Business Update

26 February 2016

(LSE: IEH; ADR: INGYY)

Intelligent Energy Holdings plc

Business update since 30th November results announcement

Update on funding process

Important operational achievements delivered across the business

Intelligent Energy ("IE"), the energy technology company, announces the following update:

Business update

IE has continued to focus on executing its corporate strategy, which is to leverage its world class technology and IP to target its end markets, with the key objective of delivering sustainable, long term shareholder value. Important progress continues to be made toward this goal.

Funding

IE is pleased to provide the following update on the funding process:

IE and its advisers are currently working with the proposed investors to crystallise proposals and formalise offers to determine the most advantageous proposal consistent with lE's objective of protecting existing shareholders.

In line with the Group's funding strategy, IE has accelerated the monetisation process of existing activities with industrial partners. Specifically, discussions for an IP license with an upfront consideration of more than £10m (in respect of certain elements of IE's technology) are taking place. Should this prove to be successful, coupled with the above referenced funding activities and the consolidated net cash balance of £17.4m at 31 January, this is expected to materially improve the overall funding position of IE.

IE intends to host a Capital Markets Event for analysts and investors following the conclusion of the funding process, part of which will focus on DP&G's activities in India. Further details will be provided in due course.

Divisional update

Distributed Power & Generation ("DP&G")

IE continues to successfully operate under an interim contract agreement with GTL, the Indian telecom towers operator, to provide power to 27,400 sites.

Activities are underway to transition the interim contract to the signed, long term, £1.2 billion of revenue energy management agreements to provide power to 27,400 telecom towers.

In this context, on the 6 January 2016, IE received regulatory clearance from the Competition Commission of India, leaving the completion of funding activities as the last remaining material condition precedent.

In February 2016, IE announced that, over the last three months, it had delivered over 10MWh of clean and efficient power from fuel cell technology to telecom towers in India. This is enough energy to power approximately 20,000 homes in the UK for an hour, saving 55 tons of CO2 emissions, and is equivalent to 60,000 lbs. of coal burnt. Although the fuel cell installation programme is at a very early stage, where the fuel cells have been deployed, IE has successfully increased the up time of the telecom towers to nearly 100%, a key metric for mobile network operators.

Looking forward, IE remains confident with the medium term target to manage power for 125,000 - 135,000 towers.

Based on a successful conclusion of the GTL transaction, IE expects as previously outlined, to conclude the acquisition of DP&G related intangible assets for debt with no recourse to IE's shareholders. Further updates will be provided to the market at the appropriate time.

Consumer Electronics ("CE")

Some important progress has been made in the CE division since the announcement of the results for the year ended 30 September 2015, with the Company successfully implementing its strategy of sharing development costs with partners.

Consequently, in February, IE was pleased to announce a £5.25m Joint Development Agreement ("JDA") with an emerging smartphone OEM to address smartphone power limitations. This followed a Letter of Intent ("LoI") with the same OEM announced on 30 November 2015. The JDA is expected to be cash flow positive with 10% payable following signature followed by a number of time based installments over the next 24 months.

In addition, a further Letter of Intent "LoI" was signed in January 2016 with a major drone manufacturer where both companies will develop technological solutions to increase drone flight time. Pain points for drones, particularly for commercial use, are known to be short flight times and long periods of downtime due to battery limitations and recharging.

Management have been encouraged by the increasing level of interest in the potential applications for its technology, which is broadening beyond smartphones. IE's embedded fuel cell technology was well received at CES, the leading industry trade show in Las Vegas, at the turn of the year.

More information can be found at http://www.intelligent-energy.com/embedded/

Motive

The Motive division continues to deliver on existing Joint Development agreements with OEM customers and government part-funded programmes with existing industrial partners in-line with our internal plans.

Henri Winand, Chief Executive, commented:

"The past few months have been incredibly busy for the Intelligent Energy, with key achievements on a number of fronts. I am pleased with the progress we have made on the funding process, which is complicated and has been time consuming by the very nature of the industrial and funding parties we work with. As identified efficiencies are delivered, we expect operating costs to continue to fall year on year. At the same time though, we have made some important operational achievements across the business. There is plenty of hard work ahead, but we remain confident in the outlook for the business and its opportunities for growth."

Enquiries:

Notes to Editors

About Intelligent Energy

Intelligent Energy Holdings plc is an energy technology group which develops efficient and clean hydrogen fuel cell power systems for the global automotive, consumer electronics, distributed power and generation markets - from powering zero-emission vehicles to compact energy packs for mobile devices and stationary power units for the always-on infrastructure.

Working with international companies, Intelligent Energy aims to embed its technology in mass market applications to solve the challenges of continuous power and productivity, by creating everyday energy solutions to power people's lives. The Group's intellectual property and expertise is based around proprietary fuel cell technologies, which are the product of over 25 years of research and development. Its patent portfolio includes more than 1000 plus patents granted (and over 1000 plus patents pending) across more than 400 patent families. The Group also maintains a significant body of confidential know-how and trade secrets.

With its principal facility and headquarters in Loughborough, UK, the company also has operations in India, Japan and Singapore, a commercial office in Silicon Valley, USA and development facilities co-located at the French Alternative Energies and Atomic Energy Commission in Grenoble and at NASA in Florida, USA. Intelligent Energy Holdings plc is listed on the London Stock Exchange (LSE: IEH).

More information on Intelligent Energy is available at Twitter, YouTube and LinkedIn. Or visit www.intelligent-energy.com.