Qualified Audit Report - Morphic Reports Former Directors to Police

Qualified Audit Report - Morphic Reports Former Directors to Police

After examining the year-end financial statement for the financial year 2008 the
auditor of Morphic Technologies AB has today submitted a quali¬fied audit
report. The auditor recommends that the company's former Chairman, Peter Enå,
and the former Director Kurt Dahlberg are not to be released from liability at
the company's Annual General Meeting on May 27, 2009. Following the discoveries,
the company will today report the two former Directors to the police for further
investigation.

“Morphic's Board of Directors and management take a very serious view of what
has occurred and will report the discoveries to the Swedish Economic Crime
Authority for further investigation. The persons concerned no longer work for
the company. Our internal controls and audit activities have proved effective,”
Martin Valfridsson, President and CEO of Morphic Technologies AB, says

In the course of the audit for the financial year 2008 discoveries have been
made which suggest that invoices issued to Morphic Technologies AB (publ)
(“Morphic”) by a com¬pany called Sky Raider AB do not accurately reflect actual
business events. Sky Raider is controlled by Dan Borgström, who is also the
founder of Aerodyn AB, a wholly owned Morphic subsidiary. The invoices total
about SEK 1m and were settled by Morphic at the request of the then Chairman,
Peter Enå. According to Peter Enå, the basis for the invoices was that he, on
behalf of Morphic but without the knowledge of the CEO, had purchased consulting
services from Sky Raider to an extent that justified the fees charged. However,
Morphic has subsequently not found any basis for con¬sulting assignments
performed by Sky Raider that would justify the fees. 

It has also emerged that in March 2009 Kurt Dahlberg signed an agreement on
behalf of Morphic under which Dan Borgström became an employee of Morphic
retroactively with effect from October 1, 2008. However, Morphic's former CEO,
Jonas Eklind, has stated that Dan Borgström was not an employee of Morphic when
Eklind left Morphic on October 28, 2008.

An internal control relating to Morphic's Italian subsidiary, Exergy Fuel Cells,
has fur¬thermore revealed accounting vouchers showing that Exergy Fuel Cells has
paid out about SEK 3m to a Greek company that Morphic's Board has on several
occasions declined to acquire but in which several executives of Morphic's
foreign subsidiaries and related parties to Morphic's and Sky Raider's owners
are shareholders. Informa¬tion provided to Morphic's auditor suggests that the
relationship between the two companies was initiated by Kurt Dahlberg. 

In view of the above and other discoveries made in the course of the work on the
year-end financial statement, Morphic's auditor has today submitted a qualified
audit report which recommends that Peter Enå and Kurt Dahlberg, who both had
strong positions and operative roles in Morphic, are not be released from
liability at the AGM on May 27, 2009. 

Morphic has previously announced that Peter Enå and Kurt Dahlberg have left
their duties in Morphic, with the exception of their personal assignments as
members of Morphic's Nominating Committee for the 2009 AGM.

“The Board has not been able to work effectively and has been affected by
turbulence and differing opinions on the management and future orientation of
the company.  However, there is now good order in the company and understanding
between the Board and operational management,” Peter Ekenger, Acting Board
Chairman, says.

For more information, please contact:
Johannes Falk, Executive Vice President, Corporate Strategy & Investor
Relations, Morphic Technologies AB (publ)
Phone: +46 (0)70-676 73 93
E-mail: johannes.falk@morphic.com

This is Morphic
Morphic is a Swedish engineering group operating in the areas of fuels cells and
wind power. The Group has about 200 employees and conducts operations in six
countries - Sweden, Norway, Japan, Greece, Italy and Switzerland. Morphic
Technologies' B shares have been listed on the OMX Nordic Exchange since March
4, 2008, and the number of shareholders is about 30,500.