CYCLOPHARM LIMITED — Capital/Financing Update 2012

Nov 8, 2012

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9 November 2012

Dear Shareholder

cyclo medica molecular imaging techne gas Cyclopharm Ltd ABN 74 116 931 250 Bldg 75 Business & Technology Park New Illawarra Road Lucas Heights NSW 2234 Australia POB 350 Menai Central NSW 2234 T 61 2 9541 0411 F 61 2 9543 0960 www.cyclopharm.com.au

PRO- RATA ENTITLEMENT OFFER

Cyclopharm Limited ( Company ) recently announced a capital raising comprising a fully underwritten 1 for 4 renounceable pro-rata entitlement offer ( Rights Issue ) to raise up to approximately A$2.1 million before costs.

The net proceeds of the capital raising will go funding the operating costs of Cyclopet, support the legal proceedings Cyclopet has commenced against the Australian Nuclear Science and Technology Organisation and to fund the commencement of the Technegas clinical trial in the United States. While the market for products manufactured by Cyclopet has been encouraging in 2012, competition from government owned enterprises requires additional capital to support this venture.

The United States Food and Drug Administration ( FDA ) clinical trial has commenced with the first installation in October this year. The FDA clinical trial costs are estimated to cost approximately US$4.0 million in total with expenditure of US$0.8 million expected within the next 12 months. The balance of the FDA clinical trial costs is expected to be funded through a subsequent capital raising next year.

Details of the Rights Issue

Under the Rights Issue the Company will issue up to 11,625,683 shares at A$0.18 per share.

Eligible Shareholders may also apply for new shares in excess of their entitlement, although any application for additional new shares may be scaled back at the Company's discretion.

Underwriting

The Rights Issue is fully underwritten by CVC Managers Pty Limited ( Underwriter ).

Eligible Shareholders

The Rights Issue will be offered to all shareholders of the Company with a registered address in Australia and New Zealand, at 7.00pm (Sydney time) on 19 November 2012 ( Eligible Shareholders ).

Ineligible Shareholders

The Company regrets that, having considered the number of shareholders with registered addresses outside Australia and New Zealand ( Ineligible Shareholders ), the number and value of the shareholdings held by Ineligible Shareholders, and the costs of complying with the laws and any requirements of any regulatory authority in each applicable jurisdiction, it will not offer the Rights Issue to Ineligible Shareholders.

Sale of Entitlements

The Rights Issue will be renounceable, which means that entitlements can be sold or otherwise transferred.

The Company will appoint a nominee to be issued with, and arrange for the sale of, the entitlements that would otherwise have been offered to Ineligible Shareholders' and to account to Ineligible Shareholders for the net proceeds of sale. The nominee will sell those entitlements and, if they are sold, send the proceeds of the sale (if any), net of expenses, to Ineligible Shareholders.

Important dates

Event	Date
Announcement of Rights Issue	Friday 9 November 2012
Existingsharesquoted‘ex’rightsRights trading commences	Tuesday 13 November 2012
Record date	7.00pm(Sydneytime)Monday 19 November 2012
Despatch offer booklet and entitlement and acceptanceform to ShareholdersOffer opens	Friday 23 November 2012
Rights trading ends	Friday 30 November 2012
Offer closes	5:00pm (Sydney time) Friday7 December 2012
Issue and allotment of sharesHolding statements despatched	Friday 14 December 2012
Normal trading resumes	Monday 17 December 2012

The dates above are indicative only and subject to the Listing Rules and the Corporations Act, the Company reserves the right to change any date, including to extend the closing date or to close the offer early without prior notice.

The Directors thank you for your ongoing support of the Company.

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James McBrayer Managing Director +612 9541 0411