Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 30, 2018 | Nov. 09, 2018 | |
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, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 11,792,360 | |
Trading Symbol | NTWK | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,019 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2018 | Jul. 02, 2018 | Jun. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2017 |
Current assets: | |||||
Cash and cash equivalents | $ 20,435,744 | $ 22,088,853 | $ 22,088,853 | $ 8,554,815 | $ 14,172,954 |
Accounts receivable, net of allowance of $610,061 and $571,511 | 7,487,381 | 12,775,461 | 12,775,461 | ||
Accounts receivable, net - related party | 3,039,320 | 3,374,272 | 3,374,272 | ||
Revenues in excess of billings | 13,335,529 | 6,956,966 | 14,285,778 | ||
Revenues in excess of billings - related party | 70,250 | ||||
Convertible note receivable - related party | 2,881,500 | 2,123,500 | 2,123,500 | ||
Other current assets | 3,438,861 | 2,703,032 | 2,703,032 | ||
Total current assets | 50,688,585 | 50,022,084 | 57,350,896 | ||
Revenues in excess of billings, net - long term | 1,206,669 | ||||
Property and equipment, net | 15,650,128 | 16,165,491 | 16,165,491 | ||
Long term investment | 2,958,692 | 3,217,162 | 3,217,162 | ||
Other assets | 54,936 | 70,299 | 70,299 | ||
Intangible assets, net | 11,465,925 | 12,247,196 | 12,247,196 | ||
Goodwill | 9,516,568 | 9,516,568 | 9,516,568 | ||
Total assets | 90,334,834 | 91,238,800 | 99,774,281 | ||
Current liabilities: | |||||
Accounts payable and accrued expenses | 7,153,778 | 7,873,809 | 7,873,809 | ||
Current portion of loans and obligations under capitalized leases | 8,433,675 | 8,595,919 | 8,595,919 | ||
Unearned revenues | 4,913,731 | 6,167,755 | 5,949,581 | ||
Common stock to be issued | 88,324 | 88,324 | 88,324 | ||
Total current liabilities | 20,589,508 | 22,725,807 | 22,507,633 | ||
Loans and obligations under capitalized leases; less current maturities | 296,680 | 330,596 | 330,596 | ||
Total liabilities | 20,886,188 | 23,056,403 | 22,838,229 | ||
Commitments and contingencies | |||||
Stockholders' equity: | |||||
Preferred stock, $.01 par value; 500,000 shares authorized; | |||||
Common stock, $.01 par value; 14,500,000 shares authorized; 11,708,469 shares issued and 11,502,616 outstanding as of June 30, 2018 and 11,225,385 shares issued and 11,190,606 outstanding as of June 30, 2017 | 117,824 | 117,085 | 117,085 | ||
Additional paid-in-capital | 126,918,319 | 126,479,147 | 126,479,147 | ||
Treasury stock (At cost, 205,853 shares and 34,779 shares as of June 30, 2018 and June 30, 2017, respectively) | (1,205,024) | (1,205,024) | (1,205,024) | ||
Accumulated deficit | (42,827,708) | (43,790,297) | (37,994,502) | ||
Stock subscription receivable | (221,000) | (221,000) | (221,000) | ||
Other comprehensive loss | (24,649,274) | (24,386,071) | (24,386,071) | ||
Total NetSol stockholders' equity | 58,133,137 | 56,993,840 | 62,789,635 | ||
Non-controlling interest | 11,315,509 | 11,188,557 | 14,146,417 | ||
Total stockholders' equity | 69,448,646 | 68,182,397 | 76,936,052 | $ 77,287,574 | $ 78,193,553 |
Total liabilities and stockholders' equity | $ 90,334,834 | $ 91,238,800 | $ 99,774,281 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2018 | Jun. 30, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 600,833 | $ 610,061 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 14,500,000 | 14,500,000 |
Common stock, shares issued | 11,782,360 | 11,708,469 |
Common stock, shares outstanding | 11,576,507 | 11,502,616 |
Treasury stock, shares | 205,853 | 205,853 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Net Revenues: | ||
Total net revenues | $ 16,396,545 | $ 12,818,776 |
Cost of revenues: | ||
Salaries and consultants | 5,020,562 | 5,464,160 |
Travel | 1,151,997 | 513,112 |
Depreciation and amortization | 937,604 | 1,173,113 |
Other | 1,048,324 | 856,582 |
Total cost of revenues | 8,158,487 | 8,006,967 |
Gross profit | 8,238,058 | 4,811,809 |
Operating expenses: | ||
Selling and marketing | 1,701,326 | 1,711,296 |
Depreciation and amortization | 212,232 | 245,873 |
General and administrative | 4,406,720 | 3,787,558 |
Research and development cost | 318,155 | 185,085 |
Total operating expenses | 6,638,433 | 5,929,812 |
Income (loss) from operations | 1,599,625 | (1,118,003) |
Other income and (expenses) | ||
Gain (loss) on sale of assets | 52,294 | (7,130) |
Interest expense | (99,434) | (118,071) |
Interest income | 248,964 | 136,911 |
Gain on foreign currency exchange transactions | 10,912 | 1,016,362 |
Share of net loss from equity investment | (299,691) | (67,562) |
Other income (expense) | 5,379 | 1,099 |
Total other income (expenses) | (81,576) | 961,609 |
Net income (loss) before - income taxes | 1,518,049 | (156,394) |
Income tax provision | (236,914) | (24,871) |
Net income (loss) | 1,281,135 | (181,265) |
Non-controlling interest | (318,546) | (188,233) |
Net income (loss) attributable to NetSol | $ 962,589 | $ (369,498) |
Net income (loss) per share: | ||
Net income (loss) per common share Basic | $ 0.08 | $ (0.03) |
Net income (loss) per common share Diluted | $ 0.08 | $ (0.03) |
Weighted average number of shares outstanding | ||
Basic | 11,502,616 | 11,099,113 |
Diluted | 11,507,730 | 11,099,113 |
License Fees [Member] | ||
Net Revenues: | ||
Total net revenues | $ 5,956,113 | $ 326,066 |
Maintenance Fees [Member] | ||
Net Revenues: | ||
Total net revenues | 3,638,327 | 3,473,725 |
Services [Member] | ||
Net Revenues: | ||
Total net revenues | 6,418,634 | 7,017,737 |
License Fees - Related Party [Member] | ||
Net Revenues: | ||
Total net revenues | 44,408 | |
Maintenance Fees - Related Party [Member] | ||
Net Revenues: | ||
Total net revenues | 101,349 | 102,963 |
Services - Related Party [Member] | ||
Net Revenues: | ||
Total net revenues | $ 282,122 | $ 1,853,877 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 962,589 | $ (369,498) |
Other comprehensive income (loss): | ||
Translation adjustment | (464,076) | (825,744) |
Translation adjustment attributable to non-controlling interest | 200,873 | 237,165 |
Net translation adjustment | (263,203) | (588,579) |
Comprehensive income (loss) attributable to NetSol | $ 699,386 | $ (958,077) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 1,281,135 | $ (181,265) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and amortization | 1,149,836 | 1,418,986 |
Share of net loss from investment under equity method | 299,691 | 67,562 |
(Gain) loss on sale of assets | (52,294) | 7,130 |
Stock based compensation | 432,048 | 439,308 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 5,136,381 | (903,730) |
Accounts receivable - related party | 284,869 | (1,251,994) |
Revenues in excess of billing | (6,347,196) | (3,230,619) |
Revenues in excess of billing - related party | (70,102) | (130) |
Other current assets | (571,246) | (478,390) |
Accounts payable and accrued expenses | (680,147) | 231,645 |
Unearned revenue | (1,202,420) | (270,743) |
Net cash used in operating activities | (339,445) | (4,152,240) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (563,413) | (328,163) |
Sales of property and equipment | 184,032 | 116,023 |
Convertible note receivable - related party | (758,000) | (500,000) |
Net cash used in investing activities | (1,137,381) | (712,140) |
Cash flows from financing activities: | ||
Proceeds from the exercise of stock options and warrants | 162,385 | |
Proceeds from exercise of subsidiary options | 2,650 | |
Purchase of treasury stock | (500,663) | |
Proceeds from bank loans | 119,895 | |
Payments on capital lease obligations and loans - net | (179,237) | (148,707) |
Net cash used in financing activities | (56,692) | (486,985) |
Effect of exchange rate changes | (119,591) | (266,774) |
Net decrease in cash and cash equivalents | (1,653,109) | (5,618,139) |
Cash and cash equivalents at beginning of the period | 22,088,853 | 14,172,954 |
Cash and cash equivalents at end of period | 20,435,744 | 8,554,815 |
SUPPLEMENTAL DISCLOSURES: | ||
Interest | 120,010 | 97,547 |
Taxes | 213,605 | 20,961 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Provided services for investment in WRLD3D | 268,300 | |
Assets acquired under capital lease | $ 144,801 | $ 41,695 |
Basis of Presentation and Princ
Basis of Presentation and Principles of Consolidation | 3 Months Ended |
Sep. 30, 2018 | |
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, 2018. 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 (Beijing) Co. Ltd. (“NetSol Beijing”) Ascent Europe Ltd. (“AEL”) Majority-owned Subsidiaries Virtual Lease Services Holdings Limited (“VLSH”) |
Accounting Policies
Accounting Policies | 3 Months Ended |
Sep. 30, 2018 | |
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, 2018, and June 30, 2018, the Company had uninsured deposits related to cash deposits in accounts maintained within foreign entities of approximately $19,253,434 and $20,933,224, 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. Level 2: Valuations rely on quoted prices in markets that are not active or observable inputs over the full term of the asset or liability. Level 3: 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 does not have any financial assets that are measured at fair value on a recurring basis as of September 30, 2018. The Company’s financial assets that were measured at fair value on a recurring basis as of June 30, 2018, were as follows: Level 1 Level 2 Level 3 Total Assets Revenues in excess of billing - long term $ - $ - $ 1,206,669 $ 1,206,669 Total $ - $ - $ 1,206,669 $ 1,206,669 The reconciliation from June 30, 2018 to September 30, 2018 is as follows: Revenues in excess of billing - long term Fair value discount Total Balance at June 30, 2018 $ 1,445,245 $ (238,576 ) $ 1,206,669 Effect of ASC 606 adoption (1,445,245 ) 238,576 (1,206,669 ) Balance at September 30, 2018 $ - $ - $ - 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 January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities In August 2016, the FASB issued ASU 2016-15, Clarification of Certain Cash Receipts and Cash Payments On November 17, 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers Revenue Recognition Software - Revenue Recognition The Company adopted Topic 606 on the first day of fiscal 2019 using the modified retrospective transition method. Under this method, the Company evaluated contracts that were in effect at the beginning of fiscal 2019 as if those contracts had been accounted for under Topic 606. The Company did not evaluate individual modifications for those periods prior to the adoption date, but the aggregate effect of all modifications as of the adoption date and such effects are provided below. Under the modified retrospective transition method, periods prior to the adoption date were not adjusted and continue to be reported in accordance with historical, pre-Topic 606 accounting. A cumulative catch-up adjustment was recorded to beginning accumulated deficit to reflect the impact of all existing arrangements under Topic 606. As a result of adopting ASC 606, the Company recorded a net decrease of $5,795,795 to opening accumulated deficit and $2,957,860 to non-controlling interest as of July 1, 2018 as a cumulative catch-up adjustment for all open contracts as of the date of adoption. The most significant drivers of this adjustment related to the allocation of revenue to certain performance obligations on a stand-alone selling price basis. Specifically, contracts with one customer were required to be aggregated under the guidance of ASC 606, resulting in additional revenue allocated to the maintenance services under these contracts. Under the guidance of ASC 605, the Company had recognized one of these contracts as a stand-alone and separate contract with this customer, which resulted in additional revenue allocated to the license and services that had previously been delivered to this customer. The following table presents the cumulative effect adjustments, net of income tax effects, to beginning consolidated balance sheet accounts for the new accounting standards adopted by the Company on the first day of fiscal 2019: As of Topic 606 As of June 30, 2018 Adjustments July 1, 2018 ASSETS Current assets: Cash and cash equivalents $ 22,088,853 $ 22,088,853 Accounts receivable, net of allowance of $610,061 and $571,511 12,775,461 12,775,461 Accounts receivable, net - related party 3,374,272 3,374,272 Revenues in excess of billings 14,285,778 (7,328,812 ) 6,956,966 Revenues in excess of billings - related party - - Convertible note receivable - related party 2,123,500 2,123,500 Other current assets 2,703,032 2,703,032 Total current assets 57,350,896 (7,328,812 ) 50,022,084 Revenues in excess of billings, net - long term 1,206,669 (1,206,669 ) - Property and equipment, net 16,165,491 16,165,491 Long term investment 3,217,162 3,217,162 Other assets 70,299 70,299 Intangible assets, net 12,247,196 12,247,196 Goodwill 9,516,568 9,516,568 Total assets $ 99,774,281 $ (8,535,481 ) $ 91,238,800 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued expenses $ 7,873,809 $ 7,873,809 Current portion of loans and obligations under capitalized leases 8,595,919 8,595,919 Unearned revenues 5,949,581 218,174 6,167,755 Common stock to be issued 88,324 88,324 Total current liabilities 22,507,633 218,174 22,725,807 Loans and obligations under capitalized leases; 330,596 330,596 Total liabilities 22,838,229 218,174 23,056,403 Commitments and contingencies Stockholders’ equity: Preferred stock, $.01 par value; 500,000 shares authorized; - - - Common stock, $.01 par value; 14,500,000 shares authorized; 11,708,469 shares issued and 11,502,616 outstanding as of June 30, 2018 and 11,225,385 shares issued and 11,190,606 outstanding as of June 30, 2017 117,085 117,085 Additional paid-in-capital 126,479,147 126,479,147 Treasury stock (At cost, 205,853 shares and 34,779 shares as of June 30, 2018 and June 30, 2017, respectively) (1,205,024 ) (1,205,024 ) Accumulated deficit (37,994,502 ) (5,795,795 ) (43,790,297 ) Stock subscription receivable (221,000 ) (221,000 ) Other comprehensive loss (24,386,071 ) (24,386,071 ) Total NetSol stockholders’ equity 62,789,635 (5,795,795 ) 56,993,840 Non-controlling interest 14,146,417 (2,957,860 ) 11,188,557 Total stockholders’ equity 76,936,052 (8,753,655 ) 68,182,397 Total liabilities and stockholders’ equity $ 99,774,281 $ (8,535,481 ) $ 91,238,800 The following table presents the cumulative effect adjustments, net of income tax effects, to beginning consolidated balance sheet accounts for the new accounting standards adopted by the Company as of September 30, 2018: As reported under Topic 606 Balances under Prior GAAP September 30, 2018 Adjustments September 30, 2018 ASSETS Current assets: Cash and cash equivalents $ 20,435,744 $ 20,435,744 Accounts receivable, net of allowance of $600,833 and $610,061 7,487,381 7,487,381 Accounts receivable, net - related party 3,039,320 3,039,320 Revenues in excess of billings 13,335,529 7,458,067 20,793,596 Revenues in excess of billings - related party 70,250 70,250 Convertible note receivable - related party 2,881,500 2,881,500 Other current assets 3,438,861 3,438,861 Total current assets 50,688,585 7,458,067 58,146,652 Revenues in excess of billings, net - long term - 1,281,652 1,281,652 Property and equipment, net 15,650,128 15,650,128 Long term investment 2,958,692 2,958,692 Other assets 54,936 54,936 Intangible assets, net 11,465,925 11,465,925 Goodwill 9,516,568 9,516,568 Total assets $ 90,334,834 $ 8,739,719 $ 99,074,553 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued expenses $ 7,153,778 $ 7,153,778 Current portion of loans and obligations under capitalized leases 8,433,675 8,433,675 Unearned revenues 4,913,731 (289,099 ) 4,624,632 Common stock to be issued 88,324 88,324 Total current liabilities 20,589,508 (289,099 ) 20,300,409 Loans and obligations under capitalized leases; 296,680 296,680 Total liabilities 20,886,188 (289,099 ) 20,597,089 Commitments and contingencies Stockholders’ equity: Preferred stock, $.01 par value; 500,000 shares authorized; - - - Common stock, $.01 par value; 14,500,000 shares authorized; 11,782,360 shares issued and 11,576,507 outstanding as of September 30, 2018 and 11,708,469 shares issued and 11,502,616 outstanding as of June 30, 2018 117,824 117,824 Additional paid-in-capital 126,918,319 126,918,319 Treasury stock (At cost, 205,853 shares and 205,853 shares as of September 30, 2018 and June 30, 2018, respectively) (1,205,024 ) (1,205,024 ) Accumulated deficit (42,827,708 ) 5,977,953 (36,849,755 ) Stock subscription receivable (221,000 ) (221,000 ) Other comprehensive loss (24,649,274 ) (24,649,274 ) Total NetSol stockholders’ equity 58,133,137 5,977,953 64,111,090 Non-controlling interest 11,315,509 3,050,865 14,366,374 Total stockholders’ equity 69,448,646 9,028,818 78,477,464 Total liabilities and stockholders’ equity $ 90,334,834 $ 8,739,719 $ 99,074,553 The following table summarizes the effects of adopting Topic 606 on the Company’s Condensed Consolidated Statement of Income for the three months ended September 30, 2018: For the Three Months Ended September 30, 2018 As reported under Under prior Topic 606 Adjustments GAAP Net Revenues: License fees $ 5,956,113 $ 5,956,113 Maintenance fees 3,638,327 146,477 3,784,804 Services 6,418,634 6,418,634 License fees - related party - - Maintenance fees - related party 101,349 101,349 Services - related party 282,122 282,122 Total net revenues 16,396,545 146,477 16,543,022 Cost of revenues: Salaries and consultants 5,020,562 5,020,562 Travel 1,151,997 1,151,997 Depreciation and amortization 937,604 937,604 Other 1,048,324 1,048,324 Total cost of revenues 8,158,487 - 8,158,487 Gross profit 8,238,058 146,477 8,384,535 Operating expenses: Selling and marketing 1,701,326 1,701,326 Depreciation and amortization 212,232 212,232 General and administrative 4,406,720 4,406,720 Research and development cost 318,155 318,155 Total operating expenses 6,638,433 - 6,638,433 Income (loss) from operations 1,599,625 146,477 1,746,102 Other income and (expenses) Gain (loss) on sale of assets 52,294 52,294 Interest expense (99,434 ) (99,434 ) Interest income 248,964 74,983 323,947 Gain on foreign currency exchange transactions 10,912 53,703 64,615 Share of net loss from equity investment (299,691 ) (299,691 ) Other income (expense) 5,379 5,379 Total other income (expenses) (81,576 ) 128,686 47,110 Net income (loss) before income taxes 1,518,049 275,163 1,793,212 Income tax provision (236,914 ) (236,914 ) Net income (loss) 1,281,135 275,163 1,556,298 Non-controlling interest (318,546 ) (93,005 ) (411,551 ) Net income (loss) attributable to NetSol $ 962,589 $ 182,158 $ 1,144,747 Net income (loss) per share: Net income (loss) per common share Basic $ 0.08 $ 0.02 $ 0.10 Diluted $ 0.08 $ 0.02 $ 0.10 Weighted average number of shares outstanding Basic 11,502,616 11,502,616 11,502,616 Diluted 11,507,730 11,507,730 11,507,730 The following table summarizes the effects of adopting Topic 606 on the financial statement line items of the Company’s Consolidated Statement of Cash Flows for the three months ended September 30, 2018: For the Three Months Ended September 30, 2018 As reported under Under prior Topic 606 Adjustments GAAP Cash flows from operating activities: Net income (loss) $ 1,281,135 $ 275,163 $ 1,556,298 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 1,149,836 1,149,836 Share of net loss from investment under equity method 299,691 299,691 (Gain) loss on sale of assets (52,294 ) (52,294 ) Stock based compensation 432,048 432,048 Changes in operating assets and liabilities: - Accounts receivable 5,136,381 5,136,381 Accounts receivable - related party 284,869 284,869 Revenues in excess of billing (6,347,196 ) (204,238 ) (6,551,434 ) Revenues in excess of billing - related party (70,102 ) (70,102 ) Other current assets (571,246 ) (571,246 ) Accounts payable and accrued expenses (680,147 ) (680,147 ) Unearned revenue (1,202,420 ) (70,925 ) (1,273,345 ) Net cash used in operating activities (339,445 ) - (339,445 ) Cash flows from investing activities: Purchases of property and equipment (563,413 ) (563,413 ) Sales of property and equipment 184,032 184,032 Convertible note receivable - related party (758,000 ) (758,000 ) Net cash used in investing activities (1,137,381 ) - (1,137,381 ) Cash flows from financing activities: Proceeds from the exercise of stock options and warrants - - Proceeds from exercise of subsidiary options 2,650 2,650 Purchase of treasury stock - - Proceeds from bank loans 119,895 119,895 Payments on capital lease obligations and loans - net (179,237 ) (179,237 ) Net cash provided by (used in) financing activities (56,692 ) - (56,692 ) Effect of exchange rate changes (119,591 ) (119,591 ) Net increase in cash and cash equivalents (1,653,109 ) - (1,653,109 ) Cash and cash equivalents at beginning of the period 22,088,853 22,088,853 Cash and cash equivalents at end of period $ 20,435,744 $ - $ 20,435,744 Accounting Standards Recently Issued but Not Yet Adopted by the Company: In February 2016, the FASB issued ASU 2016-02, Leases In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment In July 2017, the FASB issued ASU 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. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Sep. 30, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Revenue Recognition | NOTE 3 – REVENUE RECOGNITION The Company determines revenue recognition through the following steps: ● Identification of the contract, or contracts, with a customer; ● Identification of the performance obligations in the contract; ● Determination of the transaction price; ● Allocation of the transaction price to the performance obligations in the contract; and ● Recognition of revenue when, or as, the Company satisfies a performance obligation. The Company records the amount of revenue and related costs by considering whether the entity is a principal (gross presentation) or an agent (net presentation) by evaluating the nature of its promise to the customer. Revenue is presented net of sales, value-added and other taxes collected from customers and remitted to government authorities. The Company has two primary revenue streams: core revenue and non-core revenue. Core Revenue: The Company generates its core revenue from the following sources: (1) software licenses, (2) services, which include implementation and consulting services, and (3) maintenance, which includes post contract support, of its enterprise software solutions for the lease and finance industry. The Company offers its software using the same underlying technology via two models: a traditional on-premises licensing model and a subscription model. The on-premises model involves the sale or license of software on a perpetual basis to customers who take possession of the software and install and maintain the software on their own hardware. Under the subscription delivery model, the Company provides access to its software on a hosted basis as a service and customers generally do not have the contractual right to take possession of the software. Non-Core Revenue The Company generates its non-core revenue by providing business process outsourcing (“BPO”), other IT services and internet services. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account under Topic 606. The transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied by transferring the promised good or service to the customer. The Company identifies and tracks the performance obligations at contract inception so that the Company can monitor and account for the performance obligations over the life of the contract. The Company’s contracts which contain multiple performance obligations generally consist of the initial purchase of subscription or licenses and a professional services engagement. License purchases generally have multiple performance obligations as customers purchase maintenance and services in addition to the licenses. The Company’s single performance obligation arrangements are typically maintenance renewals, subscription renewals and services engagements. For contracts with multiple performance obligations where the contracted price differs from the standalone selling price (“SSP”) for any distinct good or service, the Company may be required to allocate the contract’s transaction price to each performance obligation using its best estimate for the SSP. Subscription Subscription revenue is recognized ratably over the initial subscription period committed to by the customer commencing when the product is made available to the customer. The initial subscription period is typically 12 to 60 months. The Company generally invoices its customers in advance in quarterly or annual installments and typical payment terms provide that customers make payment within 30 days of invoice. Software Licenses Transfer of control for software is considered to have occurred upon delivery of the product to the customer. The Company’s typical payment terms tend to vary by region, but its standard payment terms are within 30 days of invoice. Maintenance Revenue from support services and product updates, referred to as maintenance revenue, is recognized ratably over the term of the maintenance period, which in most instances is one year. Software license updates provide customers with rights to unspecified software product updates, maintenance releases and patches released during the term of the support period on a when-and-if available basis. The Company’s customers purchase both product support and license updates when they acquire new software licenses. In addition, a majority of customers renew their support services contracts annually and typical payment terms provide that customers make payment within 30 days of invoice. Professional Services Revenue from professional services is typically comprised of implementation, development, data migration, training or other consulting services. Consulting services are generally sold on a time-and-materials or fixed fee basis and can include services ranging from software installation to data conversion and building non-complex interfaces to allow the software to operate in integrated environments. The Company recognizes revenue for time-and-materials arrangements as the services are performed. In fixed fee arrangements, revenue is recognized as services are performed as measured by costs incurred to date, compared to total estimated costs to complete the services project. Management applies judgment when estimating project status and the costs necessary to complete the services projects. A number of internal and external factors can affect these estimates, including labor rates, utilization and efficiency variances and specification and testing requirement changes. Services are generally invoiced upon milestones in the contract or upon consumption of the hourly resources and payments are typically due 30 days after invoice. BPO and Internet Services Revenue from BPO services is recognized based on the stage of completion which is measured by reference to labor hours incurred to date as a percentage of total estimated labor hours for each contract. Internet services are invoiced either monthly, quarterly or half yearly in advance to the customers and revenue is recognized ratably overtime on a monthly basis. Disaggregated Revenue The Company disaggregates revenue from contracts with customers by category — core and non-core, as it believes it best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The Company’s disaggregated revenue by category is as follows: For the Three Months Ended September 30, 2018 2017 Core: License $ 5,956,113 $ 326,066 Maintenance 3,638,327 3,473,725 Services 4,970,273 5,958,266 License - related party - 44,408 Maintenance fees - related party 101,349 102,963 Services - related party 180,597 620,549 Total core revenue, net 14,846,659 10,525,977 Non-Core: Services 1,448,361 1,059,471 Services - related party 101,525 1,233,328 Total non-core revenue, net 1,549,886 2,292,799 Total net revenue $ 16,396,545 $ 12,818,776 Significant Judgments More judgments and estimates are required under Topic 606 than were required under Topic 605. Due to the complexity of certain contracts, the actual revenue recognition treatment required under Topic 606 for the Company’s arrangements may be dependent on contract-specific terms and may vary in some instances. Judgment is required to determine the SSP for each distinct performance obligation. The Company rarely licenses or sells products on a stand-alone basis, so the Company is required to estimate the range of SSPs for each performance obligation. In instances where SSP is not directly observable because the Company does not sell the license, product or service separately, the Company determines the SSP using information that may include market conditions and other observable inputs. In making these judgments, the Company analyzes various factors, including its pricing methodology and consistency, size of the arrangement, length of term, customer demographics and overall market and economic conditions. Based on these results, the estimated SSP is set for each distinct product or service delivered to customers. The most significant inputs involved in the Company’s revenue recognition policies are: The (1) stand-alone selling prices of the Company’s software license, and the (2) the method of recognizing revenue for installation/customization, and other services. The stand-alone selling price of the licenses was measured primarily through an analysis of pricing that management evaluated when quoting prices to customers. Although the Company has no history of selling its software separately from maintenance and other services, the Company does have historical experience with amending contracts with customers to provide additional modules of its software or providing those modules at an optional price. This information guides the Company in assessing the stand-alone selling price of the Company’s software, since the Company can observe instances where a customer had a particular component of the Company’s software that was essentially priced separate from other goods and services that the Company delivered to that customer. The Company recognized revenue from implementation and customization services using the percentage of estimated “man-days” that the work requires. The Company believes the level of effort to complete the services is best measured by the amount of time (measured as an employee working for one day on implementation/customization work) that is required to complete the implementation or customization work. The Company reviews its estimate of man-days required to complete implementation and customization services each reporting period. venue is recognized over time for the Company’s subscription, maintenance and fixed fee professional services that are separate performance obligations. For the Company’s professional services, revenue is recognized over time, generally using costs incurred or hours expended to measure progress. Judgment is required in estimating project status and the costs necessary to complete projects. A number of internal and external factors can affect these estimates, including labor rates, utilization, specification variances and testing requirement changes. If a group of agreements are entered at or near the same time and so closely related that they are, in effect, part of a single arrangement, such agreements are deemed to be combined as one arrangement for revenue recognition purposes. The Company exercises significant judgment to evaluate the relevant facts and circumstances in determining whether agreements should be accounted for separately or as a single arrangement. The Company’s judgments about whether a group of contracts comprise a single arrangement can affect the allocation of consideration to the distinct performance obligations, which could have an effect on results of operations for the periods involved. If a contract includes variable consideration, the Company exercises judgment in estimating the amount of consideration to which the entity will be entitled in exchange for transferring the promised goods or services to a customer. When estimating variable consideration, the Company will consider all relevant facts and circumstances. Variable consideration will be estimated and included in the contract price only when it is probable that a significant reversal in the amount of revenue recognized will not occur. Contract Balances The timing of revenue recognition may differ from the timing of invoicing to customers and these timing differences result in receivables, contract assets (revenues in excess of billings), or contract liabilities (deferred revenue) on the Company’s Consolidated Balance Sheets. The Company records revenues in excess of billings when the Company has transferred goods or services but does not yet have the right to consideration. The Company records deferred revenue when the Company has received or has the right to receive consideration but has not yet transferred goods or services to the customer. The revenues in excess of billings are transferred to receivables when the rights to consideration become unconditional, usually upon completion of a milestone. The Company’s revenues in excess of billings and deferred revenue are as follows: As of As of September 30, 2018 July 1, 2018 Revenues in excess of billings $ 13,335,529 $ 6,956,966 Deferred Revenue $ 4,913,731 $ 6,167,755 During the three months ended September 30, 2018, the Company recognized revenue of $2,169,839 that was included in the deferred revenue balance, as adjusted for Topic 606, at the beginning of the period. All other activity in deferred revenue is due to the timing of invoicing in relation to the timing of revenue recognition. Revenue allocated to remaining performance obligations represents the transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied, which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods. Contracted but unsatisfied performance obligations were approximately $91,633,000 as of September 30, 2018, of which the Company estimates to recognize approximately $15,173,000 in revenue over the next 12 months and the remainder over an estimated 6.25 years thereafter. Actual revenue recognition depends in part on the timing of software modules installed at various customer sites. Accordingly, some factors that affect the Company’s revenue, such as the availability and demand for modules within customer geographic locations, is not entirely within the Company’s control. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that its contracts generally do not include a significant financing component. The primary purpose of invoicing terms is to provide customers with simplified and predictable ways of purchasing the Company’s products and services, and not to facilitate financing arrangements. Deferred Revenue The Company typically invoices its customers for subscription and support fees in advance on a quarterly or annual basis, with payment due at the start of the subscription or support term. Unpaid invoice amounts for non-cancelable license and services starting in future periods are included in accounts receivable and deferred revenue. Practical Expedients and Exemptions There are several practical expedients and exemptions allowed under Topic 606 that impact timing of revenue recognition and the Company’s disclosures. Below is a list of practical expedients the Company applied in the adoption and application of Topic 606: Application ● The Company does not evaluate a contract for a significant financing component if payment is expected within one year or less from the transfer of the promised items to the customer. ● The Company generally expenses sales commissions and sales agent fees when incurred when the amortization period would have been one year or less or the commissions are based on cashed received. These costs are recorded within sales and marketing expense in the Consolidated Statement of Operations. ● The Company does not disclose the value of unsatisfied performance obligations for contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed (applies to time-and-material engagements). Modified Retrospective Transition Adjustments ● For contract modifications, the Company reflected the aggregate effect of all modifications that occurred prior to the adoption date when identifying the satisfied and unsatisfied performance obligations, determining the transaction price and allocating the transaction price to satisfied and unsatisfied performance obligations for the modified contract at transition. Costs to Obtain a Contract The Company does not have a material amount of costs to obtain a contract capitalized at any balance sheet date. In general, the Company incurs few direct incremental costs of obtaining new customer contracts. The Company rarely incurs incremental costs to review or otherwise enter into contractual arrangements with customers. In addition, the Company’s sales personnel receive fees that are referred to as commissions, but that are based on more than simply signing up new customers. The Company’s sales personnel are required to perform additional duties beyond new customer contract inception dates, including fulfilment duties and collections efforts. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 4 – 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 and stock awards. The components of basic and diluted earnings per share were as follows: For the three months ended September 30, 2018 Net Income Shares Per Share Basic income per share: Net income available to common shareholders $ 962,589 11,502,616 $ 0.08 Effect of dilutive securities Share grants - 5,114 - Diluted income per share $ 962,589 11,507,730 $ 0.08 For the three months ended September 30, 2017 Net Loss Shares Per Share Basic loss per share: Net loss available to common shareholders $ (369,498 ) 11,099,113 $ (0.03 ) Effect of dilutive securities Stock options - - - Diluted loss per share $ (369,498 ) 11,099,113 $ (0.03 ) 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, 2018 2017 Stock Options 53,462 438,360 Share Grants - 348,228 53,462 786,588 |
Other Comprehensive Income and
Other Comprehensive Income and Foreign Currency | 3 Months Ended |
Sep. 30, 2018 | |
Other Comprehensive Income And Foreign Currency | |
Other Comprehensive Income and Foreign Currency | NOTE 5 – 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 $24,649,274 and $24,836,071 as of September 30, 2018 and June 30, 2018, respectively. During the three months ended September 30, 2018 and 2017, comprehensive income (loss) in the consolidated statements of comprehensive income (loss) included a translation loss attributable to NetSol of $263,203 and $558,579, respectively. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 6 – 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, 2018 and 2017, NTE and VLS provided license, maintenance and services of $153,340 and $601,192, respectively. Accounts receivable at September 30, 2018 and June 30, 2018 were $99,328 and $379,521, respectively. |
Major Customers
Major Customers | 3 Months Ended |
Sep. 30, 2018 | |
Risks and Uncertainties [Abstract] | |
Major Customers | NOTE 7 – MAJOR CUSTOMERS The Company is a strategic business partner for Daimler Financial Services (which consists of a group of many companies in different countries). During the three months ended September 30, 2018, revenues earned from Daimler Financial Services were 28.8% of net revenues, consisting of license, maintenance and services revenue of $768,558, $672,562 and $3,275,284, respectively. During the three months ended September 30, 2017, revenues earned were 33.0% of net revenues, consisting of license, maintenance and services revenue of $Nil, $649,772 and $3,578,164, respectively. The revenue from this customer is shown in the Asia – Pacific segment. Accounts receivable at September 30, 2018 and June 30, 2018, were $2,770,519 and $4,417,709, respectively. Revenues in excess of billings at September 30, 2018 and 2017 was $5,679,855 and $12,508,815, respectively. Included in this amount was $Nil and $1,206,669 shown as long term at September 30, 2018 and June 30, 2018, respectively. 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 $82,558,140) 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 $6,802,326) for years 1-5 and €8,350,000 (approximately $9,709,302) 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. On September 4, 2017, the Company amended the agreement which provided for an additional €7,700,000 (approximately $8,953,488) to be earned over the remaining life of the contract. The amended agreement provided for €7,000,000 (approximately $8,139,535) to be paid in the fiscal year 2018 with €100,000 (approximately $116,279) to be paid each year over the remaining seven years. |
Convertible Note Receivable - R
Convertible Note Receivable - Related Party | 3 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Convertible Note Receivable - Related Party | NOTE 8 – CONVERTIBLE NOTE RECEIVABLE – RELATED PARTY Convertible Note Receivable - May 25, 2017 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 June 30, 2018, the Company had disbursed $750,000. 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 Company has a security interest in all of WRLD3D’s personal property, inventory, equipment, general intangibles, financial assets, investment property, securities, deposit accounts, and the proceeds thereof. 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. 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 Company has accrued interest of $44,552 at September 30, 2018 which is included in “Other current assets”. Convertible Note Receivable – February 9, 2018 The Company’s subsidiary NetSol Thai entered into an agreement with WRLD3D, whereby NetSol Thai was issued a Convertible Promissory Note (the “Thai Convertible Note”) which was fully executed on February 9, 2018. The maximum principal amount of the Thai Convertible Note is $2,500,000, and as of September 30, 2018, NetSol Thai had disbursed $2,131,500. The Thai Convertible Note bears interest at 10% per annum and all unpaid interest and principal is due and payable upon request on or after March 31, 2019. The Company has a security interest in all of WRLD3D’s personal property, inventory, equipment, general intangibles, financial assets, investment property, securities, deposit accounts, and the proceeds thereof. The Thai Convertible Note is convertible upon the occurrence of the following events: 1. Conversion upon a qualified financing which is an equity financing of at least $1,000,000. 2. Optional conversion upon an equity financing less than $1,000,000. 3. Optional conversion after the maturity date. 4. Change of control. If the Company converts the Thai Convertible Note upon the occurrence of a financing, then the conversion price will be equal to the product of: (A) the price paid per share for the equity securities by the investors multiplied by (B) 70%. If the Company converts the Thai Convertible Note either as an optional conversion after the maturity date or due to a change of control, then the conversion price is equal to $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 Thai Convertible Note). The Company has accrued interest of $68,121 at September 30, 2018 which is included in “Other current assets. |
Other Current Assets
Other Current Assets | 3 Months Ended |
Sep. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Current Assets | NOTE 9 - OTHER CURRENT ASSETS Other current assets consisted of the following: As of As of September 30, 2018 June 30, 2018 Prepaid Expenses $ 767,104 $ 662,431 Advance Income Tax 930,906 838,799 Employee Advances 176,371 48,096 Security Deposits 102,490 85,249 Other Receivables 594,648 497,632 Other Assets 867,342 570,825 Total $ 3,438,861 $ 2,703,032 |
Revenues in Excess of Billings
Revenues in Excess of Billings - Long Term | 3 Months Ended |
Sep. 30, 2018 | |
Contractors [Abstract] | |
Revenues in Excess of Billings - Long Term | NOTE 10 – REVENUES IN EXCESS OF BILLINGS – LONG TERM Revenues in excess of billings, net consisted of the following: As of As of September 30, 2018 June 30, 2018 Revenues in excess of billing - long term $ - $ 1,445,245 Present value discount - (238,576 ) Net Balance $ - $ 1,206,669 Pursuant to revenue recognition for contract accounting, the Company had recorded revenues 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 was recorded in interest income for that period. The Company used the discounted cash flow method with interest rates ranging from 3.87% to 4.43%. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 11 - PROPERTY AND EQUIPMENT Property and equipment consisted of the following: As of As of September 30, 2018 June 30, 2018 Office Furniture and Equipment $ 3,490,984 $ 3,496,653 Computer Equipment 23,527,408 23,708,034 Assets Under Capital Leases 1,524,146 1,479,976 Building 7,882,598 8,005,351 Land 2,055,701 2,088,463 Autos 1,006,504 1,053,749 Improvements 158,815 324,023 Subtotal 39,646,156 40,156,249 Accumulated Depreciation (23,996,028 ) (23,990,758 ) Property and Equipment, Net $ 15,650,128 $ 16,165,491 For the three months ended September 30, 2018 and 2017, depreciation expense totaled $564,128 and $728,659, respectively. Of these amounts, $351,896 and $482,786, respectively, are reflected in cost of revenues. Following is a summary of fixed assets held under capital leases as of September 30, 2018 and June 30, 2018: As of As of September 30, 2018 June 30, 2018 Computers and Other Equipment $ 275,770 $ 228,581 Furniture and Fixtures 65,084 65,084 Vehicles 1,183,292 1,186,311 Total 1,524,146 1,479,976 Less: Accumulated Depreciation - Net (526,498 ) (477,620 ) $ 997,648 $ 1,002,356 |
Long Term Investment
Long Term Investment | 3 Months Ended |
Sep. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Long Term Investment | NOTE 12 – LONG TERM INVESTMENT On March 2, 2017, 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, 2017. 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 June 30, 2018, the investment earned by NetSol PK is $2,777,778. 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 determined that it met the significant influence criteria since the CEO of WRLD3D is the son of the CEO, Najeeb Ghauri, and also an employee of the Company; therefore, the Company accounts for the investment using equity method of accounting. During the three months ended September 30, 2018 and 2017, NetSol PK provided services valued at $162,845 and $268,300, respectively, which is recorded as services-related party. Accounts receivable at September 30, 2018 and June 30, 2018 were $592,284 and $473,218, respectively. Revenue in excess of billing at September 30, 2018 and June 30, 2018 were $70,250 and $Nil, respectively. Under the equity method of accounting, the Company recorded its share of net loss of $299,691 and $67,562 for the three months ended September 30, 2018 and 2017, respectively. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | NOTE 13 - INTANGIBLE ASSETS Intangible assets consisted of the following: As of September 30, 2018 As of June 30, 2018 Product Licenses - Cost $ 47,244,997 $ 47,244,997 Effect of Translation Adjustment (8,345,651 ) (7,857,270 ) Accumulated Amortization (27,433,421 ) (27,140,531 ) Net Balance $ 11,465,925 $ 12,247,196 (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 $11,465,925 will be amortized over the next 5 years. Amortization expense for the three months ended September 30, 2018 and 2017 was $585,708 and $690,327, respectively. (B) Future Amortization Estimated amortization expense of intangible assets over the next five years is as follows: Year ended: September 30, 2018 $ 2,351,923 September 30, 2020 2,351,923 September 30, 2021 2,351,923 September 30, 2022 2,351,923 September 30, 2023 2,058,233 $ 11,465,925 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 3 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | NOTE 14 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following: As of As of September 30, 2018 June 30, 2018 Accounts Payable $ 1,563,851 $ 1,665,865 Accrued Liabilities 4,815,986 5,505,312 Accrued Payroll & Taxes 364,373 302,640 Taxes Payable 267,012 233,959 Other Payable 142,556 166,033 Total $ 7,153,778 $ 7,873,809 |
Debts
Debts | 3 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debts | NOTE 15 – DEBTS Notes payable and capital leases consisted of the following: As of September 30, 2018 Current Long-Term Name Total Maturities Maturities D&O Insurance (1 ) $ 22,475 $ 22,475 $ - Bank Overdraft Facility (2 ) - - - Loan Payable Bank - Export Refinance (3 ) 4,043,018 4,043,018 - Loan Payable Bank - Running Finance (4 ) - - - Loan Payable Bank - Export Refinance II (5 ) 2,830,112 2,830,112 - Loan Payable Bank - Running Finance II (6 ) 1,212,905 1,212,905 - 8,108,510 8,108,510 - Subsidiary Capital Leases (7 ) 621,845 325,165 296,680 $ 8,730,355 $ 8,433,675 $ 296,680 As of June 30, 2018 Current Long-Term Name Total Maturities Maturities D&O Insurance (1 ) $ 69,578 $ 69,578 $ - Bank Overdraft Facility (2 ) - - - Loan Payable Bank - Export Refinance (3 ) 4,107,451 4,107,451 - Loan Payable Bank - Running Finance (4 ) - - - Loan Payable Bank - Export Refinance II (5 ) 2,875,216 2,875,216 - Loan Payable Bank - Running Finance II (6 ) 1,232,235 1,232,235 - 8,284,480 8,284,480 - Subsidiary Capital Leases (7 ) 642,035 311,439 330,596 $ 8,926,515 $ 8,595,919 $ 330,596 (1) The Company finances Directors’ and Officers’ (“D&O”) liability insurance and Errors and Omissions (“E&O”) liability insurance, for which the D&O and E&O balances are renewed on an annual basis and, as such, are recorded in current maturities. The interest rate on these financings were ranging from 5.25% to 6.48% as of September 30, 2018 and June 30, 2018. (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 $389,610. The annual interest rate was 5.12% as of September 30, 2018. Total outstanding balance as of September 30, 2018 was £Nil. Interest expense for the three months ended September 30, 2018 and 2017 was $Nil and $2,054, 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, 2018, 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 $4,043,018 at September 30, 2018 and June 30, 2018. The interest rate for the loan was 3% at September 30, 2018 and June 30, 2018. Interest expense for the three months ended September 30, 2018 and 2017 was $30,508 and $35,898, respectively. (4) The Company’s subsidiary, NetSol PK, has a running finance facility with Askari Bank Limited, secured by NetSol PK’s assets. Total facility amount is Rs. 75,000,000 or $606,453, at September 30, 2018. NetSol PK used Rs. Nil or $Nil, at September 30, 2018. The interest rate for the loan was 10.32% at September 30, 2018. 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, 2018, NetSol PK was in compliance with this covenant. (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 $2,830,112 and Rs. 350,000,000 or $2,875,216, at September 30, 2018 and June 30, 2018, respectively. The interest rate for the loan was 3% at September 30, 2018 and June 30, 2018. Interest expense for the three months ended September 30, 2018 and 2017 was $29,260 and $22,122, 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 $1,212,905 and Rs. 150,000,000 or $1,232,235, at September 30, 2018 and June 30, 2018, respectively. The interest rate for the loan was 8.43% and 8.14% at September 30, 2018 and June 30, 2018, respectively. Interest expense for the three months ended September 30, 2018 was $25,718 and $44,095, 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, 2018, NetSol PK was in compliance with these covenants. (7) 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, 2018 and 2017. Following is the aggregate minimum future lease payments under capital leases as of September 30, 2018: Amount Minimum Lease Payments Due FYE 9/30/19 $ 323,855 Due FYE 9/30/20 255,483 Due FYE 9/30/21 105,029 Due FYE 9/30/22 470 Total Minimum Lease Payments 684,837 Interest Expense relating to future periods (62,992 ) Present Value of minimum lease payments 621,845 Less: Current portion (325,165 ) Non-Current portion $ 296,680 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 16 - STOCKHOLDERS’ EQUITY During the three months ended September 30, 2018, the Company issued 14,838 shares of common stock for services rendered by officers of the Company. These shares were valued at the fair market value of $91,498. During the three months ended September 30, 2018, the Company issued 13,392 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 $77,304. During the three months ended September 30, 2018, the Company issued 45,661 shares of its common stock to employees pursuant to the terms of their employment agreements valued at $277,738. During the three months ended September 30, 2018, the Company adjusted the opening balance of retained earnings on adoption of new revenue recognition standard ASC 606. Total adjustment was $8,753,655 of which $5,795,795 were adjusted against the Company’s retained earnings and $2,957,860 were adjusted against non-controlling interest. A summary of the changes in equity for the three months ended September 30, 2018 is provided below: Stock Other Additional Sub- Compre- Non Total Common Stock Paid-in Treasury Accumulated scriptions Shares to hensive Controlling Stockholders’ Shares Amount Capital Shares Deficit Receivable be Issued Loss Interest Equity Balance at June 30, 2018 11,708,469 $ 117,085 $ 126,479,147 $ (1,205,024 ) $ (37,994,502 ) $ (221,000 ) $ - $ (24,386,071 ) $ 14,146,417 76,936,052 Adjustment in retained earnings on adoption of ASC 606 (5,795,795 ) (2,957,860 ) (8,753,655 ) Exercise of subsidiary common stock options - - (6,629 ) - - - - - 9,279 2,650 Common stock issued for: Services 73,891 739 445,801 - - - - - - 446,540 Equity component shown as current liability at June 30, 2018 - - - - - - 88,324 - - 88,324 September 30, 2018 - - - - - - (88,324 ) - - (88,324 ) Foreign currency translation adjustment - - - - - - - (263,203 ) (200,873 ) (464,076 ) Net loss for the year - - - - 962,589 - - - 318,546 1,281,135 Balance at September 30, 2018 11,782,360 $ 117,824 $ 126,918,319 $ (1,205,024 ) $ (42,827,708 ) $ (221,000 ) $ - $ (24,649,274 ) $ 11,315,509 $ 69,448,646 Statement of changes in equity as of September 30, 2017 is provided below: Stock Other Additional Sub- Compre- Non Total Common Stock Paid-in Treasury Accumulated scriptions Shares to hensive Controlling Stockholders’ Shares Amount Capital Shares Deficit Receivable be Issued Loss Interest Equity Balance at June 30, 2017 11,225,385 $ 112,254 $ 124,409,998 $ (454,310 ) $ (42,301,390 ) $ (297,511 ) $ - $ (18,074,570 ) $ 14,799,082 78,193,553 Exercise of common stock options 35,773 358 138,442 - - - - - - 138,800 Common stock issued for: Services 71,971 719 438,589 - - - - - - 439,308 Purchase of treasury shares - - - (500,663 ) - - - - - (500,663 ) Equity component shown as current liability at June 30, 2017 - - - - - - 88,324 - - 88,324 September 30, 2017 - - - - - - (88,324 ) - - (88,324 ) Payment received for stock subscription - - - - - 23,585 - - - 23,585 Foreign currency translation adjustment - - - - - - - (588,579 ) (237,165 ) (825,744 ) Net loss for the year - - - - (369,498 ) - - - 188,233 (181,265 ) Balance at September 30, 2017 11,333,129 $ 113,331 $ 124,987,029 $ (954,973 ) $ (42,670,888 ) $ (273,926 ) $ - $ (18,663,149 ) $ 14,750,150 $ 77,287,574 |
Incentive and Non-statutory Sto
Incentive and Non-statutory Stock Option Plan | 3 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Incentive and Non-statutory Stock Option Plan | NOTE 17 - INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN Common stock purchase options consisted of the following: OPTIONS: # of shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregated Intrinsic Value Outstanding and exercisable, June 30, 2018 53,462 $ 6.50 0.61 $ - Granted - - Exercised - - Expired / Cancellesd - - Outstanding and exercisable, September 30, 2018 53,462 $ 6.50 0.36 $ 5,346 The following table summarizes information about stock options outstanding and exercisable at September 30, 2018. Exercise Price Number Outstanding and Exercisable Weighted Average Remaining Contractual Life Weighted Ave Exercise Price OPTIONS: $ 6.50 53,462 0.36 $ 6.50 Totals 53,462 0.36 $ 6.50 The following table summarizes stock grants awarded as compensation: # of shares Weighted Average Grant Date Fair Value ($) Unvested, June 30, 2018 155,648 $ 6.07 Granted 92,276 $ 5.55 Vested (73,891 ) $ 6.04 Unvested, September 30, 2018 174,033 $ 5.88 For the three months ended September 30, 2018 and 2017, the Company recorded compensation expense of $432,048 and $439,308, respectively. The compensation expense related to the unvested stock grants as of September 30, 2018 was $1,011,309 which will be recognized during the fiscal years 2019 through 2022. |
Contingencies
Contingencies | 3 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | NOTE 18 – CONTINGENCIES From time to time, the Company is subject to legal proceedings, claims, and litigation arising in the ordinary course of business including tax assessments. The Company defends itself vigorously against any such claims. When (i) it is probable that an asset has been impaired or a liability has been incurred and (ii) the amount of the loss can be reasonably estimated, the Company records the estimated loss. The Company provides disclosure in the notes to the consolidated financial statements for loss contingencies that do not meet both conditions if there is a reasonable possibility that a loss may have been incurred that would be material to the financial statements. Significant judgment is required to determine the probability that a liability has been incurred and whether such liability is reasonably estimable. The Company bases accruals on the best information available at the time, which can be highly subjective. The final outcome of these matters could vary significantly from the amounts included in the accompanying consolidated financial statements. |
Operating Segments
Operating Segments | 3 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Operating Segments | NOTE 19 – 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, 2018 and June 30, 2018: As of As of September 30, 2018 June 30, 2018 Identifiable assets: Corporate headquarters $ 2,708,696 $ 2,839,049 North America 5,375,504 5,764,042 Europe 7,257,811 7,242,080 Asia - Pacific 74,992,823 83,929,110 Consolidated $ 90,334,834 $ 99,774,281 The following table presents a summary of investment under equity method as of September 30, 2018 and June 30, 2018: As of As of September 30, 2018 June 30, 2018 Investment in WRLD3D: Corporate headquarters $ 844,563 $ 918,628 Asia - Pacific 2,114,129 2,298,534 Consolidated $ 2,958,692 $ 3,217,162 The following table presents a summary of operating information for the three months ended September 30: For the Three Months Ended September 30, 2018 2017 Revenues from unaffiliated customers: North America $ 843,085 $ 848,072 Europe 1,766,594 1,447,824 Asia - Pacific 13,403,395 8,521,632 16,013,074 10,817,528 Revenue from affiliated customers Europe 153,340 601,192 Asia - Pacific 230,131 1,400,056 383,471 2,001,248 Consolidated $ 16,396,545 $ 12,818,776 Intercompany revenue Europe $ 138,653 $ 102,475 Asia - Pacific 3,192,386 376,937 Eliminated $ 3,331,039 $ 479,412 Net income (loss) after taxes and before non-controlling interest: Corporate headquarters $ (1,218,387 ) $ (1,037,924 ) North America (178,630 ) (295,646 ) Europe 174,088 99,390 Asia - Pacific 2,504,064 1,052,915 Consolidated $ 1,281,135 $ (181,265 ) The following table presents a summary of capital expenditures for the three months ended September 30: For the Three Months Ended September 30, 2018 2017 Capital expenditures: North America $ - $ - Europe 98,444 76,809 Asia - Pacific 464,969 251,354 Consolidated $ 563,413 $ 328,163 |
Non-Controlling Interest in Sub
Non-Controlling Interest in Subsidiary | 3 Months Ended |
Sep. 30, 2018 | |
Noncontrolling Interest [Abstract] | |
Non-Controlling Interest in Subsidiary | NOTE 20 – 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, 2018 NetSol PK 33.80 % $ 9,044,439 NetSol-Innovation 49.90 % 1,604,345 VLS, VLSH & VLSIL Combined 49.00 % 666,733 NetSol Thai 0.006 % (8 ) Total $ 11,315,509 SUBSIDIARY Non-Controlling Interest % Non-Controlling Interest at June 30, 2018 NetSol PK 33.79 % $ 11,873,029 NetSol-Innovation 49.90 % 1,699,661 VLS, VLHS & VLSIL Combined 49.00 % 573,742 NetSol Thai 0.006 % (15 ) Total $ 14,146,417 NetSol PK During the three months ended September 30, 2018, employees of NetSol PK exercised 20,000 options of common stock and NetSol PK received cash of $2,650. Due to the exercise of options, the non-controlling interest increased from 33.79% to 33.80%. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 3 Months Ended |
Sep. 30, 2018 | |
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, 2018, and June 30, 2018, the Company had uninsured deposits related to cash deposits in accounts maintained within foreign entities of approximately $19,253,434 and $20,933,224, 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. Level 2: Valuations rely on quoted prices in markets that are not active or observable inputs over the full term of the asset or liability. Level 3: 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 does not have any financial assets that are measured at fair value on a recurring basis as of September 30, 2018. The Company’s financial assets that were measured at fair value on a recurring basis as of June 30, 2018, were as follows: Level 1 Level 2 Level 3 Total Assets Revenues in excess of billing - long term $ - $ - $ 1,206,669 $ 1,206,669 Total $ - $ - $ 1,206,669 $ 1,206,669 The reconciliation from June 30, 2018 to September 30, 2018 is as follows: Revenues in excess of billing - long term Fair value discount Total Balance at June 30, 2018 $ 1,445,245 $ (238,576 ) $ 1,206,669 Effect of ASC 606 adoption (1,445,245 ) 238,576 (1,206,669 ) Balance at September 30, 2018 $ - $ - $ - 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 January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities In August 2016, the FASB issued ASU 2016-15, Clarification of Certain Cash Receipts and Cash Payments On November 17, 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers Revenue Recognition Software - Revenue Recognition The Company adopted Topic 606 on the first day of fiscal 2019 using the modified retrospective transition method. Under this method, the Company evaluated contracts that were in effect at the beginning of fiscal 2019 as if those contracts had been accounted for under Topic 606. The Company did not evaluate individual modifications for those periods prior to the adoption date, but the aggregate effect of all modifications as of the adoption date and such effects are provided below. Under the modified retrospective transition method, periods prior to the adoption date were not adjusted and continue to be reported in accordance with historical, pre-Topic 606 accounting. A cumulative catch-up adjustment was recorded to beginning accumulated deficit to reflect the impact of all existing arrangements under Topic 606. As a result of adopting ASC 606, the Company recorded a net decrease of $5,795,795 to opening accumulated deficit and $2,957,860 to non-controlling interest as of July 1, 2018 as a cumulative catch-up adjustment for all open contracts as of the date of adoption. The most significant drivers of this adjustment related to the allocation of revenue to certain performance obligations on a stand-alone selling price basis. Specifically, contracts with one customer were required to be aggregated under the guidance of ASC 606, resulting in additional revenue allocated to the maintenance services under these contracts. Under the guidance of ASC 605, the Company had recognized one of these contracts as a stand-alone and separate contract with this customer, which resulted in additional revenue allocated to the license and services that had previously been delivered to this customer. The following table presents the cumulative effect adjustments, net of income tax effects, to beginning consolidated balance sheet accounts for the new accounting standards adopted by the Company on the first day of fiscal 2019: As of Topic 606 As of June 30, 2018 Adjustments July 1, 2018 ASSETS Current assets: Cash and cash equivalents $ 22,088,853 $ 22,088,853 Accounts receivable, net of allowance of $610,061 and $571,511 12,775,461 12,775,461 Accounts receivable, net - related party 3,374,272 3,374,272 Revenues in excess of billings 14,285,778 (7,328,812 ) 6,956,966 Revenues in excess of billings - related party - - Convertible note receivable - related party 2,123,500 2,123,500 Other current assets 2,703,032 2,703,032 Total current assets 57,350,896 (7,328,812 ) 50,022,084 Revenues in excess of billings, net - long term 1,206,669 (1,206,669 ) - Property and equipment, net 16,165,491 16,165,491 Long term investment 3,217,162 3,217,162 Other assets 70,299 70,299 Intangible assets, net 12,247,196 12,247,196 Goodwill 9,516,568 9,516,568 Total assets $ 99,774,281 $ (8,535,481 ) $ 91,238,800 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued expenses $ 7,873,809 $ 7,873,809 Current portion of loans and obligations under capitalized leases 8,595,919 8,595,919 Unearned revenues 5,949,581 218,174 6,167,755 Common stock to be issued 88,324 88,324 Total current liabilities 22,507,633 218,174 22,725,807 Loans and obligations under capitalized leases; 330,596 330,596 Total liabilities 22,838,229 218,174 23,056,403 Commitments and contingencies Stockholders’ equity: Preferred stock, $.01 par value; 500,000 shares authorized; - - - Common stock, $.01 par value; 14,500,000 shares authorized; 11,708,469 shares issued and 11,502,616 outstanding as of June 30, 2018 and 11,225,385 shares issued and 11,190,606 outstanding as of June 30, 2017 117,085 117,085 Additional paid-in-capital 126,479,147 126,479,147 Treasury stock (At cost, 205,853 shares and 34,779 shares as of June 30, 2018 and June 30, 2017, respectively) (1,205,024 ) (1,205,024 ) Accumulated deficit (37,994,502 ) (5,795,795 ) (43,790,297 ) Stock subscription receivable (221,000 ) (221,000 ) Other comprehensive loss (24,386,071 ) (24,386,071 ) Total NetSol stockholders’ equity 62,789,635 (5,795,795 ) 56,993,840 Non-controlling interest 14,146,417 (2,957,860 ) 11,188,557 Total stockholders’ equity 76,936,052 (8,753,655 ) 68,182,397 Total liabilities and stockholders’ equity $ 99,774,281 $ (8,535,481 ) $ 91,238,800 The following table presents the cumulative effect adjustments, net of income tax effects, to beginning consolidated balance sheet accounts for the new accounting standards adopted by the Company as of September 30, 2018: As reported under Topic 606 Balances under Prior GAAP September 30, 2018 Adjustments September 30, 2018 ASSETS Current assets: Cash and cash equivalents $ 20,435,744 $ 20,435,744 Accounts receivable, net of allowance of $600,833 and $610,061 7,487,381 7,487,381 Accounts receivable, net - related party 3,039,320 3,039,320 Revenues in excess of billings 13,335,529 7,458,067 20,793,596 Revenues in excess of billings - related party 70,250 70,250 Convertible note receivable - related party 2,881,500 2,881,500 Other current assets 3,438,861 3,438,861 Total current assets 50,688,585 7,458,067 58,146,652 Revenues in excess of billings, net - long term - 1,281,652 1,281,652 Property and equipment, net 15,650,128 15,650,128 Long term investment 2,958,692 2,958,692 Other assets 54,936 54,936 Intangible assets, net 11,465,925 11,465,925 Goodwill 9,516,568 9,516,568 Total assets $ 90,334,834 $ 8,739,719 $ 99,074,553 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued expenses $ 7,153,778 $ 7,153,778 Current portion of loans and obligations under capitalized leases 8,433,675 8,433,675 Unearned revenues 4,913,731 (289,099 ) 4,624,632 Common stock to be issued 88,324 88,324 Total current liabilities 20,589,508 (289,099 ) 20,300,409 Loans and obligations under capitalized leases; 296,680 296,680 Total liabilities 20,886,188 (289,099 ) 20,597,089 Commitments and contingencies Stockholders’ equity: Preferred stock, $.01 par value; 500,000 shares authorized; - - - Common stock, $.01 par value; 14,500,000 shares authorized; 11,782,360 shares issued and 11,576,507 outstanding as of September 30, 2018 and 11,708,469 shares issued and 11,502,616 outstanding as of June 30, 2018 117,824 117,824 Additional paid-in-capital 126,918,319 126,918,319 Treasury stock (At cost, 205,853 shares and 205,853 shares as of September 30, 2018 and June 30, 2018, respectively) (1,205,024 ) (1,205,024 ) Accumulated deficit (42,827,708 ) 5,977,953 (36,849,755 ) Stock subscription receivable (221,000 ) (221,000 ) Other comprehensive loss (24,649,274 ) (24,649,274 ) Total NetSol stockholders’ equity 58,133,137 5,977,953 64,111,090 Non-controlling interest 11,315,509 3,050,865 14,366,374 Total stockholders’ equity 69,448,646 9,028,818 78,477,464 Total liabilities and stockholders’ equity $ 90,334,834 $ 8,739,719 $ 99,074,553 The following table summarizes the effects of adopting Topic 606 on the Company’s Condensed Consolidated Statement of Income for the three months ended September 30, 2018: For the Three Months Ended September 30, 2018 As reported under Under prior Topic 606 Adjustments GAAP Net Revenues: License fees $ 5,956,113 $ 5,956,113 Maintenance fees 3,638,327 146,477 3,784,804 Services 6,418,634 6,418,634 License fees - related party - - Maintenance fees - related party 101,349 101,349 Services - related party 282,122 282,122 Total net revenues 16,396,545 146,477 16,543,022 Cost of revenues: Salaries and consultants 5,020,562 5,020,562 Travel 1,151,997 1,151,997 Depreciation and amortization 937,604 937,604 Other 1,048,324 1,048,324 Total cost of revenues 8,158,487 - 8,158,487 Gross profit 8,238,058 146,477 8,384,535 Operating expenses: Selling and marketing 1,701,326 1,701,326 Depreciation and amortization 212,232 212,232 General and administrative 4,406,720 4,406,720 Research and development cost 318,155 318,155 Total operating expenses 6,638,433 - 6,638,433 Income (loss) from operations 1,599,625 146,477 1,746,102 Other income and (expenses) Gain (loss) on sale of assets 52,294 52,294 Interest expense (99,434 ) (99,434 ) Interest income 248,964 74,983 323,947 Gain on foreign currency exchange transactions 10,912 53,703 64,615 Share of net loss from equity investment (299,691 ) (299,691 ) Other income (expense) 5,379 5,379 Total other income (expenses) (81,576 ) 128,686 47,110 Net income (loss) before income taxes 1,518,049 275,163 1,793,212 Income tax provision (236,914 ) (236,914 ) Net income (loss) 1,281,135 275,163 1,556,298 Non-controlling interest (318,546 ) (93,005 ) (411,551 ) Net income (loss) attributable to NetSol $ 962,589 $ 182,158 $ 1,144,747 Net income (loss) per share: Net income (loss) per common share Basic $ 0.08 $ 0.02 $ 0.10 Diluted $ 0.08 $ 0.02 $ 0.10 Weighted average number of shares outstanding Basic 11,502,616 11,502,616 11,502,616 Diluted 11,507,730 11,507,730 11,507,730 The following table summarizes the effects of adopting Topic 606 on the financial statement line items of the Company’s Consolidated Statement of Cash Flows for the three months ended September 30, 2018: For the Three Months Ended September 30, 2018 As reported under Under prior Topic 606 Adjustments GAAP Cash flows from operating activities: Net income (loss) $ 1,281,135 $ 275,163 $ 1,556,298 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 1,149,836 1,149,836 Share of net loss from investment under equity method 299,691 299,691 (Gain) loss on sale of assets (52,294 ) (52,294 ) Stock based compensation 432,048 432,048 Changes in operating assets and liabilities: - Accounts receivable 5,136,381 5,136,381 Accounts receivable - related party 284,869 284,869 Revenues in excess of billing (6,347,196 ) (204,238 ) (6,551,434 ) Revenues in excess of billing - related party (70,102 ) (70,102 ) Other current assets (571,246 ) (571,246 ) Accounts payable and accrued expenses (680,147 ) (680,147 ) Unearned revenue (1,202,420 ) (70,925 ) (1,273,345 ) Net cash used in operating activities (339,445 ) - (339,445 ) Cash flows from investing activities: Purchases of property and equipment (563,413 ) (563,413 ) Sales of property and equipment 184,032 184,032 Convertible note receivable - related party (758,000 ) (758,000 ) Net cash used in investing activities (1,137,381 ) - (1,137,381 ) Cash flows from financing activities: Proceeds from the exercise of stock options and warrants - - Proceeds from exercise of subsidiary options 2,650 2,650 Purchase of treasury stock - - Proceeds from bank loans 119,895 119,895 Payments on capital lease obligations and loans - net (179,237 ) (179,237 ) Net cash provided by (used in) financing activities (56,692 ) - (56,692 ) Effect of exchange rate changes (119,591 ) (119,591 ) Net increase in cash and cash equivalents (1,653,109 ) - (1,653,109 ) Cash and cash equivalents at beginning of the period 22,088,853 22,088,853 Cash and cash equivalents at end of period $ 20,435,744 $ - $ 20,435,744 Accounting Standards Recently Issued but Not Yet Adopted by the Company: In February 2016, the FASB issued ASU 2016-02, Leases In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment In July 2017, the FASB issued ASU 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. |
Accounting Policies (Tables)
Accounting Policies (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Fair Value of Financial Assets Measured On Recurring Basis | The Company’s financial assets that were measured at fair value on a recurring basis as of June 30, 2018, were as follows: Level 1 Level 2 Level 3 Total Assets Revenues in excess of billing - long term $ - $ - $ 1,206,669 $ 1,206,669 Total $ - $ - $ 1,206,669 $ 1,206,669 |
Schedule of Fair Value of Financial Instruments Reconciliation | The reconciliation from June 30, 2018 to September 30, 2018 is as follows: Revenues in excess of billing - long term Fair value discount Total Balance at June 30, 2018 $ 1,445,245 $ (238,576 ) $ 1,206,669 Effect of ASC 606 adoption (1,445,245 ) 238,576 (1,206,669 ) Balance at September 30, 2018 $ - $ - $ - |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The following table presents the cumulative effect adjustments, net of income tax effects, to beginning consolidated balance sheet accounts for the new accounting standards adopted by the Company on the first day of fiscal 2019: As of Topic 606 As of June 30, 2018 Adjustments July 1, 2018 ASSETS Current assets: Cash and cash equivalents $ 22,088,853 $ 22,088,853 Accounts receivable, net of allowance of $610,061 and $571,511 12,775,461 12,775,461 Accounts receivable, net - related party 3,374,272 3,374,272 Revenues in excess of billings 14,285,778 (7,328,812 ) 6,956,966 Revenues in excess of billings - related party - - Convertible note receivable - related party 2,123,500 2,123,500 Other current assets 2,703,032 2,703,032 Total current assets 57,350,896 (7,328,812 ) 50,022,084 Revenues in excess of billings, net - long term 1,206,669 (1,206,669 ) - Property and equipment, net 16,165,491 16,165,491 Long term investment 3,217,162 3,217,162 Other assets 70,299 70,299 Intangible assets, net 12,247,196 12,247,196 Goodwill 9,516,568 9,516,568 Total assets $ 99,774,281 $ (8,535,481 ) $ 91,238,800 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued expenses $ 7,873,809 $ 7,873,809 Current portion of loans and obligations under capitalized leases 8,595,919 8,595,919 Unearned revenues 5,949,581 218,174 6,167,755 Common stock to be issued 88,324 88,324 Total current liabilities 22,507,633 218,174 22,725,807 Loans and obligations under capitalized leases; 330,596 330,596 Total liabilities 22,838,229 218,174 23,056,403 Commitments and contingencies Stockholders’ equity: Preferred stock, $.01 par value; 500,000 shares authorized; - - - Common stock, $.01 par value; 14,500,000 shares authorized; 11,708,469 shares issued and 11,502,616 outstanding as of June 30, 2018 and 11,225,385 shares issued and 11,190,606 outstanding as of June 30, 2017 117,085 117,085 Additional paid-in-capital 126,479,147 126,479,147 Treasury stock (At cost, 205,853 shares and 34,779 shares as of June 30, 2018 and June 30, 2017, respectively) (1,205,024 ) (1,205,024 ) Accumulated deficit (37,994,502 ) (5,795,795 ) (43,790,297 ) Stock subscription receivable (221,000 ) (221,000 ) Other comprehensive loss (24,386,071 ) (24,386,071 ) Total NetSol stockholders’ equity 62,789,635 (5,795,795 ) 56,993,840 Non-controlling interest 14,146,417 (2,957,860 ) 11,188,557 Total stockholders’ equity 76,936,052 (8,753,655 ) 68,182,397 Total liabilities and stockholders’ equity $ 99,774,281 $ (8,535,481 ) $ 91,238,800 The following table presents the cumulative effect adjustments, net of income tax effects, to beginning consolidated balance sheet accounts for the new accounting standards adopted by the Company as of September 30, 2018: As reported under Topic 606 Balances under Prior GAAP September 30, 2018 Adjustments September 30, 2018 ASSETS Current assets: Cash and cash equivalents $ 20,435,744 $ 20,435,744 Accounts receivable, net of allowance of $600,833 and $610,061 7,487,381 7,487,381 Accounts receivable, net - related party 3,039,320 3,039,320 Revenues in excess of billings 13,335,529 7,458,067 20,793,596 Revenues in excess of billings - related party 70,250 70,250 Convertible note receivable - related party 2,881,500 2,881,500 Other current assets 3,438,861 3,438,861 Total current assets 50,688,585 7,458,067 58,146,652 Revenues in excess of billings, net - long term - 1,281,652 1,281,652 Property and equipment, net 15,650,128 15,650,128 Long term investment 2,958,692 2,958,692 Other assets 54,936 54,936 Intangible assets, net 11,465,925 11,465,925 Goodwill 9,516,568 9,516,568 Total assets $ 90,334,834 $ 8,739,719 $ 99,074,553 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued expenses $ 7,153,778 $ 7,153,778 Current portion of loans and obligations under capitalized leases 8,433,675 8,433,675 Unearned revenues 4,913,731 (289,099 ) 4,624,632 Common stock to be issued 88,324 88,324 Total current liabilities 20,589,508 (289,099 ) 20,300,409 Loans and obligations under capitalized leases; 296,680 296,680 Total liabilities 20,886,188 (289,099 ) 20,597,089 Commitments and contingencies Stockholders’ equity: Preferred stock, $.01 par value; 500,000 shares authorized; - - - Common stock, $.01 par value; 14,500,000 shares authorized; 11,782,360 shares issued and 11,576,507 outstanding as of September 30, 2018 and 11,708,469 shares issued and 11,502,616 outstanding as of June 30, 2018 117,824 117,824 Additional paid-in-capital 126,918,319 126,918,319 Treasury stock (At cost, 205,853 shares and 205,853 shares as of September 30, 2018 and June 30, 2018, respectively) (1,205,024 ) (1,205,024 ) Accumulated deficit (42,827,708 ) 5,977,953 (36,849,755 ) Stock subscription receivable (221,000 ) (221,000 ) Other comprehensive loss (24,649,274 ) (24,649,274 ) Total NetSol stockholders’ equity 58,133,137 5,977,953 64,111,090 Non-controlling interest 11,315,509 3,050,865 14,366,374 Total stockholders’ equity 69,448,646 9,028,818 78,477,464 Total liabilities and stockholders’ equity $ 90,334,834 $ 8,739,719 $ 99,074,553 The following table summarizes the effects of adopting Topic 606 on the Company’s Condensed Consolidated Statement of Income for the three months ended September 30, 2018: For the Three Months Ended September 30, 2018 As reported under Under prior Topic 606 Adjustments GAAP Net Revenues: License fees $ 5,956,113 $ 5,956,113 Maintenance fees 3,638,327 146,477 3,784,804 Services 6,418,634 6,418,634 License fees - related party - - Maintenance fees - related party 101,349 101,349 Services - related party 282,122 282,122 Total net revenues 16,396,545 146,477 16,543,022 Cost of revenues: Salaries and consultants 5,020,562 5,020,562 Travel 1,151,997 1,151,997 Depreciation and amortization 937,604 937,604 Other 1,048,324 1,048,324 Total cost of revenues 8,158,487 - 8,158,487 Gross profit 8,238,058 146,477 8,384,535 Operating expenses: Selling and marketing 1,701,326 1,701,326 Depreciation and amortization 212,232 212,232 General and administrative 4,406,720 4,406,720 Research and development cost 318,155 318,155 Total operating expenses 6,638,433 - 6,638,433 Income (loss) from operations 1,599,625 146,477 1,746,102 Other income and (expenses) Gain (loss) on sale of assets 52,294 52,294 Interest expense (99,434 ) (99,434 ) Interest income 248,964 74,983 323,947 Gain on foreign currency exchange transactions 10,912 53,703 64,615 Share of net loss from equity investment (299,691 ) (299,691 ) Other income (expense) 5,379 5,379 Total other income (expenses) (81,576 ) 128,686 47,110 Net income (loss) before income taxes 1,518,049 275,163 1,793,212 Income tax provision (236,914 ) (236,914 ) Net income (loss) 1,281,135 275,163 1,556,298 Non-controlling interest (318,546 ) (93,005 ) (411,551 ) Net income (loss) attributable to NetSol $ 962,589 $ 182,158 $ 1,144,747 Net income (loss) per share: Net income (loss) per common share Basic $ 0.08 $ 0.02 $ 0.10 Diluted $ 0.08 $ 0.02 $ 0.10 Weighted average number of shares outstanding Basic 11,502,616 11,502,616 11,502,616 Diluted 11,507,730 11,507,730 11,507,730 The following table summarizes the effects of adopting Topic 606 on the financial statement line items of the Company’s Consolidated Statement of Cash Flows for the three months ended September 30, 2018: For the Three Months Ended September 30, 2018 As reported under Under prior Topic 606 Adjustments GAAP Cash flows from operating activities: Net income (loss) $ 1,281,135 $ 275,163 $ 1,556,298 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 1,149,836 1,149,836 Share of net loss from investment under equity method 299,691 299,691 (Gain) loss on sale of assets (52,294 ) (52,294 ) Stock based compensation 432,048 432,048 Changes in operating assets and liabilities: - Accounts receivable 5,136,381 5,136,381 Accounts receivable - related party 284,869 284,869 Revenues in excess of billing (6,347,196 ) (204,238 ) (6,551,434 ) Revenues in excess of billing - related party (70,102 ) (70,102 ) Other current assets (571,246 ) (571,246 ) Accounts payable and accrued expenses (680,147 ) (680,147 ) Unearned revenue (1,202,420 ) (70,925 ) (1,273,345 ) Net cash used in operating activities (339,445 ) - (339,445 ) Cash flows from investing activities: Purchases of property and equipment (563,413 ) (563,413 ) Sales of property and equipment 184,032 184,032 Convertible note receivable - related party (758,000 ) (758,000 ) Net cash used in investing activities (1,137,381 ) - (1,137,381 ) Cash flows from financing activities: Proceeds from the exercise of stock options and warrants - - Proceeds from exercise of subsidiary options 2,650 2,650 Purchase of treasury stock - - Proceeds from bank loans 119,895 119,895 Payments on capital lease obligations and loans - net (179,237 ) (179,237 ) Net cash provided by (used in) financing activities (56,692 ) - (56,692 ) Effect of exchange rate changes (119,591 ) (119,591 ) Net increase in cash and cash equivalents (1,653,109 ) - (1,653,109 ) Cash and cash equivalents at beginning of the period 22,088,853 22,088,853 Cash and cash equivalents at end of period $ 20,435,744 $ - $ 20,435,744 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Schedule of Disaggregated Revenue by Category | The Company’s disaggregated revenue by category is as follows: For the Three Months Ended September 30, 2018 2017 Core: License $ 5,956,113 $ 326,066 Maintenance 3,638,327 3,473,725 Services 4,970,273 5,958,266 License - related party - 44,408 Maintenance fees - related party 101,349 102,963 Services - related party 180,597 620,549 Total core revenue, net 14,846,659 10,525,977 Non-Core: Services 1,448,361 1,059,471 Services - related party 101,525 1,233,328 Total non-core revenue, net 1,549,886 2,292,799 Total net revenue $ 16,396,545 $ 12,818,776 |
Schedule of Revenues in Excess of Billings and Deferred Revenue | The Company’s revenues in excess of billings and deferred revenue are as follows: As of As of September 30, 2018 July 1, 2018 Revenues in excess of billings $ 13,335,529 $ 6,956,966 Deferred Revenue $ 4,913,731 $ 6,167,755 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Components of Basic and Diluted Earnings Per Share | The components of basic and diluted earnings per share were as follows: For the three months ended September 30, 2018 Net Income Shares Per Share Basic income per share: Net income available to common shareholders $ 962,589 11,502,616 $ 0.08 Effect of dilutive securities Share grants - 5,114 - Diluted income per share $ 962,589 11,507,730 $ 0.08 For the three months ended September 30, 2017 Net Loss Shares Per Share Basic loss per share: Net loss available to common shareholders $ (369,498 ) 11,099,113 $ (0.03 ) Effect of dilutive securities Stock options - - - Diluted loss per share $ (369,498 ) 11,099,113 $ (0.03 ) |
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, 2018 2017 Stock Options 53,462 438,360 Share Grants - 348,228 53,462 786,588 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Current Assets | Other current assets consisted of the following: As of As of September 30, 2018 June 30, 2018 Prepaid Expenses $ 767,104 $ 662,431 Advance Income Tax 930,906 838,799 Employee Advances 176,371 48,096 Security Deposits 102,490 85,249 Other Receivables 594,648 497,632 Other Assets 867,342 570,825 Total $ 3,438,861 $ 2,703,032 |
Revenues in Excess of Billing_2
Revenues in Excess of Billings - Long Term (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Contractors [Abstract] | |
Schedule of Revenues in Excess of Billings | Revenues in excess of billings, net consisted of the following: As of As of September 30, 2018 June 30, 2018 Revenues in excess of billing - long term $ - $ 1,445,245 Present value discount - (238,576 ) Net Balance $ - $ 1,206,669 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following: As of As of September 30, 2018 June 30, 2018 Office Furniture and Equipment $ 3,490,984 $ 3,496,653 Computer Equipment 23,527,408 23,708,034 Assets Under Capital Leases 1,524,146 1,479,976 Building 7,882,598 8,005,351 Land 2,055,701 2,088,463 Autos 1,006,504 1,053,749 Improvements 158,815 324,023 Subtotal 39,646,156 40,156,249 Accumulated Depreciation (23,996,028 ) (23,990,758 ) Property and Equipment, Net $ 15,650,128 $ 16,165,491 |
Summary of Fixed Assets Held Under Capital Leases | Following is a summary of fixed assets held under capital leases as of September 30, 2018 and June 30, 2018: As of As of September 30, 2018 June 30, 2018 Computers and Other Equipment $ 275,770 $ 228,581 Furniture and Fixtures 65,084 65,084 Vehicles 1,183,292 1,186,311 Total 1,524,146 1,479,976 Less: Accumulated Depreciation - Net (526,498 ) (477,620 ) $ 997,648 $ 1,002,356 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consisted of the following: As of September 30, 2018 As of June 30, 2018 Product Licenses - Cost $ 47,244,997 $ 47,244,997 Effect of Translation Adjustment (8,345,651 ) (7,857,270 ) Accumulated Amortization (27,433,421 ) (27,140,531 ) Net Balance $ 11,465,925 $ 12,247,196 |
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 $ 2,351,923 September 30, 2020 2,351,923 September 30, 2021 2,351,923 September 30, 2022 2,351,923 September 30, 2023 2,058,233 $ 11,465,925 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consisted of the following: As of As of September 30, 2018 June 30, 2018 Accounts Payable $ 1,563,851 $ 1,665,865 Accrued Liabilities 4,815,986 5,505,312 Accrued Payroll & Taxes 364,373 302,640 Taxes Payable 267,012 233,959 Other Payable 142,556 166,033 Total $ 7,153,778 $ 7,873,809 |
Debts (Tables)
Debts (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Components of Notes Payable and Capital Leases | Notes payable and capital leases consisted of the following: As of September 30, 2018 Current Long-Term Name Total Maturities Maturities D&O Insurance (1 ) $ 22,475 $ 22,475 $ - Bank Overdraft Facility (2 ) - - - Loan Payable Bank - Export Refinance (3 ) 4,043,018 4,043,018 - Loan Payable Bank - Running Finance (4 ) - - - Loan Payable Bank - Export Refinance II (5 ) 2,830,112 2,830,112 - Loan Payable Bank - Running Finance II (6 ) 1,212,905 1,212,905 - 8,108,510 8,108,510 - Subsidiary Capital Leases (7 ) 621,845 325,165 296,680 $ 8,730,355 $ 8,433,675 $ 296,680 As of June 30, 2018 Current Long-Term Name Total Maturities Maturities D&O Insurance (1 ) $ 69,578 $ 69,578 $ - Bank Overdraft Facility (2 ) - - - Loan Payable Bank - Export Refinance (3 ) 4,107,451 4,107,451 - Loan Payable Bank - Running Finance (4 ) - - - Loan Payable Bank - Export Refinance II (5 ) 2,875,216 2,875,216 - Loan Payable Bank - Running Finance II (6 ) 1,232,235 1,232,235 - 8,284,480 8,284,480 - Subsidiary Capital Leases (7 ) 642,035 311,439 330,596 $ 8,926,515 $ 8,595,919 $ 330,596 (1) The Company finances Directors’ and Officers’ (“D&O”) liability insurance and Errors and Omissions (“E&O”) liability insurance, for which the D&O and E&O balances are renewed on an annual basis and, as such, are recorded in current maturities. The interest rate on these financings were ranging from 5.25% to 6.48% as of September 30, 2018 and June 30, 2018. (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 $389,610. The annual interest rate was 5.12% as of September 30, 2018. Total outstanding balance as of September 30, 2018 was £Nil. Interest expense for the three months ended September 30, 2018 and 2017 was $Nil and $2,054, 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, 2018, 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 $4,043,018 at September 30, 2018 and June 30, 2018. The interest rate for the loan was 3% at September 30, 2018 and June 30, 2018. Interest expense for the three months ended September 30, 2018 and 2017 was $30,508 and $35,898, respectively. (4) The Company’s subsidiary, NetSol PK, has a running finance facility with Askari Bank Limited, secured by NetSol PK’s assets. Total facility amount is Rs. 75,000,000 or $606,453, at September 30, 2018. NetSol PK used Rs. Nil or $Nil, at September 30, 2018. The interest rate for the loan was 10.32% at September 30, 2018. 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, 2018, NetSol PK was in compliance with this covenant. (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 $2,830,112 and Rs. 350,000,000 or $2,875,216, at September 30, 2018 and June 30, 2018, respectively. The interest rate for the loan was 3% at September 30, 2018 and June 30, 2018. Interest expense for the three months ended September 30, 2018 and 2017 was $29,260 and $22,122, 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 $1,212,905 and Rs. 150,000,000 or $1,232,235, at September 30, 2018 and June 30, 2018, respectively. The interest rate for the loan was 8.43% and 8.14% at September 30, 2018 and June 30, 2018, respectively. Interest expense for the three months ended September 30, 2018 was $25,718 and $44,095, 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, 2018, NetSol PK was in compliance with these covenants. (7) 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, 2018 and 2017. |
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, 2018: Amount Minimum Lease Payments Due FYE 9/30/19 $ 323,855 Due FYE 9/30/20 255,483 Due FYE 9/30/21 105,029 Due FYE 9/30/22 470 Total Minimum Lease Payments 684,837 Interest Expense relating to future periods (62,992 ) Present Value of minimum lease payments 621,845 Less: Current portion (325,165 ) Non-Current portion $ 296,680 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Schedule of Changes in Stockholders’ Equity | A summary of the changes in equity for the three months ended September 30, 2018 is provided below: Stock Other Additional Sub- Compre- Non Total Common Stock Paid-in Treasury Accumulated scriptions Shares to hensive Controlling Stockholders’ Shares Amount Capital Shares Deficit Receivable be Issued Loss Interest Equity Balance at June 30, 2018 11,708,469 $ 117,085 $ 126,479,147 $ (1,205,024 ) $ (37,994,502 ) $ (221,000 ) $ - $ (24,386,071 ) $ 14,146,417 76,936,052 Adjustment in retained earnings on adoption of ASC 606 (5,795,795 ) (2,957,860 ) (8,753,655 ) Exercise of subsidiary common stock options - - (6,629 ) - - - - - 9,279 2,650 Common stock issued for: Services 73,891 739 445,801 - - - - - - 446,540 Equity component shown as current liability at June 30, 2018 - - - - - - 88,324 - - 88,324 September 30, 2018 - - - - - - (88,324 ) - - (88,324 ) Foreign currency translation adjustment - - - - - - - (263,203 ) (200,873 ) (464,076 ) Net loss for the year - - - - 962,589 - - - 318,546 1,281,135 Balance at September 30, 2018 11,782,360 $ 117,824 $ 126,918,319 $ (1,205,024 ) $ (42,827,708 ) $ (221,000 ) $ - $ (24,649,274 ) $ 11,315,509 $ 69,448,646 Statement of changes in equity as of September 30, 2017 is provided below: Stock Other Additional Sub- Compre- Non Total Common Stock Paid-in Treasury Accumulated scriptions Shares to hensive Controlling Stockholders’ Shares Amount Capital Shares Deficit Receivable be Issued Loss Interest Equity Balance at June 30, 2017 11,225,385 $ 112,254 $ 124,409,998 $ (454,310 ) $ (42,301,390 ) $ (297,511 ) $ - $ (18,074,570 ) $ 14,799,082 78,193,553 Exercise of common stock options 35,773 358 138,442 - - - - - - 138,800 Common stock issued for: Services 71,971 719 438,589 - - - - - - 439,308 Purchase of treasury shares - - - (500,663 ) - - - - - (500,663 ) Equity component shown as current liability at June 30, 2017 - - - - - - 88,324 - - 88,324 September 30, 2017 - - - - - - (88,324 ) - - (88,324 ) Payment received for stock subscription - - - - - 23,585 - - - 23,585 Foreign currency translation adjustment - - - - - - - (588,579 ) (237,165 ) (825,744 ) Net loss for the year - - - - (369,498 ) - - - 188,233 (181,265 ) Balance at September 30, 2017 11,333,129 $ 113,331 $ 124,987,029 $ (954,973 ) $ (42,670,888 ) $ (273,926 ) $ - $ (18,663,149 ) $ 14,750,150 $ 77,287,574 |
Incentive and Non-Statutory S_2
Incentive and Non-Statutory Stock Option Plan (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Components of Common Stock Purchase Options and Warrants | Common stock purchase options consisted of the following: OPTIONS: # of shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregated Intrinsic Value Outstanding and exercisable, June 30, 2018 53,462 $ 6.50 0.61 $ - Granted - - Exercised - - Expired / Cancellesd - - Outstanding and exercisable, September 30, 2018 53,462 $ 6.50 0.36 $ 5,346 |
Schedule of Stock Options and Warrants Outstanding and Exercisable Activity | The following table summarizes information about stock options outstanding and exercisable at September 30, 2018. Exercise Price Number Outstanding and Exercisable Weighted Average Remaining Contractual Life Weighted Ave Exercise Price OPTIONS: $ 6.50 53,462 0.36 $ 6.50 Totals 53,462 0.36 $ 6.50 |
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, 2018 155,648 $ 6.07 Granted 92,276 $ 5.55 Vested (73,891 ) $ 6.04 Unvested, September 30, 2018 174,033 $ 5.88 |
Operating Segments (Tables)
Operating Segments (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Summary of Identifiable Assets | The following table presents a summary of identifiable assets as of September 30, 2018 and June 30, 2018: As of As of September 30, 2018 June 30, 2018 Identifiable assets: Corporate headquarters $ 2,708,696 $ 2,839,049 North America 5,375,504 5,764,042 Europe 7,257,811 7,242,080 Asia - Pacific 74,992,823 83,929,110 Consolidated $ 90,334,834 $ 99,774,281 |
Summary of Investment Under Equity Method | The following table presents a summary of investment under equity method as of September 30, 2018 and June 30, 2018: As of As of September 30, 2018 June 30, 2018 Investment in WRLD3D: Corporate headquarters $ 844,563 $ 918,628 Asia - Pacific 2,114,129 2,298,534 Consolidated $ 2,958,692 $ 3,217,162 |
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, 2018 2017 Revenues from unaffiliated customers: North America $ 843,085 $ 848,072 Europe 1,766,594 1,447,824 Asia - Pacific 13,403,395 8,521,632 16,013,074 10,817,528 Revenue from affiliated customers Europe 153,340 601,192 Asia - Pacific 230,131 1,400,056 383,471 2,001,248 Consolidated $ 16,396,545 $ 12,818,776 Intercompany revenue Europe $ 138,653 $ 102,475 Asia - Pacific 3,192,386 376,937 Eliminated $ 3,331,039 $ 479,412 Net income (loss) after taxes and before non-controlling interest: Corporate headquarters $ (1,218,387 ) $ (1,037,924 ) North America (178,630 ) (295,646 ) Europe 174,088 99,390 Asia - Pacific 2,504,064 1,052,915 Consolidated $ 1,281,135 $ (181,265 ) |
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, 2018 2017 Capital expenditures: North America $ - $ - Europe 98,444 76,809 Asia - Pacific 464,969 251,354 Consolidated $ 563,413 $ 328,163 |
Non-Controlling Interest in S_2
Non-Controlling Interest in Subsidiary (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
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, 2018 NetSol PK 33.80 % $ 9,044,439 NetSol-Innovation 49.90 % 1,604,345 VLS, VLSH & VLSIL Combined 49.00 % 666,733 NetSol Thai 0.006 % (8 ) Total $ 11,315,509 SUBSIDIARY Non-Controlling Interest % Non-Controlling Interest at June 30, 2018 NetSol PK 33.79 % $ 11,873,029 NetSol-Innovation 49.90 % 1,699,661 VLS, VLHS & VLSIL Combined 49.00 % 573,742 NetSol Thai 0.006 % (15 ) Total $ 14,146,417 |
Accounting Policies (Details Na
Accounting Policies (Details Narrative) - USD ($) | Sep. 30, 2018 | Jun. 30, 2018 |
Accounting Policies [Abstract] | ||
Uninsured deposits related to cash deposits | $ 19,253,434 | $ 20,933,224 |
Accounting Policies - Schedule
Accounting Policies - Schedule of Fair Value of Financial Assets Measured On Recurring Basis (Details) - USD ($) | Sep. 30, 2018 | Jul. 02, 2018 | Jun. 30, 2018 |
Revenue in excess of billing - long term | $ 1,206,669 | ||
Total | 1,206,669 | ||
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 | 1,206,669 | ||
Total | $ 1,206,669 |
Accounting Policies - Schedul_2
Accounting Policies - Schedule of Fair Value of Financial Instruments Reconciliation (Details) | 3 Months Ended |
Sep. 30, 2018USD ($) | |
Revenue in excess of billing long term beginning balance | $ 1,206,669 |
Effect of ASC 606 adoption | (1,206,669) |
Revenue in excess of billing long term ending balance | |
Fair Value Discount [Member] | |
Revenue in excess of billing long term beginning balance | (238,576) |
Effect of ASC 606 adoption | 238,576 |
Revenue in excess of billing long term ending balance | |
Revenue in Excess of Billing - Long Term [Member] | |
Revenue in excess of billing long term beginning balance | 1,445,245 |
Effect of ASC 606 adoption | (1,445,245) |
Revenue in excess of billing long term ending balance |
Accounting Policies - Schedul_3
Accounting Policies - Schedule of New Accounting Pronouncements and Changes in Accounting Principles (Details) - USD ($) | 3 Months Ended | ||||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Jul. 02, 2018 | Jun. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | |
Cash and cash equivalents | $ 20,435,744 | $ 14,172,954 | $ 20,435,744 | $ 22,088,853 | $ 22,088,853 | $ 8,554,815 | $ 14,172,954 |
Accounts receivable, net of allowance of $610,061 and $571,511 | 7,487,381 | 12,775,461 | 12,775,461 | ||||
Accounts receivable, net - related party | 3,039,320 | 3,374,272 | 3,374,272 | ||||
Revenues in excess of billings | 13,335,529 | 6,956,966 | 14,285,778 | ||||
Revenues in excess of billings - related party | 70,250 | ||||||
Convertible note receivable - related party | 2,881,500 | 2,123,500 | 2,123,500 | ||||
Other current assets | 3,438,861 | 2,703,032 | 2,703,032 | ||||
Total current assets | 50,688,585 | 50,022,084 | 57,350,896 | ||||
Revenues in excess of billings, net - long term | 1,206,669 | ||||||
Property and equipment, net | 15,650,128 | 16,165,491 | 16,165,491 | ||||
Long term investment | 2,958,692 | 3,217,162 | 3,217,162 | ||||
Other assets | 54,936 | 70,299 | 70,299 | ||||
Intangible assets, net | 11,465,925 | 12,247,196 | 12,247,196 | ||||
Goodwill | 9,516,568 | 9,516,568 | 9,516,568 | ||||
Total assets | 90,334,834 | 91,238,800 | 99,774,281 | ||||
Accounts payable and accrued expenses | 7,153,778 | 7,873,809 | 7,873,809 | ||||
Current portion of loans and obligations under capitalized leases | 8,433,675 | 8,595,919 | 8,595,919 | ||||
Unearned revenues | 4,913,731 | 6,167,755 | 5,949,581 | ||||
Common stock to be issued | 88,324 | 88,324 | 88,324 | ||||
Total current liabilities | 20,589,508 | 22,725,807 | 22,507,633 | ||||
Loans and obligations under capitalized leases; less current maturities | 296,680 | 330,596 | 330,596 | ||||
Total liabilities | 20,886,188 | 23,056,403 | 22,838,229 | ||||
Commitments and contingencies | |||||||
Preferred stock, $.01 par value; 500,000 shares authorized; | |||||||
Common stock, $.01 par value; 14,500,000 shares authorized; 11,708,469 shares issued and 11,502,616 outstanding as of June 30, 2018 and 11,225,385 shares issued and 11,190,606 outstanding as of June 30, 2017 | 117,824 | 117,085 | 117,085 | ||||
Additional paid-in-capital | 126,918,319 | 126,479,147 | 126,479,147 | ||||
Treasury stock (At cost, 205,853 shares and 34,779 shares as of June 30, 2018 and June 30, 2017, respectively) | (1,205,024) | (1,205,024) | (1,205,024) | ||||
Accumulated deficit | (42,827,708) | (43,790,297) | (37,994,502) | ||||
Stock subscription receivable | (221,000) | (221,000) | (221,000) | ||||
Other comprehensive loss | (24,649,274) | (24,386,071) | (24,386,071) | ||||
Total NetSol stockholders' equity | 58,133,137 | 56,993,840 | 62,789,635 | ||||
Non-controlling interest | 11,315,509 | 11,188,557 | 14,146,417 | ||||
Total stockholders' equity | 69,448,646 | 68,182,397 | 76,936,052 | $ 77,287,574 | $ 78,193,553 | ||
Total liabilities and stockholders' equity | 90,334,834 | $ 91,238,800 | 99,774,281 | ||||
Total net revenues | 16,396,545 | 12,818,776 | |||||
Salaries and consultants | 5,020,562 | 5,464,160 | |||||
Travel | 1,151,997 | 513,112 | |||||
Depreciation and amortization | 937,604 | 1,173,113 | |||||
Other | 1,048,324 | 856,582 | |||||
Total cost of revenues | 8,158,487 | 8,006,967 | |||||
Gross profit | 8,238,058 | 4,811,809 | |||||
Selling and marketing | 1,701,326 | 1,711,296 | |||||
Depreciation and amortization | 212,232 | 245,873 | |||||
General and administrative | 4,406,720 | 3,787,558 | |||||
Research and development cost | 318,155 | 185,085 | |||||
Total operating expenses | 6,638,433 | 5,929,812 | |||||
Income (loss) from operations | 1,599,625 | (1,118,003) | |||||
Gain (loss) on sale of assets | 52,294 | (7,130) | |||||
Interest expense | (99,434) | (118,071) | |||||
Interest income | 248,964 | 136,911 | |||||
Gain on foreign currency exchange transactions | 10,912 | 1,016,362 | |||||
Share of net loss from equity investment | (299,691) | (67,562) | |||||
Other income (expense) | 5,379 | 1,099 | |||||
Total other income (expenses) | (81,576) | 961,609 | |||||
Net income (loss) before - income taxes | 1,518,049 | (156,394) | |||||
Income tax provision | (236,914) | (24,871) | |||||
Net income (loss) | 1,281,135 | (181,265) | |||||
Non-controlling interest | (318,546) | (188,233) | |||||
Net income (loss) attributable to NetSol | $ 962,589 | $ (369,498) | |||||
Net income (loss) per common share Basic | $ 0.08 | $ (0.03) | |||||
Net income (loss) per common share Diluted | $ 0.08 | $ (0.03) | |||||
Weighted average number of shares outstanding Basic | 11,502,616 | 11,099,113 | |||||
Weighted average number of shares outstanding Diluted | 11,507,730 | 11,099,113 | |||||
Depreciation and amortization | $ 1,149,836 | $ 1,418,986 | |||||
Share of net loss from investment under equity method | 299,691 | 67,562 | |||||
(Gain) loss on sale of assets | (52,294) | 7,130 | |||||
Stock based compensation | 432,048 | 439,308 | |||||
Accounts receivable | 5,136,381 | (903,730) | |||||
Accounts receivable - related party | 284,869 | (1,251,994) | |||||
Revenues in excess of billing | (6,347,196) | (3,230,619) | |||||
Revenues in excess of billing - related party | (70,102) | (130) | |||||
Other current assets | (571,246) | (478,390) | |||||
Accounts payable and accrued expenses | (680,147) | 231,645 | |||||
Unearned revenue | (1,202,420) | (270,743) | |||||
Net cash used in operating activities | (339,445) | (4,152,240) | |||||
Purchases of property and equipment | (563,413) | (328,163) | |||||
Sales of property and equipment | 184,032 | 116,023 | |||||
Convertible note receivable - related party | (758,000) | (500,000) | |||||
Net cash used in investing activities | (1,137,381) | (712,140) | |||||
Proceeds from the exercise of stock options and warrants | 162,385 | ||||||
Proceeds from exercise of subsidiary options | 2,650 | ||||||
Purchase of treasury stock | (500,663) | ||||||
Proceeds from bank loans | 119,895 | ||||||
Payments on capital lease obligations and loans - net | (179,237) | (148,707) | |||||
Net cash used in financing activities | (56,692) | (486,985) | |||||
Effect of exchange rate changes | (119,591) | (266,774) | |||||
Net decrease in cash and cash equivalents | (1,653,109) | (5,618,139) | |||||
Cash and cash equivalents at beginning of the period | 22,088,853 | 14,172,954 | |||||
Cash and cash equivalents at end of period | 20,435,744 | 8,554,815 | |||||
License Fees [Member] | |||||||
Total net revenues | 5,956,113 | 326,066 | |||||
Maintenance Fees [Member] | |||||||
Total net revenues | 3,638,327 | 3,473,725 | |||||
Services [Member] | |||||||
Total net revenues | 6,418,634 | 7,017,737 | |||||
License Fees - Related Party [Member] | |||||||
Total net revenues | 44,408 | ||||||
Maintenance Fees - Related Party [Member] | |||||||
Total net revenues | 101,349 | 102,963 | |||||
Services - Related Party [Member] | |||||||
Total net revenues | 282,122 | $ 1,853,877 | |||||
Adjustments [Member] | |||||||
Revenues in excess of billings | 7,458,067 | (7,328,812) | |||||
Total current assets | 7,458,067 | (7,328,812) | |||||
Revenues in excess of billings, net - long term | 1,281,652 | (1,206,669) | |||||
Total assets | 8,739,719 | (8,535,481) | |||||
Unearned revenues | (289,099) | 218,174 | |||||
Total current liabilities | (289,099) | 218,174 | |||||
Total liabilities | (289,099) | 218,174 | |||||
Preferred stock, $.01 par value; 500,000 shares authorized; | |||||||
Accumulated deficit | 5,977,953 | (5,795,795) | |||||
Total NetSol stockholders' equity | 5,977,953 | (5,795,795) | |||||
Non-controlling interest | 3,050,865 | (2,957,860) | |||||
Total stockholders' equity | 9,028,818 | (8,753,655) | |||||
Total liabilities and stockholders' equity | 8,739,719 | (8,535,481) | |||||
Total cost of revenues | |||||||
Gross profit | 146,477 | ||||||
Total operating expenses | |||||||
Income (loss) from operations | 146,477 | ||||||
Gain (loss) on sale of assets | |||||||
Interest income | 74,983 | ||||||
Gain on foreign currency exchange transactions | 53,703 | ||||||
Total other income (expenses) | 128,686 | ||||||
Net income (loss) before - income taxes | 275,163 | ||||||
Net income (loss) | 275,163 | ||||||
Non-controlling interest | (93,005) | ||||||
Net income (loss) attributable to NetSol | $ 182,158 | ||||||
Net income (loss) per common share Basic | $ 0.02 | ||||||
Net income (loss) per common share Diluted | $ 0.02 | ||||||
Weighted average number of shares outstanding Basic | 11,502,616 | ||||||
Weighted average number of shares outstanding Diluted | 11,507,730 | ||||||
Depreciation and amortization | |||||||
Share of net loss from investment under equity method | |||||||
(Gain) loss on sale of assets | |||||||
Stock based compensation | |||||||
Accounts receivable | |||||||
Accounts receivable - related party | |||||||
Revenues in excess of billing | (204,238) | ||||||
Revenues in excess of billing - related party | |||||||
Other current assets | |||||||
Accounts payable and accrued expenses | |||||||
Unearned revenue | (70,925) | ||||||
Net cash used in operating activities | |||||||
Purchases of property and equipment | |||||||
Sales of property and equipment | |||||||
Convertible note receivable - related party | |||||||
Net cash used in investing activities | |||||||
Adjustments [Member] | License Fees [Member] | |||||||
Total net revenues | |||||||
Adjustments [Member] | Maintenance Fees [Member] | |||||||
Total net revenues | 146,477 | ||||||
Adjustments [Member] | Services [Member] | |||||||
Total net revenues | |||||||
Adjustments [Member] | License Fees - Related Party [Member] | |||||||
Total net revenues | |||||||
Adjustments [Member] | Maintenance Fees - Related Party [Member] | |||||||
Total net revenues | |||||||
Adjustments [Member] | Services - Related Party [Member] | |||||||
Total net revenues | |||||||
Balances under Prior GAAP [Member] | |||||||
Cash and cash equivalents | 20,435,744 | 20,435,744 | $ 22,088,853 | ||||
Accounts receivable, net of allowance of $610,061 and $571,511 | 7,487,381 | ||||||
Accounts receivable, net - related party | 3,039,320 | ||||||
Revenues in excess of billings | 20,793,596 | ||||||
Revenues in excess of billings - related party | 70,250 | ||||||
Convertible note receivable - related party | 2,881,500 | ||||||
Other current assets | 3,438,861 | ||||||
Total current assets | 58,146,652 | ||||||
Revenues in excess of billings, net - long term | 1,281,652 | ||||||
Property and equipment, net | 15,650,128 | ||||||
Long term investment | 2,958,692 | ||||||
Other assets | 54,936 | ||||||
Intangible assets, net | 11,465,925 | ||||||
Goodwill | 9,516,568 | ||||||
Total assets | 99,074,553 | ||||||
Accounts payable and accrued expenses | 7,153,778 | ||||||
Current portion of loans and obligations under capitalized leases | 8,433,675 | ||||||
Unearned revenues | 4,624,632 | ||||||
Common stock to be issued | 88,324 | ||||||
Total current liabilities | 20,300,409 | ||||||
Loans and obligations under capitalized leases; less current maturities | 296,680 | ||||||
Total liabilities | 20,597,089 | ||||||
Preferred stock, $.01 par value; 500,000 shares authorized; | |||||||
Common stock, $.01 par value; 14,500,000 shares authorized; 11,708,469 shares issued and 11,502,616 outstanding as of June 30, 2018 and 11,225,385 shares issued and 11,190,606 outstanding as of June 30, 2017 | 117,824 | ||||||
Additional paid-in-capital | 126,918,319 | ||||||
Treasury stock (At cost, 205,853 shares and 34,779 shares as of June 30, 2018 and June 30, 2017, respectively) | (1,205,024) | ||||||
Accumulated deficit | (36,849,755) | ||||||
Stock subscription receivable | (221,000) | ||||||
Other comprehensive loss | (24,649,274) | ||||||
Total NetSol stockholders' equity | 64,111,090 | ||||||
Non-controlling interest | 14,366,374 | ||||||
Total stockholders' equity | 78,477,464 | ||||||
Total liabilities and stockholders' equity | $ 99,074,553 | ||||||
Salaries and consultants | 5,020,562 | ||||||
Travel | 1,151,997 | ||||||
Depreciation and amortization | 937,604 | ||||||
Other | 1,048,324 | ||||||
Total cost of revenues | 8,158,487 | ||||||
Gross profit | 8,384,535 | ||||||
Selling and marketing | 1,701,326 | ||||||
Depreciation and amortization | 212,232 | ||||||
General and administrative | 4,406,720 | ||||||
Research and development cost | 318,155 | ||||||
Total operating expenses | 6,638,433 | ||||||
Income (loss) from operations | 1,746,102 | ||||||
Gain (loss) on sale of assets | 52,294 | ||||||
Interest expense | (99,434) | ||||||
Interest income | 323,947 | ||||||
Gain on foreign currency exchange transactions | 64,615 | ||||||
Share of net loss from equity investment | (299,691) | ||||||
Other income (expense) | 5,379 | ||||||
Total other income (expenses) | 47,110 | ||||||
Net income (loss) before - income taxes | 1,793,212 | ||||||
Income tax provision | (236,914) | ||||||
Net income (loss) | 1,556,298 | ||||||
Non-controlling interest | (411,551) | ||||||
Net income (loss) attributable to NetSol | $ 1,144,747 | ||||||
Net income (loss) per common share Basic | $ 0.1 | ||||||
Net income (loss) per common share Diluted | $ 0.1 | ||||||
Weighted average number of shares outstanding Basic | 11,502,616 | ||||||
Weighted average number of shares outstanding Diluted | 11,507,730 | ||||||
Depreciation and amortization | $ 1,149,836 | ||||||
Share of net loss from investment under equity method | 299,691 | ||||||
(Gain) loss on sale of assets | (52,294) | ||||||
Stock based compensation | 432,048 | ||||||
Accounts receivable | 5,136,381 | ||||||
Accounts receivable - related party | 284,869 | ||||||
Revenues in excess of billing | (6,551,434) | ||||||
Revenues in excess of billing - related party | (70,102) | ||||||
Other current assets | (571,246) | ||||||
Accounts payable and accrued expenses | (680,147) | ||||||
Unearned revenue | (1,273,345) | ||||||
Net cash used in operating activities | (339,445) | ||||||
Purchases of property and equipment | (563,413) | ||||||
Sales of property and equipment | 184,032 | ||||||
Convertible note receivable - related party | (758,000) | ||||||
Net cash used in investing activities | (1,137,381) | ||||||
Proceeds from the exercise of stock options and warrants | |||||||
Proceeds from exercise of subsidiary options | 2,650 | ||||||
Purchase of treasury stock | |||||||
Proceeds from bank loans | 119,895 | ||||||
Payments on capital lease obligations and loans - net | (179,237) | ||||||
Net cash used in financing activities | (56,692) | ||||||
Effect of exchange rate changes | (119,591) | ||||||
Net decrease in cash and cash equivalents | (1,653,109) | ||||||
Cash and cash equivalents at beginning of the period | 22,088,853 | ||||||
Cash and cash equivalents at end of period | 20,435,744 | ||||||
Balances under Prior GAAP [Member] | License Fees [Member] | |||||||
Total net revenues | 5,956,113 | ||||||
Balances under Prior GAAP [Member] | Maintenance Fees [Member] | |||||||
Total net revenues | 3,784,804 | ||||||
Balances under Prior GAAP [Member] | Services [Member] | |||||||
Total net revenues | 6,418,634 | ||||||
Balances under Prior GAAP [Member] | License Fees - Related Party [Member] | |||||||
Total net revenues | |||||||
Balances under Prior GAAP [Member] | Maintenance Fees - Related Party [Member] | |||||||
Total net revenues | 101,349 | ||||||
Balances under Prior GAAP [Member] | Services - Related Party [Member] | |||||||
Total net revenues | $ 282,122 |
Accounting Policies - Schedul_4
Accounting Policies - Schedule of New Accounting Pronouncements and Changes in Accounting Principles (Details) (Parenthetical) - USD ($) | Sep. 30, 2018 | Jun. 30, 2018 |
Accounting Policies [Abstract] | ||
Accounts receivable, allowance | $ 600,833 | $ 610,061 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 14,500,000 | 14,500,000 |
Common stock, shares issued | 11,782,360 | 11,708,469 |
Common stock, shares outstanding | 11,576,507 | 11,502,616 |
Treasury stock, shares | 205,853 | 205,853 |
Revenue Recognition (Details Na
Revenue Recognition (Details Narrative) | 3 Months Ended |
Sep. 30, 2018USD ($) | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Deferred revenue, revenue recognized | $ 2,169,839 |
Contracted but unsatisfied performance obligations | 91,633,000 |
Contracted but unsatisfied performance obligations, next twelve months | $ 15,173,000 |
Estimated revenue recognized term | 6 years 2 months 30 days |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregated Revenue by Category (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Total net revenues | $ 16,396,545 | $ 12,818,776 |
Core Revenue [Member] | ||
Total net revenues | 14,846,659 | 10,525,977 |
Non-Core Revenue [Member] | ||
Total net revenues | 1,549,886 | 2,292,799 |
License Fees [Member] | ||
Total net revenues | 5,956,113 | 326,066 |
License Fees [Member] | Core Revenue [Member] | ||
Total net revenues | 5,956,113 | |
License Fees [Member] | Revenue [Member] | ||
Total net revenues | 326,066 | |
Maintenance Fees [Member] | ||
Total net revenues | 3,638,327 | 3,473,725 |
Maintenance Fees [Member] | Core Revenue [Member] | ||
Total net revenues | 3,638,327 | 3,473,725 |
Services [Member] | ||
Total net revenues | 6,418,634 | 7,017,737 |
Services [Member] | Core Revenue [Member] | ||
Total net revenues | 4,970,273 | 5,958,266 |
Services [Member] | Non-Core Revenue [Member] | ||
Total net revenues | 1,448,361 | 1,059,471 |
License Fees - Related Party [Member] | ||
Total net revenues | 44,408 | |
License Fees - Related Party [Member] | Core Revenue [Member] | ||
Total net revenues | 44,408 | |
Maintenance Fees - Related Party [Member] | ||
Total net revenues | 101,349 | 102,963 |
Maintenance Fees - Related Party [Member] | Core Revenue [Member] | ||
Total net revenues | 101,349 | 102,963 |
Services - Related Party [Member] | ||
Total net revenues | 282,122 | 1,853,877 |
Services - Related Party [Member] | Core Revenue [Member] | ||
Total net revenues | 180,597 | 620,549 |
Services - Related Party [Member] | Non-Core Revenue [Member] | ||
Total net revenues | $ 101,525 | $ 1,233,328 |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Revenues in Excess of Billings and Deferred Revenue (Details) - USD ($) | Sep. 30, 2018 | Jul. 02, 2018 |
Revenue Recognition and Deferred Revenue [Abstract] | ||
Revenues in excess of billings | $ 13,335,529 | $ 6,956,966 |
Deferred Revenue | $ 4,913,731 | $ 6,167,755 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Components of Basic and Diluted Earnings Per Share (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||
Net income available to common shareholders, Net Income | $ 962,589 | $ (369,498) |
Net income available to common shareholders, Shares | 11,502,616 | 11,099,113 |
Net income available to common shareholders, Per Share | $ 0.08 | $ (0.03) |
Effect of dilutive securities Stock options, Shares | 5,114 | |
Diluted income per share, Net Income | $ 962,589 | $ (369,498) |
Diluted income per share, Shares | 11,507,730 | 11,099,113 |
Diluted income per share, Per Share | $ 0.08 | $ (0.03) |
Earnings Per Share - Schedule_2
Earnings Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Potential dilutive shares | 53,462 | 786,588 |
Stock Options [Member] | ||
Potential dilutive shares | 53,462 | 438,360 |
Share Grants [Member] | ||
Potential dilutive shares | 348,228 |
Other Comprehensive Income an_2
Other Comprehensive Income and Foreign Currency (Details Narrative) - USD ($) | 3 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Jul. 02, 2018 | Jun. 30, 2018 | |
Other Comprehensive Income And Foreign Currency | ||||
Accumulated other comprehensive loss | $ 24,649,274 | $ 24,386,071 | $ 24,386,071 | |
Comprehensive income (loss) | $ (263,203) | $ (588,579) |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Jul. 02, 2018 | Jun. 30, 2018 | |
Accounts receivable, related parties | $ 3,039,320 | $ 3,374,272 | $ 3,374,272 | |
NetSol-Innovation [Member] | ||||
License, maintenance and services - related party | 67,286 | $ 1,131,756 | ||
Accounts receivable, related parties | 2,347,708 | 2,521,533 | ||
Investec Asset Finance [Member] | ||||
License, maintenance and services - related party | 153,340 | $ 601,192 | ||
Accounts receivable, related parties | $ 99,328 | $ 379,521 |
Major Customers (Details Narrat
Major Customers (Details Narrative) | Dec. 21, 2015USD ($) | Dec. 21, 2015EUR (€) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Jul. 02, 2018USD ($) | Jun. 30, 2018USD ($) | Sep. 04, 2017USD ($) | Sep. 04, 2017EUR (€) | Dec. 21, 2015EUR (€) |
Revenues in excess of billings | $ 13,335,529 | $ 6,956,966 | $ 14,285,778 | ||||||
Revenue in excess of billing - long term | 1,206,669 | ||||||||
Customer [Member] | Years 1-5 [Member] | |||||||||
Fixed annual payments | $ 6,802,326 | ||||||||
Customer [Member] | Years 6-10 [Member] | |||||||||
Fixed annual payments | $ 9,709,302 | ||||||||
Customer [Member] | Remaining Life of Contract [Member] | |||||||||
Fixed annual payments | $ 8,953,488 | ||||||||
Customer [Member] | Fiscal Year 2018 [Member] | |||||||||
Fixed annual payments | 8,139,535 | ||||||||
Customer [Member] | Remaining Seven Years [Member] | |||||||||
Fixed annual payments | $ 116,279 | ||||||||
EURO [Member] | Customer [Member] | Years 1-5 [Member] | |||||||||
Fixed annual payments | € | € 5,850,000 | ||||||||
EURO [Member] | Customer [Member] | Years 6-10 [Member] | |||||||||
Fixed annual payments | € | € 8,350,000 | ||||||||
EURO [Member] | Customer [Member] | Remaining Life of Contract [Member] | |||||||||
Fixed annual payments | € | € 7,700,000 | ||||||||
EURO [Member] | Customer [Member] | Fiscal Year 2018 [Member] | |||||||||
Fixed annual payments | € | 7,000,000 | ||||||||
EURO [Member] | Customer [Member] | Remaining Seven Years [Member] | |||||||||
Fixed annual payments | € | € 100,000 | ||||||||
Daimler Financial Services [Member] | |||||||||
Consisting of license | 768,558 | ||||||||
Maintenance revenue | 672,562 | 649,772 | |||||||
Services revenue | 3,275,284 | $ 3,578,164 | |||||||
Accounts receivable, gross | 2,770,519 | 4,417,709 | |||||||
Revenues in excess of billings | 5,679,855 | 12,508,815 | |||||||
Revenue in excess of billing - long term | $ 1,206,669 | ||||||||
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 | $ 82,558,140 | ||||||||
Daimler Financial Services [Member] | EURO [Member] | |||||||||
License and maintenance fees | € | € 71,000,000 | ||||||||
Daimler Financial Services [Member] | Revenue [Member] | |||||||||
Concentration risk, percentage | 28.80% | 33.00% |
Convertible Note Receivable -_2
Convertible Note Receivable - Related Party (Details Narrative) | 3 Months Ended |
Sep. 30, 2018USD ($)$ / shares | |
Convertible Note Receivable One [Member] | |
Convertible promissory note, principal amount | $ 750,000 |
Convertible debt disbursed amount | $ 750,000 |
Convertible note, interest rate | 5.00% |
Convertible note, maturity date | Feb. 1, 2018 |
Conversion price | $ / shares | $ 0.6788 |
Accrued interest | $ 44,552 |
Convertible Note Receivable One [Member] | Minimum [Member] | |
Conversion equity financing | 2,000,000 |
Convertible Note Receivable One [Member] | Maximum [Member] | |
Conversion equity financing | 2,000,000 |
Convertible Note Receivable Two [Member] | |
Convertible promissory note, principal amount | 2,500,000 |
Convertible debt disbursed amount | $ 2,131,500 |
Convertible note, interest rate | 10.00% |
Convertible note, maturity date | Mar. 31, 2019 |
Conversion price | $ / shares | $ 0.6788 |
Accrued interest | $ 68,121 |
Percentage for conversion equity securities | 70.00% |
Convertible Note Receivable Two [Member] | Minimum [Member] | |
Conversion equity financing | $ 1,000,000 |
Convertible Note Receivable Two [Member] | Maximum [Member] | |
Conversion equity financing | $ 1,000,000 |
Other Current Assets - Schedule
Other Current Assets - Schedule of Other Current Assets (Details) - USD ($) | Sep. 30, 2018 | Jul. 02, 2018 | Jun. 30, 2018 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Prepaid Expenses | $ 767,104 | $ 662,431 | |
Advance Income Tax | 930,906 | 838,799 | |
Employee Advances | 176,371 | 48,096 | |
Security Deposits | 102,490 | 85,249 | |
Other Receivables | 594,648 | 497,632 | |
Other Assets | 867,342 | 570,825 | |
Total | $ 3,438,861 | $ 2,703,032 | $ 2,703,032 |
Revenues in Excess of Billing_3
Revenues in Excess of Billings - Long Term (Details Narrative) | 3 Months Ended |
Sep. 30, 2018USD ($) | |
Accreted amount | $ 51,722 |
Minimum [Member] | |
Interest rate discount | 3.87% |
Maximum [Member] | |
Interest rate discount | 4.43% |
Revenues in Excess of Billing_4
Revenues in Excess of Billings - Long Term - Schedule of Revenues in Excess of Billings (Details) - USD ($) | Sep. 30, 2018 | Jul. 02, 2018 | Jun. 30, 2018 |
Contractors [Abstract] | |||
Revenues in excess of billing - long term | $ 1,445,245 | ||
Present value discount | (238,576) | ||
Net Balance | $ 1,206,669 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 564,128 | $ 728,659 |
Depreciation reflected in cost of revenues | $ 351,896 | $ 482,786 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Sep. 30, 2018 | Jul. 02, 2018 | Jun. 30, 2018 |
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Subtotal | $ 39,646,156 | $ 40,156,249 | |
Accumulated Depreciation | (23,996,028) | (23,990,758) | |
Property and Equipment, Net | 15,650,128 | $ 16,165,491 | 16,165,491 |
Office Furniture and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Subtotal | 3,490,984 | 3,496,653 | |
Computer Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Subtotal | 23,527,408 | 23,708,034 | |
Assets Under Capital Leases [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Subtotal | 1,524,146 | 1,479,976 | |
Building [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Subtotal | 7,882,598 | 8,005,351 | |
Land [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Subtotal | 2,055,701 | 2,088,463 | |
Autos [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Subtotal | 1,006,504 | 1,053,749 | |
Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and Equipment, Subtotal | $ 158,815 | $ 324,023 |
Property and Equipment - Summar
Property and Equipment - Summary of Fixed Assets Held Under Capital Leases (Details) - USD ($) | Sep. 30, 2018 | Jun. 30, 2018 |
Capital Leased Assets [Line Items] | ||
Fixed assets held under capital leases, Total | $ 1,524,146 | $ 1,479,976 |
Less: Accumulated Depreciation - Net | (526,498) | (477,620) |
Fixed assets held under capital leases, Net | 997,648 | 1,002,356 |
Computers and Other Equipment [Member] | ||
Capital Leased Assets [Line Items] | ||
Fixed assets held under capital leases, Total | 275,770 | 228,581 |
Furniture and Fixtures [Member] | ||
Capital Leased Assets [Line Items] | ||
Fixed assets held under capital leases, Total | 65,084 | 65,084 |
Vehicles [Member] | ||
Capital Leased Assets [Line Items] | ||
Fixed assets held under capital leases, Total | $ 1,183,292 | $ 1,186,311 |
Long Term Investment (Details N
Long Term Investment (Details Narrative) - USD ($) | Sep. 01, 2017 | Mar. 02, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 |
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: 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). | ||||
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 | ||||
Net income (loss) | $ 962,589 | $ (369,498) | |||
NetSol PK [Member] | |||||
Payments to acquire investment | $ 2,777,778 | ||||
Purchase of investment, percentage | 12.20% | ||||
Investment earned | $ 2,777,778 | ||||
NetSol PK [Member] | Minimum [Member] | |||||
Percentage of interest in subsidiary | 33.80% | ||||
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 | |||
NetSol PK [Member] | |||||
Revenue from services | $ 162,845 | 268,300 | |||
Accounts receivable | 592,284 | 473,218 | |||
Revenue in excess of billing | 70,250 | ||||
Net income (loss) | $ 299,691 | $ 67,562 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | Jul. 02, 2018 | |
Finite-lived unamortized amount | $ 11,465,925 | $ 12,247,196 | $ 12,247,196 | |
Amortization expenses of intangible assets | 27,433,421 | $ 27,140,531 | ||
Product Licenses [Member] | ||||
Finite-lived unamortized amount | $ 11,465,925 | |||
Finite-lived intangible assets, amortization over period | 5 years | |||
Amortization expenses of intangible assets | $ 585,708 | $ 690,327 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Product Licenses - Cost | $ 47,244,997 | $ 47,244,997 |
Effect of Translation Adjustment | (8,345,651) | (7,857,270) |
Accumulated Amortization | (27,433,421) | (27,140,531) |
Net Balance | $ 11,465,925 | $ 12,247,196 |
Intangible Assets - Estimated A
Intangible Assets - Estimated Amortization Expense of Intangible Assets Over Next Five Years (Details) - USD ($) | Sep. 30, 2018 | Jul. 02, 2018 | Jun. 30, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
September 30, 2018 | $ 2,351,923 | ||
September 30, 2020 | 2,351,923 | ||
September 30, 2021 | 2,351,923 | ||
September 30, 2022 | 2,351,923 | ||
September 30, 2023 | 2,058,233 | ||
Total | $ 11,465,925 | $ 12,247,196 | $ 12,247,196 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) | Sep. 30, 2018 | Jul. 02, 2018 | Jun. 30, 2018 |
Payables and Accruals [Abstract] | |||
Accounts Payable | $ 1,563,851 | $ 1,665,865 | |
Accrued Liabilities | 4,815,986 | 5,505,312 | |
Accrued Payroll & Taxes | 364,373 | 302,640 | |
Taxes Payable | 267,012 | 233,959 | |
Other Payable | 142,556 | 166,033 | |
Total | $ 7,153,778 | $ 7,873,809 | $ 7,873,809 |
Debts - Components of Notes Pay
Debts - Components of Notes Payable and Capital Leases (Details) - USD ($) | Sep. 30, 2018 | Jul. 02, 2018 | Jun. 30, 2018 | |
Total | $ 8,108,510 | $ 8,284,480 | ||
Current Maturities | 8,108,510 | 8,284,480 | ||
Long-Term Maturities | ||||
Subsidiary Capital Leases, Total | [1] | 621,845 | 642,035 | |
Subsidiary Capital Leases, Current Maturities | [1] | 325,165 | 325,165 | |
Subsidiary Capital Leases, Long-Term Maturities | [1] | 296,680 | 296,680 | |
Total | 8,730,355 | 8,926,515 | ||
Current Maturities | 8,433,675 | $ 8,595,919 | 8,595,919 | |
Long-Term Maturities | 296,680 | $ 330,596 | 330,596 | |
D&O Insurance [Member] | ||||
Total | [2] | 22,475 | 69,578 | |
Current Maturities | [2] | 22,475 | 69,578 | |
Long-Term Maturities | [2] | |||
Bank Overdraft Facility [Member] | ||||
Total | [3] | |||
Current Maturities | [3] | |||
Long-Term Maturities | [3] | |||
Loan Payable Bank - Export Refinance [Member] | ||||
Total | [4] | 4,043,018 | 4,107,451 | |
Current Maturities | [4] | 4,043,018 | 4,107,451 | |
Long-Term Maturities | [4] | |||
Loan Payable Bank - Running Finance [Member] | ||||
Total | [5] | |||
Current Maturities | [5] | |||
Long-Term Maturities | [5] | |||
Loan Payable Bank - Export Refinance II [Member] | ||||
Total | [6] | 2,830,112 | 2,875,216 | |
Current Maturities | [6] | 2,830,112 | 2,875,216 | |
Long-Term Maturities | [6] | |||
Loan Payable Bank - Running Finance II [Member] | ||||
Total | [7] | 1,212,905 | 1,232,235 | |
Current Maturities | [7] | 1,212,905 | 1,232,235 | |
Long-Term Maturities | [7] | |||
[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, 2018 and 2017. | |||
[2] | The Company finances Directors' and Officers' ("D&0") liability insurance and Errors and Omissions ("E&O") liability insurance, for which the D&O and E&O balances are renewed on an annual basis and, as such, are recorded in current maturities. The interest rate on these financings were ranging from 5.25% to 6.48% as of September 30, 2018 and June 30, 2018. | |||
[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 $389,610. The annual interest rate was 5.12% as of September 30, 2018. Total outstanding balance as of September 30, 2018 was £Nil. Interest expense for the three months ended September 30, 2018 and 2017 was $Nil and $2,054, 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, 2018, NTE was in compliance with this covenant. | |||
[4] | The Companys 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 $4,043,018 at September 30, 2018 and June 30, 2018. The interest rate for the loan was 3% at September 30, 2018 and June 30, 2018. Interest expense for the three months ended September 30, 2018 and 2017 was $30,508 and $35,898, respectively. | |||
[5] | The Companys subsidiary, NetSol PK, has a running finance facility with Askari Bank Limited, secured by NetSol PK's assets. Total facility amount is Rs. 75,000,000 or $606,453, at September 30, 2018. NetSol PK used Rs. Nil or $Nil, at September 30, 2018. The interest rate for the loan was 10.32% at September 30, 2018. | |||
[6] | The Companys 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 $2,830,112 and Rs. 350,000,000 or $2,875,216, at September 30, 2018 and June 30, 2018, respectively. The interest rate for the loan was 3% at September 30, 2018 and June 30, 2018. Interest expense for the three months ended September 30, 2018 and 2017 was $29,260 and $22,122, respectively. | |||
[7] | The Companys 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 $1,212,905 and Rs. 150,000,000 or $1,232,235, at September 30, 2018 and June 30, 2018, respectively. The interest rate for the loan was 8.43% and 8.14% at September 30, 2018 and June 30, 2018, respectively. Interest expense for the three months ended September 30, 2018 was $25,718 and $44,095, respectively. During the tenure of loan, the facilities from Samba Bank Limited require NetSol PK to maintain at a minimum a current ratio of 1:1, an interest coverage ratio of 4 times, a leverage ratio of 2 times, and a debt service coverage ratio of 4 times. As of September 30, 2018, NetSol PK was in compliance with these covenants. |
Debts - Components of Notes P_2
Debts - Components of Notes Payable and Capital Leases (Details) (Parenthetical) | 3 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2018USD ($) | Sep. 30, 2018GBP (£) | Sep. 30, 2018INR (₨) | Jun. 30, 2018INR (₨) | |
Total outstanding balance | $ 8,108,510 | $ 8,284,480 | ||||
Capital Lease Arrangements [Member] | ||||||
Lease arrangement expiration | years through 2022 | |||||
NetSol PK [Member] | ||||||
Line of credit | ||||||
HSBC Bank [Member] | NTE [Member] | ||||||
Line of credit facility, maximum borrowing capacity | $ 389,610 | |||||
Debt annual interest rate | 5.12% | |||||
Total outstanding balance | ||||||
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 | |||||
Askari Bank Limited [Member] | NetSol PK [Member] | Refinance Facility [Member] | ||||||
Interest expense | $ 30,508 | 35,898 | ||||
Line of credit | $ 4,043,018 | $ 4,043,018 | ||||
Debt instrument, interest rate | 3.00% | 3.00% | 3.00% | 3.00% | 3.00% | |
Debt maturity term description | revolving loan that matures every six months. | |||||
Askari Bank Limited [Member] | NetSol PK [Member] | Refinance Facility One [Member] | ||||||
Line of credit | $ 606,453 | |||||
Debt instrument, interest rate | 10.32% | 10.32% | 10.32% | |||
Long term debt covenant description | long term debt equity ratio of 60:40 and the current ratio of 1:1. | |||||
Askari Bank Limited [Member] | NetSol PK [Member] | INR [Member] | Refinance Facility [Member] | ||||||
Line of credit | ₨ | ₨ 500,000,000 | ₨ 500,000,000 | ||||
Askari Bank Limited [Member] | NetSol PK [Member] | INR [Member] | Refinance Facility One [Member] | ||||||
Line of credit | ₨ | ₨ 75,000,000 | |||||
Samba Bank Limited [Member] | NetSol PK [Member] | Refinance Facility [Member] | ||||||
Interest expense | $ 92,260 | 22,122 | ||||
Line of credit | $ 2,830,112 | $ 2,875,216 | ||||
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 | $ 25,718 | $ 44,095 | ||||
Line of credit | $ 1,212,905 | $ 1,232,335 | ||||
Debt instrument, interest rate | 8.43% | 8.14% | 8.43% | 8.43% | 8.14% | |
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, 2018, 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 | ₨ 350,000,000 | ||||
Samba Bank Limited [Member] | NetSol PK [Member] | INR [Member] | Running Facility [Member] | ||||||
Line of credit | ₨ | ₨ 150,000,000 | ₨ 150,000,000 | ||||
Minimum [Member] | ||||||
Debt annual interest rate | 3.87% | |||||
Maximum [Member] | ||||||
Debt annual interest rate | 4.43% | |||||
Directors' and Officers' and Errors and Omissions Liability Insurance [Member] | Minimum [Member] | ||||||
Line of credit facility interest rate | 5.25% | 6.48% | 5.25% | 5.25% | 6.48% | |
Directors' and Officers' and Errors and Omissions Liability Insurance [Member] | Maximum [Member] | ||||||
Line of credit facility interest rate | 6.48% | 5.25% | 6.48% | 6.48% | 5.25% |
Debts - Schedule of Aggregate M
Debts - Schedule of Aggregate Minimum Future Lease Payments Under Capital Leases (Details) - USD ($) | Sep. 30, 2018 | Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |||
Due FYE 9/30/19 | $ 323,855 | ||
Due FYE 9/30/20 | 255,483 | ||
Due FYE 9/30/21 | 105,029 | ||
Due FYE 9/30/22 | 470 | ||
Total Minimum Lease Payments | 684,837 | ||
Interest Expense relating to future periods | (62,992) | ||
Present Value of minimum lease payments | 621,845 | ||
Less: Current portion | [1] | $ (325,165) | (325,165) |
Non-Current portion | [1] | $ 296,680 | $ 296,680 |
[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, 2018 and 2017. |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 3 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Jul. 02, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | |
Issuance of common stock value for services rendered | $ 446,540 | $ 439,308 | |||
Stockholders' equity | 69,448,646 | $ 77,287,574 | $ 68,182,397 | $ 76,936,052 | $ 78,193,553 |
Accumulated deficit | (42,827,708) | $ (43,790,297) | (37,994,502) | ||
Adjusted [Member] | |||||
Stockholders' equity | 9,028,818 | (8,753,655) | |||
Accumulated deficit | 5,977,953 | $ (5,795,795) | |||
ASC 606 [Member] | |||||
Stockholders' equity | 8,753,655 | ||||
Accumulated deficit | 2,957,860 | ||||
ASC 606 [Member] | Adjusted [Member] | |||||
Stockholders' equity | $ 5,795,795 | ||||
Officers [Member] | |||||
Issuance of common stock shares for services rendered | 14,838 | ||||
Issuance of common stock value for services rendered | $ 91,498 | ||||
Independent Members [Member] | |||||
Issuance of common stock shares for services rendered | 13,392 | ||||
Issuance of common stock value for services rendered | $ 77,304 | ||||
Employees [Member] | Employment Agreements [Member] | |||||
Issuance of common stock shares under employment agreement | 45,661 | ||||
Issuance of common stock value under employment agreement | $ 277,738 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Changes in Stockholders' Equity (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Common Stock [Member] | ||
Balance | $ 117,085 | $ 112,254 |
Balance, shares | 11,708,469 | 11,225,385 |
Exercise of subsidiary common stock options | ||
Common stock issued for: Services | $ 739 | $ 719 |
Common stock issued for: Services, shares | 73,891 | 71,971 |
Equity component shown as current liability June 30, 2018 | ||
Equity component shown as current liability September 30, 2018 | ||
Foreign currency translation adjustment | ||
Exercise of common stock options | $ 358 | |
Exercise of common stock options, shares | 35,773 | |
Purchase of treasury shares | ||
Payment received for stock subscription | ||
Net loss for the year | ||
Balance | $ 117,824 | $ 113,331 |
Balance, shares | 11,782,360 | 11,333,129 |
Additional Paid-in Capital [Member] | ||
Balance | $ 126,479,147 | $ 124,409,998 |
Exercise of subsidiary common stock options | (6,629) | |
Common stock issued for: Services | 445,801 | 438,589 |
Equity component shown as current liability June 30, 2018 | ||
Equity component shown as current liability September 30, 2018 | ||
Foreign currency translation adjustment | ||
Exercise of common stock options | 138,442 | |
Purchase of treasury shares | ||
Payment received for stock subscription | ||
Net loss for the year | ||
Balance | 126,918,319 | 124,987,029 |
Treasury Shares [Member] | ||
Balance | (1,205,024) | (454,310) |
Exercise of subsidiary common stock options | ||
Common stock issued for: Services | ||
Equity component shown as current liability June 30, 2018 | ||
Equity component shown as current liability September 30, 2018 | ||
Foreign currency translation adjustment | ||
Exercise of common stock options | ||
Purchase of treasury shares | (500,663) | |
Payment received for stock subscription | ||
Net loss for the year | ||
Balance | (1,205,024) | (954,973) |
Accumulated Deficit [Member] | ||
Balance | (37,994,502) | (42,301,390) |
Adjustment in retained earnings on adoption of ASC 606 | (5,795,795) | |
Exercise of subsidiary common stock options | ||
Common stock issued for: Services | ||
Equity component shown as current liability June 30, 2018 | ||
Equity component shown as current liability September 30, 2018 | ||
Foreign currency translation adjustment | ||
Exercise of common stock options | ||
Purchase of treasury shares | ||
Payment received for stock subscription | ||
Net loss for the year | 962,589 | (369,498) |
Balance | (42,827,708) | (42,670,888) |
Stock Subscriptions Receivable [Member] | ||
Balance | (221,000) | (297,511) |
Exercise of subsidiary common stock options | ||
Common stock issued for: Services | ||
Equity component shown as current liability June 30, 2018 | ||
Equity component shown as current liability September 30, 2018 | ||
Foreign currency translation adjustment | ||
Exercise of common stock options | ||
Purchase of treasury shares | ||
Payment received for stock subscription | 23,585 | |
Net loss for the year | ||
Balance | (221,000) | (273,926) |
Shares to be Issued [Member] | ||
Balance | ||
Exercise of subsidiary common stock options | ||
Common stock issued for: Services | ||
Equity component shown as current liability June 30, 2018 | 88,324 | 88,324 |
Equity component shown as current liability September 30, 2018 | (88,324) | (88,324) |
Foreign currency translation adjustment | ||
Exercise of common stock options | ||
Purchase of treasury shares | ||
Payment received for stock subscription | ||
Net loss for the year | ||
Balance | ||
Other Comprehensive Loss [Member] | ||
Balance | (24,386,071) | (18,074,570) |
Exercise of subsidiary common stock options | ||
Common stock issued for: Services | ||
Equity component shown as current liability June 30, 2018 | ||
Equity component shown as current liability September 30, 2018 | ||
Foreign currency translation adjustment | (263,203) | (588,579) |
Exercise of common stock options | ||
Purchase of treasury shares | ||
Payment received for stock subscription | ||
Net loss for the year | ||
Balance | (24,649,274) | (18,663,149) |
Non Controlling Interest [Member] | ||
Balance | 14,146,417 | 14,799,082 |
Adjustment in retained earnings on adoption of ASC 606 | (2,957,860) | |
Exercise of subsidiary common stock options | 9,279 | |
Common stock issued for: Services | ||
Equity component shown as current liability June 30, 2018 | ||
Equity component shown as current liability September 30, 2018 | ||
Foreign currency translation adjustment | (200,873) | (237,165) |
Exercise of common stock options | ||
Purchase of treasury shares | ||
Payment received for stock subscription | ||
Net loss for the year | 318,546 | 188,233 |
Balance | 11,315,509 | 14,750,150 |
Balance | 76,936,052 | 78,193,553 |
Adjustment in retained earnings on adoption of ASC 606 | (8,753,655) | |
Exercise of subsidiary common stock options | 2,650 | |
Common stock issued for: Services | 446,540 | 439,308 |
Equity component shown as current liability June 30, 2018 | 88,324 | 88,324 |
Equity component shown as current liability September 30, 2018 | (88,324) | (88,324) |
Foreign currency translation adjustment | $ (464,076) | (825,744) |
Exercise of common stock options | 138,800 | |
Exercise of common stock options, shares | ||
Purchase of treasury shares | (500,663) | |
Payment received for stock subscription | 23,585 | |
Net loss for the year | $ 1,281,135 | (181,265) |
Balance | $ 69,448,646 | $ 77,287,574 |
Incentive and Non-Statutory S_3
Incentive and Non-Statutory Stock Option Plan (Details Narrative) - USD ($) | 3 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Compensation expense | $ 432,048 | $ 439,308 | |
Compensation expense related to unvested options yet to be recognized | $ 931,215 |
Incentive and Non-Statutory S_4
Incentive and Non-Statutory Stock Option Plan - Components of Common Stock Purchase Options (Details) | 3 Months Ended |
Sep. 30, 2018USD ($)$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Number of shares, Outstanding and Exercisable Beginning | shares | 53,462 |
Number of shares, Granted | shares | |
Number of shares, Exercised | shares | |
Number of shares, Expired / Cancelled | shares | |
Number of shares, Outstanding and Exercisable Ending | shares | 53,462 |
Weighted Average Exercise Price, Outstanding and Exercisable Beginning | $ / shares | $ 6.50 |
Weighted Average Exercise Price, Granted | $ / shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price, Expired / Cancelled | $ / shares | |
Weighted Average Exercise Price, Outstanding and Exercisable Ending | $ / shares | $ 6.50 |
Weighted Average Remaining Contractual Life, Outstanding and Exercisable | 7 months 10 days |
Weighted Average Remaining Contractual Life, Outstanding and Exercisable Ending | 4 months 9 days |
Aggregated Intrinsic Value, Outstanding and Exercisable Beginning | $ | |
Aggregated Intrinsic Value, Outstanding and Exercisable Ending | $ | $ 5,346 |
Incentive and Non-Statutory S_5
Incentive and Non-Statutory Stock Option Plan - Schedule of Stock Options Outstanding and Exercisable (Details) - $ / shares | 3 Months Ended | |
Sep. 30, 2018 | Jun. 30, 2018 | |
Number Outstanding and Exercisable, shares | 53,462 | 53,462 |
Options [Member] | ||
Exercise Price | $ 6.50 | |
Number Outstanding and Exercisable, shares | 53,462 | |
Weighted Average Remaining Contractual Life | 4 months 9 days | |
Weighted Ave Exercise Price | $ 6.50 | |
Price Range One [Member] | Options [Member] | ||
Exercise Price | $ 6.50 | |
Number Outstanding and Exercisable, shares | 53,462 | |
Weighted Average Remaining Contractual Life | 4 months 9 days | |
Weighted Ave Exercise Price | $ 6.50 |
Incentive and Non-Statutory S_6
Incentive and Non-Statutory Stock Option Plan - Summary of Unvested Stock Grants Awarded as Compensation (Details) | 3 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Number of shares, Unvested beginning balance | shares | 155,648 |
Number of shares, Granted | shares | 92,276 |
Number of shares, Vested | shares | (73,891) |
Number of shares, Unvested ending balance | shares | 174,033 |
Weighted Average Grant Date Fair Value, Unvested beginning balance | $ / shares | $ 6.07 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 5.55 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 6.04 |
Weighted Average Grant Date Fair Value, Unvested ending balance | $ / shares | $ 5.88 |
Operating Segments (Details Nar
Operating Segments (Details Narrative) | 3 Months Ended |
Sep. 30, 2018Segment | |
Segment Reporting [Abstract] | |
Number of Operating Segments | 3 |
Operating Segments - Summary of
Operating Segments - Summary of Identifiable Assets (Details) - USD ($) | Sep. 30, 2018 | Jul. 02, 2018 | Jun. 30, 2018 |
Identifiable Assets | $ 90,334,834 | $ 91,238,800 | $ 99,774,281 |
Corporate Headquarters [Member] | |||
Identifiable Assets | 2,708,696 | 2,839,049 | |
North America [Member] | |||
Identifiable Assets | 5,375,504 | 5,764,042 | |
Europe [Member] | |||
Identifiable Assets | 7,257,811 | 7,242,080 | |
Asia - Pacific [Member] | |||
Identifiable Assets | $ 74,992,823 | $ 83,929,110 |
Operating Segments - Summary _2
Operating Segments - Summary of Investment Under Equity Method (Details) - USD ($) | Sep. 30, 2018 | Jun. 30, 2018 |
Equity method investments | $ 2,958,692 | $ 3,217,162 |
Corporate Headquarters [Member] | ||
Equity method investments | 844,563 | 918,628 |
Asia - Pacific [Member] | ||
Equity method investments | $ 2,114,129 | $ 2,298,534 |
Operating Segments - Summary _3
Operating Segments - Summary of Operating Information (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues | $ 16,396,545 | $ 12,818,776 |
Net income (loss) after taxes and before non-controlling interest | 1,281,135 | (181,265) |
Intercompany Revenue [Member] | ||
Revenues | 3,331,039 | 479,412 |
North America [Member] | ||
Net income (loss) after taxes and before non-controlling interest | (178,630) | (295,646) |
Europe [Member] | ||
Net income (loss) after taxes and before non-controlling interest | 174,088 | 99,390 |
Europe [Member] | Intercompany Revenue [Member] | ||
Revenues | 138,653 | 102,475 |
Asia - Pacific [Member] | ||
Net income (loss) after taxes and before non-controlling interest | 2,504,064 | 1,052,915 |
Asia - Pacific [Member] | Intercompany Revenue [Member] | ||
Revenues | 3,192,386 | 376,937 |
Corporate Headquarters [Member] | ||
Net income (loss) after taxes and before non-controlling interest | (1,218,387) | (1,037,924) |
Unaffiliated Customers [Member] | ||
Revenues | 16,013,074 | 10,817,528 |
Unaffiliated Customers [Member] | North America [Member] | ||
Revenues | 843,085 | 848,072 |
Unaffiliated Customers [Member] | Europe [Member] | ||
Revenues | 1,766,594 | 1,447,824 |
Unaffiliated Customers [Member] | Asia - Pacific [Member] | ||
Revenues | 13,403,395 | 8,521,632 |
Affiliated Customers [Member] | ||
Revenues | 383,471 | 2,001,248 |
Affiliated Customers [Member] | Europe [Member] | ||
Revenues | 153,340 | 601,192 |
Affiliated Customers [Member] | Asia - Pacific [Member] | ||
Revenues | $ 230,131 | $ 1,400,056 |
Operating Segments - Summary _4
Operating Segments - Summary of Capital Expenditures (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Capital expenditures | $ 563,413 | $ 328,163 |
North America [Member] | ||
Capital expenditures | ||
Europe [Member] | ||
Capital expenditures | 98,444 | 76,809 |
Asia - Pacific [Member] | ||
Capital expenditures | $ 464,969 | $ 251,354 |
Non-Controlling Interest in S_3
Non-Controlling Interest in Subsidiary (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Exercise of common stock options, shares | ||
Stock option exercising stock cash | $ 138,800 | |
NetSol PK [Member] | ||
Exercise of common stock options, shares | 20,000 | |
Stock option exercising stock cash | $ 2,650 | |
NetSol PK [Member] | Maximum [Member] | ||
Non-controlling interest, percentage | 33.79% | |
NetSol PK [Member] | Minimum [Member] | ||
Non-controlling interest, percentage | 33.80% |
Non-Controlling Interest in S_4
Non-Controlling Interest in Subsidiary - Balance of Non-Controlling Interest (Details) - USD ($) | Sep. 30, 2018 | Jul. 02, 2018 | Jun. 30, 2018 |
Non-Controlling Interest | $ 11,315,509 | $ 11,188,557 | $ 14,146,417 |
NetSol PK [Member] | |||
Non-Controlling Interest, Percentage | 33.80% | 33.79% | |
Non-Controlling Interest | $ 9,044,439 | $ 11,873,029 | |
NetSol-Innovation [Member] | |||
Non-Controlling Interest, Percentage | 49.90% | 49.90% | |
Non-Controlling Interest | $ 1,604,345 | $ 1,699,661 | |
VLS, VLSH & VLSIL Combined [Member] | |||
Non-Controlling Interest, Percentage | 49.00% | ||
Non-Controlling Interest | $ 666,733 | ||
NetSol Thai [Member] | |||
Non-Controlling Interest, Percentage | 0.006% | 0.006% | |
Non-Controlling Interest | $ (8) | $ (15) | |
VLS, VLHS & VLSIL Combined [Member] | |||
Non-Controlling Interest, Percentage | 49.00% | ||
Non-Controlling Interest | $ 573,742 |