REG - Actual Experience - Intention to Appoint Administrators & Suspension

Actual ExperienceAnnouncement

07/11/2023 07:00

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RNS Number : 5593S  Actual Experience PLC  07 November 2023

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
EU REGULATION 596/2014 (WHICH FORMS PART OF DOMESTIC UK LAW PURSUANT TO THE
EUROPEAN UNION (WITHDRAWAL) ACT 2018) ("UK MAR")). IN ADDITION, MARKET
SOUNDINGS (AS DEFINED IN UK MAR) WERE TAKEN IN RESPECT OF THE PLACING WITH THE
RESULT THAT CERTAIN PERSONS BECAME AWARE OF INSIDE INFORMATION (AS DEFINED IN
UK MAR), AS PERMITTED BY UK MAR. THIS INSIDE INFORMATION IS SET OUT IN THIS
ANNOUNCEMENT. THEREFORE, THOSE PERSONS THAT RECEIVED INSIDE INFORMATION IN A
MARKET SOUNDING ARE NO LONGER IN POSSESSION OF SUCH INSIDE INFORMATION
RELATING TO THE COMPANY AND ITS SECURITIES.

 

FOR IMMEDIATE RELEASE

 

7 November 2023

 

Actual Experience plc

Company Update, Intention to Appoint Administrators and Suspension of Trading
in Shares

Actual Experience plc (AIM: ACT), the analytics-as-a-service company (the
"Company" and, together with its subsidiary undertakings, the "Group"),
provides the following update regarding its recent trading performance,
financial position, and efforts to raise further funding.

Introduction

The Company disclosed in its unaudited consolidated interim results for the
six months ended 31 March 2023 (the "Interim Results", released on 12 June
2023) that, based on its latest "base case" assessment, and in the absence of
cost reductions or significant commercial progress, the Company was forecast
to run out of cash by December 2023. As part of the Interim Results, the
Company's board of directors (the "Board") also prepared a severe, but
plausible, downside scenario based on significantly more pessimistic sales
forecasts, with corresponding reductions in controllable costs. In this
scenario, the Company was forecast to run out of cash by November 2023.

Current Trading and Financial Position

During the financial year ended 30 September 2022, the Company reduced ongoing
expenses from £680,000 per month to £460,000 and expenses have been
maintained at this level during the financial year ended 30 September 2023
("FY2023"). During FY2023 and subsequently, the Board has been constantly
reviewing the Company's cost profile and organisational structure, however,
the Board also formed the view that the Company had reduced headcount and its
operating cost base to the lowest viable level while still retaining the
ability to deliver commercial objectives regarding order acquisition and
customer support, as well as developing additional required product features.

Although the Company made commercial progress during FY2023, securing new
revenue contracts and significant sales has taken longer than expected and, as
a result, trading has largely tracked the severe, but plausible, downside
scenario announced in the Interim Results. This, along with additional costs
exploring strategic options as outlined below, has resulted in a depletion of
the Company's cash reserves and without new funding, the Company would have
inadequate funds to continue trading after late November 2023.

Strategic Options

The Company also announced in the Interim Results that if it were unable to
secure an appropriate combination of new revenue contracts, cost reductions,
and/or further funding, then the Company may not have sufficient resources to
meet its liquidity requirements over the foreseeable future. As described
above and at the current time, the Company has been unable to secure
significant new revenue contracts or cost reduction and so the Board has been
exploring an equity fundraise to increase the Company's cash reserves and has
been in active discussions with existing and potential shareholders over the
last few months.

On 14 August 2023, the Company submitted a letter to HMRC seeking advanced
assurance under the Income Tax Act 2007 that it is eligible to issue shares to
investors that would benefit from relief from taxation under the enterprise
investment scheme ("EIS") regime, reflecting the Board's view that receiving
advanced assurance from HMRC provided the greatest chance for a successful
equity fundraise. While exploring an equity fundraise, the Company has been in
discussions with various venture capital trust and EIS funds along with other
potential investors. Despite the Company submitting information and replying
promptly to queries, HMRC have not, as at the date of this announcement,
provided a formal response regarding the Company's application within HMRC's
published timescales for responding to applications for advanced assurance.

It is the Board's view that it is now highly uncertain whether any formal
approval regarding its application could be expected from HMRC within the
required timescales, having regard to the Company's rapidly depleting cash
reserves.

Alongside progressing a possible equity fundraise, the Company has explored
other strategic options with the assistance of FRP Advisory Trading Limited
("FRP Advisory"), including an accelerated M&A process to seek an acquirer
of the Group's business and assets, and contingency planning. In relation to
accelerated M&A, FRP Advisory contacted a number of potential acquirers on
the Company's behalf, however received no firm indications of interest in
response. The Board therefore terminated this process due to the lack of
interest and the significant ongoing costs involved.

Having considered the Company's rapidly depleting cash position and the lack
of progress regarding an equity fundraise and the other strategic options
explored, it is the Board's view that it is unlikely to be able to secure the
funding that it requires or complete an alternative transaction in a timely
manner to secure the Company's future and so is now taking action to protect
value for the Company's creditors and other stakeholders.

The Board has therefore regrettably resolved to file a notice to appoint
administrators to the Company with such appointment expected to take effect
later today.

Resignation of nominated adviser and joint brokers

As a result of the Company's intention to appoint administrators, Singer
Capital Markets Advisory LLP and Turner Pope Investments (TPI) Ltd have
informed the Company of their resignations as nominated adviser and joint
broker and joint broker to Actual Experience plc respectively, effective
immediately on the release of this announcement. Pursuant to AIM Rule 1, if a
replacement nominated adviser is not appointed within one month of today's
date, the admission of the Ordinary Shares to trading on AIM will be
cancelled. The Company has no current intention of appointing a replacement
nominated adviser.

In light of the above, the Board announces that it has requested a suspension
of trading in the Company's ordinary shares on AIM with effect from 07.30 a.m.
today.

Further announcements will be made in due course.

Enquiries:

 

 Actual Experience plc                            Tel: +44 (0)207 129 1474

 Iain McCready, CEO

 Steve Bennetts, CFO
 Singer Capital Markets Advisory LLP              Tel: +44 (0)207 496 3000

 Shaun Dobson

 James Fischer
 Turner Pope Investments (TPI) Ltd                Tel: + 44 (0)203 657 0050

 James Pope

 Andy Thacker
 Flagstaff Strategic and Investor Communications  Tel: +44 (0)207 129 1474

 Tim Thompson                                     actual@flagstaffcomms.com

 Mark Edwards

 Andrea Seymour

 Anna Probert

 

The person responsible for arranging release of this announcement on behalf of
the Company is Steve Bennetts, Chief Financial Officer.

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