MEMPHASYS LIMITED. - Capital/Financing Update 2008

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For an offer of up to 500,000 14% Converting Notes at an issue price of $10 per Converting Note to raise up to $5 million with priority given to current Shareholders.

This is a replacement Prospectus and replaces the prospectus lodged by the Company with ASIC on 8 April 2008.

This 14% Converting Notes issue has been underwritten by the Directors up to $1,000,000.

This Prospectus is important and requires your immediate attention. It should be read in its entirety. If you do not understand any part of this Prospectus, or you are in doubt as to how to deal with it, you should consult your accountant, stockbroker, solicitor or other professional adviser.

Important Notice

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INDEX

Section	Page
Chairman’s Letter	6
1. Details of the Offer of 14% Converting Notes	8
2. Purpose of this Offer and Recent Company Developments	11
3. Summary of 14% Converting Note Terms	15
4. Allocation of Company’s Funds	17
5. Some Risk Factors to Consider	18
6. Capital Structure	22
7. Financial Information	23
8. Information Deemed to be Incorporated in this Prospectus	24
9. Additional Information	27
10. Definitions	34
CORPORATE DIRECTORY

Directors

Mr Nicholas Caré (Chairman, Director) Mr John Manusu (Director, Managing Director, CEO) Dr Choon Huat Lee (Director) Dr Chenicheri Hariharan Nair (Director) Mr Iain Howard Sorrell (Director)

Company Secretary

Mr Prakash Patel

Australian Company Number 120 047 556

Registered and Principal Office

22 Rodborough Road Frenchs Forest NSW 2086 Telephone: +61 2 8977 9000 Facsimile: +61 2 8977 9099

Share Registry*

Registries Limited Level 7, 207 Kent Street Sydney NSW 2000 Telephone: +61 2 9290 9600 Facsimile: +61 2 9279 0664

This entity has not been involved in the preparation of any part of this Prospectus. Its name is included for information purposes only .

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

TIMETABLE OF IMPORTANT DATES*

Prospectus lodged with ASIC	14 April 2008
Offer Opens	22 April 2008
Last day for acceptances and Application money payment	14 May 2008
Extraordinary General Meeting to approve the 14% Converting Notes	30 May 2008
Allotment of the 14% Converting Notes	3 June 2008
Dispatch of holding statements	3 June 2008
Quotation of Converting Notes on ASX	3 June 2008

Investors are advised that this is an indicative timetable only. The Company (in consultation with the ASX, if necessary) reserves the right to change the dates without prior notice. This indicative timetable does not apply to the placement of any shortfall.

IMPORTANT NOTICE

This Prospectus is dated 14 April 2008 and is a replacement which replaces the prospectus lodged with ASIC on 8 April 2008. Neither ASIC nor ASX take responsibility for the contents of this Prospectus.

No securities will be issued on the basis of this Prospectus later than 13 months after 8 April 2008.

This document is important and it should be read in its entirety. Your investment decision in relation to this Offer should be based upon the information contained in this Prospectus and disclosures made to the market by the Company. If in doubt, you should consult your stockbroker, solicitor, accountant or other professional adviser without delay. Neither the Company nor any of its Directors or any other party associated with the preparation of this Prospectus guarantee that any specific objective of the Company will be achieved or that any particular performance of the Company or of its Shares (including the 14% Converting Notes offered by this Prospectus) will be achieved.

Some words in this Prospectus have defined meanings. The glossary in Section 10 of this Prospectus contains these meanings.

Although the Company has issued this Prospectus in accordance with the provisions of the Corporations Act applicable to prospectuses, the Company specifically notes that the Offer does not take into account your specific investment needs or objectives. The Company urges you to read this Prospectus in its entirety before making an application for the 14% Converting Notes. In particular, the Company draws your attention to those matters identified by the Company as representing risks to the Company (as set out in Section 7 of the IPO Prospectus and Section 5 of this Prospectus). In the context of your personal requirements and the risk factors, the Company recommends that you seek professional guidance from your stock broker, solicitor, accountant or other professional adviser prior to making the decision to apply for the 14% Converting Notes.

For persons accessing the on-line version of the Prospectus, the Offer is available to such persons accessing the Prospectus from within Australia only. The Prospectus may be accessed on the internet at www.nusep.com. A person who gives another person access to the Application Form must at the same time and by the same means give the other person access to the Prospectus (and any supplementary prospectus). The Company will make available a paper copy of the electronic Prospectus and Application Form if requested and at no charge.

Exposure Period

The Corporations Act prohibits the processing of applications and issue of the 14% Converting Notes in the seven day period after the date of lodgement of the Prospectus with ASIC (Exposure Period). The Exposure Period may be extended by ASIC by up to a further seven days. No applications will be processed and no 14% Converting Notes will be issued during the Exposure Period. The Prospectus will be made generally available during the Exposure Period at www.nusep.com.

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

Short Form Prospectus

This Prospectus is a short form prospectus issued in accordance with Section 712 of the Corporations Act. This Prospectus does not of itself contain all the information that is generally required to be set out in a document of this type but incorporates all other necessary information by reference to information contained in the IPO Prospectus lodged with the ASIC on 14 December 2006 and the 2007 Short Form Prospectus lodged with ASIC on 8 August 2007 (see Section 8 of this Prospectus (Information Deemed to be Incorporated in Prospectus) for further details).

In referring to the IPO Prospectus and the 2007 Short Form Prospectus, the Company:

(a) identifies the IPO Prospectus and the 2007 Short Form Prospectus as being relevant to the offer of 14% Converting Notes under this Prospectus and containing information that will provide investors and their professional advisers with information to assist them in making an informed assessment of:
(i) the rights and liabilities attaching to the Shares;
(ii) the capacity of the Company to issue the Shares; and
(iii) the assets and liabilities, financial position and performance, profits and losses and prospects of NuSep;
(b) refers investors and their professional advisers to Section 8 of this Prospectus which summarises the information in the IPO Prospectus and the 2007 Short Form Prospectus deemed to be incorporated in this Prospectus;
(c) informs investors and their professional advisers that they are able to obtain, free of charge, a copy of the IPO Prospectus and the 2007 Short Form Prospectus by contacting the Company at its registered office during normal business hours during the Offer period; and
(d) advises that the information in the IPO Prospectus and the 2007 Short Form Prospectus will be primarily of interest to investors and their professional advisers or analysts.

Privacy

If you apply for Shares, you will provide personal information to the Company and the Share Registry. The Company and the Share Registry collect, hold and use your personal information in order to assess your Application, service your needs as an investor, provide facilities and services that you request and carry out appropriate administrative functions.

All personal information will be collected in accordance with the National Privacy Principles as set out in the Privacy Act 1988. The law requires that some of the information is required to be collected. If you do not provide the information requested, your Application may not be able to be processed.

The Company and Share Registry may disclose your personal information for purposes related to your investment to their agents and service providers (including the ASX for the purpose of confirming compliance with the Listing Rules) or as otherwise authorised under the Privacy Act 1988.

Under the Privacy Act 1988, you may request access to your personal information held by (or on behalf of) the Company or the Share Registry. You can request access to your personal information by telephoning the Company or writing to the Company or the Share Registry.

DISCLAIMER

No person is authorised to give any information or to make any representation in connection with this Offer, which is not contained in this Prospectus. Any information or representation not so contained may not be relied upon as having been authorised by the Company in connection with this Offer.

The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and therefore any person who comes into possession of this document should inform themself about and observe any Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

such restrictions. Any failure to comply with these restrictions may constitute a violation of applicable securities laws.

No action has been taken to register or qualify the 14% Converting Notes, or otherwise to permit a public offering of the 14% Converting Notes offered under this Prospectus in any jurisdiction outside of Australia.

This Prospectus does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make such an offer.

Forward looking statements

This Prospectus includes forward looking statements based on the current expectations of the Company about future events. The prospective information is, however, subject to risks, uncertainties and assumptions that could cause actual results to differ materially from the expectations described in such prospective information. Factors that may affect future financial performance include those risks identified in Section 7 of the IPO Prospectus and Section 5 of this Prospectus, assumptions not proving correct and other matters not currently known to, or considered material by the Company. Statements of intent in relation to future events should not be taken to be a forecast or prediction that those events will occur. Actual events or results may differ materially from the events or results expressed or implied in any forward looking statement and deviations are both normal and to be expected. None of the Company, its officers or any person named in this Prospectus or involved in the preparation of this Prospectus makes any representation or warranty (either express or implied) as to the accuracy or likelihood of fulfilment of any forward looking statement, or any events or results expressed or implied in any forward looking statement. Accordingly, you are cautioned not to place undue reliance on those statements. The forward looking statements in this Prospectus reflect views held by the Company only as at the date of this Prospectus.

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

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Chairman’s Letter

Tuesday 8[th] April 2008

Dear Fellow Shareholders and Potential Investors,

It is with great pleasure that I invite you to subscribe for the 14% Converting Notes described in this prospectus. NuSep will apply to have these Notes listed on the ASX. The proceeds of this capital raising of approximately $5 million will be used to:

Expand sales with a view of achieving profitability on a monthly basis by:

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Expanding the sales and marketing of the precast gels, particularly in the US;
Growing the sales of the MF10 proteomics instrument; and
Expanding NuSep's product range by introducing new and innovative products;
Complete the development and achieve initial sales of the SpermSep CS10 by:

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Undertaking the next clinical trial of the SpermSep CS10 instrument in order to commercialise this unit in the IVF market; and
Completing the development and launch of the SpermSep CS10 instrument for sale in the ICSI market.

NuSep has made significant progress since listing just under a year ago. Major developments include launching the MF10 instrument, achieving profitable gel production rates and completing the initial CS10 SpermSep clinical trials. We have an active product development team who are working on developing a range of new products to be launched over the coming years.

As outlined in our IPO prospectus, NuSep initially concentrated on improving the Gel manufacturing process so that Gel sales could be used to achieve a breakeven position or profits. I am pleased to report that we are well on the way to achieving a breakeven position. Manufacturing pass rates and production volumes are on target and Gel sales have increased significantly. Sales growth has been particularly strong since the appointment of Barry Holman as Vice President of Sales in January 2008. As a result of this sales growth, NuSep has established its own sales and distribution office in Atlanta, US.

The Company is on budget and driving to achieve profitability. However, additional funding is necessary. The Board considers the best way to raise these funds is to offer a 14% Converting Note. Further, in order to minimise the interest expense, the Board has limited the number of Converting Notes to 500,000 on a first come first served basis with priority being given to the Company's current Shareholders.

Individual applications have been limited to a maximum of 1000 Converting Notes ($10,000) but the Company will not issue more than 500,000 Converting Notes. For this reason, the Company will accept applications on a first come first served basis up to a maximum of 500,000

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

Converting Notes with priority being given to Shareholders. Any additional applications will be returned unprocessed.

As a sign of our confidence in NuSep the Directors have agreed to underwrite the Converting Note issue to a maximum of $1million, subject to Shareholder approval. The Directors have done this on the same terms as the recent share purchase offer set out in the 2007 Short Form Prospectus.

It is also the Board’s view that the Company may redeem these Converting Notes before they convert into shares in 3 years time, further reducing the dilutionary effect these Converting Notes may otherwise have. The director's believe this funding approach will enhance shareholder value while enabling the Company to achieve its goals.

This prospectus contains detailed information on the proposed offer of Converting Notes and recent developments in NuSep's business. I recommend you read the prospectus carefully before deciding whether to invest in the Converting Notes. If you have any questions, you should consult your stockbroker, accountant, lawyer or other professional adviser.

Finally, NuSep will hold an Extraordinary General Meeting (EGM) on Friday 30[th] May 2008 to approve the issue of the 14% Converting Notes. We will provide a further update on developments at that meeting and I encourage Shareholders to attend. As a general comment, I have been pleased by the number of Shareholders who have contacted me regarding their investment in NuSep. Our products address niche markets and it is often hard to gain information on these markets. Once again I would like to thank all Shareholders for their continuing support of the Company and look forward to meeting with many of you on Friday 30[th] May 2008.

Yours sincerely,

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Nicholas Caré Chairman

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

SECTION 1 - DETAILS OF THE OFFER OF 14% CONVERTING NOTES

1.1 Offer

This Prospectus is for an offer of up to 500,000 14% Converting Notes at an issue price of $10 per Converting Note to raise up to $5 million with priority given to current Shareholders.

The issue of the 14% Converting Notes is subject to Shareholder approval being given to the issue at the EGM of the Company which is to be held on 30 May 2008.

Applications must be for a minimum of 50 14% Converting Notes ($500) and a maximim of 1000 14% Converting Notes ($10,000). Over-subscriptions may be accepted at the discretion of the Directors.

Priority under the Offer will be given to NuSep's current Shareholders and if the Offer is oversubscribed, the Directors may give consideration to a Shareholder's current shareholding in the Company when allocating the 14% Converting Notes.

Accompanying this Prospectus is an Application Form. Investors can only apply for the 14% Converting Notes on the accompanying Application Form which must be received by the Company with the appropriate payment by 5.00pm AEST on 14 May 2008.

1.2 Purpose of the Offer

If the Offer is fully subscribed, the total number of 14% Converting Notes to be issued by the Company will be approximately 500,000. This will raise approximately $5 million (before costs).

The purpose of the Offer is to provide investors with the opportunity to subscribe for securities in the Company and for Shareholders to subscribe for further securities in the Company.

The proceeds of the Offer will be used to:

1.

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Expand sales with a view of achieving profitability on a monthly basis by:
- Expanding the sales and marketing of the precast gels, particularly in the US;
- Growing the sales of the MF10 proteomics instrument; and
- Expanding NuSep's product range by introducing new and innovative products;
Complete the development and achieve initial sales of the SpermSep CS10 by:

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Undertaking the next clinical trial of the SpermSep CS10 instrument in order to commercialise this unit in the IVF market; and
Completing the development and launch of the SpermSep CS10 instrument for sale in the ICSI market.

A more detailed analysis of the allocation of funds that are received under this Offer is set out in Section 4 of this Prospectus (Allocation of Company's Funds).

The intention to make this Offer was announced to the ASX on 8 April 2008.

1.3 Rights attaching to 14% Converting Notes

Details concerning the rights attaching to the 14% Converting Notes are set out in detail in Section 3 of this Prospectus (Summary of Converting Note Terms).

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

1.4 No Overseas Offer

This document does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make such an offer.

This Offer to subscribe for the 14% Converting Notes is only being made to investors resident in Australia.

The Directors have formed a view that it is unreasonable to make the Offer to persons with a registered address outside Australia after having regard to the cost of complying with the legal and regulatory requirements in foreign jurisdictions.

1.5 Closing Dates

Acceptances must be received by the Company before the close of the Offer at 5:00pm AEST on 14 May 2008, unless varied.

1.6 ASX Listing

Application for quotation of the 14% Converting Notes by ASX will be made by the Company within seven (7) days of the date of this Prospectus.

If the 14% Converting Notes are not admitted to quotation within three (3) months after the date of this Prospectus, or such longer period as is permitted by the Corporations Act, none of the 14% Converting Notes offered by this Prospectus will be issued. In that circumstance, all applications will be dealt with in accordance with section 724 of the Corporations Act.

1.7 Date of Issue of 14% Converting Notes

The 14% Converting Notes will not be issued until the ASX has granted permission for the 14% Converting Notes to be quoted (unless ASIC has granted an exemption permitting the issue), the proceeds of the Offer have been received by the Company and the issue has been approved by Shareholders.

The 14% Converting Notes are expected to be issued on 3 June 2008 with holding statements issued by 3 June 2008. All Application money will be held in trust for Applicants until the 14% Converting Notes are issued or, if there is no issue, until the money is returned to Applicants. A trust account will be established and funds deposited will be kept in trust on behalf of each Applicant.

Interest earned on the Application money will be for the benefit of NuSep and will be retained by NuSep even if the issue of the 14% Converting Notes does not take place.

1.8 Application monies held in trust

Until the 14% Converting Notes are issued under this Prospectus, acceptance monies will be held on trust in a separate bank account, which has been opened only for this purpose.

1.9 Market Prices of NuSep Shares

As set out in the table below, the lowest and highest closing market sale prices of Shares on the ASX during the 3 months immediately preceding 8 April 2008 were AUS$0.8 and AUS$0.18. The table also sets out the last sale price for Shares on the ASX prior to the date of this Prospectus.

	Share Price	Date
Highest	18¢	3rdJanuary 2008
Lowest	8¢	7thApril 2008
Last Price	8¢	7thApril 2008

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

1.10 Payment

The completed Application Form must be accompanied by payment in full at the rate of $10 per Converting Note. The minimum such Application must be for $500 (50 14% Converting Notes) and the maximum Application for $10,000 (100 14% Converting Notes). Payments will only be accepted in Australian currency. Refer to the Application Form for further details on payment requirements.

1.11 Underwriting

The Directors have underwritten the first $1 million of the Offer.

A summary of the Underwriting Agreement is set out in Sections 9.5 and 9.7.

1.12 Minimum and Maximum Application

The minimum application is for 50 14% Converting Notes (i.e. $500) and the maximum application is for 1000 14% Converting Notes (i.e. $10,000).

Should the Company not raise the full amount proposed by the Prospectus, it is not possible to state with any degree of certainty which component of the intended budget will be implemented by the Company.

1.13 Over-subscriptions

Over-subscriptions will be accepted at the discretion of the Directors.

1.14 Taxation

The tax treatment and consequences of this Offer will vary depending on the particular circumstances of the Applicant. The Company accepts no liability or responsibility in relation to any taxation consequences connected to the 14% Converting Notes. Therefore regarding the appropriate tax treatment that applies to this Offer, it is the responsibility of any Applicant who makes an Application to satisfy themselves by consulting their own professional tax advisors prior to investing in the 14% Converting Notes.

1.15 Action by potential investors

If you are in any doubt as to what you should do in relation to this Offer, you should contact your accountant, stockbroker, solicitor or other professional adviser.

You should refer to the Application Form for instructions for completion of the enclosed Application Form.

Uncertificated holdings will be entered on the CHESS register as soon as practicable after the close of the Offer and the issue of the 14% Converting Notes. Notification of issue and allotment of the 14% Converting Notes will be posted to Noteholders at their address appearing on the Application Form.

The Company will apply to participate in CHESS. All ASX trading in the 14% Converting Notes after they are quoted will be settled through CHESS. The Share Registry will operate an electronic issuer-sponsored sub-register and CHESS sub-register. Both of these sub-registers will constitute NuSep's principal share register. NuSep will provide each Noteholder with a notice (Notice) that sets out the number of the 14% Converting Notes issued to the Noteholder. The Notice will also inform Noteholders of their Security Reference Number (SRN). Noteholders who are CHESS participants will receive an explanation of sale and purchase procedures under CHESS with their Notice.

1.16 Costs of the Offer

The costs of the Offer are estimated at approximately $130,000.

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

SECTION 2 - PURPOSE OF THIS OFFER AND RECENT COMPANY DEVELOPMENTS

Purpose and Application of Funds Raised Under this Prospectus

This Prospectus has been prepared to raise $5 million through the issue of up to 500,000 14% Converting Notes in NuSep. The funds raised under this Prospectus will be used for working capital purposes and to enable NuSep to undertake its business plan by:

Expanding sales with a view of achieving profitability on a monthly basis by:

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Expanding the sales and marketing of the precast gels, particularly in the US;
Growing the sales of the MF10 proteomics instrument; and
Expanding NuSep's product range by introducing new and innovative products;
Completing the development and achieving initial sales of the SpermSep CS10 by:

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Undertaking the next clinical trial of the SpermSep CS10 instrument in order to commercialise this unit in the IVF market; and
Completing the development and launch of the SpermSep CS10 instrument for sale in the ICSI market.

At the date of this Prospectus, the Board does not believe that it is possible or prudent to state an exact allocation of the funds raised among these objectives.

Product Markets

NuSep was established with innovative products and technologies to compete in the following markets:

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Precast Electrophoresis Gels; Laboratory separations, particularly in the Proteomic market; Supply of purified research grade biological reagents; and

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Assisted Reproduction Technology, particularly in the sperm separation market.

Precast Gels

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The Market

The global Precast Electrophoresis Gels market was estimated to be US$100 million in 2004, of which US$55 million was in the US. The US$55 million represents the sales of approximately

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

6.2 million gels[1 ] per anum. This US$55 million market represents 55% of all gels used in the US each year.

Developments

Over the last 12 months NuSep has improved its Gel products to the point where they are now recognised as equal or better than our competitors by a number of our customers. During the last 6 months NuSep's focus has been on improving Gel production volumes and pass rates. The Company achieved a monthly production rate of 35,000 Gels in December 2007 up from approximately 20,000 Gels per month in July 2007. In February 2008 this production rate increased to over 50,000 Gels per month.

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As sales increase, NuSep can further increase production by running up to 3 production shifts per day. During the last 6 months the Gel pass rate has also improved and is now consistently over 75%.

Since late last year, sales have also improved as customers adopt the NuSep Gels. Since January 2008 direct sales of the Gels in the US have started to grow

following the appointment of Barry Holman as Vice President of Sales. Direct sales will be further boosted with NuSep’s Atlanta, GA US facility becoming fully operational at the end of March 2008.

NuSep opened this facility because the cost of the outsourced US distribution facility reached the point where it is now less expensive for the Company to establish and run its own facility. In addition, by having our own people on the ground, our US customers will receive a better level of service, at both the technical level and in the delivery of their orders. It is expected that this will further accelerate the US Gel and MF10 sales.

Gel sales under the Pierce brand have more than trebled over the last 3 months and forward orders indicate that this level of sales will continue.

In order to support this sales growth the Company has decided to establish a customer service function in both the US and Australia. NuSep is also planning to release new Gel products later this year. These initiatives will help boost sales and also reinforce NuSep’s reputation as a market innovator in the field of BioSeparations.

Projections

As an indication of the sales growth NuSep is experiencing, the Company has grown its US Gel market share from less than 1% in January 2007 to approximately 5% today. Most of this growth has come in the last 4 months. The Company is targeting to grow this market share to 20% or 900,000 Gels per annum by 30 June 2010.

MF10

The Market

The initial MF10 target market is the Proteomics sample preparation market. This market is currently worth $59 million per anum[2] . The Proteomics market has been growing rapidly for some time, particularly since the completion of the human genome in 2003.

1 Phortech International, The 2004/05 US MSPPSA Electrophoretic Equipment & Media Market, page 92. Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

The goal of the human genome project was to sequence the entire 3 billion base pairs (chemical components of DNA), which make up the human body. The human genome contains approximately 25,000 genes. While the genes are associated with different disease states it is the proteins that turn the genes on or off. As such, scientist are now looking at how the proteins these genes produce work. Each gene is associated with multiple proteins and there are more than 500,000 proteins derived from the 25,000 human genes.

The MF10 enables scientists to separate and prepare their samples so they can carry out further analysis on these proteins. This sample preparation part of the Proteomics market has been viewed as a bottleneck for some time and is targetted to grow from $59 million in revenue in 2007 to $103 million by 2011. NuSep’s MF10 device addresses this market. The biggest driver of sample preparation products are biopharmaceutical companies seeking new protein biomarkers or protein targets that form the basis of new drugs.

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Developments

In February 2008, NuSep officially launched the MF10 instrument at two Proteomics conferences the first in Australia and the second in the US. The MF10 offers Proteomic scientists unique separation capabilities by, for example, speeding up the processing of protein samples for analysis by mass spectrometry.

Our sales team has already begun the follow up process and a number of demonstrations have already occurred. Sales of the MF10 are expected to generate income from both initial instrument sales and ongoing consumables sales. The MF10 compliments our current Gel products and most of the sales leads from these conferences were for both the Gels and the MF10 unit.

Projections

NuSep expects to deliver its first shipment of MF10’s to customers in May 2008. The Company is pleased with the launch of the MF10 and expects to gain a significant market share over the next few years. NuSep has a target to sell 300 MF10 instruments in the 2008/2009 financial year and 600 in the 2009/2010 financial year. Achievement of the 2009/2010 sales would give NuSep a 15% market share of the Proteomics sample preparation market based on current numbers.

SpermSep CS10

The Market

In Australia, the IVF market is worth around $170 million and in the US $3 billion[3] . Sperm separation is a fundamental aspect of all ART treatments, including IVF. NuSep estimates that the SpermSep CS10 instrument represents approximately 1 - 2% of the above IVF markets. In addition there were approximately 1 million ART cycles undertaken in the world in 2006[4] . Based on this, NuSep estimates the total SpermSep consumables market at $A45 million per

3 ‘Inside the Secret World of IVF, The Age, 6 May 2005 (Aus statistic); Deborah Spar, The baby business, 2006 (US statistic). 4 International Committee for Monitoring the Assisted Reproductive Technologies (ICMART) 2006 report.

2 Jonathon Witonsky, Frost & Sullivan as reported in Genetic Engineering & biotechnology News, 15/9/07, p18.

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

annum. This $45 million consumables market is in addition to the SpermSep instrumentation market.

Developments

NuSep recently completed its first clinical trial of SpermSep at the Westmead Fertility Centre as announced to the market on 14 March 2008. This trial showed that SpermSep is as safe as the existing method used to isolate sperm for ART. Furthermore, there were 3 pregnancies in the SpermSep arm of the trial and none in the existing process arm. Two participants in this trial have now given birth to healthy babies, one boy and one girl. The third is due later in the year. This project is supported by a $2.2 million Australian Government Commercial Ready Grant.

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The Company now intends to test the final production version of SpermSep and in doing so will seek to:

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Verify that SpermSep produces less DNA damaged sperm in clinical samples; and

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Validate multiple formats of the disposable cartridge.

NuSep is currently finalising the clinical study trial sites. This clinical trial will be a multi-centre study in order to maximise patient recruitment in the shortest possible time. This clinical trial is expected to commence in May 2008 and finish in late 2008 or early 2009. The results of the current and the proposed study will be used to support an application to market SpermSep with the TGA, FDA and other European regulatory authorities.

Projections

NuSep is targetting that the first sales of the SpermSep device will occur in the second quarter of 2009. The Directors believe that there will be demand for the SpermSep unit. This was demonstrated by the number of enquiries generated after a scientific presentation given at an international fertility conference in Barcelona late last year. NuSep is targetting to sell 60 SpermSep CS10 units in the 2008/2009 financial year and a further 200 in the 2009/2010 financial year.

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

	SECTION 3 - Summary of Converting Note Terms

Description of security	Unsecured Converting Notes with a 14% coupon.
Conversion Rate	Each 14% Converting Note converts into 40 fully paid ordinary Shares in NuSep. This gives a conversion price of 25¢ per Share.
ASX Quotation	The 14% Converting Notes will be listed on the ASX subject to the relevant Listing Rules.
Face Value	$10 per Converting Note. The 14% Converting Notes will be denominated in Australian dollars (AUD$).
Coupon	14% per annum payable from the Issue Date in arrears on 31 March and 30 September of each year.
Term	Unless previously redeemed or converted, the 14% Converting Notes will automatically be converted into Shares on 30 September 2011 (Conversion Date). NuSep has no right to convert early but the right to redeem the 14% Converting Notes after the first anniversary of the Convertible Notes being issued at each six month period ending 31 March and 30 September by giving prior written notice to Noteholders (Redemption Dates). After the first anniversary of the Convertible Notes being issued, Noteholders will also have the right to convert their 14% Converting Notes at any time (Noteholder Conversion) but Noteholders have no right to redeem early. If Noteholders do convert their Notes they forgo the interest from the last interest payment date before conversion.
Automatic Conversion	On the Conversion Date, each Converting Note will convert into 40 ordinary Shares in NuSep (giving a conversion price of 25¢ per Share).
Conversion by Noteholder	After the fist anniversary of the Convertible Notes being issued, the Noteholder has the right to convert their 14% Converting Notes into Shares at any time. Each Converting Note will convert into 40 ordinary Shares in NuSep. Noteholders may sell their Notes once they are listed on the ASX.
Early redemption by Company	The Company may redeem the 14% Converting Notes early after the first anniversary of the Convertible Notes being issued on each Redemption Date, in the event of a change of control (e.g. a takeover), tax event or clean up call (which may occur when less than 15% of the Converting Notes remain on issue).
Default Event	If a 'Default Event' occurs, then NuSep must redeem the 14% Converting Notes. Default Eventmeans: (a) NuSep fails to pay the interest payments in accordance with the Converting Note terms; (b) the Shareholders of NuSep resolve in general meeting that NuSep be wound up; (c) a provisional liquidator is appointed to NuSep;

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

	(d) a court makes an order for the winding-up of NuSep (other than an application which is being contested in good faith and is dismissed, set aside or withdrawn within 14 days); (e) an administrator of NuSep is appointed under sections 436A, 436B or 436C of the Corporations Act; (f) NuSep executes a deed of arrangement with its creditors generally; or (g) NuSep's Shares are suspended from trading on the ASX for more than 40 consecutive business days.
Converting Note Adjustments	The number of the 14% Converting Notes shall be adjusted in the circumstances of a reconstruction of NuSep’s issued capital (including consolidation, subdivision or reduction of NuSep’s Share capital).
Ranking	The 14% Converting Notes will constitute unsecured obligations of NuSep and will rank at all times pari passu among themselves and pari passu with all present and future unsecured obligations of NuSep..
Transferability	The 14% Converting Notes will be freely transferable by Noteholders and subject to the 14% Converting Notes gaining quotation on the ASX, the 14% Converting Notes will be tradeable in accordance with the rules of the exchange.
Voting	Except as provided by the Corporations Act and Listing Rules, Noteholders will not be entitled to vote at meetings of ordinary Shareholders of NuSep in relation to the 14% Converting Notes they hold.
No participation in Right Issues and Bonus Issues	Noteholders will not be entitled to participate in Right Issues and Bonus Issues of NuSep unless they convert their 14% Converting Notes before the relevant record date.
Information	Noteholders shall be entitled to receive the same financial information as a holder of Shares. If the 14% Converting Notes are quoted on the ASX, the Noteholders shall receive the same information as is disclosed to the market in accordance with the continuous disclosure obligations of the listing rules of the ASX.

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

SECTION 4 - ALLOCATION OF COMPANY’S FUNDS

The following table shows the proposed allocation of the funds the Company already has and of those to be raised by the Prospectus. The estimates are based on the Offer being fully subscribed.

Current Cash and Subscription Current cash Full subscription Total funds Allocation of Funds Expenses of the Offer Complete the development of SpermSep CS10 Expanding Gels and MF10 sales, marketing and innovation of new Gel products and expanding production capacity Working capital and cash reserves	A$’000 771 5,000
	5,771
	130 1,700 1,500 2,441
	5,771

Although it is the Directors' current intention to use the funds as set out above, they reserve the right to reassess the proposed allocation of the Company’s funds. Those funds may be used to pursue other opportunities that may arise from time to time.

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

SECTION 5 - SOME RISK FACTORS TO CONSIDER

Investment Risks

While the Directors recommend this Offer, investment in the 14% Converting Notes of NuSep offered under this Prospectus should be considered as being speculative. The major risk factors as determined by the Directors are set out below. These represent a summary and should not be regarded as being exhaustive.

Potential investors should carefully consider the following risk factors in conjunction with all the information contained in this Prospectus and carefully assess all associated risks before deciding whether to invest in the 14% Converting Notes. They should also consider their personal circumstances, including financial and taxation circumstances and seek appropriate professional advice before deciding whether to invest in the 14% Converting Notes of NuSep.

The activities of the Company are subject to a number of risks including those which apply to investments generally and those that apply specifically to the business of NuSep. Some of the specific risks can be mitigated by the use of safeguards and appropriate systems and controls, but some are likely to remain outside the control of the Company.

This Prospectus contains certain statements which relate to the future, including forward looking statements related to NuSep’s strategy and financial performance. These forward looking statements are not guarantees of future performance. They involve known and unknown risk factors, uncertainties, assumptions and other important factors, many of which are beyond the control of the Company and its Board.

Neither NuSep nor any other person gives any representation, assurance or guarantee that the results, performance or achievements expressed or implied by the forwarding looking statements will actually happen.

There are a number of risk factors which could adversely affect NuSep’s performance and the value of its Shares and the 14% Converting Notes. The value of securities listed on the ASX can rise or fall depending on a large range of factors, many of which are beyond the identification and control of NuSep.

Potential investors should consider these risk factors before deciding whether to apply for the 14% Converting Notes.

Some of the general matters which may affect the future operating performance of NuSep include, without limitation:

Economic conditions – the performance of NuSep may be significantly affected by changes in economic conditions, and particularly conditions which affect the biotechnology industry. Profitability of the business may be affected by factors such as market conditions, interest rates, inflation and consumer demand;
Geo-political factors – NuSep may be affected by the impact that geo-political factors have on the various world economies or the Australian economy or on financial markets and investments generally or specifically;
Australian and foreign government policies & legislation – NuSep may be affected by changes to government policies and legislation, including those relating to the biotech industry, property, the environment, taxation and accounting regimes and the regulation of trade practices and competition, government grants and incentive schemes;
Share market conditions – NuSep, being a company listed on ASX, is subject to the market forces that influence the broad share market trends and the price of securities of individual

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

companies. Accordingly, assuming that the Converting Notes are granted official quotation on ASX, they may trade on ASX at higher or lower prices than the issue price. Each Applicant should consider whether the Converting Notes are a suitable investment before deciding to invest in the Converting Notes. Any Applicant in doubt about investing in shares should consult their stockbroker, accountant, lawyer or other professional adviser immediately;

Changes in international exchange rates;

The market forces, to which NuSep is subject, that influence broad share market trends and the price of securities of individual companies;

Changes to tariff levels between countries;

Changes to research funding including reductions in life science funding by a Government in a major market that NuSep sells into; and
Other risk factors including those normally found in conducting business, including litigation resulting from the breach of agreements or in relation to employees (through personal injuries, industrial matters or otherwise) or any other cause, strikes, lockouts, loss of service of key management or operational personnel, non-insurable risks, delay in resumption of activities after reinstatement following the occurrence of an insurable risk, acts of terrorism and acts of God and other matters or force majeure events that may interfere with the business or trade of NuSep.

Specific Risks

In addition to the above, there are a number of specific risks concerning a biotechnology company such as NuSep of which potential investors should be aware. The following is not an exhaustive summary, but points to some of the risks that are particular to a biotechnology company. Any one or a combination of such risks could affect NuSep adversely and thus the value of any investment in NuSep.

The Board is unable to speculate as to the extent of such adversity, and thus an investment in NuSep should be regarded as speculative.

Like other biotechnology companies at a similar stage of development, NuSep faces a number of risks, both general and project-specific. Some of the more specific matters which might also affect the future operating performance of NuSep include without limitation:

Technical risks – NuSep has a number of projects that could give rise to products. No assurances can be given that NuSep’s research will give rise to any development of a commercially successful product;
Competitor risks – no assurances can be given that any products that NuSep does produce will successfully compete with other products either currently on the market or expected to enter the market in the future;
Financial risks – the ability of NuSep to implement its business strategy may depend in part on its ability to continue to raise additional funds and/or to secure appropriate partnering or out-licensing arrangements. No assurances can be given that such funding will be available, or that it will be available on terms attractive to NuSep;
Key Employee risks – the future success of NuSep may depend in part on its continued access to highly qualified scientific, technical and managerial personnel. Competition for such staff is intense. Further, much of the intellectual property and developed know-how resides in NuSep’s scientific staff or those under contract. The loss of key staff could have a material adverse effect on NuSep. While NuSep seeks to ensure that the services of key

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

personnel are retained, no assurances can be given that NuSep will continue to retain and attract key staff as required by the business;

Intellectual Property risks – NuSep’s prospects rely fundamentally on its intellectual property portfolio. Any restrictions on NuSep’s rights to use the technology contained in its patents in any jurisdiction will impede or prevent NuSep’s ability to achieve the commercialisation of the relevant technology in those jurisdictions. No assurances can be given that existing or future patents or patent applications which NuSep relies upon will not be challenged in the Courts, nor that any patents granted will withstand any subsequent legal challenge;
Regulatory risks – major changes in regulatory legislation or policy could affect the timing and costs of clinical trials. Although NuSep continues to discuss its clinical development program with appropriate regulatory bodies, no assurances can be given that significant unexpected changes in regulatory legislation or policy will not occur in the future;
Non-performance of significant contracts by other parties;
Failure to achieve sales growth from existing products;
Difficulties or delays in completing product developments or product launches;
Difficulties or delays in receiving regulatory approval or certification for products or processes;
The existence and extent of any competition for the products or processes to be developed by NuSep – particularly from major international biotechnology companies;
The existence of substitute or improved products developed by competing companies;

The success or failure of existing research and development programs of NuSep;

The pace of market development for NuSep products and the costs involved in achieving market penetration and brand awareness;
Change in the markets for the products and processes sold by NuSep;
Patent litigation, including failure of existing patents or failure to gain patent licenses to yet unknown blocking patents; and

Litigation arising from the clinical studies undertaken by NuSep.

Project-specific risks

Required primary endpoint is not met – there is a risk that the primary clinical endpoint for the next CS10 SpermSep clinical trial will not be met, and in this circumstance, the future development of the CS10 SpermSep instrument will need to be re-assessed;
Unexpected severe adverse effects – although no serious adverse effects associated with CS10 SpermSep have occurred to date, the occurrence of severe unexpected adverse effects could have a significant impact upon the future clinical development of CS10 SpermSep;
Supply of material – clinical development of CS10 SpermSep requires a continued supply of material from external manufacturers. Although some stock is already in place, and NuSep continues to work to secure an ongoing supply, unexpected events may interrupt the supply of material and affect the timing and/or cost of the clinical trials; and
Clinical Trial Recruitment risk – a risk that is inherent in all clinical trials is the inability to recruit sufficient patients on time.

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

Specific risks associated with the 14% Converting Notes

Some of the more specific risks associated with an investment in the 14% Converting Notes include without limitation the following:

The market price of the 14% Converting Notes may fluctuate due to various factors including worldwide economic conditions, interest rates, general movements in equity markets and movements in the market price of NuSep's Shares;
Shares issued on the conversion of the 14% Converting Notes will rank equally with existing Shares. Accordingly, the value of the Shares that are issued to former Noteholders on conversion of the 14% Converting Notes will depend on the market price of Shares at the relevant time;
The market for the 14% Converting Notes may be less liquid than the market for Shares;
NuSep expects to pay the interest payments (i.e. coupon payments) on the 14% Converting Notes by using available cash reserves and cash flows from the Company's business operations (if any). If NuSep does not perform as expected, there is a risk that the Company will not have sufficient cash flows to fund the semi-annual interest payments on the 14% Converting Notes. The interest payments on the 14% Converting Notes are not guaranteed by NuSep;
The interest payable on the 14% Converting Notes is fixed at 14% per anum payable semiannually in arrears. Accordingly, no adjustment will be made to the rate of interest paid to Noteholders. However, the market price of the 14% Converting Notes on the ASX may fluctuate due to changes in interest rates generally;
NuSep may redeem the 14% Converting Notes in certain circumstances (e.g. NuSep may redeem the 14% Converting Notes one year after their issue at each six month period ending 31 March and 30 September). There is a risk that the Company will not have sufficient cash flows to redeem the 14% Converting Notes on redemption. NuSep does not guarantee the redemption of the 14% Converting Notes;
If the 14% Converting Notes are converted into Shares or redeemed before their maturity date, Noteholders will not receive any further interest payments (which they would have been entitled to had they held their 14% Converting Notes until the maturity date); and
If NuSep is wound-up, Noteholders will rank behind secured creditors of the Company (if any) and equally with all other unsecured creditors. If there is a shortfall of funds available on winding-up, there is a risk that Noteholders will not receive full repayment (or any repayment) of their investment in the 14% Converting Notes or payment for any interest on the 14% Converting Notes which remains unpaid.

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

SECTION 6 - CAPITAL STRUCTURE

6.1 Issue of 14% Converting Notes

The issue of the 14% Converting Notes pursuant to this Prospectus relates to an Offer of up to 500,000 14% Converting Notes with an issue price of $10 per Converting Note to raise up to $5 million. The issued securities in the Company both pre and post this Offer (based on the Offer being fully subscribed) are as follows:

On issue as at the date of this Prospectus 14% Converting Notes now offered for subscription Ordinary Shares if all of the 14% Converting Notes are converted Total securities on issue after conversion of the 14% Converting Notes	Ordinary Shares 21,746,840 - 20,000,000 41,746,840	14% Converting Notes - 500,000 -
		-

6.2 Effect of the Offer

The principal effects of the Offer on the capital structure of the Company (based on the Offer being fully subscribed) are:

==> picture [13 x 10] intentionally omitted <==

The Company’s cash funds and issued capital will increase by approximately $5,000,000 less expenses of the Offer, which are estimated at approximately $130,000;

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The maximum number of 14% Converting Notes to be issued pursuant the Offer is 500,000; and

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The maximum number of Shares (if all 14% Converting Notes are converted) will increase from 21,746,840 to 41,746,840.

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

SECTION 7 - FINANCIAL INFORMATION

Pro-forma Balance Sheet

Set out below is an unaudited consolidated Balance Sheet of the Company as at 31 December 2007 and a pro forma Balance Sheet of the Company post this Offer. The pro forma figures are based on a full subscription for the 14% Converting Notes by investors (net of costs).

PRO-FORMA BALANCE SHEET – AS AT 31 DECEMBER 2007

	As at 31 December 2007 unaudited $'000	Pro forma as at 31 December 2007 unaudited after 14% Converting Notes issue $'000
CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories Other assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Cash and cash equivalents Financial assets Property, plant and equipment TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Provisions TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Other liabilities Borrowings Provisions TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Retained losses TOTAL EQUITY	711 184 323 8 1,226 1,000 300 2,007 3,307 4,533 1,565 166 1,731 918 - 46 964 2,695 1,838 9,180 199 (7,541) 1,838	5,711 184 323 8
		6,226
		1,000 300 2,007
		3,307
		9,533
		1,695 166
		1,861
		918 5,000 46
		5,964
		7,825
		1,708
		9,180 199 (7,671)
		1,708

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

SECTION 8 - INFORMATION DEEMED TO BE INCORPORATED IN PROSPECTUS

8.1 Prospectus

This Prospectus is a short form prospectus issued in accordance with section 712 of the Corporations Act. This means that this Prospectus does not contain all the information that is generally required to be set out in a document of this type, however, it incorporates by reference, information contained in the IPO Prospectus that was lodged with the ASIC on 14 December 2006, information contained in the 2007 Short Form Prospectus lodged with ASIC on 8 August 2007 and information contained in the NuSep Half Year Report lodged with ASX on 12 February 2008.

The information to be incorporated by reference into this Prospectus is summarised below in Section 8.2 and will primarily be of interest to investors and their professional advisers.

Investors and their professional advisers are able to obtain a copy of the documents listed in Section 8.2 below free of charge by contacting the Company at its registered office during normal business hours during the Offer Period. The documents will also be available by searching the ASIC’s records in relation to NuSep, or by visiting the Company’s website at www.nusep.com.

8.2 Documents Incorporated by Reference

Set out below is a summary of the information that is deemed to be incorporated into this Prospectus to assist investors and their professional advisers to determine whether they need to obtain a copy of the documents incorporated by reference for the purposes of making an informed decision in relation to the Offer.

(a) IPO Prospectus

Set out below is a summary of the information contained in the IPO Prospectus.

The sections referred to in this Section 8.2(a) are references to sections in the IPO Prospectus.

Section 1 – Purpose of Issue

Section 1 contains information relating to the application of funds raised pursuant to the IPO Prospectus. The section also details the market NuSep competes in, the distribution system of NuSep, the products NuSep has developed and the transfer of intellectual property from Life Therapeutics to NuSep.

Section 1 also contains information relating to each of the directors, the company secretary and the senior executives of the Company.

Section 2 – Details of the Offer

Section 2 contains information relating to the offer under the IPO Prospectus including actions required to participate in the issue, ranking of shares, treatment of overseas shareholders and CHESS participation.

Section 3 – Effect of the Issue of Shares and Options in the Company

Section 3 details the capital structure of NuSep and the adequacy of working capital. Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

Section 4 – Financial Statements

Section 4 sets out the pro forma and actual balance sheet of NuSep as at 31 October 2006.

Sections 5 & 6 – Shares and Options

Sections 5 and 6 set out the rights and liabilities attaching to the shares and options.

Section 7 - Risk Factors

Section 7 details a number of matters that may impact on the future operating performance of NuSep. The factors referred to include economic activity, changes in exchange rates, market forces, changes in tariff levels, changes in research funding, non-performance of contracts, difficulties or delays in receiving regulatory approval or certification, competition for the products and processes, patent litigation and litigation arising from clinical studies.

Section 8 - Additional Information

Section 8 sets out additional information required to be disclosed in the Prospectus including:

summaries of material contracts;
interests of Directors, including remuneration and share holdings;
interests of persons named in the IPO Prospectus;
details of the consents of persons named in the IPO Prospectus;
expenses of the offer;
a statement that the Company is not involved in any litigation at that time;
details of intellectual property acquired from Life Therapeutics; and
details of directors, employees, consultants and the Share Option Plan.

(b) 2007 Short Form Prospectus

Set out below is a summary of the information contained in the 2007 Short Form Prospectus.

The sections referred to in this Section 8.2(b) are references to sections in the 2007 Short Form Prospectus.

Section 1 – Letter from Chairman

Section 1 contains information relating to the share purchase offer pursuant to the 2007 Short Form Prospectus. The section also sets out the purpose of the offer, the use of funds raised under the offer and the general terms of the offer.

Section 2 – Details of the Offer

Section 2 contains further details of the offer under the 2007 Short Form Prospectus, the actions required to participate in the offer, the purpose of the offer and the treatment of overseas shareholders.

Section 3 – Information deemed to be incorporated in Prospectus

Section 3 sets out a summary of the information contained in the IPO Prospectus that is deemed to be incorporated in the 2007 Short Form Prospectus to assist investors and their professional advisers to determine whether they need to obtain a copy of the IPO

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

Prospectus for the purposes of making an informed investment decision regarding the offer under the 2007 Short Form Prospectus.

The section also sets out additional information that has been released to ASX and lodged with ASIC that is incorporated by reference in the 2007 Short Form Prospectus.

Section 4 – Financial information

Section 4 sets out the pro forma and actual balance sheet of NuSep as at 30 April 2007.

Section 5 – Further information

Section 5 sets out additional information required to be disclosed in the 2007 Short Form Prospectus including:

details of the Company's listing on ASX and the escrow of some of its securities;
activities undertaken by the Company since listing on ASX;
details of NuSep's continuous disclosure documents and the documents that the Company has available for inspection;
information regarding the Company's trading history;
details of the Company's capital structure;
a summary of the rights attaching to NuSep's Shares;
a summary of the underwriting agreement relating to the offer under the 2007 Short Form Prospectus;
details of the Minomic Agreement; and
details of the interests of Directors, experts and promoters of and to the Company.

(c) Half Year Report

Appendix 4B and Half Year Financial Report to 31 December 2008 lodged with ASX on 12 February 2008. Investors and their professional advisers are able to obtain a copy of the Appendix 4B and Half Year Financial Report free of charge by contacting the Company at its registered office during normal business hours during the Offer Period. The documents will also be available by searching the ASIC’s records in relation to NuSep, or by visiting the Company’s website at www.nusep.com.

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

SECTION 9 - ADDITIONAL INFORMATION

9.1 Escrow

NuSep was admitted to the Official List on 10 May 2007 with official quotation of its Shares commencing on 14 May 2007.

Pursuant to chapter 9 of the ASX Listing Rules, a number of the securities issued pursuant to the IPO Prospectus have been made subject to escrow requirements. Details of these securities subject to escrow and the periods of escrow of those securities are as follows:

TYPE	NUMBER	DATE OF RELEASE FROM ESCROW
Shares	120,837	14 May 2009
Options	1,700,000	14 May 2009

The balance of the issued capital of the Company, being approximately 21 million Shares, are quoted and freely tradeable on ASX.

9.2 Activities Since Listing on ASX

Since listing on the ASX, the Company has:

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Improved its Gel manufacturing process;

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Employed a US sales force;

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Commenced the promotion of NuBlu ;

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Launched the MF10 device;

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Completed the first clinical trials of SpermSep CS10; and

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Established its own distribution facility in Atlanta GA, US.

9.3 Continuous Disclosure and Documents Available for Inspection

The Company is listed on ASX and its Shares are quoted on ASX under the code ‘NSP’.

The Company is a “disclosing entity” for the purposes of the Corporations Act. As such, it is subject to regular reporting and disclosure obligations, which require it to disclose to ASX any information of which it is or becomes aware concerning the Company and which a reasonable person would expect to have a material effect on the price or value of securities of the Company.

Copies of documents lodged with the ASIC in relation to the Company may be obtained from or inspected at an office of the ASIC. This includes the documents referred to in Section 8.2 of this Prospectus (Documents Incorporated by Reference).

The Company will provide a copy of all documents used to notify ASX of information relating to the Company under the provisions of the Listing Rules since official quotation on 14 May 2007. As at the time of lodging this Prospectus the only such documents were:

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

DATE	ANNOUNCEMENT
08/04/2008	NuSep Announces an Offer of 14% Converting Notes
07/04/2008	Shares Held in Opes Prime Accounts
14/03/2008	NuSep Announces Successful Phase 1 IVF Clinical Trial
13/03/2008	NSP Update on Expiry of NuSep 50 cent listed Options
13/03/2008	NuSep SpermSep featured on Sunrise Show
12/03/2008	NSP Expiry of listed Options
20/02/2008	Appendix 3Y and Completion of Share buyback
12/02/2008	NuSep Forecast Financials to June 2008
12/02/2008	NuSep Half Year Report
23/01/2008	NuSep Appendix 3Y Increase in Director Shareholding
23/01/2008	NuSep Appendix 3X
26/11/2007	NuSep Biannual Company Briefing
22/11/2007	NuSep Quarterly Newsletter
21/11/2007	NuSep AGM Presentation
21/11/2007	Results of AGM
25/10/2007	Annual Report to shareholders
19/10/2007	Notice of Annual General Meeting
28/09/2007	Full Year Statutory Accounts
27/09/2007	Completion of the Share Purchase Offer and Appendix 3B
25/09/2007	NSP Results of EGM
17/09/2007	NSP Appendix 3Y Change of Directors Interest
12/09/2007	NuSep raises $2.7m under Share Purchase Offer
03/09/2007	NSP Appendix 3Y Change of Directors Interest Notice
31/08/2007	NSP Extension of Share Purchase Offer
24/08/2007	NuSep Official Opening and Business Presentations
24/08/2007	Appendix 4E
24/08/2007	NuSep Extension of Share Purchase Offer by 2 weeks
20/08/2007	NuSep Directors acquire an additional 3% of the Company
14/08/2007	Notice of Extraordinary General Meeting/Proxy Form
14/08/2007	Appendix 3B
08/08/2007	NuSep Short Form Prospectus August 2007
07/08/2007	NSP First Strategic Investment in the Monoclonal Area
06/08/2007	Hon Tony Abbott MHR to Officially Open NuSep
03/08/2007	NSP Unmarketable Parcel Sale Facility
24/07/2007	Quarterly Newsletter
06/06/2007	Commencement of Clinical Trials for Sperm Sorter
04/06/2007	Change of Director's Interest Notice
28/05/2007	Change of Director's Interest Notice
22/05/2007	Production of first biological product using Gradiflow
18/05/2007	Change of Director's Interest Notice
11/05/2007	ASX Circular: Commencement of Official Quotation
10/05/2007	Rules of Directors/Employee & Consultants Option Plan
10/05/2007	Appendix 1A–ASX Listing application and agreement
10/05/2007	Terms of Options on Issue
10/05/2007	Updated pro-forma balance sheet
10/05/2007	Copy of Federal Court Order
10/05/2007	Pre-Quotation Disclosure
10/05/2007	Corporate Governance Statement–Audit Charter
10/05/2007	Corporate Governance Statement–Board Charter
10/05/2007	Escrowed Securities–Unlisted Options
10/05/2007	Escrowed Shares
10/05/2007	Top 20 optionholders
10/05/2007	Top 20 shareholders
10/05/2007	Distribution Schedule-Shareholders

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

10/05/2007	Distribution Schedule–Optionholders
10/05/2007	Constitution
10/05/2007	ASX Circular: Commencement of Official Quotation
10/05/2007	Admission to Official List
04/05/2007	Disclosure Document

9.4 Rights Attaching to Shares

A summary of the more significant rights and liabilities attaching to the Shares is set out below.

The Shares that are to be issued on conversion of the 14% Converting Notes issued pursuant to this Prospectus are ordinary shares, the capital on which is fully paid. Shares once issued, will have the same rights attaching to them as the rights that are attached to the existing Shares.

Voting

At a general meeting of the Company, every Shareholder present in person or by proxy, attorney or representative has one vote on a show of hands and, on a poll, one vote for each fully paid Share held. On a poll, partly paid Shares confer a fraction of a vote in proportion to the amount paid up on the Share.

Dividends

Dividends are determined by the Directors at their discretion. Any dividend relating to Shares is divisible amongst the Shareholders in proportion to the amount paid up on the Shares held by them.

It is not currently intended that the Company pay a dividend on Shares or that one be paid in the near future.

Rights on winding up

Subject to the rights or restrictions attaching to any share or class of shares, if the Company is wound up, the property of the Company available for distribution shall be divided among the members in proportion to the shares held by them, irrespective of the amounts paid up or credited as paid up on the shares. If the Company is wound up the liquidator may, with the sanction of a special resolution, divide the assets of the Company amongst the members and may determine how the division shall be carried out as between the members or different classes of members.

Transfer of Shares

Except where required by law or the Constitution and subject to the Listing Rules, there are no restrictions on the transfer of Shares.

Issue of further Shares

Subject to the provisions of the Constitution and Corporations Act, the Directors may issue further Shares on such terms and conditions as they may decide.

Variation of class rights

The rights attaching to each class of Shares may only be varied:

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With the consent in writing of the holders of 75% of the class of issued shares concerned; or

With the sanction of a special resolution of Shareholders, a special resolution being a resolution passed by a majority of not less than 75% of Shareholders present and voting.

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

9.5 Underwriting Agreement

Mr Nicholas Caré, Mr John Manusu, Dr Choon Huat Lee, Dr Chenicheri Hariharan Nair and Mr Iain Howard Sorrell (the Directors of NuSep) ( Underwriters ) have agreed to underwrite the first $1 million of the Offer ( Underwritten Amount ). Each Underwriter has agreed to underwrite 20% of the Underwritten Amount . The issue of 14% Converting Notes to the Directors pursuant to the Underwriting Agreement is subject to Shareholder approval at the EGM.

A summary of the Underwriting Agreement is included below:

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Fees the Underwriter is entitled to a fee equal to 6% of the Underwritten Amount.

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Representations, Warranties and Undertakings the Underwriting Agreement contains various representations, warranties and undertakings made by NuSep to the Underwriter. NuSep also gives a number of undertakings to the Underwriter, including that it will carry on its business in the ordinary course, will notify the Underwriter of any breach of the Underwriting Agreement and will not vary the terms of the Constitution, composition of the board or the capital structure of the Company without the prior consent of the Underwriter.

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Indemnity NuSep indemnifies the Underwriter and certain other indemnified parties against all losses, liabilities, costs, claims, charges, expenses actions and demands incurred or suffered as a result of, or in connection with the Prospectus, the Underwriting Agreement, and certain other breaches or acts. This indemnity is subject to certain limited exceptions, including neglect or default and breach of the Underwriting Agreement.

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Termination the Underwriter may terminate its obligations under the Underwriting Agreement upon the occurrence of certain termination events. The main termination events are summarised below:

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Material Adverse Event - There is a material adverse event which will have or is likely to have a material adverse effect on the ability of the Underwriter to sell the Offer.

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Prospectus untrue - Any event rendering untrue, inaccurate, misleading or deceptive or incomplete in a material respect, any information or statement contained in the Prospectus.

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No suspension - An order preventing or suspending the issue of the Prospectus under section 739 of the Corporations Act (or proceedings initiated or threatened).

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National or international changes - Any material or fundamental change in national or international financial, economic or political conditions which in the reasonable opinion of the Underwriters is or may be materially disadvantageous for Australia or the Australian economy.

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Detrimental Public Announcements - Any public announcements are made by the Company which in the reasonable opinion of the Underwriters has or may have a material adverse effect on the Offer.

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Fundamental Change - Any material or fundamental change in the Australian or international financial, capital market, economic or political conditions which in the reasonable opinion of the Underwriters makes it impractical or inadvisable to proceed with the Offer. A fundamental change is agreed to be the ASX All Ordinaries Index as

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

published by the ASX falls 5% or more below its level as at the close of business on the date of this agreement.

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Change of Law - there not being promulgated, introduced or announced during the term of the Underwriting Agreement any statute, regulation, order or other enactment or any direction or policy of any governmental department or statutory authority in any jurisdiction which has or has the capacity to cause a material adverse effect on the Company, or any business operated by the Company, the Offer, acceptance by the Company of applications, the quotation, sale, transfer or disposition of the Shares or the ability of the Underwriter to perform its obligations.

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No breach of legislation - there having been at the Termination Date no material failure by the Company or any of its directors to comply and continue to comply with any material provision of the Corporations Act or any other statute, regulation or order required to be complied with which failure in the reasonable opinion of the Underwriters, constitutes a Material Adverse Event;

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No breach by the Company - no breach of the warranties or other breach by the Company of its obligations; or

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Declaration of War - there having been no declaration or announcement of any intention to commence war, hostilities or other armed conflict which in the reasonable opinion of the Underwriters may have a material adverse effect on the Offer or the Australian economy.

9.6 Taxation

It is the responsibility of all persons to satisfy themselves of the particular taxation treatment that applies to them by consulting their own professional tax advisers before investing in the 14% Converting Notes. Taxation consequences will depend on particular circumstances. Neither NuSep nor any of its officers accept any liability or responsibility in respect of the taxation consequences of the matters referred to above or any other taxation consequences connected with an investment in the Shares in NuSep or this Offer.

9.7 Interests of Directors and Experts

A full disclosure of the interests of Directors, experts and promoters of and to the Company for the period commencing on incorporation of the Company and to the date of issue of the IPO Prospectus are set out in section 8 of the IPO Prospectus and that information and disclosure has been updated in the table below.

Directors are not required under the Company’s Constitution to hold any Shares. As at the date of this Prospectus, the Directors have relevant interests in securities in the Company as set out in the table below:

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

Director	Number of Shares	Number of options
Nicholas Care	44,738*	300,000
John Manusu	2,114,127∗	800,000
Choon Huat Lee	979,800	200,000
Chenicheri Hariharan Nair	28,140*	200,000
Iain Howard Sorrell	35,648	200,000

∗ A number of these securities were held with Opus Prime Group Limited which has gone into receivership. The Director did not have any loans with this group. However, it is uncertain whether these securities will be returned to the Director concerned.

Pursuant to the Underwriting Agreement, the Directors may be required to subscribe for and be issued up to 100,000 Converting Notes. The maximum number of Converting Notes which may be issued to Directors pursuant to the Underwriting Agreement and the potential conversion is set out in the table below:

Director	Maximum number of Converting Notes	Maximum number of Shares	Total number of shares after conversion
Nicholas Care	20,000	800,000	844,738*
John Manusu	20,000	800,000	2,914,127∗
Choon Huat Lee	20,000	800,000	1,779,800
Chenicheri Hariharan Nair	20,000	800,000	828,140*
Iain Howard Sorrell	20,000	800,000	835,648

The aggregate potential shareholding of the Directors would be 17.31% subject to full subscription of the $1 million of Converting Notes under the Underwriting Agreement and full conversion of all the Converting Notes issued to Directors.

Details about the remuneration of the Directors is set out below.

The non-executive Directors are to be paid fees for their services as Directors as determined by the Directors in an amount not exceeding in aggregate a maximum sum that is from time to time approved by resolution of the Company. The current maximum aggregate sum is $250,000.

The Directors are entitled to be paid or reimbursed for all travelling and other expenses properly incurred by them in attending and returning from Company or Board meetings or otherwise in connection with the business or affairs of the Company. The Directors may also receive remuneration for extra services outside the scope of the ordinary duties of a Director.

Other than as disclosed in this Prospectus, no Director or proposed Director holds, at the time of lodgement of this Prospectus with ASIC, or has held in the two years before lodgement of this Prospectus with ASIC, an interest in:

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The formation or promotion of the Company;

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This Offer; or

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Any property acquired or proposed to be acquired by the Company in connection with its formation or promotion of the Company or this Offer.

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

Other than as disclosed in this Prospectus, no one has paid or agreed to pay any amount, and no one has given or agreed to give any benefit, to any Director or proposed Director:

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To induce a person to become, or qualify as, a Director; or

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For services provided by a Director or proposed Director in connection with the formation or promotion of the Company or the Offer.

9.8 Consents

Persons who make statements in this Prospectus or who made statements in the IPO Prospectus which are being incorporated by reference into this Prospectus need to provide their written consent for such use.

Each of the parties referred to in this section:

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Does not make, or purport to make, any statement in this Prospectus other than those referred to in this section; and

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To the maximum extent permitted by law, expressly disclaim and take no responsibility for any part of this Prospectus other than a reference to its name and a statement included in this Prospectus with the consent of that party as specified in this section.

Each of the Directors have given their written consent to being named as the Underwriters in this Prospectus and have not withdrawn their consent prior to the lodgement of this Prospectus with the ASIC.

Registries Limited has given its written consent to being named the Company’s Share Registry in this Prospectus and has not withdrawn its consent prior to lodgement of this Prospectus with the ASIC.

9.9 Legal Proceedings

There is no litigation, arbitration or proceedings pending against or involving the Company as at the date of this Prospectus.

9.10 Expenses of the Offer

The total expenses of the Offer are estimated to be $130,000 comprising legal and due diligence costs, printing and other administrative expenses, including ASX quotation fees.

9.11 Authority of Directors

Each of the Directors has consented to the lodgement of this Prospectus in accordance with section 720 of the Corporations Act.

Dated 14 April 2008.

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Managing Director By order of the Board For and on behalf of NuSep Ltd

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

SECTION 10 - DEFINITIONS IN THIS PROSPECTUS

AEST	Australian Eastern Standard Time
Applicant	means an investor who makes an Application
Application	a valid application made upon the conditions set out in this Prospectus
	by using an Application Form to apply for a specified number of 14%
	Converting Notes
Application Form	the application form accompanying this Prospectus by which investors
	can apply for the 14% Converting Notes
ASIC	Australian Securities and Investments Commission
ASX	ASX Limited
AUS$	the lawful currency of the Commonwealth of Australia
Business Day	has the meaning given to that expression in the Listing Rules
Business Rules	the market rules of the ASX, the Australian Clearing House Pty Limited
	clearing rules and the ASX Settlement and Transfer Corporation
	settlement rules
CHESS	Clearing House Electronic Sub-register System
Closing Date	the last day for receipt of the completed Application Forms for the 14%
	Converting Notes, offered by this Prospectus, being 13 May 2008,
	unless varied by the Company
Company or NuSep	NuSep Ltd ACN 120 047 556
Constitution	the constitution of the Company from time to time
14% Converting	a converting note with a 14% coupon offered under this Prospectus
Note(s), Converting	issued on the terms set out in Section 3 of this Prospectus (Summary
Note(s) or Note(s)	of Converting Note Terms)
Corporations Act	Corporations Act 2001 (Cth)
Directors/Board	the Directors of the Company at the date of this Prospectus
EGM	means the extraordinary general meeting of the Company to be held on
	30 May 2008 to approve the issue of the 14% Converting Notes for the
	purposes of Listing Rule 7.1 and any issue of the 14% Converting
	Notes to the Directors pursuant to the Underwriting Agreement
Initial Prospectus	means the prospectus lodged by the Company with the ASIC on 4
	December 2006
IPO Prospectus	means the prospectus lodged by the Company with the ASIC on 14
	December 2006 which replaced the Initial Prospectus
Issue Date	means the date the 14% Converting Notes are issued
Listing Rules	the Listing Rules of the ASX
Noteholder	the registered holder of a Converting Note
Offer	the offer of 14% Converting Notes pursuant to this Prospectus
Official List	the Official List of the ASX
Option	an option to purchase one Share
Prospectus	this replacement Prospectus dated 14 April 2008 which replaces the
	prospectus lodged with ASIC on 8 April 2008
Shareholder(s)	the registered holder of Shares
Share(s)	ordinary fully paid shares in the capital of the Company
Share Registry	Registries Limited ACN 003 209 836

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

2007 Short Form	means the short form prospectus lodged by the Company with the
Prospectus	ASIC on 8 August 2007
Subsidiary	has the same meaning as in the Corporations Act
Underwriting	means the underwriting agreement between NuSep, Mr Nicholas Caré,
Agreement	Mr John Manusu, Dr Choon Huat Lee, Dr Chenicheri Hariharan Nair
	and Mr Iain Howard Sorrell (the Directors of NuSep) dated on or about
	the date of this Prospectus
Technical Definitions
2D Gels	two dimensional gel electrophoresis which separate proteins on the
	basis of their size and isoelectric point (i.e. specific charge)
Albumin	the predominant protein in blood which has a number of applications
	including use as a stabiliser in biological products
ART	means "Assisted Reproductive Technology" which is a collective term
	for techniques, such as IVF and IUI, where eggs and/or sperm are
	handled outside the body to bring about conception
Beta Units	the first version of a unit/product to be trailed/tested outside of NuSep
	in real life customer testing. The objective of beta units are to
	debug/refine the product prior to full market release
BioSeparations	means the market for all products used by scientists to separate
	proteins and DNA.
DNA	means deoxyribonucleic acid which is the carrier of hereditary
	information and encodes the primary structure of proteins
Electrophoresis Gels	Gels that are used by researchers as an analytical tool to separate
	proteins. The Gels are made of polyacrylamide which allows for thin
	and strong matrixes to be made which are clear, allowing for molecules
	to be easily identified
Electrophoresis	a technique for separating and isolating molecules based on their
	differential movement in an electric field
FDA	means the U.S. Food and Drug Administration which regulates and
	enforces U.S. laws concerning food, human and animal drugs,
	cosmetics and other related items
Gel or Gels	an inert polymer which is typically formed of polyacrylamide or agarose
	and used as a medium to separate biological macromolecules eg.
	proteins and DNA
Gradiflow	a membrane based, preparative electrophoresis technology used to
	purify macromolecules from complex biological samples
Homemade Gels	are Electrophoresis gels made by researchers in their own
	laboratories. These gels are of a variable quality depending on the
	researchers knowledge of making gels
ICSI	Intra Cytoplasmic Sperm Injection. ICSI is a fertility procedure where a
	processed sperm is directly injected into an egg outside the
	prospective mothers body
iGels	a premium range of gels manufactured by NuSep
IgG	the most abundant immunoglobulin in blood and part of the immune
	defence system. IgG can bind and help inactivate many kinds of
	pathogens, including viruses and is important in many diagnostic tests
IgM	the largest of the immunoglobulins in circulation and important in many
	diagnostic tests. IgM antibodies are mainly responsible for the

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

clumping (agglutination) of cellular pathogens such as bacteria Isoelectric point the pH value where a protein has no charge (i.e. when it is in a neutral electrical state) IUI means intrauterine insemination which involves the transfer of the partner's semen into the uterus via a fine catheter IVF means in vitro fertilisation which involves the collection of eggs from a woman's ovaries which are then fertilised with sperm outside the woman's body in a laboratory MF10 a device which is used to separate proteins into multiple fractions and has been designed to meet the needs of the Proteomics market NuBlu an every day range of gel products manufactured by NuSep Plasma the fluid which remains when blood cells and insoluble material are removed from blood Pre Clinical a study undertaken to test a product before it can be used in a human clinical trial Pre Fractionation a primary fractionation of protein samples prior to analytical separation using techniques such as reversed-phase chromatography and 2D Gel Electrophoresis Precast gels that are manufactured for sale by an organisation like NuSep Electrophoresis Gels Proteins a large, heterogenous group of polymers of amino acids. Proteins form major structural (eg. muscle) and functional (eg. enzymes) molecules in living tissues Proteomics the large-scale study of proteins. Proteomics studies are typically conducted in parallel with and involve both the discovery and characterization of the structure and function of proteins. Because of its complexity the field is highly dependent on technical advances SpermSep CS10 or a Gradiflow based device used to isolate sperm for ART CS10 SpermSep TGA Therapeutic Good Administration. The TGA is a Federal Government body that regulates all medical devices and consumables sold in Australia

Replacement Prospectus - replaces the prospectus lodged by the Company with ASIC on 8 April 2008

NuSep Ltd

Application Form

ABN 33 120 047 556

This is an Application Form for 14% Converting Notes in NuSep Ltd (the Company) on the terms set out in the Prospectus. You may apply for a minimum of 50 Converting Notes and then in multiples of 1 Converting Note up to a maximum of 1,000 Converting Notes. Note that priority under the offer will be given to the Company's current shareholders. This Application Form and your cheque must be received by NuSep by 5.00pm (AEST) on 14 May 2008.

If you are in doubt as to how to deal with this Application Form, please contact your accountant, lawyer, stockbroker or other professional adviser. The Prospectus contains information relevant to a decision to invest in the Converting Notes and you should read the entire Prospectus carefully before

Broker Reference – Stamp Only

Broker Code Advisor Code

applying for Converting Notes. Under the Corporations Act 2001, Converting Notes may only be issued if the issuer has reasonable grounds to believe that the Application Form was included in or accompanied by the Prospectus when the Application Form was distributed.

A Number of Converting Note you are applying for (minimum of 50 Notes and maximum of 1,000 Notes)

Total amount payable A$

x A$10 per Converting Note =

Minimum of 50, $10 Converting Notes to be applied for, and thereafter in multiples of 1 Converting Note up to a maximum of 1,000 Converting Notes

C Write the name(s) you wish to register the Converting Note in (see instructions page)

Applicant 1

Name of Applicant 2 or < Account Designation >

Name of Applicant 3 or < Account Designation >

D Write your postal address here

Number / Street


	ECHESSparticipant – Holder Identification Number (HIN) X *Important pl ease note*if the name & address details above in sections C & D do not match exactly with your registration details held at CHESS, any Securities issued as a result of your

		X

Important pl ease note if the name & address details above in sections C & D do not match exactly with your registration details held at CHESS, any Securities issued as a result of your application will be held on the Issuer Sponsored subregister.

F	Cheque payment details –�PIN CHEQUE(S) HERE
	Please enter details of the cheque(s) that accompany this application.
	Name of drawer of cheque Cheque No.	BSB No.	Account No.	Cheque Amount A$

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G Direct Payment of Interest

Please complete the section to have your interest payments paid directly into a nominated account.

From September 2008, NuSep will make interest payments to Noteholders by direct credit only. Interest will not be paid by cheque. If you do not complete this section, the Company will be unable to make interest payments to you. Any outstanding interest payments will be held for you in a non-interest bearing deposit account until the Company receives details of your nominated account. Your interest will then be paid into your account as soon as possible after the receipt of your account details. No interest will be paid on amounts held pending the receipt of your account details

Name of Financial Institution

Branch

BSB Number (6 digits) Account Number Account Name -

(Complete reverse)

HEnter your Tax File Number(s), ABN, or exemption category	HEnter your Tax File Number(s), ABN, or exemption category	HEnter your Tax File Number(s), ABN, or exemption category
Applicant #1	Applicant #2

Applicant #3


		J Email address

By submitting this Application Form, I/We declare that this Application is completed and lodged according to the Prospectus and the instructions on the reverse of the Application Form and declare that all details and statements made by me/us are compete and accurate. I/We agree to be bound by the constitution of NuSep Ltd. I/We was/were given access to the Prospectus together with the Application Form. I/We represent, warrant and undertake to the Company that our subscription for the above Converting Notes will not cause the Company or me/us to violate the laws of Australia or any other jurisdiction which may be applicable to this subscription for Converting Notes in the Company. I/We acknowledge that I/we am/are residents of Australia.

Guide to the Application Form YOU SHOULD READ THE PROSPECTUS CAREFULLY BEFORE COMPLETING THIS APPLICATION FORM.

Please complete all relevant sections of the Application Form in BLOCK LETTERS, using black or blue ink. These instructions are cross-referenced to each section of the Application Form. The Corporations Act 2001 prohibits any person from passing onto another person the Application Form which is attached to the Prospectus for the issue of the Converting Notes, unless the Application Form is attached to or accompanying a complete and unaltered copy of the Prospectus. A person who gives another person access to the Application Form must at the same time and by the same means give the other person access to the Prospectus, and any supplementary prospectus. While the Prospectus is current, a paper copy of the Prospects, any supplementary prospectus and the Application Form will be provided to you, at no charge, upon request by telephoning the Company Secretary of NuSep on (61 2) 8977 9000.

Instructions

A. & B. If applying for Converting Notes insert the number of Converting Notes for which you wish to subscribe at Item A (not less than 50 Converting Notes and then in multiples of 1 Converting Note up to a maximum of 1,000 Converting Notes). Multiply the number of Converting Notes which you wish to subscribe for by $ 10.00 AUD to calculate the total for Converting Notes and enter the $amount at Item B .
C. Write your full name . Initials are not acceptable for first names.
D. Enter your postal address for all correspondence. All communications to you from the Company will be mailed to the person(s) and address as shown. For joint Applicants, only one address can be entered.
E. If you are sponsored in CHESS by a stockbroker or other CHESS participant, you may enter your CHESS HIN if you would like the allocation to be directed to your HIN.
NB: your registration details provided must match your CHESS account exactly.
F. Complete cheque details as requested. Make your cheque payable to NuSep Ltd - Offer , cross it and mark it "Not negotiable" . Cheques must be made in Australian currency, and cheques must be drawn on an Australian Bank.
G. Please complete the section to have your interest payments paid directly into a nominated account.
From September 2008, NuSep will make interest payments to Noteholders by direct credit only. Interest will not be paid by cheque. Payment by direct credit is more secure and faster than payment by cheque. If you do not complete this section, the company will be unable to make interest payments to you. Any outstanding interest payments will be held for you in a non-interest bearing deposit account until the Company receives details of your nominated account. Your interest will then be paid into your account as soon as possible after the receipt of your account details. No interest will be paid on amounts held pending the receipt of your account details.
H. Enter your Australian tax file number ("TFN") or ABN or exemption category, if you are an Australian resident. Where applicable, please enter the TFN /ABN of each joint Applicant. Collection of TFN's is authorised by taxation laws. Quotation of your TFN is not compulsory and will not affect your Application Form.
I. Enter your contact details so we may contact you regarding your Application Form or Application Monies.
J. Enter your email address so we may contact you regarding your Application Form or Application Monies or other correspondence.

Lodgement

Completed Application Forms and cheque(s) must be received no later than 5.00 pm (Sydney time) on 14 May 2008 being the closing date at the following address:

Mailing address:	Delivery address:
NuSep Ltd	NuSep Ltd
PO Box 6126	22 Rodborough Road
Frenchs Forest, NSW 2086	Frenchs Forest, NSW 2086

It is not necessary to sign or otherwise execute the Application Form. If you have any questions as to how to complete the Application Form, please contact the Company Secretary at NuSep on telephone number (61 2) 8977 9000.

Correct Forms of Registrable Title

Note that ONLY legal entities can hold the Converting Notes. The Application must be in the name of a natural person(s), companies or other legal entities acceptable to the Company. At least one full given name and surname is required for each natural person.

Examples of the correct form of registrable title are set out below.

Type of Investor	Correct Form of Registrable Title	Incorrect Form of Registrable Title
Individual	Mr John David Smith	J D Smith
Company	ABC Pty Ltd	ABC P/L or ABC Co
Joint Holdings	Mr John David Smith & Mrs MaryJane Smith	John David & MaryJane Smith
Trusts	Mr John David Smith	John Smith Family Trust
Deceased Estates	Mr Michael Peter Smith	John Smith (deceased)
Partnerships	Mr John David Smith & Mr Ian Lee Smith	John Smith & Son
Clubs/Unincorporated Bodies	Mr John David Smith	Smith Investment Club
Superannuation Funds	John Smith Pty Limited	John Smith Superannuation Fund

Privacy Statement

Personal information collected on this form by NuSep will be used to process your application, to maintain the Company's registers of securityholders, facilitate distribution payments and for other corporate actions and communications. Your personal information may be disclosed to NuSep's related body corporates, to external service companies such as print or mail service providers, or as otherwise permitted by law. If you would like details of your personal information held by NuSep, or you would like to correct information that is inaccurate, incorrect or out of date, please contact NuSep. In accordance with the Corporations Act 2001, you may be sent material (including marketing material) approved by the Company in addition to general corporate communications. You may elect not to receive marketing material by contacting NuSep. You can contact NuSep using the details provided on this Application Form or by emailing [email protected].

22 Rodborough Rd Frenchs Forest NSW 2086 Australia www.NuSep.com

AI assistant

MEMPHASYS LIMITED. — Capital/Financing Update 2008

65314_rns_2008-04-13_53d55e04-6128-4784-b3a4-7bac0f9d4822.pdf

Important Notice

INDEX

Directors

Company Secretary

Registered and Principal Office

Share Registry*

TIMETABLE OF IMPORTANT DATES*

IMPORTANT NOTICE

Exposure Period

Short Form Prospectus

Privacy

DISCLAIMER

Forward looking statements

Chairman’s Letter

SECTION 1 - DETAILS OF THE OFFER OF 14% CONVERTING NOTES

1.1 Offer

The issue of the 14% Converting Notes is subject to Shareholder approval being given to the issue at the EGM of the Company which is to be held on 30 May 2008.

1.2 Purpose of the Offer

1.

1.3 Rights attaching to 14% Converting Notes

1.4 No Overseas Offer

1.5 Closing Dates

1.6 ASX Listing

1.7 Date of Issue of 14% Converting Notes

1.8 Application monies held in trust

1.9

Market Prices of NuSep Shares

1.10 Payment

1.11 Underwriting

1.12 Minimum and Maximum Application

1.13 Over-subscriptions

1.14 Taxation

1.15 Action by potential investors

You should refer to the Application Form for instructions for completion of the enclosed Application Form.

1.16 Costs of the Offer

SECTION 2 - PURPOSE OF THIS OFFER AND RECENT COMPANY DEVELOPMENTS

Purpose and Application of Funds Raised Under this Prospectus

Product Markets

Precast Gels

The Market

Developments

Projections

MF10

The Market

Developments

Projections

SpermSep CS10

The Market

Developments

Projections

Investment Risks

Specific Risks

Project-specific risks

Specific risks associated with the 14% Converting Notes

6.1 Issue of 14% Converting Notes

6.2 Effect of the Offer

Pro-forma Balance Sheet

PRO-FORMA BALANCE SHEET – AS AT 31 DECEMBER 2007

8.1 Prospectus

8.2 Documents Incorporated by Reference

(a) IPO Prospectus

Section 1 – Purpose of Issue

Section 2 – Details of the Offer

Section 3 – Effect of the Issue of Shares and Options in the Company

Section 4 – Financial Statements

Sections 5 & 6 – Shares and Options

Section 7 - Risk Factors

Section 8 - Additional Information

(b) 2007 Short Form Prospectus

Section 1 – Letter from Chairman

Section 2 – Details of the Offer

Section 3 – Information deemed to be incorporated in Prospectus

Section 4 – Financial information

Section 5 – Further information

(c) Half Year Report

SECTION 9 - ADDITIONAL INFORMATION

9.1 Escrow

MEMPHASYS LIMITED. Capital/Financing Update 2008