2024-12-31

 2025-09-18

 2025-04-01

 2023-12-31

 us-gaap: ValuationTechniqueDiscountedCashFlowMember

 us-gaap: ValuationTechniqueDiscountedCashFlowMember

 us-gaap: ValuationTechniqueDiscountedCashFlowMember

 us-gaap: ValuationTechniqueDiscountedCashFlowMember

 NTWK:ComputerEquipmentAndSoftwareMember

 NTWK:ComputerEquipmentAndSoftwareMember

 NTWK:OfficeFurnitureAndEquipmentMember

 NTWK:OfficeFurnitureAndEquipmentMember

 us-gaap: BuildingMember

 us-gaap: AutomobilesMember

 us-gaap: LeaseholdsAndLeaseholdImprovementsMember

 us-gaap: LeaseholdsAndLeaseholdImprovementsMember

 NTWK:ImprovementsMember

 NTWK:ImprovementsMember

 us-gaap: FairValueInputsLevel1Member

 us-gaap: FairValueInputsLevel2Member

 us-gaap: FairValueInputsLevel3Member

 us-gaap: FairValueInputsLevel1Member

 us-gaap: FairValueInputsLevel2Member

 us-gaap: FairValueInputsLevel3Member

 srt: ParentCompanyMember

 NTWK:NTAMember

 NTWK:OTOZMember

 NTWK:AELMember

 NTWK:VLSHMember

 NTWK:VLSMember

 NTWK:VLSILMember

 NTWK:ConnectMember

 NTWK:NetSolInnovationMember

 NTWK:NIAIMember

 NTWK:NetSolThaiMember

 NTWK:OTOZThaiMember

 country: AU

 NTWK:NAMECETMember

 NTWK:NetSolBeijingMember

 NTWK:TianjinMember

 NTWK:NonCoreRevenueMember

 NTWK:NonCoreRevenueMember

 NTWK:NonCoreRevenueMember

 NTWK:NonCoreRevenueMember

 us-gaap: SalesRevenueNetMember
 us-gaap: CustomerConcentrationRiskMember
 NTWK:DaimlerFinancialServicesMember

 us-gaap: SalesRevenueNetMember
 us-gaap: CustomerConcentrationRiskMember
 NTWK:DaimlerFinancialServicesMember

 us-gaap: SalesRevenueNetMember
 us-gaap: CustomerConcentrationRiskMember
 NTWK:BMWFinancialServicesMember

 us-gaap: SalesRevenueNetMember
 us-gaap: CustomerConcentrationRiskMember
 NTWK:BMWFinancialServicesMember

 NTWK:DaimlerFinancialServicesMember

 NTWK:DaimlerFinancialServicesMember

 NTWK:BMWFinancialServicesMember

 NTWK:BMWFinancialServicesMember

 NTWK:OfficeFurnitureAndEquipmentMember

 NTWK:OfficeFurnitureAndEquipmentMember

 us-gaap: ComputerEquipmentMember

 us-gaap: ComputerEquipmentMember

 us-gaap: AssetsHeldUnderCapitalLeasesMember

 us-gaap: AssetsHeldUnderCapitalLeasesMember

 us-gaap: BuildingMember

 us-gaap: LandMember

 us-gaap: LandMember

 us-gaap: AutomobilesMember

 us-gaap: LeaseholdImprovementsMember

 us-gaap: LeaseholdImprovementsMember

 us-gaap: VehiclesMember

 us-gaap: VehiclesMember

 NTWK:LeaseAgreementMember

 NTWK:LeaseAgreementMember

 srt: AsiaPacificMember

 srt: AsiaPacificMember

 srt: EuropeMember

 srt: EuropeMember

 NTWK:NTAMember
 srt: NorthAmericaMember

 NTWK:NTAMember
 srt: NorthAmericaMember

 NTWK:DAndOInsuranceMember

 us-gaap: LineOfCreditMember

 NTWK:BankOverdraftFacilityMember

 NTWK:LoanPayableBankOneMember

 NTWK:LoanPayableBankTwoMember

 NTWK:LoanPayableBankThreeMember

 NTWK:LoanPayableBankFourMember

 NTWK:ShortTermFinancingMember

 NTWK:DAndOInsuranceMember

 us-gaap: LineOfCreditMember

 NTWK:BankOverdraftFacilityMember

 NTWK:LoanPayableBankOneMember

 NTWK:LoanPayableBankTwoMember

 NTWK:LoanPayableBankThreeMember

 NTWK:LoanPayableBankFourMember

 NTWK:ShortTermFinancingMember

 NTWK:DirectorsAndOfficersAndErrorAndOmissionsLiabilityInsuranceMember

 NTWK:DirectorsAndOfficersAndErrorAndOmissionsLiabilityInsuranceMember

 NTWK:DirectorsAndOfficersAndErrorAndOmissionsLiabilityInsuranceMember

 NTWK:DirectorsAndOfficersAndErrorAndOmissionsLiabilityInsuranceMember

 NTWK:RunningFinanceFacilityMember

 NTWK:RunningFinanceFacilityMember

 NTWK:RunningFinanceFacilityMember

 NTWK:ShortTermFinancingMember
 NTWK:NetSolBeijingMember

 NTWK:ShortTermFinancingMember
 NTWK:NetSolBeijingMember

 NTWK:FederalMember

 NTWK:StateMember

 NTWK:ForeignEntitiesMember

 srt: DirectorMember

 srt: DirectorMember

 srt: ChiefExecutiveOfficerMember

 NTWK:ConsultantMember

 NTWK:EmployeesMember

 NTWK:TwoThousandTwentyFivePlanMember

 NTWK:TwoThousandTwentyFivePlanMember

 NTWK:OfficersAndEmployeesMember

 NTWK:OfficersAndEmployeesMember

 NTWK:RangeOneMember

 NTWK:RangeOneMember

 NTWK:CorporateAssetsMember

 NTWK:GoodwillNotAllocatedToSegmentsMember

 NTWK:CorporateAssetsMember

 NTWK:GoodwillNotAllocatedToSegmentsMember

 NTWK:NetSolInnovationMember

 NTWK:NAMECETMember

 NTWK:NIAIMember

 NTWK:NetSolThaiMember

 NTWK:OTOZThaiMember

 NTWK:OTOZMember

 NTWK:NetSolInnovationMember

 NTWK:NAMECETMember

 NTWK:NetSolThaiMember

 NTWK:OTOZThaiMember

 NTWK:OTOZMember

 NTWK:OTOZMember

 NTWK:OTOZAndOTOZThaiMember

 NTWK:OTOZAndOTOZThaiMember

 NTWK:NetSolInnovationMember

 NTWK:Segments

 UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 WASHINGTON,
D.C. 20549

 FORM

ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES

 EXCHANGE
ACT OF 1934

 FOR
THE FISCAL YEAR ENDED JUNE 30, 2025

 or

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE

 SECURITIES
EXCHANGE ACT OF 1934

 Commission
File Number 0-22773

 (Exact
Name of Registrant specified in its charter)

 nevada

 95-4627685

 (State or other jurisdiction of

 (I.R.S. Employer

 incorporation
 or organization)

 Identification Number)

 16000
Ventura Blvd., Suite 770,

 Encino,
 CA 91436

 (Address
of principal executive offices) (Zip code)

 (818) 222-9195

 (Issuer's
telephone number including area code)

 Securities
registered pursuant to Section 12(b) of the Act:

 Title
 of each class

 Trading
 Symbol(s)

 Name
 of exchange on which registered

 Stock, $0.01 par value per share

 NTWK

 NASDAQ

by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act.

 Yes
 No

by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes No

by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during
the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes No

by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer",
"smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act (Check one):

 Large
 Accelerated Filer

 Accelerated
 Filer

 Non-accelerated
 Filer

 Smaller reporting company

 Emerging
 growth company

 If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

 The
aggregate market value of the Common Stock held by non-affiliates of the registrant was approximately $ 25,936,035 based upon the closing
price of the stock as reported on NASDAQ Capital Market ($2.62 per share) on December 31, 2024, the last business day of the registrant's
second quarter. As of September 18, 2025, there were 12,724,571 shares issued and 11,785,540 outstanding of its $.01 par value Common
Stock and no Preferred Stock was outstanding.

 DOCUMENTS
INCORPORATED BY REFERENCE

 ( None)

 ANNUAL
REPORT

 PURSUANT
TO SECTION 13 OR 15(d) OF THE

 SECURITIES
ACT OF 1934

 TABLE
OF CONTENTS AND CROSS REFERENCE SHEET

 PAGE

 PART
 I

 Note
 About Forward-Looking Statements

 Item

 Business

 Item
 1A

 Risk
 Factors

 Item
 1B

 Unresolved
 Staff Comments

 Item
 1C

 Cybersecurity

 Item

 Properties

 Item

 Legal
 Proceedings

 Item

 Mine
 Safety Disclosures

 PART
 II

 Item

 Market
 for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item

 [Reserved]

 Item

 Management's
 Discussion and Analysis of Financial Condition and Results of Operations

 Item
 7A

 Quantitative
 and Qualitative Disclosures about Market Risk

 Item

 Financial
 Statements and Supplementary Data

 Item

 Changes
 in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item
 9A

 Controls
 and Procedures

 Item
 9B

 Other
 Information

 Item
 9C

 Disclosure
 Regarding Foreign Jurisdictions that Prevent Inspections

 PART
 III

 Item

 Directors,
 Executive Officers and Corporate Governance

 Item

 Executive

 Item

 Security
 Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item

 Certain
 Relationships and Related Transactions, and Director Independence

 Item

 Principal
 Accountant Fees and Services

 PART
 IV

 Item

 Exhibits
 and Financial Statement Schedules

 i

 NOTE
ABOUT FORWARD-LOOKING STATEMENTS

 This
Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of
1995 relating to the development of the company's products and services and future operation results, including statements regarding
the company that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected.
The words "believe," "expect," "anticipate," "intend," variations of such words, and
similar expressions, identify forward-looking statements, but their absence does not mean that the statement is not forward-looking.
These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult
to predict. Factors that could affect the company's actual results include the progress and costs of the development of products
and services and the timing of the market acceptance. Forward-looking statements may appear throughout this report, including without
limitation, the following sections: Item 1 "Business," and Item 7 "Management's Discussion and Analysis of Financial
Condition and Results of Operations." We undertake no obligation to revise or publicly release the results of any revision to these
forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements.

 As
used herein, "NETSOL," "the company", "we", "our," and similar terms include NETSOL Technologies,
Inc. and its subsidiaries, unless the context indicates otherwise.

 PART

 ITEM
1 - BUSINESS

 GENERAL
OVERVIEW

Technologies' solutions and services enable original equipment manufacturers (OEMs), dealerships and financial institutions to
sell, finance and lease assets. The company serves customers across over 30 countries. NETSOL has been at the cutting edge of technology,
pioneering innovations with its asset finance solutions and leveraging advanced AI and cloud services to meet the complex needs of the
global market. Renowned for its deep industry expertise, customer-centric approach and commitment to excellence, NETSOL fosters strong
partnerships with its clients, ensuring their success in an ever-evolving landscape. With a rich history of innovation, ethical business
practices and a focus on sustainability, NETSOL is dedicated to empowering businesses worldwide, securing its position as the trusted
partner for leading firms around the globe.

 NETSOL's
primary sources of revenues have been licensing, subscriptions, modification, enhancement and support of its suite of financial applications
to leading businesses in the global finance and leasing space as well as automotive digital retail.

 The
Company's clients include blue-chip organizations, Dow Jones 30 Industrials, Fortune 500 companies, global vehicle manufacturers
through their captive finance companies ("auto captives"), unrelated automotive finance companies ("non-captives"),
equipment finance and leasing companies, automotive and equipment OEMs, commercial lenders, dealers, brokers, banks and other financial
institutions – all of which are serviced by NETSOL's strategically located support and delivery centers across the globe.

 Founded
in 1996, NETSOL is headquartered in Encino, California. The company follows a global strategy for sales and delivery of its portfolio
of solutions and services through its offices in the following locations:

 North America

 Encino, California and Austin, Texas

 London and Horsham

 Asia Pacific

 Sydney, Bangkok, Beijing, Tianjin, Jakarta, Lahore and Karachi

 Middle East

 Dubai

 OUR
BUSINESS

 Company
Business Model

specializes in providing AI-powered, scalable and customizable technology solutions primarily to the global asset finance and
leasing industry. The Company also empowers OEMS, dealer groups and dealerships with a digital retail platform that transforms how
they sell, finance and deliver cars. Our value proposition lies in delivering innovative technologies that enhance operational
efficiency and productivity. Further, NETSOL also provides a range of services that are not limited to the financial services
industry. We reach our customers through a combination of direct sales efforts, strategic partnerships with associations, a robust
online presence, participation in industry events and a variety of targeted marketing channels.

 The
Company generates its core revenue from the following primary sources: (1) software licenses, (2) services, which include implementation
and consulting services, and (3) subscription and support, which includes post contract support, of its enterprise technology solutions
for the industry. The Company offers its solutions 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 or solution(s).

 Expertise

 Our
expertise in enterprise technology and financial application development has positioned us as a global player in AI-powered asset finance
and digital retail solutions, enabling us to establish a strong footprint across key markets in North America, Europe and Asia-Pacific.

 Domain
Experience

is a dynamic leader and has been able to accumulate a wealth of experience in the global asset finance and leasing industry alongside
the automotive digital retail space. We have built a large knowledge base which is regularly refined and updated to ensure the most up-to-date,
best practices and business solutions for the benefit of our clients and partners. We have a strong presence in the captive asset-finance
market. We have had continual operations for over two and a half decades in Asia Pacific and Europe and over four decades in North America.

 Proximity
with Global and Regional Customers

 We
have offices across the world located strategically to maintain close contact and proximity with our customers in various key markets.
This has not only helped us strengthen our customer relationships but also build a deeper understanding of local market dynamics. Simultaneously,
we are able to extend services and support development through a combination of onsite and offsite resources. This approach has allowed
us to offer blended rates to our customers by employing a unique and cost-effective global development model.

 Our
global operations are broken down into the following primary regions: North America, Europe, Asia Pacific and the Middle East. All of
the subsidiaries are seamlessly integrated to function effectively with global delivery capabilities, cross selling to multinational
asset finance companies, automotive and equipment OEMs, auto captives, commercial lenders, dealers, brokers, banks and other financial
institutions, leveraging the centralized marketing and pre-sales organization, and a network of employees connected across the globe
to support local and global customers and partners.

 OUR
PRODUCTS AND SERVICES

 Built
on cutting-edge, modern technology, NETSOL's unified Transcend Platform is an AI-powered asset finance and digital retail
solution for automotive and equipment OEMs, auto captives, commercial lenders, dealers, brokers and financial institutions.

 Our
solutions are designed and developed for highly flexible settings and are capable of dealing with multinational, multi-company, multi-asset,
multi-lingual, multi-distributor and multi-manufacturer environments. They empower our customers to effectively manage their complex
operations, enabling them to thrive in hyper-competitive global markets.

 PRODUCTS
AND SERVICES: TRANSCEND PLATFORM

 The
Transcend Platform, powered by NETSOL, is an AI-driven unified ecosystem that revolutionizes how assets are sold, financed and
leased. Designed to automate and optimize every step - from sales, to originations, to servicing, Transcend leverages AI and ML
to drive predictive insights and smarter decision-making.

Retail

 We
revolutionize auto and equipment retail with a fully digital, integrated platform that simplifies the entire customer journey. From online
purchasing to finance approval, Transcend Retail offers advanced retail and mobility solutions that keep dealerships and OEMs
at the cutting edge of consumer expectations.

Finance

 We
streamline finance and leasing operations with a comprehensive solution for originations, servicing and wholesale finance. Transcend
Finance empowers automotive and equipment OEMs, auto captives, commercial lenders, dealers, brokers and financial institutions with end-to-end
visibility and control, ensuring seamless workflows and accelerated business outcomes.

 Originations

 We
streamline the entire origination process, from submission to approval, with advanced features such as real-time, AI-powered credit decisioning,
automated deal flows and more.

 Servicing

 We
enable financial institutions to attain real-time insights into portfolio performance, delinquencies and losses, enabling proactive portfolio
management and strategic decision-making.

 Wholesale
finance

 Our
wholesale finance solution empowers customers to gain a competitive edge by automating their wholesale finance and floor planning operations
effortlessly.

Marketplace

Marketplace offers a suite of flexible, component-based solutions that integrate seamlessly with the customer's existing infrastructure.
Transcend Marketplace contains modular, API-first solutions that address every aspect of finance and leasing using tools for calculations,
document generation, loan origination and lending configurations.

 Flex

 Flex
is an application program interface (API)-first, ready-to-use calculation and quotation engine. It is a one-stop solution that guarantees
precise calculations at all stages of the contract lifecycle through various calculation types. All the calculations are parameter-driven,
which helps perform simple, multi-dimensional or complex calculations based on the needs of a business. Flex has a lightning-fast
onboarding process, which can take place in mere minutes.

 Hubex

 Hubex
is an API library that enables companies to standardize all their API integration procedures across multiple API services through a single
integration. In addition to traditional lending companies, Hubex can also streamline the operations of dealerships, vendors and
consultants. With a ready-to-use service, Hubex makes it easy for businesses to seamlessly connect with multiple APIs and achieve
their desired outcomes. Pre-integrated services in the Hubex library include, but are not limited to, payment processing, bank
account authentication, finance and insurance products, fraud check, know your customer (KYC) service, driver license verification, address
validation, vehicle valuation and notification service.

is a cloud-based parameter storage that smoothly runs all of a company's core lending operations. It is an accumulation of all
the master setups, including asset catalog and inventory, programs, rates and profiles for lenders, dealers and multiple partners, in
one centralized location for all business types. Index TM can enhance delivery efficiency and program management for easy integration
into all systems.

 Dock

 Dock
is an advanced document generation tool that lets a company create accurate and professional-looking documents in just seconds. With
Dock TM 's template-based configuration, a company can set up placeholders for data, essentially simplifying the document
creation process and reducing the chance of human error. Its API-first architecture ensures scalability, making it capable of handling
any document generation task, from single documents to millions, with ease.

 Lane

 Lane
offers a feature-rich, end-to-end order management system for asset leasing and loans as well as credit companies. Our platform covers
all aspects, from conducting end-to-end sales to performing dealer and partner-related tasks and marketing-related activities. The system
offers a variety of dashboards that provide vital information for dealers and partners while enabling quick order management and providing
a way for users to record and submit a complete credit application for their clients.

 Link

 Link
is a purpose-built platform designed for brokers, lenders, dealers and borrowers to work seamlessly together. With tailored solutions
that simplify applications and automate key processes, Link TM is designed to enhance customer relationships whilst making
compliance effortless. This results in faster approvals, enriched customer experiences and stronger loyalty via elevated customer satisfaction.

 Intermediary
portals:

 Broker
portals

 Efficiency
and effectiveness are paramount for any broker. Managing disparate systems and processes can be cumbersome and time-consuming, often
leading to inefficiencies and missed opportunities. NETSOL offers a solution to these challenges by consolidating disparate processes
into a single unified interface, revolutionizing the way a brokerage operates.

 Lender
portals

 NETSOL's
lender-specific portals are designed to transform the lending process by enhancing risk management and driving profitability. Our advanced
tools not only streamline loan origination but also facilitate seamless communication and collaboration with the lending ecosystem. We
empower a company's lending process with intuitive and efficient lender portals designed for a seamless user experience.

 Dealer
portals

 In
the competitive automotive industry, dealers need efficient and comprehensive solutions to manage their operations effectively. NETSOL's
intermediary portals serve as digital command centers, providing dealers with a wide array of tools, resources and services to optimize
every aspect of their business, from inventory management to sales and marketing.

Consultancy

 Empowering
businesses with Transcend Consulting Services, we offer expert guidance across critical areas like information security, data
engineering and cloud services. Our team partners with businesses to create tailored solutions that drive innovation, efficiency and
growth.

AI Labs

 We
are leading AI-driven innovation with our Transcend AI Labs, integrating advanced AI services into our product suite to solve
the unique challenges of BFSI, equipment and auto OEMs and dealerships. Our tailored solutions drive industry-specific advancements,
helping companies stay ahead in a competitive market.

 IMPLEMENTATION
PROCESS

 The
implementation process of our technology can span up to fifteen months depending upon the methodology, complexity and scope. The implementation
process may also include related software services such as configuration, data migration, training, gaps development and any other additional
third-party interfaces. Even after implementation, customers regularly seek enhancements and additions to improve their business processes
and have changing requirements addressed at mutually agreed rates.

 Post
implementation, our consultants may remain at the client site to assist the customer with smooth operations. After this phase, the regular
maintenance and support services phase for the implemented technology begins in exchange for agreed subscriptions or support fees. In
addition to the daily rate paid by the customer for each consultant engaged, the customer also pays for all visa and transportation-related
expenses, boarding of the consultants and a living allowance. Our involvement in all the above steps is suitably priced to bring value
to our customers and increase our profitability.

 Cloud-enabled
solutions are offered via seamless and rapid deployments. The swift speed of implementation for our cloud-ready products enables businesses
to be more responsive and attain a competitive advantage. For example, certain API-first, SaaS products of ours via Transcend TM
Marketplace can be integrated into a customer's ecosystem within mere minutes.

 PRICING
AND REVENUE STREAMS

 Our
revenue streams are the outcome of the following four main areas:

 Product licensing

 Subscription-based pricing

 Implementation and customization-related
 services

 Post implementation, support-related
 services

fees can range up to a multi-million-dollar fee for single or multiple module implementations. License revenue is realized with traditional,
non-SaaS-based agreements, whereas SaaS-based agreements do not contain license fees and are offered via flexible, value-driven, subscription-based
pricing. There are various attributes which determine the level of pricing complexity, a few of which are: number of contracts, size
of the portfolio, IT budgets, business strategy of the customer, internal business processes followed by the customer, number of business
users, amount of customization required, the complexity of data migration and branch network of the customer.

 We
recognize revenue from license contracts when the software has been delivered to the customer. Implementation-related services, including
customization, configuration, data migration, training and third-party interfaces are recognized as the services are performed. Post-implementation
support services are then provided on a continued basis. The annual support fee, typically an agreed upon percentage of overall monetary
value of the license, then becomes an ongoing revenue stream realized yearly. Revenue from software services includes fixed price and
time, and materials-based contracts and is recognized as the services are performed.

 In
order to avoid lumpiness in our revenues and to ensure a predictable revenue base over coming years, the business has shifted to a pricing
strategy whereby the business offers its cloud-ready products at SaaS/subscription-based pricing models. Rapid deployments coupled with
affordable prices/payment schedules is expected to lead the business towards volume-based selling. Moreover, this value-driven pricing
plan is intended to decrease the initial buy-in cost for new customers by eliminating heavy license fees, reducing the sales cycles and
providing an alternative to current customers seeking lower software usage and maintenance costs.

 MARKETING
AND SELLING

 Our
global marketing activities aim to establish and maintain a strong preference and loyalty for NETSOL and its offerings. Marketing activities
are conducted both at the global and regional levels. The Global Marketing department oversees all communication, advertising, public
relations and manages all digital platforms, including the Company's website, social media channels and partnerships within the
industry.

 As
part of our lead-generation activities, our regional representatives represent NETSOL as the Company sponsors, exhibits at, and attends
annual industry-leading conferences, conventions, seminars, summits and other events. The company maintains its presence at these events
to demonstrate our product and service offerings and for important networking purposes. NETSOL also takes part in webinars, podcasts
and holds private briefings with associations and individual companies.

 GROWTH
PROSPECTS

 We
are eyeing key international markets for growth in sales for NETSOL's Transcend Platform. Our sales strategy not only focuses
on expansion into new geographic markets, but within existing markets into new verticals with targeting of Tier 2 and Tier 3 prospects
as well.

 Growth
in North America and Europe is expected to come from the potential market for replacement of legacy systems as well as acquisition of
new customers. Our finance and leasing platform Transcend Finance is aimed at providing a highly flexible and robust solution
based on the latest technology and advanced architecture for North American and European customers looking to replace their legacy systems.
We believe that the product can provide substantial competitive disruption to the market's lagging technology provided by incumbent
vendors. The existing customer base may also represent latent demand for increased service and support revenues by offering business
process optimization, customization and upgrade services. With a market-ready product with successful implementations, the prospects
for Transcend Finance in the regions are positive.

 Further
traction in North America and Europe will come from Transcend Finance deployed on the cloud, which will continue to allow catering
to not only larger organizations, but also small and medium sized companies. Currently, in the United Kingdom, a number of banks and
other financial institutions are utilizing our Transcend Marketplace solutions offered via subscription-based pricing and swift
deployments.

 Our
product strategy has grown significantly in recent years, which includes the recent launch of our broker and lender portals, which marks
a key step forward in delivering more value to our partners.

 Growth
in our traditionally strong base in Asia Pacific is expected through diversification across market segments to include new customers
in related banking and commercial lending areas. At the same time, the existing customer base is tapped for increased service and support
revenues by offering enhanced features and new solutions to emerging customer needs. In addition, there is also potential for Transcend
Finance in Asia Pacific in the form of existing customers who are looking for replacement of their current system. In China, we are a
leader in the auto finance enterprise solution domain. We will continue strengthening our position within existing multinational auto
manufacturers, as well as local Chinese captive finance and leasing companies. It is pertinent to mention that these Chinese automakers
and finance companies are growing rapidly outside of the country and that our solutions assist them in this growth. Our sales strategy
focuses on supporting Chinese manufacturers in expanding their presence in the EU and other regions of APAC.

 We
believe our digital retail platform presents significant growth opportunities in the evolving digital marketplace. Transcend Retail
is currently used by major customers in the United States, including some of the largest and most recognized dealership networks. We
foresee further adoption of the platform in the region. Our digital retail solution transforms how OEMs, dealer groups and dealerships
sell, finance and deliver cars, enabling them to provide personalized, fast and transparent car-buying experiences across all digital
and in-store touchpoints.

 Beyond
our products, we also anticipate demand for our services that empower our clients to excel in the competitive global economy. Through
Transcend Consultancy, we offer expertise across critical areas such as information security, data engineering and cloud services,
helping businesses design tailored solutions for innovation and growth.

 THE
MARKETS

 We
deliver our comprehensive suite of technology solutions and services across major markets worldwide, positioning ourselves as a leading
provider in the financial services, and particularly, the global asset finance and leasing sector. Leveraging our extensive global footprint,
we offer scalable and innovative solutions tailored to meet the unique needs of clients in diverse geographic regions. Our strategic
presence in key markets enables us to effectively address local regulations and market dynamics, thereby enhancing customer satisfaction
and fostering long-term partnerships.

 PEOPLE
AND CULTURE

 We
believe that our growth and success are attributable in large part to the high caliber of our global team and our commitment to maintain
the values on which our success has been based. We support gender diversity on a global basis. We are an equal opportunity employer with
a large workforce of approximately 1460 employees, promoting a culture of diversity and inclusion.

stands as a beacon of innovation, excellence and dedication to customer success. We value transparency and integrity, ensuring that honesty
guides our interactions. We are renowned for innovation, expertise and a customer-centric approach.

 We
believe we should give back to the community and our employees as much as possible. Certain subsidiaries are located in regions where
basic services are not readily available. Where possible, we act to not only improve the quality of life of our employees, but also the
standard of living in these regions. Examples of such programs are as follows:

 Literacy
program: Launched to educate children of our support staff, the main objective of this program is to enable them to acquire basic
reading, writing and arithmetic skills.

 Higher
education and science and research institutions: In order to support higher education in Pakistan, we have contributed endowments
to NUST, Forman Christian College and a few other universities who are focused on science and engineering.

 Noble
cause fund: A noble cause fund has been established to meet medical and education expenses of the children of our support staff.
Our employees voluntarily contribute a fixed amount every month to the fund and NETSOL matches the employee subscriptions with an equivalent
contribution amount. A portion of this fund is also utilized to support social needs of certain institutions and individuals outside
of NETSOL.

 Preventative
health care program: In addition to the comprehensive outpatient and in-patient medical benefits, preventive health care has also
been introduced. This phased program focuses on vaccination of our employees against such diseases as Hepatitis – A/B, Tetanus,
Typhoid, Flu and COVID-19 on a routine basis.

 There
is significant competition for employees with the skills required to perform the services we offer. We run an elaborate training program
for different cadres of employees to cover technical skills and business domain knowledge alongside communication, management and leadership
skills. We believe we have been successful in our efforts to attract and retain the highest level of talent available, partly because
of our emphasis on core values, training and professional growth. We intend to continue to recruit, hire and promote employees who share
our vision.

 COMPETITION

 A
number of companies offer products and services that overlap and are competitive with those offered by us. Some of NETSOL's main
competitors for its finance and leasing technology include Alfa, Constellation Financial Software, FIS Global, LTI Technology Solutions,
Odessa, Solifi, Soft4 and Sopra Banking Software. The Company's competitors for digital retail include Tekion and CDK Global. Most
of our major competitors are based in North America and Europe, with a smaller presence in APAC and the Middle East.

 CUSTOMERS

 NETSOL's
solutions and services cater to a broad spectrum of finance and leasing businesses, from automotive captive finance companies to equipment
finance and leasing companies to large regional banks, as well as its customers for digital retail, including OEMs, dealer groups and
dealerships.

 A
number of NETSOL's customers include world renowned auto manufacturers through their finance arms. NETSOL is a strategic business
partner for Daimler and BMW (which consists of a group of many companies in different countries), which accounts for approximately 19.1%
and 16.1%, respectively, of our revenue for our fiscal year ended June 30, 2025. Other globally renowned auto captives that are customers
of the company include Toyota, Nissan, Ford and FIAT.

 Other
customers include equipment finance and leasing companies, banks and other financial institutions worldwide. Some of these clients include
MINI Financial Services, BMO, Bank of Hawaii, First Hawaiian Leasing, Genpact, SCI Lease Corp, Aldermore, Investec,
Close Brothers, Haydock Finance, Charles and Dean, Maple Commercial Finance, among many others.

 Information
regarding financial data by geographic areas is set forth in Item 7 and Item 8 of this Annual Report on form 10-K. See note 17 of Notes
to Consolidated Financial Statements under Item 8.

 INTELLECTUAL
PROPERTY

relies upon a combination of non-disclosure and other contractual arrangements, as well as common law trade secret, copyright and trademark
laws to protect its proprietary rights. NETSOL enters into confidentiality agreements with its employees, generally requires its consultants
and clients to enter into these agreements, and limits access to and distribution of its proprietary information. The NETSOL "N"
logo and name has been copyrighted and trademark registered in Pakistan. The NETSOL "N" logo has been registered with the
U.S. Patent and Trademark Office. NFS Ascent has been registered with the U.S. Patent and Trademark Office. OTOZ was
registered with the U.S. Patent and Trademark Office. The Company intends to trademark and copyright its intellectual property as necessary
and in the appropriate jurisdictions.

 GOVERNMENTAL
APPROVAL AND REGULATION

Company operations do not require specific governmental approvals. Like all companies, including those with multinational subsidiaries,
we are subject to the laws of the countries in which we maintain subsidiaries and conduct operations. Governments in which our subsidiaries
are located, including our largest subsidiary in Pakistan, may require approval for the repatriation of investments.

 AVAILABLE
INFORMATION

 Our
website is located at  and our investor relations website is located at
The following filings are available through our investor relations website after we file with the SEC: Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and our Proxy Statements for our annual meetings of stockholders. These filings are also available for download
free of charge on our investor relations website. We also provide a link to the section of the SEC's website at www.sec.gov
that has all of our public filings, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K,
all amendments to those reports, our Proxy Statements and other ownership related filings. Further, a copy of this Annual Report on Form
10-K is located at the SEC's Public Reference Room at 100 F Street, NE, Washington D.C. 20549. Information on the operation of
the Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330.

 We
webcast our earnings calls and certain events we participate in or host with members of the investment community on our investor relations
website. Additionally, we provide notifications of news or announcements regarding our financial performance, including SEC filings,
investor events, press and earnings releases, and blogs as part of our investor relations website. Investors and others can receive notifications
of new information posted on our investor relations website by signing up for e-mail alerts. Further corporate governance information,
including our committee charters and code of conduct, is also available on our investor relations website at
The content of our websites is not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report
or document we file with the SEC and any references to our websites are intended to be inactive textual references only.

 ITEM
1A - RISK FACTORS

 The
political and economic environment in Pakistan may negatively affect our business.

 Despite
a recent general election, the government remains unstable. The political unsteadiness delays governmental functions. If such unsteadiness
continues in the long term, it could result in difficulty in necessary interactions with the government as it relates to government contracts
and personnel access to necessary government functions. While there is no guarantee, we anticipate that the new government policies may
lead to macroeconomic stability.

 While
the devaluation of the Pakistan Rupee in comparison to the US Dollar has stabilized, the higher-than-average inflation rate in Pakistan
may continue to negatively impact our largest subsidiary and accordingly the Company's financials as a whole.

Economic Conditions

economic conditions in our geographic markets; inflation, geopolitical tensions, including trade wars, tariffs and/or sanctions in geographic
areas; and global conflicts or disasters that impact the global economy or one or more sectors of the global economy have negative impacts
on our ability to acquire new business to and deliver on new business when contracted.

 Inflation
and higher interest rates globally have greatly increased the cost of doing business, including salaries and benefits worldwide, affecting
our profitability. If inflation does not stabilize, our profitability can be impacted.

 ITEM
1B – UNRESOLVED STAFF COMMENTS

 None

 ITEM
1C – CYBERSECURITY

 Cybersecurity
Risk Management and Strategy

 We
face various cyber risks, including, but not limited to, risks related to unauthorized access, misuse, customer data theft, computer
viruses, system disruptions, ransomware, malicious software and other intrusions. We utilize a multilayered, proactive approach to identify,
evaluate, mitigate and prevent potential cyber and information security threats through our cybersecurity risk management program 24/7.
 Our cybersecurity risk management program is designed to identify, assess, prioritize and mitigate risks across the organization to enhance
our resilience and support the achievement of our strategic objectives. This integrated approach helps ensure that cyber risks are not
viewed in isolation, but are assessed, prioritized and managed in alignment with the Company's operational, financial and strategic
risks, assisting the Company in more effectively managing interdependencies among risks and enhancing risk mitigation strategies.

 We
devote resources to protecting the security of our computer systems, software, networks and other technology assets. Our efforts are
designed to adapt to the evolution of information security risks and appropriate best practices and include physical, administrative
and technical safeguards. Our cybersecurity risk management program is designed to help coordinate the Company's identification
of response to and recovery from cybersecurity incidents across all consolidated entities. This includes rapid identification, assessment,
investigation and remediation of incidents, as well as complying with applicable legal obligations, communicated promptly and effectively.

 Our
internal audit team assesses regularly the effectiveness of our internal controls relating to cybersecurity and updates as necessary.
Our management team also engages, at times when needed, certain outside advisors and consultants to assist in the identification, oversight,
evaluation and management of cybersecurity risks, as well as to advise on specific topics. As part of our overall risk mitigation strategy,
the Company also maintains cyber insurance coverage; however, such insurance may not be sufficient in type or amount to cover us against
claims related to security breaches, cyberattacks and other related breaches.

 We
have various processes and procedures in place to evaluate cybersecurity threats associated with third parties. We have not identified
any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, performance,
results of our operations, or financial condition.

 Cybersecurity
Governance and Oversight

 The
Company's cybersecurity risk management program is supervised by our Senior Manager of Information Security (SMIS), who reports
directly to the Company's Chief Operating Officer ("COO") in Pakistan. The SMIS and his team are responsible for leading
enterprise-wide cybersecurity strategy, policy, standards, architecture and processes. Our current SMIS received his bachelor's
in computer sciences and has over 20 years of cybersecurity experience, including relevant prior senior leadership experience at our
Company. Furthermore, he has also achieved globally recognized information security certifications, including CISSP (Certified Information
Systems Security Professional), CISA (Certified Information Systems Auditor), CISM (Certified Information Security Manager), CRISC (Certified
in Risk and Information Systems Control), CompTIA Security+, ISO 27001 Lead Auditor, CEH (Certified Ethical Hacker), CHFI (Computer Hacking
Forensic Investigator), among others.

 The
SMIS attends and is invited to all Company Cybersecurity Committee meetings, a cross-functional management committee that drives awareness,
ownership and alignment across broad governance for effective cybersecurity risk management. The Cybersecurity Committee is composed
of senior leaders from our legal, information technology, cybersecurity, and audit sections. Subject matter experts are also invited,
as appropriate. The Cybersecurity Committee meets at least quarterly and has responsibility for oversight and validation of the Company's
cybersecurity strategic direction, risks and threats, priorities, and resource allocation. The SMIS and his team, as well as the Cybersecurity
Committee, are informed about and monitor the prevention, detection, mitigation and remediation of cybersecurity incidents in accordance
with the Company's cyber incident response plan.

 The
Board of Directors receives regular reports from the SMIS and Cybersecurity Committee on, among other things, the Company's cyber
risks and threats, the status of projects to strengths of the Company's information security systems, assessments of the Company's
security program, insurance, and the emerging threat landscape. In accordance with our cyber incident response plan, the Cybersecurity
committee s promptly informed by SMIS's team of cybersecurity incidents that could adversely affect the Company or its information
systems and is also regularly updated about incidents with less impact potential. The Board of Directors and Audit committee are informed
of any incidents that could adversely affect the Company by the Cybersecurity committee and SMIS's team.

 In
an effort to detect and defend against cyber threats, the Company annually, and, periodically as needed, provides its employees with various cybersecurity and data
protection training programs. These programs cover timely and relevant topics, including social engineering, phishing, password protection,
confidential data protection, asset use and mobile security, and educate employees on the importance of reporting all incidents promptly
to the Company's centrally managed cyber defense and security operations.

 ITEM
2 - PROPERTIES

 Our
corporate headquarters are located in Encino, California where we lease approximately 2,400 square feet of office space. We own our Lahore
Technology Campus which consists of approximately 140,000 square feet of computer and general office space. This includes two adjacent
five story buildings having a covered area of approximately 90,000 square feet with the capacity to house approximately 1,000 resources.
In addition, we maintain leased office spaces in the UK, China, Australia, Thailand and a shared office in Indonesia. Our NTA office
is located in Austin, Texas. We believe our existing facilities, both owned and leased, are in good condition and suitable for the conduct
of our business.

 ITEM
3 - LEGAL PROCEEDINGS

 None

 ITEM
4 – MINE SAFETY DISCLOSURES

 Not
applicable.

 PART
II

 ITEM
5 - MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITY

 (a)
MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

 MARKET
INFORMATION - Common stock of NetSol Technologies, Inc. is listed and traded on NASDAQ Capital Market under the ticker symbol "NTWK".

 The
table shows the high and low intra-day prices of the Company's common stock as reported on the composite tape of the NASDAQ for
each quarter during the last two fiscal years.

 Fiscal Year 2025

 High

 Low

 First Quarter

 $
 3.10

 $
 2.54

 Second Quarter

 $
 3.34

 $
 2.48

 Third Quarter

 $
 2.78

 $
 2.31

 Fourth Quarter

 $
 3.18

 $
 2.14

 Fiscal Year 2024

 High

 Low

 First Quarter

 $
 2.50

 $
 1.72

 Second Quarter

 $
 2.35

 $
 1.75

 Third Quarter

 $
 3.05

 $
 1.99

 Fourth Quarter

 $
 3.01

 $
 2.28

 RECORD
HOLDERS - As of September 18, 2025, the number of holders of record of the Company's common stock was 124.

 DIVIDENDS
- The Company has not paid dividends on its Common Stock in the past two fiscal years.

 SECURITIES
AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLAN

 The
table shows information related to our equity compensation plans as of June 30, 2025:

 Number of
securities to
be issued
upon
exercise of
outstanding
options,
warrants
and rights

 Weighted average
exercise price of
outstanding
options, warrants
and rights

 Number of securities
remaining
available for
future issuance
under equity
compensation
plans
(excluding
securities
reflected in
column (a)

 Equity Compensation
Plans approved by
Security holders

 $
 2.94

 998,109
 (1)

 Equity Compensation
Plans not approved by
Security holders

 None

 None

 None

 Total

 $
 2.94

 998,109

 (1)
 Represents
 998,109 available for issuance under the 2025 Equity Incentive Plan.

 (b)
RECENT SALES OF UNREGISTERED SECURITIES

 None.

 (c)
ISSUER PURCHASES OF EQUITY SECURITIES

 None

 ITEM
6 – [Reserved]

 ITEM
7- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 The
following discussion is intended to assist in understanding our financial position and results of operations for the year ended June
30, 2025. It should be read together with our consolidated financial statements and related notes included under Item 8 of this Annual
Report on Form 10-K.

 Listed
below are a few of NetSol's highlights for the Year ended June 30, 2025:

 We
signed a multi-year agreement with the captive finance arm of a leading Japanese automotive manufacturer to implement its flagship Transcend
Finance platform across both retail and wholesale operations in Australia and New Zealand. The agreement, structured with a five-year
total cost of ownership of approximately $21 million, reflects the client's strategic commitment to deploying a unified, next-generation
solution. The platform implementation is aimed at driving enterprise-wide operational efficiencies, supporting digital transformation
objectives, and enhancing long-term scalability and regulatory readiness across the Australia/New Zealand finance ecosystem.

 We
successfully executed a binding, multi-year maintenance and technical upgrade agreement with the captive finance arm of a leading Japanese
automotive manufacturer. The agreement, with a total cost of ownership exceeding $4 million, governs the upgrade and extended support
of the client's retail finance platform through 2027. The scope includes comprehensive system upgrades, implementation of enhanced
security protocols, performance optimization, and full-cycle testing.

 We
broadened our revenue base and expanded our managed service portfolio by securing three new client engagements covering audit, business
process outsourcing (BPO), and standby services. One of these clients is already live on our redesigned standby platform. Collectively,
these contracts are expected to contribute nearly $400,000 in incremental revenues over their respective terms, pursuant to the terms
and service levels defined in each executed agreement.

 We
formalized an agreement with the captive finance division of a prominent North American automotive retailer to conduct a structured discovery
and assessment phase. This engagement, projected to generate approximately $800,000 in revenue, is aimed at evaluating current platform
capabilities, identifying custom development opportunities, and defining the scope for a future technology solution. The outcome of this
phase will inform a potential omnichannel transformation strategy focused on enhancing customer experience and operational efficiency.

 We
have generated approximately $6.1 million in revenue through the successful implementation of client-approved platform modifications
and enhancement requests. These initiatives were executed across multiple regional markets in accordance with the terms of individual
service orders, ensuring continuity, improved performance, and alignment with evolving business needs.

 We
entered into an agreement with a Chinese leasing company to deploy our Transcend Finance Suite, including Omni POS, Contract Management
System, and a customized funding platform compliant with local regulations. The contract is expected to generate approximately $2.7 million
in revenue during the contract term.

 We
partnered with Sindbad Management SPC to implement Transcend Finance Platform (Point-of-Sale, Credit Underwriting, Contract Management)
under a scalable pricing model, supporting high-value asset financing and regional growth. The contract is expected to generate $1.7
million in revenue during the contract term.

 We
secured $1 million in additional revenue for the ongoing Transcend Retail Platform implementation for a U.S. auto manufacturer,
driven by customizations to meet their evolving business needs.

 We
amended an agreement with an existing UK/EU client that will provide additional revenue of 3 million, further strengthening the
long-term partnership.

 We
hired a Vice President of Artificial Intelligence, who has 15+ years in fintech, insurance, and entertainment, to lead Transcend
AI Labs, accelerating our AI-first strategy in asset finance.

 We
announced the go-live of our Transcend Finance platform for the Australian operations of a leading Japanese equipment finance
company, building on our existing partnership in New Zealand and enhancing their regional operations with additional digital self-service
solutions.

 Marketing
and Business Development Activities

 We
continue to pursue a series of strategic marketing and business development initiatives to capitalize on favorable market conditions
and drive growth across our business lines. These efforts reflect our commitment to building a stronger market presence, expanding our
customer base and maintaining a careful focus on profitability. These efforts include: repositioning our brand and messaging; brand strengthening
and awareness; raising industry expertise through speaking engagements and participation in awards and recognitions; accelerating digital
campaigns focused on content marketing; leveraging analytics and marketing automation tools to improve campaign effectiveness and optimize
marketing return on investment; creating comprehensive go-to-market plans for new launches and feature upgrades; customer centric sales
enablement; targeting new global and product markets; using AI to enhance productivity; expanding market reach through participation
in industry associations; and, adopting practices that strengthen leadership and talent retention.

 MATERIAL
TRENDS AFFECTING NETSOL

 Management
has identified the following material trends affecting NETSOL.

 Positive
trends:

 According
 to S&P Global Mobility, the forecast for new vehicle sales worldwide in 2025 is 89.6
 million units, which is a modest 1.7% year-over-year growth in light vehicle sales. And the
 US automotive sales of new vehicles in 2025 are expected to be around 16.2 million units,
 which is a 1.2% to 1.4% increase from 2024. This would be the highest annual sales figure
 since 2019.

 The
 annual inflation rate remained steady for the U.S. at 2.7% for the 12 months ending July
 2025. (USinflationcalculator.com)

 According
 to recent forecasts, China's auto sales in 2025 are expected to reach approximately
 32.9 million units representing a 4.7% year-over-year increase. Sales of New Energy Vehicles
 account of 48.7% of all new car sales in China. (China Automobile Manufacturers Association)

 The
 China-Pakistan Economic Corridor (CPEC) investment, initiated by China, has exceeded $65
 billion from the originally planned $46 billion, in Pakistan's energy and infrastructure
 sectors. In June 2024, China authorized a new $2.3 billion loan at a discounted rate to Pakistan
 as a short-term loan.

 The
 overall size of the mobility market in Europe and the United States is projected to increase
 over $425 billion combined, by 2035 or a compound CAGR of 5% from 2022. (Deloitte Global
 Automotive Mobility Market Simulation Tool)

 The
 global automotive finance market accounted for $378,957 billion in 2024 and is expected to
 increase to $798,657 billion by 2035 at a CAGR of 7.7% according to Global Growth Insights.

 Negative
trends:

 The
 conflict in Gaza has disrupted the entire Middle East region since October 7, 2023. The conflict
 has expanded to neighboring nations such as Syria, Lebanon, and Iran. The unrest and turmoil
 in the region are viewed unfavorably by the regional business community.

 economic conditions in our geographic markets; inflation, economic uncertainty, and increased
 operational costs are pressuring margins and leading companies to prioritize critical investment
 and control spending.

 SaaS
 cybersecurity faces unprecedented challenges as companies increasingly migrate critical functions
 to cloud platforms. Proliferation of AI tools within these platforms has created additional
 attack vectors that require specialized security approaches beyond legacy protections. (JOSYS.COM)

 The
 imposition of tariffs on China and on other US trading partners may affect the price of consumer
 goods including vehicles amongst others, negatively affecting the profitability of many of
 our customers.

 CRITICAL
ACCOUNTING POLICIES

 Our
financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States
("U.S. GAAP"). Preparing financial statements requires management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application
of accounting policies. Critical accounting policies for us include revenue recognition and multiple element arrangements, intangible
assets, software development costs, and goodwill.

 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

 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 post contract support, of its enterprise software solutions for
the lease and finance industry. The Company offers its software using the same underlying technology via 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

 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
post-contract support and services in addition to the licenses. The Company's single performance obligation arrangements are typically
post-contract support renewals, subscription renewals and services engagements.

 For
contracts with multiple performance obligations where the contracted price differs from the standard-alone 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.

revenue is recognized ratably over the initial subscription period committed to by the customer commencing when the product is made available
to the customer. The initial subscription period is typically 12 to 60 months. The Company generally invoices its customers in advance
in quarterly or annual installments and typical payment terms provide that customers make payment within 30 days of invoice.

 Software
Licenses

 Transfer
of control for software is considered to have occurred upon delivery of the product to the customer. The Company's typical payment
terms tend to vary by region, but its standard payment terms are within 30 days of invoice.

 Post
Contract Support

from support services and product updates, referred to as subscription and 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

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

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.

 Significant
Judgments

 More
judgments and estimates are required under Topic 606 than were required under Topic 605. Due to the complexity of certain contracts,
the actual revenue recognition treatment required under Topic 606 for the Company's arrangements may be dependent on contract-specific
terms and may vary in some instances.

 Judgment
is required to determine the SSP for each distinct performance obligation. The Company rarely licenses or sells products on a stand-alone
basis, so the Company is required to estimate the range of SSPs for each performance obligation. In instances where SSP is not directly
observable because the Company does not sell the license, product or service separately, the Company determines the SSP using information
that may include market conditions and other observable inputs. In making these judgments, the Company analyzes various factors, including
its pricing methodology and consistency, size of the arrangement, length of term, customer demographics and overall market and economic
conditions. Based on these results, the estimated SSP is set for each distinct product or service delivered to customers.

 The
most significant inputs involved in the Company's revenue recognition policies are: The (1) stand-alone selling prices of the Company's
software license, and (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 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 recognizes 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.

is recognized over time for the Company's subscription, post contract 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 (unearned 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 unearned 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
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-cancellable license and services starting in future
periods are included in accounts receivable and unearned 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. The Company has applied the following practical expedients:

 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 cash 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, we incur few
direct incremental costs of obtaining new customer contracts. We rarely incur incremental costs to review or otherwise enter into contractual
arrangements with customers. In addition, our sales personnel receive fees that we refer to as commissions, but that are based on more
than simply signing up new customers. Our sales personnel are required to perform additional duties beyond new customer contract inception
dates, including fulfillment duties and collections efforts.

 STOCK-BASED
COMPENSATION

 Our
stock-based compensation expense is estimated at the grant date based on the award's fair value as calculated by the Black-Scholes-Merton
(BSM) option pricing model and is recognized as expense over the requisite service period. The BSM model requires various highly judgmental
assumptions including expected volatility and expected term. If any of the assumptions used in the BSM model changes significantly, stock-based
compensation expense may differ materially in the future from that recorded in the current period. The Company recognizes compensation expense net of actual forfeitures as they occur. Accordingly, no estimate is
made for the future forfeitures at the time of grant.

 GOODWILL

represents the excess of the aggregate purchase price over the fair value of the net assets acquired in a purchase business combination.
Goodwill is reviewed for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the carrying
amount of goodwill may be impaired. In conducting its annual impairment test, the Company first reviews qualitative factors to determine
whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If factors indicate that
the fair value of the reporting unit is less than its carrying amount, the Company performs a quantitative assessment, and the fair value
of the reporting unit is determined by analyzing the expected present value of future cash flows. If the carrying value of the reporting
unit continues to exceed its fair value, the fair value of the reporting unit's goodwill is calculated and an impairment loss equal
to the excess is recorded.

 Recent
Accounting Pronouncement

 See
Note 2 "Summary of Significant Accounting Policies" in the Notes to the Consolidated Financial Statements in Item 8 of Part
II of this Annual Report on Form 10-K, for a full description of recent accounting pronouncements, including the expected dates of adoption.

 RESULTS
OF OPERATIONS

 THE
YEAR ENDED JUNE 30, 2025 COMPARED TO THE YEAR ENDED JUNE 30, 2024

 The
following table sets forth the items in our consolidated statement of operations for the years ended June 30, 2025 and 2024 as a percentage
of revenues.

 For the Years

 2025

 %

 2024

 %

 Net Revenues:

 License fees

 $
 598,633

 0.9
 %

 $
 5,449,991

 8.9
 %

 Subscription and support

 32,934,648

 49.8
 %

 27,952,768

 45.5
 %

 32,554,948

 49.3
 %

 27,990,332

 45.6
 %

 Total net revenues

 100.0
 %

 100.0
 %

 Cost of revenues

 33,513,697

 50.7
 %

 32,108,221

 52.3
 %

 Gross profit

 32,574,532

 49.3
 %

 29,284,870

 47.7
 %

 Operating expenses:

 Selling, general and administrative

 27,796,936

 42.1
 %

 24,388,714

 39.7
 %

 Research and development cost

 1,275,878

 1.9
 %

 1,402,601

 2.3
 %

 Total operating expenses

 29,072,814

 44.0
 %

 25,791,315

 42.0
 %

 Income (loss) from operations

 3,501,718

 5.3
 %

 3,493,555

 5.7
 %

 Other income and (expenses)

 Interest expense

 (871,355
)

 -1.3
 %

 (1,142,166
)

 -1.9
 %

 Interest income

 1,871,040

 2.8
 %

 1,911,258

 3.1
 %

 Gain (loss) on foreign currency exchange transactions

 1,301,613

 2.0
 %

 (1,187,320
)

 -1.9
 %

 Other income

 244,241

 0.4
 %

 148,120

 0.2
 %

 Total other income (expenses)

 2,545,539

 3.9
 %

 (270,108
)

 -0.4
 %

 Net income before income taxes

 6,047,257

 9.2
 %

 3,223,447

 5.3
 %

 Income tax provision

 (1,476,338
)

 -2.2
 %

 (1,145,518
)

 -1.9
 %

 Net income

 4,570,919

 6.9
 %

 2,077,929

 3.4
 %

 Non-controlling interest

 (1,647,686
)

 -2.5
 %

 (1,394,056
)

 -2.3
 %

 Net income attributable to NetSol

 $

 4.4
 %

 $

 1.1
 %

 Net income per share:

 Net income per common share

 Basic

 $
 0.25

 $
 0.06

 $
 0.25

 $
 0.06

 Weighted average number of shares outstanding

 Basic

 11,378,595

 11,421,940

 A
significant portion of our business is conducted in currencies other than the U.S. dollar. We operate in several geographical regions
as described in Note 17 "Segment Information and Geographic Areas" within the Notes to the Consolidated Financial Statements.
Weakening of the value of the U.S. dollar compared to foreign currency exchange rates generally has the effect of increasing our revenues
but also increasing our expenses denominated in currencies other than the U.S. dollar. Similarly, strengthening of the U.S. dollar compared
to foreign currency exchange rates generally has the effect of reducing our revenues but also reducing our expenses denominated in currencies
other than the U.S. dollar. We plan our business accordingly by deploying additional resources to areas of expansion, while continuing
to monitor our overall expenditures given the economic uncertainties of our target markets. In order to provide a framework for assessing
how our underlying businesses performed excluding the effect of foreign currency fluctuations, we compare the changes in results from
one period to another period using constant currency. In order to calculate our constant currency results, we apply the current period
results to the prior period foreign currency exchange rates. In the table below, we present the change based on actual results in reported
currency and in constant currency.

 Favorable

 Favorable

 Total

 (Unfavorable)

 (Unfavorable)

 Favorable

 For the Years

 Change in

 Change due to

 (Unfavorable)

 Constant

 Currency

 Change as

 2025

 %

 2024

 %

 Currency

 Fluctuation

 Reported

 Net Revenues:

 $

 100.0
 %

 $

 100.0
 %

 $
 4,184,791

 $
 510,347

 $
 4,695,138

 Cost of revenues:

 33,513,697

 50.7
 %

 32,108,221

 52.3
 %

 (1,007,408
)

 (398,068
)

 (1,405,476
)

 Gross profit

 32,574,532

 49.3
 %

 29,284,870

 47.7
 %

 3,177,383

 112,279

 3,289,662

 Operating expenses:

 29,072,814

 44.0
 %

 25,791,315

 42.0
 %

 (3,452,110
)

 170,611

 (3,281,499
)

 Income (loss) from operations

 $
 3,501,718

 5.3
 %

 $
 3,493,555

 5.7
 %

 $
 (274,727
)

 $
 282,890

 $
 8,163

 Net
revenues for the years ended June 30, 2025 and 2024 by segment are as follows:

 2025

 2024

 %

 %

 North America

 $
 12,003,827

 18.2
 %

 $
 5,933,797

 9.7
 %

 22.2
 %

 19.5
 %

 Asia-Pacific

 39,440,402

 59.7
 %

 43,491,492

 70.8
 %

 Total

 $

 100.0
 %

 $

 100.0
 %

Fees

fees for the year ended June 30, 2025 were $598,633 compared to $5,449,991 for the year ended June 30, 2024 reflecting a decrease of
$4,851,358 with a change in constant currency of $4,855,917. In the fiscal year ended June 30, 2025, we recognized approximately $487,000
from a new customer in Indonesia. In the fiscal year ended June 30, 2024, we recognized approximately $2,800,000 related to the sale
of our NFS Ascent CMS software to a renowned US auto manufacturer based in China, and we recognized approximately $1,142,000
related to the license renewal with an existing customer, and we recognized approximately $465,000 related to the additional sale of
our NFS Ascent CMS software to a renowned German auto manufacturer based in China, and we recognized approximately $610,000 related
to selling licenses of our digital applications to a current Indonesian customer.

and Support

and support fees for the year ended June 30, 2025, were $32,934,648 compared to $27,952,768 for the year ended June 30, 2024 reflecting
an increase of $4,981,880 with an increase in constant currency of $4,788,597. The increase includes a one-time catch up of approximately
$1,693,000 from five of our customers. Subscription and support fees are recurring in nature, and we anticipate these fees to gradually
increase as we increase our SaaS customer base and implement NFS Ascent.

income for the year ended June 30, 2025, was $32,554,948 compared to $27,990,332 for the year ended June 30, 2024, reflecting an increase
of $4,564,616 with an increase in constant currency of $4,160,167. The increase is mainly due to implementation services in APAC, the
U.S. and Europe.

 Gross
Profit

 The
gross profit was $32,574,532 for the year ended June 30, 2025, compared with $29,284,870 for the year ended June 30, 2024. This is an
increase of $3,289,662 with an increase in constant currency of $3,177,383. The gross profit percentage for the year ended June 30, 2025,
increased to 49.3% from 47.7% for the year ended June 30, 2024. The cost of sales was $33,513,697 for the year ended June 30, 2025, compared
to $32,108,221 for the year ended June 30, 2024, for an increase of $1,405,476 and on a constant currency basis an increase of $1,007,408.
As a percentage of sales, cost of sales decreased from 52.3% for the year ended June 30, 2024, to 50.7% for the year ended June 30, 2025.

 Salaries
and consultant fees increased by $2,174,558 from $23,622,907 for the year ended June 30, 2024, to $25,797,465 for the year ended June
30, 2025, and on a constant currency basis increased by $1,869,462. The increase is due to annual increases in salary. As a percentage
of sales, salaries and consultant expense increased from 38.5% for the year ended June 30, 2024, to 39.0% for the year ended June 30,
2025.

 Travel
decreased by $879,931 from $2,943,442 for the year ended June 30, 2024, to $2,063,511 for the year ended June 30, 2025, and on a constant
currency basis decreased by $901,699. The decrease in travel expense is due to the decrease in travel for the current implementations.
As a percentage of sales, travel expense decreased from 4.8% for year ended June 30, 2024, to 3.1% for the year ended June 30, 2025.

and amortization expense decreased to $952,331 compared to $1,144,809 for the year ended June 30, 2024, or a decrease of $192,478 and
on a constant currency basis a decrease of $202,630.

 Other
costs increased to $4,700,390 for the year ended June 30, 2025, compared to $4,397,063 for the year ended June 30, 2024, or an increase
of $303,327 and on a constant currency basis an increase of $242,275. The increase is mainly due to increase in third party hardware
costs of approximately $267,000.

Expenses

expenses were $29,072,814 for the year ended June 30, 2025, compared to $25,791,315, for the year ended June 30, 2024, for an increase
of $3,281,499 and on a constant currency basis an increase of $3,452,110. As a percentage of sales, it increased from 42.0% to 44.0%.
The increase in operating expenses was primarily due to increases in selling expenses, general and administrative expenses and research
and development costs.

 Selling
and marketing expenses increased by $2,742,951 and on a constant currency basis increased by $2,603,499. The increase is mainly due to
increases in salaries of approximately $2,200,000, travel of approximately $257,000 and other selling expenses of approximately $288,000.

and administrative expenses were $17,501,610 for the year ended June 30, 2025, compared to $16,836,339 at June 30, 2024, or an increase
of $665,271, and on a constant currency basis an increase of $992,703. During the year ended June 30, 2025, salaries increased by approximately
$687,000 or increased by approximately $574,000 on a constant currency basis, due to increases in salaries including bonuses, medical
costs and subsidiary options granted to staff in NetSol PK. The provision for doubtful accounts increased by approximately $496,000 and
on a constant currency basis increased by approximately $477,000. Other general and administrative costs decreased by approximately $518,000
and on a constant currency basis a decrease of approximately $58,000.

 Research
and development costs decreased by approximately $127,000 and on a constant currency basis a decrease of approximately $144,000.

 Income/Loss
from Operations

from operations was $3,501,718 for the year ended June 30, 2025, compared to $3,493,555 for the year ended June 30, 2024. This represents
a slight increase of $8,163 with a decrease of $274,727 on a constant currency basis for the year ended June 30, 2025, compared with
the year ended June 30, 2024. As a percentage of sales, income from operations was 5.3% for the year ended June 30, 2025, compared to
5.7% for the year ended June 30, 2024.

 Other
Income and Expense

 Other
income was $2,545,539 for the year ended June 30, 2025, compared to other expense of $270,108 for the year ended June 30, 2024. This
represents an increase of $2,815,647 with an increase of $2,796,342 on a constant currency basis. The increase is primarily due to the
foreign currency exchange transactions.

the year ended June 30, 2025, we recognized a gain of $1,301,613 in foreign currency exchange transactions compared to a loss of $1,187,320
for the year ended June 30, 2024. The majority of the contracts with NetSol PK are either in U.S. dollars or Euros; therefore, the currency
fluctuations will lead to foreign currency exchange gains or losses depending on the value of the PKR compared to the U.S. Dollar and
the Euro. During the year ended June 30, 2025, the value of the U.S. dollar and the Euro increased 2.1% and 11.9%, respectively, compared
to the PKR. During the year ended June 30, 2024, the value of the U.S. dollar and the Euro decreased 3.1% and 4.6%, respectively, compared
to the PKR.

 Non-controlling

 For
the year ended June 30, 2025, and 2024, the net income attributable to non-controlling interest was $1,647,686 and $1,394,056, respectively.
The increase in non-controlling interest is primarily due to the increase in net income of NetSol PK.

 Net
Income (Loss) Attributable to NetSol

 Net
income was $2,923,233 for the year ended June 30, 2025, compared to $683,873 for the year ended June 30, 2024. This is an increase in
income of $2,239,360 with an increase of $1,678,200 on a constant currency basis, compared to the prior year. For the year ended June
30, 2025, net income per share was $0.25 for basic and diluted shares. For the year ended June 30, 2024, net income per share was $0.06
for basic and diluted shares.

 Non-GAAP
Financial Measures

 Regulation
S-K Item 10(e), "Use of Non-GAAP Financial Measures in Commission Filings," defines and prescribes the conditions for use
of non-GAAP financial information. Our measures of adjusted EBITDA and adjusted EBITDA per basic and diluted share meet the definition
of a non-GAAP financial measure.

 We
define the non-GAAP measures as follows:

 EBITDA
 is GAAP net income before net interest expense, income tax expense, depreciation and amortization.

 Non-GAAP
 adjusted EBITDA is EBITDA plus stock-based compensation expense.

 Adjusted
 EBITDA per basic and diluted share – Adjusted EBITDA allocated to common stock divided
 by the weighted average shares outstanding and diluted shares outstanding.

 We
use non-GAAP measures internally to evaluate the business and believe that presenting non-GAAP measures provides useful information to
investors regarding the underlying business trends and performance of our ongoing operations as well as useful metrics for monitoring
our performance and evaluating it against industry peers. The non-GAAP financial measures presented should be used in addition to, and
in conjunction with, results presented in accordance with GAAP, and should not be relied upon to the exclusion of GAAP financial measures.
Management strongly encourages investors to review our consolidated financial statements in their entirety and not to rely on any single
financial measure in evaluating the Company.

 The
non-GAAP measures reflect adjustments based on the following items:

 EBITDA:
We report EBITDA as a non-GAAP metric by excluding the effect of net interest expense, income tax expense, depreciation and amortization
from net income because doing so makes internal comparisons to our historical operating results more consistent. In addition, we believe
providing an EBITDA calculation is a more useful comparison of our operating results to the operating results of our peers.

 Stock-based
compensation expense: We have excluded the effect of stock-based compensation expense from the non-GAAP adjusted EBITDA and non-GAAP
adjusted EBITDA per basic and diluted share calculations. Although stock-based compensation expense is calculated in accordance with
current GAAP and constitutes an ongoing and recurring expense, such expense is excluded from non-GAAP results because it is not an expense
which generally requires cash settlement by NetSol, and therefore is not used by us to assess the profitability of our operations. We
also believe the exclusion of stock-based compensation expense provides a more useful comparison of our operating results to the operating
results of our peers.

 Non-controlling
interest: We add back the non-controlling interest in calculating gross adjusted EBITDA and then subtract out the income taxes, depreciation
and amortization and net interest expense attributable to the non-controlling interest to arrive at a net adjusted EBITDA.

 Our
reconciliation of the non-GAAP financial measures of adjusted EBITDA and non-GAAP earnings per basic and diluted share to the most comparable
GAAP measures for the years ended June 30, 2025, and 2024 are as follows:

 For the Years

 2025

 2024

 Net Income (loss) attributable to NetSol

 $

 $

 Non-controlling interest

 1,647,686

 1,394,056

 Income taxes

 1,476,338

 1,145,518

 Depreciation and amortization

 1,463,783

 1,721,800

 Interest expense

 871,355

 1,142,166

 Interest (income)

 (1,871,040
)

 (1,911,258
)

 EBITDA

 $
 6,511,355

 $
 4,176,155

 Add back:

 Non-cash stock-based compensation

 208,116

 308,569

 Adjusted EBITDA, gross

 $
 6,719,471

 $
 4,484,724

 Less non-controlling interest (a)

 (2,017,274
)

 (1,810,394
)

 Adjusted EBITDA, net

 $
 4,702,197

 $
 2,674,330

 Weighted Average number of shares outstanding

 Basic

 11,378,595

 11,421,940

 Basic adjusted EBITDA

 $
 0.41

 $
 0.24

 Diluted adjusted EBITDA

 $
 0.41

 $
 0.23

 (a)The reconciliation of adjusted EBITDA of non-controlling interest to net income attributable to non-controlling interest is as follows

 Net Income (loss) attributable to non-controlling interest

 $
 1,647,686

 $
 1,394,056

 Income Taxes

 321,973

 198,923

 Depreciation and amortization

 358,180

 440,302

 Interest expense

 251,658

 354,624

 Interest (income)

 (567,285
)

 (590,170
)

 EBITDA

 $
 2,012,212

 $
 1,797,735

 Add back:

 Non-cash stock-based compensation

 5,062

 12,659

 Adjusted EBITDA of non-controlling interest

 $
 2,017,274

 $
 1,810,394

 LIQUIDITY
AND CAPITAL RESOURCES

 Our
cash position was $17,357,344 at June 30, 2025, compared to $19,127,165 at June 30, 2024.

 Net
cash provided by operating activities was $447,267 for the year ended June 30, 2025, compared to $2,909,388 for the year ended June 30,
2024. At June 30, 2025, we had current assets of $46,319,603 and current liabilities of $19,713,997. We had accounts receivable of $7,527,572
at June 30, 2025, compared to $13,049,614 at June 30, 2024. We had revenues in excess of billings of $19,134,385 at June 30, 2025, compared
to $13,638,547 at June 30, 2024, of which $903,766 and $954,029 are shown as long term as of June 30, 2025, and 2024, respectively. The
long-term portion was discounted by $208,037 and $152,446 at June 30, 2025, and 2024, respectively, using the discounted cash flow method
with interest rates ranging from 4.2% to 17.5%, for the year ended June 30, 2025, and 2024 respectively. During the year ended June 30,
2025, our revenues in excess of billings were reclassified to accounts receivable pursuant to billing requirements detailed in each contract.
The combined totals for accounts receivable and revenues in excess of billings decreased by $26,204 from $26,688,161 at June 30, 2024,
to $26,661,957 at June 30, 2025. Accounts payable and accrued expenses, and current portions of loans and lease obligations amounted
to $8,010,844 and $8,240,061, respectively, at June 30, 2025. Accounts payable and accrued expenses, and current portions of loans and
lease obligations amounted to $8,232,342 and $6,276,125, respectively, at June 30, 2024. The average days sales outstanding for the years
ended June 30, 2025, and 2024 were 147 and 151 days respectively. The days sales outstanding have been calculated by taking into consideration
the average combined balances of accounts receivable and revenue in excess of billings.

 Net
cash used by investing activities amounted to $1,274,865 for the year ended June 30, 2025, compared to $291,538 for the year ended June
30, 2024. We had net purchases of property and equipment of $1,265,987 compared to $291,538 for the comparable period last fiscal year.

 Net
cash provided by financing activities was $822,881 compared to $239,551, for the years ended June 30, 2025, and 2024, respectively. During
the year ended June 30, 2025, we received bank proceeds of $2,920,149 compared to $756,936 during the year ended June 30, 2024. During
the year ended June 30, 2025, we had net payments for bank loans and capital leases of $773,535 compared to $517,385 for the year ended
June 30, 2024. During the year ended June 30, 2025, Company employees exercised 220,00 options of common stock for $473,000, NetSol PK,
a subsidiary of the Company, paid a dividend of $306,799 to the non-controlling shareholders, and NetSol PK purchased 2,690,251 shares
of its common stock from the open market for $1,503,662. We are operating in various geographical regions of the world through our various
subsidiaries. Those subsidiaries have financial arrangements from various financial institutions to meet both their short and long-term
funding requirements. These loans will become due at different maturity dates as described in Note 12 of the financial statements. We
are in compliance with the covenants of the financial arrangements and there is no default which may lead to early payment of these obligations.
We anticipate paying back all these obligations on their respective due dates.

 We
typically fund the cash requirements for our operations in the U.S. through our license, services, and maintenance agreements, intercompany
charges for corporate services, and through the exercise of options. As of June 30, 2025, we had approximately $17.4 million of cash,
cash equivalents and marketable securities of which approximately $16.4 million is held by our foreign subsidiaries. As of June 30, 2024,
we had approximately $19.1 million of cash, cash equivalents and marketable securities of which approximately $18.2 million was held
by our foreign subsidiaries.

 We
remain open to strategic relationships that would provide value added benefits. The focus will remain on continuously improving cash
reserves internally.

 As
a growing company, we have on-going capital expenditure needs based on our short-term and long-term business plans. Although our requirements
for capital expenses vary from time to time, for the next 12 months, we anticipate needing working capital of $1.5 to $2 million for
APAC, U.S. and European new business development activities and infrastructure enhancements.

 Financial
Covenants

 Our
UK based subsidiary, NTE, has an approved overdraft facility of 300,000 ($410,959) which 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. The Pakistani subsidiary, NetSol PK has an approved facility for
export refinance from Askari Bank Limited amounting to Rupees 600 million ($2,111,561) and a running finance facility of Rupees 4.1 million
($14,256). NetSol PK has an approved facility for export refinance from another Habib Metro Bank Limited amounting to Rupees 1.3 billion
($4,575,048). These facilities require NetSol PK to maintain a long-term debt equity ratio of 60:40 and the current ratio of 1:1. NetSol
PK also has an approved export refinance facility of Rs. 380 million ($1,337,322) from Samba Bank Limited. During the loan tenure, these
two facilities 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 the date of this report, we are in compliance with the financial covenants associated with our borrowings. The maturity dates of the
borrowings of respective subsidiaries may accelerate if they do not comply with these covenants. In case of any change in control in
subsidiaries, they may have to repay their respective credit facilities.

 Dividends
and Redemption

 It
has been our policy to invest earnings in growth rather than distribute earnings as common stock dividends. This policy, under which
common stock dividends have not been paid since our inception is expected to continue but is subject to regular review by the Board of
Directors.

 Contractual
Obligations

 Our
contractual obligations are as follows:

 Payment due by period

 More than 5

 Contractual Obligation

 Total

 0 - 1 year

 1-3 Years

 3-5 Years

 years

 Debt Obligations

 D&O Insurance

 $
 119,542

 $
 119,542

 $
 -

 $
 -

 $
 -

 Bank Overdraft Facility

 -

 -

 -

 Bank Overdraft Facility II

 -

 -

 -

 -

 -

 Term Finance Facility

 -

 -

 -

 -

 Loan Payable Bank - Export Refinance

 1,759,634

 1,759,634

 -

 -

 -

 Loan Payable Bank - Running Finance

 Loan Payable Bank - Export Refinance II

 1,337,322

 1,337,322

 -

 -

 -

 Loan Payable Bank - Export Refinance III

 4,575,048

 4,575,048

 -

 -

 -

 Term Finance Facility

 -

 -

 -

 -

 -

 Sale and Leaseback Financing

 76,618

 29,660

 46,958

 -

 -

 Insurance financing

 -

 -

 -

 -

 -

 Short Term Loan

 -

 -

 -

 -

 -

 Subsidiary Finance Leases

 101,505

 13,855

 87,650

 -

 -

 -

 -

 Operating Lease Obligations

 766,616

 433,242

 332,938

 -

 -

 Total

 $
 9,141,285

 $
 8,673,303

 $
 467,546

 $

 $
 -

 Off-Balance
Sheet Arrangements

 We
do not maintain any off-balance sheet arrangements, transactions, obligations or other relationships with unconsolidated entities that
would be expected to have a material current or future effect upon our financial condition or results of operations.

 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 We
are exposed to financial market risks, including changes in currency exchange rates and interest rates.

Currency Exchange Risk

 Economic
Exposure

 We
transact business in various foreign currencies and have significant international revenues, as well as costs denominated in foreign
currencies. This exposes us to the risk of fluctuations in foreign currency exchange rates. Since the majority of the Company's
operations are based in the Asia Pacific region where the Pakistan Rupee is continuously losing its value against the US Dollar and we
don't have any imports; therefore, we believe it is counter-productive to hedge this exposure. The devaluation of the Pakistan
Rupee results in a foreign exchange gain to the Company.

 Transaction
Exposure

 Our
exposure to foreign currency transaction gains and losses is the result of certain net receivables due from our foreign subsidiaries
and customers being denominated in currencies other than the functional currency of the subsidiary, primarily the Euro, Yuan, Baht and
the Pakistan Rupee. Our foreign subsidiaries conduct their businesses in local currency. Since the majority of the Company's operations
are based in the Asia Pacific region where the Pakistan Rupee is continuously losing its value against the US Dollar and we don't
have any imports; therefore, we believe it is counter-productive to hedge this exposure.

 ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 The
Consolidated Financial Statements that constitute Item 8 are included at the end of this report on page F-1.

 ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 NETSOL's
financial statements for the fiscal years ended June 30, 2025, and June 30, 2024, did not contain an adverse opinion or disclaimer of
opinion, and were not qualified or modified as to uncertainty, audit scope, or accounting principles.

 In
connection with the audit of NETSOL's financial statements for the fiscal year ended June 30, 2025, and 2024, there were no disagreements,
disputes, or differences of opinion with Fortune CPA. ("Fortune") on any matters of accounting principles or practices, financial
statement disclosure, or auditing scope and procedures, which, if not resolved to the satisfaction of Fortune would have caused Fortune
to make reference to the matter in their report.

 ITEM
9A. CONTROLS AND PROCEDURES

 Evaluation
of Disclosure Controls and Procedures

 Our
management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure
controls and procedures pursuant to Rule 13a-15 under the Exchange Act, as of the end of the period covered by this Annual Report on
Form 10-K. Based upon that evaluation, the Chief Financial Officer and Chief Executive Officer concluded that our disclosure controls
and procedures were effective.

 Management's
Report on Internal Control over Financial Reporting

 Our
management has the responsibility to establish and maintain adequate internal controls over our financial reporting, as defined in Rule
13a-15(f) under the Securities and Exchange Act of 1934. Our internal controls are designed to provide reasonable assurance regarding
the reliability of our financial reporting and the preparation of our external financial statements in accordance with generally accepted
accounting principles (GAAP).

 Due
to inherent limitations of any internal control system, management acknowledges that there are limitations as to the effectiveness of
internal controls over financial reporting and therefore recognize that only reasonable assurance can be gained from any internal control
system. Accordingly, our internal control system may not detect or prevent material misstatements in our financial statements and projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 Under
the supervision and participation of management, including the Chief Executive Officer and Chief Financial Officer, we have performed
an assessment of the effectiveness of our internal controls over financial reporting as of June 30, 2025. This assessment was based on
the criteria established in Internal Control-Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on the results of our assessment, the Company has determined that as of June 30, 2025, the Company's
internal control over financial reporting is effective.

 Changes
in Internal Control over Financial Reporting

 There
have been no changes in our internal controls over financial reporting during the fourth quarter of fiscal year 2025, that have materially
affected, or are reasonable likely to materially affect, the Company's internal control over financial reporting (as defined in
Exchange Act Rules 13a – 15(f) and 15d – 15(f)).

 ITEM
9B. OTHER INFORMATION

 Rule
10b5-1 Trading Plans

the fiscal quarter ended June 30, 2025, none of the Company's directors or executive officers adopted, modified or terminated any
contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense
conditions of Rule 10b5-1(c) or any "non-Rule 10b5-1 trading arrangement."

 ITEM
9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 NONE

 PART
III

 ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 Section
16(a) Beneficial Ownership Reporting Compliance

 Section
16(a) of the Securities Exchange Act of 1934, as amended, requires that the Company's directors and executive officers and persons
owning more than 10% of the outstanding Common Stock, file reports of ownership and changes in ownership with the Securities and Exchange
Commission ("SEC"). Executive officers, directors and beneficial owners of more than 10% of the Company's Common Stock
are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.

 Based
solely on copies of such forms furnished as provided above, or written representations that no such forms were required, the Company
believes that during the fiscal year ended June 30, 2025, all Section 16(a) filing requirements applicable to its executive officers,
directors and beneficial owners of more than 10% of its Common Stock were complied with.

 CHANGE
IN MANAGEMENT AND BOARD OF DIRECTORS

 Board
of Directors

 At
the 2024 Annual Shareholders Meeting held in June 2025, a five-member board stood for election. The members were elected and, according
to the bylaws of the Company, shall retain their position as directors until the next meeting. The board of directors is made up of Mr.
Najeeb U. Ghauri (Chairman of the Board), Mr. Mark Caton, Ms. Malea Farsai, Mr. Kausar Kazmi and Mr. Ian Smith. Mr. Michael Francis did
not stand for re-election due to personal reasons and Mr. Ian Smith was nominated and elected to the Board.

 Committees

the fiscal year 2025, the Audit Committee, the Compensation Committee and the Nominating and Corporate Government Committee were
structured as follows: The Audit Committee consisted of Mr. Kazmi, as Chair, with Mr. Caton and Mr. Francis as members. The
Compensation Committee consisted of Mr. Caton, as Chair, with Mr. Kazmi and Mr. Francis as its members. The Nominating and Corporate
Governance Committee consisted of Mr. Francis, as Chair, with Mr. Caton and Mr. Kazmi as its members. Following the annual
shareholders meeting, Mr. Ian Smith was appointed as the Chair of the Nominating and Corporate Governance Committee and was
appointed as a member of the Audit Committee and the Compensation Committee. Mr. Francis is no longer a member of the board of
directors, and he will no longer serve on these committees.

 The
table below provides the membership for each of the committees during Fiscal Year 2025.

 Nominating
 and

 Audit

 Governance

 Committee

 Committee

 Committee

 Najeeb
 Ghauri

 Malea
 Farsai

 Mark
 Caton (I)

 X

 X
(C)

 X

 Kausar
 Kazmi (I)

 X
(C)

 X

 X

 Michael
 Francis * (I)

 X

 X

 X
(C)

 Ian
 Smith ** (I) (N)

 *

 Mr. Francis's term ended June 2025.

 **

 Mr. Smith was elected to the Board in June 2025 and was appointed
as a committee member in July 2025.

 (I)

 Denotes an Independent Director.

 (C)

 Denotes the Chairperson of the Committee.

 (N)

 Mr. Smith became the Nominating Committee Chairman in July
2025.

 During the fiscal year 2025, the Audit Committee met four times, the Compensation
Committee met once and the Nominating and Corporate Governance Committee met one time.

 DIRECTORS
AND EXECUTIVE OFFICERS

 The
following table sets forth the names and ages of the current directors and executive officers of the Company, the principal offices and
positions with the Company held by each person and the date such person became a director or executive officer of the Company. The Board
of Directors elects the executive officers of the Company annually. Each year the stockholders elect the Board of Directors. The executive
officers serve varying terms until their death, resignation or removal by the Board of Directors. In addition, there was no arrangement
or understanding between any executive officer and any other person pursuant to which any person was selected as an executive officer.

 The
directors and executive officers of the Company are as follows:

 Name

 Year First Elected as an Officer or Director

 Age

 Position Held with the Registrant

 Family Relationship

 Najeeb Ghauri

 1997

 Chief Executive Officer, Chairman and Director

 Brother of Naeem Ghauri

 Naeem Ghauri

 1999

 President

 Brother of Najeeb Ghauri

 Roger Almond

 2013

 Chief Financial Officer

 None

 Patti L. W. McGlasson

 2004

 Sr. V.P., Legal and Corporate Affairs; Secretary, General Counsel

 None

 Mark Caton

 2002

 None

 Malea Farsai

 2018

 Director; Corporate Counsel

 None

 Syed Kausar Kazmi

 2019

 None

 Michael Francis

 2023

 None

 Ian Smith

 2025

 None

 Business
Experience of Officers and Directors:

 NAJEEB
U. GHAURI is the Chief Executive Officer and Chairman of NETSOL. He has been the Co-founder and director of the Company since 1997,
Chairman since 2003 and Chief Executive Officer from January 1998 to September 2002 and from October 2006 to present. Mr. Ghauri was
responsible for NETSOL listing on NASDAQ in 1999 and NETSOL Pakistan subsidiary listing on the Karachi Stock Exchange in 2005. Mr. Ghauri
served as the Company's Chief Executive Officer from 1999 to 2001 and as the Chief Financial Officer from 2001 to 2005. As CEO,
Mr. Ghauri is responsible for managing the day-to-day operations of the Company, as well as the Company's overall growth and expansion
plan. In 2017, Mr. Najeeb Ghauri as the CEO, implemented a Company-wide initiative cutting costs which saved the Company in excess of
$7,000,000. Mr. Ghauri was also instrumental in the substantial increase in revenue for fiscal year end 2015. In addition, Mr. Ghauri
traveled overseas multiple times to execute the largest contract for the Company, worth over $100 million, in December 2015. Under his
watch, NETSOL has become a leading player in China with innovation and a cutting-edge technology.

 In
September 2020, Mr. Ghauri was presented with the highest civilian award in Pakistan, "Sitar e Imtiaz", a medal of pride,
in recognition for his work in IT and charitable causes in Pakistan. This medal was conferred by the President of Pakistan at the President
House in Islamabad, Pakistan. Prior to joining the Company, Mr. Ghauri was part of the marketing team of Atlantic Richfield Company (ARCO)
(now acquired by BP), a Fortune 500 company, from 1987-1997. Prior to ARCO, he spent nearly five years with Unilever as brand and sales
managers. Mr. Ghauri attended Eastern Illinois University in 1977-78 for Bachelor of Science degree in Management/Economics. He earned
an M.B.A. in Marketing Management from Peter F. Drucker School of Management, Claremont, California in 1981. Mr. Ghauri was elected Vice
Chairman of US Pakistan Business Council in 2006, a Washington D.C. based council of US Chamber of Commerce. He is also very active in
several philanthropic activities in emerging markets and is a founding director of Pakistan Human Development Fund, a non-profit organization,
a partnership with UNDP to promote literacy, health services and poverty alleviation in Pakistan. Mr. Ghauri has participated in NASDAQ
opening and/or closing bell ceremonies in 2006, 2008,2009, 2015 and 2020.

and Qualifications: Mr. Ghauri has an extensive executive, operational and strategic leadership experience in a global setting and
substantial experience in establishing management performance objective and establishing goals. Mr. Ghauri not only serves the Board
with his experience as a Chief Executive Officer, but also his skills and insight into global operational logistics, which he developed
over the course of his 25-year career in technology industry.

 NAEEM
GHAURI was a Director of the Company from 1999 through 2020 and was the Company's Chief Executive Officer from August 2001
to October 2006. Mr. Ghauri is also a co-founder of the Company. Currently, Mr. Ghauri serves as the President and Director of Global
Sales of NETSOL, director of NETSOL (UK) Ltd., a wholly owned subsidiary of the Company located in London, and Chairman of NetSol Technologies
Limited in Pakistan. While instrumental in numerous transactions, his most significant contribution to the revenue of the Company was
his role in overseeing and leading the closing of the largest contract to date for the Company worth $100 million signed in December
2015. More recently, Mr. Ghauri headed the sales team that signed a contract valued in excess of $35 million. Mr. Ghauri spearheaded
the Innovation practice of the Company while he was located in Thailand with an eye towards working with rideshare platforms as sustainable
business models for the Company as the CEO of OTOZ, Inc. He is currently based out of NetSol's Pakistan office,
Prior to joining the Company, Mr. Ghauri was Program Director for Mercedes-Benz Finance Ltd., from 1994-1999. Mr. Ghauri supervised over
200 project managers, developers, analysts and users in nine European Countries. Mr. Ghauri is a board member of Drivemate Co., Ltd.,
the Company's partner in Thailand, as a representative of NetSol. Mr. Ghauri earned his degree in computer science from Brighton
University in England.

and Qualifications: Mr. Naeem Ghauri has served in many leadership capacities within the Company throughout the past 23 years. Through
his various senior leadership positions and extensive executive experience, Mr. Ghauri brings to NetSol his unique insight related to
technology, innovation, marketing, and growth, including digital and mobility strategy.

 ROGER
ALMOND was appointed Chief Financial Officer on September 9, 2013. Since 2007, Roger Almond held the position of Senior Manager at
Pickard & Green Certified Public Accountants where he and his team were responsible for assisting national and international companies
with their financial reporting requirements to the SEC. Roger Almond's duties also included overseeing multiple entity consolidations,
converting financial data to US GAAP, preparing financials statements, footnotes and MD&A. Prior to his current position, Roger Almond
held the position of Assurance Manager at Grant Thornton LLP, in Los Angeles, California from 2003-2006. From November 1999 to August
2003, he was the Chief Financial Officer of Keysor Century Corporation located in Saugus, California.

 Roger
Almond received his BS in Accounting from Brigham Young University in 1991 and he is a Certified Public Accountant licensed in California.
He has also completed executive management courses at UCLA in 2001.

and Qualifications: Through his senior leadership as Chief Financial Officer, Mr. Almond possesses extensive knowledge in several
important business areas, including public company accounting, leadership, risk assessment, and international, cross-border accounting.

 PATTI
L. W. MCGLASSON joined NETSOL as General Counsel in January 2004 and was elected to the position of Secretary in March 2004. She
was appointed Senior Vice President, Corporate and Legal Affairs in 2013.

 In
the role of General Counsel, Ms. McGlasson is responsible for leading NETSOL's legal department company-wide. She is also responsible
for the implementation of the Company's internal corporate governance and policy plans, ethics and business conduct. She oversees
all board meetings in her executive position as corporate secretary. Ms. McGlasson is a member of the Board's Cybersecurity Committee.

 Ms.
McGlasson has over 30 years of experience in corporate law, mergers and acquisitions, business and cross-border transactions and securities
law. Immediately prior to joining NETSOL, Patti practiced at Vogt & Resnick, law corporation. She was admitted to practice in California
in 1991.

 She
received her Bachelor of Arts in Political Science in 1987 from the University of California, San Diego and, her Juris Doctor and Masters
in Law in Transnational Business from the University of the Pacific, McGeorge School of Law, in 1991 and 1993, respectively. As part
of her Masters in Law in Transnational Business, she interned at the law firm of Loeff Claeys Verbeke in Rotterdam, the Netherlands in
1991.

and Qualifications: As General Counsel, Ms. McGlasson offers extensive knowledge in several important strategic areas, including
innovative problem-solving related to global risks and opportunities. Her legal expertise also helps NetSol navigate cross-cultural and
cross-border opportunities.

 MARK
CATON joined the Board of Directors in 2007. Mr. Caton is currently President of Centela Capital, Inc. a diversified financial services
company, a position he has held since 2006. Prior to joining Centela Capital, Mr. Caton was President of NETSOL Technologies USA, responsible
for US sales, from June 2002 to December 2003. Mr. Caton was previously employed by ePlus from 1994 to 2002 as Senior Vice President-Business
Development. He was a member of the UCLA Alumni Association Board of Directors and served on the Board of Directors of NETSOL from 2002-2005.
Mr. Caton is the Chair of the Compensation Committee and a member of the Audit, Nominating and Corporate Governance, and Cybersecurity
Committees. Mr. Caton received his BA from UCLA in psychology in 1971.

and Qualifications: Mr. Caton serves the Board with his 46 years of experience in sales, marketing and management in the financial
leasing and software industries.

 MALEA
FARSAI joined the Board of Directors for the first time in 2018 and is currently the Company's Corporate Counsel. Before
joining NETSOL in March 2000, Ms. Farsai was an associate at the law firm of Horwitz and Beam where she represented both domestic and
international private and public clients from technology to apparel in various transactions from 1996-2000. She has also worked on
the formation of business startups and IPOs. Ms. Farsai was on the team that took NETSOL public and is the one who listed NETSOL on
NASDAQ in 1999 and has maintained its listing since then to current. After two decades with the Company, Ms. Farsai continues to
work part-time as Corporate Counsel overseeing the Company's insurance as well as day-to-day corporate legal needs. She has
also obtained many of NETSOL's various trademarks. Ms. Farsai serves as Chair of the Board's Cybersecurity Committee,
where she provides oversight into the Company's insurance strategy and ensures the Board is apprised of the ongoing
implementation of enterprise-wide cybersecurity processes and procedures. She has effectively established a 501(c)(3) foundation for
NETSOL to continue its charitable work globally. Ms. Farsai received her B.A. degree from University of California, Irvine and her
J.D. in 1996, and has been a member of the California State Bar since 1996. She serves on the board of various charitable
organizations in Los Angeles.

and Qualifications: Ms. Farsai has served the Company and its legal department since its inception and has a breadth of knowledge
and understanding about NETSOL's business through her role as Corporate Counsel. She also has an understanding of Public Company
corporate governance as well as the management and retention of a diverse group of employees.

 SYED
KAUSAR KAZMI joined the Board of Directors in 2019. Mr. Kazmi brings over 40 years of expertise in the banking industry and is currently
the Head of Commercial Banking and Business Development at Habib Bank Zurich PLC, located in London where he has served in this capacity
since 2016. Prior to this position, Mr. Kazmi served as the Head of Business Development for UK and Europe at Habib Bank AG Zurich in
London from 2012-2016, before which Mr. Kazmi was the CEO of the UK operations of Habib Bank AG Zurich from 2009-2012. In 2018, Mr. Kazmi
was awarded by Power 100, Parliamentary Review in association with The British Publishing Company a "Lifetime Achievement Award"
for his significant and lasting impact on the banking sector. In addition, Mr. Kazmi has been awarded by the Asian Media Group the "GG2
Power List" celebrating Britain's 101 most influential Asians from 2016-2018.

 Mr.
Kazmi received his BSc in Chemical Engineering with II Class Honors from Habib Institute of Technology in 1974. He sits on the board
of many charitable organizations, with a focus on helping raise funds. Mr. Kazmi is the Chair of the Audit Committee and is a member
of the Nominating and Corporate Governance and Compensation Committees.

and Qualifications: Mr. Kazmi has strong financial services and management expertise. He directs the operations of a financial services
business, expending its focus on business development.

 MICHAEL
FRANCIS served his first year on the Board of Directors in 2023. Mr. Francis brings over 30 years of expertise in the banking and
finance industry. He is currently Joint Managing Partner of Alderson Francis Associates Ltd, which provides business consulting to UK
finance, software, and private equity businesses. Prior to this, he was Co-Head of Investment Banking at Investec Bank UK PLC, until
October 2020. He was at Investec for 18 years, in various roles, most significantly as the founder and CEO of Investec Asset Finance
PLC, which is a significant client of NETSOL. From November 2022 to May 2023, Mr. Francis served as an interim executive director for
VLS, a subsidiary of NTE to utilize his Financial Conduct Authority (FCA) authorization to assist VLS in strategic management of its
business and to meet VLS's FCA requirements. Mr. Francis also held senior management positions at Barclays Bank PLC and ANZ Investment
Bank. Mr. Francis received his BSc in Biochemistry with II Class Honors from The University College of Wales, Aberystwyth in 1987. He
is also a Fellow of the Institute of Chartered Accountants in England and Wales, qualifying with Ernst & Young in 1992. Mr. Francis
is currently a trustee of the School of Hard Knocks located in the United Kingdom. He also served as the Chair of the Finance Committee
of The Beacon School, located in the UK, for nine years. In September 2023, Mr. Francis was appointed as the Chair of the Nomination
and Corporate Governance Committee and a member of the Audit and Compensation Committees and served in these positions until the end
of his board term in June 2025.

and Qualifications: Mr. Francis brings to the Board a seasoned expertise in financial services strategy, especially in the field
of Lease and Finance as well as management proficiency.

 IAN
SMITH was nominated to the Board of Directors for the first time this year in June 2025. Mr. Smith brings over 30 years' experience
in the financial services industry. As a highly experienced international CEO, with BMW Groups' largest financial services business/region,
he was responsible and accountable for a greater than $50 billion balance sheet and P&L of over $600 million NOI per year. He held
various roles with BMW Groups but most significantly as Chief Executive Officer for BMW Group Financial Services-USA and the Americas
from January 2017 through December 2021. He is currently an investor in and President of MIP, Inc. a medical textiles business operating
in the UK, Germany, Canada and other international markets. Mr. Smith received his BTEC National Diploma, Business & Finance at Wigan
College of Technology in 1989. He completed the Professional Management Foundation Program at the Institute of Personnel Management in
1991. He received a post graduate certificate from Edinburgh Business School, Herriot-Watt University in 2006 and finally a Certificate
in Company Direction from the Institute of Directors in 2013. Mr. Smith has board experience and currently serves as an advisory board
member of Spring Free EV, a US-based Fintech Company. Mr. Smith is a member of the Audit and Compensation Committee and is chair of the
Nominating and Corporate Governance Committee.

and Qualifications: Mr. Smith brings to the Board a seasoned expertise in automotive financial services strategy, a depth of experience
in product advancement through digitization and versatile and proven management proficiency.

 CORPORATE
GOVERNANCE

 Code
of Ethics & Insider Trading Policy

 The
Company adopted its Code of Ethics and Business Conduct, as amended and restated on September 9, 2013, applicable to every officer, director
and employee of the Company, including, but not limited to the Company's principal executive officer, principal financial officer,
and principal accounting officer or controller, or persons performing similar functions. Our Code of Business Conduct & Ethics has
been posted on our website and may be viewed at  Our Company has an Insider Trading Policy
which explains the insider trading rules to all employees and proscribes employee conduct as it relates to trading in shares of stock
of the Company. Our insider trading policy is set forth in full in the Company's Code of Ethics and Business Conduct.

 Audit
Committee

 The
Company has an Audit Committee whose members are the independent directors of the Company, specifically, Mr. Kazmi, Mr. Caton, and Mr.
Francis with Mr. Smith replacing Mr. Francis after being elected to the Board in June 2025 and being appointed as a member of the Audit
Committee in July 2025. Mr. Kazmi is the current Chair of the Audit Committee.

 Audit
Committee Financial Expert

 The
Company has identified its audit chairperson, Mr. Kausar Kazmi as its Audit Committee financial expert. Mr. Kazmi is an independent board
member as the term is defined in the Nasdaq Listing Rules. Mr. Kazmi's over 40 years of experience in the banking industry including
his current tenure as Head of Commercial Banking and Business Development for UK and Europe for Habib Bank AG Zurich as well as his service
as a board member on various charities as the board member responsible for fundraising, provides him with an understanding of generally
accepted accounting principles and financial reporting. Additionally, this experience provides an ability to assess the general application
of accounting principles in connection with the accounting for estimates, accruals and reserves; experience analyzing financial statements
that were comparable in the breadth and complexity of issues that can be reasonably expected to be raised by the Company's financial
statements; an understanding of internal control over financial reporting; and an understanding of audit committee functions.

 ITEM
11-EXECUTIVE COMPENSATION

 Introduction

 Our
Compensation Committee is responsible for establishing and overseeing compensation programs that comply with NetSol's
executive compensation philosophy. As described in this Compensation Discussion and Analysis ("CD&A"), the
Compensation Committee follows a disciplined process for setting executive compensation. This process involves analyzing factors
such as company performance, individual performance, strategic goals and competitive market data to arrive at each element of
compensation. The Compensation Committee approves compensation decisions for all executive officers. When needed, an independent
compensation consultant helps the Compensation Committee by providing advice, information, and an objective opinion. This CD&A
will focus on the compensation awarded to NetSol's "named executive officers"—the Chief Executive Officer,
Chief Financial Officer, and General Counsel, Corporate Secretary. You can find more complete information about all elements of
compensation for the named executive officers in the following discussion and in the Summary Compensation table that appears on page
40.

 Fiscal
2024 Executive Compensation Highlights and Governance

 This
section identifies the most significant decisions and changes made regarding NETSOL's executive compensation in fiscal year 2024.

 Shareholder
Approval of Compensation

 At
the last annual general meeting held on June 24, 2025, shareholders expressed support for our executive compensation programs, with 73%
of votes cast at the meeting voting to ratify the compensation of our named executive officers. Although the advisory shareholder vote
on executive compensation is non-binding, the Compensation Committee has considered, and will continue to consider, the outcome of the
vote and the sentiments of our shareholders when making future compensation decisions for the named executive officers. Based on the
results from our last annual general meeting, the Compensation Committee believes shareholders support the Company's executive
compensation philosophy and the compensation paid to the named executive officers.

 Taking
into account the support of this plan at the June 24, 2025, Annual Shareholders Meeting, the Compensation Committee believes the compensation
program meaningfully explains the Compensation Committee's compensation decisions and its determination to tie long term incentives
of the Chief Executive Officer to performance criteria. The Compensation Committee continues to reach out to its shareholders regarding
their positions on the Company's compensation program. In connection with the proxy solicitations, the executive compensation was
discussed with certain of our top shareholders and their general acceptance of the compensation structure is reflected in the proxy vote
results. Accordingly, the Compensation Committee will continue to provide the CEO with a bonus criterion that is based on total revenues
and income from operations on a graduated basis. Bonuses would be paid 60% in cash and 40% in stock valued at the share price on June
30 th of the fiscal year in which it was earned.

 Governance
and Evolving Compensation Practices

 The
Compensation Committee and the Board are aware of evolving practices in executive compensation and corporate governance. In response,
we have adopted and/or maintained certain policies and practices that are in keeping with "best practices" in many areas.
For example:

 The Compensation Committee may periodically engage an independent compensation consultant to evaluate our chief executive officer's
executive compensation practices in comparison to a peer group.

 We do not provide excessive executive perquisites to our named executive officers.

 Our incentive plans expressly prohibit repricing of options (directly or indirectly) without prior shareholder approval.

 Our policy on the prevention of insider trading prohibits various types of transactions involving Company stock or securities, including
short sales, options trading, hedging, margin purchases and pledges.

 Our stock ownership guidelines require our executive officers to align their long-term interests with those of our stockholders.

 Our policy prohibits the named executive officers from selling any newly issued shares for a period of three months, in an open market
transaction.

 Beginning with our fiscal year 2019 to current, we modified our compensation practices for our CEO to tie a significant portion to
financial results both on a top line and bottom-line basis.

Compensation Overview

 For
2025, compensation designed for our executive officers consisted of:

 Base
 Salary

 Cash
 awards at the discretion of the Compensation Committee

 Stock
 purchase options; and

 Ability
 to participate generally in all group health and welfare benefit programs and tax-qualified
 retirement plans on the same basis as applicable to all of our employees.

 In
response to discussions, we have had with certain shareholders and given the percentage voting in favor of our executive compensation,
beginning with the 2019 fiscal year, Chief Executive Officer compensation shall consist of:

 Base
 Salary

 Short-term
 cash awards conditioned upon achieving objective performance targets

 Long-term
 equity in the form of time and objective performance targets; and

 Ability
 to participate generally in all group health and welfare benefit programs and tax-qualified
 retirement plans on the same basis as applicable to all of our employees.

 The
Compensation Committee administers the cash and non-cash compensation programs applicable to our executive officers. The Compensation
Committee makes all decisions about executive officer compensation for the Chief Executive Officer and the remaining named executives
after discussion with our Chief Executive Officer about his direct reports. The Compensation Committee has often refined the direct reports'
compensation recommendations made by the Chief Executive Officer. Our Chief Executive Officer's compensation is determined solely
by the Compensation Committee, which, consistent with NASDAQ requirements, is comprised exclusively of independent directors, and the
Chief Executive Officer does not participate in Committee decisions surrounding his compensation.

 Independent
Compensation Consultant

 The
Compensation Committee retained Compensation Resources, Inc. as its independent compensation consultant in prior years. Compensation
Resources, Inc., when consulted, provides chief executive officer and director compensation consulting services to the Compensation
Committee, including a competitive market analysis of peers and the base salary, total cash compensation and total direct
compensation. Interactions with Compensation Resources was limited to the Compensation Committee Chair and interaction with
executives was generally limited to discussions as required to compile information at the Compensation Committee's direction.
Based on these factors and its own evaluation of Compensation Resources' independence pursuant to the requirements approved
and adopted by the SEC, the Compensation Committee has determined that the work performed by Compensation Resources does not raise
any conflicts of interest. During fiscal year 2025, Compensation Resources did not provide services to the Company as there were no material changes to any executive's compensation.

Philosophy and Objectives

 Our
executive compensation philosophy calls for competitive total compensation that will reward executives for achieving individual and corporate
performance objectives and will attract, motivate and retain leaders who will drive the creation of shareholder value. It incorporates
elements that create shareholder value by driving financial performance, retaining a high-performing and talented executive team, and
aligning the interests of the executive team with the interests of shareholders. The Compensation Committee reviews the compensation
and benefit programs for executive officers, including the named executive officers, and performs an annual assessment of the Company's
executive compensation policy. In determining total compensation, the Compensation Committee considers the objectives and attributes
described below.

 Executive
 Compensation Principles

 Shareholder
 Alignment

 Our
 executive compensation programs are designed to create shareholder value.

 Long-term
 incentive awards, delivered in the form of equity, make up a portion of our executives' total compensation and closely align
 the interests of executives with the long-term interests of our shareholders. Our policy prohibits the named executive officers from
 selling any newly issued shares for a period of three months, on an open market transaction.

 Performance
 based

 Long-term
 incentive awards are designed to reward our executive officers for creating long-term shareholder value. Long-term incentive awards
 are granted primarily in the form of stock options and/or shares.

 Appropriate
 Risk

 Our
 executive compensation programs are designed to encourage executive officers to take appropriate risks in managing their businesses
 to achieve optimal performance.

 Competitive
 with external talent markets

 Our
 executive compensation programs are designed to be competitive within the relevant markets.

 Simple
 and transparent

 Our
 executive compensation programs are designed to be readily understood by our executives, and transparent to our investors.

Analysis Peer Group

 After
consideration of business models, company revenue and market capitalization of other companies in the Company's technology industry
segment, and with the input from Compensation Resources, Inc., the compensation consultant used by the Company at the time the study
was last conducted, the Compensation Committee established the following list of peer companies to provide a comparative framework for
use in setting executive compensation:

 Logility
Supply Chain Solutions, Inc.

 Cass
Information Systems

 Digital
Turbine, Inc.

 Mitek
Systems, Inc.

 SPS
Commerce Inc.

 Executive
Officer Base Salaries and Compensation Comparisons

plans are developed by utilizing publicly available compensation data in the information technology and software services industries.
We believe that the practices of these groups of companies provide us with appropriate compensation benchmarks, because these groups
of companies are in similar businesses and tend to compete with us for executives and other employees. For benchmarking executive compensation,
we typically review the compensation data we have collected from these groups of companies, as well as a subset of the data from those
companies that have a similar number of employees as the Company. The Compensation Committee determines the appropriate
compensation packages in addition to taking into account the unique global scale of the Company's business. While taking into
account consultants' general recommendations about the size and components of compensation, other publicly available compensation
information, peer groups and alike, we believe our philosophy to continue on the basis of a pay-for-performance is the best framework
for setting executive compensation.

 In
establishing the compensation of our named Chief Executive Officer and President, we based the amounts primarily on the market data and
advice provided by Compensation Resources, Inc. with respect to the compensation paid to individuals who perform substantially similar
functions within the peer group companies. In connection with the other named executive officers, we also relied on the recommendations
of the Chief Executive Officer's analysis relative to those individuals' performance and compensation. We also examined the
outstanding stock options and equity grants held by the executive officers for the purpose of considering the retention value of any
additional equity awards.

 As
a general guideline, for our named executive officers, we aim to set base salary, cash compensation and total compensation at approximately
the mean market range. Our analysis determined that the base salary of our Chief Executive Officer was slightly above the mean, cash
compensation was generally within the mean, but the total direct compensation was below the mean. As such, it was determined to develop
a long-term, performance-based element of the compensation that brought the total direct compensation within the mean.

 2025
Executive Compensation Components

 Base
Salary

 An
executive's base salary is a fixed element of the executive's compensation intended to attract and retain executives. It
is evaluated together with components of the executive's other compensation to ensure that the executive's total compensation
is consistent with our overall compensation philosophy. Base salaries are adjusted annually by the Compensation Committee.

 The
base salaries were established in arms-length negotiations between the executive and the Company, considering their extensive experience,
knowledge of the industry, track record, and achievements on behalf of the Company. The Company expects each named executive officer
to contribute to the Company's overall success as a member of the executive team rather than focus solely on specific objectives
within the officer's area of responsibility.

 Mr.
Ghauri's base salary for fiscal year 2025 was $840,000 and in addition he received $200,000 in allowances. Mr. Ghauri's base
salary will be $840,000 and allowances will remain the same for fiscal year 2026. Mr. Almond's base salary for fiscal year 2025
was $275,000. For fiscal year 2026, Mr. Almond's salary will be $281,875. Ms. McGlasson's salary for fiscal
year 2025 was $252,312 and her base salary for fiscal year 2026 will be $258,620. The Compensation Committee determined that salary alone
was an adequate basis for short term compensation, and that equity incentives would be used for the long-term elements of incentive programs
for Ms. McGlasson and Mr. Almond.

 Annual
Bonus

 Our
compensation program includes eligibility for bonuses as rewarded by the Compensation Committee. All executives are eligible for annual
performance-based cash bonuses in accordance with Company policies. The Compensation Committee takes into consideration the executive's
performance during the previous year to determine eligibility for discretionary bonuses. Further, the compensation committee will review,
if applicable, the performance criteria set forth in an executive's previous year's agreement and will determine if the executive
has met such criteria in order to achieve the bonus. The Company's bonus criteria at the executive management level is typically
based on a gross revenue and income from operations targets. Cash bonuses, if any for 2025 are reflected in the summary of compensation
table on page 40. For 2025, based on structured key performance indices (KPI)') by the Compensation Committee, Mr. Ghauri earned
a bonus of $210,340. See bonus structure as discussed below on page 39. The Compensation Committee determined that Gross Revenue and
Income from Operations structure used in fiscal 2025 continues to be a proper measure for measuring Mr. Ghauri's performance in
that it encourages his participation in revenue generating activities and continues to incentivize him to monitor and maximize cost efficiency.

 Long-Term
Equity Incentive Compensation

 We
believe that long-term performance is achieved through an ownership culture that encourages long-term participation by our executives
in equity-based awards. Because base salary and equity awards are such basic elements of compensation within our industry, as well as
the high technology and software industries in general, and are generally expected by employees, we believe that these components must
be included in our compensation mix in order for us to compete effectively for talented executives. We award time based vested stock
from our Equity Incentive Plans for several reasons. First, such awards facilitate retention of our executives. Restricted stock generally
vests only if the executive remains employed by the Company. Second, time-based stock awards align executive compensation with the interests
of our shareholders and thereby focuses executives on increasing value for the shareholders. Time vested stock generally only provides
a superior return if the stock price appreciates, and results in materially less dilution to the shareholders than options while frequently
providing equivalent value to the employee at less cost to the Company than options. In determining the number of shares to be granted
to executives, we take into account the individual's position, scope of responsibility, ability to affect profits and shareholder
value, past and recent performance, and the estimated value of shares at the time of grant. Assuming individual performance at a level
satisfactory to the Compensation Committee, the size of total equity compensation is generally targeted at the 50th percentile for the
peer group. As indicated above, market data, including compensation percentiles, were among several factors the committee reviewed in
determining compensation.

 Equity
incentives provided to executives are determined by the Fair Market Value of our common stock on the grant date. Each executive's
stock award was based on an analysis of the Compensation Committee of an appropriate overall cash compensation for each individual taking
into account their position and compensation at similarly situated companies. Each executive's stock award was based on a desired
overall compensation cash value less the base salary as approved by the Compensation Committee.

 Mr.
Najeeb Ghauri is eligible to receive grants of shares based on the performance criteria connected to gross revenues and net income from
operations as discussed below. The total compensation including equity grants is designed to bring the Chief Executive Officer to the
mean market average.

 Mr.
Najeeb Ghauri's bonus for fiscal year 2025 is based on the total revenues and income from operations on a graduated basis. The
following table demonstrates the graduated percentage of bonus that Mr. Ghauri will be eligible to earn based on the percentage of the
goal achieved. Bonuses will be paid 60% in cash and 40% in shares of common stock valued on June 30, 2025. Total net revenues and income
from operations are based on those values reported for the year ending June 30, 2025, excluding any adjustments relating to changes in
revenue recognition policy.

 Mr.
Ghauri's bonus for fiscal year 2025 shall be based on total revenues and income from operations on a graduated basis. The following
table demonstrates the graduated percentage of bonus that Mr. Ghauri will be eligible to earn based on the percentage of the goal achieved.
Bonuses will be paid 60% in cash and 40% in shares of common stock valued on June 30 of the fiscal year in question The bonus shall be
calculated based on the increase in annual revenues compared to the baseline revenue. The baseline revenue for the purpose of this bonus
calculation shall be defined as the highest annual revenue achieved in any previous year beginning with Fiscal Year End June 30, 2024.
Under no circumstances shall the baseline revenue be adjusted downward, even if annual revenues in subsequent years fall below this highest
annual revenue mark.

 Allocated Bonus %

 % of Bonus

 %

 %

 %

 %

 %

 %

 %

 Net revenues

 %

 Increase in revenues

 %

 %

 %

 %

 %

 %

 %

 Bonus Earned

 $

 82,500

 $

 165,000

 $

 330,000

 $

 412,500

 $

 495,000

 $

 577,500

 $

 660,000

 % of

 Bonus

 %

 %

 %

 %

 %

 %

 %

 Income from Operations

 %

 Income from Operations %

 5.0

 %

 7.5

 %

 10.0

 %

 12.5

 %

 15.0

 %

 17.5

 %

 20.0

 %

 Bonus Earned

 $

 67,500

 $

 135,000

 $

 270,000

 $

 337,500

 $

 $

 472,500

 $

 540,000

 Total Bonus

 $

 150,000

 $

 300,000

 $

 600,000

 $

 750,000

 $

 900,000

 $

 1,050,000

 $

 1,200,000

 Perquisites
and Other Personal Benefits

 We
provide named executive officers with perquisites and other personal benefits that we believe are reasonable and consistent with our
overall compensation program to better enable the Company to attract and retain superior employees for key positions. The Compensation
Committee periodically reviews the level of perquisites and other personal benefits provided to NETSOL's executive officers.

 We
maintain benefits and perquisites that are offered to all employees, including health and dental insurance. Benefits and perquisites
may vary in different country locations and are consistent with local practices and regulations.

 Termination
Based Compensation

 Upon
termination of employment, all executive officers with a written employment agreement are entitled to receive severance payments under
their employment agreements. In determining whether to approve, and as part of the process of setting the terms of, such severance arrangements,
the Compensation Committee recognizes that executives and officers often face challenges securing new employment following termination.
Further, the Committee recognizes that many of the named executives and officers have participated in the Company since its founding
and that this participation has not resulted in a return on their investments. Termination and Change in Control Payments considered
both the risk and the dedication of these executives' service to the Company.

 Our
Chief Executive Officer has an employment agreement that provides, if his employment is terminated without cause or if the executive
terminates the agreement with Good Reason, he is entitled to (a) all remaining salary to the end of the date of termination, plus salary
from the end of the employment term through the end of the fourth anniversary of the date of termination, and (b) the continuation by
the Company of medical and dental insurance coverage for him and his family until the end of the employment term and through the end
of the fourth anniversary of the date of termination. Provided, however, if such benefits cannot be continued for this extended period,
the Executive shall receive cash (including a tax-equivalency payment for Federal, state and local income and payroll taxes assuming
Executive is in the maximum tax bracket for all such purposes) where such benefits may not be continued. These agreements further provide
for vesting of all options and restrictive stock grants, if any.

 Our
Chief Financial Officer has an employment agreement that provides, if his employment is terminated without cause or if the executive
terminates the agreement with Good Reason, he is entitled to (a) all remaining salary to the end of the date of termination, plus
salary from the end of the employment term through the end of the second anniversary of the date of termination, and (b) the
continuation by the Company of medical and dental insurance coverage for him and his family until the end of the employment term and
through the end of the second anniversary from the date of termination. Provided, however, if such benefits cannot be continued for
this extended period, the Executive shall receive cash (including a tax-equivalency payment for Federal, state and local income and
payroll taxes assuming Executive is in the maximum tax bracket for all such purposes) where such benefits may not be continued.
These agreements further provide for vesting of all options and restrictive stock grants, if any.

 The
Secretary of the Company has an employment agreement that provides, if she is terminated without cause or if the executive terminates
the agreement with Good Reason, she is entitled to (a) all remaining salary to the end of the date of termination, plus salary from the
end of the employment term through the end of the second anniversary of the date of termination, and (b) the continuation by the Company
of medical and dental insurance coverage for her and her family until the end of the employment term and through the end of the second
anniversary of the date of termination. Provided, however, if such benefits cannot be continued for this extended period, the Executive
shall receive cash (including a tax-equivalency payment for Federal, state and local income and payroll taxes assuming Executive is in
the maximum tax bracket for all such purposes) where such benefits may not be continued. These agreements further provide for vesting
of all options and restrictive stock grants, if any.

 These
agreements were designed to assist in the retention of the services of our named executives and to determine in advance the rights and
remedies of the parties in connection with any termination. The types and amounts of compensation and the triggering events set forth
in these agreements were based on a review of the terms and conditions of normal and customary agreements in our competitive marketplace.

 Tax
and Accounting Implications

 Deductibility
of Executive Compensation

 As
part of its role, the Compensation Committee reviews and considers the deductibility of executive compensation under Section 162(m) of
the Internal Revenue Code, which provides that we may not deduct compensation of more than $1,000,000 that is paid to certain individuals.
The Compensation Committee is aware of the limitations imposed by Section 162(m) and considers the issue of deductibility when and if
circumstances warrant. The committee reviews proposed compensation plans in light of applicable tax deductions, and generally seeks to
maximize the deductibility for tax purposes of all elements of compensation. However, the committee may approve compensation that does
not qualify for deductibility, including stock option and time-based restricted stock awards, if and when the committee deems it to be
in the best interests of the Company and our shareholders.

 Accounting
for Stock-Based Compensation

 We account for stock-based payments, including awards under our Employee Stock Option Plans, in accordance with the of
Financial Accounting Standards Board's Accounting Standards Codification Topic 718, Compensation – Stock
Compensation.

 Summary

 The
following table shows the compensation for the fiscal years ended June 30, 2025 and 2024, earned by our Chairman and Chief Executive
Officer, our Chief Financial Officer who is our Principal Financial and Accounting Officer, and others considered to be executive officers
of the Company.

 Name and Principle Position

 Fiscal Year Ended

 Salary ($)

 Bonus ($)

 Stock Awards ($) (1)

 Option Awards ($)

 All Other Compensation ($)

 Total ($)

 Najeeb Ghauri

 2025

 $
 840,000

 $
 210,340
 (2)

 $
 -

 $
 -
 (3)

 $
 230,400
 (4)

 $
 1,280,740

 CEO & Chairman

 2024

 $
 693,000

 $
 472,890
 (2)

 $
 -

 $
 20,285
 (3)

 $
 226,400
 (4)

 $
 1,412,575

 Naeem Ghauri

 2025

 $
 1,045,714
 (5)

 $
 250,000
 (6)

 $
 -

 $
 -
 (3)

 $
 -

 $
 1,295,714

 President

 2024

 $
 920,000
 (5)

 $
 -
 (6)

 $
 -

 $
 20,285
 (3)

 $
 -

 $
 940,285

 Roger K Almond

 2025

 $
 275,000

 $
 25,000

 $
 -

 $
 -

 $
 38,058
 (7)

 $
 338,058

 Chief Financial Officer

 2024

 $
 226,000

 $
 20,000

 $
 -

 $
 -

 $
 58,513
 (7)

 $
 304,513

 Patti L. W. McGlasson

 2025

 $
 252,312

 $
 -

 $
 -

 $
 -

 $
 33,043
 (8)

 $
 285,355

 Secretary, General Counsel

 2024

 $
 233,622

 $
 -

 $
 -

 $
 -

 $
 31,763
 (8)

 $
 265,385

 (1)
There were no stock awards during the two years presented.

 (2)
Bonus was awarded based on Mr. Ghauri's bonus structure as detailed on page 39.

 (3)
Mr. Najeeb Ghauri and Mr Naeem Ghauri were granted 50,000 options at an exercise price of $2.15 that vested immediately with a one-year
expiration and have been fully exercised.

 (4)
Per Mr. Najeeb Ghauri's compensation agreement, other compensation includes a fixed allowance of $200,000 to cover perquisites
and benefits such as car allowance, insurance premiums, and home office allowance. In addition, other compensation includes Company contributions
under the 401(k) plan for the fiscal years ended June 30, 2025, and 2024.

 (5)
Consists of $815,714 and $780,000 base salary and $230,000 and $140,000 commission for the fiscal years ended June 30, 2025, and 2024,
respectively.

 (6)
Per Mr. Naeem Ghauri's compensation agreement, he received $250,000 and $nil in bonus for the fiscal years ended June 30, 2025,
and 2024, respectively.

 (7)
Consists of employer-paid medical and dental insurance premiums and the Company contributions under the 401(k) plan for the fiscal years
ended June 30, 2025, and 2024.

 (8)
Consists of employer-paid medical and dental insurance premiums and the Company contributions under the 401(k) plan for the fiscal years
ended June 30, 2025, and 2024.

 Grants
of Plan-Based Awards

 There
were no stock grants during the two years presented.

 Discussion
of Summary Compensation Table

 The
terms of our executive officers' compensation are derived from our employment agreements with them and the annual performance review
by our Compensation Committee. The terms of Mr. Najeeb Ghauri's employment agreement with the Company were the result of negotiations
between the Company and the executive and were approved by our Compensation Committee and Board of Directors. The terms of Ms. McGlasson's
and Mr. Almond's employment agreement with the Company were the result of negotiations between our Chief Executive Officer and
the employees and were approved by our Compensation Committee.

 Employment
Agreement with Najeeb Ghauri

 Effective
July 1, 2024, the Company entered into an amended and restated employment agreement with our Chief Executive Officer, Najeeb Ghauri (the
"CEO Agreement"). The CEO Agreement was amended solely to place the base salary and bonus structure for Mr. Ghauri into the
Appendix to the CEO Agreement. All other material terms remain unchanged. From the agreement entered into with Mr. Ghauri in January
1, 2007, and amended thereafter. Pursuant to the CEO Agreement between Mr. Ghauri and the Company the Company agreed to employ Mr. Ghauri
as its Chief Executive Officer for a five-year term. The term of employment automatically renews for 12 additional months unless notice
of intent to terminate is received by either party at least 6 months prior to the end of the term. For the fiscal year 2025, Mr. Ghauri
is entitled to an annualized compensation of $1,040,000 consisting of salary, allowances, perquisites and benefits, and is eligible for
annual bonuses based on the bonus structure adopted by the Compensation Committee as described in Item 11 under Executive Compensation
beginning on page 34. For fiscal year 2026, Mr. Ghauri's annualized compensation consisting of salary, allowance, perquisites and
benefits will be $1,040,000. Mr. Ghauri is entitled to six weeks of paid vacation per calendar year.

 The
CEO Agreement also includes provisions respecting severance, non-solicitation, non-competition, and confidentiality obligations. Pursuant
to the CEO Agreement, if he terminates his employment for Good Reason (as described below), or, is terminated prior to the end of the
employment term by the Company other than for Cause (as described below) or death, he shall be entitled to all remaining salary from
the termination date until 48 months thereafter, at the rate of salary in effect on the date of termination, immediate vesting of all
options and continuation of all health related plan benefits for a period of 48 months. He shall have no obligation to seek other employment
and any income so earned shall not reduce the foregoing amounts. If he is terminated by the Company for Cause (as described below), or
at the end of the employment term, he shall not be entitled to further compensation. Under the CEO Agreement, Good Reason includes the
assignment of duties inconsistent with his title, a material reduction in salary and perquisites, the relocation of the Company's
principal office by 30 miles, if the Company asks him to perform any act which is illegal, including the commission of a crime or act
of moral turpitude, or a material breach of the CEO Agreement by the Company. Under the CEO Agreement, Cause includes conviction of crime
involving moral turpitude, failure to perform his duties to the Company, engaging in activities which are directly competitive to or
intentionally injurious to the Company, or any material breach of the CEO Agreement by Mr. Ghauri.

 The
above summary of the CEO Agreement is qualified in its entirety by reference to the full text of the CEO Agreement, a copy of which was
filed as an exhibit to the Company's 10-K for the fiscal year ended June 30, 2024.

 Employment
Agreement with Roger K. Almond

 Effective
July 1, 2024, the Company entered into an amended and restated employment agreement with our Chief Executive Officer, Roger Almond (the
"CFO Agreement"). The CFO Agreement was amended solely to place the base salary for Mr. Almond into the Appendix to the CFO
Agreement. All other material terms remain unchanged from the agreement entered into with Mr. Almond on March 1, 2015, and amended thereafter.
According to the terms of the CFO Agreement, the term of the agreement automatically extends for an additional one-year period unless
notice of intent to terminate is received by either party at least 6 months prior to the end of the term. For the fiscal year 2025, Mr.
Almond was entitled to an annualized base salary of $275,000 per annum, and eligible for annual bonuses at the discretion of the Chief
Executive Officer. Mr. Almond's salary for the fiscal year 2026 will be $281,875, and is eligible for annual bonuses at the discretion
of the Chief Executive Officer. In addition, Mr. Almond is entitled to participate in the Company's equity incentive plans and
is entitled to six weeks of paid vacation per calendar year.

 The
CFO Agreement also includes provisions respecting severance, non-solicitation, non-competition, and confidentiality obligations. Pursuant
to the CFO Agreement, if he terminates his employment for Good Reason (as described below), or, is terminated prior to the end of the
employment term by the Company other than for Cause (as described below) or death, he shall be entitled to all remaining salary from
the termination date until 24 months thereafter, at the rate of salary in effect on the date of termination, immediate vesting of all
options and continuation of all health related plan benefits for a period of 24 months. He shall have no obligation to seek other employment
and any income so earned shall not reduce the foregoing amounts. If he is terminated by the Company for Cause (as described below), or
at the end of the employment term, he shall not be entitled to further compensation. Under the CFO Agreement, Good Reason includes the
assignment of duties inconsistent with his title, a material reduction in salary and perquisites, the relocation of the Company's
principal office by 60 miles, if the Company asks him to perform any act which is illegal, including the commission of a crime or act
of moral turpitude, or a material breach of the CFO Agreement by the Company. Under the CFO Agreement, Cause includes conviction of crime
involving moral turpitude, failure to perform his duties to the Company, engaging in activities which are directly competitive to or
intentionally injurious to the Company, or any material breach of the CFO Agreement by Mr. Almond.

 The
above summary of the CFO Agreement is qualified in its entirety by reference to the full text of the CFO Agreement, a copy of which was
filed as an exhibit to the Company's 10-K for the fiscal year ended June 30, 2024.

 Employment
Agreement with Patti L. W. McGlasson

 Effective
July 1, 2024, the Company entered into an amended and restated employment agreement with our Secretary, General Counsel and Senior Vice
President, Legal and Corporate Affairs, Patti L. W. McGlasson (the "GC Agreement"). The GC Agreement was amended solely to
include Ms. McGlasson's current title and to place the base salary for Ms. McGlasson into the Appendix to the GC Agreement. All
other material terms remain unchanged from the agreement entered into with Ms. McGlasson in January 1, 2006, and amended thereafter.
Pursuant to the General Counsel Agreement, the Company agreed to employ Ms. McGlasson as its Secretary, General Counsel and Sr. Vice
President of Legal and Corporate Affairs for one-year terms. According to the terms of the GC Agreement, the term of the agreement automatically
extends for an additional one-year period unless notice of intent to terminate is received by either party at least 6 months prior to
the end of the term. GC Agreement, Ms. McGlasson is entitled to an annualized base salary of $252,312 per annum for the fiscal year 2025
and is eligible for annual bonuses at the discretion of the Chief Executive Officer. Ms. McGlasson's salary for fiscal year 2026
will be $258,620. In addition, Ms. McGlasson is entitled to participate in the Company's equity incentive plans and is entitled
to six weeks of paid vacation per calendar year.

 The
GC Agreement also includes provisions respecting severance, non-solicitation, non-competition, and confidentiality obligations. Pursuant
to the General Counsel Agreement, if she terminates her employment for Good Reason (as described below), or, is terminated prior to the
end of the employment term by the Company other than for Cause (as described below) or death, she shall be entitled to all remaining
salary from the termination date until 24 months thereafter, at the rate of salary in effect on the date of termination, immediate vesting
of all options and continuation of all health related plan benefits for a period of 24 months. She shall have no obligation to seek other
employment and any income so earned shall not reduce the foregoing amounts. If she is terminated by the Company for Cause (as described
below), or at the end of the employment term, she shall not be entitled to further compensation. Under the General Counsel Agreement,
Good Reason includes the assignment of duties inconsistent with her title, a material reduction in salary and perquisites, the relocation
of the Company's principal office by 60 miles, if the Company asks her to perform any act which is illegal, including the commission
of a crime or act of moral turpitude, or a material breach of the General Counsel Agreement by the Company. Under the General Counsel
Agreement, Cause includes conviction of crime involving moral turpitude, failure to perform her duties to the Company, engaging in activities
which are directly competitive to or intentionally injurious to the Company, or any material breach of the General Counsel Agreement
by Ms. McGlasson.

 The
above summary of the General Counsel Agreement is qualified in its entirety by reference to the full text of the GC, a copy of which
was filed as an exhibit to the Company's 10-K for the fiscal year ended June 30, 2024.

 Outstanding
Equity Awards at Fiscal Year-End

 The
following table shows grants of stock options and grants of unvested stock awards outstanding on June 30, 2025, the last day of our fiscal
year, to each of the individuals named in the Summary Compensation Table.

 OPTION AWARDS

 STOCK AWARDS

 NAME

 NUMBER OF SECURITIES UNDERLYING OPTIONS (#) EXERCISABLE

 NUMBER OF SECURITIES UNDERLYING OPTIONS (#) UNEXERCISABLE

 OPTION EXERCISE PRICE ($)

 OPTION EXPIRATION DATE

 NUMBER OF SHARES OF COMMON STOCK THAT HAVE NOT VESTED

 MARKET VALUE OF SHARES THAT HAVE NOT VESTED ($)

 EQUITY INCENTIVE PLAN AWARDS: NUMBER OF UNEARNED SHARES THAT HAVE NOT VESTED

 EQUITY INCENTIVE PLAN AWARDS: MARKET OR PAYOUT VALUE OF SHARES THAT HAVE NOT VESTED ($)

 Najeeb Ghauri

 -

 -

 -

 -

 -

 -

 -

 Naeem Ghauri

 -

 -

 -

 -

 -

 -

 -

 Roger K Almond

 -

 -

 -

 -

 -

 -

 -

 Patti L. W. McGlasson

 -

 -

 -

 -

 -

 -

 -

 Pension
Benefits

 We
do not have any qualified or non-qualified defined benefit plans.

 Potential
Payments upon Termination or Change of Control

 Generally,
regardless of the manner in which a named executive officer's employment terminates, the executive officer is entitled to receive
amounts earned during the term of employment. Such amounts include the portion of the executive's base salary that has accrued
prior to any termination and not yet been paid, and unused vacation pay.

 In
addition, we are required to make the additional payments and/or provide additional benefits to the individuals named in the Summary
Compensation Table in the event of a termination of employment or a change of control, as set forth below.

 Change-in-Control
Payments

 Najeeb
Ghauri, Chairman and Chief Executive Officer

 In
the event that Mr. Ghauri is terminated as a result of a change in control, he is entitled to all payments due in the event of a termination
for Cause or Good Reason and: (a) a onetime payment equal to the product of 2.99 and his salary during the preceding 12 months; (b) a
one-time payment equal to the higher of (i) Executive's bonus for the previous year and (ii) one percent of the Company's
consolidated gross revenues for the previous twelve (12) months; and at the election of the Executive, (c) a one-time cash payment equal
to the cash value of all shares eligible for exercise upon the exercise of Executive's Options then currently outstanding and exercisable
as if they had been exercised in full (the "Change of Control Termination Payment"). In the event Executive elects to receive
the cash value of the shares underlying Executive's options, he shall so notify the Company of his intent.

 The
following table summarizes the potential payments to Mr. Ghauri assuming his employment with us was terminated, or a change of control
occurred on June 30, 2025, the last day of our most recently completed fiscal year.

 BENEFITS AND PAYMENTS

 TERMINATION AFTER CHANGE OF CONTROL

 TERMINATION UPON DEATH OR DISABILITY

 TERMINATION BY US WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD REASON

 Base Salary Continuance

 $
 3,360,000

 $
 140,000

 $
 3,360,000

 Health Related Benefits

 47,040

 -

 47,040

 Bonus

 -

 -

 -

 Salary Multiple Pay-out

 2,511,600

 -

 -

 Bonus or Revenue One-time Pay-Out

 660,882

 -

 -

 Net Cash Value of Options

 -

 -

 -

 Total

 $
 6,579,522

 $
 140,000

 $
 3,407,040

 Roger
Almond, Chief Financial Officer

 In
the event that Mr. Almond is terminated as a result of a change in control, he is entitled to all payments due in the event of a termination
for Cause or Good Reason and: (a) a onetime payment equal to the product of 2.99 and his salary during the preceding 12 months; (b) a
one-time payment equal to the higher of (i) Executive's bonus for the previous year and (ii) one-half of one percent of the Company's
consolidated gross revenues for the previous twelve (12) months (the "Change of Control Termination Payment").

 The
following table summarizes the potential payments to Mr. Almond assuming his employment with us was terminated, or a change of control
occurred on June 30, 2025, the last day of our most recently completed fiscal year.

 BENEFITS AND PAYMENTS

 TERMINATION AFTER CHANGE OF CONTROL

 TERMINATION UPON DEATH OR DISABILITY

 TERMINATION BY US WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD REASON

 Base Salary Continuance

 $
 550,000

 $
 45,833

 $
 550,000

 Health related benefits

 30,552

 -

 30,552

 Bonus

 -

 -

 -

 Salary Multiple Pay-out

 822,250

 -

 -

 Bonus or Revenue One-time Pay-Out

 330,441

 -

 -

 Net Cash Value of Options

 -

 -

 -

 Total

 $
 1,733,243

 $
 45,833

 $
 580,552

 Patti
L. W. McGlasson, Senior V.P. of Legal and Corporate Affairs, Secretary and General Counsel

 In
the event that Ms. McGlasson is terminated as a result of a change in control, she is entitled to all payments due in the event of a
termination for Cause or Good Reason and: (a) a onetime payment equal to the product of 2.99 and her salary during the preceding 12 months;
(b) a one-time payment equal to the higher of (i) Executive's bonus for the previous year and (ii) one-half of one percent of the
Company's consolidated gross revenues for the previous twelve (12) months (the "Change of Control Termination Payment").

 The
following table summarizes the potential payments to Ms. McGlasson assuming her employment with us was terminated, or a change of control
occurred on June 30, 2025, the last day of our most recently completed fiscal year.

 BENEFITS AND PAYMENTS

 TERMINATION AFTER CHANGE OF CONTROL

 TERMINATION UPON DEATH OR DISABILITY

 TERMINATION BY US WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD REASON

 Base Salary Continuance

 $
 504,624

 $
 42,052

 $
 504,624

 Health related benefits

 25,752

 -

 25,752

 Bonus

 -

 -

 -

 Salary Multiple Pay-out

 754,413

 -

 -

 Bonus or Revenue One-time Pay-Out

 330,441

 -

 -

 Net Cash Value of Options

 -

 -

 -

 Total

 $
 1,615,230

 $
 42,052

 $
 530,376

 Clawback
Policy

 In
2023, the Company adopted an Executive Officer Clawback Policy (the "Clawback Policy") that complies with SEC and Nasdaq
requirements and standards. The Clawback Policy requires the recovery, on a prompt and mandatory basis, of excess incentive-based compensation
received by current or former executive officers during the applicable three-year period in the event the Company is required to prepare
an accounting restatement due to material noncompliance with any financial reporting requirement under the securities laws. Triggering
events include restatements to correct errors that are material to previously issued financial statements, or that would result in a
material misstatement if corrected or left uncorrected in the current period. Excess incentive-based compensation generally means the
amount of compensation received (on or after October 24, 2023) that exceeds the amount that would have been received based on the restated
figures, without regard to any taxes paid. Incentive-based compensation subject to clawback includes any amounts granted, earned or vested
based wholly or in part on the attainment of financial reporting measures, including performance metrics derived from stock price or
total shareholder return.

Compensation Policy

 Mr.
Najeeb Ghauri and Ms. Malea Farsai are not paid any fees or other compensation for services as members of our Board of Directors.

 The
Committee has previously relied on a survey conducted by Compensation Resources, Inc. in setting compensation for the non-employee
members of our Board of Directors. As with named executives, the aim is to compensate the Board of Directors at the mean of peer companies.
Any additional cash and/or equity compensation for the fiscal year beginning was designed to maintain this mean.

 The
non-employee members of our Board of Directors received compensation for services as directors as well as reimbursement for documented
reasonable expenses incurred in connection with attendance at meetings of our Board of Directors and the committees thereof.

Compensation Table

 The
following table sets forth a summary of the compensation earned by our Directors and/or paid to certain of our Directors pursuant to
the Company's compensation policies for the fiscal year ended June 30, 2025, other than Najeeb Ghauri and Malea Farsai who were
paid as part of their employment agreements with the Company and not as directors.

 NAME

 FEES EARNED OR PAID IN CASH ($)

 SHARE AWARDS ($)

 TOTAL

 ($)

 Mark Caton

 65,000

 118,000

 Kausar Kazmi

 106,000

 Michael Francis

 106,000

 171,000

 159,000

 330,000

 Independent
members of our Board of Directors are also eligible to receive stock option or stock award grants both upon joining the Board of Directors
and on an annual basis in line with recommendations by the Compensation Committee, which grants are non-qualified stock options under
our Employee Stock Option Plans. Further, from time to time, the non-employee members of the Board of Directors are eligible to receive
stock grants that may be granted if and only if approved by the shareholders of the Company.

Committee Interlocks and Insider Participation

 The
current members of the Compensation Committee are Mr. Caton (Chairman), Mr. Kazmi, and Mr. Francis. All current members of the Compensation
Committee are "independent directors" as defined under the NASDAQ Listing Rules. None of these individuals were at any time
during the fiscal year ended June 30, 2025, or at any other relevant time, an officer or employee of the Company.

 No
executive officer of the Company serves as a member of the board of directors or compensation committee of any entity that has one or
more executive officers serving as a member of the Company's Board of Directors or Compensation Committee.

 The
Compensation Committee also takes into account the number and value of awards held by the Executive Officer in order to maintain an appropriate
level of incentive for that individual. We do not take material nonpublic information into account when determining the timing and terms
of equity awards, nor do we time the disclosure of material nonpublic information for the purpose of affecting the value of executive
compensation. The Compensation Committee has the authority to review extraordinary events that impact the Company's performance
and may adjust the calculation of the number of shares earned under an award by taking into account the effect of any such extraordinary
events. The Compensation Committee did not make any such adjustments for Fiscal 2025.

 ITEM
12- SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 The
following table sets forth certain information regarding the beneficial ownership of the Company's Common Stock, its only
class of outstanding voting securities as of September 18, 2025, by (i) each person who is known to the Company to own beneficially
more than 5% of the outstanding common Stock with the address of each such person, (ii) each of the Company's present
directors and officers, and (iii) all officers and directors as a group:

 Number of Shares

 Name of Beneficial Owner (1)

 Beneficially Owned (2)

 Percentage

 Najeeb Ghauri

 (3)

 923,338

 7.83
 %

 Naeem Ghauri

 (3)

 459,853

 3.90
 %

 Mark Caton

 (3)

 163,811

 1.39
 %

 Syed Kausar Kazmi

 (3)

 73,674

 *

 Michael Francis**

 (3)

 24,662

 *

 Ian Smith

 (3)

 -

 *

 Patti McGlasson

 (3)

 81,050

 *

 Roger Almond

 (3)

 20,736

 *

 Malea Farsai

 (3)

 39,811

 *

 The Vanguard Group

 (5)

 649,497

 5.51
 %

 All officers and directors as a group (nine persons)

 1,786,935

 15.16
 %

 *
Less than one percent

 **
Michael Francis is no longer a director of the Company

 (1)
Except as otherwise indicated, the Company believes that the beneficial owners of the common stock listed below, based on information
furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where
applicable. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes
voting or investment power with respect to securities.

 (2)
Beneficial ownership is determined in accordance with the rules of the Commission and generally includes voting or investment power with
respect to securities. Shares of common stock relating to share grants that will vest or options currently exercisable or exercisable
within 60 days of September 18, 2025, are deemed outstanding for computing the percentage of the person holding such securities but are
not deemed outstanding for computing the percentage of any other person. Except as indicated by footnote, and subject to community property
laws where applicable, the persons named in the table above have sole voting and investment power with respect to all shares shown as
beneficially owned by them.

 (3)
Address c/o NetSol Technologies, Inc. at 16000 Ventura Blvd., Suite 770, Encino, CA 91436.

 (4)
Shares issued and outstanding as of September 18, 2025 were 11,785,540.

 (5)
5% or greater shareholder based on Schedule 13G filing on February 13, 2024.

 ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.

 Transactions
with Related Persons, Promoters and Certain Control Persons

 Other
than compensation arrangements for our executive officers and directors, which are described under "Executive and Director Compensation",
since July 1, 2024, and as described below, there are no transactions to which we were a party in which (i) the amount involved exceeded
or will exceed the lesser of $120,000 of one percent (1%) of our average total assets at year-end for the last two completed fiscal years
and (ii) any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family
of, or person sharing the household with, any of the foregoing persons, had or will have a direct or indirect material interest.

 Najeeb
Ghauri, our Chief Executive Officer, has immediate family members employed by the Company. These family members are compensated in accordance
with the Company's standard employment and compensation practices applicable to employees in similar positions. Other than compensation,
there are no related-party transactions with these individuals requiring disclosure under Item 404 of Regulation S-K. Compensation information
for Naeem Ghauri, who serves as an executive officer of the Company, is included in the Summary Compensation Table under Item 11 of this
Form 10-K on page 40.

 The
Company employs Ms. Aiesha Ghauri, the spouse of Mr. Najeeb Ghauri, as HR director. Her total compensation for fiscal years 2025 and
2024 was $122,000 and $112,000, respectively. The Company employs Mr. Faizaan Ghauri, Mr. Najeeb Ghauri's son, as Chief Strategy
Officer. His total compensation for fiscal years 2025 and 2024 was $313,000 and $295,000, respectively. The Company employs Mr. Faraaz
Ghauri, Mr. Najeeb Ghauri's son, as Vice President-Digital Retail. His total compensation for fiscal years 2025 and 2024 was $319,000
and $178,000, respectively. Mr. Najeeb Ghauri's brother, Salim Ghauri, was a co-founder of the Company and is CEO of NetSol Technologies
Limited, the company's Pakistani subsidiary. His compensation for fiscal years 2025 and 2024 was $648,000 and $618,000, respectively.
Compensation for the purpose of this disclosure includes salary, bonuses, commissions, equity awards and other benefits such as medical
and 401(k) employer matching.

Independence

 The
Nasdaq Stock Market LLC ("Nasdaq") requires that a majority of our board of directors must be composed of "independent
directors," which is defined generally as a person other than an officer or employee of the company or its subsidiaries or any
other individual having a relationship, which, in the opinion of the company's board of directors would interfere with the director's
exercise of independent judgment in carrying out the responsibilities of a director. The board has determined that Mark Caton, Kausar
Kazmi, Michael Francis, and Ian Smith are "independent". Our board currently consists of three independent directors and
two non-independent directors. Mr. Francis's term ended in June 2025, and Mr. Smith was elected to the Board of Directors in June
2025.

 ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

 Audit
Fees

 Fortune
CPA ("Fortune") audited the Company's financial statements for the fiscal year ended June 30, 2025. The aggregate fees
billed by principal accountants for the annual audit and review of financial statements included in the Company's Form 10-K, was
$401,700 for the year ended June 30, 2025.

 BF
Borgers was engaged to review our quarterly financial statements for the first two quarters of fiscal year ended 2024, for which we incurred
fees of $60,000. Due to subsequent sanctions imposed by the SEC on BF Borgers, we engaged Fortune to re-audit the financial statements
for the fiscal year ended June 30, 2023, and to audit our financial statements for the fiscal year ended June 30, 2024. In addition,
Fortune reviewed our quarterly financial statements for the third quarter of fiscal year 2024 and 2023. The total amount paid to Fortune
for these services was $563,500.

 Tax
Fees

 Tax
fees for fiscal year 2025 were $19,500 and consisted of the preparation of the Company's federal and state tax returns for the
fiscal year 2024. Tax fees for fiscal year 2024 were $19,000 and consisted of the preparation of the Company's federal and state
tax returns for the fiscal year 2023.

 All
Other Fees

 No
other fees were paid to the principal accountant during the fiscal years 2025 and 2024.

 Pre-Approval
Procedures

 The
Audit Committee and the Board of Directors are responsible for the engagement of the independent auditors and for approving, in advance,
all auditing services and permitted non-audit services to be provided by the independent auditors. The Audit Committee maintains a policy
for the engagement of the independent auditors that is intended to maintain the independent auditor's independence from NETSOL.
In adopting the policy, the Audit Committee considered the various services that the independent auditors have historically performed
or may be needed to perform in the future. The policy, which is to be reviewed and re-adopted at least annually by the Audit Committee:

 (i) Approves
the performance by the independent auditors of certain types of service (principally audit-related and tax), subject to restrictions
in some cases, based on the Committee's determination that this would not be likely to impair the independent auditors' independence
from NETSOL;

 (ii) Requires
that management obtain the specific prior approval of the Audit Committee for each engagement of the independent auditors to perform
other types of permitted services; and

 (iii) Prohibits
the performance by the independent auditors of certain types of services due to the likelihood that their independence would be impaired.

 Any
approval required under the policy must be given by the Audit Committee, by the Chair of the Committee in office at the time, or by any
other Committee member to whom the Committee has delegated that authority. The Audit Committee does not delegate its responsibilities
to approve services performed by the independent auditors to any member of management.

 The
standard applied by the Audit Committee in determining whether to grant approval of an engagement of the independent auditors is whether
the services to be performed, the compensation to be paid therefore and other related factors are consistent with the independent auditors'
independence under guidelines of the Securities and Exchange Commission and applicable professional standards. Relevant considerations
include, but are not limited to, whether the work product is likely to be subject to, or implicated in, audit procedures during the audit
of NETSOL's financial statements; whether the independent auditors would be functioning in the role of management or in an advocacy
role; whether performance of the service by the independent auditors would enhance NETSOL's ability to manage or control risk or
improve audit quality; whether performance of the service by the independent auditors would increase efficiency because of their familiarity
with NETSOL's business, personnel, culture, systems, risk profile and other factors; and whether the amount of fees involved, or
the proportion of the total fees payable to the independent auditors in the period that is for tax and other non-audit services, would
tend to reduce the independent auditors' ability to exercise independent judgment in performing the audit.

 All
services provided by Fortune CPA in the fiscal year ended June 30, 2025, were pre-approved by the Audit Committee.

 PART
IV

 ITEM
15 – EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

 (a)
Exhibits

 3.1
 Amended
 and Restated Articles of Incorporation filed with the Nevada Secretary of State on June 26,
 2025*

 3.2
 Amended
 and Restated Bylaws of NetSol Technologies, Inc. dated February 9, 2018*.

 4.1
 Form
 of Common Stock Certificate. *

 10.1
 Stock
 Purchase Agreement dated May 6, 2006 by and between the Company, McCue Systems, Inc. and
 the shareholders of McCue Systems, Inc. incorporated by reference as Exhibit 2.1 to NETSOL's
 Current Report filed on form 8-K on May 8, 2006. *

 10.2
 Employment Agreement by and between the Company and Patti L. W. McGlasson dated September 25, 2024.*

 10.3
 Employment Agreement by and between the Company and Najeeb Ghauri dated September 25, 2024.*

 10.4
 Employment Agreement by and between the Company and Roger K. Almond dated September 25, 2024.*

 10.5
 Company
 2025 Equity Incentive Plan incorporated by reference as Appendix B to NETSOL's Definitive
 Proxy Statement filed on May 1, 2025. *

 10.6
 Restated
 Charter of the Compensation Committee dated effective September 10, 2013. *

 10.7
 Restated
 Charter of the Nominating and Corporate Governance Committee dated effective September 10,
 2013. *

 10.8
 Restated
 Charter of the Audit Committee dated effective September 10, 2013. *

 10.9
 Restated
 Code of Business Conduct & Ethics dated effective September 10, 2013. *

 21.1
 A
 list of all subsidiaries of the Company (1)

 31.1
 Certification
 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (CEO) (1)

 31.2
 Certification
 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (CFO) (1)

 32.1
 Certification
 pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
 Act of 2002 (CEO) (1)

 32.2
 Certification
 pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
 Act of 2002 (CFO) (1)

 97.1
 Technologies Inc. Clawback Policy (1)

 101.INS

 101.SCH

 101.CAL

 101.DFE

 101.LAB

 101.PRE

 Cover

 *Previously
Filed

 (1)
Filed Herewith

 SIGNATURES

 In
accordance with Section 13 or 15 (d) of the Exchange Act, the Registrant caused this amended report to be signed on its behalf by the
undersigned, thereunto duly authorized.

 Technologies, Inc.

 Date:

 BY:

 /S/
 NAJEEB GHAURI

 Najeeb
 Ghauri

 Chief
 Executive Officer

 Date:

 BY:

 /S/
 ROGER K. ALMOND

 Roger
 K. Almond

 Chief
 Financial Officer

 Principal
 Financial Officer

 In
accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities
and on the dates indicated.

 Date:

 BY:

 /S/ NAJEEB U. GHAURI

 Najeeb U. Ghauri

 Chief Executive Officer

 Director, Chairman

 Date:

 BY:

 /S/ROGER K. ALMOND

 Roger K. Almond

 Chief Financial Officer

 Principal Accounting Officer

 Date:

 BY:

 /S/ MARK CATON

 Mark Caton

 Date:

 BY:

 /S/ MALEA FARSAI

 Malea Farsai

 Date:

 BY:

 /S/ Ian
 Smith

 Ian Smith

 Date:

 BY:

 /S/ KAUSAR KAZMI

 Kausar Kazmi

TO CONSOLIDATED FINANCIAL STATEMENTS

 Description

 Page

 Report of Independent Registered Public Accounting Firm

 Financial
 Statements

 Consolidated Balance Sheets as of June 30, 2025 and 2024

 Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended June 30, 2025 and 2024

 Consolidated Statement of Equity for the Years Ended June 30, 2025 and 2024

 Consolidated Statements of Cash Flows for the Years Ended June 30, 2025 and 2024

 Notes to Consolidated Financial Statements

 F- 1

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 To
the Shareholders and Board of Directors of NetSol Technologies, Inc.

 Opinion
on the Financial Statements

 We
have audited the accompanying consolidated balance sheets of NetSol Technologies, Inc. (the "Company") and its subsidiaries
as of June 30, 2025 and 2024, and the related consolidated statements of operations and comprehensive loss, changes in stockholders'
equity, and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements").
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30,
2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.

 Basis
for Opinion

 These
financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial
statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United
States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits,
we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion
on the effectiveness of the entity's internal control over financial reporting. Accordingly, we express no such opinion.

 Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.

 Critical
Audit Matters

 The
critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated
or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial
statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters
does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit
matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

 We
determined that there are no critical audit matters.

 /s/
 Fortune CPA, Inc

 We
have served as the Company's auditor since 2024.

 Orange,
CA

 September
29, 2025

 PCAOB
# 6901

 F- 2

Balance Sheets

 As
 of

 As
 of

 June

 June

 ASSETS

 Cash
 and cash equivalents

 $
 17,357,944

 $
 19,127,165

 receivable, net of allowance of $ 355,464 and $ 398,809

 7,527,572

 13,049,614

 in excess of billings, net of allowance of $ 34,496 and $ 116,148

 18,230,619

 12,684,518

 Other
 current assets

 3,203,468

 2,600,786

 Total
 current assets

 46,319,603

 47,462,083

 in excess of billings, net - long term

 Property
 and equipment, net

 5,073,372

 5,106,842

 Right
 of use assets - operating leases

 809,513

 1,328,624

 Other
 assets

 32,331

 32,340

 Total
 assets

 $
 62,441,109

 $
 64,186,442

 LIABILITIES
 AND STOCKHOLDERS' EQUITY

 liabilities:

 payable and accrued expenses

 $
 8,010,844

 $
 8,232,342

 portion of loans and obligations under finance leases

 8,240,061

 6,276,125

 portion of operating lease obligations

 433,242

 608,202

 revenue

 3,029,850

 8,752,153

 Total
 current liabilities

 19,713,997

 23,868,822

 Loans
 and obligations under finance leases; less current maturities

 134,608

 95,771

 lease obligations; less current maturities

 333,374

 688,749

 Total
 liabilities

 20,181,979

 24,653,342

 Stockholders'
 equity:

 Preferred
 stock, $.01 par value; 500,000 shares authorized;

 -

 -

 stock, $.01 par value; 18,000,000 shares authorized; 12,700,465 shares issued and 11,761,434 outstanding as of June 30,
 2025, 12,359,922 shares issued and 11,420,891 outstanding as of June 30, 2024

 127,008

 123,602

 Additional
 paid-in-capital

 129,529,901

 128,783,865

 Treasury
 stock (at cost, 939,031 shares as of June 30, 2025 and June 30, 2024)

)

)

 Accumulated
 deficit

 ( 41,289,080
)

 ( 44,212,313
)

 Other
 comprehensive loss

 ( 46,613,208
)

 ( 45,935,616
)

 Total
 NetSol stockholders' equity

 37,833,765

 34,838,682

 Non-controlling
 interest

 4,425,365

 Total
 stockholders' equity

 42,259,130

 39,533,100

 Total
 liabilities and stockholders' equity

 $
 62,441,109

 $
 64,186,442

 The
accompanying notes are an integral part of these consolidated financial statements.

 F- 3

Statements of Operations

 2025

 2024

 For

 Ended

 2025

 2024

 Net
 Revenues:

 fees

 $
 598,633

 $
 5,449,991

 and support

 32,934,648

 27,952,768

 32,554,948

 27,990,332

 Total
 net revenues

 Cost
 of revenues

 33,513,697

 32,108,221

 Gross
 profit

 32,574,532

 29,284,870

 expenses:

 Selling,
 general and administrative

 27,796,936

 24,388,714

 Research
 and development cost

 1,275,878

 1,402,601

 Total
 operating expenses

 29,072,814

 25,791,315

 (loss) from operations

 3,501,718

 3,493,555

 Other
 income and (expenses)

 expense

 ( 871,355
)

 ( 1,142,166
)

 1,871,040

 1,911,258

 Gain
 (loss) on foreign currency exchange transactions

 1,301,613

 ( 1,187,320
)

 Other

 244,241

 148,120

 Total
 other income (expenses)

 2,545,539

 ( 270,108
)

 Net
 income before income taxes

 6,047,257

 3,223,447

 tax provision

 ( 1,476,338
)

 ( 1,145,518
)

 Net

 4,570,919

 2,077,929

 Non-controlling
 interest

 ( 1,647,686
)

 ( 1,394,056
)

 Net
 income attributable to NetSol

 $

 $

 Net
 income per share:

 Net
 income per common share

 Basic

 $
 0.25

 $
 0.06

 $
 0.25

 $
 0.06

 average number of shares outstanding

 Basic

 11,378,595

 11,421,940

 The
accompanying notes are an integral part of these consolidated financial statements.

 F- 4

Statements of Comprehensive Income (Loss)

 2025

 2024

 For

 Ended

 2025

 2024

 Net

 $

 $

 Other
 comprehensive income (loss):

 Translation
 adjustment

 ( 857,867
)

 364,849

 Translation
 adjustment attributable to non-controlling interest

 180,275

 ( 325,309
)

 Net
 translation adjustment

 ( 677,592
)

 39,540

 Comprehensive
 income (loss) attributable to NetSol

 $
 2,245,641

 $
 723,413

 The
accompanying notes are an integral part of these consolidated financial statements.

 F- 5

Statement of Stockholders' Equity

 For
the Years Ended June 30, 2025 and 2024

 Capital

 Deficit

 Loss

 Equity

 Other

 Additional

 Compre-

 Non

 Total

 Stock

 Paid-in

 Treasury

 Accumulated

 hensive

 Controlling

 Stockholders'

 Capital

 Deficit

 Loss

 Equity

 at June 30, 2024

 12,359,922

 $
 123,602

 $
 128,783,865

 $
)

 $
 ( 44,212,313
)

 $
 ( 45,935,616
)

 $

 $
 39,533,100

 Exercise
 of common stock options

 220,000

 2,200

 470,800

 -

 -

 -

 -

 473,000

 stock issued for:

 120,543

 1,206

 317,328

 -

 -

 -

 -

 318,534

 Purchase
 of subsidiary shares

 -

 -

 ( 112,010
)

 -

 -

 -

 103,132

 ( 8,878
)

 Purchase
 of subsidiary treasury shares

 -

 -

 -

 -

 -

 -

 ( 1,503,662
)

 ( 1,503,662
)

 Adjustment
 in APIC for change in subsidiary shares to non-controlling interest

 -

 -

 29,135

 -

 -

 -

 ( 29,135
)

 -

 Fair
 value of options issued

 -

 -

 40,783

 -

 -

 -

 -

 40,783

 Dividend
 to non-controlling interest

 -

 -

 -

 -

 -

 -

 ( 306,799
)

 ( 306,799
)

 currency translation adjustment

 -

 -

 -

 -

 -

 ( 677,592
)

 ( 180,275
)

 ( 857,867
)

 Net

 -

 -

 -

 -

 -

 1,647,686

 4,570,919

 at June 30, 2025

 12,700,465

 $
 127,008

 $
 129,529,901

 $
)

 $
 ( 41,289,080
)

 $
 ( 46,613,208
)

 $
 4,425,365

 $
 42,259,130

 The
accompanying notes are an integral part of these consolidated financial statements.

 F- 6

Statement of Stockholders' Equity

 For
the Years Ended June 30, 2025 and 2024

 Other

 Additional

 Compre-

 Non

 Total

 Stock

 Paid-in

 Treasury

 Accumulated

 hensive

 Controlling

 Stockholders'

 Capital

 Deficit

 Loss

 Equity

 at June 30, 2023

 12,284,887

 $
 122,850

 $
 128,476,048

 $
)

 $
 ( 44,896,186
)

 $
 ( 45,975,156
)

 $
 2,975,053

 $
 36,781,753

 12,284,887

 $
 122,850

 $
 128,476,048

 $
)

 $
 ( 44,896,186
)

 $
 ( 45,975,156
)

 $
 2,975,053

 $
 36,781,753

 stock issued for:

 75,035

 167,298

 -

 -

 -

 -

 168,050

 Fair
 value

 of
 options issued

 -

 -

 101,424

 -

 -

 -

 -

 101,424

 Fair
 value of options issued

 -

 -

 101,424

 -

 -

 -

 -

 101,424

 of
 subsidiary options issued

 -

 -

 39,095

 -

 -

 -

 -

 39,095

 Fair
 value of subsidiary options issued

 -

 -

 39,095

 -

 -

 -

 -

 39,095

 currency translation adjustment

 -

 -

 -

 -

 -

 39,540

 325,309

 364,849

 Net

 -

 -

 -

 -

 -

 1,394,056

 2,077,929

 at June 30, 2024

 12,359,922

 $
 123,602

 $
 128,783,865

 $
)

 $
 ( 44,212,313
)

 $
 ( 45,935,616
)

 $

 $
 39,533,100

 12,359,922

 $
 123,602

 $
 128,783,865

 $
)

 $
 ( 44,212,313
)

 $
 ( 45,935,616
)

 $

 $
 39,533,100

 The
accompanying notes are an integral part of these consolidated financial statements

 F- 7

Statements of Cash Flows

 2025

 2024

 For

 Ended

 2025

 2024

 Cash
 flows from operating activities:

 Net

 $
 4,570,919

 $
 2,077,929

 Adjustments
 to reconcile net income to net cash provided by operating activities:

 and amortization

 1,463,783

 1,721,800

 Provision
 for bad debts

 466,965

 ( 29,134
)

 Gain
 on sale of assets

 ( 69,355
)

 ( 101,864
)

 Stock
 based compensation

 208,116

 308,569

 Changes
 in operating assets and liabilities:

 receivable

 5,453,186

 ( 1,902,382
)

 in excess of billing

 ( 5,207,897
)

 ( 1,205,456
)

 Other
 current assets

 15,257

 ( 216,944
)

 payable and accrued expenses

 ( 197,312
)

 1,611,745

 revenue

 ( 6,256,395
)

 645,125

 Net
 cash provided by (used in) operating activities

 447,267

 2,909,388

 Cash
 flows from investing activities:

 Purchases
 of property and equipment

 ( 1,382,770
)

 ( 515,404
)

 Sales
 of property and equipment

 116,783

 223,866

 Purchase
 of subsidiary shares

 ( 8,878
)

 -

 Net
 cash used in investing activities

 ( 1,274,865
)

 ( 291,538
)

 Cash
 flows from financing activities:

 Proceeds
 from the exercise of stock options and warrants

 473,000

 -

 Proceeds
 from exercise of subsidiary options

 13,728

 -

 Dividend
 paid by subsidiary to non-controlling interest

 ( 306,799
)

 -

 Purchase
 of subsidiary treasury stock

 ( 1,503,662
)

 -

 Proceeds
 from bank loans

 2,920,149

 756,936

 Payments
 on finance lease obligations and loans - net

 ( 773,535
)

 ( 517,385
)

 Net
 cash provided by financing activities

 822,881

 239,551

 Effect
 of exchange rate changes

 ( 1,764,504
)

 736,510

 Net
 increase (decrease) in cash and cash equivalents

 ( 1,769,221
)

 3,593,911

 Cash
 and cash equivalents at beginning of the period

 19,127,165

 15,533,254

 Cash
 and cash equivalents at end of period

 $
 17,357,944

 $
 19,127,165

 The
accompanying notes are an integral part of these consolidated financial statements.

 F- 8

Statements of Cash Flows (Continued)

 For

 Ended

 2025

 2024

 SUPPLEMENTAL
 DISCLOSURES:

 Cash
 paid during the period for:

 $
 841,962

 $
 1,576,454

 Taxes

 $
 1,412,245

 $
 704,868

 NON-CASH
 INVESTING AND FINANCING ACTIVITIES:

 acquired under finance lease

 $
 -

 $
 122,045

 issued for accrued bonus

 $
 151,201

 $
 -

 The
accompanying notes are an integral part of these consolidated financial statements.

 F- 9

 Notes

 June

 NOTE
1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Technologies, Inc., was incorporated under the laws of the State of Nevada on March 18, 1997. (NetSol Technologies, Inc. and subsidiaries
collectively referred to as the "Company")

 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.

 NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 Principles
of Consolidation

 The
accompanying consolidated financial statements include the accounts of the Company as follows:

 Wholly
owned Subsidiaries
NetSol Technologies Americas, Inc. ("NTA")

Connect (Private), Ltd. ("Connect")

NetSol Technologies Australia Pty Ltd. ("Australia")

NetSol Technologies Europe Limited ("NTE")

Technologies (Beijing) Co. Ltd. ("NetSol Beijing")

 Tianjin
NuoJinZhiCheng Co., Ltd ("Tianjin")

 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 Institute of Artificial Intelligence (Private) Limited ("NIAI")

Ascent Middle East Computer Equipment Trading LLC ("Namecet")

Technologies Thailand Limited ("NetSol Thai")

 OTOZ,
Inc. ("OTOZ ")

 OTOZ
(Thailand) Limited ("OTOZ Thai")

 The
Company consolidates any variable interest entities of which it is the primary beneficiary. Equity investments through which the Company
exercises significant influence over but does not control the investee and is not the primary beneficiary of the investee's activities
are accounted for using the equity method. Investments through which the Company is not able to exercise significant influence over the
investee, and which do not have readily determinable fair values are accounted for under the cost method. All material inter-company
accounts have been eliminated in the consolidation.

 F- 10

 Notes

 June

 Basis
of Presentation

 The
accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United
States of America ("US GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC").

 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 the measurement of progress toward completion of
long-term software implementation projects, the allocation of the transaction price in multiple performance obligations, expected
credit loss on accounts receivable and revenues in excess of billings, provision for taxation, useful life of depreciable assets,
useful life of intangible assets, contingencies, the determination of stock-based compensation expense and estimated contract costs.
The estimates and underlying assumptions are reviewed on an ongoing basis. Actual results could differ from those
estimates.

 Cash
and Cash Equivalents

 Cash
and cash equivalents include all highly liquid debt instruments with original maturities of three months or less which are not securing
any corporate obligations.

 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 ($ 69,735) in each bank and in the UK for GBP 85,000 ($ 116,438) in each bank. The Company
maintains three bank accounts in China and nine bank accounts in the UK. As of June 30, 2025 and 2024, the Company had uninsured
deposits related to cash deposits in accounts maintained within foreign entities of approximately $ 16,386,079 and $ 18,182,002, 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.

Receivable and Allowance for Doubtful Accounts

receivable are recorded at the invoiced amount and are non-interest bearing. The Company recognizes an allowance for credit losses in
accordance with ASC 326, Financial Instrument -Credit Losses, based on expected losses over the contractual life of the receivables.
In measuring expected credit losses, management considers historical loss experience, customer credit quality, current economic conditions,
and reasonable and supportable forecasts. The allowance is evaluated collectively for groups of receivables with similar risk characteristics,
with specific reserves established for receivables that do not share those characteristics or when collectability is uncertain. Receivables
are written off against the allowance when collection efforts have been exhausted and recovery is not expected. Recoveries of amounts
previously written off are recognized when received.

 F- 11

 Notes

 June

in Excess of Billings

in excess of billings represent the total of the project to be billed to the customer for revenues recognized per US GAAP. As the customers
are billed under the terms of their contract, the corresponding amount is transferred from this account to "Accounts Receivable."
The Company recognizes the potential risk associated with recognizing revenues in excess of billings, including the risk of non-payment
by the customer. Therefore, management continually assesses the collectability of such amounts and makes appropriate provisions or adjustments
if collectability becomes doubtful.

 Property
and Equipment

 Property
and equipment are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals
and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated
depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation is computed
using various methods over the estimated useful lives of the assets, ranging from 3 three to twenty years. Following is the summary
of estimated useful lives of the assets:

 SUMMARY
OF ESTIMATED USEFUL LIVES OF ASSETS

 Category

 Estimated
 Useful Life

 Computer
 equipment and software

 to 5 Years

 Office
 furniture and equipment

 to 10 Years

 Building

 Years

 Autos

 Years

 under capital leases

 to 10 Years

 Improvements

 to 10 Years

 The
Company capitalizes costs of materials, consultants, and payroll and payroll-related costs for employees incurred in developing internal-use
computer software. These costs are included with "Computer equipment and software."

 Impairment
of Long-Lived Assets

 The
Company tests long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the
assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds
the fair value.

 Research
and Development Costs

 Research
and development expenses are comprised of salaries, benefits and overhead expenses of employees involved in software product enhancement
and development, cost of outside contractors engaged to perform quality assurance, software product enhancement and development (if any).
Development costs are expensed as incurred.

represents the excess of the aggregate purchase price over the fair value of the net assets acquired in a purchase business combination.
Goodwill is reviewed for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the carrying
amount of goodwill may be impaired. In conducting its annual impairment test, the Company first
reviews qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its
carrying amount. If factors indicate that the fair value of the reporting unit is less than its carrying amount, the Company performs
a quantitative assessment, and the fair value of the reporting unit is determined by analyzing the expected present value of future cash
flows. If the carrying value of the reporting unit continues to exceed its fair value, the fair value of the reporting unit's goodwill
is calculated and an impairment loss equal to the excess is recorded.

 F- 12

 Notes

 June

 Fair
Value of Financial Instruments

 The
Company applies the provisions of ASC 820-10, "Fair Value Measurements and Disclosures." ASC 820-10 defines fair value
and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for
fair value measures. For certain financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, accounts
payable and short-term debt, the carrying amounts approximate fair value due to their relatively short maturities.

 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 June 30, 2025, are as follows:

OF FAIR VALUE OF FINANCIAL ASSETS MEASURED ON RECURRING BASIS

 Level

 Level

 Level

 Total

 in excess of billings - long term

 $
 -

 $
 -

 $

 $

 Total

 $
 -

 $
 -

 $

 $

 The
Company's financial assets that were measured at fair value on a recurring basis as of June 30, 2024, are as follows:

 Level

 Level

 Level

 Total

 in excess of billings - long term

 $
 -

 $
 -

 $

 $

 Total

 $
 -

 $
 -

 $

 $

 F- 13

 Notes

 June

 The
reconciliation for the years ended June 30, 2025 and 2024 is as follows:

 SCHEDULE OF FAIR VALUE OF FINANCIAL INSTRUMENTS RECONCILIATION

 in excess of

 billings
 - long term

 Fair
 value discount

 Total

 at June 30, 2023

 $
 -

 $
 -

 $
 -

 Additions

 1,107,853

 ( 194,827
)

 913,026

 Amortization
 during the period

 -

 42,814

 42,814

 Effect
 of Translation Adjustment

 ( 1,378
)

 ( 433
)

 ( 1,811
)

 at June 30, 2024

 $
 1,106,475

 $
 ( 152,446
)

 $

 Additions

 559,032

 ( 128,921
)

 430,111

 Amortization
 during the period

 -

 73,066

 73,066

 Transfers
 to short term

 ( 521,875
)

 -

 ( 521,875
)

 Effect
 of Translation Adjustment

 ( 31,829
)

 ( 31,565
)

 at June 30, 2025

 $
 1,111,803

 $
 ( 208,037
)

 $

 The
Company used the discounted cash flow method with interest rates ranging from 4.2 % to 17.5 %, for the year ended June 30, 2025 and 2024.

revenue represents billings in excess of revenue earned on contracts and are recognized on a pro-rata basis over the life of the contract.

 Cost
of Revenues

 Cost
of revenues includes salaries and benefits for technical employees, consultant costs, amortization of capitalized computer software
development costs, depreciation of computer and equipment, travel costs, and indirect costs such as rent and insurance.

 Advertising
Costs

 The
Company expenses the cost of advertising as incurred. Advertising costs for the years ended June 30, 2025 and 2024 were $ 346,232 and
$ 148,953, respectively.

 Share-Based

 The
Company records stock compensation in accordance with ASC 718, Compensation – Stock Compensation. ASC 718 requires companies
to measure compensation cost for stock employee compensation at fair value at the grant date and recognize the expense over the employee's
requisite service period. The Company recognizes forfeitures as they occur. The Company recognizes in the statement of operations the
grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees.

 F- 14

 Notes

 June

Taxes

taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company
is able to realize their benefits, or that future deductibility is uncertain.

 When
tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities,
while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately
sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available
evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution
of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that
meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent
likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions
taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the balance sheets
along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Applicable interest
and penalties associated with unrecognized tax benefits are classified as additional income taxes in the statements of operations.

Currency Translation

 The
Company transacts business in various foreign currencies. The following table represents the functional currencies of the Company and
its subsidiaries:

OF FOREIGN CURRENCY TRANSLATION

 The
 Company and Subsidiaries

 Functional
 Currency

 Technologies, Inc.

 USD

 NTA

 USD

 Otoz

 USD

 NTE

 British
 Pound

 AEL

 British
 Pound

 VLSH

 British
 Pound

 VLS

 British
 Pound

 VLSIL

 Euro

 PK

 Rupee

 Connect

 Rupee

 Innovation

 Rupee

 NIAI

 Rupee

 Thai

 Thai
 Bhat

 Otoz
 Thai

 Thai
 Bhat

 Australian
 Dollar

 Namecet

 AED

 Beijing

 Chinese
 Yuan

 Tianjin

 Chinese
 Yuan

 The
effects of foreign currency translation adjustments are recorded to other comprehensive income.

 F- 15

 Notes

 June

 Statement
of Cash Flows

 The
Company's cash flows from operations are calculated based upon the local currencies. As a result, amounts related to assets and
liabilities reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated
balance sheet.

Reporting

 The
Company defines operating segments as components about which separate financial information is available that is evaluated regularly
by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company allocates its resources
and assesses the performance of its sales activities based on the geographic locations of its subsidiaries.

 Recent
Accounting Standards Adopted by the Company:

 In
November 2023, the FASB issued Accounting Standards Update ("ASU") No. 2023-07, Segment Reporting (Topic 280): Improvements
to Reportable Segment Disclosures, which expands reportable segment disclosure requirements, primarily through enhanced disclosures
about significant segment expenses regularly provided to the chief operating decision maker ("CODM"), a description of other
segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how
to allocate resources. The Company adopted the standard on a retrospective basis and made the required annual disclosures as of June
30, 2025. Interim disclosures are required for periods within fiscal years beginning in the first quarter of the Company's fiscal
year 2026. As the guidance only requires additional disclosure, there were no effects of adoption on our financial position, results
of operations, or cash flows. See Note 17 – Segment Information and Geographic Areas for the segment disclosure required under
this ASU.

 Recent
Accounting Standards Not Yet Adopted by the Company:

 In
December 2023, the FASB issued ASU No. 2023-09 – Income Taxes (Topic ASC 740) Income Taxes. This ASU improves
the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation,
as well as disaggregated income taxes paid by jurisdiction. The amendments are effective for annual periods beginning after December
15, 2024. For the Company, this corresponds to fiscal year 2026. The amendments will be applied on a prospective basis, although retrospective
application for prior periods is permitted. The Company expects the adoption of this ASU to result in additional disclosures but does not anticipate any impact on its financial
position, results of operations, or cash flows.

 In
November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, Income
Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement
Expenses. Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. The standard requires disclosure
of specified information about certain costs and expenses, including purchases of inventory, employee compensation, depreciation, and
intangible asset amortization from each relevant expense caption. The amendments are effective for annual reporting periods beginning
after December 15, 2026, which corresponds to the Company's fiscal year 2028 and interim periods beginning after December 15, 2027,
which corresponds to the Company's first quarter of fiscal 2029. Early adoption and retrospective application are permitted but
not required. The Company plans to adopt the standard and make the required disclosures beginning in fiscal year 2028 for annual periods
and in Q1 of fiscal 2029 for interim periods. The Company expects the adoption of this ASU to result in additional disclosures but does
not anticipate any impact on its financial position, results of operations, or cash flows.

 All
other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable.

 F- 16

 Notes

 June

 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

 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 post-contract support, of its enterprise software solutions for
the lease and finance industry. The Company offers its software using the same underlying technology via two models: a traditional
on-premises licensing model and a subscription model. The on-premises model involves the sale or license of software on a perpetual basis
to customers who take possession of the software and install and maintain the software on their own hardware. Under the subscription
delivery model, the Company provides access to its software on a hosted basis as a service and customers generally do not have
the contractual right to take possession of the software.

 Non-Core

 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 post-contract support and services in addition to the licenses. The Company's single performance obligation arrangements
are typically post-contract support renewals, subscription renewals and services engagements.

 For
contracts with multiple performance obligations where the contracted price differs from the standard-alone 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.

 F- 17

 Notes

 June

revenue is recognized ratably over the initial subscription period committed to by the customer commencing when the product is made available
to the customer. The initial subscription period is typically 12 to 60 months. The Company generally invoices its
customers in advance in quarterly or annual installments and typical payment terms provide that customers make payment within 30 days
of invoice.

 Post
Contract Support

from support services and product updates, referred to as subscription and 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 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

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

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

 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.

 F- 18

 Notes

 June

 The
Company's disaggregated revenue by category is as follows:

OF DISAGGREGATED REVENUE BY CATEGORY

 2025

 2024

 For

 Ended

 2025

 2024

 Core:

 $
 598,633

 $
 5,449,991

 and support

 32,934,648

 27,952,768

 28,921,965

 22,526,010

 Total
 core revenue, net

 62,455,246

 55,928,769

 Non-Core:

 3,632,983

 5,464,322

 Total
 non-core revenue, net

 3,632,983

 5,464,322

 Total
 net revenue

 $

 $

 Significant
Judgments

 More
judgments and estimates are required under Topic 606 than were required under Topic 605. Due to the complexity of
certain contracts, the actual revenue recognition treatment required under Topic 606 for the Company's arrangements may be
dependent on contract-specific terms and may vary in some instances.

 Judgment
is required to determine the SSP for each distinct performance obligation. The Company rarely licenses or sells products on a stand-alone
basis, so the Company is required to estimate the range of SSPs for each performance obligation. In instances where SSP is not directly
observable because the Company does not sell the license, product or service separately, the Company determines the SSP using
information that may include market conditions and other observable inputs. In making these judgments, the Company analyzes
various factors, including its pricing methodology and consistency, size of the arrangement, length of term, customer demographics and
overall market and economic conditions. Based on these results, the estimated SSP is set for each distinct product or service delivered
to customers.

 The
most significant inputs involved in the Company's revenue recognition policies are: The (1) stand-alone selling prices of the Company's
software license, and the (2) the method of recognizing revenue for installation/customization, and other services.

 The
stand-alone selling price of the licenses was measured primarily through an analysis of pricing that management evaluated when quoting
prices to customers. Although the Company has no history of selling its software separately from post-contract 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 recognizes 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.

 F- 19

 Notes

 June

is recognized over time for the Company's subscription, post contract 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 (unearned 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 unearned 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 unearned revenue are as follows:

OF REVENUES IN EXCESS OF BILLINGS AND DEFERRED REVENUE

 As
 of

 As
 of

 June

 June

 in excess of billings

 $
 19,134,385

 $
 13,638,547

 revenue

 $
 3,029,850

 $
 8,752,153

 F- 20

 Notes

 June

 The
Company's unearned revenue reconciliation is as follows:

OF UNEARNED REVENUE RECONCILIATION

 Balance at June 30, 2023

 $
 7,932,306

 Invoiced

 24,039,382

 Revenue Recognized

 ( 23,216,573
)

 Adjustments

 ( 2,962
)

 Balance at June 30, 2024

 $
 8,752,153

 Invoiced

 23,567,456

 Revenue Recognized

 ( 29,201,839
)

 Adjustments

 ( 87,920
)

 at June 30, 2025

 $
 3,029,850

the year ended June 30, 2025, the Company recognized revenue of $ 8,450,000, which was included in the unearned revenue balance at
the beginning of the period. All other activity in unearned revenue is due to the timing of invoicing in relation to the timing of revenue
recognition.

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 $ 21,759,000 as of June 30, 2025, of which the Company estimates
to recognize approximately $ 15,877,000 in revenue over the next 12 months and the remainder over an estimated 3 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.

 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 unearned 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. The Company has applied the following practical expedients:

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).

 F- 21

 Notes

 June

 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 fulfillment duties and collections efforts.

 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:

 SCHEDULE OF DILUTIVE POTENTIAL COMMON SHARES

 For the year ended June 30, 2025

 Net

 Per
 Share

 Basic income per share:

 Net income

 $

 $
 0.25

 Effect of dilutive securities

 Stock
 options

 -

 -

 -

 Diluted income per share

 $

 $
 0.25

 For
 the year ended June 30, 2024

 Net

 Per
 Share

 Basic income per share:

 Net income

 $

 11,378,595

 $
 0.06

 Effect of dilutive securities

 Stock
 options

 -

 43,345

 -

 Diluted income per share

 $

 11,421,940

 $
 0.06

 As
of June 30, 2025, 50,000 options were outstanding. These options were not included in the computation of diluted earnings per share because
their exercise price exceeded the average market price of the Company's common stock during the period and, therefore, their effect
would have been anti-dilutive.

 As
of June 30, 2024, 250,000 options were outstanding. The effect of these options on diluted earnings per share was 43,345 incremental
shares, calculated using the treasury stock method.

 F- 22

 Notes

 June

 NOTE
5 – MAJOR CUSTOMERS

 The
following table describes the revenues from major customers:

OF REVENUES AND RECEIVABLES FROM MAJOR CUSTOMERS

 For the Years

 Ended

 2025

 %

 2024

 %

 Net Revenues:

 Daimler Financial

 $
 12,593,836

 19.1
 %

 $
 15,670,054

 25.5
 %

 BMW Financial

 $
 10,671,666

 16.1
 %

 $
 4,334,024

 7.1
 %

 The
following table describes the receivables from major customers:

 As of

 As of

 June

 June

 Accounts Receivable

 Daimler Financial

 $
 1,268,847

 $
 538,648

 BMW Financial

 $
 850,319

 $
 505,875

 Revenue in Excess of Billing

 Daimler Financial Services

 $
 489,208

 $
 892,109

 BMW Financial

 $
 2,303,982

 $
 1,419,997

 NOTE
6 - OTHER CURRENT ASSETS

 Other
current assets consisted of the following:

 SCHEDULE OF OTHER CURRENT ASSETS

 As of

 As of

 June

 June

 Prepaid Expenses

 $
 1,760,321

 $
 1,314,524

 Advance Income Tax

 406,221

 300,368

 Employee Advances

 151,355

 165,264

 Security Deposits

 159,849

 199,633

 Other Receivables

 410,489

 258,880

 Other Assets

 315,233

 362,117

 Net Balance

 $
 3,203,468

 $
 2,600,786

 F- 23

 Notes

 June

 NOTE
7 – REVENUES IN EXCESS OF BILLINGS – LONG TERM

in excess of billings, net consisted of the following:

 SCHEDULE OF REVENUE IN EXCESS OF BILLING

 As of

 As of

 June

 June

 Revenues in excess of billings
 - long term

 $
 1,111,803

 $
 1,106,475

 Present value discount

 ( 208,037
)

 ( 152,446
)

 Net

 $

 $

 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 years ended June 30, 2025 and 2024, the Company accreted $ 73,066 and $ 42,814, respectively, which was recorded
in interest income for that period. The Company used the discounted cash flow method with interest rates ranging from 4.2 % to 17.5 %,
for the year ended June 30, 2025 and 2024.

 NOTE
8 - PROPERTY AND EQUIPMENT

 Property
and equipment consisted of the following:

 SCHEDULE OF PROPERTY AND EQUIPMENT

 As of

 As of

 June

 June

 Office Furniture and Equipment

 $
 2,437,002

 $
 2,352,940

 Computer Equipment

 9,513,181

 8,679,791

 Assets Under Capital Leases

 145,197

 154,718

 Building

 3,532,475

 3,602,819

 Land

 894,698

 913,473

 Autos

 1,603,271

 1,658,961

 Improvements

 217,230

 206,387

 Subtotal

 18,343,054

 17,569,089

 Accumulated Depreciation

 ( 13,269,682
)

 ( 12,462,247
)

 Property and Equipment,
 Net

 $
 5,073,372

 $
 5,106,842

 For
the years ended June 30, 2025 and 2024, depreciation expense totaled $ 1,463,783 and $ 1,595,959, respectively. Of these amounts, $ 952,331
and $ 1,018,768, respectively, are reflected in cost of revenues.

 Following
is a summary of fixed assets held under capital leases as of June 30, 2025 and 2024:

 SCHEDULE OF FIXED ASSETS HELD UNDER CAPITAL LEASES

 As of

 As of

 June 30, 2025

 June 30, 2024

 Vehicles

 $
 145,197

 $
 154,718

 Total

 145,197

 154,718

 Less: Accumulated Depreciation
 - Net

 ( 47,807
)

 ( 25,078
)

 Fixed assets held under
 capital leases, Total

 $
 97,390

 $
 129,640

 F- 24

 Notes

 June

 Finance
lease term and discount rate were as follows:

 SCHEDULE OF FINANCE LEASE TERM

 As of

 As of

 June

 June

 average remaining lease term - Finance leases

 1.75
 Years

 2.75
 Years

 Weighted average discount
 rate - Finance leases

 11.3
 %

 11.3
 %

 NOTE
9 - LEASES

 The
Company leases certain office space, office equipment and autos with remaining lease terms of 1 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 1 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. An ROU asset and a lease liability
are recognized at the 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. 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.

 F- 25

 Notes

 June

 Supplemental
balance sheet information related to leases was as follows:

 SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO LEASE

 As
 of

 As
 of

 June

 June

 lease assets, net

 $
 809,513

 $
 1,328,624

 Liabilities

 $
 433,242

 $
 608,202

 Operating, Current

 $
 433,242

 $
 608,202

 Non-current

 333,374

 688,749

 Operating, Noncurrent

 333,374

 688,749

 Total
 Lease Liabilities

 $
 766,616

 $
 1,296,951

 The
components of lease cost were as follows:

 SCHEDULE OF COMPONENTS OF LEASE COST

 2025

 2024

 For

 Ended

 2025

 2024

 Amortization
 of finance lease assets

 $
 37,228

 $
 15,061

 on finance lease obligation

 11,845

 6,206

 lease cost

 383,760

 403,438

 Short
 term lease cost

 237,733

 297,014

 Sub
 lease income

 ( 34,180
)

 ( 33,417
)

 Total
 lease cost

 $
 636,386

 $
 688,302

 Lease
term and discount rate were as follows:

 SCHEDULE OF LEASE TERM AND DISCOUNT RATE

 As
 of

 As
 of

 June

 June

 average remaining lease term - Operating leases

 1.44
 Years

 1.99
 Years

 average discount rate - Operating leases

 4.8
 %

 4.5
 %

 F- 26

 Notes

 June

 Supplemental
disclosures of cash flow information related to leases were as follows:

 SCHEDULE OF SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION RELATED TO LEASES

 2025

 2024

 For

 Ended

 2025

 2024

 cash flows related to operating leases

 $
 364,956

 $
 322,953

 cash flows related to finance leases

 $
 11,841

 $
 6,203

 Financing
 cash flows related finance leases

 $
 15,109

 $
 25,477

of operating lease liabilities were as follows as of June 30, 2025:

 SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES

 year 1

 $
 468,065

 year 2

 243,590

 year 3

 111,053

 year 4

 Total
 Lease Payments

 823,173

 Less:
 Imputed interest

 ( 56,557
)

 Present
 Value of lease liabilities

 766,616

 Less:
 Current portion

 ( 433,242
)

 Non-Current
 portion

 $
 333,374

 The
Company is a lessor for certain office space leased by the Company and sub-leased to others under non-cancellable leases. These lease
agreements provide for a fixed base rent and terminate by January 2027. All leases are considered operating leases. There are no rights
to purchase the premises and no residual value guarantees. For the years ended June 30, 2025 and 2024, the Company received lease
income of $ 34,180 and $ 33,417, respectively.

 NOTE
10 – GOODWILL

represents the excess of the aggregate purchase price over the fair value of the net assets acquired in prior period business combinations.
Goodwill was comprised of the following amounts:

 SCHEDULE OF GOODWILL ACQUIRED

 As
 of

 As
 of

 Entity
 (Segment)

 June

 June

 PK (Asia - Pacific)

 $
 1,166,610

 $
 1,166,610

 NTE
 (Europe)

 3,471,814

 3,471,814

 NTA
 (North America)

 4,664,100

 4,664,100

 Total

 $

 $

 F- 27

 Notes

 June

 NOTE
11 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

payable and accrued expenses consisted of the following:

 SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

 As
 of

 As
 of

 June

 June

 Payable

 $
 981,504

 $
 1,426,930

 Accrued
 Liabilities

 4,502,366

 4,323,662

 Accrued
 Payroll

 1,313,127

 1,392,112

 Accrued
 Payroll Taxes

 329,618

 215,197

 Taxes
 Payable

 600,199

 634,035

 Other
 Payable

 284,030

 240,406

 Total

 $
 8,010,844

 $
 8,232,342

 NOTE
12 – DEBTS

 Notes
payable and capital leases consisted of the following:

 SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES

 As
 of June 30, 2025

 Long-Term

 Name

 Total

 D&O
 Insurance

 (1)

 $
 119,542

 $
 119,542

 $
 -

 Line
 of Credit

 (2)

 -

 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)

 1,337,322

 1,337,322

 -

 Loan
 Payable Bank - Export Refinance III

 (7)

 4,575,048

 4,575,048

 -

 Sale
 and Leaseback Financing

 (8)

 76,618

 29,660

 46,958

 Short
 Term Financing

 (9)

 -

 -

 -

 8,273,164

 8,226,206

 46,958

 Subsidiary
 Finance Leases

 (10)

 101,505

 13,855

 87,650

 $
 8,374,669

 $
 8,240,061

 $
 134,608

 As
 of June 30, 2024

 Long-Term

 Name

 Total

 D&O
 Insurance

 (1)

 $
 124,314

 $
 124,314

 $
 -

 Line
 of Credit

 (2)

 -

 -

 -

 Bank
 Overdraft Facility

 (3)

 -

 -

 -

 Loan
 Payable Bank - Export Refinance

 (4)

 1,796,558

 1,796,558

 -

 Loan
 Payable Bank - Running Finance

 (5)

 -

 -

 -

 Loan
 Payable Bank - Export Refinance II

 (6)

 1,365,384

 1,365,384

 -

 Loan
 Payable Bank - Export Refinance III

 (7)

 2,515,181

 2,515,181

 -

 Sale
 and Leaseback Financing

 (8)

 56,842

 47,158

 9,684

 Short
 Term Financing

 (9)

 412,655

 412,655

 -

 6,270,934

 6,261,250

 9,684

 Subsidiary
 Finance Leases

 (10)

 100,962

 14,875

 86,087

 $
 6,371,896

 $
 6,276,125

 $
 95,771

 (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 rates on these financings range from 8.4 % to 11.6 % and 8.6 % to 10.9 % as of June 30, 2025 and 2024, respectively.

 F- 28

 Notes

 June

 (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 % and 8.75 %
 as of June 30, 2025 and 2024, respectively. The total outstanding balance as of June 30, 2025 and 2024, was $ 405,000
 and $ nil,
 respectively.

 (3)
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 8.5 % and 9.5 % as of June 30, 2025 and 2024, respectively. The total outstanding balance as of
June 30, 2025 and 2024 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 June 30, 2025, NTE
 was in compliance with this covenant.

 (4)
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 $ 2,111,561 and Rs. 500,000,000 or $ 1,796,558 at June
30, 2025 and 2024, respectively. NetSol PK used Rs. 500,000,000 or $ 1,759,634 at June 30, 2025 and Rs. 500,000,000 or $ 1,796,558 at June
30, 2024. The interest rate for the loan was 8.0 % and 17.5 % at June 30, 2025 and 2024, respectively.

 (5)
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 $ 14,256 and Rs. 53,600,000 or $ 192,591, at June 30, 2025 and 2024, respectively. The balance outstanding at
June 30, 2025 and 2024 was Rs. Nil. The interest rate for the loan was 13.2 % and 22.2 % at June 30, 2025 and 2024, respectively.

 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 June 30, 2025, NetSol PK was in
 compliance with this covenant.

 (6)
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 $ 1,337,322 and Rs. 380,000,000 or $ 1,365,384, at
June 30, 2025 and 2024, respectively. NetSol PK used Rs. 380,000,000 or $ 1,337,322 and Rs. 380,000,000 or $ 1,365,384, at June 30, 2025
and 2024, respectively. The interest rate for the loan was 8.0 % and 17.5 % at June 30, 2025 and 2024, respectively.

 During the loan tenure,
 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 June 30, 2025, NetSol PK was in
 compliance with these covenants.

 (7)
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 $ 4,575,048 and Rs. 900,000,000 or $ 3,233,804,
at June 30, 2025 and 2024, respectively. NetSol PK used Rs. 1,300,000,000 or $ 4,575,048 and Rs. 700,000,000 or $ 2,515,181, at June 30,
2025 and 2024, respectively. The interest rate for the loan was 8.0 % and 17.5 % at June 30, 2025 and 2024, respectively.

 (8)
subsidiary, NetSol PK, availed sale and leaseback financing from First Habib Modaraba secured by the transfer of the vehicles'
title. 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.
As of June 30, 2024, NetSol PK used Rs. 15,819,683 or $ 56,842 of which $ 9,684 was shown as long-term and $ 47,158 as current. The interest
rate for the loan ranged between 12.3 % and 24.2 % at June 30, 2025. The interest rate for the loan ranged between 22.7 % and 24.2 % at June
30, 2024.

 (9)
subsidiary, NetSol Beijing, has a short-term loan facility with Bank of China, secured by the personal guarantee of the General Manager
of NetSol Beijing for a period of one year. The facility amount was CNY 3,000,000 or $ 418,410. NetSol Beijing paid off this facility
during the period ended June 30, 2025. At June 30, 2024, NetSol Beijing used CNY 3,000,000 or $ 412,655. The interest rate of the loan
was 3.8 % at June 30, 2025 and 2024, respectively.

 (10)
 The Company leases
various fixed assets under capital lease arrangements expiring in various years through 2028. The assets and liabilities under capital
leases are recorded at the lower of the present value of the minimum lease payments or the fair value of the asset. The assets are secured
by the assets themselves. Depreciation of assets under capital leases is included in depreciation expense for the years ended June 30,
2025 and 2024.

 F- 29

 Notes

 June

 Following
is the aggregate minimum future lease payments under capital leases as of June 30, 2025:

 SCHEDULE OF AGGREGATE MINIMUM FUTURE LEASE PAYMENTS UNDER CAPITAL LEASES

 Minimum
 Lease Payments

 year 1

 $
 27,582

 year 2

 91,896

 year 3

 6,162

 Total
 Minimum Lease Payments

 125,640

 Expense relating to future periods

 ( 24,135
)

 Present
 Value of minimum lease payments

 101,505

 Less:
 Current portion

 ( 13,855
)

 Non-Current
 portion

 $
 87,650

 Following
is the aggregate future long term debt payments, which consists of "Sale and Leaseback Financing (8)", as of June 30, 2025:

 SCHEDULE OF AGGREGATE FUTURE LONG TERM DEBT PAYMENTS

 Loan
 Payments

 year 1

 $
 29,660

 year 2

 23,128

 Within year 3

 23,830

 Total
 Loan Payments

 76,618

 Less:
 Current portion

 ( 29,660
)

 Non-Current
 portion

 $
 46,958

 NOTE
13 – INCOME TAXES

 The
Company is incorporated in the State of Nevada and registered to do business in the State of California. The following is a breakdown
of income before the provision for income taxes:

pre-tax income (loss) consists of the following:

 SCHEDULE OF CONSOLIDATED PRE-TAX INCOME (LOSS)

 2025

 2024

 Years

 2025

 2024

 US
 operations

 $
 1,099,957

 $
 ( 1,719,058
)

 operations

 4,947,300

 4,942,505

 Net income before income
 taxes

 $
 6,047,257

 $
 3,223,447

 F- 30

 Notes

 June

 The
components of the provision for income taxes are as follows:

 SCHEDULE OF COMPONENTS OF PROVISION FOR INCOME TAXES

 2025

 2024

 Years

 2025

 2024

 Current:

 Federal

 $
 -

 $
 -

 State
 and Local

 1,600

 1,600

 1,411,601

 1,143,918

 Deferred:

 Federal

 -

 -

 State
 and Local

 -

 -

 63,137

 -

 Provision
 for income taxes

 $
 1,476,338

 $
 1,145,518

 A
reconciliation of taxes computed at the statutory federal income tax rate to income tax expense (benefit) is as follows:

 SCHEDULE OF RECONCILIATION OF TAXES AT STATUTORY FEDERAL INCOME TAX RATE INCOME TAX EXPENSE BENEFITS

 Years

 2025

 2024

 tax (benefit) provision at statutory rate

 $
 1,269,924

 21.0
 %

 $
 676,924

 21.0
 %

 State
 income (benefit) taxes, net of federal tax benefit

 422,099

 7.0
 %

 224,997

 7.0
 %

 earnings taxed at different rates

 90,483

 1.5
 %

 ( 238,995
)

 - 7.4
 %

 Change
 in valuation allowance for deferred tax assets

 ( 179,699
)

 - 3.0
 %

 351,633

 10.9
 %

 Other

 ( 126,469
)

 - 2.1
 %

 130,959

 4.1
 %

 Provision
 for income taxes

 $
 1,476,338

 24.4
 %

 $
 1,145,518

 35.5
 %

 Deferred
income tax assets and liabilities as of June 30, 2025 and 2024 consist of tax effects of temporary differences related to the following:

 SCHEDULE OF DEFERRED INCOME TAX ASSETS AND LIABILITIES

 2025

 2024

 Years

 2025

 2024

 Net
 operating loss carry forwards

 $
 10,963,495

 $
 11,190,703

 Other

 200,323

 152,814

 Net
 deferred tax assets

 11,163,818

 11,343,517

 Valuation
 allowance for deferred tax assets

 ( 11,163,818
)

 ( 11,343,517
)

 Net
 deferred tax assets

 $
 -

 $
 -

 The
Company has established a full valuation allowance as management believes it is more likely than not that these assets will not be realized
in the future. The valuation allowance decreased by $ 179,699 for the year ended June 30, 2025.

 At
June 30, 2025, federal and state net operating loss carry forwards in the United States of America were $ 29,570,036 and $ 8,736,297, respectively.
Federal net operating loss carry forwards begin to expire in 2028, while state net operating loss carry forwards are expiring each year.
Due to both historical and recent changes in the capitalization structure of the Company, the utilization of net operating losses may
be limited pursuant to section 382 of the Internal Revenue Code. Net operating losses related to foreign entities were $ 16,546,754 at
June 30, 2025.

 F- 31

 Notes

 June

 As
of June 30, 2025, the Company does not have any unrecognized tax benefits related to various federal and state income tax matters. The
Company will recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense.

 The
Company is subject to U.S. federal income tax, as well as various state and foreign jurisdictions. The Company is currently open to audit
under the statute of limitations by the federal and state jurisdictions for the years ending June 30, 2022 through 2024. The Company
does not anticipate any material amount of unrecognized tax benefits within the next 12 months.

 The
cumulative amount of undistributed earnings of foreign subsidiaries that the Company intends to permanently invest and upon which no
deferred US income taxes have been provided is $ 29,879,503 as of June 30, 2025. The additional US income tax on unremitted foreign earnings,
if repatriated, would be offset in part by foreign tax credits. The extent of this offset would depend on many factors, including the
method of distribution, and specific earnings distributed. The Company determined that it is not practicable to determine unrecognized
deferred tax liability associated with the unremitted earnings attributable to the foreign subsidiaries.

 NOTE
14 - STOCKHOLDERS' EQUITY

the years ended June 30, 2025 and 2024, the Company issued 58,335 and 70,035 shares of common stock, respectively, to the independent Board
of Directors as part of their board compensation. The grant date fair value of the shares was $ 159,000 for each period, and was recorded as compensation expense in the accompanying
consolidated financial statements.

the year ended June 30, 2025, the Company issued 59,528 shares of common stock to the CEO for his bonus earned in fiscal year 2024. The
fair market value of the shares was $ 151,201.

the year ended June 30, 2025, the Company issued 2,680
shares of common stock to a consultant pursuant to the terms of his consultancy agreement. The grant date fair value of the shares
was $ 8,333
and was recorded as compensation expense in the accompanying consolidated financial statements.

the year ended June 30, 2024, the Company issued 5,000
shares of common stock to employees pursuant to the terms of their employment agreements. The grant date fair value of the shares
was $ 9,050
and was recorded as compensation expense in the accompanying consolidated financial statements.

 NOTE
15 – EQUITY INCENTIVE PLAN

 At
the Company's 2025 annual meeting of shareholders, the shareholders approved the 2025 Equity Incentive Plan (the "2025 Plan").
The 2025 Plan is the Company's sole active equity compensation plan and provides for the grant of stock options, stock appreciation
rights, restricted stock, restricted stock units, performance awards, and other stock-based awards to employees, directors, and consultants.
The maximum number of shares of common stock authorized for issuance under the 2025 Plan is 1,100,000. Shares subject to awards that
are forfeited, canceled, or expire without being exercised become available for grant under the plan. The 2025 Plan is administered by
the Compensation Committee of the Board of Directors, which has discretion to determine the terms of awards, including vesting and performance
conditions. The exercise price of stock options may not be less than the fair market value of the Company's common stock on the
date of grant, and the maximum term of any option is ten years. As of June 30, 2025, the remaining shares to be granted are 998,109 under
the 2025 Plan.

 F- 32

 Notes

 June

 Stock
Grants

 The
following table summarizes stock grants awarded as compensation:

 SUMMARY OF UNVESTED STOCK GRANTS AWARDED AS COMPENSATION

 #
 Number of shares

 Average Grant Date Fair Value ($)

 Unvested,
 June 30, 2023

 -

 $
 -

 Granted

 75,035

 $
 2.24

 Vested

 ( 75,035
)

 $
 2.24

 Unvested,
 June 30, 2024

 -

 $
 -

 Granted

 120,543

 $
 2.64

 Vested

 ( 120,543
)

 $
 2.64

 Unvested,
 June 30, 2025

 -

 $
 -

 For
the years ended June 30, 2025 and 2024, the Company recorded compensation expense of $ 167,333 and $ 168,050, respectively. In addition,
 59,528 shares were issued to the CEO for his bonus, which was earned during fiscal year 2024. The weighted average grant date fair value
is determined by the Company's closing stock price on the grant date.

stock purchase options consisted of the following:

 OPTIONS:

 SCHEDULE OF COMMON STOCK PURCHASE OPTIONS

 #
 of shares

 Average Exercise Price

 Average Remaining Contractual Life (in years)

 Aggregated
 Intrinsic Value

 Outstanding
 and exercisable, June 30, 2023

 -

 $
 -

 $
 -

 Granted

 250,000

 2.15

 0.5

 Exercised

 -

 -

 -

 Expired
 / Cancelled

 -

 -

 -

 Outstanding
 and exercisable, June 30, 2024

 250,000

 $
 2.15

 0.50

 $
 -

 Granted

 2.94

 1.89

 Exercised

 ( 220,000
)

 2.15

 -

 Expired
 / Cancelled

 ( 30,000
)

 2.15

 -

 Outstanding
 and exercisable, June 30, 2025

 $
 2.94

 1.89

 $
 8,500

 The
aggregate intrinsic value at June 30, 2025 represents the difference between the Company's closing stock price of $ 3.11 on June
30, 2025 and the exercise price of the in-the-money stock options.

 F- 33

 Notes

 June

 The
following table summarizes information about stock options outstanding and exercisable at June 30, 2025.

 SUMMARY OF STOCK OPTIONS OUTSTANDING

 Exercise
 Price

 Number
 Outstanding and Exercisable

 Average Remaining Contractual Life

 Average Exercise Price

 OPTIONS:

 $ 2.94

 1.89

 $
 2.94

 Totals

 1.89

 $
 2.94

 OPTIONS

the year ended June 30, 2025, the Company granted 50,000
options to a consultant with an exercise price of $ 2.94
per share, a 2 two-year
expiration date, and immediate vesting. Using the Black-Scholes method to value the options, the Company recorded $ 25,149
in compensation expense for these options in the accompanying consolidated financial statements.

the year ended June 30, 2024, the Company granted 250,000
options to officers and employees with an exercise price of $ 2.15
per share, a 1 one-year expiration date, and immediate vesting. Using the Black-Scholes method to value the options, the Company
recorded $ 101,424
in compensation expense for these options in the accompanying consolidated financial statements. The fair market value was
calculated using the Black-Scholes option pricing model.

 The
following table includes the assumptions used in the calculations:

OF SHARE OPTION ASSUMPTIONS

 June

 June

 Risk-free
 interest rate

 3.99
 %

 5.24
 %

 Expected
 life

 year

 months

 Expected
 volatility

 38.8
 %

 63.60
 %

 Expected
 dividend

 %

 %

 In
determining the fair value of share options, the Company utilized the simplified method to estimate the expected term
for certain share option grants. The simplified method was applied due to the Company's lack of sufficient historical data on employee
exercise behavior, which would otherwise be necessary to develop a more precise estimate of the expected term. The simplified method
estimates the expected term as the midpoint between the vesting period and the contractual term of the options.

 In
determining the fair value of share options, the Company utilized historical volatility as the basis for its expected volatility
assumption. Historical volatility was calculated using the daily closing prices of the Company's common stock over a period commensurate
with the expected term of the share options. The Company determined that historical volatility was an appropriate measure of future expectations,
as it reflects the stock's past performance and market conditions. No significant adjustments were made to historical volatility,
as the Company believes it provides a reasonable estimate of expected volatility for the purposes of option valuation.

 NOTE
16 – RETIREMENT PLANS

 The
Company and its subsidiaries have varying defined contribution plans based on country-specific laws. Employer contributions vary by subsidiary
from 0 % up to 8 % taking the form in some jurisdictions of employee matching contributions and in others direct employer contributions
mandated by local law. During the years ended June 30, 2025 and 2024, the Company contributed $ 1,363,234 and $ 1,156,977, respectively,
to these plans.

 F- 34

 Notes

 June

 NOTE
17 – SEGMENT INFORMATION AND GEOGRAPHIC AREAS

 The
Company has identified three segments for its products and services: North America, Europe, and Asia-Pacific. The 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, subscription and support 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 its particular regional location.
The Company's chief operating decision maker ("CODM") evaluates performance and allocates resources based on gross
profit and income from operations. The Company has designated its Chief Executive Officer as the CODM.

assets include all assets attributable to operations within the respective geographic regions, including cash, accounts receivable, revenue
in excess of billings, and property, plant, and equipment. Corporate assets, which primarily consist of cash and cash equivalents, goodwill,
and assets associated with the Company's corporate headquarters, are not allocated to the geographic segments and are shown separately.

 The
accounting policies of the reportable segments are the same as those described in Note 1, "Summary of Significant Accounting Policies."
Intersegment revenues are eliminated in consolidation.

 Prior
year results have been restated to conform to the current year presentation, reflecting the use of gross profit and income from operations
as the measures of segment performance evaluated by the CODM.

 F- 35

 Notes

 June

 The
following tables present financial information by reportable segment for the year ended June 30, 2025:

OF FINANCIAL INFORMATION BY REPORTABLE SEGMENT

 North

 Asia

 Total

 For
 the Year Ended

 June

 North

 Asia

 Total

 $
 -

 $
 111,377

 $
 487,256

 $
 598,633

 and support

 5,603,900

 4,560,260

 22,770,488

 32,934,648

 6,399,927

 9,972,363

 16,182,658

 32,554,948

 Intersegment
 revenues

 -

 -

 7,000,458

 7,000,458

 Total
 revenue from reportable segments

 $
 12,003,827

 $

 $
 46,440,860

 $
 73,088,687

 Elimination
 of intersegment revenues

 -

 -

 -

 ( 7,000,458
)

 Total
 consolidated revenues

 $

 from reportable segments

 $
 12,003,827

 $

 $
 46,440,860

 $
 73,088,687

 Salaries
 and consultants

 2,074,573

 4,607,703

 19,115,189

 25,797,465

 Travel

 277,680

 162,193

 1,623,638

 2,063,511

 -

 -

 952,331

 952,331

 Other
 (a)

 3,497,607

 4,836,247

 3,366,994

 11,700,848

 Gross
 Profit

 6,153,967

 5,037,857

 21,382,708

 32,574,532

 Selling
 and marketing

 2,103,890

 1,341,023

 6,278,262

 9,723,175

 3,167

 186,927

 321,358

 511,452

 and administrative

 755,194

 4,059,517

 8,502,694

 13,317,405

 (loss) from operations - reportable segments

 $
 3,291,716

 $
 ( 549,610
)

 $
 6,280,394

 $
 9,022,500

 Reconciliation:

 (loss) from operations - reportable segments

 $
 9,022,500

 operating expenses

 ( 5,520,782
)

 expense

 ( 871,355
)

 1,871,040

 Gain
 (loss) on foreign currency exchange transactions

 1,301,613

 Other
 income (expense)

 244,241

 Net
 income (loss) before income taxes

 $
 6,047,257

 F- 36

 Notes

 June

 North

 Asia

 Total

 As
 of

 June

 North

 Asia

 Total

 Cash

 $
 387,955

 $
 1,138,048

 $
 15,248,031

 $
 16,774,034

 receivable, net of allowance

 581,872

 1,084,418

 5,861,282

 7,527,572

 in excess of billings, net of allowance

 1,967,757

 3,178,780

 13,987,848

 19,134,385

 Other
 segment assets (b)

 243,550

 1,580,534

 7,066,725

 8,890,809

 Total
 segment assets

 $
 3,181,134

 $
 6,981,780

 $
 42,163,886

 $
 52,326,800

 Asset
 Reconciliation

 Total
 assets for reportable segments

 $
 52,326,800

 assets

 811,785

 not allocated to segments

 total

 $
 62,441,109

 North

 Asia

 Total

 For
 the year ended June 30, 2025

 North

 Asia

 Total

 Expenditures
 for property, plant and equipment

 $
 17,332

 $
 9,929

 $
 1,355,509

 $
 1,382,770

 F- 37

 Notes

 June

 The
following tables present financial information by reportable segment for the year ended June 30, 2024:

 North

 Asia

 Total

 For
 the Year Ended

 June

 North

 Asia

 Total

 $
 -

 $
 112,524

 $
 5,337,467

 $
 5,449,991

 and support

 4,693,618

 3,383,312

 19,875,838

 27,952,768

 1,240,179

 8,471,966

 18,278,187

 27,990,332

 Intersegment
 revenues

 -

 -

 3,061,465

 3,061,465

 Total
 revenue from reportable segments

 $
 5,933,797

 $

 $
 46,552,957

 $
 64,454,556

 Elimination
 of intersegment revenues

 -

 -

 -

 ( 3,061,465
)

 Total
 consolidated revenues

 $

 from reportable segments

 $
 5,933,797

 $

 $
 46,552,957

 $
 64,454,556

 Salaries
 and consultants

 1,658,561

 3,734,833

 18,229,513

 23,622,907

 Travel

 23,890

 191,306

 2,728,246

 2,943,442

 -

 -

 1,144,809

 1,144,809

 Other
 (a)

 1,550,465

 2,911,441

 2,996,622

 7,458,528

 Gross
 Profit

 2,700,881

 5,130,222

 21,453,767

 29,284,870

 Selling
 and marketing

 1,395,827

 933,203

 4,833,083

 7,162,113

 1,712

 231,018

 344,261

 576,991

 and administrative

 690,194

 4,063,242

 7,746,462

 12,499,898

 (loss) from operations - reportable segments

 $
 613,148

 $
 ( 97,241
)

 $
 8,529,961

 $
 9,045,868

 Reconciliation:

 (loss) from operations - reportable segments

 $
 9,045,868

 operating expenses

 ( 5,552,313
)

 expense

 ( 1,142,166
)

 1,911,258

 Gain
 (loss) on foreign currency exchange transactions

 ( 1,187,320
)

 Other
 income (expense)

 148,120

 Net
 income (loss) before income taxes

 $
 3,223,447

 F- 38

 Notes

 June

 North

 Asia

 Total

 As
 of

 June

 North

 Asia

 Total

 Cash

 $
 435,995

 $
 955,707

 $
 17,226,295

 $
 18,617,997

 receivable, net of allowance

 511,816

 2,433,951

 10,103,847

 13,049,614

 in excess of billings, net of allowance

 131,461

 1,091,941

 12,415,145

 13,638,547

 Other
 segment assets (b)

 370,770

 1,456,685

 6,941,920

 8,769,375

 Total
 segment assets

 $
 1,450,042

 $
 5,938,284

 $
 46,687,207

 $
 54,075,533

 Asset
 Reconciliation

 Total
 assets for reportable segments

 54,075,533

 assets

 808,385

 not allocated to segments

 total

 $
 64,186,442

 North

 Asia

 Total

 For
 the year ended June 30, 2024

 North

 Asia

 Total

 Expenditures
 for property, plant and equipment

 $
 -

 $
 179,102

 $
 336,302

 $
 515,404

 (a)
 Other costs of
goods sold include computer costs, third-party hardware and software costs, repair and maintenance, insurance, utilities, and communication
expenses.

 (b)
 Other assets include
property and equipment, right of use of assets, advances, deposits, and prepayments.

 F- 39

 Notes

 June

 Geographic
Information

 Disclosed
in the table below is geographic information for each country that comprised greater than five percent of total revenues for the years
ended June 30, 2025 and 2024.

 SCHEDULE OF GEOGRAPHIC INFORMATION

 June 30, 2025

 June 30, 2024

 Long-lived

 Long-lived

 China

 $
 17,043,193

 $
 108,837

 $
 20,747,744

 $
 354,122

 2,745,299

 585,401

 3,636,153

 929,651

 USA

 10,763,285

 175,247

 4,853,541

 337,427

 UK

 998,465

 983,126

 2,292,058

 4,514,487

 2,229,067

 4,621,210

 8,609,997

 5,923

 5,454,383

 7,168

 1,240,542

 -

 1,080,256

 -

 4,138,350

 -

 4,475,356

 189,131

 South

 814,817

 -

 857,218

 -

 South
 Korea

 1,506,456

 -

 2,491,606

 -

 Other
 Countries

 2,290,232

 430,622

 3,599,965

 -

 Total

 $

 $
 6,818,982

 $

 $
 7,421,835

 Disclosed
in the table below is the geographic information of total revenues by country for the years ended June 30, 2025 and 2024.

OF REVENUE STREAMS

 Total

 China

 USA

 UK

 South

 South
 Korea

 Other
 Countries

 2025

 Total

 China

 USA

 UK

 South

 South
 Korea

 Other
 Countries

 North
 America:

 $
 12,003,827

 $
 -

 $
 -

 $
 10,763,285

 $
 -

 $
 -

 $
 -

 $
 1,240,542

 $
 -

 $
 -

 $
 -

 $
 -

 Europe:

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 Asia-Pacific:

 39,440,402

 17,043,193

 2,745,299

 -

 -

 2,292,058

 8,609,997

 -

 4,138,350

 814,817

 1,506,456

 2,290,232

 Total

 $

 $
 17,043,193

 $
 2,745,299

 $
 10,763,285

 $

 $
 2,292,058

 $
 8,609,997

 $
 1,240,542

 $
 4,138,350

 $
 814,817

 $
 1,506,456

 $
 2,290,232

 R evenue

 $

 $
 17,043,193

 $
 2,745,299

 $
 10,763,285

 $

 $
 2,292,058

 $
 8,609,997

 $
 1,240,542

 $
 4,138,350

 $
 814,817

 $
 1,506,456

 $
 2,290,232

 Total

 China

 USA

 UK

 South

 South
 Korea

 Other Countries

 2024

 Total

 China

 USA

 UK

 South

 South
 Korea

 Other
 Countries

 North
 America:

 $
 5,933,797

 $
 -

 $
 -

 $
 4,853,541

 $
 -

 $
 -

 $
 -

 $
 1,080,256

 $
 -

 $
 -

 $
 -

 $
 -

 Europe:

 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

 Asia-Pacific:

 43,491,492

 20,747,744

 3,636,153

 -

 -

 2,229,067

 5,454,383

 -

 4,475,356

 857,218

 2,491,606

 3,599,965

 Total

 $

 $
 20,747,744

 $
 3,636,153

 $
 4,853,541

 $

 $
 2,229,067

 $
 5,454,383

 $
 1,080,256

 $
 4,475,356

 $
 857,218

 $
 2,491,606

 $
 3,599,965

 $

 $
 20,747,744

 $
 3,636,153

 $
 4,853,541

 $

 $
 2,229,067

 $
 5,454,383

 $
 1,080,256

 $
 4,475,356

 $
 857,218

 $
 2,491,606

 $
 3,599,965

 F- 40

 Notes

 June

 NOTE
18– BUSINESS COMBINATIONS AND COMMON CONTROL TRANSACTIONS

 In
July 2024, NTA, a wholly owned subsidiary of NetSol Technologies, Inc. ("NTI"), entered into a share purchase agreement with
NTI and the remaining minority shareholders to acquire all issued and outstanding shares of OTOZ. In March 2025, NTA
filed the merger documents with the respective state agencies with an effective date of April 1, 2025.

 The
transaction occurred between entities under common control. Accordingly, all assets and liabilities of OTOZ were transferred
to NTA at their carrying amounts, and no gain or loss was recognized as a result of the transaction. This merger did not result in any
change to the consolidated accounting for the assets and liabilities transferred, as both entities were controlled by NTI before and
after the transaction. The transaction was accounted for in accordance with ASC 805-50, Business Combinations – Related Parties
and had no material impact on the consolidated financial statements except for the change in legal entity structure. Details of the purchase
price and accounting treatment for the noncontrolling interest are provided in Note 19 – Non-Controlling Interest in Subsidiaries.

 NOTE
19 – NON-CONTROLLING INTEREST IN SUBSIDIARIES

 The
Company had non-controlling interests in several of its subsidiaries. The balance of non-controlling interest was as follows:

 SCHEDULE OF BALANCE OF NON-CONTROLLING INTEREST

 SUBSIDIARY

 Non-Controlling
 Interest %

 Non-Controlling
 Interest at June 30, 2025

 PK

 30.24
 %

 $
 4,496,723

 Innovation

 30.24
 %

 ( 637,529
)

 NAMECET

 30.24
 %

 567,819

 NIAI

 30.24
 %

 ( 1,471
)

 Thai

 0.006
 %

 ( 184
)

 OTOZ
 Thai

 0.01
 %

 OTOZ

 0.00
 %

 -

 Total

 $
 4,425,365

 SUBSIDIARY

 Non-Controlling
 Interest %

 Non-Controlling
 Interest at June 30, 2024

 PK

 32.38
 %

 $
 4,679,101

 Innovation

 32.38
 %

 137,232

 NAMECET

 32.38
 %

 ( 21,014
)

 Thai

 0.006
 %

 ( 163
)

 OTOZ
 Thai

 5.60
 %

 ( 17,483
)

 OTOZ

 5.59
 %

 ( 83,255
)

 Total

 $

 F- 41

 Notes

 June

the year ended June 30, 2025, NetSol PK, a majority owned subsidiary of the Company, repurchased 2,690,251 shares of its outstanding
common stock from the open market for $ 1,503,662. The repurchase did not result in a change of control and was therefore accounted for
as an equity transaction in accordance with ASC 810-10. Due to this purchase, the non-controlling interest in NetSol PK, NetSol Innovation
and NAMECET, decreased from 32.38 % at June 30, 2024 to 30.24 % at June 30, 2025. The carrying amount of the non-controlling interest was
reduced by $ 1,532,797, and the difference of $ 29,135 was recognized as an increase in additional paid-in capital in the Company's
consolidated equity.

the year ended June 30, 2025, the Company acquired the remaining 177,558 minority shares from the OTOZ non-controlling
shareholders for $ 8,878. As a result, the Company's ownership interest increased, reducing the non-controlling interest from 5.59 %
to 0.0 %. The effective non-controlling interest in Otoz Thai decreased to 0.01 %. OTOZ was merged into NTA during
the year ended June 30, 2025.

 The
following schedule discloses the effect on the Company's equity due to the changes in the Company's ownership interest.

 SCHEDULE OF CHANGE IN OWNERSHIP INTEREST

 2025

 2024

 For

 Ended

 2025

 2024

 Net
 income (loss) attributable to NetSol

 $

 $

 Transfer
 to (from) non-controlling interest

 Decrease
 in paid-in capital for purchase of 177,558 shares of OTOZ Inc common stock

 ( 103,132
)

 -

 Increase
 in paid-in capital for purchase of 2,690,251 shares of common stock of NetSol PK from Open Market

 29,135

 -

 Net
 transfer to (from) non-controlling interest

 ( 73,997
)

 -

 Change from net income (loss) attributable to NetSol and transfer (to) from non-controlling interest

 $
 2,849,236

 $

 F- 42