Feedback plc Annual Report 2015

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FY2015 Annual Report · Feedback plc

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FEEDBACK

Report of the Directors and
Consolidated Financial Statements
For the year ended 31 May 2015

Contents

Company Information

For the year ended 31 December 2013

Directors
T W G Charlton
T E Brown
M P Hayball
Dr B Ganeshan
Dr A Menys

Secretary
Temple Secretaries Limited

Registered Office
Unit 5
Grange Park
Broadway
Bourn
Cambridgeshire
CB23 2TA

Registered Number
00598696

Auditors
haysmacintyre
26 Red Lion Square
London
WC1R 4AG

Nominated Advisor and Joint Broker
Sanlam Securities UK Limited
10 King William Street
London
EC4N 7TW

Joint Broker
Peterhouse Corporate Finance Limited
31 Lombard Street
London
EC3V 9BQ

Bankers
NatWest
Conqueror House
Vision Park
Cambridge
CB24 9NL

Registrars
Share Registrars Limited
Suite E, First Floor
9 Lion and Lamb Yard
Farnham
Surrey
GU9 7LL

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Chairman’s Statement

We are pleased to present the results for the year ended 31 May 2015. These are the first full year results to include the
trading of the two medical imaging companies, Cambridge Computed Imaging Limited (‘CCI’) and TexRAD Limited, (‘TexRAD’)
both of which we acquired in May 2014. Revenue for the year was £381,970 (2014: £7,250) and the loss after tax was
£1,111,433 following the write down of intangible assets of £689,142 (2014: Loss £470,654). The Directors have considered
it prudent to write down the carrying value of the intangible assets in the balance sheet in order to meet the requirements
of IFRS. However, the Directors still believe the Company’s technology has great potential which will generate ongoing
revenue and attract new collaboration partners. Cash as at 31 May 2015 was £63,261 (31 May 2014: £874,432) ahead of
the placing announced on 3 June 2015 which raised £200,000. Cash balances at 31 October 2015 stood at £210,076.

The early part of the period saw the bedding in of the acquisitions with a focus on establishing the quality process and
serving the existing customer base. CCI’s business was a steady performer attaining ISO 13485, the international standard
relating to quality management systems for organisations involved in the manufacture of medical devices as well as
adding further resource to the regulatory team. CCI provides all the regulatory, technical and development support to
TexRAD while maintaining its principal business of supporting Papworth Hospital, Cambridgeshire with its PACS (Picture
Archiving and Communication System). TexRAD, our texture analysis software product for analysing images from CT scans,
was granted a European patent thus extending its portfolio of protected intellectual property.

There has been a focus on developing strategic collaborations for TexRAD while continuing the sales of research versions
to world-leading research institutions. During the year, TexRAD has been purchased by institutions including ELK in Berlin,
Velindre Cancer Centre in Cardiff, University of Tokyo Department of Radiology at the Institute of Medical Science in Japan,
CHU de Reims in France and Seoul National University Bundang Hospital in South Korea, among others. The company was
also delighted to announce on 9 September 2015 that TexRAD had completed its first sale to China with an installation
at Peking University Medical College Hospital, Beijing. We have also worked closely with leading research groups with a
view to commercialising TexRAD for specific applications. Since the year end and following the highly encouraging early
results from a retrospective study into TexRAD’s potential use in the treatment of urolithiasis (formation of kidney stones),
the Company formed a joint venture company, Stone Checker Software Ltd (‘Stone Checker’). Stone Checker will use our
intellectual property in conjunction with other biomarkers to develop an integrated product to assist clinicians to determine
which stones are most likely to respond to shock wave lithotripsy. We have, in the new financial year, formed another
joint venture company, Prostate Checker Ltd to target a more effective method of diagnosing and assessing treatment
options for prostate cancer.

Our collaborations with leading medical institutions are progressing well. Professor Ken Miles at the Diagnostic Radiology
department at the Princess Alexandra Hospital in Brisbane, Australia has been doing valuable work in examining TexRAD’s
potential for inclusion in radiology workflow, particularly in assisting treatment decisions and improving patient
management in lung cancer. Professor Choi at the University of Texas MD Anderson Cancer Center in Houston, Texas, USA
will be assessing TexRAD’s effectiveness for patients with kidney and adrenal cancers. Dr. Andrew Smith’s work on
metastatic kidney cell cancer at the University of Mississippi Medical Center in Jackson, Mississippi, USA using TexRAD has
been presented at the annual meeting of the Society of Computed Body Tomography and Magnetic Resonance in Toronto,
Canada. McGill University Hospital in Montreal, Quebec, Canada will be focussing on breast cancer and appraising TexRAD’s
use as a supplementary tool in digital mammography to achieve better patient management.

We continue to work with Imaging Endpoints II, LLC to serve the clinical trials market in the United States. We have
recently delivered the latest version of our TexRAD clinical trials software with extra features and we are now working
towards achieving 21 CFR Part 11 compliance. The last year has seen strong competition in the clinical trials market to
win the available business from pharmaceutical companies. Nevertheless TexRAD is expected to be used in a study of
colorectal cancer patients (stage IIIc) being treated with Bayer’s drug Regorafenib after adjuvant FOLFOX. Having
re-evaluated the Company’s previous strategy for seeking FDA approval for TexRAD, the board now recognise that there
are significant commercial opportunities available to Feedback if TexRAD were to be used in conjunction with other
biomarkers to create integrated products for specific clinical applications. These products could then be marketed much
more effectively to clinicians compared with a general software application. We may also prioritise CE marking in order
to accelerate development of commercial products for the European markets. As a consequence of this new focus, FDA
approval for TexRAD is no longer regarded as one of the Company’s principal corporate objectives.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Chairman’s Statement

CONTINUED

The Company today announces a reorganisation of the board of directors with immediate effect. Simon Barrell steps
down from the Board to devote more time to his other business commitments. Tom Charlton becomes non-executive
chairman and we welcome two of the senior management team, Dr Balaji Ganeshan and Mike Hayball to the plc board.
In addition we are delighted to announce the appointment of Dr Alex Menys as a non-executive director. Dr Menys is a
researcher at University College London and chief executive of Motilent Ltd, a developer of advanced medical imaging
software aimed at maximising the effectiveness of radiology in the evaluation of gastrointestinal function.

We are very encouraged by the continued interest shown in TexRAD and the number of research papers being published
which highlight its numerous potential applications. In order to generate optimum value for shareholders we shall be
looking to support our collaboration partners and invest further in our newly-formed joint venture companies. The year
ahead will also see the Company selling fewer research versions of TexRAD as we focus on setting up more joint venture
companies and collaborations targeting specific applications for TexRAD’s clinical use to provide the foundation for TexRAD’s
future commercial success.

Tom Charlton

Chairman

5 November 2015

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Strategic Report

The Directors present their Strategic Report and the audited financial statements for the year ended 31 May 2015.

Principal activities of the Group
On 19 May 2014 the Company acquired two subsidiaries in the medical imaging sector, CCI and TexRAD. The Group is now
focused on medical imaging. During the year, CCI acted as sales distributor for TexRAD to reduce operating costs.

Review of the business
The Chairman’s Statement on page 2 includes a general review of the Group’s business for the year.

Future developments in the business
The Group will continue to invest in the development of its products. In addition the Group’s future strategy is expected
to involve the formation of further joint ventures and collaborations where Feedback’s valuable intellectual property can
be combined with the specialist skills and intellectual property of other companies and research institutions. By adopting
this approach the Group is expected to generate licensing and royalty revenue streams and residual equity participation
in these joint ventures.

Group results and dividends
The Group loss for the year after taxation amounted to £1,111,433 (2014: Loss £470,654). This includes exceptional costs
in relation to the impairment of the intangible assets of £689,142 and termination costs in respect of the former chief
executive of £60,000. The Directors have taken the prudent decision to write down the carrying value of the intangible
assets in the balance sheet in order to meet the requirements of International Financial Reporting Standards (‘IFRS’).
However the Directors believe the Company’s technology has great potential and this write down does not reflect their
commercial assessment of the value of the company’s intellectual property. Future expenditure on software development
will be capitalised once the provisions of IAS 38 are met or written off as incurred until the criteria are met.

In the prior year exceptional costs associated with the acquisition of the subsidiaries and the share issues on 19 May 2014
amounted to £204,000 of which £40,000 was taken to the share premium account.

No dividends are payable for the year under review.

Principal risks and uncertainties

Economic and market risks

The subsidiary companies are both in the medical imaging market. The market is fragmented and the future success of
the business is dependent on the ability of the companies to secure new and renew current contracts. These contracts
are often with Government supported organisations and the timing of these can be dependent on market conditions. The
Group’s dependence on the award or renewal of contracts means that its revenue stream is not constant and has the
potential to be particularly irregular.

Joint venture risk

The joint ventures that have been formed by the Group in the new financial year may not produce any product
advancement on the TexRAD product and therefore may not lead to any future income for the Group, although the Group
has reduced the cost of any development by creating the joint venture. The joint ventures will report progress regularly
to the Board and the Board will be able to manage any potential risk to the Group by taking measures to reduce any
exposure to the joint ventures.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Strategic Report

CONTINUED

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 Company 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 Group’s business and/or revenue streams.

Product Development Risk

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 the product on a regular basis
and discusses with potential customers their requirements to mitigate this risk.

Liquidity

Management of liquidity risk concentrated on the maintenance of appropriate credit lines and funding sources to ensure
adequate cash resources for the Group’s operations. The Board regularly monitors the cash position of the Group and
ongoing cash requirements. The Board believes the Group could obtain further equity finance from the financial markets
to support its corporate strategy.

Credit Risk

The Company’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.

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 any technology business, the Company is reliant on
a relatively small number of highly skilled staff.

Post balance sheet events
On 3 June 2015 the Company raised £200,000 by the issue of 11,111,111 new ordinary shares at 1.8 pence per share
(‘Placing Shares’). The Placing included participation by two of Feedback’s directors, Tom Charlton who invested £50,400
for 2,800,000 Placing Shares and Trevor Brown who invested £18,000 for 1,000,000 Placing Shares.

On 6 July 2015 the Company issued 216,000 ordinary shares at 1.25 pence per share in lieu of fees for professional
services.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Strategic Report

CONTINUED

On 9 July 2015 the Company issued 1,600,000 shares following notification of the exercise of options at 1.25 pence per
share.

The Company now has 203,673,857 ordinary shares in issue.

The Group has also announced that it has entered into two joint ventures, Stone Checker Software Ltd with Oxford Stone
Group for the potential future clinical application of TexRAD on patients with kidney stones and Prostate Checker Ltd with
QUIBIM S.L for assisting the detection and diagnosis of prostate cancer.

Key performance indicators
During the year the Company maintained its cash position as the key performance indicator. The cash balance at 31 May
2015 was £63,261 (2014 £874,000). Cash at 31 October 2015 was £210,076.

By Order of the Board on 5 November 2015.

T W G Charlton

Director

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Directors’ Report

The Directors present their report and the Financial Statements for the year ended 31 May 2015.

Future developments
The future developments for the Group are discussed in the Chairman’s Statement and the Strategic Report.

Directors
The Directors of the Company during the year were:

(Resigned 5 November 2015)
(Resigned 24 October 2014)

S G Barrell
N S Shepheard
T E Brown
T W G Charlton

M P Hayball, Dr B Ganeshan and Dr A Menys were appointed on 5 November 2015.

Significant shareholders
Shareholders who have notified the company of shareholdings in excess of 3% as at 31 October 2015 are:

T E Brown
T W G Charlton
W R Ruffler
University of Sussex

Directors’ Biographies

Tom Charlton, Non-Executive Chairman

Number of Shares

55,089,111
49,524,808
12,597,893
9,400,000

27.05
24.32
6.19
4.62

Tom previously served as a director of Feedback plc between January 2003 and November 2004 and has been a significant
shareholder in the company since December 1997. He acted as chairman of Pinnacle Staffing Group plc from September
2008 until April 2011. Earlier in his career he was a managing director of Merrill Lynch Investment Managers and a director
of Mercury Asset Management Ltd. Tom is on both the Audit and Remuneration Committees.

Trevor Brown, Non-Executive Director

Trevor has been a strategic investor in real estate and equities for more than 30 years. He is a director of Braveheart
Investment Group plc, Peterhouse Corporate Finance Limited and Flying Brands Ltd. Trevor is on both the Audit and
Remuneration Committees.

Dr Balaji Ganeshan, Executive Director (appointed 5 November 2015)

Balaji is a Senior Imaging Scientist at the Institute of Nuclear Medicine, University College London and an Honorary Visiting
Research Fellow at the Brighton & Sussex Medical School, University of Sussex. He was instrumental in the original
development of the TexRAD texture analysis technology which resulted from his PhD in Biomedical Engineering. He is
responsible for developing new business opportunities for TexRAD and the Feedback Group.

Mike Hayball, Executive Director (appointed 5 November 2015)

Mike started his career as a medical physicist at Addenbrooke’s Hospital in Cambridge where he took his MSc in Radiation
Physics. From there he worked on cardiac imaging at Papworth Hospital before forming Cambridge Computed Imaging
Limited in 2001 where he is Managing Director. Mike is Technical Director for the Feedback Group.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Directors’ Report

CONTINUED

Dr Alex Menys, Non-Executive Director (appointed 5 November 2015)

Alex is a Post-Doctoral Research Associate at University College London where he obtained his PhD focusing on imaging
of the gastrointestinal tract with MRI. He is the founder and chief executive of Motilent Ltd, a developer of advanced
medical imaging software aimed at maximising the effectiveness of radiology in the evaluation of gastrointestinal function.
Alex is on both the Audit and Remuneration Committees.

Employment policies
The Group is committed to employee involvement in the business and there are consultative procedures available for
management and other employees to discuss matters of mutual interest.

The Group has a policy of non-discrimination in respect of sex, colour, religion, race, nationality or ethnic origin and the
recruitment of disabled persons is only subject to any overriding consideration of access and safety.

Creditor payment policies
The Group’s policy for all suppliers is to fix terms of payment when agreeing the terms of each business transaction, to
ensure the supplier is aware of those terms and to abide by the agreed terms of payment. Payment terms for the year
ended 31 May 2015 averaged 30 days (2014: 30 days).

Treasury policy
The Group has adopted formal treasury policies to control its financial instruments. It is a Group Treasury policy not to
undertake transactions of a speculative nature. Group cash flows are managed centrally and surplus cash is invested in
short-term financial instruments. Future transactions under the new Group are more likely to be undertaken in foreign
currencies and the Board will monitor the policies in place.

Compliance with these policies is monitored by the Board. Other than for currency disclosures, the Group has taken
advantage of the exemption permitting it not to treat short-term debtors and creditors as financial instruments.

Strategic report
Information regarding the Group’s principal risks, results, future developments and key performance indicators is provided
in the Strategic Report.

Statement of directors’ responsibilities
The Directors are responsible for preparing the Group and parent Company financial statements in accordance with
applicable laws and regulations.

Company law requires the Directors to prepare Group and parent Company financial statements for each financial year.
Under that law the Directors are required to prepare the Group and parent Company financial statements in accordance
with International Financial Reporting Standards (IFRS) as adopted by the EU.

The financial statements are required by law to give a true and fair view of the state of affairs of the Group and parent
Company and of the profit and loss of the Group for that period.

In preparing each of the Group and parent Company financial statements the Directors are required to:

(cid:1)

select suitable accounting policies and then apply them consistently;

(cid:1) make judgements and accounting estimates that are reasonable and prudent;

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Directors’ Report

CONTINUED

(cid:1)

state whether they have been prepared in accordance with IFRSs as adopted by the EU subject to any material
departures disclosed and explained in the parent Company financial statements; and

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and
the parent Company will continue in business.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time
the financial position of the Group and parent Company and to enable them to ensure that the financial statements
comply with the Companies Act 2006 and Article 4 of the IAS Regulation. They have general responsibility for taking such
steps as are reasonably open to safeguard the assets of the Group and parent Company and to prevent and detect fraud
and other irregularities.

Under applicable law and regulations the Directors are also responsible for preparing a Strategic Report and a Directors’
Report to comply with that law and those regulations.

In determining how amounts are presented within terms in the income statement and balance sheet the Directors have
had regard to the substance of the reported transaction or arrangement in accordance with generally accepted accounting
principles or practice.

Audit information
The Directors who were in office on the date of approval of these financial statements have confirmed, as far as they are
aware, there is no relevant audit information of which the auditors are unaware.

Each of the Directors have confirmed that they have taken all the steps that they ought to have taken as Directors in order
to make themselves aware of any relevant audit information and to establish that the Company’s auditors are aware of
that information.

A resolution to reappoint haysmacintyre as auditors to the Company will be proposed at the Annual General Meeting.

By Order of the Board on 5 November 2015.

T W G Charlton

Director

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Corporate Governance Statement

Under the AIM rules the Group is not obliged to implement the provisions of the UK Corporate Governance Code (‘the
Code’). However, the Group is committed to applying the principles of good governance contained in the Code as
appropriate to a group of this size.

In common with other organisations of a similar size, the Executive Director was heavily involved in the day-to-day
running of the business. The Board of Directors meets regularly and is responsible for formulating strategy, and for the
trading subsidiaries, monitoring financial performance and approving major items of capital expenditure. All Directors
have access to the advice and services of the Company Secretary.

During the year the Board comprised one Executive Director and three Non-Executive Directors. In view of the size and
management structure of Feedback plc, the Company has not complied with certain aspects of the Combined Code as
discussed below.

Board of Directors
The Board included up to three Non-Executive Directors which was considered appropriate. The Board has scheduled
monthly meetings and others as required. The Board retains full responsibility for the direction and control of the Group.
No strategic powers have been delegated and for these reasons the Board did not have, during the year, a formal schedule
of matters specifically reserved to it (Paragraph A1 of the Code).

There is currently no formal agreed procedure for Directors in the furtherance of their duties to take independent
professional advice as necessary at the Company’s expense (paragraph B5 of the Code).

Non-executive Directors
The appointment of Non-Executive Directors is a matter for the Board as a whole. Although recommended by the Code,
there is currently no formal selection process. The Non-Executive Directors have contracts for services for an unspecified
period. (Paragraph B2 of the Code). Non-Executive Directors are subject to re-election every three years.

Terms and conditions of appointment of the Non-Executive Directors are available for inspection.

Executive Directors
Directors are appointed by the Board of Directors but stand for election by the shareholders at the Annual General Meeting.
The Executive Directors are subject to re-election every three years.

Board Committees
A Remuneration Committee was in place comprising the three Non-Executive Directors. The Remuneration Committee has
two scheduled meetings in the year. All serving members attended both meetings held in the year.

An Audit Committee was in place comprising two Non-Executive Directors. The Company’s approach to internal control is
described below. The Audit Committee has two scheduled meetings in the year. Both serving members attended both
meetings held in the year.

There is no Nomination Committee. Given the size of the Group, the Board do not consider a Nomination Committee
appropriate (paragraph B2 of the Code).

Following the change in Board composition the committees will be reviewed, although it is the intention that the non-
executive directors will continue to serve on the Audit and Remuneration committees.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Corporate Governance Statement

CONTINUED

Performance evaluation
There is currently no formal performance evaluation of the board, its committees and its individual directors (paragraph
A6.1 of the Code).

Communication with shareholders
The Directors are available to shareholders at any time to discuss strategy and governance matters.

In addition, all Company announcements are published on the Company’s website, together with financial results.

All shareholders have the opportunity to ask questions and express their views at the Company’s Annual General Meeting,
at which all Directors are available to take questions.

Audit and internal control
The primary role of the Audit Committee was to keep under review the Group’s financial systems and controls and its
financial reporting procedures. In fulfilling this role, the Committee received and reviews work carried out by the external
auditors and their findings.

The Board had overall responsibility for operating and monitoring the system of internal control within the Group and for
monitoring its effectiveness. The system includes an on-going process for identifying, evaluating and managing significant
business risks. Although no system of internal control can provide absolute assurance against material misstatement or
loss, the Group’s system was designed to provide the directors with reasonable assurance that any material problems were
identified on a timely basis and dealt with appropriately.

Guidance to Directors of UK Companies on internal control procedures and good practice on risk management is provided
by the Financial Reporting Council.

The Audit Committee reviewed the effectiveness of the internal controls on an annual basis on behalf of the Board and
considered that they have complied throughout the year ended 31 May 2015 with those provisions of the Code which
they consider to be practicable and appropriate for a relatively small public company.

The key elements of the system, which had been designed to meet the specific needs and business risks of the Group,
include:

(cid:1)

clearly defined organisation structures with segregation of duties wherever practicable;

agreement of Group short term financial objectives and business plans;

(cid:1) monthly review by the Board of Group Financial Statements and monitoring of results against budgets;

(cid:1)

Board control over treasury, taxation, legal, insurance and personnel issues;

Board control over appraisal, review and authorisation of capital expenditure.

In common with organisations of similar size the Executive Director was and the Non-Executive Directors are, heavily
involved in the day-to-day running of the business. The directors believe that although the Company’s controls may be
slightly less formal than those of larger companies, the continued close involvement of the Non-Executive Directors more
than compensated for this.

The Board believes that it is not currently appropriate for the Company to maintain an internal audit function because of
the small size of the Group.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Corporate Governance Statement

CONTINUED

The Audit Committee considered the independence and objectivity of the external auditors on an annual basis, with
particular regard to non-audit services. The split between audit and non-audit fees for the year and information on the
nature of the non-audit fees appear in note 6 to the financial statements. The non-audit fees are considered by the
Committee not to affect the independence or objectivity of the auditors. The Audit Committee monitors such costs in the
context of the audit fee for the year, ensuring that the value of non-audit services does not increase to a level where it
could affect the auditors’ objectivity and independence.

With the exception of the matters referred to above the Company has complied throughout the financial year with
provisions of The UK Corporate Governance Code (September 2012 edition).

Going concern
After making enquiries, the Directors have a reasonable expectation that the Company has adequate resources, or could
obtain further equity finance from the financial markets to continue in operational existence for the foreseeable future.
For this reason they continue to adopt the going concern basis in preparing the accounts. Further information in respect
of the Director’s consideration of going concern is included in note 3(c) to the financial statements.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Independent Auditors Report

We have audited the financial statements of Feedback plc for the year ended 31 May 2015 which comprise the
Consolidated Statement of Comprehensive Income, the Consolidated and Company Changes in Equity, the Consolidated
and Company Balance Sheets, the Consolidated and Company Cash Flow Statements and the related notes. The financial
reporting framework that has been applied in their preparation is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union and, as regards the parent company financial statements, as applied
in accordance with the provisions of the Companies Act 2006.

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.

Respective responsibilities of directors and auditors
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. Our responsibility
is to audit and express an opinion on the financial statements in accordance with applicable law and International
Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical
Standards for Auditors.

Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the Financial Reporting Council’s website at
www.frc.org.uk/auditscopeukprivate.

Opinion on financial statements
In our opinion:

(cid:1)

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 31 May 2015 and of the group’s loss for the year then ended;

the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European
Union;

the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union and as applied in accordance with the provisions of the Companies Act 2006; and

the financial statements have been prepared in accordance with the requirements of the Companies Act 2006 and,
as regards the group financial statements, Article 4 of the IAS Regulation.

Emphasis of matter – Going Concern
In forming our opinion, which is not modified, we have considered the adequacy of the disclosures made within Note 3(c)
of the accounting policies regarding the group and parent company’s ability to continue as a going concern. The group
incurred a net loss of £1,111,325 in the year and had net current liabilities at the year-end date of £29,940. These factors,
along with the matters explained in note 3(c) of the accounting policies indicate the existence of a material uncertainty
which may cast a significant doubt about the group and company’s ability to continue as a going concern.

The financial statements do not include the adjustments that would result if the group and company were unable to
continue as a going concern.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Independent Auditors Report

CONTINUED

Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and Directors’ Report for the financial year for which the
financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you
if, in our opinion:

(cid:1)

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

(cid:1) we have not received all the information and explanations we require for our audit.

George Crowther (Senior statutory auditor)
forandonbehalfofhaysmacintyre,StatutoryAuditor

5 November 2015

26 Red Lion Square
London
WC1R 4AG

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

Statement of Comprehensive Income

FOR THE YEAR ENDED 31 MAY 2015

Revenue
Cost of sales

Gross profit
Other operating expenses
Costs associated with the acquisition of subsidiaries
Impairment of intangible assets

Total operating expenses

Operating loss
Net finance income

Loss on ordinary activities before taxation
Tax credit

Loss on ordinary activities after tax

Loss for the year attributable to the equity Shareholders of the Company
Other comprehensive income/(expense)
Translation differences on overseas operations

Total comprehensive expense for the year

Loss per Share (pence)
Basic and diluted

FEEDBACK

Note

5
5
14

6
7

2015
£

381,970
(1,434)

380,536
(888,600)
—
(689,142)

2014
£

7,250
—

7,250
(313,904)
(164,000)
—

(1,577,742)

(477,904)

(1,197,206)
908

(470,654)
—

(1,196,298)
84,865

(470,654)
—

(1,111,433)

(470,654)

(1,111,433)

(470,654)

108

(3,104)

(1,111,325)

(473,758)

(0.58)

(0.35)

The notes on pages 21 to 41 form part of these financial statements.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Consolidated Statement of Changes in Equity

FOR THE YEAR ENDED 31 MAY 2015

Group

At 1 June 2013
New shares issued
Costs associated with the
raising of funds
Share option and warrant costs
Convertible debt raised in the year
Total comprehensive expense
for the year

Share
Capital
£

327,367
149,500

—
—
—

—

Share
Premium
£

851,334
598,000

(40,000)
—
—

Capital
Reserve
£

Retained
Earnings
£

Convertible
Translation Debt Option
Reserve
£

Reserve
£

Total
£

299,900
—

(509,413)
—

(207,000)
—

—
—

762,188
747,500

—
—
—

—
13,728
—

—
—
—

—
—
189,000

(40,000)
13,728
189,000

—

— (470,654)

(3,104)

— (473,758)

At 31 May 2014

476,867

1,409,334

299,900

(966,339)

(210,104)

189,000

1,198,658

Share option and warrant costs
Total comprehensive expense
for the year

—

1,289

—

1,289

— (1,111,433)

108

— (1,111,325)

At 31 May 2015

476,867

1,409,334

299,900 (2,076,483)

(209,996)

189,000

88,622

Company

At 1 June 2013
New shares issued
Costs associated with the raising of funds
Share option and warrant costs
Convertible debt raised in the year
Total comprehensive expense for the year

Share
Capital
£

Share
Premium
£

Convertible
Retained Debt Option
Reserve
Earnings
£
£

Total
£

327,367
149,500
—
—
—
—

851,334
(396,876)
598,000
—
(40,000)
—
—
13,728
—
—
— (492,770)

—
—
—
—
189,000

781,825
747,500
(40,000)
13,728
189,000
— (492,770)

At 31 May 2014

476,867

1,409,334

(875,918)

189,000

1,199,283

Share option and warrant costs
Total comprehensive expense for the year

—
—

—
1,289
— (1,172,124)

At 31 May 2015

476,867

1,409,334 (2,046,753)

189,000

28,448

The notes on pages 21 to 41 form part of these financial statements.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

Consolidated Balance Sheet

AT 31 MAY 2015

Assets
Non-current assets
Property, plant and equipment
Intangible assets

Current assets
Trade receivables
Other receivables
Cash and cash equivalents

Total assets

Equity
Capital and reserves attributable to
the Company’s equity shareholders
Called up share capital
Share premium account
Capital reserve
Translation reserve
Retained earnings

Convertible debt option reserve

Total Equity

Liabilities
Deferred tax liabilities

Current Liabilities
Trade payables
Other payables

Total Liabilities

Total Equity and Liabilities

FEEDBACK

Notes

2015
£

2014
£

13
14

6,915
139,558

1,444
848,000

146,473

849,444

110,870
101,259
63,261

87,610
120,879
874,432

275,390

1,082,921

421,863

1,932,365

476,867
1,409,334
299,900
(209,996)
(2,076,483)

476,867
1,409,334
299,900
(210,104)
(966,339)

(100,378)
189,000

1,009,658
189,000

88,622

1,198,658

27,911

80,000

40,368
264,962

225,157
428,550

305,330

653,707

333,241

733,707

421,863

1,932,365

The financial statements were approved and authorised for issue by the Board of Directors on 5 November 2015 and were
signed below on its behalf by:

T W G Charlton

Chairman

The notes on pages 21 to 41 form part of these financial statements.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Company Balance Sheet

AT 31 MAY 2015

Company Number 00598696

Assets
Non-current assets
Property, plant and equipment
Investments

Current assets
Other receivables
Cash and cash equivalents

Total assets

Equity
Capital and reserves attributable to
the Company’s equity shareholders
Called up share capital
Share premium account
Retained earnings

Convertible debt option reserve

Total Equity

Current liabilities
Trade payables
Other payables

Total current liabilities

Total Equity and Liabilities

Notes

2015
£

2014
£

13
12

—
—

—

52,993
43,636

—
467,456

467,456

303,905
618,446

96,629

922,351

96,629

1,389,807

476,867
1,409,334
(2,046,753)

476,867
1,409,334
(875,918)

(160,552)
189,000

1,010,283
189,000

28,448

1,199,283

33,723
34,458

158,737
31,787

68,181

190,524

96,629

1,389,807

The financial statements were approved and authorised for issue by the Board of Directors on 5 November 2015 and were
signed below on its behalf by:

T W G Charlton

Chairman

The notes on pages 21 to 41 form part of these financial statements.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

Consolidated Cash Flow Statement

FOR THE YEAR ENDED 31 MAY 2015

Cash flows from operating activities
Loss before tax

Adjustmentsfor:
Share option costs
Cost of acquisition of subsidiaries
Net finance income
Depreciation and amortisation
Impairment of intangible assets
Foreign exchange difference
(Increase)/decrease in trade receivables
Decrease/(increase) in other receivables
(Increase)/decrease in trade payables
(Decrease) in other payables

Net cash used in operating activities

Cash flows from investing activities
Purchase of tangible fixed assets
Purchase of intangible assets
Net finance income received
Proceeds from sale of assets held for resale
Cash received on purchase of subsidiaries
Cash paid on acquisition of subsidiaries
Cash on acquisition of subsidiaries including costs

Net (used by)/cash generated from investing activities

Cash flows from financing activities
Loan repayment
Equity based loan received
Net proceeds of share issue

Net cash generated from financing activities

Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

FEEDBACK

2015
£

2014
£

(1,196,298)

(470,654)

1,289
—
(908)
184,170
689,142
108
(23,260)
52,396
(184,789)
(163,588)

173
164,000
—
—
—
3,104
—
(79,725)
56,436
(155,039)

554,560

(11,051)

(641,738)

(481,705)

(9,329)
(161,012)
908
—
—
—
—

—
—
—
940,000
65,045
(31,400)
(164,000)

(169,433)

809,645

—
—
—

—

(811,171)
874,432

(245,000)
189,000
260,000

204,000

531,940
342,492

63,261

874,432

The notes on pages 21 to 41 form part of these financial statements.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Company Cash Flow Statement

FOR THE YEAR ENDED 31 MAY 2015

Cash flows from operating activities
Loss before tax
Adjustmentsfor:
Share options costs
Cost of acquisition of subsidiaries
Provision against intercompany receivable
Provision against investment in subsidiaries
Decrease/(increase) in other receivables
(Decrease)/increase in trade payables
Increase/(decrease) in other payables

Net cash used in operating activities

Cash flows from investing activities
Loans to subsidiary undertakings
Repayment of intercompany loan
Cash on acquisition of subsidiaries including costs

Net cash (used in)/generated from investing activities

Cash flows from financing activities
Equity based loan received
Loan repayment
Net proceeds of share issue

Net cash generated from/(used in) financing activities

Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

2015
£

2014
£

(1,172,124)

(492,816)

1,289
—
356,693
467,455
49,221
(125,014)
2,670

173
164,000
19,526
—
(81,785)
56,436
(151,325)

752,314

7,025

(419,810)

(485,791)

(155,000)
—
—

(189,000)
940,000
(190,400)

(155,000)

560,600

—
—
—

—

(574,810)
618,446

189,000
(245,000)
260,000

204,000

278,809
339,637

43,636

618,446

The notes on pages 21 to 41 form part of these financial statements.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Notes to the Financial Statements

1. General information
On 19 May 2014 the Company acquired two subsidiaries in the medical imaging sector, Cambridge Computed Imaging
Limited and TexRAD Limited.

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 Grange Park, Broadway, Bourn, Cambridgeshire,
CB23 2TA.

The Company is listed on AIM of the London Stock Exchange. These Financial Statements were authorised for issue by the
Board of Directors on the 5 November 2015.

2. Adoption of new and revised International Financial Reporting Standards
No new International Financial Reporting Standards (“IFRS”), amendments or interpretations became effective in 2015
which had a material effect on this financial information.

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 apply to the Group and are effective for
accounting periods beginning on or after the dates shown below:

IFRS Standards and Interpretations issued (and EU adopted) but not yet effective:

IFRS 9 Financial Instruments (effective periods beginning 1 January 2018)

IFRS 15 Revenue from Contracts with Customers (effective periods beginning 1 January 2018)

The Group has not early adopted these amended standards and interpretations. The Directors do not anticipate that the
adoption of these standards and interpretations will have a material impact on the reported results.

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 2014 and 2015 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.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Notes to the Financial Statements

CONTINUED

3. Significant accounting policies (continued)

The Directors have produced forecasts which show that the Group and Company have adequate cash resources for at least
the next twelve months from the date of this report and the Directors believe the Group could obtain further equity
finance from the financial markets to support its re-evaluated corporate strategy, if required. The Directors believe that
the company is 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 previously recognised as an
expense are not recognised as an asset in a subsequent period. Development costs that have a finite useful life and that
have been capitalised were 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

Software development

Customer relationships

Development expenditure

4 years

3 years

(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. 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.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Notes to the Financial Statements

CONTINUED

3. Significant accounting policies (continued)
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:

Plant and equipment

Motor vehicles

10 – 50% p.a.

25 – 33% 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. Assets and liabilities of the overseas
subsidiaries are translated into sterling at the closing rate of exchange and trading results at the average rate of exchange
for the period. These translation differences are dealt with as a movement in reserves.

(k) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for
services provided in the normal course of business, net of VAT. The company 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 development that is contracted on a time and materials basis is recognised as the services
are performed.

Revenue relating to the sale of software licences is recognised over the period to which the licence relates.

Revenue from services provided is determined by management’s assessment of the percentage completed of each
contract. Management determine the percentage of completion by considering the work performed to date based upon
internal reports and agreed project milestones.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Notes to the Financial Statements

CONTINUED

3. Significant accounting policies (continued)

(l) Pension Costs

The Company operated a defined contribution pension scheme during the year. The pension charge represents the amounts
payable by the Company to the scheme in respect of that year.

(m) Taxation

The tax expense represents the sum of the current tax expense and deferred tax expense.

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:

(cid:1)

short term debtors and creditors are not treated as financial assets or financial liabilities except for the currency
disclosures.

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 issues equity-settled share-based payment transactions to certain employees and has 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.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Notes to the Financial Statements

CONTINUED

3. Significant accounting policies (continued)

(p) Key sources of estimating uncertainty

The preparation of financial statements requires management and 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 which form the basis for making judgments about the carrying value of assets and liabilities
that are not readily apparent from other sources.

(cid:1)

Intangible assets – 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, including goodwill, has been made.

Fair value measurement – a number of assets included in the Group’s financial statements require measurement at
fair value. The following items are carried in the financial statements at fair value:

The fair value of the consideration paid for subsidiary undertakings less any impairment of those values

The fair value of the assets acquired with subsidiary undertakings

The fair value of the intercompany receivables less the estimate of any provision in respect of the
irrecoverability of those receivables

The fair value of the share options and warrants issued.

4. Segmental reporting
The Directors have determined the operating segments based on the management reports that are used to make strategic
decisions.

Following the acquisition of Cambridge Computed Imaging Limited and TexRAD Limited in 2014 the Group has now defined
a Medical Imaging segment.

Year ended 31 May 2015

Revenue
External

Loss before tax

Balance sheet
External Assets
External Liabilities

Capital expenditure

Medical
Imaging
£

Head
Office
£

Total
£

381,970

—

381,970

(848,281)

(348,017)

(1,196,298)

342,143
(265,060)

79,720
(68,181)

421,863
(333,241)

77,083

11,539

88,622

170,341

—

170,341

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Notes to the Financial Statements

CONTINUED

4. Segmental reporting (continued)

Year ended 31 May 2014

Revenue
External

Loss before tax

Balance sheet
External Assets
External Liabilities

Capital expenditure

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

United Kingdom
Europe
Rest of the world

Total

External revenue by
location of customer

2015
£

268,053
74,882
39,035

381,970

2014
£

7,250
—
—

7,250

5. Other operating expenses

Administrative costs:

Other
Amortisation and depreciation costs
Termination costs
Costs associated with the acquisition of subsidiaries
Impairment of intangible assets

Medical
Imaging
£

Head
Office
£

Total
£

7,250

—

7,250

—

(470,654)

1,010,014
(543,183)

922,351
(190,524)

1,932,365
(733,707)

466,831

731,827

1,198,658

20,000

—

20,000

Capital expenditure by
location of assets

Total assets by
location of assets

2015
£

2014
£

421,863
—
—

1,932,365
—
—

2015
£

170,341
—
—

421,863

1,932,365

170,341

2014
£

20,000
—
—

20,000

2015
£

2014
£

644,430
184,170
60,000
—
689,142

313,904
—
—
164,000
—

1,577,742

477,904

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

Notes to the Financial Statements

CONTINUED

6. Operating loss

This is stated after charging
Depreciation and amortisation

Owned assets
Amortisation of intangible assets
Impairment of intangible assets

Auditors’ remuneration

Audit of parent company and group accounts
Audit of subsidiaries
Tax and other services

Operating lease rentals
Land and buildings

7. Net finance income

Interest received

8. Directors and employees

Number of employees
Selling and distribution
Administration
Research and development

Staff costs
Wages and salaries
Redundancy payments
Social security costs
Payments to defined contribution pension scheme

FEEDBACK

2015
£

2014
£

3,858
180,312
689,142

10,000
9,000
4,000

—
—
—

11,000
9,000
4,000

8,115

—

2015
£

908

2014
£

—

2015

2014

Average

Year end

Average

Year end

1
4
2

4
3
2

—
3
—

—
8
—

2015
£

2014
£

358,445
60,000
42,627
9,345

105,000
—
14,107
—

470,417

119,107

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Notes to the Financial Statements

CONTINUED

8. Directors and employees (continued)
The value of all elements of remuneration received by each Director in the year was as follows:

Year ended 31 May 2015
Executive Director
N S Shepheard

Non-executive Directors
S G Barrell*
T E Brown
T W G Charlton

Total

Year ended 31 May 2014
Executive Directors
N S Shepheard

Non-executive Directors
S G Barrell*
T E Brown (appointed 19 January 2014)
T W G Charlton (appointed 19 January 2014)

Total

Mr Shepheard left the business on 29 April 2015.

Salary
£

Fees
£

Termination
payments
£

Total
£

110,000

—

60,000

170,000

—
—
—

110,000

47,650
—
—

47,650

—
—
—

47,650
—
—

60,000

217,650

100,000

—

—
—
—

100,000

36,500
4,000
4,000

44,500

—

—
—
—

—

100,000

36,500
4,000
4,000

144,500

Mr N S Shepheard held options over 5,000,000 which were forfeited as part of his settlement agreement (2014:
5,000,000).

Mr S G Barrell holds options over 800,000 shares exercisable on or after 19 May 2015. Further details can be found under
Note 18.

* S G Barrell is paid consultancy fees through an agreement with SGB Consulting.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

Notes to the Financial Statements

CONTINUED

9. Taxation on loss on ordinary activities

(a) The tax charge for the year:
UK Corporation tax

Current tax
Deferred tax charge

(b) Tax reconciliation
Loss on ordinary activities before tax

Loss on ordinary activities at the standard rate of corporation tax
in the UK of 20.83% (2014 – 21 %)

Effects of:
Expenses non-deductible for tax purposes
Additional deduction for R&D expenditure
Excess tax losses carried forward
Other timing differences and goodwill amortisation

Tax charge for the year

FEEDBACK

2015
£

2014
£

(84,865)

(32,776)
(52,089)

(84,865)

—

—
—

—

(1,196,298)

(470,653)

(249,189)

(98,837)

1,436
(11,884)
—
174,772

(84,865)

34,440

64,397
—

—

(c) Factors which may affect future tax charges
In view of the tax losses carried forward there is a deferred tax amount of approximately £299,130 (2014: £216,000) 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 – group

The deferred tax included in the balance sheet is as follows:

Deferred tax liability
Deferred tax on development expenditure
As at 1 June 2014
Charge in the year
Acquired on fair value of the subsidiary undertakings

As at 31 May 2015

(e) Deferred tax – company

2015
£

2014
£

80,000
(52,089)
—

27,911

—
—
80,000

80,000

In view of the tax losses carried forward there is a deferred tax amount of approximately £268,000 (2014: £169,000) 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.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Notes to the Financial Statements

CONTINUED

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 £1,172,124 after provision
for the cost of investment and the repayment of intercompany loans following the write down of the intangible assets
under the requirements of IFRS (2014: loss after costs in relation to the acquisition of subsidiaries of £164,000 was
£492,770) which is dealt with in the financial statements of the parent company.

11. Loss per share
Basic earnings per share is calculated by reference to the loss on ordinary activities after taxation of £1,111,433 (2014:
£470,654) and on the weighted average of 190,746,746 (2014: 132,912,773) shares in issue.

Net loss attributable to ordinary equity holders

As at
31 May 2015
£

As at
31 May 2014
£

(1,111,433)

(470,654)

As at
31 May 2015

As at
31 May 2014

Weighted average number of ordinary shares for basic earnings per share

190,746,746 132,912,773

Effect of dilution:

Share Options
Warrants

—
—

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

190,746,746 132,912,773

Loss per share (pence)

Basic
Diluted

(0.58)
(0.58)

(0.35)
(0.35)

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

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

Notes to the Financial Statements

CONTINUED

12. Investments

Company – Shares in Group undertakings
Cost
At 1 June 2013
Additions

At 31 May 2014

As at 31 May 2015

Provisions
At 1 June 2012
Provided in the year

At 31 May 2013

Provided in the year

At 31 May 2014

Provided in the year

At 31 May 2015

Net Book Value
At 31 May 2015

At 31 May 2014

At 31 May 2013

FEEDBACK

Total
£

1,867,000
467,455

2,334,455

1,867,000
—

1,867,000

—

1,867,000

467,455

2,334,455

—

467,455

—

All of the above investments are unlisted.

Following the prudent write down of the intangible assets under the requirements of IFRS in the subsidiaries, the
subsidiaries’ financial statements show that they have net liabilities. 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 companies during the year, all the shares of which being beneficially held by Feedback
PLC, were as follows:

Company

Activity

Feedback Black Box Company Limited

Non trading

Feedback Data GmbH

Non trading
(liquidated October 2015)

Country of and
incorporation
operation

Proportion of Shares held

England

Germany

100% Ordinary £1

100% Specific capital

Brickshield Limited

Non trading

Cambridge Computed Imaging Limited

Medical Imaging

England

100% Ordinary £1

100% A Ordinary £1
100% B Ordinary 1p

TexRAD Limited

Medical Imaging

England

100% Ordinary 1p

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Notes to the Financial Statements

CONTINUED

12. Investments (continued)
TexRAD Limited is owned 100% by virtue of a direct holding by Feedback plc of 91% and an indirect holding via Cambridge
Computed Imaging Limited of 9%.

Feedback Data GmbH is a subsidiary of Feedback plc following the transfer of ownership from Feedback Data plc on
31 May 2013. The company was liquidated in October 2015.

All the subsidiary companies have been included in these consolidated financial statements.

2014 Acquisitions

Acquisition of Cambridge Computed Imaging Limited and TexRAD Limited in May 2014.

Intangible assets
Tangible assets

Current assets
Debtors
Cash
Deferred tax
Net liabilities

Cost of acquisition
Issue of shares
Cash consideration
Issue of warrants

Cambridge
Computed
Imaging
Limited
£

114,972
1,444

TexRAD
Limited
£

41,479
—

Total
£

Fair value
adjustments
£

156,451
1,444

400,000
—

Fair Value
of assets
acquired
£

556,451
1,444

116,416

41,479

157,895

400,000

557,895

31,658
29,290
—
(260,559)

91,600
35,755
—
(209,598)

123,258
65,045
—
(470,157)

—
—
(80,000)
—

123,258
65,045
(80,000)
(470,157)

(83,194)

(40,764)

(123,959)

320,000

196,041

200,000
13,200
—

227,501
13,200
13,555

427,501
26,400
13,555

213,200

254,256

467,456

—
—
—

427,501
26,400
13,555

467,456

Goodwill arising on consolidation representing intangible assets not qualifying for separable recognition.

271,415

The costs related to the acquisitions of £164,000 were recognised as part of the administration costs, although shown
separately, in the statement of comprehensive income in the year to 31 May 2014. The subsidiaries contributed £7,000
of revenue to the group and no profit or loss in the period since acquisition.

In 2014, had the subsidiaries been part of the Group for the full year from 1 June 2013, Group revenue would have been
£364,000 and Group loss would have been £471,000 for the year ended 31 May 2014.

None of the goodwill arising on consolidation is tax deductible.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

Notes to the Financial Statements

CONTINUED

13. Property, plant and equipment

Group
Cost of valuation
At 31 May 2013
Acquired with subsidiary undertakings

At 31 May 2014
Additions

As 31 May 2015

Depreciation
At 31 May 2013
Charge for the year

At 31 May 2014
Charge for the year

At 31 May 2015

Net Book Value
At 31 May 2015

At 31 May 2014

At 31 May 2013

FEEDBACK

Plant and
Equipment
£

—
1,444

1,444
9,329

Total
£

—
1,444

1,444
9,329

10,773

—
—

—
3,858

3,858

6,195

1,444

—

—
—

—
3,858

3,858

6,195

1,444

—

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Notes to the Financial Statements

CONTINUED

14. Intangible assets

Group
Cost
At 31 May 2013
Additions
Acquired with subsidiary

At 31 May 2014
Additions

At 31 May 2015

Amortisation
At 31 May 2013
Charge for the year

At 31 May 2014
Charge for the year
Impairment charge in the year

At 31 May 2015

Net Book Value
At 31 May 2015

At 31 May 2014

At 31 May 2013

Software
£

Customer
relationships
£

Patents
£

Goodwill
£

Total
£

—
20,000
415,000

435,000
128,099

—
—
100,000

100,000
—

—
—
41,585

41,585
32,913

—
—
271,415

271,415
—

—
20,000
828,000

848,000
161,012

563,099

100,000

74,498

271,415

1,009,012

—
—

—
145,372
417,727

563,099

—
—

—
25,000
—

25,000

—
—

—
9,940
—

9,940

—
—

—
—
271,415

—
180,312
689,142

271,415

869,454

—

75,000

64,558

—

139,558

435,000

100,000

41,585

271,415

848,000

—

In accordance with the accounting policies and IFRS the Directors have assessed the carrying value of the intangible
assets. Following their assessment the Directors have taken the prudent decision to write down the carrying value of some
of the intangible assets in the balance sheet in order to meet the requirements of IFRS. However the Directors believe
the Group’s technology has great potential and this write down does not reflect their commercial assessment of the value
of the company’s intellectual property. Future expenditure on software development will be capitalised once the provisions
of IAS 38 are met or written off as incurred until the provisions are met. The customer lists and patents are deemed to
have ongoing value to the group.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

Notes to the Financial Statements

CONTINUED

15 Other receivables

Amounts falling due within one year
Amounts owing by subsidiary undertakings
Other receivables
Corporation tax recoverable
Prepayments

FEEDBACK

Group

Company

2015
£

2014
£

2015
£

2014
£

—
14,290
32,775
54,194

—
94,638
—
26,241

16,909
5,699
—
30,385

209,000
78,350
—
16,555

101,259

120,879

52,993

303,905

Amounts of £356,991 due from the subsidiaries to Feedback plc have been provided for following the write down of the
intangible assets under the requirements of IAS 36. The Directors have made a provision against the amounts due from
the subsidiaries to reflect the impairment in the Feedback plc balance sheet.

16. Other payables

Amounts falling due within one year
Other payables
Other taxes and social security
Accruals
Deferred income

Group

Company

2015
£

2014
£

2015
£

2014
£

9,396
33,047
28,701
193,818

195,743
12,711
48,666
171,430

264,962

428,550

16
16,418
18,024
—

34,458

6,003
5,029
20,755
—

31,787

In 2014 comparatives included in other payables is an amount of £189,000 due to T Charlton. Mr Charlton had a debt due
by Cambridge Computed Imaging Limited to Panvista Limited assigned to him. For further detail see note 22.

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 risks:

(cid:1)

Credit risk

Foreign currency risk

Liquidity risk

Cash flow interest rate risk

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Notes to the Financial Statements

CONTINUED

17. Financial instruments (continued)

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 year are 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 was exposed to credit risk primarily on its trade receivables, which are spread over a range of countries, a factor
that helped 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 was 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 was:

Current financial assets
Trade and other receivables
Cash and cash equivalents

Cash, loans and receivables

2015
£

2014
£

212,129
63,261

208,489
874,432

275,390

1,082,921

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Notes to the Financial Statements

CONTINUED

17. Financial instruments (continued)

Analysis of trade receivables

2015

2014

Total

Current

110,870

17,957

87,610

6,451

30 days
past due

69,259

79,399

60 days
past due

3,591

1,760

90 days
past due

20,063

—

The Group policy is to make provisions against those debts that are overdue, unless there are grounds for believing that
all or some of the debts would be collected. During the year the value of provisions made in respect of bad and doubtful
debts was £Nil (2014: £Nil). Any provision made is included within the management and administration costs in the
Consolidated Income Statement.

Foreign currency risk

Foreign exchange transaction risk arises when the Group enters into transactions denominated in a currency other than
the functional currency. Excess 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.

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 2015:

Trade receivables
Cash and cash equivalents

2015
£

43,787
—

43,787

2014
£

72,081
—

72,081

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 arrangements as at 31 May 2015 or at 31 May 2014.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Notes to the Financial Statements

CONTINUED

17. Financial instruments (continued)

Liquidity risk

Cash flow forecasting is performed 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.

Current financial liabilities
Trade and other payables

Financial liabilities
measured
at amortised cost

2015
£

2014
£

111,512

483,153

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

2015
Trade and other payables

2014
Trade and other payables

Cash flow interest rate risk

Carrying
amount

Contractual
cash flow

6 months
or less

6-12
months

1 or more
years

111,512

483,153

—

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, convertible debt
option reserve and accumulated retained earnings.

The group’s objectives when managing the capital are:

(cid:1)

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.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

Notes to the Financial Statements

CONTINUED

18. Share capital and reserves

Authorised and issued share capital
Ordinary shares of 0.25 pence each

Allotted, called up and fully paid share capital:

As at 1 June 2014

As at 31 May 2015

Share Options

FEEDBACK

2015
£

2014
£

476,867

Number

190,746,746 190,746,746

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 1.64%. The expected volatility is based on historical volatility over the last
two years and is estimated to be 25%. The average share price during the year was 0.85 pence. During the year the
Company had the following share options in issue:

Number of options
At 1 June
2014

4,000,000
5,800,000
4,000,000
4,000,000

17,800,000

Granted

Cancelled

—
—
—
—

4,000,000
1,000,000
—
—

At 31 May
2015

—
4,800,000
4,000,000
4,000,000

Exercise price
(pence)

Exercise date

1.25
1.25
3.00
5.00

21/05/14 to19/05/24
21/05/14 to19/05/24
21/05/15 to19/05/24
21/05/15 to19/05/24

5,000,000

12,800,000

All share options vest 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.

In June 2015 1,600,000 options were exercised at a price of 1.25p.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Notes to the Financial Statements

CONTINUED

18. Share capital and reserves (continued)

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.

Warrants are valued using the Black-Scholes pricing model and no performance conditions are included in the fair value
calculations. The risk free rate was 1.64%. The expected volatility is based on historical volatility over the last two years
and is estimated to be 25%. The average share price during the year was 0.85 pence. During the year the Company had
in existence the following warrants:

Number of warrants
At 1 June
2014

4,550,000
18,200,000

22,750,000

Reserves

Granted

Cancelled

At 31 May
2015

Exercise price
(pence)

Exercise date

—
—

—

—
—

—

4,550,000
18,200,000

22,750,000

1.25
3.00

19/05/16 to 19/05/24
19/05/17 to 19/05/24

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

Share premium

Capital reserve

Amount subscribed for share capital in excess of nominal value.

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.

Convertible debt option reserve

Amount of proceeds on issue of convertible debt relating to the equity component
of the debt.

19. Convertible debt option reserve

Group

Company

2015
£

2014
£

2015
£

2014
£

Convertible loan

189,000

The loan is from T Charlton a Director and shareholder of the company and is repayable on the earlier of (i) 1 December
2016 or (ii) such date that certain conditions are satisfied relating to the dilution of Mr Charlton’s shareholding in the
Company to less than 10 per cent. of the Ordinary Shares then in issue. Feedback plc also has the right after 1 June 2016,
at its sole discretion, to issue up to 15.12 million new Ordinary Shares at a deemed issue price of £0.0125 per Ordinary
Share in satisfaction of the loan. No interest shall accrue on the Shareholder Loan.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Notes to the Financial Statements

CONTINUED

20. Financial commitments
The Group has no financial commitments as 31 May 2015.

21. 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 £11,264 (2014: £Nil). There were no outstanding or prepaid contributions at the year end.

22. Related party transactions
The following related party transactions took place in the year and prior year:

On 20 May 2014 A convertible loan of £189,000 was received from T W G Charlton a Director of the company and is
repayable on the earlier of (i) 1 December 2016 or (ii) such date that certain conditions are satisfied relating to the
dilution of Mr Charlton’s shareholding in the Company to less than 10 per cent. of the Ordinary Shares then in issue.
Feedback also has the right after 1 June 2016, at its sole discretion, to issue up to 15.12 million new Ordinary Shares at
a deemed issue price of £0.0125 per Ordinary Share in satisfaction of the loan. No interest shall accrue on the Shareholder
Loan. The loan has been classified as an equity instrument and added to the Convertible debt option reserve.

At 31 May 2014 T W G Charlton was owed £189,000 by Cambridge Computed Imaging Limited. Mr Charlton was owed
this sum at the date of the acquisition of Cambridge Computed Imaging Limited. This related to a creditor outstanding by
Cambridge Computed Imaging that was assigned to Mr Charlton. The amount due was fully repaid in June 2014. This
amount is shown within other payables in note 16.

T E Brown is a director and shareholder in Peterhouse Corporate Finance Limited. Peterhouse Corporate Finance Limited
were appointed joint Brokers on 6 March 2014 to the Company at a fee of £12,000 per annum. A fee of £12,000 has been
charged to the Statement of Comprehensive Income for the year to 31 May 2015 and no amount was outstanding at the
year end.

23. Post balance sheet events
On 3 June 2015 the company raised £200,000 by the issue of 11,111,111 new ordinary shares at 1.8 pence per share
(‘Placing Shares’). The Placing includes participation by two of Feedback’s directors, Tom Charlton who invested £50,400
for 2,800,000 Placing Shares and Trevor Brown who invested £18,000 for 1,000,000 Placing Shares.

On 6 July 2015 the Company issued 216,000 ordinary shares at 1.25 pence per share in lieu of fee for professional services.

On 9 July 2015 the Company issued 1,600,000 shares following notification of the exercise of options at 1.25 pence per
share.

The group has also announced that it has entered into two Joint Ventures, Stone Checker Software Ltd with Oxford Stone
Group for the potential future clinical application of TexRAD on patients with kidney stones and Prostate Checker Ltd with
QUIBIM S.L for assisting the detection and diagnosis of prostate cancer.

24. Ultimate controlling party
There is no ultimate controlling party.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the annual general meeting of Feedback plc (the “Company”) will be held at the offices of Sanlam
Securities UK Limited, 10 King William Street, London EC4N 7TW at 2.00 p.m. on 30 November 2015. You will be asked to
consider and, if thought fit, pass the resolutions below.

Resolution 9 will be proposed as a special resolution. All other resolutions will be proposed as ordinary resolutions.

As Ordinary Resolutions:

To receive and adopt the Company’s annual accounts for the financial year ended 31 May 2015 together with the Directors’
report and the auditors’ report on those accounts.

To re-elect T E Brown, who retires by rotation pursuant to the articles of association of the Company and who, being
eligible, offers himself for re-election as a Director.

To re-elect B Ganeshan, who retires pursuant to the articles of association of the Company and who, being eligible, offers
himself for re-election as a Director.

To re-elect M P Hayball, who retires pursuant to the articles of association of the Company and who, being eligible, offers
himself for re-election as a Director.

To re-elect A Menys, who retires pursuant to the articles of association of the Company and who, being eligible, offers
himself for re-election as a Director.

To re-appoint haysmacintyre as auditors of the Company to hold office until the conclusion of the next annual general
meeting and to authorise the Directors to fix their remuneration.

To consider, in accordance with Section 656 of the Companies Act 2006 (the “Act”), whether any, and if so what, steps should
be taken to deal with the situation that the net assets of the Company were half or less of its called-up share capital.

THAT, in substitution for all previous authorities and in accordance with section 551 of the Act, the Directors be and they
are hereby generally and unconditionally authorised to allot shares in the Company or grant rights to subscribe for or
convert any securities into shares (“Rights”), provided that this authority shall be limited to the allotment of up to an
aggregate nominal amount of £169,728.21 provided that this authority shall expire at the earlier of the next annual general
meeting of the Company or 30 November 2016 and that the Company may before such expiry make an offer or agreement
which would or might require shares or Rights to be granted in pursuance of any such offer or agreement notwithstanding
that the authority conferred hereby has expired.

As a Special Resolution:
9.

THAT, subject to the passing of resolution 8 above, but in substitution for all previous authorities, and in accordance with
section 570 of the Act, the Directors be and they are hereby empowered to allot equity securities (as defined in section
560 of the Act) pursuant to the authority conferred by the previous resolution as if section 561(1) of the Act did not apply
to any such allotment, provided that this power shall be limited to the allotment of equity securities for cash:

in connection with an offer of such equity securities by way of rights to holders of ordinary shares in proportion (as
nearly as may be practicable) to their respective holdings of such shares, but subject to such exclusions or other
arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or any legal or
practical problems under the laws of any territory, or the requirements of any regulatory body or stock exchange and;

the allotment (otherwise than under sub-paragraph (a) above) of equity securities up to an aggregate nominal
amount of £101,836.92 (representing 20% of the issued share capital for the time being);

provided that this authority shall expire at the earlier of the next annual general meeting of the Company or
30 November 2016 and that the Company may before such expiry make an offer or agreement which would or
might require equity securities to be granted in pursuance of any such offer or agreement notwithstanding that the
authority conferred hereby has expired.

By Order of the Board

T W G Charlton
Director

Dated 5 November 2015

RegisteredAddress:GrangePark,Broadway,Bourn,Cambridgeshire,CB232TA

RegisteredNumber:00598696

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Notice of Annual General Meeting

CONTINUED

Explanatory Notes to the Notice of Annual General Meeting
The notes on the following pages give an explanation of the proposed resolutions. Resolutions 1 to 8 are proposed as ordinary
resolutions. This means that for each of those resolutions to be passed, more than half of the votes cast must be in favour of the
resolution. Resolution 9 is proposed as a special resolution. This means that for the resolution to be passed, at least three-quarters
of the votes cast must be in favour of the resolution.

Resolution 1: Approval of the annual report and accounts
The Company is required to present its report and accounts to shareholders at its AGM. This provides an opportunity to discuss the
performance of the Company during the year, its management and prospects for the future.

Resolutions 2-5: Re-election of directors
The Company’s articles of association require one-third (but if the number of current Directors of the Board is not three or a multiple
of three, as close to one-third as possible), of the Board to retire and seek re-election at each AGM. As a consequence, Trevor Brown
retires by rotation and being eligible, the Board proposes his re-election as a Director of the Company. Balaji Ganeshan, Mike
Hayball and Alex Menys are retiring at the first AGM since their appointment and the board propose them for re-election as Directors
of the Company.

Resolution 6: Auditors reappointment and remuneration
It is a requirement that the Company’s auditor must be reappointed at each general meeting at which financial statements are laid,
in effect, at each AGM. After considering relevant information, the Audit Committee recommended to the Board the reappointment
of haysmacintyre. The resolution proposes haysmacintyre’s reappointment and to authorise the Directors to determine their
remuneration.

Resolution 7: Section 656 consideration
This is an ordinary resolution required by the Companies Act 2006 given that, as at 31 May 2015, the Company’s net assets were
less than half its called-up share capital. In June 2015 the Company raised £200,000 and the Board continues to monitor the
Company’s cash requirements closely. Consequently the Board does not recommend any additional action at the AGM.

Resolution 8: Directors’ power to allot relevant securities
Under section 551 of the Act, relevant securities may only be issued with the consent of the shareholders, unless the shareholders
pass a resolution generally authorising the Directors to issue shares without further reference to the shareholders. This resolution
authorises the general issue of shares up to an aggregate nominal value of £169,728.21 which is equal to one third of the nominal
value of the current share capital of the Company. Such authority will expire at the conclusion of the next AGM of the Company or
six months after the Company’s accounting reference date (whichever is the earlier).

Resolution 9: Disapplication of pre-emption rights on equity issues for cash
Section 561 of the Act requires that a company issuing shares for cash must first offer them to existing shareholders following a
statutory procedure which, in the case of a rights issue, may prove to be both costly and cumbersome. This special resolution
excludes that statutory procedure as far as rights issues are concerned. It also enables the Directors to allot shares up to an aggregate
nominal value of £101,836.92, which is equal to 20% of the nominal value of the current share capital of the Company, assuming
resolution 8 being passed. The Directors believe that the powers provided by this resolution will maintain a desirable degree of
flexibility. Unless previously revoked or varied, the disapplication will expire on the conclusion of the next AGM of the Company or
six months after the Company’s accounting reference date (whichever is the earlier).

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

FEEDBACK

Notice of Annual General Meeting

CONTINUED

Notes

A member of the Company entitled to attend and vote at the meeting convened by this notice is entitled to appoint one or more
proxies to exercise any of his rights to attend, speak and vote at that meeting on his behalf. A proxy need not be a member of
the Company but must attend the meeting to represent you.

You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may
not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy please contact
Share Registrars on 01252 821390, overseas callers should call +44 1252 821390.

A Form of Proxy is enclosed. To be effective, the Form of Proxy together with any power of attorney or other written authority
under which it is signed, or a notarially certified copy or a certified copy in accordance with the Powers of Attorney Act 1971 of
such power or written authority must be completed signed and to be valid the proxy must be duly executed and deposited with
the Company at the offices of the Company’s registrars, Share Registrars Limited, Suite E, First Floor, 9 Lion and Lamb Yard,
Farnham, Surrey GU9 7LL, or by scan and email to Share Registrars at proxies@shareregistrars.uk.com, not later than 2.00 p.m.
on 26 November 2015.

Completion and return of a Form of Proxy will not prevent a member from attending and voting in person if he or she so wishes.

Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, only those shareholders entered in the register of
members of the Company at the close of business on 26th November 2015 (or in the event of any adjournment, on the day which
is two days before the day of the adjourned meeting) shall be entitled to attend and vote at the AGM in respect of the shares
registered in their name at that time. Changes to entries in the register of members after that time shall be disregarded in
determining the rights of any person to attend or vote at the AGM.

In the case of joint holders, the vote of the senior who tenders a vote, whether in person or by proxy, will be accepted to the
exclusion of the votes of any other joint holders. For these purposes, seniority shall be determined by the order in which the names
stand in the register of members in respect of the joint holding.

In the case of a corporation, the Form of Proxy must be executed under its common seal or signed on its behalf by a duly
authorised attorney or duly authorised officer of the corporation.

A vote withheld option is provided on the Form of Proxy to enable you to instruct your proxy not to vote on any particular
resolution. However, it should be noted that a vote withheld in this way is not a “vote’ in law and will not be counted in the
calculation of the proportion of votes “For” and “Against” a resolution.

To change your proxy instructions simply submit a new proxy appointment using the methods set out above. Note that the cut-
off time for receipt of proxy appointments (see above) also apply in relation to amended instructions; any amended proxy
appointment received after the relevant cut-off time will be disregarded. Where you have appointed a proxy and would like to
change the instructions using another hard copy Form of Proxy, please contact Share Registrars. If you submit more than one valid
proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence.

10.

In order to revoke a proxy instruction, you will need to inform the Company using one of the following methods:

By sending a signed hard copy notice clearly stating your intention to revoke your proxy appointment to Share Registrars Ltd, Suite
E, First Floor, 9 Lion and Lamb Yard, Farnham, Surrey GU9 7LL. In the case of a member which is a company, the revocation notice
must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company.
Any power of attorney or any other authority under which the revocation notice is signed (or a duly certified copy of such power
or authority) must be included with the revocation notice.

In either case, the revocation notice must be received by Share Registrars no later than 2.00 p.m. on 26 November 2015.

If you attempt to revoke your proxy appointment but the revocation is received after the time specified then, subject to the
paragraph directly below, your proxy appointment will remain valid.

Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy
and attend the meeting in person, your proxy appointment will automatically be terminated.

11. As at 5.00 p.m. on the date immediately prior to this notice the Company’s issued share capital comprised 203,673,857 ordinary
shares of 0.25 pence each (“Ordinary Shares”). Each Ordinary Share carries the right to one vote at a general meeting of the
Company and therefore the total number of voting rights in the Company as at 5.00 p.m. on the date immediately prior to this
Notice is 203,673,857.

Printed by Michael Searle & Son Limited

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2015

Feedback plc
Grange Park, Broadway, Bourn, Cambridgeshire, CB23 2TA