ACT.L Regulatory News (ACT)

28 May 2015

Actual Experience plc("Actual Experience", "the Company" or "the Group")

Placing to raise £16 million

and

Notice of General Meeting

Actual Experience plc (AIM: ACT), the analytics-as-a-service company, is pleased to announce that it has conditionally raised £16 million (before expenses) by way of a placing of up to 8,263,171 new Ordinary Shares ("New Ordinary Shares") and a minimum of 157,882 existing Ordinary Shares with both new and existing shareholders (the "Placing") at a price of 190 pence per share (the "Placing Price"). The New Ordinary Shares will represent up to 22 per cent. of the Company's issued ordinary share capital immediately following Admission.

The Placing Price of 190p represents the 30 day average share price of the Company up to and including 15 May 2015. N+1 Singer is acting as the Company's bookrunner in relation to the Placing.

The Placing will raise approximately £300,000 for Dave Page and Professor Jonathan Pitts. Furthermore, employees of the Company will be offered the opportunity to sell Ordinary Shares at the Placing Price. These may either be existing Ordinary Shares held by employees or new shares which result from options exercised by employees prior to Admission. The maximum gross proceeds receivable by the Company pursuant to the Placing will be £15.7 million (before expenses), however, to the extent employees take up this opportunity, the proceeds of the Placing paid to the Company and the number of New Ordinary Shares will be reduced accordingly. The Company will issue a further announcement to confirm employee participation levels, the number of New Ordinary Shares to be issued pursuant to the Placing and the resultant enlarged issued share capital prior to Admission.

The Placing is conditional, inter alia, upon the Company obtaining approval from its Shareholders to disapply statutory pre-emption rights and to grant the Board authority to allot the New Ordinary Shares at the General Meeting. A Notice of General Meeting will be set out in the circular to be issued in connection with the Placing (the "Circular"), which is expected to be posted to Shareholders later today. The New Ordinary Shares will, when issued, rank pari passu in all respects with the Existing Ordinary Shares including the right to receive dividends and other distributions declared following Admission.

The Directors intend that the net proceeds of the Placing received by the Company will be used primarily for the following purposes:

· to establish client facing teams in Europe and North America, including channel development and support;

· to increase the size and skill base of the Group's technology development team;

· to strengthen the Group's balance sheet so that it is able to demonstrate to global channel partners that it has the financial resources to engage with them in broadly based multi-year commercial relationships; and

· to fund the Group's working capital requirements for the foreseeable future.

Dave Page, CEO of Actual Experience plc, commented: "The Placing enables the Company to significantly increase its sales teams and further enhance the technology development team as we look to capitalise on our growing pipeline and beyond. We recently announced a new channel customer which in itself has the ability to radically enhance the Company's revenue profile and we are confident that we will be in a position to announce a further significant agreement later this year.

"Our AIM listing has given us the platform to fully commercialise a ground breaking technology from a British University and our shareholders, both existing and new, have given us the funds and support to focus on the enormous market opportunity that exists rather than set us short term targets that would soon prove obsolete. I would like to thank them for their continued support at a particularly exciting time for the Company."

The Circular, extracts of which are set out below, will provide details of, and the background to, the Placing, set out the reasons why the Board believes that the Placing is in the best interests of the Company and its Shareholders and to seek Shareholder approval of the Resolutions at the forthcoming General Meeting, which will be held at 11 a.m. on 15 June 2015 at the offices of Henderson Global Investors, 201 Bishopsgate, London EC2M 3AE. Copies of the Circular will be available to download shortly on the Company's website (www.actual-experience.com).

Enquiries:

About Actual Experience plc

Actual Experience is the market leader in advanced analytics for managing digital business quality. An automatic and continuous analysis of digital products and services makes plain the impact of poor digital quality across the business. Digital business quality is not a destination, it is a journey. Our science-based, data-driven analytics service is designed for those who care passionately about leading that journey to consistent digital quality. To learn more about our passion for digital quality, visit www.actual-experience.com. © Actual Experience plc 2015. Actual Experience® and BbFix® are registered trademarks of Actual Experience plc.

Introduction and summary

The Company announces that it has conditionally raised approximately up to £15.7 million (gross of expenses) by way of a placing of up to 8,263,171 new Ordinary Shares at a price of 190 pence per share. In addition, the Placing will raise approximately £300,000 for the Selling Shareholders. Furthermore, employees of the Company are being offered the opportunity to place existing Ordinary Shares and to be issued Ordinary Shares, arising from option exercises, as part of the Placing. To the extent that employees choose to participate in the Placing, the number of New Ordinary Shares to be issued and the gross proceeds to be received by the Company pursuant to the Placing will be reduced accordingly. The Company will issue a further announcement to confirm employee participation levels, the number of New Ordinary Shares to be issued pursuant to the Placing and the resultant enlarged issued share capital prior to Admission.

The Placing is conditional, inter alia, upon the Company obtaining approval from its Shareholders to disapply statutory pre-emption rights and to grant the Board authority to allot the New Ordinary Shares. The Placing, which has been arranged by N+1 Singer pursuant to the terms of the Placing Agreement, is also conditional upon Admission and has not been underwritten. The Placing proceeds payable to the Company will be used to increase the Group's sales and support capability and strengthen the Group's balance sheet, further details of which are set out below.

On account of their interests in the proposed Placing (Dave Page being a Selling Shareholder and Dr Mark Reilly being an employee of IP2IPO Limited, a prospective placee), neither Dave Page nor Dr Mark Reilly has taken any part in the decision to recommend the proposed Placing to Shareholders.

Background to and reasons for the Placing

History and overview of the technology

The Company was founded in 2009 to commercialise research originally undertaken at Queen Mary, University of London to analyse and evaluate the impact of digital supply chain behaviour on perceived human experience. The Group has developed a proprietary cloud analytics offering, which can provide both historical and real-time analysis to customers to enable them to pinpoint quality issues within their digital supply chain and subsequently improve the digital quality of their product or service, and thus improve their digital brand. This service is called Digital Supply Chain Management ("DSCM").

The DSCM service is delivered in practice by installing a 'Digital User' (for example, at a customer's branch location) to measure the quality of key elements of digital products and services. Digital Users are typically deployed on a small sample of end-user laptops or PCs (currently those operating with the Windows, some Linux, MacOS, and Raspberry Pi platforms, with plans in place to extend deployment to mobile devices). As an example, in a retail banking environment, one or two Digital Users would typically be deployed per branch. Digital Users are not subject to a licence fee, which encourages customers to deploy them wherever they are needed.

Digital Users are used simply to measure digital quality and securely transmit measurement results to the Group's 'Analytics Cloud', which represent the Group's core intellectual property and which the Directors consider is the source of the Group's competitive advantage. The Analytics Cloud is located in secure data centres and runs proprietary, non-trivial, real-time analytics algorithms and correlation techniques to provide the digital supply-chain benefits to customers. Customers are then able to access the results of the DSCM service in three ways:

- through contemporary web browsers;

- via emails for alerting the client of pre-defined events or regular reports; and

- via electronic interfaces between the Group's systems and customer or partner systems.

Pricing model

The Group applies a simple charging structure, whereby clients purchase 'Analytic Capacity' at a level suitable for their business at a specified monthly amount per Analytic (the starting point being £20 per Analytic per month in the UK and $35 per Analytic per month in the US). One Analytic contains the analysis of all components in the digital supply-chain, ranging from the Digital User up to and including a specific element of a digital product or service for a period of one month. For example, 50 Analytics could provide the analysis of a single product or service from 50 locations, or five products or services from ten locations.

Developing our sales channels

The Directors believe that the market for DSCM represents a significant global opportunity. Most of the Group's revenues to date have been achieved through direct sales activities but it is believed that this sizeable international market can only be realistically addressed by putting in place relationships with large channel partners. To this end, the Group have invested considerable resources in nurturing channel opportunities over the last three years.

The Company announced on 18 May 2015 that it had signed a contract with the first of these channel partners. The Group continues to progress its discussions with other potential channel partners along the digital supply chain and, in particular, expects to be in a position to announce the signing of a potentially significant agreement with a leading global technology group before the end of the year.

The Directors believe that, in order to deliver on the potential of these channel relationships, significant investment would be required to build dedicated sales and sales support teams in Europe and North America. These teams will represent a major expansion of the Group's employee base; however the Board consider this necessary in order to capitalise on the opportunities presented by these sales channels.

Investing in our market leading Intellectual Property

The Group has developed the Digital Supply Chain Director service product ("DSCD") to address the requirements of the DSCM market. While discussions with leading technology companies and industry analysts confirm our belief that DSCD is a market leading product, the technical capabilities and features demanded by our target market are rapidly evolving, in particular with regard to trends in corporate adoption of mobile computing platforms. The Directors believe that it is strategically important for the Group to maintain its rate of technological progression and intends to invest in further increasing the size and skill base of the technology development team.

Current trading and prospects

The Group announced its interim results for the six-month period ending 31 March 2015 on 18 May 2015, which showed an increase in revenue of 21 per cent. to £329,238 and a cash balance of £2,008,340. As further noted in the interim results, the Group expanded its customer base and increased direct sales volumes during this period, while continuing to develop its strategically important relationships with global channel partners.

Also on 18 May 2015 the Company announced that it had signed its largest contract to date (the "Global Channel Agreement"), to supply services (through one of the Group's professional services partners (the "PS Partner")) to a major global organisation (the "Global Channel"), which is listed in the top 100 of Forbes' Most Valuable Brands. Given the reputation, scale and global reach of the Global Channel, the Directors believe that the Global Channel Agreement, which is for a period of three years, has the ability over time to radically enhance the Group's revenue profile. Pricing under the contract follows the same basis as that set out under the heading 'Pricing model' above. Each Analytic generated for the Global Channel's customers attracts a fee on a per month basis, starting at $30 per Analytic per month and reducing on a sliding scale where the number of Analytics deployed reaches specified thresholds. Under the arrangement, the PS Partner receives a specified proportion of the revenues received from the Global Channel.

The second half of the Company's fiscal year has started strongly and the Board continues to be pleased and encouraged by the market response to the Group's technology.

Ongoing negotiations with new channel partner

In particular, the Group is currently in advanced negotiations with a leading global services organisation (the "Global Potential Channel") in relation to an agreement whereby the Global Potential Channel would sell the Group's DSCM service to its customers. The Directors expect to be in a position to announce the signing of this potentially significant global agreement (the "Global Potential Channel Agreement") before the end of the year. Once underway, it is proposed that the Global Potential Channel Agreement will involve the Global Potential Channel using the Group's DSCM service in at least one of two ways. First, to improve the efficiency of its digital quality management processes. Second, to resell the Group's DSCM service to its customers. This would involve those customers using the Group's DSCM service to analyse the quality of the digital services they provide (as opposed to merely the services provided to them by the Global Potential Channel).

The Group's revenues under the Global Potential Channel Agreement would follow the same basis as that set out under the heading 'Pricing model' above, in that the Group would receive revenues from the Global Potential Channel based on the number of Analytics consumed by its customers per month.

The Placing

The Company has conditionally raised up to £15.7 million (gross of expenses) through the conditional allotment of the New Ordinary Shares at the Placing Price, which represents a discount of 12.64 per cent. to the closing middle market price of 217.5p per Existing Ordinary Share on 27 May 2015, being the latest Dealing Day prior to this announcement. The New Ordinary Shares will represent up to 22 per cent. of the Company's issued ordinary share capital immediately following Admission.

In addition, the Placing will raise approximately £300,000 for Dave Page and Professor Jonathan Pitts as Selling Shareholders. Further details of the Selling Shareholders' remaining interests in the Company are set out in the paragraph entitled 'Selling Shareholders' below.

Furthermore, employees of the Company will be offered the opportunity to sell Ordinary Shares at the Placing Price. These may either be existing Ordinary Shares held by employees or new shares which result from options exercised by employees prior to Admission. If this takes place, and to the extent employees participate in the Placing, the number of New Ordinary Shares to be issued pursuant to the Placing and the proceeds of the Placing to be paid to the Company will be reduced accordingly. Employee participation in the Placing has been limited to £700,000, and therefore the minimum gross proceeds to the Company from the Placing will be £15 million.

The Placing Agreement

Pursuant to the terms of the Placing Agreement, N+1 Singer has conditionally agreed to use its reasonable endeavours, as agent for the Company, to place the Placing Shares with certain institutional and other investors. The Placing has not been underwritten. The Placing Agreement is conditional upon, inter alia, the Resolutions being duly passed at the General Meeting and Admission becoming effective on or before 8.00 a.m. on 16 June 2015 (or such later time and/or date as the Company and N+1 Singer may agree, but in any event by no later than 8.00 a.m. on 30 June 2015).

Settlement and dealings

Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is expected that Admission will become effective on 16 June 2015.

The New Ordinary Shares will, when issued, rank pari passu in all respects with the Existing Ordinary Shares including the right to receive dividends and other distributions declared following Admission.

Use of proceeds

The Directors intend that the net proceeds of the Placing received by the Company (being approximately up to £15.1 million) will be used by the Group primarily for the following purposes:

- to establish client facing teams in Europe and North America, including channel development and support;

- to increase the size and skill base of the Group's technology development team;

- to strengthen the Group's balance sheet so that it is able to demonstrate to global channel partners that it has the financial resources to engage with them in broadly based multi-year commercial relationships; and

- to fund the Group's working capital requirements for the foreseeable future.

Selling Shareholders

The Selling Shareholders have conditionally agreed to sell an aggregate of 157,882 Existing Ordinary Shares as part of the Placing as follows:

In addition, as referred to above, employees of the Company will be offered the opportunity to sell existing Ordinary Shares and new Ordinary Shares, to be issued pursuant to option exercises, at the Placing Price. If this takes place, the proceeds of the Placing paid to the Company and the number of New Ordinary Shares will be reduced accordingly.

Both Selling Shareholders signed lock-in agreements at the time of the Company's admission to trading on AIM in February 2014, which fell away in February 2015. Since this point, there has been very little opportunity for the Selling Shareholders, being Dave Page, Professor Jonathan Pitts or employee share and option holders, to realise any value in respect of their respective holdings, due to the restriction on dealing during the period of negotiation with the Global Partner on the Global Partner Agreement. Given the lengthy restriction on dealings, as part of the Placing process, Dave Page and Professor Jonathan Pitts are now looking to realise some value in respect of a small proportion of their respective holdings and the Company is looking to enable the selling of a certain portion of employee shareholdings in an orderly fashion.

The Company will issue a further announcement to confirm employee participation levels, the number of New Ordinary Shares to be issued pursuant to the Placing and the resultant enlarged issued share capital prior to Admission.

Related party transaction

The following Shareholders are participating in the Placing as described below:

1 These percentages may be subject to change, to the extent that if employee participation is through the sale of existing shares (rather than the issue of shares pursuant to the exercise of options) then the number of Ordinary Shares in issue following Admission will be reduced accordingly.

The conditional agreements entered into by the Shareholders referred to above to subscribe for Placing Shares are classified as related party transactions for the purposes of the AIM Rules by virtue of such Shareholders being substantial shareholders in the Company. The Independent Directors, having consulted with N+1 Singer, the Company's Nominated Adviser, consider that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.

The General Meeting

A notice convening the General Meeting to be held on Monday 15 June 2015 at the offices of Henderson Global Investors, 201 Bishopsgate, London EC2M 3AE at 11 a.m., at which the Resolutions will be proposed, will accompany the Circular, which will be posted to Shareholders later today.

Irrevocable undertakings

Certain existing Shareholders have irrevocably undertaken to vote in favour, or procure the vote in favour, of the Resolutions in respect of the Existing Ordinary Shares in which they are interested, amounting to 17,885,250 Ordinary Shares in aggregate, representing approximately 62 per cent. of the Existing Ordinary Shares.

Recommendation

The Independent Directors consider the Placing to be in the best interests of the Company and its Shareholders as a whole and accordingly recommend unanimously Shareholders to vote in favour of the Resolutions to be proposed at the General Meeting as they intend to do in respect of their beneficial holdings amounting, in aggregate, to 281,000 Existing Ordinary Shares, representing approximately 1.0 per cent. of the existing issued ordinary share capital of the Company.

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