Stock-Based Compensation

6 Months Ended

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

%