MicroFuze International Plc completes deal with MFA

    14 January 2008

                                           AIM Announcement

MicroFuze International Plc completes strategic review of Microwave activities and completes deal with
                                                  MFA

Key points:

MFZ completes an agreement with ATC to fund the commercialization of the technology in exchange for
equity in MFA
MFA takes delivery of the first commercial microwave applicator
MFZ retains an equity position and board representation in MFA
MFZ will convene an EGM in February to confirm a change of name to Watermark Global plc


New Arrangements with ATC

Over recent months Microfuze International plc ("MFZ" or the "Company") has been extremely active in
approaching a significant range of parties in the USA and UK with a view to seeking either additional
investment in MFZ or its 85 per cent. subsidiary Microfuze Americas Inc. ("MFA") for the purposes of
funding the broad commercial rollout of the microwave or identifying potential joint venture partners
who could join with MFZ or MFA to fund and fast track the commercial rollout of the technology.

The results of the various discussions and approaches indicated that for shareholders in MFZ and MFA
the option which held the most attraction in terms of potential returns was to renegotiate and extend
the deal with Applied Thermal Coatings Inc (ATC).

ATC fully understands and is committed to the microwave technology and already has a large range of
commercial customers who ATC believes, will readily accept products processed in the microwave
technology during 2008.  ATC is excited about the prospects for the technology and has agreed to devote
substantial resources (human, financial and time) to ensure that it has the best opportunity for
achieving commercial success.

The key terms of the deal with ATC may be summarized as follows:

i)     Capital contributions into MFA by ATC. ATC has agreed to invest up to US$ 3.5 million in MFA
       during the period to 31 December 2012 in cash or through the contribution of services (at an agreed
       value for those services). In consideration of these capital contributions, MFZ has agreed to transfer
       shares in MFA to ATC at the rate of 1 per cent. of the equity in ATC for every US$50,000 contributed up
       to a maximum of US$3.5 million. If ATC's capital contributions reach the maximum amount, it will hold
       70 per cent. of the capital of MFA and MFZ will hold 15 per cent. The other existing shareholders in
       MFA, BWXT Y12 (the US Department of Energy) and Arapahoe Holdings (Harley Grant, one of the inventors
       of the technology), will retain their 10.0% and 5.0% shareholding respectively. On completion of this
       agreement, MFZ will transfer 10 per cent. of the equity of MFA to ATC on account of future capital
       contributions. The amount of capital contributed will be agreed by MFZ and ATC on an annual basis
       following the end of the financial year of MFA, which falls on 31 December, and the appropriate
       transfer of equity will take place at that time.

ii)    Repayment of MFA loans to MFZ. A formula has been agreed whereby MFZ will be repaid loan funds
       (up to the agreed amount of US$2.4 million, which represents substantially all of the amount expected
       to be owed to MFZ at completion) once ATC has received a return on its investment in MFA of three times
       the amount invested, subject to having invested at least US$3 million;

iii)   ATC will take-over the day-to-day management operations of MFA, including the technical and
       commercial aspects of the project and has agreed to provide sufficient resources to the Company in
       order to maximize the chances of achieving commercial success;

iv)    The Board of MFA will be restructured with Doug Parrish resigning from the Board of MFZ to
       become non-executive Chairman of MFA.  Mr. Jeff Henry, ATC's Technical Manager, will be appointed to
       the Board of MFA together with Mr. Harry Ray, a Tennessee-based lawyer and attorney for MFA.  MFZ will
       retain Board control of MFA up to and until ATC has subscribed sufficient funds to take its
       shareholding in MFA to 51% at which point ATC will be permitted to nominate an additional person to the
       MFA Board.  At the same time, one MFZ representative will step down from the Board;

v)     On completion of the transaction, namely 31st January 2008, ATC will take over all funding and
       other obligations to MFA. MFZ's obligations to the ongoing funding of the program will cease at this
       time. MFZ will continue to hold its shares in MFA (subject to terms of the agreement) but will no
       longer have any operational or financial commitment to MFA going forward.
       
       Up to 31st January, 2008 MFZ will continue to have responsibility for all aspects of the MFA
       business, including funding and commissioning of the new commercial microwave oven.

Commercial Microwave

As advised previously MFZ has commissioned the building, installation and commissioning of a new, next
generation commercial microwave applicator being developed for MFA by Microwave Materials Technology
(MMT) of Knoxville, Tennessee.  MMT are experts in the development, design and deployment of microwave
ovens.  The microwave applicator being developed by MMT represents state of the art design and
technology and addresses many of the technical issues which were difficult to overcome in the previous
pre-production microwaves owned by MFA.

The funding and commissioning of the new commercial microwave applicator (which is expected to be fully
completed by 31st January 2008) was an important milestone in securing ATC in the new arrangements now
agreed to and to put in place. The new microwave applicator is capable of producing product in
commercial quantities and provides the basis for ATC to approach its own client basis with the ability
to satisfy orders utilising the new microwave.

Whilst the ongoing investment in MFA by MFZ will be passive there remains considerable upside for MFZ
in the new arrangements in terms of existing shareholding in MFA and opportunity to be repaid loan
funds advanced by MFZ.

Ongoing Operations

Following completion of the agreement with ATC, MFZ will focus operationally on the recently acquired
water treatment technology, located within its subsidiary, Water Utilities Corporation Ltd (WUC).  MFZ
will now focus its efforts and resources on WUC and aim to ensure that it is able to achieve its
milestones on time and on budget. A detailed update on WUC's activities, including the commissioning of
the pilot plants will be provided to the market shortly.

Proposed Name Change

Following completion of the new arrangements with ATC and to reflect the fact that even though MFZ is
expected to retain majority ownership of MFA for some time to come, operationally the focus now will
shift to the WUC business.  Accordingly, the Board has determined that it will be appropriate to adopt
a new name for the Company which more accurately reflects the ongoing operational activities of the
Company.  The Board has resolved to recommend to shareholders a change in the name of the listed entity
from MicroFuze International Plc to Watermark Global Plc.

A Notice of Meeting seeking Shareholders' approval for the name change will be dispatched to all
shareholders shortly. The proposed date for the meeting will be 7 February, 2008.


Board Changes

As part of the dual-track development strategy going forward of accelerating the commercialisation of
the microwave technology in partnership with ATC in the USA and developing WUC's water-cleaning
technology in South Africa, Mr. Doug Parrish will move from the main Board of MFZ to become Chairman of
MFA and to take on a consultancy role with ATC following completion of the new arrangements, which is
expected to take place on 31 January 2008.

Mr. Peter Marks, Chairman, explains: "We will, in effect, now have two operational subsidiaries on two
different continents, so we wanted to ensure effective, hands-on management where it is needed. With
Doug Parrish overseeing the commercialisation of our patented MDT technology in America, and Jaco
Schoeman in charge of developments in South Africa, we've now put in place the senior management
expertise required as we progress on both fronts. I will, together with my Board colleagues, continue
to ensure strong oversight of the parent company and its operating subsidiaries."

Conclusion

It is anticipated that the new arrangements which have been agreed with ATC represent a commercially
sound and attractive way forward for MFZ and MFA and the commercial rollout for the technology.  These
arrangements will help to ensure the next stage in the rollout of the technology at the same time
alleviating all future funding requirements from MFZ and also protecting its existing investment and
providing it with the ability to share in the potential upside of the commercial rollout as well as
protecting its position in relation to the outstanding loan funds to MFA which can be repaid in the
event of future commercial success.
                                                                                                  ENDS.
    
For further information:
MicroFuze International plc                                                         www.microfuze.com
Doug Parrish, Chief Executive                                                Tel: +44 (0)20 7016 5100
parrish@microfuze.com                                                       Mob: +44 (0) 7789 373 292
Nominated Adviser: Nabarro Wells & Co Limited                                                        
Hugh Oram                                                                    Tel: +44 (0)20 7710 7400

Media enquiries:
Positive Profile                                                                                    
Henry Gewanter                                                              Tel: +44 (0)20 7489 2028
henryg@positiveprofile.com                                               Mob: + 44 (0) 7774 22 88 45
    

                                                                
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