TIDMFDBK
RNS Number : 0818M
Feedback PLC
12 September 2023
Feedback plc
Full Year Results to 31 May 2023
Feedback plc (AIM: FDBK, "Feedback" or the "Company"), the
clinical infrastructure specialists, announces its audited results
for the twelve months to 31 May 2023 (the "Period").
Operational Highlights
-- Continued to focus on growth of high margin opportunities
-- Sussex Integrated Care System ("ICS") Community Diagnostic
Centre ("CDC") pilot contract extension - providing increased
revenue visibility
-- Demonstrated an approximate 69% reduction in patient wait
times compared to national targets
-- Named as a supplier on G-Cloud 13, the UK Government's digital marketplace
-- Bleepa 1.5 upgrade completed
-- NHS Trust customers NCA and RBH both renewed Bleepa subscriptions for a further 3-year term
-- Continued progress in India and establishment of Indian subsidiary
-- Completion of 200:1 share consolidation
Financial Highlights
-- 74% increase in revenue to GBP1.02m (FY22: GBP0.59m), of
which Bleepa-CareLocker contributed 74%
-- 89% increase in sales(1) to GBP1.27m (FY22: GBP0.67m)
-- Operating loss increased to GBP3.42 (FY22: GBP2.51m),
reflecting expansion and improvements to the technology
-- Cash as at 31 May 2023 was GBP7.32m (31 May 2022: GBP10.31m)
Post period Highlights
-- Numerous discussions underway both with local, regional and
national NHS organisations, and strategic partners
-- Successfully granted an import license for Bleepa as a registered medical device in India
-- Appointment of India in-country Managing Director to drive the opportunity for Bleepa
Analyst Presentation: 14.00, Tuesday 12 September
A remote briefing for analysts will be held at 14.00 today.
Analysts interested in attending should contact Walbrook PR on
feedbackplc@walbrookpr.com or 020 7933 8780.
Investor Presentation: 16:00, Tuesday 12 September
Management will be providing a presentation and hosting an
investor Q&A session on the Company's results and future
prospects at 16:00 today. Investors can sign up for free and
register to meet FDBK via the following link:
https://www.investormeetcompany.com/feedback-plc/register-investor
Questions can be submitted pre event and at any time during the
live presentation via the Investor Meet Company Platform.
Dr Tom Oakley, CEO of Feedback, said: " We are delighted with
the continued progress made during the period - with the shift from
legacy products. The opportunity afforded by Bleepa and CareLocker
both domestically and overseas provides us with tremendous optimism
as we focus on generating new contracts from our ongoing dialogues
with interested parties, which we believe will further enhance
levels of recurring revenue visibility. The additional paid for
Sussex CDC extension (announced in April) further validates our
strategy and we remain hopeful that we will be successful in the
procurement process. With CDCs continuing to explore avenues to
reduce waiting times we believe that our performance to date
provides compelling testament to our capabilities - with early
results from our current CDC programme highlighting an approximate
69% reduction in diagnostics wait times versus the national
target.
"Furthermore, we are extremely excited by global opportunities -
with inroads in India highlighting the scalability of our
solutions. Importantly, we believe that increased regulatory
demands both in the UK and India will further underpin demand.
There is increasing focus on technologies to secure the transfer
and display of images and videos, and we believe that the landscape
is very much moving in our favour - with digital infrastructure and
digitally enabled tools seen as key solutions to significant
administrative burdens. This is especially prevalent when
considering winter pressures and the growing requirement to reduce
care backlogs - and we believe that given our pipeline and
capabilities that we will be at the forefront of change in the
coming year."
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).
Enquiries:
Feedback plc +44 (0) 20 3997 7634
Tom Oakley, CEO IR@fbk.com
Anesh Patel, CFO
Panmure Gordon (UK) Limited
(NOMAD and Broker)
Emma Earl/Freddy Crossley (Corporate
Finance)
Rupert Dearden (Corporate Broking) +44 (0)20 7886 2500
Walbrook PR Ltd; Tel: 020 7933 8780 or feedbackplc@walbrookpr.com
Nick Rome/Joe Walker 07748 325 236 or 07407 020 470
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 model is
expected to provide increasing levels of revenue visibility as the
Company grows its customer base.
Chairman's Statement
Laying the foundations for growth
The financial year ending 31(st) May 2023 has been a positive
period for Feedback marked by strong trading despite challenging
market conditions and challenging NHS procurement, o ngoing
inflationary pressures and frequent strikes in the public sector.
Despite the pervasive challenges, Feedback has carefully navigated
a fluid political and economic backdrop to report strong revenue
growth of 74% driven by an 89% increase in sales. Growth has been
driven by both emerging opportunities for our products in spaces
such as the NHS CDC initiative, with the award of a pilot extension
contract by Queen Victoria Hospital in Sussex, and, importantly,
through existing customer renewals which highlights the ongoing
value that our customers derive from our products and is a
validation of the high customer lifetime value potential.
Encouragingly, our first two Bleepa customers, the Northern Care
Alliance (NCA) and Royal Berkshire Hospital NHS Foundation Trust
(RBH), have both renewed Bleepa subscriptions with annual
inflationary price uplifts over a 3-year term. This was the first
year that the Company saw revenues in excess of GBP1m - a great
base to build from.
Although still early in our commercial journey there is clear
growth potential represented by a renewing customer base and a
healthy pipeline of CDC and international opportunities. Therefore,
we can justifiably state that the strategy to move away from legacy
products with non-recurring revenue and towards Bleepa and SaaS is
bearing fruit. We are delighted to see a repledged commitment from
the NHS to roll out the CDC programme, with renewed funding
commitment and multiple business cases being approved for CDC
implementation, building a market for the breadth of our product
library . The team has stayed very close to this programme, and our
CEO has presented on the benefits of Bleepa as a platform enabler
of the CDC programme and as the 'third pillar' of the build
alongside investment in bricks and mortar and staff, to the APPG
for Diagnostics. This has provoked several conversations with both
the national NHS team and with multiple regions who are looking to
implement CDCs. We retain the view that the UK CDC opportunity
represents a TAM of approximately GBP96m/year and is an opportunity
for which we are uniquely positioned to deliver, given our breadth
of functionality and medical device certification.
In India we have been focusing on both rural and city-based
opportunities. Due to the nature of the healthcare system and
diverse geography we believe that our products offer compelling
solutions. Given the strength of our technology base, we believe
that the primary opportunity for India now lies with Bleepa in a
clinical/hospital setting, and the remote image acquisition
solution. Therefore, post period-end, although there may be a
direct opportunity for CareLocker as a patient-facing component of
the Bleepa platform when sold to large hospital chains or in
facilitating remote screening services, we paused marketing spend
on CareLocker as a standalone product for imaging centre patients,
enabling the Company to focus on achieving regulatory approval for
Bleepa in order to service the growing pipeline. The Board's
opinion is that India remains a significant opportunity, so we have
furthered our investment in India with the appointment of Rohit
Singh as in-country Managing Director who has already identified
several additional potential market opportunities for Bleepa with
various government organisations, including the Ministry of
Defence, and large hospital chains. In addition, p ost-period, we
successfully obtained an import license for Bleepa as a non-sterile
non-invasive medical device, with the Central Drugs Standard
Control Organisation (CDSCO).
During the period the Company embarked on several internal
initiatives including a 200:1 share consolidation with a view to
positively impacting the liquidity and trading activity in the
Company's shares and improving its marketability to a wider
investor group. In addition, the Board constructed and implemented
an ESG programme in collaboration with the management team and in
alignment with QCA best practice. Each member of the management
team has direct oversight and accountability of an ESG initiative
within their area of the business and will be reporting back to the
board on a quarterly basis around progress. Examples include
adoption of green code and server rationalisation within the
technical team, consolidation and re-use of marketing materials
such as brochures and conference stands by the marketing team (and
recycling of materials wherever possible), optimisation of internal
systems, and monitoring device energy use by the support team. Most
of these ESG initiatives should also yield a cost saving alongside
an environmental impact. ESG has become an area of significant
importance for UK companies and is increasingly becoming a
requirement in public sector contract tenders.
As such, our increasing ESG efforts will also help in our sales
efforts to organisations such as the NHS. Our CEO, Dr Tom Oakley
was invited to become a mentor on the NHS England Clinical
Entrepreneur Programme, taking on two mentees for the year, a
commitment that sees him deliver an hour of mentoring per mentee
each month and which further cements our Company as partner to the
NHS, together building a better future for patients and
clinicians.
The Board believes that we have great opportunities ahead of us
and recognises the need to build on the customer base that we have
established. The NHS has been through a challenging phase
post-Covid, with a growing backlog of patients and industrial
unrest among the different staff groups. Inevitably,
decision-making processes have become protracted. We continue to
believe that the functionality of Bleepa and CareLocker will be key
to the much-needed service improvement and productivity gains
required to stabilise the service. Our team has done exceptionally
well to navigate through these difficult trading times and to
continue to stimulate the NHS opportunity. The Board is optimistic
about the near-term potential. Our products are truly unique in the
market and over the last year, we have generated compelling
evidence to demonstrate this via our partnership with our NHS
customers. We believe we are now well positioned to help a number
of NHS programmes. We will ensure delivery of key system priorities
for the NHS and benefit from the funding as it becomes available.
Bleepa is the key that unlocks the NHS digital strategy, and we
intend to further monetise opportunities in the coming year.
Rory Shaw
Non-executive Chairman
11 September 2023
CEO's Statement
Taking our proposition beyond the hospital walls of the NHS
We are delighted by the continued progress in 2023. In addition
to driving new lines of business and pursuing cross-provider care
opportunities we prioritised the renewal of existing customer
contracts. A core component of any SaaS model is understanding and
extending the lifetime value of the customer through the delivery
of high-quality products and services. Our NHS customers have
renewed with us this year because of the value they see in and from
Bleepa. For example, Bleepa has now delivered over 11,700 referrals
at the Northern Care Alliance (NCA) and over 1,000 users across
three hospitals and has become an essential tool to daily clinical
practice. Our recent independent clinical evaluation at the NCA
demonstrates the benefits of using Bleepa in time and efficiency
savings as well as improvements in communication around patient
care.
We have fought hard to be proactive and not complacent - we will
not ignore customer sites when they reach a steady state; we worked
so hard to win them that we believe we must work equally hard to
keep them. Providing ongoing value to clinicians and their patients
is at the core of what we do and many of the innovations that we
identify through customer engagement help us to develop features
that unlock new business opportunities such as the CDC
programme.
The technical landscape is also always shifting, with customers
adopting new digital strategies and bringing on new digital systems
that require us to continuously ensure that Bleepa retains a clear
value and performance proposition . This approach has seen both RBH
and the NCA renew their Bleepa subscriptions with annual
inflationary price uplifts over a three-year term. These renewals
were made possible by our participation in the G-Cloud 13
procurement framework, a key goal of the prior year and a core part
of our strategy to diversify our routes to market in the NHS.
2023 has been a pivotal year for the Company. We started the
year with the ambition to develop the Bleepa proposition to one
that could deliver services not just within hospitals but between
care settings and that would let us pursue much larger regional
contracts for an emerging market of CDC customers. I am pleased to
say that we delivered this. For the last year Bleepa-CareLocker has
been facilitating the UK's first symptom-based care pathway,
connecting primary care and secondary care providers. Together with
our partner Queen Victoria Hospital (QVH) we have pioneered a new
approach to cross-provider care delivery and laid a digital
foundation that can transform the model of care pathways, bringing
diagnostic testing upfront, earlier in a pathway, reducing the
requirement for outpatient appointments and for traditional models
of multidisciplinary care delivery (in-person meetings and video
calling).
This approach has enabled us to demonstrate a 69% reduction in
patient wait times compared to the national 18-week referral to
treatment target (RTT), without requiring additional clinical staff
and whilst achieving potential cost savings for our NHS customers
in relation to the outpatient and MDT reduction delivered.
Following our GBP450k pilot contract for the Sussex ICS with
QVH, we were awarded a nine-month, fixed-term contract extension
for the Bleepa-CareLocker CDC solution. This paid extension follows
the success of the Company's previous contract and was awarded
because of the abandonment of QVH/Sussex ICS's previous procurement
process in March 2023. Feedback is now covering the period of
re-procurement whilst QVH/Sussex ICS undertakes a new tender
exercise under the Public Contracts Regulations 2015. The new
tender process for the next phase of the CDC programme rollout is
due to commence imminently and the Board is confident that our
product offering is unique and unmatched by other UK suppliers.
Our work at QVH/Sussex ICS has become a national flagship and a
model system of how CDCs can deliver impact nationwide. Post
period, I had the privilege of presenting this work to the APPG for
Diagnostics, where I made the case for Bleepa as the third pillar
of building a CDC, alongside investment in bricks and mortar and
staffing. The reality is that the NHS urgently needs the extra
capacity that the CDC programme can deliver but we believe the only
way that this can be brought online ahead of winter pressures is
digitally through Bleepa. The APPG has given us a national platform
from which we have engaged directly with the national CDC
leadership at NHS England (NHSE) and a number of ICS regional
leaders who are looking to deploy CDC pathways. Until Q2 of CY2023
many ICSs have not had digital leadership in place, which has
limited procurement decisions and slowed the rollout of technology
such as ours, a situation that has further been compounded by the
inflationary and budgetary pressures created by the turmoil of last
year. However, most ICSs have now reached a point of operational
maturity and some have appointed digital leaders within their
organisation. This, in combination with repledged funding
commitment from NHSE for the CDC programme and the usual concerns
around winter pressures, has put the CDC programme back at the top
of the NHS priority ladder. With the evidence that we have
generated at QVH/Sussex and a customer that we can now sell to, we
are in a strong position to capitalise on the opportunity ahead of
us in the coming year.
The work around pathways and connecting across care settings is
not unique to the NHS. It is equally applicable to the private
sector and internationally in systems that are looking to redesign
patient flow to reduce wait times and maximise value for money.
With this prospect in mind, we are currently exploring
opportunities for the utilization of the Bleepa pathway tool within
the UK private and insurance sector and internationally.
Internationally we have been focused on exploring the
opportunity for our products in India, following two successful
trade missions to India in prior periods with the UK Department of
International Trade (now Department for Business and Trade (DBT)),
hosted by Lord Prior, then Chairman of NHS England. Early on we
partnered with the UK India Business Council (UKIBC) who DBT
introduced us to as an intermediary who help facilitate market
entry into India by UK companies. We finalised the setup of an
Indian subsidiary in Q4 and commenced the process of registering
Bleepa as a medical device in India, in order to obtain an import
license which would allow us to directly market Bleepa to hospitals
within India for clinical use. Although it may have been a quicker
process to import Bleepa through a third-party wholesaler, this
posed a risk to our IP due to the requirement to share our
technical file information and therefore, given that the Company
views India as a long-term opportunity which we need to approach
diligently, it was preferential to use a wholly-owned subsidiary as
a local manufacturer and pursue in-country medical device
registration. Post-period, we successfully received an import
license for Bleepa as a non-sterile non-invasive medical device
with the CDSCO in India, allowing us to develop the pipeline of
opportunity for Bleepa within India.
Whilst awaiting medical device registration, we were able to
continue delivery of the Odisha pilot around remote image
acquisition and AI screening, with Qure.ai and AWS, as this was a
pilot and not a commercial contract with a customer. Given that we
had demonstrated the technical success of the product in this
context we decided not to further expand the pilot programme beyond
the Odisha site until we were able to commercialise the technology,
i.e., post the award of local medical device registration for
Bleepa. This pilot site has enabled us to generate data that
supports the frontline use of Bleepa and which can now be leveraged
to drive commercial opportunities for the platform.
In parallel to gaining regulatory approval for Bleepa, our
strategy in the Indian market has been to assess the prospects for
CareLocker as a standalone consumer offering. Initial discoveries
showed that Indian imaging centres were using costly,
environmentally damaging, and outdated processes to transfer
patient images, presenting a strong opportunity for disruption. We
deployed a CareLocker pilot with an Indore-based imaging centre
network, Sampurna Diagnostics, to develop the commercial models and
deepen our understanding of the Indian healthcare sector and
national initiatives. The Board believes that there is a material
opportunity in rural settings and smaller cities, such as Indore,
to provide a service that provides benefits over the current
system. However, subsequent research suggests that practices in
Mumbai, and likely other large cities, are currently very
different. Since initial scoping visits, a trend has emerged
showing a tendency of PACS vendors to share images with imaging
centres and their patients for free, via WhatsApp, as they
currently derive revenue from other methods such as the sale of
patient data. It is the Board's belief that this would undermine
the CareLocker proposition as a paid-for consumer app whilst there
is a lack of consumer and provider appetite to pursue stricter data
governance regulations. There are indications of a tightening in
the Indian Government's position on this, and the Company remains
well placed to respond flexibly if legislation turns into
regulation with financial penalties, which may stimulate a
reemergence of this large sales opportunity. For now, we will focus
on the opportunity presented by smaller cities and rural areas and
have, post period, paused the marketing of CareLocker to imaging
centre patients as we continue to build a pipeline of Bleepa sales
now that regulatory approval has been granted. Initial market
engagements around Bleepa and the Bleepa remote access pilot in
Odisha, shows there may be a direct opportunity for CareLocker as a
patient-facing component of the Bleepa platform, when sold to large
hospital chains or in facilitating remote screening services.
The Board believes that the primary opportunity for India now
lies firmly with Bleepa as a hospital offering and as a remote
image acquisition solution. The Board still sees significant
opportunity in India, so we have furthered our investment in India
with the appointment of Rohit Singh as in-country Managing
Director. Rohit joined us from the UKIBC, which facilitates the
introduction of UK companies into the Indian market, where he
helped build the India advisory practice - a real validation and
endorsement Feedback's Indian strategy. Rohit has already
identified several additional potential market opportunities for
Bleepa with government organisations, including the Ministry of
Defence, and large hospital chains, that we believe can be unlocked
following Bleepa's medical device registration in India. We remain
excited by the opportunity that this market represents and estimate
a TAM of approximately GBP1 billion.
Business strategy
The Company's strategy is to 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,
for which we estimate the total addressable market as GBP96m, and
remote care settings in India. The Company will, however, 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.
The decision-making process and associated sales cycle is
currently particularly long within the NHS, due to several factors
described above and, as such, the Company is also targeting
parallel market segments for our technology that require minimal
additional product development and where there is a mirror value
proposition that we understand and can sell into, such as India.
More recently this has led us to consider applications in the UK
private sector which we intend to pursue in the next financial
year.
To date, our commercial success has been derived from our
ability to leverage and repurpose our legacy technologies,
resulting in the creation of Bleepa, CareLocker and Bleepa Box . In
addition, we opportunistically seek to license components of our
Cadran technology to third parties, generating recurring royalty
revenue from non-core assets, as demonstrated by the licensing of
Cadran to Imaging Engineering LLC in the USA for fluoroscopy image
capture. The license agreement with Image Engineering yielded
royalty revenue of GBP0.14m (2022: GBP0.14m) in the period, with a
minimum ongoing annual royalty expectation of US$70k per annum
until end CY2025.
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.
Maintaining our lead - regulatory excellence
During the period the Company successfully recertified for a
number of its accreditations including:
-- ISO13485, the standard for quality of our product
manufacturing process (a pre-requisite to medical device
certification);
-- ISO27001, relating to data governance and management;
-- Cyber Essentials Plus, data security and resilience; and
-- DCB0129, clinical risk management.
These standards are an essential component of our product
development and directly affect our ability to sell to the NHS and
international customers. Successfully revalidating against these
standards has also enabled the Company to complete the technical
file for the latest version of Bleepa v1.5, and to affix a UKCA
mark to this product release. Bleepa v1.5 incorporates a number of
advanced features including:
-- the ability to share the patient record to a clinician
outside of the current hospital deployment (where data sharing
permission is present), enabling users to have conversations with
potentially any clinician in the country, for ever-improved care to
the patient, opening the potential for truly regional or national
care delivery;
-- enhanced features for document capture such as document
preview and categorisation, which enable users to contribute to the
patient record with virtually any medical information (referral
letter, ECG trace, blood report, etc.); and
-- improved messaging functionalities such as tagging teams and
individuals and making structured notes to enable users to
communicate even more intuitively, quickly and safely.
Board changes
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
2023 2022
Key performance indicators GBPm GBPm
----------------------------------------- ------- -------
Revenue 1.02 0.59
Gross margin 92% 83%
Sales (non IFRS) 1.27 0.67
Operating expenses (4.36) (3.00)
Operating loss (3.42) (2.51)
EBITDA loss (non IFRS) (2.61) (1.96)
Cash outflows from operating activities (1.79) (1.25)
Cash outflows from investing activities (1.20) (1.15)
Cash & cash equivalents end of period 7.32 10.31
Intangible assets 3.71 3.29
Contract liabilities (deferred income) 0.44 0.20
Net assets 10.87 13.71
----------------------------------------- ------- -------
Revenue for the year ended 31 May 2023 increased 74% to GBP1.02m
(2022: GBP0.59m). The growth reflects the significant increase in
average contract value for Bleepa-CareLocker compared to legacy
products, with Bleepa-CareLocker comprising 74% of revenue. In
addition, revenue for the period was positively impacted by a
one-off item related to the 12-month extension of the QVH/Sussex
ICS pilot, a GBP0.45m contract awarded in September 2022 but
covering the 12-month period from 31 March 2022, resulting in
GBP0.19m of revenue being recognised related to the 5-month period
prior to contract signing.
Gross margin increased to 92% due to the one-off revenue impact
of the 12-month extension of the QVH/Sussex ICS pilot as described
above and due to the prior year being impacted by one-off BleepaBox
hardware costs.
Sales, a non IFRS measure representing the total customer
contract value invoiced in the period, increased 89% to GBP1.27m
(2022: GBP0.67m). Bleepa-CareLocker contributed GBP1.0m (2022:
GBP0.26m) and Image Engineering license fees contributed GBP0.14m
(2022: GBP0.14m), of which 37% is recurring minimum royalties with
the balance related to bespoke software development license fees.
Sales in 2023 include two contract awards with QVH/Sussex ICS which
occurred during the period, being the GBP0.45m pilot in September
2022 and the GBP0.38m pilot extension in March 2023. Sales are
recognised as revenue monthly across the life of a customer
contract (typically 12 months), with any amount not recognised as
revenue in the current financial year remaining on the balance
sheet as contract liabilities (deferred income) and recognised as
revenue in the forthcoming financial year. Contract liabilities (or
deferred income) as at period end was GBP0.44m (2022:
GBP0.20m).
Operating expenses increased 45% to GBP4.36m (2022: GBP3.00m),
primarily due to the full-year effect of headcount expansion,
increasing amortisation of Bleepa software development costs, and
additional discovery and research costs related to NHS system
integrations with Bleepa and cloud architecture optimisation.
Operating loss increased to GBP3.42m (2022: GBP2.51m). EBITDA loss,
excluding depreciation and amortisation charges of GBP0.81m (2022:
GBP0.55m), increased 33% to GBP2.61m (2022: GBP1.96m).
Cash outflows from operating activities increased 43% to
GBP1.79m (2022: GBP1.25m) primarily due to higher operating
expenses offsetting higher sales, and the prior period containing
the benefit of two R&D tax credit refunds totaling GBP0.77m.
Cash outflows from investing activities, primarily being software
development expenditures with Graylight Imaging, increased 4% to
GBP1.20m (2022: GBP1.15m). The Group's cash position as at 31 May
2023 was GBP7.32m (31 May 2022: GBP10.31m), a decrease of GBP2.99m
over the prior year.
Intangible assets increased by GBP0.42m to GBP3.71m (2022:
GBP3.29m), primarily representing capitalised software development
expenditures of GBP1.23m, offset by amortisation and impairment
charges of GBP0.80m (2022: GBP0.54m). Net assets decreased to
GBP10.87m (2022: GBP13.71m) as at 31 May 2023.
Benefitting from the digital revolution
The Company's primary focus is, and will continue to be, on the
NHS and as we pursue opportunities in the emerging CDC space where
we see a growing amount of government investment and substantial
clinical , operational and political need for our technologies. The
results that have been delivered against a disrupted and
unfavorable market climate demonstrate the continued upward
trajectory of the Company as it pursues its strategy of delivering
cutting edge technology to frontline clinicians across healthcare
settings. We aim to increase our annual recurring revenue base
through both existing customer renewals and winning new and larger
customers and will do this by delivering quality products to our
customers and providing close support to ensure that they derive
ongoing and increasing value from them, and by being adaptive to
the wider changing healthcare environment, pursuing new areas of
opportunity and occasionally revisiting previous areas of
opportunity should they resurface. One such area may be the
original Bleepa value proposition as a regulatory compliant
WhatsApp replacement. Bleepa was launched in Q3 CY2020 as a
replacement for the traditional pager and WhatsApp, a value
proposition that led to sales to both NCA and RBH; however,
following a temporary relaxation of data sharing rules during COVID
by NHSx and the collapse of the NHSx Clinical Communication
Framework following a procurement challenge in 2022, the WhatsApp
value proposition declined. Recognising the growing difficulty of
achieving sales against this use case, we pivoted to delivering
cross-provider services for the CDC space.
At the beginning of August 2023, the Information Commissioners
Office (ICO) reprimanded a Trust for its use of WhatsApp and over
500 breaches of patient confidentiality as a result of its use.
This is the first time that the regulator has challenged a Trust
around the use of WhatsApp. The ICO stated that there was 'no
excuse' for the use of WhatsApp within clinical services and that
they expected all NHS providers to take heed of this warning and
take appropriate steps. This is a sign that the regulator is
gearing up to take action on the use of WhatsApp in clinical
settings and we know from the BMJ that this practice remains
widespread with over 98% of clinicians using it routinely for
clinical communication. If this warning is picked up by NHS
providers then it may reopen the original market and value
proposition for Bleepa within an inpatient setting, it is too early
to tell if this will be the case but if the ICO pursues further
action against other sites then this could quickly build momentum
and is an area that we will closely monitor. What is of particular
interest is that the Trust in question stated, as a mitigating
action, that they would be looking at technologies to support the
secure transfer and display of images and videos, which suggests
that the GDPR breach was larger than publicly disclosed in the ICO
warning and implies that there is a wider concern around the
handling of patient data, especially patient images. The Directors
still believe that Bleepa is the only communication platform
available in the UK that is certified for the sharing and display
of clinical images, meaning that if image exchange is expressly
listed within the areas of concern then Bleepa is uniquely
positioned to address this need.
The recent ICO ruling is not the only indication that the
landscape is further aligning to our value proposition. The release
of guidance by NHSE around CDC based pathways in May 2023 and the
subsequent announcements in August 2023 around the role of CDCs in
the government's winter pressure planning and in facilitating GP
Direct Access, shows the role that CDCs and their associated
pathways are set to play in the national agenda. This has been
reinforced by the approval of a number of CDC business cases in the
last few months alone. However, the digital component of CDCs had
been an afterthought until the publication of the Hewitt report
which highlighted t he need to level up basic digital
infrastructure in all parts of the system, not simply within acute
hospitals; the need to support multi-disciplinary working through
digitally-enabled tools that connect primary, community,
intermediate care and acute hospital teams and the need to
implement shared digital records and rostering systems to help
staff work more effectively and to reduce their administrative
burden. These were all points that I built upon when I presented to
the APPG for Diagnostics in July 2023 and made the case directly to
ministers and senior NHSE leadership for digital as the third
pillar of build alongside investments in bricks and mortar and
staffing, a message that is now taking root and beginning to gain
traction. The results to date of our pilot with QVH/Sussex ICS are
highly compelling (an approximate 69% reduction in patient referral
to treatment wait times, without needing additional clinical
personnel and in a way that we believe is cash releasing) and their
impact, if scaled nationally, is compelling.
In the last year we have set the scene that our technology
represents a core infrastructure, a foundation stone to the NHS's
plans around addressing winter pressures and reducing care
backlogs. This is a message that is now gaining traction with
national and regional stakeholders. The scene is set for our
success and now, in the current financial year, we seek to build
upon this and drive the growth of our technology as quickly as
possible across the system, becoming that third pillar of build for
the NHS CDC programme.
Outlook
We are delighted with the continued progress made during the
period - with the shift from legacy products. The opportunity
afforded by Bleepa and CareLocker both domestically and overseas
provides us with tremendous optimism as we focus on generating new
contracts from our ongoing dialogues with interested parties, which
we believe will further enhance levels of recurring revenue
visibility. The additional paid for Sussex CDC extension (announced
in April) further validates our strategy and we remain hopeful that
we will be successful in the procurement process. With CDCs
continuing to explore avenues to reduce waiting times we believe
that our performance to date provides compelling testament to our
capabilities - with early results from our current CDC programme
highlighting an approximate 69% reduction in diagnostics wait times
versus the national target.
Furthermore, we are extremely excited by global opportunities -
with inroads in India highlighting the scalability of our
solutions. Importantly, we believe that increased regulatory
demands both in the UK and India will further underpin demand.
There is increasing focus on technologies to secure the transfer
and display of images and videos, and we believe that the landscape
is very much moving in our favour - with digital infrastructure and
digitally enabled tools seen as key solutions to significant
administrative burdens. This is especially prevalent when
considering winter pressures and the growing requirement to reduce
care backlogs - and we believe that given our pipeline and
capabilities that we will be at the forefront of change in the
coming year.
Dr Tom Oakley
Chief Executive Officer
11 September 2023
Consolidated Statement of Comprehensive Income
for the year ended 31 May 2023
Note 2023 2022
GBP GBP
------------------------------------- ---------------------- ------------------ ------------------
Revenue 4 1,024,997 588,576
Cost of sales (84,276) (99,321)
Gross profit 940,721 489,255
Other operating expenses 5 (4,362,675) (3,002,489)
Operating loss 6 (3,421,954) (2,513,234)
Net finance income 7 47,868 2,012
Loss before taxation (3,374,086) (2,511,222)
Tax credit 9 455,909 392,631
Loss after tax attributable
to the equity shareholders
of the Company (2,918,177) (2,118,591)
Other comprehensive income/(losses)
Translation difference (2,243) -
on overseas operation
------------------------------------- ---------------------- ------------------ ------------------
Total comprehensive expense
for the year (2,920,420) (2,118,591)
--------------------------------------- ---------------------- ------------------ ------------------
Loss per share (pence)
Basic and diluted* 11 (21.88) (22.67)
--------------------------------------- ---------------------- ------------------ ------------------
*The 2022 Loss per share has been presented on a proforma basis
by applying the 200:1 share consolidation to the weighted average
number of ordinary shares of that period.
Consolidated Statement of Changes in Equity
for the year ended 31 May 2023
GROUP Share Share Capital Retained Translation Share Total
Capital Premium Reserve Earnings Reserve option
Reserve
GBP GBP GBP GBP GBP GBP GBP
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 issued 4,000,000 7,200,000 - - - - 11,200,000
Costs of new
shares issued - (709,008) - - - - (709,008)
Share options - - - - - - -
lapsed
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
-------------------------- ---------- ----------- --------- ------------- ------------ --------- ------------
Loss of the year - - - (2,918,177) - - (2,918,177)
Other comprehensive
loss for the
year (2,243) - (2,243)
-------------------------- ---------- ----------- --------- ------------- ------------ --------- ------------
Loss of the year
and Total Comprehensive
Loss for the
year (2,918,177) (2,243) (2,920,420)
New Shares issued - - - - - - -
Costs of new
shares issued - (830) - - - - (830)
Share-based payments - - - - - 80,859 80,859
-------------------------- ---------- ----------- --------- ------------- ------------ --------- ------------
Total transactions
with owners - (830) - - - 80,859 80,029
At 31 May 2023 6,667,330 15,350,241 299,900 (11,767,246) (212,239) 530,897 10,868,883
-------------------------- ---------- ----------- --------- ------------- ------------ --------- ------------
COMPANY Share Share Retained Share Total
Capital Premium Earnings option
Reserve
GBP GBP GBP GBP GBP
-------------------- ---------- ----------- ------------ ---------- -----------
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
---------------------- ---------- ----------- ------------ ---------- -----------
Profit of the
year and Total
comprehensive
income for the
year - - 1,703,482 - 1,703,482
Costs of new
shares issued - (830) - - (830)
Share-based
payments - - - 80,859 80,859
---------------------- ---------- ----------- ------------ ---------- -----------
Total transactions
with owners - (830) - 80,859 80,029
At 31 May 2023 6,667,330 15,350,241 (5,711,784) 530,897 16,836,684
---------------------- ---------- ----------- ------------ ---------- -----------
Consolidated Balance Sheet
for the year ended 31 May 2023
2023 2022
Notes GBP GBP
-------------------------------- ------ ------------- ------------
Assets
Non-current assets
Property, plant and equipment 13 14,909 8,367
Intangible assets 14 3,710,946 3,288,811
-------------------------------- ------ ------------- ------------
3,725,855 3,297,178
-------------------------------- ------ ------------- ------------
Current assets
Trade and other receivables 15 225,302 308,293
Corporation tax receivable 455,641 392,351
Cash and cash equivalents 7,317,534 10,305,577
-------------------------------- ------ ------------- ------------
7,998,477 11,006,221
-------------------------------- ------ ------------- ------------
Total assets 11,724,332 14,303,400
-------------------------------- ------ ------------- ------------
Equity
Capital and reserves
attributable to the Company's
equity shareholders
Called up share capital 18 6,667,330 6,667,330
Share premium account 18 15,350,241 15,351,071
Capital reserve 18 299,900 299,900
Translation reserve 18 (212,239) (209,996)
Share option expense reserve 18 530,897 450,038
Retained earnings 18 (11,767,246) (8,849,069)
-------------------------------- ------ ------------- ------------
Total equity 10,868,883 13,709,274
-------------------------------- ------ ------------- ------------
Liabilities
Current liabilities
Trade and other payables 16 855,449 594,126
-------------------------------- ------ ------------- ------------
855,449 594,126
-------------------------------- ------ ------------- ------------
Non-current liabilities
Contract liabilities 16 - -
-------------------------------- ------ ------------- ------------
- -
-------------------------------- ------ ------------- ------------
Total liabilities 855,449 594,126
-------------------------------- ------ ------------- ------------
Total equity and liabilities 11,724,332 14,303,400
-------------------------------- ------ ------------- ------------
The financial statements were approved and authorised for issue
by the Board of Directors on 11 September 2023 and were signed
below on its behalf by:
Consolidated Cash Flow Statement
for the year ended 31 May 2023
2023 2022
GBP GBP
------------------------------------------ ------------ ------------
Cash flows from operating activities
Loss before tax (3,374,086) (2,511,222)
------------------------------------------ ------------ ------------
Adjustments for:
Net finance income (47,868) (2,012)
Depreciation and amortisation 809,333 552,931
Impairment of intangible assets 6,695 -
Translation difference in overseas (2,243) -
operation
Share based payment expense 80,859 68,265
Decrease/(Increase) in trade receivables 94,876 (198,754)
Decrease/(Increase) in other receivables (11,885) 28,503
Increase/(Decrease) in trade payables (103,570) (30,100)
Increase/(Decrease) in other payables 364,891 71,397
Corporation tax received 392,619 767,400
------------------------------------------ ------------ ------------
Total adjustments 1,583,707 1,257,630
------------------------------------------ ------------ ------------
Net cash used in operating activities (1,790,379) (1,253,592)
------------------------------------------ ------------ ------------
Cash flows from investing activities
Purchase of tangible fixed assets (19,083) (5,450)
Purchase of intangible assets (1,225,619) (1,149,246)
Net finance income received 47,868 2,012
------------------------------------------
Net cash used in investing activities (1,196,834) (1,152,684)
------------------------------------------ ------------ ------------
Cash flows from financing activities
Net proceeds of share issue (830) 10,490,991
------------------------------------------ ------------ ------------
Net cash generated from financing
activities (830) 10,490,991
------------------------------------------ ------------ ------------
Net increase/(decrease) in cash
and cash equivalents (2,988,043) 8,084,715
Cash and cash equivalents at beginning
of year 10,305,577 2,220,862
Cash and cash equivalents at
end of year 7,317,534 10,305,577
------------------------------------------ ------------ ------------
Notes to the Financial Statements
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 11 September 2023.
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 7 Financial Instruments: Disclosures amendments regarding
supplier finance arrangements
- IAS 1 Presentation of Financial Statements - amendment
regarding the classification of; liabilities as current or
non-current; disclosure of accounting policies; classification of
debt with covenants
- IAS 7 Statement of Cash Flows - amendment regarding supplier finance arrangements
- IAS 8 Accounting Policies, Changes in Accounting Estimates and
Errors - amendment regarding the definition of accounting
estimates
- IAS 12 Income Taxes - Amendments regarding; deferred tax on
leases and decommissioning obligations and providing a temporary
exception to the requirements regarding deferred tax assets and
liabilities related to pillar two income taxes
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 2023 and 2022 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 any
impairment. Impairment reviews are performed annually or more
frequently if events or changes in circumstances indicate a
potential impairment.
The impairment review compares the carrying value to the
recoverable amount, which is calculated as the higher of the value
in use and the fair value less costs to sell.
(c) Going Concern
The Group incurred a net loss of GBP2,920,420 for the year ended
31 May 2023 however it had net assets of GBP10,868,883 inclusive of
GBP7,317,534 of cash and cash equivalents at 31 May 2023. 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 2024, 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, including providing financial support to the
Company's subsidiaries, 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.
(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.
Translation to presentation currency: The results and financial
position of Group entities (none of which has the currency of a
hyper--inflationary economy) that have a functional currency
different from the presentation currency (GBP) are translated into
the presentational currency as follows:
-- assets and liabilities presented are translated at the
closing rate at the date of that reporting period;
-- income and expenses are translated at average exchange rates; and
-- all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the
translation of the net investment in foreign operations are taken
to other comprehensive income.
(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 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.
(k) 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.
(l) 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.
(m) 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 customer type (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.
(n) 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.
(o) 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 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 our 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 2023 Medical Head Office Total
Imaging
GBP GBP GBP
------------------------------- ------- ------------ ------------ -------------
Revenue
External 1,024,997 - 1,024,997
Expenditure
Total (excluding depreciation
and amortisation) (2,613,702) (976,048) (3,589,750)
Depreciation and amortisation (809,333) (809,333)
---------------------------------------- ------------
Loss before tax (2,398,038) (976,048) (3,374,086)
---------------------------------------- ------------ ------------ -------------
Tax credit 455,909 - 455,909
---------------------------------------- ------------ ------------ -------------
Balance sheet
Total assets 4,693,140 7,031,192 11,724,332
Total liabilities (767,656) (87,793) (855,449)
---------------------------------------- ------------ ------------ -------------
3,925,484 6,943,399 10,868,883
--------------------------------------- ------------ ------------ -------------
Capital expenditure (all located
in the UK) (1,244,702) - (1,244,702)
---------------------------------------- ------------ ------------ -------------
The revenues from external customers in 2023 are comprised
of the following products Bleepa-CareLocker: GBP753,937, Image
Engineering license fees: GBP143,282 and legacy products Cadran
PACS and Texrad: GBP127,778.
Year ended 31 May 2022 Medical Head Office Total
Imaging
GBP GBP GBP
------------------------------- ------- ------------ ------------ -------------
Revenue
External 588,576 - 588,576
Expenditure
Total (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)
---------------------------------------- ------------ ------------ -------------
Reported segments' assets are reconciled to total assets as
follows:
External revenue Non-current Total liabilities
by assets by
location of customer location of location of
assets assets
----------------------- --------------------
2023 2022 2023 2022 2023 2022
GBP GBP GBP GBP GBP GBP
------------------- ------------ --------- ---------- ------------ --------- ---------
United Kingdom 873,597 432,129 3,725,855 3,297,179 855,449 594,126
Europe 2,208 4,485 - - - -
Rest of the world 149,135 151,962 - - - -
------------------- ------------ --------- ---------- ------------ --------- ---------
Total 1,024,940 588,576 3,725,855 3,297,179 855,449 594,126
------------------- ------------ --------- ---------- ------------ --------- ---------
GBP203,674 of revenue recognised in the current year was
recorded in contract liabilities in the prior year.
Major customers
During the year ended 31 May 2023, the Group generated
GBP525,000 of revenue from one customer in the United Kingdom,
which is equal to 51% of total Group revenues in the year. Major
customer from the rest of the world is located in USA and accounts
for GBP143,282 of group revenue generated.
5. Other operating expenses
2023 2022
GBP GBP
------------------------------- ---------- ----------
Administrative costs:
Employment and other costs 3,553,342 2,449,558
Amortisation and depreciation
costs 809,333 552,931
---------------------------------- ---------- ----------
4,362,675 3,002,489
------------------------------- ---------- ----------
6. Operating loss
2023 2022
GBP GBP
---------------------------------- ---------------------- -------- --------
This is stated after charging
Depreciation and amortisation
Owned assets 12,541 10,856
Amortisation of intangible
assets 796,789 542,076
Provision for doubtful debts 15,401 1,529
Foreign exchange differences 21,805 (648)
Auditors' remuneration
Audit of parent company and group financial
statements 20,700 13,800
Audit of subsidiaries 13,800 9,200
7. Net finance income
2023 2022
GBP GBP
Interest received 47,868 2,012
---------------------- ------- ------
47,868 2,012
------------------- ------- ------
8. Directors and employees
2023 2022 2023 2022
Average Average Year-end Year-end
FTE FTE
Number of employees
Selling and distribution 2 2 1 2
Administration 15 12 15 11
Research and development 6 5 8 6
------------------------------------ -------- -------- ---------- ----------
23 19 24 19
---------------------------------- -------- -------- ---------- ----------
2023 2022
GBP GBP
Staff costs
Wages and salaries 1,877,036 1,267,740
Social security costs 231,303 159,225
Payments to defined contribution
pension scheme 179,160 144,308
Share based payment expense 80,859 68,265
2,368,358 1,639,538
---------------------------------- -------- -------- ---------- ----------
Details of Directors' remuneration for the year ended 31 May
2023 and the prior year ended 31 May 2022 are set out in the
Remuneration Committee report.
9. Taxation on loss
2023 2022
GBP GBP
------------------------------------------------- ------------ ------------
The tax credit for the year:
(a)
UK Corporation tax (455,909) (392,631)
------------------------------------------- ----- ------------ ------------
Current tax credit (455,909) (392,631)
Adjustments in respect of prior - -
periods
(455,909) (392,631)
------------------------------------------------- ------------ ------------
Tax reconciliation
(b)
Loss before tax (1,132,957) (2,511,222)
Loss at the standard rate of corporation
tax in the UK of 20% (2022 - 19%) (226,623) (480,825)
Fixed asset differences - -
Expenses non-deductible for tax
purposes 16,593 (506,626)
Other permanent differences - -
Other income (447,489) (376,897)
Additional deduction for R&D expenditure (362,633) (1,530,494)
Surrender of tax losses for R &
D tax credit refund 203,611 (392,631)
Deferred tax not recognised 450,728 2,903,525
Remeasurement of deferred tax for (90,096) -
change in tax rates
Net capital allowances (8,683)
------------------------------------------- ----- ------------ ------------
Tax charge for the year (455,909) (392,631)
------------------------------------------- ----- ------------ ------------
In view of the tax losses carried forward there is a deferred
tax amount of approximately GBP1,510,984 (2022: GBP1,609,875) 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 GBP GBP1,075,668 (2022: GBP789,816)
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
profit for the financial year is GBP1,703,482 (2022 loss:
GBP559,408). The profit for the financial year 2023 arises from the
reversal of provisions against intercompany loans to subsidiaries
Feedback Medical Limited and Texrad Limited following an
intercompany debt to equity swap on 31 May 2023 whereby
GBP9,500,000 of the loan due to the parent company by Feedback
Medical Limited and a GBP350,000 of the loan due to the parent
company by Texrad Limited were swapped for equity.
11. Loss per share
Basic loss per share is calculated by reference to the loss on
ordinary activities after taxation of GBP2,918,177 (2022:
GBP2,118,591) and on the weighted average of 13,334,659 (2022:
9,345,617 rebased after consolidation) shares in issue.
2023 2022
proforma
GBP GBP
Net loss attributable
to ordinary equity holders (2,918,177) (2,118,591)
------------------------------- ------------ ------------
2023 2022
------------------------------ ------------ ------------
Weighted average number
of ordinary shares for
basic earnings per share 13,334,659 9,345,617
Effect of dilution:
Share Options - -
Warrants - -
Weighted average number
of ordinary shares adjusted
for the effect of dilution 13,334,659 9,345,617
------------------------------- ------------ ------------
Loss per share (pence)
Basic (21.88) (22.67)
Diluted (21.88) (22.67)
------------------------------- ------------ ------------
There is no dilutive effect of the share options and warrants as
the dilution would be negative.
The comparative period 2022 has been presented on a proforma
basis by applying the 200:1 share consolidation factor to the
weighted average number of shares in that period.
12. Investments
Share Shares Total
in Group in joint
undertakings venture
Company GBP GBP GBP
------------------------------------- -------------- ---------- -----------
Cost
------------------------------------- -------------- ---------- -----------
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)
------------------------------------- -------------- ---------- -----------
At 31 May 2022 2,459,804 - 2,459,804
------------------------------------- -------------- ---------- -----------
Addition (see note below) 9,857,991 - 9,857,991
As at 31 May 2023 12,317,795 - 12,317,795
------------------------------------- -------------- ---------- -------------
Provision for impairment
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
------------------------------------- -------------- ---------- -----------
Additional impairment included
in operating expenses (see note
below) 357,889 - 357,889
At 31 May 2023 2,817,693 - 2,817,693
------------------------------------- -------------- ---------- -----------
Net Book Value
At 31 May 2023 9,500,102 - 9,500,102
------------------------------------- -------------- ---------- -----------
At 31 May 2022 - - -
------------------------------------- -------------- ---------- -----------
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 cost additions in 2023 are comprised of a GBP9,500,000
investment in Feedback Medical Limited and a GBP350,000 investment
in Texrad Limited both arising from a debt to equity swap, a GBP102
investment in Feedback Medical India Private Limited and a GBP7,889
related to options in Feedback Medical Limited which would be
satisfied with Feedback Plc shares if/when they are exercised.
The impairment losses in 2023 by the Company (Head Office
segment) are comprised of:
-- a GBP350,000 impairment against the cost of investment in
Texrad Limited of GBP350,000. The Group is now focused on selling
Bleepa such that Texrad is a legacy product which is no longer
being actively marketed. The recoverable amount, being the value in
use, has been assessed as nil and consequently this investment has
been fully written; and
-- GBP7,889 related to options in Feedback Medical Limited which
would be satisfied with Feedback Plc shares if/when they are
exercised.
As at 31 May 2023, the carrying value of the Company's
investment in Feedback Medical Limited, the principle operating
subsidiary of the Group, was GBP9,500,000. The directors have
considered the Group's market capitalisation at 31 May 2023 based
on a volume weighted average share price of one to three months
when making an assessment of the recoverable value, being the fair
value less costs to sell of its investment in Feedback Medical
Limited. On this basis, the recoverable amount exceeds the carrying
value therefore no further impairment has been recognised.
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 Proportion of Shares
incorporation held
and operation
-------------------- ---------------- --------------- -------------------------
Brickshield Limited Dormant England 100%
Ordinary GBP1
Bleepa Limited Dormant England 100%
Ordinary GBP2
Feedback Medical Medical Imaging England 100%
Limited
A Ordinary GBP1
100% B Ordinary 1p
Feedback Medical Medical Imaging India Direct 0.1% and Indirect
India Private 99.9% Ownership 100%
Limited Ordinary INR 10
TexRAD Limited Medical Imaging England 100%
Ordinary 1p
-------------------- ---------------- --------------- -------------------------
All the subsidiary companies have been included in these consolidated
financial statements.
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%.
Feedback Medical India Private Limited was incorporated on
25 December 2022 and it is owned 100% by virtue of a direct
holding by Feedback Plc of 0.1% and an indirect holding via
Feedback Medical Ltd of 99.9%. Its registered office address
is Shop G 183, Ground Floor, Raghuleela, Mega Mall, SV Road,
Kandivali West, Mumbai, Mumbai City, Maharashtra, India, 400067.
Feedback Medical India Private Limited is fully consolidated
in the consolidated group accounts of Feedback plc. The statutory
year end for Feedback Medical India Private Limited is 31
March.
Each of the other subsidiary's registered office address is
201 Temple Chambers, 3-7 Temple Avenue, London, England, United
Kingdom, EC4Y 0DT.
In accordance with section 394A of the Companies Act 2006,
a company is exempt from preparing individual accounts for
a financial year. This section 394A of the Companies Act 2006
applies to Brickshield Limited (company registration number
06514313) and Bleepa Limited (company registration number
12118570).
13. Property, plant and equipment
Computer
Equipment Total
Group GBP GBP
--------------------- ---------- -------
Cost
At 31 May 2021 46,505 46,505
Additions 5,450 5,450
---------------------- ---------- -------
At 31 May 2022 51,955 51,955
Additions 19,083 19,083
---------------------- ---------- -------
As 31 May 2023 71,038 71,038
---------------------- ---------- -------
Depreciation
At 31 May 2021 32,732 32,732
Charge for the year 10,856 10,856
---------------------- ---------- -------
At 31 May 2022 43,588 43,588
Charge for the year 12,541 12,541
---------------------- ----------
At 31 May 2023 56,129 56,129
---------------------- ----------
Net Book Value
At 31 May 2023 14,909 14,909
---------------------- ---------- -------
At 31 May 2022 8,367 8,367
---------------------- ---------- -------
14. Intangible assets
Software Customer Intellectual Goodwill Total
development relationships Property
GBP GBP GBP GBP GBP
Cost
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
Additions 1,225,619 - - - 1,225,619
At 31 May 2023 5,630,692 100,000 197,852 271,415 6,199,959
--------------------- ------------- --------------- ------------- --------- ----------
Amortisation and
impairment
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
Amortisation charge
for year 781,394 - 15,395 - 796,789
Impairment - 6,695 6,695
At 31 May 2023 1,952,123 100,000 165,475 271,415 2,489,013
--------------------- ------------- --------------- ------------- --------- ----------
Net Book Value
At 31 May 2023 3,678,569 - 32,377 - 3,710,946
--------------------- ------------- --------------- ------------- --------- ----------
At 31 May 2022 3,234,344 - 54,467 - 3,288,811
--------------------- ------------- --------------- ------------- --------- ----------
The impairment of GBP6,695 in 2023 relates to intellectual
property held by Texrad Limited being written down to nil as the
group is now focused on selling Bleepa such that Texrad is a legacy
product which is no longer being actively marketed.
15. Trade and other receivables
Group Company
2023 2022 2023 2022
-------- -------- ------- -------
GBP GBP GBP GBP
---------------------------- -------- -------- ------- -------
Amounts falling due within
one year
Trade receivables 130,824 225,700 - -
Other receivables 12,795 12,866 12,563 12,778
Prepayments 81,683 69,727 44,601 36,985
225,302 308,293 57,164 49,763
---------------------------- -------- -------- ------- -------
16. Trade and other payables
Group Company
2023 2022 2023 2022
-------- -------- ------- -------
GBP GBP GBP GBP
--------------------------------- -------- -------- ------- -------
Amounts falling due within
one year
Trade payables 63,670 167,240 17,494 17,681
Other payables 18,073 15,262 - -
Other taxes and social security 146,745 65,815 17,011 15,797
Accruals 185,913 142,135 53,275 40,522
Contract liabilities 441,048 203,674 - -
--------------------------------- -------- -------- ------- -------
855,449 594,126 87,780 74,000
Neither the Group or the Company have any borrowings and so
there are no changes in liabilities arising from external 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 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. An additional provision for credit loss of GBP15,401
has been recognised during the year (2022: GBP1,500) for trade
receivables measured at an amount equal to lifetime expected credit
losses.
The Group holds no collateral. It has a minimal risk policy with
funds held following fund raises so it holds the vast majority of
its cash with mainstream UK banks.
The Group's customers were primarily the NHS in 2023, 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:
Group Company
2023 2022 2023 2022
-------------- --------------- ------------ -------------
GBP GBP GBP GBP
--------------------------------- -------------- --------------- ------------ -------------
Trade and other receivables 225,302 308,293 57,164 49,763
Loans to subsidiary companies - - 393,170 4,933,648
Cash and cash equivalents 7,317,534 10,305,577 6,974,028 10,143,762
--------------------------------- -------------- --------------- ------------ -------------
7,542,836 10,613,870 7,424,362 15,127,173
--------------------------------- -------------- --------------- ------------ -------------
Analysis of trade receivables
30 days 60 days 90 days
Total Current past due past due past due
GBP GBP GBP GBP GBP
--------------------- ---------- ---------- ------------ -------------- ---------------
Group
2023 130,824 2,640 128,184
2022 225,700 102,377 - 123,323 -
Company
2022 - - - - -
2021 - - - - -
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.
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 2023.
2023 2022 2023 2022
GBP GBP GBP GBP
-------------------- ----- --------- ----- -----
Trade Receivables - 102,377 - -
As at 31 May 2023 GBPNil (2022: GBP102,377) of Feedback
Medical's net trade receivables are denominated in foreign
currency. A 5% increase/fall in exchange rates would lead to a
profit/loss of GBPNil (2022: GBP4,875). The Directors do generally
consider it necessary to enter into derivative financial
instruments to manage the exchange risk arising from its
operations.
However, 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 2023 or as at 31 May 2022.
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
------------------- ----------------
2023 2022 2023 2022
------------------------------------- -------- --------- ------- -------
GBP GBP
Trade and other payables 81,743 182,502 17,494 17,681
--------------------------------------- -------- --------- ------- -------
The following are maturities of financial liabilities, including
estimated contracted interest payments.
Carrying amount Contractual 6 months
GBP cash flow or less
GBP GBP
Group
2023 81,743 81,743 81,743
2022 182,502 182,502 182,502
Company
2023 17,494 17,494 17,494
2022 17,681 17,681 17,681
--------- ---------------- ------------ ---------
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:
Number Number
--------------------------------------- ---------------- --------------
As at start of period (01 June) 2,666,931,677 1,066,931,686
Issued during year - 1,599,999,991
200:1 share consolidation (see note (2,653,597,018) -
below)
--------------------------------------- ---------------- --------------
As at end of period (31 May) 13,334,659 2,666,931,677
--------------------------------------- ---------------- --------------
During 2023, a 200:1 share consolidation occurred whereby the
existing ordinary shares of GBP0.0025 nominal value each were
consolidated into new ordinary shares of GBP0.50 nominal value
each.
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.
In the table below, the number of options as at 31 May 2022 have
been restated on a proforma basis following the 200:1 share
consolidation which occurred in 2023 such that the number of
options have been divided by a factor of 200 and the exercise
prices have been multiplied by a factor of 200.
During the year, the Company had the following share options in
issue:
Grant No. Granted Lapsed No. options Exercise Exercisable period
Date options in year in year as at price
as at 31 May (pence)
31 May 2023
2022
------------- ---------- --------- --------- ------------ --------- -------------------
21 May 21 May 15 - 19
14(1) 12,000 - - 12,000 250 May 24
21 May 21 May 15 - 19
14(1) 20,000 - - 20,000 600 May 24
21 May 21 May 15 - 19
14(1) 20,000 - - 20,000 1000 May 24
26 June 01 March 19 - 26
18(3) 28,000 - 14,000 14,000 372 June 28
09 April 09 April 19 - 09
19(2) 46,660 - - 46,660 218 April 29
23 April 01 June 20 - 24
20(4) 82,500 - 7,500 75,000 240 April 30
06 August 06 August 20 -
20(5) 67,493 - - 67,493 240 06 August 30
23 February 31 May 22 - 31
22(6) 726,184 - - 726,184 140 May 30
23 February 23 February 23
22(7) 83,859 - - 83,859 140 - 23 February 32
1,086,696 - 21,500 1,065,196
------------- ---------- --------- --------- ------------ --------- -------------------
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
240p 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
372p 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
600p 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 23 February 2022 with no performance
conditions, the following assumptions were made for valuation
purposes using the Black-Scholes option pricing model:
-- Risk-free rate: 1.31% based on the five-year UK gilt
-- Expected volatility: 50% based on Medical Services sector as
published in the Risk Measurement Service, London Business School
manual, Vol 44 No 1 January - March 2022
-- Expected life: Four years
-- Estimated fair value of each option at measurement date:
GBP0.0027 (equivalent to GBP0.54 rebased for the 200:1 share
consolidation in period)
For the options granted on 23 February 2022 with share price
performance conditions, the following assumptions were made for
valuation purposes using the Monte Carlo option Pricing Model:
-- Risk-free rate: 1.31% based on the five-year UK gilt
-- Expected volatility: 50% based on Medical Services sector as
published in the Risk Measurement Service, London Business School
manual, Vol 44 No 1 January - March 2022
-- Expected life: Five years
-- Estimated fair value of each option at measurement date:
GBP0.0014 (equivalent to GBP0.28 rebased for the 200:1 share
consolidation in period)
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
---------------------- -------------------
2023 2022 2023 2022
---------- ---------- --------- --------
Pence Pence
------------------------ ---------- ---------- --------- --------
Outstanding at 01 June 1,086,696 294,153 189 331
Granted in year - 810,043 - 140
Lapsed in year 21,500 17,500 326 334
------------------------ ---------- ---------- --------- --------
Outstanding at 31 May 1,065,196 1,086,696 186 189
------------------------ ---------- ---------- --------- --------
Following the 200:1 share consolidation during 2023, the above
share options have been restated on a proforma basis such that the
number of options have been divided by a factor of 200 and the
weighted average exercise prices have been multiplied by a factor
of 200.
Warrants
Warrants were issued to the vendors of TexRAD Limited at the
time of acquisition. The warrants are exercisable from the end of
the vesting period and lapse ten years after the grant date. The
Group has no legal or constructive obligation to repurchase or
settle the warrants in cash.
Number of warrants
At 31 May Granted Exercised At 31 Exercise Exercisable
2022 May 2023 price period
(pence)
---------- -------- ---------- ---------- --------- ------------
19/05/16 to
21,000 - - 21,000 250 19/05/24
19/05/17 to
91,000 - - 91,000 600 19/05/24
--------- ------------
112,000 - - 112,000
---------- -------- ---------- ---------- --------- ------------
Following the 200:1 share consolidation during 2023, the above
warrants have been restated on a proforma basis such that the
number of options have been divided by a factor of 200 and the
weighted average exercise prices have been multiplied by a factor
of 200.
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 GBP179,160 (2022:
GBP144,308). A balance of GBP17,084 (2022: GBP13,084) was payable
at the year end.
20. Related party transactions
Key management personnel
Details of Directors' remuneration for the year ended 31 May
2023 and the prior year ended 31 May 2022 are set out in the
Remuneration Committee report.
Management fee from Company to subsidiaries
Feedback Plc invoiced Feedback Medical Limited GBP359,716 for
the management fee related to 2023 (2022: GBP340,694), with a
balance of GBP413,566 being receivable as at the year end. Feedback
Plc invoiced Texrad Limited GBP34,806 for the management fee
related to 2023 (2022: GBP34,192), with a balance of GBP38,764
being receivable as at the year end.
The Directors interests in shares of the Company are contained
in the Directors' Report.
21. Post balance sheet events
There are no post balance sheet events to report.
22. Ultimate controlling party
There is no ultimate controlling party.
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END
FR BFLLFXKLBBBK
(END) Dow Jones Newswires
September 12, 2023 02:00 ET (06:00 GMT)
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