☐
|
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☒
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the fiscal year ended December 31, 2017
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from ______________ to _______________
|
☐
|
SHELL COMPANY PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Date of event requiring this shell company report_________________
|
Title of each class
|
|
Name of each exchange on which
registered |
Ordinary Shares, nominal value 005p each
|
|
|
|
|
|
American Depositary Shares, each representing two ordinary shares
|
|
NASDAQ Capital Market
|
Large accelerated filer ☐
|
Accelerated filer
☐
|
Non-accelerated filer ☒
Emerging growth company
☒
|
U.S. GAAP
☐
|
International Financial Reporting Standards as issued by
the International Accounting Standards Board
☒
|
Other
☐
|
PART I
|
|
|
|
7
|
|
7
|
|
7
|
|
44
|
|
79
|
|
79
|
|
93
|
|
106
|
|
107
|
|
108
|
|
110
|
|
114
|
|
115
|
|
|
|
PART II
|
|
|
|
118
|
|
118
|
|
118
|
|
ITEM 16. [RESERVED]
|
|
119
|
|
120
|
|
120
|
|
120
|
|
120
|
|
121
|
|
121
|
|
121
|
|
|
|
PART III
|
|
|
|
122
|
|
122
|
|
123
|
|
126
|
· |
Phase I
clinical trials involve the assessment of the safety, pharmacodynamics and pharmacokinetics of a drug candidate in a small group of healthy human subjects (typically 20 to 100 patients), or in certain indications such as cancer, patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness and to determine optimal dosage.
|
· |
Phase II
clinical trials involve the assessment in patients of a drug to determine its safety, dose range, possible side effects and preliminary efficacy (typically 100 to 300 patients).
|
· |
Phase III
is a clinical trial involving the assessment of the efficacy and safety of a drug, usually in comparison with a marketed product or a placebo, in the patient population for which it is intended (typically 1,000 to 3,000 patients).
|
· |
Midatech’s estimates regarding losses, expenses, future revenues, capital requirements and needs for additional financing;
|
· |
Midatech’s ability to successfully test, manufacture, produce or commercialize products for conditions using the nanoparticle, nano-inclusion and sustained release drug delivery platforms;
|
· |
Midatech’s compliance with covenants contained in the terms of the agreements governing its indebtedness;
|
· |
the successful commercialization and manufacturing of Midatech’s licensed products, products originally licensed to Midatech US, and any future product Midatech may commercialize;
|
· |
the success and timing of Midatech’s preclinical studies and clinical trials;
|
· |
shifts in Midatech
’
s business and commercial strategy;
|
· |
the filing and timing of regulatory filings, including Investigational New Drug applications, with respect to any of Midatech’s products and the receipt of any regulatory approvals;
|
· |
the anticipated medical or other benefits of Midatech’s products;
|
· |
the difficulties in obtaining and maintaining regulatory approval of Midatech’s product candidates, and the labeling under any approval Midatech may obtain;
|
· |
the success and timing of the potential commercial development of Midatech’s product candidates and any product candidates Midatech may acquire in the future;
|
· |
Midatech’s plans and ability to develop and commercialize Midatech’s product candidates and any product candidates Midatech acquires in the future;
|
· |
the rate and degree of market acceptance of any of Midatech’s product candidates;
|
· |
the successful development of Midatech’s commercialization capabilities, including its internal sales and marketing capabilities;
|
· |
obtaining and maintaining intellectual property protection for Midatech’s product candidates and Midatech’s proprietary technology;
|
· |
the success of competing therapies and products that are or become available;
|
· |
the success of any future acquisitions;
|
· |
Midatech’s ability to continue as a going concern;
|
· |
the difficulties of integrating any future acquisitions into Midatech’s own business;
|
· |
the outcome of the Company
’
s remediation plan and approach to the material weaknesses in internal control over financial reporting;
|
· |
cybersecurity and other cyber incidents;
|
· |
industry trends;
|
· |
the impact of government laws and regulations;
|
· |
regulatory, economic and political developments in the United Kingdom, the European Union, the United States and other foreign countries;
|
· |
the difficulties doing business internationally;
|
· |
the ownership of Midatech’s Ordinary Shares and Depositary Shares;
|
· |
the status of Midatech’s ongoing leadership transition and Midatech’s failure to recruit or retain key scientific or management personnel or to retain Midatech’s executive officers;
|
· |
the impact and costs and expenses of any litigation Midatech may be subject to now or in the future; and
|
· |
the performance of third parties, including joint venture partners, Midatech’s sales force, Midatech’s collaborators, third-party suppliers and parties to Midatech’s licensing agreements.
|
(£’s in thousands, except share and per share data; all from continuing operations)
|
As of and for the
Year Ended
December 31,
|
|||||||||||||||||||
|
2017
|
2016
|
2015
|
2014
|
2013
|
|||||||||||||||
|
||||||||||||||||||||
Revenue
|
6,758
|
6,376
|
775
|
157
|
147
|
|||||||||||||||
Loss from operations
|
(17,578
|
)
|
(30,586
|
)
|
(12,918
|
)
|
(9,947
|
)
|
(4,499
|
)
|
||||||||||
Loss before tax
|
(17,329
|
)
|
(29,322
|
)
|
(11,232
|
)
|
(10,100
|
)
|
(4,883
|
)
|
||||||||||
Loss for the year attributable to the owners of the
parent
|
(16,064
|
)
|
(20,162
|
)
|
(10,099
|
)
|
(9,082
|
)
|
(4,084
|
)
|
||||||||||
Total other comprehensive (loss) income, net of
tax
|
(1,233
|
)
|
3,228
|
399
|
(151
|
)
|
5
|
|||||||||||||
Total comprehensive loss attributable to the
owners of the parent
|
(17,297
|
)
|
(16,934
|
)
|
(9,700
|
)
|
(9,233
|
)
|
(4,079
|
)
|
||||||||||
Loss Per Share Data:
|
||||||||||||||||||||
Basic and diluted loss per ordinary share-pence
|
(31p
|
)
|
(56p
|
)
|
(36p
|
)
|
(101p
|
)
|
(71p
|
)
|
||||||||||
Cash dividends declared per ordinary share
|
-
|
-
|
-
|
|||||||||||||||||
Weighted average number of ordinary shares
used
|
51,317,320
|
36,072,752
|
28,229,814
|
9,026,347
|
5,715,576
|
|||||||||||||||
|
||||||||||||||||||||
Consolidated Statement of Financial Position
Data:
|
||||||||||||||||||||
Non-Current assets
|
30,641
|
34,386
|
43,710
|
15,035
|
1,079
|
|||||||||||||||
Current assets
|
18,583
|
22,303
|
20,331
|
31,628
|
4,095
|
|||||||||||||||
Cash and cash equivalents
|
13,204
|
17,608
|
16,175
|
30,325
|
2,387
|
|||||||||||||||
Total assets
|
49,224
|
56,689
|
64,041
|
46,663
|
5,174
|
|||||||||||||||
Non-Current liabilities
|
6,185
|
1,620
|
8,055
|
1,842
|
2,119
|
|||||||||||||||
Borrowings
|
6,185
|
1,620
|
1,508
|
1,488
|
2,119
|
|||||||||||||||
Current liabilities
|
8,363
|
9,345
|
9,099
|
2,832
|
2,295
|
|||||||||||||||
Total liabilities
|
14,548
|
10,965
|
17,154
|
4,674
|
4,414
|
|||||||||||||||
Total equity
|
34,676
|
45,724
|
46,887
|
41,989
|
760
|
|||||||||||||||
Total equity and liabilities
|
49,224
|
56,689
|
64,041
|
46,663
|
5,174
|
|
High ($)
|
Low ($)
|
||||||
Recent Monthly Data
|
||||||||
March 2018
|
1.4236
|
1.3755
|
||||||
February 2018
|
1.4247
|
1.3794
|
||||||
January 2018
|
1.4264
|
1.3513
|
||||||
December 2017
|
1.3529
|
1.3316
|
||||||
November 2017
|
1.3506
|
1.3067
|
||||||
October 2017
|
1.3304
|
1.3063
|
|
Average
Rate ($)
(1)
|
|||
Annual Data (12-month period ended December 31)
|
||||
2017
|
1.3444
|
|||
2016
|
1.3444
|
|||
2015
|
1.5250
|
|||
2014
|
1.6461
|
|||
2013
|
1.5667
|
|
(1)
|
The average rates were calculated by taking the simple average of the daily noon buying rates, as published by the Federal Reserve Bank of New York, on the last day of each month during the period.
|
B. |
Capitalization and Indebtedness
|
C. |
Reasons for the Offer and Use of Proceeds
|
D. |
Risk Factors
|
· |
successfully complete development activities, including preclinical development and clinical trials for its product candidates;
|
· |
complete and submit new drug applications to the European Medicines Agency (the
“
EMA
”
), the Medicines and Healthcare Products Regulatory Agency in the United Kingdom (the
“
MHRA
”
), the United States Food and Drug Administration (the
“
FDA
”
), and any other foreign regulatory authorities, and obtain regulatory approval for testing and for products for which there is a commercial market;
|
· |
set a commercially viable price for its products;
|
· |
obtain commercial qualities of its products at acceptable cost levels;
|
· |
develop a commercial organization capable of sales, marketing and distribution in its markets; and
|
· |
obtain adequate reimbursement from third-parties, including government, departments and healthcare payors
|
· |
the further growth in sales of Zuplenz or products acquired in connection with the acquisition of DARA or any additional acquisitions and the commercialization of other assets, including those licensed from Novartis Pharma AG (“Novartis”);
|
· |
the initiation, progress, timing, costs and results of clinical trials for Midatech’s product candidates and future product candidates it may in-license or acquire;
|
· |
the attainment of milestones and the need to make any royalty payments on any of Midatech’s product candidates or any other future product candidates, including Zuplenz and any product candidates derived from Midatech’s license with Novartis;
|
· |
the number and characteristics of product candidates Midatech in-licenses or acquires and develops;
|
· |
the outcome, timing and cost of regulatory approvals by the EMA, the MHRA, the FDA and any other comparable foreign regulatory authorities, including the potential for such regulatory authorities to require that Midatech performs more studies, or more costly studies, than those it currently expects;
|
· |
the cost of filing, prosecuting, defending and enforcing any patent claims or other intellectual property rights;
|
· |
the effect of competing technological and market developments;
|
· |
the cost of establishing sales, marketing and distribution capabilities for any product candidates for which Midatech may receive regulatory approval; and
|
· |
Midatech’s need to repay amounts due under its senior secured credit agreement with an affiliate of MidCap Financial Services, LLC (“MidCap”), dated December 29, 2017 (the “Credit Agreement”).
|
· |
make it difficult for
Midatech
to satisfy its other debt obligations;
|
· |
make
Midatech
more vulnerable to general adverse economic and industry conditions;
|
· |
limit
Midatech’s
ability to obtain additional financing for working capital, capital expenditures, acquisitions and other general corporate requirements;
|
· |
limit
Midatech’s
ability to make large investments or acquisitions;
|
· |
expose
Midatech
to interest rate fluctuations because the interest rate on the debt under the MidCap Credit Agreement is variable;
|
· |
require
Midatech
to dedicate a portion of our cash flow from operations to payments on its debt, thereby reducing the availability of our cash flow for operations and other purposes;
|
· |
limit
Midatech’s
flexibility in planning for, or reacting to, changes in its business and the industry in which it operates; and
|
· |
place
Midatech
at a competitive disadvantage compared to competitors that may have proportionately less debt and greater financial resources.
|
· |
economic and demand factors affecting Midatech’s industry;
|
· |
pricing pressures;
|
· |
increased operating costs;
|
· |
competitive conditions; and
|
· |
other operating difficulties.
|
· |
incur additional debt;
|
· |
grant liens on assets;
|
· |
make investments, including capital expenditures and acquisitions;
|
· |
sell or acquire assets outside the ordinary course of business; and
|
· |
make fundamental business changes.
|
· |
delay or failure in reaching agreement with the applicable regulatory authorities on a trial design that Midatech is able to execute;
|
· |
delay or failure in obtaining authorization to commence a trial or inability to comply with conditions imposed by a regulatory authority regarding the scope or design of a clinical study;
|
· |
delay or failure in reaching agreement on acceptable terms with prospective contract research organizations (“CROs”), and clinical trial providers and sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;
|
· |
delay or failure in obtaining institutional review board (“IRB”), approval, or the approval of other reviewing entities, including foreign regulatory authorities, to conduct a clinical trial at each site;
|
· |
failure to recruit, or subsequent withdrawal of, clinical trial sites from Midatech’s clinical trials as a result of changing standards of care or the ineligibility of a site to participate in Midatech’s clinical trials;
|
· |
delay or failure in recruiting and enrolling suitable subjects to participate in a trial;
|
· |
delay or failure in having subjects complete a trial or return for post-treatment follow-up;
|
· |
clinical sites and investigators deviating from trial protocol, failing to conduct the trial in accordance with regulatory requirements, or dropping out of a trial;
|
· |
inability to identify and maintain a sufficient number of trial sites, many of which may already be engaged in other clinical trial programs, including some that may be for the same indication;
|
· |
failure of Midatech’s third party clinical trial managers or clinical sites to satisfy its contractual duties or meet expected deadlines;
|
· |
failure to receive the recommendation of health technology assessment bodies such as the US Agency for Healthcare Research and Quality, and other relevant international bodies or agencies responsible for pricing and utilization determinations;
|
· |
delay or failure in adding new clinical trial sites;
|
· |
ambiguous or negative interim results, or results that are inconsistent with earlier results;
|
· |
feedback from the EMA, the MHRA, the FDA, the IRB, data safety monitoring boards, or other regulatory authority, or results from earlier stage or concurrent preclinical and clinical studies, which might require modification to the protocol for a given study;
|
· |
decisions by the EMA, the MHRA, the FDA, the IRB, other regulatory authorities, or us, or recommendation by a data safety monitoring board or other regulatory authority, to suspend or terminate a clinical trial at any time for safety issues or for any other reason;
|
· |
unacceptable risk-benefit profile or unforeseen safety issues or adverse side effects;
|
· |
failure to demonstrate a benefit from using a drug over existing marketed products;
|
· |
manufacturing issues, including problems with manufacturing or obtaining from third parties sufficient quantities of raw materials, active pharmaceutical ingredients (“API”), or product candidates for use in clinical trials; and
|
· |
changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
|
· |
disagreement with the design or implementation of Midatech
’
s clinical trials;
|
· |
failure to demonstrate that a product candidate is safe and effective for its proposed indication;
|
· |
failure of clinical trial results to meet the level of statistical significance required for approval;
|
· |
failure to demonstrate that a product candidate
’
s clinical and other benefits outweigh its safety risks;
|
· |
disagreement with Midatech
’
s interpretation of data from preclinical studies or clinical trials;
|
· |
the insufficiency of data collected from clinical trials of Midatech
’
s product candidates to support the submission and filing of a new drug application or other submission or to obtain regulatory approval;
|
· |
disapproval of the manufacturing processes or facilities of third party manufacturers, if any, with whom Midatech contracts for clinical and commercial supplies; or
|
· |
changes in the approval policies or regulations that render Midatech
’
s preclinical and clinical data insufficient for approval.
|
· |
Midatech may suspend marketing of such product;
|
· |
Midatech may be obliged to conduct a product recall or product withdrawal;
|
· |
regulatory authorities may withdraw approvals of such product or may require additional warnings on the label;
|
· |
Midatech may be required to develop a REMS for each product or, if a strategy is already in place, to incorporate additional requirements under the REMS, or to develop a similar strategy as required by a comparable foreign regulatory authority;
|
· |
Midatech may be required to conduct additional post-market studies;
|
· |
Midatech may record significant inventory impairment charges to write down the value of inventories to estimated net realizable value; and
|
· |
Midatech could be sued and held liable for harm caused to subjects or patients.
|
· |
issue warning letter or untitled letters;
|
· |
mandate modifications to, or the withdrawal of, marketing and promotional materials or require Midatech to provide corrective information to healthcare practitioners;
|
· |
require Midatech to enter into a consent decree, which can include the imposition of various fines against Midatech, reimbursements of inspection costs, required due dates for specific actions and penalties for noncompliance;
|
· |
seek an injunction or impose civil or criminal penalties or monetary fines;
|
· |
suspend or withdraw its regulatory approval;
|
· |
suspend any ongoing clinical studies;
|
· |
refuse to approve pending applications or supplements to applications filed by us;
|
· |
suspend or impose restrictions on operations, the products, manufacturing or Midatech itself;
|
· |
require Midatech to change its product labeling; or
|
· |
seize or detain products, refuse to permit the import or export of products or require Midatech to initiate a product recall.
|
· |
Zuplenz, the only FDA-approved oral soluble film indicated for moderately emetogenic chemotherapy-induced nausea and vomiting (“CINV”), radiotherapy-induced nausea and vomiting (
“
RINV
”
), and post-operative nausea and vomiting (“PONV”);
|
· |
Gelclair, an FDA-cleared oral gel barrier device indicated for the management and relief of pain due to oral mucositis;
|
· |
Oravig, an orally dissolving buccal tablet approved for oral thrush; and
|
· |
Soltamox, an FDA-approved oral liquid solution of tamoxifen citrate, for the treatment and prevention of breast cancer.
|
· |
the acceptance of Midatech’s products by patients and the medical community and the availability, perceived advantages and relative cost, safety and efficacy of alternative and competing treatments;
|
· |
the effectiveness of Midatech’s marketing, sales and distribution strategy and operations;
|
· |
the prevalence and severity of any side effects;
|
· |
price;
|
· |
the ability of Midatech’s third-party manufacturers to manufacture commercial supplies of its products, to remain in good standing with regulatory agencies, and to develop, validate and maintain commercially viable manufacturing processes that are, to the extent required, compliant with cGMP regulations;
|
· |
the degree to which the approved labeling supports promotional initiatives for commercial success;
|
· |
the efficacy and potential advantages of alternative treatments;
|
· |
a continued acceptable safety profile of Midatech’s products and product candidates;
|
· |
any new or unexpected results from additional clinical trials or further analysis of clinical data of completed clinical trials by us or Midatech’s competitors;
|
· |
our ability to enforce Midatech’s intellectual property rights;
|
· |
our ability to avoid third-party patent interference or patent-infringement claims;
|
· |
maintaining compliance with all applicable regulatory requirements;
|
· |
the willingness of physicians to prescribe Midatech
’
s products; and
|
· |
sufficient coverage or reimbursement by the Centers for Medicare and Medicaid Services (“CMS”), other governmental agencies who have authority to approve pricing or reimbursement rates, and third party payors and the willingness and ability of patients to pay for Midatech’s products.
|
· |
Directive 2001/83/EC of 6 November 2001 on the European Community code as regards medicinal products for human use;
|
· |
Commission Directive 2003/94/EC of October 8, 2003 enforcing principles and guidelines of good manufacturing practice as they related to medicinal products and investigational medicinal products for human use;
|
· |
Commission Directive 2005/28/EC of April 8, 2005 establishing the principles and guidelines for good clinical practice relating to investigational medicinal products for human use, and the authorization requirements for the manufacturing or import thereof; and
|
· |
Council Directive 89/105/EEC, of December 21, 1988, addressing the transparency of measures that regulate pricing of medicinal products for human use and their inclusion in national health insurance systems.
|
· |
the scope of Midatech
’
s patents provides and will provide Midatech with exclusivity with respect to any or all of its products and technologies, as well as any other technologies and/or products that address the same problems as Midatech
’
s technologies and products by a different means, whether in the same manner as Midatech or not;
|
· |
pending or future patent applications will be issued as patents;
|
· |
Midatech
’
s patents, and/or those patents to which Midatech is licensed, are and will remain valid and enforceable and will not be subject to invalidity or revocation proceedings and that such proceedings will not result in a complete or partial loss of rights;
|
· |
Midatech
’
s entitlement to exploit patents from time to time (including patents registered solely in Midatech or its affiliates
’
name or in the joint names of Midatech or an affiliate and a third party or patents which are licensed to Midatech) is and will be sufficient to protect Midatech
’
s core intellectual property rights against third parties, its commercial activities from competition or to support comprehensively its ability to develop and market its proposed products either now or in the future;
|
· |
the lack of any particular patents or rights to exploit any particular patents, and the scope of Midatech
’
s patents, will not have a material adverse effect on Midatech
’
s ability to develop and market its proposed products, either now or in the future;
|
· |
Midatech has or will have the resources to pursue any infringer of: (i) patents registered in its name (whether solely or jointly with a third party) from time to time; or (ii) patents licensed to Midatech where Midatech or an affiliate has the financial responsibility to bring such infringement actions pursuant to the relevant license agreement;
|
· |
Midatech will develop technologies or products which are patentable, either alone or in conjunction with third parties;
|
· |
the ownership, scope or validity of any patents registered in Midatech
’
s name (either solely or jointly) from time to time will not be challenged by third parties, including parties with whom Midatech, or any affiliate, has entered into collaboration projects or co-ownership arrangements and that any such challenge will not be successful;
|
· |
any patent or patent application owned solely or jointly by Midatech will not be challenged on grounds that Midatech failed to identify the correct inventors or that Midatech failed to comply with its duty of disclosure to the United States Patent and Trademark Office or any equivalent office in a foreign jurisdiction having a disclosure requirement;
|
· |
any issued patent in Midatech
’
s sole or joint name from time to time will not be challenged in one or more post-grant proceedings, including but not limited to
inter partes
review, derivation proceedings, interferences, and that like; and that any such challenge will not result in a complete or partial loss of rights to such issued patent or patents;
|
· |
any patent applications in Midatech
’
s sole or joint name from time to time will not be opposed by any third party, including parties to collaboration, co-existence and any other contractual relationship with Midatech or any of its members;
|
· |
the license agreements between Midatech and third parties are and will be valid and subsisting in the future or until their expiry dates, and that Midatech has complied with its contractual obligations under the license agreements;
|
· |
all intellectual property capable of being commercialized that is or has been generated pursuant to collaboration agreements between Midatech and third parties will be or has been identified;
|
· |
all intellectual property generated pursuant to collaboration agreements and to which Midatech has a contractual entitlement or generated by employees has been lawfully assigned into Midatech
’
s sole name (or to one of its subsidiaries);
|
· |
in respect of all intellectual property generated pursuant to a collaboration agreement between Midatech and a third party to which Midatech and that third party have a joint contractual entitlement, that such intellectual property has been lawfully assigned into joint names and the rights between Midatech and that third party are properly regulated by a co-ownership agreement; and
|
· |
beyond contractual warranties, the licensors of intellectual property to Midatech or affiliate own the relevant patents and that those patents have not and will not be the subject of, or subject to, infringement, invalidity or revocation actions.
|
· |
decreased demand for any product candidates or product that Midatech may develop;
|
· |
significant negative media attention and injury to Midatech
’
s reputation;
|
· |
significant costs to defend the related litigation;
|
· |
substantial monetary awards to trial subjects or patients;
|
· |
loss of revenue;
|
· |
diversion of management and scientific resources from Midatech
’
s business operations; and
|
· |
the inability to commercialize any products that Midatech may develop.
|
· |
have economic or business interests or goals that are inconsistent with those of Midatech and be in a position to take or influence actions contrary to Midatech
’
s interests and plans, which may create impasses on decisions and affect Midatech
’
s ability to implement its strategies;
|
· |
veto proposals in respect of joint venture operations;
|
· |
be unable or unwilling to fulfill their obligations under the joint venture or other agreements; or
|
· |
experience financial or other difficulties.
|
· |
the federal healthcare anti-kickback statute;
|
· |
the federal civil False Claims;
|
· |
the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act;
|
· |
the federal Physician Payment Sunshine Act, being implemented as the Open Payments Program; and
|
· |
analogous state laws and regulations, such as state anti-kickback and false claims laws.
|
· |
currency exchange rate fluctuations;
|
· |
restrictions on repatriation of earnings;
|
· |
efforts to develop an international sales, marketing and distribution organization, which may increase Midatech
’
s expenses, divert management
’
s attention from the acquisition or development of product candidates or cause it to forgo profitable licensing opportunities in these geographies;
|
· |
unexpected changes in foreign laws and regulatory requirements, including pharmaceutical regulations;
|
· |
difficulty of effective enforcement of contractual provisions in local jurisdictions;
|
· |
inadequate intellectual property (including confidentiality) protection in foreign countries;
|
· |
trade-protection measures, import or export licensing requirements and fines, penalties or suspension or revocation of export privileges; and
|
· |
changes in a specific country
’
s or a region
’
s political or economic conditions, particularly in emerging markets.
|
· |
issue stock that would dilute its stockholders
’
percentage of ownership;
|
· |
be obligated to make milestone or other contingent or non-contingent payments;
|
· |
incur debt and assume liabilities; and
|
· |
incur amortization expenses related to intangible assets or incur large and immediate write-offs.
|
· |
problems integrating the purchased business, products or technologies, including the failure to achieve the expected benefits and synergies;
|
· |
increases to Midatech
’
s expenses;
|
· |
the failure to have discovered undisclosed liabilities of the acquired asset or company;
|
· |
diversion of management
’
s attention from their day-to-day responsibilities;
|
· |
harm to Midatech
’
s operating results or financial condition;
|
· |
entrance into markets in which Midatech has limited or no prior experience; and
|
· |
potential loss of key employees, particularly those of the acquired entity.
|
· |
the success of competitive products or technologies;
|
· |
regulatory actions with respect to Midatech’s products or its competitors’ products;
|
· |
actual or anticipated changes in Midatech’s growth rate relative to its competitors;
|
· |
announcements by Midatech or its competitors of new products, significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments;
|
· |
the progress of preclinical development, laboratory testing and clinical trials of Midatech’s product candidates or those of its competitors;
|
· |
the results from Midatech’s clinical programs and any future trials it may conduct;
|
· |
developments in the clinical trials of potentially similar competitive products;
|
· |
EMA, FDA or international regulatory or legal developments;
|
· |
failure of any of Midatech’s product candidates, if approved, to achieve commercial success;
|
· |
developments or disputes concerning patent applications, issued patents or other proprietary intellectual property rights;
|
· |
the recruitment or departure of key personnel;
|
· |
the level of expenses related to any of Midatech’s product candidates or clinical development programs;
|
· |
litigation or public concern about the safety of Midatech’s products;
|
· |
actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;
|
· |
actual and anticipated fluctuations in Midatech’s operating results;
|
· |
variations in Midatech’s financial results or those of companies that are perceived to be similar to it;
|
· |
share price and volume fluctuations attributable to inconsistent trading volume levels of Midatech’s shares;
|
· |
announcement or expectation of additional financing efforts;
|
· |
rumors relating to Midatech or its competitors;
|
· |
sales of Ordinary Shares or Depositary Shares by Midatech, its insiders or its other shareholders;
|
· |
changes in the structure of healthcare payment systems;
|
· |
market conditions in the pharmaceutical and biotechnology sectors;
|
· |
third party reimbursement policies;
|
· |
Brexit and any resulting economic or currency volatility;
|
· |
developments concerning current or future collaborations, strategic alliances, joint ventures or similar relationships; and
|
· |
reviews of long-term values of Midatech’s assets, which could lead to impairment charges that could reduce its earnings.
|
· |
the cost and availability of reimbursement for the product;
|
· |
treatment guidelines issued by government and non-government agencies in the United States, the United Kingdom and other foreign jurisdictions;
|
· |
the timing of market entry relative to competitive products;
|
· |
the availability of alternative therapies;
|
· |
the price of the product relative to alternative therapies, including generic versions of products that compete with Midatech’s products;
|
· |
the rates of returns and rebates;
|
· |
uncertainty about the pace of acceptance of the product;
|
· |
the ability of Midatech’s third-party manufacturers to manufacture and deliver the product in commercially sufficient quantities;
|
· |
the ability of Midatech’s third-party distributors and wholesalers to process orders in a timely manner and satisfy their obligations to it;
|
· |
the extent and success of Midatech’s marketing efforts; and
|
· |
potential side effects or unfavorable publicity concerning Midatech’s products or similar products.
|
· |
the requirement to file periodic reports and financial statements with the SEC as frequently or as promptly as United States companies with securities registered under the Exchange Act;
|
· |
the requirement to file financial statements prepared in accordance with GAAP;
|
· |
the proxy rules, which impose certain disclosure and procedural requirements for proxy solicitations; and
|
· |
the requirement to comply with Regulation FD, which imposes certain restrictions on the selective disclosure of material information.
|
A.
|
History and Development of the Group
|
· |
further expansion of the Group
’
s manufacturing facilities in Bilbao, Spain to enable the manufacture of material based around the Group
’
s sustained release technology costing
£
0.85 million; and
|
· |
additional equipment purchased for the Group
’
s sustained release development facility, costing
£
0.24 million.
|
· |
the fit-out and equipping of new laboratory and office facilities at the Group
’
s headquarters facility near Oxford, United Kingdom, costing
£
0.42 million;
|
· |
an upgrade of the Group
’
s information technology infrastructure, including the acquisition of a new accounting and enterprise resource planning software, costing
£
0.14 million; and
|
· |
ongoing development of commercial scale manufacturing equipment for the Group
’
s sustained release technology, costing
£
0.18 million.
|
B.
|
Business Overview
|
· |
Zuplenz
®
(ondansetron) Oral Soluble Film (“Zuplenz”), the only FDA-approved oral soluble film indicated for moderately emetogenic chemotherapy-induced nausea and vomiting (“CINV”), , radiotherapy-induced nausea and vomiting (“RONV”), and post-operative nausea and vomiting (“PONV”);
|
· |
Gelclair
®
bioadherent oral gel, an FDA-cleared gel barrier device indicated for the management and relief of pain due to oral mucositis;
|
· |
Oravig
®
(miconazole), an orally dissolving buccal tablet approved for the treatment of oral thrush; and
|
· |
Soltamox
®
, an FDA-approved oral liquid solution of tamoxifen citrate, for the treatment and prevention of breast cancer.
|
|
Year ended December 31,
|
|||||||||||
(
£’
s in thousands)
|
2017
|
2016
|
2015
|
|||||||||
Revenue (United States)
|
6,609
|
5,850
|
677
|
|||||||||
Revenue (Europe) (1)
|
149
|
526
|
98
|
|||||||||
Total Revenue
|
6,758
|
6,376
|
775
|
(1) |
Including the United Kingdom.
|
· |
an exemption from compliance with the auditor attestation requirement on the effectiveness of our internal controls over financial reporting;
|
· |
an exemption from compliance with any requirement that the Public Company Accounting Oversight Board may adopt regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;
|
· |
reduced disclosure about the company’s executive compensation arrangements; and
|
· |
exemptions from the requirements to obtain a non-binding advisory vote on executive compensation or a shareholder approval of any golden parachute arrangements.
|
· |
Advance R&D
. Progress development of in-house oncology product candidates, through value-driving inflexion points and towards commercialization.
|
· |
US Commercial.
Continue to grow sales of licensed, commercialized products, through Midatech US.
|
· |
Partner Products
. Although not a primary focus, we have historically worked on, and will continue to explore opportunities for, the development and commercialization of Midatech’s partner-supported and licensed products which may add to future value.
|
· |
In-House Products Commercialization.
Midatech anticipates, from around 2020, that its own products will reach market in the specialized orphan sector, in order to drive sales and revenue growth from Midatech
’
s own product launches.
|
· |
Commercial Operations
. Currently the main revenue growth driver is Midatech’s existing in-licensed commercial product portfolio.
|
· |
Partner Licensing and Royalty Deals.
From 2018, revenue growth is anticipated to be supported by licensing transactions from potential partners who may wish to license Midatech’s in-house developed products for commercialization in geographies or therapeutic areas that it does not seek to enter, with possible product royalties realized from 2020 onwards.
|
· |
Acquisitional.
In support of and in addition to above, Midatech may from time to time seek value accretive and synergistic target companies, products and portfolios that would accelerate its own product recurring revenues and profitability via products in market. Any such significant acquisitions would only be made in the short-term if based on non-dilutive financing.
|
· |
Advantages of Multivalency.
|
o |
Targeting: multivalency enables binding of several targeting and therapeutic agents to a single nanoparticle.
|
o |
Therapeutics: binding of several active payload moieties conjugated to form small (~5nm) medicines for targeted delivery.
|
o |
Solubility: binding of glycan corona enables water solubility and the transport of water insoluble and lipid soluble compounds to disease sites.
|
o |
Releasability: ligands are aided to release the active compound inside the cell
|
· |
Advantages of Size
:
|
o |
Mobility: small size (~1.5 nm) and defined charge allows transport to disease sites otherwise very difficult reach.
|
o |
Compatibility: ultra-small gold nanoparticles are bio-inert, non-toxic, non-immunogenic, and do not generate an immune response.
|
o |
Excretability: size of drug conjugates allows elimination via the kidneys and liver.
|
· |
concluding a license agreement with a third party in respect of any of the intellectual property rights comprising the subject matter of the agreement;
|
· |
demonstrating therapeutic and/or diagnostic efficacy in an animal model derived from research sponsored by Midatech (or its affiliated companies);
|
· |
demonstration of a diagnostic product in Phase I clinical trials arising from intellectual property rights; or
|
· |
selling products made by Midatech, affiliated companies or licensees exploiting the intellectual property rights comprising the subject matter of the agreement which generate net sales royalties or net revenue royalties for CSIC.
|
Cumulative Sales Amount
|
Royalty
|
|||
Net Sales to
€
1 million
|
6
|
%
|
||
Net Sales between
€
1 million and
€
9,999,999
|
5
|
%
|
||
Net Sales between
€
10 million and
€
99,999,999
|
4
|
%
|
||
Net Sales
€
100 million and above
|
3
|
%
|
· |
Drug conjugate technology:
Midatech
’
s core platform is a pioneering drug conjugate delivery system based on GNPs (a class of carbohydrate-coated gold nanoparticles) combined with approved drugs for targeted release at specific organs, cells or sites of disease;
|
· |
Sustained release technology:
Midatech
’
s second platform involves the consistent and precise encapsulation of active drug compounds within polymer microspheres that are designed to release drugs and drug compounds into the body in a highly controlled manner over a prolonged period of time; and
|
· |
Nano-Inclusion Technology:
Midatech’s third platform is its nano-inclusion technology used for local delivery of therapeutics. Midatech’s know-how in nano-inclusion technology can increase the solubility of cancer therapeutics by incorporating them into the interior of hosting inclusion complexes that surround the therapeutic and “carry” it as a water-soluble agent in the body.
|
· |
Oncology including Nano-inclusion technology.
8 patent families, which have predicted expiration dates ranging from 2025 to 2036. These patent rights include 11 granted patents and 14 pending applications in Key Markets relating to products and methods for treating and imaging cancers. In addition to the radiative and immune-based therapies contemplated by many of these patent families, Midatech
’
s pipeline of GNP-drug conjugates for oncology benefits from protection by the foundation GNP patents of patent family 1.
|
· |
Nanoparticle technology.
15 patent families, with expiration dates ranging from 2021 to 2036. These patent families include 60 granted patents and 23 pending patent applications in Key Markets protecting products in Midatech
’
s pipeline.
|
· |
Sustained release technology.
11 patent families which protect devices, methods and formulations for sustained release drug delivery. Midatech
’
s pipeline products Q-Octreotide and Opsisporin are protected 26 granted and 19 pending international applications.
|
· |
completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA
’
s good laboratory practice (
“
GLP
”
) regulations;
|
· |
submission to the FDA of an investigational new drug application, which must take effect before human clinical trials may begin;
|
· |
approval of clinical protocols by an independent institutional review board (“IRB”), representing each clinical site before each site may enroll subjects;
|
· |
potential initiation and completion of successive clinical trials that establish safety dose ranges;
|
· |
performance of adequate and well-controlled human clinical trials in accordance with good clinical practices (“GCP”) to establish the safety and efficacy of the proposed drug product for each indication;
|
· |
preparation and submission to the FDA of a new drug application (“NDA”) or a biologics license application (“BLA”);
|
· |
review of the submission by an FDA advisory committee, where appropriate or if applicable;
|
· |
satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with cGMP requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity;
|
· |
satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCPs and the integrity of the clinical data;
|
· |
payment of user fees and securing FDA approval of the NDA or BLA; and
|
· |
agree to comply with any post-approval requirements, including Risk Evaluation and Mitigation Strategies (“REMS”), and post-approval studies required by the FDA.
|
· |
restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;
|
· |
fines, warning letters or holds on post-approval clinical trials;
|
· |
refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product license approvals;
|
· |
product seizure or detention, or refusal to permit the import or export of products; or
|
· |
injunctions or the imposition of civil or criminal penalties.
|
· |
the required patent information has not been filed;
|
· |
the listed patent has expired;
|
· |
the listed patent has not expired, but will expire on a particular date and approval is sought after patent expiration; or
|
· |
the listed patent is invalid, unenforceable or will not be infringed by the new product.
|
· |
preclinical laboratory tests, animal studies and formulation studies all performed in accordance with the applicable European Union Good Laboratory Practice regulations;
|
· |
submission to the relevant national authorities of a clinical trial application (
“
CTA
”
) which must be approved before human clinical trials may begin;
|
· |
performance of adequate and well-controlled clinical trials to establish the safety and efficacy of the product for each proposed indication;
|
· |
submission to the relevant competent authorities of a marketing authorization application (
“
MAA
”
) which includes the data supporting safety and efficacy as well as detailed information on the manufacture and composition of the product in clinical development and proposed labelling;
|
· |
satisfactory completion of an inspection by the relevant national authorities of the manufacturing facility or facilities, including those of third parties, at which the product is produced to assess compliance with strictly enforced current cGMP;
|
· |
potential audits of the non-clinical and clinical trial sites that generated the data in support of the MAA; and
|
· |
review and approval by the relevant competent authority of the MAA before any commercial marketing, sale or shipment of the product.
|
· |
a streamlined application procedure via a single entry point, the European Union portal;
|
· |
a single set of documents to be prepared and submitted for the application as well as simplified reporting procedures that will spare sponsors from submitting broadly identical information separately to various bodies and different member states;
|
· |
a harmonized procedure for the assessment of applications for clinical trials, which is divided in two parts. Part I is assessed jointly by all member states concerned. Part II is assessed separately by each member state concerned;
|
· |
strictly defined deadlines for the assessment of clinical trial application; and
|
· |
the involvement of the ethics committees in the assessment procedure in accordance with the national law of the member state concerned but within the overall timelines defined by the Regulation (EU) No 536/2014.
|
· |
medicinal products developed by means of one of the following biotechnological processes:
|
o |
recombinant DNA technology;
|
o |
controlled expression of genes coding for biologically active proteins in prokaryotes and eukaryotes including transformed mammalian cells; and
|
o |
hybridoma and monoclonal antibody methods;
|
· |
advanced therapy medicinal products as defined in Article 2 of Regulation (EC) No. 1394/2007 on advanced therapy medicinal products;
|
· |
medicinal products for human use containing a new active substance that, on the date of effectiveness of this regulation, was not authorized in the European Union, and for which the therapeutic indication is the treatment of any of the following diseases:
|
o |
acquired immune deficiency syndrome (AIDS);
|
o |
cancer;
|
o |
neurodegenerative disorder;
|
o |
diabetes;
|
o |
auto-immune diseases and other immune dysfunctions; and
|
o |
viral diseases; and
|
· |
medicinal products that are designated as orphan medicinal products pursuant to Regulation (EC) No 141/2000.
|
· |
The decentralized procedure allows applicants to file identical applications to several European Union member states and receive simultaneous national approvals based on the recognition by European Union member states of an assessment by a reference member state.
|
· |
The national procedure is only available for products intended to be authorized in a single European Union member state.
|
· |
A mutual recognition procedure similar to the decentralized procedure is available when a marketing authorization has already been obtained in at least one European Union member state.
|
· |
the federal Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid;
|
· |
the federal False Claims Act imposes civil penalties, and provides for civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;
|
· |
the federal Health Insurance Portability and Accountability Act of 1996 (
“
HIPAA
”
) imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;
|
· |
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and its implementing regulations, also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;
|
· |
the federal false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services;
|
· |
the federal transparency requirements under the Health Care Reform Law requires manufacturers of drugs, devices, biologics and medical supplies to report to the Department of Health and Human Services information related to payments and other transfers of value to physicians and teaching hospitals and physician ownership and investment interests; and
|
· |
analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers.
|
· |
brentuximab vedotin, marketed as Adectris by Seattle Genetics and Millennium Pharmaceuticals/Takeda Oncology, is an antibody drug conjugate directed to the protein CD30, and is used to treat lymphoma;
|
· |
trastuzumab emtansine, marketed as Kadcyla by Genentech Inc., a subsidiary of F. Hoffman-La Roche AG, is an antibody drug conjugate used for the treatment of metastatic breast cancer;
|
· |
Abraxane, marketed by Celgene Corporation, consists of paclitaxel protein-bound particles for injectable suspension, and is used for treating breast, lung, pancreatic and various other cancers;
|
· |
Doxil, marketed by Janssen Products, is a doxorubicin HCI liposome injection used for ovarian cancer, Kaposi’s sarcoma (a form of cancer that develops from the cells that line lymph or blood vessels) and multiple myeloma;
|
· |
ThermoDox, a variant of Doxil, is marketed by Celsion Corporation, is a lyso-thermosensitive liposomal doxorubicin, and is used for treating breast and liver cancer. A variant of ThermoDox, called DaunoXome, marketed by Galen Pharmaceuticals, is a liposomal daunorubicin, and is used to treat Karposi’s sarcoma;
|
· |
Marquibo, marketed by Spectrum Pharmaceuticals, is a liposome-encapsulated vincristine, and is used to treat certain forms of leukemia.
|
C.
|
Organizational Structure
|
Subsidiaries
|
Country of Incorporation
|
Voting Interest
|
Subsidiaries of Midatech Pharma PLC
|
|
|
Midatech Pharma (Wales) Limited
|
England and Wales
|
100%
|
Midatech Limited
|
England and Wales
|
100%
|
Midatech Pharma US Inc.
|
United States (Delaware)
|
100%
|
Midatech Pharma Pty Limited
|
Australia
|
100%
|
Joint Ventures with Midatech Limited
|
||
MidaSol Therapeutics GP (1)(3)
|
Cayman Islands
|
50%
|
Syntara LLC (2)(3)
|
United States (Delaware)
|
50%
|
Subsidiaries of Midatech Limited
|
|
|
Midatech Pharma Espa
ñ
a SL
|
Spain
|
100%
|
Pharmida AG (3)
|
Switzerland
|
100%
|
Subsidiaries of Midatech Pharma US Inc.
|
|
|
DARA Therapeutics, Inc.
|
United States (North Carolina)
|
100%
|
(1) |
Joint venture between Midatech Limited and Aquestive Therapeutics, formerly known as MonoSol.
|
(2) |
Joint venture between Midatech Limited and Immunotope Inc. The percentage ownership of the entity is determined by reference to the partnership agreement and varies from time to time depending on capital committed. While 50% is the economic interest, Midatech Limited can currently direct 49% of the voting rights.
|
(3) |
Dormant entities.
|
D. |
Property, Plant and Equipment
|
A. |
Operating Results.
|
· |
Payment discounts are reductions to invoiced amounts offered to customers for payment within a specified period and are estimated upon shipment utilizing historical customer payment experience.
|
· |
The returns provision is based on management's experience of returns by product and is booked as a percentage of product sales recognized during the period. These recognized sales include shipments that have occurred out of wholesalers as well as direct shipments made by us to other third-party purchasers. Actual returns by products inform the assumptions used to calculate future returns provisions and related reserves are adjusted accordingly. The returns reserve is recorded as a reduction of revenue in the same period the related product sales revenue is recognized and is included in accrued expenses.
|
· |
Generally, credits may be issued to wholesalers for decreases that are made to selling prices for the value of inventory that is owned by the wholesaler at the date of the price reduction. Price adjustment credits are estimated at the time the price reduction occurs and the amount is calculated based on the level of the wholesaler inventory at the time of the reduction.
|
· |
There are arrangements with certain parties establishing prices for products for which the parties independently select a wholesaler from which to purchase. Such parties are referred to as indirect customers. A chargeback represents the difference between the sales invoice price to the wholesaler and the indirect customer's contract price, which is lower. Provisions for estimating chargebacks are calculated primarily using historical chargeback experience, contract pricing and sales information provided by wholesalers and chains, among other factors. We recognize chargebacks in the same period the related revenue is recognized.
|
2016
reclassified
|
2016
original
|
2015
reclassified
|
2015
original
|
|||||||||||||
£’000
|
£’000
|
£’000
|
£’000
|
|||||||||||||
Research and development costs
|
7,796
|
6,684
|
8,710
|
5,920
|
||||||||||||
Distribution costs, sales and marketing
|
12,510
|
9,523
|
605
|
374
|
||||||||||||
Administrative costs
|
5,123
|
9,222
|
4,908
|
7,929
|
||||||||||||
25,429
|
25,429
|
14,223
|
14,223
|
· |
future expected cash flows from in-process research and development;
|
· |
the fair value of the property, plant and equipment; and
|
· |
discount rates.
|
· |
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.
|
· |
The Group’s “Revenue” is largely derived from the sale of pharmaceutical products and services, where control transfers to customers and performance obligations are satisfied at the time of shipment to receipt of the products by the customer or when the services are performed. There is no expectation for IFRS 15 to significantly change the timing or amount of revenue recognized under these arrangements; and
|
· |
Grant Revenue is outside the scope of IFRS 15.
|
|
Year Ended
December 31,
|
|||||||
|
2017
|
2016
|
||||||
|
(£ in thousands)
|
|||||||
|
||||||||
Revenue
|
6,758
|
6,376
|
||||||
Grant revenue
|
840
|
547
|
||||||
Total revenue
|
7,598
|
6,923
|
||||||
Cost of Sales
|
(926
|
)
|
(667
|
)
|
||||
Gross Profit
|
6,672
|
6,256
|
||||||
Research and development costs
(2016 reclassified)
|
(10,185
|
)
|
(7,796
|
)
|
||||
Distribution costs, sales and marketing
(2016 reclassified)
|
(9,417
|
)
|
(12,510
|
)
|
||||
Administrative costs
(2016 reclassified)
|
(3,148
|
)
|
(5,123
|
)
|
||||
Impairment of intangible assets
|
(1,500
|
)
|
(11,413
|
)
|
||||
Loss from operations
|
(17,578
|
)
|
(30,586
|
)
|
||||
Finance income
|
415
|
1,337
|
||||||
Finance expense
|
(166
|
)
|
(73
|
)
|
||||
Loss before tax
|
(17,329
|
)
|
(29,322
|
)
|
||||
Taxation
|
1,265
|
9,160
|
||||||
Loss for the year attributable to the owners of the parent
|
(16,064
|
)
|
(20,162
|
)
|
|
Year Ended
December 31,
|
|||||||
|
2016
|
2015
|
||||||
|
(£ in thousands)
|
|||||||
|
||||||||
Revenue
|
6,376
|
775
|
||||||
Grant revenue
|
547
|
600
|
||||||
Total revenue
|
6,923
|
1,375
|
||||||
Cost of Sales
|
(667
|
)
|
(70
|
)
|
||||
Gross Profit
|
6,256
|
1,305
|
||||||
Research and development costs
(2016 reclassified)
|
(7,796
|
)
|
(8,710
|
)
|
||||
Distribution costs, sales and marketing
(2016 reclassified)
|
(12,510
|
)
|
(605
|
)
|
||||
Administrative costs
(2016 reclassified)
|
(5,123
|
)
|
(4,908
|
)
|
||||
Impairment of intangible asset
|
(11,413
|
)
|
-
|
|||||
Loss from operations
|
(30,586
|
)
|
(12,918
|
)
|
||||
Finance income
|
1,337
|
1,691
|
||||||
Finance expense
|
(73
|
)
|
(5
|
)
|
||||
Loss before tax
|
(29,322
|
)
|
(11,232
|
)
|
||||
Taxation
|
9,160
|
1,133
|
||||||
Loss for the year attributable to the owners of the parent
|
(20,162
|
)
|
(10,099
|
)
|
B. |
Liquidity and Capital Resources.
|
· |
providing resources to progress research and development on Midatech
’
s target products, including Q-Octreotide, and to further develop its technology platforms;
|
· |
enhancing Midatech
’
s profile among current and prospective partners, suppliers and customers;
|
· |
providing the potential to access capital to fund Midatech
’
s future growth and support further any potential expansion plans;
|
· |
providing a platform for potential further acquisitions of companies, products and intellectual property; and
|
· |
providing opportunities for Midatech to attract, retain and incentivize high caliber employees.
|
|
Year ended December 31,
|
||||||||||
|
2017
|
2016
|
2015
|
||||||||
|
(£’s in thousands)
|
||||||||||
Cash used in operating activities
|
(12,971
|
)
|
(13,086
|
)
|
(12,421
|
)
|
|||||
Cash used in investing activities
|
(1,470
|
)
|
(1,202
|
)
|
(1,533
|
)
|
|||||
Cash provided (used) by financing activities
|
10,277
|
15,255
|
(219
|
)
|
|||||||
Net increase (decrease) in cash and equivalents
|
4,146
|
967
|
(14,173
|
)
|
|
Year Ended
December 31,
|
|||||||||||
|
2017
|
2016
|
2015
|
|||||||||
|
(£’s in thousands)
|
|||||||||||
Cash flows from operating activities before changes in working capital
|
(12,791
|
)
|
(14,615
|
)
|
(12,176
|
)
|
||||||
Changes in working capital
|
(1,437
|
)
|
(121
|
)
|
(891
|
)
|
||||||
Cash used in operations
|
(14,408
|
)
|
(14,736
|
)
|
(13,067
|
)
|
C. |
Research and Development, Patents and Licenses, Etc.
|
D. |
Trend Information.
|
E. |
Off-Balance Sheet Arrangements.
|
F. |
Tabular Disclosure of Contractual Obligations.
|
|
Payments due by period
|
|||||||||||||||||||
|
Total
|
Less than 1
year |
1-3 years
|
3-5 years
|
More than 5
years |
|||||||||||||||
|
(£’s in thousands)
|
|||||||||||||||||||
Bank Loans
|
6,607
|
479
|
3,510
|
2,618
|
-
|
|||||||||||||||
Government Research Loans
|
1,370
|
311
|
4,649
|
363
|
47
|
|||||||||||||||
Finance Leases
|
71
|
41
|
30
|
-
|
-
|
|||||||||||||||
Operating Leases
|
848
|
457
|
391
|
-
|
-
|
|||||||||||||||
Total
|
8,896
|
1,288
|
4,580
|
2,981
|
47
|
G. |
Safe Harbor
|
A. |
Directors and Senior Management
|
Name
|
Age at
12/31/2017
|
|
Position/Title
|
|||
Directors:
|
|
|
||||
James Phillips, MB, ChB (3) (4) (6)
|
55
|
|
Chief Executive Officer, Director
|
|||
Nicholas Robbins-Cherry (3) (4)
|
48
|
|
Chief Financial Officer, Director
|
|||
Rolf Stahel (2) (3)
|
73
|
|
Non-Executive Chairman of the Board of Directors
|
|||
John Johnston (1) (3) (4)
|
59
|
|
Non-Executive Director
|
|||
Michele Luzi (2) (3)
|
60
|
|
Non-Executive Director
|
|||
Pavlo (Paul) Protopapa (1) (3)
|
51
|
Non-Executive Director
|
||||
Simon Turton, Ph.D. (1) (2) (3)
|
50
|
Senior Independent Non-Executive Director
|
||||
Sijmen (Simon) de Vries, M.D. (2) (3)
|
58
|
Non-Executive Director
|
||||
Executive Officers (5):
|
|
|||||
Craig Cook, MB, BCH (5)
|
51
|
Chief Operating Officer and Chief Medical Officer
|
||||
David Benharris
|
53
|
President, Midatech Pharma US, Inc.
|
(1) |
Audit Committee member
|
(2) |
Remuneration Committee member
|
(3) |
Nominations Committee member
|
(4) |
Disclosure Committee member
|
(5) |
Other than directors who are also executive officers.
|
(6) |
Dr. Phillips will resign from his positions with the Company (and its subsidiaries) on May 31, 2018. Dr. Cook will become Chief Executive Officer and a director of Midatech as of June 1, 2018.
|
B. |
Compensation
|
Name
|
Fees Earned
or
Paid in Cash
(£)(1)
|
All Other
Compensation
(£)
|
Total
(£)
|
|||||||||
Rolf Stahel
|
50,000
|
49,980 (2)
|
99,980
|
|||||||||
John Johnston
|
36,100 (3)
|
-
|
36,100
|
|||||||||
Michele Luzi
|
36,100 (3)
|
-
|
36,100
|
|||||||||
Pavlo Protopapa
|
36,100
|
-
|
36,100
|
|||||||||
Simon Turton
|
36,100 (3)
|
-
|
36,100
|
|||||||||
Sijmen de Vries
|
36,100
|
-
|
36,100
|
(1) |
Includes annual fees, committee chairpersonship fees and meeting fees.
|
(2) |
Includes fees paid to Mr. Stahel in connection with a consultancy agreement with Chesyl Pharma Limited, a company wholly owned by Mr. Stahel.
|
(3) |
A portion of the compensation paid to each of Messrs. Johnston, Luzi and Turton for their services on the Board are paid to consulting firms owned by each of Mr. Johnston and Mr. Turton, respectively; however, Midatech does not receive any consulting services from Messrs. Johnston or Turton or their respective consulting firms.
|
Name
|
Number of
Options
|
Grant
Date
|
Exercise
Price
per Share
(£)
|
Expiration
Date
|
||||
Michele Luzi (1)
|
18,796 (2)
|
4/20/2012
|
4.19
|
4/20/2022
|
||||
Sijmen de Vries
|
3,000 (2)
|
12/31/2008
|
1.425
|
12/31/2018
|
||||
|
4,000 (2)
|
4/20/2012
|
4.19
|
4/20/2022
|
||||
|
10,000 (3)
|
6/30/2014
|
0.075
|
6/30/2024
|
(1) |
Stock options held by Mr. Luzi were granted as part of a prior investment in Midatech Limited in 2011 and not for service as a non-executive director.
|
(2) |
The stock options are fully vested.
|
(3) |
The stock options vest in the following installments: (i) 50% of the stock options vest when Midatech
’
s share price is
£
5.31 share, (ii) a further 25% of the stock options vest when Midatech
’
s share price is
£
13.72 a share and (iii) the remaining 25% of the stock options vest when Midatech
’
s share price is
£
18.86 a share.
|
· |
by either party giving at least three months prior written notice;
|
· |
by the Midatech Board of Directors reasonably determining that Mr. Stahel
’
s acceptance of any other employment, engagement, appointment, interest or involvement with any business or person competes or conflicts with his appointment and would result in a serious conflict of interest or Mr. Stahel reasonably determines such interest would result in a serious conflict of interest, and Mr. Stahel accepts such employment, engagement, appointment, interest or involvement; or
|
· |
in accordance with Midatech
’
s articles of association or applicable law.
|
· |
is found guilty of any misconduct, gross negligence or dishonesty or acts in a manner which is materially adverse to the interests of Midatech;
|
· |
commits any serious or repeated breach or non-observance of his obligations to Midatech;
|
· |
becomes bankrupt, has an interim order made against him under the United Kingdom Insolvency Act 1986 or makes any composition or enters into any deed of arrangement with his creditors or the equivalent of any of these under any other jurisdictions;
|
· |
becomes of unsound mind, becomes a patient under any statute relating to mental health or is unable, due to any accident, illness or injury, to undertake his duties for Midatech for a period of more than six consecutive months;
|
· |
is convicted of a criminal offense (other than a motoring offense for which a non-custodial penalty is imposed);
|
· |
is disqualified by law or an order of a court of competent jurisdiction from holding office; or
|
· |
has failed to submit his resignation as Chairman and as a director of Midatech when required to so pursuant to the terms of the Stahel Appointment Agreement.
|
Name
|
Salary
(£)
|
Bonus
(1)(£)
|
All Other
Compensation
(2)(£)
|
Total
(£)
|
||||||||
Dr. James Phillips
|
299,157
|
-
|
10,000
|
309,157
|
||||||||
Chief Executive Officer
|
||||||||||||
Nicholas Robbins-Cherry
|
177,350
|
-
|
11,000
|
188,350
|
||||||||
Chief Financial Officer
|
||||||||||||
All executive officers as a group (4 persons)
|
887,066
|
-
|
41,056
|
928,122
|
(1) |
The Service Agreements also include a bonus target for Dr. Phillips and Mr. Robbins-Cherry of 50% and 33%, respectively, of their annual base salary, which bonus is payable upon attainment of objectives as determined in the subjective judgment of Midatech
’
s Board of Directors or a committee thereof, taking into account various factors without any preassigned weighting. For 2017, the executive officers did not receive a bonus.
|
(2)
|
The amounts reflect the value of benefits payable pursuant to pension plans.
|
Name
|
Number of
Options
|
Grant Date
|
Exercise
Price
per
Share
(£) |
Expiration
Date
|
|||||||
James Phillips
|
400,000
|
(1)
|
6/30/2014
|
0.075
|
6/30/2024
|
||||||
|
200,000
|
(2)
|
5/9/2014
|
0.075
|
5/1/2023
|
||||||
|
250,000
|
(3)
|
10/31/2016
|
2.68
|
12/2/2025
|
||||||
|
490,000
|
(3)
|
12/19/2016
|
1.21
|
12/7/2026
|
||||||
400,000
|
(4)
|
12/15/2017
|
0.46
|
15/12/2027
|
|||||||
Nick Robbins-Cherry
|
60,000
|
(1)
|
6/30/2014
|
0.075
|
6/30/2024
|
||||||
|
125,000
|
(3)
|
10/31/2016
|
2.68
|
12/2/2025
|
||||||
|
168,000
|
(3)
|
12/19/2016
|
1.21
|
12/7/2026
|
||||||
202,000
|
(4)
|
12/15/2017
|
0.46
|
15/12/2027
|
|||||||
All executive officers as a group (4 persons)
|
3,386,000
|
(1)
(5)
|
(6)
|
(7
|
)
|
(8)
|
(1) |
Stock options held by Messrs. Phillips, Robbins-Cherry and Cook vest in the following installments: (i) 50% of the stock options vest when Midatech
’
s share price is
£
5.31 share, (ii) a further 25% of the stock options vest when Midatech
’
s share price is
£
13.72 a share and (iii) the remaining 25% of the stock options vest when Midatech
’
s share price is
£
18.86 a share. In connection with the acquisition of DARA, stock options issued to Mr. Benharris exercisable for shares of DARA common stock were assumed by Midatech and became exercisable for Ordinary Shares (subject to certain adjustments based upon the exchange ratio for DARA common stock in the merger). All Ordinary Shares issuable upon exercise of such options are to be delivered in the form of Depositary Shares.
|
(2) |
The stock options are fully vested.
|
(3) |
25% of the options vest 12 months after the grant date, followed by vesting of 12 equal quarterly tranches, over a subsequent three-year period.
|
(4) |
25% of the options are eligible to vest 12 months after the grant date, followed by 12 equal quarterly tranches, over a subsequent three-year period. All vesting subject to the Company’s Ordinary Share price returning to a closing price of £1.00 at any time during the life of the option.
|
(5) |
1,055,250 stock options are fully vested.
|
(6) |
The grant dates range from May 9, 2014 to December 15, 2017.
|
(7) |
The exercise price of the options range from
£
0.075 to
£
2.68.
|
(8) |
The stock options expire between May 1, 2023 and December 15, 2027.
|
· |
is guilty of serious misconduct or any other misconduct which affects, or is likely to affect, prejudicially the interests of Midatech or any of its subsidiaries;
|
· |
fails or neglects to efficiently and diligently discharge his duties or commits any serious or repeated breach or non-observance of any of the provisions of the Service Agreement or any share dealing code adopted by Midatech or any of its subsidiaries;
|
· |
has an interim receiving order made against him, becomes bankrupt or makes any composition or enters into any deed of arrangement with his creditors;
|
· |
is charged with an arrestable criminal offense (other than a road traffic offense in the United Kingdom or elsewhere for which a fine or non-custodial penalty is imposed);
|
· |
is disqualified from holding office in any company by reason of an order of a court of competent jurisdiction;
|
· |
becomes of unsound mind or becomes a patient under any statute relating to mental health;
|
· |
is convicted of an offense under the United Kingdom
’
s Criminal Justice Act 1993 in relation to insider dealings or under any other present or future statutory enactment or regulations relating to insider dealings;
|
· |
is in breach of the Model Code on directors
’
dealings in listed securities, including securities trading on AIM, published by the London Stock Exchange; or
|
· |
commits any other act warranting summary termination at common law including, but not limited to, any act justifying dismissal without notice in the terms of Midatech
’
s generally applicable disciplinary rules.
|
C. |
Board
Practices
|
D. |
Employees
|
|
As of December 31,
|
|||||||||||
|
2017
|
2016
|
2015
|
|||||||||
Business functional
area: |
||||||||||||
Research and
development |
62
|
57
|
52
|
|||||||||
Sales and marketing
|
6
|
8
|
7
|
|||||||||
General and
administration |
17
|
19
|
23
|
|||||||||
|
||||||||||||
Total
|
85
|
84
|
82
|
|
As of December 31,
|
|||||||||||
|
2017
|
2016
|
2015
|
|||||||||
Geography:
|
||||||||||||
United Kingdom
|
39
|
37
|
40
|
|||||||||
North America
|
12
|
14
|
14
|
|||||||||
Spain
|
34
|
28
|
28
|
|||||||||
|
||||||||||||
Total
|
85
|
79
|
82
|
E. |
Share Ownership
|
A. |
Major Shareholders
|
· |
each person that is known by Midatech to be a beneficial owner of 5% or more of Midatech ordinary shares (based on information in our share register and information provided by such persons);
|
· |
each member of Midatech
’
s Board of Directors;
|
· |
each of Midatech
’
s executive officers; and
|
· |
all members of Midatech
’
s Board of Directors and its executive officers, taken as a group.
|
Name of Beneficial Owner
|
Amount and
Nature
Of Ownership(1)
|
Percent
of class
|
|||||
Major Stockholders:
|
|||||||
Woodford Fund Management Limited (2)
|
12,247,629
|
20.1
|
%
|
||||
Legal & General Investment Management (3)
|
10,275,518
|
16.8
|
%
|
||||
City Financial (4)
|
3,650,000
|
6.0
|
%
|
||||
|
|||||||
Directors and Executive Officers:
|
|||||||
David Benharris
|
20,000
|
*
|
|||||
Craig Cook, MB, BCH
|
156,000
|
*
|
|||||
Sijmen (Simon) de Vries, M.D. (5)
|
104,952
|
*
|
|||||
John Johnston
|
54,981
|
*
|
|||||
Michele Luzi (6)
|
219,468
|
*
|
|||||
James N. Phillips, MB, ChB
|
553,646
|
*
|
|||||
Pavlo (Paul) Protopapa (7)
|
1,649,334
|
2.7
|
%
|
||||
Nicholas Robbins-Cherry
|
123,313
|
*
|
|||||
Rolf Stahel
|
599,942
|
*
|
|||||
Simon Turton, Ph.D.
|
269,413
|
*
|
|||||
Directors and executive officers as a group (10
persons) |
3,751,049
|
6.1
|
%
|
* |
Less than one percent of the outstanding Ordinary Shares.
|
(1) |
Includes the following Ordinary Shares subject to outstanding stock options exercisable within 60 days of March 15, 2018: 7,000 for Dr. de Vries; 18,796 for Mr. Luzi; 493,750 for Dr. Phillips; 20,000 for Mr. Benharris; 150,000 for Dr. Cook; 122,813 for Mr. Robbins-Cherry; and 812,359 for all current directors and executive officers as a group.
|
(2) |
The principal business address of Woodford Fund Management Limited is 9400 Garsington Road, Oxford, OX4 2HN, United Kingdom.
|
(3) |
The principal business address of Legal & General Investment Management Limited is 1 Coleman St, London, United Kingdom EC2R 5AA.
|
(4) |
The principal business address of City Financial is 62 Queen Street, London EC4R 1EB.
|
(5) |
Includes 59,150 Ordinary Shares held by Promida Holdings, in which Dr. de Vries has a minority interest.
|
(6) |
Includes 69,382 Ordinary Shares held by JTC Trustees Limited, of which Mr. Luzi is a beneficiary.
|
(7) |
Includes 1,649,334 Ordinary Shares directly held by Ippon Capital SA. Mr. Protopapa, a director of Ippon Capital SA, disclaims beneficial ownership of all shares held directly by Ippon Capital SA except to the extent of his pecuniary interest therein, if any.
|
B. |
Related Party Transactions
|
C. |
Interests of Experts and Counsel
|
A. |
Consolidated Statements and Other Financial Information
|
B. |
Significant Changes
|
A. |
Offer and Listing Details.
|
|
British Pounds Sterling
(Price per ordinary share) |
United States Dollars (Price
per ordinary share) |
||||||||||||||
|
High
|
Low
|
High
|
Low
|
||||||||||||
Annual:
|
||||||||||||||||
Year ended December 31, 2014 (1)
|
£
|
2.85
|
|
£
|
2.60
|
$
|
3.85
|
|
$
|
3.52
|
||||||
Year ended December 31, 2015
|
£
|
3.30
|
|
£
|
1.50
|
$
|
4.46
|
|
$
|
2.03
|
||||||
Year ended December 31, 2016
|
£
|
2.05
|
|
£
|
1.01
|
$
|
2.77
|
|
$
|
1.37
|
||||||
Year ended December 31, 2017
|
£
|
1.48
|
|
£
|
0.34
|
$
|
2.00
|
|
$
|
0.45
|
||||||
Quarterly:
|
|
|
||||||||||||||
First Quarter 2016
|
£
|
2.05
|
|
£
|
1.33
|
$
|
2.77
|
|
$
|
1.80
|
||||||
Second Quarter 2016
|
£
|
1.85
|
|
£
|
1.01
|
$
|
2.27
|
|
$
|
1.24
|
||||||
Third Quarter 2016
|
£
|
1.90
|
|
£
|
1.10
|
$
|
2.57
|
|
$
|
1.35
|
||||||
Fourth Quarter 2016
|
£
|
1.33
|
|
£
|
1.10
|
$
|
1.63
|
|
$
|
1.35
|
||||||
First Quarter 2017
|
£
|
1.48
|
|
£
|
1.16
|
$
|
2.00
|
|
$
|
1.57
|
||||||
Second Quarter 2017
|
£
|
1.24
|
|
£
|
1.00
|
$
|
1.68
|
|
$
|
1.35
|
||||||
Third Quarter 2017
|
£
|
1.06
|
|
£
|
0.50
|
$
|
1.43
|
|
$
|
0.68
|
||||||
Fourth Quarter 2017
|
£
|
0.52
|
|
£
|
0.34
|
$
|
0.70
|
|
$
|
0.46
|
||||||
First Quarter 2018
|
£
|
0.54
|
|
£
|
0.26
|
$
|
0.73
|
|
$
|
0.35
|
||||||
Monthly:
|
||||||||||||||||
October 2017
|
£
|
0.52
|
|
£
|
0.48
|
$
|
0.70
|
|
$
|
0.65
|
||||||
November 2017
|
£
|
0.50
|
|
£
|
0.43
|
$
|
0.68
|
|
$
|
0.58
|
||||||
December 2017
|
£
|
0.43
|
|
£
|
0.34
|
$
|
0.58
|
|
$
|
0.46
|
||||||
January 2018
|
£
|
0.54
|
|
£
|
0.37
|
$
|
0.73
|
|
$
|
0.50
|
||||||
February 2018
|
£
|
0.41
|
|
£
|
0.30
|
$
|
0.55
|
|
$
|
0.41
|
||||||
March 2018
|
£
|
0.34
|
|
£
|
0.26
|
$
|
0.46
|
|
$
|
0.35
|
||||||
April 2018 (through April 20, 2018)
|
£
|
0.28
|
£
|
0.25
|
$
|
0.38
|
$
|
0.38
|
(1) |
The Ordinary Shares began trading on AIM on December 8, 2014. Prior to that, no established market for Ordinary Shares existed.
|
|
United States Dollars (Price
per Depositary Share) |
|||||||
|
High
|
Low
|
||||||
Annual:
|
||||||||
Year Ended December 31, 2015 (1)
|
$
|
8.09
|
$
|
4.09
|
||||
Year Ended December 31, 2016
|
$
|
5.72
|
$
|
2.40
|
||||
Year Ended December 31, 2017
|
$
|
3.65
|
$
|
0.79
|
||||
Quarterly:
|
||||||||
First Quarter 2016
|
$
|
5.72
|
$
|
3.33
|
||||
Second Quarter 2016
|
$
|
5.44
|
$
|
2.62
|
||||
Third Quarter 2016
|
$
|
4.42
|
$
|
2.69
|
||||
Fourth Quarter 2016
|
$
|
3.25
|
$
|
2.40
|
||||
First Quarter 2017
|
$
|
3.65
|
$
|
2.42
|
||||
Second Quarter 2017
|
$
|
3.27
|
$
|
2.48
|
||||
Third Quarter 2017
|
$
|
2.80
|
$
|
1.29
|
||||
Fourth Quarter 2017
|
$
|
1.64
|
$
|
0.79
|
||||
First Quarter 2018
|
$
|
2.65
|
$
|
0.80
|
||||
Monthly:
|
||||||||
October 2017
|
$
|
1.64
|
$
|
1.33
|
||||
November 2017
|
$
|
1.59
|
$
|
1.00
|
||||
December 2017
|
$
|
1.22
|
$
|
0.79
|
||||
January 2018
|
$
|
2.65
|
$
|
0.86
|
||||
February 2018
|
$
|
1.12
|
$
|
0.87
|
||||
March 2018
|
$
|
1.25
|
$
|
0.73
|
||||
April 2018 (through April 20, 2018)
|
$ |
0.84
|
$ |
0.74
|
(1) |
The Depositary Shares began trading on The NASDAQ Capital Market on December 7, 2015. Prior to that, no established market for the Depositary Shares existed.
|
B. |
Plan of Distribution
|
C. |
Markets
|
D. |
Seller Shareholders
|
E. |
Dilution
|
F. |
Expenses of the Issue
|
A. |
Share Capital
|
B. |
Memorandum and Articles of Association
|
C. |
Material Contracts
|
D. |
Exchange Controls
|
E. |
Taxation
|
· |
an individual who is a citizen or resident of the United States;
|
· |
a corporation or other entity taxable as a corporation that is created or organized in the United States or under the laws of the United States or any state thereof or the District of Columbia;
|
· |
an estate the income of which is subject to United States federal income taxation regardless of its source; or
|
· |
any trust if (a) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust, or (b) such trust has a valid election in effect under applicable United States Treasury regulations to be treated as a United States person.
|
F. |
Dividends and Payment Agents
|
G. |
Statements by Experts
|
H. |
Documents on Display
|
I. |
Subsidiary Information
|
A. |
Debt Securities
|
B. |
Warrants and Rights
|
C. |
Other Securities
|
D. |
American Depositary Shares
|
Service
|
|
Fees
|
|
|
|
·
to any person to whom Depositary Shares are issued or to any person to whom a
distribution is made in respect of Depositary Share distributions pursuant to stock dividends or other free distributions of stock, bonus distributions, stock splits or other distributions (except where converted to cash) |
|
Up to US$0.05 per Depositary Share issued
|
|
|
|
·
to any person surrendering Depositary Shares for withdrawal of deposited securities or
whose Depositary Shares are cancelled or reduced for any other reason including, inter alia, cash distributions made pursuant to a cancellation or withdrawal |
|
Up to US$0.05 per Depositary Share cancelled
|
|
|
|
·
Distribution of cash dividends
|
|
Up to US$0.05 per Depositary Share held
|
|
|
|
·
Distribution of cash entitlements (other than cash dividends) and/or cash proceeds,
including proceeds from the sale of rights, securities and other entitlements |
|
Up to US$0.05 per Depositary Share held
|
|
|
|
·
Distribution of Depositary Shares pursuant to exercise of rights.
|
|
Up to US$0.05 per Depositary Share held
|
|
|
|
·
Depositary services
|
|
Up to US$0.05 annually per Depositary Share held on the applicable record date(s) established by the depositary bank
|
· |
taxes (including applicable interest and penalties) and other governmental charges;
|
· |
such registration fees as may from time to time be in effect for the registration of Ordinary Shares or other deposited securities with Midatech
’
s share registrar and applicable to transfers of Ordinary Shares or other deposited securities to or from the name of the custodian, the Depositary or any nominees upon the making of deposits and withdrawals, respectively;
|
· |
such cable, telex, facsimile and electronic transmission and delivery expenses as are expressly provided in the deposit agreement to be at the expense of the person depositing or withdrawing Ordinary Shares or Depositary Share holders and beneficial owners of Depositary Shares;
|
· |
the expenses, fees and other charges incurred by the Depositary in the conversion of foreign currency, including, without limitation, the expenses, fees and other charges imposed by any affiliate of the Depositary (which may, in its sole discretion, act in a principal capacity in such transaction) that may be utilized in connection therewith;
|
· |
such fees and expenses as are incurred by the Depositary in connection with compliance with exchange control regulations and other regulatory requirements applicable to Ordinary Shares, deposited securities, Depositary Shares and American Depositary Receipts;
|
· |
the fees and expenses incurred by the Depositary in connection with the delivery of deposited securities, including any fees of a central depository for securities in the local market, where applicable; and
|
· |
any fees, charges, costs or expenses that may be incurred from time to time by the Depositary and/or any of the Depositary
’
s agents, including the custodian, and/or agents of the Depositary
’
s agents in connection with the servicing of Ordinary Shares, deposited securities and/or Depositary Shares, the sale of securities (including, without limitation, deposited securities), the delivery of deposited securities or otherwise in connection with the Depositary
’
s or its custodian
’
s compliance with applicable law, rule or regulation (such fees, charges, costs or expenses to be assessed against Depositary Share holders of record as at the date or dates set by the Depositary as it sees fit and collected at the sole discretion of the Depositary by billing such Depositary Share holders for such fee or by deducting such fee from one or more cash dividends or other cash distributions).
|
A. |
Disclosure Controls and Procedures
|
B. |
Management’s Annual Report on Internal Control Over Financial Reporting
|
· |
The incorrect presentation of credits for product returns, rebates, discounts and other incentives based on sales price throughout 2016 as part of cost of sales as opposed to being shown as deductions from revenue.
|
· |
Implementing additional controls and procedures to facilitate senior management and audit committee review in order to remediate the underlying causes of the material error in Midatech
’
s financials; and
|
· |
Seeking outside assistance, as necessary, from third party experts when or if Midatech enters into or effects future, non-routine transactions which involve complex accounting and related disclosure matters.
|
C. |
Attestation Report of the Registered Public Accounting Firm
|
D. |
Changes in Internal Control Over Financing Reporting
|
|
2017
|
2016
|
||||||
|
(£’s in thousands)
|
|||||||
Audit Fees(1)
|
350
|
311
|
||||||
Audit-Related Fees(2)
|
-
|
-
|
||||||
Tax Fees(3)
|
-
|
-
|
||||||
All Other Fees(4)
|
-
|
-
|
||||||
Total
|
350
|
311
|
(1) |
Audit fees consist of the aggregate fees billed in connection with the audit and United Kingdom statutory audit of Midatech
’
s annual consolidated financial statements included in this annual report, the issuance of consent letters, and interim reviews of Midatech
’
s half-yearly financial information.
|
(2) |
Audit-related fees are fees for services that are traditionally performed by the independent accountants, including consultations concerning financial accounting and reporting, and employee benefit plan audits, and due diligence on mergers or acquisitions.
|
(3) |
Represents the aggregate fees billed for tax compliance, tax advice and tax consulting services.
|
(4) |
Represents the aggregate fees billed for all products and services provided that are not included under
“
audit fees
”
,
“
audit related fees or
“
tax fees,
”
including, but not limited to, fees billed for services relating to mergers and acquisitions.
|
· |
Midatech does not follow NASDAQ
’
s requirements applicable to independent director oversight of director nominations, which require that director nominees either be selected or recommended by independent directors. In accordance with United Kingdom law and practice, the Company
’
s directors are nominated by the Nominations Committee, which is comprised of all of the directors of the company.
|
· |
Midatech does not follow NASDAQ
’
s requirement that the compensation committee be comprised of Independent Directors, as defined under Rule 5605(a)(2). One of the members of Midatech
’
s compensation committee, Mr. Stahel, is not considered independent under the applicable NASDAQ rule. He is, however, considered to be independent under United Kingdom law and practice.
|
· |
Midatech does not require that the compensation committee consider the specific factors affecting consultant independence that are set forth in NASDAQ Rule 5605(d)(3)(D). Midatech
’
s compensation committee may engage independent compensation consultants at its discretion.
|
· |
Midatech does not follow NASDAQ
’
s requirements that non-executive directors meet on a regular basis without management present. Midatech
’
s Board of Directors may choose to meet in executive session at their discretion.
|
· |
Midatech does not follow NASDAQ
’
s quorum requirements for stockholder meetings. In accordance with United Kingdom law and practice, Midatech
’
s Articles of Association provide alternative quorum requirements that are generally applicable to meetings of shareholders.
|
· |
Midatech does not follow NASDAQ
’
s requirements to seek shareholder approval for the implementation of certain equity compensation plans and issuances of ordinary shares. In accordance with the AIM Rules, Midatech is not required to seek shareholder approval in such circumstances.
|
Exhibit
Number
|
Title
|
|
|
1.1
|
|
2.1
|
|
2.2
|
|
2.3
|
|
2.4
|
|
2.5
|
|
2.6
|
|
2.7
|
|
2.8
|
|
2.9
|
|
2.10
|
|
2.11
|
|
2.12
|
|
2.13
|
|
4.1
|
|
4.2
|
|
4.3#
|
|
4.4#
|
|
4.5#
|
|
4.6
|
|
4.7
|
4.8
|
|
4.9
|
|
4.10
†
|
|
4.11
†
|
|
4.12
†
|
|
4.13
†
|
|
4.14
†
|
|
4.15
†
|
|
4.16#
|
|
4.17#
|
|
4.18#
|
|
4.19#
|
|
4.20#
|
|
4.21#
|
|
4.22#
|
|
4.23#
|
|
4.24#
|
4.25†
|
|
4.26*
|
Credit, Guaranty and Security Agreement, dated as of December 29, 2017 by and among MidCap Financial Trust, as administrative agent, the Lenders listed therein, the Company, DARA Therapeutics, Inc., Midatech Pharma US Inc., Midatech Pharma (Wales) Limited and Midatech Limited.
|
4.27#*
|
The Midatech Pharma Share Incentive Plan.
|
4.28# ††*
|
Settlement Agreement, dated as of March 14, 2018, by and between the Company and Dr. James Phillips.
|
8.1*
|
Subsidiaries of Midatech Pharma PLC.
|
12.1*
|
Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.
|
12.2*
|
Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.
|
13.1*
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.
|
15.1*
|
Consent of BDO LLP, independent registered public accounting firm.
|
101.INS*
|
XBRL Instance Document
|
101.SCH*
|
XBRL Taxonomy Extension Scheme Document
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
MIDATECH PHARMA PLC
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
By:
|
/s/ James N. Phillips
|
|
|
Name:
|
James N. Phillips
|
|
|
Title:
|
Chief Executive Officer
|
|
Page
|
|
F-2
|
|
F-3 | |
F-4 | |
F-5 | |
F-6 | |
F-9 |
Consolidated statements of comprehensive income
|
for the years ended 31 December 2017, 2016 and 2015
|
Note
|
2017
|
2016
|
2015
|
|||||||||||||
£’000
|
£’000
|
£'000
|
||||||||||||||
Revenue
|
3
|
6,758
|
6,376
|
775
|
||||||||||||
Grant revenue
|
840
|
547
|
600
|
|||||||||||||
Total revenue
|
7,598
|
6,923
|
1,375
|
|||||||||||||
Cost of sales
|
(926
|
)
|
(667
|
)
|
(70
|
)
|
||||||||||
Gross profit
|
6,672
|
6,256
|
1,305
|
|||||||||||||
Research and development costs
(reclassified)
|
(10,185
|
)
|
(7,796
|
)
|
(8,710
|
)
|
||||||||||
Distribution costs, sales and marketing
(reclassified)
|
(9,417
|
)
|
(12,510
|
)
|
(605
|
)
|
||||||||||
Administrative costs
(reclassified)
|
(3,148
|
)
|
(5,123
|
)
|
(4,908
|
)
|
||||||||||
Impairment of intangible assets
|
13
|
(1,500
|
)
|
(11,413
|
)
|
-
|
||||||||||
Loss from operations
|
4
|
(17,578
|
)
|
(30,586
|
)
|
(12,918
|
)
|
|||||||||
Finance income
|
6
|
415
|
1,337
|
1,691
|
||||||||||||
Finance expense
|
6
|
(166
|
)
|
(73
|
)
|
(5
|
)
|
|||||||||
Loss before tax
|
(17,329
|
)
|
(29,322
|
)
|
(11,232
|
)
|
||||||||||
Taxation
|
7
|
1,265
|
9,160
|
1,133
|
||||||||||||
Loss for the year attributable to the owners of the
parent |
(16,064
|
)
|
(20,162
|
)
|
(10,099
|
)
|
||||||||||
Other comprehensive income:
|
||||||||||||||||
Items that will or may be reclassified subsequently to
profit or loss when specific conditions are met: |
||||||||||||||||
Exchange gains/(losses) arising on translation of
foreign operations |
(1,233
|
)
|
3,228
|
399
|
||||||||||||
Total other comprehensive (loss) income, net of tax
|
(1,233
|
)
|
3,228
|
399
|
||||||||||||
Total comprehensive loss attributable to the
owners of the parent |
(17,297
|
)
|
(16,934
|
)
|
(9,700
|
)
|
||||||||||
Loss per share
|
||||||||||||||||
Basic and diluted loss per ordinary share - pence
|
8
|
(31p
|
)
|
(56p
|
)
|
(36p
|
)
|
Consolidated statements of financial position
|
at 31 December 2017, 2016 and 2015
|
Note
|
2017
|
2016
|
2015
|
|||||||||||||
Assets
|
£’000
|
£’000
|
£’000
|
|||||||||||||
Non-current assets
|
||||||||||||||||
Property, plant and equipment
|
9
|
2,529
|
2,766
|
1,984
|
||||||||||||
Intangible assets
|
10
|
27,647
|
31,172
|
41,339
|
||||||||||||
Other receivables due in greater than one year
|
16
|
465
|
448
|
387
|
||||||||||||
30,641
|
34,386
|
43,710
|
||||||||||||||
Current assets
|
||||||||||||||||
Inventories
|
18
|
941
|
817
|
459
|
||||||||||||
Trade and other receivables
|
16
|
3,242
|
2,439
|
2,496
|
||||||||||||
Taxation
|
1,196
|
1,439
|
1,201
|
|||||||||||||
Cash and cash equivalents
|
17
|
13,204
|
17,608
|
16,175
|
||||||||||||
18,583
|
22,303
|
20,331
|
||||||||||||||
Total assets
|
49,224
|
56,689
|
64,041
|
|||||||||||||
Liabilities
|
||||||||||||||||
Non-current liabilities
|
||||||||||||||||
Borrowings
|
20
|
6,185
|
1,620
|
1,508
|
||||||||||||
Deferred tax liability
|
23
|
-
|
-
|
6,547
|
||||||||||||
6,185
|
1,620
|
8,055
|
||||||||||||||
Current liabilities
|
||||||||||||||||
Trade and other payables
|
19
|
8,002
|
8,407
|
7,084
|
||||||||||||
Borrowings
|
20
|
361
|
538
|
442
|
||||||||||||
Derivative financial liability – equity settled
|
21
|
-
|
400
|
1,573
|
||||||||||||
8,363
|
9,345
|
9,099
|
||||||||||||||
Total liabilities
|
14,548
|
10,965
|
17,154
|
|||||||||||||
Issued capital and reserves attributable to owners
of the parent |
||||||||||||||||
Share capital
|
24
|
1,003
|
1,002
|
1,002
|
||||||||||||
Share premium
|
25
|
52,939
|
47,211
|
31,643
|
||||||||||||
Merger reserve
|
25
|
53,003
|
53,003
|
52,803
|
||||||||||||
Shares to be issued
|
25
|
-
|
-
|
200
|
||||||||||||
Foreign exchange reserve
|
25
|
2,385
|
3,618
|
390
|
||||||||||||
Accumulated deficit
|
25
|
(74,654
|
)
|
(59,110
|
)
|
(39,151
|
)
|
|||||||||
Total equity
|
34,676
|
45,724
|
46,887
|
|||||||||||||
Total equity and liabilities
|
49,224
|
56,689
|
64,041
|
Consolidated statements of cash flows
|
for the years ended 31 December 2017, 2016 and 2015
|
Note
|
2017
|
2016
|
2015
|
|||||||||||||
£’000
|
£’000
|
£'000
|
||||||||||||||
Cash flows from operating activities
|
||||||||||||||||
Loss for the year
|
(16,064
|
)
|
(20,162
|
)
|
(10,099
|
)
|
||||||||||
Adjustments for:
|
||||||||||||||||
Depreciation of property, plant and equipment
|
9
|
983
|
772
|
501
|
||||||||||||
Amortisation of intangible fixed assets
|
10
|
1,577
|
3,583
|
236
|
||||||||||||
Loss on disposal of fixed assets
|
27
|
-
|
-
|
|||||||||||||
Net interest (income)/expense
|
6
|
(249
|
)
|
(1,264
|
)
|
(1,686
|
)
|
|||||||||
Impairment of
intangible assets
|
13
|
1,500
|
11,413
|
-
|
||||||||||||
Gain on bargain purchase
|
12
|
-
|
-
|
(165
|
)
|
|||||||||||
Share based payment expense
|
5
|
520
|
203
|
170
|
||||||||||||
Taxation
|
7
|
(1,265
|
)
|
(9,160
|
)
|
(1,133
|
)
|
|||||||||
Cash flows from operating activities before
changes in working capital |
(12,971
|
)
|
(14,615
|
)
|
(12,176
|
)
|
||||||||||
Increase in inventories
|
(202
|
)
|
(237
|
)
|
(62
|
)
|
||||||||||
Increase in trade and other receivables
|
(968
|
)
|
(242
|
)
|
(1,540
|
)
|
||||||||||
(Decrease)/Increase in trade and other payables
|
(267
|
)
|
358
|
711
|
||||||||||||
Cash used in operations
|
(14,408
|
)
|
(14,736
|
)
|
(13,067
|
)
|
||||||||||
Taxes received
|
1,455
|
1,650
|
646
|
|||||||||||||
Net cash used in operating activities
|
(12,953
|
)
|
(13,086
|
)
|
(12,421
|
)
|
||||||||||
Investing activities
|
||||||||||||||||
Purchases of property, plant and equipment
|
9
|
(707
|
)
|
(1,347
|
)
|
(922
|
)
|
|||||||||
Purchase of intangibles
|
10
|
(778
|
)
|
(19
|
)
|
(3
|
)
|
|||||||||
Acquisition of subsidiary, net of cash acquired
|
11
|
-
|
-
|
1,867
|
||||||||||||
Acquisition of business, net of cash acquired
|
12
|
-
|
-
|
(2,528
|
)
|
|||||||||||
Interest received
|
15
|
164
|
53
|
|||||||||||||
Net cash used in investing activities
|
(1,470
|
)
|
(1,202
|
)
|
(1,533
|
)
|
||||||||||
Financing activities
|
||||||||||||||||
Interest paid
|
(111
|
)
|
(74
|
)
|
(5
|
)
|
||||||||||
Payments to finance lease creditors
|
(25
|
)
|
(69
|
)
|
(49
|
)
|
||||||||||
Repayment of borrowings
|
(552
|
)
|
(235
|
)
|
(165
|
)
|
||||||||||
New bank loan
|
5,237
|
65
|
-
|
|||||||||||||
Share issues net of costs
|
17
|
5,728
|
15,568
|
-
|
||||||||||||
Net cash generated from/(used in) financing
activities |
10,277
|
15,255
|
(219
|
)
|
||||||||||||
Net (decrease)/increase in cash and cash
equivalents |
(4,146
|
)
|
967
|
(14,173
|
)
|
|||||||||||
Cash and cash equivalents at beginning of year
|
17,608
|
16,175
|
30,325
|
|||||||||||||
Exchange (losses)/gains on cash and cash
equivalents |
(258
|
)
|
466
|
23
|
||||||||||||
Cash and cash equivalents at end of year
|
17
|
13,204
|
17,608
|
16,175
|
Consolidated statements of changes in equity
|
for the years ended 31 December 2017, 2016 and 2015
|
Share
capital
|
Share
premium
|
Merger
reserve |
Foreign
exchange
reserve
|
Accumulated
deficit
|
Total
Equity
|
|||||||||||||||||||
£'000
|
£'000
|
£’000
|
£'000
|
£'000
|
£'000
|
|||||||||||||||||||
At 1 January 2017
|
1,002
|
47,211
|
53,003
|
3,618
|
(59,110
|
)
|
45,724
|
|||||||||||||||||
Loss for the year
|
-
|
-
|
-
|
-
|
(16,064
|
)
|
(16,064
|
)
|
||||||||||||||||
Foreign exchange translation
|
-
|
-
|
-
|
(1,233
|
)
|
-
|
(1,233
|
)
|
||||||||||||||||
Total comprehensive loss
|
-
|
-
|
-
|
(1,233
|
)
|
(16,064
|
)
|
(17,297
|
)
|
|||||||||||||||
Shares issued on 16 October 2017 – note 17
|
1
|
6,157
|
-
|
-
|
-
|
6,158
|
||||||||||||||||||
Costs associated with share issue – note 17
|
-
|
(429
|
)
|
-
|
-
|
-
|
(429
|
)
|
||||||||||||||||
Share option charge
|
-
|
- |
-
|
-
|
520
|
520
|
||||||||||||||||||
Total contribution by and distributions to owners
|
1
|
5,728
|
-
|
-
|
520
|
6,249
|
||||||||||||||||||
At 31 December 2017
|
1,003
|
52,939
|
53,003
|
2,385
|
(74,654
|
)
|
34,676
|
Midatech Pharma PLC
|
Consolidated statements of changes in equity
|
for the years ended 31 December 2017, 2016 and 2015
|
Share
capital
|
Share
premium
|
Merger
reserve |
Shares to be
issued |
Foreign
exchange
reserve
|
Accumulated
deficit
|
Total
equity
|
||||||||||||||||||||||
£'000
|
£'000
|
£’000
|
£’000
|
£'000
|
£'000
|
£'000
|
||||||||||||||||||||||
At 1 January 2016
|
1,002
|
31,643
|
52,803
|
200
|
390
|
(39,151
|
)
|
46,887
|
||||||||||||||||||||
Loss for the year
|
-
|
-
|
-
|
-
|
-
|
(20,162
|
)
|
(20,162
|
)
|
|||||||||||||||||||
Foreign exchange translation
|
-
|
-
|
-
|
-
|
3,228
|
-
|
3,228
|
|||||||||||||||||||||
Total comprehensive loss
|
-
|
-
|
-
|
-
|
3,228
|
(20,162
|
)
|
(16,934
|
)
|
|||||||||||||||||||
Transactions with owners
|
||||||||||||||||||||||||||||
Shares issued on 31 October
2016 – note 17 |
-
|
16,673
|
-
|
-
|
-
|
-
|
16,673
|
|||||||||||||||||||||
Costs associated with share
issue – note 17 |
-
|
(1,105
|
)
|
-
|
-
|
-
|
-
|
(1,105
|
)
|
|||||||||||||||||||
Share option charge
|
-
|
-
|
-
|
-
|
-
|
203
|
203
|
|||||||||||||||||||||
Shares issued as deferred
consideration for business combination |
-
|
- |
200
|
(200
|
)
|
-
|
-
|
-
|
||||||||||||||||||||
Total contribution by and
distributions to owners |
-
|
15,568
|
200
|
(200
|
)
|
-
|
203
|
15,771
|
||||||||||||||||||||
At 31 December 2016
|
1,002
|
47,211
|
53,003
|
-
|
3,618
|
(59,110
|
)
|
45,724
|
Midatech Pharma PLC
|
Consolidated statements of changes in equity
|
for the years ended 31 December 2017, 2016 and 2015
|
Share
capital
|
Share
premium
|
Merger
reserve
|
Shares to be
issued |
Foreign
exchange
reserve
|
Accumulated
deficit
|
Total
equity
|
||||||||||||||||||||||
£'000
|
£'000
|
£’000
|
£’000
|
£'000
|
£'000
|
£'000
|
||||||||||||||||||||||
At 1 January 2015
|
1,001
|
31,643
|
37,776
|
800
|
(9
|
)
|
(29,222
|
)
|
41,989
|
|||||||||||||||||||
Loss for the year
|
-
|
-
|
-
|
-
|
-
|
(10,099
|
)
|
(10,099
|
)
|
|||||||||||||||||||
Foreign exchange translation
|
-
|
-
|
-
|
-
|
399
|
-
|
399
|
|||||||||||||||||||||
Total comprehensive loss
|
-
|
-
|
-
|
-
|
399
|
(10,099
|
)
|
(9,700
|
)
|
|||||||||||||||||||
Transactions with owners
|
||||||||||||||||||||||||||||
Shares issued on exercise of
share options |
1
|
-
|
-
|
-
|
-
|
-
|
1
|
|||||||||||||||||||||
Shares, warrants and share
options issued as consideration for a business combination – 4 December 2015 |
-
|
-
|
14,427
|
-
|
-
|
-
|
14,427
|
|||||||||||||||||||||
Share option charge
|
-
|
-
|
-
|
-
|
-
|
170
|
170
|
|||||||||||||||||||||
Shares issued as deferred
consideration for business combination |
-
|
-
|
600
|
(600
|
)
|
-
|
-
|
-
|
||||||||||||||||||||
Total contribution by and
distributions to owners |
1
|
-
|
15,027
|
(600
|
)
|
-
|
170
|
14,598
|
||||||||||||||||||||
At 31 December 2015
|
1,002
|
31,643
|
52,803
|
200
|
390
|
(39,151
|
)
|
46,887
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
1 |
Accounting policies
|
·
|
Research and development costs;
|
·
|
Distribution costs, sales and marketing; and
|
·
|
Administrative costs.
|
2016
reclassified
|
2016
original
|
2015
reclassified
|
2015
original
|
|||||||||||||
£’000
|
£’000
|
£’000
|
£’000
|
|||||||||||||
Research and development costs
|
7,796
|
6,684
|
8,710
|
5,920
|
||||||||||||
Distribution costs, sales and marketing
|
12,510
|
9,523
|
605
|
374
|
||||||||||||
Administrative costs
|
5,123
|
9,222
|
4,908
|
7,929
|
||||||||||||
25,429
|
25,429
|
14,223
|
14,223
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
1 |
Accounting policies
(continued)
|
· |
The Group’s “Revenue” is largely derived from the sale of pharmaceutical products and services, where control transfers to customers and performance obligations are satisfied at the time of shipment to receipt of the products by the customer or when the services are performed. There is no expectation for IFRS 15 to significantly change the timing or amount of revenue recognised under these arrangements.
|
· |
Grant Revenue is outside the scope of IFRS 15.
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
1 |
Accounting policies
(continued)
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
1 |
Accounting policies
(continued)
|
Entity
|
Summary description
|
Midatech Pharma PLC
|
Ultimate holding company
|
Midatech Limited
|
Trading company
|
Midatech Pharma (Espana) SL (formerly Midatech Biogune SL)
|
Trading company
|
Midatech Andalucia SL
|
Dormant
|
PharMida AG
|
Dormant
|
Midatech Pharma (Wales) Limited (formerly Q Chip Limited)
|
Trading company
|
Midatech Pharma US, Inc. (formerly DARA Biosciences, Inc.)
|
Trading company
|
Dara Therapeutics, Inc.
|
Dormant
|
Midatech Pharma Pty
|
Trading company
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
1 |
Accounting policies
(continued)
|
- |
the fair value of the consideration transferred to the seller, plus
|
- |
the amount of any non-controlling interest in the acquiree, plus
|
- |
if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree re-measured at the acquisition date, less
|
- |
the fair value of the net identifiable assets acquired and assumed liabilities
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
1 |
Accounting policies
(continued)
|
Goodwill
|
-
|
Indefinite life
|
IPRD
|
-
|
In process, not yet amortising
|
IT and website costs
|
-
|
4 years
|
Product and marketing rights
|
-
|
Between 2 and 13 years
|
· |
Completion of the asset is technically feasible so that it will be available for use or sale
|
· |
The Group intends to complete the asset and use or sell it
|
· |
The Group has the ability to use or sell the asset and the asset will generate probable future economic benefits (over and above cost)
|
· |
There are adequate technical, financial and other resources to complete the development and to use or sell the asset, and
|
· |
The expenditure attributable to the asset during its development can be measured reliably.
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
1 |
Accounting policies
(continued)
|
· |
Joint ventures: where the Group has rights to only the net assets of the joint arrangement.
|
·
|
Joint operations: where the Group has both the rights to assets and obligations for the liabilities of the joint arrangement.
|
· |
The structure of the joint arrangement
|
· |
The legal form of joint arrangements structured through a separate vehicle
|
· |
The contractual terms of the joint arrangement agreement
|
· |
Any other facts and circumstances (including any other contractual arrangements).
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
1 |
Accounting policies
(continued)
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
1 |
Accounting policies
(continued)
|
·
|
Borrowings are initially recognised at fair value net of any transaction costs directly attributable to the issue of the instrument. Such interest-bearing liabilities are subsequently measured at amortised cost using the effective interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the consolidated statement of financial position. Interest expense in this context includes initial transaction costs and premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
|
· |
Government loans received on favourable terms below market rate are discounted at a market rate of interest. The difference between the present value of the loan and the proceeds is held as a government grant within deferred revenue and is released to research and development expenditure in line with when the asset or expenditure is recognised in the income statement.
|
·
|
Trade payables and other short-term monetary liabilities are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
1 |
Accounting policies
(continued)
|
· |
Ordinary shares of £0.00005 each are classified as equity instruments;
|
· |
Deferred shares of £1 each are classified as equity instruments.
|
· |
including any market performance conditions (including the share price);
|
· |
excluding the impact of any service and non-market performance vesting conditions (for example, remaining an employee of the entity over a specified time period); and
|
· |
including the impact of any non-vesting conditions (for example, the requirement for employees to save).
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
1 |
Accounting policies
(continued)
|
· |
the initial recognition of goodwill;
|
·
|
the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profit; and
|
·
|
investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.
|
Fixtures and fittings
Leasehold improvements
|
-
-
|
25% per annum straight line
10% per annum straight line
|
Computer equipment
|
-
|
25% per annum straight line
|
Laboratory equipment
|
-
|
15% - 25% per annum straight line
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
2 |
Critical accounting estimates and judgements
|
· |
future expected cash flows from in-process research and development;
|
· |
the fair value of the property, plant and equipment; and
|
· |
discount rates.
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
2 |
Critical accounting estimates and judgements
(continued)
|
· |
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.
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
3 |
Segment Information
|
2017
|
2016
|
2015
|
||||||||||
£’000
|
£’000
|
£’000
|
||||||||||
United Kingdom
|
79
|
491
|
-
|
|||||||||
Turkey
|
-
|
-
|
73
|
|||||||||
Rest of Europe
|
70
|
35
|
25
|
|||||||||
United States
|
6,609
|
5,850
|
677
|
|||||||||
6,758
|
6,376
|
775
|
2017
|
2016
|
2015
|
||||||||||
Customer A (Pipeline R&D)
|
-
|
-
|
11
|
%
|
||||||||
Customer B (Commercial)
|
20
|
%
|
20
|
%
|
-
|
|||||||
Customer C (Commercial)
|
17
|
%
|
15
|
%
|
-
|
|||||||
Customer D (Commercial)
|
13
|
%
|
10
|
%
|
-
|
· |
Pipeline Research and Development: The Pipeline Research and Development (“Pipeline R&D”) segment seeks to develop products using the Group’s nanomedicine and sustained release technology platforms.
|
· |
Commercial: The Commercial segment distributes and sells the Group’s commercial products. Midatech Pharma US, Inc. promotes the Group’s commercial, cancer supportive care products in the US market, in which the Group has exclusive licenses to Soltamox, Oravig and Zuplenz
®
, an exclusive license to distribute, promote and market Gelclair, and a marketing agreement to co-promote two other products: Ferralet 90 and Aquoral. As and when new products are introduced the Commercial segment will include revenues from the marketing of these commercial products.
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
3 |
Segment information
(continued)
|
Pipeline R&D
|
Commercial
|
Consolidated
|
||||||||||
£’000
|
£’000
|
£’000
|
||||||||||
Revenue
|
108
|
6,650
|
6,758
|
|||||||||
Grant revenue
|
840
|
-
|
840
|
|||||||||
Total revenue
|
948
|
6,650
|
7,598
|
|||||||||
Cost of sales
|
-
|
(926
|
)
|
(926
|
)
|
|||||||
Research and development costs
|
(9,830
|
)
|
(355
|
)
|
(10,185
|
)
|
||||||
Distribution costs, sales and
marketing |
(744
|
)
|
(7,096
|
)
|
(7,840
|
)
|
||||||
Administrative costs
|
(1,685
|
)
|
(480
|
)
|
(2,165
|
)
|
||||||
Depreciation
|
(974
|
)
|
(9
|
)
|
(983
|
)
|
||||||
Amortisation
|
(193
|
)
|
(1,384
|
)
|
(1,577
|
)
|
||||||
Impairment
|
(1,500
|
)
|
-
|
(1,500
|
)
|
|||||||
Loss from operations
|
(13,978
|
)
|
(3,600
|
)
|
(17,578
|
)
|
||||||
Finance income
|
415
|
|||||||||||
Finance expense
|
(166
|
)
|
||||||||||
Loss before tax
|
(17,329
|
)
|
||||||||||
Taxation
|
1,265
|
|||||||||||
Loss for the year
|
(16,064
|
)
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
3 |
Segment information
(continued)
|
Pipeline R&D
|
Commercial
|
Consolidated
|
||||||||||
£’000
|
£’000
|
£’000
|
||||||||||
Revenue
|
776
|
5,600
|
6,376
|
|||||||||
Grant revenue
|
547
|
-
|
547
|
|||||||||
Total revenue
|
1,323
|
5,600
|
6,923
|
|||||||||
Cost of sales
|
(9
|
)
|
(658
|
)
|
(667
|
)
|
||||||
Research and development costs
(reclassified) |
(7,786
|
)
|
(10
|
)
|
(7,796
|
)
|
||||||
Distribution costs, sales and
marketing (reclassified) |
(396
|
)
|
(8,531
|
)
|
(8,927
|
)
|
||||||
Administrative costs
(reclassified)
|
(2,279
|
)
|
(2,072
|
)
|
(4,351
|
)
|
||||||
Depreciation
|
(762
|
)
|
(10
|
)
|
(772
|
)
|
||||||
Amortisation
|
(193
|
)
|
(3,390
|
)
|
(3,583
|
)
|
||||||
Impairment
|
-
|
(11,413
|
)
|
(11,413
|
)
|
|||||||
Loss from operations
|
(10,102
|
)
|
(20,484
|
)
|
(30,586
|
)
|
||||||
Finance income
|
1,337
|
|||||||||||
Finance expense
|
(73
|
)
|
||||||||||
Loss before tax
|
(29,322
|
)
|
||||||||||
Taxation
|
9,160
|
|||||||||||
Loss for the year
|
(20,162
|
)
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
3 |
Segment information
(continued)
|
Pipeline R&D
|
Commercial
|
Unallocated
Costs (1) |
Consolidated
|
|||||||||||||
£’000
|
£’000
|
£’000
|
£’000
|
|||||||||||||
Revenue
|
273
|
502
|
-
|
775
|
||||||||||||
Grant revenue
|
600
|
-
|
-
|
600
|
||||||||||||
Total revenue
|
873
|
502
|
-
|
1,375
|
||||||||||||
Cost of sales
|
-
|
(70
|
)
|
-
|
(70
|
)
|
||||||||||
Research and development costs
(reclassified) |
(8,601
|
)
|
(109
|
)
|
-
|
(8,710
|
)
|
|||||||||
Distribution costs, sales and marketing
(reclassified) |
-
|
(369
|
)
|
(369
|
)
|
|||||||||||
Administrative costs
(reclassified)
|
(1,151
|
)
|
(265
|
)
|
(2,991
|
)
|
(4,407
|
)
|
||||||||
Depreciation
|
(500
|
)
|
(1
|
)
|
-
|
(501
|
)
|
|||||||||
Amortisation
|
(5
|
)
|
(231
|
)
|
-
|
(236
|
)
|
|||||||||
Loss from operations
|
(9,384
|
)
|
(543
|
)
|
(2,991
|
)
|
(12,918
|
)
|
||||||||
Finance income
|
1,691
|
|||||||||||||||
Finance expense
|
(5
|
)
|
||||||||||||||
Loss before tax
|
(11,232
|
)
|
||||||||||||||
Taxation
|
1,133
|
|||||||||||||||
Loss for the year
|
(10,099
|
)
|
2017
|
2016
|
2015
|
||||||||||
£’000
|
£’000
|
£’000
|
||||||||||
Spain
|
2,154
|
2,125
|
1,433
|
|||||||||
United Kingdom
|
15,331
|
16,489
|
14,019
|
|||||||||
United States
|
13,156
|
15,772
|
28,258
|
|||||||||
30,641
|
34,386
|
43,710
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
4 |
Loss from operations
|
2017
|
2016
|
2015
|
||||||||||
Loss from operations is stated after
charging/(crediting): |
£’000
|
£’000
|
£'000
|
|||||||||
Changes in inventories of finished goods and work in
progress |
2
02
|
256
|
62
|
|||||||||
Write down of inventory to net realisable value
|
-
|
287
|
-
|
|||||||||
Depreciation of property, plant and equipment
|
983
|
772
|
501
|
|||||||||
Amortisation of intangible assets – product and
marketing rights |
1,577
|
3,583
|
236
|
|||||||||
Impairment of intangible assets
|
1,500
|
11,413
|
-
|
|||||||||
Operating lease expense:
|
||||||||||||
-
Property
|
277
|
385
|
246
|
|||||||||
-
Plant and machinery
|
-
|
194
|
86
|
|||||||||
Foreign exchange(gain)/ loss
|
(39
|
)
|
31
|
(23
|
)
|
|||||||
Acquisition costs
|
-
|
-
|
2,991
|
|||||||||
Loss on disposal of property, plant and equipment
|
27
|
-
|
2,553
|
|||||||||
Gain on bargain purchase
|
-
|
-
|
(165
|
)
|
||||||||
Share based payment
|
520
|
203
|
170
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
5 |
Staff costs
|
2017
|
2016
|
2015
|
||||||||||
£’000
|
£’000
|
£’000
|
||||||||||
Staff costs (including directors) comprise:
|
||||||||||||
Wages and salaries
|
5,278
|
6,314
|
3,731
|
|||||||||
Defined contribution pension cost (note 27)
|
158
|
206
|
183
|
|||||||||
Social security contributions and similar taxes
|
643
|
769
|
431
|
|||||||||
Share based payment
|
520
|
203
|
170
|
|||||||||
6,599
|
7,492
|
4,515
|
2017
|
2016
reclassified
|
2015
reclassified
|
||||||||||
Research and development
|
62
|
57
|
45
|
|||||||||
General and administration
|
17
|
19
|
22
|
|||||||||
Sales and marketing
|
6
|
8
|
7
|
|||||||||
85
|
84
|
74
|
2017
|
2016
|
2015
|
||||||||||
£’000
|
£’000
|
£’000
|
||||||||||
Wages and salaries
|
811
|
1,054
|
850
|
|||||||||
Defined contribution pension cost
|
68
|
59
|
59
|
|||||||||
Payments made to third parties
|
142
|
142
|
223
|
|||||||||
Social security contributions and similar taxes
|
97
|
152
|
88
|
|||||||||
Benefits in kind
|
3
|
2
|
7
|
|||||||||
Share based payment
|
388
|
184
|
170
|
|||||||||
1,509
|
1,593
|
1,397
|
2017
|
2016
|
2015
|
||||||||||
£’000
|
£’000
|
£’000
|
||||||||||
Salary
|
299
|
448
|
347
|
|||||||||
Total pension and other post-employment benefit costs
|
10
|
28
|
24
|
|||||||||
Benefits in kind
|
1
|
1
|
6
|
|||||||||
310
|
477
|
377
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
6 |
Finance income and expense
|
2017
|
2016
|
2015
|
||||||||||
Finance income
|
£’000
|
£’000
|
£’000
|
|||||||||
Interest received on bank deposits
|
15
|
164
|
53
|
|||||||||
Gain on equity settled derivative financial liability
|
400
|
1,173
|
1,638
|
|||||||||
Total finance income
|
415
|
1,337
|
1,691
|
2017
|
2016
|
2015
|
||||||||||
Finance expense
|
£’000
|
£’000
|
£’000
|
|||||||||
Bank loans
|
18
|
16
|
2
|
|||||||||
Other loans
|
91
|
57
|
3
|
|||||||||
Arrangement Fees
|
57
|
-
|
-
|
|||||||||
Total finance expense
|
166
|
73
|
5
|
7 |
Taxation
|
2017
|
2016
|
2015
|
||||||||||
£’000
|
£’000
|
£’000
|
||||||||||
Current tax credit
|
||||||||||||
Current tax credited to the income statement
|
1,253
|
1,936
|
1,002
|
|||||||||
Taxation payable in respect of foreign subsidiary
|
-
|
(25
|
)
|
-
|
||||||||
1,253
|
1,911
|
1,002
|
||||||||||
Deferred tax credit
|
||||||||||||
Reversal of temporary differences (Note 23)
|
12
|
7,249
|
131
|
|||||||||
Total tax credit
|
1,265
|
9,160
|
1,133
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
7 |
Taxation
(continued)
|
2017
|
2016
|
2015
|
||||||||||
£’000
|
£’000
|
£’000
|
||||||||||
Loss before tax
|
(17,329
|
)
|
(29,322
|
)
|
(11,232
|
)
|
||||||
Expected tax credit based on the standard rate of
United Kingdom corporation tax at the domestic rate of 19.25% (2016: 20.25%, 2015:20.25%) |
(3,336
|
)
|
(5,864
|
)
|
(2,274
|
)
|
||||||
Expenses not deductible for tax purposes
|
412
|
1,022
|
185
|
|||||||||
Adjustments to brought forward values
|
-
|
-
|
(8
|
)
|
||||||||
Additional deduction for R&D expenditure
|
-
|
4
|
(789
|
)
|
||||||||
Surrender of tax losses for R&D tax refund
|
(1,196
|
)
|
(1,503
|
)
|
406
|
|||||||
Reversal of deferred tax on impairment
|
-
|
(3,421
|
)
|
-
|
||||||||
Unrelieved tax losses and other deductions arising in
the period |
(156
|
)
|
(166
|
)
|
(78
|
)
|
||||||
Foreign exchange differences
|
(
84
|
)
|
712
|
-
|
||||||||
Deferred tax not recognised
|
3,095
|
491
|
1,425
|
|||||||||
Adjustment in respect of prior years
|
-
|
(435
|
)
|
-
|
||||||||
Total tax credited to the income statement
|
(1,265
|
)
|
(9,160
|
)
|
(1,133
|
)
|
8 |
Loss per share
|
2017
|
2016
|
2015
|
||||||||||
Numerator
|
£’000
|
£’000
|
£’000
|
|||||||||
Loss used in basic EPS and diluted EPS
|
(16,064
|
)
|
(20,162
|
)
|
(10,099
|
)
|
||||||
Denominator
|
||||||||||||
Weighted average number of ordinary shares used in
basic EPS |
51,317,320
|
36,072,752
|
28,229,814
|
|||||||||
Basic and diluted loss per share - pence
|
(31p
|
)
|
(56p
|
)
|
(36p
|
)
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
9 |
Property, plant and equipment
|
Fixtures
|
Leasehold
|
Computer
|
Laboratory
|
|||||||||||||||||
and fittings
|
improve-
ments |
equipment
|
equipment
|
Total
|
||||||||||||||||
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
||||||||||||||||
At 1 January 2015
|
1,202
|
880
|
195
|
583
|
2,860
|
|||||||||||||||
Additions
|
183
|
283
|
173
|
385
|
1,024
|
|||||||||||||||
Acquired through acquisition of
subsidiary |
-
|
-
|
-
|
16
|
16
|
|||||||||||||||
Exchange differences
|
(66
|
)
|
(51
|
)
|
(14
|
)
|
(1
|
)
|
(132
|
)
|
||||||||||
At 31 December 2015
|
1,319
|
1,112
|
354
|
983
|
3,768
|
|||||||||||||||
Additions
|
2
|
715
|
43
|
609
|
1,369
|
|||||||||||||||
Disposal
|
-
|
-
|
(1
|
)
|
-
|
(1
|
)
|
|||||||||||||
Transfer
|
(1,125
|
)
|
-
|
(122
|
)
|
1,247
|
-
|
|||||||||||||
Exchange differences
|
32
|
172
|
7
|
211
|
422
|
|||||||||||||||
At 31 December 2016
|
228
|
1,999
|
281
|
3,050
|
5,558
|
|||||||||||||||
Additions
|
18
|
41
|
57
|
591
|
707
|
|||||||||||||||
Disposal
|
-
|
-
|
-
|
(41
|
)
|
(41
|
)
|
|||||||||||||
Exchange differences
|
6
|
72
|
4
|
69
|
151
|
|||||||||||||||
At 31 December 2017
|
252
|
2,112
|
342
|
3,669
|
6,375
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
9 |
Property, plant and equipment
(continued)
|
Fixtures
|
Leasehold
|
Computer
|
Laboratory
|
|||||||||||||||||
and fittings
|
improve-
ments |
equipment
|
equipment
|
Total
|
||||||||||||||||
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
||||||||||||||||
Accumulated depreciation
|
||||||||||||||||||||
At 1 January 2015
|
479
|
479
|
140
|
246
|
1,344
|
|||||||||||||||
Charge for the year
|
3
|
282
|
48
|
168
|
501
|
|||||||||||||||
Exchange differences
|
(24
|
)
|
(28
|
)
|
(8
|
)
|
(1
|
)
|
(61
|
)
|
||||||||||
At 31 December 2015
|
458
|
733
|
180
|
413
|
1,784
|
|||||||||||||||
Charge for the year
|
41
|
134
|
54
|
543
|
772
|
|||||||||||||||
Transfer
|
(369
|
)
|
(96
|
)
|
(118
|
)
|
583
|
-
|
||||||||||||
Exchange differences
|
19
|
101
|
6
|
110
|
236
|
|||||||||||||||
At 31 December 2016
|
149
|
872
|
122
|
1,649
|
2,792
|
|||||||||||||||
Charge for the year
|
43
|
330
|
68
|
542
|
983
|
|||||||||||||||
Disposals
|
-
|
-
|
-
|
(14
|
)
|
(14
|
)
|
|||||||||||||
Exchange differences
|
4
|
36
|
2
|
43
|
85
|
|||||||||||||||
At 31 December 2017
|
196
|
1,238
|
192
|
2,220
|
3,846
|
|||||||||||||||
Net book value
|
||||||||||||||||||||
At 31 December 2017
|
56
|
874
|
150
|
1,449
|
2,529
|
|||||||||||||||
At 31 December 2016
|
79
|
1,127
|
159
|
1,401
|
2,766
|
|||||||||||||||
At 31 December 2015
|
861
|
379
|
174
|
570
|
1,984
|
|||||||||||||||
At 1 January 2015
|
723
|
401
|
55
|
337
|
1,516
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
10 |
Intangible assets
|
In-process
research and development |
Product
and marketing rights |
Goodwill
|
IT/Website
costs |
Total
|
||||||||||||||||
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
||||||||||||||||
Cost
|
||||||||||||||||||||
At 1 January 2015
|
12,600
|
-
|
2,291
|
12
|
14,903
|
|||||||||||||||
Additions
|
-
|
-
|
-
|
3
|
3
|
|||||||||||||||
Acquired in business combinations
|
-
|
17,989
|
9,952
|
-
|
27,941
|
|||||||||||||||
Foreign exchange
|
-
|
332
|
213
|
-
|
545
|
|||||||||||||||
At 31 December 2015
|
12,600
|
18,321
|
12,456
|
15
|
43,392
|
|||||||||||||||
Additions
|
-
|
-
|
-
|
19
|
19
|
|||||||||||||||
Foreign exchange
|
-
|
3,160
|
2,032
|
-
|
5,192
|
|||||||||||||||
Disposals
|
-
|
-
|
-
|
(8
|
)
|
(8
|
)
|
|||||||||||||
At 31 December 2016
|
12,600
|
21,481
|
14,488
|
26
|
48,595
|
|||||||||||||||
Additions
|
778
|
-
|
-
|
-
|
778
|
|||||||||||||||
Foreign exchange
|
-
|
(1,625
|
)
|
(1,044
|
)
|
1
|
(2,668
|
)
|
||||||||||||
At 31 December 2017
|
13,378
|
19,856
|
13,444
|
27
|
46,705
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
10 |
Intangible assets
(continued)
|
In-process
|
Product and
|
|||||||||||||||||||
research and
|
marketing
|
IT/Website
|
||||||||||||||||||
development
|
rights
|
Goodwill
|
Costs
|
Total
|
||||||||||||||||
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
||||||||||||||||
Accumulated amortisation
|
||||||||||||||||||||
At 1 January 2015
|
1,800
|
-
|
-
|
9
|
1,809
|
|||||||||||||||
Amortisation charge for the
year |
-
|
235
|
-
|
1
|
236
|
|||||||||||||||
Foreign exchange
|
-
|
8
|
-
|
-
|
8
|
|||||||||||||||
At 31 December 2015
|
1,800
|
243
|
-
|
10
|
2,053
|
|||||||||||||||
Amortisation charge for the
year |
-
|
3,578
|
-
|
5
|
3,583
|
|||||||||||||||
Impairment
|
-
|
11,413
|
-
|
-
|
11,413
|
|||||||||||||||
Foreign exchange
|
-
|
374
|
-
|
-
|
374
|
|||||||||||||||
At 31 December 2016
|
1,800
|
15,608
|
-
|
15
|
17,423
|
|||||||||||||||
Amortisation charge for the
year |
-
|
1,574
|
-
|
3
|
1,577
|
|||||||||||||||
Impairment
|
1,500
|
-
|
-
|
-
|
1,500
|
|||||||||||||||
Foreign exchange
|
-
|
(1,443
|
)
|
-
|
1
|
(1,442
|
)
|
|||||||||||||
At 31 December 2017
|
3,300
|
15,739
|
-
|
19
|
19,058
|
|||||||||||||||
Net book value
|
||||||||||||||||||||
At 31 December 2017
|
10,078
|
4,117
|
13,444
|
8
|
27,647
|
|||||||||||||||
At 31 December 2016
|
10,800
|
5,873
|
14,488
|
11
|
31,172
|
|||||||||||||||
At 31 December 2015
|
10,800
|
18,078
|
12,456
|
5
|
41,339
|
|||||||||||||||
At 1 January 2015
|
10,800
|
-
|
2,291
|
3
|
13,094
|
|||||||||||||||
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
10 |
Intangible assets
(continued)
|
Carrying amount
|
Remaining amortisation period
|
|||||||||||||||||||||||
2017
|
2016
|
2015
|
2017
|
2016
|
2015
|
|||||||||||||||||||
|
£’000
|
|
£’000
|
|
£’000
|
(years)
|
(years)
|
(years)
|
||||||||||||||||
Midatech Pharma (Wales)
Limited acquired IPRD |
9,300
|
10,800
|
10,800
|
n/a in process
|
n/a in process
|
n/a in process
|
||||||||||||||||||
Midatech Pharma US,
Inc., product and marketing rights |
1,995
|
3,557
|
15,570
|
Between 1 and 3
|
Between 1 and 4
|
Between 2 and 5
|
||||||||||||||||||
Zuplenz
®
product and
marketing rights |
2,122
|
2,316
|
2,508
|
11
|
12
|
13
|
||||||||||||||||||
MTX110 acquired IPRD
|
778
|
-
|
-
|
n/a in process
|
-
|
-
|
||||||||||||||||||
14,195
|
16,673
|
28,878
|
11 |
Acquisition of Midatech Pharma US, Inc.
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
11 |
Acquisition of Midatech Pharma US, Inc.
(continued)
|
Fair value
|
||||
|
£’000
|
|||
Identifiable intangible assets:
|
||||
Product and marketing rights
|
15,477
|
|||
Property, plant and equipment
|
16
|
|||
Receivables and other debtors
|
515
|
|||
Stock
|
152
|
|||
Payables and other liabilities
|
(4,150
|
)
|
||
Deferred tax
|
(6,191
|
)
|
||
Cash
|
2,289
|
|||
Total net assets
|
8,108
|
|||
Equity instruments (5,422,028 ordinary shares)
Deferred Equity instruments
|
14,427
|
|||
-
Share options*
|
1,056 | |||
-
Warrants*
|
2,155
|
|||
-
Preference share redemption**
|
422
|
|||
Total consideration
|
18,060
|
|||
Goodwill on acquisition
|
9,952
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
11 |
Acquisition of Midatech Pharma US, Inc.
(continued)
|
|
£’000
|
|||
Cash paid on completion – preferred share redemption
|
(422
|
)
|
||
Net cash acquired
|
2,289
|
|||
1,867
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
12 |
Acquisition of Zuplenz
®
|
Fair value
|
||||
£’000
|
||||
Identifiable intangible assets:
|
||||
Product and marketing rights
|
2,512
|
|||
Stock
|
231
|
|||
Total net assets
|
(2,743
|
)
|
||
Cash consideration
|
2,528
|
|||
Contingent consideration*
|
50
|
|||
Total consideration
|
2,578
|
|||
Gain from bargain purchase on acquisition
|
(165
|
)
|
* |
The contingent consideration relates to various milestone payments which are dependent on the quarterly sales achieved in calendar years 2016 and 2017 and annual sales from 2018 to 2022 exceeding specified sales targets. The maximum amount payable was $26.0m however, the 2016 and 2017 sales targets were not achieved and management does not consider it likely that the 2018 to 2022 sales targets will be achieved either.
|
The net cash outflow in the year in respect of the business acquisition comprised:
|
||||
£’000
|
||||
Cash paid on completion
|
2,528
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
13 |
Impairment testing
|
Indefinite lived
|
|||||||||||||||||||||||||
IPRD carrying amount
|
Goodwill carrying amount
|
Valuation
Basis |
|||||||||||||||||||||||
Name
|
2017
|
2016
|
2015
|
2017
|
2016
|
2015
|
|||||||||||||||||||
£’000
|
£’000
|
£000
|
£’000
|
£’000
|
£000
|
||||||||||||||||||||
CGU – Midatech
Pharma (Wales) Ltd |
9,300
|
10,800
|
10,800
|
2,291
|
2,291
|
2,291
|
Value in use
|
Assumptions
|
2017
|
2016
|
2015
|
|
|
|
|
Pre-tax discount rate
|
17.9%
|
18.1%
|
17.7-19.5%
|
|
|||
Cumulative probability of success of projects
|
81%
|
46% to 81%
|
46% to 69%
|
Assumptions
|
2017
|
2016
|
2015
|
|
|
|
|
Pre-tax discount rate for all projects
|
increase to 21.0%
|
increase to 26.4%
|
increase to 23.9%
|
|
|||
Cumulative probability of success of projects
|
57%
|
53%
|
44%
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
13 |
Impairment testing
(continued)
|
Definite lived
|
Indefinite lived
|
||||||||||||||||||||||||
Product and marketing rights
carrying amount |
Goodwill carrying amount
|
Valuation
Basis |
|||||||||||||||||||||||
Name
|
2017
|
2016
|
2015
|
2017
|
2016
|
2015
|
|||||||||||||||||||
£’000
|
£’000
|
£’000
|
£’000
|
£’000
|
£’000
|
||||||||||||||||||||
CGU – Midatech
Pharma US, Inc |
1,995
|
3,557
|
15,477
|
11,152
|
12,197
|
10,165
|
Value in use
|
Assumptions
|
2017
|
2016
|
Pre-tax discount rate
|
19.7%
|
24.7%
|
Overall CGU 10-year growth rate
|
26.4%
|
10.6%
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
13 |
Impairment testing
(continued)
|
Assumptions
|
2017
|
2016
|
Pre-tax discount rate
|
increase to 53.7%
|
increase to 25.2%
|
Overall CGU 10-year growth rate
|
5.0%
|
10.5%
|
14 |
Subsidiaries
|
Registered
|
Nature of
|
||
Name
|
Office
|
Business
|
Notes
|
Midatech Limited
|
65 Innovation Drive, Milton Park, Milton, Abingdon, Oxfordshire, OX14 4RQ
|
Trading company
|
|
Midatech Pharma
(Espana) SL |
Parque Tecnológico de Vizcaya, Edificio 800 Planta 2, Derio, 48160, Vizcaya, Spain
|
Trading company
|
(a)
|
PharMida AG
|
c/o Kellerhals, Hirschgässlein 11, 4051 Basel, Switzerland
|
Dormant
|
(a) (b)
|
Midatech Pharma (Wales)
Limited |
Oddfellows House, 19 Newport Road, Cardiff, CF24 0AA
|
Trading company
|
|
Midatech Pharma US, Inc.
|
8601 Six Forks Road, Suite 160, Raleigh, North Carolina 27615, USA
|
Trading company
|
(c)
|
Dara Therapeutics, Inc.
|
8601 Six Forks Road, Suite 160, Raleigh, North Carolina 27615, USA
|
Dormant
|
(d)
|
Midatech Pharma PTY
|
c/o Griffith Hack Consulting, 300 Queen Street, Brisbane, QLD 4000, Australia
|
Trading company
|
(e)
|
(a) |
Wholly owned subsidiary of Midatech Limited
|
(b) |
PharMida AG became dormant in January 2016.
|
(c) |
DARA Bio Sciences, Inc. was acquired on 4 December 2015 through a merger with a specially incorporated subsidiary of Midatech Pharma plc. This merger subsidiary was renamed Midatech Pharma US, Inc. on 4 December 2015.
|
(d) |
Wholly owned subsidiary of Midatech Pharma US, Inc.
|
(e) |
Midatech Pharma PTY was incorporated on 16 February 2015.
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
15 |
Joint arrangements
|
Country of
|
|||
Name
|
incorporation
|
Nature of business
|
Type of arrangement
|
Syntara LLC
|
USA
|
Dormant
|
Joint venture
|
MidaSol
Therapeutics GP
|
Cayman Islands
|
Research and development partner
|
Joint operation
|
2017
|
2016
|
2015 | ||||||||||
£’000
|
£’000
|
£'000 | ||||||||||
Research and development spend on MidaSol
Therapeutics |
-
|
-
|
776
|
|||||||||
Year-end receivable due from joint operation partner
|
-
|
-
|
219
|
16 |
Trade and other receivables
|
2017
|
2016
|
2015 | ||||||||||
£’000
|
£’000
|
£'000 | ||||||||||
Trade receivables
|
2,232
|
1,428
|
985
|
|||||||||
Prepayments
|
627
|
586
|
685
|
|||||||||
Other receivables
|
848
|
873
|
1,213
|
|||||||||
Total trade and other receivables
|
3,707
|
2,887
|
2,883
|
|||||||||
Less: non-current portion (rental deposit and on bond)
|
(465
|
)
|
(448
|
)
|
(387
|
)
|
||||||
Current portion
|
3,242
|
2,439
|
2,496
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
17 |
Cash and cash equivalents and cash flow supporting notes
|
2017
|
2016
|
2015
|
||||||||||
£’000
|
£’000
|
£'000
|
||||||||||
Cash at bank available on demand
|
13,204
|
17,608
|
16,175
|
2017
|
2016
|
2015
|
||||||||||
£’000
|
£’000
|
£'000
|
||||||||||
Funds raised on Public Offering
|
6,157
|
16,673
|
-
|
|||||||||
Costs of raising funds on Public Offering
|
(429
|
)
|
(1,105
|
)
|
-
|
|||||||
5,728
|
15,568
|
-
|
Non-current
liabilities,
borrowings
|
Current
liabilities,
borrowings
|
Total
|
||||||||||
£’000
|
£’000
|
£’000
|
||||||||||
At 1 January 2017
|
-
|
23
|
23
|
|||||||||
Cash Flows
|
5,249
|
(12
|
)
|
5,237
|
||||||||
Foreign Exchange
|
(42
|
)
|
-
|
(42
|
)
|
|||||||
At 31 December 2017
|
5,207
|
11
|
5,218
|
18 |
Inventories
|
2017
|
2016
|
2015
|
||||||||||
£’000
|
£’000
|
£'000
|
||||||||||
Work in progress | - | - | 230 | |||||||||
Finished goods
|
941
|
817
|
229
|
|||||||||
Total inventories
|
941
|
817
|
459
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
19 |
Trade and other payables
|
2017
|
2016
|
2015
|
||||||||||
Current
|
£’000
|
£’000
|
£'000
|
|||||||||
Trade payables
|
2,271
|
3,268
|
2,285
|
|||||||||
Other payables
|
1,141
|
1,166
|
35
|
|||||||||
Accruals
|
3,090
|
2,003
|
3,101
|
|||||||||
Total financial liabilities, excluding loans and
borrowings, classified as financial liabilities measured at amortised cost |
6,502
|
6,437
|
5,421
|
|||||||||
Tax and social security
|
359
|
670
|
183
|
|||||||||
Deferred revenue
|
1,141
|
1,300
|
1,480
|
|||||||||
Total trade and other payables
|
8,002
|
8,407
|
7,084
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
20
|
Borrowings
|
2017
|
2016
|
2015
|
||||||||||
£’000
|
£’000
|
£'000
|
||||||||||
Current
|
||||||||||||
Bank loans
|
11
|
23
|
9
|
|||||||||
Finance lease
|
39
|
31
|
70
|
|||||||||
Government and research loans
|
311
|
484
|
363
|
|||||||||
Total
|
361
|
538
|
442
|
|||||||||
Non-current
|
||||||||||||
Bank loans
|
5,207
|
-
|
20
|
|||||||||
Finance lease
|
29
|
52
|
68
|
|||||||||
Government and research loans
|
949
|
1,568
|
1,420
|
|||||||||
Total
|
6,185
|
1,620
|
1,508
|
21
|
Derivative financial liability - current
|
2017
|
2016
|
2015
|
||||||||||
£'000
|
£’000
|
£'000
|
||||||||||
Equity settled derivative financial liability
|
-
|
400
|
1,573
|
|||||||||
At 1 January/on acquisition – 5 December 2015
|
400
|
1,573
|
3,211
|
|||||||||
Gain recognised in finance income within the
consolidated statement of comprehensive income |
(400
|
)
|
(1,173
|
)
|
(1,638
|
)
|
||||||
At 31 December
|
-
|
400
|
1,573
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
21
|
Derivative financial liability – current
(continued)
|
22
|
Financial instruments - risk management
|
· |
Credit risk
|
· |
Foreign exchange risk
|
· |
Liquidity risk
|
· |
Trade and other receivables
|
· |
Cash and cash equivalents
|
· |
Trade and other payables
|
· |
Accruals
|
· |
Loans and borrowings
|
· |
Derivative financial liability
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
22
|
Financial instruments - risk management
(continued)
|
2017
|
2016
|
2015
|
||||||||||
£'000
|
£’000
|
£'000
|
||||||||||
Cash and cash equivalents
|
13,204
|
17,608
|
16,175
|
|||||||||
Trade receivables
|
2,232
|
1,428
|
985
|
|||||||||
Other receivables
|
848
|
873
|
1,213
|
|||||||||
Total financial assets
|
16,284
|
19,909
|
18,373
|
2017
|
2016
|
2015
|
||||||||||
£'000
|
£’000
|
£'000
|
||||||||||
Trade payables
|
2,271
|
3,268
|
2,285
|
|||||||||
Other payables
|
1,141
|
1,166
|
35
|
|||||||||
Accruals
|
3,090
|
2,003
|
3,101
|
|||||||||
Borrowings
|
6,546
|
2,158
|
1,950
|
|||||||||
Total financial liabilities - amortised cost
|
13,048
|
8,595
|
7,371
|
2017
|
2016
|
2015
|
||||||||||
£'000
|
|
£’000
|
£'000
|
|||||||||
Equity settled derivative financial liability |
-
|
400
|
1,573
|
• |
Level 1: quoted (unadjusted) prices in active markets for identical assets and liabilities;
|
• |
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly; and
|
• |
Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
22
|
Financial instruments - risk management
(continued)
|
Financial
liabilities |
Fair value
as at 31/12/2017 |
Fair value
hierarchy |
Valuation
technique (s) and key input(s) |
Significant unobservable
input(s) |
Relationship of
unobservable inputs to fair value |
||
Equity
settled financial derivative liability |
- |
Level 3
|
Black Scholes option pricing model
|
Volatility rate of 42.5%determined using historical volatility of comparable companies.
|
The higher the volatility the higher the fair value.
|
||
Expected life between a range of 0.1 and 8.6 years determined using the remaining life of the share options.
|
The shorter the expected life the lower the fair value.
|
||||||
Risk-free rate between a range of 0.0% and 1.14% determined using the expected life assumptions.
|
The higher the risk-free rate the higher the fair value.
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
22
|
Financial instruments - risk management
(continued)
|
2017
|
2016
|
2015
|
||||||||||
£'000
|
£’000
|
£'000
|
||||||||||
Cash and cash equivalents:
|
||||||||||||
Pounds Sterling
|
6,116
|
10,229
|
14,494
|
|||||||||
US Dollar
|
5,362
|
2,186
|
819
|
|||||||||
Euro
|
1,632
|
5,143
|
862
|
|||||||||
Other
|
94
|
50
|
-
|
|||||||||
Total
|
13,204
|
17,608
|
16,175
|
2017
|
2016
|
2015
|
||||||||||
£'000
|
£’000
|
£'000
|
||||||||||
Net Foreign Currency Assets/(Liabilities):
|
||||||||||||
US Dollar
|
4,459
|
(206
|
)
|
(1,691
|
)
|
|||||||
Euro
|
(362
|
)
|
2,655
|
77
|
||||||||
Other
|
95
|
58
|
(8
|
)
|
||||||||
Total
|
4,192
|
2,507
|
(1,622
|
)
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
22
|
Financial instruments - risk management
(continued)
|
Year ended 31 December 2017
|
US Dollar
|
Euro
|
Other
|
|||||||||
£'000
|
£’000
|
£'000
|
||||||||||
Loss before tax
|
307
|
(89
|
)
|
-
|
||||||||
Total equity
|
307
|
(89
|
)
|
-
|
Year ended 31 December 2016
|
US Dollar
|
Euro
|
Other
|
|||||||||
£'000
|
£’000
|
£'000
|
||||||||||
Loss before tax
|
521
|
(73
|
)
|
(55
|
)
|
|||||||
Total equity
|
521
|
(73
|
)
|
(55
|
)
|
2017
|
Up to 3
months |
Between
3 and 12
months
|
Between
1 and 2
years
|
Between
2 and 5 years |
Over
5 years |
|||||||||||||||
|
£’000
|
£’000
|
£’000
|
£’000
|
£’000
|
|||||||||||||||
Trade and other payables
|
6,502
|
-
|
-
|
-
|
-
|
|||||||||||||||
Bank loans
|
120
|
359
|
2,201
|
3,926
|
-
|
|||||||||||||||
Finance leases
|
16
|
25
|
30
|
-
|
-
|
|||||||||||||||
Government research loans
|
43
|
268
|
467
|
545
|
47
|
|||||||||||||||
Total
|
6,681
|
649
|
2,698
|
4,471
|
47
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
22
|
Financial instruments - risk management
(continued)
|
2016
|
Up to 3
months |
Between
3 and 12
months
|
Between
1 and 2
years
|
Between
2 and 5 years |
Over
5 years |
|||||||||||||||
|
£’000
|
£’000
|
£’000
|
£’000
|
£’000
|
|||||||||||||||
Trade and other payables
|
6,437
|
-
|
-
|
-
|
-
|
|||||||||||||||
Bank loans
|
3
|
8
|
11
|
4
|
-
|
|||||||||||||||
Finance leases
|
7
|
26
|
30
|
33
|
-
|
|||||||||||||||
Government research loans
|
-
|
449
|
269
|
761
|
393
|
|||||||||||||||
Total
|
6,447
|
483
|
310
|
798
|
393
|
2015
|
Up to 3
months |
Between
3 and 12
months
|
Between
1 and 2
years
|
Between
2 and 5 years |
Over
5 years |
|||||||||||||||
|
£’000
|
£’000
|
£’000
|
£’000
|
£’000
|
|||||||||||||||
Trade and other payables
|
5,421
|
-
|
-
|
-
|
-
|
|||||||||||||||
Bank loans
|
2
|
7
|
9
|
13
|
-
|
|||||||||||||||
Finance leases
|
7
|
71
|
27
|
56
|
-
|
|||||||||||||||
Government research loans
|
36
|
352
|
195
|
644
|
755
|
|||||||||||||||
Total
|
5,466
|
430
|
231
|
713
|
755
|
• |
Trade and other payables – note 19
|
• |
Loans and borrowings – note 20
|
• |
to safeguard the entity’s ability to continue as a going concern; and
|
• |
to have sufficient resource to take development projects forward towards commercialisation.
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
23
|
Deferred tax
|
2017
|
2016
|
2015
|
||||||||||
£’000
|
£’000
|
£'000
|
||||||||||
Liability at 1 January
|
-
|
6,547
|
354
|
|||||||||
Arising on business combination
|
-
|
-
|
6,191
|
|||||||||
Credited to income on impairment and amortisation of
intangibles |
-
|
(5,509
|
)
|
-
|
||||||||
Credited to income statement
|
-
|
(1,740
|
)
|
(131
|
)
|
|||||||
Foreign exchange gain
|
-
|
702
|
133
|
|||||||||
Liability at 31 December
|
-
|
-
|
6,547
|
Gross losses
|
Unrecognised
deferred tax asset |
|||||||
£’000
|
£’000
|
|||||||
31 December 2015
|
23,286
|
4,191
|
||||||
31 December 2016
|
26,956
|
5,049
|
||||||
31 December 2017
|
38,377
|
6,639
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
23
|
Deferred tax
(continued)
|
2017
|
Asset
|
Liability
|
Net
|
|||||||||
£’000
|
£’000
|
£'000
|
||||||||||
Business Combinations
|
2,599
|
(2,599
|
)
|
-
|
||||||||
2016
|
Asset
|
Liability
|
Net
|
|||||||||
£’000
|
£’000
|
£'000
|
||||||||||
Business Combinations
|
3,668
|
(3,668
|
)
|
-
|
||||||||
2015
|
Asset
|
Liability
|
Net
|
|||||||||
£’000
|
£’000
|
£'000
|
||||||||||
Business Combinations
|
1,625
|
(8,172
|
)
|
(6,547
|
)
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
24 |
Share capital
|
2017
|
2017
|
2016
|
2016
|
2015
|
2015
|
|||||||||||||||||||
Authorised, allotted and fully paid – classified as equity
|
Number
|
£
|
Number
|
£
|
Number
|
£
|
||||||||||||||||||
At 1 January
|
||||||||||||||||||||||||
Ordinary shares of £0.00005 each
|
61,084,135
|
3,054
|
48,699,456
|
2,435
|
33,467,504
|
1,673
|
||||||||||||||||||
Deferred shares of £1 each
|
1,000,001
|
1,000,001
|
1,000,001
|
1,000,001
|
1,000,001
|
1,000,001
|
||||||||||||||||||
Total
|
1,003,055
|
1,002,436
|
1,001,674
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
24
|
Share capital
(continued)
|
(a) |
to receive notice of, to attend and to vote at all general meetings of the Company, in which case shareholders shall have one vote for each share of which he is the holder.
|
(b) |
to receive such dividend as is declared by the Board on each share held.
|
(a) |
shall not be entitled to receive notice of or to attend or speak at any general meeting of the Company or to vote on any resolution to be proposed at any general meeting of the Company;
|
(b) |
shall not be entitled to receive any dividend or other distribution of out of the profits of the Company.
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
24
|
Share capital
(continued)
|
Ordinary
Shares |
Deferred
Shares |
Share
Price |
Total
consideration |
||||||||||||||
Number
|
Number
|
£
|
£’000
|
||||||||||||||
2015
|
|||||||||||||||||
As at 1 January 2015
|
27,794,258
|
1,000,001
|
32,000
|
||||||||||||||
24 April 2015
|
Exercise of employee share options
|
16,500
|
-
|
0.00005
|
-
|
||||||||||||
25 September 2015
|
Exercise of employee share options
|
10,000
|
-
|
0.00005
|
-
|
||||||||||||
4 December 2015
|
Share issue on acquisition of DARA BioSciences, Inc.
|
5,422,028
|
-
|
2.63
|
14,240
|
||||||||||||
23 December 2015
|
Deferred consideration re: acquisition of Q Chip Limited
|
224,718
|
-
|
2.67
|
600
|
||||||||||||
As at 31 December 2015
|
33,467,504
|
1,000,001
|
46,840
|
||||||||||||||
2016
|
|||||||||||||||||
1 July 2016
|
Deferred consideration re: acquisition of Q Chip Limited
|
74,908
|
-
|
2.67
|
200
|
||||||||||||
31 October 2016
|
Placing and Open Offer (costs shown in note 17)
|
15,157,044
|
-
|
1.10
|
16,673
|
||||||||||||
As at 31 December 2016
|
48,699,456
|
1,000,001
|
63,713
|
||||||||||||||
2017
|
|||||||||||||||||
19 May 2017
|
Share issue to SIPP trustee (see note 28)
|
20,000
|
-
|
0.00005
|
1
|
||||||||||||
16 October 2017
|
Placing and Open Offer (shown in note 17)
|
12,314,679
|
-
|
0.5
|
6,157
|
||||||||||||
7 November 2017
|
Share issue to SIPP trustee (see note 28)
|
50,000
|
-
|
0.00005
|
3
|
||||||||||||
As at 31 December 2017
|
61,084,135
|
1,000,001
|
69,874
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
25
|
Reserves
|
Reserve
|
Description and purpose
|
Share premium
|
Amount subscribed for share capital in excess of nominal value.
|
Merger reserve
|
Represents the difference between the fair value and nominal value of shares issued on the acquisition of subsidiary companies where the Company has elected to take advantage of merger relief.
|
Shares to be issued
|
Shares for which consideration has been received but which are not yet issued and which form part of consideration in a business combination.
|
Foreign exchange reserve
|
Gains/losses arising on retranslating the net assets of overseas operations into sterling.
|
Accumulated deficit
|
All other net gains and losses and transactions with owners (e.g. dividends) not recognised elsewhere.
|
26
|
Leases
|
Land and
|
||||||||
buildings
|
Other
|
|||||||
2017
|
£'000
|
£'000
|
||||||
Expiring In one year or less
|
449
|
8
|
||||||
Expiring Between one and five years
|
359
|
32
|
||||||
808
|
40
|
|||||||
2016
|
£'000
|
£'000
|
||||||
Expiring In one year or less
|
371
|
7
|
||||||
Expiring Between one and five years
|
449
|
28
|
||||||
820
|
35
|
|||||||
Land and
|
||||||||
buildings
|
Other
|
|||||||
2015
|
£'000
|
£'000
|
||||||
Expiring In one year or less
|
313
|
1
|
||||||
Expiring Between one and five years
|
410
|
2
|
||||||
723
|
3
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
27
|
Retirement benefits
|
28
|
Share-based Payments
|
Date of grant
|
At 1
January 2017 |
Granted
in 2017 |
Exercised
in 2017 |
Forfeited in
2017 |
At 31
December 2017 |
Exercise
Price |
||||||||||||||||||
31 December 2008
|
26,122
|
-
|
-
|
-
|
26,122
|
£
|
1.425
|
|||||||||||||||||
31 December 2008
|
3,000
|
-
|
-
|
-
|
3,000
|
£
|
3.985
|
|||||||||||||||||
1 April 2010
|
25,110
|
-
|
-
|
-
|
25,110
|
£
|
4.00
|
|||||||||||||||||
20 August 2010
|
41,766
|
-
|
-
|
41,766
|
£
|
4.19
|
||||||||||||||||||
13 September 2011
|
3,000
|
-
|
-
|
-
|
3,000
|
£
|
4.19
|
|||||||||||||||||
20 April 2012
|
35,796
|
-
|
-
|
-
|
35,796
|
£
|
4.19
|
|||||||||||||||||
9 May 2014
|
200,000
|
-
|
-
|
-
|
200,000
|
£
|
0.075
|
|||||||||||||||||
30 June 2014
|
880,000
|
-
|
-
|
-
|
880,000
|
£
|
0.075
|
|||||||||||||||||
11 July 2014
|
3,000
|
-
|
-
|
1,000
|
2,000
|
£
|
0.075
|
|||||||||||||||||
31 October 2016
|
50,000
|
-
|
-
|
-
|
50,000
|
£
|
1.710
|
|||||||||||||||||
31 October 2016
|
607,600
|
-
|
-
|
-
|
607,600
|
£
|
2.680
|
|||||||||||||||||
14 December 2016
|
8,000
|
-
|
-
|
-
|
8,000
|
£
|
1.550
|
|||||||||||||||||
14 December 2016
|
10,000
|
-
|
-
|
-
|
10,000
|
£
|
1.700
|
|||||||||||||||||
14 December 2016
|
3,000
|
-
|
-
|
3,000
|
-
|
£
|
1.710
|
|||||||||||||||||
14 December 2016
|
3,000
|
-
|
-
|
3,000
|
-
|
£
|
1.730
|
|||||||||||||||||
14 December 2016
|
3,000
|
-
|
-
|
3,000
|
-
|
£
|
1.740
|
|||||||||||||||||
14 December 2016
|
40,000
|
-
|
-
|
-
|
40,000
|
£
|
1.870
|
|||||||||||||||||
14 December 2016
|
40,000
|
-
|
-
|
-
|
40,000
|
£
|
1.880
|
|||||||||||||||||
15 December 2016
|
197,000
|
-
|
-
|
95,000
|
102,000
|
£
|
1.210
|
|||||||||||||||||
19 December 2016
|
1,110,000
|
-
|
-
|
5,750
|
1,104,250
|
£
|
1.210
|
|||||||||||||||||
15 December 2017
|
-
|
1,351,250
|
-
|
-
|
1,351,250
|
£
|
0.46
|
|||||||||||||||||
3,289,394
|
1,351,250
|
-
|
(110,750
|
)
|
4,529,894
|
|||||||||||||||||||
Options exercisable at 31 December 2017
|
1,000,469
|
|||
Weighted average exercise price of outstanding options at 31 December 2017
|
£
|
1.003
|
||
Weighted average exercise price of options exercised in 2017
|
n/a
|
|||
Weighted average exercise price of options forfeited in 2017
|
£
|
1.242
|
||
Weighted average exercise price of options granted in 2017
|
£
|
0.46
|
||
Weighted average remaining contractual life of outstanding options at 31 December 2017
|
8.3 years
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
28 |
Share-based payment
(continued)
|
Date of grant
|
At 1
January 2016 |
Granted
in 2016 |
Exercised
in 2016 |
Forfeited in
2016 |
At 31
December 2016 |
Exercise
Price |
||||||||||||||||||
31 December 2008
|
26,122
|
-
|
-
|
-
|
26,122
|
£
|
1.425
|
|||||||||||||||||
31 December 2008
|
15,500
|
-
|
-
|
(12,500
|
)
|
3,000
|
£
|
3.985
|
||||||||||||||||
1 April 2010
|
25,110
|
-
|
-
|
-
|
25,110
|
£
|
4.00
|
|||||||||||||||||
20 August 2010
|
41,766
|
-
|
-
|
41,766
|
£
|
4.19
|
||||||||||||||||||
13 September 2011
|
3,000
|
-
|
-
|
-
|
3,000
|
£
|
4.19
|
|||||||||||||||||
20 April 2012
|
35,796
|
-
|
-
|
-
|
35,796
|
£
|
4.19
|
|||||||||||||||||
9 May 2014
|
200,000
|
-
|
-
|
-
|
200,000
|
£
|
0.075
|
|||||||||||||||||
30 June 2014
|
880,000
|
-
|
-
|
-
|
880,000
|
£
|
0.075
|
|||||||||||||||||
11 July 2014
|
5,000
|
-
|
-
|
(2,000
|
)
|
3,000
|
£
|
0.075
|
||||||||||||||||
31 October 2016
|
-
|
50,000
|
-
|
-
|
50,000
|
£
|
1.710
|
|||||||||||||||||
31 October 2016
|
-
|
607,600
|
-
|
-
|
607,600
|
£
|
2.680
|
|||||||||||||||||
14 December 2016
|
-
|
8,000
|
-
|
-
|
8,000
|
£
|
1.550
|
|||||||||||||||||
14 December 2016
|
-
|
10,000
|
-
|
-
|
10,000
|
£
|
1.700
|
|||||||||||||||||
14 December 2016
|
-
|
3,000
|
-
|
-
|
3,000
|
£
|
1.710
|
|||||||||||||||||
14 December 2016
|
-
|
3,000
|
-
|
-
|
3,000
|
£
|
1.730
|
|||||||||||||||||
14 December 2016
|
-
|
3,000
|
-
|
-
|
3,000
|
£
|
1.740
|
|||||||||||||||||
14 December 2016
|
-
|
40,000
|
-
|
-
|
40,000
|
£
|
1.870
|
|||||||||||||||||
14 December 2016
|
-
|
40,000
|
-
|
-
|
40,000
|
£
|
1.880
|
|||||||||||||||||
15 December 2016
|
-
|
197,000
|
-
|
-
|
197,000
|
£
|
1.210
|
|||||||||||||||||
19 December 2016
|
1,110,000
|
-
|
-
|
1,110,000
|
£
|
1.210
|
||||||||||||||||||
1,232,294
|
2,071,600
|
-
|
(14,500
|
)
|
3,289,394
|
Options exercisable at 31 December 2016
|
468,194
|
|||
Weighted average exercise price of outstanding options at 31 December 2016
|
£
|
1.234
|
||
Weighted average exercise price of options exercised in 2016
|
n/a
|
|||
Weighted average exercise price of options forfeited in 2016
|
£
|
3.446
|
||
Weighted average exercise price of options granted in 2016
|
£
|
1.685
|
||
Weighted average remaining contractual life of outstanding options at 31 December 2016
|
8.6 years
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
28 |
Share-based payment
(continued)
|
Date of grant
|
At 1
January 2015 |
Granted
in 2015 |
Exercised
in 2015 |
Forfeited
in 2015 |
At 31
December 2015 |
Exercise
Price |
||||||||||||||||||
31 December 2008
|
26,122
|
-
|
-
|
-
|
26,122
|
£
|
1.425
|
|||||||||||||||||
31 December 2008
|
15,500
|
-
|
-
|
-
|
15,500
|
£
|
3.985
|
|||||||||||||||||
1 April 2010
|
25,110
|
-
|
-
|
-
|
25,110
|
£
|
4.00
|
|||||||||||||||||
20 August 2010
|
59,666
|
-
|
-
|
(17,900
|
)
|
41,766
|
£
|
4.19
|
||||||||||||||||
13 September 2011
|
3,000
|
-
|
-
|
-
|
3,000
|
£
|
4.19
|
|||||||||||||||||
20 April 2012
|
35,796
|
-
|
-
|
-
|
35,796
|
£
|
4.19
|
|||||||||||||||||
3 April 2014
|
26,500
|
-
|
(26,500
|
)
|
-
|
-
|
£
|
0.075
|
||||||||||||||||
9 May 2014
|
200,000
|
-
|
-
|
-
|
200,000
|
£
|
0.075
|
|||||||||||||||||
30 June 2014
|
880,000
|
-
|
-
|
-
|
880,000
|
£
|
0.075
|
|||||||||||||||||
11 July 2014
|
11,000
|
-
|
-
|
(6,000
|
)
|
5,000
|
£
|
0.075
|
||||||||||||||||
1,282,694
|
-
|
(26,500
|
)
|
(23,900
|
)
|
1,232,294
|
Options exercisable at 31 December 2015
|
366,044
|
|||
Weighted average exercise price of outstanding options at 31 December 2015
|
£
|
0.502
|
||
Weighted average exercise price of options exercised in 2015
|
£
|
0.075
|
||
Weighted average exercise price of options forfeited in 2015
|
£
|
4.193
|
||
Weighted average exercise price of options granted in 2015
|
n/a
|
|||
Weighted average remaining contractual life of outstanding options at 31 December 2015
|
7.8 years
|
· |
25% (i.e. 337,812 options) become eligible to vest on the first anniversary of the relevant date of grant; and
|
· |
A further 6.25% (i.e. 84,453 options) vest every 3 months following the first anniversary of the date of grant such that by the fourth anniversary all 1,351,250 options shall have be eligible for vesting.
|
· |
All vesting is subject to the 20-VWAP share price reaching £1 at any time during the life of the option.
|
· |
25% (i.e. 495,400 options) vest on the first anniversary of the relevant date of grant; and
|
· |
A further 6.25% (i.e. 123,850 options) vest every 3 months following the first anniversary of the date of grant such that by the fourth anniversary all 1,981,600 options shall have vested.
|
· |
607,600 of these options related to 2015 but the acquisition of DARA BioSciences, Inc. and other activities during that year meant that there was insufficient time during Open periods to make the awards until 2016. However, the effective date of grant and hence basis for vesting was in 2015. As a result, 151,900 of these options had vested by 31 December 2016.
|
· |
Vesting was conditional on the same time-based vesting criteria noted above and also on the Midatech Pharma US, Inc. business achieving a revenue target for the year ended 31 December 2017. This target was not met and the options have therefore lapsed.
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
28 |
Share-based payment
(continued)
|
|
2017
|
Number of options
|
1,351,250
|
Option pricing models used
|
Monte-Carlo
|
Share price
|
£0.41*
|
Exercise price of options issued in
year |
£0.46
|
Contractual life
|
10 years
|
Expected life
|
5 years
|
Volatility
|
42.5%**
|
Expected dividend yield
|
0%
|
Risk free rate
|
0.73%
|
* |
The share price used in the determination of the fair value of the options granted in 2017 was the share price on the date of grant.
|
** |
Volatility was calculated with reference to the historic share price volatility of comparable companies measured over a five-year period.
|
|
2016
|
Number of options
|
2,071,600
|
Option pricing models used
|
Black Scholes
|
Share price
|
£1.143-£1.19*
|
Exercise price of options issued in
year |
£1.21-£2.68
|
Contractual life
|
10 years
|
Expected life
|
5 years
|
Volatility
|
40%**
|
Expected dividend yield
|
0%
|
Risk free rate
|
0.63%-0.74%
|
* |
The share price used in the determination of the fair value of the options granted in 2016 was the average of the opening and closing share prices on the date of grant.
|
** |
Volatility was calculated with reference to the historic share price volatility of comparable companies measured over a five-year period.
|
Midatech Pharma PLC
|
Notes forming part of the financial statements
|
for the years ended 31 December 2017, 2016 and 2015
|
29 |
Capital commitments
|
30 |
Related party transactions
|
31 |
Contingent liabilities
|
32 |
Ultimate controlling party
|
CREDIT, Guaranty AND SECURITY AGREEMENT
|
6
|
||
1.
|
ACCOUNTING AND OTHER TERMS
|
6
|
|
2.
|
CREDIT FACILITIES AND TERMS
|
6
|
|
2.1
|
Promise to Pay
|
6
|
|
2.2
|
Credit Facilities
|
6
|
|
2.3
|
Credit Facilities
|
6
|
|
2.4
|
Reserved
|
7
|
|
2.5
|
Reserved
|
7
|
|
2.6
|
Interest and Payments; Administration
|
7
|
|
2.7
|
Secured Promissory Notes
|
12
|
|
3.
|
CONDITIONS OF CREDIT EXTENSIONS
|
13
|
|
3.1
|
Conditions Precedent to Initial Credit Extension
|
13
|
|
3.2
|
Conditions Precedent to all Credit Extensions
|
13
|
|
3.3
|
Method of Borrowing
|
13
|
|
3.4
|
Funding of Credit Facilities
|
14
|
|
3.5
|
Searches
|
14
|
|
4.
|
CREATION OF SECURITY INTEREST
|
14
|
|
4.1
|
Grant of Security Interest
|
14
|
|
4.2
|
Representations and Covenants
|
14
|
|
5.
|
REPRESENTATIONS AND WARRANTIES
|
16
|
|
5.1
|
Due Organization, Authorization: Power and Authority
|
16
|
|
5.2
|
Litigation
|
16
|
|
5.3
|
No Material Deterioration in Financial Condition; Financial Statements
|
17
|
|
5.4
|
Solvency
|
17
|
|
5.5
|
Subsidiaries; Investments; Margin Stock
|
17
|
|
5.6
|
Tax Returns and Payments; Pension Contributions
|
17
|
|
5.7
|
Intellectual Property and License Agreements
|
18
|
|
5.8
|
Regulatory Status
|
18
|
|
5.9
|
Accuracy of Schedules and Perfection Certificate
|
18
|
|
5.10
|
FCPA and Anti-Corruption Law
|
18
|
|
5.11
|
Centre of Main Interests and establishment for UK Credit Parties
|
18
|
|
5.12
|
Pensions
|
19
|
|
6.
|
AFFIRMATIVE COVENANTS
|
19
|
|
6.1
|
Organization and Existence; Government Compliance
|
19
|
|
6.2
|
Financial Statements, Reports, Certificates
|
19
|
6.3
|
Maintenance of Property
|
20
|
|
6.4
|
Taxes; Pensions
|
20
|
|
6.5
|
Insurance
|
21
|
|
6.6
|
Collateral Accounts
|
21
|
|
6.7
|
Notices of Material Agreements, Litigation and Defaults; Cooperation in Litigation
|
21
|
|
6.8
|
Creation/Acquisition of Subsidiaries
|
22
|
|
6.9
|
Use of Proceeds
|
22
|
|
6.10
|
Hazardous Materials; Remediation
|
23
|
|
6.11
|
Power of Attorney
|
23
|
|
6.12
|
Further Assurances
|
23
|
|
6.13
|
Post-Closing Obligations
|
24
|
|
6.14
|
Disclosure Schedule Updates
|
24
|
|
6.15
|
Intellectual Property and Licensing
|
24
|
|
6.16
|
Regulatory Reporting and Covenants
|
25
|
|
6.17
|
Pensions
|
26
|
|
6.18
|
People with Significant Control regime.:
|
26
|
|
7.
|
NEGATIVE COVENANTS
|
26
|
|
7.1
|
Dispositions
|
26
|
|
7.2
|
Changes in Business, Management, Ownership or Business Locations
|
27
|
|
7.3
|
Mergers or Acquisitions
|
27
|
|
7.4
|
Indebtedness
|
27
|
|
7.5
|
Encumbrance
|
27
|
|
7.6
|
Maintenance of Collateral Accounts
|
27
|
|
7.7
|
Distributions; Investments; Margin Stock
|
27
|
|
7.8
|
Transactions with Affiliates
|
28
|
|
7.9
|
Subordinated Debt
|
28
|
|
7.10
|
Compliance
|
28
|
|
7.11
|
Amendments to Organization Documents and Material Agreements
|
28
|
|
7.12
|
Compliance with Anti-Terrorism Laws
|
29
|
|
7.13
|
Fiscal Year; Fiscal Quarter
|
29
|
|
8.
|
RESERVED
|
29
|
|
9.
|
FINANCIAL COVENANTS
|
29
|
|
9.1
|
Minimum Net Revenue
|
29
|
|
9.2
|
Evidence of Compliance
|
29
|
|
10.
|
EVENTS OF DEFAULT
|
29
|
|
10.1
|
Events of Default
|
29
|
|
10.2
|
Rights and Remedies
|
33
|
|
10.3
|
Notices
|
34
|
|
10.4
|
Protective Payments
|
34
|
14.12
|
Advances; Payments; Non-Funding Lenders
|
48
|
|
14.13
|
Miscellaneous
|
48
|
|
15.
|
GUARANTY
|
49
|
|
15.1
|
Guaranty
|
49
|
|
15.2
|
Payment of Amounts Owed
|
49
|
|
15.3
|
Certain Waivers by Guarantor
|
49
|
|
15.4
|
Guarantor’s Obligations Not Affected by Modifications of Financing Documents
|
51
|
|
15.5
|
Reinstatement; Deficiency
|
51
|
|
15.6
|
Subordination of Borrower’s Obligations to Guarantors; Claims in Bankruptcy
|
52
|
|
15.7
|
Maximum Liability
|
52
|
|
15.8
|
Guarantor’s Investigation
|
52
|
|
15.9
|
Termination
|
53
|
|
16.
|
DEFINITIONS
|
53
|
1. |
ACCOUNTING AND OTHER TERMS
|
2. |
CREDIT FACILITIES AND TERMS
|
3. |
CONDITIONS OF CREDIT EXTENSIONS
|
4. |
CREATION OF SECURITY INTEREST
|
5.
|
REPRESENTATIONS AND WARRANTIES
|
6.
|
AFFIRMATIVE COVENANTS
|
7.
|
NEGATIVE COVENANTS
|
8. |
RESERVED
|
9. |
FINANCIAL COVENANTS
|
10.
|
EVENTS OF DEFAULT
|
(A) |
is unable or admits inability to pay its debts as they fall due;
|
(B) |
suspends or threatens to suspend making payments on any of its debts; or
|
(C) |
by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors (excluding any Lender in its capacity as such) with a view to rescheduling any of its indebtedness.
|
11. |
NOTICES
|
12. |
CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER
|
13. |
GENERAL PROVISIONS
|
14. |
AGENT
|
15. |
GUARANTY
|
16. |
DEFINITIONS
|
(1) |
Midatech Pharma plc
CRN 09216368 with registered office 65 Innovation Drive, Milton Park, Milton, Abingdon, Oxfordshire, OX14 4RQ (“the Company”) and
Midatech Limited
CRN 04097593 with registered office 65 Innovation Drive, Milton Park, Milton, Abingdon, Oxfordshire, OX14 4RQ and
Midatech Pharma (Wales)
Limited
CRN 04929486 with registered office Oddfellows House, 19 Newport Road, Cardiff, CF24 0AA and such other companies as shall pursuant to Clause 15 of this Deed subsequently enter into a deed of adherence on the one part; and
|
(2) |
RM2 Trustees Limited
CRN 03363760 with registered office Sycamore House, 86-88 Coombe Road, New Malden, KT3 4QS (“the Original Trustee”) on the other part.
|
(a) |
The Company has decided to establish a trust, to be constituted as an employees’ share scheme under section 1166 of the Companies Act 2006, on the terms of this Deed
|
(b) |
The Original Trustees has agreed to act as the first Trustee of the trust created by this Deed, and on the terms of this Deed
|
1. |
PURPOSE
|
2. |
STATUS
|
3. |
DECLARATION OF TRUST
|
3.1. |
The Company and the Trustees have agreed that all the Shares and other assets which are issued to or transferred to the Trustees are to be held in the trusts declared by this Deed, and subject to the terms of the Rules. When Shares or assets are transferred to the Trustees by the Company with the intention of being held as part of the Plan they shall be held upon the trusts and provisions of this Deed and the Rules.
|
3.2. |
The Trustees shall hold the Trust Fund upon the following trusts namely:
|
(a) |
as to Shares which have not been awarded to Participants (“Unawarded Shares”) upon trust during the Trust Period to allocate those Shares in accordance with the terms of this Deed and the Rules,
|
(b) |
as to Shares which have been awarded to a Participant (“Plan Shares”) upon trust for the benefit of that Participant on the terms and conditions set out in the Rules,
|
(c) |
as to Partnership Share Money upon trust to purchase Shares for the benefit of the contributing Qualifying Employee in accordance with the Rules, provided that the Trustees shall be under no duty or obligation to deposit such funds in an interest-bearing account, and
|
(d) |
as to other assets (“Surplus Assets”) upon trust to use them to purchase further Shares to be held on the trusts declared in (a) above, at such time during the Trust Period and on such terms as the Trustees in their absolute discretion think fit. The income of Unawarded Shares and Surplus Assets shall be accumulated by the Trustees and added to, and held upon the trusts applying to, Surplus Assets.
|
3.3. |
The income of Plan Shares and Partnership Share Money shall be dealt with in accordance with the Rules.
|
3.4. |
The perpetuity period in respect of the trusts and powers declared by this Deed and the Rules shall be the period of 125 years from the date of this Deed.
|
4. |
NUMBER OF TRUSTEES
|
5. |
INFORMATION SUPPLIED BY THE COMPANY
|
6. |
RESIDENCE & ROLE OF TRUSTEES
|
6.1. |
Every Trustee shall be resident in the United Kingdom. The Company shall immediately remove any Trustee who ceases to be so resident and, if necessary, appoint a replacement.
|
6.2. |
The Trustees shall supply to the Company on request from time to time by the Company such information relating to the Plan and individual entitlements of Participants under the Plan as it may reasonably require.
|
7. |
CHANGE OF TRUSTEES
|
7.1. |
The Company has the power to appoint or remove any Trustee for any reason. The change of Trustee shall be effected by executing a deed. Any Trustee may resign on three months’ notice given in writing to the Company, provided that there will be at least two Trustees or a corporate Trustee immediately after the retirement. Subject to the following provisions of this clause, the Company shall have the power exercisable by deed to remove any company as Trustee of this Plan and to appoint a new Trustee in the place of such person provided that the power conferred by this clause shall only be operative and capable of taking effect from the later of the date on which the first mentioned Trustee receives notice in writing of such removal and the date on which new Trustee accepts office as such new Trustee.
|
7.2. |
An outgoing Trustee shall execute all such transfers or other documents, and shall do all such acts or things as may be necessary for vesting the Trust Fund in the continuing or new Trustees or placing it under their control and shall be bound and entitled to assume that any new Trustee is a proper person to have been appointed in accordance with this clause.
|
7.3. |
A continuing or new Trustee shall cause the endorsement of a memorandum on this Deed as to the trusteeship in accordance with the provisions contained in Clause 7.4 provided that where an outgoing Trustee is liable as a Trustee for any duties or taxes then that Trustee shall not be bound so to transfer the Trust Fund unless reasonable security is provided for indemnifying the outgoing Trustee and that Trustee’s estate against such liability.
|
7.4. |
On every change in the trusteeship a memorandum shall be endorsed on or permanently annexed to this Deed stating the name of the Trustees for the time being and signed by the continuing or new Trustee.
|
7.5. |
Any person dealing with the affairs of this Plan shall be entitled to rely upon any memorandum endorsed on this Deed in accordance with Clause 7.4 (or, if there is more than one such memorandum, the latest) as sufficient evidence that the trustee named therein is duly appointed as a Trustee.
|
8. |
INVESTMENT AND DEALING WITH TRUST ASSETS
|
8.1. |
Save as otherwise provided for by the Plan (subject to any applicable law, rule or regulation including any regulation relating to insider trading) the Trustees shall not sell or otherwise dispose of Plan Shares.
|
8.2. |
The Trustees shall obey any directions given by a Participant in accordance with the Rules in relation to his Plan Shares and any rights and income relating to those Shares. In the absence of any such direction, or provision by the Plan, the Trustees shall take no action.
|
8.3. |
Subject to Clause 8.4 and any express right of a Participant under this Deed or the Rules to direct the Trustees to take (or not to take) any action relating to that Participant’s Plan Shares, in relation to any matter on which the Trustees have a right or opportunity as a member of the Company to vote or to exercise any other right in respect of Plan Shares held by them on behalf of Participants, the Trustees may, but shall not be obliged to (unless the Company directs the Trustees to in the event of a compromise, a general offer, a takeover or a cash offer (as those terms are defined in Rule 10)), seek irrevocable directions from each Participant as to the manner in which the Trustees should exercise such rights in respect of a Participant’s Plan Shares.
|
8.4. |
The Trustees shall not be entitled to vote on a show of hands on a particular resolution in respect of Plan Shares held on behalf of Participants unless all directions received from those Participants who have given directions in respect of that resolution are identical. The Trustees shall not be under any obligation to call for a poll (unless the Company directs the Trustees to in the event of a compromise, a general offer, a takeover or a cash offer (as those terms are defined in Rule 10)), and in the event of any poll the Trustees shall in relation to Plan Shares vote only in accordance with the directions of Participants. The Trustees shall not exercise any vote (whether on a show of hands or on a poll) in respect of Unawarded Shares.
|
8.5. |
The Company and Participating Companies shall, as soon as practicable after deduction from Salary, pass the Partnership Share Money to the Trustees who will put the money into an account with:
|
(a) |
a person falling within section 991(2)(b) of the Income Tax Act 2007;
|
(b) |
a building society; or
|
(c) |
a firm falling within section 991(2)(c) of the Income Tax Act 2007,
|
8.6. |
The Trustees may either retain or sell Unawarded Shares at their absolute discretion. The proceeds of any sale of Unawarded Shares shall form part of Surplus Assets.
|
8.7. |
The Trustees shall, unless otherwise directed by the Company, waive any right to dividend payments in respect of Unawarded Shares or securities and the Trustees shall not be liable for any loss to the Trust Fund as a result of such waiver.
|
8.8. |
The Trustees shall have all the powers of investment of a beneficial owner in relation to Surplus Assets.
|
8.9. |
The Trustees shall not be under any liability to the Participating Companies or to current or former Qualifying Employees by reason of a failure to diversify investments, which results from the retention of Plan or Unawarded Shares.
|
8.10. |
The Trustees may delegate powers, duties or discretions to any persons employed by the Corporate Trustee, and on any terms. No delegation made under this clause shall divest the Trustees of their responsibilities under this Deed or under the Schedule.
|
8.11. |
The Trustees may allow any Shares to be registered in the name of an appointed nominee provided that such Shares shall be registered in a segregated and designated account. Such registration shall not divest the Trustees of their responsibilities under this Deed or the Schedule.
|
8.12. |
The Trustees may at any time, and shall if the Company so directs, revoke any delegation made under this clause or require any Plan assets held by another person to be returned to the Trustees, or both.
|
8.13. |
The Trustees may, for the purpose of enabling the Trustees or any administrator to exercise the powers and duties of this Trust, seek and act upon the advice of any such firm of legal or other professional advisers and may pay for such advice out of the Trust Fund provided that no such advice shall be sought by the Trustees or the administrator on any occasion without the prior approval (which shall not be unreasonably withheld) of the Company as to the choice of such adviser and the terms on which such advice shall be sought.
|
9. |
GENERAL TRUSTEES OBLIGATIONS AND POWERS
|
9.1. |
The Trustees shall join with the Company in establishing and operating the Plan.
|
9.2. |
For as long as the Trustees hold Plan Shares:
|
(a) |
the Trust Fund shall only be applied, and the Trust shall only be used, for the purpose of giving effect to the Plan;
|
(b) |
the Trustees shall expend any contribution received from any Constituent Company for any one or more of the following purposes:
|
(i) |
the acquisition of Shares for the purposes of the Plan;
|
(ii) |
the payment of stamp duty or stamp duty reserve tax (if any) on the acquisition of Shares for the purposes of the Plan or when Shares are acquired for or awarded to Participants;
|
(iii) |
the repayment of sums borrowed in connection with the Plan;
|
(iv) |
the payment of interest on sums borrowed in connection with the Plan;
|
(v) |
satisfying any obligations of the Trustees under the Plan; and
|
(vi) |
paying expenses of the Trustees in connection with the Plan (including the fees of the Trustees, any administrator of the Plan and any professional adviser retained by the Trustees in relation to the operation of the Plan).
|
9.3. |
The Trustees shall hold and deal with all Plan Shares awarded to or acquired on behalf of any Participant only in accordance with the Rules.
|
9.4. |
Subject to clause 9.5, the Trustees shall dispose of a Participant's Plan Shares or otherwise deal with any of those Shares or any rights conferred on the Participant only in accordance with directions given by or on behalf of the Participant.
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9.5. |
If a liability to income tax or employee NICs arises in relation to a Participant's Plan Shares for which the Trustees is liable to account through PAYE, the Trustees may dispose of such number of that Participant's Plan Shares as will produce sufficient net sale proceeds to meet that liability to income tax and employee NICs.
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9.6. |
The Trustees shall have the power to borrow money for the purpose of:
|
(a) |
acquiring Shares; and
|
(b) |
paying any other expenses properly incurred by the Trustees in administering the Plan.
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9.7 |
The Trustees shall respond promptly to any notice or enquiry made by law or under the rules and regulations of the London Stock Exchange, Financial Conduct Authority or other relevant regulator in relation to the Plan.
|
9.8 |
The Trustees shall not hold or acquire more than 5 per cent. of the ordinary share capital of the Company in issue from time to time without the prior consent of the Company.
|
9.9 |
The Trustee shall alert the Company to any changes in legislation that may have a bearing on the operation of the Plan.
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10. |
TRUSTEES OBLIGATIONS UNDER THE PLAN
|
10.1. |
After Free and/or Matching Shares have been awarded to a Participant, the Trustees shall, within such time period as is usual practice under and consistent with similar plans made under the Schedule, give the Participant a notice stating:
|
(a) |
the number and description of those Shares;
|
(b) |
if the Shares are subject to any restriction, details of the restriction;
|
(c) |
their Initial Market Value on the date of Award; and
|
(d) |
the Holding Period applicable to them.
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10.2. |
After any Partnership Shares have been acquired for a Participant, the Trustees shall, within such time period as is usual practice under and consistent with similar plans made under the Schedule, give the Participant a notice stating:
|
(a) |
the number and description of those Shares;
|
(b) |
if the Shares are subject to any restriction, details of the restriction;
|
(c) |
the amount of money applied by the Trustees in acquiring those shares on behalf of the Participant; and
|
(d) |
the Market Value in accordance with which the number of Shares awarded to the employee was determined.
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10.3. |
After Dividend Shares have been acquired on behalf of a Participant, the Trustees shall, within such time period as is usual under and consistent with similar plans made under the Schedule, give the Participant a notice stating:
|
(a) |
the number and description of those Shares;
|
(b) |
if the Shares are subject to any restriction, details of the restriction;
|
(c) |
the Market Value on the Acquisition Date;
|
(d) |
the Holding Period applicable to them; and
|
(e) |
any amount not reinvested and carried forward for acquisition of further Dividend Shares.
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10.4. |
Where any foreign cash dividend is received in respect of Plan Shares held on behalf of a Participant, the Trustees shall give the Participant notice of the amount of any foreign tax deducted from the dividend before it was paid.
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10.5. |
During the Holding Period the Trustees shall not dispose of any Free, Matching or Dividend Shares (whether by transfer to the employee or otherwise) except as allowed by the following paragraphs of the Schedule:
|
(a) |
paragraph 37 (power of Trustees to accept general offers etc.);
|
(b) |
paragraph 77 (power of Trustees to raise funds to subscribe for rights issue);
|
(c) |
paragraph 79 (meeting PAYE obligations); and
|
(d) |
paragraph 90(5) (termination of plan: early removal of shares with participant's consent).
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10.6. |
The Trustees may dispose of a Participant’s Shares or accept a sum from the Participant in order to meet a PAYE obligation in any of the circumstances provided in sections 510-512 of ITEPA 2003 (PAYE: shares ceasing to be subject to the plan).
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10.7. |
The Trustees shall pay over to the Participant as soon as is practicable, any money or money's worth received by them in respect of or by reference to any shares, other than new shares within paragraph 87 of the Schedule (consequences of company reconstructions).
|
(a) |
the provisions of Part 8 of the Schedule (dividend reinvestment);
|
(b) |
the Trustees’ obligations under sections 510-514 of ITEPA 2003 (PAYE: obligations to make payments to employer etc); and
|
(c) |
the Trustees’ PAYE obligations.
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10.8. |
If any offer, compromise, arrangement or scheme is made which affects the Free Shares or Matching Shares the Trustees shall notify the Participants. Each Participant may direct how the Trustees shall act in relation to that Participant’s Plan Shares. In the absence of any direction, the Trustees shall take no action.
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10.9. |
The Trustees shall maintain records of Participants who have participated in one or more other share incentive plans approved under the Schedule established by the Company or a Connected Company.
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11. |
POWER OF TRUSTEES TO RAISE FUNDS TO SUBSCRIBE FOR A RIGHTS ISSUE
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12. |
POWER TO AGREE MARKET VALUE OF SHARES
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13. |
PERSONAL INTEREST OF TRUSTEES
|
(a) |
participation in the Plan as a Qualifying Employee;
|
(b) |
ownership, in a beneficial or fiduciary capacity, of any shares or other securities in any Participating Company;
|
(c) |
being a director or employee of any Participating Company; or
|
(d) |
being a creditor, or being in any other contractual relationship with any such Company.
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14. |
TRUSTEES’ MEETINGS
|
15. |
SUBSIDIARY COMPANIES
|
16. |
EXPENSES OF PLAN
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17. |
LIABILITY AND INDEMNITY
|
17.1. |
The Company shall indemnify each of the Trustees and Trustee Directors against any expenses, liabilities and losses which are incurred through acting as a Trustee of the Plan and which cannot be recovered from the Trust Fund. This does not apply to expenses, liabilities and losses which are incurred through any breach by the Trustees of the terms of this Deed or of any engagement letter for the services of a Trustee entered into between the Company and the Trustee, or for negligence or fraud of the Trustee.
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17.2. |
No decision of or exercise of a power by the Trustee shall be invalidated or questioned on the grounds that a Trustee or any Trustee Director had an interest, in a personal or fiduciary capacity, in the result of the decision or in the exercise of the power, and any Trustee or Trustee Director may vote in respect of a decision or exercise of a power, and be taken into account for the purposes of a quorum, notwithstanding that he has such an interest.
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17.3. |
Neither the Trustees nor any Trustee Director shall be under any obligation to become a director or officer or to interfere or otherwise participate in the management of the Company or any other Participating Company notwithstanding that the Trustees have (whether directly or indirectly) a substantial holding in or control of such company or body.
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17.4. |
The Trustees shall not be under any obligation to seek information about the affairs of the Company or any other Participating Company other than that normally available or supplied to a holder of the relevant proportion of the then issued shares or debentures of such a company or body (including the payment or non-payment of dividends).
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17.5. |
Neither the Trustees nor the Company shall be liable to the Participant (or any other person) for any loss occasioned by delay on the part of the Company or the Trustees in giving effect to a direction or procuring a sale or transfer of any of a Participant’s Plan Shares (whether or not such delay is occasioned by the Company’s obligations to comply with the requirements of a Recognised Stock Exchange or otherwise).
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17.6. |
The Trustees shall not be liable for any loss to the capital or income of the Trust Fund occasioned by their failure to interfere or otherwise participate in or enquire into the affairs of such a company or body.
|
17.7. |
Subject to the provisions of Clause 8, every power or discretion conferred on the Trustees shall be an absolute and uncontrolled power or discretion and:
|
(a) |
neither a Trustee nor any Trustee Director shall be held liable for any loss or damage occurring as a result of the Trustee concurring, or refusing or failing to concur, in an exercise or proposed exercise of any such power or discretion; and
|
(b) |
neither the Trustees nor any Trustee Director shall be obliged to give any Participant (or any person who would, but for the exercise or non-exercise of any such power or discretion, be a Participant) any reason nor justification for any exercise or non-exercise of any such power or discretion.
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17.8. |
A Trustee who carries on a profession or business may charge for services rendered on a basis agreed with the Company. A firm or company in which a Trustee is interested or by which he is employed may also charge for services rendered on this basis.
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17.9. |
The provisions of sections 37 and 39 of the Trustee Act 1925 shall apply hereto as if any reference therein to a trust corporation were a reference to a company or body corporate carrying on trust business.
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18. |
COSTS AND LIEN OF TRUSTEES
|
18.1. |
All costs, charges and expenses of, and incidental to, the preparation, operation and determination of the Trust or the management of the Trust Fund (including remuneration of the Trustees and any stamp duty and stamp duty reserve tax payable) shall be payable by the Constituent Companies in such proportions as the Company shall determine.
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18.2. |
The Trustee’s lien over the Trust Fund in respect of liabilities incurred by them in the performance of their duties (including the repayment of borrowed money and tax liabilities) shall be enforceable subject to the following restrictions:
|
(a) |
the Trustees shall not be entitled to resort to Partnership Share Money for the satisfaction of any of their liabilities; and
|
(b) |
the Trustees shall not be entitled to resort to Plan Shares for the satisfaction of their liabilities except to the extent that this is permitted by the Plan.
|
19. |
ACCEPTANCE OF GIFTS
|
20. |
AMENDMENTS TO THE PLAN
|
(a) |
no amendment
which would adversely prejudice to a material extent the rights attaching to any Plan Shares awarded to or acquired by Participants may be made nor may any alteration be made giving to Participating Companies a beneficial interest in Plan Shares; and
|
(b) |
no amendment may be made as a result of which the Plan ceases to be a Qualifying Plan; and
|
(c) |
if, following registration of the Plan with HM Revenue & Customs at the time of an amendment or addition, any amendment or addition is made to a “key feature” (as defined in paragraph 81B(8) of the Schedule) of the Plan an appropriate declaration shall be made in accordance with paragraph 81B(6) of the Schedule.
|
21. |
TERMINATION OF THE PLAN
|
21.1. |
The Plan shall terminate:
|
(a) |
in accordance with a Plan Termination Notice issued by the Company to the Trustees under paragraph 89 of the Schedule; or
|
(b) |
if earlier, on the expiry of the Trust Period.
|
21.2. |
The Company shall immediately upon executing a Plan Termination Notice provide a copy of the notice to the Trustees, HM Revenue & Customs and each individual who has Plan Shares or who has entered into a Partnership Share Agreement which was in force immediately before the Plan Termination Notice was issued.
|
21.3. |
Upon the issue of a Plan Termination Notice or upon the expiry of the Trust Period paragraph 90 of the Schedule shall have effect.
|
21.4. |
Any Shares or other assets which remain undisposed of after the requirements of paragraph 90 of the Schedule have been complied with shall be held by the Trustees upon trust to pay or apply them to or for the benefit of the Participating Companies as at the termination date in such proportion, having regard to their respective contributions, as the Trustees shall in their absolute discretion think appropriate.
|
22. |
REFERENCES TO TRUSTEE TO INCLUDE REFERENCES TO ADMINISTRATOR
|
22.1. |
References in this Plan to anything done or to be done by or to the Trustees shall be read and construed as including anything done or to be done by or to an administrator pursuant to the powers and duties delegated to the administrator by the Trustees pursuant to Clause 8.12 of the Deed.
|
22.2. |
Other than as specified in Clause 22.1, this Deed is personal to the parties hereto and no party shall assign, transfer, mortgage, charge, subcontract, declare a trust over or deal in any other manner with any of its rights and obligations under this Deed.
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Witness signature
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Director, Midatech Pharma plc
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Witness name
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and address
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Occupation:
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Witness signature
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Director, Midatech Limited
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Witness name
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and address
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Occupation:
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Witness signature
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Director, Midatech Pharma (Wales) Limited
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Witness name
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and address
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Occupation:
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Director, RM2 Trustees Limited, Trustee
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Director, RM2 Trustees Limited, Trustee
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1. |
DEFINITIONS
|
2. |
PURPOSE OF THE PLAN
|
3. |
ELIGIBILITY OF INDIVIDUALS
|
4. |
PARTICIPATION ON SAME TERMS
|
5. |
FREE SHARES
|
6. |
PARTNERSHIP SHARES
|
7. |
MATCHING SHARES
|
8. |
DIVIDEND SHARES
|
9. |
COMPANY RECONSTRUCTIONS
|
10. |
PROVISION FOR FORFEITURE
|
11. |
PLAN SHARES CEASING TO BE SUBJECT TO THE PLAN
|
12. |
RIGHTS ISSUES
|
13. |
RELATIONSHIP WITH EMPLOYMENT CONTRACTS
|
14. |
MISCELLANEOUS
|
1. |
DEFINITIONS
|
1.1 |
The following words and expressions have the following meanings:
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“Accumulation Period”
|
in relation to Partnership Shares, the period during which the Trustees accumulate a Qualifying Employee’s Partnership Share Money before acquiring Partnership Shares or repaying it to the employee
|
“Acquisition Date”
|
(a)
in relation to Partnership Shares, where there is no Accumulation Period, the meaning given by paragraph 50(4) of the Schedule; and
(b)
in relation to Partnership Shares, where there is an Accumulation Period, the meaning given by paragraph 52(5) of the Schedule
(c)
in relation to Dividend Shares, the meaning given by paragraph 66(4) of the Schedule
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“AIM”
|
the Alternative Investment Market
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“Associated Company”
|
the same meaning as in paragraph 94 of the Schedule
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“Award Date”
|
in relation to Free and Matching Shares, the date on which such Shares are awarded to Participants
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“Award”
|
(a)
in relation to Free and Matching Shares, the appropriation of Free and Matching Shares to Participants in accordance with the Plan; and
(b)
in relation to Partnership Shares and Dividend Shares, the acquisition of Partnership Shares and Dividend Shares on behalf of Qualifying Employees in accordance with the Plan
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“Capital Receipt”
|
the same meaning as in section 502 of ITEPA 2003
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“Close Company”
|
the same meaning as in section 989 of ITA 2007
|
“Company”
|
Midatech Pharma plc, CRN 09216368
|
“Connected Company”
|
the same meaning as in paragraph 18(3) of the Schedule
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“Control”
|
the same meaning as in section 719 of ITEPA 2003
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“CTA 2010”
|
the Corporation Tax Act 2010
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“Dealing Day”
|
a day on which the Recognised Stock Exchange is open for the transaction of business
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“Deed”
|
Trust Deed of The Midatech Pharma Share Incentive
Plan
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“Directors”
|
the board of directors of the Company (or a duly authorised committee)
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“Dividend Shares”
|
Shares acquired on behalf of a Participant from reinvestment of dividends under Rule 8 of the Plan and which are subject to the Plan
|
“Forfeit”
|
the automatic transfer of the beneficial ownership of Free Shares or Matching Shares from a Participant to the Trustees for no consideration and the term “Forfeiture” shall be construed accordingly
|
“Free Share
Agreement” |
an agreement in the terms set out in Appendix B (and as amended by the Directors from time to time)
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“Free Shares”
|
Shares awarded under Rule 5 of the Plan which are subject to the Plan
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“Group Plan”
|
the Plan as established by Midatech Pharma plc and extending to its Subsidiaries which are Participating Companies
|
“Holding Period”
|
(a)
in relation to Free Shares, the period specified by the Company as mentioned in Rule 5.12;
(b)
in relation to Matching Shares, the period specified by the Company as mentioned in Rule 7.5; and
(c)
in relation to Dividend Shares, the period of 3 years from the Acquisition Date
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“Initial Market Value”
|
the Market Value of a Share on an Award Date. Where the Share is subject to a restriction or risk of Forfeiture, the Market Value shall be determined without reference to that restriction or risk
|
“ITA 2007”
|
the Income Tax Act 2007
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“ITEPA 2003”
|
the Income Tax (Earnings and Pensions) Act 2003
|
“ITTOIA 2005”
|
the Income Tax (Trading and Other Income) Act 2005
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“Market Value”
|
in relation to a Share on a given date:
(a)
if shares in the Company of the same class as the Shares are then quoted on a Recognised Stock Exchange or AIM and
(i)
all of the Shares in respect of which an Award is to be made are purchased in the market over 5 or fewer consecutive Dealing Days ending on the Award Date (or in the case of Partnership Shares and Dividend Shares, the Acquisition Date), the average of the prices at which such shares were so purchased (and for these purposes an Award of Matching Shares and the corresponding acquisition of Partnership Shares with which they are matched, shall be treated as one award of Shares); or
(ii)
if all the Shares are not so purchased, the closing quotation of a Share on such Recognised Stock Exchange or AIM on the Dealing Day immediately preceding the date of the Award; and
(b)
in any other case, determined in accordance with the provisions of Part VIII of the Taxation of Chargeable Gains Act 1992 and agreed for the purposes of the Plan with HM Revenue & Customs Shares and Assets Valuation on or before that day;
PROVIDED that the market value of Shares subject to a restriction shall be determined as if they were not subject to the restriction
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“Matching Shares”
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Shares awarded under Rule 7 of the Plan and which are subject to the Plan
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“NICs”
|
National Insurance Contributions
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“Participant”
|
an individual who has received under the Plan an Award of Free Shares, Matching Shares or Partnership Shares, or on whose behalf Dividend Shares have been acquired
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“Participating
Company” |
the Company and such of its Subsidiaries as have executed deeds of adherence to the Plan under Clause 16 of the Trust Deed
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“Partnership Shares”
|
Shares awarded under Rule 6 of the Plan and which are subject to the Plan
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“Partnership Share
Agreement” |
an agreement in the terms set out in Appendix A and entitled “Partnership Share Agreement” (and as amended by the Directors from time to time)
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“Partnership Share
Money” |
money deducted from a Qualifying Employee’s Salary pursuant to a Partnership Share Agreement and held by the Trustees to acquire Partnership Shares or to be returned to such a person
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“Performance
Allowance” |
the criteria for an Award of Free Shares where:
(a)
whether Shares are awarded; or
(b)
the number or value of Shares awarded
is conditional on performance targets being met
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“Plan”
|
The Midatech Pharma
Share Incentive
Plan
|
“Plan Shares”
|
(a)
Free Shares, Matching Shares or Partnership Shares awarded to Participants;
(b)
Dividend Shares acquired on behalf of Participants; and
(c)
shares in relation to which paragraph 87(1) (consequences of company reconstructions) of the Schedule applies
that remain subject to the Plan
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“Plan Termination
Notice” |
a notice issued under paragraph 89 of the Schedule
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“Qualifying Company”
|
the same meaning as in paragraph 17 of the Schedule
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“Qualifying Corporate
Bond” |
the same meaning as in section 117 of the Taxation of Chargeable Gains Act 1992
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“Qualifying Employee”
|
an employee who must be invited to participate in an award in accordance with Rule 3.3 and any employee who the Company has invited in accordance with Rule 3.4
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“Qualifying Period”
|
(a)
in the case of Free Shares such period as the Directors shall decide in relation to each Award, such period not exceeding 18 months ending with the date on which the Award is made
(b)
in the case of Partnership Shares and Matching Shares where there is an Accumulation Period such period as the Directors shall decide in relation to each Award, such period not exceeding 6 months ending with the start of the Accumulation Period
(c)
in the case of Partnership Shares and Matching Shares where there is no Accumulation Period, such period as the Directors shall decide in relation to each Award, such period not exceeding 18 months ending with the deduction of Partnership Share Money relating to the Award
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“Qualifying Plan”
|
a Share Incentive Plan that meets and continues to meet the requirements of the Schedule
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“Recognised Stock
Exchange” |
has the meaning given to it by section 1005 of ITA 2007
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“Redundancy”
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the same meaning as in the Employment Rights Act 1996
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“Relevant Employment”
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employment by the Company or any Associated Company
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“Rules”
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the rules of the Plan
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“Salary”
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the same meaning as in paragraph 43(4) of the Schedule
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“Schedule”
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Schedule 2 to ITEPA 2003
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“Shares”
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Ordinary Shares of £0.00005 each in the capital of the Company which comply with the conditions set out in paragraph 25 of the Schedule and which are subject to the rights and restrictions as set out in the Company’s Articles of Association.
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“SIP”
|
a share incentive plan within the meaning of section 488(4) of ITEPA 2003
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“Subsidiary”
|
any company which is for the time being under the Control of the Company
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“Tax Year”
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a year beginning on 6 April and ending on the following 5 April
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“Trustees”
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the Trustees or Trustee of the Plan, including a corporate Trustee
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“Trustee Director”
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a director or officer of a corporate Trustee
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“Trust Fund”
|
all assets transferred to the Trustees to be held on the terms of the Trust Deed and the assets from time to time representing such assets, including any accumulations of income
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“the Trust Period”
|
the period of 125 years beginning with the date of the Deed
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1.2 |
References to any Act, or Part, Chapter, or section (including ITEPA 2003, ITTOIA 2005, ITA 2007 and CTA 2010) shall include any statutory modification, amendment or re-enactment of that Act, for the time being in force.
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1.3 |
Words of the feminine gender shall include the masculine and vice versa and words in the singular shall include the plural and vice versa unless, in either case, the context otherwise requires or it is otherwise stated.
|
2. |
PURPOSE OF THE PLAN
|
3. |
ELIGIBILITY OF INDIVIDUALS
|
3.1 |
Individuals are eligible to participate in an Award only if:
|
(a) |
they are employees of a Participating Company;
|
(b) |
they have been employees of a Qualifying Company at all times during any Qualifying Period.
|
(c) |
they are eligible on the date(s) set out in paragraph 14(1) of the Schedule; and
|
(d) |
they do not fail to be eligible under Rule 3.2
|
3.2 |
Individuals are not eligible to participate in an Award of Free Shares, Partnership Shares or Matching Shares in any Tax Year if in that Tax Year they are at the same time participating in an award under another plan established by the Company or a Connected Company and approved under the Schedule, or if they would have received such an award but for their failure to meet a performance target (see Rule 5.5). If the Qualifying Employee participates in an Award in a Tax Year in which he has already participated in an award of shares under one or more share incentive plans approved under the Schedule and established by the Company or a Connected Company then the limits specified in Rule 5.4 and 6.3 apply as if the Plan and the other plan or plans were a single plan as required by paragraph 18A of the Schedule.
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3.3 |
Individuals shall be eligible to receive an Award of Shares under the Plan if they meet the requirements in Rule 3.1 and are chargeable to income tax in respect of their employment as a UK resident taxpayer (within the meaning of paragraph 8(2) of the Schedule). In this case they shall be invited to participate in any Awards of Free Shares, Partnership Shares or Matching Shares, and acquisitions of Dividend Shares, as are set out in the Plan.
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3.4 |
The Company may also invite any employee who meets the requirements in Rule 3.1 to participate in any Award of Free Shares, Partnership Shares or Matching Shares, and acquisitions of Dividend Shares, as are set out in the Plan.
|
4. |
PARTICIPATION ON SAME TERMS
|
4.1 |
Every Qualifying Employee
shall be invited to participate in an Award
on the same terms. All who do participate in an Award shall do so on the same terms.
|
4.2 |
The Company may make an Award of Free Shares to Qualifying Employees by reference to their remuneration, length of service or hours worked.
|
4.3 |
The Company may make an Award of Free Shares to Qualifying Employees by reference to their performance as set out in Rule 5.5.
|
4.4 |
The Company shall decide if/when it may wish to offer an Award to Qualifying Employees and the Company is not obliged to make any such offer.
|
5. |
FREE SHARES
|
5.1 |
If the Company invites employees to participate in an award of Free Shares then every Qualifying Employee shall enter into an agreement with the Company (a "Free Share Agreement”) in the terms of Appendix B to these Rules.
|
5.2 |
The Trustees, acting with the prior consent of the Company, may from time to time award Free Shares.
|
5.3 |
The number of Free Shares to be awarded by the Trustees to each Qualifying Employee on an Award Date shall be determined by the Company in accordance with this Rule and Rule 4.
|
5.4 |
The Initial Market Value of the Free Shares awarded to a Qualifying Employee in any Tax Year shall not exceed £3,600 (or such other amount as is stated in paragraph 35(1) of the Schedule).
|
5.5 |
The Company may stipulate that the number of Free Shares (if any) to be awarded to each Qualifying Employee on a given Award Date shall be determined by reference to Performance Allowances.
|
5.6 |
If Performance Allowances are used, they shall apply to all Qualifying Employees.
|
5.7 | (a) | Performance Allowances shall be determined by reference to such fair and objective criteria (performance targets) relating to business results as the Company shall determine over such period as the Company shall specify; |
(b) |
performance targets must be set for performance units of one or more employees; and
|
(c) |
for the purposes of an Award of Free Shares an employee must not be a member of more than one performance unit.
|
5.8 |
Where the Company decides to use Performance Allowances it shall, as soon as reasonably practicable:
|
(a) |
notify each employee participating in the Award
of the performance targets and measures which, under the Plan, shall be used to determine the number or value of Free Shares awarded to him; and
|
(b) |
notify all Qualifying Employees of the Company or, in the case of a Group Plan, of any Participating Company, in general terms, of the performance targets and measures to be used to determine the number or value of Free Shares to be awarded to each Participant in the Award.
|
5.9 |
The Company shall determine the number of Free Shares (if any) to be awarded to each Qualifying Employee by reference to performance using Method 1 or Method 2. The same method shall be used for all Qualifying Employees for each Award.
|
5.10 |
By this Method:
|
(a) |
at least 20% of Free Shares awarded in any performance period shall be awarded without reference to performance;
|
(b) |
the remaining Free Shares shall be awarded by reference to performance; and
|
(c) |
the highest Award made to an individual by reference to performance in any period shall be no more than four times the highest Award to an individual without reference to performance.
|
· |
the Free Shares awarded without reference to performance (paragraph (a) above) shall be awarded on the same terms mentioned in Rule 4; and
|
· |
the Free Shares awarded by reference to performance (paragraph (b) above) need not be allocated on the same terms mentioned in Rule 4.
|
5.11 |
By this method:
|
(b) |
the Award of Free Shares to Qualifying Employees who are members of the same performance unit shall be made on the same terms, as mentioned in Rule 4; and
|
(c) |
Free Shares awarded for each performance unit shall be treated as separate Awards.
|
5.12 |
The Company shall, in relation to each Award Date, specify a Holding Period throughout which a Participant shall be bound by the terms of the Free Share Agreement.
|
5.13 |
The Holding Period shall, in relation to each Award, be a specified period of not less than 3 years nor more than 5 years, beginning with the Award Date, and shall be the same for all Participants who receive an Award at the same time. The Holding Period shall not be increased in respect of Free Shares already awarded under the Plan.
|
5.14 |
A Participant may during the Holding Period direct the Trustees:
|
(a) |
to accept an offer for any of their Free Shares if the acceptance or agreement shall result in a new holding being equated with those shares for the purposes of capital gains tax; or
|
(b) |
to accept an offer of a Qualifying Corporate Bond (whether alone or with other assets or cash or both) for their Free Shares if the offer forms part of such a general offer as is mentioned in paragraph (c); or
|
(c) |
to accept an offer of cash, with or without other assets, for their Free Shares if the offer forms part of a general offer which is made to holders of shares of the same class as their shares, or to holders of shares in the same company, and which is made in the first instance on a condition such that if it is satisfied the person making the offer shall have control of that company, within the meaning of sections 450 and 451 of CTA 2010; or
|
(d) |
to exercise a right, if in the case of a takeover offer (as defined in section 974 of the Companies Act 2006) there arises a right under section 983 of that Act to require the offeror to acquire the Participant’s Free Shares, or such of them as are of a particular class; or
|
(e) |
to agree to a transaction affecting their Free Shares or such of them as are of a particular class, if the transaction would be entered into pursuant to a compromise, arrangement or scheme applicable to or affecting;
|
(i) |
all of the ordinary share capital of the Company or, as the case may be, all the shares of the class in question; or
|
(ii) |
all the shares, or all the shares of the class in question, which are held by a class of shareholders identified otherwise than by reference to their employment or their participation in a plan approved under the Schedule.
|
5.15 |
The obligations of the Participant with respect to the Holding Period will end:
|
(a) |
if the Participant ceases to be in Relevant Employment and this may lead to Forfeiture of the Free Shares;
|
(b) |
if the Company terminates the Plan in accordance with clause 22 of the Deed and the Participant has consented to the transfer of the Shares to the Participant.
|
5.16 |
The Company may stipulate that the number of Free Shares awarded to a Qualifying Employee may be Forfeited in the circumstances set out in the Free Share Agreement provided that any provision for Forfeiture shall comply with the requirements of Rule 10.
|
6. |
PARTNERSHIP SHARES
|
6.1 |
The Company may at any time invite every Qualifying Employee to enter into an agreement with the Company (a “Partnership Share Agreement”).
|
6.2 |
The amount of Partnership Share Money deducted from an employee’s Salary shall not exceed £1,800 in a Tax Year (or such other amount as is stated in paragraph 46(1) of the Schedule). If there is an Accumulation Period, the Company may set a maximum monthly amount that may be deducted from an employee’s Salary and this shall be set before the start of any Accumulation Period and stated in the Partnership Share Agreement.
|
6.3 |
The amount of Partnership Share Money deducted in a Tax Year must not exceed 10% of the employee’s Salary for that Tax Year (or such other percentage as is stated in paragraph 46(2) of the Schedule).
|
6.4 |
Any amount deducted in excess of that allowed by Rule 6.3 or 6.4 shall be paid over to the employee, subject to both deduction of income tax under PAYE and NICs, as soon as practicable.
|
6.5 |
The minimum amount to be deducted under the Partnership Share Agreement on any occasion shall be the same in relation to all Partnership Share Agreements entered into in response to invitations issued on the same occasion. It shall not be greater than £10.
|
6.6 |
Every Partnership Share Agreement shall contain a notice under paragraph 48 of the Schedule.
|
6.7 |
The Company may specify the maximum number of Shares to be included in an Award of Partnership Shares.
|
6.8 |
The Partnership Share Agreement shall contain an undertaking by the Company to notify each Qualifying Employee of any restriction on the number of Shares to be included in an Award.
|
6.9 |
The notification in Rule 6.9 above shall be given:
|
(a) |
if there is no Accumulation Period, before the deduction of the Partnership Share Money relating to the Award; and
|
(b) |
if there is an Accumulation Period, before the beginning of the Accumulation Period relating to the Award.
|
6.10 |
The Trustees shall acquire Shares on behalf of the Qualifying Employee using the Partnership Share Money. They shall acquire the Shares on the Acquisition Date. The number of Shares awarded to each employee shall be determined in accordance with the Market Value of the Shares on that date.
|
6.11 |
If there is an Accumulation Period, the Trustees shall acquire Shares on behalf of the Qualifying Employee, on the Acquisition Date, using the Partnership Share Money.
|
6.12 |
The Partnership Share Agreement shall state whether the number of Shares acquired on behalf of each Participant shall be determined by reference to:
|
(a) |
the Market Value of the Shares at the beginning of the Accumulation Period; or
|
(b) |
the Market Value of the Shares on the Acquisition Date; or
|
(c) |
the lower of the Market Value of the Shares at the beginning of the Accumulation Period and the Market Value of the Shares on the Acquisition Date.
|
6.13 |
If a transaction occurs during an Accumulation Period which results in a new holding of shares being equated for the purposes of capital gains tax with any of the shares to be acquired under the Partnership Share Agreement, the employee may agree that the Partnership Share Agreement shall have effect after the time of that transaction as if it were an agreement for the purchase of shares comprised in the new holding.
|
6.14 |
Any surplus Partnership Share Money remaining after the acquisition of Shares by the Trustees:
|
(a) |
may, with the agreement of the Participant, be carried forward to the next Accumulation Period or if there is no Accumulation Period to the next deduction; and
|
(b) |
in any other case, shall be paid over to the Participant, subject to both deduction of income tax under PAYE and NICs, as soon as practicable.
|
6.15 |
If the Company receives applications for Partnership Shares exceeding the Award maximum determined in accordance with Rule 6.8 then the following steps shall be taken in sequence until the excess is eliminated.
|
Step 1. |
the excess of the monthly deduction chosen by each applicant over £10.00 shall be reduced pro rata;
|
Step 2. |
all monthly deductions shall be reduced to £10.00;
|
Step 3. |
applications shall be selected by lot, each based on a monthly deduction of £10.00.
|
6.16 |
An employee may withdraw from a Partnership Share Agreement at any time by notice in writing to the Company. Unless a later date is specified in the notice, such a notice shall take effect 30 days after the Company receives it. Any Partnership Share Money then held on behalf of an employee shall be paid over to that employee as soon as practicable. This payment shall be subject to income tax under PAYE and NICs.
|
6.17 |
If the Plan ceases to Qualify or a Plan Termination Notice is issued in respect of the Plan, any Partnership Share Money held on behalf of employees shall be repaid to them as soon as practicable, subject to deduction of income tax under PAYE, and NICs.
|
6.18 |
An employee may at any time give notice in writing to the Company directing the
Company
to procure that deductions being made from his Salary pursuant to a Partnership Share Agreement be stopped or the amount of those deductions varied subject to the limits in Rules 6.3 and 6.4.
|
6.19 |
If an employee has given a notice to stop his deductions pursuant to Rule 6.19 he may (on one occasion only in any Accumulation Period) subsequently give notice in writing to the Company directing the Company to procure that deductions are again made pursuant to the Partnership Share Agreement.
|
6.20 |
If an employee has given a notice to vary his deductions pursuant to Rule 6.19 he may (on one occasion only in any Accumulation Period) subsequently give notice in writing to the Company directing the Company to procure that deductions are varied again.
|
6.21 |
Unless an employee specifies a later date in any such notice, the Company shall procure that:
|
(a) |
within 30 days of receiving a notice given pursuant to Rule 6.19 no further deductions shall be made or the amount of the deductions shall be altered as the case may be; and
|
(b) |
if a notice is given pursuant to Rule 6.20 the first deduction made thereafter shall be made not later than the date on which the first deduction is due to be made under the relevant Partnership Share Agreement more than 30 days after the receipt of such a notice; and
|
(c) |
if a notice is given pursuant to Rules 6.21 the alteration to the amount of the first deduction made thereafter shall be made not later than the date on which the first deduction is due to be made under the relevant Partnership Share Agreement more than 30 days after the receipt of such a notice; and
|
6.22 |
An employee may not make up any deduction that has been missed in consequence of him having given such notices.
|
7. |
MATCHING SHARES
|
7.1 |
If the Company invites employees to participate in an award of Matching Shares then the Partnership Share Agreement shall set out the basis on which a Participant is entitled to Matching Shares in accordance with this part of the Rules.
|
7.2 |
Matching Shares shall:
|
(a) |
be Shares of the same class and carrying the same rights as the Partnership Shares to which they relate;
|
(b) |
subject to Rule 7.4, be awarded on the same day as the Partnership Shares to which they relate are acquired on behalf of the Participant; and
|
(c) |
be awarded to all Participants on exactly the same basis.
|
7.3 |
The Partnership Share Agreement shall specify the ratio of Matching Shares to Partnership Shares for the time being offered by the Company and that ratio shall not exceed 2:1 (or such other ratio as is stated in paragraph 60(2) of the Schedule). The Company may vary the ratio before Partnership Shares are acquired. Employees shall be notified of the terms of any such variation before the Partnership Shares are awarded under the Partnership Share Agreement.
|
7.4 |
If the Partnership Shares on that day are not sufficient to produce a Matching Share, the match shall be made when sufficient Partnership Shares have been acquired to allow at least one Matching Share to be appropriated.
|
7.5 |
The Company shall, in relation to each Award Date, specify a Holding Period throughout which a Participant shall be bound by the terms of the Partnership Share Agreement.
|
7.6 |
The Holding Period shall, in relation to each Award, be a specified period of not less than 3 years nor more than 5 years, beginning with the Award Date and shall be the same for all Participants who receive an Award at the same time. The Holding Period shall not be increased in respect of Matching Shares awarded under the Plan.
|
7.7 |
A Participant may during the Holding Period direct the Trustees:
|
(a) |
to accept an offer for any of their Matching Shares if the acceptance or agreement shall result in a new holding being equated with those original Shares for the purposes of capital gains tax; or
|
(b) |
to accept an offer of a Qualifying Corporate Bond (whether alone or with other assets or cash or both) for their Matching Shares if the offer forms part of such a general offer as is mentioned in paragraph (c); or
|
(c) |
to accept an offer of cash, with or without other assets, for their Matching Shares if the offer forms part of a general offer which is made to holders of shares of the same class as their Shares or to the holders of shares in the same company, and which is made in the first instance on a condition such that if it is satisfied the person making the offer shall have control of that company, within the meaning of sections 450 and 451 of CTA 2010; or
|
(d) |
to exercise a right, if in the case of a takeover offer (as defined in section 974 of the Companies Act 2006) there arises a rights under section 983 of that Act to require the offeror to acquire the Participant’s Free Shares, or such of them as are of a particular class; or
|
(e) |
to agree to a transaction affecting their Matching Shares or such of them as are of a particular class, if the transaction would be entered into pursuant to a compromise, arrangement or scheme applicable to or affecting;
|
(i) |
all of the ordinary share capital of the Company or, as the case may be, all the shares of the class in question; or
|
(ii) |
all the shares, or all the shares of the class in question, which are held by a class of shareholders identified otherwise than by reference to their employment or their participation in a plan approved under the Schedule.
|
7.8 |
The obligations of the Participant with respect to the Holding Period will end:
|
(a) |
if the Participant ceases to be in Relevant Employment and this may lead to the Forfeiture of the Matching Shares;
|
(b) |
if the Company terminates the Plan in accordance with Clause 22 of the Deed and the Participant has consented to the transfer of the Shares to the Participant.
|
7.9 |
The Company may stipulate that the number of Matching Shares awarded to a Qualifying Employee may be Forfeited in the circumstances set out in the Partnership Share Agreement provided that any provision for Forfeiture shall comply with the requirements of Rule 10.
|
8. |
DIVIDEND SHARES
|
8.1 |
The Free Share Agreement or Partnership Share Agreement, as appropriate, shall set out the rights and obligations of Participants receiving Dividend Shares under the Plan.
|
8.2 |
The Company may direct that any cash dividend in respect of Plan Shares held on behalf of Participants may be applied in acquiring further Plan Shares on their behalf.
|
8.3 |
Dividend Shares shall be Shares:
|
(a) |
of the same class and carrying the same rights as the Shares in respect of which the dividend is paid; and
|
(b) |
which are not subject to any provision for Forfeiture.
|
8.4 |
The Company may decide to:
|
(a) |
apply the Specified Percentage of all Participants’ dividends to acquire Dividend Shares;
|
(b) |
to pay all dividends in cash to all Participants; or
|
(c) |
to offer Participants the choice of either (a) or (b) above.
|
8.5 |
The Company may revoke any direction
for reinvestment of cash dividends.
|
8.6 |
The Specified Percentage referred to in Rule 8.4(a) may be an amount up to and including 100 per cent. and may from time to time be modified by the Company. The Dividend Shares are those acquired under this Plan and those acquired under any other plan approved under the Schedule. In exercising their powers in relation to the acquisition of Dividend Shares the Trustees must treat Participants fairly and equally.
|
8.7 |
The Trustees shall apply the Specified Percentage of the cash dividend to acquire Shares on behalf of the Participant on the Acquisition Date. The number of Dividend Shares acquired on behalf of each Participant shall be determined by the Market Value of the Shares on the Acquisition Date.
|
8.8 |
Any amount that is not reinvested because the amount of the cash dividend is insufficient to acquire a Share may be retained by the Trustees and carried forward to be added to the amount of the next cash dividend to be reinvested.
|
8.9 |
If the Participant ceases to be in Relevant Employment or a Plan Termination Notice is issued the amount shall be repaid to the Participant as soon as practicable. On making such a payment, the Participant shall be provided with the information specified in paragraph 80(4) of the Schedule.
|
8.10 |
The Holding Period shall be a period of 3 years, beginning with the Acquisition Date.
|
8.11 |
A Participant may during the Holding Period direct the Trustees:
|
(a) |
to accept an offer for any of their Dividend Shares if the acceptance or agreement shall result in a new holding being equated with those shares for the purposes of capital gains tax; or
|
(b) |
to accept an offer of a Qualifying Corporate Bond (whether alone or with other assets or cash or both) for their Dividend Shares if the offer forms part of such a general offer as is mentioned in paragraph (c); or
|
(c) |
to accept an offer of cash, with or without other assets, for their Dividend Shares if the offer forms part of a general offer which is made to holders of shares of the same class as their shares or to holders of shares in the same company, and which is made in the first instance on a condition such that if it is satisfied the person making the offer shall have control of that company, within the meaning of sections 450 and 451 of CTA 2010; or
|
(d) |
to agree to a transaction affecting their Dividend Shares or such of them as are of a particular class, if the transaction would be entered into pursuant to a compromise, arrangement or scheme applicable to or affecting;
|
(i) |
all of the ordinary share capital of the Company or, as the case may be, all the shares of the class in question; or
|
(ii) |
all the shares, or all the shares of the class in question, which are held by a class of shareholders identified otherwise than by reference to their employment or their participation in a plan approved under the Schedule.
|
8.12 |
Where a Participant is charged to tax in the event of their Dividend Shares ceasing to be subject to the Plan, they shall be provided with the information specified in paragraph 80(4) of the Schedule.
|
9. |
COMPANY RECONSTRUCTIONS
|
9.1 |
The following provisions of this Rule apply if there occurs in relation to any of a Participant’s Plan Shares (referred to in this Rule as “the Original Holding”):
|
(a) |
a transaction which results in a new holding (referred to in this Rule as “the New Holding”) being equated with the Original Holding for the purposes of capital gains tax; or
|
(b) |
a transaction which would have that result but for the fact that what would be the new holding consists of or includes a Qualifying Corporate Bond.
|
9.2 |
If an issue of shares of any of the following description (in respect of which a charge to income tax arises) is made as part of a company reconstruction, those shares shall be treated for the purposes of this Rule as not forming part of the New Holding:
|
(a) |
redeemable shares or securities issued as mentioned in paragraph C or D in section 1000(1) of CTA 2010;
|
(b) |
share capital issued in circumstances such that section 1022(3) CTA 2010 (bonus issues) applies; or
|
(c) |
share capital to which section 410 ITTOIA 2005 (stock dividends) applies that is issued in a case where subsection (2) or (3) of that section applies.
|
9.3 |
In this Rule:
|
9.4 |
Subject to the following provisions of this Rule, references in this Plan to a Participant’s Plan Shares shall be respectively construed, after the time of the company reconstruction, as being or, as the case may be, as including references to any New Shares.
|
9.5 |
For the purposes of the Plan:
|
(a) |
a company reconstruction shall be treated as not involving a disposal of Shares comprised in the Original Holding; and
|
(b) |
the date on which any New Shares are to be treated as having been appropriated to or acquired on behalf of the Participant shall be that on which Corresponding Shares were so appropriated or acquired.
|
9.6 |
In the context of a New Holding, any reference in this Rule to shares includes securities and rights of any description which form part of the New Holding for the purposes of Chapter II of Part IV of the Taxation of Chargeable Gains Act 1992.
|
10. |
PROVISION FOR FORFEITURE
|
10.1 |
The Company may determine that Free Shares or Matching Shares to be awarded at an Award Date shall, subject to Rules 10.2 to 10.9, be subject to Forfeiture in the following circumstances only:
|
(a) |
on the Participant ceasing to be in Relevant Employment at any time within a specified number of
years of the relevant Award Date (such period shall be specified at the time an Award is offered);
|
(b) |
on the Participant withdrawing the shares from the plan in that period; or
|
(c) |
in the case of Matching Shares, on the Participant withdrawing the Partnership Shares in respect of which those shares were awarded from the Plan within that period.
|
10.2 |
No Forfeiture shall occur if an event referred to in Rule 10.1(a) above arises by reason the Participant ceasing to be in Relevant Employment:
|
(a) |
because of injury or disability;
|
(b) |
on being dismissed by reason of Redundancy or by reason of a transfer to which the Transfer of Undertakings (Protection of Employment) Regulations 2006 apply;
|
(c) |
if the Relevant Employment is employment by an Associated Company, by reason of a change of control or other circumstances ending that company’s status as an Associated Company;
|
(d) |
by reason of the Participant’s retirement; or
|
(e) |
on the Participant’s death.
|
10.3 |
No Forfeiture shall occur if an event referred to in Rule 10.1 above arises by reason of Shares being withdrawn from the plan (the “relevant shares”) as a result of any of the following circumstances:
|
(a) |
a transaction resulting from a compromise, arrangement or scheme falling within subsection 498(9) ITEPA 2003 (a “compromise”); or
|
(b) |
an offer forming part of a general offer falling within subsection 498(10) ITEPA 2003 (a “general offer”); or
|
(c) |
the application of sections 979 to 982 or 983 to 985 of the Companies Act 2006 (a “takeover offer”); or
|
(d) |
if as a result of any of the circumstances set out in this Rule 10.3, the participant receives cash (and no other assets) in exchange for the relevant shares (a “cash offer”).
|
10.4 |
Rule 10.3 shall not apply to the relevant shares (or a proportion of them) if:
|
(a) |
in connection with a compromise, a general offer, a takeover offer or a cash offer, a course of action was open to the Participant which, had it been followed would have resulted in other assets being received in exchange for the relevant shares (or a proportion of them) instead of cash; or
|
(b) |
if it is reasonable to suppose that the relevant shares (or a proportion of them) would not have been awarded to the Participant had the compromise, general offer, takeover offer or cash offer not been made, or had any arrangements for the making of the compromise, general offer, takeover offer or cash offer not been in place or under consideration.
|
10.5 |
Forfeiture shall not be linked to the performance of any person or persons.
|
10.6 |
The same provision for Forfeiture shall apply in relation to all Free or Matching Shares included in the same Award under the Plan.
|
10.7 |
The Company shall inform all Qualifying Employees of any provision for Forfeiture in respect of any proposed Award at least 14 days before the closure date for return by Participants of signed Free Share Agreements or Partnership Share Agreements in respect of that Award.
|
10.8 |
No provision for Forfeiture may be made in respect of Partnership Shares or Dividend Shares.
|
10.9 |
Where shares are subject to Forfeiture under the terms of this Rule they shall be constituted Unawarded Shares under the terms of the Trust.
|
11. |
PLAN SHARES CEASING TO BE SUBJECT TO THE PLAN
|
11.1 |
Plan Shares cease to be subject to the Plan on the earliest of the following:
|
(a) |
When they are withdrawn from the Plan by the Participant (subject to Rule 10); or
|
(b) |
When the relevant Participant’s employment with a Participating Company or any Associated Company ends (and he is not employed by any other Participating Company or Associated Company).
|
11.2 |
If a Participant is expected to acquire Partnership Shares under a Partnership Share Agreement but his employment with a Participating Company or any Associated Company ends (and he is not employed by any other company that is a Participating Company or an Associated Company) before the Acquisition Date:
|
(a) |
If there is an Accumulation Period and it has ended; or
|
(b) |
If there is no Accumulation Period, but Partnership Share Money has been deducted,
|
11.3 |
Subject to Rule 10, the Trustees will transfer or dispose of Shares that cease to be subject to the Plan under Rule 11.1 as soon as possible in accordance with the Participants’ instructions. This is provided the Shares are not required by the Trustee to discharge the Participant’s PAYE obligations in accordance with clause 10.6 of the Deed.
|
12. |
RIGHTS ISSUES
|
12.1 |
Any shares or securities allotted under Clause 12 of the Trust Deed shall be treated as Plan Shares identical to the shares in respect of which the rights were conferred. They shall be treated as if they were awarded to or acquired on behalf of the Participant under the Plan in the same way and at the same time as those shares.
|
12.2 |
Rule 12.1 does not apply:
|
(a) |
to shares and securities allotted as the result of taking up a rights issue where the funds to exercise those rights were obtained otherwise than by virtue of the Trustees disposing of rights in accordance with this Rule; or
|
(b) |
where the rights to a share issue attributed to Plan Shares are different from the rights attributed to other ordinary shares of the Company.
|
13. |
RELATIONSHIP WITH EMPLOYMENT CONTRACTS
|
13.1 |
Nothing in the Trust Deed or this Plan shall in any way be construed as imposing upon a Participating Company a contractual obligation as between the Participating Company and any Qualifying Employee to contribute or to continue to contribute to the Plan or (subject to Rules 3 and 4) to make any Award to Qualifying Employees in general.
|
13.2 |
In no circumstances shall any person who has ceased to be an employee of the Company or any Subsidiary by reason of dismissal or otherwise howsoever or who is under notice of termination of his employment be entitled to claim as against any Participating Company or Subsidiary or the Trustee any compensation for or in respect of any consequential loss he may suffer by reason of the operation of the terms of the Plan or of the provisions of CTA 2010, ITEPA 2003 or the Schedule.
|
13.3 |
The benefit to a Participant of any Plan Shares held by him shall not form any part of his remuneration or count as his remuneration for any purpose and shall not be pensionable.
|
14. |
MISCELLANEOUS
|
14.1 |
Any notice or other communication under or in connection with Plan Shares may be given by a Participant or the Trustees or any Participating Company either personally or by post; items sent by post shall be prepaid and shall be deemed to have been served 72 hours after posting.
|
14.2 |
By entering into a Free Share Agreement or a Partnership Share Agreement a Participant agrees that the Trustees or any Participating Company or any person retained by any of the foregoing in relation to the operation or administration of the Plan, may obtain, store and process data about the Participant in connection with the Plan and agrees further that any of the aforementioned parties or other third parties may use the information to contact the Participant from time to time by post, fax, email or telephone in connection with the operation of the Plan and to process information including personal data and personal sensitive data as defined in the Data Protection Act 1998 for the purposes of the Plan including all relevant disclosures to HM Revenue and Customs.
|
14.3 |
Save as otherwise provided in these Rules, a person who is not a party to a Free Share Agreement or a Partnership Share Agreement shall have no rights under the Contracts (Rights of Third Parties) Act 1999 to rely upon or enforce any term of these Rules or any Free Share Agreement or Partnership Share Agreement. This Rule shall not affect any right or remedy of a third party which exists or is available apart from that Act.
|
1. |
(a) I agree to allow my employer to deduct the following
amount per month
from my Salary in the April 2017 payroll until I provide alternative instructions to Human resources (enter amount in box):
|
£
|
Insert
monthly
amount between £10 and £150
|
2. |
I agree that these deductions will be used to buy Partnership Shares in Midatech Pharma plc for me on the Acquisition Date/s.
|
3. |
I agree to accept Matching Shares in Midatech Pharma plc awarded to me under the Plan and leave them in the hands of the Trustees, and not to assign, charge or otherwise dispose of my beneficial interest in the shares for the whole of the Holding Period of 3 years.
|
4. |
I agree that all dividends paid on my shares will be paid into my bank / building society account.
|
5. |
I understand that shares may fall in value as well as rise.
|
6. |
I have read this agreement and The Midatech Pharma Share Incentive Plan [Information Summary] and I agree to be bound by this agreement, the rules of the Plan and the Company’s Articles of Association (as amended from time to time)
.
|
7. |
The Company agrees to arrange for shares in Midatech Pharma plc to be bought for me, according to the Rules of the Plan.
|
8. |
The Company agrees to provide
1 Matching Share for every 1 Partnership Share
.
|
9. |
The Company undertakes to notify me of any restriction on the number of Partnership Shares available in the Award.
|
10. |
The Trustees agrees to keep my Salary deductions in a designated bank account complying with the Trust Deed and Rules until they are used to buy shares in Midatech Pharma plc for me.
|
1. |
I agree that taking part in the Plan does not affect my rights, entitlements and obligations under my contract of employment, and does not give me any rights or additional rights to compensation or damages if my employment ceases.
|
2. |
I may stop the deductions from my Salary at any time or begin them again, by writing to Midatech HR.
|
3. |
I agree that the deductions from my Salary, or the number of shares that I receive may be scaled down if the limit on the number of shares set by the Company for this award is exceeded.
|
4. |
I may ask the Trustees for my Partnership Shares at any time, but I may have to pay income tax and National Insurance Contributions when they are taken out of the Plan.
|
5. |
I agree to allow the Trustees to sell some or all of my shares to pay any income tax and National Insurance Contributions in respect of my shares ceasing to be subject to the Plan, unless I provide them in advance with sufficient funds to pay these amounts.
|
6. |
I agree that any Salary deductions not used to buy shares will at the discretion of the Trustees be repaid to me after the deduction of any necessary income tax or National Insurance Contributions, or will be carried forward and added to the next deduction.
|
7. |
If there is a rights issue, I agree to allow the Trustees to sell some of the rights attached to my shares in the Plan, in order to fund the exercise of the rights attached to other shares held by me in the Plan.
|
8. |
I can at any time withdraw from this agreement by writing to Midatech HR. Any unused deductions will be returned to me after the deduction of any necessary income tax or National Insurance Contributions.
|
9. |
I agree that withdrawal from this agreement will not affect the terms on which I agreed to buy shares already held for me under the Plan.
|
10. |
The ratio of Matching Shares to Partnership Shares is
1 Matching Share/s for every 1 Partnership Share
and may be varied by the Company in its sole discretion. If the ratio varies the Company will notify me before the Partnership Shares are bought for me.
|
11. |
I will lose my Matching Shares if, within three years from the date of the Award: (i) I withdraw the Partnership Shares in respect of which the Matching Shares were awarded or (ii) I cease to be in Relevant Employment, unless the employment ceases for one of the following reasons:
|
(c) |
transfer of employment to which the Transfer of Undertakings (Protection of Employment) Regulations 2006 apply;
|
(d) |
if the Relevant Employment is employment by an Associated Company, by reason of a change of control or other circumstances ending that company’s status as an Associated Company;
|
12. |
The Trustees are under no obligation to keep the deductions in an interest-bearing account, but if they do, they will pay the interest to me.
|
13. |
The Company will pay any dividends to my nominated bank or building society account.
|
14. |
I understand that my obligations during the Holding Period will end:
|
(a) |
if I cease to be in Relevant Employment, and this may lead to Forfeiture of my Matching Shares;
|
(b) |
if the Company terminates the Plan in accordance with Clause 22 of the Deed and I have consented to the transfer of the Shares to me.
|
15. |
I understand that my obligations under the Holding Period are subject to:
|
(a) |
the right of the Trustees to sell my shares to meet PAYE obligations;
|
(b) |
the Trustees accepting at my direction an offer for my shares in accordance with the Plan.
|
16. |
I consent to the holding, processing and disclosure by the Company and any of its subsidiaries of any personal data relating to me for the purpose of my participation in the Plan and to the transfer of such data to third parties for the purpose of administering the Plan. These include but are not limited to:
|
(b) |
providing information to the Trustees, a Plan administrator, a custodian, registrar or broker; and
|
(c) |
providing information to any future purchasers of the Company for which I work or the business in which I work.
|
17. |
I agree that the Company, the Trustees and its agents may disclose to the Company and/or to my employer all such information relating to me and my participation in the Plan as shall, in the opinion of any of those persons be necessary to enable my employer to comply with the requirements of PAYE and National Insurance Contributions.
|
18. |
I have noted that: the decision to participate in the Plan is strictly personal and will not have any positive or negative impact on my employment within Midatech Pharma plc. This acquisition form or any other document provided or made available to me in the context of Plan does not modify in any way the terms of my work contract or my situation within Midatech Pharma plc. The opportunity to participate in the Plan or actual participation in this plan does not in any way whatsoever presuppose the existence of future plans or the opportunity to participate in them.
|
19. |
Documents in relation to the Plan are provided to me for information purposes only, and neither Midatech Pharma plc nor any subsidiary, by way of these documents is providing me with, nor intends to provide me with, any financial or investment-related advice. I should consult an independent legal and/or tax adviser if I have any doubts on what decision to take with respect to the Plan.
|
20. |
I acknowledge that my instruction to purchase Midatech Pharma plc shares is irrevocable, subject to the Rules of the Plan.
|
Signature: ________________________________
Û
|
Date: ___ / ___ /___
Û
|
Participant (“the
Participant”)
and
|
Full Name
|
|
Home Address
|
||
National Insurance
Number
(see payslip)
|
||
Midatech Pharma plc
(“the Company”)
and
|
Registered Address
|
65 Innovation Drive, Milton Park, Milton, Abingdon, Oxfordshire, OX14 4RQ
|
Registered Number
|
09216368
|
|
RM2 Trustees Limited CRN 03363760 with registered office Sycamore House, 86-88 Coombe Road, New Malden, KT3 4QE (“the Trustees”)
|
1. |
I agree to accept Free Shares in Midatech Pharma plc awarded to me under the Plan, including any future awards.
|
2. |
I agree to leave the Free Shares in the hands of the Trustees, and not to assign, charge or otherwise dispose of my beneficial interest in the shares for the whole of the Holding Period of three years.
|
3. |
I agree that all dividends paid on my shares will be paid into my nominated bank / building society account.
|
4. |
The Company agrees to arrange for shares in Midatech Pharma plc to be awarded to me, according to the Rules of the Plan.
|
1. |
I agree that taking part in the Plan does not affect my rights, entitlements and obligations under my contract of employment, and does not give me any rights or additional rights to compensation or damages if my employment ceases.
|
2. |
I agree to allow the Trustees to sell some or all of my shares to pay any income tax and National Insurance Contributions in respect of my shares ceasing to be subject to the Plan, unless I provide them in advance with sufficient funds to pay these amounts.
|
3. |
If there is a rights issue, I agree to allow the Trustees to sell some of the rights attached to my shares in the Plan, in order to fund the exercise of the rights attached to other shares held by me in the Plan.
|
4. |
I can at any time withdraw from this agreement, by writing to my employer.
|
5. |
I agree that withdrawal from this agreement will not affect the terms on which I agreed to accept any shares that have already been awarded to me under the terms of the Plan.
|
6. |
I understand that my obligations during the Holding Period will end:
|
(a) |
if I cease to be in Relevant Employment and this may lead to Forfeiture of the Free Shares;
|
(b) |
if the Company terminates the Plan in accordance with Clause 22 of the Deed and I have consented to the transfer of the Shares to myself.
|
7. |
I understand that my obligations under the Holding Period are subject to:
|
(a) |
the right of the Trustees to sell my shares to meet PAYE obligations;
|
(b) |
the Trustees accepting at my direction an offer for my shares in accordance with the Plan.
|
9. |
I will lose my Free Shares if within three years from the date of the Award I cease to be in Relevant Employment, unless the employment ceased for one of the following reasons:
|
(a) |
injury or disability;
|
(b) |
redundancy;
|
(c) |
transfer of employment to which The Transfer of Undertaking (Protection of Employment) Regulations 2006 apply;
|
(d) |
change of control or other circumstances ending the associated company status of the employer company;
|
(e) |
retirement; or
|
(f) |
death.
|
10. |
The Company will pay any dividends to my nominated bank or building society account.
|
11. |
I consent to the holding, processing and disclosure by the Company and any of its subsidiaries of any personal data relating to me for the purpose of my participation in the Plan and to the transfer of such data to third parties for the purpose of administering the Plan. These include but are not limited to:
|
(a) |
administering and maintaining Participant records;
|
(b) |
providing information to the Trustees, a Plan administrator, a custodian, registrar or broker; and
|
(c) |
providing information to any future purchasers of the Company for which I work or the business in which I work.
|
12. |
I agree that the Company, the Trustees and its agents may disclose to the Company and/or to my employer all such information relating to me and my participation in the Plan as shall, in the opinion of any of those persons be necessary to enable my employer to comply with the requirements of PAYE and National Insurance Contributions.
|
13. |
I have noted that the decision to participate in the Plan is strictly personal and will not have any positive or negative impact on my employment within Midatech Pharma plc. This acquisition form or any other document provided or made available to me in the context of Plan does not modify in any way the terms of my work contract or my situation within Midatech Pharma plc. The opportunity to participate in the Plan or actual participation in this plan does not in any way whatsoever presuppose the existence of future plans or the opportunity to participate in them.
|
14. |
Documents in relation to the Plan are provided to me for information purposes only, and neither Midatech Pharma plc nor any subsidiary, by way of these documents is providing me with, nor intends to provide me with, any financial or investment-related advice. I should consult an independent legal and/or tax adviser if I have any doubts on what decision to take with respect to the Plan.
|
Signature: ________________________________
Û
|
Date: ___ / ___ /___
Û
|
Dated
|
14 March 2018
|
(1) |
MIDATECH PHARMA PLC
|
(2) |
DR JAMES PHILLIPS
|
|
|
|
(1) |
MIDATECH PHARMA PLC
a company incorporated under the laws of England (company number 09216368) whose registered office address is situated at 65 Innovation Drive, Milton Park, Abingdon, Oxfordshire, OX14 4RQ (‘the Company’)
|
(2) |
DR JAMES PHILLIPS
of 13a Stanhope Mews West, South Kensington, London, SW7 5RB (‘the Executive’)
|
(A) |
The Executive is employed by the Company as the Chief Executive Officer. Employment was deemed to have begun on 1
st
May 2013 and the Executive has served the Company under the terms of a Service Agreement dated on or about 3
rd
December 2014 (‘’the Service Agreement’’).
|
(B) |
On or about 6
st
February 2018 the Executive held discussions with the Chairman about a potential change of CEO in the Company and would consider to leave the Company’s employment earlier than the expiration of any notice given in accordance with the Service Agreement in order to help the Company transition.
|
(C) |
The Company has agreed that the Executive shall with effect from 15
th
March 2018 have overall responsibility for [***] and the Company wishes to incentivise him to [***] by way of participation in the Incentive Bonus Scheme and that the Executive shall continue to direct and supervise [***].
|
(D) |
The parties wish to agree and embody in this Agreement the terms upon which the Executive’s employment will come to an end and enter into a settlement agreement under the provisions of section 203 of the Employment Rights Act 1996 and any relevant parallel legislation governing the settlement of employment claims in full and final settlement of all employment-related claims that the Executive has and/or may have against the Company or any Group Company arising out of their employment or its termination, whether or not such claims are known or unknown to the parties and whether or not they are or could be in contemplation of the parties at the time of signing this Agreement.
|
© Barlow Robbins LLP
|
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|
(E) |
Further, the parties wish to conclude an agreement as set out in this Agreement in respect of any rights or claims which the Executive might have at common law arising out of their employment or its termination and in respect of which the Executive has also received independent legal advice from the Adviser.
|
(F) |
The Executive's employment by the Company will terminate on 31st May 2018 (‘the Termination Date’).
|
(G) |
In the event of [***] not [***] in all respects by the Termination Date, the parties will enter into a Consultancy Agreement for the provision of the Executive’s services to the Company for the [***] as provided for at paragraph C above.
|
(H) |
Before signing this Agreement the Executive has received independent legal advice as to the terms and effect of this Agreement and the conditions regulating compromise and settlement agreements have been satisfied.
|
(I) |
The Company is entering into this Agreement for itself and as agent for any Group Company and is duly authorised in that regard.
|
1. |
DEFINITIONS
|
Adviser |
means Danielle Parsons of Slater & Gordon (UK) LLP;
|
[***] |
[***]
|
Announcement |
the public announcement by the Company on a regulatory news service;
|
Compensation Payment |
means the payment £99,000 made under the terms of clause
3.1
below;
|
© Barlow Robbins LLP
|
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|
[***] |
[***]
|
Confidential Information |
means information in whatever form (including, without limitation, in written, oral, visual or electronic form or on any magnetic or optical disk or memory) as specified in clause 14.1 and 14.2 of the Service Agreement;
|
Consultancy Agreement |
means any consultancy agreement between the Company and the Executive for the period 1
st
June 2018 to 30
th
September 2018 for the purpose of [***] pursuant to clause
4
below;
|
Contract of Employment |
means the Service Agreement between the Company and the Executive dated on or about 3
rd
December 2014 as amended by the letter of agreed variations dated 18
th
October 2017;
|
Employment |
means the Executive’s employment by the Company;
|
EMI Share Scheme |
means the Midatech Pharma PLC Enterprise Management Incentive Scheme adopted in December 2014;
|
Group |
means the Company and any “subsidiary” company of the Company as defined in Section 1159 of the Companies Act 2006 as amended and any associated company of the Company as defined in Section 416 of the Income and Corporation Taxes Act 1988 as amended;
|
Group Company |
means any member of the Group;
|
Incentive Bonus Scheme |
means the Incentive Bonus Scheme in relation to [***] provided for at clause 5 below;
|
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|
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|
Statutory Claims |
means any claim referred to in the Equal Pay Act 1970; the Health and Safety at Work Act 1974; the Trade Union and Labour Relations (Consolidation) Act 1992; the Employment Rights Act 1996; the National Minimum Wage Act 1998; the Working Time Regulations 1998; the Public Interest Disclosure Act 1998; the Trans-national Information and Consultation of Executives Regulations 1999; the Maternity and Parental Leave Regulations 1999; the Employment Relations Act 1999; the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000; the Fixed-Term Executives (Prevention of Less Favourable Treatment) Regulations 2002; the Employment Act 2002; the Flexible Working (Procedural Requirements) Regulations 2002; the Flexible Working (Eligibility, Complaints and Remedies) Regulations 2002; the Transfer of Undertakings (Protection of Employment) Regulations 2006; the Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006; the Equality Act 2010 and any claims from which an employee may contract out by means of a statutory compromise and/or settlement agreement;
|
Termination Date | means | 31st May 2018. |
2. |
TERMINATION OF EMPLOYMENT, CONTRACTUAL PAYMENTS AND BENEFITS
|
2.1. |
The Employment will terminate on the Termination Date. Subject to the Employee continuing to discharge his duties as Chief Executive Officer, the Company will pay to the Executive his basic salary and provide contractual benefits (including the agreed pension contribution) up to and including the Termination Date less deductions for tax, National Insurance and his own pension contributions.
|
2.2. |
Without prejudice to the generality of his duties and obligations under both clause 2.1 above and the Contract of Employment, the Executive shall forthwith agree with his successor Chief Executive Officer, Craig Cook, a handover plan to be submitted to and approved by the Company’s Board of Directors for implementation by the Executive between 15
th
March 2018 and the Termination Date.
|
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|
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|
2.3. |
The Executive will also receive a payment in lieu of any accrued but untaken holiday to which he is entitled under the Contract of Employment less any tax and National Insurance contributions.
|
2.4. |
The Company shall deduct from the final salary payment any outstanding sums due from the Executive to the Company.
|
2.5. |
The Executive shall participate in, and benefit from any payments to which he is entitled under, the terms of the Incentive Bonus Scheme set out in Schedule 1 herein subject to deductions for tax and National Insurance.
|
2.6. |
The Company shall procure that the period during which the Executive may exercise the options granted to him under the EMI Share Scheme and each of the EMI Option Agreements between the Company and the Executive pursuant to the rules thereunder (“the EMIO Agreements”) that will have vested by the Termination Date shall be extended to a period of: (a) 4 years from the Termination Date; or (b) the date relevant options lapse under the terms of the EMIO Agreements, whichever is earlier and as set out at Schedule 2 hereto.
|
3. |
COMPENSATION
|
3.1. |
On the Termination Date or receipt of this Agreement signed by the Executive and certified by the Adviser (whichever is later), the Company shall
,
as compensation for the loss of the Employment (on its own behalf and on behalf of any Group Company), but without admission of liability, pay to the Executive the Compensation Payment.
|
3.2. |
It is the parties’ understanding that the Compensation Payment is a payment paid under section 403 of the Income Tax (Earnings and Pensions) Act 2003 and that the first £30,000 of this sum may be paid without a requirement for the Company to deduct income tax or National Insurance. The balance will be paid (where appropriate) after the Company has deducted income tax at the Executive’s appropriate rate. If HM Revenue & Customs decide that any further tax and/or Executive National Insurance contributions shall be payable, the Executive shall indemnify the Company in respect of any such payments in accordance with clause 7 to this Agreement.
|
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|
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|
4. |
CONSULTANCY AGREEMENT
|
5. |
BENEFITS
|
6. |
RESIGNATION FROM OFFICE
|
7. |
TAX INDEMNITY
|
7.1. |
The Executive undertakes that, if the Company or any Group Company is called upon to account to HM Revenue & Customs for any further income tax, Executive’s National Insurance contributions, interest, penalties or costs (“the Excess Tax”) arising in respect of the Compensation Payment or other benefits provided under this Agreement other than the amount of tax deducted in accordance with clause 3.2 above, the Executive shall indemnify and continue to keep indemnified, the Company (and any Associated Company) against any such demand for Excess Tax and will immediately repay on demand an amount equal to the Excess Tax imposed upon the Company (or any Group Company) by HM Revenue & Customs in consequence of those obligations PROVIDED THAT no payment of Excess Tax will be made to HM Revenue & Customs without particulars being given to the Executive and the Executive being given the opportunity, at his own expense, to dispute any such payment.
|
7.2. |
The Company shall be entitled to deduct from any sums owed to the Executive under the terms of the Incentive Bonus Scheme, or the EMI Share Scheme following the exercise of options and proceeds from the subsequent sale of shares, such amounts as it is entitled to demand from the Executive under clause 7.1 in respect of Excess Tax.
|
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|
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|
8. |
CONFIDENTIALITY OF AGREEMENT
|
8.1. |
The Executive will keep the existence and terms of this Agreement and all discussions and other correspondence on this subject confidential and will not disclose them to any other person except to a professional adviser or to a member of their immediate family who has agreed to be bound by the obligation of confidentiality or as may be required by law or by any regulatory authority or with the Company’s written consent.
|
8.2. |
The Company will use its reasonable endeavours to keep the terms of this Agreement confidential except for the purposes of taking professional, legal or financial advice, in connection with the conclusion of the Agreement, or as may be required by law or by any regulatory authority or as regards an Announcement required to be made under the AIM Rules of the London Stock Exchange (‘AIM Rules’).
|
9. |
STATEMENTS AND ANNOUNCEMENTS
|
9.1. |
The Executive will not directly or indirectly make any untrue, detrimental or derogatory statements whether orally, in writing or via any electronic media about the Company or any Group Company or its or their officers or Employees, their employment with the Company or the termination of that employment.
|
9.2. |
The Company will use its reasonable endeavours to ensure that its Employees and officers do not make any untrue, detrimental or derogatory statements about the Executive, their employment with the Company or the termination of that employment.
|
9.3. |
The Company will make a ‘reorganisation’ Announcement on 15
th
March 2018 in the form set out at Schedule 5 and neither party will make any statement to third parties (save as specified in clause 10) which is inconsistent with that Announcement. If such intended Announcement is delayed the Company shall notify the Executive of the expected date of Announcement.
|
10. |
REFERENCE
|
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|
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|
11. |
COMPANY PROPERTY
|
11.1. |
The Executive shall return to the Company within 7 days of the Termination Date all property belonging to the Company or any Group Company (including but not limited to any documents, disks, equipment, keys, including car keys and passes) which are or have been in the Executive’s possession or control. Documents and disks shall include but are not limited to correspondence, files, e-mails, memos, reports, minutes, plans, records, surveys, software, diagrams, computer print-outs, floppy disks, manuals, Supplier or client documentation or any other medium of storing information. The Executive would like to retain his laptop & will submit it for cleansing at Vorboss at his departure.
|
11.2. |
The Executive’s obligations under this clause 11 shall be deemed to include the return of all copies, drafts, reproductions, notes, extracts or summaries (howsoever made) of the foregoing.
|
11.3. |
The Executive shall, before the Termination Date, delete irretrievably any information relating to the business of the Company or any Group Company that they have stored on any magnetic or optical disk or memory and all matter derived from such sources which is in their possession or under their control.
|
11.4. |
The Executive shall, if requested to do so by the Company, provide a signed statement that they have complied fully with their obligations under this clause 11 and shall provide it with such reasonable evidence of compliance as may be requested.
|
12. |
EXPENSES
|
13. |
CONFIDENTIAL INFORMATION
|
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|
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|
14. |
RESTRICTIVE COVENANTS
|
15. |
THE EXECUTIVE’S CLAIMS
|
15.1. |
The Executive alleges that, in addition to common law and contractual claims, they may have the following Statutory Claims (the “Executive’s Claims”) arising from the Employment and/or its termination: under the Employment Rights Act 1996 (ERA) and specifically claims for: unfair dismissal and unlawful deduction from wages in contravention of Part II of the ERA;
|
15.2. |
The Executive represents and warrants that they have:
|
15.2.1. |
not downloaded any information from the Company’s or any Group Company’s IT or email system onto any personal device including, but not limited to, a personal computer, laptop, tablet, mobile phone, USB flash drive, computer disc or other similar device and/or forwarded information belonging to the Company to any personal email account(s);
|
15.2.2. |
not issued proceedings before the Employment Tribunals, County Court or High Court in respect of any claim in connection with the Employment or its termination;
|
15.2.3. |
not notified a claim to Acas for early conciliation and shall not act on the basis of any early conciliation certificate already issued by Acas and neither the Executive nor anyone acting on the Executive’s behalf will notify such a claim to Acas;
|
15.2.4. |
not been subject to “improper behaviour” within the meaning of Section 111A of the Employment Rights Act 1996 in the discussions leading up to them being offered this Agreement and, in particular, there has been no undue pressure placed on them to sign this Agreement and that they have been given a reasonable period in which to consider the offer;
|
15.2.5. |
not withheld or failed to disclose any material fact concerning the performance of their duties with the Company and/or any Group Company or any breach of any material term (express or implied) of the Contract of Employment which would have entitled the Company to have dismissed them summarily;
|
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|
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|
15.2.6. |
acted in the best interests of the Company and/or any Group Company and has not knowingly committed any breach of duty of any kind owed to the Company and/or any Group Company;
|
15.2.7. |
not at the date of this Agreement obtained employment or entered into a contract for services or a consultancy agreement with any person, firm or company.
|
15.3. |
The Executive warrants that they have instructed the Adviser to advise on whether they have or may have (whether at the time of signing this Agreement or in the future) any Statutory Claims against the Company, any Group Company or any of its or their officers, agents or employees arising out of or in connection with the Employment or its termination and they have provided the Adviser with all relevant information to enable the Adviser to advise them on whether they may have any such Statutory Claims.
|
15.4. |
The Executive further warrants that, having received the Adviser’s advice, they have the claims referred to in clause 15.1 above (the Executive’s Claims) and no other Statutory Claims against the Company, any Group Company or its or their officers, agents or Employees.
|
16. |
SETTLEMENT
|
16.1. |
The Executive accepts the terms of this Agreement are in full and final settlement of all and any claims, demands, costs and expenses or other rights of action whatsoever and howsoever arising, including any common law or statutory claims whatsoever (whether under the laws of England and Wales, European Union or any other law, and whether or not they are or could be in the contemplation of the parties at the time of signing this Agreement), arising from the Employment and/or its termination, relating to:
|
16.1.1. |
the Executive’s Claims;
|
16.1.2. |
breach of contract including wrongful dismissal; and
|
16.1.3. |
any other common law or contractual claim.
|
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|
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|
16.2. |
The waiver in clause 16.1 shall not apply to the following:-
|
16.2.1. |
any claims by the Executive to enforce this Agreement;
|
16.2.2. |
any personal injury claims which have not arisen or of which the Executive is not aware at the date of this Agreement;
|
16.2.3. |
any claims relating to accrued pension rights.
|
16.3. |
The Executive warrants that they are not aware of any facts or matters that could give rise to a claim for personal injury against the Company.
|
16.4. |
The Company enters into this Agreement and makes the Compensation Payment in reliance upon the terms and conditions of this Agreement.
|
16.5. |
Nothing in this Agreement shall prevent the Executive from making a protected disclosure under section 43A of the Employment Rights Act 1996 provided that the disclosure is made in accordance with the provisions of that Act.
|
17. |
SETTLEMENT AGREEMENT
|
18. |
INDEPENDENT ADVICE
|
18.1. |
they have received independent advice from the Adviser as to the terms and effect of this Agreement and, in particular, its effect on their ability to pursue any rights they may have in consequence of the loss of the Employment before an Employment Tribunal;
|
18.2. |
the Adviser is an independent adviser within the meaning of section 203 of the Employment Rights Act 1996 and section 147 of the Equality Act 2010 and has produced a letter addressed to the Company in the form attached at Schedule 7 to this Agreement; and
|
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|
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|
18.3. |
the Executive is advised by the Adviser that there is in force, and was at the time they received the advice referred to above, a contract of insurance or indemnity provided for members of a profession or professional body covering the risk of a claim by them in respect of loss arising in consequence of that advice.
|
19. |
REAFFIRMATION CERTIFICATE
|
19.1. |
It is a condition of this Agreement that the Executive signs and delivers to the Company the Reaffirmation Certificate set out at Schedule 8 on or within 7 days after the Termination Date.
|
19.3.1 |
Nothing in this Agreement shall prevent the Company from fairly and reasonably terminating the Executive’s Employment prior to the Termination Date if the Company reasonably believes that the Executive has acted in a way that constitutes a repudiatory breach on their part which entitles the Company to terminate the Employment without notice. If the Employment is so terminated, the Executive will forfeit any further payments due to them from the Company under this Agreement.
|
20. |
LEGAL EXPENSES
|
21. |
VARIATION
|
22. |
CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
|
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|
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|
23. |
BINDING AGREEMENT
|
24. |
ENTIRE AGREEMENT
|
25. |
COUNTERPARTS
|
26. |
JURISDICTION
|
© Barlow Robbins LLP
|
P 13
|
[***]
|
|
[***]
|
Bonus Payment
|
[***]
|
£10,000
|
[***]
|
£25,000
|
[***]
|
£50,000
|
[***]
|
£100,000
|
[***]
|
© Barlow Robbins LLP
|
P 14
|
© Barlow Robbins LLP
|
P 15
|
1. |
TERM
|
2. |
DUTIES
|
2.1 |
You shall use your best endeavours to promote the interests of the Company by providing supervision of [***] to ensure an [***] and thereafter the [***] and supplying other services relevant to [***] (“Services”).
|
2.2 |
If you are unable to provide the Services due to illness or injury you shall notify the Company as soon as reasonably practicable.
|
2.3 |
You shall ensure that you are available at all times on reasonable notice to provide such assistance or information as the Company may require.
|
2.4 |
You have no authority (and shall not hold yourself out as having authority) to bind the Company, unless a director of the Company has specifically permitted this in writing.
|
3. |
EXPENSES
|
3.1 |
The Company shall reimburse all your reasonable expenses incurred in providing the Services within a reasonable time you incurring the expense provided you retain all relevant receipts.
|
© Barlow Robbins LLP
|
P 16
|
3.2 |
We are entitled to deduct from any sums payable to you any sums that you may owe the Company at any time.
|
4. |
OTHER ACTIVITIES
|
4.1 |
You may be engaged, employed or concerned in any other business, trade, profession or other activity which does not place you in a conflict of interest with the Company. However, you may not be involved in any capacity with a business which does or could compete with the business of the Company without the prior written consent of the Chairman of the Company.
|
4.2 |
You may not be involved in any capacity with a business which materially affects your ability to provide the Services to the Company.
|
5. |
CONFIDENTIAL INFORMATION
|
5.1 |
You shall not use or disclose to any person either during or at any time after your engagement by the Company any confidential information about the business or affairs of the Company or the terms of the Transaction or about any other confidential matters which may come to your knowledge in the course of providing the Services. For the purposes of this clause 5, confidential information means any information or matter which is not in the public domain and which relates to the affairs of the Company.
|
(b) |
any information which is already in, or comes into, the public domain otherwise than through your unauthorised disclosure.
|
5.3 |
All documents, manuals, hardware and software provided for your use by the Company, and any data or documents (including copies) produced, maintained or stored on its computer systems or other electronic equipment (including mobile phones if provided), remain the property of the Company.
|
6. |
INSURANCE AND LIABILITY
|
© Barlow Robbins LLP
|
P 17
|
7. |
TERMINATION
|
(a) |
you are in material breach of any of your obligations under this Consultancy Agreement; or
|
(b) |
other than as a result of illness or accident, after notice in writing, you wilfully neglect to provide or fail to remedy any default in providing the Services; or
|
(c) |
[***].
|
8. |
OBLIGATIONS ON TERMINATION
|
9. |
STATUS
|
9.1 |
You will be an independent contractor and nothing in this agreement shall render you an employee, worker, agent or partner of the Company and you shall not hold yourself out as such.
|
9.2 |
You shall be fully responsible for and indemnify the Company against any liability, assessment or claim for:
|
(a) |
taxation whatsoever arising from or made in connection with the performance of the Services, where such recovery is not prohibited by law; and
|
© Barlow Robbins LLP
|
P 18
|
(b) |
any employment-related claim or any claim based on worker status (including reasonable costs and expenses) brought by You arising out of or in connection with the provision of the Services.
|
10. |
VARIATION
|
11. |
THIRD PARTY RIGHTS
|
12. |
GOVERNING LAW
|
13. |
JURISDICTION
|
© Barlow Robbins LLP
|
P 19
|
Midatech Pharma plc
|
UK
|
09216368
|
65 Innovation Drive, Milton Park, Milton, Abingdon, Oxfordshire, OX14 4RQ
|
Midatech Pharma (Wales) Limited
|
UK
|
04929486
|
Oddfellows House, 19 Newport Road, Cardiff, CF24 0AA
|
Midatech Limited
|
UK
|
04097593
|
65 Innovation Drive, Milton Park, Milton, Abingdon, Oxfordshire, OX14 4RQ
|
Midatech Pharma Espana SL
|
Spain
|
B-84-185008
|
Parque Tecnológico de Vizcaya, Edificio 800 Planta 2, Derio, 48160, Vizcaya, Spain
|
Pharmida AG*
|
Switzerland
|
n/a
|
c/o Dr. Peter Rickli, Kellerhals, Hirschgässlein 11, 4051 Basel, Switzerland
|
MidaSol Therapeutics GP (JV)*
|
Cayman Is.
|
OG-265898
|
c/o Ogier Fiduciary Services (Cayman) Limited, 89 Nexus Way, Camana Bay, Grand Cayman KY1-9007, Cayman Islands
|
Midatech Pharma US Inc.
|
US
|
n/a
|
8601 Six Forks Road, Suite 160, Raleigh, North Carolina 27615, USA
|
DARA Therapeutics Inc.*
|
US
|
n/a
|
8601 Six Forks Road, Suite 160, Raleigh, North Carolina 27615, USA
|
Midatech Pharma Pty Ltd
|
Australia
|
604 241 009
|
c/o Griffith Hack Consulting, 300 Queen Street, Brisbane, QLD 4000, Australia
|
© Barlow Robbins LLP
|
P 20
|
© Barlow Robbins LLP
|
P 21
|
© Barlow Robbins LLP
|
P 22
|
© Barlow Robbins LLP
|
P 23
|
© Barlow Robbins LLP
|
P 24
|
© Barlow Robbins LLP
|
P 25
|
…………………………………………
|
|
Signed by Dr James Phillips
|
|
…………………………………………
|
|
Date
|
© Barlow Robbins LLP
|
P 26
|
Subsidiaries
|
Country of Incorporation
|
Voting Interest
|
Subsidiaries of Midatech Pharma PLC
|
||
Midatech Pharma (Wales) Limited
|
England and Wales
|
100%
|
Midatech Limited
|
England and Wales
|
100%
|
Midatech Pharma US Inc.
|
United States (Delaware)
|
100%
|
Midatech Pharma Pty Limited
|
Australia
|
100%
|
Joint Ventures with Midatech Limited
|
||
MidaSol Therapeutics GP (1)(3)
|
Cayman Islands
|
50%
|
Syntara LLC (2)(3)
|
United States (Delaware)
|
50%
|
Subsidiaries of Midatech Limited
|
||
Midatech Pharma Espana SL
|
Spain
|
100%
|
Pharmida AG (3)
|
Switzerland
|
100%
|
Subsidiaries of Midatech Pharma US Inc.
|
||
DARA Therapeutics, Inc.
|
United States (North Carolina)
|
100%
|
1. |
I have reviewed this annual report on Form 20-F of Midatech Pharma PLC (the “Company”);
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4. |
The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
5. |
The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.
|
Date: April 23, 2018
|
/s/ James N. Phillips
|
|
James N. Phillips
|
||
Chief Executive Officer
|
1. |
I have reviewed this annual report on Form 20-F of Midatech Pharma PLC (the “Company”);
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4. |
The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
5. |
The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.
|
Date: April 23, 2018
|
/s/ Nicholas Robbins-Cherry
|
|
Nicholas Robbins-Cherry
|
||
Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: April 23, 2018
|
/s/ James N. Phillips
|
|
James N. Phillips
|
||
Chief Executive Officer
|
/s/ Nicholas Robbins-Cherry
|
||
Nicholas Robbins-Cherry
|
||
Chief Financial Officer
|