MEMPHASYS LIMITED. — Capital/Financing Update 2013

May 19, 2013

==> picture [197 x 25] intentionally omitted <==

==> picture [197 x 25] intentionally omitted <==

==> picture [197 x 25] intentionally omitted <==

==> picture [197 x 24] intentionally omitted <==

FOR IMMEDIATE RELEASE

NuSep Update

Sydney, Australia 20[th] May 2013–NuSep (ASX:NSP) The Board would like to update the market on recent developments in NuSep.

Background

Over the past 12 months, NuSep has focused on developing the therapeutic plasma applications of the PrIME Technology. Following on from this work, NuSep transferred the pilot scale cGMP manufacturing unit to Singapore and undertook 3 initial trial cGMP batches of Albumin in December 2012. Subsequently PrIME has optimised this process, halving the time required to complete a 250L production batch. Results of this initial trial were submitted to the Health Sciences Authority of Singapore who kindly donated locally derived plasma for this project.

The Board updated the market last week that negotiations to fund PrIME Biologics Pte Ltd are progressing. NuSep will now concentrate on producing high margin membranes for PrIME Biologics and developing new applications of the PrIME Technology. To put this in commercial perspective, in 2 years once the Singapore facility is operating at full capacity, PrIME Biologics will be purchasing at least $4m of membranes each year from NuSep. This sales volume will increase in a step wise fashion as PrIME sets up additional plants in other countries.

NuSep to Focus on PrIME Technology Applications

With the PrIME plasma fractionation project in its funding stage, NuSep can now focus on the next series of PrIME applications. The PrIME Technology is a platform technology that can be applied to a wide variety of applications from manufacturing many different biological drugs to removing toxins, viruses, bacteria and possibly cancer cells. It can also be applied to clinical and industrial diagnostic applications. NuSep will identify and develop these applications in order to create new additional income streams of consumable membranes, license fees and royalties for NuSep.

In the short term, the critical success factor for NuSep is achieving regulatory approval post the first clinical trial of a therapeutic plasma product using the PrIME Technology. Product registration, thus regulatory approval validates the PrIME Technology as it eliminates the commercialisation risk. Post this regulatory approval it can be reasonably expected that the PrIME Technology will be adopted in many other markets. It is hard to underestimate the importance of regulatory approval for both the PrIME Technology and NuSep as it is the primary validation step for the technology.

Contact Details Email info@nusep.com Telephone +61 2 8415 7300 Web www.nusep.com Facsimile +61 2 8415 7399 ABN 33 120 047 556

NuSep Holdings Ltd 324 Burns Bay Rd Lane Cove NSW 2066

Postal Address P.O. Box 823 Lane Cove NSW 1595

– 2 –

In determining which application of the PrIME Technology to develop next, NuSep will select applications that better meet existing market requirements of medium to large size markets. Selection will also be based upon the shortest time to market and therefore the shortest path to a profitable revenue stream. Developing new applications will also involve developing consumable membranes and separation conditions to produce a faster, purer and/or higher yielding process than currently exists. Any new PrIME application will be ranked on a return on capital basis before a final selection will be made.

The PrIME Technology Business Model

The PrIME Technology is based on NuSep’s patented membranes. For NuSep to maximise the value of the PrIME Technology, it requires applications to be developed in order that it can sell the consumable membranes. Simply put, each new application of the PrIME Technology creates a new ongoing income for NuSep. As NuSep develops new applications it will:

• Spin out/Sell the applications; and

• Sell the consumable membranes to the owner of each application. Each new application will create an ongoing new income stream for NuSep.

Sale of the Application

Income streams from the sale of the application by NuSep may take the form of:

• cash on a trade sales/IPO;

• In species distribution of shares in the application company with the required funding provided by new investors;

• Joint venture with an existing industry participant/management buyout; and or

• Royalty and licensing income streams payable by the new owner to NuSep.

The Board’s strategy relies on the validation of the technology for the first product i.e. therapeutic plasma products. Once this has been established, the technology will be valued at a higher level and therefore the income stream for NuSep will be higher.

Sale of the Consumable Membranes

Every new application of PrIME will require a perpetual ongoing supply of the consumable membranes. Thus each new application becomes a new annuity income stream for NuSep. NuSep has intellectual property covering the membrane manufacturing process and the disposable cartridge concept. Additional intellectual property will be created to protect each application. NuSep also sells a research version of the PrIME Technology (ProteomeSep). This instrument will enable other researchers to develop their own applications of the PrIME Technology for which NuSep will then supply membranes. As an example of this approach, the IVF application was originally developed by Professor John Aitken of the University of Newcastle.

– 3 –

The PrIME Biologics Pte Ltd example

NuSep has funded the therapeutic plasma application of the PrIME Technology to this point. The funding required to bring this application to market is A$15m, which is more than the current total market capitalisation of NuSep. This has made total funding via NuSep difficult as it would require significant dilution to NuSep’s existing shareholders. For this reason, NuSep has sought to fund this application via the Singapore subsidiary which holds this application, PrIME Biologics Pte Ltd. By funding via PrIME Biologics NuSep has been able to attract prospective investors at the proposed enterprise value of A$50m. This valuation is supported by an independent valuation and the acquisition of the cGMP facility in Singapore for S$6m by the Luye Group in return for a 10% shareholding in PrIME Biologics. NuSep intends to use this funding model for future applications of the PrIME Technology. By adopting this model the Company is saving NuSep shareholders from significant dilution.

Current PrIME Technology Applications

Having developed the first commercial application of the PrIME Technology, NuSep is now refocusing its development efforts into new applications of the PrIME Technology which can be commercialised. Specific areas of interest are:

• Separation of human sperm for IVF;

• Separation and purification of recombinant proteins to be used as therapeutics

• Renal dialysis; and

• Toxin and pathogen removal.

Of these applications, the most advanced is the IVF sperm application. NuSep is finalising the commercial SpermSep instrument with the intention of starting a pre- market clinical trial by the end of this calendar year. Initial work has been undertaken in each of the other areas noted above. Funding to develop each of these areas will come from the repayment of the loans NuSep made to PrIME Biologics and other forms of support including government grants that the company can attract.

*ENDS*

For more information please contact:

Contact: Prakash Patel Managing Director +61 2 8415 7300

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.

– 4 –

With a 30 year heritage in biological separations, NuSep has forged a world class reputation for its innovative yet simple biological separation techniques based on its PrIME[1] technology. The PrIME technology has produced a number of world firsts 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:

==> picture [12 x 17] intentionally omitted <==

• Gels – NuSep manufactures and sells precast gels including the innovative nUView Gels, which can be visualised 2 minutes after use.

==> picture [12 x 17] intentionally omitted <==

• Separation Instruments – NuSep has developed two unique biological separation instruments. The ProteomeSep can separate biological samples into 8 fractions for use in the proteomic market. The SpermSep separates sperm for fertility treatments such as IVF.

==> picture [12 x 18] intentionally omitted <==

• 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

About PrIME Biologics Pte Ltd

PrIME Biologics is a Singapore based biotech company that has developed a disposable therapeutic plasma manufacturing process based on NuSep’s PrIME Technology. NuSep has a 90% shareholding in PrIME Biologics. PrIME Biologics process is based on the Pr eparative I solation by M embrane E lectrophoresis (PrIME) technology developed by NuSep. PrIME provides disposable modular processing that is ‘electronically’ driven membrane fractionation.

The PrIME process increases product yields to over 90% relative to the existing process 50% while increasing product safety. The PrIME has been shown to remove virus, bacteria, endotoxins and prions which cause ‘Mad Cow Disease’. Further, PrIME Biologics process can produce multiple plasma products in hours compared to days, which is required by the current manufacturers.

The initial application for the PrIME process will be the Currently Unprocessable Plasma which represents approximately 50% of all the plasma collected in many Asian countries.

1 PrIME stands for Pr eparative I solation by M embrane E lectrophoresis