| SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES |
Notes
payable and finance leases consisted of the following:
SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES
| | |
| |
As
of September 30, 2026 | |
| | |
| |
| | |
Current | | |
Long-Term | |
| Name | |
| |
Total | | |
Maturities | | |
Maturities | |
| | |
| |
| | |
| | |
| |
| D&O Insurance | |
(1) | |
$ | 40,006 | | |
$ | 40,006 | | |
$ | - | |
| Line of Credit | |
(2) | |
| - | | |
| - | | |
| - | |
| Bank Overdraft Facility | |
(3) | |
| - | | |
| - | | |
| - | |
| Loan Payable Bank - Export Refinance | |
(4) | |
| 1,805,184 | | |
| 1,805,184 | | |
| - | |
| Loan Payable Bank - Running Finance | |
(5) | |
| - | | |
| - | | |
| - | |
| Loan Payable Bank - Export Refinance II | |
(6) | |
| - | | |
| - | | |
| | |
| Loan Payable Bank - Export Refinance III | |
(7) | |
| - | | |
| - | | |
| - | |
| Loan Payable Bank - Export Refinance IV | |
(8) | |
| 1,371,940 | | |
| 1,371,940 | | |
| - | |
| Loan Payable Bank - Export Refinance V | |
(9) | |
| 4,693,480 | | |
| 4,693,480 | | |
| - | |
| Sale and Leaseback Financing | |
(10) | |
| 320,652 | | |
| 150,971 | | |
| 169,681 | |
| | |
| |
| 8,231,262 | | |
| 8,061,581 | | |
| 169,681 | |
| Subsidiary Finance Leases | |
(11) | |
| 81,975 | | |
| 77,574 | | |
| 4,401 | |
| | |
| |
$ | 8,313,237 | | |
$ | 8,139,155 | | |
$ | 174,082 | |
| | |
| |
As
of June 30, 2026 | |
| | |
| |
| | |
Current | | |
Long-Term | |
| Name | |
| |
Total | | |
Maturities | | |
Maturities | |
| | |
| |
| | |
| | |
| |
| D&O Insurance | |
(1) | |
$ | 121,043 | | |
$ | 121,043 | | |
$ | - | |
| Line of Credit | |
(2) | |
| - | | |
| - | | |
| - | |
| Bank Overdraft Facility | |
(3) | |
| - | | |
| - | | |
| - | |
| Loan Payable Bank - Export Refinance | |
(4) | |
| 1,798,302 | | |
| 1,798,302 | | |
| - | |
| Loan Payable Bank - Running Finance | |
(5) | |
| - | | |
| - | | |
| - | |
| Loan Payable Bank - Export Refinance II | |
(6) | |
| - | | |
| - | | |
| - | |
| Loan Payable Bank - Export Refinance III | |
(7) | |
| - | | |
| - | | |
| - | |
| Loan Payable Bank - Export Refinance IV | |
(8) | |
| 1,366,710 | | |
| 1,366,710 | | |
| - | |
| Loan Payable Bank - Export Refinance V | |
(9) | |
| 4,675,586 | | |
| 4,675,586 | | |
| - | |
| Sale and Leaseback Financing | |
(10) | |
| 354,169 | | |
| 146,062 | | |
| 208,107 | |
| | |
| |
| 8,315,810 | | |
| 8,107,703 | | |
| 208,107 | |
| Subsidiary Finance Leases | |
(11) | |
| 84,342 | | |
| 79,467 | | |
| 4,875 | |
| | |
| |
$ | 8,400,152 | | |
$ | 8,187,170 | | |
$ | 212,982 | |
| (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 ranged from 7.4% to 7.8% as of September 30, 2026 and June 30, 2026. |
| (2) | | The Company has
an uncommitted discretionary demand line of credit up to an aggregate amount of $1,000,000 with HSBC, secured by a lien on the Company’s
assets. The annual interest rate was 8.0% as of September 30, 2026 and June 30, 2026. The total outstanding balance as of September 30,
2026 and June 30, 2026 was $Nil. |
NETSOL
TECHNOLOGIES, INC.
Notes
to Condensed Consolidated Financial Statements
September
30, 2026
(Unaudited)
| (3) | | The Company’s
subsidiary, NTE, has an overdraft facility with HSBC Bank plc whereby the bank would cover any overdrafts up to £300,000, or approximately
$400,000. The annual interest rate was 8.0% as of September 30, 2026 and June 30, 2026. The total outstanding balance as of September
30, 2026 and June 30, 2026 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 September 30, 2026,
NTE was in compliance with this covenant. |
| (4) | | The Company’s
subsidiary, NetSol PK, has an export refinance facility with Askari Bank Limited, secured by NetSol PK’s assets. This is a revolving
loan that matures every six months. The total facility amount is Rs. 600,000,000 or $2,166,221 at September 30, 2026 and Rs. 600,000,000
or $2,157,963 at June 30, 2026. NetSol PK used Rs. 500,000,000 or $1,805,184 at September 30, 2026 and Rs. 500,000,000 or $1,798,302
at June 30, 2026. The interest rate for the loan was 6.5% at September 30, 2026 and 4.5% at June 30, 2026. |
| | 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. 4,050,937 or $14,625 and Rs. 4,050,937 or $14,570, at September 30, 2026 and June 30, 2026, respectively. The balance outstanding
at September 30, 2026 and June 30, 2026 was Rs. Nil. The interest rate for the loan was 13.9% at September 30, 2026 and 13.8% at June
30, 2026. |
| (6) | | The Company’s
subsidiary, NetSol PK, has an export refinance facility with Bank Al-Habib Limited, secured by NetSol PK’s assets. This is a revolving
loan that matures every six months. The total facility amount is Rs. 400,000,000 or $1,444,148 at September 30, 2026. NetSol PK has not
used this facility at September 30, 2026. The interest rate for the loan was 4.5% at September 30, 2026. |
| (7) | | The Company’s
subsidiary, NetSol PK, has an export refinance facility with Bank of Punjab, secured by NetSol PK’s assets. This is a revolving
loan that matures every six months. The total facility amount is Rs. 200,000,000 or $722,074 at September 30, 2026. NetSol PK has not
used this facility at September 30, 2026. The interest rate for the loan was 4.5% at September 30, 2026. |
| | These facilities require
NetSol PK to maintain a long-term debt equity ratio of 60:40 and the current ratio of 1:1. As of September 30, 2026, 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 six months. The total facility amount is Rs. 380,000,000 or $1,371,940 and Rs. 380,000,000 or $1,366,710 at September
30, 2026 and June 30, 2026, respectively. NetSol PK used Rs. 380,000,000 or $1,371,940 and Rs. 380,000,000 or $1,366,710 at September
30, 2026 and June 30, 2026, respectively. The interest rate for the loan was 5.5% at September 30, 2026 and 4.5% at June 30, 2026. |
| | During the tenure of the
loan, the facilities from Samba Bank Limited require NetSol PK to maintain at a minimum a current ratio of 1:1, an interest coverage
ratio of 4 times, a leverage ratio of 2 times, and a debt service coverage ratio of 4 times. As of September 30, 2026, 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 six months. The total facility amount is Rs. 1,300,000,000 or $4,693,480 and Rs. 1,300,000,000 or $4,675,586,
at September 30, 2026 and June 30, 2026, respectively. NetSol PK used Rs. 1,300,000,000 or $4,693,480 and Rs. 1,300,000,000 or $4,675,586,
at September 30, 2026 and June 30, 2026, respectively. The interest rate for the loan was 5.5% at September 30, 2026 and 4.5% at June
30, 2026. |
| (10) | | The Company’s
subsidiary, NetSol PK, availed sale and leaseback financing from First Habib Modaraba secured by the transfer of the vehicles’
title. As of September 30, 2026, NetSol PK used Rs. 88,814,111 or $320,652 of which $169,681 was shown as long term and $150,971 as current.
As of June 30, 2026, NetSol PK used Rs. 98,473,095 or $354,169 of which $208,107 was shown as long-term and $146,062 as current. The
interest rate for the loan was from 11.4% to 12.3% at September 30, 2026 and June 30, 2026, respectively. |
NETSOL
TECHNOLOGIES, INC.
Notes
to Condensed Consolidated Financial Statements
September
30, 2026
(Unaudited)
| (11) | | The Company leases
various fixed assets under finance lease arrangements expiring in various years through 2029. 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 months ended
September 30, 2026 and 2025. |
|