TIDMFDBK

RNS Number : 2743D

Feedback PLC

18 February 2020

Feedback plc

Interim Results for the six months to 30 November 2019

Forging a leading position in the mobile medical communications market

London, UK, 18 February 2020 - Feedback plc (AIM: FDBK, "Feedback" or the "Company"), the specialist medical imaging technology company, announces its unaudited results for the six months to 30 November 2019.

Operational highlights (including post period-end)

   --     Completion of Strategic Review drives focus on Cadran portfolio 
   --     Development and launch of new flagship product, Bleepa(TM) 
   --     Revolutionary new app enables clinicians to review medical grade images on devices 

- Allows clinician-to-clinician communications to enable better and faster treatment for patients

- Launched at NHS Expo in September 2019 to strong interest from clinicians and healthcare professionals

- First pilot study underway with Pennine Acute Hospitals NHS Trust with positive early indications that average time to inpatient referral has more than halved due to Bleepa(TM)

   -     Secure and GDPR compliant for patient data 
   --     TexRAD continues to be sold within the research setting through third party distributors 

-- Post-period: Cadran licence agreement with Imaging Engineering to support installation and refitting of modernised fluoroscopy equipment across US

   --     Strengthened Board 
   -     Prof. Rory Shaw became Chairman when Alastair Riddell stepped down 

- Post-period: Appointment of Adam Denning, Former Assistant Technical Advisor to Bill Gates, as Non-Executive Director

Financial summary

   --     Recognised revenue for the six-month period up 14% to GBP269k (H1 2018: GBP236k) 

-- Loss after tax for the six-month period of GBP603k (H1 2018: loss GBP369k) due to recruitment to service new opportunities and launch the Company's flagship product, Bleepa(TM)

   --     Increased investment in software development to GBP301k (H1 2018: GBP106k) 

-- Loss before interest, tax and amortisation for the six-month period of GBP684k (H1 2018: loss GBP400k)

-- Cash at 30 November 2019 was GBP1.53m (30 November 2018: GBP1.37m) following the equity fundraise in August 2019, raising GBP2m before expenses

Dr Tom Oakley , C EO of Feedback, commented:

"We have deliberately changed the Company's strategy to focus on the Cadran portfolio and transition into the emerging mobile medical market; this strategy is already bearing fruit.

"During the past six months, we completed the development of our new flagship product, Bleepa(TM). Following its launch in September at the NHS Expo, we have received significant interest and entered our first Pilot study within an NHS setting, from which early indications show great promise. We believe that Bleepa(TM) has the potential to revolutionise the way clinicians are able to communicate with each other and advance treatment of their patients, quickly.

"Further evidence of the new strategy gaining traction is our first commercial contract of the Cadran platform outside of the NHS. With growing momentum and the strengthening of our Board with the appointment of Adam Denning, 2020 is looking to be a promising year for Feedback."

Enquiries:

 
 Feedback plc                                       +44 (0)1954 718072 
  Rory Shaw, Chairman                                IR@fbk.com 
  Tom Oakley, CEO 
  Lindsay Melvin, CFO 
 Allenby Capital Limited (Nominated Adviser) 
  David Worlidge / Asha Chotai                      +44 (0)20 3328 5656 
 Peterhouse Corporate Finance Ltd (Joint Broker) 
  Lucy Williams / Duncan Vasey                      +44 (0)20 7469 0936 
 Stanford Capital Partners Limited (Joint 
  Broker) 
  Patrick Claridge / John Howes                     +44 20 3815 8880 
 Instinctif Partners                                +44 (0)20 7457 2020 
  Melanie Toyne-Sewell / Phillip Marriage            feedbackplc@instinctif.com 
 

About Feedback plc - www.fbk.com

Feedback plc (AIM: FDBK) is a specialist medical imaging technology company providing innovative software and systems, through its fully-owned trading subsidiary, Feedback Medical Limited. Its products advance the work of radiologists, clinicians and medical researchers by improving workflows and giving unique insights into diseases, particularly cancer.

Feedback has launched Bleepa(TM) , a new secure, encrypted medical communication app for clinicians accessible through smartphones, tablets and desktops that facilitates rapid clinical messaging and review of medical grade imaging for all members of a clinical team, directly from a hospital Picture Archiving and Communications System (PACS). For more information on Bleepa(TM) , see www.bleepa.com .

Chairman and Chief Executive's Statement

The first six months of the financial year has seen great change within Feedback. Following the appointment of Dr Tom Oakley as CEO in February 2019, the Company took the opportunity to complete a strategic review to assess its assets and determine the best of use of Company funds to create value for shareholders.

The outcome of the strategic review has prioritised the Cadran portfolio where the Company sees the greatest opportunity for growth. Cadran is Feedback's established Picture Archiving and Communications System (PACS) which facilitates the review of medical imaging studies by clinicians. It is a progressive and rigorously tested Class 1 medical device with a longstanding legacy of service at NHS institutions.

Prior to the introduction of Bleepa(TM), it was only possible to view medical grade images on desktop computers and discuss them by telephone. According to BMJ Innovations, 97% of hospital doctors routinely use WhatsApp to communicate about patients(1) (.) This increasing trend for clinicians to use personal devices to discuss patient care and make clinical decisions is more convenient and efficient than traditional methods of clinical communication. This has raised concerns that images shared over these modalities are not of sufficient quality to make clinical decisions and sharing data in this way breaches data protection legislation, leaving hospitals and individual staff open to the risk of litigation.

Feedback has added a dedicated, encrypted messaging function to its existing Cadran technology to create Bleepa(TM), the leading mobile communication application on the market capable of sharing clinical grade medical imaging directly from a hospital PACS to mobile devices.

Bleepa(TM)

In July 2019, Feedback announced the launch of its new flagship product, Bleepa(TM), a revolutionary clinical messaging app, as the Company's first step to establish a leading role in the mobile medical communication market.

Bleepa(TM) is an innovative new app which allows medical staff to securely view and discuss high quality medical grade images on mobile devices directly from the hospital's PACS. Bleepa(TM) can display any type of image including X-rays, CTs, MRIs and ultrasound studies allowing users to easily scroll through image slices and annotate areas of interest. Questions can be asked alongside annotations and submitted into the chat where they can be securely reviewed by colleagues at the swipe of a finger, with instant access to the original image.

The Directors believe Bleepa(TM) has the potential to be the leading medical communication tool on the market and are confident it will become a CE marked medical device.

In September 2019, Feedback unveiled Bleepa(TM) for the first time to over 6,000 conference delegates at NHS Expo in Manchester, where it received strong interest from clinicians and professionals across both public and private hospitals, within the UK and internationally.

In November 2019, Feedback initiated its first pilot study for Bleepa (TM) with Pennine Acute Hospitals NHS Trust in Manchester. The study, which is now underway, is being carried out initially by Dr Georges Ng Man Kwong's team who receive respiratory requests for specialist review of inpatients from other clinical teams. The study, which went live during December will last for approximately three months and will assess how Bleepa (TM) supports the workflow of cross team referrals. It is anticipated that a number of additional clinicians from various specialities will be involved in the study and key endpoints will examine the system benefits of Bleepa (TM) deployment. The quality of data, user experience and impact on patient care are the focus of the study with pre and post benchmarks executed and scheduled.

Early indications from a small cohort in this study show great promise. Initial findings demonstrate Bleepa(TM) has more than halved the average referral time and enabled 60% of cases to be dealt with entirely through Bleepa(TM) without the need for the clinical team to take any action other than to discuss each case through Bleepa(TM). If this trend continues, this study will clearly demonstrate Bleepa(TM) capabilities to enable faster clinical decision making between team members wherever they are, accelerate and improve patient care, whilst reducing the burden on already overladen clinical staff.

TexRAD(R)

As announced at the AGM in November 2019, the strategic review of the TexRAD medical image analysis technology reached the conclusion that although TexRAD remains a leading tool in the field of Radiomics further clinical data is required to support a US FDA submission and move TexRAD into frontline clinical delivery where the true opportunity for the technology lies. This additional data is provided by independent studies at academic institutions and therefore the timing of data supplied is outside the Company's control. Further investment in the product has been put on hold until a supporting evidence base materialises.

Included in Feedback overheads for the six-month period ended 30 November 2019 were costs totalling GBP53k (2018: GBPnil) relating to TexRAD product enhancements and in developing the Indian market. However, TexRAD invoiced sales for the period totalled GBP128k (2018: GBP209k) and so these development costs together with direct selling and customer support costs meant that TexRAD was a loss-making division for the period. In response to this position, the Board took the decision to continue selling TexRAD to academic customers solely through third party distributors on a commission only basis and to reduce the internal cost base associated with TexRAD sales. This led to the redundancy of the Global Business Development Director role and the exit of Dr Balaji Ganeshan from the company. Dr Ganeshan ceased to be a director of Feedback Medical Limited on 18 February 2020.

The Company will continue to sell TexRAD within the research community through third party distributors and assess any future opportunities that may arise for the TexRAD platform.

Building commercial partnerships

The Company's focus on the Cadran platform extends beyond its flagship product, Bleepa(TM), with the potential to utilise the software capabilities of the Cadran system to enable potential partners to upgrade and manage their existing imaging systems.

Post-period, in January 2020, Feedback announced a commercial partnership with Imaging Engineering LLC, a US-based specialist technology provider, to support the installation and refitting of modernised fluoroscopy equipment across the US. Fluoroscopy is a form of dynamic X-ray capture which enables real time, moving patient imaging and is commonly used for a number of imaging investigations within gastroenterology, orthopaedics and interventional radiology.

Utilising the Cadran platform, Feedback will provide the core software to manage the entire system for the "Insight Essentials" product, from image capture through data management to DICOM (Digital Imaging and Communications in Medicine) networking. Feedback's software will enable a wide-ranging Imaging Engineering initiative to update fluoroscopy equipment across the United States, with an initial focus on 200 provider sites. Under the terms of the agreement, Feedback Medical, Feedback's plc's wholly owned subsidiary, will receive a licence fee for each installation performed by Imaging Engineering and has no commitment beyond providing and maintaining the software under this licence.

The Company believes there are similar opportunities to help companies modernise their existing equipment that require minimal labour resource from Feedback. These opportunities have the potential to bring additional revenue streams without distraction from the core focus of the business.

Strengthening the Board

The appointment of Tom Oakley as CEO earlier in the year has set Feedback on a new and exciting course at the forefront of the digital revolution in medical communication.

Following the news of Alastair Riddell's wish to retire in August 2019, Rory Sha w became Chairman in November 2019, following his role as Medical Director of Feedback Medical Limited. During his tenure, Alastair guided Feedback to realise the potential of its proprietary technology and has left the Company with a bright and promising future.

Post-period, in February 2020, Adam Denning joined the Company as non-executive director. As former assistant technical adviser to Bill Gates with 25 years of experience at Microsoft, he brings extensive software delivery skills to Feedback.

Financial review

In the six months to 30 November 2019, recognised revenue in the period increased 14% to GBP269k (H1 2018: GBP236k). Loss after tax increased to GBP603k (H1 2018: loss GBP369k) due to higher cost base following the recruitment programme to service new opportunities and the launch of the Company's flagship product, Bleepa(TM). Loss before interest, tax and amortisation was GBP684k (H1 2018: loss GBP400k). During the period, Feedback invested GBP301k with Future Processing on software development of Bleepa(TM) (H1 2018: GBP106k). This intangible asset will be amortised against future income streams stemming from this investment. The tax credit reflects the research and development tax credit available to Feedback Medical.

Feedback continues to focus on rigorous cost control, with existing overheads kept well monitored. Cash at 30 November 2019 was GBP1.5 3m (30 November 2018: GBP1.37m) following the equity fundraise in August 2019, raising GBP2m before expenses.

Current trading and outlook

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 higher recurring revenues for the Company and position it to capture the emerging mobile medical communications market.

We believe the new strategy and subsequent development of Bleepa(TM) has transformed the Company. With our first pilot study underway, momentum for Bleepa continues to build. In the coming months we will receive the results of the pilot study and anticipate others to follow, which we aim to convert into meaningful contracts. Cadran also offers the opportunity to develop software management partnerships that will provide a supporting revenue stream to enable further development of the platform. Our new focus will enable the Company to drive forward and secure a position as a leader in mobile medical communications.

Dr T Oakley, CEO

Prof R Shaw, Chairman

(1) O'Sullivan DM, O'Sullivan E, O'Connor M, et al WhatsApp Doc? BMJ Innovations 2017;3:238-239.

UNAUDITED INTERIM STATEMENT OF COMPREHENSIVE INCOME

 
                                        Notes      unaudited      unaudited    audited 
                                                  Six months     Six months    Year to 
                                                          to             to     31 May 
                                                 30 November    30 November       2019 
                                                        2019           2018    GBP'000 
                                                     GBP'000        GBP'000 
 
 Revenue                                                 269            236        563 
 
 Cost of sales                                           (4)            (1)        (5) 
                                               -------------  -------------  --------- 
 
 Gross profit                                            265            235        558 
 
 
 Other operating expenses                              (956)          (642)    (1,690) 
 
 
 Operating loss                                        (691)          (407)    (1,132) 
 
 Net finance income                                        -              -          1 
                                               -------------  -------------  --------- 
 
 Loss on ordinary activities before 
  taxation                                             (691)          (407)    (1,131) 
 
 Tax credit                                               88             38        159 
                                               -------------  -------------  --------- 
 
 Loss on ordinary activities 
  after tax attributable to the 
  equity shareholders of the Company                   (603)          (369)      (972) 
                                               -------------  -------------  --------- 
 
 
 
  Total comprehensive loss for 
  the period                                           (603)          (369)      (972) 
                                               -------------  -------------  --------- 
 
 
 LOSS PER SHARE (pence) 
 
 Basic and diluted                        2           (0.13)         (0.13)     (0.29) 
                                               -------------  -------------  --------- 
 
 
 

UNAUDITED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 
                           Share      Share    Capital    Retained   Translation      Share     Total 
                         Capital    Premium    Reserve    Earnings       Reserve     Option 
                                                                                    Reserve 
                         GBP'000    GBP'000    GBP'000     GBP'000       GBP'000    GBP'000   GBP'000 
 At 1 June 2018              704      2,714        300     (3,143)         (210)          -       365 
 New Shares issued           229      1,146          -           -             -          -     1,375 
 Costs associated 
  with the raising 
  of funds                     -       (83)          -           -             -          -      (83) 
 Total comprehensive 
  expense for the 
  period                       -          -          -       (369)             -          -     (369) 
                       ---------  ---------  ---------  ----------  ------------  ---------  -------- 
 At 30 November 
  2018                       933      3,777        300     (3,512)         (210)          -      1288 
 Share option 
  expense reserve              -          -          -       (261)             -        261         - 
 Total comprehensive 
  expense for the 
  period                       -          -          -       (342)             -          -     (342) 
                       ---------  ---------  ---------  ----------  ------------  ---------  -------- 
 At 31 May 2019              933      3,777        300     (4,115)         (210)        261       946 
 
 New Shares issued           417       1583          -           -             -                2,000 
 Costs associated 
  with the raising 
  of funds                     -      (139)          -           -             -                (139) 
 Total comprehensive 
  expense for the 
  period                       -          -          -       (603)             -                (603) 
                       ---------  ---------  ---------  ----------  ------------  ---------  -------- 
 
 At 30 November 
  2019                     1,350      5,221        300     (4,718)         (210)        261     2,204 
                       ---------  ---------  ---------  ----------  ------------  ---------  -------- 
 

UNAUDITED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 
                                                       unaudited      unaudited    audited 
                                                     30 November    30 November     31 May 
                                                            2019           2018       2019 
                                                         GBP'000        GBP'000    GBP'000 
                                   Notes 
 ASSETS 
 Non-current assets 
 Property, plant and equipment                                11              6          6 
 Intangible assets                   3                       753            276        450 
                                          ---------------------- 
                                                             764            282        456 
                                          ----------------------  -------------  --------- 
 Current assets 
 Trade receivables                                           144            190        203 
 Other receivables                                            18             13         41 
 Corporation tax receivable                                  247            129        249 
 Cash and cash equivalents                                 1,526          1,367        541 
                                          ----------------------  -------------  --------- 
                                                           1,935          1,699      1,034 
 
 Total assets                                              2,699          1,981      1,490 
                                          ----------------------  -------------  --------- 
 
 
 EQUITY 
 Capital and reserves 
  attributable to the Company's 
  equity shareholders 
 Called up share capital                                   1,350            933        933 
 Share premium account                                     5,221          3,777      3,777 
 Capital reserve                                             300            300        300 
 Translation reserve                                       (210)          (210)      (210) 
  Share option expense 
   reserve                                                   261              -        261 
 Retained earnings                                       (4,718)        (3,512)    (4,115) 
                                          ----------------------  -------------  --------- 
 T otal equity                                             2,204          1,288        946 
                                          ----------------------  -------------  --------- 
 
   Current liabilities 
 Trade payables                                              143            106         31 
 Other payables                                              346            390        467 
                                          ---------------------- 
 
                                                             489            496        498 
 
 
   Non-current liabilities 
 Other payables                                                6            197         46 
                                          ----------------------  -------------  --------- 
 
 Total liabilities                                           495            693        544 
                                          ---------------------- 
 
 TOTAL EQUITY AND LIABILITIES                              2,699          1,981      1,490 
                                          ----------------------  -------------  --------- 
 

UNAUDITED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

 
                                                unaudited         unaudited      audited 
                                               Six months        Six months         Year 
                                           to 30 November    to 30 November    to 31 May 
                                                     2019              2018         2019 
                                                  GBP'000           GBP'000      GBP'000 
 
 Cash flows from operating activities 
 Loss before tax                                    (691)             (407)      (1,131) 
                                         ----------------  ----------------  ----------- 
 Adjustments for: 
 Depreciation and amortisation                          7                 7          107 
 Net finance income                                     -                 -          (1) 
 Share-based payment expense                            -                 -          261 
 Decrease/(Increase) in trade 
  receivables                                          58             (102)        (115) 
 Decrease in other receivables                         13                32            2 
 Increase in trade payables                           111                49            9 
 Decrease in other payables                         (143)              (46)        (153) 
 Corporation tax received                              91                38           38 
                                         ----------------  ----------------  ----------- 
                                                      137              (22)          148 
                                         ----------------  ----------------  ----------- 
 
 Net cash used in operating activities              (554)             (429)        (983) 
 
 Cash flows from investing activities 
 Purchase of tangible fixed assets                   (12)                 -          (3) 
 Purchase of intangible assets                      (310)             (128)        (398) 
 Net finance income received                            -                 -            1 
 
 Net cash used in investing activities              (322)             (128)        (400) 
                                         ----------------  ----------------  ----------- 
 
 Cash flows from financing activities 
 Net proceeds of share issue                        1,861             1,292        1,292 
                                         ----------------  ----------------  ----------- 
 
 Net cash generated from financing 
  activities                                        1,861             1,292        1,292 
                                         ----------------  ----------------  ----------- 
 
 Net increase/(decrease) in cash 
  and cash equivalents                                985               735         (91) 
 Cash and cash equivalents at 
  beginning of period                                 541               632          632 
 
 Cash and cash equivalents at 
  end of period                                     1,526             1,367          541 
                                         ----------------  ----------------  ----------- 
 

NOTES TO THE UNAUDITED INTERIM REPORT

   1.             BASIS OF PREPARATION 

The accounting policies are unchanged from the financial statements for the year ended 31 May 2019.

The information set out in this interim report for the six months ended 30 November 2019 does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. The accounts for the year ended 31 May 2019 have been filed with the Registrar of Companies.

This interim report was approved by the directors on 17 February 2020.

   2.         LOSS PER SHARE 

Basic earnings per share are calculated by reference to the loss on ordinary activities after and on the weighted average number of shares in issue.

 
                                  unaudited        unaudited         audited 
                              Six months to    Six months to         Year to 
                                30 November      30 November          31 May 
                                       2019             2018            2019 
                                    GBP'000          GBP'000         GBP'000 
 
 Net loss attributable 
  to ordinary equity 
  holders                             (603)            (369)           (973) 
                            ---------------  ---------------  -------------- 
 
                              Six months to    Six months to         Year to 
                                30 November      30 November          31 May 
                                       2019             2018            2019 
 Weighted average number 
  of ordinary shares 
  for basic earnings 
  per share                     449,131,065      281,616,584     333,151,019 
 Effect of dilution: 
    Share Options                         -                -               - 
       Warrants                           -                -               - 
                            ---------------  ---------------  -------------- 
 Weighted average number 
  of ordinary shares 
  adjusted for the effect 
  of dilution                   449,131,065      281,616,584     333,151,019 
                            ---------------  ---------------  -------------- 
 
 Loss per share (pence) 
    Basic                            (0.13)           (0.13)          (0.29) 
    Diluted                          (0.13)           (0.13)          (0.29) 
                            --------------- 
 
 
   3.         INTANGIBLE ASSETS 
 
                                Software         Customer   Patents   Goodwill     Total 
                                            relationships 
 
                                 GBP'000          GBP'000   GBP'000    GBP'000   GBP'000 
 Cost 
 
 At 31 May 2018                      652              100       142        272     1,166 
 Additions                           106                -        22          -       128 
                         ---------------  ---------------  --------  ---------  -------- 
 At 30 November 
  2018                               758              100       164        272     1,294 
 Additions/(Disposals)               280                -      (10)                  270 
                         ---------------  ---------------  --------  ---------  -------- 
 At 31 May 2019                    1,038              100       154        272     1,564 
 Additions                           301                -         9          -       310 
                         ---------------  ---------------  --------  ---------  -------- 
 At 30 November 
  2019                             1,339              100       163        272     1,874 
                         ---------------  ---------------  --------  ---------  -------- 
 
 Amortisation 
 
 At 31 May 2018                      563              100        77        272     1,012 
 Charge for the 
  period                               -                -         6          -         6 
                         ---------------  ---------------  --------  ---------  -------- 
 As at 30 November 
  2018                               563              100        83        272     1,018 
 Charge for the 
  period                              82                -        14          -        96 
                         ---------------  ---------------  --------  ---------  -------- 
 At 31 May 2019                      645              100        97        272     1,114 
 Charge for the 
  period                               -                -         7          -         7 
                         ---------------  ---------------  --------  ---------  -------- 
 At 30 November 
  2019                               645              100       104        272     1,121 
                         ---------------  ---------------  --------  ---------  -------- 
 
 Net book Value 
 
 At 30 November 
  2019                               694                -        59          -       753 
                         ---------------  ---------------  --------  ---------  -------- 
 At 31 May 2019                      393                -        57          -       450 
                         ---------------  ---------------  --------  ---------  -------- 
 At 30 November 
  2018                               195                -        81          -       276 
                         ---------------  ---------------  --------  ---------  -------- 
 
   4.         AVAILABILITY OF THE INTERIM REPORT 

Copies of the report will be available from the Company's registered office at Health Foundry, Canterbury House, 1 Royal Street, London SE1 7LL and also from the Company's website www.fbk.com.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

IR MZGMZMNFGGZZ

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February 18, 2020 02:00 ET (07:00 GMT)

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