Immuron Limited Interim Financial Report - 31 December 2017 Contents Interim Financial Statements Consolidated Statement of Comprehensive Income 1 Consolidated Balance Sheet 2 Consolidated Statement of Changes in Equity

Financial Report - 31 December 2017

Statement of Comprehensive Income

For the Half-Year 31 December 2017

The above consolidated statement of comprehensive

income should be read in conjunction with the accompanying notes.

The above consolidated balance sheet should be

read in conjunction with the accompanying notes.

Statement of Changes in Equity

the Half-Year 31 December 2017

The above consolidated statement of changes in equity should

be read in conjunction with the accompanying notes.

Consolidated Statement of Cash Flows

For the Half-Year 31 December 2017

The above consolidated statement of cash flows

should be read in conjunction with the accompanying notes.

Notes to the Consolidated Financial Statements

For the Half-Year 31 December 2017

These condensed consolidated

interim report for the half-year reporting period ended 31 December 2017 have been prepared in accordance with Accounting Standard

AASB 134 Interim Financial Reporting and the Corporations Act 2001.

These condensed consolidated

interim report do not include all the notes of the type normally included in an annual financial report. Accordingly, this report

is to be read in conjunction with the annual report for the year ended 31 December 2016 and any public announcements made by Immuron

Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act

The accounting policies adopted

are consistent with those of the previous financial year and corresponding interim reporting period.

A number of new or amended

standards became applicable for the current reporting period, however, the Company did not have to change its accounting policies

or make retrospective adjustments as a result of adopting these standards. There will be some changes to the disclosures in the

30 June 2018 annual report as a consequence of these amendments.

Due to the nature of the Group's

operating profile, the Directors and management do not consider that the fair values of the Group's financial assets and

liabilities are materially different from their carrying amounts at 31 December 2017.

Some of the risks inherent in the development of

pharmaceutical products include the uncertainty of patent protection and proprietary rights, whether patent applications and

issued patents will offer adequate protection to enable product development or may infringe intellectual property rights of

other parties, and obtaining the necessary drug clinical regulatory authority approvals. A particular project may fail the

research and the clinical development process through lack of efficacy or safety, or may be stopped or abandoned due to

strategic imperatives including an assessment that the projects will not deliver a sufficient return on investment or have

been superseded by newer competitive products or technologies. There is a risk that the group will be unable to find suitable

development or commercial partners for its projects, and that these arrangements may not generate material returns for the

Based on current budget forecast assumptions, the group will

need to access additional funding to meet future commitments and to pay its debts when they fall due, as well as funding the ongoing

group's research & development programs. The ability of the group to successfully access additional capital, and the amount

of additional funds required is dependent on the outcome of its product research & development programs.

The Board and Management are confident that the Company will

be able to access, as and when necessary, the required additional funds through a number of available funding opportunities, including

some of which the Company has accessed in the past.

The current net loss for the period is AUD$1,891,944 (2016: AUD$3,409,349)

and the cash inflow / (outflow) for the period is AUD$3,186,278 (2016: (AUD$2,216,618)).

Notwithstanding the requirement to access additional funding

for the group, this interim financial report has been prepared on a going concern basis. Accordingly, the interim report does

not include adjustments relating to the recoverability and classification of recorded asset amounts, or the amounts and classification

of liabilities that might be necessary should the group not continue as a going concern.

Notes to the Consolidated

Financial Statements

For the Half-Year 31 December

The executive management team

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

HyperImmune Products Income

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

Corporate Other items

of income and expenses not directly attributable to R&D or HyperImmune Products segment are disclosed as corporate costs.

Corporate activities primarily occur within Australia. This segment includes interest expenses from financing activities and

The Board assesses the performance

of the operating segments at a number of operating levels including adjusted EBITDA.

The Board assesses the operating

segment at a number of operating levels for the reportable segments for the half-year 31 December 2017 is as follows:

Notes to the Consolidated

Financial Statements

For the Half-Year 31 December

Information Provided to the Board (continued )

Notes to the Consolidated

Financial Statements

For the Half-Year 31 December

4 Contributed Equity

During the half year ended 31 December 2017, the

Company issued the following ordinary shares:

of each type of share

Ordinary shares entitle the

holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held. On

a show of hands every holder of ordinary shares present at a meeting or by proxy, is entitled to one vote. Upon a poll every holder

is entitled to one vote per share held. The ordinary shares have no par value.

Notes to the Consolidated

Financial Statements

For the Half-Year 31 December

shows a breakdown of the Statement of Financial Position line item "other reserves" and the movements in these reserves

during the half year.

the nature and purpose of each reserve is provided below the table.