Falanx Group reduces potential tax charges on both option holders and the Company

Falanx Group

Falanx Group Limited (LON:FLX), the AIM listed provider of cyber security and strategic intelligence services, announced today that it has made changes to certain outstanding share options to reduce potential tax charges on both option holders and the Company.  

This will be achieved by the cancellation of certain existing share options which are unapproved from a UK tax perspective and the issue of an identical number under the Company’s EMI scheme with identical terms (including, but not limited to, exercise price, vesting criteria and expiry date).  This prospective change was referenced in the annual report for the year ended 31 March 2020.

The total number of options to be cancelled and then reissued is 29,119,200, representing 5.5% of issued capital as set out in the table below.  No options, other than those set out in the table below, are affected by this change. 

HolderNumber & (Scheme)Issue DateOld Exercise PriceNew Exercise PriceExpiry Date (Original)Expiry Date (Revised)
Mike Read (CEO)5,000,000 (A)25 September 20191.92p1.92p31 March 203031 March 2030
Mike Read (CEO)6,600,000 (B)21 April 20201.00p1.00p31 March 203031 March 2030
Ian Selby (CFO)5,000,000 (A)25 September 20191.92p1.92p31 March 203031 March 2030
Ian Selby (CFO)2,520,000 (B)21 April 20201.00p1.00p31 March 203031 March 2030
Rick Flood (PDMR)5,000,000 (A)25 September 20191.92p1.92p31 March 203031 March 2030
Rick Flood (PDMR)4,999,200 (B)21 April 20201.00p1.00p31 March 203031 March 2030

Following the cancellation and reissue the Falanx Group will continue to have 71.8m employee options outstanding representing 13.6% of issued capital. Of these 33.0m (6.3% of issued capital) were issued on 21 April 2020 by the direct and permanent sacrifice of salaries by Executives and other employees in response to the COVID-19 disruptions as announced at that time 

Scheme details and vesting criteria

There have been no changes to the vesting criteria in either scheme which remain as set out below

Scheme A (Options granted 25 September 2019)

The Options have an exercise price of 1.925 pence per Ordinary Share, being the closing mid-market price on 24 September 2019, and will vest:

·      33% of vest immediately (originally vested 25 September 2019).

·      33% of the total Options), provided that the share price of the Company exceeds 2.89 pence (50% share price growth over the Exercise Price) for a period of one calendar month; and

·      34% of the total Options), provided that the share price of the Company exceeds 3.85 pence (100% growth over the Exercise Price) for a period of one calendar month.

These options have accelerated vesting in certain customary scenarios.

Scheme B Salary (Salary Sacrifice Options granted 21 April 2020)

These were issued as part of a Group wide scheme which was open to all employees whereby cash remuneration was permanently waived in return for option grants to support the Group through the worst phase of the COVID-19 pandemic in 2020.  These options vest immediately (original vesting date 1 October 2020).  For reference a separate waiver of 25.7 million share options was also made by members of staff on that day, including waivers by staff who did not participate in the salary sacrifice scheme.

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Falanx Group Ltd

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