Immuron Ltd - Interim / Quarterly Report 2016

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Appendix 4D For the Half Year Ended 31 December 2015

Current Reporting Period – Half Year Ended 31 December 2015

Previous Reporting Period – Half Year Ended 31 December 2014

This report is to be read in conjunction with the 30 June 2015 Annual Report and is given in compliance with Listing Rule 4.2A.

	31 Dec 2015 31 Dec 2014
	Revenues Up 5.31% to $557,342 from $529,255 Loss after tax attributable to members Down 47.15% to ($1,916,668) from ($1,302,531) Net loss for the period attributable to members Down 47.15% to ($1,916,668) from ($1,302,531)

	Net Tangible Asset per Security(cents per security) As at 31 December 2015 2.540 As at 31 December 2014 7.335*

*Capital was consolidation on a 40:1 basis on 20[th] November 2014.

Dividends (distribution)	Amount per Security	Franked Amount per Security
Previous corresponding period	n/a	n/a
Previous corresponding period	n/a	n/a
Record date for determining entitlements to dividend n/a Details of dividend reinvestment plans in operation None Details of entities over which control has been gained or lost during the period None Details of Associates and Joint Ventures None These accounts have been subject to review and there has been no qualification or dispute. Explanation of the above information: Refer to the Directors' Report - Review of Operations. Approved Date: Thursday, 25thFebruary 2016

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Appendix 4D Interim Financial Report

For the Half Year Ended 31 December 2015

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To be read in conjunction with the 30 June 2015 Annual Report. In compliance with Listing Rule 4.2A

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Contents

Directors’ Report	4
Auditor’s Independence Declaration	9
Statement of Profit or Loss and Other Comprehensive Income	10
Statement of Financial Position	11
Statement of Changes in Equity	12
Statement of Cash Flows	13
Notes to the Financial Statements	14
Directors’ Declaration	19
Independent Auditors’ Review Report	20
Company Directory	22

This Half Year Financial Report does not include all notes of the type normal included in an Annual Financial Report. Accordingly, this report is to be read in conjunction with the Annual Financial Report for the year ended 30 June 2015 and any public announcements made by Immuron Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001 and the ASX Listing Rules.

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Directors’ Report

Your Directors present their report on Immuron Limited for the half year ended 31 December 2015.

DIRECTORS

The following persons were directors of Immuron Limited during the whole of the half-year and up to the date of this report, unless otherwise stated:

Dr. Roger Aston Non-Executive Chairman Mr. Peter Anastasiou Deputy Executive Director Mr. Stephen Anastasiou Non-Executive Director Mr. Daniel Pollock Non-Executive Director

REVIEW OF OPERATIONS

Key Highlights for the period:

Immuron widens R&D Pipeline with Clostridium difficile POC breakthrough;
IMM-529 adds further validation to Immuron’s platform;
NASH Clinical Trial makes progress;
Travelan powers ahead in the US market with more distributors;
Protectyn launched in Australia with other markets on the horizon;
Immuron expands Investor base for Shareholder growth and potential secondary market listing
US Analysts commence coverage of Immuron and its attractive pipeline
Management team strengthened following new appointments.

Immuron Widens R&D Pipeline

Clostridium difficile POC breakthrough

We achieved outstanding pre-clinical proof of concept (POC) results for our proprietary C. difficile program, IMM-529, in all three of our pre-clinical models including (1) prevention, (2) treatment and (3) recurrence.

In conjunction with research partners at Monash University, the program tested C. difficile vaccines for POC in animal efficacy trials. The results showed an 80 percent efficacy in the treatment and prevention of C. difficile infections (CDI) without the use of antibiotics. The results of the recurrence studies showed a reduction in mortality from ~80 percent in the vancomycin control group to ~22 percent in the IMM-529 + vancomycin group, which demonstrates the ability of IMM-529 in lowering recurrence of the disease. All three pre-clinical studies were statistically significant.

C. difficile is a gram positive, spore forming bacterium which is associated with a spectrum of diseases collectively known as CDI. Human CDI can range from mild forms of disease such as self-limiting diarrhoea, to pseudomembranous colitis which may progress to life threatening toxic megacolon, sepsis and death. It particularly affects elderly hospital and aged care patients, especially during or after the use of antibiotics. With the project targeting the three key infectious cycles, and with no obvious competitors on the radar, our program looks to be well positioned in a multi-billion market.

IMM-529: Another validation of Immuron’s platform

With this latest set of results, we now have successfully pushed three major programs (Travelan, IMM-124E in NASH and ASH and IMM-529 in C. difficile) through proof-of-concept studies and into the clinic, a significant achievement for our platform. This success highlights the potential and versatility of Immuron’s platform.

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Directors’ Report (Continued…)

Non-alcoholic steatohepatitis (NASH) clinical trial makes progress

Progress in the Phase II clinical trial was sustained, with the trial successfully reaching its 25 percent recruitment milestone in November. The figure represents 35 patients out of a total of 120 joining the trial, with no significant adverse events reported.

We now have 22 active clinical study sites in the U.S, Australia, and Israel, with a further three added between September and November, and another two to three planned to be added in the U.S. by early 2016.

In November, we also signed a collaboration agreement with One Way Liver S.L. (OWL Metabolomics), a leader in metabolomics and liver disease diagnostics. Subjects with NASH will be evaluated on the basis of metabolomics signatures already validated for NASH as well as additional novel signatures still in development.

NASH, or non-alcoholic fatty liver disease (NAFLD), is a metabolic disease which affects more than 25 percent of the U.S. population. It closely correlates with other metabolic diseases such as obesity and diabetes.

Immuron’s Commercial Products Expand their Reach

Travelan powers ahead with more distributors in U.S.

The United States distribution network for our travellers’ diarrhoea drug, Travelan, received a significant boost in August, October and November when we announced a further four partnership distribution agreements with major personal and travel medicine distributors.

The first was signed in August with a non-exclusive sales agreement with U.S. sub-distributor, Traveler’s Supply Inc. of Springfield, Massachusetts. Significantly, Traveler’s Supply are under contract to take a minimum of 50,000 units annually, a resounding endorsement of our U.S. strategy of maximizing margin without the expense of a direct sales force.

We signed the second in October with U.S. travel clinic leader, Passport Health, the largest provider of travel medicine and immunization services in North America. Passport Health has more than 250 corporate and independently franchised clinics dispensing travel medicine and vaccination services to business, government agencies and other large organisations.

Two more agreements were signed in November beginning with TravelCare Worldwide LLC of Lone Tree, Colorado.

TravelCare is a Group Purchasing Organisation (GPO) supplying travel medicine, vaccination, and immunization services in more than 70 clinics, as well as mobile healthcare services to companies, schools and community organisations. Founded in 2004, TravelCare is a member of the International Society of Travel Medicine and can access 2,000 members worldwide.

The fourth was Medico-Mart Inc. of Waukesha, Wisconsin. Founded in 1935, Medico-Mart is an influential healthcare distribution company specialising throughout the U.S. in travel and occupational medicine, family practice, internal drugs, and paediatric products.

We continue to make significant progress with a large number of potential customers including pharmacy chains. And we look forward to more news in the second half of 2016.

With no other approved therapy, and an estimated global market of US$500M annually, we have reason to be optimistic.

Travelan’s active ingredient is hyperimmune bovine colostrum. Its antibodies bind to enterotoxigenic E. coli, and other gram-negative bacteria, preventing them from attaching to the gut wall and neutralising their ability to cause traveller’s diarrhoea.

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Directors’ Report (Continued…)

Protectyn launched in Australia

We have successfully launched our new dietary supplement, Protectyn, in Australia and are exploring other markets for the product, given its compelling efficacy and large prevalence of gut dysbiosis across the world.

Protectyn is another product in our pipeline of hyperimmune antibody-based products. It is rich in antilipopolysaccharide (LPS) antibodies that reduce gram-negative bacteria in the gut. These antibodies help improve bacterial clearance, reduce chronic inflammation, and improve immune function.

Travelan / Protectyn – Other Markets

We continue to advance toward the approval/launch of Travelan with our partners in several countries including China, Korea and Russia, all depending on approvals by their respective regulatory authorities. We are also in discussions with several other partners to open up other markets to Travelan and Protectyn.

Immuron Expands Investor Base for Shareholder Growth

Successful OTCQB listing in U.S.

Our application to list on the U.S. OTCQB index was approved in September.

The listing on the over-the-counter (OTC) exchange gives Immuron access to a decentralised market. There, securities like Immuron’s that are not listed on a major U.S. exchange can be directly and electronically traded on a platform the U.S. Securities and Exchange Commission recognizes and supports.

The listing boosts our exposure to U.S. brokers and dealers, which will allow a fuller assessment of our technology and share value. We see this as a crucial stepping stone in our plan for a full listing on NASDAQ.

Secondary Listing in the US

We have selected an experienced team of investment bankers, securities lawyers and accountants to prepare us fully for this important milestone, which we fundamentally believe is the right strategy for the Company.

However, as we were ramping up for the listing in CY4Q2015 / CY1Q2016, the market’s sudden increase in volatility has forced us to pause our efforts for the time being, which has been the strategy of other companies as well. We will revisit timing with our bankers in the near future and will communicate our new timeline to shareholders at that time.

The postponement of the NASDAQ listing will also allow Immuron to deliver greater sales of Travelan through recent appointment of marketing partners which should allow better reflection of valuation moving forward to NASDAQ listing.

US Investment Fund Makes $1.7M Investment in Immuron

As announced to the market on February 17, 2016, a New York-based Investment Fund will provide AUD$1,700,000 in funding.

The investment is structured in 3 tranches with a mix of equity financing and convertible securities.

This financing will be used to fund the immediate start of the clinical phase for IMM-529 in C. difficile which recently completed a very successful pre-clinical program, accelerate sales and marketing initiatives for Travelan in the US, and continue Immuron’s efforts in highlighting the company’s strong position to the US investment markets, as well as funding the other working capital needs of the Company.

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Directors’ Report (Continued…)

Analyst Reports Highlight Upside Potential of Immuron’s Pipeline

Blue chip report from Red Chip

As evidence of continued progress in marketing Immuron’s compelling message in the U.S, we engaged the services of Red Chip Inc. Red Chip is a Florida-based international leader in small-cap investor relations and multi-media marketing.

Red Chip’s involvement has produced immediate dividends. Their August 20 analyst report garnered substantial online and market attention, resulting in a spike in our share price. To view the report, please visit the immuron website http://immuron.com/investor-centre/analyst-reports/.

Based on a net present value analysis of Travelan and Protectyn, along with our IMM-124E in NASH and ASH trial progress, Red Chip valued Immuron at an impressive AU$1.70 per share compared to our last year’s actual average price of AU$0.365.

Initiation report by SeeThruEquity

In early 2016, SeeThruEquity, a leading independent equity research and corporate access firm, focused on small cap and micro cap public companies, initiating coverage on Immuron with a target price of AU$1.37. SeeThruEquity is an approved equity research contributor on Thomson First Call, Capital IQ, FactSet, and Zack's. The report on Immuron will be available on all of these platforms immediately as well as on Thomson Estimates, the leading estimates platform on Wall Street.

The report can be found at http://immuron.com/investor-centre/analyst-reports/.

Board and Management Strengthened

Thomas Liquard appointed CEO

Following the resignation of Chief Executive Officer, Dr Leearne Hinch, in July, a worldwide executive search resulted in the appointment of new CEO, Thomas Liquard, who took up the post in August.

Mr Liquard has held senior commercialisation, product development, and leadership roles in large international pharma and biotech companies. He was Chief Operating Officer (COO) and CEO at Australia’s Alchemia Ltd (ASX: ACL) between 2013 and 2014. He managed a AU$22m operating budget, brought two major investors onto the register, and led all corporate and business development.

Prior to Alchemia, he had seven years with Pfizer in New York, culminating in his role as Senior Director, Portfolio Development Leader Emerging Markets and Established Products. He was also responsible for business development across 70 opportunities.

A key achievement was engineering the group’s $700m acquisition of NextWave Pharmaceuticals.

Dr Jerry Kanellos comes aboard as Chief Operating and Scientific Officer

Dr Jerry Kanellos, with more than 20 years’ experience in the pharma and biotechnology sectors, was a welcome appointment in July as Chief Operating and Scientific Officer.

He has fulfilled leadership roles in research and business development, project management and IP portfolio management across a range of public and private organisations, including five years as COO for Transbio Ltd, and 10 years in R&D at CSL Limited. He also spent five years in consultancy with a variety of companies and government departments, and several biotech start-ups.

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Directors’ Report (Continued…)

Peter Anastasiou steps up to Executive Vice Chairman

Having been appointed as a Non-Executive Director in May 2015, Peter Anastasiou was promoted to Executive Vice Chairman in late August as a direct result of his increasing involvement, especially in U.S. market developments.

Chairman, Dr Roger Aston, praised Mr Anastasiou’s original investor foresight and his energetic contribution to the direct-to-retailer sales model for Travelan in Australian and U.S. markets.

On the horizon

Looking forward, significant milestones we expect to achieve in the coming six months include:

Continue our investor relations efforts, with particular emphasis on the US
Meeting further NASH recruiting milestones
Start of C. difficile clinical program
Start of colitis pre-clinical program
Secure further wholesale distribution territories and partners for Travelan/Protectyn and further boost sales across all of our geographies

All of these developments underpin the careful planning and strategic thinking that continues to guide Immuron’s advance towards global significance as a pharmaceutical force.

For and on behalf of the Company;

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Thomas Liquard Chief Executive Officer Immuron Limited

Dated: This the 25[th] day of February 2016

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Auditors’ Independence Declaration

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Statement of Profit or Loss and Other Comprehensive Income For the Half Year Ended 31 December 2015

	31 December 2015 31 December 2014
	Notes $ $
	Revenue Total Operating Revenue 557,342 529,255
	Total Operating Revenue 557,342 529,255 Cost of Goods Sold (153,640) (161,802)
	Gross Profit 403,702 367,453 Direct Selling Costs Sales and Marketing Costs (302,272) (204,346) Freight and Storage Costs (61,299) (4,713)
	Total Gross Revenue 40,131 158,394 Interest Income 7,143 69,019 R&D Refund 1,469,763 713,632 Expenses Consulting, Employee and Director Expenses (575,905) (276,192) Corporate Administration Expenses (708,625) (276,525) Equity-based payments expenses (99,234) - Depreciation Expense (1,944) (1,893) Impairment of Inventory Expense (169) (15,192) Marketing and Promotion Expenses (12,233) (115,389) Research and Development Expenses (1,839,990) (1,523,921) Travel and Entertainment Expenses (195,605) (34,464)
	Loss before income tax expense from continuing operations (1,916,668) (1,302,531) Income Tax Expense - -
	Loss after income tax for the year (1,916,668) (1,302,531)
	Other comprehensive income: Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign operations (4,782) - Total comprehensive income for the year (1,921,450) (1,302,531)
	Loss per share for the year attributable to the members of the parent entity Basic Loss per Share (cents per share) 7 (2.540) (1.739) Diluted Loss per Share (cents per share) 7 (2.540) (1.739)

The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

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For the Half Year Ended 31 December 2015

Statement of Financial Position

	31 December 2015 30 June 2015
	Notes $ $
	ASSETS Current Assets Cash and cash equivalents 994,151 3,116,074 Trade and other receivables 1,635,443 221,866 Inventories 1,431,535 1,146,267 Other 64,654 44,927
	Total Current Assets 4,125,783 4,529,134
	Non-Current Assets Other financial assets 1 1 Plant and equipment 20,011 19,514
	Total Non-Current Assets 20,012 19,515
	TOTAL ASSETS 4,145,795 4,548,649
	LIABILITIES Current liabilities Trade and other payables 1,184,907 1,207,810 Borrowings 1,020,000 -
	Total Current Liabilities 2,204,907 1,207,810
	TOTAL LIABILITIES 2,204,907 1,207,810
	NET ASSETS 1,940,888 3,340,839
	EQUITY Issued Capital 5 40,816,227 40,335,347 Reserves 583,902 548,065 Accumulated Losses (39,459,241) (37,542,573)
	TOTAL EQUITY 1,940,888 3,340,839

The above Statement of Financial Position should be read in conjunction with the accompanying notes.

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Statement of Changes in Equity

For the Half Year Ended 31 December 2015

	Share Capital Option Reserve Foreign Currency Translation Reserve Accumulated Losses Total
	$ $ $ $ $
	Balance as at 30 June 2014 40,325,295 666,592 - (34,204,942) 6,786,945
	Loss after income tax expense for the year - - - (1,302,531) (1,302,531) Other comprehensive income for the year, net of tax - - - - -
	Total comprehensive income for the period - - - (1,302,531) (1,302,531)
	Transactions with owners in their capacity as owners: Shares issued, net of costs 10,052 - - - 10,052 Employee and consultant share options - 4,374 - - 4,374
	Balance as at 31 December 2014 40,335,347 670,966 - (35,507,473) 5,498,840

	Balance as at 30 June 2015 40,335,347 560,646 (12,581) (37,542,573) 3,340,839
	Loss after income tax expense for the year - - - (1,916,668) (1,916,668) Other comprehensive income for the year, net of tax - - (4,782) - (4,782)
	Total comprehensive income for the period - - (4,782) (1,916,668) (1,921,450)
	Transactions with owners in their capacity as owners: Shares issued, net of costs 480,880 - - - 480,880 Employee and consultant share options - 99,234 - - 99,234 Lapse or exercise of share options - (58,615) - - (58,615)
	Balance as at 31 December 2015 40,816,227 601,265 (17,363) (39,459,241) 1,940,888

The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.

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For the Half Year Ended 31 December 2015

Statement of Cash Flows

	31 December 2015 31 December 2014
	Notes $ $
	Cash flows Related to Operating Activities Receipts from customers 613,528 820,612 Payments to suppliers and employees (4,074,918) (2,428,109) Interest received 7,143 63,814
	Net Cash Flows Used In Operating Activities (3,454,247) (1,543,683)
	Cash Flows Related to Investing Activities Payment for purchases of plant and equipment (2,441) -
	Net Cash Flows Used In Investing Activities (2,441) -
	Cash Flows Related to Financing Activities Proceeds from issues of securities 342,223 - Capital raising costs (7,458) - Loans from Grandloge Capital 8 1,000,000
	Net Cash Flows Used In Financing Activities 1,334,765 -
	Net increase/(decrease) in cash and cash equivalents (2,121,923) (1,543,683) Cash and cash equivalents at the beginning of the year 3,116,074 6,141,789

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Notes to the Financial Statements

Note 1. Basis of Preparation

(a) Basis of Preparation

The general purpose financial report for the interim half year reporting period ended 31 December 2015 has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001.

This half year financial report does not include all notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2015 and any public announcements made by Immuron Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001 and the ASX Listing Rules.

Compliance with AASB 134 "Interim Financial Report" ensures that the financial statements and notes of the entity comply with International Financial Reporting Standards equivalent IAS 34 "Interim Financial Reporting."

(b) Accounting Policies

All accounting policies adopted are consistent with the most recent Annual Financial Report for the year ended 30 June 2015. The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretation issued by the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the consolidated entity.

(c) Fair value measurement

Due to the nature of the Group’s operating profile, the Directors and management do not consider that the fair values of the Group’s financial assets and liabilities are materially different from their carrying amounts at 31 December 2015.

Note 2. Dividends

The company has not declared any dividends in the period ended 31 December 2015. (2014: $Nil)

Note 3. Segment Information

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

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

Segments

Research and Development (R&D) – Income and expenses directly attributable to the company’s research and development projects performed in Australia and Israel.

HyperImmune Products – Income and expenses directly attributable to Travelan activities which occur in Australia, New Zealand and United States.

Corporate – Other items of income and expenses not directly attributable to R&D or HyperImmune Products segment are disclosed as corporate costs. Corporate activities primarily occur within Australia. This segment includes interest expenses from financing activities and depreciation.

The Board assesses the performance of the operating segments at a number of operating levels including adjusted EBITDA.

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Notes to the Financial Statements (Continued…)

	Research & HyperImmune Corporate
31 December 2015	Development Products	Total
	$ $ $	$
Segment Revenue Revenue from external customers R&D tax concession refund Interest revenue	- 557,342 - 1,469,763 - - - - 7,143	557,342 1,469,763 7,143
Total Segment Revenues	1,469,763 557,342 7,143	2,034,248
Segment Expenses Segment Expenses	(1,839,990) (517,380) (1,593,546)	(3,950,916)
Total Segment Expenses	(1,839,990) (517,380) (1,593,546)	(3,950,916)
Income Tax Expenses	- - -	-
Net Result	(370,227) 39,962 (1,586,403)	(1,916,668)
Assets Segment assets	1,469,763 1,597,215 1,078,817	4,145,795
Total Assets	1,469,763 1,597,215 1,078,817	4,145,795
Liabilities Segment liabilities	(604,666) (131,929) (1,468,312)	(2,204,907)
Total Liabilities	(604,666) (131,929) (1,468,312)	(2,204,907)

	Research & HyperImmune Corporate
31 December 2014	Development Products	Total
	$ $ $	$
Segment Revenue Revenue from external customers R&D tax concession refund Interest revenue	- 529,255 - 713,632 - - - - 69,019	529,255 713,632 69,019
Total Segment Revenues	713,632 529,255 69,019	1,311,906
Segment Expenses Segment Expenses	(1,523,921) (386,053) (704,463)	(2,614,437)
Total Segment Expenses	(1,523,921) (386,053) (704,463)	(2,614,437)
Income Tax Expenses	- - -	-
Net Result	(810,289) 143,202 (635,444)	(1,302,531)
Assets Segment assets	- 1,092,124 5,399,702	6,491,826
Total Assets	- 1,092,124 5,399,702	6,491,826
Liabilities Segment liabilities	(603,306) (236,666) (153,014)	(992,986)
Total Liabilities	(603,306) (236,666) (153,014)	(992,986)

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Notes to the Financial Statements (Continued…)

Note 4. Contingent Liabilities and Assets

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

Note 5. Contributed Equity

	31 December 2015 30 June 2015
	No. $ No. $
	Fully Paid Ordinary Shares Balance at beginning of year 74,964,232 40,335,347 2,995,662,120 40,325,295 Capital consolidation (40:1) - - (2,920,770,804) - Shares issued during the year 1,457,041 488,338 72,916 11,667 Transactions costs (cash-based) - (7,458) - (1,615)
	76,421,273 40,816,227 74,964,232 40,335,347

During the Half Year ended 31 December 2015 the Company issued the following Ordinary Shares:

			Issue Price	Total Value
Date	Details	No.	$AUD	$AUD
18-Sep-15	Exercise of Unlisted IMCAI Options	218,750	0.4404	96,338
30-Sep-15	Exercise of Unlisted IMCAI Options	93,750	0.4404	41,288
19-Oct-15	Exercise of Unlisted IMCAI Options	556,000	0.4404	244,862
13-Nov-15	Exercise of Unlisted IMCAI Options	41,666	0.4404	18,350
	Issue pursuant to Resolution 4 approved by
27-Nov-15	shareholders at Company's Annual General	546,875	0.1600	87,500
	meetingon 25th November 2015.
		1,457,041		488,338

Note 6. Option Reserves

	31 December 2015 30 June 2015
	No. $ No. $
	Options over Fully Paid Ordinary Shares Balance at beginning of year 6,188,676 560,646 365,542,766 666,592 Capital consolidation (40:1) - - (356,404,893) - Options exercised during the year (910,166) (58,615) - - Expense of vested options 6,000,000 99,234 - 4,374 Lapse of unexercised options - - (2,949,197) (110,320)
	11,278,510 601,265 6,188,676 560,646

During the Half Year ended 31 December 2015 the Company issued the following Options:

			Option value	Total Value
Date	Details	No.	$AUD	$AUD
	Issue pursuant to Resolution 5A-5D approved by
27-Nov-15	shareholders at Company's Annual General	6,000,000	0.0823	99,234
	meetingon 25th November 2015.
		6,000,000		99,234

Total value of options represents the value of options expensed during the period due to vesting conditions.

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Notes to the Financial Statements (Continued…)

Note 7. Loss Per Share

		31 December 2015	31 December 2014
		$	$
Basic loss per share (cents)		(2.540)	(1.739)
Diluted loss per share (cents)		(2.540)	(1.739)
a)	Net loss used in the calculation of basic and diluted loss per share	(1,916,668)	(1,302,531)
b)	Weighted average number of ordinary shares outstanding
	during the period used in the calculation of basic and	75,470,006	74,907,491
	diluted loss per share

Note 8. Related Party Transactions

Short-Term Loan

On 1[st] December 2015 the consolidated entity entered into a short-term loan agreement with Grandlodge Capital Pty Ltd, which is a related entity of two directors whilst also being a major shareholder of Immuron, for a $1M cash advance short-term loan.

The nature of this loan represented short-term funding until such time as the Company received its entitled Research and Development Tax Concession Refund (R&D Tax Refund) from the Australian Taxation Office for eligible expenditure incurred with respect to the 2015 financial year. The terms of this agreements represented commercial arms-length terms for loans of a similar nature for a similar value in the industry. This loan, plus applicable interest and application fees, were repaid to Grandlodge on 9[th] February 2015 following receipt of the Company’s R&D Tax Refund as announced to the ASX.

Service rendered by Grandlodge Pty Ltd to Immuron Ltd

Grandlodge, and its associated entities, are marketing, warehousing and distribution logistics companies which is part-owned and operated by Immuron Limited’s Deputy Executive Director Peter Anastasiou and Non-Executive Director Stephen Anastasiou.

Mr David Plush is also an owner of Grandlodge, and its associated entities, and owns a top 20 shareholding in Immuron Limited.

Commencing on 1 June 2013, Grandlodge was contracted on commercial market arms-length terms to provide warehousing, distribution and invoicing services for Immuron’s products for $70,000 per annum. These fees will be payable in new fully paid ordinary shares in Immuron Limited at a set price of $0.16 per share representing Immuron Limited’s share price at the commencement of the agreement.

The shares to be issued to Grandlodge, or its associated entities, as compensation in lieu of cash payment for the services rendered under this agreement have been subject to the approval of Immuron shareholders at Company shareholder meetings held over the past 24 months.

Grandlodge will also be reimbursed in cash for all reasonable costs and expenses incurred in accordance with their scope of works under the agreement, unless both parties agree to an alternative method of payment.

The agreement is cancellable by either party upon providing the other party with 30 days written notice of the termination of the agreement.

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ASX:IMC

Notes to the Financial Statements (Continued…)

Note 9. Events Occurring after the Reporting Date

As announced to ASX market on 4[th] February 2016, the Company received a cash refund of $1,469,763 for the Research and Development Tax Confession Refund for the 2015 financial year.

As announced to the ASX market on 17[th] February 2016, a New York-based Investment Fund has agreed to provide up to AUD$1,700,000 in funding. The investment is structured in three tranches with a mix of equity financing and convertible securities.

The first tranche payment was received on 19[th] February 2016 being a AUD$100,000 private placement of securities plus a $678,000 Face Value repayable Convertible Note.

Accordingly, on 24[th] February 2016 the Company issued:

294,118 fully paid ordinary shares for the $100,000 placement;
1 million Unlisted Options exercisable at $0.570 per option on or before 24[th] February 2016; and
2 million untradeable Collateral Shares (fully paid ordinary shares) which will be escrowed and only accessible to the Investment Fund in the unlikely event of Immuron falling into default.

The Convertible Note is repayable monthly over an 18 month period with each repayment to be settled at Immuron’s discretion monthly by:

a) the issuance of new shares at a 10% discount to a 5 Day Volume Weighted Average Price (VWAP) over the 20 trading days immediately prior to a repayment due date; or
b) cash repayment plus a 2.5% premium to the repayment amount;

at Immuron’s discretion.

This financing will be used to fund the immediate start of the clinical phase for IMM-529 in Clostridium difficile which recently completed a very successful pre-clinical program, accelerate sales and marketing initiatives for Travelan in the US, and continue Immuron’s efforts in highlighting the company’s strong position to the US investment markets, as well as funding the other working capital needs of the Company.

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ASX:IMC

Directors’ Declaration

The Directors of the Company declare that:

The financial statements and notes, as set out on pages 10 to 18, are in accordance with the Corporations Act 2001 and other mandatory professional reporting requirements including:
(a) complying with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Regulations; and
(b) giving a true and fair view of the consolidated entity's financial position as at 31 December 2015 and of its performance for the half-year ended on that date
In the Directors' opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors.

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Dr. Roger Aston Non-Executive Chairman Immuron Limited

This the 25[th] Day of February 2016

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Independent Auditor’s Report

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Independent Auditor’s Report (Continued…)

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Page 21 of 22

ASX:IMC

Company Directory

Australian Company Number (ACN) 063 114 045

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

Directors

Dr. Roger Aston Mr. Peter Anastasiou Mr. Stephen Anastasiou Mr. Daniel Pollock

Chief Executive Officer (CEO)

Mr. Thomas Liquard

Principal Place of Business Unit 10, 25-37 Chapman Street, Blackburn North, Victoria, 3130 Australia Telephone: + 61 (0)3 9824 5254 Facsimile: + 61 (0)3 9822 7735 Share Registry Security Transfer Registrars 770 Canning Highway Applecross WA 6153 Telephone: +61 (0)8 9315 2333 Facsimile: +61 (0)8 9315 2233 Auditors William Buck Level 20, 191 William Street Melbourne, Victoria, 3000 Australia Telephone: + 61 (0)3 9824 8555 Facsimile: + 61 (0)3 9824 8580

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

Company Secretaries Mr. Phillip Hains Mr. Peter Vaughan

Registered Office

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

Solicitors

Francis Abourizk Lightowlers Level 16, 356 Collins Street Melbourne, Victoria, 3000 Australia

Bankers

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

Websites

www.immuron.com www.travelan.com.au

Securities Quoted

Australian Securities Exchange

Ordinary Fully Paid Shares (Code: IMC)

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Page 22 of 22

ASX:IMC

AI assistant

Immuron Ltd — Interim / Quarterly Report 2016

35121_rns_2016-02-24_693cacbf-95aa-4729-b244-feefc2f2eb73.pdf

Appendix 4D For the Half Year Ended 31 December 2015

Appendix 4D Interim Financial Report

For the Half Year Ended 31 December 2015

DIRECTORS

REVIEW OF OPERATIONS

Key Highlights for the period:

Immuron Widens R&D Pipeline

Clostridium difficile POC breakthrough

IMM-529: Another validation of Immuron’s platform

Non-alcoholic steatohepatitis (NASH) clinical trial makes progress

Immuron’s Commercial Products Expand their Reach

Travelan powers ahead with more distributors in U.S.

Protectyn launched in Australia

Travelan / Protectyn – Other Markets

Immuron Expands Investor Base for Shareholder Growth

Successful OTCQB listing in U.S.

Secondary Listing in the US

US Investment Fund Makes $1.7M Investment in Immuron

Analyst Reports Highlight Upside Potential of Immuron’s Pipeline

Blue chip report from Red Chip

Initiation report by SeeThruEquity

Board and Management Strengthened

Thomas Liquard appointed CEO

Dr Jerry Kanellos comes aboard as Chief Operating and Scientific Officer

Peter Anastasiou steps up to Executive Vice Chairman

On the horizon

Statement of Financial Position

Statement of Changes in Equity

For the Half Year Ended 31 December 2015

Statement of Cash Flows

Note 1. Basis of Preparation

(a) Basis of Preparation

(b) Accounting Policies

(c) Fair value measurement

Note 2. Dividends

Note 3. Segment Information

Segments

Note 4. Contingent Liabilities and Assets

Note 5. Contributed Equity

Note 7. Loss Per Share

Note 8. Related Party Transactions

Short-Term Loan

Service rendered by Grandlodge Pty Ltd to Immuron Ltd

Note 9. Events Occurring after the Reporting Date

Registered Office

Solicitors

Bankers

Securities Quoted

Australian Securities Exchange

More from Immuron Ltd

Immuron Ltd Interim / Quarterly Report 2016