3 SCIENCE OF SUFFER- ING

VIBROVEINUPDATE2IN THIS ISSUE

Dear Shareholders,

A little over seven months ago we launched the Turbine at the 2014 Santos Tour Down Under. Today we are shipping to 36 countries, have more than 12,000 people actively engaged and liking us on Facebook and a growing number of customers and distributors both locally and globally.

Over the last four months we completed the Ridewiser trial, which showed cyclists using the Turbine can ride further, faster. We have rapidly built the awareness of the Turbine via marketing, PR, digital and social media campaigns which have helped grow our database to over 18,000 people. Importantly, this has delivered sales!

This marketing schedule has been strategically implemented to socialise the technology within the cycling community. A program that is vitally important as we increasingly focus on the opportunity within the international sport sector and prepare for the launch of our sleep product for snoring later this year.

Successfully registering the Turbine as a medical device with the FDA was a critical milestone. This level of compliance and quality control is of the utmost importance to Rhinomed. We will continue to broaden our regulatory program and update you when each of these milestones are achieved.

Australia provides a great entry point through which we can test and trial our new technologies, systems and strategies. It is an environment conducive to research and development. However, our focus has always been and remains taking an Australian technology to the world market. The global opportunity is significant and our company is being built to ensure we have the capabilities in place to succeed on a global scale.

We are currently working to deliver several key milestones:

• In September the Turbine will be an exhibitor at the 2014 Interbike trade show. Taking place in Las Vegas September 8-12, Interbike is the largest cycling industry exhibition and trade show on the planet. It’s where manufacturers, retailers and media conduct the global business of cycling. The Rhinomed team, led by VP Global Sales and Distribution Matt Hurle, will introduce and showcase the benefits of the Turbine and we look forward to reporting the results.

A M E S S A G E F R O M T H E C E OINVESTOR NEWSLET TER

WINTER/SPRING 2014

LEVEL 1, 4-10 AMSTERDAM ST, RICHMOND, VICTORIA 3121 tel: +61 (0) 3 8416 0900 fax: +61 (0) 3 8080 0796

• Continuing to build our distribution network both in Australia and overseas. We are working towards confirming distribution agreements in several new geographic regions. We recently announced distribution agreements in both Australia and Israel.

• In late August and early September, the Vuelta a España takes place. It’s the final major road race of the European season – a great and gruelling three-week tour. We expect the Turbine to have a very real presence. The team, including former Tour de France green jersey winner Baden Cooke, has done a fantastic job introducing the Turbine to the cycling elite on the UCI WorldTour. You can find out more by visiting the Rhinomed Facebook page.

• Our R&D program is continuing to identify new opportunities to improve the Turbine experience for customers. In mid September we will commence shipping Turbine 1.1, which is made with a softer material offering more grip and a better comfort, fit and feel profile.

• The prototyping for the coming snoring product is now complete. Branding and packaging is in development and we look forward to sharing details on the program closer to its launch. Our snoring product is our first foray into the global sleep market.

• In June we appointed Melbourne based IDT to assist us with the Sumatriptan drug program. This is an important proof of concept program that seeks to validate the technology as a drug delivery platform. IDT’s subsidiary, CMAX, will be undertaking the clinical trial at their Royal Adelaide Hospital trial facility later this year.

• Over the next month we will update shareholders on the significant progress made with the Vibrovein asset and our plans for this exciting technology. You can find out more about the Vibrovein in this newsletter.

TURBINE UPDATE

CHRIS FROOME 4 5 7FITNESS

FIRST

“Successfully registering the Turbine as a medical device with the

FDA was a critical milestone.”

DRUG & SLEEPUPDATE6 RETAIL

EXPANSION8

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The Turbine is rapidly gaining acceptance as an essential part of an athlete’s kit. If you’re going to be breathing hard, getting that extra air and the benefit it delivers is critical.

Following the release of the results from the Ridewiser trial conducted by former Australian Olympic cyclist Rob Crowe, which showed riders could produce an average 3.7% more power and ride a further 143 meters when using the Turbine at high exertion levels, we will now investigate exactly how the Turbine delivers these outcomes. We are currently scoping a trial with a leading Australian sports scientist at an Australian University. This kind of program seeks to build on the existing data set. We remain committed to ensuring all our technology is based on hard clinical data.

Rhinomed is built on a dedication to constant innovation. We are continually working on ways to improve the technology so that our customers experience a premium product and the best service possible.

As a result, from early September we will be shipping a new version of the Turbine which leverages the same unique design, but incorporates new materials which are softer and have improved grip. We have also listened to your feedback that the product should be more visible. To achieve this, and in homage to the yellow jersey worn by the winner of all major races, Turbine 1.1 will be produced in a dashing yellow.

T U R B I N E U P D A T E

You can find out more about the science of breathing by visiting

www.theturbine.com

CATCH YOUR BREATH AT THETURBINE.COM

THE SECRET TO EASIER BREATHING IS RIGHT UNDER YOUR NOSE.

Throughout the last couple of months we have been steadily building the awareness of the Turbine. Our goal is to not only change the way you breathe, but also change the way you think about breathing. It’s one of those things you do automatically, yet many people don’t breathe optimally. The Turbine helps you focus on breathing through the nose – a form of breathing which has been shown to improve your physical health by minimising shortness of breath, and also improving your mental health.

To highlight the common problem of feeling breathless during exercise (dyspnea), and to provide the simple solution of breathing more easily, we created a new campaign that was underpinned by the simple yet compelling proposition that the secret to easier breathing…is right under your nose.

The campaign features our Sports Medical Advisor and eight times Hawaiian Ironman Dr Mitch Anderson. It was launched mid July with extensive marketing and promotional activity including, social media, advertising on SBS during the Tour de France broadcast, Men’s Health, Cycling Tips and a multi-channel media partnership with the Fitness First health club network, which included a TV commercial, double page magazine spread (circulation 103,000), iPad app, a sampling program and signage.

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CATCH YOUR BREATH AT THETURBINE.COM

THE SECRET TO EASIER BREATHING IS RIGHT UNDER YOUR NOSE.

In July Rhinomed sponsored one of the world’s toughest indoor cycling challenges – the Turbine Science of Suffering. Held at the Victorian Institute of Sport (VIS) on July 20, the Turbine Science of Suffering saw the largest known group of cyclists attempt to complete 10 Sufferfest videos back-to-back.

The Sufferfest videos pit the indoor cyclist against the cycling pros on the hardest stages from a range of the world’s toughest road races including the Tour de France, Paris-Roubaix and the Giro D’italia.

The event also had a team category with a number of Victorian Institute of Sport athletes competing, including Melbourne Vixens premiership winning duo Lizzy Watson and Kate Moloney, Olympic rowing medalists Matt Ryan and Karsten Forsterling and Paralympic Javelin bronze medalist Madeline Hogan.

All proceeds from the event went to the national depression and anxiety initiative, beyondblue.

S C I E N C E O F S U F F E R I N G

We would like to congratulate the following participants who successfully completed all 10 Sufferfest videos:

Ŏ Brook Kennedy

Ŏ Chris Thompson

Ŏ Craig Mitchell

Ŏ Craig Percival

Ŏ Duane Parnell

Ŏ Kate Patterson

Ŏ Katie Goodrope

Ŏ Neil Brydges

Ŏ Shane Miller

Ŏ Stephen Baxter

Ŏ Stephen Lane

C O N G R A T U L A T I O N S T O T H E K N I G H T S & D A M E S O F S U F F E R L A N D R I A

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FACEBOOK ‘LIKES’ HAVE

GROWN FROM 2,600 IN APRIL TO

12,200+APRIL 2014 AUGUST 2014

During July, and in parallel with the Tour de France, the company ran an extensive promotional program with Fitness First Health Clubs nationally.

If you are a member of Fitness First and ventured in during this time we would love to hear your feedback. For those who missed out, the Turbine presence was highly visable throughout each club.

F I T N E S S F I R S T

T U R B I N E B Y N U M B E R S

36 TURBINE HAS BEEN SHIPPEDTO THIRTY SIX COUNTRIESSINCE JANUARY 2014 586 #THETURBINECOM

TWITTER FEED IS UP 300 FOLLOWERS SINCE APRIL

31,000 UNIQUE VISITORS TOTHE RHINOMED WEBSITESINCE JANUARY 2014

8,848 METERS ABOVE SEA LEVEL - THE HEIGHT OF MOUNT EVEREST, WHERE A CUSTOMER IS PLANNING TO USE THE TURBINE THIS YEAR!For

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We’re very excited to share that Team Sky’s leader, Chris Froome, has used the Turbine, during Stage One of the Vuelta a España (Tour of Spain).

Having a rider of Chris Froome’s calibre choose to use the Turbine during the Vuelta a España is testament that this next-level technology can make a real difference to the way we breathe and therefore perform.

An increasing number of athletes are discovering the benefits of better breathing. We look forward to the Turbine being adopted by more and more athletes across a wider range of aerobic activities.

C H R I S F R O O M E U S E S T H E T U R B I N EF

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Over the last six weeks we have completed the prototyping for the sleep product. This exciting new technology has taken into account the specific needs of snorers. The product is designed to stay in the nose overnight and to also deliver significantly improved comfort and fit. We are undertaking extensive user trials in order to fine-tune the product ahead of its release to market in November.

Our user testing to date indicates that this version of our patented BreatheAssist technology should alleviate night-time nasal congestion, a leading cause of snoring. We are very excited about this product and the impact it will have on this significant market and look forward to sharing more with you in the lead up to November.

S L E E P P R O G R A M U P D A T E

D R U G D E L I V E R Y U P D A T E The Sumatriptan program is underway and rapidly progressing. In June Rhinomed appointed IDT Australia to collaborate with us, as well as our engineering and design team at APS. IDT Australia will formulate the Sumatriptan and identify the specific excipients required to carry it. We are now confirming the trial protocol through CMAX – a clinical trial facility at the Royal Adelaide Hospital. The trial will commence towards the end of this year, with results due early in 2015. This program is critical to proving the BreatheAssist technology as a true drug delivery platform.

As discussed in previous newsletters, the Sumatriptan market is significant, with projected growth to $5.6 billion by 2021. Compliance and adherence remains one of the biggest hurdles for pharmaceutical companies right around the world, so the ability to ensure patients and clinicians are aware of, adopt and accept a new drug or change to an alternative treatment remains the key challenge for commercial success. By implementing a phased strategy in sport and sleep to socialise the mass market, we ensure consumers will be fully aware of the Rhinomed technology well in advance of any final versions of the drug delivery product, therefore de-risking its market entry. We remain committed to this strategy and proving up our technology and by doing so de-risking further developments.

BY 2021 SUMATRIPTAN MARKETPROJECTED TO GROW TO $5.6BN

I N V E S T O R R E L A T I O N SThe Rhinomed shareregister is evolving as the company is now going from strength to strength and it is no time to rest on our laurels. Whilst some legacy shareholders have exited recently, we are experiencing a lot of fresh enquiries from a large number of investors. The company continues to engage with multiple investor groups and expects considerable upside shareholder value creation if we can successfully execute against our strategy.

The management team has presented at a number of key events recently, including the ‘Investing In Sport’ event at the SCG in June and the 10th Bioshares Biotech Summit in July. Both events provided a great opportunity to update investors on recent progress.

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®

V I B R O V E I N U P D A T E

As shareholders will recall, we conducted a strategic review of the company’s intellectual property position in early 2013. As a result, it was necessary to write down the value for the Vibrovein asset due to its poor IP position.

Since that time, considerable development work has been undertaken to identify a clear and novel IP position, one that would allow the company to deliver significant shareholder value from this asset.

Originally inspired by the humble mosquito, the Vibrovein technology was reportedly able to reduce patient reported pain associated with injections by lowering the stiction or resistance encountered when a syringe penetrates the skin.

A broader review of clinician’s needs identified that most cosmetic surgeons pride themselves on their ability to inject patients and would greatly appreciate a device that improves their accuracy with a needle even further

As a result, further work was undertaken to assess how the idea of vibration could be adopted to unlock a solution to a bigger and more significant unmet clinical needs. We’re pleased to announce the result is a radical new technology - the MARXMAN®.

An Australian designed technology named after its original inventor, Dr John Marx, the Marxman transforms the basic syringe into a high performance, personalised needle by incorporating an Apple/Android tablet or phone application.

The conventional syringe has no smarts; it is unable to distinguish from one patient to the next. The Marxman now informs the basic syringe by incorporating the patient’s specific skin type and characteristics about treatment data to calculate and calibrate an optimal frequency for each individual.

Energising the needle results in reduced force to penetrate the skin and needle-dermis stiction, which in turn significantly improves the treatment outcomes for both the patient and the clinician. With initial in vitro studies showing up to 60% reduction in penetration force, the Marxman is designed to more accurately target a blood vessel and is less likely to become stuck, catch and pull the tissue, thereby reducing pain, tissue distortion or bruising.

We believe that the Marxman is a world first – a device that will remember who you are and as a result, tune itself to your specific skin type and pain threshold. The Marxman is a fantastic example of medical device engineering and mobile health application technology coming together to create a truly innovative product.

The core target market for the Marxman is the injectable cosmetic market, worth more than US$2.6BN per annum. According to ASAPS International Survey on Aesthetic/Cosmetic Procedures, there were 3,179, 652 Botox procedures in 2011. With the growing number of cosmetic procedures, including fillers such as collagen and varicose vein treatment, the industry represents a significant opportunity for the first version of the technology.

The technology has now reached an exciting inflection point, with a working prototype that will shortly be ready for trial. The company will seek expressions of interest in taking the technology forward. We will continue to keep you informed of progress.

IN 2013, THE US INJECTABLE COSMETIC MARKET, INCLUDING SCLEROTHERAPY AND BOTOX,

WAS MORE THAN

$2.6BILLION

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F O R W A R D L O O K I N G S T A T E M E N TAny forward looking statements in this newsletter have been prepared on the basis of a number of assumptions which may prove incorrect and the current intentions, plans, expectations and beliefs about future events are subject to risks, uncertainties and other factors, many of which are outside Rhinomed Limited’s control. Important factors that could cause actual results to differ materially from any assumptions or expectations expressed or implied in this newsletter include known and unknown risks. As actual results may differ materially to any assumptions made in this newsletter, you are urged to view any forward looking statements contained in this newsletter with caution. This newsletter should not be relied on as a recommendation or forecast by Rhinomed Limited, and should not be construed as either an offer to sell or a solicitation of an offer to buy or sell shares in any jurisdiction.

C O N T A C T D E T A I L SMichael Johnson, CEOemail: mjohnson@rhinomed.com.au

O F F I C E D E T A I L SLevel 1, 4-10 Amsterdam Street, RICHMOND, Victoria 3121tel: +61 (0) 3 8416 0900 fax: +61 (0) 3 8080 0796

R E T A I L E X P A N S I O N

AUSTRALIAAs shareholders would be aware, having established a foothold in the Australian market, our next step is to expand our presence. Our channel strategy seeks to place the product into the specialist cycling stores initially before expanding into larger venues.

Choosing partners who can immediately add value is not easy. For this reason the appointment of BikeBox is a real coup. BikeBox is one of Australia’s leading distributors in the cycling and triathlon sector. The team is well established with a presence right across the country and relationships with well over 850 cycling stores. It is vitally important that we place our technology into trusted hands, which is why BikeBox is such a great partner – we welcome them to the team.

OFFSHORE EXPANSIONWe have stated from the start that we see Australia as the perfect proving ground for our technologies. However, our focus is on bringing Australian technology to the global marketplace.

USA & EUROPEA key offshore opportunity is our attendence at Interbike in Las Vegas in September 2014.

The largest cycling exhibition on the planet, Interbike enables us to introduce the Turbine technology to over 26,000 attendees and the US cycling retail market. It also provides the perfect opportunity to have key retailers and wholesalers experience the Turbine firsthand. Our sales and business development team will be on the ground seeking to expand our global footprint.

We will provide a debrief on Interbike in October, however, if you are in the US between the 10th to 12th of September, please come and visit the team at the Turbine booth at the Mandalay Bay Convention Centre, Las Vegas.

ISRAELFollowing the Melbourne Ironman, Edi Idelman, a dedicated amateur triathlete, approached the Company to become a distributor. Having used the Turbine, Edi saw the obvious benefits for the cycling and triathlete commmunity in Israel. As a result, we are thrilled to welcome E.I Trading and its Israeli subsidiary ActiveAir as our partner in Israel. It is fantastic that we can attract such passionate believers in our technology. Air Active, having strong relationships already in place, will be targeting the growing cycling and triathlon sector, as well as the local retail pharmacy markets.

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