IMUGENE LIMITED — Interim / Quarterly Report 2015

Feb 26, 2015

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APPENDIX 4D

For the Half Year Ended 31 December 2014

Results for Announcement to the Market

Current Reporting Period - Half year ended 31 December 2014 Previous Reporting Period - Half year ended 31 December 2013

Revenues	Up	123.00%	to	$15,224
Loss after tax attributable to members	Down	(30.50%)	to	($1,050,873)
Net loss for theperiod attributable to members	Down	(30.50%)	to	($1,050,873)

Dividends (distribution)	Amount per Security	Franked Amount
		per Security
Fil diidd	/	/
na ven	na	na
Pi di id	/	/
revous corresponng pero	na	na
To be read in conjunction with the 2014 Annual Report for the year ended 30 June 2014. Net Tangible Asset per Security (cents per security) As at 31 December 2014 0.17 As at 31 December 2013 (0.001) Record date for determining entitlements to dividend n/a Explanation of the above information: Refer to the Directors' Report - Review of Operations.

2. Details of entities over which control has been gained or lost during the period

None

3. Details of individual and total dividends

None

4. Details of dividend reinvestment plans in operation.

None

5. Details of Associates and Joint Ventures

None

6. These accounts have been subject to review and there has been no qualification or dispute.

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ABN 99 009 179 551

Interim Financial Report for the Half Year Ended

31 December 2014

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Corporate Directory .......................................................................................................................... 2 Directors’ Report ............................................................................................................................... 3 Auditor’s Independence Declaration ................................................................................................. 6 Consolidated Statement of Profit or Loss and Other Comprehensive Income ................................... 7 Consolidated Statement of Financial Position ................................................................................... 8 Consolidated Statement of Changes in Equity .................................................................................. 9 Consolidated Statement of Cash Flows .......................................................................................... 10 Notes to the Consolidated Financial Statements for the period ending 31 December 2014 ............ 11 Independent Review Report ........................................................................................................... 20 Directors’ Declaration ...................................................................................................................... 22

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Corporate Directory

Directors

Mr Paul Hopper - Executive Chairman Mr Charles Walker - Managing Director and CEO Dr Axel Hoos - Non-Executive Director Mr Otto Buttula - Non-Executive Director

Company Secretary

Mr Justyn Stedwell Mr Phillip Hains

Registered and Principal Office

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

Share Register

Computershare Investor Services Pty Ltd Level 2, Reserve Bank Building 45 St Georges Terrace Perth, WA 6000 Australia Telephone: 1300 557 010 International: (61 8) 9323 2000 Facsimile: (61 8) 9323 2033

Patent Attorney

Davies Collison Cave 1 Nicholson Street Melbourne, VIC 3002 Australia

Auditor

Grant Thornton Audit Pty Ltd The Rialto, Level 30 525 Collins Street Melbourne VIC 3000 Australia

Bankers

National Australia Bank Level 2, 330 Collins Street Melbourne, VIC 3000 Australia

Securities Exchange Listing

Imugene Limited shares are listed on the Australian Securities Exchange (Symbol: IMU)

Website and Email

www.imugene.com Info@imugene.com

Securities Quoted

Australian Securities Exchange

• Ordinary Fully Paid Shares (Code: IMU)

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Directors’ Report

The Directors of Imugene Limited (“IMU”, “Imugene”, or “the Company”) and its controlled entities (“Group”) provide the following report in relation to the Company and the Group for the half year ended 31 December 2014.

Directors

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

Current: Mr Paul Hopper Executive Chairman Mr Charles Walker Managing Director and CEO Appointed: 30 January 2015 Dr Axel Hoos Non-Executive Director Mr Otto Buttula Non-Executive Director Appointed: 7 July 2014 Former: Dr Nicholas Ede Executive Director Resigned: 23 October 2014 Company Secretaries Justyn Stedwell Company Secretary Phillip Hains Company Secretary & Chief Financial Officer (CFO)

Review and Results of Operations

Imugene completed its transformation to an immune-oncology company. The Company welcomed Otto Buttula as a Non-Executive Director in July 2014 and Charles Walker as CEO in August 2014. The Imugene Board and management are firmly focused on the development of the Company’s HER-Vaxx technology for the treatment of patients with gastric cancer.

Operations

During the period, the Company spent a total of $1.046m on its operations, which includes manufacturing, scientific experimentation and overheads.

The Company began the quarter by appointing Mymetics SA to manufacture HER-Vaxx from its component sources. Manufacture is multi-faceted and the Company ensured the right partner to manufacture HER-Vaxx on time and at the highest quality was engaged. Mymetics SA was chosen as this company was best suited to get the job done. The process is ongoing, and during the period the Company invested $0.375m on this activity.

Scientifically the Company initiated more experiments with founder and Advisory Board member Professor Weidermann at the University of Vienna, in order to assist in the creation of background knowledge to support the IND application, as well as to gain any further insights into the HER-Vaxx technology. Professor

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Weidermann’s lab continues work on this and the Company expects to announce the results in the next few weeks. The Company invested $0.148m during the period on this activity.

Financial

One of the major activities during the period was a raising of $3.585m through the issuance of 358,350,000 new shares in the capital of the Company. $0.833m of this was raised by way of a share purchase plan (SPP) from our loyal shareholder base, and the balance of approximately $2.750m was raised from new and existing sophisticated investors, who were mostly clients of Imugene’s corporate advisor, Forrest Capital. The Company believes the success was due to the quality of the Company’s assets to attract the right investors into this fundraising, especially given challenging financial markets, and the Company appreciates the support shown from new and existing investors. The Company will continue to treat the acquired funds as a precious resource and to expend them only after careful thought, with the goal of returning many times the amount invested.

The Company is clear about the goals for the use of the new funds, the vast majority of which concern the clinical development, manufacture and protection of the lead asset HER-Vaxx, and the Company has a detailed list of milestones expected to achieve with the funds, which will be announced as they are completed.

Linguet

The Company announced in November 2014 that it will seek to divest Linguet, consistent with the Company’s focus on deriving value from the HER-Vaxx technology. The Company is in the early stages of discussions, and it is too early to offer any guidance as to the possibility and potential value we may be able to achieve from Linguet.

Outlook

Strategically the Company is developing HER-Vaxx to be a world leading pharmaceutical, useful in the treatment not only of HER-2 positive gastric cancer, but also other HER-2 positive cancers of which there are many, and to which HER-Vaxx could be applied. The Company is focusing its resources on HER-2 positive gastric cancer, as this is an HER-2 positive cancer which is less well served than, eg. HER-2 positive breast cancer, and for which robust trials are considerably more efficient in the expenditure of time and money. The Company is focused on conducting a robust and high standard clinical trial, which can be recognised globally. This will help develop a class leading drug, and attract commercial partners for further development and commercialisation of HER-Vaxx in this and other HER-2 positive cancers.

The Company thanks shareholders, new and old, for their support and look forward to executing the above plan, and to extracting significant value from an as yet unrecognised, but is nevertheless, truly world-class technology. The Company also recognises the contributions from Directors, Management and the Scientific Advisory Board to the Company in terms of their time, investment, and expertise.

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Auditor’s Independence Declaration

The Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001 is set out on the following page.

This Director’s Report has been issued following a resolution of the Directors pursuant to section 306 (3) of the Corporations Act 2001, for an on behalf of the Board;

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Mr Charles Walker Managing Director and CEO Imugene Limited

Dated: This the 27[h] Day of February 2015

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The Rialto, Level 30 525 Collins St Melbourne Victoria 3000

Correspondence to: GPO Box 4736 Melbourne Victoria 3001

T +61 3 8320 2222 F +61 3 8320 2200 E info.vic@au.gt.com W www.grantthornton.com.au

Auditor’s Independence Declaration To The Directors of Imugene Limited

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the review of Imugene Limited for the half-year ended 31 December 2014, I declare that, to the best of my knowledge and belief, there have been:

• a No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

• b No contraventions of any applicable code of professional conduct in relation to the review.

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

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M. A. Cunningham Partner - Audit & Assurance

Melbourne, 27 February 2015

Grant Thornton Audit Pty Ltd ACN 130 913 594

a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.

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Consolidated Statement of Profit or Loss and Other Comprehensive Income For the half year ended 31 December 2014

	31 December 2014 31 December 2013	31 December 2014 31 December 2013
		Note $ AUD $ AUD
	Revenue Total revenue 2 15,224 6,827 Other income 2 466,777 - Expenses Business development (99,268) (54,261) Commercialisation expenses (24,552) (12,747) Corporate administration expenses (511,778) (339,966) Fair value adjustment to financial liability - 247,960 Foreign exchange gain/(loss) (42,572) (7,996) Impairment expenses - (1,217,157) Research and development expenses (854,704) (134,738)
	Loss before tax 2 (1,050,873) (1,512,078) Income tax expense - -
	Net loss for theyear (1,050,873) (1,512,078)
	Other comprehensive income/ (expense)for theyear,net of tax - -
	Total comprehensive loss for theyear (1,050,873) (1,512,078)
	Loss per share for the year attributable to members of Imugene Ltd: Basic loss per share (cents per share) (0.10) (0.35) Diluted loss per share (cents per share) (0.10) (0.35)

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

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Consolidated Statement of Financial Position

As at 31 December 2014

	31 December 2014 30 June 2014
	Note $ AUD $ AUD
	ASSETS Current Assets Cash and cash equivalents 2,994,357 1,222,896 Trade and other receivables 649,444 524,053 Non-current assets classified as held for sale 4 274,093 - Other 35,465 10,678
	Total Current Assets 3,953,359 1,757,627 Non-Current Assets Intangible assets 5 6,599,755 6,873,848
	Total Non-Current Assets 6,599,755 6,873,848
	TOTAL ASSETS 10,553,114 8,631,475
	LIABILITIES Current Liabilities Trade and other payables 197,273 229,218 Provisions 1,237 17,966 Other financial liabilities 6 66,650 449,845 Liabilities directly associated with non-current assets classified as held for sale 4 141,754 -
	Total Current Liabilities 406,914 697,029 Non-Current Liabilities Other financial liabilities 6 985,450 1,202,204
	Total Non-Current Liabilities 985,450 1,202,204
	TOTAL LIABILITIES 1,392,364 1,889,233
	NET ASSETS 9,160,750 6,732,242
	EQUITY Issued capital 7 27,709,801 24,241,812 Share-based payment reserve 9 977,395 966,003 Accumulated loss (19,526,446) (18,475,573)
	TOTAL EQUITY 9,160,750 6,732,242

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

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Consolidated Statement of Changes in Equity

For the half year ended 31 December 2014

	Issued Capital	Share Based	Accumulated	Total
		Payment	Losses
		Reserve
Note	$ AUD	$ AUD	$ AUD	$ AUD
Balance at 1 July 2013	17,280,072	966,003	(16,359,609)	1,886,466
Loss for the year	-	-	(1,512,078)	(1,512,078)
Other comprehensive income	-	-	-	-
Total comprehensive income/(loss) for the half
year:	-	-	(1,512,078)	(1,512,078)
Transactions with Equity holders in their capacity as equity
holders:
Shares issued	7,165,985	-	-	7,165,985
Capital raisingcosts	(204,245)	-	-	(204,245)
Balance at 31 December 2013	24,241,812	966,003	(17,871,687)	7,336,128
Balance at 1 July 2014	24,241,812	966,003	(18,475,573)	6,732,242
Loss for the year	-	-	(1,050,873)	(1,050,873)
Other comprehensive income	-	-	-	-
Total comprehensive income/(loss) for the half
year:	-	-	(1,050,873)	(1,050,873)
Transactions with Equity holders in their capacity as equity
holders:
Shares issued	3,583,500	-	-	3,583,500
Capital raising costs	(303,716)	-	-	(303,716)
Shares/options issued	188,205	(188,205)	-	-
Share-basedpayment expense	-	199,597	-	199,597
Balance at 31 December 2014	27,709,801	977,395	(19,526,446)	9,160,750

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

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Consolidated Statement of Cash Flows

For the half year ended 31 December 2014

	31 December 2014 31 December 2013
	$ AUD $ AUD
	Cash flows from operating activities Payments to suppliers and employees (1,404,330) (559,803) Interest received 15,224 6,827 Other(R&D Refund) 342,782 -
	Net cash inflows/(outflows) from operating activities (1,046,324) (552,976)
	Cash flows related to investing activities Payment for the purchase of intellectual property (463,617) (65,000) Acquisition of subsidiary, net of cash acquired - 5,797
	Net cash inflows/(outflows) from investing activities (463,617) (59,203)
	Cash flows related to financing activities Proceeds from issues of equity securities 3,583,500 2,600,000 Capital raisingcosts (302,098) (88,745)
	Net cash inflows/(outflows) from financing activities 3,281,402 2,511,255
	Net increase/(decrease) in cash and cash equivalents 1,771,461 1,899,076 Cash and cash equivalents at the beginningof theperiod 1,222,896 565,629
	Cash and cash equivalents at the end of the year 2,994,357 2,464,705

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

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Notes to the Consolidated Financial Statements for the period ending 31 December 2014

1. Summary of significant accounting policies

Statement of compliance

These financial statements are general purpose financial statements for the half-year reporting period ended 31 December 2014, which have been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 ‘Interim Financial Reporting’.

Basis of preparation

This half year report does not include full disclosures of the type normally included in an Annual Report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the Group.

Accordingly, this financial report should be read in conjunction with the 2014 Annual Report for the year ended 30 June 2014 and any public announcements made by Imugene Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

New Accounting Standards

There are no new accounting standards or interpretations that affect the financial position of the Company to be adopted this reporting period. All accounting policies adopted are consistent with the most recent Annual Financial Report for the year ended 30 June 2014.

Going concern

Some of the risks inherent in the development of pharmaceutical product include the uncertainty of patent protection and proprietary rights, whether patent applications and issued patents will offer adequate protection to enable product development or may infringe intellectual property rights of other parties, and obtaining the necessary drug clinical regulatory authority approvals. Also a particular project may fail the research and the clinical development process through lack of efficacy or safety, or maybe stopped or abandoned due to strategic imperatives including an assessment that the projects will not deliver a sufficient return on investment or have been superseded by newer competitive products or technologies. There is a risk that the Group will be unable to find suitable development or commercial partners for its projects, and that these arrangements may not generate a material return for the Group.

Based on current budget forecast assumptions, the Group has sufficient funds to meet current commitments and to pay its debts when they fall due for a period of 12 months from signing the financial report. Additional funds will need to be accessed however to progress the Group’s research & development programs. The ability of the Group to successfully access additional capital, and the amount of additional funds required is dependent on the outcome of its product research & development programs.

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Notwithstanding the material uncertainty pertaining to the ability of the Group to continue to access additional capital, the financial statements have been prepared on a going concern basis. Accordingly the financial statements do not include adjustments relating to the recoverability and classification of recorded asset amounts, or the amounts and classification of liabilities that might be necessary should the Group not continue as a going concern.

R&D Tax Incentives

The Groups’ research and development activities are eligible under an Australian Government tax incentive for eligible expenditure from 1 July 2011. Management has assessed these activities and expenditure to determine which are likely to be eligible under the incentive scheme. For the six month period to 31 December 2014 the Group has included an item in other income of $402,323 to recognise this amount which relates to this period. If an amendment to the tax law is passed reducing the refundable tax offset rate by 1.5%, the amount recognised in other income for the six month period to 31 December 2014 would reduce by $13,411.

Share-based Payments

The value attributed to share options issued is an estimate calculated using an appropriate mathematical formula based on an option pricing model. The choice of models and the resultant share option value require assumptions to be made in relation to the likelihood and timing of meeting the conditions of the shares and the value and volatility of the price of the shares.

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Notes to the Consolidated Financial Statements for the period ending 31 December 2014

2. Revenue / Expenses

	Consolidated
	31 December 2014 31 December 2013
Note	$ AUD $ AUD
Income Revenue Interest received Other income R&D Tax Refund Significant expenses included in net loss before tax Impairment of intangible assets Superannuation Share-based payment (i – ii)	15,224 6,827
	15,224 6,827
	466,777 -
	466,777 -
	- (1,217,157) (15,780) - (199,597) -

(i) Under employment service agreement , an expense is recognised for two tranches of shares issued during the period (refer to note 7), and an expense to recognise additional two tranches that are subject to specified share price hurdles to be issued at a future date.

• (ii) Includes the issue of 2.5 million unlisted options to Mymetics SA as per the service agreement. Refer to note 8 for further detail.

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Notes to the Consolidated Financial Statements for the period ending 31 December 2014

3. Segment Information

Management has determined, based on the reports reviewed by the chief operating decision maker that are used to make strategic decisions, that the Group has one reportable segment being the research, development and commercialisation of health technologies.

		Consolidated	Consolidated
31	December	2014	31 December 2013
	**$ **	AUD	$ AUD

Consolidated	Consolidated
31 December 2014 31 December 2013
$ AUD $ AUD
Reportable segment revenue Revenue, including interest income, is disclosed below based on the reportable segment: Revenue from research, development and commercialisation 466,777 - Revenue from other activities 15,224 6,827 482,001 6,827
	482,001 6,827
	Consolidated
	31 December 2014 31 December 2013
	$ AUD $ AUD
Reportable segment profit/ (loss) Profit/ (loss) are disclosed below based on the reportable segment: Profit/ (loss) from research, development and commercialisation (511,747) (201,746) Profit/ (loss) from other activities (539,126) (1,310,332) (1,050,873) (1,512,078)
	(1,050,873) (1,512,078)
	Consolidated
	31 December 2014 30 June 2014
	$ AUD $ AUD
Reportable segment assets Assets are disclosed based on the reportable segment: Asset from research, development and commercialisation Assets from other activities: Cash and cash equivalents Other assets	6,873,848 6,873,848 2,994,357 1,222,896 684,909 534,731
	10,553,114 8,631,475
	Consolidated
	31 December 2014 30 June 2014
	$ AUD $ AUD
Reportable segment liabilities Liabilities are disclosed based on the reportable segment: Liabilities from research, development and commercialisation Liabilities from other activities: Trade and other payables Other liabilities	1,193,854 1,652,049 197,273 229,218 1,237 17,966
	1,392,364 1,899,233

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Notes to the Consolidated Financial Statements for the period ending 31 December 2014

4. Non-Current Assets Classified as Held for Sale & Associated Liabilities

	Consolidated
	31 December 2014 30 June 2014
Note	$ AUD $ AUD
Assets held for sale Intangible asset - Linguet (i) Liabilities associated with Assets held for sale Expected future royalties payable - Linguet (i)	274,093 -
	274,093 -
	141,754 -
	141,754 -

• (i) On 28 November 2014, the Company announced their intention to divest the Linguet™drug delivery technology, the Company will focus on developing its class leading immune-oncology programme, HER-Vaxx for gastric cancer. A buyer for the asset is currently being sought. The intangible asset being sold has an associated liability.

The above non-current asset classified as held for sale and associated liabilities form part of the research, development and commercialisation segment per note 3.

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Notes to the Consolidated Financial Statements for the period ending 31 December 2014

5. Intangible Assets

	Consolidated
	31 December 2014 30 June 2014
Note	$ AUD $ AUD
Patents, licenses and other rights Biolife (i) Linguet (ii) Closing cost	6,599,755 6,599,755 - 274,093
	6,599,755 6,873,848

• (i) Acquired on 20 December 2013 as part of the Biolife acquisition.

• (ii) Reclassified as non-current asset held for sale, for further detail refer to note 4.

6. Other Financial Liabilities

	Consolidated
	31 December 2014 30 June 2014
Note	$ AUD $ AUD
Current Amount owing - HER - Vaxx (i) Non-Current Expected future royalties payable - Linguet Expected future royalties payable - HER-Vaxx (ii) Amount owing - HER-Vaxx	66,650 449,845
	- 141,754 985,450 985,450 - 75,000
	985,450 1,202,204
	1,052,100 1,652,049

• (i) Represents the amounts owing to Biolife Science Forschungs-und Entwicklungsges m.b.HH (BSFE) for the ‘HER-Vaxx’ intellectual property. These amounts consist of the cash components of the respective intellectual property agreements.

• (ii) Represents fair value estimate of royalties payable to BSFE on commercial income arising from Her-Vaxx. The amount has been estimated based the implied value of the intangible as referenced by the recent purchase.

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Notes to the Consolidated Financial Statements for the period ending 31 December 2014

7. Issued Capital

Movements in equity during the half year ended 31 December 2014 and prior year are as follows:

	31 December 2014 30 June 2014
Note	No. $ AUD No. $ AUD
Ordinary shares (a) Options (b) Total at reporting date	1,329,912,516 27,690,346 946,562,516 24,236,812 52,500,000 19,455 50,000,000 5,000
	27,709,801 24,241,812

(a) Ordinary Shares

		6 months to 31	December 2014	12 months to 30 June 2014	12 months to 30 June 2014
	Note	No.	$ AUD	No.	$ AUD
At the beginning of the period		946,562,516	24,236,812	376,162,516	17,275,072
Share issued duringtheperiod	(i)	383,350,000	3,453,534	570,400,000	6,961,740
Total at reportingdate		1,329,912,516	27,690,346	946,562,516	24,236,812

(i) Details of shares issued during the period

			Issue
			price $
2014	Details	Number	AUD	$ AUD
5/11/2014	Private placement to sophisticated investors	210,000,000	0.010	2,100,000
15/12/2014	Private placement to sophisticated investors	15,000,000	0.010	150,000
15/12/2014	Share Purchase Plan	83,350,000	0.010	833,500
15/12/2014	Private placement to sophisticated investors	50,000,000	0.010	500,000
15/12/2014	Shares issued to CEO1	12,500,000	0.007	86,875
15/12/2014	Shares issued to CEO1	12,500,000	0.007	86,875
	Less capital raising costs			(303,716)
		383,350,000		3,453,534

1 Shares, financed by an interest free loan, were issued at $0.012 to the CEO as part of an employment service agreement. The share issue was approved by shareholders at 2014 AGM. Given the structure of the incentive, the shares were valued under an option pricing model and the value at grant date was $0.007 per share.

Rights of each type of shares:

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held. On a show of hands every holder of ordinary shares present at a meeting or by proxy, is entitled to one vote. Upon a poll every holder is entitled to one vote per share held.

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Notes to the Consolidated Financial Statements for the period ending 31 December 2014

8. Options

		31	December 2014		30 June 2014
	Note	No.	$ AUD	No.	$ AUD
At the beginning of the period		50,000,000	5,000	50,000,000	5,000
Options issued during the period	(i)	2,500,000	14,455	-	-
Total at reportingdate		52,500,000	19,455	50,000,000	5,000

No options were exercised during the half year.

• (i) Details of options issued during the period

Value at Grant date	Value at Grant date
2014	Details Number $AUD $ AUD
15/12/2014 Unlisted supplier options (IMUAL) exercisable at $0.025, expire 14 July 2019 * 2,500,000 0.006 14,455
2,500,000 14,455

• The general terms and conditions of the options were:

• Life of 5 years from date of contract

• No dividends or voting rights attached

• Exercise price set at a premium to share price at date of entitlement

• Vested at issue

• All shares allotted upon exercise of Options will upon allotment rank pari passu in all respects with other shares.

9. Share-based payment reserve

	Consolidated
	31 December 2014 30 June 2014
Note	$ AUD $ AUD
Share-based payment reserve Opening balance Share based payment expense Options issued (i) Closing Balance	966,003 966,003 199,597 - (188,205) -
	977,395 966,003

(i) Includes the issue of 2.5 million unlisted options to Mymetics SA as per the service agreement, and 25 million shares issued to the CEO under employment service agreement.

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Notes to the Consolidated Financial Statements for the period ending 31 December 2014

10. Related Party Disclosure

The Group has no related party disclosures at reporting date.

11. Events Subsequent to Reporting Date

No significant events have occurred since reporting date that has not been disclosed elsewhere in this report.

12. Contingencies

The Group has no contingent assets or liabilities at reporting date (2013: none).

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Correspondence to: GPO Box 4736 Melbourne Victoria 3001

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The Rialto, Level 30 525 Collins St Melbourne Victoria 3000

Independent Auditor’s Review Report To the Members of Imugene Limited

T +61 3 8320 2222 F +61 3 8320 2200 E info.vic@au.gt.com W www.grantthornton.com.au

We have reviewed the accompanying half-year financial report of Imugene Limited (“Company”), which comprises the consolidated financial statements being the statement of financial position as at 31 December 2014, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, notes comprising a statement or description of accounting policies, other explanatory information and the directors’ declaration of the consolidated entity, comprising both the Company and the entities it controlled at the half-year’s end or from time to time during the half-year.

Directors’ responsibility for the half-year financial report

The directors of Imugene Limited are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such controls as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express a conclusion on the consolidated half-year financial report based on our review. We conducted our review in accordance with the Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Imugene Limited consolidated entity’s financial position as at 31 December 2014 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Imugene Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

Grant Thornton Audit Pty Ltd ACN 130 913 594

a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.

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A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we complied with the independence requirements of the Corporations Act 2001.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Imugene Limited is not in accordance with the Corporations Act 2001, including:

• a giving a true and fair view of the consolidated entity’s financial position as at 31 December 2014 and of its performance for the half-year ended on that date; and

• b complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001.

Emphasis of matter

Without qualifying our opinion, we draw attention to Note 1 in the financial report which indicates that consolidated entity incurred a net loss of $1,050,873 for the half-year ended 31 December 2014 and, as of that date, the consolidated entity and cash outflows from operating and investing activities equates to $1,509,941. These conditions, along with other matters as set forth in Note 1, indicate the existence of a material uncertainty which may cast significant doubt about the company’s ability to continue as a going concern and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business, and at the amounts stated in the financial report.

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

M. A. Cunningham Partner - Audit & Assurance

Melbourne, 27 February 2015

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Directors’ Declaration

The Directors of the Company declare that:

• a. The financial statements and the accompanying notes set out on pages 7 to 19, are in accordance with the Corporations Act 2001, including:

• i. complying with Accounting Standards and the Corporations Regulations 2001 and other mandatory professional reporting requirements; and

• ii. giving a true and fair view of the Consolidated Entity’s financial position as at 31 December 2014 and of its performance for the half year ended on that date.

• b. 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.

• c. the financial statements and accompanying notes are prepared in compliance with Accounting Standard AASB 134 ‘Interim Financial Reporting’.

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

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Mr Charles Walker

Managing Director and CEO

27[h] February 2015

Melbourne, Australia

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