Immuron Ltd — Annual Report 2013

Aug 29, 2013

Immuron Limited

(ASX:IMC)

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Appendix 4E – Preliminary Final Report

(ASX Listing rule 4.3A)

Company Name: Immuron Limited (the ‘Company’) ABN: 80 063 114 045 Reporting Period: Financial year ended 30 June 2013 Previous Reporting Period: Financial year ended 30 June 2012

Results for Announcement to the Market

The results of Immuron Limited for the year ended 30 June 2013 are as follows:

Revenues	Down	(66.65%)	to	$149,755
Loss after tax attributable to members	Up	54.04%	to	($3,539,117)
Net loss for the period attributable to members	Up	54.04%	to	($3,539,117)

Brief explanation of figures reported above

The loss for the Company after income tax for the reporting period was $3,539,117 (2012: $2,297,520) and before income tax the loss for the reporting period was $3,539,117 (2012: $2,297,520).

There is no tax payable or refund due during the current reporting period, (2012 payable or refund: $0). This result has been achieved after fully expensing all research and development costs, in the current reporting period of $896,840 (2012: $1,128,012).

For further details relating to the current period’s results, refer to the Operations Report contained within this document.

Dividends

No dividends have been paid or declared by the Company since the beginning of the current reporting period. No dividends were paid for the previous reporting period.

Net Tangible Assets

	30 June 2013	30 June 2012
Net Tangible Assets	($535,601)	$649,394
Shares (No.)	1,035,450,143	414,096,557
Net Tangible Assets (Cents)	(0.001)	0.002

Loss per Share

	30 June 2013	30 June 2012
Basic loss per share (cents)	(0.70)	(0.67)
Diluted loss per share (cents)	(0.70)	(0.67)

Status of Audit of Accounts

These accounts are currently in the process of being audited. An Annual Report for the year ended 30 June 2013 containing the Audit Report, as referred to in Note 13, which shall be provided in due course.

Appendix 4E – Preliminary Final Report

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ACN: 063 114 045 LIMITED

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Appendix 4E Preliminary Final Report For the Year Ended 30 June 2013

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In Compliance with ASX Listing Rule 4.3A

Table of Contents

Operating and Financial Review ................................................................ 1 Financial Report

Statement of Comprehensive Income ........................................................ 4 Statement of Financial Position ................................................................. 5 Statement of Changes in Equity ............................................................... 6 Statement of Cash Flows ......................................................................... 7 Notes to the Financial Statements ............................................................ 8 Corporate Directory ................................................................................ 15

Operating & Financial Review

The Directors of Immuron Limited (‘Immuron’, ‘IMC’, or ‘the Company’) provide the following Report in relation to the Company for the year ended 30 June 2013.

Principal Activities

The Company's principal activity is a product development driven biopharmaceutical Company focused on the research and development of polyclonal antibodies for the treatment and prevention of major diseases. There were no significant changes in the nature of the Company’s principal activities during the financial year.

The loss of the Company after providing for income tax amounted to $3,539,117 (2012: $2,297,520).

Review of Operations

During the financial year ending on 30 June 2013, Immuron continued its three-pronged focus on the global commercialisation of Travelan, the clinical development of IMM-124E for NASH and the development towards clinical stage of an infectious disease product candidate, being IMM-529 for C.difficile infections.

Travelan continues to provide us with the opportunity to substantially increase the company’s short term revenues, whilst both IMM-124E and IMM-529 provide us with the prospect of a longer term, and substantially higher rewards.

Overview of Company’s Activities

During the period under review, the key events reported by Immuron were:

• Immuron’s principal investigator for its impending NASH (non-alcoholic steatohepatitis) Phase IIb clinical trial, Professor Arun Sanyal, has been awarded a National Institutes of Health grant to conduct a clinical trial for the related condition ASH (alcoholic steatohepatitis)

• An agreement with Harvest & Health Co Ltd, for the distribution of Travelan in China and Taiwan.

• Results demonstrating that IMM-529 is effective in preventing Clostridium difficile (C. difficile) infections in mice.

• Drawing down $CA0.5M, being the second tranche of the debenture agreement that facilitates a funding arrangement under which Paladin Laboratories Inc., provided a total of $CA 1.5M to Immuron

• Raising of $1.86M through a fully underwritten renounceable pro-rata rights offer to the company’s shareholders

• Adoption of a direct-to-wholesalers sales model for Travelan in Australia following termination of the company’s license agreement with Takeda, thereby enabling Immuron to command higher gross margins on its sales of Travelan in Australia.

Travelan

The global commercialisation of our flagship product Travelan, continues to be a focus. By 30 June 2013 Immuron had entered into 4 Travelan commercialisation agreements for several countries in Asia, such that 79% of tourists visiting Asia Pacific will be travelling to countries where Travelan is licensed. Pending marketing approval for several licensed territories, launches in these countries are anticipated this calendar year.

As at 30 June 2013 and currently, we continue to await marketing authorisation from the regulatory authority in Canada which experienced internal delays unrelated to Travelan.

As at 30 June 2013 our relationship with MEDA, our former US licensee, has formally ended after MEDA and Immuron jointly determined that Travelan did not fit the MEDA portfolio. MEDA and Immuron parted on good terms, with the realization that, for Immuron to be able to do full justice to the commercialization of Travelan in the United States, there needs to be a consumer group focus. Immuron is currently in progressed discussions with a more suitable licensing partner.

In June 2013, we announced termination of the company’s license agreement with Takeda for the distribution of Travelan in Australia and New Zealand and adoption of a direct-to-wholesaler strategy. Since 2010 Takeda has achieved market penetration for Travelan in Australia and has built the Travelan brand.

Page 1 of 15

Continued.... Operating & Financial Review

Immuron is leveraging these achievements and applying them to its direct-to-wholesaler strategy through which Immuron commands substantially higher gross margins.

In the financial year ending 30 June 2012, Immuron announced that its sales of Travelan were approximately $450K. In the financial year ending 30 June 2013, Immuron’s sales of Travelan were approximately $150K. We expect substantial increases in the financial year ending 30 June 2014 and thereafter.

In support of the direct-to-wholesaler strategy, Immuron entered into an Agreement with HealthOne, a Sydney-based company, that provides a national pharmacy contracted sales force. Under this Agreement, HealthOne is promoting Travelan based on agreed targets and a revenue sharing arrangement. Our largest shareholder, Grandlodge has been managing the marketing and the logistics associated with the sale of Travelan, including setting up accounts and liaising with pharmaceutical wholesalers. Grandlodge’s involvement has been pivotal in enabling Immuron to adopt its direct-towholesalers model.

IMM-124E for NASH:

We continue to be encouraged by the commercial and scientific interest generated in our NASH product program. At the heart of IMM-124E for NASH is the principle that endotoxins (toxins released by certain types of bacteria) play a key role in the development of NASH, which is also known as “bacterial translocation” or “leaky gut”. These endotoxins activate inflammatory pathways associated with NASH, a proposition which is supported by a number of publications.

Based on our data generated to date, the polyclonal antibodies contained in Immuron’s IMM-124E agglutinate, or stick to, the endotoxins associated with NASH, thereby preventing bacterial translocation and the pathogenesis of NASH. This is achieved by the antibodies comprised in IMM-124E acting in the GI-tract and eliciting a systemic response without crossing into the blood stream. As a bovine colostrum derived product, its safety profile is high. For all these reasons, IMM-124E is attracting significant attention.

During the year ending 30 June 2013 we progressed the development of IMM-124E so that when funds are available to commence the clinical trials, Immuron will be able to progress the clinical trials expeditiously. The preparations have included discussions and with our clinical advisors and potential licensees on the design and optimisation of the NASH Phase 2 trials.

IMM-529 for Clostridium difficile infection:

Clostridium difficile (C.difficile) is a bacteria normally found in people’s intestines. Under certain circumstances C.difficile can multiply and cause diarrhoea as well as potentially life threatening intestinal conditions including colonic perforation and toxic megacolon. Deaths related to C.difficile increased 400% between 2000 and 2007, due in part to a stronger germ strain and antibiotic resistance.

IMM 529 is being designed to both prevent and treat C.difficile infections. Since June 2012, when we announced the first results of our C.difficile program conducted under collaboration with Monash University, we have continued to see very encouraging data, demonstrating its potential as both a preventative and a treatment. These results have formed the basis of patent applications which are designed to provide multiple aspects of monopolistic protection. Additional pre-clinical trials are being designed to support a human trial. IMM-255 for Influenza

In May we announced our decision to end the project for the development of IMM-255 for Influenza. Following a number of pre-clinical trials in mice and ferrets, there was insufficient statistically significant information that supported the efficacy of IMM-255 in protecting against influenza infection.

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Continued.... Operating & Financial Review

Corporate

During the year ending 30 June 2013, we announced a number of changes to our management and board constituency. In March 2013 we announced the resignation of Joe Baini as a Director and the Chief Executive Officer and the appointment of Amos Meltzer as interim Chief Executive Officer.

In April 2013, we announced the resignation of Graeme Stevens as the company’s Chief Financial Officer and Secretary and the appointment of Phillip Hains and Peter Vaughan as the company’s co-secretaries.

In May 2013, following the announcement of the company’s fully underwritten renounceable pro-rata rights offer to the company’s shareholders, we announced the appointment of Stephen Anastasiou as a Director of the company.

In July we announced the retirement of Dr Stewart Washer as a member of the Board.

For and on behalf of the Company;

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Amos Meltzer

Interim Chief Executive Officer (CEO) Immuron Limited

On this day the 30[th] Day of August 2013.

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Statement of Comprehensive Income

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For the Year Ended 30 June 2013

	30 June 2013 30 June 2012
	Note $AUD $AUD
	Revenue
	Total operating revenue 3 149,755 449,013
	Total Revenue 149,755 449,013
	Cost of goods sold (88,940) (262,083)
	Gross profit 60,815 186,930
	Other income 3 304,269 1,116,041
	Expenses
	Amortisation expenses 4 (720,000) (60,000)
	Consulting, employee and director expenses 4 (944,761) (1,422,374)
	Corporate administration expenses 4 (551,048) (592,753)
	Depreciation expenses 4 (14,370) (12,566)
	Finance & contract termination costs 4 (602,168) (110,592)
	Marketing and promotion expenses 4 (8,625) (56,021)
	Research and development expenses 4 (896,840) (1,128,012)
	Travel and entertainment expenses 4 (35,393) (116,539)
	Impairment of inventory 4 (26,679) -
	Raw materials and consumables used 4 (104,317) (101,634)
	Loss before tax (3,539,117) (2,297,520)
	Income tax expense - -
	Loss for the year (3,539,117) (2,297,520)
	Other comprehensive income - -
	Total comprehensive loss for the year (3,539,117) (2,297,520)
	Basic loss per share (cents per share) 10 (0.70) (0.67)
	Diluted loss per share (cents per share) 10 (0.70) (0.67)

The accompanying notes form part of these financial statements.

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Statement of Financial Position

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As at 30 June 2013

	30 June 2013 30 June 2012
	Note $AUD $AUD
	ASSETS
	Current Assets
	Cash and cash equivalents 1,446,712 1,443,928
	Trade and other receivables 15,438 204,752
	Inventories 291,694 214,400
	Other 84,046 356,131
	Total Current Assets 1,837,890 2,219,211
	Non-Current Assets
	Investments 1 31
	Property, plant and equipment 8,154 18,457
	Intangible assets 6 680,587 1,400,587
	Total Non-Current Assets 688,742 1,419,075
	TOTAL ASSETS 2,526,632 3,638,286
	LIABILITIES
	Current Liabilities
	Trade and other payables 1,231,327 947,545
	Financial liabilities 7 4,155 81,186
	Total Current Liabilities 1,235,482 1,028,731
	Non-Current Liabilities
	Financial liabilities 7 1,146,164 559,574
	Total Non-Current Liabilities 1,146,164 559,574
	TOTAL LIABILITIES 2,381,646 1,588,305
	NET ASSETS 144,986 2,049,981
	EQUITY
	Issued capital 8 31,357,697 30,024,787
	Reserves 9 1,208,271 907,059
	Accumulated Losses (32,420,982) (28,881,865)
	TOTAL EQUITY 144,986 2,049,981

The accompanying notes form part of these financial statements.

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Statement of Changes in Equity

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For the Year Ended 30 June 2013

	Share Capital	Option Reserve	Accumulated	Total
			Losses
	$	$	$	$
Balance as at 30 June 2011	27,721,517	595,207	(26,584,345)	1,732,379
Total comprehensive loss for the year:	-	-	(2,297,520)	(2,297,520)
Transactions with Equity holders in their capacity as equity holders:
Shares issued net of issue costs	2,303,270	-	-	2,303,270
Options issued	-	171,009	-	171,009
Employee and consultants share options - Value of services		140,843	-	140,843
Balance at 30 June 2012	30,024,787	907,059	(28,881,865)	2,049,981
Total comprehensive loss for the year	-	-	(3,539,117)	(3,539,117)
Transactions with Equity holders in their capacity as equity holders:
Shares issued net of issue costs	1,327,077	-	-	1,327,077
Shares to be issued	5,833	-	-	5,833
Options issued	-	250,061	-	250,061
Employee and consultants share options - Value of services		51,151	-	51,151
Balance at 30 June 2013	31,357,697	1,208,271	(32,420,982)	144,986

The accompanying notes form part of these financial statements.

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Statement of Cash Flows

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For the Year Ended 30 June 2013

	30 June 2013 30 June 2012
	$AUD $AUD
	Cash flows from operating activities Receipts from customers 323,464 802,970 Payments to suppliers and employees (2,446,655) (3,235,973) Interest received 11,580 14,249 Interest and other costs of finance paid (113,411) (43,905) Receipt of R&D tax refund 179,615 -
	Net cash flows used in operating activities (2,045,407) (2,462,659)
	Cash flows related to investing activities Payment for purchases of plant and equipment (7,200) (2,861)
	Net cash flows used in investing activities (7,200) (2,861)
	Cash flows related to financing activities Proceeds from issues of equity securities 1,863,810 2,300,252 Capital raising costs (287,674) (90,996) Funds received from convertible debenture 479,255 949,378
	Net cash flows from financing activities 2,055,391 3,158,634
	Net increase/(decrease) in cash and cash equivalents 2,784 693,114 Cash and cash equivalents at the beginning of the year 1,443,928 750,814
	Cash and cash equivalents at the end of the year 1,446,712 1,443,928

The accompanying notes form part of these financial statements.

Page 7 of 15

Notes to the Financial Statements

Note 1 - Summary of Significant Accounting Policies

Corporate Information

This Preliminary Financial Report covers the publicly listed entity of Immuron Limited. The Company's principal activity is a product development driven biopharmaceutical Company focused on the research and development of polyclonal antibodies for the treatment and prevention of major diseases.

The Company's Preliminary Financial Report does not include all the notes of the type normally included in an Annual Financial Report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the entity as the full financial report.

Basis of Preparation

This Preliminary Financial Report has been prepared in accordance with the recognition and measurement requirements, but not all disclosure requirements, of Australian Accounting Standards and Interpretations and the Corporations Act 2001. Australian Accounting Standards include Australian equivalents to International Financial Reporting Standards.

Significant accounting policies adopted in preparation of the preliminary financial report are consistent with those adopted by the company in preparation of the 30 June 2012 financial report and the 31 December 2012 half year financial report.

The Preliminary Final Report has been prepared on an accruals basis and is based on historical costs, except for the revaluation of certain non-current assets and financial instruments. Cost is based on fair values of the consideration given in exchange for assets.

The preliminary financial report is presented in Australian dollars.

Going Concern

At 30 June 2013, the Company’s cash and cash equivalents amounted to $1,446,712 (2012: $1,443,928) and for the year ended 30 June 2013, the Company experienced an operating loss of $3,539,117 (2012: $2,297,520) and a net cash outflow of $2,045,407 (2012: $2,462,659) from operating activities and expenses associated with research and commercialisation programs.

For the 2014 financial year the Company has budgeted for operating cash outflows to exceed operating cash inflows as it continues its global commercialisation of Travelan and its various research programs. Although the Company is projecting losses and a net cash outflow from operations for the 2014 financial year, the Directors have taken a number of steps to reduce the level of recurring expenses whilst it continues to seek additional licensing arrangements for its Travelan and other products.

In order to fund the budgeted cash outflows for the period, from the 12 months of the date of this report, the Directors will need to achieve the following milestones;

• generate revenues from Travelan sales in Australia through the new direct-to-wholesalers sales model from 1 July 2013, in line with forecasts,

• generate new Travelan sales, in line with forecast, through licences entered into in the previous financial year and which are currently seeking regulatory approval in the various jurisdictions,

• enter into a new licensing agreement or option licensing agreement, which will include an upfront payment within the first half of the 2013 financial year, for the distribution of Travelan in the United States, and

• achieve production and delivery schedules in order to meet forecast Travelan sales over the coming 12 month period in existing and new markets.

• Receive a Research and Development tax refund claim in relation to the 2013 year. The company is also in the process of finalising the lodging of amended Research and Development refund claims in relation to the 20102012 financial years where additional prior year activities have now been identified as being claimable.

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Notes to the Financial Statements (Continued...)

• Should the company not be successful in achieving the objectives outlined above within the timeframe forecasted or at values below that currently forecast, the company will seek to reduce uncommitted expenditures to operate within available funding and if required the directors will seek additional sources of funding above that already available.

There are significant risks associated with product development and regulatory approvals required by biotechnology companies, it is difficult to predict the timing and quantum of income from the commercialisation of products and technology and there are inherent uncertainties involved in raising funds from investors within forecasted timelines.

As a result of these matters there is material uncertainty that may cast significant doubt as to whether the Company will be able to continue as a going concern and realise its assets and discharge its liabilities in the normal course of business and at the amounts stated in the financial report.

However, the Directors are confident that the Company's planned initiatives will be successfully achieved and these will continue to provide adequate access to financial resources.

Accordingly, the Directors have prepared the financial statements on a going concern basis. As such, the financial statements do not include any adjustments as to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the entity not continue as a going concern.

Note 2 - Dividends

The Company has resolved not to declare any dividends for the financial year ended 30 June 2013.

Note 3 - Revenue

				30 Jun 2013 30 Jun 2012
				$ $
	Revenue
			Revenue from Operating Activities
			Sales of goods 149,755 449,013
			Total Revenue from Operating Activities 149,755 449,013
	Other Income
				Interest received 11,580 14,248
				R&D tax concession refunds 179,615 254,508
	Gains/(losses) on convertible debenture derivative 113,074 367,070
	License fee revenue - 480,215
	Total Other Income 304,269 1,116,041
	Total Revenue and Other Income 454,024 1,565,054

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Notes to the Financial Statements (Continued...)

Note 4 - Expenses

		30 Jun 2013 30 Jun 2012
		$ $
	Expenses
		a) Amortisation expenses 720,000 60,000
		b) Consulting, employee and director expenses
		Consulting expenses 76,892 407,815
		Employee related expenses 653,587 791,797
		Director expenses 214,282 222,762
		944,761 1,422,374
		c) Corporate administration expenses
		Audit and accounting fees 115,459 100,431
		Insurances 49,920 58,874
		Foreign exchange loss 65,403 21,415
		Corporate administration expenses 304,661 412,033
		Provision for doubtful debts 15,605 -
		551,048 592,753
		d) Depreciation expenses 14,370 12,566
		e) Marketing and promotion expenses 8,625 56,021
		f) Research and development expenses 896,840 1,128,012
		g) Travel and entertainment expenses 35,393 116,539
		h) Finance & contract termination costs 602,168 110,592
		i) Write-down of inventory carry value 26,679 -
		j) Raw materials and consumables used 104,317 101,634
	Total Expenses 3,904,201 3,600,491

Note 5 - Segment Information

Primary Reporting Format - Business Segments

The entity has identified its operating segments based on the internal reports that are reviewed and used by the executive management team in assessing performance and determining the allocation of resources.

The executive management team considers the business from both a product and a geographic perspective and has identified three reportable segments.

Management has determined that the business segments of research, development and commercialisation (R & D) and hyperimmune products are the main business segments used for internal reporting purposes to the Management Executive Team.

Other items of income and expense not directly attributable to those two segments are disclosed as a corporate cost segment. Income from license fees is classified as income from commercialisation activities and is included in the R & D segment.

The Board assesses the performance of the operating segments at a number of operating levels including adjusted EBITDA. This measurement excludes the effects of certain expenditure from the operating segments such as depreciation, amortisation and finance costs.

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Notes to the Financial Statements (Continued...)

The reportable segments are based on aggregated operating segments determined by similarity of expenses, where expenses in the reportable segments exceed 10% of the total expenses for either the current and/or previous reporting period.

30 June 2013	30 June 2013	R&D	HyperImmune Products	Corporate	Total
		$	$	$	$
Segment Revenue
	Revenue from external customers	-	149,755	-	149,755
	R&D tax offset refund	179,615	-	-	179,615
	Interest revenue	-	-	11,580	11,580
	Othergains/(losses)	-	-	113,074	113,074
Total Segment Revenue		179,615	149,755	124,654	454,024
Segment Expenses
	Segment Expenses	(896,840)	(88,940)	(3,007,361)	(3,993,141)
Total Segment Expense		(896,840)	(88,940)	(3,007,361)	(3,993,141)
	Income Tax Expense				-
Net Result		(717,225)	60,815	(2,882,707)	(3,539,117)
Assets
	Segment assets	680,587	291,694	1,554,351	2,526,632
Total Assets		680,587	291,694	1,554,351	2,526,632
Liabilities
	Segment liabilities	(670,381)	(200,488)	(1,510,777)	(2,381,646)
Total Liabilities		(670,381)	(200,488)	(1,510,777)	(2,381,646)

			30 June 2012		R&D		HyperImmune Products		Corporate		Total
					$		$		$		$
Segment Revenue
	Revenue from external customers				-		448,494		-		448,494
	License fees from external customers				480,215		-		-		480,215
	R&D tax offset refund				254,508		-		-		254,508
	Interest revenue				-		-		14,248		14,248
	Othergains/(losses)				-		-		367,589		367,589
Total Segment Revenue					734,723		448,494		381,837		1,565,054
Segment Expenses
	Segment Expenses				(1,572,484)		(363,199)		(1,926,891)		(3,862,574)
Total Segment Expense					(1,572,484)		(363,199)		(1,926,891)		(3,862,574)
	Income Tax Expense				-		-		-		-
Net Loss					(837,761)		85,295		(1,545,054)		(2,297,520)
Assets
	Segment assets				1,674,597		456,620		1,507,069		3,638,286
Total Assets					1,674,597		456,620		1,507,069		3,638,286
Liabilities
	Segment liabilities				(366,840)		(149,368)		(1,072,097)		(1,588,305)
Total Liabilities					(366,840)		(149,368)		(1,072,097)		(1,588,305)

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Notes to the Financial Statements (Continued...)

Note 6 - Intangible Assets

	30 June 2013 30 June 2012
	$ $
	Intellectual Property(Acquired) At cost 1,460,587 1,460,587 Less accumulated depreciation (780,000) (60,000)
	Net carrying value 680,587 1,400,587
	Acquired
	Intellectual Property
	Carrying amount as at 30 June 2011 1,460,587
	Additions -
	Amortisation (60,000)
	Carrying amount as at 30 June 2012 1,400,587
	Amortisation (720,000)
	Carrying amount as at 30 June 2013 680,587

The intellectual property was acquired from Hadasit Medical Research Services and Development Limited the consideration for which was the issue of 56,484,023 fully paid shares. During the 2012 financial year the estimated useful life of the intellectual property was reviewed and its estimated life was determined as having a finite life of two years, which remains unchanged as at 30 June 2013.

Note 7 - Financial Liabilities

			30 Jun 2013 30 Jun 2012
			$ $
	Convertible debenture
	Current liability – value of convertible debenture derivative 4,155 81,186
		Non-current liability – host debt borrowings 1,146,164 559,574
	Total convertible debenture 1,150,319 640,760

The face value of the convertible debenture at 30 June 2013 is $AU1,428,645 ($CAD1.5M) which may (at the option of the holder) be converted into equity at a price of AU 4.73cents per share which is higher than the share price as at 30 June 2013.

Based on the face value of $AU1,428,645, approximately 30,203,911 fully paid ordinary shares would be issued on the full conversion of borrowing into equity which following allotment would approximate 2.83% of the ordinary shares on issue at 30 June 2013.

The maturity date for repayment of the borrowing, or the conversion into equity, is no later than 23 December 2014. Interest is payable on the borrowing at a fixed rate of 10% per annum.

The convertible debenture is secured by a fixed and floating charge over certain of the Company’s assets and future milestone and royalty receipts under existing and future licence and distribution agreements. The respective values of the assets pledged as security as at 30 June 2013 are as follows:

	30 Jun 2013 $	30 Jun 2013 $	30 Jun 2013 $
	Fixed charge
		Cash and cash equivalents 1,446,712
	Floating charge
		Trade and other receivables and other assets (excluding IP) 107,639
		Inventories 291,694
			1,846,045

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Notes to the Financial Statements (Continued...)

Note 8 - Issued Capital

	30 June 2013 30 June 2012 No. $ No. $
	Fully Paid Ordinary Shares Balance at beginning of year 414,096,557 30,024,787 325,714,800 27,721,517 Share issued during the year 621,353,586 1,864,812 88,381,757 2,569,024 Value of options issued transferred to options reserve - - - (174,758) Shares to be issued - 5,833 - - Transaction costs relating to share issues (cash-based) (287,674) (90,996) Transaction costs relating to share issues (non-cash) (250,061) -
	Total Issued Capital 1,035,450,143 31,357,697 414,096,557 30,024,787

Note 9 - Reserves

	30 June 2013 30 June 2012 No. $ No. $
	Options over fully paid ordinary shares Balance at beginning of year 24,887,480 907,059 4,565,928 595,207 Options over ordinary shares issued during the year * 281,341,882 283,241 23,478,695 290,405 Option expense recorded over the vesting period - 17,971 - 21,447 Lapse of options due to nil exercise (16,368,785) - (3,157,143) -
	Total Reserves 289,860,577 1,208,271 24,887,480 907,059

• 2,265,000 options issued to employees and consultants during the year were resolved by the Board to be cancelled after the financial year ended 30 June 2013.

Note 10 - Loss per Share

		30 June 2013	30 June 2012
Basic loss per share (cents)		(0.70)	(0.67)
Diluted loss per share (cents)		(0.70)	(0.67)
a)	Net loss used in the calculation of basic and diluted loss per share	($3,539,117)	($2,297,520)
b)	Weighted average number of ordinary shares outstanding during the period
	used in the calculation of basic and diluted loss per share	507,002,055	344,688,598

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Notes to the Financial Statements (Continued...)

Note 11 - Events Subsequent to Balance Date

• 3[rd] July 2013 – Stewart Washer retired as a Non-Executive Director of Immuron

• 8[th] July 2013

• David Plush and Texas Woods Pty Ltd lodge a Notice of Initial Substantial Holder

• 15[th] July 2013

• Immuron issued 31,746,031 unlisted options exercisable at $0.0075 per option on or before their expiry on 30 June 2016 to employees and consultants under the Company’s current ESOP plan.

Other than the matters listed above, no other matters or circumstances have arisen since the end of the reporting period which significantly affected or may significantly affect the operations of the economic entity, the result of those operations or the state of affairs of the economic entity in subsequent financial years.

Note 12 - Audit

These accounts are currently in the process of being audited. An Annual Report for the year ended 30 June 2013 containing the Audit Report shall be provided in due course.

Note 13 - Auditor Report

As noted above in note 13, this report is based on accounts which are in the process of being audited. The 30 June 2013 financial report, when audited, is likely to contain an independent auditor’s report which includes an emphasis of matter paragraph in regards to the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern. Additional disclosure has been included in Note 1 to the financial statements.

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Corporate Directory

AUSTRALIAN COMPANY NUMBER (ACN) 063 114 045

Immuron Limited is a Public Company Limited by shares and is domiciled in Australia.

DIRECTORS

Dr. Roger Aston Dr. Elane Zelcer Mr. Daniel Pollock Mr. Stephen Anastasiou

Independent Non-Executive Chairman Independent Non-Executive Deputy Chairman Independent Non-Executive Director Non-Executive Director

CHIEF EXECUTIVE OFFICER (CEO) Mr. Amos Meltzer

COMPANY SECRETARIES

Mr. Phillip Hains Mr. Peter Vaughan

PRINCIPAL PLACE OF BUSINESS

Suite 1, 1233 High Street Armadale, Victoria, 3143 Australia Telephone: + 61 (0)3 9824 5254 Fax: + 61 (0)3 9822 7735

SHARE REGISTRY

Computershare Investor Services Pty Limited Yarra Falls, 452 Johnston Street Abbotsford, Victoria, 3067 Australia Telephone: +61 (0)3 9415 5000 Telephone: +61 (0)3 9473 2500

REGISTERED OFFICE

Suite 1, 1233 High Street Armadale, Victoria, 3143 Australia Telephone: + 61 (0)3 9824 5254 Fax: + 61 (0)3 9822 7735

SOLICITORS

K&L Gates LLP Level 25, 525 Collins Street Melbourne Victoria, 3000 Australia Telephone: + 61 (0)3 9205 2000 Fax: + 61 (0)3 9205 2055

BANKERS

AUDITORS

PricewaterhouseCoopers (PWC) 2 Southbank Boulevard Southbank, Victoria, 3006 Australia Telephone: + 61 (0)3 8603 1000 Fax: + 61 (0)3 8603 1999

National Australia Bank (NAB) 330 Collins Street, Melbourne, Victoria, 3000 Australia

WEBSITES

www.immuron.com

www.travelan.com.au

SECURITIES QUOTED

Australian Securities Exchange

• Ordinary Fully Paid Shares (Code: IMC)

• Listed Options over Ordinary Fully Paid Shares (Code: IMCO) exercisable at $0.12 per option on or before 15 December 2015.

• Listed Options over Ordinary Fully Paid Shares (Code: IMCOA) exercisable at $0.04 per option on or before 30 April 2015.

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