Edgar Filing: TAPIMMUNE INC

Unassociated Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2012

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to ________________

Commission file number 000-27239

TAPIMMUNE INC.

(Exact name of registrant as specified in its charter)

Nevada	88-0277072
(State or other jurisdiction of incorporation of organization)	(I.R.S. Employer Identification No.)

1551 Eastlake Avenue East, Suite 100 Seattle, Washington	98102
(Address of Principal Executive Offices)	(Zip Code)

(206) 504-7278

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, Par Value $0.001

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 of Section 15(d) of the Act.

Yes o No x

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o (do not check if a smaller reporting company)	Smaller reporting company x

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant computed by reference to the price at which the registrant’s common equity was last sold, as of June 30, 2011 (the last day of the registrant’s most recently completed second fiscal quarter) was approximately $10,370,135.

The registrant had 92,728,474 shares of common stock outstanding as of May 9, 2013.

FORWARD LOOKING STATEMENTS

This annual report contains forward-looking statements that involve risks and uncertainties. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms or other comparable terminology. In evaluating these statements, you should consider various factors, including the assumptions, risks and uncertainties outlined in this annual report. Any of these items may cause our actual results to differ materially from any forward-looking statement made in this annual report. Forward-looking statements in this annual report include, among others, statements regarding our capital needs, business plans and expectations.

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding future events, our actual results will likely vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Some of the risks and assumptions include:

·	our need for additional financing;

·	our limited operating history;

·	our history of operating losses;

·	our lack of insurance coverage;

·	the competitive environment in which we operate;

·	changes in governmental regulation and administrative practices;

·	our dependence on key personnel;

·	conflicts of interest of our directors and officers;

·	our ability to fully implement our business plan;

·	our ability to effectively manage our growth; and

·	other regulatory, legislative and judicial developments.

We advise the reader that these cautionary remarks expressly qualify in their entirety all forward-looking statements attributable to us or persons acting on our behalf. The forward-looking statements in this annual report are made as of the date of this annual report and we do not intend or undertake to update any of the forward-looking statements to conform these statements to actual results, except as required by applicable law, including the securities laws of the United States.

AVAILABLE INFORMATION

TapImmune Inc. files annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”). You may read and copy documents referred to in this Annual Report on Form 10-K that have been filed with the SEC at the SEC’s Public Reference Room, 450 Fifth Street, N.W., Washington, D.C. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You can also obtain copies of our SEC filings by going to the SEC’s website at http://www.sec.gov.

REFERENCES

As used in this annual report: (i) the terms “we”, “us”, “our”, “TapImmune” and the “Company” mean TapImmune Inc.; (ii) “SEC” refers to the Securities and Exchange Commission; (iii) “Securities Act” refers to the United States Securities Act of 1933, as amended; (iv) “Exchange Act” refers to the United States Securities Exchange Act of 1934, as amended; and (v) all dollar amounts refer to United States dollars unless otherwise indicated.

__________

TABLE OF CONTENTS

ITEM 1.	BUSINESS	1
ITEM 1A.	RISK FACTORS	10
ITEM 1B.	UNRESOLVED STAFF COMMENTS	10
ITEM 2.	PROPERTIES	10
ITEM 3.	LEGAL PROCEEDINGS	10
ITEM 4.	MINE SAFETY DISCLOSURE	10
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
	AND ISSUER PURCHASES OF EQUITY SECURITIES	11
ITEM 6.	SELECTED FINANCIAL DATA	13
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS	13
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	17
ITEM 8.	FINANCIAL STATEMENTS	18
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
	FINANCIAL DISCLOSURE	52
ITEM 9A.	CONTROLS AND PROCEDURES	52
ITEM 9B.	OTHER INFORMATION	53
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	53
ITEM 11.	EXECUTIVE COMPENSATION	55
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
	RELATED STOCKHOLDER MATTERS	57
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
	INDEPENDENCE	58
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	59
ITEM 15.	EXHIBITS	60

iii

PART I

ITEM 1. BUSINESS

Company Overview

TapImmune is a clinical-stage immunotherapy company specializing in the development of innovative peptide and gene-based immunotherapeutics and vaccines for the treatment of oncology and infectious disease. Unlike other vaccine technologies that narrowly address the initiation of an immune response, TapImmune's ("Prime" and "Boost") approach broadly stimulates the cellular immune system by enhancing the function of killer T-cells and T-helper cells and by restoring antigen presentation in tumor cells allowing their recognition and killing by the immune system. Restoration of antigen presentation is achieved through re-expression of a protein pump known as “TAP”, which is located within cells and which is essential to the processing of foreign (microbial) or autologous antigens, and subsequent presentation to the immune system for eradication of the cancer or infected cell. We currently have none of our product candidates on the market and are focusing on the clinical development and testing of our product candidates. A Phase I study at the Mayo Clinic is currently evaluating the safety and immune responses of a set of proprietary HER2/neu antigens for a HER2/neu breast cancer vaccine. TapImmune has the exclusive Option to license this technology. The Company is also developing TAP-based prophylactic vaccines commercially suitable for the prevention of infectious diseases and as Biodefense agents. We will file grants in collaboration with the Mayo Clinic for the biodefense applications of this technology and expect to file additional grants to support preclinical work on “boost” strategies for HER2/neu breast cancer. As a vaccine component, the gene based TAP technology has the potential to significantly improve the efficacy of both prophylactic and immunotherapeutic vaccines as it addresses a fundamental mechanism for T cell recognition and response. Unlike other vaccine technologies that address only the initiation of immune responses, TAP expression also has the unique ability to enhance the effector function of mature killer T cells. This enhancement of effector function is potentially complementary to any/all vaccine approaches that are designed to enhance cellular responses

The current standard therapies for cancer treatment include surgery, radiation therapy and chemotherapy. However, we believe that these treatments are not precise in targeting only cancerous cells and often fail to remove or destroy all of the cancer. The remaining cancer cells may then grow into new tumors, which can be resistant to further chemotherapy or radiation, which may result in death. In the United States, deaths from cancer are second only to cardiovascular deaths. Our breast cancer immunotherapeutic vaccine candidate is being developed for use in this setting as an adjuvant treatment to prevent recurrent disease.

Management strongly believes that the comprehensive scientific underpinnings of our overall approach, to elicit the production of both T-helper cells and T-killer cells, will provide the Company with highly competitive product candidates for the treatment of HER2/neu positive breast cancer with additional applications in ovarian and colorectal cancer.

In May 2012, we entered into a Material Transfer Agreement with the Fred Hutchinson Cancer Research Center (“FHCRC”), Seattle, WA. The initial aim of this collaboration is to determine levels of TAP1/TAP2 in tissues taken from melanoma patients in a clinical trial at FHCRC using adoptive T-cell therapy and to correlate these levels with clinical outcomes. In an extension of this collaboration, we plan to investigate the expression of TAP1/TAP2 by immunohistochemistry in tumors prior to treatment with cellular adoptive immunotherapy as part of a new IND approved in March 2013 (filed at the Fred Hutchinson Cancer Center) ‘Cellular Adoptive Immunotherapy Using Autologous Tumor-Infiltrating Lymphocytes Following Lymphodepletion with Cyclophosphamide and Fludarabine for patients with Metastatic Melanoma’.

Regarding our programs for the development of vaccines aimed at viral pandemics/biodefense, we believe that collaborations with the Mayo Clinic have progressed well and studies on the immunogenicity of novel smallpox antigens in mice treated with both antigens and TAP expression vectors are ongoing. We plan to complete animal efficacy and human safety studies through non-dilutive grant funding in collaboration with Dr. Greg Poland and colleagues at the Mayo Clinic and anticipate that further development will be completed through strategic corporate partnerships. The use of non-dilutive grant funding to progress this area allows the Company to focus the majority of its internal resources on HER2/neu breast cancer.

The facilities at 1551 Eastlake Avenue, Seattle have exceeded our expectations and allowed us to continue to recruit top-class scientific staff while at the same time effectively leverage world class resources made available to us and manage our cash flow. We have added technical staff in the areas of molecular biology and immunology. Our small core team (5 scientists) has allowed us to establish in-house technical expertise in molecular biology (expression vector development) and immunology to underpin our current and future development projects and to optimally work with external collaborators. It has also allowed us to make significant progress in the refinement and focus of clinical programs to take advantage of new antigens, the emerging field of vaccinomics and vaccine development strategies. In addition, it has allowed us to start generating new intellectual property (IP) to add to our core TAP IP and the antigen IP from the Mayo Clinic that we have either licensed or have exclusive options to license.

Over the past few months, we have, in a challenging financing climate, raised sufficient working capital to fund and progress our operations. We believe that we continue to make good progress with the resources available to us. With the start of clinical programs and our focus on securing non-dilutive financing from a number of sources, management is confident that our current pathway will secure longer term capital to finance and accelerate our activities. The strength of our science and development approaches is becoming more widely appreciated, particularly as our clinical program generates data and as we embrace additional collaborations with leading institutions and corporations.

While the pathway to successful product development takes time and significant resources, we believe that we have put in place the technical and corporate fundamentals for success. The strength of our product pipeline gives us a unique opportunity to make a major contribution to global health care.

Company History

We currently trade on the OTC Bulletin Board under the symbol “TPIV”, currently “TPIVE” due to delinquent 10K for late filing.

We were incorporated under the laws of the State of Nevada in 1991 under the name “Ward’s Futura Automotive Ltd”. We changed our name a number of times since 1991 and, in July 2002, we completed the acquisition of GeneMax Pharmaceuticals Inc. (“GeneMax Pharmaceuticals”), a Delaware corporation, in a reverse merger and changed our name to “GeneMax Corp”. As a result of this transaction, the former stockholders of GeneMax Pharmaceuticals then owned 75% of the total issued and outstanding shares of GeneMax Corp. GeneMax Pharmaceuticals is now a wholly owned subsidiary of TapImmune, and GeneMax Pharmaceuticals Canada Inc. (“GPCanada”), a British Columbia corporation, is a wholly owned subsidiary of GeneMax Pharmaceuticals. On June 28, 2007, we approved a name change to TapImmune Inc.

The Immunotherapy Industry for Cancer

Management believes that there is a critical need for more effective cancer therapies. Management further believes that the global market for effective cancer treatments is large, and that immunotherapies representing potential treatments for metastatic cancer are an unmet need in the area of oncology.

The human immune system appears to have the potential to clear cancers from the body, based on clinical observations that some tumors spontaneously regress when the immune system is activated. Most cancers are not very “immunogenic”, however, meaning that the cancers are not able to induce an immune response because they no longer express sufficient levels of key proteins on their cell surface, known as Major Histocompatability Class I or MHC Class I proteins. In healthy cells, these proteins provide the information to the immune system that defines whether the cell is healthy or, in the case of cancer or viral infection, abnormal. If the MHC Class I proteins signal that the cells are abnormal, then the immune system’s T-cells are activated to attack and kill the infected or malignant cell.

In many solid cancer tumors, the TAP protein system does not function and, therefore, the immune system is not stimulated to attack the cancer. Management believes that although a number of cancer therapies have been developed that stimulate the immune system, these approaches have often proven ineffective because the cancers remain invisible to the immune system due to this apparent lack of or low expression of the TAP protein.

By restoring TAP expression to TAP-deficient cells, the MHC Class I protein peptide complexes could signal the immune system to attack the cancer. The strategic vision of TapImmune is to be a product-driven biotechnology company, focusing primarily on use of its patented TAP technology to restore the TAP function within cancerous cells, thus making them immunogenic, or more “visible” to cancer fighting immune cells. Management believes that this cancer vaccine strategy will provide the most viable therapeutic approach that addresses this problem of “non-immunogenicity” of cancer. Management believes that this therapy may have a strong competitive advantage over other cancer therapies, since restoring the TAP protein will direct the immune system to specifically target the cancerous cells without damaging healthy tissue.

As a key part of its overall strategy, and with adequate funding, the Company is pursuing the development of prophylactic vaccines against infectious microbes and will also do so in partnership with other vaccine developers. The Company intends to develop the TAP technology for use as a vaccine that restores normal immune recognition for the treatment of cancer and supplements immune recognition for the development of prophylactic vaccines.

TapImmune’s Target Market and Strategy

With the required funding in place, we will support and expand on our key infectious disease partnerships, including our collaboration efforts with the Mayo Clinic and others. We will focus our product development in oncology both alone and with corporate partners and collaborators including the Mayo Clinic for HER2/neu positive Breast Cancer, and smallpox, and the Fred Hutchinson Cancer Center for melanoma. Cancer encompasses a large number of diseases that affect many different parts of the human body. The diversity of cancer types and their overall prevalence create a large need for new and improved treatments. Management believes that there is a significant market opportunity for a cancer treatment that utilizes the highly specific defense mechanisms of the immune system to attack cancers. IMS has estimated that the cancer market will mushroom from $48 billion to $75 billion in 2012 with biopharma companies anticipating that cancer vaccines will grab a large slice of the market (Fierch Biotech, March 23, 2010). The goal of TapImmune management is to have the FDA approve our cancer vaccines within the next few years so that we can secure a portion of this market.

Management also believes that our expression vector approach will provide a flexible and unique platform for the creation of new vaccines that can rapidly respond to emerging viral tbreats/bioterrorism in addition to enhancing the efficacy of current vaccines in the treatment of infectious disease. It will be a key business development strategy to pursue additional partnerships and joint research and development ventures with vaccine manufacturers and pharmaceutical companies to bring new and improved vaccines to market. This strategy includes the development of vaccines for pandemic diseases and for bioterrorism threats. The market for prophylactic vaccines is around $6 Billion and is expected to reach $11 billion in 2010 (Frost & Sullivan). Management believes that our adjuvant will increase the potency of many of the currently available vaccines and lead to the creation of better, more effective new vaccines, thereby allowing us to participate in this large market through novel new products and in combination with existing vaccines.

Our business strategy in cancer is to take products through Phase II clinical trials and then to partner with pharmaceutical marketing organizations ahead of Phase III trials. In the infectious disease/biodefense area our business strategy is to seek join research and development partnerships on our infectious disease platform with companies seeking to expand their product portfolios.

Management also believes that our prophylactic vaccine adjuvant will be a catalyst in the development of new vaccines and will serve to enhance the efficacy of current vaccines in the treatment of infectious disease. It will be a key business development strategy to pursue additional partnerships and joint research and development ventures with vaccine manufacturers and pharmaceutical companies to bring new and improved vaccines to market. This strategy includes the development of vaccines for pandemic diseases and for bioterrorism threats. The global market for vaccines is dominated by five companies—Merck, GlaxoSmithKline, Sanofi Pasteur (the vaccines division of Sanofi SA [SNY-NYSE]), Pfizer Inc. (PFE-NYSE), and Novartis—with Pfizer, GlaxoSmithKline, Sanofi, and Novartis collectively accounting for approximately 74% of the market (Source: Transparency Market Research’s Global Vaccine Market Analysis and Forecast 2011-2016). This market is estimated at roughly $30 billion worldwide, with the U.S. contributing approximately $20 billion. Importantly, there still exist significant development opportunities in the global vaccine market, as there are more than 300 infectious diseases yet effective prophylactic therapies for only approximately 15% of these (Source: The Life Sciences Report’s “Vaccine Therapies Hold Promise for Investors: Stephen Dunn,” April 12, 2012). Management believes that our TAP Platform technology will increase the potency of many of the currently available vaccines and lead to the creation of better, more effective new vaccines, thereby allowing us to participate in this large market through novel new products and in combination with existing vaccines.

Research and Development Efforts

We direct our research and development efforts towards the development of immunotherapeutic and prophylactic vaccine products for the treatment of cancer and protection against pathogenic microbes respectively, using our “prime and boost’ strategy that uses proprietary peptide antigens and TAP, collectively known as our TAPvax technology platform. We will continue to focus our efforts on the development of therapeutic vaccines for applications in cancer treatment while demonstrating the breadth of our technology approach for the development of prophylactic vaccines and its ability to complement currently approved and emerging products in both cancer therapeutics and prophylactic vaccines against microbes. This approach allows us to pursue our own internal product development while positioning us to enter into multiple partnerships and licensing agreements. The first generation of TAP vaccines that was used in animal preclinical studies were based on insertion of TAP genes into a proprietary modified adenovirus vector. Based on our clinical approaches to HER2/neu breast cancer a new generation of vaccine technologies that use a peptide “prime” and an expression vector “boost” that includes peptide antigens and TAP (in viral and plasmid DNA approaches) are being developed. This strategy provides for the most cost effective and rapid progression through the clinic. Our development strategy takes advantage of our potential partners’ capabilities while reducing our overhead costs. Production of clinical grade vaccine product to be used in preclinical and clinical studies will be manufactured in production facilities with Good Manufacturing Practices (“GMP”) certification. We will also plan to rely on our new collaboration agreements with Mayo clinic and the Fred Hutchinson Cancer Research Center to demonstrate the use of TAP in new vaccine candidates.

Products and Technology in Development

TAP Cancer Vaccine

Based on earlier research at UBC Biomedical Research Centre in Vancouver BC, our overall objective is to successfully develop the patented TAP gene vector technology to restore the TAP protein, with the objective being to develop the TAP technology as a therapeutic cancer vaccine that will restore the normal immune recognition of cancer cells. A TAP Cancer Vaccine will be targeted at those cancers that are deficient in the TAP protein, which include breast cancer, prostate cancer, lung cancer, liver cancer, melanoma, renal cancer and colorectal cancer. TAP gene vectors will be used clinically in concert with proprietary antigen technologies in a “Prime and Boost” strategy. In our HER2/neu breast cancer program, which has started at the Mayo Clinic, proprietary HER2/neu antigens licensed from the Mayo Clinic will be used as the “Prime” and a TAP gene vector also containing antigens will be used as the “Boost”.

As part of a vaccine approach a TAP gene vector will deliver the genetic information required for the production of the TAP protein in the target cancer cell. This will trigger the cancer cell’s ability to effectively identify itself to the body’s immune system by transporting the cancer antigen peptides to the cell surface using the individual’s specific MHC Class I proteins. As a result, we believe that the immune response could be targeted to the entire repertoire of cancer antigen peptides produced by the cancer cell, rather than just to a single cancer antigen, as delivered by current cancer vaccines. A TAP Cancer Vaccine could allow the immune response to respond to the cancer even if the TAP protein and genetic information were only delivered to a small portion of the cancer cells. In addition, a TAP Cancer Vaccine would generate an immune response to any TAP-deficient cancer, regardless of the patient’s individual genetic variability either in the MHC Class I proteins or in the cancer-specific proteins and resultant peptides.

In general, a “cancer vaccine” is a therapy whose goal is to stimulate the immune system to attack tumors. Management believes that most current cancer vaccines contain either cancer-specific proteins that directly activate the immune system or contain genetic information, such as DNA, that encodes these cancer-specific proteins. Management believes that there are a number of key conditions that must be met before a cancer vaccine can be effective in generating a therapeutic immune response: (i) the cancer antigen peptide delivered by the vaccine has to be recognized by the immune system as “abnormal” or “foreign” in order to generate a strong and specific T-cell response; (ii) the same cancer antigen peptide has to be displayed on the surface of the cancer cells in association with the MHC Class I proteins; and (iii) these cancer antigen peptides then have to be sufficiently different from normal proteins in order to generate a strong anti-tumor response.

If these conditions are all met, then management believes that such cancer vaccines should generate a sufficiently strong immune response to kill the cancer cells. However, the identification of suitable cancer-specific antigen proteins to use in these therapeutic vaccines has proven extremely complex. In addition, the MHC Class I proteins are highly variable, with over 100 different types in humans and, as a result, any one-cancer antigen peptide will not produce an immune response for all individuals. Cancers are “genetically unstable” and their proteins are highly variable, so that the selected cancer antigen protein may result in the immune system only attacking a small subset of the cancerous cells.

Laboratory Testing of the TAP Cancer Vaccine

Management believes that key milestones of efficacy in animal models of cancer have been achieved and that scientific research from other laboratories has validated the efficacy data. The proof of principle for the TAP technology as a cancer vaccine has been established in research conducted at UBC in metastatic models that have multiple defects in the “antigen presentation pathway” resulting in poor detection of cancer cells by the immune system. These studies demonstrating that introduction of the TAP gene can restore an immune response have been published in a number of peer-reviewed leading scientific journals (links to publications can be found at www.tapimmune.com). We plan to conduct additional pre-clinical work on novel expression vectors that can express both TAP proteins and peptide antigens.

Pre-Clinical Testing

Once the formal pre-clinical testing is completed, we intend to compile and summarize the data and submit it to the United States Federal Drug Administration (or “FDA”) and/or the Canadian Health Canada (or “HC”), and/or other national regulatory agencies, in the form of an investigational new drug application. We anticipate that these applications would include data on vaccine production, animal studies and toxicology studies, as well as proposed protocols for the Phase I human clinical trials, described below.

Phase I Human Clinical Trials – HER2/neu Vaccine Technology – Mayo Clinic

On June 1, 2010, we signed an exclusive licensing option agreement with the Mayo Clinic, Rochester MN for clinical development of a novel set of Class IIHER2/neu antigens discovered in breast cancer patients. On April 16, 2012 we announced the signing of an exclusive license agreement with the Mayo Clinic for a newly discovered Class I HER2/neu antigen. Following acceptance of an IND and IRB approval at the Mayo Clinic, for a Phase I trial, the first patients were treated in Q2 2012.The primary endpoints for this trial are vaccine safety and immune responses including generation of antigen-specific T-cells. The time to disease progression in breast cancer patients will be followed as a secondary endpoint In parallel we will complete the manufacturing of the Class I antigen and the filing of an amendment to the IND for a Phase Ib trial that combines the Class I and Class II antigens. In parallel we will complete preclinical work on the DNA plasmid vector expressing peptide antigens and TAP at conduct toxicology studies to enable subsequent Phase I human clinical trials on the “boost” technology for use in combination in later stage clinical trials with the HER2/neu antigens.

Clinical trials to support new drug applications are typically conducted in three sequential phases, although the phases may overlap. For immunotherapeutics/vaccine, Phase I studies are conducted in cancer patients and include assessment of safety and the measurement of cellular immune responses. Phase II usually involves studies in a limited patient population to assess the clinical activity of the drug in specific targeted indications, assess dosage tolerance and optimal dosage and continue to identify possible adverse effects and safety risks. If the therapeutic candidate is found to be potentially effective and to have an acceptable safety profile in Phase II evaluations, Phase III trials are undertaken to further demonstrate clinical efficacy and to further test for safety within an expanded patient population at geographically dispersed clinical trial sites. Management believes that the combination of Class I and Class II HER2/neu antigens plus TAP will give us the leading HER2/neu vaccine platform in the clinic.

Infectious Disease Application for “TAP” Adjuvant

TapImmune plans to develop or license out our technology for the creation of enhanced viral vaccines, such as for smallpox and others, based on our findings that TAP can augment immune responses. We have presented data showing that increasing TAP expression in TAP-competent antigen presenting cells (APCs) and/or virus infected cells increases the antigenic peptide associated with MHC class I expression on the cell surface, and leads to increased specific T cell-mediated immune responses. We believe this technology can add great value to the creation of new vaccines and enhance those that already exist. Our collaboration with the Mayo Clinic is evidence of this and we will continue to pursue additional partnerships and collaborations as a key strategy to expand our R&D program to optimize resources and to reduce costs and development times. In our collaboration with the Mayo Clinic efficacy studies in small animals on a novel smallpox vaccine that includes TAP were initiated in 2011 and are progressing well. A set of peptide antigens that are as immunogenic in animals as the intact virus have been identified and are being tested together with TAP expression vectors. We have identified this product as an early potential licensing candidate as it potentially is safer, cheaper to produce and has a longer shelf-life than products currently stockpiled by the US government. The subsequent regulatory pathway for this product is to use the FDA’s “Animal Efficacy Rule” for completion of efficacy studies in primates followed by Phase I clinical studies on vaccine safety.

The cost of funding preclinical and clinical programs (through Phase II) in cancer and infectious disease is estimated to be approximately $5-10 million. The majority of this funding will be applied to progress our HER2/neu breast cancer product through Phase II clinical. We will continue to seek sources of non-dilutive grant funding for infectious disease programs.

Strategic Relationships

Mayo Foundation for Medical Education and Research

On May 26, 2010 we signed a Technology Option Agreement with the Mayo Foundation for Medical Education and Research, Rochester, MN, for the evaluation of HER2/neu peptide epitopes as antigens for a breast cancer vaccine. The agreement grants TapImmune an exclusive worldwide option to become the exclusive licensee of the technology after completion of Phase I clinical trials.

Following approval of the IND by the FDA in July, 2011, TapImmune and the Mayo Foundation executed a Sponsored Research Agreement for the clinical trial.

On May 4, 2012, Mayo IRB approval was confirmed and patient dosing started in August 2012. Interim safety analysis on the first five patients was completed successfully allowing continuation of the trial.

On July 24, 2010, we signed a Research and Technology License Option Agreement with the Mayo Foundation for Medical Education and Research, Rochester, MN, to evaluate novel smallpox peptide antigens. The Agreement grants TapImmune an exclusive worldwide option to become the exclusive licensee of the smallpox vaccine technology after research studies have been completed under the terms of the agreement.

On April 16, 2012, we signed an Exclusive Agreement with the Mayo Foundation for Education & Research, Rochester, MN, to License a proprietary MHC Class I HER2/neu antigen technology. This work, performed in the laboratory of Dr. Keith Knutson at Mayo Clinic, was published in the Journal of Immunology (2013), 190, 479-488, and describes the discovery of a novel HER-2/neu Class I epitope (p373-382). The significance of this work is that this newly discovered antigen is a naturally occurring antigen processed by the proteasome and elicits peptide-specific T-cell responses. This results in stronger binding to HLA-A2 and more efficient killing of HER-2/neu positive breast cancer cells by activated T-cells compared to the Class I epitope, p369-377 (E75) which was not naturally processed by the proteasome.

Intellectual Property, Patents and Trademarks

Patents and other proprietary rights are vital to our business operations. We protect our technology through various United States and foreign patent filings, and maintain trade secrets that we own. Our policy is to seek appropriate patent protection both in the United States and abroad for its proprietary technologies and products. We require each of our employees, consultants and advisors to execute a confidentiality agreement upon the commencement of any employment, consulting or advisory relationship with us. Each agreement provides that all confidential information developed or made known to the individual during the course of the relationship will be kept confidential and not be disclosed to third parties except in specified circumstances. In the case of employees, the agreements provide that all inventions conceived of by an employee shall be our exclusive property.

Patent applications in the United States are maintained in secrecy until patents are issued. There can be no assurance that our patents, and any patents that may be issued to us in the future, will afford protection against competitors with similar technology. In addition, no assurances can be given that the patents issued to us will not be infringed upon or designed around by others or that others will not obtain patents that we would need to license or design around. If the courts uphold existing or future patents containing broad claims over technology used by us, the holders of such patents could require us to obtain licenses to use such technology.

Method of Enhancing Expression of MHC Class I Molecules Bearing Endogenous Peptides

On March 26, 2002, the United States Patent and Trademark Office issued US Patent No. 6,361,770 to UBC for the use of TAP-1 as an immunotherapy against all cancers. The patent is titled “Method of Enhancing Expression of MHC Class I Molecules Bearing Endogenous Peptides” and provides comprehensive protection and coverage to both in vivo and ex vivo applications of TAP-1 as a therapeutic against all cancers with a variety of delivery mechanisms. The inventors were Dr. Jefferies, Dr. Reinhard Gabathuler, Dr. Gerassinmoes Kolaitis and Dr. Gregor S.D. Reid, who collectively assigned the patent to UBC under an assignment agreement. The patent expires March 23, 2014. We have pending applications for patent protection for this patent in Europe and in Japan.

Method of Enhancing an Immune Response

U.S. patent No. 7,378,087, issued May 27 2008. The patent claims relate to methods for enhancing the immune response to tumor cells by introducing the TAP molecule into the infected cells. Patent applications are pending on other aspects of the Company’s technology. The inventors were Jefferies, Wilfred A.; Zhang, Qian-Jin; Chen, Susan Shu-Ping; Alimonti, Judie B., who collectively assigned the patent to UBC under an assignment agreement.

Method of Identifying MHC Class I Restricted Antigens Endogenously Processed by a Secretory Pathway

On August 11, 1998, the U.S. Patent and Trademark Office issued US Patent No. 5,792,604 to UBC, being a patent for the use of bioengineered cell lines to measure the output of the MHC Class I restricted antigen presentation pathway as a way to screen for immunomodulating drugs. The patent is titled “Method of Identifying MHC Class I Restricted Antigens Endogenously Processed by a Secretory Pathway.” This patent covers the assay which can identify compounds capable of modulating the immune system. The inventors were Dr. Jefferies, Dr. Gabathuler, Dr. Kolaitis and Dr. Reid, who collectively assigned the patent to UBC under an assignment agreement. The patent expires on March 12, 2016. We have been granted patent protection for this patent in Finland, France, Germany, Italy, Sweden Switzerland and the United Kingdom, and have applied for patent protection in Canada and Japan.

Method of Enhancing an Immune Response

On October 27, 2011 The US Patent Office has issued Patent 7,994,146 entitled “Method of Enhancing an Immune Response”. The invention relates to a method of enhancing an immune response to an antigen by augmenting the level of TAP (Transporters Associated with Antigen Processing) molecule in a target cell bearing the antigen. This patent details application to treating vaccinia, herpes simplex and influenza virus infections and small cell lung cancer. Levels of TAP in humans correlate with susceptibility to certain diseases and the ability to respond to a vaccine.

TAP Vaccines and other filings

We intend to continue to work with our collaborators to file additional patent applications with respect to any novel aspects of our technology to further protect our intellectual property portfolio. New IP on novel expression vectors coding for peptide antigen arrays and TAP1/2 and developed in TapImmune laboratories will be filed in Q2-3, 2013.

The oncology industry is characterized by rapidly evolving technology and intense competition. Many companies of all sizes, including a number of large pharmaceutical companies as well as several specialized biotechnology companies, are developing various immunotherapies and drugs to treat cancer. There may be products on the market that will compete directly with the products that we are seeking to develop. In addition, colleges, universities, governmental agencies and other public and private research institutions will continue to conduct research and are becoming more active in seeking patent protection and licensing arrangements to collect license fees and royalties in exchange for license rights to technologies that they have developed, some of which may directly compete with our technologies and products. These companies and institutions may also compete with us in recruiting qualified scientific personnel. Many of our potential competitors have substantially greater financial, research and development, human and other resources than us. Furthermore, large pharmaceutical companies may have significantly more experience than we do in pre-clinical testing, human clinical trials and regulatory approval procedures. Such competitors may develop safer and more effective products, obtain patent protection or intellectual property rights that limit our ability to commercialize products, or commercialize products earlier than we do.

Management expects technology developments in the oncology industry to continue to occur at a rapid pace. Commercial developments by any competitors may render some or all of our potential products obsolete or non-competitive, which could materially harm the Company’s business and financial condition.

Management believes that a number of companies, which are developing various types of similar immunotherapies and therapeutic cancer vaccines to treat cancer, could be our major competitors including: CellGenSys Inc., Dendreon Corp., Genzyme Molecular Oncology, Immune Design, Oncothyreon, Celldex, BN Immunotherapeutics, Immunocellular, Galena, Antigen Express,Transgene S.A., and Bavarian Nordic.

Government Regulation

United States

The design, research, development, testing, manufacturing, labeling, promotion, marketing, advertising and distribution of drug products are extensively regulated by the FDA in the United States and similar regulatory bodies in other countries. The regulatory process is similar for a new drug application, or NDA. The steps ordinarily required before a new drug may be marketed in the United States, which are similar to steps required in most other countries, include: (i) pre-clinical laboratory tests, pre-clinical studies in animals, formulation studies and the submission to the FDA of an initial NDA; (ii) adequate and well-controlled clinical trials to establish the safety and effectiveness of the drug for each indication; (iii) the submission of the NDA to the FDA; and (iv) review by an FDA advisory committee and approval by the FDA.

Pre-clinical tests include laboratory evaluation of product chemistry, preparation of consistent test batches of product to what is known as GLP, toxicology studies, animal pre-clinical efficacy studies and manufacturing pursuant to what is known as GMP. The results of pre-clinical testing are submitted to the FDA as part of an initial NDA. After the filing of each initial NDA, and assuming all pre-clinical results have been approved, a thirty-day waiting period is required prior to the commencement of clinical testing in humans. At any time during this thirty-day period or at any time thereafter, the FDA may halt proposed or ongoing clinical trials until the FDA authorizes trials under specified terms. The initial NDA process may be extremely costly and substantially delay development of products. Moreover, positive results of pre-clinical tests will not necessarily indicate positive results in subsequent clinical trials.

After successful completion of the required clinical trials, a NDA is generally submitted. The NDA is usually reviewed by an outside committee consisting of physicians, scientists, and at least one consumer representative. The advisory committee reviews, evaluates and recommends whether the application should be approved, but the FDA is not bound by the recommendation of an advisory committee. The FDA may request additional information before accepting a NDA for filing, in which case the application must be resubmitted with the additional information. Once the submission has been accepted for filing, the FDA or the advisory committee reviews the application and responds to the applicant. The review process is often extended by FDA requests for additional information or clarification. The FDA cites 24 months as the median time for NDA review.

If the FDA evaluations of the NDA and the manufacturing facilities are favorable, the FDA may issue an approval letter. An approval letter will usually contain a number of conditions that must be met in order to secure final approval of the NDA and authorization of commercial marketing of the drug for certain indications. The FDA may also refuse to approve the NDA or issue a not approval letter, outlining the deficiencies in the submission and often requiring either additional testing or information or withdrawal of the submission.

The manufacturers of approved products and their manufacturing facilities are subject to continual review and periodic inspections. We intend to enter into a contract with SAFC Pharma for commercial scale manufacturing of the TAP Cancer Vaccine, therefore our ability to control compliance with FDA manufacturing requirements will be limited.

Approved drugs are subject to ongoing compliance requirements and identification of certain side effects after any of the drug products are on the market. This could result in issuance of warning letters, subsequent withdrawal of approval, reformulation of the drug product, and additional pre-clinical studies or clinical trials.

Canada

In Canada, the Therapeutic Products Directorate and the Biologics and Genetic Therapies Directorate of HC ensure that clinical trials are properly designed and undertaken and that subjects are not exposed to undue risk. Regulations define specific Investigational New Drug Submission (or IND) application requirements, which must be complied with before a new drug can be distributed for trial purposes. The Directorates currently review the safety, efficacy and quality data submitted by the sponsor and approve the distribution of the drug to the investigator. The sponsor of the trial is required to maintain accurate records, report adverse drug reactions, and ensure that the investigator adheres to the approved protocol. Trials in humans should be conducted according to generally accepted principles of good clinical practice. Management believes that these standards provide assurance that the data and reported results are credible and accurate, and that the rights, integrity, and privacy of clinical trial subjects are protected.

Sponsors wishing to conduct clinical trials in Phases I to III of development must apply under a 30-day default system. Applications must contain the information described in the regulations, including: a clinical trial attestation; a protocol; statements to be contained in each informed consent form, that set out the risks posed to the health of clinical trial subjects as a result of their participation in the clinical trial; an investigator’s brochure; applicable information on excipients (delivery vehicles); and chemistry and manufacturing information.

The sponsor can proceed with the clinical trial if the Directorates have not objected to the sale or importation of the drug within 30 days after the date of receipt of the clinical trial application and Research Ethics Board approval for the conduct of the trial at the site has been obtained. Additional information is available on Health Canada’s website - www.hc-sc.gc.ca.

Other Jurisdictions

Outside the United States and Canada, the Company’s ability to market drug products is contingent upon receiving marketing authorization from the appropriate regulatory authorities. Management believes that the foreign regulatory approval process includes all of the complexities associated with FDA approval described above. The requirements governing the conduct of clinical trials and marketing authorization vary widely from country to country. At present, foreign marketing authorizations are applied for at a national level, although within the European Union procedures are available to companies wishing to market a product in more than one member country.

Product Liability and Insurance

Once we are able to commence the sale of our products into the market, we will face the risk of product liability claims. Because we are not yet selling our products, we have not experienced any product liability claims to date and we do not yet maintain product liability insurance. Management intends to maintain product liability insurance consistent with industry standards upon commencement of the marketing and distribution of the TAP Cancer Vaccine. There can be no assurance that product liability claims will not exceed such insurance coverage limits, which could have a materially adverse effect on our business, financial condition or results of operations, or that such insurance will continue to be available on commercially reasonable terms, if at all.

Employees

TapImmune has 6 full-time employees. The management team is comprised of Dr. Glynn Wilson (Chief Executive Officer and Principal Executive Officer and Acting Principal Accounting Officer), Mark Reddish (Vice President, Development), Dr. Robert Florkievicz (Head of Research) and Venissa Izaguirre (Operations Manager). Since May 7, 2012, TapImmune does not have Officers resident in British Columbia.

ITEM 1A. RISK FACTORS

We are not required to provide the information required by this item because we are a smaller reporting company.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

We do not own any real estate or other properties. Our registered office is located at 1551 Eastlake Ave East, Seattle, WA 98102. We rent office space at this address and have a two year lease ending in January 2014.

ITEM 3. LEGAL PROCEEDINGS

In May 2012, we issued 11,200,000 shares of our common stock to two consultants. We have contested the validity of the issuances of this common stock based on our belief that the consultants did not perform the services agreed to under their respective consulting agreements. The two consultants have threatened to sue us on perceived damages suffered as a result of our contesting the issuances under the consulting agreements.

Management is not aware of any legal proceedings contemplated by any government authority or any other party involving the Company. As of the date of this Annual Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceeding. Management is not aware of any other legal proceedings pending or threatened against the Company.

ITEM 4. MINE SAFETY DISCLOSURE

Not Applicable

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock is traded on the Over the Counter Bulletin Board (“OTCBB”) under the symbol “TPIV.OB” and on the Frankfurt and Berlin Stock Exchanges under the symbol “GX1A.” The listing on the Berlin Stock Exchange was done without the Company’s knowledge and consent.

The market for our common stock is limited, volatile and sporadic. The following table sets forth, for the periods indicated, the high and low bid prices of our common stock as reported on the OTCBB. The following quotations reflect inter-dealer prices, without retail mark-up, markdown, or commissions, and may not reflect actual transactions.

	High Bid		Low Bid

Fiscal Year 2013
March 31, 2013	$	0.158	$	0.092

Fiscal Year 2012
December 31, 2012	$	0.13	$	0.08
September 30, 2012	$	0.16	$	0.081
June 30, 2012	$	0.27	$	0.11
March 31, 2012	$	0.18	$	0.15

Fiscal Year 2011
December 31, 2011	$	0.249	$	0.148
September 30, 2011	$	0.275	$	0.152
June 30, 2011	$	0.35	$	0.15
March 31, 2011	$	0.30	$	0.165

The last reported sales price for our shares on the OTCBB as of May 3, 2013, was $0.042 per share. As of May 3, 2012, we had 497 shareholders of record.

Dividend Policy

No dividends have been declared or paid on our common stock. We have incurred recurring losses and do not currently intend to pay any cash dividends in the foreseeable future.

Securities Authorized For Issuance under Compensation Plans

The following table sets forth information as of December 31, 2012:

Equity Compensation Plan Information

	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted average exercise price of outstanding options, warrants and rights (b)	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
(a) Equity compensation plans approved by security holders	Nil	Nil	Nil
(b) Equity compensation plans not approved by security holders	6,778,000(1)	$0.18	3,222,000
	6,778,000(1)	$0.18	3,222,000

(1) The plan under which these shares were issued was approved by the Board of Directors and the shareholders in 2009 but did not come into effect until February 22, 2010.

Stock Incentive Plan

On October 14, 2009, the Company adopted the 2009 Stock Incentive Plan (the “2009 Plan”). The 2009 Plan allows for the issuance of up to 10,000,000 common shares. Options granted under the Plan shall be at prices and for terms as determined by our Board of Directors, and may have vesting requirements as determined by our Board of Directors.

The foregoing summary of the 2009 Stock Incentive Plan is not complete and is qualified in its entirety by reference to the 2009 Stock Incentive Plan, a copy of which has been filed with the SEC.

As of the date of this annual report, there are an aggregate of 7,943,000 stock options granted and outstanding.

Warrants

As of the date of this annual report, there are an aggregate of 16,908,623 common stock purchase warrants issued and outstanding.

Recent Sales of Unregistered Securities

On March 15 2012, we issued 400,000 shares of restricted common stock for a debt settlement $72,000 and stock based compensation.

On March 15 2012, we settled $50,000 in deferred management compensation for 333,334 restricted common shares.

On March 15 2012, we sold an aggregate of 733,334 restricted common shares for $110,000 in a private placement.

On March 15 2012, we settled an aggregate of $118,466 in annual interest payments on the February 2011 Notes for 789,778 restricted common shares.

In April 2012, we sold an aggregate of 2,300,000 restricted common shares for $345,000 in a private placement.

In April 2012, we issued 100,000 shares of restricted common stock for a debt settlement of $37,258.

In April 2012, we sold an aggregate of 933,333 restricted common shares for $140,000 in a private placement.

In April 2012, we issued 1,000,000 shares of restricted common stock pursuant to a consulting agreement.

In April, 2012, we issued 163,334 shares of restricted common stock in settlement of accrued interest in the amount of $24,500 on the outstanding 2011 Notes.

In May 2012, we issued 14,000,000 common shares to consultants pursuant to a consulting agreement.

In June 2012, we issued 35,179 shares of restricted common stock pursuant to a consulting agreement.

In August 2012, we issued 500,000 shares of restricted common stock pursuant to a consulting agreement.

In September 2012, we issued 500,000 shares of restricted common stock to the holder of a promissory note in exchange for the note holder’s agreement to forebear from pursuing collection action on that note.

In November 2012, we issued 437,063 shares of restricted common stock on election by the holder to convert part of a convertible debt of $25,000.

In November 2012, we issued 597,185 shares of restricted common stock on election by the holder to convert part of a convertible debt of $35,000.

In November 2012, we issued 228,479 shares of restricted common stock on election by the holder to convert part of a convertible debt of $13,737.

In December 2012, we issued 1,078,477 shares of restricted common stock as payment of installment of $65,032 for a convertible debt.

We issued the equity securities described in this section in reliance on the registration exemption provided by Section 4(2) of the Securities Act of 1933.

The Company has previously reported all issuances of unregistered equity during the year ended December 31, 2011.

ITEM 6. SELECTED FINANCIAL DATA

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition, changes in financial condition, plan of operations and results of operations should be read in conjunction with (i) our audited consolidated financial statements as at December 31, 2012 and for the period from inception (July 27, 1999) to December 31, 2012 and (ii) the section entitled “Business”, included in this annual report. The discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors.

Plan of Operations

As a vaccine component, the gene based TAP technology has the potential to significantly improve the efficacy of both prophylactic and immunotherapeutic vaccines as it addresses a fundamental mechanism for T cell recognition and response. We believe that, unlike other vaccine technologies that address only the initiation of immune responses, TAP expression also has the unique ability to enhance the effector function of mature killer T cells. This enhancement of effector function is potentially complementary to any/all vaccine approaches that are designed to enhance cellular responses. Therefore, we envisage establishing multiple collaborative partnerships as we progress gene-based TAP development and research in the clinic. The exploitation of this key mechanism is highlighted by two collaborations with the Mayo Clinic in Rochester, MN and their progress in 2012.

Management believes that as a result of our recent personnel additions, our moving into a state of the art facility, our exclusive Licensing Option agreements with the Mayo Clinic in Rochester, Minnesota, the start of term Phase 1 clinical trials, together with and subject to raising adequate funding, the Company will be well positioned for significant growth in 2013.

In August 2011, the FDA allowed an IND (Investigational New Drug application) and the Company signed a sponsored research agreement with the Mayo Clinic for a Phase 1 Her2neu Breast Cancer Clinical Trial, which started in the first quarter of 2012. The trial will use a patented technology developed at the Mayo clinic. TapImmune has the exclusive Option to license this technology. Recent clinical trials of Her2neu vaccines have shown considerable promise but have significant room for improvements, and the technology we are evaluating in our phase I clinical trial offers a vaccine with broader coverage, making it applicable to a much larger population of women with breast cancer. We anticipate that this technology will be used therapeutically together with our TAP expression technology as it reaches clinical development in combination with the improved Her2neu targeted vaccine. Currently, Herceptin® (trastuzumab: an intravenously delivered monoclonal antibody) is used in the treatment of HER-2/neu breast cancer. Sales of this product in 2009 were approximately US$5 billion (source: Roche AG’s Pharmaceutical Division). As our vaccine approach has the potential to treat a broader HER-2/neu positive clinical population, the market potential is significant.

Our Gene-based TAP vaccines also have the potential to significantly improve the efficacy of prophylactic vaccines for viral pandemics and as agents for biodefense. In a novel approach to the development of a smallpox vaccine, in our collaboration with the Mayo Clinic, research studies have progressed well and are now testing unique and patentable smallpox antigens in combination with TAP technology which we expect to be completed by the third quarter of 2012. Once these feasibility studies are complete we would move to larger preclinical animal studies, and Phase I safety trials. This study will also act as a platform for more extensive use of gene-based TAP vectors for biodefense. We will be seeking non-dilutive avenues to finance and advance this program by way of biodefense focused grants and contracts. We have the exclusive option to license the patented Mayo technology that is derived from this collaboration.

The opening of our new laboratories and offices at 1551 Eastlake Avenue, Seattle, on January 23, 2012 represented a significant advance for the Company on several fronts. First, our sub-lease and service agreements with the Puget Sound Blood Center Research Institute enables our scientific team to access a wide array of functioning core labs and shared equipment relevant to all aspects of development of our gene-based product candidates. Second, such an arrangement allows us to speed the development of TAP-based products towards the clinic. Third, we now have the capabilities to produce and test a range of proprietary TAP-based expression vectors for both cancer and infectious disease and to expand our external collaborations. Fourth, the development of new TAP constructs in our laboratories allows us to significantly enhance our intellectual property portfolio. US Patent # 7,994,146 issued in 2011 represents the most recent example of this strategy. The opening of these new facilities is consistent with our strategy of managing costs using a small core internal team that leverages external resources.

We will continue to build our technical team in 2013. Under the guidance of Mark Reddish and Dr. Bob Florkiewicz, we seek to recruit world-class Immunologists and molecular biologists. Mark is a recognized leader in vaccine technology development with an impressive track record in taking leading immunotherapy products from early research through development, both in the areas of cancer vaccines and biodefense. He was formerly Vice President of Product Development and Principal Investigator, Biodefense at ID Biomedical, Bothell, WA, prior to the acquisition of the company by Glaxo SmithKline for $1.6 billion. At Biomira Inc, (renamed Oncothyreon) he was responsible for preclinical development of their cancer vaccines program. Bob

With respect to the broader market, a major driver and positive influence on our activities has been the emergence and general acceptance of the potential of a new generation of immunotherapies that promise to change the standard of care for cancer. The immunotherapy sector has been greatly stimulated by the approval of Provenge® (Dendreon NASD: DNDN) for prostate cancer and Yervoy™ (BMS) for metastatic melanoma, anticipation of the results from Phase III trials on MAGE-3 (GSK) for treatment of lung cancer, and progression of approaches for multiple cancer indications through Phase II and into Phase III.

Management believes that TapImmune is well positioned to be a leading player in this emerging market. It is important to note that the late stage immunotherapies in development do not necessarily represent competition to our programs, but rather offer us opportunities as our TAP expression technology is potentially synergistic with many other vaccine approaches. The addition of a TAP expression vector to patients already receiving a therapeutic vaccine could enhance the efficacy of these vaccines, as TAP is designed to help killer T-cells kill tumor cells. This concept of enhancing the effector stage of an immune response differentiates TAP technology from a wide list of immunotherapies currently in development, and offers a great opportunity for collaborations and partnerships. Accordingly we believe that the use of TAP expression vectors represents the next logical step in the development of more effective immunotherapies.

In 2012, we continued to made significant progress with very few resources. Progress in developing vectors for expression of antigens and TAP as a boost strategy has led to new intellectual property that we intend to file in the second quarter of 2013. On the technology and product pipeline side, management believes that the company is fundamentally strong and poised to be a leading company in a highly attractive and expanding market, a position reinforced by our recruitment of top-class managers, advisors and investors who all share our vision.

Results of Operations

Year Ended December 31, 2012 Compared to the Year Ended December 31, 2011

In this discussion of the Company’s results of operations and financial condition, amounts, other than per-share amounts, have been rounded to the nearest thousand dollars.

We are a development stage company. We recorded a net loss of $5,660,000 during the year ended December 31, 2012 compared to $2,029,000 for the year ended December 31, 2011.

Operating Expenses

Operating expenses incurred during the fiscal year ended December 31, 2012 were $6,025,000 compared to $3,316,000 in the prior year. Significant changes and expenditures are outlined as follows:

·	Consulting fees were $183,000 during the fiscal year ended December 31, 2012 compared to $179,000 during the prior fiscal year. The increase was due primarily to higher business development services that were entered into during the current period.

·	Stock-based consulting fees were $2,316,000 in the year ended December 31, 2012 compared to $872,000 in the prior year. The current and prior year charges result from the fair valuation of shares issued to consultants and options granted to or earned by consultants during such periods.

·	General and administrative expenses were $1,012,000 in the year ended December 31, 2012 compared to $306,000 in the prior year, with the increase resulting primarily from increased payroll, higher rent, investor relations and travel expenses.

·	Interest and finance charges were $745,000 during the fiscal year ended December 31, 2012 compared to $679,000 during the prior fiscal year. Current and prior period interest charges are primarily accretion of interest and the fair value of warrants issued with convertible notes.

·	Management fees were $296,000 in the year ended December 31, 2012 compared to $248,000 in the prior year, with the difference resulting primarily due to higher management fees paid to the current management.

·	Management compensation – stock-based were $124,000 in the year ended December 31, 2012 compared to $390,000 in the prior year. The current and prior year charges result from the fair valuation of options granted to management that were earned during the period.

·	Professional fees were $350,000 in the year ended December 31, 2012 compared to $438,000 in the prior year. The decrease from the prior year results due to lower legal fees incurred relating to debt issuance in the current period.

·	Research and development costs during the fiscal year ended December 31, 2012 were $999,000 compared to $204,000 during the prior fiscal year. This was due to higher technology licensing fee accrued for payment due to Mayo clinic and increased research activity in the current period.

During the fiscal year ended December 31, 2011, the Company recorded a gain on settlement of debt in the amount of $318,000 relating to early settlement of 2010 convertible notes and settlement of trade payables for shares. The Company also recorded a gain from extinguishment of the derivative share purchase warrants in the amount of $291,000 as determined by the fair value of the warrants at the date of settlement less the consideration attributed to the settlement of the warrants relating to the 2010 Notes.

Our net loss for the year ended December 31, 2012 was $5,660,000 or ($0.09) per share, compared to a net loss of $2,029,000 or ($0.04) per share in the prior period. The weighted average number of shares outstanding was 65,526,927 for the year ended December 31, 2012 compared to 45,994,617 for the prior year.

Liquidity and Capital Resources

The following table sets forth our cash and working capital as of December 31, 2012 and 2011:

	December 31, 2012	December 31, 2011

Cash reserves	$ 51,000	$ 250,000
Working capital (deficit)	$ (5,468,000)	$ (3,493,000)

Subject to the availability of additional financing, we intend to spend approximately $5,000,000 over the next twelve months in carrying out our plan of operations. At December 31, 2012, we had $51,000 of cash on hand and a working capital deficit of $5,468,000. As such, our working capital at December 31, 2012 will not be sufficient to enable us to pay our general and administrative expenses, and to pursue our plan of operations over the next twelve months. We anticipate that we will require significant debt restructuring to reduce the working capital deficit and an additional funding of approximately $5,000,000. Our management is currently making significant efforts to secure the needed financing, but we have not yet secured any commitments with respect to such financing. If we are not able to obtain financing in the amounts required or on terms that are acceptable to us, we may be forced to scale back, or abandon, our plan of operations.

Various conditions outside of our control may detract from our ability to raise the capital needed to execute our plan of operations, including overall market conditions in the international and local economies. We recognize that the United States economy has suffered through a period of uncertainty during which the capital markets have been depressed, and that there is no certainty that these levels will stabilize or reverse despite the optics of an improving economy. Any of these factors could have a material impact upon our ability to raise financing and, as a result, upon our short-term or long-term liquidity.

Going Concern

We have no sources of revenue to provide incoming cash flows to sustain our future operations. As outlined above, our ability to pursue our planned business activities is dependent upon our successful efforts to raise additional equity financing. These factors raise substantial doubt regarding our ability to continue as a going concern. Our consolidated financial statements have been prepared on a going concern basis, which implies that we will continue to realize our assets and discharge our liabilities in the normal course of business. As at December 31, 2012, we had accumulated losses of $49,382,000 since inception. Our financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Net Cash Used in Operating Activities

Operating activities in the year ended December 31, 2012 used cash of $1,565,000 compared to $1,310,000 in the year ended December 31, 2011. Operating activities in the period from inception on July 27, 1999 to December 31, 2012 used cash of $16,420,000. Operating activities have primarily used cash as a result of the operating and organizational activities such as consulting fees, management fees, professional fees and research and development.

Net Cash Used in Investing Activities

In the year ended December 31, 2012, investing activities used cash of $Nil compared to $Nil in the year ended December 31, 2011. In the period from inception on July 27, 1999 to December 31, 2012 investing activities provided cash of $205,000.

Net Cash Provided by Financing Activities

As we have had no revenues since inception, we have financed our operations primarily through private placements of our stock and debt. Financing activities in the year ended December 31, 2012 provided cash of $1,366,000 compared to $1,537,000 in the year ended December 31, 2011. In the period from inception on July 27, 1999 to December 31, 2011, financing activities provided net cash of $16,265,000 primarily from the sale of our equity securities.

Critical Accounting Policies

Our consolidated financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

We regularly evaluate the accounting policies and estimates that we use to prepare our consolidated financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

See Note 2 of our consolidated financial statements for our year ended December 31, 2012 for a summary of significant accounting policies.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes of financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

ITEM 8. FINANCIAL STATEMENTS

TAPIMMUNE INC.

(A Development Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statement of Stockholders’ Deficit

Consolidated Statements of Cash Flows

Notes to the Consolidated Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of TapImmune Inc.

We have audited the accompanying consolidated balance sheets of TapImmune Inc.(a development stage company) as of December 31, 2012 and 2011 and the related consolidated statements of operations, stockholders’ deficit and cash flows for the years ended December 31, 2012 and 2011 and the period from July 27, 1999 (inception) through December 31, 2012. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of TapImmue Inc. as of December 31, 2012 and 2011 and the results of its operations and its cash flows for the years ended December 31, 2012 and 2011 and the period from July 27, 1999 (inception) through December 31, 2012 in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has not generated revenues since inception, has incurred losses in developing its business, and further losses are anticipated. The Company requires additional funds to meet its obligations and the costs of its operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in this regard are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

DALE MATHESON CARR-HILTON LABONTE LLP

CHARTERED ACCOUNTANTS

Vancouver, Canada

May 15, 2013

TAPIMMUNE INC.

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

	December 31, 2012			December 31, 2011

ASSETS
Current Assets
Cash	$	50,679		$	250,234
Due from government agency		1,077			1,060
Prepaid expenses and deposits		15,004			56,627
Deferred financing costs (Note 5)		37,452			-
		104,212			307,921

Deferred financing costs (Note 5)		-			32,291
	$	104,212		$	340,212

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable and accrued liabilities (Note 12)	$	2,058,556		$	794,291
Research agreement obligations (Note 3)		415,998			259,752
Derivative liability – conversion option (Note 4)		798,300			-
Derivative liability – warrants (Note 4)		677,086			1,317,834
Convertible notes payable (Note 5)		1,376,230			998,790
Loans payable (Note 6)		10,000			7,000
Promissory note (Note 7)		67,942			100,000
Due to related parties (Note 8)		366,697			322,905
		5,770,809			3,800,572

Stockholders’ Deficit
Capital stock (Note 9)
Common stock, $0.001 par value, 150,000,000 shares authorized
76,402,958 shares issued and outstanding (2011 – 52,073,460)		76,404			52,072
Additional paid-in capital		43,545,947			39,943,374
Shares and warrants to be issued (Note 9)		352,859			362,906
Deferred compensation (Note 9)		-			(35,968	)
Deficit accumulated during the development stage		(49,580,159	)		(43,722,216	)
Accumulated other comprehensive loss		(61,648	)		(60,528	)
		(5,666,597	)		(3,460,360	)
	$	104,212		$	340,212

COMMITMENTS AND CONTINGENCIES (Notes 1, 3, 5 and 12)

The accompanying notes are an integral part of these consolidated financial statements.

TAPIMMUNE INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended December 31, 2012			Year Ended December 31, 2011			Period from July 27, 1999 (inception) to December 31, 2012

EXPENSES
Consulting	$	182,813		$	179,250		$	2,221,500
Consulting - stock-based (Note 9)		2,316,019			872,159			8,038,372
Depreciation		-			-			213,227
General and administrative		1,012,116			305,714			3,929,352
Interest and financing charges (Note 4)		745,074			679,332			6,576,087
Management fees (Note 8)		295,600			248,400			3,067,654
Management fees - stock-based (Notes 8 and 9)		124,209			389,824			4,448,998
Professional fees		489,537			437,785			5,416,109
Research and development (Note 8)		1,057,430			203,725			6,968,595
Research and development - stock-based		-			-			612,000
		6,222,798			3,316,189			41,491,894
NET LOSS BEFORE OTHER ITEMS		(6,222,798	)		(3,316,189	)		(41,491,894	)
OTHER ITEMS
Foreign exchange (loss) gain		(7,903	)		10,237			45,687
Changes in fair value of derivative liabilities (Note 4)		536,527			668,710			4,611,667
Loss on debt financing (Note 5)		(104,550	)		-			(1,373,263	)
Gain (loss) on settlement of debt (Note 8)		(59,219	)		317,801			(11,690,801	)
Gain on extinguishment of derivative liabilities - warrants (Note 5)		-			290,500			290,500
Interest income		-			-			33,344
Loss on disposal of assets		-			-			(5,399	)
NET LOSS	$	(5,857,943	)	$	(2,028,941	)	$	(49,580,159	)


BASIC AND DILUTED NET LOSS PER SHARE	$	(0.09	)	$	(0.04	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED		65,526,927			45,994,617

The accompanying notes are an integral part of these consolidated financial statements.

TAPIMMUNE INC.

(A Development Stage Company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

FROM JULY 27, 1999 (INCEPTION) TO DECEMBER 31, 2012

	Common Stock						Additional			Obligation to Issue			Deficit Accumulated During the			Accumulated Other
	Number of Shares			Amount			Paid in Capital			Shares and Warrants			Development Stage			Comprehensive Loss			Total

Issued on incorporation - July 27, 1999		1		$	-		$	-		$	-		$	-		$	-		$	-
Issued to the founders for:
- cash		74,000			740			1,110			-			-			-			1,850
- consulting services		86,000			860			1,290			-			-			-			2,150
Common stock subscriptions		-			-			-			177,100			-			-			177,100
Net loss		-			-			-			-			(80,733	)		-			(80,733	)
Balance, December 31, 1999		160,001			1,600			2,400			177,100			(80,733	)		-			100,367
Issued for:
- consulting services		144,000			1,440			2,160			-			-			-			3,600
- for license fees		20,000			200			300			-			-			-			500
Issued for cash:
- at $15.00 per share, net of finders’ fees of $95,570		56,353			564			749,166			(177,100	)		-			-			572,630
- at $15.00 per share		34,160			342			512,058			-			-			-			512,400
Issued for finders’ fees		4,986			50			(50	)		-			-			-			-
Net loss		-			-			-			-			(935,332	)		-			(935,332	)
Currency translation adjustment		-			-			-			-			-			(1,937	)		(1,937	)
Balance, December 31, 2000		419,499			4,195			1,266,034			-			(1,016,065	)		(1,937	)		252,228
Issued for cash:
- at $18.80 per share		4,413			44			82,706			-			-			-			82,750
- at $25.00 per share		10,600			106			264,894			-			-			-			265,000
Net loss		-			-			-			-			(671,986	)		-			(671,986	)
Currency translation adjustment		-			-			-			-			-			(2,041	)		(2,041	)
Balance, December 31, 2001		434,512			4,345			1,613,635			-			(1,688,051	)		(3,978	)		(74,049	)
Issued for cash:
- at $25.00 per share, net of finders’ fees of $17,000		7,500			75			170,425			-			-			-			170,500
Issued on settlement of debt		7,266			73			136,172			-			-			-			136,245
GPI balance, July 15, 2002		449,279			4,493			1,920,232			-			(1,688,051	)		(3,978	)		232,696
GMC balance, July 15, 2002		612,805			6,128			7,180,164			(85,000	)		(6,607,580	)		-			493,712
Reverse acquisition recapitalization adjustment		(449,279	)		(4,493	)		(6,603,087	)		-			6,607,580			-			-

The accompanying notes are an integral part of these consolidated financial statements.

TAPIMMUNE INC.

(A Development Stage Company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

FROM JULY 27, 1999 (INCEPTION) TO DECEMBER 31, 2012

	Common Stock				Additional			Obligation to Issue			Deficit Accumulated During the			Accumulated Other
	Number of shares		Amount		Paid In Capital			Shares and Warrants			Development Stage			Comprehensive Loss			Total

Balance post reverse acquisition		612,805		6,128		2,497,309			(85,000	)		(1,688,051	)		(3,978	)		726,408
GMC subscription proceeds received		-		-		-			285,000			-			-			285,000
Issued for cash:
- at $62.50 per share		17,016		170		1,063,330			-			-			-			1,063,500
Exercise of stock options		4,080		41		50,959			-			-			-			51,000
Stock-based compensation		-		-		630,275			-			-			-			630,275
Net loss		-		-		-			-			(2,284,709	)		-			(2,284,709	)
Currency translation adjustment		-		-		-			-			-			(5,645	)		(5,645	)
Balance, December 31, 2002		633,901		6,339		4,241,873			200,000			(3,972,760	)		(9,623	)		465,829
Exercise of stock options		92,745		927		1,420,888			-			-			-			1,421,815
Issued for cash:
- at $125.00 per share		1,720		17		214,983			(185,000	)		-			-			30,000
- at $25.00 per share, net of finders’ fees		22,214		222		521,593			-			-			-			521,815
Issued as finders’ fees		1,341		13		(13	)		-			-			-			-
Issued for license agreement		400		4		9,996			-			-			-			10,000
Subscriptions repaid		-		-		5,000			(15,000	)		-			-			(10,000	)
Stock-based compensation		-		-		2,733,000			-			-			-			2,733,000
Net loss		-		-		-			-			(5,778,905	)		-			(5,778,905	)
Currency translation adjustment		-		-		-			-			-			(37,299	)		(37,299	)
Balance, December 31, 2003		752,321		7,523		9,147,319			-			(9,751,665	)		(46,922	)		(643,745	)
Issued for cash:
- at $17.50 per share, net of finders’ fees of $50,000		34,286		343		549,657			-			-			-			550,000
Issued as finders’ fees		2,857		29		(29	)		-			-			-			-
Fair value of warrants issued in connection with convertible notes		-		-		65,000			-			-			-			65,000
Exercise of stock options		14,291		143		204,942			-			-			-			205,085
Settlement of debt		400		4		9,996			-			-			-			10,000
Stock-based compensation		-		-		73,500			-			-			-			73,500
Net loss		-		-		-			-			(2,683,105	)		-			(2,683,105	)

The accompanying notes are an integral part of these consolidated financial statements.

TAPIMMUNE INC.

(A Development Stage Company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

FROM JULY 27, 1999 (INCEPTION) TO DECEMBER 31, 2012

	Common Stock				Additional			Obligation to Issue		Deficit Accumulated During the			Accumulated Other
	Number of shares		Amount		Paid In Capital			Shares and Warrants		Development Stage			Comprehensive Loss			Total

Currency translation adjustment		-		-		-			-		-			(16,865	)		(16,865	)
Balance, December 31, 2004		804,155		8,042		10,050,385			-		(12,434,770	)		(63,787	)		(2,440,130	)
Warrant component of convertible note		-		-		46,250			-		-			-			46,250
Issued for cash:
- at $3.80 per share, net of finders’ fees of $97,620 and legal fees of $100,561		362,732		3,627		1,158,437			-		-			-			1,162,064
Net loss		-		-		-			-		(985,599	)		-			(985,599	)
Currency translation adjustment		-		-		-			-		-			(2,333	)		(2,333	)
Balance, December 31, 2005		1,166,887		11,669		11,255,072			-		(13,420,369	)		(66,120	)		(2,219,748	)
Fair value of beneficial feature on convertible notes		-		-		205,579			-		-			-			205,579
Fair value of warrants issued with convertible notes		-		-		288,921			-		-			-			288,921
Net loss		-		-		-			-		(1,304,387	)		-			(1,304,387	)
Currency translation adjustment		-		-		-			-		-			29,555			29,555
Balance, December 31, 2006		1,166,887		11,669		11,749,572			-		(14,724,756	)		(36,565	)		(3,000,080	)
Issued for cash:
- at $2.50 per share		218,000		2,180		542,820			-		-			-			545,000
Issued on the conversion of notes:
- 2006 convertible notes at $2.50 per share		197,800		1,978		492,522			-		-			-			494,500
- 2007 convertible notes at $2.50 per share		406,400		4,064		1,011,936			-		-			-			1,016,000
Issued on the conversion of accounts payable and related party debt at $2.50 per share		291,181		2,912		725,040			-		-			-			727,952
Issued for finance charges on the 2007 convertible notes $2.50 per share		60,000		600		149,400			-		-			-			150,000
Issued pursuant to service agreements at a fair value of $3.60 per share		10,000		100		35,900			-		-			-			36,000
Financing charges		-		-		(167,500	)		-		-			-			(167,500	)

The accompanying notes are an integral part of these consolidated financial statements.

TAPIMMUNE INC.

(A Development Stage Company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

FROM JULY 27, 1999 (INCEPTION) TO DECEMBER 31, 2012

	Common Stock				Additional		Obligation to Issue		Deficit Accumulated During the			Accumulated Other
	Number of shares		Amount		Paid In Capital		Shares and Warrants		Development Stage			Comprehensive Loss			Total

Fair value of beneficial conversion feature on the 2007 convertible notes		-		-		358,906		-		-			-			358,906
Fair value of warrants issued in connection with the 2007 convertible notes		-		-		657,095		-		-			-			657,095
Fair value of warrants issued in connection with the 2007 promissory notes		-		-		374,104		-		-			-			374,104
Fair value of warrants issued as finders’ fees for the 2007 promissory notes		-		-		35,600		-		-			-			35,600
Re-pricing and extension of warrants		-		-		40,000		-		-			-			40,000
Stock based compensation		-		-		904,822		-		-			-			904,822
Obligation to issue warrants at fair value pursuant to promissory note extension		-		-		-		44,000		-			-			44,000
Obligation to issue shares at fair value pursuant to service agreements		-		-		-		23,400		-			-			23,400
Net loss		-		-		-		-		(3,891,411	)		-			(3,891,411	)
Currency translation adjustment		-		-		-		-		-			(23,161	)		(23,161	)
Balance, December 31, 2007		2,350,268		23,503		16,910,218		67,400		(18,616,167	)		(59,726	)		(1,674,772	)
Issued for cash
- at $2.50 per share in July 2008		14,000		140		34,860		-		-			-			35,000
Issued on the exercise of warrants in June 2008		20,715		207		24,793		-		-			-			25,000
Issued pursuant to service agreements at a fair value of $3.00 per share in April 2008		30,000		300		89,700		-		-			-			90,000
Fair value of warrants issued in connection with the 2008 promissory notes in May 2008		-		-		206,820		-		-			-			206,820
Fair value of warrants to be issued in connection with notes payable in October 2008		-		-		-		256,350		-			-			256,350
Stock based compensation in January to December 2008		-		-		234,168		-		-			-			234,168

The accompanying notes are an integral part of these consolidated financial statements.

TAPIMMUNE INC.

(A Development Stage Company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

FROM JULY 27, 1999 (INCEPTION) TO DECEMBER 31, 2012

	Common Stock					Additional		Obligation to Issue			Deficit Accumulated During the			Accumulated Other
	Number of shares		Amount			Paid In Capital		Shares and Warrants			Development Stage			Comprehensive Loss			Total

Net loss		-		-			-		-			(2,195,939	)		-			(2,195,939	)
Balance, December 31, 2008		2,414,983		24,150			17,500,559		323,750			(20,812,106	)		(59,726	)		(3,023,373	)
Reverse split recapitalization adjustment (rounding) in July 2009		118		(21,735	)		21,735		-			-			-			-
Issued for cash
- at $0.80 per share in November 2009		875,000		875			-		-			-			-			875
Issued at fair value pursuant to service agreements in August 2009		25,000		25			27,475		-			-			-			27,500
Issued at fair value pursuant to debt settlement agreements in July 2009 (Note 3)		33,812,065		33,812			15,181,618		-			-			-			15,215,430
Issued on the exercise of warrants in August and November 2009		1,234,508		1,235			241,515		-			-			-			242,750
Stock based compensation in October 2009		-		-			2,091,900		-			-			-			2,091,900
Fair value of warrants issued in February , May and June 2009 in connection with promissory notes		-		-			725,669		(300,350	)		-			-			425,319
Beneficial conversion feature on August and October 2009 convertible notes		-		-			75,491		-			-			-			75,491
Obligation to issue warrants pursuant to service agreements in December 2009		-		-			19,270		-			-			-			19,270
Obligation to issue shares at fair value pursuant to service agreements in December 2009		-		-			-		246,533			-			-			246,533
Obligation to issue shares at fair value pursuant to debt settlement agreements in September 2009		-		-			-		243,800			-			-			243,800
Net loss		-		-			-		-			(17,348,546	)		-			(17,348,546	)
Balance, December 31, 2009		38,361,674		38,362			35,885,232		513,733			(38,160,652	)		(59,726	)		(1,783,051	)

The accompanying notes are an integral part of these consolidated financial statements.

TAPIMMUNE INC.

(A Development Stage Company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

FROM JULY 27, 1999 (INCEPTION) TO DECEMBER 31, 2012

	Common Stock				Additional		Obligation to Issue			Deferred		Deficit Accumulated During the			Accumulated Other
	Number of shares		Amount		Paid In Capital		Shares and Warrants			Compensation		Development Stage			Comprehensive Loss			Total

Notes converted into shares		952,305		952		427,003		(243,800	)		-		-			-			184,155
Stock based compensation in 2010		-		-		1,134,477		-			-		-			-			1,134,477
Obligation to issue shares at fair value pursuant to service agreements		-		-		-		28,220			-		-			-			28,220
Issued at fair value pursuant to debt settlement agreements		361,648		372		90,040		-			-		-			-			90,412
Issued at fair value pursuant to service agreements		570,000		570		275,306		(263,173	)		-		-			-			12,703
Untraceable shares reissued		10,400		-		-		-			-		-			-			-
Foreign exchange translation adjustment		-		-		-		-			-		-			(1,169	)		(1,169	)
Net loss		-		-		-		-			-		(3,532,623	)		-			(3,532,623	)
Balance, December 31, 2010		40,256,027	$	40,256	$	37,812,058	$	34,980		$	-	$	(41,693,275	)	$	(60,895	)	$	(3,866,876	)

Notes converted into shares	2,102,742	2,102	428,992		-	-	-	-	431,094
Stock based compensation in 2011	-	-	456,081		-	-	-	-	456,081
Fair value of warrants recognized as derivative liabilities	-	-	(500,170	)	-	-	-	-