Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 30, 2017 | Nov. 06, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | NETSOL TECHNOLOGIES INC | |
Entity Central Index Key | 1,039,280 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 11,333,129 | |
Trading Symbol | NTWK | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2016 |
Current assets: | ||||
Cash and cash equivalents | $ 8,554,815 | $ 14,172,954 | $ 11,156,437 | $ 11,557,527 |
Accounts receivable, net of allowance of $361,416 and $571,511 | 7,469,888 | 6,583,199 | 7,142,255 | |
Accounts receivable, net - related party | 2,611,562 | 1,644,942 | 5,384,573 | |
Revenues in excess of billings | 22,104,283 | 19,126,389 | 15,433,769 | |
Revenues in excess of billings - related party | 80,057 | 80,705 | 682,049 | |
Convertible note receivable - related party | 700,000 | 200,000 | ||
Other current assets | 2,940,599 | 2,463,886 | 3,192,425 | |
Total current assets | 44,461,204 | 44,272,075 | 42,991,508 | |
Restricted cash | 90,000 | 90,000 | 90,000 | |
Revenues in excess of billings, net - long term | 5,225,260 | 5,173,538 | ||
Property and equipment, net | 19,646,592 | 20,370,703 | 22,612,752 | |
Other assets | 3,400,418 | 3,211,295 | 1,604,731 | |
Intangible assets, net | 16,139,921 | 17,043,151 | 19,326,259 | |
Goodwill | 9,516,568 | 9,516,568 | 9,516,568 | |
Total assets | 98,479,963 | 99,677,330 | 96,141,818 | |
Current liabilities: | ||||
Accounts payable and accrued expenses | 7,123,148 | 6,880,194 | 6,389,128 | |
Current portion of loans and obligations under capitalized leases | 10,016,697 | 10,222,795 | 4,408,173 | |
Unearned revenues | 3,656,591 | 3,925,702 | 4,419,692 | |
Common stock to be issued | 88,324 | 88,324 | 88,324 | |
Total current liabilities | 20,884,760 | 21,117,015 | 15,305,317 | |
Loans and obligations under capitalized leases; less current maturities | 307,629 | 366,762 | 539,859 | |
Total liabilities | 21,192,389 | 21,483,777 | 15,845,176 | |
Commitments and contingencies | ||||
Stockholders’ equity: | ||||
Preferred stock, $.01 par value; 500,000 shares authorized; | ||||
Common stock, $.01 par value; 14,500,000 shares authorized; 11,333,129 shares issued and 11,186,570 outstanding as of September 30, 2017 and 11,225,385 shares issued and 11,190,606 outstanding as of June 30, 2017 | 113,331 | 112,254 | 108,823 | |
Additional paid-in-capital | 124,987,029 | 124,409,998 | 122,367,231 | |
Treasury stock (At cost, 146,559 shares and 34,779 shares as of September 30, 2017 and June 30, 2017, respectively) | (954,973) | (454,310) | (415,425) | |
Accumulated deficit | (42,670,888) | (42,301,390) | (37,709,471) | |
Stock subscription receivable | (273,926) | (297,511) | (602,811) | |
Other comprehensive loss | (18,663,149) | (18,074,570) | (17,960,133) | |
Total NetSol stockholders’ equity | 62,537,424 | 63,394,471 | 65,788,214 | |
Non-controlling interest | 14,750,150 | 14,799,082 | 14,508,428 | |
Total stockholders’ equity | 77,287,574 | 78,193,553 | 80,296,642 | |
Total liabilities and stockholders’ equity | $ 98,479,963 | $ 99,677,330 | $ 96,141,818 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2016 |
Statement of Financial Position [Abstract] | ||||
Accounts receivable, allowance | $ 361,461 | $ 571,511 | $ 500,853 | $ 492,498 |
Preferred stock, par value | $ .01 | $ .01 | $ .01 | $ .01 |
Preferred stock, shares authorized | 500,000 | 500,000 | 500,000 | 500,000 |
Common stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 14,500,000 | 14,500,000 | 14,500,000 | 14,500,000 |
Common stock, shares issued | 11,333,129 | 11,225,385 | 10,882,281 | 10,713,372 |
Common stock, shares outstanding | 11,186,570 | 11,190,606 | 10,855,002 | 10,686,093 |
Treasury stock, shares | 146,559 | 34,779 | 27,279 | 27,279 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Net Revenues: | ||
License fees | $ 326,066 | $ 5,453,795 |
Maintenance fees | 3,473,725 | 3,523,797 |
Services | 7,017,737 | 5,556,135 |
License fees - related party | 44,408 | 246,957 |
Maintenance fees - related party | 102,963 | 130,631 |
Services - related party | 1,853,877 | 2,165,154 |
Total net revenues | 12,818,776 | 17,076,469 |
Cost of revenues: | ||
Salaries and consultants | 5,464,160 | 5,893,349 |
Travel | 513,112 | 711,895 |
Depreciation and amortization | 1,173,113 | 1,330,872 |
Other | 856,582 | 972,338 |
Total cost of revenues | 8,006,967 | 8,908,454 |
Gross profit | 4,811,809 | 8,168,015 |
Operating expenses: | ||
Selling and marketing | 1,711,296 | 2,344,038 |
Depreciation and amortization | 245,873 | 269,097 |
General and administrative | 3,787,558 | 4,619,196 |
Research and development cost | 185,085 | 92,932 |
Total operating expenses | 5,929,812 | 7,325,263 |
Income (loss) from operations | (1,118,003) | 842,752 |
Other income and (expenses) | ||
Gain (loss) on sale of assets | (7,130) | (2,403) |
Interest expense | (118,071) | (54,475) |
Interest income | 136,911 | 30,440 |
Gain (loss) on foreign currency exchange transactions | 1,016,362 | (414,896) |
Share of net loss from equity investment | (67,562) | |
Other income (expense) | 1,099 | 21,560 |
Total other income (expenses) | 961,609 | (419,774) |
Net income (loss) before income taxes | (156,394) | 422,978 |
Income tax provision | (24,871) | (39,875) |
Net income (loss) | (181,265) | 383,103 |
Non-controlling interest | (188,233) | (769,214) |
Net loss attributable to NetSol | $ (369,498) | $ (386,111) |
Net income (loss) per share: | ||
Net loss per common share - Basic | $ (0.03) | $ (0.04) |
Net loss per common share - Diluted | $ (0.03) | $ (0.04) |
Weighted average number of shares outstanding | ||
Basic | 11,099,113 | 10,697,425 |
Diluted | 11,099,113 | 10,697,425 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ (369,498) | $ (386,111) |
Other comprehensive income (loss): | ||
Translation adjustment | (825,744) | 1,094,074 |
Translation adjustment attributable to non-controlling interest | 237,165 | (323,713) |
Net translation adjustment | (588,579) | 770,361 |
Comprehensive income (loss) attributable to NetSol | $ (958,077) | $ 384,250 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (181,265) | $ 383,103 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and amortization | 1,418,986 | 1,599,969 |
Share of net loss from investment under equity method | 67,562 | |
Loss on sale of assets | 7,130 | 2,403 |
Stock issued for services | 427,809 | 865,456 |
Fair market value of warrants and stock options granted | 21,804 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (903,730) | 2,336,894 |
Accounts receivable - related party | (1,251,994) | 121,800 |
Revenues in excess of billing | (3,230,619) | (4,821,828) |
Revenues in excess of billing - related party | (130) | 93,208 |
Other current assets | (478,390) | 306,339 |
Accounts payable and accrued expenses | 243,144 | (780,569) |
Unearned revenue | (270,743) | (346,108) |
Net cash used in operating activities | (4,152,240) | (217,529) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (328,163) | (554,873) |
Sales of property and equipment | 116,023 | 151,818 |
Convertible note receivable - related party | (500,000) | |
Investment in WRLD3D | (555,555) | |
Net cash used in investing activities | (712,140) | (958,610) |
Cash flows from financing activities: | ||
Proceeds from the exercise of stock options and warrants | 162,385 | 276,861 |
Proceeds from exercise of subsidiary options | 14,013 | |
Purchase of treasury stock | (500,663) | |
Payments on capital lease obligations and loans - net | (148,707) | (49,117) |
Net cash provided by (used in) financing activities | (486,985) | 241,757 |
Effect of exchange rate changes | (266,774) | 533,292 |
Net decrease in cash and cash equivalents | (5,618,139) | (401,090) |
Cash and cash equivalents, beginning of the period | 14,172,954 | 11,557,527 |
Cash and cash equivalents, end of period | 8,554,815 | 11,156,437 |
SUPPLEMENTAL DISCLOSURES: | ||
Interest | 97,547 | 83,672 |
Taxes | 20,961 | 17,351 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Provided services for investment in WRLD3D | 268,300 | 248,658 |
Assets acquired under capital lease | $ 41,695 |
Basis of Presentation and Princ
Basis of Presentation and Principles of Consolidation | 3 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Principles of Consolidation | NOTE 1 - BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION The Company designs, develops, markets, and exports proprietary software products to customers in the automobile financing and leasing, banking, 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. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. 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, 2017. 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 Technologies Australia Pty Ltd. (“Australia”) NetSol Technologies Europe Limited (“NTE”) NTPK (Thailand) Co. Limited (“NTPK Thailand”) NetSol Technologies (Beijing) Co. Ltd. (“NetSol Beijing”) NetSol Technologies (GmbH) (“NTG”) Majority-owned Subsidiaries NetSol Technologies, Ltd. (“NetSol PK”) NetSol Innovation (Private) Limited (“NetSol Innovation”) NetSol Technologies Thailand Limited (“NetSol Thai”) 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 period. Below is the table of reclassified amounts: For the Three Months Ended September, 30 2016 Originally reported Reclassified Net Revenues: Services $ 5,806,717 $ 5,556,135 Services - related party 1,914,572 2,165,154 $ 7,721,289 $ 7,721,289 Operating expenses: Selling and marketing $ 2,411,136 $ 2,344,038 General and administrative 4,552,098 4,619,196 $ 6,963,234 $ 6,963,234 OPERATING SEGMENTS Net income (loss) after taxes and before non-controlling interest: Corporate headquarters $ (1,562,419 ) $ (1,629,517 ) Asia - Pacific 1,777,918 1,845,016 $ 215,499 $ 215,499 |
Accounting Policies
Accounting Policies | 3 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Accounting Policies | 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. The areas requiring significant estimates are provision for doubtful accounts, provision for taxation, useful life of depreciable assets, useful life of intangible assets, contingencies, and estimated contract costs. The estimates and underlying assumptions are reviewed on an ongoing basis. Actual results could differ from those estimates. Concentration of Credit Risk Cash includes cash on hand and demand deposits in accounts maintained within the United States as well as in foreign countries. Certain financial instruments, which subject the Company to concentration of credit risk, consist of cash and restricted cash. The Company maintains balances at financial institutions which, from time to time, may exceed Federal Deposit Insurance Corporation insured limits for the banks located in the United States. Balances at financial institutions within certain foreign countries are not covered by insurance. As of September 30, 2017, and June 30, 2017, the Company had uninsured deposits related to cash deposits in accounts maintained within foreign entities of approximately $6,768,138 and $11,564,343, respectively. The Company has not experienced any losses in such accounts. The Company’s operations are carried out globally. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments of each country and by the general state of the country’s economy. The Company’s operations in each foreign country are subject to specific considerations and significant risks not typically associated with companies in economically developed nations. These include risks associated with, among others, the political, economic and legal environments and foreign currency exchange. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Fair Value of Financial Instruments The Company applies the provisions of ASC 820-10, “Fair Value Measurements and Disclosures.” The three levels of valuation hierarchy are defined as follows: Level 1: Valuations consist of unadjusted quoted prices in active markets for identical assets and liabilities and has the highest priority. Valuations rely on quoted prices in markets that are not active or observable inputs over the full term of the asset or liability. Valuations are based on prices or third party or internal valuation models that require inputs that are significant to the fair value measurement and are less observable and thus have the lowest priority. The Company’s financial assets that are measured at fair value on a recurring basis as of September 30, 2017, are as follows: Level 1 Level 2 Level 3 Total Assets Revenue in excess of billing - long term $ - $ - $ 5,225,260 $ 5,225,260 Total $ - $ - $ 5,225,260 $ 5,225,260 The Company’s financial assets that were measured at fair value on a recurring basis as of June 30, 2017, were as follows: Level 1 Level 2 Level 3 Total Assets Revenue in excess of billing - long term $ - $ - $ 5,173,538 $ 5,173,538 Total $ - $ - $ 5,173,538 $ 5,173,538 The reconciliation from June 30, 2017 to September 30, 2017 is as follows: Revenue in excess of billing - long term Fair value discount Total Balance at June 30, 2017 $ 5,483,869 $ (310,331 ) $ 5,173,538 Amortization during the period - 51,722 51,722 Balance at September 30, 2017 $ 5,483,869 $ (258,609 ) $ 5,225,260 The Company applied the discounted cash flow method to calculate the fair value and used NetSol PK’s weighted average borrowing rate, which was 3.96%. Management analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities From Equity” “Derivatives and Hedging.” New Accounting Pronouncements Recent Accounting Standards Adopted by the Company: In November 2015, the Financial Accounting Standards Board (FASB) issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting Accounting Standards Recently Issued but Not Yet Adopted by the Company: In May 2014, the (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued ASU No. 2016-02, Leases In August 2016, the FASB issued ASU 2016-15, Clarification of Certain Cash Receipts and Cash Payments On November 17, 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, In July 2017, the FASB issued ASU No. 2017-11, “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception”. All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 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. The following potential dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive. For the Three Months Ended September 30, 2017 2016 Stock Options 438,360 610,133 Warrants - 11,075 Share Grants 348,228 670,346 786,588 1,291,554 |
Other Comprehensive Income and
Other Comprehensive Income and Foreign Currency | 3 Months Ended |
Sep. 30, 2017 | |
Other Comprehensive Income And Foreign Currency | |
Other Comprehensive Income and Foreign Currency | NOTE 4 – OTHER COMPREHENSIVE INCOME AND FOREIGN CURRENCY: The accounts of NTE, VLSH and VLS use the British Pound; VLSIL and NTG use the Euro; NetSol PK, Connect, and NetSol Innovation use the Pakistan Rupee; NTPK Thailand and NetSol Thai use the Thai Baht; Australia uses the Australian dollar; and NetSol Beijing uses the Chinese Yuan as the functional currencies. NetSol Technologies, Inc., and its subsidiary, NTA, 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 $18,663,149 and $18,074,570 as of September 30, 2017 and June 30, 2017, respectively. During the three months ended September 30, 2017 and 2016, comprehensive income (loss) in the consolidated statements of comprehensive income (loss) included a translation loss attributable to NetSol of $588,579 and translation income of $770,361, respectively. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 5 – RELATED PARTY TRANSACTIONS NetSol-Innovation In November 2004, the Company entered into a joint venture with 1insurer, formerly Innovation Group, Investec Asset Finance In October 2011, NTE entered into an agreement with Investec Asset Finance to acquire VLS. NTE and VLS provide support services to Investec. During the three months ended September 30, 2017 and 2016, NTE and VLS provided license, maintenance and services of $601,192 and $736,685, respectively. Accounts receivable at September 30, 2017 and June 30, 2017 were $350,310 and $133,218, respectively. WRLD3D On May 31, 2017, Faizaan Ghauri, son of CEO Najeeb Ghauri, and an employee of the Company was appointed CEO of WRLD3D, Inc. (“WRLD3D”) a non-public company. On March 2, 2016, the Company purchased a 4.9% interest in WRLD3D for $1,111,111 and the Company’s subsidiary NetSol PK purchased a 12.2% investment in WRLD3D for $2,777,778 which will be earned over future periods by providing IT and enterprise software solutions. See Note 7 and Note 11. G-FORCE, Najeeb Ghauri, CEO and Chairman of the Board, and Naeem Ghauri, Director, have a financial interest in G-Force, LLC, which purchased a 4.9% investment in WRLD3D, Inc. for $1,111,111. See Note 11 “Other Long-Term Assets” |
Major Customers
Major Customers | 3 Months Ended |
Sep. 30, 2017 | |
Risks and Uncertainties [Abstract] | |
Major Customers | NOTE 6 – MAJOR CUSTOMERS The Company is a strategic business partner for Daimler Financial Services (which consists of a group of many companies in different countries), which accounts for approximately 32.98% and 41.11% of revenue, and 1insurer accounts for approximately 8.83% and 9.11% of revenue for the three months ended September 30, 2017 and 2016, respectively. The revenue from these two customers is shown in the Asia – Pacific segment. Accounts receivable at September 30, 2017 for these customers were $1,682,073 and $2,212,132, respectively. Accounts receivable at June 30, 2017 for these customers were $1,620,717 and $1,462,078, respectively. Revenue in excess of billing at September 30, 2017 for these customers was $22,290,975 and $nil, respectively, which included $5,225,260 shown as long term. Revenue in excess of billing at June 30, 2017 for these customers was $18,579,540 and $nil, respectively, which included $5,173,538 shown as long term. On December 21, 2015, the Company entered into a 10-year contract with Daimler Financial Services to provide license, maintenance and services for 12 countries in the Asia Pacific Region. The implementation phase is expected to be over a five-year period with maintenance and support over 10 years. The contract is a fixed fee arrangement with total license and maintenance fees of approximately €71,000,000 (approximately $83,529,000) with services to be separately agreed upon and billed as they are performed. The customer will make fixed annual payments of €5,850,000 (approximately $6,882,000) for years 1-5 and €8,350,000 (approximately $9,824,000) for years 6-10. Under the terms of the contract, the customer has the right to withdraw from certain modules and terminate the agreement as to certain countries based on good cause or business reasons prior to the beginning of implementation. |
Convertible Note Receivable - R
Convertible Note Receivable - Related Party | 3 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Convertible Note Receivable - Related Party | NOTE 7 – CONVERTIBLE NOTE RECEIVABLE – RELATED PARTY The Company entered into an agreement with WRLD3D, whereby the Company was issued a Convertible Promissory Note (the “Convertible Note”) which was fully executed on May 25, 2017. The maximum principal amount of the Convertible Note is $750,000, and as of September 30, 2017, the Company had disbursed $700,000. The Convertible Note bears interest at 5% per annum and all unpaid interest and principal is due and payable upon the Company’s request on or after February 1, 2018. The Convertible Note is convertible into Series BB Preferred shares at the lesser of (i) the price paid per share for the equity security by the investors in the qualified financing and (ii) $0.6788 per share (adjusted for any stock dividends, combinations, splits, recapitalizations or the like with respect to WRLD3D’s Series BB Preferred Stock after the date of the Convertible Note). The Convertible Note is convertible upon the occurrence of the following events: 1. Upon a qualified financing which is an equity financing of at least $2,000,000. 2. Optionally, upon an equity financing less than $2,000,000. 3. Optionally after the maturity date. 4. Upon a change of control. Subsequent to September 30, 2017, the Company loaned an additional $50,000 to WRLD3D pursuant to the Convertible Promissory Note agreement. |
Other Current Assets
Other Current Assets | 3 Months Ended |
Sep. 30, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Current Assets | NOTE 8 - OTHER CURRENT ASSETS Other current assets consisted of the following: As of September 30, As of June 30, 2017 2017 Prepaid Expenses $ 725,959 $ 597,687 Advance Income Tax 1,101,323 1,052,935 Employee Advances 153,456 128,100 Security Deposits 88,173 103,255 Other Receivables 515,197 252,590 Other Assets 356,491 329,319 Total $ 2,940,599 $ 2,463,886 |
Revenue in Excess of Billings -
Revenue in Excess of Billings - Long Term | 3 Months Ended |
Sep. 30, 2017 | |
Contractors [Abstract] | |
Revenue in Excess of Billings - Long Term | NOTE 9 – REVENUE IN EXCESS OF BILLINGS – LONG TERM Revenue in excess of billings, net consisted of the following: As of September 30, As of June 30, 2017 2017 Revenue in excess of billing - long term $ 5,483,869 $ 5,483,869 Present value discount (258,609 ) (310,331 ) Net Balance $ 5,225,260 $ 5,173,538 Pursuant to revenue recognition for contract accounting, the Company has recorded revenue in excess of billings long-term for amounts billable after one year. During the three months ended September 30, 2017 the Company accreted $51,722 which is recorded in interest income for the period. The Company used the discounted cash flow method with an interest rate of 3.96%. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 10 - PROPERTY AND EQUIPMENT Property and equipment consisted of the following: As of September 30, As of June 30, 2017 2017 Office Furniture and Equipment $ 3,882,351 $ 3,755,710 Computer Equipment 26,647,891 26,693,730 Assets Under Capital Leases 1,577,465 1,965,650 Building 9,164,885 9,243,866 Land 2,397,930 2,428,626 Autos 1,483,206 1,270,339 Improvements 587,033 592,652 Subtotal 45,740,761 45,950,573 Accumulated Depreciation (26,094,169 ) (25,579,870 ) Property and Equipment, Net $ 19,646,592 $ 20,370,703 For the three months ended September 30, 2017 and 2016, depreciation expense totaled $728,659 and $899,303, respectively. Of these amounts, $482,786 and $630,206, respectively, are reflected in cost of revenues. Following is a summary of fixed assets held under capital leases as of September 30, 2017 and June 30, 2017: As of September 30, As of June 30, 2017 2017 Computers and Other Equipment $ 232,497 $ 309,863 Furniture and Fixtures 145,258 227,914 Vehicles 1,199,710 1,427,873 Total 1,577,465 1,965,650 Less: Accumulated Depreciation - Net (549,043 ) (711,622 ) $ 1,028,422 $ 1,254,028 |
Other Long Term Assets
Other Long Term Assets | 3 Months Ended |
Sep. 30, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Long Term Assets | NOTE 11 – OTHER LONG TERM ASSETS As of September 30, As of June 30, 2017 2017 Investment (1) $ 3,257,759 $ 3,057,020 Long Term Security Deposits 142,659 154,275 Total $ 3,400,418 $ 3,211,295 (1) Investment in WRLD3D On March 2, 2016, the Company purchased a 4.9% interest in WRLD3D, a non-public company, for $1,111,111. The Company paid $555,556 at the initial closing and $555,555 on September 1, 2016. NetSol PK, the subsidiary of the Company, purchased a 12.2% investment in WRLD3D, for $2,777,778 which will be earned over future periods by providing IT and enterprise software solutions. Per the agreement, NetSol PK is to provide a minimum of $200,000 of services in each three-month period and the entire balance is required to be provided within three years of the date of the agreement. If NetSol PK fails to provide the future services, it may be required to forfeit the shares back to WRLD3D. As of September 30, the investment earned by NetSol PK is $2,214,209. In connection with the investment, the Company and NetSol PK received a warrant to purchase preferred stock of WRLD3D which included the following key terms and features: ● The warrants are exercisable into shares of the “Next Round Preferred”, only if and when the Next Round Preferred is issued by WRLD3D in a “Qualified Financing”. ● The warrants expire on March 2, 2020. ● “Next Round Preferred” is defined as occurring if WRLD3D’s preferred stock (or securities convertible into preferred stock) are issued in a Qualified Financing that occurs after March 2, 2016. ● “Qualified Financing” is defined as financing with total proceeds of at least $2 million. ● The total number of common stock shares to be issued is equal to $1,250,000 divided by the per share price of the Next Round Preferred. ● The exercise price of the warrants is equal to the greater of a) 70% of the per share price of the Next Round Preferred sold in a Qualified Financing, or b) 25,000,000 divided by the total number of shares of common stock outstanding immediately prior to the Qualified Financing (on a fully-diluted basis, excluding the number of common stock shares issuable upon the exercise of any given warrant). The Company had originally accounted for the investment under the cost method. On May 31, 2017, the Company determined that it met the significant influence criteria since the newly appointed CEO of WRLD3D is the son of the CEO, Najeeb Ghauri, and also an employee of the Company; therefore, the Company changed the accounting treatment from the cost method to the equity method. During the three months ended September 30, 2017 and 2016, NetSol PK provided services valued at $268,300 and $250,582, respectively, which is recorded as services-related party. These services are recorded as accounts receivable until approved by WRLD3D after which the shares are released from restriction. Accounts receivable at September 30, 2017 and June 30, 2017 were $49,120 and $49,646, respectively. Revenue in excess of billing at September 30, 2017 and June 30, 2017 were $80,057 and $80,705, respectively. During the three months ended September 30, 2017 and 2016, NetSol PK services valued at $268,300 and $248,658, respectively, were released from restriction. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | NOTE 12 - INTANGIBLE ASSETS Intangible assets consisted of the following: As of September 30, As of June 30, 2017 2017 Product Licenses - Cost $ 47,244,997 $ 47,244,997 Effect of Translation Adjustment (3,501,449 ) (3,134,488 ) Accumulated Amortization (27,603,627 ) (27,067,358 ) Net Balance $ 16,139,921 $ 17,043,151 (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 $16,139,921 will be amortized over the next 5.75 years. Amortization expense for the three months ended September 30, 2017 and 2016 was $690,327 and $700,666, respectively. (B) Future Amortization Estimated amortization expense of intangible assets over the next five years is as follows: Year ended: September 30, 2018 $ 2,743,467 September 30, 2019 2,743,467 September 30, 2020 2,743,467 September 30, 2021 2,743,467 September 30, 2022 2,743,467 Thereafter 2,422,586 $ 16,139,921 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 3 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | NOTE 13 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following: As of September 30, As of June 30, 2017 2017 Accounts Payable $ 1,466,806 $ 1,466,265 Accrued Liabilities 4,865,906 4,498,958 Accrued Payroll & Taxes 447,549 520,719 Taxes Payable 176,619 174,485 Other Payable 166,268 219,767 Total $ 7,123,148 $ 6,880,194 |
Debts
Debts | 3 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debts | NOTE 14 – DEBTS Notes payable and capital leases consisted of the following: As of September 30, 2017 Current Long-Term Name Total Maturities Maturities D&O Insurance (1 ) $ 31,153 $ 31,153 $ - Bank Overdraft Facility (2 ) 216,442 216,442 - Loan Payable Bank - Export Refinance (3 ) 4,716,090 4,716,090 - Loan Payable Bank - Export Refinance II (4 ) 3,301,265 3,301,265 - Loan Payable Bank - Running Finance (5 ) 1,414,827 1,414,827 - 9,679,777 9,679,777 - Subsidiary Capital Leases (6 ) 644,549 336,920 307,629 $ 10,324,326 $ 10,016,697 $ 307,629 As of June 30, 2017 Current Long-Term Name Total Maturities Maturities D&O Insurance (1 ) $ 87,485 $ 87,485 $ - Bank Overdraft Facility (2 ) 221,379 221,379 - Loan Payable Bank - Export Refinance (3 ) 4,776,461 4,776,461 - Loan Payable Bank - Export Refinance II (4 ) 1,910,585 1,910,585 - Loan Payable Bank - Running Finance (5 ) 2,865,877 2,865,877 - 9,861,787 9,861,787 - Subsidiary Capital Leases (6 ) 727,770 361,008 366,762 $ 10,589,557 $ 10,222,795 $ 366,762 (1) The Company finances Directors’ and Officers’ (“D&O”) liability insurance, Errors and Omissions (“E&O”) liability insurance and some account payables, for which the D&O and E&O balances are renewed on an annual basis and, as such, are recorded in current maturities. The interest rate on these financings were ranging from 4.8% to 7.69% as of September 30, 2017 and June 30, 2017. (2) The Company’s subsidiary, NTE, has an overdraft facility with HSBC Bank plc whereby the bank would cover any overdrafts up to £300,000, or approximately $400,000. The annual interest rate was 4.75% as of September 30, 2017. Total outstanding balance as of September 30, 2017 was £162,332 or approximately $216,442. Interest expense for three months ended September 30, 2017 and 2016, was $2,054 and $Nil, 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, 2017, NTE was in compliance with this covenant. (3) The Company’s subsidiary, NetSol PK, has an export refinance facility with Askari Bank Limited, secured by NetSol PK’s assets. This is a revolving loan that matures every six months. Total facility amount is Rs. 500,000,000 or $4,716,090 at September 30, 2017 and June 30, 2017. The interest rate for the loans was 3% at September 30, 2017 and June 30, 2017. Interest expense for the three months ended September 30, 2017 and 2016 was $35,898 and $29,065, respectively. This facility requires NetSol PK to maintain a long-term debt equity ratio of 60:40 and the current ratio of 1:1. As of September 30, 2017, NetSol PK was in compliance with this covenant. (4) The Company’s subsidiary, NetSol PK, has an export refinance facility with Samba Bank Limited, secured by NetSol PK’s assets. This is a revolving loan that matures every six months. Total facility amount is Rs. 350,000,000 or $3,301,265 and Rs. 200,000,000 or $1,910,585, at September 30, 2017 and June 30, 2017, respectively. The interest rate for the loans was 3% at September 30, 2017 and June 30, 2017. Interest expense for the three months ended September 30, 2017 and 2016 was $22,122 and $Nil, respectively. (5) The Company’s subsidiary, NetSol PK, has a running finance facility with Samba Bank Limited, secured by NetSol PK’s assets. Total facility amount is Rs. 150,000,000 or $1,414,827 and Rs. 300,000,000 or $2,865,877, at September 30, 2017 and June 30, 2017, respectively. The interest rate for the loans was 8.13% at September 30, 2017 and June 30, 2017. Interest expense for the three months ended September 30, 20147 and 2016 was $44,095 and $Nil, respectively. During the tenure of loan, the facilities from Samba Bank Limited require NetSol PK to maintain at a minimum a current ratio of 1:1, an interest coverage ratio of 4 times, a leverage ratio of 2 times, and a debt service coverage ratio of 4 times. As of September 30, 2017, NetSol PK was in compliance with these covenants. (6) The Company leases various fixed assets under capital lease arrangements expiring in various years through 2022. 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, 2017 and 2016. Following is the aggregate minimum future lease payments under capital leases as of September 30, 2017: Amount Minimum Lease Payments Due FYE 9/30/18 $ 372,280 Due FYE 9/30/19 262,626 Due FYE 9/30/20 53,872 Due FYE 9/30/21 6,486 Due FYE 9/30/22 541 Total Minimum Lease Payments 695,805 Interest Expense relating to future periods (51,256 ) Present Value of minimum lease payments 644,549 Less: Current portion (336,920 ) Non-Current portion $ 307,629 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 15 - STOCKHOLDERS’ EQUITY During the three months ended September 30, 2017, the Company issued 13,068 shares of common stock for services rendered by officers of the Company. These shares were valued at the fair market value of $81,675. During the three months ended September 30, 2017, the Company issued 9,699 shares of 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 $55,080. During the three months ended September 30, 2017, the Company issued 49,204 shares of its common stock to employees pursuant to the terms of their employment agreements valued at $302,553. During the three months ended September 30, 2017, the Company collected subscription receivable of $23,585 related to the exercise of stock options in previous years. During the three months ended September 30, 2017, the Company received $138,800 pursuant to a stock option agreement for the exercise of 35,773 shares of common stock at price of $3.88 per share. During the three months ended September 30, 2017, the Company purchased 111,780 of shares of its common stock from open market at an average price of $4.48 per share. |
Incentive and Non-statutory Sto
Incentive and Non-statutory Stock Option Plan | 3 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Incentive and Non-statutory Stock Option Plan | NOTE 16 - INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN Common stock purchase options and warrants consisted of the following: OPTIONS: # of shares Weighted Ave Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregated Intrinsic Value Outstanding and exercisable, June 30, 2016 610,133 $ 4.90 0.99 $ 799,030 Granted 79,838 $ 4.53 Exercised (84,838 ) $ 4.49 Expired / Cancelled (130,000 ) $ 7.50 Outstanding and exercisable, June 30, 2017 475,133 $ 4.20 1.05 $ 8,413 Granted - - Exercised (35,773 ) $ 3.88 Expired / Cancelled (1,000 ) $ 16.00 Outstanding and exercisable, September 30, 2017 438,360 $ 4.20 0.81 $ - The following table summarizes information about stock options and warrants outstanding and exercisable at September 30, 2017. Exercise Price Number Outstanding and Exercisable Weighted Average Remaining Contractual Life Weighted Ave Exercise Price OPTIONS: $ 3.88 384,898 0.74 $ 3.88 $ 6.50 53,462 1.35 $ 6.50 Totals 438,360 0.81 $ 4.20 The following table summarizes stock grants awarded as compensation: # of shares Weighted Average Grant Date Fair Value ($) Unvested, June 30, 2016 630,228 $ 6.07 Granted 222,146 $ 5.92 Forfeited / Cancelled (5,000 ) $ 5.55 Vested (427,175 ) $ 5.90 Unvested, June 30, 2017 420,199 $ 6.07 Vested (71,971 ) $ 5.90 Unvested, September 30, 2017 348,228 $ 6.16 For the three months ended September 30, 2017 and 2016, the Company recorded compensation expense of $427,809 and $865,456, respectively. The compensation expense related to the unvested stock grants as of September 30, 2017 was $2,137,629 which will be recognized during the fiscal years 2018 through 2022. |
Contingencies
Contingencies | 3 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | NOTE 17 – CONTINGENCIES On April 7, 2017, Conister Bank Limited filed a complaint in the High Court of Justice Chancery Division, as claim no. HC-2017-001045 against our subsidiary, Virtual Lease Services Limited (“VLS”). The complaint alleges that VLS was in willful default of their agreements with Conister Bank Limited by failing to fulfill its obligations under the agreements with Conister. The complaint alleges damages in excess of £200,000 (approximately $266,667). VLS has responded to the complaint and its expenses are currently covered by available insurance. VLS denies all claims and intends to vigorously defend the action. |
Operating Segments
Operating Segments | 3 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Operating Segments | NOTE 18 – 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, 2017 and June 30, 2017: As of September 30, As of June 30, 2017 2017 Identifiable assets: Corporate headquarters $ 3,398,876 $ 2,922,514 North America 5,736,535 6,717,366 Europe 5,922,323 6,056,514 Asia - Pacific 83,422,229 83,980,936 Consolidated $ 98,479,963 $ 99,677,330 The following table presents a summary of investment under equity method as of September 30, 2017 and June 30, 2017: As of September 30, As of June 30, 2017 2017 Investment in WRLD3D: Corporate headquarters $ 1,091,752 $ 1,111,111 Asia - Pacific 2,166,007 1,945,909 Consolidated $ 3,257,759 $ 3,057,020 The following table presents a summary of operating information for the three months ended September 30: For the Three Months Ended September 30, 2017 2016 Restated Revenues from unaffiliated customers: North America $ 848,072 $ 1,841,431 Europe 1,447,824 1,206,049 Asia - Pacific 8,789,932 11,736,829 11,085,828 14,784,309 Revenue from affiliated customers Europe 601,192 736,685 Asia - Pacific 1,131,756 1,555,475 1,732,948 2,292,160 Consolidated $ 12,818,776 $ 17,076,469 Intercompany revenue Europe $ 102,475 $ 136,127 Asia - Pacific 376,937 459,951 Eliminated $ 479,412 $ 596,078 Net income (loss) after taxes and before non-controlling interest: Corporate headquarters $ (1,037,924 ) $ (1,629,517 ) North America (295,646 ) 267,892 Europe 99,390 (100,288 ) Asia - Pacific 1,052,915 1,845,016 Consolidated $ (181,265 ) $ 383,103 The following table presents a summary of capital expenditures for the three months ended September 30: For the Three Months Ended September 30, 2017 2016 Capital expenditures: North America $ - $ 4,103 Europe 76,809 195,180 Asia - Pacific 251,354 355,590 Consolidated $ 328,163 $ 554,873 |
Non-controlling Interest in Sub
Non-controlling Interest in Subsidiary | 3 Months Ended |
Sep. 30, 2017 | |
Noncontrolling Interest [Abstract] | |
Non-controlling Interest in Subsidiary | NOTE 19 – 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 Interest % Non-Controlling Interest at September 30, 2017 NetSol PK 33.80 % $ 12,708,487 NetSol-Innovation 49.90 % 1,734,427 VLS, VLSH & VLSIL Combined 49.00 % 307,320 NetSol Thai 0.006 % (84 ) Total $ 14,750,150 SUBSIDIARY Non-Controlling Interest % Non-Controlling Interest at June 30, 2017 NetSol PK 33.80 % $ 12,887,938 NetSol-Innovation 49.90 % 1,599,734 VLS, VLHS & VLSIL Combined 49.00 % 311,502 NetSol Thai 0.006 % (92 ) Total $ 14,799,082 |
Restatement of Previously Issue
Restatement of Previously Issued Financial Statements | 3 Months Ended |
Sep. 30, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Restatement of Previously Issued Financial Statements | NOTE 20 – RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS During the preparation of the Company’s Form 10-Q for the nine months ended March 31, 2017, misstatements were identified in the previous financial statements relating to the recording of revenue in the proper period. The restated financial statements for the periods affected were disclosed in Note 19 of the Notes to Condensed Consolidated Financial Statement contained in the Company’s Form 10-Q for the nine months ended March 31, 2017. On December 21, 2015, the Company signed a 10-year contract for a 12-country installation of its NFS Ascent product which included a perpetual license, continued maintenance on the existing product and then maintenance on NFS Ascent upon installation. The Company did not appropriately apply the percentage-of-completion method for this arrangement in accordance with ASC 605-35. As a result, for quarter ended September 30, 2016, license revenue was understated by $1,953,935 and for the quarter ended December 31, 2016, license revenue was overstated by $1,580,529. The Company charges maintenance revenue on the license value plus any additional customization that the customer may require. For one customer, the Company did not increase the maintenance fee for the additional customization that was performed during the year. This resulted in an understatement of maintenance revenue of $120,976 for the quarter ended September 30, 2016 and an overstatement of maintenance revenue of $198,797 for the quarter ended December 31, 2016. The following tables present the restated financial statements for the quarter ended September 30, 2016. Balance Sheet As of September 30, 2016 As Originally Presented Amount of Restatement As Restated ASSETS Current assets: Cash and cash equivalents $ 11,156,437 $ 11,156,437 Accounts receivable, net of allowance of $500,853 and $492,498 7,142,255 7,142,255 Accounts receivable, net - related party 5,384,573 5,384,573 Revenues in excess of billings 13,358,858 2,074,911 15,433,769 Revenues in excess of billings - related party 682,049 682,049 Other current assets 3,192,425 3,192,425 Total current assets 40,916,597 2,074,911 42,991,508 Restricted cash 90,000 90,000 Property and equipment, net 22,612,752 22,612,752 Other assets 1,604,731 1,604,731 Intangible assets, net 19,326,259 19,326,259 Goodwill 9,516,568 9,516,568 Total assets $ 94,066,907 $ 2,074,911 $ 96,141,818 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued expenses $ 6,389,128 $ 6,389,128 Current portion of loans and obligations under capitalized leases 4,408,173 4,408,173 Unearned revenues 4,419,692 4,419,692 Common stock to be issued 88,324 88,324 Total current liabilities 15,305,317 - 15,305,317 Long term loans and obligations under capitalized leases; less current maturities 539,859 539,859 Total liabilities 15,845,176 - 15,845,176 Commitments and contingencies Stockholders’ equity: Preferred stock, $.01 par value; 500,000 shares authorized; - - - Common stock, $.01 par value; 14,500,000 shares authorized; 10,882,281 shares issued and 10,855,002 outstanding as of September 30, 2016 and 10,713,372 shares issued and 10,686,093 outstanding as of June 30, 2016 108,823 108,823 Additional paid-in-capital 122,367,231 122,367,231 Treasury stock (27,279 shares) (415,425 ) (415,425 ) Accumulated deficit (39,089,079 ) 1,379,608 (37,709,471 ) Stock subscription receivable (602,811 ) (602,811 ) Other comprehensive loss (17,960,133 ) (17,960,133 ) Total NetSol stockholders’ equity 64,408,606 1,379,608 65,788,214 Non-controlling interest 13,813,125 695,303 14,508,428 Total stockholders’ equity 78,221,731 2,074,911 80,296,642 Total liabilities and stockholders’ equity $ 94,066,907 $ 2,074,911 $ 96,141,818 For the Three Months Ended September 30, 2016 As Originally Amount of Presented Restatement As Restated Net Revenues: License fees $ 3,499,860 $ 1,953,935 $ 5,453,795 Maintenance fees 3,402,821 120,976 3,523,797 Services 5,806,717 5,806,717 License fees - related party 246,957 246,957 Maintenance fees - related party 130,631 130,631 Services - related party 1,914,572 1,914,572 Total net revenues 15,001,558 2,074,911 17,076,469 Cost of revenues: Salaries and consultants 5,893,349 5,893,349 Travel 711,895 711,895 Depreciation and amortization 1,330,872 1,330,872 Other 972,338 972,338 Total cost of revenues 8,908,454 - 8,908,454 Gross profit 6,093,104 2,074,911 8,168,015 Operating expenses: Selling and marketing 2,411,136 2,411,136 Depreciation and amortization 269,097 269,097 General and administrative 4,552,098 4,552,098 Research and development cost 92,932 92,932 Total operating expenses 7,325,263 - 7,325,263 Income (loss) from operations (1,232,159 ) 2,074,911 842,752 Other income and (expenses) Loss on sale of assets (2,403 ) (2,403 ) Interest expense (54,475 ) (54,475 ) Interest income 30,440 30,440 Loss on foreign currency exchange transactions (414,896 ) (414,896 ) Other income 21,560 21,560 Total other income (expenses) (419,774 ) - (419,774 ) Net income (loss) before income taxes (1,651,933 ) 2,074,911 422,978 Income tax provision (39,875 ) (39,875 ) Net income (loss) (1,691,808 ) 2,074,911 383,103 Non-controlling interest (73,911 ) (695,303 ) (769,214 ) Net income (loss) attributable to NetSol $ (1,765,719 ) $ 1,379,608 $ (386,111 ) Net Income (loss) per share: Net income (loss) per common share Basic $ (0.17 ) $ 0.14 $ (0.04 ) Diluted $ (0.17 ) $ 0.14 $ (0.04 ) Weighted average number of shares outstanding Basic 10,697,425 10,697,425 10,697,425 Diluted 10,697,425 10,697,425 10,697,425 For the Three Months Ended September 30, 2016 As Originally Amount of Presented Restatement As Restated Net income (loss) $ (1,765,719 ) $ 1,379,608 $ (386,111 ) Other comprehensive income (loss): Translation adjustment 1,094,074 - 1,094,074 Comprehensive income (loss) (671,645 ) 1,379,608 707,963 Comprehensive income (loss) attributable to non-controlling interest 323,713 - 323,713 Comprehensive income (loss) attributable to NetSol $ (995,358 ) $ 1,379,608 $ 384,250 For the Three Months Ended September 30, 2016 As Originally Amount of Presented Restatement As Restated Cash flows from operating activities: Net income (loss) $ (1,691,808 ) $ 2,074,911 $ 383,103 Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 1,599,969 1,599,969 Loss on sale of assets 2,403 2,403 Stock issued for services 865,456 865,456 Fair market value of warrants and stock options granted 21,804 21,804 Changes in operating assets and liabilities: Accounts receivable 2,336,894 2,336,894 Accounts receivable - related party 121,800 121,800 Revenues in excess of billing (2,746,917 ) (2,074,911 ) (4,821,828 ) Revenues in excess of billing - related party 93,208 93,208 Other current assets 306,339 306,339 Accounts payable and accrued expenses (780,569 ) (780,569 ) Unearned revenue (346,108 ) (346,108 ) Net cash used in operating activities (217,529 ) - (217,529 ) Cash flows from investing activities: Purchases of property and equipment (554,873 ) (554,873 ) Sales of property and equipment 151,818 151,818 Investment (555,555 ) (555,555 ) Net cash used in investing activities (958,610 ) - (958,610 ) Cash flows from financing activities: Proceeds from the exercise of stock options and warrants 276,861 276,861 Proceeds from exercise of subsidiary options 14,013 14,013 Payments on capital lease obligations and loans - net (49,117 ) (49,117 ) Net cash provided by financing activities 241,757 - 241,757 Effect of exchange rate changes 533,292 533,292 Net decrease in cash and cash equivalents (401,090 ) - (401,090 ) Cash and cash equivalents, beginning of the period 11,557,527 11,557,527 Cash and cash equivalents, end of period $ 11,156,437 $ - $ 11,156,437 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 21 - SUBSEQUENT EVENTS Subsequent to September 30, 2017, the Company loaned an additional $50,000 to WRLD3D pursuant to the Convertible Promissory Note agreement. (See Note 7) Pursuant to the Company’s stock buyback plan, the Company repurchased 27,495 shares of our common stock from the open market at an average price of $3.65 per share. Total shares purchased on this buyback plan to date is 139,275 at an average price of $4.30 per share. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 3 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Use of Estimates | 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. The areas requiring significant estimates are provision for doubtful accounts, provision for taxation, useful life of depreciable assets, useful life of intangible assets, contingencies, and estimated contract costs. The estimates and underlying assumptions are reviewed on an ongoing basis. Actual results could differ from those estimates. |
Concentration of Credit Risk | Concentration of Credit Risk Cash includes cash on hand and demand deposits in accounts maintained within the United States as well as in foreign countries. Certain financial instruments, which subject the Company to concentration of credit risk, consist of cash and restricted cash. The Company maintains balances at financial institutions which, from time to time, may exceed Federal Deposit Insurance Corporation insured limits for the banks located in the United States. Balances at financial institutions within certain foreign countries are not covered by insurance. As of September 30, 2017, and June 30, 2017, the Company had uninsured deposits related to cash deposits in accounts maintained within foreign entities of approximately $6,768,138 and $11,564,343, respectively. The Company has not experienced any losses in such accounts. The Company’s operations are carried out globally. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments of each country and by the general state of the country’s economy. The Company’s operations in each foreign country are subject to specific considerations and significant risks not typically associated with companies in economically developed nations. These include risks associated with, among others, the political, economic and legal environments and foreign currency exchange. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company applies the provisions of ASC 820-10, “Fair Value Measurements and Disclosures.” The three levels of valuation hierarchy are defined as follows: Level 1: Valuations consist of unadjusted quoted prices in active markets for identical assets and liabilities and has the highest priority. Valuations rely on quoted prices in markets that are not active or observable inputs over the full term of the asset or liability. Valuations are based on prices or third party or internal valuation models that require inputs that are significant to the fair value measurement and are less observable and thus have the lowest priority. The Company’s financial assets that are measured at fair value on a recurring basis as of September 30, 2017, are as follows: Level 1 Level 2 Level 3 Total Assets Revenue in excess of billing - long term $ - $ - $ 5,225,260 $ 5,225,260 Total $ - $ - $ 5,225,260 $ 5,225,260 The Company’s financial assets that were measured at fair value on a recurring basis as of June 30, 2017, were as follows: Level 1 Level 2 Level 3 Total Assets Revenue in excess of billing - long term $ - $ - $ 5,173,538 $ 5,173,538 Total $ - $ - $ 5,173,538 $ 5,173,538 The reconciliation from June 30, 2017 to September 30, 2017 is as follows: Revenue in excess of billing - long term Fair value discount Total Balance at June 30, 2017 $ 5,483,869 $ (310,331 ) $ 5,173,538 Amortization during the period - 51,722 51,722 Balance at September 30, 2017 $ 5,483,869 $ (258,609 ) $ 5,225,260 The Company applied the discounted cash flow method to calculate the fair value and used NetSol PK’s weighted average borrowing rate, which was 3.96%. Management analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities From Equity” “Derivatives and Hedging.” |
New Accounting Pronouncements | New Accounting Pronouncements Recent Accounting Standards Adopted by the Company: In November 2015, the Financial Accounting Standards Board (FASB) issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting Accounting Standards Recently Issued but Not Yet Adopted by the Company: In May 2014, the (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued ASU No. 2016-02, Leases In August 2016, the FASB issued ASU 2016-15, Clarification of Certain Cash Receipts and Cash Payments On November 17, 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, In July 2017, the FASB issued ASU No. 2017-11, “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception”. All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable. |
Basis of Presentation and Pri29
Basis of Presentation and Principles of Consolidation (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Basis Of Presentation And Principles Of Consolidation Tables | |
Schedule of Condensed Consolidated Financial Statements Have Been Reclassified to Conform to Report Classifications | For comparative purposes, prior year’s condensed consolidated financial statements have been reclassified to conform to report classifications of the current period. Below is the table of reclassified amounts: For the Three Months Ended September, 30 2016 Originally reported Reclassified Net Revenues: Services $ 5,806,717 $ 5,556,135 Services - related party 1,914,572 2,165,154 $ 7,721,289 $ 7,721,289 Operating expenses: Selling and marketing $ 2,411,136 $ 2,344,038 General and administrative 4,552,098 4,619,196 $ 6,963,234 $ 6,963,234 OPERATING SEGMENTS Net income (loss) after taxes and before non-controlling interest: Corporate headquarters $ (1,562,419 ) $ (1,629,517 ) Asia - Pacific 1,777,918 1,845,016 $ 215,499 $ 215,499 |
Accounting Policies (Tables)
Accounting Policies (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Fair Value of Financial Assets Measured On Recurring Basis | The Company’s financial assets that are measured at fair value on a recurring basis as of September 30, 2017, are as follows: Level 1 Level 2 Level 3 Total Assets Revenue in excess of billing - long term $ - $ - $ 5,225,260 $ 5,225,260 Total $ - $ - $ 5,225,260 $ 5,225,260 The Company’s financial assets that were measured at fair value on a recurring basis as of June 30, 2017, were as follows: Level 1 Level 2 Level 3 Total Assets Revenue in excess of billing - long term $ - $ - $ 5,173,538 $ 5,173,538 Total $ - $ - $ 5,173,538 $ 5,173,538 |
Schedule of Fair Value of Financial Instruments Reconciliation | The reconciliation from June 30, 2017 to September 30, 2017 is as follows: Revenue in excess of billing - long term Fair value discount Total Balance at June 30, 2017 $ 5,483,869 $ (310,331 ) $ 5,173,538 Amortization during the period - 51,722 51,722 Balance at September 30, 2017 $ 5,483,869 $ (258,609 ) $ 5,225,260 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potential dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive. For the Three Months Ended September 30, 2017 2016 Stock Options 438,360 610,133 Warrants - 11,075 Share Grants 348,228 670,346 786,588 1,291,554 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Current Assets | Other current assets consisted of the following: As of September 30, As of June 30, 2017 2017 Prepaid Expenses $ 725,959 $ 597,687 Advance Income Tax 1,101,323 1,052,935 Employee Advances 153,456 128,100 Security Deposits 88,173 103,255 Other Receivables 515,197 252,590 Other Assets 356,491 329,319 Total $ 2,940,599 $ 2,463,886 |
Revenue in Excess of Billings33
Revenue in Excess of Billings - Long Term (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Contractors [Abstract] | |
Schedule of Revenue in Excess of Billings | Revenue in excess of billings, net consisted of the following: As of September 30, As of June 30, 2017 2017 Revenue in excess of billing - long term $ 5,483,869 $ 5,483,869 Present value discount (258,609 ) (310,331 ) Net Balance $ 5,225,260 $ 5,173,538 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following: As of September 30, As of June 30, 2017 2017 Office Furniture and Equipment $ 3,882,351 $ 3,755,710 Computer Equipment 26,647,891 26,693,730 Assets Under Capital Leases 1,577,465 1,965,650 Building 9,164,885 9,243,866 Land 2,397,930 2,428,626 Autos 1,483,206 1,270,339 Improvements 587,033 592,652 Subtotal 45,740,761 45,950,573 Accumulated Depreciation (26,094,169 ) (25,579,870 ) Property and Equipment, Net $ 19,646,592 $ 20,370,703 |
Summary of Fixed Assets Held Under Capital Leases | Following is a summary of fixed assets held under capital leases as of September 30, 2017 and June 30, 2017: As of September 30, As of June 30, 2017 2017 Computers and Other Equipment $ 232,497 $ 309,863 Furniture and Fixtures 145,258 227,914 Vehicles 1,199,710 1,427,873 Total 1,577,465 1,965,650 Less: Accumulated Depreciation - Net (549,043 ) (711,622 ) $ 1,028,422 $ 1,254,028 |
Other Long Term Assets (Tables)
Other Long Term Assets (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Long Term Assets | As of September 30, As of June 30, 2017 2017 Investment (1) $ 3,257,759 $ 3,057,020 Long Term Security Deposits 142,659 154,275 Total $ 3,400,418 $ 3,211,295 (1) Investment in WRLD3D On March 2, 2016, the Company purchased a 4.9% interest in WRLD3D, a non-public company, for $1,111,111. The Company paid $555,556 at the initial closing and $555,555 on September 1, 2016. NetSol PK, the subsidiary of the Company, purchased a 12.2% investment in WRLD3D, for $2,777,778 which will be earned over future periods by providing IT and enterprise software solutions. Per the agreement, NetSol PK is to provide a minimum of $200,000 of services in each three-month period and the entire balance is required to be provided within three years of the date of the agreement. If NetSol PK fails to provide the future services, it may be required to forfeit the shares back to WRLD3D. As of September 30, the investment earned by NetSol PK is $2,214,209. |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consisted of the following: As of September 30, As of June 30, 2017 2017 Product Licenses - Cost $ 47,244,997 $ 47,244,997 Effect of Translation Adjustment (3,501,449 ) (3,134,488 ) Accumulated Amortization (27,603,627 ) (27,067,358 ) Net Balance $ 16,139,921 $ 17,043,151 |
Estimated Amortization Expense of Intangible Assets Over Next Five Years | Estimated amortization expense of intangible assets over the next five years is as follows: Year ended: September 30, 2018 $ 2,743,467 September 30, 2019 2,743,467 September 30, 2020 2,743,467 September 30, 2021 2,743,467 September 30, 2022 2,743,467 Thereafter 2,422,586 $ 16,139,921 |
Accounts Payable and Accrued 37
Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consisted of the following: As of September 30, As of June 30, 2017 2017 Accounts Payable $ 1,466,806 $ 1,466,265 Accrued Liabilities 4,865,906 4,498,958 Accrued Payroll & Taxes 447,549 520,719 Taxes Payable 176,619 174,485 Other Payable 166,268 219,767 Total $ 7,123,148 $ 6,880,194 |
Debts (Tables)
Debts (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Components of Notes Payable and Capital Leases | Notes payable and capital leases consisted of the following: As of September 30, 2017 Current Long-Term Name Total Maturities Maturities D&O Insurance (1 ) $ 31,153 $ 31,153 $ - Bank Overdraft Facility (2 ) 216,442 216,442 - Loan Payable Bank - Export Refinance (3 ) 4,716,090 4,716,090 - Loan Payable Bank - Export Refinance II (4 ) 3,301,265 3,301,265 - Loan Payable Bank - Running Finance (5 ) 1,414,827 1,414,827 - 9,679,777 9,679,777 - Subsidiary Capital Leases (6 ) 644,549 336,920 307,629 $ 10,324,326 $ 10,016,697 $ 307,629 As of June 30, 2017 Current Long-Term Name Total Maturities Maturities D&O Insurance (1 ) $ 87,485 $ 87,485 $ - Bank Overdraft Facility (2 ) 221,379 221,379 - Loan Payable Bank - Export Refinance (3 ) 4,776,461 4,776,461 - Loan Payable Bank - Export Refinance II (4 ) 1,910,585 1,910,585 - Loan Payable Bank - Running Finance (5 ) 2,865,877 2,865,877 - 9,861,787 9,861,787 - Subsidiary Capital Leases (6 ) 727,770 361,008 366,762 $ 10,589,557 $ 10,222,795 $ 366,762 (1) The Company finances Directors’ and Officers’ (“D&O”) liability insurance, Errors and Omissions (“E&O”) liability insurance and some account payables, for which the D&O and E&O balances are renewed on an annual basis and, as such, are recorded in current maturities. The interest rate on these financings were ranging from 4.8% to 7.69% as of September 30, 2017 and June 30, 2017. (2) The Company’s subsidiary, NTE, has an overdraft facility with HSBC Bank plc whereby the bank would cover any overdrafts up to £300,000, or approximately $400,000. The annual interest rate was 4.75% as of September 30, 2017. Total outstanding balance as of September 30, 2017 was £162,332 or approximately $216,442. Interest expense for three months ended September 30, 2017 and 2016, was $2,054 and $Nil, 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, 2017, NTE was in compliance with this covenant. (3) The Company’s subsidiary, NetSol PK, has an export refinance facility with Askari Bank Limited, secured by NetSol PK’s assets. This is a revolving loan that matures every six months. Total facility amount is Rs. 500,000,000 or $4,716,090 at September 30, 2017 and June 30, 2017. The interest rate for the loans was 3% at September 30, 2017 and June 30, 2017. Interest expense for the three months ended September 30, 2017 and 2016 was $35,898 and $29,065, respectively. This facility requires NetSol PK to maintain a long-term debt equity ratio of 60:40 and the current ratio of 1:1. As of September 30, 2017, NetSol PK was in compliance with this covenants. (4) The Company’s subsidiary, NetSol PK, has an export refinance facility with Samba Bank Limited, secured by NetSol PK’s assets. This is a revolving loan that matures every six months. Total facility amount is Rs. 350,000,000 or $3,301,265 and Rs. 200,000,000 or $1,910,585, at September 30, 2017 and June 30, 2017, respectively. The interest rate for the loans was 3% at September 30, 2017 and June 30, 2017. Interest expense for the three months ended September 30, 2017 and 2016 was $22,122 and $Nil, respectively. (5) The Company’s subsidiary, NetSol PK, has a running finance facility with Samba Bank Limited, secured by NetSol PK’s assets. Total facility amount is Rs. 150,000,000 or $1,414,827 and Rs. 300,000,000 or $2,865,877, at September 30, 2017 and June 30, 2017, respectively. The interest rate for the loans was 8.13% at September 30, 2017 and June 30, 2017. Interest expense for the three months ended September 30, 2017 and 2016 was $44,095 and $Nil, respectively. During the tenure of loan, the facilities from Samba Bank Limited require NetSol PK to maintain at a minimum a current ratio of 1:1, an interest coverage ratio of 4 times, a leverage ratio of 2 times, and a debt service coverage ratio of 4 times. As of September 30, 2017, NetSol PK was in compliance with these covenants. (6) The Company leases various fixed assets under capital lease arrangements expiring in various years through 2022. 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, 2017 and 2016. |
Schedule of Aggregate Minimum Future Lease Payments Under Capital Leases | Following is the aggregate minimum future lease payments under capital leases as of September 30, 2017: Amount Minimum Lease Payments Due FYE 9/30/18 $ 372,280 Due FYE 9/30/19 262,626 Due FYE 9/30/20 53,872 Due FYE 9/30/21 6,486 Due FYE 9/30/22 541 Total Minimum Lease Payments 695,805 Interest Expense relating to future periods (51,256 ) Present Value of minimum lease payments 644,549 Less: Current portion (336,920 ) Non-Current portion $ 307,629 |
Incentive and Non-statutory S39
Incentive and Non-statutory Stock Option Plan (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Common Stock Purchase Options and Warrants | Common stock purchase options and warrants consisted of the following: OPTIONS: # of shares Weighted Ave Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregated Intrinsic Value Outstanding and exercisable, June 30, 2016 610,133 $ 4.90 0.99 $ 799,030 Granted 79,838 $ 4.53 Exercised (84,838 ) $ 4.49 Expired / Cancelled (130,000 ) $ 7.50 Outstanding and exercisable, June 30, 2017 475,133 $ 4.20 1.05 $ 8,413 Granted - - Exercised (35,773 ) $ 3.88 Expired / Cancelled (1,000 ) $ 16.00 Outstanding and exercisable, September 30, 2017 438,360 $ 4.20 0.81 $ - |
Summary of Stock Options and Warrants Outstanding and Exercisable | The following table summarizes information about stock options and warrants outstanding and exercisable at September 30, 2017. Exercise Price Number Outstanding and Exercisable Weighted Average Remaining Contractual Life Weighted Ave Exercise Price OPTIONS: $ 3.88 384,898 0.74 $ 3.88 $ 6.50 53,462 1.35 $ 6.50 Totals 438,360 0.81 $ 4.20 |
Summary of Unvested Stock Grants Awarded as Compensation | The following table summarizes stock grants awarded as compensation: # of shares Weighted Average Grant Date Fair Value ($) Unvested, June 30, 2016 630,228 $ 6.07 Granted 222,146 $ 5.92 Forfeited / Cancelled (5,000 ) $ 5.55 Vested (427,175 ) $ 5.90 Unvested, June 30, 2017 420,199 $ 6.07 Vested (71,971 ) $ 5.90 Unvested, September 30, 2017 348,228 $ 6.16 |
Operating Segments (Tables)
Operating Segments (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Summary of Identifiable Assets | The following table presents a summary of identifiable assets as of September 30, 2017 and June 30, 2017: As of September 30, As of June 30, 2017 2017 Identifiable assets: Corporate headquarters $ 3,398,876 $ 2,922,514 North America 5,736,535 6,717,366 Europe 5,922,323 6,056,514 Asia - Pacific 83,422,229 83,980,936 Consolidated $ 98,479,963 $ 99,677,330 |
Summary of Investment Under Equity Method | The following table presents a summary of investment under equity method as of September 30, 2017 and June 30, 2017: As of September 30, As of June 30, 2017 2017 Investment in WRLD3D: Corporate headquarters $ 1,091,752 $ 1,111,111 Asia - Pacific 2,166,007 1,945,909 Consolidated $ 3,257,759 $ 3,057,020 |
Summary of Operating Information | The following table presents a summary of operating information for the three months ended September 30: For the Three Months Ended September 30, 2017 2016 Restated Revenues from unaffiliated customers: North America $ 848,072 $ 1,841,431 Europe 1,447,824 1,206,049 Asia - Pacific 8,789,932 11,736,829 11,085,828 14,784,309 Revenue from affiliated customers Europe 601,192 736,685 Asia - Pacific 1,131,756 1,555,475 1,732,948 2,292,160 Consolidated $ 12,818,776 $ 17,076,469 Intercompany revenue Europe $ 102,475 $ 136,127 Asia - Pacific 376,937 459,951 Eliminated $ 479,412 $ 596,078 Net income (loss) after taxes and before non-controlling interest: Corporate headquarters $ (1,037,924 ) $ (1,629,517 ) North America (295,646 ) 267,892 Europe 99,390 (100,288 ) Asia - Pacific 1,052,915 1,845,016 Consolidated $ (181,265 ) $ 383,103 |
Summary of Capital Expenditures | The following table presents a summary of capital expenditures for the three months ended September 30: For the Three Months Ended September 30, 2017 2016 Capital expenditures: North America $ - $ 4,103 Europe 76,809 195,180 Asia - Pacific 251,354 355,590 Consolidated $ 328,163 $ 554,873 |
Non-controlling Interest in S41
Non-controlling Interest in Subsidiary (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Noncontrolling Interest [Abstract] | |
Balance of Non-controlling Interest | The Company had non-controlling interests in several of its subsidiaries. The balance of non-controlling interest was as follows: SUBSIDIARY Non-Controlling Interest % Non-Controlling Interest at September 30, 2017 NetSol PK 33.80 % $ 12,708,487 NetSol-Innovation 49.90 % 1,734,427 VLS, VLSH & VLSIL Combined 49.00 % 307,320 NetSol Thai 0.006 % (84 ) Total $ 14,750,150 SUBSIDIARY Non-Controlling Interest % Non-Controlling Interest at June 30, 2017 NetSol PK 33.80 % $ 12,887,938 NetSol-Innovation 49.90 % 1,599,734 VLS, VLHS & VLSIL Combined 49.00 % 311,502 NetSol Thai 0.006 % (92 ) Total $ 14,799,082 |
Restatement of Previously Iss42
Restatement of Previously Issued Financial Statements (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Restated Condensed Consolidated Financial Statements | The following tables present the restated financial statements for the quarter ended September 30, 2016. Balance Sheet As of September 30, 2016 As Originally Presented Amount of Restatement As Restated ASSETS Current assets: Cash and cash equivalents $ 11,156,437 $ 11,156,437 Accounts receivable, net of allowance of $500,853 and $492,498 7,142,255 7,142,255 Accounts receivable, net - related party 5,384,573 5,384,573 Revenues in excess of billings 13,358,858 2,074,911 15,433,769 Revenues in excess of billings - related party 682,049 682,049 Other current assets 3,192,425 3,192,425 Total current assets 40,916,597 2,074,911 42,991,508 Restricted cash 90,000 90,000 Property and equipment, net 22,612,752 22,612,752 Other assets 1,604,731 1,604,731 Intangible assets, net 19,326,259 19,326,259 Goodwill 9,516,568 9,516,568 Total assets $ 94,066,907 $ 2,074,911 $ 96,141,818 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued expenses $ 6,389,128 $ 6,389,128 Current portion of loans and obligations under capitalized leases 4,408,173 4,408,173 Unearned revenues 4,419,692 4,419,692 Common stock to be issued 88,324 88,324 Total current liabilities 15,305,317 - 15,305,317 Long term loans and obligations under capitalized leases; less current maturities 539,859 539,859 Total liabilities 15,845,176 - 15,845,176 Commitments and contingencies Stockholders’ equity: Preferred stock, $.01 par value; 500,000 shares authorized; - - - Common stock, $.01 par value; 14,500,000 shares authorized; 10,882,281 shares issued and 10,855,002 outstanding as of September 30, 2016 and 10,713,372 shares issued and 10,686,093 outstanding as of June 30, 2016 108,823 108,823 Additional paid-in-capital 122,367,231 122,367,231 Treasury stock (27,279 shares) (415,425 ) (415,425 ) Accumulated deficit (39,089,079 ) 1,379,608 (37,709,471 ) Stock subscription receivable (602,811 ) (602,811 ) Other comprehensive loss (17,960,133 ) (17,960,133 ) Total NetSol stockholders’ equity 64,408,606 1,379,608 65,788,214 Non-controlling interest 13,813,125 695,303 14,508,428 Total stockholders’ equity 78,221,731 2,074,911 80,296,642 Total liabilities and stockholders’ equity $ 94,066,907 $ 2,074,911 $ 96,141,818 For the Three Months Ended September 30, 2016 As Originally Amount of Presented Restatement As Restated Net Revenues: License fees $ 3,499,860 $ 1,953,935 $ 5,453,795 Maintenance fees 3,402,821 120,976 3,523,797 Services 5,806,717 5,806,717 License fees - related party 246,957 246,957 Maintenance fees - related party 130,631 130,631 Services - related party 1,914,572 1,914,572 Total net revenues 15,001,558 2,074,911 17,076,469 Cost of revenues: Salaries and consultants 5,893,349 5,893,349 Travel 711,895 711,895 Depreciation and amortization 1,330,872 1,330,872 Other 972,338 972,338 Total cost of revenues 8,908,454 - 8,908,454 Gross profit 6,093,104 2,074,911 8,168,015 Operating expenses: Selling and marketing 2,411,136 2,411,136 Depreciation and amortization 269,097 269,097 General and administrative 4,552,098 4,552,098 Research and development cost 92,932 92,932 Total operating expenses 7,325,263 - 7,325,263 Income (loss) from operations (1,232,159 ) 2,074,911 842,752 Other income and (expenses) Loss on sale of assets (2,403 ) (2,403 ) Interest expense (54,475 ) (54,475 ) Interest income 30,440 30,440 Loss on foreign currency exchange transactions (414,896 ) (414,896 ) Other income 21,560 21,560 Total other income (expenses) (419,774 ) - (419,774 ) Net income (loss) before income taxes (1,651,933 ) 2,074,911 422,978 Income tax provision (39,875 ) (39,875 ) Net income (loss) (1,691,808 ) 2,074,911 383,103 Non-controlling interest (73,911 ) (695,303 ) (769,214 ) Net income (loss) attributable to NetSol $ (1,765,719 ) $ 1,379,608 $ (386,111 ) Net Income (loss) per share: Net income (loss) per common share Basic $ (0.17 ) $ 0.14 $ (0.04 ) Diluted $ (0.17 ) $ 0.14 $ (0.04 ) Weighted average number of shares outstanding Basic 10,697,425 10,697,425 10,697,425 Diluted 10,697,425 10,697,425 10,697,425 For the Three Months Ended September 30, 2016 As Originally Amount of Presented Restatement As Restated Net income (loss) $ (1,765,719 ) $ 1,379,608 $ (386,111 ) Other comprehensive income (loss): Translation adjustment 1,094,074 - 1,094,074 Comprehensive income (loss) (671,645 ) 1,379,608 707,963 Comprehensive income (loss) attributable to non-controlling interest 323,713 - 323,713 Comprehensive income (loss) attributable to NetSol $ (995,358 ) $ 1,379,608 $ 384,250 For the Three Months Ended September 30, 2016 As Originally Amount of Presented Restatement As Restated Cash flows from operating activities: Net income (loss) $ (1,691,808 ) $ 2,074,911 $ 383,103 Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 1,599,969 1,599,969 Loss on sale of assets 2,403 2,403 Stock issued for services 865,456 865,456 Fair market value of warrants and stock options granted 21,804 21,804 Changes in operating assets and liabilities: Accounts receivable 2,336,894 2,336,894 Accounts receivable - related party 121,800 121,800 Revenues in excess of billing (2,746,917 ) (2,074,911 ) (4,821,828 ) Revenues in excess of billing - related party 93,208 93,208 Other current assets 306,339 306,339 Accounts payable and accrued expenses (780,569 ) (780,569 ) Unearned revenue (346,108 ) (346,108 ) Net cash used in operating activities (217,529 ) - (217,529 ) Cash flows from investing activities: Purchases of property and equipment (554,873 ) (554,873 ) Sales of property and equipment 151,818 151,818 Investment (555,555 ) (555,555 ) Net cash used in investing activities (958,610 ) - (958,610 ) Cash flows from financing activities: Proceeds from the exercise of stock options and warrants 276,861 276,861 Proceeds from exercise of subsidiary options 14,013 14,013 Payments on capital lease obligations and loans - net (49,117 ) (49,117 ) Net cash provided by financing activities 241,757 - 241,757 Effect of exchange rate changes 533,292 533,292 Net decrease in cash and cash equivalents (401,090 ) - (401,090 ) Cash and cash equivalents, beginning of the period 11,557,527 11,557,527 Cash and cash equivalents, end of period $ 11,156,437 $ - $ 11,156,437 |
Basis of Presentation and Pri43
Basis of Presentation and Principles of Consolidation - Schedule of Condensed Consolidated financial statements (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Services | $ 7,017,737 | $ 5,556,135 |
Services - related party | 1,853,877 | 2,165,154 |
Total net revenues | 12,818,776 | 17,076,469 |
Selling and marketing | 1,711,296 | 2,344,038 |
General and administrative | 3,787,558 | 4,619,196 |
Total operating expenses | $ 5,929,812 | 7,325,263 |
Originally Reported [Member] | ||
Services | 5,806,717 | |
Services - related party | 1,914,572 | |
Total net revenues | 7,721,289 | |
Selling and marketing | 2,411,136 | |
General and administrative | 4,552,098 | |
Total operating expenses | 6,963,234 | |
Net income (loss) after taxes and before non-controlling interest | 215,499 | |
Originally Reported [Member] | Corporate Headquaters [Member] | ||
Net income (loss) after taxes and before non-controlling interest | (1,562,419) | |
Originally Reported [Member] | Asia - Pacific [Member] | ||
Net income (loss) after taxes and before non-controlling interest | 1,777,918 | |
Amount of Restatement [Member] | ||
Services | 5,556,135 | |
Services - related party | 2,165,154 | |
Total net revenues | 7,721,289 | |
Selling and marketing | 2,344,038 | |
General and administrative | 4,619,196 | |
Total operating expenses | 6,963,234 | |
Net income (loss) after taxes and before non-controlling interest | 215,499 | |
Amount of Restatement [Member] | Corporate Headquarters [Member] | ||
Net income (loss) after taxes and before non-controlling interest | (1,629,517) | |
Amount of Restatement [Member] | Asia - Pacific [Member] | ||
Net income (loss) after taxes and before non-controlling interest | $ 1,845,016 |
Accounting Policies (Details Na
Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2017 | Jun. 30, 2017 | |
Accounting Policies [Abstract] | ||
Uninsured deposits related to cash deposits | $ 6,768,138 | $ 11,564,343 |
Weighted average borrowing rate | 3.96% |
Accounting Policies - Schedule
Accounting Policies - Schedule of Fair Value of Financial Assets Measured On Recurring Basis (Details) - USD ($) | Sep. 30, 2017 | Jun. 30, 2017 |
Revenue in excess of billing - long term | $ 5,225,260 | $ 5,173,538 |
Total | 5,225,260 | 5,173,538 |
Level 1 [Member] | ||
Revenue in excess of billing - long term | ||
Total | ||
Level 2 [Member] | ||
Revenue in excess of billing - long term | ||
Total | ||
Level 3 [Member] | ||
Revenue in excess of billing - long term | 5,225,260 | 5,173,538 |
Total | $ 5,225,260 | $ 5,173,538 |
Accounting Policies - Schedul46
Accounting Policies - Schedule of Fair Value of Financial Instruments Reconciliation (Details) | 3 Months Ended |
Sep. 30, 2017USD ($) | |
Revenue in excess of billing long term begining balance | $ 5,173,538 |
Amortization during the period | 51,722 |
Revenue in excess of billing long term ending balance | 5,225,260 |
Fair Value Discount [Member] | |
Revenue in excess of billing long term begining balance | (310,331) |
Amortization during the period | 51,722 |
Revenue in excess of billing long term ending balance | (258,609) |
Revenue in Excess of Billing - Long Term [Member] | |
Revenue in excess of billing long term begining balance | 5,483,869 |
Amortization during the period | |
Revenue in excess of billing long term ending balance | $ 5,483,869 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Potential dilutive shares | 786,588 | 1,291,554 |
Stock Options [Member] | ||
Potential dilutive shares | 438,360 | 610,133 |
Warrants [Member] | ||
Potential dilutive shares | 11,075 | |
Share Grants [Member] | ||
Potential dilutive shares | 348,228 | 670,346 |
Other Comprehensive Income an48
Other Comprehensive Income and Foreign Currency (Details Narrative) - USD ($) | 3 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | |
Other Comprehensive Income And Foreign Currency | |||
Accumulated other comprehensive loss | $ 18,663,149 | $ 17,960,133 | $ 18,074,570 |
Comprehensive income (loss) | $ (588,579) | $ 770,361 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Mar. 02, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 |
Services - related party | $ 1,853,877 | $ 2,165,154 | ||
Accounts receivable, related parties | 2,611,562 | 5,384,573 | $ 1,644,942 | |
Percentage of investment in subsidiary | 4.90% | |||
Payments for financial interest | $ 1,111,111 | |||
NetSol PK [Member] | ||||
Services - related party | 268,300 | 250,582 | ||
Percentage of investment in subsidiary | 12.20% | |||
Payments for financial interest | $ 2,777,778 | |||
G-Force LLC [Member] | Chief Executive Officer and Director [Member] | ||||
Percentage of investment in subsidiary | 4.90% | |||
Payments for financial interest | $ 1,111,111 | |||
NetSol-Innovation [Member] | ||||
Accounts receivable, related parties | 2,212,132 | 1,462,078 | ||
NetSol-Innovation [Member] | ||||
Services - related party | 1,131,756 | 1,555,475 | ||
Investec Asset Finance [Member] | ||||
Services - related party | 601,192 | $ 736,685 | ||
Accounts receivable, related parties | $ 350,310 | $ 133,218 |
Major Customers (Details Narrat
Major Customers (Details Narrative) | Dec. 21, 2015USD ($) | Dec. 21, 2015EUR (€) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Dec. 21, 2015EUR (€) |
Revenue in excess of billing - long term | $ 5,225,260 | $ 5,173,538 | ||||
Revenues in excess of billings | 22,104,283 | $ 15,433,769 | 19,126,389 | |||
Customer [Member] | ||||||
Fixed annual payments for years 1- 5 | $ 6,882,000 | |||||
Fixed annual payments for years 6- 10 | $ 9,824,000 | |||||
EURO [Member] | Customer [Member] | ||||||
Fixed annual payments for years 1- 5 | € | € 5,850,000 | |||||
Fixed annual payments for years 6- 10 | € | € 8,350,000 | |||||
Daimler Financial Services [Member] | ||||||
Accounts receivable, gross | 1,682,073 | 1,620,717 | ||||
Revenue in excess of billing - long term | $ 22,290,975 | 18,579,540 | ||||
Agreement description | On December 21, 2015, the Company entered into a 10 year contract with Daimler Financial Services to provide license, maintenance and services for 12 countries in the Asia Pacific Region. The implementation phase is expected to be over a five year period with maintenance and support over 10 years. | On December 21, 2015, the Company entered into a 10 year contract with Daimler Financial Services to provide license, maintenance and services for 12 countries in the Asia Pacific Region. The implementation phase is expected to be over a five year period with maintenance and support over 10 years. | ||||
License and maintenance fees | $ 83,529,000 | |||||
Daimler Financial Services [Member] | EURO [Member] | ||||||
License and maintenance fees | € | € 71,000,000 | |||||
Daimler Financial Services [Member] | Revenue [Member] | ||||||
Concentration risk, percentage | 32.98% | 41.11% | ||||
Innovation Group [Member] | Revenue [Member] | ||||||
Concentration risk, percentage | 8.83% | 9.11% | ||||
NetSol-Innovation [Member] | ||||||
Accounts receivable, gross | $ 2,212,132 | 1,462,078 | ||||
Revenue in excess of billing - long term | ||||||
Revenues in excess of billings | $ 5,225,260 | $ 5,173,538 |
Convertible Note Receivable -51
Convertible Note Receivable - Related Party (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2017 | Jun. 30, 2017 | |
Convertible promissory note, principal amount | $ 750,000 | |
Convertible note receivable - related party | $ 700,000 | $ 200,000 |
Convertible note, interest rate | 5.00% | |
Convertible note, maturity date | Feb. 1, 2018 | |
Conversion price | $ 0.6788 | |
Convertible Promissory Note Agreement [Member] | WRLD3D, Inc. [Member] | ||
Proceeds from loan receivable | $ 50,000 | |
Minimum [Member] | ||
Conversion equity financing | 2,000,000 | |
Maximum [Member] | ||
Conversion equity financing | $ 2,000,000 |
Other Current Assets - Schedule
Other Current Assets - Schedule of Other Current Assets (Details) - USD ($) | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Prepaid Expenses | $ 725,959 | $ 597,687 | |
Advance Income Tax | 1,101,323 | 1,052,935 | |
Employee Advances | 153,456 | 128,100 | |
Security Deposits | 88,173 | 103,255 | |
Other Receivables | 515,197 | 252,590 | |
Other Assets | 356,491 | 329,319 | |
Total | $ 2,940,599 | $ 2,463,886 | $ 3,192,425 |
Revenue in Excess of Billings53
Revenue in Excess of Billings - Long Term (Details Narrative) | 3 Months Ended |
Sep. 30, 2017USD ($) | |
Contractors [Abstract] | |
Accreted amount | $ 51,722 |
Interest rate discount | 3.96% |
Revenue in Excess of Billings54
Revenue in Excess of Billings - Long Term - Schedule of Revenue in Excess of Billings (Details) - USD ($) | Sep. 30, 2017 | Jun. 30, 2017 |
Contractors [Abstract] | ||
Revenue in excess of billing - long term | $ 5,483,869 | $ 5,483,869 |
Present value discount | (258,609) | (310,331) |
Net Balance | $ 5,225,260 | $ 5,173,538 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 728,659 | $ 899,303 |
Depreciation reflected in cost of revenues | $ 482,786 | $ 630,206 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 |
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Subtotal | $ 45,740,761 | $ 45,950,573 | |
Accumulated Depreciation | (26,094,169) | (25,579,870) | |
Property and Equipment, Net | 19,646,592 | 20,370,703 | $ 22,612,752 |
Office Furniture and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Subtotal | 3,882,351 | 3,755,710 | |
Computer Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Subtotal | 26,647,891 | 26,693,730 | |
Assets Under Capital Leases [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Subtotal | 1,577,465 | 1,965,650 | |
Building [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Subtotal | 9,164,885 | 9,243,866 | |
Land [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Subtotal | 2,397,930 | 2,428,626 | |
Autos [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Subtotal | 1,483,206 | 1,270,339 | |
Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Subtotal | $ 587,033 | $ 592,652 |
Property and Equipment - Summar
Property and Equipment - Summary of Fixed Assets Held Under Capital Leases (Details) - USD ($) | Sep. 30, 2017 | Jun. 30, 2017 |
Capital Leased Assets [Line Items] | ||
Fixed assets held under capital leases, Total | $ 1,577,465 | $ 1,965,650 |
Less: Accumulated Depreciation - Net | (549,043) | (711,622) |
Fixed assets held under capital leases, Net | 1,028,422 | 1,254,028 |
Computers and Other Equipment [Member] | ||
Capital Leased Assets [Line Items] | ||
Fixed assets held under capital leases, Total | 232,497 | 309,863 |
Furniture and Fixtures [Member] | ||
Capital Leased Assets [Line Items] | ||
Fixed assets held under capital leases, Total | 145,258 | 227,914 |
Vehicles [Member] | ||
Capital Leased Assets [Line Items] | ||
Fixed assets held under capital leases, Total | $ 1,199,710 | $ 1,427,873 |
Other Long Term Assets (Details
Other Long Term Assets (Details Narrative) - USD ($) | 3 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | |
Qualified financing, description | In connection with the investment, the Company and NetSol PK received a warrant to purchase preferred stock of WRLD3D which included the following key terms and features: | ||
Expiration date of warrant | Mar. 2, 2020 | ||
Proceeds from qualified financing | $ 2,000,000 | ||
Number of common stock shares issuable amount | $ 1,250,000 | ||
Percentage of per share price of next round preferred stock sold in qualified financing | 70.00% | ||
Number of shares of common stock outstanding immediately prior the qualified financing | 25,000,000 | ||
Services-related party | $ 1,853,877 | $ 2,165,154 | |
Accounts receivable | 49,120 | $ 49,646 | |
Revenue in excess of billing | 80,057 | $ 80,705 | |
Services | 7,017,737 | 5,556,135 | |
NetSol PK [Member] | |||
Services-related party | 268,300 | 250,582 | |
Services | $ 268,300 | $ 248,658 |
Other Long Term Assets - Schedu
Other Long Term Assets - Schedule of Other Long Term Assets (Details) - USD ($) | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||
Investment (1) | [1] | $ 3,257,759 | $ 3,057,020 | |
Long Term Security Deposits | 142,659 | 154,275 | ||
Total | $ 3,400,418 | $ 3,211,295 | $ 1,604,731 | |
[1] | Investment in WRLD3D On March 2, 2016, the Company purchased a 4.9% interest in WRLD3D, a non-public company, for $1,111,111. The Company paid $555,556 at the initial closing and $555,555 on September 1, 2016. NetSol PK, the subsidiary of the Company, purchased a 12.2% investment in WRLD3D, for $2,777,778 which will be earned over future periods by providing IT and enterprise software solutions. Per the agreement, NetSol PK is to provide a minimum of $200,000 of services in each three-month period and the entire balance is required to be provided within three years of the date of the agreement. If NetSol PK fails to provide the future services, it may be required to forfeit the shares back to WRLD3D. As of September 30, the investment earned by NetSol PK is $2,214,209. |
Other Long Term Assets - Sche60
Other Long Term Assets - Schedule of Other Long Term Assets (Details) (Parenthetical) - USD ($) | Sep. 01, 2016 | Mar. 02, 2016 | Sep. 30, 2017 | Sep. 30, 2016 |
Payments for financial interest | $ 1,111,111 | |||
Payments to acquire investment | $ 555,555 | |||
Revenue from services | 1,853,877 | $ 2,165,154 | ||
NetSol PK [Member] | ||||
Payments to acquire investment | $ 2,777,778 | |||
Purchase of investment, percentage | 12.20% | |||
Investment earned | $ 2,214,209 | |||
NetSol PK [Member] | Minimum [Member] | ||||
Revenue from services | $ 200,000 | |||
WRLD3D [Member] | ||||
Percentage of interest in subsidiary | 4.90% | |||
Payments for financial interest | $ 1,111,111 | |||
Payments to acquire investment | $ 555,555 | $ 555,556 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | |
Finite-lived unamortized amount | $ 16,139,921 | $ 19,326,259 | $ 17,043,151 |
Amortization expenses of intangible assets | 27,603,627 | $ 27,067,358 | |
Product Licenses [Member] | |||
Finite-lived unamortized amount | $ 16,139,921 | ||
Finite-lived intangible assets, amortization over period | 5 years 9 months | ||
Amortization expenses of intangible assets | $ 690,327 | $ 700,666 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Product Licenses - Cost | $ 47,244,997 | $ 47,244,997 | $ 47,244,997 |
Effect of Translation Adjustment | (3,501,449) | (3,134,488) | |
Accumulated Amortization | (27,603,627) | (27,067,358) | |
Net Balance | $ 16,139,921 | $ 19,326,259 | $ 17,043,151 |
Intangible Assets - Estimated A
Intangible Assets - Estimated Amortization Expense of Intangible Assets Over Next Five Years (Details) - USD ($) | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
September 30, 2018 | $ 2,743,467 | ||
September 30, 2019 | 2,743,467 | ||
September 30, 2020 | 2,743,467 | ||
September 30, 2021 | 2,743,467 | ||
September 30, 2022 | 2,743,467 | ||
Thereafter | 2,422,586 | ||
Total | $ 16,139,921 | $ 17,043,151 | $ 19,326,259 |
Accounts Payable and Accrued 64
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 |
Payables and Accruals [Abstract] | |||
Accounts Payable | $ 1,466,806 | $ 1,466,265 | |
Accrued Liabilities | 4,865,906 | 4,498,958 | |
Accrued Payroll & Taxes | 447,549 | 520,719 | |
Taxes Payable | 176,619 | 174,485 | |
Other Payable | 166,268 | 219,767 | |
Total | $ 7,123,148 | $ 6,880,194 | $ 6,389,128 |
Debts - Components of Notes Pay
Debts - Components of Notes Payable and Capital Leases (Details) - USD ($) | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 | |
Total | $ 9,679,777 | $ 9,861,787 | ||
Current Maturities | 9,679,777 | 9,861,787 | ||
Long-Term Maturities | ||||
Subsidiary Capital Leases, Total | [1] | 644,549 | 727,770 | |
Subsidiary Capital Leases, Current Maturities | [1] | 336,920 | 361,008 | |
Subsidiary Capital Leases, Long-Term Maturities | [1] | 307,629 | 366,762 | |
Total | 10,324,326 | 10,589,557 | ||
Current Maturities | 10,016,697 | 10,222,795 | $ 4,408,173 | |
Long-Term Maturities | 307,629 | 366,762 | $ 539,859 | |
D&O Insurance [Member] | ||||
Total | [2] | 31,153 | 87,485 | |
Current Maturities | [2] | 31,153 | 87,485 | |
Long-Term Maturities | [2] | |||
Bank Overdraft Facility [Member] | ||||
Total | [3] | 216,442 | 221,379 | |
Current Maturities | [3] | 216,442 | 221,379 | |
Long-Term Maturities | [3] | |||
Loan Payable Bank - Export Refinance [Member] | ||||
Total | [4] | 4,716,090 | 4,776,461 | |
Current Maturities | [4] | 4,716,090 | 4,776,461 | |
Long-Term Maturities | [4] | |||
Loan Payable Bank - Export Refinance II [Member] | ||||
Total | [5] | 3,301,265 | 1,910,585 | |
Current Maturities | [5] | 3,301,265 | 1,910,585 | |
Long-Term Maturities | [5] | |||
Loan Payable Bank - Running Finance [Member] | ||||
Total | [6] | 1,414,827 | 2,865,877 | |
Current Maturities | [6] | 1,414,827 | 2,865,877 | |
Long-Term Maturities | [6] | |||
[1] | The Company leases various fixed assets under capital lease arrangements expiring in various years through 2022. 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, 2017 and 2016. | |||
[2] | The Company finances Directors' and Officers' ("D&O") liability insurance, Errors and Omissions ("E&O") liability insurance and some account payables, for which the D&O and E&O balances are renewed on an annual basis and, as such, are recorded in current maturities. The interest rate on these financings were ranging from 4.8% to 7.69% as of September 30, 2017 and June 30, 2017. | |||
[3] | The Company's subsidiary, NTE, has an overdraft facility with HSBC Bank plc whereby the bank would cover any overdrafts up to £300,000, or approximately $400,000. The annual interest rate was 4.75% as of September 30, 2017. Total outstanding balance as of September 30, 2017 was £162,332 or approximately $216,442. Interest expense for three months ended September 30, 2017 and 2016, was $2,054 and $Nil, 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, 2017, NTE was in compliance with this covenant. | |||
[4] | The Company's subsidiary, NetSol PK, has an export refinance facility with- Askari Bank Limited, secured by NetSol PK's assets. This is a revolving loan that matures every six months. Total facility amount is Rs. 500,000,000 or $4,716,090 at September 30, 2017 and June 30, 2017. The interest rate for the loans was 3% at September 30, 2017 and June 30, 2017. Interest expense for the three months ended September 30, 2017 and 2016 was $35,898 and $29,065, respectively.This facility requires NetSol PK to maintain a long-term debt equity ratio of 60:40 and the current ratio of 1:1. As of September 30, 2017, NetSol PK was in compliance with this covenants. | |||
[5] | The Company's subsidiary, NetSol PK, has an export refinance facility with Samba Bank Limited, secured by NetSol PK's assets. This is a revolving loan that matures every six months. Total facility amount is Rs. 350,000,000 or $3,301,265 and Rs. 200,000,000 or $1,910,585, at September 30, 2017 and June 30, 2017, respectively. The interest rate for the loans was 3% at September 30, 2017 and June 30, 2017. Interest expense for the three months ended September 30, 2017 and 2016 was $22,122 and $Nil, respectively. | |||
[6] | The Company's subsidiary, NetSol PK, has a running finance facility with Samba Bank Limited, secured by NetSol PK's assets. Total facility amount is Rs. 150,000,000 or $1,414,827 and Rs. 300,000,000 or $2,865,877, at September 30, 2017 and June 30, 2017, respectively. The interest rate for the loans was 8.13% at September 30, 2017 and June 30, 2017, respectively. Interest expense for the three months ended September 30, 20147 and 2016 was $44,095 and $Nil, respectively.During the tenure of loan, the facilities from Samba Bank Limited require NetSol PK to maintain at a minimum a current ratio of 1:1, an interest coverage ratio of 4 times, a leverage ratio of 2 times, and a debt service coverage ratio of 4 times. As of September 30, 2017, NetSol PK was in compliance with these covenants. |
Debts - Components of Notes P66
Debts - Components of Notes Payable and Capital Leases (Details) (Parenthetical) | 3 Months Ended | |||||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017GBP (£) | Sep. 30, 2017INR (₨) | Jun. 30, 2017USD ($) | Jun. 30, 2017INR (₨) | |
Debt annual interest rate | 3.96% | |||||
Total outstanding balance | $ 9,679,777 | $ 9,861,787 | ||||
Debt instrument, interest rate | 5.00% | 5.00% | 5.00% | |||
Capital Lease Arrangements [Member] | ||||||
Lease arrangement expiration | years through 2022 | |||||
HSBC Bank [Member] | NTE [Member] | ||||||
Line of credit facility, maximum borrowing capacity | $ 400,000 | |||||
Debt annual interest rate | 4.75% | |||||
Total outstanding balance | $ 216,442 | |||||
Interest expense | $ 2,054 | |||||
Line of credit variable interest rate | 200.00% | |||||
HSBC Bank [Member] | NTE [Member] | GBP [Member] | ||||||
Line of credit facility, maximum borrowing capacity | £ | £ 300,000 | |||||
Total outstanding balance | £ | £ 162,332 | |||||
Askari Bank Limited [Member] | NetSol PK [Member] | Refinance Facility [Member] | ||||||
Interest expense | $ 35,898 | 29,065 | ||||
Line of credit | $ 4,716,090 | $ 4,716,090 | ||||
Debt instrument, interest rate | 3.00% | 3.00% | 3.00% | 3.00% | 3.00% | |
Long term debt covenant description | long term debt equity ratio of 60:40 and the current ratio of 1:1. | |||||
Debt maturity term description | revolving loan that matures every six months. | |||||
Askari Bank Limited [Member] | NetSol PK [Member] | INR [Member] | Refinance Facility [Member] | ||||||
Line of credit | ₨ | ₨ 500,000,000 | ₨ 500,000,000 | ||||
Samba Bank Limited [Member] | NetSol PK [Member] | Refinance Facility [Member] | ||||||
Interest expense | $ 22,122 | |||||
Line of credit | $ 3,301,265 | $ 1,910,585 | ||||
Debt instrument, interest rate | 3.00% | 3.00% | 3.00% | 3.00% | 3.00% | |
Samba Bank Limited [Member] | NetSol PK [Member] | Running Facility [Member] | ||||||
Interest expense | $ 44,095 | |||||
Line of credit | $ 1,414,827 | $ 2,865,877 | ||||
Debt instrument, interest rate | 8.13% | 8.13% | 8.13% | 8.13% | 8.13% | |
Long term debt covenant description | The facilities from Samba Bank Limited require NetSol PK to maintain at a minimum a current ratio of 1:1, an interest coverage ratio of 4 times, a leverage ratio of 2 times, and a debt service coverage ratio of 4 times. As of September 30, 2017, NetSol PK was in compliance with these covenants. | |||||
Samba Bank Limited [Member] | NetSol PK [Member] | INR [Member] | Refinance Facility [Member] | ||||||
Line of credit | ₨ | ₨ 350,000,000 | ₨ 200,000,000 | ||||
Samba Bank Limited [Member] | NetSol PK [Member] | INR [Member] | Running Facility [Member] | ||||||
Line of credit | ₨ | ₨ 150,000,000 | ₨ 300,000,000 | ||||
Directors' and Officers And Errors and Omissions Liability Insurance [Member] | Minimum [Member] | ||||||
Line of credit facility interest rate | 4.80% | 4.80% | 4.80% | 4.80% | 4.80% | |
Directors' and Officers And Errors and Omissions Liability Insurance [Member] | Maximum [Member] | ||||||
Line of credit facility interest rate | 7.69% | 7.69% | 7.69% | 7.69% | 7.69% |
Debts - Schedule of Aggregate M
Debts - Schedule of Aggregate Minimum Future Lease Payments Under Capital Leases (Details) - USD ($) | Sep. 30, 2017 | Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |||
Due FYE 9/30/18 | $ 372,280 | ||
Due FYE 9/30/19 | 262,626 | ||
Due FYE 9/30/20 | 53,872 | ||
Due FYE 9/30/21 | 6,486 | ||
Due FYE 9/30/22 | 541 | ||
Total Minimum Lease Payments | 695,805 | ||
Interest Expense relating to future periods | (51,256) | ||
Present Value of minimum lease payments | 644,549 | ||
Less: Current portion | [1] | (336,920) | $ (361,008) |
Non-Current portion | [1] | $ 307,629 | $ 366,762 |
[1] | The Company leases various fixed assets under capital lease arrangements expiring in various years through 2022. 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, 2017 and 2016. |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 3 Months Ended | ||
Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 | |
Subscription receivable | $ 88,324 | $ 88,324 | $ 88,324 |
Purchase of common stock, shares | 111,780 | ||
Common stock share price | $ 4.48 | ||
Stock Options [Member] | |||
Subscription receivable | $ 23,585 | ||
Stock Option Agreement [Member] | |||
Issuance of stock options exercise value of common stock | $ 138,800 | ||
Issuance of stock options exercise shares of common stock | 35,773 | ||
Common stock price per share | $ 3.88 | ||
Officers [Member] | |||
Issuance of common stock shares for services rendered | 13,068 | ||
Issuance of common stock value for services rendered | $ 81,675 | ||
Independent Members [Member] | |||
Issuance of common stock shares for services rendered | 9,699 | ||
Issuance of common stock value for services rendered | $ 55,080 | ||
Employees [Member] | Employment Agreements [Member] | |||
Issuance of common stock shares under employment agreement | 49,204 | ||
Issuance of common stock value under employment agreement | $ 302,553 |
Incentive and Non-statutory S69
Incentive and Non-statutory Stock Option Plan (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Stock compensation expense | $ 427,809 | $ 865,456 |
Compensation expense related to unvested options yet to be recognized | $ 2,137,629 |
Incentive and Non-statutory S70
Incentive and Non-statutory Stock Option Plan - Schedule of Common Stock Purchase Options and Warrants (Details) - Options [Member] - USD ($) | 3 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Jun. 30, 2017 | |
Number of shares, Outstanding and Exercisable Beginning | 475,133 | 610,133 |
Number of shares, Granted | 79,838 | |
Number of shares, Exercised | (35,773) | (84,838) |
Number of shares, Expired / Cancelled | (1,000) | (130,000) |
Number of shares, Outstanding and Exercisable Ending | 438,360 | 475,133 |
Weighted Average Exercise Price, Outstanding and Exercisable Beginning | $ 4.20 | $ 4.90 |
Weighted Average Exercise Price, Granted | 4.53 | |
Weighted Average Exercise Price, Exercised | 3.88 | 4.49 |
Weighted Average Exercise Price, Expired / Cancelled | 16 | 7.50 |
Weighted Average Exercise Price, Outstanding and Exercisable Ending | $ 4.20 | $ 4.20 |
Weighted Average Remaining Contractual Life, Outstanding and Exercisable Beginning | 1 year 18 days | 11 months 26 days |
Weighted Average Remaining Contractual Life, Outstanding and Exercisable Ending | 9 months 22 days | 1 year 18 days |
Aggregated Intrinsic Value, Outstanding and Exercisable Beginning | $ 8,413 | $ 799,030 |
Aggregated Intrinsic Value, Outstanding and Exercisable Ending | $ 8,413 |
Incentive and Non-statutory S71
Incentive and Non-statutory Stock Option Plan - Summary of Stock Options and Warrants Outstanding and Exercisable (Details) - Options [Member] - $ / shares | 3 Months Ended | ||
Sep. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | |
Number Outstanding and Exercisable, shares | 438,360 | 475,133 | 610,133 |
Weighted Average Remaining Contractual Life | 9 months 22 days | ||
Weighted Average Exercise Price | $ 4.20 | ||
Price Range One [Member] | |||
Exercise Price | $ 3.88 | ||
Number Outstanding and Exercisable, shares | 384,898 | ||
Weighted Average Remaining Contractual Life | 8 months 26 days | ||
Weighted Average Exercise Price | $ 3.88 | ||
Price Range Two [Member] | |||
Exercise Price | $ 6.50 | ||
Number Outstanding and Exercisable, shares | 53,462 | ||
Weighted Average Remaining Contractual Life | 1 year 4 months 6 days | ||
Weighted Average Exercise Price | $ 6.50 |
Incentive and Non-statutory S72
Incentive and Non-statutory Stock Option Plan - Summary of Unvested Stock Grants Awarded as Compensation (Details) - $ / shares | 3 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Number of shares, Unvested beginning balance | 420,199 | 630,228 |
Number of shares, Granted | 222,146 | |
Number of shares, Forfeited / Cancelled | (5,000) | |
Number of shares, Vested | (71,971) | (427,175) |
Number of shares, Unvested ending balance | 348,228 | 420,199 |
Weighted Average Grant Date Fair Value, Unvested beginning balance | $ 6.07 | $ 6.07 |
Weighted Average Grant Date Fair Value, Granted | 5.92 | |
Weighted Average Grant Date Fair Value, Forfeited / Cancelled | 5.55 | |
Weighted Average Grant Date Fair Value, Vested | 5.90 | 5.90 |
Weighted Average Grant Date Fair Value, Unvested ending balance | $ 6.16 | $ 6.07 |
Contingencies (Details Narrativ
Contingencies (Details Narrative) - Apr. 07, 2017 | USD ($) | GBP (£) |
Damages Sought, Value | $ | $ 266,667 | |
GBP [Member] | ||
Damages Sought, Value | £ | £ 200,000 |
Operating Segments (Details Nar
Operating Segments (Details Narrative) | 3 Months Ended |
Sep. 30, 2017Segment | |
Segment Reporting [Abstract] | |
Number of Operating Segments | 3 |
Operating Segments - Summary of
Operating Segments - Summary of Identifiable Assets (Details) - USD ($) | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 |
Identifiable Assets | $ 98,479,963 | $ 99,677,330 | $ 96,141,818 |
Corporate Headquarters [Member] | |||
Identifiable Assets | 3,398,876 | 2,922,514 | |
North America [Member] | |||
Identifiable Assets | 5,736,535 | 6,717,366 | |
Europe [Member] | |||
Identifiable Assets | 5,922,323 | 6,056,514 | |
Asia - Pacific [Member] | |||
Identifiable Assets | $ 83,422,229 | $ 83,980,936 |
Operating Segments - Summary 76
Operating Segments - Summary of Investment Under Equity Method (Details) - USD ($) | Sep. 30, 2017 | Jun. 30, 2017 |
Equity method investments | $ 3,257,759 | $ 3,057,020 |
Corporate Headquarters [Member] | ||
Equity method investments | 1,091,752 | 1,111,111 |
Asia - Pacific [Member] | ||
Equity method investments | $ 2,166,007 | $ 1,945,909 |
Operating Segments - Summary 77
Operating Segments - Summary of Operating Information (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues | $ 12,818,776 | $ 17,076,469 |
Net income (loss) after taxes and before non-controlling interest | (181,265) | 383,103 |
Intercompany Revenue [Member] | ||
Revenues | 479,412 | 596,078 |
North America [Member] | ||
Net income (loss) after taxes and before non-controlling interest | (295,646) | 267,892 |
Europe [Member] | ||
Net income (loss) after taxes and before non-controlling interest | 99,390 | (100,288) |
Europe [Member] | Intercompany Revenue [Member] | ||
Revenues | 102,475 | 136,127 |
Asia - Pacific [Member] | ||
Net income (loss) after taxes and before non-controlling interest | 1,052,915 | 1,845,016 |
Asia - Pacific [Member] | Intercompany Revenue [Member] | ||
Revenues | 376,937 | 459,951 |
Corporate Headquaters [Member] | ||
Net income (loss) after taxes and before non-controlling interest | (1,037,924) | (1,629,517) |
Unaffiliated Customers [Member] | ||
Revenues | 11,085,828 | 14,784,309 |
Unaffiliated Customers [Member] | North America [Member] | ||
Revenues | 848,072 | 1,841,431 |
Unaffiliated Customers [Member] | Europe [Member] | ||
Revenues | 1,447,824 | 1,206,049 |
Unaffiliated Customers [Member] | Asia - Pacific [Member] | ||
Revenues | 8,789,932 | 11,736,829 |
Affiliated Customers [Member] | ||
Revenues | 1,732,948 | 2,292,160 |
Affiliated Customers [Member] | Europe [Member] | ||
Revenues | 601,192 | 736,685 |
Affiliated Customers [Member] | Asia - Pacific [Member] | ||
Revenues | $ 1,131,756 | $ 1,555,475 |
Operating Segments - Summary 78
Operating Segments - Summary of Capital Expenditures (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Capital expenditures | $ 328,163 | $ 554,873 |
North America [Member] | ||
Capital expenditures | 4,103 | |
Europe [Member] | ||
Capital expenditures | 76,809 | 195,180 |
Asia - Pacific [Member] | ||
Capital expenditures | $ 251,354 | $ 355,590 |
Non-Controlling Interest in S79
Non-Controlling Interest in Subsidiary - Balance of Non-Controlling Interest (Details) - USD ($) | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 |
Non-Controlling Interest | $ 14,750,150 | $ 14,799,082 | $ 14,508,428 |
NetSol PK [Member] | |||
Non-Controlling Interest, Percentage | 33.80% | 33.80% | |
Non-Controlling Interest | $ 12,708,487 | $ 12,887,938 | |
NetSol-Innovation [Member] | |||
Non-Controlling Interest, Percentage | 49.90% | 49.90% | |
Non-Controlling Interest | $ 1,734,427 | $ 1,599,734 | |
VLS, VLHS And VLSIL Combined [Member] | |||
Non-Controlling Interest, Percentage | 49.00% | ||
Non-Controlling Interest | $ 307,320 | ||
NetSol Thai [Member] | |||
Non-Controlling Interest, Percentage | 0.006% | 0.006% | |
Non-Controlling Interest | $ (84) | $ (92) | |
VLS, VLSH And VLSIL Combined [Member] | |||
Non-Controlling Interest, Percentage | 49.00% | ||
Non-Controlling Interest | $ 311,502 |
Restatement of Previously Iss80
Restatement of Previously Issued Financial Statements (Details Narrative) - USD ($) | Dec. 21, 2015 | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Contract term | 10 years | |||
License revenue | $ 326,066 | $ 5,453,795 | ||
Maintenance revenue | $ 3,473,725 | 3,523,797 | ||
Amount of Restatement [Member] | ||||
License revenue | $ 1,580,529 | 1,953,935 | ||
Maintenance revenue | $ 198,797 | $ 120,976 |
Restatement of Previously Iss81
Restatement of Previously Issued Financial Statements - Schedule of Condensed Consolidated Financial Statements (Details) - USD ($) | 3 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 | |
Cash and cash equivalents | $ 14,172,954 | $ 11,156,437 | $ 8,554,815 | $ 14,172,954 | $ 11,156,437 |
Accounts receivable, net of allowance of $500,853 and $492,498 | 7,469,888 | 6,583,199 | 7,142,255 | ||
Accounts receivable, net - related party | 2,611,562 | 1,644,942 | 5,384,573 | ||
Revenues in excess of billings | 22,104,283 | 19,126,389 | 15,433,769 | ||
Revenues in excess of billings - related party | 80,057 | 80,705 | 682,049 | ||
Other current assets | 2,940,599 | 2,463,886 | 3,192,425 | ||
Total current assets | 44,461,204 | 44,272,075 | 42,991,508 | ||
Restricted cash | 90,000 | 90,000 | 90,000 | ||
Property and equipment, net | 19,646,592 | 20,370,703 | 22,612,752 | ||
Other assets | 3,400,418 | 3,211,295 | 1,604,731 | ||
Intangible assets, net | 16,139,921 | 17,043,151 | 19,326,259 | ||
Goodwill | 9,516,568 | 9,516,568 | 9,516,568 | ||
Total assets | 98,479,963 | 99,677,330 | 96,141,818 | ||
Accounts payable and accrued expenses | 7,123,148 | 6,880,194 | 6,389,128 | ||
Current portion of loans and obligations under capitalized leases | 10,016,697 | 10,222,795 | 4,408,173 | ||
Unearned revenues | 3,656,591 | 3,925,702 | 4,419,692 | ||
Common stock to be issued | 88,324 | 88,324 | 88,324 | ||
Total current liabilities | 20,884,760 | 21,117,015 | 15,305,317 | ||
Long term loans and obligations under capitalized leases; less current maturities | 307,629 | 366,762 | 539,859 | ||
Total liabilities | 21,192,389 | 21,483,777 | 15,845,176 | ||
Commitments and contingencies | |||||
Preferred stock, $.01 par value; 500,000 shares authorized; | |||||
Common stock, $.01 par value; 14,500,000 shares authorized; 10,882,281 shares issued and 10,855,002 outstanding as of September 30, 2016 and 10,713,372 shares issued and 10,686,093 outstanding as of June 30, 2016 | 113,331 | 112,254 | 108,823 | ||
Additional paid-in-capital | 124,987,029 | 124,409,998 | 122,367,231 | ||
Treasury stock (27,279 shares) | (954,973) | (454,310) | (415,425) | ||
Accumulated deficit | (42,670,888) | (42,301,390) | (37,709,471) | ||
Stock subscription receivable | (273,926) | (297,511) | (602,811) | ||
Other comprehensive loss | (18,663,149) | (18,074,570) | (17,960,133) | ||
Total NetSol stockholders’ equity | 62,537,424 | 63,394,471 | 65,788,214 | ||
Non-controlling interest | 14,750,150 | 14,799,082 | 14,508,428 | ||
Total stockholders’ equity | 77,287,574 | 78,193,553 | 80,296,642 | ||
Total liabilities and stockholders’ equity | $ 98,479,963 | $ 99,677,330 | 96,141,818 | ||
License fees | 326,066 | 5,453,795 | |||
Maintenance fees | 3,473,725 | 3,523,797 | |||
Services | 7,017,737 | 5,556,135 | |||
License fees - related party | 44,408 | 246,957 | |||
Maintenance fees - related party | 102,963 | 130,631 | |||
Services - related party | 1,853,877 | 2,165,154 | |||
Total net revenues | 12,818,776 | 17,076,469 | |||
Salaries and consultants | 5,464,160 | 5,893,349 | |||
Travel | 513,112 | 711,895 | |||
Depreciation and amortization | 1,173,113 | 1,330,872 | |||
Other | 856,582 | 972,338 | |||
Total cost of revenues | 8,006,967 | 8,908,454 | |||
Gross profit | 4,811,809 | 8,168,015 | |||
Selling and marketing | 1,711,296 | 2,344,038 | |||
Depreciation and amortization | 245,873 | 269,097 | |||
General and administrative | 3,787,558 | 4,619,196 | |||
Research and development cost | 185,085 | 92,932 | |||
Total operating expenses | 5,929,812 | 7,325,263 | |||
Income (loss) from operations | (1,118,003) | 842,752 | |||
Loss on sale of assets | (7,130) | (2,403) | |||
Interest expense | (118,071) | (54,475) | |||
Interest income | 136,911 | 30,440 | |||
Loss on foreign currency exchange transactions | 1,016,362 | (414,896) | |||
Other income | 21,560 | ||||
Total other income (expenses) | 961,609 | (419,774) | |||
Net income (loss) before income taxes | (156,394) | 422,978 | |||
Income tax provision | (24,871) | (39,875) | |||
Net income (loss) | (181,265) | 383,103 | |||
Non-controlling interest | (188,233) | (769,214) | |||
Net income (loss) attributable to NetSol | $ (369,498) | $ (386,111) | |||
Net income (loss) per common share - Basic | $ (0.03) | $ (0.04) | |||
Net income (loss) per common share - Diluted | $ (0.03) | $ (0.04) | |||
Weighted average number of shares outstanding - Basic | 11,099,113 | 10,697,425 | |||
Weighted average number of shares outstanding - Diluted | 11,099,113 | 10,697,425 | |||
Translation adjustment | $ (825,744) | $ 1,094,074 | |||
Comprehensive income (loss) | (588,579) | 770,361 | |||
Comprehensive income (loss) attributable to non-controlling interest | (237,165) | 323,713 | |||
Comprehensive income (loss) attributable to NetSol | (958,077) | 384,250 | |||
Depreciation and amortization | 1,418,986 | 1,599,969 | |||
Stock issued for services | 427,809 | 865,456 | |||
Fair market value of warrants and stock options granted | 21,804 | ||||
Accounts receivable | (903,730) | 2,336,894 | |||
Accounts receivable - related party | (1,251,994) | 121,800 | |||
Revenues in excess of billing | (3,230,619) | (4,821,828) | |||
Revenues in excess of billing - related party | (130) | 93,208 | |||
Other current assets | (478,390) | 306,339 | |||
Accounts payable and accrued expenses | 243,144 | (780,569) | |||
Unearned revenue | (270,743) | (346,108) | |||
Net cash used in operating activities | (4,152,240) | (217,529) | |||
Purchases of property and equipment | (328,163) | (554,873) | |||
Sales of property and equipment | 116,023 | 151,818 | |||
Investment | (555,555) | ||||
Net cash used in investing activities | (712,140) | (958,610) | |||
Proceeds from the exercise of stock options and warrants | 162,385 | 276,861 | |||
Proceeds from exercise of subsidiary options | 14,013 | ||||
Payments on capital lease obligations and loans - net | (148,707) | (49,117) | |||
Net cash provided by financing activities | (486,985) | 241,757 | |||
Effect of exchange rate changes | (266,774) | 533,292 | |||
Net decrease in cash and cash equivalents | (5,618,139) | (401,090) | |||
Cash and cash equivalents, beginning of the period | 14,172,954 | 11,557,527 | |||
Cash and cash equivalents, end of period | $ 8,554,815 | 11,156,437 | |||
As Originally Presented [Member] | |||||
Cash and cash equivalents | 11,156,437 | 11,156,437 | |||
Accounts receivable, net of allowance of $500,853 and $492,498 | 7,142,255 | ||||
Accounts receivable, net - related party | 5,384,573 | ||||
Revenues in excess of billings | 13,358,858 | ||||
Revenues in excess of billings - related party | 682,049 | ||||
Other current assets | 3,192,425 | ||||
Total current assets | 40,916,597 | ||||
Restricted cash | 90,000 | ||||
Property and equipment, net | 22,612,752 | ||||
Other assets | 1,604,731 | ||||
Intangible assets, net | 19,326,259 | ||||
Goodwill | 9,516,568 | ||||
Total assets | 94,066,907 | ||||
Accounts payable and accrued expenses | 6,389,128 | ||||
Current portion of loans and obligations under capitalized leases | 4,408,173 | ||||
Unearned revenues | 4,419,692 | ||||
Common stock to be issued | 88,324 | ||||
Total current liabilities | 15,305,317 | ||||
Long term loans and obligations under capitalized leases; less current maturities | 539,859 | ||||
Total liabilities | 15,845,176 | ||||
Commitments and contingencies | |||||
Preferred stock, $.01 par value; 500,000 shares authorized; | |||||
Common stock, $.01 par value; 14,500,000 shares authorized; 10,882,281 shares issued and 10,855,002 outstanding as of September 30, 2016 and 10,713,372 shares issued and 10,686,093 outstanding as of June 30, 2016 | 108,823 | ||||
Additional paid-in-capital | 122,367,231 | ||||
Treasury stock (27,279 shares) | (415,425) | ||||
Accumulated deficit | (39,089,079) | ||||
Stock subscription receivable | (602,811) | ||||
Other comprehensive loss | (17,960,133) | ||||
Total NetSol stockholders’ equity | 64,408,606 | ||||
Non-controlling interest | 13,813,125 | ||||
Total stockholders’ equity | 78,221,731 | ||||
Total liabilities and stockholders’ equity | 94,066,907 | ||||
License fees | 3,499,860 | ||||
Maintenance fees | 3,402,821 | ||||
Services | 5,806,717 | ||||
License fees - related party | 246,957 | ||||
Maintenance fees - related party | 130,631 | ||||
Services - related party | 1,914,572 | ||||
Total net revenues | 15,001,558 | ||||
Salaries and consultants | 5,893,349 | ||||
Travel | 711,895 | ||||
Depreciation and amortization | 1,330,872 | ||||
Other | 972,338 | ||||
Total cost of revenues | 8,908,454 | ||||
Gross profit | 6,093,104 | ||||
Selling and marketing | 2,411,136 | ||||
Depreciation and amortization | 269,097 | ||||
General and administrative | 4,552,098 | ||||
Research and development cost | 92,932 | ||||
Total operating expenses | 7,325,263 | ||||
Income (loss) from operations | (1,232,159) | ||||
Loss on sale of assets | (2,403) | ||||
Interest expense | (54,475) | ||||
Interest income | 30,440 | ||||
Loss on foreign currency exchange transactions | (414,896) | ||||
Other income | 21,560 | ||||
Total other income (expenses) | (419,774) | ||||
Net income (loss) before income taxes | (1,651,933) | ||||
Income tax provision | (39,875) | ||||
Net income (loss) | (1,691,808) | ||||
Non-controlling interest | (73,911) | ||||
Net income (loss) attributable to NetSol | $ (1,765,719) | ||||
Net income (loss) per common share - Basic | $ (0.17) | ||||
Net income (loss) per common share - Diluted | $ (0.17) | ||||
Weighted average number of shares outstanding - Basic | 10,697,425 | ||||
Weighted average number of shares outstanding - Diluted | 10,697,425 | ||||
Translation adjustment | $ 1,094,074 | ||||
Comprehensive income (loss) | (671,645) | ||||
Comprehensive income (loss) attributable to non-controlling interest | 323,713 | ||||
Comprehensive income (loss) attributable to NetSol | (995,358) | ||||
Depreciation and amortization | 1,599,969 | ||||
Stock issued for services | 865,456 | ||||
Fair market value of warrants and stock options granted | 21,804 | ||||
Accounts receivable | 2,336,894 | ||||
Accounts receivable - related party | 121,800 | ||||
Revenues in excess of billing | (2,746,917) | ||||
Revenues in excess of billing - related party | 93,208 | ||||
Other current assets | 306,339 | ||||
Accounts payable and accrued expenses | (780,569) | ||||
Unearned revenue | (346,108) | ||||
Net cash used in operating activities | (217,529) | ||||
Purchases of property and equipment | (554,873) | ||||
Sales of property and equipment | 151,818 | ||||
Investment | (555,555) | ||||
Net cash used in investing activities | (958,610) | ||||
Proceeds from the exercise of stock options and warrants | 276,861 | ||||
Proceeds from exercise of subsidiary options | 14,013 | ||||
Payments on capital lease obligations and loans - net | (49,117) | ||||
Net cash provided by financing activities | 241,757 | ||||
Effect of exchange rate changes | 533,292 | ||||
Net decrease in cash and cash equivalents | (401,090) | ||||
Cash and cash equivalents, beginning of the period | 11,557,527 | ||||
Cash and cash equivalents, end of period | 11,156,437 | ||||
Amount of Restatement [Member] | |||||
Cash and cash equivalents | |||||
Revenues in excess of billings | 2,074,911 | ||||
Total current assets | 2,074,911 | ||||
Total assets | 2,074,911 | ||||
Total current liabilities | |||||
Total liabilities | |||||
Commitments and contingencies | |||||
Preferred stock, $.01 par value; 500,000 shares authorized; | |||||
Accumulated deficit | 1,379,608 | ||||
Total NetSol stockholders’ equity | 1,379,608 | ||||
Non-controlling interest | 695,303 | ||||
Total stockholders’ equity | 2,074,911 | ||||
Total liabilities and stockholders’ equity | $ 2,074,911 | ||||
License fees | 1,953,935 | ||||
Maintenance fees | 120,976 | ||||
Total net revenues | 2,074,911 | ||||
Total cost of revenues | |||||
Gross profit | 2,074,911 | ||||
Total operating expenses | |||||
Income (loss) from operations | 2,074,911 | ||||
Total other income (expenses) | |||||
Net income (loss) before income taxes | 2,074,911 | ||||
Net income (loss) | 2,074,911 | ||||
Non-controlling interest | (695,303) | ||||
Net income (loss) attributable to NetSol | $ 1,379,608 | ||||
Net income (loss) per common share - Basic | $ 0.14 | ||||
Net income (loss) per common share - Diluted | $ 0.14 | ||||
Weighted average number of shares outstanding - Basic | 10,697,425 | ||||
Weighted average number of shares outstanding - Diluted | 10,697,425 | ||||
Translation adjustment | |||||
Comprehensive income (loss) | 1,379,608 | ||||
Comprehensive income (loss) attributable to non-controlling interest | |||||
Comprehensive income (loss) attributable to NetSol | 1,379,608 | ||||
Revenues in excess of billing | (2,074,911) | ||||
Net cash used in operating activities | |||||
Net cash used in investing activities | |||||
Net cash provided by financing activities | |||||
Net decrease in cash and cash equivalents | |||||
Cash and cash equivalents, beginning of the period | |||||
Cash and cash equivalents, end of period |
Restatement of Previously Iss82
Restatement of Previously Issued Financial Statements - Schedule of Condensed Consolidated Financial Statements (Details) (Parenthetical) - USD ($) | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2016 |
Accounting Changes and Error Corrections [Abstract] | ||||
Accounts receivable, allowance | $ 361,461 | $ 571,511 | $ 500,853 | $ 492,498 |
Preferred stock, par value | $ .01 | $ .01 | $ .01 | $ .01 |
Preferred stock, shares authorized | 500,000 | 500,000 | 500,000 | 500,000 |
Common stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 14,500,000 | 14,500,000 | 14,500,000 | 14,500,000 |
Common stock, shares issued | 11,333,129 | 11,225,385 | 10,882,281 | 10,713,372 |
Common stock, shares outstanding | 11,186,570 | 11,190,606 | 10,855,002 | 10,686,093 |
Treasury stock, shares | 146,559 | 34,779 | 27,279 | 27,279 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | 3 Months Ended |
Sep. 30, 2017USD ($)$ / sharesshares | |
Convertible Promissory Note Agreement [Member] | WRLD3D, Inc. [Member] | |
Proceeds from loan receivable | $ | $ 50,000 |
Subsequent Event [Member] | |
Stock repurchased | shares | 27,495 |
Stock repurchased share price | $ / shares | $ 3.65 |
Subsequent Event [Member] | Stock Buyback Plan [Member] | |
Stock repurchased | shares | 139,275 |
Stock repurchased share price | $ / shares | $ 4.30 |
Subsequent Event [Member] | Convertible Promissory Note Agreement [Member] | WRLD3D, Inc. [Member] | |
Proceeds from loan receivable | $ | $ 500,000 |