AGM Statement

Amphion Innovations plc

AGM Statement

London, UK, 8 June 2010 - Amphion Innovations plc (LSE: AMP) ("Amphion" or the "Company"), the developer of companies in the medical and technology sectors, announces that the following statement will be made today by Richard C.E. Morgan, Chief Executive Officer, at the AGM at 10.00 am.

At the time of the preliminary results in March 2010, Amphion reported on the continued success of the intellectual property ("IP") licensing programme, which contributed sufficient revenue and gross profit to result in a substantial reduction in the total loss from operations. Amphion also reported Net Asset Value declined only marginally to $0.42 from $0.44 in 2008, despite a difficult market environment.

Markets remain challenging, particularly the sourcing of capital for early stage technology companies. Amphion has responded through generating income from its IP licensing programme and seeing alternative routes for raising capital.

Amphion's Intellectual Property Licensing Programme

We entered the year with renewed confidence in the strength of our intellectual property (IP) licensing program, following the re-issuance of the 502 patent in August of last year, after two years of review by the US Patent Office. 2009 ended on a strong note and we managed to beat the goals we had set for this part of the business and our plan therefore assumed that we should be able to steadily improve the total gross revenue flowing in to Amphion through DataTern on this in 2010 compared with 2009. Completing the analysis of infringement contentions on the 502 patent has taken longer than anticipated and, as result, we were only able to file our first new claims in February. However, we continue to have confidence in the future potential of the programme and are now beginning to see increased activity. We expect that this part of our plan should be back on track very soon and we continue to expect that our basic assumptions in our plan for the year as a whole remain sound.

Our IP programmes are now at the point where they have become an integral and key part of our business system and now we have the opportunity to strengthen the management of this part of the business and, we hope, take it to a higher level over the next year or two. We have recently recruited John Caruso, a seasoned executive to join Amphion to head up our IP licensing programmes. John Caruso comes to us with experience in both the management of IP in companies like Baxter and broad general management experience which we hope to put to work more broadly in the future.

Amphion's Capital Raising Programme

Through the close of last year our primary capital raising activity was focused on the issuance of the 7% Convertible Promissory Note (the "CPN"), which we had targeted to raise circa £7 million. We have placed £5.8 million, leaving approximately £1.2 million available for subscription. This funding gap in our operating plan is close to $2 million at year-end exchange rates and in recent months we have looked at alternative sources of capital. We are currently actively exploring a debt facility which we believe could provide at least $2 million and possibly up to $5 million of additional capital, either as a substitute or as a complement to the remaining issuance of the CPN.

Amphion's Partner Companies and Net Asset Value

The market for financing of private emerging technology and med-tech companies is proving extremely challenging. It has taken a marked turn for the worse in the last two months, as the fallout from the Greece/Euro crisis has spread to other countries and to most capital markets, public and private. We have to assume that with the fall in the appetite for risk in all major markets that the planning horizon for IPO's has also moved out another six to twelve months. The IPO market typically lags the recovery in the main markets by year or two and it is not easy to see how a sufficiently strong market will prevail to allow us to achieve exits in this way until the first half of 2011 at the earliest.

These developments have led us to re-double our efforts to find alternative financing mechanisms for both Amphion and for our Partner Companies. Provided our IP programme continues to make progress, Amphion's need for capital at the parent company level will remain relatively small and we expect to be able to cover most of our operating costs from internally generated funds in 2010, just as we did in 2009. However, we anticipate needing to provide additional support to our Partner Companies and at the Amphion level we are looking for more strategic solutions to this funding challenge. We are evaluating some special-purpose financing structures, in addition to the debt mentioned above, in order to give us access to additional capital to support our Partner Companies. At the level of each Partner Company, we are significantly increasing the time and effort we are devoting to making progress through corporate partnerships, through monetization of the IP and through modifications to the basic business plan of each business to make each less capital intensive.

It is only realistic to assume that the cumulative effects of these developments will have a negative impact on the valuations of some of our Partner Companies. We have warned of possible decreases in the valuations of some of our companies for the last three years and we continue to see a generally negative environment in that regard. That being said, we were successful in attracting a substantial amount of capital for Kromek, which closed a major round of financing early in the year. That financing was clearly helped by the renewed focus on aviation security following the failed attempt to detonate a device on a plane on Christmas Day. However, even in that case, the final price of the round of financing was about 10% lower than we had been assuming up to that point. We reflected the lower valuation in the year-end accounts and will of course make adjustments quickly when we have good, objective data upon which to base a new valuation. As noted in other places, our valuations are protected to some extent by the fact that part of our recent investments in many of the Partner Companies has been in the form of convertible debt.

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.

Amphion Board of Directors

Richard Mansell-Jones is not standing for re-election and as a result will step down as Chairman. I wish to thank Richard on behalf of all shareholders for his able leadership and steadfast support for the Company through the IPO and over the last five years. In due course the Board intends to appoint a non-Executive Chairman, in the meantime I will be Chairman of the Company until that appointment is made.

For further information please contact:

Amphion Innovations

Charlie Morgan: +1 (212) 210-6224

Cardew Group

Tim Robertson/ Jamie Milton: +44 020 7930 0777

Charles Stanley Securities, Nominated Adviser

Mark Taylor
+44 020 7149 6000

About Amphion Innovations plc

Amphion (LSE: AMP) builds shareholder value in high growth 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 8 Partner Companies developing proven technologies targeting substantial commercial marketplaces, each in excess of $1 billion. Each Partner Company is chosen with the goal of achieving an exit valuation in excess of $100 million. 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 rapidly each year.

On the web: www.amphionplc.com