Item 5. Market for Registrant’s Common Equity
Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our ordinary shares, nominal value £0.000025 per share, in the form of ADSs trade under the symbol “BRNS” on the Nasdaq Global Market.
Holders of Our ADSs
Our ADSs each represent one ordinary share, nominal value £0.000025 per share, of Barinthus Biotherapeutics plc. An ADS may be evidenced by an American Depositary Receipt issued by the Bank of New York Mellon as depositary bank. As of March 14, 2024, there was one holder of record of our ordinary shares, nominal value £0.000025 per share, and 70 holders of record of our ADSs. The closing sale price per ADS on the Nasdaq Global Market on March 14, 2024 was $2.51.
Dividends
We have never paid or declared any cash dividends on shares of our ordinary shares, ADSs or other securities and do not anticipate paying or declaring any cash dividends in the foreseeable future. We currently intend to retain all future earnings, if any, for use in the operation of our business.
Securities Authorized for Issuance Under Equity Compensation Plans
The information required by Item 5 of Form 10-K regarding equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report.
Recent Sales of Unregistered Equity Securities
None.
Certain Material UK Tax Considerations
The following discussion is limited to an overview of the tax consequences of ownership and disposition of ordinary shares, or such shares represented by ADSs (those ordinary shares or ADSs deriving over 75% of their value otherwise than from United Kingdom land). Each shareholder should however seek individual tax advice as specific rules may apply in certain circumstances. The United Kingdom tax consequences discussed below do not reflect a complete analysis or listing of all the possible United Kingdom tax consequences that may be relevant to holders of our ordinary shares or ADSs.
Chargeable Gains
A disposal or deemed disposal of ordinary shares or ADSs by a holder resident in the United Kingdom for tax purposes or subject to UK taxation (a “ UK Holder ”) may, depending on such holder’s circumstances and subject to any available exemptions or reliefs (such as the annual exemption), give rise to a chargeable gain or an allowable loss for the purposes of UK capital gains tax (for individuals) and corporation tax on chargeable gains (for corporation tax payers).
If an individual UK Holder who is subject to UK income tax at either the higher or the additional rate is liable to UK capital gains tax on the disposal of ordinary shares or ADSs, the current applicable rate will be 20% (for the tax years 2023/2024 and 2024/2025). For an individual UK Holder who is subject to UK income tax at the basic rate and liable to UK capital gains tax on such disposal, the current applicable rate would be 10% (for the tax years 2023/2024 and 2024/2025), save to the extent that any capital gains when aggregated with the UK Holder’s other taxable income and gains in the relevant tax year exceed the unused basic rate tax band. In that case, the capital gains tax rate currently applicable to the excess would be 20% (for the tax years 2023/2024 and 2024/2025).
If a corporate UK Holder is or becomes liable to UK corporation tax on the disposal (or deemed disposal) of ordinary shares or ADSs, the main rate of UK corporation tax would apply (currently at 25% for companies with profits of more
113
Table of Contents
than £250,000 or 19% for companies with profits not exceeding £50,000 with a marginal relief applying to profits between £50,000 and £250,000, in each case, for the 2023/2024 and 2024/2025 tax years).
Any chargeable gain (or allowable loss) will generally be calculated by reference to the consideration received for the disposal of the ADSs less the allowable cost to the UK Holder of acquiring such ADSs.
If you are not resident in the UK for UK tax purposes (or, in the case of an individual, not temporarily non-resident), you should not normally be liable for UK tax on capital gains realized or accrued on the sale or other disposition of ordinary shares or ADSs unless the ordinary shares or ADSs are held in connection with your trade carried on in the UK through a branch or agency (or, in the case of a corporate holder, a permanent establishment) and the ordinary shares or ADSs are or have been used, held or acquired for the purposes of such trade or such branch or agency.
An individual holder of ordinary shares or ADSs who ceases to be resident in the UK for UK tax purposes for a period of less than five years and who disposes of ordinary shares or ADSs during that period may also be liable on returning to the UK (or upon ceasing to be regarded as resident outside the UK for the purposes of any relevant double taxation treaty) for UK capital gains tax despite the fact that the individual may not be resident in the UK at the time of the disposal.
Stamp Duty and Stamp Duty Reserve Tax
Stamp duty and/or stamp duty reserve tax (“SDRT”) are imposed in the United Kingdom on certain transfers of securities (including shares in companies which, like us, are incorporated in the United Kingdom) at a rate of 0.5% of the consideration paid for the transfer. Certain transfers of shares to depositaries or into clearance systems are charged a higher rate of 1.5%. Transfers of interests in shares within a depositary or clearance system, and from a depositary to a clearance system, are generally exempt from stamp duty and SDRT.
Under current UK tax law, no UK SDRT (or, where effected by a written instrument, UK stamp duty) should generally be payable in respect of an issue or transfer of ordinary shares, including an unconditional agreement to transfer ordinary shares to a clearance service or a depositary receipt system (including to a nominee or agent for a person whose business is or includes the issue of depositary receipts or the provision of clearance services) where the transfer is carried out for the purpose of raising new capital, unless the clearance service has made and maintained an election under section 97A of the UK Finance Act 1986, or a section 97A election. It is understood that HMRC regards the facilities of DTC as a clearance service for these purposes and we are not aware of any section 97A election having been made by DTC. Any stamp duty or SDRT payable on a transfer of ordinary shares to a depositary receipt system or clearance service or in respect of a transfer within a depositary receipt system or clearance service, will strictly be accountable by the clearance service or depositary receipt system operator or their nominee, as the case may be, but will in practice generally be paid by the transferors or participants in the clearance service or depositary receipt system. Specific professional advice should be sought before incurring or reimbursing the costs of a UK stamp duty or UK SDRT charge in any circumstances.
Any transfer of, or unconditional agreement to transfer, our ordinary shares that occurs outside the DTC system, including repurchases by us, will ordinarily attract stamp duty or SDRT at a rate of 0.5% of the amount or value of the consideration payable for the transfer (and in the case of stamp duty, rounded up to the next multiple of £5), unless the transfer is to a connected company and in which case a market value may apply. This duty must be paid (and where applicable the transfer document stamped by HMRC) before the transfer can be registered in our books. Typically stamp duty would be paid by the purchaser of the ordinary shares.
Any transfer of, or unconditional agreement to transfer, our ordinary shares that occurs outside the DTC system, including repurchases by us, will ordinarily attract stamp duty or SDRT at a rate of 0.5% of the amount or value of the consideration payable for the transfer (and in the case of stamp duty, rounded up to the next multiple of £5), unless the transfer is to a connected company and in which case a market value may apply. This duty must be paid (and where applicable the transfer document stamped by HMRC) before the transfer can be registered in our books. Typically stamp duty would be paid by the purchaser of the ordinary shares.
A transfer of title in our ordinary shares from within the DTC system out of the DTC system will not attract stamp duty or SDRT if undertaken for no consideration. If that ordinary shares is redeposited into DTC (which may only be done via a deposit of the ordinary shares first with an appropriate offshore depositary followed by a transfer of the ordinary shares from the offshore depositary into DTC), however, the redeposit will attract stamp duty or SDRT at a rate of 1.5%.
No UK stamp duty or SDRT should be payable on the issue of ADSs in the Company.
114
Table of Contents
No UK stamp duty or SDRT should be required to be paid in respect of a paperless transfer of ADSs through the facilities of DTC, provided that no section 97A election has been made and maintained by DTC, and such ADSs are held through DTC at the time of any agreement for their transfer. We are not aware of any section 97A election having been made by the DTC.
On the basis of current published HMRC guidance, an ADR is not regarded as stock or a marketable security for the purposes of UK stamp duty or a chargeable security for the purposes of UK SDRT and, as such, no UK stamp duty or SDRT should be required to be paid on the issue or transfer of (including an agreement to transfer) ADSs in the Company.
Taxation of Dividends
Under UK law, there is no withholding tax on dividends paid on the ordinary shares or ADSs.
An individual UK Holder may, depending on his or her particular circumstances, be subject to UK tax on dividends received from us. An individual holder of ADSs who is not resident for tax purposes in the UK should not be chargeable to UK income tax on dividends received from us unless he or she carries on (whether solely or in partnership) a trade, profession or vocation in the UK through a branch or agency to which the ADSs are attributable. There are certain exceptions for trading in the UK through independent agents, such as some brokers and investment managers.
Dividend income is treated as the top slice of the total income chargeable to UK income tax for an individual UK Holder. An individual UK Holder who receives a dividend in the 2023/2024 tax year will be entitled to a dividend tax-free allowance of £1,000. However, the UK government has legislated to reduce the dividend tax-free allowance to £500 with effect from April 2024 (i.e. for the 2024/2025 tax year). Income within the dividend tax-free allowance counts towards an individual’s basic, higher or additional rate limits and may, therefore, affect the level of income tax personal allowance to which they are entitled. Dividend income received in excess of the dividend tax-free allowance will (subject to the availability of any income tax personal allowance) be charged at 8.75% to the extent the excess amount falls within the basic rate band, 33.75% to the extent the excess amount falls within the higher rate band and 39.35% to the extent the excess amount falls within the additional rate band.
A corporate holder of ADSs who is not resident for tax purposes in the UK should not be chargeable to UK corporation tax on dividends received from us unless it carries on (whether solely or in partnership) a trade in the UK through a permanent establishment to which the ADSs are attributable.
Corporate UK Holders should not be subject to UK corporation tax on any dividend received from us so long as the dividends qualify for exemption, which should be the case, although certain conditions must be met. It should be noted that the exemptions, whilst of wide application, are not comprehensive and are subject to anti-avoidance rules. If the conditions for the exemption are not satisfied, such anti-avoidance provisions apply, or such UK Holder elects for an otherwise exempt dividend to be taxable, UK corporation tax will be chargeable on the amount of any dividends (at the current rate of 25% for companies with profits of more than £250,000 or 19% for companies with profits not exceeding £50,000, with a marginal relief applying to profits between £50,000 and £250,000, in each case for the 2023/2024 and 2024/2025 tax years).
Use of Proceeds from Initial Public Offering
On May 4, 2021, we completed our initial public offering (“IPO”) of 6,500,000 ADSs at a price of $17.00 per ADS for an aggregate offering price of approximately $110.5 million. Morgan Stanley & Co., Jefferies LLC, Barclays Capital Inc., William Blair & Company, L.L.C. and H.C. Wainwright & Co., LLC served as the underwriters of the IPO. The offer and sale of all of the ADSs in the offering were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-255158), which became effective on April 29, 2021.
We received aggregate net proceeds from the offering of approximately $102.8 million, after deducting underwriting discounts and commissions, as well as other offering expenses. No offering expenses were paid directly or indirectly to any of our directors or officers (or their associates) or persons owning ten percent or more of any class of our equity securities or to any other affiliates.
There has been no material change in our planned use of the net proceeds from the IPO as described in the final prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act.
115
Table of Contents
Purchase of Equity Securities by the Issuer and Affiliated Purchases
None.
Item 6. [Reserved]
Not applicable.