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Share Based Payments

12 Months Ended

Dec. 31, 2023

14. SHARE BASED PAYMENTS

Group and Company Options

The Company operates share-based payment arrangements to remunerate directors and key employees in the form of a share option scheme. The exercise price of the option is normally equal to the market price of an ordinary share in the Company at the date of grant. The Company is currently operating two plans (Tiziana Life Sciences PLC) Share Option Plan which is closed for any new issuances and the Tiziana Life Sciences Ltd 2021 Equity Incentive Plan.

Tiziana Life Sciences PLC Share Option Plan

	2023						2022 Restated						2021
	Weighted						Weighted						Weighted
	Average exercise price (cents)			Options (’000)			Average exercise price (cents)			Options (’000)			Average exercise price (cents)		Options (’000)

Outstanding at 1 January		59			6,724			90			22,234			67		17,024
Granted		-			-			-			-			166		5,210
Forfeited/Cancelled		(44	)		(103	)		(92	)		(15,510	)		-		-
Exercised		-			-			-			-			-		-

Outstanding at 31 December		62			6,621			59			6,724			90		22,234

Exercisable at 31 December		60			2,829			58			2,732			54		7,616

No options were exercised during 2023, 2022 or 2021.

The total outstanding fair value charge of the share option instruments is deemed to be approximately $2,602k (2022: $3,223k (restated), 2021: $12,339k).

Under the Tiziana Life Sciences PLC Share Option Plan, the total expense recognized for the year ending 31 December 2023 arising from share – based payment transactions under the Tiziana Life Sciences PLC Share Option Plan is $703k of which $51k relates to forfeitures during the year (2022 $1,199k, 2021: $5,173k).

Share options outstanding at the end of the year have the following expiry dates and exercise prices:

Grant Date	Expiry Date	Exercise Price		Share Options at 31 December 2023 (’000)
26 June 2014	26 June 2024	$	0.47		1,831
30 April 2018	30 April 2028	$	1.10		500
6 May 2020	5 May 2028	$	0.47		3,690
23 July 2020	26 July 2030	$	2.11		100
25 August 2020	24 August 2030	$	1.98		500
Total					6,621

Fair value of options granted

The Directors have used the Black-Scholes-Merton option pricing model to estimate the fair value of all of the options granted during the year to December 31, 2023, applying the assumptions below.

Historical volatility is based on the historical volatility of the Company itself.

The Company has estimated a forfeiture rate of zero.

The model inputs for options granted during the year ended 31 December 2022 valued under the Black-Scholes-Merton model included:

	4 November 2022		1 August 2022

Grant date share price	$	0.679	$	0.741
Exercise share price	$	0.679	$	0.741
Risk free rate		-0.10% to -0.02%		0.32% to 0.65%
Expected volatility		99% to 122%		90% to 126%
Option life		10 years		10 years
Weighted average share price	$	0.67	$	0.741
Weighted average fair value per share option	$	0.690	$	0.690

For the options issued in August 2020 with a market condition attached, the Directors have used the Monte Carlo simulation to estimate the fair value of these options. The Company uses the following methods to determine its underlying assumptions:

●

expected volatilities are based on the historical volatilities of the market;

●

the expected term of the award is 4 years and is based on managements’ assessment of when the market condition is likely to be achieved; and

●

a range of fair values per share were produced and management have determined the most appropriate value based on their knowledge of the market and vesting conditions being fulfilled.

Modification of share – based payments.

In May 2020, the Company reduced the exercise price for options issued to employees and directors to $0.48 (£0.35). This was approved by shareholders at a General Meeting held on May 6, 2020.

The fair value of the modified options at the date of modification was determined using the option pricing models as described above. The incremental fair value was recognized as an expense over the period from the modification date to the end of the vesting period. The expense for the original option grant will continue to be recognized as if the terms had not been modified.

The fair value of the modified options was determined using the same models and principles as described above.

Tiziana Life Sciences Ltd Share Option Plan

	2023						2022
	Weighted						Weighted
	Average exercise price (cents)			Options (’000)			Average exercise price (cents)		Options (’000)

Outstanding at 1 January		69			2,575			-		-
Granted		61			1,753			69		2,575
Forfeited/Cancelled		(57	)		(60	)		-		-
Exercised		-			-			-		-

Outstanding at 31 December		73			4,268			69		2,575

Exercisable at 31 December		-			-			-		-

No options were exercised during 2023, 2022 or 2021.

The total outstanding fair value charge of the share option instruments is deemed to be approximately $974k (2022: $1,176k)

Under the Tiziana Life Sciences Ltd 2021 Equity Incentive Plan, the total expenses recognized for the year ending 31 December 2023 arising from share - based payment transactions are $1,019k, not including a charge of $57k for forfeitures during the year. (2022:$332k)

	26 July 2023			14 March 2023

Grant date share price	$	0.67		$	0.57
Exercise share price	$	0.67		$	0.57
Risk free rate		3.88	%		3.88	%
Expected volatility		118	%		119	%
Option life		10 years			10 years
Weighted average share price	$	0.67		$	0.57
Weighted average fair value per share option	$	0.67		$	0.57

Share options outstanding at the end of the year have the following expiry dates and exercise prices:

Grant Date	Expiry Date	Exercise Price		Share Options as at 31 December 2023 (’000)
01 August 2022	01 August 2032	$	0.74		725
04 November 2022	04 November 2032	$	0.67		1,850
14 March 2023	14 March 2033	$	0.57		993
26 July 2023	26 July 2033	$	0.67		700
Total					4,268

Group and Company Warrants

No warrants were issued in 2022 or 2023. For warrants issued in 2020, the Directors have estimated the fair value of the warrants using the Black-Scholes valuation model and assumptions below:

	21 January 2020			21 January 2020			1 June 2020

Grant date share price	£	0.43		£	0.43		£	1.15
Exercise share price	£	0.42		£	0.35		£	0.70
Risk free rate		0.64	%		0.40	%		0.04	%
Expected volatility		61.7	%		84.7	%		111	%

	2023 $000			2022 $000		2021 $000

Outstanding at 1 January		697			697		697
Exercised		(438	)		-		-
Expired		(259	)		-		-

Outstanding at 31 December		-			697		697

No share-based payment charges relating to warrants were recorded during 2023, 2022 or 2021. Approximately $26K of share-based payment charges are included in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2020.