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STOCK OPTION RESERVE

3 Months Ended

Jun. 30, 2021

NOTE 15. STOCK OPTION RESERVE

(a)

The following table provides the activity for the Company’s stock option reserve for the three months ended June 30, 2021 and 2020:


	Three Months Ended June 30,
	2021				2020
(In thousands)	Non-Controlling Interest		Stock Option Reserve		Non-Controlling Interest		Stock Option Reserve

Balance, beginning of period	$	11,468	$	7,977	$	10,618	$	58
Share-based compensation expense		98		2,082		295		–
Balance, end of period	$	11,566	$	10,059	$	10,913	$	58

Stock Options

The Board of Directors of the Company (the "Board") established a stock option plan (the "2013 Option Plan") under which options to acquire ordinary shares of the Company are granted to directors, employees and consultants of the Company. The maximum number of ordinary shares issuable under the 2013 Option Plan shall not exceed 10% of the total number of issued and outstanding ordinary shares, inclusive of all shares presently reserved for issuance pursuant to previously granted stock options. If a stock option was surrendered, terminated or expired without being exercised, the ordinary shares reserved for issuance pursuant to such stock option were available for new stock options granted under the 2013 Option Plan. The options vest on a schedule determined by the Board of Directors, generally over two to four years, and expire after five years.

As of March 31, 2019, the Board decided to discontinue the 2013 Option Plan and during the year ended March 31, 2021, 2,980 outstanding options issued under the plan expired unexercised and no options remained outstanding under the 2013 Option Plan.

On June 25, 2020, at the annual meeting of shareholders, the Company’s new incentive stock option plan (the “2020 Stock Option Plan”) was approved, which authorized the directors to fix the option exercise price and to issue stock options under the plan as they see fit. The Company's 2020 Stock Option Plan is a 10% rolling stock option plan under which the directors are authorized to grant up to a maximum of 10% of the issued and outstanding ordinary shares on the date of grant.

Effective January 13, 2021, the Company amended and restated its 2020 Stock Option Plan to permit the grant of additional types of equity compensation securities, including restricted stock units and dividend equivalent rights (the "2021 Equity Incentive Plan"). The aggregate number of equity securities, which may be issued under the 2021 Equity Incentive Plan has not been changed. Pursuant to the 2021 Equity Incentive Plan, on January 13, 2021, the Company granted an aggregate of 868,000 stock options exercisable at a price of US$17.75 per share, representing the closing price of the shares on the day immediately preceding the grant date, which expire on January 13, 2031 to various directors, officers and consultants of the Company. 350,000 options granted to members of the board of directors vest 1/3 on grant date, 1/3 on the first anniversary of the grant and 1/3 on the second anniversary of the grant. 518,000 options granted to consultants (one of whom is also a director) vest 1/3 on each of the first three anniversaries of the date of grant.

Additionally, the Company granted 243,000 restricted stock units on January 13, 2021, with a fair value of $17.75 per share, which was the closing price on the day immediately preceding the grant date. The restricted stock units vested on the date of grant but underlying shares cannot be sold until one of four conditions are met. In accordance with IFRS 2, “Share-based Payment,” the Company recognized compensation expense of $4.3 million in the year ended March 31, 2021, in connection with the RSU grants.

(b)

The movements in the number of options issued were:

PBI 2021 Equity Incentive

Plan

PBI 2013 Option Plan

iOx Option Plan
(Subsidiary Plan)

Three Months Ended June 30,

2021

2020

2021

2020

2021

2020

Balance, beginning of period

868,000

–

2,980

1,924

2,599

Granted

–

Expired or forfeited

–

Balance, end of period

868,000

–

2,980

1,924

2,599

Exercisable, end of period

116,666

–

2,980

1,764

1,723

The Board discontinued the 2013 Option Plan in fiscal 2019.

(c)

Following are the weighted average exercise price and the remaining contractual life for outstanding options by plan:


	PBI 2021 Equity Incentive Plan				PBI 2013 Option Plan				iOx Option Plan (Subsidiary Plan)
	As of June 30,				As of June 30,				As of June 30,
	2021		2020		2021		2020		2021		2020
Weighted average exercise price	$	17.75	$	–	$	–	$	15.00	$	165.20	$	152.74
Weighted average remaining contractual life (in years)		9.54		–		–		1.47		0.70		1.24

The vested options can be exercised at any time in accordance with the applicable option agreement. The exercise price was greater than the market price on the date of the grants for all options outstanding as of June 30, 2021 and March 31, 2021.

The Company recorded approximately $2.1 million of stock-based compensation expense with respect to the 2021 Equity Incentive Plan in the three months ended June 30, 2021. There were no stock options outstanding in the prior year period under this plan. The Company expects to record additional stock-based compensation expense of $8.9 million through January 2024 with respect to the 2021 Equity Incentive Plan. Additionally, the intrinsic value of the stock options granted under the 2021 Equity Incentive Plan was approximately $2.8 million at June 30, 2021, of which $0.4 million is associated with vested exercisable options.

The Company recorded $0.1 million and $0.3 million of stock-based compensation expense related to the iOx stock option plan for the three months ended June 30, 2021 and 2020, respectively. The Company expects to record $0.1 million of aggregate stock-based compensation expense through the remaining vesting period of outstanding iOx options. Additionally, the intrinsic value of the iOx stock options was approximately $0.1 million at June 30, 2021, substantially all of which is associated with vested exercisable options.