May 22, 2024
Biodexa Pharmaceuticals
PLC(“Biodexa” or the “Company”)
Biodexa Announces $7 Million of Gross
Proceeds from Warrant Exercises
Proceeds Cover Year 1 eRapa Phase 3
Obligations, Unlocking Twice that Amount in Non-dilutive Grant
Funding
Biodexa Pharmaceuticals PLC, (Nasdaq: BDRX), an
acquisition-focused clinical stage biopharmaceutical company
developing a pipeline of innovative products for the treatment of
diseases with unmet medical needs, announces $7 million of gross
proceeds from the exercise of previously issued warrants and an
agreement between the Company and several accredited investors to
exercise certain existing Series E warrants (“Series E Warrants”)
and Series F warrants (“Series F Warrants,” and together with the
Series E Warrants, the “Existing Warrants”) to purchase up to an
aggregate of 4,358,322 of the Company’s American Depositary Shares
(“ADSs) (each ADS represents 400 ordinary shares, nominal value
£0.001 of the Company (“Ordinary Shares”)).
Stephen Stamp, CEO and CFO, commented, “These
funds will more than cover our first year obligation under the
eRapa Phase 3 trial in Familial Adenomatous Polyposis and, because
the $17 million CPRIT grant includes a one-for-two match, will
unlock twice that amount in non-dilutive funding. We were delighted
with the data announced yesterday for eRapa in FAP, a rare orphan
disease, which showed a statistically significant decrease in
overall mean polyp burden (p=0.04) and an overall non-progression
rate of 83% at six months. Our scientific collaborators look
forward to presenting polyp burden data in FAP at 12 months
compared with baseline at the InSIGHT scientific conference in
Barcelona on June 19-22, 2024.”
Ladenburg Thalmann & Co. Inc. acted as the
exclusive placement agent for the warrant exercise transaction.
The Existing Warrants had initial exercise
prices of $2.20, and were issued by the Company on December 21,
2023, with each exercise occurring at a reduced exercise price of
$1.50 per ADS. The ADSs issuable upon exercise of the Existing
Warrants are registered pursuant to a registration statement (File
No. 333-274895), which was filed and declared effective by the
Securities and Exchange Commission (the “SEC”). Certain existing
warrant holders exercised warrants without a replacement warrant.
The gross proceeds to the Company from the exercise of the
previously issued warrants and Existing Warrants are expected to be
approximately $7 million prior to deducting placement agent fees
and estimated offering expenses.
In consideration for the immediate exercise of
the Existing Warrants for cash, the exercising holders will receive
new unregistered warrants (the “Replacement Warrants”) to purchase
an aggregate of 6,537,483 ADSs (equivalent to 2,614,993,200
Ordinary Shares) in a private placement pursuant to Section 4(a)(2)
of the Securities Act of 1933, as amended (the “1933 Act”). The
Replacement Warrants will have an exercise price of $2.50 per ADS,
and terms of exercise of one year and five years from issuance for
each Replacement Warrant received upon the exercise of a Series E
Warrant or Series F Warrant, respectively, in connection with this
transaction.
The Company intends to use the net proceeds from
the offering to advance its clinical stage assets and for working
capital and general corporate purposes.
The Replacement Warrants described above were
offered in a private placement pursuant to an applicable exemption
from the registration requirements of the 1933 Act and, along with
the ADSs issuable upon their exercise, have not been registered
under the 1933 Act, and may not be offered or sold in the United
States absent registration with the SEC or an applicable exemption
from such registration requirements. The securities were offered
only to accredited investors. The Company has agreed to file a
registration statement with the SEC covering the resale of the ADSs
issuable upon exercise of the Replacement Warrants.
This press release shall not constitute an offer
to sell or the solicitation of an offer to buy, nor shall there be
any sale of these securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to the
registration or qualification under the securities laws of any such
jurisdiction.
Total Voting RightsFollowing
exercise of the Existing Warrants, the Company's issued share
capital comprises 4,127,615,322 Ordinary Shares each with voting
rights. The Company does not hold any shares in treasury. This
figure of 4,127,615,322 may be used by shareholders in the Company
as the denominator for the calculations by which they will
determine if they are required to notify their interest in, or a
change in their interest in, the share capital of the Company. Each
of the Company’s American Depositary Shares comprises 400 Ordinary
Shares and therefore the equivalent number of ADSs in issue is
10,319,038.
About the Cancer Prevention and Research
Institute of TexasCPRIT was created by the Texas
Legislature and approved by a statewide vote in 2007 to lead the
Lone Star State’s fight against cancer. In 2019, Texas voters again
voted overwhelmingly to continue CPRIT with an additional $3
billion for a total $6 billion investment in cancer research and
prevention. To date, CPRIT has awarded over $3 billion in grants to
Texas research institutions and organizations through its academic
research, prevention and product development research programs.
CPRIT has also recruited more than 281 distinguished researchers to
Texas, supported the establishment, expansion or relocation of 51
companies to Texas and generated over $7.66 billion in additional
public and private investment. CPRIT funding has advanced
scientific and clinical knowledge and provided over 8.1 million
life-saving cancer prevention and early detection services to
Texans in all 254 counties. Learn more
at https://cprit.texas.gov.
For more information, please
contact:
Biodexa Pharmaceuticals PLC |
Stephen Stamp, CEO, CFOTel: +44 (0)29 20480
180www.biodexapharma.com |
About Biodexa Pharmaceuticals PLC
Biodexa Pharmaceuticals PLC (listed on NASDAQ:
BDRX) is a clinical stage biopharmaceutical company developing a
pipeline of innovative products for the treatment of diseases with
unmet medical needs. The Company’s lead development programs
include eRapa, under development for Familial Adenomatous Polyposis
and Non Muscle Invasive Blader Cancer: tolimidone, under
development for the treatment of type 1 diabetes; and MTX110, which
is being studied in aggressive rare/orphan brain cancer
indications.
eRapa is a proprietary oral tablet formulation
of rapamycin, also known as sirolimus. Rapamycin is an mTOR
(mammalian Target Of Rapamycin) inhibitor. mTOR has been shown to
have a significant role in the signalling pathway that regulates
cellular metabolism, growth and proliferation and is activated
during tumorgenesis.
Tolimidone is an orally delivered, potent and
selective activator of Lyn kinase. Lyn is a member of the Src
family of protein tyrosine kinases, which is mainly expressed in
hematopoietic cells, in neural tissues, liver, and adipose tissue.
Tolimidone demonstrates glycemic control via insulin sensitization
in animal models of diabetes and has the potential to become a
first in class blood glucose modulating agent.
MTX110 is a solubilised formulation of the
histone deacetylase (HDAC) inhibitor, panobinostat. This
proprietary formulation enables delivery of the product via
convection-enhanced delivery (CED) at chemotherapeutic doses
directly to the site of the tumor, by-passing the blood-brain
barrier and potentially avoiding systemic toxicity.
Biodexa is supported by three proprietary drug
delivery technologies focused on improving the bio-delivery and
bio-distribution of medicines. Biodexa’s headquarters and R&D
facility is in Cardiff, UK. For more information visit
www.biodexapharma.com.
Forward-Looking
Statements
Certain statements in this announcement may
constitute “forward-looking statements” within the meaning of
legislation in the United Kingdom and/or United States. Such
statements are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 and are based on
management’s belief or interpretation. All statements contained in
this announcement that do not relate to matters of historical fact
should be considered forward-looking statements. In certain cases,
forward-looking statements can be identified by the use of words
such as “plans”, “expects” or “does not anticipate”, or “believes”,
or variations of such words and phrases or statements that certain
actions, events or results “may”, “could”, “would”, “might” or
“will be taken”, “occur” or “be achieved.” Forward-looking
statements and information are subject to various known and unknown
risks and uncertainties, many of which are beyond the ability of
the Company to control or predict, that may cause their actual
results, performance or achievements to be materially different
from those expressed or implied thereby, and are developed based on
assumptions about such risks, uncertainties and other factors set
out herein.
Reference should be made to those documents that
Biodexa shall file from time to time or announcements that may be
made by Biodexa in accordance with the rules and regulations
promulgated by the SEC, which contain and identify other important
factors that could cause actual results to differ materially from
those contained in any projections or forward-looking statements.
These forward-looking statements speak only as of the date of this
announcement. All subsequent written and oral forward-looking
statements by or concerning Biodexa are expressly qualified in
their entirety by the cautionary statements above. Except as may be
required under relevant laws in the United States, Biodexa does not
undertake any obligation to publicly update or revise any
forward-looking statements because of new information, future
events or events otherwise arising.
29 September 2023
Biodexa Pharmaceuticals
PLC(“Biodexa” or
the “Company”)
Interim results for the
six months ended 30 June 2023
Biodexa Pharmaceuticals PLC (NASDAQ: BDRX), a
clinical stage biopharmaceutical company developing a pipeline of
products aimed at primary and metastatic cancers of the brain,
announces its unaudited interim results for the six months ended 30
June 2023 which will also be made available on the Company’s
website at www.biodexapharma.com.
OPERATIONAL HIGHLIGHTS
The Company announced the following in the six
months ended 30 June 2023:
- Approval by the Data Safety
Monitoring Board to escalate the dose of MTX110 in recurrent
glioblastoma (rGBM) to 90µM, the expected optimal therapeutic
dose.
- Closing of a private placement in
the US to raise $6.0m before expenses.
- Following shareholder approval, and
in line with its realigned strategy, the Company de-listed from AIM
and its name was changed to Biodexa Pharmaceuticals PLC.
- Initiation of a new R&D
programme, MTD217, combining MTX110 with an oxidative
phosphorylation inhibitor targeted at leptomeningeal
carcinomatosis.
- Closing of a registered direct
offering and private placement in the US to raise $3.3m before
expenses.
Post period end:
- Completion of enrolment of nine
patients in a Phase I study of MTX110 in diffuse midline glioma
(DMG), formerly known as diffuse intrinsic pontine glioma
(DIPG).
FINANCIAL HIGHLIGHTS
- Total revenue for 1H23 was £0.30m
(1H22: £0.47m). Total revenue represents income from the Company’s
R&D collaboration with Janssen Pharmaceutica NV.
|
- Research and development costs in
1H23 were £2.25m (1H22: £2.41m) following a reduction in staff
numbers offset by increased costs of the Company’s Phase I study of
MTX110 in rGBM.
|
- Administrative expenses increased
to £2.29m (1H22: £1.85m) primarily due to increased legal and
professional expenses associated with financings and aborted
acquisitions.
|
- Net cash used in operating
activities (after changes in working capital) in 1H23 was £3.88m
(1H22: £3.54m).
|
- The Company’s cash balance at 30
June 2023 was £5.23m.
|
For more information, please contact:
Biodexa Pharmaceuticals PLC |
Stephen Stamp, CEO, CFO |
Tel: +44 (0)29 2048 0180 |
www.biodexapharma.com |
|
Edison Group (US Investor Relations)Alyssa
FactorTel: +1 (860) 573 9637Email: afactor@edisongroup.com |
About Biodexa Pharmaceuticals
PLCBiodexa Pharmaceuticals PLC (listed on NASDAQ: BDRX) is
a clinical stage biopharmaceutical company developing a pipeline of
products aimed at primary and metastatic cancers of the brain. The
Company’s lead candidate, MTX110, is being studied in aggressive
rare/orphan brain cancer indications including recurrent
glioblastoma and diffuse midline glioma. MTX110 is a liquid
formulation of the histone deacetylase (HDAC) inhibitor,
panobinostat. This proprietary formulation enables delivery of the
product via convection-enhanced delivery (CED) at potentially
chemotherapeutic doses directly to the site of the tumour,
by-passing the blood-brain barrier and avoiding systemic
toxicity.Biodexa's headquarters and R&D facility is in Cardiff,
UK. For more information, please visit
www.biodexapharma.comForward-Looking
StatementsCertain statements in this announcement are
forward-looking statements or information (collectively,
forward-looking statements). Biodexa hereby provides cautionary
statements identifying important factors that could cause the
actual results to differ materially from those projected in the
forward-looking statements. Any statements that express, or involve
discussions as to, expectations, beliefs, plans, objectives,
assumptions or future events or performance (often, but not always,
through the use of words or phrases such as “may”, “is expected
to”, “anticipates”, “estimates”, “intends”, “plans”, “projection”,
“could”, “vision”, “goals”, “objective” and “outlook”) are not
historical facts and may be forward-looking and may involve
estimates, assumptions and uncertainties which could cause actual
results or outcomes to differ materially from those expressed in
the forward-looking statements.By their nature, forward-looking
statements involve numerous assumptions, inherent risks and
uncertainties, both general and specific, which contribute to the
possibility that the predicted outcomes may not occur or may be
delayed. The risks, uncertainties and other factors many of which
are beyond the control of Biodexa, that could influence actual
results include, but are not limited to: a limited operating
history; regulatory risks; substantial capital and liquidity
requirements; financing risks and dilution to shareholders;
competition; reliance on management and dependence on key
personnel; conflicts of interest of management; exposure to
potential litigation, and other factors beyond the control of
Biodexa. Forward looking statements are based on estimates and
assumptions made by management in light of their experience of
historical trends, current conditions and expected future
developments, as well as factors that are believed to be
appropriate. Such factors include, among others, Biodexa’s future
product revenues, stage of development, additional capital
requirements, risks associated with the completion and timing of
clinical trials and obtaining regulatory approval to market
Biodexa’s products, the ability to protect its intellectual
property, dependence upon collaborative partners, changes in
government regulation or regulatory approval processes and rapid
technological change in the industry. These factors should be
considered carefully and readers are cautioned to not place undue
reliance on such forward-looking statements.Further, any
forward-looking statement speaks only as of the date on which such
statement is made, and, except as required by applicable law,
Biodexa undertakes no obligation to update any forward-looking
statement to reflect events or circumstances after the date on
which such statements are made or to reflect the occurrence of
unanticipated events. New factors emerge from time to time, and it
is not possible for management to predict all such factors and to
assess in advance the impact of each such factor on the business of
the Company or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those
contained in any forward-looking statement.Comparisons of results
for current and any prior periods are not intended to express any
future trends or indications of future performance, unless
expressed as such, and should only be viewed as historical data.
You should, however, review the factors and risks we describe in
the reports we will file from time to time with the US Securities
and Exchange Commission after the date of this announcement. As a
result of these factors, we cannot assure you that the
forward-looking statements in this announcement will prove to be
accurate. Furthermore, if our forward-looking statements prove to
be inaccurate, the inaccuracy may be material. In light of the
significant uncertainties in these forward-looking statements, you
should not regard these statements as a representation or warranty
by us or any other person that we will achieve our objectives and
plans in any specified timeframe, or at all. |
|
CHIEF EXECUTIVE’S REVIEW
Our primary focus in the first half of 2023 was
on re-financing the Company before our cash runway was due to
expire at the end of the first quarter of 2023 and then, having
secured the immediate future, executing on our realigned
strategy.
Realigned strategy
In the course of seeking finance for the Company
in late 2022 it became clear to us that a company developing
therapeutics was more investable than a drug delivery platform
company. Accordingly, the Board determined that the Company should
be repositioned as a therapeutics company, based around its MTX110
clinical asset, supported by its three enabling technologies,
Q-Spera™, MidaSolve™ and MidaCore™.
Going forward, our strategy is to move our
development programmes into the clinic and add value by generating
clinical data to demonstrate proof-of-concept before seeking
partners.
Strategic acquisitions
With a single clinical asset, MTX110 being
developed for three types of rare brain cancers, the Board has
looked for opportunities to broaden the Company’s R&D pipeline
through acquisitions of companies or licensing of assets with a
focus on rare diseases and/or oncology. In December 2022, we
entered into an agreement to acquire Bioasis Technologies, Inc.
(Bioasis) and organised a $10.0m financing, however the transaction
was voted down in General Meeting in January 2023. We continue to
look for suitable assets which are either in the clinic or expected
soon to enter the clinic and to which value can be added in the
near term.
R&D update
MTX110MTX110, a novel formulation of
panobinostat administered through convection enhanced delivery
(CED), is in clinical development for intractable brain cancers
including recurrent glioblastoma (rGBM), diffuse midline glioma
(DMG) and medulloblastoma.
MTX110 employs our MidaSolve technology to
solubilize panobinostat, a histone deacetylase (HDAC) inhibitor, so
that it can be delivered directly to a patient’s brain tumour via
an onboard pump and catheter (or CED) system. Our Phase I study of
MTX110 in rGBM is ongoing at two clinical centres: Duke University
and Baptist MD Anderson Cancer Center. In January 2023, the Data
Safety Monitoring Board approved escalation of the dose of MTX110
in rGBM to 90µM, the expected optimal therapeutic dose. The study
aims to recruit two cohorts, each with a minimum of four patients;
the first cohort will receive MTX110 following implantation of the
CED system and the second cohort will also receive MTX110 but with
an option, at the discretion of the treating investigator, to
re-position the catheter into an area of new lesion upon tumour
progression with the objective of increasing tumour coverage and
improving survival.
In July 2023, the second Phase I study in DMG at
Columbia University completed the enrolment of nine patients. All
patients (age range 4-17 years) received radiation therapy as
standard of care. Each patient subsequently underwent surgery with
implantation of an intratumoral catheter and a programmable
subcutaneous pump and eight out of nine patients received two
infusions of MTX110 via CED separated by a period of one week. No
dose limiting toxicities related to the study drug have been
reported.
A Phase I study of MTX110 in medulloblastoma
remains ongoing at the University of Texas.
Q-SpheraThe Company’s drug delivery technologies
have been de-prioritised. We intend to continue our existing, and
seek new, collaborations for our technology but we will not be
expanding our internal Q-Sphera pipeline.
Q-octreotide and Q-brexpiprazole remain
available for potential licensing.
MTD217In March 2023 we announced the start of a
new preclinical development programme, coded MTD217, which explores
simultaneous inhibition of key metabolic pathways in oncology,
including the so-called Warburg effect and oxidative
phosphorylation (OXPHOS). We have been able to demonstrate up to a
six-fold synergistic effect of administering MTX110 with an OXPHOS
inhibitor in vitro in three patient-derived cancer cell lines. On
the back of those data, we have established new patent positions to
protect these combination formulations. Our initial target is
treatment of leptomeningeal disease, a lethal complication in which
metastatic cancer cells invade the cerebrospinal fluid and central
nervous system.
Financing
February 2023 Private Placement*Following the
termination of the Bioasis acquisition and related financing, we
were successful in raising $6.0m before expenses in a private
placement in the US in February 2023. We issued 8,125 ADSs
(3,250,200 ordinary shares), 155,461 pre-funded warrants
(62,184,525 ordinary shares), 32,327 Series A warrants (12,931,020
ordinary shares) and 48,491 Series B warrants (19,396,530 ordinary
shares). In addition, 1,342 warrants (536,800 ordinary shares) were
issued to the placement agent and 1,562 warrants exercisable for
ADSs (625,000 ordinary shares) were issued to an investor in
connection with a waiver of certain rights. All warrants issued
were exercisable for ADSs.
May 2023 Registered Direct Offering and Private
Placement*We utilised our capacity under our Registration Statement
on Form F-3 to raise $3.32m in a registered direct offering in the
US. In connection with the registered direct offering and related
private placement, we issued 276,699 ADSs (110,679,610 ordinary
shares), 415,043 Series C warrants (166,017,300 ordinary shares)
and 276,689 Series D warrants (110,675,600 ordinary shares). In
addition, 11,067 warrants (4,426,800 ordinary shares) were issued
to the placement agent. All warrants issued were exercisable for
ADSs.
*The above ADS numbers reflect the ADS ratio
change effected on 5 July 2023.
1H23 FINANCIAL
REVIEW
The unaudited results for the six months ended
30 June 2023 are discussed below:
Key performance indicators (KPIs):
|
1H 2023 |
1H 2022 |
Change |
|
|
|
|
Total gross revenue(1) |
£0.30m |
£0.47m |
(36)% |
R&D costs |
£2.25m |
£2.41m |
(7)% |
R&D as % of operating costs |
50% |
57% |
n/a |
Net cash inflow/(outflow) for the period |
£2.39m |
£(3.63)m |
n/m |
|
|
|
|
(1) Total
revenue represents income from R&D collaborations. |
Biodexa’s KPIs focus on the key areas of
operating results, R&D spend and cash management. These
measures provide information on the core R&D operations.
Additional financial and non-financial KPIs may be adopted in due
course.
Revenues
Total revenue for the six months to 30 June 2023
was £0.30m compared to £0.47m in the first six months of 2022, a
decrease of 36%. Revenue in 1H23 and 1H22 was entirely comprised of
income from R&D collaborations with Janssen.
Research and Development
R&D costs in 1H23 reduced by £0.16m, or 7%,
to £2.25m compared with £2.41m in 1H22. The percentage of R&D
costs as a percentage of operating costs reduced in the period to
50% from 57%. The reduction in R&D costs in 1H23 reflects the
decision made by the Directors to reposition as a therapeutics
company and to not expand our internal drug delivery platform. The
resulting cost-reduction program in March 2023 saw seven staff
members being made redundant at a one-time cost of £88,000. These
reductions were offset in part by increased spend on the MTX110
Phase 1 clinical trial costs of £0.3m.
Administrative Costs
Administrative expenses in 1H23 increased by 24%
to £2.29m from £1.85m in 1H22. The increase in administrative costs
in 1H23 is a result of the Company expensing legal and professional
fees of £0.40m in connection with the successful financing
transactions and aborted acquisitions.
Finance Income and Expense
Finance income in 1H23 and 1H22 included gains
in respect of an equity settled derivative financial liability of
£0.39m (1H22: £0.40m). The gain arose as a result of the fall in
the Biodexa share price. In addition, the Company earned interest
on cash deposits.
Finance expense in the period related to lease
liabilities.
Cash Flows
Cash outflows from operating activities in 1H23
were £3.88m compared to £3.54m in 1H22, driven by a net loss of
£3.57m (1H22: £3.06m) and after positive working capital of £0.21m
(1H22: negative £0.05m) and other negative non-cash items totalling
£0.52m (1H22: negative £0.43m).
Net cash generated in investing activities in
1H23 of £0.02m (1H22: outflow £0.02m) includes interest received on
cash deposits of £0.02m.
Net cash generated in financing activities in
1H23 was £6.25m (1H22: outflow £0.08m), which was driven by receipt
of funds from share issuances, including the exercise of pre-funded
warrants, of £6.35m. This was offset by payments on lease
liabilities of £0.10m.
Overall, cash increased by £2.39m in 1H23
compared to a decrease of £3.63m in 1H22. This resulted in a cash
balance at 30 June 2023 of £5.23m compared with £6.42m at 30 June
2022 and £2.84m at 31 December 2022.
Post-period end
On 5 July 2023, and in an effort to bring the
ADS price into compliance with NASDAQ’s minimum bid price per share
requirement, we effected a ratio change in the number of ordinary
shares represented by our ADSs from five ordinary shares per ADS to
400 ordinary shares per ADS.
Going
concern
Biodexa has experienced net losses and
significant cash outflows from cash used in operating activities
over the past years as it develops its portfolio. For the six
months to 30 June 2023, the Group incurred a consolidated loss from
operations of £3.57m (1H22: £3.06m) and negative cash flows from
operating activities of £3.88m (1H22: £3.54m). As of 30 June 2023,
the Group had accumulated deficit of £138.97m.
The Group’s future viability is dependent on its
ability to raise cash from financing activities to finance its
development plans until commercialisation, generate cash from
operating activities and to successfully obtain regulatory approval
to allow marketing of its development products. The Group’s failure
to raise capital as and when needed could have a negative impact on
its financial condition and ability to pursue its business
strategies.
The Group's consolidated financial statements
have been presented on a going concern basis, which contemplates
the realization of assets and the satisfaction of liabilities in
the normal course of business.
As at 30 June 2023, the Group had cash and cash
equivalents of £5.23m. The Directors forecast that the Group
currently has enough cash to fund its planned operations into the
first quarter of 2024. If the Company does not secure additional
funding before the first quarter of 2024, it will no longer be a
going concern and would likely be placed in Administration.
The Directors have prepared cash flow forecasts
and considered the cash flow requirement for the Group for the next
three years including the period 12 months from the date of
approval of this interim financial information. These forecasts
show that further financing will be required before the first
quarter of 2024 assuming, inter alia, that certain development
programs and other operating activities continue as currently
planned. If we raise additional funds through the issuance of debt
securities or additional equity securities, it could result in
dilution to our existing shareholders, increased fixed payment
obligations and these securities may have rights senior to those of
our ordinary shares (including the ADSs) and could contain
covenants that would restrict our operations and potentially impair
our competitiveness, such as limitations on our ability to incur
additional debt, limitations on our ability to acquire, sell or
license intellectual property rights and other operating
restrictions that could adversely impact our ability to conduct our
business. Any of these events could significantly harm our
business, financial condition and prospects.
In the Directors’ opinion, the environment for
financing of small and micro-cap biotech companies continues to be
challenging. While this may present acquisition and/or merger
opportunities with other companies with limited or no access to
financing, as noted above, any attendant financings by Biodexa are
likely to be dilutive. The Directors continue to evaluate financing
options, including those connected to acquisitions and/or mergers,
potentially available to the Group. Any alternatives considered are
contingent upon the agreement of counterparties and accordingly,
there can be no assurance that any of alternative courses of action
to finance the Company would be successful. This requirement for
additional financing in the short term represents a material
uncertainty that may cast significant doubt upon the Group and
Parent Company’s ability to continue as a going concern. Should it
become evident in the future that there are no realistic financing
options available to the Company which are actionable before its
cash resources run out then the Company will no longer be a going
concern. In such circumstances, we would no longer be able to
prepare financial statements under paragraph 25 of IAS 1. Instead,
the financial statements would be prepared on a liquidation basis
and assets would stated at net realizable value and all liabilities
would be accelerated to current liabilities.
The Directors believe there are adequate options
and time available to secure additional financing for the Company
and after considering the uncertainties, the Directors consider it
is appropriate to continue to adopt the going concern basis in
preparing these financial statements.
Our forecast of the period of time through which
our financial resources will be adequate to support our operations
is a forward-looking statement and involves risks and
uncertainties, and actual results could vary as a result of a
number of factors, including the timing of clinical trials. We have
based this estimate on assumptions that may prove to be wrong, and
we could utilize our available capital resources sooner than we
currently expect. If we lack sufficient capital to expand our
operations or otherwise capitalize on our business opportunities,
our business, financial condition and results of operations could
be materially adversely affected.
Stephen StampChief Executive
Officer and Chief Financial Officer
Consolidated Statements of Comprehensive
IncomeFor the year six month period ended 30
June
|
Note |
2023unaudited£’000 |
2022unaudited£’000 |
Revenue |
|
298 |
468 |
Other income |
|
- |
16 |
Research and development costs |
|
(2,251) |
(2,413) |
Administrative costs |
|
(2,291) |
(1,849) |
Loss from operations |
|
(4,244) |
(3,778) |
Finance income |
2 |
410 |
404 |
Finance expense |
2 |
(22) |
(24) |
Loss before tax |
|
(3,856) |
(3,398) |
Taxation |
3 |
288 |
337 |
Loss)
for the period attributable to the owners of the
parent |
|
(3,568) |
(3,061) |
Other comprehensive income: |
|
|
|
Items that will or may be reclassified subsequently to profit or
loss: |
|
|
|
Total other comprehensive gain net of tax |
|
- |
- |
Total comprehensive loss attributable to the owners of the
parent |
|
(3,568) |
(3,061) |
Loss per share |
|
|
|
Basic and diluted loss per ordinary share – pence |
4 |
(4)p |
(62)p |
|
|
|
|
The accompanying notes form part of these financial
statements
Distribution costs, sales and marketing are
immaterial in 2023 and 2022 and have been included within
administrative costs.
Consolidated Statements of Financial
Position
|
|
Note |
As at 30 June
2023
unaudited£’000 |
As at 31 December
2022£’000 |
Assets |
|
|
|
|
Non-current assets |
|
|
|
|
Property, plant and equipment |
|
|
693 |
831 |
Intangible assets |
|
|
5 |
6 |
|
|
|
698 |
837 |
Current assets |
|
|
|
|
Trade and other receivables |
|
|
903 |
1,006 |
Taxation |
|
|
1,134 |
846 |
Cash and cash equivalents |
|
|
5,227 |
2,836 |
|
|
|
7,264 |
4,688 |
Total assets |
|
|
7,962 |
5,525 |
Liabilities |
|
|
|
|
Non-current liabilities |
|
|
|
|
Borrowings |
|
5 |
380 |
463 |
|
|
|
380 |
463 |
Current liabilities |
|
|
|
|
Trade and other payables |
|
|
1,755 |
1,447 |
Borrowings |
|
5 |
164 |
161 |
Provisions |
|
6 |
- |
207 |
Derivative financial liability |
|
7 |
364 |
85 |
|
|
|
2,283 |
1,900 |
Total liabilities |
|
|
2,663 |
2,363 |
Issued capital and reserves attributable to owners of the
parent |
|
|
|
|
Share capital |
|
8 |
5,341 |
1,108 |
Share premium |
|
|
84,653 |
83,667 |
Merger reserve |
|
|
53,003 |
53,003 |
Warrant reserve |
|
|
1,275 |
720 |
Accumulated deficit |
|
|
(138,973) |
(135,336) |
Total equity |
|
|
5,299 |
3,162 |
Total equity and liabilities |
|
|
7,962 |
5,525 |
The accompanying notes form part of these financial
statementsConsolidated Statements of Cash
FlowsFor the six month period ended 30
June
|
Note |
2023unaudited£’000 |
2022unaudited£’000 |
Cash flows from operating activities |
|
|
|
Loss for the period |
|
(3,568) |
(3,061) |
Adjustments for: |
|
|
|
Depreciation of property, plant and equipment |
|
72 |
96 |
Depreciation of right of use asset |
|
70 |
86 |
Amortisation of intangible fixed asset |
|
1 |
- |
Loss on disposal of fixed assets |
|
- |
2 |
Finance income |
2 |
(410) |
(404) |
Finance expense |
2 |
22 |
24 |
Share-based payment expense |
|
15 |
100 |
Taxation |
3 |
(288) |
(337) |
Cash flows from operating activities before changes in
working capital |
|
(4,086) |
(3,494) |
Decrease/(increase) in trade and other receivables |
|
103 |
(224) |
Increase in trade and other payables |
|
309 |
187 |
Decrease in provisions |
|
(207) |
(8) |
Cash used in operations |
|
(3,881) |
(3,539) |
Taxes payments |
|
- |
- |
Net cash used in operating activities |
|
(3,881) |
(3,539) |
Consolidated Statements of Cash Flows
(continued)For the six month period ended 30
June
|
Note |
2023unaudited£’000 |
2022unaudited£’000 |
Investing activities |
|
|
|
Purchases of property, plant and equipment |
|
(4) |
(33) |
Proceeds from disposal of fixed assets |
|
- |
9 |
Interest received |
|
24 |
7 |
Net cash generated from/(used in) investing
activities |
|
20 |
(17) |
Financing activities |
|
|
|
Interest paid |
|
(7) |
(5) |
Amounts paid on lease liabilities |
|
(95) |
(73) |
Share issues including warrants, net of costs |
8 |
6,354 |
- |
Net cash generated from/(used in) financing
activities |
|
6,252 |
(78) |
Net increase/(decrease) in cash and cash
equivalents |
|
2,391 |
(3,634) |
Cash and cash equivalents at beginning of
period |
|
2,836 |
10,057 |
Exchange (losses)/gains on cash and cash equivalents |
|
- |
- |
Cash and cash equivalents at end of period |
|
5,227 |
6,423 |
The accompanying notes form part of these financial
statements
Consolidated Statements of Changes in
Equity (unaudited)
|
Note |
Sharecapital£’000 |
Sharepremium£’000 |
Merger reserve£’000 |
Warrant reserve £’000 |
Accumulateddeficit£’000 |
Totalequity£’000 |
At 1 January 2023 |
|
1,108 |
83,667 |
53,003 |
720 |
(135,336) |
3,162 |
Loss for the period |
|
- |
- |
- |
- |
(3,568) |
(3,568) |
Total comprehensive loss |
|
- |
- |
- |
- |
(3,568) |
(3,568) |
Transactions with owners: |
|
|
|
|
|
|
|
Shares issued on 15 February 2023 |
|
65 |
99 |
- |
4,803 |
- |
4,967 |
Costs associated with share issue on 15 February 2023 |
|
- |
(29) |
- |
(874) |
- |
(903) |
Shares issued on 26 May 2023 |
|
2,214 |
(1,404) |
- |
1,214 |
- |
2,024 |
Costs associated with share issue on 26 May 2023 |
|
- |
- |
- |
(317) |
(210) |
(527) |
Exercise of pre-funded warrants during period |
|
1,244 |
1,024 |
- |
(2,266) |
- |
2 |
Exercise of warrants during period |
|
710 |
1,296 |
- |
(2,005) |
- |
1 |
Share-based payment charge |
|
- |
- |
- |
- |
141 |
141 |
Total contribution by and distributions to
owners |
|
4,233 |
986 |
- |
555 |
(69) |
5,705 |
At 30 June 2023 |
|
5,341 |
84,653 |
53,003 |
1,275 |
(138,973) |
5,299 |
|
Note |
Sharecapital£’000 |
Sharepremium£’000 |
Merger reserve£’000 |
Warrant reserve £’000 |
Accumulateddeficit£’000 |
Totalequity£’000 |
At 1 January 2022 |
|
1,098 |
83,434 |
53,003 |
720 |
(127,803) |
10,452 |
Loss for the period |
|
- |
- |
- |
- |
(3,061) |
(3,061) |
Total comprehensive loss |
|
- |
- |
- |
- |
(3,061) |
(3,061) |
Transactions with owners: |
|
|
|
|
|
|
|
Exercise of warrants on 22 March 2022 |
|
- |
- |
- |
- |
- |
- |
Shares issued on 3 May 2022 |
|
- |
|
- |
- |
- |
- |
Share-based payment charge |
|
- |
- |
- |
- |
100 |
100 |
Total contribution by and distributions to
owners |
|
- |
|
- |
- |
100 |
100 |
At 30 June 2022 |
|
1,098 |
83,434 |
53,003 |
720 |
(130,764) |
7,491 |
The accompanying notes form part of these financial
statements
Notes Forming Part of The Consolidated
Unaudited Interim Financial InformationFor the six
month period ended 30 June 2023
1. Basis of
preparation
The unaudited interim consolidated financial
information for the six months ended 30 June 2023 has been prepared
following the recognition and measurement principles of the
International Financial Reporting Standards, International
Accounting Standards and Interpretations (collectively IFRS) issued
by the International Accounting Standards Board (IASB), and as
adopted by the UK and in accordance with International Accounting
Standard 34 Interim Financial Reporting (‘IAS 34’). The interim
consolidated financial information does not include all the
information and disclosures required in the annual financial
information and should be read in conjunction with the audited
financial statements for the year ended 31 December 2022.
The condensed interim financial information
contained in this interim statement does not constitute statutory
financial statements as defined by section 434(3) of the Companies
Act 2006. The condensed interim financial information has not been
audited. The comparative financial information for the six months
ended 30 June 2022 and the year ended 31 December 2022 in this
interim financial information does not constitute statutory
accounts for that year. The statutory accounts for 31 December 2022
have been delivered to the UK Registrar of Companies. The auditor’s
report on those accounts was unqualified and did not contain a
statement under section 498(2) or 498(3) of the Companies Act 2006.
The auditor’s report did draw attention to a material uncertainty
related to going concern and the requirement, as of the date of the
report, for additional funding to be raised by the Company by the
fourth quarter of 2023.
Biodexa Pharmaceutical’s annual reports may be
downloaded from the Company’s website at
https://biodexapharma.com/investors/financial-reports-and-presentations/#financial-reportsor
a copy may be obtained from 1 Caspian Point, Caspian Way, Cardiff
CF10 4DQ.
Going Concern
Biodexa has experienced net losses and
significant cash outflows from cash used in operating activities
over the past years as it develops its portfolio. For the six
months to 30 June 2023, the Group incurred a consolidated loss from
operations of £3.57m (1H22: loss £3.06m) and negative cash flows
from operating activities of £3.88m (1H22 £3.54m). As of 30 June
2023, the Group had accumulated deficit of £138.97m.
The Group’s future viability is dependent on its
ability to raise cash from financing activities to finance its
development plans until commercialisation, generate cash from
operating activities and to successfully obtain regulatory approval
to allow marketing of its development products. The Group’s failure
to raise capital as and when needed could have a negative impact on
its financial condition and ability to pursue its business
strategies.
The Group's consolidated financial statements
have been presented on a going concern basis, which contemplates
the realization of assets and the satisfaction of liabilities in
the normal course of business.
As at 30 June 2023, the Group had cash and cash
equivalents of £5.23m. The Directors forecast that the Group
currently has enough cash to fund its planned operations into the
first quarter of 2024. If the Company does not secure additional
funding before the first quarter of 2024, it will no longer be a
going concern and would likely be placed in Administration.
The Directors have prepared cash flow forecasts
and considered the cash flow requirement for the Group for the next
three years including the period 12 months from the date of
approval of this interim financial information. These forecasts
show that further financing will be required before the first
quarter of 2024 assuming, inter alia, that certain development
programs and other operating activities continue as currently
planned. If we raise additional funds through the issuance of debt
securities or additional equity securities, it could result in
dilution to our existing shareholders, increased fixed payment
obligations and these securities may have rights senior to those of
our ordinary shares (including the ADSs) and could contain
covenants that would restrict our operations and potentially impair
our competitiveness, such as limitations on our ability to incur
additional debt, limitations on our ability to acquire, sell or
license intellectual property rights and other operating
restrictions that could adversely impact our ability to conduct our
business. Any of these events could significantly harm our
business, financial condition and prospects.
In the Directors’ opinion, the environment for
financing of small and micro-cap biotech companies is as
challenging as it has been since the financial crisis of 2008-10.
While this may present acquisition and/or merger opportunities with
other companies with limited or no access to financing, as noted
above, any attendant financings by Biodexa are likely to be
dilutive. The Directors continue to evaluate financing options,
including those connected to acquisitions and/or mergers,
potentially available to the Group. Any alternatives considered are
contingent upon the agreement of counterparties and accordingly,
there can be no assurance that any alternative courses of action to
finance the Company would be successful. This requirement for
additional financing in the short term represents a material
uncertainty that may cast significant doubt upon the Group and
Parent Company’s ability to continue as a going concern. Should it
become evident in the future that there are no realistic financing
options available to the Company which are actionable before its
cash resources run out then the Company will no longer be a going
concern. In such circumstances, we would no longer be able to
prepare financial statements under paragraph 25 of IAS 1. Instead,
the financial statements would be prepared on a liquidation basis
and assets would stated at net realizable value and all liabilities
would be accelerated to current liabilities.
The Directors believe there are adequate options
and time available to secure additional financing for the Company
and after considering the uncertainties, the Directors consider it
is appropriate to continue to adopt the going concern basis in
preparing these financial statements.
Our forecast of the period of time through which
our financial resources will be adequate to support our operations
is a forward-looking statement and involves risks and
uncertainties, and actual results could vary as a result of a
number of factors, including the timing of clinical trials. We have
based this estimate on assumptions that may prove to be wrong, and
we could utilize our available capital resources sooner than we
currently expect. If we lack sufficient capital to expand our
operations or otherwise capitalize on our business opportunities,
our business, financial condition and results of operations could
be materially adversely affected.
2. Finance
income and expense
|
Six months ended 30 June
2023unaudited£’000 |
Six months ended 30 June
2022unaudited£’000 |
Finance income |
|
|
Interest received on bank deposits |
24 |
6 |
Gain on equity settled derivative financial liability |
386 |
398 |
Total finance income |
410 |
404 |
The gain on the equity settled derivative
financial liability in 1H23 and 1H22 arose as a result of the fall
in the Biodexa share price.
|
Six months ended 30 June
2023unaudited£’000 |
Six months ended 30 June
2022unaudited£’000 |
Finance expense |
|
|
Interest expense on lease liabilities |
15 |
24 |
Other loans |
7 |
- |
Total finance expense |
22 |
24 |
3. Taxation
Income tax is recognised or provided at amounts
expected to be recovered or to be paid using the tax rates and tax
laws that have been enacted or substantively enacted at the Group
Statement of Financial Position date. Research and development tax
credits are recognised on an accruals basis and are included as an
income tax credit under current assets. The research and
development tax credit recognised is based on management’s estimate
of the expected tax claim for the period and is recorded within
taxation under the Small and Medium-sized Enterprise Scheme.
|
Six months ended 30 June
2023unaudited£’000 |
Six months ended 30 June
2022unaudited£’000 |
Income tax credit |
288 |
337 |
4. Loss
per share
Basic loss per share amounts are calculated by
dividing the net loss for the period from continuing operations,
attributable to ordinary equity holders of the parent company, by
the weighted average number of ordinary shares outstanding during
the period. As the Group made a loss for the period the diluted
loss per share is equal to the basic loss per share.
|
Six months ended 30 June
2023unaudited£’000 |
Six months ended 30 June
2022unaudited£’000 |
Numerator |
|
|
Loss used in basic EPS and diluted EPS: |
(3,568) |
(3,061) |
Denominator |
|
|
Weighted average number of ordinary shares used in basic EPS |
99,191,082 |
4,923,828 |
|
|
|
Basic and diluted loss per share: |
(4)p |
(62)p |
At a General Meeting on 24 March 2023,
shareholders approved a consolidation of the Company’s Ordinary
Shares on a one for 20 basis. As a result, the par value of the
Ordinary Shares was changed from £0.001 per share to £0.02 per
share. The denominator has been calculated to reflect the share
consolidation in the current and prior period.
At a General Meeting on 14 June 2023,
shareholders approved the subdivision and redesignation of the
Company’s Issued Ordinary Shares of £0.02 each into to one Ordinary
Share of £0.001 each and 19 ‘B’ Deferred Shares of £0.001 each. The
‘B’ Deferred Shares have limited rights and are effectively
valueless. The share sub-division and redesignation did not impact
the calculation of the denominator as the number of Issued Ordinary
Shares did not change.
On 15 February 2023 the company completed a
private placement for the sale of (i)8,125 ADSs (3,250,200 Ordinary
Shares), (ii) 32,327 ADSs (12,931,020 Ordinary Shares) issuable
upon the exercise of Series A warrants, (iii) 48,491 ADSs
(19,396,530 Ordinary Shares) issuable upon the exercise of Series B
warrants, and (iv) 155,461 ADSs (62,184,525 Ordinary Shares)
issuable upon the exercise of pre-funded warrants, subject to
certain reset provisions set forth in the Pre-Funded Warrants, at
an initial purchase price of $185.60 per ADS, for aggregate gross
proceeds of approximately $6.0 million. The issuance of the Series
A warrants, Series B warrants and any pre-funded warrants issuable
upon a reset was subject to shareholder approval at a general
meeting on 24 March 2023.
In addition, in connection with the February
Private Placement the Company entered into a Waiver to the
Securities Purchase Agreement (‘SPA’), dated 13 December 2022
between the Company and Armistice Capital Master Fund Ltd.
(‘Armistice’), as amended on 16 December 2022, providing for a
permanent waiver of certain equity issuance prohibitions and
participation rights under the SPA. The Company agreed to, subject
to receipt of shareholder approval at the General Meeting on 24
March 2023, issue to Armistice 1,562 Series A ADS warrants
exercisable for 625,000 Ordinary Shares (‘Investor warrants’).
The Series A and Series B warrants are
exercisable on an ‘alternative cashless basis’ effectively allowing
the holders to exercise for nil consideration.
All resolutions were passed at the General
Meeting on 24 March 2023.On 26 May 2023 the company completed a
Registered Direct Offering for the sale of (i) 276,699 ADSs
(110,679,610 Ordinary Shares), (ii) 415,043 ADSs (166,017,300
Ordinary Shares) issuable upon the exercise of Series C warrants,
and (iii) 276,689 ADSs (110,675,600 Ordinary Shares) issuable upon
the exercise of Series C warrants, at an initial price per ADS of
$12.00, for aggregate gross proceeds of $3.32 million. The issuance
of the Series C warrants and Series D warrants issuable was subject
to shareholder approval at a general meeting on 14 June 2023.
The Series C warrants are exercisable on an
‘alternative cashless basis’ effectively allowing the holders to
exercise for nil consideration.
All resolutions were passed at the General
Meeting on 14 June 2023.
The Company has considered the guidance set out
in IAS 33 in calculating the denominator in connection with the
issuance of Series A, Series B, Series C, Pre-funded and Investor
warrants. Management have recognised the warrants from the date of
grant rather than the date of issue of the corresponding Ordinary
Shares when calculating the denominator.
The Group has made a loss in the current and
previous periods presented, and therefore the options and warrants
are anti-dilutive. As a result, diluted earnings per share is
presented on the same basis as basic earning per share.
*The above ADS numbers reflect the ADS ratio
change effected on 5 July 2023.
5. Borrowings
|
As at 30 June 2023
unaudited£’000 |
As at 31 December
2022£’000 |
Current |
|
|
Lease liabilities |
164 |
161 |
Total |
164 |
161 |
Non-current |
|
|
Lease liabilities |
380 |
463 |
Total |
380 |
463 |
Book values approximate to fair value at 30 June
2023 and 31 December 2022.
Obligations under finance leases are secured by a
fixed charge over the fixed assets to which they relate. During the
period the finance lease was satisfied.
6. Provision
|
As at 30 June 2023
unaudited£’000 |
As at 31 December
2022£’000 |
Opening provision at 1 January |
207 |
50 |
Utilisation of provision |
(207) |
(43) |
Provision recognised during the period |
- |
200 |
|
- |
207 |
On 19 December 2022 the Company entered into a
Promissory Note and Security Agreement with Bioasis to assist in
the short term with Bioasis’ working capital requirements. Under
the agreement the Company agreed to advance Bioasis up to
US$750,000 in 3 tranches payable on 19 December 2022, 3 January
2023 and 6 February 2023.
The Company advanced US$250,000 to Bioasis in the
year to 31 December 2022. A further advance of US$250,000 was made
to Bioasis on 3 January 2023.
Management considers recovery of the debt to be
uncertain and in 2022 recognised an impairment provision of
£207,000 against the advance made in December 2022 and a provision
of £207,000 against future credit losses resulting from the
Promissory Note.
On 3 February 2023 Bioasis announced they were
‘urgently exploring and evaluating all financing and strategic
alternatives that may be available to address its liquidity
requirements’ which triggered an event of default. As a result of
this the 3rd payment under the agreement was not made. On 5 March
2023 Bioasis were served with a notice of an event of default. On
20 June 2023 Bioasis announced the suspension of operations.
In 2023 the provision was utilised against the
advance made to Bioasis in January 2023.
7. Derivative
financial liability – current
|
As at 30 June
2023
unaudited£’000 |
As at 31 December
2022£’000 |
At 1 January |
85 |
553 |
Warrants issued |
665 |
- |
Gain recognised in finance income within the consolidated statement
of comprehensive income |
(386) |
(468) |
|
364 |
85 |
Equity settled derivative financial liability is
a liability that is not to be settled for cash.
During the period the following warrants were
exercised:
No warrants recognised as equity settled
derivatives were exercised in 2023 or 2022.
The Company issues warrants in the ADSs of the
Company as part of registered direct offerings and private
placements in the US. The number of ADSs to be issued when
exercised is fixed, however the exercise price is denominated in US
Dollars being different to the functional currency of the Company.
Therefore, the warrants are classified as equity settled derivative
financial liabilities recognised at fair value through the profit
and loss account (‘FVTPL’). The financial liability is valued using
the Black-Scholes model in 2023, in previous periods the Monte
Carlo model was used. The change in methodology is as result of the
Company de-listing from AIM in 2023 and no longer needing to
consider foreign exchange movements in fair value calculation.
Financial liabilities at FVTPL are stated at fair value, with any
gains or losses arising on re-measurement recognised in profit or
loss. The net gain or loss recognised in profit or loss
incorporates any interest paid on the financial liability and is
included in the ‘finance income’ or ‘finance expense’ lines item in
the income statement. A key input in the valuation of the
instrument is the Company share price.
Details of the warrants are as follows:
The below ADS numbers reflect the ADS ratio
change effected on 5 July 2023.
May 2023 warrants
In June 2023 the Company issued 276,689 Series D
ADS warrants as part of a registered direct offering and private
placement that occurred in May 2023 in the US after securing
shareholder approval. The exercise price per ADS was $16.00.
May 2020 warrants
In May 2020 the Company issued 838 ADS warrants
as part of a registered direct offering in the US.
October 2019 warrants
In October 2019 the Company issued 392 ADS
warrants as part of a registered direct offering in the US.
May 2020 and October 2019
warrant re-price
On 13 December 2022 the Company entered into a
Securities Purchase Agreement with Armistice Capital Master Fund
Ltd (‘Armistice’) to re-price previously issued ADS warrants issued
to Armistice to $320 per ADS. The impact of the re-pricing is shown
in the table below: The warrant exercise price per ADS for the
remaining warrants remains unchanged as follows: October 2019
warrants at $10,000 per ADS; May 2020 warrants at $3,280 and $3,300
per ADS.
|
ADS Warrants Number* |
Original price per ADS* |
New price per ADS |
Equivalent Ordinary Shares (400 ordinary shares per
ADS)Number |
October 2019 warrants |
375 |
$10,000 |
$320 |
150,000 |
May 2020 warrants |
406 |
$3,280 |
$320 |
162,400 |
*Number and original price of warrants have been
adjusted to reflect the share consolidation and ratio change of
ADS’s to ordinary shares that occurred on 2 March 2020 and 24 March
2023 and the ratio change of ADS’s to ordinary shares on 26
September 2022 and 5 July 2023.
DARA warrants and share
options
The Group also assumed fully vested warrants and
share options on the acquisition of DARA Biosciences, Inc. (which
took place in 2015). The number of ordinary shares to be issued
when exercised is fixed, however the exercise prices are
denominated in US Dollars. The warrants are classified equity
settled derivative financial liabilities and accounted for in the
same way as those detailed above. The financial liability is valued
using the Black-Scholes option pricing model. The exercise price of
the outstanding options is $1,903.40.
The following table details the outstanding
warrants and options recognised as equity settled derivative
financial liabilities as at 30 June 2023, 31 December 2022 and also
the movement in the period:
|
At 1 January 2022 |
Lapsed |
At 31 December 2022 |
Granted |
Lapsed |
Exercised |
At 30 June 2023 |
ADSs |
|
|
|
|
|
|
|
May 2023 grant ‘D’ warrants |
– |
– |
– |
276,689 |
– |
– |
276,689 |
May 2020 grant |
838 |
– |
838 |
– |
– |
– |
838 |
October 2019 grant |
392 |
– |
392 |
– |
– |
– |
392 |
|
|
|
|
|
|
|
|
Ordinary Shares |
|
|
|
|
|
|
|
DARA Warrants |
204 |
(204) |
– |
– |
– |
– |
– |
DARA Options |
138 |
– |
138 |
|
(4) |
– |
134 |
Fair value hierarchy
The Group uses the following hierarchy for
determining and disclosing the fair value of financial instruments
by valuation technique:
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.
The fair value of the Group’s derivative
financial liability is measured at fair value on a recurring basis.
The following table gives information about how the fair value of
this financial liability is determined.
Financial liabilities |
Fair value as at 30
June2023 |
Fair value as at 31
December2022 |
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 – June 2023 |
£364,000 |
- |
Level 3 |
2023 - Black-Scholes Model |
Volatility rate of 90% determined using historical volatility of
comparable companies. |
|
The higher the volatility the higher the fair value. |
|
|
|
|
|
Expected life of 4.98 years determined using the remaining life of
the share options. |
|
The shorter the expected life the lower the fair value. |
|
|
|
|
|
Risk-free rate of 4.13% determined using the expected life
assumptions. |
|
The higher the risk-free rate the higher the fair value. |
Equity settled financial derivative liability – May 2020
Warrants |
– |
£48,000 |
Level 3 |
2023 – Black- Scholes Model 2022 - Monte Carlo simulation
model |
Volatility rate of 90% 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 2.38 years determined
using the remaining life of the share options. |
|
The shorter the expected life the lower the fair value. |
|
|
|
|
|
Risk-free rate of 4.68% determined using the expected life
assumptions. |
|
The higher the risk-free rate the higher the fair value. |
Equity settled financial derivative liability – October 2019
Warrants |
– |
£37,000 |
Level 3 |
2023 – Black- Scholes Model 2022 - Monte Carlo simulation
model |
Volatility rate of 90% 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 2.00 years determined
using the remaining life of the share options. |
|
The shorter the expected life the lower the fair value. |
|
|
|
|
|
Risk-free rate of 4.87% determined using the expected life
assumptions. |
|
The higher the risk-free rate the higher the fair value. |
Total |
£364,000 |
£85,000 |
|
|
|
|
|
Changing the unobservable risk-free rate input to
the valuation model by 10% higher while all other variables were
held constant, would not impact the carrying amount of shares
(2022: nil).
There were no transfers between Level 1 and 2 in
the period.
The financial liability measured at fair value
on Level 3 fair value measurement represents consideration relating
to warrants issued in June 2023, May 2020 and October 2019 as part
of Private Placements and Registered Direct offerings.
8. Share
capital and reserves
Authorised, allotted and fully paid –
classified as equity |
As at 30 June 2023
unauditedNumber |
As at 30 June 2023
unaudited£ |
As at 31 December
2022Number |
As at 31 December
2022£ |
Ordinary shares of £0.001 each |
277,971,722 |
277,972 |
5,417,137 |
108,343 |
‘A’ Deferred shares of £1 each |
1,000,001 |
1,000,001 |
1,000,001 |
1,000,001 |
‘B’ Deferred shares of £0.001 |
4,063,321,418 |
4,063,321 |
– |
– |
Total |
|
5,341,294 |
|
1,108,344 |
At a General Meeting on 24 March 2023, shareholders
approved a consolidation of the Company’s Ordinary Shares on a one
for 20 basis. As a result, the par value of the Ordinary Shares was
changed from £0.001 per share to £0.02 per share. The above table
reflects the share consolidation in the comparative figures.
At a General Meeting on 14 June 2023, shareholders
approved the subdivision and redesignation of the Company’s Issued
Ordinary Shares of £0.02 each into to one Ordinary Share of £0.001
each and 19 ‘B’ Deferred Shares of £0.001 each. The ‘B’ Deferred
Shares have limited rights and are effectively valueless. The
previously issued Deferred Shares were redesignated ‘A’ Deferred
Shares.
On 26 May 2023 the Company entered into private
placement as set out in note 4. As no share premium was recognised
in relation to this transaction the transaction costs allocated to
the initial issue of shares have been charged to retained
earnings.
During the period the Company entered into two
private placements as set out in note 4. The pre-funded, Series A,
Series B, Series C and Investor warrants have been accounted for as
equity warrants and the fair value on recognition allocated to the
warrant reserve, net of transaction costs. On exercise of the
warrants the fair value has been transferred to share capital and
share premium.
Ordinary and deferred shares were recorded as
equity.
Rights attaching to the shares of
Biodexa Pharmaceuticals PLC
Shares classified as equity
The holders of ordinary shares in the capital of
the Company have the following rights:
(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;
and,
(b) to receive such dividend as is declared by
the Board on each share held.
The holders of deferred shares in the capital of
the Company:
(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; and
(b) shall not be entitled to receive any
dividend or other distribution of out of the profits of the
Company.
In the event of a distribution of assets, the
deferred shareholders shall receive the nominal amount paid up on
such share after the holder of each ordinary share shall have
received (in cash or specie) the amount paid up or credited as paid
up on such ordinary share together with an additional payment of
£100 per share. The Company has the authority to purchase the
deferred shares and may require the holder of the deferred shares
to sell them for a price not exceeding 1p for all the deferred
shares.
2023 |
|
Ordinary SharesNumber |
‘A’ Deferred SharesNumber |
‘B’ Deferred Shares Number |
Share
Price£ |
Total consideration£’000 |
At 1 January 2023 |
5,417,137 |
1,000,001 |
- |
|
|
15 February 2023 |
Private Placements |
3,250,200 |
- |
- |
0.0505 |
164 |
26 May 2023 |
Registered Direct Offering |
110,679,610 |
- |
- |
0.0097 |
1,076 |
April – June 2023 |
Exercise February 2023 pre-funded warrants |
62,184,525 |
- |
- |
0.0505 |
3,139 |
March 2023 |
Exercise Series ‘A’ warrants |
12,931,020 |
- |
- |
0.0505 |
653 |
March 2023 |
Exercise Series ‘B’ warrants |
19,396,530 |
- |
- |
0.0505 |
979 |
15 June 2023 |
Exercise Investor warrants |
625,000 |
- |
- |
0.0505 |
32 |
14 June 2023 |
Share sub-division and re-designation |
- |
- |
4,063,321,418 |
n/a |
n/a |
30 June 2023 |
Exercise ‘C’ warrants |
63,487,700 |
- |
- |
0.0097 |
617 |
At 30 June 2023
(unaudited) |
277,971,722 |
1,000,001 |
4,063,321,418 |
|
|
|
|
|
|
|
|
|
2022 |
|
|
|
|
|
|
At 1 January 2022 |
|
4,923,420 |
1,000,001 |
- |
|
|
22 March 2022 |
Exercise of warrants |
1 |
- |
- |
200.000 |
- |
3 May 2022 |
Share issue to SIPP trustee* |
1,250 |
- |
- |
0.001 |
- |
19 December 2022 |
Registered Direct Offering |
492,466 |
- |
- |
0.6660 |
321 |
At 31 December 2022 |
5,417,137 |
1,000,001 |
- |
|
|
*Share issued to Biodexa Pharmaceuticals PLC
employee benefit trust
9. Related
party transaction
The Directors consider there to be no related
party transactions during the periods reported other than Directors
Remuneration.
10. Contingent
liabilities
The Company entered into an Arrangement Agreement
with Bioasis on 13 December 2022 as amended on 18 December 2022.
Under the agreement the Company agreed to acquire the entire issued
share capital of Bioasis for consideration of, in aggregate,
approximately C$7.4 million (c£4.4 million). The agreement was
subject to shareholder approval. Under the agreement the Company
agreed to reimburse Bioasis US$225,000 expenses relating to the
transaction should the Company’s shareholders not approve the
transaction. As at 31 December 2022 and 30 June 2023 the Company
had a contingent liability of $225,000 in relation to this
potential liability.
On 23 January 2023 at the General Meeting to
approve the Arrangement Agreement none of the special resolutions
were passed and, accordingly, the acquisition of Bioasis did not
proceed. On 23 January Bioasis terminated the Arrangement Agreement
and requested reimbursement of US$225,000 expenses relating to the
transaction, to date these expenses have not been paid.
11. Events
after the reporting date
On 5 July 2023, and in an effort to bring the ADS
price into compliance with NASDAQ’s minimum bid price per share
requirement, we effected a ratio change in the number of Ordinary
Shares represented by our ADSs from five Ordinary Shares per ADS to
400 Ordinary Shares per ADS.
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