MYECO GROUP LTD — Capital/Financing Update 2008

Jul 27, 2008

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ACN 064 755 237

TO: COMPANY ANNOUNCEMENTS OFFICE ASX LIMITED

DATE: 28 July 2008

LODGEMENT OF BONUS OPTIONS PROSPECTUS

Further to the announcement made on 23[rd] June 2008 regarding the issue of a new series of options, the Bonus Options Prospectus was lodged today with ASIC.

Following the despatch on 18[th] July 2008 of the “Options Issue” Prospectus to all the holders of options which expired unexercised on 31[st] December 2007, the Bonus Issue of Options will comprise that number of Options of the same class as being offered under the Options Issue up to a maximum of 276,172,149 dependent on the number taken up under the Options Issue.

Each new Option granted under the Bonus Prospectus will be issued free and is exercisable at 10 cents at any time up to 30 June 2011.

A copy of the Bonus Options Prospectus is attached.

John Wilson

Company Secretary

CARDIA TECHNOLOGIES LTD

REGISTERED OFFICE Suite 5.10, Level 5, 737 Burwood Rd, Hawthorn, Victoria Australia 3122 Telephone +61 3 9813 3228 Email: cardia@bigpond.com

CARDIA TECHNOLOGIES LIMITED

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ACN 064 755 237

PROSPECTUS

Issue of up to 276,172,149 options to be granted to members as a bonus issue on a pro rata basis with each option being exercisable at an exercise price of $0.10 (10 cents) at any time up to 30 June 2011

This is an important document that should be read in its entirety .

If you do not understand it you should consult your professional advisers without delay. The securities offered by this prospectus are of a speculative nature.

CORPORATE DIRECTORY

DIRECTORS

Patrick Volpe (Chairman) Peter Pena Robin Armstrong

COMPANY SECRETARY

John Wilson

REGISTERED AND PRINCIPAL OFFICE

Suite 510 Level 5 Pacific Tower 737 Burwood Road Hawthorn Vic 3122 Telephone: +61 3 9813 3228 Facsimile: +61 3 9813 2668

SHARE REGISTRY

Computershare Investor Services Pty Ltd Level 19 307 Queen Street Brisbane Qld 4000 Telephone: 1300 552 270 (within Australia) +61 3 9415 4000 (outside Australia) Facsimile: +61 7 3237 2152

TABLE OF CONTENTS

LETTER TO SHAREHOLDERS DETAILS OF THE ISSUE 1 CAPITAL STRUCTURE AND EFFECT OF THE ISSUE ON THE COMPANY 4 DIRECTORS 4 INTERESTS OF DIRECTORS, ADVISERS AND NAMED PERSONS 6 RISK FACTORS 8 CONTINUOUS DISCLOSURE AND ADDITIONAL MATTERS 9

FORWARD LOOKING STATEMENTS

Various statements in this prospectus constitute statements relating to intentions, future acts and events. Such statements are generally classified as forward looking statements and involve known and unknown risks, uncertainties and other important factors that could cause those future acts, events and circumstances to differ from the way or manner in which they are expressly or impliedly portrayed herein.

This prospectus is dated 28 July 2008.

A copy of this prospectus has been lodged with the Australian Securities and Investments Commission on 28 July 2008. The Australian Securities and Investments Commission take no responsibility for the contents of this prospectus.

NO SECURITIES WILL BE ISSUED ON THE BASIS OF THIS PROSPECTUS LATER THAN 13 MONTHS AFTER THE DATE THIS PROSPECTUS WAS ISSUED.

IMPORTANT DATES

EVENT	PROPOSED
	DATE
Record Date for determining
Entitlements to the Bonus
Issue	13 August 2008
Securities quoted on deferred
delivery basis	7 August 2008
Expected date of despatch of
Transaction Confirmation
Statements of this Prospectus
and the Options Issue	15 August 2008

The above dates are approximate only.

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ACN 064 755 237

28July 2008

Dear Member,

Pursuant to this Prospectus and with the approval of the members of the Company given at a general meeting of members held on 16[th] June 2008, the Company is making a bonus issue of Options to each person who is registered as the holder of a share in the capital of the Company on the Record Date to determine entitlements to the Issue.

The purpose of the bonus issue is to reward members for their loyalty and support and although no funds will be raised from the issue itself any capital raised from the exercise of the options will be utilised by the Company to fund future business opportunities.

The terms and conditions of the Options to be granted are set out under the heading "Details of the Issue" in this Prospectus.

Briefly, each New Option is being granted as a bonus and is exercisable at a price of $0.10 (10 cents) at any time up until 30 June 2011.

You will recollect that, at the General Meeting of members held on 16 June 2008, the members of the Company approved the grant of up to 196,167,308 Options (the “Options Issue”) to those persons who were the erstwhile holders of options expiring on 31 December 2007 (the “Options Holders”). The Options being offered under the Options Issue are being offered to the Option Holders and if the Options Issue is fully subscribed it will raise approximately $980,837 which will be applied for working capital purposes for the Company.

This issue of Options (the “Bonus issue”) will comprise that number of Options of the same class as being offered under the Options Issue which will be up to a maximum of 276,172,149 Options (assuming none of the option Holders take up their entitlements under the Options Issue) and will be a minimum of 80,004,841 (assuming all of the option Holders take up their entitlements under the Options Issue).

From a practical point of view some Option Holders are likely to subscribe for their entitlement under the Options Issue while others, for their own reasons (financial or otherwise), will forgo their entitlements under the Options Issue and their entitlements will then lapse. Consequently the exact number of Options to be granted under this Bonus Issue cannot yet be determined.

When that Shortfall under the Options Issue is known the Company will make a release to ASX which states the number of Options subscribed for under the Options Issue, the amount raised under the Options Issue, the Shortfall under the Options Issue, the number of Options which will comprise the Bonus Issue and the approximate ratio in which those Options will be granted to Members.

Each Members entitlement to Options under the Bonus Issue will be rounded down to the nearest whole Option and thus, fractional entitlements to Options will be disregarded in determining entitlements.

By way of information, under the timetable for the Bonus Issue and the Options Issue, as agreed in consultation with ASX, the Closing Date for the Options Issue is Friday 1 August 2008, the Shortfall under the Options Issue will be determined by Wednesday 6 August 2008 and the Record Date to determine entitlements to the Bonus Issue will be Tuesday 13 August 2008.

This Prospectus for the Bonus Issue will be despatched to Members entitled on or by Friday 15 August 2008.

Consequently by the time this Prospectus is issued, the Shortfall under the Options Issue will have been determined and the Prospectus that is despatched to each member as at the Record Date (13 August 2008) will be accompanied by either:

CARDIA TECHNOLOGIES LTD

REGISTERED OFFICE

Suite 5.10, Level 5, 737 Burwood Rd, Hawthorn, Victoria Australia 3122 Telephone +61 3 9813 3228 Email: jwilson@cardia.com.au

• (for Members registered on the Issuer Sponsored sub-register): a transaction confirmation statement which sets out the number of Options granted to the Member under the Bonus Issue. That transaction confirmation statement will contain the number of Options allotted to the Member under the Bonus Issue and this Prospectus and their Securityholders Reference Number.

• (for Members who hold their Shares in Cardia on the CHESS sub-register): an advice that sets out the number of Options granted to the Member under this Prospectus. At the end of the month of allotment, CHESS, (acting on behalf) of the Company will provide Members with holding statements that confirms the number of Options held and any transactions during that month. The CHESS statements will set out the current number of Options allotted to each holder under this Prospectus, give details of the Holder Identification Number and give details of the Sponsor.

You should read this Prospectus carefully and consult an appropriate professional adviser such as a stockbroker, your banker or solicitor if you do not understand any of the terms or conditions set out herein.

Yours faithfully,

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Patrick Volpe Chairman

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DETAILS OF THE ISSUE

1. THE ISSUE

By this Prospectus, the Company is making a bonus issue of Options (the “Bonus Issue”) to each person who is registered as the holder of an ordinary share in the capital of the Company at 5.00pm (AEST) on Tuesday 13 August 2008.

This issue of Options (the “Bonus issue”) will comprise that number of Options of the same class as being offered under the Options Issue as will be a maximum of 276,172,149 Options (assuming none of the option Holders take up their entitlements under the Options Issue (as defined in the Chairman’s letter above) and 80,004,841 (assuming all of the Option Holders (as defined in the Chairman’s letter above) take up their entitlements under the Options Issue). The intent is that, following the Bonus Issue and the proposals announced to the ASX and the subject of the meeting of Members on 16 June 2008, there will the 276,172,149 ordinary shares on issue and a like number of options extant.

From a practical point of view some Option Holders are likely to subscribe for their entitlement under the Options Issue while others, for their own reasons (financial or otherwise), will forgo their entitlements under the Options Issue which entitlements will then lapse. Consequently the exact number of Options to be granted as the Bonus Issue cannot yet be determined.

When that Shortfall in the Options Issue is known the Company will make a release to ASX which will state the number of Options subscribed for under the Options Issue, the amount raised under the Options Issue, the Shortfall, the number of Options which will comprise the Bonus Issue and the ratio in which those Options will be granted to Members.

Each Members entitlement to Options under this Bonus Issue will be rounded down to the nearest whole Option and thus, fractional entitlements to Options will be disregarded in determining entitlements.

By way of information, under the timetable for the Bonus Issue and the Options Issue, as agreed in consultation with ASX, the Closing Date for the Options Issue is Friday 1 August 2008, the Shortfall under the Options Issue will be determined by Wednesday 6 August 2008 and the Record Date to determine entitlements to the Bonus Issue will be Tuesday 13 August 2008.

This Prospectus for the Bonus Issue will be despatched to Members entitled on or by Friday 15 August 2008.

Consequently by the time this Prospectus is issued, the Shortfall under the Options Issue will have been determined and the Prospectus that is despatched to each member as at the Record Date (13 August 2008) will be accompanied by either:

• (for Members registered on the Issuer Sponsored sub-register): a transaction confirmation statement which sets out the number of Options granted to the Member under the Bonus Issue. That transaction confirmation statement will contain the number of Options allotted to the Member under the Bonus Issue and this Prospectus and their Securityholders Reference Number.

• (for Members who hold their Shares in Cardia on the CHESS sub-register): an advice that sets out the number of Options granted to the Member under this Prospectus. At the end of the month of allotment, CHESS, (acting on behalf) of the Company will provide Members with holding statements that confirms the number of Options held and any transactions during that month. The CHESS statements will set out the current number of Options allotted to each holder under this Prospectus, give details of the Holder Identification Number and give details of the Sponsor.

The terms and conditions of the Options are set out in Clause 2 below.

The ordinary shares issued on exercise of any of the Options shall rank equally in all respects with each other and with all other ordinary shares on issue from the time of their issue and allotment.

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1.1 Important Dates

Record Date to determine Entitlements to the Bonus Issue

Despatch of Prospectus and Transaction Confirmation Statements pursuant to this Prospectus and the Options Issue

Tuesday 13 August 2008

By Friday 15 August 2008

1.2 Entitlement and Acceptance Forms

There are no Entitlement and Acceptance forms for use in relation to this Bonus Issue. Members will automatically be granted the Options without being required to apply.

1.3 Payment for New Options

No monies are payable on grant of the Options.

1.4 No Rights Trading

As the Bonus Issue is non-renounceable there will be no rights trading.

1.5 Overseas Shareholders

This Prospectus does not constitute an offer in any jurisdiction outside of Australia and New Zealand or to any person to whom it would not be lawful to issue this Prospectus. The Bonus Issue will not be made to any person in any jurisdiction outside of Australia and New Zealand or to any person to whom it would not be lawful to issue this Prospectus. In accordance with the Listing Rules, and having regard to:

• (a) the number of persons entitled to receive the Bonus Issue resident outside Australia and New Zealand;

• (b) the number and value of Options such persons resident outside Australia and New Zealand would be granted; and

• (c) the cost of complying with the legal requirements and the requirements of regulatory authorities in places other than Australia and New Zealand,

the Directors of the Company consider that it is unreasonable to make the Bonus Issue to such persons and accordingly the Company will send each person otherwise entitled to receive this Prospectus but to whom the Bonus Issue will not be made, details of the Bonus Issue and advice that the Company will not grant Options to that person under the Bonus Issue. The Bonus Options that would otherwise be granted to such persons will instead be granted to a nominee who will sell them on the Stock Market conducted by ASX as soon as reasonably practicable after the Bonus Options are granted and commence trading on a delivery enforceable basis and account to the overseas optionholders for the proceeds of sale thereof less all direct selling costs relating thereto.

1.6 ASX Quotation

Application has been made and approval has been granted for the Options to be granted pursuant to this Prospectus to be listed for quotation by ASX. That approval was granted by a letter from ASX dated 21[st] July 2008.

Under the timetable approved by ASX and as lodged with the Appendix 3B being the Application for Listing of the Options to be granted under both the Options Issue and this Bonus Issue, trading in the Options will commence on a deferred delivery basis on Thursday 7[th] August 2008. ASX granted approval for the listing of approximately 276,172,149 Options the subject of both the Options Issue and this Bonus Issue.

1.7 Exposure Period

Notwithstanding that ASX has granted approval for listing of the Options on ASX and notwithstanding that no funds are being raised by this Bonus Issue, in accordance with Section 727 of the Act, this Prospectus is subject to an Exposure Period of seven days from the date of lodgement with ASIC. This period may be extended by ASIC for a further period of up to seven days.

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1.8 Costs and Expenses of the Bonus Issue

The total expenses of the Bonus Issue payable by the Company, including legal costs and expenses, printing costs, share registry and other costs and expenses are estimated to be $13000.

The estimated costs of the Issue are:

Legal Printing Share Registry, postage and sundry Total	$2,500 $3,000 $7,500
	$13,000

1.9 Enquiries

If you have any enquiries as to the terms of the Bonus Issue please contact

Mr John Wilson Company Secretary Suite 510 Level 5 Pacific Tower 737 Burwood Road Hawthorn Vic 3122 Telephone: +61 3 9813 3228 Facsimile: +61 3 9813 2668

2. TERMS AND CONDITIONS OF NEW OPTIONS

The terms and conditions of the Options are as follows:

• (a) Each option entitles the holder to subscribe for 1 ordinary share in Cardia Technologies Limited ACN 064 755 273 ("the Company") upon the payment of $0.10 (10 cents).

• (b) The options will lapse at 5.00pm (AEST) on 30 June 2011 ("Expiry Date").

• (c) The options are transferable.

• (d) There are no participating rights or entitlements inherent in these options and holders of the options will not be entitled to participate in new issues of capital that may be offered to shareholders during the currency of the option.

• (e) Optionholders have the right to exercise their options prior to the date of determining entitlements to any capital issues to the then existing shareholders of the Company made during the currency of the options, and will be given a period of not less than 10 Business Days notice before the record date to determine entitlements to the Issue in which to exercise the options.

• (f) In the event of any re-organisation (including reconstruction, consolidation, subdivision, reduction or return of capital) of the issued capital of the Company, the options will be reorganised as required by the Listing Rules, but in all other respects the terms of exercise will remain unchanged.

• (g) The options shall be exercisable at any time during the period ending on or before the Expiry Date (" Exercise Period ") by the delivery to the registered office of the Company of a notice in writing (" Notice ") stating the intention of the optionholder to exercise all or a specified number of options held by the optionholder accompanied by an Option Certificate or Holding Statement and a cheque made payable to the Company for the subscription moneys for the shares to be issued on exercise of the options the subject of the Notice. The Notice and cheque must be received by the Company during the Exercise Period. An exercise of only some options shall not affect the rights of the optionholder to the balance of the options held by the optionholder.

• (h) The Company shall allot the resultant shares and deliver a Holding Statement of shareholdings with a holders’ identification number within 10 Business Days of exercise of the options.

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• (i) The shares allotted shall rank, from the date of allotment, equally with the existing ordinary shares of the Company in all respects.

3. SHARE PRICE INFORMATION

The highest and lowest closing sale price of the Company's ordinary fully paid shares on ASX during the 3 months up to the date of this Prospectus and the respective dates of such sales were:

(a) Highest closing price: 5.2 cents on 30 May 2008; (b) Lowest closing price: 2.3 cents on 7 May 2008.

The last market sale price of the Company's ordinary fully paid shares on ASX on the day prior to the date of this Prospectus was $0.03 (3 cents) on 25July 2008.

The Company has only ordinary shares on issue.

4. SPECULATIVE NATURE OF OFFER AND PROJECTS

This Prospectus and the projects in which the Company has invested should be considered as speculative given the nature of the risks discussed under RISK FACTORS in this Prospectus.

CAPITAL STRUCTURE AND EFFECT OF THE ISSUE ON THE COMPANY

5. CAPITAL STRUCTURE

• 5.1 Existing Capital Structure

The existing capital of the Company comprises 276,172,149ordinary shares

5.2 Capital Structure on Completion of the Issue

On the issue and allotment of all Options offered pursuant to this Prospectus the capital of the Company will be 276,172,149 ordinary shares and a like number of Options (subject only to any variation to that number caused by rounding of entitlements pursuant to this Bonus Issue) exercisable at an exercise price of $0.10 at any time up until 30 June 2011.

6. EFFECT OF THE ISSUE ON THE COMPANY

The principal effect of the Bonus Issue on the Company will be that the total number of Options extant after the Bonus issue will approximate 276,172,149 Options as specified above.

DIRECTORS

Details of the directors of the Company are set out in detail in the Company's 2007 Annual Report.

Brief updated details are set out below.

7. DIRECTORS

Patrick Volpe

Patrick Volpe is Chairman of the Company.

Mr Volpe is also Chairman of Biograde Limited, A-Cap Resources Limited and Botswana Metals Limited: public companies listed on the ASX. Mr Volpe was a founding shareholder of all these companies.

Mr Volpe was successful in the listing of Cardia Mining Limited in 1996, and in 1999, restructured the company into an “incubator” based vehicle for early stage, start-up’s, research and development businesses and mineral exploration, reflected in a name change to Cardia Technologies Ltd.

Five business units consisting of start-up’s, early stage and research and development businesses were established or acquired in the market segments of medical biotech, agricultural biotech, water treatment technology, natural pharmaceuticals and mineral exploration.

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Under this incubator model Mr Volpe’s prime role has been to raise the risk capital required to develop start-up businesses to a stage where the companies require to be recapitalised via the Initial Public Offering (“IPO”) process and to raise funds for the commercialisation and marketing phase. By its very nature therefore the Company has not generated profits in prior years.

To date Mr Volpe has assisted in directing Cardia Technologies Limited to:

• List A-Cap Resources Limited (“A-Cap”) on the ASX to explore for uranium in Botswana. The profitability of the Company will be determined by its future exploration success.

• List Botswana Metals Limited (“BML”) on the ASX to explore for gold and base metal resources in Botswana. To date extensive mineralisation has been discovered however no resources within the has yet been delineated. The profitability of the Company will be determined by its future exploration success.

• List Dia-B Tech Limited (“Dia-B”) on the ASX. The Company is not expected to be profitable unless it can advance its projects to a commercial human drug or by selling its licence rights.

• Separate Aquenox Limited as an unlisted public company in 2007. The Company has been granted several patents over its water treatment technologies and has advanced the technology to commercialisation with sales now increasing in the car wash and other water treatment and recycling markets.

Information on each of A-Cap, BML and Dia-B can be accessed through ASX.

In general the business model adopted does not expect these companies to generate profits during the early stage of development, but should these technologies, early start-up businesses and exploration ventures prove successful, then the potential for future profits exists. To date none of these ventures are operating profitably.

From the period 1994 to 2001 Mr Volpe held board positions in early stage & start up business in the media, telecommunications and internet industries, including Media Entertainment Group Limited, E- Com Global Limited and Mintech-8 Limited (now Telezon Limited). Whilst on the board of these companies, Mr Volpe’s primary role was to raise the risk capital required to develop their businesses. At the time of leaving the board of these companies they were all still in the development stage and were not profitable.

Prior to 1999, Mr Volpe spent 15 years in the stockbroking industry after holding management positions with the National Australia Bank Ltd, Ansett Transport Industries Ltd and Pacific Dunlop Limited. Mr Volpe is a member of the Australian Society of CPA’s

Details of his interests in the Company are set out in Clauses 8 and 9.

Peter Pena

Mr Pena has been a non-executive director of the Company for 9 years. He is the Principal of a legal practice in Port Moresby specialising in commercial and international business law.

Details of his interests in the Company are set out in Clauses 8 and 9.

Robin Armstrong

Mr Armstrong is head of Corporate Department of Findlay & Co, Stockbrokers Ltd (“Findlays”) responsible for provision of client advice in corporate structuring, listings and capital raisings. He is a Director of both Findlays and Findlay & Co Stockbrokers (Underwriters) Pty Ltd and provides corporate advice to its clients in listings and capital raisings.

Mr Armstrong was previously a shareholder and principal of Sydney Commodity Services Pty Ltd, a Full Associate Member of the Sydney Futures Exchange (SFE). He had overall responsibility for the organisation and provided advisory and dealing services to wholesale and retail clients in futures contracts and options on futures contracts (covering local and international markets).

In 1983 Sydney Commodity Services Pty Ltd was acquired by Global Futures Pty Ltd and Mr Armstrong remained in the capacity as Managing Director until 1985. He assisted the company to become a Full Participant of the SFE and he actively provided financial services in share market indices, government bonds, banks, bills and currencies to both wholesale and retail clients.

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Following a period as a Local Participant trading on the Floor of the SFE Mr Armstrong joined Findlays in 1997.

Mr Armstrong’s special responsibilities as a Director of Aquenox are focussed on fund raising and introducing new business opportunities to the Company.

Details of his interests in the Company are set out in Clauses 8 and 9.

INTERESTS OF DIRECTORS, ADVISERS AND NAMED PERSONS

Except as otherwise set out herein or as otherwise advised to members in the Company’s Annual Reports for the periods ending 30 June 2006 and 30 June 2007, no Director, expert or professional adviser named herein now has or during the last two years has had any interest in the promotion of the Company, or any property proposed to be acquired by the Company in connection with its formation or promotion or the Offer. Further, no sums have been paid or agreed to be paid to a Director, expert or professional adviser in cash or Shares or otherwise by any person (in the case of a Director) either to induce him to become, or to qualify him as, a Director or otherwise for services rendered by him in connection with the promotion or formation of the Company or the Offer or (in the case of an expert or professional adviser) for services rendered by the expert or professional adviser in connection with the promotion or formation of the Company or the Offer.

8. DIRECTORS' AND OFFICERS’ INTERESTS IN SECURITIES

Directors and officers have interests in securities of the Company, both direct and indirect.

8.1 Relevant Interests in Securities

The relevant interests of the officers and directors, and their related parties as defined in Accounting Standard AASB 1017, in securities of the Company as at the date of this Prospectus are as follows:

are as follows:
Directors & Officers	Relevant Interest in Securities
	Ordinary Shares	Entitlement to Options
		under Options Issue
Patrick Volpe	39,098,123	27,312,791
Peter Pena	2,055,000	-
Robin Armstrong	8,750,000	1,791,626
John Wilson (Company Secretary)	950,019	800,000

9. DIRECTORS' FEES, REMUNERATION AND OTHER ENTITLEMENTS

In addition to interests in equities, details of the nature and amount of each element of the emolument of and fees paid or payable for other services to each director and the Company Secretary of the Company for each of the periods the period 1 July 2007 to 30 June 2008 and 1 July 2007 to the date of this Prospectus are set out in the tables below.

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REMUNERATION FOR THE PERIOD 1 JULY 2007 TO 30 JUNE 2008

REMUNERATION FOR THE PERIOD 1 JULY 2007 TO 30 JUNE 2008	REMUNERATION FOR THE PERIOD 1 JULY 2007 TO 30 JUNE 2008	REMUNERATION FOR THE PERIOD 1 JULY 2007 TO 30 JUNE 2008	REMUNERATION FOR THE PERIOD 1 JULY 2007 TO 30 JUNE 2008	REMUNERATION FOR THE PERIOD 1 JULY 2007 TO 30 JUNE 2008
Director	Directors Fees $	Fees for Other Services $	Superannuation $	Total $
Patrick Volpe	55,000	255,000	27,900	337,900
Peter Pena	45,000	-	4,050	49,050
Robin Armstrong	45,000	-	-	45,000
John Wilson (Company Secretary)	-	50,000	-	50,000

REMUNERATION FOR THE PERIOD 1 JULY 2008 TO 28 JULY 2008

REMUNERATION FOR THE PERIOD 1 JULY 2008 TO 28 JULY 2008	REMUNERATION FOR THE PERIOD 1 JULY 2008 TO 28 JULY 2008	REMUNERATION FOR THE PERIOD 1 JULY 2008 TO 28 JULY 2008	REMUNERATION FOR THE PERIOD 1 JULY 2008 TO 28 JULY 2008	REMUNERATION FOR THE PERIOD 1 JULY 2008 TO 28 JULY 2008
Director	Directors Fees $	Fees for Other Services $	Superannuation $	Total $
Patrick Volpe	4,583	21,250	2,325	28,158
Peter Pena	3,750	-	338	4,088
Robin Armstrong	3,750	-	-	3,750
John Wilson (Company Secretary)	-	4,167	-	4,167

In addition, the Company provides Directors Liability insurance.

Additionally, certain of the directors have other interests as follows:

Other Related Party Transactions

Save as otherwise set out herein; the directors are involved in the following related party transactions:

Mr Robin Armstrong

The Services of Mr Armstrong are provided by Williams Thomas Investments Pty Ltd, which receives payment of the moneys referred to above under the heading "Director Fees".

10. INTERESTS AND CONSENTS OF OTHER PERSONS

Computershare Investor Services Pty Ltd has given and has not, at the date of this Prospectus, withdrawn its written consent to being named in the Prospectus as the Share Registrar of the Company in the form and context in which it is named. Computershare Investor Services Pty Ltd has not participated in the preparation of the Prospectus and has only authorised or caused the issue of those parts of the Prospectus which comprise references to it as the Share Registrar of the Company in the form and context in which those references are included.

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RISK FACTORS

The operating and financial performance of the Company may be affected by a range of risk factors. While some risks can be mitigated by the Company’s plans and actions, many are beyond the control of the Company. As a consequence of these risks the Company’s share price may rise or fall

It is for this reason that investment in the Company should be regarded as speculative, and the Company nor its Directors or advisors provide no guarantees, either that profitability will be achieved, or with respect to the payment of dividends, return of capital or market value.

General risks include:

Share Market Risks . Members and optionholders as well as prospective investors (all herein called “investors”) should recognise that the prices of shares fall as well as rise. Many factors affect the price of shares including local and international stock markets, movements in interest rates, economic and political conditions and investor and consumer sentiment.

Investment Risks Generally . Risks of a general nature relating to investment in shares and securities generally and especially where the company in which the investment is made has a small market capitalisation.

Fiscal Risks . These involve the imposition of additional taxes, imposts and other charges by government from time to time relating to revenue or cash flow. Industry profitability can be affected by changes in tax policies, the interpretation and application thereof.

Currency Exchange and Other Risks . Revenue and expenditure in overseas jurisdictions are subject to the risk of fluctuations of international currency exchange markets. Foreign taxes, limitation on repatriation of earnings, compliance with foreign accounting and business laws, and cultural differences, carry a certain amount of risk. The nature of the Company's business is such that many underlying revenue streams, if they eventuate, will likely be in foreign currency through licensing deals. Accordingly the Company will, in that circumstance, be indirectly affected by such factors.

Macro Economic and Political Factors . Apart from exchange risks there are a wide range of other macro economic and political factors beyond the control of the Company which will affect the Company's operations including the consequences of terrorist and other activities which themselves impact adversely on the global economy, demand for and supply of commodities and share market conditions and share prices generally.

Political and Other Factors . These include such as changes in levels of consumer confidence affect consumption patterns and consequently demand for a wide range of products.

Effect of Economic Cycles: Economies move and operate in a cyclical manner which may have positive or adverse effects on markets, willingness of investors to invest and, consequently, on the capacity of any company to finance its activities or to market products. If the Company requires to raise funds or commercialise any products at a time when market conditions are depressed then this may have an adverse effect on the Company's ability to achieve these objectives. A failure to achieve those objectives as necessary may result in loss and damage both to the Company and to its members as a result of diminution in the value of their securities.

Sufficiency of Funding: The Company may need to raise additional funds from time to time. Any such fund raisings will be subject to factors beyond the control of the Company and its Directors.

Litigation: The Company is not presently involved in litigation and the Directors are not aware of any basis on which any litigation against the Company may arise. However, the prospect of future litigation relating to ownership of intellectual property, licensing terms and conditions and other matters must always be regarded as possible.

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Regulatory Risks: Operations by the Company may require approvals from regulatory authorities which may not be forthcoming or which may not be able to be obtained on terms acceptable to the Company. While the Company has no reason to believe that all requisite approvals will not be forthcoming Applicants should be aware that the Company cannot guarantee that any requisite approvals will be obtained. A failure to obtain any approvals would mean that the ability of the Company to develop or operate any project may be limited or restricted either in part or absolutely.

Risks related to Investment in Technology Generally: Investment in areas involving technology are generally subject to high levels of risk. Risks involve those associated with maintenance and development of intellectual property, competition, product obsolescence, the risk that research and development outcomes generally, although successful in laboratory conditions, may not be able to be replicated on a commercial basis either at all or profitably, the time frame for product development and market penetration and other risks such as relying on research personnel which may be contracted, the financial and marketing competence and ability of licensees and other persons.

Risk as to Profitability: Any ability of the Company to pay dividends will depend on it generating greater revenue and then deriving sufficient after-tax profits to be able to do so.

No Valuation: No formal or informal valuations have been completed of any of the intellectual property or other assets of the Company. The Company makes no representation as to the value of its intellectual property or any other such assets. All impending investors and their advisers should make their own assessments as to these matters after having regard to all of the matters contained in this Prospectus.

Generally: The possibility that, for a wide range of reasons, the Company's present strategies, plans, policies, intentions and expectations may not be able to be implemented..

CONTINUOUS DISCLOSURE AND ADDITIONAL MATTERS

11. DOCUMENTS AVAILABLE FOR INSPECTION

This Prospectus is issued pursuant to Section 713 of the Act, and has adopted the special Prospectus content rules for continuously quoted securities.

The Company is a disclosing entity for the purposes of Section 111AC of the Act. As such, it is subject to regular reporting and disclosure obligations which require it to disclose to ASX any information of which it is, or becomes, aware concerning the Company and which a reasonable person would expect to have a material effect on the price or value of securities of the Company.

Copies of documents lodged with ASIC in relation to the Company may be obtained from, or inspected, at an ASIC office.

The Company will provide a copy of any of the following documents free of charge to any person who requests a copy during the period this Prospectus remains open:

• 11.1 The annual financial report for the year ended 30 June 2007;

• 11.2 Any other financial statements (including any half-year financial statement) lodged by the Company with ASIC or ASX after the 2007 Annual Financial Report and before the lodgment of this Prospectus with ASIC ("Relevant Period"); and

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• 11.3 The following continuous disclosure notices documents used to notify ASX of information relating to the Company during the Relevant Period under provisions of the ASX Listing Rules:

• 18/07/2008 New Issue of Options

• 14/07/2008 Appendix 4C- Quarterly Report – 30[th] June 2008

• 01/07/2008 Lodgement of Options Prospectus

• 23/06/2008 Amendment to Announcement

• 23/06/2008 New Issue of Securities

• 23/06/2008 Application for Waiver under Listing Rule 10.13.3 approved by ASX limited

• 17/06/2008 Change of Director’s Interest

• 17/06/2008 Notice of change of Interest of Substantial Holder

• 16/06/2008 Results of General Meeting

• 20/05/2008 Anomalous uranium responses identified in the Airborne Radiometric Survey on the first of the Company’s eleven prospecting licences in Botswana

• 28/04/2008 Change of Director’s Interest Notice 22/04/2008 Proposed Grant of Options to the Holders of Options which expired on 31[st] December 2007

• 11/04/2008 Appendix 4C- Quarterly Report -31st March 2008 07/04/2008 Change of Director’s Interest Notice 07/04/2008 Substantial Shareholder Notice 04/03/2008 Exploration commences on Company’s Prospecting Licences 27/02/2008 Half-Year Report 31st December 2007 13/02/2008 Change of Director’s Interest Notice

• 30/01/2008 Change of Director’s Interest Notice 16/01/2008 Appendix 4C- Quarterly Report -31st December 2007 3/01/2008 Exercise of Options –Appendix 3B 20/12/2007 Exercise of Options-Appendix 3B 17/12/2007 Proposed Grant of Options to Holders of Options Expiring on 31st December 2007 3/12/2007 Expiry of 31st December 2007 Options

• 3/12/2007 Change of Director’s Interest Notice 30/11/2007 Results of Annual General Meeting 30/11/2007 Price Query 26/11/2007 Change of Director’s Interest Notice 9/11/2007 Results of General Meeting

• 29/10/2007 Notice of Annual General Meeting 25/10/2007 Commencement of Exploration on Company’s Prospecting Licences in Botswana 12/10/2007 Notice of General Meeting 8/10/2007 Annual General Meeting 5/10/2007 Commitments Test Entity–First Quarter Report

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In addition, copies of the following documents will be available during normal office hours free of charge at the registered office of the Company being Suite 510, Level 5, Pacific Tower, 737 Burwood Road, Hawthorn Victoria for not less than 12 months after the date of lodgment of this Prospectus:

• this Prospectus;

• the consents of each of the Directors required pursuant to Section 720 of the Act.

• the consent of Computershare Investor Services Pty Ltd.

12. RIGHTS ATTACHING TO SHARES

Full details of the rights attaching to the shares that will be issued on exercise of the Options granted pursuant to this Prospectus are set out in the Company's constitution. A copy of that constitution can be inspected at the Company's registered office during normal business hours.

A summary of the more significant rights attaching to the Company's shares is set out below. This summary is not exhaustive nor does it constitute a definite statement of the rights and liabilities of the Company's members. To obtain such a statement, Applicants should seek independent legal advice. Where a right will vary on change of status brief details of the variation is set out.

12.1 Ranking

The Shares will be fully paid ordinary shares and will rank equally in all respects with the existing ordinary shares in the Company.

12.2 Partly Paid Shares and Liability for Calls

The Company has no partly paid shares on issue.

12.3 Reports and Notices

Members are entitled to receive all notices, reports, accounts and other documents required to be furnished to members under the constitution of the Company, the Law and the Listing Rules.

12.4 General Meetings

Members are entitled to be present in person, or by proxy, attorney or representative to speak and to vote at general meetings of the Company. Members may requisition general meetings in accordance with the Law and the constitution of the Company.

12.5 Voting

Subject to any rights or restrictions for the time being attached to any class or classes of shares (at the present time there are none) at a general meeting of the Company every ordinary member present in person, or by proxy, attorney or representative shall on a show of hands have one vote and upon a poll every member present in person or by proxy, attorney or representative has one vote for every share held. A qualification to the above is that where a person is present at a meeting as proxy or representative for more than one member then on a show of hands that person shall have only one vote and not one vote for each person represented by him.

A member who holds a share which is not fully paid shall be entitled to a fraction of a vote equal to the proportion that the amount paid-up bears to the total issue price of the share.

12.6 Dividends

The Directors may declare and authorise the distribution, from the profits of the Company, of dividends to be distributed to members according to their rights and interests.

12.7 Winding Up

Subject to any special or preferential rights attaching to any class or classes of shares, members will be entitled in a winding up to share in any surplus assets of the Company in proportion to the shares held by them respectively, less any amount which remains unpaid on their shares at the time of distribution.

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12.8 Transfer of Shares

Subject to the constitution of the Company, the Law and the Listing Rules, the shares will be freely transferable.

12.9 Future Increases in Capital

The allotment and issue of shares is under the control of the Directors of the Company. Subject to restrictions on the allotment of shares to Directors or their Associates contained in the Listing Rules, the constitution of the Company and the Law, the Directors may allot or otherwise dispose of shares on such terms and conditions as they see fit.

12.10 Variation of Rights

At present the Company only has ordinary shares on issue. If shares of another class were issued, the rights, privileges and restrictions attaching to ordinary shares could be altered with the approval of a resolution passed at a separate general meeting of the holders of ordinary shares by a three-quarters majority of those holders who, being entitled to do so, vote at that meeting or with the written consent of the holders of at least three-quarters of the ordinary shares on issue, within two months of that general meeting.

12.11 Directors

The constitution of the Company contains provisions relating to the retirement of Directors by rotation (other than managing directors and alternate directors).

13. DIVIDENDS AND DIVIDEND POLICY

The Company has not paid dividends and its ability to pay dividends will depend on derivation of profits from operations generally.

14. DEFINITIONS

Certain expressions are used throughout this Prospectus. Where not otherwise defined in this Prospectus they have the following meanings:

" $ " and " A$ " means references to dollar amounts in Australian currency.

" the Act " means the Corporations Act 2001.

" AEDST " means Australian Eastern DayLight Standard Time.

" ASIC " means Australian Securities and Investments Commission.

" ASX " means ASX Limited and its controlled entities.

" Associates " has the meaning given to that term in the Act.

" Business Day " means those days other than a Saturday, Sunday, New Years Day, Australia Day, Good Friday, Easter Monday, Anzac Day, Christmas Day, Boxing Day and any other day which ASX shall declare and publish as not a Business Day.

" the Company " means Cardia Technologies Limited (ACN 064 755 237).

" Directors " or " Board " means the Directors of the Company.

" Listing Rules " means the Official Listing Rules of ASX.

" Official List " means the Official List of ASX.

" Options " means the options to acquire ordinary shares in the capital of the Company to be granted pursuant to this Prospectus.

" Prospectus " means this Prospectus as modified or varied by any supplementary Prospectus made by the Company and lodged with ASIC from time to time.

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15. DIRECTORS RESPONSIBILITY STATEMENT

The Directors of the Company report that for the purposes of Section 731 of the Act, they state that they have made all enquiries that were reasonable in the circumstances and have reasonable grounds to believe that any statements by them in this Prospectus are true and not misleading or deceptive, and that with respect to any other statements made in this Prospectus by persons other than the Directors, the Directors have made reasonable enquiries and have reasonable grounds to believe that persons making the statement or statements were competent to make such statements, those persons have given the consent required by Section 716(2) of the Act and have not withdrawn that consent before lodgement of this Prospectus with ASIC. Each Director of the Company consents to the lodgement of this Prospectus with ASIC, and has not withdrawn that consent prior to this Prospectus being lodged.

This Prospectus is prepared on the basis that:

• certain matters may be reasonably expected to be known to professional advisers of the kind with whom applicants may reasonably be expected to consult; and

• information is known to Applicants or their professional advisers by virtue of any Acts or laws of any State or Territory of Australia or the Commonwealth of Australia.

This Prospectus is dated 28 July 2008.

Signed on behalf of Cardia Technologies Limited

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Patrick Volpe CHAIRMAN