Feedback Regulatory News (FDBK)

14 May 2013

Feedback plc

("Feedback", the "Company" or the "Group")

Disposal of Feedback Data plc

The Company announces that it has today entered into a conditional sale and purchase agreement, subject to Shareholder approval, to dispose of its wholly owned subsidiary Feedback Data plc ("Feedback Data") to Belgravium Technologies plc ("Belgravium"). Completion is expected to take place on 31 May 2013.

Following the disposal of Feedback Instruments Limited and Feedback Inc. in May 2012 Feedback Data has been the Company's only revenue generating operation. After removing the results of Feedback Instruments Limited from the Company's accounts for the year ended 31 May 2012, Feedback Data contributed 91% of the Company's revenues. Consequently, the disposal of Feedback Data (the "Disposal") constitutes a fundamental change of business under Rule 15 of the AIM Rules and is therefore conditional on the approval of Shareholders.

Reasons for the Disposal

Over the last few years the Company has found the markets it has been operating in to be very challenging and despite significant efforts to develop new products, the Company has struggled to compete effectively. In May 2012 the decision was taken to dispose of the Company's loss making education businesses, Feedback Instruments Limited and Feedback Inc. and restructure the remaining business. The disposal of the education businesses has left the Company with significant debts, which are currently secured against the Company's premises. Negotiations to dispose of these premises are on-going with completion expected in 2013. On completion of the property disposal, the Board expect to repay all the Company's outstanding indebtedness.

The Board are now of the opinion that the revenue and profits derived from Feedback Data are not sufficient to fully offset the central costs associated with the Company being on AIM. Notwithstanding the potential injection of capital from the sale of the Company's premises, the Board believe that the Company does not have the necessary capital or the ability to raise further capital to maintain a competitive product offering in the access control and attendance monitoring market. As such, the Disposal represents the best chance for the Company to realise some value for that business for Shareholders.

The Disposal

Pursuant to the Sale and Purchase Agreement between (1) Feedback plc and (2) Belgravium Technologies plc, Belgravium has conditionally agreed to acquire the entire issued share capital of Feedback Data. The Consideration payable by Belgravium for Feedback Data is £600,000 in cash on completion (subject to adjustment on the basis of the cash and debt position of Feedback Data at Completion). The Disposal comprises all of the asset and liabilities of Feedback Data. Feedback Data is being sold on a cash free debt free basis such that a proportion of the consideration will be used to repay the indebtedness of Feedback Data and such that the Company will receive a payment in cash equal to the amount of cash held by Feedback Data at completion of the Disposal.

The proceeds of the Disposal will be used to pay down the Company's debt with the remainder retained for working capital purposes while the Company looks for suitable opportunities in the near future.

Investing Policy

If the Disposal is approved, Feedback will have disposed of all of its trading businesses. In this situation under Rule 15 of the AIM Rules the Company will be reclassified as an Investing Company. Under the AIM Rules Investing Companies are required to adopt an Investing Policy that must be approved by Shareholders.

The Company's proposed Investing Policy is as follows:

The Directors intend to seek to acquire a direct interest in one or more entities in the technology sector. The Company will focus on opportunities in Europe and the UK in particular but will consider possible opportunities anywhere in the world in any sector. In particular the Company will consider ventures that:

·; operate in the software and computer services sector;

·; require little or no funding in excess of the cash resources available to the Company following the Disposal and

·; one whose growth prospects, if achieved, will be earnings enhancing for Shareholders.

The Company may invest by way of purchasing equity, debt, convertible or other instruments in listed or unlisted companies, outright acquisition or by the acquisition of assets, including the intellectual property, of a relevant business, or by entering into partnerships or joint venture arrangements. Such investments may result in the Company acquiring the whole or part of a company (which may be private and/or may be pre-revenue) and such investments may constitute a minority stake in the venture in question although this is not the Board's preferred option. The Company will not have a separate investment manager.

The Company intends to be an active investor but may consider a passive investment depending on the nature of the individual investment. Although the Company intends to be a medium to long-term investor, the Directors will place no minimum or maximum limit on the length of time that any investment may be held.

There will be no limit on the number of investments which the Company may make, and the Company's financial resources may be invested in a number of propositions but the Board's preferred option is that just one investment will be made, which is likely to be deemed to be a reverse takeover pursuant to Rule 14 of the AIM Rules. The Company will carry out an appropriate due diligence exercise on all potential investments and, where appropriate, with professional advisers assisting as required. The Board's principal focus will be on achieving capital growth for Shareholders.

Investments may be in all types of assets class and there will be no investment restrictions on asset classes although the Board's preference will be for debt or equity investments.

The Board between them have the experience of working in and running businesses in a variety of sectors including the technology sector. This combined with the accountancy expertise of one of the members of the board leaves them well placed to assess potential investments.

The Company may require additional funding as investments are made and new opportunities arise. The Directors may offer new ordinary shares by way of consideration for investments as well as cash, thereby helping to preserve the Company's cash resources for working capital. The Company may, in appropriate circumstances, issue debt securities or otherwise borrow money to complete an investment. The Directors do not intend to acquire any cross-holdings in other corporate entities that have an interest in the ordinary shares.

If the Company has not implemented its Investment Policy within one year of becoming an investing company, the Company's ordinary shares will be suspended from trading on AIM and the Board will consult shareholders on whether to continue to be an investing company or return funds to shareholders. If the Company's Investment Policy has still not been implemented 18 months after becoming an investing company the admission to trading on AIM of the Ordinary Shares would be cancelled.

Irrevocable Undertakings

Certain of the Directors and certain other shareholders have irrevocably undertaken to vote in favour of the Resolution to be proposed at the General Meeting, in respect of their beneficial holdings totalling 50,731,161 ordinary shares in aggregate, which represent approximately 38.74 per cent. of the Company's issued ordinary shares.

Notice of a General Meeting

Today, the Company will be posting to Shareholders a Circular and Notice of General Meeting calling a general meeting for 10:00 a.m. on 30 May 2013 at the offices of Sanlam Securities UK Limited, 10 King William Street, London EC4N 7TW.

Nick Shepheard, Executive Chairman, commented:

"Feedback has experienced very difficult trading conditions over recent years, which has resulted in the Company's indebtedness increasing and forced the Company to manage its cash reserves very carefully. The disposal of Feedback Data will clear the Company's bank debt and give the Group the freedom to focus on new opportunities. The Board will begin actively seeking such opportunities from completion of this transaction whilst continuing to push forward with the disposal of the Company's remaining property asset."

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