Immuron Ltd — Capital/Financing Update 2013

Mar 26, 2013

Immuron Limited

ACN: 063 114 045 (ASX : IMC)

Prospectus

FULLY UNDERWRITTEN RENOUNCEABLE RIGHTS ISSUE OFFER AND SHARE TOP UP OFFER

Renounceable Rights Issue Offer: three (3) New Shares for every two (2) Shares held by Shareholders registered at 5:00pm on Monday 8 April 2013 ( Record Date ) at an issue price of 0.3 cents ($0.003) per Share ( Rights Offer ) to raise $1,863,810 before costs.

Top Up Offer : Should there be a Shortfall in the Rights Offer; Eligible Shareholders are also offered the opportunity to subscribe for further New Shares from the Shortfall ( Top Up Offer ) at the same issue price of the Rights Offer.

The Lead Manager to the Rights Offer – Patersons Securities Limited The Offer is underwritten to an amount of $1,863,810 by Patersons Securities Limited

AN INVESTMENT IN THE COMPANY'S SECURITIES SHOULD BE CONSIDERED SPECULATIVE

This Prospectus is an important document and should be read in its entirety.

If after reading this Prospectus you have any questions about the securities being offered under this Prospectus, then you should consult your professional advisor.

Prospectus Contents

Corporate Directory

Summary of the Offer

1.	Indicative timetable and Important Information	5
1.1	Indicative timetable	5
1.2	The Offer	5
1.3	Electronic Prospectus	6
1.4	OVERSEAS SHAREHOLDERS	6
1.5	How to accept entitlement to New Shares	7
1.6	No financial advice	7
1.7	Forward‐looking statements and risks	7
1.8	Disclaimers	7
1.9	Company's website	7
1.10 Privacy		7
1.11 Defined terms and abbreviations		8
1.12 Warning Statement Applicable to New Zealand Investors		8
2.	Overview	9
2.1	Introduction	9
2.2	Offers to Shareholders	9
2.3	Rights Trading	9
2.4	Offer to Underwriters	9
2.5	Summary key investment risks	10
2.6	Use of Funds Raised Under the Offer	11
2.7	Underwriting	12
3.	Details of the Offer to Shareholders	13
3.1	The Renounceable Rights Offer and Top Up Offer	13
3.2	Exercising Your Rights	15
4.	The Shares	19
4.1	Allotment and Allocation	19
4.2	ASX Listing	19
4.3	CHESS	19
4.4	Taxation	19
4.5	Prohibition on Exceeding 20% Voting Power Threshold	20
4.6	Directors' Discretion	20
4.7	Privacy Disclosure	20
5.	Effect of the Rights Issue on the Company	21
5.1	Effect on Financial Position of the Company	21
5.2	Effect on the Capital Structure of the Company	23
5.3	Potential Effect on Control of the Company	25
5.4	Change of control	25
6.	Risk factors	27
6.1	Introduction	27
6.2	General risks	27
6.3	Operational Risks	28
7.	Additional information	30
7.1	Continuous Disclosure and Documents Available for Inspection	30
7.2	Information Excluded from Continuous Disclosure Notices	31
7.3	Interests of Directors	31
7.4	Interests of Directors in Existing Securities	31
7.5	Market Prices of Shares	32

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7.6 Restricted Securities	33
7.7 Broker Handling Fees	33
7.8 Interests of Named persons	33
7.9 Taxation	34
7.10 Legal Proceedings	34
7.11 Material Contracts	34
7.12 Consents to be named	38
7.13 Electronic Prospectus	38
7.14 Further Information	38
7.15 Authority of Directors	38
8. Definitions	40

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Corporate Directory

Directors

Dr Roger Aston, Non‐Executive Chairman

Dr Elane Zelcer, Independent Non‐Executive Director

Dr Stewart Washer, Independent Non‐Executive Director

Mr Daniel Pollock, Independent Non‐Executive Director

Company Secretary

Mr Graeme Stevens, Chief Financial Officer and Company Secretary

Registered Office

Level 1, 18 Kavanagh Street Southbank, VIC 3006

Telephone +61 (0)3 8648 4530 Fax +61 (0)3 9686 9460 Email info@immuron.com Website www.immuron.com

Share Registry

Computershare Investor Services Pty Limited Yarra Falls 452 Johnson Street Abbotsford VIC 3067

Lead Manager and Underwriter

Patersons Securities Limited Level 15 333 Collins Street Melbourne VIC 3000

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SUMMARY OF THE OFFER

Offer Details		Where to
		find more
		information
What is the	The offer being made by the Company comprises:
Offer?	(a) Renounceable rights issue offer of New Shares (Rights Offer) and	Section 2
	(b)Top Up Offer,
	in each case toEligible Shareholdersto raise in aggregate $1,863,810
	before the expenses of the Offer where the Rights Offer / Top UP Offer is
	fully subscribed.
What are the	Rights Offer– Renounceable rights issue of New Shares on the following	Section 2.2
terms of the Offer?	basis:
	 three (3) New Shares for every two (2) Shares held on the Record
	Date at an issue price of 0.3 cents ($0.003) per New Share, and
	 the entitlement to all New Shares issued will be rounded up to the
	nearest whole number.
	Top Up Offer– In addition, Eligible Shareholders who have subscribed for
	their full entitlement under the Rights Offer may in the same Application
	seek to participate in the Top Up Offer at the same price as the Rights
	Offer, being $0.003 per New Share.
Can I sell or	Yes. The Offer is renounceable and accordingly you can sell or transfer
transfer my	any of your Rights on the ASX or via an off‐market transfer. You can also	Section 2.3
Rights?	purchase additional Rights.
Ranking of	All New Shares issued will rank equally in all respects with existing Shares	Section 2.2
New Shares	from the date of their issue.
Who can	Eligible Shareholders of the Company as at 5:00 pm AEST on the Record	Section 2.2
invest?	Date of 8 April 2013.
Is the Offer	The Offer is underwritten by Patersons Securities Limited up to a total
underwritten?	amount of $1,863,810.	Sections 2.4
		and 7.11
What are	As an Eligible Shareholder you may:	Section 3
my choices?	 take up part or all of your Entitlement under the Rights Offer; or
	 take up all of your Entitlement under the Rights Offer and subscribe
	for further New Shares under the Top Up Offer; or
	 take up part of your Entitlement under the Rights Offer and sell some
	or all of that part of your Rights not taken up; or
	 Sell part or all of your Rights to your Entitlement as indicated above;
	or
	 do nothing and allow your Entitlement to lapse and become part of
	the Shortfall.

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1. Indicative timetable and Important Information

1.1 Indicative timetable

The indicative timetable* for the Renounceable Rights Issue Offer is as follows:

Action	Date
Announcement and lodge Appendix 3B with ASX	27 March 2013
Prospectus lodged with ASIC and ASX	27 March 2013
Send information (including timetable) to Shareholders	28 March 2013
"Ex‐Date" (Ordinary Shares quoted ex entitlement to the Rights Issue) and Rights trading commences	2 April 2013
Record Date for determining entitlements to Rights Issue	8 April 2013
Dispatch Prospectus (together with Entitlement and Acceptance Form) to shareholders	12 April 2013
Rights trading ends	19 April 2013
Shares quoted on a deferred settlement basis	22 April 2013
Closing date	29 April 2013
Notify ASX of under subscriptions	30 April 2013
Expected date for allocation of Shares	3 May 2013
Expected date for despatch of holding statements	6 May 2013
Expected Date for the General Meeting for approval of the Underwriting Options	13 May 2013

• The above dates are indicative only. The Company reserves the right to vary the above dates without prior notice, which may have a consequential effect on other dates

1.2 The Offer

This Prospectus is dated 27 March 2013 and a copy of this Prospectus was lodged with ASIC and ASX on 27 March 2013. Neither ASIC nor ASX nor their respective officers take any responsibility as to the contents of this Prospectus.

No securities will be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus. Application will be made to the ASX within 7 days after the date of this Prospectus for permission for the Shares offered by this Prospectus to be listed for Official Quotation.

This Prospectus contains an offer to Eligible Shareholders of continuously quoted securities (as defined in the Corporations Act) and has been prepared in accordance with section 713 of the Corporations Act.

The Offer is made only to those Eligible Shareholders with registered addresses in Australia and New Zealand and only those Eligible Shareholders will be offered the New Shares. In making this offer to Eligible Shareholders in New Zealand, the Company is relying on the Securities Act (Overseas

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Companies) Exemption Notice 2002 (NZ), by virtue of which this Prospectus is not required to be registered in New Zealand.

The Company has not investigated the regulatory requirements that may prevail in any country in which the Company's Shareholders may reside outside of Australia and New Zealand. The distribution of this Prospectus in jurisdictions outside Australia and New Zealand may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe those restrictions. Any failure to comply with restrictions might constitute a violation of applicable securities laws.

This Prospectus is issued by the Company. No person is authorised to give any information or to make any representation in connection with the Offer in this Prospectus that is not contained in this Prospectus. Any information or representation not contained in this Prospectus may not be relied on as having been authorised by the Company in connection with the Offer.

Before deciding to invest in the Company, potential investors should read the entire Prospectus. The information contained in individual sections is not intended to and does not provide a comprehensive review of the business and the financial affairs of the Company or the Shares offered under this Prospectus. The Offer does not take into account the investment objectives, financial situation and particular needs of the investor. You should carefully consider the risks that impact on the Company in the context of your personal requirements (including your financial and taxation position) and seek professional guidance from your stockbroker, solicitor, accountant or other professional adviser prior to deciding whether to invest in the Company. Some of the risks that you should consider are set out in section 2.5 of this Prospectus.

1.3 Electronic Prospectus

This Prospectus is available in a paper version and in electronic form. The electronic version will be available on the Company's website, http://www.immuron.com/, from the date of this Prospectus until the Expiry Date. The Offer constituted by this Prospectus in electronic form is available only to Eligible Shareholders receiving this Prospectus in electronic form in Australia. Persons who access the electronic form of this Prospectus must ensure that they download and read the entire Prospectus. Any person may obtain a hard copy of this Prospectus free of charge by contacting the Company’s Share Registry Computershare on 1300 850 505 (within Australia) or +61 3 9415 4000 (outside Australia).

1.4 OVERSEAS SHAREHOLDERS

The Offer does not, and is not intended to, constitute an offer in any place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or to issue this document under the laws applicable in that jurisdiction. It is not practicable for the Company to comply with the securities laws of every overseas jurisdiction, having regard to the number of overseas Shareholders, the number and value of the Shares these Shareholders would be offered, and the cost of complying with regulatory requirements in each relevant jurisdiction.

Accordingly, the Offer is limited to those Shareholders with a registered address which is in Australia or New Zealand. Shareholders with a registered address outside of Australia and New Zealand are excluded from this offer (Excluded Shareholders ). Shareholders should consult their professional advisors as to whether any government or other consents are required, or other formalities need to be observed, to enable them to take up their Entitlements under the Offer.

The Company has appointed Patersons Securities Limited as nominee for the Excluded Shareholders to arrange the sale of the Rights which would have been offered to the Excluded Shareholders. The Company will transfer the Rights of the Excluded Shareholders to the nominee who will instruct the Company's Share Registry to dispatch the sale proceeds (if any) to each individual Excluded Shareholder. The nominee will have absolute and sole discretion to determine the timing and the price

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at which the Rights may be sold and the manner of any such sale. Neither the Company nor the nominee will be subject to any liability for failure to sell the Rights that would have been offered to Excluded Shareholders or to sell them at a particular price.

If, in the reasonable opinion of the nominee, there is not a viable market for the Rights or a surplus over the expenses of sale cannot be obtained for the Rights that would have been offered to Excluded Shareholders, then those Rights will be allowed to lapse and will form part of the Shortfall Shares.

1.5 How to accept entitlement to New Shares

Entitlement to New Shares can be accepted in full or in part by completing and returning the Entitlement and Acceptance Form which is accompanying this Prospectus in its paper copy form, or a print out of the form which formed part of or, was accompanied by, the complete and unaltered electronic version of this Prospectus. Instructions for completing and returning the Entitlement and Acceptance Form are set out in sections 3.2 of this Prospectus and the Entitlement and Acceptance Form.

1.6 No financial advice

The information given in this Prospectus does not constitute financial product advice. This Prospectus is of a general nature and has been prepared without taking into account your individual investment objectives, financial situation, tax position or particular investment needs. Before making an investment decision on the basis of this Prospectus, you should consider the appropriateness of the information having regard to your investment objectives, financial needs and investment needs. If you have any questions about any of the matters contained in this Prospectus, you should contact your legal adviser, stockbroker, accountant or other relevant adviser.

1.7 Forward‐looking statements and risks

This Prospectus contains a number of forward‐looking statements. Forward‐looking statements provided in this Prospectus are based on assumptions and contingencies which are subject to change without notice and involve known and unknown risks and uncertainties and other factors which are beyond the control of the Company. They are provided as a general guide only and should not be relied on as an indication or a guarantee of future performance. Actual results, performance or achievements may differ materially from those expressed or implied in such statements and any projections and assumptions on which those statements are based because events and actual circumstances frequently do not occur as forecast and these differences may be material.

1.8 Disclaimers

In making representations in this Prospectus, regard has been had to the fact that the Company is a disclosing entity for the purposes of the Corporations Act and certain matters may reasonably be expected to be known to investors and professional advisers whom potential investors may consult. Except as required by law, neither the Company nor any other person warrants the future performance of the Company or any return on any investment made under this Prospectus. Any investment in the securities offered by this Prospectus should be considered speculative.

1.9 Company's website

Any references to documents included on the Company's website are provided for convenience only and none of the documents or other information on the website is incorporated by reference as content of this Prospectus.

1.10 Privacy

The privacy obligations and policy relating to this Prospectus are contained in the privacy disclosure statement in section 4.7.

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1.11 Defined terms and abbreviations

Defined terms and abbreviations used in this Prospectus are explained in defined terms in section 8 of this Prospectus.

1.12 Warning Statement Applicable to New Zealand Investors

This Rights Offer to New Zealand investors is a regulated offer made under Australian and New Zealand law. In Australia, this is Chapter 8 of the Corporations Act 2001 and Regulations. In New Zealand, this is Part 5 of the Securities Act 1978 and the Securities (Mutual Recognition of Securities Offerings—Australia) Regulations 2008.

This Offer and the content of the Offer document are principally governed by Australian rather than New Zealand law. In the main, the Corporations Act 2001 and Regulations (Australia) set out how the offer must be made. There are differences in how securities are regulated under Australian law. For example, the disclosure of fees for collective investment schemes is different under the Australian regime.

The rights, remedies, and compensation arrangements available to New Zealand investors in Australian securities may differ from the rights, remedies, and compensation arrangements for New Zealand securities.

Both the Australian and New Zealand securities regulators have enforcement responsibilities in relation to this Offer. If you need to make a complaint about this Offer, please contact the Financial Markets Authority, Wellington, New Zealand. The Australian and New Zealand regulators will work together to settle your complaint.

The taxation treatment of Australian securities is not the same as for New Zealand securities. If you are uncertain about whether this investment is appropriate for you, you should seek the advice of an appropriately qualified financial adviser.

The Offer may involve a currency exchange risk. The currency for the securities is not New Zealand dollars. The value of the securities will go up or down according to changes in the exchange rate between that currency and New Zealand dollars. These changes may be significant. If you expect the securities to pay any amounts in a currency that is not New Zealand dollars, you may incur significant fees in having the funds credited to a bank account in New Zealand in New Zealand dollars.

If the securities are able to be traded on a securities market and you wish to trade the securities through that market, you will have to make arrangements for a participant in that market to sell the securities on your behalf. If the securities market does not operate in New Zealand, the way in which the market operates, the regulation of participants in that market, and the information available to you about the securities and trading may differ from securities markets that operate in New Zealand.

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2. Overview

2.1 Introduction

On 27 March 2013 Immuron announced it intended to offer to its Shareholders the entitlement to participate in a renounceable rights issue together with a top up facility.

This Prospectus relates to the Rights Issue Offer and the Top Up Offer available to the Company’s Shareholders as at the Record Date, to be issued in accordance with this Prospectus lodged pursuant to section 713 of the Corporations Act. Section 713 provides that where a company that is a disclosing entity for the purposes of the Corporations Act decides to make an offer of continuously quoted securities or options to acquire continuously quoted securities, it is entitled to issue a prospectus for the offer of those securities with disclosure that is limited to certain transaction‐specific information.

A more detailed summary of each of the offers is provided in the following sections.

2.2 Offers to Shareholders

A renounceable rights issue offer of three (3) New Shares for every two (2) Shares held as at 5:00pm AEST on 8 April 2013 ( Record Date ) at an issue price of $0.003 per Share, ( Rights Offer ). The Rights Offer may only be accepted by Eligible Shareholders completing and returning the personalised Entitlement and Acceptance Form accompanying this Prospectus.

Eligible Shareholders who subscribe for their full entitlement under the Rights Offer are also eligible to subscribe (under the same Entitlement and Acceptance Form) for additional New Shares should there be a Shortfall under the Rights Issue ( Top Up Offer ) at the same issue price and terms as the Rights Issue.

All of the shares offered under this Prospectus will rank equally with the Shares on issue as at the date of this Prospectus. Please refer to Annexure A to this Prospectus for further information regarding the rights attaching to the Shares.

The Directors reserve the right that if there is still a shortfall in the Rights Issue after all applications under the Top Up Offer and the Underwriting have been taken into account, the Directors may (within the 3 months following the Closing Date) issue that shortfall to any investors as selected by the Directors in their discretion. For clarity, there may be a shortfall if for whatever reason the Underwriter is not obliged to subscribe for the Underwritten Shares (for example, if the Underwriting Agreement had been terminated).

Please note there is no minimum subscription amount by Shareholders as a requirement under the Rights Offer and the Top Up Offer.

2.3 Rights Trading

Entitlements to Shares pursuant to the Offer are renounceable. This enables Shareholders who do not wish to subscribe for some or all of their Shares under the Rights Offer to sell some or all of their respective Entitlements and also enables Shareholders to purchase additional Rights entitlements if they wish to do so.

Rights trading commences on 2 April 2013. You must deal with your Entitlement by close of trading on 19 April 2013, when the trading of Rights ceases.

2.4 Offer to Underwriters

The terms of the underwriting of the Rights Offer is set out in section 7 of this Prospectus ( Underwriting Agreement ). As part of the terms of the Underwriting Agreement the Underwriter is

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entitled to a $60,000 management fee, 6% commission on the underwritten amount together with the grant by the Company of 155,317,521 Underwriting Options. The Underwriter's entitlement to the Underwriting Options is subject to the issue of those Options being approved by Immuron Shareholders. The expected date of the General Meeting seeking the approval of the issue of those Underwriting Options is 13 May 2013. The Underwriting Options are a component of the underwriting fees and commission payable by the Company to the Underwriter in return for the Underwriter agreeing to subscribe for any Shortfall Shares.

The terms of the Underwriting Options include the following and will otherwise contain standard commercial terms:

• (a) each option converts into one Share and is exercisable at any time up to and including the Expiry Date, namely 5:00 pm AEST on 31 March 2016. Any options not exercised by the Expiry Date will automatically lapse on the Expiry Date;

• (b) the Exercise Price for each option is $0.01 (resulting in the issue of one (1) Share on exercise of an Underwriting Option); and

• (c) the Company will not be seeking Official Quotation of the Underwriting Options.

2.5 Summary key investment risks

• The Company has incurred substantial losses to date. The accounts for the half year ended 31 December 2012 accounts were qualified on a "going concern" basis and there is no expectation that the Company's cash requirements will change in the immediate future (subject to capital raising efforts). Accordingly the Company requires continual funding in the future to meet its ongoing expenditures in excess of its revenues. The Company has not specified a minimum amount to be raised in respect of the Offer and the Company will require further funding in the future.

• The Company depends on its ability to sell Travelan through its present and future distribution partners. There is no guarantee that the existing distribution arrangements will lead to the successful commercialisation of Travelan, nor, that the Company will enter into additional distribution arrangements.

• The Company depends on its external contractors to produce its product from dairy herds. There are a number of risks associated with this production, which are typical of agricultural production generally.

• Regardless of how many options are exercised, the Company will need to raise further capital over the next three years to fund its future operations.

• If you do not exercise your entitlements under the Rights Issue and other investors do, your Shareholding will be diluted. You should also have regard to the potential impact of the allotment of any Shortfall by the Underwriter (see section 5.3).

The above provides a summary of the key investment risks. You should read this Prospectus in full, including Section 6 which contains more detailed disclosure of the risks associated with an investment in the Company.

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2.6 Use of Funds Raised Under the Offer

The total amount sought to be raised under the Rights Issue in relation to the subscription for Shares is $1,863,810 (assuming the Rights Offer / Top Up Offer and any Shortfall if taken up under the Underwriting Agreement are fully subscribed) before the expenses of the issue.

The funds to be raised will be used to continue the Company’s commercialisation efforts, including pursuing the commercialisation of Travelan in the USA. These activities inherently require business development, sales, and raw material production and product manufacture. The Offers will also provide the Company with working capital.

The table below sets out an estimated breakdown of the expenditure of the funds in the coming year in each of the areas of activity together with a working capital estimate and the costs of the Offers, assuming the Offers will be fully subscribed.

	Activity	Estimated Amount
	Travelan inventories, manufacturing and marketing, net of revenues	125,000
	Ongoing costs of commercialising Travelan	80,000
	Current research and commercialisation programmes and IP costs	500,000
	Costs of issue, including maximum underwriting costs	234,000
	General and administration funds, debt commitments and increase in	924,810
	workingcapital funds
	Total	$ 1,863,810

More specifically:

1. No minimum subscription amount to be raised : Where the aggregate amount raised under the Rights Issue and the Top Up Offer is less than $1,863,810 after allowing for subscriptions by the Underwriter (if, for example, there was a Shortfall and the Underwriting Agreement had been terminated), Immuron would scale its activities accordingly and continue to prioritise commercialisation of Travelan in the USA.

2. The Commercialisation of Travelan . A new distribution agreement for Travelan in the US is currently being pursued by the Company and in addition the Company is exploring potential distribution in other countries. However any distribution is subject to first attaining agreement with a local licensee/distributor; selling Travelan need to be done in compliance with local regulatory requirements and ultimately depends on the abilities of the appointed distributor. Investors should note there is no guarantee that such an agreement/s will be entered into by the Company or that it will be able to satisfy local regulatory requirements for distribution of Travelan.

3. Purchase of raw materials : Because of the cyclical nature of production, which tracks dairy herds’ calving patterns, Immuron needs to commit to the purchase of raw materials in advance of selling its product. This requires a commitment by Immuron in advance of committed orders or sales of Travelan.

4. Progress IMM‐124E through Clinical Trials . Whilst Travelan is currently anticipated to generate revenues in the medium term for the Company, the Company is of the view that Immuron’s product pipeline potentially adds additional material value. The most advanced product currently in development is IMM‐124E for the proposed treatment of Fatty Liver and NASH (non‐alcoholic steatohepatitis). Immuron aims to license IMM‐124E with the objective that progress of this product through clinical trials would in those circumstances be funded by a third party. To be able to do this, it is likely that additional clinical studies will be needed to support the clinical results generated to date. There is no guarantee that any such studies will be conducted or that IMM‐ 124E will be out‐licensed.

5. P rogress other Product Candidates . In addition to IMM‐124E, Immuron is developing additional products with its research and development collaborators. Immuron’s influenza product candidate

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and its C. difficile product candidate are being developed in collaboration with the University of Melbourne and Monash University respectively, in each case with the support of an ARC Linkage grant. The Company needs to prioritise expenditure and may or may not proceed with either of these other candidates. Investors should consider any investment decision without attributing material value to these product candidates.

6. Ongoing Operations . Each of the activities referred to above requires the close attention of the Company’s team and the breadth of its expertise management, business development, regulatory and production expertise, research and development and clinical experts. As a public listed company, compliance also requires adherence.

The Company intends to pursue all of the above activities in parallel. However, if it is not successful in raising the full amount of the Offer, the activities described above will need to be scaled back appropriately – with commercialisation of Travelan in the USA as a priority .

2.7 Underwriting

The Company has entered into an underwriting agreement ( Underwriting Agreement ) with Patersons Securities Limited ( Underwriter ) as detailed in Section 7. Investors should note that the Underwriting Agreement is subject to a number of termination events not in the control of the Company.

Shareholders should also note that pursuant to the Underwriting Agreement any Shortfall (after allowing for acceptances of the Top Up Offer) will be placed by the Underwriter with Sub Underwriters.

If after the Rights Offer and the Top Up Offer there remains a significant balance of Shares not taken up under either Offer, it is possible that the placement of that balance by the Underwriter to Sub Underwriters could result in the introduction of new major shareholder/s having a relevant interest of more than 20% of the then expanded issued Share capital of the Company.

The Company's last rights issue offer (announced to the ASX on 31 August 2011) resulted in an outstanding balance of 88% shortfall in that issue. Shareholders should take this into consideration in reviewing the Offers under this Prospectus and the potential of a Shortfall being available under the Top Up Offer and otherwise the balance being placed with sub–underwriters or the Underwriter.

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3. Details of the Offer to Shareholders

3.1 The Renounceable Rights Offer and Top Up Offer

(a) Background

There will be an ongoing requirement for the Company to have access to further capital as it progresses its operational and research and development activities. Had the Company in the alternative undertaken a placement of securities in the Company to sophisticated and professional investors, that would have had a dilutive effect upon existing shareholders. Instead, the Company has decided to undertake a pro rata offer to all Shareholders (as at the Record Date) to acquire additional Shares in the Company together with the offer of a Top Up facility.

The rights attaching to the New Shares are described in Annexure A to this Prospectus.

There is no minimum number of New Shares that must be subscribed for by Eligible Shareholders under the Rights Offer before any New Shares are issued pursuant to the Rights Offer.

There is no requirement for Shareholder approval in respect of the Rights Issue, other than for the Shareholder approval for the Underwriting Options.

(b) Subscription

The New Shares may be subscribed for under the Rights Offer at $0.003 per Share. The Company will apply for Official Quotation of the Shares as soon as practical, and in any case within 7 days of the date of this Prospectus.

If you do not wish to take up any part of your Entitlement you are not required to take any action.

The maximum number of New Shares that could be issued under the Rights Offer (subject to rounding and assuming that no additional shares will be issued arising from the exercise of any of the listed and unlisted options on issue as at the date of this Prospectus nor the right of Paladin to convert the tranches 1 and 2 borrowings, prior to the Record Date) is as follows:

	No. of Securities
Existing Issued Fully Paid Shares	414,180,057
New Shares (fully paid ordinary) offered under this Prospectus (Maximum)	621,270,086
TOTAL Shares on issue after conclusion of the Offers:	1,035,450,143

(c) Top Up Offer

In addition should there be a Shortfall in the Rights Offer, Eligible Shareholders are also offered the opportunity to subscribe for further New Shares at the same issue price ( Top Up Offer ).

The conditions applying to the Top Up Offer are:

• (i) Eligible Shareholders may apply for the Top Up Offer only if that Shareholder has (in the same Entitlement and Acceptance Form) subscribed for their full Entitlement;

• (ii) Allocations under the Top Up Offer will be determined by the Company having regard to the proportionate interest in the Company's shares held by the applicants under the Top Up Offer and the best interests of the Company in such allocations

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• (iii) If Applications under the Top Up Offer in aggregate exceed the actual number of Shares available under the Top Up Offer, applications will be scaled back in the discretion of the Board.. This will result in Eligible Shareholders being allotted a lesser number of New Shares than applied for;

• (iv) If the Board scales back applications under the Top Up Offer, this may result in Eligible Shareholders being allotted a lesser number of New Shares than applied for. Eligible Shareholders shall be bound to accept a lesser number of New Shares under the Top Up Offer if required by the Board;

• (v) Eligible Shareholders must accept a refund of money in respect of any New Shares applied for but not allotted under the Top Up Offer; and

• (vi) No interest will be paid on any money refunded to Shareholders should the above circumstances occur.

The issue price of New Shares offered pursuant to the Top Up Offer is the same as the Rights Offer, namely $0.003 per share.

(d) Placement of Shortfall

If there remains any Shortfall after the Rights Offer, the Top Up Offer and there are no Shares taken up by the Underwriter in accordance with terms of the Underwriting Agreement (for example, the Underwriting Agreement has been terminated), the Directors reserve the right to issue the remaining Shortfall at their discretion up to 3 months after the close of the Offer. In such circumstances, any issue by the Directors will be at the same issue price as offered under the Rights Offer.

(e) Entitlement and Application

The number of New Shares to which you are entitled to subscribe for under the Rights Offer ( Entitlement ) is shown on the accompanying Entitlement and Acceptance Form. Your Entitlement will be determined on the Record Date. The Rights Offer may only be accepted by Eligible Shareholders. You may accept the Rights Offer for a lesser number of New Shares should you wish to take up only part of your Entitlement.

If you wish to subscribe for further Shares (under the Top Up Offer), and you have subscribed for your full Entitlement under the Rights Offer, provision has also been made on the Entitlement and Acceptance Form for you to subscribe for additional shares under the Top Up Offer.

Lodgement of a completed Entitlement and Acceptance Form creates a legally binding contract between the Applicant and the Company for the number of New Shares applied for and is not revocable by the Shareholder. The Entitlement and Acceptance Form does not need to be signed to be a binding acceptance for the New Shares.

If the Entitlement and Acceptance Form is not completed correctly it may still be treated by the Board as valid.

The Directors’ decision as to whether to treat the acceptance as valid and how to construe, amend or complete the Entitlement and Acceptance Form is final.

By applying for New Shares under the Rights Issue (and Top Up Offer, if applicable), the Applicant is taken to:

1. agree to be bound by the terms and conditions set out in this Document and the Entitlement and Acceptance Form;

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1. authorise the Company to place that person's name on the Company's Share register in respect of the New Shares taken up under the Rights Offer and accepted under the Top Up Offer; and

2. agree to be bound by the Company's Constitution.

Until the time of allotment of New Shares, the Company will hold all application monies in relation to those New Shares to issue pursuant to the Rights Offer and Top Up Offer in a purpose specific bank account. Interest earned on any application monies (whether or not allotment takes place) will remain the property of the Company.

(f) Timetable

The Rights Offer and Top Up Offer open on 8 April 2013. The Company will accept Entitlement and Acceptance Forms until 5:00 pm (AEST) on 29 April 2013 ( Closing Date ), or such other date as the Directors in their absolute discretion shall determine, subject to the Listing Rules.

(g) Rounding

In determining the number of shares an Eligible Shareholder may be entitled to under the Offer, fractional entitlements will be rounded up to the nearest whole number

3.2 Exercising Your Rights

Your acceptance of the Rights Offer must be made on the Entitlement and Acceptance Form accompanying this Prospectus. If you do not exercise all of your Rights, your proportional shareholding in the Company will be diluted with respect to your right to future earnings and net assets of the Company. You may participate in the Rights Offer as follows:

• (a) if you wish to accept your Entitlement in full:

• (i) complete the Entitlement and Acceptance Form, section A, relating to the Rights Offer (corresponding to an acceptance of the full Entitlement), filling in the details in the space provided; and

• (ii) make payment of the application monies by your preferred payment method being either cheque or BPAY as per the amount and details indicated on the Entitlement and Acceptance Form; or

• (b) if you only wish to accept part of your Entitlement:

• (i) fill in the number of Shares you wish to accept in the space provided on the Entitlement and Acceptance Form (section A); and

• (ii) attach your cheque, or pay via BPAY, the appropriate application monies (at $0.003 per New Share); or

• (c) If you wish to participate in the Top Up Offer,

• (i) complete the Entitlement and Acceptance Form, section A, relating to the Rights Issue (corresponding to an acceptance of the full Entitlement), filling in the details in the space provided,

• (ii) insert the number of Shares you wish to accept under the Top Up Offer in section B of the Entitlement and Acceptance Form;

• (iii) complete section C for the total shares accepted under both Offers; and

• (iv) attach your cheque, or pay via BPAY, the appropriate application monies (at $0.003 per New Share).

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• (d) Allow all of your Rights to lapse

• (i) If you are an Eligible Shareholder and you do nothing, all of your Rights will lapse. The New Shares representing your Rights shall form part of the New Shares available for subscription by other Eligible Shareholders, and if not, then shall form part of the Shortfall available to the Underwriters to take up under the terms of the Underwriting Agreement.

• (e) Exercising a portion of your Rights and allowing the balance to lapse

If you wish to exercise only a portion of your Rights and allow the balance to lapse, complete section A of the Entitlement and Acceptance Form for the number of New Shares you wish to subscribe for and follow the steps required in accordance with section 3.2(b) above.

If you take no further action, the balance of your Rights will lapse.

• (f) Accepting your Rights Entitlement

If paying by cheque or money order:

To apply and pay by cheque or money order, you should:

• read this Prospectus and the attached Entitlement and Acceptance Form in their entirety and seek appropriate professional advice if necessary; and

• complete sections A, B and C of the Entitlement and Acceptance form as appropriate.

The completed Entitlement and Acceptance Form together with a cheque or money order for the applicable Application Monies (being the offer price of ($0.003) per New Share multiplied by the number of New Shares applied for) must be mailed to the postal address set out below:

POSTAL: Computershare Investor Services Pty Limited GPO Box 505 Melbourne, Victoria, 3001 Australia

All acceptances must be received at the Company’s Share Registry by 5:00pm (AEST) 29 April 2013 being the Closing Date of the Offer or such later date as the Company may specify.

The Company and the Share Registry accept no responsibility for delayed or misdelivered Entitlement and Acceptance Forms or payments.

Payment must be made by cheque drawn on an Australian bank or money order in Australian currency. Cheques should be made payable to “Immuron Limited” and crossed "Not Negotiable". The amount payable on Application will be deemed not to have been received until the Company is in receipt of clear funds.

Cheques may be processed on the day of receipt and as such, sufficient cleared funds must be held in your account when you return your completed Entitlement and Acceptance Form. Cheques returned unpaid may not be re‐presented and may result in your Application being rejected. Alternatively, and at the Company’s discretion, the Company may treat you as having applied for as many Shares as the cleared funds will pay for.

If paying by BPAY:

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• read this Prospectus and the Entitlement and Acceptance Form in their entirety and seek appropriate professional advice if necessary; and

• make your payment via BPAY for the number of New Shares you wish to subscribe for (being the offer price of $0.003 per New Share multiplied by the number of New Shares you are applying for) so that it is received no later than 5.00pm (AEST) 29 April 2013, or such later date as the Company may specify. You can only make a payment via BPAY if you are the holder of an account with an Australian financial institution.

If you choose to pay via BPAY you are not required to submit the Entitlement and Acceptance Form.

If your BPAY payment is received by 5:00pm (AEST) 29 April 2013 or such later date as the Company may specify, New Shares up to the payment amount received are anticipated to be allotted to you on the Dispatch Date (which date may change without notice). The issue of any Shortfall Shares for which payment is received is dependent upon sufficient Shortfall Shares being available. Any payment made by BPAY for an amount greater than the amount of an Applicant’s entitlement under the Rights Issue, will be taken to amount to an application for Shortfall Shares representing up to 10% of your Entitlement under the Rights Issue. Any funds that exceed your Entitlement under the Rights issue and the additional 10% under the Top Up issue will be refunded to you.

Applicants should be aware that their own financial institution may implement earlier cut off times with regards to electronic payment, and should therefore take this into consideration when making payment. You may also have your own limit on the amount that can be paid via BPAY. It is your responsibility to check that the amount you wish to pay via BPAY does not exceed your limit.

If you have multiple holdings you will have multiple BPAY reference numbers. To ensure that you receive your entitlement in respect of each holding, you must use the customer reference number shown on each personalised Entitlement and Acceptance Form when paying for any New Shares that you wish to apply for in respect of that holding.

For payments by cheque, money order or BPAY:

Your Application or payment may not be accepted if received after 5:00pm (AEST) 29 April 2013 (or such later date as the Company may specify), in which case no New Shares would be issued to you in respect of that Application or payment, and any payment received will be refunded to you after the Allotment Date in accordance with the Corporations Act, without interest.

The Directors may at their discretion issue New Shares in response to Entitlement and Acceptance Forms received after the Closing Date and time, but are under no obligation to do so.

The amount payable on Application will be deemed not to have been received until the Company is in receipt of cleared funds. Payments in cash will not be accepted.

If the amount of payment is insufficient to pay in full for the number of New Shares you applied for, or is more than the number of New Shares you applied for, you will be taken to have applied for such whole number of New Shares which you are entitled to and which is covered in full by your payment. Alternatively, the Company may in its discretion reject your Application, in which case any payment will be refunded to you after the Allotment Date in accordance with the Corporations Act, without interest.

If you apply for Shortfall Shares in excess of your Entitlement and you are not allocated all or some of the Shortfall Shares applied for, the relevant payment in respect of the un‐allocated

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Shortfall Shares will be refunded to you after the Allotment Date in accordance with the Corporations Act, without interest.

If you have any questions about your entitlement, please contact the Company's Share Registry on 1300 850 505 (within Australia) or +61 3 9415 4000 (outside Australia). Alternatively, contact your stockbroker or other professional adviser.

The issue of New Shares will occur as soon as practicable after the Offer has closed. Thereafter, statements of your Share holdings will be despatched. It is the responsibility of recipients to determine their allocation prior to trading in New Shares. Recipients trading New Shares before they receive their statements will do so at their own risk. The Company may reject an Entitlement and Acceptance Form where payment of the Application Monies is not received or a cheque is not honoured, or without prejudice to its rights accept an Entitlement and Acceptance Form and issue New Shares in response to the acceptance and recover outstanding Application Monies from the recipient.

This Prospectus does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make such an offer.

No account has been taken of the particular objectives, financial situation or needs of recipients of this Prospectus. Because of this, recipients of this Prospectus should have regard to their own objectives, financial situation and needs.

Recipients of this Prospectus should make their own independent investigation and assessment of the Company, its business, assets and liabilities, prospects and profits and losses, and the risks associated with investing in the Company. Independent expert advice should be sought before any decision is made to accept the Offer, or to acquire New Shares or other securities of the Company.

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4. The Shares

4.1 Allotment and Allocation

The New Shares will be allotted as soon as practicable after the Closing Date and otherwise in accordance with the Listing Rules. The expected dates for the allotment of New Shares offered by this Prospectus, and despatch of holding statements is specified in the Timetable.

4.2 ASX Listing

The Company intends to apply for Quotation of the New Shares as soon as practicable after the Record Date (and in any case within 7 days of the date of the Prospectus) and in accordance with the Listing Rules.

If approval is not obtained from ASX before the expiration of 3 months after the date of this Prospectus (or such period as varied by the ASIC) the Company will not issue any New Shares and will repay all application monies for the New Shares within the time prescribed under the Corporations Act, without interest. The fact that ASX may grant official quotation to the Shares issued pursuant to this Prospectus is not to be taken in any way as an indication of the merits of the Company or the New Shares now offered for subscription.

4.3 CHESS

The Company currently operates an electronic issuer‐sponsored sub‐register and an electronic CHESS sub‐register. The two sub‐registers together will comprise the Company's register of Shares.

The Company will not issue Share certificates to Shareholders. Applicants who are allotted New Shares under this Prospectus will be provided with a holding statement which sets out the number of New Shares allotted to the Applicant. Applicants who elect to hold New Shares on the issuer‐sponsored sub‐register will be provided with a holding statement (similar to a bank account statement), which sets out the number of Shares allotted to the Applicant under this Prospectus. For Applicants who elect to hold their New Shares on the CHESS sub‐register, the Company will issue an advice that sets out the number of New Shares allotted to the Applicant under this Prospectus. At the end of the month of allotment, CHESS, acting on behalf of the Company, will provide security Holders with a holding statement that confirms the number of New Shares held and any transactions during that month.

A holding statement (whether issued by CHESS or the Company) will also provide details of the applicable Holder Identification Number in the case of a holding on the CHESS sub‐register or Reference Number in the case of a holding on the issuer‐sponsored sub‐register. Following distribution of these initial holding statements, a holding statement will also be provided to each security holder at the end of any subsequent month during which the balance of that security holder's holding of Shares changes.

A security holder may request a holding statement at any other time. However, a charge may be made by the Share Registry for additional statements.

4.4 Taxation

The Directors do not consider that it is appropriate to provide Applicants with advice regarding the taxation consequences of accepting the Offer under this Prospectus as it is not possible to provide a comprehensive summary of the possible taxation positions of all Applicants as each Applicant's position will relate to their own specific circumstances. The Company, its advisers and officers, do not accept any responsibility or liability for any taxation consequences to individual Applicants in respect of any issue. Applicants should seek their own independent advice in relation to taxation implications of the Offer.

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4.5 Prohibition on Exceeding 20% Voting Power Threshold

Applicants must have regard to and comply with the takeovers prohibition in section 606 of the Corporations Act (that is, the 20% voting power threshold), when subscribing for New Shares other than pursuant to the Rights Offer or the Underwriting Agreement described in this Prospectus. The Company expressly disclaims any responsibility for ensuring that an Applicant does not breach section 606 as a result of subscribing for Shares.

If you may be at risk of exceeding the 20% voting power threshold in section 606 or increasing your voting power from a position above 20% as a result of the acquisition of subscribing for New Shares you should seek professional advice before subscribing for Shares.

4.6 Directors' Discretion

The Directors may at any time decide to withdraw this Prospectus. The Directors may make determinations in any manner they think fit in relation to any difficulties, anomalies or disputes which may arise in connection with or by reason of the operation of the Offer, whether generally or in relation to any Shareholder. Any determinations by the Board will be conclusive and binding on all Shareholders and other persons to whom the determination relates.

4.7 Privacy Disclosure

The Corporations Act requires the Company to include information about each security holder (name, address and details of the securities held) in its public register. This information must remain in the register even if you cease to be a security holder in the Company. Information contained in the Company's registers is also used to facilitate dividend payments and corporate communications (including the Company's financial results, annual reports and other information that the Company may wish to communicate to its security holders) and compliance by the Company with legal and regulatory requirements.

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5. Effect of the Rights Issue on the Company

5.1 Effect on Financial Position of the Company

The financial impact on the Company of the issue of the New Shares issued pursuant to this Prospectus, if fully subscribed, would be to receive additional capital cash inflows of $1,863,810 before costs associated with preparing this Prospectus, underwriting costs and associated costs with issuing the shares.

Costs Associated with the Company making this offer of New Shares

The total estimated expenses of the Offer payable by the Company, including accounting fees, legal fees, lodgement fees, listing fees, printing costs, and underwriting fees, will be approximately $234,000 (excluding GST).

The following table shows a breakdown of the estimated costs of the Offer (excluding GST and the implicit value of the Underwriter Options to be granted under the Underwriting Agreement):

Particulars	Amount ($)
ASIC lodgement fees	2,200
ASX fees	6,800
Legal, accounting and share registry	41,000
Lead management fee	60,000
Underwriting Fee payable	112,000
Printing and associated costs	12,000
TOTAL:	234,000

Pro‐Forma Statement of Financial Position

The audit reviewed Balance Sheet as at 31 December 2012 and the unaudited Pro‐Forma Balance Sheet as at 31 December 2012, as shown below, have been prepared on the basis of the accounting policies normally adopted by the Company and reflect the changes to its financial position as indicated below. The Pro‐Forma statement has been prepared on the assumption that all New Shares offered in accordance with the terms of this Prospectus will be taken up in full in accordance with the Rights Offer.

Both of the statements presented below are in abbreviated form insofar as they do not include all disclosures as required by the Australian Accounting Standards applicable to Annual Financial Statements.

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	Balance Sheet As at 31 Dec 2012 (Auditor Reviewed) ($ ‘000) Adjustment Due to Raising & Other Key Events Post Balance Date ($ ‘000) Pro‐Forma Balance sheet (Unaudited) ($ ‘000)
	ASSETS Current Assets Cash & cash equivalents 436 2,1091,2 2, 545 Trade & other receivables 190 ‐ 190 Inventories 314 ‐ 314 Other assets 35 ‐ 35
	Total Non‐Current Assets 975 2,109 3,084 Non‐Current Assets Property, plant and equipment 14 ‐ 14 Intangible assets 1,041 ‐ 1,041
	Total Non‐Current Assets 1,055 ‐ 1,055
	TOTAL ASSETS 2,030 2,109 4,139
	LIABILITIES Current Liabilities Trade & other payables 759 ‐ 759 Financial liabilities 38 ‐ 38
	Total Current Liabilities 797 ‐ 797 Non‐Current Liabilities Financial liabilities 628 4791 1,108
	Total Non‐Current Liabilities 628 479 1,108
	TOTAL LIABILITIES 1,425 479 1,905
	NET ASSETS 604 1,630 2,234
	EQUITY Contributed equity 30,025 1,8642 31,885 Reserves 940 ‐ 940 Accumulated losses (30,361) (234) (30,591)
	TOTAL EQUITY 604 1,630 2,234

The above pro‐forma unaudited Balance sheet has been prepared on the basis that except for the items listed below; there have been no material movements in the assets and liabilities of the Company between 31 December 2012 and the date of this Prospectus, except that on 18 February 2013 the Company announced that it had drawn down $CA 0.5 million, being the second tranche of the debenture agreement that facilitates a funding arrangement under which Paladin will have provided a total of $CA 1.5 million to Immuron; and that no existing listed and unlisted options issued as at the date of this Prospectus will be exercised on or before their expiry date.

The above financial information should be read in conjunction with the Company’s 2012 Annual Financial Report and 31 December 2012 Half Year Financial Statements. To receive a copy of these documents please contact the Company on +61 (0)3 8648 4530, or via the Company’s website www.immuron.com.

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Adjustment number		Amount of Adjustment ($)
1	Increase in cash funds on 18 February 2013 with the receipt of tranche 2 convertible debenture funds from Paladin of $AUD 479,255 ($CAD500,000). This liability can be converted to equity by Paladin at their election at any time, or will be 'automatically' convert to equity if the Company raises capital of at least $AUD1,500,000 (at least $0.0085 per Share) prior to 30 June 2013.	479,000
2	Cash raised from the maximum number of New Shares to be issued under this Prospectus	1,864,000
	Less: Estimated costs of the Offer under this Prospectus	($234,000)
	Total:	$2,109,000

5.2 Effect on the Capital Structure of the Company

The following table sets out the existing capital structure of the Company as at the date of this Prospectus and the anticipated capital structure on completion of the Rights Issue. This structure assumes that none of the current listed and unlisted options, nor the right of Paladin to convert the tranches 1 and 2 borrowings, will be exercised before the Record Date and that the 155,317,521 Underwriter Options will be issued in accordance with the terms of the Underwriting Agreement.

Details of the current shares and share options are as follows:

		No. of Securities
	Listed Shares Existing Fully Paid Ordinary Shares on Issue at Record Date New Shares (fully paid ordinary) Offered Under this Prospectus Total Number of Shares post Rights Offer Listed Options Listed Options (IMCO) exercisable at $0.12 on or before 15 Dec 2013 Listed Options (IMCOA) exercisable at $0.04 on or before 30 April 2015 Unlisted Options / Convertible Securities Unlisted Options (IMCJB2) exercisable at $0.0945 on or before 31 May 2013 Unlisted Options (IMCSO) exercisable at $0.07 on or before 30 June 2014 This is the maximum number of ordinary shares that can be issued to Paladin Labs Inc. under the terms of the convertible debenture entered into in December 2011. The conversion into fully paid ordinary shares. If these options are not	414,180,057 621,270,086 1,035,450,143 2,752,230 116,024,381 750,000 4,000,000 20,525,873

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converted on or before the 23 December 2014 expiry date, these options will lapse and a liability for this equivalent value will fall due (see below). Unlisted Options (IMCRM1) exercisable at $0.0497 on or before 30 Nov 2021 Unlisted Options (IMCRM2) exercisable at $0.048 on or before 17 Jan 2022 Unlisted Options (IMCSO1) exercisable at $0.04 on or before 30 June 2015 Unlisted Options (IMCSO2) exercisable at $0.04 on or before 1 Nov 2017 Underwriting Options exercisable at $0.01 on or before 31 March 2016	579,736 1,186,729 3,000,000 7,000,000 155,317,521
Total Options	311,136,470
Total Issued Shares and Options	1,346,586,613

Details of the current convertible securities (other than options) are as follows:

	Shares upon Conversion of Convertible Debentures with Paladin Labs Inc.(Paladin)	Number of Convertible Debentures on issue	Conversion Price of Debentures
	Tranche 1 Debenture Under the terms of the Convertible Debenture entered into with Paladin in January 2012, Paladin has the right to convert the loan funds of $CAD1,000,000 ($AUD963,762) into fully paid ordinary shares in the Company no later than January 2015, as announced to the market on 16 January 2012. Based on current exchange rates the maximum number of shares that can be issued if the loan funds are fully converted into ordinary shares is:	20,375,518	$0.0473
	Tranche 2 Debenture On 19 February 2013 the Company announced that it had finalised a drawn down of $CAD500,000 ($AUD485,000) as a Tranche 2 Debenture under the terms of the Secured Senior Convertible Debenture facility with Paladin. The terms of the conversion of the tranche 2 funds into ordinary shares of Immuron Limited are as follows: 1. At the election of Paladin at any time prior to the due date, at a conversion price of $AUS0.0473 per share; or 2. There are also two automatic conversion events that will give rise to a conversion of the tranche 2 funds into equity. Those automatic conversion events being: a) if the capitalised value of Immuron reaches a particular trigger point, conversion will occur at a conversion price of $AU0.0473 per share; or b) if the Company raises capital of at least $AUD1,500,000 (at a price of at least $0.0085 per Share) prior to 30 June 2013 in which case the tranche 2 funds will convert to Shares at the lower of$AUS0.0473per share and theprice at which the

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Un nu ba	above capital raise completes. der the above Tranche 2 conversion terms, the maximum mber of fully paid ordinary shares that may be issue to Paladin, sed on current exchange rates , are as follows: 1. If converted in accordance with option 1 above. 2. If converted in accordance with 2 (a) above. 3. If converted in accordance with 2 (b) above (assuming the lowest committed price).	10,253,700 10,253,700 57,058,824	$0.0473 $0.0473 $0.0085

Under the above Tranche 2 conversion terms, the maximum number of fully paid ordinary shares that may be issue to Paladin, based on current exchange rates , are as follows:

Note: The exchange rate of AU$0.0473 referred to above is the exchange rate at the time that the contract was entered into which has been deemed appropriate by the Company’s Auditors for fair valuing the relevant debenture.

5.3 Potential Effect on Control of the Company

As at the date of the Prospectus, the relevant interests and voting power of the substantial shareholders of the Company (based on the last substantial shareholding notice or change of directors interest notice lodged with the Company) are as follows:

Shareholder	Number of shares	Voting power
Hadasit Medical Research Services & Development Ltd (Hadasit)	59,164,094	14.28%
Capital Concerns Pty Limited (Logue Family Super Fund Account)	24,627,723	5.95%

If the Offers are fully subscribed under the terms of the Prospectus, the Shares issued under the Offers are not expected to have a material effect on the control of the Company, given the pro rata nature of the Offers. Shareholders should note that Hadasit Medical Research Services & Development Ltd is resident in Israel and will not be entitled to participate in the Offers because of that residency. As outlined in Section 2.5, it is possible that depending on the balance remaining after applications are received under both the Rights Offer and the Top up Offer, that the allocations by the Underwriter could result in the introduction of new major Shareholder/s (with a relevant interest in excess of the 20% limit otherwise applying under Section 606 of the Corporations Act.

5.4 Change of control

Shareholders should note that where there is a significant balance remaining after allocations by the Company under the Rights Issue Offer and the Top Up Offer, the Underwriter and the Underwriter's sub underwriters will subject to the terms of the Underwriting Agreement, be required to apply for the Shares which is the subject of that balance in Shortfall.

Should this situation arise, it could have a material impact on the control of the Company and therefore the Company provides the information in this section.

The Underwriter currently is not a Shareholder in the Company and is not a related party to the Company for the purposes of the Corporations Act. To the extent that the Underwriter is obliged to subscribe for shares in accordance with the Underwriting agreement, its voting power in the Company will increase. Accordingly, the Underwriters current interest and changes thereto given various Shortfall scenarios are set out in the table below.

In addition the Underwriter has provided a priority sub‐underwriting to a cornerstone sub‐underwriter (namely Grandlodge Pty Ltd ( Grandlodge )) of $600,000. Grandlodge currently is not a Shareholder in

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the Company and is not a related party to the Company for the purposes of the Corporations Act. To the extent that Grandlodge is obliged to subscribe for shares in accordance with its sub underwriting commitment with the Underwriter, its voting power in the Company will increase. Accordingly, the current interest and potential changes thereto for Grandlodge given various Shortfall scenarios are also set out in the table below.

Event	Shortfall	Shares held by underwriter	Voting power of underwriter	Shares held by [Grand Lodge]	Voting power of [Grand Lodge]
Date of prospectus	Nil	Nil	Nil	Nil	Nil
Offer fully subscribed	Nil	Nil	Nil	Nil	Nil
Offer 75% subscribed	25%	155,317,522	15.00%	155,317,522	15%
Offer 50% subscribed	50%	310,635,043	30.00%	200,000,000	19.32%
Offer 25% subscribed	75%	465,952,565	45.00%	200,000,000	19.32%
Nil subscriptions	100%	621,270,086	60.00%	200,000,000	19.32%

The number of shares that may be held by the Underwriter / Grandlodge (as sub underwriter) given the above scenarios and the resultant voting power, show the potential effect of the placement of the balance of the Shortfall with the Underwriter and Grandlodge.

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6. Risk factors

6.1 Introduction

An investment in the Company is not risk free and prospective investors should consider the risk factors described below, together with information contained elsewhere in this Prospectus, before deciding whether to apply for New Shares.

Each of the risks as set out in this section could, if they eventuate, have a material adverse impact on the Company’s operating performance, and the market price of the New Shares and listed options.

Before deciding to invest in the Company, potential investors should:

• Read the entire Prospectus Document;

• Consider the risk factors that could affect the financial performance of the Company;

• Review these factors in light of their personal circumstances; and

• Seek professional advice from their accountant, stockbroker, lawyer or other professional adviser before deciding whether to invest.

The following is not intended to be an exhaustive list of the risk factors to which the Company is exposed.

6.2 General risks

(a) Funding risks

The Company has incurred substantial losses to date, its 31 December 2012 accounts were qualified on a "going concern" basis and there is no expectation that this would change in the immediate future (subject to capital raising efforts). Accordingly the Company requires continual funding in the future to meet its expenditure in excess of revenues. Investors should note the Company has not specified a minimum amount to be raised in respect of the Offers and the Company will require further funding in the short term. There is no guarantee the Company will be able to secure sufficient funding to implement its development and commercialisation intentions as outlined in this prospectus.

(b) Key Management

The Directors are primarily responsible for overseeing the operations and the strategic management of the Company. However the success of the Company will depend on the continuing commitment of its key employees and consultants. The Company has set in place employment contracts with key employees and consultants which include the provision of equity incentives to assist in retaining the key employees and consultants.

(c) Share Market Conditions

As the New Shares will be quoted on the ASX their price may rise or fall and they may trade at prices below or above the subscription price under the Offer. There can also be no assurance that an active market is available for the New Shares. Factors affecting the price at which the New Shares are traded on the ASX include domestic and international economic conditions. In addition, the prices of many listed entities’ securities are affected by factors that might be unrelated to the operating performance of the relevant company. Such fluctuations might adversely affect the price of the New Shares.

(d) General Economic Climate

Factors such as inflation, currency fluctuation, interest rates and supply and demand have an impact on operating costs, commodity prices and stock market prices. The Company's future revenues, the economic viability of its projects, the market price for its listed securities, and its ability to raise future capital may be affected by these factors, which are beyond the Company's control.

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(e) Government Policy

Changes in government, monetary policy, taxation and laws (including those regulating the biopharmaceutical industry and patent rights) can have a significant influence on the outlook for research and product development, companies and the return to investors. A change to government policies and legislation could have a material adverse effect on the Company or its projects.

(f) Taxation

A change to current taxation legislation and regulations in Australia or overseas may affect the Company and as a consequence, it’s Shareholders. The personal tax liabilities are the responsibility of each individual investor and the Company is not responsible either for taxation or penalties incurred by investors.

(g) Speculative Nature of Investment

The New Shares issued pursuant to this Prospectus should be considered speculative because of the nature of the Company's business. There are numerous risk factors involved. Some of these risks can be mitigated by the use of safeguards and appropriate systems and controls, but some are outside the control of the Company and cannot be mitigated. Accordingly, an investment in the Company carries no guarantee with respect to the payment of dividends, return of capital or price at which Shares will trade.

6.3 Operational Risks

(a) Partnering and Licensing:

The Company enters into license and distribution agreements with third parties to distribute Travelan and is pursuing further such agreements. There is no guarantee that the existing, or future, distribution arrangements will lead to the successful commercialisation of Travelan and that the Company will enter into additional distribution arrangements.

(b) Regulatory Approval:

Even once a Travelan distribution agreement is consummated, regulatory approval to market and sell Travelan in the licensed country needs to be obtained. Such approval can be subject to complex government health regulations, which may change from time to time. Delays may be experienced in obtaining such approvals from the regulatory authorities and this may adversely affect the Company’s revenue projections.

(c) Production Risks:

The Company depends on its external contractors to produce its product from dairy cows. There are a number of risks associated with this production, which are typical of agricultural production generally. If there were to occur a problem affecting dairy production in the herds from which the Company harvests its raw material, the Company may not be able to fulfil its obligations with respect to the supply of Travelan to its distribution partners and this could have a material adverse effect on the Company’s operating results. The Company supply of product needed to progress its development projects may also be restricted.

The Company currently is reliant upon the services provided by third parties and particular consultants which in itself involve several risks if those services were not available as and when required by the Company.

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(d) Capital Risk

Due to the cyclical nature of the Company’s dairy‐derived products, there is a need to order and pay for raw material in advance of generating revenue from products derived from that raw material. If the company does not have sufficient capital to purchase the required quantity of raw material, it may not have sufficient product to sell to its distributors and this could have a material adverse effect on its operating results.

(e) Additional Capital Requirements

The research and development activities of biotechnology companies require a high level of funding over a long period of time. Even though the Company seeks to develop its products through funded partnerships, additional funding will be required to complete the development and commercialisation of the Company's products. There is no assurance that additional funding will be available to the Company in the future or be secured on acceptable terms or at acceptable rates. If adequate funds are not available, the Company's business operations could be negatively affected and the advance of the Company’s candidates into clinical trials may be hampered.

(f) Increased Competition

Competition may arise from a number of sources and may include companies with greater capital resources and breadth of expertise. Whilst the Company’s Directors believe that the Company’s stage of product development, intellectual property position, depth of services and industry knowledge effectively reduces the impact of future competition, no assurances can be given that such competition will not adversely affect the performance of the Company.

(g) Technology and Intellectual Property Protection

The Company relies on patent protection to secure and maintaining exclusive rights to its products. If the Company does not successfully maintain its patent protection, this may have an adverse effect on the Company’s ability to commercialize its products. In addition, the company relies on the confidentiality of its trade secrets relating to production of its products from colostrum, including the process of vaccination and harvest. If other companies were to obtain this information, this could have a material adverse effect on the Company’s competitive advantage

(h) Strategic Partners

The Company’s success will in part depend on its relationship with Hadasit and future strategic partners and the extent to which development and marketing of the Company’s products is pursued. Future Company revenues could therefore be affected by the research and development decisions of the Company’s current (and any future) strategic partners.

(i) Dependence on Key Personnel:

The Company is dependent on the principal members of its management team, the loss of whose services could materially and adversely affect the Company and might impede the achievements of its Commercialization objectives.

(j) Additional Requirements for Capital

The Company’s capital requirements depend on numerous factors. Depending on the Company’s ability to generate income from its operations, the Company will require further financing in addition to amounts raised under this capital raising. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations and or scale back its research programs.

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7. Additional information

7.1 Continuous Disclosure and Documents Available for Inspection

The Company is listed on the ASX and its Shares and options are quoted on the ASX under the following ASX codes:

• Ordinary Fully Paid Shares (IMC).

• Options expiring 15 December 2013 (IMCO).

• Options expiring 30 April 2015 (IMCOA).

The Company is a "disclosing entity" for the purposes of the Corporations 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 the ASIC (including the Constitution) in relation to the Company may be obtained from, or inspected at, an office of the ASIC.

Upon request, the Company will provide you with a copy of all documents used to notify the ASX of information relating to the Company (under the provisions of the Listing Rules) from 28 September 2012, being the date of lodgement of the Company's Annual Financial Report for the year ending 30 June 2012, to the date of lodgement of this Prospectus (including the half‐year financial report lodged with ASX for the period ending 31 December 2012), free of charge.

A list of such documents is as follows:

	Date	ASX Announcement Header
	26 March 2013	Final Directors Interest Notice – J Baini
	4 March 2013	Further Positive Results on Clostridium Difficile
	28 Feb 2013	Half Year Results and Accounts 31 December 2012
	22 Feb 2013	Resignation of Joe Baini as Director and CEO.
	18 Feb 2013	Drawdown on Funding Facility with Paladin Labs Inc.
	6 Feb 2013	Appendix 3B
	17 Dec 2012	CLOSTRIDIUM DIFFICILE Project Update
	26 Nov 2012	AGM Meeting Results
	26 Nov 2012	Chairman's Address and CEO Presentation to AGM
	15 Nov 2012	Appendix 3B Issue of ESOP unlisted Options
	13 Nov 2012	Patersons Research Report
	25 Oct 2012	Chairman's letter and Notice of Annual General Meeting
	18 Oct 2012	Immuron Company Update
	15 Oct 2012	Initial Director's Interest Notice
	15 Oct 2012	Change of Registered Office and Business Address
	11 Oct 2012	Director Appointment/Resignation
	8 Oct 2012	Final Director's Interest Notice ‐ Colin Chapman

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8 Oct 2012 Board Changes ‐ Roger Aston appointed Chairman

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7.2 Information Excluded from Continuous Disclosure Notices

As at the date of this Prospectus, there is no information that has not been disclosed under the continuous disclosure requirements of the Listing Rules and which the Board considers that you or your professional advisers would reasonably require in order to assess the Company's assets and liabilities, financial position and prospects and the rights and liabilities attaching to the New Shares.

7.3 Interests of Directors

Other than as announced to ASX, set out below or elsewhere in this Prospectus, no Director, or any entity in which a Director is a partner or director, has or has had in the 2 years before the date of this Prospectus, any interest in:

• (a) the formation or promotion of the Company;

• (b) property acquired or proposed to be acquired by the Company in connection with its formation or promotion of the Offers; or

• (c) the Offers,

and no amounts have been paid or agreed to be paid (in cash, Shares or otherwise) and no other benefit has been given or agreed to be given to any Director or to any entity in which a Director is a partner or a Director, either to induce him to become, or qualify as, a Director or otherwise for services rendered by him or by the entity in connection with the formation or promotion of the Company or the Offers.

7.4 Interests of Directors in Existing Securities

The interest of the Directors (including via controlled entities) in the securities of the Company at the date of this Prospectus is as follows:

Director	Shares	Options
Dr Roger Aston	200,000	50,000
Dr Elane Zelcer	579,910	149,418
Dr Stewart Washer	600,000	150,000
Mr Daniel Pollock	500,000	100,000

(a) Interests of Directors – Assuming Full Participation in the Rights Offer

The Directors will participate in the Rights Offer (but not the Top Up Offer) without the need to obtain shareholder approval. If each of the Directors participate to the maximum extent permissible under the Rights Offer, but do not take up any New Shares under the Top Up Offer, their respective direct and indirect interests will increase and upon the issue of the New Shares they will have the following cumulative direct and indirect interests.

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Existing Shares	New Share Entitlement Under Rights Issue	Total Shares if Full Entitlement Take Up
200,000	300,000	500,000
579,910	869,865	1,449,775
600,000	900,000	1,500,000
500,000	750,000	1,250,000

The Directors have also indicated that they have agreed to participate and support the Offers as Sub Underwriters in accordance with sub underwriting arrangements entered with the Underwriter. No underwriting commissions will be paid to the Directors participating in the sub underwriting however they will be entitled to participate in the Underwriting Options as part of their underwriting arrangements. The number of Shares those Directors will sub underwrite and the sub Underwriting Options each will receive in return for that sub underwriting are as follows:

Director	$ Sub‐ Underwriting commitment by each Director	Maximum Sub‐ Underwritten number of Shortfall Shares	Number of Underwriting Options to be granted	% of Directors' participation in sub underwriting (as percentage of total underwriting)
Dr Roger Aston (Chairman)	50,000	16,666,667	4,166,667	2.68%
Dr Elane Zelcer	5,000	1,666,667	416,667	0.29%
Mr Daniel Pollock	20,000	6,666,667	1,666,337	1.07%

(b) Remuneration of Directors

The Directors are currently entitled to the following remuneration or Directors' fees:

Director	Remuneration
Dr Roger Aston (Chairman)	$62,500 per annum plus 9% superannuation
Dr Elane Zelcer	$45,000 (including $5,000 as Chairman of the Audit & Risk Committee) per annum plus 9% superannuation
Dr Stewart Washer	$40,000 per annum plus 9% superannuation
Mr Daniel Pollock	$45,000 (including $5,000 as a member of the Audit & Risk Committee) per annum plus 9% superannuation

7.5 Market Prices of Shares

Since the Annual General Meeting of shareholders held on 26 November 2012, the respective share prices of the Company’s shares and options are as follows:

Shares ASX code IMC

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• Highest $0.017 per share on 11 January 2013

• Lowest $0.006 per share on 15 March 2013

Options ASX code IMCOA

• Highest $0.004 per option 21 January 2013

• Lowest $0.001 per option 18 March 2013

In respect of the listed options (ASX code IMCO), there has been no sales since the 26 November 2012 Annual General Meeting to the date of this Prospectus.

As at the close of the ASX market on the trading date immediately preceding the lodgement of this Prospectus, the last traded share price for the Company's shares was $0.008 on 22 March 2013.

7.6 Restricted Securities

None of the Company's issued securities are 'restricted securities' (as defined in the Listing Rules).

7.7 Broker Handling Fees

No handling fees are payable in connection with the Offers under this Prospectus.

7.8 Interests of Named persons

Except as disclosed in this Prospectus, no promoter or other person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of the Prospectus, holds, or during the last two years has held, any interest in:

• (a) The formation or promotion of the Company;

• (b) property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Offers; or

• (c) the Offers,

and no amounts of any kind (whether in cash, Shares, options or otherwise) have been paid or agreed to be paid to a promoter or any other person named in this prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of the Prospectus for services rendered by that person in connection with the formation or promotion of the Company or the Offers.

• Patersons Securities Limited was not involved in the preparation of any part of this Prospectus and did not authorise or cause the issue of this Prospectus. Patersons Securities Limited makes no express or implied representation or warranty in relation to Immuron Limited, the Prospectus or the offer and does not make any statement in this Prospectus, nor is any statement in it based on any statement made by Patersons Securities Limited. To the maximum extent permitted by law, Patersons Securities Limited expressly disclaims and takes no responsibility for any material in, or omission from, this Prospectus other than the reference to its name. Patersons received fees totalling $132,000 in the 2012 financial year in relation to Corporate Advisory and Lead Management services for the Company’s Share Placement that raised $1,000,000.

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7.9 Taxation

It is the responsibility of all persons to satisfy themselves of the particular taxation treatment that applies to them by consulting their own professional tax advisers before dealing in the New Shares or investing in Shares. Taxation consequences will depend on particular circumstances. Neither the Company nor any of its officers accept any liability or responsibility in respect of the taxation consequences of the matters referred to above or any other taxation consequences connected with an investment in New Shares in the Company or dealing with an entitlement in these Offers.

7.10 Legal Proceedings

To the Director's knowledge, there is no litigation, arbitration or proceedings pending against or involving the Company as at the date of this Prospectus.

7.11 Material Contracts

Pursuant to an Underwriting Agreement dated 27 March 2013 between the Company and Patersons Securities Limited, the Underwriter has agreed to underwrite the Offer pursuant to this Prospectus to an amount of $1,863,810.

Under the terms of the Underwriting Agreement the Company will pay the Underwriter, for its role as Lead Manager and Underwriter, an underwriting fee equal to 6% on the underwritten amount of $1,863,810, together with a Lead Manager fee of $60,000. If no shares are taken up by Shareholders under the terms of the Offer, and the Underwriter is required to take up the shares under the terms of the Underwriting Agreement, the maximum fees receivable by the Underwriter amount to $172,000 (plus GST, if any). This amount comprises $60,000 Lead Manager fee and underwriting fees of $112,000. In addition, the Company must pay, indemnify and keep indemnified, the Underwriter for all costs incurred by the Underwriter in connection with the Offer, including legal fees and disbursements and the reasonable costs of travel and accommodation, marketing, communications and associated costs. The Company has given warranties and covenants to the Underwriter, and indemnified the Underwriter against any Losses incurred by the Underwriter (as defined in the Agreement) which are usual in an agreement of this nature.

The Company has agreed with the Underwriter that until 27 September 2013 it will not (without the Underwriter's consent) undertake certain actions, including reducing or otherwise altering its capital structure; disposing of or charging the whole or a substantial part of its business or issuing or agreeing to issue any securities (other than pursuant to the previously announced Paladin facility).

The Underwriting Agreement provides that the Underwriter may terminate the Underwriting Agreement and its obligations thereunder at any time without cost or liability to the Underwriter upon the occurrence of any one or more of the termination events ( Termination Event) including:

The Underwriter may without cost or liability to themselves and without prejudice to any rights for damages arising out of any breach by the Company of its representations, warranties or obligations under this Agreement, by notice in writing to the Company, upon or at any time prior to Completion, terminate its obligations under this Agreement if:

(a) ( Indices fall ): the All Ordinaries Index (IRESS XAO.ASX) or the S&P/ASX 200 (IRESS:XJO.ASX) or the S&P/ASX Small industrials (IRESS:XSI.ASX) as published by ASX is at any time after the date of this Agreement, 7.5% or more below its respective level as at the close of business on the Business Day prior to the date of this Agreement; or

(b) ( Prospectus ): the Company does not lodge the Prospectus on the Lodgement Date or the Prospectus or the Offer is withdrawn by the Company; or

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(c) ( Copies of Prospectus ): the Company fails to provide copies of the Prospectus as required in the Underwriting Agreement and such failure is not remedied within 2 days; or

(d) ( No Official Quotation ): Official Quotation has not been granted for all the Rights Shares by the Shortfall Notice Deadline Date or, having been granted, is subsequently withdrawn, withheld or qualified; or

(e) ( Supplementary prospectus ):

(i) the Underwriter, having elected not to exercise its right to terminate its obligations under the Underwriting Agreement as a result of an occurrence of adverse change event (as described in section (q)(vi) below ), forms the view on reasonable grounds that a supplementary or replacement prospectus should be lodged with ASIC for any of the reasons referred to in section 719 of the Corporations Act and the Company fails to lodge a supplementary or replacement prospectus in such form and content and within such time as the Underwriter may reasonably require; or

(ii) the Company lodges a supplementary or replacement prospectus without the prior written agreement of the Underwriter; or

(f) ( Non‐compliance with disclosure requirements ): it transpires that the Prospectus does not contain all the information required by section 713 of the Corporations Act; or

(g) ( Misleading Prospectus ): it transpires that there is a statement in the Prospectus that is misleading or deceptive or likely to mislead or deceive, or that there is an omission from the Prospectus (having regard to the provisions of section 713 of the Corporations Act) or if any statement in the Prospectus becomes or misleading or deceptive or likely to mislead or deceive or if the issue of the Prospectus is or becomes misleading or deceptive or likely to mislead or deceive;

(h) ( Restriction on allotment ): the Company is prevented from allotting the Rights Shares within the time required by this Agreement, the Corporations Act, the Listing Rules, any statute, regulation or order of a court of competent jurisdiction by ASIC, ASX or any court of competent jurisdiction or any governmental or semi‐governmental agency or authority;

(i) ( Withdrawal of consent to Prospectus ): any person (other than the Underwriter) who has previously consented to the inclusion of its, his or her name in the Prospectus or to be named in the Prospectus, withdraws that consent;

(j) ( ASIC application ): an application is made by ASIC for an order under section 1324B or any other provision of the Corporations Act in relation to the Prospectus, the Shortfall Notice Deadline Date has arrived, and that application has not been dismissed or withdrawn;

(k) ( ASIC hearing ): ASIC gives notice of its intention to hold a hearing under section 739 or any other provision of the Corporations Act in relation to the Prospectus to determine if it should make a stop order in relation to the Prospectus or the ASIC makes an interim or final stop order in relation to the Prospectus under section 739 or any other provision of the Corporations Act;

(l) ( Takeovers Panel ): the Takeovers Panel makes a declaration that circumstances in relation to the affairs of the Company are unacceptable circumstances under Pt 6.10 of the Corporations Act, or an application for such a declaration is made to the Takeovers Panel;

(m) ( Hostilities ): there is an outbreak of hostilities or a material escalation of hostilities (whether or not war has been declared) after the date of this agreement involving one or more of Australia, New Zealand, Indonesia, Japan, Russia, the United Kingdom, the United States of

35

America, or the Peoples Republic of China, Israel or any member of the European Union, or a terrorist act is perpetrated on any of those countries or any diplomatic, military, commercial or political establishment of any of those countries anywhere in the world;

(n) ( Authorisation ) any authorisation which is material to anything referred to in the Prospectus is repealed, revoked or terminated or expires, or is modified or amended in a manner unacceptable to the Underwriter;

(o) ( Indictable offence ): a director or senior manager of a the Company or a subsidiary is charged with an indictable offence;

(p) ( Paladin ): Paladin converts some or all of the Paladin Facility into Shares during the course of the Underwriting Agreement, or if Paladin sells Shares that it may already own; or

(q) ( Termination Events ): any of the following events occurs:

(i) ( Default ): default or breach by the Company under this Agreement of any terms, condition, covenant or undertaking;

(ii) ( Incorrect or untrue representation ): any representation, warranty or undertaking given by the Company in this Agreement is or becomes untrue or incorrect;

(iii) ( Contravention of constitution or Act ): a contravention by the Company or a subsidiary of any provision of its constitution, the Corporations Act, the Listing Rules or any other applicable legislation or any policy or requirement of ASIC or ASX;

(iv) ( Adverse change ): an event occurs which gives rise to a Material Adverse Effect or any adverse change or any development including a prospective adverse change after the date of this Agreement in the assets, liabilities, financial position, trading results, profits, forecasts, losses, prospects, business or operations of any Relevant Company including, without limitation, if any forecast in the Prospectus becomes incapable of being met or in the Underwriter's reasonable opinion, unlikely to be met in the projected time;

(v) ( Error in Due Diligence Results ): it transpires that any of the Prospectus due diligence results or any part of the Prospectus verification material was false, misleading or deceptive or that there was an omission from them;

(vi) ( Significant change ): a "new circumstance" as referred to in section 719(1) of the Corporations Act arises that is materially adverse from the point of view of an investor;

(vii) ( Public statements ): without the prior approval of the Underwriter a public statement is made by the Company in relation to the Offer, the Issue or the Prospectus;

(viii) ( Misleading information ): any information supplied at any time by the Company or any person on its behalf to the Underwriter in respect of any aspect of the Offer or the Issue or the affairs of the Company or a subsidiary is or becomes misleading or deceptive or likely to mislead or deceive;

(ix) ( Official Quotation qualified ): the Official Quotation is qualified or conditional other than as set out in the definition of "Official Quotation";

(x) ( Change in Act or policy ): there is introduced, or there is a public announcement of a proposal to introduce, into the Parliament of Australia or any of its States or Territories any Act or prospective Act or budget or the Reserve Bank of Australia or any Commonwealth or State authority adopts or announces a proposal to adopt any new, or any major change in, existing, monetary, taxation, exchange or fiscal policy;

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(xi) ( Prescribed Occurrence ): a Prescribed Occurrence (as described in section 652C of the Corporations Act) occurs;

(xii) ( Suspension of debt payments ): the Company suspends payment of its debts generally;

(xiii) ( Event of Insolvency ): an Event of Insolvency occurs in respect of the Company or a subsidiary;

(xiv) ( Judgment against a Relevant Company ): a judgment in an amount exceeding $25,000 is obtained against the Company or a subsidiary and is not set aside or satisfied within 7 days;

(xv) ( Litigation ): litigation, arbitration, administrative or industrial proceedings are after the date of this Agreement commenced or threatened against the Company or a subsidiary, other than any claims foreshadowed in the Prospectus;

(xvi) ( Board and senior management composition ): there is a change in the composition of the Board or a change in the senior management of the Company before Completion without the prior written consent of the Underwriter;

(xvii) ( Change in shareholdings ): there is a material change in the major or controlling shareholdings of the Company or a subsidiary or a takeover offer or scheme of arrangement pursuant to Chapter 5 or 6 of the Corporations Act is publicly announced in relation to the Company or a subsidiary;

(xviii) ( Timetable) : there is a delay in any specified date in the Timetable which is greater than 3 Business Days;

(xix) (Force Majeure) : a Force Majeure affecting the Company's business or any obligation under the Agreement lasting in excess of 7 days occurs;

(xx) ( Certain resolutions passed ): the Company or a subsidiary passes or takes any steps to pass a resolution under section 254N, section 257A or section 260B of the Corporations Act or a resolution to amend its constitution without the prior written consent of the Underwriter;

(xxi) ( Capital Structure ): the Company or a subsidiary alters its capital structure in any manner not contemplated by the Prospectus;

(xxii) ( Investigation ): any person is appointed under any legislation in respect of companies to investigate the affairs of the Company or a subsidiary; or

(xxiii) ( Market Conditions ): a suspension or material limitation in trading generally on ASX occurs or any material adverse change or disruption occurs in the existing financial markets, political or economic conditions of Australia, Japan, the United Kingdom, the United States of America or other international financial markets.

(xxiv) ( Material Breach ): if the Underwriter fails to rectify any material breach of the Mandate having been given 10 business days notice in writing by the Company of such breach having occurred.

Provided that the Underwriter may not exercise its rights under clause 7.11(q) unless, in the reasonable opinion of the Underwriter reached in good faith, the occurrence of a Termination Event has or is likely to have, or two or more Termination Events together have or are likely to have (A) a Material Adverse Effect (as defined in the Underwriting

37

Agreement), or (B) could give rise to a liability of the Underwriter under the Corporations Act or otherwise.

The Company will immediately give notice to the Underwriter of the occurrence of any event which will, or which with the giving of notice or lapse of time will, give the Underwriter a right to terminate its obligations under this Agreement.

The Company may without cost or liability to itself and without prejudice to any rights for damages arising out of any breach by the Underwriter of its representations, warranties or obligations under the Underwriting Agreement, by notice in writing given upon or at any time prior to Completion terminate its obligations under the Underwriting Agreement if any of the following events occurs:

• (a) ( Default ): default by the Underwriter under the Underwriting Agreement; or

• (b) ( Incorrect or untrue representation ): any representation, warranty or undertaking given by the Underwriter in the Underwriting Agreement is or becomes untrue or incorrect.

7.12 Consents to be named

The following consents have been given in accordance with the Corporations Act and have not been withdrawn as at the date this Prospectus was lodged with ASIC:

Patersons Securities Limited has given, and at the time of lodgement of this Prospectus, has not withdrawn its consent to be named as Lead Manager and Underwriter to the offer of securities under this Prospectus, in the form and context in which it is named.

Computershare Investor Services Pty Limited has given its written consent to being named as the Company’s Share Registry in the form and context in which it appears in this Prospectus and has not withdrawn its consent prior to lodgement of this Prospectus with ASIC

7.13 Electronic Prospectus

If you have received this Prospectus as an electronic Prospectus, please ensure that you have received the entire Prospectus. If you have not, please phone the Company and the Company will send you, for free, either a hard copy or a further electronic copy of the Prospectus, or both.

7.14 Further Information

If you have any questions regarding the Offers, or anything referred to in this Prospectus, please contact your financial advisor, the Company’s Secretary, or the Company's Share Registry, on:

Company Secretary: Graeme Stevens Ph.: +61 (0)3 8648 4530

Computershare Investor Services Pty Limited Telephone: 1 300 850 505 Telephone: +61 (0)3 9415 5000 (international)

The Company is unable to advise you on the suitability or otherwise of an investment in the Company, and for such advice you must contact your own independent professional adviser.

7.15 Authority of Directors

The Directors have made all reasonable enquiries in the preparation of this Prospectus and on that basis have reasonable grounds to believe that any statements made by the Directors in this Prospectus are not misleading or deceptive and that in respect to any other statements made in this Prospectus by persons other than Directors, the Directors have made reasonable enquiries and on that basis have

38

reasonable grounds to believe that persons making the statement or statements were competent to make such statements, those persons have given their consent to the statements being included in this Prospectus in the form and context in which they are included and have not withdrawn that consent before lodgement of this Prospectus with the ASIC, or to the Directors knowledge, before any issue of Shares pursuant to this Prospectus.

This Prospectus is prepared on the basis that certain matters may reasonably be expected to be known to likely investors or their professional advisors.

Each of the Directors of the Company has consented to the lodgement of this Prospectus in accordance with section 720 of the Corporations Act and has not withdrawn that consent.

For and on behalf of the Board;

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Dr Elane Zelcer

Non‐Executive Director Immuron Limited Dated: 27 March 2013

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8. Definitions

$ or A$ or AUD means references to dollar amounts in Australian currency;

AEST means Australian Eastern Standard Time;

ASIC means the Australian Securities and Investments Commission;

Applicant means the person completing an Application Form (and for clarity includes a transferee of a Right);

Application Form means one of the Entitlement and Acceptance Form;

ASX means the Australian Securities Exchange Limited (ASX) ACN 008 624 691;

ASX Settlement means ASX Settlement Pty Ltd ACN 008 504 532;

ASX Settlement Operating Rules means the operates rules of ASX Settlement from time to time;

Business Day means a day that is not a Saturday, Sunday or a public holiday in Melbourne, Victoria;

CHESS has the meaning given to that term in the ASX Settlement Operating Rules;

Closing Date means the last date by which Applicants must submit an Application Form to the Company to seek to participate in their respective Offer, namely 29 April 2013;

Company means Immuron Limited ACN 063 114 045;

Constitution means the constitution of the Company;

Corporations Act means the Corporations Act 2001 (Cth);

Directors or Board means the board of directors of the Company;

Eligible Shareholder means the person whose name is registered on the Company's Share Register as at 5:00pm on the Record Date;

Entitlement means entitlement of an Eligible Shareholder eligible to participate in the Rights Offer, as described in section 3.1(e);

Entitlement and Acceptance Form means the Application Form in the form of that accompanying this Prospectus;

Excluded Shareholders means Shareholders with a registered address outside of Australia and New Zealand

General Meeting means a general meeting of Shareholders convened for purposes including the approval of the issue of the Underwriting Options to the Underwriter pursuant to the terms of the Underwriting Agreement

Listing Rules means the listing rules of ASX;

New Share means a Share issued pursuant the Rights Offer or Top Up Offer under this Prospectus;

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Offer means collectively the Rights Offer and Top Up Offer,

Official List means the official list of ASX;

Official Quotation means official quotation on the Official List;

Prospectus means this prospectus as modified or varied by any supplementary prospectus made by the Company and lodged with ASIC from time to time;

Record Date means 5:00 pm AEST on 8 April 2013;

Rights Offer means the Renounceable Right issued to an Eligible Shareholder to subscribe for 3 New Shares for every 2 Shares held as at the Record Date;

Section means a section of this Prospectus;

Share means a fully paid ordinary share in the issued capital of the Company, Immuron Limited;

Share Registry means Computershare Investor Services Pty Limited ABN 48 078 279 277;

Shareholder means a person who holds one or more Shares;

Shortfall means the occurrence where less than the total number of Shares that are offered for subscription under the Rights Offer are subscribed for by Applicants;

Shortfall Shares means the number of New Shares comprising the Shortfall;

Top Up Offer has the meaning as provided in Section 3.1;

Underwriter means Patersons securities Limited (ABN 69 008 896 311; AFSL No 239052)

Underwriting Agreement means the underwriting agreement between the Company and the Underwriter dated 26 March 2013.

Underwriting Options means unlisted options to purchase Shares as described in clause 2.4

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Annexure A ‐ Rights Attaching to New Shares

The New Shares will rank equally in all respects with existing Shares.

Full details of the rights attaching to Shares are set out in the Company's Constitution, a copy of which can be inspected, free of charge, at the Company's registered office during normal business hours. In applying for New Shares, the Applicant agrees that it and the Shares to issue upon that exercise are bound by the terms of the Constitution.

The following is a broad summary of the rights, privileges and restrictions attaching to all Shares. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders.

(a) General Meetings and Notice

Each Shareholder is entitled to receive notice of all general meetings of the Company and to receive all notices, accounts and other documents required to be sent to Shareholders under the Constitution, the Corporations Act or the Listing Rules. Shareholders are entitled to be present in person, or by proxy, attorney or representative to attend and vote at general meetings of the Company.

Shareholders may requisition meetings in accordance with section 249D of the Corporations Act.

(b) Voting Rights

Subject to any rights or restrictions for the time being attached to any class or classes of Shares, at general meetings of Shareholders or classes of Shareholders:

• (i) each Shareholder entitled to vote may vote in person or by proxy, attorney or representative;

• (ii) on a show of hands, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder entitled to vote has one vote; and

• (iii) on a poll, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder entitled to vote shall, in respect of each fully paid Share held by him or her, or in respect of which he or she is appointed a proxy, attorney or representative, have one vote for every fully paid Share, but in respect of partly paid Shares shall have a fraction of a vote equal to the proportion that the amount paid bears to the issue price of the Shares.

(c) Dividend Rights

While there is no guarantee of any dividends or distributions by the Company, the Directors may from time to time declare dividends in compliance with the Corporations Act.

Subject to the rights of persons entitled to Shares with special rights as to dividends (at present there are none), all dividends are paid in the proportion that the amounts paid on those Shares bear to the issue price of the Shares.

(d) Winding Up

If the Company is wound up, the liquidator may, with the authority of a special resolution, divide among the Shareholders in kind the whole or any part of the property of the Company, and may for that purpose set such value as he or she considers fair upon any property to be so divided, and may determine how the division is to be carried out as between the Shareholders or different classes of Shareholders.

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(e) Transfer of Shares

Shares in the Company are freely transferable, subject to formal requirements, and so long as the registration of the transfer does not result in a contravention of or failure to observe the provisions of a law of Australia and the transfer is not in breach of the Corporations Act or the Listing Rules.

(f) Variation of Rights

The Company may, subject to the Corporations Act and with the sanction of a special resolution passed at a meeting of Shareholders, or with the written consent of the majority of Shareholders in the affected class, vary or abrogate the rights attaching to Shares.

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