Company: NTWK
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001493152-25-015950
Chunk: 499

Company: NETSOL TECHNOLOGIES INC
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1C
Chunk 499
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●The
                                            China-Pakistan Economic Corridor (CPEC) investment, initiated by China, has exceeded $65
                                            billion from the originally planned $46 billion, in Pakistan’s energy and infrastructure
                                            sectors. In June 2024, China authorized a new $2.3 billion loan at a discounted rate to Pakistan
                                            as a short-term loan.

●The
                                            overall size of the mobility market in Europe and the United States is projected to increase
                                            over $425 billion combined, by 2035 or a compound CAGR of 5% from 2022. (Deloitte Global
                                            Automotive Mobility Market Simulation Tool)

●The
                                            global automotive finance market accounted for $378,957 billion in 2024 and is expected to
                                            increase to $798,657 billion by 2035 at a CAGR of 7.7% according to Global Growth Insights.

Negative
trends:

●The
                                            conflict in Gaza has disrupted the entire Middle East region since October 7, 2023. The conflict
                                            has expanded to neighboring nations such as Syria, Lebanon, and Iran. The unrest and turmoil
                                            in the region are viewed unfavorably by the regional business community.

●General
                                            economic conditions in our geographic markets; inflation, economic uncertainty, and increased
                                            operational costs are pressuring margins and leading companies to prioritize critical investment
                                            and control spending.

●SaaS
                                            cybersecurity faces unprecedented challenges as companies increasingly migrate critical functions
                                            to cloud platforms. Proliferation of AI tools within these platforms has created additional
                                            attack vectors that require specialized security approaches beyond legacy protections. (JOSYS.COM)

●The
                                            imposition of tariffs on China and on other US trading partners may affect the price of consumer
                                            goods including vehicles amongst others, negatively affecting the profitability of many of
                                            our customers.

14

CRITICAL
ACCOUNTING POLICIES

Our
financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States
(“U.S. GAAP”). Preparing financial statements requires management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application
of accounting policies. Critical accounting policies for us include revenue recognition and multiple element arrangements, intangible
assets, software development costs, and goodwill.

REVENUE
RECOGNITION

The
Company determines revenue recognition through the following steps: