MEMPHASYS LIMITED. - Capital/Financing Update 2009

FOR IMMEDIATE RELEASE

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NuSep Lodges $2m SPO Prospectus and Updates the Market on its 08/09 Expected Results

– SYDNEY, AUSTRALIA – 10[th] August 2009 NuSep (ASX: NSP) wishes to advise the market that it lodged a final prospectus to raise $2m via a Share Purchase Offer (SPO) from existing shareholders. The first $1m of this SPO is underwritten by existing shareholders and Directors of NuSep.

Full Year Results

The Company is also pleased to announce that it has significantly reduced the second half loss which will be in the range of $1m to $1.5m. The full year loss will be in the range of $3m to $3.5m, down from $5.5m loss in the corresponding 07/08 year.

The significant improvement in the second half results is due to: The increased gels pass rate,

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A general reduction in costs and

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A lower head count.

Importantly, these results do not include any of the $1m pa saving associated with the move from the old Frenchs Forest facility to Lane Cove. This $1m pa savings is effective from 1 July 2009.

This result sets the Company up to achieve a profit in the current 09/10 year.

SPO Terms

The Board of NuSep is keen to help the Company’s smaller shareholders increase their holding in the Company to a meaningful level at a discount to the existing share price. For this reason the Directors have priced the SPO at 20¢ per share. This was a 20% discount to the last trade on 5 August 2009 of 25¢. This offer will only be available to NuSep’s shareholders.

In addition, all shareholders who take up this SPO will receive 1 free Bonus Loyalty Share for every 4 shares they take up under the SPO. This Bonus Loyalty Share is designed to encourage long term investment in the Company and will be issued on 27 November 2009.

To participate in this SPO investors must hold shares in NuSep on Tuesday 11 August 2009 . A timetable for the SPO is outlined below:

NuSep Ltd 324 Burns Bay Rd Lane Cove NSW 2066	Postal Address P.O. Box 823 Lane Cove NSW 1595	Contact Details Telephone+61 2 8977 9000 Facsimile +61 2 8977 9099	Email[email protected] Webwww.nusep.com ABN33 120 047 556

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EVENT	DATE
Prospectus lodged with the ASIC and ASX.	Monday 10 August 2009
Record Date for Shareholder entitlement to the SPO	Tuesday 11 August 2009
Opening Date of Offer	Wednesday 12 August 2009
Closing Date of Offer	Friday 4 September 2009
Extraordinary General Meeting to approve the issue of shares and the Bonus Loyalty Shares under this Share Purchase Offer, and the Directors underwriting of this Share Purchase Offer.	Wednesday 9 September 2009
Holding statements dispatched and normal trading commences	Friday 11 September 2009*
Issue of the Bonus Loyalty Shares	Friday 27 November 2009*

A copy of the prospectus is attached to this release.

About NuSep

NuSep (ASX: NSP) is a publicly listed life sciences company that sells products into the global bioseparations market. The company has offices in both Sydney, Australia and Atlanta, USA.

With a 30 year heritage in biological separations, NuSep has forged a world class reputation for its innovative yet simple biological separation techniques including the world’s first IVF sperm separation device. In short NuSep has redefined the BioSeparations market through innovation and simplification.

NuSep’s world renowned research team has developed an extensive portfolio of patented products. In all, NuSep currently manufactures, distributes and sells 55 products to customers in the USA, Europe, Asia and Australia.

NuSep Products:

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Gels – NuSep manufactures and sells precast gels including the innovative iGels, with a 2 year shelf life.
Separation Instruments – NuSep has developed two unique biological separation instruments. The first instrument released in 2008 can separate biological samples into 8 fractions for use in the proteomic market. The second instrument separates sperm for fertility treatments such as IVF and is presently undergoing clinical trials.
Biological Products – NuSep supplies research grade biological products manufactured using its unique separation technologies. These products include human IgG and Albumin.

For more information about NuSep please visit the company’s website www.NuSep.com Contact:

Prakash Patel

Chief Financial Officer & Company Secretary +61 2 8977 9000 [email protected]

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NuSep Ltd ABN 33 120 047 556 Redefining BioSeparations

Share Purchase Offer Prospectus

Prospectus to raise up to $2 million by:

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the issue of up to 10 million Shares at 20¢ per Share;

Successful Applications will also receive:

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One Bonus Loyalty Share for every four shares taken up under the Share Purchase Offer

This Share Purchase Offer is only open to NuSep Shareholders and is non renounceable

The securities offered by this Prospectus should be considered speculative. This Prospectus replaces the Prospectus lodged by the Company with ASIC on 5 August 2009.

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Table of Contents	Table of Contents
Corporate Directory..........................................................................................................................................2
Timetable and Important Dates.........................................................................................................................3
Important Information.......................................................................................................................................4
Chairman’s Letter .............................................................................................................................................5
1. Details of the Offer .......................................................................................................................................7
1.1	Offer .............................................................................................................................................7
1.2	Pricing of the SPO Shares............................................................................................................7
1.3	Bonus Loyalty Shares ...................................................................................................................7
1.4	Record Date for entitlement to the SPO........................................................................................7
1.5	Conditions of the Offer.................................................................................................................7
1.6	Purpose of the Offer......................................................................................................................7
1.7	Action Required............................................................................................................................8
1.8	Closing Date .................................................................................................................................8
1.9	Subscription..................................................................................................................................8
1.10	Issue of Shares..............................................................................................................................9
1.11	Capital structure............................................................................................................................9
1.12	Minimum & Maximum SPO Applications ...................................................................................9
1.13	Oversubscriptions .........................................................................................................................9
1.14	Underwriting.................................................................................................................................9
1.15	Payment ......................................................................................................................................10
1.16	Market prices of Shares ..............................................................................................................11
1.17	Expected Results for the Full Year ended 30 June 2009.............................................................11
1.18	Advantages and Disadvantages of the SPO ................................................................................11
1.19	Summary of Key Risk Factors....................................................................................................12
1.20	Overseas Shareholders................................................................................................................13
1.21	Expenses of the Issue..................................................................................................................13
1.22	Enquiries.....................................................................................................................................13
2. NuSep’s	Business .......................................................................................................................................14
2.1	NuSep’s Main Products ..............................................................................................................14
2.2	The NuSep Directors ..................................................................................................................15
3. Further Company Information ....................................................................................................................17
3.1	Rights and liabilities attaching to NuSep Shares ........................................................................17
3.2	CHESS.......................................................................................................................................17
3.3	Continuous Disclosure and Documents Available for Inspection...............................................17
3.4	Litigation ....................................................................................................................................18
3.5	Secured Debt...............................................................................................................................18
4. NuSep Pro Forma Financial Statements .....................................................................................................19
5. Material	Contracts.......................................................................................................................................22
5.1	Underwriting Agreement ............................................................................................................22
5.2	Additional information ...............................................................................................................23
5.3	Terms of the Underwriting Agreement.......................................................................................23
5.4	Director Loans ............................................................................................................................25
5.5	Lease Agreement ........................................................................................................................26
5.6	Surrender of the Frenchs Forest Lease........................................................................................26
6. Risk Factors ................................................................................................................................................27
6.1	General Risks..............................................................................................................................27
6.2	NuSep Specific Risks..................................................................................................................27
7. Additional Information ...............................................................................................................................29
7.1	Taxation......................................................................................................................................29
7.2	Expenses .....................................................................................................................................29
7.3	Interests of Directors...................................................................................................................29
7.4	Consents of named parties ..........................................................................................................30
8. Directors’ Authorisation and Statement......................................................................................................31
9. Definitions ..................................................................................................................................................32
Application Form............................................................................................................................................33

Corporate Directory

Directors

Mr J. Manusu (Executive Chairman)

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Dr C. H. Nair (Managing Director and CEO) Mr I. Howard-Sorrell (Non executive Director) Mr W. Spee (Non executive Director)

Secretary and CFO Mr P. Patel

Registered Office

324 Burns Bay Road Lane Cove, NSW 2066 Australia Tel: +61 2 9420 8384 Fax: +61 2 9427 8614 Web page: www.NuSep.com

Share Registry Registries Limited

Level 7, 207 Kent Street Sydney, NSW 2000 Phone: +61 2 9290 9600 Fax: +61 2 9279 0664

Timetable and Important Dates

Timetable and Important Dates
EVENT	DATE
Shareholders informed of the Offer	Friday 3 July 2009
Prospectus lodged with the ASIC and ASX.	Monday 10 August 2009
Record Date for Shareholder entitlement to the SPO	Tuesday 11 August 2009
Opening Date of Offer	Wednesday 12 August 2009
Closing Date of Offer	Friday 4 September 2009
Extraordinary General Meeting to approve the issue of shares and the Bonus Loyalty Shares under this Share Purchase Offer, and the Directors underwriting of this Share Purchase Offer.	Wednesday 9 September 2009
Holding statements dispatched and normal trading commences	Friday 11 September 2009*
Issue of the Bonus Loyalty Shares	Friday 27 November 2009*

Subject to shareholder approval at the General Meeting to be held on 9 September 2009

The Directors may extend the Closing Date for the Offer without prior notice. As such, the date the Shares are expected to commence trading on ASX may vary.

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Important Information

This Prospectus is dated 10 August 2009 and was lodged with ASIC on that date. It replaces the Prospectus lodged by the Company with ASIC on 5 August 2009. Neither ASIC nor ASX take responsibility for the contents of this Prospectus.

No Shares will be issued on the basis of this Prospectus later than 13 months after 10 August 2009. Application will be made within seven (7) days after the date of this Prospectus for quotation of the Shares on ASX.

This document is important and should be read in its entirety. Your investment decision in relation to the Offer should be based on 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, the Directors nor 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 will be achieved.

Some words in this Prospectus have defined meanings. The definitions in section 9 of this Prospectus contain these meanings.

Offer

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 Shares. In particular, the Company draws your attention to those matters identified by the Company as representing risks to the Company in section 6 of this Prospectus. In the context of your personal requirements and the risk factors, the Company recommends that you seek professional guidance from your stockbroker, solicitor, accountant or other professional adviser prior to making the decision to apply for Shares.

While the Directors recommend this Offer, investment in the securities offered under this Prospectus should be considered speculative.

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 that 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 at no charge.

Purpose of this document

The main purpose of this document is to provide information in relation to the Offer. NuSep is required to issue a Prospectus for this Share Purchase Offer as its shares have been suspended from the ASX for more than 5 days in the last 12 months.

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 the 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 ASX Listing Rules) or as otherwise required under the Privacy Act 1988.

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Chairman’s Letter

10 August 2009

Dear Shareholders,

It gives me great pleasure to offer you, as a NuSep Shareholder, the opportunity to participate in the Company’s Share Purchase Offer (SPO). This offer is only available to NuSep Shareholders. We intend to use the SPO to raise funds for working capital, market the MF10 and to commercialise the SpermSep Instrument.

This is an exciting time for the Company since announcing its recent success in the Gels Division. It is now ready to commercialise the next phase of its electrophoresis technology.

Designed with our smaller Loyal Shareholders in mind

This SPO will enable our small and loyal Shareholders to increase their shareholding to a marketable parcel at a significant discount to the current share price without incurring any brokerage or other costs. We believe it is important to reward these loyal Shareholders who have funded the Company through its more risky R&D phase by allowing them to participate in the Company’s commercial success.

Bonus Loyalty Shares to reward our long term Shareholders

As an added incentive we have decided to offer all shareholders who take up this SPO a 1:4 Bonus Loyalty Share. For each 4 shares you acquire under the SPO you will receive 1 Bonus Loyalty Share. These shares will be issued on 27 November 2009.

The Current Business

NuSep is a vibrant and exciting company with significant upside. While the failure of the NxGen acquisition is a disappointment the management and Board of NuSep have used this last 6 months to turn the existing business around. In particular the Company has cut its costs by more than $1m through the relocation to a new facility in Lane Cove, increasing the Gels pass rate to 90% and by increased sales of the Gels and MF10 instruments.

NuSep is now focusing most of its sales and promotional efforts on growing sales in the MF10 area where margins are over 80%. The proteomic sample preparation market into which we sell the MF10 is also a high growth market. In addition, the US Government announced a further injection of $US10 billion into biotechnology through additional funding for the US National Institute of Health. These funds will further accelerate the growth in the markets NuSep services.

The Share Purchase Offer

The Company has limited the SPO to $2m as this is all the Company requires to achieve its stated targets. I am pleased to advise Shareholders, that as the first step towards this $2m raising, the Board and a number of Existing Shareholders have agreed to underwrite the first $1m of the SPO. Initially the Board agreed to underwrite $700,000, but had to reduce this underwriting commitment to $225,000 in

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order to avoid breaching the 20% takeovers provision. This additional underwriting commitment has been picked up by a number of Existing Shareholders. This underwriting commitment is a strong sign of the shareholders and the Boards belief in NuSep’s future.

Even though this SPO is partially underwritten, the Board is keen to raise the entire $2m SPO from our smaller loyal Shareholders and with this in mind has agreed to offer a Bonus Loyalty Share as a thankyou to the Shareholders who participate in the SPO.

EGM to approve the SPO and Bonus Loyalty Shares

An Extraordinary General Meeting will be held on Wednesday 9 September 2009 to approve the Shares to be issued under the SPO, the associated Bonus Loyalty Shares and the Director underwriting of the SPO.

Shareholders should be aware that the Shares to be issued under this Prospectus are subject to Shareholder approval at the Shareholder meeting to be held on 9 September 2009. This meeting will occur after the SPO has closed. It is possible that this resolution will not be approved at the 9 September 2009 Shareholder meeting. In this situation the SPO issue would not occur and the funds would be returned to Shareholders.

Full details of the SPO and of the existing NuSep business are outlined in sections 2 & 3 of this Prospectus and I encourage all Shareholders to read these sections in full.

I urge you to read all the material in this Prospectus carefully including the risks outlined in section 6 before deciding whether to participate in the Offer set out in this Prospectus. If you have any questions, you should consult your stockbroker, accountant, lawyer or other professional adviser.

In conclusion, the Directors strongly believe in the future of NuSep and have shown their commitment by underwriting this SPO. As a Board we strongly encourage you to participate in this Offer.

Yours sincerely,

Mr John Manusu

Executive Chairman

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1. Details of the Offer

1.1 Offer

The Offer is an offer to NuSep Shareholders to purchase new Shares at an issue price of 20 cents per Share to raise a maximum of $2 million. All Shareholders who take up this Offer will also receive 1 Bonus Loyalty Share for each 4 Shares acquired under this Offer.

1.2 Pricing of the SPO Shares

The Board determined that the SPO share price should represent a 20% discount to the last share trade on Monday 3 August 2009. On that day NuSep shares closed at 25 cents per share and the Board resolved to price the SPO at 20 cents. The SPO price of 20 cents represents a discount of 20% to the last share trade on Monday 3 August 2009. It should be noted that the market price of the shares may rise or fall between the date of this Offer and the date when the shares are allotted under the SPO. Therefore, the value of the Shares you receive on the allotment date may be more or less than the price paid for the Shares.

1.3 Bonus Loyalty Shares

The Bonus Loyalty Shares will be issued on 27 November 2009 to those Shareholders who participated in the SPO. Shareholders will receive 1 Bonus Loyalty Share for each 4 shares they acquire under the SPO.

1.4 Record Date for entitlement to the SPO

Only Shareholders who hold Shares in NuSep on Tuesday 11 August 2009 will be entitled to participate in the SPO. Further, this Offer is optional and non renounceable. Eligible Shareholders can not transfer their right to participate in the SPO to a third party.

1.5 Conditions of the Offer

The Offer is conditional on Shareholder approval of the Shares and the Bonus Loyalty Shares that are to be issued under this Prospectus. These approvals will be sought at a NuSep Shareholders meeting to be held on 9 September 2009.

If Shareholders do not approve the issue of the Shares or the Shares 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 Shares offered by this Prospectus will be granted. In that circumstance, all applications will be dealt with in accordance with section 724 of the Corporations Act.

1.6 Purpose of the Offer

The purpose of the Offer is to raise funds for:

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marketing of the MF10 Instrument;

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general working capital purposes and to meet estimated expenses of the Offer; and

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Initiate the next SpermSep CS10 Clinical Trial.

Use of Funds

If only $1m is raised under this SPO then:

(a) $800,000 will be used for general working purposes.
(b) the remaining $200,000 will be split between the marketing of the MF10 and the initiation of the SpermSep Clinical Trial.

If the full $2m is raised then:

(a) $1.4m will be used for working capital,
(b) $400,000 will be spent on marketing the MF10 and
(c) $200,000 on initiation of the SpermSep Clinical Trials.

1.7 Action Required

An Application can only be made by completing and lodging the Application Form attached to this Prospectus or a paper copy of the relevant Application Form in the on-line version of this Prospectus.

All cheques must be drawn on an Australian bank or bank draft made payable in Australian currency to “NuSep Ltd – Offer Account” and crossed “Not Negotiable”.

Your completed Application Form and cheque must reach the Registered office of NuSep Ltd at 324 Burns Bay Road, Lane Cove, NSW 2066 no later than 5.00pm EST on the Closing Date.

1.8 Closing Date

The Closing Date for the Offer is 5.00pm EST on Friday 4 September 2009. The Directors may extend the Closing Date.

1.9 Subscription

	Subscription Amount	Share Purchase	Bonus Loyalty Shares*	Total Number of Shares
		Offer Shares
Offer 1	$500	2,500	625	3,125
Offer 2	$2,500	12,500	3,125	15,625
Offer 3	$5,000	25,000	6,250	31,250
Offer 4	$10,000	50,000	12,500	62,500

*The Bonus Loyalty Shares will be issued on 27 November 2009..

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1.10 Issue of Shares

The issue of Shares pursuant to this Offer will be subject to shareholder approval in accordance with Listing Rule 7.1. Shareholder approval will be sought at a General Meeting of Shareholders to be held on 9 September 2009. NuSep will issue the SPO shares within 5 business days of the General Meeting on 9 September 2009 and the Bonus Loyalty Shares will be issued on 27 November 2009.

1.11 Capital structure

On 27 March 2009 the share capital of the Company was consolidated on a 1 for 20 basis. As at the date of this Prospectus, NuSep has 2,292,864 Shares on issue. On the assumption that the Offer is fully subscribed, 10 million Shares will be issued and 2.5 million Bonus Loyalty Shares will be granted to successful Applicants. NuSep currently has no Options on issue.

Shares Capital	Number of Shares
Shares on issue at the date of this Prospectus	2,292,864
Shares to be issued under this Prospectus	10,000,000
Bonus Loyalty Shares to be issued under this Prospectus	2,500,000
Total Shares on issue at the Close of the Offer	14,792,864

1.12 Minimum & Maximum SPO Applications

The minimum Application is for 2,500 Shares (i.e. $500). The maximum Application is for 50,000 Shares (i.e. $10,000). There is no minimum subscription that can be raised under this Prospectus. The maximum that can be raised under this Prospectus is $2m or 10 million shares and 2.5 million Bonus Loyalty Shares.

1.13 Oversubscriptions

If NuSep receives Applications for more than $2m it will process these Applications on a first come first served basis . Directors do reserve the right to accept oversubscriptions.

1.14 Underwriting

The Offer is partially underwritten by a number of Existing Shareholders of NuSep and the Directors of NuSep to $1 million. Details of the material terms of the Underwriting Agreements, including the circumstances in which the agreement can be terminated, are set out in Section 5.1 and 5.3 of this Prospectus. Under the Corporations Act the Directors are considered related parties of NuSep. For these reasons the Director Underwriting Agreement is

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subject to shareholder approval in accordance with Listing Rule 10.11 and Chapter 2E of the Corporations Act 2001.

The table below shows the Underwriters and the shares that they currently hold and what they would hold should no Shareholders take up the SPO.

	Current Shareholding	% of the Issued Capital	Maximum Shareholding	% of the Issued Capital
Directors of NuSep
John Manusu	106,956	4.6%	450,706	5.3%
Hari Nair	4,281	0.2%	348,031	4.1%
Iain Sorrell	6,231	0.2%	349,981	4.1%
William Spee	137,247	5.9%	512,247	6.0%
Existing Shareholders of NuSep
Mr M Loughnan	97,006	4.2%	1,690,756	19.8%
Mr Y Chiu	1,032	0.1%	626,032	7.3%
Laodale P/L*	4,500	0.2%	1,567,000	18.3%
Mr P Ford	2,450	0.1%	1,064,950	12.5%

Laodale is a company controlled by Mr Nicholas Caré, a former Director of NuSep.

This table has been compiled on the basis that no shares are taken up under the SPO by Shareholders. In this situation the Underwriters would be required to subscribe $1m for a total of 5 million Shares and 1.25 million Bonus Loyalty Shares. The right hand column shows the maximum shareholding and percentage this represents of the expanded capital that each Underwriter would hold in NuSep if no shares were acquired by Shareholders under the SPO. In this situation the Directors would hold and control 19.5% of NuSep’s issued capital. The above shareholdings include associated and related parties to each of the Underwriters.

Shareholders should note that this Prospectus is not conditional on the approval of the Directors Underwriting Agreement by Shareholders at the General Meeting to be held on Tuesday 9 September 2009. Should this Director Underwriting Agreement not be approved by Shareholders at that meeting the Directors underwriting amount of $225,000 would be cancelled leaving an underwriting amount of $775,000.

1.15 Payment

The completed Application Form must be accompanied by payment in full at the rate of 20 Cents per Share. Payments will only be accepted in Australian

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currency. Refer to the Application Form for further details on payment requirements.

1.16 Market prices of Shares

Please note that on 27 March 2009 the Share Capital of the Company was consolidated on a one for twenty basis (i.e. twenty shares at 5.0 cents each based on the share price immediately prior to Consolidation were consolidated into one share of $1.00 each).

Set out in the table below, the lowest and highest closing market sale price of Shares on the ASX during the 3 months immediately preceding 5 August 2009 were 25 cents and 40 cents. 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	40 cents	23 July 2009
Lowest	25 cents	15 July 2009
Last Price	25 cents	3 August 2009

The market price of the shares may rise or fall between the date of this Offer and the date when the shares are allotted under the SPO. Therefore, the value of the Shares you receive on the allotment date may be more or less than the price paid for the Shares. The current share price can be obtained from the Australian Stock Exchange and is listed in the financial or business section of major daily newspapers circulating in Australia.

1.17 Expected Results for the Full Year ended 30 June 2009

The Company will release its full results for the year ended 30 June 2009 on Monday 31 August 2009. Based on unaudited management numbers the Board expects to record a loss of $1m to $1.5m for the second half compared to a loss of almost $2m for the first half. Based on this the Board expects the loss for the full to be in the range of $3 to $3.5m.

This significant reduction in the loss is due to increased gel production pass rates, general cost reductions and decreased headcount. The financial effect of the $1m pa saving associated with the move from the Frenchs Forest facility to the new Lane Cove facility did not occur until July 2009 and is not included in the cost reductions noted above. See section 4.1 for more details.

1.18 Advantages and Disadvantages of the SPO

There are a number of potential advantages and disadvantages for Shareholders in subscribing to this SPO. In summary these are:

Advantages include:

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(a) By participating in the SPO Shareholders are providing ongoing funding for the company to achieve its stated goals.
(b) Subscription to the SPO allows current minority shareholders to top up their investment in the company as they will now be able to buy shares at a discount to the current market price.
(c) Shareholders will receive 1 Bonus Loyalty Share for every 4 Shares acquired under the SPO. This reduces the cost of their investment in NuSep by 25%.
Disadvantages include:
(a) The SPO will dilute those Shareholders who do not participate in the SPO.
(b) The SPO will dilute large Shareholders relative to the smaller Shareholders as the maximum amount a Shareholder can subscribe is $10,000.
(c) If no Shareholders take up the SPO then the Directors will subscribe for $225,000 of shares under the Director Underwriting Agreement and will collectively own 19.5% of the company.

1.19 Summary of Key Risk Factors

The securities offered under this Prospectus should be considered speculative because of the nature of the Company’s business. The operation of the Company’s business is subject to a range of business risks, both of a general and specific nature. Full details of the possible risks associated with an investment in the Company are set out at section 6 of this Prospectus. These risks should be considered carefully before an application for Shares is made to the Company.

The position of the Company may change as a result of a change in economic conditions, the impact of geo-political factors on the Australian and world economies and changing market conditions on the ASX. Shareholders should also be aware that if they do invest in the Company there is no guarantee of future earnings, dividends, return of capital or the price at which the Shares will trade on the ASX after quotation.

There are also a number of Company specific risks including:

• ( financial risks ) the ability of NuSep to implement its business strategy may require it to raise additional funds. No assurances can be given that such

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funding will be available or that it will be available on terms attractive to NuSep;

• ( non-performance ) non-performance of significant contracts by other parties;

• ( failure to achieve sales growth ) failure to achieve sales growth from existing NuSep products;

( difficulties with product launches ) difficulties or delays in completing product developments or product launches;

• ( competition ) the existence and extent of any competition for the products or processes to be developed by NuSep– particularly from major international biotechnology companies;

( substitute products ) the existence of substitute or improved products developed by competing companies;

Should these risks materialise at a future time it may impact negatively on the Company’s future share price.

1.20 Overseas Shareholders

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.

The Company has formed the view that it is unreasonable to make offers of securities under the Offer to Shareholders with a registered address outside Australia after having regard to each of the following:

(a) the number of holders in each jurisdiction outside of Australia;
(b) the number and value of the Shares that would be offered to these holders; and
(c) the cost of complying with the legal and regulatory requirements in these foreign jurisdictions.

1.21 Expenses of the Issue

The total expenses of the issue are estimated to be $90,000 comprising

(a) Underwriting fees,
(b) legal and due diligence costs,
(c) printing and other administrative expenses, including ASX quotation fees.

These fees will be paid out of the funds raised under this Prospectus and these expenses are included in the general working capital application of funds.

1.22 Enquiries

If you have any questions concerning your entitlement, please contact the Company Secretary, Mr Prakash Patel by telephone on +61 2 9420 8384, or contact your professional adviser.

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2. NuSep’s Business

NuSep is a life sciences company that sells products into the global BioSeparations market. The company has offices in both Sydney, Australia and Atlanta, USA.

NuSep is known for its innovative yet simple biological separation techniques including the world’s first IVF sperm separation device. NuSep manufactures, distributes and sells 55 products to customers in the USA, Europe, Asia and Australia. In addition it also distributes diagnostic products in Australia.

2.1 NuSep’s Main Products

2.1.1 Gels

NuSep manufactures and sells precast gels including the innovative iGels, which have a two year shelf life. NuSep has introduced a number of product innovations over the last two years which has lead to a steady increase in direct sales. The Company has a number of patents covering its gel technology including the manufacturing process and the formulation of its long life gels.

The global Precast Electrophoresis Gels market was estimated to be US$100m in 2004, of which US$55m was in the US. The US$55m represents approximately 6.2m gels[1] pa. This US$55m market represents 55% of all gels used in the US each year. The remaining 45%[2 ] of this market, or 5m gels pa, represents the home made gels market. NuSep’s products address this US$55m precast gel market.

Over the last six months NuSep has seen significant increases in its gel OEM sales as additional marketing efforts have been brought to bear. Further, direct sales have increased since the US Government announced an additional US$10B in biotechnology funding as part of the US stimulus package in January 2009. Finally, the Company holds significant forward orders from its OEM partner.

Over the last year the Company has continued to improve its manufacturing pass rate, which is now consistently above 90%. Over this time NuSep has also managed to simplify the manufacturing process, reducing cost and staff levels, while increasing the volume of sellable product. Gel manufacturing is now operating out of our new Lane Cove facility which is expected to lead to further product and cost improvements.

While the Gels Division will never offer the same margins as the Separations Division this is an established business which generates a positive cash flow. In addition, the Gel products sell to the same BioSeparation customers who buy the MF10 offering a number of cross marketing opportunities.

2.1.2 Separation Instruments

NuSep offers two unique patented biological separation instruments. The first is the MF10 which can separate biological samples for use in the proteomic market. The second is the SpermSep CS10 which separates sperm for fertility treatments such as IVF.

The MF10 addresses the proteomic sample preparation market. Frost & Sullivan state that the US proteomics sample preparation market generated $59 million in revenue in 2007 and

1 Phortech International, The 2004/05 US MSPPSA Electrophoretic Equipment & Media Market, page 92.

2 Phortech International, The 2004/05 US MSPPSA Electrophoretic Equipment & Media Market, page 87.

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is expected to reach $103 million in 2011. This market is expected to grow at a compound rate of 15% across this period[3] .

NuSep launched the MF10 in 2008. Sales have continued to grow as NuSep expands market awareness of this innovative technology. The Company is pleased with the MF10 sales growth and has budgeted for this Division’s sales to exceed the Gels Division in the 2010/11 financial year.

The MF10 and the associated consumables are protected by a number of patents and undisclosed technology. The MF10 and particularly the associated consumables provide significantly higher margins than the Gels.

The SpermSep CS10 was successfully evaluated for safety and efficacy in a 2008 clinical trial. This clinical trial involved 18 couples, 9 of which used the SpermSep, and 9 that used the existing process. The SpermSep group had 3 live births and there was only 1 live birth in the other group. Following on from this study it was decided to redesign the consumables component of the SpermSep to address initial feedback from the regulatory authorities. This redesign has now been completed and subject to funding under this prospectus a final market ready version of the SpermSep will be clinically trialled later this year.

NuSep manufactures the SpermSep instrument and consumables on the same production line as the MF10.

2.1.3 Biological and Diagnostic Products

NuSep supplies research grade biological products using its unique separations technologies. These products include human immunoglobulin and albumin. In addition NuSep distributes a number of diagnostic products in Australia and New Zealand. These diagnostic products are highly profitable and the Company is considering expanding this division.

2.2 The NuSep Directors

The Directors of NuSep as at the date of this Prospectus are:

John Manusu B.Com, F.Fin.

Executive Chairman

Member of Audit Committee, Member of Remuneration Committee

Managing Director between September 2006 and September 2008, since then Executive Chairman. Age 49.

Mr Manusu has over 20 years experience running biotechnology companies. He has been involved with start ups, turnarounds and mature organisations in the biotechnology space. Mr Manusu has undertaken a number of significant acquisitions and divestures, as well as raising over $100 million in public funding and $10 million of peer reviewed government R&D grants. Mr Manusu was a Director of Life Therapeutics Ltd (October 2003 to June 2007). Mr Manusu has a degree in Commerce and is a Fellow of the Financial Services Institute of Australasia. Mr Manusu has worked in the biotechnology industry in Australia and the U.S. and is best described as a biotechnology entrepreneur.

Dr Hari Nair BSc (Hons), PhD (Med & Clin Sci), MAIBiol, MOIF (Cambridge)

Managing Director, Chief Executive Officer

Non executive Director between September 2006 and September 2008, since then Managing Director and Chief

Executive Officer. Age 52.

Dr Nair has a PhD in Medicine and Clinical Science from the Australian National University with his specialty in cardiovascular medicine and haematology. Dr Nair has received a number of awards from international organisations including being specially recognised for his role in coagulation research by the ACT government. He has run biotechnology companies in Australia and the US and was the CEO and Managing Director of Life Therapeutics Ltd

3 Genetic Engineering & Biotechnology News Vol 27, No 16, September 15 2007

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(October 2003 to December 2007) where he transformed Life Therapeutics Ltd into the world leader in the collection of hyperimmune plasmas. Dr Nair has been heavily involved in mergers and acquisitions especially in the US and Europe and has US financial experience.

Iain Howard-Sorrell HND, LiBiol

Non executive Director

Chairman of Audit Committee, Chairman of Remuneration Committee Non executive Director since September 2006. Age 52.

Mr Howard-Sorrell is based in the USA and has over 20 years experience in the Life Sciences arena. He has held senior sales and marketing positions in both corporate and start up businesses both in Europe and the USA. In addition to his extensive knowledge of the separations industry he has also set up and operated a successful import and distribution organisation in the USA. He is a graduate of the University of Plymouth in Applied Biology. In addition to on-going consultative roles he is also actively involved on the board of trustees for non-profit organisations. He is best recognised for his ability to develop new markets and coordinate international distribution.

William Spee

Non executive Director

Non executive Director since June 2009. Age 62

Mr Spee brings 30 years experience in running Manufacturing, Retail and Investment operations. He has a lifetime passion for science and technology and in addition to running his own Commercial Property Investment company has direct investments interests in several growing ventures. Mr Spee was a Flying Officer in the RAN, and completed his training in the US Navy. Mr Spee has run several small retail food businesses, has studied computer science at Macquarie and Canberra Universities before running a small scale electronic manufacturing venture. Mr Spee is passionate about the environment and is currently designing a new 6 green star commercial building in Northern Australia.

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3. Further Company Information

3.1 Rights and liabilities attaching to NuSep Shares

A summary of the more significant rights and liabilities attaching to NuSep’s Shares (including the Bonus Loyalty Shares) is set out below.

The NuSep Shares and Bonus Loyalty Shares that are to be issued pursuant to this Prospectus are ordinary shares, the capital on which is fully paid.

(a) Voting – At a general meeting of NuSep, 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.

(b) 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 NuSep pay a dividend on Shares or that one be paid in the near future.

(c) Rights on winding up – Subject to the rights or restrictions attaching to any share or class of shares, if NuSep 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.

(d) Transfer of Shares – Except where required by law or the constitution of NuSep there are no restrictions on the transfer of Shares.

(e) Issue of further Shares – subject to the provisions of NuSep’s constitution and the Corporations Act, the Directors may issue further Shares on such terms and conditions as they may decide.

(f ) Variation of class rights – the rights attaching to each class of Shares may only be varied:

(i) with the consent in writing of the holders of three-quarters of the class of issued Shares concerned; or

(ii) with the sanction of a special resolution of Shareholders, a special resolution being a resolution passed by a majority of not less than 75 per cent of Shareholders present and voting.

3.2 CHESS

NuSep already participates in the Clearing House Electronic Sub register System, known as CHESS. ASX Settlement and Transfer Corporation Pty Ltd (ASTC), a wholly owned subsidiary of ASX, operates CHESS in accordance with the ASX Listing Rules and Securities Clearing House Business Rules. The Shares will be CHESS approved securities.

Under CHESS, Shareholders will not receive a certificate but will receive a holding statement for their Shares. A statement will be sent routinely to shareholders at the end of any calendar month during which the holder’s shareholding changes. A shareholder will be supplied with a statement at any other time on request, subject to payment of a charge for the additional statement.

3.3 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

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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.

3.4 Litigation

The Company is involved in a number of minor litigations. These matters relate to disputes with suppliers all of which have been fully provided in the Company’s accounts. None of these disputes are of a material nature, the largest being in the order of $20,000. NuSep is defending these matters and does not expect these matters to materially impact on the Company. The Company is not involved in any arbitration or alternative dispute resolution proceedings, nor, so far as the Directors are aware, are any such proceedings pending or threatened against the Company at the date of this Prospectus.

3.5 Secured Debt

The Company has $946,574 of secured debts. The Company has not given any additional charge or other security on any of its assets to secure payment of any debt or otherwise. This secured debt of $946,574 represents the Director loans. More details on these loans are provided in section 5.2.

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4. NuSep Pro Forma Financial Statements

Set out below is an unaudited consolidated financial statements of the Company for the half year ended 31 December 2008. These results were released to the market on 27 February 2009. A full copy of these accounts can be found on ASX or NuSep’s website at www.nusep.com.

The Board of NuSep has formed the view based on the unaudited management numbers that the results for the full year ended 30 June 2009 will show a loss of between $3m and $3.5m. The Company’s results for the year ended 30 June 2009 will be released to the market on Monday 31 August 2009. The Board does not expect any material change from these numbers and the proforma Balance Sheet as at 31 March 2009 outlined below.

Whilst the Board notes that these are unaudited management numbers they do show that the second half loss is in the range of $1m to $1.5m compared to a loss of approximately $2m for the first half of the 08/09 year. This reduction in the loss was due to an increase in the gel production pass rate, a general reduction in costs and a reduced headcount. This reduced second half loss does not reflect the more than $1m saving the Company will see this financial year due to the move from the Frenchs Forest to Lane Cove facility. Also of significance to the 09/10 financial year NuSep continues to see strong forward gel orders.

Consolidated Income Statement For the half-year ended 31 December 2008	Half-year December 2008 $	Half-year December 2007 $
Continuing operations Revenue Cost of sales Gross Profit Other income Marketing expenses General and administration expenses Research and development expenses Finance cost expenses Loss before income tax Income tax expense Loss after tax from continuing operations Net loss for the period Net loss attributable to members of parent	1,105,016 (599,717) 505,299 35,580 (383,474) (966,667) (1,068,213) (74,398) (1,951,873) - (1,951,873) (1,951,873) (1,951,873)	652,684 (961,309)
		(308,625) 59,766 (419,861) (1,368,401) (494,248) (18,650)
		(2,550,019) -
		(2,550,019)
		(2,550,019)
		(2,550,019)

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Consolidated Balance Sheet As at 31 December 2008	As at 31 December 2008 $	As at 30 June 2008 $
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 Other current liabilities Short-term financial liabilities Short-term provisions TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Other non-current liabilities Long-term financial liabilities Long-term provisions TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Retained losses TOTAL EQUITY	213,733 183,874 399,363 13,251 810,221 734,572 855,000 1,584,495 3,174,067 3,984,288 2,873,122 164,383 - 155,240 3,192,745 589,042 995,221 67,008 1,651,271 4,844,016 (859,728) 10,587,798 732,237 (12,179,763) (859,728)	695,560 444,971 374,491 32,886
		1,547,908
		867,286 855,000 1,785,590
		3,507,876
		5,055,784
		2,091,674 164,383 305,000 154,265
		2,715,322
		671,233 521,554 46,318
		1,239,105
		3,954,427
		1,101,357
		10,602,240 727,007 (10,227,890)
		1,101,357

Set out below is a pro forma balance sheet for NuSep as at 31 March 2009 which sets out the company’s balance sheet pre and post the SPO. Note that if the SPO only raises $1 million as a result of the underwriting agreement NuSep will have a positive equity position of $1,894,864.

The following are the material underlying assumptions that have been considered in compiling the pro-forma balance sheet for NuSep:

(a) based on unaudited management forecast the loss for the year ended 30 June 2009 is expected to be in the range of $3m to $3.5m. See section 1.17.

(b) by relocating from the Frenchs Forest Sydney facility to the Lane Cove location in June 2009, NuSep will save up to $1,000,000 per annum on rent, including outgoings;

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(c) the Directors of NuSep have taken a conservative approach to the valuation of assets by valuing the company’s assets at cost including the intangible assets;

(d) the current business will continue to operate as it did pre and post the SPO; and

(e) the directors’ loans (valued at $946,574) will not be repaid until NuSep has sufficient funds to repay them in the normal course of its business.

Accordingly, set out below is a pro-forma balance sheet for NuSep with:

(a) the first column setting out the actual financial position of NuSep as at 31 March 2009;

(b) the second column setting out the financial position of NuSep on a pro-forma basis assuming only the $1m underwriting commitment is raised; and (c) the third column setting out the financial position of NuSep on a pro-forma basis assuming the Offer is fully subscribed.

Pro forma - Balance Sheet	Consolidated Unaudited Pro Forma management accounts 31 March 2009 $	Consolidated unaudited Pro Forma (Assuming only $1m underwriting raised under SPO) 31 March 2009	Consolidated unaudited Pro Forma (Assuming SPO is fully subscribed and $2m raised) 31 March 2009 $
CURRENT ASSETS Cash and cash equivalents Cash from capital raised Trade and other receivables Inventories Other assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Cash and cash equivalents Financial assets Property, plant and equipment Intangible assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Other current liabilities Short-term financial liabilities TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Long-term financial liabilities Long-term provisions TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS NET EQUITY	140,370 - 451,676 388,013 18,740 998,799 212,273 855,000 1,485,582 1,575,617 4,128,472 5,127,271 2,866,401 47,891 - 2,914,291 1,072,044 246,072 1,318,116 4,232,407 894,864 894,864	140,370 1,000,000 451,676 388,013 18,740 1,998,799 212,273 855,000 1,485,582 1,575,617 4,128,472 6,127,271 2,866,401 47,891 - 2,914,291 1,072,044 246,072 1,318,116 4,232,407 1,894,864 1,894,864	140,370 2,000,000 451,676 388,013 18,740
			2,998,799
			212,273 855,000 1,485,582 1,575,617
			4,128,472
			7,127,271
			2,866,401 47,891 -
			2,914,291
			1,072,044 246,072
			1,318,116
			4,232,407
			2,894,864
			2,894,864

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5. Material Contracts

A summary of NuSep’s material contracts are set out below.

5.1 Underwriting Agreement

The Offer is partially underwritten by a number of Existing Shareholders of NuSep and the Directors of NuSep to $1 million. The Directors of NuSep who have agreed to Underwrite the SPO are Mr John Manusu, Dr Hari Nair, Mr Iain Sorrell and Mr William Spee. The Existing Shareholders who are underwriting the SPO are Mr M Loughnan, Laodale Pty Ltd, Mr P Ford and Mr Y Chiu ( Underwriters ). Laodale Pty Ltd is owned and controlled by Mr Nicholas Caré. Mr Caré was the Chairman of NuSep until he retired on 17 September 2008. Mr Caré remains a shareholder of NuSep and loaned NuSep $110,000 while a Director. Mr Caré is not associated with any of the other Underwriters or Directors. These Directors and Existing Shareholders have agreed to underwrite the first $1m of the Share Purchase Offer ( Underwritten Amount ).

The Existing Shareholders have agreed to underwrite the first $775,000 of the SPO and the Directors have underwritten the last $225,000 of the $1m SPO Underwritten Amount.

The Directors are considered to be related parties for the purposes of Chapter 2E of the Corporations Act 2001. For this reason the proposed Director underwriting of the SPO requires Shareholder approval which will be sought from Shareholders at an EGM to be held on Wednesday 9 September 2009.

By underwriting this SPO the Directors are taking the risk that no NuSep Shareholders take up the SPO. In this situation the Directors and the Existing Shareholders would acquire 5 million Shares in NuSep and up to 1.25 million Bonus Loyalty Shares.

A more detailed analysis of the Underwriters existing and maximum possible shareholdings under the SPO is outlined in the table below.

	Current Shareholding	% of the Issued Capital	Maximum Shareholding	% of the Issued Capital
Directors of NuSep
John Manusu	106,956	4.6%	450,706	5.3%
Hari Nair	4,281	0.2%	348,031	4.1%
Iain Sorrell	6,231	0.2%	349,981	4.1%
William Spee	137,247	5.9%	512,247	6%
Existing Shareholders of NuSep
Mr M Loughnan	97,006	4.2%	1,690,756	19.8%
Mr Y Chiu	1,032	0.1%	626,032	7.3%
Laodale P/L*	4,500	0.2%	1,567,000	18.3%
Mr P Ford	2,450	0.1%	1,064,950	12.5%

Laodale is a company controlled by Mr Nicholas Caré, a former Director of NuSep.

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Shareholders should note that this Prospectus is not conditional on the approval of the Directors Underwriting Agreement by Shareholders at the General Meeting to be held on Wednesday 9 September 2009. Should this Director Underwriting Agreement not be approved by Shareholders at that meeting the Directors underwriting amount of $225,000 would be cancelled leaving an underwriting amount of $775,000.

5.2 Additional information

Below is some additional information that Shareholders may find useful in understanding the Directors and Existing Shareholders decision to underwrite this SPO.

(a) The SPO was priced at a 20% discount to the market price. See section 1.2.
(b) NuSep requires this fund raising to achieve its stated objectives. The Company recently tried raising funds under an acquisition prospectus which was not supported by the market. This has left the Company with less funding options, which is why the Company is now undertaking the SPO.
(c) NuSep is seeking to raise $2m to fund the marketing of the MF10, initiate phase II SpermSep Clinical Trials and meet working capital requirements. See Section 1.6.
(d) The Directors have joined with a number of Existing Shareholders to underwrite this Prospectus. This Underwriting Agreement guarantees the Company the $1m in return for a 6% commission to the Existing Shareholders and a 1.6% commission to the Directors. By comparison the Company offered brokers a 6% fee in the last prospectus with out the underwriting risk, making the current Underwriting Agreement less favourable than the terms offered in the last prospectus.
(e) The company has explored other underwriters including brokers and institutions. There was a lack of interest. In part this is due to NuSep’s market capitalization and in part it is due to their lack of understanding of NuSep’s business. The Existing Shareholders and Board understand NuSep’s business and associated risks well, which is why they are prepared to take on the risk of underwriting this issue.
(f) The terms of the underwriting are standard and described in Section 5.3.
(g) Identities of the underwriters are disclosed in Sections 1.14 and 5.1.
(h) None of the Underwriters have traded in NuSep shares during the 3 month period up to the date of this Prospectus.
(i) The Existing Shareholders are independent parties. Their only relationship is their shareholding in NuSep. NuSep does not have any additional relationships with these Existing Shareholders. The Directors are considered related parties to NuSep.

5.3 Terms of the Underwriting Agreement

A summary of the Underwriting Agreement is included below:

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Fees the Existing Shareholders are entitled to a fee equal to 6% of the Underwritten Amount. The Directors are entitled to a fee of 1.6% 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:
(a) 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.
(b) Prospectus untrue - Any event rendering untrue, inaccurate, misleading or deceptive or incomplete in a material respect, any information or statement contained in the Prospectus.
(c) No suspension - An order preventing or suspending the issue of the Prospectus under section 739 (or proceedings initiated or threatened).
(d) 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.
(e) 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.
(f) 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 published by the ASX falls 5% or more below its level as at the close of business on the date of this agreement.
(g) 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.

(h) 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;

(i) No breach by the Company - no breach of the warranties or other breach by the Company of its obligations;
(j) 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.

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5.4 Director Loans

The Directors of NuSep have advanced loans of $946,574 to NuSep under a loan agreement. Loans from the current Directors are subject to a fixed and floating charge.

The loans were provided to NuSep by the existing and former directors of NuSep in the following proportions:

(a) John Manusu (existing director) – $325,000;

(b) Hari Nair (existing director) – $191,042;

(d) Choon Lee (former director) – $175,000; and

(e) Nicolas Care (former director) – $110,000.

On 29 September 2008, the existing directors of NuSep (i.e. John Manusu, Hari Nair and Iain Howard-Sorrell) entered into an agreement with NuSep under which the existing directors received a fixed and floating charge over all of NuSep’s assets in consideration for the loans that they provided to NuSep. The existing directors provided $661,574 of the $946,574 of directors’ loans to NuSep. Under the agreement, the charge crystallises if the existing directors’ loans are not repaid or an event of default occurs. The agreement contains the types of provisions usually found in agreements relating to fixed and floating charges.

Although the loans were due for repayment on 1 July 2008, in accordance with the terms of the loans, the directors have agreed that the loans will not be repaid until the Company has sufficient funds to repay them in the normal course of its business.

The key terms of the directors’ loans are:

(a) (Repayment date) – As noted above, the directors have agreed that the loans will not be repaid until the Company has sufficient funds to repay them in the normal course of its business. The lender (i.e. each director) may elect to offset all or any part of such amount against an equivalent amount of money due to the lender in NuSep Shares or converting notes (i.e. securities which convert into NuSep Shares);

(b) (Purpose of Loan) – The loan funds may be used by the Company for working capital purposes;

(c) (Interest) – The interest rate of the loans is 14% per annum (calculated daily from the date of the relevant agreement until the date of repayment) by way of one lump sum payment on the repayment date. Under each loan agreement, the interest rate may be increased to 16% per annum on all amounts outstanding if NuSep fails to pay the interest on the relevant repayment date;

(d) (Expenses) – Under each loan agreement, NuSep agrees to pay all legal expenses (including preparing any relevant agreements), any possible stamp duty, the costs of enforcement, incidental expenses and expenses to enforce repayment on a default;

(e) (Events of Default) – The following are considered events of default under each of the loan agreements:

(i) if NuSep fails to pay any principal, interest or relevant fee under the relevant loan agreement;
(ii) if NuSep commits any breach of or omits to observe or perform any of its covenants under the relevant agreement which remains unremedied for 14 days after being notified under the relevant loan agreement;

(iii) if any representation made by NuSep pursuant to the loan agreement is incorrect or misleading in any material respect;

(iv) if any present or future indebtedness of NuSep is not paid when due;

(v) if NuSep is or becomes insolvent or steps are taken to make NuSep insolvent;

(vi) if NuSep is deregistered or steps are taken to deregister NuSep;

(vii) if any consent of any governmental or other authority is not given or is withdrawn or terminated with respect to a loan agreement or any security;

(viii) if any of the assets of NuSep necessary for the normal carrying on of its business is lost or materially damaged and not replaced or repaired within 60 days of the loss or damage;

(ix) if any judgement or order is entered against NuSep which the lender determines would have a material adverse effect on the operations of NuSep;

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(x) if the relevant loan agreement, at any time for any reason ceases to be in full force and effect or is declared to be void;

(xi) if without the prior written consent of the lender, NuSep creates any encumbrance on any portion of its property;

(xii) if without the prior written consent of the lender, NuSep, transfers or leases the whole or a substantial portion of its property; or

(xiii) if the lender believes some act occurs to NuSep that materially and/or adversely affects the capacity of NuSep to perform any of its obligations under the relevant loan agreement. Upon default, the lender (i.e. the director) may demand immediate repayment of the loan; and

(f) (Confidentiality) – The terms of the loan agreements are confidential and must not be disclosed to third parties without written consent (except for disclosure to professional advisers).

5.5 Lease Agreement

NuSep has signed a 3 year lease for a property at Lane Cove, Sydney from which it currently conducts its business. The annual rent for the premises is $170,000 including outgoings. The lease contains the standard types of provisions expected in a business lease agreement.

5.6 Surrender of the Frenchs Forest Lease

NuSep has negotiated the surrender of the 22 Rodborough Rd Frenchs Forest lease for a total value of $1.65m. This amount includes rent up to June 2009. Of this amount $860,000 has been paid from the rent reserve account and the balance will be paid in instalments over the following 12 months. This agreement represents a full and final settlement of this lease. This reduces the annual cost of rent from approximately $1.3m pa to $200,000 pa inclusive of GST.

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6. Risk Factors

An investment in the Company is not risk free and investors should consider the risk factors described below, together with information contained elsewhere in this Prospectus, before deciding whether to apply for Shares.

The securities offered under this Prospectus should be considered speculative because of the nature of the Company’s business and Applicants should consult their professional advisers before deciding whether to apply for the Offer. The operations of the Company are subject to a range of business risks, both of a general nature and of a specific nature in respect of the business activities conducted by the company. There can be no guarantee that the company will achieve its stated objectives.

6.1 General Risks

General risks associated with the Company are:

• ( economic conditions ) the performance of NuSep, may be significantly affected by changes in economic conditions, particularly conditions which affect the biotechnology industry. The 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;

• ( share market conditions ) NuSep, being a company listed on ASX, will continue to be subject to market forces that influence broad share market trends and the price of securities of individual companies. Accordingly, the price of the Shares when quoted on ASX will be subject to varied and often unpredictable influences on the market for equities in general;

• ( no guarantee of future earnings risk ) there is no guarantee of profitability, dividends, return of capital, or the price at which the Shares will trade on ASX after quotation;

• ( uncontrollable factors ) NuSep will be exposed to general risk factors that are associated with conducting a business including litigation resulting from the breach of agreements or in relation to employees (through personal injuries, industrial matters or otherwise), strikes, lockouts, loss of service of key management or operational personnel, non-insurable risks, delay in the 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 the Company; and

• ( product market factors ) NuSep may be affected by shifts in product markets and/or new products which replace existing product markets. Such shifts may replace existing products in an extremely short period of time making it impossible for the Company to replace these sales .

6.2 NuSep Specific Risks

Specific risks associated with NuSep include without limitation:

• ( financial risks ) the ability of NuSep to implement its business strategy may require it to raise additional funds. No assurances can be given that such funding will be available or that it will be available on terms attractive to NuSep;

• ( litigation ) NuSep is a defendant to a number of commercial litigations. If NuSep is unsuccessful in defending any of these claims it will more than likely be required to pay an amount to the plaintiff that will be determined by the Court.

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( non-performance ) non-performance of significant contracts by other parties;
( failure to achieve sales growth ) failure to achieve sales growth from existing NuSep products;
( difficulties with product launches ) difficulties or delays in completing product developments or product launches;
( difficulties with regulatory approval ) difficulties or delays in receiving regulatory approval or certification for products or processes;
( competition ) the existence and extent of any competition for the products or processes to be developed by NuSep– particularly from major international biotechnology companies;
( substitute products ) the existence of substitute or improved products developed by competing companies;
( research and development programs ) the success or failure of research and development programs of NuSep;
( market development ) the pace of market development for products and the costs involved in achieving market penetration and brand awareness;
( change in markets ) change in the markets for the products and processes sold by NuSep;
( patent litigation ) patent litigation, including failure of existing patents or failure to gain patent licenses to yet unknown blocking patents; and
( clinical trial litigation ) litigation arising from the clinical studies undertaken by NuSep.

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7. Additional Information

7.1 Taxation

The issue of Shares and Bonus Loyalty Shares under the Offer may have taxation implications for their holders. If you have any doubts regarding possible taxation consequences, you should contact your professional tax adviser for advice. Neither NuSep nor any of their officers, employees, agents and advisers accepts any liability or responsibility in respect of the taxation consequences connected with an investment in the Offer.

7.2 Expenses

The expenses of the Offer payable by NuSep, including fees paid to legal fees, consultancy fees, registry costs, printing and mailing, are estimated to amount to approximately $90,000.

7.3 Interests of Directors

A full disclosure of the interests of Directors, experts and promoters of and to the Company are set out 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:

Director	Number of Shares	Registered Holder
Mr John Manusu	72,831 34,125	Direct Mancu PtyLtd
Dr Hari Nair	4,281	Direct
Mr Iain Howard Sorrell	6,231	Direct
Mr William Spee	12,500 124,747	Direct Cafalo PtyLtd

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. All the Directors have also underwritten this Prospectus. See section 5.1 for more details on the underwriting.

The Directors have provided $661,574 in loans to NuSep. Please see section 5.4 of this Prospectus for a summary of the key terms and conditions of the Directors’ loans.

No amounts have been paid or agreed to be paid and no benefit has been given or agreed to be given to any adviser, for services rendered by the advisor in connection with the promotion or formation of NuSep or in connection with the Offer except as disclosed in this Prospectus.

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7.4 Consents of named parties

Registries Limited has given and has not before lodgement of this Prospectus withdrawn its written consent to be named in this Prospectus as the Company’s share registry. Registries Limited has not authorised or caused the issue of, and takes no responsibility for, any part of this Prospectus.

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8. Directors’ Authorisation and Statement

This Prospectus is issued by the Company and its issue has been authorised by a resolution of the Directors.

In accordance with sections 716 and 720 of the Corporations Act, each of the Directors have consented in writing to the lodgement of this Prospectus with ASIC and the inclusion of any statements in this Prospectus attributable to them.

J Manusu

Executive Chairman

on behalf of the Board of the Company

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9. Definitions

Applicant means a person who submits an Application Form. ASIC means Australian Securities and Investments Commission. ASX means ASX Limited (ACN 008 624 691).

BioSeparation Customers means the researchers and companies that work in the Life Science field (eg any field of science that deals with the organisms of plants, animals and/or human beings) who could buy NuSep’s products. Board means the board of Directors unless the context indicates otherwise. Bonus Loyalty Shares means the Shares to be issued on 27 November 2009.

Business Day means a day other than a Saturday or Sunday on which banks are open for business in Sydney, New South Wales.

Cents or ¢ means Australian cents unless otherwise stated.

CHESS means ASX Clearing House Electronic Subregistry System. Closing Date means 5.00 p.m. EST on Friday 4 September 2009 (unless extended).

Company or NuSep means NuSep Ltd (ACN 120 047 556). Constitution means constitution of the Company as at the date of this Prospectus.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the directors of the Company from time to time.

Director Underwriting Agreement means the underwriting agreement between NuSep, and all the NuSep Directors dated on or about the date of this Prospectus.

Dollars or $ means Australian dollars unless otherwise stated.

Existing Shareholders means the Shareholders who are underwriting the SPO. Specifically this means Mr M Loughnan, Laodale Pty Ltd, Mr P Ford & Mr Y Chiu.

Extraordinary General Meeting or EGM means the meeting of Shareholders held on Wednesday 9 September 2009.

EST means Eastern Standard Time being the time in Sydney, New South Wales.

Gels means an inert polymer, typically formed of polyacrylamide or agarose. Gels are used as a medium to separate biological samples.

Listing Rules or ASX Listing Rules means the official Listing Rules of ASX. Marketable Parcel has the meaning given in the Listing Rules.

Offer means the offer of Shares pursuant to this Prospectus.

Offer Period means the period commencing on the Opening Date and ending on the Closing Date.

Official List means the official list of ASX.

Opening Date means Wednesday 12 August 2009. Quotation means official quotation on ASX.

Shares means one fully paid ordinary share in the capital of the Company. Shareholder means a holder of Shares as at Tuesday 11 August 2009. Share Purchase Offer (SPO) means the offer to purchase additional NuSep shares

Share Registry means Registries Limited ACN 003 209 836. SpermSep Clinical Trials means controlled trials of NuSep’s SpermSep CS10 device as a sperm preparation method for patients undergoing ART (Assisted Reproductive Technology) treatments such as IUI and IVF. Underwriting Agreement means the underwriting agreement between NuSep, and the Existing Shareholders dated on or about the date of this Prospectus.

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NuSep Ltd ABN 33 120 047 556

Share Purchase OFFER - Application Form

pp	Record Date: 11 August 2009
	Close Date: 4 September 2009
	Issue Price: $0.20 per share SRN/HIN

This is an Application Form for ordinary shares in NuSep Ltd on the terms set out in the Prospectus. This document is important and requires your immediate attention. If you are in any doubt as to the action you should take, please consult your stockbroker, accountant or professional adviser. Please see instructions on how to complete this Application Form and where to send it.

A Offer Choice

Indicate your choice below by marking one box only. You may purchase a minimum of 2,500 shares for A$500 or a maximum of 50,000 shares for A$10,000

Option 1 Option 2 Option 3 Option 4 Option 5 50,000 shares 25,000 shares 12,500 shares 2,500 shares � A$10,000.00[�] A$5,000.00[�] A$2,500.00 � A$500.00 � ……………………… [insert number of shares] at $0.20per share = A$........................... [insert amount]

B Payment Details

Record cheque details below

Drawer	Cheque Number	BSB Number	Account No.	Amount A$

PAYMENT INSTRUCTIONS:

Only cheques or bank drafts in Australian dollars and drawn on a bank or financial institution in Australia will be accepted. Your cheque or bank draft must be made payable to “ Nusep Ltd - Offer” and crossed Not Negotiable. Please ensure that you submit the correct amount. Incorrect payments may result in your application being rejected.
Payments must be made via cheque accompanying the Application Form.
Cash will not be accepted via the mail or at Nusep Ltd.
Payments cannot be made at a bank.

C Contact Details

Please provide a telephone number and contact name in case we need to contact you regarding your application.

Telephone number Contact name Email address

D Declarations and Acknowledgments

By lodging this form with your cheque you acknowledge and confirm that you have read, understood and agreed to the terms and conditions of the Nusep Ltd Share Purchase Offer (SPO). Nusep Ltd may settle in any manner it deems appropriate, any dispute or anomalies which may arise in connection with or by reason of the operation of the SPO, whether generally or in relation to any applicant or application of shares. The decision of Nusep Ltd will be conclusive and binding on all persons to whom the determination relates. Nusep Ltd reserves the right to waive compliance with any provision of the SPO terms and conditions. The Directors reserve the right to withdraw the offer of shares under the SPO, or reduce the amount of shares that may be subscribed for under the SPO in any manner, at any time prior to allotment. Any excess application moneys will be refunded. No interest will be paid on any refunded application money.

NO SIGNATURE IS REQUIRED ON THIS FORM

THIS OFFER IS NON-RENOUNCEABLE

Application Forms and cheques must be received no later than 5.00 pm (Sydney time) on 4 September 2009 at: MAILING ADDRESS DELIVERY ADDRESS NuSep Ltd NuSep Ltd PO Box 823 324 Burns Bay Road Lane Cove, NSW 1595 Lane Cove, NSW 2066

You should allow sufficient time for this to occur. The postal acceptance rule does not apply to the SPO.

Share Purchase Offer

By completing this Application Form and forwarding it with your payment, you (a) acknowledge that you have read and understood the Terms and Conditions of the Share Purchase Offer (SPO), (b) apply to subscribe for shares in accordance with the Terms and Conditions of the SPO, (c) certify that the aggregate application amount of ordinary Shares in the Company which you have applied for under this SPO (including through joint and beneficial holdings), even if you received more than one offer under this SPO, does not exceed A$10,000, and (d) represent and warrant that you:

were the registered holder of one or more fully paid ordinary Shares in the Company (Shares) at 7.00 pm (Sydney time) on 11 August 2009 with an address in Australia and you do not hold Shares on behalf of another person who resides outside Australia;
are not in the United States and you are not acting for the account or benefit of any person within the United States in applying for shares under the SPO; and
have not received any documentation in relation to the SPO in the United States and you have not mailed, transmitted or otherwise distributed any documentation relating to the SPO in or into the United States.

How to complete this Application Form

A. You have the choice to purchase a minimum of 2,500 shares for A$500 or a maximum of 50,000 shares for A$10,000. Indicate the number of shares you wish to purchase by completing the appropriate box.
B. Please enter your cheque (or money order) details in Section B. Cheques or money orders must be drawn on an Australian branch of a financial institution in Australian dollars and made payable to "NuSep Ltd – Offer" and crossed "Not Negotiable". Enter the total dollar amount of the shares applied for in the box provided.
C. Please enter a contact name and daytime telephone number so we may contact you regarding your Application, if necessary.

Lodgement instructions

The completed Application Form should be forwarded with your payment so it is received by the Company at the address set out on page 1 of this Application Form by 5.00 pm (Sydney time) on 4 September 2009 . If you are returning your Application Form by post, you should allow sufficient time for collection and delivery by postal services. The postal acceptance rule does not apply to acceptance of this offer. Your Application Form cannot be faxed to the Company as a cheque (or money order) payment must be attached to your Application Form.

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) 9420 8384.

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].

Please return the Application Form with your cheque or money order so that it is received by NuSep on or before 5pm (Sydney time) on 4 September 2009

AI assistant

MEMPHASYS LIMITED. — Capital/Financing Update 2009

65314_rns_2009-08-09_22570b67-2f84-4c60-8b09-751b1ba91b3c.pdf

NuSep Lodges $2m SPO Prospectus and Updates the Market on its 08/09 Expected Results

Full Year Results

SPO Terms

About NuSep

Share Purchase Offer Prospectus

Prospectus to raise up to $2 million by:

Successful Applications will also receive:

Table of Contents

Corporate Directory

Directors

Secretary and CFO Mr P. Patel

Registered Office

Share Registry Registries Limited

Timetable and Important Dates

Important Information

Offer

Purpose of this document

Privacy

Chairman’s Letter

Designed with our smaller Loyal Shareholders in mind

Bonus Loyalty Shares to reward our long term Shareholders

The Current Business

The Share Purchase Offer

EGM to approve the SPO and Bonus Loyalty Shares

1. Details of the Offer

1.1 Offer

1.2 Pricing of the SPO Shares

1.3 Bonus Loyalty Shares

1.4 Record Date for entitlement to the SPO

1.5 Conditions of the Offer

1.6 Purpose of the Offer

1.7 Action Required

1.8 Closing Date

1.9 Subscription

1.10 Issue of Shares

1.11 Capital structure

1.12 Minimum & Maximum SPO Applications

1.13 Oversubscriptions

1.14 Underwriting

1.15 Payment

1.16 Market prices of Shares

1.17 Expected Results for the Full Year ended 30 June 2009

1.18 Advantages and Disadvantages of the SPO

1.19 Summary of Key Risk Factors

1.20 Overseas Shareholders

1.21 Expenses of the Issue

1.22 Enquiries

2. NuSep’s Business

2.1 NuSep’s Main Products

2.1.1 Gels

2.1.2 Separation Instruments

2.1.3 Biological and Diagnostic Products

2.2 The NuSep Directors

John Manusu B.Com, F.Fin.

Dr Hari Nair BSc (Hons), PhD (Med & Clin Sci), MAIBiol, MOIF (Cambridge)

Iain Howard-Sorrell HND, LiBiol

William Spee

3. Further Company Information

3.1 Rights and liabilities attaching to NuSep Shares

3.2 CHESS

3.3 Continuous Disclosure and Documents Available for

Inspection

3.4 Litigation

3.5 Secured Debt

4. NuSep Pro Forma Financial Statements

5. Material Contracts

5.1 Underwriting Agreement

5.2 Additional information

5.3 Terms of the Underwriting Agreement

5.4 Director Loans

5.5 Lease Agreement

5.6 Surrender of the Frenchs Forest Lease

6. Risk Factors

6.1 General Risks

6.2 NuSep Specific Risks

7. Additional Information

7.1 Taxation

MEMPHASYS LIMITED. Capital/Financing Update 2009