letter from chairman

"NuSep is hitting its targets and delivering on its promises.
In September 2009 we talked about Significant sales growth, increased production efficiencies, higher gross margins and significantly reduced losses. In February 2010 we delivered on these promises with our maiden operational or EBITDA profit of $89,984.
This is an incredible turn around, but that comment only tells half the story! NuSep is a Company that consistently achieves its goals. Without a doubt this turnaround is a direct result of a focused management and Board working hand in glove to achieve agreed targets. Let me highlight just two of our recent achievements:
Maiden operational profit for the six months to 31
December 2009; and
Constant Gels manufacturing pass rate over 90% which
has increased our gross margin to 44% of sales and an
operational profit to 31st December 2009.
Having achieved the long term goal, which we set two years
ago, of an operational profit we have now set a new goal.
We have set this new long term goal in light of the BioInquire acquisition, the commercial release of the SpermSep and the sales growth in both the Gels and ProteoFusion products.
Our new long term goal is:
To grow NuSep so that it has yearly sales of $100 million
and $20 million in profit per annum within 5 years.

Whilst this is a challenging goal, it is achievable. As a Board we believe it will be achieved through the commercialization of our patented PrIME technology. We have already taken the first steps in this direction with the launch of the second generation ProteomeSep and the acquisition of BioInquire.
This will be followed by the launch of the SpermSep early in the 2011 calendar year.
Importantly, we recently announced a 1:2 Rights Issue and as a sign of our commitment the Board and the Companys two largest shareholders underwrote $3m of this issue. The
Directors have also bought additional shares on market. Funds raised from this issue will be used to make the initial payment for the BioInquire acquisition and complete the SpermSep clinical trials. As a Board we dont anticipate any additional fund raisings for the foreseeable future.
Finally, I draw great satisfaction from the knowledge that we are bringing products to market which improve the lives of many people, particularly in the IVF community. These are products which redefine BioSeparations such as the ɳUView gels, while also creating commercial rewards for our shareholders. We see NuSep as the perfect synergy of Science and Commercial reality. I look forward to reporting our profit results in August this year.
Yours sincerely,
John Manusu
Executive Chairman