Securities & Asset Management: Related party transactions (ASC 850)

We have engaged in related party transactions and arrangements, in particular with companies controlled by our Chief Executive Officer Timur Turlov, and we expect to continue to do so from time to time going forward.

For example, during the recent years we had an arrangement with microfinance organization Freedom Finance Credit ("FFIN Credit"), a company outside of the FRHC group which is controlled by Mr. Timur Turlov, through the purchase of right of claims of retail loans. Beginning in September 2025, Freedom Bank KZ transferred retail loan origination to its internal platform and ceased purchasing unsecured consumer loans from FFIN Credit. As of March 31, 2026, we do not use FFIN Credit as a source of retail loan origination. Loans previously acquired from FFIN Credit remain on our balance sheet and continue to expose us to credit and servicing risks until they are fully repaid or otherwise settled.

During the fiscal year ended March 31, 2026 the Group incurred advertising and sponsorship expense from Kazakhstan Chess Federation in the amount of $10,026 thousand. Kazakhstan Chess Federation is a Kazakhstan-based company in which Mr. Timur Turlov holds a management position. The Group continues to support the development of chess as a sport in Kazakhstan. During the fiscal year ended March 31, 2026, the Group has made financial contributions to the Kazakhstan Chess Federation to support the preparation and holding of championships, tournaments, training camps and other events.

Related party transactions and arrangements we enter into subject us to certain risks. In particular, related-party transactions present potential conflicts of interest that could result in decisions that prioritize the economic interests of certain individuals over those of our company and its stockholders. In the event of a dispute under any related-party agreement, the interests of affiliated parties may not align with ours, and the resolution of such disputes may be less favorable than what we might achieve in a transaction with an unaffiliated third party. In addition, related-party transactions are generally regarded as increasing the risk of misstatements or omissions in financial reporting, the risk of transactions being done on other than arm’s length terms due to the close ties between the parties involved and the risk of regulatory non-compliance.

Competition in the markets in which we operate may result in a decrease in our market share and/or profitability.