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ACQUISITIONS | 9 Months Ended
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Dec. 31, 2020
ACQUISITIONS |
NOTE 19 - ACQUISITIONS | NOTE 19 – ACQUISITIONS The acquisitions below were accounted for under the acquisition method of accounting in accordance with ASU Topic 805, Business Combinations. Acquisition of Zerich On July 2, 2020, we completed the acquisition of Zerich following receipt of approval from the Russian Federal Antimonopoly Service. Zerich commenced business in 1995 and is one of the oldest securities brokerage firms in Russia. The Company acquired Zerich for $7,110. The total purchase price was allocated as follows:
|  | Purchase price allocation |
|  | As of July 2, 2020 |
Assets: |  |  |
Cash and cash equivalents |  | $ | 26,760 |
Restricted cash |  |  | 1,231 |
Trading securities |  |  | 2,828 |
Fixed assets |  |  | 8 |
Intangible assets |  |  | 3,733 |
Right-of-use asset |  |  | 454 |
Brokerage and other receivables |  |  | 376 |
Other assets |  |  | 94 |
Total assets |  | $ | 35,484 |
Liabilities: |  |  |  |
Customer liabilities |  | $ | 25,799 |
Securities repurchase agreement obligation |  |  | 1,600 |
Lease liabilities |  |  | 497 |
Trade and other payables |  |  | 104 |
Other liabilities |  |  | 419 |
Total liabilities |  | $ | 28,419 |
Net assets acquired |  | $ | 7,065 |
Goodwill |  |  | 45 |
Total purchase price |  | $ | 7,110 |
On December 27, 2020, Zerich was merged into Freedom RU and its separate legal existence terminated. The assets and liabilities of Zerich were transferred to Freedom RU at their perspective carrying amounts on the date of the merger was completed. Acquisition of Prime Executions On December 29, 2020, the Company completed the acquisition of Prime Executions. Prime Executions commenced business in 1985 and is an agency only execution broker dealer located on the floor of the NYSE. The Company acquired Prime Executions for $2,500. The total purchase price was allocated as follows:
|  | Purchase price allocation |
|  | As of December 29, 2020 |
Assets: |  |  |
Cash and cash equivalents |  | $ | 206 |
Brokerage and other receivables |  |  | 849 |
Intangible assets |  |  | 532 |
Other assets |  |  | 9 |
Total assets |  | $ | 1,596 |
Liabilities: |  |  |  |
Other liabilities |  | $ | 610 |
Total liability |  | $ | 610 |
Net Assets Acquired |  | $ | 986 |
Goodwill |  |  | 1,514 |
Total purchase price |  | $ | 2,500 |
Acquisition of Freedom Bank KZ On December 28, 2020, the Company closed the acquisition of Freedom Bank KZ, following receipt of approval from the Agency of the Republic of Kazakhstan for Regulation and Development of Financial Market. Freedom Bank KZ is a Kazakhstani based second tier Bank. For accounting purposes, on December 25, 2020, the Company acquired control over the entity by purchasing the common shares of Freedom Bank KZ. The total purchase price of this acquisition was $53,097 which was paid in cash. The purchase price included consideration paid for the outstanding common shares in the amount of $40,984, consideration paid for the outstanding preferred shares in the amount of $2,478 and consideration paid for outstanding subordinated loans in the amount of $9,635. The purchase price as of the control acquisition date was allocated as follows:
|  | Purchase price allocation As of December 25, 2020 |
Assets: |  |  |
Cash and cash equivalents |  | $ | 129,185 |
Trading securities |  |  | 50,684 |
Brokerage and other receivables |  |  | 2,601 |
Fixed assets |  |  | 10,987 |
Intangible assets |  |  | 2,769 |
Right-of-use asset |  |  | 338 |
Loans issued |  |  | 1,023 |
Other assets |  |  | 2,360 |
Total assets |  | $ | 199,947 |
Liabilities: |  |  |  |
Customer liabilities |  | $ | 117,195 |
Current income tax liability |  |  | 415 |
Trade payables |  |  | 104 |
Securities repurchase agreement obligation |  |  | 28,500 |
Lease liability |  |  | 338 |
Other liabilities |  |  | 827 |
Deferred income tax liabilities |  |  | 1,399 |
Total liability |  | $ | 148,778 |
Net Assets Acquired |  | $ | 51,169 |
Goodwill |  |  | 1,928 |
Consideration paid for common shares |  |  | 40,984 |
Consideration paid for preferred shares |  |  | 2,478 |
Consideration paid for subordinated loans |  |  | 9,635 |
Total purchase price |  | $ | 53,097 |
Unaudited Supplemental Pro forma Information The following unaudited supplemental pro forma information reflects our combined results of operations had the acquisition occurred at the beginning of fiscal 2019. The pro forma information reflects certain adjustments related to the acquisition. The pro forma information does not reflect any potential operating efficiencies or cost savings that may result from the acquisition. Accordingly, this pro forma information is for illustrative purposes and is not intended to represent the actual results of operations of the combined company that would have been achieved had the acquisition occurred at the beginning of fiscal 2019, nor is it intended to indicate future results of operations. The pro forma combined results of operations for the three-months ended and nine-months ended December 31, 2020, and 2019 are as follows:
|  | Unaudited supplemental pro forma information |
|  | Three months ended December 31, |  |  | Nine months ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
Net Interest Income |  | $ | 2,791 |  |  | $ | 4,768 |  |  | $ | 10,630 |  |  | $ | 13,825 |
Net Сommission Income |  |  | 54,424 |  |  |  | 15,865 |  |  |  | 123,211 |  |  |  | 58,255 |
Net Income |  |  | 45,709 |  |  |  | 5,042 |  |  |  | 95,609 |  |  |  | 24,762 |
WA number of shares (basic) |  |  | 58,395,606 |  |  |  | 58,158,864 |  |  |  | 58,370,521 |  |  |  | 58,116,825 |
WA number of shares (diluted) |  |  | 58,450,688 |  |  |  | 58,391,547 |  |  |  | 58,423,467 |  |  |  | 58,335,749 |
EPS (basic) |  | $ | 0.78 |  |  | $ | 0.09 |  |  | $ | 1.64 |  |  | $ | 0.43 |
EPS (diluted) |  | $ | 0.78 |  |  | $ | 0.09 |  |  | $ | 1.64 |  |  | $ | 0.42 |

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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