Half Yearly Report

Amphion Innovations plc

Interims Results for the 6 months to 30 June 2013

London and New York, 24 September 2013 - 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 2013.

Highlights

· Generated revenue of US $264,638 during the period

· NAV at 30 June 2013 was US $0.12 (£0.08)

· Partner Company, Kromek, announced its Intention to Float on AIM. Amphion has 13.3% shareholding

· Kromek signed a development contract with a top four global OEM in the medical imaging market

· Partner Company, WellGen, was awarded a Phase I SBIR grant by the National Institutes of Health to progress the clinical investigation of their proprietary natural extracts in controlling Type 2 diabetes

Financial Results and Net Asset Value

Revenue for the six month period was US $264,638; roughly in line with the US $326,412 recorded in the second half of 2012, but lower than the US $1,069,394 recorded in the same period of last year. This decrease is a result of the intellectual property licensing programme stalling last year, which has remained so as we await the results for the Appeal of the Markman ruling as well the reduction in advisory fees. Expenses were also lower and the operating loss for the six months fell to US $1,025,023 from US $1,469,194, as reported in the same period of last year.

As a result, the Company's Net Asset Value at 30 June 2013 was US $0.12 (£0.08); down approximately 12% compared to 31 December 2012 which was reported at US $0.14 (£0.09).

Amphion's holding of intellectual property assets is valued at amortised cost of US $662,726. The directors believe that the realizable value of the intellectual property assets held by DataTern is substantially in excess of the carrying value and the incremental investments being made in the pursuit of infringers of the IP will generate a substantial profit. We believe that if we are successful in concluding licensing agreements, with the various infringing parties at levels that meet our expectations, the NAV per Share would be significantly higher.

DataTern and the Intellectual Property Licensing Programme

As we reported in our Annual Report for 2012, the Claim Construction Order known as a Markman ruling has delayed progress with DataTern and slowed the pace of settlements. Our legal team, supported by our extensive team of technical and patent experts, continues to believe that the ruling is not fully reflective of the claims of the two key patents, both of which have completed a comprehensive re-examination by the United States Patent and Trademark Office and successfully emerged both fully validated and with additional claims added. The appeal of the ruling to the United States Court of Appeals for the Federal Circuit is under way. All the briefs have now been filed and we expect to be advised of the date for the hearing quite soon and that date should be before the end of 2013. The suits we filed in Massachusetts against MicroStrategy and several of their customers who we believe infringe our IP are also subject to the Appeals Court process.

As reported, we are continuing to prosecute the remaining cases against users of the technology in Texas. The court schedule for one of those cases included a separate Markman hearing on 9 July 2013. We were pleased when the judge in that case opined that if he were to issue a Markman ruling he would find substantially in our favour. As the Appeal is going to be heard, no Markman ruling was issued but it is gratifying that he found substantially for our position, having access to most of the same materials that will be going before the Appeals court.

We believe that a Claim Construction ruling, which is fully reflective of our interpretation of the claims of the patents, will establish significant infringement and it remains the very firm and considered opinion of our team that the two patents are both valid and being infringed by a wide range of companies that are practicing this critical art. There remain a large number of additional potential licensees and we believe that we should be able to generate a significant amount of revenue from this asset over the next few years. FireStar Software, where the technology and patents were originally developed, shares directly in this revenue stream.

Building Value in Our Partner Companies

On 12 September Kromek announced its Intention to Float on the AIM market. We are very actively working with the company and its advisors to prepare for the admission to the market. Our announcement of 12 September 2013 included a detailed summary of Kromek's programmes and status. Amphion has a 13.3% shareholding of the company.

It has been just over ten years since Kromek was spun out of the University of Durham and the Kromek team has done well to raise the financing needed to advance to the current stage in a very testing financial environment. Over the last few years the company has made two key acquisitions in the United States. The first, Nova R&D, brought a wealth of knowledge, expertise, and IP in specialized electronics and ASICS. The second, eV Products, completed in February of this year, has provided Kromek with the leading capability in the production of detectors and sub-assemblies using the current state-of-the-art technology in CZT. The programmes in Durham, in the UK, continue to make progress in development of the vapour-phase technology which, when commercialized, will allow wafer-scale production of CZT with major advantages in cost and quality.

Kromek continues to make commercial progress on many fronts. The nuclear contamination disaster in Japan continues to generate a need for new and more versatile gamma ray monitoring devices and Kromek has been able to address this need with its range of products and is currently developing others. In addition, important and exciting progress is now being seen in other areas, such as in medicine, where the use of high-quality CZT detector materials can have a significant impact on the use of x-rays. We have recently seen important advances in programmes that have been under way for some time with leading medical technology companies in the CT, SPECT, and BMD areas, each of which uses x-rays in various ways for medical imaging. Kromek recently signed a development contract with a top four global OEM in the medical imaging market.

Since we completed the Annual Report in June we have been working closely with the management teams at all six other Partner Companies. We believe each one has a solid technical foundation and should make better progress once we can find more capital to support their activities. In this regard we are pleased to report that WellGen has recently been awarded a Phase 1 SBIR grant by the National Institutes of Health to progress the clinical investigation of their proprietary natural extracts in controlling Type 2 diabetes.

In summary, despite our cautious approach to valuation over the last two years, we continue to see a lot of opportunity to build and, in due course, extract value from each one of our Partner Companies, in addition to the IP licensing programme being pursued directly by DataTern.

Financing

Financial support for Amphion in the first half of the current year has continued to be provided, for the most part, by loans from the directors and additional contributions from the management team. We have continued to cut costs wherever possible and the leadership team has continued to work with much reduced levels of current cash compensation. Our goal is to get through this challenging period in the market to the point where we can begin to realize the fruits of our investment in DataTern and our Partner Companies.

Prospects

While we must remain cautious, the opportunity to pursue an IPO for Kromek on AIM reflects a significant improvement in the public markets over the last year and is a major development for Amphion. The IPO market remains volatile and relatively thin compared with the levels reached in 1999/2000 but it is now substantially stronger than at this time last year. The return of a viable IPO market is a critical and positive development and, if it continues to improve, should have a positive effect on the availability of capital for many of our Partner Companies. We believe there is significant inherent value to be developed and extracted from DataTern and our Partner Companies and we continue to be committed to the goal of generating and returning value to our shareholders from our current assets.

For further information please contact:

Amphion Innovations

Charlie Morgan

+1 212 210 6224

Novella Communications

Tim Robertson

+44 (0)20 3151 7008

Panmure Gordon Limited

Freddy Crossley/ Fred Walsh/ Grishma Patel (Corporate Finance)

Adam Pollock/ Charlie Leigh-Pemberton/ Hannah Woodley (Corporate Broking)

+44 (0)20 7866 2500

1. General information

The condensed consolidated interim financial statements for the six months ended 30 June 2013 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 2012 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. 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 2012, except for the adoption of new standards and interpretations effective as of 1 January 2013.

The Group has adopted the following new standards and amendments to standards with a date of initial application of 1 January 2013.

· IFRS 10 Consolidated Financial Statements (2011)

· IFRS 13 Fair Value Measurement

· Presentation of Items of Other Comprehensive Income (Amendments to IAS 1)

· Financial Instruments: Presentation (Amendments to IAS 32)

Application of these standards and amendments had no significant impact on the Group's financial position or results of operations.

3. Revenue

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

In August 2010, DataTern, Inc. entered into an agreement with Niro, Haller & Niro ("NHN") to represent DataTern, Inc. in connection with the licensing and enforcement of its patents. In June 2011, DataTern, Inc. and NHN agreed to terminate the agreement effective as of 25 January 2012. Under the termination agreement, NHN is to be paid US $400,000 by DataTern, Inc. in lieu of any other fees they may have received for the outstanding cases. NHN is to be paid as follows: US $40,000 within seven days of signing the agreement; US $180,000 on 15 June 2012; and US $180,000 on 15 December 2012. At 30 June 2013, US $110,000 remains payable.

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.

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 2012, the Group was organised into three business segments - advisory services, investing activities, and intellectual property.