The following securities, rounded to the thousand, were not included in the diluted net loss per share calculation because their effect was anti-dilutive for the periods presented:

Note 6: Research Agreement OBLIGATIONS

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

In 2003 and further amended in 2008, the Company acquired a research license and option agreement from Crucell Holland B.V. for use of an adenovirus technology. The Company has not made use of the technology in its current work and has not asked for nor received any work product from Crucell. Crucell was acquired by Johnson and Johnson in 2010.

As of December 31, 2016, the Company had accrued $0.5 million under the amended agreement.

Upon further third-party Netherlands legal review and analysis of the agreement undertaken during the year, it was concluded that based upon Dutch law, the statute of limitations has run out on the obligation, and a legal opinion received by the Company confirms the amounts are not currently owed. As such, as of September 30, 2017, the Company was no longer obligated to make the payments under the agreement and therefore, the Company recorded a debt extinguishment gain of $0.5 million and reduced the liability amount owed to $0 during the nine-month period ended September 30, 2017.

Note 7: WARRANT LIABILITY AND FAIR VALUE MEASUREMENTS

A summary of quantitative information with respect to valuation methodology and significant unobservable inputs used for the Company’s common stock purchase warrants that are categorized within Level 3 of the fair value hierarchy for the nine months endedat September 30, 2017 and December 31, 2016 and 2015 is as follows:

The foregoing assumptions are reviewed quarterly and are subject to change based primarily on management’s assessment of the probability of the events described occurring. Accordingly, changes to these assessments could materially affect the valuations.

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

Financial liabilities measured at fair value on a recurring basis are summarized below and disclosed on the balance sheet under Warrant liability:

The fair value accounting standards define fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is determined based upon assumptions that market participants would use in pricing an asset or liability. Fair value measurements are rated on a three-tier hierarchy as follows:

Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the balance sheet under Derivative liability – warrants:

There were no transfers between Level 1, 2 or 3 during the nine months ended September 30, 2016.2017.

The following table presents changes in Level 3 liabilities measured at fair value for the nine months ended September 30, 2016:2017:

Note 8: Promissory note

At September 30, 2017 and December 31, 2016, the Company had an outstanding promissory note in the amount of $5,000. The promissory note outstanding and due at September 30, 2017 bears 10% annual interest.

Note 9: STOCKHOLDERS’ EQUITY

2017 Common Stock Transactions

Warrant Amendment

June 2017 Private Placement Transaction

On August 10, 2016,June 26, 2017, the Company and holderscompleted private placement of an aggregate of 3,096,665 outstanding Series A Warrants, Series A-1 Warrants, Series C Warrants, Series C-1 Warrants, Series D Warrants, Series D-1 Warrants, Series E Warrants and Series E-1 Warrants entered into warrant amendment agreements (the “Amended Warrants”) in which they agreed to amendunits with certain accredited investors. In the terms of the outstanding series warrants to remove provisions that had previously precluded equity classification treatment on the Company’s balance sheets.

In consideration for such amendment and the exercise of the Series C Warrants and Series C-1 Warrants,private placement transaction, the Company issued an aggregate of 750,000 additionalsold 1,503,567 shares of common stock to such warrant holdersfor $3.97 per share and new five-year warrants to purchase 1,000,000an equal number of shares of Company common stock, at an exercise price of $7.20$3.97 per share.share, for $0.125 per warrant, with one common share and one warrant being sold together as a unit for a total of $4.095 per unit. The valueCompany issued and sold an aggregate of 1,503,567 million units for aggregate gross proceeds of $6.2 million. The Company incurred $0.8 million in agency fees and legal costs. In connection with the offering, the Company reduced the exercise price for the warrants to purchase an aggregate of 653,187 shares of common stock issued to investors in the private placement that closed in August 2016 from $6.00 per share to $3.97 per share.

In addition, the Company issued five-year warrants to the placement agent in the offering providing for the purchase of up to 150,357 shares of Company common stock for $3.97 per share.

Pursuant to a Registration Rights Agreement to be entered into at the closing of the private placement offering, promptly, but no later than 90 calendar days after the closing of the offering, the Company is required to file a registration statement with the Securities and Exchange Commission registering for resale (a) the common stock issued in the offering; (b) the shares of common stock issuable upon the exercise of the private placement warrants; and fair value(c) the shares of common stock issuable upon the exercise of the warrants issued to Katalyst Securities LLC, which acted as placement agent for the offering. The Company is required to use its commercially reasonable efforts to ensure that the Registration Statement is declared effective within 90 calendar days after filing with the Securities and Exchange Commission, on or before December 23, 2017.

In accordance with the registration rights agreements, should the Company fail to meet the above criteria, the Company is subject to pay the investors liquidated damages. The liquidated damages shall be a cash sum payment calculated at a rate of ten percent (10%) per annum of the aggregate purchase price for the registrable securities or aggregate amount upon exercise of the placement agent warrants.

In accordance with U.S. GAAP, a contingent obligation to make future payments must be recorded if the transfer of consideration under a registration payment arrangement is probable and can be reasonably estimated. The Company has determined that should it be required to pay liquidated damages to the investors of the private placements, the aggregate contingent liability it would be required to record would be approximately $57,000 per month for each month it fails or is estimated to fail to meet the above criteria.

At the June 26, 2017 private placement closing, and on September 30, 2017, the Company concluded that it is not probable that it will be required to remit any payments to the investors for failing to obtain an effective registration statement or failing to maintain its effectiveness.

June 2017 Exercise and Repricing of Warrants Held by Existing Institutional Investors

On June 23, 2017, certain existing institutional shareholders of the Company who hold various outstanding warrants (i.e. C, D, E and F) to purchase Company common stock, entered into warrant repricing and exercise agreements.

Series E repriced and exercised warrants

Approximately 168,000 of Series E warrants were repriced from $15.00 per share to $3.97 per share and exercised immediately for gross proceeds of approximately $0.7 million. Series E warrants to purchase approximately 187,000 shares of Company common stock being reduced from $15.00 per share to $4.50 per share.

Series C, D & F repriced warrants

Additionally, the exercise prices for certain investors of Series C, Series D and Series F warrants were reduced as follows:

The fair value relating to the modification of exercise prices on the repriced warrants was treated as deemed dividend on the statement of stockholders’ equity of $4.5$0.6 million.

The fair valueA weighted average summary of quantitative information with respect to valuation methodology and significant unobservable inputs used for the Amended Warrants was re-measured immediately prior to the date of amendment with changes in fair value recorded as a gain of $556,000Company’s common stock purchase warrants that are included in the statement of operations and $15.5 million was reclassified to equity.modification is as follows:

2017 Management Compensation

On March 9, 2017, the Company issued 12,761 shares of stock in relation to the discretionary 2016 bonus awarded to Dr. Glynn Wilson. The fair value of the common stock of $55,000 was recognized as stock-based compensation in general and administrative expenses. The issuance was based on the closing price or our common stock of $4.31 per share, on the day immediately preceding the date the 2016 bonus award was approved by the Board of Directors.

On March 9, 2017, the Company issued 5,220 shares of stock in relation to the discretionary 2016 bonus awarded to our former Chief Operating Officer. The fair value of the common stock of $22,500 was recognized as stock-based compensation in general and administrative expenses. The issuance was based on the closing price or our common stock of $4.31 per share, on the day immediately preceding the date the 2016 bonus award was approved by the Board of Directors.

On September 22, 2017, the Company entered into an employment agreement with Peter Hoang, the Company’s Chief Executive Officer. As part of the agreement, the Company granted Mr. Hoang 250,000 shares of unregistered, fully vested restricted common stock. The Company recorded $0.8 million of stock-based compensation based on the fair value of the common stock at September 22, 2017. 70,289 shares of common stock, with a fair value of $0.2 million, were withheld (at the closing price of the Company's common stock on the NASDAQ Capital Market on September 22, 2017) to satisfy certain payroll liabilities, as applicable to the award.

On September 22, 2017, the Company entered into an amended employment agreement with Dr. Glynn Wilson, the Company’s continuing Chairman to serve as the Company’s Strategic Advisor. As part of the agreement, the Company granted Dr. Wilson 100,000 shares of unregistered, fully vested restricted common stock. The Company recorded $0.3 million of stock-based compensation based on the fair value of the common stock at September 22, 2017. 27,350 shares of common stock, with a fair value of $0.1 million, were withheld (at the closing price of the Company's common stock on the NASDAQ Capital Market on September 22, 2017) to satisfy certain payroll liabilities, as applicable to the award.

Consulting Arrangements

During the nine months ended September 30, 2017, the Company issued 0.1 million shares of common stock as part of consulting agreements. The fair value of the common stock of $0.4 million was recognized as stock-based compensation in general and administrative expenses.

Note 10: STOCK-BASED COMPENSATION

The following table summarizes the componentsCompany recorded $1.7 million and $0.8 million of stock-based compensation expense for the three months ended September 30, 2017 and 2016, respectively. The Company recorded $2.3 million and $1.3 million of stock-based compensation expense for the nine months ended September 30, 2017 and 2016, respectively. Stock-based compensation expense is included in general and administrative expense on the condensed consolidated statements of operations for the three and nine months endedoperations.

At September 30, 2016 and 2015, respectively:

Stock Options

A summary of2017, the Company’s stock option activity is as follows:

Totaltotal stock-based compensation cost related to unvested awards not yet recognized and thewas $0.5 million. The expected weighted average periods over which the awards are expectedperiod compensation costs to be recognized as of September 30, 2016 are as follows:was 0.62 years.

Future option grants will impact the compensation expense recognized.

At September 30, 2016, the Company had an outstanding promissory note in the amount of $5,000 as compared to two outstanding promissory notes totaling $30,000 at December 31, 2015. The promissory note outstanding at September 30, 2016 bears 10% annual interest.Note 11: GRANT INCOME

During the nine months ended September 30, 2016, the Company paid a $25,000 promissory note2017 and $6,524 of accrued interest in final settlement.

At December 31, 2015, the Company had an outstanding promissory note in the amount of $23,000 owed to an officer of the Company. The promissory note bore no interest charges and had no fixed repayment terms. In September 2016, the note was paid in full.

Reverse Stock Split

Effective September 16, 2016, the Company effected a one for twelve reverse stock-split of our issued and outstanding common stock and has retroactively adjusted our common shares outstanding, options and warrants amounts outstanding. The Company has presented its share data for and as of all periods presented on this basis. The par value was not adjusted as a result of the one for twelve reverse stock split. All prior period share transactions included in the Company’s stock transactions and balances have been retroactively restated.

2016 Common Stock Transactions

Private placements

On August 10, 2016 and August 25, 2016, the Company completed private placements of units with certain accredited investors. The units consisted of (i) one share of the Company’s common stock, par value $0.001 per share and (ii) one five-year warrant to purchase one share of Company common stock for $6.00. The Company issued and sold an aggregate of 653,166 units at a purchase price per unit of $4.80 for an aggregate of approximately $3.1 million. The Company incurred approximately $0.8 million in agency fees and legal costs.

In addition, the Company issued five-year warrants to the placement agent in the offering providing for the purchase of up to 65,317 shares of Company common stock for $4.80 per share.

Pursuant to the registration rights agreements entered into in connection with the private placements, the Company is required to file a registration statement with the Securities and Exchange Commission registering for resale (a) the common stock issued in the private placement offering; (b) the shares of common stock issuable upon the exercise of the five-year warrants; and (c) the shares of common stock issuable upon the exercise of the warrants issued to the placement agent. The Company is required to file the registration statement within 120 days of the August 10, 2016 closing or by December 8, 2016. The Company is also required to ensure that the registration statement is declared effective within 90 calendar days after filing with the Securities and Exchange Commission, or by March 8, 2017.

In accordance with the registration rights agreements, should the Company fail to meet the above criteria, the Company is subject to pay the investors liquidated damages. The liquidated damages shall be a cash sum payment calculated at a rate of ten percent (10%) per annum of the aggregate purchase price for the registrable securities or aggregate amount upon exercise of the placement agent warrants.

In accordance with applicable U.S. generally accepted accounting principles, a contingent obligation to make future payments must be recorded if the transfer of consideration under a registration payment arrangement is probable and can be reasonably estimated. The Company has determined that should it be required to pay liquidated damages to the investors of the private placements, the aggregate contingent liability it would be required to record would be approximately $29,000 per month for each month it fails or is estimated to fail to meet the above criteria.

At the August 10, 2016 and August 26,2016 private placement closings, and on September 30, 2016, the Company concluded that it is not probable that it will be required to remit any payments to the investors for failing to obtain an effective registration statement or failing to maintain its effectiveness.

Warrant Amendment Transaction

On August 10, 2016, the Company and holders of an aggregate of 3,096,665 outstanding Series A Warrants, Series A-1 Warrants, Series C Warrants, Series C-1 Warrants, Series D Warrants, Series D-1 Warrants, Series E Warrants and Series E-1 Warrants entered into warrant amendment agreements (the “Amended Warrants”) in which they agreed to amend the terms of the outstanding series warrants to remove provisions that had previously precluded equity classification treatment on the Company’s balance sheets.

In consideration for such amendment and the exercise of the Series C Warrants and Series C-1 Warrants, the Company issued an aggregate of 750,000 additional shares of common stock to such warrant holders and new five-year warrants to purchase 1,000,000 shares of Company common stock at an exercise price of $7.20 per share. The value of the shares and fair value of the warrants was treated as dividend on the statement of stockholders’ equity of $4.5 million.

Share Purchase Warrants

A summary of the Company’s share purchase warrants as of September 30, 2016 and changes during the period is presented below:

Consulting Arrangements

During the nine months ended September 30, 2016, the Company issued 60,000 common shares as part of consulting agreements. The fair value of the common stock of approximately $414,000 was recognized as stock-based compensation in general and administrative expense.

Debt Settlement

In May 2016, the Company issued 10,191 common shares as part of debt conversion agreements from 2014. The fair value of the common stock of approximately $70,000 was recognized as loss on debt settlement agreements in other income (expense).

In September 2016, the Company paid $27,000 for a promissory note from 2008 and related $38,000 of accrued interest. The $65,000 payment was recognized as loss on debt settlement agreements in other income (expense).

During the nine months ended September 30, 2016, the Company received approximately $231,000$0.2 million of a grant awarded to Mayo Foundation from the U.S. Department of Defense for the Phase II Clinical Trial of TPIV 200.TPIV200. The grant paidcompensated the Company for clinical supplies manufactured and provided by the Company for the clinical supplies purchased by the Company.study.

Note 12: CONTINGENCIES AND COMMITMENTS

Employment Agreements

In November 2015,On September 22, 2017, the Company entered into an employment agreement with Dr. Glynn Wilson, the Company’s Chief Executive Officer, President and Chairman of the Company. As part of the agreement, Dr. Wilson was awarded 19,018 fully vested common shares in March 2016. The fair value of the common stock of approximately $146,000 was recognized as stock-based compensation in general and administrative expense.

In July, 2016, the Company entered into an employment agreement with Dr. John Bonfiglio relating to his appointmentappointed Peter Hoang as the Company’s President and Chief OperatingExecutive Officer. As part of the agreement, Dr. Bonfiglio was awarded 20,833 common shares, which will vest upon the earlier of (i) the listing of the Company’s common stock on a national securities exchange in the United States or (ii) the first anniversary of the employment agreement, so long as Dr. Bonfiglio is employed with the Company. The fair value of the common stock of approximately $103,000 was recognized as stock-based compensation in general and administrative expense.

In August 2016, the Company appointed Michael Loiacono as the Company’s Chief Financial Officer, Chief Accounting Officer, Secretary and Treasurer. In connection with Mr. Loiacono’sHoang’s appointment, he entered into an employment agreement with the Company. The employment agreement provides that Mr. Loiacono’sHoang’s base salary will be $200,000$362,500 per year and he is eligible for an annual performance bonus of up to 50% of his base salary. In addition, on the first anniversary of the employment agreement, Mr. Hoang will be eligible to receive a grant of stock options to purchase the number of shares of common stock equal to one percent of the then-outstanding common stock of the Company. The term of the employment agreement is for twothree years and will be automatically extended for an additional 12 months unless terminated by Mr. LoiaconoHoang or the Company.

On September 22, 2017, the Company entered into an amended employment agreement with Dr. Glynn Wilson, the Company’s Strategic Advisor. The amended employment agreement provides that Dr. Wilson’s base salary will be $205,000 per year and he is eligible for an annual performance bonus of up to 50% of his base salary. In addition, upon the first anniversary of the execution of amendment employment agreement, Dr. Wilson will be eligible to receive an additional grant of restricted common stock equal to $300,000. The term of the employment agreement is through December 31, 2018.

This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended, that involve risks and uncertainties. All statements other than statements relating to historical matters including statements to the effect that we “believe”, “expect”, “anticipate”, “plan”, “target”, “intend” and similar expressions should be considered forward-looking statements. Our actual results could differ materially from those discussed in the forward-looking statements as a result of a number of important factors, including factors discussed in this section and elsewhere in this quarterly report on Form 10-Q, and the risks discussed in our other filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis, judgment, belief or expectation only as the date hereof. We assume no obligation to update these forward-looking statements to reflect events or circumstance that arise after the date hereof.

As used in this quarterly report: (i) the terms “we”, “us”, “our”, “TapImmune” and the “Company” mean TapImmune Inc. and its wholly owned subsidiary, GeneMax Pharmaceuticals Inc. which wholly owns GeneMax Pharmaceuticals Canada Inc., unless the context otherwise requires; (ii) “SEC” refers to the Securities and Exchange Commission; (iii) “Securities Act” refers to the Securities Act of 1933, as amended; (iv) “Exchange Act” refers to the Securities Exchange Act of 1934, as amended; and (v) all dollar amounts refer to United States dollars unless otherwise indicated.

The following should be read in conjunction with our unaudited condensed consolidated interim financial statements and related notes for the three and nine months ended September 30, 20162017 included in this quarterly report, as well as our Annual Report on Form 10-K for the year ended December 31, 2015.2016 filed on March 14, 2017.

Company Overview

Our Cancer Vaccines

We are a clinical-stage immuno-oncology company specializing in the development of innovative peptide and gene-based immunotherapeutics and vaccines for the treatment of cancer &and metastatic disease. We are alsoactively advancing our clinical programs by expanding our Folate Receptor Alpha program (TPIV200) for breast and ovarian cancers and our HER2/neu peptide antigen program (TPIV110) in Phase II clinical trials. In parallel, we are developing a proprietary DNA expression technology named PolyStart™ to improve the ability of the cellular immune system to recognize and destroy diseased cells. This DNA expression technology named Polystart is in preclinical development.

To enhance shareholder value and taking into account development timelines, we plan to focus on advancing our clinical programs including our Folate Receptor Alpha program for breast and ovarian cancer and our HER2/neu peptide antigen program into Phase II clinical trials. In parallel, weWe plan to complete the preclinicalpre-clinical development of our Polystart technologyPolyStart™ vaccine and move it into the clinic as an integral component of our prime-and-boosta prime-boost vaccine methodology.

The Immunotherapy Industry

We are a leader in the development of novel immunotherapies for Cancercancer, with multiple Phase 2 and Phase 1b/2 clinical studies currently ongoing for the treatment of ovarian and breast cancer. Our peptide- or nucleic acid-based immunotherapeutic products comprise multiple naturally processed epitopes (NPEs) designed to comprehensively stimulate a patient's killer T-cells and helper T-cells, and to restore or further augment antigen presentation by using proprietary nucleic acid-based expression systems. This unique approach can produce off-the-shelf T-cell vaccine candidates that elicit a broad-based T-cell response and can be given without respect to HLA type. Our technologies may be used as stand-alone medications or in combination with other treatment modalities.

Immuno-oncology has become the most rapidly growing sector in the pharmaceutical and biotech industry. The approval and success of checkpoint inhibitors, Yervoyincluding ipilimumab and Opdivo (Bristolnivolumab (Yervoy® and Opdivo®, respectively, Bristol Myers Squibb) and Keytruda (Merck, pembrolizumab (Keytruda®, Merck & Co.), avelumab (Bavencio®, EMD Serono), durvalumab (Imfinzi™, AstraZeneca), and atezolizumab (Tecentriq®, Genentech), together with the development and approval of CAR T-cell therapies (Junosponsored by Novartis, Juno Therapeutics, and Kite Pharma)Pharma, has provided much momentum in this sector. In addition, new evidence points to the increasing use of combination immunotherapies for the treatment of cancer. This has provided greater justification and opportunities for the successful development of T-cell vaccines in combination with other approaches.

Products and Technology in Development-Clinical

Phase I Human Clinical Trials –Folate Alpha Breast and Ovarian Cancer – Mayo Clinic

Folate Receptor Alpha is expressed in over 80% of triple negative breast cancers and in addition, over 90% of ovarian cancers, for which the only treatment options are surgery, radiation and chemotherapy, leaving a very important and urgent clinical need for a new therapeutic. Time to recurrence is relatively short for these types of cancer and survival prognosis is extremely poor after recurrence. In the United States alone, there are approximately 30,000 ovarian cancer patients and 40,000 triple negative breast cancer patients newly diagnosed every year.

TPIV 200 Folate Receptor Alpha

A 24 patient Phase I clinical trial has been completed. The vaccine is well tolerated and safe and 20 out of 21 evaluable patients showed positive immune responses providing a strong rationale rational for progressing to phase II trials. GMP manufacturing for Phase II trials is progressing well towards a commercial formulation and final analyses of clinical plans are near completion. On July 27, 2015,TapImmune exercised its option agreement with Mayo Clinic with the signing of a worldwide exclusive license agreement to commercialize a proprietary folate receptor alpha vaccine technology for all cancer indications. As part of this Agreement, the IND for the folate receptor alpha Phase I trial was transferred from Mayo to TapImmune for amendment for the Company’s Phase II Clinical Trialson our lead product.

On September 15, 2015, we announced that our collaborators at the Mayo Clinic had been awarded a grant of $13.3 million from the U.S. Department of Defense. This grant, commencing September 15, 2015, will cover the costs for a 280 patient Phase II Clinical Trial of Folate Receptor Alpha Vaccine in patients with Triple Negative Breast Cancer.TapImmune will work closely with Mayo Clinic on this clinical trial by providing clinical and manufacturing expertise as well as providing GMP vaccine formulations. These vaccine formulations are being developed for multiple Phase II clinical programs in triple negative breast and ovarian cancer in combination with other immunotherapeutics.

On December 9, 2015, we announced that we received Orphan Drug Designation fromMay 23, 2017, the U.S. Food &and Drug Administration’s OfficeAdministration (“FDA”) approved expanded use of Orphan Products Development (OOPD)Keytruda for ourimmunotherapy. The FDA granted accelerated approval to a treatment for patients whose cancers have a specific genetic feature (biomarker). This is the first time the FDA has approved a cancer vaccine TPIV 200treatment based on a common biomarker rather than the location in the treatment of ovarian cancer. The TPIV 200 ovarian cancer clinical program will now receive benefits including tax credits on clinical research and 7-year market exclusivity upon receiving marketing approval. TPIV 200 is a multi-epitope peptide vaccine that targets Folate Receptor Alpha which is overexpressed in multiple cancers.

On February 3, 2016 we announced thatbody where the U.S. Food & Drug Administration (FDA) has designated the investigation of multiple-epitope Folate Receptor Alpha Peptide Vaccine (TPIV 200) with GM-CSF adjuvant for maintenance therapy in subjects with platinum-sensitive advanced ovarian cancer who achieved stable disease or partial response following completion of standard of care chemotherapy, as a Fast Track Development Program. A Phase 2 study in this indication is being readied for initiation by the end of 2016.

We are currently enrolling a Company sponsored triple negative breast cancer study at 8 clinical sites nation-wide. The study will enroll 80 patients. It is open-label and designed to look at dosing regimens, immune responses and efficacy.

The Company also announced the start of an ovarian cancer study sponsored by Memorial Sloan Kettering Cancer Center in New York City in collaboration with Astra Zeneca Pharmaceuticals. This study is currently enrolling platinum resistant ovarian cancer patients and is designed to look at the effects of combination therapy with Astra Zeneca’s checkpoint inhibitor durvalamab. The study will enroll 40 patients and is open label. Although we have no business relationship with Astra Zeneca, we are paying for half of the clinical study plus providing our TPIV 200 for the study.

Phase I Human Clinical Trials – HER2/neu+ Breast Cancer – Mayo Clinic

Patient dosing has been completed. Final safety analysis on all the patients treated is complete and shown to be safe. In addition, 19 out of 20 evaluable patients showed robust T-cell immune responses to the antigens in the vaccine composition providing a solid case for advancement to Phase II in 2015. An additional secondary endpoint incorporated into this Phase I Trial will be a two year follow on recording time to disease recurrence in the participating breast cancer patients.

For Phase I(b)/II studies, we plan to add a Class I peptide, licensed from the Mayo Clinic (April 16, 2012), to the four Class II peptides. Management believes that the combination of Class I and Class II HER2/neu antigens, gives us the leading HER2/neu vaccine platform. As the folate receptor alpha vaccine is our lead product our plans are now initiating formulation studies to progress the HER2/neu vaccine towards a Phase II Clinical Trial in 2017.

Products and Technology-Preclinical

Polystart

We converted the previously filed U.S. Provisional Patent Application on Polystart into a full Patent Application, and in February 2016 we received a Notice of Allowance from the U.S. Patent and Trademark Office (USPTO) for a patent application entitled, “A chimeric nucleic acid molecule with non-AUG initiation sequences.” The term of this patent extends to March 17, 2034. Additional patent filings are in progress. We plan to develop PolyStart as both a stand-alone therapy and as a ‘boost strategy’ to be used synergistically with our peptide-based vaccines for breast and ovarian cancer.

Current State of the Company

We are a clinical-stage immunotherapy company specializing in the development of innovative peptide and gene-based immunotherapeutics and vaccines for the treatment of cancer. We now plan to conduct multiple Phase II clinical trials on our vaccines. The largest of these studies in triple-negative breast cancer is totally funded by a $13.3 million grant from the U.S. Department of Defense to our collaborators at the Mayo Clinic in Jacksonville, Florida. A Company-sponsored trial in triple negative breast cancer started during the second quarter of 2016 with recruitment at multiple sites and treatment of first patients. We believe that our development pipeline is strong and provides us the opportunity to continue to expand on collaborations with leading institutions and corporations.tumor originated.

We believe the strength of our science and development approaches is becoming more widely appreciated, particularly as our clinical program has now generated positive interimPhase I data on bothusing our two products in clinical programs in Breastbreast and Ovarian Cancer.ovarian cancers.

We continue to be focusedfocus primarily on our entry into Phase II Triple Negative Cancer Trials including application fortriple-negative breast cancer trials using TPIV200 (which has achieved Fast Track &and Orphan Drug Status as well asStatus), and are planning for the next Phase II HER2/neu Breast Cancer Trials.breast cancer trial.

We expect to continue to prosecute our PolyStartPolyStart™ patent filings and develop new PolyStart™ constructs to facilitate collaborative efforts in our current clinical indications. We will also evaluate those indications and those where others have already indicated interest in combination therapies.

We believe that these fundamental programs and corporate activities have positioned TapImmuneour company to capitalize on the acceptance of immunotherapy as a leading therapeutic strategy in cancer and infectious disease.

TapImmune’s Pipeline

Clinical Program

diseases.

We are continuously working on improving our product formulation and supply. TPIV200 and TPIV110 are both off-the-shelf, lyophilized products that only require reconstitution and mixing with GM-CSF at the clinical site before injection. We believe our off-the-shelf product may provide a significant competitive advantage over autologous products that require preparation for each patient. We also believe the investments we have a pipeline of potential immunotherapies under development.made in the formulation work for both very stable products will result in commercially viable products consistent with typically high pharmaceutical profit margins.

The Phase I clinical programs on HER2/neudata produced for breastboth TPIV200 and ovarian cancerTPIV100 in collaboration with the Mayo Clinic are the driving force behind the high-value collaborations we have been completedestablished and strong immune responses in over 90%maintained with organizations such as Mayo Clinic, AstraZeneca, Memorial Sloan Kettering, and the U.S. Department of patients treated has provided the rationale and catalyst to advance these programs toDefense. As we move forward into advanced Phase II clinical trials.studies, some of which incorporate collaborations with prestigious third-party organizations, we believe they will represent further independent validation of the potential of our technology.

In addition to the exciting clinical developments, our peptide vaccine technology may be coupled with our recently developed in-house Polystart nucleic acid-based technology designed to make vaccines significantly more effective by producing four times the required peptides for the immune systems to recognize and act on. Our nucleic acid-based systems can also incorporate “TAP” which stands for Transporter associated with Antigen Presentation.Intellectual Property Strategies

A key component to success is having a comprehensive patent strategy that continually updates and extends patent coverage for key products. It is highly unlikely that early patents will extend through ultimate product marketing, so extending patent life is an important strategy for ensuring product protection.

We have three active patent families that we are supporting:

1. Filed patents on PolyStartthe PolyStart™ expression vector (owned by TapImmune and filed in 2014: this IP covers the use with TAP). The CompanyWe announced the allowance of this patent in February 2016.

2. Filed patents on HER2/neu Class II and Class I antigens: exclusive license from Mayo Foundation; and

3. Filed patents on Folate Receptor Alpha antigens: exclusive license from Mayo Foundation

While doing the pathwaystudies on the path to successful product development takes time, we believe we have put together a team that can deliver the highest quality data in place significant for success.the least amount of time. The strength of our product pipeline and access to leading scientists and institutions gives us a unique opportunity to make a major contribution to global health care.

With respect to the broader market, a major driver and positive influence on our activities has been the emergence and general acceptance of the potential of a new generation of immunotherapies that promise to change the standard of care for cancer. The immunotherapy sector has been greatly stimulated by the approval of Provenge® for prostate cancer and Yervoy™ for metastatic melanoma, progression of the areas of immune checkpoint inhibitors and adoptive T-cell therapy, andas well as multiple other approaches reaching Phase II and Phase III status.

We believe that through our combination of technologies, we are well positioned to be a leading player in this emerging market. It is important to note that many of the late stagelate-stage immunotherapies currently in development do not represent competition to our programs, but instead offer synergistic opportunities to partner our antigen basedantigen-based immunotherapeutics and Polystartthe PolyStart™ expression system. Thus, the use of naturally processed T-cell antigens discovered using samples derived from cancer patients, plus our PolystartPolyStart™ expression technology to improve antigen presentation to T-cells, could not only produce an effective cancer vaccine in its own right, but could also to enhance the efficacy of other immunotherapy approaches such as CAR-T and PD1 inhibitors for example.checkpoint inhibitors.

Products and Company HighlightsTechnology in Development-Clinical

Research ProgramsTPIV200

Her2neu License Agreement

Phase I Human Clinical Trials –Folate Alpha Breast and Ovarian Cancers – Mayo Clinic

Folate Receptor Alpha is expressed in over 80% of triple-negative breast cancers and in over 90% of ovarian cancers, for which the only treatment options are surgery, radiation therapy, and chemotherapy, leaving a very important and urgent clinical need for a new therapeutic option. Time to recurrence is relatively short for these types of cancer and survival prognosis is extremely poor after recurrence. In the United States alone, there are approximately 30,000 ovarian cancer patients and 40,000 triple-negative breast cancer patients newly diagnosed every year.

A 22-patient Phase I clinical trial using TPIV200 was completed in 2015. The vaccine is well tolerated and safe and 20 out of 21 evaluable patients showed positive immune responses, which provided a strong rationale for progressing to Phase II trials. Good Manufacturing Practice (“GMP”) for Phase II trials resulted in a commercially viable formulation. On June 7, 2016 we announced thatJuly 27, 2015, we exercised our option agreement with Mayo Clinic and signedwith the signing of a worldwide exclusive license agreement to a proprietary HER2neu vaccine technology. The license gives us the right to develop and commercialize the proprietary Folate Receptor Alpha Vaccine technology in anyfor all cancer indication in whichindications. As part of this Agreement, the Her2neu antigen is overexpressed.

investigational new drug application (“IND”) for Folate Receptor Alpha (“TPIV200”) was transferred from Mayo Clinic to us for amendment to support our Phase II Trials StartedClinical trials on our lead product.

On April 26,September 15, 2015, we announced that our collaborators at the Mayo Clinic had been awarded a grant of $13.3 million from the U.S. Department of Defense (“DOD”). This grant, commencing September 15, 2015, covers the costs for a 280-patient Phase II clinical trial of Folate Receptor Alpha vaccine in patients with triple-negative breast cancer. We are working closely with Mayo Clinic on this clinical trial by providing clinical and manufacturing expertise as well as providing GMP vaccines to supply the study. The vaccine formulation is suitable for multiple Phase II clinical programs in triple-negative breast and ovarian cancers in combination with other immunotherapeutics.

On December 9, 2015, we announced that we received Orphan Drug Designation from the U.S. Food & Drug Administration’s Office of Orphan Products Development (“OOPD”) for our cancer vaccine TPIV200 in the treatment of ovarian cancer. The TPIV200 ovarian cancer clinical program will now receive benefits including tax credits on clinical research and seven-year market exclusivity upon receiving marketing approval. TPIV200 is a multi-epitope peptide vaccine that targets Folate Receptor Alpha, which is overexpressed in multiple cancers.

On February 3, 2016, we announced plans to participatethat the U.S. Food & Drug Administration (“FDA”) has designated the investigation of TPIV200 with GM-CSF adjuvant for maintenance therapy in subjects with platinum-sensitive advanced ovarian cancer who achieved stable disease or partial response following completion of standard of care chemotherapy, as a Fast Track Development Program. A Phase 2 trialII study in this indication was initiated at the end of our2016.

We are currently completing a Company-sponsored triple-negative breast cancer vaccine, TPIV 200, a multi-epitope anti-folate receptor vaccine (FRα), in combination with durvalumab (MEDI4736), an anti-PD-L1 antibody, in patients with platinum-resistant ovarian cancer.study at twelve clinical sites nation-wide. The study started with the enrollmentwill enroll a total of 80 patients. It is open-label and treatment of patients in the second quarter of 2016designed to look at dosing regimens, immune responses, and efficacy.

An ovarian cancer study sponsored by Memorial Sloan Kettering Cancer Center in New York City in collaboration with AstraZeneca Pharmaceuticals was initiated in 2016. This study is currently enrolling platinum-resistant ovarian cancer patients and is being led by Jason Konner, M.D.designed to look at the effects of combination therapy with AstraZeneca’s checkpoint inhibitor durvalumab, which was recently licensed as Principal Investigator. On June 21, 2016,IMFINZI™ for bladder cancer. The study will enroll up to 40 patients and is open label. We have no business relationship with AstraZeneca and we announced the treatmentare paying for half of the first patient in a company-sponsored Phase II trial in triple negative breast cancer as part of a multi-centerclinical study, plus providing TPIV200 for the study.

Manufacturing

On April 7, 2016, we announced that we have successfully completed formulation development, scale-up, GMP (Good Manufacturing Practice) manufacturing, and the release of TPIV 200, our multi-epitope folate receptor peptide vaccine for breast andFinally, a Company-sponsored Phase II study in platinum-sensitive ovarian cancer. The manufactured product contains five peptide antigens freeze driedcancer patients was recently initiated. This study is designed to evaluate TPIV200 with GM-CSF in a single vial, readyrandomized, placebo-controlled fashion during the first maintenance period after primary surgery and chemotherapy. Patients at this stage of their treatment have the highest potential for injection after reconstitutionan immunotherapeutic effect and additionno other approved treatment options. The study will enroll up to 120 patients over the next year and a half, with an interim analysis planned in the first quarter of granulocyte-macrophage colony-stimulating factor (GM-CSF). TPIV 200 doses are now available for the upcoming Phase II clinical trials in both triple negative breast cancer and ovarian cancer.2019.

TPIV 100/110

Phase I Human Clinical Trials – HER2/neu+ Breast Cancer – Mayo Clinic

A Phase I study using TPIV100 (the four-peptide product) was completed in 2015. Final safety analysis on all the patients treated is complete and the product was shown to be safe. In addition, 19 out of 20 evaluable patients showed robust T-cell immune responses to the antigens in the vaccine composition, providing a solid case for advancement to Phase II in 2017. An additional secondary endpoint incorporated into this Phase I Trial was a two-year follow on recording time to disease recurrence in the participating breast cancer patients. This data is being submitted for publication in a peer-reviewed journal.

For Phase I(b)/II studies, we plan to add a Class I peptide, licensed from the Mayo Clinic (April 16, 2012), to the four Class II peptides, producing TPIV110 (the five-peptide product). Management believes that the combination of Class I and Class II HER2/neu antigens, gives us the leading HER2/neu vaccine platform. We plan to amend the IND to incorporate the fifth peptide in the Phase I(b)/II study. Discussions with the FDA have resulted in a pre-clinical development project that should allow us to file the amended IND in 2017.

Products and Technology-Pre-clinical

PolyStart™

On February 7, 2017, we announced that we received a Notice of Allowance from the U.S. Patent and Trademark Office of our patent application titled, “Chimeric nucleic acid molecules with non-AUG initiation sequences and uses thereof,” which represents our first patent on our PolyStart™ program. We anticipate additional patent filings in connection with our research and development in this area. We plan to develop PolyStart™ primarily as a ‘boost strategy’ to be used synergistically with our peptide-based vaccines for breast and ovarian cancers.

TapImmune’s Clinical Program Pipeline

(Refer to the “Clinical Program Pipeline Status Updates” section below for latest updates on above clinical pipeline chart).

In addition to the exciting clinical developments, our peptide vaccine technology may be coupled with our recently developed in-house PolyStart™ nucleic acid-based technology, which is designed to make vaccines significantly more effective by producing four times the required peptides for the immune systems to recognize and act on.

Recent Developments and Updates

Completed GMP Manufacturing Scale Up and Second Clinical Lot of TPIV200; to Supply Additional Phase II Clinical Trials

We successfully completed a multi-gram production scale-up as well as GMP manufacturing of a second clinical lot of TPIV200. The vaccine supply will be used in the company’s ongoing Phase II study in platinum-sensitive ovarian cancer, as well as the planned 280-patient Phase II study sponsored by the Mayo Clinic and funded by the U.S. Department of Defense for treating triple-negative breast cancer. We also made various improvements to the vaccine manufacturing process, resulting in, what we believe to be, a superior formulation of the vaccine that is more amenable to large-scale manufacturing and commercialization.

Clinical Program Pipeline Status Updates

Enrolling Patients: Phase 2 TPIV 200II TPIV200 Trial in Triple NegativeTriple-Negative Breast Cancer

We have opened 8 clinical sites and begun treatingenrolled over 90% of the patients in a Phase 2II trial of our Folate Receptor Alpha cancer vaccine, TPIV 200,TPIV200, in the treatment of triple negativetriple-negative breast cancer, one of the most difficult cancers to treat, cancers representing a clear unmet medical need. The open-label, 80 patient80-patient clinical trial is designed to evaluate dosing regimens, adjuvants, efficacy, and immune responses in women with triple negativetriple-negative breast cancer. Key data from the trial is expected to be included in a future New DrugBiologics License Application submission to the FDA for marketing clearance. This trial is sponsored and conducted by TapImmune.

An independent Data Safety Monitoring Board (DSMB) reviews the safety every quarter in this ongoing Phase 2 study enrolling women with stage I-III triple-negative breast cancer who have completed initial surgery and chemo/radiation therapy. The randomized four-arm study is evaluating two doses of TPIV200 (a high dose and a low dose), each of which will be tested both with and without immune priming with cyclophosphamide prior to vaccination. Safety reviews are conducted quarterly and have showed no safety issues; the study has continued to enroll patients at multiple clinical sites. The study is expected to complete enrollment by year end 2017, with top-line data expected in early 2018. Details regarding this trial can be found at www.clinicaltrials.gov under identifier numbers NCT02593227 and FRV-002.

Enrolling Patients: Phase 2II TPIV200 Trial at Memorial Sloan Kettering of TPIV 200 in Platinum-Sensitive Ovarian Cancer

AWe have opened six clinical sites (with another eight sites anticipated to open during the remainder of 2017 and early 2018) and have enrolled the first six patients in a Phase 2II trial of TPIV200 for a 120-patient study of TPIV 200 inon ovarian cancer patients who are not responsive to platinum. We have received the FDA’s Fast Track designation to develop TPIV200 as a maintenance therapy in combination with platinum, a commonly used chemotherapy forin platinum-responsive ovarian cancer sponsored by Memorial Sloan Kettering Cancer Center,patients, including women with Stage III and IV ovarian cancer who are in collaboration with AstraZeneca and TapImmune, has begun enrollment for a 40 patient study. The open-labelremission following their first round of successful platinum-based chemotherapy. This multi-center, double-blind efficacy study is designedsponsored and conducted by TapImmune. We expect to evaluate a combination therapycomplete enrollment mid-2019. An interim analysis is planned based upon 50% patient enrollment, which includes our TPIV 200 T-cell vaccine and AstraZeneca’s checkpoint inhibitor, durvalumab. Because they are unresponsive to platinum, these patients have no real options left. If the combination therapy proves effective, we believe it would address a critical unmet need. TPIV 200 has received Orphan Drug designation for useanticipate completing in the treatmentfirst half of ovarian cancer.2019. Details regarding this trial can be found at www.clinicaltrials.gov under identifier numbers NCT02978222 and FRV-004.

Enrollment to Commence in Q4 2016:Enrolling Patients: Phase 2II Mayo Clinic-U.S. DOD Trial of TPIV 200TPIV200 in Triple NegativeTriple-Negative Breast Cancer

We anticipatehave begun enrolling patients in this Phase 2II study of TPIV 200TPIV200 in the treatment of triple negativetriple-negative breast cancer, conducted by the Mayo Clinic and sponsored by the U.S. Department of Defense (DOD), will begin to enroll patients in the fourth quarter of this year.DOD. The anticipated 280 patient280-patient study will beis led by Dr. Keith Knutson of the Mayo Clinic in Jacksonville, Florida. Dr. Knutson is the inventor of the technology and an advisor toa member of the Scientific Advisory Board at TapImmune. While TapImmune iswe are supplying doses of TPIV 200TPIV200 for the trial and being reimbursed for the costs associated with manufacturing, the remaining costs associated with conducting this study will be funded by a $13.3 million grant made by the DOD to the Mayo Clinic.

Clinical Sites to OpenEnrolling Patients: Phase II Trial at Memorial Sloan Kettering of TPIV200 in Q4 2016: Phase 2 TPIV 200 Trial in Platinum-SensitivePlatinum-Resistant Ovarian Cancer

By the endA Phase II study of 2016, we expect to have at least one clinical site openTPIV200 in a Phase 2 trial of TPIV 200 in 80 ovarian cancer patients who are not responsive to platinum. Weplatinum, a commonly used chemotherapy for ovarian cancer, sponsored by Memorial Sloan Kettering Cancer Center (“MSKCC”), and in collaboration with AstraZeneca and TapImmune, has begun enrollment for a 40-patient study. The open-label study is designed to evaluate a combination therapy which includes our TPIV200 T-cell vaccine and AstraZeneca’s checkpoint inhibitor, durvalumab. Because they are unresponsive to platinum, these patients have no real remaining options. If the combination therapy proves effective, we believe it would address a critical unmet need. TPIV200 has received Orphan Drug designation for use in the FDA’s Fast Track designation to develop TPIV 200 as a maintenance therapy in combination with platinum, in platinum responsivetreatment of ovarian cancer. We successfully completed enrollment of the first safety cohort. This multi-center, double-blind efficacy studymay enable MSKCC to increase the number of patients that can be enrolled and will subsequently increase the study’s enrollment rate. Currently more than 50% of patients have been enrolled. An interim analysis is sponsoredplanned in the fourth quarter of 2017. Details regarding this trial can be found at www.clinicaltrials.gov under identifier numbers NCT02764333 and conducted by TapImmune.16-011.

Open IND with FDA for TPIV 110TPIV110 in Q4 2016 or in Q1 2017: Phase 2II Protocol Now in Preparation

We have reformulatedenhanced the formulation of our second cancer vaccine product, TPIV 110,TPIV110 (the five-peptide product), following very strong safety and immune responses from a Phase 1I Mayo Clinic study. TPIV 110study using TPIV100 (the four-peptide product). TPIV110 targets Her2/HER2/neu, which makes it applicable to breast, ovarian, and colorectal cancer.cancers. The reformulatedenhanced TPIV product adds a fifth antigen which should produce an even more robust immune response activating both CD4+ and CD8+ T-cells. We have requestedparticipated in a pre-Investigational New Drug (IND)(“pre-IND”) meeting with the FDA and submitted questions towill file the FDA related to openingamended IND containing the IND. A response from the FDA is expected in September and we anticipate having an open IND by year-end pending comments from FDA.fifth peptide later this year. The protocol for a Phase 2II trial of TPIV 110TPIV110 in the treatment of Her2/HER2/neu positive breast cancer patients has been designed and is now being reviewedcurrently under review by our ScientificClinical Advisory Board and collaborators.

TPIV Products are Off-the-Shelf, Commercially Viable, with Excellent Potential MarginsMayo Clinic to Vaccinate Women With Ductal Carcinoma In Situ (DCIS) Using TapImmune TPIV100 HER2-targeted T-Cell Vaccine

We are continuously working on improvingOn March 14, 2017, we announced that our product formulation and supply. We believe TPIV 200 and TPIV 110 are both very stable, off-the-shelf, lyophilized products that only require reconstitutionpartners at the clinical site before injection. We believe the investments we have made in the formulation work we have performed will result in a commercially viable product with excellent potential profit margins.

Robust Product Data & Independent Vetting Key to High-Value Collaborations

We believe the Phase 1 data produced for both TPIV 200 and TPIV 100 in collaboration with the Mayo Clinic are the driving force behind the high-value collaborations we have been able to maintain and establish with organizations including Mayo Clinic, AstraZeneca, Sloan Kettering, andreceived a grant from the U.S. Department of Defense. As we move forward into advancingDefense to conduct a Phase II study of our HER2-targeted vaccine candidate in an early form of breast cancer called DCIS. This is the second TapImmune vaccine to be tested in a fully funded Phase 2 studies, some ofII study sponsored by the Mayo Clinic. Our collaborators at Mayo Clinic announced a $3.8 million grant which are represent collaboration with prestigious third party organizations, we believe would fully fund this represents further independent vettingPhase II trial. If the study is successful, our vaccine may eventually augment or even replace standard surgery and chemotherapy, and potentially could become part of potentiala routine immunization schedule for preventing breast cancer in healthy women. The study is expected to enroll 40-45 women with DCIS and begin to commence such enrollment during the remainder of 2017.

Addition of Executive Officers

On September 22, 2017, we announced that Peter Hoang was appointed as our President and Chief Executive Officer and entered into an employment agreement with us. Concurrent with such appointment, we amended the employment agreement of Dr. Wilson for Dr. Wilson to relinquish the office of Chief Executive Officer and serve as Strategic Advisor and to remain as Chairman of our technology.Board of Directors.

On September 22, 2017, we announced that Dr. Glynn Wilson was appointed as our Strategic Advisor and we entered into an amended employment agreement with him.

Results of Operations

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

Three Months Ended September 30, 2017 Compared to Three Months Ended September 30, 2016

We recorded a net loss of $4.0 million or ($0.39) basic and diluted per share during the three months ended September 30, 2017 compared to a net loss of $2.1 million or (0.29) basic and diluted per share during the three months ended September 30, 2016. The change period over period was due to the following changes in operating expenses and other income (expense):

Operating Expenses

Operating expenses incurred during the three months ended September 30, 2017 were $4.2 million compared to $2.7 million in the prior period. Significant changes in operating expenses are outlined as follows:

Company Highlights

Reverse Stock SplitOther Income (Expense)

Change in fair value of warrant liabilities

On September 16, 2016, atThe change in fair value of warrant liabilities for the opening of trading, we effected a one-for-twelve reverse split of our common shares. The common shares began trading on a split-adjusted basis on September 16, 2016. The reverse stock split was effected in connection with the Company’s intent to apply to list the common stock on the NASDAQ Capital Market. On November 2, 2016, we received notification that we were approved for listing on The Nasdaq Capital Market. Our common stock is expected to begin trading on The Nasdaq Capital Market at the opening of trading on Tuesday, November 8, 2016 under the ticker symbol, TPIV.

Our historical financial results have been adjusted to reflect a reduction in the number of shares of our outstanding common stock from 62,890,763 shares to 5,240,897 shares atthree months ended September 30, 2015 and from 70,550,763 shares2017 was $4,000 as compared to 5,879,230 shares at December 31, 2015. In addition, effective upon the reverse stock split, the number of authorized shares of our common stock was reduced from 500$0.7 million shares to 41,666,667 shares. All fractional shares resulting from the reverse stock split were rounded up to the nearest whole share. All share data herein has been retroactively adjusted for the reverse stock split. The par value was not adjusted as a result of the one for twelve reverse stock split.

August 2016 Private Placement Transaction

three months ended September 30, 2016. On August 10, 2016, we amended the Series A and A-1, Series C and C-1, Series D and D-1 and Series E and E-1 warrants agreements issued by us in January and March 2015 to remove the clause that caused the warrants to be classified as warrant liabilities, and the variance period over period is due to that reason.

The fair value of the warrant liabilities decreased by $4,000 for the three months ended September 30, 2017 and is reflected by a corresponding gain in the condensed consolidated statement of operations. This compares to a decrease in the fair value of derivative liabilities for the three months ended September 30, 2016 of $0.7 million. We revalue the derivative liabilities at each balance sheet date to fair value. The fair value is determined using Black-Scholes valuation model using various assumptions. The two most significant changes in the assumptions were the difference in the strike price and the number of warrants with derivative liabilities. The change in fair value for the three months ended September 30, 2016 was primarily due to the difference in strike price at June 30, 2016 and September 30, 2016.

Grant income

During the three months ended September 30, 2017, we received $0.2 million of a grant awarded to Mayo Foundation from the U.S. Department of Defense for the Phase II Clinical Trial of TPIV200. The grant compensated us for our out-of-pocket costs associated with clinical supplies which were manufactured and provided by us for the clinical study.

Shares issued in debt settlement agreements

During the three-month period ended September 30, 2016, we incurred $0.1 million loss in connection with shares issued to satisfy an outstanding debt agreement from previous years.

Nine months Ended September 30, 2017 Compared to Nine Months Ended September 30, 2016

We recorded a net loss of $8.3 million or ($0.91) basic and diluted per share during the nine months ended September 30, 2017 compared to a net loss of $0.9 million or ($0.14) basic and ($0.54) diluted per share during the nine months ended September 30, 2016. The change period over period was due to the following changes in operating expenses and other expense:

Operating Expenses

Operating expenses incurred during the nine months ended September 30, 2017 were $9.0 million compared to $6.9 million in the prior period. Significant changes in operating expenses are outlined as follows:

Other Income (Expense)

Change in fair value of warrant liabilities

The change in fair value of warrant liabilities for the nine months ended September 30, 2017 was $8,500 as compared to $5.9 million for the nine months ended September 30, 2016. On August 25,10, 2016, we amended the CompanySeries A and A-1, Series C and C-1, Series D and D-1 and Series E and E-1 warrants agreements issued by us in January and March 2015 to remove the clause that caused the warrants to be classified as warrant liabilities, and the variance period over period is due to that reason.

The fair value of the warrant liabilities decreased by $8,500 for the nine months ended September 30, 2017 and is reflected by a corresponding loss in the condensed consolidated statement of operations. This compares to a decrease in the fair value of derivative liabilities for the nine months ended September 30, 2016 of $5.9 million. We revalue the derivative liabilities at each balance sheet date to fair value. The fair value is determined using Black-Scholes valuation model using various assumptions. The two most significant changes in the assumptions were the difference in the strike price and the number of warrants with derivative liabilities. The change in fair value for the nine months ended September 30, 2016 was primarily due to the difference in strike price at December 31, 2015 and September 30, 2016.

Debt extinguishment gain

In 2003 and further amended in 2008, we acquired a research license and option agreement from Crucell Holland B.V. for use of an adenovirus technology. We have not made use of the technology in our current work and have not asked for nor received any work product from Crucell. Crucell was acquired by Johnson and Johnson in 2010. As of December 31, 2016, we had accrued $0.5 million as amounts owed under the amended agreement.

Upon further third-party Netherlands legal review and analysis of the agreement undertaken during the nine months ended September 30, 2017, it was concluded that the statute of limitations has run out on the obligation, and a legal opinion received by us confirms the amounts are not currently owed. As such, as of September 30, 2017, we were no longer obligated to make the payments under the agreement. Therefore, we recorded a debt extinguishment gain of $0.5 million during the nine months ended September 30, 2017.

Grant income

During the nine months ended September 30, 2017 and September 30, 2016, we received $0.2 million of a grant awarded to Mayo Foundation from the U.S. Department of Defense for the Phase II Clinical Trial of TPIV200. The grant compensated us for our out-of-pocket costs associated with clinical supplies which were manufactured and provided by us for the clinical study.

Shares issued in debt settlement agreements

During the nine-month period ended September 30, 2016 we incurred $0.1 million loss in connection with shares issued to satisfy outstanding debt agreements from previous years.

Liquidity and Capital Resources

We have not generated any revenues since inception. We have financed our operations primarily through public and private offerings of our stock and debt including warrants and the exercises thereof.

The following table sets forth our cash and working capital as of September 30, 2017 and December 31, 2016:

Cash Flows

The following table summarizes our cash flows for the nine months ended September 30, 2017 and 2016:

Financings

June 2017 Private Placement Transaction

On June 26, 2017, we completed private placements of units with certain accredited investors. The units consistedIn the private placement transaction, we sold 1,503,567 shares of (i) one share of the Company’s common stock par value $0.001for $3.97 per share and (ii) one five-year warrantwarrants to purchase one sharean equal number of Companyshares of common stock, at an exercise price of $3.97 per share, for $6.00. The Company$0.125 per warrant, with one common share and one warrant being sold together as a unit for a total of $4.095 per unit. We issued and sold an aggregate of 653,1661,503,567 million units at a purchase price per unitfor aggregate gross proceeds of $4.80 for an aggregate of approximately $3.1$6.2 million. The CompanyWe incurred approximately $0.8 million in agency fees and legal costs. In connection with the offering, we reduced the exercise price for the warrants to purchase an aggregate of 653,187 shares of common stock issued to investors in the private placement that closed in August 2016 from $6.00 per share to $3.97 per share.

In addition, the Companywe issued five-year warrants to the placement agent in the offering providing for the purchase of up to 65,317150,357 shares of Companyour common stock for $4.80$3.97 per share.

Pursuant to the registration rights agreementsa Registration Rights Agreement to be entered into in connection withat the closing of the private placements,placement offering, promptly, but no later than 90 calendar days after the Company isclosing of the offering, we are required to file a registration statement with the Securities and Exchange Commission registering for resale (a) the common stock issued in the private placement offering; (b) the shares of common stock issuable upon the exercise of the five-yearprivate placement warrants; and (c) the shares of common stock issuable upon the exercise of the warrants issued to Katalyst Securities LLC, which acted as placement agent for the placement agent. The Company isoffering. We are required to file the registration statement within 120 days of the August 10, 2016 closing or by December 8, 2016. The Company is also requireduse its commercially reasonable efforts to ensure that the registration statementRegistration Statement is declared effective within 90 calendar days after filing with the Securities and Exchange Commission, on or by March 8,before December 23, 2017.

In accordance with the registration rights agreements, should the Companywe fail to meet the above criteria, the Company iswe are subject to pay the investors liquidated damages. The liquidated damages shall be a cash sum payment calculated at a rate of ten percent (10%) per annum of the aggregate purchase price for the registrable securities or aggregate amount upon exercise of the placement agent warrants.

In accordance with applicable U.S. generally accepted accounting principles,GAAP, a contingent obligation to make future payments must be recorded if the transfer of consideration under a registration payment arrangement is probable and can be reasonably estimated. The Company hasWe have determined that should it be required to pay liquidated damages to the investors of the private placements, the aggregate contingent liability it would be required to record would be approximately $29,000$57,000 per month for each month it fails or is estimated to fail to meet the above criteria.

At the August 10, 2016 and August 26,2016June 26, 2017 private placement closings,closing, on June 30, 2017 and on September 30, 2016, the Company2017, we concluded that it is not probable that it will be required to remit any payments to the investors for failing to obtain an effective registration statement or failing to maintain its effectiveness.

August 2016 Warrant ExercisesJune 2017 Exercise and Repricing of Warrants Held by Existing Institutional Investors

On June 23, 2017, certain existing institutional shareholders of the Company who hold various outstanding warrants (i.e. C, D, E and F) to purchase Company common stock, entered into warrant repricing and exercise agreements.

Series E repriced and exercised warrants

Approximately 168,000 of Series E warrants were repriced from $15.00 per share to $3.97 per share and exercised immediately for gross proceeds of approximately $0.7 million. Series E warrants to purchase approximately 187,000 shares of Company common stock being reduced from $15.00 per share to $4.50 per share.

Series C, D & F repriced warrants

Additionally, the exercise prices for certain investors of Series C, Series D and Series F warrants were reduced as follows:

The fair value relating to the modification of exercise prices on the repriced warrants was treated as deemed dividend on the statement of stockholders’ equity of $0.6 million.

June 2017 Agent Warrants

Pursuant to an agency agreement, dated May 12, 2017, by and between Katalyst Securities LLC and us, Katalyst agreed to act as our placement agent in connection with the June 26, 2017 private placement offering.

Pursuant to the agreement, we agreed to pay to Katalyst: (i) an aggregate cash fee for placement agent and financial advisory services equal to 10% of the gross proceeds of the Offering; (ii) a non-accountable expense allowance in the amount of Seventy Thousand Dollars ($70,000); and (iii) five-year warrants to purchase a number of shares of our common stock equal to 10% of the number of shares sold in the offering. The Katalyst Warrants have the same terms as the private placement warrants issued in the offering. Based on the 1,503,567 shares of common stock sold in the private placement, we issued five-year warrants to Katalyst providing for the purchase of up to 150,357 shares of Company common stock for $3.97 per share.

Previous Funding

Our previous funding has come from financings that we conducted in January and March of 2015, from the exercises of stock warrants. In our August 11, 2016 private placement, we completed private placements of units with certain accredited investors. The units consisted of (i) one share of our common stock, par value $0.001 per share and (ii) one five-year warrant to purchase one share of our common stock for $6.00. We issued and sold an aggregate of 653,187 units at a purchase price per unit of $4.80 for an aggregate of $3.1 million. We incurred $0.8 million in agency fees and legal costs. In addition, we issued five-year warrants to the placement agent in the offering providing for the purchase of up to 65,327 shares of our common stock for $4.80 per share. In connection with the August 2016 private placement, holders of an aggregate of 583,333 outstanding Series C Warrants and 416,667 Series C-1 Warrants, each providing for the purchase of one share of our common stock for $6.00 per share, exercised their warrants for an aggregate exercise price of $6,000,000. $6.0 million.

August 2016 Warrant AmendmentsFuture Capital Requirements

Simultaneous withAs of September 30, 2017, we had working capital of $6.0 million, compared to working capital of $6.2 million as of December 31, 2016. We expect our expenses to continue at a similar pace during the exerciseremainder of the warrants, we2017 and holdersinto 2018 primarily to continue funding our in-process Phase II clinical trials. Two of an aggregate of 3,096,665 outstanding Series A Warrants, Series A-1 Warrants, Series C Warrants, Series C-1 Warrants, Series D Warrants, Series D-1 Warrants, Series E Warrants and Series E-1 Warrants (the “Outstanding Series Warrants”) entered into Warrant Amendment Agreements (the “Amendment Agreement”), in which they agreed to amend the terms of the Outstanding Series Warrants to remove provisions from the Outstanding Series Warrants that had previously caused themour clinical studies are expected to be classified asfunded by a derivative liability as opposedtotal of $17.1 million of grants made by the DOD to equitythe Mayo Clinic. Our collaborators at Mayo Clinic announced a $3.8 million grant which we expect would fully fund a Phase II clinical trial in DCIS that we had planned for our HER2/neu vaccine.

Our capital requirements for 2017 and through and beyond 2018 will depend on our balance sheet. In consideration for such amendment andnumerous factors, including the exercise of the Series C Warrants and Series C-1 Warrants, we issued an aggregate of 750,000 additional shares of common stock to such warrant holders and new five-year warrants to purchase 1 million sharessuccess of our common stock at an exercise price of $7.20 per share (the “Series Fresearch and F-1Warrants”).development, the resources we devote to develop and support our technologies and our success in pursuing strategic licensing and funded product development collaborations with external partners as well as other strategic initiatives we may determine to pursue. Subject to our ability to raise additional capital, we expect to incur substantial expenditures to further develop our technologies including continued increases in costs related to research, nonclinical testing and clinical studies and trials, as well as costs associated with our capital raising efforts and being a public company.

We believe our existing cash will fund our operations into the third quarter of fiscal 2018. We will require substantial additional capital to conduct research and development, to fund nonclinical testing and Phase II clinical trials of our licensed, patented technologies, and to begin cultivating collaborative relationships for the Phase II and future Phase III clinical testing. Our plans could include seeking both equity and debt financing, alliances or other partnership agreements with entities interested in our technologies, or other business transactions that could generate sufficient resources to ensure continuation of our operations and research and development programs.

We expect to continue to seek additional funding for our operations. Any such required additional capital may not be available on reasonable terms, if at all. If we were unable to obtain additional financing, we may be required to reduce the scope of, delay or eliminate some or all of our planned clinical testing and research and development activities, which could harm our business. The following table reflectssale of additional equity or debt securities may result in additional dilution to our shareholders. If we raise additional funds through the statusissuance of debt securities or preferred stock, these securities could have rights senior to those holders of our common stock and could contain covenants that could restrict our operations. We also will require additional capital beyond our currently forecasted amounts.

Because of the outstanding warrants fromnumerous risks and uncertainties associated with research, development and commercialization of our product candidates, we are unable to estimate the January 2015, March 2015, and August 2016 private placement financings (including placement agent warrants) following the Amendment Agreement and private placement:exact amounts of our future working capital requirements. Our future funding requirements will depend on many factors, including, but not limited to:

Addition of Executive OfficersWe have based our estimates on assumptions that may prove to be wrong. We may need to obtain additional funds sooner or in greater amounts than we currently anticipate.

On July 18, 2016 we announced that Dr. John Bonfiglio, a consultant and a memberVarious conditions outside of our Boardcontrol may detract from our ability to raise additional capital needed to execute our plan of Directors, was appointedoperations, including overall market conditions in the international and local economies. Any of these factors could have a material impact upon our ability to raise financing and, as a result, upon our President and Chief Operating Officer and entered into an employment agreement with us. Concurrent with such appointment we amended the employment agreement of Dr. Wilson for Dr. Wilson to relinquish the office of President.

On August 25, 2016 we announced that Michael J. Loiacono, a consultant, was appointed as our Chief Financial Officer, Chief Accounting Officer, Secretary and Treasurer and entered into an employment agreement with us.short-term or long-term liquidity.

Critical Accounting Policies

The condensed consolidated financial statements are prepared in conformity with U.S. GAAP, which require the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of expenses in the periods presented. We believe that the accounting estimates employed are appropriate and resulting balances are reasonable; however, due to inherent uncertainties in making estimates, actual results could differ from the original estimates, requiring adjustments to these balances in future periods. The critical accounting estimates that affect the consolidated financial statements and the judgments and assumptions used are consistent with those described under Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2015.2016.

Results of Operations

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

Three Months Ended September 30, 2016 Compared to Three Months Ended September 30, 2015

We recorded a net loss of $2,103,000 or ($0.29) basic and diluted per share during the three months ended September 30, 2016 compared to a net income of $28,503,000 or $7.04 basic and $4.23 diluted per share during the three months ended September 30, 2015.

Operating costs increased to $2,722,000 during the three months ended September 30, 2016 compared to $1,738,000 in the prior period. Significant changes in operating expenses are outlined as follows:

Nine months ended September 30, 2016 Compared to Nine months ended September 30, 2015

We recorded a net loss of $879,000 or ($0.14) basic and ($0.54) diluted per share during the nine months ended September 30, 2016 compared to a net loss of $32,414,000 or ($10.61) basic and diluted per share for the nine months ended September 30, 2015.

Operating costs increased to $6,901,000 during the nine months ended September 30, 2016 compared to $3,904,000 in the prior period. Significant changes in operating expenses are outlined as follows:

Liquidity and Capital Resources

We have not generated any revenues since inception, we have financed our operations primarily through public and private offerings of our stock and debt including warrants and the exercise thereof. The following table sets forth our cash and working capital as of September 30, 2016 and December 31, 2015: