Company: NTWK
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021835
Chunk: 60

Company: NETSOL TECHNOLOGIES INC
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 60
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 Pakistani subsidiary, NetSol PK has an approved facility for
export refinance from Askari Bank Limited amounting to Rupees 600 million ($2,124,495) and a running finance facility of Rupees 4.1 million
($14,344). NetSol PK has an approved facility for export refinance from Habib Metro Bank Limited amounting to Rupees 1.3 billion ($4,603,073)
and another export refinance facility amounting to Rupees 400 million ($1,416,331) from Bank Al-Habib. These facilities require NetSol
PK to maintain a long-term debt equity ratio of 60:40 and the current ratio of 1:1. NetSol PK also has an approved export refinance facility
of Rs. 380 million ($1,345,514) from Samba Bank Limited. During the loan tenure, these two facilities require NetSol PK to maintain at
a minimum a current ratio of 1:1, an interest coverage ratio of 4 times, a leverage ratio of 2 times, and a debt service coverage ratio
of 4 times.

As
of the date of this report, we are in compliance with the financial covenants associated with our borrowings. The maturity dates of the
borrowings of respective subsidiaries may accelerate if they do not comply with these covenants. In case of any change in control in
subsidiaries, they may have to repay their respective credit facilities.

CRITICAL
ACCOUNTING POLICIES

Our
condensed consolidated financial statements are prepared applying certain critical accounting policies. The SEC defines “critical
accounting policies” as those that require application of management’s most difficult, subjective, or complex judgments.
Critical accounting policies require numerous estimates and strategic or economic assumptions that may prove inaccurate or subject to
variations and may significantly affect our reported results and financial position for the period or in future periods. Changes in underlying
factors, assumptions, or estimates in any of these areas could have a material impact on our future financial condition and results of
operations. Our financial statements are prepared in accordance with U.S. GAAP, and they conform to general practices in our industry.
We apply critical accounting policies consistently from period to period and intend that any change in methodology occur in an appropriate
manner. There have been no significant changes to our accounting policies and estimates as discussed in our Annual Report on Form 10-K
for the fiscal year ended June 30, 2025