11 – DEBTS | ||||||||||||||
Notes payable and capital leases consisted of the following: | ||||||||||||||
As of September 30, 2014 | ||||||||||||||
Name | Total | Current | Long-Term | |||||||||||
Maturities | Maturities | |||||||||||||
D&O Insurance | -1 | $ | 4,855 | $ | 4,855 | $ | - | |||||||
Habib Bank Line of Credit | -2 | - | - | - | ||||||||||
Bank Overdraft Facility | -3 | 104,603 | 104,603 | - | ||||||||||
HSBC Loan | -4 | 714,060 | 336,417 | 377,643 | ||||||||||
Term Finance Facility | -5 | 601,019 | 240,408 | 360,611 | ||||||||||
Loan Payable Bank | -6 | 1,923,262 | 1,923,262 | - | ||||||||||
Loan From Related Party | -7 | 272,190 | 144,322 | 127,868 | ||||||||||
3,619,989 | 2,753,867 | 866,122 | ||||||||||||
Subsidiary Capital Leases | -8 | 983,258 | 458,610 | 524,648 | ||||||||||
$ | 4,603,247 | $ | 3,212,477 | $ | 1,390,770 | |||||||||
As of June 30, 2014 | ||||||||||||||
Name | Total | Current | Long-Term | |||||||||||
Maturities | Maturities | |||||||||||||
D&O Insurance | -1 | $ | 54,547 | $ | 54,547 | $ | - | |||||||
Habib Bank Line of Credit | -2 | 2,438,844 | 2,438,844 | - | ||||||||||
Bank Overdraft Facility | -3 | - | - | - | ||||||||||
HSBC Loan | -4 | 835,899 | 346,138 | 489,761 | ||||||||||
Term Finance Facility | -5 | 632,527 | 253,011 | 379,516 | ||||||||||
Loan Payable Bank | -6 | 2,024,087 | 2,024,087 | - | ||||||||||
Loan From Related Party | -7 | 322,600 | 194,740 | 127,860 | ||||||||||
6,308,504 | 5,311,367 | 997,137 | ||||||||||||
Subsidiary Capital Leases | -8 | 1,014,834 | 479,891 | 534,943 | ||||||||||
$ | 7,323,338 | $ | 5,791,258 | $ | 1,532,080 | |||||||||
(1) The Company finances Directors’ and Officers’ (“D&O”) liability insurance as well as Errors and Omissions (“E&O”) liability insurance, for which the total balances are renewed on an annual basis, are recorded in current maturities. The interest rate on the insurance financing was 0.55% as of September 30, 2014 and June 30, 2014, respectively. | ||||||||||||||
(2) In April 2008, the Company entered into an agreement with Habib American Bank to secure a line of credit to be collateralized by certificates of deposit held at the bank. The interest rate on this line of credit is variable, and was 1.5% as of September 30, 2014 and June 30, 2014, respectively. Interest expense for the three months ended September 30, 2014 and 2013 was $7,070 and $6,997, respectively. | ||||||||||||||
In February 2012, the Company entered into agreement with HSBC for the issuance of stand by letter of credit worth $90,000 in favor of landlord against the new office space. The Company has deposited $90,000 in a saving account with HSBC as collateral against this letter of credit. | ||||||||||||||
In June 2012, the Company’s subsidiary, NTA, entered into an agreement with Habib American Bank to secure a line of credit up to $500,000 to be collateralized by certificates of deposit of the same value held at the bank. The interest rate on this line of credit is variable and was 1.9% and 1.9% as of September 30, 2014 and June 30, 2014, respectively. Interest expense for the three months ended September 30, 2014 and 2013 was $1,588 and $299, respectively. | ||||||||||||||
Amounts of both lines of credit were paid down during the period. | ||||||||||||||
(3) During the year ended June 30, 2008, the Company’s subsidiary, NTE, entered into an overdraft facility with HSBC Bank plc whereby the bank would cover any overdrafts up to £300,000, or approximately $487,230. The annual interest rate was 4.75% as of September 30, 2014 and June 30, 2014, respectively. | ||||||||||||||
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 September 30, 2014, NTE was in compliance with this covenant. | ||||||||||||||
(4) In October 2011, the Company’s subsidiary, NTE, entered into a loan agreement with HSBC Bank to finance the acquisition of 51% in Virtual Leasing Services Limited. HSBC Bank guaranteed the loan up to a limit of £1,000,000, or approximately $1,624,100 for a period of 5 years with monthly payments of £18,420, or approximately $29,916. The interest rate was 4% which is 3.5% above the bank sterling base rate. The loan is securitized against debenture comprising of fixed and floating charges over all the assets and undertakings of NTE including all present and future freehold and leasehold property, book and other debts, chattels, goodwill and uncalled capital, both present and future. Interest expense for the three months ended September 30, 2014 and 2013 was $16,702 and $18,849, respectively. | ||||||||||||||
This facility requires that NTE’s adjusted tangible net worth to be not be less than £600,000. For this purpose, adjusted tangible net worth means shareholders’ funds less intangible assets plus non-redeemable preference shares. In addition, the facility requires NTE’s cash debt service coverage to not fall below 150% of the aggregate debt service cost. As of September 30, 2014, NTE was in compliance with this covenant. | ||||||||||||||
(5) The Company’s subsidiary, NetSol PK, entered into two different term finance facilities from Askari Bank to finance the construction of a new building. The total aggregate amount of these facilities is Rs. 112,500,000, or approximately $1,081,835, (secured by the first charge of Rs. 580 million or approximately $5.58 million over the land, building and equipment of the company). The interest rate was 12.90% as of September 30, 2014 and June 30, 2014, respectively, which is 2.75% above the six-month Karachi Inter Bank Offering Rate. | ||||||||||||||
(6) The Company’s subsidiary, NetSol PK, has an export refinance facility with Askari Bank Limited, secured by the Company’s assets. This is a revolving loan that matures every six months. Total facility amount is Rs. 300,000,000 or $2,884,893. The interest rate for the loans was 7.5% and 9.4% at September 30, 2014 and June 30, 2014 respectively. Interest expense for the three months ended September 30, 2014 and 2013 was $35,001 and $22,123, respectively. | ||||||||||||||
Both term and export refinance facilities from Askari Bank Limited amounting to Rupees 262.5 million ($2.52 million) require NetSol PK to maintain a long term debt equity ratio of 60:40 and the current ratio of 1:1. As of September 30, 2014, NetSol PK was in compliance with this covenant. | ||||||||||||||
(7) In October 2013, the Company’s subsidiary, NTE, entered into a loan agreement with Investec, a related party, to finance VLS. The loan amount was £100,000, or approximately $162,410, for a period of 1 year with monthly payments of £8,676, or approximately $14,091. The interest rate was 4.1%. | ||||||||||||||
In March 2014, the Company’s subsidiary, VLS, entered into a loan agreement with Investec. The loan amount was £150,000, or approximately $243,615, for a period of two years with annual payments of £75,000, or approximately $121,808. The interest rate was 3.13%. As of September 30, 2014, the subsidiary has used this facility up to $258,186 including interest due, of which $127,868 was shown as long term and $130,318 as current maturity, including seven months of accrued interest. | ||||||||||||||
(8) The Company leases various fixed assets under capital lease arrangements expiring in various years through 2018. The assets and liabilities under capital 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 capital leases is included in depreciation expense for the three months ended September 30, 2014 and 2013. | ||||||||||||||
Following is the aggregate minimum future lease payments under capital leases as of September 30, 2014: | ||||||||||||||
Amount | ||||||||||||||
Minimum Lease Payments | ||||||||||||||
Due FYE 9/30/15 | $ | 571,349 | ||||||||||||
Due FYE 9/30/16 | 403,900 | |||||||||||||
Due FYE 9/30/17 | 144,691 | |||||||||||||
Total Minimum Lease Payments | 1,119,940 | |||||||||||||
Interest Expense relating to future periods | (136,682 | ) | ||||||||||||
Present Value of minimum lease payments | 983,258 | |||||||||||||
Less: Current portion | (458,610 | ) | ||||||||||||
Non-Current portion | $ | 524,648 | ||||||||||||
Note_12_Stockholders_Equity
Note 12 - Stockholders' Equity | 3 Months Ended |
Sep. 30, 2014 | |
Stockholders' Equity Note [Abstract] | ' |
Stockholders' Equity Note Disclosure [Text Block] | ' |
NOTE 12 - STOCKHOLDERS’ EQUITY | |
Share-Based Payment Transactions | |
During the three months ended September 30, 2014, the Company issued 17,500 shares of restricted common stock for services rendered by officers of the Company. These shares were valued at the fair market value of $152,900 and recorded as compensation expense in the accompanying condensed consolidated financial statements. | |
During the three months ended September 30, 2014, the Company issued 1,726 shares of restricted common stock for services rendered by the independent members of the Board of Directors as part of their board compensation. These shares were valued at the fair market value of $18,433 and recorded as compensation expense in the accompanying condensed consolidated financial statements. | |
During the three months ended September 30, 2014, the Company issued 9,500 shares of its common stock to employees pursuant to the terms of their employment agreements valued at $87,860 and recorded as compensation expense in the accompanying condensed consolidated financial statements. | |
On September 19, 2014, the Company received $850,000 pursuant to a stock purchase agreement for the purchase of 298,245 restricted shares of common stock at $2.85 per share. The Company issued the shares on October 10, 2014. | |
Note_13_Incentive_and_NonStatu
Note 13 - Incentive and Non-Statutory Stock Option Plan | 3 Months Ended | |||||||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | ' | |||||||||||||||||||||||||||
NOTE 13 - INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN | ||||||||||||||||||||||||||||
Common stock purchase options and warrants consisted of the following: | ||||||||||||||||||||||||||||
OPTIONS: | ||||||||||||||||||||||||||||
# of shares | Weighted Ave | Weighted | Aggregated | |||||||||||||||||||||||||
Exericse Price | Average | Intrinsic Value | ||||||||||||||||||||||||||
Remaining | ||||||||||||||||||||||||||||
Contractual | ||||||||||||||||||||||||||||
Life (in years) | ||||||||||||||||||||||||||||
Outstanding June 30, 2014 | 757,462 | $ | 6.65 | 2.2 | ||||||||||||||||||||||||
Granted | - | - | ||||||||||||||||||||||||||
Exercised | - | - | ||||||||||||||||||||||||||
Expired / Cancelled | - | - | ||||||||||||||||||||||||||
Outstanding September 30, 2014 | 757,462 | $ | 6.65 | 1.95 | $ | - | ||||||||||||||||||||||
Exercisable, September 30, 2014 | 382,462 | $ | 9.36 | 2.17 | $ | - | ||||||||||||||||||||||
WARRANTS: | ||||||||||||||||||||||||||||
Outstanding and exercisable, June 30, 2014 | 163,124 | $ | 7.29 | 2.2 | ||||||||||||||||||||||||
Granted / adjusted | - | - | ||||||||||||||||||||||||||
Exercised | - | - | ||||||||||||||||||||||||||
Expired | - | - | ||||||||||||||||||||||||||
Outstanding and exercisable, September 30, 2014 | 163,124 | $ | 7.29 | 1.96 | $ | - | ||||||||||||||||||||||
The following table summarizes information about stock options and warrants outstanding and exercisable at September 30, 2014. | ||||||||||||||||||||||||||||
Exercise Price | Number | Weighted | Weighted | Number | Weighted | Weighted | ||||||||||||||||||||||
Outstanding | Average | Ave | Exercisable | Average | Ave | |||||||||||||||||||||||
Remaining | Exericse | Remaining | Exericse | |||||||||||||||||||||||||
Contractual | Price | Contractual | Price | |||||||||||||||||||||||||
Life | Life | |||||||||||||||||||||||||||
OPTIONS: | ||||||||||||||||||||||||||||
$0.10 | - | $9.90 | 683,462 | 1.99 | $ | 4.77 | 308,462 | 2.32 | $ | 5.86 | ||||||||||||||||||
$10.00 | - | $19.90 | 14,000 | 1.37 | $ | 18.18 | 14,000 | 1.37 | $ | 18.18 | ||||||||||||||||||
$20.00 | - | $29.90 | 60,000 | 1.58 | $ | 25.33 | 60,000 | 1.58 | $ | 25.33 | ||||||||||||||||||
Totals | 757,462 | 1.95 | $ | 6.65 | 382,462 | 2.17 | $ | 9.36 | ||||||||||||||||||||
WARRANTS: | ||||||||||||||||||||||||||||
$5.00 | - | $7.50 | 163,124 | 1.96 | $ | 7.29 | 163,124 | 1.96 | $ | 7.29 | ||||||||||||||||||
Totals | 163,124 | 1.96 | $ | 7.29 | 163,124 | 1.96 | $ | 7.29 | ||||||||||||||||||||
The Company recorded compensation expense of $155,622 for the three month period ended September 30, 2014, related to vested options. The compensation expense related to the unvested options as of September 30, 2014 was $466,867 which will be recognized during the fiscal year of 2015. | ||||||||||||||||||||||||||||
The following table summarizes stock grants awarded as compensation: | ||||||||||||||||||||||||||||
# of shares | Weighted | |||||||||||||||||||||||||||
Average Grant | ||||||||||||||||||||||||||||
Date Fair | ||||||||||||||||||||||||||||
Value ($) | ||||||||||||||||||||||||||||
Unvested, June 30, 2013 | - | - | ||||||||||||||||||||||||||
Granted | 337,899 | $ | 5.78 | |||||||||||||||||||||||||
Vested | (105,899 | ) | $ | 10 | ||||||||||||||||||||||||
Unvested, June 30, 2014 | 232,000 | $ | 3.88 | |||||||||||||||||||||||||
Granted | 92,500 | $ | 2.9 | |||||||||||||||||||||||||
Vested | (82,625 | ) | $ | 3.61 | ||||||||||||||||||||||||
Unvested, September 30, 2014 | 241,875 | $ | 3.6 | |||||||||||||||||||||||||
For the periods ended September 30, 2014 and 2013, the Company recorded compensation expense of $297,923 and $232,012 respectively. The compensation expense related to the unvested stock grants as of September 30, 2014 was $870,848 which will be recognized during the fiscal year of 2015. | ||||||||||||||||||||||||||||
Note_14_Contingencies
Note 14 - Contingencies | 15 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies Disclosure [Text Block] | ' |
NOTE 14 – CONTINGENCIES | |
On July 25, 2014, a Federal Securities class action lawsuit entitled Rand-Heart of New York, Inc. v. NetSol Technologies, Inc., Najeeb Ghauri, Naeem Ghauri, and Salim Ghauri was filed in Central District of California. The action generally alleges the Company violated certain federal securities laws by allegedly issuing false and misleading statements regarding the Company’s product and business prospect of that product. Specifically, the complaint alleges the next-generation product did not exist as of November 8, 2011 and there was no reasonable basis for stating that there was a growing interest or serious interest in the product; the product had been gaining momentum or that it had been well received. The plaintiff has alleged the class period to be between November 12, 2009 and November 8, 2013. The Company believes the lawsuit to be meritless and intends to vigorously defend the action including but not limited to motions to dismiss. The Company has engaged counsel and has liability insurance. Given the early stage of the litigation, however, at this time the Company is unable to form a professional judgment that an unfavorable outcome is either probable or remote, and it is not possible to assess whether or not the outcome of these proceedings will or will not have a material adverse effect on the Company. As of the date of this filing, a class had not yet been established. | |
Note_15_Operating_Segments
Note 15 - Operating Segments | 3 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Segment Reporting [Abstract] | ' | ||||||||
Segment Reporting Disclosure [Text Block] | ' | ||||||||
NOTE 15 – OPERATING SEGMENTS | |||||||||
The Company has identified three segments for its products and services; North America, Europe and Asia-Pacific. Our reportable segments are business units located in different global regions. Each business unit provides similar products and services; license fees for leasing and asset-based software, related maintenance fees, and implementation and IT consulting services. Separate management of each segment is required because each business unit is subject to different operational issues and strategies due to their particular regional location. The Company accounts for intra-company sales and expenses as if the sales or expenses were to third parties and eliminates them in the consolidation. The following table presents a summary of identifiable assets as of September 30, 2014 and June 30, 2014: | |||||||||
As of September 30, | As of June 30, | ||||||||
2014 | 2014 | ||||||||
Identifiable assets: | |||||||||
Corporate headquarters | $ | 3,400,548 | $ | 5,150,823 | |||||
North America | 6,472,549 | 7,406,631 | |||||||
Europe | 6,087,158 | 6,169,265 | |||||||
Asia - Pacific | 76,523,302 | 76,176,555 | |||||||
Consolidated | $ | 92,483,557 | $ | 94,903,274 | |||||
The following table presents a summary of operating information for the three months ended September 30: | |||||||||
For the Three Months | |||||||||
Ended September 30, | |||||||||
2014 | 2013 | ||||||||
Revenues from unaffiliated customers: | |||||||||
North America | $ | 1,166,777 | $ | 1,081,618 | |||||
Europe | 1,850,013 | 1,208,502 | |||||||
Asia - Pacific | 5,814,361 | 5,663,079 | |||||||
8,831,151 | 7,953,199 | ||||||||
Revenue from affiliated customers | |||||||||
Asia - Pacific | 1,396,000 | 967,543 | |||||||
Consolidated | $ | 10,227,151 | $ | 8,920,742 | |||||
Intercompany revenue | |||||||||
Europe | $ | 130,528 | $ | 149,396 | |||||
Asia - Pacific | 281,119 | 303,078 | |||||||
Eliminated | $ | 411,647 | $ | 452,474 | |||||
Net income (loss) after taxes and before non-controlling interest: | |||||||||
Corporate headquarters | $ | (992,556 | ) | $ | (1,149,908 | ) | |||
North America | 265,723 | 193,201 | |||||||
Europe | 16,826 | (553,718 | ) | ||||||
Asia - Pacific | (1,519,216 | ) | 1,280,418 | ||||||
Discontinued operation | - | (201,249 | ) | ||||||
Consolidated | $ | (2,229,223 | ) | $ | (431,256 | ) | |||
The following table presents a summary of capital expenditures for the three months ended September 30: | |||||||||
For the Three Months | |||||||||
Ended September 30, | |||||||||
2014 | 2013 | ||||||||
Capital expenditures: | |||||||||
Corporate headquarters | $ | 1,786 | $ | 2,097 | |||||
North America | 4,866 | 7,987 | |||||||
Europe | 42,918 | 77,580 | |||||||
Asia - Pacific | 981,558 | 2,603,402 | |||||||
Consolidated | $ | 1,031,128 | $ | 2,691,066 | |||||
Note_16_Discontinued_Operation
Note 16 - Discontinued Operations | 3 Months Ended |
Sep. 30, 2014 | |
Discontinued Operations and Disposal Groups [Abstract] | ' |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | ' |
NOTE 16 – DISCONTINUED OPERATIONS | |
On March 31, 2014, the Company sold 100% of its stock in Vroozi, Inc. for a purchase price of $2,716,050 consisting of $1,810,700 cash, a $452,675 non-interest bearing note receivable due September 30, 2014, and a $452,675 non-interest bearing note receivable contingent upon the occurrence of future events; however, the future events must occur before March 31, 2015. The $452,675 non-interest bearing note receivable that is contingent upon the occurrence of future events was not included in the gain calculation due to the uncertainty that the future events would occur. The company received $452,675 on September 30, 2014 as payment for the non-interest bearing note receivable. | |
Note_17_NonControlling_Interes
Note 17 - Non-Controlling Interest in Subsidiary | 3 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Noncontrolling Interest [Abstract] | ' | ||||||||
Noncontrolling Interest Disclosure [Text Block] | ' | ||||||||
NOTE 17 – NON-CONTROLLING INTEREST IN SUBSIDIARY | |||||||||
The Company had non-controlling interests in several of its subsidiaries. The balance of non-controlling interest was as follows: | |||||||||
SUBSIDIARY | Non Controlling | Non-Controlling | |||||||
Interest % | Interest at | ||||||||
30-Sep-14 | |||||||||
NetSol PK | 36.62 | % | $ | 12,640,931 | |||||
NetSol-Innovation | 49.9 | % | 1,797,252 | ||||||
VLS, VLHS & VLSIL Combined | 49 | % | 224,657 | ||||||
Total | $ | 14,662,840 | |||||||
SUBSIDIARY | Non Controlling | Non-Controlling | |||||||
Interest % | Interest at | ||||||||
30-Jun-14 | |||||||||
NetSol PK | 36.62 | % | $ | 14,317,233 | |||||
NetSol-Innovation | 49.9 | % | 1,546,920 | ||||||
VLS, VLHS & VLSIL Combined | 49 | % | 260,359 | ||||||
Total | $ | 16,124,512 | |||||||
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Use of Estimates, Policy [Policy Text Block] | ' |
Use of Estimates | |
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |
New Accounting Pronouncements, Policy [Policy Text Block] | ' |
New Accounting Pronouncements | |
In April 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-08, "Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360)." ASU 2014-08 amends the requirements for reporting discontinued operations and requires additional disclosures about discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations or that have a major effect on the Company's operations and financial results should be presented as discontinued operations. This new accounting guidance is effective for annual periods beginning after December 15, 2014. The Company is currently evaluating the impact of adopting ASU 2014-08 on the Company's results of operations or financial condition. | |
In May 2014, the ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers, which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2014-09 will be effective for the Company in the first quarter of its fiscal year ending June 30, 2018. The Company is currently in the process of evaluating the impact of adoption of this ASU on its consolidated financial statements. | |
In June 2014, the FASB issued Accounting Standards Update No. 2014-12, Compensation — Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force) (ASU 2014-12). The guidance applies to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. For all entities, the amendments in this Update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The effective date is the same for both public business entities and all other entities. The Company is currently evaluating the impact of adopting ASU 2014-12 on the Company's results of operations or financial condition. | |
In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entities Ability to Continue as a Going Concern(ASU 2014-15). The guidance in ASU 2014-15 sets forth management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern as well as required disclosures. ASU 2014-15 indicates that, when preparing financial statements for interim and annual financial statements, management should evaluate whether conditions or events, in the aggregate, raise substantial doubt about the entity's ability to continue as a going concern for one year from the date the financial statements are issued or are available to be issued. This evaluation should include consideration of conditions and events that are either known or are reasonably knowable at the date the financial statements are issued or are available to be issued, as well as whether it is probable that management's plans to address the substantial doubt will be implemented and, if so, whether it is probable that the plans will alleviate the substantial doubt. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods and annual periods thereafter. Early application is permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. |
Note_3_Earnings_Per_Share_Tabl
Note 3 - Earnings Per Share (Tables) | 3 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | ' | ||||||||
As of September 30, | |||||||||
2014 | 2013 | ||||||||
Stock Options | 757,462 | 302,462 | |||||||
Warrants | 163,124 | 163,124 | |||||||
920,586 | 465,586 |
Note_6_Other_Current_Assets_Ta
Note 6 - Other Current Assets (Tables) | 3 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Disclosure Text Block Supplement [Abstract] | ' | ||||||||
Schedule of Other Assets [Table Text Block] | ' | ||||||||
As of September 30, | As of June 30, | ||||||||
2014 | 2014 | ||||||||
Prepaid Expenses | $ | 604,132 | $ | 450,451 | |||||
Advance Income Tax | 789,444 | 918,300 | |||||||
Employee Advances | 29,173 | 46,730 | |||||||
Security Deposits | 137,814 | 189,905 | |||||||
Tender Money Receivable | 77,345 | 81,420 | |||||||
Other Receivables | 250,273 | 645,397 | |||||||
Other Assets | 421,917 | 430,508 | |||||||
Due From Related Party | -1 | 95,168 | 95,168 | ||||||
Total | $ | 2,405,266 | $ | 2,857,879 |
Note_7_Property_and_Equipment_
Note 7 - Property and Equipment (Tables) | 3 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Property, Plant and Equipment [Table Text Block] | ' | ||||||||
As of September 30, | As of June 30, | ||||||||
2014 | 2014 | ||||||||
Office Furniture and Equipment | $ | 2,604,368 | $ | 2,628,814 | |||||
Computer Equipment | 26,325,684 | 27,215,091 | |||||||
Assets Under Capital Leases | 1,946,650 | 1,861,445 | |||||||
Building | 5,947,499 | 6,259,290 | |||||||
Land | 3,184,379 | 3,351,316 | |||||||
Capital Work In Progress | 2,860,802 | 2,812,181 | |||||||
Autos | 922,681 | 999,277 | |||||||
Improvements | 506,424 | 533,102 | |||||||
Subtotal | 44,298,487 | 45,660,516 | |||||||
Accumulated Depreciation | (16,446,077 | ) | (15,939,388 | ) | |||||
Property and Equipment, Net | $ | 27,852,410 | $ | 29,721,128 | |||||
Schedule of Capital Leased Assets [Table Text Block] | ' | ||||||||
As of September 30, | As of June 30, | ||||||||
2014 | 2014 | ||||||||
Computers, Software and Other Equipment | $ | 780,977 | $ | 731,354 | |||||
Furniture and Fixtures | 347,966 | 280,184 | |||||||
Vehicles | 817,707 | 849,907 | |||||||
Total | 1,946,650 | 1,861,445 | |||||||
Less: Accumulated Depreciation, Net | (525,387 | ) | (469,336 | ) | |||||
$ | 1,421,263 | $ | 1,392,109 |
Note_8_Intangible_Assets_Table
Note 8 - Intangible Assets (Tables) | 3 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Disclosure Text Block [Abstract] | ' | ||||||||||||||||
Schedule of Intangible Assets and Goodwill [Table Text Block] | ' | ||||||||||||||||
Product Licenses | Customer Lists | Technology | Total | ||||||||||||||
Intangible Assets - June 30, 2014 - Cost | $ | 48,632,368 | $ | 6,052,377 | $ | 242,702 | $ | 54,927,447 | |||||||||
Additions | - | - | - | - | |||||||||||||
Effect of Translation Adjustment | (2,776,099 | ) | - | - | (2,776,099 | ) | |||||||||||
Accumulated Amortization | (19,579,231 | ) | (5,953,049 | ) | (242,702 | ) | (25,774,982 | ) | |||||||||
Net Balance - September 30, 2014 | $ | 26,277,038 | $ | 99,328 | $ | - | $ | 26,376,366 | |||||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | ' | ||||||||||||||||
Year ended: | |||||||||||||||||
30-Sep-15 | $ | 3,384,397 | |||||||||||||||
30-Sep-16 | 3,081,686 | ||||||||||||||||
30-Sep-17 | 3,032,026 | ||||||||||||||||
30-Sep-18 | 3,032,026 | ||||||||||||||||
30-Sep-19 | 2,999,054 | ||||||||||||||||
Thereafter | 10,847,177 | ||||||||||||||||
$ | 26,376,366 |
Note_9_Goodwill_Tables
Note 9 - Goodwill (Tables) | 3 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Disclosure Text Block Supplement [Abstract] | ' | ||||||||
Schedule of Goodwill [Table Text Block] | ' | ||||||||
As of September 30, | As of June 30, | ||||||||
2014 | 2014 | ||||||||
NetSol PK | $ | 1,166,610 | $ | 1,166,610 | |||||
NTE | 3,471,814 | 3,471,814 | |||||||
VLS | 214,044 | 214,044 | |||||||
NTA | 4,664,100 | 4,664,100 | |||||||
Total | $ | 9,516,568 | $ | 9,516,568 |
Note_10_Accounts_Payable_and_A1
Note 10 - Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
Schedule of Accounts Payable and Accrued Liabilities [Table Text Block] | ' | ||||||||
As of September 30, | As of June 30, | ||||||||
2014 | 2014 | ||||||||
Accounts Payable | $ | 1,344,466 | $ | 1,642,325 | |||||
Accrued Liabilities | 2,767,466 | 2,956,686 | |||||||
Accrued Payroll | 38,968 | 44,185 | |||||||
Accrued Payroll Taxes | 147,150 | 261,261 | |||||||
Interest Payable | 74,491 | 61,555 | |||||||
Taxes Payable | 177,732 | 165,649 | |||||||
Other Payable | 103,226 | 103,226 | |||||||
Total | $ | 4,653,499 | $ | 5,234,887 |
Note_11_Debts_Tables
Note 11 - Debts (Tables) | 3 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Disclosure Text Block Supplement [Abstract] | ' | |||||||||||||
Schedule of Debt [Table Text Block] | ' | |||||||||||||
As of September 30, 2014 | ||||||||||||||
Name | Total | Current | Long-Term | |||||||||||
Maturities | Maturities | |||||||||||||
D&O Insurance | -1 | $ | 4,855 | $ | 4,855 | $ | - | |||||||
Habib Bank Line of Credit | -2 | - | - | - | ||||||||||
Bank Overdraft Facility | -3 | 104,603 | 104,603 | - | ||||||||||
HSBC Loan | -4 | 714,060 | 336,417 | 377,643 | ||||||||||
Term Finance Facility | -5 | 601,019 | 240,408 | 360,611 | ||||||||||
Loan Payable Bank | -6 | 1,923,262 | 1,923,262 | - | ||||||||||
Loan From Related Party | -7 | 272,190 | 144,322 | 127,868 | ||||||||||
3,619,989 | 2,753,867 | 866,122 | ||||||||||||
Subsidiary Capital Leases | -8 | 983,258 | 458,610 | 524,648 | ||||||||||
$ | 4,603,247 | $ | 3,212,477 | $ | 1,390,770 | |||||||||
As of June 30, 2014 | ||||||||||||||
Name | Total | Current | Long-Term | |||||||||||
Maturities | Maturities | |||||||||||||
D&O Insurance | -1 | $ | 54,547 | $ | 54,547 | $ | - | |||||||
Habib Bank Line of Credit | -2 | 2,438,844 | 2,438,844 | - | ||||||||||
Bank Overdraft Facility | -3 | - | - | - | ||||||||||
HSBC Loan | -4 | 835,899 | 346,138 | 489,761 | ||||||||||
Term Finance Facility | -5 | 632,527 | 253,011 | 379,516 | ||||||||||
Loan Payable Bank | -6 | 2,024,087 | 2,024,087 | - | ||||||||||
Loan From Related Party | -7 | 322,600 | 194,740 | 127,860 | ||||||||||
6,308,504 | 5,311,367 | 997,137 | ||||||||||||
Subsidiary Capital Leases | -8 | 1,014,834 | 479,891 | 534,943 | ||||||||||
$ | 7,323,338 | $ | 5,791,258 | $ | 1,532,080 | |||||||||
Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block] | ' | |||||||||||||
Amount | ||||||||||||||
Minimum Lease Payments | ||||||||||||||
Due FYE 9/30/15 | $ | 571,349 | ||||||||||||
Due FYE 9/30/16 | 403,900 | |||||||||||||
Due FYE 9/30/17 | 144,691 | |||||||||||||
Total Minimum Lease Payments | 1,119,940 | |||||||||||||
Interest Expense relating to future periods | (136,682 | ) | ||||||||||||
Present Value of minimum lease payments | 983,258 | |||||||||||||
Less: Current portion | (458,610 | ) | ||||||||||||
Non-Current portion | $ | 524,648 |
Note_13_Incentive_and_NonStatu1
Note 13 - Incentive and Non-Statutory Stock Option Plan (Tables) | 3 Months Ended | |||||||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||||||||||||||||
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block] | ' | |||||||||||||||||||||||||||
OPTIONS: | ||||||||||||||||||||||||||||
# of shares | Weighted Ave | Weighted | Aggregated | |||||||||||||||||||||||||
Exericse Price | Average | Intrinsic Value | ||||||||||||||||||||||||||
Remaining | ||||||||||||||||||||||||||||
Contractual | ||||||||||||||||||||||||||||
Life (in years) | ||||||||||||||||||||||||||||
Outstanding June 30, 2014 | 757,462 | $ | 6.65 | 2.2 | ||||||||||||||||||||||||
Granted | - | - | ||||||||||||||||||||||||||
Exercised | - | - | ||||||||||||||||||||||||||
Expired / Cancelled | - | - | ||||||||||||||||||||||||||
Outstanding September 30, 2014 | 757,462 | $ | 6.65 | 1.95 | $ | - | ||||||||||||||||||||||
Exercisable, September 30, 2014 | 382,462 | $ | 9.36 | 2.17 | $ | - | ||||||||||||||||||||||
WARRANTS: | ||||||||||||||||||||||||||||
Outstanding and exercisable, June 30, 2014 | 163,124 | $ | 7.29 | 2.2 | ||||||||||||||||||||||||
Granted / adjusted | - | - | ||||||||||||||||||||||||||
Exercised | - | - | ||||||||||||||||||||||||||
Expired | - | - | ||||||||||||||||||||||||||
Outstanding and exercisable, September 30, 2014 | 163,124 | $ | 7.29 | 1.96 | $ | - | ||||||||||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | ' | |||||||||||||||||||||||||||
Exercise Price | Number | Weighted | Weighted | Number | Weighted | Weighted | ||||||||||||||||||||||
Outstanding | Average | Ave | Exercisable | Average | Ave | |||||||||||||||||||||||
Remaining | Exericse | Remaining | Exericse | |||||||||||||||||||||||||
Contractual | Price | Contractual | Price | |||||||||||||||||||||||||
Life | Life | |||||||||||||||||||||||||||
OPTIONS: | ||||||||||||||||||||||||||||
$0.10 | - | $9.90 | 683,462 | 1.99 | $ | 4.77 | 308,462 | 2.32 | $ | 5.86 | ||||||||||||||||||
$10.00 | - | $19.90 | 14,000 | 1.37 | $ | 18.18 | 14,000 | 1.37 | $ | 18.18 | ||||||||||||||||||
$20.00 | - | $29.90 | 60,000 | 1.58 | $ | 25.33 | 60,000 | 1.58 | $ | 25.33 | ||||||||||||||||||
Totals | 757,462 | 1.95 | $ | 6.65 | 382,462 | 2.17 | $ | 9.36 | ||||||||||||||||||||
WARRANTS: | ||||||||||||||||||||||||||||
$5.00 | - | $7.50 | 163,124 | 1.96 | $ | 7.29 | 163,124 | 1.96 | $ | 7.29 | ||||||||||||||||||
Totals | 163,124 | 1.96 | $ | 7.29 | 163,124 | 1.96 | $ | 7.29 | ||||||||||||||||||||
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | ' | |||||||||||||||||||||||||||
# of shares | Weighted | |||||||||||||||||||||||||||
Average Grant | ||||||||||||||||||||||||||||
Date Fair | ||||||||||||||||||||||||||||
Value ($) | ||||||||||||||||||||||||||||
Unvested, June 30, 2013 | - | - | ||||||||||||||||||||||||||
Granted | 337,899 | $ | 5.78 | |||||||||||||||||||||||||
Vested | (105,899 | ) | $ | 10 | ||||||||||||||||||||||||
Unvested, June 30, 2014 | 232,000 | $ | 3.88 | |||||||||||||||||||||||||
Granted | 92,500 | $ | 2.9 | |||||||||||||||||||||||||
Vested | (82,625 | ) | $ | 3.61 | ||||||||||||||||||||||||
Unvested, September 30, 2014 | 241,875 | $ | 3.6 |
Note_15_Operating_Segments_Tab
Note 15 - Operating Segments (Tables) | 3 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Segment Reporting [Abstract] | ' | ||||||||
Reconciliation of Assets from Segment to Consolidated [Table Text Block] | ' | ||||||||
As of September 30, | As of June 30, | ||||||||
2014 | 2014 | ||||||||
Identifiable assets: | |||||||||
Corporate headquarters | $ | 3,400,548 | $ | 5,150,823 | |||||
North America | 6,472,549 | 7,406,631 | |||||||
Europe | 6,087,158 | 6,169,265 | |||||||
Asia - Pacific | 76,523,302 | 76,176,555 | |||||||
Consolidated | $ | 92,483,557 | $ | 94,903,274 | |||||
Reconciliation of Revenue from Segments to Consolidated [Table Text Block] | ' | ||||||||
For the Three Months | |||||||||
Ended September 30, | |||||||||
2014 | 2013 | ||||||||
Revenues from unaffiliated customers: | |||||||||
North America | $ | 1,166,777 | $ | 1,081,618 | |||||
Europe | 1,850,013 | 1,208,502 | |||||||
Asia - Pacific | 5,814,361 | 5,663,079 | |||||||
8,831,151 | 7,953,199 | ||||||||
Revenue from affiliated customers | |||||||||
Asia - Pacific | 1,396,000 | 967,543 | |||||||
Consolidated | $ | 10,227,151 | $ | 8,920,742 | |||||
Intercompany revenue | |||||||||
Europe | $ | 130,528 | $ | 149,396 | |||||
Asia - Pacific | 281,119 | 303,078 | |||||||
Eliminated | $ | 411,647 | $ | 452,474 | |||||
Net income (loss) after taxes and before non-controlling interest: | |||||||||
Corporate headquarters | $ | (992,556 | ) | $ | (1,149,908 | ) | |||
North America | 265,723 | 193,201 | |||||||
Europe | 16,826 | (553,718 | ) | ||||||
Asia - Pacific | (1,519,216 | ) | 1,280,418 | ||||||
Discontinued operation | - | (201,249 | ) | ||||||
Consolidated | $ | (2,229,223 | ) | $ | (431,256 | ) | |||
Reconciliation of Other Significant Reconciling Items from Segments to Consolidated [Table Text Block] | ' | ||||||||
For the Three Months | |||||||||
Ended September 30, | |||||||||
2014 | 2013 | ||||||||
Capital expenditures: | |||||||||
Corporate headquarters | $ | 1,786 | $ | 2,097 | |||||
North America | 4,866 | 7,987 | |||||||
Europe | 42,918 | 77,580 | |||||||
Asia - Pacific | 981,558 | 2,603,402 | |||||||
Consolidated | $ | 1,031,128 | $ | 2,691,066 |
Note_17_NonControlling_Interes1
Note 17 - Non-Controlling Interest in Subsidiary (Tables) | 3 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Noncontrolling Interest [Abstract] | ' | ||||||||
Schedule Of Non-Controlling Interests [Table Text Block] | ' | ||||||||
SUBSIDIARY | Non Controlling | Non-Controlling | |||||||
Interest % | Interest at | ||||||||
30-Sep-14 | |||||||||
NetSol PK | 36.62 | % | $ | 12,640,931 | |||||
NetSol-Innovation | 49.9 | % | 1,797,252 | ||||||
VLS, VLHS & VLSIL Combined | 49 | % | 224,657 | ||||||
Total | $ | 14,662,840 | |||||||
SUBSIDIARY | Non Controlling | Non-Controlling | |||||||
Interest % | Interest at | ||||||||
30-Jun-14 | |||||||||
NetSol PK | 36.62 | % | $ | 14,317,233 | |||||
NetSol-Innovation | 49.9 | % | 1,546,920 | ||||||
VLS, VLHS & VLSIL Combined | 49 | % | 260,359 | ||||||
Total | $ | 16,124,512 |
Note_3_Earnings_Per_Share_Deta
Note 3 - Earnings Per Share (Details) - Potential Dilutive Shares Excluded from the Calculation | 3 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Potential dilutive shares | 920,586 | 465,586 |
Equity Option [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Potential dilutive shares | 757,462 | 302,462 |
Warrant [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Potential dilutive shares | 163,124 | 163,124 |
Note_4_Other_Comprehensive_Inc1
Note 4 - Other Comprehensive Income and Foreign Currency (Details) (USD $) | Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 |
NetSol [Member] | NetSol [Member] | |||
Note 4 - Other Comprehensive Income and Foreign Currency (Details) [Line Items] | ' | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | ($16,934,777) | ($14,979,223) | ' | ' |
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax | ' | ' | ($1,955,554) | ($2,202,182) |
Note_5_Related_Party_Transacti1
Note 5 - Related Party Transactions (Details) (USD $) | 3 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | |
Note 5 - Related Party Transactions (Details) [Line Items] | ' | ' | ' |
Revenue from Related Parties | $1,396,000 | $967,543 | ' |
Accounts Receivable, Related Parties | 2,603,418 | ' | 2,232,610 |
NetSol Innovation [Member] | ' | ' | ' |
Note 5 - Related Party Transactions (Details) [Line Items] | ' | ' | ' |
Revenue from Related Parties | $1,396,000 | $967,543 | ' |
Note_6_Other_Current_Assets_De
Note 6 - Other Current Assets (Details) - Other Current Assets (USD $) | Sep. 30, 2014 | Jun. 30, 2014 | ||
Other Current Assets [Abstract] | ' | ' | ||
Prepaid Expenses | $604,132 | $450,451 | ||
Advance Income Tax | 789,444 | 918,300 | ||
Employee Advances | 29,173 | 46,730 | ||
Security Deposits | 137,814 | 189,905 | ||
Tender Money Receivable | 77,345 | 81,420 | ||
Other Receivables | 250,273 | 645,397 | ||
Other Assets | 421,917 | 430,508 | ||
Due From Related Party | 95,168 | [1] | 95,168 | [1] |
Total | $2,405,266 | $2,857,879 | ||
[1] | Due from related party as of September 30, 2014 and June 30, 2014 is a receivable from Atheeb NetSol Saudi Company Limited. |
Note_7_Property_and_Equipment_1
Note 7 - Property and Equipment (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | |
Property, Plant and Equipment [Abstract] | ' | ' | ' |
Depreciation | $1,368,707 | $997,560 | ' |
Cost of Services, Depreciation | 918,892 | 613,110 | ' |
Interest Costs Capitalized | $693,367 | ' | $664,614 |
Note_7_Property_and_Equipment_2
Note 7 - Property and Equipment (Details) - Property and Equipment, Net (USD $) | Sep. 30, 2014 | Jun. 30, 2014 |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant, and equipment | $44,298,487 | $45,660,516 |
Accumulated Depreciation | -16,446,077 | -15,939,388 |
Property and Equipment, Net | 27,852,410 | 29,721,128 |
Office Equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant, and equipment | 2,604,368 | 2,628,814 |
Computer Equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant, and equipment | 26,325,684 | 27,215,091 |
Assets Held under Capital Leases [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant, and equipment | 1,946,650 | 1,861,445 |
Building [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant, and equipment | 5,947,499 | 6,259,290 |
Land [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant, and equipment | 3,184,379 | 3,351,316 |
Other Capitalized Property Plant and Equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant, and equipment | 2,860,802 | 2,812,181 |
Automobiles [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant, and equipment | 922,681 | 999,277 |
Leasehold Improvements [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant, and equipment | $506,424 | $533,102 |
Note_7_Property_and_Equipment_3
Note 7 - Property and Equipment (Details) - Fixed Assets Under Capital Leases (USD $) | Sep. 30, 2014 | Jun. 30, 2014 |
Capital Leased Assets [Line Items] | ' | ' |
Assets under capital leases | $1,946,650 | $1,861,445 |
Total | 1,946,650 | 1,861,445 |
Less: Accumulated Depreciation, Net | -525,387 | -469,336 |
1,421,263 | 1,392,109 | |
Computer Equipment [Member] | ' | ' |
Capital Leased Assets [Line Items] | ' | ' |
Assets under capital leases | 780,977 | 731,354 |
Total | 780,977 | 731,354 |
Furniture and Fixtures [Member] | ' | ' |
Capital Leased Assets [Line Items] | ' | ' |
Assets under capital leases | 347,966 | 280,184 |
Total | 347,966 | 280,184 |
Vehicles [Member] | ' | ' |
Capital Leased Assets [Line Items] | ' | ' |
Assets under capital leases | 817,707 | 849,907 |
Total | $817,707 | $849,907 |
Note_8_Intangible_Assets_Detai
Note 8 - Intangible Assets (Details) (USD $) | Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 |
Product Licenses [Member] | Product Licenses [Member] | Customer Lists [Member] | Customer Lists [Member] | Technology-Based Intangible Assets [Member] | Technology [Member] | Technology [Member] | |||
Note 8 - Intangible Assets (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Finite-Lived License Agreements, Gross | ' | ' | $26,277,038 | ' | ' | ' | ' | ' | ' |
Finite-Lived Intangible Asset, Useful Life | ' | ' | '9 years 6 months | ' | '5 years | ' | '5 years | ' | ' |
Amortization of Intangible Assets | ' | ' | 882,675 | 433,559 | 13,368 | 30,048 | ' | 117,590 | 12,119 |
Finite-Lived Intangible Assets, Net | $26,376,366 | $28,803,018 | ' | ' | $99,328 | ' | ' | ' | ' |
Finite-Lived Intangible Assets, Remaining Amortization Period | ' | ' | ' | ' | '2 years | ' | ' | ' | ' |
Note_8_Intangible_Assets_Detai1
Note 8 - Intangible Assets (Details) - Intangible Assets (USD $) | 3 Months Ended | |
Sep. 30, 2014 | Jun. 30, 2014 | |
Note 8 - Intangible Assets (Details) - Intangible Assets [Line Items] | ' | ' |
Intangible Assets - June 30, 2014 - Cost | $54,927,447 | ' |
Effect of Translation Adjustment | -2,776,099 | ' |
Accumulated Amortization | -25,774,982 | ' |
Net Balance - September 30, 2014 | 26,376,366 | 28,803,018 |
Licensing Agreements [Member] | ' | ' |
Note 8 - Intangible Assets (Details) - Intangible Assets [Line Items] | ' | ' |
Intangible Assets - June 30, 2014 - Cost | 48,632,368 | ' |
Effect of Translation Adjustment | -2,776,099 | ' |
Accumulated Amortization | -19,579,231 | ' |
Net Balance - September 30, 2014 | 26,277,038 | ' |
Customer Lists [Member] | ' | ' |
Note 8 - Intangible Assets (Details) - Intangible Assets [Line Items] | ' | ' |
Intangible Assets - June 30, 2014 - Cost | ' | 6,052,377 |
Accumulated Amortization | -5,953,049 | ' |
Net Balance - September 30, 2014 | 99,328 | ' |
Technology-Based Intangible Assets [Member] | ' | ' |
Note 8 - Intangible Assets (Details) - Intangible Assets [Line Items] | ' | ' |
Intangible Assets - June 30, 2014 - Cost | ' | 242,702 |
Accumulated Amortization | ($242,702) | ' |
Note_8_Intangible_Assets_Detai2
Note 8 - Intangible Assets (Details) - Estimated Amortization Expense of Intangible Assets Over the Next Five Years (USD $) | Sep. 30, 2014 | Jun. 30, 2014 |
Estimated Amortization Expense of Intangible Assets Over the Next Five Years [Abstract] | ' | ' |
30-Sep-15 | $3,384,397 | ' |
30-Sep-16 | 3,081,686 | ' |
30-Sep-17 | 3,032,026 | ' |
30-Sep-18 | 3,032,026 | ' |
30-Sep-19 | 2,999,054 | ' |
Thereafter | 10,847,177 | ' |
$26,376,366 | $28,803,018 |
Note_9_Goodwill_Details
Note 9 - Goodwill (Details) (USD $) | 3 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Jun. 30, 2014 | |
Disclosure Text Block Supplement [Abstract] | ' | ' |
Goodwill, Impairment Loss | $0 | $0 |
Note_9_Goodwill_Details_Summar
Note 9 - Goodwill (Details) - Summary of Goodwill Acquired (USD $) | Sep. 30, 2014 | Jun. 30, 2014 |
Goodwill [Line Items] | ' | ' |
Goodwill | $9,516,568 | $9,516,568 |
NetSol Omni [Member] | ' | ' |
Goodwill [Line Items] | ' | ' |
Goodwill | 1,166,610 | 1,166,610 |
NTE [Member] | ' | ' |
Goodwill [Line Items] | ' | ' |
Goodwill | 3,471,814 | 3,471,814 |
VLS [Member] | ' | ' |
Goodwill [Line Items] | ' | ' |
Goodwill | 214,044 | 214,044 |
NTA [Member] | ' | ' |
Goodwill [Line Items] | ' | ' |
Goodwill | $4,664,100 | $4,664,100 |
Note_10_Accounts_Payable_and_A2
Note 10 - Accounts Payable and Accrued Expenses (Details) - Accounts Payable and Accrued Expenses (USD $) | Sep. 30, 2014 | Jun. 30, 2014 |
Accounts Payable and Accrued Expenses [Abstract] | ' | ' |
Accounts Payable | $1,344,466 | $1,642,325 |
Accrued Liabilities | 2,767,466 | 2,956,686 |
Accrued Payroll | 38,968 | 44,185 |
Accrued Payroll Taxes | 147,150 | 261,261 |
Interest Payable | 74,491 | 61,555 |
Taxes Payable | 177,732 | 165,649 |
Other Payable | 103,226 | 103,226 |
Total | $4,653,499 | $5,234,887 |
Note_11_Debts_Details
Note 11 - Debts (Details) | Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Feb. 28, 2012 | Sep. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2008 | Jun. 30, 2008 | Sep. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2012 | Oct. 31, 2011 | Oct. 31, 2011 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Oct. 31, 2013 | Oct. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 30, 2014 |
USD ($) | USD ($) | D&O And E&O Liability Insurance [Member] | D&O And E&O Liability Insurance [Member] | Numerator [Member] | Denominator [Member] | Term Finance Facility [Member] | Term Finance Facility [Member] | Term Finance Facility [Member] | Line of Credit [Member] | Line of Credit [Member] | Line of Credit [Member] | Line of Credit [Member] | Letter of Credit [Member] | Overdraft Facility [Member] | Overdraft Facility [Member] | Overdraft Facility [Member] | Overdraft Facility [Member] | NTNA [Member] | NTNA [Member] | NTNA [Member] | NTE [Member] | NTE [Member] | NTE [Member] | NTE [Member] | NTE [Member] | NTE [Member] | NTE [Member] | NetSol PK [Member] | NetSol PK [Member] | NetSol PK [Member] | NetSol PK [Member] | VLS [Member] | VLS [Member] | VLS [Member] | Habib American Bank [Member] | Habib American Bank [Member] | |
NetSol PK [Member] | NetSol PK [Member] | NetSol PK [Member] | NetSol PK [Member] | NetSol PK [Member] | NTNA [Member] | NTNA [Member] | Habib American Bank [Member] | Habib American Bank [Member] | HSBC [Member] | NTE [Member] | NTE [Member] | NTE [Member] | NTE [Member] | Habib American Bank [Member] | Habib American Bank [Member] | Habib American Bank [Member] | HSBC [Member] | HSBC [Member] | HSBC [Member] | HSBC [Member] | HSBC [Member] | Investec [Member] | Investec [Member] | Asakari Bank Limited [Member] | Asakari Bank Limited [Member] | Asakari Bank Limited [Member] | Asakari Bank Limited [Member] | Investec [Member] | Investec [Member] | Investec [Member] | |||||||
Asakari Bank Limited [Member] | Asakari Bank Limited [Member] | Askari Bank [Member] | Askari Bank [Member] | Askari Bank [Member] | Habib American Bank [Member] | Habib American Bank [Member] | USD ($) | USD ($) | USD ($) | HSBC [Member] | HSBC [Member] | HSBC [Member] | HSBC [Member] | USD ($) | USD ($) | GBP (£) | USD ($) | USD ($) | GBP (£) | USD ($) | GBP (£) | USD ($) | USD ($) | PKR | USD ($) | GBP (£) | GBP (£) | ||||||||||
USD ($) | PKR | USD ($) | USD ($) | USD ($) | GBP (£) | ||||||||||||||||||||||||||||||||
Note 11 - Debts (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Interest Rate at Period End | ' | ' | 0.55% | 0.55% | ' | ' | 12.90% | 12.90% | 12.90% | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.90% | 1.90% | ' | ' | ' | ' | ' | ' | 4.10% | 4.10% | ' | ' | ' | ' | 3.13% | 3.13% | ' | 1.50% | 1.50% |
Interest Expense, Debt (in Dollars) | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,588 | $299 | $7,070 | $6,997 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $16,702 | $18,849 | ' | ' | ' | $35,001 | $22,123 | ' | ' | ' | ' | ' | ' | ' |
Long-term Line of Credit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 90,000 | ' | ' | 487,230 | 300,000 | ' | ' | ' | ' | ' | ' | ' | 600,000 | ' | ' | 2,520,000 | ' | 262,500,000 | ' | ' | ' | 258,186 | ' | ' |
Loans Pledged as Collateral (in Dollars) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 90,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Maximum Borrowing Capacity | ' | ' | ' | ' | ' | ' | 1,081,835 | 112,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | 1,624,100 | 1,000,000 | ' | ' | ' | 162,410 | 100,000 | 2,884,893 | ' | 300,000,000 | ' | 243,615 | 150,000 | ' | ' | ' |
Line of Credit Facility, Interest Rate During Period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.75% | 4.75% | ' | ' | ' | ' | ' | 4.00% | 4.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Overdraft Credit Facility Maximum Days Of Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '90 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
OverdraftCredit Facility Minimum Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Acquisition, Percentage of Voting Interests Acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 51.00% | 51.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument Maturity Term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Periodic Payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 29,916 | 18,420 | ' | ' | ' | 14,091 | 8,676 | ' | ' | ' | ' | 121,808 | 75,000 | ' | ' | ' |
Debt Instrument, Basis Spread on Variable Rate | ' | ' | ' | ' | ' | ' | 2.75% | 2.75% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.50% | 3.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Service Coverage Minimum Percentage Of Debt Service Cost | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 150.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Collateral Amount | ' | ' | ' | ' | ' | ' | 5,580,000 | 580,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Interest Rate, Effective Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7.50% | ' | ' | 9.40% | ' | ' | ' | ' | ' |
Long Debt Equity Ratio | ' | ' | ' | ' | 60 | 40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current Ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | '1 year | ' | ' | ' | ' | '2 years | '2 years | '7 months | ' | ' |
Long-term Debt, Excluding Current Maturities (in Pounds) | 1,390,770 | 1,532,080 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 127,868 | ' | ' |
Long-term Debt, Current Maturities (in Pounds) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | £ 130,318 | ' | ' |
Note_11_Debts_Details_Notes_Pa
Note 11 - Debts (Details) - Notes Payable (USD $) | Sep. 30, 2014 | Jun. 30, 2014 | ||
Note 11 - Debts (Details) - Notes Payable [Line Items] | ' | ' | ||
Total | $3,619,989 | $6,308,504 | ||
Current Maturities | 2,753,867 | 5,311,367 | ||
Long-Term Maturities | 866,122 | 997,137 | ||
Current Maturities | 458,610 | ' | ||
Long-Term Maturities | 524,648 | ' | ||
Total | 4,603,247 | 7,323,338 | ||
Current Maturities | 3,212,477 | 5,791,258 | ||
Long-Term Maturities | 1,390,770 | 1,532,080 | ||
D & O Insurance [Member] | ' | ' | ||
Note 11 - Debts (Details) - Notes Payable [Line Items] | ' | ' | ||
Total | 4,855 | [1] | 54,547 | [1] |
Current Maturities | 4,855 | [1] | 54,547 | [1] |
Long-Term Maturities | ' | [1] | ' | [1] |
Habib Bank Line Of Credit [Member] | ' | ' | ||
Note 11 - Debts (Details) - Notes Payable [Line Items] | ' | ' | ||
Total | ' | [2] | 2,438,844 | [2] |
Current Maturities | ' | [2] | 2,438,844 | [2] |
Long-Term Maturities | ' | [2] | ' | [2] |
Bank Overdraft Facility [Member] | ' | ' | ||
Note 11 - Debts (Details) - Notes Payable [Line Items] | ' | ' | ||
Total | 104,603 | [3] | ' | [3] |
Current Maturities | 104,603 | [3] | ' | [3] |
Long-Term Maturities | ' | [3] | ' | [3] |
HSBC Loan [Member] | ' | ' | ||
Note 11 - Debts (Details) - Notes Payable [Line Items] | ' | ' | ||
Total | 714,060 | [4] | 835,899 | [4] |
Current Maturities | 336,417 | [4] | 346,138 | [4] |
Long-Term Maturities | 377,643 | [4] | 489,761 | [4] |
Term Finance Facility [Member] | ' | ' | ||
Note 11 - Debts (Details) - Notes Payable [Line Items] | ' | ' | ||
Total | 601,019 | [5] | 632,527 | [5] |
Current Maturities | 240,408 | [5] | 253,011 | [5] |
Long-Term Maturities | 360,611 | [5] | 379,516 | [5] |
Loan Payable Bank [Member] | ' | ' | ||
Note 11 - Debts (Details) - Notes Payable [Line Items] | ' | ' | ||
Total | 1,923,262 | [6] | 2,024,087 | [6] |
Current Maturities | 1,923,262 | [6] | 2,024,087 | [6] |
Long-Term Maturities | ' | [6] | ' | [6] |
Loan From Related Party [Member] | ' | ' | ||
Note 11 - Debts (Details) - Notes Payable [Line Items] | ' | ' | ||
Total | 272,190 | [7] | 322,600 | [7] |
Current Maturities | 144,322 | [7] | 194,740 | [7] |
Long-Term Maturities | 127,868 | [7] | 127,860 | [7] |
Subsidiary Capital Leases [Member] | ' | ' | ||
Note 11 - Debts (Details) - Notes Payable [Line Items] | ' | ' | ||
Total | 983,258 | [8] | 1,014,834 | [8] |
Current Maturities | 458,610 | [8] | 479,891 | [8] |
Long-Term Maturities | $524,648 | [8] | $534,943 | [8] |
[1] | The Company finances Directors' and Officers' ("D&O") liability insurance as well as Errors and Omissions ("E&O") liability insurance, for which the total balances are renewed on an annual basis, are recorded in current maturities. The interest rate on the insurance financing was 0.55% as of September 30, 2014 and June 30, 2014, respectively. | |||
[2] | In April 2008, the Company entered into an agreement with Habib American Bank to secure a line of credit to be collateralized by certificates of deposit held at the bank. The interest rate on this line of credit is variable, and was 1.5% as of September 30, 2014 and June 30, 2014, respectively. Interest expense for the three months ended September 30, 2014 and 2013 was $7,070 and $6,997, respectively.In February 2012, the Company entered into agreement with HSBC for the issuance of stand by letter of credit worth $90,000 in favor of landlord against the new office space. The Company has deposited $90,000 in a saving account with HSBC as collateral against this letter of credit.In June 2012, the Company's subsidiary, NTA, entered into an agreement with Habib American Bank to secure a line of credit up to $500,000 to be collateralized by certificates of deposit of the same value held at the bank. The interest rate on this line of credit is variable and was 1.9% and 1.9% as of September 30, 2014 and June 30, 2014, respectively. Interest expense for the three months ended September 30, 2014 and 2013 was $1,588 and $299, respectively.Amounts of both lines of credit were paid down during the period. | |||
[3] | During the year ended June 30, 2008, the Company's subsidiary, NTE, entered into an overdraft facility with HSBC Bank plc whereby the bank would cover any overdrafts up to 300,000, or approximately $487,230. The annual interest rate was 4.75% as of September 30, 2014 and June 30, 2014, respectively.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 September 30, 2014, NTE was in compliance with this covenant. | |||
[4] | In October 2011, the Company's subsidiary, NTE, entered into a loan agreement with HSBC Bank to finance the acquisition of 51% in VirtualLeasing Services Limited. HSBC Bank guaranteed the loan up to a limit of 1,000,000, or approximately $1,624,100 for a period of 5 years with monthly payments of 18,420, or approximately $29,916. The interest rate was 4% which is 3.5% above the bank sterling base rate. The loan is securitized against debenture comprising of fixed and floating charges over all the assets and undertakings of NTE including all present and future freehold and leasehold property, book and other debts, chattels, goodwill and uncalled capital, both present and future. Interest expense for the three months ended September 30, 2014 and 2013 was $16,702 and $18,849, respectively.This facility requires that NTE's adjusted tangible net worth to be not be less than 600,000. For this purpose, adjusted tangible net worth meansshareholders' funds less intangible assets plus non-redeemable preference shares. In addition, the facility requires NTE's cash debt service coverageto not fall below 150% of the aggregate debt service cost. As of September 30, 2014, NTE was in compliance with this covenant. | |||
[5] | The Company's subsidiary, NetSol PK, entered into two different term finance facilities from Askari Bank to finance the construction of a new building. The total aggregate amount of these facilities is Rs. 112,500,000, or approximately $1,081,835, (secured by the first charge of Rs. 580 million or approximately $5.58 million over the land, building and equipment of the company). The interest rate was 12.90% as of September 30, 2014 and June 30, 2014, respectively, which is 2.75% above the six-month Karachi Inter Bank Offering Rate. | |||
[6] | The Company's subsidiary, NetSol PK, has an export refinance facility with Askari Bank Limited, secured by the Company's assets. This is a revolving loan that matures every six months. Total facility amount is Rs. 300,000,000 or $2,884,893. The interest rate for the loans was 7.5% and 9.4% at September 30, 2014 and June 30, 2014 respectively. Interest expense for the three months ended September 30, 2014 and 2013 was $35,001 and $22,123, respectively.Both term and export refinance facilities from Askari Bank Limited amounting to Rupees 262.5 million ($2.52 million) require NetSol PK to maintain a long term debt equity ratio of 60:40 and the current ratio of 1:1. As of September 30, 2014, NetSol PK was in compliance with this covenant. | |||
[7] | In October 2013, the Company's subsidiary, NTE, entered into a loan agreement with Investec, a related party, to finance VLS. The loan amount was 100,000, or approximately $162,410, for a period of 1 year with monthly payments of 8,676, or approximately $14,091. The interest rate was 4.1%.In March 2014, the Company's subsidiary, VLS, entered into a loan agreement with Investec. The loan amount was 150,000, or approximately $243,615, for a period of two years with annual payments of 75,000, or approximately $121,808. The interest rate was 3.13%. As of September 30, 2014, the subsidiary has used this facility up to $258,186 including interest due, of which $127,868 was shown as long term and $130,318 as current maturity, including seven months of accrued interest. | |||
[8] | The Company leases various fixed assets under capital lease arrangements expiring in various years through 2018. The assets and liabilities under capital 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 capital leases is included in depreciation expense for the three months ended September 30, 2014 and 2013. |
Note_11_Debts_Details_Minimum_
Note 11 - Debts (Details) - Minimum Future Lease Payments Under Capital Lease (USD $) | Sep. 30, 2014 |
Minimum Lease Payments | ' |
Due FYE 9/30/15 | $571,349 |
Due FYE 9/30/16 | 403,900 |
Due FYE 9/30/17 | 144,691 |
Total Minimum Lease Payments | 1,119,940 |
Interest Expense relating to future periods | -136,682 |
Present Value of minimum lease payments | 983,258 |
Less: Current portion | -458,610 |
Non-Current portion | $524,648 |
Note_12_Stockholders_Equity_De
Note 12 - Stockholders' Equity (Details) (USD $) | 3 Months Ended | 0 Months Ended | 3 Months Ended | ||||
Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Oct. 10, 2014 | Sep. 19, 2014 | Sep. 19, 2014 | Sep. 30, 2014 | |
Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock [Member] | Restricted Stock [Member] | Restricted Stock [Member] | Employees [Member] | ||
Officer [Member] | Director [Member] | Subsequent Event [Member] | |||||
Note 12 - Stockholders' Equity (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period (in Shares) | ' | 17,500 | 1,726 | ' | ' | ' | 9,500 |
Allocated Share-based Compensation Expense | ' | $152,900 | $18,433 | ' | ' | ' | $87,860 |
Proceeds from Issuance of Common Stock | 850,000 | ' | ' | ' | 850,000 | ' | ' |
Stock Issued During Period, Value, Restricted Stock Award, Gross | ' | ' | ' | $298,245 | ' | ' | ' |
Shares Issued, Price Per Share (in Dollars per share) | ' | ' | ' | ' | ' | $2.85 | ' |
Note_13_Incentive_and_NonStatu2
Note 13 - Incentive and Non-Statutory Stock Option Plan (Details) (USD $) | 3 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Employee Stock Option [Member] | ' | ' |
Note 13 - Incentive and Non-Statutory Stock Option Plan (Details) [Line Items] | ' | ' |
Allocated Share-based Compensation Expense | $155,622 | ' |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | 466,867 | ' |
Stock Grants [Member] | ' | ' |
Note 13 - Incentive and Non-Statutory Stock Option Plan (Details) [Line Items] | ' | ' |
Allocated Share-based Compensation Expense | 297,923 | 232,012 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $870,848 | ' |
Note_13_Incentive_and_NonStatu3
Note 13 - Incentive and Non-Statutory Stock Option Plan (Details) - Option and Warrant Activity (USD $) | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' | ' |
Outstanding June 30, 2014 | '1 year 346 days | ' | ' |
Outstanding September 30, 2014 | 757,462 | ' | ' |
Outstanding September 30, 2014 | $6.65 | ' | ' |
Outstanding September 30, 2014 | '1 year 346 days | ' | ' |
Exercisable, September 30, 2014 | 382,462 | 382,462 | ' |
Exercisable, September 30, 2014 | $9.36 | $9.36 | ' |
Exercisable, September 30, 2014 | '2 years 62 days | '2 years 62 days | ' |
WARRANTS: | ' | ' | ' |
# of shares | 163,124 | 163,124 | ' |
Weighted Average Exericse Price | ' | $7.29 | $7.29 |
Weighted Average Remaining Contractual Life (in years) | '1 year 350 days | '2 years 73 days | ' |
Warrant [Member] | ' | ' | ' |
WARRANTS: | ' | ' | ' |
# of shares | 163,124 | ' | ' |
Weighted Average Exericse Price | $7.29 | ' | $7.29 |
Weighted Average Remaining Contractual Life (in years) | '1 year 350 days | ' | ' |
Employee Stock Option [Member] | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' | ' |
Outstanding June 30, 2014 | 757,462 | ' | ' |
Outstanding June 30, 2014 | $6.65 | ' | ' |
Outstanding June 30, 2014 | '2 years 73 days | ' | ' |
Outstanding September 30, 2014 | '2 years 73 days | ' | ' |
Note_13_Incentive_and_NonStatu4
Note 13 - Incentive and Non-Statutory Stock Option Plan (Details) - Stock Options and Warrants Outstanding and Exercisable (USD $) | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | |
Note 13 - Incentive and Non-Statutory Stock Option Plan (Details) - Stock Options and Warrants Outstanding and Exercisable [Line Items] | ' | ' | ' |
Number Outstanding (in Shares) | 757,462 | ' | ' |
Weighted Average Remaining Contractual Life | '1 year 346 days | ' | ' |
Weighted Ave Exericse Price | $6.65 | ' | ' |
Number Exercisable (in Shares) | 382,462 | 382,462 | ' |
Weighted Average Remaining Contractual Life | '2 years 62 days | '2 years 62 days | ' |
Weighted Ave Exericse Price | $9.36 | $9.36 | ' |
Number Outstanding (in Shares) | 163,124 | 163,124 | ' |
Weighted Average Remaining Contractual Life | '1 year 350 days | '2 years 73 days | ' |
Weighted Ave Exericse Price | $7.29 | ' | $7.29 |
Number Exercisable (in Shares) | 163,124 | ' | ' |
Weighted Average Remaining Contractual Life | '1 year 350 days | ' | ' |
Weighted Ave Exericse Price | $7.29 | ' | ' |
Warrant [Member] | ' | ' | ' |
Note 13 - Incentive and Non-Statutory Stock Option Plan (Details) - Stock Options and Warrants Outstanding and Exercisable [Line Items] | ' | ' | ' |
Exercise Price, Lower | $5 | ' | ' |
Exercise Price, Upper | $7.50 | ' | ' |
Number Outstanding (in Shares) | 163,124 | ' | ' |
Weighted Average Remaining Contractual Life | '1 year 350 days | ' | ' |
Weighted Ave Exericse Price | $7.29 | $7.29 | ' |
Number Exercisable (in Shares) | 163,124 | ' | ' |
Weighted Average Remaining Contractual Life | '1 year 350 days | ' | ' |
Weighted Ave Exericse Price | $7.29 | ' | ' |
Price Range 01 [Member] | ' | ' | ' |
Note 13 - Incentive and Non-Statutory Stock Option Plan (Details) - Stock Options and Warrants Outstanding and Exercisable [Line Items] | ' | ' | ' |
Exercise Price, Lower | $0.10 | ' | ' |
Exercise Price, Upper | $9.90 | ' | ' |
Number Outstanding (in Shares) | 683,462 | ' | ' |
Weighted Average Remaining Contractual Life | '1 year 361 days | ' | ' |
Weighted Ave Exericse Price | $4.77 | ' | ' |
Number Exercisable (in Shares) | 308,462 | ' | ' |
Weighted Average Remaining Contractual Life | '2 years 116 days | ' | ' |
Weighted Ave Exericse Price | $5.86 | ' | ' |
Price Range 02 [Member] | ' | ' | ' |
Note 13 - Incentive and Non-Statutory Stock Option Plan (Details) - Stock Options and Warrants Outstanding and Exercisable [Line Items] | ' | ' | ' |
Exercise Price, Lower | $10 | ' | ' |
Exercise Price, Upper | $19.90 | ' | ' |
Number Outstanding (in Shares) | 14,000 | ' | ' |
Weighted Average Remaining Contractual Life | '1 year 135 days | ' | ' |
Weighted Ave Exericse Price | $18.18 | ' | ' |
Number Exercisable (in Shares) | 14,000 | ' | ' |
Weighted Average Remaining Contractual Life | '1 year 135 days | ' | ' |
Weighted Ave Exericse Price | $18.18 | ' | ' |
Price Range 03 [Member] | ' | ' | ' |
Note 13 - Incentive and Non-Statutory Stock Option Plan (Details) - Stock Options and Warrants Outstanding and Exercisable [Line Items] | ' | ' | ' |
Exercise Price, Lower | $20 | ' | ' |
Exercise Price, Upper | $29.90 | ' | ' |
Number Outstanding (in Shares) | 60,000 | ' | ' |
Weighted Average Remaining Contractual Life | '1 year 211 days | ' | ' |
Weighted Ave Exericse Price | $25.33 | ' | ' |
Number Exercisable (in Shares) | 60,000 | ' | ' |
Weighted Average Remaining Contractual Life | '1 year 211 days | ' | ' |
Weighted Ave Exericse Price | $25.33 | ' | ' |
Note_13_Incentive_and_NonStatu5
Note 13 - Incentive and Non-Statutory Stock Option Plan (Details) - Summary of Stock Grants Awarded as Compensation (USD $) | 3 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Jun. 30, 2014 | |
Summary of Stock Grants Awarded as Compensation [Abstract] | ' | ' |
# of Shares | 241,875 | 232,000 |
Weighted Average Grant Date Fair Value ($) | $3.60 | $3.88 |
# of Shares | 92,500 | 337,899 |
Weighted Average Grant Date Fair Value ($) | $2.90 | $5.78 |
# of Shares | -82,625 | -105,899 |
Weighted Average Grant Date Fair Value ($) | $3.61 | $10 |
Note_15_Operating_Segments_Det
Note 15 - Operating Segments (Details) | 3 Months Ended |
Sep. 30, 2014 | |
Segment Reporting [Abstract] | ' |
Number of Operating Segments | 3 |
Note_15_Operating_Segments_Det1
Note 15 - Operating Segments (Details) - Identifiable Assets (USD $) | Sep. 30, 2014 | Jun. 30, 2014 |
Identifiable assets: | ' | ' |
Identifiable Assets | $92,483,557 | $94,903,274 |
Corporate, Non-Segment [Member] | ' | ' |
Identifiable assets: | ' | ' |
Identifiable Assets | 3,400,548 | 5,150,823 |
North America [Member] | ' | ' |
Identifiable assets: | ' | ' |
Identifiable Assets | 6,472,549 | 7,406,631 |
Europe [Member] | ' | ' |
Identifiable assets: | ' | ' |
Identifiable Assets | 6,087,158 | 6,169,265 |
Asia Pacific [Member] | ' | ' |
Identifiable assets: | ' | ' |
Identifiable Assets | $76,523,302 | $76,176,555 |
Note_15_Operating_Segments_Det2
Note 15 - Operating Segments (Details) - Operating Information (USD $) | 3 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Revenues from unaffiliated customers: | ' | ' |
Revenues | $10,227,151 | $8,920,742 |
Net income (loss) after taxes and before non-controlling interest: | ' | ' |
Net Income Loss After Taxes and Before Controlling Interest | -2,229,223 | -431,256 |
Discontinued operation | ' | -201,249 |
Unaffiliated Customers [Member] | North America [Member] | ' | ' |
Revenues from unaffiliated customers: | ' | ' |
Revenues | 1,166,777 | 1,081,618 |
Unaffiliated Customers [Member] | Europe [Member] | ' | ' |
Revenues from unaffiliated customers: | ' | ' |
Revenues | 1,850,013 | 1,208,502 |
Unaffiliated Customers [Member] | Asia Pacific [Member] | ' | ' |
Revenues from unaffiliated customers: | ' | ' |
Revenues | 5,814,361 | 5,663,079 |
Unaffiliated Customers [Member] | ' | ' |
Revenues from unaffiliated customers: | ' | ' |
Revenues | 8,831,151 | 7,953,199 |
Affiliated Customers [Member] | Asia Pacific [Member] | ' | ' |
Revenues from unaffiliated customers: | ' | ' |
Revenues | 1,396,000 | 967,543 |
Consolidated [Member] | ' | ' |
Revenues from unaffiliated customers: | ' | ' |
Revenues | 10,227,151 | 8,920,742 |
Intersegment Eliminations [Member] | Europe [Member] | ' | ' |
Revenues from unaffiliated customers: | ' | ' |
Revenues | 130,528 | 149,396 |
Intersegment Eliminations [Member] | Asia Pacific [Member] | ' | ' |
Revenues from unaffiliated customers: | ' | ' |
Revenues | 281,119 | 303,078 |
Intersegment Eliminations [Member] | ' | ' |
Revenues from unaffiliated customers: | ' | ' |
Revenues | 411,647 | 452,474 |
Discontinued Operations [Member] | ' | ' |
Net income (loss) after taxes and before non-controlling interest: | ' | ' |
Discontinued operation | ' | -201,249 |
North America [Member] | ' | ' |
Net income (loss) after taxes and before non-controlling interest: | ' | ' |
Net Income Loss After Taxes and Before Controlling Interest | 265,723 | 193,201 |
Europe [Member] | ' | ' |
Net income (loss) after taxes and before non-controlling interest: | ' | ' |
Net Income Loss After Taxes and Before Controlling Interest | 16,826 | -553,718 |
Asia Pacific [Member] | ' | ' |
Net income (loss) after taxes and before non-controlling interest: | ' | ' |
Net Income Loss After Taxes and Before Controlling Interest | -1,519,216 | 1,280,418 |
Corporate Headquarters [Member] | ' | ' |
Net income (loss) after taxes and before non-controlling interest: | ' | ' |
Net Income Loss After Taxes and Before Controlling Interest | ($992,556) | ($1,149,908) |
Note_15_Operating_Segments_Det3
Note 15 - Operating Segments (Details) - Capital Expenditure (USD $) | 3 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Capital expenditures: | ' | ' |
Capital expenditures | $1,031,128 | $2,691,066 |
Corporate Headquarters [Member] | ' | ' |
Capital expenditures: | ' | ' |
Capital expenditures | 1,786 | 2,097 |
North America [Member] | ' | ' |
Capital expenditures: | ' | ' |
Capital expenditures | 4,866 | 7,987 |
Europe [Member] | ' | ' |
Capital expenditures: | ' | ' |
Capital expenditures | 42,918 | 77,580 |
Asia Pacific [Member] | ' | ' |
Capital expenditures: | ' | ' |
Capital expenditures | $981,558 | $2,603,402 |
Note_16_Discontinued_Operation1
Note 16 - Discontinued Operations (Details) (Vroozi [Member], USD $) | 1 Months Ended | 3 Months Ended |
Mar. 31, 2014 | Sep. 30, 2014 | |
Note 16 - Discontinued Operations (Details) [Line Items] | ' | ' |
Disposal Group Including Discontinued Operation Percentage of Shares Sold | 100.00% | ' |
Disposal Group Including Discontinued Operations Price Sold | $2,716,050 | ' |
Proceeds from Divestiture of Businesses | 1,810,700 | 452,675 |
Disposal Group Including Discontinued Operation Note Receivable | 452,675 | ' |
Contingent Upon Future Events [Member] | ' | ' |
Note 16 - Discontinued Operations (Details) [Line Items] | ' | ' |
Disposal Group Including Discontinued Operation Note Receivable | $452,675 | ' |
Note_17_NonControlling_Interes2
Note 17 - Non-Controlling Interest in Subsidiary (Details) - Non-Controlling Interests in Subsidiaries (USD $) | Sep. 30, 2014 | Jun. 30, 2014 |
Note 17 - Non-Controlling Interest in Subsidiary (Details) - Non-Controlling Interests in Subsidiaries [Line Items] | ' | ' |
Non-Controlling Interest | $14,662,840 | $16,124,512 |
NetSol PK [Member] | ' | ' |
Note 17 - Non-Controlling Interest in Subsidiary (Details) - Non-Controlling Interests in Subsidiaries [Line Items] | ' | ' |
Non Controlling Interest % | 36.62% | 36.62% |
Non-Controlling Interest | 12,640,931 | 14,317,233 |
NetSol Innovation [Member] | ' | ' |
Note 17 - Non-Controlling Interest in Subsidiary (Details) - Non-Controlling Interests in Subsidiaries [Line Items] | ' | ' |
Non Controlling Interest % | 49.90% | 49.90% |
Non-Controlling Interest | 1,797,252 | 1,546,920 |
VLS, VLHS & VLSIL Combined [Member] | ' | ' |
Note 17 - Non-Controlling Interest in Subsidiary (Details) - Non-Controlling Interests in Subsidiaries [Line Items] | ' | ' |
Non Controlling Interest % | 49.00% | 49.00% |
Non-Controlling Interest | $224,657 | $260,359 |