IMUGENE LIMITED - Proxy Solicitation & Information Statement 2012

IMUGENE LIMITED ACN 009 179 551

NOTICE OF GENERAL MEETING

TIME : 10:00am DATE : Tuesday, 17 July 2012 PLACE : Level 31, 77 St Georges Terrace, Perth, Western Australia

The Independent Expert has concluded that the transaction related to the Acquisition the subject of the Resolutions outlined in this Notice of General Meeting is FAIR AND REASONABLE to Shareholders.

All Shareholders should refer to the Independent Expert’s Report enclosed with this Notice of General Meeting.

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on (+61 8) 9440 2660.

CONTENTS PAGE

Business of the Meeting (setting out the proposed resolutions)	3
Explanatory Statement (explaining the proposed resolutions)	5
Glossary	15
Schedule 1 – Terms and Conditions of Options	16
Proxy Form	17
Independent Expert’s Report	Enclosed

IMPORTANT INFORMATION

TIME AND PLACE OF MEETING

Notice is given that the general meeting of the Shareholders to which this Notice of Meeting relates will be held at 10:00am on Tuesday 17 July 2012 at:

Level 31, 77 St Georges Terrace, Perth, Western Australia

YOUR VOTE IS IMPORTANT

The business of the General Meeting affects your shareholding and your vote is important.

VOTING ELIGIBILITY

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the General Meeting are those who are registered Shareholders at 5:00 pm (WST) (7:00 pm Sydney time) on Friday 13 July 2012.

VOTING IN PERSON

To vote in person, attend the General Meeting at the time, date and place set out above.

VOTING BY PROXY

To vote by proxy, please complete and sign the enclosed Proxy Form and return by the time and in accordance with the instructions set out on the Proxy Form.

In accordance with section 249L of the Corporations Act, members are advised that:

each member has a right to appoint a proxy;
the proxy need not be a member of the Company; and
a member who is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the member appoints 2 proxies and the appointment does not specify the proportion or number of the member’s votes, then in accordance with section 249X(3) of the Corporations Act, each proxy may exercise one-half of the votes.

New sections 250BB and 250BC of the Corporations Act came into effect on 1 August 2011 and apply to voting by proxy on or after that date. Shareholders and their proxies should be aware of these changes to the Corporations Act, as they will apply to this General Meeting. Broadly, the changes mean that:

if proxy holders vote, they must cast all directed proxies as directed; and
any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed.

Further details on these changes is set out below.

Proxy vote if appointment specifies way to vote

Section 250BB (1) of the Corporations Act provides that an appointment of a proxy may specify the way the proxy is to vote on a particular resolution and, if it does :

the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way (i.e. as directed); and
if the proxy has 2 or more appointments that specify different ways to vote on the resolution – the proxy must not vote on a show of hands; and
if the proxy is the chair of the meeting at which the resolution is voted on – the proxy must vote on a poll, and must vote that way (i.e. as directed); and
if the proxy is not the chair – the proxy need not vote on the poll, but if the proxy does so, the proxy must vote that way (i.e. as directed).

Transfer of non-chair proxy to chair in certain circumstances

Section 250BC of the Corporations Act provides that, if:

an appointment of a proxy specifies the way the proxy is to vote on a particular resolution at a meeting of the Company's members; and
the appointed proxy is not the chair of the meeting; and
at the meeting, a poll is duly demanded on the resolution; and
either of the following applies:
the proxy is not recorded as attending the meeting;
the proxy does not vote on the resolution,

the chair of the meeting is taken, before voting on the resolution closes, to have been appointed as the proxy for the purposes of voting on the resolution at the meeting.

BUSINESS OF THE MEETING

AGENDA

ORDINARY BUSINESS

1. RESOLUTION 1 – ISSUE OF SHARES AND ACQUISTION OF A RELEVANT INTEREST

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for the purposes of Section 611 (Item 7) of the Corporations Act and for all other purposes, approval is given for:

(a) the issue of up to 100,000,000 Shares to Consegna Group Limited and
(b) the acquisition of a relevant interest in the issued voting shares of the Company by Consegna Group Limited in excess of the threshold prescribed by Section 606(1) of the Corporations Act,

on the terms and conditions set out in the Explanatory Statement accompanying this Notice.”

Expert’s Report : Shareholders should carefully consider the report prepared by the Independent Expert for the purposes of the Shareholder approval required under Section 611 (Item 7) of the Corporations Act. The Independent Expert’s Report comments on the fairness and reasonableness of the transaction the subject of Resolution 1 to the non-associated Shareholders in the Company.

Voting Exclusion : The Company will disregard any votes cast on this resolution by:

(a) the persons proposing to make the acquisition and their associates; and
(b) a party to the transaction and any associates of those persons.

However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

2. RESOLUTION 2 – SHARE PLACEMENT

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for the purpose of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Directors to allot and issue up to 100,000,000 Shares on the terms and conditions set out in the Explanatory Statement.”

person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

3. RESOLUTION 3 – ISSUE OF ADVISOR OPTIONS

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for the purpose of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Directors to allot and issue up to 50,000,000 Options on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed and any associates of those persons. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

DATED: 6 JUNE 2012

BY ORDER OF THE BOARD

JULIE FOSTER COMPANY SECRETARY

EXPLANATORY STATEMENT

This Explanatory Statement has been prepared to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions which are the subject of the business of the Meeting.

1. BACKGROUND

1.1 Acquisition of New Intellectual Property – Linguet[TM ]

On 1 May 2012, the Company announced it had entered into a conditional agreement ( Acquisition Agreement ) to acquire 100% of the issued share capital of drug delivery technology company, Lingual Consegna Pty Ltd ( Lingual Consegna ) from Consegna Group Limited ( Consegna ) ( Acquisition ).

Lingual Consegna owns the rights to a family of patents and patent applications that protect the core drug delivery platform technology, Linguet [TM ] ( Linguet ) that has application in the human and animal pharmaceutical and nutraceutical industries.

1.2 Terms of Acquisition

The Acquisition Agreement is subject to, but not limited to, the completion of a capital raising of not less than $1,000,000 ( Placement ) and all necessary shareholder and regulatory approvals. Settlement of the Acquisition will occur 5 business days following satisfaction of these conditions ( Settlement ).

The Placement will raise $1,000,000 through the issue of 100,000,000 Shares at 1 cent per Share to clients of Forrest Capital and CPS Securities to assist in the funding of the expanded Imugene drug delivery technologies. Further details of the Placement are set out in Section 3 below.

The consideration for the Acquisition is the issue of 100,000,000 fully paid ordinary shares in the Company ( Shares ) to Consegna.

The Acquisition Agreement also contains standard warranties and representations on behalf of Consegna typical for an agreement of this nature and otherwise contains terms and conditions typical for an agreement of this nature.

1.3 The Linguet[TM] Technology Platform

Linguet is a tablet placed under the tongue or the buccal cavity in the mouth (cheek) and allowed to dissolve releasing the active drug, which is absorbed immediately into the blood stream via the mucosa of the mouth. The drug thereby bypasses the gastrointestinal tract and is able to reach its target more rapidly and in the process significantly lower side effects.

Linguet would be targeted for those drugs and nutraceuticals that for example (but not limited to):

(a) show poor bioavailability (e.g. hormones such as progesterone and some vitamins); and
(b) cause gastrointestinal irritation (e.g. pain medications such as Nurofen).

Benefits therefore include improved patient compliance and management (for example, target those populations who find it difficult to swallow oral medicines), a reduction in the need to overmedicate resulting in lower side effects, and a reduction in cost associated with the lower concentrations of active drug required in the sub-lingual or buccal presentation. The reduction can be in the order of tenfold which would significantly and positively affect cost of goods.

Linguet can be used in a wide range of therapeutic and nutraceutical applications enabling a rich hunting ground to create world-class products that meet the commercial need. Such breadth of choice allows for a de- risked business model.

1.4 Commercialisation

The Linguet vision is to create revenue generating commercial solutions within the pharmaceutical and healthcare global markets using Linguet as a multifunction platform. Linguet is at the stage of its development where entry to market would be simple and fast with a low cash burn, and compared to traditional drug delivery platforms, an ability to target low hanging fruit that do not need significant clinical investment to require regulatory approval. In addition, several existing drugs are due to come off patent at which point cheaper versions of the same product will flood the market. Drug delivery enhanced generics command a strong premium over standard generics. In the top 200 products, drug delivery enhanced products are three times the price of standard products.

Linguet offers an enhancement to existing drugs extending their lifecycle. The development program will use outsource partners to minimise internal overheads enabling maximum effort in generating products and early revenues. Hence the business model works on optimising Linguet value by targeting products rather than pushing technology.

The Linguet business plan has positive advantages with a simple strategy to retain knowhow and intellectual property to provide solutions to current market opportunities such as:

use of known molecules that have known and proven regulatory routes;
low cost development with rapid and identifiable commercialization programs; and
opportunities within Nutritional, Over the Counter and Prescription Medicine markets.

Following proof of principle, the Company will license and possibly sell individual products in the near term such as generic drugs and nutraceuticals (specifically vitamins), while larger value inflection events from the platform will come later after further iterations of validation (and building the intellectual property as it is captured).

1.5 Board Appointment

On completion of the Acquisition it is proposed, Mr Fabio Pannuti, currently the Managing Director of Consegna will join the Company’s board as an Executive Director.

Mr Pannuti has extensive experience building companies across a number of industries including the biomedical and drug delivery markets, HR and labour hire, telephony, property development, mineral resources, agriculture and construction. He has had direct experience in many mergers and acquisitions including building, at the time, the largest advertising and outdoor media agency in Eastern Europe. Many of the assets have been listed on public markets on North American, European and Australian exchanges.

1.6 Management Team

The Company will engage with the Consegna Group scientific team to assist in the development of the Linguet™ technology. The Consegna Group team have realised over a billion dollars in revenues and value from both transaction and product commercialisation activities over their individual careers.

Specifically driving the Linguet development program will be the newly appointed Dr Nicholas Ede (Consegna’s Chief Technology Officer) and UK based Mr Steve Martin (Lingual Consegna’s Chief Scientific Officer) and Rod Tomlinson (Chairman, Scientific Committee).

2. RESOLUTION 1 – ISSUE OF SHARES AND ACQUISTION OF A RELEVANT INTEREST

2.1 General

As outlined in Section 1, the Company has entered into the Acquisition Agreement pursuant to which the Company will, subject to Shareholder approval, allot and issue 100,000,000 Shares to Consegna in consideration for the Acquisition ( Consideration Shares ). Consegna is not a related party of the Company.

The Consideration Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares.

Resolution 1 seeks Shareholder approval for the allotment and issue of the Consideration Shares to Consegna as well as the acquisition of a relevant interest in the issued voting shares of the Company by Consegna in excess of the threshold prescribed by Section 606(1) of the Corporations Act by virtue of the issue of the Consideration Shares.

Approval pursuant to ASX Listing Rule 7.1 is not required for the issue of the Consideration Shares proposed by Resolution 1 as approval is being obtained under Item 7 of Section 611 of the Corporations Act. Accordingly, the issue of Consideration Shares to Consegna will not be included in the 15% calculation of the Company’s annual placement capacity pursuant to ASX Listing Rule 7.1.

The Corporations Act and ASIC Regulatory Guide 74 set out a number of regulatory requirements which must be satisfied. These are summarised below.

2.2 Item 7 of Section 611 of the Corporations Act

Pursuant to Section 606(1) of the Corporations Act, a person must not acquire a relevant interest in issued voting shares in a listed company if the person acquiring the interest does so through a transaction in relation to securities entered into by or on behalf of the person and because of the transaction, that person’s or someone else’s voting power in the company increases:

(a) from 20% or below to more than 20%; or
(b) from a starting point that is above 20% and below 90%.

The voting power of a person in a body corporate is determined in accordance with Section 610 of the Corporations Act. The calculation of a person’s voting power in a company involves determining the voting Shares in the company in which the person and the person’s associates have a relevant interest.

A person ( second person ) will be an “associate” of the other person ( first person ) if:

(a) the first person is a body corporate and the second person is:
(i) a body corporate the first person controls;
(ii) a body corporate that controls the first person; or
(iii) a body corporate that is controlled by an entity that controls the person;
(b) the second person has entered or proposed to enter in a relevant agreement with the first person for the purpose of controlling or influencing the composition of the Company’s board or the conduct of the Company’s affairs; and
(c) the second person is a person with whom the first person is acting or proposed to act, in concert in relation to the Company’s affairs.

A person has a relevant interest in securities if they:

(a) are the holder of the securities;
(b) have the power to exercise, or control the exercise of, a right to vote attached to the securities; or
(c) have power to dispose of, or control the exercise of a power to dispose of, the securities.

It does not matter how remote the relevant interest is or how it arises. If two or more people can jointly exercise one of these powers, each of them is taken to have that power.

2.3 Item 7 of Section 611 of the Corporations Act

(a) from 20% or below to more than 20%; or
(b) from a starting point that is above 20% and below 90%.

The voting power of a person in a body corporate is determined in accordance with Section 610 of the Corporations Act. The calculation of a person’s voting power in a company involves determining the voting shares in the company in which the person and the person’s associates have a relevant interest.

A person ( second person ) will be an “associate” of the other person ( first person ) if:

(a) the first person is a body corporate and the second person is:
(i) a body corporate the first person controls;
(ii) a body corporate that controls the first person; or
(iii) a body corporate that is controlled by an entity that controls the first person;
(b) the second person has entered or proposed to enter in a relevant agreement with the first person for the purpose of controlling or influencing the composition of the Company’s board or the conduct of the Company’s affairs; and
(c) the second person is a person with whom the first person is acting or proposed to act, in concert in relation to the Company’s affairs.

Pursuant to Section 608(1) of the Corporations Act, a person has a “relevant interest” in securities if they:

(a) are the holder of the securities;
(b) have the power to exercise, or control the exercise of, a right to vote attached to the securities; or
(c) have power to dispose of, or control the exercise of a power to dispose of, the securities.

It does not matter how remote the relevant interest is or how it arises. If two or more people can jointly exercise one of these powers, each of them is taken to have that power.

Pursuant to Section 608(3) of the Corporations Act, a person is deemed to have a “relevant interest” in securities that a company has if their voting power in the company is above 20% or they control the company.

At completion of the Acquisition, Consegna will be issued with a total of 100,000,000 Consideration Shares which will result in Consegna acquiring a relevant interest in the issued voting shares of the Company of greater than 20% (assuming only the Shares contemplated by this Notice are issued and no Options exercised). This acquisition is in excess of the threshold prescribed by Section 606(1) of the Corporations Act.

Item 7 of Section 611 of the Corporations Act provides an exception to the prohibition in Section 606(1) of the Corporations Act, whereby a person may acquire a relevant interest in a company’s voting shares with the approval of the shareholders of that company.

Accordingly, the Company seeks Shareholder approval under Item 7 of Section 611 of the Corporations Act for the issue of the Consideration Shares to Consegna as well as the acquisition of a relevant interest in the issued voting shares of the Company by Consegna in excess of the threshold prescribed by Section 606(1) of the Corporations Act by virtue of the issue of the Consideration Shares.

2.4 Specific information required by Item 7 of Section 611 of the Corporations Act & ASIC Regulatory Guide 74

The following information is required to be provided to Shareholders under ASIC Regulatory Guide 74 and the Corporations Act in respect of obtaining approval pursuant to Item 7 of Section 611 of the Corporations Act.

The identity of the acquirer and their associates and any person who will have a relevant interest in the securities to be acquired

The acquirer is Consegna.

Consegna does not have any other associates and no other person will have a relevant interest in the Consideration Shares to be acquired.

Full particulars (including the number and percentage) of the securities to which Consegna is or will be entitled immediately before and after the Acquisition AND the maximum extent of the increase in Consegna’s voting power in the Company (including its associates) as a result of the Acquisition.

Consegna Event (and its associates) No. of Shares (% of voting power) held 0 as at the date of this Notice (0%) (Total Shares = 143,637,220) No. of Shares (% of voting power) held after the Acquisition (and all other Share 100,000,000 issues contemplated by this Notice) (29.10%) (Total Shares = 343,637,220) No. of Shares (% of voting power) held on a fully diluted basis (including all other 100,000,000 Share and Option issues contemplated by this Notice) (25.40%) (Total Shares = 393,637,220)

The identity, associations (with Consegna and any of its associates) and qualifications of any person who it is intended will become a Director if Shareholders approve the Acquisition.

As noted in Section 1.5, the Company has agreed to procure the appointment of a nominee of Consegna, Mr Fabio Pannuti as an executive director of the Company following settlement of the Acquisition.

It is proposed Mr Graham Dowland, the current Non Executive Chairman of the Company, will resign as a director of the Company following settlement of the Acquisition.

The usual requirements for retirement by rotation and re-election in accordance with ASX Listing Rules and the Constitution will apply to the new Directors.

A statement of the acquirer’s intentions regarding the future of the Company if Shareholders agree to the Acquisition.

Other than as disclosed elsewhere in this Explanatory Statement, at the date of this Notice of Meeting the Company understands that Consegna does not intend to:

(a) make any significant changes to the business of the Company;
(b) inject further capital into the Company;
(c) make any changes to the future employment of the present employees of the Company;
(d) transfer any property between the Company and Consegna or any person associated with any of them;
(e) otherwise redeploy the fixed assets of the Company; or
(f) change significantly the financial or dividend policies of the Company.

Further details of the Acquisition are set out throughout this Explanatory Statement. Shareholders are also referred to the Independent Expert’s Report.

2.5 Reasons for the Acquisition

Advantages

The Directors are of the view that the following non-exhaustive list of advantages may be relevant to a Shareholder’s decision on how to vote on Resolution 1:

(a) the Independent Expert has assessed the Acquisition to be fair and reasonable;
(b) capital will be raised as part of the Acquisition;
(c) the Acquisition provides an opportunity for the Company to diversify and expand its current business operations; and
(d) the absence of alternative offers.

Disadvantages

The Directors are of the view that the following non-exhaustive list of disadvantages may be relevant to a Shareholder’s decision on how to vote on Resolution 1:

(a) current Shareholders will have their interests in the Company diluted; and
(b) the Acquisition will result in a transfer of control of the Company to Consegna but the Independent Expert has assessed that no premium for control will be paid.

2.6 Recommendations of Directors

The Directors do not have any personal interests in the outcome of Resolution 1 and recommend that Shareholders vote in favour of the Resolution as they consider the proposed issue of Consideration Shares to Consegna to be in the best interests of Shareholders for the following reasons:

(a) after assessment of the advantages and disadvantages referred to in Section 2.5; and
(b) the Independent Expert has determined the issue of the Consideration Shares to Consegna to be fair and reasonable to the non-associated Shareholders.

2.7 Independent Expert’s Report

The Independent Expert's Report prepared by RSM Bird Cameron Corporate Pty Ltd sets out a detailed examination of the proposed Acquisition to enable nonassociated Shareholders to assess the merits and decide whether to approve the issue of Consideration Shares to Consegna.

To the extent that it is appropriate, the Independent Expert’s Report sets out further information with respect to the Acquisition and concludes that the issue of the Consideration Shares to Consegna is fair and reasonable to the nonassociated Shareholders.

Shareholders are urged to carefully read the Independent Expert’s Report to understand the scope of the report, the methodology of the valuation and the sources of information and assumptions made.

3. RESOLUTION 2 – SHARE PLACEMENT

3.1 General

Resolution 2 seeks Shareholder approval for the allotment and issue of up to 100,000,000 Shares at an issue price of $0.01 per Share to raise up to $1,000,000 ( Placement ).

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue during any 12 month period any equity securities, or other securities with rights to conversion to equity (such as an option), if the number of those securities exceeds 15% of the number of securities in the same class on issue at the commencement of that 12 month period.

The effect of Resolution 2 will be to allow the Directors to issue the Placement Shares during the period of 3 months after the General Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

3.2 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the Placement:

(a) the maximum number of Shares to be issued is 100,000,000;
(b) the Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that allotment will occur on the same date;
(c) the issue price will be $0.01 per Share;
(d) the Shares will be allotted and issued to sophisticated and professional investor clients of Forrest Capital and CPS Securities. None of these subscribers are related parties of the Company;
(e) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares; and
(f) the Company intends to use the funds raised from the Placement towards funding of the expanded Imugene drug delivery technologies and general working capital.

4. RESOLUTION 3 – ISSUE OF ADVISOR OPTIONS

4.1 General

Resolution 3 seeks Shareholder approval for the allotment and issue of up to 50,000,000 Options at an issue price of 0.01 cent per Option ( Advisor Options ).

The Company has engaged the services of Forrest Capital and CPS Securities to assist in management of the Placement ( Advisors ). The Company has agreed to issue the Advisor Options to the Advisors for management of the Placement and associated corporate advice.

Neither of the Advisors are related parties of the Company.

A summary of ASX Listing Rule 7.1 is set out in Section 3.1 above.

The effect of Resolution 3 will be to allow the Directors to issue the Advisor Options during the period of 3 months after the General Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

4.2 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the Advisor Options:

(a) the maximum number of Advisor Options to be granted is 50,000,000;
(b) the Advisor Options will be issued no later than 3 months after the date of the General Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that allotment will occur on the same date;
(c) the Advisor Options will be issued for 0.01 cents per Advisor Option;
(d) the Advisor Options will be allotted and issued to Forrest Capital and CPS Securities (or their nominees), none of which are related parties of the Company;
(e) the Advisor Options will be issued on the terms and conditions set out in Schedule 1; and
(f) the funds raised from the issue of the Advisor Options will be towards general working capital.

5. ENQUIRIES

Shareholders are requested to contact the Company Secretary, on (+61 8) 9440 2660 if they have any queries in respect of the matters set out in these documents.

GLOSSARY

$ means Australian dollars.

ASIC means the Australian Securities and Investments Commission.

ASX means ASX Limited.

ASX Listing Rules means the Listing Rules of ASX.

Acquisition Agreement means the share sale agreement between the Company and Consegna Group Limited dated 1 May 2012.

Board means the current board of directors of the Company.

Business Day means Monday to Friday inclusive, except New Year’s Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any other day that ASX declares is not a business day.

Company means Imugene Limited (ACN 009 179 551).

Constitution means the Company’s constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Explanatory Statement means the explanatory statement accompanying the Notice.

General Meeting or Meeting means the meeting convened by the Notice.

Notice or Notice of Meeting or Notice of General Meeting means this notice of general meeting including the Explanatory Statement and the Proxy Form.

Option or Advisor Option means an option to acquire a Share with the terms and conditions set out in Schedule 1.

Optionholder means a holder of an Option.

Proxy Form means the proxy form accompanying the Notice.

Resolutions means the resolutions set out in the Notice of Meeting, or any one of them, as the context requires.

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

Shareholder means a holder of a Share.

WST means Western Standard Time as observed in Perth, Western Australia.

SCHEDULE 1 – TERMS AND CONDITIONS OF ADVISOR OPTIONS

The Options entitle the holder to subscribe for Shares on the following terms and conditions:

(a) Each Option gives the Optionholder the right to subscribe for one Share.
(b) Each Option will expire at 5.00pm (WST) on 31 December 2015 ( Expiry Date ). An Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.
(c) Subject to paragraph (k), the amount payable upon exercise of each Option will be $0.02 ( Exercise Price ).
(d) The Options held by each Optionholder may be exercised in whole or in part, and if exercised in part, multiples of 1,000 must be exercised on each occasion.
(e) An Optionholder may exercise their Options by lodging with the Company, before the Expiry Date:
(f) An Exercise Notice is only effective when the Company has received the full amount of the Exercise Price in cleared funds.
(i) a written notice of exercise of Options specifying the number of Options being exercised; and
(ii) a cheque or electronic funds transfer for the Exercise Price for the number of Options being exercised;

( Exercise Notice ).

(g) Within 10 Business Days of receipt of the Exercise Notice accompanied by the Exercise Price, the Company will allot the number of Shares required under these terms and conditions in respect of the number of Options specified in the Exercise Notice.
(h) The Options are not transferable except with the prior written consent of the board of directors of the Company.
(i) All Shares allotted upon the exercise of Options will upon allotment rank pari passu in all respects with other Shares.
(j) The Company will not apply for quotation of the Options on ASX. However, the Company will apply for quotation of all Shares allotted pursuant to the exercise of Options on ASX within 10 Business Days after the date of allotment of those Shares.
(k) If at any time the issued capital of the Company is reconstructed, all rights of an Optionholder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.
(l) There are no participating rights or entitlements inherent in the Options and Optionholders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options without exercising the Options.
(m) An Option does not confer the right to a change in Exercise Price or a change in the number of underlying securities over which the Option can be exercised.

==> picture [596 x 16] intentionally omitted <==

Imugene Limited Financial Services Guide and Independent Expert’s Report 6 June 2012

We have concluded that the Proposed Transaction is FAIR AND REASONABLE to shareholders not associated with the Proposed Transaction.

RSM Bird Cameron Corporate Pty Ltd 8 St Georges Terrace Perth WA 6000 GPO Box R1253 Perth WA 6844 T +61 8 9261 9100 F +61 8 9261 9102 www.rsmi.com.au

Financial Services Guide

RSM Bird Cameron Corporate Pty Ltd ABN 82 050 508 024 (RSM Bird Cameron Corporate Pty Ltd or ‘we’ or ‘us’ or ‘ours’) as appropriate) has been engaged to issue general financial product advice in the form of a report to be provided to you.

In the above circumstances we are required to issue to you, as a retail client, a Financial Services Guide (FSG). This FSG is designed to help retail clients make a decision as to their use of the general financial product advice and to ensure that we comply with our obligations as financial services licensees.

This FSG includes information about:

who we are and how we can be contacted;
the services we are authorised to provide under our Australian Financial Services Licence (AFSL) No 255847;
remuneration that we and/or our staff and any associates receive in connection with the general financial product advice;
any relevant associations or relationships we have; and
our complaints handling procedures and how you may access them.

Financial services we are licensed to provide

We hold an AFSL which authorises us to provide financial product advice in relation to:

deposit and payment products limited to:
(a) basic deposit products;
(b) deposit products other than basic deposit products.
interests in managed investments schemes (excluding investor directed portfolio services); and
securities (such as shares and debentures).

We provide financial product advice by virtue of an engagement to issue a report in connection with a financial product of another person. Our report will include a description of the circumstances of our engagement and identify the person who has engaged us. You will not have engaged us directly but will be provided with a copy of the report as a retail client because of your connection to the matters in respect of which we have been engaged to report.

Any report we provide is provided on our own behalf as a financial services licensee authorised to provide the financial product advice contained in the report.

General financial product advice

In our report we provide general financial product advice, not personal financial product advice, because it has been prepared without taking into account your personal objectives, financial situation or needs.

You should consider the appropriateness of this general advice having regard to your own objectives, financial situation and needs before you act on the advice. Where the advice relates to the acquisition or possible acquisition of a financial product, you should also obtain a product disclosure statement relating to the product and consider that statement before making any decision about whether to acquire the product.

RSM Bird Cameron Major Offices in: Corporate Pty Ltd Perth, Sydney, ABN 82 050 508 024 Melbourne, AFS Licence No 255847 Adelaide and Canberra

RSM Bird Cameron Corporate Pty Ltd is beneficially owned by the Directors of RSM Bird Cameron. RSM Bird Cameron is an independent member firm of RSM International, an affiliation of independent accounting and consulting firms. RSM International is the name given to a network of independent accounting and consulting firms each of which practices in its own right. RSM International does not exist in any jurisdiction as a separate legal entity.

Benefits that we may receive

We charge fees for providing reports. These fees will be agreed with, and paid by, the person who engages us to provide the report. Fees will be agreed on either a fixed fee or time cost basis.

Except for the fees referred to above, neither RSM Bird Cameron Corporate Pty Ltd, nor any of its directors, employees or related entities, receive any pecuniary benefit or other benefit, directly or indirectly, for or in connection with the provision of the report.

Remuneration or other benefits received by our employees

All our employees receive a salary.

Referrals

We do not pay commissions or provide any other benefits to any person for referring customers to us in connection with the advice that we are licensed to provide.

Associations and relationships

RSM Bird Cameron Corporate Pty Ltd is beneficially owned by the partners of RSM Bird Cameron, a large national firm of chartered accountants and business advisers. Our directors are partners of RSM Bird Cameron Partners.

From time to time, RSM Bird Cameron Corporate Pty Ltd, RSM Bird Cameron Partners, RSM Bird Cameron and / or RSM Bird Cameron related entities may provide professional services, including audit, tax and financial advisory services, to financial product issuers in the ordinary course of its business.

Complaints resolution

Internal complaints resolution process

As the holder of an Australian Financial Services Licence, we are required to have a system for handling complaints from persons to whom we provide financial product advice. All complaints must be in writing, addressed to The Complaints Officer, RSM Bird Cameron Corporate Pty Ltd, P O Box R1253, Perth, WA, 6844.

When we receive a written complaint we will record the complaint, acknowledge receipt of the complaint within 15 days and investigate the issues raised. As soon as practical, and not more than 45 days after receiving the written complaint, we will advise the complainant in writing of our determination.

Referral to external dispute resolution scheme

A complainant not satisfied with the outcome of the above process, or our determination, has the right to refer the matter to the Financial Ombudsman Service (FOS). FOS is an independent company that has been established to provide free advice and assistance to consumers to help in resolving complaints relating to the financial services industry.

Further details about FOS are available at the FOS website or by contacting them directly via the details set out below.

Financial Ombudsman Service GPO Box 3 Melbourne VIC 3001 Toll Free: 1300 78 08 08 Facsimile: (03) 9613 6399 Email: [email protected]

Contact details

You may contact us using the details set out at the top of our letterhead on page 1 of this FSG.

Independent Expert’s Report

TABLE OF CONTENTS Page	TABLE OF CONTENTS Page
1.	Introduction ................................................................................................................................................5
2.	Summary and Conclusion ..........................................................................................................................7
3.	Summary of Proposed Transaction ...........................................................................................................9
4.	Purpose of this Report .............................................................................................................................11
5.	Profile of Imugene ....................................................................................................................................13
6.	Profile of Consegna Group Limited ..........................................................................................................18
7.	Profile of Lingual Consegna Pty Ltd .........................................................................................................21
8.	Overview of the biotechnology Industry ...................................................................................................25
9.	Valuation Approach ..................................................................................................................................27
10.	Valuation of Imugene (pre Proposed Transaction) ..................................................................................30
11.	Valuation of Lingual Consegna ................................................................................................................34
12.	Valuation (post Proposed Transaction) ....................................................................................................35
13.	Is The Proposed Transaction Fair? ..........................................................................................................37
14.	Is The Proposed Transaction Reasonable?.............................................................................................38

Appendix 1 - Declarations and Disclaimers

Appendix 2 - Sources of Information

Direct Line: (08) 9261 9447 Email: [email protected]

AJG/ID/SB/JUMO

6 June 2012

The Directors Imugene Limited Level 20, Allendale Square 77 St Georges Terrace PERTH WA 6000

Dear Directors

Independent Expert’s Report

1. Introduction

1.1. This report has been prepared to accompany the Notice of General Meeting and Explanatory Statement for Shareholders for the General Meeting of Imugene Limited (Imugene or the Company) to be held on 17 July 2012 at which Shareholder approval will be sought for Resolutions 1, 2 and 3, which give rise to the Proposed Transaction.

Resolution 1 – Issue of shares and acquisition of a relevant interest

“ To consider, and if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

“That, for the purposes of Section 611 (Item 7) of the Corporations Act and for all other purposes, approval is given for:

(a) the issue of up to 100,000,000 Shares to Consegna Group Limited; and
(b) the acquisition of a relevant interest in the issued voting shares of the Company by Consegna Group Limited in excess of the threshold prescribed by Section 606(1) of the Corporations Act,

on the terms and conditions set out in the Explanatory Statement accompanying this Notice.”

Resolution 2 – Share placement

“ To consider, and if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

Resolution 3 – Issue of advisor options

“ To consider, and if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

1.2. The Directors of Imugene have requested that RSM Bird Cameron Corporate Pty Ltd (RSMBCC), being independent and qualified for the purpose, express an opinion as to whether Resolution 1 is fair and reasonable to shareholders not associated with the Proposed Transaction (the non-associated shareholders).
1.3. Whilst we have not been requested to provide an opinion as to whether Resolution 2 and Resolution 3 are fair and reasonable to the non-associated shareholders, a condition precedent of the Share Sale Agreement (Acquisition Agreement) between Imugene and Consegna Group Limited (Consegna) is that Imugene has successfully raised $1,000,000 at a minimum price of $0.01 per share (Resolution 2).
1.4. In addition Resolution 3 seeks shareholder approval for the allotment and issue of up to 50,000,000 options at an issue price of $0.01 per option to Forrest Capital Pty Ltd and Cunningham Peterson Sharbanee Securities Pty Ltd for management of the placement and associated corporate advice. The options are exercisable at $0.02.
1.5. In assessing whether Resolution 1 is fair and reasonable to the non-associated shareholders we have considered whether the Proposed Transaction as a whole, comprising Resolutions 1, 2 and 3, is fair and reasonable to the non-associated shareholders.

2. Summary and conclusion

2.1. In our opinion, and for the reasons set out in Sections 13 and 14 of this report, the Proposed Transaction is Fair and Reasonable to the non-associated shareholders of Imugene.
2.2. Unless otherwise noted, all amounts in this report are expressed in Australian dollars.

Fairness

2.3. In order to assess the fairness of the Proposed Transaction, we have valued a share in Imugene prior to and immediately after the Proposed Transaction to determine whether a Non-Associated Shareholder would be better or worse off should the Proposed Transaction be approved. Our assessed values are summarised in the table below.

	Value per Share	Ref Low Value High Value
Value of a Imugene share pre Proposed Transaction Value of a Imugene share post Proposed Transaction		$ $
		10.3 0.011 0.011 12.3 0.016 0.017
Table 1: Valuation Summary (undiluted basis)
	Value per Share	Ref Low Value High Value
Value of a Imugene share pre Proposed Transaction Value of a Imugene share post Proposed Transaction		$ $
		10.3 0.011 0.011 12.5 0.016 0.017

Table 2: Valuation Summary (fully diluted basis)

2.4. We have determined the value of an Imugene share after the Proposed Transaction (on an undiluted and a fully diluted basis) to be greater than the value prior. Accordingly, in the absence of any other relevant information, we consider the Proposed Transaction to be fair to the non-associated shareholders.

Reasonableness

2.5. In accordance with the guidance provided by the Australian Securities and Investment Commission (ASIC), as the Proposed Transaction is fair, it is considered to be reasonable. Notwithstanding this we have also considered the following factors relevant to the reasonableness of the Proposed Transaction:
The future prospects of the Company if the Proposed Transaction does not proceed; and
Any other commercial advantages and disadvantages to the Non-Associated Shareholders as a consequence of the Proposed Transaction proceeding.
2.6. We consider key advantages of the Proposed Transaction are:
the Proposed Transaction is fair;
additional capital of $1 million will be raised as part of the Proposed Transaction;

the opportunity for non-associated shareholders participate in any diversification and expansion of current business operations; and
an increase in the net assets of the Company.
2.7. In our opinion, the key disadvantages of the Proposed Transaction are:
the dilution of the non-associated shareholders’ interests in Imugene from 100% to 41.8% immediately following the Proposed Transaction, and to 36.5% on a fully diluted basis; and
transfer of control in the Company to Consegna.
2.8. We are not aware of any alternative proposals which may provide a greater benefit to the Non-Associated Shareholders of Imugene at this time.
2.9. In our opinion, the position of the Non-Associated Shareholders of Imugene if the Proposed Transaction is approved is more advantageous than the position if it is not approved. Therefore, in the absence of any other relevant information and/or a superior offer, we consider that the Proposed Transaction is reasonable for the Non-Associated Shareholders of Imugene.

3. Summary of Proposed Transaction

3.1. On 1 May 2012, the Company announced to the Australian Securities Exchange Limited (ASX) that it had entered into a conditional agreement (the acquisition agreement) to acquire 100% of the issued share capital of drug delivery technology company, Lingual Consegna Pty Ltd (Lingual Consegna) from Consegna Group Limited (Consegna) (the acquisition).
3.2. Lingual Consegna owns the rights to a family of patents and patent applications that protect the core drug delivery platform technology, Linguet™ (Linguet) which has application in the human and animal pharmaceutical and nutraceutical industries.
3.3. Consideration for the acquisition is to be the issue of 100,000,000 fully paid ordinary shares in the Company (the consideration shares) to Consegna.
3.4. The acquisition agreement is subject to, but not limited to, the completion of a capital raising of not less than $1,000,000 at a minimum price of $0.01 per share (the placement) and all necessary shareholder and regulatory approvals. Settlement of the acquisition will occur 5 business days following satisfaction of these conditions (the settlement).
3.5. It is intended that the placement will raise $1,000,000 through the issue of 100,000,000 Shares at $0.01 per share to clients of Forrest Capital and CPS Securities. The capital raised is intended to be used in funding of Imugene’s the expanded portfolio of drug delivery technologies.
3.6. The Acquisition Agreement also contains standard warranties and representations on behalf of Consegna and otherwise contains terms and conditions typical for an agreement of this nature.
3.7. Whilst not part of the Acquisition Agreement, Resolution 3 seeks shareholder approval for the allotment and issue of up to 50,000,000 options, with an exercise price of $0.02 per option, to Forrest Capital and CPS Securities for management of the placement and associated corporate advice.

Effect of the Proposed Transaction

3.8. The effect of the Proposed Transaction on Imugene’s issued share capital is illustrated in the table below.

	Total
	Number of Number of Number of
	shares % options % Securities % - - - - - - 143,637,220 100.0 - - 143,637,220 100.0 143,637,220 100.0 - - 143,637,220 100.0 - - - - - - 100,000,000 29.1 - - 100,000,000 25.4 100,000,000 29.1 - - 100,000,000 25.4 - - 50,000,000 100.0 50,000,000 12.7 143,637,220 41.8 - - 143,637,220 36.5 343,637,220 100.0 50,000,000 100.0 393,637,220 100.0
Pre Proposed Transaction Shares held by associated shareholders Shares held by non-associated shareholders Total shares pre Proposed Transaction Post Proposed Transaction Shares held by associated shareholders Issued as consideration to Consegna Issued in placement Issued to advisors Shares held by non-associated shareholders Total shares post Proposed Transaction

Table 3: Imugene’s Capital Structure Pre and Post the Proposed Transaction (undiluted and fully diluted shares)

3.9. Should the Proposed transaction be approved, the non-associated shareholders will be diluted from 100% to 41.8%.
3.10. On a fully diluted basis, the interests of the non-associated shareholders of Imugene will be further diluted to 36.5%.

Purpose of Proposed Transaction

3.11. Following the termination of the global license agreement with Novartis for the development and commercialisation of Imugene’s patented vaccines for pigs and poultry in the second half of 2011, the Company placed the development of all poultry vaccines on hold.
3.12. The Company announced in its Interim Financial Report dated February 2012 that the Directors were investigating new business opportunities to add to the Company’s assets.
3.13. The Directors of the Company believe the Proposed Transaction provides the Company with such an opportunity.

4. Purpose of this Report

Corporations Act

4.1. Section 606(1) of the Corporations Act (“the Act”) provides that, subject to limited specified exemptions, a person must not acquire a "relevant interest" in issued voting shares in a public company, if as a result of the acquisition any person’s voting power in the company would increase from 19.99% or below to 20% or greater. In broad terms, a person has a "relevant interest" in shares if that person holds shares or has the power to control the right to vote or dispose of shares. A person’s voting power in a company is the number of voting shares in which the person (and its associates) has a relevant interest holds compared with the total number of voting shares in a company.
4.2. Completion of the Proposed Transaction will result in Consegna obtaining a "relevant interest" in the Company of greater than 20% and, in the absence of an applicable exception, Consegna will be in breach of Section 606(1) of the Act.
4.3. Section 611, Item 7 of the Act provides an exemption to the rule noted in paragraph 4.1 above. Section 611, Item 7 allows a party (and its associates) to acquire a relevant interest in shares that would otherwise be prohibited under section 606(1) of the Act if the proposed acquisition is approved in advance by a resolution passed at a general meeting of the Company, and:
(i) no votes are cast in favour of the resolution by the proposed acquirer or respective associates; and
(ii) there was full disclosure to shareholders of all information that was known to the proposed acquirer or its associates or known to the Company that was material to a decision on how to vote on the resolution.
4.4. Section 611 of the Act states that shareholders must be given all information that is material to the decision on how to vote at the meeting. ASIC Regulatory Guide 111 Content of Experts Reports (RG111) advises the commissioning of an Independent Expert’s Report (IER) in such circumstances and provides guidance on the content of the IER.

Basis of evaluation

4.5. RG 111 provides ASICs’ view on how an expert can assist security holders make informed decisions about transactions. Specifically, it gives guidance to experts on how to evaluate whether or not a “ ”
proposed transaction is fair and reasonable .
4.6. RG 111 states that the expert report should focus on:
the issues facing the security holders for whom the report is being prepared; and
the substance of the transaction rather than the legal mechanism used to achieve it.
4.7. Where an issue of shares by a company otherwise prohibited under Section 606 is approved under item 7 of Section 611, and the effect on the company’s shareholding is comparable to a takeover bid, RG 111 states that the transaction should be analysed as if it was a takeover bid.

4.8. RG 111 applies the “fair and reasonable” test as two distinct criteria in the circumstance of a takeover bid, stating:
a takeover offer is considered “fair” if the value of the offer price or consideration is equal to or greater than the value of the securities that are the subject of the offer; and
a takeover offer is considered “reasonable” if it is fair or, where the offer is “not fair”, it may still be “reasonable” if the expert believes that there are sufficient reasons for security holders to accept the offer.
4.9. In assessing whether the Proposed Transaction is fair and reasonable to the Non-Associated Shareholders we have considered the advantages and disadvantages of the Proposed Transaction in the event that it proceeds or does not proceed including:
a comparison of the fair value of an ordinary share in Imugene prior to and immediately following the Proposed Transaction (fairness);
the future prospects of Imugene if the Proposed Transaction does not proceed; and
any other commercial advantages and disadvantages to the Non-Associated Shareholders as a consequence of the Proposed Transaction proceeding.
4.10. Our assessment of the Proposed Transactions is based on economic, market and other conditions prevailing at the date of this report.

5. Profile of Imugene

5.1. Imugene is a company incorporated in Australia which listed on the ASX in November 1993. The principal activity of Imugene is animal health biopharmaceutical development and commercialisation.
5.2. Imugene has intellectual property assets for animal virus vaccines and has focused, in particular, on a vaccine for Porcine Reproductive and Respiratory Syndrome (PRRS), together with certain poultry related vaccines.
5.3. On 13 October 2010, Imugene announced it had granted an exclusive global license to Novartis Animal Health Inc (Novartis). This agreement provided Novartis exclusive global rights to all of Imugene’s technologies and intellectual properties. The agreement provided Novartis with exclusive rights to commercialise Imugene’s animal health vaccines in return for license fees, milestone payments, research fees and royalties (the Novartis agreement). In the 2011 financial year, Imugene earned revenue under the Novartis agreement of approximately US$2.5 million.
5.4. On 2 September 2011, Imugene announced to the ASX that it had received notification of termination of the Novartis agreement for development and commercialisation of its vaccines for pigs and poultry. The reason provided regarding the termination was “an internal decision by the licensor to discontinue investment in the development of this technology”.
5.5. Following the termination of the Novartis agreement, Imugene directors and management completed a review of its vaccine products and intellectual property portfolio to determine a revised strategy for the Company.
5.6. At the end of December 2011 the Board of Imugene concluded that, while components of their existing intellectual property / technology had strong commercial prospects (particularly the pig vaccines), the carrying value of the asset could no longer be supported. Accordingly, the intangible asset, ‘intellectual property’ was written down to $nil in the 31 December 2011 half-year financial statements.
5.7. In addition, the company placed the development of all poultry vaccines on hold and commenced investigating new business opportunities to expand the Company’s assets and allow diversification of business operations.
5.8. On 1 May 2012, Imugene announced to the ASX that it had entered into an agreement to acquire Lingual Consegna and its Linguet™ technology.

Directors

5.9. At the date of this report, the directors of Imugene are as follows:
Graham Dowland;
Warwick Lamb; and
Roger Steinepreis.

Financial information

5.10. The financial information set out below is based upon the audited financial statements for the year ended 30 June 2010 and 30 June 2011 and the reviewed financial information for the six months ended 31 December 2011.

Financial performance

5.11. The summarised financial performance of Imugene for the years ended 30 June 2010 (FY10) and 30 June 2011 (FY11) and the half-year ended 31 December 2011 (HY12) is set out below:

	6 months ended Year ended Year ended
Income statement Ref	31-Dec-11 30-Jun-11 30-Jun-10
	*Reviewed* *Audited* *Audited*
	$ $ $
Revenue from continuing operations 5.14 Other income Research and development Business development Commercialisation expenses Amortisation expense Unrealised foreign exchange loss Corporate and administration expenses Impairment 5.13 Profit / (loss) before income tax Income tax benefit Net profit / (loss) for the year 5.12 Other comprehensive income Total comprehensive income attributable to equity holders of Company	243,743 2,237,275 44,018 121,435 (39,138) 312,117 (204,952) (491,687) (522,337) (48,640) (151,378) (151,592) (309,587) (335,251) (488,940) (170,570) (341,140) (341,140) - (132,520) (56,823) (222,811) (566,622) (560,344) (2,089,175) - - (2,680,557) 179,539 (1,765,041) - 236,000 230,000 (2,680,557) 415,539 (1,535,041) - - - (2,680,557) 415,539 (1,535,041)

Table 4: Financial Performance of Imugene for the two years ended 30 June 2011 and the half-year ended 31 December 2011

5.12. Imugene recorded a net profit in FY11 of $0.4 million after earning its first licence fees from the Novartis agreement.
5.13. As mentioned above, during the HY12, the Novartis agreement was terminated by Novartis and the carrying value of the associated intellectual property was written down by $2.1 million resulting in a loss of $2.7 million for HY12.
5.14. Due to the termination of the Novartis agreement, minimal revenue has been earned in HY12 and management has advised that few revenue generating options exists through exploitation of the current intellectual property / technology portfolio.

Financial position

5.15. The financial position of Imugene as at 31 December 2011, 30 June 2011 and 30 June 2010 is summarised in the table below:

		As at As at As at
	Balance sheet Ref	31-Dec-11 30-Jun-11 30-Jun-10
		*Reviewed* *Audited* *Audited*
		$ $ $
	Current assets Cash and cash equivalents 5.17 Trade and other receivables Tax assets Total current assets 5.16 Non-current assets Property, plant and equipment Intangible assets 5.18 & 5.19 Total non-current assets Total assets Current liabilities Trade and other payables 5.21 Provisions 5.21 Total liabilities 5.16 Net assets 5.16 Equity Contributed equity Reserves Accumulated losses Total equity	1,526,265 1,905,942 793,062 344 53,223 180,508 266,672 466,000 520,000 1,793,281 2,425,165 1,493,570 947 2,213 4,226 - 2,259,745 2,600,885 947 2,261,958 2,605,111 1,794,228 4,687,123 4,098,681 138,337 338,351 195,481 129,602 141,926 111,893 267,939 480,277 307,374 1,526,289 4,206,846 3,791,307 14,907,453 14,907,453 14,907,453 966,003 966,003 966,003 (14,347,167) (11,666,610) (12,082,149) 1,526,289 4,206,846 3,791,307

Table 5: Financial Position as at 31 December 2011, 30 June 2011 and 30 June 2010

5.16. As at 31 December 2011, Imugene had net assets of approximately $1.5 million with a working capital (cash and receivables less current liabilities) surplus of approximately $1.3 million.
5.17. The cash balance as at 31 December 2011 was approximately $1.5 million. Management accounts at 31 March 2012 show Imugene had a cash balance of $1.24 million as at that date.
5.18. Intangible assets comprised intellectual property relating to the development of Imugene’s pig and poultry vaccines which earned the Company income in FY11. As at 30 June 2010 the carrying value of the intangible assets was $2.25 million.
5.19. As noted above, in September 2011 the Novartis agreement terminated and it was determined that the carrying value of the intellectual property assets were to be written down to $nil as at 31 December 2011.
5.20. Imugene’s only other significant asset as at 31 December 2011, was $0.3 million in tax assets relating to research and development tax concessions available to the Company.
5.21. Imugene’s only liabilities as at 31 December 2011 were trade payables of $0.14 million and $0.13 million provided for employee entitlements.

Share price and performance

5.22. The daily closing share price and traded volumes of Imugene shares on the ASX is illustrated below for the period from 1 May 2011 to 31 May 2012.

==> picture [489 x 274] intentionally omitted <==

----- Start of picture text -----

Imugene Price Volume Graph
0.050 14
0.045
12
0.040 02-Sep-11:
Imugene
terminates Global
10
0.035 License Agreement
with Novartis AG. 29-Nov-11: 1-May-12: Imugene announce
Imugene announce the Proposed
0.030 technology trial Transaction
results update. 8
0.025
6
0.020
0.015
4
0.010
2
0.005
0.000 0
6/11 9/11 12/11 3/12
Volume Price
Price
Volume (in millions)
----- End of picture text -----

Table 6: Imugene Share Price Volume Graph

5.23. Announcements made to the ASX which may have, inter alia, affected Imugene’s stock price over the period covered in the above graphic included:
2 September 2011 - An announcement was released to the market explaining that Imugene’s global license agreement with Novartis was terminated;
29 November 2011 - An announcement was made to the market providing an update of Imugene’s recent technology trial results; and
1 May 2012 - Imugene announce the Proposed Transaction to the ASX.

Capital structure

5.24. As at the date of this report Imugene had approximately 143.6 million shares on issue, of which 32.14% were held by the top ten shareholders, as illustrated in the following table.

Shareholder Wainford Holdings Limited Dr Warwick Lamb Yambali Pty Ltd Mrs Treffina Dowland Mr Stephen James Moyle & Mrs Christine Maree Moyle Mcrae Investments Pty Ltd Frederick Erini Pty Ltd Techstart Australia Pty Ltd Greenfield Company Limited Mr Anthony Brendon Cope Top 10 Other TOTAL	Number of ordinary shares % of total shares 12,835,207 8.94% 8,395,002 5.84% 5,000,000 3.48% 4,913,002 3.42% 3,025,000 2.11% 2,718,833 1.89% 2,500,000 1.74% 2,387,738 1.66% 2,358,831 1.64% 2,032,840 1.42% 46,166,453 32.14% 97,470,767 67.86% 143,637,220 100.00%

Table 7: Imugene Significant Shareholders

5.25. As at the date of this report Imugene does not have any options on issue.

6. Profile of Consegna Group Limited

6.1. Consegna, formerly Helicon Group Limited (Helicon), is a company which was incorporated in Australia in 2004 and listed on the ASX in September 2007. The principal activity of Consegna is the licensing, distribution and/or manufacturing of pharmaceutical and healthcare products.
6.2. Consegna is the parent entity of Lingual Consegna and, in addition to the Linguet technology, has three –
technologies under development Vibrovein, BreathAssist™ and Aspen Medisys.
6.3. According to Consegna’s 30 June 2011 Annual Report, the technologies are described as follows:
Vibrovein is a vibrating device that attaches to any syringe to substantially reduce penetration resistance. This reduces pain and tissue distortion while increasing needle efficacy, productivity for the medical professional and improving patient comfort during any procedure. Vibrovein is being –
designed in two forms reusable for diabetic or other self-injection use and disposable for hospital or surgery use;
BreathAssist™ is a soft polymer nasal insert that expands the nasal passages and thereby increases airflow. The device has potential application in sleep apnoea, snoring, disorders associated with a deviated septum, enhancing sports performance, delivery of medicaments, and for odour masking purposes. BreatheAssist’s use in sports performance is being explored and tested further as an initial commercialisation opportunity; and
Aspen Medisys is an iron oxide nano-particle technology for treating solid tumours. The technology utilises an alternating magnetic field to heat the nano-particles, which are delivered by direct injection into tumours or through targeting-enabled means such as antibodies. Consegna expects that difficult to treat cancers is where the greatest opportunity for the Aspen Medisys technology lies.

Directors

6.4. At the date of this report, the directors of Consegna are as follows:
Rod Tomlinson;
Lord Simon Reading;
Fabio Pannuti; and
Brendan Fleiter.

Financial information

6.5. The financial information set out below is based upon the audited financial statements for the year ended 30 June 2010 and 30 June 2011 and the reviewed financial information for the six months ended 31 December 2011.

Financial performance

6.6. The summarised financial performance of Consegna for the FY10 and FY11 and HY12 is set out in the table below.

	6 months ended Year ended Year ended
Income statement	31-Dec-11 30-Jun-11 30-Jun-10
	*Reviewed* *Auditied* *Auditied*
	$ $ $
Sales revenue Cost of goods sold Gross profit Discount on acquisition due to bargain purchase Employee benefits expense Depreciation and amortisation Sales and marketing Accounting and secretarial services Travel and accommodation Consulting fees Directors fees Insurances Regulatory expenses Legal expenses Finance costs Other expenses from operating activities Share based payments Other Operating Income Loss before interest, taxes & impairment Impairment Loss before interest & taxes Net financial income Loss before taxes Income tax Net loss	- - - - - - - - - 5,438,739 - - (818,656) - (85,744) (1,714) (2,279) (3,174) - - (75) (84,931) (119,534) (90,541) (154,333) (55,133) (24,288) (1,348,264) (367,473) (90,237) (138,000) (99,773) (60,500) (19,533) (10,144) (44,523) (49,738) (44,860) (25,684) (169,154) (174,342) (46,318) (5,445) (6,901) - (213,389) (340,974) (124,542) (800,000) - (84,000) - 33,720 - 1,635,582 (1,187,693) (679,626) - - (198,622) 1,635,582 (1,187,693) (878,248) 16,573 58,981 19,837 1,652,155 (1,128,712) (858,411) - - - 1,652,155 (1,128,712) (858,411)

Table 8: Audited Consegna financial performance

6.7. In relation to the above income statement of Consegna, we note:
There is a significant discount on acquisition due to bargain purchase which has contributed to the operating profit in the HY12 period; and
Prior to the current period there have been operating losses incurred every year.

Financial position

6.8. Set out below is the audited and summarised balance sheet of Consegna as at 31 December 2011, 30 June 2011 and 30 June 2010.

	As at As at As at
Balance sheet	31-Dec-11 30-Jun-11 30-Jun-10
	*Reviewed* *Audited* *Audited*
	$ $ $
Current assets Cash and cash equivalents Trade and other receivables Other current assets Total current assets Non-current assets Property, plant and equipment Intangible assets Total non-current assets Total assets Current liabilities Trade and other payables Deferred purchase consideration Interest bearing liability Total current liabilities Non-current liabilities Deferred purchase consideration Total current liabilities Total liabilities Net assets Equity Issued capital Reserves Accumulated losses Equity attributable to members Non-controlling interests Total equity	878,482 961,503 454,358 260,902 213,785 21,071 5,010 5,010 13,073 1,144,394 1,180,298 488,502 120,533 20,299 5,323 24,970,834 14,518,212 - 25,091,367 14,538,511 5,323 26,235,761 15,718,809 493,825 463,234 454,694 49,430 1,261,528 - - 89,020 19,039 - 1,813,782 473,733 49,430 3,430,353 - - 3,430,353 - - 5,244,135 473,733 49,430 20,991,626 15,245,076 444,395 21,632,738 19,058,343 4,841,926 1,833,783 313,783 313,783 (4,129,014) (5,787,564) (4,711,314) 19,337,507 13,584,562 444,395 1,654,119 1,660,514 - 20,991,626 15,245,076 444,395

Table 9: Consegna balance sheet

6.9. In relation to the above balance sheet of Consegna, we note:
As at 31 December 2011, net assets were $21.0 million;
Intangible assets were the major asset of Consegna, with a carrying value of $24.9 million as at 31 December 2011.
Net assets have increased significantly since 30 June 2010 due to capital raisings to find further development of Consegna’s technologies;
Deferred purchase consideration owed to third parties was carried at $4.6 million at 31 December 2011; and
- Net tangible assets as at 31 December 2011 were ($3.9) million.

7. Profile of Lingual Consegna Pty Ltd

History

7.1. On 15 August 2011, Helicon (now Consegna) announced the completion of due diligence and the subsequent acquisition of the Linguet™ Patented Buccal Delivery intellectual property from OzPharma Pty Limited (OzPharma). The acquisition was undertaken by a wholly owned and newly created subsidiary, Lingual Consegna.
7.2. Under the terms of the agreement, consideration paid (or to be paid) to OzPharma consisted of:
$50,000 in cash;
15% of royalties paid to OzPharma from future sales of the Linguet platform;
1,370,000 Helicon shares; and
a call option (call option) over the shares of Lingual (the call option).

Under the terms call option, OzPharma were not able to exercise the call option until one month after two key Linguet patents have been granted in the USA. Consegna held the right to terminate the call option prior exercise by the payment to OzPharma of 25 million ordinary Helicon (now Consegna) shares.

7.3. Accordingly, Lingual Consegna owns the rights to a family of patents and patent applications that protect the core drug delivery platform technology, Linguet™, which has application in the human and animal pharmaceutical and nutraceutical (eg supplementary vitamin) industries.
7.4. Consegna announced (on 27 April 2012) that it had exercised its right to terminate the call option held by OzPharma which has resulted in the issue of a further 25 million shares to OzPharma.

The Linguet™ technology platform

7.5. Linguet is a tablet placed under the tongue or the buccal cavity in the mouth (cheek) and allowed to dissolve releasing the active drug, which is absorbed immediately into the blood stream via the mucosa of the mouth. The active drug thereby bypasses the gastrointestinal tract and is able to reach its target more rapidly and in the process significantly lower side effects.
7.6. Initially, the Linguet platform will be targeted (but not limited) to those drugs and nutraceuticals that:
show poor bioavailability (e.g. hormones such as progesterone and some vitamins); and
cause gastrointestinal irritation (e.g. pain medications such as Nurofen).
7.7. We understand the benefits of using the Linguet delivery platform include improved patient compliance and management (by targeting those populations who find it difficult to swallow oral medicines), a reduction in the need to overmedicate which should result in lower side effects, and a reduction in cost associated with lower concentrations of active drug required in the sub-lingual or buccal presentation. According to management, the lower requirement for the active drug under the Linguet delivery approach can be in the order of tenfold and result in significantly lower costs of production.
7.8. We are advised Linguet can be used in a wide range of therapeutic and nutraceutical applications which, in the opinion of Consegna management, allows for a low risk risk business model.

Commercialisation of Linguet

7.9. The Linguet vision is to create revenue generating commercial solutions within the pharmaceutical and healthcare global markets using Linguet as a multi-function platform.
7.10. Management’s strategy for the Linguet platform is to retain knowhow and intellectual property while providing solutions to current market opportunities through:
use of known molecules that have known and proven regulatory routes;
low cost development with rapid and identifiable commercialisation programs; and
opportunities with nutritional, over the counter and prescription medicine markets.
7.11. Management consider Linguet is at the stage of its development where entry to market can be achieved quickly and with relatively low additional financial investment. Further, they state that compared to traditional drug development platforms, the Linguet IP affords Lingual Consegna the ability to target markets which do not need significant clinical investment to require regulatory approval.
7.12. Management also consider Linguet may also offer an opportunity to extend the lifecycle of existing drugs through an enhanced delivery approach. Management have noted that several existing (and Linguet appropriate) drugs are due to come off patent in the short term, at which point cheaper (generic) versions of these product are likely to become widely available in the market. According to experts, drug delivery enhanced generics can command a strong premium over standard generics.
7.13. Under the ongoing development programme, it is planned to use outsource partners to minimise internal overheads, thus allowing focus in generating products and revenues. The business model also seeks to optimising Linguet value by targeting products rather than pushing technology.
7.14. Following proof of principle, the company plans to licence, and possibly sell, individual products for applications such as generic drugs and nutraceuticals, while larger value inflection events will continue to be developed as further development and validation of the IP is captured.

Financial performance

7.15. We have set out in the table below the summarised and unaudited financial performance of Lingual Consegna in the period from inception on 15 August 2011 to 31 March 2012.

Income statement	15-Aug-11 to 31-Mar-12 *Unaudited* $
Revenue Licence fees Other income Total revenue Expenses Professional services and consultant fees Corporate and administration expenses Personnel expenses Occupancy costs Sales and marketing costs Total expenses Profit / (loss) before income tax	- - - (236,186) (50,783) (38,329) (23,244) (730) (349,272) (349,272)

Table 10: Unaudited Lingual Consegna financial performance to 31 March 2012

7.16. In relation to the above unaudited income statement of Lingual Consegna, we note:
the Linguet IP remains in development phase, and accordingly, in the period to 31 March 2012, Lingual earned $nil revenue; and
Over the same period, costs of approximately $350,000 were incurred in development, corporate and other costs.

Financial position

7.17. Set out below is the unaudited and summarised balance sheet of Lingual as at 31 March 2012.

	As at
Balance sheet	31-Mar-12 *Unaudited* $
Current assets Cash and cash equivalents Total current assets Non-current assets Intangible assets Total non-current assets Total assets Current liabilities Intercompany loan Total current liabilities Non-current liabilities Loans Total non-current liabilities Total liabilities Net assets	- - 2,858,221 2,858,221 2,858,221 3,207,492 3,207,492 - - 3,207,492 (349,271)

Table 11: Lingual Consegna unaudited balance sheet as at 31 March 2012

7.18. In relation to the above balance sheet of Lingual Consegna, we note:
Intangible assets represent the value of the consideration paid to OzPharma for the Linguet IP in August 2012. We understand the fair value of the consideration was independently estimated for Consegna in April 2012; and
The intercompany loan is payable to Consegna and was provided to fund the acquisition of the IP from OzPharma. We understand that this loan will be converted to equity prior to the transfer of shares to Imugene pending shareholder approval.

8. Overview of the biotechnology industry

8.1. It is forecast that the biotechnology industry will generate $7.5 billion in revenue in financial year 2012 (FY12) with profit estimated to be $225 million in the same period.
8.2. Revenues in the industry grew by an average of 7% per annum in the 5 years to FY12 and are forecast to grow at a strong rate of 6.1% per annum for the next 5 years to 2017 to $10.1 billion.
8.3. Research in the industry is largely funded by government and non-profit organisations, although the private sector is increasing its contribution. Revenue has started to increase recently as companies reach commercial readiness and attract stronger levels of investment. Firms not at this stage generally have no or low sales and incur losses as cash is used in the development phases.
8.4. The biotechnology industry is a high risk commercial environment which makes obtaining funding difficult, particularly in an uncertain financial environment.
8.5. Of particular importance to the industry is government support of biotechnology applications in recent years. Support includes the Federal Government’s continued offering of Gardasil (which was developed by CSL Limited) free of charge to all young women in Australia, and the decision made by the Victorian and NSW State governments to allow the planting of genetically modified crops.

Key external drivers

8.6. The key external drivers in the biotechnology industry are:

Research and development expenditure - The Federal Government provides grants and funding to biotech companies and funds government research facilities such as the Commonwealth Scientific and Industrial Research Organisation (CSIRO). Changes in the structure of government funding have been blamed for slower industry growth in recent years. It is expected the recent introduction of the Research and Development Tax Credit is likely to spur private investment;

Prevalence of agricultural diseases and parasites - Agricultural concerns are the other major area where biotechnology attracts a lot of attention. Biotechnology in this sector is seen primarily as a way to reduce crop growth volatility and increase yield. Thus, the need for these solutions depends on the prevalence of these problems;

Legislative compliance requirements for pharmaceutical product manufacturing - Scientific research, in particular the pharmaceutical industry, is heavily regulated, restricting the freedom of firms to pursue profitability as easily. Since most Australian biotech firms are involved in pharmaceuticals, these regulations apply to them as well;

Total health expenditure - The majority of biotechnology developed in Australia relates to health concerns. This is expected to rise as an ageing population is creating demand for more life enhancing and life extending drugs that are developed by this industry; and

All Ordinaries index - A healthy stock market assists biotechnology companies in raising capital. Recently global investor confidence has slowed and as a result interest in investing in new biotechnology companies has slowed, raising the risk of subdued growth in the future.

Key external drivers

8.7. The key success factors identified in the biotechnology industry are:

Access to niche markets - Biotechnology companies need to develop products for niche markets, such as better strains of cotton seeds for cotton growers or medical applications for medical device companies;

Ability to quickly adopt new technology - Companies need to ensure they are up to date with the latest research and breakthroughs;

Highly trained workforce - Employees involved in industry research and development generally need to hold a science degree or equivalent; and

Ready access to investment funding - The high cost of developing new biotechnology products means that companies need to secure finance in order to ensure successful research and development.

Barriers to entry

8.8. Barriers to entry to the biotechnology industry are considered be high as a company requires access to specialist staff, buildings/laboratories and equipment, research skills and research funding and capital.
8.9. Access to government funding and venture capital in Australia can be quite difficult leading some biotechnology companies to rely on foreign partnerships to set them up and provide the necessary funding.
8.10. The nature of the industry requires many biotechnology companies to carry out research and development in sensitive areas. There are significant levels of opposition into genetic modification research, so government regulations in Australia in relation to research ethics are particularly stringent.
8.11. Patents are widely used in the industry and prove an effective tool to raise barriers to entry, since they assure companies that a market niche will be fairly protected as long as patents remain in place.
8.12. A 2007 survey completed by Research Australia into biotechnology companies identified funding, management recruitment, regulatory issues and IP protection as the main barriers for start up companies in the industry.

Industry outlook

8.13. The biotechnology industry in Australia appears to be finishing another cycle of research and development as investors search for low-risk, commercial-ready technology. In particular, smaller biotech companies, which found it harder to raise capital due to a shortage of investors, will see an increase in access to funding. However in order to be successful, companies need to be able to develop the required technology and appropriately commercialise their products.
8.14. Overall, the success of a relatively small number of commercialised products will sustain most of the industry’s revenue growth over the next five years. It is forecast that industry revenue will increase at an average rate of 6.1% per annum in the five years through 2016-17, to reach $10.1 billion. In 2012-13, revenue is expected to grow 6.3%.

9. Valuation approach

Valuation methodologies

9.1. In assessing the value of Imugene prior to and immediately following the Proposed Transaction, we have considered a range of valuation methodologies. RG 111 proposes that it is generally appropriate for an expert to consider using the following methodologies:
the discounted cash flow (DCF) method and the estimated realisable value of any surplus assets;
the application of earnings multiples to the estimated future maintainable earnings or cashflows added to the estimated realisable value of any surplus assets;
the amount which would be available for distribution on an orderly realisation of assets;
the quoted price for listed securities; and
any recent genuine offers received.
9.2. We consider that the valuation methodologies proposed by RG 111 can be split into three valuation methodology categories, as follows.

Market based methods

9.3. Market based methods estimate the fair market value by considering the market value of a company’s securities or the market value of comparable companies. Market based methods include;
Capitalisation of maintainable earnings;
The quoted price for listed securities; and
Industry specific methods.
9.4. The capitalisation of earnings methodology is generally considered a short form DCF, where an estimation of the Future Maintainable Earnings (FME) of the business, rather than a stream of cash flows, is capitalised based on an appropriate capitalisation multiple. Multiples are derived from the analysis of transactions involving comparable companies and the trading multiples of comparable companies.
9.5. The recent quoted price for listed securities method provides evidence of the fair market value of a company’s securities where they are publicly traded in an informed and liquid market.
9.6. Industry specific methods usually involve the use of industry rules of thumb to estimate the fair market value of a company and its securities. Generally rules of thumb provide less persuasive evidence of the fair market value of a company than other market based valuation methods because they may not account for company specific risks and factors.

DCF methods

9.7. The DCF technique has a strong theoretical basis, valuing a business on the net present value of its future cash flows. It requires an analysis of future cash flows, the capital structure and costs of capital and an assessment of the residual value or the terminal value of the company’s cash flows at the end of the forecast period. This method of valuation is appropriate when valuing companies where future cash flow projections can be made with a reasonable degree of confidence.

Asset based methods

9.8. Asset based methodologies estimate the fair market value of a company’s securities based on the realisable value of its identifiable net assets. Asset based methods include:-
orderly realisation of assets method;
liquidation of assets method; and
net assets on a going concern basis.
9.9. The value achievable in an orderly realisation of assets is estimated by determining the net realisable value of the assets of a company which would be distributed to security holders after payment of all liabilities, including realisation costs and taxation charges that arise, assuming the company is wound up in an orderly manner. This technique is particularly appropriate for businesses with relatively high asset values compared to earnings and cash flows.
9.10. The liquidation of assets method is similar to the orderly realisation of assets method except the liquidation method assumes that the assets are sold in a shorter time frame.
9.11. The net assets on a going concern method estimates the market values of the net assets of a company but unlike the orderly realisation of assets method it does not take into account realisation costs. Asset based methods are appropriate when companies are not profitable, a significant proportion of the company’s assets are liquid or at market values, or for asset holding companies.

Selection of valuation methodologies

Valuation of Imugene pre the Proposed Transaction

9.12. Imugene has no operating assets as at 31 December 2011 and its only material assets at that date are cash and tax assets. In our experience the most appropriate method for determining the value of companies similar to Imugene is on the basis of the fair value of their underlying net assets.
9.13. Accordingly, in valuing a share in Imugene pre the Proposed Transaction we have utilised the net assets on a going concern methodology. In applying this methodology we have assessed the value of Imugene’s assets as the net book value of its assets and liabilities as set out in the reviewed statement of financial position of Imugene as at 31 December 2011.
9.14. As a cross-check to our primary valuation methodology, we have also considered the implied value of an Imugene share based on recent trading prices for portfolio shareholding parcels of Imugene shares on the ASX. In accordance with RG 111, we have assessed the value of Imugene’s shares on a 100% controlling interest basis.

Valuation of Lingual Consegna

9.15. In order to assess the value of an Imugene share immediately following the Proposed Transaction, it is necessary to assess the fair value of the assets being purchased by Imugene.
9.16. Intellectual property may be valued directly using the traditional market, DCF and net asset based approaches described above. However, we note that we have not conducted a direct valuation assessment of the Linguet IP due to the following:

the Linguet IP is in a state of development and commercialisation is not likely to be achieved for several years and requires significant capital investment to achieve; and
the fair market value of the Linguet IP will be dependent upon the future prospects of the unique attributes making up the Linguet IP. These can be affected by the following factors:
- the additional time required to bring Linguet to market;
- the known and unknown costs to bring Linguet to market;
- competitive response / alternative technologies providing similar benefits;
- ability of the holder of the Linguet patents to raise finance in an uncertain market;
- uncertainty of revenue streams assuming Linguet does reach commercialisation; and
- performance and trends in the overall financial markets;
9.17. Preparing medium or long term cash flow forecasts in relation to the Linguet IP will involve significant elements of subjective judgement and analysis that be found to be sustainable. IN addition, any forecasts will necessarily be based on actions and approvals yet to be implemented or completed. (i.e. “hypothetical” assumptions rather than “best estimates”).
9.18. Based on the above, it is our opinion that an assessment of the fair market value of the Linguet IP based on cash flow forecasts (in the absence of relevant product approvals and significant market testing) will involve untenable elements of subjective judgement and will, therefore, be based on hypothetical outcomes.
9.19. Accordingly, we have calculated the implied value of the Linguet IP using the net assets on a going concern method taking into consideration the following:
the Linguet IP was transacted on an arm’s length market basis on 15 August 2011 and is currently being carried on Lingual Consegna’s balance sheet at the transacted value;
the Linguet IP is, and has been since acquisition, the sole asset of Lingual Consegna;
the costs incurred by Lingual Consegna since acquisition of the Linguet IP.
9.20. In forming our opinion of value, we have also considered research and development and other expenditure which has been incurred in relation to the Linguet IP since its acquisition on 15 August 2011.

Valuation of Imugene Post Transaction

9.21. We have calculated the value of Imugene post transaction to allow us to assess the fairness of the Proposed Transaction. The value of an Imugene share post transaction is based on the value of Imugene pre the Proposed Transaction plus the value acquired through the acquisition of Lingual Consegna less disbursements made in relation to the Transaction divided by the total number of shares on issue post Transaction.

10. Valuation of Imugene (pre Proposed Transaction)

10.1. As stated in paragraph 8.12 to 8.14 we have assessed the value of Imugene prior to the Proposed Transaction on a net assets on a going concern basis and have also considered the recent quoted price of its listed securities
10.2. The basis of our evaluation of “fairness” is to compare the value of a share in Imugene pre the Proposed Transaction to the value of a share in Imugene immediately after the Proposed Transaction.

Net assets on a going concern basis

10.3. In assessing the value of an Imugene share pre the Proposed Transaction, we have used the net assets on a going concern methodology and based our analysis on the net book value of the assets and liabilities of Imugene as at 31 December 2011.

Ref	$

Net assets of Imugene as at 31 December 2011 5.16 Number of shares on issue at the date of this Report Value per share	1,526,289 143,637,220 0.011

Table 12: Assessed value of Imugene on net assets basis (Pre-Proposed Transaction)

10.4. As shown in the table above we have valued Imugene pre the Proposed Transaction at $1,526,289. Based on our analysis the value of an ordinary share in Imugene is $0.011 per share.
10.5. We have accepted the book value of the assets and liabilities of Imugene as at 31 December 2011 as reflecting their fair market value. The intellectual property assets have been valued as nil due to:
The termination of the exclusive Novartis agreement for all of Imugene’s technologies and intellectual properties;
The company subsequently placing on hold the development of all poultry vaccines; and
The company writing down the charging value of all its Intellectual Property assets to $nil at 30 December 2011.

Quoted price of listed securities

10.6. In order to provide a cross-check to the valuation of a Imugene share under the net assets on a going concern basis, we have also assessed the fair value based on the quoted market price.
10.7. The assessment only reflects trading prior to the announcement of the Proposed Transaction in order to avoid the influence of any movement in price that occurred as a result of the announcement.
10.8. The Proposed Transaction was announced to the ASX on 1 May 2012 and Table 13 below sets out the daily closing price and traded volumes of Imugene from 12 months prior to 1 May 2012.

==> picture [484 x 273] intentionally omitted <==

----- Start of picture text -----

Imugene Price Volume Graph
0.050 4
0.045
4
0.040
3
0.035
3
0.030
0.025 2
0.020
2
0.015
1
0.010
1
0.005
0.000 0
5/11 8/11 11/11 2/12
Volume Price
Price
Volume (in millions)
----- End of picture text -----

Table 13: Imugene Share Price Volume Graph for the year to 1 May 2012

10.9. Over this period, the closing price of Imugene shares has ranged from a low of $0.008 on 16 April 2012 to a high of $0.044 on 20 July 2011.
10.10. In order to provide further analysis of the market prices for Imugene shares, we have considered the volume weighted average market price for 10, 30 and 60 trading day periods up to and including 30 April 2012.

	Days	Days	Days
	$	$	$
Closing price	0.008	0.010	0.019
Volume weighted average price	0.008	0.010	0.013

Table 14: Volume weighted average price of Imugene (to 30 April 2012)

10.11. An analysis of the volume in trading in Imugene shares prior to 1 May 2012 is provided below.

	Low	High	Cumulative	% of total
	$	$	volume	capital
1 trading day	0.009	0.009	16,500	0.01%
10 trading days	0.008	0.010	2,605,340	1.81%
30 trading days	0.008	0.013	7,957,550	5.54%
60 trading days	0.008	0.020	14,279,670	9.94%

Table 15: Traded volumes of Imugene to 9 May 2012

10.12. The table shows that only 9.94% of Imugene’s shares have been traded in the 60 trading days prior to the announcement of the Proposed Transaction which indicates a relatively low level of liquidity.
10.13. Our assessment of a fair market value of an Imugene share is based on the quoted market price, and therefore on the basis of a minority interest, is $0.008 based on the 10 day volume weighted average price prior to 1 May 2012.
10.14. The value above is indicative of the value of a marketable parcel of shares assuming the shareholder does not have control of Imugene. In the case of a Section 611 acquisition, RG 111 states that the independent expert should calculate the value of a target’s shares as if 100% control were being obtained. Therefore, in our assessment of the fair value of a Imugene share, we should include a premium for control.
10.15. RSM Bird Cameron has undertaken a survey of control premiums paid over a 5-year period to 30 June 2010 in 212 successful takeovers and schemes of arrangements of companies listed on the ASX (“RSM Bird Cameron Control Premium Study 2010”). The findings are summarised in the table below, showing the average control premium 20 days, 10 days and 2 days prior to announcement:

	Number of
	transactions	20 days pre	10 days pre	2 days pre
Average control premium - All Industries	212	30.7%	25.6%	21.9%
Average control premium - Metals & Mining	55	33.9%	29.9%	26.4%

Table 16: Average control premium over five years to 30 June 2010

(Source: RSM Bird Cameron Control Premium Study 2010)

10.16. We have selected a control premium of 30% and applied it to our assessed value of a Imugene share on a minority interest basis as follows:

Quoted market price value Control premium Quoted market price valuation including a premium for control	Share price $0.008 30% $0.010

Table 17: Assessed value of an Imugene share

10.17. Our valuation of an Imugene share on the basis of the quoted market price including a premium for control is therefore $0.010.

Valuation Summary

10.18. A summary of our assessed values of an Imugene share pre the Proposed Transaction, is shown below.

		Preferred
	Net assets on a going concern	$0.011
	Quoted market price value	$0.010
	Preferred valuation	$0.011

Table 18: Imugene valuation summary

10.19. We have relied upon the net assets on a going concern valuation methodology as we consider that the trading market for Imugene’s shares is not deep enough to provide a fair market value. We note however that the share price implies that the market does not attribute any value to the intellectual property assets of Imugene.
10.20. We have therefore assessed the fair market value of an Imugene share on a controlling basis, pre the Proposed Transaction, to be $0.011.

11. Valuation of Lingual Consegna

11.1. We have valued Lingual using the net assets on a going concern methodology based on the realisable net book value of the assets and liabilities of Lingual Consegna as at 31 March 2012 in the range $2.9 to $3.1 million, as set out in the table below.

		Low $’000 High $’000
	Lingual Consegna Ref:

Net assets as at 31 March 2012 7.17 Add: Recapitalised intercompany loan (prior to transaction) 7.18 Costs incurred since 15 August 2012 11.2		(350) (350)


		3,207 3,207
		70 270
Adjusted realisable net assets as at 31 March 2012		2,927 3,127

Table 19: Assessed value of Lingual Consegna on net assets basis

11.2. We understand that between $70,000 and $270,000 of the $350,000 costs incurred since acquisition of the Linguet technology could reasonably be capitalised as expenditure furthering the commercialisation of the Linguet IP patents. Such expenditure was deemed necessary to further the development of, and ensure security of, the Linguet IP with the balance incurred in corporate and occupancy costs.
11.3. We note our valuation of the Linguet IP is not inconsistent with the independently assessed value of consideration paid to OzPharma for the Linguet IP in an arm’s length transaction in August 2011 of $2.9 million.

12. Valuation (post Proposed Transaction)

12.1. As required by RG 111, in order to provide an indication of the value of the Company after the Proposed Transaction, assuming it is successful, we have calculated the theoretical underlying value of a share in Imugene post the Proposed Transaction.
12.2. We summarise our valuation of an Imugene share, on an undiluted basis, subsequent to the Proposed Transaction on a net assets or a going concern basis in the table below.

Valuation post Proposed Transaction Ref	Low Value High Value
	$000's $000's


Value of Imugene 10.3	1,526 1,526
Value of Lingual Consegna 11.1	2,927 3,127
Equity Value	4,453 4,653

Proceedsfromshare placement	1,000 1,000
Equity Value Post Transaction	5,453 5,653

Shares on issue 10.3	143,637,220 143,637,220
Issued in share placement	100,000,000 100,000,000
Issuedforacquisitionof LingualConsegna	100,000,000 100,000,000
Total Shares Post Transaction	343,637,220 343,637,220
Value per Share	0.016 0.017

Table 20: Imugene share value after Proposed Transaction on an undiluted basis

12.3. As set out in the table above we have assessed the value of an Imugene share subsequent to the Proposed Transaction to be in the range of $0.016 to $0.017.

12.4. We summarise our valuation of an Imugene share, on a fully diluted basis, subsequent to the Proposed Transaction on a net assets or a going concern basis in the table below.

Valuation post Proposed Transaction Ref	Low Value High Value
	$000's $000's

Value of Imugene 10.3	1,526 1,526
Value of LingualConsegna 11.1	2,927 3,127
Equity Value	4,453 4,653

Proceeds from share placement	1,000 1,000
Proceeds from exercise of options	1,000 1,000
Equity Value Post Transaction	6,453 6,653
10.3
Shares on issue	143,637,220 143,637,220
Issued in share placement	100,000,000 100,000,000
Issued for acquisition of Lingual Consegna	100,000,000 100,000,000
Optionsissued to advisors	50,000,000 50,000,000
Total Shares Post Transaction	393,637,220 393,637,220
Value per Share	0.016 0.017

Table 21: Imugene share value after Proposed Transaction on a fully diluted basis

12.5. As set out in the table above, we have assessed the value of an Imugene share subsequent to the Proposed Transaction to be in the range of $0.016 to $0.017 on a fully diluted basis.

13. Is The Proposed Transaction Fair?

13.1. Our assessed values of an Imugene share prior to and immediately after the Proposed Transaction are summarised in the tables below.

	Value per Share	Ref Low Value High Value
Value of a Imugene share pre Proposed Transaction Value of a Imugene share post Proposed Transaction		$ $
		10.3 0.011 0.011 12.3 0.016 0.017
Table 22: Valuation Summary (undiluted basis)
	Value per Share	Ref Low Value High Value
Value of a Imugene share pre Proposed Transaction Value of a Imugene share post Proposed Transaction		$ $
		10.3 0.011 0.011 12.3 0.016 0.017

Table 23: Valuation Summary (fully diluted basis)

Conclusion on Fairness

13.2. On both an undiluted and fully diluted basis, the value of an Imugene share after the Proposed Transaction is greater than the value prior, and in the absence of any other relevant information, in our opinion, the Proposed Transaction is Fair to the Non-Associated Shareholders.

14. Is The Proposed Transaction Reasonable?

14.1. RG111 establishes that an offer is reasonable if it is fair. It might also be reasonable if, despite not being fair, there are sufficient reasons for security holders to accept the offer in the absence of any higher bid before the offer closes.
14.2. In order to assess whether the Proposed Transaction is “reasonable”, we have considered the following:
The future prospects of Imugene if the Proposed Transaction does not proceed; and
Other commercial advantages and disadvantages to the Non-Associated Shareholders as a consequence of the Proposed Transaction proceeding.

Stated Intentions of Consegna

14.3. Consegna has stated that it does not intend to:
Make any significant changes to the business of the Company;
Inject further capital into the Company;
Make any changes to the future employment of the present employees of the Company;
Transfer any property between the Company and Consegna or any person associated with any of them;
Otherwise redeploy the fixed assets of the Company; or
Change significantly the financial or dividend policies of the Company.
14.4. Mr Fabio Pannuti, a director of Consegna will be appointed as an executive director of the Company following the completion of the Proposed Transactions. It is proposed that Mr Graham Dowland, the current Non-Executive Chairman of the Company will resign as a director of the Company following the completion of the Proposed Transactions.

Future Prospects of Imugene if the Proposed Transaction Does Not Proceed

14.5. If the Proposed Transaction does not proceed the Company will continue with its stated objective of investigating new business opportunities to add to the Company’s assets.

Advantages and Disadvantages

14.6. In assessing whether the Non-Associated Shareholders are likely to be better off if the Proposed Transaction proceeds than if it does not, we have compared various advantages and disadvantages that are likely to accrue to the Non-Associated Shareholders.

Advantages

– Advantage 1 Proposed Transaction is Fair

14.7. RG 111 states that a transaction is reasonable if it is fair.

– Advantage 2 Opportunity to diversify and expand business operation

14.8. The company announced in February 2012 that the Directors were investigating new business opportunities to add to the Company’s assets. The Proposed Transaction provides such an opportunity.

– Advantage 3 Increase in Management Team

14.9. In addition to Mr Fabio Pannuti, currently the Managing Director or Consegna joining the Company’s Board as an Executive Director the Company will also engage with the Consegna Group scientific team to assist in the development of the Lingnet technology. This will include Dr Nicholas Ede (Consegna’s Chief Technology Officer) and U.K. based Mr Steve Martin (Lingnet’s Chief Scientific Officer) and Rod Tomlinson (Chairman, Scientific Committee, Consegna).

– Advantage 4 Capital will be raised as part of the Proposed Transaction

14.10. The Proposed Transaction will involve an accompanying share placement to raise $1 million in additional share capital to fund future operations.

– Advantage 5 Increase in Net Assets of the Company

14.11. Subsequent to the proposed transaction, the Company will have net assets at fair market value in the range of $5.45 million to $5.65 million compared to net assets at fair market value prior to the Proposed Transaction of $1.53 million.

Disadvantages

Disadvantage 1 – Dilution of Shareholders’ Interests

14.12. The consideration to be paid consists of the issue of 100 million ordinary shares in Imugene which will result in an immediate dilution in the interest held by existing Non-Associated Shareholders of Imugene from approximately 100% to 59.0%. The additional 100 million share issue proposed in the Share Placement and 50 million options proposed to be issued to advisors will further dilute the Non-Associated Shareholders of Imugene from approximately 59.0% to 36.5%.

– Disadvantage 2 Transfer of control in the Company

14.13. As a result of the Proposed Transaction the Non-Associated Shareholders will transfer control of Imugene to Consegna.

Alternative Proposal

14.14. We are not aware of any alternative investment opportunities which Imugene are pursuing, or would pursue if the Proposed Transaction did not proceed, at this time.

Response of Market to the Announcement

14.15. Imugene shares increased to close at $0.020 on 2 May 2012 and $0.030 on 3 May 2012 immediately following announcement of the Proposed Transaction to the ASX on 1 May 2012. At the date of this report, Imugene shares were last traded at $0.018 on 25 May 2012.
14.16. The last traded price represents a 100% increase on the last traded share price on 30 April 2012 of

$0.009, being the last traded share price prior to announcement of the Proposed Transaction. This indicates the market had a positive response to the Proposed Transaction.

Conclusion on Reasonableness

14.17. In our opinion, the position of the Non-Associated Shareholders if the Proposed Transaction is approved is more advantageous than the position if it is not approved. Therefore, in the absence of any other relevant information and/or a superior offer, we consider that the Proposed Transaction is Reasonable for the Non-Associated Shareholders of Imugene.
14.18. An individual shareholder’s decision in relation to the Proposed Transaction may be influenced by his or her individual circumstances. If in doubt, shareholders should consult an independent advisor.

Yours faithfully

RSM BIRD CAMERON CORPORATE PTY LTD

A J GILMOUR Director

I S DOUGLAS Director

APPENDIX 1 Declarations and Disclosures

RSM Bird Cameron Corporate Pty Ltd holds Australian Financial Services Licence 255847 issued by ASIC pursuant to which they are licensed to prepare reports for the purpose of advising clients in relation to proposed or actual mergers, acquisitions, takeovers, corporate reconstructions or share issues.

Qualifications

Our report has been prepared in accordance with professional standard APES 225 “Valuation Services” issued by the Accounting Professional & Ethical Standards Board.

RSM Bird Cameron Corporate Pty Ltd is beneficially owned by the partners of RSM Bird Cameron (RSMBC) a large national firm of chartered accountants and business advisors.

Mr. Andrew Gilmour is a director of RSM Bird Cameron Corporate Pty Ltd. Mr Gilmour is a Chartered Accountant with extensive experience in the field of corporate valuations and the provision of independent expert’s reports for transactions involving publicly listed and unlisted companies in Australia. Mr Ian Douglas is a director of RSM Bird Cameron Corporate Pty Ltd and has over 20 years’ experience in providing valuation and corporate advice to publically listed and private companies in Australia.

Reliance on this Report

This report has been prepared solely for the purpose of assisting the Non-Associated Shareholders of Imugene Resources Limited in considering the Proposed Transaction. We do not assume any responsibility or liability to any party as a result of reliance on this report for any other purpose.

Reliance on Information

Statements and opinions contained in this report are given in good faith. In the preparation of this report, we have relied upon information provided by the directors and management of Imugene Resources Limited and we have no reason to believe that this information was inaccurate, misleading or incomplete. However, we have not endeavoured to seek any independent confirmation in relation to its accuracy, reliability or completeness. RSM Bird Cameron Corporate Pty Ltd does not imply, nor should it be construed that it has carried out any form of audit or verification on the information and records supplied to us.

The opinion of RSM Bird Cameron Corporate Pty Ltd is based on economic, market and other conditions prevailing at the date of this report. Such conditions can change significantly over relatively short periods of time.

In addition, we have considered publicly available information which we believe to be reliable. We have not, however, sought to independently verify any of the publicly available information which we have utilised for the purposes of this report.

Disclosure of Interest

At the date of this report, none of RSM Bird Cameron Corporate Pty Ltd, RSMBC, Andrew Gilmour, nor any other member, director, partner or employee of RSM Bird Cameron Corporate Pty Ltd and RSMBC has any interest in the outcome of the Proposed Transaction, except that RSM Bird Cameron Corporate Pty Ltd are expected to receive a fee of $35,000 based on time occupied at normal professional rates for the preparation of this report. The fees are payable regardless of whether Ram Resources Limited receives Shareholder approval for the Proposed Transaction, or otherwise.

Consents

RSM Bird Cameron Corporate Pty Ltd consents to the inclusion of this report in the form and context in which it is included with the Explanatory Memorandum to be issued to Shareholders. Other than this report, none of RSM Bird Cameron Corporate Pty Ltd, RSM Bird Cameron Partners or RSMBC has been involved in the preparation of the Notice of General Meeting and Explanatory Statement. Accordingly, we take no responsibility for the content of the Notice of General Meeting and Explanatory Statement as a whole.

APPENDIX 2 Sources of Information

In preparing this report we have relied upon the following principal sources of information:

Imugene financial statements for the year ended 30 June 2011 and the half year ended 31 December 2011.
Notice of General Meeting and Explanatory Statement for the meeting of Imugene shareholders to be held on 17 July 2012.
Information provided by Imugene management through meetings and correspondence.
Capital IQ, IBIS World and other financial databases and subscription services.
Publicly available information.
Imugene ASX announcements.
Imugene share register listing provided by management.
Share Sale Agreement between Imugene Limited and Consegna Group Limited dated 1 May 2012
Lingual Consegna Pty Ltd management accounts for period 15 August 2011 to 31 March 2012 per the Share Sale Agreement.

Imugene Limited ABN 99 009 179 551

Lodge your vote:

By Mail: GPO Box 2530 Perth WA 6001

Alternatively you can fax your form to (within Australia) 08 9440 2699 (outside Australia) +61 8 9440 2699

000001 000 IMU MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

For all enquiries call:

(within Australia) 1300 850 505 (outside Australia) +61 3 9415 4000

Proxy Form

 For your vote to be effective it must be received by 10:00am (WST) Sunday 15 July 2012

Individual: must sign. Joint Holding: Power of Attorney: Companies:

How to Vote on Items of Business

Signing Instructions

All your securities will be voted in accordance with your directions.

Individual: Where the holding is in one name, the securityholder must sign. Appointment of Proxy Joint Holding: Where the holding is in more than one name, all of Voting 100% of your holding: Direct your proxy how to vote by the securityholders should sign. marking one of the boxes opposite each item of business. If you do Power of Attorney: If you have not already lodged the Power of not mark a box your proxy may vote as they choose. If you mark Attorney with the registry, please attach a certified photocopy of the more than one box on an item your vote will be invalid on that item. Power of Attorney to this form when you return it. Companies: Where the company has a Sole Director who is also the Voting a portion of your holding: Indicate a portion of your Sole Company Secretary, this form must be signed by that person. If voting rights by inserting the percentage or number of securities the company (pursuant to section 204A of the Corporations Act you wish to vote in the For, Against or Abstain box or boxes. The 2001) does not have a Company Secretary, a Sole Director can also sum of the votes cast must not exceed your voting entitlement or sign alone. Otherwise this form must be signed by a Director jointly 100%. with either another Director or a Company Secretary. Please sign in the appropriate place to indicate the office held. Delete titles as Appointing a second proxy: You are entitled to appoint up to two applicable.

Appointing a second proxy: You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you appoint two proxies you must specify the percentage of votes or number of securities for each proxy, otherwise each proxy may exercise half of the votes. When appointing a second proxy write both names and the percentage of votes or number of securities for each in Step 1 overleaf.

Attending the Meeting

Bring this form to assist registration. If a representative of a corporate securityholder or proxy is to attend the meeting you will need to provide the appropriate “Certificate of Appointment of Corporate Representative” prior to admission. A form of the certificate may be obtained from Computershare or online at www.investorcentre.com under the information tab, "Downloadable Forms".

A proxy need not be a securityholder of the Company.

Comments & Questions: If you have any comments or questions for the company, please write them on a separate sheet of paper and return with this form.

 Turn over to complete the form

 www.investorcentre.com

View your securityholder information, 24 hours a day, 7 days a week:

Review your securityholding

Update your securityholding

Your secure access information is:

SRN/HIN: I9999999999

 PLEASE NOTE: For security reasons it is important that you keep your SRN/HIN confidential.

916CR_0_Sample_Proxy/000001/000001/i

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

==> picture [18 x 18] intentionally omitted <==

Change of address. If incorrect, mark this box and make the correction in the space to the left. Securityholders sponsored by a broker (reference number commences with ’ X ’) should advise your broker of any changes.

==> picture [157 x 38] intentionally omitted <==

----- Start of picture text -----

I9999999999
----- End of picture text -----

I 9999999999 I ND

Proxy Form

Appoint a Proxy to Vote on Your Behalf

Please mark to indicate your directions

XX

I/We being a member/s of Imugene Limited hereby appoint

==> picture [21 x 21] intentionally omitted <==

the Chairman of the Meeting

OR



PLEASE NOTE: Leave this box blank if you have selected the Chairman of the Meeting. Do not insert your own name(s).

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the proxy sees fit) at the General Meeting of Imugene Limited to be held at Level 31, 77 St Georges Terrace, Perth, Western Australia on Tuesday, 17 July 2012 at 10:00am (WST) and at any adjournment of that meeting.

Items of Business 

PLEASE NOTE: If you mark the Abstain box for an item, you are directing your proxy not to vote on your behalf on a show of hands or a poll and your votes will not be counted in computing the required majority.

==> picture [88 x 24] intentionally omitted <==

----- Start of picture text -----

For Against Abstain
----- End of picture text -----

Resolution 1 Issue of Shares and Acquisition of a Relevant Interest Resolution 2 Share Placement Resolution 3 Issue of Advisor Options

==> picture [83 x 77] intentionally omitted <==

The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business.

==> picture [532 x 100] intentionally omitted <==

----- Start of picture text -----

SIGN
Signature of Securityholder(s) This section must be completed.
Individual or Securityholder 1 Securityholder 2 Securityholder 3
Sole Director and Sole Company Secretary Director Director/Company Secretary
Contact
Contact Daytime
Name Telephone Date / /
----- End of picture text -----

9 9 9 9 9 9 A

I M U

AI assistant

IMUGENE LIMITED — Proxy Solicitation & Information Statement 2012

65124_rns_2012-06-14_f6e94971-371e-42a3-9fde-ee56df845d45.pdf

IMUGENE LIMITED ACN 009 179 551

NOTICE OF GENERAL MEETING

CONTENTS PAGE

IMPORTANT INFORMATION

TIME AND PLACE OF MEETING

YOUR VOTE IS IMPORTANT

VOTING ELIGIBILITY

VOTING IN PERSON

VOTING BY PROXY

Proxy vote if appointment specifies way to vote

Transfer of non-chair proxy to chair in certain circumstances

BUSINESS OF THE MEETING

AGENDA

ORDINARY BUSINESS

1. RESOLUTION 1 – ISSUE OF SHARES AND ACQUISTION OF A RELEVANT INTEREST

2. RESOLUTION 2 – SHARE PLACEMENT

3. RESOLUTION 3 – ISSUE OF ADVISOR OPTIONS

DATED: 6 JUNE 2012

BY ORDER OF THE BOARD

JULIE FOSTER COMPANY SECRETARY

EXPLANATORY STATEMENT

1. BACKGROUND

1.1 Acquisition of New Intellectual Property – Linguet[TM ]

1.2 Terms of Acquisition

1.3 The Linguet[TM] Technology Platform

1.4 Commercialisation

1.5 Board Appointment

1.6 Management Team

2. RESOLUTION 1 – ISSUE OF SHARES AND ACQUISTION OF A RELEVANT INTEREST

2.1 General

2.2 Item 7 of Section 611 of the Corporations Act

2.3 Item 7 of Section 611 of the Corporations Act

2.4 Specific information required by Item 7 of Section 611 of the Corporations Act & ASIC Regulatory Guide 74

The identity of the acquirer and their associates and any person who will have a relevant interest in the securities to be acquired

A statement of the acquirer’s intentions regarding the future of the Company if Shareholders agree to the Acquisition.

2.5 Reasons for the Acquisition

Advantages

Disadvantages

2.6 Recommendations of Directors

2.7 Independent Expert’s Report

3. RESOLUTION 2 – SHARE PLACEMENT

3.1 General

3.2 Technical information required by ASX Listing Rule 7.1

4. RESOLUTION 3 – ISSUE OF ADVISOR OPTIONS

4.1 General

4.2 Technical information required by ASX Listing Rule 7.1

5. ENQUIRIES

GLOSSARY

SCHEDULE 1 – TERMS AND CONDITIONS OF ADVISOR OPTIONS

( Exercise Notice ).

Financial Services Guide

Financial services we are licensed to provide

General financial product advice

Benefits that we may receive

Remuneration or other benefits received by our employees

Referrals

Associations and relationships

Complaints resolution

Internal complaints resolution process

Referral to external dispute resolution scheme

Contact details

Independent Expert’s Report

AJG/ID/SB/JUMO

Independent Expert’s Report

1. Introduction

Resolution 1 – Issue of shares and acquisition of a relevant interest

Resolution 2 – Share placement

Resolution 3 – Issue of advisor options

“ To consider, and if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

2. Summary and conclusion

Fairness

Reasonableness

3. Summary of Proposed Transaction

Effect of the Proposed Transaction

Purpose of Proposed Transaction

4. Purpose of this Report

Corporations Act

IMUGENE LIMITED Proxy Solicitation & Information Statement 2012