Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jun. 30, 2018 | Aug. 10, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | Freedom Holding Corp. | |
Entity Central Index Key | 924,805 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --03-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 58,033,212 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,019 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Jun. 30, 2018 | Mar. 31, 2018 | |
ASSETS | |||
Cash and cash equivalents | $ 45,057 | ||
Restricted cash | 24,802 | ||
Trading securities | 184,350 | ||
Available-for-sale securities, at fair value | 2 | ||
Brokerage and other receivables, net | 42,245 | ||
Loans issued | 16,757 | ||
Deferred tax assets | 812 | ||
Fixed assets, net | 2,471 | ||
Intangible assets, net | 4,807 | ||
Goodwill | 3,103 | ||
Other assets, net | 4,823 | ||
TOTAL ASSETS | 329,229 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Securities sold, not yet purchased - at fair value | 1,756 | ||
Loans received | 13,977 | ||
Debt securities issued | 19,969 | ||
Customer liabilities | 40,402 | ||
Trade payables | 15,742 | ||
Deferred distribution payments | 8,534 | ||
Securities repurchase agreement obligation | 114,572 | ||
Other liabilities | 2,012 | ||
TOTAL LIABILITIES | 216,964 | ||
Commitments and Contingencies (Note 20) | |||
STOCKHOLDERS' EQUITY | |||
Preferred stock - $0.001 par value; 20,000,000 shares authorized, no shares issued or outstanding | 0 | ||
Common stock - $0.001 par value; 500,000,000 shares authorized; 58,033,212 and 58,033,212 shares issued and outstanding as of June 30, 2018 and March 31, 2018, respectively | 58 | ||
Additional paid in capital | 99,003 | ||
Retained earnings | 27,437 | ||
Accumulated other comprehensive loss | (14,233) | ||
TOTAL STOCKHOLDERS' EQUITY | 112,265 | ||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 329,229 | ||
(Recast) | |||
ASSETS | |||
Cash and cash equivalents | [1] | $ 65,731 | |
Restricted cash | [1] | 21,962 | |
Trading securities | [1] | 212,595 | |
Available-for-sale securities, at fair value | [1] | 240 | |
Brokerage and other receivables, net | [1] | 24,854 | |
Loans issued | [1] | 8,754 | |
Deferred tax assets | [1] | 772 | |
Fixed assets, net | [1] | 2,571 | |
Intangible assets, net | [1] | 5,531 | |
Goodwill | [1] | 3,288 | |
Other assets, net | [1] | 4,573 | |
TOTAL ASSETS | [1] | 350,871 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Securities sold, not yet purchased - at fair value | [1] | 1,135 | |
Loans received | [1] | 7,143 | |
Debt securities issued | [1] | 11,222 | |
Customer liabilities | [1] | 30,672 | |
Trade payables | [1] | 9,013 | |
Deferred distribution payments | [1] | 8,534 | |
Securities repurchase agreement obligation | [1] | 154,775 | |
Other liabilities | [1] | 1,376 | |
TOTAL LIABILITIES | [1] | 223,870 | |
Commitments and Contingencies (Note 20) | [1] | ||
STOCKHOLDERS' EQUITY | |||
Preferred stock - $0.001 par value; 20,000,000 shares authorized, no shares issued or outstanding | [1] | 0 | |
Common stock - $0.001 par value; 500,000,000 shares authorized; 58,033,212 and 58,033,212 shares issued and outstanding as of June 30, 2018 and March 31, 2018, respectively | [1] | 58 | |
Additional paid in capital | [1] | 100,180 | |
Retained earnings | [1] | 34,320 | |
Accumulated other comprehensive loss | [1] | (7,557) | |
TOTAL STOCKHOLDERS' EQUITY | [1] | 127,001 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | [1] | $ 350,871 | |
[1] | See Notes 2 and 3 for information regarding recast amounts and basis of financial statement presentation. |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Jun. 30, 2018 | Mar. 31, 2018 | |
SHAREHOLDERS' EQUITY | |||
Preferred stock, par value | $ 0.001 | ||
Preferred stock, authorized shares | 20,000,000 | ||
Preferred stock, issued shares | 0 | ||
Preferred stock, outstanding shares | 0 | ||
Common stock, par value | $ 0.001 | ||
Common stock, authorized shares | 500,000,000 | ||
Common stock, issued shares | 58,033,212 | ||
Common stock, outstanding shares | 58,033,212 | ||
(Recast) | |||
SHAREHOLDERS' EQUITY | |||
Preferred stock, par value | [1] | $ 0.001 | |
Preferred stock, authorized shares | [1] | 20,000,000 | |
Preferred stock, issued shares | 0 | ||
Preferred stock, outstanding shares | 0 | ||
Common stock, par value | [1] | $ 0.001 | |
Common stock, authorized shares | [1] | 500,000,000 | |
Common stock, issued shares | [1] | 58,033,212 | |
Common stock, outstanding shares | [1] | 58,033,212 | |
[1] | See Notes 2 and 3 for information regarding recast amounts and basis of financial statement presentation. |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND STATEMENTS OF OTHER COMPREHENSIVE INCOME/(LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | ||
Revenue: | |||
Fee and commission income | $ 5,428 | ||
Net gain/(loss) on trading securities | (3,288) | ||
Interest income | 7,372 | ||
Net gain on derivatives | 0 | ||
Net gain/(loss) on foreign exchange operations | (2,110) | ||
TOTAL REVENUE, NET | 7,402 | ||
Expense: | |||
Interest expense | 4,614 | ||
Fee and commission expense | 764 | ||
Operating expense | 9,111 | ||
Other expense/(income), net | (54) | ||
TOTAL EXPENSE | 14,435 | ||
NET INCOME/(LOSS) BEFORE INCOME TAX | (7,033) | ||
Income tax benefit | 150 | ||
NET INCOME/(LOSS) | (6,883) | ||
OTHER COMPREHENSIVE INCOME/(LOSS) | |||
Change in unrealized gain on investments available-for-sale, net of tax effect | 0 | ||
Reclassification adjustment relating to available-for-sale investments disposed of in the period, net of tax effect | 22 | ||
Foreign currency translation adjustments, net of tax | (6,698) | ||
COMPREHENSIVE INCOME/(LOSS) | $ (13,559) | ||
BASIC NET INCOME/(LOSS) PER COMMON SHARE | $ (0.12) | ||
DILUTED NET INCOME/(LOSS) PER COMMON SHARE | $ (0.12) | ||
Weighted average number of shares (basic) | 58,033,212 | ||
Weighted average number of shares (diluted) | 58,191,542 | ||
(Recast) | |||
Revenue: | |||
Fee and commission income | [1] | $ 3,057 | |
Net gain/(loss) on trading securities | [1] | 7,131 | |
Interest income | [1] | 2,647 | |
Net gain on derivatives | [1] | 490 | |
Net gain/(loss) on foreign exchange operations | [1] | 659 | |
TOTAL REVENUE, NET | [1] | 13,984 | |
Expense: | |||
Interest expense | [1] | 2,030 | |
Fee and commission expense | [1] | 289 | |
Operating expense | [1] | 3,663 | |
Other expense/(income), net | [1] | 45 | |
TOTAL EXPENSE | [1] | 6,027 | |
NET INCOME/(LOSS) BEFORE INCOME TAX | [1] | 7,957 | |
Income tax benefit | [1] | 33 | |
NET INCOME/(LOSS) | [1] | 7,990 | |
OTHER COMPREHENSIVE INCOME/(LOSS) | |||
Change in unrealized gain on investments available-for-sale, net of tax effect | [1] | (59) | |
Reclassification adjustment relating to available-for-sale investments disposed of in the period, net of tax effect | [1] | 0 | |
Foreign currency translation adjustments, net of tax | [1] | (2,169) | |
COMPREHENSIVE INCOME/(LOSS) | [1] | $ 5,762 | |
BASIC NET INCOME/(LOSS) PER COMMON SHARE | [1] | $ 0.71 | |
DILUTED NET INCOME/(LOSS) PER COMMON SHARE | [1] | $ 0.71 | |
Weighted average number of shares (basic) | [1] | 11,306,084 | |
Weighted average number of shares (diluted) | [1] | 11,306,084 | |
[1] | See Notes 2 and 3 for information regarding recast amounts and basis of financial statement presentation. |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | ||
Cash Flows From Operating Activities | |||
Net income/(loss) | $ (6,883) | ||
Adjustments to reconcile net income/(loss) from operating activities: | |||
Depreciation and amortization | 396 | ||
Loss on sale of fixed assets | 33 | ||
Change in deferred taxes | (109) | ||
Stock compensation expense | 838 | ||
Unrealized loss on trading securities | 7,856 | ||
Net gain on derivative | 0 | ||
Net change in accrued interest | 13 | ||
Changes in operating assets and liabilities: | |||
Trading securities | 6,089 | ||
Brokerage and other receivables | (15,710) | ||
Loans issued | (8,441) | ||
Other assets | (568) | ||
Customer liabilities | 9,131 | ||
Current income tax liability | 0 | ||
Trade payables | 7,251 | ||
Securities repurchase agreement obligation | (30,436) | ||
Securities sold, not yet purchased | 718 | ||
Other liabilities | 806 | ||
Net cash flows (used in)/from operating activities | (29,017) | ||
Cash Flows From Investing Activities | |||
Purchase of fixed assets | (477) | ||
Proceeds from sale of fixed assets | 276 | ||
Proceeds from sale of intangible assets | 0 | ||
Proceeds from sale/(purchase) of available-for-sale securities, at fair value | 238 | ||
Consideration paid for Asyl | (2,240) | ||
Cash received at acquisition | 0 | ||
Net cash flows used in investing activities | (2,203) | ||
Cash Flows From Financing Activities | |||
Proceeds from issuance of debt securities | 9,708 | ||
Repurchase of debt securities | 0 | ||
Proceeds from loans received | 7,336 | ||
Capital contributions | 225 | ||
Net cash flows from financing activities | 17,269 | ||
Effect of changes in foreign exchange rates on cash and cash equivalents | (3,884) | ||
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (17,834) | ||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD | 87,693 | ||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | 69,859 | ||
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 4,327 | ||
Income tax paid | 237 | ||
Asyl | |||
Non-cash investing and financing activities: | |||
Assets received from acquisition | 0 | ||
Liabilities assumed from acquisition | 0 | ||
Nettrader | |||
Non-cash investing and financing activities: | |||
Assets received from acquisition | 0 | ||
Liabilities assumed from acquisition | $ 0 | ||
(Recast) | |||
Cash Flows From Operating Activities | |||
Net income/(loss) | [1] | $ 7,990 | |
Adjustments to reconcile net income/(loss) from operating activities: | |||
Depreciation and amortization | [1] | 271 | |
Loss on sale of fixed assets | [1] | 0 | |
Change in deferred taxes | [1] | 173 | |
Stock compensation expense | [1] | 0 | |
Unrealized loss on trading securities | [1] | 1,563 | |
Net gain on derivative | [1] | (490) | |
Net change in accrued interest | [1] | 155 | |
Changes in operating assets and liabilities: | |||
Trading securities | [1] | (15,079) | |
Brokerage and other receivables | [1] | (18,937) | |
Loans issued | [1] | 226 | |
Other assets | [1] | (769) | |
Customer liabilities | [1] | 8,724 | |
Current income tax liability | [1] | (137) | |
Trade payables | [1] | 6,943 | |
Securities repurchase agreement obligation | 17,925 | ||
Securities sold, not yet purchased | [1] | 0 | |
Other liabilities | [1] | 237 | |
Net cash flows (used in)/from operating activities | [1] | 8,796 | |
Cash Flows From Investing Activities | |||
Purchase of fixed assets | [1] | (457) | |
Proceeds from sale of fixed assets | [1] | 21 | |
Proceeds from sale of intangible assets | [1] | 224 | |
Proceeds from sale/(purchase) of available-for-sale securities, at fair value | [1] | (3,069) | |
Consideration paid for Asyl | 0 | ||
Cash received at acquisition | 1,368 | ||
Net cash flows used in investing activities | [1] | (1,913) | |
Cash Flows From Financing Activities | |||
Proceeds from issuance of debt securities | [1] | 4,256 | |
Repurchase of debt securities | [1] | (775) | |
Proceeds from loans received | [1] | 0 | |
Capital contributions | [1] | 8,164 | |
Net cash flows from financing activities | [1] | 11,645 | |
Effect of changes in foreign exchange rates on cash and cash equivalents | [1] | (1,753) | |
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | [1] | 16,774 | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD | [1] | 35,365 | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | [1] | 52,139 | |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | [1] | 1,844 | |
Income tax paid | [1] | 159 | |
(Recast) | Asyl | |||
Non-cash investing and financing activities: | |||
Assets received from acquisition | [1] | 4,666 | |
Liabilities assumed from acquisition | [1] | 82 | |
(Recast) | Nettrader | |||
Non-cash investing and financing activities: | |||
Assets received from acquisition | [1] | 11,158 | |
Liabilities assumed from acquisition | [1] | $ 4,121 | |
[1] | See Notes 2 and 3 for information regarding recast amounts and basis of financial statement presentation. |
Description of Business
Description of Business | 3 Months Ended |
Jun. 30, 2018 | |
Description Of Business | |
Description of Business | Overview Freedom Holding Corp. (the “Company” or “FRHC”) is a corporation organized in the United States under the laws of the State of Nevada that owns several operating subsidiaries that engage in a broad range of activities in the securities industry, including retail securities brokerage, research, investment counseling, securities trading, market making, corporate investment banking and underwriting services in Central Asia. The Company is headquartered in Almaty, Kazakhstan, with supporting administrative office locations in Russia, Cyprus and the United States. The Company owns directly, or through subsidiaries, the following companies: LLC Investment Company Freedom Finance, a Moscow, Russia-based securities broker-dealer (“Freedom RU”); FFIN Bank, a Moscow, Russia-based bank (“FFIN Bank”); JSC Freedom Finance, an Almaty, Kazakhstan-based securities broker-dealer (“Freedom KZ”); FFINEU Investments Limited, a Limassol, Cyprus-based broker-dealer (“Freedom CY”); LLC Freedom Finance Ukraine, a Kiev, Ukraine-based broker-dealer (“Freedom UA”); LLC Freedom Finance Uzbekistan, a Tashkent, Uzbekistan-based broker-dealer (“Freedom UZ”); and FFIN Securities, Inc., a Nevada corporation (“FFIN”). The Company’s subsidiaries are professional participants on the Kazakhstan Stock Exchange (KASE), Moscow Exchange (MOEX), Saint-Petersburg Exchange (SPB), the Ukrainian Exchange, and the Republican Stock Exchange of Tashkent (UZSE). Freedom CY serves to provide the Company’s clients with operations support and access to the investment opportunities, relative stability, and integrity of the U.S. and European securities markets, which under the regulatory regimes of many jurisdictions where the Company operates do not currently allow investors direct access to international securities markets. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month period ended June 30, 2018, are not necessarily indicative of the results that may be expected for the year ended March 31, 2019. The Condensed Consolidated Balance Sheet at March 31, 2018, has been derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. The Company’s condensed consolidated financial statements present the consolidated accounts of FRHC, FFIN, Freedom RU, Freedom KZ, FFIN Bank, Freedom CY, Freedom UA, Freedom UZ, LLC First Stock Store (“Freedom 24”) and Branch Office of LLC IC Freedom Finance in Kazakhstan (“KZ Branch”). All significant inter-company balances and transactions have been eliminated from the condensed consolidated financial statements. For further information, refer to the consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2018. Use of estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that the estimates utilized in preparing its financial statements are reasonable and prudent. Actual results could differ from those estimates. Revenue recognition Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services promised to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The majority of the Company’s revenue-generating transactions are not subject to ASC Topic 606, including revenue generated from financial instruments, such as loans and investment securities, as these activities are subject to other US GAAP guidance discussed elsewhere within these disclosures. Descriptions of the Company’s revenue-generating activities that are within the scope of ASC Topic 606, which are presented in these income statements as components of non-interest income are as follows: ● Commissions on brokerage services; ● Commissions on banking services (money transfers, foreign exchange operations and other); and ● Commissions on investment banking services (underwriting, market making, and bondholders’ representation services). The Company adopted the new guidance on April 1, 2018. Under Topic 606, the Company is required to recognize incentive fees when they are probable and there is not a significant chance of reversal in the future. For the brokerage commission, banking service commission and investment banking services commission contracts in place at the time of adoption, this change in policy did not result in any actual change in revenue that had already been recognized and therefore there was no transition adjustment necessary. Based on a review of the Company’s brokerage commission, banking service commission and investment banking services commission contracts in place at the time of adoption, the Company does not believe the actual timing of recognition of incentive fees under future contracts will be materially impacted in the future. However, the new policy may result in incentive fees being recognized sooner in the future than they would have been under the Company’s revenue recognition policy in place prior to the adoption of Topic 606. The Company recognizes revenue when five basic criteria have been met: ● The parties to the contract have approved the contract (in writing, orally, or in accordance with other customary business practices) and are committed to perform their respective obligations. ● The entity can identify each party’s rights regarding the goods or services to be transferred. ● The entity can identify the payment terms for the goods or services to be transferred. ● The contract has commercial substance (that is, the risk, timing, or amount of the entity’s future cash flows is expected to change as a result of the contract). ● It is probable that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. Derivative financial instruments In the normal course of business, the Company invests in various derivative financial contracts including futures. Derivatives are initially recognized at fair value at the date a derivative contract is entered into and are subsequently re-measured to their fair value at each reporting date. The fair values are estimated based on quoted market prices or pricing models that take into account the current market and contractual prices of the underlying instruments and other factors. Derivatives are carried as assets when their fair value is positive and as liabilities when it is negative. Derivatives are included in assets and liabilities at fair value through profit or loss in the consolidated balance sheet. The Company purchases foreign currency futures contracts from financial institutions to minimize the risk caused by foreign currency fluctuation on its foreign currency receivables and payables and also purchases foreign currency futures contracts for speculative purposes. Futures are traded on the Kazakhstan Stock Exchange and represent commitments to purchase or sell a particular foreign currency at a future date and at a specific price. All gains and losses on foreign currency contracts were realized during the three months ended June 30, 2018 and 2017, and are included in net gain on derivatives in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income/(Loss). Functional currency Management has adopted ASC 830, Foreign Currency Translation Matters as it pertains to its foreign currency translation. The Company’s functional currencies are the Russian ruble, European euro, Ukrainian hryvnia, Uzbekistani som and Kazakhstani tenge, and its reporting currency is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated into United States dollars using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in revenue. For financial reporting purposes, foreign currencies are translated into United States dollars as the reporting currency. Assets and liabilities are translated at the exchange rate in effect at the balance sheet dates. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ equity as “Accumulated other comprehensive income/(loss)” reserve. Cash and cash equivalents Cash and cash equivalents are generally comprised of certain highly liquid investments with maturities of three months or less at the date of purchase. Cash and cash equivalents include reverse repurchase agreements which are recorded at the amounts at which the securities were acquired or sold plus accrued interest. Securities reverse repurchase and repurchase agreements A reverse repurchase agreement is a transaction in which the Company purchases financial instruments from a seller, typically in exchange for cash, and simultaneously enters into an agreement to resell the same or substantially the same financial instruments to the seller for an amount equal to the cash or other consideration exchanged plus interest at a future date. Securities purchased under reverse repurchase agreements are accounted for as collateralized financing transactions and are recorded at the contractual amount for which the securities will be resold, including accrued interest. Financial instruments purchased under reverse repurchase agreements are recorded in the financial statements as cash placed on deposit collateralized by securities and classified as cash and cash equivalents in the Condensed Consolidated Balance Sheets. A repurchase agreement is a transaction in which the Company sells financial instruments to another party, typically in exchange for cash, and simultaneously enters into an agreement to reacquire the same or substantially the same financial instruments from the buyer for an amount equal to the cash or other consideration exchanged plus interest at a future date. These agreements are accounted for as collateralized financing transactions. The Company retains the financial instruments sold under repurchase agreements and classifies them as trading securities in the Condensed Consolidated Balance Sheets. The consideration received under repurchase agreements is classified as securities repurchase agreement obligations in the Condensed Consolidated Balance Sheets. The Company enters into reverse repurchase agreements, repurchase agreements, securities borrowed and securities loaned transactions to, among other things, acquire securities to leverage and grow its proprietary trading portfolio, cover short positions and settle other securities obligations, to accommodate customers’ needs and to finance its inventory positions. The Company enters into these transactions in accordance with normal market practice. Under standard terms for repurchase transactions, the recipient of collateral has the right to sell or repledge the collateral, subject to returning equivalent securities on settlement of the transaction. Available-for-sale securities Financial assets categorized as available-for-sale (“AFS”) are non-derivatives that are either designated as available-for-sale or not classified as (a) loans and receivables, (b) held to maturity investments or (c) trading securities. Listed shares and listed redeemable notes held by the Company that are traded in an active market are classified as AFS and are stated at fair value. The Company has investments in unlisted shares that are not traded in an active market but that are also classified as investments AFS and stated at fair value (because Company management considers that fair value can be reliably measured). Gains and losses arising from changes in fair value are recognized in other comprehensive income and accumulated in the Accumulated other comprehensive income/(loss), with the exception of other-than-temporary impairment losses, interest calculated using the effective interest method, dividend income and foreign exchange gains and losses are recognized in the Condensed Consolidated Statements of Operations and Statements of other Comprehensive Income/(Loss). Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously accumulated in the investments revaluation reserve is reclassified to profit or loss. Trading securities Financial assets are classified as trading securities if the financial asset has been acquired principally for the purpose of selling it in the near term. Trading securities are stated at fair value, with any gains or losses arising on remeasurement recognized in revenue. Changes in fair value are recognized in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income/(Loss) and included in net gain/(loss) on trading securities. Interest earned, and dividend income are recognized in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income/(Loss) and are included in interest income, according to the terms of the contract and when the right to receive the payment has been established. Investments in nonconsolidated managed funds are accounted for at fair value based on the net asset value (“NAV”) of the funds provided by the fund managers with gains or losses included in net gain on trading securities in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income/(Loss). Debt securities issued Debt securities issued are initially recognized at the fair value of the consideration received, less directly attributable transaction costs. Subsequently, amounts due are stated at amortized cost and any difference between net proceeds and the redemption value is recognized over the period of the borrowings using the effective interest method. If the Company purchases its own debt, it is removed from the Condensed Consolidated Balance Sheets and the difference between the carrying amount of the liability and the consideration paid is recognized in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income/(Loss). Brokerage and other receivables Brokerage and other receivables comprise commissions and receivables related to the securities brokerage and banking activity of the Company. At initial recognition, brokerage and other receivables are recognized at fair value. Subsequently, brokerage and other receivables are carried at cost net of any allowance for impairment losses. Derecognition of financial assets A financial asset (or, where applicable a part of a financial asset or a part of a group of similar financial assets) is derecognized where all of the following conditions are met: ● The transferred financial assets have been isolated from the Company - put presumptively beyond the reach of the Company and its creditors, even in bankruptcy or other receivership. ● The Company has rights to pledge or exchange financial assets. ● The Company or its agents do not maintain effective control over the transferred financial assets or third-party beneficial interests related to those transferred assets. Where the Company has not met the asset derecognition conditions above, it continues to recognize the asset to the extent of its continuing involvement. Impairment of long lived assets In accordance with the accounting guidance for the impairment or disposal of long-lived assets, the Company periodically evaluates the carrying value of long-lived assets to be held and used when events and circumstances warrant such a review. The carrying value of a long-lived asset is considered impaired when the fair value from such asset is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost of disposal. As of June 30, 2018 and March 31, 2018, the Company had not recorded any charges for impairment of long-lived assets. Impairment of goodwill As of June 30, 2018 and March 31, 2018, goodwill recorded in the Company’s Condensed Consolidated Balance Sheets totaled $3,103 and $3,288, respectively. The Company performs an impairment review at least annually, unless indicators of impairment exist in interim periods. The impairment test for goodwill uses a two-step approach. Step one compares the estimated fair value of a reporting unit with goodwill to its carrying value. If the carrying value exceeds the estimated fair value, step two must be performed. Step two compares the carrying value of the reporting unit to the fair value of all of the assets and liabilities of the reporting unit as if the reporting unit was acquired in a business combination. If the carrying amount of a reporting unit's goodwill exceeds the implied fair value of its goodwill, an impairment loss is recognized in an amount equal to the excess. In its annual goodwill impairment test, the Company estimated the fair value of the reporting unit based on the income approach (also known as the discounted cash flow method) and determined the fair value of the Company’s goodwill exceeded the carrying amount of the Company’s goodwill. Income taxes The Company recognizes deferred tax liabilities and assets based on the difference between the financial statements and tax basis of assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to reverse. The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefits that, based on available evidence, are not expected to be realized. Current income tax expenses are provided for in accordance with the laws of the relevant taxing authorities. As part of the process of preparing financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates. The Company accounts for income taxes using the asset and liability approach. Under this method, deferred income taxes are recognized for tax consequences in future years based on differences between the tax bases of assets and liabilities and their reported amounts in the financial statements at each year-end and tax loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates applicable for the differences that are expected to affect taxable income. The Company will include interest and penalties arising from the underpayment of income taxes in the provision for income taxes. As of June 30, 2018 and March 31, 2018, the Company had no accrued interest or penalties related to uncertain tax positions. On December 22, 2017, the U.S. bill commonly referred to as the Tax Cuts and Jobs Act (“Tax Reform Act”) was enacted, which significantly changes U.S. tax law by, among other things, lowering corporate income tax rates, implementing a territorial tax system and imposing a repatriation tax on deemed repatriated earnings of foreign subsidiaries. The Tax Reform Act permanently reduces the U.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. The Tax Reform Act also provided for a one-time deemed repatriation of post-1986 undistributed foreign subsidiary earnings and profits (“E&P”) through the year ended December 31, 2017. The Global Intangible Low-Taxed Income ("GILTI") provisions of the Tax Reform Act require the Company to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. The Company may be subject to incremental U.S. tax on GILTI income beginning in 2018, depending upon expense allocations and the applicable U.S. foreign tax credit rules. The Company has presented the deferred tax impacts of GILTI tax in its consolidated financial statements for the quarter ended June 30, 2018. Financial instruments Financial instruments are carried at fair value as described below. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability. Fair value is the current bid price for financial assets, current ask price for financial liabilities and the average of current bid and ask prices when the Company is both in short and long positions for the financial instrument. A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange or other institution and those prices represent actual and regularly occurring market transactions on an arm’s length basis. Leases Rent payable under operating leases is charged to expense on a straight-line basis over the term of the relevant lease. Fixed assets Fixed assets are carried at cost, net of accumulated depreciation. Maintenance, repairs, and minor renewals are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range between three and seven years. Recent accounting pronouncements In May 2018, the FASB issued ASU No. 2018-06, Codification Improvements to Topic 942, Financial Services - Depository and Lending. The FASB issued this Update to supersede outdated guidance related to the Office of the Comptroller of the Currency’s Banking Circular 202, Accounting for Net Deferred Tax Charges (Circular 202). The Board has an ongoing project on its agenda about Codification improvements to clarify the FASB Accounting Standards Codification or to correct unintended application of guidance. Those Codification improvement items generally are not expected to have a significant effect on current accounting practice or to create a significant administrative cost for most entities. The amendments in this Update are of a similar nature, and, therefore, the Board is addressing the improvements through the Codification improvements project. The Board decided to issue a separate Update to increase stakeholders’ awareness of the improvements to Topic 942, Financial Services—Depository and Lending. The amendments in this Update remove outdated guidance related to Circular 202 and should have no effect on reporting entities. ASU 2016-02, “Leases,” ASU 2018-01, “Land Easement Practical Expedient for Transition to Topic 842,” ASU 2018-10, “Codification Improvements to Topic 842, Leases” and ASU 2018-11, “Leases (Topic 842): Targeted Improvements”: In February 2016, the FASB issued ASU 2016-02 which requires entities to include substantially all leases on the balance sheet by requiring the recognition of right-of-use assets and lease liabilities for all leases. Entities may elect to exclude from the balance sheet those leases with a maximum possible term of less than 12 months. For lessees, a lease is classified as finance or operating, and the asset and liability are initially measured at the present value of the lease payments. For lessors, accounting for leases is largely unchanged from previous provisions of U.S. GAAP, other than certain changes to align lessor accounting to specific changes made to lessee accounting and ASC 606. ASU 2016-02 also requires new qualitative and quantitative disclosures for both lessees and lessors. In July 2018 the FASB adopted ASU 2018-10 which makes technical corrections and clarifications to the accounting guidance in Topic 842. For public entities, these ASU 2016-02, 2018-01, 2018-10 and 2018-11 are effective for fiscal years beginning after December 15, 2018, including interim periods therein, with early adoption permitted. ASU 2016-02 requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. ASU 2018-11, adopted in July 2018, provides entities an optional transition method to apply the new guidance as of the adoption date, rather than as of the earliest period presented. In transition, entities may elect certain practical expedients when applying ASU 2016-02. These include a package of practical expedients that must be applied in its entirety to all leases commencing before the effective date, unless the lease is modified, to not reassess (a) the existence of a lease, (b) lease classification or (c) determination of initial direct costs, which effectively allows entities to carryforward accounting conclusions under previous U.S. GAAP. ASU 2016-02 also includes a practical expedient to use hindsight in making judgments when determining the lease term and any long-lived asset impairment. ASU 2018-01, adopted in January 2018, allows entities to elect a practical expedient that would exclude application of ASU 2016-02 to land easements that existed prior to its adoption, if they were not accounted for as leases under previous U.S. GAAP. ASU 2018-11 provides a lessor practical expedient for separating lease and non-lease components. We are currently evaluating the effect of the standards on our ongoing financial reporting. |
Revision of Financial Statement
Revision of Financial Statement | 3 Months Ended |
Jun. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Revision of Financial Statement | When preparing the condensed consolidated financial statements as of and for the three months ended June 30, 2018, management determined that certain amounts included in the Company’s condensed consolidated financial statements as of March 31, 2018 and for the three months ended June 30, 2017 required revision, due to closing of the acquisition of Freedom RU on June 29, 2017, and Freedom CY on November 1, 2017 and the closing of the mergers of Nettrader LLC (“Nettrader”) in May 2018 and Asyl Invest JSC (“Asyl”) in April 2018, which were deemed to be entities under common control with the Company. Certain reclassifications also have been made to the prior year’s consolidated financial statements to enhance comparability with the current year’s consolidated financial statements following the increase in intangible assets of the Company related to acquisition of the Tradernet trading platform. As a result, certain line items have been amended in the Condensed Consolidated Balance Sheets. Comparative figures have been adjusted to conform to the current period’s presentation. The previously issued Condensed Consolidated Balance Sheet as of March 31, 2018, and Condensed Consolidated Statement of Operations and Statements of Other Comprehensive Income for the three months ended June 30, 2017 have been revised as follows: As of March 31, 2018 BALANCE SHEETS (RECAST) As previously reported Recast As recasted ASSETS Cash and cash equivalents $ 64,531 $ 1,200 $ 65,731 Restricted cash 13,671 8,291 21,962 Trading securities 212,319 276 212,595 Available-for-sale securities, at fair value 2 238 240 Brokerage and other receivables, net 21,109 3,745 24,854 Loans issued 8,754 - 8,754 Deferred tax assets 1,046 (274 ) 772 Fixed assets, net 2,362 209 2,571 Intangible assets, net - 5,531 5,531 Goodwill 1,798 1,490 3,288 Other assets, net 4,494 79 4,573 TOTAL ASSETS $ 330,086 $ 20,785 $ 350,871 LIABILITIES AND STOCKHOLDERS’ EQUITY Securities sold, not yet purchased - at fair value $ 1,135 $ - $ 1,135 Loans received 7,143 - 7,143 Debt securities issued 10,840 382 11,222 Customer liabilities 21,855 8,817 30,672 Trade payables 8,998 15 9,013 Deferred distribution payments 8,534 - 8,534 Securities repurchase agreement obligation 154,775 - 154,775 Deferred income tax liabilities 387 (387 ) - Other liabilities 1,319 57 1,376 TOTAL LIABILITIES 214,986 8,884 223,870 STOCKHOLDERS’ EQUITY Preferred stock - - - Common stock 58 - 58 Additional paid in capital 87,049 13,131 100,180 Retained earnings 35,387 (1,067 ) 34,320 Accumulated other comprehensive loss (7,394 ) (163 ) (7,557 ) TOTAL STOCKHOLDERS’ EQUITY 115,100 11,901 127,001 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 330,086 $ 20,785 $ 350,871 For the three months ended June 30, 2017 STATEMENTS OF OPERATIONS AND STATEMENTS OF OTHER COMPREHENSIVE INCOME (RECAST) As previously reported Recast As recasted Revenue: Fee and commission income $ 2,855 $ 202 $ 3,057 Net gain on trading securities 7,009 122 7,131 Interest income 2,584 63 2,647 Net gain on derivatives 490 - 490 Net gain on foreign exchange operations 617 42 659 TOTAL REVENUE, NET 13,555 429 13,984 Expense: Interest expense 1,987 43 2,030 Fee and commission expense 238 51 289 Operating expense 2,911 752 3,663 Other expense, net 78 (33 ) 45 TOTAL EXPENSE 5,214 813 6,027 NET INCOME BEFORE INCOME TAX 8,341 (384 ) 7,957 Income tax benefit 31 2 33 NET INCOME $ 8,372 $ (382 ) $ 7,990 OTHER COMPREHENSIVE INCOME Change in unrealized gain on investments available-for-sale, net of tax effect $ - $ (59 ) $ (59 ) Foreign currency translation adjustments, net of tax (1,758 ) (411 ) (2,169 ) COMPREHENSIVE INCOME $ 6,614 $ (852 ) $ 5,762 |
Cash and Cash Equivalents
Cash and Cash Equivalents | 3 Months Ended |
Jun. 30, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents | June 30, 2018 March 31, 2018 (Recast) Securities purchased under reverse repurchase agreements $ 19,514 $ 27,389 Current account with commercial banks 7,616 9,032 Petty cash in bank vault and on hand 5,834 2,712 Current account with Central Depository (Kazakhstan) 4,588 1,280 Current accounts with brokers 3,781 22,749 Current account with National Settlement Depository (Russia) 1,770 1,244 Current account with Central Bank (Russia) 991 980 Accounts with stock exchange 814 214 Current account in clearing organizations 149 131 Total cash and cash equivalents $ 45,057 $ 65,731 As of June 30, 2018 and March 31, 2018, cash and cash equivalents were not insured. As of June 30, 2018 and March 31, 2018, the cash and cash equivalents balance included collateralized securities received under reverse repurchase agreements on the terms presented below: June 30, 2018 Interest rates and remaining contractual maturity of the agreements Average Interest rate Up to 30 days 30-90 days Total Securities purchased under reverse repurchase agreements Corporate equity 14.88 % 9,156 9,656 18,812 Corporate debt 15.00 % 702 - 702 Total $ 9,858 $ 9,656 $ 19,514 March 31, 2018 (Recast) Interest rates and remaining contractual maturity of the agreements Average Interest rate Up to 30 days 30-90 days Total Securities purchased under reverse repurchase agreements Corporate equity 14.99 % $ 11,095 $ 15,572 $ 26,667 Corporate debt 14.96 % 521 201 722 Total $ 11,616 $ 15,773 $ 27,389 The securities received by the Company as collateral under reverse repurchase agreements are liquid trading securities with market quotes and significant trading volume. The fair value of collateral received by the Company under reverse repurchase agreements as of June 30, 2018 and March 31, 2018, is $33,729 and $28,311, respectively. For additional information please see Note 9 – Securities sold, not yet purchased – at fair value. |
Restricted Cash
Restricted Cash | 3 Months Ended |
Jun. 30, 2018 | |
Restricted Cash [Abstract] | |
Restricted Cash | As of June 30, 2018, and March 31, 2018, the Company’s restricted cash consisted of deferred distribution payments, cash segregated in a special custody account for the exclusive benefit of our brokerage customers and required reserves with the Central Bank of the Russian Federation which represents cash on hand balance requirements. The deferred distribution payment amount is the reserve held for distribution to shareholders who have not yet claimed their distributions from the 2011 sale of the Company’s oil and gas exploration and production operations of $8,534. This distribution is currently payable, subject to the entitled shareholder completing and submitting to the Company the necessary documentation to claim his, her or its distribution payments. The Company has no control over when, or if, an entitled shareholder will submit the necessary documentation to claim his, her, or its distribution payment. Restricted cash consisted of: June 30, 2018 March 31, 2018 (Recast) Brokerage customers’ cash $ 15,439 $ 12,963 Deferred distribution payments 8,534 8,534 Guaranty deposits 640 350 Reserve with Central Bank of Russia 189 115 Total restricted cash $ 24,802 $ 21,962 |
Trading Securities
Trading Securities | 3 Months Ended |
Jun. 30, 2018 | |
Debt Securities, Trading, and Equity Securities, FV-NI [Abstract] | |
Trading Securities | As of June 30, 2018, and March 31, 2018, trading securities consisted of: June 30, 2018 March 31, 2018 (Recast) Equity securities $ 146,487 $ 177,339 Debt securities 37,615 34,986 Mutual investment funds 248 270 Total trading securities $ 184,350 $ 212,595 The following tables present trading securities assets in the condensed consolidated financial statements at fair value on a recurring basis as of June 30, 2018 and March 31, 2018: Fair Value Measurements at June 30, 2018 using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant unobservable units June 30, 2018 (Level 1) (Level 2) (Level 3) Equity securities $ 146,487 $ 146,487 $ - $ - Debt securities 37,615 37,615 - - Mutual investment funds 248 248 - - Total trading securities $ 184,350 $ 184,350 $ - $ - Fair Value Measurements at March 31, 2018 (Recast) using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant unobservable units March 31, 2018 (Recast) (Level 1) (Level 2) (Level 3) Equity securities $ 177,339 $ 177,339 $ - $ - Debt securities 34,986 34,986 - - Mutual investment funds 270 270 - - Total trading securities $ 212,595 $ 212,595 $ - $ - |
Loans Issued
Loans Issued | 3 Months Ended |
Jun. 30, 2018 | |
Loans Issued | |
Loans Issued | As of June 30, 2018, and March 31, 2018 the Company had loans issued in the amount of $16,757 and $8,754, respectively. Loans issued as of June 30, 2018, consisted of the following: Amount Outstanding Due Dates Average Interest Rate Fair Value of Collateral Loan Currency Collateralized brokerage loans $ 4,720 Jan. 2019 – Feb. 2019 3.00% $ 4,479 USD Uncollateralized brokerage loan $ 11,496 Sep. 2018 3.00% - KZT Bank customer loans $ 541 Nov. 2018- Feb. 2028 12.59% - RUB Loans issued as of March 31, 2018, consisted of the following: Amount Outstanding Due Dates Average Interest Rate Fair Value of Collateral Loan Currency Collateralized brokerage loans $ 5,371 Jan. 2019 – Feb. 2019 3.00% $ 6,992 USD Uncollateralized brokerage loan $ 2,832 Jan. 2019 – Mar. 2019 0.00% - KZT Bank customer loans $ 551 Nov. 2018- Feb. 2028 12.32% - RUB |
Deferred Tax Assets
Deferred Tax Assets | 3 Months Ended |
Jun. 30, 2018 | |
Deferred Tax Assets, Net [Abstract] | |
Deferred Tax Assets | The Company is subject to taxation in the Russian Federation, Kazakhstan, Kyrgyzstan, Cyprus, Ukraine, Uzbekistan and the United States of America. The tax rates used for deferred tax assets and liabilities for the three months ended June 30, 2018 and 2017, is 25% and 37.3%, respectively for the US and 20% for the Russian Federation, Kazakhstan, Kyrgyzstan, Ukraine and Uzbekistan. Deferred tax assets and liabilities of the Company are comprised of the following: June 30, 2018 March 31, 2018 (Recast) Deferred tax assets: Tax losses carryforward $ 3,283 $ 3,050 GILTI losses 404 - Accrued liabilities 34 49 Revaluation on trading securities 151 88 Stock compensation expenses 718 405 Valuation allowance (3,736 ) (2,433 ) Deferred tax assets 854 1,159 Deferred tax liabilities: Revaluation on trading securities 42 387 Deferred tax liabilities 42 387 Net deferred tax assets $ 812 $ 772 During the three months ended June 30, 2018 and 2017, the effective tax rate was equal to 2.13% and (0.41%), respectively. During the three months ended June 30, 2018, effective tax rate was primarily impacted due to unrecognized tax losses carryforward on Freedom KZ and FRHC in the amount of $309 and $1,666, respectively, and during the three months ended June 30, 2017 due to non-taxable gains on trading securities in Freedom KZ in the amount of $7,795. During the three-month period ended June 30, 2018, the Company realized net loss before income tax of $7,033, primarily from operating expenses of the Company and losses of Freedom KZ on trading operations. This resulted in the Company realizing an income tax benefit during the three months ended June 30, 2018 of $150. During the three months ended June 30, 2017, the Company realized a net income before income tax of $7,957 primarily from non-taxable revenues generated from Freedom KZ’s trading operations and utilized tax loss carryforwards of $203. This resulted in the Company realizing an income tax benefit during the three months ended June 30, 2017 of $33. |
Securities Sold, Not Yet Purcha
Securities Sold, Not Yet Purchased - At Fair Value | 3 Months Ended |
Jun. 30, 2018 | |
Securities Sold Not Yet Purchased - At Fair Value | |
Securities Sold, Not Yet Purchased - At Fair Value | As of June 30, 2018, and March 31, 2018, the Company’s securities sold, not yet purchased – at fair value was $1,756 and $1,135 respectively. During the quarter ended June 30, 2018, the Company sold shares received as a pledge under reverse repurchase agreements and recognized financial liabilities at fair value in the amount of $6,996, and partially closed short position in the amount of $5,216 by purchasing securities from a third party, reducing the financial liability. During the quarter ended June 30, 2018, the Company recognized a gain on the change in fair value of financial liabilities at fair value through the Consolidated Statements of Operations and Statements of Other Comprehensive Income/(Loss) in the amount of $956 with a foreign exchange translation gain of $203. A short sale involves the sale of a security that is not owned in the expectation of purchasing the same security (or a security exchangeable) at a later date at a lower price. A short sale involves the risk of a theoretically unlimited increase in the market price of the security that would result in a theoretically unlimited loss. |
Derivative Liability
Derivative Liability | 3 Months Ended |
Jun. 30, 2018 | |
Derivative Liability [Abstract] | |
Derivative Liability | On December 28, 2016, Freedom RU entered into a derivative instrument agreement with a related party that included a call option feature for the purchase of shares held by Freedom RU. This call option was classified as a derivative liability in the Consolidated Balance Sheets and measured at each reporting period using the Black-Scholes Model. The gain associated with this derivative instrument is recognized as a gain on derivative instrument in the Consolidated Statements of Operations and Statements of Other Comprehensive Income. In exchange for a $2,629 premium paid upfront, this derivative instrument granted the holder the right to purchase 11.8 million shares of a top rated Russian commercial bank – Sberbank, on June 14, 2017, at a strike price $3.10 per share. The Company recorded a derivative liability of $495 as of March 31, 2017, as a result of the fair value of the call option. On June 14, 2017, the derivative instrument expired, unexercised by the option holder, and the Company recognized a gain on the derivative instrument of $490. |
Loans Received
Loans Received | 3 Months Ended |
Jun. 30, 2018 | |
Loans Receivable, Net [Abstract] | |
Loans Received | Borrower Lender June 30, 2018 March 31, 2018 Interest rate Term Maturity date JSC Freedom Finance Bank $ 9,049 $ 7,044 7 % 1 year 2/5/2019 Freedom Holding Corp. Non-Bank 4,834 - 3 % 3 months 9/30/2018 FFINEU Investments Limited Non-Bank 94 99 1 % 1 year 12/11/2018 Total $ 13,977 $ 7,143 As of June 30, 2018 and March 31, 2018, the Company had received United States dollar denominated loans from JSC AsiaCreditBank in the total amount of $8,954 and $7,031, respectively, under a credit line agreement with $9,000 in total available for withdrawal. The Company pledged 3.1 million shares of Kcell with a fair value $13,970 as of June 30, 2018, to collateralize the AsiaCreditBank loan. Non-bank loans received are unsecured. As of June 30, 2018 and March 31, 2018, accrued interest on the loans totaled $68 and $16, respectively. |
Debt Securities Issued
Debt Securities Issued | 3 Months Ended |
Jun. 30, 2018 | |
Debt Securities [Abstract] | |
Debt Securities Issued | June 30, 2018 March 31, 2018 (Recast) Debt securities issued denominated in USD $ 10,605 $ 7,006 Debt securities issued denominated in KZT 9,253 4,025 Accrued interest 111 191 Total $ 19,969 $ 11,222 As of June 30, 2018, and March 31, 2018, the Company had bonds of Freedom KZ issued under Kazakhstan law in the amount of $19,969 and $11,222 respectively. As of June 30, 2018, Company issued bonds with fixed annual coupon rate ranging from 8% to 11.5% and maturity dates ranging from January 2019 to May 2021. As of March 31, 2018, debt securities issued included Asyl bonds in the amount of $3,015 with 8% fixed annual coupon rate and maturity date of August 2018, which were fully redeemed in April 2018. Debt securities issued are initially recognized at the fair value of the consideration received, less directly attributable transaction costs. Debt securities issued as of June 30, 2018 and March 31, 2018 included $111 and $191 accrued interest, respectively. The Freedom KZ bonds are actively traded on Kazakhstan Stock Exchange. |
Customer Liabilities
Customer Liabilities | 3 Months Ended |
Jun. 30, 2018 | |
Contract with Customer, Liability [Abstract] | |
Customer Liabilities | The Company recognizes customer liabilities associated with funds held by our brokerage and bank customers. Customer liabilities consist of: June 30, 2018 March 31, 2018 (Recast) Brokerage customers $ 21,927 $ 21,367 Banking customers 18,475 9,305 Total $ 40,402 $ 30,672 |
Securities Repurchase Agreement
Securities Repurchase Agreement Obligations | 3 Months Ended |
Jun. 30, 2018 | |
Securities Sold under Agreements to Repurchase [Abstract] | |
Securities Repurchase Agreement Obligations | As of June 30, 2018, and March 31, 2018, trading securities included collateralized securities subject to repurchase agreements as described in the following table: June 30, 2018 Interest rates and remaining contractual maturity of the agreements Average interest rate Up to 30 days 30-90 days Over 90 days Total Securities sold under repurchase agreements Corporate equity 12.26 % $ 86,961 $ 906 $ 6,532 $ 94,399 Corporate debt 6.83 % 9,896 - - 9,896 Non-US sovereign debt 8.41 % 10,277 - - 10,277 Total securities sold under repurchase agreements $ 107,134 $ 906 $ 6,532 $ 114,572 March 31, 2018 (Recast) Interest rate and remaining contractual maturity of the agreements Average interest rate Overnight and continuous Up to 30 days 30-90 days Total Securities sold under repurchase agreements Corporate equity 12.04 % $ 109,821 $ 8,961 $ 7,148 $ 125,930 Corporate debt 10.64 % 24,257 2,023 - 26,280 Non-US sovereign debt 8.54 % 2,565 - - 2,565 Total securities sold under repurchase agreements $ 136,643 $ 10,984 $ 7,148 $ 154,775 The fair value of collateral pledged under repurchase agreements as of June 30, 2018 and March 31, 2018, was $155,459 and $203,140, respectively. Securities pledged as collateral by the Company under repurchase agreements are liquid trading securities with market quotes and significant trading volume. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | On December 28, 2016, Freedom RU entered into a derivative instrument agreement with a related party which included a call option feature. The gain or loss associated with this agreement is recognized as gain on a derivative instrument in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income/(Loss). The Company recorded a derivative liability of $495 as of March 31, 2017. On June 14, 2017, the derivative instrument expired unexercised by the holder, and the Company recognized a gain on the derivative instrument of $490 for the three months ended June 30, 2017. During the three months ended June 30, 2018 and 2017, the Company earned commission income from related parties in the amounts of $4,439 and $661, respectively. Commission income earned from related parties is comprised primarily of brokerage commissions and agency fees for referrals of new brokerage clients to other brokers and commissions for money transfers by brokerage clients. As of June 30, 2018 and March 31, 2018, the Company had bank commission receivables and receivable from brokerage clients from related parties totaling $615 and $1,055, respectively. Brokerage and other receivables from related parties result principally from commissions receivable on the brokerage operations of related parties. As of June 30, 2018 and March 31, 2018, the Company had brokerage accounts with related parties totaling $2,700 and $17,795, respectively. As of June 30, 2018, and March 31, 2018, the Company had loans issued to related parties totaling $5 and $1,748, respectively. As of June 30, 2018, and March 31, 2018, the Company had margin lending receivables with related parties totaling $10,818 and $8,748, respectively. As of June 30, 2018, and March 31, 2018, the Company had advances received for the sale of fixed assets from a related party totaling $0 and $288, respectively. As of June 30, 2018, and March 31, 2018, the Company had margin lending payables due to related parties, totaling $0 and $81, respectively. As of June 30, 2018, and March 31, 2018, the Company had loans received from a related party totaling $843 and $99, respectively. As of June 30, 2018, and March 31, 2018, the Company had customer liabilities on brokerage accounts and bank accounts of related parties totaling $11,104 and $3,402, respectively. As of June 30, 2018, and March 31, 2018, the Company had restricted customer cash on brokerage accounts and cash on bank accounts of related parties totaling $9,762 and $2,004, respectively. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Jun. 30, 2018 | |
STOCKHOLDERS' EQUITY | |
Stockholders' Equity | During the three months ended June 30, 2018, Mr. Turlov made capital contributions of $225 to FRHC. At the time such contributions were made, Mr. Turlov was the Chief Executive Officer, Chairman of the board, and majority shareholder of the Company. On June 29, 2017, the Company and Mr. Turlov closed the acquisition of Freedom RU. Pursuant to the terms of the Acquisition Agreement, Mr. Turlov received a total of 20,665,023 shares of restricted common stock in exchange for his 100% interest in Freedom RU. On October 6, 2017, the Company awarded restricted stock grants totaling 3,900,000 shares of its common stock to 16 employees and awarded nonqualified stock options to purchase an aggregate of 360,000 shares of its common stock to two employees. Of the 3,900,000 shares awarded pursuant to the restricted stock grant awards, 1,200,000 shares are subject to two-year vesting conditions and 2,700,000 shares are subject to three-year vesting conditions. All of the nonqualified stock options are subject to three-year vesting conditions. The Company recorded stock based compensation expense for restricted stock grants and stock options in the amount of $838 during the three months ended June 30, 2018. As disclosed in Note 1 on November 10, 2017, FRHC issued 12,758,011 shares of restricted Company common stock in exchange for Mr. Turlov 100% equity interest in Freedom CY and Freedom CY became a wholly owned subsidiary of the Company. As disclosed in Note 1, on November 1, 2017, the Company entered into a Share Exchange and Acquisition Agreement and agreed to issue 387,700 shares of restricted common stock to BusinessTrain Ltd. to acquire 100% of the outstanding equity interest of Freedom UA. On December 8, 2017, the Company completed a private placement of 3,681,667 shares of its restricted common stock in exchange for an aggregate offering proceeds of $11,045. The shares of common stock were sold to non-U.S. persons pursuant to the exemption from registration provided in Regulation S promulgated under the Securities Act for offers and sales made outside the United States. Arkady Rakhilkin, a Company director, purchased 348,333 shares for $1,045. On March 2, 2018, the Company completed a private placement of 5,426,612 shares of its restricted common stock in exchange for an aggregate offering proceeds of $29,399. The shares of common stock were sold to non-U.S. persons pursuant to the exemption from registration provided in Regulation S promulgated under the Securities Act for offers and sales made outside the United States. Askar Tashtitov, a Company director, purchased 28,000 shares for $154. |
Stock based compensation
Stock based compensation | 3 Months Ended |
Jun. 30, 2018 | |
Share-based Compensation [Abstract] | |
Stock based compensation | As disclosed in Note 16, on October 6, 2017, the Company issued restricted stock awards totaling 3,900,000 shares of its common stock to 16 employees and awarded nonqualified stock options to purchase an aggregate of 360,000 shares of its common stock at a strike price $1.98 per share to two employees. Shares of restricted stock have the same dividend and voting rights as common stock while options do not. All awards were issued at the fair value of the underlying shares at the grant date. During the year ended March 31, 2018, stock options covering a total of 360,000 shares of common stock were granted. No options were granted for the quarter ended June 30, 2018. Total compensation expense related to options granted was $54 for the quarter ended June 30, 2018 and $0 for the quarter ended June 30, 2017. As of June 30, 2018, there was total remaining compensation expense of $489 related to stock options, which will be recorded over a weighted average period of approximately 2.27 years. No options were exercisable or exercised during the quarter ended June 30, 2018. The Company has determined fair value of stock options using the Black-Scholes option valuation model based on the following key assumptions during the quarter ended June 30, 2018: Vesting Period (years) 3 Volatility 165.33% Risk-free rate 1.66% During the year ended March 31, 2018 a total of 3,900,000 restricted shares were awarded. During the three months ended June 30, 2018, no restricted shares were awarded. The compensation expense related to restricted stock awards was $784 during the quarter ended June 30, 2018, and $0 during the quarter ended June 30, 2017. As of June 30, 2018, there was $5,884 of total unrecognized compensation cost related to nonvested shares of restricted stock granted. The cost is expected to be recognized over a weighted average period of 1.96 years. 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 June 30, 2018: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (In Years) Aggregate Intrinsic Value Outstanding, beginning of year $ 360,000 $ 1.98 9.27 $ 1,753 Granted - - - - Exercised - - - - Forfeited/cancelled/expired - - - - Outstanding, at June 30, 2018 $ 360,000 $ 1.98 9.27 $ 1,879 Exercisable at June 30, 2018 $ - $ - - $ - The table below summarizes the activity for the Company's restricted stock outstanding during the quarter ended June 30, 2018: Shares Weighted Average Fair Value Outstanding, beginning of year $ 3,900,000 $ 8,190 Granted - Vested - - Forfeited/cancelled/expired - - Outstanding, at June 30, 2018 $ 3,900,000 $ 8,190 |
Acquisitions
Acquisitions | 3 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisition of Asyl On April 12, 2018, we completed the acquisition and merger of Asyl into the Company. This acquisition joined the two largest retail brokerage firms in Kazakhstan and increased our client accounts in Kazakhstan by 16,000 accounts. Asyl was formerly controlled by Mr. Turlov since April 28, 2017. The Company agreed to acquire Asyl from Mr. Turlov. We acquired Asyl for approximately $2.2 million, which was equal to the fair value of the net assets acquired by the Company. When preparing the condensed consolidated financial statements for the three months ended June 30, 2018, management determined that certain amounts included in the Company’s consolidated financial statements as of March 31, 2018 and for the three months ended June 30, 2017 required revision, due to closing of the completion of merger of Asyl in April 2018, which was deemed to be an entity under common control with the Company since April 28, 2017. Acquisition of Nettrader On May 28, 2018, we completed the acquisition and merger of Nettrader. This resulted in the acquisition of approximately 16,000 new Russian client accounts. This acquisition also finalized our acquisition of the Tradernet trading platform, a browser-based application and in some countries a supporting mobile app to facilitate our customers’ trading activities and ability to monitor and manage all aspects of their personal accounts and participate in our client social network. Nettrader was formerly owned by Mr. Turlov since May 18, 2017. We acquired Nettrader for approximately $3.8 million, which was equal to the fair value of the net assets acquired by the Company. When preparing the condensed consolidated financial statements for the three months ended June 30, 2018, management determined that certain amounts included in the Company’s consolidated financial statements as of March 31, 2018 and for the three months ended June 30, 2017 required revision, due to closing of the completion of merger of Nettrader in May 2018, which was deemed to be an entity under common control with the Company since May 18, 2017. |
Reverse Stock Split
Reverse Stock Split | 3 Months Ended |
Jun. 30, 2018 | |
Reverse Stock Split | |
Reverse Stock Split | On September 6, 2017, the Company effected a one-share-for-twenty-five-shares reverse stock split of its common stock. All share and earnings per share information has been retroactively adjusted to reflect the stock split. The effect of this stock split on the Company’s earnings per share is as follows: For the three months ended June 30, 2018 For the three months ended June 30, 2017 (Recast) Basic and diluted net income per common share: Net income/(loss) $ (6,883 ) $ 7,990 Net income/(loss) per common share - basic (in US dollars) $ (0.12 ) $ 0.71 Net income/(loss) per common share - diluted (in US dollars) $ (0.12 ) $ 0.71 Shares used in the calculation of net income per common share: Basic 58,033,212 11,306,084 Diluted 58,191,542 11,306,084 |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 3 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | The table below shows approximate lease commitments and other contingent liabilities of the Company as of June 30, 2018: Contractual obligations Total Less than 1 year 2-3 years Office leases(1) $ 8,609 $ 5,568 $ 3,041 TOTAL $ 8,609 $ 5,568 $ 3,041 (1) The Company has number of lease agreements for office spaces in different locations. In general, all agreements are made for a one-year period with extension or termination provisions, except three lease agreements with longer lease terms. The Company’s rent expense for office space was $1,086 and $377 for the three months ended June 30, 2018 and 2017, respectively. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | The Company evaluated all material events and transactions that occurred after June 30, 2018 through August 14, 2018. During this period the Company did not have any additional material recognizable subsequent events. |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of presentation | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month period ended June 30, 2018, are not necessarily indicative of the results that may be expected for the year ended March 31, 2019. The Condensed Consolidated Balance Sheet at March 31, 2018, has been derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. The Company’s condensed consolidated financial statements present the consolidated accounts of FRHC, FFIN, Freedom RU, Freedom KZ, FFIN Bank, Freedom CY, Freedom UA, Freedom UZ, LLC First Stock Store (“Freedom 24”) and Branch Office of LLC IC Freedom Finance in Kazakhstan (“KZ Branch”). All significant inter-company balances and transactions have been eliminated from the condensed consolidated financial statements. For further information, refer to the consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2018. |
Use of estimates | The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that the estimates utilized in preparing its financial statements are reasonable and prudent. Actual results could differ from those estimates. |
Revenue recognition | Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services promised to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The majority of the Company’s revenue-generating transactions are not subject to ASC Topic 606, including revenue generated from financial instruments, such as loans and investment securities, as these activities are subject to other US GAAP guidance discussed elsewhere within these disclosures. Descriptions of the Company’s revenue-generating activities that are within the scope of ASC Topic 606, which are presented in these income statements as components of non-interest income are as follows: ● Commissions on brokerage services; ● Commissions on banking services (money transfers, foreign exchange operations and other); and ● Commissions on investment banking services (underwriting, market making, and bondholders’ representation services). The Company adopted the new guidance on April 1, 2018. Under Topic 606, the Company is required to recognize incentive fees when they are probable and there is not a significant chance of reversal in the future. For the brokerage commission, banking service commission and investment banking services commission contracts in place at the time of adoption, this change in policy did not result in any actual change in revenue that had already been recognized and therefore there was no transition adjustment necessary. Based on a review of the Company’s brokerage commission, banking service commission and investment banking services commission contracts in place at the time of adoption, the Company does not believe the actual timing of recognition of incentive fees under future contracts will be materially impacted in the future. However, the new policy may result in incentive fees being recognized sooner in the future than they would have been under the Company’s revenue recognition policy in place prior to the adoption of Topic 606. The Company recognizes revenue when five basic criteria have been met: ● The parties to the contract have approved the contract (in writing, orally, or in accordance with other customary business practices) and are committed to perform their respective obligations. ● The entity can identify each party’s rights regarding the goods or services to be transferred. ● The entity can identify the payment terms for the goods or services to be transferred. ● The contract has commercial substance (that is, the risk, timing, or amount of the entity’s future cash flows is expected to change as a result of the contract). ● It is probable that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. |
Derivative financial instruments | In the normal course of business, the Company invests in various derivative financial contracts including futures. Derivatives are initially recognized at fair value at the date a derivative contract is entered into and are subsequently re-measured to their fair value at each reporting date. The fair values are estimated based on quoted market prices or pricing models that take into account the current market and contractual prices of the underlying instruments and other factors. Derivatives are carried as assets when their fair value is positive and as liabilities when it is negative. Derivatives are included in assets and liabilities at fair value through profit or loss in the consolidated balance sheet. The Company purchases foreign currency futures contracts from financial institutions to minimize the risk caused by foreign currency fluctuation on its foreign currency receivables and payables and also purchases foreign currency futures contracts for speculative purposes. Futures are traded on the Kazakhstan Stock Exchange and represent commitments to purchase or sell a particular foreign currency at a future date and at a specific price. All gains and losses on foreign currency contracts were realized during the three months ended June 30, 2018 and 2017, and are included in net gain on derivatives in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income/(Loss). |
Functional currency | Management has adopted ASC 830, Foreign Currency Translation Matters as it pertains to its foreign currency translation. The Company’s functional currencies are the Russian ruble, European euro, Ukrainian hryvnia, Uzbekistani som and Kazakhstani tenge, and its reporting currency is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated into United States dollars using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in revenue. For financial reporting purposes, foreign currencies are translated into United States dollars as the reporting currency. Assets and liabilities are translated at the exchange rate in effect at the balance sheet dates. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ equity as “Accumulated other comprehensive income/(loss)” reserve. |
Cash and cash equivalents | Cash and cash equivalents are generally comprised of certain highly liquid investments with maturities of three months or less at the date of purchase. Cash and cash equivalents include reverse repurchase agreements which are recorded at the amounts at which the securities were acquired or sold plus accrued interest. |
Securities reverse repurchase and repurchase agreements | A reverse repurchase agreement is a transaction in which the Company purchases financial instruments from a seller, typically in exchange for cash, and simultaneously enters into an agreement to resell the same or substantially the same financial instruments to the seller for an amount equal to the cash or other consideration exchanged plus interest at a future date. Securities purchased under reverse repurchase agreements are accounted for as collateralized financing transactions and are recorded at the contractual amount for which the securities will be resold, including accrued interest. Financial instruments purchased under reverse repurchase agreements are recorded in the financial statements as cash placed on deposit collateralized by securities and classified as cash and cash equivalents in the Condensed Consolidated Balance Sheets. A repurchase agreement is a transaction in which the Company sells financial instruments to another party, typically in exchange for cash, and simultaneously enters into an agreement to reacquire the same or substantially the same financial instruments from the buyer for an amount equal to the cash or other consideration exchanged plus interest at a future date. These agreements are accounted for as collateralized financing transactions. The Company retains the financial instruments sold under repurchase agreements and classifies them as trading securities in the Condensed Consolidated Balance Sheets. The consideration received under repurchase agreements is classified as securities repurchase agreement obligations in the Condensed Consolidated Balance Sheets. The Company enters into reverse repurchase agreements, repurchase agreements, securities borrowed and securities loaned transactions to, among other things, acquire securities to leverage and grow its proprietary trading portfolio, cover short positions and settle other securities obligations, to accommodate customers’ needs and to finance its inventory positions. The Company enters into these transactions in accordance with normal market practice. Under standard terms for repurchase transactions, the recipient of collateral has the right to sell or repledge the collateral, subject to returning equivalent securities on settlement of the transaction. |
Available-for-sale securities | Financial assets categorized as available-for-sale (“AFS”) are non-derivatives that are either designated as available-for-sale or not classified as (a) loans and receivables, (b) held to maturity investments or (c) trading securities. Listed shares and listed redeemable notes held by the Company that are traded in an active market are classified as AFS and are stated at fair value. The Company has investments in unlisted shares that are not traded in an active market but that are also classified as investments AFS and stated at fair value (because Company management considers that fair value can be reliably measured). Gains and losses arising from changes in fair value are recognized in other comprehensive income and accumulated in the Accumulated other comprehensive income/(loss), with the exception of other-than-temporary impairment losses, interest calculated using the effective interest method, dividend income and foreign exchange gains and losses are recognized in the Condensed Consolidated Statements of Operations and Statements of other Comprehensive Income/(Loss). Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously accumulated in the investments revaluation reserve is reclassified to profit or loss. |
Trading securities | Financial assets are classified as trading securities if the financial asset has been acquired principally for the purpose of selling it in the near term. Trading securities are stated at fair value, with any gains or losses arising on remeasurement recognized in revenue. Changes in fair value are recognized in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income/(Loss) and included in net gain/(loss) on trading securities. Interest earned, and dividend income are recognized in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income/(Loss) and are included in interest income, according to the terms of the contract and when the right to receive the payment has been established. Investments in nonconsolidated managed funds are accounted for at fair value based on the net asset value (“NAV”) of the funds provided by the fund managers with gains or losses included in net gain on trading securities in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income/(Loss). |
Debt securities issued | Debt securities issued are initially recognized at the fair value of the consideration received, less directly attributable transaction costs. Subsequently, amounts due are stated at amortized cost and any difference between net proceeds and the redemption value is recognized over the period of the borrowings using the effective interest method. If the Company purchases its own debt, it is removed from the Condensed Consolidated Balance Sheets and the difference between the carrying amount of the liability and the consideration paid is recognized in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income/(Loss). |
Brokerage and other receivables | Brokerage and other receivables comprise commissions and receivables related to the securities brokerage and banking activity of the Company. At initial recognition, brokerage and other receivables are recognized at fair value. Subsequently, brokerage and other receivables are carried at cost net of any allowance for impairment losses. |
Derecognition of financial assets | A financial asset (or, where applicable a part of a financial asset or a part of a group of similar financial assets) is derecognized where all of the following conditions are met: ● The transferred financial assets have been isolated from the Company - put presumptively beyond the reach of the Company and its creditors, even in bankruptcy or other receivership. ● The Company has rights to pledge or exchange financial assets. ● The Company or its agents do not maintain effective control over the transferred financial assets or third-party beneficial interests related to those transferred assets. Where the Company has not met the asset derecognition conditions above, it continues to recognize the asset to the extent of its continuing involvement. |
Impairment of long lived assets | In accordance with the accounting guidance for the impairment or disposal of long-lived assets, the Company periodically evaluates the carrying value of long-lived assets to be held and used when events and circumstances warrant such a review. The carrying value of a long-lived asset is considered impaired when the fair value from such asset is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost of disposal. As of June 30, 2018 and March 31, 2018, the Company had not recorded any charges for impairment of long-lived assets. |
Impairment of goodwill | As of June 30, 2018 and March 31, 2018, goodwill recorded in the Company’s Condensed Consolidated Balance Sheets totaled $3,103 and $3,288, respectively. The Company performs an impairment review at least annually, unless indicators of impairment exist in interim periods. The impairment test for goodwill uses a two-step approach. Step one compares the estimated fair value of a reporting unit with goodwill to its carrying value. If the carrying value exceeds the estimated fair value, step two must be performed. Step two compares the carrying value of the reporting unit to the fair value of all of the assets and liabilities of the reporting unit as if the reporting unit was acquired in a business combination. If the carrying amount of a reporting unit's goodwill exceeds the implied fair value of its goodwill, an impairment loss is recognized in an amount equal to the excess. In its annual goodwill impairment test, the Company estimated the fair value of the reporting unit based on the income approach (also known as the discounted cash flow method) and determined the fair value of the Company’s goodwill exceeded the carrying amount of the Company’s goodwill. |
Income taxes | The Company recognizes deferred tax liabilities and assets based on the difference between the financial statements and tax basis of assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to reverse. The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefits that, based on available evidence, are not expected to be realized. Current income tax expenses are provided for in accordance with the laws of the relevant taxing authorities. As part of the process of preparing financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates. The Company accounts for income taxes using the asset and liability approach. Under this method, deferred income taxes are recognized for tax consequences in future years based on differences between the tax bases of assets and liabilities and their reported amounts in the financial statements at each year-end and tax loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates applicable for the differences that are expected to affect taxable income. The Company will include interest and penalties arising from the underpayment of income taxes in the provision for income taxes. As of June 30, 2018 and March 31, 2018, the Company had no accrued interest or penalties related to uncertain tax positions. On December 22, 2017, the U.S. bill commonly referred to as the Tax Cuts and Jobs Act (“Tax Reform Act”) was enacted, which significantly changes U.S. tax law by, among other things, lowering corporate income tax rates, implementing a territorial tax system and imposing a repatriation tax on deemed repatriated earnings of foreign subsidiaries. The Tax Reform Act permanently reduces the U.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. The Tax Reform Act also provided for a one-time deemed repatriation of post-1986 undistributed foreign subsidiary earnings and profits (“E&P”) through the year ended December 31, 2017. The Global Intangible Low-Taxed Income ("GILTI") provisions of the Tax Reform Act require the Company to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. The Company may be subject to incremental U.S. tax on GILTI income beginning in 2018, depending upon expense allocations and the applicable U.S. foreign tax credit rules. The Company has presented the deferred tax impacts of GILTI tax in its consolidated financial statements for the quarter ended June 30, 2018. |
Financial instruments | Financial instruments are carried at fair value as described below. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability. Fair value is the current bid price for financial assets, current ask price for financial liabilities and the average of current bid and ask prices when the Company is both in short and long positions for the financial instrument. A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange or other institution and those prices represent actual and regularly occurring market transactions on an arm’s length basis. |
Leases | Rent payable under operating leases is charged to expense on a straight-line basis over the term of the relevant lease. |
Fixed assets | Fixed assets are carried at cost, net of accumulated depreciation. Maintenance, repairs, and minor renewals are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range between three and seven years. |
Recent accounting pronouncements | In May 2018, the FASB issued ASU No. 2018-06, Codification Improvements to Topic 942, Financial Services - Depository and Lending. The FASB issued this Update to supersede outdated guidance related to the Office of the Comptroller of the Currency’s Banking Circular 202, Accounting for Net Deferred Tax Charges (Circular 202). The Board has an ongoing project on its agenda about Codification improvements to clarify the FASB Accounting Standards Codification or to correct unintended application of guidance. Those Codification improvement items generally are not expected to have a significant effect on current accounting practice or to create a significant administrative cost for most entities. The amendments in this Update are of a similar nature, and, therefore, the Board is addressing the improvements through the Codification improvements project. The Board decided to issue a separate Update to increase stakeholders’ awareness of the improvements to Topic 942, Financial Services—Depository and Lending. The amendments in this Update remove outdated guidance related to Circular 202 and should have no effect on reporting entities. ASU 2016-02, “Leases,” ASU 2018-01, “Land Easement Practical Expedient for Transition to Topic 842,” ASU 2018-10, “Codification Improvements to Topic 842, Leases” and ASU 2018-11, “Leases (Topic 842): Targeted Improvements”: In February 2016, the FASB issued ASU 2016-02 which requires entities to include substantially all leases on the balance sheet by requiring the recognition of right-of-use assets and lease liabilities for all leases. Entities may elect to exclude from the balance sheet those leases with a maximum possible term of less than 12 months. For lessees, a lease is classified as finance or operating, and the asset and liability are initially measured at the present value of the lease payments. For lessors, accounting for leases is largely unchanged from previous provisions of U.S. GAAP, other than certain changes to align lessor accounting to specific changes made to lessee accounting and ASC 606. ASU 2016-02 also requires new qualitative and quantitative disclosures for both lessees and lessors. In July 2018 the FASB adopted ASU 2018-10 which makes technical corrections and clarifications to the accounting guidance in Topic 842. For public entities, these ASU 2016-02, 2018-01, 2018-10 and 2018-11 are effective for fiscal years beginning after December 15, 2018, including interim periods therein, with early adoption permitted. ASU 2016-02 requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. ASU 2018-11, adopted in July 2018, provides entities an optional transition method to apply the new guidance as of the adoption date, rather than as of the earliest period presented. In transition, entities may elect certain practical expedients when applying ASU 2016-02. These include a package of practical expedients that must be applied in its entirety to all leases commencing before the effective date, unless the lease is modified, to not reassess (a) the existence of a lease, (b) lease classification or (c) determination of initial direct costs, which effectively allows entities to carryforward accounting conclusions under previous U.S. GAAP. ASU 2016-02 also includes a practical expedient to use hindsight in making judgments when determining the lease term and any long-lived asset impairment. ASU 2018-01, adopted in January 2018, allows entities to elect a practical expedient that would exclude application of ASU 2016-02 to land easements that existed prior to its adoption, if they were not accounted for as leases under previous U.S. GAAP. ASU 2018-11 provides a lessor practical expedient for separating lease and non-lease components. We are currently evaluating the effect of the standards on our ongoing financial reporting. |
Revision of Financial Stateme28
Revision of Financial Statement (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Revision of financial statements | As of March 31, 2018 BALANCE SHEETS (RECAST) As previously reported Recast As recasted ASSETS Cash and cash equivalents $ 64,531 $ 1,200 $ 65,731 Restricted cash 13,671 8,291 21,962 Trading securities 212,319 276 212,595 Available-for-sale securities, at fair value 2 238 240 Brokerage and other receivables, net 21,109 3,745 24,854 Loans issued 8,754 - 8,754 Deferred tax assets 1,046 (274 ) 772 Fixed assets, net 2,362 209 2,571 Intangible assets, net - 5,531 5,531 Goodwill 1,798 1,490 3,288 Other assets, net 4,494 79 4,573 TOTAL ASSETS $ 330,086 $ 20,785 $ 350,871 LIABILITIES AND STOCKHOLDERS’ EQUITY Securities sold, not yet purchased - at fair value $ 1,135 $ - $ 1,135 Loans received 7,143 - 7,143 Debt securities issued 10,840 382 11,222 Customer liabilities 21,855 8,817 30,672 Trade payables 8,998 15 9,013 Deferred distribution payments 8,534 - 8,534 Securities repurchase agreement obligation 154,775 - 154,775 Deferred income tax liabilities 387 (387 ) - Other liabilities 1,319 57 1,376 TOTAL LIABILITIES 214,986 8,884 223,870 STOCKHOLDERS’ EQUITY Preferred stock - - - Common stock 58 - 58 Additional paid in capital 87,049 13,131 100,180 Retained earnings 35,387 (1,067 ) 34,320 Accumulated other comprehensive loss (7,394 ) (163 ) (7,557 ) TOTAL STOCKHOLDERS’ EQUITY 115,100 11,901 127,001 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 330,086 $ 20,785 $ 350,871 For the three months ended June 30, 2017 STATEMENTS OF OPERATIONS AND STATEMENTS OF OTHER COMPREHENSIVE INCOME (RECAST) As previously reported Recast As recasted Revenue: Fee and commission income $ 2,855 $ 202 $ 3,057 Net gain on trading securities 7,009 122 7,131 Interest income 2,584 63 2,647 Net gain on derivatives 490 - 490 Net gain on foreign exchange operations 617 42 659 TOTAL REVENUE, NET 13,555 429 13,984 Expense: Interest expense 1,987 43 2,030 Fee and commission expense 238 51 289 Operating expense 2,911 752 3,663 Other expense, net 78 (33 ) 45 TOTAL EXPENSE 5,214 813 6,027 NET INCOME BEFORE INCOME TAX 8,341 (384 ) 7,957 Income tax benefit 31 2 33 NET INCOME $ 8,372 $ (382 ) $ 7,990 OTHER COMPREHENSIVE INCOME Change in unrealized gain on investments available-for-sale, net of tax effect $ - $ (59 ) $ (59 ) Foreign currency translation adjustments, net of tax (1,758 ) (411 ) (2,169 ) COMPREHENSIVE INCOME $ 6,614 $ (852 ) $ 5,762 |
Cash and Cash Equivalents (Tabl
Cash and Cash Equivalents (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Cash and cash equivalents | June 30, 2018 March 31, 2018 (Recast) Securities purchased under reverse repurchase agreements $ 19,514 $ 27,389 Current account with commercial banks 7,616 9,032 Petty cash in bank vault and on hand 5,834 2,712 Current account with Central Depository (Kazakhstan) 4,588 1,280 Current accounts with brokers 3,781 22,749 Current account with National Settlement Depository (Russia) 1,770 1,244 Current account with Central Bank (Russia) 991 980 Accounts with stock exchange 814 214 Current account in clearing organizations 149 131 Total cash and cash equivalents $ 45,057 $ 65,731 |
Securities purchased under agreement to resell | June 30, 2018 Interest rates and remaining contractual maturity of the agreements Average Interest rate Up to 30 days 30-90 days Total Securities purchased under reverse repurchase agreements Corporate equity 14.88 % 9,156 9,656 18,812 Corporate debt 15.00 % 702 - 702 Total $ 9,858 $ 9,656 $ 19,514 March 31, 2018 (Recast) Interest rates and remaining contractual maturity of the agreements Average Interest rate Up to 30 days 30-90 days Total Securities purchased under reverse repurchase agreements Corporate equity 14.99 % $ 11,095 $ 15,572 $ 26,667 Corporate debt 14.96 % 521 201 722 Total $ 11,616 $ 15,773 $ 27,389 |
Restricted Cash (Tables)
Restricted Cash (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Restricted Cash [Abstract] | |
Schedule of restricted cash | June 30, 2018 March 31, 2018 (Recast) Brokerage customers’ cash $ 15,439 $ 12,963 Deferred distribution payments 8,534 8,534 Guaranty deposits 640 350 Reserve with Central Bank of Russia 189 115 Total restricted cash $ 24,802 $ 21,962 |
Trading Securities (Tables)
Trading Securities (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Debt Securities, Trading, and Equity Securities, FV-NI [Abstract] | |
Schedule of trading securities | June 30, 2018 March 31, 2018 (Recast) Equity securities $ 146,487 $ 177,339 Debt securities 37,615 34,986 Mutual investment funds 248 270 Total trading securities $ 184,350 $ 212,595 |
Assets and liabilities at fair value on a recurring basis | Fair Value Measurements at June 30, 2018 using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant unobservable units June 30, 2018 (Level 1) (Level 2) (Level 3) Equity securities $ 146,487 $ 146,487 $ - $ - Debt securities 37,615 37,615 - - Mutual investment funds 248 248 - - Total trading securities $ 184,350 $ 184,350 $ - $ - Fair Value Measurements at March 31, 2018 (Recast) using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant unobservable units March 31, 2018 (Recast) (Level 1) (Level 2) (Level 3) Equity securities $ 177,339 $ 177,339 $ - $ - Debt securities 34,986 34,986 - - Mutual investment funds 270 270 - - Total trading securities $ 212,595 $ 212,595 $ - $ - |
Loans Issued (Tables)
Loans Issued (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Loans and Leases Receivable Disclosure [Abstract] | |
Loans issued | Loans issued as of June 30, 2018, consisted of the following: Amount Outstanding Due Dates Average Interest Rate Fair Value of Collateral Loan Currency Collateralized brokerage loans $ 4,720 Jan. 2019 – Feb. 2019 3.00% $ 4,479 USD Uncollateralized brokerage loan $ 11,496 Sep. 2018 3.00% - KZT Bank customer loans $ 541 Nov. 2018- Feb. 2028 12.59% - RUB Loans issued as of March 31, 2018, consisted of the following: Amount Outstanding Due Dates Average Interest Rate Fair Value of Collateral Loan Currency Collateralized brokerage loans $ 5,371 Jan. 2019 – Feb. 2019 3.00% $ 6,992 USD Uncollateralized brokerage loan $ 2,832 Jan. 2019 – Mar. 2019 0.00% - KZT Bank customer loans $ 551 Nov. 2018- Feb. 2028 12.32% - RUB |
Deferred Tax Assets (Tables)
Deferred Tax Assets (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Deferred Tax Assets, Net [Abstract] | |
Deferred tax assets and liabilities | June 30, 2018 March 31, 2018 (Recast) Deferred tax assets: Tax losses carryforward $ 3,283 $ 3,050 GILTI losses 404 - Accrued liabilities 34 49 Revaluation on trading securities 151 88 Stock compensation expenses 718 405 Valuation allowance (3,736 ) (2,433 ) Deferred tax assets 854 1,159 Deferred tax liabilities: Revaluation on trading securities 42 387 Deferred tax liabilities 42 387 Net deferred tax assets $ 812 $ 772 |
Loans Received (Tables)
Loans Received (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Loans Receivable, Net [Abstract] | |
Schedule of loans received | Borrower Lender June 30, 2018 March 31, 2018 Interest rate Term Maturity date JSC Freedom Finance Bank $ 9,049 $ 7,044 7 % 1 year 2/5/2019 Freedom Holding Corp. Non-Bank 4,834 - 3 % 3 months 9/30/2018 FFINEU Investments Limited Non-Bank 94 99 1 % 1 year 12/11/2018 Total $ 13,977 $ 7,143 |
Debt Securities Issued (Tables)
Debt Securities Issued (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Debt Securities [Abstract] | |
Debt securities issued | June 30, 2018 March 31, 2018 (Recast) Debt securities issued denominated in USD $ 10,605 $ 7,006 Debt securities issued denominated in KZT 9,253 4,025 Accrued interest 111 191 Total $ 19,969 $ 11,222 |
Customer Liabilities (Tables)
Customer Liabilities (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Contract with Customer, Liability [Abstract] | |
Customer liabilities | June 30, 2018 March 31, 2018 (Recast) Brokerage customers $ 21,927 $ 21,367 Banking customers 18,475 9,305 Total $ 40,402 $ 30,672 |
Securities Repurchase Agreeme37
Securities Repurchase Agreement Obligation (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Securities Sold under Agreements to Repurchase [Abstract] | |
Securities under repurchase agreement obligations | June 30, 2018 Interest rates and remaining contractual maturity of the agreements Average interest rate Up to 30 days 30-90 days Over 90 days Total Securities sold under repurchase agreements Corporate equity 12.26 % $ 86,961 $ 906 $ 6,532 $ 94,399 Corporate debt 6.83 % 9,896 - - 9,896 Non-US sovereign debt 8.41 % 10,277 - - 10,277 Total securities sold under repurchase agreements $ 107,134 $ 906 $ 6,532 $ 114,572 March 31, 2018 (Recast) Interest rate and remaining contractual maturity of the agreements Average interest rate Overnight and continuous Up to 30 days 30-90 days Total Securities sold under repurchase agreements Corporate equity 12.04 % $ 109,821 $ 8,961 $ 7,148 $ 125,930 Corporate debt 10.64 % 24,257 2,023 - 26,280 Non-US sovereign debt 8.54 % 2,565 - - 2,565 Total securities sold under repurchase agreements $ 136,643 $ 10,984 $ 7,148 $ 154,775 |
Stock based compensation (Table
Stock based compensation (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Share-based Compensation [Abstract] | |
Assumptions used | Vesting Period (years) 3 Volatility 165.33% Risk-free rate 1.66% |
Summary of stock option activity | Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (In Years) Aggregate Intrinsic Value Outstanding, beginning of year $ 360,000 $ 1.98 9.27 $ 1,753 Granted - - - - Exercised - - - - Forfeited/cancelled/expired - - - - Outstanding, at June 30, 2018 $ 360,000 $ 1.98 9.27 $ 1,879 Exercisable at June 30, 2018 $ - $ - - $ - |
Resricted stock outstanding | Shares Weighted Average Fair Value Outstanding, beginning of year $ 3,900,000 $ 8,190 Granted - Vested - - Forfeited/cancelled/expired - - Outstanding, at June 30, 2018 $ 3,900,000 $ 8,190 |
Reverse Stock Split (Tables)
Reverse Stock Split (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Reverse Stock Split | |
Stock split effect | For the three months ended June 30, 2018 For the three months ended June 30, 2017 (Recast) Basic and diluted net income per common share: Net income/(loss) $ (6,883 ) $ 7,990 Net income/(loss) per common share - basic (in US dollars) $ (0.12 ) $ 0.71 Net income/(loss) per common share - diluted (in US dollars) $ (0.12 ) $ 0.71 Shares used in the calculation of net income per common share: Basic 58,033,212 11,306,084 Diluted 58,191,542 11,306,084 |
Commitments and Contingent Li40
Commitments and Contingent Liabilities (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Contractual obligations Total Less than 1 year 2-3 years Office leases(1) $ 8,609 $ 5,568 $ 3,041 TOTAL $ 8,609 $ 5,568 $ 3,041 (1) The Company has number of lease agreements for office spaces in different locations. In general, all agreements are made for a one-year period with extension or termination provisions, except three lease agreements with longer lease terms. |
Revision of Financial Stateme41
Revision of Financial Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Mar. 31, 2018 | ||
ASSETS | ||||
Cash and cash equivalents | $ 45,057 | |||
Restricted cash | 24,802 | |||
Trading securities | 184,350 | |||
Available-for-sale securities, at fair value | 2 | |||
Brokerage and other receivables, net | 42,245 | |||
Loans issued | 16,757 | |||
Deferred tax assets | 812 | |||
Fixed assets, net | 2,471 | |||
Intangible assets, net | 4,807 | |||
Goodwill | 3,103 | |||
Other assets, net | 4,823 | |||
TOTAL ASSETS | 329,229 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Securities sold, not yet purchased - at fair value | 1,756 | |||
Loans received | 13,977 | |||
Debt securities issued | 19,969 | |||
Customer liabilities | 40,402 | |||
Trade payables | 15,742 | |||
Deferred distribution payments | 8,534 | |||
Securities repurchase agreement obligation | 114,572 | |||
Other liabilities | 2,012 | |||
TOTAL LIABILITIES | 216,964 | |||
STOCKHOLDERS' EQUITY | ||||
Preferred stock | 0 | |||
Common stock | 58 | |||
Additional paid in capital | 99,003 | |||
Retained earnings | 27,437 | |||
Accumulated other comprehensive loss | (14,233) | |||
TOTAL STOCKHOLDERS' EQUITY | 112,265 | |||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 329,229 | |||
Revenue: | ||||
Fee and commission income | 5,428 | |||
Net gain/(loss) on trading securities | (3,288) | |||
Interest income | 7,372 | |||
Net gain on derivatives | 0 | |||
Net gain/(loss) on foreign exchange operations | (2,110) | |||
TOTAL REVENUE, NET | 7,402 | |||
Expense: | ||||
Interest expense | 4,614 | |||
Fee and commission expense | 764 | |||
Operating expense | 9,111 | |||
Other expense/(income), net | (54) | |||
TOTAL EXPENSE | 14,435 | |||
NET INCOME BEFORE INCOME TAX | (7,033) | |||
Income tax benefit | 150 | |||
NET INCOME | (6,883) | |||
OTHER COMPREHENSIVE INCOME | ||||
Change in unrealized gain on investments available-for-sale, net of tax effect | 0 | |||
Foreign currency translation adjustments, net of tax | (6,698) | |||
COMPREHENSIVE INCOME | $ (13,559) | |||
As Previously Reported | ||||
ASSETS | ||||
Cash and cash equivalents | $ 64,531 | |||
Restricted cash | 13,671 | |||
Trading securities | 212,319 | |||
Available-for-sale securities, at fair value | 2 | |||
Brokerage and other receivables, net | 21,109 | |||
Loans issued | 8,754 | |||
Deferred tax assets | 1,046 | |||
Fixed assets, net | 2,362 | |||
Intangible assets, net | 0 | |||
Goodwill | 1,798 | |||
Other assets, net | 4,494 | |||
TOTAL ASSETS | 330,086 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Securities sold, not yet purchased - at fair value | 1,135 | |||
Loans received | 7,143 | |||
Debt securities issued | 10,840 | |||
Customer liabilities | 21,855 | |||
Trade payables | 8,998 | |||
Deferred distribution payments | 8,534 | |||
Securities repurchase agreement obligation | 154,775 | |||
Deferred income tax liabilities | 387 | |||
Other liabilities | 1,319 | |||
TOTAL LIABILITIES | 214,986 | |||
STOCKHOLDERS' EQUITY | ||||
Preferred stock | 0 | |||
Common stock | 58 | |||
Additional paid in capital | 87,049 | |||
Retained earnings | 35,387 | |||
Accumulated other comprehensive loss | (7,394) | |||
TOTAL STOCKHOLDERS' EQUITY | 115,100 | |||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 330,086 | |||
Revenue: | ||||
Fee and commission income | $ 2,855 | |||
Net gain/(loss) on trading securities | 7,009 | |||
Interest income | 2,584 | |||
Net gain on derivatives | 490 | |||
Net gain/(loss) on foreign exchange operations | 617 | |||
TOTAL REVENUE, NET | 13,555 | |||
Expense: | ||||
Interest expense | 1,987 | |||
Fee and commission expense | 238 | |||
Operating expense | 2,911 | |||
Other expense/(income), net | 78 | |||
TOTAL EXPENSE | 5,214 | |||
NET INCOME BEFORE INCOME TAX | 8,341 | |||
Income tax benefit | 31 | |||
NET INCOME | 8,372 | |||
OTHER COMPREHENSIVE INCOME | ||||
Change in unrealized gain on investments available-for-sale, net of tax effect | 0 | |||
Foreign currency translation adjustments, net of tax | (1,758) | |||
COMPREHENSIVE INCOME | 6,614 | |||
Revision | ||||
ASSETS | ||||
Cash and cash equivalents | 1,200 | |||
Restricted cash | 8,291 | |||
Trading securities | 276 | |||
Available-for-sale securities, at fair value | 238 | |||
Brokerage and other receivables, net | 3,745 | |||
Loans issued | 0 | |||
Deferred tax assets | (274) | |||
Fixed assets, net | 209 | |||
Intangible assets, net | 5,531 | |||
Goodwill | 1,490 | |||
Other assets, net | 79 | |||
TOTAL ASSETS | 20,785 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Securities sold, not yet purchased - at fair value | 0 | |||
Loans received | 0 | |||
Debt securities issued | 382 | |||
Customer liabilities | 8,817 | |||
Trade payables | 15 | |||
Deferred distribution payments | 0 | |||
Securities repurchase agreement obligation | 0 | |||
Deferred income tax liabilities | (387) | |||
Other liabilities | 57 | |||
TOTAL LIABILITIES | 8,884 | |||
STOCKHOLDERS' EQUITY | ||||
Preferred stock | 0 | |||
Common stock | 0 | |||
Additional paid in capital | 13,131 | |||
Retained earnings | (1,067) | |||
Accumulated other comprehensive loss | (163) | |||
TOTAL STOCKHOLDERS' EQUITY | 11,901 | |||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 20,785 | |||
Revenue: | ||||
Fee and commission income | 202 | |||
Net gain/(loss) on trading securities | 122 | |||
Interest income | 63 | |||
Net gain on derivatives | 0 | |||
Net gain/(loss) on foreign exchange operations | 42 | |||
TOTAL REVENUE, NET | 429 | |||
Expense: | ||||
Interest expense | 43 | |||
Fee and commission expense | 51 | |||
Operating expense | 752 | |||
Other expense/(income), net | (33) | |||
TOTAL EXPENSE | 813 | |||
NET INCOME BEFORE INCOME TAX | (384) | |||
Income tax benefit | 2 | |||
NET INCOME | (382) | |||
OTHER COMPREHENSIVE INCOME | ||||
Change in unrealized gain on investments available-for-sale, net of tax effect | (59) | |||
Foreign currency translation adjustments, net of tax | (411) | |||
COMPREHENSIVE INCOME | (852) | |||
(Recast) | ||||
ASSETS | ||||
Cash and cash equivalents | [1] | 65,731 | ||
Restricted cash | [1] | 21,962 | ||
Trading securities | [1] | 212,595 | ||
Available-for-sale securities, at fair value | [1] | 240 | ||
Brokerage and other receivables, net | [1] | 24,854 | ||
Loans issued | [1] | 8,754 | ||
Deferred tax assets | [1] | 772 | ||
Fixed assets, net | [1] | 2,571 | ||
Intangible assets, net | [1] | 5,531 | ||
Goodwill | [1] | 3,288 | ||
Other assets, net | [1] | 4,573 | ||
TOTAL ASSETS | [1] | 350,871 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Securities sold, not yet purchased - at fair value | [1] | 1,135 | ||
Loans received | [1] | 7,143 | ||
Debt securities issued | [1] | 11,222 | ||
Customer liabilities | [1] | 30,672 | ||
Trade payables | [1] | 9,013 | ||
Deferred distribution payments | [1] | 8,534 | ||
Securities repurchase agreement obligation | [1] | 154,775 | ||
Deferred income tax liabilities | [1] | 0 | ||
Other liabilities | [1] | 1,376 | ||
TOTAL LIABILITIES | [1] | 223,870 | ||
STOCKHOLDERS' EQUITY | ||||
Preferred stock | [1] | 0 | ||
Common stock | [1] | 58 | ||
Additional paid in capital | [1] | 100,180 | ||
Retained earnings | [1] | 34,320 | ||
Accumulated other comprehensive loss | [1] | (7,557) | ||
TOTAL STOCKHOLDERS' EQUITY | [1] | 127,001 | ||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | [1] | $ 350,871 | ||
Revenue: | ||||
Fee and commission income | [1] | 3,057 | ||
Net gain/(loss) on trading securities | [1] | 7,131 | ||
Interest income | [1] | 2,647 | ||
Net gain on derivatives | [1] | 490 | ||
Net gain/(loss) on foreign exchange operations | [1] | 659 | ||
TOTAL REVENUE, NET | [1] | 13,984 | ||
Expense: | ||||
Interest expense | [1] | 2,030 | ||
Fee and commission expense | [1] | 289 | ||
Operating expense | [1] | 3,663 | ||
Other expense/(income), net | [1] | 45 | ||
TOTAL EXPENSE | [1] | 6,027 | ||
NET INCOME BEFORE INCOME TAX | [1] | 7,957 | ||
Income tax benefit | [1] | 33 | ||
NET INCOME | [1] | 7,990 | ||
OTHER COMPREHENSIVE INCOME | ||||
Change in unrealized gain on investments available-for-sale, net of tax effect | [1] | (59) | ||
Foreign currency translation adjustments, net of tax | [1] | (2,169) | ||
COMPREHENSIVE INCOME | [1] | $ 5,762 | ||
[1] | See Notes 2 and 3 for information regarding recast amounts and basis of financial statement presentation. |
Cash and Cash Equivalents (Deta
Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Mar. 31, 2018 | |
Total cash and cash equivalents | $ 45,057 | ||
(Recast) | |||
Total cash and cash equivalents | [1] | $ 65,731 | |
Securities Purchased Under Reverse Repurchase Agreements | |||
Total cash and cash equivalents | 19,514 | ||
Securities Purchased Under Reverse Repurchase Agreements | (Recast) | |||
Total cash and cash equivalents | 27,389 | ||
Current account with commercial banks | |||
Total cash and cash equivalents | 7,616 | ||
Current account with commercial banks | (Recast) | |||
Total cash and cash equivalents | 9,032 | ||
Petty cash in bank vault and on hand | |||
Total cash and cash equivalents | 5,834 | ||
Petty cash in bank vault and on hand | (Recast) | |||
Total cash and cash equivalents | 2,712 | ||
Current account with Central Depository (Kazakhstan) | |||
Total cash and cash equivalents | 4,588 | ||
Current account with Central Depository (Kazakhstan) | (Recast) | |||
Total cash and cash equivalents | 1,280 | ||
Current accounts with brokers | |||
Total cash and cash equivalents | 3,781 | ||
Current accounts with brokers | (Recast) | |||
Total cash and cash equivalents | 22,749 | ||
Current account with National Settlement Depository (Russia) | |||
Total cash and cash equivalents | 1,770 | ||
Current account with National Settlement Depository (Russia) | (Recast) | |||
Total cash and cash equivalents | 1,244 | ||
Current account with Central Bank (Russia) | |||
Total cash and cash equivalents | 991 | ||
Current account with Central Bank (Russia) | (Recast) | |||
Total cash and cash equivalents | 980 | ||
Accounts with stock exchange | |||
Total cash and cash equivalents | 814 | ||
Accounts with stock exchange | (Recast) | |||
Total cash and cash equivalents | 214 | ||
Current account in clearing organizations | |||
Total cash and cash equivalents | $ 149 | ||
Current account in clearing organizations | (Recast) | |||
Total cash and cash equivalents | $ 131 | ||
[1] | See Notes 2 and 3 for information regarding recast amounts and basis of financial statement presentation. |
Cash and Cash Equivalents (De43
Cash and Cash Equivalents (Details 1) - USD ($) $ in Thousands | Jun. 30, 2018 | Mar. 31, 2018 |
Remaining contractual maturity: up to 30 days | $ 9,858 | |
Remaining contractual maturity: 30 - 90 days | 9,656 | |
Total contractual maturity | $ 19,514 | |
(Recast) | ||
Remaining contractual maturity: up to 30 days | $ 11,616 | |
Remaining contractual maturity: 30 - 90 days | 15,773 | |
Total contractual maturity | $ 27,389 | |
Corporate equity | ||
Average interest rate | 14.88% | |
Remaining contractual maturity: up to 30 days | $ 9,156 | |
Remaining contractual maturity: 30 - 90 days | 9,656 | |
Total contractual maturity | $ 18,812 | |
Corporate equity | (Recast) | ||
Average interest rate | 14.99% | |
Remaining contractual maturity: up to 30 days | $ 11,095 | |
Remaining contractual maturity: 30 - 90 days | 15,572 | |
Total contractual maturity | $ 26,667 | |
Corporate debt | ||
Average interest rate | 15.00% | |
Remaining contractual maturity: up to 30 days | $ 702 | |
Remaining contractual maturity: 30 - 90 days | 0 | |
Total contractual maturity | $ 702 | |
Corporate debt | (Recast) | ||
Average interest rate | 14.96% | |
Remaining contractual maturity: up to 30 days | $ 521 | |
Remaining contractual maturity: 30 - 90 days | 201 | |
Total contractual maturity | $ 722 |
Restricted Cash (Details)
Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Mar. 31, 2018 | |
Restricted cash | $ 24,802 | ||
(Recast) | |||
Restricted cash | [1] | $ 21,962 | |
Brokerage customers cash | |||
Restricted cash | 15,439 | ||
Brokerage customers cash | (Recast) | |||
Restricted cash | 12,963 | ||
Deferred distribution payments | |||
Restricted cash | 8,534 | ||
Deferred distribution payments | (Recast) | |||
Restricted cash | 8,534 | ||
Guaranty deposits | |||
Restricted cash | 640 | ||
Guaranty deposits | (Recast) | |||
Restricted cash | 350 | ||
Guaranty deposits | Reserve with Central Bank of Russia | |||
Restricted cash | $ 115 | ||
Reserve with Central Bank of Russia | |||
Restricted cash | $ 189 | ||
[1] | See Notes 2 and 3 for information regarding recast amounts and basis of financial statement presentation. |
Trading Securities (Details)
Trading Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Mar. 31, 2018 | |
Trading securities | $ 184,350 | ||
(Recast) | |||
Trading securities | [1] | $ 212,595 | |
Equity securities | |||
Trading securities | 146,487 | ||
Equity securities | (Recast) | |||
Trading securities | 177,339 | ||
Debt securities | |||
Trading securities | 37,615 | ||
Debt securities | (Recast) | |||
Trading securities | 34,986 | ||
Mutual investment funds | |||
Trading securities | $ 248 | ||
Mutual investment funds | (Recast) | |||
Trading securities | $ 270 | ||
[1] | See Notes 2 and 3 for information regarding recast amounts and basis of financial statement presentation. |
Trading Securities (Details 1)
Trading Securities (Details 1) - USD ($) $ in Thousands | Jun. 30, 2018 | Mar. 31, 2018 | |
Trading securities | $ 184,350 | ||
(Recast) | |||
Trading securities | [1] | $ 212,595 | |
Level 1 | |||
Trading securities | 184,350 | ||
Level 1 | (Recast) | |||
Trading securities | 212,595 | ||
Level 2 | |||
Trading securities | 0 | ||
Level 2 | (Recast) | |||
Trading securities | 0 | ||
Level 3 | |||
Trading securities | 0 | ||
Level 3 | (Recast) | |||
Trading securities | 0 | ||
Equity securities | |||
Trading securities | 146,487 | ||
Equity securities | (Recast) | |||
Trading securities | 177,339 | ||
Equity securities | Level 1 | |||
Trading securities | 146,487 | ||
Equity securities | Level 1 | (Recast) | |||
Trading securities | 177,339 | ||
Equity securities | Level 2 | |||
Trading securities | 0 | ||
Equity securities | Level 2 | (Recast) | |||
Trading securities | 0 | ||
Equity securities | Level 3 | |||
Trading securities | 0 | ||
Equity securities | Level 3 | (Recast) | |||
Trading securities | 0 | ||
Debt securities | |||
Trading securities | 37,615 | ||
Debt securities | (Recast) | |||
Trading securities | 34,986 | ||
Debt securities | Level 1 | |||
Trading securities | 37,615 | ||
Debt securities | Level 1 | (Recast) | |||
Trading securities | 34,986 | ||
Debt securities | Level 2 | |||
Trading securities | 0 | ||
Debt securities | Level 2 | (Recast) | |||
Trading securities | 0 | ||
Debt securities | Level 3 | |||
Trading securities | 0 | ||
Debt securities | Level 3 | (Recast) | |||
Trading securities | 0 | ||
Mutual investment funds | |||
Trading securities | 248 | ||
Mutual investment funds | (Recast) | |||
Trading securities | 270 | ||
Mutual investment funds | Level 1 | |||
Trading securities | 248 | ||
Mutual investment funds | Level 1 | (Recast) | |||
Trading securities | 270 | ||
Mutual investment funds | Level 2 | |||
Trading securities | 0 | ||
Mutual investment funds | Level 2 | (Recast) | |||
Trading securities | 0 | ||
Mutual investment funds | Level 3 | |||
Trading securities | $ 0 | ||
Mutual investment funds | Level 3 | (Recast) | |||
Trading securities | $ 0 | ||
[1] | See Notes 2 and 3 for information regarding recast amounts and basis of financial statement presentation. |
Loans Issued (Details)
Loans Issued (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | |
Loans issued | $ 16,757 | ||
Collateralized brokerage loans | |||
Loans issued | $ 4,720 | $ 5,371 | |
Due dates | Jan. 2019 - Feb. 2019 | Jan. 2019 - Feb. 2019 | |
Average interest rate | 3.00% | 3.00% | |
Fair value of collateral | $ 4,479 | $ 6,992 | |
Uncollateralized brokerage loan | |||
Loans issued | $ 11,496 | $ 2,832 | |
Due dates | Sep. 2018 | Jan. 2019 - Mar. 2019 | |
Average interest rate | 3.00% | 0.00% | |
Fair value of collateral | $ 0 | $ 0 | |
Bank customer loans | |||
Loans issued | $ 541 | $ 551 | |
Due dates | Nov. 2018 - Feb. 2028 | Nov. 2018 - Feb. 2028 | |
Average interest rate | 12.59% | 12.32% | |
Fair value of collateral | $ 0 | $ 0 |
Deferred Tax Assets (Details)
Deferred Tax Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Mar. 31, 2018 |
Deferred tax asset: | ||
Tax losses carryforward | $ 3,283 | |
GILTI losses | 404 | |
Accrued liabilities | 34 | |
Revaluation on trading securities | 151 | |
Stock compensation expenses | 718 | |
Valuation allowance | (3,736) | |
Deferred tax assets, net | 854 | |
Deferred tax liabilities: | ||
Revaluation on trading securities | 42 | |
Deferred tax liabilities | 42 | |
Net deferred tax assets | $ 812 | |
(Recast) | ||
Deferred tax asset: | ||
Tax losses carryforward | $ 3,050 | |
GILTI losses | 0 | |
Accrued liabilities | 49 | |
Revaluation on trading securities | 88 | |
Stock compensation expenses | 405 | |
Valuation allowance | (2,433) | |
Deferred tax assets, net | 1,159 | |
Deferred tax liabilities: | ||
Revaluation on trading securities | 387 | |
Deferred tax liabilities | 387 | |
Net deferred tax assets | $ 772 |
Loans Received (Details)
Loans Received (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Mar. 31, 2018 | ||
Loans received | $ 13,977 | ||
(Recast) | |||
Loans received | [1] | $ 7,143 | |
JSC Freedom Finance | |||
Lender | Bank | Bank | |
Loans received | $ 9,049 | $ 7,044 | |
Interest rate | 7.00% | 7.00% | |
Term | 1 year | 1 year | |
Maturity date | Feb. 5, 2019 | ||
Freedom Holding Corp. | |||
Lender | Non-Bank | Non-Bank | |
Loans received | $ 4,834 | $ 0 | |
Interest rate | 3.00% | 3.00% | |
Term | 3 months | 3 months | |
Maturity date | Sep. 30, 2018 | ||
FFINEU Investments Limited | |||
Lender | Non-Bank | Non-Bank | |
Loans received | $ 94 | $ 99 | |
Interest rate | 1.00% | 1.00% | |
Term | 1 year | 1 year | |
Maturity date | Dec. 11, 2018 | ||
[1] | See Notes 2 and 3 for information regarding recast amounts and basis of financial statement presentation. |
Debt Securities Issued (Details
Debt Securities Issued (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Mar. 31, 2018 | |
Debt securities issued in USD | $ 10,605 | ||
Debt securities issued in KZT | 9,253 | ||
Accrued interest | 111 | ||
Total | $ 19,969 | ||
(Recast) | |||
Debt securities issued in USD | $ 7,006 | ||
Debt securities issued in KZT | 4,025 | ||
Accrued interest | 191 | ||
Total | [1] | $ 11,222 | |
[1] | See Notes 2 and 3 for information regarding recast amounts and basis of financial statement presentation. |
Customer Liabilities (Details)
Customer Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Mar. 31, 2018 | |
Customer liabilities | $ 40,402 | ||
(Recast) | |||
Customer liabilities | [1] | $ 30,672 | |
Brokerage customers | |||
Customer liabilities | 21,927 | ||
Brokerage customers | (Recast) | |||
Customer liabilities | 21,367 | ||
Banking customers | |||
Customer liabilities | $ 18,475 | ||
Banking customers | (Recast) | |||
Customer liabilities | $ 9,305 | ||
[1] | See Notes 2 and 3 for information regarding recast amounts and basis of financial statement presentation. |
Securities Repurchase Agreeme52
Securities Repurchase Agreement Obligation (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Mar. 31, 2018 |
Remaining contractual maturity: overnight and continuous | $ 107,134 | |
Remaining contractual maturity: up to 30 days | 906 | |
Remaining contractual maturity: 30 - 90 days | 6,532 | |
Total contractual maturity | $ 114,572 | |
(Recast) | ||
Remaining contractual maturity: overnight and continuous | $ 136,643 | |
Remaining contractual maturity: up to 30 days | 10,984 | |
Remaining contractual maturity: 30 - 90 days | 7,148 | |
Total contractual maturity | $ 154,775 | |
Corporate equity | ||
Average interest rate | 12.26% | |
Remaining contractual maturity: overnight and continuous | $ 86,961 | |
Remaining contractual maturity: up to 30 days | 906 | |
Remaining contractual maturity: 30 - 90 days | 6,532 | |
Total contractual maturity | $ 94,399 | |
Corporate equity | (Recast) | ||
Average interest rate | 12.04% | |
Remaining contractual maturity: overnight and continuous | $ 109,821 | |
Remaining contractual maturity: up to 30 days | 8,961 | |
Remaining contractual maturity: 30 - 90 days | 7,148 | |
Total contractual maturity | $ 125,930 | |
Corporate debt | ||
Average interest rate | 6.83% | |
Remaining contractual maturity: overnight and continuous | $ 9,896 | |
Remaining contractual maturity: up to 30 days | 0 | |
Remaining contractual maturity: 30 - 90 days | 0 | |
Total contractual maturity | $ 9,896 | |
Corporate debt | (Recast) | ||
Average interest rate | 10.64% | |
Remaining contractual maturity: overnight and continuous | $ 24,257 | |
Remaining contractual maturity: up to 30 days | 2,023 | |
Remaining contractual maturity: 30 - 90 days | 0 | |
Total contractual maturity | $ 26,280 | |
Non-US sovereign debt | ||
Average interest rate | 8.41% | |
Remaining contractual maturity: overnight and continuous | $ 10,277 | |
Remaining contractual maturity: up to 30 days | 0 | |
Remaining contractual maturity: 30 - 90 days | 0 | |
Total contractual maturity | $ 10,277 | |
Non-US sovereign debt | (Recast) | ||
Average interest rate | 8.54% | |
Remaining contractual maturity: overnight and continuous | $ 2,565 | |
Remaining contractual maturity: up to 30 days | 0 | |
Remaining contractual maturity: 30 - 90 days | 0 | |
Total contractual maturity | $ 2,565 |
Stock based Compensation (Detai
Stock based Compensation (Details) | 3 Months Ended |
Jun. 30, 2018 | |
Share-based Compensation [Abstract] | |
Vesting period (years) | 3 years |
Volatility | 165.33% |
Risk-free rate | 1.66% |
Stock based compensation (Det54
Stock based compensation (Details 1) $ / shares in Units, $ in Thousands | 3 Months Ended |
Jun. 30, 2018USD ($)$ / sharesshares | |
Options Outstanding, Beginning | shares | 360,000 |
Number of Options Granted | shares | 0 |
Number of Options Exercised | shares | 0 |
Forfeited/cancelled/expired | shares | 0 |
Options Outstanding, Ending | shares | 360,000 |
Options Exercisable, Ending | shares | 0 |
Weighted Average Exercise Price Outstanding, Beginning | $ 1.98 |
Weighted Average Exercise Price Granted | .00 |
Weighted Average Exercise Price Exercised | .00 |
Weighted Average Exercise Price Forfeited/cancelled/expired | .00 |
Weighted Average Exercise Price Outstanding, Ending | 1.98 |
Weighted Average Exercise Price Exercisable, Ending | $ 0 |
Weighted Average Remaining Contractual Life, Options Outstanding, Ending | 9 years 3 months 7 days |
Aggregate Intrinsic Value Options Outstanding, Beginning | $ | $ 1,753 |
Aggregate Intrinsic Value Granted | $ | 0 |
Aggregate Intrinsic Value Exercised | $ | $ 0 |
Aggregate Intrinsic Value Cancelled or Forfeited | $ 0 |
Aggregate Intrinsic Value Options Outstanding, Ending | $ | $ 1,879 |
Aggregate Intrinsic Value Exercisable, Ending | $ | $ 0 |
Restricted Stock [Member] | |
Options Outstanding, Beginning | shares | 3,900,000 |
Number of Options Granted | shares | 0 |
Number of Options Exercised | shares | 0 |
Forfeited/cancelled/expired | shares | 0 |
Options Outstanding, Ending | shares | 3,900,000 |
Weighted Average Fair Value Outstanding, Beginning | $ 8,190 |
Weighted Average Fair Value Granted | 0 |
Weighted Average Fair Value Vested | 0 |
Weighted Average Fair Value Forfeited/cancelled/expired | 0 |
Weighted Average Fair Value Outstanding, Ending | $ 8,190 |
Reverse Stock Split (Details)
Reverse Stock Split (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | ||
Basic and diluted net income per common share: | |||
Net income/(loss) | $ (6,883) | ||
Net income/(loss) per common share - basic | $ (0.12) | ||
Net income/(loss) per common share - diluted | $ (0.12) | ||
Shares used in the calculation of net income per common share: | |||
Basic | 58,033,212 | ||
Diluted | 58,191,542 | ||
(Recast) | |||
Basic and diluted net income per common share: | |||
Net income/(loss) | [1] | $ 7,990 | |
Net income/(loss) per common share - basic | [1] | $ 0.71 | |
Net income/(loss) per common share - diluted | [1] | $ 0.71 | |
Shares used in the calculation of net income per common share: | |||
Basic | [1] | 11,306,084 | |
Diluted | [1] | 11,306,084 | |
[1] | See Notes 2 and 3 for information regarding recast amounts and basis of financial statement presentation. |
Commitments and Contingent Li56
Commitments and Contingent Liabilities (Details) $ in Thousands | Jun. 30, 2018USD ($) | |
Contractual obligations | $ 8,609 | |
Less than 1 year | ||
Contractual obligations | 5,568 | |
2-3 years | ||
Contractual obligations | 3,041 | |
Office Lease | ||
Contractual obligations | 8,609 | [1] |
Office Lease | Less than 1 year | ||
Contractual obligations | 5,568 | [1] |
Office Lease | 2-3 years | ||
Contractual obligations | $ 3,041 | [1] |
[1] | The Company has number of lease agreements for office spaces in different locations. In general, all agreements are made for a one-year period with extension or termination provisions, except three lease agreements with longer lease terms. |
Commitments and Contingent Li57
Commitments and Contingent Liabilities (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Rent expense | $ 1,086 | $ 377 |