ANNUAL Report June 2023 Notes to the Consolidated Financial Statements 52 The capital risk management policy remains unchanged from the 30 June 2021 Annual Report. The consolidated entity is not subject to externally imposed capital requirements. 28. 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 2023 Year Capitalised 2023 Year AASB 2 Not yet Expensed Options issued to directors 334,876 239,458 - 95,418 - - Options issued to employees / consultants / sophisticated investors 2,041,204 1,461,785 - 579,419 - - Total share-based payments 2,376,080 1,701,243 - 674,837 - - The fair value of options issued during the year, as part of the October 2022 share placement, were calculated by using a black-scholes pricing model applying the following inputs: Sophisticated Investors Sophisticated Investors Sophisticated Investors Sophisticated Investors Grant date 07/11/2022 09/11/2022 11/11/2022 14/11/2022 Number issued 5,957,3461 11,917,654 4,899,766 4,182,580 Share price at grant date $0.041 $0.046 $0.048 $0.047 Exercise Price $0.065 $0.065 $0.065 $0.065 Life of options (years) 3 Years 3 Years 3 Years 3 Years Expected share price volatility 81.530% 81.666% 81.648% 81.648% Weighted average risk-free interest rate 3.37% 3.40% 3.16% 3.26% Fair value per option $0.01776 $0.01778 $0.01769 $0.01769 Vesting conditions None None None None Sophisticated Investors Directors Grant date 18/11/2022 31/01/2023 Number issued 1,575,000 1,250,000 Share price at grant date $0.05 $0.046 Exercise Price $0.65 $0.065 Life of options (years) 3 Years 3 Years Expected share price volatility 81.648% 81.530% Weighted average risk-free interest rate 3.21% 3.17% Fair value per option $0.01763 $0.02114 Vesting conditions None None 1 6,500,000 Options were issued on 7 November 2022 with 292,654 options being subsequently cancelled by agreement between the Company and the holder on 5 June 2023. The Options were cancelled as the beneficial holder’s Constitution did not allow it to hold the Options. 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. Notes to the Consolidated Financial Statements continued 94 EQ Resources Limited Annual Report 2023
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