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Share Based Payments

12 Months Ended

Jun. 30, 2025

16. SHARE BASED PAYMENTS

At the Annual General Meeting held on November 17, 2004, the shareholders approved the establishment of employee and consultant plans designed to reward directors, employees and consultants for their contributions to the Group. The plans are to be used as a method of retaining key personnel for the growth and development of the Group. Due to Alterity’s U.S. presence, a U.S. plan (the 2018 ADS Plan) and an Australian plan (the 2004 ASX Plan) were developed.

As of June 30, 2025, equity had been issued to 4 Directors, 1 Key Management Personnel, 7 employees and 3 consultants under the 2004 ASX Plan and 2018 ADS Plan.

As of June 30, 2024, equity had been issued to 3 Directors, 1 Key Management Personnel, 7 employees and 4 consultants under the 2004 ASX Plan and 2018 ADS Plan.

As of June 30, 2023, equity had been issued to 4 Directors, 2 Key Management Personnel, 9 employees and 3 consultants under the 2004 ASX Plan and 2018 ADS Plan.

At the 2004 Annual General Meeting, shareholders authorized the Group to issue in the aggregate up to 12 million ordinary shares under the two plans. This was increased to 22 million ordinary shares at the 2005 Annual General Meeting and further increased to 30 million ordinary shares at the 2007 Annual General Meeting, 45 million ordinary shares at the 2008 Annual General Meeting and 60 million ordinary shares at the 2009 Annual General Meeting. At the September 2020 General Meeting, shareholders authorized the Group to issue up to 157.5 million securities. At the 2020 Annual General Meeting, shareholders authorized the Group to issue up to 200 million ordinary shares. At the 2022 Annual General Meeting, shareholders authorized the Group to issue up to 240 million ordinary shares. At the 2024 Annual General Meeting, shareholders authorized the Group to issue up to 450 million ordinary shares.

The Share Plan Committee, a sub-committee of the Remuneration Committee, administers the two plans and is able to change the terms of the equity issued under them from the default terms.

Under the 2018 ADS Plan, the exercise price must equal or exceed the fair value of the ADS on the date the options are awarded. The option expiration date cannot exceed ten years from the date the options were awarded. The default vesting conditions are 25% per year on the date the options were awarded.

Under the 2004 ASX Plan, the exercise price must be equal or be less than the market value of the ordinary shares on ASX on the date of grant. The option expiration date cannot exceed ten years from the date the options were granted. The default vesting conditions are 25% per year on the date the options were granted.

Information with respect to the number of options granted under the 2004 ASX Plan and 2018 ADS Plan as follows:

	Years Ended June 30,
	2025					2024					2023
	Number of Options			Weighted Average Exercise Price (A$)		Number of Options			Weighted Average Exercise Price (A$)		Number of Options			Weighted Average Exercise Price (A$)
Beginning of the year		381,542,720			0.022		170,042,720			0.047		184,692,720			0.05
Issued during the year		-					217,000,000			0.004		-			-
Exercised during the year		(6,333,333	)		0.004		-			-		-			-
Expired during the year		(12,000,000	)		.07		-			-		(13,150,000	)		0.11
Forfeited during the year		(4,650,000	)		0.036		(5,500,000	)		0.036		(1,500,000	)		0.02

Outstanding at year end		358,559,387			0.021		381,542,720			0.022		170,042,720			0.05

Vested and Exercisable at year end		275,689,612			0.024		195,708,100			0.033		87,280,755			0.06

Options outstanding at the end of the year have the following expiry date and exercise prices:

			Exercise Price		Share options		Share options
Series	Grant Date	Expiry Date	$A		2025		2024
ATHAAB	September 18, 2020	September 17, 2025		0.09		35,000,000		35,000,000
ATHAAD	January 7, 2021	January 6, 2026		0.03		91,392,720		91,392,720
ATHAAE	November 29, 2021	November 29, 2026		0.04		10,000,000		14,250,000
ATHAAF	July 31, 2021	July 31, 2024		0.07		-		12,000,000
ATHAAG	November 21, 2021	November 29, 2026		0.02		11,500,000		11,900,000
ATHAAH	December 21, 2023	December 19, 2026		0.001		8,000,000		8,000,000
ATHAA	March 13, 2024	March 13, 2029		0.004		20,166,667		26,500,000
ATHAB	March 13, 2024	March 13, 2029		0.005		62,500,000		62,500,000
ATHAC	March 21, 2024	March 21, 2029		0.003		120,000,000		120,000,000
				Total		358,559,387		381,542,720
Weighted average remaining contractual life of options outstanding at end of period.						2.37 years		3.28 years

Risk free interest rate – This is the government bond rate (having a term that most closely resembles the expected life of the option) in effect at the grant date. The Australian government bond rate has been used for options which are exercisable for fully paid ordinary shares and the U.S. government bond rate has been used for options which are exercisable for ADRs.

Dividend yield – Alterity has never declared or paid dividends on its ordinary shares and does not anticipate paying any dividends in the foreseeable future.

Expected volatility – Alterity estimates expected volatility based on historical volatility over the estimated life of the option and other factors. Historical volatility has been the basis for determining expected share price volatility as it is assumed that this is indicative of future movements. The life of the options is based on historical exercise patterns, which may not eventuate in the future.

Expected life – This is the period of time that the options granted are expected to remain outstanding. This estimate is based primarily on historical trend of option holders to exercise their option near the date of expiry. As a result, the expected life is considered to equal the period from grant date to expiry date.

Model inputs –

The model inputs for the valuations of options approved and issued during the current and previous financial years are as follows:

		Exercise Price per Share		Share Price at Grant Date		Expected Share Price			Years to		Dividend			Risk-free Interest			Fair Value per Options
Series	Grant Date	A$		A$		Volatility			Expiry		Yield			Rate			A$
ATHAAB	September 18,2020		0.09		0.05		98.00	%		5.00		0	%		0.43	%		0.032
ATHAAD	January 7,2021		0.03		0.032		139.52	%		5.00		0	%		0.38	%		0.028
ATHAAE	November 29, 2021		0.04		0.025		138.47	%		5.00		0	%		1.35	%		0.021
ATHAAF	July 31, 2021		0.07		0.034		169.42	%		5.00		0	%		0.13	%		0.027
ATHAAG	November 29, 2021		0.02		0.0238		138.47	%		5.00		0	%		1.35	%		0.021
ATHAAH	December 21, 2023		0.01		0.0065		133.87	%		3.00		0	%		3.67	%		0.005
ATHAA	March 13, 2024		0.004		0.004		158.31	%		5.00		0	%		3.47	%		0.004
ATHAB	March 13, 2024		0.004		0.004		158.31	%		5.00		0	%		3.47	%		0.004
ATHAC	March 21, 2024		0.003		0.004		158.83	%		5.00		0	%		3.48	%		0.004

Information with respect to the number of shares issued under the stock option plan as follows:

	Years Ended June 30,
	2025		2024		2023
	Number of Shares		Number of Shares		Number of Shares
Beginning of the year		13,277,715		13,277,715		13,277,715
Issued during the year		-		-		-

End of the financial year		13,277,715		13,277,715		13,277,715

No shares were granted during the year ended June 30, 2025, 2024 and 2023.