Feedback plc (FDBK) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Feedback plc investor presentation. [Operator Instructions] Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Tom Oakley, CEO. Good afternoon.

Thanks very much. Hello to everyone who's attending. Unfortunately, we can't see your faces. So please bear with us, but we look forward to receiving your questions. For those of you who aren't familiar, I'm Dr. Tom Oakley. I'm the radiologist by clinical background and the Chief Executive of Feedback. I'll just let Anesh, our Chief Financial Officer, introduce himself quickly, and then we'll roll through the deck.

Good afternoon all, Anesh Patel, CFO, and joined feedback approximately 2 years ago, and looking forward to taking you through the H1 results today with Tom and providing a general update.

Great. Okay. So just to go through the presentation, just starting with a brief overview of the company. I'm sure that most of you are familiar with us, but for those of you who aren't, Feedback Medical and the Feedback plc is the owning company are really specialists in the medical software and technology space. And unlike many manufacturers of software in healthcare, we are actually a fully certified medical device and we come at the medical software very much with a lens of quality and regulatory compliance, which gives us a very unique position in the market. Historically, the company is over 20 years old now and originated as a PACS company. PACS stands for picture archiving and communication system. And it's a bit of a mouthful, but really, it's a digital library of radiology images, and it's how hospitals store or traditionally stored all of their medical imaging studies. That gave us a great platform and a base technology from which to launch into a completely new strategy focused very much on providing clinical data to frontline clinical teams. And our focus since I took over as Chief Executive in 2019 has very much been focused on how we can meet the needs of the broader frontline clinical workforce. And as we go through the deck, you'll see some of our technology. I'll try to highlight the key features of that and really what sets us apart in the market, not just from within our products, but also our positioning. Underneath our technology, we also have a unique cloud infrastructure called CareLocker which in the period that we're going to discuss has also become a patient-facing application directly offering our services to consumers initially in India, but we have a view also to opening that up in other markets. Because of the breadth of our technology and the sort of consumer groups that we are really focused on, we actually have a very large addressable market, over GBP 10 billion in total if you look at both the domestic NHS market and some of our international opportunities. And just quickly, we'll go into it in a bit more detail in a second. At the top level, we've had a very good period, so H1 2023, we've actually seen revenues increase up 222% on the previous period, and that's been driven by quite a wise quite a large increase in sales up 149% on the period as well. And we retain a very strong cash position, having raised money in the prior period. And we closed the period at GBP 9.2 million of cash, which is more than sufficient to meet our short- and mid-term needs as a company. And so we consider ourselves to be well capitalized to meet the opportunities that we see coming down the road at us. Just to give a sort of top-level view of the operational highlights for the period. This period saw the conversion of one of our long-term pilot sites to a paying customer this was within Sussex ICS with Queen Victoria Hospital. And the contract was for GBP 450,000 for a 12-month extension to the program we've been delivering there. and that was to cover the period from March of last year to March of this year. And some of the shareholders will have already seen that actually Sussex have now come out with procurement tender for the renewal of this contract on a 2-year with a couple of year extension options as well. And we will be, of course, bidding for that. During the period, we also became a supplier on the very prestigious G-Cloud 13 framework. And this actually was in large part due to the work we did in Sussex and being able to evidence the value of the product and the capabilities and also because of our ongoing maintenance of all of our regulatory certifications and quality certifications. As I briefly mentioned just now as well, we also opened CareLocker, our cloud application and repurposed it as a consumer-facing application in India and we'll spend a bit of time talking about that later on in the presentation. And the last thing to highlight really during the period was that we undertook a share consolidation of a -- 201 share consolidation which is why you may have seen a step change in the share price. It's not just on the basis of good news. It is actually also partly because of its consolidation. And actually, if I let you run through the highlights and then I'll take back over.

Sure. Thanks, Tom. So on this slide, we have the financial highlights for H1, which is a 6-month period ended 30th of November. Revenue is up 222% versus the prior period to GBP 0.58 million. And of course, this is almost in line with the latest full year results for FY '22. The revenue growth reflects the significant increase in average contract value for Bleepa-CareLocker compared to our legs products and Bleepa-CareLocker now comprises 73% of revenue. In addition, we did benefit in H1 of GBP 0.19 million of revenue from the Sussex ICS contract which relates to the 5-month period prior to contract signing. The contract was signed in September in 2022, but it covers the 12-month period, start first of April 2022. So there was a one-off 5-month revenue recognition in H1. As Thomas mentioned, Sussex has now launched its formal procurement process for a long-term CDC solution post expiry our contract in April. And we will, of course, be tendering for that and that's worth GBP 1.6 million over a 2-year period. In terms of sales, we increased our sales versus the prior period 149% to GBP 0.61 million. And on this Bleepa-CareLocker contributed around 77% or GBP 0.47 million. The balance was split roughly equally between legacy products, Texrad and Cadran and imaging, engineering royalty fees for x-ray image capture technology. And just to add that sales is different revenue. It's non-IFRS and essentially, it represents the total value of customer contract wins in a given period, ignoring any deferred income adjustments that are required for revenue recognition purposes. And going forward in the future, as we learn more contracts, and we have more certainty on 12 months renewals, we will replace this metric with ARR going forward. Adjusted EBITDA loss years EBITDA less share-based payments, the adjusted EBITDA loss widened 19% to GBP 1.2 million in H1. The increase in revenue was offset by higher OpEx as planned, in particular, staff-related costs. Our headcount has increased to around 29 full-time employees versus 18 just before the fund raise. And of course, part of importance on the raise were intended to increase our head count in order to exploit the opportunities that we see in front of us. And also increase in sales and marketing expenses was another driver for the higher OpEx and the slightly increased adjusted EBITDA loss. Cash, as Tom mentioned, was GBP 9.3 million. We have a strong balance sheet and sufficient capital for the near term. In terms of cash flow, our cash outflow prefinancing in H1 reduced 16% to GBP 1.08 million. And that's an improvement on the prior period of GBP 1.29 million cash outflow prefinancing. And that's due to higher customer receipts, higher tax credit, R&D tax credit and some favorable working capital movements. And these are the key financial highlights for H1. Tom, putting over to you.

Great. Thanks, Anesh. So just to give a very top line view of the products. We'll spend a little bit of time on this in the coming slides. So -- we have 3 core products that all leverage essentially the same core base technology around medical device image viewing and also a good display of the clinical results data. So Bleepa is our clinician-facing user interface, this allows clinical collaboration around individual patient cases with a fully certified view of all of those patients imaging and other diagnostic results. CareLocker is simply a very similar product, but it is it is essentially a skinned down version of Bleepa doesn't include the clinical that interface. It allows a patient to be able to see their own diagnostic results and then also to be able to share those with a collection of their choosing. And then BleepaBox. This was something that we developed for our veterinary and TV screen programs. And this is all about being able to send radiology images over mobile networks, 3G or higher straight up to the cloud so that they can be available via Bleepa both for review while you're with the patient, but then also for collaboration with specialists who could be located anywhere in the world. So just to focus in on Bleepa, services, again, our sort of clinician-facing chat platform. This is where clinicians can collaborate around individual cases. you could describe Bleepa at a very superficial level with a clinical grade version of WhatsApp that displays CTs, MRIs and ultrasounds. But actually, it's considerably more than that. We have various features within the applications such as photo capture that allow us to capture images of patients for wound assessment. We also have the ability for you to get a digital copy of any facts or printed referral letters so that you can create a digital copy that becomes part of a record. We have in-built consent modules that allow you to consent patients for various procedures and for photos and that actually is a core part of the orderable record that we're creating within Bleepa. And Bleepa provides an end-to-end order to [ oral ] care environment, the discussion that you're having as a clinical team is actually the note for the patient. So this saves clinicians a lot of time, not only because it's very easy for them to refer patients between each other, but also because the discussion is the clinical documentation. They don't have to separately go and document something in an electronic record or in a paper-based record system. Bleepa is a fully regulated and certified medical device, and this is because we are showing clinical images at a diagnostic course. And that is a legal requirement within America, within the U.K. and within Europe and increasingly in other territories internationally. The entire product is manufactured according to a quality management system called ISO 13485. And we also hold accreditation with ISO 27001, which relates to the security of data and the processing of data within the application. And lastly, we also hold Cyber Essential Plus certification which is a security qualification whereby external entities undertake independent penetration testing of the system. So we're very confident in the security of the application. And this is probably one of the first times actually we presented CareLocker to all of you. So it's worth spending a little bit of time on this. So when we originally created CareLocker, CareLocker was actually an underlying cloud architecture for Bleepa. So it was a cloud environment that essentially was more like a bubble bath than a cloud where every patient had their own bubble, and it was a way of creating a very secure data storage environment for individual patients. What that enabled us to do, particularly in India was in to offer access to that cloud environment directly to the patient. And so we did this by essentially reskinning Bleepa removing the track component and providing a slightly new color pallet. You'll see this is purple rather than the traditional Bleepa colors. And it allows a patient to have digital access to all of the radiology studies and other investigations, including any structured reports that are generated, but also the ability to then share that digital package with a clinician that they're choosing. And in India, this has opened up a very sizable opportunity for us. We have diagnostic imaging centers, which we'll spend a bit of time going through in a couple of slides. Again, just to give you the top-level view, these are some of our regulatory and quality accreditations, which I just mentioned. The really important one to highlight here is that because of these credentials, we have been able to subscribe to the G-cloud procurement framework in the U.K. G-Cloud 13 is a procurement framework that allows individual organizations to directly award contracts to us as a company, and it smooths that process of procurement and contract negotiation. So just spending a little bit of time looking at our existing customer base and some of the growth in development in those over the last year and certainly over the preceding period. So looking first at [ Robart ] Hospital in Redding. Robart are using Bleepa predominantly for the photo capture feature. So this is allowing to capture images of wounds and [ ablations ], as patients come into the A&E department and then be able to securely share those and store those with other clinical team members. And we've got a quote here actually from one of the consultants in A&E just showing the sort of nature of the impact that having access to this product is delivering for them. And it's really about having that 24 access -- 24-hour access to secure photo capture environment. We currently rolled out across 365 clinicians and referring photos to up to 3 specialties. We're about to implement a huge expansion at RBH, really based on the ability to give clinicians access to Bleepa on their mobile phones and devices. So we're hoping that the number of specialties will soon greatly expand. They are one of our longer-term customers having renewed twice with us, and we're looking forward to renewing them again this year. Northern Care Alliance was one of the first sites to adopt Bleepa was just in the run-up to COVID. And as one of our most established sites, this is where we have 1 of our bigger clinical user bases. So we have up to 900 clinicians here across multiple hospitals and across multiple specialties within those hospitals. And they are using bleep predominantly for referring patients and managing that flow of patients between different specialty teams. We found through their own independent benefits analysis that we are saving on average 36.3 weeks of clinical time a year and that we have reduced the amount of time it takes for referrals from 2.1 days to an average 0.4 days. And what that means is that we're getting patients through the hospital faster. And for anyone who's following the news at the minute, this is a key pressure on the NHS. How do you get specialist advice and guidance on to a particular patient journey how do you get patients through that hospital environment more quickly. And this is the area that we are specializing in and focusing on. And then to look at where we see the NHS opportunity going, we're looking now at how we can deliver services across provider settings using that common view of a patient that we generate in Bleepa and the ability to then build a team around that common view. That means that we can have a stakeholder who is in one care setting and another care setting completely geographically removed from that, all looking at the same patient. And in the context of NHS, what we have delivered is the U.K.'s first symptom-based care pathway connecting a patient from primary care whether it's in GP through a community diagnostic center where they've had a series of diagnostic investigations and then having those diagnostic investigations reviewed by a team of specialists in secondary care. So this is a breathlessness pathway where a patient has arrived to CGP out of breath, they're being referred to a community diagnostic center where they've had an X-ray and ECG, some spirometry and some baseline bloods. We've brought all of that diagnostic data together in Bleepa into one place. And then we presented that diagnostic view to a respiratory consultant, a cardiologist and an [indiscernible] consultant at Queen Victoria Hospital who together come up with a management plan for the patient completely remotely through our instant messaging interface in collaboration with the GP. And where this has created quite a lot of impact is that as a result of this, we were able to get patients through a diagnostic pathway in a considerably shorter period of time than the current national targets. So there's a national target that you should be able to get a diagnostic investigation within 6 weeks of a referral from a GP. Well, the early data from our investigations have shown that actually, we are on average getting patients through in 35 days or less, and that's for a completely managed end-to-end service. So not just for the diagnostic investigation but also for the management plan. And as a result of that, we are very confident that delivering a community diagnostic center using this infrastructure will allow you to really reduce the elective care backlog within your locality. One of our long-term pictures to the NHS has always been that if you just have a community diagnostic center, you'll generate a lot of diagnostic data that doesn't really do anything for the patient unless you can take those diagnostic results, put them under the nose of the clinical decision makers, you won't actually get any faster decisions, and it's those decisions that will move the patient up through care pathway and get the elective backlog down. So leveraging this pilot, we've been able to engage with a number of potentially interested sites, both at a regional and a local level, and we look forward to being able to talk further about that in due course. This is an area that's receiving a lot of political pressure and a lot of central funding, it's one of Rishi Sunak 5 pledges was to reduce elective care backlog. The community's diagnostic centers are really viewing the initiative going that is going to have any chance of doing that. And as we've just described, community diagnostic centers on their own won't have an impact on the backlog, unless those results are integrated within a care pathway. And ours is the only platform that's doing that. So we're in a really good position as we come towards that sort of NHS financial year-end at the end of March. And to give you an idea of the scale of the opportunity in the CDC space, we're looking nationally at about 160 community diagnostic centers being launched. These are all at various stages of deployment up to GBP 10 billion has been put into this initiative from the government. And that funding has been repledged by Rishi Sunak as one of these key priority areas. Now luckily for us, we are not dependent on those centers being fully established before we can demonstrate an impact. We can actually help a hospital to use the existing scanners and existing diagnostic facilities they have today in a more effective way and to also use the existing staff that they have in a more effective way. And as a result of that, we should be able to see some contract progress in the NHS long before these new centers are built and established. And again, we'll update as soon as we've got progress on that to talk about. Just touching then on India. So the near-term opportunity that we've seen in India is really for our product are CareLocker. I'll come to Bleepa in a second because we initiated our foray into India with Bleepa. But actually, I think we've realized that the near-term opportunity is CareLocker and that's predominantly because CareLocker is not considered a medical device. And it means that we can sell it immediately within the Indian market. And so we've set up a pilot of CareLocker with an imaging center in Sampurna -- in Indo called Sampurna. And what this enables is today, if you were to go to an Indian imaging center, you would have to either receive a film print of your x-ray or you'd have a CD burn, and that's how you would get a copy of your data. That means you have to attend once to have a scan, and then you have to go back a couple of hours later to pick up your film or CD. With CareLocker, you only have to attend once and then you will digitally receive a copy of your imaging and results. So it saves you as a patient second trip, but it also means that the actual imaging center is saving money every time a patient comes through because they're not having to generate a film or a CD. And as a result of this, the imaging centers are promoting CareLocker to their own customer base and encouraging them to take the digital version which greatly reduces our cost of acquiring customers because the indirect sale was led by the imaging center themselves. We have already started to see some sales of CareLocker to clients going through Sampurna. We haven't yet been in a position to actually recover the invoice from that, from Sampurna because we've been setting up an Indian subsidiary to allow us to do that. And perhaps once we come to the question, Anesh might be able to add a bit of information on that. But it means that we are actually beginning to see early evidence that our value proposition is realized by the customer. And we are already seeing interest from other diagnostic imaging centers within Sampurna within indoor and then also some of the larger cities in India that are very interested to see how we can expand this. So I think this is quite an exciting space and the scale of it is truly enormous. Within each locality even within a city like Indore, there are 40 imaging centers. If you go to one of the larger cities like Mumbai, there are hundreds of imaging centers, all of whom have the same requirements and the same value proposition from our products. And to touch on Bleepa and TB screening. So we've been running a TB screening pilots in partnership with Amazon Web Services and Qure.ai for over a year now. And we've been generating a very good quality of clinical evidence, really to show that not only does arbiter technology work, which was relatively easy to demonstrate, but also that by giving digital copies of imaging to an AI tool, we're able to greatly improve the performance of that AI tool and get a high-quality result. Now what we have been looking to do is how we then subsequently commercialized that within India. And the difficulty that has been encountered is because Bleepa is a medical device. We actually have to certify that within India. And that means we have 2 options, we either have to license Bleepa to a wholesaler in India who can then undergo for medical device certification and resell it for us. However, that means that we have to hand over our technical file information and that would put our IP at risk. So instead, what the Board has elected to do is to set up an Indian subsidiary company that will itself register as a medical device manufacturer, which means that we will be able to retain our IP and then also be able to sell the product directly with the Indian market. The Indian subsidiary has now been incorporated. We're just in the final stages of getting the accounts associated with the company. And then we will be in a position to actually register Bleepa as a medical device, and we anticipate that, that will take between 6 to 9 months. Now that means that we won't be able to sell Bleepa until the medical device certification is completed, but in the meantime, we can continue the commercial discussions that we've been launching for TB screening and Bleepa more broadly so that when the medical device certification is complete, we're in a position to have contracts lined up. And so the TB selling opportunity is of interest both to state-level governments but also some large NGOs, we've indicated previously that we are forming our sort of consortium bid around this where we've partnered with both AWS and Qure.ai. But we're also in discussions with some large telco providers within India, who will be able to provide that network connectivity to allow us to push imaging up to the cloud from those remote locations. Remember, of course, we need a 3G connection or higher in order to be able to push that imaging, and that's where the telco comes in. And then we are also seeing opportunities directly for Bleepa with individual hospitals and then also at a more regional level with state-level governments as a way of connecting government facilities. And all of those conversations are underway but can't unfortunately be realized until a medical device certification is completed. And then the last thing to really highlight to everyone is our licensing agreement for some of our legacy technology with a U.S. partner called Imaging Engineering. Imaging Engineering are essentially updating old technology and old type of x-ray called fluoroscopy, which typically runs a sort of analog imaging. They are coming to the end of their natural life span. They usually last about 20 years, and they're all coming up to that. And so as a result, they want to -- individual hospitals will have to either buy new equipment with a digital basis or they will have to update and renew their existing kit and convert them to digital imaging methods. Now Imaging Engineering are experts in upgrading these systems to a digital architecture. And as part of that, they license our software. They have a sales pipeline to about 2,000 sites across the United States. And we have been looking forward to receiving some of the royalty payments for the licensing of our technology. And unfortunately, that was partly delayed because of COVID-19 because they couldn't physically get into the hospitals to upgrade these sites. Now that that is passed, we've actually seen an uplift in licensing revenue and as demonstrated here, GBP 0.7 million generated within the period, which was up from GBP 0.2 million in the prior period. And we are expecting to see ongoing growth of that and this is just a pure licensing revenue opportunity for us. We don't have any associated support or other costs. So it's pretty much pure profit for us, and so quite a nice revenue stream. And then just to touch on outlook before we stop for questions. I think the near-term focus remains very much on the community diagnostics space here in the U.K. This is where the government is focusing a lot of its time and energy and also a lot of its funding. We are expecting to see some contract progress on that, both within our existing customer base, but then also potentially bringing in some new customers, and we'll report on that accordingly. And then similarly, in India, while we go through the process of registering Bleepa as a certified medical device in India and setting up that subsidiary. We will continue to drive the growth and adoption of CareLocker with imaging centers, both within Indore and some of the other larger cities that we're already getting interest from. And so we should be able to see some revenue generation from India in the near term long before the full subsidiary and registered device is completed. And at that point, I think we'll stop and take questions.

[Operator Instructions] While the company take a few moments to review those questions submitted today, I'd like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A can be accessed by our investor dashboard. Tom, Anesh. As you can see, we have received a number of questions throughout today's presentation, and thank you to all the investors for submitting their questions. Could I please just ask you to read out the questions and give responses where it's appropriate to do so, and I'll pick up from you at the end.

Anesh, do you want to pick a question.

Yes. So in terms of financial questions, when do you expect revenues to commence from Indian operations? I think, actually, we've just spoken to that. But in the near term, we expect to see some modest revenues from Sampurna for CareLocker, which is the B2C proposition. I think the larger engine revenues from Bleepa will obviously be further down the line, and we can really generate those once we've got the Bleepa medical device registration in India, and that will take 6 to 9 months. But certainly, in the near term, we expect to see some modest revenues from CareLocker and from imaging centers. And we are also in active conversations with other imaging centers to roll out the solution and there as well, so yes, in summary, in the near term.

I've just taken the one underneath Anesh, there's -- the question is, do you see competition being able to achieve your currently unique proposition and in the near future, what is your moat? So the answer to that question is, we have competitors that do components of what we do, but no one who does the complete end-to-end solution and no one who does that within a medical device regulatory wrapper. So if I give you some examples, there are other providers who have a chat-based messaging interface but they don't display diagnostic results and they certainly don't show the diagnostic imaging and hold a UKCA mark for that purpose. There are other providers that do data aggregation and integrate to multiple sites and then try to present that data. But again, they don't then have the chat capabilities or the pathway features of Bleepa. So there's no one really who can act as that digital glue that connects all the provider settings in the way that we do and in the way that is needed for those CDC results to actually have an impact on the pathway. So I think our position is quite unique. For someone to deliver what we do, they would have to develop that full suite of capabilities and then certify and go through all the medical device accreditation. So is quite a high barrier of entry for someone to do that, I think.

There's another question here. What is happening with your contract with Imaging Engineering in America. So that's ticking along nicely. We have minimum royalty royalties of June. And we are anticipating that to at least received the mid-term royalties, which is around $60,000 to $65,000 per year. We do see some upside potential to that. And we're also discussing with Imaging Engineering and potential add-ons to the license agreement and looking at potentially further monetizing existing IP that we have. All of that is at quite an early stage. So in short, the imaging engineering contract continues to pay in this royalties of around $65,000 per year.

There's another question come in here and saying, Tom mentioned an average contract per CDC on proactive of GBP 400,000, is that per annum? Yes, it is. So the -- it actually should be slightly higher than that based on the average CDC that we're expecting. And broadly speaking, our CDC pricing, and we can disclose some of it because it's on the G-Cloud public procurement framework. There's an installation fee per GP practice per hospital, and then it's an annualized license based on patient throughput. So for an average size CDC, we expect that to be in the order of GBP 600,000 per annum. And obviously, per region, there are multiple CDC. So per ICS integrated care system where you could be looking at 4 or 5 CDCs within that sort of footprint. And clearly, there's a -- nationally, there are going to be in the order of 160 CDCs. So it's quite a sizable opportunity. One thing to mention on that is that the pricing very much also depends on whether we are providing the hosting for that clinical service or whether the NHS partner wants to provide their own hosting. And we're seeing a bit of a divide on that. Some areas are very happy for us to host the data. Others want to host the data themselves. The Cloud hosting is a relatively large part of the contract size, but a very small part of our margin. So for our perspective, it doesn't really matter whether we are going to host or not. If we are not hosting, we'll just provide the software under license and that was the high-margin part of the opportunity. But it will have an impact on the sort of gross value of the contract. So if you do see when the contracts begin to come through, if you see some for GBP 800,000 and some for GBP 400,000, the difference will be whether they're cloud-hosted or not, but we'll try to make an effort to make sure that the market is informed of which one is a cloud-hosted and which ones are not just so that people are broadly aware. But we are aiming for an average contract value of [ GBP 600,000 ] per year per CDC.

Yes. I think a related question is, did the QVH tender not close yesterday. Why haven't you already tendered? So the QVH tender hasn't yet closed, and we will definitely, definitely be tendering. The deadline is actually the first of March, if I'm not mistaken. And with the preferred bidder to be announced middle of the month, middle of March, and then the contract commences first of April. So absolutely, we are -- we will be tendering them sort of a few weeks left until the deadline.

Okay. So that's pretty much the same question we just had, we submitted what's happening.

So there's a question here. We can see income ratcheting up, how will costs ratchet up? I think when it comes to future sales, future revenues and pricing models, we try and price our proposals at a target gross margin of at least 80% to plus 80% to 85%. And within that, we assume costs for operational staff, mainly the support team and customer success as well as cloud costs. So part of that is those costs are built into the kind of the gross margin and when it comes to pricing. In terms of the fixed operating cost base, yes, there will be, of course, naturally some increase in the fixed operating cost base as I think ship. But certainly, we may see more than a doubling of -- we will see more than a doubling of revenue, but we certainly don't see a doubling of OpEx. It will increase at much lower rates.

I've got a question just come from now. Is it feasible for a CDC to use an imaging solution, which is not UKCA-certified as a medical device? No. At the moment, you want to show an image of a patient for a diagnostic purpose and diagnostic purpose under the MHRA guidance constitutes anything that would impact patient care. You have to be displaying that image within a UKCA mark's devices. So I suppose if you were to run a CDC that had no medical imaging at all and that would include not having any photos, so no images of wounds, lesions or moles, no radiology at all then possibly, but so much of the diagnostic workflow is dependent on medical imaging. In fact, I can't even think of the scenario where you go to hospital and not have an x-ray or an ultrasound and certainly in a community space, almost all of the patients are getting [indiscernible] x-rays as part of those standard pathways. So the moment you have an image you have to be using a UKCA product and Bleepa is the only one. So no, I think we're really confident in our position. There are a number of non-CDC NHS tenders, are we involved with any of these EG, Southwest region? Yes, we very much are. So we are tendering for any and every opportunity that we think is relevant to the technology. We are continuing to engage with individual NHS Trust for the sort of core purposes of Bleepa [indiscernible] inpatient management, just as with the Northern Care Alliance and RBH, and we are seeing some tenders coming through for those. But for the amount of effort required around tendering for an opportunity and for driving sales, it is much better for us to win a CDC client than it is an individual trust, but we are definitely looking at both. But certainly, in the near term, our focus is very much on the CDC space because that's where we see the opportunity. There will be about 160 CDCs nationally, does feedback have a staff and resources to tender for all of these. Yes is the short answer is certainly in terms of tendering for them, although I'm sure my team will disagree with me when I said it, but yes, we do. And in terms of then deploying it, it really depends on the pace of contracting and the rollout. And we have been working in the background to identify go-to-market partners both within the OEM space and then also within the consulting space. And we are in discussions with both OEMs and some of the big 4 consultancies around how we would scale to do a national rollout if such headwind came our way.

Just to add to that point, I suppose there are going to be 160 CDCs. Clearly, we're not there yet. But also we're seeing a move to more regional contracts with multiple CDCs. So we'd have to tender obviously. And we're hoping to tender more so on a regional basis than on the individual CDC [indiscernible].

Another question is come to the top of my list. Can there be any advantage established to Feedback hosting versus CDC hosting? If -- And I would say this, but it is true, we would do a better job at hosting it. It will be more secure and more cost effective if it's hosted on CareLocker. Part of the rationale for CareLocker is because it's more of a bubble but in a cloud with every patient having their own bubble. Those patients that are not active in a care pathway do not need to be on high CPU cloud. So this is the expensive type of cloud that uses quite a lot of energy. We can instead store them on a different type of cloud called Glacial Cloud, which uses a lot less energy and a lot less processing power. And so as a result, on a population basis, we can provide the cloud environment that is operating at a considerable lower cost base and energy consumption. So it's not just a matter of security, it's also a matter of cost and obviously, hitting some of those green credentials that the NHS organizations need to evidence. That said, I think even within the NHS, there's still quite a lot of nervousness about cloud generally and a lot of sites are not really set up to engage with cloud providers. I think that's changing. And as it does change, I think we will see more interest in cloud hosting and outsourcing that to us and I still think that is the best option for them. But I think that nervousness sometimes remains. And so we have to be able to provide both on-prem cloud hosted by them and cloud hosted by us, and we're able to do all of those options. That's the same question. Are you frustrated at the speed of progress and do you see that speeding up that not your fault, by the way, you were doing great. Well, thank you, nice of you to say. I'm always impatient and always wanting to be going faster than they are. So Anesh should tell you I'm perpetually in the state of frustration. But that said, I think the company has done very well during the period. I think we've positioned our products extremely well. And certainly, with the political pressures that we're seeing at the minute and the funding we certainly believe we are in the right place at the right time with the right product and certainly the conversations of having it at the minute and the tenders that we're seeing coming through, I think we should be there at the right place, and we should be seeing good news coming our way. We've always made a point of balancing the expansion and the spending of cash linking that to opportunities. And as a result, we've maintained a very strong cash position and a good closing cash balance and period. When we think that the right moment is there, and we see the contracts coming through in a defined way we will scale to meet those opportunities. But as I think I've mentioned before, typically, particularly in the NHS, the way that they contracted in annualized contracts paid upfront, so a lot of the cash needs for expansion will actually be met by the award of these contracts themselves. So we should be appropriately capitalized to meet the expansion needs that we see. I don't know if you've got anything further to add on that, but.

No, nothing. I think that's absolutely right. I mean we do benefit, of course, from annual payments upfront. And what we tend to see is that usage of a contract is not there until you're a few months down the line. So our costs start to immediately start increasing and delivering the contract immediately, which also helps.