TIDMMTPH
RNS Number : 4994P
Midatech Pharma PLC
09 February 2023
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN (THE
"ANNOUNCEMENT") IS RESTRICTED AND IS NOT FOR PUBLICATION,
DISTRIBUTION OR RELEASE DIRECTLY OR INDIRECTLY, IN WHOLE OR IN
PART, IN OR INTO CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH
AFRICA OR IN ANY OTHER JURISDICTION IN WHICH OFFERS OR SALES OF
SECURITIES WOULD BE PROHIBITED BY APPLICABLE LAW .
THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION,
SOLICITATION, RECOMMATION, OFFER OR ADVICE TO ANY PERSON TO
SUBSCRIBE FOR OR OTHERWISE ACQUIRE ANY SECURITIES OF THE COMPANY
.
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY
THE COMPANY TO CONSTITUE INSIDE INFORMATION AS STIPULATED UNDER
ARTICLE 7 OF THE MARKET ABUSE REGULATION 2014/596/EU AS AMED BY
REGULATION 11 OF THE MARKET ABUSE (AMMENT) (EU EXIT) REGULATIONS
2019/301 . IN ADDITION, MARKET SOUNDINGS WERE TAKEN IN RESPECT OF
THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT
CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION. UPON THE
PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL
THEREFORE CEASE TO BE IN POSSESSION OF SUCH INSIDE INFORMATION.
9 February 2023
Midatech Pharma PLC
("Midatech" or the "Company")
Private Placement Raising US$6.0 million
Midatech Pharma PLC (AIM: MTPH.L; Nasdaq: MTP), a drug delivery
technology company focused on improving the bio-delivery and
bio-distribution of medicines, announces that it has entered into
definitive binding agreements with certain institutional US
investors ("Placees") to raise aggregate gross proceeds of
approximately US$6.0 million (approximately GBP5.0 million) (the
"Private Placement") by the issue and allotment of, in aggregate,
10,344,822 Units (as described further below) initially at an issue
price of US$0.58 per Unit (the "Initial Issue Price").
The Private Placement is being implemented by way of a
non-pre-emptive cashbox structure, as further detailed below,
utilising the Company's existing general share capital authority
granted at the general meeting held on 23 January 2023 ("Existing
Shareholder Authority") which is expected to close, subject to the
satisfaction of customary closing conditions and Admission (as
defined below), on or around 15 February 2023 ("Closing"). In
addition, the Company is seeking shareholder approval for the issue
and allotment of certain associated securities in respect of the
Private Placement not covered by the Existing Shareholder
Authority. Closure of the Private Placement and receipt of proceeds
is not conditional on such shareholder approval.
The net proceeds received from the Private Placement will enable
the Company to focus on developing its clinical asset, MTX110, and,
alongside cost-cutting initiatives, are expected to provide the
Company with sufficient working capital to December 2023. The
Company expects to report completion of treatment in the second
investigator initiated Phase I study in rare orphan Diffuse
Intrinsic Pontine Glioma (DIPG) in Q2 2023. The Company also
expects to report initial progression free survival (PFS) clinical
data from its Phase I study in recurrent Glioblastoma (GBM) in Q3
2023.
Background to and reasons for the Private Placement
As noted in the Company's announcement of 23 January 2023, the
Company has sufficient cash resources to fund its operations until
mid-March 2023. The Board has sought to preserve the Company's cash
resources as far as practicable, while urgently seeking a
commitment for alternative sources of funding in advance of
mid-March 2023 to be able to continue as a going concern. The
Company further announced that if alternative funding was not
available, the Directors believed that it is likely that the
Company could be forced to enter into administration.
Additional information on the Private Placement
The Private Placement comprises the issue of Units by the
Company, with each such Unit comprising either (i) one American
Depository Share ("ADS"), one A Warrant and one and one-half B
Warrant, or (ii) one Pre-Funded Warrant, one A Warrant and one and
one-half B Warrant, as otherwise defined and further detailed
below.
Each Placee has elected to hold ADSs equal to a maximum of 9.99%
of the Company's existing issued share capital, with any excess
subscription for Units being satisfied via the issue to each Placee
of Pre-Funded Warrants instead of ADSs. The Company will therefore
issue, in aggregate, 2,600,160 new ADSs (representing 65,004,000
new ordinary shares of 0.1p each ("Ordinary Shares") (the "Placing
Shares")) and 7,744,662 Pre-Funded Warrants (subject to adjustment
as set out below) under the Private Placement. In addition, subject
to shareholder approval, the Company will issue, in aggregate,
10,344,822 A Warrants (representing 258,620,550 new Ordinary
Shares) and 15,517,236 B Warrants (representing 387,930,900 new
Ordinary Shares) to Placees under the Private Placement, and may
potentially issue additional Pre-Funded Warrants in accordance with
the price adjustment mechanism described below.
Details of the Warrants and Price Adjustment Mechanism
Pre-Funded Warrants
Each "Pre-Funded Warrant" will be exercisable into one new ADS
(equivalent to 25 new Ordinary Shares). The Pre-Funded Warrants
will become exercisable upon the closing of the Private Placement
and will be exercisable at an exercise price of US$0.0001 per ADS.
Accordingly, the price paid per Unit that includes a Pre-Funded
Warrant instead of an ADS shall be reduced by the nominal US$0.0001
exercise price. The use of such Pre-Funded Warrants ensures that
the Company receives the full net proceeds of the Private Placement
immediately on completion, whilst enabling the Placees to limit
their shareholdings in the Company to a maximum of 9.99%. The
Pre-Funded Warrants shall remain exercisable until exercised in
full.
Price Adjustment Mechanism
The Private Placement is subject to a price adjustment mechanism
which could result in the issue price being adjusted below the
Initial Issue Price, with a floor of US$0.30 per Unit, or, subject
to shareholder approval, US$0.10 per Unit, consequently increasing
the number of ADSs and/or Pre-Funded Warrants to be issued under
the Private Placement, as described in further detail below.
In more detail: (i) on the sixth business day post registration
in the US of the new ADSs or (ii) to the extent all securities are
not registered in the US, the date any registration is effective or
the date all shares may be sold without limitation under Rule 144
of the Securities Act of 1933, as amended, the number of ADSs
and/or Pre-Funded Warrants issuable under the Private Placement
shall be increased, and only increase, to equal a number of ADSs
(and/or Pre-Funded Warrants) determined by the quotient of (x) the
aggregate subscription amount of an investor for a Unit divided by
(y) the volume weighted average price ("VWAP") of the Company's
ADSs for the five trading days immediately prior to the applicable
trigger date, subject to a floor price of US$0.30 per Unit;
provided, however, that the floor price shall be adjusted to
US$0.10 per Unit subject to the receipt of shareholder approval at
the forthcoming general meeting, which is intended to provide the
Company with sufficient share capital authority to issue and allot
such additional ADSs and/or Pre-Funded Warrants (the "Price
Adjustment Mechanism").
A Warrants and B Warrants
Each "A Warrant" and "B Warrant," if issued, will afford the
holder the right to subscribe for one ADS for nil consideration.
The A Warrants and B Warrants may be exercised at any time over a
five year and three year period, respectively, following their
issuance and they may be exercised on a cashless basis. The number
of A Warrants and B Warrants is fixed at closing. The proposed
issue of the A Warrants and B Warrants is subject to shareholder
approval at the forthcoming general meeting.
Placement Agent Warrants
Pursuant to the terms of a Placement Agency Agreement entered
into with Ladenburg Thalmann & Co. Inc. ("Ladenburg"), as
placement agent, the Company will, among other things, issue
warrants to Ladenburg (the "Placement Agent Warrants") to purchase
new ADSs equal to 4.0% of the total Units issued in the Private
Placement, which is equivalent to 413,792 new ADSs (being
10,344,800 new Ordinary Shares). The Placement Agent Warrant has
substantially the same terms as the A Warrants and B Warrants,
except that the exercise price of the Placement Agent Warrant is
US$0.725 per ADS and the term of the Placement Agent Warrant shall
be for the three year period following their issuance. The Company
has also agreed to issue additional Placement Agent Warrants to
purchase 15,759 new ADSs (equivalent to 393,975 new Ordinary
Shares). The issuance of the Placement Agent Warrants is subject to
shareholder approval at the forthcoming general meeting.
Investor Warrants
Furthermore, pursuant to a waiver of certain rights held by an
investor under the Securities Purchase Agreement dated 13 December
2022, as amended on 16 December 2022, between the Company and such
investor, the Company has agreed to issue to such investor, subject
to shareholder approval at the forthcoming general meeting, 500,000
A Warrants (the "Investor Warrants").
Shareholder General Meeting
As noted above, the Company has agreed to convene a general
meeting at which the requisite share capital authorities will be
sought to, inter alia, allot and issue, in aggregate, 258,620,550
new Ordinary Shares upon exercise of the A Warrants, 387,930,900
new Ordinary Shares upon exercise of the B Warrants, 10,738,775 new
Ordinary Shares upon exercise of the Placement Agent Warrants,
12,500,000 new Ordinary Shares upon exercise of the Investor
Warrants and, subject to the maximum adjustment as discussed above,
up to 1,434,996,000 new Ordinary Shares upon exercise of the
Pre-Funded Warrants in connection with the Private Placement.
Notice of such general meeting is expected to be posted shortly
following closing of the Private Placement and a further
announcement will be made in due course.
Dilution and Securities Capital Table
The Private Placement will result in significant dilution to
existing equity holders in the Company. Upon issue of the Placing
Shares and exercise of Pre-Funded Warrants, existing shareholders
would be diluted by 70.5%. Based on the Company's current issued
share capital, should all existing warrants, share options, A
Warrants, B Warrants, Placement Agent Warrants and Investor
Warrants also be exercised at their initial exercise prices,
existing shareholders would be diluted by a total of 87.8%.
For illustrative purposes only, a summarised securities capital
table for the Company following completion of the Private Placement
is set out below:
Initial Pricing Case* Floor Price Adjustment Case**
As at the Issue of As at the Issue of
date of Private Following date of Private Following
this Placement the Private this Placement the Private
announcement securities Placement announcement securities* Placement
------------ ------------- ------------ ----------------------------- ------------- -------------- ---------------------------------
Ordinary
Shares 108,342,738 65,004,000 173,346,738 108,342,738 65,004,000 173,346,738
Pre-Funded
Warrants 0 193,616,550 193,616,550 0 1,434,996,000 1,434,996,000
------------ ------------- ------------ ----------------------------- ------------- -------------- ---------------------------------
Sub total 108,342,738 258,620,550 366,963,288 108,342,738 1,500,000,000 1,608,342,738
------------ ------------- ------------ ----------------------------- ------------- -------------- ---------------------------------
Percentage 29.5% 70.5% 100.0% 6.7% 93.3% 100.0%
------------ ------------- ------------ ----------------------------- ------------- -------------- ---------------------------------
Existing
warrants 17,221,972 0 17,221,972 17,221,972 0 17,221,972
A Warrants 0 258,620,550 258,620,550 0 258,620,550 258,620,550
B Warrants 0 387,930,900 387,930,900 0 387,930,900 387,930,900
Placement
Agent
Warrants 0 10,344,800 10,344,800 0 10,344,800 10,344,800
Placement
Agent
Warrants 0 393,975 393,975 0 393,975 393,975
Investor
Warrants 0 12,500,000 12,500,000 0 12,500,000 12,500,000
Share
options 2,894,697 0 2,894,697 2,894,697 0 2,894,697
------------ ------------- ------------ ----------------------------- ------------- -------------- ---------------------------------
Fully
Diluted 128,459,407 928,410,775 1,056,870,182 128,459,407 2,169,790,225 2,298,249,632
------------ ------------- ------------ ----------------------------- ------------- -------------- ---------------------------------
Percentage 12.2% 87.8% 100.0% 5.6% 94.4% 100.0%
------------ ------------- ------------ ----------------------------- ------------- -------------- ---------------------------------
Notes :
* - based on the initial set pricing, which may reduce per the
Price Adjustment Mechanism, and therefore more securities
ultimately be issued.
** - based on the Initial Issue Price being adjusted to the
floor price of US$0.10 per ADS, subject, inter alia, to shareholder
approval, as detailed above.
Further Information
Ladenburg has acted as placement agent in relation to the
Private Placement.
The securities were offered in a private placement under Section
4(a)(2) of the United States Securities Act of 1933, as amended
("Securities Act"), and have not been registered under the
Securities Act, or applicable state securities laws. Accordingly,
the securities may not be offered or sold in the United States
except pursuant to an effective registration statement or an
applicable exemption from the registration requirements of the
Securities Act and such applicable state securities laws. The
Company has agreed to file a registration statement with the U.S.
Securities and Exchange Commission registering the resale of the
shares issued in this Private Placement.
The Private Placement is being implemented by way of a
non-pre-emptive cashbox structure, such that monies received from
Placees will be applied by the Company's placement agent, Ladenburg
(acting as principal), in subscribing for redeemable preference
shares in a new company incorporated in Jersey ("JerseyCo"). The
Company will allot and issue the Units (pursuant to the Existing
Shareholder Authority and with the balance of securities subject to
the shareholder approval) to the Placees in consideration for the
transfer by Ladenberg of its holding of redeemable preference
shares in the JerseyCo to the Company. Accordingly, instead of
receiving cash consideration for the issue of the Units, following
completion of the Private Placement, the Company will own the
entire issued share capital of JerseyCo, whose principal assets
will comprise its cash reserves, which will represent an amount
approximately equal to the net proceeds of the Private
Placement.
The documents governing the Private Placement are subject to
customary terms, conditions, covenants, indemnification provisions
and warranties for a transaction of this nature.
Admission and total voting rights
Application has been made to the London Stock Exchange for the
Placing Shares to be admitted to trading on AIM ("Admission"). It
is expected that Admission will become effective and that dealings
in respect of the Placing Shares will commence at 8.00 a.m. on or
around 15 February 2023. The Placing Shares will rank pari passu
with the existing Ordinary Shares.
The Company's enlarged issued share capital following Admission
will comprise 173,346,738 Ordinary Shares each with voting rights.
The Company does not hold any shares in treasury. This figure of
173,346,738 Ordinary Shares may be used by shareholders in the
Company as the denominator for the calculations by which they will
determine if they are required to notify their interest in, or a
change in their interest in, the share capital of the Company under
the FCA's Disclosure Guidance and Transparency Rules.
For more information, please contact :
Midatech Pharma PLC
Stephen Stamp, CEO, CFO
Tel: +44 (0)29 20480 180
www.midatechpharma.com
Strand Hanson Limited (Nominated Adviser )
James Dance / Matthew Chandler / Rob Patrick
Tel: +44 (0)20 7409 3494
About Midatech Pharma PLC
Midatech Pharma PLC (currently dual listed on AIM: MTPH; and
NASDAQ: MTP) is a drug delivery technology company focused on
improving the bio-delivery and bio-distribution of medicines. The
Company combines approved and development medications with its
proprietary and innovative drug delivery technologies to provide
compelling products that have the potential to powerfully impact
the lives of patients.
The Company has developed three in-house technology platforms,
each with its own unique mechanism to improve delivery of
medications to sites of disease. All of the Company's technologies
have successfully entered human use in the clinic, providing
important validation of the potential for each platform:
-- Q-Sphera(TM) platform: a disruptive micro-technology used for
sustained release to prolong and control the release of
therapeutics over an extended period of time (from weeks to
months).
-- MidaSolve(TM) platform: an innovative nanotechnology used to
dissolve insoluble drugs so that they can be administered in liquid
form directly and locally into tumours.
-- MidaCore(TM) platform: a leading-edge nanotechnology used for
targeting medications to sites of disease.
The platform nature of its technologies offers the potential to
develop multiple drug assets rather than being reliant on a limited
number of programmes. Midatech's technologies are supported by 36
patent families including 120 granted patents and an additional 70
patent applications. Midatech's headquarters and R&D facility
is in Cardiff, UK. For more information please visit
www.midatechpharma.com .
Forward-Looking Statements
Certain statements in this announcement may constitute
"forward-looking statements" within the meaning of legislation in
the United Kingdom and/or the United States Private Securities
Litigation Reform Act. All statements contained in this
announcement that do not relate to matters of historical fact
should be considered forward-looking statements.
In certain cases, forward-looking statements can be identified
by the use of words such as "plans", "expects" or "does not
anticipate", or "believes", or variations of such words and phrases
or statements that certain actions, events or results "may",
"could", "would", "might" or "will be taken", "occur" or "be
achieved". By their nature, forward-looking statements involve risk
and uncertainty because they relate to future events and
circumstances, including, but not limited to, economic and business
conditions, the effects of continued volatility in credit markets,
market-related risks such as changes in the price of commodities or
changes in interest rates and foreign exchange rates, the policies
and actions of governmental and regulatory authorities, changes in
legislation, the further development of standards and
interpretations under International Financial Reporting Standards
("IFRS") applicable to past, current and future periods, evolving
practices with regard to the interpretation and application of
standards under IFRS, the outcome of pending and future litigation
or regulatory investigations, the success of future explorations,
acquisitions and other strategic transactions and the impact of
competition. A number of these factors are beyond the Company's
control. As a result, the Company's actual future results may
differ materially from the plans, goals, and expectations set forth
in the Company's forward-looking statements. You should not place
undue reliance on forward-looking statements. Any forward-looking
statements made in this Announcement by or on behalf of the Company
speak only as of the date they are made. Except as required by the
FCA, the London Stock Exchange or applicable law, the Company
expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements
contained in this Announcement to reflect any changes in the
Company's expectations with regard thereto or any changes in
events, conditions or circumstances on which any such statement is
based.
Reference should be made to those documents that Midatech shall
file from time to time or announcements that may be made by
Midatech in accordance with the London Stock Exchange's AIM Rules
for Companies ("AIM Rules"), the Disclosure and Transparency Rules
("DTRs") and the rules and regulations promulgated by the US
Securities and Exchange Commission, which contains and identifies
other important factors that could cause actual results to differ
materially from those contained in any projections or
forward-looking statements. These forward-looking statements speak
only as of the date of this announcement. All subsequent written
and oral forward-looking statements by or concerning Midatech are
expressly qualified in their entirety by the cautionary statements
above. Except as may be required under the AIM Rules or the DTRs or
by relevant law in the United Kingdom or the United States,
Midatech does not undertake any obligation to publicly update or
revise any forward-looking statements because of new information,
future events or otherwise arising.
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