UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549




FORM
10-K




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




For the Fiscal Year Ended December 31,
2008




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




For
      the transition period from ________________ to
      ________________.




Commission file number
000-27239




TAPIMMUNE
INC.


(Exact
name of registrant as specified in its charter)




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





Unit 2, 3590 West 41stAvenue, Vancouver,
              British Columbia, Canada
            V6N 3E6(Address
      of Principal Executive Offices)
            (Zip
      Code)




(604)
264-8274


(Registrant’s
telephone number, including area code)




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




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




Common Stock, Par Value
$0.001


(Title of
class)




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




Yes
[  ]  No [X]




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




Yes
[  ]  No [X]




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




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




Indicate
by checkmark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company.  See
the definitions of “large accelerated filer”, “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.




Large
accelerated filer r                                                                                                           Accelerated
filer r




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




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




Yes
[  ]  No [X]




The
aggregate market value of the voting and non-voting common equity held by
non-affiliates of the registrant computed by reference to the price at which the
registrant’s common equity was last sold, as of June 30, 2008 (the last day of
the registrant’s most recently completed second fiscal quarter) was
approximately $6,177,000.




The
registrant had 24,149,827 shares of common stock outstanding as of May 7,
2009.















FORWARD LOOKING
STATEMENTS




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




·
            our
      capital needs;




·
            business
      plans; and




·
            expectations.




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




·
            our
      need for additional financing;




·
            our
      limited operating history;




·
            our
      history of operating losses;




·
            our
      lack of insurance coverage;




·
            the
      competitive environment in which we
operate;




·
            changes
      in governmental regulation and administrative
  practices;




·
            our
      dependence on key personnel;




·
            conflicts
      of interest of our directors and
officers;




·
            our
      ability to fully implement our business
plan;




·
            our
      ability to effectively manage our growth;
and




·
            other
      regulatory, legislative and judicial
  developments.




We advise
the reader that these cautionary remarks expressly qualify in their entirety all
forward-looking statements attributable to us or persons acting on our
behalf.  Important factors that you should also consider, include, but
are not limited to, the factors discussed under “Risk Factors” in this annual
report.




The
forward-looking statements in this annual report are made as of the date of this
annual report and we do not intend or undertake to update any of the
forward-looking statements to conform these statements to actual results, except
as required by applicable law, including the securities laws of the United
States.




AVAILABLE
INFORMATION




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




REFERENCES




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










1







TABLE OF
CONTENTS





ITEM 1.
              BUSINESS
              3ITEM 1A.
              RISK FACTORS
              10ITEM 1B.
              UNRESOLVED STAFF COMMENTS
              12ITEM 2.
              PROPERTIES
              12ITEM 3.
              LEGAL PROCEEDINGS
              12ITEM 4.
              SUBMISSION OF MATTERS TO A VOTE OF SECURITY
      HOLDERS
              12ITEM 5.
              MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED
      STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
      SECURITIES
              13ITEM 6.
              SELECTED FINANCIAL DATA
              14ITEM 7.
              MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
      CONDITION AND RESULTS OF OPERATIONS
              15ITEM 7A.
              QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
      MARKET RISK
              18ITEM 8.
              FINANCIAL STATEMENTS
              19ITEM 9.
              CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
      ACCOUNTING AND FINANCIAL DISCLOSURE
              46ITEM 9A.
              CONTROLS AND PROCEDURES
              46ITEM 9B.
              OTHER INFORMATION
              47ITEM 10.
              DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
      GOVERNANCE
              47ITEM 11.
              EXECUTIVE COMPENSATION
              50ITEM 12.
              SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
      AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
              52ITEM 13.
              CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND
      DIRECTOR INDEPENDENCE
              54ITEM 14.
              PRINCIPAL ACCOUNTING FEES AND
      SERVICES
              55ITEM 15.
              EXHIBITS
              56





2





PART I




ITEM
1.                      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 more than 600,000 deaths from cancer annually, second only to
cardiovascular deaths and the ACS estimates over 1.4 million new diagnosis will
be made this year




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.




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


With the
required funding in place, we will pursue product development in
oncology.  With additional funding and the possible collaboration of
other vaccine companies we will also pursue product development in our adjuvant
for 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
and 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.




3




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
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 an opportunity to take advantage
of our potential partners’ capabilities while reducing our overhead
costs.  Our relationship with the University of British Columbia
(“UBC”) allowed us to conduct contract research and development by employing
highly skilled scientists at UBC.  The research and development team
performed the basic research on the biological function of TAP and related
licensed technology as well as preclinical animal studies in cancer and
infectious diseases.  Moving into the development phase, we will
initiate our contract with SAFC Pharma (Sigma Aldrich), 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.




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 small animal 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
(now dormant until funding is restored) 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 SAFC 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 second half of 2010 or early 2011 depending how
quickly funding is in place.  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 may conduct the Phase I human clinical trials at the
British Columbia Cancer Agency in Vancouver, British Columbia, or other
locations to be evaluated.  These trials will be conducted in respect
of certain carcinomas.  We have presented information on the 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.






4




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.









Infectious
Disease Application for “TAP” Adjuvant




Beyond
the TAP cancer vaccine, TapImmune plans to develop or license out our technology
for the creation of enhanced viral vaccines, such as for smallpox and others,
based on our findings that TAP can augment immune responses.  We have
presented data showing that increasing TAP expression in TAP-competent antigen
presenting cells (APCs) and/or virus infected cells increases the antigenic
peptide associated with MHC class I expression on the cell surface, and leads to
increased specific T cell-mediated immune responses. We believe this technology
can add great value to the creation of new vaccines and enhance those that
already exist.









Future
Products and Technology




Peptide
Transfer Assay


Depending
on resources and funding, we may also 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 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 (CDN) and
issued 500,000 GeneMax Pharmaceutical shares to the University of British
Columbia; which were subsequently exchanged for 200,000 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
4,000 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.




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).




6




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 previously 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 2007 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
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 were 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 February7, 2004
and a further $60,103 (€ 50,000) was due and payable on August 7, 2004
leaving $120,967 owing as of December31, 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 agreed to pay Crucell 12 monthly payments of €10,300 starting May
2006 (paid to October 31, 2006 as of December 31, 2008) and a €75,000 annual
license fee (not paid as of December 31, 2008) in order to keep the reinstated
agreement in good standing.  In January, 2008 we paid $40,000 to the
outstanding balance of €184,484, and are currently working with Crucell to
maintain our license and relationship as well as reaching a new payment schedule
for the outstanding fees. At the date of our annual report, Crucell has
indicated that there is an outstanding balance of €172,801 owing to them. Over
the last few months we have had discussions resulting in an informal commitment
to hold our license in a dormant state until we are able to meet some of the
payment requirements and are funded to continue with our development
program.




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 PSA 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.




7




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.  We have developed a
second option and are preparing to initiate viral construction on the best and
most suitable cell line.  Despite the technical difficulties we
anticipate production of a clinical grade TAP based vaccine to be produced
utilizing the adeno vector from Crucell or an in-house vector supplied by SAFC
to allow us to meet our milestones for commencing toxicology analysis by the end
of 2010.




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 expired on November 5,
2008.  The Company will renegotiate with PHS once funding is in
place.




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 with UBC, we acquired the  portfolio of
intellectual property as follows:




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


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




Method
of Enhancing an Immune Response


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




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


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




TAP
Vaccines and other filings


Patent
applications have been filed by TapImmune 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 issued.  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.




8




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 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., Dendreon Corp., Genzyme Molecular
Oncology, 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 to secure final
approval of the NDA and authorization of commercial marketing of the drug for
certain indications.  The FDA may also refuse to approve the NDA or
issue a not approval letter, outlining the deficiencies in the submission and
often requiring either additional testing or information or withdrawal of the
submission.




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




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




Canada


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




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




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




Other
Jurisdictions


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




Product
Liability and Insurance


Once we
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


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.  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, 2008, we did not have any employees.






9




ITEM
1A.                      RISK
FACTORS




An
investment in our common stock involves a number of very significant
risks.  You should carefully consider the following risks and
uncertainties in addition to other information in this annual report in
evaluating our company and its business before purchasing shares of our common
stock.  Our business, operating results and financial condition could
be seriously harmed due to any of the following risks.  The risks
described below may not be all of the risks facing our
company.  Additional risks not presently known to us or that we
currently consider immaterial may also impair our business
operations.  You could lose all or part of your investment due to any
of these risks.




Risks
Related to Our Company




We
have a history of operating losses.


We
continue to incur losses and 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 $20,812,106, 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 six
months.  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, 2008 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, successful
renegotiations and continued support from our creditors and ultimately on
generating future profitable operations.  There can be no assurance
that we will be able to raise sufficient additional capital or eventually
achieve 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.




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.




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 2010 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
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.




10




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.




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,  and Patrick McGowan, our Chief Financial
Officer.  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 or Mr. McGowan 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.




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 3.6% of the outstanding shares of common
stock.  If they exercise all of the warrants and vested options that
they currently hold, they would own 3,372,896 shares of our common stock or
13.6% 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 11,917,667 warrants outstanding to purchase our common stock and a
commitment to issue 5,527,000 additional warrants.  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.






11




ITEM
1B.                      UNRESOLVED
STAFF COMMENTS




None.




ITEM
2.                      PROPERTIES




We do not
own any real estate or other properties.  Our registered office is
located at 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




We
delivered proxy statements on schedule 14A as filed with the SEC on December 31,
2008 for a special meeting of shareholders.  As described in our
current report filed with the SEC on February 6, 2009, our shareholders approved
at a special meeting of shareholders held on January 22, 2009, an amendment to
our articles of incorporation to increase our authorized shares of common stock
from 80,000,000 to 500,000,000.





12







PART II




ITEM
      5.
            MARKET
      FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES




Market
Information


Our
common stock is traded on the Over The Counter Bulletin Board (“OTCBB”) under
the symbol “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.




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 2008December
      31, 2008
            $0.09
            $0.02September
      30, 2008
            $0.31
            $0.04June
      30, 2008
            $0.43
            $0.10March
      31, 2008
            $0.36
            $0.09Fiscal
      Year 2007December
      31, 2007
            $0.17
            $0.14September
      30, 2007
            $0.45
            $0.30June
      30, 2007
            $0.39
            $0.39March
      31, 2007
            $0.35
            $0.28




The last
reported sales price for our shares on the OTCBB as of May 8, 2009 was $0.04 per
share.  As of May 7, 2009, we had approximately 107 shareholders of
record.




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.  On January 22, 2009, in a special meeting
of shareholders our authorized share capital was increased from 80,000,000 to
500,000,000.




Dividend
Policy


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




Securities
Authorized For Issuance Under Compensation Plans


The
following table sets forth information as of December 31, 2008:




Equity
Compensation Plan Information


Number
      of securities to be issued upon exercise of outstanding options, warrants
      and rights
              (a)
            Weighted
      average exercise price of outstanding options, warrants and
      rights
              (b)
            Number
      of securities remaining available for future issuance under equity
      compensation plans (excluding securities reflected in column
      (a))
              (c)(a)Equity
      compensation plans approved by security holders
            Nil
            Nil
            Nil(b)Equity
      compensation plans not approved by security holders
            6,320,000
            $0.25
            80,0006,320,000
            $0.25
            80,000






13




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 6,400,000 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.




The
foregoing summary of the 2007 Stock Incentive Plan is not complete and is
qualified in its entirety by reference to the 2007 Stock Incentive Plan, a copy
of which has been filed with the SEC.




As of the
date of this annual report, there are an aggregate of 6,320,000 stock options
granted and outstanding.




Warrants


As of the
date of this annual report, there are an aggregate of 11,917,667 common stock
purchase warrants issued and outstanding and 5,527,000 common stock purchase
warrants committed to be issued.




Recent
Sales of Unregistered Securities


Previously
disclosed in filings with the SEC.




ITEM
6.                      SELECTED
FINANCIAL DATA




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






14




ITEM
      7.
            MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS




The
following discussion of our financial condition, changes in financial condition,
plan of operations and results of operations should be read in conjunction with
(i) our audited consolidated financial statements as at December 31, 2008 and
for the period from inception (July 27, 1999) to December 31, 2008 and (ii) the
section entitled “Business”, included in this annual report.  The
discussion contains forward-looking statements that involve risks, uncertainties
and assumptions.  Our actual results may differ materially from those
anticipated in these forward-looking statements as a result of many factors,
including, but not limited to, those set forth under “Risk Factors” and
elsewhere in this annual report.




Plan
of Operations




Management
believes that an estimated $5,000,000 in conjunction with a significant debt
reduction through creditor negotiation and /or equity for debt settlement 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.




2008 was
a very challenging year in the capital markets. We were not able to secure
significant funding after the smaller bridge funding we completed in December
2007. We were able to continue important patent work resulting in the granting
of a significant patent mid way through 2008. We were also able to complete
initial testing of the research vaccine stocks we had. With that data in hand,
we were able to set out a clear pre-clinical vaccine construction and
manufacturing plan and timeline with the right FDA accredited partners.
Unfortunately, as the markets continued to deteriorate we were not able to
secure the funding required to enter into those contracts. As all of the
relationships are in place and contracts have been planned, once funding is
secured, this work could begin fairly quickly.




Over the
past several years and 2008 being no exception, the Company has obtained
financing from related and unrelated parties under challenging conditions. The
company has been successful to date in raising sufficient funding to sustain
operations by renegotiating or replacing debt instruments and by extending
terms and conditions when default has occurred. These forms of financing are
costly from a market risk perspective and from a legal and operation expense
perspective. As a consequence of debt restructuring there has been substantial
dilution and potential dilution to shareholders through stock based payments and
commitments required to continue or renew debt arrangements. As an example,
during 2008 some of promissory notes had expired (some well over a year beyond
their initial term) and a call on them would have caused the Company severe
distress and even bankruptcy, as consideration for the extension and continued
support additional warrants were issued at a discount to the lowest bid price at
the time. The note holders had all expected the short term loans to be repaid
and could have asked for collateral security. All the note holders indicated
that the outstanding debt was a significant burden on their own businesses
during a very challenging capital market and now carried significant risk. These
loans were crucial to the Company in order to keep it afloat and to make
payments that would ultimately have left company with no assets had they not
been entered into.




Management
has been working with a consulting firm over the past few months to determine a
workable solution for the Company going forward.  As the Company’s
growth has been limited by a significant debt burden, a consulting firm has been
engaged to negotiate with various creditors in an effort to restructure certain
debt, including the notes mentioned above, and payables thereby placing the
Company on a stronger foundation for a subsequent
fundraising.  Management is confident that a workable solution can be
achieved.




Fund
raising is required to initiate our preclinical manufacturing
contracts.  The short term requirement is roughly $1,000,000 with a
further $1.5M to $2M required for the next 12 months to get us to a point where
we can initiate a Phase 1 study (a single phase 1 study will cost approximately
$1M).  Outside of internal development and contracted manufacturing,
management has been actively seeking partnerships and joint venture
opportunities with suitable companies.




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 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.




15




Results
of Operations


The
following sets table sets out our consolidated losses for the periods
indicated:




Year
      Ended
              December
      31, 2008
            
            
            Year
      Ended
              December
      31, 2007
            
            
            For
      the Period
              from
      Inception
              (July
      27, 1999) to
              December
      31, 2008ExpensesConsulting
            
            $
            233,283
            
            
            $
            171,854
            
            
            $
            1,218,867Consulting,
      stock-based
            
            
            151,500
            
            
            
            309,500
            
            
            
            3,285,775Depreciation
            
            
            7,482
            
            
            
            5,970
            
            
            
            209,486Gain
      on Settlement of Debt
            
            
            -
            
            
            
            -
            
            
            
            (173,010
            )General
      and Administrative
            
            
            115,693
            
            
            
            132,587
            
            
            
            2,323,310Interest
      and Finance Charges
            
            
            778,179
            
            
            
            1,380,075
            
            
            
            2,721,669Management
      Fees
            
            
            353,162
            
            
            
            286,632
            
            
            
            1,934,235Management
      Fees, stock based
            
            
            172,668
            
            
            
            654,722
            
            
            
            827,390Professional
      Fees
            
            
            284,288
            
            
            
            524,502
            
            
            
            2,641,222Research
      and Development
            
            
            182,343
            
            
            
            425,569
            
            
            
            5,324,351Research
      and Development,
              stock-based
            
            
            -
            
            
            
            -
            
            
            
            612,0002,278,598
            
            
            
            3,891,411
            
            
            
            20,925,295Loss
      Before Other Items
            
            
            (2,278,598
            )
            
            
            (3,891,411
            )
            
            
            (20,925,295
            )Other
      ItemsForeign
      exchange gain
            
            
            82,659
            
            
            
            -
            
            
            
            82,659Interest
      Income
            
            
            -
            
            
            
            -
            
            
            
            30,530Net
      Loss
            
            $
            (2,195,939
            )
            
            $
            (3,891,411
            )
            
            $
            (20,812,106
            )









Year
Ended December 31, 2008 Compared to the Year Ended December 31,
2007


We are a
development stage company.  We recorded a net loss of $2,195,939
during the year ended December 31, 2008, compared to $3,891,411 for the year
ended December 31, 2007.






16




Operating
Expenses


Operating
expenses incurred during the fiscal year ended December 31, 2008 were $2,278,598
compared to $3,891,411 in the prior year.  Significant changes and
expenditures are outlined as follows:




·
            Consulting
      fees were $233,283 during the fiscal year ended December 31, 2008 compared
      to $171,854 during the prior fiscal year.  The increase was due
      primarily to new agreements in the current year for investor relations and
      marketing services.




·
            Stock-based
      consulting fees were $151,500 in the year ended December 31, 2008 compared
      to $309,500 in the prior year.  The current and prior year
      charges result from the fair valuation of shares issued to consultants and
      options granted to or earned by consultants during such
      periods.




·
            Depreciation
      was $7,482 in the year ended December 31, 2008 compared to $5,970 in the
      prior year, with the increase resulting from full depreciation in the
      current year on furniture and equipment purchased in the prior fiscal
      year.




·
            General
      and administrative expenses were $115,693 in the year ended December 31,
      2008 compared to $132,587 in the prior year, with the decrease resulting
      primarily from a reduction in operations in the current year due to
      resource restrictions.




·
            Interest
      and finance charges were $778,179 during the fiscal year ended December
      31, 2008 compared to $1,380,075 during the prior fiscal
      year.  The current year consisted of $113,634 in accrued
      interest on notes payable, $206,820 representing the fair value of
      warrants attached to debt issued during the year, a $340,048 non-monetary
      charge related to the fair value of a beneficial conversion feature and
      warrants on 2007 convertible debt, and $117,677 representing the fair
      value of warrants to be issued which relate to outstanding
      debt.  The prior year consisted of 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
      related 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 $353,162 in the year ended December 31, 2008 compared to
      $286,632 in the prior year, with the difference resulting primarily from a
      change in executive compensation during the second half of the prior year,
      and additional directors’ fees during the current
  year.




·
            Stock-based
      management fees were $172,668 in the year ended December 31, 2008 compared
      to $654,722 in the prior year.  The current and prior year
      charges result from the fair valuation of options granted to management
      that were earned during the period.




·
            Professional
      fees were $284,288 in the year ended December 31, 2008 compared to
      $524,502 in the prior year.  The decrease from the prior year
      results from a decrease in operations in the current year, and additional
      work relating to financing arrangements and fees relating to the review
      of, and reinstatement patent applications incurred in the prior
      year.




·
            Research
      and development costs during the fiscal year ended December 31, 2007 were
      $182,343 compared to $425,569 during the prior fiscal year.  The
      decrease results from research and consulting service agreements in effect
      during the prior fiscal year.




Our net
loss for the year ended December 31, 2008 was $2,195,939 or ($0.09) per share,
compared to a net loss of $3,891,411 or ($0.19) per share in the prior
period.  The weighted average number of shares outstanding was
23,900,839 for the year ended December 31, 2008 compared to 20,815,273 for the
prior year.






17




Liquidity
and Capital Resources


The
following table sets forth our cash and working capital as of December 31, 2008
and 2007:




December
      31, 2008
            
            
            December
      31, 2007Cash
      reserves
            
            $
            987
            
            
            $
            167,539Working
      capital (deficit)
            
            $
            (3,032,512
            )
            
            $
            (1,691,393
            )




Subject
to the availability of additional financing, we intend to spend approximately
$3,000,000 over the next twelve months in carrying out our plan of
operations.  At December 31, 2008, we had $987 of cash on hand and a
working capital deficit of $3,032,512.  As such, our working capital
at December 31, 2008 will not be sufficient to enable us to pay our general and
administrative expenses, and to pursue our plan of operations over the next
twelve months.  We anticipate that we will require additional funding
of approximately $3,000,000.  Our management is currently making
significant efforts to secure the needed financing, but we have not yet secured
any commitments with respect to such financing.  If we are not able to
obtain financing in the amounts required or on terms that are acceptable to us,
we may be forced to scale back, or abandon, our plan of operations.




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




Going
Concern


We have
no sources of revenue to provide incoming cash flows to sustain our future
operations.  As outlined above, our ability to pursue our planned
business activities is dependent upon our successful efforts to raise additional
equity financing.  These factors raise substantial doubt regarding our
ability to continue as a going concern.  Our consolidated financial
statements have been prepared on a going concern basis, which implies that we
will continue to realize our assets and discharge our liabilities in the normal
course of business.  As at December 31, 2008, we had accumulated
losses of $20,812,106 since inception.  Our financial statements do
not include any adjustments to the recoverability and classification of recorded
asset amounts and classification of liabilities that might be necessary should
we be unable to continue as a going concern.




Net
Cash Used in Operating Activities


Operating
activities in the year ended December 31, 2008 used cash of $714,425 compared to
$1,248,810 in the year ended December 31, 2007.  Operating activities
in the period from inception on July 27, 1999 to December 31, 2008 used cash of
$11,445,979.  Operating activities have primarily used cash as a
result of the operating and organizational activities such as consulting fees,
management fees, professional fees and research and development.




Net
Cash Used in Investing Activities


In the
year ended December 31, 2008 investing activities used cash of $Nil compared to
$22,426 in the year ended December 31, 2007.  In the period from
inception on July 27, 1999 to December 31, 2008 investing activities provided
cash of $204,747.




Net
Cash Provided by Financing Activities


As we
have had no revenues since inception, we have financed our operations primarily
through private placements of our stock.  Financing activities in the
year ended December 31, 2008 provided cash of $547,873 compared to $1,318,339 in
the year ended December 31, 2007.  In the period from inception on
July 27, 1999 to December 31, 2008 financing activities provided net cash of
$11,242,219 primarily from the sale of our equity securities.




Critical
Accounting Policies


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




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




See Note
2 of our consolidated financial statements for our year ended December 31, 2008
for a summary of significant accounting policies.




Off-Balance
Sheet Arrangements


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




ITEM
7A.                      QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK




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










18










ITEM
8.                      FINANCIAL
STATEMENTS














































TAPIMMUNE
INC.




(A
Development Stage Company)




CONSOLIDATED
FINANCIAL STATEMENTS




DECEMBER
31, 2008 AND 2007








































Report
of Independent Registered Public Accounting Firm




Consolidated
Balance Sheets




Consolidated
Statements of Operations




Consolidated
Statement of Stockholders’ Deficit




Consolidated
Statements of Cash Flows




Notes
to the Consolidated Financial Statements










19

















REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








To the
Stockholders and Board of Directors of TapImmune Inc.





We have
audited the accompanying consolidated balance sheets of TapImmune Inc. (a
development stage company) as of December 31, 2008 and 2007 and the related
consolidated statements of operations, stockholders’ deficit and cash flows for
the years ended December 31, 2008 and 2007 and the period from July 27, 1999
(inception) through December 31, 2008.  These financial statements are
the responsibility of the Company’s management.  Our responsibility is
to express an opinion on these financial statements based on our
audits.





We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform an audit to obtain reasonable assurance whether the
financial statements are free of material misstatement.  The Company
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, and 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, 2008 and
2007 and the results of its operations and its cash flows for the years ended
December 31, 2008 and 2007 and the period from July 27, 1999 (inception) through
December 31, 2008 in conformity with accounting principles generally accepted in
the United States of America.





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













DALE
MATHESON CARR-HILTON LABONTE LLP


CHARTERED
ACCOUNTANTS


Vancouver,
Canada


March 31,
2009














20





TAPIMMUNE
INC.


(A
Development Stage Company)





CONSOLIDATED
BALANCE SHEETS








December
      31, 2008
            
            
            December
      31, 2007CURRENT
      ASSETSCash
            
            $
            987
            
            
            $
            167,539Due from government
      agency
            
            
            33,263
            
            
            
            59,634Prepaid expenses and
      deposits
            
            
            9,520
            
            
            
            35,31343,770
            
            
            
            262,486FURNITURE AND
      EQUIPMENT,
      NET (Note 3)
            
            
            9,139
            
            
            
            16,621$
            52,909
            
            
            $
            279,107CURRENT
      LIABILITIESAccounts payable and accrued
      liabilities
            
            $
            1,492,586
            
            
            $
            1,103,263Research agreement obligations
      (Note 4)
            
            
            243,598
            
            
            
            199,766Convertible notes payable (Note
      5)
            
            
            56,633
            
            
            
            66,633Notes payable (Note
      5)
            
            
            763,327
            
            
            
            429,952Due to related parties (Note
      6)
            
            
            520,138
            
            
            
            154,2653,076,282
            
            
            
            1,953,879STOCKHOLDERS’
      DEFICITCapital Stock (Note
      7)Common stock $0.001 par value:
      500,000,000 sharesauthorized, 24,149,827 (2007 -
      23,502,682) sharesissued and outstanding
            
            
            24,150
            
            
            
            23,503Additional paid-in
      capital
            
            
            17,500,559
            
            
            
            16,910,218Shares and warrants to be issued
      (Notes 5, 7, and 11)
            
            
            323,750
            
            
            
            67,400Deficit accumulated during the
      development stage
            
            
            (20,812,106
            )
            
            
            (18,616,167
            )Accumulated other comprehensive
      income (loss)
            
            
            (59,726
            )
            
            
            (59,726
            )(3,023,373
            )
            
            
            (1,674,772
            )$
            52,909
            
            
            $
            279,107





COMMITMENTS AND CONTINGENCIES
(Notes 1, 4, 5, 7, 10 and 11)








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





21





TAPIMMUNE
INC.


(A
Development Stage Company)





CONSOLIDATED
STATEMENTS OF OPERATIONS








Year
      Ended
              December
      31,
              2008
            
            
            Year
      Ended
              December
      31,
              2007
            
            
            Period
      from
              July
      27, 1999
              (inception)
      to
              December
      31,
              2008EXPENSESConsulting
            
            $
            233,283
            
            
            $
            171,854
            
            
            $
            1,218,867Consulting, stock-based (Note
      7)
            
            
            151,500
            
            
            
            309,500
            
            
            
            3,285,775Depreciation
            
            
            7,482
            
            
            
            5,970
            
            
            
            209,486Gain on settlement of
      debt
            
            
            -
            
            
            
            -
            
            
            
            (173,010
            )General and
      administrative
            
            
            115,693
            
            
            
            132,587
            
            
            
            2,323,310Interest and financing charges
      (Note 5)
            
            
            778,179
            
            
            
            1,380,075
            
            
            
            2,721,669Management fees (Note
      6)
            
            
            353,162
            
            
            
            286,632
            
            
            
            1,934,235Management fees, stock-based
      (Note 7)
            
            
            172,668
            
            
            
            654,722
            
            
            
            827,390Professional fees
            
            
            284,288
            
            
            
            524,502
            
            
            
            2,641,222Research and development (Note
      6)
            
            
            182,343
            
            
            
            425,569
            
            
            
            5,324,351Research and development,
      stock-based
            
            
            -
            
            
            
            -
            
            
            
            612,0002,278,598
            
            
            
            3,891,411
            
            
            
            20,925,295NET
      LOSS BEFORE OTHER ITEMS
            
            
            (2,278,598
            )
            
            
            (3,891,411
            )
            
            
            (20,925,295
            )OTHER
      ITEMSForeign
      exchange gain
            
            
            82,659
            
            
            
            -
            
            
            
            82,659Interest income
            
            
            -
            
            
            
            -
            
            
            
            30,530NET
      LOSS
            
            $
            (2,195,939
            )
            
            $
            (3,891,411
            )
            
            $
            (20,812,106
            )BASIC
      AND DILUTED NET LOSS PER SHARE
            
            $
            (0.09
            )
            
            $
            (0.19
            )WEIGHTED
      AVERAGE NUMBER OF
              COMMON
      SHARES OUTSTANDING,
              BASIC
      AND DILUTED
            
            
            23,900,839
            
            
            
            20,815,273








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








22





TAPIMMUNE
INC.


(A
Development Stage Company)





CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ DEFICIT


FROM
JULY 27, 1999 (INCEPTION) TO DECEMBER 31, 2008








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








23





TAPIMMUNE
INC.


(A
Development Stage Company)





CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ DEFICIT


FROM
JULY 27, 1999 (INCEPTION) TO DECEMBER 31, 2008








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








24








TAPIMMUNE
INC.


(A
Development Stage Company)





CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ DEFICIT


FROM
JULY 27, 1999 (INCEPTION) TO DECEMBER 31, 2008








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








25








TAPIMMUNE
INC.


(A
Development Stage Company)





CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ DEFICIT


FROM
JULY 27, 1999 (INCEPTION) TO DECEMBER 31, 2008








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 2007convertible
      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 connectionwith
      the 2007 convertible notes
            
            
            -
            
            
            
            -
            
            
            
            657,095
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            657,095Fair
      value of warrants issued in connectionwith
      the 2007 promissory notes
            
            
            -
            
            
            
            -
            
            
            
            374,104
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            374,104Fair
      value of warrants issued as finders’ feesfor
      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 pursuantto
      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
            )Issued
      for cash-
      at $0.25  per share
            
            
            140,000
            
            
            
            140
            
            
            
            34,860
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            35,000








26








TAPIMMUNE
INC.


(A
Development Stage Company)





CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ DEFICIT


FROM
JULY 27, 1999 (INCEPTION) TO DECEMBER 31, 2008








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 the exercise of warrants
            
            
            207,146
            
            
            
            207
            
            
            
            24,793
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            25,000Issued
      pursuant to service agreements-
      at a fair value of $0.30 per share
            
            
            300,000
            
            
            
            300
            
            
            
            89,700
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            90,000Fair
      value of warrants issued in connection
              with
      the 2008 promissory notes
            
            
            -
            
            
            
            -
            
            
            
            206,820
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            206,820Fair
      value of warrants to be issued in connection
              with
      notes payable
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            256,350
            
            
            
            -
            
            
            
            -
            
            
            
            256,350Stock
      based compensation
            
            
            -
            
            
            
            -
            
            
            
            234,168
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            234,168Net
      loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (2,195,939
            )
            
            
            -
            
            
            
            (2,195,939
            )Balance,
      December 31, 2008
            
            
            24,149,827
            
            
            $
            24,150
            
            
            $
            17,500,559
            
            
            $
            323,750
            
            
            $
            (20,812,106
            )
            
            $
            (59,726
            )
            
            $
            (3,023,373
            )








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








27





TAPIMMUNE
INC.


(A
Development Stage Company)





CONSOLIDATED
STATEMENTS OF CASH FLOWS








Year
      Ended
              December
      31,
              2008
            
            
            Year
      Ended
              December
      31,
              2007
            
            
            Period
      from
              July
      27, 1999
              (inception)
      to
              December
      31,
              2008CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
            
            $
            (2,195,939
            )
            
            $
            (3,891,411
            )
            
            $
            (20,812,106
            )Adjustments
      to reconcile net loss to
              net
      cash from operating activities:Convertible debenture
      costs
            
            
            -
            
            
            
            -
            
            
            
            51,817Depreciation
            
            
            7,482
            
            
            
            5,971
            
            
            
            209,487Gain on settlement of
      debt
            
            
            -
            
            
            
            -
            
            
            
            (173,010
            )Non-cash interest and financing
      charges
            
            
            664,545
            
            
            
            1,334,214
            
            
            
            2,474,834Non-cash consulting and license
      fees
            
            
            90,000
            
            
            
            -
            
            
            
            106,250Stock based
      compensation
            
            
            234,168
            
            
            
            964,222
            
            
            
            4,635,165Changes
      in operating assets and liabilities:Due from government
      agency
            
            
            26,371
            
            
            
            -
            
            
            
            (33,263
            )Prepaid expenses and
      receivables
            
            
            25,793
            
            
            
            (61,213
            )
            
            
            (3,520
            )Accounts payable and accrued
      liabilities
            
            
            389,323
            
            
            
            350,707
            
            
            
            1,854,769Research agreement
      obligations
            
            
            43,832
            
            
            
            48,700
            
            
            
            243,598NET
      CASH USED IN
              OPERATING
      ACTIVITIES
            
            
            (714,425
            )
            
            
            (1,248,810
            )
            
            
            (11,445,979
            )CASH
      FLOWS FROM FINANCING ACTIVITIESIssuance of shares,
      net
            
            
            60,000
            
            
            
            457,500
            
            
            
            8,922,125Convertible notes
            
            
            (10,000
            )
            
            
            66,634
            
            
            
            256,633Notes and loans
      payable
            
            
            132,000
            
            
            
            516,600
            
            
            
            784,845Advances from (repayments to)
      related parties
            
            
            365,873
            
            
            
            277,605
            
            
            
            1,278,616NET
      CASH PROVIDED BY
              FINANCING
      ACTIVITIES
            
            
            547,873
            
            
            
            1,318,339
            
            
            
            11,242,219CASH
      FLOWS FROM INVESTING ACTIVITIESPurchase of furniture and
      equipment
            
            
            -
            
            
            
            (22,426
            )
            
            
            (218,626
            )Cash acquired on reverse
      acquisition
            
            
            -
            
            
            
            -
            
            
            
            423,373NET
      CASH (USED IN) PROVIDED BY
              INVESTING
      ACTIVITIES
            
            
            -
            
            
            
            (22,426
            )
            
            
            204,747(DECREASE)
      INCREASE IN CASH
            
            
            (166,552
            )
            
            
            47,103
            
            
            
            987CASH,
      BEGINNING
            
            
            167,539
            
            
            
            120,436
            
            
            
            -CASH,
      ENDING
            
            $
            987
            
            
            $
            167,539
            
            
            $
            987





SUPPLEMENTAL
CASH FLOW INFORMATION AND


NONCASH INVESTING AND
FINANCING ACTIVITIES (Note 9)








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








28
 TAPIMMUNE
INC.
 (A
Development Stage Company)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER
31, 2008








NOTE
1:                      NATURE
OF OPERATIONS




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.  The lead product
resulting from these licenses is an 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
has planned to contract out production of clinical grade vaccine.  The
Company plans to continue development of the lead product vaccine through to
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,
2008, the Company has a working capital deficiency of $3,032,512, a capital
deficiency of $3,023,373 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.  The Company is dependent 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.




As
indicated in Notes 5 and 11 to these financial statements a number of debt
obligations are in default as at the audit report date.




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 (Note
10).




Management
believes the Company will be able to complete restructuring plans by mid to late
2009. Substantial additional funding or equity for debt settlement will be
required to retire notes payable and other debt obligations. If the Company is
successful in raising sufficient funding, Management plans to expand programs
including  pre-clinical work and establishment of manufacturing
contracts necessary to enter clinical trials for its lead TAP (Transporters of
Antigen Processing) vaccine and infectious disease adjuvant technology. 
These measures, if successful, should contribute to reducing the risk of going
concern uncertainties for the Company over the next twelve 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.


29
  NOTE
2:                      SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES




Basis
of Presentation


These
financial statements are 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 significant
intercompany balances and transactions are eliminated upon
consolidation.




Use
of Estimates


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 materially from
those estimates.  Significant areas requiring management’s estimates
and assumptions include deferred taxes and related tax balances and disclosures,
determining the fair value of stock-based compensation and stock based
transactions, the fair value of the components of the convertible notes payable,
foreign exchange gains and losses, the useful lives of furniture and equipment,
allocation of costs to research and development and accrued liabilities. Matters
impacting the Company’s ability to continue as a going concern and contingencies
also involve the use of estimates and assumptions.




Foreign
Currency Translation


The
Company's primary management operations are currently located in Canada. All
foreign exchange translation gains or losses, except gains and losses arising
from self sustaining foreign subsidiary translation at the balance sheet
date,  are recorded in the earnings of the Company. 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
and gains or losses resulting from foreign currency transactions are included in
results of operations.




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 which
include assumptions about equity and capital market conditions, liquidity,
interest rates and cost of capital and market risk. Fair value estimates are
based primarily on management inputs when direct arms length market indicators
are not readily determinable or available. Management based estimates and inputs
are generally subject to higher variability than other observable market
indicators.  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 certain 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 assets classified as financial
instruments.




The
Company operates in the US and incurs expenditures outside of the United States
and is exposed to foreign currency risk between the Canadian dollar, U.S dollar
and Euros.




Furniture
and Equipment


Furniture
and equipment is recorded at cost and amortized using the straight-line method
over the estimated useful life at the following rates:


Computer
      Equipment
            2
      years


Furniture
      and Fixtures
            5
      years


Laboratory
      Equipment
            3
      years




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 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.






30





Stock-Based
Compensation


The
Company recorded $234,168 (2007 - $904,822) in stock-based compensation valued
using the Black-Scholes option pricing model, and an additional expense of
$90,000 (2007 - $59,400) from the fair value of stock issued pursuant to a
consulting services agreement during the year ended December 31, 2008 (Notes 6
and 7).




Deferred
Financing 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 development and marketing rights to certain
technologies.  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.




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, 2008 except for disclosures and for matters as described in
Note 11 (contingencies).




Loss
per Common 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.




Recent
Accounting Pronouncements


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, and will be adopted by the Company beginning in the first quarter of
2009.  Management  does not expect there to be any
significant impact of adopting SFAS 161 on our financial position, cash flows
and results of operations.




In May
2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted
Accounting Principles (“SFAS No.162”).  SFAS No. 162 is intended to
improve financial reporting by identifying a consistent framework, or hierarchy,
for selecting accounting principles to be used in preparing financial statements
that are presented in conformity with US generally accepted accounting
principles (GAAP) for nongovernmental entities.  SFAS No. 162 is
effective 60 days following the SEC's approval of the Public Company Accounting
Oversight Board Auditing amendments to AU Section 411, The Meaning of Present
Fairly in Conformity with Generally Accepted Accounting
Principles.  The new pronouncement is not expected to have an impact
on the Company’s results of operations or disclosures.






31




In May
2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163,
“Accounting for Financial Guarantee Insurance Contracts – An interpretation of
FASB Statement No. 60”.  SFAS 163 requires that an insurance
enterprise recognize a claim liability prior to an event of default when there
is evidence that credit deterioration has occurred in an insured financial
obligation. It also clarifies how Statement 60 applies to financial guarantee
insurance contracts, including the recognition and measurement to be used to
account for premium revenue and claim liabilities, and requires expanded
disclosures about financial guarantee insurance contracts. It is effective for
financial statements issued for fiscal years beginning after December 15, 2008,
except for some disclosures about the insurance enterprise’s risk-management
activities. SFAS 163 requires that disclosures about the risk-management
activities of the insurance enterprise be effective for the first period
beginning after issuance. Except for those disclosures, earlier application is
not permitted.  This new pronouncement is not expected to have a
material effect on the Company’s financial statements.


NOTE
3:                      FURNITURE
AND EQUIPMENT




Furniture
and equipment consisted of the following:




December
      31, 2008
            
            
            December
      31, 2007Computer
      equipment
            
            $
            4,533
            
            
            $
            4,533Furniture
      and fixtures
            
            
            3,161
            
            
            
            3,161Laboratory
      equipment
            
            
            16,704
            
            
            
            16,70424,398
            
            
            
            24,398Less:
      accumulated depreciation
            
            
            (15,259
            )
            
            
            (7,777
            )$
            9,139
            
            
            $
            16,621


32
  NOTE
4:                      RESEARCH
AGREEMENTS




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).




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, 2008)
and a €75,000 annual license fee (outstanding at December 31, 2008) to maintain
the reinstated agreement in good standing.  In January, 2008 the
Company paid €27,316 ($40,000) towards the outstanding balance and at December
31, 2008 €172,801 ($243,598) has been included in research agreement obligations
for the Crucell agreement and is outstanding under the terms of the
agreement.




The
agreement is currently in default and management is attempting to negotiate a
revised payment schedule for the remaining balance, and a continued working
relationship. Management has proposed that Crucell would hold the license in a
dormant state until the Company can initiate manufacturing and scheduled
payments for the license. While management is confident, and based on
discussions with Crucell of the proposed future relationship, we cannot be
certain that all the conditions will be met to continue the licensing
arrangement. Should we not be able to reinstate our Crucell license, the Company
would be forced to use alternate cell lines for manufacturing. Alternatives have
already been considered and investigated. As at the audit report date, there
remains uncertainty over the satisfactory completion of arrangements with
Crucell and over the impact to the Company if suitable licensing arrangements
are not reached.




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 $2,058 (CAN
$2,520).




Combined
Research and Operating Obligations


The
Company has obligations under the operating lease agreement that expire in
February 2012.  The aggregate minimum annual payments for the years
ending December 31 are as follows:







2009
                
                $
                26,3632010
                
                
                26,6972011
                
                
                26,6972012
                
                
                4,450$
                84,207
 NOTE
5:                      CONVERTIBLE
DEBT AND PROMISSORY NOTES PAYABLE




Over the
past several years the Company has obtained financing from related and unrelated
parties under challenging conditions. The Company has been successful to date in
sustaining operations by raising additional capital, by renegotiating or
replacing debt instruments and by extending terms and conditions when default
has occurred. These forms of financing are restrictive and costly from a market
risk perspective and are restrictive from a legal and operational perspective.
As a consequence of debt restructuring there has been substantial dilution and
potential dilution to shareholders through stock based payments and commitments
required to continue or renew debt arrangements. The company continues to be at
high risk for, interest rate exposure, liquidity, solvency and for debt renewal.
As of March 30, 2009, virtually all of the Company’s promissory note debt
instruments are in default (Note 11).




The
following is a summary of debt instrument transactions that are relevant to the
current and prior year:







Face
      Value
            
            
            Unamortized
              Warrant
      Discount
            
            
            Balance
      at
              December
      31, 2008
            
            
            Balance
      at
              December
      31, 20072004
      Convertible Debenture
            
            $
            56,633
            
            
            $
            -
            
            
            $
            56,633
            
            
            $
            66,6332007
      Promissory NotesNote 1, 12%, due March 30,
      2009
            
            
            125,000
            
            
            
            (15,723
            )
            
            
            109,277
            
            
            
            125,000Note 2, 12%, due March 30,
      2009
            
            
            200,000
            
            
            
            (25,158
            )
            
            
            174,842
            
            
            
            200,0002007
      Loan and Security Agreement
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            104,9522008
      Promissory NotesNote 1, 18%, due March 30,
      2009
            
            
            65,000
            
            
            
            (10,455
            )
            
            
            54,545
            
            
            
            -Note 2, 18%, due March 30,
      2009
            
            
            27,000
            
            
            
            (4,343
            )
            
            
            22,657
            
            
            
            -Note 3, 18%, due March 30,
      2009
            
            
            200,000
            
            
            
            (32,169
            )
            
            
            167,831
            
            
            
            -Note 4, 18%, due March 30,
      2009
            
            
            250,000
            
            
            
            (40,211
            )
            
            
            209,789
            
            
            
            -Note 5, 18%, due March 30,
      2009
            
            
            25,000
            
            
            
            (4,021
            )
            
            
            20,979
            
            
            
            -Note 6, 18%, due March 30,
      2009
            
            
            10,000
            
            
            
            (6,593
            )
            
            
            3,407
            
            
            
            -902,000
            
            
            
            (138,673
            )
            
            
            763,327
            
            
            
            429,952$
            958,633
            
            
            $
            (138,673
            )
            
            $
            819,960
            
            
            $
            496,585







33




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.  In 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%.  In
2008, the Company repaid $10,000 towards the convertible note
principal.




At
December 31, 2008, the principal amount of $56,633 (2007 - $66,633) was
outstanding for the convertible notes, and accrued interest of $15,025 (2007 -
$10,366) has been accrued and are recorded in accounts payable and accrued
liabilities.




ii)  2007
Promissory Note 1


On August
31, 2007, the Company issued an unsecured promissory note to a company related
through a family member of a director of the Company (Note 6) in the principal
amount of $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 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 Note 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 to
be $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, 2008 the warrants were not issued.




At
December 31, 2008, no repayment was made to the principal amount or the accrued
interest of $23,556 (2007 - $6,625) accrued on the promissory note that are
included in the accounts payable and accrued liabilities.




iii)  2007
Promissory Note 2


On August
31, 2007, the Company issued to the holder of 2007 Promissory Note 1 a second
promissory note (Note 6) in the principal amount of $200,000.  The
note bears interest at 12% per annum and is due on demand.





At
December 31, 2008, no repayment had been made to the principal amount or the
interest of $35,112 (2007 - $8,022) accrued on the convertible promissory note
and included in the accounts payable and accrued liabilities.





Effective
October 15, 2008, the two 2007 promissory notes (Notes 5(ii) and (iii)) were
renewed through March 30, 2009.  In consideration for the renewal, the
Company agreed to issue 1,525,000 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 $0.01 per Warrant
Share and for an exercise period of up to two years from the issuance
date.  The share purchase warrants were issued on March 11,
2009.  Management estimated the fair value of the 1,525,000 Warrants
to be $76,250 using the Black-Scholes option pricing model with an expected life
of 2 years, a risk free interest rate of 1.64%, a dividend yield of 0%, and an
expected volatility of 199%. The fair value of the warrants was recorded as a
discount to the note that is being amortized over the new maturity
term.




34




iv)  2007
Loan and Security Agreement


On
November 30, 2007, the Company entered into a Loan and Security Agreement with
an unrelated company, whereby the Company issued 12% promissory notes in the
principal amount of $445,000 secured by all of the Company’s assets, 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 matured 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 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 $44,354 (2007 -
$9,046) to interest expense for the year ended December 31, 2008 increasing the
net carrying value of the secured promissory notes.  Additionally, the
fair value of the warrants was accreted to interest expense by $295,694 (2007 -
$60,306) for the year ended December 31, 2008 increasing the carrying value of
the secured promissory notes to $445,000.  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%.  On May 31, 2008, the
notes were repaid in full.




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 Lender’s
warrants.  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.  The warrants issued as finders’ fees and described were
exercised during the current fiscal year.




v)  2008
Promissory Note 1


On April
10, 2008, the Company issued an unsecured promissory note in the principal
amount of $65,000 to an unrelated party that bears interest at 18% per annum,
due ninety (90) days from the date of issuance.  Additionally, the
Company issued to the Lender, as fully paid and non-assessable, 130,000
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 promissory note and the warrants
based on their relative fair values as determined by
management.  Accordingly, the Company recognized the relative fair
value of the warrants of $22,100 as a component of stockholders’
deficit.  The fair value of the warrants was accreted to interest
expense by $22,100 for the year ended December 31, 2008 adjusting the carrying
value of the promissory note to $65,000.  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 2.34%, a dividend
yield of 0%, and an expected volatility of 110%.





Effective
October 15, 2008, the 2008 promissory note was renewed through March 30,
2009.  In consideration for the renewal, the Company agreed to issue
390,000 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 $0.01 per Warrant Share and
for an exercise period of up to two years from the issuance date.  The
share purchase warrants were issued on March 11, 2009. Management estimated the
fair value of the 390,000 Warrants to be $19,500 using the Black-Scholes option
pricing model with an expected life of 2 years, a risk free interest rate of
1.64%, a dividend yield of 0%, and an expected volatility of 199%. The fair
value of the warrants was recorded as a discount to the note that is being
amortized over the new maturity term.




At
December 31, 2008, no repayment has been made to the principal amount or the
interest of $8,495 (2007 - $Nil) accrued on the promissory note and included in
the accounts payable and accrued liabilities.




35




vi)   2008
Promissory Note 2


On May 5,
2008, the Company issued an unsecured promissory note to a company controlled by
a director of the Company (Note 6) in the principal amount of $27,000 that bears
interest at 18% per annum, due ninety (90) days from the date of
issuance.  Additionally, the Company issued to the Lender, as fully
paid and non-assessable, 54,000 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
promissory note and the warrants based on their relative fair values as
determined by management.  Accordingly, the Company recognized the
relative fair value of the warrants of $9,720 as a component of stockholders’
deficit.  The fair value of the warrants was accreted to interest
expense by $9,720 for the year ended December 31, 2008 adjusting the carrying
value of the promissory note to $27,000.  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 1.94%, a dividend
yield of 0%, and an expected volatility of 117%.





Effective
October 15, 2008, 2008 Promissory Note 2 was renewed through March 30,
2009.  In consideration for the renewal, the Company agreed to issue
162,000 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 $0.01 per Warrant Share and
for an exercise period of up to two years from the issuance date.  The
share purchase warrants were issued on March 11, 2009. Management estimated the
fair value of the 162,000 Warrants to be $8,100 using the Black-Scholes option
pricing model with an expected life of 2 years, a risk free interest rate of
1.64%, a dividend yield of 0%, and an expected volatility of 199%. The fair
value of the warrants was recorded as a discount to the note that is being
amortized over the new maturity term.




At
December 31, 2008, no repayment has been made to the principal amount or the
interest of $3,196 (2007 - $Nil) accrued on the promissory note and included in
accounts payable and accrued liabilities.




vii)  2008
Promissory Note 3


On May
14, 2008, the Company issued an unsecured promissory note to a company related
through a family member of an officer of the Company (Note 6) in the principal
amount of $200,000 that bears interest at 18% per annum, due ninety (90) days
from the date of issuance.  Additionally, the Company issued 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
five years from the issuance date.  The Company allocated the proceeds
of issuance between the promissory note and the warrants based on their relative
fair values as determined by management.  Accordingly, the Company
recognized the relative fair value of the warrants of $76,000 as a component of
stockholders’ deficit.  The fair value of the warrants was accreted to
interest expense by $76,000 for the year ended December 31, 2008 adjusting the
carrying value of the promissory note to $200,000.  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 1.96%, a dividend
yield of 0%, and an expected volatility of 117%.




At
December 31, 2008, no repayment has been made to the principal amount or the
interest of $22,784 (2007 - $Nil) accrued on the promissory note and included in
accounts payable and accrued liabilities.




viii)  2008
Promissory Note 4


On May
22, 2008, the Company issued to the holder of 2008 Promissory Note 3 a
second  unsecured promissory note (Note 6) in the principal amount of
$250,000 that bears interest at 18% per annum, due ninety (90) days from the
date of issuance.  Additionally, the Company issued to the Lender, as
fully paid and non-assessable, 500,000 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 promissory note and the warrants based on their relative fair values as
determined by management.  Accordingly, the Company recognized the
relative fair value of the warrants of $90,000 as a component of stockholders’
deficit.  The fair value of the warrants was accreted to interest
expense by $90,000 for the year ended December 31, 2008 adjusting the carrying
value of the promissory note to $250,000.  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 2.07%, a dividend
yield of 0%, and an expected volatility of 117%.




At
December 31, 2008, no repayment has been made to the principal amount or the
interest of $27,493 (2007 - $Nil) accrued on the promissory note and included in
accounts payable and accrued liabilities.







Effective
October 15, 2008, 2008 Promissory Notes 3 and 4 (Note 5(vii) and (viii)) were
renewed through March 30, 2009.  In consideration for the renewal, the
Company agreed to issue 2,700,000 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 $0.01 per Warrant
Share and for an exercise period of up to two years from the issuance
date.  The share purchase warrants were issued on March 11, 2009.
Management estimated the fair value of the 2,700,000 Warrants to be $135,000
using the Black-Scholes option pricing model with an expected life of 2 years, a
risk free interest rate of 1.64%, a dividend yield of 0%, and an expected
volatility of 199%. The fair value of the warrants was recorded as a discount to
the note that is being amortized over the new maturity term.




36




ix)  2008
Promissory Note 5


On May
15, 2008, the Company issued an unsecured promissory note to an officer of the
Company (Note 6) in the principal amount of $25,000 that bears interest at 18%
per annum, due ninety (90) days from the date of
issuance.  Additionally, the Company issued to the Lender, as fully
paid and non-assessable, 50,000 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
promissory note and the warrants based on their relative fair values as
determined by management.  Accordingly, the Company recognized the
relative fair value of the warrants of $9,000 as a component of stockholders’
deficit.  The fair value of the warrants was accreted to interest
expense by $9,000 for the year ended December 31, 2008 adjusting the carrying
value of the promissory note to $25,000.  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 1.96%, a dividend
yield of 0%, and an expected volatility of 117%.




Effective
October 15, 2008, this promissory note was renewed through March 30,
2009.  In consideration for the renewal, the Company agreed to issue
150,000 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 $0.01 per Warrant Share and
for an exercise period of up to two years from the issuance date.  The
share purchase warrants were issued on March 11, 2009.  Management
estimated the fair value of the 150,000 Warrants to be $7,500 using the
Black-Scholes option pricing model with an expected life of 2 years, a risk free
interest rate of 1.64%, a dividend yield of 0%, and an expected volatility of
199%. The fair value of the warrants was recorded as a discount to the note that
is being amortized over the new maturity term.




At
December 31, 2008, no repayment has been made to the principal amount or the
interest of $2,836 (2007 - $Nil) accrued on the promissory note and included in
the accounts payable and accrued liabilities.




x)  2008
Promissory Note 6


On
November 15, 2008 the Company issued the holder of Promissory Note 5 a second
promissory note (Note 6) in the principal amount of $10,000 that bears interest
at 18% per annum, due on March 30, 2009.  Additionally, the Company
agreed to issue to the Lender, as fully paid and non-assessable, 200,000
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 $0.01 per Warrant Share and for an exercise
period of up to two years from the issuance date.  The share purchase
warrants were issued on March 11, 2009. Management estimated the fair value of
the 200,000 Warrants to be $10,000, because the Black-Scholes option pricing
model resulted in a value of $18,000, higher than the principal amount, with an
expected life of 2 years, a risk free interest rate of 1.22%, a dividend yield
of 0%, and an expected volatility of 190%. The fair value of the warrants was
recorded as a discount to the note that is being amortized over the new maturity
term.




At
December 31, 2008, no repayment has been made to the principal amount or the
interest of $150 (2007 - $Nil) accrued on the promissory note and included in
accounts payable and accrued liabilities.




See Note
11





37
  NOTE
6:                      RELATED
PARTY TRANSACTIONS




The
Company had transactions with certain officers and directors of the Company for
the fiscal year ended December 31, 2008 as follows:




a)
            incurred
      $308,162 (2007 - $286,632) in management fees and recorded an additional
      $172,668 (2007 - $654,722) in stock based compensation expense for the
      fair value of options granted to management that were vested during the
      period;


b)
            incurred
      $74,579 (2007 - $167,233) in research and development fees to related
      parties, of which $28,114 (2007 - $112,313) was to the former Chief
      Science Officer and $46,466 (2007 - $54,920) was paid to a direct family
      member of a current officer;


c)
            incurred
      $16,932 (2007 - $6,625) in interest and finance charges on a $125,000
      promissory note due to a company related through a direct family member of
      a current director (refer to Note 5(ii)); incurred $27,090 (2007 - $8,022)
      in interest and finance charges on a $200,000 promissory note due to the
      same company;  and incurred $35,369 (2007 - $Nil) in interest
      and finance charges related to an agreement to issue warrants in
      connection with extending the terms of the $125,000 and $200,000 notes
      through March 30, 2009 (refer to Note
5(iii));


d)
            issued
      a $27,000 promissory note bearing interest at 18% per annum and including
      54,000 non-transferable and registerable share purchase warrants with an
      exercise price of $0.25 per share for an exercise period of up to five
      years from the issuance date to a company controlled by a director of the
      Company, incurred $3,196 (2007 - $Nil) in interest and finance charges on
      the $27,000 promissory note, and incurred $3,757 (2007 - $Nil) in interest
      and finance charges related to an agreement to issue warrants in
      connection to extending the term through March 31, 2009 (refer to Note
      5(vi));


e)
            issued
      a $200,000 promissory note bearing interest at 18% per annum and including
      400,000 non-transferable and registerable share purchase warrants with an
      exercise price of $0.25 per share for an exercise period of up to five
      years from the issuance date to a company related through a family member
      of an officer of the Company, and incurred $22,784 (2007 - $Nil) in
      interest and finance charges on the $200,000 promissory note (refer to
      Note 5(vii));


incurred
$62,620 (2007 - $Nil) in interest and finance charges related to an agreement to
issue warrants in connection to extending the terms of the $200,000 and $250,000
notes through March 30, 2009 (refer to Note 5(viii));


f)
            issued
      a $25,000 promissory note bearing interest at 18% per annum and including
      50,000 non-transferable and registerable share purchase warrants with an
      exercise price of $0.25 per share for an exercise period of up to five
      years from the issuance date to an officer of the Company, incurred $2,836
      (2007 - $Nil) in interest and finance charges on the $25,000 promissory
      note, and incurred $3,479 (2007 - $Nil) in interest and finance charges
      related to an agreement to issue warrants in connection to extending the
      term through March 30, 2009 (refer to Note
  5(ix));


issued a
$10,000 promissory note bearing interest at 18% per annum and including an
agreement to issue 200,000 transferable and registerable share purchase warrants
with an exercise price of $0.01 per share for an exercise period of up to two
years from the issuance date to the same officer of the Company, incurred $150
(2007 - $Nil) in interest and finance charges on the $10,000 promissory note,
and incurred $3,407 (2007 - $Nil) in interest and finance charges related to the
agreement to issue warrants (refer to Note 5(ix));


g)
            In
      January, 2009, bonuses in the amounts of $20,000 and $25,000 were granted
      to a director and an officer of the Company respectively as compensation
      for their work in 2008, and are recorded as due to related parties at
      December 31, 2008.







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 as
representing fair value.




At
December 31, 2008 the Company had amounts owing to directors and officers of
$438,591 (December 31, 2007 - $111,593), a direct relative of an officer of
$29,530 (December 31, 2007 - $3,000), and the former CSO of $52,017 (December
31, 2007 - $39,672).  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, except as
described above.


NOTE
7:                      CAPITAL
STOCK




Share
Capital


The
authorized capital of the Company consists of 500,000,000 common shares with
$0.001 par value and 5,000,000 non-voting preferred shares with $0.001 par
value.  On March 27, 2007, the Company’s Articles of Incorporation
were amended to increase the authorized capital from 20,000,000 shares of common
stock to 80,000,000 shares of common stock, and on January 22, 2009 the
authorized capital increased from 80,000,000 shares of common stock to
500,000,000 shares of common stock at a special meeting of the
shareholders.




All prior
period share transactions included in the Company’s stock transactions and
balances have been retroactively restated to give effect to a 2.5 to 1 reverse
stock split that occurred June 28, 2007.




38




2007
Share Transactions


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, 2008, the $23,400
fair value of the shares to be issued has been recorded as an obligation to
issue shares and warrants.




2008
Share Transactions


On April
8, 2008, the Company issued 300,000 shares of restricted common stock with an
estimated fair value based on market trading value of $0.30 per share, pursuant
to a consulting services agreement.  The $90,000 fair value of the
issued shares has been recorded as stock-based consulting
fees.  Additionally, pursuant to the consulting services agreement,
the Company has committed to issue options to acquire 200,000 shares of the
Company’s common stock at an exercise price of $0.25 per share.  The
vesting and expiry terms are to be determined at the time of grant. As of
December 31, 2008 and March 31, 2009 the options were not issued. No stock based
compensation has been recorded for this commitment as the fair
value  could not be reasonably determined at the commitment
date.




On July
31, 2008, with an effective date of June 30, 2008, the Company completed a
private placement in the amount of 140,000 Units at a subscription price of
$0.25 for gross proceeds to the Company of $35,000.  Each Unit is
comprised of one common share and one-half of one non-transferable share
purchase warrant of the Company.  Each whole warrant entitles the
holder to purchase an additional common share of the Company at an exercise
price of $0.30 per share for a period which is the earlier of (i) two years from
the date of issuance, or (ii) 18 months from the effective date of
registration.  The Company estimated the total fair market value of
the warrants to be $21,000 at the date of grant, using the Black-Scholes pricing
model using an expected life of 18 months, a risk-free interest rate of 2.60%
and an expected volatility of 202%.  The fair value of the warrants
has been included in capital stock.




The
Company has not separately disclosed the fair market value of the warrants
attached to private placements units during the current and prior fiscal
years.




Share
Purchase Warrants


On
December 18, 2007, the Company signed an agreement to extend the terms of the
2007 Promissory Note through February 28, 2008 (refer to Note
5(ii)).  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.




During
the year ended December 31, 2008, the Company issued, as fully paid and
non-assessable, 1,134,000 non-transferable and registerable share purchase
warrants, entitling the holder to acquire an equivalent number of common shares
of the Company at an exercise price of $0.25 per share for a period of up to
five years from the date of issuance.  The warrants were issued as
part of promissory note agreements (refer to Note 5 ((v) to (ix)).




During
the year ended December 31, 2008, the Company issued 207,146 shares of
restricted common stock pursuant to the exercise of 358,000 warrants, for total
proceeds of $25,000.  Of the 358,000 warrants exercised, 258,000 were
exercised for $Nil proceeds, in accordance with a cash-less exercise
option,  resulting in the issuance of 107,146 shares of restricted
common stock.




Effective
October 15, 2008, the 2007 and 2008 promissory notes (Notes 5(ii) through (ix))
were renewed through March 30, 2009.  In consideration for the
renewal, the Company agreed to issue 4,927,000 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
$0.01 per Warrant Share and for an exercise period of up to two years from the
issuance date.  The share purchase warrants were issued on March 11,
2009. The fair value of these warrants was determined to be $246,350, using the
Black-Scholes model (assumptions in Note 5), and recorded in equity as an
obligation to issue warrants. At December 31, 2008, $114,271 of the total value
of $246,350 was expensed as financing cost.




39




Effective
November 25, 2008, the Company agreed to issue, as fully paid and
non-assessable, 200,000 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 $0.01 per Warrant
Share and for an exercise period of up to two years from the issuance
date.  The warrant obligation was agreed to as part of a promissory
note agreement (refer to Note 5 (x)), and issued on March 31,
2009.  The fair value of these warrants was determined to be $10,000,
using the Black-Scholes model (assumptions in Note 5), and recorded in equity as
an obligation to issue warrants. At December 31, 2008, $3,358 of the total value
of $10,000 was expensed as financing cost.




A summary
of the Company’s issued stock purchase warrants as of December 31, 2008 and
changes during the year is presented below:




Number
      of
              warrants
            
            
            Weighted
      average
              exercise
      price
            
            
            Weighted
      average
              remaining
      lifeBalance,
      December 31, 2006
            
            
            3,954,359
            
            
            $
            0.73
            
            
            
            2.16Issued
            
            
            9,093,667
            
            
            
            0.25
            
            
            
            5.00Expired
            
            
            (1,976,359
            )
            
            
            (1.21
            )
            
            
            n/aBalance,
      December 31, 2007
            
            
            11,071,667
            
            
            
            0.25
            
            
            
            4.04Issued
            
            
            1,204,000
            
            
            
            0.25
            
            
            
            5.00Exercised
            
            
            (358,000
            )
            
            
            (0.25
            )
            
            
            (4.30
            )Balance,
      December 31, 2008
            
            
            11,917,667
            
            
            $
            0.25
            
            
            
            3.15




As of
December 31, 2008, the Company is committed to issuing additional share purchase
warrants as follows:







Expiry:
            
            Number
      of
              warrants
            
            
            Weighted
      average
              exercise
      price
            
            
            Estimated
              fair
      valueThree
      years from issuance (Note 5)
            
            
            400,000
            
            
            $
            0.25
            
            
            $
            44,000March
      31, 2011 (Issued March 30, 2009)
            
            
            4,927,000
            
            
            
            0.01
            
            
            
            246,350March
      31, 2011 (Issued March 30, 2009)
            
            
            200,000
            
            
            
            0.01
            
            
            
            10,0005,527,000
            
            
            $
            0.03
            
            
            $
            300,350







40




Stock
Compensation 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.




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 during the
year ended December 31, 2008 was $234,168 (2007 - $904,822) of which $61,500
(2007 - $250,010) was recorded as stock based consulting and $172,667 (2007 -
$654,722) was recorded as stock based management fees.




A summary
of the Company’s stock options as of December 31, 2008 and changes during the
year is presented below:




Number
      of
              options
            
            
            Weighted
      average
              exercise
      price
            
            
            Weighted
      average
              remaining
      lifeBalance,
      December 31, 2006
            
            
            1,240,000
            
            
            $
            1.38
            
            
            
            4.47Issued
            
            
            6,320,000
            
            
            
            0.25
            
            
            
            10.00Cancelled or
    Expired
            
            
            (1,240,000
            )
            
            
            (1.38
            )
            
            
            n/aBalance,
      December 31, 2007
            
            
            6,320,000
            
            
            
            0.25
            
            
            
            9.44Issued
            
            
            -
            
            
            
            -
            
            
            
            -Balance,
      December 31, 2008
            
            
            6,320,000
            
            
            $
            0.25
            
            
            
            8.43




A summary
of the status of the Company’s unvested options as of December 31, 2008 and
changes during the year ended December 31, 2008 is presented below:




Number
      of Shares
            
            
            Weighted-Average
              Grant-Date
              Fair
      ValueUnvested,
      December 31, 2006
            
            
            -
            
            
            $
            -Issued
            
            
            6,320,000
            
            
            
            0.20Vested
            
            
            (3,100,000
            )
            
            
            0.20Unvested,
      December 31, 2007
            
            
            3,220,000
            
            
            
            0.20Vested
            
            
            (2,420,000
            )
            
            
            0.20Unvested,
      December 31, 2008
            
            
            800,000
            
            
            $
            0.20


41
  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 $10,228,000 at December
31, 2008 (2007 - $12,397,000), which may be available to reduce future year’s
taxable income.  These carry forwards begin to expire, if not
utilized, commencing in 2009.  Future tax benefits which may arise as
a result of these losses have not been recognized in these financial statements,
as their realization is determined not likely to occur and accordingly, the
Company has recorded a valuation allowance for the deferred tax asset relating
to these tax loss carry forwards.




The
Company reviews its valuation allowance requirements on an annual basis based on
projected future operations.  When circumstances change and this
causes a change in management’s judgment about the recoverability of future tax
assets, the impact of the change on the valuation allowance is reflected in
current operations and disclosures.




The
Company’s policy is to accrue any interest and penalties related to unrecognized
tax charges or likely penalties and interest in its provision for income
taxes.  Additionally, FIN 48 requires that a company recognize in its
financial statements the impact of a tax position that is more likely than not
to be sustained upon examination based on the technical merits of the
position.  The Company has incurred taxable losses for all tax years
since inception and accordingly, no provision for taxes has been recorded for
the current or any prior fiscal year.




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 and other temporary adjusted as appropriate
for temporary and permanent tax basis differences.  The components of
these differences are as follows:




Year
      Ended
            
            
            Year
      EndedDecember
      31, 2008
            
            
            December
      31, 2007Loss
      before income taxes
            
            $
            (2,195,939
            )
            
            $
            (3,891,411
            )Corporate
      tax rate
            
            
            35.00
            %
            
            
            42.00
            %Expected
      tax recovery
            
            
            (768,578
            )
            
            
            (1,634,393
            )Increase
      (decrease) resulting from:Permanent
      differences
            
            
            232,591
            
            
            
            560,370Non-qualified stock
      options
            
            
            81,959
            
            
            
            404,973Change in enacted tax
      rates
            
            
            147,216
            
            
            
            -Change in valuation
      allowance
            
            
            306,812
            
            
            
            669,050Income
      tax recovery
            
            $
            -
            
            
            $
            -




42




The
Company’s deferred tax assets are as follows:




Year
      Ended
            
            
            Year
      EndedDecember
      31, 2008
            
            
            December
      31, 2007Deferred
      tax assets:Loss carryforwards and tax
      pools
            
            $
            4,647,862
            
            
            $
            4,341,050Valuation
      allowance
            
            
            (4,647,862
            )
            
            
            (4,341,050
            )Net
      deferred income tax assets
            
            $
            -
            
            
            $
            -




As the
criteria for recognizing future income tax assets have not been met due to the
uncertainty of realization, a valuation allowance of 100% has been recorded for
the current and prior year.




The
Company has not filed income tax returns for several years for the US entities
within the consolidated group of companies. Canadian corporate tax returns to
the end of 2007 have been filed but as at March 30,2009 had not been
assessed.    Both taxing authorities prescribe penalties for
failing to file certain tax returns and supplemental
disclosures.  Upon filing and/or review 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 anticipated risk for exposure to penalties for income tax
liability is determined to be low..  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. (Note 10)




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 as reported in the Company’s annual consolidated financial
statements, there would be no significant net impact expected to the current and
deferred income tax disclosures or reconciliations reported.




Management
is not currently able to assess the likelihood of the imposition of penalties or
interest arising from delinquent filings.  Nor can a reasonable or
reliable estimate of such liability, if any, be made at this
time.  Management intends to bring all of the Company’s tax filings
and compliance requirements up to date as Company resources permit.


43
  NOTE
9:                      SUPPLEMENTAL
CASH FLOW INFORMATION AND


NON-CASH INVESTING AND FINANCING
ACTIVITIES




On April
8, 2008, the Company issued 300,000 shares of restricted common stock with an
estimated fair value of $0.30 per share, pursuant to a consulting services
agreement.  The $90,000 fair value of the issued shares has been
recorded as stock-based consulting fees (refer to Note 7).




December
      31, 2008
            
            
            December
      31, 2007Interest
      paid in cash
            
            $
            -
            
            
            $
            53,400Income
      taxes paid
            
            $
            -
            
            
            $
            -





NOTE
10 – CONTINGENCIES AND COMMITMENTS





Contingency


As
described in Note 8, the Company has not filed income tax returns for several
years in certain operating jurisdictions. The company may be subject to possible
compliance penalties and interest.





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. Penalties and interest, if assessed in
the future, will be recorded in the period such amounts are
determinable.





Commitment


The
Company signed an agreement effective October 1st 2008 with an arms length
consulting firm in the United States to assist in strategic planning, debt
consolidation and negotiation, strategic partnering, mergers, acquisition and
near and long term financing. Pursuant to such Agreement the consulting firm
will be compensated $10,000 a month for the term of the Agreement (36 months
with mutual cancellation clauses upon notice). Continuation of the agreement is
subject to the deliverables outlined therein including strategic planning,
successful debt consolidation and restructuring and funding of at least
$750,000. After certain restructuring efforts have taken place, the consulting
firm would be provided with a mobilization fee of $75,000, issued 2 million
common shares and three tranches of warrants, the first priced at the market
when issued and the subsequent warrants at 50% and 100% premiums, respectively,
to the first set of warrants. As at March 30, 2009 the deliverables had not been
met and only the monthly consulting fee has been incurred.





Upon
achievement of deliverables any stock based commitments will be valued at the
measurement date in the period of such commitment.





As at
March 31, 2009 the parties were addressing plans to complete the steps necessary
to achieve the deliverables. However, they had not been achieved.





44
  NOTE
11:                      SUBSEQUENT
EVENTS







On and
around February 4, 2009, the Company entered into a series of secured loan
agreements pursuant to which it issued secured convertible debentures (the
“Debentures”) with a term of 180 days.  The Debentures total a
principal amount of $120,000 and carries a per annum interest rate of
30%.  In connection with the issuance of the Debenture, the Company
entered into a Security Agreement with the Debenture holders secured with all of
the Company’s assets, including the Company’s tangible assets and patents and
patent applications, until there has been full compliance with the terms of the
Debentures.




In
connection with the Debentures, the Company issued warrants to purchase 20,000
shares of its common stock for every $1,000 in face amount of the Debentures for
a total of 2,400,000 warrants.  The Warrants have a term of two years
from the date of issuance.  A holder of the Warrants may exercise
those Warrants at $0.02 subject to adjustments upon the occurrence of certain
events like stock splits.  The Company has agreed that any shares into
which the Debenture can be converted or into which the Warrants may be exercised
shall be included in any registration statement that the Company may elect to
file for the registration of its common stock.




The
Secured Loan Agreements and the Security Agreement authorize the Company to
issue up to another $55,000 of Debentures and 1,100,000 Warrants to additional
investors.




The terms
of this funding contain onerous security provisions, interest rates and
performance requirements. Due to difficulties in raising funds in the capital
markets in early 2009, management arranged this financing with private lenders
under the specified terms as certain critical expenditures had to be met to
sustain the Company.   Although there is no certainty, management
believes the Company will secure adequate funding prior to the maturity date to
repay the loan and release the secured collateral.




In
relation to the financing subsequent to the year end, finders’ fee of $10,000
was paid.


NOTE
12:                      COMPARATIVE
FIGURES





Certain
of the comparative figures have been reclassified to conform to the current
period’s presentation.








45










ITEM
      9.
            CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE




We have
had no disagreements with our principal independent accountants.




ITEM
      9A(T).
            CONTROLS
      AND PROCEDURES




Evaluation
of Disclosure Controls and Procedures


Our
management, with the participation of our Principal Executive Officer and
Principal Financial Officer, has evaluated the effectiveness of our disclosure
controls and procedures (as such term is defined in Rules 13a-15(e) and
15d-15(e) under the Exchange Act, as of the end of the period covered by this
report.  Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed in the reports we file or submit under the Exchange Act is
accumulated and communicated to management, including our Principal Executive
Officer and Principal Financial Officer, as appropriate, to allow timely
decisions regarding required disclosure.  Based on such evaluation,
our Principal Executive Officer and Principal Financial Officer have concluded
that, as of the end of the period covered by this report, our disclosure
controls and procedures are not effective in recording, processing, summarizing
and reporting, on a timely basis, information required to be disclosed by us in
the reports that we file or submit under the Exchange Act.




It should
be noted that any system of controls is based in part upon certain assumptions
designed to obtain reasonable (and not absolute) assurance as to its
effectiveness, and there can be no assurance that any design will succeed in
achieving its stated goals.




Management’s
Report on Internal Control Over Financial Reporting


The
management of the Company is responsible for establishing and maintaining
adequate internal control over financial reporting, as required by
Sarbanes-Oxley (SOX) Section 404 A.  The Company's internal control
over financial reporting is a process designed under the supervision of the
Company's Principal Executive Officer and Principal Financial Officer to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of the Company's financial statements for external purposes in
accordance with United States generally accepted accounting principles (“US
GAAP”).




As of
December 31, 2008 management assessed the effectiveness of the Company's
internal control over financial reporting based on the criteria for effective
internal control over financial reporting established in Internal Control
-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission ("COSO") and SEC guidance on conducting such
assessments.  Based on that evaluation, they concluded that, as at
December 31, 2008 such internal controls and procedures were not effective to
detect the inappropriate application of US GAAP rules as more fully described
below.  This was due to deficiencies that existed at the time in which
the internal control procedures were implemented that adversely affected our
internal controls and that may be considered to be a material
weakness.




The
matters involving internal controls and procedures that the Company’s management
considered to be material weaknesses under the standards of the Public Company
Accounting Oversight Board were: (1) inadequate entity level controls due to:
(i) weak tone at the top to implement an effective control environment, and (ii)
ineffective audit committee due to a lack of a majority of independent members
(1 of 3) on the current audit committee and a lack of a majority of outside
directors on our board of directors; (2) inadequate segregation of duties
consistent with control objectives; (3) insufficient written policies and
procedures for accounting and financial reporting with respect to the
requirements and application of US GAAP and SEC disclosure requirements; (4)
ineffective controls over period end financial disclosure and reporting
processes.




Management
believes that the material weaknesses set forth in items (2), (3) and (4) above
did not have a material adverse effect on the Company's financial results for
the fiscal year ended December 31, 2008.  However, management believes
that the material weaknesses in entity level controls set forth in item (1)
results in ineffective oversight in the establishment and monitoring of required
internal controls and procedures, which could result in a material misstatement
in our financial statements in future periods.




46




We are
committed to improving our financial organization.  As part of this
commitment, when resources become available to us we will i) expand our
personnel improving segregate duties consistent with control objectives, ii)
appoint one or more outside directors to our board of directors who shall be
appointed to our audit committee resulting in a fully functioning audit
committee who will undertake the oversight in the establishment and monitoring
of required internal controls and procedures such as reviewing and approving
estimates and assumptions made by management; and iii) prepare and implementing
sufficient written policies and checklists which will set forth procedures for
accounting and financial reporting with respect to the requirements and
application of US GAAP and SEC disclosure requirements.




Management
believes that the appointment of one or more outside directors, who shall be
appointed to a fully functioning audit committee, will remedy the ineffective
audit committee and a lack of a majority of outside directors on our Board. In
addition, management believes that preparing and implementing sufficient written
policies and checklists will remedy the following material weaknesses (i)
insufficient written policies and procedures for accounting and financial
reporting with respect to the requirements and application of US GAAP and SEC
disclosure requirements; and (ii) ineffective controls over period end financial
close and reporting processes. Further, management believes that the hiring of
additional personnel will result in improved segregation of duties and provide
more checks and balances within the financial reporting department.




We will
continue to monitor and evaluate the effectiveness of our internal controls and
procedures over financial reporting on an ongoing basis and are committed to
taking further action by implementing additional enhancements or improvements,
or deploying additional human resources as may be deemed necessary.




This
annual report does not include an attestation report of the Company’s registered
public accounting firm regarding internal controls over financial
reporting.  Management’s report was not subject to attestation by the
Company’s registered public accounting firm pursuant to the temporary rules of
the SEC that permit the Company to provide only management’s report in this
annual report.




Changes
in Internal Control Over Financial Reporting


There
have been no changes in our internal control over financial reporting during our
fourth fiscal quarter of our fiscal year ended December 31, 2008 that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.




ITEM
      9B.
            OTHER
      INFORMATION




Not
applicable.




ITEM
      10.
            DIRECTORS,
      EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE




Our
directors and executive officers and their respective ages as of the date of
this annual report are as follows:




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




The
following describes the business experience of each of our directors and
executive officers, including other directorships held in reporting
companies:




47




Denis
Corin


Mr. Corin
has served as our President and Chief Executive Officer of the Company since
November of 2006.  Mr. 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.




Patrick
A. McGowan


Mr.
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.




Alan
P. Lindsay


Mr.
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.




Glynn
Wilson


Dr.
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.




Term
of Office


Our
directors are appointed for a one-year term to hold office until the next annual
general meeting of our stockholders or until they resign or are removed from the
board in accordance with our bylaws.  Our officers are appointed by
our Board of Directors and hold office until they resign or are removed from
office by the Board of Directors.




Significant
Employees


We have
no significant employees other than our executive officers.




48




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.  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.




Involvement
in Certain Legal Proceedings


None of
our directors, executive officers or control persons has been involved in any of
the following events during the past five years: (i) any bankruptcy petition
filed by or against any business of which such person was a general partner or
executive officer either at the time of the bankruptcy or within two years prior
to that time; (ii) any conviction in a criminal proceeding or being subject to a
pending criminal proceeding (excluding traffic violations and other minor
offences); (iii) being subject to any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring, suspending or
otherwise limiting his involvement in any type of business, securities or
banking activities; or (iv) being found by a court of competent jurisdiction (in
a civil action), the SEC or the Commodity Futures Trading Commission to have
violated a federal or state securities or commodities law, and the judgment has
not been reversed, suspended or vacated.




Code
of Ethics


We have
not yet adopted a code of ethics that applies to our principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions.  We plan to adopt
a code of ethics in the near future.




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 10% of our common stock, to file reports of
ownership and changes in ownership with the SEC.  Copies of all filed
reports are required to be furnished to us pursuant to Rule 16a-3 promulgated
under the Exchange Act.  Based solely on the reports received by us
and on the representations of the reporting persons, we believe that these
persons have complied with all applicable filing requirements during the year
ended July 31, 2008.




49




ITEM
11.                      EXECUTIVE
COMPENSATION




Compensation
Discussion and Analysis


The
following table sets forth the compensation paid to our Principal Executive
Officer during our fiscal years ended December 31, 2008 and December 31,
2007:




Summary
Compensation Table


Name
      and Principal
              Position
            Year
            Salary
              ($)
            Bonus
              ($)
            Stock
              Awards
              ($)
            Option
              Awards
              ($)
            All
      Other
              Compen-sation
              ($)
            Total
              ($)Denis
      Corin
              President,
      CEO & Principal Executive Officer
            2008
              2007
            132,000
              102,546
            Nil
              40,000
            Nil
              Nil
            Nil
              120,000
            Nil
              Nil
            133,332
              262,546




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




The
following table sets forth information as at December 31, 2008 relating to
outstanding equity awards for each Named Executive Officer:




Outstanding
Equity Awards at Year End Table


Name
            Number
      of
              Securities
              Underlying
              Unexercised
              Options
              (exercisable)
            Number
      of
              Securities
              Underlying
              Unexercised
              Options
              (unexercisable)
            Number
      of
              Securities
              Underlying
              Unexercised
              Unearned
              Options
            Option
              Exercise
              Price
            Option
              Expiration
              DateDenis
      Corin
              President,
      CEO & Principal
              Executive
      Officer
            800,000
            Nil
            Nil
            $0.25
            06/08/17




50




The
following table sets forth information relating to compensation paid to our
directors in the fiscal year ended December 31, 2008:




Director
Compensation Table


Name
            Year
            Fees
              Earned
      or
              Paid
      in
              Cash
            Stock
              Awards
              ($)
            Option
              Awards
              ($)
            All
      Other
              Compensation
              ($)
            Total
              ($)Alan
      P. Lindsay
            2008
              2007
            100,000
              99,997
            Nil
              Nil
            Nil
              168,000
            Nil
              Nil
            100,000
              267,997Glynn
      Wilson
            2008
              2007
            42,000
              10,500
            Nil
              Nil
            Nil
              76,000
            Nil
              Nil
            42,000
              86,500Patrick
      A. McGowan
            2008
              2007
            34,162
              33,589
            Nil
              Nil
            Nil
              76,000
            Nil
              Nil
            34,162
              109,589




Employment,
Consulting and Services Agreements


The
following summary of certain material terms of the employment, consulting or
services agreements we have entered into with certain of our officers or
employees is not complete and is qualified in its entirety to the full text of
each such agreement, which have been filed with the SEC as described in the list
of exhibits to this annual report.




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
400,000 stock options to acquire a similar number of our common shares at an
exercise price of $0.25 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 USD per month through the term of the agreement, and
an increase providing for the granting of an aggregate of not less than 800,000
stock options to acquire a similar number of our common shares at an exercise
price of $0.25 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 than 600,000 stock options to acquire a similar number of
our common shares at an exercise price of $0.25 per share for a period of not
less than five years from the date of grant.




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 200,000  stock options to acquire a similar number of
our common shares at an exercise price of $0.25 per share for a period of not
less than five years from the date of grant.




We have a
compensation committee is comprised of Msrs Lindsay, McGowan,
Wilson.  All compensation is recommended and resolved by the
compensation committee and board of directors.




51




ITEM
      12.
            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) our Principal 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.,
Unit 2, 3590 West 41st Avenue,
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 Owner(1)
            Percent
      of ClassDirectors
      and Officers:Denis
      Corin
              Vancouver,
      British Columbia, Canada
            960,000
      (2)
            3.8%Patrick
      A. McGowan
              Vancouver,
      British Columbia, Canada
            581,432
      (3)
            2.4%Alan
      P. Lindsay
              Vancouver,
      British Columbia, Canada
            1,431,464
      (4)
            5.7%Glynn
      Wilson
              Vancouver,
      British Columbia, Canada
            400,000
      (5)
            1.6%All
      executive officers and directors as a group (4 persons)
            3,372,896
            13.6%Major
      Stockholders:Wilfred
      A. Jefferies
              12596
      23rd
      Avenue
              Vancouver,
      British Columbia, Canada
            3,951,902
      (6)
            15.5%Arasha
      Group Ltd.
              35A
      Regent Street
              Belize
      City, Belize
            1,400,000
            5.8%






52




(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
      24,149,827 shares issued and outstanding.  Beneficial ownership
      amounts reflect the reverse stock split effective June 28,
      2007.


(2)
            This
      figure includes: (i) 110,000 shares of common stock; (ii) 50,000 common
      share purchase warrants, and (iii) 800,000 options to acquire an
      equivalent number of common shares at $0.25 for 10 years
      granted.


(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.


(4)
            This
      figure includes: (i) 10,800 shares of common stock; (ii) 566,664 shares of
      common stock held by Alan Lindsay & Associates Inc.; (iii) 54,000
      common share purchase warrants, and (iv) 800,000 options to acquire an
      equivalent number of common shares at $0.25 for 10 years
      granted.


(5)
            This
      figure includes 400,000 options to acquire an equivalent number of common
      shares at $0.25 for 10 years
granted.


(6)
            This
      figure includes: (i) 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, 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.




Changes
in Control


We are
unaware of any contract, or other arrangement or provision, the operation of
which may at a subsequent date result in a change of control of our
Company.




53




ITEM
      13.
            CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
      INDEPENDENCE




Except as
described below, none of the following parties has had any material interest,
direct or indirect, in any transaction with us during our last fiscal year or in
any presently proposed transaction that has or will materially affect
us:




1.
            any
      of our directors or officers;


2.
            any
      person proposed as a nominee for election as a
  director;


3.
            any
      person who beneficially owns, directly or indirectly, shares carrying more
      than 5% of the voting rights attached to our outstanding shares of common
      stock; or


4.
            any
      member of the immediate family (including spouse, parents, children,
      siblings and in-laws) of any of the above
  persons.




We had
transactions with certain of our officers and directors during our fiscal year
ended December 31, 2008 as follows:




a)
            incurred
      $308,162 (2007 - $286,632) in management fees and recorded an additional
      $172,668 (2007 - $654,722) in stock based compensation expense for the
      fair value of options granted to management that were vested during the
      period;


b)
            incurred
      $74,579 (2007 - $167,233) in research and development fees to related
      parties, of which $28,114 (2007 - $112,313) was to the former Chief
      Science Officer and $46,466 (2007 - $54,920) was paid to a direct family
      member of a current officer;


c)
            incurred
      $16,932 (2007 - $6,625) in interest and finance charges on a $125,000
      promissory note due to a company related through a direct family member of
      a current director (refer to Note 5(ii)); incurred $27,090 (2007 - $8,022)
      in interest and finance charges on a $200,000 promissory note due to the
      same company;  and incurred $35,369 (2007 - $Nil) in interest
      and finance charges related to an agreement to issue warrants in
      connection with extending the terms of the $125,000 and $200,000 notes
      through March 30, 2009 (refer to Note
5(iii));


d)
            issued
      a $27,000 promissory note bearing interest at 18% per annum and including
      54,000 non-transferable and registerable share purchase warrants with an
      exercise price of $0.25 per share for an exercise period of up to five
      years from the issuance date to a company controlled by a director of the
      Company, incurred $3,196 (2007 - $Nil) in interest and finance charges on
      the $27,000 promissory note, and incurred $3,757 (2007 - $Nil) in interest
      and finance charges related to an agreement to issue warrants in
      connection to extending the term through March 31, 2009 (refer to Note
      5(vi));


e)
            issued
      a $200,000 promissory note bearing interest at 18% per annum and including
      400,000 non-transferable and registerable share purchase warrants with an
      exercise price of $0.25 per share for an exercise period of up to five
      years from the issuance date to a company related through a family member
      of an officer of the Company, and incurred $22,784 (2007 - $Nil) in
      interest and finance charges on the $200,000 promissory note (refer to
      Note 5(vii));


incurred
$62,620 (2007 - $Nil) in interest and finance charges related to an agreement to
issue warrants in connection to extending the terms of the $200,000 and $250,000
notes through March 30, 2009 (refer to Note 5(viii));


f)
            issued
      a $25,000 promissory note bearing interest at 18% per annum and including
      50,000 non-transferable and registerable share purchase warrants with an
      exercise price of $0.25 per share for an exercise period of up to five
      years from the issuance date to an officer of the Company, incurred $2,836
      (2007 - $Nil) in interest and finance charges on the $25,000 promissory
      note, and incurred $3,479 (2007 - $Nil) in interest and finance charges
      related to an agreement to issue warrants in connection to extending the
      term through March 30, 2009 (refer to Note
  5(ix));


issued a
$10,000 promissory note bearing interest at 18% per annum and including an
agreement to issue 200,000 transferable and registerable share purchase warrants
with an exercise price of $0.01 per share for an exercise period of up to two
years from the issuance date to the same officer of the Company, incurred $150
(2007 - $Nil) in interest and finance charges on the $10,000 promissory note,
and incurred $3,407 (2007 - $Nil) in interest and finance charges related to the
agreement to issue warrants (refer to Note 5(ix));


g)
            In
      January, 2009, bonuses in the amounts of $20,000 and $25,000 were granted
      to a director and an officer of the Company respectively as compensation
      for their work in 2008, and are recorded as due to related parties at
      December 31, 2008.




54




ITEM
14.                      PRINCIPAL
ACCOUNTING FEES AND SERVICES




Dale
Matheson Carr-Hilton LaBonte LLP served as our independent registered public
accounting firm and audited our financial statements for the fiscal years ended
December 31, 2008 and 2007.  Aggregate fees for professional services
rendered to us by our auditor are set forth below:




Year
      Ended
              December
      31, 2008
            
            
            Year
      Ended
              December
      31, 2007Audit
      Fees
            
            $
            28,000
            
            
            $
            37,500Audit
      Related Fees
            
            $
            21,100
            
            
            $
            23,950Tax
      Fees
            
            Nil
            
            
            NilAll
      Other Fees
            
            Nil
            
            
            Nil$
            49,100
            
            
            $
            61,450




Audit
Fees


Audit
fees are the aggregate fees billed for professional services rendered by our
independent auditors for the audit of our annual financial statements, the
review of the financial statements included in each of our quarterly reports and
services provided in connection with statutory and regulatory filings or
engagements.




Audit
Related Fees


Audit
related fees are the aggregate fees billed by our independent auditors for
assurance and related services that are reasonably related to the performance of
the audit or review of our financial statements and are not described in the
preceding category.




Tax
Fees


Tax fees
are billed by our independent auditors for tax compliance, tax advice and tax
planning.




All
Other Fees


All other
fees include fees billed by our independent auditors for products or services
other than as described in the immediately preceding three
categories.




Policy
on Pre-Approval of Services Performed by Independent Auditors


It is our
audit committee’s policy to pre-approve all audit and permissible non-audit
services performed by the independent auditors.  We approved all
services that our independent accountants provided to us in the past two fiscal
years.




55




ITEM
15.                      EXHIBITS




The
following exhibits are filed with this Annual Report on Form 10-K:




Exhibit
              Number
            Description
      of Exhibit31.1
            Certification
      of Principal Executive Officer pursuant to Securities Exchange Act of 1934
      Rule 13a-14(a) or 15d-14(a)31.2
            Certification
      of Acting Principal Accounting Officer pursuant to Securities Exchange Act
      of 1934 Rule 13a-14(a) or 15d-14(a)32.1
            Certification
      of Principal Executive Officer pursuant to 18 U.S.C. Section
      135032.2
            Certification
      of Acting Principal Accounting Officer pursuant to 18 U.S.C. Section
      1350















56










SIGNATURES




Pursuant
to the requirements of Section 13 and 15 (d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.




TAPIMMUNE
INC.




By:           /s/ Denis
Corin


Denis Corin


President, Chief Executive Officer
and Principal
Executive Officer


Date: May 8, 2009




By:          /s/ Patrick
McGowan


Patrick A. McGowan


Secretary, Treasurer and Chief
Financial Officer,Acting Principal Accounting Officer and a
director


Date: May 8, 2009




Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.




By:           /s/ Alan P.
Lindsay


Alan P. Lindsay


A director


Date: May 8, 2009




By:           /s/ Glynn
Wilson


Glynn Wilson


A director


Date: May 8, 2009