Stock-Based Compensation

3 Months Ended

Sep. 30, 2022

Stock-Based Compensation [Abstract]

Stock-Based Compensation

12.Stock-based compensation

The Company’s Amended and Restated 2015 Stock Incentive 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, 2022.

Stock option and restricted stock activity

Options

The following table summarizes stock option activity for the three months ended September 30, 2022 and 2021:

			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, 2022			926,225	4.14	6.60	1,249	1.60
	Exercised		(2,000)	3.07	-	1	-
		Outstanding - September 30, 2022	924,225	4.14	6.36	226	1.60
Outstanding - June 30, 2021			1,294,832	3.93	7.68	1,624	1.45
	Forfeited		(85,000)	3.48			1.34
		Outstanding - September 30, 2021	1,209,832	3.96	7.63	1,445	1.46

12.Stock-based compensation (continued)

Stock option and restricted stock activity (continued)

Options (continued)

The following table presents stock options vested and expected to vest as of September 30, 2022:

	Number of shares	Weighted average exercise price ($)	Weighted average remaining contractual term (in years)	Aggregate intrinsic value ($’000)
Vested and expecting to vest - September 30, 2022	924,225	4.14	6.36	226

These options have an exercise price range of $3.01 to $11.23.

The following table presents stock options that are exercisable as of September 30, 2022:

	Number of shares	Weighted average exercise price ($)	Weighted average remaining contractual term (in years)	Aggregate intrinsic value ($’000)
Exercisable - September 30, 2022	378,674	5.01	5.19	35

No stock options became exercisable during the three months ended September 30, 2022. During the three months ended September 30, 2021, 75,000 stock options became exercisable. The Company issues new shares to satisfy stock option exercises.

Restricted stock

The following table summarizes restricted stock activity for the three months ended September 30, 2022 and 2021:

				Number of shares of restricted stock	Weighted average grant date fair value ($’000)
Non-vested – June 30, 2022				2,385,267	11,879
	Total granted			212,080	1,167
		Granted – July 2022		32,582	172
		Granted – August 2022		179,498	995
	Total vested			(78,801)	410
		Vested – July 2022		(78,801)	410
		Non-vested – September 30, 2022		2,518,546	12,568
Non-vested – June 30, 2021				384,560	1,123
	Total Granted			279,594	1,155
		Granted – July 2021		234,608	963
		Granted – August 2021		44,986	192
			Non-vested – September 30, 2021	664,154	2,610

12.Stock-based compensation (continued)

Stock option and restricted stock activity (continued)

Restricted stock (continued)

Grants

In July 2022, the Company granted 32,582 shares of restricted stock to employees which have time -based vesting conditions. The Company agreed to match, on a one-for-one basis, 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 . These shares of restricted stock contain time-based vesting conditions.

On July 1, 2021, the Company granted its Group Chief Executive Officer, 117,304 shares of restricted stock, which are subject to time-based vesting conditions and vest in full on June 30, 2024, subject to Mr. Meyer’s continued service to the Company through June 30, 2024. Mr. Meyer was also awarded 117,304 shares of restricted stock which include performance-based conditions and which only vest on June 30, 2024 if the performance conditions are met and Mr. Meyer remains employed with the Company through June 30, 2024. Vesting of half of these awards, or 58,652 shares of restricted stock, is subject to the Company achieving its three-year financial services plan during the specific measurement period from June 30, 2021, to June 30, 2024, and the other half is subject to share price growth targets, and only vest if the Company’s share price is $8.14 or higher on June 30, 2024. In August 2021, the Company awarded 44,986 shares of restricted stock to an employee which contained time and performance-based (market conditions related to share price performance) vesting conditions.

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, 2022, the Company granted a further 19,443 shares to an advisor during the three months ended September 30, 2022, which may not be transferred until the earlier of December 31, 2022, or the occurrence of the agreed event.

Vesting

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. These 35,460 shares have been included in our treasury shares.

The Company recorded a stock-based compensation charge, net during the three months ended September 30, 2022 and 2021, of $1.5 million and $0.3 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 September 30, 2022
	Stock-based compensation charge		$	1,462	$	-	$	1,462
		Total - three months ended September 30, 2022	$	1,462	$	-	$	1,462
Three months ended September 30, 2021
	Stock-based compensation charge		$	344	$	-	$	344
	Reversal of stock compensation charge related to stock options and restricted stock forfeited			(35)		-		(35)
		Total - three months ended September 30, 2021	$	309	$	-	$	309

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.

12.Stock-based compensation (continued)

As of September 30, 2022, the total unrecognized compensation cost related to stock options was approximately $0.3 million, which the Company expects to recognize over approximately two years. As of September 30, 2022, the total unrecognized compensation cost related to restricted stock awards was approximately $9.9 million, which the Company expects to recognize over approximately three years.

As of September 30, 2022, and June 30, 2022, respectively, the Company recorded a deferred tax asset of approximately $0.4 million and $0.3 million, related to the stock-based compensation charge recognized related to employees of Lesaka. As of September 30, 2022, and June 30, 2022, respectively, the Company recorded a valuation allowance of approximately $0.4 million and $0.3 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.