Company: NTWK
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021835
Chunk: 18

Company: NETSOL TECHNOLOGIES INC
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 18
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 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:

 SCHEDULE OF REVENUES IN EXCESS OF BILLINGS AND DEFERRED REVENUE

    As of  
    As of 

    September
    30, 2025  
    June
    30, 2025 

    Revenues
    in excess of billings 
    $14,875,704  
    $19,134,385 

    Unearned revenue 
    $3,735,828  
    $3,029,850 

The
Company’s unearned revenue reconciliation is as follows:

 SCHEDULE OF UNEARNED REVENUE RECONCILIATION

    Unearned
    Revenue 
  
    Balance at June 30, 2025 
    $3,029,850 
  
    Invoiced 
     8,793,181 
  
    Revenue Recognized 
     (8,003,905)
  
    Adjustments 
     (83,298)
  
    Balance at September 30, 2025 
    $3,735,828 

During
the three months ended September 30, 2025, the Company recognized revenue of $1,570,000, that 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.

    Page 15

NETSOL
TECHNOLOGIES, INC.

Notes
to Condensed Consolidated Financial Statements

September
30, 2025

(Unaud