Freedom Holding Corp. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

STOCK BASED COMPENSATION

STOCK BASED COMPENSATION

3 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement, Noncash Expense [Abstract]

STOCK BASED COMPENSATIONDuring the nine months ended December 31, 2021, a total of 1,031,500 restricted shares were awarded to key employees. The compensation expense related to restricted stock grants was $4,561 during the three months ended December 31, 2021, and $31 during three months ended December 31, 2020. The compensation expense related to restricted stock grants was $11,283 during the nine months ended December 31, 2021, and $978 during the nine months ended December 31, 2020. As of December 31, 2021, there was $28,899 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 4.36 years.

The Company has determined the fair value of restricted shares awarded during the nine months ended December 31, 2021 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 nine months ended December 31, 2021:


	Shares	Weighted Average Fair Value
Outstanding, at March 31, 2021	15,000	$	775
Granted	1,031,500	39,465
Vested	—	—
Forfeited/cancelled/expired	—	—
Outstanding, at December 31, 2021	1,046,500	$	40,240

During the nine months ended December 31, 2021 and 2020, no stock options were awarded. Total compensation expense related to outstanding options was $0 for the three and nine months ended December 31, 2021, and $54 and $162, for the three and nine months ended December 31, 2020, respectively. During the nine months ended December 31, 2021, options to purchase a total of 60,000 shares were exercised.

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 the nine months ended December 31, 2021:


	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 December 31, 2021	—	$	—	0	$	—
Exercisable, at December 31, 2021	—	$	—	0	$	—