21.	SHARE OPTIONS

Options

Under the terms of the Company’s Employee Share Option Plans, options to purchase 18,727,990 ‘A’ Ordinary Shares (4,681,998 ADS’s) were outstanding at December 31, 2021. Under these Plans, options are granted to officers, employees and consultants of the Group at the discretion of the Compensation Committee (designated by the Board of Directors), under the terms outlined below.

Certain options have been granted to consultants of the Group and, where this is the case, the Group has measured the fair value of the services provided by these consultants by reference to the fair value of the equity instruments granted. This approach has been adopted in these cases as it is impractical for the Group to reliably estimate the fair value of such services.

The terms and conditions of the grants are as follows, whereby all options are settled by physical delivery of shares:

Vesting conditions

The options vest following a period of service by the officer or employee. The required period of service is determined by the Board and Remuneration Committee at the date of grant of the options (usually the date of approval by the Compensation Committee) and it is generally over a three to four-year period. There are no market conditions associated with the share option vesting periods.

Contractual life

The term of an option is determined by the Board, Compensation Committee and Remuneration Committee provided that the term may not exceed a period of between seven to ten years from the date of grant. All options will terminate 90 days after termination of the option holder’s employment, service or consultancy with the Group (or one year after such termination because of death or disability) except where a longer period is approved by the Board of Directors. Under certain circumstances involving a change in control of the Group, the Compensation Committee may accelerate the exercisability and termination of options

The number and weighted average exercise price of share options and warrants per ordinary share is as follows (as required by IFRS 2, this information relates to all grants of share options and warrants by the Group):

	Options and warrants			Weighted- average exercise price US$		Range US$
	‘A’ Ordinary Shares			Per ‘A’ Ordinary Share		Per ‘A’ Ordinary Share
Outstanding January 1, 2019		10,908,200			1.83		0.67 –4.36
Granted		4,370,000			0.68		0.46 –0.78
Exercised		-			-		-
Expired / Forfeited		(2,974,210	)		2.25		0.66 –4.23

Outstanding at end of year		12,303,990			1.31		0.46 –4.36

Exercisable at end of year		6,622,667			1.73		1.24 –4.36

Outstanding January 1, 2020		12,303,990			1.31		0.46 –4.36
Granted		9,100,000			0.38		0.19 –1.10
Exercised		-			-		-
Expired / Forfeited		(1,918,000	)		2.14		0.19-4.21

Outstanding at end of year		19,485,990			0.79		0.19-4.36

Exercisable at end of year		7,959,323			1.27		0.66-4.36

Outstanding January 1, 2021		19,485,990			0.79		0.19-4.36
Granted		-			-		-
Exercised		-			-		-
Expired / Forfeited		(758,000	)		1.07		0.19-4.21

Outstanding at end of year		18,727,990			0.78		0.19-4.36

Exercisable at end of year		13,401,322			0.93		0.19-4.36

	Options and warrants			Weighted- average exercise price US$		Range US$
	‘ADS’ Equivalent			Per ‘ADS’		Per ‘ADS’
Outstanding January 1, 2019		2,727,050			7.32		2.68 - 17.44
Granted		1,092,500			2.72		1.83 – 3.10
Exercised		-			-		-
Expired / Forfeited		(743,552	)		8.99		2.64 – 16.92

Outstanding at end of year		3,075,998			5.24		1.83–17.45

Exercisable at end of year		1,655,667			6.92		4.95 –17.45

Outstanding January 1, 2020		3,075,998			5.24		1.83–17.45
Granted		2,275,000			1.52		0.77 - 4.41
Exercised		-			-		-
Expired / Forfeited		(479,500	)		8.56		0.77 - 16.84

Outstanding at end of year		4,871,498			3.15		0.77 - 17.45

Exercisable at end of year		1,989,831			5.08		2.64 –17.45

Outstanding January 1, 2021		4,871,498			3.15		0.77 - 17.45
Granted		-			-		-
Exercised		-			-		-
Expired / Forfeited		(189,500	)		4.28		0.76 - 16.84

Outstanding at end of year		4,681,998			3.12		0.76-17.44

Exercisable at end of year		3,350,331			3.72		0.76-17.44

There were no share options exercised during 2021, 2020 or 2019.

The opening share price per ‘A’ Ordinary share at the start of the financial year was US$0.95 or US$3.81 per ADS (2020: US$0.27 or US$1.07 per ADS) (2019: US$0.57 or US$2.29 per ADS) and the closing share price at December 31, 2021 was US$0.36 or US$1.43 per ADS (2020: US$0.95 or US$3.81 per ADS) (2019: US$0.26 or US$1.03 per ADS). The average share price for the year ended December 31, 2021 was US$0.77 per ‘A’ Ordinary share or US$3.07 per ADS.

A summary of the range of prices for the Company’s stock options for the year ended December 31, 2021 follows:

	Outstanding						Exercisable
Exercise price range	No. of options ‘A’ ordinary shares		Weighted– average exercise price		Weighted- average contractual life remaining (years)		No. of options ‘A’ ordinary shares		Weighted– average exercise price		Weighted- average contractual life remaining (years)
US$0.19-US$0.99		13,000,006		0.48		3.54		7,960,004		0.55		2.92
US$1.00-US$2.05		5,228,000		1.34		0.79		4,941,334		1.35		0.99
US$2.06- US$2.99		439,984		2.53		0.03		439,984		2.53		0.04
US$3.00 -US$4.36		60,000		4.17		0.00		60,000		4.17		0.00

		18,727,990						13,401,322

	Outstanding						Exercisable
Exercise price range	No. of options ‘ADS equivalent’		Weighted– average exercise price		Weighted- average contractual life remaining (years)		No. of options ‘ADS equivalent’		Weighted– average exercise price		Weighted- average contractual life remaining (years)
US$0.77-US$3.96		3,250,002		1.94		3.54		1,990,001		2.19		2.92
US$4.00-US$8.20		1,307,000		5.36		0.79		1,235,334		5.40		0.99
US$8.24- US$11.96		109,996		10.13		0.03		109,996		10.13		0.04
US$12.00 -US$17.45		15,000		16.67		0.00		15,000		16.67		0.00

		4,681,998						3,350,331

A summary of the range of prices for the Company’s stock options for the year ended December 31, 2020 follows:

	Outstanding						Exercisable
Exercise price range	No. of options ‘A’ ordinary shares		Weighted– average exercise price		Weighted- average contractual life remaining (years)		No. of options ‘A’ ordinary shares		Weighted– average exercise price		Weighted- average contractual life remaining (years)
US$0.19-US$0.99		13,260,006		0.48		4.14		2,106,673		0.69		1.44
US$1.00-US$2.05		5,664,000		1.34		1.11		5,290,667		1.35		2.44
US$2.06- US$2.99		499,984		2.52		0.05		499,984		2.52		0.13
US$3.00 -US$4.36		62,000		4.17		0.00		62,000		4.17		0.01

		19,485,990						7,959,324

	Outstanding						Exercisable
Exercise price range	No. of options ‘ADS equivalent’		Weighted– average exercise price		Weighted- average contractual life remaining (years)		No. of options ‘ADS equivalent’		Weighted– average exercise price		Weighted- average contractual life remaining (years)
US$0.77-US$3.96		3,315,002		1.92		4.17		526,668		2.76		1.44
US$4.00-US$8.20		1,416,000		5.36		1.10		1,322,667		5.40		2.44
US$8.24- US$11.96		124,996		10.08		0.05		124,996		10.08		0.13
US$12.00 -US$17.45		15,500		16.68		0.00		15,500		16.68		0.01

		4,871,498						1,989,831

The weighted-average remaining contractual life of options outstanding at December 31, 2021 was 4.35 years (2020: 5.32 years).

Charge for the year under IFRS 2

The charge for the year is calculated based on the fair value of the options granted which have not yet vested.

The fair value of the options is expensed over the vesting period of the option. US$1,100,000 was charged to the statement of operations in 2021, (2020: US$792,000), (2019: US$758,000) split as follows:

	December 31, 2021 US$‘000		December 31, 2020 US$‘000		December 31, 2019 US$‘000
Share-based payments – cost of sales		5		12		26
Share-based payments – selling, general and administrative		1,095		780		732

Total – continuing operations		1,100		792		758
Share-based payments – discontinued operations		-		-		-

Total		1,100		792		758

The total share based payments charge for the year was US$1,111,000 (2020: US$816,000) (2019: US$839,000). However, a total of US$11,000 (2020: US$24,000) (2019: US$80,000) of share based payments was capitalised in intangible development project assets during the year.

The fair value of services received in return for share options granted are measured by reference to the fair value of share options granted. The estimate of the fair value of services received is measured based on a trinomial model. There were no share options issued during 2021. The following are the input assumptions used in determining the fair value of share options granted in 2021, 2020 and 2019:

Key
management
personnel

Other
employees

Key
management
personnel

Other
employees

Key
management
personnel

Other
employees

2021

2020

2019

Weighted average fair value at measurement date per ‘A’ share / (per ADS)

- /

US$0.20 /

(US$0.80)

US$0.27 /

(US$1.08)

US$0.14 /

(US$0.56)

US$0.25 /

(US$1.02)

Total ‘A’ share options granted / (ADS’s equivalent)

- /

8,480,000 /

(2,120,000)

620,000 /

(155,000)

4,060,000 /

(1,015,000)

310,000 /

(77,500)

Weighted average share price per ‘A’ share / (per ADS)

- /

US$0.38 /

(US$1.52)

US$0.48 /

(US$1.96)

US$0.46 /
(US$1.84)

US$0.64 /
(US$2.53)

Weighted average exercise price per ‘A’ share / (per ADS)

- /

US$0.38 /

(US$1.52)

US$0.48 /

(US$1.96)

US$0.69 /
(US$2.74)

US$0.64 /
(US$2.53)

Weighted average expected volatility

66.98%

65.89%

51.18%

47.31%

Weighted average expected life

4.34

4.35

4.15

4.42

Weighted average risk free interest rate

0.44%

0.42%

1.84%

2.23%

The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility is based on the historic volatility (calculated based on the expected life of the options). The Group has considered how future experience may affect historical volatility.

The profile and activities of the Group are not expected to change in the immediate future and therefore Trinity Biotech would expect estimated volatility to be consistent with historical volatility.