MEMPHASYS LIMITED. — Board/Management Information 2011

Oct 9, 2011

==> picture [182 x 23] intentionally omitted <==

==> picture [182 x 23] intentionally omitted <==

==> picture [182 x 23] intentionally omitted <==

==> picture [182 x 23] intentionally omitted <==

Monday, 10 October 2011

Dear Shareholder,

It is with great pleasure that I write to update you on recent operational and Board developments at NuSep (ASX: NSP).

Your Board has always had a clear plan to build a profitable and robust company. This plan was articulated at the November 2010 Annual General Meeting and specifically included:

• a) Developing a stable funding base for the company through increased sales;

• b) A renewal of the Board with the emphasis on supporting the talent we already have;

• c) To diversify the current business with a solid portfolio of new products;

• d) The implementation of the PrIME technology in plasma fractionation with the first plasma fractionation plant to be built in Singapore; and

• e) The commercialisation of the SpermSep technology.

All of these initiates are aimed at achieving the overall goal of becoming a top 300 ASX Company. A number of these initiatives have now come to or are near fruition.

Board Renewal

At the AGM in November 2010 I advised Shareholders that NuSep had agreed to undertake a Board review with the objective of bringing on new Directors with additional skills to help the Company enter the therapeutic plasma fractionation market. Further, at the February 2011 EGM I advised Shareholders that we were completing the Board review which identified financial, deal making and information technology as three skill sets NuSep should add to complement and enhance the existing talent of the Board. At the time I also noted that we anticipated bringing these new Directors by the next AGM.

Since February 2011, we have interviewed an extensive number of candidates, many of whom expressed an interest in joining the Board. Having completed this evaluation process and the recent Share Purchase Offer (SPO) fund raising, we are now in a position to advise Shareholders that we have appointed 3 new Directors to the NuSep Board. These new Directors bring a wealth of experience on the financial, deal making and industry side and will help NuSep achieve its goal of becoming a top 300 ASX company.

Below is a summary of each of the new Directors:

John O’Connor

John has over 30 years experience in the financial markets. He has worked for and run a number of Stockbroking organisations, both in Australia and the US. John is familiar with the Biotech sector having worked with several Biotech companies including the Novogen group.

NuSep Holdings Ltd Postal Address Contact Details E info@nusep.com 324 Burns Bay Road P.O. Box 823 P +612 8415 7300 W nusep.com Lane Cove NSW 2066 Lane Cove NSW 1595 F +612 8415 7399 ABN 33 120 047 556

==> picture [182 x 23] intentionally omitted <==

==> picture [182 x 23] intentionally omitted <==

==> picture [182 x 23] intentionally omitted <==

==> picture [182 x 23] intentionally omitted <==

David Roffe

David has over 25 years experience in the Biomedical field including running the information systems of a major Australian hospital group. David was a Director of Gradipore, retiring in 1997, and was instrumental in Gradipore focusing on the PrIME process. David also has extensive knowledge in the rollout of complex medical software such as NuSep’s ProteoIQ software.

Ward Wescott

Ward has over 30 years experience in the finance market including over 10 years working for large US banks in Asia including Citibank. Ward has extensive contact throughout the Asian markets, particularly on the deal side. Over the last 15 years Ward was an early stage formative partner in Balmain Commercial and helped build this into one of Australia’s largest property finance organisations. Ward will also be assuming the role of Chairman of the Audit Committee.

Operational update for NuSep

Your Board and Management have been focussed on strengthening the performance of various business divisions in the Company. Actions have included;

• a) The settlement of the patent litigation with Thermo Scientific resulting in a US$850,000 contract for the supply of all our analytical gels;

• b) The recruitment of Distributors in Australia, Europe and Asia for the sale of our Gels;

• c) A revised marketing strategy for the ProteoIQ with resulting consultancy contracts which may be worth up to US$400,000; and

• d) Negotiations to distribute other laboratory consumables that complement NuSep’s products.

The Singapore Plasma Fractionation Plant

Since the EGM in February 2011, the Company has worked tirelessly on establishing the Singapore plasma fractionation facility and raising the S$14m (A$11m) necessary to make the Singapore plasma fractionation facility a reality. I can now report that we are completing the first phase of this fund raising, which has come from Singaporean investors and the Singapore Government. Further, we have made great strides on the operational front having employed senior personnel from the Singapore HSA (equivalent of the Australian TGA) to head up our regulatory side and a senior therapeutic production Director.

In addition to the above developments the PrIME process was recently presented to the Blood Safety Committee of the World Health Organisation (WHO) as the process that should be adopted by all third world countries. This was an independent presentation undertaken by the Head of the Blood Services Group of the Health Sciences Authority of Singapore. In part this form of third party promotion explains the high level of interest NuSep is experiencing from a number of countries in Asia including the Philippines, where we have signed a LOI with Unilab.

NuSep Holdings Ltd Postal Address Contact Details E info@nusep.com 324 Burns Bay Road P.O. Box 823 P +612 8415 7300 W nusep.com Lane Cove NSW 2066 Lane Cove NSW 1595 F +612 8415 7399 ABN 33 120 047 556

==> picture [182 x 23] intentionally omitted <==

==> picture [182 x 23] intentionally omitted <==

==> picture [182 x 23] intentionally omitted <==

==> picture [182 x 23] intentionally omitted <==

All of this activity in Asia has reinforced the Board’s view that the Company has to aggressively pursue the rollout of the PrIME process, starting in Singapore. To put this into perspective for Shareholders NuSep has developed a PrIME process franchise model based on a 50,000L facility. This model is budgeted to generate A$15m pa of profit per 50,000L facility and each country will require at least one plant. The budgeted IRR for this project is 32%.

I will provide a further update on the PrIME process developments at the November 2011 AGM.

Clearly, the rollout of the PrIME process will have a significant impact on the value of NuSep. Fundamental changes to a company’s direction that are posed by opportunities such as the PrIME require bold actions as they inevitably change the fabric of the Company. The Board realised this in November 2010 and has been aggressively actioning the steps necessary to grab this opportunity since then.

SpermSep

Prof John Aitken has continued to develop the SpermSep. These developments have resulted in a further 3 research articles that show a positive reduction in DNA damage when using the SpermSep relative to the existing processes. There is further work to be done, and NuSep will sign a new development contract with the University of Newcastle to assist in this development and the pending clinical trials. The Board expects to fund this project and the associated clinical trial via the exercise of the recently approved 15¢ share options.

Finally, I would like to thank the current Non-Executive Directors, William Spee and Iain Sorrell, who have worked tirelessly with the Managing Director, Hari Nair and myself to grasp the opportunity offered by the PrIME process. I would also like to thank William Spee for Chairing the Audit Committee over the last few years. This has been a tough period and it has only been through the focused and concerted effort of the entire Board that we have been able to bring the PrIME process to reality.

Yours sincerely,

==> picture [101 x 64] intentionally omitted <==

John Manusu Executive Chairman

NuSep Holdings Ltd Postal Address 324 Burns Bay Road P.O. Box 823 Lane Cove NSW 2066 Lane Cove NSW 1595

Contact Details E info@nusep.com P +612 8415 7300 W nusep.com F +612 8415 7399 ABN 33 120 047 556