Company: NTWK
Filing Date: 2025-02-13
Form Type: 10-Q
Source: 0001493152-25-006348
Chunk: 109

Company: NETSOL TECHNOLOGIES INC
Filing Date: 2025-02-13
Form: 10-Q
Item: Part I, Item 2
Chunk 109
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 has an approved facility for export refinance from another Habib Metro Bank Limited amounting to Rupees 1.3 billion ($4,664,180).
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 ($1,363,375) 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, 2024. 

RECENT ACCOUNTING PRONOUNCEMENTS

For information
with respect to recent accounting pronouncements and the impact of these pronouncements on our consolidated financial statements, see
Note 2 of Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

 Item 3. Quantitative and Qualitative Disclosures about Market Risks.

None.

Item 4. Controls and Procedures

Evaluation of Disclosure
Controls