Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Share-based compensation

v3.22.2.2
Share-based compensation
12 Months Ended
Sep. 30, 2022
Share-based compensation  
Share-based compensation

18.    Share-based compensation

The Group has incentive awards for employees, share options which have ceased in 2021 and RSUs. The below table summaries share-based compensation expense for the years ended September 30, 2022, 2021 and 2020.

    

2022

    

2021

    

2020

 

$'000

$'000

 

$'000

Share option charge included in administrative expenses

177

165

 

122

RSU compensation for the year included in administrative expenses

 

22,738

 

22,915

165

 

122

Share options

Share options are exercisable at the price agreed at the time of the issue of the share option. The vesting periods are consistent between employees. Options are typically forfeited if the employee leaves the Group before the options vest. Details of the share options granted during the period are as follows:

    

2022

2021

2020

    

    

Weighted

    

Weighted

    

    

Weighted

Average

Average

Average

Number of

Exercise

Number of

Exercise

Number of

exercise

    

Share options

    

Price ($)

    

Share options

    

Price (£)

    

Share options

    

Price (£)

Outstanding at beginning of period

8,451,872

0.0001

161,250

0.0001

72,700

0.0001

Granted during the period

 

 

55,210

0.0001

 

88,550

 

0.0001

Forfeited/lapsed during the period

 

(447,058)

 

0.0001

(32,963)

0.0001

 

 

Exercised during the period

 

 

 

 

Outstanding at end of period

 

8,004,813

 

0.0001

183,497

0.0001

 

161,250

 

0.0001

Exercisable at end of period

 

1,253,062

17,167

 

 

  

The options outstanding at 30 September 2022 had a weighted average exercise price of $0.0001 (£0.0001) pence, and a weighted average remaining contractual life of 3 years. Prior to the completion of the business combination, Arqit Limited granted options over Arqit Limited ordinary shares to its employees, consultants and advisors. The holders of each of these options agreed to exchange these options for equivalent options to acquire ordinary shares at a conversion rate of 46.06. Therefore, the share price and exercise price have been stated in pound sterling for 30 September 2021 due to this being the currency which the instrument originated from, this has been restated to dollars and the value is reflected as at 30 September 2022.

The inputs into the Black-Scholes model are as follows:

    

2022

    

2021

    

2020

 

Weighted average share price (£)

 

3.30

 

3.30

Weighted average exercise price (£)

 

0.0001

 

0.0001

Expected volatility

 

50

%  

50

%

Expected life

 

 

5 years

 

5 years

Risk-free rate

 

0.1

%  

0.1

%

Expected dividend yield

 

0

%  

0

%

RSUs

In October 2021, the compensation committee of the board of directors approved the grant of RSUs to employees. Compensation expense for RSUs is determined based upon the market price of the shares underlying the awards on the date of grant and expensed over the vesting period, which is generally a one to five-year service period.

    

2022

    

    

Weighted

    

Weighted

Average

Average

grant date fair

remaining term

Number of

value per share

to vest/distribute

    

awards

    

Price ($)

    

(yrs)

Outstanding at beginning of period

Granted during the period

 

2,758,039

 

17.52

Forfeited/lapsed during the period

 

(71,968)

 

15.23

Vested during the period

 

 

Outstanding at end of period

 

(2,686,071)

17.58

1.4