ANNUAL Report June 2024 Notes to the Consolidated Financial Statements 50 The increase in the ratio is predominately due to the Company financing its capital growth initiatives for the Mt Carbine Tungsten Project via debt rather than equity. In order to maintain or adjust the capital structure, the consolidated entity may adjust the dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt. The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen as value adding relative to the current parent entity’s share price at the time of the investment. The consolidated entity continues to evaluate corporate and exploration opportunities within the new economy and critical minerals sector. The consolidated entity is subject to certain financing arrangements and covenants, and meeting these is given priority in all capital risk management decisions. There have been no events of default on the financing arrangements during the financial year. 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. 29. SHARE BASED PAYMENTS (a) Expenses arising from share-based payment transactions Total expenses arising from share-based payment transactions recognised during the period were as follows: Expensed FV at Grant Date Expensed / Capitalised in prior years Lapsed / Forfeited Options/ Shares Capitalised 2024 Year IFRS 2 Not yet Expensed Options issued to key management personnel 29,933 - - 29,769 - 164 Options issued to employees/consultants / sophisticated investors 4,009,587 - 8,980 3,476,172 521,959 2,476 Shares issued to for senior financial advisor service fees 25,004 - - 25,004 - - Total share-based payments 4,064,524 - 8,980 3,530,945 521,959 2,640 The fair value of options issued during the year was calculated by using a black-scholes pricing model applying the following inputs: Key Management Personnel, Employees & Contractors Sophisticated Investors Sophisticated Investors Grant date 03/07/2023 18/01/2024 28/05/2024 Number issued 16,100,000 78,000,000 88,646,721 Share price at the grant date $0.072 $0.068 $0.063 Exercise Price $0.010 $0.010 $0.0675 Life of options (years) 3 Years 2 Years 3 Years Expected share price volatility 72.661% 60.232% 60.232% Weighted average risk-free interest rate 3.97% 3.92% 4.07% Fair value per option $0.02993 $0.01583 $0.02610 Vesting conditions 1 Year1 12 Month Escrow None 1 1 year from the date of issue subject to continuous employment or rendering of services by/to 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 to determine expected share price volatility as it is assumed that this indicates future trends, which may not eventuate. Notes to the Consolidated Financial Statements continued 116 EQ Resources Limited Annual Report 2024
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