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SHARE OPTIONS AND WARRANTS
 12 Months Ended
Mar. 31, 2022
Share Options And Warrants  
SHARE OPTIONS AND WARRANTS

 

14. SHARE OPTIONS AND WARRANTS

 

Options

 

The Company operates share-based payment arrangements to remunerate Directors and key employees in the form of a share option scheme. It also issues options in lieu of fees to key suppliers and collaborators. 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.

 

   2022   2021 
   Options   Weighted
Average
exercise price
(cents)		   Options   Weighted
Average
exercise price
(cents)		 
Outstanding at 1 April   60,750,000    6.90    19,500,000    5.58 
Granted   28,150,000    8.41    42,250,000    7.31 
Forfeited   (16,500,000)   5.91    (750,000)   6.21 
Exercised   -    -    (250,000)   6.21 
Outstanding at 31 March   72,400,000    7.49    60,750,000    6.90 
Exercisable at 31 March   14,437,500    7.36    9,250,000    6.21 

 

   2020 
   Weighted
Average
exercise price
(cents)		   Options 
Outstanding at 1 April   5.58    23,000,000 
Granted   -    - 
Forfeited   (5.58)   (3,500,000)
Exercised   -    - 
Outstanding at 31 March   5.58    19,500,000 
Exercisable at 31 March   5.58    4,875,000 

 

 

During the year ending 31 March 2022, no options were exercised. During the year ending 31 March 2021, 250,000 options were exercised.

 

The total outstanding fair value charge of the share option instruments is deemed to be approximately $2,072,515 (2021: $2,682,050). A share-based payment charge for the year of $1,718,727 (2021: $545,582) has been expensed in the statement of comprehensive income. The share based payment charge in the year to March 31, 2022 includes a forfeiture of $19,149.

 

The weighted average contractual life of options outstanding at March 31, 2022 is 7.77 years. (2021: 8.07 years).

 

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 March 2022
(‘000)		 
6 July 2018  6 July 2025   4.5p    2,000 
20 August 2020  19 August 2028   15.5p    750 
6 January 2021  5 January 2031   5p    40,000 
12 January 2021  11 January 2031   7.9p    1,500 
15 April 2021  15 April 2031   7.88p    5,000 
31 August 2021  31 August 2031   4.9p    14,400 
31 January 2022  30 January 2032   8.0p    8,750 
Total           72,400 

 

Fair value of options granted

 

The Directors have used the Black-Scholes option pricing model to estimate the fair value of most of the options applying the assumptions below.

 

Historical volatility relies in part on the historical volatility of a group of peer companies that management believes is generally comparable to the Company.

 

The Company has not paid any dividends on share capital since its inception and does not anticipate paying dividends on its share capital in the foreseeable future.

 

The Company has estimated a forfeiture rate of zero.

 

 

The model inputs for options granted during the year ended 31 March 2022 valued under the Black Scholes Valuation model are:

 

       Grant Date 
   15 April 2021   31 August 2021   31 January 2022 
             
Grant date share price   7.7p   4.9p   4.8p
Exercise share price   7.9p   4.9p   8.0p
Vesting periods   25% each year    25% each year    1.25m options vest 33% each year and 7.5m options have developmental milestone performance conditions  
                
Risk free rate   0.35%   0.30%   0.97%
Expected volatility   80.20%   77.7%   83.0%
Option life   5 years    5 years    5 years 

 

 

The model inputs for options granted during the year ended 31 March 2021 valued under the Black Scholes Valuation model included:

 

  

20 August

2020

  

6 January

2021

   12 January
2021		 
Grant date share price   15.5p   0.8p   0.79p
Exercise share price   15.5p   0.5p   0.79p
Vesting periods   25% each year    25% each year     33% in 6 months and 67% in 1 year 
Risk free rate   0.15%   -0.01%   0.4%, 0.6%
Expected volatility   77.4%   77.5%   66.7%, 83.7%
Expected option life   5 years    5 years    6 months to 1 year 

 

Warrants

 

As part of the acquisition of the OK-101 project, the underlying scientific founders of the OK-101 Project (inukshuk Holdings), who will continue to be involved in the development of the Project, received 35,000,000 warrants as consideration. The warrants are exercisable at a price of 4.5 pence each and are split into four distinct tranches and each tranche becomes exercisable upon satisfaction of a specific developmental milestone. The warrants are exercisable until 17 July 2023.

 

In May 2019, warrants were granted over 36,363,636 shares at an exercise price of 1.35p per share in connection with a private placement. These warrants were exercised in May 2021.

 

In March 2020, warrants were granted over 40,000,000 shares at an exercise price of 0.55p per share in connection with a private placement. These warrants were exercised on a cashless basis in February 2022 (post a price reduction offer to 0.012p), resulting in the issuance of 39,400,000 shares.

 

In March 2020, warrants were granted over 35,825,130 shares at an exercise price of 0.55p per share in connection with a private placement. These warrants were exercised in May 2021.

 

In April 2020, warrants were granted over 36,174,870 shares at an exercise price of 0.55p per share in connection with a private placement. These warrants were exercised in May 2021.

 

In May 2020, warrants were granted over 909,090 shares at an exercise price of 2.75p per share in in lieu of professional fees. The warrants are exercisable until 21 May 2023.

 

In July 2020, warrants were granted over 750,000 shares at an exercise price of 14p per share in in lieu of broker fees. The warrants are exercisable until 20 July 2022.

 

In May 2021, warrants were granted over 76,605,760 shares at an exercise price of 0.4p per share in connection with the conversion of convertible loan notes. 39,605,760 were exercised immediately and the remaining 37,000,000 were exercised on a cashless basis in February 2022 (post a price reduction offer to 0.012p), resulting in the issuance of 36,445,000 shares.

 

In February 2022, warrants were granted over 165,176,000 shares at an exercise price of 0.4p per share in connection with the conversion of convertible loan notes. 165,176,000 were exercised on a cashless basis in February 2022(post a price reduction offer to 0.012p), resulting in the issuance of 162,698,360 shares.

 

In summary, during the year, 147,969,396 warrants were exercised for proceeds of £1,045,332, resulting in the issuance of 147,969,396 shares. 242,716,000 warrants were also exercised on a cashless basis resulting in the issuance of 238,543,360 shares.

 

 

   31 March 2022   31 March 2021 
   Warrants   Weighted Average exercise price (cents)   Warrants   Weighted Average exercise price (cents) 
                 
Outstanding at 1 April   185,022,726    2.1    147,188,766    2.1 
Granted   241,781,760    0.5    37,833,960    1.2 
Exercised   (390,145,396)   0.7    -    - 
                     
                     

Outstanding at 31 March

   36,659,090    6.11    185,022,726    2.1 
                     
Exercisable at 31 March   1,659,090    10.30    149,568,181    1.1 

 

The Directors have estimated the fair value of the warrants in services provided using the Black-Scholes valuation model based on the assumptions below.

 

The model inputs for warrants granted during the year ended 31 March 2022 valued under the Black Scholes Valuation model included:

 

   29 May 2020 
     
Grant date share price   1.75p
Exercise share price   0.4p
      
Risk free rate   0.25%
Expected volatility   79.6%
Expected life   3 years 

 

The Directors have estimated the fair value of the warrants in services provided during the year ending 31 March 2021 using the Black-Scholes valuation model based on the assumptions below.

 

   July 2020  May 2020 

April

2020

Grant date share price   8.3p  2.8p  1.8p
Exercise share price   14p  2.8p  0.5p
Vesting periods   Fully vested  50% of these warrants shall only vest if the 5-day VWAP of the Company exceeds a 100% premium to the Exercise Price, and the remainder shall only vest if the 5-day VWAP of the Company exceeds a 200% premium to the Exercise Price (conditions have been met)  Fully vested
           
Risk free rate    0.68%  0.95%  0.22%
Expected volatility    88.1%  79.6%  82.4%
Expected life   2 years  3 years  5 years

 

The remaining fair value of the warrant instruments is deemed to be approximately $43,348 (2021: $108,873). For the consideration warrants, the charge has been expensed over the vesting period. For all other warrants, the charge has been expensed over the service period. A share-based payment charge for the year of $61,721 (2021: $81,914) has been expensed in the statement of comprehensive income.