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Feedback PLC (FDBK)

  Print          Annual reports

Tuesday 02 November, 2021

Feedback PLC

Final Results

RNS Number : 9954Q
Feedback PLC
02 November 2021
 

Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.

 

Feedback plc

 

Full Year Results to 31 May 2021

 

Bleepa™ gains momentum with new contracts and collaborations

 

London, UK, 2 November 2021 - Feedback plc (AIM: FDBK, "Feedback" or the "Company"), the specialist clinical communication company , announces its audited results for the 12 months to 31 May 2021.

 

Operational highlights

 

• First direct commercial contract for Bleepa with the Royal Berkshire NHS Foundation

• Significant progression in developing Bleepa's offering, scalability and security:

Appointment to the NHSx Clinical Communications Procurement Framework post CE mark, confirming use of Bleepa as a Class 1 Medical Device

Addition of new key features including photocapture and document capture

Receipt of further accreditation and certification - highlighting quality of Bleepa

NHS Data Security and Protection Toolkit compliant

Cyber Essentials and Cyber Essentials Plus accreditations used by the NHS

· Strengthening of the Board through appointment of Philipp Prince as non-executive director

· Recruitment of marketing specialists both in the UK and India to expediate commercial strategy

 

Financial highlights

 

· Revenue was £0.29 million (2020: £0.45 million), reflecting the planned move away from legacy products

· Operating loss increased to £2.06 million (2020: £1.42 million), reflecting headcount expansion to accelerate growth, and due to the planned decrease in legacy product revenues

· Shareholder's equity (net assets) increased to £5.27 million as at 31 May 2021 (2020: £1.77 million)

· Strong cash balance of £2.22 million as at 31 May 2021 (31 May 2020: £0.73m)

· Successfully raised £5.27 million (before expenses) in July 2020

 

Post period highlights

 

· Launch of CareLocker, a revolutionary patient-centric cloud architecture to underly the Bleepa platform

· First non-NHS commercial contract, with CVS Group, one of the UK's leading providers of integrated veterinary services highlighting Bleepa's commercial scope outside of NHS

· Expansion of potential revenue streams through broadening market access and commercial discussions with third parties:

MOU with Qure.ai to pilot Bleepa for use in tuberculosis screening in India

MOU with Quest to expand its existing teleradiology service by enabling direct case discussion between requesting clinicians and reporting radiologists

MOU with Sussex Integrated Care System (Sussex ICS) to conduct a pilot study with Queen Victoria Hospital NHS Foundation Trust as one of the UK's Community Diagnostic Centre ("CDC") exemplar sites

Appointed to national NHS AI procurement framework

· UKCA mark, the post-Brexit UK regulatory certification

Bleepa believed to be the only CE and UKCA marked clinical imaging and communication platform on the NHSx Clinical Communications Procurement Framework, the NHS CDC initiative and NHS AI procurement framework

· Addition of ISO27001 and UK Medical Device Certification (UKCA) to its regulatory portfolio, maintaining a competitive barrier against competitors  

· Launch of Bleepa on Apple Store and Google Play

· Announced the launch of an accelerated book build today for a placing to raise a minimum of £10 million (before expenses)

 

 

Dr Tom Oakley, CEO of Feedback, said:  "The Company made significant progress during the period - increasing both Bleepa's functionality and routes to market, laying the foundations to deliver strategic commercial opportunities - and, importantly, generating initial revenues for the platform, highlighting commercial viability within the UK and beyond. 

 

"We are well positioned to address a number of key growth opportunities within both our domestic and international markets. Our technology is perfectly aligned with the stated objectives of key government initiatives such as the CDC programme and re-launched NHSx Clinical Communications Procurement Framework. The addition of Bleepa Box and CareLocker have assisted in repositioning the Company into the clinical communications and medical data storage space enabling us to offer a comprehensive digital solution to frontline clinical needs that is scalable, secure and cost effective. Feedback enters 2022 with a strong pipeline of opportunities in multiple market segments and a competitive edge, from both a technological and regulatory perspective, that will make it difficult for competitors to follow and looks forward to a strong year ahead and to building upon the huge progress made to date."

 

The Company's Annual Report and Accounts for the year ended 31 May 2021 will be posted to shareholders in due course, and will be available on the Company's website (https://fbkmed.com/feedback-plc/reports-and-presentations/).

 

-Ends-

 

Enquiries:

 

Feedback plc

Tom Oakley, CEO

Lindsay Melvin, CFO

+44 (0)1954 718072

[email protected]

 

 

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 [email protected]

Paul McManus/Nick Rome/Nicholas Johnson

07980 541 893 or 07748 325 236 or 07884 664 686

 

Notes to Editors

 

Feedback plc (AIM: FDBK) is a pioneer of regulated clinical communication products. Its core product, Bleepa, is a revolutionary medical imaging communications app, providing an easy-to-use, high quality tool to enable remote and secure communications between front-line clinicians and teams. Importantly, it is the only CE marked medical imaging communications platform on the NHSx clinical communications tools framework. Bleepa has unparalleled functionality for everyday practice and can be accessed from any internet-connected device, enabling control of patient cases when on the go. 

 

Its highly scalable Software as a Service ("SaaS") based revenue model will provide increasing levels of visibility as the Company grows its customer base. With a growing distribution base and technology in place, the focus is on leveraging key relationships in order to drive sales both in the UK and internationally to all forms of care providers. As a fully certified medical device, Bleepa aims to disrupt the medical imaging communications market and, importantly, increase the accuracy and speed of clinical review.

 

 

 

 

Chairman's Statement

 

Foundations laid to deliver strategic opportunities for growth

 

"Whilst Covid-19 has presented a challenge for healthcare across the board, Feedback seized the opportunity to work with a handful of NHS sites during the pandemic to support frontline staff whilst honing its products. It was a privilege to see Bleepa making such a difference to clinicians during this time, enabling remote working during quarantine and beyond, ensuring that their expertise was still available to guide colleagues who remained on the frontline. Through this experience, Bleepa has been able to prove its value and enhance its proposition, and we are now well positioned to advance opportunities for digital adoption within the NHS and beyond."

 

Feedback has made great strides during the past year, achieving its first Bleepa contract in March of this year with the Royal Berkshire NHS Foundation Trust, less than two years from the conception of Bleepa. This is an incredible story for a medical device at any time, let alone during a global pandemic, and is testament to the quality of the product and the clinical need for this solution, further validated through Bleepa's CE and UKCA mark as a medical device.

 

During the year the Company has refined its product offering, leveraging the extensive user feedback afforded by our close working relationship with our clinical partner Pennine Acute Hospitals NHS Trust. This saw Bleepa expand its functionality to include formal electronic referrals between specialties, photocapture and clinical document management and the development of integration capabilities with a number of core hospital systems such as Patient Administration Systems (PAS), Electronic Patient Records (EPR) and Laboratory Information Management Solutions (LIMS). These developments enabled Bleepa to deliver a comprehensive suite of capabilities right into the hands of frontline clinicians, allowing them to perform their work from one application. Essentially Bleepa moved beyond communication to become an EPR-lite that also incorporated diagnostic imaging.

 

This enhanced functionality has positioned Bleepa as a tool that can be used for effective remote working in any location, a theme that we took to the next level when we achieved our first non-NHS contract with the equine division of CVS Group. Imaging of horses is typically done in remote stables without WiFi but there is often the need for timely advice and guidance by specialists for the vet that is with the animal. We developed a store and forward technology, called the Bleepa Box, that enables images to be acquired and pushed over a mobile network to Bleepa, where they can then be reviewed by a specialist and a discussion started, all whilst still at the animal's side. The requirement to share imaging from rural locations is not restricted to equine veterinary practice and this capability has opened a number of opportunities for the Company such as in the delivery of rural imaging for tuberculosis (TB) screening services in India.

 

Bleepa now delivers the sort of functionality that is required for delivering care across regions and providers, making it the ideal solution to provide the right digital infrastructure to clinical initiatives such as the NHS CDC initiative in the UK, a £10bn programme to move diagnostic provision from hospital settings closer to patients in the community in order to provide additional system capacity to help address the post Covid-19 elective care backlog. This opportunity required the development of a cloud-based architecture that would enable Bleepa to scale across provider sites and facilitate the centralisation of data around patients so that the same data could be made available to all providers in a region or nationally. The result is our proprietary patient-centric cloud - CareLocker. CareLocker positions the Company for growth across geography, enabling us to bid for larger regional contracts. It also sees us transition into an exciting new sector - medical data management.

 

Feedback is rapidly evolving to capture a number of sizeable and timely opportunities across multiple markets and locations. This is a company set for growth and the journey is just getting underway.

 

Rory Shaw

Non-executive Chairman

01 November 2021

 

 

 

 

CEO's statement

 

Enabling clinicians to make better decisions faster, through asynchronous collaboration and access to data

 

"As a company, our mission is to enable clinicians to make better decisions faster and we believe that requires two things, connection to colleagues and easy access to meaningful patient data. Since its conception this has been exactly how Bleepa was designed - to connect teams around their patients and to display the data they need in the right clinical quality. Building on this foundation, we have expanded Bleepa's use to suit more clinical settings, including the veterinary sector, enhanced by our recently launched Bleepa Box technology. Now we are looking at how our products can help regional and national care systems to deliver their visions of connected care and the data structures that are required to enable these to be realised at scale. Bleepa already centralised multisystem data around individual patients, it was only one step further to then store that data in a patient-centric way, through CareLocker, enabling data to move with a patient rather than be tied to provider settings. In combination Bleepa, CareLocker and Bleepa Box enable truly global care from anywhere and unlock a new generation of flexible care delivery for both clinicians and their patients."

 

We cannot talk about this year without mentioning Covid-19, which has been a force that has dominated the focus of our customers, partners, team and families. It has created great pressures on the healthcare system and highlighted many gaps that are in desperate need of support, none more so than in the digital systems upon which our clinicians rely and the ever increasing need to deliver care in a more flexible way across multiple provider settings. Covid-19 also changed the way that we work, this affected everyone, including clinicians, and forced new ways of remote working that would previously never have been explored by the healthcare sector. Some of these changes cannot be undone, clinicians have seen a new way of practicing and, even more importantly, have recognised the benefits that this may hold for their patients. The technologies that benefitted the system during Covid-19 may also be needed in order to help address the challenges that are left in its wake, namely the growing care backlog and the stark reality of workforce shortages. Going forward healthcare systems globally need more efficient ways of working and an ability to deliver care flexibly across geography and provider settings. They need our technology.

 

Recognising the changing needs of our customers, we have invested in developing our products so that they can deliver improved functionality across a range of clinical pathways and can be scaled seamlessly across provider settings. For individual clinical teams this has meant integrating with a range of hospital systems that contain the patient data that they need in order to make effective decisions remotely. For regional providers, this has meant looking at new ways of storing the data that we are processing so that it is available to clinicians at different physical sites, who previously would not have been able to access the information, culminating in the development of CareLocker - our patient-centric cloud database. The combination of Bleepa as an application and CareLocker as a supporting data infrastructure uniquely enables us to facilitate entire care pathways across provider settings. We have become the digital infrastructure, the digital glue, that has the ability to connect primary, secondary and emerging care settings such as the CDCs around individual patient pathways, allowing them to efficiently deal with elective care pathways and the associated care backlog.

 

Bleepa's asynchronous communication is also changing the ways that multidisciplinary team (MDT) meetings are delivered. MDTs traditionally bring a range of specialists together to review diagnostic investigations and make treatment decisions for patients, usually in person but during Covid often over video call. This model of decision making is very inefficient and expensive because it requires all of the specialists to block out a specific time - time better spent doing clinical work. Often MDTs are organised before all the information is available and because cases can only be discussed at these meetings, patients have to wait for the next available slot to be heard. Bleepa facilitates cases to be discussed flexibly in and around existing clinical work, as and when clinical results are ready for review, removing these time- and case-delaying constraints. Due to Bleepa's ability to display relevant data around the patient, clinicians can make these decisions on the go through our mobile application. The asynchronous model of MDTs is a key workforce change that will drive clinical efficiencies and better enable providers to address care backlogs.

 

We have also developed fringe technologies that extend our applications beyond traditional care settings, such as store and forward technology in our Bleepa Box solution that enables images such as X-rays to be acquired in any location and pushed over a mobile network to Bleepa for clinical review and onward management. This technology stemmed from our veterinary customers but has already led to opportunities in India where we can facilitate the acquisition of chest X-rays in rural settings and their subsequent reporting as part of the national TB screening programme, both by radiologists and by the AI technologies of our partner Qure.ai. AI is the next iteration of our mission to drive better, faster clinical decisions. It is a group of technologies that supports clinical decision making and holds huge promise in addressing workforce shortages at a system level. These technologies require access to the clinical teams to deploy them into care pathways and the patient data needed to feed their algorithms. Bleepa is the perfect deployment partner for AI technologies because it holds both the relationship with the clinical end user and can facilitate access to the required clinical data for processing. We are working with a growing number of AI partners and see this as a great opportunity to support our clinical customers to access the best tools available.

 

Our products are the embodiment of our underlying mission, bringing together clinicians, data and the latest technologies to enable clinicians to make better decisions faster for their patients. As a result, we are rapidly becoming a company that enables care to be delivered from anywhere for anyone.

 

Trading during the period continued to meet management expectations, with the Company securing its first commercial contract for its flagship product Bleepa with the NHS, and, post-period, a contract with CVS to enter the veterinary market.

 

The Company completed an equity fundraise of £5.3 million (before expenses) in July 2020. Importantly, we strengthened our marketing team and hired an integration specialist in order to help increase the speed of roll out. Furthermore, investment into our infrastructure and operating platform has laid the foundations for product enhancements, making Bleepa more attractive to a wider audience.  Post period, on 2 November 2021, the Company announced an accelerated bookbuild to raise a minimum of £10 million (before expenses) with closing of the placing expected on the same day. Subject to closing, the placing is conditional on shareholder approval at the forthcoming Annual General Meeting. This funding will enable the Company to focus investment on sales, product development and geographic expansion.

 

Our agile approach to innovation means that we are embarking on multiple stages in parallel, at pace, to realise our vision as quickly and effectively as possible for our customers and provide value for our shareholders.

 

OPERATIONAL REVIEW

 

Bleepa

 

Bleepa is the essential tool for remote, secure communications between clinicians and teams to securely view and discuss patient cases, at the touch of a button.

 

Bleepa is our flagship clinical imaging-based communications platform using asynchronous communication channels built around individual patient pathways, into which we bring medical data (that is otherwise stored in disparate siloed systems) that allows medical staff to securely view and discuss high-quality, medical-grade images across both mobile and desktop devices. Bleepa enables clinical teams to access the colleagues they need and the data they need to make better decisions faster and is a frontline tool that clinicians can use for almost any aspect of their day-to-day work.

 

· Bleepa is the only CE and UKCA marked clinical imaging and communication platform on the NHSx Clinical Communications Procurement Framework, the NHS CDC initiative and NHS AI procurement framework

· Enables sharing of patient images such as X-ray, CT, MRI or ultrasound at a standard approved for clinical review (DICOM), alongside instant-messaging-based case discussion to make more informed decisions faster, enabling safer patient care

· Photocapture module enables clinicians to acquire clinical images of patients, such as in-field medical photographs of skin lesions or wounds

· Document capture to encapsulate additional patient information, ECG and blood test results within the patient record from which to share and discuss with colleagues

· Facilitates clinical referrals and treatment decisions within a hospital, between hospitals and pan-regionally offering truly networked care as well as enable smoother and swifter transfer from one medical team to another, from referral to decision, treatment and exit

· Accessed from any internet-connected device, Bleepa maintains control of patient cases remotely and creates secure networks with all the information and functionality needed for clinicians to manage workloads more effectively

· Zero footprint ensures that no patient data is stored locally on the device used to access the service, providing greater security

 

A study conducted at Pennine Acute Hospitals NHS Trust in 2020 analysed use of Bleepa in the respiratory and gastroenterology teams and concluded:

 

· Bleepa reduced the average time from point of referral to clinician review from 2.1 days to 0.4 days and time taken to access clinical information needed from 5.47 minutes to 1.04 minutes, saving 4.43 minutes per referral

· Bleepa completely automated the referral process, digitising patient records and reducing required administrative time

· Based on the nearly 7,000 referrals performed in the study, Bleepa demonstrated an estimated saving of 36.3 weeks of clinical time per annum if the study was expanded across other specialities

 

Bleepa is now installed in five sites across four NHS trusts with one of the Trusts converting to a contract during the year.  It is the only communication platform on the NHSx Clinical Communication Procurement Framework to incorporate a certified DICOM image display for clinical image review. The display of digital patient images for any diagnostic purpose is a medical device function under the prevailing legislation and any product that performs this function must be appropriately certified as a medical device. Bleepa is the only communication platform to be appropriately certified for medical image display, holding both CE and UKCA marks. The product is manufactured using an ISO13485 and ISO27001 compliant Integrated Management System and has achieved Cyber Essentials and Cyber Essentials Plus security accreditation.

 

Post-period, in September 2021, Bleepa was awarded a place on the NHS national AI procurement framework: The Provision of Artificial Intelligence (A.I), Imaging and Radiotherapy Equipment, Associated Products and Diagnostic Imaging.  The Company has developed a Bleepa AI module that enables clinicians to include third party AI tools of their choosing within the app to assist with the diagnostic interpretation of medical imaging studies such as X-rays, CT scans and MRIs. The framework will allow NHS organisations to buy the Bleepa AI solution as a platform for AI tool deployment, allowing them to meaningfully engage with any number of AI tools knowing that there is one common route for deployment into their clinical setting. The Company intends to additionally charge the AI companies a deployment fee through the platform.

 

Post-period, in June 2021, Bleepa completed a comprehensive evaluation and is now available for clinicians to download on all devices through the Apple App Store and Google Play. Access through the Apple App Store and Google Play will make it easier to roll out Bleepa at customer sites as clinicians will now be able to download the app directly to their own devices.

 

CareLocker

 

Building the right digital infrastructure for patient care

 

CareLocker is a new proprietary and patient-centric cloud architecture that supports Bleepa's functionality whilst simultaneously creating patient-specific records of care episodes. CareLocker will enable Bleepa to deliver care across provider settings in a secure and scalable way. 

 

CareLocker provides secure and GDPR-compliant patient-centric cloud data stores: containers that store medical data at an individual patient level. With this proprietary architecture, patient data can be secured at the individual level, with access control even to subsets of a patient's data. CareLocker offers opportunities for improved storage optimisation making it more cost effective than traditional storage architectures. Most importantly, CareLockers can be built on a patient-by-patient basis, allowing organisations to transition to a cloud architecture as patients enter care pathways rather than having to undertake the mass data migrations usually associated with cloud transitions.

 

As a clinical tool Bleepa integrates with multiple hospital systems and centralises relevant clinical data around specific patient episodes, presenting it together to clinical teams to accelerate decision making capabilities through the platform. This data includes lab results, structured reports, ECGs and most importantly medical images which are uniquely displayed through Bleepa's regulated DICOM viewer. Having centralised data around a patient CareLocker provides a patient-centric way of storing that data as a de-centralised record of that care episode that can then be made available to any care setting through open APIs such as FHIR.

 

 

 

Bleepa Box

 

Bleepa box is a small tablet device that connects to imaging machines in order to securely push images to Bleepa over a mobile network from remote locations. Images are downloaded from the imaging machine onto the Bleepa Box then automatically pushed to Bleepa. The clinician can then review the images on Bleepa using the Bleepa Box and can make onward referrals or start a conversation with a specialist about the case there and then. The capability of remote image acquisition has far-reaching applications in rural care delivery, war zones and humanitarian responses.

 

Building partnerships to deliver strategic commercial opportunities

 

A key element to both gaining a strong reputation, and thereby market traction, is our strategy to partner with companies that can advance Bleepa's recognition through complementary technologies, a broader distribution network or introduction into new clinical settings. The Company is currently in discussion with a number of potential partners, all of which have the potential to create new opportunities for Bleepa, from providing partnership in the CDCs, TB screening or access to new hospitals, to potential entry into new geographical markets such as India, Ireland and Africa. Agreements such as these often require pilot studies and a negotiation period as we gain understanding of how the two parties can work together.  So far, we have announced three new partnerships and are exploring how Bleepa can bring value to these new and future collaborations in emerging markets.

 

Axial 3D

As the first AI company that Feedback partnered with, Axial 3D's technology enables 3D visualisation of specific pathologies or organs for use in surgical planning, these images can also be sent for 3D printing if a physical model is required. Bleepa and Axial 3D are hoping to bring 3D visualisation into the asynchronous MDT process hosted by Bleepa. Covid has delayed a real-world deployment of this solution, however the companies believe that this solution will help to improve surgical outcomes and will be necessary in the efforts to address the elective care backlog by driving faster patient recovery and enabling shorter surgical procedures, improving system efficiency and outcomes.

 

Quest

Quest is an Indian company providing teleradiology services to a number of customers across India, Africa and the Middle East. It is anticipated that Bleepa will support their existing customer base by providing easier access to DICOM images for reporting, and enhanced ability to display Quest-generated reports at customer sites and the facilitation of two-way conversation between their reporting radiologists and referring clinicians. The companies will jointly look for new customers and it is hoped that Quest will propose the joint solution to their existing customer base.

 

Qure.ai

Qure.ai has developed world-leading AI diagnostic imaging tools in a number of clinical areas including chest pathology such as TB, Covid and lung cancer and head pathology such as brain tumours and stroke. Feedback is working with Qure.ai in a number of clinical settings to explore deploying their tools into clinical pathways. The initial focus of our partnership is in deploying Qure.ai's technology in the TB screening pathway in India where Feedback is facilitating rural image acquisition through the Bleepa Box; clinical pathway management with Bleepa, through which the AI tool is deployed; and subsequent storage of the clinical record in CareLocker.

 

Growing presence across multiple markets

 

NHS

Feedback has been working with the NHS for over 20 years across our legacy and new product lines. The NHS remains a core customer group for the Company and a source of near-term revenue opportunities. In March 2021, we announced Bleepa had been awarded a one-year contract across a number of targeted clinical settings with the Royal Berkshire NHS Foundation Trust. The contract funding has been drawn down from the NHSx National Clinical Communication Procurement Framework. Adding to our ongoing contracts at The Royal Oldham Hospital, part of the Pennine Acute Hospitals NHS Trust.

 

As outlined previously in this report, there are emerging opportunities for the Company in the context of the £10bn CDC programme and the re-launched NHSx Clinical Communications Procurement Framework with the revised budget of £125m. Forty new CDCs are set to open across England in the first wave, in a range of settings and will begin providing services over the next six months. The Company will pursue both CDC regional contracts and NHS hospital trust-level contracts through the framework in parallel. It is anticipated that adoption in the CDC setting will also promote opportunities to provide Bleepa to the hospital trusts for their inpatient teams who will be used to using Bleepa for regional case discussion.

 

Post-period, in October 2021, we entered into a MOU to conduct a pilot study with Queen Victoria Hospital NHS Foundation Trust providing CDC services with Sussex ICS as one of the UK's CDC exemplar sites. It is anticipated that the pilot will identify the specification for bespoke development to meet the core CDC system needs of Sussex ICS. Bleepa will provide a digital clinical communication platform to allow these investigations to be captured, associated with a specific patient journey and presented to clinicians in both primary and secondary care settings for review, discussion and planning onward management. The pathway record will then be stored centrally using Feedback's patient-specific CareLocker infrastructure to ensure its onward availability to all care settings. The pilot is expected to run until March 2022 targeting CDC pathways in specific clinical areas such as respiratory and cardiology. It is anticipated that more pathways will be added as the pilot progresses with the ultimate aim of agreeing contractual terms for a commercial roll-out to CDCs. As one of the first CDC sites to be launched in the UK, this pilot is expected to act as a blueprint model for how CDCs can be delivered.

 

In addition, we have turned our focus to providing solutions to a range of territories, all of which have slightly different requirements and potential revenue models. The importance here is in ensuring that we are able to offer attractive solutions that can be implemented quickly and easily within existing entities.

 

Veterinary services

Post-period, Feedback entered the veterinary services market with the announcement of our first commercial contract with the equine division of CVS Group. This is our first contract in the veterinary imaging market which is growing at a compound annual growth rate of 6.7% and is estimated to be worth £2.2bn in the UK alone.  In veterinary services, critical decisions are often made by vets out in the field.  Bleepa can liberate vets from the current lengthy and physical process of having to acquire an X-ray at a client's premises, then drive back to their practice to upload the image onto a computer and share it with a specialist for advice. 

 

CVS Group had piloted the Bleepa solution for eight months prior to appointing Bleepa as its clinical communications platform for its equine division, leading to the development of the Bleepa Box technology. Bleepa is currently being rolled out across 20 of CVS Group's equine practices, from which we hope to expand. We are now looking for opportunities with other veterinary clients in the UK and internationally.

 

International markets

Bleepa's selection as a World Innovation Summit for Health (WISH) 2020 Innovation Booster and to participate in the Digitalhealth.London 2020 Accelerator Programme provided further welcome endorsements. Participation as an Innovation Booster at WISH 2020, an event to showcase our technology to the Middle Eastern market, provided an opportunity for the Company to exhibit Bleepa to some of the world's leading health experts, health ministers, decision-makers, and investors.

 

India

India represents a huge opportunity for the Company and its technology. Bleepa provides the perfect digital infrastructure for image sharing across regions and, in combination with the Bleepa Box, will enable the meaningful expansion of clinical services to rural areas within India.

 

Bleepa was selected by Healthcare UK, part of the Department for International Trade (DIT), to join a virtual healthcare mission to India, providing further recognition of its functionality and potential market reach.  India is key to our international expansion and, following the successful event, we have now employed a specialist based in India to aid our entry into this large and untapped market.

 

Post-period, we announced a new partnership with Qure.ai, an AI solution provider developing decision support tools for medical imaging professionals, with an initial focus on enabling TB screening services to rural locations. We are also looking at how Bleepa's CareLocker can be used to create care records for patients coming through the system that will enable the creation of citizen health records in line with the National Digital Health Mission (NDHM) of the Indian Government, a programme that could see CareLocker become the trusted data store of a number of Indian citizens, with Bleepa as the preferred clinical interface into this data store.

 

 

 

Private partnership

Our focus to date has been on developing partnerships with private companies to establish either a reseller or co-seller agreement in order to help us sell the product more cost effectively than through direct sales. We are also actively pursuing direct contracts with private healthcare providers with the view of using Bleepa to support their clinical communication to drive pathway efficiencies and to support the curation of their clinical records through CareLocker.

 

Military

Bleepa and Bleepa Box have clear applications in remote image acquisition and clinical communication in a military setting. The Company is exploring a number of channels to military customers who we believe will greatly benefit from the secure platform that our technology provides.

 

Legacy products

 

As previously reported TexRAD sales have continued to decline in line with expectations, and in line with our strategy we have reduced the resourcing of this product to a minimum.  Cadran continues to be employed in current contracts across a number of trusts, however, with the focus turning towards cloud-based services, we anticipate a slowdown in these contracts in the future.  Bleepa and CareLocker have evolved from these high-quality legacy products and as business continues to move to more cloud-based systems, we are confident that Bleepa and CareLocker offer pioneering digital solutions.

 

FINANCIAL REVIEW

 

2021

2020

 

£ million

£ million

Revenue

0.29

0.45

Operating expenses

(2.32)

(1.86)

Operating loss

(2.06)

(1.42)

 

 

 

Cash outflows from operating activities

(2.03)

(0.79)

Cash outflows from investing activities

(1.44)

(0.88)

Cash & cash equivalents end of period

2.22

0.73

 

 

 

Intangible assets

2.68

1.30

Contract liabilities (income in advance)

0.12

0.30

Net assets

5.27

1.77

 

 

 

 

Revenue for the year ended 31 May 2021 reduced 36% to £0.29 million (2020: £0.45 million) due to the planned reduction of TexRAD and Cadran sales, as the Company diverted resources towards Bleepa. First Bleepa revenues were achieved in the final quarter of the financial year, and the focus on Bleepa versus legacy products has also seen the average contract value increase, a trend which is expected to continue as further Bleepa sales are made. 

 

Operating expenses increased 25% to £2.32 million (2020: £1.86 million), primarily due to increased headcount to drive the development and deployment of Bleepa, and to pursue new opportunities. Operating loss increased to £2.06 million (2020: £1.42 million).

 

Cash outflows from operating activities of £2.03 million (2020: £0.79 million) primarily represent customer receipts, staff costs and supplier payments. The increase in cash outflows from operating activities is due to the increase in operating loss, working capital movements, and a R&D tax credit refund of £0.33 million being received post-period in June 2021, whereas the prior financial year benefitted from a R&D tax credit refund of £0.25 million being received during the year. Cash outflows from investing activities increased 63% to £1.44 million (2020: £0.88 million) and is primarily composed of software development expenditures with Future Processing, which increased in line with our focus on product enhancement linked to market opportunities. The Group's cash position as at 31 May 2021 was £2.22 million (31 May 2020: 0.73 million), an increase of £1.49 million over the prior year due to proceeds from the fundraise in July 2020.

 

Intangible assets increased by £1.38 million to £2.68 million (2020: £1.30 million), primarily representing the capitalised software development expenditures. Contract liabilities (or deferred income) was £0.12 million (2020: £0.30 million) and represents income received in advance as at 31 May 2021, which will be released to the income statement as revenue over the forthcoming financial year.  Net assets increased to £5.27 million (2020: £1.77 million) as at 31 May 2021.

 

Strengthening the Board

In July 2020, Philipp Prince joined the Board as an independent non-executive director, bringing strong capital markets and PLC experience to the Company. Given his background, he further strengthens the Board's ability to deliver a strong growth platform for Bleepa.

 

We are a dynamic and innovative company, and I would like to thank the employees for their commitment and hard work, resulting in new contacts, product upgrades; to the Board for the consistent guidance and to our shareholders for the continued support in creating a strong and bright future for Feedback.

 

Outlook

The Company made significant progress during the period - increasing both Bleepa's functionality and routes to market laying the foundations to deliver strategic commercial opportunities - and, importantly, generating initial revenues for the platform, highlighting commercial viability within the UK and beyond. 

 

We are well positioned to address a number of key growth opportunities within both our domestic and international markets, as outlined in this report. Our technology is perfectly aligned with the stated objectives of key government initiatives such as the CDC programme and re-launched NHSx Clinical Communications Procurement Framework. The addition of Bleepa Box and CareLocker have assisted in repositioning the Company into the clinical communications and medical data storage space enabling us to offer a comprehensive digital solution to frontline clinical needs that is scalable, secure and cost effective. Feedback enters 2022 with a strong pipeline of opportunities in multiple market segments and a competitive edge, from both a technological and regulatory perspective, that will make it difficult for competitors to follow and looks forward to a strong year ahead and to building upon the huge progress made to date.

 

 

 

Dr Tom Oakley

Chief Executive Officer

01 November 2021

 

 

 

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 MAY 2021

 

 

 

 

 

  Note

 

 2021

  £

 

 2020

  £

Revenue

 

 

4

287,415

449,983

Cost of sales

 

 

 

(25,024)

(1,866)

 

 

 

 

 

 

Gross profit

 

 

 

262,391

448,117

Other operating expenses

 

 

5

(2,322,518)

(1,863,180)

 

 

 

 

 

 

Operating loss

 

 

6

(2,060,127)

(1,415,063)

Net finance income

 

 

7

281

606

 

 

 

 

 

 

Loss before taxation

 

 

 

(2,059,846)

(1,414,457)

Tax credit

 

 

9

440,333

327,000

 

 

 

 

 

 

Loss after tax attributable to the equity shareholders of the Company

 

 

 

(1,619,513)

(1,087,457)

 

 

 

 

 

 

Total comprehensive expense for the year

 

 

 

 

(1,619,513)

 

(1,087,457)

 

 

 

 

 

 

Loss per share (pence)

 

 

 

 

 

Basic and diluted

 

 

11

(0.16)

(0.22)

 

 

 

 

 

 

 

 

 

 

 

 

       

 

 

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 MAY 2021

 

GROUP

Share Capital

Share Premium

Capital Reserve

Retained Earnings

Translation Reserve

Share option Reserve

Total

 

£

£

£

£

£

£

£

At 31 May 2019

933,209

3,776,854

299,900

(4,115,649)

(209,996)

261,300

945,618

 

 

 

 

 

 

 

 

Total comprehensive loss for the year

-

-

-

(1,087,457)

 

 

(1,087,457)

 

 

 

 

 

 

 

 

New shares issued

416,667

1,583,333

-

-

-

-

2,000,000

Costs of new shares issued

-

(138,905)

-

-

-

-

(138,905)

Share options lapsed

-

-

-

92,141

-

(92,141)

-

Share-based payments

-

-

-

-

-

50,000

50,000

Total transactions with owners

416,667

1,444,428

-

92,141

-

(42,141)

1,911,095

 

 

 

 

 

 

 

 

At 31 May 2020

1,349,876

5,221,282

299,900

(5,110,965)

(209,996)

219,159

1,769,256

 

 

 

 

 

 

 

 

Total comprehensive loss for the year

-

-

-

(1,619,513)

-

-

(1,619,513)

 

 

 

 

 

 

 

 

New Shares issue

1,317,454

3,952,363

-

-

-

-

5,269,817

Costs of new shares issued

-

(313,566)

-

-

-

-

(313,566)

Share-based payments

-

-

-

-

-

162,615

162,615

Total transactions with owners

1,317,454

3,638,797

-

-

-

162,615

5,118,866

 

 

 

 

 

 

 

 

At 31 May 2021

2,667,330

8,860,079

299,900

(6,730,478)

(209,996)

381,774

5,268,609

 

COMPANY

 

 

 

Share Capital

 

Share Premium

 

Retained Earnings

 

Share option Reserve

 

Total

 

 

 

£

£

£

£

£

At 31 May 2019

 

 

933,209

3,776,854

(4,515,814)

223,159

417,408

 

 

 

 

 

 

 

 

Total comprehensive loss for the year

 

 

-

-

(1,956,671)

-

(1,956,671)

 

 

 

 

 

 

 

 

New shares issued

 

 

416,667

1,583,333

-

-

2,000,000

Costs of new shares issued

 

 

-

(138,905)

-

-

(138,905)

Share options lapsed

 

 

 

 

54,000

(54,000)

-

Share-based payments

 

 

 

-

 

50,000

50,000

Total transactions with owners

 

 

416,667

1,444,428

54,000

(4,000)

1,911,095

 

 

 

 

 

 

 

 

At 31 May 2020

 

 

1,349,876

5,221,282

(6,418,485)

219,159

371,832

 

 

 

 

 

 

 

 

Total comprehensive loss for the year

 

 

-

-

(437,373)

-

(437,373)

 

 

 

 

 

 

 

 

New shares issued

 

 

1,317,454

3,952,363

-

-

5,269,817

Costs of new shares issued

 

 

-

(313,566)

-

-

(313,566)

Share-based payments

 

 

-

 

 

162,615

162,615

Total transactions with owners

 

 

1,317,454

3,638,797

-

162,615

5,118,866

 

 

 

 

 

 

 

 

At 31 May 2021

 

 

2,667,330

8,860,079

(6,855,858)

381,774

5,053,325

 

 

 

CONSOLIDATED BALANCE SHEET

FOR THE YEAR ENDED 31 MAY 2021

 

 

 

 

 

2021

2020

 

Notes

 

£

£

Assets

 

 

 

 

Non-current assets

 

 

 

 

Property, plant and equipment

13

 

13,773

11,830

Intangible assets

14

 

2,681,641

1,296,784

 

 

 

2,695,414

1,308,614

 

 

 

 

 

Current assets

 

 

 

 

Trade and other receivables

15

 

138,042

129,877

Corporation tax receivable

 

 

767,120

326,787

Cash and cash equivalents

 

 

2,220,862

732,650

 

 

 

3,126,024

1,189,314

 

 

 

 

 

Total assets

 

 

5,821,438

2,497,928

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

Capital and reserves attributable to the Company's equity shareholders

 

 

 

 

Called up share capital

18

 

2,667,330

1,349,876

Share premium account

18

 

8,860,079

5,221,282

Capital reserve

18

 

299,900

299,900

Translation reserve

18

 

(209,996)

(209,996)

Share option expense reserve

18

 

381,774

219,159

Retained earnings

18

 

(6,730,478)

(5,110,965)

Total equity

 

 

5,268,609

1,769,256

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Trade and other payables

16

 

548,836

718,788

 

 

 

548,836

718,788

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

Contract liabilities

16

 

3,993

9,884

 

 

 

3,993

9,884

 

 

 

 

 

Total liabilities

 

 

552,829

728,672

 

 

 

 

 

Total equity and liabilities

 

 

5,821,438

2,497,928

 

The financial statements were approved and authorised for issue by the Board of Directors on 01 November 2021 and were signed below on its behalf by:

 

 

Prof Rory Shaw

Chairman

 

 

COMPANY BALANCE SHEET

FOR THE YEAR ENDED 31 MAY 2021

 

 

 

 

2021

2020

 

Notes

 

£

£

Assets

 

 

 

 

Non-current assets

 

 

 

 

Investments

12

 

-

-

 

 

 

-

-

 

 

 

 

 

Current assets

 

 

 

 

Other receivables

15

 

99,906

27,538

Loans to subsidiary companies

 

 

2,998,240

-

Cash and cash equivalents

 

 

2,020,688

  473,809

 

 

 

5,118,834

501,347

 

 

 

 

 

Total assets

 

 

5,118,834

501,347

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

Capital and reserves attributable to the Company's equity shareholders

 

 

 

 

 

 

Called up share capital

18

 

2,667,330

1,349,876

Share premium account

18

 

8,860,079

  5,221,282

Share option expense reserve

18

 

381,774

219,159

Retained earnings

18

 

(6,855,858)

  (6,418,485)

Total equity

 

 

5,053,325

371,832

 

 

 

 

 

Liabilities

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

16

 

65,509

129,515

Total liabilities

 

 

65,509

129,515

 

 

 

 

 

Total equity and liabilities

 

 

5,118,834

501,347

 

 

The Company's loss for the year was £437,373 (2020: £1,906,671)

The financial statements were approved and authorised for issue by the Board of Directors on 01 November 2021 and were signed below on its behalf by:

 

 

Prof R Shaw

Chairman

 

 

CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 MAY 2021

 

 

2021

2020

 

£

£

 

 

 

Cash flows from operating activities

 

 

Loss before tax

(2,059,846)

(1,414,457)

Adjustments for:

 

 

 

 

 

Net finance income

(281)

(606)

Depreciation and amortisation

48,755

30,277

Share based payment expense

162,615

50,000

Decrease/(Increase) in trade receivables

72,614

103,063

Decrease in other receivables

(80,779)

11,921

Increase in trade payables

77,915

88,886

Increase/(Decrease) in other payables

(253,759)

95,258

Corporation tax received

-

249,011

Total adjustments

27,080

627,810

 

 

 

Net cash used in operating activities

(2,032,766)

(786,647)

 

 

 

Cash flows from investing activities

 

 

Purchase of tangible fixed assets

(16,083)

(7,189)

Purchase of intangible assets

(1,419,472)

(875,950)

Net finance income received

281

606

 

 

 

Net cash used in investing activities

(1,435,274)

(882,533)

 

 

 

Cash flows from financing activities

 

 

Net proceeds of share issue

4,956,252

1,861,095

 

 

 

Net cash generated from financing activities

4,956,252

1,861,095

 

 

 

Net increase/(decrease) in cash and cash equivalents

1,488,212

191,915

Cash and cash equivalents at beginning of year

732,650

540,735

 

 

 

Cash and cash equivalents at end of year

2,220,862

732,650

 

 

 

 

COMPANY CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 MAY 2021

 

 

2021

2020

 

£

£

 

 

 

Cash flows from operating activities

 

 

Loss before tax

(437,373)

(1,906,671)

Adjustments for:

 

 

Net finance income

(281)

(606)

Provision against intercompany receivable

59,913

1,267,998

Share based payment expense

102,702

(8,000)

Increase in other receivables

(72,367)

(1,266,405)

Decrease in trade payables

(19,709)

5,619

Decrease/ (Increase) in other payables

(44,299)

59,476

Total adjustments

25,959

58,082

 

 

 

Net cash used in operating activities

(411,414)

(1,840,589)

 

 

 

Cash flows from investing activities

 

 

 

 

 

Loans to subsidiary companies

(2,998,240)

-

Net finance income

281

606

Net cash generated from investing activities

(2,997,959)

606

 

 

 

Cash flows from financing activities

 

 

 

 

 

Net proceeds of share issue

4,956,252

1,861,095

Net cash generated from financing activities

4,956,252

1,861,095

 

 

 

Net increase in cash and cash equivalents

1,546,879

21,112

Cash and cash equivalents at beginning of year

473,809

452,697

 

 

 

Cash and cash equivalents at end of year

2,020,688

473,809

 

 

 

 

 

 

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MAY 2021

 

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 Health Foundry, Canterbury House, 1 Royal Street, London SE1 7LL.

 

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 01 November 2021.

 

The information set out in this announcement does not constitute the Company's full statutory accounts for the year ended 31 May 2021. Statutory accounts for 2021 will be delivered to the Registrar of Companies in due course. The auditor has reported on those accounts; their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

 

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:

 

IAS 1 amendment - Presentation of Financial Statements - Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)

IAS 8 amendment - Accounting Policies, Changes in Accounting Estimates and Errors - Definition of Accounting Estimates

IAS 12 amended - Income Taxes - Deferred Tax related to Assets and Liabilities arising from a Single Transaction.

IAS 16 amended - Property, Plant and Equipment - Proceeds before Intended Use

IAS 37 amended - Provisions, Contingent Liabilities and Contingent Assets - Onerous Contracts-Cost of Fulfilling a Contract

IFRS 3 amended - Business Combinations - Updating a Reference to the Conceptual Framework

 

3.  Significant accounting policies

 

(a)  Basis of preparation

These financial statements have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006. 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 2021 and 2020 using the acquisition method.

 

The financial statements of subsidiaries are prepared for the same reporting year as the parent company, using consistent accounting policies.  All inter-company balances and transactions, including unrealised profits arising from them, are eliminated.  Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. Investments in subsidiary companies are held at cost less impairment.

 

(c)  Going Concern

The Group held £2,220,862 of cash and cash equivalents at 31st May 2021. However, it incurred a net loss of £1,619,513 and had a net cash outflow of £2,032,766 from operating activities for the year, which are matters which may indicate a material uncertainty about the Group's ability to continue as a going concern. However, on 2 November 2021, the Company announced an accelerated bookbuild to raise a minimum of £10 million (before expenses) with closing of the placing expected on the same day. Subject to closing, the placing is conditional on shareholder approval at the forthcoming Annual General Meeting. Prior to announcement, having made relevant enquiries, the Directors were satisfied that the Company's brokers had received sufficient non-binding indications for the placing to provide the Company with adequate cash resources for at least the next twelve months to November 2022. The Directors believe that all resolutions required to execute the placing will be successfully approved at the annual general meeting as a matter of course, with proceeds to be received shortly thereafter. The Directors updated and reviewed the Group's business plan and cash flow forecasts on the basis that the placing is approved at the annual general meeting. These cash resources will be used to provide working capital, enable continued product development and international expansion.  If further resources are required, the directors consider, that although future equity fundraising can never be guaranteed, the group's recent history of successful fundraising means it likely that the group will be able to raise further finance through future equity issues. 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 years

Customer relationships

4 years

Software development

5 years

 

 

Intellectual Property primarily relates to patent and trademark application costs. Software development costs capitalised in the year relate to products and product improvements which are yet to be ready for use. They are not yet amortised.

 

(e) Valuation of Investments

Investments held as non-current assets are stated at cost less provision for impairment.

 

(f)  Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. When used, bank overdrafts are shown within borrowings in current liabilities on the balance sheet.

 

(g)  Goodwill

Business combinations on or after 1 April 2006 are accounted for under IFRS 3 using the acquisition method. Any excess of the cost of business combinations over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities is recognised in the balance sheet as goodwill and is not amortised.

 

After initial recognition, goodwill is not amortised but is stated at cost less accumulated impairment loss, with the carrying value being reviewed for impairment, at least annually and whenever events or changes in circumstance indicate that the carrying value may be impaired.

 

For the purposes of impairment testing, goodwill is allocated to the related cash generating units monitored by management. Where the recoverable amount of the cash generating unit is less than its carrying amount, including goodwill, an impairment loss is recognised in the statement of comprehensive income.

 

(h) Property, plant and equipment

All property, plant and equipment is stated at historical cost less depreciation. Depreciation on other assets is provided on cost or valuation less estimated residual value in equal annual instalments over the estimated lives of the assets. The rates of depreciation are as follows:

 

Computer and office equipment

10 - 50% p.a.

 

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the income statement.

 

(i)  Foreign currency

Transactions denominated in foreign currencies are translated into sterling at the rates ruling at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the rates ruling at that date. These translation differences are dealt with in the income statement.

 

(j)  Revenue recognition

Sales transactions include software installation, software licenses, scientific and software support and consultancy.  Revenue is measured at the fair value of the contractually agreed consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of VAT. The Group recognises revenue when the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the entity; and when specific criteria have been met for each of the company's activities, as described below. The sales invoice is raised when the customer's purchase order is received, and the debt is typically payable within 30-60 days of the invoice date. In practice the debt is paid when the software installation has been completed. There are no obligations for returns, refunds or warranties. 

 

Revenue relating to software consultancy and similar services is recognised as the services are performed and completed. The invoice is recognised on a linear basis over the duration of the contract.

 

Revenue relating to the sale of software licences 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.  There are no explicit performance obligations as such but a clear understanding 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 company sector (public vs private). When a trade receivable is determined to have no reasonable expectation of recovery it is written off, firstly against any expected credit loss allowance available and then to the income statement. For trade receivables, which are reported net, such provisions are recorded in a separate provision account with the loss being recognised in the consolidated statement of comprehensive income Subsequent recoveries of amounts previously provided for or written off are credited to the income statement.

 

Cash and cash equivalents 

Cash and cash equivalents comprise cash at hand and deposits with maturities of three months or less.

 

Financial liabilities

The Group's financial liabilities consist of trade payables and other financial liabilities. Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as FVTPL if it is held-for trading, it is a derivative or it is designated as such on initial recognition. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense is recognised in profit or loss.

 

(n)  Employee share options and warrants

The Group has applied the requirements of IFRS 2 Share-based Payment.

 

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. 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.

 

· Revenue recognition-revenue on the sale of TexRAD software and provision of related scientific support services is recognised over the expected duration of the group's involvement in customer's projects as the group's staff contribute significant support, analysis and input to those customers using TexRAD software for research purposes. Judgement based on past experience is used to determine the expected duration of involvement over which income should be deferred and recognised however the duration of the group's involvement may vary from expectations. 

 

4.  Segmental reporting

 

The Directors have determined that the operating segments based on the management reports which are used to make strategic decisions are medical imaging and head office. The trading activities of the Company solely relate to Medical Imaging and the Head Office covers the costs of running the parent company, Feedback PLC.

 

 

 

 

Year ended 31 May 2021

 

Medical Imaging

Head Office

Total

 

 

£

£

£

Revenue

 

 

 

 

External

 

287,415

-

287,415

Expenditure

 

 

 

 

External (excluding depreciation and amortisation)

(1,546,183)

(752,323)

(2,298,506)

Depreciation and amortisation

(48,755)

-

(48,755)

Loss before tax

 

(1,307,523)

(752,323)

(2,059,846)

 

 

 

 

 

Balance sheet

 

 

 

 

External Assets

 

3,700,845

2,120,593

5,821,438

External Liabilities

 

(487,308)

(65,521)

(552,829)

 

 

3,213,537

2,055,072

5,268,609

 

 

 

 

 

Capital expenditure (all located in the UK)

(1,435,554)

-

(1,435,554)

 

 

 

 

 

 

 

 

 

 

Year ended 31 May 2020

 

 

Medical Imaging

Head Office

Total

 

 

£

£

£

Revenue

 

 

 

 

External

 

449,983

-

449,983

Expenditure

 

 

 

 

External

 

(1,233,767)

(630,673)

(1,864,440)

 

 

 

 

 

Loss before tax

 

(783,784)

(630,673)

(1,414,457)

 

 

 

 

 

Balance sheet

 

 

 

 

External Assets

 

1,996,581

501,347

2,497,928

External Liabilities

 

(599,157)

(129,515)

(728,672)

 

 

1,397,424

371,832

1,769,256

 

 

 

 

 

Capital expenditure (all located in the UK)

 

  883,139

-

883,139

 

 

 

 

 

      

 

Reported segments' assets are reconciled to total assets as follows:

 

 

External revenue by

Non-current assets by

Total liabilities

 

location of customer

location of assets

location of assets

 

2021

2020

2021

2020

2021

2020

 

£

£

£

£

£

£

 

 

 

 

 

 

 

United Kingdom

217,394

229,073

2,695,414

1,308,614

  552,829

  728,672

Europe

5,364

  57,073

-

-

 -

 -

Rest of the world

64,657

163,837

-

-

 -

 -

Total

287,415

449,983

2,695,414

1,308,614

552,829

  728,672

 

 

 

 

 

 

 

         

 

£227,000 of revenue recognised in the current year was recorded in contract liabilities in the prior year.

 

Major customers

 

During the year ended 31 May 2021, the Group generated £153,000 (2020: £172,000) of revenue from one customer in the United Kingdom, which is equal to 53% (2020: 35%) of total Group revenues in the year.

 

 

 

 

 

 

5.  Other operating expenses

 

 

 

 

 

2021

2020

 

 

 

 

£

£

Administrative costs:

 

 

 

 

 

Employment and other costs

 

 

 

2,273,763

1,832,987

Amortisation and depreciation costs

 

 

 

48,755

30,193

 

 

 

 

2,322,518

1,863,180

 

 

 

 

 

 

 

6.  Operating loss

 

 

 

 

 

2021

2020

 

 

 

 

£

£

This is stated after charging

 

 

 

 

 

Depreciation and amortisation

 

 

 

 

 

  Owned assets

 

 

 

14,140

1,530

  Amortisation of intangible assets

 

 

 

34,615

28,663

Provision for doubtful debts

 

 

 

266

28,000

Foreign exchange differences

 

 

 

24,573

14,646

Auditors' remuneration

 

 

 

 

 

  Audit of parent company and group financial statements

10,000

10,000

  Audit of subsidiaries

 

 

 

6,800

7,000

 

 

 

 

 

 

       

 

7.  Net finance income

 

 

 

 

 

2021

2020

 

 

 

 

£

£

Interest received

 

 

 

281

606

 

 

 

 

281

606

 

8.  Directors and employees

 

 

 

 

 

 

2021

2020

 

 

 

 

 

Average

Average

Number of employees

 

 

 

 

 

 

Selling and distribution

 

 

 

 

1

2

Administration

 

 

 

 

11

4

Research and development

 

 

 

 

6

6

 

 

 

 

 

18

12

 

 

 

 

 

 

2021

 

2020

 

 

 

 

 

£

£

Staff costs

 

 

 

 

 

 

Wages and salaries

 

 

 

 

1,033,975

882,197

Social security costs

 

 

 

 

121,736

95,085

Payments to defined contribution pension scheme

 

 

108,796

81,499

Share based payment expense

 

 

 

 

162,615

50,000

 

 

 

 

 

1,427,122

1,108,781

 

The value of all elements of remuneration received by each Director in the year was as follows:

 

 

 

 

 

 

 

 

 

 

Year ended 31 May 2021:

Salary

 

Fees

 

Pension

 

Benefits in Kind

Total

 

£

£

£

£

£

Executive Directors

 

 

 

 

 

T Oakley (including £30,000 performance bonus)

168,334

-

-

-

168,334

L Melvin

59,280

-

6,672

825

66,777

 

 

 

 

 

 

Non-Executive Directors 

R Shaw

-

5,000

-

-

5,000

T Irish(1)

-

25,000

-

-

25,000

S Sturge

-

-

-

-

-

A Denning

25,000

-

-

-

25,000

P Prince (appointed 15 July 2020)(2)

-

21,875

-

-

21,875

Total

252,614

51,875

6,672

825

311,986

 

1.  T Irish was paid consultancy fees through an agreement with Pembrokeshire Retreats Limited.

2.  P Prince was paid consultancy fees through an agreement with NAM Financial.

 

During the year, retirement benefits under money purchase pension schemes were accruing to 1 director (2020: 1)

 

The value of all elements of remuneration received by each Director in the prior year was as follows:

 

 

 

 

 

 

 

Year ended 31 May 2020

Salary

 

Fees

 

Pension

 

Benefits in Kind

Total

 

£

£

£

£

£

Executive Directors

 

 

 

 

 

T Oakley (including £40,000 performance bonus)

170,000

-

-

-

170,000

L Melvin

59,240

-

6,671

711

66,622

A Riddell (1 June 2019 - 29 August 2019)(1) 

-

 

8,500

-

-

8,500

Non-Executive Directors 

R Shaw (appointed 29 August 2019) 

 

30,000

 

-

 

-

 

-

 

30,000

T Irish(2)

-

25,000

-

-

25,000

S Sturge

-

-

-

-

-

A Riddell (29 August - 18 November 2019)(1) 

-

10,168

-

-

10,168

A Denning (appointed 3 February 2020)

 

8,333

-

-

8,333

Total

259,240

52,001

6,671

  711

318,623

 

1.  A Riddell was paid consultancy fees through an agreement with AJR & Associates limited. 

2.  T Irish was paid consultancy fees through an agreement with Pembrokeshire Retreats Limited. 

 

During the year, retirement benefits under money purchase pension schemes were accruing to 1 director (2019: 2)

 

The following share options were outstanding as at 31 May 2021 for the Directors. Further information is provided in Note 18.

 

 

2021

2020

 

Number

Number

 

 

 

R Shaw

7,800,000

7,800,000

L Melvin

4,300,000

4,300,000

T. Oakley

22,830,829

9,332,081

S Sturge 

2,500,000

2.500,000

 

 

 

 

9.  Taxation on loss

 

 

 

 

2021

2020

 

 

 

£

£

(a)

The tax credit for the year:

 

 

 

 

UK Corporation tax

 

(439,589)

(327,000)

 

 

 

 

 

 

 

 

 

 

 

Current tax credit

 

(439,589)

(327,000)

 

Adjustments in respect of prior periods

 

(744)

-

 

 

 

(440,333)

(327,000)

 

 

 

 

 

(b)

Tax reconciliation

 

 

 

 

Loss before tax

 

(2,059,846)

(1,414,457)

 

 

 

 

 

 

Loss at the standard rate of corporation tax in the UK of 19% (2018 - 19%)

 

 

(391,371)

 

(268,747)

 

Effects of:

 

 

 

 

Fixed asset differences

 

(5,872)

-

 

Expenses non-deductible for tax purposes

 

37,558

8,916

 

Other permanent differences

 

118

-

 

Additional deduction for R&D expenditure

 

(325,572)

(242,737)

 

Surrender of tax losses for R & D tax credit refund

 

136,424

102,458

 

Adjustments to tax charge in respect of previous periods

 

(744)

-

 

Deferred tax not recognised

 

332,069

128,605

 

Adjusting opening and closing deferred tax to average rate

 

(222,943)

(55,495)

 

Tax charge for the year

 

(440,333)

(327,000)

 

 

 

 

 

 

 

 

 

 

(c)

Factors which may affect future tax charges

 

 

 

 

In view of the tax losses carried forward there is a deferred tax amount of approximately £928,928 (2020: £596,000) which has not been recognised in these Financial Statements. This contingent asset will be realised when the Group makes sufficient taxable profits in the relevant company.

 

 

 

 

 

(d)

Deferred tax - company

 

 

 

 

In view of the tax losses carried forward there is a deferred tax amount of approximately £838,906 (2020: £584,000) which has not been recognised in these Financial Statements. This contingent asset will be realised when the Company makes sufficient taxable profits.

      

 

10.         Results of Feedback Plc

 

As permitted by Section 408 of the Companies Act 2006, the income and expenditure account of the parent company is not presented as part of these financial statements. The Company's loss for the financial year is £437,373 (2020: £1,906,671)

 

11.         Loss per share

 

Basic loss per share is calculated by reference to the loss on ordinary activities after taxation of £1,619,513 (2020: £1,087,457) and on the weighted average of 1,023,499,123 (2020: 498,854,027) shares in issue.

 

 

 

2021

£

2020

£

Net loss attributable to ordinary equity holders

 

(1,619,513)

(1,087,457)

 

 

 

 

 

 

2021

2020

Weighted average number of ordinary shares for basic earnings per share

 

1,023,499,123

498,854,027

Effect of dilution:

 

 

 

Share Options

 

-

-

  Warrants

 

-

-

Weighted average number of ordinary shares adjusted for the effect of dilution

 

1,023,499,123

498,854,027

 

 

 

 

Loss per share (pence)

 

 

 

Basic

 

(0.16)

(0.22)

Diluted

 

(0.16)

(0.22)

 

There is no dilutive effect of the share options and warrants as the dilution would be negative.

 

12.        Investments

 

 

Share in Group undertakings

Shares in  joint venture

Total

 

£

£

£

Company

 

 

 

Cost

 

 

 

 

 

 

 

At 31 May 2019

2,334,455

1,000

2,335,455

Addition (see note below)

46,000

-

46,000

At 31 May 2020

2,380,455

1,000

2,381,455

Addition (see note below)

59,913

-

59,913

 

 

 

 

As at 31 May 2021

2,440,368

1,000

2,441,368

 

 

 

 

Provision for impairment

 

 

 

 

 

 

 

At 31 May 2019

2,334,455

1,000

2,334,455

 

Additional impairment included in operating expenses (see note below)

 

46,000

 

 

46,000

 

 

 

 

At 31 May 2020

2,380,455

1,000

2,381,455

 

 

 

 

Additional impairment included in operating expenses (see note below)

59,913

-

59,913

At 31 May 2021

2,440,368

1,000

2,441,368

 

 

 

 

Net Book Value

 

 

 

At 31 May 2021

-

-

-

 

At 31 May 2020

 

-

 

-

 

-

 

All of the above investments are unlisted

 

The directors have made full provision against the cost of investment in the subsidiaries due to the net liabilities shown in the subsidiary financial statements. The additions in the current and prior year are related to options in Feedback Medical Limited which would be satisfied with Feedback Plc shares if/when they are exercised

 

Particulars of principal subsidiary companies during the year, all the shares of which being beneficially held by Feedback Plc, were as follows:

 

 

Company

Activity

Proportion of Shares held

 

 

 

 

Feedback Black Box Company Limited

Dormant

England

 

100%

Ordinary £1

 

 

 

 

 

 

 

 

Brickshield Limited

Dormant

England

100%
Ordinary £1

 

 

 

 

Bleepa Limited

Dormant

England

100%
Ordinary £2

Feedback Medical Limited

Medical Imaging

England

100%

A Ordinary £1

 

 

 

100% B Ordinary 1p

 

 

 

 

TexRAD Limited

Medical Imaging

England

100%

Ordinary 1p

 

TexRAD Limited is owned 100% by virtue of a direct holding by Feedback plc of 91% and an indirect holding via Feedback Medical Ltd of 9%.

 

All the subsidiary companies have been included in these consolidated financial statements. Each subsidiary's registered office is Health Foundry, Canterbury House, 1 Royal Street, London SE1 7LL.

 

13.        Property, plant and equipment

 

 

 

Computer

 

 

 

Equipment

Total

Group

 

£

£

 

 

 

 

Cost

 

 

 

At 31 May 2019

 

23,233

23,233

Additions

 

  7,189

7,189

 

 

 

 

At 31 May 2020

 

30,422

30,422

Additions

 

16,082

16,083

 

 

 

 

As 31 May 2021

 

46,504

46,505

 

 

 

 

Depreciation

 

 

 

At 31 May 2019

 

17,062

17,062

 

 

 

 

Charge for the year

 

1,530

1,530

 

 

 

 

At 31 May 2020

 

18,592

18,592

 

 

 

 

Charge for the year

 

14,140

14,140

 

 

 

 

At 31 May 2021

 

32,732

32,732

 

 

 

 

 

Net Book Value

 

 

 

At 31 May 2021

 

13,773

13,773

 

 

 

 

At 31 May 2020

 

11,830

11,830

 

14.        Intangible assets

 

 

Software

development

Customer relationships

Intellectual Property

Goodwill

Total

Group

£

£

£

£

£

Cost

 

 

 

 

 

 

 

 

 

 

 

At 31 May 2019

1,038,070

100,000

154,420

271,415

1,563,905

Additions

865,035

-

10,915

-

875,950

Re-class

(22,000)

-

22,000

-

-

At 31 May 2020

1,881,105

100,000

187,335

  271,415

2,439,855

Additions

1,419,472

-

-

-

1,419,472

Re-class

(30,904)

-

30,904

-

 

At 31 May 2021

3,269,673

100,000

218,239

271,415

3,859,327

 

 

 

 

 

 

Amortisation

 

 

 

 

 

At 31 May 2019

645,516

100,000

97,477

271,415

1,114,408

 

 

Impairment charge

-

-

-

-

-

Amortisation charge for year

-

-

28,663

-

28,663

At 31 May 2020

645,516

100,000

126,140

271,415

1,143,071

Impairment charge

-

-

-

-

-

Amortisation charge for year

-

-

34,615

-

34,615

 

 

 

 

 

 

At 31 May 2021

645,516

100,000

160,755

271,415

1,177,686

 

 

 

 

 

 

Net Book Value

 

 

 

 

 

At 31 May 2021

2,624,157

-

57,484

-

2,681,641

 

 

 

 

 

 

At 31 May 2020

1,235,589

-

61,195

-

1,296,784

 

 

 

 

 

 

 

15.        Trade and other receivables

 

 

Group

Company

 

2021

2020

2021

2020

 

£

£

£

£

Amounts falling due within one year

 

 

 

 

Trade receivables

26,946

99,560

-

-

Other receivables

65,263

7,648

65,209

7,648

Prepayments

45,833

22,669

34,697

19,890

 

138,042

129,877

99,906

27,538

 

16.       Trade and other payables

 

 

Group

Company

 

2021

2020

2021

2020

 

£

£

£

£

Amounts falling due within one year

 

 

 

 

Trade payables

197,340

119,424

491

20,227

Other payables

39,575

8,490

-

6,672

Other taxes and social security

22,645

165,667

13,701

52,082

Accruals

174,151

135,101

51,317

50,534

Contract liabilities

115,125

290,107

-

-

 

548,836

718,789

65,509

129,515

 

Amounts falling due after one year

 

 

 

 

Contract liabilities

3,993

9,884

-

-

 

 

 

 

 

 

Neither the Group or the Company have any borrowings and so there are no changes in liabilities arising from financing activities. 

 

17.      Financial instruments

 

The Group's overall risk management programme seeks to minimise potential adverse effects on the Group's financial performance.

The Group's financial instruments comprise cash and cash equivalents and various items such as trade payables and receivables that arise directly from its operations. The Group is exposed through its operations to the following financial risks:

 

· Credit risk

· Foreign currency risk

· Liquidity risk

· Cash flow interest rate risk

· Reliance on one major customer

 

Fair value Hierarchy

 

The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

 

· Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities

· Level 2: other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly

· Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data

 

The share options and warrants issued by the group during the current year and prior years were valued under level three above as noted in note 18 below.

 

In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments.  This note describes the Group's objectives, policies and processes for managing those risks. Further quantitative information in respect of these risks is presented throughout these financial statements.

 

There have been no substantive changes in the Group's exposure to financial instrument risks and consequently the objectives, policies and processes are unchanged from the previous period.

 

The Board has overall responsibility for the determination of the Group's risk management policies. The objective of the Board is to set policies that seek to reduce the risk as far as possible without unduly affecting the Group's competitiveness and effectiveness. Further details of these policies are set out below:

 

Credit risk

 

The Group is exposed to credit risk primarily on its trade receivables, which are spread over a range of countries, a factor that helps to dilute the concentration of the risk. Group policy, implemented locally, is to assess the credit risk of each new customer before entering into binding contracts. Each customer account is then reviewed on an ongoing basis (at least once a year) based on available information and payment history.

 

The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected credit loss allowance for all trade receivables. The provision for credit losses on trade receivables is based on an expected credit loss model that calculates the expected loss applicable to the receivable balance over its lifetime.

 

Each debt was reviewed in detail, reviewing correspondence and customer engagement and a view was taken on which debts should be provided for and which debts should be realised. No additional allowance for expected credit losses has been recognised during the year (2020: £18,000), due to the Group's customers primarily being the NHS, for which the risk of default has been assessed to be immaterial.

 

The Group holds no collateral. It has a minimal risk policy with funds held following fund raises so it holds the cash with mainstream UK banks.

 

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date is:

 

 

Financial assets held at amortised cost

 

 

Group

Company

 

2021

2020

2021

2020

 

£

£

£

£

Trade and other receivables

138,042

129,877

99,906

27,538

Loans to subsidiary companies

-

-

2,998,240

-

Cash and cash equivalents

2,220,862

732,650

2,020,688

473,809

 

2,358,904

862,527

5,118,834

501,347

Analysis of trade receivables

 

 

 

Total

 

Current

30 days past due

60 days past due

90 days past due

 

 

£

£

£

£

£

 

Group

 

 

 

 

 

 

2021

26,946

-

26,946

-

-

 

2020

99,560

4,959

-

22,513

72,088

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

 

 

 

 

 

2021

-

-

-

-

-

 

2020

-

-

-

-

-

 

          

 

Foreign currency risk

Foreign exchange transaction risk arises when the Group enters into transactions denominated in a currency other than the functional currency. Foreign currency amounts generated from trading are converted back to sterling and required foreign currency amounts for suppliers will be converted from sterling and the use of forward currency contracts is considered. However, the Group does not currently use any forward contracts.

 

The Group's main foreign currency risk is the short-term risk associated with accounts receivable and payable denominated in currencies that are not the subsidiaries' functional currency. The risk arises on the difference in the exchange rate between the time invoices were raised/received and the time invoices were settled/paid.

 

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 2021

 

 

 

Group

Company

 

 

2021

2020

2021

2020

 

 

£

£

£

£

Trade Receivables

 

26,946 

99,560

-

-

 

As at 31 May 2021 £10,557 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 £503. The foreign currencies are US dollars and Euros.  The Directors do not generally consider it necessary to enter into derivative financial instruments to manage the exchange risk arising from its operations, but from time to time where the Directors consider foreign currencies are weak and it is known that there would be a requirement to purchase those currencies, forward arrangements may be entered into. There were no outstanding forward currency arrangements as at 31 May 2021 or at 31 May 2020.

 

 

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

 

 

 

2021

2020

2021

2020

 

 

 

£

£

 

 

Trade and other payables

 

 

236,915

127,914

491

26,899

 

The following are maturities of financial liabilities, including estimated contracted interest payments.

 

 

 

Carrying amount

£

Contractual cash flow

£

6 months or less

£

 

 

 

 

Group

 

 

 

2021

236,915

236,915

236,915

2020

127,914

127,914

127,914

 

 

 

 

Company

 

 

 

2021

491

491

491

2020

26,899

26,899

26,899

 

Cash flow interest rate risk

The Group presently has no substantial interest rate risk exposure.

 

Capital under management

The Group considers its capital to comprise its ordinary share capital, share premium, capital reserve, and accumulated retained earnings.

 

The Group's objectives when managing the capital are:

 

To safeguard the Group's ability to remain a going concern.

To maximise returns for shareholders in order to meet capital requirements and appropriately adjust the capital structure, the Group may issue new shares, dispose of assets to pay down debt, return capital to shareholders and vary dividend payments.

 

There have been no changes to the group's capital management objectives in the year, and there have been no changes to the group's exposure to financial instrument risk in the year.

 

18.  Share capital and reserves

 

Allotted, called up and fully paid ordinary shares of 0.25 pence each:

 

 

 

 

 

Number

Number

As at start of period (01 June)

539,949,917

373,283,250

Issued during year

526,981,769

166,666,667

As at end of period (31 May)

1,066,931,686

539,949,917

 

 

 

 

Share Options

Share options are granted to directors and employees. Options are conditional on the employee completing a specific length of service (the vesting period). The options are exercisable from the end of the vesting period and lapse after ten years after the grant date. The Group has no legal or constructive obligation to repurchase or settle the options in cash.

 

During the year, the Company had the following share options in issue:

 

 

 

Grant Date

No. options as at 31 May 2020

Granted in year

Lapsed in year

No. options as at 31 May 2021

Exercise price (pence)

Exercisable period

 

 

 

 

 

 

 

21 May 14(1)

2,400,000

 

-

2,400,000

1.25

21 May 15 - 19 May 24

21 May 14(1)

4,000,000

 

-

4,000,000

3.00

21 May 15 - 19 May 24

21 May 14(1)

4,000,000

 

-

4,000,000

5.00

21 May 15 - 19 May 24

26 June 18(2)

2,500,000

 

-

2,500,000

1.86

26 June 18 - 26 June 28

26 June 18(3)

2,800,000

 

-

2,800,000

1.86

01 March 19 - 26 June 28

26 June 18(3)

2,800,000

 

-

2,800,000

1.86

01 March 19 - 26 June 28

09 April 19(2)

9,332,081

 

-

9,332,081

1.09

09 April 19 - 09 April 29

23 April 20(4)

19,000,000

 

1,500,000

17,500,000

1.20

01 June 20 - 24 April 30

06 August 20(5)

-

13,498,748

-

13,498,748

1.20

06 August 20 - 06 August 30

 

46,382,081

13,948,748

1,500,000

58,830,829

 

 

 

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

 

Share options are valued using the Black-Scholes option pricing model and no performance conditions are included in the fair value calculations.

 

For the options granted on 23 April 2020, the following assumptions were made for valuation purposes:

 

· Risk-free rate: 0.29% based on the ten-year UK gilt

· Expected volatility: 124.32% based on annualised daily historical volatility

· Option period: Ten years

· Estimated fair value of each option at measurement date: £0.01

 

For the options granted on 6 August 2020, the following assumptions were made for valuation purposes:

 

· Risk-free rate: 0.21% based on the ten-year UK gilt

· Expected volatility: 48.22% based on annualised daily historical volatility

· Option period: Ten years

· Estimated fair value of each option at measurement date: £0.01

 

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

 

2021

2020

2021

2020

 

 

 

Pence

Pence

Outstanding at 01 June

46,832,081

34,632,081

1.77

2.10

Granted in year

13,498,748

19,000,000

1.20

1.20

Lapsed in year

1,500,000

6,800,000

1.20

1.86

Outstanding at 31 May

58,830,829

46,832,081

1.66

1.77

 

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 2020

Granted

Exercised

At 31 May 2021

Exercise price (pence)

Exercisable period

 

 

 

 

 

 

4,200,000

-

-

4,200,000

  1.25

19/05/16  to 19/05/24

18,200,000

-

-

18,200,000

  3.00

19/05/17 to 19/05/24

22,400,000

-

-

22,400,000

 

 

 

 

 

 

 

 

 

Reserves

The nature and purpose of each reserve within equity is as follows:

 

Share premium

· Amount subscribed for share capital in excess of nominal value

Capital reserve

· Reserve on consolidation of subsidiaries

Translation reserve

·   Gains and losses on the translation of overseas operations into GBP

Retained earnings

·All other net gains and losses and transactions with owners not recognised elsewhere 

Share Option Reserve

· Fair value of share options issued

 

19.       Pensions

 

The Company operated a defined contribution scheme during the year and the assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost represents contributions payable and amounted to £108,796 (2020: £81,499). A balance of £9,660 (2020: £8,491) was payable at the year end.

 

20.        Related party transactions

 

Key management personnel

Refer to note 8 for detail on directors' remuneration.

 

The Directors interests in shares of the Company are contained in the Directors' Report

 

21.         Post balance sheet events

 

On 2 November 2021, the Company announced an accelerated bookbuild to raise a minimum of £10 million (before expenses) with closing of the placing expected on the same day. Subject to closing, the placing is conditional on shareholder approval at the forthcoming Annual General Meeting.

 

22.  Ultimate controlling party

 

There is no ultimate controlling party.

 

 

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