Surface Transforms Regulatory News (SCE)

Surface Transforms plc

("Surface Transforms" or the "Company")

New Technology Transfer Agreement Signed with Major Global

Clutch & Transmission Manufacturer

Surface Transforms (AIM:SCE) is pleased to announce it has signed a non-exclusive agreement worth US$1.0 million in revenue over the next 12 months with a major global manufacturer of clutch and transmission systems. The agreement relates to the transfer of one of Surface Transforms' in-house developed process technologies, a technology which is only one stage of ST's multi-stage production process for carbon-ceramic brake disc components, and includes the sale of specialist equipment and an option to purchase further process technology and equipment worth approximately US$1.5 million. 

A five year licence is included in the agreement, commencing 2018, should they choose to manufacture and sell carbon ceramic components using Surface Transforms' process technology. The global manufacturer will not manufacture or sell carbon ceramic products using the Company's process technology prior to 2018.

This global manufacturer is an existing customer of Surface Transforms and the Company will continue to supply processing to them during 2013.

However, a short-term adverse development for Surface Transforms is that Genii Capital - the 50% owner of Mov'It - has decided to put their share of Mov'It up for sale and is using the German administration process to minimise costs and facilitate the sale. As previously announced on 3 March 2011, Surface Transforms has a significant distribution agreement with Mov'It. Whilst the Company's assets at Mov'It's are safe, the turmoil will reduce short term sales at Surface Transforms.

The Board considers the net effect of both events will be neutral on profits and cash during the current financial year but positive on both during the year ending May 2014; turnover will be lower than market expectations for the current financial year but in line with expectations for the year ending May 2014.

David Bundred, Chairman of Surface Transforms said:

"The Company welcomes the partnership with this global manufacturer of clutch and transmission systems and is looking forward to continuing to work with them. This development confirms the strategy that the Company is amenable to achieving shareholder value through licensing as well as direct sales. The fact that this good news on licensing is partially offset by sales developments at Mov'It is disappointing. However the Company is working with Mov'It to ensure that their temporary problems will soon be resolved."

- Ends -

Enquiries:

Notes to Editors:

www.surface-transform.com

Surface Transforms plc is the UK's leading manufacturer of `next-generation' carbon fibre reinforced ceramic composite materials (CRFCs).It is one of two global manufacturers of carbon ceramic brake discs and the Company's high-performance products are being commercialised with major industry partners, for an expanding range of innovative global applications in automobile brakes, aircraft brakes and rocket components.