MEMPHASYS LIMITED. — Capital/Financing Update 2016

Nov 14, 2016

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ASX Release

Sydney, Australia Tuesday 15 November 2016

CLARIFICATION ANNOUNCEMENT – CONVERTIBLE NOTES

20 September 2016 Announcement

Memphasys Limited (ASX:MEM) ( Company ) makes this announcement to clarify its announcement released to ASX on 20 September 2016 with respect to a capital raising completed by the Company through the issue of secured convertible notes ( Notes ).

The Company has entered into secured Convertible Note Deeds with four investors, Ms Alison Coutts, an entity associated with Ms Alison Coutts, Mr Andrew Goodall and Prof. John Aitken, for total consideration of $940,000.

The key terms of the Convertible Note Deeds are described in the Company’s 20 September 2016 announcement.

The below seeks to clarify the position with respect to the ability of the Notes to be converted into Convertible Securities, and subsequently, into ordinary shares in the Company.

Convertible Note Deed between the Company and Prof. John Aitken

On 19 September 2016, the Company entered into a Convertible Note Deed with Prof. John Aitken. Prof. John Aitken is not a related party of the Company. The terms of the Convertible Note Deed have since been amended to comply with the Listing Rules.

The definition of “conversion conditions” in the Convertible Note Deed has been amended as follows:

1. The Company obtaining shareholder approval for the issue of the Convertible Securities pursuant to chapter 7 of the Listing Rules; or

2. The Company having placement capacity under chapter 7 of the Listing Rules to issue the Convertible Securities.

As the Company had placement capacity to issue the Convertible Securities to Prof. Aitken at the time the Convertible Note Deed was entered into, the conversion conditions have been satisfied. The Notes are now able to be converted, at Prof. Aitken’s election, into ordinary shares in the Company (and therefore are classified as Convertible Securities within the meaning of the Listing Rules).

Inadvertently, the Company did not lodge an Appendix 3B at the time of satisfaction of the conversion conditions. After consultation with ASX, and at the request of ASX, the Company has released an Appendix 3B in relation to the issue of Convertible Securities to Prof. Aitken with this announcement.

Convertible Note Deed between the Company and the related parties

On 16 September 2016, the Company entered into Convertible Note Deeds with Ms Alison Coutts, an entity associated with Ms Alison Coutts and Mr Andrew Goodall, each related parties of the Company within the meaning of the Listing Rules. The terms of each of the Convertible Note Deeds have since been amended to comply with the Listing Rules.

Postal Address Contact Details E info@memphasys.com P.O. Box 2202 P +612 8415 7300 W memphasys.com Homebush West NSW 2140 F +612 8415 7399 ABN 33 120 047 556

Memphasys Holdings Limited 30-32 Richmond Road Homebush West NSW 2140

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The definition of “conversion condition” in the Convertible Note Deeds has been amended as follows:

• The Company obtaining Shareholder approval for the issue of Convertible Securities pursuant to chapter 10 of the ASX Listing Rules.

Presently, and at all times prior to the Company obtaining shareholder approval for the issue of Convertible Securities, the Notes only entitle the directors to be repaid their principal, plus interest. The Notes carry no conversion rights unless approved by shareholders.

The Company proposes calling a general meeting of shareholders in the near future for the purposes of seeking approval for the issue of the Convertible Securities pursuant to Listing Rule 10.11.

As shareholder approval has not been obtained for the issue of Convertible Securities, the Company does not consider that it has issued securities to the directors within the meaning of the Listing Rules. If shareholder approval is obtained for the issue of Convertible Securities to the directors, the Company will lodge Appendices 3Y and 3B within the time periods as required by the Listing Rules.

28 October 2016 Announcement

Further to the Company’s announcement to ASX on 28 October 2016, the Company advises that it has submitted a formal waiver application to ASX in respect of Listing Rule 10.1 to permit the granting of security over the Company to related parties under the Convertible Note Deeds.

The Company will update shareholders whether such waiver is granted by ASX and if so, on what terms.

For further information please contact:

Alison Coutts Executive Chairman +61 2 8415 7300 Alison.coutts@memphasys.com

Postal Address Contact Details P.O. Box 2202 P +612 8415 7300 Homebush West NSW 2140 F +612 8415 7399

E info@memphasys.com W memphasys.com ABN 33 120 047 556

Memphasys Holdings Limited 30-32 Richmond Road Homebush West NSW 2140