AMP.L Regulatory News (AMP)

Amphion Innovations plc

Interim Results for the 6 months to 30 June 2011

London and New York, 29 September 2011 - Amphion Innovations plc (LSE: AMP) ("Amphion" or the "Company"), the developer of medical and technology businesses, today announces its unaudited interim results for the six months to 30 June 2011.

Highlights

Financial

·; Revenue for the first six months was US $2.6 million as compared to US $1.6 million for the first six months of 2010

·; Operating loss was reduced from US $1.1 million for the first six months of 2010 to $130,224 for the first six months of 2011

·; The net asset value per share at 30 June 2011 was US 22 cents or UK 13.9 pence per share

Commercial

·; IP licensing programme (DataTern) has been expanded alongside new IP legal partner with encouraging progress to date

·; Kromek's GR1 instrument in use and attracting significant attention in Japan

·; Motif BioSciences making good progress on formation of strategic partnership with a new Indian partner

Amphion's Chairman and Chief Executive Officer, Richard Morgan, said: "We are pleased to be reporting an improved set of results for the Company. Alongside the progress being made by each of the Partner Companies, we believe DataTern is starting to benefit from the support of our new IP litigation partner and as a result the potential of this business has increased substantially. Improved performance by DataTern should in due course lead to an improvement in Amphion's results, with a positive impact on Amphion's financial condition and its ability to fund and grow its Partner Companies."

Amphion Innovations plc

Charlie Morgan +1 212 210 6224

Cardew Group

Tim Robertson +44 20 7930 0777

Seymour Pierce Limited (Nominated Advisor)

Freddy Crossley/ Mark Percy +44 20 7107 8300

Notes to editors

About Amphion Innovations plc

Amphion (LSE: AMP) builds shareholder value in emerging companies in the medical and technology sectors, by using a focused, hands-on company building approach, based on decades of experience in both the US and UK. Amphion has significant shareholding in seven Partner Companies developing proven technologies targeting substantial commercial marketplaces. The Amphion model has been refined to optimise the commercialisation of patents and other intellectual property within the Partner Companies. The Partner Companies collectively own or control over 200 separately identified pieces of intellectual property, a number which grows steadily each year.

On the web: www.amphionplc.com

CEO's Statement

Financial Results and Net Asset Value

Revenue for the first six months was US $2.6 million as compared to US $1.6 million for the first six months of 2010. The increase in revenue is mainly due to the improved performance of DataTern, the Company's Intellectual Property licensing programme, which increased revenue from US $732,050 for the first six months of 2010 to US $2 million for the first six months of 2011. Operating loss was reduced from US $1.1 million for the first six months of 2010 to $130,224 for the first six months of 2011 as a result of the increase in revenue and a decrease in administrative expenses from US $2.4 million to US $1.9 million. The decrease in administrative expenses reflects the Company's continuing commitment to reduce its operating costs. Net profit for the first six months of 2011 was US $197,934 as compared to a loss of US $2.9 million for the first six months of 2010. Net cash at the end of the period was $855,235. The Company's net assets increased slightly from US $29.2 million at 31 December 2010 to US $29.6 million at 30 June 2011, the increase being primarily as a result of foreign currency adjustments. The net asset value per share at 30 June 2011 was US 22 cents or UK 13.9 pence per share.

IP Licensing Programme

In April, Microsoft and SAP filed actions against DataTern in New York asserting generally that our '402 and '502 patents are invalid and not infringed. In response, DataTern retained a well respected law firm, McCarter & English LLP, to meet this challenge. In working with McCarter & English over the last few months DataTern has conducted a thorough review of its legal strategies and options. This work has served to confirm DataTern's continuing belief that its intellectual property is strong and the extent of infringement by third parties is broad. As a result of this work, DataTern has now taken concrete steps to combat the allegations by Microsoft and SAP and to bolster our patent rights. First, DataTern has filed a motion in New York to dismiss or at least stay these actions while DataTern continues litigations in Texas against users of the patented technology. Second, DataTern has filed an application with the U.S. Patent and Trademark Office (USPTO) to re-examine the '402 patent. Under this procedure, a patent may be maintained as is, expanded, reduced or even rendered invalid. DataTern's confidence in the validity of this patent justifies exposing it to re-examination to test and strengthen its validity. As we reported previously, the '502 patent successfully completed re-examination by the USPTO with all 18 original claims intact and 26 new claims added. We look forward to working with McCarter & English as we seek fair and reasonable licensing agreements with the companies using this important technology.

Partner Companies

The market for financing of private emerging technology and med-tech companies remains extremely challenging. Provided our IP programme continues to make progress, Amphion's need for capital at the parent company level should remain relatively small. We anticipate needing to provide continuing support to several of our Partner Companies in the period ahead and we will continuously re-evaluate the need for external funding for Amphion in the light of progress at DataTern. At the level of each Partner Company, we continue to devote considerable time and effort to the generation of financial and operating support through strategic partnerships of various kinds and through the monetisation of the intellectual property which, for example, is underway and making good progress at Axcess. Our Partner Companies continue to generate valuable new intellectual property, as evidenced by the patents recently issued to both FireStar and m2m.

Kromek continues to make progress in its core programmes and has recently received additional orders for its GR1 instrument which is being used in Japan for the decommissioning of the Fukushima nuclear power plant. There appear to be a number of additional opportunities for the sale of this product and derivative products in Japan, in the wake of the earthquake and subsequent tsunami. Motif BioSciences has made good progress towards the consummation of an important and exciting partnership with one of the leading Indian pharmaceutical services companies. The combination of Motif's leading team of drug discovery experts and the capabilities of the new partner represents an integrated capability to take Motif's proprietary projects from concept to the development of a Pre-Clinical Candidate, expected to be completed in less than two years. Axcess is continuing to make progress on the enforcement of its intellectual property rights and is pursuing licensing opportunities which promise to provide the IP differentiation and the financial resources to allow the company to rebuild its operations and develop its market position with its leading partners. FireStar continues to advance its proprietary messaging technology in collaboration with the Object Management Group and to make progress towards key milestones in its programme with the Social Security Administration and others. In due course we anticipate FireStar also standing to benefit from its sharing agreement with Amphion in the future DataTern licensing revenue stream. We continue to work with PrivateMarkets, m2m and WellGen to develop new plans that will allow these companies to get back on the road to recovery and make progress towards raising additional capital from third party investors or partners.

Outlook

We continue to have confidence in both the strength of the IP programme and the basic technology and market opportunities for each of our Partner Companies and we are working hard to preserve and extract as much value as possible from each one. The Board expects to see a significant increase in DataTern activity in the months ahead which, if our basic assumptions on the quality and strength of our IP prove correct, should lead to a significant increase in revenue and cash flow over the next fifteen months. While the short term results of these new activities are difficult to predict with any accuracy and we will have to continue to manage the business very cautiously in the short term, we are optimistic they will lead to good outcomes over time. Improved performance by DataTern should in turn lead to an improvement in Amphion's results in due course, with a positive impact on Amphion's financial condition and its ability to fund and grow its Partner Companies. While it is too early to be able to say that the worst is behind us, we are encouraged by recent developments and optimistic about Amphion's future prospects for 2011 and beyond.

1. General information

The condensed consolidated interim financial statements for the six months ended 30 June 2011 are unaudited and do not constitute statutory accounts within the meaning of the Isle of Man Companies Acts 1931 to 2004. The statutory accounts of Amphion Innovations plc for the year ended 31 December 2010 have been filed with the Registrar of Companies and contain an unqualified audit report which includes an emphasis of matter relating to significant uncertainty in respect of going concern and valuation of Partner Company investments and other receivables from Partner Companies. Copies are available on the company's website at www.amphionplc.com/reports.php.

2. Accounting policies

These condensed consolidated interim financial statements have been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards (IFRS).

The accounting policies applied by the Group are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2010 except for the impact of the adoption of the Standards and Interpretations described below.

Amendment to IRFIC 14: Prepayments of a Minimum Funding Requirement (effective for annual periods beginning on or after 1 January 2011)

Revised IAS 24: Related Party Disclosures (effective for annual periods beginning on or after 1 January 2011)

These standards do not have a material impact on the financial statements of the Group.

3. Revenue

An analysis of the Group's revenue is as follows:

In February 2008, DataTern, Inc., a wholly owned subsidiary of the Company, entered into an agreement with IP Navigation Group, LLC to provide strategic advisory services including licensing and enforcement of various patents held by DataTern, Inc. DataTern, Inc. and IP Navigation Group LLC agreed to terminate the advisory services agreement effective as of 31 October 2010. In August 2010, DataTern entered into an agreement with new lawyers and technical experts where they would receive 46% of the gross proceeds. In March 2011, the fee was reduced to 40%. During 2011, the new lawyers assisted in obtaining non-exclusive licenses of DataTern's key database patents to various companies totaling US $2,035,000. The lawyers received fees of US $865,000.

As part of the agreement for DataTern, Inc. to purchase certain of the intangible assets in December 2007, a portion of future revenues from these patents will be retained by FireStar Software, Inc. No amounts have become payable to FireStar Software, Inc. to date.

In July 2011, DataTern, Inc. entered into an agreement with McCarter & English to represent them in their litigation with Microsoft Corporation and SAP AG and in certain other patent matters.

4. Segment information

For management purposes, the Group is currently organised into three business segments - advisory services, investing, and intellectual property. These business segments are the basis on which the Group reports its primary segment information.

Information regarding these segments is presented below.

4. Segment information, (continued)

For management purposes for 30 June 2010, the Group was organised into three business segments - advisory services, investing activities, and intellectual property.

4. Segment information, (continued)

Geographical segments

The Group's operations are located in the United States and the United Kingdom.

The following table provides an analysis of the Group's advisory fees by geographical location of the investment.

The following table provides an analysis of the Group's license fees by geographical location.

The following is an analysis of the carrying amount of segment assets, and additions to fixtures, fittings and equipment, analysed by the geographical area in which the assets are located: