Biodexa Announces $7 Million of Gross Proceeds from Warrant Exercises

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.

Following 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 Texas

CPRIT 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.

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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.

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.

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

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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.

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.

MTX110, 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.

The 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.

In 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.

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):

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.

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 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.

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.

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.

Chief Executive Officer and Chief Financial Officer

Consolidated Statements of Comprehensive Income

For the year six month period ended 30 June

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

The accompanying notes form part of these financial statements

Consolidated Statements of Cash Flows

For the six month period ended 30 June

Consolidated Statements of Cash Flows (continued)

For the six month period ended 30 June