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DEBTS
 3 Months Ended
Sep. 30, 2025
Debt Disclosure [Abstract]  
DEBTS

NOTE 12 – DEBTS

 

Notes payable and finance leases consisted of the following:

 

    As of September 30, 2025 
Name   Total   Current Maturities   Long-Term Maturities 
              
D&O Insurance (1) $23,622   $23,622   $                   - 
Line of Credit (2)  505,000    505,000    - 
Bank Overdraft Facility (3)  -    -    - 
Loan Payable Bank - Export Refinance (4)  1,770,413    1,770,413    - 
Loan Payable Bank - Running Finance (5)  -    -    - 
Loan Payable Bank - Export Refinance II (6)  -    -    - 
Loan Payable Bank - Export Refinance III (7)  1,345,514    1,345,514    - 
Loan Payable Bank - Export Refinance IV (8)  4,603,073    4,603,073    - 
Sale and Leaseback Financing (9)  203,906    68,923    134,983 
Short Term Financing (10)  -    -    - 
     8,451,528    8,316,545    134,983 
Subsidiary Finance Leases (11)  96,885    13,698    83,187 
    $8,548,413   $8,330,243   $218,170 

 

    As of June 30, 2025 
Name   Total   Current Maturities   Long-Term Maturities 
              
D&O Insurance (1) $119,542   $119,542   $                      - 
Line of Credit (2)  405,000    405,000    - 
Bank Overdraft Facility (3)  -    -    - 
Loan Payable Bank - Export Refinance (4)  1,759,634    1,759,634    - 
Loan Payable Bank - Running Finance (5)  -    -    - 
Loan Payable Bank - Export Refinance II (6)  -    -    - 
Loan Payable Bank - Export Refinance III (7)  1,337,322    1,337,322    - 
Loan Payable Bank - Export Refinance IV (8)  4,575,048    4,575,048    - 
Sale and Leaseback Financing (9)  76,618    29,660    46,958 
Short Term Financing (10)  -    -    - 
     8,273,164    8,226,206    46,958 
Subsidiary Finance Leases (11)  101,505    13,855    87,650 
    $8,374,669   $8,240,061   $134,608 

 

(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 8.4% to 11.6% as of September 30, 2025 and June 30, 2025.

 

(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 7.75% as of September 30, 2025 and June 30, 2025. The total outstanding balance as of September 30, 2025 and June 30, 2025 was $505,000 and $405,000, respectively.

 

 

NETSOL TECHNOLOGIES, INC.

Notes to Condensed Consolidated Financial Statements

September 30, 2025

(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 $405,405. The annual interest rate was 8.5% as of September 30, 2025 and June 30, 2025. The total outstanding balance as of September 30, 2025 and June 30, 2025 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, 2025, 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 $2,124,495 at September 30, 2025 and Rs. 600,000,000 or $2,111,561 at June 30, 2025. NetSol PK used Rs. 500,000,000 or $1,770,413 at September 30, 2025 and Rs. 500,000,000 or $1,759,634 at June 30, 2025. The interest rate for the loan was 8.0% at September 30, 2025 and June 30, 2025.

 

(5)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 $14,344 and Rs. 4,050,937 or $14,256, at September 30, 2025 and June 30, 2025, respectively. The balance outstanding at September 30, 2025 and June 30, 2025 was Rs. Nil. The interest rate for the loan was 13.1% at September 30, 2025 and 13.2% at June 30, 2025.

 

(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 $1,416,331 at September 30, 2025. NetSol PK has not used this facility at September 30, 2025. The interest rate for the loan was 8.0% at September 30, 2025.

 

This facility requires NetSol PK to maintain a long-term debt equity ratio of 60:40 and a current ratio of 1:1. As of September 30, 2025, 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 six months. The total facility amount is Rs. 380,000,000 or $1,345,514 and Rs. 380,000,000 or $1,337,322 at September 30, 2025 and June 30, 2025, respectively. The interest rate for the loan was 8.0% at September 30, 2025 and June 30, 2025.

 

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, 2025, NetSol PK was in compliance with these covenants.

 

(8)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. 1,300,000,000 or $4,603,073 and Rs. 1,300,000,000 or $4,575,048, at September 30, 2025 and June 30, 2025, respectively. NetSol PK used Rs. 1,300,000,000 or $4,603,073 and Rs. 1,300,000,000 or $4,575,048, at September 30, 2025 and June 30, 2025, respectively. The interest rate for the loan was 8.0% at September 30, 2025 and June 30, 2025.

 

(9)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, 2025, NetSol PK used Rs. 57,587,011 or $203,906 of which $134,983 was shown as long term and $68,923 as current. As of June 30, 2025, NetSol PK used Rs. 21,771,042 or $76,618 of which $46,958 was shown as long-term and $29,660 as current. The interest rate for the loan was from 12.3% to 22.7% at September 30, 2025 and June 30, 2025.

 

(10)The Company leases various fixed assets under finance lease arrangements expiring in various years through 2028. 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, 2025 and 2024.

 

 

NETSOL TECHNOLOGIES, INC.

Notes to Condensed Consolidated Financial Statements

September 30, 2025

(Unaudited)

 

Following are the aggregate minimum future lease payments under finance leases as of September 30, 2025:

 

   Amount 
Minimum Lease Payments     
Within year 1  $26,300 
Within year 2   84,402 
Within year 3   5,868 
Total Minimum Lease Payments   116,570 
Interest Expense relating to future periods   (19,685)
Present Value of minimum lease payments   96,885 
Less: Current portion   (13,698)
Non-Current portion  $83,187 

 

The following are the aggregate future long-term debt payments as of September 30, 2025 which consist of “Sale and Leaseback Financing (9)”.

 

   Amount 
Loan Payments     
Within year 1  $68,923 
Within year 2   72,359 
Within year 3   62,624 
Total Loan Payments   203,906 
Less: Current portion   (68,923)
Non-Current portion  $134,983