Feedback plc Annual Report 2019

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FY2019 Annual Report · Feedback plc

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Report of the Directors and
Consolidated Financial Statements
For the year ended 31 May 2019

Contents

Company Information

For the year ended 31 December 2013

Directors

Dr A J Riddell
Prof T N Irish
S Sturge
L Melvin
Dr T Oakley
Prof R Shaw (appointed 29 August 2019)

Secretary

L Melvin

Registered Office

Unit 5
Grange Park
Broadway
Bourn
Cambridgeshire
CB23 2TA

Registered Number

00598696

Auditors

Haysmacintyre LLP
10 Queen Street Place
London
EC4R 1AG

Nominated Adviser

Allenby Capital Limited
5 St Helen’s Place
London
EC3A 6AB

Joint Brokers

Peterhouse Corporate Finance Limited
80 Cheapside
London
EC2V 6EE

Stanford Capital Partners Limited
15-17 Eldon Street
London
EC2M 7LD

Bankers

NatWest
Conqueror House
Vision Park
Cambridge
CB24 9NL

Registrars

Share Registrars Limited
The Courtyard
17 West Street
Farnham
Surrey
GU9 7DR

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Chairman’s Statement

In my last report of November 2018, I indicated that we had increased our efforts to recruit a new CEO. I recruited
Dr Tom Oakley in December, initially to undertake a comprehensive review of all of our TexRAD publications and
Cadran’s potential. His thorough professional and clinical analysis of these and the conclusions reached convinced
both of us of the merits of him assuming the role of CEO for Feedback Medical Ltd in February 2019. The clinical
review evolved into a strategic business review and directional change. Tom demonstrated very quickly his vision,
commercial awareness and management drive and the Board was pleased to promote him to being CEO of Feedback
plc in April 2019. He has galvanised the operational team and focused efforts on the development and commercial
launch of Bleepa®, an evolution from Cadran. This exciting new product that is set to transform the group’s potential
for accelerated growth, was announced in July 2019. It will provide a secure platform for instant sharing via mobile
devices by medical staff of clinical grade images and medical information that meets GDPR requirements.

Alongside the major management and strategic directional changes occurring during the period, commercial progress
has continued. Revenue for the year ended 31 May 2019 was £563,092, an increase of 23% over the previous year
(£458,389) after a flat year the year before. The loss before tax for the year ended 31 May 2019 was £1.13 million
compared to £0.75 million in the prior year.. TexRAD achieved new contracts from Korea and the USA. TexRAD Lung,
the CE Marked clinical development of TexRAD research, was evaluated in two major pilot studies during the year
which yielded important technical information that will assist future developments for its clinical utility. A strategic
review by the CEO of TexRAD and its potential has commenced, with results to follow in the next few months.

On quality we were pleased to announce a retention of our ISO 13485:2016 certification in November 2018, a mark
of our continued focus on high standards.

The placing in November 2018 of £1.375 million enabled the appointment of a new CEO and other key hires. It also
triggered the formal signing of our agreement with Future Processing, our software development partner in Poland,
in January 2019. The dedicated resource we have been able to call on has been instrumental in progressing Bleepa®
to launch readiness in September 2019. Post year end, however, it was clear that to achieve the successful launch
and market penetration of Bleepa® more investment was required and Tom Oakley led the fundraise in August 2019
raising £2 million from existing and new investors, including institutional investors.

At the end of August 2019, we announced the appointment of Professor Rory Shaw as Deputy Chairman following
his successful role as Medical Director of Feedback Medical Ltd. He will subsequently become Chairman following
my retirement after the AGM. As I come to the end of more than three years as Chairman of Feedback plc I have to
acknowledge the significant challenges we faced in bringing about the means to develop the full potential of the
products that the founders of Cambridge Computed Imaging and TexRAD created. This required a strengthening of
the board with industry experience, rationalising the corporate structure, securing adequate investment and the
injection of new ideas and energy from our new CEO. He and Professor Shaw have demonstrated real synergy of
ideas and enthusiasm in unlocking the possibilities for our technology. They now have the means to transform those
ideas into commercial return for the Company and our shareholders.

Dr A J Riddell
Chairman

23 October 2019

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Strategic Report

The Directors present their strategic report on the Group for the year ended 31 May 2019.

Principal Activities

The principal activity of the Group is the development and selling of the Group’s proprietary technologies.

Financial summary

In the year to 31 May 2019, the recognised turnover increased by 23% over the previous year. 40% of the turnover
is attributable to one customer. Overheads, especially employment costs, have increased in the year due to gearing
up to deliver the new strategic direction as outlined below.

In line with International Financial Reporting Standards, Feedback’s accounting policy is to spread the income from
its software licence and support sales over the duration of the contract, usually one to two years. The Group’s
balance sheet contains a significant deferred revenue liability to reflect this.

In November 2018, the Company raised £1.375 million before expenses, by way of a placing and subscription of
91,666,666 new Ordinary Shares at a price of 1.5 pence per share with new and existing investors. The proceeds
of this fundraise were invested in developing products and enhancing existing products, developing new markets
for TexRAD – TexRAD now has customers in Portugal, Romania, Belgium, and the Czech-Republic.

In August 2019, the Company raised £2 million, before expenses, by way of a placing and subscription of
166,666,667 new Ordinary Shares at a price of 1.2 pence per share with new and existing investors. The proceeds
from this fundraise will be invested to develop the innovative Bleepa® product for UK and Worldwide usage as
announced to shareholders in July 2019.

Operational cash flows have been satisfactory and reflect customer payments for new purchases and contracts
before the periods in which the revenue is recognised. The share issue in November 2018 provided a healthy cash
balance at the financial year end and has financed an acceleration in product development expenditure leading to
increased intangible assets.

Operational review

Feedback Medical

Feedback Medical (FM Ltd) develops and sells Group’s proprietary technologies – TexRAD®, the quantitative texture
analysis platform and Cadran, a Picture Archiving and Communication System (PACS).

TexRAD

The main focus on research and development has been creating products associated with Cadran technology.
However, the Group has also been developing the Grey Level Co-Occurrence Matrix (GLCM) enhancement to its
existing product range. This was finally achieved post year end. During the year, Feedback Medical’s TexRAD product
had sales in new countries including Portugal, Romania, Belgium and Czech-Republic.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Strategic Report

CONTINUED

Cadran

Cadran is Feedback’s established Picture Archiving and Communications System (PACS) which facilitates the review
of medical imaging studies by clinicians. TexRAD® is typically installed on the Cadran picture archiving platform.
Cadran PACS technology provides storage and display of medical images throughout a hospital. It has been used
successfully at the Royal Papworth Hospital for over 15 years and a further two-year support contract renewal for
the Cadran platform was announced in April 2018. During the year the Group successfully project managed the
PACS migration from the Papworth Hospital site to the new Addenbrooke’s site. Cadran is also installed in a number
of NHS sites in the East of England. The Cadran platform has significant potential to bring a competitive product
offering to new global markets especially in developing economies. Cadran products can support the storage and
viewing needs of individual clinicians right up to mid-scale hospital departments and specialist centres. It is a
progressive and rigorously tested Class 1 medical device with a longstanding legacy of service at NHS institutions,
such as the Royal Papworth Hospital. However, it is currently positioned in a competitive market that shows little
opportunity for future growth.

Cadran’s innovative features, such as the ability to view clinical grade medical images flexibly on mobile and personal
devices, allow it to be repositioned to meet the needs of an emerging medical communications market, particularly
in medical imaging. The potential to improve the efficiencies and lives of medical professionals and patients alike,
through more flexible, secure and accurate tools utilising the highest standards in global mobile communications.

According to an article in BMJ Innovations, 97% of hospital doctors routinely use WhatsApp to communicate about
patients*. There is an increasing trend for clinicians to use personal devices to discuss patient care and make clinical
decisions, as it is more convenient and efficient than traditional methods of clinical communication. Medical images
are often shared as part of these chats as photos of computer screens, and do not meet diagnostic clinical standards.
This raises a number of concerns with regard to safety of patient data, breaches of GDPR and the ability to make
safe clinical decisions without using clinical grade medical images.

By incorporating a dedicated, encrypted messaging function to Feedback’s existing Cadran technology, we have
created a medical communication device capable of sharing clinical grade medical imaging directly from a hospital
PACS to mobile devices, ensuring the safe handling of patient data and facilitating a secure means of
communication for clinicians.

The repositioning of Cadran marks a shift away from a traditional software sales model towards a SaaS (software
as a service) model which is anticipated to generate considerably higher recurring revenues for the Group and lead
to a new phase of growth. With over 15 million doctors globally, Cadran is uniquely positioned to set new standards
in this emerging, sizeable, medical communications market.

Having undertaken a period of market research alongside NHS clinicians, the Group has invested in the product
enhancement of Cadran, and launched a new product, BleepaⓇ, in September 2019. This rapid turnaround is
possible because the core technical features of the product are already established within Cadran and required
minimal enhancement by our outsourced development partner, Future Processing.

Based on Feedback’s Cadran technology, BleepaⓇ is a secure, encrypted medical communication tool accessible
through smartphones, tablets and desktops that facilitates rapid clinical messaging and review of medical grade
imaging for all members of a clinical team, directly from a hospital Picture Archiving and Communications System
(PACS). BleepaⓇ enables faster clinical decision making between team members wherever they are, accelerating and
improving patient care. BleepaⓇ addresses growing concerns about these messaging platforms not meeting diagnostics
clinical standards and regarding patient data protection. Continued use of non-specialist communication tools could
leave both hospitals and individual clinical users significantly exposed and therefore open to the risk of litigation.

* O’Sullivan DM, O’Sullivan E, O’Connor M, et al WhatsApp Doc? BMJ Innovations 2017;3:238-239.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Strategic Report

CONTINUED

R&D progress

Feedback recognises the potential in developing new products from its existing technologies and expertise within
software and machine learning. It is working closely with existing customers to identify unmet needs. To increase
its software development capabilities the Group is continuing and expanding its collaboration with Future Processing
to develop new imaging software products.

Last year Feedback started to capitalise development costs for writing off against income generated in future
accounting periods. The Directors carefully consider what elements of this development expenditure will generate
future economic benefits. This is based upon customer feedback on new products and product enhancements.
This policy has continued during the current year.

Current trading and future developments

The Group’s revised strategy was announced to shareholders in July 2019 and a fundraise was completed in August
2019. The new product, Bleepa® was launched at the Health and Care Innovation Expo in Manchester in early
September 2019. This has generated considerable interest and the Company is presently arranging demos to a
number of potential customers and is planning to pilot Bleepa® as soon as potential customers are ready. A number
of opportunities overseas are also being explored.

Principal risks and uncertainties

Economic and market risks

FM Ltd is in the medical imaging market. The market is fragmented and the future success of the business is
dependent on the ability of Feedback Medical 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. The outcome of Brexit is unlikely to affect existing trading arrangements
so is anticipated to l have little impact on the Group.

Regulatory approval

The development, evaluation and marketing of the Group’s products and ongoing research and development
activities are subject to regulation by governments and regulatory agencies in all territories within which the Group
intends to market its products (whether itself or through a partner) and there can be no assurance that any of the
Group’s products will successfully complete the trial process or that regulatory approvals to market these products
will ultimately be obtained. Failure to obtain regulatory approvals for its products could threaten the Group’s ability
to trade in the long term.

The time taken to obtain regulatory approval varies between territories and there can be no assurance that any of
the Group’s products will be approved in any territory within the timescale envisaged by the Board, or at all, and
this may result in a delay, or make impossible, the commercial exploitation of the Group’s products. Furthermore,
each regulatory authority may impose its own requirements and may refuse to grant, or may require additional data
before granting an approval, even though the relevant product may have been approved by another country’s
authority.

If regulatory approval is obtained, products will be subject to continual review and there can be no assurance that
such approvals will not be withdrawn or restricted. Changes in applicable legislation or regulatory policies, or
discovery of problems with products may result in the imposition of restrictions on sale, including withdrawal of the
product from the market, or may otherwise have an adverse effect on the Company’s business and/or revenue
streams.The Group’s ISO accreditation (ISO 13845 2016) was renewed in November 2018.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Strategic Report

CONTINUED

Product Development Risk

The Group capitalises development costs where there is an expectation that commercially successful products will
be developed. The products in development may cost more and/or take longer to develop than the current
estimates. It is possible that commercially successful products may not be developed. The Board monitors progress
on product development on a regular basis and discusses with potential customers their requirements to mitigate
this risk. The new Bleepa® is both innovative and unique but further iterations will be required to be produced
quickly to ensure that Bleepa® retains this position.

Liquidity

Management of liquidity risk has concentrated on the maintenance of appropriate credit lines and funding sources
to ensure adequate cash resources for the Company’s operations. The Group was successful in raising additional
cash through share issues in both 2018 and 2019 to enable it to achieve its strategy. The Board regularly monitors
the cash position of the Group and ongoing cash requirements. The Board believes the Group is likely to have
access to adequate cash resources from a combination of operational cash generation and, if necessary, obtaining
further equity finance from the financial markets to support its corporate world strategy.

Credit Risk

The Group’s credit risk is primarily attributable to its cash and cash equivalents and trade receivables. The credit risk
on other classes of financial assets is considered insignificant. Credit risk is managed through credit review and
approval processes for new customers and ongoing review of each customer’s credit history.

Other Risks

There is a risk that existing and new customer relationships will not lead to the income currently forecast (especially,
as noted above, from new products currently in development). As with other technology businesses, the Group is
reliant on a small number of highly skilled staff.

Post Balance Sheet Events

On 29 August 2019, the Company raised £2 million via the issue of 166,666,667 new ordinary share at a price of
1.2 pence per share. Bleepa Limited was incorporated on 24 July 2019 to protect the Bleepa product name pending
the announcement to shareholders on 26 July 2019.

Key Performance Indicators

During the year the Company maintained its cash position as a key performance indicator. The consolidated cash
balance at 31 May 2019 was £540,735 (2018 £632,285). Given the rapidly changing business profile of the
Group, the Board are developing key performance indicators to assess performance. These will evolve as sales of
BleepaⓇ emerge.

By Order of the Board on 23 October 2019 and signed on its behalf

Dr A J Riddell

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Directors’ Report

The Directors present their report and the Financial Statements for the year ended 31 May 2019.

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:

Dr AJ Riddell
Prof T N Irish
L Melvin
S Sturge
Dr T Oakley
D Crabb

(Appointed 9 April 2019)
(Resigned 19 July 2018)

Directors’ shareholdings

The shareholdings in the Company of the Directors as at 31 May 2019 were:

Dr A J Riddell
S Sturge
L Melvin

Significant shareholders

No. of Shares

7,000,000
12,833,333
600,000

Shareholders who have notified the Company of shareholdings in excess of 3% as at 31 May 2019 are:

T W G Charlton
J Cranston
Barclays Nominees
Hargreaves Lansdown Nominees

Employment policies

No. of Shares

86,800,000
33,750,000
31,311,640
13,962,981

1.88
3.44
0.16

23.25
9.04
8.39
3.74

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, disability, nationality or
ethnic origin.

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 2019 averaged 32 days (2018: 32 days).

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Directors’ Report

CONTINUED

Treasury policy

The Group has adopted formal treasury policies to control its financial instruments. It has 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. The Group does not undertake hedging transactions in foreign
currencies. Foreign currencies are generally converted automatically into sterling on receipt.

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, dividends and key performance
indicators are provided in the Strategic Report.

Dividends

No dividend was declared in the year (2018: £nil).

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.

Going concern

Having updated the Group’s business plan and cash flow forecasts and having considered other factors such as the
economic environment and the availability of further equity finance if required, the Directors consider that the
Group and the Company are likely to have access to adequate cash resources for at least the next twelve months
from existing cash balances.

These cash balances will be used to provide working capital, enable continued product development and
international expansion. If further resources are required, the directors consider, that although future equity
fundraising can never be guaranteed, the group’s recent history of successful fundraising means it likely that the
group will be able to raise further finance through future equity issues.

Accordingly, the Directors believe that the Group and Company are a going concern and have therefore prepared
the financial statements on a going concern basis.

By order of the Board on 23 October 2019 and signed on its behalf

Dr A J Riddell
Chairman

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Directors’ Report

CONTINUED

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:

•

select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

•

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.

The directors are also responsible for the maintenance and integrity of the corporate and financial information
included on the company’s website. Legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Directors’ Report

CONTINUED

Directors’ Biographies

Dr Alastair Riddell, Non-Executive Chairman

Alastair has over 30 years’ experience in the pharmaceutical, life science and biotech industries, with 20 years as a
main board director. After 10 years directing phases 1-4 clinical trials of antibiotics, oncology and intensive care
products for companies including Lederle (now Pfizer) and Centocor (now J&J), he spent five years managing sales
and marketing for oncology and imaging products for Amersham International (now GE Healthcare). This led to
12 years as CEO for three UK biotech companies, Pharmagene, Paradigm Therapeutics and Stem Cell Sciences; in
these roles he was the principal involved in an IPO on UK’s main list, trade sales to international companies in Japan
and the USA and significant fund raising rounds. He has been Chairman of Silence Therapeutics (AIM listed) and
Chairman of Definigen Ltd, a private Cambridge University spinout. He is currently on the Board of three
biotechnology companies; AzurRx Biotherapeutics, a NASDAQ listed drug development company based in New
York; Cristal Therapeutics, a Netherlands based company specialising in nanoparticle medicines; and Nemesis
Biosciences a private Cambridge based company developing products to combat antibiotic resistance. He is also
Chairman of the SWAHSN (South West Academic Health Science Network), which seeks to improve and sustain the
healthcare provision in the south-west of England by linking innovation from industry, academia and the NHS.
Alastair is on the Remuneration Committee.

Prof Tim Irish, Non-Executive Director

Tim Irish has worked in the life sciences industry for thirty years with a career spanning global health technology
companies across Europe and North America, including GSK, GE and Philips. Between 2007 and 2015 Tim served
on ten Boards, five as Chair, where he successfully executed two trade sales and raised significant equity financing,
including an IPO. Since 2015 his governance portfolio covers Life Sciences and Healthcare, both public and private,
including board roles as Vice Chair and Non-Executive Director at NICE, six NED roles (USA, EU, UK), and Professor
of Practice at King’s College London’s School of Management and Business.

Lindsay Melvin, Chief Financial Officer

Lindsay is a chartered accountant and brings 30 years of financial and business experience to Feedback. Most
recently he was Chief Executive Officer of the Chartered Institute of Payroll Professionals (CIPP) for eight years until
July 2016. CIPP was voted the UK’s best association in the 2016 Associations Excellence Awards and was also voted
as one of the Sunday Times “Best 100 Not for Profit Organisations” in 2016. Previously, Mr Melvin held Director-level
roles in small- to medium-sized public and private companies including Arthur Shaw & Co plc where he was Finance
Director for six years. Lindsay started his career at Grant Thornton where he spent 11 years.

Simon Sturge, Non-Executive Director

Simon joined Merck Healthcare in 2014. He left Merck and is currently the Chief Executive of Kymab Group Limited.
He is an experienced healthcare executive in the UK and has built a very strong reputation not only in the
biotechnology industry but also in the investment community. His experience includes eight years at Celltech, and
he was the founder and CEO of RiboTargets which later reversed into Vernalis Plc. After serving as CEO of OctoPlus
N.V. for two years, he became Senior Vice President of Boehringer Ingelheim’s Biopharmaceutical Business. Simon
is a regular speaker at conferences including the World Economic Forum.

Dr Tom Oakley, Chief Executive Officer

Dr Tom Oakley trained as a Radiology Registrar before becoming an NHS England Clinical Entrepreneur Fellow
where he supported a number of companies looking to launch products in the NHS. He joined as CEO of Feedback
Medical Ltd in February 2019 before being appointed as CEO of Feedback PLC on 9 April 2019. Since joining the
company he has led a strategic review into the Cadran product portfolio which has culminated in the development
of BleepaⓇ, the company’s secure clinical messaging and image sharing communication tool.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Directors’ Report

CONTINUED

Prof Rory Shaw, Deputy Chairman

Professor Rory Shaw was appointed as non-executive director and deputy chairman of Feedback PLC on 29 August
2019, with a view to taking over as chairman following the retirement of Dr Alastair Riddell. Professor Rory Shaw
is stepping down from his post as Medical Director of Feedback Medical Limited, the Company’s operating
subsidiary, which he has held since June 2018. During this time he has contributed to the development of the
Company’s strategy and to building relationships with the UK medical community.

Professor Rory Shaw has extensive managerial and overseas trade experience as well as a strong academic and
clinical background. Professor Shaw was previously the Medical Director of Healthcare UK within the Department
of International Trade. Over the previous 15 years, he has been Medical Director of three NHS Trusts; North West
London Hospitals NHS Trust, the Royal Berkshire NHS Foundation Trust and the Hammersmith Hospital NHS Trust.
In 2001, he was appointed by the then Minister of Health as the first Chairman of the National Patient Safety
Agency and was also a non-executive director of the NHS Litigation Authority. Professor Shaw’s clinical specialty is
respiratory and general medicine. He has been published extensively in academic journals and was also a professor
of respiratory medicine at Imperial College School of Medicine.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Corporate Governance Statement

The Directors present their Corporate Governance Statement for the year ended 31 May 2019.

The Board has adopted the QCA Code, in line with the London Stock Exchange’s changes to the AIM Rules requiring
all AIM quoted companies to adopt and comply with a recognised corporate governance code and detail how it
complies with that code, and where it departs from its chosen corporate governance code an explanation of the
reasons for doing so. The Board believes that the application of the QCA code supports the company’s medium to
long-term success.

Board of Directors

In common with other organisations of a similar size, the Executive Directors are heavily involved in the day-to-day
running of the business. The Board of Directors meets regularly and holds video conference calls at least ten times
a year, attended by all Board members, and is responsible for formulating strategy, and for the trading subsidiaries,
monitoring financial performance and approving major items of capital expenditure. Non-Executive Directors spend
at least 6 days a year on Board matters.

During the majority of the year the Board comprised two Executive Directors and three Non-Executive Directors.
It currently has a Chief Executive, a Chief Finance Officer and four Non-Executive Directors.

Dr Tom Oakley, the Chief Executive, trained as a Radiology Registrar before becoming an NHS England Clinical
Entrepreneur Fellow where he supported a number of companies looking to launch products in the NHS. He joined
as CEO of Feedback Medical Ltd in February 2019 before being appointed as CEO of Feedback PLC on 9th April
2019. Lindsay Melvin, the Chief Finance Officer, is a chartered accountant and brings 30 years of financial and
business experience. He was recently a Chief Executive Officer to a Chartered Institute. Previously, he held
Director-level roles in small- to medium-sized public and private companies.

The Company currently has four Non-Executive Directors, therefore providing a suitable balance of executive and
non-executive directors. The three Non-Executive Directors are: Alastair Riddell, the Chairman, who has over
30 years’ experience in the pharmaceutical, life science and biotech industries, with 20 years as a main board
director and 12 years as CEO for three UK biotech companies. He is currently on the Board of three biotechnology
companies. Tim Irish has worked in the life sciences industry for thirty years with a career spanning global health
technology companies across Europe and North America, including GSK, GE and Philips. Between 2007 and 2015
Tim served on ten Boards, five as Chair, where he successfully executed two trade sales and raised significant equity
financing, including an IPO. Since 2015 his governance portfolio covers Life Sciences and Healthcare, both public
and private, including board roles as Vice Chair and Non-Executive Director at NICE, six NED roles (USA, EU, UK),
and Professor of Practice at King’s College London’s School of Management and Business. Simon Sturge is Chief
Executive of Kymab Group Limited. He is an experienced healthcare executive in the UK and has built a very strong
reputation, not only in the biotechnology industry but also in the investment community.

Based on the mix of experience and skills held by the directors, as detailed above, the Board believes it has the
necessary qualities and capabilities to deliver the Group’s strategy.

For the year under review, the Board included three Non-Executive Directors which was considered appropriate. The
Board has scheduled monthly meetings and others as required. In the year to 31 May 2019 fifteen meetings were
held. The attendance records at these meetings has been consistently high and no Non-Executive Director has been
absent from more than three meetings and this only occurred for one director due to international travel delays.
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. The Board receives monthly board papers which cover operational, financial and key stakeholder up
to date information. Board minutes are recorded and approved at the next meeting. All Board members have held
positions of responsibilities on other boards and are well versed in their roles and responsibilities. All Directors have
direct access to the advice and services of the Company’s professional advisers, enabling them access to all required
information in the furtherance of their duties.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Corporate Governance Statement

CONTINUED

The Board have sought professional legal, HR and NOMAD advice as and when appropriate to do so, given the level
of skills, knowledge and experience of each Board member. Each director ensures that their skillset is up to date by
attending events, reading appropriate journals and news bulletins and in discussions with colleagues.

On 29 August 2019, Professor Rory Shaw was appointed to the Board as Non-Executive Director and Deputy
Chairman, with a view to taking over as Chairman following the retirement of Dr Riddell. Professor Shaw stepped
down from the post of Medical Director of Feedback Medical Limited, which he held since June 2018. During this
time he has contributed to the development of the Company’s strategy and to building relationships with the UK
medical community. Professor Shaw has extensive managerial and overseas trade experience as well as a strong
academic and clinical background. Professor Shaw was previously the Medical Director of Healthcare UK within the
Department of International Trade. Over the previous 15 years, he has been Medical Director of three NHS Trusts;
North West London Hospitals NHS Trust, the Royal Berkshire NHS Foundation Trust and the Hammersmith Hospital
NHS Trust. In 2001, he was appointed by the then Minister of Health as the first Chairman of the National Patient
Safety Agency and was also a non-executive director of the NHS Litigation Authority. Professor Shaw’s clinical
specialty is respiratory and general medicine. He has been published extensively in academic journals and was also
a professor of respiratory medicine at Imperial College School of Medicine.

Non-Executive Directors

The appointment of Non-Executive Directors is a matter for the Board as a whole. There is currently no formal
selection process, which the Board deems appropriate for the size and nature of the Company. The Non-Executive
Directors have contracts for services for an unspecified period. 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.

During the period under review, Alastair Riddell, Tim Irish and Simon Sturge were considered to be independent
directors as none of them have any notifiable conflict of interest or material interest in the Company, and none of
them have any managerial responsibilities in the Company. Rory Shaw, appointed post period-end is also considered
independent.

Executive Directors

Executive 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 is in place comprising the Non-Executive Directors and where appropriate, the Chief
Executive and/or the Chief Finance Officer. The Remuneration Committee has one scheduled meeting in the year.
All serving members attended the meeting held in the year. Its purpose is to regularly review the remuneration
package of all senior employees.

An Audit Committee is in place comprising the Non-Executive Directors. The Company’s approach to internal control
is described below. The Audit Committee has two scheduled meetings in the year. All serving members attended
both meetings held in the year. Its purpose is to ensure that the audit process is rigorous and consistent.

The Audit Committee considered that the internal control procedures were more than adequate for the size of the
Group. Internal processes are reviewed every quarter and improvements implemented. Given the size of the Group
the audit committee do not consider it necessary to prepare a formal audit committee report as its significant work
and actions are reported on elsewhere in this statement.

The Nomination Committee consists of the Non-Executive Directors and it met once in August 2019.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Corporate Governance Statement

CONTINUED

Current business model

Further details on Feedback’s strategy are contained within the Strategic Report on pages 3-6 of this document.

The Company has a Management group who meet weekly to discuss operational issues, strategic relationships, sales
opportunities, planned meetings and events and strategic issues. Actions from the meetings are recorded and
followed up at the next management meeting. The CEO and the CFO are both part of the Management group.

A risk register covering all business areas was prepared by the management team, is updated regularly, and is
reviewed and approved by the Board.

Business processes are regularly reviewed and possible enhancements debated, evaluated and, if appropriate,
implemented.

Company culture

The Company is evolving a formal set of ethical values and behaviours. It endorses a ‘no-blame’ culture and has an
‘open door’ policy with regular staff meetings and management meetings. Management conduct regular one-to-
one meetings with all staff, through which they are able to support staff in ensuring the Company’s values are
being recognised and reflected and assist in any staff training needs. The Board are committed to developing a high
standard in both ethical behaviours and values and are very supportive of employee wellbeing.

The Directors believe that this culture is desirable to move the business forwards in its strategic growth and its
present objectives and business model.

Performance evaluation

There is currently no formal performance evaluation of the board, its committees and its individual directors. The
members of the Board are relatively new to the Company and no-one has served on the Board for more than four
years. During 2019, Tom Oakley joined. It is not, therefore, appropriate to conduct any formal board evaluation at
present but the Board intend to review both its performance and that of its individual members, annually,
commencing in 2020. The non-executive directors are currently responsible for informally reviewing the directors’
performance and highlighting any issues identified.

In addition, one-third of the Board is required to retire and seek re-election at the AGM, in accordance with good
governance. The Board will continue to be mindful of succession planning.

Communication with shareholders

Feedback encourages two-way communication with its investors and responds quickly to queries received. The
Company has an email address (IR@fbk.com) where shareholders can communicate with the Board. The Directors
are available to shareholders at any time to discuss strategy and governance matters. The Chairman communicates
regularly with major shareholders and ensures that their views and concerns are fully communicated back to the
Board and management team.

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. Should voting decisions not be in line with Board’s
expectations then the Board will liaise with shareholders in order to address any issues.

Further details on the Company’s consideration of wider stakeholder and social responsibilities can be found on the
Company’s website at www.fbkmed.com/plc-landing-page/governance.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Corporate Governance Statement

CONTINUED

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 reviewed 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 2019 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:

•

clearly defined organisation structures with segregation of duties wherever practicable;

agreement of Group short term financial objectives and business plans;

• monthly review by the Board of Group Management Accounts and monitoring of results against budgets;

•

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 Directors and the Non-Executive Directors are heavily
involved in the day-to-day running of the business. The directors believe that although the Group’s controls may
be slightly less formal than those of larger groups and 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 Group to maintain an internal audit function because
of the small size of the Group.

The Audit Committee considers 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. There are no non-audit fees that could
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.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Corporate Governance Statement

CONTINUED

Risk management

Further information on the Company’s principal risks and uncertainties can be found with the Strategic Report on
pages 3-6 of this document. The Board considers business risk at every Board meeting (held approximately 10 times
a year). This includes risks associated with its key customers and suppliers, ongoing trading performance and
budgets. The risk register is prepared and updated by the management team and is reviewed by the Board at board
meetings. The management team hold regular meetings, at least three a month, when they review the risk register
and ensure that it is updated and accurately reflects the risks to the Company. The management team consists of
all the Company’s managers. The risks identified are evaluated into cause, impact on the Company, likelihood and
seriousness, mitigating actions, timelines and responsibilities.

Going concern

Accordingly, the Directors believe that the Group and Company are a going concern and have therefore prepared
the financial statements on a going concern basis.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Independent Auditors’ Report

Opinion

We have audited the financial statements of Feedback PLC (“Feedback”) for the year ended 31 May 2019 which
comprise the group statement of comprehensive income, the group and parent company balance sheets, the group
and parent company statements of changes in equity, the group and parent company cash flow statements and
the notes to the financial statements, including its significant accounting policies. 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.

In our opinion, the financial statements:

•

give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31 May 2019 and
of the group’s loss for the year then ended;

have been properly prepared in accordance with IFRSs as adopted by the European Union; and

have been prepared in accordance with the requirements of the Companies Act 2006

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the
financial statements section of our report. We are independent of the group in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard
as applied to SME listed entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.

Material uncertainty related to going concern

We draw attention to the Note 3c in the financial statements, which indicates that the group incurred a net loss of
£973,109 and had a net cash outflow of £983,191 from operating activities during the year ended 31 May 2019.
As stated in Note 3c, these facts, along with other matters disclosed in Note 3c indicate that a material uncertainties
exist that may cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not
modified in respect of this matter.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the
overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Independent Auditors’ Report

CONTINUED

Key audit matter

Our response

Fraud and error in revenue recognition
For the Feedback PLC group the principal revenue
recognition risk is the risk of overstatement
through non-deferral of income which should be
deferred as the criteria for recognition have yet to
be met.

This year the group must also apply IFRS 15 for
the first time.

Fraud and error in revenue recognition
We reviewed the group’s material revenue streams to
consider whether
recognised and treated
appropriately, and in accordance with IFRS.

revenue is

Our review included an assessment of revenue recognition
policies, including the use of judgements and substantive
testing of revenue recognised in the year, and deferred
revenue.

Additionally we reviewed the recognition and recoverability
of trade receivables at the year-end to assess the validity of
their recognition and carrying values as at 31 May 2019.

Intangible assets – Capitalised development costs
We reviewed development cost additions to supporting
invoices and documentation received from those third-party
developers employed to develop the group’s products.

The rationale for recognition of these costs was discussed
with management, and the products for which items had
been capitalised assessed against the recognition criteria of
IAS 38 by reference to supporting evidence.

Intangible assets – Capitalised development
costs
During the year the group has significantly
increased its investment in product development
as it seeks to bring to market a new product
based on its existing technology.

IAS 38 sets out the recognition criteria that
development costs must meet before being
capitalised. There is a risk that if the group’s
development expenditure does not
these
requirements, intangible assets will be overstated.

Our application of materiality

The scope and focus of our audit was influenced by our assessment and application of materiality. We define
materiality as the magnitude of misstatement that could reasonably be expected to influence the readers and the
economic decisions of the users of the financial statements. We use materiality to determine the scope of our audit
and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and on the financial statements as a whole.

Due to the nature of the group and its operations we considered pre-tax trading results to be the main focus for
the readers of the financial statements, accordingly this consideration influenced our judgement of materiality.
Based on our professional judgement, we determined materiality for the group to be £20,000, based on 2.25%
of the draft pre-tax net loss of the group. For the parent company, £9,000 is used as materiality being approximately
2% of the net assets at the year end. This level is considered appropriate given the status of the company and its
role within the group which is that of a parent holding company bearing administrative expenses.

Based on our risk assessments and our assessment of the overall control environment, our judgement was that
performance materiality (i.e. our tolerance for misstatement in an individual account or balance) for the group was
75% of materiality, namely £15,000. The equivalent figure for the parent company was set at £6,750.

We agreed to report to the Audit Committee all audit differences more than £1,000, as well as differences below
that threshold that, in our view, warranted reporting on qualitative grounds. We also reported to the Audit
Committee on disclosure matters that we identified when assessing the overall presentation of the financial
statements.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Independent Auditors’ Report

CONTINUED

An overview of the scope of our audit

As Feedback is a group comprising three trading entities based in Cambridge the scope of our work was the audit
of the financial statements of the group and the individual financial statements of the subsidiaries. Our audit
strategy was developed by using our audit planning process to obtain an updated understanding of the group, its
activities, developments in the year and its control environment. Our audit testing was informed by this
understanding of the group and accordingly was designed to focus on areas where we assessed there to be the
most significant risks of material misstatement.

During the audit we performed specifically designed audit tests on significant transactions, balances and disclosures.
Our testing included a review of systems and controls relevant to our audit and our approach was primarily based
around substantive audit tests and analytical review.

To maintain and reinforce our knowledge of the group and the risks it faces we met with management prior to the
audit planning process. This information gathering process continued throughout the audit process, as we
reassessed and re-evaluated audit risks where necessary and amended our approach accordingly.

Other information

The directors are responsible for the other information. The other information comprises the information included
in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the
financial statements does not cover the other information and, except to the extent otherwise explicitly stated in
our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the other information. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

•

the information given in the strategic report and the directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and

the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and parent company and its environment obtained in
the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires
us to report to you if, in our opinion:

•

adequate accounting records have not been kept by the parent company, or returns adequate for our audit
have not been received from branches not visited by us; or

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Independent Auditors’ Report

CONTINUED

•

the parent company financial statements are not in agreement with the accounting records and returns; or

certain disclosures of directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the directors’ responsibilities statement set out on page 9, the directors are responsible
for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for
such internal control as the directors determine is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group and parent company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the group or parent company or
to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website
at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those
matters we are required to state to them in an Auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s
members as a body, for our audit work, for this report, or for the opinions we have formed.

Laura Mott (Senior Statutory Auditor)
For and on behalf of Haysmacintyre LLP, Statutory Auditors

23 October 2019

10 Queen Street Place
London
EC4R 1AG

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Statement of Comprehensive Income

FOR THE YEAR ENDED 31 MAY 2019

Revenue
Cost of sales

Gross profit
Other operating expenses

Operating loss
Net finance income

Loss on ordinary activities before taxation
Tax credit

Loss on ordinary activities after tax attributable to the equity
shareholders of the Company

Total comprehensive expense for the year

Loss per share (pence)
Basic and diluted

Note

2019
£

2018
£

563,092
(4,896)

458,389
(16,083)

558,196
5 (1,690,052)

442,306
(1,190,159)

6 (1,131,856)
1,283
7

(747,853)
59

(1,130,573)
157,464

(747,794)
117,007

(973,109)

(630,787)

(973,109)

(630,787)

(0.29)

(0.25)

The notes on pages 27 to 46 form part of these financial statements.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Consolidated Statement of Changes in Equity

FOR THE YEAR ENDED 31 MAY 2019

Group

At 31 May 2017
New shares issued
Costs associated with the
raising of funds
Total comprehensive expense
for the year

Share
Capital
£

Share
Premium
£

Capital
Reserve
£

Retained
Earnings
£

Translation
Reserve
£

615,167 2,376,033
355,500

88,875

299,900 (2,511,753)
–

–

(209,996)
–

–

(17,600)

–

(630,787)

–

At 31 May 2018

704,042 2,713,933

299,900 (3,142,540)

(209,996)

Share
option
Reserve
£

–
–

–

Total
£

569,351
444,375

(17,600)

(630,787)

365,339

New Shares issued
Costs associated with the
raising of funds
Share option expense reserve
Total comprehensive expense
for the year (excluding Share
option expense)

Total comprehensive expense
for the year

229,167 1,145,833

–
–

–

(82,912)
–

–

–
–

–

–
(261,300)

(711,809)

(973,109)

–

–
–

–

– 1,375,000

–
261,300

(82,912)
–

–

(711,809)

261,300

(711,809)

At 31 May 2019

933,209 3,776,854

299,900 (4,115,649)

(209,996)

261,300

945,618

Company

At 31 May 2017
New shares issued
Costs associated with the raising of funds
Total comprehensive expense for the year

At 31 May 2018

New shares issued
Costs associated with the raising of funds
Share option expense reserve
Total comprehensive expense for the year
(excluding Share option expense)

Total comprehensive expense for the year

Share
Capital
£

Share
Premium
£

Retained
Earnings
£

615,167 2,376,033 (2,380,784)
–
355,500
–
(17,600)
(931,379)
–

88,875
–
–

704,042 2,713,933 (3,312,163)

Share
option
Reserve
£

–
–
–
–

–

Total
£

610,416
444,375
(17,600)
(931,379)

105,812

229,167 1,145,833
(82,912)
–

–
–

–
–
(223,159)

– 1,375,000
(82,912)
–
–
223,159

–

(980,492)

–

(980,492)

– (1,203,651)

223,159

(980,492)

At 31 May 2019

933,209 3,776,854 (4,515,814)

223,159

417,408

The notes on pages 27 to 46 form part of these financial statements.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Consolidated Balance Sheet

AT 31 MAY 2019

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

Current assets
Trade and 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
Share option expense reserve
Retained earnings

Total equity

Liabilities

Current liabilities
Trade and other payables

Liabilities due after more than one year
Other payables

Total liabilities

Total equity and liabilities

Notes

2019
£

2018
£

13
14

6,428
449,497

6,560
154,416

455,925

160,976

493,446
540,735

261,862
632,285

1,034,181

894,147

1,490,106

1,055,123

18
933,209
18
3,776,854
18
299,900
18
(209,996)
261,300
18
18 (4,115,649)

704,042
2,713,933
299,900
(209,996)
–
(3,142,540)

945,618

365,339

498,342

500,859

498,342

500,859

46,146

188,925

544,488

689,784

1,490,106

1,055,123

The financial statements were approved and authorised for issue by the Board of Directors on 23 October 2019 and
were signed below on its behalf by:

Dr A J Riddell
Chairman

The notes on pages 27 to 46 form part of these financial statements.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Company Balance Sheet

AT 31 MAY 2019

Assets
Non-current assets
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
Share option expense reserve
Retained earnings

Total Equity

Current liabilities
Trade and other payables

Total current liabilities

Total Equity and Liabilities

Notes

2019
£

2018
£

–

29,131
452,697

32,426
181,883

481,828

214,309

481,828

214,309

933,209
18
3,776,854
18
223,159
18
18 (4,515,814)

704,042
2,713,933
–
(3,312,163)

417,408

105,812

417,408

105,812

64,420

108,497

64,420

108,497

481,828

214,309

The Company’s loss for the year was £1,203,651 (2018:£931,379).

The financial statements were approved and authorised for issue by the Board of Directors on 23 October 2019 and
were signed below on its behalf by:

Dr A J Riddell
Chairman

The notes on pages 27 to 46 form part of these financial statements.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Consolidated Cash Flow Statement

FOR THE YEAR ENDED 31 MAY 2019

Cash flows from operating activities
Loss before tax

Adjustments for:
Net finance income
Depreciation and amortisation
Share based payment expense
Increase in trade receivables
Decrease in other receivables
Increase/(Decrease) in trade payables
(Decrease)/Increase in other payables
Corporation tax received

Total adjustments

Net cash used in operating activities

Cash flows from investing activities
Purchase of tangible fixed assets
Purchase of intangible assets
Net finance income received

Net cash used in investing activities

Cash flows from financing activities
Net proceeds of share issue

Net cash generated from financing activities

Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

2019
£

2018
£

(1,130,573)

(747,794)

(1,283)
106,781
261,300
(114,323)
2,248
8,870
(154,164)
37,953

(59)
57,143
–
(38,318)
1,523
(11,546)
381,466
–

147,382

390,209

(983,191)

(357,585)

(3,422)
(398,308)
1,283

(6,250)
(127,525)
59

(400,447)

(133,716)

1,292,088

426,775

1,292,088

426,775

(91,550)
632,285

(64,526)
696,811

540,735

632,285

The notes on pages 27 to 46 form part of these financial statements.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Company Cash Flow Statement

FOR THE YEAR ENDED 31 MAY 2019

Cash flows from operating activities
Loss before tax

Adjustments for:
Net finance income
Provision against intercompany receivable
Share based payment expense
(Increase)/Decrease in other receivables
Decrease in trade payables
Decrease/(Increase) in other payables

Net cash used in operating activities

Cash flows from investing activities
Net finance income

Net cash generated from investing activities

Cash flows from financing activities
Net proceeds of share issue

Net cash generated from financing activities

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

Cash and cash equivalents at end of year

2019
£

2018
£

(1,203,651)

(931,379)

(1,364)
524,671
223,159
(521,253)
(23,393)
(20,808)

(59)
–
–
7,307
(11,508)
36,275

219,153

32,015

(1,022,639)

(899,364)

1,364

1,292,088

426,775

1,292,088

426,775

270,813
181,883

(472,530)
654,413

452,697

181,883

The notes on pages 27 to 46 form part of these financial statements.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Notes to the Financial Statements

1. General information

The Company is a public limited company domiciled in the United Kingdom and incorporated under registered
number 00598696 in England and Wales. The Company’s registered office is Unit 5, Grange Park, Broadway, Bourn,
Cambridgeshire, CB23 2TA.

The Company is quoted on AIM of the London Stock Exchange. These Financial Statements were authorised for
issue by the Board of Directors on 23 October 2019.

2. Adoption of the new and revised International Financial Reporting Standards

New standards impacting the Group that were adopted in the annual financial statements for the year ended
31 May 2019, are:

•

IFRS 9 Financial Instruments (IFRS 9); and

IFRS 15 Revenue from Contracts with Customers (IFRS 15)

At the date of approval of this financial information, the following IFRS Standards and Interpretations, which have
not been applied in these Financial Statements, were in issue but not yet effective. These new Standards,
Amendments and Interpretations are those in issue but not yet effective which are expected to impact on the Group
and are effective for accounting periods beginning on or after the dates shown below:

Mandatory for accounting periods commencing on or after 1 January 2019:

•

IFRS 16 – Leases

The Group has not early adopted this new standard. The Directors do not anticipate that the adoption of this
standard will have a material impact on the reported results aside from the recognition of a right to use asset and
liability for the Group’s office lease disclosed in note 19.

•

Improvements to IFRSs 2015-2017 Cycle (IFRS 3 Business Combinations and IFRS 11 Joint

Annual
Arrangements, IAS 12 Income Taxes, and IAS 23 Borrowing Costs)

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

3. Significant accounting policies

(a) Basis of preparation

These financial statements have been prepared in accordance with those IFRS standards and IFRIC interpretations
issued and effective or issued and early adopted as at the time of preparing these statements. The policies set out
below have been consistently applied to all the years presented.

No separate income statement is presented for the parent Company as provided by Section 408, Companies
Act 2006.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Notes to the Financial Statements

CONTINUED

3. Significant accounting policies (continued)

(b) Basis of consolidation

The Group financial statements consolidate the financial statements of Feedback plc and its subsidiaries (the
“Group”) for the years ended 31 May 2019 and 2018 using the acquisition method.

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

The Group incurred a net loss of £973,109 and had a net cash outflow of £983,191 from operating activities for the
year which are matters which may indicate a material uncertainty about the Group’s ability to continue as a going
concern. However, on 29 August 2019, the Company raised £2m before expenses by the issue of 166,666,667 new
ordinary shares at a price of 1.2 pence per share. Following this fundraise the directors updated and reviewed the
Group’s business plan and cash flow forecasts and consider that the Group and the Company will have adequate
cash resources for at least the next twelve months to 31 October 2020, from existing cash balances. These cash
balances will be used to provide working capital, enable continued product development and international expansion.
If further resources are required, the directors consider, that although future equity fundraising can never be
guaranteed, the group’s recent history of successful fundraising means it likely that the group will be able to raise
further finance through future equity issues. Accordingly, the Directors believe that the Group and Company are a
going concern and have therefore prepared the financial statements on a going concern basis.

(d)

Intangible assets

Intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses. An intangible
asset acquired as part of a business combination is recognised outside goodwill if the asset is separable or arises
from contractual or other legal rights and its fair value can be reliably measured.

The significant intangible asset cost related to software development of products which are integral to the trade
of the Group’s medical imaging products. Amortisation is recognised in other operating expenses in the income and
expenditure account.

The carrying value of intangible assets is reviewed for impairment whenever events or changes in circumstance
indicate that the carrying value may not be recoverable. Impairment losses are recognised in other operating
expenses in the income and expenditure account. Impairment reviews are carried out annually.

Research expenditure is recognised as an expense as incurred. Costs incurred on development projects (relating to
the design and testing of new or improved products) are recognised as intangible assets when it is probable that
the project will be a success, considering its commercial and technological feasibility, and costs can be measured
reliably. Other development expenditure is recognised as an expense as incurred. Development costs that have a
finite useful life and that have been capitalised are amortised from the commencement of the commercial
production of the product on a straight line basis as follows:

Intangible asset

Patents
Customer relationships
Software development

Useful economic life

Over the life of the patent
4 years
Over the anticipated life of the product

Software development costs capitalised in the year relate to products and product improvements which are yet to
be ready for use. They are not yet amortised.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Notes to the Financial Statements

CONTINUED

3. Significant accounting policies (continued)

(e) Valuation of Investments

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

(f) Cash and cash equivalents

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

(g) Goodwill

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

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

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

(h) Property, plant and equipment

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

Computer equipment

10 – 50% p.a.

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

(i)

Leases

Rental costs under operating leases are charged to the income statement in equal annual amounts over the period
of the lease.

(j)

Foreign currency

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

(k) Revenue recognition

Sales transactions include software installation, software licenses, scientific and software support and consultancy.
Revenue is measured at the fair value of the contractually agreed consideration received or receivable and represents
amounts receivable for services provided in the normal course of business, net of VAT. The Group recognises revenue
when the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow
to the entity; and when specific criteria have been met for each of the company’s activities, as described below.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Notes to the Financial Statements

CONTINUED

3. Significant accounting policies (continued)

(k) Revenue recognition (continued)

Revenue relating to software consultancy and similar services is recognised as the services are performed and
completed.

Revenue relating to the sale of software licences or associated support services is recognised over the contractual
period to which the licence relates or the duration of the support contract.

Revenue recognised from the sale of TexRAD software and related scientific support services are recognised over
the estimated duration of the Group’s involvement in a customer’s project which is considered to represent its
performance obligation. There are no explicit performance obligations as such but a clear understanding that the
Group will provide the support required as agreed when the sale was made.

The Directors have carefully considered the impact of IFRS 15 and the impact on both current year’s and prior year’s
accounting for sales revenue and they are of the opinion that the current accounting policy is complaint with this
standard.

(l) Pension Costs

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

(m) Taxation

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

The tax currently payable is based on taxable profit for the period. Taxable profit differs from net profit as reported
in the income statement because it excludes items of income or expense that are taxable or deductible in other years
and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated
by using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets
and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit,
and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable
temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits
will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition
(other than in a business combination) of other assets and liabilities in a transaction which affects neither the tax
profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and
associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the
liability is settled based upon tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is charged or credited in the income statement, except when it relates to items credited or charged
directly to equity, in which case the deferred tax is also dealt with in equity.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Notes to the Financial Statements

CONTINUED

3. Significant accounting policies (continued)

(n) Financial instruments

In relation to the disclosures made in note 17:

•

the Group does not hold or issue derivative financial instruments for trading purposes.

(o) Employee share options and warrants

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

The Group has issued equity-settled share-based payment transactions to certain employees and previously issued
warrants to the vendors of the acquired subsidiary, TexRAD Limited. Equity-settled share-based payment transactions
are measured at fair value at the date of grant. The fair value determined at the grant date of equity-settled share-
based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of
shares that will eventually vest. Fair value is measured by use of the Black Scholes option pricing model. The expected
life used in the model has been adjusted, based on management’s best estimate, for the effect of non-transferability,
exercise restrictions, and behavioural considerations.

(p) Key sources of estimation uncertainty

The preparation of financial statements requires the Board of Directors to make estimates and judgments that
affect reported amounts of assets, liabilities, revenues and expenses. These estimates are based on historical
experience and various other assumptions that management and the Board of Directors believe are reasonable
under the circumstances, the results of which form the basis for making judgments about the carrying value of
assets and liabilities that are not readily apparent from other sources. The key areas of judgement are:

•

Intangible assets – Patents are included at cost less amortisation and impairment. Other intangible assets
including development costs are recognised only when it is probable that a project will be a success. There is
a risk therefore that a project previously assessed as likely to be successful fails to reach the desired level of
commercial or technological feasibility. Where there is no probable income to be generated from these assets
an estimation of the carrying value and the impairment of the intangible assets and development costs,
including goodwill, has been made.

Fair value measurement – share options and warrants issued included in the Group’s and Company’s financial
statements require measurement at fair value. The calculation of fair values requires the use of estimates and
judgements.

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

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Notes to the Financial Statements

CONTINUED

4. Segmental reporting

The Directors have determined that the operating segments based on the management reports which are used to
make strategic decisions are medical imaging and head office.

Year ended 31 May 2019

Revenue
External

Expenditure
External

Loss before tax

Balance sheet
External Assets
External Liabilities

Capital expenditure

Year ended 31 May 2018

Revenue
External

Expenditure
External

Loss before tax

Balance sheet
External Assets
External Liabilities

Capital expenditure

Medical
Imaging
£

Head
Office
£

Total
£

563,092

–

563,092

(1,014,683)

(678,982)

(1,693,665)

(451,591)

(678,982)

(1,130,573)

1,008,278
(480,068)

481,828
(64,420)

1,490,106
(544,488)

528,210

417,408

945,618

401,724

–

401,724

Medical
Imaging
£

Head
Office
£

Total
£

458,389

–

458,389

(774,179)

(432,004)

(1,206,183)

(315,790)

(432,004)

(747,794)

840,814
(581,287)

214,309
(108,497)

1,091,395
(726,056)

259,527

105,812

365,339

133,775

–

133,775

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Notes to the Financial Statements

CONTINUED

4. Segmental reporting (continued)

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

External revenue by
location of customer

Total assets by
location of assets

Capital expenditure by
location of assets

2019
£

2018
£

2019
£

2018
£

2019
£

282,265
85,868
195,106

250,582
15,875
160,249

1,055,123
–
–

893,465
–
–

133,775
–
–

2018
£

18,141
–
–

563,092

458,389

1,490,106

1055,123

365,458

133,775

United Kingdom
Europe
Rest of the world

Total

Major customers

During the year ended 31 May 2019, the group generated £222,000 (2018: £150,000) of revenue from one
customer in the United Kingdom, which is equal to 40% (2018: 33%) of total group revenues in the year.

5. Other operating expenses

Administrative costs:

Employment and other costs
Amortisation and depreciation costs

6. Operating loss

This is stated after charging
Depreciation and amortisation

Owned assets
Amortisation of intangible assets

Foreign exchange differences
Auditors’ remuneration

Audit of parent company and group financial statements
Audit of subsidiaries
Tax and other services

Operating lease rentals
Land and buildings

Research and development costs expensed

2019
£

2018
£

1,583,271
106,781

1,133,016
57,143

1,690,052

1,190,159

2019
£

2018
£

3,554
103,227
8,488

14,000
8,500
–

12,179
38,408

3,799
53,344
11,181

10,000
6,500
5,000

9,417
–

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Notes to the Financial Statements

CONTINUED

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
Social security costs
Payments to defined contribution pension scheme
Share based payment expense

2019
£

1,283

2018
£

2019
Average

2018
Average

2
4
3

5
2
1

2019
£

2018
£

656,007
72,950
67,928
261,300

477,881
47,334
61,563
–

1,058,185

586,778

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

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 2019
Executive Directors
A Riddell
L Melvin
T. Oakley (appointed 9 April 2019)
D Crabb*** (to 6 July 2018)

Non-Executive Directors
T Irish**
S Sturge
A Riddell*

Total

Year ended 31 May 2018
Executive Directors
D Crabb
L Melvin
M P Hayball (to 14 April 2018)
B Ganeshan (to 14 April 2018)
Non-executive Directors
A H Menys
T Irish**
S Sturge
A Riddell*

Salary
£

Fees
£

Pension
£

Benefits
in kind
£

Total
£

41,591
72,107
18,712
30,178

–
–
–
–

–
10,861
–
2,708

–
–
–

25,000
–
2,667

–
–
–

–
626
–
28

–
–
–

41,591
83,594
18,712
32,914

25.000
–
2,667

162,588

27,667

13,569

654

204,478

Salary
£

Fees
£

Pension
£

Benefits
in kind
£

Total
£

41,667
9,533
78,750
70,000

20,075
–
–
–

–
–
–
–

–
24,514
–
45,417

2083
476
4,500
–

–
–
–
–

–

43,750
10,009
83,250
70,000

20,075
24,514
–
45,417

297,015

Total

220,025

69,931

7,059

During the year, retirement benefits under money purchase pension schemes were accruing to 2 directors (2018: 2).

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

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

*** D Crabb was paid £5,000 ex-gratia payment.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Notes to the Financial Statements

CONTINUED

8. Directors and employees (continued)

The following share options were issued and vested in the year and were outstanding at 31 May 2019 (2018:nil).
Further information is provided in Note 18.

A Riddell
L Melvin
T Oakley
S Sturge

9. Taxation on loss on ordinary activities

(a) The tax credit for the year:

UK Corporation tax

Current tax credit
Under provision in prior year
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 19% (2018 – 19%)
Effects of:
Expenses non-deductible for tax purposes
Additional deduction for R&D expenditure
Surrender of tax losses for R & D tax credit refund
Adjustments to tax charge in respect of previous periods
Deferred tax not recognised
Adjusting opening and closing deferred tax to average rate

Tax charge for the year

Number

4,000,000
2,800,000
9,332,081
2,500,000

2019
£

2018
£

(157,464)

(117,007)

(157,464)
–
–

(73,232)
(39,525)
(4,250)

(157,464)

(117,007)

(1,130,573)

(747,794)

(215,065)

(142,081)

56,624
(116,623)
48,869
–
61,496
7,235

2,155
(54,238)
22,727
(39,525)
93,995
–

(157,464)

(117,007)

In view of the tax losses carried forward there is a deferred tax amount of approximately £446,364 (2018: £422,587)
which has not been recognised in these Financial Statements. This contingent asset will be realised when the Group
makes sufficient taxable profits in the relevant company.

(d) Deferred tax – company

In view of the tax losses carried forward there is a deferred tax amount of approximately £425,318 (2018: £349,421)
which has not been recognised in these Financial Statements. This contingent asset will be realised when the
Company makes sufficient taxable profits.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

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
£1,203,651 (2018: £931,379 loss).

11. Loss per share

Basic earnings per share is calculated by reference to the loss on ordinary activities after taxation of £973,109
(2018: £630,787) and on the weighted average of 333,151,019 (2018: 252,403,981) shares in issue.

Net loss attributable to ordinary equity holders

Weighted average number of ordinary shares for basic earnings per share
Effect of dilution:

Share Options
Warrants

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

Loss per share (pence)
Basic
Diluted

As at
31 May 2019
£

As at
31 May 2018
£

(973,109)

(630,787)

As at
31 May 2019
£

As at
31 May 2018
£

333,151,019

252,403,981

–
–

333,151,019

252,403,981

(0.29)
(0.29)

(0.25)
(0.25)

As disclosed in note 22, the Company issued 166,666,667 ordinary shares in August 2019. There is no dilutive effect
of the share options and warrants as the dilution would be negative.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Notes to the Financial Statements

CONTINUED

12. Investments

Company
Cost
At 31 May 2017

At 31 May 2018

As at 31 May 2019

Provision for impairment
At 31 May 2017

At 31 May 2018

At 31 May 2019

Net Book Value
At 31 May 2019

At 31 May 2018

Share in
group
undertakings
£

Shares in
joint
venture
£

Total
£

2,334,455

1,000

2,335,455

2,334,455

1,000

2,335,455

2,334,455

1,000

2,335,455

2,334,455

1,000

2,334,455

1,000

2,335,455

2,334,455

1,000

2,335,445

–

All of the above investments are unlisted.

The directors have made full provision against the cost of investment in the subsidiaries due to the net liabilities
shown in the subsidiary financial statements.

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

Company

Activity

Feedback Black Box Company Limited

Dormant

Brickshield Limited

Dormant

Feedback Medical Limited

Medical Imaging

Country of
incorporation
and operation

England

Proportion of Shares held

100% Ordinary £1

100% A Ordinary £1
100% B Ordinary 1p

TexRAD Limited

Medical Imaging

England

100% Ordinary 1p

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

All the subsidiary companies have been included in these consolidated financial statements. Each subsidiary has a
registered office of Unit 5, Grange Park, Broadway, Bourn, Cambridgeshire CB23 2TA.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Notes to the Financial Statements

CONTINUED

13. Property, plant and equipment

Group
Cost of valuation
At 31 May 2017
Additions

At 31 May 2018
Additions

As 31 May 2019

Depreciation
At 31 May 2017
Charge for the year

At 31 May 2018
Charge for the year

At 31 May 2019

Net Book Value
At 31 May 2019

At 31 May 2018

Computer
Equipment
£

Total
£

13,818
6,250

20,068
3,422

13,818
6,250

20,068
3,422

23,490

9,709
3,799

13,508
3,554

9,709
3,799

13,508
3,554

17,062

6,428

6,560

6,428

6,560

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Notes to the Financial Statements

CONTINUED

14. Intangible assets

Group
Cost
At 31 May 2017
Additions

At 31 May 2018
Additions

At 31 May 2019

Amortisation
At 31 May 2017
Charge for the year

At 31 May 2018
Impairment charge
Amortisation charge for year

At 31 May 2019

Net Book Value
At 31 May 2019

At 31 May 2018

15. Trade and other receivables

Amounts falling due within one year
Trade receivables
Other receivables
Corporation tax recoverable
Prepayments

Software
development
£

Customer
relationships
£

Patents
£

Goodwill
£

Total
£

563,099
89,363

652,462
385,602

100,000
–

103,558
38,162

141,720
12,700

271,415
–

1,038,072
127,525

271,415
–

1,165,597
398,302

1,038,070

100,000

154,420

271,415

1,563,905

563,099
–

563,099
38,408
44,009

75,000
25,000

100,000
–
–

48,323
28,344

76,667
–
20,810

271,415
–

271,415
–
–

957,837
53,344

1,011,181
38,408
64,819

645,516

100,000

97,477

271,415

1,114,408

392,554

89,363

–

56,943

65,053

–

449,497

154,416

Group

Company

2019
£

2018
£

2019
£

2018
£

202,623
11,843
248,585
30,395

88,300
19,718
129,075
24,769

–
7,783
–
21,348

–
15,744
–
16,682

493,446

261,862

29,131

32,426

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Notes to the Financial Statements

CONTINUED

16. Trade and other payables

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

Amounts falling due after one year
Deferred income

17. Financial instruments

Group

Company

2019
£

2018
£

2019
£

2018
£

30,538
4,081
39,311
78,691
345,721

57,400
–
77,892
73,579
291,988

14,608
–
7,312
42,500
–

38,000
–
6,817
63,680
–

498,342

500,859

64,420

108,497

46,146

188,925

–

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

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

•

Credit risk

Foreign currency risk

Liquidity risk

Cash flow interest rate risk

Reliance on one major customer

Fair value Hierarchy

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

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

— Level 2: other techniques for which all inputs that have a significant effect on the recorded fair value are

observable, either directly or indirectly

— Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based

on observable market data

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

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Notes to the Financial Statements

CONTINUED

17. Financial instruments (continued)

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

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

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

Credit risk

The Group is exposed to credit risk primarily on its trade receivables, which are spread over a range of countries, a
factor that helps to dilute the concentration of the risk. The IFRS 9 expected credit loss impairment model is
applicable to the Group’s financial assets including trade receivables.

Group policy, implemented locally, is to assess the credit risk of each new customer before entering into binding
contracts. Each customer account is then reviewed on an ongoing basis (at least once a year) based on available
information and payment history.

The maximum exposure to credit risk is represented by the carrying value in the balance sheet.

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

Current financial assets
Trade and other receivables
Cash and cash equivalents

Analysis of trade receivables

2019

2018

Cash, loans
and receivables

2019
£

2018
£

214,466
540,735

108,018
627,910

755,201

735,928

Total
£

Current
£

30 days
past due
£

60 days
past due
£

90 days
past due
£

202,623

68,149

51,602

38,225

44,646

88,300

56,758

28,676

–

2,865

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

The Group policy is to make provisions against those debts that are overdue, unless there are grounds for believing
that the debts will be collected. During the year the value of provisions made in respect of bad and doubtful debts
was £Nil (2018: £Nil).

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Notes to the Financial Statements

CONTINUED

17. Financial instruments (continued)

Foreign currency risk

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

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

The following table shows the net assets, stated in pounds sterling, exposed to exchange rate risk that the Group
has at 31 May 2019:

Trade receivables

2019
£

2018
£

104,904

86,140

104,904

86,140

A 5% increase/fall in exchange rates at 31 May 2019 would had created a profit/loss of £5,245. The Group is
exposed to currency risk because of the subsidiaries undertaking trading transactions in US dollars and Euros. The
Directors do not generally consider it necessary to enter into derivative financial instruments to manage the
exchange risk arising from its operations, but from time to time where the Directors consider foreign currencies are
weak and it is known that there would be a requirement to purchase those currencies, forward arrangements may
be entered into. There were no outstanding forward currency arrangements as at 31 May 2019 or at 31 May 2018.

Liquidity risk

Cash flow forecasting is performed for both the Group and in the operating entities of the Group. Rolling forecasts
of the Group’s liquidity requirements are monitored to ensure it has sufficient cash to meet operational needs.

Current financial liabilities
Trade and other payables

Financial liabilities
measured
at amortised cost

2019
£

2018
£

153,621

208,746

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

2019
Trade and other payables

2018
Trade and other payables

Carrying
amount
£

Contractual
cash flow
£

6 months
or less
£

116,349

208,746

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Notes to the Financial Statements

CONTINUED

17. Financial instruments (continued)

Cash flow interest rate risk

The Group presently has no substantial interest rate risk exposure.

Capital under management

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

The group’s objectives when managing the capital are:

•

To safeguard the group’s ability to remain a going concern.

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

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

18. Share capital and reserves

Authorised and issued share capital
Ordinary shares of 0.25 pence each

Allotted, called up and fully paid share capital:

As at 31 May 2018
Issued

As at 31 May 2019

2019
£

2018
£

933,209

704,042

Number

281,616,584
91,666,666

246,066,584
35,550,000

373,283,250

281,616,584

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Notes to the Financial Statements

CONTINUED

18. Share capital and reserves (continued)

Share Options

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

Share options are valued using the Black-Scholes option pricing model and no performance conditions are included
in the fair value calculations. The risk free rate was 0.751%. The expected volatility is based on historical volatility
adjusted for expectations of future volatility following changes to the Group’s strategy. The average share price
during the year was 1.52 pence. During the year the Company had the following share options in issue:

At 31 May
2018

2,400,000
4,000,000
4,000,000
–
–
–
–
–
–

10,400,000

Number of options

Lapsed

Exercised

Issued

At 31 May
2019

Exercise price
(pence)

–
–
–
–
–
–
–
–
–

–

–
–
–
–
–
–
–
–
–

–
–
–
4,000,000
2,500,000
2,800,000
2,800,000
2,800,000
9,332,081

2,400,000
4,000,000
4,000,000
4,000,000
2,500,000
2,800,000
2,800,000
2,800,000
9,332,081

– 24,232,081

34,632,081

1.25
3.00
5.00
1.86
1.86
1.86
1.86
1.86
1.09

Exercise date

21/05/14 to19/05/24
21/05/15 to19/05/24
21/05/15 to19/05/24
26/06/18 to 26/06/28
26/06/18 to 26/06/28
01/03/19 to 26/06/28
01/03/19 to 26/06/28
01/03/19 to 26/06/28
09/04/19 to 09/04/29

All share options vested one year after the grant date. Each option can only be exercised from one year after the
grant date to ten years after the date of grant.

Warrants

Warrants were issued to the vendors of TexRAD Limited at the time of acquisition. The warrants are exercisable from
the end of the vesting period and lapse ten years after the grant date. The Group has no legal or constructive
obligation to repurchase or settle the warrants in cash.

Number of warrants

At 31 May
2018

4,200,000
18,200,000

22,400,000

Granted

Exercised

At 31 May
2019

Exercise price
(pence)

Exercise date

–
–

–

–
–

–

4,200,000
18,200,000

22,400,000

1.25
3.00

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

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Notes to the Financial Statements

CONTINUED

18. Share capital and reserves (continued)

Reserves

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

Share premium

Amount subscribed for share capital in excess of nominal value

Capital reserve

Reserve on consolidation of subsidiaries

Translation reserve

Gains and losses on the translation of overseas operations into GBP

Retained earnings

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

Share Option Reserve

Fair value of share options issued

19. Financial commitments

Total future minimum lease payments under non-cancellable operating leases for the Group’s business premises.

In less than one year
Later than one year and less than five years
Later than five years

20. Pensions

2019
£

9,125
48,296
–

2018
£

11,088
37,884
–

The Company operated a defined contribution scheme during the year and the assets of the scheme are held
separately from those of the Group in an independently administered fund. The pension cost represents
contributions payable and amounted to £57,067 (2018: £61,563). A balance of £- (2018: £5,431) was payable at
the year end.

21. Related party transactions

Key management personnel

Refer to note 8 for detail on directors’ remuneration.

The Directors interests in shares of the Company are contained in the Directors’ Report.

22. Post balance sheet events

On 29 August 2019, the Company raised £2m by the issue of 166,666,667 new ordinary share at a price of
1.2 pence per share, raising £2m before expenses totalling £86,000.

23. Ultimate controlling party

There is no ultimate controlling party.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Notice of Annual General Meeting

Notice is hereby given that the annual general meeting (“Meeting”) of Feedback plc (the “Company”) is to be
held at the offices of Peterhouse Corporate Finance Limited, 80 Cheapside, London, EC2V 6EE at 3.00 p.m. on
18 November 2019. You will be asked to consider and vote on the resolutions below. Resolutions 1, 2,3, 4, 5 and
6 will be proposed as ordinary resolutions and resolution 7 will be proposed as a special resolution.

Ordinary resolutions

To receive and adopt the Company’s annual accounts for the financial year ended 31 May 2019 together with
the Directors’ report and the auditors’ report on those accounts.

To re-elect T Irish, 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 elect T Oakley, who, having been appointed since the last annual general meeting of the Company, retires
pursuant to the articles of association of the Company and who, being eligible, offers himself for re-election
as a Director.

To elect R Shaw, who, having been appointed since the last annual general meeting of the Company, retires
pursuant to the articles of association of the Company and who, being eligible, offers himself for election as
a Director.

To appoint Price Bailey 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.

That the Directors be generally and unconditionally authorised and empowered pursuant to and in accordance
with section 551 of the Companies Act 2006 (the ”Act”) to exercise all the powers of the Company to allot
shares and/or grant rights to subscribe for or to convert any security into shares (“Rights”):

up to an aggregate nominal value of £449,959 (being the nominal value of approximately one third of
the issued share capital of the Company); and

up to an aggregate nominal value of £899,917 (being the nominal value of approximately two thirds of
the issued share capital of the Company) (such amount to be reduced by the nominal amount of any
shares allotted or Rights granted under paragraph a) in connection with an offer by way of a rights issue
or other pre-emptive offer to:

ii.

the holders of Ordinary Shares in proportion (as nearly as may be practicable) to the respective
numbers of Ordinary Shares held by them; and

holders of other equity securities, as required by the rights of those securities or, subject to such
rights, as the directors otherwise consider necessary,

such authorities to expire on the earlier of the next annual general meeting of the Company held after the date
on which this resolution is passed and the date 15 months after the passing of this resolution, save that the
Company may at any time before such expiry make any offer(s) or enter into any agreement(s) which would
or might require shares to be allotted or Rights to be granted after such expiry and the Directors may allot shares
or grant Rights in pursuance of any such offer(s) or agreement(s) as if the authority conferred hereby had not
expired. This resolution revokes and replaces all unexercised authorities previously granted to the Directors to
allot shares or grant Rights but without prejudice to any allotment of shares or grant of Rights already made,
offered or agreed to be made pursuant to such authorities.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Notice of Annual General Meeting

CONTINUED

Special resolution

That subject to and conditional upon the passing of resolution number 6 above, the Directors be generally
authorised in accordance with section 570 of the Act to allot equity securities (as defined in Section 560 of the
Act) of the Company for cash as if section 561(1) of the Act did not apply to any such allotment, provided that
this authority shall be limited to:

the allotment of equity securities in connection with an offer by way of rights issue in favour of the
holders of equity securities in proportion (as nearly as may be possible) to the respective number of
Ordinary Shares held by them, but subject to such exclusions or other arrangements as the Directors
may deem necessary or expedient to deal with fractional entitlements or legal or practical problems in
respect of overseas holders or otherwise; and

the allotment of equity securities (otherwise than pursuant to sub-paragraph (a) above) up to a maximum
aggregate nominal value of £134,988 (being the nominal value of approximately 10 per cent. of the
issued share capital of the Company),

and this authority shall expire on the earlier of the conclusion of the next annual general meeting of the
Company held after the date on which this resolution becomes unconditional and the date 15 months after
the passing of this resolution save that the Company may make any offer(s) or enter into any agreement(s)
before such expiry which would or might require equity securities to be allotted after such expiry and the
Directors may allot equity securities pursuant to any such offer(s) or agreement(s) as if the authority conferred
hereby had not expired. This resolution revokes and replaces all unexercised authorities previously granted to
the Directors to allot equity securities but without prejudice to any allotment of equity securities already made,
offered or agreed to be made pursuant to such authorities.

Dated 23 October 2019

By order of the Board

Alastair Riddell
Chair

Feedback plc
Grange Park
Broadway
Bourn
Cambridgeshire
CB23 2TA

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

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 6 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 7 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 – 4: Re-election of directors

The Company’s articles of association require one-third of the Board (excluding for this purpose any director seeking
re-appointment at the first AGM since their appointment) to retire and seek re-election at the AGM. Accordingly,
Tim Irish will retire and seek re-election and, being eligible, the Board proposes his re-election as a Director of the
Company. Alastair Riddell, who is retiring with effect from the close of the Meeting and is not offering himself for
re-election, is also included for the purposes of calculating the one-third number required to retire by rotation.

As is required by the Company’s articles of association, Tom Oakley and Rory Shaw are retiring at the first AGM since
their appointments and the Board proposes them for election as Directors of the Company.

Resolution 5: Auditors appointment and remuneration

It is a requirement that the Company’s auditor must be appointed 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 appointment of Price Bailey. The resolution proposes Price Bailey’s appointment and
to authorise the Directors to determine their remuneration.

Resolution 6: 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
£899,917 which is equal to two thirds 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 the date 15 months after the passing
of the resolution (whichever is the earlier).

Resolution 7: 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 £134,988, which is equal to approximately 10% of
the nominal value of the current share capital of the Company, without first offering them to existing shareholders
in proportion to their existing holdings. 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 the date 15 months after the passing of the resolution (whichever
is the earlier).

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

Notice of Annual General Meeting

CONTINUED

Notes
1.

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, The Courtyard,
17 West Street, Farnham, Surrey GU9 7DR or by scan and email to Share Registrars at proxies@shareregistrars.uk.com, not
later than 3 p.m. on 14 November 2019.

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 14 November 2019 (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, The Courtyard, 17 West Street, Farnham, Surrey, GU9 7DR. 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 3 p.m. on 14 November 2019.

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 539,949,917
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 539,949,917.

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

For your notes

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

For your notes

Printed by Michael Searle & Son Limited

Feedback plc
Report of the Directors and Consolidated Financial Statements
For the year ended 31 May 2019

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