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Stock-Based Compensation | 6 Months Ended
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Dec. 31, 2024
Stock-Based Compensation [Abstract] |
Stock-Based Compensation | 13. 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, 2024. Stock option and restricted stock activity Options The following table summarizes stock option activity for the six months ended December 31, 2024 and 2023: 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, 2024 4,918,248 8.70 4.51 889 1.77 Granted - December 2024 350,000 6.00 - 433 1.24 Granted - December 2024 250,000 8.00 - 177 0.71 Exercised (17,014) 3.02 - 38 - Forfeited (13,333) 11.23 - - 8.83 Outstanding - December 31, 2024 5,487,901 8.48 4.04 1,418 1.76 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 The Company awarded 600,000 stock options to an executive officer during the three and six months ended December 31, 2024. The Company awarded a further 400,000 to the same executive officer in January 2025 with strike prices ranging from $ 8 to $ 14 . The 1,000,000 stock options will vest on December 31, 2026, and vesting is subject to the executive officers continued employment with the Company through to the vesting date. The 1,000,000 stock options expire on January 31, 2029. The Company awarded 500,000 stock options to Ali Mazanderani, the Company’s Executive Chairman, during the three and six months ended December 31, 2023. These options vested in December 2024, but may only be exercised during a period commencing from January 31, 2028 to January 31, 2029. During each of the three and six months ended December 31, 2024, the Company received $ 0.05 million from the exercise of 17,014 stock options, respectively. 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. Employees forfeited an aggregate of 13,333 stock options during each of the three and six months ended December 31, 2024. 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. 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 730 - 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, 2024 and 2023: Six months ended December 31, 2024 2023 Expected volatility 42 % 56 % Expected dividends 0 % 0 % Expected life (in years) 2 5 Risk-free rate 4.3 % 2.1 % 13. 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, 2024. Stock option and restricted stock activity (continued) Options (continued) The following table presents stock options vested and expected to vest as of December 31, 2024: 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, 2024 5,487,901 8.48 4.04 1,418 These options have an exercise price range of $ 3.01 to $ 14.00 . The following table presents stock options that are exercisable as of December 31, 2024: Number of shares Weighted average exercise price ($) Weighted average remaining contractual term (in years) Aggregate intrinsic value ($’000) Exercisable - December 31, 2024 360,995 4.56 5.03 428 No stock options became exercisable during each of the three and six months ended December 31, 2024 and 2023. The Company issues new shares to satisfy stock option exercises. 13. Stock-based compensation (continued) Stock option and restricted stock activity (continued) Restricted stock The following table summarizes restricted stock activity for the six months ended December 31, 2024 and 2023: Number of shares of restricted stock Weighted average grant date fair value ($’000) Non-vested – June 30, 2024 2,084,946 8,736 Total granted 1,331,110 4,850 Granted – August 2024 32,800 154 Granted – October 2024 100,000 490 Granted – November 2024, with performance conditions 1,198,310 4,206 Total vested (473,432) 2,469 Vested – July 2024 (78,801) 394 Vested – November 2024 (213,687) 1,134 Vested – November 2024, with performance conditions (103,638) 524 Vested – December 2024 (77,306) 417 Forfeitures (40,321) 216 Non-vested – December 31, 2024 2,902,303 11,348 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, with performance awards 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 Grants In August 2024 and October 2024, respectively, the Company granted 32,800 and 100,000 shares of restricted stock to employees which have time -based vesting conditions and which are subject to the employees continued employment with the Company through the applicable vesting dates. In November 2024, the Company awarded 1,198,310 shares of restricted stock to a group comprising employees and three executive officers and 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 15 % appreciation in the Company’s stock price off a base price of $ 5.00 over the measurement period commencing on September 30, 2024 through September 30, 2027, and (2) the recipient is employed by the Company on a full-time basis through to September 30, 2027. 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, 2024, was $ 5.00 . The appreciation levels (times and price) and annual target percentages to earn the awards as of each period ended are as follows: ● Prior to the first anniversary of the grant date: 0 %; ● Fiscal 2026, the Company’s 30-day volume weighted-average stock price (“VWAP”) before September 30, 2025 is approximately 1.15 times higher (i.e. $ 5.75 or higher) than $ 5.00 : 33 %; ● Fiscal 2027, the Company’s VWAP before September 30, 2026 is 1.32 times higher (i.e. $ 6.61 or higher) than $ 5.00 : 67 %; ● Fiscal 2028, the Company’s VWAP before November 1, 2027 is 1.52 times higher (i.e. $ 7.60 ) than $ 5.00 : 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 47.7 % for the closing price (of $ 5.50 ), 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. 13. Stock-based compensation (continued) Stock option and restricted stock activity (continued) Restricted stock (continued) Grants (continued) 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. The Company has agreed to grant an advisor 5,500 shares per month in lieu of cash for services provided to the Company. The Company and the advisor have agreed that the Company will issue the shares to the advisor, in arrears, on a quarterly basis. During the three and six months ended December 31, 2024, the Company recorded a stock-based compensation charge of $ 0.2 million and included the issuance of 33,000 shares of common stock in its issued and outstanding share count. Vesting In July 2024, 78,801 shares of restricted stock granted to Mr. Meyer, our former Group CEO, vested. In November and December 2024, an aggregate of 290,993 shares of restricted stock granted to employees vested. Certain employees elected for 132,147 shares to be withheld to satisfy the withholding tax liability on the vesting of their shares. These 132,147 shares have been included in the Company’s treasury shares. In November 2024, 103,638 shares of restricted stock with performance conditions (share price targets) vested following the achievement of the agreed performance condition. 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. Forfeitures During the three and six months ended December 31, 2024, respectively, employees forfeited 37,221 and 40,321 shares of restricted stock following their termination of employment with the Company or the failure to achieved agreed performance conditions ( 29,121 shares were forfeited following the failure to achieved agreed share performance targets). 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. 13. Stock-based compensation (continued) Stock-based compensation charge and unrecognized compensation cost The Company recorded a stock-based compensation charge, net during the three months ended December 31, 2024 and 2023, of $ 2.6 million and $ 1.8 million, respectively, which comprised: Total charge Allocated to cost of goods sold, IT processing, servicing and support Allocated to selling, general and administration Three months ended December 31, 2024 Stock-based compensation charge $ 2,655 $ - $ 2,655 Reversal of stock compensation charge related to stock options and restricted stock forfeited (11) - (11) Total - three months ended December 31, 2024 $ 2,644 $ - $ 2,644 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 The Company recorded a stock-based compensation charge, net during the six months ended December 31, 2024 and 2023, of $ 5.0 million and $ 3.6 million respectively, which comprised: 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, 2024 Stock-based compensation charge $ 5,032 $ - $ 5,032 Reversal of stock compensation charge related to stock options and restricted stock forfeited (11) - (11) Total - six months ended December 31, 2024 $ 5,021 $ - $ 5,021 Six months ended December 31, 2023 Stock-based compensation charge $ 3,580 $ - $ 3,580 Reversal of stock compensation charge related to stock options and restricted stock forfeited (17) - (17) Total - six months ended December 31, 2023 $ 3,563 $ - $ 3,563 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, 2024, the total unrecognized compensation cost related to stock options was $ 3.5 million, which the Company expects to recognize over two years . As of December 31, 2024, the total unrecognized compensation cost related to restricted stock awards was $ 6.3 million, which the Company expects to recognize over two years . During the three months ended December 31, 2024 and 2023, the Company recorded a deferred tax benefit of $ 0.5 million and $ 0.3 million, respectively, related to the stock-based compensation charge recognized related to employees of Lesaka. During the six months ended December 31, 2024 and 2023, the Company recorded a deferred tax benefit of $ 0.8 million and $ 0.3 million, respectively, related to the stock-based compensation charge recognized related to employees of Lesaka. During these periods the Company recorded a valuation allowance related to the full deferred tax benefit recognized 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.

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