NETSOL TECHNOLOGIES INC

Previous wording

The following discussion is intended to assist in an understanding of the Company’s financial position and results of operations for the three and six months ended December 31, 2023. The following discussion should be read in conjunction with the information included within our Annual Report on Form 10-K for the year ended June 30, 2023, and the Condensed Consolidated Financial Statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q.

Current wording

The following discussion is intended to assist in an understanding of the Company’s financial position and results of operations for the three and nine months ended March 31, 2024. The following discussion should be read in conjunction with the information included within our Annual Report on Form 10-K for the year ended June 30, 2023, and the Condensed Consolidated Financial Statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q.

Previous wording

Otoz TMprovides a white-label SaaS platform to OEMs, finance companies, dealers, and start-ups that enables short and long-term on-demand mobility models (subscriptions, rental and car-sharing) and digital retail.

Current wording

Otoz TM provides a white-label SaaS platform to OEMs, finance companies, dealers, and start-ups that enables short and long-term on-demand mobility models (subscriptions, rental and car-sharing) and digital retail.

Previous wording

Otoz TMis built on state-of-the-art technology, offering open Application Programming Interfaces (APIs) and ecosystem partner integrations that are crucial to digital retail and mobility operations including finance and insurance providers, trade-in tools, KYC and fraud detection tools, CRM systems, website providers (Tier 1 – Tier 3), marketing toolkits, inventory feeds, pricing engines, tax engine, payment processors, an insurance marketplace and vehicle delivery logistics providers.

Current wording

Otoz TM is built on state-of-the-art technology, offering open Application Programming Interfaces (APIs) and ecosystem partner integrations that are crucial to digital retail and mobility operations including finance and insurance providers, trade-in tools, KYC and fraud detection tools, CRM systems, website providers (Tier 1 – Tier 3), marketing toolkits, inventory feeds, pricing engines, tax engine, payment processors, an insurance marketplace and vehicle delivery logistics providers.

Previous wording

Otoz TMplatform consists of two portals:

Current wording

Otoz TM platform consists of two portals:

Previous wording

NetSol introduced AppexNow - the first marketplace for API-first products specifically for the global credit, finance, and leasing industry. Two products have been launched under the umbrella of the AppexNow marketplace until now; i.e., Flex and Hubex. NetSol will introduce and launch further products and services under this marketplace in the future.

Current wording

NetSol introduced AppexNow - the first marketplace for API-first products specifically for the global credit, finance, and leasing industry. Two products, Flex and Hubex, have been launched under the umbrella of the AppexNow marketplace. NetSol will introduce and launch further products and services under this marketplace in the future.

Previous wording

The first product offering from the AppexNow marketplace, Flex is an API-based, ready-to-use calculation engine. It is a pure play SaaS product that is cloud-based and can be integrated seamlessly into an organization’s products, services, and ecosystem. The calculation engine intelligently adapts to demand by monitoring usage to maintain reliable and predictable performance at desired costs. It is a one-stop solution that guarantees precise calculations at all stages of the contract lifecycle through various calculation types.

Current wording

Flex is an API-based, ready-to-use calculation engine. It is a pure play SaaS product that is cloud-based and can be integrated seamlessly into an organization’s products, services, and ecosystem. The calculation engine intelligently adapts to demand by monitoring usage to maintain reliable and predictable performance at desired costs. It is a one-stop solution that guarantees precise calculations at all stages of the contract lifecycle through various calculation types.

Previous wording

It is a comprehensive solution which creates an ecosystem of value across multiple functions, systems and industries to fuel growth and propel businesses into the future by increasing delivery efficiency and product management, centralization through a connected ecosystem resulting in a higher ROI and a larger market share.

Current wording

It is a comprehensive solution which creates an ecosystem of value across multiple functions, systems and industries to fuel growth and propel businesses into the future by increasing delivery efficiency and product management, centralization through a connected ecosystem.

Previous wording

A dedicated team is under the leadership of Dr. Ali Ahmed, Chief Data Scientist at NetSol, to develop artificial intelligence and machine learning solutions. With experience in machine learning, scientific computing and computer vision, Dr. Ahmed has extensive experience in developing and implementing algorithms for industrial solutions in predictive maintenance.

Current wording

Under the leadership of Dr. Ali Ahmed, Chief Data Scientist at NetSol, a dedicated team is developing artificial intelligence and machine learning solutions. With experience in machine learning, scientific computing and computer vision, Dr. Ahmed has extensive experience in developing and implementing algorithms for industrial solutions in predictive maintenance.

Previous wording

License fees for the three months ended December 31, 2023 were $2,990,453 compared to $15,884 for the three months ended December 31, 2022 reflecting an increase of $2,974,569 with an increase in constant currency of $3,037,196. During the three months ended December 31, 2023, 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.

Current wording

License fees for the three months ended March 31, 2024 were $558,340 compared to $1,982,985 for the three months ended March 31, 2023 reflecting a decrease of $1,424,645 with a decrease in constant currency of $1,406,271. During the three months ended March 31, 2024, 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. During the three months ended March 31, 2023, we recognized approximately $1,918,000 related to a new NFS Ascent® agreement with Kubota in Australia.

Previous wording

Subscription and support fees for the three months ended December 31, 2023 were $6,827,781 compared to $6,502,669 for the three months ended December 31, 2022 reflecting an increase of $325,112 with an increase in constant currency of $293,133. Subscription and support fees begin once a customer has “gone live” with our product. Subscription and support fees are recurring in nature, and we anticipate these fees to gradually increase as we implement both our NFS legacy products and NFS Ascent®.

Current wording

Subscription and support fees for the three months ended March 31, 2024 were $7,140,358 compared to $6,656,082 for the three months ended March 31, 2023 reflecting an increase of $484,276 with an increase in constant currency of $534,352. Subscription and support fees begin once a customer has “gone live” with our product. Subscription and support fees are recurring in nature, and we anticipate these fees to gradually increase as we implement both our NFS legacy products and NFS Ascent®.

Previous wording

Services income for the three months ended December 31, 2023 was $5,419,707 compared to $5,871,805 for the three months ended December 31, 2022 reflecting a decrease of $452,098 with a decrease in constant currency of $470,501. The decrease is due to the decrease in fees associated with current implementations.

Current wording

Services income for the three months ended March 31, 2024 was $7,765,818 compared to $4,867,322 for the three months ended March 31, 2023 reflecting an increase of $2,898,496 with an increase in constant currency of $2,968,472. The increase is due to the increase in fees associated with current implementations.

Previous wording

The gross profit was $7,175,737, for the three months ended December 31, 2023 compared with $3,142.463 for the three months ended December 31, 2022. This is an increase of $4,033,274 with an increase in constant currency of $2,773,031. The gross profit percentage for the three months ended December 31, 2023 also increased to 47.1% from 25.4% for the three months ended December 31, 2022. The cost of sales was $8,062,204 for the three months ended December 31, 2023 compared to $9,247,895 for the three months ended December 31, 2022 for a decrease of $1,185,691 and on a constant currency basis an increase of $105,865. As a percentage of sales, cost of sales decreased from 74.6% for the three months ended December 31, 2022 to 52.9% for the three months ended December 31, 2023.

Current wording

The gross profit was $7,474,820, for the three months ended March 31, 2024 compared with $4,705,029 for the three months ended March 31, 2023. This is an increase of $2,769,791 with an increase in constant currency of $2,524,063. The gross profit percentage for the three months ended March 31, 2024 also increased to 48.3% from 34.8% for the three months ended March 31, 2023. The cost of sales was $7,989,696 for the three months ended March 31, 2024 compared to $8,801,360 for the three months ended March 31, 2023 for a decrease of $811,664 and on a constant currency basis a decrease of $427,511. As a percentage of sales, cost of sales decreased from 65.2% for the three months ended March 31, 2023 to 51.7% for the three months ended March 31, 2024.

Previous wording

Salaries and consultant fees decreased by $1,038,809 from $6,942,171 for the three months ended December 31, 2022 to $5,903,362 for the three months ended December 31, 2023 and on a constant currency basis decreased by $128,762. As a percentage of sales, salaries and consultant expense decreased from 56.0% for the three months ended December 31, 2022 to 38.7% for the three months ended December 31, 2023.

Current wording

Salaries and consultant fees decreased by $649,904 from $6,453,814 for the three months ended March 31, 2023 to $5,803,910 for the three months ended March 31, 2024 and on a constant currency basis decreased by $377,178. As a percentage of sales, salaries and consultant expense decreased from 47.8% for the three months ended March 31, 2023 to 37.5% for the three months ended March 31, 2024.

Previous wording

Travel expenses were $748,072 for the three months ended December 31, 2023 compared to $635,298 for the three months ended December 31, 2022 for an increase of $112,774 with an increase in constant currency of $229,251. The increase in travel expense is due to the increase in travel as countries have been lifting travel restrictions. As a percentage of sales, travel expense decreased from 5.1% for the three months ended December 31, 2022 to 4.9% for the three months ended December 31, 2023.

Current wording

Travel expenses were $799,560 for the three months ended March 31, 2024 compared to $724,431 for the three months ended March 31, 2023 for an increase of $75,129 with an increase in constant currency of $119,840. The increase in travel expense is due to the increase in travel for the current implementations. As a percentage of sales, travel expense slightly decreased from 5.4% for the three months ended March 31, 2023 to 5.2% for the three months ended March 31, 2024.

Previous wording

Depreciation and amortization expense decreased to $264,374 compared to $693,278 for the three months ended December 31, 2022 or a decrease of $428,904 and on a constant currency basis a decrease of $361,721. The decrease is primarily attributed to the full amortization of capitalized software costs in the quarter ending December 31, 2023.

Current wording

Depreciation and amortization expense decreased to $250,126 compared to $602,829 for the three months ended March 31, 2023 or a decrease of $352,703 and on a constant currency basis a decrease of $334,639. The decrease is primarily attributed to the full amortization of capitalized software costs in the quarter ending March 31, 2024.

Previous wording

Other costs increased to $1,146,396 for the three months ended December 31, 2023 compared to $977,148 for the three months ended December 31, 2022 or an increase of $169,248 and on a constant currency basis an increase of $367,097.

Current wording

Other costs increased to $1,136,100 for the three months ended March 31, 2024 compared to $1,020,286 for the three months ended March 31, 2023 or an increase of $115,814 and on a constant currency basis an increase of $164,466.

Previous wording

Operating expenses were $6,148,905 for the three months ended December 31, 2023 compared to $6,188,977, for the three months ended December 31, 2022 for a decrease of $40,072 and on a constant currency basis an increase of $521,827. As a percentage of sales, it decreased from 50.0% to 40.4%. The increase in operating expenses on a constant currency basis was primarily due to increases in salaries and wages, professional services, and other general and administrative expenses, offset by a decrease in selling and marketing expenses.

Current wording

Operating expenses were $6,156,917 for the three months ended March 31, 2024 compared to $5,635,464, for the three months ended March 31, 2023 for an increase of $521,453 and on a constant currency basis an increase of $692,778. As a percentage of sales, it decreased from 41.7% to 39.8%. The increase in operating expenses was primarily due to increases in selling and marketing expenses, salaries and wages and other general and administrative expenses.

Previous wording

General and administrative expenses were $3,858,195 for the three months ended December 31, 2023 compared to $3,510,389 for the three months ended December 31, 2022 or an increase of $347,806 and on a constant currency basis an increase of $629,121. During the three months ended December 31, 2023, salaries increased by approximately $154,192 and increased $350,096 on a constant currency basis, and other general and administrative expenses increased approximately $193,6124 or increased by $279,025 on a constant currency basis.

Current wording

General and administrative expenses were $3,840,146 for the three months ended March 31, 2024 compared to $3,509,212 for the three months ended March 31, 2023 or an increase of $330,934 and on a constant currency basis an increase of $406,122. During the three months ended March 31, 2024, salaries increased by approximately $214,275 and increased $265,787 on a constant currency basis, and other general and administrative expenses increased approximately $116,659 or increased by $140,335 on a constant currency basis.

Previous wording

Research and development cost was $341,411 for the three months ended December 31, 2023 compared to $472,904, for the three months ended December 31, 2022 for a decrease of $131,493 and on a constant currency basis a decrease of $44,230.

Current wording

Research and development cost was $345,582 for the three months ended March 31, 2024 compared to $302,262, for the three months ended March 31, 2023 for an increase of $43,320 and on a constant currency basis an increase of $67,526.

Previous wording

Income from operations was $1,026,832 for the three months ended December 31, 2023 compared to a loss of $3,046,514 for the three months ended December 31, 2022. This represents an increase in income from operations of $4,073,346 with an increase in income from operations of $2,251,204 on a constant currency basis for the three months ended December 31, 2023 compared with the three months ended December 31, 2022. As a percentage of sales, income from operations was 6.7% for the three months ended December 31, 2023 compared to loss of 24.6% for the three months ended December 31, 2022.

Current wording

Income from operations was $1,317,903 for the three months ended March 31, 2024 compared to a loss of $930,435 for the three months ended March 31, 2023. This represents an increase in income from operations of $2,248,338 with an increase in income from operations of $1,831,285 on a constant currency basis for the three months ended March 31, 2024 compared with the three months ended March 31, 2023. As a percentage of sales, income from operations was 8.5% for the three months ended March 31, 2024 compared to loss of 6.9% for the three months ended March 31, 2023.

Previous wording

Other income was $106,036 for the three months ended December 31, 2023 compared to $864,607 for the three months ended December 31, 2022. This represents a decrease of $758,571 with a decrease of $738,519 on a constant currency basis. The decrease is primarily due to the foreign currency exchange transactions. 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 three months ended December 31, 2023, we recognized a loss of $14,617 in foreign currency exchange transactions compared to a gain of $657,223 for the three months ended December 31, 2022. During the three months ended December 31, 2023, the value of the U.S. dollar decreased 2.8% and the Euro increased 1.5%, compared to the PKR. During the three months ended December 31, 2022, the value of the U.S. dollar decreased 0.7% and the Euro increased 8.5%, compared to the PKR.

Current wording

Other expense was $855,464 for the three months ended March 31, 2024 compared to other income of $5,400,684 for the three months ended March 31, 2023. This represents a decrease in other income of $6,256,148 with a decrease of $6,318,621 on a constant currency basis. The decrease is primarily due to the foreign currency exchange transactions. 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 three months ended March 31, 2024, we recognized a loss of $963,887 in foreign currency exchange transactions compared to a gain of $5,385,591 for the three months ended March 31, 2023. During the three months ended March 31, 2024, the value of the U.S. dollar and the Euro decreased 0.6% and 2.8%, compared to the PKR. During the three months ended March 31, 2023, the value of the U.S. dollar increased 25.3% and the Euro increased 27.3%, compared to the PKR.

Previous wording

For the three months ended December 31, 2023, the net income attributable to non-controlling interest was $574,499, compared to a net loss attributable to non-controlling interest of $309,037 for the three months ended December 31, 2022. The increase in non-controlling interest is primarily due to the increase in net income of NetSol PK.

Current wording

For the three months ended March 31, 2024, the net loss attributable to non-controlling interest was $11,679, compared to a net income attributable to non-controlling interest of $1,697,908 for the three months ended March 31, 2023. The decrease in non-controlling interest is primarily due to the decrease in net income from NetSol PK and an increase in net loss from NetSol Innovation.

Previous wording

The net income was $408,316 for the three months ended December 31, 2023 compared to a net loss of $2,092,926 for the three months ended December 31, 2022. This is an increase in net income of $2,501,242 with an increase of $1,191,078 on a constant currency basis, compared to the prior year. For the three months ended December 31, 2023, net income per share was $0.04 for basic and diluted shares compared to net loss per share of $0.19 for basic and diluted shares for the three months ended December 31, 2022.

Current wording

Net income was $327,549 for the three months ended March 31, 2024 compared to $2,544,623 for the three months ended March 31, 2023. This is a decrease in net income of $2,217,074 with a decrease of $2,579,348 on a constant currency basis, compared to the prior year. For the three months ended March 31, 2024, net income per share was $0.03 for basic and diluted shares compared to net income per share of $0.23 for basic and diluted shares for the three months ended March 31, 2023.

Previous wording

The following table sets forth the items in our unaudited condensed consolidated statement of operations for the six months ended December 31, 2023 and 2022 as a percentage of revenues.

Current wording

The following table sets forth the items in our unaudited condensed consolidated statement of operations for the nine months ended March 31, 2024 and 2023 as a percentage of revenues.

Previous wording

Net revenues for the six months ended December 31, 2023 and 2022 are broken out among the segments as follows:

Current wording

Net revenues for the nine months ended March 31, 2024 and 2023 are broken out among the segments as follows:

Previous wording

License fees for the six months ended December 31, 2023 were $4,270,902 compared to $265,844 for the six months ended December 31, 2022 reflecting an increase of $4,005,058 with an increase in constant currency of $4,037,015. During the six months ended December 31, 2023, 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. During the six months ended December 31, 2022, we recognized approximately $188,000 related to a new agreement with the Government of Khyber Pakhtunkhwa for the sale of our Ascent® product.

Current wording

License fees for the nine months ended March 31, 2024 were $4,829,242 compared to $2,248,829 for the nine months ended March 31, 2023 reflecting an increase of $2,580,413 with an increase in constant currency of $2,631,044. During the nine months ended March 31, 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. During the nine months ended March 31, 2023, 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, approximately $1,918,000 related to a new NFS Ascent®agreement with Kubota in Australia and approximately $188,000 related to a new agreement with the Government of Khyber Pakhtunkhwa for the sale of our Ascent® product.

Previous wording

Subscription and support fees for the six months ended December 31, 2023 were $13,340,024 compared to $12,519,503 for the six months ended December 31, 2022 reflecting an increase of $820,521 with an increase in constant currency of $792,292. Subscription and support fees begin once a customer has “gone live” with our product. Subscription and support fees are recurring in nature, and we anticipate these fees to gradually increase as we implement both our NFS legacy products and NFS Ascent®.

Current wording

Subscription and support fees for the nine months ended March 31, 2024 were $20,480,382 compared to $19,175,585 for the nine months ended March 31, 2023 reflecting an increase of $1,304,797 with an increase in constant currency of $1,326,644. Subscription and support fees begin once a customer has “gone live” with our product. Subscription and support fees are recurring in nature, and we anticipate these fees to gradually increase as we implement both our NFS legacy products and NFS Ascent®.

Previous wording

Services income for the six months ended December 31, 2023 was $11,869,196 compared to $12,311,130 for the six months ended December 31, 2022 reflecting a decrease of $441,934 with a decrease in constant currency of $393,906. The decrease is due to the decrease in fees associated with current implementations.

Current wording

Services income for the nine months ended March 31, 2024 was $19,635,014 compared to $17,178,452 for the nine months ended March 31, 2023 reflecting an increase of $2,456,562 with an increase in constant currency of $2,593,634. The increase is due to the increase in fees associated with current implementations.

Previous wording

The gross profit was $13,337,754, for the six months ended December 31, 2023 compared with $7,394,460 for the six months ended December 31, 2022. This is an increase of $5,943,294 with an increase in constant currency of $3,183,337. The gross profit percentage for the six months ended December 31, 2023 also increased to 45.2% from 29.5% for the six months ended December 31, 2022. The cost of sales was $16,142,368 for the six months ended December 31, 2023 compared to $17,702,017 for the six months ended December 31, 2022 for a decrease of $1,559,649 and on a constant currency basis an increase of $1,271,432. As a percentage of sales, cost of sales decreased from 70.5% for the six months ended December 31, 2022 to 54.8% for the six months ended December 31, 2023.

Current wording

The gross profit was $20,812,574, for the nine months ended March 31, 2024 compared with $12,099,489 for the nine months ended March 31, 2023. This is an increase of $8,713,085 with an increase in constant currency of $5,707,400. The gross profit percentage for the nine months ended March 31, 2024 increased to 46.3% from 31.3% for the nine months ended March 31, 2023. The cost of sales was $24,132,064 for the nine months ended March 31, 2024 compared to $26,503,377 for the nine months ended March 31, 2023 for a decrease of $2,371,313 and on a constant currency basis an increase of $843,921. As a percentage of sales, cost of sales decreased from 68.7% for the nine months ended March 31, 2023 to 53.7% for the nine months ended March 31, 2024.

Previous wording

Salaries and consultant fees decreased by $1,167,401 from $13,028,906 for the six months ended December 31, 2022 to $11,861,505 for the six months ended December 31, 2023 and on a constant currency basis increased by $834,064. The increase is due to annual salary raises. As a percentage of sales, salaries and consultant expense decreased from 51.9% for the six months ended December 31, 2022 to 40.2% for the six months ended December 31, 2023.

Current wording

Salaries and consultant fees decreased by $1,817,305 from $19,482,720 for the nine months ended March 31, 2023 to $17,665,415 for the nine months ended March 31, 2024 and on a constant currency basis increased by $456,886. The increase on a constant currency basis is due to annual salary raises. As a percentage of sales, salaries and consultant expense decreased from 50.5% for the nine months ended March 31, 2023 to 39.3% for the nine months ended March 31, 2024.

Previous wording

Travel expense was $1,408,439 for the six months ended December 31, 2023 compared to $1,027,643 for the six months ended December 31, 2022 for an increase of $380,796 with an increase in constant currency of $618,393. The increase in travel expense is due to the increase in travel as countries begin lifting travel restrictions.

Current wording

Travel expense was $2,207,999 for the nine months ended March 31, 2024 compared to $1,752,074 for the nine months ended March 31, 2023 for an increase of $455,925 with an increase in constant currency of $738,233. The increase in travel expense is due to the increase in travel for current implementations.

Previous wording

Depreciation and amortization expense decreased to $657,357 compared to $1,347,327 for the six months ended December 31, 2022 or a decrease of $689,970 and on a constant currency basis a decrease of $502,138.

Current wording

Depreciation and amortization expense decreased to $907,483 compared to $1,950,156 for the nine months ended March 31, 2023 or a decrease of $1,042,673 and on a constant currency basis a decrease of $836,777. The decrease is primarily attributed to the full amortization of capitalized software costs in the quarter ending March 31, 2024.

Previous wording

Other costs decreased to $2,215,067 for the six months ended December 31, 2023 compared to $2,298,141 for the six months ended December 31, 2022 or a decrease of $83,074 and on a constant currency basis an increase of $321,113. The increase on a constant currency basis is mainly due to increases in computer costs.

Current wording

Other costs increased to $3,351,167 for the nine months ended March 31, 2024 compared to $3,318,427 for the nine months ended March 31, 2023 or an increase of $32,740 and on a constant currency basis an increase of $485,579. The increase on a constant currency basis is mainly due to increases in computer costs.

Previous wording

Operating expenses were $11,960,293 for the six months ended December 31, 2023 compared to $12,337,165, for the six months ended December 31, 2022 for a decrease of $376,872 and on a constant currency basis an increase of $806,689. As a percentage of sales, it decreased from 49.2% to 40.6%. The increase in operating expenses on constant currency basis was primarily due to increases in selling expenses, professional services and general and administrative expenses offset by a decrease in research and development costs.

Current wording

Operating expenses were $18,117,210 for the nine months ended March 31, 2024 compared to $17,972,629, for the nine months ended March 31, 2023 for an increase of $144,581 and on a constant currency basis an increase of $1,499,467. As a percentage of sales, it decreased from 46.6% to 40.3%. The increase in operating expenses on constant currency basis was primarily due to increases in selling expenses, general and administrative expenses, and research and development costs.

Previous wording

General and administrative expenses were $7,444,496 for the six months ended December 31, 2023 compared to $7,235,819 for the six months ended December 31, 2022 or an increase of $208,677 and on a constant currency basis an increase of $791,007. During the six months ended December 31, 2023, salaries increased by approximately $233,293 and increased $634,362 on a constant currency basis, and other general and administrative expenses decreased approximately $24,616 and increased $156,645 on a constant currency basis.

Current wording

General and administrative expenses were $11,284,642 for the nine months ended March 31, 2024 compared to $10,745,031 for the nine months ended March 31, 2023 or an increase of $539,611 and on a constant currency basis an increase of $1,197,129. During the nine months ended March 31, 2024, salaries increased by approximately $447,568 and increased $900,149 on a constant currency basis, and other general and administrative expenses increased approximately $92,043 and increased $296,980 on a constant currency basis.

Previous wording

Research and development cost was $719,830 for the six months ended December 31, 2023 compared to $942,531, for the six months ended December 31, 2022 for a decrease of $222,701 and on a constant currency basis a decrease of $38,951.

Current wording

Research and development cost was $1,065,412 for the nine months ended March 31, 2024 compared to $1,244,793, for the nine months ended March 31, 2023 for a decrease of $179,381 and on a constant currency basis an increase of $28,575.

Previous wording

Income from operations was $1,377,461 for the six months ended December 31, 2023 compared to a loss from operations of $4,942,705 for the six months ended December 31, 2022. This represents an increase in income from operations of $6,320,166 with an increase in income from operations of $2,376,648 on a constant currency basis for the six months ended December 31, 2023 compared with the six months ended December 31, 2022. As a percentage of sales, income from operations was 4.7% for the six months ended December 31, 2023 compared to loss from operations of 19.7% for the six months ended December 31, 2022.

Current wording

Income from operations was $2,695,364 for the nine months ended March 31, 2024 compared to a loss from operations of $5,873,140 for the nine months ended March 31, 2023. This represents an increase in income from operations of $8,568,504 with an increase in income from operations of $4,207,933 on a constant currency basis for the nine months ended March 31, 2024 compared with the nine months ended March 31, 2023. As a percentage of sales, income from operations was 6.0% for the nine months ended March 31, 2024 compared to a loss from operations of 15.2% for the nine months ended March 31, 2023.

Previous wording

Other income was $168,365 for the six months ended December 31, 2023 compared to $2,516,175 for the six months ended December 31, 2022. This represents a decrease of $2,347,810 with a decrease of $2,308,740 on a constant currency basis. 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 six months ended December 31, 2023, we recognized a loss of $148,870 in foreign currency exchange transactions compared to a gain of $1,972,928 for the six months ended December 31, 2022. During the six months ended December 31, 2023, the value of the U.S. dollar and the Euro decreased 2.6% and 1.2%, respectively, compared to the PKR. During the six months ended December 31, 2022, the value of the U.S. dollar and the Euro increased 10.3% and 12.9%, respectively, compared to the PKR.

Current wording

Other expense was $687,099 for the nine months ended March 31, 2024 compared to other income of $7,916,859 for the nine months ended March 31, 2023. This represents a decrease in other income of $8,603,958 with a decrease of $8,627,361 on a constant currency basis. 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 nine months ended March 31, 2024, we recognized a loss of $1,112,757 in foreign currency exchange transactions compared to a gain of $7,358,519 for the nine months ended March 31, 2023. During the nine months ended March 31, 2024, the value of the U.S. dollar and the Euro decreased 3.2% and 4.0%, respectively, compared to the PKR. During the nine months ended March 31, 2023, the value of the U.S. dollar and the Euro increased 38.2% and 43.8%, respectively, compared to the PKR.

Previous wording

For the six months ended December 31, 2023, the net income attributable to non-controlling interest was $834,672, compared to a net loss of $126,279 for the six months ended December 31, 2022. The decrease in non-controlling interest is primarily due to the decrease in net income of NetSol PK.

Current wording

For the nine months ended March 31, 2024, the net income attributable to non-controlling interest was $822,993, compared to $1,571,629 for the nine months ended March 31, 2023. The decrease in non-controlling interest is primarily due to the decrease in net income of NetSol PK and an increase in net loss from NetSol Innovation.

Previous wording

The net income was $439,206 for the six months ended December 31, 2023 compared to a net loss of $2,713,655 for the six months ended December 31, 2022. This is an increase of $3,152,861 with an increase of $355,783 on a constant currency basis, compared to the prior year. For the six months ended December 31, 2023, net income per share was $0.04 for basic and diluted shares compared to net loss per share of $0.24 for basic and diluted shares for the six months ended December 31, 2022.

Current wording

Net income was $766,755 for the nine months ended March 31, 2024 compared to a net loss of $169,032 for the nine months ended March 31, 2023. This is an increase of $935,787 with a decrease of $2,223,565 on a constant currency basis, compared to the prior year. For the nine months ended March 31, 2024, net income per share was $0.07 for basic and diluted shares compared to net loss per share of $0.01 for basic and diluted shares for the nine months ended March 31, 2023.