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Stock-Based Compensation | 6 Months Ended
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Dec. 31, 2023
Stock-Based Compensation [Abstract] |
Stock-Based Compensation | a Total charge Allocated to cost of goods sold, IT processing, servicing and support Allocated to selling, general and administration Six months ended December 31, 2023 Stock-based compensation charge $ 3,580 $ - $ 3,580 Reversal of stock compensation charge related to stock options forfeited (17) - (17) Total - six months ended December 31, 2023 $ 3,563 $ - $ 3,563 Six months ended December 31, 2022 Stock-based compensation charge $ 4,311 $ - $ 4,311 Total - six months ended December 31, 2022 $ 4,311 $ - $ 4,311 12. Stock-based compensation (continued) Stock-based compensation charge and unrecognized compensation cost (continued) The Company recorded a stock-based compensation charge, net during the six months ended December 31, 2023 and 2022, of $ 3.6 million and $ 4.3 million respectively, which comprised: 12. Stock-based compensation (continued) Stock option and restricted stock activity Options The following table presents stock options vested and expected to vest as of December 31, 2023: During the three months ended December 31, 2023 and 2022, respectively, 87,494 and 217,316 stock options became exercisable. During the six months ended December 31, 2023 and 2022, respectively, 87,494 and 292,316 stock options became exercisable. The Company issues new shares to satisfy stock option exercises. 12. Stock-based compensation (continued) The Company’s Amended and Restated 2022 Stock Incentive Plan (“2022 Plan”) and the vesting terms of certain stock-based awards granted are described in Note 17 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2023. Stock option and restricted stock activity (continued) Restricted stock The following table summarizes restricted stock activity for the six months ended December 31, 2023 and 2022: Number of shares Weighted average exercise price ($) Weighted average remaining contractual term (in years) Aggregate intrinsic value ($'000) Weighted average grant date fair value ($) Outstanding - June 30, 2023 673,274 4.37 5.14 239 1.67 Granted - December 2023 500,000 3.50 5.17 880 1.76 Exercised (7,385) 3.07 - 5 - Forfeited (186,846) 3.71 - - 1.28 Outstanding - December 31, 2023 979,043 4.07 5.50 48 1.80 Outstanding - June 30, 2022 926,225 4.14 6.60 1,249 1.60 Exercised (109,826) 3.04 - 126 - Forfeited - - - - - Outstanding - December 31, 2022 816,399 4.29 5.94 689 1.64 12. Stock-based compensation (continued) Stock option and restricted stock activity (continued) Restricted stock (continued) Grants In October 2023, the Company awarded 333,080 shares of restricted stock with time-based vesting conditions to approximately 150 employees, which are subject to the employees continued employment with the Company through the applicable vesting dates. The Company also awarded 225,000 shares of restricted stock to an executive officer in October 2023, which vest on June 30, 2025, except if the executive officer is terminated for cause, in which case the award will be forfeited. In October 2023, the Company awarded 310,916 shares of restricted stock to three of its executive officers which are subject to a time-based vesting condition and a market condition and vest in full only on the date, if any, that the following conditions are satisfied: (1) a compounded annual 10 % appreciation in the Company’s stock price off a base price of $ 4.00 over the measurement period commencing on September 30, 2023 through November 17, 2026, and (2) the recipient is employed by the Company on a full- time basis when the condition in (1) is met. If either of these conditions is not satisfied, then none of the shares of restricted stock will vest and they will be forfeited. The Company’s closing price on September 30, 2023, was $ 3.90 . The appreciation levels (times and price) and vesting percentages as of each period ended are as follows: ● Prior to the first anniversary of the grant date: 0 %; ● Fiscal 2025, the Company’s 30-day volume weighted-average stock price (“VWAP”) before November 17, 2024 is approximately 1.10 times higher (i.e. $ 4.40 or higher) than $ 4.00 : 33 %; ● Fiscal 2026, the Company’s VWAP before November 17, 2025 is 1.21 times higher (i.e. $ 4.84 or higher) than $ 4.00 : 67 %; ● Fiscal 2027, the Company’s VWAP before November 1, 2026 is 1.33 times higher (i.e. $ 5.32 ) than $ 4.00 : 100 %. The fair value of these shares of restricted stock was calculated using a Monte Carlo simulation. In scenarios where the shares do not vest, the final vested value at maturity is zero. In scenarios where vesting occurs, the final vested value on maturity is the share price on vesting date. In its calculation of the fair value of the restricted stock, the Company used an equally weighted volatility of 48.3 % for the closing price (of $ 4.37 ), a discounting based on U.S. dollar overnight indexed swap rates for the grant date, and no future dividends. The equally weighted volatility was extracted from the time series for closing prices as the standard deviation of log prices for the three years preceding the grant date. In July 2022 and December 2022, the Company awarded 32,582 and 430,399 shares of restricted stock, respectively, to employees and an executive officer which have time -based vesting conditions. In December 2022, the Company awarded 257,868 shares of restricted stock to executive officers which contained time and performance-based (market conditions related to share price performance) vesting conditions. The Company also agreed to match, on a one -for-one basis, (1) an employee’s purchase of up to $ 1.0 million worth of the Company’s shares of common stock in open market purchases, and in August 2022, the Company granted 179,498 shares of restricted stock to the employee, and (2) another employee’s purchase of up to 150,000 shares of the Company’s common stock, and in November 2022, the Company granted 150,000 shares of restricted stock to the employee. These shares of restricted stock contain time-based vesting conditions. The Company awarded 300,000 shares to an executive officer on December 31, 2022, which vested on the date of the award. The 257,868 shares of restricted stock awarded to executive officers are subject to a time-based vesting condition and a market condition and vest in full only on the date, if any, that the following conditions are satisfied: (1) a compounded annual 10 % appreciation in the Company’s stock price off a base price of $ 4.94 over the measurement period commencing on December 1, 2022 through December 1, 2025, and (2) the recipient is employed by the Company on a full-time basis when the condition in (1) is met. If either of these conditions is not satisfied, then none of the shares of restricted stock will vest and they will be forfeited. The Company’s closing price on December 1, 2022, was $ 4.08 . The appreciation levels (times and price) and vesting percentages as of each period ended are as follows: ● Prior to the first anniversary of the grant date: 0 %; ● Fiscal 2024, stock price as of December 1, 2023 is 1.1 times higher (i.e. $ 5.43 or higher) than $ 4.94 : 33 %; ● Fiscal 2025, stock price as of December 1, 2024 is 1.21 times higher (i.e. $ 5.97 or higher) than $ 4.94 : 67 %; ● Fiscal 2026, stock price as of December 1, 2025 is 1.331 times higher (i.e. $ 6.57 ) than $ 4.94 : 100 %. The fair value of these shares of restricted stock was calculated using a Monte Carlo simulation. In scenarios where the shares do not vest, the final vested value at maturity is zero. In scenarios where vesting occurs, the final vested value on maturity is the share price on vesting date. In its calculation of the fair value of the restricted stock, the Company used an equally weighted volatility of 50.1 % for the closing price (of $ 4.08 ), a discounting based on U.S. dollar overnight indexed swap rates for the grant date, and no future dividends. The equally weighted volatility was extracted from the time series for closing prices as the standard deviation of log prices for the three years preceding the grant date. 12. Stock-based compensation (continued) Stock option and restricted stock activity (continued) Restricted stock (continued) As fully described in Note 17 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2023, the Company granted a further 12,962 and 32,405 shares to an advisor during the three and six months ended December 31, 2022, respectively, which were ineligible for transfer until the earlier of December 31, 2022, or the occurrence of the agreed event. Vesting In July 2023, 78,800 shares of restricted stock granted to Mr. Meyer vested. In November and December 2023, an aggregate of 176,906 shares of restricted stock granted to employees vested. Certain employees elected for 50,975 shares to be withheld to satisfy the withholding tax liability on the vesting of their shares. These 50,975 shares have been included in the Company’s treasury shares. In July 2022, 78,801 shares of restricted stock granted to Mr. Meyer vested and he elected for 35,460 shares to be withheld to satisfy the withholding tax liability on the vesting of these shares. In November and December 2022, an aggregate of 66,893 shares of restricted stock granted to employees vested and they elected for 30,102 shares to be withheld to satisfy the withholding tax liability on the vesting of these shares. These 65,562 ( 35,460 plus 30,102 ) shares have been included in our treasury shares. Forfeitures During the three and six months ended December 31, 2023, respectively, employees forfeited 14,002 and 22,129 shares of restricted stock following their termination of employment with the Company. No shares of restricted stock were forfeited during the three and six months ended December 31, 2022. Stock-based compensation charge and unrecognized compensation cost The Company recorded a stock-based compensation charge, net during the three months ended December 31, 2023 and 2022, of $ 1.8 million and $ 2.8 million, respectively, which comprised: The stock-based compensation charges have been allocated to selling, general and administration based on the allocation of the cash compensation paid to the relevant employees. As of December 31, 2023, the total unrecognized compensation cost related to stock options was $ 0.9 million, which the Company expects to recognize over two years . As of December 31, 2023, the total unrecognized compensation cost related to restricted stock awards was $ 7.4 million, which the Company expects to recognize over two years . As of December 31, 2023, and June 30, 2023, respectively, the Company recorded a deferred tax asset of $ 0.9 million and $ 0.6 million, related to the stock-based compensation charge recognized related to employees of Lesaka. As of December 31, 2023, and June 30, 2023, respectively, the Company recorded a valuation allowance of $ 0.9 million and $ 0.6 million, related to the deferred tax asset because it does not believe that the stock-based compensation deduction would be utilized as it does not anticipate generating sufficient taxable income in the United States. The Company deducts the difference between the market value on the date of exercise by the option recipient and the exercise price from income subject to taxation in the United States. Total charge Allocated to cost of goods sold, IT processing, servicing and support Allocated to selling, general and administration Three months ended December 31, 2023 Stock-based compensation charge $ 1,812 $ - $ 1,812 Reversal of stock compensation charge related to stock options and restricted stock forfeited (8) - (8) Total - three months ended December 31, 2023 $ 1,804 $ - $ 1,804 Three months ended December 31, 2022 Stock-based compensation charge $ 2,849 $ - $ 2,849 Total - three months ended December 31, 2022 $ 2,849 $ - $ 2,849 Number of shares of restricted stock Weighted average grant date fair value ($’000) Non-vested – June 30, 2023 2,614,419 11,869 Total granted 868,996 3,394 Granted – October 2023 333,080 1,456 Granted – October 2023 310,916 955 Granted – October 2023 225,000 983 Total vested (255,706) 965 Vested – July 2023 (78,800) 302 Vested – November 2023 (109,833) 429 Vested – December 2023 (67,073) 234 Forfeitures (22,129) 91 Non-vested – December 31, 2023 3,205,580 13,880 Non-vested – June 30, 2022 2,385,267 11,879 Total Granted 1,050,347 4,230 Granted – July 2022 32,582 172 Granted – August 2022 179,498 995 Granted – November 2022 150,000 605 Granted – December 2022 430,399 1,862 Granted – December 2022 - performance awards 257,868 596 Total vested (145,694) 689 Vested – July 2022 (78,801) 410 Vested – November 2022 (59,833) 250 Vested – December 2022 (7,060) 29 Total granted and vested - December 2022 - - Granted - December 2022 300,000 1,365 Vested - December 2022 (300,000) 1,365 Non-vested – December 31, 2022 3,289,920 15,232 Number of shares Weighted average exercise price ($) Weighted average remaining contractual term (in years) Aggregate intrinsic value ($’000) Exercisable - December 31, 2023 420,719 4.61 5.77 48 These options have an exercise price range of $ 3.01 to $ 11.23 . The following table presents stock options that are exercisable as of December 31, 2023: Number of shares Weighted average exercise price ($) Weighted average remaining contractual term (in years) Aggregate intrinsic value ($’000) Vested and expecting to vest - December 31, 2023 979,043 4.07 5.50 48 12. Stock-based compensation The Company’s Amended and Restated 2022 Stock Incentive Plan (“20 22 Plan”) and the vesting terms of certain stock-based awards granted are described in Note 17 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2023. Stock option and restricted stock activity Options The following table summarizes stock option activity for the six months ended December 31, 2023 and 2022: The Company awarded 500,000 stock options to Ali Mazanderani, the Company’s Executive Chair, during the three and six months ended December 31, 2023. These options will vest on the first anniversary of the grant date, provided that Mr. Mazandarani continues to provide services as Executive Chair through the vesting date. These options will vest immediately if Mr. Mazanderani’s employment is terminated by the Company without cause on or before the first anniversary of the grant date. These 500,000 stock options may only be exercised during a period commencing from January 31, 2028 to January 31, 2029. No stock options were awarded during the three and six months ended December 31, 2022. During the three and six months ended December 31, 2023, the Company received $ 0.002 million and $ 0.02 million from the exercise of 592 and 7,385 stock options, respectively. During the three and six months ended December 31, 2022, the Company received $ 0.3 million and $ 0.3 million from the exercise of 107,826 and 109,826 stock options, respectively. Employees and a non- employee director forfeited an aggregate of 11,070 and 186,846 stock options during the three and six months ended December 31, 2023. No stock options were forfeited during the three and six months ended December 31, 2022. The fair value of each option is estimated on the date of grant using the Cox Ross Rubinstein binomial model that uses the assumptions noted in the following table. The estimated expected volatility is calculated based on the Company’s 750-day volatility. The estimated expected life of the option was determined based on the historical behavior of employees who were granted options with similar terms. The table below presents the range of assumptions used to value stock options granted during the six months ended December 31, 2023 and 2022: Six months ended December 31, 2023 2022 Expected volatility 56 % 0 % Expected dividends 0 % 0 % Expected life (in years) 5 0 Risk-free rate 2.1 % 0.0 %

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