NetSol Technologies Inc. Reports Operating Results (10-K)
Netsol Technologies Inc. has a market cap of $36 million; its shares were traded at around $0.99 with a P/E ratio of 49.5 and P/S ratio of 1.3. NTWK is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:The aggregate market value of the Common Stock held by non-affiliates of the registrant was approximately $24,096,750 based upon the closing price of the stock as reported on NASDAQ Capital Market ($0.73 per share) on June 30, 2010, the last business day of the registrant s fiscal year. As of September 6, 2010, there were 40,205,421 shares of common stock outstanding and no shares of its Preferred Stock issued and outstanding.
The company s NFS™ revenue streams occur through the following three main areas: product licensing, implementation related services, and maintenance and support related services. License fees can vary generally between $500,000 to up to $1,000,000 per license per module. There are various attributes which determine the level of complexity, a few of which are: number of contracts; size of the portfolio; business strategy of the customer; number of business users; and branch network of the customer. The Company recognizes revenue from license contracts without major customization when a non-cancelable, non-contingent license agreement has been signed, delivery of the software has occurred, the fee is fixed or determinable, and collectability is probable. However, revenue from sale of licenses with major customization, modification, and development is recognized on a percent of completion basis. Implementation related services, including gap analysis, user acceptance testing (UAT) and data migration (where required) are recognized in accordance with the percentage of completion method. Maintenance and support related services are then provided on a continued basis. Revenue from software services includes fixed price contracts and is recognized in accordance with the percentage of completion method using the output measure of “Unit of Work Completed.” The annual maintenance fee, which usually is an agreed upon percentage of overall monetary value of the implementation, then becomes an ongoing revenue stream realized on yearly basis.
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