IMUGENE LIMITED — Interim / Quarterly Report 2016

Feb 28, 2016

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APPENDIX 4D

For the Half Year Ended 31 December 2015

Results for Announcement to the Market

Current Reporting Period - Half year ended 31 December 2015 Previous Reporting Period - Half year ended 31 December 2014

Revenues	Up	24.34%	to	$18,930
Loss after tax attributable to members	Up	1.74%	to	($1,032,607)
Net loss for theperiod attributable to members	Up	1.74%	to	($1,032,607)

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 2015 Annual Report for the year ended 30 June 2015. Net Tangible Asset per Security (cents per security) As at 31 December 2015 0.29 As at 31 December 2014 0.17 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 2015

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Corporate Directory .......................................................................................................................... 2 Directors’ Report ............................................................................................................................... 3 Auditor’s Independence Declaration ................................................................................................. 5 Consolidated Statement of Profit or Loss and Other Comprehensive Income ................................... 6 Consolidated Statement of Financial Position ................................................................................... 7 Consolidated Statement of Changes in Equity .................................................................................. 8 Consolidated Statement of Cash Flows ............................................................................................ 9 Notes to the Consolidated Financial Statements for the period ending 31 December 2015 ............ 10 Directors’ Declaration ...................................................................................................................... 19 Independent Review Report ........................................................................................................... 20

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Corporate Directory

Directors

Mr Paul Hopper - Executive Chairman Mr Charles Walker - Non-Executive Director Dr Axel Hoos - Non-Executive Director Dr Anton Uvarov - 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

Automic Registry Services Suite 1a, Level 1 7 Ventnor Avenue Perth, WA 6005 Australia Telephone: (61 8) 9324 2099 International: (61 8) 9321 2337

Securities Quoted

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

Australian Securities Exchange

• Ordinary Fully Paid Shares (Code: IMU) - Options (Code: IMUO)

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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 2015.

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 Non-Executive Director Dr Axel Hoos Non-Executive Director Dr Anton Uvarov Non-Executive Director Appointed: 5 January 2016 Former: Mr Otto Buttula Non-Executive Director Resigned: 15 January 2016 Company Secretaries Justyn Stedwell Company Secretary Phillip Hains Company Secretary & Chief Financial Officer (CFO)

Review and Results of Operations

The Company welcomed Leslie Chong as Chief Operating Officer in September 2015 and Anton Uvarov as a Non-Executive Director in January 2016.

Operations

Management are firmly focused on the development of the Mimotope program and the HER-Vaxx technology for the treatment of patients with Her- 2 + cancers including gastric and breast.

Detailed research and development continued across both areas under the direction of our Chief Scientific Officer, Professor Weidermann at the University of Vienna

During the period, the Company spent a total of $0.928m on its operations, which includes manufacturing, pre-clinical studies and overheads.

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Financial

During the period $3m was raised through the issuance of 400,000,000 new shares in the capital of the Company from new and existing sophisticated investors.

Funds will be directed to clinical development, manufacture and protection of the lead assets, the Mimotope technology and HER-Vaxx.

Outlook

The Mimotope technology announced in January 2016 has added significantly to the Company’s pipeline and prospects, and intensive work is underway in partnership with the University of Vienna Medical School to advance the program.

Management is closely focussed on dosing our first patient in the Her-Vaxx Phase 1b/2 gastric cancer trial.

The Board thanks our shareholders, management and the Scientific Advisory Board for their support of the Company and we look forward to a successful 2016.

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 Paul Hopper Executive Chairman Imugene Limited

Dated: This the 29[th] Day of February 2016

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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 2015, 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, 29 February 2016

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 2015

	31 December 2015 31 December 2014	31 December 2015 31 December 2014
		Note $ AUD $ AUD
	Revenue Total revenue 2 18,930 15,224 Other income 2 636,354 466,777 Expenses Business development (147,291) (99,268) Commercialisation expenses (13,348) (24,552) Corporate administration expenses (498,375) (511,778) Depreciation expense (488) - Foreign exchange gain/(loss) 23,126 (42,572) Marketing and promotion expenses (2,182) - Research and development expenses (1,049,333) (854,704)
	Loss before tax (1,032,607) (1,050,873) Income tax expense - -
	Net loss for theyear (1,032,607) (1,050,873)
	Other comprehensive income/ (expense)for theyear,net of tax - -
	Total comprehensive loss for theyear (1,032,607) (1,050,873)
	Loss per share for the year attributable to members of Imugene Ltd: Basic loss per share (cents per share) (0.08) (0.10) Diluted loss per share (cents per share) (0.08) (0.10)

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 2015

	31 December 2015 30 June 2015
	Note $ AUD $ AUD
	ASSETS Current Assets Cash and cash equivalents 3,724,719 1,956,992 Trade and other receivables 433,707 541,387 Other 58,397 16,584
	Total Current Assets 4,216,823 2,514,963 Non-Current Assets Property, plant and equipment 3,126 - Intangible assets 4 6,599,755 6,599,755
	Total Non-Current Assets 6,602,881 6,599,755
	TOTAL ASSETS 10,819,704 9,114,718
	LIABILITIES Current Liabilities Trade and other payables 323,640 317,456 Provisions 17,340 13,159 Other financial liabilities 5 - 66,650
	Total Current Liabilities 340,980 397,265 Non-Current Liabilities Other financial liabilities 5 985,450 985,450
	Total Non-Current Liabilities 985,450 985,450
	TOTAL LIABILITIES 1,326,430 1,382,715
	NET ASSETS 9,493,274 7,732,003
	EQUITY Contributed equity 6 30,407,225 27,682,224 Share-based payment reserve 7 1,035,018 966,141 Accumulated loss (21,948,969) (20,916,362)
	TOTAL EQUITY 9,493,274 7,732,003

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 2015

	Issued Capital	Share Based	Accumulated	Total
		Payment	Losses
		Reserve
Note	$ AUD	$ AUD	$ AUD	$ AUD
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-basepayment expense	-	199,597	-	199,597
Balance at 31 December 2014	27,709,801	977,395	(19,526,446)	9,160,750
Balance at 1 July 2015	27,682,224	966,141	(20,916,362)	7,732,003
Loss for the year	-	-	(1,032,607)	(1,032,607)
Other comprehensive income	-	-	-	-
Total comprehensive income/(loss) for the half year:	-	-	(1,032,607)	(1,032,607)
Transactions with Equity holders in their capacity as equity
holders:
Shares issued	3,000,000	-	-	3,000,000
Capital raising costs	(264,634)	-	-	(264,634)
Options issued1	(30,365)	30,365	-	-
Share-basepayment expense	20,000	38,512	-	58,512
Balance at 31 December 2015	30,407,225	1,035,018	(21,948,969)	9,493,274

1 Reclassification from contributed equity to share based payment reserve.

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 2015

	31 December 2015 31 December 2014
	$ AUD $ AUD
	Cash flows from operating activities Payments to suppliers and employees (1,702,493) (1,404,330) Interest received 18,930 15,224 Other(R&D Refund) 755,855 342,782
	Net cash inflows/(outflows) from operating activities (927,708) (1,046,324)
	Cash flows related to investing activities Payment for the purchase of intellectual property (66,650) (463,617) Payment for purchases of plant and equipment (3,614) -
	Net cash inflows/(outflows) from investing activities (70,264) (463,617)
	Cash flows related to financing activities Proceeds from issues of equity securities 3,000,000 3,583,500 Capital raisingcosts (264,634) (302,098)
	Net cash inflows/(outflows) from financing activities 2,735,366 3,281,402
	Net increase/(decrease) in cash and cash equivalents 1,737,394 1,771,461 Cash and cash equivalents at the beginning of the period 1,956,992 1,222,896 Effects of exchange rate changes on cash and cash equivalents 30,333 -
	Cash and cash equivalents at the end of the year 3,724,719 2,994,357

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 2015

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 2015, 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 2015 Annual Report for the year ended 30 June 2015 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 2015.

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 2015 the Group has included an item in other income of $416,367 to recognise this amount which relates to this period.

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 2015

2. Revenue / Expenses

	Consolidated
	31 December 2015 31 December 2014
Note	$ AUD $ AUD
Income Revenue Interest received Other income R&D Tax Refund Significant expenses included in net loss before tax Superannuation Share-based payment	18,930 15,224
	18,930 15,224
	636,354 466,777
	636,354 466,777
	(30,013) (15,780) (58,512) (199,597)

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Notes to the Consolidated Financial Statements for the period ending 31 December 2015

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 2015 31 December 2014
$ AUD $ AUD
Reportable segment revenue Revenue, including interest income, is disclosed below based on the reportable segment: Revenue from research, development and commercialisation 636,354 466,777 Revenue from other activities 18,930 15,224 655,284 482,001
	655,284 482,001
	Consolidated
	31 December 2015 31 December 2014
	$ AUD $ AUD
Reportable segment profit/ (loss) Profit/ (loss) are disclosed below based on the reportable segment: Profit/ (loss) from research, development and commercialisation (573,618) (511,747) Profit/ (loss) from other activities (458,989) (539,126) (1,032,607) (1,050,873)
	(1,032,607) (1,050,873)
	Consolidated
	31 December 2015 30 June 2015
	$ 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 Property, plant and equipment	6,599,755 7,135,623 3,724,719 1,956,992 492,104 22,103 3,126 -
	10,819,704 9,114,718
	Consolidated
	31 December 2015 30 June 2015
	$ 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	985,450 1,052,100 323,640 317,456 17,340 13,159
	1,326,430 1,382,715

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Notes to the Consolidated Financial Statements for the period ending 31 December 2015

4. Intangible Assets

	Consolidated
	31 December 2015 30 June 2015
Note	$ AUD $ AUD
In-process research and development (acquired) Biolife Closing cost	6,599,755 6,599,755
	6,599,755 6,599,755

5. Other Financial Liabilities

	Consolidated
	31 December 2015 30 June 2015
Note	$ AUD $ AUD
Current Amount owing - HER - Vaxx (i) Non-Current Expected future royalties payable - HER-Vaxx (ii)	- 66,650
	985,450 985,450
	985,450 985,450
	985,450 1,052,100

• (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 2015

6. Contributed Equity

Movements in equity during the half year ended 31 December 2015 and prior year are as follows:

	31 December 2015 30 June 2015
Note	No. $ AUD No. $ AUD
Ordinary shares (a) Options (b) Total at reporting date	1,732,134,739 30,407,225 1,329,912,516 27,651,859 371,177,356 - 57,000,000 30,365
	30,407,225 27,682,224

(a) Ordinary Shares

			6 months to		12 months to
			31 December		30 June
			2015		2015
	Note	No.	$ AUD	No.	$ AUD
At the beginning of the period		1,329,912,516	27,651,859	946,562,516	24,236,812
Share issued duringtheperiod	(i)	402,222,223	2,755,366	383,350,000	3,415,047
Total at reportingdate		1,732,134,739	30,407,225	1,329,912,516	27,651,859

• (i) Details of shares issued during the period

Issue price	Issue price
2015	Details Number $ AUD $ AUD
26/10/2015 Private placement to sophisticated investors 400,000,000 0.0075 3,000,000 26/10/2015 Shares issued to COO1 2,222,223 0.0090 20,000 Less capital raising costs (264,634)
402,222,223 2,755,366

• 1 Shares were issued to the COO as part of an employment service agreement. The share issue was approved by shareholders at 2015 AGM. Given the structure of the incentive, the number of shares was calculated at the closing price of the Company shares on the day prior to issue, up to $20,000.

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 2015

(b) Options

			31 December		30 June
			2015		2015
	Note	No.	$ AUD	No.	$ AUD
At the beginning of the period		57,000,000	30,365	50,000,000	5,000
Reclassification of share based options to share based payments		(57,000,000)	(30,365)	-	-
Options issued duringtheperiod	(i)	371,177,356	-	7,000,000	25,365
Total at reporting date		371,177,356	-	57,000,000	30,365

No options were exercised during the half year.

• (i) Details of options issued during the period

					Value at
					Grant date
2015	Details			Number	$AUD	$ AUD
9/11/2015	Listed shareholder options exercisable at $0.015, expire 31 March 20171			171,177,356		-
9/11/2015	Listed options exercisable March 20171		at $0.015, expire 31	200,000,000		-
				371,177,356		-

1 The general terms and conditions of the options were:

• 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.

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Notes to the Consolidated Financial Statements for the period ending 31 December 2015

7. Share-based payment reserve

	Consolidated	Consolidated
	31 December 2015 30 June 2015
Note	$ AUD $ AUD
Share-based payment reserve Opening balance Share based payment expense (a) Shares issued Reclassification of share based payment options from Contributed equity Expiration of options (b) Closing balance	966,141 966,003 38,512 199,253 - (199,115) 30,365 - - -
	1,035,018 966,141
	Consolidated
	31 December 2015
	Note	$ AUD
Movement in share options Opening balance Reclassification of share based options from Contributed equity Additions Expired Closing balance	(a) (b)	- 57,000,000 52,000,000 (50,000,000)
		59,000,000

(a) Options granted during the period

Date Granted	Number	Details	Vesting
26 October 2015	9,000,000	Issued to key management personnel	Options exercisable at $0.0125 on or before 14 September 2020 vesting on 30 June 2016
26 October 2015	9,000,000	Issued to key management personnel	Options exercisable at $0.015 on or before 14 September 2020 vesting on 14 September 2017
26 October 2015	9,000,000	Issued to key management personnel	Options exercisable at $0.0175 on or before 14 September 2020 vesting on 14 September 2018
26 October 2015	10,000,000	Issued to directors	Options exercisable at $0.015 on or before 26 October 2016 with a share price hurdle of $0.015
26 October 2015	10,000,000	Issued to directors	Options exercisable at $0.015 on or before 26 October 2016 with a transaction hurdle
26 October 2015	2,500,000	Issued to directors	Options exercisable at $0.0125 on or before 31 March 2017 with a patient recruitment hurdle
26 October 2015	2,500,000	Issued to directors	Options exercisable at $0.0175 on or before 31 March 2017 with apatient recruitment hurdle
Total	52,000,000

(b) Expiration of options

Options issued to the corporate advisor expired during the period.

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Notes to the Consolidated Financial Statements for the period ending 31 December 2015

8. Related Party Disclosure

The Group has no related party disclosures at reporting date.

9. Events Subsequent to Reporting Date

On the 5[th] January 2016, the Company announced the appointment of Dr Anton Uvarov as a Non-Executive Director.

On the 20[th] January 2016, the Company announced an extended partnership with The Medical University of Vienna to develop a Mimotope Immuno-Oncology Platform.

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

10. Contingencies

The Group has no contingent assets or liabilities at reporting date (2015: none).

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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 6 to 18 Error! Bookmark not defined. , 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 2015 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 Paul Hopper

Executive Chairman 29[th] February 2016 Melbourne, Australia

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The Rialto, Level 30 525 Collins St Melbourne Victoria 3000

Correspondence to: GPO Box 4736 Melbourne Victoria 3001

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 2015, 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 2015 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 2015 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 qualification to the conclusion expressed above, we draw attention to Note 1 in the financial report which indicates that consolidated entity incurred a net loss of $1,032,607 for the half-year ended 31 December 2015 and, as of that date, the consolidated entity and cash outflows from operating and investing activities equates to $997,972. These conditions, along with other matter as set forth in Note 1, indicate the existence of a material uncertainty which may cast 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, 29 February 2016