The company operates an equity based share option scheme to certain employees which provides additional remuneration for those employees who are key to the company. Options are granted under an approved EMI option plan at an exercise price equalling the value agreed with HMRC and under an unapproved option plan, with the exercise price equalling a value which is compliant with IRC section 409A in the US obtained from an independent valuer. The options expire ten years after the date of the grant. Employees are not entitled to dividends until the shares are exercised. All options granted have performance conditions relating to the relevant employee remaining in the employment of the company at exercise.
A reconciliation of share option movements during the year ended 31 March 2022 is shown below:
Number of options - weighted average exercise price per share
Outstanding as at 1 April 2020: 653,332 - £0.20
Granted during the year: 1,531,692 - £0.138
Expired during the year: (653,332) - (£0.20)
Exercised during the year: (0) - (£0)
Outstanding as at 31 March 2021: 1,531,692 - £0.138
Granted during the year: 156,500 - £0.001
Fofeited during the year: Nil - (£Nil)
Exercised during the year: (39,444) - (£0.001)
Outstanding as at 31 March 2022: 1,648,748 - £0.128
Exercisable at 31 March 2022: 483,330 - £0.125
The company is unable to directly measure the fair value of the share options. Instead the fair value of the share options granted during the year is determined using the Black-Scholes model. The model is internationally recognised as being appropriate to value share option schemes similar to that of the company.
Equity settled schemes - charges arising: £598,647