Interim Results 2016

This announcement contains inside information as stipulated under the Market Abuse Regulation (EU) No 596/2014 (MAR).
20 February 2017

Feedback plc
(“Feedback”, the “Company” or the “Group”)

Interim Report for the six months ended 30 November 2016

Chairman’s Statement

We are pleased to present the interim results for the six months ended 30 November 2016. Revenue for the six months period was £203,000 (2015: £225,000) and the loss after tax was £126,000 (2015: Loss £143,000). The loss before interest, tax and amortisation was £115,000 (2015: Loss £132,000). The cash balance at 30 November 2016 was £63,000 (30 November 2015: £164,000).

As previously announced, we received a significant number of purchase orders for TexRAD research versions during the period, the majority of which were installed shortly before the period end. Accordingly, these sales only made a modest contribution to revenue in the period. We are continuing to install the remaining orders and have received additional new orders from customers in Singapore and Korea. We therefore expect there to be a substantial increase in TexRAD-related revenue in the second half of the current financial year and growth in our revenue for the year as a whole. Cambridge Computed Imaging (“CCI”) again performed steadily during the period.

In November 2015 the Company announced that it had signed a Memorandum of Understanding with Alliance Medical Group (“Alliance”) with the intention of integrating Feedback’s TexRAD texture analysis software into Alliance’s PET-CT lung cancer imaging service. The Company has made good progress on a technical solution that would allow the integration of TexRAD into Alliance’s network of PET/CT scanners in UK hospitals and a prototype version has been demonstrated to potential users. An abstract was accepted by the Radiological Society of North America (RSNA) for presentation at its annual conference in November 2016 which highlighted the results from the technical and clinical evaluation. The next steps include applying for a CE mark for a medical device which provides analysis of lung PET/CT images with added prognostication through TexRAD. We hope to gain the CE mark before the end of the current financial year. Thereafter the plan is to expand our customer base significantly by developing relationships with imaging hardware companies as well as Alliance to ensure wide market access. This will be linked to a changed business model from a one-off access fee to one of pay-per-use.

During the period Feedback announced a large-scale collaboration with Future Processing Sp. z o.o. (“Future Processing”), a software development service provider based in Gliwice, Poland to develop medical imaging software. Feedback’s assistance has resulted in another successful EU grant application made by Future Processing. The directors of Feedback consider that by CCI working jointly with the Future Processing healthcare team, CCI’s product portfolio can be updated and improved and new products developed more rapidly including further applications for TexRAD. The intention is for the Company to agree formal licences for new software products to be brought to market in 2017/18 under a shared revenue arrangement. Under this collaboration with Future Processing, the Company is currently making substantial savings in software development costs although there could be some strategic advantage in re-establishing some UK-based software development capability.

We are encouraged by the continued strong interest shown in TexRAD and the number of research papers being published which highlight its numerous potential applications, particularly in areas such as liver, prostate and adrenal cancers. We are seeing new opportunities in Asia to make further sales of TexRAD research versions by partnering with companies with a strong local presence. In addition to the TexRAD sales, Feedback is well placed to grow its revenues through the collaboration with Future Processing and the development of a CE marked product for analysis of lung PET/CT images. After several years of relying on very limited resources we have plans to invest in product development, regulatory and marketing resource to step up our activity and take full advantage of our very positive growth prospects. We are excited by the developments in our marketplace in machine learning and artificial intelligence applied to medical images. We have extensive experience in machine learning and the prospects of combining TexRAD with other companies’ proprietary technologies could lead to exciting opportunities.

Dr AJ Riddell

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Interim Results 2016