Immuron Ltd — Annual Report 2018

Aug 29, 2018

Immuron Limited Appendix 4E 30 June 2018

Immuron Limited Appendix 4E Preliminary Final Report Year ended 30 June 2018

Name of entity:	Immuron Limited
ABN or equivalent company reference:	80 063 114 045
Current financial period:	30 June 2018
Corresponding financial period:	30 June 2017

Results for announcement to the market

Results for announcement to the market
				$
Revenue for ordinary activities	Up	32%	to	1,842,909
Loss after tax attributable to members	Down	56%	to	3,010,929
Net loss after tax (from ordinary activities) for the period
attributable to members	Down	56%	to	3,010,929

Distributions

		Franked
	Amount per	amount per
	security	security
Interim dividend (per share)	-	-
Final dividend (per share)	-	-
Franking	-	-
	30 June 2018	30 June 2017
	Cents	Cents
Net tangible assets (per share)	5.91	5.06

Explanation of results

The reported after tax loss of $3,010,929 is after fully expensing all of the Company’s research and development expenditure and patenting costs of $2,257,224 incurred during the year.

The Company has engaged a specialised R&D Tax consultant to review the research and development expenses of the Company for financial year 2018, to ensure the maximum rebate is received under the Australian Government’s R&D Tax Incentive program. It is anticipated that the Company will receive substantial cash inflows following this review process.

The total operating revenue for the year was $1,842,909, which is an increase of 32% from financial year 2017. Gross Profit increased 35% to $1,424,216 compared to 2017.

At 30 June 2018 the Company’s cash position was $4,727,430 (30 June 2017: $3,994,924). The Company had trade and other receivables of $1,683,305 (30 June 2017: $1,768,237). This receivables amount includes future receivables from the Australian Government under the R&D Tax Incentive program mentioned above.

Immuron Limited Appendix 4E 30 June 2018 (continued)

During the current financial year, the Company entered into a short-term loan arrangement with Great Accommodation Pty Ltd to fund on going R&D expenditure, for an amount of AUD $500,000 at an interest rate of 15% per annum and a AUD $15,000 establishment fee. The loan was repaid by the Company on 12 February 2018.

As announced to the market on 14 March 2018, the Company secured AUD $5.1 million in funding through a private placement with a large U.S.institutional investment fund. This capital raise was required to secure the future funding needs of Immuron's other ongoing clinical programs, support marketing initiatives surrounding the Company's flagship product Travelan, which already experienced significant sales growth through the first half of the financial year 2018, and provide ongoing working capital for the Company.

The appendix 4E financial report follows, with the further details to be included in the audited financial statements to be released by 28 September 2018.

Changes in controlled entities

For changes to controlled entities during the year ended 30 June 2018 please refer to note 9.

Other information required by Listing Rule 4.3A

Other information required by Listing Rule 4.3A
a.Details of individual and total dividends or distributions and dividend or distribution payments:	n/a
b.Details of any dividend or distribution reinvestment plans:	n/a
c.Details of associates and joint venture entities:	n/a
d.Other information	n/a

Audit

The financial statements are currently in the process of being audited. An audited financial statements along with the independent auditor report for the year end 30 June 2018 will provided in the due course.

==> picture [453 x 77] intentionally omitted <==

Immuron Limited ABN 80 063 114 045

Appendix 4E Preliminary Final Report for the year ended 30 June 2018

Immuron Limited Corporate directory

Directors

Dr. Roger Aston Independent non-executive chairman

Mr. Peter Anastasiou Executive vice chairman

Mr. Daniel Pollock Independent non-executive director

Mr. Stephen Anastasiou Independent non-executive director

Secretary

Mr. Richard J Berman (appointed 1 July 2018) Independent non-executive director Mr. Ravi Savariryan Independent non-executive director Mr. Phillip Hains

Mr. Peter Vaughan (resigned July 01, 2018)

Interim Chief Executive Officer Registered Office

Principal Place of Business

Share Registry - Australia

Share registry - United States

Auditors

Solicitors - Australia

Solicitors - United States

Dr. Jerry Kanellos

Level 3, 62 Lygon Street Carlton VIC 3053 Australia Telephone: +61(0)3 9824 5254 Facsimile: +61(0)3 9822 7735 Unit 10, 25 - 37 Chapman Street Blackburn North VIC 3130 Australia Telephone: +61 (0)3 9824 5254 Facsimile: +61 (0)3 9822 7735 Security Transfer Registrars Pty Ltd 770 Canning Highway Applecross WA 6153 Australia Telephone: +61 (0)8 9315 2333 Facsimile: +61 (0)8 9315 2233 Bank of New York 225 Liberty Street New York, NY 102286 United States of America Telephone: +1 212 495 1784 Grant Thornton Audit Pty Ltd Collins Square, Tower 1 727 Collins Street Melbourne VIC 3008 Australia Telephone: +61 3 8320 2222 Francis Abourizk Lightowlers (FAL) Level 16 356 Collins Street Melbourne VIC 3000 Australia Telephone: +61 (0)3 9642 2252 Carter Ledyard and Milburn LLP 2 Wall Street New York NY 10005 United States of America Telephone: +1 212 238 8605

1

Immuron Limited Corporate directory (continued)

Bankers

Securities exchange listings

Websites

National Australia Bank (NAB) 330 Collins Street Melbourne VIC 3000 Australia

Australian Securities Exchange (Code: IMC) NASDAQ Exchange (Code: IMRN)

www.Immuron.com www.travelan.com.au

2

Immuron Limited Consolidated statement of profit or loss and other comprehensive income For the year ended 30 June 2018

Revenue Notes Sales of good 2 Total operating revenue Cost of goods sold Gross profit Direct Selling Costs Sales and marketing costs Freight costs Total gross profit less direct selling costs Other income 2 Expenses Consulting, employee and director 3 Other corporate administration 3 Depreciation Finance fee costs Impairment of inventory Marketing and promotion Research and development Travel and entertainment expenses Loss before income tax Income tax expense Loss for the period Other comprehensive income for the period, net of tax Exchange differences on translation of foreign operations Total comprehensive loss for the period Total comprehensive income for the period is attributable to: Owners of Immuron Limited Earnings per share for profit attributable to the ordinary equity holders of the Company: Basic loss per share 8 Diluted loss per share 8

Consolidated entity 2018 2017 $ $ 1,842,909 1,396,197 1,842,909 1,396,197 (418,693) (337,546) 1,424,216 1,058,651 (282,241) (407,751) (169,458) (135,377) 972,517 515,523 1,850,401 1,614,373 (1,384,298) (1,689,521) (1,336,516) (1,381,809) (5,047) (4,922) (18,857) (24,483) (163,600) (136,494) (370,699) (789,608) (2,257,224) (4,630,674) (297,606) (276,539) (3,010,929) (6,804,154) - - (3,010,929) (6,804,154) (79,599) 40,017 (79,599) 40,017 (3,090,528) (6,764,137) Cents Cents (2.3) (6.4) (2.3) (6.4)

The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

3

Immuron Limited Consolidated statement of financial position As at 30 June 2018

ASSETS Notes Current assets Cash and cash equivalents Trade and other receivables Inventories 5 Other current assets Total current assets Non-current assets Plant and equipment Inventories 5 Total non-current assets Total assets LIABILITIES Current liabilities Trade and other payables Borrowings Employee benefit obligations Other financial liabilities Deferred revenue Total current liabilities Total liabilities Net assets EQUITY Issued capital 7(a) Reserves 7(b) Accumulated losses Total equity

Consolidated entity 2018 2017 $ $ 4,727,430 3,994,924 1,683,305 1,768,237 497,902 2,336,127 141,800 168,366 7,050,437 8,267,654 20,384 18,837 2,171,867 - 2,192,251 18,837 9,242,688 8,286,491 689,326 1,290,389 - 139,864 114,012 36,173 - 226,000 - 19,139 803,338 1,711,565 803,338 1,711,565 8,439,350 6,574,926 58,372,043 53,632,995 2,606,722 2,470,417 (52,539,415) (49,528,486)

8,439,350 6,574,926

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

4

Immuron Limited Consolidated statement of changes in equity For the year ended 30 June 2018

Consolidated entity Notes Balance at 1 July 2016 Loss for the period Other comprehensive income Total comprehensive (loss) income for the period Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs 7(a) Options and warrants issued/expensed 7(b) Lapse or exercise of share options 7(b) Balance at 30 June 2017 Balance at 1 July 2017 Loss for the period Other comprehensive income Total comprehensive (loss) income for the period Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs 7(a) Options issued/expensed 7(b) Balance at 30 June 2018	Attributable to owners of Immuron Limited
	Accumulated Issued capital $ Reserves $ losses $ Total $ 45,633,354 2,128,566 (42,821,357) 4,940,563 - - (6,804,154) (6,804,154) - 40,017 - 40,017 - 40,017 (6,804,154) (6,764,137)
	7,927,766 - - 7,927,766 - 470,734 - 470,734 71,875 (168,900) 97,025 - 7,999,641 301,834 97,025 8,398,500 53,632,995 2,470,417 (49,528,486) 6,574,926 53,632,995 2,470,417 (49,528,486) 6,574,926 - - (3,010,929) (3,010,929) - (79,599) - (79,599)
	- (79,599) (3,010,929) (3,090,528)
	4,739,048 - - 4,739,048 - 215,904 - 215,904 4,739,048 215,904 - 4,954,952 58,372,043 2,606,722 (52,539,415) 8,439,350

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

5

Immuron Limited Consolidated statement of cash flows For the year ended 30 June 2018

Cash flows from operating activities Notes Receipts from customers Payments to suppliers and employees Interest received Other - R&D tax concession refund and other government grants Interest and other costs of finance paid Net cash used in operating activities Cash flows from investing activities Payments for property, plant and equipment Net cash used from investing activities Cash flows from financing activities Proceeds from issues of shares and other equity securities 7(a) Proceeds from borrowings Repayment of borrowings Capital raising cost 7(a) Net cash provided from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at end of period

Consolidated entity 2018 2017 $ $ 1,601,619 1,413,676 (7,262,348) (9,971,142) 1,278 8,386 2,156,206 1,615,043 (24,199) (97,051) (3,527,444) (7,031,088) (6,594) (5,696) (6,594) (5,696) 5,472,200 12,525,067 500,000 500,000 (865,864) (2,191,593) (733,152) (2,132,422) 4,373,184 8,701,052 839,146 1,664,268 3,994,924 2,290,639 (106,640) 40,017 4,727,430 3,994,924

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

6

Immuron Limited Notes to the consolidated financial statements 30 June 2018

1 Summary of significant accounting policies

(a) Basis of preparation

This Preliminary Financial Report covers the entity of Immuron Limited and its controlled entities. The preliminary general purpose financial report for the period ended 30 June 2018 has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001.

The Group’s Preliminary Financial Report does not include all 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.

(b) Accounting policies

All accounting policies adopted are consistent with the most recent Annual Financial Report for the year ended 30 June 2017. The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretation issued by the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the consolidated entity.

There are no other standards that are not yet effective and that would be expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

7

Immuron Limited Notes to the consolidated financial statements 30 June 2018

(continued)

2 Revenue and other income

The Company derives the following types of revenue:

Revenue from operating activities Sales of good Less: discounts and rebates Total revenue from operating activities Other income Interest income R&D tax concession refund Other income Total other income	Consolidated entity 2018 2017 $ $ 2,000,832 1,565,319 (157,923) (169,122)
	1,842,909 1,396,197 1,238 8,386 1,849,123 1,575,315 40 30,672 1,850,401 1,614,373

3 Expenses

Consulting, employee and director Wages and salaries expenses Superannuation and other employee related expenses Director expenses Share- based payments Total consulting, employee and director expenses Other corporate administration Audit and accounting fees Legal fees Insurances Foreign exchange (gain) / losses Corporate administration costs Total corporate administration expenses	Consolidated entity 2018 2017 $ $ 885,197 905,819 153,795 39,664 285,331 221,373 59,975 522,665 1,384,298 1,689,521 222,973 146,007 11,513 - 277,888 150,502 (258,767) 238,985 1,082,909 846,315 1,336,516 1,381,809

8

Immuron Limited Notes to the consolidated financial statements 30 June 2018 (continued)

4 Segment information

(a) Description of segments and principal activities

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 two reportable segments.

Research and Development (R&D): Income and expenses directly attributable to the Company’s research and development projects performed in Australia, Israel and United States.

HyperImmune Products: Income and expenses directly attributable to Travelan activities which occur in Australia, New Zealand, US and Canada. In 2018, the Company earned 62%, 1% and 37% of its revenues from customers located in Australia, Canada and US, respectively. In 2017, the Company earned 64%, 10% and 26% of its revenues from customers located in Australia, Canada and US, respectively.

(b) Segment results

(b)Segment results
Consolidated entity 2018 Segment revenue & other income Revenue from external customers R&D tax concession refund Other income Total Segment revenue & other income Segment expenses Depreciation Finance fee costs Share-based payments Other operating expenses Total segment expenses Income tax expense (Loss)/profit for the year Assets Segment assets Total assets Liabilities Segment liabilities Total liabilities	Research & Development HyperImmune Products Unallocated Corporate Total $ $ $ $ - 1,842,909 - 1,842,909 1,849,123 - 1,238 1,850,361 - 40 - 40 1,849,123 1,842,949 1,238 3,693,310 - - (5,047) (5,047) - - (18,857) (18,857) - - (59,975) (59,975) (2,257,224) (832,661) (3,530,475) (6,620,360)
	(2,257,224) (832,661) (3,614,354) (6,704,239) - - - - (408,101) 1,010,288 (3,613,116) (3,010,929) 1,191,029 3,162,045 4,889,614 9,242,688 1,191,029 3,162,045 4,889,614 9,242,688 (174,434) (26,009) (602,895) (803,338) (174,434) (26,009) (602,895) (803,338)

9

Immuron Limited Notes to the consolidated financial statements 30 June 2018 (continued)

4 Segment information (continued)

(b) Segment results (continued)

Consolidated entity 2017 Segment revenue & other income Revenue from external customers R&D tax concession refund Interest income Other income Total Segment revenue & other income Segment expenses Depreciation Finance fee costs Share-based payments Other operating expenses Total segment expenses Income tax expense (Loss)/profit for the year Assets Segment assets Total assets Liabilities Segment liabilities Total liabilities	Research & Development HyperImmune Products Unallocated Corporate Total $ $ $ $ - 1,396,197 - 1,396,197 1,575,315 - - 1,575,315 - - 8,386 8,386 25,000 5,672 - 30,672 1,600,315 1,401,869 8,386 3,010,570 - - (4,922) (4,922) - - (24,483) (24,483) (188,481) - (334,184) (522,665) (4,805,874) (1,017,169) (3,439,611) (9,262,654)
	(4,994,355) (1,017,169) (3,803,200) (9,814,724) - - - - (3,394,040) 384,700 (3,794,814) (6,804,154) 1,498,112 2,585,755 4,202,624 8,286,491 1,498,112 2,585,755 4,202,624 8,286,491 (514,326) (330,218) (867,021) (1,711,565)
	(514,326) (330,218) (867,021) (1,711,565)

10

Immuron Limited Notes to the consolidated financial statements 30 June 2018 (continued)

5 Inventories

Raw materials - Colostrum Work in progress Finished goods - Travelan and Protectyn Total of inventories classified under current asset Raw materials - Colostrum Total of inventories classified under non-current asset	Consolidated entity 2018 $ 2017 $ 198,585 1,793,882 33,625 48,425 265,692 357,478 497,902 2,199,785 Consolidated entity 2018 $ 2017 $ 2,171,867 - 2,171,867 -

6 Contingent liabilities and contingent assets

There has been no change in contingent liabilities and assets since the last annual reporting date.

11

Immuron Limited Notes to the consolidated financial statements 30 June 2018 (continued)

7 Equity (a) Contributed equity 2018 Shares 2017 Shares 2018 $ 2017 $ Ordinary shares Ordinary shares - fully paid 142,778,206 130,041,417 58,372,044 53,632,995 Total share capital 142,778,206 130,041,417 58,372,044 53,632,995 (i) Movements in ordinary share: Notes Number of shares $ Opening balance 1 July 2016 80,099,646 45,633,354 Share issued during the year 2 49,941,771 9,965,323 Transactions costs - (2,037,557) Exercise of options - transfer from reserve - 71,875 Balance 30 June 2017 130,041,417 53,632,995 Share issued during the year 1 14,736,789 5,472,200 Transactions costs - (733,152) Cancellation of Shares (2,000,000) - Balance 30 June 2018 142,778,206 58,372,043 1During the year ended 30 June 2018, the Company issued the following ordinary shares:	7 Equity (a) Contributed equity 2018 Shares 2017 Shares 2018 $ 2017 $ Ordinary shares Ordinary shares - fully paid 142,778,206 130,041,417 58,372,044 53,632,995 Total share capital 142,778,206 130,041,417 58,372,044 53,632,995 (i) Movements in ordinary share: Notes Number of shares $ Opening balance 1 July 2016 80,099,646 45,633,354 Share issued during the year 2 49,941,771 9,965,323 Transactions costs - (2,037,557) Exercise of options - transfer from reserve - 71,875 Balance 30 June 2017 130,041,417 53,632,995 Share issued during the year 1 14,736,789 5,472,200 Transactions costs - (733,152) Cancellation of Shares (2,000,000) - Balance 30 June 2018 142,778,206 58,372,043 1During the year ended 30 June 2018, the Company issued the following ordinary shares:
Date Details No.	Issue price Total value $ $
Issue of Equity for the repayment of Sea Otter 16th payment of Convertible 28 July 2017 Note 399,045 Issue of Shares to Grandlodge - Issue 13 November 2017 of Shares to Grandlodge 875,000 Private Placement to US Investment 15 March 2018 Fund 13,162,744 Exercise of NASDAQ Warrants 15 March 2018 (IMRNW) 300,000	$0.19 75,333 $0.16 140,000 $0.39 5,161,585 $0.32 95,282
14,736,789	5,472,200

12

Immuron Limited Notes to the consolidated financial statements 30 June 2018 (continued)

7 Equity (continued)

(a) Contributed equity (continued)

2During the year ended 30 June 2017 the Company issued the following ordinary shares:

Date	Details				No.	Issue price	Total value
						$	$
7 July 2016	Right issue*				18,045,512	-	-
7 July 2016	Right issue				3,275,466	0.250	818,867
	Right issue	to oversubscribes and
29 September 2016	private placement				3,968,916	0.250	992,229
	Shares under ESOP		– for 6 months
2 December 2016	service (vesting monthly)				251,877	0.245	61,710
	Shares	issued	on	NASDAQ
9 June 2017	(equivalent	to 610,000 ADSs)**			24,400,000	0.332	8,092,517
					**49,941,771 **		9,965,323

*As at 30 June 2016, the Company was committed to issue 18,045,512 of ordinary shares in relation to the $4,511,378 received in capital raising. These shares were subsequently issued to respective holders on 7 July 2016. 2,418,129 of these new fully paid ordinary shares were issued to Grandlodge on the same terms and conditions as all other subscribers.

**Grandlodge participated in the NASDAQ IPO and acquired 32,707 ADRs and 32,707 warrants over ADRs (1 ADR = 40 ordinary shares).

(b) Other reserves

The following table shows a breakdown of the Statement of Financial Position line item ‘other reserves’ and the movements in these reserves during the year. A description of the nature and purpose of each reserve is provided below the table.

Consolidated entity Balance at 1 July 2016 Options/warrants issued during the year Expense of vested options Lapse of unexercised options Other comprehensive income for the period At 30 June 2017 Balance at 1 July 2017 Options/warrants issued during the year Options exercised during the year Options/Warrants issued Lapse of unexercised options Other comprehensive income for the period At 30 June 2018

Options over fully paid ordinary shares Foreign currency translation No. of Amount reserve Total options $ $ $ 9,937,629 2,132,301 (3,735) 2,128,566 56,002,894 136,784 - 136,784 - 333,950 - 333,950 (2,250,000) (168,900) - (168,900) - - 40,017 40,017 63,690,523 2,434,135 36,282 2,470,417 63,690,523 2,434,135 36,282 2,470,417 8,424,157 156,392 - 156,392 (300,000) - - - - 59,975 - 59,975 (465,500) (463) - (463) - - (79,599) (79,599)

71,349,180 2,650,039 (43,317) 2,606,722

13

Immuron Limited Notes to the consolidated financial statements 30 June 2018 (continued)

7 Equity (continued)

(b) Other reserves (continued)

During the year ended 30 June 2018, the Company issued the following options:

Date	Details	No. Issue price*	No. Issue price*	Total value
			$	$
	Issue of options- Free-attaching 3
	options for every 5 new shares as a
15 March 2018	part of the capital raise	7,897,647	-	-
	Issue of options - Broker shares as
15 March 2018	part ofplacement fee	526,510	$0.30	156,392
		**8,424,157 **		156,392

As a part of the capital raise in March 2018, free attaching 3 options for every 5 shares were issued. Additionally, options were issued to the broker as part of the placement cost.

*Issue price has been rounded for presentation of this report.

During the year ended 30 June 2017, the Company issued the following options:

Date	Details		No.	Issue price*	Total value
				$	$
7 July 2016	Right issue**		18,045,512	-	-
7 July 2016	Right issue		3,275,466	-	-
	Right issue to oversubscribes and
29 September 2016	private placement		3,968,916	-	-
9 December 2016	Unlisted options in lieu of services		200,000	0.143	28,620
	Options issued to cover equivalent	of
	610,000 warrants on issue with
9 June 2017	NASDAQ		24,400,000	0.00033	8,101
	Options to be issued to cover
	equivalent of 35,075 warrants with
9 June 2017	NASDAQ		1,403,000	0.00033	463
	Options issued to cover equivalent	of
	91,500 warrants on issue	with
13 June 2017	NASDAQ		3,660,000	0.00033	1,215
22 June 2017	Unlisted options in lieu of services		1,050,000	0.094	98,385
			**56,002,894 **		136,784

*Issue price has been rounded for presentation of this report.

**As at 30 June 2016, the Company was committed to issue 18,045,512 options in relation to the $4,511,378 received in capital raising. These options were subsequently issued to respective holders on 7 July 2016. 2,418,129 of these options were issued to Grandlodge on the same terms and conditions as all other subscribers.

On 22 June 2017, the Company issued Professor Ravi Savarirayan, a Non-Executive Director of Immuron Limited, 1,000,000 unlisted options exercisable at $0.50 on or before 27 Nov 2019. These options are currently held in escrow and cannot be exercised until shareholder approval is granted.

14

Immuron Limited Notes to the consolidated financial statements 30 June 2018 (continued)

8 Loss per share

(a) Basic/diluted loss per share

From continuing operations attributable to the ordinary equity holders of the company (b)Diluted loss per share From continuing operations attributable to the ordinary equity holders of the company Total diluted earnings per share attributable to the ordinary equity holders of the Company (c)Reconciliation of earnings used in calculating loss per share Loss attributable to the ordinary equity holders of the Company used in calculating basic/diluted loss per share: (d)Weighted average number of shares used as the denominator Weighted average number of ordinary shares used as the denominator in calculating basic/diluted loss per share

Consolidated entity 2018 2017 Cents Cents (2.3) (6.4) Consolidated entity 2018 2017 Cents Cents (2.3) (6.4) (2.3) (6.4) Consolidated entity 2018 $ 2017 $ (3,010,929) (6,804,154) Consolidated entity 2018 2017 Number Number 133,660,556 105,866,110

The Company is currently in a loss making position any thus the impact of any potential shares is concluded as anti-dilutive which includes the company’s options and Convertible Note payable and warrants. Treasury shares are excluded from the calculation of weighted average number of ordinary shares.

15

Immuron Limited Notes to the consolidated financial statements 30 June 2018 (continued)

9 Subsidiaries

The Company's subsidiaries at 30 June 2018 are set out below. Unless otherwise stated, they have share capital consisting solely of ordinary shares that are held directly by the Company, and the proportion of ownership interests held equals the voting rights held by the Company. The country of incorporation or registration is also their principal place of business.

their principal place of business.
Subsidiary	Country of incorporation	2018 %	2017 %
Immuron Inc IMC Canada Limited* Anadis ESP Pty Ltd	United States of America Canada Australia	100 100 100	100 0 100

• Incorporated on 13 April 2018.

These companies are wholly owned subsidiary of Immuron Limited and was formed for the sole purpose to act as trustee for the Immuron Limited Executive Officer Share Plan Trust. All costs associated with the operations of this company are borne by Immuron Limited. Consolidated accounts have not been prepared as the net assets and trading activity of Anadis ESP Pty Ltd are not material.

10 Events occurring after the reporting period

On 29 June 2018, the Company announced to the market two major changes to the board. Effective July 01, 2018, the Company appointed a non-executive director, Mr. Richard J Berman and the resignation of the joint company secretary Mr. Peter Vaughan.

On 01 July 2018, the Company issued 1,000,000 unlisted employee stock options to a key management personnel, Mr. Jerry Kanellos.

On 11 July 2018, the Company announced that the European Patent Office (EPO) has decided to grant a patent for the use of composition for the treatment of Non-alcoholic steatohepatitis (NASH). This patent (EPO Grant No. 2424890) is entitled “Anti-LPS enriched immunoglobulin preparations for the treatment and/or prophylaxis of a pathologic disorder”). This patent is due to Expire in April 2030, with potential for supplementary protection and extension of this monopoly.

On 16 July 2018, the Company announced an update towards the research collaboration with the US Department of Defense Research going ahead. Studies were commissioned by the US Department of Defense to evaluate Travelan®’s ability to neutralise pathogenic bacteria of interest, including Campylobacter, ETEC and Shigella.

No other matter or circumstances has arisen since 30 June 2018 that has significantly affected, or may significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.

16