Freedom Holding Corp. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

STOCK BASED COMPENSATION

STOCK BASED COMPENSATION

12 Months Ended

Mar. 31, 2022

Share-Based Payment Arrangement, Noncash Expense [Abstract]

During the year ended ended March 31, 2022, a total of 1,039,000 restricted shares were awarded to key employees. The compensation expense related to restricted stock grants was $15,745 during the the year ended March 31, 2022, and $1,147 during the year ended March 31, 2021. As of March 31, 2022, there was $24,731 of total unrecognized compensation cost related to non-vested shares of common stock granted. The cost is expected to be recognized over a weighted average period of 4.07 years.

The Company has determined the fair value of restricted shares awarded during the twelve months ended March 31, 2022, using the Monte Carlo valuation model based on the following key assumptions:


Term (years)	5
Volatility	41.5	%
Risk-free rate	0.06	%

The table below summarizes the activity for the Company's restricted stock outstanding during the year ended March 31, 2022:


	Shares	Weighted Average Fair Value
Outstanding, March 31, 2021	15,000	$	775
Granted	1,039,000	39,760
Vested	(4,500)	(233)
Forfeited/cancelled/expired	—	—
Outstanding, at March 31, 2022	1,049,500	$	40,303

During the year ended March 31, 2022, no stock options were awarded. Total compensation expense related to outstanding options was $0 for the year ended March 31, 2022, and $112 for the year ended March 31, 2021.

The Company has determined the fair value of such stock options using the Black-Scholes option valuation model based on the following key assumptions:


Term (years)	3
Volatility	165.33	%
Risk-free rate	1.66	%

Stock-based compensation expense for the cost of the awards granted is based on the grant-date fair value. For stock option awards, the fair value is estimated at the date of grant using the Black-Scholes option-pricing model. This model requires the input of highly subjective assumptions, changes to which can materially affect the fair value estimate. Additionally, there may be other factors that would otherwise have a significant effect on the value of employee stock options granted but are not considered by the model. Accordingly, while management believes that the Black-Scholes option-pricing model provides a reasonable estimate of fair value, the model does not necessarily provide the best single measure of fair value for the Company's employee stock options.

The following is a summary of stock option activity for year ended March 31, 2022:


	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (In Years)	Aggregate Intrinsic Value
Outstanding, March 31, 2021	60,000	$	1.98	6.52	$	3,083,000
Granted	—	—		—	—
Exercised	(60,000)	1.98		6.52	3,742,000
Forfeited/cancelled/expired	—	—		—	—
Outstanding, at March 31, 2022	—	$	—	—	$	—
Exercisable, at March 31, 2022	—	$	—	—	$	—

During the years ended March 31, 2022 and 2021, the Company recorded expenses for share based payments for consulting services in the amount of $0 and $517, respectively.