TIDMFDBK
RNS Number : 9194Z
Feedback PLC
20 September 2022
Feedback plc
Full Year Results to 31 May 2022
Product Development and Strong Revenue Performance Underpin
Growth Trajectory
Feedback plc (AIM: FDBK, "Feedback" or the "Company"), the
clinical infrastructure specialists, announces its audited results
for the twelve months to 31 May 2022 (the "Period").
Financial Highlights
-- 105% increase in revenue to GBP0.59m (2021: GBP0.29m)
-- Highest ever reported revenue since becoming a medical imaging company in 2014
-- 280% increase in sales(1) to GBP0.67m (2021: GBP0.18m), with
Bleepa contributing GBP0.26m (2021: GBP0.08m)
-- Operating loss increased to GBP2.51m (2021: GBP2.06m),
reflecting investment in the development and roll out of Bleepa
-- Oversubscribed placing and open offer raising GBP11.20m - to
support accelerated revenue growth and product development
-- Cash at 31 May 2022 was GBP10.31m (31 May 2021: GBP2.22m)
Operational Highlights
-- Two Bleepa contract wins with NHS trusts worth an aggregate value of GBP0.20m
-- First non-NHS contract win, with CVS Group
-- Expansion of product suite and routes to market with launches of CareLocker and BleepaBox
-- First international Bleepa deployment at Orissa, India, for
remote TB screening, in partnership with AWS and Qure.ai
-- Selected to pilot the UK's first end-to-end symptom-based CDC
pathway, connecting primary and secondary care - Bleepa's first
example of cross-provider connectivity
-- First cloud deployments of the technology, both for CVS and TB screening in India
Post period highlights
-- Awarded GBP0.45m contract for a 12-month pilot extension of
the Sussex ICS CDC development programme
-- Named as a supplier on G-Cloud 13, the UK Government's digital marketplace
-- Creation of the CareLocker app, giving patients direct access to their clinical data
First CareLocker deployment with an Indian imaging centre,
Sampurna Diagnostics, Indore, making digital images available to
their patients via the CareLocker app
Analyst Briefing, 11:00am Today
A briefing for Analysts will be held at 11:00am GMT this
morning. Analysts interested in attending should contact Walbrook
PR by emailing feedbackplc@walbrookpr.com or by calling 020 7933
8780.
Investor Presentation, 16.00 Today
Management will be providing a presentation and hosting an
Investor Q&A session on the results and future prospects today
at 16:00, through the digital platform Investor Meet Company.
Investors can sign up for free and add to attend the presentation
via the following link:
https://www.investormeetcompany.com/feedback-plc/register-investor
Questions can be submitted pre event and at any time during the
live presentation via the Investor Meet Company Platform.
Dr Tom Oakley, CEO of Feedback, said: "We are delighted with the
progress made during the period, which was significantly ahead of
previous market expectations and the strongest performance, in
terms of revenue, since entering the medical imaging market in
2014. The performance highlights the strength of our model - with
revenues growing because of innovative product development, and
importantly, proof within working environments that our technology
expediates secure and regulated access to patient data, enabling
faster decision making.
"Building on the success of the last year we have moved beyond
just clinical communication to become a core platform for frontline
clinical care delivery. Our unique suite of products provides
digital infrastructure that connects multiple care settings around
individual patient journeys, to enable cross-provider care delivery
and new models of care. We describe Bleepa and Carelocker as a
'digital glue' that connects multiple provider settings and allows
patients to 'be known' at any location of care that they
attend.
"By focusing on cross-provider customer opportunities we are
addressing a growing market, both domestically and internationally,
where we can achieve high margins and larger contract values, while
benefiting from first mover advantage. The strategy also recognises
that, increasingly, cross-provider care is becoming a focus for our
customers as they seek to achieve efficiencies, at a system level,
to aid in the recovery of the pandemic; and to reduce the post
COVID backlog of patient care.
"2022 was a crucial year for the Company as we recognised the
initial success of our new strategic direction and the growth in
Bleepa sales, continuing the move away from lower margin legacy
products. Looking forward, we are now well positioned to address a
number of at scale market opportunities and are sufficiently funded
to deliver against them. We look forward to building on the
momentum generated during the period and delivering further growth
in the year ahead.
"Looking to the future, the Company is planning a share
consolidation which will be detailed in a separate announcement
shortly. The share consolidation is expected to result in a more
appropriate share capital structure for the Company."
Further information on Feedback and its products can be found on
the Company's website:
https://fbkmed.com/feedback-plc/reports-and-presentations/
Note (1): "Sales" is non-IFRS metric representing the total
customer contract value invoiced in a period. The figure does not
take account of accrued or deferred income adjustments that are
required to comply with accounting standards for revenue
recognition across the life of a customer contract (typically 12
months).
-Ends-
Enquiries:
Feedback plc +44 (0) 20 3997 7634
Tom Oakley, CEO IR@fbk.com
Anesh Patel, CFO
Panmure Gordon (UK) Limited
(NOMAD and Broker)
Emma Earl/Freddy Crossley (Corporate
Finance)
Rupert Dearden (Corporate Broking) +44 (0)20 7886 2500
Walbrook PR Ltd Tel: 020 7933 8780 or feedbackplc@walbrookpr.com
Paul McManus/Nick Rome 07980 541 893 or 07748 325 236
About Feedback
Feedback plc helps clinical teams to make better decisions
faster for patients. We design products that enhance clinician
access to patient data and to their colleagues. Our unique approach
centres around individual patient episodes, into which we pull
relevant clinical data from hospital systems and around which we
build remote clinical teams for collaboration. As a result, we
produce a digital infrastructure that makes patient data available
to clinicians in multiple settings, in a format that enables them
to meaningfully interact with it, providing flexibility to
clinicians and free movement of patients between provider settings
- clinicians can practice from anywhere and patients can attend any
care provider for treatment.
Our products Bleepa and CareLocker work together to deliver
unparalleled value to our customers. Bleepa is our application
layer and sits on top of CareLocker as our data layer. Bleepa is a
clinician facing platform that displays clinical results from a
patient's CareLocker at a certified and regulated quality, that is
suitable for clinical use and enables dialogue on a
patient-by-patient basis with colleagues through a secure,
auditable chat interface that links back to the patient medical
record. The CareLocker data storage model is built around the
patient. Our vision is one where relevant clinical data is always
available to the patient as well as to any care setting that they
may attend - a federated data architecture with the patient as the
tenant.
The Company has a number of growth opportunities domestically
and internationally across a range of markets including the NHS,
the veterinary market and private healthcare providers and its
highly scalable Software as a Service ("SaaS")-based revenue model
is expected to provide increasing levels of visibility as the
Company grows its customer base.
Feedback plc
Chairman's Statement
In 2022, as we emerge from the throws of the global pandemic, we
have seen indicators that the strategic shift initiated in 2019 is
beginning to bear fruit. The Company reported its highest ever
revenue since becoming a medical imaging company in 2014, with
strong revenue growth of 105% on the previous period. The
pilot-to-contract model has resulted in successful contract awards
in both the public and private sector, and Bleepa's first paying
customer has renewed its subscription at a premium to the initial
contract value.
Following further development of our product capabilities, the
Company has moved beyond clinical communication to providing a core
digital infrastructure, capable of connecting multiple care
settings and delivering cross-provider care pathways on a
patient-by-patient basis. This presents healthcare providers with
unprecedented flexibility around designing care pathways and
leveraging clinical capabilities to address their major priority
areas.
As providers emerge from COVID-19, they are looking for
suppliers that can support them to address major challenges around
clinical pathway efficiency, to help reduce the backlog of
patients, and also critical workforce challenges resulting from
staff shortages and burnout. Our technologies help clinical teams
to work more efficiently from remote locations, giving healthcare
providers greater ability to leverage specialist skills across
their clinical workflows. By making access to specialist advice
more flexible, our technologies drive clinical decision making and
care delivery forward, meaning that clinical teams can achieve more
with fewer staff whilst simultaneously accelerating the patient
journey.
Domestically, the customer landscape is changing with the
creation of integrated care systems ("ICS") that are tasked with
delivering regional and population-based care; with direct
budgetary and procurement responsibility. The shift to regional
decision-making bodies should simplify the route to market and
favours our cross-provider focus. ICSs will oversee the roll out of
national programmes of work, such as the community diagnostic
centre ("CDC") programme, which aims to increase diagnostic
capacity and reduce the elective care backlog. With an expected 150
CDCs to be created, and an estimated total addressable market of
over GBP90m, the CDC programme represents a huge opportunity for
the Company, for which we are uniquely positioned to exploit, given
our regulatory compliant user interface (Bleepa) and
patient-centric data architecture (CareLocker) which, in
combination, can connect multiple providers around an individual
patient journey. Our pilot deployment at Sussex ICS has
successfully delivered the first end-to-end symptom-based CDC
pathway in the NHS and would not have been achievable without our
digital infrastructure offering. This should drive adoption of our
products at sites that hope to replicate the success of the Sussex
programme.
Internationally, the Company is exploring a number of at-scale
opportunities in India, with potentially significant sizeable total
addressable markets. The Company has initiated its market entry
with a focus on providing remote TB screening to rural communities
as part of a consortium offering with AWS and Qure.ai; with an
estimated total addressable market of GBP2billion over a
3-to-5-year screening period. Further partners are being sought,
including telecommunication providers and clinical service
providers, but an initial pilot has been achieved in Odisha where
over 520 cases have been processed, and Qure.ai identified TB in
approximately 10% of cases. The TB screening project has raised the
Company profile in India and has resulted in opportunities with
independent hospital groups for Bleepa, and a patient facing B2B2C
opportunity for CareLocker, which we are exploring as a way of
providing patients with digital copies of their images, rather than
the traditional model of providing film prints or CDs. The Indian
diagnostics market was worth $10 billion in 2021 (of which
radiology accounts for 43%) and is projected to grow at a compound
annual growth rate of 14% to reach $20 billion by 2026, driven by
an increasing population, urbanisation, and higher market
penetration.
In November 2021 the Company successfully closed a financing
round of GBP11.2m to enable the pursuit of opportunities in the
domestic market and India in parallel. This essential funding has
ensured that the Company is now well positioned to explore these
large growth opportunities, as the Company closed the period with a
strong cash position of GBP10.3m. The Company is investing
strategically in personnel, business development and marketing, and
software development to ensure that we maintain our competitive
advantage and drive sales across our market segments.
The Company is making good headway and the Board is very
optimistic about its future prospects, in light of the
opportunities that have been unlocked by the 2019 strategic shift
and sustained investment. The Board believes that as management
continues to deliver beyond market expectations and progresses on
the multiple fronts outlined in the report below, there is
significant scope to provide increased returns, which should result
in a growing market valuation. The Company looks forward to
building on the momentum of 2022 in the year ahead and is aiming to
report strong revenue growth as we strive towards
profitability.
Chief Executive's Statement
As a Company, our mission is to enable clinicians to make better
decisions faster and we believe that requires two things:
connection to colleagues and easy access to meaningful patient
data. Our approach has always been to place the patient at the
centre of our design, wrapping multiple forms of clinical data
around an individual patient to create a common, patient-specific
view, and we enable clinical teams to be built around this patient
view to enable collaborative working. This patient-centric approach
is the opposite to the traditional models of clinical systems which
typically group multiple patients' data by data type, and silo that
data at a system or provider level. Processing data at the patient
level liberates the patient from provider settings, allowing
patients to attend anywhere for treatment and investigation, and
allows any relevant clinician to participate in their care,
regardless of traditional logistical and location care boundaries.
In combination, these tools represent a digital infrastructure that
holds the potential to fundamentally transform clinical workflow
and patient care beyond recognition. It is worth reflecting briefly
how we got here before we outline the opportunity ahead and where
we are going.
In 2019 we initiated a strategic change in direction away from
low-margin legacy products, with limited potential for growth,
towards the emerging space of clinical workforce tools and data
management. This strategy leveraged our heritage and expertise of
clinical data management and medical device manufacture, derived
from delivering PACS, to allow us to dynamically move into the
medical technology space where we held a regulatory advantage over
other companies. The creation of Bleepa and CareLocker has been
transformative for the Company and we are now seeing the rewards of
that strategic shift, with reported revenue of GBP590k, above the
previous peak in 2019 of GBP563k and up 105% on the prior year,
making this the best trading year in the Company's recent history,
despite the adverse trading conditions generated by the global
pandemic and war in Ukraine.
We started the year with the aim of building on the momentum of
the previous period, which included our first contract win for
Bleepa, with the Royal Berkshire Hospital NHS Foundation Trust
("RBH"). Our focus for the period was to win new contracts for
Bleepa, ensure the renewal of RBH's Bleepa contract and to try to
achieve a higher contract renewal value through the upselling of
further Bleepa features and increased user numbers.
We additionally set ourselves the target of securing a sale in
an adjacent market segment and to continue the development of
Bleepa to unlock further customer opportunities.
During the period we delivered against all of these targets, and
more - RBH became the first Bleepa customer to renew a Bleepa
contract and our longstanding pilot at the Northern Care Alliance
("NCA") (previously Pennine Acute Hospitals Trust) was successfully
converted to a paid contract. The Company then successfully piloted
and converted a contract with the equine division of CVS.
These customer successes also resulted in product refinement and
development which, in turn, led to further commercial opportunities
towards the end of the period. Most noticeably, the ability to
enable cross-provider care pathways, unlocking the opportunity to
deliver the symptom-based pathway approach to CDC services in
Sussex and TB screening in India. These opportunities required us
to fundamentally consider the underlying architecture to Bleepa and
assess how we process expanded types of medical data, beyond
medical imaging, to render it to clinicians in a meaningful way;
whilst ensuring its availability across multiple provider sites. To
this end we developed CareLocker.
Clinical data currently resides in multiple system siloes, even
within individual clinical settings. Extracting this, centralising
it around a patient and presenting a common, single-patient view is
core to the Bleepa/CareLocker value proposition for enabling
collaborative clinical working - giving clinicians the relevant
clinical information all in one place so that they can easily
discuss it. However, the complexity of cross-provider care delivery
is that data resides in different systems, at different sites, and
needs to be accessible to all sites simultaneously. To solve this
problem, we have extended Bleepa's architecture, leveraging a
patient-centric approach to create a wrapper of clinical data
around individual patients, sourced from multiple sites and
systems, stored centrally so that it is available to clinicians at
any of the sites.
This central, patient-specific store is CareLocker. CareLocker
can act as a time limited cache of data to deliver a specific
clinical episode or it can be maintained as a long-term store of
relevant clinical data for a specific patient, allowing the patient
to attend any care setting and know that their data is available to
them. In combination, Bleepa and CareLocker enable teams to work
collaboratively around an individual patient as they move between
care settings and represent a digital architecture that plugs CDCs
into wider regional care pathways. This allows these new diagnostic
centres to meaningfully generate results as part of wider clinical
programmes of work, reducing the backlog of care, rather than
acting as isolated centres for additional diagnostic capacity,
which will not meaningfully link into wider clinical work.
The pilot in Sussex is a key example of how our infrastructure
can unlock the potential of CDCs and has enabled the first
symptom-based referral pathway to incorporate a CDC in the UK and,
post period, a GBP0.45m contract for the Company with Sussex ICS /
QVH. QVH in Sussex is one of the UK's exemplar CDC sites and the
first to deliver end-to-end symptom-based pathways through the CDC
programme. Bleepa and CareLocker together create a digital
infrastructure that links clinical data to patients and ensures its
availability to clinicians in multiple provider settings, enabling
patients to move seamlessly between primary and secondary care for
definitive investigation and management based on their symptoms.
The pilot shows other ICSs how they can use CDCs in a more
connected and integrated way to address regional care delivery
needs and that our technology is an essential component to enabling
this model of care.
Strategically, regional cross-provider opportunities are of key
importance to our future trajectory. The average contract value is
considerably higher than a sale to an individual NHS trust, which
requires a similar degree of customer development resource. It is
also an area of low competition as no other provider can currently
offer our combination of patient-centric data management and a
regulated clinician interface, which gives us a large early mover
advantage. Bleepa's UKCA-marked image viewer remains a key USP
given the requirement for image display within a regulatory
compliant image viewer. We hope to achieve significant commercial
traction following the reporting of the initial Sussex pilot
results and evolution of the CDC programme as central funding comes
online.
CareLocker also enables the delivery of remote TB screening in
India where individual X-ray studies are transmitted by Bleepa to
the CareLocker cloud store, where they are processed by our partner
Qure.ai, whose report is then made available back to the scanning
clinician via Bleepa. This combination of technologies holds the
potential to transform TB screening and to bring it to a wider
population, including those in remote or rural communities. This
potential to deliver at scale TB screening was recognised through
the funding awarded by the AWS DDI programme in December 2021. Our
initial pilot in Odisha has currently processed over 520 patients,
identifying TB in approximately 10% of cases. The TB screening
programme has enabled the Company to build a reputation in India
that is unlocking further commercial opportunities for CareLocker
as a vehicle for delivering digital results directly to patients,
and for Bleepa as a clinical tool for Indian healthcare
providers.
During the period, the Company further strengthened its
regulatory credentials to both boost customer confidence and to
further differentiate ourselves from potential competitors. The
team successfully renewed the Company ISO 13485 quality management
system accreditation and achieved ISO 27001 certification for
information security and Cyber Essentials Plus for cyber security.
Notably, Bleepa successfully undertook new accreditation with the
post-Brexit CE mark equivalent, UKCA.
The range of commercialisation opportunities available to the
Company, formed the basis of the Company's oversubscribed GBP11.2m
fund raise in November 2021. In particular, the fundraise enabled
the Company to pursue its strategy of moving into cross-provider
opportunities for Bleepa and CareLocker within the UK and
internationally, notably within India. It has resulted in a strong
cash position of GBP10.3m at the end of the period which positions
the Company well to pursue multiple upcoming opportunities for
commercial growth, domestically and internationally.
Business strategy
The Company's strategy is to increasingly pursue opportunities
for cross-provider care delivery where we expect to recognise
higher contract values and operational margins, within a less
competitive environment. This will predominantly be in the CDC
space in the UK and in cross-provider settings in India, such as TB
screening. The Company will continue to target its core products at
traditional NHS opportunities with individual NHS trusts around
clinical communication and replacement of legacy communication
methods such as pagers and fax machines. In parallel, the Company
seeks to develop opportunities for its core technologies in new and
parallel market segments including developing B2C opportunities for
CareLocker around providing diagnostic results directly to patients
in India; where this is currently achieved by generating hard
copies of results via radiology film or CD.
Whilst the Company has historically adopted a strategy of direct
sales, we are increasingly looking at the opportunity presented by
distribution partnerships, either on a license or co-sell basis.
Increasingly, the strategy to pursue cross-provider regional
contracts will necessitate collaboration with a range of partners
to deliver the end customer value proposition. We have seen early
evidence of this with the TB screening programme where we have
partnered with AWS and Qure.ai, along with telecommunication and
clinical partners in order to deliver a meaningful and scalable
service.
Encouragingly, we are experiencing an increasing number of
inbound enquiries for our products following targeted marketing
campaigns and we have started to see referrals from Bleepa users
who have championed the product, independently of the Company, to
new trusts as they rotate to new sites as part of their training.
Given the procurement lead time of NHS organisations, it will take
time to convert these leads. However, this is clear evidence of
both customer endorsement and product market fit.
It is particularly important to participate in appropriate
procurement frameworks when targeting the NHS. This year the
Company has successfully applied to the DOS6 framework run by the
Crown Commercial Services and post-period, G-Cloud 13, the UK
Government's digital marketplace, which provides public sector
organisations with a simplified purchasing process for cloud-based
services. The Company will continue to apply for relevant
frameworks throughout the upcoming year, mandating that we
simultaneously maintain our appropriate regulatory and security
credentials.
To date, our commercial success has been derived from our
ability to leverage and repurpose our legacy technologies. This has
resulted in the creation of Bleepa, CareLocker, the BleepaBox (our
data conduit and integration tool), and also the opportunity to
license components of our Cadran technology to third parties; such
as Image Engineering in the USA, a partnership that generated
GBP0.14m (2021: GBP0.01m) of license fee revenue in the period.
Leveraging legacy technology and developing our existing products
to maximise product market fit and maintain our competitive
advantage will remain a core strategy for the Company and will
result in continued software development spend on a measured basis.
The Company will also continue its strategy of robust regulatory
certification and IP protection alongside the programme of software
production as a medical device.
Operational Review
Bleepa(TM)
Bleepa, the flagship product of the Company, is a clinical
communication platform that provides a centralised view of an
individual patient's clinical data and enables multiple clinicians
to collaborate around that data to generate clinical management
plans. Bleepa leverages the medical image display capabilities of
the company's legacy and foundational product Cadran PACS,
alongside the regulatory and information governance know how
derived from this product line. Bleepa is the only communication
platform to be regulated as a medical device, holding a UKCA mark
for medical image display; a key requirement for clinical review of
digital patient images. Bleepa is revolutionising the way in which
clinicians work, delivering key efficiency gains for our customers
and improved patient care. Using Bleepa, clinicians are able to
adopt asynchronous communication and work effectively from any
location, allowing them to contribute to patient care from multiple
clinical settings and to move case management forward in and around
other clinical work. This not only frees up clinical capacity, but
it means that care decisions are reached more quickly and that
patients move faster through care pathways, ultimately holding the
potential to reduce patient waiting times and overcome some of the
workforce challenges facing the NHS and other global providers.
This year has seen the continuation of the strategic business
transition away from legacy products with Bleepa accounting for
over one third of total sales made in the period, with the
expectation that it will become the dominant revenue contributor in
the next year. This is a reflection of the increase in relative
contract value compared to legacy product lines, and the increasing
number of sales achieved by the Bleepa product line. Over the last
financial year, the Company saw the first pilot-to-contract wins in
both the public and private markets with NCA and CVS customers,
along with a key contract renewal at RBH. These opportunities have
helped to identify further opportunities for Bleepa with emerging
customer groups, such as ICSs, and prompted further development of
the product in order to pursue these.
In addition to radiology images, the features of Bleepa have
been expanded in the last year to include the display of multiple
result types including: bloods, ECGs, spirometry, structured
clinical reports and non-radiology clinical images such as patient
photos and dermatoscope images. These changes were essential to
enable Bleepa to deliver the breadth of clinical results required
by clinicians engaged in the CDC care programme and have directly
led to our involvement in the Sussex CDC pilot of symptom-based
care pathways. Our deployment with Sussex has seen Bleepa become a
core digital infrastructure tool that facilitates an end-to-end
clinical pathway, starting in primary care, facilitating clinical
result collection in the CDC, and culminating in a
multidisciplinary review by specialists in the secondary care
setting. This symptom-based approach is key to leveraging the CDC
programme to reduce the elective care backlog challenges facing the
NHS and has national implications for delivery. Our involvement in
Sussex establishes Bleepa as a blueprint tool for delivering this
programme at other CDCs across the NHS and represents a substantial
growth opportunity for the Company.
The enhanced product features of Bleepa also included
improvements to the in-app deployment capability of AI tools which
has enabled the delivery of remote TB screening in India. The
AI-powered screening pilot programme is being delivered in
partnership with Qure.ai and AWS and represents an opportunity to
deliver a national programme of work with the right government
support. Our primary focus has been to establish a pilot of the
solution in order to generate real-world evidence of effectiveness.
We have achieved this in Odisha where we are now processing
approximately 30 images a week. The Company is now focused on
building on this pilot to partner with other key organisations in
the value chain, including telecommunication providers and clinical
service partners. Participating in the TB screening programme has
raised the Company's profile within India and enabled conversations
with a number of Indian providers, using Bleepa as a core product
within their clinical organisations. Bleepa's potential value as a
tool for referring patients between sites and collaborating between
providers is growing in India, just as we have seen in the UK.
India represents a huge commercial opportunity on several fronts
for the Company.
The successful funding achieved in November 2021 was essential
to the pursuit of the NHS and Indian opportunities in parallel,
given the resource required to pursue each opportunity
individually. The Company is now well positioned to advance the
strategic approach in both settings and is currently making strong
headway on all fronts.
CareLocker
CareLocker is both an architecture and a product. It is a way of
centralising data around an individual patient and making the
patient the central tenant of data, rather than having it reside in
a multitude of individual system siloes. There are multiple
advantages to the CareLocker methodology of data storage; including
enhanced security, scalability and cost reduction, which links to
lower cloud hosting energy consumption and, importantly, a reduced
carbon footprint associated with data storage and processing.
The key advantage is that by making the patient the holder of
the data you can ensure that the data is available to any setting
that the patient attends and also removes the need to push data
point-to-point between provider sites, a process that is neither
secure nor resource efficient. Instead, data is centralised once
and then made available to stakeholders through a process called
'pass by reference', whereby individual users are given controlled
access to the central store of data via a permissions model.
CareLocker holds huge benefits to healthcare systems who suffer,
universally, from poor data availability and integration between
systems and sites, especially as care delivery moves towards a more
regional model that requires individual organisations to work
collaboratively. The CDC programme is a key example of this in the
UK where at least three providers - GPs, CDCs and hospitals - have
to work together to deliver a clinical pathway. TB screening in
India is another, where clinical data relating to an individual
patient must be securely transmitted and shared with specialist AI
providers and clinical partners. Patient-specific cloud storage is
the surest way of ensuring reliable and secure data flows across
geography that link back to the patient in question.
When CareLocker is positioned as a vehicle for providing
patients access to their own clinical data it becomes a product in
its own right. In India, patients are typically given film prints
or CDs of their images when they attend diagnostic imaging centres.
Neither are a reliable way of transferring data, as they are easily
lost and are not secure. Additionally, CD drives are increasingly
becoming a thing of the past, reducing the number of clinicians
that are able to receive data this way. Film printing, meanwhile,
uses a huge number of chemicals that are environmentally damaging
and it requires the patient to make multiple visits; once for the
imaging and once a few hours later to receive the processed film,
which is not a good consumer experience. CareLocker would provide a
digital vehicle for storing a patient's images and a vehicle for
securely giving access to their treating clinicians. If paid for by
the patient, it would remove the cost of suppling images entirely
for the imaging centre as there is no film production or CD burning
required, increasing their margins. From a patient's perspective,
they would have a secure digital version of their data and they
would only need to attend the imaging centre for the image
acquisition (one visit rather than two), making it far harder to
lose the data that they had paid for. This creates an at-scale
B2B2C opportunity for the Company with the expectation of annual
recurring revenues through a subscription model.
Post period, the company has deployed a CareLocker pilot with an
Indore-based imaging centre network called Sampurna Diagnostics,
giving them the ability to give their patients digital copies of
their imaging studies, rather than film print outs or CDs. This
will give the Company an opportunity to assess the consumer market
for CareLocker as a standalone product offering which we intend to
sell via a B2B2C route where imaging centres can on-sell it to
their client base.
The Company will develop this opportunity in parallel to the CDC
opportunity in the UK using the funding secured in November
2021.
BleepaBox
BleepaBox is part of the Bleepa suite of products. It was
developed as a vehicle for sending images directly from scanners to
the cloud over a 3G mobile network for CVS. However, BleepaBox has
also proved valuable in the Indian TB screening operations, which
have the same requirements for remote image transfer.
More broadly, BleepaBox encompasses Bleepa's integration toolkit
and has become the name of the product that we install in hospitals
as a way of integrating the Bleepa system with provider systems, in
order to retrieve patient data.
Imaging Engineering LLC
Image Engineering LLC (Image Engineering) has a license to
develop products based on a Cadran technology for X-ray image
capture that enables Image Engineering to repair and update
hospital fluoroscopy suites at a considerably lower cost than a
hospital (customer) having to buy entirely new equipment. There is
a large domestic market for the solution within the US, with
approximately 2,000 sites reaching the end of their current kit
lifespan. Feedback receives a license fee for each installation of
its software under the agreement, resulting in GBP0.14m (2021:
GBP0.01m) of revenue following improved trading post Covid
lockdowns. This represents a high margin opportunity as beyond the
initial software configuration, and some ongoing maintenance,
Feedback has no active involvement in the provision or support of
the software. The Company expects to receive ongoing license fees
as Imaging Engineering expand their offering across the USA.
TexRAD(R) & Cadran PACS
As per the previously stated strategy, the Company is reducing
sales of its low-margin legacy products TexRAD and Cadran PACS to
focus on its new product opportunities. The Company expects these
products to form a reducing contribution to overall revenues over
the coming years.
Board Changes
During the period there were some changes to the board. Simon
Sturge stepped down in June 2021 after three years of service, to
focus on his other commitments. Anesh Patel was appointed to the
Board as Chief Financial Officer in November 2021 and has already
delivered several positive initiatives, including improved
financial processes and systems and optimisation of costs. This
appointment was part of a succession planning programme following
Lindsay Melvin's retirement from the Board, also in November
2021.
Post period, Tim Irish stepped down from the board on 01 June
2022, after five years of service for the Company. Annemijn
Eschauzier joined the board as a NED on 01 June 2022 and brings
with her a wealth of commercial and leadership experience across
marketing, sales and business development in the healthcare
sector.
Financial Review
2022 2021
Key performance indicators GBPm GBPm
----------------------------------------- ------- -------
Revenue 0.59 0.29
Gross margin 83% 91%
Sales (non IFRS) 0.67 0.18
Operating expenses (3.00) (2.32)
Operating loss (2.51) (2.06)
EBITDA loss (non IFRS) (1.96) (2.01)
Adjusted EBITDA loss (non IFRS) (1.89) (1.85)
Cash outflows from operating activities (1.25) (2.03)
Cash outflows from investing activities (1.15) (1.44)
Cash & cash equivalents end of period 10.31 2.22
Intangible assets 3.29 2.68
Contract liabilities (deferred income) 0.20 0.12
Net assets 13.71 5.27
Revenue for the year ended 31 May 2022 increased 105% to
GBP0.59m (2021: GBP0.29m). The growth was primarily driven by a
full year of Bleepa revenues (as Bleepa's initial commercialisation
occurred in the final quarter of the prior financial year) and
increased license fees from Imaging Engineering for Cadran X-ray
image capture technology, following its improved trading post Covid
lockdowns. Legacy product revenues from Cadran PACS and Texrad is
expected to decline going forward, as planned, in large part due to
the Group ceasing Cadran PACS services for Royal Papworth Hospital
NHS Foundation Trust post period in July 2022. However, sales of
Bleepa, with a higher average contract value versus legacy
products, is expected to quickly eclipse the declining legacy
products revenue going forward.
Gross margin reduced to 83%, in large part due to a veterinary
customer contract which was signed in the period, resulting in
one-off BleepaBox hardware costs (incurred in the first year only)
and higher cloud hosting costs compared to the prior year.
Sales, a non IFRS measure representing the total customer
contract value invoiced in the period, increased 280% to GBP0.67m
(2021: GBP0.18m), of which Bleepa contributed GBP0.26m (2021:
GBP0.08m) and Image Engineering license fees contributed GBP0.14m
(2021: GBP0.01m). Sales are recognised as revenue monthly across
the life of a customer contract (typically 12 months), with any
amount not recognised as revenue in the current financial year
remaining on the balance sheet as contract liabilities (deferred
income), and recognised as revenue in the forthcoming financial
year. Contract liabilities (or deferred income) as at period end
was GBP0.20m (2021: GBP0.12m).
Operating expenses increased 29% to GBP3.00m (2021: GBP2.32m),
primarily due to headcount expansion, commencement of amortisation
of Bleepa software development costs, and cost inflation. Operating
loss increased to GBP2.51m (2021: GBP2.06m). EBITDA loss, excluding
depreciation and amortisation charges of GBP0.55m (2021: GBP0.05m),
improved 3% to GBP1.96m (2021: GBP2.01m). Adjusted EBITDA loss,
excluding share-based payment charges of GBP0.07m (2021: GBP0.16m),
remained relatively flat at GBP1.89m (2021: GBP1.85m).
Cash outflows from operating activities decreased 38% to
GBP1.25m (2021: GBP2.03m) primarily due to higher customer receipts
offsetting the increase in operating expenses, and the benefit of
two R&D tax credit refunds being received in the period,
totaling GBP0.77m (2021: nil). Cash outflows from investing
activities, primarily being software development expenditures with
Future Processing, decreased 20% to GBP1.15m (2021: GBP1.44m) as
the Group reduced expenditures to extend the cash runway prior to
the fundraise completed in November 2021. The Group's cash position
as at 31 May 2022 was GBP10.31m (31 May 2021: GBP2.22m), an
increase of GBP8.08m over the prior year following net proceeds of
GBP10.49m from the November 2021 fundraise.
Intangible assets increased by GBP0.61m to GBP3.29m (2021:
GBP2.68m), primarily representing the capitalised software
development expenditures of GBP1.15m, offset by amortisation
charges of GBP0.54m (2021: GBP0.03m). Net assets increased to
GBP13.71m (2021: GBP5.27m) as at 31 May 2022.
Outlook
The Company is now delivering substantial revenue growth,
achieving its highest ever revenues during the period under review.
This follows the decline in revenue associated with commencing the
development of Bleepa, whilst winding down our legacy product lines
during the previous period.
The Company is now benefiting from increasing Bleepa sales with
a higher average contract value than legacy products, a trend that
is set to increase as we move towards regional programmes of
delivery around the CDC space. Post period, the Company was awarded
a GBP0.45m contract with Sussex ICS / QVH to facilitate an
extension of the current CDC pilot in Sussex to further GP
practices and to enable the adoption of further clinical pathways.
The contract covers the period from 31 March 2022 when the original
pilot MOU formally ended. The contract will run until 31st March
2023 by which point QVH expect to have concluded a formal
procurement for the next phase of the CDC programme rollout, as is
required by NHS procurement policies. Feedback intends to submit a
bid in this subsequent procurement phase.
The Company completed its pivot towards Bleepa during a
particularly turbulent trading period resulting from COVID-19.
While this undoubtedly impeded our ability to sell and connect with
our target customers, we are already seeing a large increase in
customer engagement as we emerge from the pandemic, giving the
Board confidence in the future opportunity - as healthcare
providers recover and look to solutions that can aid them in their
recovery. Bleepa and CareLocker are now perfectly positioned to
address the manifold problems affecting our customers in their post
pandemic recovery. Namely, reducing the elective care backlog by
driving efficiencies in clinical pathway delivery and clinical
workforce shortages by enabling clinicians to work collaboratively
across geography and to be deployed more effectively to maximise
the impact of specialists within a region. These capabilities are
unique to our patient-centric and regulated infrastructure, and the
real-world example of Sussex positions us right at the front of the
NHS recovery agenda.
The Board also expects to see progress on the various
opportunities that we have been evaluating in India, following our
initial trade mission with DIT in 2019. The Company has been
scoping this market over an extended period looking for
opportunities to leverage our product suite and have identified the
opportunity to bring digital TB screening to rural communities,
provide patient access to digital imaging through CareLocker, and
position Bleepa as a core clinical tool directly with Indian
healthcare providers, who echo many of the pain points experienced
by our customers in the NHS. Time has also been spent identifying
the right channel partners and we are now confident in our approach
to market. Whilst the Board expects the price point achievable in
India to be naturally lower than those seen in the domestic market,
the scale of the opportunity more than offsets this, making India
an extremely attractive proposition for the Company in the next
12-18 months.
It would not have been possible to pursue these opportunities
had we not invested heavily in repurposing our legacy products. The
pivot was a bold but necessary move, and we are now beginning to
see the rewards of that decision; both through strong revenue
growth from new customers and from the diverse pipeline of
opportunity in front of us.
Feedback plc
Condensed Consolidated Statement of Comprehensive Income
Note 2022 2021
GBP GBP
----------------------------- ---- ---- -------------------------- -------------------- -----------------------
Revenue 4 588,576 287,415
Cost of sales (99,321) (25,024)
Gross profit 489,255 262,391
Other operating expenses 5 (3,002,489) (2,322,518)
Operating loss 6 (2,513,234) (2,060,127)
Net finance income 7 2,012 281
Loss before taxation (2,511,222) (2,059,846)
Tax credit 9 392,631 440,333
Loss after tax attributable to the
equity shareholders of the Company (2,118,591) (1,619,513)
Total comprehensive expense for the year (2,118,591) (1,619,513)
----------------------------------------- -------------------------- -------------------- -----------------------
Loss per share (pence)
Basic and diluted 11 (0.11) (0.16)
----------------------------------------- -------------------------- -------------------- -----------------------
Feedback plc
Condensed Consolidated Statement of Changes in Equity
GROUP Share Share Capital Reserve Retained Translation Share option Total
Capital Premium Earnings Reserve Reserve
GBP GBP GBP GBP GBP GBP GBP
At 31 May 2020 1,349,876 5,221,282 299,900 (5,110,965) (209,996) 219,159 1,769,256
Loss of the
year and Total
comprehensive
loss for the
year - - - (1,619,513) (1,619,513)
New shares
issued 1,317,454 3,952,363 - - - - 5,269,817
Costs of new
shares issued - (313,566) - - - - (313,566)
Share options - - - - - - -
lapsed
Share-based
payments - - - - - 162,615 162,615
---------------- ------------ ----------- ----------------- ------------ ------------------ ------------- ------------
Total
transactions
with owners 1,317,454 3,638,797 - - - 162,615 5,118,866
At 31 May 2021 2,667,330 8,860,079 299,900 (6,730,478) (209,996) 381,774 5,268,609
---------------- ------------ ----------- ----------------- ------------ ------------------ ------------- ------------
Loss of the
year and Total
comprehensive
loss for the
year - - - (2,118,591) - - (2,118,591)
New Shares
issue 4,000,000 7,200,000 - - - - 11,200,000
Costs of new
shares issued - (709,008) - - - - (709,008)
Share-based
payments - - - - - 68,264 68,264
---------------- ------------ ----------- ----------------- ------------ ------------------ ------------- ------------
Total
transactions
with owners 4,000,000 6,490,992 - - - 68,264 10,559,256
At 31 May 2022 6,667,330 15,351,071 299,900 (8,849,069) (209,996) 450,038 13,709,274
---------------- ------------ ----------- ----------------- ------------ ------------------ ------------- ------------
COMPANY Share Capital Share Retained Share Total
Premium Earnings option
Reserve
GBP GBP GBP GBP GBP
---------------- ------------ ----------- ----------------- ------------ ------------------ ------------- ------------
At 31 May 2020 1,349,876 5,221,282 (6,418,485) 219,159 371,832
Total
comprehensive
loss for the
year - - (437,373) - (437,373)
New shares
issued 1,317,454 3,952,363 - - 5,269,817
Costs of new
shares issued - (313,566) - - (313,566)
Share options - - - - -
lapsed
Share-based
payments - - - 162,615 162,615
---------------- ------------ ----------- ----------------- ------------ ------------------ ------------- ------------
Total
transactions
with owners 1,317,454 3,638,797 - 162,615 5,118,866
At 31 May 2021 2,667,330 8,860,079 (6,855,858) 381,774 5,053,325
---------------- ------------ ----------- ----------------- ------------ ------------------ ------------- ------------
Loss of the
year and Total
comprehensive
loss for the
year - - (559,408) - (559,408)
New shares
issued 4,000,000 7,200,000 - - 11,200,000
Costs of new
shares issued - (709,008) - - (709,008)
Share-based
payments - - 68,264 68,264
---------------- ------------ ----------- ----------------- ------------ ------------------ ------------- ------------
Total
transactions
with owners 4,000,000 6,490,992 - 68,264 10,559,256
At 31 May 2022 6,667,330 15,351,071 (7,415,266) 450,038 15,053,173
---------------- ------------ ----------- ----------------- ------------ ------------------ ------------- ------------
Feedback plc
Condensed Consolidated Statement of Financial Position
2022 2021
Notes GBP GBP
----------------------------------------------------------------- -------- -------- ------------ --------------
Assets
Non-current assets
Property, plant and equipment 13 8,367 13,773
Intangible assets 14 3,288,811 2,681,641
----------------------------------------------------------------- -------- -------- ------------
3,297,178 2,695,414
----------------------------------------------------------------- -------- -------- ------------ --------------
Current assets
Trade and other receivables 15 308,293 138,042
Corporation tax receivable 392,351 767,120
Cash and cash equivalents 10,305,577 2,220,862
----------------------------------------------------------------- -------- -------- ------------ --------------
11,006,221 3,126,024
----------------------------------------------------------------- -------- -------- ------------ --------------
Total assets 14,303,400 5,821,438
----------------------------------------------------------------- -------- -------- ------------ --------------
Equity
Capital and reserves attributable to the Company's equity
shareholders
Called up share capital 18 6,667,330 2,667,330
Share premium account 18 15,351,071 8,860,079
Capital reserve 18 299,900 299,900
Translation reserve 18 (209,996) (209,996)
Share option expense reserve 18 450,038 381,774
Retained earnings 18 (8,849,069) (6,730,478)
----------------------------------------------------------------- -------- -------- ------------ --------------
Total equity 13,709,274 5,268,609
----------------------------------------------------------------- -------- -------- ------------ --------------
Liabilities
--------------
Current liabilities
Trade and other payables 16 594,126 548,836
----------------------------------------------------------------- -------- -------- ------------
594,126 548,836
----------------------------------------------------------------- -------- -------- ------------ --------------
Non-current liabilities
Contract liabilities 16 - 3,993
----------------------------------------------------------------- -------- -------- ------------ --------------
- 3,993
----------------------------------------------------------------- -------- -------- ------------ --------------
Total liabilities 594,126 552,829
----------------------------------------------------------------- -------- -------- ------------ --------------
Total equity and liabilities 14,303,400 5,821,438
----------------------------------------------------------------- -------- -------- ------------ --------------
Feedback plc
Condensed Consolidated Statement of Cash Flows
2022 2021
GBP GBP
------------------------------------------------------ ---------------- -----------------
Cash flows from operating activities
Loss before tax (2,511,222) (2,059,846)
------------------------------------------------------ ---------------- -----------------
Adjustments for:
Net finance income (2,012) (281)
Depreciation and amortisation 552,931 48,755
Share based payment expense 68,265 162,615
Decrease/(Increase) in trade receivables (198,754) 72,614
Decrease in other receivables 28,503 (80,779)
Increase in trade payables (30,100) 77,915
Increase/(Decrease) in other payables 71,397 (253,759)
Corporation tax received 767,400 -
------------------------------------------------------ ---------------- -----------------
Total adjustments 1,257,630 27,080
------------------------------------------------------ ---------------- -----------------
Net cash used in operating activities (1,253,592) (2,032,766)
------------------------------------------------------ ---------------- -----------------
Cash flows from investing activities
Purchase of tangible fixed assets (5,450) (16,083)
Purchase of intangible assets (1,149,246) (1,419,472)
Net finance income received 2,012 281
------------------------------------------------------
Net cash used in investing activities (1,152,684) (1,435,274)
------------------------------------------------------ ---------------- -----------------
Cash flows from financing activities
Net proceeds of share issue 10,490,991 4,956,252
------------------------------------------------------ ---------------- -----------------
Net cash generated from financing activities 10,490,991 4,956,252
------------------------------------------------------ ---------------- -----------------
Net increase/(decrease) in cash and cash equivalents 8,084,715 1,488,212
Cash and cash equivalents at beginning of year 2,220,862 732,650
Cash and cash equivalents at end of year 10,305,577 2,220,862
------------------------------------------------------ ---------------- -----------------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 MAY 2022
1. General information
The Company is a public limited company limited by shares,
domiciled in the United Kingdom and incorporated under registered
number 00598696 in England and Wales. The Company's registered
office is 201 Temple Chambers, 3-7 Temple Avenue, London, England,
United Kingdom, EC4Y 0DT.
The Company is quoted on AIM, a market operated by the London
Stock Exchange. These Financial Statements were authorised for
issue by the Board of Directors on 16 September 2022.
2. Adoption of the new and revised International Financial Reporting Standards
The Company has adopted all of the new or amended Accounting
Standards and Interpretations issued by the International
Accounting Standards Board (IASB) that are mandatory for the
current reporting period.
The following new and revised Standards and Interpretations are
relevant to the company, but the Company has not early adopted
these new standards. The Directors do not anticipate that the
adoption of these standards will have a material impact on the
reported results of the Company:
- IFRS 1 - Amendment First-time Adoption of International
Financial Reporting Standards - resulting from Annual Improvements
to IFRS Standards
- IFRS 9 - Financial Instruments - Amendments resulting from
Annual Improvements to IFRS Standards 2018-2020 (fees in the 10
percent test for derecognition of financial liabilities)
- IFRS 17 - Insurance Contracts
- IAS 1 - Presentation of Financial Statements - Amendment
regarding the classification of liabilities as current or
non-current
- IAS 1 - Presentation of Financial Statements - Amendments
regarding the disclosure of accounting policies
- IAS 8 amendment - Accounting Policies, Changes in Accounting
Estimates and Errors - Definition of Accounting Estimates
- IAS 12 amended - Income Taxes - Amendments regarding deferred
tax on leases and decommissioning obligations
- IAS 16 amended - Property, Plant and Equipment - Amendments
prohibiting a company from deducting from the cost of property,
plant and equipment amounts received from selling items produced
while the company is preparing the asset for its intended use
- IAS 37 amended - Provisions, Contingent Liabilities and
Contingent Assets - Regarding the costs to include when assessing
whether a contract is onerous
3. Significant accounting policies
(a) Basis of preparation
These financial statements have been prepared in accordance with
UK adopted international accounting standards. The policies set out
below have been consistently applied to all the years
presented.
No separate income statement is presented for the parent Company
as provided by Section 408, Companies Act 2006.
(b) Basis of consolidation
The Group financial statements consolidate the financial
statements of Feedback plc and its subsidiaries (the "Group") for
the years ended 31 May 2022 and 2021 using the acquisition
method.
The financial statements of subsidiaries are prepared for the
same reporting year as the parent company, using consistent
accounting policies. All inter-company balances and transactions,
including unrealised profits arising from them, are eliminated.
Subsidiaries are fully consolidated from the date
on which control is transferred to the Group and cease to be
consolidated from the date on which control is transferred out of
the Group.
Investments in subsidiary companies are held at cost less
impairment.
(c) Going Concern
The Group incurred a net loss of GBP 2,118,592 for the year
ended 31 May 2022 however it had net assets of GBP13,709,274
inclusive of GBP10,305,577 of cash and cash equivalents at 31 May
2022. The directors have considered the applicability of the going
concern basis in the preparation of the financial statements. This
included a review of financial results, internal budgets and cash
flow forecasts to 30 September 2023, including downside
scenarios.
After making enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future, and that the
Group and Company will have sufficient funds to continue to meet
their liabilities as they fall due for at least twelve months from
the date of approval of the financial statements. Accordingly, the
Directors believe that the Group and Company are a going concern
and have therefore prepared the financial statements on a going
concern basis.
(d) Intangible assets
Intangible assets are carried at cost less accumulated
amortisation and accumulated impairment losses. An intangible asset
acquired as part of a business combination is recognised outside
goodwill if the asset is separable or arises from contractual or
other legal rights and its fair value can be reliably measured.
The significant intangible asset cost related to external
software development of products which are integral to the trade of
the Group's medical imaging products.
Amortisation and impairment charges are recognised in other
operating expenses in the income and expenditure account. Internal
development costs are not capitalised but written off during the
year in which the expenditure is incurred.
The carrying value of intangible assets which are not yet being
amortised because they are not yet available for use are reviewed
for impairment annually. The carrying value of intangible assets
which are currently being amortised are reviewed for impairment
when there is an indication that they may be impaired. Impairment
losses are recognised in other operating expenses in the income and
expenditure account.
Costs incurred on development projects (relating to the design
and testing of new or improved products) are recognised as
intangible assets when it is probable that the project will be a
success, considering its commercial and technological feasibility,
and costs can be measured reliably. Only external software
development expenditure is capitalised. Internal research
expenditure is written off in the year in which it is incurred.
Other development expenditure is recognised as an expense as
incurred. Intangible assets that have a finite useful life and that
have been capitalised are amortised on a straight line basis as
follows:
Intangible asset Useful economic life
Intellectual Property 5 - 10 years
Customer relationships 4 years
Software development 5 years
Intellectual Property primarily relates to patent and trademark
application costs. Software development costs capitalised in the
year relate to products and product improvements which are yet to
be ready for use. They are not yet amortised.
(e) Valuation of Investments
Investments held as non-current assets are stated at cost less
provision for impairment.
(f) Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at
call with banks, other short-term highly liquid investments with
original maturities of three months or less, and bank overdrafts.
When used, bank overdrafts are shown within borrowings in current
liabilities on the balance sheet.
(g) Goodwill
Business combinations on or after 1 April 2006 are accounted for
under IFRS 3 using the acquisition method. Any excess of the cost
of business combinations over the Group's interest in the net fair
value of the identifiable assets, liabilities and contingent
liabilities is recognised in the balance sheet as goodwill and is
not amortised.
After initial recognition, goodwill is not amortised but is
stated at cost less accumulated impairment loss, with the carrying
value being reviewed for impairment, at least annually and whenever
events or changes in circumstance indicate that the carrying value
may be impaired.
For the purposes of impairment testing, goodwill is allocated to
the related cash generating units monitored by management. Where
the recoverable amount of the cash generating unit is less than its
carrying amount, including goodwill, an impairment loss is
recognised in the statement of comprehensive income.
(h) Property, plant and equipment
All property, plant and equipment is stated at historical cost
less depreciation. Depreciation on other assets is provided on cost
or valuation less estimated residual value in equal annual
instalments over the estimated lives of the assets. The rates of
depreciation are as follows:
Computer and office equipment 10 - 50% p.a.
Gains and losses on disposals are determined by comparing the
proceeds with the carrying amount and are recognised in the income
statement.
(i) Foreign currency
Transactions denominated in foreign currencies are translated
into sterling at the rates ruling at the date of the transactions.
Monetary assets and liabilities denominated in foreign currencies
at the balance sheet date are translated at the rates ruling at
that date. These translation differences are dealt with in the
income statement.
(j) Revenue recognition
Sales transactions include software installation, software
licenses, scientific and software support and consultancy. Revenue
is measured at the fair value of the contractually agreed
consideration received or receivable and represents amounts
receivable for services provided in the normal course of business,
net of VAT. The Group recognises revenue on the basis of following
IFRS15 whereby revenue is recognised on the promise of goods and
services to the customer at the transaction price contractually
agreed and once the performance obligations have been met. Revenue
is recognised depending on the related software or service outline
below. The sales invoice is raised when the customer's purchase
order is received, and the debt is typically payable within 30-60
days of the invoice date. In practice the debt is paid when the
software installation has been completed. There are no obligations
for returns, refunds or warranties.
Revenue relating to software consultancy and similar services is
recognised as the services are performed and completed. The invoice
is recognised on a linear basis over the duration of the
contract.
Revenue relating to the sale of software licences such as Bleepa
or associated support services is recognised over the contractual
period to which the licence relates or the duration of the support
contract.
Revenue recognised from the sale of TexRAD software and related
scientific support services are recognised over the estimated
duration of the Group's involvement in a customer's project which
is considered to represent its performance obligation. This is that
the Group will provide the support required as agreed when the sale
was made.
The difference between the amount of revenue from contracts with
customers recognised and the amount invoiced on a particular
contract is included in the statement of financial position as
contract liabilities. Normally, the full contract value is invoiced
when the customer's purchase order is received. Cash payments
received as a result of this advance billing are not representative
of revenue earned on the contract as revenues are recognised over
the duration of the contract (typically twelve months). Contract
liabilities which are expected to be recognised within one year are
included within current liabilities. Contract liabilities which are
expected to be recognised after one year are included within
non-current liabilities.
(l) Pension Costs
The Group operated a defined contribution pension scheme during
the year. The pension charge represents the amounts payable by the
Group to the scheme in respect of that year.
(m) Taxation
The tax credit represents the sum of the current tax credit and
deferred tax credit.
The tax currently payable is based on taxable profit for the
period. Taxable profit differs from net profit as reported in the
income statement because it excludes items of income or expense
that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. The Group's
liability for current tax is calculated by using tax rates that
have been enacted or substantively enacted by the balance sheet
date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amount of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit, and is accounted for using the
balance sheet liability method. Deferred tax liabilities are
recognised for all taxable temporary differences and deferred tax
assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities
are not recognised if the temporary difference arises from the
initial recognition of goodwill or from the initial recognition
(other than in a business combination) of other assets and
liabilities in a transaction which affects neither the tax profit
nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries, except where
the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will
not reverse in the foreseeable future. Deferred tax is calculated
at the tax rates that are expected to apply to the period when the
asset is realised or the liability is settled based upon tax rates
that have been enacted or substantively enacted by the balance
sheet date. Deferred tax is charged or credited in the income
statement, except when it relates to items credited or charged
directly to equity, in which case the deferred tax is also dealt
with in equity.
(n) Financial instruments
Financial assets
Financial assets are measured at amortised cost, fair value
through other comprehensive income (FVTOCI) or fair value through
profit or loss (FVTPL). The measurement basis is determined by
reference to both the business model for managing the financial
asset and the contractual cash flow characteristics of the
financial asset. The group's financial assets comprise of trade and
other receivables and cash and cash equivalents.
Trade receivables
Trade receivables are measured at amortised cost and are carried
at the original invoice amount less allowances for expected credit
losses. Expected credit losses are calculated in accordance with
the simplified approach permitted by IFRS 9, using a provision
matrix applying lifetime historical credit loss experience to the
trade receivables. The expected credit loss rate varies depending
on whether, and the extent to which, settlement of the trade
receivables is overdue and it is also adjusted as appropriate to
reflect current economic conditions and estimates of future
conditions. For the purposes of determining credit loss rates,
customers are classified into groupings that have similar loss
patterns. The key drivers of the loss rate are the aging of the
debtor, the geographic location and the company sector (public vs
private). When a trade receivable is determined to have no
reasonable expectation of recovery it is written off, firstly
against any expected credit loss allowance available and then to
the income statement. For trade receivables, which are reported
net, such provisions are recorded in a separate provision account
with the loss being recognised in the consolidated statement of
comprehensive income Subsequent recoveries of amounts previously
provided for or written off are credited to the income
statement.
Cash and cash equivalents
Cash and cash equivalents comprise cash at hand and deposits
with maturities of three months or less.
Financial liabilities
The Group's financial liabilities consist of trade payables and
other financial liabilities. Financial liabilities are classified
as measured at amortised cost or FVTPL. A financial liability is
classified as FVTPL if it is held-for trading, it is a derivative
or it is designated as such on initial recognition. Other financial
liabilities are subsequently measured at amortised cost using the
effective interest method. Interest expense is recognised in profit
or loss.
(o) Employee share options and warrants
The Group has applied the requirements of IFRS 2 Share-based
Payments.
The Group has issued equity-settled share-based payment
transactions to certain employees and previously issued warrants to
the vendors of the acquired subsidiary, TexRAD Limited.
Equity-settled share-based payment transactions are measured at
fair value at the date of grant. The fair value determined at the
grant date of equity-settled share-based payments is expensed on a
straight-line basis over the vesting period, based on the Group's
estimate of shares that will eventually vest. Fair value is
measured by use of the Black Scholes option pricing model for share
options without performance obligations and the Monte Carlo option
pricing model for share options with performance obligations. The
expected life used in the model has been adjusted, based on
management's best estimate, for the effect of non-transferability,
exercise restrictions, and behavioural considerations.
(p) Key areas of judgement
The preparation of financial statements requires the Board of
Directors to make estimates and judgments that affect reported
amounts of assets, liabilities, revenues and expenses. These
estimates and judgements are based on historical experience and
various other assumptions that management and the Board of
Directors believe are reasonable under the circumstances, the
results of which form the basis for making judgments about the
carrying value of assets and liabilities that are not readily
apparent from other sources. The key areas of judgement are:
-- Intangible assets - Patent and trademark applications are
included at cost less amortisation and impairment. Other intangible
assets including development costs are recognised only when it is
probable that a project will be a success. There is a risk
therefore that a project previously assessed as likely to be
successful fails to reach the desired level of commercial or
technological feasibility. Where there is no probable income to be
generated from these assets an estimation of the carrying value and
the impairment of the intangible assets and development costs,
including goodwill, has been made.
-- Fair value measurement - share options and warrants issued
included in the Group's and Company's financial statements require
measurement at fair value. The calculation of fair
values requires the use of estimates and judgements, details of
the valuation can be found in Note 18 of this report.
-- Revenue recognition-revenue on the sale of TexRAD software
and provision of related scientific support services is recognised
over the expected duration of the group's involvement in customer's
projects as the group's staff contribute significant support,
analysis and input to those customers using TexRAD software for
research purposes. Judgement based on past experience is used to
determine the expected duration of involvement over which income
should be deferred and recognised however the duration of the
group's involvement may vary from expectations.
4. Segmental reporting
The Directors have determined that the operating segments based
on the management reports which are used to make strategic
decisions are medical imaging and head office. The trading
activities of the Company solely relate to Medical Imaging and the
Head Office covers the costs of running the parent company,
Feedback PLC.
Year ended 31 May 2022 Medical Head Office Total
Imaging
GBP GBP GBP
------------------------------- ------ ------------ ------------ ------------
Revenue
External 588,576 - 588,576
Expenditure
External (excluding depreciation
and amortisation) (1,629,998) (916,869) (2,546,867)
Depreciation and amortisation (552,931) - (552,931)
--------------------------------------- ------------
Loss before tax (1,594,353) (916,869) (2,511,222)
--------------------------------------- ------------ ------------ ------------
Tax credit 392,631 - 392,631
Balance sheet
Total assets 4,109,874 10,193,526 14,303,400
Total liabilities (520,112) (74,014) (594,126)
--------------------------------------- ------------ ------------ ------------
3,589,762 10,119,512 13,709,274
-------------------------------------- ------------ ------------ ------------
Capital expenditure (all located
in the UK) (1,154,697) - (1,154,697)
--------------------------------------- ------------ ------------ ------------
Year ended 31 May 2021 Medical Head Office Total
Imaging
GBP GBP GBP
------------------------------- ------ ------------ ------------ ------------
Revenue
External 287,415 - 287,415
Expenditure
Total (excluding depreciation
and amortisation) (1,546,183) (752,323) (2,298,506)
Depreciation and amortisation (48,755) - (48,755)
--------------------------------------- ------------ ------------ ------------
Loss before tax (1,307,523) (752,323) (2,059,846)
--------------------------------------- ------------ ------------ ------------
Tax credit 440,333 - 440,333
--------------------------------------- ------------ ------------ ------------
Balance sheet
Total assets 3,700,845 2,120,593 5,821,438
Total liabilities (487,308) (65,521) (552,829)
3,213,537 2,055,072 5,268,609
-------------------------------------- ------------ ------------ ------------
Capital expenditure (all
located in the UK) (1,435,554) - (1,435,554)
--------------------------------------- ------------ ------------ ------------
Reported segments' assets are reconciled to total assets as
follows:
External revenue Non-current Total liabilities
by assets by
location of customer location of location of
assets assets
----------------------- ------------------------ --------------------
2022 2021 2022 2021 2022 2021
GBP GBP GBP GBP GBP GBP
------------------- ----------- ---------- ---------- ------------ --------- ---------
United Kingdom 432,129 217,394 3,297,179 2,695,414 594,126 552,829
Europe 4,485 5,364 - - -
Rest of the world 151,962 64,657 - - -
------------------- ----------- ---------- ---------- ------------ --------- ---------
Total 588,576 287,415 3,297,179 2,695,414 594,126 552,829
------------------- ----------- ---------- ---------- ------------ --------- ---------
GBP115,000 of revenue recognised in the current year was
recorded in contract liabilities in the prior year.
Major customers
During the year ended 31 May 2022, the Group generated
GBP232,000 (2021: GBP153,000) of revenue from one customer in the
United Kingdom, which is equal to 39% (2021: 53%) of total Group
revenues in the year. Major customer from the rest of the world is
located in USA and accounts for GBP142,164 of group revenue
generated.
5. Other operating expenses
2022 2021
GBP GBP
------------------------------- ---------- ----------
Administrative costs:
Employment and other costs 2,449,558 2,273,763
Amortisation and depreciation
costs 552,931 48,755
---------------------------------- ----------
3,002,489 2,322,518
------------------------------- ---------- ----------
6. Operating loss
2022 2021
GBP GBP
---------------------------------- ---------------------- -------- -------
This is stated after charging
Depreciation and amortisation
Owned assets 10,856 14,140
Amortisation of intangible
assets 542,076 34,615
Provision for doubtful debts 1,529 266
Foreign exchange differences (648) 24,573
Auditors' remuneration
Audit of parent company and group financial
statements 13,800 10,000
Audit of subsidiaries 9,200 6,800
7. Net finance income
2022 2021
GBP GBP
Interest received 2,012 281
---------------------- ------ -----
2,012 281
------------------- ------ -----
8. Directors and employees
2022 2021 2022 2021
Average Average Year-end Year-end
FTE FTE
Number of employees
Selling and distribution 2 1 2 1
Administration 12 9 11 11
Research and development 5 6 6 6
------------------------------------ -------- -------- ---------- ----------
19 16 19 18
---------------------------------- -------- -------- ---------- ----------
2022 2021
GBP GBP
Staff costs
Wages and salaries 1,267,740 1,033,975
Social security costs 159,225 121,736
Payments to defined contribution
pension scheme 144,308 108,796
Share based payment expense 68,265 162,615
1,639,538 1,427,122
---------------------------------- -------- -------- ---------- ----------
9. Taxation on loss
2021 2021
GBP GBP
------------------------------------------------ ------------ ------------
(a) The tax credit for the year:
UK Corporation tax (392,631) (439,589)
Current tax credit (392,631) (439,589)
Adjustments in respect of prior periods - (744)
(392,631) (440,333)
------------------------------------------------ ------------ ------------
(b) Tax reconciliation
Loss before tax (2,511,222) (2,059,846)
Loss at the standard rate of corporation
tax in the UK of 19% (2018 - 19%) (480,825) (391,371)
Effects of:
Fixed asset differences - (5,872)
Expenses non-deductible for tax purposes (506,626) 37,558
Other permanent differences - 118
Other income (376,897) -
Additional deduction for R&D expenditure (1,530,494) (325,572)
Surrender of tax losses for R & D
tax credit refund (392,631) 136,424
Adjustments to tax charge in respect
of previous periods - (744)
Deferred tax not recognised 2,903,525 332,069
Remeasurement of deferred tax for
change in tax rates - (222,943)
Net capital allowances (8,683) -
------------------------------------------- ---- ------------ ------------
Tax charge for the year (392,631) (440,333)
------------------------------------------- ---- ------------ ------------
In view of the tax losses carried forward there is a deferred
tax amount of approximately GBP1,609,875 (2021: GBP928,928) which
has not been recognised in the group Financial Statements. This
contingent asset will be realised when the Group makes sufficient
taxable profits in the relevant company.
In view of the tax losses carried forward there is a deferred
tax amount of approximately GBP789,816 (2021: GBP838,906) which has
not been recognised in the company Financial Statements. This
contingent asset will be realised when the Company makes sufficient
taxable profits.
10. Results of Feedback Plc
As permitted by Section 408 of the Companies Act 2006, the
income and expenditure account of the parent company is not
presented as part of these financial statements. The Company's loss
for the financial year is GBP559,408 (2021 loss: GBP437,373)
11. Loss per share
Basic loss per share is calculated by reference to the loss on
ordinary activities after taxation of GBP2,118,591 (2021:
GBP1,619,513) and on the weighted average of 1,869,123,462 (2021:
1,023,499,123) shares in issue.
2022 2021
GBP GBP
Net loss attributable to
ordinary equity holders (2,118,591) (1,619,513)
------------------------------- -------------- --------------
2022 2021
------------------------------ -------------- --------------
Weighted average number of
ordinary shares for basic
earnings per share 1,869,123,462 1,023,499,123
Effect of dilution:
Share Options - -
Warrants - -
------------------------------ -------------- --------------
Weighted average number
of ordinary shares adjusted
for the effect of dilution 1,869,123,462 1,023,499,123
------------------------------- -------------- --------------
Loss per share (pence)
Basic (0.11) (0.16)
Diluted (0.11) (0.16)
------------------------------- -------------- --------------
There is no dilutive effect of the share options and warrants as
the dilution would be negative.
12. Investments
Share Shares Total
in Group in joint
undertakings venture
Company GBP GBP GBP
------------------------------------- -------------- ---------- ----------
Cost
------------------------------------- -------------- ---------- ----------
At 31 May 2020 2,380,455 1,000 2,381,455
Addition (see note below) 59,913 - 59,913
------------------------------------- -------------- ---------- ----------
At 31 May 2021 2,440,368 1,000 2,441,368
------------------------------------- -------------- ---------- ----------
Addition (see note below) 19,436 - 19,436
Disposal of shares in joint venture - (1,000) (1,000)
------------------------------------- -------------- ---------- ----------
As at 31 May 2022 2,459,804 - 2,459,804
Provision for impairment
------------------------------------- -------------- ---------- ----------
At 31 May 2020 2,380,455 1,000 2,381,455
Additional impairment included
in operating expenses (see note
below) 59,913 - 59,913
At 31 May 2021 2,440,368 1,000 2,441,368
Additional impairment included
in operating expenses (see note
below) 19,436 - 19,436
Disposal of shares in joint venture - (1,000) (1,000)
------------------------------------- -------------- ---------- ----------
At 31 May 2022 2,459,804 - 2,459,804
------------------------------------- -------------- ---------- ----------
Net Book Value - - -
At 31 May 2022 - - -
------------------------------------- -------------- ---------- ----------
At 31 May 2021 - - -
------------------------------------- -------------- ---------- ----------
All of the above investments are unlisted. The disposal of
shares in joint venture is due to the dissolution of Prostate
Checker Ltd, which had been fully provided for previously.
The directors have made full provision against the cost of
investment in the subsidiaries due to the net liabilities shown in
the subsidiary financial statements. The additions in the current
and prior year are related to options in Feedback Medical Limited
which would be satisfied with Feedback Plc shares if/when they are
exercised
Particulars of principal subsidiary companies during the year,
all the shares of which being beneficially held by Feedback Plc,
were as follows:
Company Activity Country of incorporation Proportion of Shares
and operation held
--------------------- ---------------- ------------------------- ---------------------
Feedback Black Dormant England 100%
Box Company Limited Ordinary GBP1
Bleepa Limited Dormant England 100%
Ordinary GBP2
Feedback Medical Medical Imaging England 100%
Limited A Ordinary GBP1
100% B Ordinary 1p
TexRAD Limited Medical Imaging England 100%
Ordinary 1p
--------------------- ---------------- ------------------------- ---------------------
TexRAD Limited is owned 100% by virtue of a direct holding by
Feedback plc of 91% and an indirect holding via Feedback Medical
Ltd of 9%.
All the subsidiary companies have been included in these
consolidated financial statements. Each subsidiary's registered
office is 201 Temple Chambers, 3-7 Temple Avenue, London, England,
United Kingdom, EC4Y 0DT.
In accordance with section 394(A) of the Companies Act 2006, a
company is exempt from preparing individual accounts for a
financial year. This section 394(A) of the Companies Act 2006
applies to Brickshield Limited (company registration number
064514313) and Bleepa Limited (company registration number
12118570).
13. Property, plant and equipment
Computer
Equipment Total
Group GBP GBP
--------------------- ---------- -------
Cost
At 31 May 2020 30,422 30,422
Additions 16,083 16,083
---------------------- ----------
At 31 May 2021 46,505 46,505
Additions 5,450 5,450
---------------------- ---------- -------
As 31 May 2022 51,955 51,955
---------------------- ---------- -------
Depreciation
At 31 May 2020 18,592 18,592
Charge for the year 14,140 14,140
---------------------- ---------- -------
At 31 May 2021 32,732 32,732
Charge for the year 10,856 10,856
---------------------- ---------- -------
At 31 May 2022 43,588 43,588
---------------------- ----------
Net Book Value
At 31 May 2022 8,367 8,367
---------------------- ---------- -------
At 31 May 2021 13,773 13,773
---------------------- ---------- -------
14. Intangible assets
Software Customer Intellectual Goodwill Total
development relationships Property
GBP GBP GBP GBP GBP
Cost
At 31 May 2020 1,881,105 100,000 187,335 271,415 2,439,855
Additions 1,419,472 - - - 1,419,472
Re-class (30,904) - 30,904 - -
--------------------- ------------- --------------- ------------- --------- -----------
At 31 May 2021 3,269,673 100,000 218,239 271,415 3,859,327
Additions 1,135,400 - 13,846 - 1,149,246
Disposal of fully
amortised assets - - (34,233) - (34,233)
--------------------- ------------- --------------- ------------- --------- -----------
At 31 May 2022 4,405,073 100,000 197,852 271,415 4,974,340
--------------------- ------------- --------------- ------------- --------- -----------
Amortisation
At 31 May 2020 645,516 100,000 126,140 271,415 1,143,071
Amortisation charge
for year - - 34,615 - 34,615
--------------------- ------------- --------------- ------------- --------- -----------
At 31 May 2021 645,516 100,000 160,755 271,415 1,177,686
--------------------- ------------- --------------- ------------- --------- -----------
Amortisation charge
for year 525,213 - 16,863 - 542,076
Disposal of fully
amortised assets - (34,233) (34,233)
--------------------- ------------- --------------- ------------- --------- -----------
At 31 May 2022 1,170,729 100,000 143,385 271,415 1,685,529
--------------------- ------------- --------------- ------------- --------- -----------
Net Book Value
At 31 May 2022 3,234,344 - 54,467 - 3,288,811
--------------------- ------------- --------------- ------------- --------- -----------
At 31 May 2021 2,624,157 - 57,484 - 2,681,641
--------------------- ------------- --------------- ------------- --------- -----------
15. Trade and other receivables
Group Company
2022 2021 2022 2021
-------- -------- ------- -------
GBP GBP GBP GBP
---------------------------- -------- -------- ------- -------
Amounts falling due within
one year
Trade receivables 225,700 26,946 - -
Other receivables 12,866 65,263 12,778 65,209
Prepayments 69,727 45,833 36,985 34,697
308,293 138,042 49,763 99,906
---------------------------- -------- -------- ------- -------
16. Trade and other payables
Group Company
2022 2021 2022 2021
-------- -------- ------- -------
GBP GBP GBP GBP
--------------------------------- -------- -------- ------- -------
Amounts falling due within
one year
Trade payables 167,240 197,340 17,681 491
Other payables 15,262 39,575 - -
Other taxes and social security 65,815 22,645 15,797 13,701
Accruals 142,135 174,151 40,522 51,317
Contract liabilities 203,674 115,125 - -
--------------------------------- -------- -------- ------- -------
594,126 548,836 74,000 65,509
--------------------------------- -------- -------- ------- -------
Amounts falling due after
one year
--------------------------------- -------- -------- ------- -------
Contract liabilities - 3,993 - -
--------------------------------- -------- -------- ------- -------
Neither the Group or the Company have any borrowings and so
there are no changes in liabilities arising from financing
activities.
17. Financial instruments
The Group's overall risk management programme seeks to minimise
potential adverse effects on the Group's financial performance.
The Group's financial instruments comprise cash and cash
equivalents and various items such as trade payables and
receivables that arise directly from its operations. The Group is
exposed through its operations to the following financial
risks:
-- Credit risk
-- Foreign currency risk
-- Liquidity risk
-- Cash flow interest rate risk
-- Reliance on one major customer
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 or liabilities
-- Level 2: other techniques for which all inputs that have a
significant effect on the recorded fair value are observable,
either directly or indirectly
-- Level 3: techniques that use inputs that have a significant
effect on the recorded fair value that are not based on observable
market data
The share options and warrants issued by the group during the
current year and prior years were valued under level three above as
noted in note 18 below.
In common with all other businesses, the Group is exposed to
risks that arise from its use of financial instruments. This note
describes the Group's objectives, policies and processes for
managing those risks. Further quantitative information in respect
of these risks is presented throughout these financial
statements.
There have been no substantive changes in the Group's exposure
to financial instrument risks and consequently the objectives,
policies and processes are unchanged from the previous period.
The Board has overall responsibility for the determination of
the Group's risk management policies. The objective of the Board is
to set policies that seek to reduce the risk as far as possible
without unduly affecting the Group's competitiveness and
effectiveness. Further details of these policies are set out
below:
Credit risk
The Group is exposed to credit risk primarily on its trade
receivables, which are spread over a range of countries, a factor
that helps to dilute the concentration of the risk. Group policy,
implemented locally, is to assess the credit risk of each new
customer before entering into binding contracts. Each customer
account is then reviewed on an ongoing basis (at least once a year)
based on available information and payment history.
The Group applies the IFRS 9 simplified approach to measuring
expected credit losses which uses a lifetime expected credit loss
allowance for all trade receivables. The provision for credit
losses on trade receivables is based on an expected credit loss
model that calculates the expected loss applicable to the
receivable balance over its lifetime.
Expected credit losses are calculated in accordance with the
simplified approach permitted by IFRS 9, using a provision matrix
applying lifetime historical credit loss experience to the trade
receivables.
The Group holds no collateral. It has a minimal risk policy with
funds held following fund raises so it holds the cash with
mainstream UK banks. The Group's customers were primarily the NHS
in 2022, for which the risk of default has been assessed to be
immaterial.
The carrying amount of financial assets represents the maximum
credit exposure. The maximum exposure to credit risk at the
reporting date is:
Financial assets held at
amortised cost
Group Company
2022 2021 2022 2021
-------------- --------------- ------------- ------------
GBP GBP GBP GBP
--------------------------------- -------------- --------------- ------------- ------------
Trade and other receivables 308,293 138,042 49,763 99,906
Loans to subsidiary companies - - 4,933,648 2,998,240
Cash and cash equivalents 10,305,577 2,220,862 10,143,762 2,020,688
--------------------------------- -------------- --------------- ------------- ------------
10,613,870 2,358,904 15,127,173 5,118,834
--------------------------------- -------------- --------------- ------------- ------------
Analysis of trade receivables
30 days 60 days 90 days
Total Current past due past due past due
GBP GBP GBP GBP GBP
--------------------- ---------- ---------- ------------ -------------- ---------------
Group
2022 225,700 102,377 - 123,323 -
2021 26,946 - 26,946 - -
Company
2021 - - - - -
2020 - - - - -
Foreign currency risk
Foreign exchange transaction risk arises when the Group enters
into transactions denominated in a currency other than the
functional currency.
Foreign currency amounts generated from trading are converted
back to sterling and required foreign currency amounts for
suppliers will be converted from sterling and the use of forward
currency contracts is considered. However, the Group does not
currently use any forward contracts.
The Group's main foreign currency risk is the short-term risk
associated with accounts receivable and payable denominated in
currencies that are not the subsidiaries' functional currency. The
risk arises on the difference in the exchange rate between the time
invoices were raised/received and the time invoices were
settled/paid.
An additional allowance of GBP1,500 has been recognised during
the year (2021: nil), due to exchange rate movements.
The following table shows the net assets, stated in pounds
sterling, exposed to exchange rate risk that the Group and Company
had at 31 May 2022.
Group Company
2022 2021 2022 2021
GBP GBP GBP GBP
-------------------- --------- -------- ----- -----
Trade Receivables 102,377 26,946 - -
As at 31 May 2022 GBP102,377 of Feedback Medical's net trade
receivables are denominated in foreign currency. A 5% increase/fall
in exchange rates would lead to a profit/loss of GBP4,875. The
foreign currencies are US dollars. The Directors do not generally
consider it necessary to enter into derivative financial
instruments to manage the exchange risk arising from its
operations, but from time to time where the Directors consider
foreign currencies are weak and it is known that there would be a
requirement to purchase those currencies, forward arrangements may
be entered into. There were no outstanding forward currency
arrangements as at 31 May 2022 or at 31 May 2021.
Liquidity risk
Cash flow forecasting is performed for both the Group and in the
operating entities of the Group. Rolling forecasts of the Group's
liquidity requirements are monitored to ensure it has sufficient
cash to meet operational needs.
Financial liabilities measured Group Company
at amortised cost
------------------ --------------
2022 2021 2022 2021
-------------------------------- -------- -------- ------- -----
GBP GBP
Trade and other payables 182,502 236,915 17,681 491
---------------------------------- -------- -------- ------- -----
The following are maturities of financial liabilities, including
estimated contracted interest payments.
Carrying amount Contractual 6 months
GBP cash flow or less
GBP GBP
Group
2022 182,502 182,502 182,502
2021 236,915 236,915 236,915
Company
2022 17,681 17,681 17,681
2021 491 491 491
--------- ---------------- ------------ ---------
Cash flow interest rate risk
The Group presently has no substantial interest rate risk
exposure.
Capital under management
The Group considers its capital to comprise its ordinary share
capital, share premium, capital reserve, and accumulated retained
earnings.
The Group's objectives when managing the capital are:
-- To safeguard the Group's ability to remain a going concern.
-- To maximise returns for shareholders in order to meet capital
requirements and appropriately adjust the capital structure, the
Group may issue new shares, dispose of assets to pay down debt,
return capital to shareholders and vary dividend payments.
There have been no changes to the group's capital management
objectives in the year, and there have been no changes to the
group's exposure to financial instrument risk in the year.
18. Share capital and reserves
Allotted, called up and
fully paid ordinary shares
of 0.25 pence each:
Number Number
----------------------------------- -------------- --------------
As at start of period (01 June) 1,066,931,686 539,949,917
Issued during year 1,599,999,991 526,981,769
----------------------------------- -------------- --------------
As at end of period (31 May) 2,666,931,677 1,066,931,686
----------------------------------- -------------- --------------
Share Options
Share options are granted to directors and employees. Options
are conditional on the employee completing a specific length of
service (the vesting period). The options are exercisable from the
end of the vesting period
and lapse after ten years after the grant date. The Group has no
legal or constructive obligation to repurchase or settle the
options in cash.
During the year, the Company had the following share options in
issue:
Grant No. Granted Lapsed No. options Exercise Exercisable period
Date options in year in year as at price
as at 31 May (pence)
31 May 2022
2021
------------- ----------- ------------ ---------- ------------ --------- -------------------
21 May 21 May 15 - 19
14 (1) 2,400,000 - - 2,400,000 1.25 May 24
21 May 21 May 15 - 19
14 (1) 4,000,000 - - 4,000,000 3.00 May 24
21 May 21 May 15 - 19
14 (1) 4,000,000 - - 4,000,000 5.00 May 24
26 June 26 June 18 - 26
18 (2) 2,500,000 - 2,500,000 - 1.86 June 28
26 June 01 March 19 - 26
18 (3) 5,600,000 - - 5,600,000 1.86 June 28
09 April 09 April 19 - 09
19 (2) 9,332,081 - - 9,332,081 1.09 April 29
23 April 01 June 20 - 24
20 (4) 17,500,000 - 1,000,000 16,500,000 1.20 April 30
06 August 06 August 20 -
20 (5) 13,498,748 - - 13,498,748 1.20 06 August 30
23 February 31 May 22 - 31
22 (6) - 145,237,200 - 145,237,200 0.70 May 30
23 February 23 February 23
22 (7) - 16,772,640 - 16,772,640 0.70 - 23 February 32
58,830,829 162,009,840 3,500,000 217,340,669
------------- ----------- ------------ ---------- ------------ --------- -------------------
1. Options vest in full on the anniversary of the date of grant
2. Options vest immediately upon date of grant.
3. Options vest in full on 01 March 19.
4. Options vest over three years as to one-third on 01 June 20,
one-third on 01 June 21, and one-third on 01 June 22
5. Options vest over three years as to one-third on 06 August
20, one-third on 06 August 21, and one-third on 06 August 22
6. Options vest based on share price performance conditions as
to one- third when the 60 day weighted average share price reaches
1.2p at any time during the period from 31 May 2022 to 31 May 2025,
one- third when the 60 day weighted average share price reaches
1.86p at any time during the period from 31 May 2023 to 31 May
2025, and one- third when the 60 day weighted average share price
reaches 3.00p at any time during the period from 31 May 2024 to 31
May 2025
7. Options vest over three years as to one-third on the first
anniversary of the date of grant, one-third on the second
anniversary of the date of grant, and one-third on the third
anniversary of the date of grant
For the options granted on 6 August 2020 with no performance
conditions, the following assumptions were made for valuation
purposes using the Black-Scholes option pricing model:
-- Risk-free rate: 0.21% based on the ten-year UK gilt
-- Expected volatility: 48.22% based on annualised daily historical volatility
-- Option period: Ten years
-- Estimated fair value of each option at measurement date: GBP0.01
For the options granted on 23 February 2022 with no performance
conditions, the following assumptions were made for valuation
purposes using the Black-Scholes option pricing model:
-- Risk-free rate: 1.31% based on the five-year UK gilt
-- Expected volatility: 50% based on Medical Services sector as
published in the Risk Measurement Service, London Business School
manual, Vol 44 No 1 January - March 2022
-- Expected life: Four years
-- Estimated fair value of each option at measurement date: GBP0.0027
For the options granted on 23 February 2022 with share price
performance conditions, the following assumptions were made for
valuation purposes using the Monte Carlo option Pricing Model:
-- Risk-free rate: 1.31% based on the five-year UK gilt
-- Expected volatility: 50% based on Medical Services sector as
published in the Risk Measurement Service, London Business School
manual, Vol 44 No 1 January - March 2022
-- Expected life: Five years
-- Estimated fair value of each option at measurement date: GBP0.0014
The following table illustrates the number and weighted average
exercise prices of, and movements in, share options during the
year:
Number Weighted average
exercise price
------------------------- -------------------
2022 2021 2022 2021
------------ ----------- --------- --------
Pence Pence
------------------------ ------------ ----------- --------- --------
Outstanding at 01 June 58,830,829 46,832,081 1.66 1.77
Granted in year 162,009,840 13,498,748 0.70 1.20
Lapsed in year 3,500,000 1,500,000 1.67 1.20
------------------------ ------------ ----------- --------- --------
Outstanding at 31 May 217,340,669 58,830,829 0.94 1.66
------------------------ ------------ ----------- --------- --------
Warrants
Warrants were issued to the vendors of TexRAD Limited at the
time of acquisition. The warrants are exercisable from the end of
the vesting period and lapse ten years after the grant date. The
Group has no legal or constructive obligation to repurchase or
settle the warrants in cash.
Number of warrants
At 31 May Granted Exercised At 31 Exercise Exercisable
2021 May 2022 price period
(pence)
----------- -------- ---------- ----------- ---------------- ------------
19/05/16 to
4,200,000 - - 4,200,000 1.25 19/05/24
19/05/17 to
18,200,000 - - 18,200,000 3.00 19/05/24
---------------- ------------
22,400,000 - - 22,400,000
----------- -------- ---------- ----------- ---------------- ------------
Reserves
The nature and purpose of each reserve within equity is as
follows:
Share premium
* Amount subscribed for share capital in excess of
nominal value
Capital reserve * Reserve on consolidation of subsidiaries
Translation reserve
* Gains and losses on the translation of overseas
operations into GBP
Retained earnings
* All other net gains and losses and transactions with
owners not recognised elsewhere
Share Option Reserve * Fair value of share options issued
19. Pensions
The Company operated a defined contribution scheme during the
year and the assets of the scheme are held separately from those of
the Group in an independently administered fund. The pension cost
represents contributions payable and amounted to GBP144,308 (2021:
GBP108,796). A balance of GBP13,084 (2021: GBP9,660) was payable at
the year end.
20. Related party transactions
Key management personnel
Refer to note 8 for detail on directors' remuneration.
Management fee from Company to subsidiaries
Feedback Plc invoiced Feedback Medical Limited GBP340,694 for
the management fee related to 2022 (2021: GBP351,517). Feedback Plc
invoiced Texrad Limited GBP34,192 for the management fee related to
2022 (2021: GBP43,925).
The Directors interests in shares of the Company are contained
in the Directors' Report
21. Post balance sheet events
On 05 September 2022, post period, the Group was awarded a
GBP0.45m contract with Sussex ICS / QVH to facilitate an extension
of the current CDC pilot in Sussex to further GP practices and to
enable the adoption of further clinical pathways. The contract
covers the period from 31 March 2022 when the original pilot MOU
formally ended. The contract will run until 31st March 2023.
22. Ultimate controlling party
There is no ultimate controlling party.
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END
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