ABN: 80 063 114 045 Level 1, 39 Leveson Street North Melbourne, Vic 3051 Tel: +61 3 8637 1107 Fax: +61 3 9328 1675 www.immuron.com

9 July 2012

Dear Shareholder

Issue of Bonus Options.

The Directors announced on 23 April 2012 that the Company would be issuing bonus options in the ratio of one (1) option for every four (4) shares held as at 7pm AEST on 23 July 2012.

The options are being issued to shareholders at no cost and will provide shareholders with the opportunity to subscribe for an additional share in the Company at any time before the expiry date of 30 April 2015. The exercise price for each option will be four cents (\$0.04) per share. The Company will seek listing of the Options on the ASX.

A prospectus in respect of the Bonus Option issue will be forwarded to all shareholders shortly.

The indicative timetable for the Bonus issue is as follows:

Action	Date
Announcement and Appendix 3B, prospectus lodged with ASIC and ASX	6 July 2012
Information letter to shareholders	9 July 2012
Ordinary shares quoted ex entitlement to bonus issue	17 July 2012
Record date for determining entitlements to bonus options	23 July 2012
Dispatch Prospectus	27 July 2012
Expected date for allocation of Options and dispatch of holding statements	27 July 2012
Expected date for the Official Quotation of the Options on the ASX	30 July 2012

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

Yours sincerely

Colin Chapman Chairman

Prospectus

Immuron Limited ACN 063 114 045 ASX Code: IMC

Pro rata bonus issue of 1 Option for every 4 Shares held by Shareholders on the Company's share register as at 7.00 pm AEST on 23 July 2012

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 the Prospectus, then you should consult your professional advisor.

The Options (and Shares issued on exercise of the Options) offered pursuant to this Prospectus should be considered speculative.

Important Information:

This Prospectus is dated 6 July 2012 and was lodged with ASIC on that date.

This Prospectus is for an offer of Options to acquire continuously quoted securities, issued in accordance with section 713 of the Corporations Act. Pursuant to Section 713, where a company that is a disclosing entity for the purposes of the Corporations Act decides to make an offer of options to acquire continuously quoted securities, it is entitled to issue a prospectus for the issue of the Options with disclosure that is limited to certain transaction-specific information.

No Options will be issued on the basis of this Prospectus later than 13 months after the date of Application will be made to the ASX within 7 days after the date of this this Prospectus. Prospectus for permission for Options offered by this Prospectus (together with the Placement Options) to be listed for Official Quotation.

No funds will be raised by the Company upon the issue of the Options issued in accordance with the terms of this Prospectus.

In preparing this Prospectus, regard has been had to the fact that ASX maintains a database of publically disclosed information about the Company and 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 professional advisors with whom potential investors may consult.

Various statements in this Prospectus constitute statements relating to intentions, future acts and events. Such statements are generally classified as forward looking statements and involve known and unknown risks, uncertainties and other important factors that could cause those future acts. events and circumstances to differ from the way or manner in which they are expressly or implicitly portrayed in this Prospectus.

This Prospectus does not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful. The distribution of this Prospectus in iurisdictions outside Australia or New Zealand may be restricted by law and any person into whose possession this Prospectus comes should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

No person is authorised to give any information or to make any representation in connection with the Bonus Issue that is not contained in this Prospectus. Any information or representation not contained in this Prospectus may not be relied upon as having been authorised by the Company in connection with the Bonus Issue. Neither the Company nor any other person warrants the future performance of the Company or any return on any investment made under this Prospectus except as required by law and then only to the extent so required.

This Prospectus provides information to help Shareholders decide whether they wish to further invest in the Company. Before deciding to invest in the Company, potential investors should read the entire Prospectus and in particular the technical information and the risk factors that could affect the future operations and activities of the Company. The Bonus Issue contained in this Prospectus does not take into account the investment objectives, financial situation and particular needs of the investor. Professional advice should be sought before deciding to invest in any securities the subject of this Prospectus.

You should read this document in its entirety and, if in any doubt, consult with your professional advisors before deciding whether to exercise Options before or on their expiry date of 30 April 2015. There are risks associated with an investment in Immuron Limited and the Options offered under this Prospectus should be regarded as a speculative investment. The Options offered under this Prospectus carry no guarantee with respect to return on capital investment, payment of dividends, the future value of the Options or the future value of the Shares to issue upon any exercise of the Options.

Certain abbreviations and other defined terms are used throughout this Prospectus. Details of the definitions and abbreviations used are set out in Section 10 of this Prospectus. All financial amounts shown in this Prospectus are expressed in Australian dollars unless otherwise stated

This Prospectus may be viewed in electronic form online at the Company's website: www.immuron.com. The information on the Company's website (outside the electronic Prospectus) does not form part of this Prospectus. Additional copies of the Prospectus are available at the registered office of the Company.

This Bonus Issue is available to all Shareholders as at the Record Date receiving an electronic version of this Prospectus.

Any person may obtain a copy of this Prospectus or any of the documents referred to in section 8.1 free of charge by contacting the Company via email on: [email protected].

Warning statement applicable to New Zealand investors:

This 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 Requiations. 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.

Prospectus		1
1.	Corporate Directory	6
1.1	Directors	6
1.2	Company Secretary	$\boldsymbol{6}$
1.3	Registered office	6
1.4	Solicitors	$6\phantom{a}$
1.5	Share registry	6
2.	Indicative timetable	7
3.	Summary of key investment highlights and risks	8
3.1	Key investment highlights	8
3.2	Key investment risks	8
4.	Details of the Bonus Issue	8
4.1	The Bonus Issue	8
4.2	Use of funds raised	9
4.3	Allotment and Allocation	9
4.4	ASX Official Quotation	9
4.5	Offers outside Australia	9
4.6	CHESS	9
4.7	Taxation	10
4.8	Prohibition on exceeding 20% voting power threshold	10
4.9	Directors' Discretion	10
4.10	Privacy disclosure	11
4.11	Enquiries	11
5.	Effect of the Bonus Issue on the Company	11
5.1	Effect on financial position of the Company	11
5.2	Effect on the capital structure of the Company	13
5.3	Potential effect on control of the Company	14
6.	Risk factors	15
6.1	Key risks	15
6.2	General risks	15
6.3	Operational Risks	16
7.	Terms and conditions of Options attaching to Shares	17
7.1	Terms and conditions of Options	17
7.2	Rights attaching to Shares upon Exercise of Options	18
8.	Additional information	19
8.1	Continuous disclosure and documents available for inspection	19
8.2	Information excluded from continuous disclosure notices	22
8.3	Interests of Directors	22
8.4	Market prices of Shares	23
8.5	Restricted securities	23
8.6	Broker handling fees	23
8.7	Expenses of the Bonus Issue	24
8.8	Middletons	24
8.9	Consents	24
8.10	Taxation	24
8.11	Legal proceedings	24

8.12 8.13 8.14	Material Contracts Electronic Prospectus Further information	24. 24 24
9.	Authority of Directors	25
10.	Definitions	26

$\ddot{\phantom{0}}$

1. Corporate Directory

$1.1$ Directors

Professor Colin Chapman Position: Non-executive Chairman

Dr Elane Zelcer Position: Independent non-executive Director

Dr Stewart Washer

Position: Independent Non-executive Director

Dr Roger Aston Position: Independent non-executive Director

Mr Joe Baini Position: Executive Director and Chief Executive Officer

$1.2$ Company Secretary

Mr Graeme Stevens Position: Chief Financial Officer and Company Secretary

$1.3$ Registered office

39 Leveson Street North Melbourne VIC 3051

Telephone +61 3 8637 1107 +61 3 9328 1675 Fax Email [email protected] Website www.immuron.com

1.4 Solicitors

Middletons Level 25 525 Collins Street Melbourne VIC 3000

Share registry $1.5$

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

Indicative timetable $\overline{2}$ .

The indicative timetable for the Bonus Issue is as follows:

Action	Date
Announcement and Appendix 3B, Prospectus lodged with ASIC and ASX	6 July 2012
Send information (including timetable) to Shareholders as per Appendix 3B	9 July 2012
Ordinary Shares quoted ex entitlement to the Bonus Issue	17 July 2012
Record Date for determining entitlements to Options	23 July 2012
Dispatch Prospectus	27 July 2012
Expected date for allocation of Options and dispatch of holding statements	27 July 2012
Expected date for the Official Quotation of the Options on ASX	30 July 2012

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.

$\overline{\phantom{a}}$

Summary of key investment highlights and risks $\mathfrak{Z}$ .

$3.1$ Kev investment highlights

As a Shareholder, you are entitled to 1 free Option for every 4 Shares held by you as at $\bullet$ 7.00 pm AEST on 23 July 2012 (Record Date).
The terms and conditions applicable to the Options are contained in the Option Terms. $\bullet$
You may elect (but there is no obligation) to exercise the Options (or any of them) at any $\bullet$ time on or before 5:00 pm AEST on 30 April 2015 (Expiry Date) and on exercise must pay \$0.04 per Option (resulting in the issue of 1 Share per exercised Option).
No funds are raised on issue of the Options, however if the Options are exercised in full the $\bullet$ Company will raise up to approximately \$4,141,000.
It is intended that any funds raised from the exercise of the Options will be applied to the commercialisation of current pipeline products currently in development, to meet the costs of ongoing research projects and to provide working capital to meet operating expenses. It is anticipated that based on its product development strategy it should have two new drug candidates at phase 2 stage of development within three years.

$3.2$ Key investment risks

The market price of the Company's Shares may fluctuate and, if the market price of Shares $\bullet$ is below \$0.04, it is unlikely that the Options will be exercised.
Regardless of how many Options are exercised, the Company will need to raise further $\bullet$ capital over the next three years to fund its current and future operations.
If the Options are granted Official Quotation, the price at which you may trade these Options may fall as well as rise.
If you exercise or sell an Option, this may have taxation consequences, depending on your $\bullet$ particular circumstances. We suggest that you receive independent professional advice in respect of the effect on your personal tax position in receiving and ultimately exercising vour Options.
If you do not exercise the Options and other investors do, your Shareholding will be diluted to the extent other Shareholders exercise their Options.

The above provides a summary of the key investment highlights and risks only. You should read this Prospectus in full, including Section 4, which contains details of the Bonus Issue, Section 6, which contains more detailed disclosure of the risks associated with the Bonus Issue and an investment in the Company and Section 7, which contains the terms and conditions of the Options and the underlying Shares.

$\mathbf{A}_{\cdot}$ Details of the Bonus Issue

4.1 The Bonus Issue

There will be an ongoing requirement for the Company to have access to further capital as it progresses its research and development activities. Given the costs associated with raising capital, it would be very cost effective for the Company to obtain its future capital requirements from the issue of new shares to sophisticated and professional investors. This would have the effect of diluting present shareholders, whereas the issue of the bonus Options to shareholders registered on the Record Date will provide those shareholders with the right (but not the obligation)

to contribute capital in the future and assist in maintaining their present percentage interest in the Company.

The maximum number of Options to be granted pursuant to the Bonus Issue is approximately 103.524.139 Options (subject to rounding). In the calculation of any Entitlement, fractions will be rounded up to the nearest whole number. The terms and conditions applicable to the Options are contained in the Option Terms in section 7 of the Prospectus.

Following shareholder approval obtained at the Company's general meeting on 31 May 2012, the Company issued 12,500,000 options to purchase Shares to the Placement Investors (Placement Options). The Placement Options have the same terms and conditions as the Option Terms and shall in conjunction with the Options form the class of security for which the Company shall be seeking Official Quotation on the ASX as a new class of quoted securities (see Section 4.4 below).

$4.2$ Use of funds raised

As previously described, it is intended that any funds raised from the exercise of the Options will be applied to the commercialisation and development of products in the pipeline, to meet the costs of ongoing and future product development projects and to provide working capital to meet operating expenses.

$4.3$ Allotment and Allocation

The Options will be allotted and granted as soon as practicable after the Record Date and otherwise in accordance with the Listing Rules. Holding statements in relation to the Options will be despatched to Shareholders as soon as practicable and in accordance with the indicative timetable at the start of this Prospectus.

It is your responsibility to determine your Option allocation prior to trading in the Options (if granted Official Quotation). If you sell any Options before you receive your holding statement or allotment advice, you do so at your own risk.

ASX Official Quotation $4.4$

The Company intends to apply for quotation of the Options (and the Placement Options) as an additional class of security in the Company on the Official List of the ASX 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.

4.5 Offers outside Australia

This Prospectus does not, and is not intended to, constitute a Bonus Issue in any place or jurisdiction in which, or to any person to whom, it would not be lawful to make such a Bonus Issue or to issue / distribute this Prospectus. The distribution of this Prospectus in jurisdictions outside Australia or New Zealand may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

It is the responsibility of non-Australian resident investors to obtain all necessary approvals for the allotment and issue of Options pursuant to this Prospectus and also the issue of any Shares as a consequence of their exercise of the Options.

4.6 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 Options

The Company will not issue option certificates to Shareholders. Shareholders who are allotted Options under this Prospectus will be provided with a holding statement which sets out the number of Options allotted to the Shareholder. Shareholders who elect to hold Options on the issuersponsored sub-register will be provided with a holding statement (similar to a bank account statement), which sets out the number of Options allotted to the Shareholder under this Prospectus. For Shareholders who elect to hold their Options on the CHESS sub-register, the Company will issue an advice that sets out the number of Options allotted to the Shareholder under this Prospectus. At the end of the month of allotment. CHESS, acting on behalf of the Company, will provide Option Holders with a holding statement that confirms the number of Options 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 Option Holder at the end of any subsequent month during which the balance of that Option Holder's holding of Option changes.

An Option Holder may request a holding statement at any other time. However, a charge may be made by the Share Registry for additional statements.

47 Taxation

The Directors do not consider that it is appropriate to provide Shareholders with advice regarding the taxation consequences of being granted Options under this Prospectus as it is not possible to provide a comprehensive summary of the possible taxation positions of all shareholders as each Shareholder'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 shareholders in respect of the issue. Shareholders should seek their own independent advice in relation to taxation implications of the issue

Prohibition on exceeding 20% voting power threshold $4.8$

You 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 exercising Options granted pursuant to this Prospectus. The Company expressly disclaims any responsibility for ensuring that you do not breach section 606 as a result of the exercise of the Options.

If you may be at risk of breaching section 606 as a result of the exercise of Options, the choices available to you include:

selling your Options, either on market (if the Options are granted Official Quotation) or off $\bullet$ market:
selling some or all of your Shares prior to exercising any Options held by you; or
$\bullet$ relying on another exemption from the takeovers prohibition in section 611 (such as the 3% creep exemption).

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 Shares following exercise of Options, you should seek professional advice before exercising Options.

4.9 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 Bonus Issue, 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.

4.10 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.

4.11 Enquiries

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

Telephone: 1 300 850 505

Telephone: +61 3 9415 5000

+61 3 9473 2500 Fax:

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.

5. Effect of the Bonus Issue on the Company

Under the Bonus Issue, up to approximately 103,524,139 Shares will issue upon the exercise of the Options if all Shareholders exercise all of their Options.

Upon completion of the Bonus Issue, the issued capital of the Company will comprise 414,096,557 Shares and 148,278,707 options to purchase Shares, assuming 103,524,139 Options (subject to rounding) are issued pursuant to this Prospectus. This Bonus Issue does not of itself constitute the issue of any Shares.

Please note that NO funds are raised by the Company in respect of the Bonus Issue. It is only where a Shareholder elects to exercise the Options that the Company will receive any funds. The current intention is that funds received on exercise of the Options would be applied for product commercialisation and for the general working capital requirements of the Company.

$5.1$ Effect on financial position of the Company

The financial impact on the Company, if all Options were exercised on or prior to their Expiry Date. would be to receive additional capital cash inflows of approximately \$4,141,000, before any costs associated with the exercise of those Options.

Pro-Forma Statement of Financial Position

The audit reviewed Statement of Financial Position as at 31 December 2011 and the unaudited Pro-Forma Statement of Financial Position as at 31 December 2011, 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 bonus options offered pursuant to the Offer in this Prospectus will be exercised in full on or prior to their expiry date of 30 April 2015.

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.

Audit Reviewed Statement of Financial Position and Pro-Forma Statement of Financial Position as at 31 December 2011.

	Audit Reviewed 31 December 2011	Pro-Forma Adjustments	Pro-Forma Unaudited 31 December 2011
	\$'000	\$'000	\$'000
ASSETS
Current Assets
Cash & cash equivalents	673	6,472	7,145
Trade & other receivables	105		105
Inventories	236		236
Other assets	111		111
Total Current Assets	1,125	6,472	7,597
Non-Current Assets
Property, plant and equipment	23		23
Intangible assets	1,461		1,461
Total Non-Current Assets	1,484		1,484
Total Assets	2,609	6,472	9,081
LIABILITIES
Current Liabilities
Trade & other payables	1,085		1,085
Provisions	3		3
Total Current Liabilities	1,088		1,088
Non-Current Liabilities
Convertible Secured Debenture		949	949
Total Non-Current Liabilities		949	949
Total Liabilities	1,088	949	2,037

	13
Net Assets	1,521	5,523	7,044
EQUITY
Contributed equity	28,732	5,523	34,255
Reserves	682		682
Accumulated losses	(27, 893)		(27, 893)
Total Equity	1,521	5,523	7,044

The above pro-forma unaudited Statement of Financial Position 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 2011 and the date of this Prospectus; 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.

Receipt of funds from Paladin Labs Inc. in respect of the initial drawdown of funds under the Convertible Secured Debenture (\$CAD 1.0 million) in January 2012	949
Issue of shares and receipt of funds in respect of tranches 1 and 2 issues to professional and sophisticated investors, as approved at the meeting of Shareholders held on 31 May 2012. Amount raised net of costs amounted to	940
Issue of shares to Shareholders under the Share Purchase Plan on 8 June 2012	442
Subtotal of net funds raised to date of this Prospectus	2,331

Amount to be raised by 30 April 2015, before costs, if all options issued under this Prospectus are exercised by that date	4,141

Effect on the capital structure of the Company $5.2$

The capital structure of the Company at, and immediately following, the date of issue of this Prospectus is as follows:

	Number of Securities	Option Exercise Price
Listed Securities
Fully paid ordinary shares on issue as at the date of this Prospectus	414,096,557
Listed options expiring 15 December 2013	2,752,230	\$0.12
Unlisted Securities
Options expiring 31 August 2012	2,460,000	\$0.10
Options expiring 31 May 2013	750,000	\$0.0945
Options expiring 30 June 2014	4,000,000	\$0.07
Options expiring 30 April 2015	12,500,000	\$0.04
Options expiring 30 November 2021	579,736	\$0.0497
Options expiring 17 January 2022	1,186,729	\$0.048

Convertible Debenture
Under the terms of the Convertible Debenture entered into with Paladin Labs Inc. in January 2012, Paladin has the right to convert the loan funds into fully paid ordinary shares in the Company no later than January 2015, as announced to the market on 16 January 2012.
The maximum number of shares that can be issued if the loan funds are fully converted into ordinary shares is:	20,525,873	\$0.0473

Potential effect on control of the Company $5.3$

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	59,164,094	14.30%
Capital Concerns Pty Limited	24,627,723	5.95%
(Logue Family Super Fund Account)

Neither the Bonus Issue, nor the exercise of Options, is expected to have a material effect on the control of the Company given the pro rata nature of the Bonus Issue, but this may vary depending on the number of Options traded and/or ultimately exercised. The exercise of the Options is still subject to the requirements under the Corporations Act relating to the 20% voting power threshold (see section 4.8 of this Prospectus).

6. Risk factors

$6.1$ Kev risks

Shareholders should be aware that receiving and ultimately exercising the Options (and the Shares issued on exercise) involves a number of risks. A number of the general risks associated with the holding of investment securities are set out below. The major risk associated with any investment is that due to Option (if listed) and Share price changes, Shareholders may experience minor or substantial fluctuations in the value of their investment in the Options prior to, and subsequent to, the last exercise date (namely 30 April 2015).

$6.2$ General risks

$(a)$ Key Management

The Directors are primarily responsible for overseeing the operations and the strategic management of the Company. The day-to-day technical operations of the Company are the responsibility of Joseph Baini (Executive Director and Chief Executive Officer). There can be no assurance that there will be no detrimental impact on the Company if one or more of the Directors or key executives resign.

General economic climate $(b)$

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

$(c)$ 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.

Speculative nature of investment $(d)$

The Options and any new Shares issued on the exercise of Options granted 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 safequards and appropriate systems and controls, but some are outside the control of the Company and cannot be mitigated. Accordingly, an investment in the Company as a result of exercise of an Option carries no guarantee with respect to the payment of dividends, return of capital or price at which Shares will trade. Similarly, no guarantee can be given as to the value of the Options, including if they are granted Official Quotation, the price at which they will trade.

The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company. The above factors, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of the Options granted pursuant to this Prospectus. You should consider that investment in the Company is speculative and should consult your professional adviser before deciding whether to sell or exercise any of the Bonus Options granted to you pursuant to this Prospectus.

6.3 Operational Risks

$(a)$ Development and Product Acceptance

In respect of products currently being developed by the Company, due to the uncertainty inherent in the individual product development cycle, any significant delays could cause the Company's operating results to fluctuate significantly. Accordingly, the development cycles associated with the new products and their optimisation to achieve market penetration are expected to be lengthy and subject to a number of significant risks, including Australian Therapeutic Goods Administration (TGA) and the United States Food and Drug Administration (FDA) approval, customers' preferences, the Company's potential strategic research partners' choices as to which types of projects to fund, the Company's competitors' developments and significant regulatory approvals. each of which is beyond the Company's control.

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.

Also the Company may not be successful in developing their products due to the Company's customers or strategic partners choosing to expend their resources on competing products to such a degree that it does not make economic sense for the Company to continue its research and development of certain products.

$(b)$ 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.

Dependence on Key Personnel $(c)$

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 for equity incentives to assist in retaining the key employees and consultants.

Technology and Intellectual Property $(d)$

Biopharmaceutical industries are characterised by companies aiming for rapid and continuing technological innovation. The Company's platform technology and expertise may be rendered obsolete or uneconomical by technological advances or entirely different approaches developed by one or more of the Company's competitors. Any new approaches or technologies developed by the Company's competitors may be more effective than those developed by the Company, which could mean that the Company may not be able to compete successfully with existing or potential competitors.

Whilst the Directors believe that the Company's intellectual property position is robust, it is possible that various licensing deals may be required in the future in respect of some products to ensure the Company has greater freedom to operate in the market place.

The Company's Directors are not presently aware of any fact, matter or circumstance by which any party may claim or be entitled to object to or challenge any of the Company's patents or intellectual property. These circumstances, however, do not reduce the importance of the foregoing considerations for investors

Strategic Partners $(e)$

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.

Terms and conditions of Options attaching to Shares $7₁$

Terms and conditions of Options $7.1$

Each Option entitles the Option Holder to subscribe for and be issued one Share in the Company on the following terms:

each Option is exercisable at any time up to and including the Expiry Date, namely 5.00 pm $\bullet$ AEST on 30 April 2015. Any Options not exercised by the Expiry Date will automatically lapse on the Expiry Date:
the Exercise Price for each Option (which is payable immediately on exercise) is \$0.04; $\bullet$
each Option may be exercised by the Option Holder giving written notice to the Company at $\bullet$ its registered office on or prior to the Expiry Date (Notice of Exercise):
the Notice of Exercise must specify the number of Options being exercised and must be $\bullet$ accompanied by a cheque, payable to the Company, for the total applicable Exercise Price payable by the Option Holder:
the Options may be exercised for part or all of the Options issued by giving Notice of $\bullet$ Exercise prior to the Expiry Date, provided that if the Options are exercised in part, they may only be exercised in multiples of at least 1,000 Options:
on receipt by the Company of the Notice of Exercise and payment of the Exercise Price, the $\bullet$ Company must, within the time period prescribed by the ASX Listing Rules:
o allot to the Option Holder one Share in the Company for each Option exercised by the Option Holder;
$\circ$ cause to be despatched to the Option Holder the relevant acknowledgement of issue as soon as is reasonably practicable; and
(if applicable) issue a new holding statement for the balance of the Options $\circ$ that remain unexercised;
shares allotted on the exercise of Options will rank equally in all respects with the then existing issued ordinary fully paid shares in the capital of the Company (except in respect to any dividends which shall have been declared but not yet distributed before the actual exercise of an Option) and will be subject to the provisions of the Constitution of the Company;
application to the ASX for listing of the Options as a separate class of securities will be $\bullet$ made within 7 days of the date of this Prospectus:
the Options do not entitle the Option Holder to vote at any meeting of shareholders; $\bullet$
the Options do not provide any entitlement to dividends paid to ordinary shareholders; $\bullet$
the Options are transferable by an Option Holder on written notice to the Company in such $\bullet$ form as the Company from time to time requires and where the Options are quoted, in accordance with the ASX Listing Rules;
in the event of a pro rata issue of Shares by the Company, the Exercise Price for each $\bullet$ Option will be adjusted in accordance with Listing Rule 6.22.2 of the ASX Listing Rules:
if any reorganisation (including consolidation, subdivision, reduction, return or cancellation) $\bullet$ of the issued capital of the Company occurs before the expiry of any Options, the number of Options to which each Option Holder is entitled or the Exercise Price of his or her Options or both must be reorganised in accordance with the ASX Listing Rules applying to a reorganisation at the time of the reorganisation;
an Option does not confer the right to participate in new issues of capital offered to holders $\bullet$ of Shares during the currency of the Options without exercising the Options. However, the Company will ensure that for the purpose of determining entitlements to any such issue, the record date will be at least 5 business days after a new issue or dividend payment is announced, giving Option Holders the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such new issue:
in the event of the liquidation of the Company, all unexercised Options will lapse;
to the extent that any of these Option Terms And Conditions are inconsistent with or $\bullet$ contrary to the ASX Listing Rules, the ASX Listing Rules provisions will prevail and these Option Terms And Conditions are deemed to incorporate the relevant ASX Listing Rules provisions as an amendment to these terms: and
these Terms and Conditions are governed by the laws of the State of Victoria. The parties submit to the non-exclusive jurisdiction of the courts of Victoria.

$7.2$ Rights attaching to Shares upon Exercise of Options

The Shares issued upon exercise of the Options 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 exercising an Option, the Option Holder 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:

each Shareholder entitled to vote may vote in person or by proxy, attorney or representative;
on a show of hands, every person present who is a Shareholder or a proxy, attorney or $\bullet$ representative of a Shareholder entitled to vote has one vote; and

on a poll, every person present who is a Shareholder or a proxy, attorney or representative $\bullet$ 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.

Dividend Rights $(c)$

While there is no quarantee 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.

Transfer of Shares $(e)$

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.

Variation of Rights $(f)$

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.

8. Additional information

$8.1$ Continuous disclosure and documents available for inspection

The Company is listed on the ASX and its Shares are quoted on the ASX under the ASX code: IMC.

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 29 September 2011, being the date of lodgement of the Company's annual financial report for the year ending 30 June 2011, to the date of lodgement of this Prospectus (including the half-year financial report lodged with ASIC for the period ending 31/12/2012), free of charge. A list of such documents is as follows:

Expiry of Unlisted 30 June 2012 Options (2 July 2012) ¢
Appendix 3B (29 June 2012)
Top 20 Shareholders (21 June 2012)
Change in Directors' interests (19 June 2012)
Appendix 3B Share Purchase Plan Allotment (19 June 2012)
Change in Directors shareholding R Aston (18 June 2012)
Finalisation of Share Purchase Plan (18 June 2012) $\bullet$
Allotment of Tranche 2 -708A Cleansing Notice (8 June 2012)
Expiry of Unlisted 31 May 2012 Options (6 June 2012)
Travelan application Canada (4 June 2012)
Initial Director's Interest Notice J Baini and R Aston (31 May 2012) $\bullet$
Results of EGM (31 My 2012) $\bullet$
Chairman's Address and Presentation to EGM (31 My 2012)
Appointment of Additional Directors (25 May 2012)
Change in substantial holding -Drill Investments Pty Ltd (24 May 2012)
Extension of SPP closing date (18 May 2012)
CEO Letter to Shareholders (17 May 2012)
Paladin submits Travelan for Regulatory Approval in Canada (16 May 2012) $\bullet$
Change in substantial holding Drill Investments Pty Ltd (14 May 2012)
Travelan Distribution in Singapore, Malaysia and Brunei (14 May 2012) $\bullet$
IMC Investor Presentation May 2012 (10 May 2012)
Travelan licensed to Thailand, Hong Kong, Cambodia Vietnam (10 May 2012) $\bullet$
Agreement with Synlait Milk for Hyperimmune requirements (7 May 2012);
Becoming a substantial holder Capital Concerns Pty Limited (3 May 2012);
Bonus Issue of New Options (3 May 2012);
Notice of General Meeting and Proxy Form (30 April 2012); $\bullet$
Share Purchase Plan Offer Document and Cleansing Notice (27 April 2012); ø
Cleansing Statement Tranche 1 Placement (27 April 2012);
Cleansing Statement Share Purchase Plan (24 April 2012);
Appendix 3B (23 April 2012);
Reinstatement to Official Quotation (23 April 2012);
Capital Raising announcement (23 April 2012);
Suspension from Official Quotation (20 April 2012);
Trading Halt Request (18 April 2012): $^{\circ}$
Trading Halt (18 April 2012);
Immuron appoints Joe Baini Chief Executive Officer (5 March 2012); $\bullet$
Half Yearly Report and Accounts (28 February 2012);
Shareholder Update February 2012 (23 February 2012);
Change of Director's Interest Notices (15 February 2012);
Initial and Final Directors Interest Notices (9 February 2012); $\bullet$
Clarification of terms of Debenture with Paladin Labs Inc. (9 February 2012); $\bullet$
Appointment of Dr Stewart Washer as Non-Executive Director (8 February 2012); $\bullet$
Immuron Announces Board Changes (8 February 2012);
Expiry of Unlisted 31 January 2012 Options (3 February 2012);
Immuron and Monash University to Collaborate on C. difficile (31 January 2012);
Appendix 3B (16 January 2012);
Cleansing Notice (16 January 2012);
Immuron finalises funding facility (16 January 2012); $\bullet$
IND cleared for NASH/Fatty Liver Phase IIb trials (10 January 2012); $\bullet$
Appendix 3B Issue of Options Executive Share Option Plan (20 December 2011);
Research agreement with Harvard Medical School (16 December 2011);
Appendix 3B (30 November 2011);
AGM Chairman's address, presentations and results of meeting (30 November 2011); $\bullet$
Travelan Licence Deal with Paladin Labs Inc. Canada (29 November 2011);
Change of Director's Interest Notice (8 November 2011); $\bullet$
Appendix 3B and top 20 share and option holder reports (8 November 2011);
Immuron submits NASH IND Application with FDA (7 November 2011);
Non-Renounceable Issue Shortfall (4 November 2011);
Notice of Annual General Meeting/Proxy Form (24 October 2011): and $\bullet$
Annual Report for Year Ended 30 June 2011 (29 September 2011). $\bullet$

Information excluded from continuous disclosure notices 8.2

As at the date of this Prospectus, there is no information that has not been disclosed under the continuous disclosure reguirements of the Listing Rules and which the Board considers that you or vour 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 Options.

8.3 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:

the formation or promotion of the Company; $(a)$
property acquired or proposed to be acquired by the Company in connection with $(b)$ its formation or promotion of the Bonus Issue; or
$(c)$ the Bonus Issue.

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 Bonus Issue.

$(a)$ Interests 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	Direct interest	Indirect interest
Professor Colin Chapman	1,530,080 Shares in Immuron Limited	Nil
Joe Baini	Nil	Shares and options are held in the name of eXec Factor Pty Ltd:
		950,000 ordinary shares.
		33,334 listed options expiring 15 December 2013
		750,000 unlisted options expiring 31 May 2013
Dr Elane Zelcer	329,910 Shares in Immuron Limited and 4,400 options expiring 15 December 2013	250,000 Shares in Immuron Limited registered in the name of Zelcer Superannuation Fund

Dr Stewart Washer	Nil				600,000 Shares in Immuron Limited held in the name of Dr S J Washer and Dr P Washer as trustees for The Washer Family Superannuation Fund
Roger Aston	200,000 Limited	Shares	-in	Immuron	Nil

$(b)$ Remuneration of Directors

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

Director	Remuneration
Professor Colin Chapman	\$62,500 per annum plus 9% superannuation
Dr Elane Zelcer	\$45,000 per annum plus 9% superannuation
Dr Stewart Washer	\$40,000 per annum plus 9% superannuation
Dr Roger Aston	\$40,000 per annum plus 9% superannuation
Joe Baini	Consulting fees of \$288,000 per annum, together with an incentive payment of \$50,000 for achieving certain objectives for the 2012 financial year.

8.4 Market prices of Shares

Since the Annual General Meeting of shareholders held on 3 November 2011, the respective share prices of the Company's shares (ASX code IMC) are as follows:

highest 5.4 cents per share
1.6 cents per share • Lowest

In respect of the listed options (ASX code IMCO), there has been no sales since the 30 November 2011 Annual General Meeting to the date of this Prospectus.

8.5 Restricted securities

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

8.6 Broker handling fees

No handling fees are payable in connection with the Bonus Issue.

8.7 Expenses of the Bonus Issue

The total expenses of the Bonus Issue are estimated to be approximately \$30,000 comprising ASIC lodgement fees, legal fees (see section 8.8 below), accounting fees, share registry fees and printing and other administrative expenses.

Middletons 8.8

Middletons will receive a time based fee of approximately \$12,000 (excluding GST and disbursements) in connection with legal advice provided to the Company in respect of the Bonus Issue and the preparation and verification of documentation in connection with the Bonus Issue.

8.9 Consents

Middletons has not caused or authorised the issue of this Prospectus, does not make or purport to make any statement in this Prospectus and takes no responsibility for any part of this Prospectus.

Computershare has not caused or authorised the issue of this Prospectus, does not make or purport to make any statement in this Prospectus and takes no responsibility for any part of this Prospectus.

8.10 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 Options 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 Options or Shares in the Company or dealing with an entitlement in this Bonus Issue.

8.11 Legal proceedings

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

8.12 Material Contracts

The Company has not entered into any material contracts other than those which have been the subject of ASX announcements referred to in this Prospectus.

8.13 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.

8.14 Further information

If you have any questions regarding the Bonus Issue, 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 03 8637 1107

Computershare Investor Services Pty Limited

Telephone: 1 300 850 505

Telephone: +61 3 9415 5000 +61 3 9473 2500 Fax:

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.

$9₁$ Authority of Directors

The Directors have made all reasonable enquiries 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 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 Options 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.

$5^h$ July 2012 Dated

Professor Colin Chapman Bv: Chairman

$10.$ 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:

ASX means ASX Limited 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:

Bonus Issue means the pro rata, non-renounceable offer to Shareholders as at the Record Date to apply for Options under this Prospectus on the basis of 1 Option for every 4 Shares held at an exercise price of \$0.04 per Option;

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;

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;

EGM Notice means the notice of General Meeting of the Company dated 24 April 2012, for the Shareholder meeting held on 31 May 2012;

Entitlement means entitlement of a Shareholder eligible to participate in the Bonus Issue;

Entitlement Ratio means the entitlement of Shareholders as at the Record Date to 1 Option for every 4 Shares held;

Exercise Price means \$0.04 per Option;

Expiry Date means 5:00pm AEST on 30 April 2015;

Issue means the issue of Options pursuant to this Prospectus;

Listing Rules means the listing rules of ASX:

Official List means the official list of ASX:

Official Quotation means official quotation of the Options on the Official List;

Option means an option to subscribe for one Share in the Company for the Exercise Price on or before the Expiry Date and issued under the terms set out in this Prospectus:

Option Holder means those parties holding Options to acquire Shares;

Option Terms means the terms and conditions of the Options, as specified in Section 7 above:

Placement Investors means those professional and sophisticated investors as described in resolutions 1, 2 and 3 of the EGM Notice, as approved by Shareholders on 31 May 2012;

Placement Options means 12,500,000 options to purchase Shares issued to the Placement Investors on 8 June 2012:

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 7:00 pm AEST on 23 July 2012:

Section means a section of this Prospectus;

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

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

Shareholder means a person who holds one or more Shares.