09:28 Thu 24 Oct 2019
Feedback PLC - Final Results: Revenue up 23%
Final Results for the year to
Operational highlights (including post period end)
● Partnership agreement with software development partner, Future Processing, in
● Appointment of Dr
● Strategic review of Cadran completed, TexRAD review underway
● Development and launch of BleepaⓇ, a new secure, encrypted medical communication app for clinicians, based on Cadran technology
● TexRAD achieved new contracts from
Financial summary (including post period end)
● Reported revenue up 23% to
● Loss before tax of
● Equity fundraises in
● Healthy cash balance as at
Dr
"This has been a transformational year for Feedback and we believe that we have the technology and strategy to make a meaningful change in the medical imaging and communications market. Following successful fundraises, we are well positioned to continue to build our team and capabilities to support the roll-out of BleepaⓇ, both in the
Enquiries:
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+44 (0)1954 718072 |
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+44 (0)20 3328 5656 |
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+44 (0)20 7469 0936 |
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+44 20 3815 8880
+44 (0)20 7457 2020 |
About
Feedback has launched BleepaⓇ, a new secure, encrypted medical communication app for clinicians accessible through smartphones, tablets and desktops that facilitates rapid clinical messaging and review of medical grade imaging for all members of a clinical team, directly from a hospital Picture Archiving and Communications System (PACS). For more information on BleepaⓇ, see www.bleepa.com
Chairman's Statement
In my last report of
I recruited Dr
He has galvanised the operational team and focused efforts on the development and commercial launch of BleepaⓇ, an evolution from Cadran. This exciting new product that is set to transform the group's potential for accelerated growth, was announced in
Alongside the major management and strategic directional changes occurring during the period, commercial progress has continued. Revenue for the year ended
On quality, we were pleased to announce a retention of our ISO 13485:2016 certification in
The placing in
At the end of
Dr
Chairman
Financial summary
In the year to
In line with International Financial Reporting Standards, Feedback's accounting policy is to spread the income from its software licence and support sales over the duration of the contract, usually one to two years. The Group's balance sheet contains a significant deferred revenue liability to reflect this.
In
In
Operational cash flows have been satisfactory and reflect customer payments for new purchases and contracts before the periods in which the revenue is recognised. The share issue in
Operational review
Feedback Medical
Feedback Medical (
TexRAD
The main focus on research and development has been creating products associated with Cadran technology. However, the Group has also been developing the Grey Level Co-Occurrence Matrix (GLCM) enhancement to its existing product range. This was finally achieved post year end. During the year, Feedback Medical's TexRAD product had sales in new countries including
Cadran
Cadran is Feedback's established Picture Archiving and Communications System (PACS) which facilitates the review of medical imaging studies by clinicians. TexRAD is typically installed on the Cadran picture archiving platform. Cadran PACS technology provides storage and display of medical images throughout a hospital. It has been used successfully at the
The Cadran platform has significant potential to bring a competitive product offering to new global markets especially in developing economies. Cadran products can support the storage and viewing needs of individual clinicians right up to mid-scale hospital departments and specialist centres. It is a progressive and rigorously tested Class 1 medical device with a longstanding legacy of service at
Cadran's innovative features, such as the ability to view clinical grade medical images flexibly on mobile and personal devices, allow it to be repositioned to meet the needs of an emerging medical communications market, particularly in medical imaging. The potential to improve the efficiencies and lives of medical professionals and patients alike, through more flexible, secure and accurate tools utilising the highest standards in global mobile communications.
According to an article in BMJ Innovations, 97% of hospital doctors routinely use
By incorporating a dedicated, encrypted messaging function to Feedback's existing Cadran technology, The Company has created a medical communication device capable of sharing clinical grade medical imaging directly from a hospital PACS to mobile devices, ensuring the safe handling of patient data and facilitating a secure means of communication for clinicians.
The repositioning of Cadran marks a shift away from a traditional software sales model towards a SaaS (software as a service) model which is anticipated to generate considerably higher recurring revenues for the Group and lead to a new phase of growth. With over 15 million doctors globally, Cadran is uniquely positioned to set new standards in this emerging, sizeable, medical communications market.
Having undertaken a period of market research alongside
Based on Feedback's Cadran technology, BleepaⓇ is a secure, encrypted medical communication tool accessible through smartphones, tablets and desktops that facilitates rapid clinical messaging and review of medical grade imaging for all members of a clinical team, directly from a hospital Picture Archiving and Communications System (PACS). BleepaⓇ enables faster clinical decision making between team members wherever they are, accelerating and improving patient care. BleepaⓇ addresses growing concerns about these messaging platforms not meeting diagnostics clinical standards and regarding patient data protection. Continued use of non-specialist communication tools could leave both hospitals and individual clinical users significantly exposed and therefore open to the risk of litigation.
* O'Sullivan DM, O'Sullivan E, O'Connor M, et al WhatsApp Doc? BMJ Innovations 2017;3:238-239.
R&D progress
Feedback recognises the potential in developing new products from its existing technologies and expertise within software and machine learning. It is working closely with existing customers to identify unmet needs. To increase its software development capabilities the Group is continuing and expanding its collaboration with Future Processing to develop new imaging software products.
Last year Feedback started to capitalise development costs for writing off against income generated in future accounting periods. The Directors carefully consider what elements of this development expenditure will generate future economic benefits. This is based upon customer feedback on new products and product enhancements. This policy has continued during the current year.
Current trading and future developments
The Group's revised strategy was announced to shareholders in
Principal risks and uncertainties
Economic and market risks
Regulatory approval
The development, evaluation and marketing of the Group's products and ongoing research and development activities are subject to regulation by governments and regulatory agencies in all territories within which the Group intends to market its products (whether itself or through a partner) and there can be no assurance that any of the Group's products will successfully complete the trial process or that regulatory approvals to market these products will ultimately be obtained. Failure to obtain regulatory approvals for its products could threaten the Group's ability to trade in the long term.
The time taken to obtain regulatory approval varies between territories and there can be no assurance that any of the Group's products will be approved in any territory within the timescale envisaged by the Board, or at all, and this may result in a delay, or make impossible, the commercial exploitation of the Group's products. Furthermore, each regulatory authority may impose its own requirements and may refuse to grant, or may require additional data before granting an approval, even though the relevant product may have been approved by another country's authority.
If regulatory approval is obtained, products will be subject to continual review and there can be no assurance that such approvals will not be withdrawn or restricted. Changes in applicable legislation or regulatory policies, or discovery of problems with products may result in the imposition of restrictions on sale, including withdrawal of the product from the market, or may otherwise have an adverse effect on the Company's business and/or revenue streams. The Group's ISO accreditation (ISO 13845 2016) was renewed in
Product Development Risk
The Group capitalises development costs where there is an expectation that commercially successful products will be developed. The products in development may cost more and/or take longer to develop than the current estimates. It is possible that commercially successful products may not be developed. The Board monitors progress on product development on a regular basis and discusses with potential customers their requirements to mitigate this risk. The new BleepaⓇ is both innovative and unique but further iterations will be required to be produced quickly to ensure that BleepaⓇ retains this position.
Liquidity
Management of liquidity risk has concentrated on the maintenance of appropriate credit lines and funding sources to ensure adequate cash resources for the Company's operations. The Group was successful in raising additional cash through share issues in both 2018 and 2019 to enable it to achieve its strategy. The Board regularly monitors the cash position of the Group and ongoing cash requirements. The Board believes the Group is likely to have access to adequate cash resources from a combination of operational cash generation and, if necessary, obtaining further equity finance from the financial markets to support its corporate world strategy.
Credit Risk
The Group's credit risk is primarily attributable to its cash and cash equivalents and trade receivables. The credit risk on other classes of financial assets is considered insignificant. Credit risk is managed through credit review and approval processes for new customers and ongoing review of each customer's credit history.
Other Risks
There is a risk that existing and new customer relationships will not lead to the income currently forecast (especially, as noted above, from new products currently in development). As with other technology businesses, the Group is reliant on a small number of highly skilled staff.
Post Balance Sheet Events
On
Key Performance Indicators
During the year the Company maintained its cash position as a key performance indicator. The consolidated cash balance at
By Order of the Board on
Dr A J Riddell
Independent Auditors' Report
Opinion
We have audited the financial statements of
In our opinion, the financial statements:
● give a true and fair view of the state of the group's and of the parent company's affairs as at
● have been properly prepared in accordance with IFRSs as adopted by the
● have been prepared in accordance with the requirements of the Companies Act 2006
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (
Material uncertainty related to going concern
We draw attention to the Note 3c in the financial statements, which indicates that the group incurred a net loss of
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter |
Our response |
Fraud and error in revenue recognition
For the
This year the group must also apply IFRS 15 for the first time.
|
Fraud and error in revenue recognition We reviewed the group's material revenue streams to consider whether revenue is recognised and treated appropriately, and in accordance with IFRS.
Our review included an assessment of revenue recognition policies, including the use of judgements and substantive testing of revenue recognised in the year, and deferred revenue.
Additionally we reviewed the recognition and recoverability of trade receivables at the year-end to assess the validity of their recognition and carrying values as at
|
Intangible assets - Capitalised development costs
During the year the group has significantly increased its investment in product development as it seeks to bring to market a new product based on its existing technology.
IAS 38 sets out the recognition criteria that development costs must meet before being capitalised. There is a risk that if the group's development expenditure does not these requirements, intangible assets will be overstated.
|
Intangible assets - Capitalised development costs We reviewed development cost additions to supporting invoices and documentation received from those third-party developers employed to develop the group's products.
The rationale for recognition of these costs was discussed with management, and the products for which items had been capitalised assessed against the recognition criteria of IAS 38 by reference to supporting evidence. |
Our application of materiality
The scope and focus of our audit was influenced by our assessment and application of materiality. We define materiality as the magnitude of misstatement that could reasonably be expected to influence the readers and the economic decisions of the users of the financial statements. We use materiality to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and on the financial statements as a whole.
Due to the nature of the group and its operations we considered pre-tax trading results to be the main focus for the readers of the financial statements, accordingly this consideration influenced our judgement of materiality. Based on our professional judgement, we determined materiality for the group to be
Based on our risk assessments and our assessment of the overall control environment, our judgement was that performance materiality (i.e. our tolerance for misstatement in an individual account or balance) for the group was 75% of materiality, namely
We agreed to report to the Audit Committee all audit differences more than
An overview of the scope of our audit
As Feedback is a group comprising three trading entities based in
During the audit we performed specifically designed audit tests on significant transactions, balances and disclosures. Our testing included a review of systems and controls relevant to our audit and our approach was primarily based around substantive audit tests and analytical review.
To maintain and reinforce our knowledge of the group and the risks it faces we met with management prior to the audit planning process. This information gathering process continued throughout the audit process, as we reassessed and re-evaluated audit risks where necessary and amended our approach accordingly.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
● the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
● the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
● adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
● the parent company financial statements are not in agreement with the accounting records and returns; or
● certain disclosures of directors' remuneration specified by law are not made; or
● we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement set out on page 8, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group and parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or parent company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (
A further description of our responsibilities for the audit of the financial statements is located on the FRC's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an Auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
For and on behalf of
10
London EC4R 1A
STATEMENT OF COMPREHENSIVE INCOME
|
|
|
Notes |
2019 £ |
2018 £ |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
4 |
563,092 |
458,389 |
|
|
|
|
|
|
Cost of sales |
|
|
|
(4,896) |
(16,083) |
|
|
|
|
|
|
Gross profit |
|
|
|
558,196 |
442,306 |
|
|
|
|
|
|
Other operating expenses |
|
|
5 |
(1,690,052) |
(1,190,159) |
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
6 |
(1,131,856) |
(747,853) |
|
|
|
|
|
|
Net finance income |
|
|
7 |
1,283 |
59 |
|
|
|
|
|
|
Loss on ordinary activities before taxation |
|
|
|
(1,130,573) |
(747,794) |
|
|
|
|
|
|
Tax credit |
|
|
9 |
157,464 |
117,007 |
|
|
|
|
|
|
Loss on ordinary activities after tax |
|
|
|
|
|
attributable to the equity shareholders of the Company |
|
|
|
(973,109) |
(630,787) |
|
|
|
|
|
|
Total comprehensive expense for the year |
|
|
|
(973,109) |
(630,787) |
|
|
|
|
|
|
Loss per share (pence) |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
11 |
(0.29) |
(0.25) |
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
GROUP |
|
Share Premium |
Capital Reserve |
Retained Earnings |
Translation Reserve |
Convertible Debt Option Reserve |
Total |
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
|
At |
615,167 |
2,376,033 |
299,900 |
(2,511,753) |
(209,996) |
- |
569,351 |
|
|
|
|
|
|
|
|
New shares issued |
88,875 |
355,500 |
- |
- |
- |
- |
444,375 |
|
|
|
|
|
|
|
|
Costs associated with the raising of funds |
|
(17,600) |
- |
- |
- |
- |
(17,600) |
|
|
|
|
|
|
|
|
Total comprehensive expense for the year |
-
|
-
|
-
|
(630,787)
|
-
|
-
|
(630,787)
|
|
|
|
|
|
|
|
|
At 31 May 2018 |
704,042 |
2,713,933 |
299,900 |
(3,142,540) |
(209,996) |
- |
365,339 |
|
|
|
|
|
|
|
|
New Shares issued
|
229,167 |
1,145,833 |
- |
- |
- |
- |
1,375,000 |
Costs associated with the raising of funds
|
- |
(82,-912) |
- |
- |
- |
- |
(82,912) |
Share option expense reserve
|
- |
- |
- |
(261,300) |
- |
261,300 |
- |
Total comprehensive expense for the year |
- |
- |
- |
(711,809) |
- |
- |
(711,809) |
|
|
|
|
|
|
|
|
At 31 May 2019 |
933,209 |
3,776,854 |
299,900 |
(4,115,649) |
(209,996) |
261,300 |
945,618 |
CONSOLIDATED BALANCE SHEET
|
|
|
2019 |
2018 |
|
|
|
£ |
£ |
ASSETS |
|
|
|
|
Non-current assets |
|
|
|
|
Property, plant and equipment |
|
|
6,428 |
6,560 |
Intangible assets |
|
|
449,497 |
154,416 |
|
|
|
455,925 |
160,976 |
Current assets |
|
|
|
|
|
|
|
|
|
Trade and other receivables |
|
|
493,446 |
261,862 |
Cash and cash equivalents |
|
|
540,735 |
632,285 |
|
|
|
1,034,181 |
894,147 |
|
|
|
|
|
Total assets |
|
|
1,490,106 |
1,055,123 |
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
Capital and reserves attributable to the Company's equity shareholders |
|
|
|
|
Called up share capital |
|
|
933,209 |
704,042 |
Share premium account |
|
|
3,776,854 |
2,713,933 |
Capital reserve |
|
|
299,900 |
299,900 |
Translation reserve |
|
|
(209,996) |
(209,996) |
Share option expense reserve |
|
|
261,300 |
- |
Retained earnings |
|
|
(4,115,649) |
(3,142,540) |
Total equity |
|
|
945,618 |
365,339 |
|
|
|
|
|
Liabilities |
|
|
|
|
Deferred tax liabilities |
|
|
- |
- |
|
|
|
- |
- |
Current liabilities |
|
|
|
|
|
|
|
|
|
Trade and other payables |
|
|
498,342 |
500,859 |
|
|
|
|
|
|
|
|
498,342 |
500,859 |
|
|
|
|
|
Liabilities due after more than one year |
|
|
|
|
Other payables |
|
|
46,146 |
188,925 |
|
|
|
|
|
Total liabilities |
|
|
544,488 |
689,784 |
|
|
|
|
|
Total equity and liabilities |
|
|
1,490,106 |
1,055,123 |
The financial statements were approved and authorised for issue by the Board of Directors on 23October 2019 and were signed below on its behalf by:
Dr A J Riddell
Chairman
CONSOLIDATED CASH FLOW STATEMENT
|
2019 |
2018 |
|
£ |
£ |
|
|
|
Cash flows from operating activities |
|
|
Loss before tax |
(1,130,573) |
(747,794) |
Adjustments for: |
|
|
|
|
|
Net finance income |
(1,283) |
(59) |
Depreciation and amortisation |
106,781 |
57,143 |
Share based payment expense |
261,300 |
- |
Increase in trade receivables |
(114,323) |
(38,318) |
Decrease in other receivables |
2,248 |
1,523 |
Increase/(Decrease) in trade payables |
8,870 |
(11,546) |
(Decrease)/ Increase in other payables |
(154,164) |
381,466 |
Corporation tax received |
37,953 |
- |
Total adjustments |
147,382 |
390,209 |
|
|
|
Net cash used in operating activities |
(983,191) |
(357,585) |
|
|
|
Cash flows from investing activities |
|
|
Purchase of tangible fixed assets |
(3,422) |
(6,250) |
Purchase of intangible assets |
(398,308) |
(127,525) |
Net finance income received |
1,283 |
59 |
|
|
|
Net cash used in investing activities |
(400,447) |
(133,716) |
|
|
|
Cash flows from financing activities |
|
|
Net proceeds of share issue |
1,292,088 |
426,775 |
|
|
|
Net cash generated from financing activities |
1,292,088 |
426,775 |
|
|
|
Net decrease in cash and cash equivalents |
(91,550) |
(64,526) |
Cash and cash equivalents at beginning of year |
632,285 |
696,811 |
|
|
|
Cash and cash equivalents at end of year |
540,735 |
632,285 |
NOTES TO THE FINANCIAL STATEMENTS
1. General information
The Company is a public limited company domiciled in the United Kingdom and incorporated under registered number 00598696 in England and Wales. The Company's registered office is Unit 5, Grange Park, Broadway, Bourn, Cambridgeshire, CB23 2TA.
The Company is quoted on AIM of the London Stock Exchange. These Financial Statements were authorised for issue by the Board of Directors on 23 October 2019.
2. Adoption of the new and revised International Financial Reporting Standards
New standards impacting the Group that were adopted in the annual financial statements for the year ended 31 May 2019, are:
• IFRS 9 Financial Instruments (IFRS 9); and
• IFRS 15 Revenue from Contracts with Customers (IFRS 15)
At the date of approval of this financial information, the following IFRS Standards and Interpretations, which have not been applied in these Financial Statements, were in issue but not yet effective. These new Standards, Amendments and Interpretations are those in issue but not yet effective which are expected to impact on the Group and are effective for accounting periods beginning on or after the dates shown below:
Mandatory for accounting periods commencing on or after 1 January 2019:
● IFRS 16 - Leases
The Group has not early adopted this new standard. The Directors do not anticipate that the adoption of this standard will have a material impact on the reported results aside from the recognition of a right to use asset and liability for the Group's office lease disclosed in note 19.
● Annual Improvements to IFRSs 2015-2017 Cycle (IFRS 3 Business Combinations and IFRS 11 Joint Arrangements, IAS 12 Income Taxes, and IAS 23 Borrowing Costs)
The Group has not early adopted these amendments. The Directors do not anticipate that the adoption of these amendments will have a material impact on the reported results of the Group.
3. Significant accounting policies
(a) Basis of preparation
These financial statements have been prepared in accordance with those IFRS standards and IFRIC interpretations issued and effective or issued and early adopted as at the time of preparing these statements. 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 2019 and 2018 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.
(c) Going Concern
The Group incurred a net loss of £973,109 and had a net cash outflow of £983,191 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 29 August 2019, the Company raised £2m before expenses by the issue of 166,666,667 new ordinary shares at a price of 1.2 pence per share. Following this fundraise the directors updated and reviewed the Group's business plan and cash flow forecasts and consider that the Group and the Company will have adequate cash resources for at least the next twelve months to 31 October 2020, from existing cash balances. These cash balances 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 software development of products which are integral to the trade of the Group's medical imaging products. Amortisation is recognised in other operating expenses in the income and expenditure account.
The carrying value of intangible assets is reviewed for impairment whenever events or changes in circumstance indicate that the carrying value may not be recoverable. Impairment losses are recognised in other operating expenses in the income and expenditure account. Impairment reviews are carried out annually.
Research expenditure is recognised as an expense as incurred. 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. Other development expenditure is recognised as an expense as incurred. Development costs that have a finite useful life and that have been capitalised are amortised from the commencement of the commercial production of the product on a straight line basis as follows:
Intangible asset |
Useful economic life |
|
|
Patents |
Over the life of the patent |
Customer relationships |
4 years |
Software development |
Over the anticipated life of the product |
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 includes 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 income statement.
(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 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) Leases
Rental costs under operating leases are charged to the income statement in equal annual amounts over the period of the lease.
(j) 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.
(k) 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.
Revenue relating to software consultancy and similar services is recognised as the services are performed and completed.
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 Directors have carefully considered the impact of IFRS 15 and the impact on both current year's and prior year's accounting for sales revenue and they are of the opinion that the current accounting policy is complaint with this standard.
(l) Pension Costs
The Group operated a defined contribution pension scheme during the year. The pension charge represents the amounts payable by the Group to the scheme in respect of that year.
(m) Taxation
The tax credit represents the sum of the current tax credit and deferred tax credit.
The tax currently payable is based on taxable profit for the period. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated by using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction which affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based upon tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is charged or credited in the income statement, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity.
(n) Financial instruments
In relation to the disclosures made in note 17:
● the Group does not hold or issue derivative financial instruments for trading purposes.
(o) 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.
(p) Key sources of estimation uncertainty
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 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 - Patents 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.
Year ended 31 May 2019 |
|
|
||
|
|
Medical Imaging |
Head Office |
Total |
|
|
£ |
£ |
£ |
Revenue |
|
|
|
|
External |
|
563,092 |
- |
563,092 |
Expenditure |
|
|
|
|
External |
|
(1,014,683) |
(678,982) |
(1,693,665) |
|
|
|
|
|
Loss before tax |
|
(451,591) |
(678,982) |
(1,130,573) |
|
|
|
|
|
Balance sheet |
|
|
|
|
External Assets |
|
1,008,278 |
481,828 |
1,490,106 |
External Liabilities |
|
(480,068) |
(64,420) |
(544,488) |
|
|
|
|
|
|
|
528,210 |
417,408 |
945,618 |
Capital expenditure |
|
401,724 |
- |
401,724 |
|
|
|
|
|
Year ended 31 May 2018 |
|
|
|
|
|
|
Medical Imaging |
Head Office |
Total |
|
|
£ |
£ |
£ |
Revenue |
|
|
|
|
External |
|
458,389 |
- |
458,389 |
Expenditure |
|
|
|
|
External |
|
(774,179) |
(432,004) |
(1,206,183) |
|
|
|
|
|
Loss before tax |
|
(315,790) |
(432,004) |
(747,794) |
|
|
|
|
|
Balance sheet |
|
|
|
|
External Assets |
|
840,814 |
214,309 |
1,091,395 |
External Liabilities |
|
(581,287) |
(108,497) |
(726,056) |
|
|
|
|
|
|
|
259,527 |
105,812 |
365,339 |
|
|
|
|
|
Capital expenditure |
|
133,775 |
- |
133,775 |
|
|
|
|
|
Reported segments' assets are reconciled to total assets as follows:
|
External revenue by |
Total assets by |
Capital expenditure by |
|||||
|
location of customer |
location of assets |
location of assets |
|||||
|
2019 |
2018 |
2019 |
2018 |
2019 |
2018 |
||
|
£ |
£ |
£ |
£ |
£ |
£ |
||
|
|
|
|
|
|
|
||
United Kingdom |
282,118 |
282,265 |
1,490,106 |
1,055,123 |
365,458 |
133,775 |
||
Europe |
85,868 |
15,875 |
- |
- |
- |
- |
||
Rest of the world |
195,106 |
160,249 |
- |
- |
- |
- |
||
Total |
563,092 |
458,389 |
1,490,106 |
1055,123 |
365,458 |
133,775 |
||
|
|
|
|
|
|
|
||
Major customers
During the year ended 31 May 2019, the group generated £222,000 (2018: £150,000) of revenue from one customer in the United Kingdom, which is equal to 40% (2018: 33%) of total group revenues in the year.
5. Other operating expenses
|
|
|
|
2019 |
2018 |
|
|
|
|
£ |
£ |
|
|
|
|
|
|
Administrative costs: |
|
|
|
|
|
Employment and other costs |
|
|
|
1,583,271 |
1,133,016 |
Amortisation and depreciation costs |
|
|
|
106,781 |
57,143 |
|
|
|
|
|
|
|
|
|
|
1,690,052 |
1,190,159 |
|
|
|
|
|
|
6. Operating loss
|
|
|
|
2019 |
2018 |
|
|
|
|
|
£ |
£ |
|
This is stated after charging |
|
|
|
|
|
|
Depreciation and amortisation |
|
|
|
|
|
|
Owned assets |
|
|
|
3,554 |
3,799 |
|
Amortisation of intangible assets |
|
|
|
103,227 |
53,344 |
|
|
|
|
|
|
|
|
Foreign exchange differences |
|
|
|
8,488 |
11,181 |
|
Auditors' remuneration |
|
|
|
|
|
|
Audit of parent company and group financial statements |
|
|
|
14,000 |
10,000 |
|
Audit of subsidiaries |
|
|
|
8,500 |
6,500 |
|
Tax and other services |
|
|
|
- |
5,000 |
|
Operating lease rentals |
|
|
|
|
|
|
Land and buildings |
|
|
|
12,179 |
9,417 |
|
Research and development costs expensed |
|
|
|
38,408 |
- |
|
|
|
|
|
|
|
|
7. Net finance income
|
|
|
|
2019 |
2018 |
|
|
|
|
£ |
£ |
|
|
|
|
|
|
Interest received |
|
|
|
1,283 |
59 |
|
|
|
|
|
|
|
|
|
|
1,283 |
59 |
|
|
|
|
|
|
8. Directors and employees
|
|
|
|
|
2019 |
2018 |
|
|
|
|
|
Average |
Average |
Number of employees |
|
|
|
|
|
|
Selling and distribution |
|
|
|
|
2 |
5 |
Administration |
|
|
|
|
4 |
2 |
Research and development |
|
|
|
|
3 |
1 |
|
|
|
|
|
9 |
8 |
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
2018 |
|
|
|
|
|
£ |
£ |
Staff costs |
|
|
|
|
|
|
Wages and salaries |
|
|
|
|
656,007 |
477,881 |
Social security costs |
|
|
|
|
72,950 |
47,334 |
Payments to defined contribution pension scheme |
|
|
67,928 |
61,563 |
||
Share based payment expense |
|
|
|
|
261,300 |
- |
|
|
|
|
|
|
|
|
|
|
|
|
1,058,185 |
586,778 |
Directors and employees
The value of all elements of remuneration received by each Director in the year was as follows:
|
Salary |
Fees |
Pension |
Benefits in kind |
Total |
|
£ |
£ |
£ |
£ |
£ |
Year ended 31 May 2019 |
|
|
|
|
|
Executive Directors |
|
|
|
|
|
A Riddell |
41,591 |
- |
- |
- |
41,591 |
L Melvin |
72,107 |
- |
10,861 |
626 |
83,594 |
T. Oakley (appointed 9 April 2019) |
18,712 |
- |
- |
- |
18,712 |
D Crabb*** (to 6 July 2018)
|
30,178
|
- |
2,708 |
28 |
32,914 |
Non-Executive Directors |
|
|
|
|
|
T Irish** |
- |
25,000 |
- |
- |
25.000 |
S Sturge |
- |
- |
- |
- |
- |
A Riddell *
|
- |
2,667 |
- |
- |
2,667 |
|
|
|
|
|
|
Total |
162,588 |
27,667 |
13,569 |
654 |
204,478 |
|
|
|
|
|
|
Year ended 31 May 2018 |
|
|
|
|
|
Executive Directors
|
|
|
|
|
|
D Crabb |
41,667 |
- |
2083 |
|
43,750 |
L Melvin |
9,533 |
- |
476 |
- |
10,009
|
M P Hayball (to 14 April 2018) |
78,750 |
- |
4,500 |
- |
83,250 |
B Ganeshan (to 14 April 2018) |
70,000
|
- |
- |
- |
70,000 |
Non-executive Directors
|
|
|
|
|
|
A H Menys |
20,075 |
- |
- |
- |
20,075 |
T Irish ** |
- |
24,514 |
- |
- |
24,514 |
S Sturge |
- |
- |
- |
- |
- |
A Riddell* |
- |
45,417 |
- |
- |
45,417 |
|
|
|
|
|
|
Total |
220,025 |
69,931 |
7,059 |
|
297,015 |
During the year, retirement benefits under money purchase pension schemes were accruing to 2 directors (2018: 2)
* A Riddell was paid consultancy fees through an agreement with AJR & Associates limited.
** T Irish was paid consultancy fees through an agreement with Pembrokeshire Retreats Limited.
***D Crabb was paid £5,000 ex-gratia payment
The following share options were issued and vested in the year and were outstanding at 31 May 2019 (2018: nil). Further information is provided in Note 18.
|
Number |
|
|
A Riddell |
4,000,000 |
L Melvin |
2,800,000 |
T. Oakley |
9,332,081 |
S Sturge |
2.500,000 |
|
|
9. Taxation on loss on ordinary activities
|
|
|
2019 |
2018 |
||
|
|
|
£ |
£ |
||
(a) |
The tax credit for the year: |
|
|
|
||
|
UK Corporation tax |
|
(157,464) |
(117,007) |
||
|
|
|
|
|
||
|
|
|
|
|
||
|
Current tax credit |
|
(157,464) |
(73,232) |
||
|
Under provision in prior year |
|
- |
(39,525) |
||
|
Deferred tax charge |
|
- |
(4,250) |
||
|
|
|
|
|
||
|
|
|
(157,464) |
(117,007) |
||
|
|
|
|
|
||
(b) |
Tax reconciliation |
|
|
|
||
|
Loss on ordinary activities before tax |
|
(1,130,573) |
(747,794) |
||
|
|
|
|
|
||
|
Loss on ordinary activities at the standard rate of corporation tax in the UK of 19% (2018 - 19%) |
|
(215,065) |
(142,081) |
||
|
Effects of: |
|
|
|
||
|
Expenses non-deductible for tax purposes |
|
56,624 |
2,155 |
||
|
Additional deduction for R&D expenditure |
|
(116,623) |
(54,238) |
||
|
Surrender of tax losses for R & D tax credit refund |
|
48,869 |
22,727 |
||
|
Adjustments to tax charge in respect of previous periods |
|
- |
(39,525) |
||
|
Deferred tax not recognised |
|
61,496 |
93,995 |
||
|
Adjusting opening and closing deferred tax to average rate |
|
7,235 |
- |
||
|
|
|
|
|
||
|
Tax charge for the year |
|
(157,464) |
(117,007) |
||
|
|
|
|
|
||
|
|
|
|
|
||
(c) |
Factors which may affect future tax charges |
|
|
|
||
|
In view of the tax losses carried forward there is a deferred tax amount of approximately £446,364 (2018: £422,587) 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 £425,318 (2018: £349,421) 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 £1,203,651 (2018: £931,379 loss)
11. Loss per share
. Basic earnings per share is calculated by reference to the loss on ordinary activities after taxation of £973,109 (2018: £630,787) and on the weighted average of 333,151,019 (2018: 252,403,981) shares in issue.
|
|
As at 31 May 2019
|
As at 31 May 2018
|
|
|
£ |
£ |
|
|
|
|
Net loss attributable to ordinary equity holders |
|
(973,109) |
(630,787) |
|
|
|
|
|
|
As at 31 May 2019
|
As at 31 May 2018
|
Weighted average number of ordinary shares for basic earnings per share |
|
333,151,019 |
252,403,981 |
Effect of dilution: |
|
|
|
Share Options |
|
- |
- |
Warrants |
|
- |
- |
Weighted average number of ordinary shares adjusted for the effect of dilution |
|
333,151,019 |
252,403,981 |
|
|
|
|
Loss per share (pence) |
|
|
|
Basic |
|
(0.29) |
(0.25) |
Diluted |
|
(0.29) |
(0.25) |
As disclosed in note 22, the Company issued 166,666,667 ordinary shares in August 2019. 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 2017 |
2,334,455 |
1,000 |
2,335,455 |
||
|
|
|
|
|
||
|
At 31 May 2018 |
2,334,455 |
1,000 |
2,335,455 |
||
|
|
|
|
|
||
|
As at 31 May 2019 |
2,334,455 |
1,000 |
2,335,455 |
||
|
|
|
|
|
||
|
Provision for impairment |
|
|
|
||
|
|
|
|
|
||
|
At 31 May 2017 |
2,334,455 |
1,000 |
2,334,455 |
||
|
|
|
|
|
||
|
At 31 May 2018 |
2,334,455 |
1,000 |
2,335,455 |
||
|
|
|
|
|
||
|
At 31 May 2019 |
2,334,455 |
1,000 |
2,335,445 |
||
|
|
|
|
|
||
|
Net Book Value |
|
|
|
||
|
At 31 May 2019 |
- |
- |
- |
||
|
At 31 May 2018 |
- |
- |
- |
||
|
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.
Particulars of principal subsidiary and joint venture companies during the year, all the shares of which being beneficially held by Feedback PLC, were as follows:
Company |
Activity |
Country of incorporation and operation |
Proportion of Shares held |
|
|
|
|
Feedback Black Box Company Limited |
Dormant |
England
|
100% Ordinary £1 |
|
|
|
|
|
|
|
|
Brickshield Limited |
Dormant |
England |
100% |
|
|
|
|
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 has a registered office of Unit 5, Grange Park, Broadway, Bourn, Cambridgeshire CB23 2TA
|
13. Property, plant and equipment
|
|
Computer |
|
|
|
Equipment |
Total |
Group |
|
£ |
£ |
|
|
|
|
Cost or valuation |
|
|
|
At 31 May 2017 |
|
13,818 |
13,818 |
Additions |
|
6,250 |
6,250 |
|
|
|
|
At 31 May 2018 |
|
20,068 |
20,068 |
Additions |
|
3,422 |
3,422 |
|
|
|
|
As 31 May 2019 |
|
23,490 |
23,490 |
|
|
|
|
Depreciation |
|
|
|
At 31 May 2017 |
|
9,709 |
9,709 |
|
|
|
|
Charge for the year |
|
3,799 |
3,799 |
|
|
|
|
At 31 May 2018 |
|
13,508 |
13,508 |
|
|
|
|
Charge for the year |
|
3,554 |
3,554 |
|
|
|
|
At 31 May 2019 |
|
17,062 |
17,062 |
|
|
|
|
Net Book Value |
|
|
|
At 31 May 2019 |
|
6,428 |
6,428 |
|
|
|
|
At 31 May 2018 |
|
6,560 |
6,560 |
|
|
|
|
14. Intangible assets
|
Software development |
Customer relationships |
Patents |
Goodwill |
Total |
Group |
£ |
£ |
£ |
£ |
£ |
Cost |
|
|
|
|
|
|
|
|
|
|
|
At 31 May 2017 |
563,099 |
100,000 |
103,558 |
271,415 |
1,038,072 |
Additions |
89,363 |
- |
38,162 |
- |
127,525 |
At 31 May 2018 |
652,462 |
100,000 |
141,720 |
271,415 |
1,165,597 |
Additions |
385,602 |
- |
12,700 |
- |
398,302 |
|
|
|
|
|
|
At 31 May 2019 |
1,038,070 |
100,000 |
154,420 |
271,415 |
1,563,905 |
|
|
|
|
|
|
Amortisation |
|
|
|
|
|
At 31 May 2017 |
563,099 |
75,000 |
48,323 |
271,415 |
957,837 |
Charge for the year |
- |
25,000 |
28,344 |
- |
53,344 |
At 31 May 2018 |
563,099 |
100,000 |
76,667 |
271,415 |
1,011,181
|
Impairment charge |
38,408 |
- |
- |
- |
38,408 |
Amortisation charge for year |
44,009 |
- |
20,810 |
- |
64,819 |
|
|
|
|
|
|
At 31 May 2019 |
645,516 |
100,000 |
97,477 |
271,415 |
1,114,408 |
|
|
|
|
|
|
Net Book Value |
|
|
|
|
|
At 31 May 2019 |
392,554 |
- |
56,943 |
- |
449,497 |
|
|
|
|
|
|
At 31 May 2018 |
89,363 |
- |
65,053 |
- |
154,416 |
|
|
|
|
|
|
.
15. Trade and other receivables
|
Group |
Company |
||
|
2019 |
2018 |
2019 |
2018 |
|
£ |
£ |
£ |
£ |
Amounts falling due within one year |
|
|
|
|
Trade receivables |
202,623 |
88,300 |
|
|
Other receivables |
11,843 |
19,718 |
7,783 |
15,744 |
Corporation tax recoverable |
248,585 |
129,075 |
|
- |
Prepayments |
30,395 |
24,769 |
21,348 |
16,682 |
|
|
|
|
|
|
493,446 |
261,862 |
29,131 |
32,426 |
|
|
|
|
|
16. Trade and other payables
|
Group |
Company |
||
|
2019 |
2018 |
2019 |
2018 |
|
£ |
£ |
£ |
£ |
Amounts falling due within one year |
|
|
|
|
Trade payables |
30,538 |
57,400 |
14,608 |
38,000 |
Other payables |
4,081 |
- |
|
- |
Other taxes and social security |
39,311 |
77,892 |
7,312 |
6,817 |
Accruals |
78,691 |
73,579 |
42,500 |
63,680 |
Deferred income |
345,721 |
291,988 |
- |
- |
|
498,342 |
500,859 |
64,420 |
108,497 |
Amounts falling due after one year |
|
|
|
|
Deferred income |
46,146 |
188,925 |
- |
- |
|
|
|
|
|
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. The IFRS 9 expected credit loss impairment model is applicable to the Group's financial assets including trade receivables.
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 maximum exposure to credit risk is represented by the carrying value in the balance sheet.
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date is:
|
|
Cash, loans and receivables |
||||||
|
|
|
2019 |
2018 |
||||
|
|
|
£ |
£ |
||||
Current financial assets |
|
|
|
|
||||
Trade and other receivables |
|
|
214,466 |
108,018 |
||||
Cash and cash equivalents |
|
|
540,735 |
627,910 |
||||
|
|
|
755,201 |
735,928 |
||||
Analysis of trade receivables |
|
|
|
|
||||
|
|
|
|
|
|
|||
|
Total |
Current |
30 days past due |
60 days past due |
90 days past due |
|||
|
£ |
£ |
£ |
£ |
£ |
|||
|
|
|
|
|
|
|||
2019 |
202,623 |
68,149 |
51,602 |
38,225 |
44,646 |
|||
|
|
|
|
|
|
|||
2018 |
88,300 |
56,758 |
28,676 |
- |
2,865 |
|||
|
|
|
|
|
|
|||
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.
The Group policy is to make provisions against those debts that are overdue, unless there are grounds for believing that the debts will be collected. During the year the value of provisions made in respect of bad and doubtful debts was £Nil (2018: £Nil).
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 has at 31 May 2019
|
|
|
2019 |
2018 |
|
|
|
£ |
£ |
|
|
|
|
|
Trade receivables |
|
|
104,904 |
86,140 |
|
|
|
|
|
|
|
|
104,904 |
86,140 |
A 5% increase/fall in exchange rates at 31 May 2019 would had created a profit/loss of £5,245. The Group is exposed to currency risk because of the subsidiaries undertaking trading transactions in 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 2019 or at 31 May 2018.
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 |
|
|
|
|
2019 |
2018 |
|
|
|
£ |
£ |
Current financial liabilities |
|
|
|
|
Trade and other payables |
|
|
153,621 |
208,746 |
|
|
|
|
|
The following are maturities of financial liabilities, including estimated contracted interest payments. |
|
Carrying amount £ |
Contractual cash flow £ |
6 months or less £ |
|
|
|
|
2019 |
|
|
|
Trade and other payables |
116,349 |
116,349 |
116,349 |
|
|
|
|
2018 |
|
|
|
Trade and other payables |
208,346 |
208,346 |
208,346 |
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
|
|
|
|
|
|
2019 |
2018 |
|
|
|
£ |
£ |
|||
Authorised and issued share capital |
|
|
|
|
|||
Ordinary shares of 0.25 pence each |
|
|
933,209 |
704,042 |
|||
|
|
|
|
|
|||
Allotted, called up and fully paid share capital: |
|
|
|
|
|||
|
Number |
Number |
|||||
As at 31 May 2018 |
281,616,584 |
246,066,584 |
|||||
Issued |
91,666,666 |
35,550,000 |
|||||
As at 31 May 2019 |
373,283,250 |
281,616,584 |
|||||
|
|
|
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.
Share options are valued using the Black-Scholes option pricing model and no performance conditions are included in the fair value calculations. The risk free rate was 0.751%. The expected volatility is based on historical volatility over the last two years and is estimated to be 66%. The average share price during the year was 1.52 pence. During the year the Company had the following share options in issue:
Number of options |
|
|
||||
At 31 May 2018 |
Lapsed |
Exercised |
Issued |
At 31 May 2019 |
Exercise price (pence) |
Exercise date |
|
|
|
|
|
|
|
2,400,000 |
- |
- |
- |
2,400,000 |
1.25 |
21/05/14 to19/05/24 |
4,000,000 |
- |
- |
- |
4,000,000 |
3.00 |
21/05/15 to19/05/24 |
4,000,000 |
- |
- |
- |
4,000,000 |
5.00 |
21/05/15 to19/05/24 |
- |
- |
- |
4,000,000 |
4,000,000 |
1.86 |
26/06/18 to 26/06/28 |
- |
- |
- |
2,500,000 |
2,500,000 |
1.86 |
26/06/18 to 26/06/28 |
- |
- |
- |
2,800,000 |
2,800,000 |
1.86 |
01/03/19 to 26/06/28 |
- |
- |
- |
2,800,000 |
2,800,000 |
1.86 |
01/03/19 to 26/06/28 |
- |
- |
- |
2,800,000 |
2,800,000 |
1.86 |
01/03/19 to 26/06/28 |
- |
- |
- |
9,332,081 |
9,332,081 |
1.09 |
09/04/19 to 09/04/29 |
10,400,000 |
- |
- |
24,232,081 |
34,632,081 |
|
|
All share options vested one year after the grant date. Each option can only be exercised from one year after the grant date to ten years after the date of grant.
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 2018 |
Granted |
Exercised |
At 31 May 2019 |
Exercise price (pence) |
Exercise date |
|
|
|
|
|
|
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
19. Financial commitments
Total future minimum lease payments under non-cancellable operating leases for the Group's business premises.
|
|
|
|
|
|
2019 |
2018 |
|
|
|
£ |
£ |
|||
|
|
|
|
|
|||
In less than one year |
9,125 |
11,088 |
|||||
Later than one year and less than five years |
48,296 |
37,884 |
|||||
Later than five years |
- |
- |
20. 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 £57,067 (2018: £61,563). A balance of £- (2018: £5,431) was payable at the year end.
21. 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
22. Post balance sheet events
On 29 August 2019, the Company raised £2m by the issue of 166,666,667 new ordinary share at a price of 1.2 pence per share, raising £2m before expenses totalling £86,000.
23. Ultimate controlling party
There is no ultimate controlling party.
24. Copies of Report and Accounts
Copies of the Report and Accounts will be posted to shareholders later today and will be shortly be available from the Company's registered office, Grange Park, Broadway, Bourn, Cambridgeshire, CB23 2TA and from the Company's website www.fbkmed.com.
25. Notice of Annual General Meeting
The annual general meeting of Feedback plc will be held at the offices of Peterhouse Corporate Finance Limited, 80 Cheapside, London, EC2V 6EE at 3:00 p.m. on 18 November 2019.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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