Company: BDRX
Filing Date: 2025-01-17
Form Type: F-1
Source: 0001214659-25-000922
Chunk: 144

Company: Biodexa Pharmaceuticals Plc
Filing Date: 2025-01-17
Form: F-1
Chunk 144
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 For performance-based options that include vesting conditions relating to the market performance of our Ordinary Shares, a
Monte Carlo pricing model was used in order to reflect the valuation impact of price hurdles that have to be met as conditions to vesting.

The resulting cost of an equity
incentive award is recognized as expense over the requisite service period of the award, which is usually the vesting period. Compensation
expense is recognized over the vesting period using the straight-line method and classified in the consolidated statements of comprehensive
income.

The assumptions used for estimating
fair value for share-based payment transactions are disclosed in our annual financial statements and are estimated as follows:

| · | volatility is estimated based on the average annualized volatility of a number of publicly traded peer 
 companies in the biotech sector;                                                                       |

| · | the estimated life of the option is estimated to be until the first exercise period, which is typically 
 the month after the option vests; and                                                                   |

| · | the dividend return is estimated by reference to our historical dividend payments. Currently, this is 
 estimated to be zero as no dividend has been paid in the prior periods.                               |

We also issue warrants exercisable
for Depositary Shares to certain professional advisors in connection with equity transactions that fall within the scope of IFRS 2 and
are accounted for as share based payments. The fair value of the services received in exchange for the grant of warrants is recognized
as an expense of the equity transaction. The total expense is recognized immediately.

| 73 |

Financial liabilities

Fair value through profit and loss (FVTPL)

We have outstanding warrants
in the Ordinary Share capital of the company. The number of Ordinary Shares to be issued when exercised is fixed, however the exercise
price is denominated in US Dollars being different to the functional currency of the parent company. Therefore, the warrants are classified
as equity settled derivative financial liabilities recognized at fair value through the profit and loss account.

The financial liability is
valued using the either the Monte Carlo model or the Black-Scholes option pricing model. Financial liabilities at FVTPL are stated at
fair value, with any gains or losses arising on re-measurement recognized in profit or loss. The net gain or loss recognized in profit
or loss incorporates any interest paid on the financial liability and is included in the ‘finance income’ or ‘finance
expense’ lines item in the income statement. Fair value is determined in the manner described in our annual financial statements.

Recently Issued and Adopted