Stock-Based Compensation

12 Months Ended

Jun. 30, 2024

Stock-Based Compensation [Abstract]

Stock-Based Compensation

17. STOCK-BASED COMPENSATION

Amended and Restated Stock Incentive Plan

The Company’s Amended and Restated 2022 Stock Incentive Plan (“2022 Plan”) was most recently amended and restated on

November 16, 2022. On April 11, 2024, the Company’s Board amended the 2022 Plan to increase the number of shares available for

issuance by

3,000,000

. On June 3, 2024, the Company’s shareholders approved the amendment. 

No evergreen provisions are included in the 2022 Plan. This means that the maximum number of shares issuable under the 2022

Plan is fixed and cannot be increased without shareholder approval, the plan expires by its terms upon a specified date, and no new

stock options are awarded automatically upon exercise of an outstanding stock option. Shareholder approval is required for the

repricing of awards or the implementation of any award exchange program. 

The Plan permits Lesaka to grant to its employees, directors and consultants incentive stock options, nonqualified stock options,

stock appreciation rights, restricted stock, performance-based awards and other awards based on its common stock. The Remuneration

Committee of the Company’s Board of Directors (“Remuneration Committee”) administers the Plan.

The total number of shares of common stock issuable under the Plan is

16,552,580

. The maximum number of shares for which

stock options, stock appreciation rights (other than performance-based awards that are not options) may be granted during a calendar

year to any participant is

600,000

 shares. Shares covered by awards that expire, terminate or lapse without payment will again be

available for the grant of awards under the 2022 Plan, as well as shares that are delivered to us by the holder to pay withholding taxes

or as payment for the exercise price of an award, if permitted by the Remuneration Committee. The shares deliverable in connection

with awards granted under the 2022 Plan may consist, in whole or in part, of authorized but unissued shares or treasury shares. To

account for stock splits, stock dividends, reorganizations, recapitalizations, mergers, consolidations, spin-offs and other corporate

events, the 2022 Plan requires the Remuneration Committee to equitably adjust the number and kind of shares of common stock issued

or reserved pursuant to the plan or outstanding awards, the maximum number of shares issuable pursuant to awards, the exercise price

for awards, and other affected terms of awards to reflect such event. No awards may be granted under the Plan after September 7,

2032, but awards granted on or before such date may extend to later dates. 

17. STOCK-BASED COMPENSATION (continued)

Amended and Restated Stock Incentive Plan (continued)

Options

General Terms of Awards

Option awards are generally granted with an exercise price equal to the market price of the Company's stock at the date of grant,

with vesting conditioned upon the recipient’s continuous service through the applicable vesting date and expire

10

 years after the date

of grant. The options generally become exercisable in accordance with a vesting schedule ratably over a period of

three years

 from the

date of grant. The Company issues new shares to satisfy stock option award exercises but may also use treasury shares.

Valuation Assumptions

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 table below. The estimated expected volatility is generally 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.

No

 stock options were granted during the year ended June 30, 2023. The table below presents the range of

assumptions used to value options granted during the years ended June 30, 2024 and 2022:

2024

2022

Expected volatility 

55

%

50

%

Expected dividends 

0

%

0

%

Expected life (in years) 

5.0

3.0

Risk-free rate 

2.11

%

1.61

%

Restricted Stock

General Terms of Awards

Shares of restricted stock are considered to be participating non-vested equity shares (specifically contingently returnable shares)

for the purposes of calculating earnings per share (refer to Note 19) because, as discussed in more detail below, the recipient is obligated

to transfer any unvested restricted stock back to the Company for no consideration and these shares of restricted stock are eligible to

receive non-forfeitable dividend equivalents at the same rate as common stock. Restricted stock generally vests ratably over a

three

year

 period, with vesting conditioned upon the recipient’s continuous service through the applicable vesting date and under certain

circumstances, the achievement of certain performance targets, as described below. 

Recipients are entitled to all rights of a shareholder of the Company except as otherwise provided in the restricted stock

agreements. These rights include the right to vote and receive dividends and/or other distributions, however, any or all dividends or

other distributions paid related to restricted stock during the period of such restrictions shall be accumulated (without interest) or

reinvested in additional shares of common stock, which in either case shall be subject to the same restrictions as the underlying award

or such other restrictions as the Remuneration Committee may determine. The restricted stock agreements generally prohibit transfer

of any nonvested and forfeitable restricted stock. If a recipient ceases to be a member of the Board of Directors or an employee for

any reason, all shares of restricted stock that are not then vested and nonforfeitable will be immediately forfeited and transferred to

the Company for no consideration , except as otherwise agreed between the parties. Forfeited shares of restricted stock are available

for future issuances by the Remuneration Committee.

The Company issues new shares to satisfy restricted stock awards.

Valuation Assumptions

The fair value of restricted stock is generally based on the closing price of the Company’s stock quoted on The Nasdaq Global

Select Market on the date of grant.

17. STOCK-BASED COMPENSATION (continued)

Amended and Restated Stock Incentive Plan (continued)

Restricted Stock (continued)

Market Conditions - Restricted Stock Granted in September 2018 – all forfeited

In September 2018, the Remuneration Committee approved an award of

148,000

 shares of restricted stock to executive officers.

The

148,000

 shares of restricted stock awarded to executive officers in September 2018 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) the price of the Company’s

common stock must equal or exceed certain agreed VWAP levels (as described below) during a measurement period commencing on

the date that it files its Annual Report on Form 10-K for the fiscal year ended June 30, 2021 and ending on December 31, 2021 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 $

23.00

 price target represented an

approximate

55

% increase, compounded annually, in the price of the Company’s common stock on Nasdaq over the $

6.20

 closing

price on September 7, 2018. The VWAP levels and vesting percentages related to such levels are as follows:

●

Below $

15.00

 (threshold)—

0

%

●

At or above $

15.00

 and below $

19.00

—

33

%

●

At or above $

19.00

 and below $

23.00

—

66

%

●

At or above $

23.00

—

100

% 

The fair value of these shares of restricted stock was calculated using a Monte Carlo simulation of a stochastic volatility process.

The choice of a stochastic volatility process as an extension to the standard Black Scholes process was driven by both observations of

larger than expected moves in the daily time series for the Company’s VWAP price, but also the observation of the strike structure of

volatility (i.e. skew and smile) for out-of-the money calls and out-of-the money puts versus at-the-money options for both the

Company’s stock and NASDAQ futures.

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 average volatility of

37.4

% for the VWAP price, a discounting based on USD overnight indexed swap rates for the grant date, and

no future dividends. The average volatility was extracted from the time series for VWAP prices as the standard deviation of log prices

for the

three years

 preceding the grant date. The mean reversion of volatility and the volatility of volatility parameters of the stochastic

volatility process were extracted by regressing log differences against log levels of volatility from the time series for at-the-money

options

30 day

 volatility quotes, which were available from January 2, 2018 onwards.

During the year ended June 30, 2022, an executive officer forfeited

30,000

 shares of restricted stock that were subject to the

market conditions described above because the performance conditions were not met. During the year ended June 30, 2021, executive

officers forfeited

88,000

 shares of restricted stock that were subject to the market conditions described above following their separation

from the Company.

Performance Conditions - Restricted Stock Granted in February 2020 – all forfeited

The

454,400

 shares of restricted stock awarded to executive officers in February 2020 were subject to time-based and

performance-based vesting conditions and vest in full only on the date, if any, that the following conditions are satisfied: (1) the

achievement of an agreed return on average net equity per year during a measurement period commencing from July 1, 2021, through

June 30, 2023, and (2) the recipient is employed by the Company on a full-time basis when the condition in (1) is met. Net equity is

calculated as total equity attributable to the Company’s shareholders plus redeemable common stock, in conformity with GAAP. The

net equity as of June 30, 2021, was set as the base year for the measurement period. The average net equity is calculated as the simple

average between the opening net equity and closing net equity during each fiscal year within the measurement period. The targeted

return per year within the measurement period is derived from GAAP net income attributable to the Company per fiscal year.

The performance-based awards vest based on the achievement of the following targeted return on average net equity during the

measurement period, of:

●

8

% per year:

50

% vest;

●

14

% per year:

100

% vest.

17. STOCK-BASED COMPENSATION (continued)

Amended and Restated Stock Incentive Plan (continued)

Restricted Stock (continued)

Performance Conditions - Restricted Stock Granted in February 2020 – all forfeited (continued)

No

 shares of restricted stock vested at a return on average net equity of less than

8

%. Calculation of the award based on the

returns between

8

% and

14

% will be interpolated on a linear basis. The Company’s Remuneration Committee was permitted to use its

discretion to adjust any component of the calculation of the award on a fact-by-fact basis, for instance, as the result of an acquisition.

During the year ended June 30, 2023, an executive officer forfeited

80,000

 shares of restricted stock that were subject to the

performance conditions because the performance conditions were not achieved. During the year ended June 30, 2021, executive

officers forfeited

374,400

 shares of restricted stock that were subject to the performance conditions described following their separation

from the Company.

Market Conditions - Restricted Stock Granted in May 2021 and July 2021 – all forfeited

In May 2021 and July 2021, respectively, the Remuneration Committee approved an award of

158,734

 and

58,652

 shares of

restricted stock to executive officers. These shares of restricted stock awarded to executive officers were subject to a time-based vesting

condition and a market condition and would have vested in full only on the date, if any, that the following conditions were satisfied:

(1) a compounded annual

20

% appreciation in the Company’s stock price over the measurement period commencing on June 30, 2021

through June 30, 2024, and (2) the recipient was employed by the Company on a full-time basis when the condition in (1)was met. If

either of these conditions was not satisfied, then none of the shares of restricted stock would vest and they would be forfeited. The

stock price targets were not met and all of the restricted stock granted were forfeited on June 30, 2024. The Company’s closing stock

price on Nasdaq on June 30, 2021, was $

4.71

.

The appreciation levels (times and price) and vesting percentages as of each period ended related to such levels were as follows:

●

Prior to the first anniversary of the grant date:

0

%

●

Fiscal 2022, stock price as of June 30, 2022 is

1.2

 times higher (i.e. $

5.65

 or higher) than $

4.71

:

33

%;

●

Fiscal 2023, stock price as of June 30, 2023 is

1.44

 times higher (i.e. $

6.78

 or higher) than $

4.71

:

67

%;

●

Fiscal 2024, stock price as of June 30, 2024 is

1.728

 times higher (i.e. $

8.14

) than $

4.71

:

100

%.

The fair value of these shares of restricted stock was calculated using a Monte Carlo simulation of a stochastic volatility process.

The choice of a stochastic volatility process as an extension to the standard Black Scholes process was driven by both observations of

larger than expected moves in the daily time series for the Company’s closing price, but also the observation of the strike structure of

volatility (i.e. skew and smile) for out-of-the money calls and out-of-the money puts versus at-the-money options for both the

Company’s stock and NASDAQ futures.

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 average volatility of

61.6

% for the closing price (for each of the May 2021 and July 2021 awards), a discounting based on USD

overnight indexed swap rates for the grant date, and no future dividends. The average 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 mean reversion of volatility and

the volatility of volatility parameters of the stochastic volatility process were extracted by regressing log differences against log levels

of volatility from the time series for at-the-money options

30 day

 volatility quotes, which were available for the three years preceding

May 5, 2021 (for the May 2021 awards) and July 1, 2021 (for the July 2021 award).

Performance Conditions - Restricted Stock Granted in July 2021

In July 2021, the Remuneration Committee approved an award of

58,652

 shares of restricted stock to an executive officer. These

shares of restricted stock were subject to a time-based vesting condition and a performance condition and would vest in full only on

the date, if any, that the following conditions were satisfied: (1) achievement of the Company’s

three year

 financial services plan

during the specific measurement period from June 30, 2021, to June 30, 2024, and (2) the recipient was employed by the Company on

a full-time basis when the condition in (1) is met. If either of these conditions were not satisfied, then none of the shares of restricted

stock would vest and they would be forfeited. The fair value of these shares of restricted stock was calculated based on the market

price on date of award. The Company’s Remuneration Committee determined that the vesting conditions were achieved and the shares

of restricted stock vested in full on June 30, 2024.

17. STOCK-BASED COMPENSATION (continued)

Amended and Restated Stock Incentive Plan (continued)

Restricted Stock (continued)

Market Conditions - Restricted Stock Granted in December 2022

In December 2022, the Remuneration Committee approved an award of

257,868

 shares of restricted stock to executive officers.

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.

Market Conditions - Restricted Stock Granted in October 2023

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.

17. STOCK-BASED COMPENSATION (continued)

Amended and Restated Stock Incentive Plan (continued)

Restricted Stock Units

The Remuneration Committee may approve the grant of other stock-based awards. In April 2022, the Company granted

1,250,486

shares of restricted stock to employees of Connect pursuant to the terms of the acquisition. The award included an equalization

mechanism to maintain a return of $

7.50

 per share of restricted stock upon vesting through the issue of restricted stock units. The

conversion of restricted stock units to shares cannot exceed

50

% under the terms of the award and therefore no more than

625,243

 (or

1,250,486

 divided by two) would be issued upon vesting. During the years ended June 30, 2024 and 2023, respectively,

388,908

 and

412,487

 shares of restricted stock vested, and

194,454

 and

206,239

 restricted stock units vested, the maximum amount possible, and

were converted to shares of common stock. Employees elected for

166,087

 and

72,081

 shares to be withheld from

166,167

 and

164,687

restricted stock units which vested, and which were converted to shares, in order to satisfy the withholding tax liability on the vesting

of these and other shares. The

166,087

 and

72,081

 shares have been included in the Company’s treasury shares.

Stock Appreciation Rights 

The Remuneration Committee may also grant stock appreciation rights, either singly or in tandem with underlying stock options.

Stock appreciation rights entitle the holder upon exercise to receive an amount in any combination of cash or shares of common stock

(as determined by the Remuneration Committee) equal in value to the excess of the fair market value of the shares covered by the right

over the grant price.

No

 stock appreciation rights have been granted.

Stock option and restricted stock activity 

Options

The following table summarizes stock option activity for the years ended June 30, 2024, 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 - July 1, 2021

1,294,832

3.93

7.68

1,624

1.45

Granted – August 2020

137,620

4.87

10.00

235

1.71

Exercised

(249,521)

3.05

-

470

-

Forfeited

(256,706)

4.53

-

1.69

Outstanding - June 30, 2022

926,225

4.14

6.60

1,249

1.60

Exercised

(158,659)

3.04

-

200

-

Forfeited

(94,292)

3.99

-

1.81

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

Granted – June 2024

1,000,000

6.00

4.60

1,690

1.69

Granted – June 2024

1,000,000

8.00

4.60

1,300

1.30

Granted – June 2024

1,000,000

11.00

4.60

920

0.92

Granted – June 2024

1,000,000

14.00

4.60

685

0.69

Exercised

(54,287)

2.25

-

71

-

Forfeited

(200,739)

3.96

-

1.42

Outstanding - June 30, 2024

4,918,248

8.70

4.51

889

1.77

These options have an exercise price range of $

3.01

 to $

14.00

.

The Company awarded

4,500,000

 and

137,620

 stock options to employees during the years ended June 30, 2024 and 2022,

respectively.

No

 stock options were awarded during the year ended June 30, 2023. 

17. STOCK-BASED COMPENSATION (continued)

Stock option and restricted stock activity (continued)

Options (continued)

The

4,500,000

 stock options awarded during the year ended June 30, 2024, were awarded to Ali Mazanderani, the Company’s

Executive Chairman, and

500,000

 of these stock options were granted pursuant to the 2022 Plan and

4,000,000

 were granted pursuant

to shareholder approval which was obtained on June 3, 2024. The

500,000

 options will vest on the first anniversary of the grant date

of December 3, 2023, provided that Mr. Mazandarani continues to provide services as Executive Chair through the vesting date. The

4,000,000

 options will vest on January 31, 2026, subject to Mr. Mazanderani’s ongoing service through to this date. The

500,000

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. The

4,500,000

 stock options may only be exercised during a period commencing from January 31, 2028

to January 31, 2029.

On August 5, 2020, the Company granted one of its then non-employee directors, and now the Company’s Executive Chairman,

Mr. Ali Mazanderani, in his capacity as a consultant to the Company,

150,000

 stock options with an exercise price of $

3.50

. These

stock options were subject to the non-employee director’s continuous service through the applicable vesting date, and half of the

options vested on each of the first and second anniversaries of the grant date. The stock options expired unexercised on August 5,

2023.

During the years ended June 30, 2024, 2023 and 2022,

116,063

,

327,965

 and

376,348

 stock options became exercisable,

respectively. During the year ended June 30, 2023, an employee delivered

23,934

 shares of the Company’s common stock to exercise

37,500

 stock options with an aggregate strike price of $

0.1

 million. These

23,934

 shares of common stock have been included in the

Company’s treasury stock. The employee also elected to deliver

6,105

 shares of the Company’s common stock to settle income taxes

arising upon exercise of the stock options, and these shares have also been included in the Company’s treasury stock. During the years

ended June 30, 2024, 2023 and 2022, the Company received approximately $

0.2

 million, $

0.5

 million and $

0.8

 million from the

exercise of

54,287

,

158,659

 and

249,521

 stock options, respectively. 

During the years ended June 30, 2024, 2023 and 2022, employees forfeited

200,739

,

94,292

, and

256,706

 stock options,

respectively. The stock options forfeited had strike prices ranging from $

3.01

 to $

11.23

.

Options (continued)

The following table presents stock options vested and expected to vest as of June 30, 2024:

Number of

shares

Weighted

average

exercise

price

($)

Weighted

average

remaining

contractual

term

(in years)

Aggregate

intrinsic

value

($’000)

Vested and expecting to vest - June 30, 2024

4,918,248

8.70

4.51

889

These options have an exercise price range of $

3.01

 to $

14.00

, and include the

4,000,000

 options awarded in June 2024.

The following table presents stock options that are exercisable as of June 30, 2024:

Number of

shares

Weighted

average

exercise

price

($)

Weighted

average

remaining

contractual

term

(in years)

Aggregate

intrinsic

value

($’000)

Exercisable - June 30, 2024

391,342

4.71

5.39

299

17. STOCK-BASED COMPENSATION (continued)

Stock option and restricted stock activity (continued)

Restricted stock

The following table summarizes restricted stock activity for the years ended June 30, 2023 and 2022:

Number of shares of

restricted stock

Weighted average grant

date fair value

($’000)

Non-vested – June 30, 2021

384,560

1,123

Total granted

2,168,110

11,097

Granted – July 2021

234,608

963

Granted – August 2021

44,986

192

Granted – November and December 2021

326,158

1,766

Granted – December 2021

50,300

269

Granted – February 2022

29,920

146

Granted – March 2022

207,859

1,097

Granted – April 2022

1,250,486

6,540

Granted – May 2022

23,793

124

Total granted and vested - November and December 2021

-

-

Granted - November and December 2021

71,647

393

Vested - November and December 2021

(71,647)

393

Total vested

(61,861)

306

Total forfeitures

(105,542)

542

Forfeitures - employee terminations

(75,542)

382

Forfeitures – September 2018 awards with market conditions 

(30,000)

160

Non-vested – June 30, 2022

2,385,267

11,879

Total granted

1,085,981

4,411

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 - January 2023

11,806

57

Granted - June 2023

23,828

124

Granted - December 2022 - performance awards

257,868

596

Total vested

(742,464)

3,171

Vested – July 2022

(78,801)

410

Vested – November 2022

(59,833)

250

Vested – December 2022

(7,060)

29

Vested – February 2023

(19,179)

83

Vested – March 2023

(69,286)

326

Vested – April 2023

(418,502)

1,721

Vested – May 2023

(61,861)

217

Vested – June 2023

(27,942)

135

Total forfeitures

(114,365)

554

Forfeitures - employee terminations

(34,365)

138

Forfeitures – February 2020 award with market condition

(80,000)

416

Non-vested – June 30, 2023

2,614,419

11,869

17. STOCK-BASED COMPENSATION (continued)

Stock option and restricted stock activity (continued)

Restricted stock (continued)

The following table summarizes restricted stock activity for the year ended June 30, 2024:

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

1,002,241

3,942

Granted – October 2023

333,080

1,456

Granted – October 2023, with performance conditions

310,916

955

Granted – October 2023

225,000

983

Granted – January 2024

56,330

197

Granted – February 2024

9,195

31

Granted - June 2024

67,720

320

Total vested

(1,232,251)

5,208

Vested – July 2023

(78,800)

302

Vested – November 2023

(109,833)

429

Vested – December 2023

(67,073)

234

Vested – February 2024

(14,811)

53

Vested – March 2024

(69,286)

256

Vested – April 2024

(394,932)

1,630

Vested – May 2024

(88,617)

391

Vested – June 2024

(350,247)

1,639

Vested – June 2024, with performance conditions

(58,652)

274

Total forfeitures

(299,463)

1,315

Forfeitures - employee terminations

(82,077)

298

Forfeitures – May and July 2021 awards with market condition

(217,386)

1,017

Non-vested – June 30, 2024

2,084,946

8,736

17. STOCK-BASED COMPENSATION (continued)

Stock option and restricted stock activity (continued)

Restricted stock

Awards granted

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. In

October 2023, the Company awarded

310,916

 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 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 January 2024, February 2024 and June 2024, the Company awarded

56,330

;

9,195

and

67,720

 shares of restricted stock with time-based vesting conditions to employees.

In July 2022, December 2022, January 2023 and June 2023, the Company awarded

32,582

,

430,399

,

11,806

 and

23,828

 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.

17. STOCK-BASED COMPENSATION (continued)

Stock option and restricted stock activity (continued)

Restricted stock (continued)

Awards granted (continued)

On June 30, 2021, the Company entered into employment agreements with Mr. Chris G.B. Meyer, under which Mr. Meyer was

appointed Group Chief Executive Officer of the Company effective July 1, 2021. Mr. Meyer was awarded

117,304

 shares of restricted

stock on July 1, 2021, which were subject to time-based vesting and vest in full on June 30, 2024, subject to Mr. Meyer’s continued

service to the Company through June 30, 2024. In addition, under the terms of Mr. Meyer’s engagement, the Company’s Remuneration

Committee also awarded Mr. Meyer

117,304

 shares of restricted stock which include performance 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. On March 1, 2022, the Company

awarded

207,859

 shares of restricted stock to executive officers and vesting of these awards is subject to the executive’s continuous

service through the applicable vesting date, one third of which vests on each of the first, second and third anniversaries of the grant

date.

On April 14, 2022, the Company granted

1,250,486

 shares of restricted stock to employees of Connect pursuant to the Sale

Agreement. The award includes an equalization mechanism to maintain a return of $

7.50

 per share of restricted stock upon vesting

through the issue of restricted stock units. The conversion of restricted stock units to shares cannot exceed

50

% under the terms of the

award.

Upon joining the Company, each of Messrs. Meyer and Lincoln C. Mali, were entitled to receive an award of shares of restricted

stock which were subject to them purchasing an agreed value of shares (“matching awards”) in the market during a prescribed period

of time. However, these executives were unable to purchase shares in the market during that period due to a Company-imposed insider-

trading restriction placed on them. On November 15, 2021, the Company amended the terms of these awards in order to put the

executives into an economically equivalent position, as follows:

(i) assume that the executives would have purchased their agreed allocation within their first

30

 days post commencement of

employment had they not been embargoed;

(ii) require the executives to fulfill their agreed allocations within a short period following release of the Company’s Quarterly

Report on Form 10-Q for the three months ended September 30, 2021;

(iii) to the extent that the price per share actually paid is greater than the

30

-day volume-weighted average price (“VWAP”) in

their respective first months of employment, award the executives a top-up (“top up awards”) which amounts to the after-tax difference

between (a) number of shares purchased at the

30

-day VWAP in their respective first months of employment and (b) number of shares

purchased at the actual share price paid. The top-up will be settled as follows: (a)

55

% in shares of the Company’s common stock and

(b)

45

%, at the election of the executive, as either shares of the Company’s common stock or cash. The top up awards were not subject

to any vesting conditions and vested immediately; and

(iv) adjust the initial matching awards to the aggregate number of shares acquired in terms of (ii) and (iii). The matching awards

vest ratably over a period of

three years

 commencing on the first anniversary of the grant of the matching awards.

The executives acquired shares during November and December 2021, and the Company granted the executives

326,158

matching awards and

71,647

 top up awards. In May 2022, the Company amended the terms of these awards to change the vesting

dates from when the shares were acquired in November and December 2021 to the anniversary of the executive’s date of joining the

Company. The shares continue to vest ratably over

three years

 on the applicable vesting date.

Effective January 1, 2022, the Company agreed to grant an advisor shares in lieu of cash for services provided to the Company

during a contract term that will expire on December 31, 2022. The contract could have been terminated early if certain agreed events

occur, and the contract was mutually terminated in November 2022 as no further services were required. The advisor agreed to receive

6,481

 shares of the Company’s common stock per month as payment for services rendered and is not entitled to receive additional

shares if the contract is terminated early due to the occurrence of the agreed events. The

6,481

 shares granted per month was calculated

using an agreed monthly fee of $

35,000

 divided by the Company’s closing market price on January 3, 2022, on the Nasdaq Global

Select Market. The Company and the advisor have agreed that the Company will issue the shares to the advisor, in arrears, on a

quarterly basis and that the shares may not be transferred until the earlier of December 31, 2022, or the occurrence of the agreed event.

During each of the years ended June 30, 2023 and 2022, respectively, the Company recorded a stock-based compensation charge of

$

0.2

 million and included the issuance of

32,405

 and

38,886

 shares of common stock in its issued and outstanding share count.

17. STOCK-BASED COMPENSATION (continued)

Stock option and restricted stock activity (continued)

Restricted stock (continued)

Awards vested

During the years ended June 30, 2024, 2023 and 2022, respectively,

1,002,241

,

742,464

 and

133,508

 shares of restricted stock

with time-based and performance-based vesting conditions vested. The June 30, 2024, shares of stock vesting includes

58,652

 shares

with a performance-based condition related to the achievement of the 2021 to 2024 financial services plan. The fair value of restricted

stock which vested during the years ended June 30, 2024, 2023 and 2022, was $

5.2

 million, $

3.2

 million and $

0.4

 million, respectively.

In May 2024,

55,598

 shares of restricted stock granted to Mr. Mali vested and he elected for

25,020

 shares to be withheld to

satisfy the withholding tax liability on the vesting of these shares. In addition, in November and December 2023 and February, April,

May and June 2024, an aggregate of

556,889

 shares of restricted stock granted to employees vested and they elected for

128,415

 shares

to be withheld to satisfy the withholding tax liability on the vesting of these 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 May 2023,

55,599

 shares of restricted stock granted to Mr. Mali vested and he elected for

25,020

 shares to be withheld

to satisfy the withholding tax liability on the vesting of these shares. In addition, in November and December 2022 and February,

April, May and June 2023, an aggregate of

434,279

 shares of restricted stock granted to employees vested and they elected for

190,394

shares to be withheld to satisfy the withholding tax liability on the vesting of these shares. These

153,435

 (

25,020

 plus

128,415

) and

250,874

 (

35,460

 plus

25,020

 plus

190,394

) shares have been included in our treasury shares for the year ended June 30, 2024 and

2023, respectively.

The

133,508

 shares of restricted stock that vested during the year ended June 30, 2022, includes the

71,647

 top up awards referred

to above and

29,919

 shares of restricted stock that vested following the change in vesting date to the anniversary of the executive’s

date of joining the Company.

Awards forfeited

During the year ended June 30, 2024,

217,386

 shares of restricted stock were forfeited by executive officers (including former

executive officers) as the market condition (related to share price performance) were not achieved. During the year ended June 30,

2024, employees forfeited

82,077

 shares of restricted stock following their termination of employment with the Company.

During the year ended June 30, 2023,

80,000

 shares of restricted stock were forfeited by an executive officer as the performance

condition (related to net asset value targets) was not achieved. During the year ended June 30, 2023, employees forfeited

34,365

 shares

of restricted stock following their termination of employment with the Company.

During the year ended June 30, 2022,

30,000

 shares of restricted stock were forfeited by an executive officer as the market

condition (related to share price performance) was not achieved and the

75,542

 shares of restricted stock were forfeited by employees

following termination of their employment. 

17. STOCK-BASED COMPENSATION (continued)

Stock-based compensation charge and unrecognized compensation cost

The Company has recorded a net stock compensation charge of $

7.9

 million, $

7.3

 million and $

3.0

 million for the years ended

June 30, 2024, 2023 and 2022, respectively, which comprised:

Total charge

Allocated to IT

processing,

servicing and

support

Allocated to

selling, general

and

administration

Year ended June 30, 2024

Stock-based compensation charge 

$

8,045

$

-

$

8,045

Reversal of stock compensation charge related to stock

options and restricted stock forfeited

(134)

-

(134)

Total - year ended June 30, 2024

$

7,911

$

-

$

7,911

Year ended June 30, 2023

Stock-based compensation charge 

$

7,673

$

-

$

7,673

Reversal of stock compensation charge related to stock

options and restricted stock forfeited

(364)

-

(364)

Total - year ended June 30, 2023

$

7,309

$

-

$

7,309

Year ended June 30, 2022

Stock-based compensation charge 

$

3,082

$

-

$

3,082

Reversal of stock compensation charge related to stock

options and restricted stock forfeited

(120)

-

(120)

Total - year ended June 30, 2022

$

2,962

$

-

$

2,962

The stock-based compensation charges and reversal have been allocated to selling, general and administration based on the

allocation of the cash compensation paid to the relevant employees.

As of June 30, 2024, the total unrecognized compensation cost related to stock options was approximately $

5.0

 million, which

the Company expects to recognize over approximately

two years

. As of June 30, 2024, the total unrecognized compensation cost

related to restricted stock awards was approximately $

4.2

 million, which the Company expects to recognize over approximately

three

years

.

Income tax consequences

The Company recorded a deferred tax asset of approximately $

1.3

 million and $

0.6

 million, as of June 30, 2024 and June 30,

2023, respectively. As of June 30, 2024 and 2023, the Company recorded a valuation allowance of approximately $

1.3

 million and

$

0.6

 million respectively, 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 date of exercise by the option recipient and the exercise price from income subject to taxation

in the United States.