Commitments and Contingencies

12 Months Ended

Jun. 30, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 16 – COMMITMENTS AND CONTINGENCIES

(A) Non-cancellable operating leases

● The Company’s headquarters is located in Calabasas California with approximately 7,210 rentable square feet for $22,456 per month. The term of the lease is for five years and five months and expires August 31, 2017. A $23,821 security deposit is included in other current assets in the accompanying consolidated financial statements.

● The Australia lease is a two-year lease that expires in March 2016 with a monthly rent of approximately $8,437.

● The Beijing lease is a three-year lease that expires in January 2017 with a monthly rent of approximately $13,725.

● The Bangkok lease is a three years lease expiring in November 2016 with monthly rent of approximately $8,887.

● The NetSol Europe facilities, located in Horsham, United Kingdom, are leased until June 23, 2021 with an annual rent of approximately $110,022.

● VLS facilities, located in Chester, United Kingdom, are leased until July 2016 with an annual rent of approximately $33,401.

● NTA facilities are located in Alameda, California with a monthly rent of $8,381. The Alameda lease expired in November 2014, which has been renewed through January 2018.

● The NetSol Karachi office lease expires in November 2019 and currently is rented at the rate of approximately $7,714 per month.

Upon expiration of the leases, the Company does not anticipate any difficulty in obtaining renewals or alternative space. Rent expense amounted to $1,524,677 and $1,617,598 for the years ended June 30, 2015 and 2014, respectively.

The total annual lease commitment for the next five years is as follows:

FYE 6/30/16	$	971,890
FYE 6/30/17		751,488
FYE 6/30/18		394,212
FYE 6/30/19		202,593
FYE 6/30/20		148,593

(B) Litigation

As previously disclosed, on July 25, 2014, purported class action lawsuits were filed in the U.S. District Court for the Central District of California against the Company and three of its current or former officers and/or directors, which have been consolidated under the caption Rand-Heart of New York, Inc. v. NetSol Technologies, Inc., et al., Case No. 2:14-cv-05787 PA (SHx). Plaintiffs subsequently filed a consolidated complaint, which asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 premised on allegedly false and misleading statements regarding the Company’s next generation product, NFS Ascent, and whether it was truly available on a global basis when stated. After several successful motions by the Company, the Court granted the plaintiff a final opportunity to amend the complaint on a narrowed basis. The amended complaint was filed which contained a much narrowed class period from October 2013 to November 8, 2013, eliminated all but one of the individual defendants from the suit, and limited the scope of the alleged claims. The Company has filed an answer to this final amended complaint.

The Company continues to believe the amended allegations are meritless and intends to vigorously defend all claims asserted. The Company has engaged counsel and has liability insurance. Given the early stage of the litigation, however, at this time the Company is unable to form a professional judgment that an unfavorable outcome is either probable or remote, and it is not possible to assess whether or not the outcome of these proceedings will or will not have a material adverse effect on the Company.