Notes for P&L
Note 4 Share related incentive programs
On June 30 2021, the company has four ongoing option programs:
- At the Annual General Meeting on April 27 2021, it was decided to introduce a long-term incentive program by issuing warrants to the Board of Directors (LTI 2021/2024), as well as a long-term incentive program for the company's employees consisting of employee stock options (LTI 2021:1).
- On December 16 2021, Ziccum carried out a directed new issue of 1 333 314 units, where one unit consists of three shares and two free warrants (Serie 2021/2022).
- At the Annual General Meeting on April 28 2022, it was decided to implement a long-term incentive program for the company's employees and for the Board of Directors consisting of employee stock options (LTI 2022:1).
None of the options entail the right to a dividend.
Based on the existing number of shares and options that is registered in the company as of 31 Dec 2021, the dilution as a result of the incentive programs, assuming that all warrants are exercised for new subscription of shares, is approximately 8% of the number of shares and votes.
LTI 2021/24
The exercise price per share for LTI 2021/2024 amounts to SEK 28.8 and subscription can take place during the period from 1 May 2024 to 31 May 2024. The incentive program means that participants are offered to subscribe warrants at market value calculated according to the Black-Scholes valuation model.
A prerequisite for participation in the incentive program is that the participant has entered into a pre-purchase agreement with Ziccum, whereby Ziccum, with certain exceptions, reserves the right to repurchase warrants if the board member's assignment in Ziccum ends or if the participant wishes to transfer the options before the warrants can be exercised.
The Board was offered to acquire a maximum of 9 200 warrants each and all chose to acquire the maximum number, which resulted in a total of 46 000 warrants being issued.
LTI 2021:1
LTI 2021:1 runs for three years and means that participants are granted employee stock options free of charge that give the right to acquire shares in Ziccum at a subscription price corresponding to the share's quota value. Each employee stock option gives the right to subscribe for a new share in Ziccum, alternatively up to 40% of the number in synthetic options that give the right to cash compensation instead of shares. Each synthetic option entitles the participant to receive a cash payment corresponding to the value of a share at the time of payment.
The options will be expensed as personnel costs over a period of three years, without affecting the company's cash flow. If employee stock options are exercised, LTI 2021:1 will also entail costs in the form of social security contributions.
Social security contributions will be expensed in the income statement during a period of three years. The company intends to hedge the entire cost of social security contributions through an issue of warrants, which may be exercised by a financial intermediary in connection with the exercise of the employee stock options. If the company chooses to implement such hedging measures, the social security contributions will not affect the company's cash flow.
| Number of employee stock options | |
|---|---|
| Ingoing balance 1 Jan 2021 | 0 |
| Issued | 42,456 |
| Reversed | -6,728 |
| Outgoing balance 31 Dec 2021 | 35,728 |
| Number of employee stock options | |
| Ingoing balance 1 Jan 2022 | 35,728 |
| Reversed | -16,364 |
| Outgoing balance 30 June 2022 | 19,364 |
During 2022, LTI 2021:1 have affected the reporting period result with totally 3 kSEK in costs, of which lower costs of 16 kSEK relates to social security contributions. The lower costs is due to a lower share price and the reset of employee stock options.
Serie 2021/2022
At the end of 2021, Ziccum carried out a directed new issue consisting of 1 333 314 units, of which one unit consists of three shares and two free warrants. In Serie 2021/2022, 2 666 628 warrants have thus been issued, of which 799 904 were registered in December 2021 and the remaining 1 866 724 in January 2022. Each warrant entitles the holder to subscribe for one share at a price of 13.20 SEK, corresponding to 120 percent of the subscription price per share in the share issue, during the following periods:
- 24 February - 28 February 2022 (have passed)
- 27 May - 31 May 2022 (have passed)
- 28 September - 30 September 2022
- 28 November - 30 November 2022
Ziccum can be added a further maximum of approximately 35 mSEK upon full exercise of all warrants.
LTI 2022:1
LTI 2022:1 runs for three years and means that participants are granted employee stock options free of charge that give the right to acquire shares in Ziccum at a subscription price corresponding to the share's quota value. Each employee stock option gives the right to subscribe for a new share in Ziccum, alternatively up to 40% of the number in synthetic options that give the right to cash compensation instead of shares. Each synthetic option entitles the participant to receive a cash payment corresponding to the value of a share at the time of payment.
The options will be expensed as personnel costs over a period of three years, without affecting the company's cash flow. If employee stock options are exercised, LTI 2021:2 will also entail costs in the form of social security contributions.
Social security contributions will be expensed in the income statement during a period of three years. The company intends to hedge the entire cost of social security contributions through an issue of warrants, which may be exercised by a financial intermediary in connection with the exercise of the employee stock options. If the company chooses to implement such hedging measures, the social security contributions will not affect the company's cash flow.
| Number of employee stock options | |
|---|---|
| Ingoing balance 1 Jan 2022 | 0 |
| Issued for employees | 226,000 |
| Issues for Board of Directors | 165,000 |
| Outgoing balance 30 June 2022 | 391,000 |
During 2022, LTI 2021:2 have affected the reporting period result with totally 224 kSEK in costs, of which 53 kSEK relates to social security contributions.