Preliminary Results - year ended 31 December 2013

Acta S.p.A.

("Acta" or "the Company")

Preliminary Results for the year ended 31 December 2013

Acta S.p.A, the clean energy products company, today announces its Preliminary Results for the twelve months ended 31 December 2013.

2013 Financial Results

Outlook

Paolo Bert, CEO, reports: "We believe that Acta is rapidly gaining momentum and is on the verge of breakthrough. We look forward to the delivery of significant customer orders during the course of the year."

2013 Commercial Update

Developments since Year End:

Robert Drummond, Chairman, said today:

"As previously reported, the launch of the Acta Power system less than one year ago has been a significant milestone for the Company and has repositioned the business in the eyes of customers and partners.

Acta's electrolyser technology is a unique technology platform that has the potential to accelerate the adoption of fuel cells in back-up power and renewable energy storage applications. The launch of the Acta Power has demonstrated the technical and commercial advantages of our technology and our initial sales of the system are now moving beyond live evaluations and into negotiations for larger application trials. We are also working with a number of major fuel cell manufacturers to collaborate in large project installations, especially in remote and off-grid environments.

At the same time, the pending launch of fuel cell electric vehicles by various major car manufacturers in 2015 has refocused attention again on fuel cells, a trend which has notably benefited the fuel cell sector in the US market. The adoption of fuel cell vehicles will require the installation of a hydrogen refuelling infrastructure on both a centralised and a distributed scale, and we are therefore seeing an increase in the number of enquiries for automotive applications.

Together with ReliOn we have also identified a significant market opportunity for small, off-grid self-recharging fuel cell back-up power systems, and we will be launching this exciting new product at the Hannover Messe in April 2014.

Each of these opportunities represents a different application of our core technology platform, the electrolyser stack, allowing economies of scale and increased production efficiencies as volumes increase. We believe that we will see substantial progress in the adoption of our products in the year ahead."

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Chairman's Statement

I am pleased to present the Preliminary Results for the year ended 31 December 2013 and to provide this statement on Acta's commercial progress.

Overview

During 2013 we have sold electrolysers and Acta Power systems for telecom back-up power applications in Africa, Australia, Taiwan and to two customers in the Philippines; for renewable energy storage applications in the UK and Singapore; and for fuel cell vehicle refuelling in Taiwan. We have increased our distribution channels in India, China, SE Asia and the UK, and we have announced an important technical and commercial cooperation agreement with ReliOn to address the US market and elsewhere.

As a result of these efforts our product revenues have grown significantly and our products have been evaluated by paying customers in live site conditions. This demanding process has demonstrated the validity of our products and has increased the size of the opportunities that we are facing.

In October 2013 we raised £2.1 million from shareholders and we are investing these funds in our technical and customer support team, in product standardisation, and in expanding our production facilities. These investments will allow us to meet the growing demand for onsite hydrogen solutions as the fuel cell sector continues its rapid commercial growth.

Financial Results

2013 revenues of €411,000 were generated entirely from product sales and related other income, and represented an increase of 57% over 2012 revenues of €261,000 (excluding discontinued photovoltaic contract revenues of €175,000 in 2012). Product sales grew by 163% from €151,000 in 2012 to €397,000 in 2013.

Operating costs were reduced by the reversal of share option costs from prior years (€2.4 million), resulting in an operating loss of €1.1 million (2012: €3.1 million loss). Excluding the reversal of share option costs, operating losses rose to €3.5 million as the business returned to full operating levels after the cost containment measures put in place during 2011 to 2012. We expect our cost base to rise further in the current year as we increase our investments in commercial activities, production and customer support.

Grant contributions of €177,000 were recognised during the year (2012: €414,000), against grant cash receipts of €1,022,000 (2012: €353,000). Cash balances at the year end were €2.1 million compared to €178,000 at the end of 2012. Net operating cash outflow was €1.5 million for the year (2012: €2.0 million outflow), while net cash outflow excluding fundraising was €2.8 million, compared to €2.6 million net cash outflow in 2012.

Strategy and Prospects

Our strategy is to focus on applications where fuel cells address large market opportunities, have reached sufficient commercial maturity to deliver cost savings to their customers, and where we can enhance the value proposition through cost effective onsite hydrogen generation.

We targeted the telecoms back-up power market first, and have seen that our success in the off-grid sector has taken us rapidly into opportunities for distributed renewable energy storage.

At the same time, the small footprint and cost effective pricing of our electrolysers have made them attractive for distributed hydrogen refuelling applications, such as that for fuel cell scooters which we are developing with our partner in Taiwan. Also in this area the in-field success of our systems is leading to an increase in requests for small refuelling systems for materials handling (forklift trucks) and small fuel cell car fleets, as a complement to large centralised refuelling stations.

Due to the standardisation achieved across our product range we are able to obtain economies of scale from expanding into these different applications, and this is a further testimony to the value of our unique technology platform. Fuel cell manufacturers are showing increasing interest in the performance capabilities of our products as an enabler of their own sales, and we believe that our products will become the standard component for onsite hydrogen generation as the fuel cell industry grows to mass market volumes.

Robert Drummond

26 March 2014

Chief Executive's Statement

Introduction

The developments of 2013 have demonstrated the core value of our unique technology platform. The take-up of the Acta Power and its success in customer evaluations, and the spin-out opportunities that this has generated, have confirmed that we are positioned to address many substantial commercial opportunities within the hydrogen and fuel cell sectors.

Product Review

Acta Power: Back-Up Power Sector

During 2013 Acta developed and launched the Acta Power, an integrated electrolyser and fuel cell system for back-up power and renewable energy storage applications. To date the Company has shipped five Acta Power systems for evaluation with four major mobile telecommunication companies in Australia, Africa and the Philippines.

The market for back-up power systems in telecom base stations and data centres is viewed as the largest end user fuel cell market, and is estimated to be worth $2 billion. Current systems typically use bottled hydrogen supply, which limits adoption in remote or inaccessible locations, and the trialling of systems which produce their own hydrogen through the reformation of methanol as an alternative to bottled hydrogen shows recognition of the importance of onsite hydrogen generation.

The evaluation process employed by telecommunication companies typically involves a number of stages, including initial set-up and demonstration of the system followed by installation and testing at the premises of the telco's network equipment provider. Subject to the success of these stages the equipment will then be installed on the telco's own network for a live site evaluation, providing real-time back-up power for an operational base station.

In the trials undertaken to date the Company's product has progressed rapidly through the preliminary testing stages, has now successfully completed one live site evaluation, has two further live site evaluations installed and in progress, and has one remaining live site evaluations due to commence shortly. Customers have been impressed with the functionality and reliability of the system, which, due to its onsite hydrogen production capability, offers significant advantages not only over traditional battery or genset solutions, but also over fuel cell systems fed by bottled hydrogen.

The Company's first live site evaluation, which began in the Philippines in early November 2013, has now been successfully concluded with the customer's confirmation that the system has performed to their satisfaction and as specified.

The next stage of adoption in each case is expected to be the inclusion of the Acta Power in the customer's catalogue of approved products, allowing local managers to specify the system for larger projects and installations, and the negotiation of larger network evaluations of the system, which are typically of 50 to 150 units per customer network with up to 50 units in the first call-down. Acta is now engaged in such negotiations with multiple mobile operators, and while this stage of the process is taking longer than had initially been expected, in some cases this is due to the need to approve the product on a global basis, rather than a local country basis.

The Company expects that the initial multiple-unit orders for Acta Power systems will be signed by mid-2014. The Acta Power system has a list price of €30,000 - €75,000 depending on system specification and auxiliary components.

Late in 2013 the Company also obtained CE Certification for the Acta Power, signifying an important step forwards in the commercial readiness of the product.

Acta Power: Renewable Energy Storage

The capability of the Acta Power system to be powered directly by renewable energy sources has given rise to commercial interest in the system as a renewable energy storage device. During 2013 one electrolyser and one Acta Power system have been sold for energy storage evaluation projects, utilising wind power (UK) and solar (Singapore), and these projects will continue in progress during the first half of 2014.

There is significant interest in renewable energy storage applications as a power solution for small off-grid communities and remote locations. The energy storage market, including load control, smart grid and remote communities, is estimated to be worth over $10 billion. The Company is dealing with a number of significant opportunities in this area and will provide further news of progress in due course.

Electrolyser Systems

The sales of the Company's electrolyser systems have grown rapidly against prior years, with increasing levels of repeat orders from the Company's key clients. These sales typically address the back-up power or educational sectors, although interest in the company's product range is also growing from the automotive fuel cell and light electric vehicle sectors.

During 2013 the Company completed the development of a larger electrolyser stack capable of producing 6 m3 / hr of hydrogen, six times the volume of the Company's current largest electrolyser. Two of these stacks will enable the assembly of a 50 kW electrolyser with a production capacity of 24 kg / day of hydrogen. The new stack has now completed its technical evaluation and has been released for production.

The market for onsite generation of hydrogen for industrial and other applications including hydrogen fuelling of fuel cell vehicles is currently estimated to be worth $100 million.

Operational Review

Production

The Company has made significant improvements in its production facilities, processes and volume capacity during 2013, following the opening of new 600 m2 production facilities during the year. Product improvements have been developed to standardise the Company's product range on a modular design in order to streamline production activities. These developments have allowed the Company to shorten customer delivery times and are expected to provide the Company with adequate production capacity to deliver up to 40 Acta Power units per month from the second half of 2014 onwards.

Staff Resources

We continue to build out our team in response to the commercial and technical resource requirements of our growing product business. Personnel increased during 2013 from 33 to 43 heads including contract staff, with the "Production and Logistics" department increasing from 6 to 14 and "Technical Support Services" increasing from 5 to 10, including the reallocation of staff from research activities. We will continue to strengthen these departments, together with sales and sales support, according to requirements as the business develops during 2014.

Grant-Funded Projects and Research Activities

The Group received €1,095,000 in grant funding during 2013, of which €1,022,000 was received in cash (2012: €414,000, of which €353,000 was received in cash), out of which €177,000 was recognised as a reduction of costs during the year (2012: €254,000). Grant-funded activities during the year included work on a European grant-funded project to provide an ammonia-cracking reactor and catalysts for ammonia-fed alkaline fuel cells. The Company is due to receive a further €1.0 million during 2014 to 2015 from current grant-funded projects based on the achievement of project milestones.

No paid research activities were undertaken during the year. However, the world-leading standard of the Company's scientific knowledge base was validated by the publication of a peer-review article about Acta's core electrolyser technology in Angewandte Chemie, one of the world's leading general chemistry journals.

Highlights since Period End

On 13 February 2014 we announced the signing of a commercial and technical cooperation agreement with ReliOn In, one of the largest fuel cell manufacturers in the world specialising in back-up power systems for telecom, government and transportation applications.

Following the signing of this agreement we launched a second version of the Acta Power system, designed for the US market, at the Mobile World Congress in Barcelona on 24-27 February 2014, and Acta and ReliOn will be collaborating for the promotion of this model in the US market and elsewhere during 2014. In addition we have developed, in collaboration with ReliOn, a renewable-powered, self-recharging 200W fuel cell back-up power system, to be launched at Hannover Messe, 7-11 April 2014.

We believe that the rapid development of our relationship with ReliOn gives further commercial and technical validation to the value of our core technology platform.

Outlook

The Company's key activities now range across the back-up power and renewable energy storage sectors together with electrolyser sales into a number of different applications including materials handling and fuel cell vehicle refuelling. We continue to focus on high volume applications with strong economic drivers, and believe that the coming year will see substantial progress in the adoption of our products through our growing network of customers and commercial partners.

We believe that Acta is rapidly gaining momentum and is on the verge of breakthrough. We look forward to the delivery of significant customer orders during the course of the year.

Paolo Bert

26 March 2014

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to preliminary financial results

1. Earnings per Share

The calculation of basic earnings per share is based upon the net loss attributable to the ordinary shareholders of €1,207,121 (2012: €3,134,021) and weighted average number of shares in issue of 145,938,788 (2012: 89,209,777).

2. In view of its accumulated losses and in accordance with Italian law, the Company is not in a position to make payment of a final dividend (2012: £nil).

3. These financial statements are presented in Euros as that is the currency of the primary economic environment in which the Company operates.

4. The annual financial statements are due to be signed by the auditors not less than 15 days before the AGM in accordance with Italian law.

5. Copies of the Company's Annual Report and Accounts will be available from the Company at Via di Lavoria 56/G, 56040 Crespina (PI), Italy. Alternatively this statement and the Annual Report and Accounts will be available to download from the investor relations section on the Company's website at www.actaspa.com.