Amphion Innovations : Preliminary Results for the year ended 31 December 2016

London and New York, 28 June 2017 - Amphion Innovations plc (AIM: AMP), the developer of medical, life science, and technology businesses, announces its audited results for the year ended 31 December 2016.

• Net Asset Value ("NAV") fell to US -$5,886,381 (2015: US $10,892,072) as at year-end due almost entirely to the movement in value of the Motif Bio plc share price

  Partner Companies' Highlights:

• Motif Bio completed treatment of patients in its Phase III trial (REVIVE-1) for its product candidate iclaprim

• Motif Bio listed on NASDAQ, raising £20.0 million (US $25.0 million)

  Post Period Events:

• Motif Bio released data readout from REVIVE-1, showing iclaprim to be well tolerated and met the non-inferiority margin mandated by the FDA

• Motif Bio raised an additional £20.0 million (US $25.8 million) to fund its REVIVE-2 study through to completion and the filing of a New Drug Application for iclaprim with the US FDA

• m2m Imaging Corp. and Polarean Inc. merged to create Polarean Imaging Limited, a clinical-stage, revenue generating, medical imaging product company, in a cash and share merger

• Polarean Imaging Limited announces the closing of its Pre-IPO financing of US $2.0 million

• Sold the Company's remaining holding of Kromek Group plc

• In May 2017, Richard Morgan and Robert Bertoldi, Directors of the Company, entered into a Deed of Postponement where they have agreed to postpone the repayment of the amounts owed to them, which total US $4.3 million, until all other debts of the company are repaid

• As of 26 June 2017, the increase in Motif's share price to 29.75p has increased Amphion's Net Asset Value by approximately US $3.2 million

• Mr. Paul Kennedy resigned as a Non-executive Director on 27 June 2017, with immediate effect

Amphion Innovations is a developer of medical, life science and technology businesses. We use our extensive experience in company building to invest and build shareholder value in high growth companies in 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 rapidly each year.

Revenue in 2016 was US $139,633 (2015: US $519,855) while total administrative expenses were US $3,474,045 (2015: US $4,680,212). As a result, the operating loss for the year was US $3,334,412 (2015: US $4,160,357).

Revenue was lower than in 2015 due mainly to a further reduction in management fees from our Partner Companies. Total administrative expenses were down sharply compared to the previous year despite incurring costs associated with DataTern of US $841,055, roughly similar to the previous year (2015: US $871,003).

The Net Asset Value ("NAV") fell sharply during the year from US $10,892,072 at 31 December 2015 to US -$5,886,381 due nearly entirely to a large reduction in the value of Amphion's holding in Motif Bio plc ("Motif"), the clinical stage biopharmaceutical company specialising in developing novel antibiotics. The share price of Motif fell from 51.7 pence at the end of June 2016 to 24.7 pence at the end of December 2016. The fall in the value of the pound, which started in late June following the leave vote in the Brexit referendum, made the reduction in the value of the holding in US dollars even more severe. The pound fell from about US $1.50 just before the Brexit vote to US $1.23 at the end of December 2016. As result of these factors, the value of the holding fell by US $13.8 million over the financial year. As a result, the NAV per Share was -3.0 cents at 31 December 2016 versus 5.5 cents at the end of 2015. In Pounds Sterling, NAV per Share was -2.4 pence at the end of December 2016, versus the 2015 year end figure of 3.8 pence.

As noted, the Brexit vote and resulting disruptions in the financial markets had an adverse impact on Motif and as a result on Amphion. Since the IPO on AIM in April 2015 Motif's intention was always to seek a listing on NASDAQ on the assumption that it would prove to be of value to the shareholders to be listed on the same market as the other leading antibiotic companies. Unfortunately, the biotech market experienced challenges in late 2015 and by the time a recovery started in the spring the main biotech indices were down over 40% from their highs in the summer of 2015. The volatility within the biotech indices meant that Motif's board and executives were forced to be flexible in achieving the goals of new capital and a public listing in the US markets. During this time, the Motif share price fell to around 30p, almost 30% below where it had been just twelve months prior and more than 50% below where it had been a year earlier in US dollars. The financing to raise £20 million (approximately US $26 million) was ultimately priced at 28p, which was disappointing, but necessary for Motif to continue towards its goals and deliver significant shareholder value.

Amphion continues to have confidence in the underlying value of Motif and despite the sharp fall in the market price late last year we continue to expect the value to be significantly in the short-to-medium term if the data readout from REVIVE-2, the second of the two pivotal clinical trials, meets expectations. The data readout for REVIVE-1, announced on 18 April 2017, did indeed meet those expectations and we have every reason to expect the readout from REVIVE- 2, due in the next six months, to be very similar.

Since the period end, Motif raised an additional £20.0 million (US $25.8 million) in June 2017 which is expected to be sufficient to fund the company through the filing of a New Drug Application ("NDA") for its antibiotic product candidate iclaprim in the first half of 2018. Historically, most antibiotic companies that have reached the stage where the value of the drug is supported by good data have traded in the stock market at valuations significantly higher than Motif's current valuation. For example, Durata Therapeutics was acquired for US $675 million in late 2014 following approval of its antibiotic a few months earlier. At the time of writing, both Tetraphase Pharmaceuticals Inc. and Paratek Pharmaceuticals have valuations considerably higher of US $270 million and US $680 million respectively) and the valuation of Achaogen Inc. is approaching US $1 billion.

Post period end, on 18 April 2017, Motif announced the data readout from REVIVE-1, the first of the two Phase III trials under way to provide the regulatory agencies with the information and data required for Motif to seek marketing approval of the drug in the US and Europe. The data show iclaprim to be well tolerated and to meet the non-inferiority margin mandated by the FDA. Data readout from REVIVE-2, the on-going second Phase III trial, is expected in the second half of 2017. REVIVE-2 uses the same protocol and trial design but at different sites and there is no reason to believe the data readout from the second trial should be materially different from the first. If REVIVE-2 is successful, as we expect it to be, iclaprim will have been used in close to 1,000 patients and demonstrated a good safety profile and efficacy comparable to other antibiotics in use today, many of which are already seeing the onset of antimicrobial resistance. Subject to the necessary regulatory approvals, Motif expects to begin marketing the drug in 2019. Amphion currently owns approximately 16.5% of Motif.

Post period end, on 31 May 2017, we announced that Amphion Partner Company, m2m Imaging Corp. ("m2m"), completed the merger with Polarean Inc. to form Polarean Imaging Limited ("Polarean"), a UK company, for which we plan to seek a listing on AIM later this year. In addition to the merger, we announced the successful completion of a pre-IPO placing which raised Polarean a total of US $2 million. Approximately 20% of the total financing was subscribed by Amphion. Polarean is a clinical-stage, revenue generating, medical imaging product company that expects to gain clinical approval for its drug/device combination product, which enables the visualisation of hyperpolarised Xenon129 via magnetic resonance imaging technology, within three years. The protocol for the clinical trials has been agreed with the FDA and, if successful, should garner a broad clearance to market "for use in pulmonary medicine." The FDA has recognised hyperpolarized Xenon129 as safe, given the history of use of Xenon gas in anesthesia. Polarean has a growing installed base of 15 systems currently in use at leading research institutions and the company expects to sell additional units and consumables for research purposes during the course of the next two years while the Phase III clinical trial is under way. The FDA has indicated a broad marketing label for the system if the trial is successful and launch of the system for clinical use should follow in early 2020.

Polarean designs, develops, and manufactures the equipment required to hyperpolarise the noble gas Xenon129, which is visible in magnetic resonance imaging ("MRI") for the purpose of quantitatively and non-invasively visualizing pulmonary function at high levels of resolution, sensitivity, and reproducibility. Polarean also designs, develops, and manufactures optimised high performance Radio Frequency ("RF") coils specifically required for the Xenon signal detection in MRI systems. Polarean has a proprietary position in the technology and equipment that enables all existing MRI systems to achieve a vastly improved level of pulmonary functional imaging.

Polarean's products address an acute unmet medical need. Current methods to diagnose and monitor lung disease are either imprecise (e.g. spirometry and scintigraphy), and/or deliver radiation to patients (scintigraphy, X-ray, computerised tomography ("CT")). None are able to visualise the function of the smallest airways where disease begins. Polarean's technology provides vastly improved imaging quality and diagnostic benefit.

The potential market for Polarean's products is very large, conditioned by the prevalence of pulmonary disease and by the over 10,000 MRI systems in operation in the US today (and a similar number overseas). The company's proprietary technology is used in conjunction with the existing installed base of MRI machines, allowing MRI equipment to function more profitably and in novel ways. Lung disease is widespread, costly, and growing. In the US alone, it affects approximately 40 million Americans and costs the healthcare delivery system more than US $150 billion annually. In China, 100 million people suffer from chronic obstructive pulmonary disease ("COPD"), 30 million from asthma, and respiratory disease accounts for 12% of all deaths.

Amphion invested about US $400,000 in the pre-IPO financing, and following the merger and pre-IPO raise, Amphion will own approximately 26% of Polarean.

After a very long delay, DataTern Inc. ("DataTern"), a wholly owned subsidiary of the Company, received a Markman ruling in the MicroStrategy case that has been under review by DataTern's legal team. This followed favourable rulings by the U.S. District Court in Massachusetts (the "Court"), which earlier denied two motions for summary judgment filed by MicroStrategy Inc. ("MicroStrategy") seeking dismissal of DataTern's claims on the grounds of validity and