Kazia Therapeutics Annual Report 2021

2021 AT A GLANCE CHAIRMAN’S LETTER CEO’S REPORT KEY MILESTONES PIPELINE REVIEW PARTNER FOR SUCCESS WORK WITH THE BEST #2 IN THE KAZIA STORY FINANCIAL REPORTS Kazia Therapeutics Limited Annual Report 2021 63 2020 Tranche Grant date Expiry date Exercise price Balance at the start of the year Granted Modified Expired Balance at the end of the year 1 04/03/2015 16/12/2019 $1.500 46,647 - - (46,647) - 2 04/03/2015 18/12/2019 $1.500 19,952 - - (19,952) - 3 24/06/2015 30/06/2020 $4.000 519,000 - - (519,000) - 4 15/11/2015 16/11/2020 $2.200 236,667 - - - 236,667 5 18/03/2016 01/02/2021 $1.990 300,000 - (300,000) - - 6 18/03/2016 01/02/2021 $1.990 200,000 - (200,000) - - 7 18/03/2016 01/02/2021 $2.610 250,000 - (250,000) - - 8 05/09/2016 05/09/2021 $1.630 50,000 - - - 50,000 9 12/10/2016 17/10/2021 $1.560 62,000 - - - 62,000 10 31/10/2016 01/11/2021 $1.380 12,500 - - - 12,500 11 21/11/2016 23/11/2021 $1.380 50,000 - - - 50,000 12 07/08/2017 07/08/2022 $0.670 224,000 - - - 224,000 13 05/02/2018 05/02/2023 $0.780 440,000 - - - 440,000 14 04/01/2019 04/01/2024 $0.492 250,000 - - - 250,000 15 13/11/2019 04/01/2024 $0.492 - - 1,200,000 - 1,200,000 16 13/01/2020 13/01/2025 $0.880 - 250,000 - - 250,000 2,660,766 250,000 450,000 (585,599) 2,775,167 Weighted average exercise price $1.960 $0.880 $2.348 $3.716 $0.797 At the end of the period the following options were vested and exercisable: • Options in Tranches 4, 8, 10, 11 and 13 were vested and exercisable • Options in Tranche 16 were unvested • Options in other tranches were vested as follows: 9: 75%, 12: 50%, 14: 50%, 15: 67% All remaining options are expected to vest in future periods. The weighted average remaining contractual life of options outstanding at 30 June 2020 is 2.78 years. Employee share options During the year ended 30 June 2021, 2,200,000 options have been issued to directors and employees by the consolidated entity pursuant to the Company’s Employee Share Option Plan. • Tranche 11 vests in four equal 6-monthly tranches from 1 January 2021 • Tranche 12 vests in four equal annual amounts from 13 January 2021 • Tranche 13 vests in four equal annual tranches from 4 January 2022 Options within all tranches will only vest if the option holder continues to be a full-time employee with the Company or an Associated Company during the vesting period relating to the option. Conditions for an option to be exercised: • The option must have vested; • Option holder must have provided the Company with an Exercise Notice and have paid the Exercise Price for the option. • The Exercise Notice must be for the exercise of at least the Minimum Number of Options; • The Exercise Notice must have been provided to the Company and Exercise Price paid before the expiry of 5 years from the date the Option is issued. Options Valuation In order to obtain a fair valuation of these options, the following assumptions have been made: The Black Scholes option valuation methodology has been used with the expectation that the majority of these options would be exercised towards the end of the option term. Inputs into the Black Scholes model includes the share price at grant date, exercise price, volatility, and the risk free rate of a five year Australian Government Bond on grant date. NOTE 32. SHARE-BASED PAYMENTS (CONTINUED)