Company: NTWK
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001641172-25-010127
Chunk: 16

Company: NETSOL TECHNOLOGIES INC
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 1
Chunk 16
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 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 ($68,871) in each bank and in the UK for GBP 85,000 ($110,390) in each bank. The Company
maintains three bank accounts in China and nine bank accounts in the UK. As of March 31, 2025, and June 30, 2024, the Company had uninsured
deposits related to cash deposits in accounts maintained within foreign entities of approximately $17,848,732 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.

Fair
Value of Financial Instruments

The
Company applies the provisions of Accounting Standards Codification (“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, accounts receivable, accounts payable and short-term debt, the carrying amounts approximate fair value due to their relatively
short maturities. The carrying amounts of the long-term debt approximate their fair values based on current interest rates for instruments
with similar characteristics.

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.