Notes to the Consolidated Financial Statements continued ANNUAL Report June 2022 Notes to the Consolidated Financial Statements 47 27. SHARE BASED PAYMENTS (a) Expenses arising from share-based payment transactions Total expenses rising from share-based payment transactions recognised during the period were as follows: FV at Grant Date Expensed / Capitalised in prior years Lapsed / Forfeited Expensed 2022 Year Capitalised 2022 Year AASB 2 Not yet Expensed Options issued to directors 308,454 23,242 - 216,216 - 68,996 Options issued to employees / consultants 1,550,511 759,589 20,612 195,432 506,764 68,114 Total share-based payments 1,858,965 782,831 20,612 411,648 506,764 137,110 The fair value of options issued during the year were calculated by using a black-scholes pricing model applying the following inputs: Employees / Consultants Employees / Consultants Employees / Consultants Grant date 25/01/2022 25/01/2022 17/09/2021 Number issued 1,000,000 1,000,000 25,000,000 Share price at grant date $0.060 $0.060 $0.048 Exercise Price $0.060 $0.060 $0.065 Life of options (years) 2 Years 2 Years 2 Years Expected share price volatility 85.943% 85.943% 95.000% Weighted average risk-free interest rate 1.290% 1.290% 0.010% Fair value per option $0.03019 $0.03019 $0.02000 Vesting conditions None 12 Months Service1 None 1 Anniversary of issue date, subject to continuous employment by the Company to the vesting date. Each option provides the right for the option holder to be issued one fully paid share in the Company, upon payment of the exercise price of each option once vesting conditions have been met. Historical volatility has been used as the basis for determining expected share price volatility as it is assumed that this is indicative of future trends, which may not eventuate. For service provider options the value of the service rendered was unable to be measured reliably and therefore the value was measured by reference to the fair value of the options issued. (b) Options Issued The following table details the number and movements in options issued as employment incentives to Key Management Personnel during the year. 2022 Number 2022 WAEP 2021 Number 2021 WAEP Outstanding at the beginning of the year 42,000,000 0.058 5,000,000 0.052 Granted - - 37,000,000 0.059 Forfeited / cancelled - - - - Exercised1 (5,000,000) 0.052 - - Expired - - - - Outstanding at year end 37,000,000 0.059 42,000,000 0.058 Exercisable at year end 21,000,000 0.058 10,000,000 0.043 1 Options are deemed exercised upon the resignation of Key Management Personnel. (c) Performance Rights / Options lapsed during the reporting period There were no Performance rights issued during the reporting period. 78 EQ Resources Limited Annual Report 2022
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