REG - Feedback PLC - Final Results
20/09/2022 07:00
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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 £0.59m (2021: £0.29m)
· Highest ever reported revenue since becoming a medical imaging
company in 2014
· 280% increase in sales((1)) to £0.67m (2021: £0.18m), with
Bleepa contributing £0.26m (2021: £0.08m)
· Operating loss increased to £2.51m (2021: £2.06m), reflecting
investment in the development and roll out of Bleepa
· Oversubscribed placing and open offer raising £11.20m - to
support accelerated revenue growth and product development
· Cash at 31 May 2022 was £10.31m (31 May 2021: £2.22m)
Operational Highlights
· Two Bleepa contract wins with NHS trusts worth an aggregate value
of £0.20m
· 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 £0.45m 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 (mailto: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
(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/
(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 (mailto:IR@fbk.com)
Anesh Patel, CFO
Panmure Gordon (UK) Limited (NOMAD and Broker) +44 (0)20 7886 2500
Emma Earl/Freddy Crossley (Corporate Finance)
Rupert Dearden (Corporate Broking)
Walbrook PR Ltd Tel: 020 7933 8780 or feedbackplc@walbrookpr.com
(mailto: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 £90m, 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 ~£2billion 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 £11.2m
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 £10.3m. 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 £590k, above the previous peak in 2019 of £563k 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 £0.45m 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 £11.2m 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 £10.3m 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
£0.14m (2021: £0.01m) 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™
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 £0.14m (2021: £0.01m) 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® & 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 £m £m
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 £0.59m (2021:
£0.29m). 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 £0.67m (2021: £0.18m), of which
Bleepa contributed £0.26m (2021: £0.08m) and Image Engineering license fees
contributed £0.14m (2021: £0.01m). 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 £0.20m (2021: £0.12m).
Operating expenses increased 29% to £3.00m (2021: £2.32m), primarily due to
headcount expansion, commencement of amortisation of Bleepa software
development costs, and cost inflation. Operating loss increased to £2.51m
(2021: £2.06m). EBITDA loss, excluding depreciation and amortisation charges
of £0.55m (2021: £0.05m), improved 3% to £1.96m (2021: £2.01m). Adjusted
EBITDA loss, excluding share-based payment charges of £0.07m (2021: £0.16m),
remained relatively flat at £1.89m (2021: £1.85m).
Cash outflows from operating activities decreased 38% to £1.25m (2021:
£2.03m) 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 £0.77m (2021: nil). Cash outflows from
investing activities, primarily being software development expenditures with
Future Processing, decreased 20% to £1.15m (2021: £1.44m) 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
£10.31m (31 May 2021: £2.22m), an increase of £8.08m over the prior year
following net proceeds of £10.49m from the November 2021 fundraise.
Intangible assets increased by £0.61m to £3.29m (2021: £2.68m), primarily
representing the capitalised software development expenditures of £1.15m,
offset by amortisation charges of £0.54m (2021: £0.03m). Net assets
increased to £13.71m (2021: £5.27m) 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 £0.45m 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
£ £
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 Capital Share Premium Capital Reserve Retained Earnings Translation Reserve Share option Reserve Total
£ £ £ £ £ £ £
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 Premium Retained Earnings Share option Reserve Total
£ £ £ £ £
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 £ £
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
£ £
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 YEAR ENDED 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 £2,118,592 for the year ended 31 May 2022
however it had net assets of £13,709,274 inclusive of £10,305,577 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 Imaging Head Office Total
£ £ £
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 Imaging Head Office Total
£ £ £
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 by Non-current assets by Total liabilities
location of customer location of assets location of assets
2022 2021 2022 2021 2022 2021
£ £ £ £ £ £
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
£115,000 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 £232,000 (2021:
£153,000) 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 £142,164 of group
revenue generated.
5. Other operating expenses
2022 2021
£ £
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
£ £
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
£ £
Interest received 2,012 281
2,012 281
8. Directors and employees
2022 2021 2022 2021
Average Average Year-end FTE Year-end 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
£ £
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
£ £
(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 £1,609,875 (2021: £928,928) 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 £789,816 (2021: £838,906) 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 £559,408
(2021 loss: £437,373)
11. Loss per share
Basic loss per share is calculated by reference to the loss on ordinary
activities after taxation of £2,118,591 (2021: £1,619,513) and on the
weighted average of 1,869,123,462 (2021: 1,023,499,123) shares in issue.
2022 2021
£ £
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 in Group undertakings Shares in joint venture Total
Company £ £ £
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 and operation Proportion of Shares held
Feedback Black Box Company Limited Dormant England 100%
Ordinary £1
Bleepa Limited Dormant England 100%
Ordinary £2
Feedback Medical Limited Medical Imaging England 100%
A Ordinary £1
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 £ £
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 relationships Intellectual Property Goodwill Total
development
£ £ £ £ £
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
£ £ £ £
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
£ £ £ £
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
£ £ £ £
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 past due 60 days past due 90 days past due
Total Current
£ £ £ £ £
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 £1,500 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
£ £ £ £
Trade Receivables 102,377 26,946 - -
As at 31 May 2022 £102,377 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 £4,875. 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 at amortised cost Group Company
2022 2021 2022 2021
£ £
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 cash flow 6 months or less
£ £ £
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 Date No. options as at 31 May 2021 Granted in year Lapsed in year No. options as at 31 May 2022 Exercise price (pence) Exercisable period
21 May 14((1)) 2,400,000 - - 2,400,000 1.25 21 May 15 - 19 May 24
21 May 14((1)) 4,000,000 - - 4,000,000 3.00 21 May 15 - 19 May 24
21 May 14((1)) 4,000,000 - - 4,000,000 5.00 21 May 15 - 19 May 24
26 June 18((2)) 2,500,000 - 2,500,000 - 1.86 26 June 18 - 26 June 28
26 June 18((3)) 5,600,000 - - 5,600,000 1.86 01 March 19 - 26 June 28
09 April 19((2)) 9,332,081 - - 9,332,081 1.09 09 April 19 - 09 April 29
23 April 20((4)) 17,500,000 - 1,000,000 16,500,000 1.20 01 June 20 - 24 April 30
06 August 20((5)) 13,498,748 - - 13,498,748 1.20 06 August 20 - 06 August 30
23 February 22((6)) - 145,237,200 - 145,237,200 0.70 31 May 22 - 31 May 30
23 February 22((7)) - 16,772,640 - 16,772,640 0.70 23 February 23 - 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: £0.01
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: £0.0027
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: £0.0014
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 2021 Granted Exercised At 31 May 2022 Exercise price (pence) Exercisable period
4,200,000 - - 4,200,000 1.25 19/05/16 to 19/05/24
18,200,000 - - 18,200,000 3.00 19/05/17 to 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 £144,308 (2021: £108,796). A balance of £13,084
(2021: £9,660) 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 £340,694 for the management
fee related to 2022 (2021: £351,517). Feedback Plc invoiced Texrad Limited
£34,192 for the management fee related to 2022 (2021: £43,925).
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 £0.45m 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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