NETSOL TECHNOLOGIES INC 10-K

ITEM 1A - RISK FACTORS Pakistan The political and economic environment in Pakistan may negatively affect the business. The political unsteadiness delays governmental functions. If such unsteadiness continues in the long term, it could result in difficulty in necessary interactions with the government as it relates to government contracts and personnel access to necessary government functions. We anticipate that the political and governmental environment will remain unsteady until new elections are held. The devaluation of the Pakistan Rupee in comparison to the US Dollars has an impact on the value of our contracts paid in Rupees. This coupled with the higher-than-average inflation rate in Pakistan, may continue to negatively impact our largest subsidiary and accordingly the Company’s financials as a whole. China Political tensions between the US and China have resulted in US companies exiting China and moving their supply chain requirements to other countries. Other multinational companies have indicated concerns about transactions with US owned Chinese companies because of this continued tension. Should these tensions result in disparate treatment of US owned subsidiaries, it could negatively impact our operations in China, our ability to gain new business and the ability to transfer funds out of China. General Economic Conditions General economic conditions in our geographic markets; inflation, geopolitical tensions, including trade wars, tariffs and/or sanctions in geographic areas; Global pandemics, including COVID-19; and global conflicts or disasters that impact the global economy or one or more sectors of the global economy have negative impacts on our ability to acquire new business to and deliver on new business when contracted. Continued interest rate increases by the U.S. Federal Reserve Board in 2023 restrict buying power for consumers and companies which may negatively affect our customers profits and ability to acquire new or additional services. Inflation and higher interest rates globally have greatly increased the cost of doing business, including salaries and benefits worldwide, affecting our profitability. If inflation does not stabilize, our profitability can be impacted. . The decline by over 20% in 2022 of the U.S. markets including the NASDAQ index and the Russell 2000 index, and any continued decline in our stock price may limit access to capital markets. 13 Working from the office might not return to pre-pandemic levels which may affect employee collaboration potentially lessening efficiency. Should we fail to navigate this challenge, it could negatively affect productivity. ITEM 1B – UNRESOLVED STAFF COMMENTS None ITEM 1C – Cybersecurity Not applicable