Immuron Ltd — Capital/Financing Update 2016

Oct 3, 2016

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New Issue Announcement, Application for Quotation of Additional Securities and Agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of Entity

Immuron Limited (ASX: IMC)

ABN

80 063 114 045

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to be issued a) & b) Ordinary Shares (IMC) c) & d) Unlisted Options

• 2 Number of[+] securities issued or to be issued (if known) or maximum number which may be issued

a) 2,708,916

b) 1,260,000 c) 2,708,916 d) 1,260,000

• 3 Principal terms of the[+] securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if[+] convertible securities, the conversion price and dates for conversion)

a) & b) Ordinary Fully Paid Shares (IMC) c) & d) Unlisted Options exercisable at $0.55 expiring 3 years from the date of issue.

• See chapter 19 for defined terms. 07/07/2016

Appendix 3B Page 1

4 Do the+securities rank equally in all respects from the +issue date with an existing+class of quoted +securities? If the additional+securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6hin relation to the +securities the subject of this Appendix 3B, andcomply with section 6i 6b The date the security holder resolution under rule 7.1A was passed 6c Number of+securities issued without security holder approval under rule 7.1 6d Number of+securities issued with security holder approval under rule 7.1A	a) & b) Yes (IMC) c) & d) Yes, upon exercise (IMC)
	a) $677,229 b) $315,000 c) & d) $Nil (free-attaching 1:1 options)
	a) & c) New Shares and 1:1 free-attaching New Options to be issued to Shortfall Participants of the Rights Issue as described in the Offer Booklet announced to the ASX on 31 May 2016. The issuance of New Options is subject to shareholder approval. b) & d) Private placement of New Shares and 1:1 free-attaching New Options to over-subscribers of the Rights Issue on the same terms as the Rights Issue Offer. The issuance of New Options is subject to shareholder approval.
	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms. 07/07/2016

Appendix 3B Page 2

6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of+securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the+issue date and both values. Include the source of the VWAP calculation. 6h If+securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. Number 8 Number and+class of all+securities quoted on ASX (includingthe +securities in section 2 if applicable) 103,389,540 2,000,000 9 Number and+class of all+securities not quoted on ASX (includingthe +securities in section 2 if applicable) Qty Amount 1,250,000 62,500 14,493 29,668 15,380 140,056 6,425,532 1,000,000 25,289,894 34,227,523 * The issue of options	6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of+securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the+issue date and both values. Include the source of the VWAP calculation. 6h If+securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. Number 8 Number and+class of all+securities quoted on ASX (includingthe +securities in section 2 if applicable) 103,389,540 2,000,000 9 Number and+class of all+securities not quoted on ASX (includingthe +securities in section 2 if applicable) Qty Amount 1,250,000 62,500 14,493 29,668 15,380 140,056 6,425,532 1,000,000 25,289,894 34,227,523 * The issue of options	6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of+securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the+issue date and both values. Include the source of the VWAP calculation. 6h If+securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. Number 8 Number and+class of all+securities quoted on ASX (includingthe +securities in section 2 if applicable) 103,389,540 2,000,000 9 Number and+class of all+securities not quoted on ASX (includingthe +securities in section 2 if applicable) Qty Amount 1,250,000 62,500 14,493 29,668 15,380 140,056 6,425,532 1,000,000 25,289,894 34,227,523 * The issue of options	6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of+securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the+issue date and both values. Include the source of the VWAP calculation. 6h If+securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. Number 8 Number and+class of all+securities quoted on ASX (includingthe +securities in section 2 if applicable) 103,389,540 2,000,000 9 Number and+class of all+securities not quoted on ASX (includingthe +securities in section 2 if applicable) Qty Amount 1,250,000 62,500 14,493 29,668 15,380 140,056 6,425,532 1,000,000 25,289,894 34,227,523 * The issue of options	N/A	N/A	N/A
				N/A
				N/A
				N/A
				Refer to the attached Appendix 1
				a) & b) 30 September 2016 c) & d) TBC
		Number		+Class
		103,389,540 2,000,000*		Fully Paid Ordinary Shares (IMC) Fully Paid Ordinary Shares (IMC) held in escrow as security for any repayment default of the Convertible Loan. These will either be purchased by the Investor or cancelled at end of agreement.
				+Class(Options over OrdinaryShares) Exercise Price Expiration Date ASX Code $0.456 4 Dec 2016 IMCAI $1.556 1 Nov 2017 IMCSO2 $1.944 30 Nov 2021 IMCRM1 $1.876 17 Jan 2022 IMCRM2 $1.892 28 Feb 2019 IMCAI $0.300 28 May 2019 IMCAI $0.500 27 Nov 2019 IMCAI $0.570 24 Feb 2019 IMCAI $0.550 “TBC” “New Class” Total is subject to shareholder approval.
		Qty		+Class(Options over OrdinaryShares)
		Amount		Exercise Price	Expiration Date	ASX Code
		1,250,000		$0.456	4 Dec 2016	IMCAI
		62,500		$1.556	1 Nov 2017	IMCSO2
		14,493		$1.944	30 Nov 2021	IMCRM1
		29,668		$1.876	17 Jan 2022	IMCRM2
		15,380		$1.892	28 Feb 2019	IMCAI
		140,056		$0.300	28 May 2019	IMCAI
		6,425,532		$0.500	27 Nov 2019	IMCAI
		1,000,000		$0.570	24 Feb 2019	IMCAI
		25,289,894*		$0.550	“TBC”	“New Class”
		34,227,523		Total
		* The issue of options

• See chapter 19 for defined terms. 07/07/2016

Appendix 3B Page 3

9 Number and+class of all+securities not quoted on ASX (includingthe +securities in section 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests) art 2 - Pro rata issue 11 Is security holder approval required? 12 Is the issue renounceable or non- renounceable? 13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or sub-registers) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has security holders who will not be sent new offer documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7.			+Class(Convertible Notes - IMCAA) $904,000 Face Value Convertible Note repayable over a remaining 12mth period settled at the Company’s discretion by way of either: - the issuance of new Shares at a 10% discount to VWAP average price of any 5 days over the 20 days immediately prior to a repayment date; or - a cash repayment of the due amount plus a 2.5% premium. As announced to the ASX on 18 July, the company has elected to repay all future Convertible Note repayments in cash.
		Qty	+Class(Convertible Notes - IMCAA)
		904,000	$904,000 Face Value Convertible Note repayable over a remaining 12mth period settled at the Company’s discretion by way of either: - the issuance of new Shares at a 10% discount to VWAP average price of any 5 days over the 20 days immediately prior to a repayment date; or - a cash repayment of the due amount plus a 2.5% premium. As announced to the ASX on 18 July, the company has elected to repay all future Convertible Note repayments in cash.
		Unchanged
			-
			-
			-
			-
			-
			-
			-
			-

Part 2 - Pro rata issue

• See chapter 19 for defined terms. 07/07/2016

Appendix 3B Page 4

19 Closing date for receipt of acceptances or renunciations 20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders 25 If the issue is contingent on security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and offer documents will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do security holders sell their entitlementsin fullthrough a broker? 31 How do security holders sellpartof their entitlements through a broker and accept for the balance? 32 How do security holders dispose of their entitlements (except by sale through a broker)? 33 +Issue date	-
	-
	-
	-
	-
	-
	-
	-
	-
	-
	-
	-
	-
	-
	-

• See chapter 19 for defined terms. 07/07/2016

Appendix 3B Page 5

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of[+] securities (tick one)

• (a) +Securities described in Part 1

• (b) All other[+] securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional +securities, and the number and percentage of additional +securities held by those holders 36 If the[+] securities are[+] equity securities, a distribution schedule of the additional[+] securities setting out the number of holders in the categories

1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over 37 A copy of any trust deed for the additional[+] securities

Entities that have ticked box 34(b)

38	Number of+securities for which+quotation is sought
39	+Class of+securities for which quotation is sought
40	Do the+securities rank equally in all respects from the
	+issue date with an existing +class of quoted
	+securities?
	If the additional+securities do not rank equally,
	please state:
	• the date from which they do
	• the extent to which they participate for the next
	dividend, (in the case of a trust, distribution) or
	interest payment
	• the extent to which they do not rank equally,
	other than in relation to the next dividend,
	distribution or interest payment

• See chapter 19 for defined terms. 07/07/2016

Appendix 3B Page 6

• 41 Reason for request for quotation now

Example: In the case of restricted securities, end of restriction period

(if issued upon conversion of another[+] security, clearly identify that other[+] security)

Number +Class

• 42 Number and[+] class of all[+] securities quoted on ASX (including the[+] securities in clause 38)

• See chapter 19 for defined terms. 07/07/2016

Appendix 3B Page 7

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the +securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted[+] quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the[+] securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before[+] quotation of the[+] securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

==> picture [94 x 36] intentionally omitted <==

Sign here: ______ Date: Tuesday, 4[th] October 2016 Company Secretary & CFO

Print name: Peter Vaughan

==> picture [38 x 23] intentionally omitted <==

Tuesday 4 October 2016

The CFO Solution

• See chapter 19 for defined terms. 07/07/2016

Appendix 3B Page 8

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

Insert number of fully paid[+] ordinary securities on issue 75,276,732 12 months before the[+] issue date or date of agreement to issue Add the following:

• Number of fully paid[+] ordinary securities issued in 24,029,894 (LR 7.2) that 12 month period under an exception in rule 7.2 1,607,041 (LR 7.3)

• Number of fully paid[+] ordinary securities issued in that 12 month period with shareholder approval

• Number of partly paid+ordinary securities that
became fully paid in that 12 month period
Note:
• Include only ordinary securities here – other classes of
equity securities cannot be added
• Include here (if applicable) the securities the subject of
the Appendix 3B to which this form is annexed
• It may be useful to set out issues of securities on
different dates as separate line items
Subtractthe number of fully paid+ordinary securities	Nil
cancelled during that 12 month period
“A”	100,913,667

Step 2: Calculate 15% of “A”

Step 2: Calculate 15% of “A”	Step 2: Calculate 15% of “A”
“B”	0.15 [Note: this value cannot be changed]
Multiply“A” by 0.15	15,137,050

• See chapter 19 for defined terms. 07/07/2016

Appendix 3B

Page 9

Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used

Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used	Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used	Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used
	Insertnumber of+equity securities issued or agreed to be issued in that 12 month periodnot countingthose issued: • Under an exception in rule 7.2 • Under rule 7.1A • With security holder approval under rule 7.1 or rule 7.4 Note: • This applies to equity securities, unless specifically excluded – not just ordinary securities • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	6,213,905
	“C”	6,213,905

Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1

Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1	Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1	Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1
	“A” x 0.15 Note: number must be same as shown in Step 2	15,137,050
	Subtract“C” Note: number must be same as shown in Step 3	(6,213,905)
	Total[“A” x 0.15] – “C”	8,923,145 [Note: this is the remaining placement capacity under rule 7.1]

• See chapter 19 for defined terms. 07/07/2016

Appendix 3B

Page 10

Part 2

Rule 7.1A – Additional placement capacity for eligible entities

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated “A” 100,913,667 Note: number must be same as shown in Step 1 of Part 1

Step 2: Calculate 10% of “A”

“D” 0.10 Note: this value cannot be changed Multiply “A” by 0.10 10,091,367

Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used

Insert number of[+] equity securities issued or agreed to be Nil issued in that 12 month period under rule 7.1A

Notes:

• This applies to equity securities – not just ordinary securities

• Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed

• Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained

• It may be useful to set out issues of securities on different dates as separate line items

“E” Nil

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A

“A” x 0.10 10,091,367 Note: number must be same as shown in Step 2 Subtract “E” Nil Note: number must be same as shown in Step 3 Total [“A” x 0.10] – “E” 10,091,367 [Note: this is the remaining placement capacity under rule 7.1A]

• See chapter 19 for defined terms. 07/07/2016

Appendix 3B

Page 11