Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 31, 2020 | Feb. 09, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | NETSOL TECHNOLOGIES INC | |
Entity Central Index Key | 0001039280 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 11,360,519 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 32,003,647 | $ 20,166,830 |
Accounts receivable, net of allowance of $308,236 and $435,611 | 5,213,604 | 10,131,752 |
Accounts receivable - related party, net of allowance of $1,373,099 and $90,594 | 1,282,505 | |
Revenues in excess of billings, net of allowance of $153,650 and $188,914 | 13,290,010 | 17,198,281 |
Revenues in excess of billings - related party, net of allowance of $8,163 and $0 | 8,163 | |
Other current assets, net of allowance of $1,243,633 and $0 | 2,395,985 | 3,108,180 |
Total current assets | 52,903,246 | 51,895,711 |
Revenues in excess of billings, net - long term | 356,059 | 1,300,289 |
Convertible note receivable - related party, net of allowance of $4,250,000 and $0 | 4,250,000 | |
Property and equipment, net | 12,209,500 | 11,329,631 |
Right of use of assets - operating leases | 1,937,907 | 2,360,129 |
Long term investment | 3,734,907 | 2,387,692 |
Other assets | 47,190 | 41,992 |
Intangible assets, net | 4,753,543 | 5,391,077 |
Goodwill | 9,516,568 | 9,516,568 |
Total assets | 85,458,920 | 88,473,089 |
Current liabilities: | ||
Accounts payable and accrued expenses | 6,327,192 | 5,680,837 |
Current portion of loans and obligations under finance leases | 10,383,572 | 9,139,561 |
Current portion of operating lease obligations | 1,169,960 | 1,111,912 |
Unearned revenues | 3,753,781 | 4,095,472 |
Common stock to be issued | 88,324 | 88,324 |
Total current liabilities | 21,722,829 | 20,116,106 |
Loans and obligations under finance leases; less current maturities | 1,554,317 | 1,539,975 |
Operating lease obligations; less current maturities | 962,724 | 1,339,965 |
Total liabilities | 24,239,870 | 22,996,046 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $.01 par value; 500,000 shares authorized; | ||
Common stock, $.01 par value; 14,500,000 shares authorized; 12,147,458 shares issued and 11,452,959 outstanding as of December 31, 2020 and 12,122,149 shares issued and 11,874,646 outstanding as of June 30, 2020 | 121,476 | 121,222 |
Additional paid-in-capital | 128,823,181 | 128,677,754 |
Treasury stock (at cost, 694,499 shares and 247,503 shares as of December 31, 2020 and June 30, 2020, respectively) | (2,848,640) | (1,455,969) |
Accumulated deficit | (40,104,089) | (34,269,817) |
Other comprehensive loss | (32,060,151) | (34,085,047) |
Total NetSol stockholders' equity | 53,931,777 | 58,988,143 |
Non-controlling interest | 7,287,273 | 6,488,900 |
Total stockholders' equity | 61,219,050 | 65,477,043 |
Total liabilities and stockholders' equity | $ 85,458,920 | $ 88,473,089 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 308,236 | $ 435,611 |
Accounts receivable related party, allowance | 1,373,099 | 90,594 |
Revenues in excess of billings, allowance | 153,650 | 188,914 |
Revenue in excess of billings - related party allowances | 8,163 | 0 |
Other current assets allowances | 1,243,633 | 0 |
Convertible note receivable related party allowances | $ 4,250,000 | $ 0 |
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 | 12,147,458 | 12,122,149 |
Common stock, shares outstanding | 11,452,959 | 11,874,646 |
Treasury stock, shares | 694,499 | 247,503 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net Revenues: | ||||
Total net revenues | $ 13,121,460 | $ 15,690,019 | $ 25,768,838 | $ 29,262,435 |
Cost of revenues: | ||||
Salaries and consultants | 5,294,662 | 4,625,872 | 9,821,311 | 9,080,836 |
Travel | 159,174 | 1,572,923 | 262,926 | 2,915,558 |
Depreciation and amortization | 713,749 | 734,352 | 1,420,998 | 1,454,017 |
Other | 911,566 | 954,912 | 1,839,719 | 1,899,436 |
Total cost of revenues | 7,079,151 | 7,888,059 | 13,344,954 | 15,349,847 |
Gross profit | 6,042,309 | 7,801,960 | 12,423,884 | 13,912,588 |
Operating expenses: | ||||
Selling and marketing | 1,558,027 | 1,858,096 | 3,167,631 | 3,601,964 |
Depreciation and amortization | 221,572 | 215,479 | 443,362 | 417,866 |
General and administrative | 4,065,788 | 4,568,790 | 7,493,424 | 8,487,403 |
Research and development cost | 110,419 | 454,605 | 196,408 | 1,127,575 |
Total operating expenses | 5,955,806 | 7,096,970 | 11,300,825 | 13,634,808 |
Income from operations | 86,503 | 704,990 | 1,123,059 | 277,780 |
Other income and (expenses) | ||||
Gain (loss) on sale of assets | (52,531) | 528 | (74,273) | 239 |
Interest expense | (94,241) | (88,006) | (197,568) | (151,669) |
Interest income | 210,854 | 435,682 | 411,675 | 834,911 |
Gain (loss) on foreign currency exchange transactions | 13,981 | 61,061 | 310,022 | (1,699,129) |
Share of net loss from equity investment | (43,685) | (164,796) | (151,535) | (354,020) |
Other income | 45,365 | 207,987 | 132,637 | 226,313 |
Total other income (expenses) | 79,743 | 452,456 | 430,958 | (1,143,355) |
Net income (loss) before income taxes | 166,246 | 1,157,446 | 1,554,017 | (865,575) |
Income tax provision | (245,434) | (610,510) | (509,728) | (848,748) |
Net income (loss) | (79,188) | 546,936 | 1,044,289 | (1,714,323) |
Non-controlling interest | (162,916) | 39,039 | (568,839) | 472,351 |
Net income (loss) attributable to NetSol | $ (242,104) | $ 585,975 | $ 475,450 | $ (1,241,972) |
Net income (loss) per share: | ||||
Net income per common share - Basic | $ (0.02) | $ 0.05 | $ 0.04 | $ (0.11) |
Net income per common share - Diluted | $ (0.02) | $ 0.05 | $ 0.04 | $ (0.11) |
Weighted average number of shares outstanding | ||||
Basic | 11,580,030 | 11,724,606 | 11,683,631 | 11,694,423 |
Diluted | 11,580,030 | 11,724,606 | 11,683,631 | 11,694,423 |
License Fees [Member] | ||||
Net Revenues: | ||||
Total net revenues | $ 2,586,504 | $ 176,706 | $ 2,589,979 | $ 2,640,922 |
Subscription and Support [Member] | ||||
Net Revenues: | ||||
Total net revenues | 5,724,802 | 5,104,736 | 10,896,665 | 9,711,112 |
Services [Member] | ||||
Net Revenues: | ||||
Total net revenues | 4,810,154 | 10,351,153 | 12,282,194 | 16,770,044 |
Services - Related Party [Member] | ||||
Net Revenues: | ||||
Total net revenues | $ 57,424 | $ 140,357 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (242,104) | $ 585,975 | $ 475,450 | $ (1,241,972) |
Other comprehensive income (loss): | ||||
Translation adjustment | 1,633,906 | 2,009,060 | 2,728,630 | 3,496,761 |
Translation adjustment attributable to non-controlling interest | (483,826) | (244,031) | (703,734) | (828,387) |
Net translation adjustment | 1,150,080 | 1,765,029 | 2,024,896 | 2,668,374 |
Comprehensive income (loss) attributable to NetSol | $ 907,976 | $ 2,351,004 | $ 2,500,346 | $ 1,426,402 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Shares [Member] | Accumulated Deficit [Member] | Other Comprehensive Loss [Member] | Non Controlling Interest [Member] | Total | |||
Balance at Jun. 30, 2019 | $ 119,117 | $ 127,737,999 | $ (1,455,969) | $ (35,206,898) | $ (33,125,006) | $ 8,414,987 | $ 66,484,230 | |||
Balance, shares at Jun. 30, 2019 | 11,911,742 | |||||||||
Exercise of subsidiary common stock options | (28,097) | 39,718 | 11,621 | |||||||
Common stock issued for: Services | $ 604 | 342,177 | 342,781 | |||||||
Common stock issued for: Services, shares | 60,367 | |||||||||
Foreign currency translation adjustment | 903,345 | 584,356 | 1,487,701 | |||||||
Net income (loss) for the period | (1,827,947) | (433,312) | (2,261,259) | |||||||
Balance at Sep. 30, 2019 | $ 119,721 | 128,052,079 | (1,455,969) | (37,034,845) | (32,221,661) | 8,605,749 | 66,065,074 | |||
Balance, shares at Sep. 30, 2019 | 11,972,109 | |||||||||
Balance at Jun. 30, 2019 | $ 119,117 | 127,737,999 | (1,455,969) | (35,206,898) | (33,125,006) | 8,414,987 | 66,484,230 | |||
Balance, shares at Jun. 30, 2019 | 11,911,742 | |||||||||
Foreign currency translation adjustment | 3,496,761 | |||||||||
Net income (loss) for the period | (1,714,323) | |||||||||
Balance at Dec. 31, 2019 | $ 120,006 | 128,197,589 | (1,455,969) | (36,448,870) | (30,456,632) | 6,890,123 | 66,846,247 | |||
Balance, shares at Dec. 31, 2019 | 12,000,566 | |||||||||
Balance at Sep. 30, 2019 | $ 119,721 | 128,052,079 | (1,455,969) | (37,034,845) | (32,221,661) | 8,605,749 | 66,065,074 | |||
Balance, shares at Sep. 30, 2019 | 11,972,109 | |||||||||
Common stock issued for: Services | $ 285 | 145,510 | 145,795 | |||||||
Common stock issued for: Services, shares | 28,457 | |||||||||
Dividend to non-controlling interest | (1,920,618) | (1,920,618) | ||||||||
Foreign currency translation adjustment | 1,765,029 | 244,031 | 2,009,060 | |||||||
Net income (loss) for the period | 585,975 | (39,039) | 546,936 | |||||||
Balance at Dec. 31, 2019 | $ 120,006 | 128,197,589 | (1,455,969) | (36,448,870) | (30,456,632) | 6,890,123 | 66,846,247 | |||
Balance, shares at Dec. 31, 2019 | 12,000,566 | |||||||||
Balance at Jun. 30, 2020 | $ 121,222 | 128,677,754 | (1,455,969) | (34,269,817) | (34,085,047) | 6,488,900 | 65,477,043 | |||
Balance, shares at Jun. 30, 2020 | 12,122,149 | |||||||||
Cumulative effect adjustment | (6,309,722) | [1] | (474,578) | [1] | (6,784,300) | [1] | ||||
Subsidiary common stock issued for: Services | 378 | 378 | ||||||||
Common stock issued for: Services | $ 149 | 86,864 | 87,013 | |||||||
Common stock issued for: Services, shares | 14,896 | |||||||||
Purchase of treasury shares | (464,676) | (464,676) | ||||||||
Foreign currency translation adjustment | 874,816 | 219,908 | 1,094,724 | |||||||
Net income (loss) for the period | 717,554 | 405,923 | 1,123,477 | |||||||
Balance at Sep. 30, 2020 | $ 121,371 | 128,764,618 | (1,920,645) | (39,861,985) | (33,210,231) | 6,640,531 | 60,533,659 | |||
Balance, shares at Sep. 30, 2020 | 12,137,045 | |||||||||
Balance at Jun. 30, 2020 | $ 121,222 | 128,677,754 | (1,455,969) | (34,269,817) | (34,085,047) | 6,488,900 | 65,477,043 | |||
Balance, shares at Jun. 30, 2020 | 12,122,149 | |||||||||
Foreign currency translation adjustment | 2,728,630 | |||||||||
Net income (loss) for the period | 1,044,289 | |||||||||
Balance at Dec. 31, 2020 | $ 121,476 | 128,823,181 | (2,848,640) | (40,104,089) | (32,060,151) | 7,287,273 | 61,219,050 | |||
Balance, shares at Dec. 31, 2020 | 12,147,458 | |||||||||
Balance at Sep. 30, 2020 | $ 121,371 | 128,764,618 | (1,920,645) | (39,861,985) | (33,210,231) | 6,640,531 | 60,533,659 | |||
Balance, shares at Sep. 30, 2020 | 12,137,045 | |||||||||
Common stock issued for: Services | $ 105 | 58,563 | 58,668 | |||||||
Common stock issued for: Services, shares | 10,413 | |||||||||
Purchase of treasury shares | (927,995) | (927,995) | ||||||||
Foreign currency translation adjustment | 1,150,080 | 483,826 | 1,633,906 | |||||||
Net income (loss) for the period | (242,104) | 162,916 | (79,188) | |||||||
Balance at Dec. 31, 2020 | $ 121,476 | $ 128,823,181 | $ (2,848,640) | $ (40,104,089) | $ (32,060,151) | $ 7,287,273 | $ 61,219,050 | |||
Balance, shares at Dec. 31, 2020 | 12,147,458 | |||||||||
[1] | Cumulative effect adjustment relates to the adoption of Accounting Standard Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Refer to Note 2 - Accounting Policies for more information. |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 1,044,289 | $ (1,714,323) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 1,864,360 | 1,871,883 |
Provision for bad debts | (175,575) | (20,699) |
Share of net loss from investment under equity method | 151,535 | 354,020 |
Loss on sale of assets | 74,273 | (239) |
Stock based compensation | 165,164 | 328,585 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 5,479,516 | 4,554,558 |
Accounts receivable - related party | 2,229,695 | |
Revenues in excess of billing | 4,540,271 | (1,088,693) |
Revenues in excess of billing - related party | 14,823 | |
Other current assets | (252,781) | (208,065) |
Accounts payable and accrued expenses | 313,869 | 490,875 |
Unearned revenue | (554,077) | (3,019,493) |
Net cash provided by operating activities | 12,650,844 | 3,792,927 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (1,249,895) | (785,999) |
Sales of property and equipment | 123,194 | 32,524 |
Convertible note receivable - related party | (535,000) | |
Investment in associates | (93,000) | |
Net cash used in investing activities | (1,219,701) | (1,288,475) |
Cash flows from financing activities: | ||
Proceeds from exercise of subsidiary options | 11,621 | |
Purchase of treasury stock | (1,392,671) | |
Dividend paid by subsidiary to non-controlling interest | (1,920,618) | |
Proceeds from bank loans | 705,338 | 2,074,341 |
Payments on finance lease obligations and loans - net | (175,352) | (102,499) |
Net cash provided by (used in) financing activities | (862,685) | 62,845 |
Effect of exchange rate changes | 1,268,359 | 2,149,923 |
Net increase in cash and cash equivalents | 11,836,817 | 4,717,220 |
Cash and cash equivalents at beginning of the period | 20,166,830 | 17,366,364 |
Cash and cash equivalents at end of period | 32,003,647 | 22,083,584 |
SUPPLEMENTAL DISCLOSURES: | ||
Interest | 219,412 | 149,210 |
Taxes | 366,695 | 805,709 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Assets acquired under finance lease | 222,391 | |
Provided services for investment in Drivemate | 1,300,000 | |
Assets recognized under operating lease | $ 3,571,947 |
Basis of Presentation and Princ
Basis of Presentation and Principles of Consolidation | 6 Months Ended |
Dec. 31, 2020 | |
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, 2020. 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 consolidated financial statements include the accounts of the Company as follows: Wholly owned Subsidiaries NetSol Technologies Americas, Inc. (“NTA”) NetSol Connect (Private), Ltd. (“Connect”) NetSol Technologies Australia Pty Ltd. (“Australia”) NetSol Technologies Europe Limited (“NTE”) NTPK (Thailand) Co. Limited (“NTPK Thailand”) NetSol Technologies (Beijing) Co. Ltd. (“NetSol Beijing”) Ascent Europe Ltd. (“AEL”) Virtual Lease Services Holdings Limited (“VLSH”) Virtual Lease Services Limited (“VLS”) Virtual Lease Services (Ireland) Limited (“VLSIL”) Majority-owned Subsidiaries NetSol Technologies, Ltd. (“NetSol PK”) NetSol Innovation (Private) Limited (“NetSol Innovation”) NetSol Technologies Thailand Limited (“NetSol Thai”) OTOZ, Inc. (“OTOZ”) OTOZ (Thailand) Limited (“OTOZ Thai”) For comparative purposes, prior year’s condensed consolidated financial statements have been reclassified to conform to report classifications of the current period. Below is the table of reclassified amounts: For the Three Months Ended For the Six Months ended December 31, 2019 December 31, 2019 Originally reported Reclassified Originally reported Reclassified REVENUES License fees $ 383,963 $ 176,706 $ 3,063,108 $ 2,640,922 Subscription and support 4,965,877 5,104,736 9,357,324 9,711,112 Services 10,282,755 10,351,153 16,701,646 16,770,044 Services - related party 57,424 57,424 140,357 140,357 Total net revenues $ 15,690,019 $ 15,690,019 $ 29,262,435 $ 29,262,435 |
Accounting Policies
Accounting Policies | 6 Months Ended |
Dec. 31, 2020 | |
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, assumptions used to determine the net present value of operating lease liabilities, 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 except balances maintained in China are insured for RMB 500,000 ($76,570) in each bank and in UK for GBP 85,000 ($116,438) in each bank. The Company maintains two bank accounts in China and six bank accounts in the UK. As of December 31, 2020, and June 30, 2020, the Company had uninsured deposits related to cash deposits in accounts maintained within foreign entities of approximately $28,954,360 and $18,210,378, 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 Accounting Standards Codification (“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’s financial assets that were measured at fair value on a recurring basis as of December 31, 2020, were as follows: Level 1 Level 2 Level 3 Total Assets Revenues in excess of billings - long term $ - $ - $ 356,059 $ 356,059 Total $ - $ - $ 356,059 $ 356,059 The Company’s financial assets that were measured at fair value on a recurring basis as of June 30, 2020, were as follows: Level 1 Level 2 Level 3 Total Assets Revenues in excess of billing - long term $ - $ - $ 1,300,289 $ 1,300,289 Total $ - $ - $ 1,300,289 $ 1,300,289 The reconciliation from June 30, 2020 to December 31, 2020 is as follows: Revenues in excess of billings - long term Fair value discount Total Balance at June 30, 2020 $ 1,341,575 $ (41,286 ) $ 1,300,289 Additions 376,874 (20,815 ) 356,059 Amortization during the period - 41,286 41,286 Transfers to short term (1,341,575 ) - (1,341,575 ) Balance at December 31, 2020 $ 376,874 $ (20,815 ) $ 356,059 Management analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity” “Derivatives and Hedging.” Recent Accounting Standards Adopted by the Company: In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-04, Simplifying the Test for Goodwill Impairment In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments The Company adopted the standard on July 1, 2020 using the modified retrospective approach. The adoption of ASU 2016-13 resulted in changes to the Company’s accounting policies for trade and other receivables, contract assets and convertible notes receivable. Based on the results of the Company’s evaluation, the adoption of ASU 2016-13 resulted in a one-time cumulative-effect adjustment through retained earnings of $6,784,300 to increase its allowance for credit losses related to the convertible notes receivable, interest receivable, accounts receivable, revenues in excess of billings, and other receivables. The following table presents the impact of adopting ASC Topic 326 as of July 1, 2020: Adjustment to Adopt Asset Classification ASC Topic 326 Allowance for credit losses - accounts receivable $ 109,486 Allowance for credit losses - accounts receivable - related party 1,282,505 Allowance for credit losses - revenue in excess of billings - related party 8,163 Allowance for credit losses - convertible notes receivable - related party 4,250,000 Allowance for credit losses - other current assets 1,134,146 $ 6,784,300 Accounts receivable includes trade accounts receivables from the Company’s customers, net of an allowance for credit risk. Accounts receivable are recorded at the invoiced amount and do not bear interest. In establishing the required allowance, management regularly reviews the composition of accounts receivable and analyzes customer credit worthiness, customer concentrations, current economic trends and changes in customer payment patterns. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Revenue in excess of billings, relates to services performed which were not billed, net of an allowance for credit risk. As customers are billed under the terms of the contract, the corresponding amount is transferred to accounts receivable. In establishing the required allowance, management regularly reviews the composition of and analyzes customer credit worthiness, customer concentrations, current economic trends, changes in customer payment patterns, the project status and assesses individual unbilled contract assets over a specific aging and amount. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The convertible notes receivable represents loans provided to WRLD3D. The allowance for credit risk for the convertible notes is established based on various quantitative and qualitative factors including customer credit worthiness, current economic trends and changes in payment patterns. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Dec. 31, 2020 | |
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) subscription and support, which includes subscription revenue and post contract customer 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. 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. Subscription and Support Subscription Revenue from subscriptions 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. Support Revenue from support services and product updates, referred to as post contract customer support 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 For the Six Months Ended December 31, Ended December 31, 2020 2019 2020 2019 Core: License $ 2,586,504 $ 176,706 $ 2,589,979 $ 2,640,922 Subscription and support 5,724,802 5,104,736 10,896,665 9,711,112 Services 3,191,375 8,627,927 9,064,313 13,254,196 Services - related party - 57,424 - 140,357 Total core revenue, net 11,502,681 13,966,793 22,550,957 25,746,587 Non-Core: Services 1,618,779 1,723,226 3,217,881 3,515,848 Total non-core revenue, net 1,618,779 1,723,226 3,217,881 3,515,848 Total net revenue $ 13,121,460 $ 15,690,019 $ 25,768,838 $ 29,262,435 Significant Judgments 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 post contract customer support 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. Revenue is recognized over time for the Company’s subscription, post contract customer support 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 Revenues in excess of billings $ 13,646,069 $ 18,506,733 Deferred Revenue $ 3,753,781 $ 4,095,472 During the three and six months ended December 31, 2020, the Company recognized revenue of $762,484 and $3,790,120, respectively, that was included in the deferred revenue balance 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 $48,262,490 as of December 31, 2020, of which the Company estimates to recognize approximately $12,922,159 in revenue over the next 12 months and the remainder over an estimated 5 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 applied by the Company: ● 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). 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 | 6 Months Ended |
Dec. 31, 2020 | |
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 December 31, 2020 For the six months ended December 31, 2020 Net Loss Shares Per Share Net Income Shares Per Share Basic income (loss) per share: Net income (loss) available to common shareholders $ (242,104 ) 11,580,030 $ (0.02 ) $ 475,450 11,683,631 $ 0.04 Effect of dilutive securities Share grants - - - - - - Diluted income (loss) per share $ (242,104 ) 11,580,030 $ (0.02 ) $ 475,450 11,683,631 $ 0.04 For the three months ended December 31, 2019 For the six months ended December 31, 2019 Net Income Shares Per Share Net Loss Shares Per Share Basic income (loss) per share: Net income (loss) available to common shareholders $ 585,975 11,724,606 $ 0.05 $ (1,241,972 ) 11,694,423 $ (0.11 ) Effect of dilutive securities Share grants - - - - - - Diluted income (loss) per share $ 585,975 11,724,606 $ 0.05 $ (1,241,972 ) 11,694,423 $ (0.11 ) 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 For the Six Months Ended December 31, Ended December 31, 2020 2019 2020 2019 Stock Options - 40,386 - 40,386 Share Grants 41,112 119,921 41,112 119,921 41,112 160,307 41,112 160,307 |
Other Comprehensive Income and
Other Comprehensive Income and Foreign Currency | 6 Months Ended |
Dec. 31, 2020 | |
VLSVLHS And VLSIL Combined [Member] | |
Other Comprehensive Income and Foreign Currency | NOTE 5 – OTHER COMPREHENSIVE INCOME AND FOREIGN CURRENCY The accounts of NTE, AEL, VLSH and VLS use the British Pound; VLSIL uses 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 $32,060,151 and $34,085,047 as of December 31, 2020 and June 30, 2020, respectively. During the three and six months ended December 31, 2020, comprehensive income (loss) in the consolidated statements of comprehensive income (loss) included a translation gain attributable to NetSol of $1,150,080 and $2,024,896, respectively. During the three and six months ended December 31, 2019, comprehensive income (loss) in the consolidated statements of comprehensive income (loss) included a translation gain attributable to NetSol of $1,765,029 and $2,668,374, respectively. |
Major Customers
Major Customers | 6 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Major Customers | NOTE 6 – MAJOR CUSTOMERS During the six months ended December 31, 2020, revenues from Daimler Financial Services (“DFS”) and BMW Financial (“BMW”) were $5,402,152 and $3,051,244, respectively representing 21.0% and 11.8%, respectively of revenues. During the six months ended December 31, 2019 revenues from these two customers were $8,691,233 and $4,793,304 representing 29.7% and 16.4% of revenues. The revenue from these customers are shown in the Asia – Pacific segment. Accounts receivable from DFS and BMW at December 31, 2020, were $1,263,670 and $22,697, respectively. Accounts receivable at June 30, 2020, were $4,821,468 and $474,271, respectively. Revenues in excess of billings at December 31, 2020 were $6,800,273 and $1,084,396 for DFS and BMW, respectively. Revenues in excess of billings at June 30, 2020, were $5,709,226 and $6,977,375 for DFS and BMW, respectively. Included in this amount was $Nil and $1,300,289 shown as long term at December 31, 2020 and June 30, 2020, respectively. |
Convertible Notes Receivable -
Convertible Notes Receivable - Related Party | 6 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Convertible Notes Receivable - Related Party | NOTE 7 – CONVERTIBLE NOTES RECEIVABLE – RELATED PARTY The Company has entered into multiple convertible note receivable agreements with WRLD3D. The convertible notes bear interest ranging from 5% to 10% with various maturity dates. The convertible notes have conversion features which allow the Company to convert the notes into shares of WRLD3D stock upon the occurrence of certain events. 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 following table summarizes the convertible notes receivable from WRLD3D. Convertible Agreement Interest Maturity Note Accrued Date Rate Date Amount Interest May 25, 2017 5 % March 2, 2018 $ 750,000 $ 110,202 February 9, 2018 10 % March 31, 2019 2,500,000 500,773 April 1, 2019 10 % March 31, 2020 600,000 57,648 August 19, 2019 10 % March 31, 2020 400,000 32,439 4,250,000 701,062 Less allowance for doubtful account (4,250,000 ) (701,062 ) Net Balance $ - $ - The Company has an accrued interest balance of $701,062 at December 31, 2020 and June 30, 2020, respectively, which is included in “Other current assets”. Starting July 1, 2020, the Company is not accruing interest. |
Other Current Assets
Other Current Assets | 6 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Current Assets | NOTE 8 - OTHER CURRENT ASSETS Other current assets consisted of the following: As of As of December 31, 2020 June 30, 2020 Prepaid Expenses $ 1,243,439 $ 1,035,415 Advance Income Tax 332,023 355,482 Employee Advances 199,503 44,415 Security Deposits 280,611 270,403 Other Receivables 112,612 1,239,221 Other Assets 227,797 163,244 Total $ 2,395,985 $ 3,108,180 |
Revenues in Excess of Billings
Revenues in Excess of Billings - Long Term | 6 Months Ended |
Dec. 31, 2020 | |
Contractors [Abstract] | |
Revenues in Excess of Billings - Long Term | NOTE 9 – REVENUES IN EXCESS OF BILLINGS – LONG TERM Revenues in excess of billings, net consisted of the following: As of As of December 31, 2020 June 30, 2020 Revenues in excess of billings - long term $ 376,874 $ 1,341,575 Present value discount (20,815 ) (41,286 ) Net Balance $ 356,059 $ 1,300,289 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 and six months ended December 31, 2020, the Company accreted $27,766 and $41,826, respectively. During the three and six months ended December 31, 2019, the Company accreted $13,821 and $27,681, respectively, which were recorded in interest income for those periods. The Company used the discounted cash flow method with an interest rate of 4.65% and 4.35% for the period ended December 31, 2020 and June 30, 2020, respectively. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 10 - PROPERTY AND EQUIPMENT Property and equipment consisted of the following: As of As of December 31, 2020 June 30, 2020 Office Furniture and Equipment $ 3,213,526 $ 3,143,833 Computer Equipment 21,331,085 19,256,543 Assets Under Capital Leases 1,511,557 1,443,423 Building 6,123,262 5,848,813 Land 1,586,153 1,512,905 Capital Work In Progress 30,079 27,648 Autos 1,475,366 1,348,405 Improvements 38,062 36,929 Subtotal 35,309,090 32,618,499 Accumulated Depreciation (23,099,590 ) (21,288,868 ) Property and Equipment, Net $ 12,209,500 $ 11,329,631 For the three and six months ended December 31, 2020, depreciation expense totaled $485,456 and $981,723, respectively. Of these amounts, $263,884 and $538,361, respectively, are reflected in cost of revenues. For the three and six months ended December 31, 2019, depreciation expense totaled $484,662 and $950,113, respectively. Of these amounts, $269,183 and $532,247, respectively, are reflected in cost of revenues. Following is a summary of fixed assets held under finance leases as of December 31, 2020 and June 30, 2020: As of As of December 31, 2020 June 30, 2020 Computers and Other Equipment $ 362,337 $ 328,621 Furniture and Fixtures 56,722 51,119 Vehicles 1,092,498 1,063,683 Total 1,511,557 1,443,423 Less: Accumulated Depreciation - Net (736,767 ) (667,096 ) $ 774,790 $ 776,327 Finance lease term and discount rate were as follows: As of December 31, 2020 Weighted average remaining lease term - Finance leases 1.01 Years Weighted average discount rate - Finance leases 7.6 % |
Leases
Leases | 6 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | NOTE 11 - LEASES The Company leases certain office space, office equipment and autos with remaining lease terms of one year to 10 years under leases classified as financing and operating. For certain leases, the Company has options to extend the lease term for additional periods ranging from one year to 10 years. The Company treats a contract as a lease when the contract conveys the right to use a physically distinct asset for a period of time in exchange for consideration, or the Company directs the use of the asset and obtains substantially all the economic benefits of the asset. These leases are recorded as right-of-use (“ROU”) assets and lease obligation liabilities for leases with terms greater than 12 months. ROU assets represent the Company’s right to use an underlying asset for the entirety of the lease term. Lease liabilities represent the Company’s obligation to make payments over the life of the lease. A ROU asset and a lease liability are recognized at commencement of the lease based on the present value of the lease payments over the life of the lease. Initial direct costs are included as part of the ROU asset upon commencement of the lease. Since the interest rate implicit in a lease is generally not readily determinable for the operating leases, the Company uses an incremental borrowing rate to determine the present value of the lease payments. The incremental borrowing rate represents the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar lease term to obtain an asset of similar value. The Company used the incremental borrowing rate on July 1, 2019 for all leases that commenced prior to that date. For finance leases, the Company used the incremental borrowing rate implicit in the lease. The Company reviews the impairment of ROU assets consistent with the approach applied for the Company’s other long-lived assets. The Company reviews the recoverability of long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the Company’s ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company elected the practical expedient to exclude short-term leases (leases with original terms of 12 months or less) from ROU asset and lease liability accounts. Lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred. Variable payments change due to facts or circumstances occurring after the commencement date, other than the passage of time, and do not result in a re-measurement of lease liabilities. The Company’s variable lease payments include payments for finance leases that are adjusted based on a change in the Karachi Inter Bank Offer Rate. The Company’s lease agreements do not contain any significant residual value guarantees or restrictive covenants. Supplemental balance sheet information related to leases was as follows: As of As of December 31, 2020 June 30, 2020 Assets Operating lease assets, net $ 1,937,907 $ 2,360,129 Liabilities Current Operating $ 1,169,960 $ 1,111,912 Non-current Operating 962,724 1,339,965 Total Lease Liabilities $ 2,132,684 $ 2,451,877 The components of lease cost were as follows: For the Three Months For the Six Months Ended December 31, Ended December 31, 2020 2019 2020 2019 Amortization of finance lease assets $ 31,926 $ 108,670 $ 77,179 $ 135,000 Interest on finance lease obligation 6,953 29,413 18,645 52,331 Operating lease cost 310,740 334,492 630,826 598,069 Short term lease cost 13,493 78,862 30,071 152,972 Sub lease income (8,738 ) (8,514 ) (17,362 ) (16,713 ) Total lease cost $ 354,374 $ 542,923 $ 739,359 $ 921,659 Lease term and discount rate were as follows: As of December 31, 2020 Weighted average remaining lease term - Operating leases 2.08 Years Weighted average discount rate - Operating leases 5.6 % Supplemental disclosures of cash flow information related to leases were as follows: For the Six Months Ended December 31, 2020 December 31, 2019 Cash flows related to lease liabilities Operating cash flows related to operating leases $ 529,970 $ 566,589 Maturities of operating lease liabilities were as follows as of December 31, 2020: Amount Within year 1 $ 1,249,702 Within year 2 734,691 Within year 3 222,387 Within year 4 42,317 Within year 5 824 Thereafter 2,882 Total Lease Payments 2,252,803 Less: Imputed interest (120,119 ) Present Value of lease liabilities 2,132,684 Less: Current portion (1,169,960 ) Non-Current portion $ 962,724 The Company is a lessor for certain office space leased by the Company and sub-leased to others under non-cancelable leases. These lease agreements provide for a fixed base rent and terminate by July 2021. All leases are considered operating leases. There are no rights to purchase the premises and no residual value guarantees. For the three and six months ended December 31, 2020, the Company received lease income of $8,738 and $17,362, respectively. For the three and six months ended December 31, 2019, the Company received lease income of $8,514 and $16,713, respectively. |
Long Term Investment
Long Term Investment | 6 Months Ended |
Dec. 31, 2020 | |
Investments, All Other Investments [Abstract] | |
Long Term Investment | NOTE 12 – LONG TERM INVESTMENT Drivemate The Company and Drivemate Co., Ltd. (“Drivemate”) entered into a subscription agreement on April 25, 2019, (“Drivemate Agreement”) whereby the Company will purchase an equity interest of 30% in Drivemate. Per the Drivemate Agreement, the Company will purchase 5,469 preferred shares for $1,800,000 consisting of $500,000 cash and $1,300,000 in services. The Company has paid $437,500 in cash, provided services of $1,300,000 and has received 5,217 shares. The remaining $62,500 will be paid in increments based on the contract with the final payment due 24 months from the date of the Drivemate Agreement signing. As of December 31, 2020, the Company owns 21.47% of Drivemate. Per the Drivemate Agreement, the Company appointed two directors to the Drivemate board. The Company determined that it met the significant influence criteria since two of the four directors are appointed by the Company and the Company is to own 30% of Drivemate at the final payment date; therefore, the Company accounts for the investment using the equity method of accounting. The Company did not perform any services during the three and six months ended December 31, 2020. During the three and six months ended December 31, 2019, the Company performed $303,101 and $507,716 of services, respectively. Under the equity method of accounting, the Company recorded its share of net income of $3,324 and $3,919 for the three and six months ended December 31, 2020, respectively. Under the equity method of accounting, the Company recorded its share of net loss of $5,856 and $11,248 for the three and six months ended December 31, 2019, respectively. WRLD3D-Related Party 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 was earned by providing IT and enterprise software solutions. NetSol PK has not provided services to WRLD3D for the three and six months ended December 31, 2020, and has provided services of $57,424 and $140,357 for the three and six months ended December 31, 2019, which is recorded as services-related party. Accounts receivable and revenue in excess of billing were $1,373,099 and $8,163 at June 30, 2020, respectively. Upon adoption of ASC 326, an allowance was established for the full amounts of these accounts. The net balances of accounts receivable and revenues in excess of billing were $Nil at December 31, 2020. Under the equity method of accounting, the Company recorded its share of net loss of $47,009 and $155,454 for the three and six months ended December 31, 2020 and the Company recorded its share of net loss of $158,940 and $342,772 for the three and six months ended December 31, 2019, respectively. The following table reflects the above investments at December 31, 2020. Drivemate WRLD3D Total Gross investment $ 1,737,500 $ 3,888,889 $ 5,626,389 Cumulative net loss on investment (16,537 ) (1,445,687 ) (1,462,224 ) Cumulative other comprehensive income (loss) - (429,258 ) (429,258 ) Net investment $ 1,720,963 $ 2,013,944 $ 3,734,907 |
Intangible Assets
Intangible Assets | 6 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | NOTE 13 - INTANGIBLE ASSETS Intangible assets consisted of the following: As of As of December 31, 2020 June 30, 2020 Product Licenses - Cost $ 47,244,997 $ 47,244,997 Effect of Translation Adjustment (14,779,667 ) (16,045,322 ) Accumulated Amortization (27,711,787 ) (25,808,598 ) Net Balance $ 4,753,543 $ 5,391,077 (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 $4,753,543 will be amortized over the next 2.75 years. Amortization expense for the three and six months ended December 31, 2020 was $449,865 and $882,637, respectively. Amortization expense for the three and six months ended December 31, 2019 was $465,169 and $921,770, respectively. (B) Future Amortization Estimated amortization expense of intangible assets over the next five years is as follows: Period ended: December 31, 2021 $ 1,814,714 December 31, 2022 1,814,714 December 31, 2023 1,124,115 $ 4,753,543 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 6 Months Ended |
Dec. 31, 2020 | |
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 December 31, 2020 June 30, 2020 Accounts Payable $ 1,329,315 $ 1,351,158 Accrued Liabilities 4,058,567 3,349,624 Accrued Payroll & Taxes 485,642 537,888 Taxes Payable 276,305 303,996 Other Payable 177,363 138,171 Total $ 6,327,192 $ 5,680,837 |
Debts
Debts | 6 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debts | NOTE 15 – DEBTS Notes payable and finance leases consisted of the following: As of December 31, 2020 Current Long-Term Name Total Maturities Maturities D&O Insurance (1 ) $ 142,582 $ 142,582 $ - Paycheck Protection Program Loans (2 ) 469,721 339,243 130,478 Bank Overdraft Facility (3 ) - - - Term Finance Facility (4 ) 2,168,714 850,166 1,318,548 Loan Payable Bank - Export Refinance (5 ) 3,119,541 3,119,541 - Loan Payable Bank - Running Finance (6 ) - - - Loan Payable Bank - Export Refinance II (7 ) 2,370,850 2,370,850 - Loan Payable Bank - Running Finance II (8 ) - - - Loan Payable Bank - Export Refinance III (9 ) 3,119,542 3,119,542 - Term Finance Facility (10 ) 63,677 18,790 44,887 11,454,627 9,960,714 1,493,913 Subsidiary Finance Leases (11 ) 483,262 422,858 60,404 $ 11,937,889 $ 10,383,572 $ 1,554,317 As of June 30, 2020 Current Long-Term Name Total Maturities Maturities D&O Insurance (1 ) $ 81,728 $ 81,728 $ - Paycheck Protection Program Loans (2 ) 469,721 182,669 287,052 Bank Overdraft Facility (3 ) - - - Term Finance Facility (4 ) 1,380,878 354,337 1,026,541 Loan Payable Bank - Export Refinance (5 ) 2,975,482 2,975,482 - Loan Payable Bank - Running Finance (6 ) - - - Loan Payable Bank - Export Refinance II (7 ) 2,261,365 2,261,365 - Loan Payable Bank - Running Finance II (8 ) - - - Loan Payable Bank - Export Refinance III (9 ) 2,975,483 2,975,483 - Term Finance Facility (10 ) 65,473 16,423 49,050 10,210,130 8,847,487 1,362,643 Subsidiary Finance Leases (11 ) 469,406 292,074 177,332 $ 10,679,536 $ 9,139,561 $ 1,539,975 (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 5.0% to 7.0% as of December 31, 2020 and June 30, 2020. (2) The Company and its subsidiary, NTA, received Paycheck Protection Program loans of $469,721 introduced by the U.S. Government during the COVID-19 Pandemic. This loan is forgivable if the Company meets the criteria set by the U.S. Government. The loans carry an interest rate of 1% and have a maturity date of two years from the date of the disbursement of the loan. As of December 31, 2020, the Company has not applied for the loan forgiveness. (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 $410,959. The annual interest rate was 5.12% as of December 31, 2020. The total outstanding balance as of December 31, 2020 was £Nil. 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 December 31, 2020, NTE was in compliance with this covenant. (4) The Company’s subsidiary, NetSol PK, has a term finance facility from Askari Bank Limited, approved by the Government of Pakistan to protect the employment situation during the Pandemic COVID-19. This is a term loan payable in three years. The availed facility amount was Rs. 347,601,639 or $2,168,714, at December 31, 2020, of which $850,166 is shown as current and the remaining $1,318,548 is shown as long term. The availed facility amount was Rs. 232,042,664 or $1,380,878, at June 30, 2020, of which $354,337 is shown as current and the remaining $1,026,541 is shown as long term. The interest rate for the loan was 3% at December 31, 2020 and June 30, 2020. (5) 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 nine months. The total facility amount is Rs. 500,000,000 or $3,119,541 at December 31, 2020 and Rs. 500,000,000 or $2,975,482 at June 30, 2020. The interest rate for the loan was 3% at December 31, 2020 and June 30, 2020. (6) The Company’s subsidiary, NetSol PK, has a running finance facility with Askari Bank Limited, secured by NetSol PK’s assets. The total facility amount is Rs. 75,000,000 or $467,931, at December 31, 2020. The balance outstanding at December 31, 2020 and June 30, 2020 was Rs. Nil. The interest rate for the loan was 9.29% and 7.2% at December 31, 2020 and June 30, 2020, respectively. This facility requires NetSol PK to maintain a long-term debt equity ratio of 60:40 and the current ratio of 1:1. As of December 31, 2020, NetSol PK was in compliance with this covenant. (7) 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 nine months. The total facility amount is Rs. 380,000,000 or $2,370,851 and Rs. 380,000,000 or $2,261,366 at December 31, 2020 and June 30, 2020, respectively. The interest rate for the loan was 3% at December 31, 2020 and June 30, 2020. (8) The Company’s subsidiary, NetSol PK, has a running finance facility with Samba Bank Limited, secured by NetSol PK’s assets. The total facility amount is Rs. 120,000,000 or $748,690 and Rs. 120,000,000 or $714,116, at December 31, 2020 and June 30, 2020, respectively. The interest rate for the loan was 8.79% and 7.7% at December 31, 2020 and June 30, 2020, respectively. The balance outstanding at December 31, 2020 and June 30, 2020 was Rs. Nil. 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 December 31, 2020, NetSol PK was in compliance with these covenants. (9) The Company’s subsidiary, NetSol PK, has an export refinance facility with Habib Metro Bank Limited, secured by NetSol PK’s assets. This is a revolving loan that matures every nine months. The total facility amount is Rs. 900,000,000 or $5,615,173 and NetSol PK used Rs. 500,000,000 or $3,119,541 at December 31, 2020. The total facility amount is Rs. 900,000,000 or $5,355,868 and NetSol PK used Rs. 500,000,000 or $2,975,482 at June 30, 2020. The interest rate for the loan was 3% at December 31, 2020 and June 30, 2020. (10) In March 2019, the Company’s subsidiary, VLS, entered into a loan agreement. The loan amount was £69,549, or $95,273, for a period of 5 years with monthly payments of £1,349, or $1,848. As of December 31, 2020, the subsidiary has used this facility up to $63,677, of which $44,887 was shown as long-term and $18,790 as current. The interest rate was 6.14% at December 31, 2020. (11) The Company leases various fixed assets under finance lease arrangements expiring in various years through 2024. The assets and liabilities under finance 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 finance leases is included in depreciation expense for the three and six months ended December 31, 2020 and 2019. Following is the aggregate minimum future lease payments under finance leases as of December 31, 2020: Amount Minimum Lease Payments Within year 1 $ 433,875 Within year 2 37,913 Within year 3 22,027 Within year 4 3,671 Total Minimum Lease Payments 497,486 Interest Expense relating to future periods (14,224 ) Present Value of minimum lease payments 483,262 Less: Current portion (422,858 ) Non-Current portion $ 60,404 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 16 - STOCKHOLDERS’ EQUITY During the three and six months ended December 31, 2020, the Company issued 3,020 and 6,040 shares of common stock for services rendered by officers of the Company. These shares were valued at the fair market value of $17,068 and $34,136, respectively. During the three and six months ended December 31, 2020, the Company issued nil and 1,983 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 $Nil and $11,997. During the three and six months ended December 31, 2020, the Company issued 7,393 and 17,286 shares of its common stock to employees pursuant to the terms of their employment agreements valued at $41,600 and $99,548, respectively. |
Incentive and Non-statutory Sto
Incentive and Non-statutory Stock Option Plan | 6 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Incentive and Non-statutory Stock Option Plan | NOTE 17 - INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN The following table summarizes stock grants awarded as compensation: # of shares Weighted Average Grant Date Fair Value ($) Unvested, June 30, 2020 66,421 $ 5.88 Vested (25,309 ) $ 5.76 Unvested, December 31, 2020 41,112 $ 5.75 For the three and six months ended December 31, 2020, the Company recorded compensation expense of $74,167 and $164,784, respectively. For the three and six months ended December 31, 2019, the Company recorded compensation expense of $164,292 and $328,585, respectively. The compensation expense related to the unvested stock grants as of December 31, 2020 was $208,445 which will be recognized during the fiscal years 2021 through 2022. |
Contingencies
Contingencies | 6 Months Ended |
Dec. 31, 2020 | |
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 | 6 Months Ended |
Dec. 31, 2020 | |
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 December 31, 2020 and June 30, 2020: As of As of December 31, 2020 June 30, 2020 Identifiable assets: Corporate headquarters $ 3,814,916 $ 4,508,724 North America 6,073,162 5,949,653 Europe 11,617,067 10,856,814 Asia - Pacific 63,953,775 67,157,898 Consolidated $ 85,458,920 $ 88,473,089 The following table presents a summary of investment under equity method as of December 31, 2020 and June 30, 2020: As of As of December 31, 2020 June 30, 2020 Investment in associates under equity method: Corporate headquarters $ 424,504 $ 473,692 Asia - Pacific 3,310,403 1,914,000 Consolidated $ 3,734,907 $ 2,387,692 The following table presents a summary of operating information for the three and six months ended December 31: For the Three Months For the Six Months Ended December 31, Ended December 31, 2020 2019 2020 2019 Revenues from unaffiliated customers: North America $ 1,016,556 $ 1,277,343 $ 1,829,434 $ 2,254,518 Europe 2,726,206 2,842,329 5,878,097 5,434,668 Asia - Pacific 9,378,698 11,512,923 18,061,307 21,432,892 13,121,460 15,632,595 25,768,838 29,122,078 Revenue from affiliated customers Asia - Pacific - 57,424 - 140,357 - 57,424 - 140,357 Consolidated $ 13,121,460 $ 15,690,019 $ 25,768,838 $ 29,262,435 Intercompany revenue Europe $ 126,757 $ 164,401 $ 265,913 $ 311,226 Asia - Pacific 3,125,729 2,505,437 5,284,357 3,570,203 Eliminated $ 3,252,486 $ 2,669,838 $ 5,550,270 $ 3,881,429 Net income (loss) after taxes and before non-controlling interest: Corporate headquarters $ 1,173,146 $ (379,882 ) $ 2,340,941 $ (1,244,092 ) North America (47,019 ) 154,335 (328,816 ) 96,348 Europe 173,085 423,649 776,101 804,743 Asia - Pacific (1,378,400 ) 348,834 (1,743,937 ) (1,371,322 ) Consolidated $ (79,188 ) $ 546,936 $ 1,044,289 $ (1,714,323 ) The following table presents a summary of capital expenditures for the six months ended December 31: For the Six Months Ended December 31, 2020 2019 Capital expenditures: North America $ 1,521 $ 2,405 Europe 301,233 329,332 Asia - Pacific 947,141 454,262 Consolidated $ 1,249,895 $ 785,999 |
Non-Controlling Interest in Sub
Non-Controlling Interest in Subsidiary | 6 Months Ended |
Dec. 31, 2020 | |
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 December 31, 2020 NetSol PK 33.88 % $ 7,165,477 NetSol-Innovation 33.88 % 133,243 NetSol Thai 0.006 % (262 ) OTOZ Thai 0.006 % (42 ) OTOZ 5.00 % (11,143 ) Total $ 7,287,273 SUBSIDIARY Non-Controlling Interest % Non-Controlling Interest at June 30, 2020 NetSol PK 33.88 % $ 6,361,747 NetSol-Innovation 33.88 % 128,514 NetSol Thai 0.006 % (39 ) OTOZ Thai 0.006 % 4 OTOZ 5.00 % (1,326 ) Total $ 6,488,900 |
Income Taxes
Income Taxes | 6 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 21 – INCOME TAXES The current tax provision is based on taxable income for the year determined in accordance with the prevailing law for taxation of income. The charge for tax on income is calculated at the current rates of taxation as applicable after considering tax credit and tax rebates available, if any. We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Our effective tax rate is lower than the U.S. statutory rate primarily because of more earnings realized in countries that have lower statutory tax rates. Our effective tax rate in the future will depend on the portion of our profits earned within and outside the United States. Income from the export of computer software and its related services developed in Pakistan is exempt from tax through June 30, 2025; however, tax at the applicable rates is charged to the income from revenue generated from other than core business activities. During the three and six months ended December 31, 2020, the Company recorded an income tax provision of $245,434 and $509,728, respectively, resulting in an effective tax rate of 147.6% and 32.8%, respectively. During the three and six months ended December 31, 2019, the Company recorded an income tax provision of $610,510 and $848,748, respectively, resulting in an effective tax rate of 52.7% and (98.1%), respectively. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 22 – SUBSEQUENT EVENTS Subsequent to December 31, 2020, the Company purchased an additional 92,440 shares at an average price of $4.03 per share pursuant to the stock repurchase plan approved by the Company’s Board of Directors on July 30, 2020. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 6 Months Ended |
Dec. 31, 2020 | |
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, assumptions used to determine the net present value of operating lease liabilities, 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 except balances maintained in China are insured for RMB 500,000 ($76,570) in each bank and in UK for GBP 85,000 ($116,438) in each bank. The Company maintains two bank accounts in China and six bank accounts in the UK. As of December 31, 2020, and June 30, 2020, the Company had uninsured deposits related to cash deposits in accounts maintained within foreign entities of approximately $28,954,360 and $18,210,378, 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 Accounting Standards Codification (“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’s financial assets that were measured at fair value on a recurring basis as of December 31, 2020, were as follows: Level 1 Level 2 Level 3 Total Assets Revenues in excess of billings - long term $ - $ - $ 356,059 $ 356,059 Total $ - $ - $ 356,059 $ 356,059 The Company’s financial assets that were measured at fair value on a recurring basis as of June 30, 2020, were as follows: Level 1 Level 2 Level 3 Total Assets Revenues in excess of billing - long term $ - $ - $ 1,300,289 $ 1,300,289 Total $ - $ - $ 1,300,289 $ 1,300,289 The reconciliation from June 30, 2020 to December 31, 2020 is as follows: Revenues in excess of billings - long term Fair value discount Total Balance at June 30, 2020 $ 1,341,575 $ (41,286 ) $ 1,300,289 Additions 376,874 (20,815 ) 356,059 Amortization during the period - 41,286 41,286 Transfers to short term (1,341,575 ) - (1,341,575 ) Balance at December 31, 2020 $ 376,874 $ (20,815 ) $ 356,059 Management analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity” “Derivatives and Hedging.” |
Recent Accounting Standards Adopted by the Company | Recent Accounting Standards Adopted by the Company: In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-04, Simplifying the Test for Goodwill Impairment In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments The Company adopted the standard on July 1, 2020 using the modified retrospective approach. The adoption of ASU 2016-13 resulted in changes to the Company’s accounting policies for trade and other receivables, contract assets and convertible notes receivable. Based on the results of the Company’s evaluation, the adoption of ASU 2016-13 resulted in a one-time cumulative-effect adjustment through retained earnings of $6,784,300 to increase its allowance for credit losses related to the convertible notes receivable, interest receivable, accounts receivable, revenues in excess of billings, and other receivables. The following table presents the impact of adopting ASC Topic 326 as of July 1, 2020: Adjustment to Adopt Asset Classification ASC Topic 326 Allowance for credit losses - accounts receivable $ 109,486 Allowance for credit losses - accounts receivable - related party 1,282,505 Allowance for credit losses - revenue in excess of billings - related party 8,163 Allowance for credit losses - convertible notes receivable - related party 4,250,000 Allowance for credit losses - other current assets 1,134,146 $ 6,784,300 Accounts receivable includes trade accounts receivables from the Company’s customers, net of an allowance for credit risk. Accounts receivable are recorded at the invoiced amount and do not bear interest. In establishing the required allowance, management regularly reviews the composition of accounts receivable and analyzes customer credit worthiness, customer concentrations, current economic trends and changes in customer payment patterns. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Revenue in excess of billings, relates to services performed which were not billed, net of an allowance for credit risk. As customers are billed under the terms of the contract, the corresponding amount is transferred to accounts receivable. In establishing the required allowance, management regularly reviews the composition of and analyzes customer credit worthiness, customer concentrations, current economic trends, changes in customer payment patterns, the project status and assesses individual unbilled contract assets over a specific aging and amount. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The convertible notes receivable represents loans provided to WRLD3D. The allowance for credit risk for the convertible notes is established based on various quantitative and qualitative factors including customer credit worthiness, current economic trends and changes in payment patterns. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. |
Basis of Presentation and Pri_2
Basis of Presentation and Principles of Consolidation (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Reclassified Net Revenues | For comparative purposes, prior year’s condensed consolidated financial statements have been reclassified to conform to report classifications of the current period. Below is the table of reclassified amounts: For the Three Months Ended For the Six Months ended December 31, 2019 December 31, 2019 Originally reported Reclassified Originally reported Reclassified REVENUES License fees $ 383,963 $ 176,706 $ 3,063,108 $ 2,640,922 Subscription and support 4,965,877 5,104,736 9,357,324 9,711,112 Services 10,282,755 10,351,153 16,701,646 16,770,044 Services - related party 57,424 57,424 140,357 140,357 Total net revenues $ 15,690,019 $ 15,690,019 $ 29,262,435 $ 29,262,435 |
Accounting Policies (Tables)
Accounting Policies (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
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 December 31, 2020, were as follows: Level 1 Level 2 Level 3 Total Assets Revenues in excess of billings - long term $ - $ - $ 356,059 $ 356,059 Total $ - $ - $ 356,059 $ 356,059 The Company’s financial assets that were measured at fair value on a recurring basis as of June 30, 2020, were as follows: Level 1 Level 2 Level 3 Total Assets Revenues in excess of billing - long term $ - $ - $ 1,300,289 $ 1,300,289 Total $ - $ - $ 1,300,289 $ 1,300,289 |
Schedule of Fair Value of Financial Instruments Reconciliation | The reconciliation from June 30, 2020 to December 31, 2020 is as follows: Revenues in excess of billings - long term Fair value discount Total Balance at June 30, 2020 $ 1,341,575 $ (41,286 ) $ 1,300,289 Additions 376,874 (20,815 ) 356,059 Amortization during the period - 41,286 41,286 Transfers to short term (1,341,575 ) - (1,341,575 ) Balance at December 31, 2020 $ 376,874 $ (20,815 ) $ 356,059 |
Schedule of the Impact of Adopting Topic 326 | The following table presents the impact of adopting ASC Topic 326 as of July 1, 2020: Adjustment to Adopt Asset Classification ASC Topic 326 Allowance for credit losses - accounts receivable $ 109,486 Allowance for credit losses - accounts receivable - related party 1,282,505 Allowance for credit losses - revenue in excess of billings - related party 8,163 Allowance for credit losses - convertible notes receivable - related party 4,250,000 Allowance for credit losses - other current assets 1,134,146 $ 6,784,300 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
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 For the Six Months Ended December 31, Ended December 31, 2020 2019 2020 2019 Core: License $ 2,586,504 $ 176,706 $ 2,589,979 $ 2,640,922 Subscription and support 5,724,802 5,104,736 10,896,665 9,711,112 Services 3,191,375 8,627,927 9,064,313 13,254,196 Services - related party - 57,424 - 140,357 Total core revenue, net 11,502,681 13,966,793 22,550,957 25,746,587 Non-Core: Services 1,618,779 1,723,226 3,217,881 3,515,848 Total non-core revenue, net 1,618,779 1,723,226 3,217,881 3,515,848 Total net revenue $ 13,121,460 $ 15,690,019 $ 25,768,838 $ 29,262,435 |
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 Revenues in excess of billings $ 13,646,069 $ 18,506,733 Deferred Revenue $ 3,753,781 $ 4,095,472 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
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 December 31, 2020 For the six months ended December 31, 2020 Net Loss Shares Per Share Net Income Shares Per Share Basic income (loss) per share: Net income (loss) available to common shareholders $ (242,104 ) 11,580,030 $ (0.02 ) $ 475,450 11,683,631 $ 0.04 Effect of dilutive securities Share grants - - - - - - Diluted income (loss) per share $ (242,104 ) 11,580,030 $ (0.02 ) $ 475,450 11,683,631 $ 0.04 For the three months ended December 31, 2019 For the six months ended December 31, 2019 Net Income Shares Per Share Net Loss Shares Per Share Basic income (loss) per share: Net income (loss) available to common shareholders $ 585,975 11,724,606 $ 0.05 $ (1,241,972 ) 11,694,423 $ (0.11 ) Effect of dilutive securities Share grants - - - - - - Diluted income (loss) per share $ 585,975 11,724,606 $ 0.05 $ (1,241,972 ) 11,694,423 $ (0.11 ) |
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 For the Six Months Ended December 31, Ended December 31, 2020 2019 2020 2019 Stock Options - 40,386 - 40,386 Share Grants 41,112 119,921 41,112 119,921 41,112 160,307 41,112 160,307 |
Convertible Notes Receivable _2
Convertible Notes Receivable - Related Party (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Schedule of Convertible Notes | The following table summarizes the convertible notes receivable from WRLD3D. Convertible Agreement Interest Maturity Note Accrued Date Rate Date Amount Interest May 25, 2017 5 % March 2, 2018 $ 750,000 $ 110,202 February 9, 2018 10 % March 31, 2019 2,500,000 500,773 April 1, 2019 10 % March 31, 2020 600,000 57,648 August 19, 2019 10 % March 31, 2020 400,000 32,439 4,250,000 701,062 Less allowance for doubtful account (4,250,000 ) (701,062 ) Net Balance $ - $ - |
Other Current Assets (Tables)
Other Current Assets (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
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 December 31, 2020 June 30, 2020 Prepaid Expenses $ 1,243,439 $ 1,035,415 Advance Income Tax 332,023 355,482 Employee Advances 199,503 44,415 Security Deposits 280,611 270,403 Other Receivables 112,612 1,239,221 Other Assets 227,797 163,244 Total $ 2,395,985 $ 3,108,180 |
Revenues in Excess of Billing_2
Revenues in Excess of Billings - Long Term (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Contractors [Abstract] | |
Schedule of Revenues in Excess of Billings | Revenues in excess of billings, net consisted of the following: As of As of December 31, 2020 June 30, 2020 Revenues in excess of billings - long term $ 376,874 $ 1,341,575 Present value discount (20,815 ) (41,286 ) Net Balance $ 356,059 $ 1,300,289 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following: As of As of December 31, 2020 June 30, 2020 Office Furniture and Equipment $ 3,213,526 $ 3,143,833 Computer Equipment 21,331,085 19,256,543 Assets Under Capital Leases 1,511,557 1,443,423 Building 6,123,262 5,848,813 Land 1,586,153 1,512,905 Capital Work In Progress 30,079 27,648 Autos 1,475,366 1,348,405 Improvements 38,062 36,929 Subtotal 35,309,090 32,618,499 Accumulated Depreciation (23,099,590 ) (21,288,868 ) Property and Equipment, Net $ 12,209,500 $ 11,329,631 |
Summary of Fixed Assets Held Under Capital Leases | Following is a summary of fixed assets held under finance leases as of December 31, 2020 and June 30, 2020: As of As of December 31, 2020 June 30, 2020 Computers and Other Equipment $ 362,337 $ 328,621 Furniture and Fixtures 56,722 51,119 Vehicles 1,092,498 1,063,683 Total 1,511,557 1,443,423 Less: Accumulated Depreciation - Net (736,767 ) (667,096 ) $ 774,790 $ 776,327 |
Schedule of Finance Lease Term | Finance lease term and discount rate were as follows: As of December 31, 2020 Weighted average remaining lease term - Finance leases 1.01 Years Weighted average discount rate - Finance leases 7.6 % |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows: As of As of December 31, 2020 June 30, 2020 Assets Operating lease assets, net $ 1,937,907 $ 2,360,129 Liabilities Current Operating $ 1,169,960 $ 1,111,912 Non-current Operating 962,724 1,339,965 Total Lease Liabilities $ 2,132,684 $ 2,451,877 |
Schedule of Components of Lease Cost | The components of lease cost were as follows: For the Three Months For the Six Months Ended December 31, Ended December 31, 2020 2019 2020 2019 Amortization of finance lease assets $ 31,926 $ 108,670 $ 77,179 $ 135,000 Interest on finance lease obligation 6,953 29,413 18,645 52,331 Operating lease cost 310,740 334,492 630,826 598,069 Short term lease cost 13,493 78,862 30,071 152,972 Sub lease income (8,738 ) (8,514 ) (17,362 ) (16,713 ) Total lease cost $ 354,374 $ 542,923 $ 739,359 $ 921,659 |
Schedule of Lease Term and Discount Rate | Lease term and discount rate were as follows: As of December 31, 2020 Weighted average remaining lease term - Operating leases 2.08 Years Weighted average discount rate - Operating leases 5.6 % |
Schedule of Supplemental Disclosures of Cash Flow Information Related to Leases | Supplemental disclosures of cash flow information related to leases were as follows: For the Six Months Ended December 31, 2020 December 31, 2019 Cash flows related to lease liabilities Operating cash flows related to operating leases $ 529,970 $ 566,589 |
Schedule of Maturities of Operating Lease Liabilities | Maturities of operating lease liabilities were as follows as of December 31, 2020: Amount Within year 1 $ 1,249,702 Within year 2 734,691 Within year 3 222,387 Within year 4 42,317 Within year 5 824 Thereafter 2,882 Total Lease Payments 2,252,803 Less: Imputed interest (120,119 ) Present Value of lease liabilities 2,132,684 Less: Current portion (1,169,960 ) Non-Current portion $ 962,724 |
Long Term Investment (Tables)
Long Term Investment (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Investments, All Other Investments [Abstract] | |
Schedule of Long Term Investment | The following table reflects the above investments at December 31, 2020. Drivemate WRLD3D Total Gross investment $ 1,737,500 $ 3,888,889 $ 5,626,389 Cumulative net loss on investment (16,537 ) (1,445,687 ) (1,462,224 ) Cumulative other comprehensive income (loss) - (429,258 ) (429,258 ) Net investment $ 1,720,963 $ 2,013,944 $ 3,734,907 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consisted of the following: As of As of December 31, 2020 June 30, 2020 Product Licenses - Cost $ 47,244,997 $ 47,244,997 Effect of Translation Adjustment (14,779,667 ) (16,045,322 ) Accumulated Amortization (27,711,787 ) (25,808,598 ) Net Balance $ 4,753,543 $ 5,391,077 |
Summary of Estimated Amortization Expense of Intangible Assets | Estimated amortization expense of intangible assets over the next five years is as follows: Period ended: December 31, 2021 $ 1,814,714 December 31, 2022 1,814,714 December 31, 2023 1,124,115 $ 4,753,543 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consisted of the following: As of As of December 31, 2020 June 30, 2020 Accounts Payable $ 1,329,315 $ 1,351,158 Accrued Liabilities 4,058,567 3,349,624 Accrued Payroll & Taxes 485,642 537,888 Taxes Payable 276,305 303,996 Other Payable 177,363 138,171 Total $ 6,327,192 $ 5,680,837 |
Debts (Tables)
Debts (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Components of Notes Payable and Finance Leases | Notes payable and finance leases consisted of the following: As of December 31, 2020 Current Long-Term Name Total Maturities Maturities D&O Insurance (1 ) $ 142,582 $ 142,582 $ - Paycheck Protection Program Loans (2 ) 469,721 339,243 130,478 Bank Overdraft Facility (3 ) - - - Term Finance Facility (4 ) 2,168,714 850,166 1,318,548 Loan Payable Bank - Export Refinance (5 ) 3,119,541 3,119,541 - Loan Payable Bank - Running Finance (6 ) - - - Loan Payable Bank - Export Refinance II (7 ) 2,370,850 2,370,850 - Loan Payable Bank - Running Finance II (8 ) - - - Loan Payable Bank - Export Refinance III (9 ) 3,119,542 3,119,542 - Term Finance Facility (10 ) 63,677 18,790 44,887 11,454,627 9,960,714 1,493,913 Subsidiary Finance Leases (11 ) 483,262 422,858 60,404 $ 11,937,889 $ 10,383,572 $ 1,554,317 As of June 30, 2020 Current Long-Term Name Total Maturities Maturities D&O Insurance (1 ) $ 81,728 $ 81,728 $ - Paycheck Protection Program Loans (2 ) 469,721 182,669 287,052 Bank Overdraft Facility (3 ) - - - Term Finance Facility (4 ) 1,380,878 354,337 1,026,541 Loan Payable Bank - Export Refinance (5 ) 2,975,482 2,975,482 - Loan Payable Bank - Running Finance (6 ) - - - Loan Payable Bank - Export Refinance II (7 ) 2,261,365 2,261,365 - Loan Payable Bank - Running Finance II (8 ) - - - Loan Payable Bank - Export Refinance III (9 ) 2,975,483 2,975,483 - Term Finance Facility (10 ) 65,473 16,423 49,050 10,210,130 8,847,487 1,362,643 Subsidiary Finance Leases (11 ) 469,406 292,074 177,332 $ 10,679,536 $ 9,139,561 $ 1,539,975 (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 5.0% to 7.0% as of December 31, 2020 and June 30, 2020. (2) The Company and its subsidiary, NTA, received Paycheck Protection Program loans of $469,721 introduced by the U.S. Government during the COVID-19 Pandemic. This loan is forgivable if the Company meets the criteria set by the U.S. Government. The loans carry an interest rate of 1% and have a maturity date of two years from the date of the disbursement of the loan. As of December 31, 2020, the Company has not applied for the loan forgiveness. (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 $410,959. The annual interest rate was 5.12% as of December 31, 2020. The total outstanding balance as of December 31, 2020 was £Nil. 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 December 31, 2020, NTE was in compliance with this covenant. (4) The Company’s subsidiary, NetSol PK, has a term finance facility from Askari Bank Limited, approved by the Government of Pakistan to protect the employment situation during the Pandemic COVID-19. This is a term loan payable in three years. The availed facility amount was Rs. 347,601,639 or $2,168,714, at December 31, 2020, of which $850,166 is shown as current and the remaining $1,318,548 is shown as long term. The availed facility amount was Rs. 232,042,664 or $1,380,878, at June 30, 2020, of which $354,337 is shown as current and the remaining $1,026,541 is shown as long term. The interest rate for the loan was 3% at December 31, 2020 and June 30, 2020. (5) 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 nine months. The total facility amount is Rs. 500,000,000 or $3,119,541 at December 31, 2020 and Rs. 500,000,000 or $2,975,482 at June 30, 2020. The interest rate for the loan was 3% at December 31, 2020 and June 30, 2020. (6) The Company’s subsidiary, NetSol PK, has a running finance facility with Askari Bank Limited, secured by NetSol PK’s assets. The total facility amount is Rs. 75,000,000 or $467,931, at December 31, 2020. The balance outstanding at December 31, 2020 and June 30, 2020 was Rs. Nil. The interest rate for the loan was 9.29% and 7.2% at December 31, 2020 and June 30, 2020, respectively. This facility requires NetSol PK to maintain a long-term debt equity ratio of 60:40 and the current ratio of 1:1. As of December 31, 2020, NetSol PK was in compliance with this covenant. (7) 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 nine months. The total facility amount is Rs. 380,000,000 or $2,370,851 and Rs. 380,000,000 or $2,261,366 at December 31, 2020 and June 30, 2020, respectively. The interest rate for the loan was 3% at December 31, 2020 and June 30, 2020. (8) The Company’s subsidiary, NetSol PK, has a running finance facility with Samba Bank Limited, secured by NetSol PK’s assets. The total facility amount is Rs. 120,000,000 or $748,690 and Rs. 120,000,000 or $714,116, at December 31, 2020 and June 30, 2020, respectively. The interest rate for the loan was 8.79% and 7.7% at December 31, 2020 and June 30, 2020, respectively. The balance outstanding at December 31, 2020 and June 30, 2020 was Rs. Nil. 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 December 31, 2020, NetSol PK was in compliance with these covenants. (9) The Company’s subsidiary, NetSol PK, has an export refinance facility with Habib Metro Bank Limited, secured by NetSol PK’s assets. This is a revolving loan that matures every nine months. The total facility amount is Rs. 900,000,000 or $5,615,173 and NetSol PK used Rs. 500,000,000 or $3,119,541 at December 31, 2020. The total facility amount is Rs. 900,000,000 or $5,355,868 and NetSol PK used Rs. 500,000,000 or $2,975,482 at June 30, 2020. The interest rate for the loan was 3% at December 31, 2020 and June 30, 2020. (10) In March 2019, the Company’s subsidiary, VLS, entered into a loan agreement. The loan amount was £69,549, or $95,273, for a period of 5 years with monthly payments of £1,349, or $1,848. As of December 31, 2020, the subsidiary has used this facility up to $63,677, of which $44,887 was shown as long-term and $18,790 as current. The interest rate was 6.14% at December 31, 2020. (11) The Company leases various fixed assets under finance lease arrangements expiring in various years through 2024. The assets and liabilities under finance 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 finance leases is included in depreciation expense for the three and six months ended December 31, 2020 and 2019. |
Schedule of Aggregate Minimum Future Lease Payments Under Finance Leases | Following is the aggregate minimum future lease payments under finance leases as of December 31, 2020: Amount Minimum Lease Payments Within year 1 $ 433,875 Within year 2 37,913 Within year 3 22,027 Within year 4 3,671 Total Minimum Lease Payments 497,486 Interest Expense relating to future periods (14,224 ) Present Value of minimum lease payments 483,262 Less: Current portion (422,858 ) Non-Current portion $ 60,404 |
Incentive and Non-Statutory S_2
Incentive and Non-Statutory Stock Option Plan (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
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, 2020 66,421 $ 5.88 Vested (25,309 ) $ 5.76 Unvested, December 31, 2020 41,112 $ 5.75 |
Operating Segments (Tables)
Operating Segments (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Summary of Identifiable Assets | The following table presents a summary of identifiable assets as of December 31, 2020 and June 30, 2020: As of As of December 31, 2020 June 30, 2020 Identifiable assets: Corporate headquarters $ 3,814,916 $ 4,508,724 North America 6,073,162 5,949,653 Europe 11,617,067 10,856,814 Asia - Pacific 63,953,775 67,157,898 Consolidated $ 85,458,920 $ 88,473,089 |
Summary of Investment Under Equity Method | The following table presents a summary of investment under equity method as of December 31, 2020 and June 30, 2020: As of As of December 31, 2020 June 30, 2020 Investment in associates under equity method: Corporate headquarters $ 424,504 $ 473,692 Asia - Pacific 3,310,403 1,914,000 Consolidated $ 3,734,907 $ 2,387,692 |
Summary of Operating Information | The following table presents a summary of operating information for the three and six months ended December 31: For the Three Months For the Six Months Ended December 31, Ended December 31, 2020 2019 2020 2019 Revenues from unaffiliated customers: North America $ 1,016,556 $ 1,277,343 $ 1,829,434 $ 2,254,518 Europe 2,726,206 2,842,329 5,878,097 5,434,668 Asia - Pacific 9,378,698 11,512,923 18,061,307 21,432,892 13,121,460 15,632,595 25,768,838 29,122,078 Revenue from affiliated customers Asia - Pacific - 57,424 - 140,357 - 57,424 - 140,357 Consolidated $ 13,121,460 $ 15,690,019 $ 25,768,838 $ 29,262,435 Intercompany revenue Europe $ 126,757 $ 164,401 $ 265,913 $ 311,226 Asia - Pacific 3,125,729 2,505,437 5,284,357 3,570,203 Eliminated $ 3,252,486 $ 2,669,838 $ 5,550,270 $ 3,881,429 Net income (loss) after taxes and before non-controlling interest: Corporate headquarters $ 1,173,146 $ (379,882 ) $ 2,340,941 $ (1,244,092 ) North America (47,019 ) 154,335 (328,816 ) 96,348 Europe 173,085 423,649 776,101 804,743 Asia - Pacific (1,378,400 ) 348,834 (1,743,937 ) (1,371,322 ) Consolidated $ (79,188 ) $ 546,936 $ 1,044,289 $ (1,714,323 ) |
Summary of Capital Expenditures | The following table presents a summary of capital expenditures for the six months ended December 31: For the Six Months Ended December 31, 2020 2019 Capital expenditures: North America $ 1,521 $ 2,405 Europe 301,233 329,332 Asia - Pacific 947,141 454,262 Consolidated $ 1,249,895 $ 785,999 |
Non-Controlling Interest in S_2
Non-Controlling Interest in Subsidiary (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Noncontrolling Interest [Abstract] | |
Schedule of 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 December 31, 2020 NetSol PK 33.88 % $ 7,165,477 NetSol-Innovation 33.88 % 133,243 NetSol Thai 0.006 % (262 ) OTOZ Thai 0.006 % (42 ) OTOZ 5.00 % (11,143 ) Total $ 7,287,273 SUBSIDIARY Non-Controlling Interest % Non-Controlling Interest at June 30, 2020 NetSol PK 33.88 % $ 6,361,747 NetSol-Innovation 33.88 % 128,514 NetSol Thai 0.006 % (39 ) OTOZ Thai 0.006 % 4 OTOZ 5.00 % (1,326 ) Total $ 6,488,900 |
Basis of Presentation and Pri_3
Basis of Presentation and Principles of Consolidation - Schedule of Reclassified Net Revenues (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Total net revenues | $ 13,121,460 | $ 15,690,019 | $ 25,768,838 | $ 29,262,435 |
Originally Reported [Member] | ||||
Total net revenues | 15,690,019 | 29,262,435 | ||
Reclassified [Member] | ||||
Total net revenues | 15,690,019 | 29,262,435 | ||
License Fees [Member] | ||||
Total net revenues | 2,586,504 | 176,706 | 2,589,979 | 2,640,922 |
License Fees [Member] | Originally Reported [Member] | ||||
Total net revenues | 383,963 | 3,063,108 | ||
License Fees [Member] | Reclassified [Member] | ||||
Total net revenues | 176,706 | 2,640,922 | ||
Subscription and Support [Member] | ||||
Total net revenues | 5,724,802 | 5,104,736 | 10,896,665 | 9,711,112 |
Subscription and Support [Member] | Originally Reported [Member] | ||||
Total net revenues | 4,965,877 | 9,357,324 | ||
Subscription and Support [Member] | Reclassified [Member] | ||||
Total net revenues | 5,104,736 | 9,711,112 | ||
Services [Member] | ||||
Total net revenues | 4,810,154 | 10,351,153 | 12,282,194 | 16,770,044 |
Services [Member] | Originally Reported [Member] | ||||
Total net revenues | 10,282,755 | 16,701,646 | ||
Services [Member] | Reclassified [Member] | ||||
Total net revenues | 10,351,153 | 16,770,044 | ||
Services - Related Party [Member] | ||||
Total net revenues | 57,424 | 140,357 | ||
Services - Related Party [Member] | Originally Reported [Member] | ||||
Total net revenues | 57,424 | 140,357 | ||
Services - Related Party [Member] | Reclassified [Member] | ||||
Total net revenues | $ 57,424 | $ 140,357 |
Accounting Policies (Details Na
Accounting Policies (Details Narrative) | Dec. 31, 2020USD ($) | Dec. 31, 2020GBP (£) | Dec. 31, 2020CNY (¥) | Jun. 30, 2020USD ($) |
Uninsured deposits related to cash deposits | $ 28,954,360 | $ 18,210,378 | ||
China [Member] | ||||
Uninsured deposits related to cash deposits | 76,570 | |||
UK [Member] | ||||
Uninsured deposits related to cash deposits | $ 116,438 | |||
RMB [Member] | ||||
Uninsured deposits related to cash deposits | ¥ | ¥ 500,000 | |||
GBP [Member] | ||||
Uninsured deposits related to cash deposits | £ | £ 85,000 |
Accounting Policies - Schedule
Accounting Policies - Schedule of Fair Value of Financial Assets Measured on Recurring Basis (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Revenues in excess of billings - long term | $ 356,059 | $ 1,300,289 |
Total | 356,059 | 1,300,289 |
Level 1 [Member] | ||
Revenues in excess of billings - long term | ||
Total | ||
Level 2 [Member] | ||
Revenues in excess of billings - long term | ||
Total | ||
Level 3 [Member] | ||
Revenues in excess of billings - long term | 356,059 | 1,300,289 |
Total | $ 356,059 | $ 1,300,289 |
Accounting Policies - Schedul_2
Accounting Policies - Schedule of Fair Value of Financial Instruments Reconciliation (Details) | 6 Months Ended |
Dec. 31, 2020USD ($) | |
Beginning balance | $ 1,300,289 |
Additions | 356,059 |
Amortization during the period | 41,286 |
Transfers to short term | (1,341,575) |
Ending balance | 356,059 |
Revenues in Excess of Billings - Long Term [Member] | |
Beginning balance | 1,341,575 |
Additions | 376,874 |
Amortization during the period | |
Transfers to short term | (1,341,575) |
Ending balance | 376,874 |
Fair Value Discount [Member] | |
Beginning balance | (41,286) |
Additions | (20,815) |
Amortization during the period | 41,286 |
Transfers to short term | |
Ending balance | $ (20,815) |
Accounting Policies - Schedul_3
Accounting Policies - Schedule of the Impact of Adopting Topic 326 (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Allowance for credit losses - accounts receivable | $ 308,236 | $ 435,611 |
Allowance for credit losses - accounts receivable - related party | 1,282,505 | |
Allowance for credit losses - revenue in excess of billings - related party | 8,163 | 0 |
Allowance for credit losses - convertible notes receivable - related party | 4,250,000 | 0 |
Allowance for credit losses - other current assets | 1,243,633 | $ 0 |
Adjustments [Member] | ||
Allowance for credit losses - accounts receivable | 109,486 | |
Allowance for credit losses - accounts receivable - related party | 1,282,505 | |
Allowance for credit losses - revenue in excess of billings - related party | 8,163 | |
Allowance for credit losses - convertible notes receivable - related party | 4,250,000 | |
Allowance for credit losses - other current assets | 1,134,146 | |
Assets allowance | $ 6,784,300 |
Revenue Recognition (Details Na
Revenue Recognition (Details Narrative) | 3 Months Ended | 6 Months Ended |
Dec. 31, 2020USD ($) | Dec. 31, 2020USD ($) | |
Revenue Recognition and Deferred Revenue [Abstract] | ||
Deferred revenue, revenue recognized | $ 762,484 | $ 3,790,120 |
Contracted but unsatisfied performance obligations | 48,262,490 | 48,262,490 |
Contracted but unsatisfied performance obligations, next twelve months | $ 12,922,159 | $ 12,922,159 |
Estimated revenue recognized term | 5 years |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregated Revenue by Category (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Total net revenues | $ 13,121,460 | $ 15,690,019 | $ 25,768,838 | $ 29,262,435 |
License Fees [Member] | ||||
Total net revenues | 2,586,504 | 176,706 | 2,589,979 | 2,640,922 |
Subscription and Support [Member] | ||||
Total net revenues | 5,724,802 | 5,104,736 | 10,896,665 | 9,711,112 |
Services [Member] | ||||
Total net revenues | 4,810,154 | 10,351,153 | 12,282,194 | 16,770,044 |
Services - Related Party [Member] | ||||
Total net revenues | 57,424 | 140,357 | ||
Core Revenue [Member] | ||||
Total net revenues | 11,502,681 | 13,966,793 | 22,550,957 | 25,746,587 |
Core Revenue [Member] | License Fees [Member] | ||||
Total net revenues | 2,586,504 | 176,706 | 2,589,979 | 2,640,922 |
Core Revenue [Member] | Subscription and Support [Member] | ||||
Total net revenues | 5,724,802 | 5,104,736 | 10,896,665 | 9,711,112 |
Core Revenue [Member] | Services [Member] | ||||
Total net revenues | 3,191,375 | 8,627,927 | 9,064,313 | 13,254,196 |
Core Revenue [Member] | Services - Related Party [Member] | ||||
Total net revenues | 57,424 | 140,357 | ||
Non-Core Revenue [Member] | ||||
Total net revenues | 1,618,779 | 1,723,226 | 3,217,881 | 3,515,848 |
Non-Core Revenue [Member] | Services [Member] | ||||
Total net revenues | $ 1,618,779 | $ 1,723,226 | $ 3,217,881 | $ 3,515,848 |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Revenues in Excess of Billings and Deferred Revenue (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Revenue Recognition and Deferred Revenue [Abstract] | ||
Revenues in excess of billings | $ 13,646,069 | $ 18,506,733 |
Deferred Revenue | $ 3,753,781 | $ 4,095,472 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Components of Basic and Diluted Earnings Per Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) available to common shareholders, Net Income (loss) | $ (242,104) | $ 585,975 | $ 475,450 | $ (1,241,972) |
Net income (loss) available to common shareholders, Shares | 11,580,030 | 11,724,606 | 11,683,631 | 11,694,423 |
Net income (loss) available to common shareholders, Per Share | $ (0.02) | $ 0.05 | $ 0.04 | $ (0.11) |
Effect of dilutive securities Share grants, Shares | ||||
Diluted income (loss) per share, Net Income | $ (242,104) | $ 585,975 | $ 475,450 | $ (1,241,972) |
Diluted income (loss) per share, Shares | 11,580,030 | 11,724,606 | 11,683,631 | 11,694,423 |
Diluted income (loss) per share, Per Share | $ (0.02) | $ 0.05 | $ 0.04 | $ (0.11) |
Earnings Per Share - Schedule_2
Earnings Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive securities excluded from computation of earnings per share, amount | 41,112 | 160,307 | 41,112 | 160,307 |
Stock Options [Member] | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 40,386 | 40,386 | ||
Share Grants [Member] | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 41,112 | 119,921 | 41,112 | 119,921 |
Other Comprehensive Income an_2
Other Comprehensive Income and Foreign Currency (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | |
VLSVLHS And VLSIL Combined [Member] | |||||
Accumulated other comprehensive loss | $ (32,060,151) | $ (32,060,151) | $ (34,085,047) | ||
Net translation adjustment | $ 1,150,080 | $ 1,765,029 | $ 2,024,896 | $ 2,668,374 |
Major Customers (Details Narrat
Major Customers (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | |
Revenue | $ 13,121,460 | $ 15,690,019 | $ 25,768,838 | $ 29,262,435 | |
Revenues in excess of billings | 13,290,010 | 13,290,010 | $ 17,198,281 | ||
Revenue in excess of billing - long term | 356,059 | 356,059 | 1,300,289 | ||
Daimler Financial Services (DFS) [Member] | |||||
Revenue | $ 5,402,152 | $ 8,691,233 | |||
Concentration risk, percentage | 21.00% | 29.70% | |||
Revenues in excess of billings | 6,800,273 | $ 6,800,273 | 5,709,226 | ||
Daimler Financial Services (DFS) [Member] | Accounts Receivable [Member] | |||||
Accounts receivable, gross | 1,263,670 | 1,263,670 | 4,821,468 | ||
BMW Financial (BMW) [Member] | |||||
Revenue | $ 3,051,244 | $ 4,793,304 | |||
Concentration risk, percentage | 11.80% | 16.40% | |||
Revenues in excess of billings | 1,084,396 | $ 1,084,396 | 6,977,375 | ||
BMW Financial (BMW) [Member] | Accounts Receivable [Member] | |||||
Accounts receivable, gross | $ 22,697 | $ 22,697 | $ 474,271 |
Convertible Notes Receivable _3
Convertible Notes Receivable - Related Party (Details Narrative) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 | Aug. 19, 2019 | Apr. 02, 2019 | Feb. 09, 2018 | May 25, 2017 |
Convertible note, interest rate | 10.00% | 10.00% | 10.00% | 5.00% | ||
Accrued interest | $ 701,062 | $ 701,062 | $ 32,439 | $ 57,648 | $ 500,773 | $ 110,202 |
WRLD3D [Member] | Minimum [Member] | ||||||
Convertible note, interest rate | 5.00% | |||||
WRLD3D [Member] | Maximum [Member] | ||||||
Convertible note, interest rate | 10.00% |
Convertible Notes Receivable _4
Convertible Notes Receivable - Related Party - Schedule of Convertible Notes (Details) - USD ($) | Aug. 19, 2019 | Apr. 02, 2019 | Feb. 09, 2018 | May 25, 2017 | Dec. 31, 2020 | Jun. 30, 2020 |
Receivables [Abstract] | ||||||
Interest Rate | 10.00% | 10.00% | 10.00% | 5.00% | ||
Maturity Date | Mar. 31, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 2, 2018 | ||
Convertible Note Amount | $ 400,000 | $ 600,000 | $ 2,500,000 | $ 750,000 | $ 4,250,000 | |
Accrued Interest | $ 32,439 | $ 57,648 | $ 500,773 | $ 110,202 | 701,062 | $ 701,062 |
Less allowance for doubtful account | (4,250,000) | |||||
Less allowance for doubtful account, Accrued Interest | (701,062) | |||||
Net Balance | ||||||
Net Balance, Accrued Interest |
Other Current Assets - Schedule
Other Current Assets - Schedule of Other Current Assets (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid Expenses | $ 1,243,439 | $ 1,035,415 |
Advance Income Tax | 332,023 | 355,482 |
Employee Advances | 199,503 | 44,415 |
Security Deposits | 280,611 | 270,403 |
Other Receivables | 112,612 | 1,239,221 |
Other Assets | 227,797 | 163,244 |
Total | $ 2,395,985 | $ 3,108,180 |
Revenues in Excess of Billing_3
Revenues in Excess of Billings - Long Term (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | |
Contractors [Abstract] | |||||
Interest income | $ 27,766 | $ 13,821 | $ 41,826 | $ 27,681 | |
Interest rate discount | 4.65% | 4.35% |
Revenues in Excess of Billing_4
Revenues in Excess of Billings - Long Term - Schedule of Revenues in Excess of Billings (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Contractors [Abstract] | ||
Revenues in excess of billings - long term | $ 376,874 | $ 1,341,575 |
Present value discount | (20,815) | (41,286) |
Net Balance | $ 356,059 | $ 1,300,289 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 485,456 | $ 484,662 | $ 981,723 | $ 950,113 |
Depreciation reflected in cost of revenues | $ 263,884 | $ 269,183 | $ 538,361 | $ 532,247 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 35,309,090 | $ 32,618,499 |
Accumulated Depreciation | (23,099,590) | (21,288,868) |
Property and Equipment, Net | 12,209,500 | 11,329,631 |
Office Furniture and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 3,213,526 | 3,143,833 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 21,331,085 | 19,256,543 |
Assets Under Capital Leases [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 1,511,557 | 1,443,423 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 6,123,262 | 5,848,813 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 1,586,153 | 1,512,905 |
Capital Work In Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 30,079 | 27,648 |
Autos [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 1,475,366 | 1,348,405 |
Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 38,062 | $ 36,929 |
Property and Equipment - Summar
Property and Equipment - Summary of Fixed Assets Held Under Capital Leases (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Capital Leased Assets [Line Items] | ||
Fixed assets held under finance leases, Total | $ 1,511,557 | $ 1,443,423 |
Less: Accumulated Depreciation - Net | (736,767) | (667,096) |
Fixed assets held under finance leases, Total | 774,790 | 776,327 |
Computers and Other Equipment [Member] | ||
Capital Leased Assets [Line Items] | ||
Fixed assets held under finance leases, Total | 362,337 | 328,621 |
Furniture and Fixtures [Member] | ||
Capital Leased Assets [Line Items] | ||
Fixed assets held under finance leases, Total | 56,722 | 51,119 |
Vehicles [Member] | ||
Capital Leased Assets [Line Items] | ||
Fixed assets held under finance leases, Total | $ 1,092,498 | $ 1,063,683 |
Property and Equipment - Sche_2
Property and Equipment - Schedule of Finance Lease Term (Details) | Dec. 31, 2020 |
Property, Plant and Equipment [Abstract] | |
Weighted average remaining lease term - Finance leases | 1 year 4 days |
Weighted average discount rate - Finance leases | 7.60% |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Lease Agreement [Member] | ||||
Operating lease termination, description | The Company is a lessor for certain office space leased by the Company and sub-leased to others under non-cancelable leases. These lease agreements provide for a fixed base rent and terminate by July 2021. All leases are considered operating leases. There are no rights to purchase the premises and no residual value guarantees. | |||
Operating lease income | $ 8,738 | $ 8,514 | $ 17,362 | $ 16,713 |
Minimum [Member] | ||||
Finance lease term | 1 year | 1 year | ||
Operating lease term | 1 year | 1 year | ||
Maximum [Member] | ||||
Finance lease term | 10 years | 10 years | ||
Operating lease term | 10 years | 10 years |
Leases - Schedule of Balance Sh
Leases - Schedule of Balance Sheet Information Related to Leases (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Operating lease assets, net | $ 1,937,907 | $ 2,360,129 |
Lease Liabilities [Member] | ||
Operating lease assets, net | 1,937,907 | 2,360,129 |
Operating lease liability, Current | 1,169,960 | 1,111,912 |
Operating lease liability, Non-current | 962,724 | 1,339,965 |
Total Lease Liabilities | $ 2,132,684 | $ 2,451,877 |
Leases - Schedule of Components
Leases - Schedule of Components of Lease Cost (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||||
Amortization of finance lease assets | $ 31,926 | $ 108,670 | $ 77,179 | $ 135,000 |
Interest on finance lease obligation | 6,953 | 29,413 | 18,645 | 52,331 |
Operating lease cost | 310,740 | 334,492 | 630,826 | 598,069 |
Short term lease cost | 13,493 | 78,862 | 30,071 | 152,972 |
Sub lease income | (8,738) | (8,514) | (17,362) | (16,713) |
Total lease cost | $ 354,374 | $ 542,923 | $ 739,359 | $ 921,659 |
Leases - Schedule of Lease Term
Leases - Schedule of Lease Term and Discount Rate (Details) | Dec. 31, 2020 |
Leases [Abstract] | |
Weighted average remaining lease term - Operating leases | 2 years 29 days |
Weighted average discount rate - Operating leases | 5.60% |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Disclosures of Cash Flow Information Related to Leases (Details) - USD ($) | 6 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating cash flows related to operating leases | $ 529,970 | $ 566,589 |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating Lease Liabilities (Details) - Lease Liabilities [Member] - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Within year 1 | $ 1,249,702 | |
Within year 2 | 734,691 | |
Within year 3 | 222,387 | |
Within year 4 | 42,317 | |
Within year 5 | 824 | |
Thereafter | 2,882 | |
Total Lease Payments | 2,252,803 | |
Less: Imputed interest | (120,119) | |
Present Value of lease liabilities | 2,132,684 | $ 2,451,877 |
Less: Current portion | (1,169,960) | (1,111,912) |
Non-Current portion | $ 962,724 | $ 1,339,965 |
Long Term Investment (Details N
Long Term Investment (Details Narrative) - USD ($) | Apr. 25, 2019 | Sep. 02, 2017 | Mar. 02, 2017 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2020 |
Share of net income loss from equity investment | $ (43,685) | $ (164,796) | $ (151,535) | $ (354,020) | ||||
Payments to acquire investment | 93,000 | |||||||
NetSol PK [Member] | ||||||||
Revenue from services | 57,424 | 140,357 | ||||||
Share of net income loss from equity investment | 47,009 | 158,940 | 155,454 | 342,772 | ||||
Payments to acquire investment | $ 2,777,778 | |||||||
Purchase of investment, percentage | 12.20% | |||||||
Accounts receivable | $ 1,373,099 | |||||||
Revenues in excess of billings - related party | $ 8,163 | |||||||
WRLD3D [Member] | ||||||||
Payments for financial interest | $ 1,111,111 | |||||||
Payments to acquire investment | $ 555,555 | $ 555,556 | ||||||
WRLD3D [Member] | ||||||||
Percentage of interest in subsidiary | 4.90% | |||||||
Drivemate Agreement [Member] | Drivemate Co., Ltd. [Member] | ||||||||
Equity interest, percentage | 30.00% | |||||||
Number of shares purchased | 5,469 | |||||||
Number of shares purchased, value | $ 1,800,000 | |||||||
Revenue from services | 303,101 | 507,716 | ||||||
Share of net income loss from equity investment | $ 3,324 | $ 5,856 | $ 3,919 | $ 11,248 | ||||
Drivemate Agreement [Member] | Drivemate Co., Ltd. [Member] | Four Directors [Member] | ||||||||
Equity interest, percentage | 21.47% | 21.47% | ||||||
Debt description | The Company determined that it met the significant influence criteria since two of the four directors are appointed by the Company and the Company is to own 30% of Drivemate at the final payment date; therefore, the Company accounts for the investment using the equity method of accounting. | |||||||
Drivemate Agreement [Member] | Drivemate Co., Ltd. [Member] | Payment [Member] | ||||||||
Number of shares purchased | 5,217 | |||||||
Drivemate Agreement [Member] | Drivemate Co., Ltd. [Member] | Final Payment [Member] | ||||||||
Number of shares purchased, value | $ 62,500 | |||||||
Drivemate Agreement [Member] | Drivemate Co., Ltd. [Member] | Services [Member] | ||||||||
Number of shares purchased, value | 1,300,000 | |||||||
Drivemate Agreement [Member] | Drivemate Co., Ltd. [Member] | Services [Member] | Payment [Member] | ||||||||
Number of shares purchased, value | 1,300,000 | |||||||
Drivemate Agreement [Member] | Drivemate Co., Ltd. [Member] | Cash [Member] | ||||||||
Number of shares purchased, value | 500,000 | |||||||
Drivemate Agreement [Member] | Drivemate Co., Ltd. [Member] | Cash [Member] | Payment [Member] | ||||||||
Number of shares purchased, value | $ 437,500 |
Long Term Investment - Schedule
Long Term Investment - Schedule of Long Term Investment (Details) | 6 Months Ended |
Dec. 31, 2020USD ($) | |
Gross investment | $ 5,626,389 |
Cumulative net loss on investment | (1,462,224) |
Cumulative other comprehensive income (loss) | (429,258) |
Net investment | 3,734,907 |
Drivemate Co., Ltd. [Member] | |
Gross investment | 1,737,500 |
Cumulative net loss on investment | (16,537) |
Cumulative other comprehensive income (loss) | |
Net investment | 1,720,963 |
WRLD3D, Inc. [Member] | |
Gross investment | 3,888,889 |
Cumulative net loss on investment | (1,445,687) |
Cumulative other comprehensive income (loss) | (429,258) |
Net investment | $ 2,013,944 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | |
Intangible assets, net | $ 4,753,543 | $ 4,753,543 | $ 5,391,077 | ||
Product Licenses [Member] | |||||
Intangible assets, net | 4,753,543 | $ 4,753,543 | |||
Finite-lived intangible assets, amortization over period | 2 years 9 months | ||||
Amortization expenses of intangible assets | $ 449,865 | $ 465,169 | $ 882,637 | $ 921,770 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Product Licenses - Cost | $ 47,244,997 | $ 47,244,997 |
Effect of Translation Adjustment | (14,779,667) | (16,045,322) |
Accumulated Amortization | (27,711,787) | (25,808,598) |
Net Balance | $ 4,753,543 | $ 5,391,077 |
Intangible Assets - Summary of
Intangible Assets - Summary of Estimated Amortization Expense of Intangible Assets (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
December 31, 2021 | $ 1,814,714 | |
December 31, 2022 | 1,814,714 | |
December 31, 2023 | 1,124,115 | |
Net Balance | $ 4,753,543 | $ 5,391,077 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Payables and Accruals [Abstract] | ||
Accounts Payable | $ 1,329,315 | $ 1,351,158 |
Accrued Liabilities | 4,058,567 | 3,349,624 |
Accrued Payroll & Taxes | 485,642 | 537,888 |
Taxes Payable | 276,305 | 303,996 |
Other Payable | 177,363 | 138,171 |
Total | $ 6,327,192 | $ 5,680,837 |
Debts - Schedule of Components
Debts - Schedule of Components of Notes Payable and Finance Leases (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 | |
Total | $ 11,454,627 | $ 10,210,130 | |
Current Maturities | 9,960,714 | 8,847,487 | |
Long-Term Maturities | 1,493,913 | 1,362,643 | |
Subsidiary Finance Leases, Total | [1] | 483,262 | 469,406 |
Subsidiary Finance Leases, Current Maturities | [1] | 422,858 | 292,074 |
Subsidiary Finance Leases, Long-Term Maturities | [1] | 60,404 | 177,332 |
Total | 11,937,889 | 10,679,536 | |
Current Maturities | 10,383,572 | 9,139,561 | |
Long-Term Maturities | 1,554,317 | 1,539,975 | |
D&O Insurance [Member] | |||
Total | [2] | 142,582 | 81,728 |
Current Maturities | [2] | 142,582 | 81,728 |
Long-Term Maturities | [2] | ||
Paycheck Protection Program Loans [Member] | |||
Total | [3] | 469,721 | 469,721 |
Current Maturities | [3] | 339,243 | 182,669 |
Long-Term Maturities | [3] | 130,478 | 287,052 |
Bank Overdraft Facility [Member] | |||
Total | [4] | ||
Current Maturities | [4] | ||
Long-Term Maturities | [4] | ||
Term Finance Facility [Member] | |||
Total | [5] | 2,168,714 | 1,380,878 |
Current Maturities | [5] | 850,166 | 354,337 |
Long-Term Maturities | [5] | 1,318,548 | 1,026,541 |
Loan Payable Bank - Export Refinance [Member] | |||
Total | [6] | 3,119,541 | 2,975,482 |
Current Maturities | [6] | 3,119,541 | 2,975,482 |
Long-Term Maturities | [6] | ||
Loan Payable Bank - Running Finance [Member] | |||
Total | [7] | ||
Current Maturities | [7] | ||
Long-Term Maturities | [7] | ||
Loan Payable Bank - Export Refinance II [Member] | |||
Total | [8] | 2,370,850 | 2,261,365 |
Current Maturities | [8] | 2,370,850 | 2,261,365 |
Long-Term Maturities | [8] | ||
Loan Payable Bank - Running Finance II [Member] | |||
Total | [9] | ||
Current Maturities | [9] | ||
Long-Term Maturities | [9] | ||
Loan Payable Bank - Export Refinance lll [Member] | |||
Total | [10] | 3,119,542 | 2,975,483 |
Current Maturities | [10] | 3,119,542 | 2,975,483 |
Long-Term Maturities | [10] | ||
Term Finance Facility [Member] | |||
Total | [11] | 63,677 | 65,473 |
Current Maturities | [11] | 18,790 | 16,423 |
Long-Term Maturities | [11] | $ 44,887 | $ 49,050 |
[1] | The Company leases various fixed assets under finance lease arrangements expiring in various years through 2024. The assets and liabilities under finance 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 finance leases is included in depreciation expense for the three and six months ended December 31, 2020 and 2019. | ||
[2] | 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 5.0% to 7.0% as of December 31, 2020 and June 30, 2020. | ||
[3] | The Company and its subsidiary, NTA, received Paycheck Protection Program loans of $469,721 introduced by the U.S. Government during the COVID-19 Pandemic. This loan is forgivable if the Company meets the criteria set by the U.S. Government. The loans carry an interest rate of 1% and have a maturity date of two years from the date of the disbursement of the loan. As of December 31, 2020, the Company has not applied for the loan forgiveness. | ||
[4] | 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 $410,959. The annual interest rate was 5.12% as of December 31, 2020. The total outstanding balance as of December 31, 2020 was £Nil. 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 December 31, 2020, NTE was in compliance with this covenant. | ||
[5] | The Company's subsidiary, NetSol PK, has a term finance facility from Askari Bank Limited, approved by the Government of Pakistan to protect the employment situation during the Pandemic COVID-19. This is a term loan payable in three years. The availed facility amount was Rs. 347,601,639 or $2,168,714, at December 31, 2020, of which $850,166 is shown as current and the remaining $1,318,548 is shown as long term. The availed facility amount was Rs. 232,042,664 or $1,380,878, at June 30, 2020, of which $354,337 is shown as current and the remaining $1,026,541 is shown as long term. The interest rate for the loan was 3% at December 31, 2020 and June 30, 2020. | ||
[6] | 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 nine months. The total facility amount is Rs. 500,000,000 or $3,119,541 at December 31, 2020 and Rs. 500,000,000 or $2,975,482 at June 30, 2020. The interest rate for the loan was 3% at December 31, 2020 and June 30, 2020. | ||
[7] | The Company's subsidiary, NetSol PK, has a running finance facility with Askari Bank Limited, secured by NetSol PK's assets. The total facility amount is Rs. 75,000,000 or $467,931, at December 31, 2020. The balance outstanding at December 31, 2020 and June 30, 2020 was Rs. Nil. The interest rate for the loan was 9.29% and 7.2% at December 31, 2020 and June 30, 2020, respectively. This facility requires NetSol PK to maintain a long-term debt equity ratio of 60:40 and the current ratio of 1:1. As of December 31, 2020, NetSol PK was in compliance with this covenant. | ||
[8] | 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 nine months. The total facility amount is Rs. 380,000,000 or $2,370,851 and Rs. 380,000,000 or $2,261,366 at December 31, 2020 and June 30, 2020, respectively. The interest rate for the loan was 3% at December 31, 2020 and June 30, 2020. | ||
[9] | The Company's subsidiary, NetSol PK, has a running finance facility with Samba Bank Limited, secured by NetSol PK's assets. The total facility amount is Rs. 120,000,000 or $748,690 and Rs. 120,000,000 or $714,116, at December 31, 2020 and June 30, 2020, respectively. The interest rate for the loan was 8.79% and 7.7% at December 31, 2020 and June 30, 2020, respectively. The balance outstanding at December 31, 2020 and June 30, 2020 was Rs. Nil. 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 December 31, 2020, NetSol PK was in compliance with these covenants. | ||
[10] | The Company's subsidiary, NetSol PK, has an export refinance facility with Habib Metro Bank Limited, secured by NetSol PK's assets. This is a revolving loan that matures every nine months. The total facility amount is Rs. 900,000,000 or $5,615,173 and NetSol PK used Rs. 500,000,000 or $3,119,541 at December 31, 2020. The total facility amount is Rs. 900,000,000 or $5,355,868 and NetSol PK used Rs. 500,000,000 or $2,975,482 at June 30, 2020. The interest rate for the loan was 3% at December 31, 2020 and June 30, 2020. | ||
[11] | In March 2019, the Company's subsidiary, VLS, entered into a loan agreement. The loan amount was £69,549, or $95,273, for a period of 5 years with monthly payments of £1,349, or $1,848. As of December 31, 2020, the subsidiary has used this facility up to $63,677, of which $44,887 was shown as long-term and $18,790 as current. The interest rate was 6.14% at December 31, 2020. |
Debts - Schedule of Component_2
Debts - Schedule of Components of Notes Payable and Finance Leases (Details) (Parenthetical) | 1 Months Ended | 6 Months Ended | ||||||||||
Mar. 31, 2019USD ($) | Mar. 31, 2019GBP (£) | Dec. 31, 2020USD ($) | Dec. 31, 2020GBP (£) | Dec. 31, 2020INR (₨) | Jun. 30, 2020USD ($) | Jun. 30, 2020INR (₨) | Aug. 19, 2019 | Apr. 02, 2019 | Mar. 31, 2019GBP (£) | Feb. 09, 2018 | May 25, 2017 | |
Debt instrument, interest rate | 10.00% | 10.00% | 10.00% | 5.00% | ||||||||
HSBC Bank [Member] | NetSol PK Asia - Pacific [Member] | ||||||||||||
Debt instrument, interest rate | 5.12% | 5.12% | 5.12% | |||||||||
Line of credit facility, maximum borrowing capacity | $ 410,959 | |||||||||||
Line of credit variable interest rate | 200.00% | |||||||||||
HSBC Bank [Member] | NetSol PK Asia - Pacific [Member] | GBP [Member] | ||||||||||||
Line of credit facility, maximum borrowing capacity | £ | £ 300,000 | |||||||||||
Line of credit | £ | ||||||||||||
Askari Bank Limited [Member] | NetSol PK [Member] | ||||||||||||
Debt instrument, interest rate | 3.00% | 3.00% | 3.00% | 3.00% | 3.00% | |||||||
Line of credit facility, maximum borrowing capacity | $ 3,119,541 | $ 2,975,482 | ||||||||||
Askari Bank Limited [Member] | NetSol PK [Member] | Refinance Facility [Member] | ||||||||||||
Debt instrument, interest rate | 3.00% | 3.00% | 3.00% | 3.00% | 3.00% | |||||||
Line of credit facility, maximum borrowing capacity | $ 2,168,714 | $ 1,380,878 | ||||||||||
Line of credit | 1,318,548 | 1,026,541 | ||||||||||
Line of credit, current | $ 850,166 | $ 354,337 | ||||||||||
Askari Bank Limited [Member] | NetSol PK [Member] | Running Finance Facility [Member] | ||||||||||||
Debt instrument, interest rate | 9.29% | 9.29% | 9.29% | 7.20% | 7.20% | |||||||
Line of credit facility, maximum borrowing capacity | $ 467,931 | $ 467,931 | ||||||||||
Line of credit | ||||||||||||
Long term debt covenant description | This facility requires NetSol PK to maintain a long-term debt equity ratio of 60:40 and the current ratio of 1:1. | |||||||||||
Askari Bank Limited [Member] | NetSol PK [Member] | INR [Member] | ||||||||||||
Line of credit facility, maximum borrowing capacity | ₨ | ₨ 500,000,000 | ₨ 500,000,000 | ||||||||||
Askari Bank Limited [Member] | NetSol PK [Member] | INR [Member] | Refinance Facility [Member] | ||||||||||||
Line of credit facility, maximum borrowing capacity | ₨ | 347,601,639 | 232,042,664 | ||||||||||
Askari Bank Limited [Member] | NetSol PK [Member] | INR [Member] | Running Finance Facility [Member] | ||||||||||||
Line of credit facility, maximum borrowing capacity | ₨ | ₨ 75,000,000 | ₨ 75,000,000 | ||||||||||
Samba Bank Limited [Member] | NetSol PK [Member] | Refinance Facility [Member] | ||||||||||||
Debt instrument, interest rate | 3.00% | 3.00% | 3.00% | 3.00% | 3.00% | |||||||
Line of credit facility, maximum borrowing capacity | $ 2,370,851 | $ 2,261,366 | ||||||||||
Samba Bank Limited [Member] | NetSol PK [Member] | Running Finance Facility [Member] | ||||||||||||
Debt instrument, interest rate | 8.79% | 8.79% | 8.79% | 7.70% | 7.70% | |||||||
Line of credit facility, maximum borrowing capacity | $ 748,690 | $ 714,116 | ||||||||||
Line of credit | ||||||||||||
Long term debt covenant description | 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. | |||||||||||
Samba Bank Limited [Member] | NetSol PK [Member] | INR [Member] | Refinance Facility [Member] | ||||||||||||
Line of credit facility, maximum borrowing capacity | ₨ | ₨ 380,000,000 | ₨ 380,000,000 | ||||||||||
Samba Bank Limited [Member] | NetSol PK [Member] | INR [Member] | Running Finance Facility [Member] | ||||||||||||
Line of credit facility, maximum borrowing capacity | ₨ | ₨ 120,000,000 | ₨ 120,000,000 | ||||||||||
Habib Metro Bank Limited [Member] | Running Finance Facility [Member] | ||||||||||||
Debt instrument, interest rate | 3.00% | 3.00% | 3.00% | 3.00% | 3.00% | |||||||
Line of credit facility, maximum borrowing capacity | $ 5,615,173 | $ 5,355,868 | ||||||||||
Habib Metro Bank Limited [Member] | INR [Member] | Running Finance Facility [Member] | ||||||||||||
Line of credit facility, maximum borrowing capacity | ₨ | ₨ 900,000,000 | ₨ 900,000,000 | ||||||||||
Habib Metro Bank Limited [Member] | NetSol PK [Member] | Running Finance Facility [Member] | ||||||||||||
Debt instrument, interest rate | 3.00% | 3.00% | 3.00% | 3.00% | 3.00% | |||||||
Line of credit facility, maximum borrowing capacity | $ 3,119,541 | $ 2,975,482 | ||||||||||
Habib Metro Bank Limited [Member] | NetSol PK [Member] | INR [Member] | Running Finance Facility [Member] | ||||||||||||
Line of credit facility, maximum borrowing capacity | ₨ | ₨ 500,000,000 | ₨ 500,000,000 | ||||||||||
Paycheck Protection Program [Member] | ||||||||||||
Proceeds from loan | $ 469,721 | |||||||||||
Debt instrument, interest rate | 1.00% | 1.00% | 1.00% | |||||||||
Loan Agreement [Member] | Virtual Lease Services Limited [Member] | ||||||||||||
Debt instrument, interest rate | 6.14% | 6.14% | 6.14% | |||||||||
Line of credit facility, maximum borrowing capacity | $ 63,677 | |||||||||||
Line of credit, current | 18,790 | |||||||||||
Long term liabilities | $ 44,887 | |||||||||||
Loan Agreement [Member] | Virtual Lease Services Limited [Member] | Investec Asset Finance [Member] | ||||||||||||
Line of credit | $ 95,273 | |||||||||||
Line of credit, term | 5 years | 5 years | ||||||||||
Line of credit monthly payments | $ 1,848 | |||||||||||
Loan Agreement [Member] | Virtual Lease Services Limited [Member] | GBP [Member] | Investec Asset Finance [Member] | ||||||||||||
Line of credit | £ | £ 69,549 | |||||||||||
Line of credit monthly payments | £ | £ 1,349 | |||||||||||
Directors and Officers Errors and Omissions Liability Insurance [Member] | Minimum [Member] | ||||||||||||
Line of credit facility interest rate | 5.00% | 5.00% | 5.00% | 5.00% | 5.00% | |||||||
Directors and Officers Errors and Omissions Liability Insurance [Member] | Maximum [Member] | ||||||||||||
Line of credit facility interest rate | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% |
Debts - Schedule of Aggregate M
Debts - Schedule of Aggregate Minimum Future Lease Payments Under Finance Leases (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Present Value of minimum lease payments | $ 11,937,889 | $ 10,679,536 |
Less: Current portion | (10,383,572) | (9,139,561) |
Non-Current portion | 1,554,317 | $ 1,539,975 |
Lease Liabilities [Member] | ||
Within year 1 | 433,875 | |
Within year 2 | 37,913 | |
Within year 3 | 22,027 | |
Within year 4 | 3,671 | |
Total Minimum Lease Payments | 497,486 | |
Interest Expense relating to future periods | (14,224) | |
Present Value of minimum lease payments | 483,262 | |
Less: Current portion | (422,858) | |
Non-Current portion | $ 60,404 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2020 | |
Issuance of common stock value for services | $ 58,668 | $ 87,013 | $ 145,795 | $ 342,781 | |
Officers [Member] | |||||
Issuance of common stock shares for services | 3,020 | 6,040 | |||
Issuance of common stock value for services | $ 17,068 | $ 34,136 | |||
Independent Members [Member] | |||||
Issuance of common stock shares for services | 1,983 | ||||
Issuance of common stock value for services | $ 11,997 | ||||
Employees [Member] | |||||
Issuance of common stock | 7,393 | 17,286 | |||
Issuance of common stock, value | $ 41,600 | $ 99,548 |
Incentive and Non-Statutory S_3
Incentive and Non-Statutory Stock Option Plan (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Compensation expense | $ 74,167 | $ 164,292 | $ 165,164 | $ 328,585 |
2021 Through 2022 [Member] | ||||
Compensation expense related to unvested options yet to be recognized | $ 208,445 | $ 208,445 |
Incentive and Non-Statutory S_4
Incentive and Non-Statutory Stock Option Plan - Summary of Unvested Stock Grants Awarded as Compensation (Details) | 6 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of shares, Unvested beginning balance | shares | 66,421 |
Number of shares, Vested | shares | (25,309) |
Number of shares, Unvested ending balance | shares | 41,112 |
Weighted Average Grant Date Fair Value, Unvested beginning balance | $ / shares | $ 5.88 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 5.76 |
Weighted Average Grant Date Fair Value, Unvested ending balance | $ / shares | $ 5.75 |
Operating Segments (Details Nar
Operating Segments (Details Narrative) | 6 Months Ended |
Dec. 31, 2020Number | |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
Operating Segments - Summary of
Operating Segments - Summary of Identifiable Assets (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Identifiable assets | $ 85,458,920 | $ 88,473,089 |
Corporate Headquarters [Member] | ||
Identifiable assets | 3,814,916 | 4,508,724 |
North America [Member] | ||
Identifiable assets | 6,073,162 | 5,949,653 |
Europe [Member] | ||
Identifiable assets | 11,617,067 | 10,856,814 |
Asia - Pacific [Member] | ||
Identifiable assets | $ 63,953,775 | $ 67,157,898 |
Operating Segments - Summary _2
Operating Segments - Summary of Investment Under Equity Method (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Equity method investments | $ 3,734,907 | $ 5,626,389 |
Corporate Headquarters [Member] | ||
Equity method investments | 424,504 | 473,692 |
Asia - Pacific [Member] | ||
Equity method investments | $ 3,310,403 | $ 1,914,000 |
Operating Segments - Summary _3
Operating Segments - Summary of Operating Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues | $ 13,121,460 | $ 15,690,019 | $ 25,768,838 | $ 29,262,435 |
Net income (loss) after taxes and before non-controlling interest | (79,188) | 546,936 | 1,044,289 | (1,714,323) |
Intercompany Revenue [Member] | ||||
Revenues | 3,252,486 | 2,669,838 | 5,550,270 | 3,881,429 |
North America [Member] | ||||
Net income (loss) after taxes and before non-controlling interest | (47,019) | 154,335 | (328,816) | 96,348 |
Europe [Member] | ||||
Net income (loss) after taxes and before non-controlling interest | 173,085 | 423,649 | 776,101 | 804,743 |
Europe [Member] | Intercompany Revenue [Member] | ||||
Revenues | 126,757 | 164,401 | 265,913 | 311,226 |
Asia - Pacific [Member] | ||||
Net income (loss) after taxes and before non-controlling interest | (1,378,400) | 348,834 | (1,743,937) | (1,371,322) |
Asia - Pacific [Member] | Intercompany Revenue [Member] | ||||
Revenues | 3,125,729 | 2,505,437 | 5,284,357 | 3,570,203 |
Corporate Headquarters [Member] | ||||
Net income (loss) after taxes and before non-controlling interest | 1,173,146 | (379,882) | 2,340,941 | (1,244,092) |
Unaffiliated Customers [Member] | ||||
Revenues | 13,121,460 | 15,632,595 | 25,768,838 | 29,122,078 |
Unaffiliated Customers [Member] | North America [Member] | ||||
Revenues | 1,016,556 | 1,277,343 | 1,829,434 | 2,254,518 |
Unaffiliated Customers [Member] | Europe [Member] | ||||
Revenues | 2,726,206 | 2,842,329 | 5,878,097 | 5,434,668 |
Unaffiliated Customers [Member] | Asia - Pacific [Member] | ||||
Revenues | 9,378,698 | 11,512,923 | 18,061,307 | 21,432,892 |
Affiliated Customers [Member] | ||||
Revenues | 57,424 | 140,357 | ||
Affiliated Customers [Member] | Asia - Pacific [Member] | ||||
Revenues | $ 57,424 | $ 140,357 |
Operating Segments - Summary _4
Operating Segments - Summary of Capital Expenditures (Details) - USD ($) | 6 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Capital expenditures | $ 1,249,895 | $ 785,999 |
North America [Member] | ||
Capital expenditures | 1,521 | 2,405 |
Europe [Member] | ||
Capital expenditures | 301,233 | 329,332 |
Asia - Pacific [Member] | ||
Capital expenditures | $ 947,141 | $ 454,262 |
Non-Controlling Interest in S_3
Non-Controlling Interest in Subsidiary - Schedule of Balance of Non-Controlling Interest (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Non-Controlling Interest | $ 7,287,273 | $ 6,488,900 |
NetSol PK [Member] | ||
Non-Controlling Interest, Percentage | 33.88% | 33.88% |
Non-Controlling Interest | $ 7,165,477 | $ 6,361,747 |
NetSol-Innovation [Member] | ||
Non-Controlling Interest, Percentage | 33.88% | 33.88% |
Non-Controlling Interest | $ 133,243 | $ 128,514 |
NetSol Thai [Member] | ||
Non-Controlling Interest, Percentage | 0.006% | 0.006% |
Non-Controlling Interest | $ (262) | $ (39) |
OTOZ Thai [Member] | ||
Non-Controlling Interest, Percentage | 0.006% | 0.006% |
Non-Controlling Interest | $ (42) | $ 4 |
OTOZ [Member] | ||
Non-Controlling Interest, Percentage | 5.00% | 5.00% |
Non-Controlling Interest | $ (11,143) | $ (1,326) |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Income tax provision | $ 245,434 | $ 610,510 | $ 509,728 | $ 848,748 |
income tax provision, effective tax rate | 147.60% | 52.70% | 32.80% | (98.10%) |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - Board of Directors [Member] | 1 Months Ended |
Feb. 11, 2021$ / sharesshares | |
Number of shares repurchased | shares | 92,440 |
Average price, per share | $ / shares | $ 4.03 |