U.S.
SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549




FORM
10-KSB




[X]
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934.




For the fiscal year ended
December 31, 2007




[  ]
            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
0-27239




TAPIMMUNE
INC.


(Name of
small business issuer as specified in its charter)




Nevada
            88-0277072(State
      or other jurisdiction of incorporation of organization)
            (I.R.S.
      Employer  Identification No.)Unit 2, 3590 West
      41stAvenue, Vancouver,
      British Columbia, Canada, V6N 3E6
              (Address
      of Principal Executive Offices)(604)
      264-8274
              (Issuer’s
      telephone number)




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




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


Common Stock, Par Value
$0.001


(Title of
class)




Check
whether the issuer is not required to file reports pursuant to Section 13 or
15(d) of the Exchange Act.  [  ]




Check
whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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[  ]




Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this Form, and no disclosure will 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-KSB or any
amendment to this Form 10-KSB.  [  ]




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).  Yes [  ]  No [X]




The
Registrant’s revenues for the fiscal year ended December 31, 2007 were
$Nil.




The
aggregate market value of the voting stock held by non-affiliates of the
Registrant as of April 9, 2008 was approximately $4,465,509
based upon the average bid and ask price on that date.




The
Registrant had 23,502,681
shares of common stock outstanding as of April 9, 2008.


__________







FORWARD
LOOKING STATEMENTS




This
Annual Report on Form 10-KSB (the “Annual Report”) contains forward-looking
statements within the meaning of the United States Private Securities Litigation
Reform Act of 1995.  These statements are not historical or current
facts and are made pursuant to the safe harbor provisions of Section 27A of the
United States Securities Act of 1933, as amended (the “Securities Act”), and
Section 21E of the United States Securities Exchange Act of 1934, as amended
(the “Exchange Act”).  These statements often can be identified by the
use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,”
“estimate,” “approximate” or “continue,” or the negative thereof or other
comparable terms.  Forward-looking statements represent management’s
best judgment as to what may occur in the future and speak only as of the date
made.  However, forward-looking statements are subject to risks and
uncertainties beyond the control of the company, including those set forth in
this Annual Report under “Risk Factors” in the section entitled “Management’s
Discussion and Analysis or Plan of Operations”, that could cause actual results
and events to differ materially from historical results and events and those
presently anticipated or projected.  Accordingly, readers are
cautioned not to place undue reliance on any such forward-looking statements.
The company disclaims any obligation to update any forward-looking statements to
reflect events or circumstances after the date of any such statement or to
reflect the occurrence of anticipated or unanticipated events.




AVAILABLE
INFORMATION




TapImmune
Inc files annual, quarterly and current reports, proxy statements and other
information with the United States Securities and Exchange Commission (the
“Commission”).  You may read and copy documents referred to in this
Annual Report that have been filed with the Commission at the Commission’s
Public Reference Room, at 100 F Street, NE, Washington, D.C.
20549.  You may obtain information on the operation of the Public
Reference Room by calling the Commission at 1-800-SEC-0330.  You can
also obtain copies of our Commission filings by accessing the Commission’s
website at http://www.sec.gov.




REFERENCES




In this
Annual Report, unless the context suggests otherwise, references to “we,” “us,”
“our”, “TapImmune”, the “Company” or the “company” refer to TapImmune Inc. and
its subsidiaries.  All amounts in this Annual Report are in United
States dollars, unless otherwise indicated, and references to “dollars” or “$”
are to United States dollars.


__________





TABLE
OF CONTENTS







Item                                                                                                                                  Page#




ITEM 1.
            DESCRIPTION OF
      BUSINESS




ITEM 2.
            PROPERTIES




ITEM 3.
            LEGAL
      PROCEEDINGS




ITEM 4.
            SUBMISSION OF MATTERS TO A VOTE
      OF SECURITY HOLDERS




ITEM 5.
            MARKET FOR COMMON EQUITY, RELATED
      STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY
      SECURITIES




ITEM 6.
            MANAGEMENT’S DISCUSSION AND
      ANALYSIS OR PLAN OF OPERATION




ITEM 7.
            FINANCIAL
      STATEMENTS




ITEM 8.
            CHANGES IN AND DISAGREEMENTS WITH
      ACCOUNTANTS OF ACCOUNTING AND FINANCIAL
      DISCLOSURE




ITEM 8A.CONTROLS AND
      PROCEDURES




ITEM 8B.OTHER
      INFORMATION




ITEM 9.
            DIRECTORS AND EXECUTIVE OFFICERS
      OF THE REGISTRANT




ITEM 10.EXECUTIVE
      COMPENSATION




ITEM 11.SECURITY OWNERSHIP OF CERTAIN
      BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
      MATTERS




ITEM 12.CERTAIN RELATIONSHIPS AND RELATED
      TRANSACTIONS




ITEM 13.EXHIBITS




ITEM 14.PRINCIPAL ACCOUNTANT FEES AND
      SERVICES




ITEM 15.FINANCIAL
      STATEMENTS




__________





PART I




ITEM
1.                      DESCRIPTION
OF BUSINESS




Company
Overview




We are a
biotechnology company whose strategic vision is to develop and market products
specializing in the application of the latest discoveries in cellular and
molecular immunology and cancer biology to the development of proprietary
therapeutics aimed at the treatment and eradication of cancer and prevention of
infectious diseases.  Our technologies are based on an understanding
of the function 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 development and
testing of our product candidates.




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 the American Cancer
Society estimates that in 2007 cancer will be the second leading cause of death
with an estimated 600,000 deaths from cancer annually.




Company
History




We
currently trade on the OTC Bulletin Board under the symbol “TPIM”.




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.


1




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.  As part of its overall strategy, and
with additional funding, the company also intends to pursue the development of
prophylactic vaccines against infectious microbes.  The company
intends to develop the TAP technology for use as a therapeutic cancer vaccine
that management believes will restore the normal immune
recognition.  Management further believes that this cancer vaccine
strategy is the only 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.




TapImmune’s
Target Market and Strategy




We are
currently pursuing product development in oncology.  With additional
funding, we will also pursue product development in prophylactic vaccines. The
initial development process is the same for both therapeutic and prophylactic
vaccines, so some parallel development will take place.  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.  Based upon recent
market reports, management believes that the market for cancer vaccines could be
approximately $6 billion by 2010, with a compounded annual growth rate of
104%.  Our goal is to have the FDA approve our cancer vaccine within
the next few years so that we can secure a portion of this market.




Management
also believes that our prophylactic vaccine adjuvant will improve the creation
of new vaccines and enhance the efficacy of current vaccines. It will be a key
business development strategy to pursue partnerships and joint research &
development ventures with vaccine manufacturers and pharmaceutical companies to
bring new and improved vaccines to market.  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.




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 proprietary
TAP technology.  We have focused our efforts initially on the
development of a therapeutic vaccine for applications in cancer treatment while
demonstrating the breadth of the TAP technology 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.  We previously produced, and still plan
to


2




produce
in the future, our TAP vaccines by inserting the TAP gene material into a
proprietary, modified adeno virus licensed from Crucell Holland B.V. (“Crucell”)
or a generic HEK293 adenovirus, and it will and  has been used as the
prototype vaccine product for performing in-vitro immunological and animal
preclinical studies.  We have organized our research and development
efforts to take advantage of our partners’ capabilities while reducing our
overhead costs.  Our relationship with the University of British
Columbia (“UBC”) has allowed us to conduct contract research and development by
employing highly skilled scientists at UBC.  The research and
development team performs the basic research on the biological function of TAP
and related licensed technology as well as preclinical animal studies in cancer
and infectious diseases.  We also receive technical support from our
licensing partner, Crucell, in the development of our TAP adeno virus based
vaccine product.  Further, we will initiate our contract with SAFC
Pharma (Sigma Aldrich), formerly, Molecular Medicine BioServices, Inc.
“(Molecular Medicine”) for the production of clinical grade vaccine product to
be used in preclinical and clinical studies that require production facilities
with Good Manufacturing Practices (“GMP”) and Good Laboratory Practices (“GLP”)
certification.




Products
and Technology in Development




TAP
Cancer Vaccine




We
previously developed our TAP Cancer Vaccine at the UBC Biomedical Research
Centre under an agreement we refer to in this Annual Report as our
“Collaborative Research Agreement”.  This therapeutic cancer vaccine
candidate, to be tested in preclinical toxicology studies, will, if successfully
developed, include the patented use of the TAP-1 gene 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.  The 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.




Management
believes that the TAP Cancer Vaccine 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.  The 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, the 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.


3




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 the key milestone of efficacy in animal models of cancer has been
attained and that other scientific research teams have validated the
experimental data from these animal studies.  The proof of principle
for the TAP technology as a cancer vaccine was established in research conducted
during the last ten years at UBC.  The initial studies were conducted
using a small-cell lung cancer cell line that was derived from an aggressive,
metastatic cancer.  These cells have multiple defects in the “antigen
presentation pathway” in that they are not detected by the immune
system.  When the TAP protein was introduced into these cells, antigen
presentation was restored.  In addition, a series of animal studies
have demonstrated the ability of TAP to restore an immune
response.  This study was published in Nature Biotechnology (Vol. 18,
pp. 515-520, May 2000).  Management believes that the TAP
technology has been further validated in melanoma, where animal studies similar
to the small-cell lung cancer studies described above were performed and similar
results were achieved.




Pre-Clinical
Testing




We have
completed pre-clinical animal testing of our TAP Cancer Vaccine to the extent
that is required as a prerequisite for further preclinical toxicology analysis
and Investigational New Drug (or “IND”) application to the FDA.  The
pre-clinical testing of the TAP Cancer Vaccine to date included the evaluation
of several strains of vaccinia and adenovirus vectors to assess their respective
ability to deliver the correct genetic information allowing expression of the
TAP protein in tumors, the selection and licensing of the vector from Crucell
and the identification and entering into an agreement, that we refer to in this
Annual Report as our “Production Services Agreement”, with Molecular Medicine,
now SAFX Pharma, a GMP manufacturer, for subsequent production of the TAP Cancer
Vaccine.  We have to complete the performance of toxicology studies
using the TAP Cancer Vaccine on at least two animal species to confirm its
non-toxicity.  In addition, we must complete initial vaccine
production, and develop internal and external clinical trials, support personnel
and infrastructure before commencing clinical trials.




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




Management
believes that, subject to the completion of remaining pre-clinical work and
financing, estimated at approximately $5,000,000, the Phase I human clinical
trials could commence in the first half of 2009.  The Phase I human
clinical trials will be designed to provide data on the safety of the TAP Cancer
Vaccine when used in humans.  We intend to conduct the Phase I
human clinical trials at the British Columbia Cancer Agency in Vancouver,
British Columbia, or other locations under evaluation.  These trials
will be conducted in respect of certain carcinomas.  We have presented
information on the


4




TAP
Cancer Vaccine to members of the Department of Advanced Therapeutics of the
British Columbia Cancer Agency, with the intent of obtaining their assistance in
the design and execution of the clinical study.




Clinical
trials to support new drug applications are typically conducted in three
sequential phases, although the phases may overlap.  During Phase
I there is an initial introduction of the therapeutic candidate into healthy
human subjects or patients.  The drug is tested to assess metabolism,
pharmacokinetics and pharmacological actions and safety, including side effects
associated with increasing doses.  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.




Future
Products and Technology




Peptide
Transfer Assay




We are
attempting to develop potential products that may stimulate or interrupt the
chain of events involved in certain immune system-related
diseases.  One such potential product, referred to in this Annual
Report as the “Peptide Transfer Assay”, would be used to identify compounds
effective in the treatment of cancer, infectious diseases, autoimmune diseases
and transplant rejection.  Autoimmune diseases include, but are not
limited to, psoriasis, rheumatoid arthritis, multiple sclerosis, myasthenia
gravis and diabetes.  T cells and antibodies in the body’s immune
system normally identify and destroy foreign substances and cancerous
cells.  Autoimmune diseases are generally caused by the abnormal
destruction of healthy body tissues when T cells and antibodies react against
normal tissue.




The
Peptide Transfer Assay is ready for development for high-throughput screening
and partnering.  High-throughput screening is the use of robotics and
automated industrial processes used to speed up the drug discovery process,
testing large number of compounds against certain targets.  Additional
funding will be required to exploit this opportunity, however, the technology
has been licensed and will continue to be protected by us. This technology is
not currently a focus for development.




Screen
for Regulators of Antigenicity




We
recently acquired via our agreement with UBC a drug discovery technology that
can be used to identify small molecule regulators of the immune
response.  We refer to this technology in this Annual Report as the
Screen for Regulators of Antigenicity Technology.  Management believes
that the Screen for Regulators of Antigenicity Technology can be used to screen
and select new drugs that regulate immune responses, and that it has relevance
to both cancers and viral diseases and in modulating transplant rejection and
autoimmune diseases.  This technology is of interest but will only be
developed after successful development of the cancer and prophylactic
vaccines.


5




Strategic
Relationships




UBC




Collaborative
Research Agreement




In
September of 2000, through our wholly owned subsidiaries, GeneMax
Pharmaceuticals and GeneMax Canada, entered into a Collaborative Research
Agreement with the UBC to carry out further development of the TAP technologies
as a cancer vaccine and other commercial products, and to provide GeneMax
Pharmaceuticals with the option to acquire the rights to commercialize any
additional technologies developed under the agreement.  Pursuant to
the Collaborative Research Agreement UBC retained all rights and title to all
inventions, improvements and discoveries that are conceived by employees of UBC
during the term of the Collaborative Research Agreement; however, UBC therein
granted us an option to obtain a royalty-bearing license to use such inventions,
improvements and discoveries that were not covered under the existing license
agreement and included improvements and enhancements of the licensed
technologies.




The
Collaborative Research Agreement, as amended, provided for payments to UBC in
the aggregate of $2,973,049 (CDN).  In addition, we reimbursed UBC a
total of $55,812 (CDN) of patent expenditures in connection with technologies
licensed to us.




The
parties to the Collaborative Research Agreement had agreed to the principal
terms of a renegotiated agreement which would provide for an estimated annual
budget of $295,000 (CDN) (in quarterly installments of $73,750 (CDN)) to allow
for funding for one Ph.D. scientist and two support technicians.  In
addition, UBC continued to provide us with access to university laboratories and
equipment at UBC.




License
Agreement




In March
of 2000 we entered into a license agreement with UBC and Dr. Wilfred A.
Jefferies, then our Chief Scientific Officer and a director, which is referred
to in this Annual Report as the License Agreement, providing us with an
exclusive world-wide license to use certain technology developed by UBC and
Dr. Jefferies.  The License Agreement allowed us to use the
technology associated with the patents entitled “Method for Enhancing Expression
of MHC-Class 1 Molecules Bearing Endogenous Peptides” and “Method of Identifying
MHC-Class 1 restricted Antigens Endogenously Processed by a Cellular Secretory
Pathway”and to
manufacture, distribute, market, sell, lease and license or sub-license products
derived or developed from the above licensed technologies until the later of
March 6, 2015 or the expiration of the last patent obtained under the License
Agreement, including the expiration of patents obtained from modifications to
existing patents.  As consideration for entering into the License
Agreement we paid an initial license fee of $113,627.32 (CDN) and issued 500,000
GeneMax Pharmaceutical shares to the University of British Columbia; which were
subsequently exchanged for 500,000 (pre reverse stock split) shares of our
restricted common stock.




On
February 16, 2004, UBC granted us an exclusive, worldwide license to use a novel
assay technology to screen and select new drugs that regulate immune
responses.  As consideration for entering into this license, which we
refer to in this Annual Report as the “Immune Response License”, we issued UBC
10,000 (pre reverse stock split) shares of our common stock and were required to
pay UBC an annual maintenance fee of $500 (CDN).  The term for the
Immune Response License was the longer of either 20 years or the expiration of
the last patent licensed under the Immune Response License, including the
expiration of patents obtained from modifications to existing
patents.


6




Option
and Settlement Agreements




On
January 24, 2006, and in accordance with the terms and conditions of a certain
Option and Settlement Agreement (the “Option and Settlement Agreement”), dated
for reference January 23, 2006, as entered among each of us, UBC, Dr. Jefferies
and each of our predecessor and subsidiary companies, GeneMax Pharmaceuticals
and GPCanada, the parties thereto reached a definitive agreement pursuant to
which all existing financial claims by UBC (collectively, the “UBC Financial
Claims”) as against us under each of those certain “License Agreement” among us,
UBC and Dr. Jefferies dated March 6, 2000, as amended February 28, 2003
(“License Agreement #1”), and “License Agreement” between us and UBC dated
February 16, 2004 (“License Agreement #2” and, collectively, the “License
Agreements”), and under that certain “Collaborative Research Agreement” between
UBC and GPCanada dated May 6, 2005 (the “CRA”), are satisfied (the “Settlement”)
in consideration of UBC providing us with the consequent right to acquire,
outright, by way of assignment (the “Option to Purchase”), all of UBC’s right
title and interest in the technologies licensed to us under the terms of the
License Agreements, including the “Technology” as that term is defined in the
License Agreements, and all “Improvements” made prior to the date of execution
of the Option and Settlement Agreement in furtherance of the same (collectively,
the “Technology” thereunder); a copy of the Option and Settlement Agreement
having been attached as an Exhibit to the company’s Current Report on Form 8-K
which was filed on January 24, 2006.




In
accordance with the terms and conditions of the Option and Settlement Agreement,
and in order to keep the right and Option to Purchase the Technology granted to
us by UBC in good standing and in force and effect; and in order to maintain the
Settlement of all UBC Financial Claims consequent therein; we were obligated to
provide cash payment (“Purchase Price Payment”) and to maintain the current
status of UBC’s existing patent and patent pending applications respecting the
Technology (the “Purchase Price Patent Obligations”; and the Purchase Price
Payments and the Purchase Price Patent Obligations being, collectively, the
“Purchase Price”) to the order and direction of UBC in the aggregate amount of
$556,533 (CDN) (which also equate to the present UBC Financial Claims) prior to
December 31, 2006 (the end of the “Option Period”), and in due complete
satisfaction of the settlement of the UBC Financial Claims.




The
Option and Settlement Agreement replaced our previous disclosed (by way of
Current Report on Form 8-K dated December 23, 2005) “Letter of Intent” as
previously entered into between us and UBC.




On
December 18, 2006 we negotiated an extension with UBC of the January 24, 2006
Option and Settlement Agreement.  Under the terms of the extension we
were obligated to pay UBC $216,533 (CDN) as follows:




(a)
            $72,177
      (CDN) on or before December 31, 2006;
(paid);




(b)
            $72,178
      (CDN) plus interest of $3,362 (CDN) on or before March 20, 2007; (paid);
      and




(c)
            $72,178
      (CDN) plus interest of $1,423 (CDN) on or before May 31, 2007
      (paid).




As of May
31, 2007 we completed our obligation with UBC and the technology assignment and
transfer was completed in the current fiscal year.




Crucell




On
August 7, 2003, we entered into an agreement with Crucell, which we refer
to in this Annual Report as the “Research License and Option
Agreement”.  Pursuant to that agreement, Crucell granted us a
non-exclusive, worldwide license for Crucell’s adenovirus technology and an
option for a non-exclusive, worldwide commercial license to manufacture, use,
offer for sale, sell and import products using the licensed technology in the
therapy of human subjects by administering a modified and proprietary
adeno


7




virus
vector (used to package our TAP gene technology and deliver it to the target
cancer cell in the patient) including, but not limited to, therapeutic gene
sequence(s).




The
Research License and Option Agreement provided for bi-annual license maintenance
fees of 50,000 Euros, exclusive of applicable taxes, during the first two years
of the agreement, and an annual license maintenance fees of 75,000 Euros,
exclusive of applicable taxes, starting on the third anniversary until the
expiration of the agreement on August 7, 2008.  Total obligations
under this agreement are 450,000 Euros.




To
December 31, 2005, we had made payments required totaling $115,490
(€100,000) to Crucell pursuant to the terms of the Research License and Option
Agreement.  Pursuant to the terms of the Research License and Option
Agreement, a further $60,864 (€ 50,000) was due and payable on February 7,
2004 and a further $60,103 (€ 50,000) was due and payable on August 7, 2004
leaving $120,967 owing as of December 31, 2004 under the terms of the
agreement.  Pursuant to the Research License and Option Agreement, if
a party defaults in the performance of or fails to be in compliance with any
material condition of this agreement, the Research License and Option Agreement
may be terminated if the default or noncompliance is not remedied or steps
initiated to remedy three months after receipt in writing to the defaulting
party.  Effective June 6, 2005, Crucell gave us notice of default
whereby we had three months to remedy the default.  On November 16,
2005, Crucell provided notice of Termination by Default due to our failure to
remedy the default within the required three month period.




In May of
2006 we negotiated a reinstatement of the original Research and License Option
Agreement with Crucell and paid Crucell on April 20, 2006 €123,590 (US$151,521)
in connection with the reinstatement.  Under the revised terms of the
agreement, we will pay Crucell 12 monthly payments of €10,300 starting May 2006
(paid to October 31, 2006 as of December 31, 2007) and a €75,000 annual license
fee (not paid as of December 31, 2007, adjusted for CPI) in order to keep the
reinstated agreement in good standing.  In January, 2008 we paid
$40,000 to the outstanding balance of €136,800, and are currently working with
Crucell to maintain our license and relationship as well as reaching a new
payment schedule for the outstanding fees.




SAFC
Pharma (Molecular Medicine)




On
March 18, 2003, we entered into a production service agreement; referred to
in this Annual. Report as the “PSA”, with Molecular Medicine of the United
States.  The PSA provides for the performance of certain production
services by Molecular Medicine relating to the adenoviral vector product
containing our TAP gene technology.  The product is required to
conduct pre-clinical toxicology studies and subsequent human clinical
trials.




We were
in breach of our contractual obligations with Molecular Medicine in respect of
payments due for Phase I of the project.  The parties have agreed that
advance payments that had been made for subsequent phases could be allocated to
the Phase I deficiency so that all payments that were due under the PSA have now
been paid in full and we have a $78,000 surplus which can be applied towards
subsequent phases of the project.




In August
2005 we postponed production of our clinical grade TAP adeno based vaccine for
pre-clinical toxicology analysis with Molecular Medicine due to technical
difficulties related to the yields of vaccine.  Crucell is currently
in the process of solving technical issues associated with production yields of
the vaccine. We have developed a second option and are preparing to initiate
viral construction on the best and most suitable cell line. We have a credit of
approximately $78,000 valid until the end of 2008 with Molecular Medicine
towards future vaccine production.  Despite the technical difficulties
we anticipate production of a clinical grade TAP based vaccine to be produced
utilizing the adeno vector from Crucell


8




or our
in-house adeno virus vector to allow us to meet our milestones for completing
toxicology analysis by the end of 2008/early 2009.




National
Institute of Allergy and Infectious Diseases




On
October 21, 2003, we entered into an agreement, which we refer to in this
Annual Report as the “Biological Materials Transfer Agreement”, with the
National Institute of Allergy and Infectious Diseases (or “NIAID”), a division
of the Public Health Service (or “PHS”).  The Biological Materials
Transfer Agreement provides for the license of NIAID’s Modified Vaccinia Ankara
virus for use in our research and product development.  The licensed
technology and virus material will be used with the goal of developing a vaccine
platform capable of generating superior protective immune responses against
smallpox.  Pursuant to the Biological Materials Transfer Agreement we
pay a non-refundable annual royalty of $2,500 per year.  The
Biological Materials Transfer Agreement expires on November 5,
2008.  PHS may terminate this agreement if we are in default in the
performance of any material obligation under this Agreement, and if the default
has not been remedied within ninety days after the date of written notice by PHS
of such default.




Other
Technology




On
February 16, 2004, we added to our technology portfolio by expanding the
License Agreement (now assigned under the purchase agreement) with UBC to
include a technological method that identifies agonists or antagonists antigen
presentation to the immune system by normal and cancerous
cells.  Management believes that this technology can be used to screen
and select new drugs that regulate immune responses.




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.




Pursuant
to the acquisition agreement from The UBC we acquired the a portfolio of
intellectual property as follows:


9




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 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.




TAP
Vaccines and other filings




On July
9, 2004, UBC filed a patent application with the U.S. Patent and Trademark
Office for patent protection for TAP vaccines as a method for increasing immune
responses.  As of the date of this Annual Report we have received a
‘Notice of Allowance’ but the order granting a patent has not been
received.  Other patent applications have been filed by us and UBC in
respect of our technologies and those currently under assignment.  In
December 2006 , January, November and December 2007 ,  we made
additional filings as continuations or new filings with regard to the same
technologies as well as their applications in infectious diseases.  We
also filed for a continuation and had reinstated a previously ‘unintentionally
abandoned’ patent.  A clerical error at our previous patent counsel
caused a filing date to be erroneously missed.  That patent is now in
good standing and notice of allowance has been received on a number of
claims.  We intend to continue to work with UBC to file additional
patent applications with respect to any novel aspects of our technology to
further protect our intellectual property portfolio.




Competition




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


10




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 the following companies, which are developing various types of
similar immunotherapies and therapeutic cancer vaccines to treat cancer, could
be our major competitors: CellGenSys Inc., Corixa Corp., Dendreon Corp., Genzyme
Molecular Oncology, Therion Biologics Corp. and Transgene S.A.




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


11




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 have entered
into a contract with Molecular Medicine 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.


12




Product
Liability and Insurance




Once we
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
and/or Consultants




Mr. Denis
Corin is our President, Chief Executive Officer and Principal Executive Officer,
Mr. Patrick McGowan is our Secretary, Treasurer, Chief Financial Officer and
Principal Accounting Officer, and Dr. Wilfred Jefferies is our Principle
Scientist.  These individuals are primarily responsible for all our
day-to-day operations.  Other services are provided by outsourcing and
consultant service agreements.  As of December 31, 2007, we did not
have any employees.




ITEM
2.                      PROPERTIES




We do not
own any real estate or other properties.  Our registered office is
located at Unit 2, 3590 West 41st Avenue, Vancouver, British Columbia Canada,
V6N 3E6.  On March 1, 2007, the Company entered into a five year lease
agreement for lab facilities in Vancouver, British Columbia,
Canada.  The agreement requires monthly payments of $2,671 (CDN) plus
a share of operating costs during the first two years of the term, and monthly
payments of $2,820 (CDN) plus a share of operating costs for the final three
years.




ITEM
3.                      LEGAL
PROCEEDINGS




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.                      SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS




None.









PART II




ITEM
      5.
            MARKET
      FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER
      PURCHASES OF EQUITY SECURITIES




Our
common stock is traded on the Over The Counter Bulletin Board (“OTCBB”) under
the symbol “TPIM.OB” and on the Frankfurt and Berlin Stock Exchanges under the
symbol “GX1.”  The listing on the Berlin Stock Exchange was done
without the company’s knowledge and consent.  The company has
attempted to have the Berlin Stock Exchange listing terminated, however, it has
not been able to do so.


13




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
      BidFiscal
      Year 2007December
      31, 2007
            $0.17
            $0.14September
      30, 2007
            $0.45
            $0.30June
      30, 2007
            $0.39
            $0.39March
      31, 2007
            $0.35
            $0.28Fiscal
      Year 2006December
      31, 2006
            $0.25
            $0.21September
      30, 2006
            $0.23
            $0.23June
      30, 2006
            $0.28
            $0.28March
      31, 2006
            $0.38
            $0.35Fiscal
      Year 2005December
      31, 2005
            $0.48
            $0.45September
      30, 2005
            $0.32
            $0.30June 30,
      2005
            $0.75
            $0.50March 31,
      2005
            $0.80
            $0.78




As at
December 31, 2007 the date of the most current list of shareholders provided to
us by our transfer agent, we had 141 shareholders of record of our common
stock.  Subsequent to our dispute with X-Clearing Corporation, our
previous transfer agent, we appointed Computershare Trust Company of Canada, of
Vancouver, British Columbia, as our transfer agent.




There are no restrictions in our
articles of incorporation or by-laws that prevent us from declaring dividends.The
declaration of dividends is at the discretion of our Board of
Directors.  TheNevada
Revised Statutes, however, do prohibit us from declaring dividends where, after
giving effect to the distribution of the dividend:




(a)
            we would not be able to pay our
      debts as they become due in the usual course of business;
      or




(b)
            our total assets would be less
      than the sum of our total liabilities plus the amount that would be needed
      to satisfy the rights of stockholders who have preferential rights
      superior to those receiving the
  distribution.




To date,
we have not paid any dividends on our common stock, and our Board of Directors
does not currently intend to declare cash dividends on our common
stock.  We instead intend to retain earnings, if any, to support the
growth of our business.  Any future cash dividends would depend on
future earnings, capital requirements and our financial condition and other
factors deemed relevant by the Board of Directors.


14




Stock and
Security Issuances




On June
28, 2007, we completed a reverse stock split thereby issuing 1 new share for
each 2.5 outstanding shares of our common stock.  Accordingly, our
authorized share capital was decreased from 200,000,000 common shares to
80,000,000 common shares.




Private
Placements and Convertible Debentures




On June
8, 2007 we issued 1,500,000 (pre reverse stock split) shares of common stock
pursuant to the issuance of 1,500,000 units at a issuance price of $0.10 (pre
reverse stock split) per unit as a finder’s fee in conjunction with the February
12, 2007 convertible debenture.  Each unit is comprised of one common
share at a price of $0.10 (pre reverse stock split) per unit and one
non-transferable share purchase warrant.  Each such warrant entitles
the holder to purchase one additional share of our common stock for a period of
five years from the date of the issue at an exercise price of $0.10 (pre reverse
stock split) per share during the first two years, $0.20 (pre reverse stock
split) per share during the third year, $0.30 (pre reverse stock split) per
share during the fourth year, and $0.40 (pre reverse stock split) per share
during the fifth year.




On June
8, 2007 we issued 7,279,530 (pre reverse stock split) shares of common stock at
$0.10 (pre reverse stock split) per share pursuant to the conversion of $567,953
in related party debt and $160,000 in accounts payable.




On June
8, 2007, we issued 700,000 (pre reverse stock split) shares of common stock
pursuant to a private placement financing of 700,000 units at a price of $0.10
(pre reverse stock split) per unit for gross proceeds of $70,000.  The
units have the same terms as those described in the following paragraph, that
is, each unit is comprised of one common share and one non-transferable common
share purchase warrant.  Each such warrant entitles the holder to
purchase one additional share of our common stock for a period of five years
from the date of the issue at an exercise price of $0.10 (pre reverse stock
split) per share during the first two years, $0.20 (pre reverse stock split) per
share during the third year, $0.30 (pre reverse stock split) per share during
the fourth year; and $0.40 (pre reverse stock split) per share during the fifth
year.




On
February 12, 2007, and in conjunction with the prior written agreement of each
convertible debenture holder to so convert the entire $1,016,000 convertible
debenture financing, we issued the following shares:




(a)
            4,945,000
      (pre reverse stock split) shares of our common stock pursuant to the
      conversion of $494,500 of the convertible debenture financing issued on
      March 23, 2006,




(b)
            10,160,000
      (pre reverse stock split) shares of our common stock pursuant to the
      conversion of 10,160,000 (pre reverse stock split) convertible units at a
      price of $0.10 per unit for total proceeds of $1,016,000, the convertible
      debenture financing issued on February 12,
2007.




Each unit
is comprised of one common share and one non-transferable common share purchase
warrant, and each such warrant entitles the holder to purchase one additional
share of our common stock for a period of five years from the date of the issue
at an exercise price of $0.10 (pre reverse stock split) per share during the
first two years, $0.20 (pre reverse stock split) per share during the third
year, $0.30 (pre reverse stock split) per share during the fourth year and $0.40
(pre reverse stock split) per share during the fifth year.


15




The
$1,016,000 convertible debenture financing was completed on November 30, 2006,
for which we had issued convertible promissory notes that bear interest at 8%
per annum in the first year and 12% per annum in the second year.  If
not converted, the notes were due one year from the date of loan
advance.  The unpaid amount of principal and accrued interest could be
converted at any time at the holder’s option into shares of our common stock at
a price of $0.10 (pre reverse stock split) per convertible unit.  Each
convertible unit, upon conversion, is comprised of one of our common shares and,
without conversion, one of our non-transferable and detached share purchase
warrant, which are issuable and exercisable without conversion.  The
warrants forming part of the convertible units are detachable from any
conversion and non-transferable, and each such warrant entitles the holder to
purchase one additional share of our common stock for a period of five years
from the date of the issue at an exercise price of $0.10 (pre reverse stock
split) per share during the first two years, $0.20 (pre reverse stock split) per
share during the third year, $0.30 (pre reverse stock split) per share during
the fourth year and $0.40 (pre reverse stock split) per share during the fifth
year.  We had the right to redeem the convertible promissory notes at
any time upon giving certain notice to the holder(s), and subject to paying a
20% premium in cash or shares (based on the previous 30 day average trading
price of our shares).




(c)
            4,750,000
      (pre reverse stock split) shares of common stock pursuant to a private
      placement financing of 4,750,000 units at a price of $0.10 (pre reverse
      stock split) per unit for gross proceeds of $475,000.  Each unit
      is comprised of one common share and one non-transferable common share
      purchase warrant, and each such warrant entitles the holder to purchase
      one additional share of our common stock for a period of five years from
      the date of the issue at an exercise price of $0.10 (pre reverse stock
      split) per share during the first two years, $0.20 (pre reverse stock
      split) per share during the third year, $0.30 (pre reverse stock split)
      per share during the fourth year and $0.40 (pre reverse stock split) per
      share during the fifth year.




The
convertible debenture financing of $494,500 was completed in March, 2006, for
which we had issued convertible promissory notes that bear interest at 8% per
annum in the first year and 12% per annum in the second year.  If not
converted, the notes were due one year from the date of loan
advance.  The unpaid amount of principal and accrued interest may be
converted at any time at the holder’s option into shares of our common stock at
a price of $0.10 (pre reverse stock split) per convertible unit.  Each
convertible unit, upon conversion, is comprised of one share of our common stock
and, without conversion, one of our non-transferable and detached share purchase
warrants, which are issuable and exercisable without conversion.  The
warrants forming part of the convertible units are detachable from any
conversion and non-transferable, and each such warrant entitles the holder to
purchase one additional share of our common stock for a period of five years
from the date of the issue at an exercise price of $0.10 (pre reverse stock
split) per share during the first two years, $0.20 (pre reverse stock split) per
share during the third year, $0.30 (pre reverse stock split) per share during
the fourth year and $0.40 (pre reverse stock split) per share during the fifth
year.  We have the right to redeem the convertible promissory notes at
any time upon giving certain notice to the holder(s), and subject to paying a
20% premium in cash or shares (based on the previous 30 day average trading
price of our shares).




Consulting
Service Agreements




On
December 19, 2007 we agreed to issue 120,000 shares of our restricted common
stock pursuant to a consulting services agreement.  The restricted
common shares were recorded at their fair market value of


16




$0.195
per share and accordingly, their total value of $23,400 has been recorded as a
stock issuance obligation.




On
October 31, 2007 we issued 100,000 shares of our restricted common stock
pursuant to a consulting services agreement.  The restricted common
shares were recorded at their fair market value of $0.36 per share and
accordingly their total value of $36,000 has been recorded as stock based
consulting fees.




2007
Stock Incentive Plan




On June
8, 2007, our Board of Directors approved the adoption of a stock option plan
(the “2007 Plan”) allowing for the granting of up to 16,000,000 (pre reverse
stock split) options to our directors, officers, employees and
consultants.  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.




On June
8, 2007, we granted a total of 15,800,000 (pre reverse stock split) stock
options under the 2007 Plan to consultants, directors and officers at an
exercise price of $0.10 (pre reverse stock split) per share.  The term
of these options is ten years, with 7,750,000 (pre reverse stock split) stock
options vesting immediately, 6,050,000 one year from issuance, 1,000,000 two
years from issuance and 1,000,000 three years from issuance.




Warrants




On
December 18, 2007 we agreed to issue 400,000 non-transferable registerable share
purchase warrants.  The warrants are to be issued within 12 months of
the agreement as consideration for a six month extension of an unsecured
promissory note from 2007, and will be considered fully paid and
non-assessable.  Each warrant will entitle the holder to purchase one
additional share of our common stock for a period of three years from the date
of the issue at an exercise price of $0.25 per share.




On
November 30, 2007 we issued 1,780,000 non-transferable registerable share
purchase warrants pursuant to a loan and security agreement.  Each
warrant entitles the holder to purchase one additional share of our common stock
for a period of five years from the date of the issue at an exercise price of
$0.25 per share.




On
November 30, 2007 we issued 178,000 non-transferable registerable share purchase
warrants as a financing fee pursuant to the loan and security
agreement.  Each cashless warrant entitles the holder to purchase one
additional share of our common stock for a period of five years from the date of
the issue at an exercise price of $0.25 per share.




On
October 31, 2007 we issued 125,000 non-transferable registerable share purchase
warrants.  The warrants were issued as partial consideration of an
unsecured promissory note and are considered fully paid and
non-assessable.  Each warrant entitles the holder to purchase one
additional share of our common stock for a period of one year from the date of
the issue at an exercise price of $0.30 per share.




On July
3, 2007 we signed a letter agreement extending the term of the 166,667 warrants
originally issued with the outstanding convertible note issued in 2004 for a
period of two years or 18 months after effective registration and reduced the
conversion price from $1.25 to $0.25.




Throughout
the year we issued 1,500,000 (pre reverse split) warrants as finder’s fee,
5,450,000 (pre reverse split) warrants as part of the private placement units
and 10,160,000 (pre reverse split) warrants as part of the debt conversion
units. See Private Placements
and Convertible Debentures above.


17




ITEM
6.                      Management’s
Discussion And Analysis Or Plan Of Operation




Overview




We are
focused on developing innovative therapeutics to treat serious disorders,
primarily for cancer and infectious diseases.  Since our inception we
have devoted substantially all of our resources to research and development
activities, primarily with early stage research in the field of gene
therapy.  We are currently conducting preclinical studies using our
TAP gene technology in combination with an in-licensed adeno virus, with the aim
of  completing our preclinical trials and filing an Investigational
Drug Application for cancer in 12 to 24 months.  We are also pursuing
vaccine developments for infectious diseases using our TAP gene technology and
an in-licensed Modified Vaccinia Ankora virus with the aim of establishing
licensing and partnering relationships to generate revenue and advance our
technology to the clinic.




We are a
development stage company and have primarily supported the financial needs of
our research and development activities since our inception through public
offerings and private placements of our equity securities.  We have not
received any revenue from the sale of our products in development, and we do not
anticipate generating revenue from the sale of products in the foreseeable
future.  In order to carry out our corporate operational plan and to
support the anticipated future needs of our research and development activities,
we expect that we will have cash requirements of approximately $5,000,000 over
the next 24 months, which we expect to obtain through additional equity
financings.  The funding that we need would, if obtained, be used to
support our activities surrounding our proposed clinical grade production of our
lead TAP vaccine product, commencement of human clinical studies, advance the
development of our prophylactic vaccine campaign and proceed with potential
acquisitions or in-licensing of new technologies or products.  In the
event that we are able to secure funding through the sale of our securities, it
is expected that we will expand our management team to include a Director of
Clinical Operations, Director of Business Development, a Director of Regulatory
Affairs, a Director of Research, and a Controller.  It is also
anticipated that as we advance our product development in oncology and
prophylactic vaccines, we will incrementally increase the number of scientists
employed by us to approximately six.




We have
recently secured a new leased laboratory for exclusive use by us, and we have
transferred our technologies from UBC to the new facility.




If we are
able to generate revenues in the next few years, we expect the source of such
revenue to consist of payments under collaborative arrangements with third
parties, government grants, and license fees. We have incurred losses since our
inception and expect to incur losses over the next several years due to our lack
of any substantial source of revenue and the continuation of our ongoing and
planned research and development efforts, including preclinical studies and
clinical trials.  There can be no assurance that we will successfully
acquire, develop, commercialize, manufacture, or market our product candidates
or ever achieve or sustain product revenues or profitability.




We had
conducted our research and development at UBC under our Collaborative Research
Agreement with the same, however, as a consequence of our Option and Settlement
Agreement with UBC, we presently plan to conduct our own research and
development and continue to contract out clinical grade production of our TAP
based vaccines.  In addition, we in-license our adeno and MVA vectors
and receive technical assistance from our licensing partners.




In
accordance with the terms and conditions of our Option and Settlement Agreement
with UBC, and in order to keep the right and Option to Purchase the Technology
granted to us by UBC in good standing and in force and effect; and in order to
maintain the Settlement of all UBC Financial Claims consequent therein; we were
obligated to make Purchase Price Payments of $556,533 (CDN) prior to December
31,


18




2006 and
to maintain the current status of UBC’s existing patent and patent pending
applications respecting the Technology.




On
December 18, 2006 we negotiated an extension of the January 24, 2006 Option and
Settlement Agreement with UBC.  Under the terms of the extension we
were obligated to pay UBC $216,533 (CDN) as follows:




(a)           $72,177
(CDN) on or before December 31, 2006 (paid);




(b)
            $72,178
      (CDN) plus interest of $3,362 (CDN) on or before March 20, 2007 (paid);
      and




(c)           $72,178
(CDN) plus interest of $1,423 (CDN) on or before May 31, 2007
(paid).




As of May
31, 2007 we completed our obligation with UBC and the technology assignment and
transfer was completed in the current fiscal year.  Additional
‘flow-through’ technologies are currently being assigned as a continuation of
the Option Settlement Agreement and are expected to be completed in the first
half of 2008.




We had
Production Services Agreement with SAFC Pharma, (formerly Molecular Medicine)
for the production of a clinical grade of our TAP adeno based vaccine for
pre-clinical toxicology analysis.  However, in August of 2004 we
ceased production of our clinical grade vaccine due to technical difficulties
related to the yields of vaccine.  Crucell is currently in the process
of solving technical issues associated with production yields of the
vaccine.  Despite the technical difficulties we anticipate a clinical
grade TAP based vaccine to be produced utilizing the adeno vector from Crucell
or our in-house adeno virus vector to allow us to meet our milestones for
commencing toxicology analysis by the end of 2008.  We anticipate
commencing clinical grade production of our oncology vaccine in
2008.




We were
in breach of our contractual obligations with Moleclar Medicine in respect of
payments due for Phase I of the project.  We have agreed that advance
payments that had been made for subsequent phases could be allocated to the
Phase I deficiency so that all payments that were due under the PSA have now
been paid in full and we have a credit of approximately $78,000 with Molecular
Medicine to be applied towards future vaccine production.




Pursuant
to the Research License and Option Agreement Crucell granted us a non-exclusive,
worldwide license for Crucell’s adenovirus technology and an option for a
non-exclusive, worldwide commercial license to manufacture, use, offer for sale,
sell and import products using the licensed technology in the therapy of human
subjects by administering a modified and proprietary adeno virus vector (used to
package our TAP gene technology and deliver it to the target cancer cell in the
patient) including, but not limited to, therapeutic gene
sequence(s).  The Research License and Option Agreement provided for
bi-annual license maintenance fees of 50,000 Euros, exclusive of applicable
taxes, during the first two years of the agreement, and an annual license
maintenance fees of 75,000 Euros, exclusive of applicable taxes, starting on the
third anniversary until the expiration of the agreement on August 7,
2008.  Total obligations under this agreement are 450,000
Euros.




To
December 31, 2003, we had made payments required totaling $115,490 (€100,000) to
Crucell pursuant to the terms of the Research License and Option
Agreement.  Pursuant to the terms of the Research License and Option
Agreement, a further $120,697 (€100,000) was incurred (not paid) during 2004 and
an additional $126,355 (€100,000) was incurred during 2005 leaving a total of
$236,880 (€200,000) owing as at December 31, 2005.  Pursuant to the
Research License and Option Agreement, if a party defaults in the performance of
or fails to be in compliance with any material condition of this agreement, the
Research License and Option Agreement may be terminated if the default or
noncompliance is not


19




remedied
or steps initiated to remedy three months after receipt in writing to the
defaulting party.  Effective June 6, 2005, Crucell gave us notice of
default whereby we had three months to remedy the default.  On
November 16, 2005, Crucell provided notice of Termination by Default due to our
failure to remedy the default within the required three month
period.




In May
2006 we negotiated a reinstatement of the original Research and License Option
Agreement with Crucell and paid Crucell on April 20, 2006 €123,590 (US$151,521)
in connection with the reinstatement.  Under the revised terms of the
agreement, we will pay Crucell 12 monthly payments of €10,300 starting May 2006
(paid to October 31, 2006 as of December 31, 2007) and a €75,000 annual license
fee (not paid as of December 31, 2007, adjusted for CPI) in order to keep the
reinstated agreement in good standing.  In January, 2008 we paid
$40,000 to the outstanding balance of €136,800, and are currently working with
Crucell to maintain our license and relationship, as well as reaching a new
payment schedule for the outstanding fees.




We also
have a License Agreement with the National Institute of Health (USA) for the use
of the Modified Vaccinia Ankora (MVA) virus for the development of
vaccines.  We will continue to license this technology for the
development of prophylactic vaccines against infectious
diseases.  Under the terms of this agreement we are required to pay a
royalty of $2,500 per year which has been paid.




Plan
of Operation and Funding




Management
believes that an estimated $5,000,000 is required over the next two years for
expenses associated with the balance of pre-clinical development and completion
of toxicology trials for the TAP Cancer Vaccine and prophylactic vaccine
adjuvant and for various operating expenses.  We are encouraged by
recent success stories in the small cap biotech arena where larger biotech and
pharmaceutical companies have taken significant positions in, or invested in
joint development projects with, smaller companies like ours.  While
the capital markets are currently very challenging, we are hopeful that our
early success and very promising technology will enable us to raise the required
funding to proceed.  We expect to raise funds in the short term to pay
some debt and initiate our manufacturing contracts.  The short term
requirement is roughly $1,000,000 with a further $1.5M to $2M required for the
next 12 months and to get us to point where we can initiate a Phase 1 study (a
single phase 1 study will cost approximately $5M).




We have
not generated any cash flows to fund our operations and activities due primarily
to the nature of lengthy product development cycles that are normal to the
biotech industry.  Therefore, we must raise additional funds in the
future to continue operations.  We intend to finance our operating
expenses with further issuances of common stock.  We believe that
anticipated future private placements of equity capital, if successful, may be
adequate to fund our operations over the next 24 months.  Thereafter,
we expect we will need to raise additional capital to meet long-term operating
requirements.  Our future success and viability are dependent on our
ability to raise additional capital through further private offerings of our
stock or loans from private investors.  Additional financing may not
be available upon acceptable terms, or at all.  If adequate funds are
not available or are not available on acceptable terms, we may not be able to
conduct our proposed business operations successfully, which could significantly
and materially restrict or delay our overall business operations.




Application
of 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 US generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities,


20




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.




Financial
Instruments




The fair
values of cash and cash equivalents, other current monetary assets, accounts
payable and accrued liabilities, and other current liabilities were estimated to
approximate their carrying values due to the immediate or short-term maturity of
these financial instruments.  Our operations and financing activities
are conducted primarily in United States dollars, and as a result we are not
subject to significant exposure to market risks from changes in foreign currency
rates.  Management has determined that we are not exposed to
significant credit risk.




Stock
Based Compensation




On
January 1, 2006, we adopted SFAS No. 123 (revised 2004) (SFAS No. 123R),
Share-Based Payment, which addresses the accounting for stock-based payment
transactions in which an enterprise receives employee services in exchange for
(a) equity instruments of the enterprise or (b) liabilities that are based on
the fair value of the enterprise’s equity instruments or that may be settled by
the issuance of such equity instruments.  In January 2005, the SEC
issued Staff Accounting Bulletin (SAB) No. 107, which provides supplemental
implementation guidance for SFAS No. 123R. SFAS No. 123R eliminates the ability
to account for stock-based compensation transactions using the intrinsic value
method under Accounting Principles Board (APB) Opinion No. 25, Accounting for
Stock Issued to Employees, and instead generally requires that such transactions
be accounted for using a fair-value-based method.  We use the
Black-Scholes-Merton (“BSM”) option-pricing model to determine the fair-value of
stock-based awards under SFAS No. 123R, consistent with that used for pro forma
disclosures under SFAS No. 123, Accounting for Stock-Based
Compensation.  We have elected the modified prospective transition
method as permitted by SFAS No. 123R and, accordingly, prior periods have not
been restated to reflect the impact of SFAS No. 123R.  The modified
prospective transition method requires that stock-based compensation expense be
recorded for all new and unvested stock options, restricted stock, restricted
stock units, and employee stock purchase plan shares that are ultimately
expected to vest as the requisite service is rendered beginning on January 1,
2006 the first day of our 2006 fiscal year.  Stock-based compensation
expense for awards granted prior to January 1, 2006 is based on the grant date
fair-value as determined under the pro forma provisions of SFAS No.
123.




Prior to
the adoption of SFAS No. 123R, we measured compensation expense for its employee
stock-based compensation plans using the intrinsic value method prescribed by
APB Opinion No. 25.  We applied the disclosure provisions of SFAS No.
123 as amended by SFAS No. 148, Accounting for Stock-Based Compensation –
Transition and Disclosure, as if the fair-value-based method had been applied in
measuring compensation expense.  Under APB Opinion No. 25, when the
exercise price of our employee stock options was equal to the market price of
the underlying stock on the date of the grant, no compensation expense was
recognized.


21




Recent
Accounting Pronouncements




In
February 2007 the FASB issued SFAS No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities”.  This statement permits entities to
choose to measure many financial assets and financial liabilities at fair
value.  Unrealized gains and losses on items for which the fair value
option has been elected are reported in earnings. SFAS No. 159 is effective for
fiscal years beginning after November 15, 2007.  We are currently
assessing the impact of SFAS No. 159 on our financial position and results of
operations.




In
December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in
consolidated Financial Statements - an Amendment of ARB No. 51." This statement
requires that noncontrolling or minority interests in subsidiaries be presented
in the consolidated statement of financial position within equity, but separate
from the parents' equity, and that the amount of the consolidated net income
attributable to the parent and to the noncontrolling interest be clearly
identified and presented on the face of the consolidated statement of
income.  SFAS No. 160 is effective for the fiscal years beginning on
or after December 15, 2008.  Currently the Company does not anticipate
that this statement will have an impact on its financial
statements.




In
December 2007, the FASB issued SFAS No. 141 (Revised) “Business Combinations”.
SFAS 141 (Revised) establishes principles and requirements for how the acquirer
of a business recognizes and measures in its financial statements the
identifiable assets acquired, the liabilities assumed, and any noncontrolling
interest in the acquiree.  The statement also provides guidance for
recognizing and measuring the goodwill acquired in the business combination and
determines what information to disclose to enable users of the financial
statements to evaluate the nature and financial effects of the business
combination.  The guidance will become effective for the fiscal year
beginning after December 15, 2008.  Management is in the process of
evaluating the impact, if any, SFAS 141 (Revised) will have on the Company’s
financial statements upon adoption.




On
December 21, 2007, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 110, (“SAB 110).  SAB 110 provides guidance to
issuers on the method allowed in developing estimates of expected term of “plain
vanilla” share options in accordance with SFAS No. 123(R), “Share-Based
Payment”.  The staff will continue to accept, under certain
circumstances, the use of a simplified method beyond December 31, 2007 which
amends question 6 of Section D.2 as included in SAB 107, “Valuation of
Share-Based Payment Arrangements for Public Companies”, which stated that the
simplified method could not be used beyond December 31, 2007.  SAB 110
is effective January 1, 2008.  The Company is currently evaluating the
potential impact, if any, that the adoption of SAB 110 will have on its
financial statements.




In March
2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and
Hedging Activities ("SFAS 161"). SFAS 161 is intended to improve financial
reporting about derivative instruments and hedging activities by requiring
enhanced disclosures to enable investors to better understand their effects on
an entity's financial position, financial performance, and cash
flows.  SFAS 161 achieves these improvements by requiring disclosure
of the fair values of derivative instruments and their gains and losses in a
tabular format.  It also provides more information about an entity's
liquidity by requiring disclosure of derivative features that are credit
risk-related.  Finally, it requires cross-referencing within footnotes
to enable financial statement users to locate important information about
derivative instruments.  SFAS 161 will be effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008, will be adopted by the Company beginning in the first quarter of
2009.  The Company does not expect there to be any significant impact
of adopting SFAS 161 on its financial position, cash flows and results of
operations.


22




For the
Fiscal Year Ended December 31, 2007 Compared with the Fiscal Year Ended
December 31, 2006




Our net
revenues during the fiscal years ended December 31, 2007 and 2006 were
$Nil.  The lack of revenues during the fiscal years ended
December 31, 2007 and 2006 resulted from the emphasis on the research and
development of the TAP technologies.  Interest income of $Nil was
recorded during the years ended December 31, 2007 and 2006.




Consulting
fees were $171,854 during the fiscal year ended December 31, 2007 compared
to $155,407 during the prior fiscal year, an increase of $16,447.  The
increase was due primarily to new agreements in the current year for investor
relations and marketing services.




Consulting
fees – stock based were $309,500 during the fiscal year ended December 31,
2007 compared to $Nil for the prior fiscal year.  The current year
expense consists of the fair value of stock and option grants earned by
consultants during the year.  No stock or option grants were issued to
consultants in the prior year.




Gain on
settlement of debt decreased to $Nil during the fiscal year ended
December 31, 2007 compared to $30,461 during the prior fiscal
year.  There were no debt settlement agreements in the current fiscal
year.




General
and administrative costs increased to $132,587 during the fiscal year ended
December 31, 2007 compared to $33,515 during the prior fiscal year, and
increase of $99,072.  The increase results from charges relating to a
new office and laboratory lease agreement, increased transfer agent and filings
fees, and a significant increase in travel related to financing
activities.




Interest
and finance charges was $1,380,075 during the fiscal year ended
December 31, 2007 compared to $446,598 during the prior fiscal year, an
increase of $933,477.  The increase is due to accrued interest,
accretion of the discount on the 2006 convertible debt, amortization of the fair
value of warrants on the 2006 convertible debt, $1,016,000 in costs classified
as interest charges resulting from conversion of the debt, and the fair value of
warrants issuable with new promissory notes signed during the current
year.  The $1,016,000 non-monetary charge relates to the unaccreted
fair value of the beneficial conversion feature and warrants on the 2007
convertible debt.  Once the debt was converted, the unaccreted charge
was required to be recognized immediately.




Management
fees were $286,632 during the fiscal year ended December 31, 2007 compared
to $182,819 during the prior fiscal year, an increase of
$103,813.  The increase results from increases in executive
compensation agreements during the current year.




Management
fees – stock based were $654,722 during the fiscal year ended December 31,
2007 compared to $Nil for the prior fiscal year.  The current year
expense consists of the fair value of option grants earned by management during
the year.  No option grants were issued to management in the prior
year.




Professional
fees were $524,502 during the fiscal year ended December 31, 2007 compared
to $240,016 during the prior fiscal year, an increase of
$284,486.  The increase is due primarily to significant increases in
fees relating to financing arrangements and new legal fees relating to the
review of, and reinstatement patent applications.




Research
and development costs during the fiscal year ended December 31, 2007 were
$425,569 compared to $270,122 during the prior fiscal year, an increase of
$155,447.  The increase results from new research and consulting
service agreements during the current fiscal year.


23




As a
result of the above, during the fiscal year ended December 31, 2007, we
recorded operating expenses of $3,891,411, compared to $1,304,387 in the prior
fiscal year, an increase of $2,587,024.  The increase results
primarily from significant changes in stock based compensation and interest and
financing charges during the current year.




Of the
$3,891,411 incurred as operating expenses, we paid or accrued an aggregate of
$449,865 in cash based fees payable to certain directors and/or private
companies controlled by those directors of the company and other related parties
pursuant to consulting, management and research and development
agreements.  Additionally, we incurred an aggregate of $654,722 in
stock based management fees based on the fair value of option grants earned by
certain directors and officers during the year.




As a
result of the above, our net losses during the fiscal year ended
December 31, 2007 were $3,891,411 or $0.19 per share as compared to a net
loss of $1,304,387 or $0.11 per share during the prior fiscal year, an increase
of $2,587,024.  The increase in net loss is attributable primarily to
interest and finance charges related to convertible debt and the issuance of
warrants, and the fair value of stock-based compensation.




Liquidity
and Capital Resources




As
December 31, 2007, we had $167,539 in cash.  Generally, we have
financed operations to date through the proceeds of secured and unsecured
promissory notes, convertible debt and the private placement of equity
securities.  We received $1,040,734 during the fiscal year ended
December 31, 2007 from financing activities.




We
completed a $1,016,000 convertible debenture financing on February 12, 2007
which was immediately converted into 4,064,000 shares of our common stock at a
price of $0.25 per share.  In addition, the holders of the notes were
granted common stock purchase warrants entitling the holder to purchase an
additional 4,064,000 shares of our common stock for a period of five years from
the date of issuance.  The warrants are exercisable at a price of
$0.25 per share during the first two years, $0.50 per share during the third
year, $0.75 per share during the fourth year, and $1.00 per share during the
fifth year.  Subscriptions for the $1,016,000 convertible debenture
financing were received prior to December 31, 2006.  The
convertible debenture bears interest at 8% per annum in the first year and 12%
per annum in the second year.  Because the debenture was converted
upon issuance, no interest was accrued or paid for the debenture.




Additionally,
we completed a private placement financing on February 12, 2007 and issued
1,900,000 units at a price of $0.25 per unit for total proceeds of
$475,000.  Each unit is comprised of one common share and one
non-transferable common share purchase warrant.  Each common share
purchase warrant entitles the holder to acquire an additional common share for a
period of five years.  The warrants are exercisable at a price of
$0.25 per share during the first two years, $0.50 per share during the third
year, $0.75 per share during the fourth year, and $1.00 per share during the
fifth year.  On June 8, 2007 we completed a $70,000 private
placement financing by issuing 280,000 units at a price of $0.25 per
unit.  Each unit is comprised of one common share and one
non-transferable common share purchase warrant.  Each common share
purchase warrant entitles the holder to acquire an additional common share for a
period of five years.  The warrants are exercisable at a price of
$0.25 per share during the first two years, $0.50 per share during the third
year, $0.75 per share during the fourth year, and $1.00 per share during the
fifth year.  Subscriptions for the $70,000 private placement financing
were received prior to December 31, 2006.




On
July 31, 2007 we completed a $100,000 unsecured promissory note financing
which was revised to $125,000 on August 31, 2007.  In addition,
the holder of the notes was granted non-transferable and registerable common
stock purchase warrants entitling the holder to purchase an additional
125,000


24




shares of
our common stock for a period of one year from the date of issuance at an
exercise price of $0.30 per share.  The promissory note matured on
September 28, 2007 and bears interest at 12% per annum.  At December
31, 2007 interest of $6,625 was accrued on the promissory note.  As of
the date of this report no payment was made on the principal or the
interest.  On December 18, 2007 we signed an agreement to extend the
terms of the 2007 Promissory Notes through February 28, 2008.  As
consideration for the extension, we agreed to issue to the Lender, as fully paid
and non-assessable, 400,000 non-transferable and registerable share purchase
warrants to acquire an equivalent number of common shares of the Company, at an
exercise price of $0.25 per share and for an exercise period of up to three
years from the issuance date.




On August
31, 2007 we received total proceeds of $200,000 for the principal amount of a
convertible promissory note that bears interest at 12% per annum and is due on
demand.  Upon completion of the conversion terms, the unpaid amount of
principal and accrued interest may be converted at any time at the holder’s
option into shares of our common stock.  The conversion price will be
determined by the purchase price of our next stock offering or convertible debt
financing.  As of December 31, 2007 and the date of this report, no
further convertible debt financing was completed, therefore no conversion
feature was determined for this promissory note, which is recorded as
subscription received at the end of the year. Interest of $8,022 has been
accrued to the note at December 31, 2007, and no repayment has been made to the
principal or interest.




On
November 30, 2007 we entered into a Loan and Security Agreement whereby we
issued secured promissory notes in the principal amount of $445,000, with 12%
interest paid in advance resulting in net proceeds of $391,600.  The
promissory notes mature on May 31, 2008.  As part of this financing,
the holders of the notes were granted common stock purchase warrants entitling
the holders to purchase an additional 1,780,000 shares of our common stock for a
period of five years from the date of issuance at an exercise price of $0.25 per
share.  In relation to this financing, for finders’ fees we paid
$54,195 in cash and issued 178,000 warrants under the same terms as the
lenders’.




Under the
Loan and Security Agreement the notes shall be prepaid if the Company receives
funds from a sale or series of sales of any debt or Common Stock or Common Stock
Equivalents in the aggregate of $2,000,000 or more.  Under the terms
of the Loan and Security Agreement, the Company granted a first priority
security interest in Company collateral, including, but not limited to: (i) all
goods, including machinery and inventory; (ii) all contract rights and other
general intangibles; (iii) all accounts, together with all instruments, etc.,
(iv) all documents, letter of credit rights, instruments and chattel paper; (v)
all commercial tort claims; (vi) all deposit accounts and all cash; (vii) all
investment property; (viii) all supporting obligations; (ix) all files, records,
books of account, business papers, and computer programs; and (x) the products
and proceeds of all of the foregoing.




We
completed a $494,500 convertible debenture financing on March 24,
2006.  Subscriptions from this financing totaling $60,000 were
received prior to December 31, 2005.  Subsequent to
March 24, 2006, we received an additional $1,086,000 of subscriptions on a
second tranche of convertible debenture financing that was completed on
February 12, 2007.




During
2005 we completed a private placement financing of 9,068,301 units, at a price
of $0.15 per unit, for gross proceeds of $1,360,245, pursuant to Regulation S
promulgated under the Securities Act.  Each unit is comprised of one
common share and one-half of one non-transferable common share purchase
warrant.  Each such whole common share purchase warrant entitled the
holder to acquire an additional common share for a period of two years at a
price of $0.15 before the earlier of four months from the issue date of the
warrant and the date we completed an additional financing of not less than
$2,000,000, $0.30 for the balance of the first year and thereafter at
$0.50.  Finders’ fees comprised of 8% cash and 5% finder’s fee
warrants were paid to certain registered broker dealers in respect of certain of
the placees.  We paid a total of $97,620 in cash finder’s fees,
$100,561 in legal fees and other issue costs and issued a


25




total of
406,748 finder’s fee warrants.  The total fair value of the unit
warrants and finder’s warrants was estimated to be $116,206 and was recorded as
a separate component of stockholders’ equity.




During
2004 we issued unsecured convertible promissory notes in the principal amount of
$500,000.  The notes provided for an interest rate of 8% per annum and
were due 12 months from the date of issue.  The unpaid amount of
principal and interest was convertible at any time, at the holder’s option, into
shares of our common stock at a price of $0.60 per share.  In
addition, the holders of the notes were granted common stock purchase warrants
entitling the holder to purchase an additional 250,000 shares (in respect of the
$300,000 note) and 166,667 shares (in respect of the $200,000
note).  The warrants were exercisable at a price of $0.66 per share
for a period of two years.  We also granted to Duncan Capital, which
entity arranged for the financing, a further 125,000 common stock purchase
warrants with an estimated fair value of $15,000 as a finder’s fee entitling the
holder to purchase an additional 83,333 shares of our common stock at a price of
$0.60 per share for a period of two years and 41,667 shares of our common stock
at a price of $0.66 per share for a period of two years.   This
offering was sold to a limited number of accredited investors pursuant to
section 4(2) of the Securities Act.  In 2005 the terms of the
convertible notes were amended to extend the maturity to April 28, 2006, reduce
the conversion price from $0.60 to $0.30 and to reduce the warrant exercise
price from $0.66 to $0.30 for the period to December 31, 2005 and to $0.50 for
the remainder of the original warrant term.  In addition, the term of
the warrants will be extended for a period of greater than the original two
years dependent on achieving certain listing conditions as per the amending
agreement.




Also
during 2004 we closed a private placement offering of 857,143 units, at a
subscription price of $0.70 per unit, with each unit comprised of one share of
common stock and one share purchase warrant.  The offering was
conducted outside of the United States to non-U.S. Persons in accordance with
the registration exemption provided by Regulation S promulgated under the
Securities Act.  Each such warrant entitles the holder to purchase one
share of common stock at an exercise price of $0.70 within two years of the date
of issuance.  Gross proceeds of the offering were
$600,000.  The offering provides the investors with piggy-back
registration rights relating to any follow on financing conducted that requires
registration of the subject financing shares.  The offering was exempt
from registration pursuant to Regulation S promulgated under the Securities
Act.




Net cash
used in operating activities during the fiscal year ended December 31, 2007
was  $1,225,649.  We had no revenues during the 2006 and
2007 fiscal years.  Expenditures were primarily the result of payments
for consulting, management, and professional fees in addition to our research
and development activities.




At
December 31, 2007, we had 6,320,000 stock options and 11,071,667 share
purchase warrants outstanding.  The outstanding stock options and
warrants have a weighted average exercise price of $0.25 per
share.  Accordingly, as at December 31, 2007, the outstanding
options and warrants represented a total of 17,391,667 shares issuable for a
maximum of approximately $4,347,917 if these options and warrants were exercised
in full.  The exercise of these options and warrants is completely at
the discretion of the holders.  There is no assurance that any of
these options or warrants will be exercised.




As of
December 31, 2007, we anticipate that we will need significant financing to
enable us to meet our anticipated expenditures for the next 24 months, which is
anticipated to be $8,000,000 assuming a single Phase 1 clinical
trial.




Our
financial statements have been prepared assuming that we will continue as a
going concern and, accordingly, do not include adjustments relating to the
recoverability and realization of assets and classification of liabilities that
might be necessary should we be unable to continue in operation.  Our
ability to continue as a going concern is dependent upon our ability to obtain
the necessary financing to


26




meet our
obligations and pay our liabilities arising from our business operations when
they come due.  We will be unable to continue as a going concern if we
are unable to obtain sufficient financing.




Off-Balance
Sheet Arrangements




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




Risk
Factors




An
investment in us entails numerous risks and uncertainties, including those
listed below, that should be carefully considered.  These risk and
uncertainties could cause our actual results to differ materially from those
expected which would have a material adverse effect on our business and
financial condition.




We
have a history of operating losses.




We
continue to incur losses and are will  require additional financing to
continue our operations.  We have incurred operating losses and
negative cash flow from operations for most of our history.  Losses
incurred since our inception have aggregated $18,616,167 and there can be no
assurance that we will be able to generate positive cash flows to fund our
operations in the future or to pursue our strategic objectives.  We
believe that we will have sufficient cash to satisfy our needs for at least the
next four to sixmonths.  We
will need to raise additional capital, most likely via the sale of equity
securities, to fund our operations.  There can be no assurance that we
will be able to obtain such financing on terms satisfactory to us, if at
all.  Any additional equity financing may be dilutive to existing
stockholders, and debt financing, if available, may include restrictive
covenants.  If adequate funds are not available, we might be required
to limit our research and development activities or our selling, marketing and
administrative activities any of which could have a material adverse effect on
the future of the business.




Further,
we do not have any products that generate revenue and expect our operating
losses to increase significantly as we commence clinical trials.  We
do not expect to earn significant revenue for several years, and may never do
so.  Continued operating losses and the failure to satisfy our
financial obligations will have a material adverse effect upon our financial
condition and the future of our business.




The
independent auditor’s report accompanying our December 31, 2007
consolidated financial statements contains an explanatory paragraph expressing
substantial doubt about our ability to continue as a going concern.




The
consolidated financial statements have been prepared “assuming that we will
continue as a going concern,” which contemplates that we will realize our assets
and satisfy our liabilities and commitments in the ordinary course of
business.  Our ability to continue as a going concern is dependent on
raising additional capital to fund ongoing research and development and
ultimately on generating future profitable operations.  There can be
no assurance that we will be able to raise sufficient additional capital or
eventually positive cash flow from operations to address all of our cash flow
needs.  If we were not able to find alternative sources of cash or
generate positive cash flow from operations, our business and financial
condition would be materially and adversely affected.


27




We depend
upon collaborative relationships and third parties for product development and
commercialization, and are in breach of many of the agreements with these
parties.




We have
historically entered into research and development agreements with collaborative
partners. Pursuant to these agreements, our collaborative partners provide us
with the intellectual property and options for the license of the intellectual
property necessary to develop and commercialize our product
candidates.  We will continue to rely on future collaborative partners
for the development of products and technologies.  There can be no
assurance that we will be able to negotiate such collaborative arrangements on
acceptable terms, if at all, or that current or future collaborative
arrangements will be successful.  To the extent that we are not able
to establish such arrangements, we could be forced to undertake such activities
at our own expense.  The amount and timing of resources that any of
these partners devotes to these activities will generally be based on progress
by us in our product development efforts.  Some of our collaborative
arrangements may be terminated by the partner upon prior notice without cause
and there can be no assurance that any of these partners will perform its
contractual obligations or that it will not terminate its
agreement.




In August
of 2004 our Collaborative Research Agreement with UBC expired and could not be
continued because the company lacked the financial
resources.  However, UBC did not terminate the research activities and
research and development continued at UBC through December 2004 on the
understanding that the expenses incurred would be paid once we received further
financing or would be incorporated into the terms of a new
agreement.  As of December 31, 2004, outstanding debt of TapImmune to
UBC incurred pursuant to this arrangement was approximately
$803,953.  In December of 2005 we signed a Letter of Intent with UBC
whereby all existing financial claims by UBC would be satisfied in consideration
of UBC providing us with an option to acquire outright all of UBC’s right title
and interest in the technologies licensed to us.  The Letter of Intent
was followed by the completion of a definitive agreement on January 24,
2006.  Under the terms of the agreement we were obligated to pay UBC
$478,532 ($556,533 (CDN)).




Under the
terms of the agreement we were also obligated to pay any other costs or expenses
which may be due and owing by us to UBC under the license agreements and the CRA
as at the effective date which, in the aggregate, shall not exceed $8,598
($10,000 (CDN)).




Under the
terms of the agreement we also assumed responsibility for the management,
maintenance and protection of all patents and patent applications filed in
connection with the technology.




On
December 18, 2006 we negotiated an extension with UBC of the January 24, 2006
Option and Settlement Agreement.  Under the terms of the extension we
were obligated to pay UBC $216,533 (CDN) as follows:




(a)
            $72,177
      (CDN) on or before December 31, 2006;
(paid);




(b)
            $72,178
      (CDN) plus interest of $3,362 (CDN) on or before March 20, 2007 (paid);
      and




(c)
            $72,178
      (CDN) plus interest of $1,423 (CDN) on or before May 31, 2007
      (paid).




As of May
31, 2007 we completed our obligation with UBC and the technology assignment and
transfer was completed in the current fiscal year.




To
December 31, 2003, we had made payments required totaling $115,490
(€100,000) to Crucell pursuant to the terms of the Research License and Option
Agreement.  Pursuant to the terms of the Research License and Option
Agreement, a further $120,697 (€100,000) was incurred (not paid) during 2004 and
an additional $126,355 (€100,000) was incurred during 2005 leaving a total of
$236,880 (€200,000) owing as at December 31, 2005.  Pursuant to the
Research License and Option Agreement, if a party


28




defaults
in the performance of or fails to be in compliance with any material condition
of this agreement, the Research License and Option Agreement may be terminated
if the default or noncompliance is not remedied or steps initiated to remedy
three months after receipt in writing to the defaulting
party.  Effective June 6, 2005, Crucell gave us notice of default
whereby we had three months to remedy the default.  On November 16,
2005, Crucell provided notice of Termination by Default due to our failure to
remedy the default within the required three month period.




In May of
2006 we negotiated a reinstatement of the original Research and License Option
Agreement with Crucell and paid Crucell on April 2006 €123,590 (US$151,521) in
connection with the reinstatement.  Under the revised terms of the
agreement, we would pay Crucell 12 monthly payments of €10,300 starting May 2006
(paid to October 31, 2006 as of December 31, 2007) and a €75,000 annual license
fee (not paid as of December 31, 2007, adjusted for CPI) in order to keep the
reinstated agreement in good standing.  In December we discussed our
ongoing commitment to Crucell and agreed to continue our relationship and to
bring our contract up to date at our first opportunity after successful
financing.  In January, 2008 we paid $40,000 to the outstanding
balance of €136,800, and are currently working with Crucell to reach a new
payment schedule for the outstanding fees.




We were
in breach of our contractual obligations with Moleclar Medicine in respect of
payments due under the PSA for Phase I.  The parties have agreed that
advance payments that had been made for subsequent phases could be allocated to
the Phase I deficiency so that all payments that were due under the PSA have now
been paid in full and we have a $78,000 surplus which can be applied towards
subsequent phases of the project.




Preclinical
testing and future clinical trials may take longer than anticipated, and we may
be unable to complete them at all.




While
management believes that the Phase I human clinical trials of the TAP Cancer
Vaccine in oncology will commence in fiscal year 2009 there can be no assurances
that they will occur on this time frame, if at all.  We may not
commence or complete the pivotal clinical trials of the TAP Cancer Vaccine or
commence or complete clinical trials involving any other product candidates or
may not conduct them successfully.  Further, our development costs
will increase if we experience any future delays in the preclinical trials or
clinical trials for the TAP Cancer Vaccine or other potential products or if we
are required to perform additional or larger clinical trials than currently
planned.  Any substantial delay of or the failure to complete the
clinical trials would have a material adverse effect upon our
business.




If
testing of a particular product candidate does not yield successful results,
then we will be unable to commercialize that product.  We must
demonstrate the safety and efficacy of the TAP Cancer Vaccine and its other
potential products in humans through extensive preclinical and clinical
testing.  We may experience numerous unforeseen events during, or as a
result of, the testing process that could delay or prevent commercialization of
our product candidates.  Further, clinical testing is very expensive,
the process takes many years, and the outcome is
uncertain.  Unsuccessful results from preclinical and clinical testing
will have a material adverse effect on our business.




Our
products and activities are subject to regulation by various governments and
government agencies.




The
testing of our products is subject to regulation by numerous governmental
authorities, principally the FDA and certain foreign regulatory
agencies.  Pursuant to the Federal Food, Drug, and Cosmetic Act, and
the regulations promulgated there under, the FDA regulates the preclinical and
clinical testing, development, and commercialization of our potential
products.  Noncompliance with applicable requirements can result in,
among other consequences, fines, injunctions, civil penalties, recall or
seizure


29




of
products, repair, replacement or refund of the cost of products, total or
partial suspension of production, failure of the government to grant pre-market
clearance or pre-market approval for devices, withdrawal of marketing clearances
or approvals, and criminal prosecution.




Government
regulation imposes significant costs and restrictions on the development and
commercialization of our products and services.  Our success will
depend on our ability to satisfy regulatory requirements.  We may not
receive required regulatory approvals on a timely basis, if at
all.  Government agencies heavily regulate the production and sale of
healthcare products and the provision of healthcare services.  In
particular, the FDA and comparable agencies in foreign countries must approve
human therapeutic and diagnostic products before they are marketed, as well as
the facilities in which they are made.  This approval process can
involve lengthy and detailed laboratory and clinical testing, sampling
activities and other costly and time-consuming procedures.  Our
failure to comply with applicable regulatory approval requirements may lead
regulatory authorities to take action against us, which may delay or cease the
development and commercialization of our product candidates.




Therapies
that have received regulatory approval for commercial sale may continue to face
regulatory difficulties.  The FDA and comparable foreign regulatory
agencies, may require post-marketing clinical trials or patient outcome
studies.  In addition, regulatory agencies subject a marketed therapy,
its manufacturer and the manufacturer’s facilities to continual review and
periodic inspections.  The discovery of previously unknown problems
with a therapy, the therapy’s manufacturer or the facility used to produce the
therapy could prompt a regulatory authority to impose restrictions on the
therapy, manufacturer or facility, including withdrawal of the therapy from the
market.




Competition
in the human medical diagnostics industry is, and is expected to remain,
significant, and we may never obtain market acceptance of our product
candidates.




Competition
in the cancer therapeutics field is intense and is accentuated by the rapid pace
of technological development.  Our competitors range from development
stage diagnostics companies to major domestic and international pharmaceutical
companies.  Many of these companies have financial, technical,
marketing, sales, manufacturing, distribution and other resources significantly
greater than ours.  In addition, many of these companies have name
recognition, established positions in the market and long standing relationships
with customers and distributors.  Moreover, the industry has recently
experienced a period of consolidation, during which many of the large domestic
and international pharmaceutical companies have been acquiring mid-sized
diagnostics companies, further increasing the concentration of
resources.  Our future success will depend on our ability to
effectively develop and market our product candidates against those of our
competitors.  If our product candidates receive marketing approval,
but cannot compete effectively in the marketplace, our business and financial
position would suffer greatly.  There can be no assurance that
technologies will not be introduced that could be directly competitive with or
superior to our technologies.




Market
acceptance of the TAP Cancer Vaccine and our other product candidates is
uncertain.  Even if the TAP Cancer Vaccine and other potential
products are approved and sold, physicians may not ultimately use them or may
use them only in applications more restricted than we
expect.  Physicians will only prescribe a product if they determine,
based on experience, clinical data, side effect profiles and other factors, that
it is beneficial and preferable to other products and treatments then in
use.  Many other factors influence the adoption of new products,
including marketing and distribution restrictions, course of treatment, adverse
publicity, product pricing, the views of thought leaders in the medical
community, and reimbursement by third-party payers.  Failure to obtain
market acceptance of our product candidates will have a material adverse effect
upon our business.


30




We depend
on key employees.




Due to
the specialized nature of our business, our success will be highly dependent
upon our ability to attract and retain qualified scientific and executive
personnel.   Our success depends to a significant extent upon our
key management, including Denis Corin, our President and Chief Executive
Officer, Patrick McGowan, our Chief Financial Officer, and Dr. Wilfred
Jefferies, our Principle Scientist.  There can be no assurance that we
will be successful in attracting and retaining the personnel we require to
develop and market our product candidates and to conduct our operations
successfully.  Failure to retain Mr. Corin, Mr. McGowan, or Dr.
Jefferies would have a material adverse effect upon our business.




Our
success depends, in part, on our ability to obtain patents and license patent
rights, to maintain trade secret protection and to operate without infringing on
the proprietary rights of others.




Our
success depends in part on our ability to obtain and maintain patent protection
for the technology underlying our product candidates, both in the United States
and in other countries.  We cannot assure you that any of our current
or future patent applications will result in issued patents, or that any patents
issued to us or licensed by us will not be challenged, invalidated or held
unenforceable.  Further, we cannot guarantee that any patents issued
to us will provide us with a significant competitive advantage.  If we
fail to successfully enforce our proprietary technology or otherwise maintain
the proprietary nature of our intellectual property with respect to our
significant current and proposed products, it would have a material adverse
effect upon our business.  We could incur substantial costs in
defending the company or our licensees in litigation brought by others who claim
that we are infringing on their intellectual property rights.  The
potential for reduced sales and increased legal expenses would have a negative
impact on our cash flow and thus our overall business could be adversely
affected.




The
testing, manufacturing and marketing of therapeutic medical technology entails
an inherent risk of product liability claims.




To date,
we have experienced no product liability claims, but any such claims arising in
the future could have a material adverse effect on our business, financial
condition and results of operations.  Potential product liability
claims may exceed the amount of our insurance coverage or may be excluded from
coverage under the terms of our policy or limited by other claims under our
umbrella insurance policy.  Additionally, there can be no assurance
that our existing insurance can be renewed by us at a cost and level of coverage
comparable to that presently in effect, if at all.  In the event that
we are held liable for a claim against which we are not insured or for damages
exceeding the limits of our insurance coverage, such claim could have a material
adverse effect on our cash flow and thus potentially have a materially adverse
effect on our business, financial condition and results of
operations.




We
use hazardous materials in some of our research and development
activities.




Our
research activities sometimes involve the controlled use of various hazardous
materials.  Although we believe that our safety procedures for
handling and disposing of such materials comply with the standards prescribed by
state and federal regulations, the risk of accidental contamination or injury
from these materials cannot be completely eliminated.  We could be
held liable for any damages that might result from any such accident involving
such hazardous materials.  Any such liability could have a material
adverse effect on our business and financial condition.


31




There
has, to date, been no active public market for our common stock, and there can
be no assurance that an active public market will develop or be
sustained.




Our
common stock has been traded on the OTCBB since prior to the acquisition of
GeneMax Pharmaceuticals.  Both before and since the acquisition
trading in our common stock has been sporadic with insignificant
volume.  Moreover, the over-the-counter markets for securities of very
small companies historically have experienced extreme price and volume
fluctuations.  These broad market fluctuations and other factors, such
as new product developments, trends in our industry, the investment markets,
economic conditions generally, and quarterly variation in our results of
operations, may adversely affect the market price of our common
stock.  In addition, our common stock is subject to rules adopted by
the SEC regulating broker-dealer practices in connection with transactions in
“penny stocks.”  Such rules require the delivery prior to any penny
stock transaction of a disclosure schedule explaining the penny stock market and
all associated risks and impose various sales practice requirements on
broker-dealers who sell penny stocks to persons other than established customers
and accredited investors, which are generally defined as institutions or an
investor with a net worth in excess of $1,000,000 or annual income exceeding
$200,000 or $300,000 together with the spouse.  For these types of
transactions the broker-dealer must make a special suitability determination for
the purchaser and have received the purchaser’s written consent to the
transaction prior to sale.  The additional burdens imposed upon
broker-dealers by such requirements may discourage broker-dealers from effecting
transactions in securities subject to the penny stock rules.  We do
not intend to pay any cash dividends on our common stock in the foreseeable
future.  Significant fluctuations in out stock price may have a
material adverse effect upon our shareholders.




We
are controlled by management.




As of the
date of this Annual Report our officers and directors owned of record
approximately 868,896 or 3.70% of the outstanding shares of common
stock.  If they exercise all of the vested options that they currently
hold, they would own 2,148,896 shares of our common stock or 9.10% of the
outstanding shares of common stock.  Due to their stock ownership, the
officers and directors may be in a position to elect the Board of Directors and
to control our business and affairs, including certain significant corporate
actions such as acquisitions, the sale or purchase of assets and the issuance
and sale of the company’s securities.  The interest of our officers
and directors may differ from the interests of other shareholders.




As of the
date of this Annual Report we had reserved 6,400,000 shares of common stock for
issuance upon exercise of options which have been or may be granted pursuant to
our stock option plans, of which options to purchase 6,320,000 shares are
outstanding.  Additionally, as of the date of this Annual Report there
were 11,071,667 warrants outstanding to purchase our common
stock.  Sales of common stock underlying these stock options and
warrants would have a significant dilutive effect upon our current shareholders
and may adversely affect the price of the common stock.




Pursuant
to the terms and provisions of the 442668 B.C. Consulting Agreement, Dr.
Jefferies was entitled to performance based stock options pursuant to which Dr.
Jefferies’ fully diluted equity ownership interest would be modified to 25% of
the total issued and outstanding shares of common stock.  The
provision was to expire on December 31, 2007, and was subject to the achievement
of performance milestones to be mutually agreed upon us and Dr. Jefferies and
regulatory approvals of applicable jurisdictions.  As of the date of
this Annual Report the 442668 B.C. Consulting Agreement has been renegotiated
and such provision has been eliminated.  Dr Jefferies ownership
position is approximately 15%.


32




ITEM
7.                      FINANCIAL
STATEMENTS




Our
audited consolidated financial
statementsfor the year ended December 31, 2007, are included as a
separate sectionof this Annual
Report on Form 10-KSB beginning on page F-1.




ITEM
      8.
            CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS OF ACCOUNTING AND FINANCIAL
      DISCLOSURE




None.




ITEM
8A.                      CONTROLS
AND PROCEDURES




Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed by our company is recorded,
processed, summarized and reported, within the time periods specified in the
rules and forms of the SEC.  Our Chief Executive Officer, Denis Corin,
and our Chief Financial Officer, Patrick A. McGowan, are responsible for
establishing and maintaining disclosure controls and procedures for our
company.




Our
management has evaluated the effectiveness of our disclosure controls and
procedures as of December 31, 2007 (under the supervision and with the
participation of the Chief Executive Officer and the Chief Financial Officer),
pursuant to Rule 13a-15(b) promulgated under the Exchange
Act.  As part of such evaluation, management considered the matters
discussed below relating to internal control over financial
reporting.  Based on that evaluation, Messrs. Corin and McGowan
concluded that subject to the inherent limitations noted below, the company’s
disclosure controls and procedures were considered to be generally effective on
a scaled basis for the size and nature of the entity and for management
purposes. Based on the inherent weaknesses we cannot conclude that such controls
were effective in the context of a framework such as the COSO model designed for
a larger entity with full segregation of duties, full time expert level GAAP and
disclosure knowledge and resources necessary to ensure that information required
to be disclosed in the reports that it files or submits under the Exchange Act
is recorded, processed, summarized and reported within the time periods
specified in applicable SEC rules and forms.




The term
"internal control over financial reporting" is defined as a process designed by,
or under the supervision of, the registrant’s principal executive and principal
financial officers, or persons performing similar functions, and effected by the
registrant’s board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles and includes those policies and
procedures that:




●
            pertain
      to the maintenance of records that in reasonable detail accurately and
      fairly reflect the transactions and dispositions of the assets of the
      registrant;




●
            provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with generally accepted
      accounting principles, and that receipts and expenditures of the
      registrant are being made only in accordance with authorizations of
      management and directors of the registrant;
and




●
            provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of the registrant’s assets
      that could have a material effect on the financial
    statements.




Disclosure
controls and procedures have inherent limitations relative to the financial
resources of a Company and the number of personnel.  The disclosures
controls and procedures may not prevent all


33




error and
fraud in the Company's financial reporting.  A control system, no
matter how well conceived and operated, can provide only reasonable, but not
absolute, assurance that the objectives of a control system are
met.  Further, any control system reflects limitations on resources,
and the benefits of a control system must be considered relative to its
costs.  These limitations also include the realities that management
override and segregation of duties, together with availability challenges for
members of the board and committees to provide more consistent oversight and
direction. Judgments in decision-making can be faulty and that breakdowns can
occur because of simple error or mistake.  Additionally, controls can
be circumvented by the individual acts of some persons, by collusion of two or
more people or by management override of a control.  A design of a
control system is also based upon certain assumptions about potential future
conditions; over time, controls may become inadequate because of changes in
conditions, or the degree of compliance with the policies or procedures may
deteriorate.  Because of the inherent limitations in a cost-effective
control system, misstatements due to error or fraud may occur and may not be
detected.




Our view
is that with certain changes in our management structure, corporate governance
policies and accounting personnel during our prior fiscal year, our internal
controls over financial reporting have been improved to a level necessary to
reduce the risk of material misstatement or error to an appropriate level scaled
for the size and nature of the business.  Further improvements in both
entity level and process level controls are planned for 2008 to assist
management in meeting current financial reporting control reporting
requirements.




ITEM
8B.                      OTHER
INFORMATION




None.


34







PART III




ITEM
9.                      DIRECTORS
AND EXECUTIVE OFFICERS OF THE REGISTRANT




Directors
and Executive Officers




Our
directors are elected at each annual meeting of shareholders and serve until the
next succeeding annual meeting and until their successors have been elected and
qualified or until their resignation or removal.  Our executive
officers serve at the discretion of the board and until their resignation or
removal.  The following table sets forth certain information with
respect to our directors and executive officers:





Name
            Age
            Position
      with the CompanyDenis
      Corin
            35
            President,
      Chief Executive Officer and Principal Executive OfficerPatrick
      A. McGowan
            68
            Secretary,
      Treasurer, Chief Financial Officer, Principal Accounting Officer and a
      directorAlan
      P. Lindsay
            57
            DirectorGlynn
      Wilson
            60
            Director




Biographies
of Directors and Officers




Denis
Corin has served as our President and Chief Executive Officer of the
Company since November of 2006.  Denis Corin is a management
consultant with experience in large pharmaceutical (Novartis), diagnostic
instrumentation companies (Beckman Coulter) as well as the small cap biotech
arena (MIV Therapeutics).  He holds a double major, Bachelors degree
in Economics and Marketing, from the University of Natal, South
Africa.  Mr. Corin has not been involved in the past five years in any
legal proceedings described in Item 401(d) of Regulation S-B.




Patrick A.
McGowan has served as a director and as our Secretary, Treasurer, Chief
Financial Officer and Principal Accounting Officer since December of
2005.  Mr. McGowan is a management consultant specializing in
assisting public companies with financing, regulatory filings, administration
and business plans.  From November 2001 to the present, he has been
engaged by MIV Therapeutics, Inc. (“MIVT”) to serve as its Executive Vice
President and CFO, and to assume responsibility for negotiations with attorneys,
auditors and financial institutions and the day to day business operations of
MIVT.  From September 1997 to the time he joined MIVT, Mr. McGowan
served as CEO of American Petro-Hunter, Inc. (“American”), an oil exploration
company with duties including reviewing business proposals, writing business
plans and approving corporate filings.  Mr. McGowan was also
responsible for all legal matters and functional areas of business for American,
including administration, accounting, contract negotiations, banking, writing
press releases and overseeing regulatory filings.  American is
currently listed on the OTCBB.  Mr. McGowan obtained his Masters of
Business Administration from the University of Western Ontario in 1965, and his
Bachelors of Science from the University of Oregon in 1963.  Mr.
McGowan has not been involved in the past five years in any legal proceedings
described in Item 401(d) of Regulation S-B.


35




Alan P.
Lindsay has served as a director of the Company since December of
2005.  He has extensive experience in building companies and taking
them public on recognized stock exchanges.  Mr. Lindsay has been the
Chairman, President and CEO of MIVT, a reporting company listed on the OTCBB,
since October of 2001.  Before coming to MIVT, Mr. Lindsay was the
Chairman, President and CEO of Azco Mining Inc. (“Azco”), a base metals
exploration company he co-founded and took public on the Toronto and American
Stock Exchanges.  Mr. Lindsay served as Azco’s CEO and President from
1991 to 1994, as its Chairman and CEO from 1994 to 1997 and as its President,
Chairman and CEO from 1997-2000.  Azco was listed on the Toronto Stock
Exchange in 1993 and on the American Stock Exchange in 1994.  Mr.
Lindsay was also the Chairman of GeneMax Pharmaceuticals Inc., the predecessor
non-reporting company to the Company, which he co-founded 1999 and assisted with
its financing.  Mr. Lindsay resigned as Chairman prior to the company
going public, and as director shortly afterward.  In 2002 GeneMax
Pharmaceuticals Inc. was taken public through a reverse take over and was listed
on the OTCBB as the present Company.  Mr. Lindsay was also formerly
responsible for building a significant business and marketing organization in
Vancouver, B.C., Canada, for Manulife Financial, a major international financial
services corporation.  Mr. Lindsay has not been involved in the past
five years in any legal proceedings described in Item 401(d) of Regulation
S-B.




Glynn
Wilson has served as a director of the Company since February of
2005.  Dr. Wilson is an internationally renowned expert in drug
delivery technologies. Dr. Wilson was the Worldwide Head of Drug Delivery at
SmithKline Beecham from 1989 to 1994, and the Chief Scientific Officer at Tacora
Corporation from 1994 to 1997.  Dr. Wilson was the Vice-President,
R&D, at Access Pharmaceuticals from 1997 to 1998, and the President and CEO
of PharmaSpec Corporation from 1999 to 2000.  Most recently Dr. Wilson
is President and Chief Scientific Officer of Auriga Pharmaceuticals, a public
specialty pharmaceutical company.  He is President and CEO of the GW
Group.  Dr. Wilson obtained his Ph.D. in Biochemistry, at Heriot-Watt
University, Edinburgh in 1972.  He has been an adjunct professor,
Pharmaceutics and Pharmaceutical Chemistry, at the University of Utah since
1994, and was a faculty member at Rockefeller University, New York, in the
laboratory of the Nobel Laureates, Sanford Moore and William Stein, from 1974 to
1979.




Committees
of the Board of Directors




Audit
Committee




Our Board
of Directors has established an Audit Committee which functions pursuant to a
written charter adopted by our Board of Directors in March 2004; a copy of which
has been filed with the SEC as Exhibit 99.1 to our Annual Report on Form 10-KSB
for the year ended December 31, 2003.  The members of our Audit
Committee are Messrs. McGowan and Lindsay and Dr. Wilson.




Our Board
of Directors has determined that our Audit Committee does not have a member that
qualifies as an “audit committee financial expert” as defined in
Item 401(e) of Regulation S-B.  Our Board of Directors believes
that it is capable of analyzing and evaluating our financial statements and
understanding internal controls and procedures for financial reporting and that
retaining an independent director who would qualify as a “audit committee
financial expert” would be overly costly and burdensome at this
time.




Compliance
with Section 16(a) of the Exchange Act




Section
16(a) of the Exchange Act requires our directors and officers, and the persons
who beneficially own more than ten percent of our common stock to file reports
of ownership and changes in ownership with the Commission.  Copies of
all filed reports are required to be furnished to us pursuant to Rule 16a-3
promulgated under the Exchange Act.  To our knowledge, based solely on
review of copies of such


36




reports
furnished to us and verbal representations to us, all Section 16(a) filing
requirements applicable to our directors and executive officers were not timely
met.  No person that was appointed as our director or officer in 2006
filed a Form 3 upon becoming our officer or director.  We have
retained U.S. securities counsel to assist with efforts to comply with Section
16 requirements.  We have no knowledge of the holdings of any 10%
shareholders.




Code
of Ethics




We have
been in the process of renegotiating certain agreements and raising capital, and
at this time, we have not adopted a formal Code of Ethics.  We expect
to adopt a formal Code of Ethics in the second quarter of 2008.




ITEM
10.                      EXECUTIVE
COMPENSATION




The
following table shows the amount of compensation paid by us to our Chief
Executive Officer, Chief Financial Officer, and those executive officers that
earned in excess of $100,000 during the fiscal year ended December 31, 2007
(collectively, the “Named Executive Officers”):





Name
      and Position
            Year
            Salary
            Bonus
            Stock
      Awards
            Option
      Awards
            TotalDenis
      Corin
              President
      and Chief Executive Officer
            2007
            $102,546
            $40,000
            $Nil
            $120,000
            $262,546Patrick
      A. McGowan
              Secretary,
      Treasurer and Chief Financial Officer
            2007
            $33,589
            $Nil
            $Nil
            $60,000
            $93,589




The
amounts represent fees paid or accrued by us to the Named Executive Officers
during the past year pursuant to various employment and consulting services
agreements, as between us and the Named Executive Officers, which are described
below.  Our Named Executive Officers are also reimbursed for any
out-of-pocket expenses incurred by them in connection with their
duties.  We presently have no pension, health, annuity, insurance,
profit sharing or similar benefit plans.




Stock
Options/SAW Grants in Fiscal Year Ended December 31, 2007




The
following table sets forth information as at December 31, 2007 relating to
options that have been granted to the Named Executive Officers:


37





Outstanding
      Equity Awards at Fiscal Year-EndOption
      AwardsName
      and Position
            Number
      of Securities Underlying Unexercised Options (exercisable)
            Number
      of Securities Underlying Unexercised Options
    (unexercisable)
            Equity
      Incentive Plan Awards: Number of Securities Underlying Unexercised
      Unearned Options
            Option
      Exercise Price
            Option
      Expiration DateDenis
      Corin
              President
      and Chief Executive Officer
            400,000
            400,000
            Nil
            $0.25
            06/08/17Patrick
      A. McGowan
              Secretary,
      Treasurer and Chief Financial Officer
            200,000
            200,000
            Nil
            $0.25
            06/08/17




The
following table sets forth information relating to compensation paid to our
directors in 2007.





Name
            Fees
      Earned or Paid in Cash
            Stock
      Awards
            Option
      Awards
            All
      Other Amounts
            TotalAlan
      P. Lindsay
            $99,997
            $Nil
            $168,000
            $Nil
            $267,997Glynn
      Wilson
            $10,500
            $Nil
            $76,000
            $Nil
            $86,500Patrick
      A. McGowan
            $33,589
            $Nil
            $76,000
            $Nil
            $109,589




Management
Consulting Agreements




442668
B.C. Consulting Agreements




On
February 1, 2000, GeneMax Pharmaceuticals and 442668 B.C. Ltd, a British
Columbia corporation, entered into a consulting agreement, which we refer to as
the 442668 B.C. Consulting Agreement, and such agreement was amended effective
December 31, 2003.  Dr. Jefferies an officer, director and a 50%
shareholder of 442668 B.C. Ltd.  Pursuant to the 442668 B.C.
Consulting Agreement, as amended, Dr. Jefferies was to provide technical,
research and technology development services to us until March 6,
2005.  Dr. Jefferies was to be paid a monthly fee of approximately
$14,166 (CDN) for an aggregate annual salary of $170,000 (CDN), and would be
reimbursed for expenses incurred for the benefit of GeneMax
Pharmaceuticals.  Separately, it was agreed that Dr. Jefferies would
also be entitled to certain provisions in respect of his stock position pursuant
to which, upon the achievement of certain milestones to be mutually agreed upon
by us and Dr. Jefferies, Dr. Jefferies’ fully diluted equity ownership interest
would be modified to 25% of the total issued and outstanding shares of common
stock.  These provisions were to expire on December 31, 2007 and were
also subject to regulatory approvals of applicable
jurisdictions.


38




Effective
December 31, 2003, our Board of Directors approved and authorized the payment to
Dr. Jefferies of a bonus in the aggregate amount of $50,000
(CDN).  The bonus was to accrue and, at the election of Dr. Jefferies,
was to be payable from receipt of certain subsequent proceeds or assigned to us
for the exercise price of certain stock options.




Effective
February 8, 2005, the 442668 B.C. Consulting Agreement was
renegotiated.  The renegotiated agreement, which we refer to in this
Annual Report as the “Jefferies & 442668 B.C. Consulting Agreement”, was
entered into by us, 442668 B.C. Ltd. and Dr. Jefferies and provides for a base
fee of $10,000 (CDN) per month, an annual bonus to be determined by our
compensation committee and a grant of options, at a future date to be
determined, to acquire up to 2,500,000 shares of common
stock.  Options to acquire an additional 2,000,000 shares of common
stock will be granted upon the achievement of certain financial
milestones.  In addition, 442668 B.C. Ltd. will be issued 452,100
shares of common stock in consideration of the forgiveness of $113,205 of debt
that had accrued under the 442668 B.C. Ltd. Consulting Agreement.




Under the
Jefferies & 442668 B.C. Consulting Agreement, 442668 B.C. Ltd. agreed to
provide the services of Dr. Jefferies as our Chief Science
Officer.  The terms of the renegotiated agreement expires December 31,
2007 and will automatically renew for successive one year terms unless a party
gives not less than 6 months notice of termination to the other.




Corin
Executive Services Agreements




On
November 17, 2006 our Board of Directors, in consultation with our Compensation
Committee, completed an executive services agreement with Denis Corin, our
President and CEO.  The terms of the agreement, as determined by our
Compensation Committee, provides for, among other matters, the provision for
monthly consulting fees of approximately $4,300 (CAN$5,000) during an
eight-month initial term, and the granting of an aggregate of not less that
1,000,000 (pre reverse stock split) stock options to acquire a similar number of
our common shares at an exercise price of $0.10 (pre reverse stock split) per
share for a period of not less than five years from the date of
grant.




On June
30, 2007 with an effective date of May 1, 2007, our Board of Directors approved
an amended executive services agreement with Mr. Corin with a one year
term.  The amended agreement, provides for an increase in the month
consulting fees to $10,000 per month through the term of the agreement, and an
increase providing for the granting of an aggregate of not less that 2,000,000
(pre reverse stock split) stock options to acquire a similar number of our
common shares at an exercise price of $0.10 (pre reverse stock split) per share
for a period of not less than five years from the date of grant.




Lindsay
Executive Services Agreement




On
November 17, 2006 with an effective of July 1, 2006 our Board of Directors, in
consultation with our Compensation Committee, completed an executive services
agreement with Alan P. Lindsay, one of our directors.  The terms of
the agreement, as determined by our Compensation Committee, provides for, among
other matters, the provision for a service bonus payment to Mr. Lindsay’s
management company in the amount of $50,000, the provision for monthly
consulting fees of $8,333 during a one-year initial term, and the granting of an
aggregate of not less that 1,500,000 (pre reverse stock split) stock options to
acquire a similar number of our common shares at an exercise price of $0.10 (pre
reverse stock split) per share for a period of not less than five years from the
date of grant.


39




McGowan
Executive Services Agreement




On
November 17, 2006 with an effective of July 1, 2006 our Board of Directors, in
consultation with our Compensation Committee, completed an executive services
agreement with Patrick A. McGowan, our Secretary, CFO and one of our
directors.  The terms of the agreement, as determined by our
Compensation Committee, provides for, among other matters, the provision for a
service bonus payment to Mr. McGowan in the amount of approximately $16,104
(CAN$18,000), the provision for monthly consulting fees of approximately $2,790
(CAN$3,000) during a one-year initial term, and the granting of an aggregate of
not less than 500,000 (pre reverse stock split) stock options to acquire a
similar number of our common shares at an exercise price of $0.10 (pre reverse
stock split) per share for a period of not less than five years from the date of
grant.




ITEM
      11.
            SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS




The
following table sets forth, as of the date of this Annual Report certain
information regarding the ownership of our common stock by (i) each person known
by us to be the beneficial owner of more than 5% of our outstanding shares of
common stock, (ii) each of our directors, (iii) each Named Executive Officer and
(iv) all of our executive officers and directors as a group. Unless otherwise
indicated, the address of each person shown is c/o TapImmune Inc., 3590 West
41st
Avenue, Unit 2, Vancouver, British Columbia, Canada V6N 3E6. Beneficial
ownership, for purposes of this table, includes options to purchase common stock
that are either currently exercisable or will be exercisable within 60 days of
the date of this annual report.





Name
      and Address of Beneficial Owner
            Amount and Nature of Beneficial
      Ownership(1)
            Percentage
      of Beneficial OwnershipDenis
      Corin
              Vancouver,
      British Columbia, Canada
            510,000(2)
            2.2%Patrick
      A. McGowan
              Vancouver,
      British Columbia, Canada
            381,432(3)
            1.6%Alan
      P. Lindsay
              Vancouver,
      British Columbia, Canada
            1,057,464(4)
            4.5%Glynn
      Wilson
              Vancouver,
      British Columbia, Canada
            200,000(5)
            Nil%All
      officers and directors as a group (4 persons)
            2,148,896
            9.1%Major
      ShareholdersWilfred
      A. Jefferies
              12596
      23rd
      Avenue
              Surrey,
      British Columbia, Canada
            3,551,902(6)
            15.1%Arasha
      Group Ltd.
              35A
      Regent Street,
              Belize
      City, Belize
            1,400,000
            6.0%




*
            Less
      than 1%.




(1)
            Under
      Rule 13d-3, a beneficial owner of a security includes any person who,
      directly or indirectly, through any contract, arrangement, understanding,
      relationship, or otherwise has or shares: (i) voting power, which includes
      the power to vote, or to direct the voting of shares; and (ii) investment
      power, which includes the power to dispose or direct the disposition of
      shares.  Certain shares may be deemed to be beneficially owned
      by more than one person (if, for example, persons share the power to vote
      or the power to dispose of the shares).  In addition, shares are
      deemed to be beneficially owned by a person if the person has the right to
      acquire the shares (for example, upon exercise of an option) within 60
      days of the date as of which the information is provided.  In
      computing the percentage ownership of any person, the amount of shares
      outstanding is deemed to include the amount of shares beneficially owned
      by such person (and only such person) by reason of these acquisition
      rights.  As a result, the percentage of outstanding shares of
      any person as shown in this table does not necessarily reflect the
      person’s actual ownership or voting power with respect to the number of
      shares of common stock actually outstanding as of the date of this Annual
      Report.  As of the date of this Annual Report, there were
      23,502,681 shares issued and outstanding.  Beneficial ownership
      amounts reflect the revense stock split effective June 28,
      2007.




(2)
            This
      figure includes (i) 110,000 shares of common stock, and (ii) 800,000
      options to acquire an equivalent number of common shares at $0.25 for 10
      years granted; of which 400,000 do not vest until June 8,
      2008.




(3)
            This
      figure includes (i) 181,432 shares of common stock, and (ii) 400,000
      options to acquire an equivalent number of common shares at $0.25 for 10
      years granted; of which 200,000 do not vest until June 8,
      2008.




(4)
            This
      figure includes (i) 10,800 shares of common stock, (ii) 566,664 shares of
      common stock held by Alan Lindsay & Associates Inc., and (iii) 800,000
      options to acquire an equivalent number of common shares at $0.25 for 10
      years granted; of which 400,000 do not vest until June 8,
      2008.




(5)
            This
      figure includes (i) 400,000 options to acquire an equivalent number of
      common shares at $0.25 for 10 years granted; of which 200,000 do not vest
      until June 8, 2008.




(6)
            Includes:
      (a) 1,443,716 shares of common stock, (ii) 1,108,186 shares of common
      stock held by 442668 B.C. Ltd.; and (iii) 2,200,000 options to acquire an
      equivalent number of common shares at $0.25 for 10 years granted; of which
      400,000 do not vest until June 8, 2008, 400,000 do not vest until June 8,
      2009, and 400,000 do not vest until June 8,
  2010.




Notwithstanding
the pooling agreement described under “Certain Relationships and Related
Transactions”, there are no arrangements or understanding among the parties set
out above or their respective associates or affiliates concerning election of
directors or any other matters which may require shareholder
approval.


40




Securities
Authorized For Issuance Under Equity Compensation Plans




Equity
Compensation Plan Information


Plan
      Category
            Number
      of Securities to be Issued Upon Exercise of Outstanding
      Options
            Weighted-Average
      Exercise Price of Outstanding Options
            Number
      of Securities Remaining Available for Future Issuance Under Equity
      Compensation PlansEquity
      Compensation Plans approved by security holders
            Nil
            $Nil
            NilEquity
      Compensation Plans not approved by security holders
            6,320,000
            $0.25
            80,0006,320,000
            $0.25
            80,000




ITEM
12.                      CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS




Voluntary
Pooling Agreement




On May 9,
2002 in connection with the acquisition of our subsidiaries, GeneMax
Pharmaceuticals Inc., TapImmune, certain shareholders and Global Securities
Transfer Inc. (now X-Clearing Corp.), and our stock transfer agent, entered into
an agreement, referred to as the “VPA”, effective July 15, 2002.  The
VPA provides that certain of our shareholders holding collectively 9,158,280
shares of common stock agreed to a restrictive holding period for the pooled
shares.  The VPA provides that the pooled shares will not be traded,
will not become available for trading and will not be released to the
shareholders to enable them to be sold until certain future release
dates.  The initial ten percent (10%) of the pooled shares was to be
released on or about that date which was one year from the final closing under
the share exchange agreement relating to the acquisition of GeneMax
Pharmaceuticals Inc.; however the pooling committee established by the Board of
Directors to administer the VPA extended that date by one year.  We
subsequently determined that the initial 10% release should have occurred on
October 15, 2003 and that the pooling committee had effectively extended that
date to October 15, 2004.  Following the initial release, the
remaining pooled shares will be released in ten percent (10%) increments every
three calendar months.  The terms of the VPA may not be changed and
the pool may not be challenged without the prior written consent of at least
such number of pooled shareholders who hold not less than two-thirds of the
pooled shares remaining in the pool.  On March 10, 2007 the pooled
shares were released from the VPA and have now been delivered to the company’s
original VPA shareholders.




442668
B.C. Consulting Agreement




See
“Executive Compensation – Management Consulting Agreements” for a description of
this agreement.




During
the fiscal year ended December 31, 2007, pursuant to the 442668 B.C. Consulting
Agreement with 442668 B.C. Ltd., we (i) paid or incurred $112,313 in development
consulting fees, and (ii) recorded stock-based compensation of $200,024 relating
to vested options granted to Dr. Jefferies during the year.  Dr.
Jefferies is an officer, director and a 50% shareholder of 442668 B.C.
Ltd.


41




ITEM
13.                      Exhibits




Index to
and Description of Exhibits:




Exhibit
Number                                                                           Description
of Exhibit




31.1
            Section
      302 Certification of Chief Executive Officer included
      herewith.




31.1
            Section
      302 Certification of Chief Financial Officer included
      herewith.




32.1
            Section
      906 Certification of Chief Executive Officer included
      herewith.




32.1
            Section
      906 Certification of Chief Financial Officer included
      herewith.






ITEM
14.                      PRINCIPAL
ACCOUNTANT FEES AND SERVICES




The Company’s independent auditor is
Dale Matheson Carr-Hilton LaBonteLLP.  The aggregate fees billed by Dale Matheson Carr-Hilton
LaBonte LLPfor each of
the last two fiscal years for professional services rendered are as
follows:





Audit
      Fees
            Audit-Related
      Fees
            Tax
      Fees
            All
      Other Fees2007
            $55,000
            $Nil
            $Nil
            $Nil2006
            $40,000
            $Nil
            $Nil
            $Nil




Audit
Fees




Audit
fees are the aggregate fees billed by our independent auditor for the audit of
our annual consolidated financial statements, reviews of our interim
consolidated financial statements and attestation services that are provided in
connection with statutory and regulatory filings or engagements.




Audit-Related
Fees




Audit-related
fees are fees charged by our independent auditor for assurance and related
services that are reasonably related to the performance of the audit or review
of our financial statements and are not reported under “Audit
Fees.”




Tax
Fees




Tax fees
are fees for professional services rendered by our independent auditors for tax
compliance and tax advice on actual or contemplated transactions.




All
Other Fees




All other
fees relate to services other than the audit fees, audit-related fees and tax
fees described above.




Our audit
committee is responsible for the appointment, compensation, retention and
oversight of the work of our independent auditors (including resolution of
disagreements between management and the


42




independent
auditor regarding financial reporting) for the purpose of preparing or issuing
an audit report or performing other audit, review or attest services for
us.  The audit committee pre-approves all permissible non-audit
services and all audit, review or attest engagements required under the
securities laws (including the fees and terms thereof) to be performed for us by
our independent auditors.


__________


43


ITEM
15.                      FINANCIAL
STATEMENTS
























































TAPIMMUNE
INC.


(Formerly
GeneMax Corp.)


(A
Development Stage Company)





CONSOLIDATED
FINANCIAL STATEMENTS








DECEMBER
31, 2007 AND 2006





















































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 CONSOLIDATED FINANCIAL STATEMENTS


44














REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








To the
Stockholders and Board of Directors of TapImmune Inc. (formerly Genemax
Corp.)




We have
audited the accompanying consolidated balance sheets of TapImmune Inc. (a
development stage company) as of December 31, 2007 and 2006, and the related
consolidated statements of operations, stockholders’ deficit and cash flows for
the years then ended and the period from July 27, 1999 (inception) through
December 31, 2007.  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 audit 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 TapImmune Inc. as of December 31, 2007 and
2006, and the results of its operations and its cash flows for the years then
ended and the period from July 27, 1999 (inception) through December 31, 2007 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 2
to the financial statements, the Company has not generated profits since its
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
2.  The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.





“DMCL”





DALE
MATHESON CARR-HILTON LABONTE LLP


CHARTERED
ACCOUNTANTS


Vancouver,
Canada


March 18,
2008























45


TAPIMMUNE
INC.


(Formerly
GeneMax Corp.)


(A
Development Stage Company)





CONSOLIDATED
BALANCE SHEETS





December
      31, 2007
            December
      31, 2006ASSETSCURRENT
      ASSETSCash
            $     167,539
            $       120,436Due from government
      agency
            59,634
            33,734Prepaid expenses and
      deposits
            35,313
            -262,486
            154,170FURNITURE AND EQUIPMENT,
      net (Note 3)
            16,621
            166$     279,107
            $       154,336LIABILITIES
      AND STOCKHOLDERS’ DEFICITCURRENT
      LIABILITIESAccounts payable and accrued
      liabilities
            $  1,103,263
            $       889,395Research agreement obligations
      (Note 4)
            199,766
            151,066Convertible notes payable (Note 5
      (i))
            66,633
            583,342Convertible note subscriptions
      received (Notes 5 (v))
            200,000
            1,086,000Notes payable (Note 5 (iv) and
      (vi))
            229,952
            -Due to related parties (Note
      6)
            154,265
            444,6131,953,879
            3,154,416COMMITMENTS AND
      CONTINGENCIES (Notes 1, 4, and 5)STOCKHOLDERS’
      DEFICITCapital stock  (Note
      7)Common stock, $0.001 par value,
      80,000,000 shares authorized23,502,681 shares issued and
      outstanding (2006 – 11,668,870)
            23,503
            11,669Additional paid-in
      capital
            16,910,218
            11,749,572Shares and warrants to be issued
      (Notes 5 (iv) and 7)
            67,400
            -Deficit accumulated during the
      development stage
            (18,616,167)
            (14,724,756)Accumulated other comprehensive
      loss
            (59,726)
            (36,565)(1,674,772)
            (3,000,080)$     279,107
            $       154,336








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


46


TAPIMMUNE
INC.


(Formerly
GeneMax Corp.)


(A
Development Stage Company)





CONSOLIDATED
STATEMENTS OF OPERATIONS





Year
      Ended December 31,
            Year
      Ended December 31,
            July
      27, 1999 (inception) to December 31,2007
            2006
            2007INTEREST
      INCOME
            $                   -
            $                   -
            $         30,530EXPENSESConsulting fees
            171,854
            155,407
            985,584Consulting fees – stock-based
      (Note 7)
            309,500
            -
            3,134,275Depreciation
            5,970
            6,371
            202,004Gain on settlement of
      debts
            -
            (30,461)
            (173,010)General and
      administrative
            132,587
            33,515
            2,207,617Interest and finance charges
      (Note 5)
            1,380,075
            446,598
            1,943,490Management fees (Note
      6)
            286,632
            182,819
            1,581,073Management fees – stock based
      (Note 7)
            654,722
            -
            654,722Professional fees (Note
      10)
            524,502
            240,016
            2,356,934Research and development (Note
      6)
            425,569
            270,122
            5,142,008Research and development –
      stock-based
            -
            -
            612,0003,891,411
            1,304,387
            18,646,697NET
      LOSS
            $   (3,891,411)
            $   (1,304,387)
            $
      (18,616,167)











BASIC
      AND DILUTED LOSS PER SHARE
            $            (0.19)
            $            (0.11)WEIGHTED
      AVERAGE COMMON SHARES OUTSTANDING – BASIC AND DILUTED
            20,815,273
            11,668,870








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


47


TAPIMMUNE
INC.


(Formerly
GeneMax Corp.)


(A
Development Stage Company)





CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ DEFICIT


FOR
THE PERIOD FROM JULY 27, 1999 (INCEPTION) TO DECEMBER 31, 2007





Common
      Stock
            Additional
            Obligation
              to
      Issue
            Deficit
              Accumulated
              During
      the
            Accumulated
              OtherNumber
      of
              Shares
            Amount
            Paid
      in
              Capital
            Shares
      and
              Warrants
            Development
              Stage
            Comprehensive
              Loss
            TotalIssued
      on incorporation - July 27, 1999
            1
            $               -
            $                 -
            $                 -
            $                    -
            $                      -
            $                  -Issued
      to founders for:
              -
      cash
            740,000
            740
            1,110
            -
            -
            -
            1,850-
      consulting services
            860,000
            860
            1,290
            -
            -
            -
            2,150Common
      stock subscriptions
            -
            -
            -
            177,100
            -
            -
            177,100Net
      loss
            -
            -
            -
            -
            (80,733)
            -
            (80,733)Balance,
      December 31, 1999
            1,600,001
            1,600
            2,400
            177,100
            (80,733)
            -
            100,367Issued
      with UBC agreement:-
      for consulting services
            1,440,000
            1,440
            2,160
            -
            -
            -
            3,600-
      for license fees
            200,000
            200
            300
            -
            -
            -
            500Issued
      for cash:-
      at $1.50 per share, net of finders’ fees of $95,570
            563,531
            564
            749,166
            (177,100)
            -
            -
            572,630-
      at $1.50 per share
            341,600
            342
            512,058
            -
            -
            -
            512,400Issued
      for finders’ fees
            49,857
            50
            (50)
            -
            -
            -
            -Net
      loss
            -
            -
            -
            -
            (935,332)
            -
            (935,332)Currency
      translation adjustment
            -
            -
            -
            -
            -
            (1,937)
            (1,937)Balance,
      December 31, 2000
            4,194,989
            4,195
            1,266,034
            -
            (1,016,065)
            (1,937)
            252,228Issued
      for cash:-
      at $1.88 per share
            44,133
            44
            82,706
            -
            -
            -
            82,750-
      at $2.50 per share
            106,000
            106
            264,894
            -
            -
            -
            265,000Net
      loss
            -
            -
            -
            -
            (671,986)
            -
            (671,986)Currency
      translation adjustment
            -
            -
            -
            -
            -
            (2,041)
            (2,041)Balance,
      December 31, 2001
            4,345,122
            4,345
            1,613,635
            -
            (1,688,051)
            (3,978)
            (74,049)Issued
      for cash:-
      at $2.50 per share, net of finders’ fees of $17,000
            75,000
            75
            170,425
            -
            -
            -
            170,500Issued
      on settlement of debt
            72,664
            73
            136,172
            -
            -
            -
            136,245GPI
      balance, July 15, 2002
            4,492,786
            4,493
            1,920,232
            -
            (1,688,051)
            (3,978)
            232,696








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


48


TAPIMMUNE
INC.


(Formerly
GeneMax Corp.)


(A
Development Stage Company)





CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ DEFICIT


FOR
THE PERIOD FROM JULY 27, 1999 (INCEPTION) TO DECEMBER 31, 2007





Common
      Stock
            Additional
            Obligation
              to
      Issue
            Deficit
              Accumulated
              During
      the
            Accumulated
              OtherNumber
      of
              shares
            Amount
            Paid
      In
              Capital
            Shares
      and
              Warrants
            Development
              Stage
            Comprehensive
              Loss
            TotalGMC
      balance, July 15, 2002
            6,128,048
            6,128
            7,180,164
            (85,000)
            (6,607,580)
            -
            493,712Reverse
      acquisition recapitalization adjustment
            (4,492,786)
            (4,493)
            (6,603,087)
            -
            6,607,580
            -
            -Balance
      post reverse acquisition
            6,128,048
            6,128
            2,497,309
            (85,000)
            (1,688,051)
            (3,978)
            726,408GMC
      subscription proceeds received
            -
            -
            -
            285,000
            -
            -
            285,000Issued
      for cash:-
      at $6.25 per share
            170,160
            170
            1,063,330
            -
            -
            -
            1,063,500Exercise
      of stock options
            40,800
            41
            50,959
            -
            -
            -
            51,000Stock-based
      compensation
            -
            -
            630,275
            -
            -
            -
            630,275Net
      loss
            -
            -
            -
            -
            (2,284,709)
            -
            (2,284,709)Currency
      translation adjustment
            -
            -
            -
            -
            -
            (5,645)
            (5,645)Balance,
      December 31, 2002
            6,339,008
            6,339
            4,241,873
            200,000
            (3,972,760)
            (9,623)
            465,829Exercise
      of stock options
            927,452
            927
            1,420,888
            -
            -
            -
            1,421,815Issued
      for cash:-
      at $12.50 per share
            17,200
            17
            214,983
            (185,000)
            -
            -
            30,000-
      at $2.50 per share, net of finders’ fees
            222,140
            222
            521,593
            -
            -
            -
            521,815Issued
      as finders’ fees
            13,414
            13
            (13)
            -
            -
            -
            -Issued
      for license agreement
            4,000
            4
            9,996
            -
            -
            -
            10,000Subscriptions
      repaid
            -
            -
            5,000
            (15,000)
            -
            -
            (10,000)Stock-based
      compensation
            -
            -
            2,733,000
            -
            -
            -
            2,733,000Net
      loss
            -
            -
            -
            -
            (5,778,905)
            -
            (5,778,905)Currency
      translation adjustment
            -
            -
            -
            -
            -
            (37,299)
            (37,299)Balance,
      December 31, 2003
            7,523,214
            7,523
            9,147,319
            -
            (9,751,665)
            (46,922)
            (643,745)Issued
      for cash:-
      at $1.75 per share, net of finders’ fees of $50,000
            342,857
            343
            549,657
            -
            -
            -
            550,000Issued
      as finders’ fees
            28,571
            29
            (29)
            -
            -
            -
            -Fair
      value of warrants issued in connection
              with
      convertible notes
            -
            -
            65,000
            -
            -
            -
            65,000








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


49


TAPIMMUNE
INC.


(Formerly
GeneMax Corp.)


(A
Development Stage Company)





CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ DEFICIT


FOR
THE PERIOD FROM JULY 27, 1999 (INCEPTION) TO DECEMBER 31, 2007





Common
      Stock
            Additional
            Obligation
              to
      Issue
            Deficit
              Accumulated
              During
      the
            Accumulated
              OtherNumber
      of
              shares
            Amount
            Paid
      In
              Capital
            Shares
      and
              Warrants
            Development
              Stage
            Comprehensive
              Loss
            TotalExercise
      of stock options
            142,908
            143
            204,942
            -
            -
            -
            205,085Settlement
      of debt
            4,000
            4
            9,996
            -
            -
            -
            10,000Stock-based
      compensation
            -
            -
            73,500
            -
            -
            -
            73,500Net
      loss
            -
            -
            -
            -
            (2,683,105)
            -
            (2,683,105)Currency
      translation adjustment
            -
            -
            -
            -
            -
            (16,865)
            (16,865)Balance,
      December 31, 2004
            8,041,550
            8,042
            10,050,385
            -
            (12,434,770)
            (63,787)
            (2,440,130)Warrant
      component of convertible note
            -
            -
            46,250
            -
            -
            -
            46,250Issued
      for cash:-
      at $0.38 per share, net of finders’ fees
              of
      $97,620 and legal fees of $100,561
            3,627,320
            3,627
            1,158,437
            -
            -
            -
            1,162,064Net
      loss
            -
            -
            -
            -
            (985,599)
            -
            (985,599)Currency
      translation adjustment
            -
            -
            -
            -
            -
            (2,333)
            (2,333)Balance,
      December 31, 2005
            11,668,870
            11,669
            11,255,072
            -
            (13,420,369)
            (66,120)
            (2,219,748)Fair
      value of beneficial feature on
              convertible
      notes (Note 5)
            -
            -
            205,579
            -
            -
            -
            205,579Fair
      value of warrants issued with
              convertible
      notes (Note 5)
            -
            -
            288,921
            -
            -
            -
            288,921Net
      loss
            -
            -
            -
            -
            (1,304,387)
            -
            (1,304,387)Currency
      translation adjustment
            -
            -
            -
            -
            -
            29,555
            29,555Balance,
      December 31, 2006
            11,668,870
            11,669
            11,749,572
            -
            (14,724,756)
            (36,565)
            (3,000,080)Issued
      for cash:-
      at $0.25 per share
            2,180,000
            2,180
            542,820
            -
            -
            -
            545,000Issued
      on the conversion of notes:-
      2006 convertible notes at $0.25 per share
            1,978,000
            1,978
            492,522
            -
            -
            -
            494,500-
      2007 convertible notes at $0.25 per share
            4,064,000
            4,064
            1,011,936
            -
            -
            -
            1,016,000Issued
      on the conversion of accounts payable
              and
      related party debt at $0.25 per share
            2,911,812
            2,912
            725,040
            -
            -
            -
            727,952








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


50


TAPIMMUNE
INC.


(Formerly
GeneMax Corp.)


(A
Development Stage Company)





CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ DEFICIT


FOR
THE PERIOD FROM JULY 27, 1999 (INCEPTION) TO DECEMBER 31, 2007





Common
      Stock
            Additional
            Obligation
              to
      Issue
            Deficit
              Accumulated
              During
      the
            Accumulated
              OtherNumber
      of
              shares
            Amount
            Paid
      In
              Capital
            Shares
      and
              Warrants
            Development
              Stage
            Comprehensive
              Loss
            TotalIssued
      for finance charges on the 2007
              convertible
      notes $0.25 per share
            600,000
            600
            149,400
            -
            -
            -
            150,000Issued
      pursuant to service agreements-
      at a fair value of $0.36 per share
            100,000
            100
            35,900
            -
            -
            -
            36,000Financing
      charges
            -
            -
            (167,500)
            -
            -
            -
            (167,500)Fair
      value of beneficial conversion feature on
              the
      2007 convertible notes
            -
            -
            358,906
            -
            -
            -
            358,906Fair
      value of warrants issued in connection
              with
      the 2007 convertible notes
            -
            -
            657,095
            -
            -
            -
            657,095Fair
      value of warrants issued in connection
              with
      the 2007 promissory notes
            -
            -
            374,104
            -
            -
            -
            374,104Fair
      value of warrants issued as finders’ fees
              for
      the 2007 promissory notes
            -
            -
            35,600
            -
            -
            -
            35,600Re-pricing
      and extension of warrants
            -
            -
            40,000
            -
            -
            -
            40,000Stock
      based compensation
            -
            -
            904,822
            -
            -
            -
            904,822Obligation
      to issue warrants at fair value pursuant
              to
      promissory note extension
            -
            -
            -
            44,000
            -
            -
            44,000Obligation
      to issue shares at fair value pursuant
              to
      service agreements
            -
            -
            -
            23,400
            -
            -
            23,400Net
      loss
            -
            -
            -
            -
            (3,891,411)
            -
            (3,891,411)Currency
      translation adjustment
            -
            -
            -
            -
            -
            (23,161)
            (23,161)Balance,
      December 31, 2007
            23,502,682
            23,503
            16,910,218
            67,400
            (18,616,167)
            (59,726)
            (1,674,772)








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


51


TAPIMMUNE
INC.


(Formerly
GeneMax Corp.)


(A
Development Stage Company)





CONSOLIDATED
STATEMENTS OF CASH FLOWS





Year
      Ended December 31
            Year
      Ended December 31
            July
      27, 1999 (inception) to December 312007
            2006
            2007CASH
      FLOWS FROM OPERATING ACTIVITIESNet loss
            $   (3,891,411)
            $   (1,304,387)
            $   (18,616,167)Adjustments to reconcile net
      loss to net cash used in
              operating
      activities:Convertible
      debenture costs
            -
            -
            51,817Depreciation
            5,971
            6,371
            202,005Gain on
      settlement of debts
            -
            (30,461)
            (173,010)Non-cash
      interest and finance fees
            1,334,214
            400,675
            1,810,289Non-cash
      consulting and license fees
            -
            -
            16,250Stock-based
      compensation
            964,222
            -
            4,400,997Changes in
      operating assets and liabilities:Prepaid
      expenses and receivables
            (61,213)
            (6,656)
            (88,947)Accounts
      payable and accrued liabilities
            373,868
            28,417
            1,525,172Research
      agreement obligations
            48,700
            (521,466)
            199,766NET
      CASH USED IN OPERATING ACTIVITIES
            (1,225,649)
            (1,427,507)
            (10,671,828)CASH
      FLOWS FROM INVESTING ACTIVITIESPurchases of furniture and
      equipment
            (22,426)
            -
            (218,626)Cash acquired on reverse
      acquisition
            -
            -
            423,373NET
      CASH PROVIDED BY (USED IN)
              INVESTING
      ACTIVITIES
            (22,426)
            -
            204,747CASH
      FLOWS FROM FINANCING ACTIVITIESProceeds from the issuance of
      common stock
            475,000
            1,086,000
            9,111,106Finance costs
            (17,500)
            -
            (248,981)Proceeds from convertible
      notes
            66,634
            134,500
            266,633Notes and loans
      payable
            516,600
            -
            652,845Advances
      from related parties
            277,605
            241,644
            912,743NET
      CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
            1,318,339
            1,462,144
            10,694,346EFFECT
      OF EXCHANGE RATE CHANGES
            (23,161)
            29,555
            (59,726)NET
      INCREASE IN CASH
            47,103
            64,192
            167,539CASH,
      BEGINNING
            120,436
            56,244
            -CASH,
      ENDING
            $       167,539
            $       120,436
            $       167,539





SUPPLEMENTAL
CASH FLOW INFORMATION AND NON-CASH INVESTING AND


FINANCING
ACTIVITIES(See Note 9)








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


52


TAPIMMUNE
INC.


(Formerly
GeneMax Corp.)


(A
Development Stage Company)





NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007


NOTE
1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION





On May 9,
2002, TapImmune Inc. (“TPIM” or the “Company”), a Nevada corporation entered
into a letter of intent to acquire 100% of the issued and outstanding common
shares of GeneMax Pharmaceuticals Inc. (a development stage company)
(“GPI”).  GPI is a private Delaware company incorporated July 27, 1999
which has a wholly-owned subsidiary, GeneMax Pharmaceuticals Canada Inc.
(“GPC”), a private British Columbia company incorporated May 12,
2000.  GPI is a development stage company which was formed for the
purpose of building a biotechnology business specializing in the discovery and
development of immunotherapeutics aimed at the treatment of cancer, and
therapies for infectious diseases, autoimmune disorders and transplant tissue
rejection.





On June
28, 2007, the Company approved a name change to TapImmune Inc. and completed a
reverse stock split by the issuance of one (1) new share for each two and
one-half (2.5) outstanding shares of the Company’s common
stock.  Unless specifically noted, all amounts have been retroactively
restated to recognize the reverse stock split (Note 7).





During
2000, GPI and the University of British Columbia (“UBC”) entered into a
worldwide license agreement providing GPI the exclusive license rights to
certain patented and unpatented technologies originally invented and developed
by UBC.  Also during 2000, GPI and UBC entered into a Collaborative
Research Agreement (“CRA”) appointing UBC to carry out further development of
the licensed technology and providing GPI the option to acquire the rights to
commercialize any additional technologies developed within the CRA in
consideration for certain funding commitments (refer to Note 4).  The
lead product resulting from these licenses is a immunotherapy vaccine, on which
the Company has been completing pre-clinical work in anticipation of clinical
trials.  Specifically the Company has moved the technology through
issuance of a U.S. patent, tested various viral vectors needed to deliver the
gene that forms the basis for the vaccine, licensed a preferred viral vector and
contracted out production of clinical grade vaccine (refer to Note
4).  The Company plans to continue development of the lead product
vaccine through clinical trials.  The other technologies licensed
include assays, which the Company plans to use for generation of a pipeline of
immune-modulation products.  The assay technology acquired has
received patent protection.





These
consolidated financial statements have been prepared on the basis of a going
concern which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business.  As at December 31,
2007, the Company has a working capital deficiency of $1,691,393, a capital
deficiency of $18,616,167 and has incurred significant losses since
inception.  Further losses are anticipated in the development stage
raising substantial doubt as to the Company’s ability to continue as a going
concern.  The ability of the Company to continue as a going concern is
dependent on raising additional capital to fund ongoing research and
development, maintenance and protection of patents, accommodation from certain
debt obligations and ultimately on generating future profitable operations.
Planned expenditures relating to future clinical trials of the Company’s
immunotherapy vaccine will require significant additional
funding.  Internally generated cash flow will not fund development and
commercialization of the Company’s products.  The Company is dependant
on future financings to fund ongoing research and development as well as working
capital requirements.  The Company’s future capital requirements will
depend on many factors including the rate and extent of scientific progress in
its research and development programs, the timing, cost and scope involved in
clinical trials, obtaining regulatory approvals, pursuing further patent
protections and the timing and costs of commercialization
activities.


53


Management
changes occurred in 2006 and management is addressing going concern remediation
through seeking  new sources of capital, restructuring and retiring
debt through conversion to equity and debt settlement arrangements with
creditors, cost reduction programs and seeking possible joint venture
participation.  Management’s plans are intended to return the company
to financial stability and improve continuing operations.  The Company
is continuing to raise capital through private placements, related party loans
and other sources to meet immediate working capital
requirements.  Management expects to be able to complete restructuring
plans and expand programs including entering clinical trials for its lead TAP
(Transporters of Antigen Processing) vaccine and infectious disease
adjuvant.  These measures, if successful, should contribute to
reducing the risk of going concern uncertainties for the Company over the next
twelve to twenty-four months.





There is
no certainty that the company will be able to raise sufficient funding to
satisfy current debt obligations or to continue development of products to
marketability.





NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Basis
of Presentation


These
consolidated financial statements have been presented in United States dollars
and have been prepared in accordance with accounting principles generally
accepted in the United States of America.





Principles
of Consolidation


These
financial statements include the accounts of the Company and its wholly-owned
subsidiaries GPI and GPC as described in Note 1.  All intercompany
balances and transactions are eliminated upon consolidation.





Use
of Estimates and Assumptions


Preparation
of the Company’s financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect certain reported amounts and
disclosures.  Accordingly, actual results could differ from those
estimates.  Significant areas requiring management’s estimates and
assumptions are determining the fair value of stock-based compensation, the fair
value of the components of the convertible notes payable, the useful lives of
furniture and equipment, allocation of costs to research and development and
accrued liabilities.





Furniture
and Equipment


Furniture
and equipment are stated at cost.  Depreciation is provided using the
straight-line method over the estimated useful lives of the assets: Computer
equipment – 24 months; Laboratory equipment – 36 months; and Office furniture
and equipment – 60 months.  Maintenance and repairs are expensed as
incurred.  Replacements and betterments are capitalized.





Deferred
Finance Fees


The
Company defers direct costs incurred in connection with the sale of common
shares which are offset against the proceeds of the financing upon
completion.  Costs incurred in connection with convertible loans
payable are deferred and amortized as a financing cost over the term of the
convertible loans.  Upon conversion of the loan, any unamortized
amount of deferred financing costs will be charged to stockholders’ equity as a
cost of financing.





Research
and Development Costs


The
Company has acquired exclusive development and marketing rights to certain
technologies through various license and research agreements as described in
Note 4.  The rights and licenses acquired are considered rights to
unproven technology which may not have alternate future uses and therefore, have
been expensed as incurred as research and development costs.  Also,
ongoing costs incurred in connection with the CRA, are considered costs incurred
in the development of unproven technology which may not have alternate
future.  Accordingly these costs, have been expensed as incurred as
research and development costs.


54


Financial
Instruments and Concentration of Credit Risk


In
accordance with the requirements of Statement of Financial Accounting Standards
(“SFAS”) No. 107, “Disclosures about Fair Value of Financial Instruments,” the
Company has determined the estimated fair value of financial instruments using
available market information and appropriate valuation
methodologies.  The fair value of financial instruments classified as
current assets or liabilities including cash, prepaid expenses, other
receivables, research agreement obligations, accounts payable, accrued
liabilities, and amounts due to related parties approximate carrying values due
to the short-term maturity of the instruments.





Unless
otherwise noted, it is management's opinion that the Company is not exposed to
significant interest or credit risks arising from these financial
instruments.





The
Company operates and incurs significant expenditures outside of the United
States and is exposed to foreign currency risk between the Canadian and U.S
dollars and Euros.





Foreign
Currency Translation


The
Company's primary operations are located in Canada and its functional currency
is the Canadian dollar.  The financial statements are presented in
United States dollars.  In accordance with SFAS No. 52, “Foreign
Currency Translation”, foreign denominated monetary assets and liabilities are
translated into their United States dollar equivalents using foreign exchange
rates which prevailed at the balance sheet date.  Non-monetary assets
and liabilities are translated at the transaction date.  Revenue and
expenses are translated at average rates of exchange during the
year.  Related translation adjustments are reported as a separate
component of stockholders’ equity, whereas gains or losses resulting from
foreign currency transactions are included in results of
operations.





Long-Lived
Assets


The
Company monitors the recoverability of long-lived assets, including furniture
and equipment, based on estimates using factors such as current market value,
future asset utilization, and future undiscounted cash flows expected to result
from investment or use of the related assets.  The Company’s policy is
to record any impairment loss in the period when it is determined that the
carrying amount of the asset may not be recoverable.  Any impairment
loss is calculated as the excess of the carrying value over estimated realizable
value.  Management has determined that no impairment has occurred
during the year ended December 31, 2007.





Income
Taxes


The
Company follows the liability method of accounting for income
taxes.  Under this method, deferred income tax assets and liabilities
are recognized for the estimated tax consequences attributable to differences
between the financial statement carrying values and their respective income tax
basis (temporary differences).  The effect on deferred income tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.





The
Company adopted the provisions of FIBS Interpretation No. 48, Accounting for
Uncertainty in Income Taxes (“FIN 48”), on January 1,
2007.  Previously, the Company had accounted for tax contingencies in
accordance with SFAS No. 5, Accounting for Contingencies.  As required
by Interpretation 48, which clarifies SFAS No. 109, Accounting for Income Taxes,
the Company recognizes the financial statement benefit of a tax position only
after determining that the relevant tax authority would more likely than not
sustain the position following an audit.  For tax positions meeting
this standard, the amount recognized in the financial statements is the largest
benefit that has a greater than 50 percent likelihood of being realized upon
ultimate settlement with the relevant tax authority.  At the adoption
date, the Company applied Interpretation 48 to all tax positions for which the
statute of limitations remained open.  The adoption of FIN 48 did not
have a material impact in the consolidated financial statements during the year
ended December 31, 2007 except for disclosures and for matters as described in
Note 11 (contingencies).





Loss
per Share


The
Company computes loss per share in accordance with SFAS No. 128, “Earnings per
Share””, which requires presentation of both basic and diluted earnings per
share on the face of the statement of operations.  Basic loss per
share is computed by dividing net loss available to common shareholders by the
weighted average number of outstanding common shares during the
period.  Diluted loss per share gives effect to all dilutive potential
common shares outstanding during the period including stock options and
warrants, using the treasury method.  Dilutive loss per share excludes
all potential common shares if their effect is anti-dilutive.


55


Stock-based
Compensation


In 2006,
the Company adopted SFAS No. 123 (revised 2004) (“SFAS No. 123R”), “Share-Based
Payment”, and elected to adopt the modified prospective transition
method.  The modified prospective transition method requires that
stock-based compensation expense be recorded for all new and unvested stock
options, restricted stock, restricted stock units, and employee stock purchase
plan shares that are ultimately expected to vest as the requisite service is
rendered beginning on January 1, 2006 the first day of the Company’s fiscal year
2006.  Stock-based compensation expense for awards granted prior to
January 1, 2006 was based on the grant date fair-value as determined under the
pro-forma provisions of SFAS No. 123.





The
Company recorded $904,822 in stock-based compensation valued using the
Black-Scholes option pricing model, and an additional expense of $59,400 from
the fair value of stock issued pursuant to a consulting services agreement
during the year ended December 31, 2007 as opposed to $Nil during the year ended
December 31, 2006 (refer to Notes 5 and 7).





Recent
Accounting Pronouncements


In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities”.  This Statement permits
entities to choose to measure many financial assets and financial liabilities at
fair value.  Unrealized gains and losses on items for which the fair
value option has been elected are reported in earnings. SFAS No. 159 is
effective for fiscal years beginning after November 15, 2007.  The
Company is currently assessing the impact of SFAS No. 159 on its financial
position and results of operations.





In
December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in
consolidated Financial Statements - an Amendment of ARB No. 51." This statement
requires that noncontrolling or minority interests in subsidiaries be presented
in the consolidated statement of financial position within equity, but separate
from the parents' equity, and that the amount of the consolidated net income
attributable to the parent and to the noncontrolling interest be clearly
identified and presented on the face of the consolidated statement of
income.  SFAS No. 160 is effective for the fiscal years beginning on
or after December 15, 2008.  Currently the Company does not anticipate
that this statement will have an impact on its financial
statements.





In
December 2007, the FASB issued SFAS No. 141 (Revised) “Business Combinations”.
SFAS 141 (Revised) establishes principles and requirements for how the acquirer
of a business recognizes and measures in its financial statements the
identifiable assets acquired, the liabilities assumed, and any noncontrolling
interest in the acquiree.  The statement also provides guidance for
recognizing and measuring the goodwill acquired in the business combination and
determines what information to disclose to enable users of the financial
statements to evaluate the nature and financial effects of the business
combination.  The guidance will become effective for the fiscal year
beginning after December 15, 2008.  Management is in the process of
evaluating the impact, if any, SFAS 141 (Revised) will have on the Company’s
financial statements upon adoption.





On
December 21, 2007, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 110, (“SAB 110).  SAB 110 provides guidance to
issuers on the method allowed in developing estimates of expected term of “plain
vanilla” share options in accordance with SFAS No. 123(R), “Share-Based
Payment”.  The staff will continue to accept, under certain
circumstances, the use of a simplified method beyond December 31, 2007 which
amends question 6 of Section D.2 as included in SAB 107, “Valuation of
Share-Based Payment Arrangements for Public Companies”, which stated that the
simplified method could not be used beyond December 31, 2007.  SAB 110
is effective January 1, 2008.  The Company is currently evaluating the
potential impact, if any, that the adoption of SAB 110 will have on its
financial statements.


56


In March
2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and
Hedging Activities ("SFAS 161"). SFAS 161 is intended to improve financial
reporting about derivative instruments and hedging activities by requiring
enhanced disclosures to enable investors to better understand their effects on
an entity's financial position, financial performance, and cash
flows.  SFAS 161 achieves these improvements by requiring disclosure
of the fair values of derivative instruments and their gains and losses in a
tabular format.  It also provides more information about an entity's
liquidity by requiring disclosure of derivative features that are credit
risk-related.  Finally, it requires cross-referencing within footnotes
to enable financial statement users to locate important information about
derivative instruments.  SFAS 161 will be effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008, will be adopted by the Company beginning in the first quarter of
2009.  The Company does not expect there to be any significant impact
of adopting SFAS 161 on its financial position, cash flows and results of
operations.





NOTE
3 – FURNITURE AND EQUIPMENT





Furniture
and equipment consisted of the following:





December
      31,
              2007
            December
      31, 2006Laboratory
      equipment
            $        16,704
            $      183,803Office
      furniture and equipment
            3,161
            10,425Computer
      equipment
            4,533
            1,97224,398
            196,200Less:
      accumulated depreciation
            (7,777)
            (196,034)$         16,621
            $              166





NOTE
4 – RESEARCH AGREEMENTS





University
of British Columbia (“UBC”)


On
December 23, 2005, the Company signed a letter of intent with UBC whereby all
existing financial claims by UBC resulting from prior agreements and amendments
would be satisfied in consideration of UBC providing GPI with an option to
acquire outright, all of UBC’s right, title and interest in the technologies
licensed to GPI.  The letter of intent was followed by the completion
of a definitive agreement (the “Settlement”) on January 24, 2006.





Under the
terms of the Settlement the Company was obligated to pay UBC
CAN$556,533.  The Company also assumed responsibility for the
management, maintenance and protection of all patents and patent applications
filed in connection with the technology.





On
December 18, 2006, the Company and UBC negotiated an extension of the
Settlement.  Under the terms of the extension, the Company made the
following payments to UBC:





(a)
            CAN
      $72,177 on or before December 31,
2006;


(b)
            CAN
      $72,178 plus accrued interest of $3,362 on or before March 20, 2007;
      and


(c)
            CAN
      $72,178 plus accrued interest of $1,423 on or before May 31,
      2007.





As of May
31, 2007 the Company completed its obligation with UBC and the technology
assignment and transfer was completed in the current fiscal year.





Crucell
Holland B.V. (“Crucell”) – Research License and Option Agreement


Effective
August 7, 2003, Crucell and GPI entered into a five-year research license and
option agreement whereby Crucell granted to GPI a non-exclusive worldwide
license for the research use of its adenovirus technology.  The
Company was required to make certain payments over the five-year term totaling
Euro €450,000 (approximately $510,100).


57


Effective
June 6, 2005, Crucell gave the Company notice of default whereby the Company had
six months to remedy the unpaid option maintenance payments of $236,880
(€200,000) owing as at December 31, 2005.  On November 16, 2005,
Crucell provided notice of termination by default due the Company’s failure to
remedy the default within the required six month period.  In May 2006,
the Company negotiated a reinstatement of the original research and license
option agreement with Crucell and paid Crucell on April 20, 2006 €123,590
($151,521) in connection with the reinstatement.  Under the revised
terms of the agreement, the Company would pay Crucell twelve monthly payments of
€10,300 starting May 2006 (paid to October 31, 2006, as of December 31, 2007)
and a €75,000 annual license fee (outstanding at December 31, 2007, adjusted for
CPI) to maintain the reinstated agreement in good standing.  At
December 31, 2007, €136,800 ($199,766) has been included in research agreement
obligations for the Crucell agreement and is outstanding under the terms of the
agreement.





Subsequent
to the year end, in January, 2008 the Company paid €27,176 ($40,000) towards the
outstanding balance of €136,800.  As at the audit report date
Management is in the process of negotiating a revised  payment
schedule for the remaining balance.





SAFC
Pharma Inc (formerly Molecular Medicine BioServices, Inc.) (“SAFC Pharma”) –
Production Service Agreement


Effective
March 18, 2003, SAFC Pharma and GPC entered into a production service agreement
(“PSA”), as amended on August 29, 2003, whereby SAFC Pharma will produce the
clinical vector for delivery of the TAP gene used in the Company’s cancer
immunotherapy product.  The product will incorporate the Crucell
vector and the Company’s TAP1 gene.  Total obligations under the
contract are $232,000 payable to SAFC Pharma plus an estimated $110,000 to
$145,000 in third-party testing costs.  The Company was in breach of
its contractual obligations with SAFC Pharma in respect of payment of $15,000
for Phase I of the project.  The parties have agreed that advance
payments that had been made for subsequent phases could be allocated to the
Phase I deficiency so that all payments that were due under the PSA have now
been paid in full and the Company has a non-refundable credit of approximately
$78,000 available until the end of 2008 with SAFC Pharma to be applied towards
future vaccine production.  The non-refundable credit has not been
recognized as an asset in accordance with the accounting policies.





Operating
Lease


In March
2007, the Company entered into a laboratory lease that expires in February
2012.  The terms of the operating lease agreement require the Company
to make minimum monthly payments of approximately $2,490 (CAN
$2,520).





Combined
Research and Operating Obligations


The
Company has obligations under various agreements that expire between August 2008
and February 2012.  The aggregate minimum annual payments for the
years ending December 31 are as follows:





2008                                                      $ 29,880


2009       31,900


2010       32,304


2011       32,304


2012                                                          
5,284


$ 131,772





NOTE
5 –CONVERTIBLE DEBT AND PROMISSORY NOTES PAYABLE





i)  2004
Convertible Notes and Debenture Financing


In 2004,
the Company issued two unsecured convertible promissory notes in the principal
amount of $500,000, that included interest at 8% per annum and were due twelve
months from the date of issue.





In 2006,
the Company repaid $300,000 towards the convertible notes, in addition to all
interest accrued to the date of the final payment on October 31,
2006.


58


During
the year ended December 31, 2007 the Company repaid $133,367 towards the
convertible note principal.  On July 3, 2007 the Company entered into
a letter agreement extending the term of the warrants originally issued with the
outstanding convertible note for a period of two years or 18 months after
effective registration of the warrants (not completed to date), and reduced the
conversion price from $1.25 to $0.25.  The incremental increase in the
fair value of the warrants resulting from the repricing was determined by
management to be $40,000 and was recorded as interest and finance
charges.  The fair value was estimated using the Black-Scholes option
pricing model with an expected life of 2 years, a risk free interest rate of
5.28%, a dividend yield of 0%, and an expected volatility of 86%.





At
December 31, 2007 the principal amount of  $66,633 was outstanding for
the convertible notes, and interest expense of $10,366 (2006 - $2,674) has been
accrued.





ii)  2006
Convertible Note and Debenture Financing


On March
23, 2006, the Company completed a convertible debenture financing of $494,500
issuing convertible promissory notes that bear interest at 8% per annum in the
first year and 12% per annum in the second year.  If not converted,
the notes would be due one year from the date of loan advance.  The
unpaid amount of principal and accrued interest can be converted at any time at
the holder’s option into 1,978,000 convertible units at a price of $0.25 per
convertible unit.  Each unit would comprise one common share of the
Company and one non-transferable and detached share purchase warrant, issuable
and exercisable without conversion.





The
warrants forming part of the convertible units are detachable from any
conversion and are non-transferable.  Each such warrant entitles the
holder to purchase one additional common share of the Company for a period of
five years from the date of the issue at an exercise price of $0.25 per share
during the first two years, $0.50 per share during the third year, $0.75 per
share during the fourth year; and $1.00 per share during the fifth
year.





The
Company retained the right to redeem the convertible promissory notes at any
time upon giving certain notice to the holder(s), and subject to paying a 20%
premium in cash or shares (based on the previous 30 day average trading price of
the Company’s shares).





In
accordance with EITF 98-5, “Accounting for Convertible Securities with
Beneficial Conversion Features or Contingently Adjustable Conversion Ratios”,
the Company determined and recognized the fair value of the embedded beneficial
conversion feature of $205,579 as additional paid-in capital as the convertible
notes were issued with an intrinsic value conversion feature.





In
accordance with EITF 00-27, “Application of Issue No. 98-5 to Certain
Convertible Instruments”, the Company has charged the beneficial conversion
feature to operations.  In addition, the Company allocated the
proceeds of issuance between the convertible debt and the detachable warrants
based on their relative fair values.  Accordingly, the Company
recognized the relative fair value of the warrants of $288,921 as a component of
stockholders’ deficit.  The Company recorded further interest expense
over the term of the secured convertible notes of $64,908 resulting from the
difference between the fair value and carrying value at the date of
issuance.  The carrying value of the convertible notes was accreted to
the face value of $494,500 at conversion in 2007.  During the year
ended December 31, 2007 all of the notes were converted at $0.25 per share
resulting in the issue of 1,978,000 shares of the Company’s common
stock.  Additionally, interest expense of $64,908 has been accreted
increasing the carrying value of the convertible debentures to $494,500
immediately prior to the conversion, and accrued interest of $35,333 was
forefeited on conversion.


59


iii)  2007
Convertible Note and Debenture Financing


On
February 12, 2007, the Company completed a convertible debenture financing of
$1,016,000 for which the Company issued convertible promissory notes that bear
interest at 8% per annum in the first year and 12% per annum in the second
year.  If not converted, the notes would be due one year from the date
of loan advance.  The unpaid amount of principal and accrued interest
may be converted at any time at the holder’s option into shares of the Company’s
common stock at a price of $0.25 per convertible unit.  Each
convertible unit, upon conversion, is comprised of one common share of the
Company and, without conversion, one non-transferable and detached share
purchase warrant of the Company, issuable and exercisable without
conversion.  The warrants forming part of the convertible units are
detachable from any conversion and non-transferable, and each such warrant
entitles the holder to purchase one additional common share of the Company for a
period of five years from the date of the issuance at an exercise price of $0.25
per share during the first two years, $0.50 per share during the third year,
$0.75 per share during the fourth year; and $1.00 per share during the fifth
year.  The Company retained the right to redeem the convertible
promissory notes at any time upon giving certain notice to the holder(s), and
subject to paying a 20% premium in cash or shares (based on the previous 30 day
average trading price of the Company’s shares).  Subscriptions from
this financing totaling $1,016,000 were received prior to December 31,
2006.  During the year ended December 31, 2007 all of the notes were
converted at $0.25 per share resulting in the issue of 4,064,000 shares of the
Company’s common stock.  There was no interest accrued due to the
immediate conversion.





As part
of this financing, the Company issued 600,000 units, comprising one common share
of the Company and one non-transferable and detached share purchase warrant, as
a finder’s fee.  Each such warrant entitles the holder to purchase one
additional common shares of the Company for a period of five years from the date
of the issue at an exercise price of $0.25 per share during the first two years,
$0.50 per share during the third year, $0.75 per share during the fourth year,
and $1.00 per share during the fifth year. (refer to Note 7).





The
Company recognized the estimated fair value of the embedded beneficial
conversion feature of $358,906 as additional paid-in capital as the secured
convertible notes were issued with an intrinsic value.  In addition,
management estimated the fair value of the detachable warrants based the
Black-Scholes option pricing model with an expected life of 5 years, a risk free
interest rate of 5.26%, a dividend yield of 0%, and an expected volatility of
83%.  Accordingly, the Company recognized the relative fair value of
the warrants of $657,094 as a interest and finance charges.





iv)  2007
Promissory Note


On July
13, 2007 the Company issued an unsecured promissory note to a company related
through a family member of a director of TapImmune (Note 6) in the principal
amount of $100,000 which was revised on August 31, 2007 to
$125,000.  The promissory note matured on September 28, 2007 and bears
interest at 12% per annum.  As partial consideration for the
promissory note, on October 31, 2007 the Company issued to the Lender, as fully
paid and non-assessable, 125,000 non-transferable and registerable share
purchase warrants (each a “Warrant”), to acquire an equivalent number of common
shares of the Company (each a “Warrant Share”), at an exercise price of $0.30
per Warrant Share and for an exercise period of up to one year from the issuance
date.  The  fair value of the warrants was determined by
management at $18,104 recorded as interest and finance charges.  The
fair value was estimated using the Black-Scholes option pricing model with an
expected life of 1 year, a risk free interest rate of 5.27%, a dividend yield of
0%, and an expected volatility of 125%.





On
December 18, 2007 the Company signed an agreement to extend the terms of the
2007 Promissory Notes through February 28, 2008.  As consideration for
the extension, the Company agreed to issue to the Lender, as fully paid and
non-assessable, 400,000 non-transferable and registerable share purchase
warrants (each a “Warrant”), to acquire an equivalent number of common shares of
the Company (each a “Warrant Share”), at an exercise price of $0.25 per Warrant
Share and for an exercise period of up to three years from the issuance
date.  The  fair value of the warrants was determined by
Management at $44,000 recorded as a warrant issuance obligation and expensed as
interest and finance charges.  The fair value was estimated using the
Black-Scholes option pricing model with an expected life of 3 years, a risk free
interest rate of 4.21%, a dividend yield of 0%, and an expected volatility of
106%.





At
December 31, 2007 no repayment has been made to the principal amount or the
interest of $6,625 accrued on the promissory note.


60


v)  2007
Convertible Promissory Note


On August
31, 2007 the Company issued a convertible promissory note to a company related
through a family member of a director of TapImmune (Note 6) in the principal
amount of $200,000 that bears interest at 12% per annum, due on
demand.  Upon completion of the conversion terms, the unpaid amount of
principal and accrued interest may be converted at any time at the holder’s
option into shares of the Company’s common stock.  The conversion
price will be determined by the purchase price of the Company’s next stock
offering or convertible debt financing.  When the price is
established, management will determine whether any beneficial conversion feature
exists and may require adjustment to the stated value.





At
December 31, 2007 no repayment has been made to the principal amount or the
interest of $8,022 accrued on the convertible promissory note. Because the
conversion features are not determined, the principal amount is recorded as
subscription for convertible promissory note.





vi)  2007
Loan and Security Agreement


On
November 30, 2007 the Company entered into a Loan and Security Agreement whereby
the Company issued 12% secured promissory notes in the principal amount of
$445,000, with interest paid in advance resulting in net proceeds of $391,600,
with the discount being amortized to interest and finance charges over the term
of the notes.  The promissory notes mature on May 31,
2008.  Additionally, the Company issued to the Lenders, as fully paid
and non-assessable, 1,780,000 non-transferable and registerable share purchase
warrants (each a “Warrant”), to acquire an equivalent number of common shares of
the Company (each a “Warrant Share”), at an exercise price of $0.25 per Warrant
Share and for an exercise period of up to five years from the issuance
date.  The Company allocated the proceeds of issuance between the
secured promissory notes and the detachable warrants based on their relative
fair values as determined by management.  Accordingly, the Company
recognized the relative fair value of the warrants of $356,000 as a component of
stockholders’ deficit.  Interest paid in advance was amortized by
$9,046 to interest expense for the fiscal year ended December 31, 2007,
increasing the net carrying value of the secured promissory
notes.  Additionally, the fair value of the warrants was accreted to
interest expense by $60,306 for the fiscal year ended December 31, 2007,
increasing the carrying value of the secured promissory notes to
$104,952.  The fair value of the warrants was estimated using the
Black-Scholes option pricing model with an expected life of five years, a risk
free interest rate of 4.55%, a dividend yield of 0%, and an expected volatility
of 106%.





Under the
terms of the Loan and Security Agreement, the notes shall be repaid if the
Company receives funds from a sale or series of sales of any debt or Common
Stock or Common Stock Equivalents in the aggregate of $2,000,000 or
more.  Also under the terms of the Loan and Security Agreement, the
Company granted a first priority security interest in Company collateral,
including, but not limited to: (i) all goods, including machinery and inventory;
(ii) all contract rights and other general intangibles; (iii) all accounts,
together with all instruments, etc., (iv) all documents, letter of credit
rights, instruments and chattel paper; (v) all commercial tort claims; (vi) all
deposit accounts and all cash; (vii) all investment property; (viii) all
supporting obligations; (ix) all files, records, books of account, business
papers, and computer programs; and (x) the products and proceeds of all of the
foregoing.





Pursuant
to the Loan and Security agreement, the Company paid $54,195 including
reimbursement of legal fees as finders’ fees which has been expensed as interest
and finance charges.  Additionally, the Company issued as finders’
fees 178,000 warrants under the same terms as the Lenders.  The fair
value of the warrants was estimated to be $35,600  using the
Black-Scholes option pricing model with an expected life of five years, a risk
free interest rate of 4.55%, a dividend yield of 0%, and an expected volatility
of 106%, and has been recorded as interest and finance charges.





NOTE
6 –RELATED PARTY TRANSACTIONS





During
2004, the Company entered into a new consulting agreement with the Company’s
then Chief Scientific Officer (“CSO”) for a term ending December 31, 2007 at an
amount of CAN$10,000 per month.  The Company has also agreed to grant
to the CSO options to acquire up to 1,000,000 shares of the Company’s common
stock at a price to be determined, subject to further approvals.  On
June 8, 2007, a total of 2,200,000 stock options were granted at an exercise
price of $0.25 per share to the former CSO.  The term of these options
is ten years.


61


During
the year the total fees charged by the former CSO were $117,731 (CAN$120,000),
of which CAN$35,000 was paid in cash.  On June 8, 2007 $360,929 due to
the former CSO was settled with the issuance of 1,443,716 shares of the
Company’s common stock at a value of $0.25 per share (refer to Note
7).  At December 31, 2007, $39,672 (CAN$39,200) due to the former CSO
was outstanding.





During
the fiscal year ended December 31, 2007, the Company entered into transactions
with certain officers and directors of the Company as follows:





(a)
            incurred
      $286,632 (2006 - $182,819) in management fees and recorded an additional
      $654,722 (2006 - $Nil) in stock based compensation expense (refer to Note
      7);


(b)
            incurred
      $167,233 (2006 - $105,792) in research and development fees to related
      parties, of which $112,313 (2006 - $105,792) was to the former CSO and
      $54,920 (2006 - $Nil) was paid to a direct family member of a current
      officer;


(c)
            incurred
      $5,000 (2006 - $Nil) in consulting fees paid to a company controlled by a
      direct family member of a current
director;


(d)
            issued
      2,271,812 shares of the Company’s common stock to settle $567,953 of debt
      owing to related parties (refer to Note
7);


(e)
            on
      September 28, 2007 issued a $125,000 promissory note bearing interest at
      12% per annum and including 125,000 non-transferable and registerable
      share purchase warrants with an exercise price of $0.30 per share for an
      exercise period of up to one year from the issuance date to a company
      related through a direct family member of a current director (refer to
      Note 5);


(f)
            issued
      a $200,000 convertible promissory note that bears interest at 12% per
      annum to a company related through a direct family member of a current
      director (refer to Note 5), ; and


(g)
            issued
      400,000 non-transferable and registerable share purchase warrants with an
      exercise price of $0.25 per share as compensation to extend the terms of
      the promissory notes, to a company related through a direct family member
      of a current director (refer to Note
5).





All
related party transactions (other than stock based consideration) involving
provision of services were recorded at the exchange amount, which
is  the amount established and agreed to by the related
parties.





At
December 31, 2007, the Company had amounts owing to directors of $ $91,592 (2006
- $170,631), companies controlled by officers of $20,000 ( 2006 - nil), and
companies controlled by a direct relative of an officer of $3,000 (2006 - $nil).
These amounts were in the normal course of operations. Amounts due to related
parties are unsecured, non-interest bearing and have no specific terms of
repayment.





NOTE
7 – CAPITAL STOCK





The
authorized capital of the Company consists of 80,000,000 common shares with
$0.001 par value and 2,500,000 non-voting preferred shares with $0.001 par
value.  On March 27, 2007, a majority of shareholders voted to amend
the Company's Articles of Incorporation to increase the authorized capital from
50,000,000 shares of common stock to 200,000,000 shares of common
stock.  On June 28, 2007, the Company completed a reverse stock split
thereby issuing 1 new share for each 2.5 outstanding shares of the Company’s
common stock.  Accordingly, the Company’s authorized share capital was
decreased from 200,000,000 common shares to 80,000,000 common
shares.  As of December 31, 2007, no preferred shares have been
issued.





All prior
year share transactions included in the company’s stock transactions and
balances have been retroactively restated to give effect to the reverse stock
split.





2007
Capital Transactions


Immediately
following the completion of the 2007 convertible note and debenture financing on
February 12, 2007, the Company issued the following:





(a)
            on
      February 12, 2007 1,978,000 shares of common stock pursuant to the
      conversion of the $494,500 convertible debenture financing issued on March
      23, 2006 (refer to Note 5);


(b)
            on
      February 12, 2007 4,064,000 shares of common stock pursuant to the
      conversion of the $1,016,000 convertible debenture financing issued on
      February 12, 2007 (refer to Note
5);


62


(c)
            on
      February 12, 2007 1,900,000 shares of common stock pursuant to a private
      placement financing of 1,900,000 units at a price of $0.25 per unit for
      gross proceeds of $475,000.  Each unit is comprised of one
      common share and one non-transferable common share purchase
      warrant.  Each such warrant entitles the holder to purchase one
      additional common share of the Company for a period of five years from the
      date of the issue at an exercise price of $0.25 per share during the first
      two years, $0.50 per share during the third year, $0.75 per share during
      the fourth year; and $1.00 per share during the fifth
  year;


(d)
            on
      June 8, 2007 280,000 shares of common stock pursuant to a private
      placement financing of 280,000 units at a price of $0.25 per unit for
      gross proceeds of $70,000.  Each unit is comprised of one common
      share and one non-transferable common share purchase
      warrant.  Each such warrant entitles the holder to purchase one
      additional common share of the Company for a period of five years from the
      date of the issue at an exercise price of $0.25 per share during the first
      two years, $0.50 per share during the third year, $0.75 per share during
      the fourth year; and $1.00 per share during the fifth
  year;


(e)
            on
      June 8, 2007 2,911,812 shares of common stock at $0.25 per share pursuant
      to the conversion of $567,953 in related party debt (see Note 6) and
      $160,000 in accounts payable;


(f)
            on
      June 8, 2007 600,000 share units of the Company’s common stock were issued
      at a fair value of $0.25 per unit as a finders’ fee.  Each unit
      comprising one common share of the Company and one non-transferable and
      detached share purchase warrant.  Each such warrant entitles the
      holder to purchase one additional common shares of the Company for a
      period of five years from the date of the issue at an exercise price of
      $0.25 per share during the first two years, $0.50 per share during the
      third year, $0.75 per share during the fourth year, and $1.00 per share
      during the fifth year (refer to Note
5);


(g)
            on
      October 31, 2007 the Company issued 100,000 shares pursuant to the service
      agreement dated July 4, 2007 valued at $0.36 per share.  The
      $36,000 fair value was recorded as stock based consulting
      fees.  Under the terms of the consulting services agreement,
      subsequent to the one-year holding period the Company must provide a valid
      legal opinion with respect to any sale or proposed sale of the restricted
      stock within 10 calendar days of request.  The Company may be
      liable for any loss in value after the deadline if the request is not
      fulfilled within the stated time period;
and


(h)
            on
      December 19, 2007 the Company agreed to issue 120,000 shares of restricted
      common stock with an estimated fair value of $0.195 per share, pursuant to
      a consulting services agreement.  As of December 31, 2007 the
      $23,400 fair value of the shares to be issued was recorded as an
      obligation to issue shares and warrants, and expensed as stock based
      consulting fees.





2002
Stock Option Plan


On
September 30, 2002, the Board of Directors of the Company approved the adoption
of a stock option plan (the “Plan”) allowing for the granting of options to
directors, officers, employees and consultants of the Company and its
subsidiaries.  Options granted under the Plan shall be at prices and
for terms as determined by the Board of Directors with terms not to exceed ten
years.  The Plan further provides that the Board of Directors may
grant to any key personnel of the Company who is eligible to receive options,
one or more Incentive Stock Options at a price not less than fair market value
and for a period not to exceed ten years from the date of
grant.  Options and incentive stock options granted under the Plan may
have vesting requirements as determined by the Board of
Directors.  Effective December 16, 2003, the Board of Directors
approved an increase in the number of options available under the Plan to
4,000,000.  At December 31, 2007 the plan has been cancelled and no
stock options remain available or outstanding under the Plan.





2007
Stock Incentive Plan


On June
8, 2007, the Board of Directors of the Company approved the adoption of a stock
option plan (the “2007 Plan”) allowing for the granting of up to 6,400,000
options to directors, officers, employees and consultants of the Company and its
subsidiaries.  Options granted under the Plan shall be at prices and
for terms as determined by the Board of Directors.  Options granted
under the Plan may have vesting requirements as determined by the Board of
Directors.


63


On June
8, 2007, a total of 6,320,000 stock options were granted (1,640,000 to
consultants and 4,680,000 to officers and directors) at an exercise price of
$0.25 per share.  The term of these options is ten
years.  Of the 6,320,000 options granted, 3,100,000 vested upon grant,
2,420,000 vest in one year, 400,000 vest in two years and 400,000 vest in three
years.  The aggregate fair value of these options was estimated at
$1,179,600, or $0.19 per option, using the Black-Scholes option pricing model
with a risk free interest rate of 5.26%, a dividend yield of 0%, an expected
volatility of 83%, and expected life of 5 years for the options vesting
immediately, 4 years for the options vesting in one year, 3 years for the
options vesting in two years, and 2 years for the options vesting in three
years.  The earned portion of the value of these options was $904,822,
of which $250,010 was recorded as stock based consulting and $654,722 was
recorded management fees.  A balance of $274,778 of unvested option
value will be expensed over the remaining vesting period.





At
December 31, 2007, 80,000 stock options remain available under the 2007
Plan.





The
Company’s stock option activity during the year is as follows (adjusted for the
reverse stock split):





Number
      of Options
            Weighted
      Average Exercise Price
            Weighted
      Average Remaining LifeBalance,
      December 31, 2006
            1,240,000
            $            1.38
            4.47
      yearsGranted,
      June 8, 2007
            6,320,000
            0.25
            10
      yearsCancelled
            (1,240,000)
            1.38Balance,
      December 31, 2007
            6,320,000
            $             0.25
            9.44
      yearsExercisable
      at December 31, 2007
            3,100,000
            $             0.25
            9.44
      years





Share
Purchase Warrants


The
Company’s share purchase warrant activity during the period was as follows
(adjusted for the reverse stock split):





Number
      of Warrants
            Weighted
      Average Exercise Price
            Weighted
      Average Remaining LifeBalance,
      December 31, 2006
            3,954,359
            $            0.73
            2.16
      yearsIssued
            9,093,667
            0.25
            5.00
      yearsExpired
            (1,976,359)
            1.21Balance,
      December 31, 2007
            11,071,667
            $            0.25
            4.04
      years





64


NOTE 8 -
INCOME TAXES





There
were no significant temporary differences between the Company’s tax and
financial bases that result in deferred tax assets, except for the Company’s net
operating loss carryforwards amounting to approximately $12,100,000 at December
31, 2007 (2006 - $10,800,000) which may be available to reduce future year’s
taxable income.  These carryforwards will expire, if not utilized,
commencing in 2008.  Management has determined that the realization of
the benefits from these deferred tax assets is uncertain due to the Company’s
limited operating history and continuing losses.  Accordingly a full,
deferred tax asset valuation allowance has been provided and no deferred tax
asset benefit has been recorded.





The
actual income tax provisions differ from the expected amounts calculated by
applying the combined federal and state corporate income tax rates to the
Company’s loss before income taxes.  The components of these
differences are as follows:





Years
      Ended December 31,2007
            2006Loss
      before income taxes
            $    (3,891,411)
            $        (1,304,387)Corporate
      tax rate
            42.00%
            42.00%Expected
      tax expense (recovery)
            (1,634,393)
            (547,843)Permanent
      differences
            560,370
            168,284Non-qualified
      stock options
            404,973
            -Change
      in valuation allowance
            669,050
            379,559Future
      income tax provision (recovery)
            $                     -
            $                         -





The
Company's net deferred tax assets are as follows:





Years
      Ended December 31,2007
            2006Tax
      benefit relating to net operating loss carryforwards
            $       4,341,050
            $          3,672,000Valuation
      allowance
            (4,341,050)
            (3,672,000)$                     -
            $                         -





NOTE
      9 – SUPPLEMENTAL CASH FLOW INFORMATION AND NON-CASH INVESTING AND
      FINANCING ACTIVITIES





On June
8, 2007 the Company issued 2,911,812 shares of common stock at $0.25 per share
pursuant to the conversion of $567,953 in related party debt (see Note 6) and
$160,000 in accounts payable.





on June
8, 2007 600,000 share units of the Company’s common stock were issued at a fair
value of $0.25 per unit as a finders’ fee.  Each unit comprising one
common share of the Company and one non-transferable and detached share purchase
warrant.  Each such warrant entitles the holder to purchase one
additional common shares of the Company for a period of five years from the date
of the issue at an exercise price of $0.25 per share during the first two years,
$0.50 per share during the third year, $0.75 per share during the fourth year,
and $1.00 per share during the fifth year (see Note 5).


65


On
October 31, 2007 the Company issued 100,000 shares pursuant to the service
agreement dated July 4, 2007 valued at $0.36 per share.  The $36,000
fair value was recorded as stock based consulting fees.  Under the
terms of the consulting services agreement, subsequent to the one-year holding
period the Company must provide a valid legal opinion with respect to any sale
or proposed sale of the restricted stock within 10 calendar days of
request.  The Company may be liable for any loss in value after the
deadline if the request is not fulfilled within the stated time
period.





On
December 18, 2007 the Company signed an agreement to extend the terms of the
2007 Promissory Notes through February 28, 2008 (see Note 5).  As
consideration for the extension, the Company agreed to issue to the Lender, as
fully paid and non-assessable, 400,000 non-transferable and registerable share
purchase warrants (each a “Warrant”), to acquire an equivalent number of common
shares of the Company (each a “Warrant Share”), at an exercise price of $0.25
per Warrant Share and for an exercise period of up to three years from the
issuance date.  The  fair value of the warrants was
determined by Management at $44,000 recorded as a warrant issuance obligation
and expensed as interest and finance charges.





On
December 19, 2007 the Company agreed to issue 120,000 shares of restricted
common stock with an estimated fair value of $0.20 per share, pursuant to a
consulting services agreement.  As of December 31, 2007 the $23,400
fair value of the shares to be issued was recorded as an obligation to issue
shares and warrants, and expensed as stock based consulting fees.





Years
      Ended December 31,2007
            2006Interest
      paid
            $ 53,400
            $ 41,133Income
      taxes paid
            $ -
            $ -





NOTE
      10 – SUBSEQUENT EVENTS





In
January 2008, the Company retained ROI Group LLC as investor relations counsel
for an initial term of 12 months at a monthly fee of $3,500, until the Company
completes financing of equal to or higher than $750,000, upon which the fees
will increase to $8,500 per month.





During
the fiscal year, there was an inadvertent laspe in one of the Company’s patent
applications to cause it to become “unintentionally abandoned”.  This
was due to an administrative docketing error.  Significant
professional fees were incurred in the reapplication and filing of actions to
renew these patent claims to the Company.  At year end, the patent in
question was successfully and completely re-instated and subsequent to year end,
a notice of allowance for a number of claims therein has be received from the US
Patent Office.





NOTE
11 – CONTINGENCY





The
Company has not filed income tax returns for several years for the consolidated
group in the United States and Canada.  Both taxing authorities
prescribe penalties for failing to file certain tax returns and supplemental
disclosures.  Upon filing there could be penalties and interest
assessed.  Such penalties vary by jurisdiction and by assessing
practices and authorities.  As the Company has incurred losses since
inception there would be no known or anticipated exposure to penalties for
income tax liability.  However, certain jurisdictions may assess
penalties for failing to file returns and other disclosures and for failing to
file other supplementary information associated with foreign ownership, debt and
equity positions.  Inherent uncertainties arise over tax positions
taken, or expected to be taken, with respect to transfer pricing, inter-company
charges and allocations, financing charges, fees, related party transactions,
tax credits, tax based incentives and stock based transactions.





Management
has considered the likelihood and significance of possible penalties associated
with its current and intended filing positions and has determined, based on
their assessment, that such penalties, if any, would not be expected to be
material.


66


Disclosure
concerning certain carry-forward tax pools, temporary and permanent timing
differences in tax basis versus reported amounts may be impacted by assessing
practices and tax code regulations when income tax returns are filed up to
date.  As a 100% valuation allowance has been provided against
deferred tax assets reported in these financial statements, there would be no
significant net impact to the current and deferred income tax disclosures or
reconciliations reported.





As
management is currently not able to make a reliably measurable provision for
possible liability for penalties and interest, if any, at this time the company
may be liable for such amounts upon assessment.





__________


67







SIGNATURES




In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.







TAPIMMUNE
      INC.Per:
            /s/
      “Denis
      Corin”
              _____________________________________
              Denis
      Corin
              President,
      Chief Executive Officer and Principal Executive Officer
              Date:  April
      11, 2008.




In
accordance with the Securities Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.





Per:
            /s/
      “Patrick A.
      McGowan”
              _____________________________________
              Patrick
      A. McGowan
              Secretary,
      Treasurer, Chief Financial Officer, Principal Accounting Officer and a
      director
              Date:  April
      11, 2008.Per:
            /s/
      “Alan P.
      Lindsay”
              _____________________________________
              Alan P.
Lindsay
              Director
              Date:  April
      11, 2008.Per:
            /s/
      “Glynn
      Wilson”
              _____________________________________
              Glynn Wilson
              Director
              Date:  April
      11, 2008.




__________


68