Morphic acquires energy technology company, Helbio S.A.

Press Release
Morphic Technologies AB (publ)                                              
Karlskoga, August 24, 2007


Morphic acquires energy technology company, Helbio S.A.

Morphic has reached an agreement to acquire 55 percent of the Greek energy
technology company, Helbio S.A. The company is a leading producer of systems for
efficient and environmentally friendly production of hydrogen from renewable
fuels, such as ethanol and natural gas. The acquisition gives Morphic access to
expertise that accelerates the market introduction of Morphic's energy systems
that are widely considered to have great commercial potential.

Since its establishment in 2001, Helbio has reached a leading position regarding
development of technology for cost-effective production of hydrogen. The
company's systems can be used both in conjunction with industrial use of
hydrogen and as a pre-stage to fuel cells for electricity and heat production.

The core of Helbio's patented technology consists of so-called "reformers" that
make it possible to convert liquid and gaseous fuels, such as alcohols and
hydrocarbons, to hydrogen. The technology's strength lies in its great
efficiency, low production costs, and, not least, the ability to produce
hydrogen gas locally. Thus, two factors are eliminated that have for a long time
been hurdles to a more widespread use of hydrogen gas technology; namely, high
production costs and difficulties associated with distribution.

“Through the acquisition of Helbio we strengthen our position within fuel cells
and energy systems based on renewable fuels in a number of ways. The fact that
we now can also offer products for hydrogen production means that the market
introduction of several types of complete energy systems can be sped up
considerably. A current example is the great possibilities for converting biogas
from the agricultural sector into electricity. We also gain valuable competence
for the development of our own energy converters that make it possible to store
energy from renewable energy sources such as wind power. This acquisition is
strategically very important for us,” says Jonas Eklind, President and CEO of
Morphic Technologies AB.

The consideration for the acquisition of 55 per cent of the shares in Helbio
Holding S.A. is EUR 3 780 000 in cash. The remaining owners are Professor
Xenophon E. Verykios (42 percent), Helbio employees (2 percent) as well as the
University of Patras (1 percent). In conjunction with the acquisition, Morphic
will inject EUR 500,000 new capital into Helbio. Closing of the transaction is
planned to take place during September 2007.

Facts about Helbio
Helbio was founded in 2001 as a spin-off from the University of Patras. It was
started to commercialize results based on 20 years of research on catalysts,
fuel processors, and fuel technology. The research has resulted in several
patented solutions that, in turn, form the basis for the company's product
series consisting of complete fuel processors, advanced reactors, and highly
efficient, stable catalysts. In the beginning of 2007, Helbio's patent portfolio
consisted of three patents and three patent applications. Its market consists
primarily of fuel cell manufacturers and companies with biogas-producing plants.

Helbio currently has eight employees, each with considerable experience from the
energy sector. Among the key employees are:
- Xenophon E. Verykios, Professor of Chemical Engineering at the University of
Patras. More than 25 years experience in catalyst technology, fuel processes and
fuel cells and founder of Helbio S.A. and Patras Science Park.
- Dimitris K. Liguras, Head of R&D with many years experience from the fuel and
petrochemical industry., B.Sc. in Chemical Engineering from the University of
Illinois; MBA and PhD in Chemical Engineering from the University of California.

Since its founding, the company has been financed by venture capital from
Emporiki Bank and through government funding. In 2006, sales of the company's
products were initiated, and company sales amounted to approximately SEK 1
million. The operating result was a loss of approximately SEK 2 million. Sales
continued in 2007 and resulted in a backlog corresponding to SEK 6 million. The
company's assets were valued at SEK 5 million and debts totaling SEK 0.5
million. An acquisition analysis will be presented in the six-month report for
the fiscal year.

Facts about hydrogen
Hydrogen is one of the key components in the fuel cell society. From an energy
efficiency perspective, hydrogen is, bar none, the best fuel for a fuel cell
system.

Hydrogen does not exist naturally in nature, but must be produced from other
fuels (fossil or non-fossil) or through electrolysis in water. In order for
hydrogen to be considered a viable alternative to oil and other fossil fuels,
more effective methods are required to enable large-scale production.

Up until now, all hydrogen used within industry has been extracted from fossil
fuels, for example, natural gas and petroleum. As technological advancement
continues, hydrogen derived from renewable fuels (such as ethanol and biogas) or
through electrolysis of water is expected to be the primary extraction method.
The advantage comes from the limited or almost non-existent negative
environmental impact and near unlimited access to water."The principles for hydrogen production through a so-called reformation of
different types of hydrocarbons are well-known, but available systems have been
large, expensive, and with unsatisfactory performance and efficiency. Through
its research and development, Helbio has taken this area of technology a large
step forward”, says Jonas Eklind.

Morphic and fuel cells 
The fuel cell operations within the Morphic Group operate within two
subsidiaries: Cell Impact AB and Morphic Business Development AB (MBD). Cell
Impact AB's operations consist primarily of cost-effective production of
so-called "flow plates," one of the most important parts of a fuel-cell system.
In 2006 and 2007, several important cooperation agreements have been signed with
large operators within the automotive, laptop computer, and consumer electronics
industries. Cell Impact currently produces test series of flow plates for fuel
cells for, among other things, vehicles, power generators, mobile electronics
and laptop computers. The test series are meant to adapt the client's own flow
plate design in preparation for possible mass production in Cell Impact's
production facilities.

At MBD, complete energy systems are being developed based on fuel cells combined
with different renewable energy technologies. Since autumn 2005, MBD has been
conducting a comprehensive development project with a premise to combine fuel
cells with wind power. The purpose is to enable a stable and safe production of
electricity, independent of the general electricity grid. The system consists of
an energy converter and fuel cells that are combined with own-developed, smaller
wind turbines. The first pilot facility has been installed and is being
evaluated in Karlskoga.

The use of a reformer as a first stage in a fuel-cell system enables efficient
production of electricity and heat from a number of renewable hydrocarbons, for
example natural gas and bio-alcohols (methanol and ethanol) but also from
present fuels such as fossil gases, gasoline, kerosene, and diesel. Within a
short period of time, energy systems such as these can be an environmentally
friendly and more efficient alternative to gasoline and diesel-run generators.
Even the possibility of using locally produced agricultural biogas for producing
electricity and heat attracts a great deal of attention, as well as the
possibility to make use of the large amounts of energy generated in the form of
methane at all communal waste facilities and that currently constitute a serious
environmental problem.

Development and commercialization of energy systems based on fuel cells in
combination with reformers are a strategic priority for Morphic and this
acquisition is a clear route in this strategy.

Johannes Falk, Information and Investor Relations Manager, Morphic Technologies
AB
Phone: +46 (0)706- 76 73 93, E-mail: johannes.falk@morphic.se.

Morphic Technologies is a Swedish industrial group that specializes in energy
systems for renewable electricity production as well as resource-light
production techniques for efficient component manufacture. The operations are
located in Karlskoga, Filipstad, Kristinehamn and Göteborg, Sweden. The
Company's class B shares are listed on the Stockholm Stock Exchange's trading
site, First North, with Remium Securities as Certified Advisor. For more
information, see www.morphic.se

DISCLAIMER: THIS DOCUMENT IS A TRANSLATION FROM THE SWEDISH ORIGINAL. NO
GUARANTEES ARE MADE THAT THE TRANSLATION IS FREE FROM ERRORS.