DEMG Deltex Medical Group Plc

12 June 2024

Deltex Medical Group plc

("Deltex Medical", the "Company" or the "Group")

Adoption of new share plans and grant of share options to directors and employees

Deltex Medical Group plc (AIM: DEMG) announces that the Group has adopted two new share incentive plans and has granted 366,900,000 options over new ordinary shares of 0.01 pence each in the share capital of the Group (the "Ordinary Shares") to certain employees and directors of the Group.

The proposals for the new share plans and proposed grants were first set out in the Group's Annual Report and Accounts for the year ended 31 December 2023 published last month. The Group's 2003 Enterprise Management Incentive Plan and the Group's 2011 Executive Share Option Scheme (together the "Legacy Option Schemes") are more than ten years old and therefore under their rules, no further new options over new Ordinary Shares can be granted. Accordingly, the Remuneration Committee has decided to put in place two new share incentive plans as set out below and award new options.

EMI Share Option Plan

The EMI Share Option Plan (the "EMI Plan") will be a plan under which up to 15 per cent of the Company's share capital from time to time can be made available to award share options to the Group's employees and directors over a ten-year period (the "EMI Options"). The EMI Options will be issued with an exercise price at or above the market share price at the time of issue. Other than in the event of a change of control, the EMI Options will vest in not less than three years and will be exercisable for up to seven years thereafter. Any EMI Options issued to executive directors of the Group under the EMI Plan will be subject to performance conditions and will be restricted in value to a maximum of 50 per cent of a director's salary.

Under the EMI Plan, a total of 178,900,000 EMI Options have now been granted, exercisable at 0.105p per share, being the closing mid-market share price of Ordinary Shares on 11 June 2024. Of these, 113,000,000 EMI Options have been granted to directors as follows:

In addition to a three-year vesting period, the EMI Options granted to Andy Mears and Natalie Wettler are subject to performance conditions geared towards the successful turn round of the Group's business and in particular, 30 per cent will vest on the Group achieving breakeven earnings before interest, taxes, depreciation and amortisation ("EBITDA") and the balance will vest on the Group achieving £500,000 or more in EBITDA.

Executive Performance Plan

In addition to the EMI Plan, the Company has made a one-off issue of 94,000,000 performance options to each of the two executive directors (the "Executive Performance Plan"), Andy Mears and Natalie Wettler, representing 4.96 per cent of the Group's issued share capital to each recipient (the "Performance Options"). At the time of the 2023 fundraising no specific incentive arrangements were put in place for the executive directors to align their interests strongly with those of the Company's shareholders and this performance plan now provides that alignment. In determining the level of grants that have been awarded, the Group's Remuneration Committee had regard to the limited resources of the Company following the 2023 fundraising and restructuring, as well as salary sacrifices made.

The Performance Options are exercisable at 0.2p per share, the price at which the new shares were issued at the fundraising in 2023 and a premium of approximately 90 per cent of the closing mid-market share price of Ordinary Shares on 11 June 2024.

The Performance Options will be exercisable between three and ten years after issue subject to the same performance conditions as the options under the EMI Plan, which are geared to achieving the successful turn round of the Group leading to sustainable profitability for the business. Therefore, in addition to a three-year vesting period, the Performance Options vest as to 30 per cent on the Group achieving breakeven EBITDA and the balance will vest on the Group achieving £500,000 or more in EBITDA.

Taking the EMI Plan and Executive Performance Plan together, the proportion of the Company's share capital from time to time that can be made available to award share options to the Group's employees over a ten-year period will be limited to a maximum of 20 per cent of the total Ordinary Shares in issue.

Legacy Option Schemes

As outlined in the Group's Annual Report and Accounts for the year ended 31 December 2023, on 14 July 2023 the Group announced a fundraise at a share price of 0.20 pence per new Ordinary Share. The effect of this fundraise was to substantially reduce the value of the existing options over new Ordinary Shares in issue. In light of this and the new incentive schemes and performance conditions, the Group's Remuneration Committee has agreed with Andy Mears and Natalie Wettler that they will waive their entitlement to, respectively, 20,000,000 and 11,225,000 options which remain outstanding under the Legacy Option Schemes (5,000,000 options held by Andy Mears lapsed last month). Following this neither Andy Mears nor Natalie Wettler will retain any options issued under the Legacy Option Schemes.

Related Party Transactions

The agreement with Andy Mears and Natalie Wettler to waive their entitlement to options over new Ordinary Shares under the Legacy Option Schemes and the issue of the options to Andy Mears and Natalie Wettler pursuant to the EMI Plan and the Executive Performance Plan (the "Transactions") are deemed to be related party transactions pursuant to rule 13 of the AIM Rules for Companies. Accordingly, Nigel Keen, Chris Jones and Ben Carswell (being the directors of the Group not taking part in the Transactions) consider, having consulted with the Group's nominated adviser, Allenby Capital, that the terms of the Transactions are fair and reasonable insofar as the Company's shareholders are concerned.

For further information, please contact:

Notes for Editors

Deltex Medical's technology

Deltex Medical's TrueVue System uses proprietary haemodynamic monitoring technology to assist clinicians to improve outcomes for patients as well as increase throughput and capacity for hospitals.

Deltex Medical has invested over the long term to build a unique body of peer-reviewed, published evidence from a substantial number of trials carried out around the world. These studies demonstrate statistically significant improvements in clinical outcomes providing benefits both to patients and to the hospital systems by increasing patient throughput and expanding hospital capacity.

The Group's flagship, world-leading, ultrasound-based oesophageal Doppler monitoring ("ODM") is supported by 24 randomised control trials conducted on anaesthetised patients. As a result, the primary application for ODM is focussed on guiding therapy for patients undergoing elective surgery, although sedated patients in intensive care are still an important part of our business. The Group's new, next generation monitor makes the use of the ODM technology more intuitive and provides augmented data on the status of each patient.

Deltex Medical's engineers and scientists carried out successful research in conjunction with the UK's National Physical Laboratory ("NPL"), which has enabled the Group's 'gold standard' ODM technology to be extended and developed so that it can be used completely non-invasively. This will significantly expand the application of Deltex Medical's technology to non-sedated patients. This new technological enhancement, which will be released on the new next generation monitor, will substantially increase the addressable market for the Group's haemodynamic monitoring technologies and is complementary to the long-established ODM evidence base.

Deltex Medical's new non-invasive technology has potential applications for use in a number of healthcare settings, including:

§ Accident & Emergency for the rapid triage of patients, including the detection and diagnosis of sepsis;

§ in general wards to help facilitate a real-time, data-driven treatment regime for patients whose condition might deteriorate rapidly; and

§ in critical care units to allow regular monitoring of patients post-surgery who are no longer sedated or intubated.

One of the key opportunities for the Group is positioning this new, non-invasive technology for use throughout the hospital. Deltex Medical's haemodynamic monitoring technologies provide clinicians with beat-to-beat real-time information on a patient's circulating blood volume and heart function. This information is critical to enable clinicians to optimise both fluid and drug delivery to patients.

Deltex Medical's business model is to drive the recurring revenues associated with the sale of single-use disposable ODM probes which are used in the TrueVue System and to complement these revenues with a new incremental revenue stream to be derived from the Group's new non-invasive technology.

Both the existing single-use ODM probe and the new, non-invasive device will connect to the same, new TrueVue monitor which was released onto the market in November 2023. Monitors are sold or, due to hospitals' often protracted procurement times for capital items, may be loaned in order to encourage faster adoption of the Group's technology.

Deltex Medical's customers

The principal users of Deltex Medical's products are currently anaesthetists working in a hospital's operating theatre and intensivists working in ICUs. This customer profile will change as the Group's new non-invasive technology is adopted by the market. In the UK the Group sells directly to the NHS. In the USA the Group sells directly to a range of hospital systems. The Group also sells through distributors in more than 40 countries in the European Union, Asia and the Americas.

Deltex Medical's objective

To see the adoption of Deltex Medical's new TrueVue monitor, comprising both minimally invasive and non-invasive technologies, as the standard of care in haemodynamic monitoring for all patients from new-born to adult, awake or anaesthetised, across all hospital settings globally.

For further information please go to www.deltexmedical.com

Notification and public disclosure of transactions by persons discharging managerial responsibilities and persons closely associated with them: