Company: NTWK
Filing Date: 2025-02-13
Form Type: 10-Q
Source: 0001493152-25-006348
Chunk: 13

Company: NETSOL TECHNOLOGIES INC
Filing Date: 2025-02-13
Form: 10-Q
Item: Part I, Item 1
Chunk 13
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 and restricted cash. The Company maintains balances at financial
institutions which, from time to time, may exceed Federal Deposit Insurance Corporation insured 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 ($68,493) in each bank and in the UK for GBP 85,000 ($106,250) in each bank. The Company maintains
three bank accounts in China and nine bank accounts in the UK. As of December 31, 2024, and June 30, 2024, the Company had uninsured
deposits related to cash deposits in accounts maintained within foreign entities of approximately $20,027,837 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