MYECO GROUP LTD — Capital/Financing Update 2008

Jul 17, 2008

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ACN 064 755 237

TO: COMPANY ANNOUNCEMENTS OFFICE AUSTRALIAN SECURITIES EXCHANGE

DATE: 18 July 2008

NEW ISSUE OF OPTIONS

In terms of the timetable for the issue of up to 196,167,308 30[th] June 2011 options which was released to the market on 23[rd] June 2008, a Prospectus will be dispatched today to all the holders of options which expired unexercised on 31[st] December 2007.

A copy of the 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

Grant of 196,167,308 options at an issue price of $0.005 (1/2 of a cent) being exercisable at an exercise price of $0.10 (10 cents) at any time up until 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

AUDITOR

Bentleys MRI Level 7 114 William Street MELBOURNE VICTORIA 3000 Telephone: (03) 9274 0600 Facsimile: (03) 9274 0736

SHARE REGISTRY

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

TABLE OF CONTENTS

TABLE OF CONTENTS
LETTER TO SHAREHOLDERS
DETAILS OF THE ISSUE	2
CAPITAL STRUCTURE AND EFFECT OF
THE ISSUE ON THE COMPANY	6
DIRECTORS	8
INTERESTS OF DIRECTORS, ADVISERS
AND NAMED PERSONS	9
RISK FACTORS	11
CONTINUOUS DISCLOSURE AND
ADDITIONAL MATTERS	12

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.

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

This Prospectus is dated 1 July 2008.

A copy of this Prospectus has been lodged with the Australian Securities and Investments Commission on 1 July 2008. The Australian Securities and Investments Commission take no responsibility for the contents of this Prospectus.

IMPORTANT DATES

EVENT	PROPOSED
	DATE
Despatch of Prospectus	18 July 2008
Closing Date	1 August 2008
Securities quoted on deferred
delivery basis	7 August 2008
Expected date of despatch of
Transaction Confirmation
Statements	15 August 2008

The above dates are approximate only.

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ACN 064 755 237

1 July 2008

Dear Offeree,

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 offering each person who was registered as the holder of an option to acquire an ordinary share expiring on 31 December 2007 (a "31 December Option") at the time at which that 31 December Option expired, the right to acquire a New Option for each 31 December Option then held.

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

Briefly, each New Option is being granted at an issue price of $0.005 (1/2 of a cent) being exercisable at a price of $0.10 (10 cents) at any time up until 30 June 2011.

If fully subscribed, the Issue will raise approximately $980,837 which will be applied for working capital purposes as set out under Application of Funds in Clause 1.20.

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.

Any investment in securities of the Company should be regarded as speculative and you should ensure that an investment meets your own investment parameters and risk profile before being undertaken.

Yours faithfully,

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Patrick Volpe Chairman

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

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DETAILS OF THE ISSUE

1. THE OFFER

Before making a decision to invest or subscribe for Securities each Applicant should read this Prospectus in full, having particular regard to risk factors, their own investment parameters and, as necessary, seek independent professional advice from appropriate advisers.

An investment in the Company should be considered as a speculative investment.

By this Prospectus, the Company offers each person who was registered as the holder of an option granted by the Company exercisable at $0.10 per option and expiring on 31 December 2007 (a "31 December Option"), one New Option to acquire an ordinary share in the capital of the Company for every 31 December Option held by each such person at the time at which it expired without exercise at 5.00pm (AEDST) on 31 December 2007.

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

The ordinary shares issued on exercise of any of the New 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.

• 1.1 Important Dates

– Closing Date Latest date for acceptance and payment in full 1 August 2008 Securities quoted on deferred delivery basis. 7 August 2008 Expected date of despatch of Transaction Confirmation Statements 15 August 2008

1.2 Entitlement and Acceptance Forms

Accompanying this Prospectus is a personalised Entitlement and Acceptance form for you setting out your entitlement for New Options.

1.3 Payment for New Options

The issue price of the New Options the subject of the Issue is payable in full on application. Cheques must be made out in Australian currency.

Cheques in Australian currency forwarded to the Company’s Share Registry at the address shown in Clause 1.14 below must be made payable to " Cardia Technologies Limited Subscription A/c " and crossed "Not Negotiable".

1.4 Opening and Closing of the Offer

The Offer will open on Friday 18 July 2008 and will close at 5.00pm (AEDST) on 1 August 2008 (the Closing Date).

• 1.5 Underwriting

The issue is not underwritten.

• 1.6 No Rights Trading

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

1.7 Related Party Matters

On 16 June 2008 the Members of the Company approved each of the Directors of the Company and their Associates and Related Parties participating in this issue of New Options. The persons in respect of whom such approval was granted were Vermar Pty Ltd (which is an associate of Mr Patrick John Volpe) as to 27,312,791 New Options and William Thomas Investments Pty Ltd (which is an associate of Mr Robin Gerald Armstrong) as to 1,791,626 New Options.

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1.8 ASX Waiver

Likewise to facilitate the proposed issue , on 20 June 2008 ASX advised the Company that it had granted a waiver from the operation of listing rule 10.13.3 to the extent necessary to permit the issue of the New Options to Vermar Pty Ltd and William Thomas Investments Pty Ltd to be issued no later than 15 August 2008.

1.9 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. In accordance with the Listing Rules, and having regard to:

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

• (b) the number and value of New Options the such persons resident outside Australia and New Zealand would be offered; 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 an offer to such persons and accordingly the Company will send each person otherwise entitled to receive the offer but to whom the Offer will not be made, details of the Issue and advice that the Company will not offer New Options to that person.

Nominees applying for New Options on behalf of overseas residents are responsible for ensuring that such an application does not breach any regulation applicable to any such overseas resident.

Lodgement of Application Forms accompanied by the relevant application moneys will be taken by the Company to constitute a representation from the Applicant that no breaches of any such regulations have occurred. Applicants, who are nominees, or persons proposing to act as nominees, should seek independent advice as to how they should proceed.

1.10 ASX Quotation

Application will be made within three (3) business days of the issue of this Prospectus for permission for the Securities issued allotted or granted pursuant to this Prospectus to be listed for quotation by ASX.

If permission is not granted for the securities offered for subscription by this Prospectus to be listed for quotation on the stock market of ASX within 12 weeks after the date of the issue of this Prospectus, the Company, in accordance with the Corporations Act 2001, will either:

• (a) repay to applicants all moneys received by it;

• (b) issue a supplementary prospectus advising that the New Options will not be listed on ASX and give applicants one month to withdraw their applications and be repaid in full.

No interest will be paid on any moneys repaid.

1.11 Exposure Period

In accordance with Chapter 6D 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. The purpose of the Exposure Period is to enable this prospectus to be examined by market participants prior to the raising of funds. If this prospectus is found to be deficient, applications received during the Exposure Period will be dealt with in accordance with section 724 of the Act. Applications received prior to the expiration of the Exposure Period will not be processed until after the expiry of the Exposure Period. No preference will be conferred on applications received during the Exposure Period and all applications received during the Exposure Period will be treated as if they were simultaneously received on the Opening Date.

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1.12 Costs and Expenses of the Issue

The total expenses of the Issue payable by the Company, including legal costs and expenses, printing costs, share registry and other costs and expenses are estimated to be $16,500. These expenses are detailed in Clause 1.20 dealing with application of proceeds of the Issue

1.13 Taxation and Stamp Duty Implications

Applicants should seek their own independent advice in relation to matters relating to the operation of taxation laws in Australia and taxation and stamp duty laws in New Zealand.

The Company is unable to give advice on taxation matters generally, as each Applicant's position will relate to their own specific circumstances.

Applicants should satisfy themselves of possible taxation consequences of purchases and sales of securities by consulting their own professional tax advisers.

1.14 Action by Applicants

Duly completed Entitlement and Acceptance Forms should be lodged with the Company's Share Registry by using the enclosed reply paid envelope or otherwise delivered to the Share Registry at its address set out below and in the Corporate Directory to reach the Share Registry before or on the Closing Date.

Computershare Investor Services Pty Ltd

Level 19, 307 Queen Street Brisbane Qld 4000

Telephone:

(within Australia): 1300 552 270 (outside Australia): +61 3 9415 4000 Facsimile: +61 7 3237 2152

1.15 Acceptance of Applications for Securities

If an Entitlement and Acceptance Form is not completed properly, or if the accompanying payment is for the wrong amount, it may still be treated as valid. The decision of the Company as to whether to treat an acceptance as valid or how to construe it will be final.

1.16 Minimum Subscription

There is no minimum subscription.

1.17 Allotment

In accordance with the provisions of the Corporations Act 2001, all subscription moneys shall, pending allotment and issue of the New Options pursuant to this Issue, be held by the Company in trust in a bank account established solely for the purpose of depositing application moneys received. Any interest earned on those moneys shall be to the Company's account. Transaction Confirmation Statements will be despatched on 15 August 2008.

1.18 Proposed bonus issue of additional options

As advised to ASX and set out in detail in the Appendix 3B lodged by the Company with ASX in relation to the issue, it is intended that, subsequent to the completion of this issue and the determination of any shortfall in take-up by the persons entitled to subscribe for the New Options on the terms of the offer herein contained, it is intended that the Company will make a bonus issue of options to all members on the register on the record date to determine entitlements thereto. As indicated in the Appendix 3B lodged with ASX, that Record Date will be Tuesday 13August 2008.

The total number of options that will comprise the bonus issue will be that number which represents the difference between the number of New Options taken up pursuant to this issue and up to 276,172,149 options. The intent is that, following the bonus component of the proposals announced to ASX in the appendix 3B, there will the 276,172,149 ordinary shares on issue and a like number of options subject only to the need for the bonus issue of options to be made on a commercially sensible ratio which is acceptable to ASX. The existence of the bonus component of the proposals announced

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to ASX may be considered as a relevant consideration by those persons who are members but are also entitled to accept the offer made under this prospectus.

1.19 Enquiries

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

Mr John Wilson

Company Secretary Suite 510 Level 5 Pacific Tower 737 Burwood Road Hawthorn Vic 3122 Telephone: +613 9813 3228 Facsimile: +61 3 9813 2668

1.20 Application of Funds

The funds raised by the Issue will be applied, first, to pay the costs of the Issue (see estimate below) and, thereafter, to meet ongoing corporate operating costs and provide working capital.

The estimated costs of the Issue are:

Legal Printing Share Registry, postage and sundry Total	$2,000 $6,000 $8,500
	$16,500

2. TERMS AND CONDITIONS OF NEW OPTIONS

The terms and conditions of the New 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[th] May 2008; (b) Lowest closing price: 2.0 cents on 3[rd] April 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 $0.035 (3.5 cents) on 30[th] June 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 276,172,149 ordinary shares:

• 5.2 Capital Structure on Completion of the Issue

On the issue and allotment of all New Options offered pursuant to this Prospectus (assuming the Issue is fully subscribed) the capital of the Company will be 276,172,149 ordinary shares and 196,167,308 options to acquire ordinary shares exercisable at an exercise price of $0.10 at any time up until 30 June 2011.

Applicants should note however that on completion of the proposed bonus component of the proposals announced to ASX the total number of Options on Issue will increase to approximately 276,172,149 options.

6. EFFECT OF THE ISSUE ON THE COMPANY

The principal effects of the Issue on the Company will be that:

• 6.1 the Company will raise an amount of $ 980,837 (less the costs of the Issue) which will be applied for the purposes set out in Clause 1.20. In addition, the receipt of the subscription moneys will alter the net asset backing of each share on issue in the capital of the Company.

• 6.2 the capital of the Company will be that set out in 5.2 above.

The effect of the Issue on the Balance Sheet of the Company is set out below. The Pro-forma Balance Sheet is based on the Company’s management accounts as at 31 May 2008.

The Pro-forma statement assumes that the Issue is fully subscribed, that the costs of the Issue have been paid and that the net proceeds of the Issue have been received as cash.

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CONSOLIDATED BALANCE SHEETS

Notes CURRENT ASSETS Cash and cash equivalents Trade and other receivables TOTAL CURRENT ASSETS NON-CURRENT ASSETS Investments accounted for using the equity method Property, plant and equipment Financial assets Other non current assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Short-term provisions TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Contributed Equity Reserves Accumulated losses TOTAL PARENT ENTITY INTEREST Outside Equity Interest in Controlled Entities TOTAL EQUITY	Audit Reviewed Balance Sheet 31/12/2007 Unaudited Management Accounts 31/05/2008 Proforma based on 31/05/2008 Management accounts 5,603,370 5,485,678 6,450,015 52,864 71,260 71,260
	5,656,234 5,556,938 6,521,275
	297,964 297,964 297,964 17,492 13,864 13,864 1,172,565 40,854 1,128,641 45,224 1,128,641 45,224
	1,528,875 1,485,693 1,485,693
	7,185,109 7,042,631 8,006,968
	152,353 153,993 153,993 23,968 32,224 32,224
	176,321 186,217 186,217
	176,321 186,217 186,217
	7,008,788 6,856,414 7,820,751
	22,429,214 22,427,510 22,427,510 250,427 (67,132) 897,205 (15,716,426) (15,549,175) (15,549,175)
	6,963,215 6,811,203 7,775,540 45,573 45,211 45,211
	7,008,788 6856,414 7,820,751

The Pro-forma Balance Sheet based on the management accounts as at 31 May 2008 assumes that the Issue is fully subscribed, that the costs of the Issue have been paid and that the net proceeds of the Issue have been received as cash.

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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.

Under this incubator model Mr Volpe’s prime role has been to raise the risk capital required to develop startup 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 ofthe Australian Society of CPA’s

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

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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.

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, 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 save and except that Bentleys MRIare auditor of the Company and have received payment of professional fees for audit and other services as follows: namely an amount of $9,500 plus GST in relation to the audit for the financial year ended 30 June 2006, and an amount of $13,000 plus GST in relation to the audit for the financial year ended 30 June 2007 together with an amount of $10,000 plus GST in relation to the audit review process for the 6 month period year ended 31 December 2007 . At the date hereof no such payments have been made save as set out herein and, save as set out herein, all such payments made in the period of since incorporation of the Company have been paid or are payable in cash.

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:

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Directors & Officers

Relevant Interest in Securities

	Ordinary Shares	Entitlement to New
		Options
Patrick Volpe	39,098,123	27,312,791
Peter Pena	2,055,000	-
Robin Armstrong	8,750,000	1,791,626
John Wilson (Company	950,019	800,000
Secretary)

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 the period 1 July 2007 to 31 May 2008 are set out in the table below.

Director	Directors Fees $	Fees for Other Services $	Superannuation $	Total $
Patrick Volpe	50,417	233,750	25,575	309,742
Peter Pena	41,250	-	3,713	44,963
Robin Armstrong	41,250	-	-	41,250
John Wilson	-	42,788	-	42,788

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 in the table in Clause 9 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.

Bentleys MRI have given and not withdrawn its written consent to be named herein as Auditor of the Company in the form and context in which it is so named. In addition, Bentleys MRI has given and not withdrawn its written consent to the despatch of this prospectus with references to its Audit Review of the Balance Sheet of the Company as at 31/12/ 2007 being included herein, either expressly or by inference, in the form and context in which all such references are so included. Bentleys MRIhas had no involvement in the preparation of this prospectus other than the inclusion of such references and has not given any professional or other advice in respect of any other part of this prospectus. Bentleys MRI does not accept any liability to any person in respect of any false or misleading statement in, or omission from, any other part of this prospectus.

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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.

Applicants for shares in the Company should carefully consider the risk factors set out below, as well as the other information contained in this Prospectus. If you are in doubt regarding the terms and conditions of this prospectus you should consult your stockbroker or other professional adviser.

General risks include:

Share Market Risks . Potential 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 has limited financial resources and 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.

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

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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 lodged by the Company after the 2007 Annual Financial Report and before the lodgment of this Prospectus with ASIC ("Relevant Period"); and

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

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 Change of Director’s Interest 17/06/2008 Notice of change of Interest of Substantial Holder 16/06/2008 Results of General Meeting

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20/05/2008 Anomalous uranium responses identified in the Airborne Radiometric Survey on the first of the Company’s eleven prospecting licences in Botswana 15/05/2008 Notice of General Meeting 28/04/2008 Change of Director’s Interest Notice 22/04/2008 Proposed Grant of New Options to the Holders of Options which expired on 31st 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 New 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

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.

12. RIGHTS ATTACHING TO SHARES

The capital of the Company comprises options to acquire ordinary 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.

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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.

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.

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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. These 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.

" Issue " means the issue of Options pursuant to this Prospectus.

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

" Official List " means the Official List of ASX.

" New 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.

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

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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 1 July 2008.

Signed on behalf of Cardia Technologies Limited

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John Wilson Company Secretary