Trading Update

Acta S.p.A.

("Acta" or "the Company")

Trading Update

Acta, the provider of clean energy products and environmental catalysts, issues the following trading update today for the year to 31 December 2009. The preliminary results are expected to be announced on Thursday 25 March 2010.

Commercial and Technical Review

During January 2010 Acta has shipped the Company's first hydrogen generators and power generators to distributors for testing and demonstration purposes, and has received encouraging technical and commercial feedback.

Following the strong level of demand for distribution rights that the Company received through its trade fair programme in November and December 2009, fifteen European distributors have been selected to cover key sectors and applications. Product samples are now being shipped to these distributors, and framework distribution agreements will be concluded over the next three to six months, giving the Company access to a wide distribution network into key early-adopter sectors such as leisure (nautical and camping), UPS and automotive accessories (fuel saving and emission reduction).

The current level of product demand has exceeded management's expectations, and the Company is now implementing a program to increase production facilities and supply chain capacity to meet this demand. The Company's production strategy, incorporating subcontract manufacture of components and internal assembly and quality control of finished products, minimises the investment requirements and timeframe needed to achieve commercial production levels. A production capacity of 100 units per month is planned by the end of 2010, and thereafter the Company intends to use the processes and experience gained during this year to increase production capabilities up to breakeven volume capacity by mid-2011, to be financed from existing resources.

Acta has also continued to pursue partnerships and opportunities in the Italian photovoltaic installation sector. This activity aims to complete the Company's renewable energy value chain, from solar or wind source, through compressed hydrogen generation from intermittent power, to end user products (consumer applications, energy independent homes, etc). The Italian market is currently attracting a high level of PV installation investment interest, and the Company is hopeful of announcing concrete progress in these activities in due course.

Financial Review

During 2009 Acta has benefitted from the cost reduction programme introduced in late 2008 and pursued through the last year, with significant overhead savings compared to 2008 levels. The growth of new commercial activities in 2010 will require cost commitments in new staff and sales and marketing activities, and modest investments in production capacity, and these will be carefully managed from within the Company's existing financial resources.

Paolo Bert, Chief Executive, commented:

"2009 saw the start of a substantial transition in the Company's commercial strategy and market positioning, based upon the exceptional opportunities that we see for our unique hydrogen generator product range. During 2010 we will be focusing on bringing these products through to full commercial operations, while continuing to pursue the wider opportunities from solar to fuel cells available to us in the renewable energy and clean technology sectors."

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Notes to Editors

Acta S.p.A. is a developer and manufacturer of a broad range of renewable energy and related products. Its product line includes a range of compact hydrogen generators as well as various portable, mobile and backup fuel cell devices that can make use of locally generated hydrogen in UPS, marine, automotive, electric cycling, scooter, camping and domestic applications. The Company's broader interests include a range of environmental catalysts and solar power projects.

Acta's cost-competitive products are based on its proprietary, inexpensive environmental catalyst and hydrogen conversion technologies. These products help overcome the barriers to the adoption of fuel cells, most notably the lack of a local hydrogen infrastructure.

Acta's low-cost hydrogen generators represent a unique breakthrough in electrolyser technology. They can operate using mains power or intermittent renewable energy, and produce clean, dry hydrogen already at pressure for use in fuel cell and other applications. This unique combination of features avoids the system complexity and energy cost of further cleaning, drying and compression of the hydrogen, resulting in a simple, compact, low-cost and highly efficient system that is ideally suited for energy conversion and storage applications. In such applications, which include battery replacement and renewable energy storage, low cost and high efficiency are critical to commercial viability, while hydrogen compression is essential for the energy density of the system. No other water electrolyser currently on the market offers this combination of benefits.

Acta is focusing on delivering its products to markets with high volume demand for high-value environmental solutions (transport, UPS, energy and leisure). It is accelerating the commercialisation of its products via partnerships with original equipment manufacturers (OEMs), distributors, and agents in these sectors, and intends to drive down production costs at high volume via contract manufacturing.

Acta is marketing its product range to early adopters through its energy products division, Acta Energy. This division's objective is to ensure, through facilitating the widespread adoption of commercial and domestic fuel cell products, that Acta's hydrogen generator becomes a familiar industrial and domestic appliance.

Acta S.p.A. was admitted to trading on AIM in October 2005. It is based near Pisa, Italy, from where it manages a growing overseas distributor network targeting a global fuel cell market estimated to be worth US$26 billion by 2020.

www.acta-nanotech.com 

www.actaenergy.it