THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you are recommended to seek your own financial advice immediately from your stockbroker, bank ma

THIS DOCUMENT IS IMPORTANT

AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you are recommended to seek

your own financial advice immediately from your stockbroker, bank manager, solicitor, accountant or other independent

financial advisor authorised under the Financial Services and Markets Act 2000.

If you have sold or otherwise transferred

all your Midatech Shares, please forward this document, together with the accompanying Form of Proxy, at once to the purchaser

or transferee, or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the

purchaser or transferee. However, such documents should not be forwarded or transmitted in or into the United States, Canada, Australia

Panmure Gordon (UK) Limited

which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as nominated adviser and

broker to the Company for the purposes of the AIM Rules in connection with the Sale and is not acting for, and will not be responsible

to, any person other than the Company for providing the protections afforded to its customers or for advising any other person

on the contents of this document or any transaction or arrangement referred to herein.

(Registered in England and

Wales with company number 09216368)

Proposed Sale of Midatech

Notice of General Meeting

PANMURE GORDON (UK) LIMITED

Notice convening a General

Meeting of the Company to be held at the offices of the Company at 65 Innovation Drive, Milton Park, Milton, Abingdon, Oxfordshire,

OX14 4RQ on 15 October 2018 at 10.00 a.m. is set out at the end of this document. Shareholders are asked to complete and return

the enclosed Form of Proxy in accordance with the instructions printed thereon as soon as possible and, in any event, so as to

be received by the Company's registrars, Neville Registrars Limited at Neville House, Steelpark Road, Halesowen B62 8HD as

soon as possible but in any event not later than 10.00 a.m. on 13 October 2018. The completion and posting of a Form of Proxy will

not preclude Shareholders from attending and voting in person at the General Meeting should they wish to do so.

This document contains certain

statements that are or may be forward-looking. These statements typically contain words such as "intends", "expects",

"anticipates", "estimates" and words of similar import. By their nature, forward-looking statements involve

risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number

of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking

statements. These factors include, but are not limited to, factors identified elsewhere in this document as well as the following

possibilities: future revenues are lower than expected; costs or difficulties relating to the Sale and the continuation of the

Group's business following the Sale, are greater than expected; competitive pressures in the industry increase; general

economic conditions or conditions affecting the Group's business following the Sale, whether internationally or in the places

where the Group does business, are less favourable than expected; and/or conditions in the securities market are less favourable

than expected. Statements are only made as at the date of this document. The Company expressly disclaims any obligation to disseminate

any update or revision to any forward looking statement in this document to reflect any change in the Company's expectations

or any change in events, conditions or circumstances on which any such statement is based, unless required to do so by applicable

law, the AIM Rules or the rules and regulations promulgated by the U.S. Securities and Exchange Commission.

This document should be read in its

entirety. In particular, your attention is drawn to the letter from the Chairman set out in Part 1 of this document recommending

that you vote in favour of the Resolution to be proposed at the General Meeting.

Timetable of Principal

All of the above times refer

to London time unless otherwise stated and each of the times and dates is subject to change. If any of the above times and/or

dates do change, the revised times and/or dates will be notified to Shareholders by way of announcement on a Regulatory Information

Directors, Secretary

and Registered Office

Letter from the Chairman

(Registered in England and

Wales with company number 09216368)

Sale of Midatech Pharma US Inc. ("MTP US")

and Notice of General Meeting

It was announced on 27 September 2018

that the Company has entered into a stock purchase agreement dated 26 September 2018 ("Sale Agreement") with

Kanwa Holdings, LP ("Purchaser") a limited partnership owned by funds managed by or through Barings LLC ("Barings"),

for the sale by the Company of the entire common stock of Midatech Pharma US Inc. for an initial cash consideration of $13,000,000

and further cash consideration of up to $6,000,000 dependant on the sales performance of certain products of MTP US ("Sale").

In view of the size of the transaction,

under the AIM Rules the Sale is conditional on the approval of Shareholders at a General Meeting. A notice of the General Meeting

of the Company at which the Resolution is being proposed, for the purposes of Shareholders approving the Sale Agreement and the

Sale, is set out at the end of this document. Assuming the Resolution is passed at the General Meeting, the completion of the Sale

is anticipated to occur by 31 October 2018.

Subject to completion of the Sale, the

Continuing Group will remain focused on the Group's key pipeline of medicines for oncology and related therapeutic areas

which are currently in various stages of pre-clinical and clinical development ("Key Pipeline Products") including:

The purpose of this document

is to provide Shareholders with details of the Sale Agreement and the Sale together with its effect on the Group. Further, to

explain why your Board believes that the Sale is in the best interests of the Company and Shareholders as a whole and to recommend

that you vote in favour of the Resolution to approve the Sale Agreement and the Sale at the General Meeting.

MTP US is the current US

commercial arm of the Group. MTP US was acquired by the Company on 7 December 2015 and since that date MTP US has focused on

commercialising oncology supportive care products in the US which help patients manage the impact of their cancer as well as

the side effects of their cancer therapy. MTP US offers patients a choice in therapeutic delivery mechanisms to enable

patients who might otherwise feel helpless in their fight against cancer to take back some measure of control and to fight

cancer's side effects on their own terms.

MTP US has acquired a portfolio

of products, including marketing rights in the United States, for:

Details of the current trading

of MTP US are set out in paragraph 4 of this Part 1 below.

In the Company's circular to Shareholders

dated 28 September 2017 in respect of the placing and open offer of new Midatech Shares which raised 6.2 million ("2017

Circular") it was stated that:

of the placing would not themselves provide the Company with sufficient working capital for its anticipated requirements over the

next twelve months".

In the 2017 Circular it

was also stated that the Board would continue to have discussions with third parties to assess the market value of certain of the

Company's assets in order to drive long term value for the Group without a reliance on equity funding where possible. Further,

the Board was determined to take action to ensure that the Company was not required to significantly delay, scale back or discontinue

the development or commercialisation of the Key Pipeline Products referred to in paragraph 1 above.

In the Company's report and

accounts for the financial year ended 31 December 2017, the Board confirmed that until such time as the Group generates positive

net cash inflows from commercialisation of Key Pipeline Products it may be required to seek additional funding. The Board also

disclosed that it was continuing to evaluate options for further funding including by way of monetising assets of the Group.

In furtherance of this

strategy, the Company appointed a specialist life sciences advisory firm and initially sought buyers of MTP US on a confidential