Cover
Cover - shares | 3 Months Ended | |
Jun. 30, 2020 | Aug. 10, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | FREEDOM HOLDING CORP. | |
Entity Central Index Key | 0000924805 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Jun. 30, 2020 | |
Entity Filer Category | Accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 | |
Entity Common Stock Shares Outstanding | 58,358,212 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-33034 | |
Entity Incorporation State Country Code | NV | |
Entity Tax Identification Number | 30-0233726 | |
Entity Address Address Line 1 | “Esentai Tower” BC, Floor 7 77/7 Al Farabi Ave | |
Entity Address City Or Town | Almaty | |
Entity Address Country | KZ | |
Entity Address Postal Zip Code | 050040 | |
City Area Code | 801 | |
Local Phone Number | 355-2227 | |
Security 12b Title | Common | |
Trading Symbol | FRHC | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
ASSETS | ||
Cash and cash equivalents | $ 199,303,000 | $ 63,208,000 |
Restricted cash | 639,372,000 | 66,597,000 |
Trading securities | 177,084,000 | 156,544,000 |
Derivative assets | 2,391,000 | 0 |
Available-for-sale securities, at fair value | 1,000 | 6,438,000 |
Brokerage and other receivables, net | 102,522,000 | 113,687,000 |
Loans issued | 9,958,000 | 10,461,000 |
Deferred tax assets | 0 | 570,000 |
Fixed assets, net | 7,553,000 | 6,384,000 |
Intangible assets, net | 3,690,000 | 3,422,000 |
Goodwill | 2,795,000 | 2,607,000 |
Right-of-use asset | 15,527,000 | 14,543,000 |
Other assets, net | 9,360,000 | 9,062,000 |
TOTAL ASSETS | 1,169,556,000 | 453,523,000 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Debt securities issued | 67,584,000 | 72,296,000 |
Customer liabilities | 808,752,000 | 168,432,000 |
Trade payables | 38,879,000 | 8,398,000 |
Deferred distribution payments | 8,534,000 | 8,534,000 |
Securities repurchase agreement obligations | 58,582,000 | 48,204,000 |
Current income tax liability | 4,571,000 | 1,407,000 |
Lease liability | 15,484,000 | 14,384,000 |
Deferred income tax liabilities | 322,000 | 0 |
Other liabilities | 4,306,000 | 2,831,000 |
TOTAL LIABILITIES | 1,007,014,000 | 324,486,000 |
Commitments and Contingent Liabilities | 0 | 0 |
STOCKHOLDERS' EQUITY | ||
Preferred stock - $0.001 par value; 20,000,000 shares authorized, no shares issued or outstanding | 0 | 0 |
Common stock - $0.001 par value; 500,000,000 shares authorized; 58,358,212 shares issued and outstanding as of June 30, 2020 and March 31, 2020, respectively | 58,000 | 58,000 |
Additional paid in capital | 103,415,000 | 102,890,000 |
Retained earnings | 90,188,000 | 66,335,000 |
Accumulated other comprehensive loss | (29,270,000) | (37,974,000) |
TOTAL EQUITY ATTRIBUTABLE TO THE COMPANY | 164,391,000 | 131,309,000 |
Non-controlling interest | (1,849,000) | (2,272,000) |
TOTAL STOCKHOLDERS' EQUITY | 162,542,000 | 129,037,000 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 1,169,556,000 | $ 453,523,000 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2020 | Mar. 31, 2020 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, shares par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, shares par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 58,358,212 |
Common stock, shares issued | 58,358,212 | 58,358,212 |
Common stock, shares outstanding | 58,358,212 | 58,358,212 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND STATEMENTS OF OTHER COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue: | ||
Fee and commission income | $ 43,339 | $ 22,592 |
Net gain on trading securities | 9,084 | 2,562 |
Interest income | 4,249 | 4,131 |
Net loss on foreign exchange operations | (248) | (36) |
Net loss on derivative | (9) | 0 |
TOTAL REVENUE, NET | 56,415 | 29,249 |
Expense: | ||
Interest expense | 3,744 | 3,163 |
Fee and commission expense | 9,769 | 4,031 |
Operating expense | 14,426 | 13,130 |
Recovery of impairment losses | (378) | (1,073) |
Other (income)/expense, net | (27) | 308 |
TOTAL EXPENSE | 27,534 | 19,559 |
NET INCOME BEFORE INCOME TAX | 28,881 | 9,690 |
Income tax expense | (4,605) | (1,476) |
NET INCOME | 24,276 | 8,214 |
Less: Net income attributable to noncontrolling interest in subsidiary | 423 | 0 |
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | 23,853 | 8,214 |
OTHER COMPREHENSIVE INCOME | ||
Reclassification adjustment relating to available-for-sale investments disposed of in the period, net of tax effect | 71 | 0 |
Foreign currency translation adjustments, net of tax effect | 8,633 | 643 |
COMPREHENSIVE INCOME BEFORE NONCONTROLLING INTERESTS | 32,980 | 8,857 |
Less: Comprehensive income attributable to noncontrolling interest in subsidiary | 423 | 0 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ 32,557 | $ 8,857 |
BASIC NET INCOME PER COMMON SHARE (In US Dollars) | $ 0.42 | $ 0.14 |
DILUTED NET INCOME PER COMMON SHARE (In US Dollars) | $ 0.42 | $ 0.14 |
Weighted average number of shares (basic) | 58,358,212 | 58,052,656 |
Weighted average number of shares (diluted) | 58,455,675 | 58,249,344 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash Flows From Operating Activities | ||
Net income | $ 24,276,000 | $ 8,214,000 |
Adjustments to reconcile net income from operating activities: | ||
Depreciation and amortization | 700,000 | 530,000 |
Noncash lease expense | 1,606,000 | 1,483,000 |
Change in deferred taxes | 943,000 | 466,000 |
Stock compensation expense | 525,000 | 773,000 |
Unrealized loss on trading securities | 2,206,000 | 2,479,000 |
Net gain on derivatives | (2,312,000) | 0 |
Net change in accrued interest | (1,230,000) | (173,000) |
Recoveries for receivables | (378,000) | (1,073,000) |
Changes in operating assets and liabilities: | ||
Lease liabilities | (1,482,000) | (1,470,000) |
Trading securities | (7,517,000) | 5,555,000 |
Brokerage and other receivables | 16,844,000 | 34,222,000 |
Loans issued | 632,000 | (63,000) |
Other assets | 128,000 | (5,540,000) |
Customer liabilities | 621,166,000 | 88,453,000 |
Current income tax liability | 3,130,000 | 844,000 |
Trade payables | 30,321,000 | (22,055,000) |
Other liabilities | 1,168,000 | 921,000 |
Net cash flows from operating activities | 690,726,000 | 113,566,000 |
Cash Flows From Investing Activities | ||
Purchase of fixed assets | (1,488,000) | (721,000) |
Proceeds from sale of fixed assets | 214,000 | 7,000 |
Proceeds from sale of available-for-sale securities, at fair value | 6,508,000 | 0 |
Net cash flows from/(used in) investing activities | 5,234,000 | (714,000) |
Cash Flows From Financing Activities | ||
Proceeds from/(repurchase of) securities repurchase agreement obligations | 5,275,000 | (16,919,000) |
Proceeds from issuance of debt securities | 1,045,000 | 1,194,000 |
Repurchase of debt securities | (7,300,000) | (9,000) |
Repayment from loans received | 0 | (3,916,000) |
Exercise of options | 0 | 99,000 |
Net cash flows used in financing activities | (980,000) | (19,551,000) |
Effect of changes in foreign exchange rates on cash and cash equivalents | 13,890,000 | 2,616,000 |
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 708,870,000 | 95,917,000 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD | 129,805,000 | 88,420,000 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | 838,675,000 | 184,337,000 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 2,602,000 | 2,942,000 |
Income tax paid | 79,000 | 66,000 |
Supplemental non-cash disclosures: | ||
Operating lease right-of-use assets obtained in exchange for operating lease obligations on adoption of new lease standard | 0 | 16,979,000 |
Operating lease right-of-use assets obtained/disposed of in exchange for operating lease obligations during the period, net | 658,000 | 0 |
Cash and cash equivalents | 199,303,000 | 141,900,000 |
Restricted cash | 639,372,000 | 42,437,000 |
Total cash, cash and cash equivalents and restricted cash shown in the statement of cash flows | $ 838,675,000 | $ 184,337,000 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated other comprehensive loss | Noncontrolling Interest |
Balance, shares at Mar. 31, 2019 | 58,043,212 | |||||
Balance, amount at Mar. 31, 2019 | $ 117,597,000 | $ 58,000 | $ 99,093,000 | $ 41,498,000 | $ (23,052,000) | $ 0 |
Exercise of options, shares | 50,000 | |||||
Exercise of options, amount | 99,000 | $ 0 | 99,000 | 0 | 0 | 0 |
Stock based compensation | 773,000 | 0 | 773,000 | 0 | 0 | 0 |
Translation difference | 643,000 | 0 | 0 | 0 | 643,000 | 0 |
Net income | 8,214,000 | $ 0 | 0 | 8,214,000 | 0 | 0 |
Balance, shares at Jun. 30, 2019 | 58,093,212 | |||||
Balance, amount at Jun. 30, 2019 | 127,326,000 | $ 58,000 | 99,965,000 | 49,712,000 | (22,409,000) | 0 |
Balance, shares at Mar. 31, 2020 | 58,358,212 | |||||
Balance, amount at Mar. 31, 2020 | 129,037,000 | $ 58,000 | 102,890,000 | 66,335,000 | (37,974,000) | (2,272,000) |
Stock based compensation | 525,000 | 0 | 525,000 | 0 | 0 | 0 |
Translation difference | 8,633,000 | 0 | 0 | 0 | 8,633,000 | 0 |
Net income | 24,276,000 | 0 | 0 | 23,853,000 | 0 | 423,000 |
Reclassification adjustment relating to available-for-sale investment disposed of in the period, net of tax effect | 71,000 | $ 0 | 0 | 0 | 71,000 | 0 |
Balance, shares at Jun. 30, 2020 | 58,358,212 | |||||
Balance, amount at Jun. 30, 2020 | $ 162,542,000 | $ 58,000 | $ 103,415,000 | $ 90,188,000 | $ (29,270,000) | $ (1,849,000) |
Description of Business
Description of Business | 3 Months Ended |
Jun. 30, 2020 | |
Description of Business | |
NOTE 1 - DESCRIPTION OF BUSINESS | NOTE 1 - 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 through its operating subsidiaries provides financial services including retail securities brokerage, research, investment counseling, securities trading, market making, corporate investment banking and underwriting services in Eastern Europe and Central Asia. The Company is headquartered in Almaty, Kazakhstan, with supporting administrative office locations in Russia, Cyprus and the United States. The Company has retail locations in Russia, Kazakhstan, Ukraine, Uzbekistan, Kyrgyzstan and Germany. The Company’s common stock trades on the Nasdaq Capital Market. The Company owns directly, or through subsidiaries, the following companies: LLC Investment Company Freedom Finance, a Moscow, Russia-based securities broker-dealer (“Freedom RU”); LLC FFIN Bank, a Moscow, Russia-based bank (“FFIN Bank”); JSC Freedom Finance, an Almaty, Kazakhstan-based securities broker-dealer (“Freedom KZ”); Freedom Finance Global, PLC, an Astana International Financial Centre-based securities broker-dealer, (“Freedom Global”); Freedom Finance Europe Limited, a Limassol, Cyprus-based broker-dealer (“Freedom CY”), formerly known as Freedom Finance Cyprus, Limited; Freedom Finance Management Limited, a Limassol, Cyprus limited company, (“Freedom Management”); Freedom Finance Germany TT GmbH, a Berlin, Germany-based tied agent (“Freedom GE”); LLC Freedom Finance Uzbekistan, a Tashkent, Uzbekistan-based broker-dealer (“Freedom UZ”); and FFIN Securities, Inc., a Nevada corporation (“FFIN”). The Company also owns a 32.88% interest in LLC Freedom Finance Ukraine, a Kiev, Ukraine-based broker-dealer (“Freedom UA”). The remaining 67.12% interest in Freedom UA is owned by Askar Tashtitov, the Company’s president. The Company has entered into a series of contractual arrangements with Freedom UA and Mr. Tashtitov that obligate the Company to guarantee the performance of all Freedom UA obligations and provide Freedom UA sufficient funding to cover all operating losses and net capital requirements, enable the Company to receive 90% of the net profits of Freedom UA after tax, and require the Company to provide Freedom UA the management competence, operational support, and ongoing access to the Company’s significant assets, necessary technology resources and expertise to conduct the business of Freedom UA. The Company accounts for Freedom UA as a variable interest entity (“VIE”) under the accounting standards of the Financial Accounting Standards Board (“FASB”). Accordingly, the financial statements of Freedom UA are consolidated into the financial statements of the Company. The Company’s subsidiaries are participants on the Kazakhstan Stock Exchange (KASE), Astana Stock Exchange (AIX), Moscow Exchange (MOEX), Saint-Petersburg Exchange (SPBX), the Ukrainian Exchange (UX), 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. Unless otherwise specifically indicated or as is otherwise contextually required, FRHC, Freedom RU, FFIN Bank, Freedom KZ, Freedom Global, Freedom CY, Freedom Management, Freedom GE, Freedom UZ, FFIN and Freedom UA are collectively referred to herein as the “Company”. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Jun. 30, 2020 | |
Summary of Significant Accounting Policies | |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting principles The Company’s accounting policies and accompanying condensed consolidated financial statements conform to accounting principles generally accepted in the United States of America (US GAAP). These financial statements have been prepared on the accrual basis of accounting. Basis of presentation and principles of consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) 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 U.S. GAAP 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, 2020, are not necessarily indicative of the results that may be expected for the fiscal year ended March 31, 2021 The Condensed Consolidated Balance Sheet at June 30, 2020, has been derived from the audited consolidated financial statements at March 31, 2020, but does not include all the information and footnotes required by U.S. GAAP for complete financial statements. The Company’s condensed consolidated financial statements present the consolidated accounts of FRHC, Freedom RU, FFIN Bank, Freedom KZ, Freedom Global, Freedom CY, Freedom GE, Freedom UZ, Freedom GE, FFIN and Freedom UA. All significant inter-company balances and transactions have been eliminated from the 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, 2020. Consolidation of variable interest entities In accordance with accounting standards regarding consolidation of VIEs, VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision making ability. VIEs must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. Use of estimates The preparation of financial statements in conformity with U.S. 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. A significant portion 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 U.S. 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 the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income 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). 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. 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. 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 U.S. dollar. Monetary assets and liabilities denominated in foreign currencies are translated into U.S. 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 “Other Comprehensive Income”. For financial reporting purposes, foreign currencies are translated into U.S. 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 loss”. 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, repurchase, 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 are included in accumulated other comprehensive 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, which are recognized in the Condensed Consolidated Statements of Operations and Statements of other Comprehensive Income. 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 then reclassified to Condensed Consolidated Statements of Operations and Statements of other Comprehensive Income. 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 and included in net gain on trading securities. Interest earned and dividend income are recognized in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income 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 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. Brokerage and other receivables Brokerage and other receivables are comprised of 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 transferee 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, 2020 and March 31, 2020, the Company had not recorded any charges for impairment of long-lived assets. Impairment of goodwill 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. The changes in the carrying amount of goodwill as of March 31, 2020 and for the three months ended June 30, 2020 were as follows: Balance as of March 31, 2020 $ 2,607 Foreign currency translation 188 Balance as of June 30, 2020 $ 2,795 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, 2020 and March 31, 2020, 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 changed 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 reduced the U.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2019. 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 has presented the deferred tax impacts of GILTI tax in its consolidated financial statements as of June 30, 2020 and March 31, 2020. 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 The Company adopted ASU No. 2016-02, “Leases (Topic 842),” which requires leases with durations greater than twelve months to be recognized on the balance sheet. The Company adopted the standard using the optional transition approach with an effective date as of April 1, 2019. The Company adopted the provisions of ASU 2018-11, including the optional transition method, on April 1, 2019, and selected practical expedients package as follows: - An entity need not reassess whether any expired or existing contracts are or contain leases; - An entity need not reassess the lease classification for any expired or existing leases; - An entity need not reassess initial direct costs for any existing leases. Operating lease assets and corresponding lease liabilities were recognized on the Company’s consolidated balance sheets. Refer to Note 17 - Leases, within the notes to consolidated financial statements for additional disclosure and significant accounting policies affecting leases. 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. Segment Information The Company operates in a single operating segment offering financial services to its customers in a single geographic region covering Central Asia and Eastern Europe. The Company’s financial services business provides retail securities brokerage, research, investment counseling, securities trading, market making, corporate investment banking and underwriting services to its customers. The Company generates revenue from customers primarily from fee and commission income and interest income. The Company does not use profitability reports or other information disaggregated on a regional, country or divisional basis for making business decisions. Recent accounting pronouncements On June 16, 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced an expected credit loss methodology for the impairment of financial assets measured at amortized cost basis. That methodology replaces the probable, incurred loss model for those assets. In November 2019, the FASB issued ASU 2019-10 Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842). The Board developed a philosophy to extend and simplify how effective dates are staggered between larger public companies (bucket one) and all other entities (bucket two). Those other entities include private companies, smaller public companies, not-for-profit organizations, and employee benefit plans. Under this philosophy, a major Update would first be effective for bucket-one entities, that is, public business entities that are Securities and Exchange Commission (SEC) filers, excluding entities eligible to be smaller reporting companies (SRCs) under the SEC's definition. The Master Glossary of the Codification defines public business entities and SEC filers. All other entities, including SRCs, other public business entities, and nonpublic business entities (private companies, not-for-profit organizations, and employee benefit plans) would compose bucket two. For those entities, it is anticipated that the Board will consider requiring an effective date staggered at least two years after bucket one for major Updates. The Company is currently an SRC and according to the ASU 2019-10, qualifies for bucket two. As such ASU 2016-13, ASU 2017-12 and ASU 2016-02 are effective for fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact that ASU 2016-13 and 2019-10 will have on its consolidated financial statements and related disclosures. Revision of Previously Issued Condensed Consolidated Financial Statements Certain amounts in the prior year condensed consolidated financial statements have been reclassified to conform to the current year presentation. These reclassifications had no effect on the previously reported net income. The table below details the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income reclassifications: For the three months ended June 30, 2019 STATEMENTS OF OPERATIONS AND STATEMENTS OF OTHER COMPREHENSIVE INCOME (as corrected) As previously reported Reclassified As corrected Expense: Interest expense $ 3,608 (445 ) $ 3,163 Fee and commission expense 4,031 - 4,031 Operating expense 12,685 445 13,130 Recovery of impairment losses (1,073 ) - (1,073 ) Other expense, net 308 - 308 TOTAL EXPENSE $ 19,559 - $ 19,559 |
Cash and Cash Equivalents
Cash and Cash Equivalents | 3 Months Ended |
Jun. 30, 2020 | |
Cash and Cash Equivalents | |
NOTE 3 - CASH AND CASH EQUIVALENTS | NOTE 3 - CASH AND CASH EQUIVALENTS June 30, 2020 March 31, 2020 Current accounts with brokers $ 88,961 $ 4,051 Current account with commercial banks 41,165 14,462 Accounts with stock exchange 26,815 14,904 Current account with National Settlement Depository (Russia) 14,154 1,348 Petty cash in bank vault and on hand 11,842 8,981 Current account in clearing organizations 7,406 6,590 Securities purchased under reverse repurchase agreements 6,245 9,645 Current account with Central Bank (Russia) 2,331 2,726 Current account with Central Depository (Kazakhstan) 384 501 Total cash and cash equivalents $ 199,303 $ 63,208 As of June 30, 2020 and March 31, 2020, with the exception of funds deposited with a bank in the United States which may qualify for FDIC insurance up to $250,000, cash and cash equivalents were not insured. As of June 30, 2020 and March 31, 2020, the cash and cash equivalents balance included collateralized securities received under reverse repurchase agreements on the terms presented below: June 30, 2020 Interest rates and remaining contractual maturity of the agreements Average Inte re st rate Up to 30 days 30-90 days Total Securities purchased under reverse repurchase agreements Corporate equity 13.11 % $ 3,253 $ - $ 3,253 Corporate debt 15.00 % - 168 168 Non-U.S. sovereign debt 4.38 % 2,824 - 2,824 Total $ 6,077 $ 168 $ 6,245 March 31, 2020 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 14.08 % $ 9,212 $ 15 $ 9,227 Corporate debt 14.25 % 108 - 108 Non-U.S. sovereign debt 17.18 % 53 257 310 Total $ 9,373 $ 272 $ 9,645 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, 2020 and March 31, 2020, was $7,247 and $10,272, respectively. |
Restricted Cash
Restricted Cash | 3 Months Ended |
Jun. 30, 2020 | |
Restricted Cash | |
NOTE 4 - RESTRICTED CASH | NOTE 4 - RESTRICTED CASH Restricted cash consisted of: June 30, 2020 March 31, 2020 Brokerage customers’ cash $ 629,478 $ 63,506 Deferred distribution payments 8,534 2,097 Reserve with Central Bank of Russia 569 476 Guaranty deposits 791 518 Total restricted cash $ 639,372 $ 66,597 As of June 30, 2020 and March 31, 2020, the Company’s restricted cash included the cash portion of the funds allocated for 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 and deferred distribution payments. The deferred distribution payment amount is a reserve held for distribution to stockholders 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 stockholders 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 stockholder will submit the necessary documentation to claim their distribution payment. The entire deferred distribution payment amount was held in cash at June 30, 2020. At March 31, 2020, $6,437 of the deferred distribution payment amount was held in available-for-sale securities including debt securities, certificates of deposit, mutual funds and preferred shares, and $2,097 was held in cash. |
Trading and Available-For-Sale
Trading and Available-For-Sale Securities at Fair Value | 3 Months Ended |
Jun. 30, 2020 | |
Trading and Available-For-Sale Securities at Fair Value | |
NOTE 5 - TRADING AND AVAILABLE-FOR-SALE SECURITIES AT FAIR VALUE | NOTE 5 -TRADING AND AVAILABLE-FOR-SALE SECURITIES AT FAIR VALUE As of June 30, 2020 and March 31, 2020, trading and available-for-sale securities consisted of: June 30, 2020 March 31, 2020 Debt securities $ 117,422 $ 87,014 Equity securities 59,662 69,530 Total trading securities $ 177,084 $ 156,544 Equity securities $ 1 $ 1 Certificate of deposit - 5,076 Mutual investment funds - 672 Debt securities - 405 Preferred shares - 284 Total available-for-sale securities, at fair value $ 1 $ 6,438 The Company recognized no other than temporary impairment in accumulated other comprehensive income. The fair value of assets and liabilities is determined using observable market data based on recent trading activity. Where observable market data is unavailable due to a lack of trading activity, the Company utilizes internally developed models to estimate fair value and independent third parties to validate assumptions, when appropriate. Estimating fair value requires significant management judgment, including benchmarking to similar instruments with observable market data and applying appropriate discounts that reflect differences between the securities that the Company is valuing and the selected benchmark. Depending on the type of securities owned by the Company, other valuation methodologies may be required. Measurement of fair value is classified within a hierarchy based upon the transparency of inputs used in the valuation of an asset or liability. Classification within the hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The valuation hierarchy contains three levels: · Level 1 - Valuation inputs are unadjusted quoted market prices for identical assets or liabilities in active markets. · Level 2 - Valuation inputs are quoted market prices for identical assets or liabilities in markets that are not active, quoted market prices for similar assets and liabilities in active markets, and other observable inputs directly or indirectly related to the asset or liability being measured. · Level 3 - Valuation inputs are unobservable and significant to the fair value measurement. The following tables present trading securities assets in the condensed consolidated financial statements at fair value on a recurring basis as of June 30, 2020 and March 31, 2020: Fair Value Measurements at June 30, 2020 using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant unobservable units June 30, 2020 (Level 1) (Level 2) (Level 3) Debt securities $ 117,422 $ 117,422 $ - $ - Equity securities 59,662 48,029 - 11,633 Total trading securities $ 177,084 $ 165,451 $ - $ 11,633 Equity securities $ 1 $ - $ - $ 1 Total available-for-sale securities, at fair value $ 1 $ - $ - $ 1 Fair Value Measurements at March 31, 2020 using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant unobservable units March 31, 2020 (Level 1) (Level 2) (Level 3) Debt securities $ 87,014 $ 87,014 $ - $ - Equity securities 69,530 58,271 - 11,259 Total trading securities $ 156,544 $ 145,285 $ - $ 11,259 Equity securities $ 1 $ - $ - $ 1 Debt securities 405 - 405 - Certificate of deposit 5,076 - 5,076 - Mutual investment funds 672 672 - - Preferred shares 284 - 284 - Total available-for-sale securities, at fair value $ 6,438 $ 672 $ 5,765 $ 1 The table below presents the Valuation Techniques and Significant Level 3 Inputs used in the valuation as of June 30, 2020 and March 31, 2020. The table is not intended to be all inclusive, but instead captures the significant unobservable inputs relevant to determination of fair value. Type Valuation Technique FV as of June 30, 2020 FV as of March 31, 2020 Significant Unobservable Inputs % Equity securities DCF $ 11,259 $ 11,259 Discount rate 9.50 % Estimated number of years 9 years Equity securities DCF $ 374 - Discount rate 20.3 % Estimated number of years 10 years The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the three months ended June 30, 2020 and the year ended March 31, 2020: Trading securities Available-for-sale securities Balance as of March 31, 2020 $ 11,259 $ 1 Purchase of investments that use Level 3 inputs 374 - Balance as of June 30, 2020 $ 11,633 $ 1 Trading securities Available-for-sale securities Balance as of March 31, 2019 $ 504 $ 2 Sale of investments that use Level 3 inputs (497 ) - Purchase of investments that use Level 3 inputs 10,430 - Revaluation of investments that use Level 3 inputs 829 - Foreign currency translation (7 ) - Balance as of March 31, 2020 $ 11,259 $ 2 June 30, 2020 Assets measured at amortized cost Unrealized loss accumulated in other comprehensive income/(loss) Assets measured at fair value Equity securities $ 1 $ - $ 1 Balance as of June 30, 2020 $ 1 $ - $ 1 March 31, 2020 Assets measured at amortized cost Unrealized loss accumulated in other comprehensive income/(loss) Assets measured at fair value Certificate of deposit $ 5,050 $ 26 $ 5,076 Mutual investment funds 696 (24 ) 672 Debt securities 456 (51 ) 405 Preferred shares 306 (22 ) 284 Equity securities 1 - 1 Balance as of March 31, 2020 $ 6,509 $ (71 ) $ 6,438 In connection with the 2011 sale of the Company’s oil and gas exploration and production operations the Company declared distributions to its stockholders. Certain stockholders, however, never completed and submitted the necessary documentation to establish their right to receive the distributions. The total amount held in reserve by the Company on behalf of such stockholders is equal to available-for-sale securities, at fair value, less equity securities, plus the amount identified as “deferred distribution payments” in Note 4 - Restricted Cash. These funds are currently payable. The Company has no control over when, or if, any entitled stockholder will submit the necessary documentation to establish their claim to receive their distribution payment. |
DERIVATIVE ASSETS
DERIVATIVE ASSETS | 3 Months Ended |
Jun. 30, 2020 | |
DERIVATIVE ASSETS | |
NOTE 6 - DERIVATIVE ASSETS | NOTE 6 - DERIVATIVE ASSETS On June 30, 2020, the Company entered into two call option agreements in connection with successfully completing an underwritten securities offering for a third party. Both derivative instruments grant the Company the right to purchase 92.4 million shares and 61.6 million shares, respectively, of such third party at an exercise price of $0.008115 and $0.0122, respectively. The expiration date of the call option agreements is October 1, 2020. The total value of the call options as of June 30, 2020, was $2,391. All call options are classified as derivative assets in the Condensed Consolidated Balance Sheet and measured at each reporting period using the Black-Scholes Model. |
Brokerage and Other Receivables
Brokerage and Other Receivables, Net | 3 Months Ended |
Jun. 30, 2020 | |
Brokerage and Other Receivables, Net | |
NOTE 7 - BROKERAGE AND OTHER RECEIVABLES, NET | NOTE 7 - BROKERAGE AND OTHER RECEIVABLES, NET June 30, 2020 March 31, 2020 Margin lending receivables $ 98,469 $ 107,770 Receivables from brokerage clients 1,668 4,396 Bonds coupon receivable 813 - Receivable from sale of securities 616 1,498 Bank commissions receivable 352 218 Receivable for underwriting and market-making services 263 67 Other receivables 575 51 Allowance for receivables (234 ) (313 ) Total brokerage and other receivables, net $ 102,522 $ 113,687 On June 30, 2020 and March 31, 2020, amounts due from a single related party customer were $68,135 or 66% and $90,696 or 80%, respectively. Based on experience, the Company considers receivables due from related parties fully collectible. As of June 30, 2020, and March 31, 2020, using historical and statistical data, the Company recorded an allowance for brokerage receivables in the amount of $234 and $313, respectively. |
Loans Issued
Loans Issued | 3 Months Ended |
Jun. 30, 2020 | |
Loans Issued | |
NOTE 8 - LOANS ISSUED | NOTE 8 - LOANS ISSUED Loans issued as of June 30, 2020, consisted of the following: Amount Outstanding Due Dates Average Interest Rate Fair Value of Collateral Loan Currency Subordinated loan $ 5,074 December 2022-April 2024 3.69 % - USD Uncollateralized non-bank loan 2,331 January 2021 - February 2021 3.00 % - USD Subordinated loan 1,389 September 2029 7.00 % - UAH Bank customer loans 1,156 July 2020 - May 2044 13.77 % 294 RUB Other loans issued 8 December 2020 4.50 % - EUR $ 9,958 Loans issued as of March 31, 2020, consisted of the following: Amount Outstanding Due Dates Average Interest Rate Fair Value of Collateral Loan Currency Subordinated loan $ 5,042 December 2022-April 2024 3.69 % - USD Uncollateralized non-bank loan 2,313 January 2021 - February 2021 3.00 % - USD Bank customer loans 1,635 July 2020 - May 2044 14.31 % 258 RUB Subordinated loan 1,333 September 2029 7.00 % - UAH Uncollateralized non-bank loan 129 March 2021 6.00 % - RUB Other loans issued 9 December 2020 4.50 % - EUR $ 10,461 |
Deferred Tax Assets
Deferred Tax Assets | 3 Months Ended |
Jun. 30, 2020 | |
Deferred Tax Assets | |
NOTE 9 - DEFERRED TAX ASSETS | NOTE 9 - DEFERRED TAX ASSETS The Company is subject to taxation in the Russian Federation, Kazakhstan, Kyrgyzstan, Cyprus, Ukraine, Uzbekistan, Germany and the United States of America. The tax rates used for deferred tax assets and liabilities as of June 30, 2020 and March 31, 2020 is 21% for the U.S., 20% for the Russian Federation, Kazakhstan, Kyrgyzstan, 31% for Germany, 12.5% for Cyprus, 18% for Ukraine and 15% for Uzbekistan. Deferred tax assets and liabilities of the Company are comprised of the following: June 30, 2020 March 31, 2020 Deferred tax assets: Tax losses carryforward $ 949 $ 1,691 Accrued liabilities 100 7 Depreciation 4 4 Valuation allowance (586 ) (677 ) Revaluation on trading securities - 72 Deferred tax assets $ 467 $ 1,097 Deferred tax liabilities: Revaluation on trading securities $ 775 $ 513 Other liabilities 14 14 Deferred tax liabilities $ 789 $ 527 Net deferred tax assets/(liabilities) $ (322 ) $ 570 During the three months ended June 30, 2020 and 2019, the effective tax rate was equal to 15.94% and 15.23%, respectively. Tax losses carryforward as of June 30, 2020 and March 31, 2020 was $949 and $1,691, respectively, and is subject to income tax in US, Russia, Ukraine and Uzbekistan. |
Debt Securities Issued
Debt Securities Issued | 3 Months Ended |
Jun. 30, 2020 | |
Debt Securities Issued | |
NOTE 10 - DEBT SECURITIES ISSUED | NOTE 1 0 - DEBT SECURITIES ISSUED June 30, 2020 March 31, 2020 Debt securities issued denominated in USD $ 59,702 $ 64,783 Debt securities issued denominated in RUB 7,148 6,432 Accrued interest 734 1,081 Total $ 67,584 $ 72,296 As of June 30, 2020, and March 31, 2020, the Company had debt securities issued in the amount of $67,584 and $72,296 respectively. As of June 30, 2020, the Company’s outstanding debt securities had fixed annual coupon rates ranging from 6.5% to 12% and maturity dates ranging from May 2021 to January 2023. The Company’s debt securities include bonds of Freedom KZ and RU issued under Kazakhstani and Russian Federation law, which trade on the KASE and the MOEX, respectively. The Company’s debt securities also include $20,496 in the aggregate amount of notes of FRHC issued from December 2019 to February 2020. The FRHC notes, denominated in USD, have minimum denominations of $100,000, bear interest at an annual rate of 7.000% and are due in 2022.The FRHC notes were issued under Astana International Financial Centre law and trade on the AIX. On June 27, 2020, the Company retired U.S. dollar denominated 8% Freedom KZ bonds that had a carrying value of $4,182 including interest accrued of $166 as of the repayment date. 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, 2020 and March 31, 2020 included $734 and $1,080 accrued interest, respectively. The Freedom notes are actively traded on the AIX, KASE and MOEX. |
Customer Liabilities
Customer Liabilities | 3 Months Ended |
Jun. 30, 2020 | |
Customer Liabilities | |
NOTE 11 - CUSTOMER LIABILITIES | NOTE 11 - CUSTOMER LIABILITIES The Company recognizes customer liabilities associated with funds held by our brokerage and bank customers. Customer liabilities consist of: June 30, 2020 March 31, 2020 Brokerage customers $ 717,904 $ 115,922 Banking customers 90,848 52,510 Total $ 808,752 $ 168,432 As of June 30, 2020, banking customer liabilities consisted of current accounts and deposits of $29,399 and $61,449, respectively. As of March 31, 2020, banking customer liabilities consisted of current accounts and deposits of $25,384 and $27,126, respectively. |
Trade Payables
Trade Payables | 3 Months Ended |
Jun. 30, 2020 | |
Trade Payables | |
NOTE 12 - TRADE PAYABLES | NOTE 12 - TRADE PAYABLES June 30, 2020 March 31, 2020 Margin lending payable $ 36,876 $ 6,101 Payables to suppliers of goods and services 1,023 202 Coupons payable 718 - Trade payable for securities purchased 256 1,860 Other 6 235 Total $ 38,879 $ 8,398 On June 30, 2020 and March 31, 2020, trade payables due to a single related party were $22,230 or 57% and $4,306 or 51% respectively. |
Securities Repurchase Agreement
Securities Repurchase Agreement Obligations | 3 Months Ended |
Jun. 30, 2020 | |
Securities Repurchase Agreement Obligations | |
NOTE 13 - SECURITIES REPURCHASE AGREEMENT OBLIGATIONS | NOTE 13 - SECURITIES REPURCHASE AGREEMENT OBLIGATIONS As of June 30, 2020 and March 31, 2020, trading securities included collateralized securities subject to repurchase agreements as described in the following table: June 30, 2020 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 9.70 % $ 14,022 $ - $ - $ 14,022 Corporate debt 10.88 % 28,169 - - 28,169 Non-U.S. sovereign debt 9.04 % 16,391 - - 16,391 Total securities sold under repurchase agreements $ 58,582 $ - $ - $ 58,582 March 31, 2020 Interest rate 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 12.16 % $ 20,711 $ - $ - $ 20,711 Corporate debt 13.27 % 15,974 - - 15,974 Non-U.S. sovereign debt 13.00 % 11,519 - - 11,519 Total securities sold under repurchase agreements $ 48,204 $ - $ - $ 48,204 The fair value of collateral pledged under repurchase agreements as of June 30, 2020 and March 31, 2020, was $65,499 and $54,222, 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, 2020 | |
Related Party Transactions | |
NOTE 14 - RELATED PARTY TRANSACTIONS | NOTE 14 - RELATED PARTY TRANSACTIONS During the three months ended June 30, 2020 and 2019, the Company earned commission income from related parties in the amounts of $30,790 and $19,826 respectively. Commission income earned from related parties is comprised primarily of brokerage commissions and commissions for money transfers by brokerage clients. During the three months ended June 30, 2020 and 2019, the Company paid commission expense to related parties in the amount of $2,445 and $924, respectively. As of June 30, 2020 and March 31, 2020, the Company had cash and cash equivalents held in brokerage accounts of related parties totaling $216 and $212, respectively. As of June 30, 2020 and March 31, 2020, the Company had loans issued to related parties totaling $739 and $1,477, respectively. As of June 30, 2020 and March 31, 2020, the Company had bank commission receivables and receivables from brokerage clients from related parties totaling $8,982 and $3,611, respectively. Brokerage and other receivables from related parties result principally from commissions receivable on the brokerage operations of related parties. As of June 30, 2020 and March 31, 2020, the Company had margin lending receivables with related parties totaling $83,401 and $105,892, respectively. As of June 30, 2020 and March 31, 2020, the Company had margin lending payables to related parties, totaling $32,495 and $4,306, respectively. As of June 30, 2020 and March 31, 2020, the Company had accounts payable due to a related party totaling $303 and $1,879, respectively. As of June 30, 2020 and March 31, 2020, the Company had customer liabilities to related parties totaling $579,661 and $26,150, respectively. As of June 30, 2020 and March 31, 2020, the Company had restricted customer cash deposited in current and brokerage accounts with related parties in the amounts of $12,574 and $25,563. Brokerage and related banking services, including margin lending, were provided to related parties pursuant standard client account agreements and at standard market rates. |
Stockholder's Equity
Stockholder's Equity | 3 Months Ended |
Jun. 30, 2020 | |
Stockholder's Equity | |
NOTE 15 - STOCKHOLDERS' EQUITY | NOTE 15 - STOCKHOLDERS’ EQUITY During the three months ended June 30, 2020 and 2019 outstanding nonqualified stock options were exercised in the amount of $0 and $99, respectively. On October 6, 2017,the Company awarded restricted stock grants totalling 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 $525 during the three months ended June 30, 2020. The Company recorded stock-based compensation expense for restricted stock grants and stock options in the amount of $773 during the three months ended June 30, 2019. |
Stock Based Compensation
Stock Based Compensation | 3 Months Ended |
Jun. 30, 2020 | |
Stock Based Compensation | |
NOTE 16 - STOCK-BASED COMPENSATION | NOTE 16 - STOCK-BASED COMPENSATION During the three months ended June 30, 2020, no stock options were awarded. Total compensation expense related to outstanding options was $54 for the three months ended June 30, 2020, and $54 for the three months ended June 30, 2019. As of June 30, 2020, there was total remaining compensation expense of $58 related to stock options, which will be recorded over a weighted average period of approximately 0.27 years. As disclosed in Note 15, 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 of $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. The Company has determined the fair value of such stock options using the Black-Scholes option valuation model based on the following key assumptions: Vesting period (years) 3 Volatility 165.33 % Risk-free rate 1.66 % Stock-based compensation expense for the cost of the awards granted is based on the grant-date fair value. For stock option awards, the fair value is estimated at the date of grant using the Black-Scholes option-pricing model. This model requires the input of highly subjective assumptions, changes to which can materially affect the fair value estimate. Additionally, there may be other factors that would otherwise have a significant effect on the value of employee stock options granted but are not considered by the model. Accordingly, while management believes that the Black-Scholes option-pricing model provides a reasonable estimate of fair value, the model does not necessarily provide the best single measure of fair value for the Company’s employee stock options. The following is a summary of stock option activity for the three months ended June 30, 2020: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (In Years) Aggregate Intrinsic Value Outstanding, March 31, 2020 120,000 $ 1.98 7.52 $ 1,466 Granted - - - - Exercised - - - - Forfeited/cancelled/expired - - - - Outstanding, at June 30, 2020 120,000 $ 1.98 7.27 $ 2,005 Exercisable, at June 30, 2020 - $ - - $ - During the three months ended June 30, 2020, no restricted shares were awarded. The compensation expense related to restricted stock grants was $471 during the three months ended June 30, 2020, and $719 during the three months ended June 30, 2019. As of June 30, 2020, there was $507 of total unrecognized compensation cost related to non-vested shares of common stock granted. The cost is expected to be recognized over a weighted average period of 0.27 years. The table below summarizes the activity for the Company’s restricted stock outstanding during the three months ended June 30, 2020: Shares Weighted Average Fair Value Outstanding, March 31, 2020 2,275,000 $ 4,777 Granted - - Vested - - Forfeited/cancelled/expired - - Outstanding, at June 30, 2020 2,275,000 $ 4,777 |
Leases
Leases | 3 Months Ended |
Jun. 30, 2020 | |
Leases | |
NOTE 17 - LEASES | NOTE 1 7 - LEASES The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate. The Company leases its corporate office space and certain facilities under long-term operating leases expiring through fiscal year 2024. Effective April 1, 2019, the Company adopted the provision of ASC 842 Leases. The table below presents the lease related assets and liabilities recorded on the Company’s consolidated balance sheets as of June 30, 2020: Classification on Balance Sheet June 30, 2020 Assets Operating lease assets Right-of-use assets $ 15,527 Total lease assets $ 15,527 Liabilities Operating lease liability Operating lease obligations $ 15,484 Total lease liability $ 15,484 Lease obligations at June 30, 2020, consisted of the following: Twelve months ending March 31, 2021 - remaining after June 30 $ 5,094 2022 6,384 2023 5,192 2024 1,181 2025 364 Total payments 18,215 Less: amounts representing interest (2,731 ) Lease obligation, net $ 15,484 Weighted average remaining lease term (in months) 26 Weighted average discount rate 12 % Lease commitments for short term operating lease as of June 30, 2020 is approximately $479. The Company’s rent expense for office space was $101 and $122 for the three months ended June 30, 2020 and 2019, respectively. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Jun. 30, 2020 | |
Subsequent Events | |
NOTE 18 - SUBSEQUENT EVENTS | NOTE 18 - SUBSEQUENT EVENTS The Company has performed an evaluation of subsequent events through the time of filing this quarterly report on Form 10-Q with the SEC. Other than as disclosed below, during this period the Company did not have any additional material recognizable subsequent events. On July 6, 2020, the Company announced the acquisition of IC Zerich Capital Management JSC (“Zerich”) following receipt of approval from the Russian Federal Antimonopoly Service. Zerich commenced business in 1995 and is one of the oldest securities brokerage firms in Russia, currently ranking as the 19th largest brokerage house in Russia in terms of clients. On August 3, 2020, the Company announced that through its wholly-owned subsidiary Freedom KZ, it had entered into an agreement to acquire all of the issued and outstanding ordinary shares of Bank Kassa Nova JSC (“Bank Kassa Nova”) from ForteBank JSC. In connection with the transactions, the parties also expect to enter into agreements to acquire all of the outstanding preferred shares and outstanding subordinated debt of Bank Kassa Nova from the holders thereof. Closing of these transactions is contingent upon, among other things, receipt of necessary governmental approvals of the transactions in the Republic of Kazakhstan, which the parties expect to occur by the end of the year. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Jun. 30, 2020 | |
Summary of Significant Accounting Policies | |
Accounting principles | The Company’s accounting policies and accompanying condensed consolidated financial statements conform to accounting principles generally accepted in the United States of America (US GAAP). These financial statements have been prepared on the accrual basis of accounting. |
Basis of presentation and principles of consolidation | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) 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 U.S. GAAP 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, 2020, are not necessarily indicative of the results that may be expected for the fiscal year ended March 31, 2021 The Condensed Consolidated Balance Sheet at June 30, 2020, has been derived from the audited consolidated financial statements at March 31, 2020, but does not include all the information and footnotes required by U.S. GAAP for complete financial statements. The Company’s condensed consolidated financial statements present the consolidated accounts of FRHC, Freedom RU, FFIN Bank, Freedom KZ, Freedom Global, Freedom CY, Freedom GE, Freedom UZ, Freedom GE, FFIN and Freedom UA. All significant inter-company balances and transactions have been eliminated from the 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, 2020. |
Consolidation of variable interest entities | In accordance with accounting standards regarding consolidation of VIEs, VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision making ability. VIEs must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. |
Use of estimates | The preparation of financial statements in conformity with U.S. 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. A significant portion 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 U.S. 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 the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income 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). 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. 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. |
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 U.S. dollar. Monetary assets and liabilities denominated in foreign currencies are translated into U.S. 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 “Other Comprehensive Income”. For financial reporting purposes, foreign currencies are translated into U.S. 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 loss”. |
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, repurchase, 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 are included in accumulated other comprehensive 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, which are recognized in the Condensed Consolidated Statements of Operations and Statements of other Comprehensive Income. 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 then reclassified to Condensed Consolidated Statements of Operations and Statements of other Comprehensive Income. |
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 and included in net gain on trading securities. Interest earned and dividend income are recognized in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income 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 |
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. |
Brokerage and other receivables | Brokerage and other receivables are comprised of 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 transferee 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, 2020 and March 31, 2020, the Company had not recorded any charges for impairment of long-lived assets. |
Impairment of goodwill | 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. The changes in the carrying amount of goodwill as of March 31, 2020 and for the three months ended June 30, 2020 were as follows: Balance as of March 31, 2020 $ 2,607 Foreign currency translation 188 Balance as of June 30, 2020 $ 2,795 |
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, 2020 and March 31, 2020, 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 changed 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 reduced the U.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2019. 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 has presented the deferred tax impacts of GILTI tax in its consolidated financial statements as of June 30, 2020 and March 31, 2020. |
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 | The Company adopted ASU No. 2016-02, “Leases (Topic 842),” which requires leases with durations greater than twelve months to be recognized on the balance sheet. The Company adopted the standard using the optional transition approach with an effective date as of April 1, 2019. The Company adopted the provisions of ASU 2018-11, including the optional transition method, on April 1, 2019, and selected practical expedients package as follows: - An entity need not reassess whether any expired or existing contracts are or contain leases; - An entity need not reassess the lease classification for any expired or existing leases; - An entity need not reassess initial direct costs for any existing leases. Operating lease assets and corresponding lease liabilities were recognized on the Company’s consolidated balance sheets. Refer to Note 17 - Leases, within the notes to consolidated financial statements for additional disclosure and significant accounting policies affecting leases. |
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. |
Segment information | The Company operates in a single operating segment offering financial services to its customers in a single geographic region covering Central Asia and Eastern Europe. The Company’s financial services business provides retail securities brokerage, research, investment counseling, securities trading, market making, corporate investment banking and underwriting services to its customers. The Company generates revenue from customers primarily from fee and commission income and interest income. The Company does not use profitability reports or other information disaggregated on a regional, country or divisional basis for making business decisions. |
Recent accounting pronouncements | On June 16, 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced an expected credit loss methodology for the impairment of financial assets measured at amortized cost basis. That methodology replaces the probable, incurred loss model for those assets. In November 2019, the FASB issued ASU 2019-10 Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842). The Board developed a philosophy to extend and simplify how effective dates are staggered between larger public companies (bucket one) and all other entities (bucket two). Those other entities include private companies, smaller public companies, not-for-profit organizations, and employee benefit plans. Under this philosophy, a major Update would first be effective for bucket-one entities, that is, public business entities that are Securities and Exchange Commission (SEC) filers, excluding entities eligible to be smaller reporting companies (SRCs) under the SEC's definition. The Master Glossary of the Codification defines public business entities and SEC filers. All other entities, including SRCs, other public business entities, and nonpublic business entities (private companies, not-for-profit organizations, and employee benefit plans) would compose bucket two. For those entities, it is anticipated that the Board will consider requiring an effective date staggered at least two years after bucket one for major Updates. The Company is currently an SRC and according to the ASU 2019-10, qualifies for bucket two. As such ASU 2016-13, ASU 2017-12 and ASU 2016-02 are effective for fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact that ASU 2016-13 and 2019-10 will have on its consolidated financial statements and related disclosures. |
Revision of Previously Issued Condensed Consolidated Financial Statements | Certain amounts in the prior year condensed consolidated financial statements have been reclassified to conform to the current year presentation. These reclassifications had no effect on the previously reported net income. The table below details the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income reclassifications: For the three months ended June 30, 2019 STATEMENTS OF OPERATIONS AND STATEMENTS OF OTHER COMPREHENSIVE INCOME (as corrected) As previously reported Reclassified As corrected Expense: Interest expense $ 3,608 (445 ) $ 3,163 Fee and commission expense 4,031 - 4,031 Operating expense 12,685 445 13,130 Recovery of impairment losses (1,073 ) - (1,073 ) Other expense, net 308 - 308 TOTAL EXPENSE $ 19,559 - $ 19,559 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Summary of Significant Accounting Policies | |
Schedule of Goodwill | Balance as of March 31, 2020 $ 2,607 Foreign currency translation 188 Balance as of June 30, 2020 $ 2,795 |
Summary of Statements of Other Comprehensive Income reclassifications: | For the three months ended June 30, 2019 STATEMENTS OF OPERATIONS AND STATEMENTS OF OTHER COMPREHENSIVE INCOME (as corrected) As previously reported Reclassified As corrected Expense: Interest expense $ 3,608 (445 ) $ 3,163 Fee and commission expense 4,031 - 4,031 Operating expense 12,685 445 13,130 Recovery of impairment losses (1,073 ) - (1,073 ) Other expense, net 308 - 308 TOTAL EXPENSE $ 19,559 - $ 19,559 |
Cash and Cash Equivalents (Tabl
Cash and Cash Equivalents (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Cash and Cash Equivalents | |
Schedule of Cash and cash equivalents | June 30, 2020 March 31, 2020 Current accounts with brokers $ 88,961 $ 4,051 Current account with commercial banks 41,165 14,462 Accounts with stock exchange 26,815 14,904 Current account with National Settlement Depository (Russia) 14,154 1,348 Petty cash in bank vault and on hand 11,842 8,981 Current account in clearing organizations 7,406 6,590 Securities purchased under reverse repurchase agreements 6,245 9,645 Current account with Central Bank (Russia) 2,331 2,726 Current account with Central Depository (Kazakhstan) 384 501 Total cash and cash equivalents $ 199,303 $ 63,208 |
Schedule of securities received under reverse repurchase agreements | June 30, 2020 Interest rates and remaining contractual maturity of the agreements Average Inte re st rate Up to 30 days 30-90 days Total Securities purchased under reverse repurchase agreements Corporate equity 13.11 % $ 3,253 $ - $ 3,253 Corporate debt 15.00 % - 168 168 Non-U.S. sovereign debt 4.38 % 2,824 - 2,824 Total $ 6,077 $ 168 $ 6,245 March 31, 2020 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 14.08 % $ 9,212 $ 15 $ 9,227 Corporate debt 14.25 % 108 - 108 Non-U.S. sovereign debt 17.18 % 53 257 310 Total $ 9,373 $ 272 $ 9,645 |
Restricted Cash (Tables)
Restricted Cash (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Restricted Cash | |
Schedule of restricted cash | June 30, 2020 March 31, 2020 Brokerage customers’ cash $ 629,478 $ 63,506 Deferred distribution payments 8,534 2,097 Reserve with Central Bank of Russia 569 476 Guaranty deposits 791 518 Total restricted cash $ 639,372 $ 66,597 |
Trading and Available-For-Sal_2
Trading and Available-For-Sale Securities at Fair Value (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Trading and Available-For-Sale Securities at Fair Value | |
Schedule of trading securities | |
Schedule of Fair Value Measurements of Assets | Fair Value Measurements at June 30, 2020 using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant unobservable units June 30, 2020 (Level 1) (Level 2) (Level 3) Debt securities $ 117,422 $ 117,422 $ - $ - Equity securities 59,662 48,029 - 11,633 Total trading securities $ 177,084 $ 165,451 $ - $ 11,633 Equity securities $ 1 $ - $ - $ 1 Total available-for-sale securities, at fair value $ 1 $ - $ - $ 1 Fair Value Measurements at March 31, 2020 using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant unobservable units March 31, 2020 (Level 1) (Level 2) (Level 3) Debt securities $ 87,014 $ 87,014 $ - $ - Equity securities 69,530 58,271 - 11,259 Total trading securities $ 156,544 $ 145,285 $ - $ 11,259 Equity securities $ 1 $ - $ - $ 1 Debt securities 405 - 405 - Certificate of deposit 5,076 - 5,076 - Mutual investment funds 672 672 - - Preferred shares 284 - 284 - Total available-for-sale securities, at fair value $ 6,438 $ 672 $ 5,765 $ 1 |
Schedule of Significant unobservable inputs relevant to determination of fair value | Type Valuation Technique FV as of June 30, 2020 FV as of March 31, 2020 Significant Unobservable Inputs % Equity securities DCF $ 11,259 $ 11,259 Discount rate 9.50 % Estimated number of years 9 years Equity securities DCF $ 374 - Discount rate 20.3 % Estimated number of years 10 years |
Schedule of investments | Trading securities Available-for-sale securities Balance as of March 31, 2020 $ 11,259 $ 1 Purchase of investments that use Level 3 inputs 374 - Balance as of June 30, 2020 $ 11,633 $ 1 Trading securities Available-for-sale securities Balance as of March 31, 2019 $ 504 $ 2 Sale of investments that use Level 3 inputs (497 ) - Purchase of investments that use Level 3 inputs 10,430 - Revaluation of investments that use Level 3 inputs 829 - Foreign currency translation (7 ) - Balance as of March 31, 2020 $ 11,259 $ 2 June 30, 2020 Assets measured at amortized cost Unrealized loss accumulated in other comprehensive income/(loss) Assets measured at fair value Equity securities $ 1 $ - $ 1 Balance as of June 30, 2020 $ 1 $ - $ 1 March 31, 2020 Assets measured at amortized cost Unrealized loss accumulated in other comprehensive income/(loss) Assets measured at fair value Certificate of deposit $ 5,050 $ 26 $ 5,076 Mutual investment funds 696 (24 ) 672 Debt securities 456 (51 ) 405 Preferred shares 306 (22 ) 284 Equity securities 1 - 1 Balance as of March 31, 2020 $ 6,509 $ (71 ) $ 6,438 |
Brokerage and Other Receivabl_2
Brokerage and Other Receivables, Net (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Brokerage and Other Receivables, Net | |
Schedule of Brokerage and other receivables | June 30, 2020 March 31, 2020 Margin lending receivables $ 98,469 $ 107,770 Receivables from brokerage clients 1,668 4,396 Bonds coupon receivable 813 - Receivable from sale of securities 616 1,498 Bank commissions receivable 352 218 Receivable for underwriting and market-making services 263 67 Other receivables 575 51 Allowance for receivables (234 ) (313 ) Total brokerage and other receivables, net $ 102,522 $ 113,687 |
Loans Issued (Tables)
Loans Issued (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Loans Issued | |
Schedule of Loans issued | Amount Outstanding Due Dates Average Interest Rate Fair Value of Collateral Loan Currency Subordinated loan $ 5,074 December 2022-April 2024 3.69 % - USD Uncollateralized non-bank loan 2,331 January 2021 - February 2021 3.00 % - USD Subordinated loan 1,389 September 2029 7.00 % - UAH Bank customer loans 1,156 July 2020 - May 2044 13.77 % 294 RUB Other loans issued 8 December 2020 4.50 % - EUR $ 9,958 |
Schedule of Other Loans issued | Amount Outstanding Due Dates Average Interest Rate Fair Value of Collateral Loan Currency Subordinated loan $ 5,042 December 2022-April 2024 3.69 % - USD Uncollateralized non-bank loan 2,313 January 2021 - February 2021 3.00 % - USD Bank customer loans 1,635 July 2020 - May 2044 14.31 % 258 RUB Subordinated loan 1,333 September 2029 7.00 % - UAH Uncollateralized non-bank loan 129 March 2021 6.00 % - RUB Other loans issued 9 December 2020 4.50 % - EUR $ 10,461 |
Deferred Tax Assets (Tables)
Deferred Tax Assets (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Deferred Tax Assets | |
Schedule of Deferred tax assets and liabilities | June 30, 2020 March 31, 2020 Deferred tax assets: Tax losses carryforward $ 949 $ 1,691 Accrued liabilities 100 7 Depreciation 4 4 Valuation allowance (586 ) (677 ) Revaluation on trading securities - 72 Deferred tax assets $ 467 $ 1,097 Deferred tax liabilities: Revaluation on trading securities $ 775 $ 513 Other liabilities 14 14 Deferred tax liabilities $ 789 $ 527 Net deferred tax assets/(liabilities) $ (322 ) $ 570 |
Debt Securities Issued (Tables)
Debt Securities Issued (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Debt Securities Issued | |
Schedule of Debt securities issued | June 30, 2020 March 31, 2020 Debt securities issued denominated in USD $ 59,702 $ 64,783 Debt securities issued denominated in RUB 7,148 6,432 Accrued interest 734 1,081 Total $ 67,584 $ 72,296 |
Customer Liabilities (Tables)
Customer Liabilities (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Customer Liabilities | |
Schedule of Customer liabilities | June 30, 2020 March 31, 2020 Brokerage customers $ 717,904 $ 115,922 Banking customers 90,848 52,510 Total $ 808,752 $ 168,432 |
Trade Payables (Tables)
Trade Payables (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Trade Payables | |
Schedule of trade payables | June 30, 2020 March 31, 2020 Margin lending payable $ 36,876 $ 6,101 Payables to suppliers of goods and services 1,023 202 Coupons payable 718 - Trade payable for securities purchased 256 1,860 Other 6 235 Total $ 38,879 $ 8,398 |
Securities Repurchase Agreeme_2
Securities Repurchase Agreement Obligation (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Securities Repurchase Agreement Obligations | |
Schedule of Securities under repurchase agreement obligations | June 30, 2020 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 9.70 % $ 14,022 $ - $ - $ 14,022 Corporate debt 10.88 % 28,169 - - 28,169 Non-U.S. sovereign debt 9.04 % 16,391 - - 16,391 Total securities sold under repurchase agreements $ 58,582 $ - $ - $ 58,582 |
Schedule of Securities sold under repurchase agreements | March 31, 2020 Interest rate 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 12.16 % $ 20,711 $ - $ - $ 20,711 Corporate debt 13.27 % 15,974 - - 15,974 Non-U.S. sovereign debt 13.00 % 11,519 - - 11,519 Total securities sold under repurchase agreements $ 48,204 $ - $ - $ 48,204 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Stock Based Compensation | |
Schedule of 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, March 31, 2020 120,000 $ 1.98 7.52 $ 1,466 Granted - - - - Exercised - - - - Forfeited/cancelled/expired - - - - Outstanding, at June 30, 2020 120,000 $ 1.98 7.27 $ 2,005 Exercisable, at June 30, 2020 - $ - - $ - |
Summary of restricted stock outstanding | Shares Weighted Average Fair Value Outstanding, March 31, 2020 2,275,000 $ 4,777 Granted - - Vested - - Forfeited/cancelled/expired - - Outstanding, at June 30, 2020 2,275,000 $ 4,777 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Leases | |
Summary of lease obligations | Classification on Balance Sheet June 30, 2020 Assets Operating lease assets Right-of-use assets $ 15,527 Total lease assets $ 15,527 Liabilities Operating lease liability Operating lease obligations $ 15,484 Total lease liability $ 15,484 |
Summary of operating lease obligations | Twelve months ending March 31, 2021 - remaining after June 30 $ 5,094 2022 6,384 2023 5,192 2024 1,181 2025 364 Total payments 18,215 Less: amounts representing interest (2,731 ) Lease obligation, net $ 15,484 Weighted average remaining lease term (in months) 26 Weighted average discount rate 12 % |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) $ in Thousands | 3 Months Ended |
Jun. 30, 2020USD ($) | |
Summary of Significant Accounting Policies | |
Goodwill, beginning | $ 2,607 |
Foreign currency translation | (188) |
Goodwill, ending | $ 2,795 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Interest expense | $ 3,744,000 | $ 3,163,000 |
Fee and commission expense | 4,031,000 | |
Operating expense | $ 14,426,000 | 13,130,000 |
Recovery of impairment losses | (1,073,000) | |
Other expense, net | 308,000 | |
Total expenses | 19,559,000 | |
Reclassified | ||
Interest expense | 445,000 | |
Fee and commission expense | 0 | |
Operating expense | 445,000 | |
Recovery of impairment losses | 0 | |
Other expense, net | 0 | |
Total expenses | 0 | |
Previously Reported | ||
Interest expense | 3,608,000 | |
Fee and commission expense | 4,031,000 | |
Operating expense | 12,685,000 | |
Recovery of impairment losses | (1,073,000) | |
Other expense, net | 308,000 | |
Total expenses | $ 19,559,000 |
Cash and Cash Equivalents (Deta
Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 |
Total cash and cash equivalents | $ 199,303 | $ 63,208 |
Current account with Central Depository (Kazakhstan) | ||
Total cash and cash equivalents | 384 | 501 |
Current account with Central Bank (Russia) | ||
Total cash and cash equivalents | 2,331 | 2,726 |
Current account with commercial banks | ||
Total cash and cash equivalents | 41,165 | 14,462 |
Petty cash in bank vault and on hand | ||
Total cash and cash equivalents | 11,842 | 8,981 |
Current account with National Settlement Depository (Russia) | ||
Total cash and cash equivalents | 14,154 | 1,348 |
Current account in clearing organizations | ||
Total cash and cash equivalents | 7,406 | 6,590 |
Securities purchased under reverse repurchase agreements | ||
Total cash and cash equivalents | 6,245 | 9,645 |
Current accounts with brokers | ||
Total cash and cash equivalents | 88,961 | 4,051 |
Accounts with stock exchange | ||
Total cash and cash equivalents | $ 26,815 | $ 14,904 |
Cash and Cash Equivalents (De_2
Cash and Cash Equivalents (Details 1) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
Remaining contractual maturity: up to 30 days | $ 6,077,000 | $ 9,373,000 |
Remaining contractual maturity: 30 - 90 days | 168,000 | 272,000 |
Total contractual maturity | 6,245,000 | 9,645,000 |
Corporate equity | ||
Remaining contractual maturity: up to 30 days | 3,253,000 | 9,212,000 |
Remaining contractual maturity: 30 - 90 days | 0 | 15,000 |
Total contractual maturity | $ 3,253,000 | $ 9,227,000 |
Average interest rate | 13.11% | 14.08% |
Corporate Debt | ||
Remaining contractual maturity: up to 30 days | $ 0 | $ 108,000 |
Remaining contractual maturity: 30 - 90 days | 168,000 | 0 |
Total contractual maturity | $ 168,000 | $ 108,000 |
Average interest rate | 15.00% | 14.25% |
Non-U.S. sovereign debt | ||
Remaining contractual maturity: up to 30 days | $ 2,824,000 | $ 53,000 |
Remaining contractual maturity: 30 - 90 days | 0 | 257,000 |
Total contractual maturity | $ 2,824,000 | $ 310,000 |
Average interest rate | 4.38% | 17.18% |
Cash and Cash Equivalents (De_3
Cash and Cash Equivalents (Details Narrative) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
DERIVATIVE ASSETS | ||
Cash and cash equivalents not insured | $ 250,000,000 | $ 250,000 |
Fair value of collateral received | $ 7,247,000 | $ 10,272,000 |
Restricted Cash (Details)
Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 |
Restricted cash | $ 639,372 | $ 66,597 |
Deferred distribution payments | ||
Restricted cash | 8,534 | 2,097 |
Brokerage customers' cash | ||
Restricted cash | 629,478 | 63,506 |
Guaranty deposits | ||
Restricted cash | 791 | 518 |
Reserve with Central Bank of Russia | ||
Restricted cash | $ 569 | $ 476 |
Restricted Cash (Details Narrat
Restricted Cash (Details Narrative) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Mar. 31, 2020 | |
Deferred distribution payment amount reserve | $ 8,534,000 | |
Available-for-sale securities | $ 6,437 | |
Restricted cash | 639,372,000 | 66,597,000 |
Deferred distribution payments | ||
Restricted cash | $ 8,534,000 | $ 2,097,000 |
Trading and AvailableForSale Se
Trading and AvailableForSale Securities at Fair Value (Details) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
Trading securities | $ 177,084,000 | $ 156,544,000 |
Total Available-for-sale securities, at fair value | 1,000 | 6,438,000 |
Certificate of Deposit | ||
Total Available-for-sale securities, at fair value | 0 | 5,076,000 |
Equity securities | ||
Trading securities | 59,662,000 | 69,530,000 |
Total Available-for-sale securities, at fair value | 1,000 | 1,000 |
Mutual investment funds | ||
Total Available-for-sale securities, at fair value | 0 | 672,000 |
Debt securities | ||
Trading securities | 117,422,000 | 87,014,000 |
Total Available-for-sale securities, at fair value | 0 | 405,000 |
Preferred Shares | ||
Total Available-for-sale securities, at fair value | $ 0 | $ 284,000 |
Trading and AvailableForSale _2
Trading and AvailableForSale Securities at Fair Value (Details 1) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
Trading securities | $ 177,084,000 | $ 156,544,000 |
Total Available-for-sale securities, at fair value | 1,000 | 6,438,000 |
Equity securities | ||
Trading securities | 59,662,000 | 69,530,000 |
Total Available-for-sale securities, at fair value | 1,000 | 1,000 |
Mutual investment funds | ||
Total Available-for-sale securities, at fair value | 0 | 672,000 |
Preferred Shares | ||
Total Available-for-sale securities, at fair value | 0 | 284,000 |
Debt securities | ||
Trading securities | 117,422,000 | 87,014,000 |
Total Available-for-sale securities, at fair value | 0 | 405,000 |
Level 3 | ||
Trading securities | 11,633,000 | 11,259,000 |
Total Available-for-sale securities, at fair value | 1,000 | 1,000 |
Level 3 | Equity securities | ||
Trading securities | 11,633,000 | 11,259,000 |
Total Available-for-sale securities, at fair value | 1,000 | 1,000 |
Level 3 | Preferred Shares | ||
Total Available-for-sale securities, at fair value | 0 | |
Level 3 | Mutual investment funds | ||
Total Available-for-sale securities, at fair value | 0 | |
Level 3 | Debt securities | ||
Total Available-for-sale securities, at fair value | 0 | |
Level 3 | Debt securities | ||
Trading securities | 0 | 0 |
Total Available-for-sale securities, at fair value | 0 | |
Level 2 | ||
Trading securities | 0 | 0 |
Total Available-for-sale securities, at fair value | 0 | 5,765,000 |
Level 2 | Equity securities | ||
Trading securities | 0 | 0 |
Total Available-for-sale securities, at fair value | 0 | 0 |
Level 2 | Preferred Shares | ||
Total Available-for-sale securities, at fair value | 284,000 | |
Level 2 | Mutual investment funds | ||
Total Available-for-sale securities, at fair value | 0 | |
Level 2 | Debt securities | ||
Total Available-for-sale securities, at fair value | 5,076,000 | |
Level 2 | Debt securities | ||
Trading securities | 0 | 0 |
Total Available-for-sale securities, at fair value | 405,000 | |
Level 1 | ||
Trading securities | 165,451,000 | 145,285,000 |
Total Available-for-sale securities, at fair value | 0 | 672,000 |
Level 1 | Equity securities | ||
Trading securities | 48,029,000 | 58,271,000 |
Total Available-for-sale securities, at fair value | 0 | 0 |
Level 1 | Preferred Shares | ||
Total Available-for-sale securities, at fair value | 0 | |
Level 1 | Mutual investment funds | ||
Total Available-for-sale securities, at fair value | 672,000 | |
Level 1 | Debt securities | ||
Total Available-for-sale securities, at fair value | 0 | |
Level 1 | Debt securities | ||
Trading securities | $ 117,422,000 | 87,014,000 |
Total Available-for-sale securities, at fair value | $ 0 |
Trading And AvailableForSale _3
Trading And AvailableForSale Securities At Fair Value (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Mar. 31, 2020 | |
Corporate Debt | ||
Valuation Technique | DCF | |
Fair Value | $ 374 | $ 0 |
Significant Unobservable Inputs | Discount rate | |
Discount Rate | 203.00% | |
Estimated number of years | 10 years | |
Equity securities | ||
Valuation Technique | DCF | |
Fair Value | $ 11,259 | $ 11,259 |
Significant Unobservable Inputs | Discount rate | |
Discount Rate | 9.50% | |
Estimated number of years | 9 years |
Trading And Available For Sale
Trading And Available For Sale Securities At Fair Value (Details 3) | 3 Months Ended |
Jun. 30, 2020USD ($) | |
DERIVATIVE ASSETS | |
Trading securities beginning balance | $ 11,259,000 |
Trading securities Purchase of investments that use Level 3 inputs | 374,000 |
Trading securities ending balance | 11,633,000 |
Available-for-sale securities securities beginning balance | 1,000 |
Available-for-sale securities securities Purchase of investments that use Level 3 inputs | 0 |
Available-for-sale securities securities endining balance | $ 1,000 |
Trading And AvailableForSale _4
Trading And AvailableForSale Securities At Fair Value (Details 4) - Trading Securities [Member] | 12 Months Ended |
Mar. 31, 2020USD ($) | |
Trading securities, beginning balance | $ 504,000 |
Sale of investments that use Level 3 inputs | (497,000) |
Purchase of investments that use Level 3 inputs | 10,430,000 |
Revaluation of investments that use Level 3 inputs | 829 |
Foreign currency translation | (7,000) |
Trading securities, ending balance | 11,259,000 |
Available for sale securities | |
Available for sale securities, beginning balance | 2,000 |
Sale of investments that use Level 3 inputs | 0 |
Purchase of investments that use Level 3 inputs | 0 |
Revaluation of investments that use Level 3 inputs | 0 |
Foreign currency translation | 0 |
Available for sale securities, ending balance | $ 2,000 |
Trading and AvailableForSale _5
Trading and AvailableForSale Securities at Fair Value (Details 5) - USD ($) | 3 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Mar. 31, 2020 | |
Assets measured at amortized cost | $ 1 | $ 6,509,000 |
Unrealized gain accumulated in other comprehensive income | 0 | (71,000) |
Assets measured at fair value | 1,000 | 6,438,000 |
Certificate of Deposit | ||
Assets measured at amortized cost | 1,000 | 5,050,000 |
Unrealized gain accumulated in other comprehensive income | 0 | 26,000 |
Assets measured at fair value | 0 | 5,076,000 |
Equity securities | ||
Assets measured at amortized cost | 1,000 | 1,000 |
Unrealized gain accumulated in other comprehensive income | 0 | 0 |
Assets measured at fair value | 1,000 | 1,000 |
Debt securities | ||
Assets measured at amortized cost | 456,000 | |
Unrealized gain accumulated in other comprehensive income | (51,000) | |
Assets measured at fair value | 0 | 405,000 |
Preferred Shares | ||
Assets measured at amortized cost | 306,000 | |
Unrealized gain accumulated in other comprehensive income | (22,000) | |
Assets measured at fair value | $ 0 | 284,000 |
Mutual Funds | ||
Assets measured at amortized cost | 696,000 | |
Unrealized gain accumulated in other comprehensive income | (24,000) | |
Assets measured at fair value | $ 672,000 |
DERIVATIVE ASSETS (Details Narr
DERIVATIVE ASSETS (Details Narrative) $ / shares in Units, $ in Thousands | Jun. 30, 2020USD ($)$ / sharesshares |
Call option, value | $ | $ 2,391 |
Call Option 1 [Member] | |
Common stock, shares purchase | shares | 61,600 |
Exercise price | $ / shares | $ 0.0122 |
Expiration date | Oct. 1, 2020 |
Call Option [Member] | |
Common stock, shares purchase | shares | 92,400 |
Exercise price | $ / shares | $ 0.008115 |
Expiration date | Oct. 1, 2020 |
BROKERAGE AND OTHER RECEIVABL_3
BROKERAGE AND OTHER RECEIVABLES, NET (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 |
Brokerage and other receivables, net | $ 102,522 | $ 113,687 |
Margin lending receivables | ||
Brokerage and other receivables, net | 98,469 | 107,770 |
Receivable from purchase or sale of securities | ||
Brokerage and other receivables, net | 616 | 1,498 |
Bank commissions receivable | ||
Brokerage and other receivables, net | 352 | 218 |
Receivables from brokerage clients | ||
Brokerage and other receivables, net | 1,668 | 4,396 |
Receivable for underwriting market-making services | ||
Brokerage and other receivables, net | 263 | 67 |
Allowance for receivables | ||
Brokerage and other receivables, net | (234) | (313) |
Bonds Coupon Receivable [Member] | ||
Brokerage and other receivables, net | 813 | 0 |
Other receivables | ||
Brokerage and other receivables, net | $ 575 | $ 51 |
BROKERAGE AND OTHER RECEIVABL_4
BROKERAGE AND OTHER RECEIVABLES, NET (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 |
BROKERAGE AND OTHER RECEIVABLES, NET (Details Narrative) | ||
Allowance for brokerage receivables | $ 234 | $ 313 |
Due from related party customer percentage | 6600.00% | 8000.00% |
Due from related party customer | $ 68,135 | $ 90,696 |
Loans Issued (Details)
Loans Issued (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Mar. 31, 2020 | |
Loans issued | $ 9,958,000 | $ 10,461,000 |
Uncollateralized non-bank loan 1 | ||
Loans issued | 0 | $ 129,000 |
Due dates | March 2021 | |
Weighted average interest rate | 6.00% | |
Fair value of collateral | 0 | $ 0 |
Subordinated loan 1 | ||
Loans issued | $ 1,389,000 | $ 1,333,000 |
Weighted average interest rate | 7.00% | 7.00% |
Due dates | September 2029 | September 2029 |
Fair value of collateral | $ 0 | $ 0 |
Bank customer loans | ||
Loans issued | $ 1,156,000 | $ 1,635,000 |
Weighted average interest rate | 13.77% | 14.31% |
Due dates | July 2020 - May 2044 | July 2020 - May 2044 |
Fair value of collateral | $ 294,000 | $ 258,000 |
Subordinated loan | ||
Loans issued | $ 5,074,000 | $ 5,042,000 |
Weighted average interest rate | 3.69% | 3.69% |
Due dates | December 2022-April 2024 | December 2022-April 2024 |
Fair value of collateral | $ 0 | $ 0 |
Uncollateralized non-bank loan | ||
Loans issued | $ 2,331,000 | $ 2,313,000 |
Weighted average interest rate | 3.00% | 3.00% |
Due dates | January 2021 - February 2021 | January 2021 - February 2021 |
Fair value of collateral | $ 0 | $ 0 |
Other loans issued | ||
Loans issued | $ 8,000 | $ 9,000 |
Weighted average interest rate | 4.50% | 4.50% |
Due dates | December 2020 | December 2020 |
Fair value of collateral | $ 0 | $ 0 |
Deferred Tax Assets (Details)
Deferred Tax Assets (Details) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
Deferred tax asset: | ||
Tax losses carryforward | $ 949,000 | $ 1,691,000 |
Accrued liabilities | 100,000 | 7,000 |
Stock compensation expenses | 4,000 | 4,000 |
Valuation allowance | (586,000) | (677,000) |
Revaluation on trading securities | 0 | 72,000 |
Deferred tax assets | 467,000 | 1,097,000 |
Deferred tax liabilities: | ||
Revaluation on trading securities | 775,000 | 513,000 |
Other liabilities | 14,000 | 14,000 |
Deferred tax liabilities | 789,000 | 527,000 |
Net deferred tax assets | $ (322,000) | $ 570,000 |
Deferred Tax Assets (Details Na
Deferred Tax Assets (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2020 | |
Tax losses carryforward | $ 949 | $ 1,691 | |
Income tax rate | 15.94% | 15.23% | |
United States | |||
Income tax rates used for deferred tax assets and liabilities | 21.00% | 2100.00% | |
Russian Federation | |||
Income tax rates used for deferred tax assets and liabilities | 2000.00% | ||
Cyprus | |||
Income tax rates used for deferred tax assets and liabilities | 125.00% | ||
Ukraine | |||
Income tax rates used for deferred tax assets and liabilities | 1800.00% | ||
Uzbekistan | |||
Income tax rates used for deferred tax assets and liabilities | 1500.00% | ||
Germany | |||
Income tax rates used for deferred tax assets and liabilities | 3100.00% | ||
Kazakhstan | |||
Income tax rates used for deferred tax assets and liabilities | 20.00% |
Debt Securities Issued (Details
Debt Securities Issued (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 |
Debt Securities Issued | ||
Debt securities issued denominated in USD | $ 59,702 | $ 64,783 |
Debt securities issued denominated in RUB | 7,148 | 6,432 |
Accrued interest | 734 | 1,081 |
Debt securities issued | $ 67,584 | $ 72,296 |
Debt Securities Issued (Detai_2
Debt Securities Issued (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2020 | Jun. 27, 2020 | Mar. 31, 2020 | |
Debt Securities Issued (Details Narrative) | |||
Annual rate | 0.70% | ||
Debt securities | $ 20,496 | ||
Debt securities issued | $ 67,584 | $ 72,296 | |
Coupon rates | 65.00% | 1200.00% | |
Debt description | The Company’s debt securities also include $20,496 in the aggregate amount of notes of FRHC issued from December 2019 to February 2020. The FRHC notes, denominated in USD, have minimum denominations of $100,000, bear interest at an annual rate of 7.000% and are due in 2022.The FRHC notes were issued under Astana International Financial Centre law and trade on the AIX. | ||
Carrying value | $ 4,182 | ||
Dollar denominated percentage | 800.00% | ||
Debt accrued interest | $ 734 | $ 166 | $ 1,080 |
Customer Liabilities (Details)
Customer Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 |
Customer liabilities | $ 808,752 | $ 168,432 |
Brokerage customers | ||
Customer liabilities | 717,904 | 115,922 |
Banking customers | ||
Customer liabilities | $ 90,848 | $ 52,510 |
Customer Liabilities (Details N
Customer Liabilities (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 |
Customer Liabilities (Details Narrative) | ||
Current accounts | $ 29,399 | $ 25,384 |
Deposits | $ 61,449 | $ 27,126 |
Trade Payables (Details)
Trade Payables (Details) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
Trade payables | $ 38,879,000 | $ 8,398,000 |
Margin lending payable | ||
Trade payables | 36,876,000 | 6,101,000 |
Trade payable for securities purchased | ||
Trade payables | 256,000 | 1,860,000 |
Payables to suppliers of goods and services | ||
Trade payables | 1,023,000 | 202,000 |
Coupons Payable | ||
Trade payables | 718,000 | 0 |
Other | ||
Trade payables | $ 6,000 | $ 235,000 |
Trade Payables (Details Narrati
Trade Payables (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 |
Trade payables | $ 29,399 | $ 25,384 |
Rrelated Party [Member] | ||
Related party due percentage | 5700.00% | 5100.00% |
Trade payables | $ 22,230 | $ 4,306 |
Securities Repurchase Agreeme_3
Securities Repurchase Agreement Obligation (Details) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
Remaining contractual maturity: up to 30 days | $ 58,582,000 | $ 48,204,000 |
Remaining contractual maturity: 30 - 90 days | 0 | 0 |
Remaining contractual maturity: Over 90 days | 0 | 0 |
Total contractual maturity | 58,582,000 | 48,204,000 |
Corporate equity | ||
Remaining contractual maturity: up to 30 days | 14,022,000 | 20,711,000 |
Remaining contractual maturity: 30 - 90 days | 0 | 0 |
Remaining contractual maturity: Over 90 days | 0 | 0 |
Total contractual maturity | $ 14,022,000 | $ 20,711,000 |
Average interest rate | 9.70% | 12.16% |
Corporate Debt | ||
Remaining contractual maturity: up to 30 days | $ 28,169,000 | $ 15,974,000 |
Remaining contractual maturity: 30 - 90 days | 0 | 0 |
Remaining contractual maturity: Over 90 days | 0 | 0 |
Total contractual maturity | $ 28,169,000 | $ 15,974,000 |
Average interest rate | 10.88% | 13.27% |
Non-U.S. sovereign debt | ||
Remaining contractual maturity: up to 30 days | $ 16,391,000 | $ 11,519,000 |
Remaining contractual maturity: 30 - 90 days | 0 | 0 |
Remaining contractual maturity: Over 90 days | 0 | 0 |
Total contractual maturity | $ 16,391,000 | $ 11,519,000 |
Average interest rate | 9.04% | 13.00% |
Securities Repurchase Agreeme_4
Securities Repurchase Agreement Obligation (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 |
Corporate equity | ||
Fair value of collateral pledged | $ 65,499 | $ 54,222 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2020 | |
Commission income | $ 30,790,000 | $ 19,826,000 | |
Commission expenses | 2,445,000 | $ 924,000 | |
Loans issued to related parties | 739,000 | $ 1,477,000 | |
Bank commission receivables | 8,982,000 | 8,982 | |
Margin lending receivables | 83,401,000 | 105,892,000 | |
Receivables from brokerage | 3,611,000 | 3,611 | |
Accounts payable | 303,000 | 1,879,000 | |
Lending payables | 32,495,000 | 4,306,000 | |
Bank Account [Member] | |||
Customer liabilities | 26,150 | 26,150,000 | |
Brokerage Accounts [Member] | |||
Customer liabilities | 579,661,000 | ||
Restricted customer cash | 12,574,000 | 25,563,000 | |
Cash and cash equivalents | $ 216,000 | $ 212,000 |
STOCKHOLDERS EQUITY (Details Na
STOCKHOLDERS EQUITY (Details Narrative) - USD ($) $ in Thousands | Oct. 06, 2017 | Jun. 30, 2020 | Jun. 30, 2019 |
STOCKHOLDERS EQUITY (Details Narrative) | |||
Common stock, shares outstanding, nonqualified stock options | $ 0 | $ 99 | |
Common stock, restricted stock awarded | 3,900,000,000 | ||
Aggregate shares purchase | 360,000 | ||
Vesting conditions shares | 2,700,000 | ||
Stock grant awards | 1,200,000 | ||
Agreement description | the Company awarded restricted stock grants totalling 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. | ||
Stock-based compensation expense | $ 525 | $ 773 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) | 3 Months Ended |
Jun. 30, 2020 | |
Stock Based Compensation | |
Term (years) | 3 years |
Volatility | 165.33% |
Risk-free rate | 1.66% |
Stock Based Compensation (Det_2
Stock Based Compensation (Details 1) | 3 Months Ended |
Jun. 30, 2020USD ($)$ / sharesshares | |
Stock Based Compensation | |
Number of options outstanding, beginning | shares | 120,000,000 |
Number of options exercised | shares | 0 |
Number of options forfeited/cancelled/expired | shares | 0 |
Number of options outstanding, ending | shares | 120,000,000 |
Number of options exercisable | shares | 0 |
Weighted average exercise price outstanding, beginning | $ 1.98 |
Weighted average exercise price granted | 0 |
Weighted average exercise price exercised | 0 |
Weighted average exercise price forfeited/cancelled/expired | 0 |
Weighted average exercise price outstanding, ending | 1.98 |
Weighted average exercise price exercisable | $ 0 |
Weighted average remaining contractual term outstanding, beginning | 7 years 6 months 7 days |
Weighted average remaining contractual term outstanding, ending | 7 years 3 months 7 days |
Aggregate intrinsic value outstanding, beginning | $ | $ 1,466,000 |
Aggregate intrinsic value granted | $ 0 |
Aggregate intrinsic value exercised | $ | $ 0 |
Aggregate intrinsic value forfeited/cancelled/expired | $ 0 |
Aggregate intrinsic value outstanding, ending | $ | $ 2,005,000 |
Aggregate intrinsic value exercisable | $ | $ 0 |
Stock Based Compensation (Det_3
Stock Based Compensation (Details 2) | 3 Months Ended |
Jun. 30, 2020USD ($)$ / sharesshares | |
Stock Based Compensation | |
Restricted stock outstanding, beginning | 2,275,000,000 |
Restricted stock granted | 0 |
Restricted stock vested | 0 |
Restricted stock forfeited/cancelled/expired | 0 |
Number of restricted stock units outstanding, ending | 2,275,000,000 |
Weighted average exercise price outstanding, beginning | $ | $ 4,777 |
Weighted average exercise price granted | $ / shares | $ 0 |
Weighted average exercise price vested | $ / shares | 0 |
Weighted average exercise price forfeited/cancelled/expired | $ / shares | $ 0 |
Weighted average exercise price outstanding, ending | $ | $ 4,777 |
Stock Based Compensation (Det_4
Stock Based Compensation (Details Narrative) - USD ($) $ / shares in Units, shares in Thousands | Oct. 06, 2017 | Jun. 30, 2020 | Jun. 30, 2019 |
Weighted average period | 26 years | ||
Common stock, restricted stock awarded | 3,900,000 | ||
October 6, 2017 [Member] | |||
Purchase aggregate shares | 360,000 | ||
Strike price per share | $ 1.98 | ||
Common stock, restricted stock awarded | 3,900,000 | ||
Agreement description | 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 of $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. | ||
Non-Vested Shares [Member] | |||
Weighted average period | 3 months 7 days | ||
Unrecognized compensation cost | $ 507 | ||
Compensation expense | 54,000 | $ 54,000 | |
Restricted Stock [Member] | |||
Compensation expense | $ 471,000 | 719,000 | |
Stock Option [Member] | |||
Weighted average period | 3 months 7 days | ||
Compensation expense | $ 58,000 | $ 58 |
Leases (Details)
Leases (Details) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
Leases | ||
Operating lease assets - Right-of-use assets | $ 0 | $ 15,527,000 |
Total lease assets | 15,527,000 | |
Operating lease liability | 15,484,000 | |
Total lease liability | $ 15,484,000 | $ 15,484,000 |
Leases (Details 1)
Leases (Details 1) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 |
Leases | ||
2021 - remaining after June 30 | $ 5,094 | |
2022 | 6,384 | |
2023 | 5,192 | |
2024 | 1,181 | |
2025 | 364 | |
Total payments | 18,215 | |
Less: amounts representing interest | 2,731 | |
Lease obligation, net | $ 15,484 | $ 15,484 |
Weighted average remaining lease term (in months) | 26 years | |
Weighted average discount rate | 1200.00% |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Mar. 31, 2020 | |
Leases | ||
Rent expenses | $ 101 | $ 122 |
Short term operating lease | $ 479 |