10-K 1 form10k.htm MYMETICS CORP 10-K 12-31-2011 form10k.htm


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, 2011

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

FOR THE TRANSITION PERIOD FROM ______ TO _____
 

COMMISSION FILE NUMBER 000-25132
 
MYMETICS CORPORATION
             (Exact name of Registrant as specified in its charter)
 
DELAWARE
 
25-1741849
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
c/o Mymetics S.A.
Biopole
Route de la Corniche, 4
1066 Epalinges (Switzerland)

(Address of principal executive offices)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 011 41 21 653 4535
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, $0.01 PAR VALUE
(Title of Class)

 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x
 
 Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o
(the registrant is not yet required to submit Interactive Data)

 Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) 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. o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
o Large accelerated filer o Accelerated filer  o Non-accelerated filer  x smaller reporting company
 
 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x.

The aggregate market value of the voting common stock held by non-affiliates of the registrant (assuming officers and directors are affiliates) was approximately U.S. $7,176,451 as of December 31, 2011, computed on the basis of the closing price on such date.
 
 As of March 29, 2012, there were 295,318,813 shares of the registrant's Common Stock outstanding.



 
 

 

FORWARD LOOKING STATEMENTS
 
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements, which are identified by the words "believe," "expect," "anticipate," "intend," "plan" and similar expressions. The statements contained herein which are not based on historical facts are forward-looking statements that involve known and unknown risks and uncertainties that could significantly affect our actual results, performance or achievements in the future and, accordingly, such actual results, performance or achievements may materially differ from those expressed or implied in any forward-looking statements made by or on our behalf. These risks and uncertainties include, but are not limited to, risks associated with our ability to successfully develop and protect our intellectual property, our ability to raise additional capital to fund future operations and compliance with applicable laws and changes in such laws and the administration of such laws. These risks are described below and in "Item 1. Business," "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" included in this Form 10-K. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date the statements were made.
 
 
 

 
 
 
PART I
     
ITEM 1.
5
ITEM 1A.
15
ITEM 1B.
21
ITEM 2.
21
ITEM 3.
21
ITEM 4.
21
     
PART II
     
ITEM 5.
22
ITEM 6.
24
ITEM 7.
24
ITEM 7A.
30
ITEM 8.
30
ITEM 9.
30
ITEM 9A.
30
ITEM 9B.
31
     
PART III
     
ITEM 10.
32
ITEM 11.
36
ITEM 12.
39
ITEM 13.
41
ITEM 14.
41
     
PART IV
     
ITEM 15.
43
     
72
 

PART I


THE CORPORATION

OVERVIEW

We are a vaccine company developing unique vaccines that focus on the mucosal layer as a first line of defense against viruses entering the blood stream and the development of virosomes as a new vaccine delivery platform.  We believe that virosomes are the most promising vaccine delivery systems since they do not use live attenuated or killed pathogens and increase the immunogenicity and stability of the vaccine.

We currently do not make, market or sell any products, but we generate some limited revenue through the licensing of certain of our technology. We believe, however, that our research and development activities will result in valuable intellectual property that can generate significant revenues for us in the future such as by licensing. Vaccines are one of the fastest growing markets in the pharmaceutical industry. Vaccines have evolved from being an exclusively low price sector to one where substantial prices may be paid for some vaccine products.

HISTORY AND DEVELOPMENT OF THE COMPANY

We were incorporated in July 1994 pursuant to the laws of the Commonwealth of Pennsylvania under the name "PDG Remediation, Inc." In November 1996, we reincorporated under the laws of the State of Delaware and changed our name to "ICHOR Corporation." In July 2001, we changed our name to "Mymetics Corporation."

In March 2001, we acquired 99.9% of the outstanding shares of the French registered company Mymetics S.A. in consideration for shares of our common stock and shares of Class B Exchangeable Preferential Non-Voting Stock of 6543 Luxembourg S.A., which are convertible into shares of our common stock. In 2002, we acquired all but 0.01% of the remaining outstanding common stock of Mymetics S.A. pursuant to share exchanges with the remaining stockholders of Mymetics S.A. The terms of these share exchanges were substantially similar to the terms of the share exchange that occurred in March 2001. In 2004, all the remaining convertible shares of 6543 Luxembourg S.A. not already held by Mymetics Corporation were converted into shares of Mymetics Corporation. On February 7, 2006, the Tribunal de Commerce in Lyon, France placed the French subsidiary Mymetics S.A., under receivership ("Redressement Judiciaire").

We own all of the outstanding voting stock of: (i) Mymetics S.A., a company originally organized as Mymetics Management Sàrl in 2007 under the laws of Switzerland, (ii) 6543 Luxembourg S.A., a joint stock company organized in 2001 under the laws of Luxembourg,(iii) Bestewil Holding B.V. and (vi) its subsidiary Mymetics B.V. (formerly Virosome Biologicals B.V.) both of which are organized under the laws of The Netherlands and were acquired in 2009. In this document, unless the context otherwise requires, "Mymetics" and the "Corporation" refer to Mymetics Corporation and its subsidiaries.

MYMETICS S.A.

Our Swiss subsidiary MYMETICS S.A. was founded in 2007 as MYMETICS MANAGEMENT Sàrl to facilitate the conduct of our business in Switzerland. This includes managing our staff retirement and social security contributions, leasing our Swiss premises and other such local tasks which a U.S. registered company cannot easily conduct without significant legal and organizational costs. The change in name and bylaws affected in 2009, from Société A Responsabilité Limitée (SARL) to Société Anonyme (SA) is indicative of the transition from a pure service company status of this unit to a development company in its own rights within Mymetics Corporation.

LUXEMBOURG 6543 S.A.

Our Luxembourg subsidiary, Luxembourg 6543 S.A., was founded in 2001 in connection with the acquisition of Mymetics S.A. of France (formerly Hippocampe S.A.) by Mymetics Corporation. Luxembourg 6543 S.A. is dormant.
 

BESTEWIL HOLDING B.V. and its subsidiary MYMETICS B.V.

On April 1, 2009 we entered into an agreement with Norwood Immunology Limited (“NIL”) for the acquisition of Bestewil Holding B.V. (“Bestewil”) from its parent, NIL, under a Share Purchase Agreement pursuant to which we agreed to purchase all issued and outstanding shares of capital stock (the “Bestewil Shares”) of Bestewil from its parent, NIL, and all issued and outstanding shares of capital stock of Virosome Biologicals B.V. which were held by Bestewil. Virosome Biologicals B.V., the name of which was subsequently changed to Mymetics B.V., will continue to be engaged in research and development activities in its own facilities in Leiden (Netherlands) under the management of its founder, the original inventor of the virosome technology.

PRODUCTS UNDER DEVELOPMENT

Our current pipeline has five proprietary vaccines in development: HIV-1, malaria, herpes simplex virus type I and II(HSV-1 and HSV-II), respiratory syncytial virus (RSV) and intra-nasal influenza vaccine.  The vaccines in our portfolio are primarily prophylactic. The current stage of development of these vaccines is shown in the table below:

Vaccine
Pre-Clinical
Phase I
Phase II
HIV-1
 
X
 
RSV
X
   
HSV
X
   
Malaria
 
X
X (ended in 2007)
Influenza
 
X
 

Note: The Phase II for the malaria vaccine was a different formulation than the current Mymetics malaria vaccine.

HIV-1 and AIDS

HIV-1 (human immunodeficiency virus type 1) is a retrovirus that gradually destroys the immune system and ultimately leads to AIDS. HIV-1 is among the pathogens harboring the highest genetic variation, leading to millions of variants, each rapidly mutating. Indeed, HIV-1 exists under many different versions (aka “clades”), like members of a large family; they are different from, but related to each other.

Our current prophylactic HIV-1 vaccine will be constituted of virosomes linked to conserved antigens (epitopes) derived from the HIV-1 gp41 proteins from the clade B, the dominant clade found in Europe and North America. Other conserved viral antigens are under investigation. The vaccine is designed to trigger blood and mucosal antibodies of both isotype IgG and IgA, for example in the vaginal and intestinal tracts. The rationale for the design of the vaccine was based on the observation that certain people who are repeatedly exposed to HIV-1 do not contract infection; they were shown to have mucosal antibodies in the semen or vaginal secretions against the HIV-1 gp41 that apparently protect them. Mymetics’ vaccine is trying to reproduce “Mother Nature”.

Key scientific results with the HIV vaccine to date:

2005: “Proof of Concept” for inducing mucosal antibodies.  Vaccination of rabbits with virosomes-P1 elicited mucosal antibodies in the vagina and intestinal mucosa. P1 is a synthetic peptide corresponding to the C-terminal end of the C-helix ectodomain of the gp41. In a laboratory test, these antibodies strongly inhibited HIV-1 passage through the mucosal tissues, also called trancytosis, confirming the potential of developing an HIV-1 vaccine that prevents infection at the mucosal layer.

2006/2007: Mucosal antibodies in monkeys. Macaque monkeys (Macaca Mulatta), from Chinese origin, showed after vaccination with virosomes-P1, specific mucosal antibodies, which were detected in more than 90% of the animals and harboring the potential to block in-vitro HIV-1 trancytosis, confirming the rabbit data.
 
 
2008: Full protection of monkeys against multiple vaginal challenges with live heterologous clade B virus. Macaque monkeys from Chinese origin were vaccinated with both virosomes-modified P1 and virosomes-rgp41 (vaccine MYM-V201.) One month after the last vaccination, animals received multiple intra-vaginal challenges with the live SHIVSF162P3 virus. The vaccinated animals that developed mucosal antibodies with trancytosis inhibition activity were not infected with the virus, while the placebo vaccinated control group was fully infected.

Dec 2008: Approval to start Phase I clinical trials. After the ground breaking results of the monkey study in 2006 and 2008, a Phase I study proposal (IMPD, IB, clinical protocol, etc) was submitted and approved by the Independent Ethics Committee (IEC)of the Ghent University Hospital. Mymetics received the approval and authorization from the Federal Agency for Medicines and Health Products (FAGG) in Belgium to conduct the clinical trial MYM-V101-CT08-101 (EudraCT number 2008-007306-10) for testing the drug product MYM-V101 (virosomes with the modified and lipidated P1).

Sep.- Oct. 2009: Production of the GMP-grade vaccine (MYMV101: virosomes-modified P1) for a Phase I clinical trial in Belgium. European competent authorities require GMP-grade products for clinical phase I. Currently in the U.S., GLP-grade products are required at this stage, while GMP-grade products are required from phase II onwards. GMP-grade products are notoriously more difficult and costly to produce than GLP-grade ones. Succeeding in the GMP production is considered a major achievement.

Dec. 2009 – Sep. 2010: Phase I clinical trial –“proof of principle” with the final signed report in July 2011. The trial demonstrated that virosomes-modified P1 can induce mucosal antibodies in the genital tract of women, and confirmed the immunogenicity data previously obtained on monkeys. The drug product MYMV-101 was used as a vaccine in a double-blind, placebo-controlled Phase I study at CEVAC (Ghent, Belgium), involving 24 healthy women randomized in 2 Panels to monitor safety and mucosal immunogenicity: Panel 1: 10 microgram/dose and Panel 2: 50 microgram/dose. In each Panel, 8 subjects received the vaccine and 4 subjects received the placebo through intra-muscular (weeks 0 and 8) and intra-nasal (weeks 16 and 24) administrations. The Phase I clinical trial achieved its primary objective and showed that the HIV vaccine MYMV101 was safe and well tolerated by healthy women. The secondary objective was also met as the presence of IgG and IgA antibodies in the serum of all vaccinated women was detected. Further, samples showed that mucosal antibodies in the vaginal and rectal secretions were present. Tested vaginal secretions could block in vitro the HIV-1 transcytosis, confirming the previous pre-clinical work. Mymetics could claim a shelf life of nine months for its MYM-V101 drug product.

Next steps:

Until now Mymetics has financed the development of the HIV-1 vaccine mainly through its own capital. However, we continue  to seek funding either through grants or through a partnership agreement to perform the further development of the HIV-1 vaccine. The planned monkey study at UC Davis has been delayed due to funding issues and as Mymetics wishes to launch the study with a vaccine formulation that has at least 12 to 18 months shelf life. Two new grants have been applied for, one for the continued pre-clinical work on monkeys and one for a Phase I trial. These projects are planned to identify the key defense mechanisms behind the protection triggered by the Mymetics’ HIV-1 vaccine.  Information obtained during these studies will be used as supportive data for the product development and for answering some issues addressed in EMEA guidelines. New potential collaborations have been identified with partners like Dr. Ruth Ruprecht from the Dana Farber Cancer Institute at Harvard University.
 
2012: Further development of HIV-1 prophylactic vaccine.  Following the Phase I clinical trial with only one out of two promising antigens, we intend to further develop and optimize the HIV-1 prophylactic vaccine formulation by adding an additional antigen and increase its shelf life. This vaccine called MYM-V201 is expected to elicit a broader antibody immune response against other conserved regions of HIV-1 in order to minimize viral escape. Since 2007 we have developed a third conserved HIV-1 antigen, which is compatible with virosomes and the up-scale process, but this mimotope represents a backup antigen, in case it is required to improve the vaccine further.

In 2012 Mymetics is preparing the bridge and toxicology studies for generating supportive data, which will lead to GMP production of the drug products MYM-V201 in 2013 if grants are obtained. A Phase I on women and men is expected to start by the end of 2013, with Phase II trials to follow in 2015, and an eventual market launch anticipated in 2022.
 

Respiratory Syncytial Virus (RSV)

Approach:  The RSV vaccine consists of the reconstituted membrane of RSV containing the native viral proteins, which can be adjuvanted with a lipopeptide or other adjuvants. In mice, our RSV vaccine was shown to induce cellular and humoral immunity to the virus, with a balanced Th1/Th2 response, resulting in protection against a live virus challenge, and without inducing “enhanced disease” (a skewed Th1/Th2 response being the hallmark of enhanced disease). In cotton rats, a better model than mice for RSV, the vaccine protected against a live virus challenge, without inducing enhanced disease. In a direct comparison with the 1960’s vaccine, another group of cotton rats was immunized with formaldehyde-inactivated virus, and developed enhanced disease after vaccination and challenge. Mymetics focusses on developing an RSV vaccine for elderly followed by a vaccine for children.

Key Results to date:

2007:  First pre-clinical research on our RSV vaccine.

2008 and 2009:  MedImmune repeated key experiments in order to obtain their own validation of the results. Results were beyond their expectation but MedImmune decided not to continue the program.

Jun. - 2010: Publication of Mymetics RSV results in scientific journal “Vaccine”.

2010: Conducting additional pre-clinical research and improving the manufacturing procedure of the RSV virosomes.

2011: We have improved the adjuvant ratio and continued further tests on cotton rats and mice at the Universtiy of Groningen, Netherlands, showing that a lower adjuvant ratio still triggers protection and the absence of enhanced disease and the vaccine could trigger systemic and mucosal antibodies.

Next steps:

Our goal is to prepare a stable product that will be used for a Phase I trial  in 2013. If the vaccine is safe, well tolerated and immunogenic during Phase I, we will directly move to Phase II in 2014. The Company will seek to enter into a license agreement with a major pharmaceutical company for a Phase III starting in 2015/2016 and a potential market launch in 2019.

We will continue process development and clinical development during 2012 for the vaccine providing, for example, in-line virus purification and inactivation procedures, and develop improved formulations of the vaccine, with augmented long term product stability. The additional costs of this program to us are significant but minor, as compared to a clinical trial cost. The product will then move into clinical development: up-scale production, assay developments, pre-clincial batch for toxicology and GMP batch for Phase I, which will represent substantial cost.

We will also develop versions of the RSV vaccine which are based on enhancing the immune response to selected epitopes, while reducing the potential for cross-reactivity with human proteins, along the lines of our HIV-1 program to serve as future improved vaccines.

Intranasal Influenza

Approach: The intranasal influenza vaccine consists of the reconstituted membrane of influenza virus, also containing a lipopeptide adjuvant. In mice, intranasal application of virosomes without adjuvant does not induce immunity to influenza; however, incorporation of the lipopeptide in the virosomes produces a candidate vaccine that does induce cellular immunity, as well as serum and mucosal antibodies to the virus. The vaccine was licensed to Solvay Pharmaceuticals, a major European pharmaceutical company, which was acquired by Abbott Laboratories. Since October 2011, Mymetics has been able to reclaim the intra-nasal influenza vaccine in its portfolio as Abbott decided not to continue the product due to strategic decisions.
 

Key results to date:

2005: The vaccine completed pre-clinical trials. A first milestone payment was received from Solvay in the same year.

2006: Successful completion of Phase I trial. The vaccine was shown to be safe and well tolerated and induced an immune response which met and exceeded CHMP (European regualtory) criteria for an off-the-shelf injected vaccine. Subsequent milestone payment was received.

Next steps:

Mymetics will seek partners for its intra-nasal influenza vaccines and will thereby focus on mainly emerging market vaccine manufacuturers.

Malaria

Approach:  The malaria vaccine design is based on optimized mimicry of the native parasite protein structure and eliciting antibodies against two stages of the parasite life cycle, unlike 70% of vaccine candidates, which target only one or the other parasite.  It is today among the rare malaria vaccines able to also boost existing malaria immune responses (it has both prophylactic and therapeutic effects) in subjects that were previously exposed to malaria.

Key results to date:

2007: Mymetics acquired a Malaria vaccine project from Pevion Biotech (Ittigen, Switzerland). A human clinical trial Phase Ia for the vaccine with two antigens (AMA-1 and CSP-1) anchored to virosomes was successfully completed on adults in Switzerland. Results showed good safety and tolerability, and the induction of blood antibodies.

2008 - 2009: Phase Ib in Tanzania on children and young adults. The clinical trial Phase Ib in Tanzania evaluated the safety of the same antigens with virosomes on children and young adults under “native” (endemic) conditions. The final report showed that the vaccine induced specific AMA and CSP antibodies in the majority of children and the CSP antibodies have remained up 12 months. The overall malaria clinical symtoms were reduced by 50% in vaccinated group compared to the placebo group.

Next steps:

Further development of the malaria vaccine will only be done based on grants or through an out-licensing agreement. If funds become thus available, the following projects are proposed:

 
-
Investigating new malaria antigens
 
-
Launching antigen interference study with various combinations
 
-
Launching toxicology studies with the best formulation susceptible to offer an improved protection in human exposed to Plasmodium falciparum.
 
-
Launching a new Phase I trial with three or more antigens (peptides and proteins).

Herpes Simplex Virus (HSV)

Approach:  The current HSV vaccine candidate consists of the reconstituted membrane of HSV-1 or HSV-2, also containing a lipopeptide, or other adjuvant.  In mice, the virosome vaccine induces better immunity than repeated near-lethal live virus infections, resulting in the induction of neutralizing antibodies, with predominantly a Th1 profile, cellular immunity, and vaginal IgA.  Different routes of application are possible (intranasal, intramuscular).
 
 
Next steps:
 
We have identified the key elements of the vaccine that induce the protective immune response. In 2012 little funds will be allocated to this vaccine as the RSV vaccine is the priority.

STRATEGY

Our strategy is to extend the application of our key scientific approaches to new vaccines by:

 
·
Exploiting the results and knowledge of mucosal protection based vaccines
 
·
Leveraging the effective and safe virosome vaccine technology and know-how
 
·
Advancing existing vaccine candidates only through Phase II clinical trials
 
·
Maintaining a comprehensive IP portfolio
 
·
Adopting a flexible cost model based on a combination of in-house expertise and best-in-class outsourcing
 
·
Entering into strategic partnerships with leading pharmaceutical companies

Our vision is to become the market leader in the development of new generation mucosal and virosomes based vaccines. We develop preventative vaccines that generate an efficient mucosal protection through mucosal antibodies as first line of defense, while blood antibodies would act synergistically, as a second line of defense.

To date, our focus has been on achieving very favorable results from the development of a core vaccine pipeline of HIV-1 and malaria, while securing the IP and know-how for the virosome technology and the mucosal based approach.

By using a lean and flexible operational platform and contracting with best-in-class partners, we have avoided the upfront cost of in-house resources and gained access to the best existing know-how.  This has maximized the return on development and research.

MATERIAL THIRD PARTY AGEREEMENTS

For the development of its vaccines the Company has entered into several agreements in the form of license agreements, exploitation agreements or co-ownership agreements with third parties. These third parties provide specific experience and capabilities or provide access to specific know how, which are not the core competence of Mymetics. The Company believes that the following third party agreements are material.  The following summaries of their material terms are qualified in their entirety by reference to the agreements filed as exhibits to prior SEC filings by the Company as set forth under Item 15 (Exhibits and Financial Statement Schedules).

INSERM

The Co-Ownership Agreement dated January 8, 2008 for two patents PCT IB2005/001180 and PCT IB2005/001182, has been cancelled by Mymetics as it does not fit the strategic direction of the company.

Exploitation Agreement dated January 8, 2008 that allows Mymetics to have global rights to develop, promote, produce, co-produce, sell and distribute HIV products based on any of the following three patents: PCT IB2005/001180, PCT IB2005/001182 and PCT IB 2006/000466 has been amended on August 4, 2011 and now only includes the PCT IB 2006/000466 patent.

Milestone payments:
Closing of fund raising round of at least E10 million before January 5, 2012: E400,000.
End of phase I: E70,000.
End of phase II: E1,600,000.
End of Phase III: E300,000.
First commercialization: E500,000.

Royalty payments in case of direct or indirect commercialization:
For sales below E250,000,000: 1%.
For sales between E250,000,000 and E500,000,000: 2%
For sales more than E500,000,000: 3%.
 
 
The Exploitation Agreement terminates upon the later of: the expiration date of the longest-lived patent, or, 10 years after the first date of commercialization of the product, unless  terminated by INSERM following market approval of the HIV products in the event (i)Mymetics does not develop the product for a period more than six months, (ii) the exploitation of the product is interrupted for a period of more than twelve months, or (iii) there is an absence of sales for twelve months starting from the date of market approval.

PEVION

License Agreement dated March 1, 2007 for the exclusive use by Mymetics of the Pevion virosomes for its HIV vaccine (HIV Agreement).

Milestone payments:
10% of all monetary consideration (excluding royalties) received from 3rd parties.
E400,000 if Mymetics starts phase I clinical trial.

Royalties:
10% of all monetary consideration received by Mymetics.

The HIV Agreement is subject to termination by either party in writing following a notice period of ninety days and in absence of such termination, will terminate in each country as of the expiration date of the longest-lived product patent rights on a country-by-country basis.
 
Acquisition and License agreement dated May 19, 2008 for the Pevion virosomes and peptides for the malaria vaccine (Malaria Agreement).

Milestone payments:
E2,000,000 start of phase II clinical trial in Africa.

Royalties:
maximum of 15% on all income generated from markets in which the malaria vaccine is sold on a commercial basis.

The Malaria Agreement is subject to termination by either party in writing following a notice period of ninety days and, in the absence of such termination, will terminate in each country as of the expiration date of the longest-lived product patent rights on a country-by-country basis.

PX’THERAPEUTICS

Gp41 Manufacturing Technology Agreement dated 26 January 2009 between PX Therapeutics and Mymetics under which PX Therapeutics agrees to transfer the know-how to manufacture recombinant Gp41 for Mymetics’ HIV vaccine. The term of the agreement is for 5 years after the date of signature and renewable at the request of Mymetics. Mymetics is allowed to terminate the contract one month after the event of knowledge transfer has been confirmed by both parties.

Annual retainer of E200,000 until the earlier of five years or when the HIV vaccine is market approved.

Milestone payments:
E600,000 after knowledge transfer
E900,000 when Mymetics has deposited and received acceptance of the IMPD (or IND) with regulatory authorities, such as the FDA in the United States, to start a clinical trial.

Royalty payments:
1% on all income generated from the commercialization of the product.

NORWOOD IMMUNOLOGY
 

Share Purchase Agreement dated March 5, 2009 pursuant to which Mymetics acquired Mymetics B.V. from Norwood Immunology Ltd. Payments to Norwood are for the intranasal influenza vaccine, Mymetics’ RSV vaccine and Mymetics’ HSV vaccine.

Intranasal Influenza vaccine:
a milestone payment of  E3,000,000 at the start of a phase III clinical trial of Mymetics’ intranasal influenza vaccine if the phase III clinical trial commences before April 1, 2013.

RSV vaccine:
a milestone payment of E2,800,000 if Mymetics enters into a license agreement for a RSV vaccine with a third party before April 1, 2011 and royalty payments of  50% on all income generated by Mymetics after the commercialization of the RSV vaccine.
This consideration has expired.

HSV vaccine:
payments of 25% of all income generated by Mymetics. This includes all upfront, milestone and royalty income received for Mymetics’HSV vaccine.

INTELLECTUAL PROPERTY

 
·
WO/1999/025377 (GP41 mutée) Method for obtaining vaccines for preventing the pathogenic effects related to a retroviral infection Mymetics Corp. Expiration date: 16.11.2018

 
·
WO/2005/010033 (GP41 ter) New soluble and stabilized trimeric form of GP 41 polypeptide Mymetics Corp. Expiration date: 28.07.2024
 
 
·
WO/2007/099446 (Virosome-P1) Virosome-like vesicles comprising gp41 - derived antigens Mymetics Corp. + INSERM + Pevion Expiration date: 01.03.2027

 
·
US/61/202 215 (GP41 4th gen) Mymetics Corp. Expiration date: 05.02.2029

 
·
US/61/202 219 (Splitting GP41) Mymetics Corp. Expiration date: 05.02.2029

 
·
WO/2004/106366 (UK39) Methods for synthetizing conformationally constrained peptides, peptidomimetics and use of such peptidomimetics as synthetic vaccines Mymetics Corp. Expiration date: 01.06.2024
 

 
·
WO/2004/078099 (AMA49) Compositions and methods for the generation of immune response against Malaria Mymetics Corp. Expiration date: 02.03.2023

 
·
WO/1995/032706 (INEX) Virosome-mediated intracellular delivery of therapeutic agents Bestewil BV Expiration date: 31.05.2015

 
·
WO/2004/045641 (APRECS) Antigen-complexes  Bestewil BV  Expiration date: 19.11.2023

 
·
WO/2004/110486 (Lipopeptide) Functionally reconstituted viral membranes containing adjuvant Bestewil BV  Expiration date: 17.06.2024
 
 
·
WO/2004071492 (DCPC) Virosome-like particles Bestewil BV  Expiration date:   12.02.2023

COMPETITION

We have not yet developed an actual product or generated significant revenues. Our future competitive position depends on our ability to successfully develop our intellectual property, and to license or sell such intellectual property to third parties on financially favorable terms. Although we believe that the results of our research and development activities have been favorable, there are numerous entities and individuals conducting research and development activities in the area of human biology and medicine, all of which could be considered competitors.
 
 
The worldwide vaccine market is dominated by five large multinational companies: Sanofi Pasteur S.A. (formerly Aventis Pasteur S.A.), Merck & Co., GlaxoSmithKline Plc, Pfizer-Wyeth and Novartis-Chiron Inc. Smaller and mid-size companies such as Crucell (acquired by Johnson & Johnson) and Novavax are developing vaccines in the same area as Mymetics.

While many of these entities have greater financial and scientific capabilities, and greater experience in conducting pre-clinical and clinical trials, the Company believes that its innovative approach to vaccine development is very competitive.

GOVERNMENTAL REGULATION

Our strategy was crafted in part to minimize the risks usually associated with Phase III clinical trials, regulatory approvals and marketing, which are expected to be borne by one or more future partners.

We contract with third parties to perform research projects related to our business. These third parties are located in various countries and are subject to the applicable laws and regulations of their respective countries. Accordingly, regulation by government authorities in the United States, the European Union and other foreign countries is a significant factor in the development, manufacture and marketing of our proposed products by our future partners and therefore has a direct impact on our ongoing research and product development activities.

Any products that will be developed by our future partners based on our technology will require regulatory approval by government agencies prior to commercialization. In particular, like human therapeutic products, vaccines are subject to rigorous pre-clinical studies and clinical trials and other approval procedures of the FDA and similar regulatory authorities in foreign countries. In addition, various federal and state statutes and regulations will also govern, or influence testing, manufacturing, safety, labeling, storage and record keeping related to such products and their marketing. The process of obtaining these approvals and the subsequent substantial compliance with appropriate federal and state statutes and regulations require the expenditure of substantial time and financial resources. Obtaining royalties in the future will depend on our future partners' ability to obtain and maintain the necessary regulatory approvals.

Pre-clinical studies are generally conducted on laboratory animals to evaluate the imunogenicity (induction of antibodies of the cellular response), first proof of potential efficacy and safety of a product. In light of our limited financial resources, clinical trials of our vaccines are conducted first in Europe under the European Union (“EU”) guidelines, a quicker and less expensive approach than seeking FDA approval, which we intend to do after EU approval is granted and we expect our financial resources to be greater. There is however no certainty that such EU approval will be granted. The Phase I, II and III EU clinical trials are similar to those required for FDA approval. The FDA requirements are addressed in this discussion.

The process which is described below is therefore to be considered as generic background information which is relevant to the industry as a whole. As such process applies to drugs as well as vaccines, the term “drugs” as used hereafter refers also to vaccines.

In the United States, any company developing new drugs must submit the results of pre-clinical studies to the FDA as a part of an investigational new drug application, or IND, which application must become effective before it can begin clinical trials in the United States. An IND becomes effective 30 days after receipt by the FDA unless the FDA objects to it and the IND must be annually updated. Typically, clinical evaluation involves a time-consuming and costly three-phase process.
 
 
Phase I refers typically to closely monitored clinical trials and includes the initial introduction of an investigational new drug into human patients or normal healthy volunteer subjects. Phase I clinical trials are designed to determine the safety (metabolic and pharmacologic actions of a drug in humans), the side effects associated with increasing drug doses and, if possible, to gain early evidence on effectiveness (inductions of antibodies in our case). Phase I trials also include the study of structure-activity relationships and mechanism of action in humans, as well as studies in which investigational drugs are used as research tools to explore biological phenomena or disease processes. During Phase I clinical trials, sufficient information about a drug's pharmacokinetics and pharmacological effects should be obtained to permit the design of well-controlled, scientifically valid, Phase II studies. The total number of subjects and patients included in Phase I clinical trials varies but is generally in the range of 20 to 80 people. Bioanalyses on the clinical trial samples in different in vitro assays must be conducted under good laboratory practice (GLP). At this stage, all techniques must be qualified according to standard operating procedures (SOPs) but it is not required to have the assays validated. Validating an assay consists of analyzing or verfiying the 8 or 9 assay parameters as described in the US pharmacopeia or the ICH guidelines: 1) accuracy; 2) precision; 3) limit of detection; 4) limit of qualification; 5) specificity; 6) linearity and range; 7) robustness; and 8) system suitability.

Phase II refers to controlled clinical trials conducted to evaluate the safety and effectiveness of a drug for a particular indication or indications in patients with a disease or condition under study and to determine the common short-term side effects and risks associated with the drug. These clinical trials are typically well-controlled, closely monitored and conducted in a relatively small number of patients, usually involving no more than several hundred subjects. For prophylactic vaccines, a fraction of the enrolled subjects for the Phase II trials should ideally correspond to people at higher risk to contract the infection due to their social and/or sexual behaviors. At this stage, all identified and relevant techniques must be qualified and validation should be initiated prior starting the phase II and full validation must be achieved at the end of the phase II, prior launching Phase III. Completion of Phase II trials generally corresponds to the “stage of development” where big Pharma have a high interest for the drug product.

Phase III refers to expanded controlled clinical trials, which many times are designated as "pivotal trials" designed to reach end points that the FDA has agreed in advance, if met, would allow approval for marketing. These clinical trials are performed after preliminary evidence suggesting effectiveness of a drug has been obtained. Meanwhile, prophylactic vaccines are different because the true evidence of effectiveness is obtained during the Phase III trials involving an important fraction of the enrolled subjects with high risk of contracting the pathogen, providing more statistical power. Depending on the vaccine tested, vaccinated subjects are monitored over a period of few months to several years and the infection rate (protection) of this group is compared to the placebo treated group. Phase III trials are intended to gather additional information about the effectiveness and safety that is needed to evaluate the overall benefit-risk relationship of the drug and to provide an adequate basis for physician labeling. Phase III clinical trials can include from several hundred to tens of thousands of subjects depending on the specific indication being tested.

The FDA closely monitors the progress of each of the three phases of clinical trials that are conducted in the United States and may, at its discretion, re-evaluate, alter, suspend or terminate the testing based upon the data accumulated to that point and the FDA's assessment of the risk/benefit ratio to the patient. Once Phase III trials are completed, drug developers submit the results of pre-clinical studies and clinical trials to the FDA, in the form of a new drug application, or NDA, for approval to commence commercial sales. In response, the FDA may grant marketing approval, request additional information or deny the application if the FDA determines that the application does not meet the predetermined study goals and other regulatory approval criteria.

Furthermore, the FDA may prevent a drug developer from marketing a product under a label for its desired indications, which may impair commercialization of the product.

If the FDA approves the new drug application, the drug becomes available for physicians to prescribe in the United States. After approval, the drug developer must submit periodic reports to the FDA, including descriptions of any adverse reactions reported. The FDA may request additional studies, known as Phase IV clinical trials to evaluate long-term effects.
 
 
We will be required to comply with similar regulatory procedures in countries other than the United States.

In addition to studies requested by the FDA after approval, a drug developer may conduct other trials and studies to explore use of the approved compound for treatment of new indications. The purpose of these trials and studies and related publications is to broaden the application and use of the drug and its acceptance in the medical community.

At this time, neither we nor any of our partners have submitted any of its pre-clinical results to the FDA. It is only in 2009 that the local Belgium Authority Approval to begin Phase I human clinical trials for our HIV vaccine was received.

Our future partner(s) will have to complete an approval process, similar to the one required in the United States, in virtually every foreign target market in order to commercialize product candidates based on our technology in those countries. The approval procedure and the time required for approval vary from country to country and may involve additional testing. Approvals (both foreign and in the United States) may not be granted on a timely basis, or at all. In addition, regulatory approval of prices is required in most countries other than the United States. We face the risk that the resulting prices would be insufficient to generate an acceptable return to our partner(s).

EMPLOYEES

 Jacques-François Martin was our President and Chief Executive Officer. Additionally, there are two full-time employees of Mymetics Corporation: Ronald Kempers, Chief Financial Officer and Chief Operating Officer, Dr. Sylvain Fleury, Ph.D., Chief Scientific Officer. Christian Rochet resigned as Senior Advisor to the President effective June 1, 2011. On January 30, 2012, Jacques-François Martin resigned as President and CEO of Mymetics no later than effective May 1, 2012 but he remained as Chairman of the Board. On March 23, 2012 we announced that in connection with our financing efforts and decision to pursue new strategic alternatives, including moving our headquarters to the United States, we appointed Dr. Christopher S. Henney to be Chairman of our Board of Directors and Grant Pickering to be President and CEO and a member of our Board of Directors. We also added Ulrich Burkhard, Managing Partner and Director of the Marcuard Family Office, as a director. Concurrent with the appointment of these three individuals to these Board and executive positions, Jacques-François Martin resigned as Chairman of our Board of Directors and Sylvain Fleury, Christian Rochet and Martine Reindle resigned as members of of Board of Directors.

Our Swiss subsidiary, Mymetics S.A., has on its payroll three employees: Director of Finance, Director of R&D and an Office Manager.

Mymetics B.V. has one full time executive officer (CSO) plus two full-time assistants.
 
 
As of December 31, 2011, our Luxembourg affiliate had no employees.

WWW.MYMETICS.COM

News and information about Mymetics Corporation are available on our web site, www.mymetics.com.


You should carefully consider the risks described below together with all of the other information included in this report on Form 10-K. An investment in our common stock is risky. If any of the following risks materialize, our business, financial condition or results of operations could be adversely affected. In such an event, the trading price of our common stock could decline, and you may lose part or all of your investment. When used in these risk factors, the terms "we" or "our" refer to Mymetics Corporation and its subsidiaries.

We are a company engaged exclusively in research and development activities, focusing primarily on vaccine development. Our strategy was crafted in part to minimize the risks usually associated with clinical trials, regulatory approvals and marketing, which we would expect to be borne by our future partner(s).
 

WE HISTORICALLY HAVE LOST MONEY, EXPECT LOSSES TO CONTINUE FOR THE FORESEEABLE FUTURE AND MAY NEVER ACHIEVE PROFITABILITY.

We historically have lost money. In the years ended December 31, 2011, and December 31, 2010, we sustained net losses of approximately E10,539,000 and E11,428,000, respectively. At December 31, 2011, we had an accumulated deficit of approximately E64,057,000. Total cash disbursed since 1990 for operating activities, including research and development, is E48,751,000.
 
The amount of these losses may vary significantly from year-to-year and quarter-to-quarter and will depend on, among other factors:

the timing and cost of product development;

the progress and cost of preclinical and clinical development programs;

the timing and cost of obtaining necessary regulatory approvals;

the timing and cost of sales and marketing activities for future products; and

the costs of pending and any future litigation of which we may be subject.

We currently are engaged in research and development activities and do not have any commercially marketable products. The product research and development process requires significant capital expenditures, and we do not have any other sources of revenue to off-set such expenditures.

Accordingly, we expect to generate additional operating losses at least until such time as we are able to generate significant revenues.

To become profitable, we will need to generate revenues to offset our operating costs, including our general and administrative expenses. We may not achieve or, if achieved, sustain our revenue or profit objectives, and our losses may increase in the future, and, ultimately, we may have to cease operations.

In order to generate new and significant revenues, we must successfully develop and commercialize our proposed products or enter into collaborative agreements with others who can successfully develop and commercialize them. Our business plan is predicated on commercializing our products in collaboration with others. Even if our proposed products are commercially introduced, they may never achieve market acceptance and we may never generate significant revenues or achieve profitability.

WE NEED TO RAISE SUBSTANTIAL ADDITIONAL CAPITAL TO FUND OUR OPERATIONS AND WE MAY BE UNABLE TO RAISE SUCH FUNDS ON A TIMELY BASIS AND ON ACCEPTABLE TERMS.

We need to address our working capital needs to allow us to continue devoting our efforts to development of the business instead of raising needed capital. If we must devote a substantial amount of time to raising capital, it will delay our ability to achieve our business plan within the time frames that we now expect, which could increase the amount of capital we need and could threaten the success of our business if competitors are able to produce an effective vaccine to the market ahead of us.

OUR LIMITED OPERATING HISTORY MAKES IT DIFFICULT TO EVALUATE OR PREDICT OUR FUTURE BUSINESS PROSPECTS.

We have no operating history, and our operating results are impossible to predict because we have not begun selling any products. We are in the development stage, and our proposed operations are subject to all of the risks inherent in establishing a new business enterprise, including:

the absence of an operating history;

the lack of commercialized products;
 
 
insufficient capital;

expected substantial and continual losses for the foreseeable future;

limited experience in dealing with regulatory issues;

limited marketing experience;

an expected reliance on third parties for the commercialization of ourproposed products;

a competitive environment characterized by numerous, well-establishedand well-capitalized competitors;

uncertain market acceptance of our proposed products; and

reliance on key personnel.

The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the formation of a new business, the development of new technology, and the competitive and regulatory environment in which we will operate.  See "Description of the Business".

Because we are subject to these risks, you may have a difficult time evaluating our business and your investment in our company.

OUR PROPOSED VACCINES ARE IN THE DEVELOPMENT STAGES AND WILL LIKELY NOT BE COMMERCIALLY INTRODUCED BEFORE 2018, IF AT ALL.

Our proposed key products still are in the development stage and will require further development, preclinical and clinical testing and investment prior to commercialization in the United States and abroad. See "Description of the Business". While we are pleased about the progress made to date on these products, we cannot be sure that these products in development will:

be successfully developed;

prove to be safe and efficacious in clinical trials;

meet applicable regulatory standards or obtain required regulatory approvals;

demonstrate substantial protective or therapeutic benefits in theprevention or treatment of any disease;

be capable of being produced in commercial quantities at reasonable costs;

obtain coverage and favorable reimbursement rates from insurers andother third-party payers; or

be successfully marketed or achieve market acceptance by physiciansand patients.

We do not intend to undertake any product development beyond Phase II human clinical trials (i.e., Phase III clinical studies) or be responsible for obtaining regulatory approval or marketing the products.  Nevertheless, even if we are successful in selling or licensing our products to another pharmaceutical company, it is likely that any revenues we may receive in connection with those arrangements will depend upon other companies’ sales, which will, in turn, depend upon the factors stated above.
 
THE LOSS OF KEY SCIENTIFIC OR INDUSTRIAL PARTNERS WOULD DIMINISH OUR ABILITY TO ACHIEVE OUR BUSINESS PLAN.
 
 
Certain components or know-how obtained from partners such as Protein eXpert S.A. and PX’Therapeutics, supplier of GMP grade engineered mutated gp41 protein, or Pevion Biotech Ltd., supplier and integrator of virosomes, are key components of our vaccines currently under development. Accordingly, the loss of any of these components or know-how might prevent us from achieving our business plan, despite the fact that contractual safeguards are in place.

OUR BUSINESS MODEL IS PREDICATED ON OUR BELIEF THAT WE WILL BE ABLE TO ENGAGE LARGE PHARMACEUTICAL COMPANIES TO PARTNER WITH US IN THE DEVELOPMENT OF OUR PRODUCTS AND FAILURE TO DO SO WILL LIKELY MAKE US UNATTRACTIVE AS AN ACQUISITION TARGET.

We anticipate that we will need a large pharmaceutical company to assist us with human trials and financing.  See "Funding Requirements".  Our failure to succeed in this endeavor will have a dramatic adverse result regarding our financial needs and ability to successfully sell any products that we develop.

IF WE FAIL TO OBTAIN REGULATORY APPROVAL TO COMMERCIALLY MANUFACTURE OR SELL ANY OF OUR FUTURE PRODUCTS, OR IF APPROVAL IS DELAYED OR WITHDRAWN, WE WILL BE UNABLE TO GENERATE REVENUE FROM THE SALE OF OUR PRODUCTS.

We must obtain regulatory approval to sell any of our products in the United States and abroad. In the United States, we must obtain the approval of the FDA for each product or drug that we intend to commercialize. The FDA approval process is typically lengthy and expensive, and approval is never certain. Products to be commercialized abroad are subject to similar foreign government regulation.

Generally, only a very small percentage of newly discovered pharmaceutical products that enter preclinical development are approved for sale. Because of the risks and uncertainties in biopharmaceutical development, our proposed products could take a significantly longer time to gain regulatory approval than we expect or may never gain approval. If regulatory approval is delayed or never obtained, our management's credibility, the value of our company and our operating results and liquidity would be adversely affected. Furthermore, even if a product gains regulatory approval, the product and the manufacturer of the product may be subject to continuing regulatory review. Even after obtaining regulatory approval, we may be restricted or prohibited from marketing or manufacturing a product if previously unknown problems with the product or its manufacture are subsequently discovered. The FDA may also require us to commit to perform lengthy post-approval studies, for which we would have to expend significant additional resources, which could have an adverse effect on our operating results and financial condition.

Although we have conducted pre-clinical studies, costly and lengthy human clinical trials are required to obtain regulatory approval to market our proposed vaccine, and the results of the trials are highly uncertain. In addition, the number of pre-clinical studies and human clinical trials that the FDA requires varies depending on the product, the disease or condition the product is being developed to address and regulations applicable to the particular product. Accordingly, we may need to perform additional pre-clinical studies using various doses and formulations before we can begin human clinical trials, which could result in delays in our ability to market any of our products. Furthermore, even if we obtain favorable results in pre-clinical studies on animals, the results in humans may be different.

After we have conducted pre-clinical studies in animals, we must demonstrate that our products are safe and effective for use on the target human patients in order to receive regulatory approval for commercial sale. The data obtained from pre-clinical and human clinical testing are subject to varying interpretations that could delay, limit or prevent regulatory approval. We face the risk that the results of our clinical trials in later phases of clinical trials may be inconsistent with those obtained in earlier phases. A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials, even after experiencing promising results in early animal or human testing. Adverse or inconclusive human clinical results would prevent us from filing for regulatory approval of our products. Additional factors that can cause delay or termination of our human clinical trials include:
 
 
slow patient enrollment;

timely completion of clinical site protocol approval and obtaininginformed consent from subjects;

longer trial time than foreseen to demonstrate efficacy or safety;

adverse medical events or side effects in immunized patients; and

lack of effectiveness of the vaccines being tested.

Delays in our clinical trials could allow our competitors additional time to develop or market competing products and thus can be extremely costly in terms of lost sales opportunities and increased clinical trial costs.

EVEN IF OUR PROPOSED PRODUCTS RECEIVE EU AND FDA APPROVAL, THEY MAY NOT ACHIEVE EXPECTED LEVELS OF MARKET ACCEPTANCE, WHICH COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL POSITION AND OPERATING RESULTS AND COULD CAUSE THE MARKET VALUE OF OUR COMMON STOCK TO DECLINE.

Even if we are able to obtain required regulatory approvals for our proposed products, the success of those products is dependent upon market acceptance by physicians and patients. Levels of market acceptance for our new products could be impacted by several factors, including:

the availability of alternative products from competitors;

the price of our products relative to that of our competitors;

the timing of our market entry; and

the ability to market our products effectively.

Some of these factors are not within our control. Our proposed products may not achieve expected levels of market acceptance. Additionally, continuing studies of the proper utilization, safety and efficacy of pharmaceutical products are being conducted by the industry, government agencies and others. Such studies, which increasingly employ sophisticated methods and techniques, can call into question the utilization, safety and efficacy of previously marketed products. In some cases, these studies have resulted, and may in the future result, in the discontinuance of product marketing. These situations, should they occur, could have a material adverse effect on our business, financial position and results of operations, and the market value of our common stock could decline.

IF WE ARE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY, WE MAY NOT BE ABLE TO COMPETE AS EFFECTIVELY.

The pharmaceutical industry places considerable importance on obtaining patent and trade secret protection for new technologies, products and processes. Our success will depend, in part, upon our ability to obtain, enjoy and enforce protection for any products we develop or acquire under United States and foreign patent laws and other intellectual property laws, preserve the confidentiality of our trade secrets and operate without infringing the proprietary rights of third parties.

Where appropriate, we seek patent protection for certain aspects of our technology. However, our owned and licensed patents and patent applications may not ensure the protection of our intellectual property for a number of other reasons:

- Competitors may interfere with our patents and patent process in a variety of ways. Competitors may claim that they invented the claimed invention before us or may claim that we are infringing on their patents and therefore we cannot use our technology as claimed under our patent. Competitors may also have our patents reexamined by showing the patent examiner that the invention was not original or novel or was obvious.
 
 
19

 
 
- We are in the development stage and are in the process of developing proposed products. Even if we receive a patent, it may not provide much practical protection. If we receive a patent with a narrow scope, then it will be easier for competitors to design products that do not infringe on our patent. Even if the development of our proposed products is successful and approval for sale is obtained, there can be no assurance that applicable patent coverage, if any, will not have expired or will not expire shortly after this approval. Any expiration of the applicable patent could have a material adverse effect on the sales and profitability of our proposed product.

- Enforcing patents is expensive and may require significant time by our management. In litigation, a competitor could claim that our issued patents are not valid for a number of reasons. If the court agrees, we would lose protection on products covered by those patents.

- We also may support and collaborate in research conducted by government organizations or universities. We cannot guarantee that we will be able to acquire any exclusive rights to technology or products derived from these collaborations. If we do not obtain required licenses or rights, we could encounter delays in product development while we attempt to design around other patents or we may be prohibited from developing, manufacturing or selling products requiring these licenses. There is also a risk that disputes may arise as to the rights to technology or products developed in collaboration with other parties.

It also is unclear whether efforts to secure our trade secrets will provide useful protection. While we use reasonable efforts to protect our trade secrets, our employees or consultants may unintentionally or willfully disclose our proprietary information to competitors resulting in a loss of protection. Enforcing a claim that someone else illegally obtained and is using our trade secrets, like patent litigation, is expensive and time consuming, and the outcome is unpredictable. In addition, courts outside the United States are sometimes less willing to protect trade secrets. Finally, our competitors may independently develop equivalent knowledge, methods and know-how.

CLAIMS BY OTHERS THAT OUR PRODUCTS INFRINGE THEIR PATENTS OR OTHER INTELLECTUAL PROPERTY RIGHTS COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION.

The pharmaceutical industry has been characterized by frequent litigation regarding patent and other intellectual property rights. Patent applications are maintained in secrecy in the United States and also are maintained in secrecy outside the United States until the application is published. Accordingly, we can conduct only limited searches to determine whether our technology infringes the patents or patent applications of others. Any claims of patent infringement asserted by third parties would be time-consuming and could likely:

result in costly litigation;

divert the time and attention of our technical personnel and management;

cause product development delays;

require us to develop non-infringing technology; or

require us to enter into royalty or licensing agreements.
 
Although patent and intellectual property disputes in the pharmaceutical industry often have been settled through licensing or similar arrangements, costs associated with these arrangements may be substantial and often require the payment of ongoing royalties, which could hurt our gross margins. In addition, we cannot be sure that the necessary licenses would be available to us on satisfactory terms, or that we could redesign our products or processes to avoid infringement, if necessary. Accordingly, an adverse determination in a judicial or administrative proceeding, or the failure to obtain necessary licenses, could prevent us from developing, manufacturing and selling some of our products, which could harm our business, financial condition and operating results.

WE HAVE ANTI-TAKEOVER PROVISIONS IN OUR BYLAWS THAT MAY DISCOURAGE A CHANGE OF CONTROL.
 

Our bylaws contain provisions that could discourage, delay or prevent a change in control of our Company or changes in our management that the stockholders of our company may deem advantageous. These provisions

limit the ability of our stockholders to call special meetings of stockholders;

provide for a staggered board;

provide that our board of directors is expressly authorized to make, alter orrepeal the bylaws; and

-
establish advance notice requirements for nominations for election to our boardor for proposing matters that can be acted upon by stockholders at stockholder meetings.


None.


Since March 1, 2009, we leased new office space in a campus recently established near Lausanne (40 miles from Geneva) by the local state government to attract promising biotech companies. This houses our scientific management and administrative operations.

Bestewil Holding B.V. and its subsidiary Mymetics B.V operate from a similar biotechnology campus near Leiden in the Netherlands, where they occupy about 100 square meters for office and laboratory use.

We also conduct research operations at the properties of various third parties, worldwide.


Neither we, nor our wholly owned subsidiaries 6543 Luxembourg S.A., Mymetics S.A., Bestewil Holding B.V. nor its subsidiary Mymetics B.V. are presently involved in any litigation incident to our business except as follows:

Pursuant to our indemnification obligations under Delaware law, our charter and the prior consulting agreements with Christian Rochet and Ernst Luebke, respectively, we have paid a judgment for €173,000 entered against these two former officers and directors entered in November 2010 in a case styled Luebke Rochet / Serres – ref. 120494.  The lawsuit was brought in the Tribunal de Commerce in Lyon, France, by our former CEO, Dr. Pierre-Francois Serres, who sued Messrs. Rochet and Luebke for an alleged breach of a shareholders agreement in 1998. Mr. Serres brought this case against Messrs. Rochet and Luebke following the dismissal of the case he filed against us for an alleged unlawful termination of Mr. Serres by Messrs. Rochet and Luebke in 2003.  We appealed to this decision and the case has been dismissed in favour of Messrs. Rochet and Luebke. The €173,000 funds have been returned to the Company.


None.
 

PART II


 
(a)
Market Information. The Corporation's common stock is quoted on the OTC Bulletin Board under the trading symbol "MYMX"

The following table sets forth the quarterly high and low sales price per share of our common stock for the periods indicated. The prices represent inter-dealer quotations, which do not include retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

FISCAL QUARTER ENDED
 
HIGH
   
LOW
 
             
2010
           
March 31
  $ 0.195     $ 0.100  
June 30
    0.210       0.101  
September 30
    0.170       0.101  
December 31
    0.175       0.090  
                 
2011
               
March 31
  $ 0.150     $ 0.150  
June 30
    0.125       0.125  
September 30
    0.055       0.055  
December 31
    0.034       0.026  

 
(b)
Stockholders. At March 29, 2012, we had approximately 650 holders of record of our common stock, some of which are securities clearing agencies and intermediaries.

 
(c)
Dividends. We have not paid any dividends on our common stock and do notintend to pay any dividends in the foreseeable future.

 
(d)
Securities Authorized for Issuance under Equity Compensation Plans.


EQUITY COMPENSATION PLAN INFORMATION

The following table provides information about the common stock that may be issued upon the exercise of options, warrants and rights under all of the Company’s existing equity compensation plans as of December 31, 2011.

             
Number of Securities remaining
   
Number of Securities to be
   
Weighted Average Exercise
 
available for issuance under
   
issued upon exercise of
   
Price of Outstanding
 
equity compensation plans
   
Options, Warrants and
   
Options, Warrants and
 
(excluding securities
Plan
 
Rights
   
Rights
 
reflected in column (a))
Category
 
(a)
   
(b)
 
(c)
Equity Compensation Plans
             
Approved by Security Holders
      (1)        
2001 Plan
    392,500 (2)   $ U.S. 0.77    
2009 Plan
    4,350,000 (3)   $ U.S. 0.15    
Total
    4,742,500     $ U.S. 0.20  
207,500

(1)     Equity compensation plans approved by security holders include (i) the Company’s 1994 Amended and Restated Stock Option Plan, (ii) its 1995 Qualified Incentive Stock Option Plan and (iii) our 2001 Stock Option Plan.

(2)     Includes (i) 392,500 shares of common stock underlying options granted under the registrant’s 2001 Stock Option Plan.

(3)     In June 2010 our Board of Directors approved a 2009 Stock Incentive Plan that will need authorization by our stockholders.  We have granted 4,350,000 options under that Plan.

In additon, Mymetics granted Norwood Immunology Limited (“NIL”) an option to acquire shares of Mymetics common stock equal to the result obtained by dividing $9,609,000 by the Conversion Price. As part of the Share Purchase Agreement, if Mymetics had issued shares of capital stock in connection with a financing to repay the Bridge Loan that had more favorable financial rights and preferences than the original conversion price or other terms, NIL had the right, at its election, to acquire those shares at the better terms. Since the Company converted the Bridge Loan to finance the acquisition at $0.50 in September 2010, the result is that the option allows NIL to acquire 19,218,450 shares of common stock.

Further, on July 1 2010, Mymetics issued a warrant to Round Enterprises providing the right to buy 32 million shares of Mymetics common stock at a price of US$ 0.25 per share. The warrant is valid from July 1, 2010 until June 30, 2013.

ISSUANCES OF UNREGISTERED SECURITIES

Set forth below is information regarding our sales of unregistered securities during the period commencing on January 1, 2011 and ending on March 29, 2012. These issuances were made pursuant to individual contracts that are discrete from one another and in reliance on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and/or Regulation D promulgated under the Securities Act, as transactions by an issuer not involving any public offering to persons who are sophisticated in such transactions and who had knowledge of and access to sufficient information about us to make an informed investment decision. Among this information was the fact that the securities were restricted securities.

On August 25, 2011, an existing investor was issued 41,542,722 common shares of Mymetics Corporation at $.08 per share, as conversion of a loan.

On December 5, 2011, an existing investor was issued 20,511,451 common shares of Mymetics Corporation at $.08 per share, as conversion of a loan.



Not Applicable.
 

GENERAL

The following discussion and analysis of the results of operations and financial condition of us for the years ended December 31, 2011 and 2010 should be read in conjunction with our audited consolidated financial statements and related notes and the description of our business and properties included elsewhere herein.

RESULTS OF OPERATIONS - YEAR ENDED DECEMBER 31, 2011 COMPARED TO YEAR ENDED DECEMBER 31, 2010

We received grant income of E25,000 and E4,000 for the years ended December 31, 2011 and 2010, respectively. We also received E150,000 and E150,000 related to license agreement fees for the years ended December 31, 2011 and 2010, respectively. The lack of product revenue is directly attributable to our focus on research and development. We believe that this focus will continue for the foreseeable future. Future revenues could be affected by local and other economic conditions, technology, competitive forces, and/or challenges to our intellectual property.

Research and development expenses decreased to E1,343,000 in the current period from E3,083,000 in the comparative period of 2010, a decrease of 56.44%. The decrease of R&D was mainly related to efforts of the Company to reduce expenses until it secures additional equity financing to allow it to enter into the clinical trials for its HIV and RSV. Research and development expenses of E1,343,000 in 2011 include E725,000 of scientific staff expenses and fees of our scientific consultants, E418,000 paid to scientific partners and suppliers of scientific services, E200,000 for know-how annuity.

General and administrative expenses decreased by 54.22% to E1,520,000 in the year ended December 31, 2011 from E3,320,000 in the comparable period of 2010, primarily as a result of the impact of a decrease in the exercise price on outstanding warrants in 2010 and reduced costs until the company secures additional equity financing.

Induced conversion cost of E807,000 incurred in the year ended December 31, 2010 resulted from a reduction in the conversion price of shareholder debt. No such expense was incurred in the comparative period of 2011.

Interest expense decreased by 2.65% to E2,759,000 in the year ended December 31, 2011 from E2,834,000 in the comparable period of 2010, due to the decrease of total loans from conversion into shares during 2011.

The fair value of acquisition-related contingent consideration increased by 79.11% to E5,753,000 in the year ended December 31, 2011 from E3,212,000 in the comparable period of 2010. A reassessment of fair value required an increase of E2,541,000 in the acquisition-related contingent consideration liability during  2011 mainly due to the return of the  intra-nasal influenza vaccine to Mymetics and higher expected future milestone payments related to the RSV vaccine. Further, the timelines for possible out-licensing upfront and milestone payments for the RSV and HSV vaccine candidates have been moved out to reflect the Company’s strategy to out-license after a successful Phase II and start of a Phase III. Due to the return of the intra-nasal influenza vaccine to Mymetics, the license contract intangible asset has been fully impaired in 2011.

CRITICAL ACCOUNTING POLICIES AND MANAGEMENT ESTIMATES
 

The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires management to use judgment in making estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Certain of the estimates and assumptions required to be made relate to matters that are inherently uncertain as they pertain to future events. While management believes that the estimates and assumptions used were the most appropriate, actual results could differ significantly from those estimates under different assumptions and conditions. The following is a description of those accounting policies believed by management to require subjective and complex judgments which could potentially affect reported results.

REVENUE RECOGNITION AND RECEIVABLES

As a development stage company, we have not generated any material revenues since we commenced our current line of business in 2001, and management does not anticipate generating any material revenues on a sustained basis unless and until a substantial licensing agreement or other commercial arrangement is entered into with respect to our technology.

However, should we engage in any form of commercial activity, a revenue recognition and receivables policy according to the following principles would be implemented:

Revenue related to the sale of products is recognized when all of the following conditions are met: persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable, and collectability is reasonably assured. Receivables are stated at their outstanding principal balances. Management reviews the collectability of receivables on a periodic basis and determines the appropriate amount of any allowance. Based on this review procedure, management has determined that the allowances at December 31, 2011 and 2010 are sufficient. We charge off receivables to the allowance when management determines that a receivable is not collectible. We may retain a security interest in the products sold.

RESEARCH AND DEVELOPMENT

Research and development costs are expensed as incurred.

CURRENCY TRANSLATION

Our reporting currency is the Euro because substantially all of our activities are conducted in Europe. Non-Euro assets and liabilities of our subsidiaries are translated at the rate of exchange at the balance sheet date. Revenues and expenses are translated at the average rate of exchange throughout the year. Unrealized gains or losses from these translations are reported as a separate component of comprehensive income. Transaction gains or losses are included in general and administrative expenses in the consolidated statements of operations. The translation adjustments do not recognize the effect of income tax because we expect to reinvest the amounts indefinitely in operations.

IN-PROCESS RESEARCH AND DEVELOPMENT

In-Process research and development (referred to as IPR&D) represents the estimated fair value assigned to research and development projects acquired in a purchased business combination that have not been completed at the date of acquisition and which have no alternative future use. IPR&D assets acquired in a business combination are capitalized as indefinite-lived intangible assets. These assets remain indefinite-lived until the completion or abandonment of the associated research and development efforts. During the period prior to completion or abandonment, those acquired indefinite-lived assets are not amortized but are tested for impairment annually, or more frequently, if events or changes in circumstances indicate that the asset might be impaired.

IMPAIRMENT OF LONG-LIVED ASSETS
 

Long-lived assets, which include property and equipment, and the license contract, are assessed for impairment whenever events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. The impairment testing involves comparing the carrying amount to the forecasted undiscounted future cash flows generated by that asset. In the event the carrying value of the assets exceeds the undiscounted future cash flows generated by that asset and the carrying value is not considered recoverable, impairment exists. An impairment loss is measured as the excess of the asset’s carrying value over its fair value, calculated using a discounted future cash flow method. An impairment loss would be recognized in net income in the period that the impairment occurs.

GOODWILL

Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value based test. Goodwill is assessed for impairment on an annual basis as of April 1st of each year or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment model prescribes a two-step method for determining goodwill impairment. In the first step, we determine the fair value of our reporting unit using an enterprise value analysis. If the net book value of our reporting unit exceeds the fair value, we would then perform the second step of the impairment test which requires allocation of our reporting unit’s fair value to all of its assets and liabilities using the acquisition method prescribed under authoritative guidance for business combinations with any residual fair value being allocated to goodwill. An impairment charge will be recognized only when the implied fair value of our reporting unit’s goodwill is less than its carrying amount.

The Company has conducted its impairment testing as of April 1, 2011 of its goodwill recognized in connection to the acquisition of Bestewil. In conclusion of this impairment testing, the carrying amount of the reporting unit was lower than the estimated fair value of the reporting unit. As the fair value of the reporting unit is higher than the carrying amount, Step 2 of the goodwill impairment test did not need to be completed.

CONTINGENT CONSIDERATION

We account for contingent consideration in a purchase business combination in accordance with applicable guidance provided within the business combination rules. As part of our consideration for the Bestewil acquisition, we are contractually obligated to pay additional purchase price consideration upon achievement of certain commercial milestones and future royalties. Therefore, we are required to update our assumptions each reporting period, based on new developments, and record such amounts at fair value until such consideration is satisfied.

STOCK BASED COMPENSATION POLICY

Compensation cost for all share-based payments is based on the estimated grant-date fair value. The Company amortizes stock compensation cost ratably over the requisite service period.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note 1 of Notes to Consolidated Financial Statements for a full description of recent accounting pronouncements including the respective dates of adoption and effects on results of operations and financial condition.

BUSINESS PLAN

We subcontract our research project modules to best of class research teams. We pay for and coordinate the work, consolidate the results, and retain all associated intellectual property. On rare occasions, we execute partnership agreements with companies offering technologies that can enhance our products. As human clinical trials have been initiated, access to our owned laboratory facilities becomes necessary.
 

We will continue in the foreseeable future to outsource to specialized third parties all human clinical trials of our vaccines, such process being complex and highly regulated.

Our business plan is predicated by the size and availablility of our resources, which preclude us from pursuing our human clinical trials beyond phase II, which normally involves no more than 250-300 volunteers and a cost in the range of $5-10 million per phase I and II trial cycle. In contrast, phase III trial for a prophylactic vaccine involves up to 30,000 patients and several testing centers spread over two or more continents. The high number of volunteers, as well as the logistical complexity of such an undertaking, implies a cost-per-volunteer in the $10,000 to $12,000 range, or up to $360 million per phase III trial. Similarly, the cost and complexity of the vaccine registration procedure with the relevant European agencies can be very expensive. The cost of registration with the U.S. Food and Drug Administration (FDA) is generally significantly higher due to a variety of factors, including, potential product liability claims.

In light of the significant phase III costs, we expect to sign a partnership agreement with one or more of the major pharmaceutical companies active in the preventive vaccine market as soon as human clinical phase II trials are completed. Such partnership agreements typically involve an initial cash payment with covers the initial costs of R&D up to that time plus an adequate margin of profit, followed by a series of payments associated with specific milestones and finally, royalties on any sales of end products, assuming these have been approved by the various regulatory authorities involved, such as the FDA.

We are trying to achieve this for the HIV-1 vaccine by 2014, which has successfully completed  the Phase I in Belgium. Malaria is the other vaccine that already completed successfully a Phase Ia (adults in Switzerland) and more recently a Phase Ib (children in Tanzania). Partnership for HIV-1 and malaria phase II and III might also involve non-profit entities like the Bill and Melinda Gates Foundation or governmental agencies like the NIH. These dates are based on our results, which have been encouraging so far.

We aim to partner our intra-nasal influenza vaccine during 2012 or 2013, while we aim to partner our RSV vaccine around 2015, after completion of a successful Phase II.

We will enter into negotiations with potential pharmaceutical partners as soon as positive intermediary results will be observed in view of a partnership agreement as described above.
 
LIQUIDITY AND CAPITAL RESOURCES

We had E382,000 cash at December 31, 2011, compared to E1,811,000 at December 31, 2010.

As a development stage company, we have not generated significant material revenues since the current line of business was commenced in 2001, and we do not anticipate generating significant material revenues on a sustained basis unless and until a major licensing agreement or other commercial arrangement is entered into with respect to its technology.

As of December 31, 2011, we had an accumulated deficit of approximately E64.1 million and incurred losses of E10,539,000 in the year ended December 31, 2011. This compares with losses of E11,428,000 in the year ended December 31, 2010. These accumulated losses are principally associated with the research and development of our HIV vaccine and RSV vaccine technologies, the acquisition of its malaria project from Pevion Biotech Ltd. and the acquisition of Bestewil and Mymetics B.V. We expect to continue to incur expenses in the future for research, development and activities related to the future licensing of our technologies.
 
 
Net cash used in operating activities was E5,223,000 for the year ended December 31, 2011, compared to E7,870,000 for the year ended December 31, 2010. The major factor in 2010 was costs incurred in connection with our first HIV vaccine human clinical trial Phase I, while in 2011 the decrease was mainly related to efforts of the Company to reduce expenses until it secures additional equity financing to allow it to enter into the clinical trials for its HIV and RSV.

Investing activities provided cash of E109,000 for the year ended December 31, 2010, primarily due to proceeds from the sale of equipment. Investing activities for the year ended December 31, 2011 was E29,000 for the purchase of equipment in the Netherlands.

Financing activities provided cash of E3,820,000 for the year ended December 31, 2011, which includes new debt of E1,658,000 needed to fund 2011 operations, compared to E6,633,000 for the year ended December 31, 2010, which includes new debt needed to fund 2010 operations.

Our major shareholder, a member of our Board of Directors and another previous investor have made available an aggregate E28,200,000 in the form of notes payable including interest, the details of which are described in Note 3 of our financial statements.
 
The Company’s budgeted cash outflow, or cash burn rate, for 2012 is approximately E7,400,000 for research and fixed and normal recurring expenses, assuming the ability to obtain the necessary financing and without taking into account any grants that may be obtained.

Our monthly burn rate is only relevant as regards administration expenses and amounts to E200,000. Other expenditures related to vaccine research and development will be triggered as soon as the financing of the company is secured.

2012 budget
 
12 Months
 
GMP lots production & Human Clinical Trials Phase Ib (HIV)
  E  1,500,000  
RSV and HSV
    3,000,000  
Further Virosome R&D
    500,000  
Administration
    2,400,000  
Total
  E  7,400,000  

Management expects the cash outflow on R&D to increase while keeping administrative costs relatively stable. The planned increase in 2012 over 2011 will depend on the success of our financing activities.

Administration costs include E1,300,000 in gross salaries and related payroll costs for three of the Company’s executive officers, and payments under various consulting contracts.

Jacques-François Martin is our President and Chief Executive Officer. Additionally, there are three full-time employees of Mymetics Corporation: Ronald Kempers, Chief Financial Officer and Chief Operating Officer and Dr. Sylvain Fleury, Ph.D., Chief Scientific Officer, and Christian Rochet, who resigned as Senior Advisor to the President on June 1, 2011. On January 30, 2012,Jacques-François Martin resigned as President and CEO of Mymetics effective May 1, 2012 and he remains Chairman for the foreseeable future. The filling of the CEO position is being worked on by the Board.
 
In addition, our Swiss subsidiary, Mymetics S.A., has three employees on its payroll: Director of Finance, Director of R&D and an Office Manager. Mymetics BV has one full time executive officer (CSO) and two full-time assistants.
 
 
Included in administration costs are E400,000 of legal fees to outside corporate counsel, E200,000 audit and review fees to the Company’s independent accountants, and E220,000 in finance and acquisition expenses.

We intend to continue to incur additional expenditures during the next 12 months for additional research and development of our HIV and RSV vaccines. These expenditures will relate to the continued testing of its prototype vaccines and are included in the monthly cash outflow described above. Additional funding requirements during the next 12 months are needed to prepare for the next clinical trial for our HIV vaccine and to prepare for a Phase I clinical trial for our RSV vaccine.

In the past, we have financed our research and development activities primarily through debt and equity financings from various parties.

We anticipate that our normal operations will require approximately E7,400,000 in the year ending December 31, 2011. We will seek to raise the required capital from equity or debt financings, and grants through donors and potential partnerships with major international pharmaceutical and biotechnology firms. However, there can be no assurance that it will be able to raise additional capital on satisfactory terms, or at all, to finance its operations. In the event that we are not able to obtain such additional capital, we will be required to further restrict or even cease our operations.

RECENT FINANCING ACTIVITIES

During 2011, our principal source of funds has been shareholder loans. Two short term convertible loans with a carrying amount of E3,478,000 were converted into Mymetics common shares at a conversion price of $0.08 per share with an average exchange rate of $1.427 per Euro.

During 2011, the two main investors provided two loans each to the Company for a total of E1,658,000. The first loans were issued on August 4, 2014 for a total amount of E1,158,000, which was issued in two separate loans of USD1,200,000 and USD300,000 each. These two loans have a duration of 6 months and each carry an interest rate of 10% per year; the second loans were issued on November 8, 2011 for a total amount of E500,000, which was issued in two separate loans of E400,000 and E100,000 each. These two loans have a duration of 4 months and each carry an interest rate of 10% per year.

On April 1, 2012 the E2,500,000 loan from Norwood Immunology Ltd (NIL) will become due and the Company is currently in negotiation with NIL.

We have filed or are in the process of filing several new grant applications with European as well as U.S. Institutions in relation to our HIV-1 and malaria vaccines.

We anticipate using our current funds and those we receive in the future both to meet our working capital needs and for funding the ongoing vaccines pre-clinical research costs for our RSV and HSV while preparing for further clinical trials for our  HIV-AIDS vaccine.

Management does not anticipate that our existing capital resources will be sufficient to fund our cash requirements through the next six months. We do not have enough cash presently on hand, based upon our current levels of expenditures and anticipated needs during this period, and will need additional funding through future collaborative arrangements, licensing arrangements, and debt and equity financings under Regulation D and Regulation S under the Securities Act of 1933. We do not know whether additional financing will be available on commercially acceptable terms when needed.

If management cannot raise funds on acceptable terms when needed, we may not be able to successfully commercialize our technologies, take advantage of future opportunities, or respond to unanticipated requirements. If unable to secure such additional financing when needed, we will have to curtail or suspend all or a portion of our business activities and could be required to cease operations entirely. Further, if new equity securities are issued, our shareholders may experience severe dilution of their ownership percentage.
 
 
The extent and timing of our future capital requirements will depend primarily upon the rate of our progress in the research and development of our technologies, our ability to enter into a partnership agreement with a major pharmaceutical company, and the results of our present and future clinical trials.

To date, we have generated no material revenues from our business operations and are unable to predict when or if we will be able to generate revenues from licensing our technology or the amounts expected from such activities. These revenue streams may be generated by us or in conjunction with collaborative partners or third party licensing arrangements, and may include provisions for one-time, lump sum payments in addition to ongoing royalty payments or other revenue sharing arrangements.

OFF-BALANCE SHEET ARRANGMENTS

None


Not Applicable.
 

The consolidated financial statements and supplementary data required with respect to this Item 8, and as identified in Item 14 of this annual report, are included in this annual report.


None.


Disclosure Controls and Procedures

Under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer the Company conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures, as defined in Rule 13a−15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), as of the end of the period covered by this annual report. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded as of December 31, 2011 that the Company’s disclosure controls and procedures were effective such that the information required to be disclosed in the Company’s United States Securities and Exchange Commission (the “SEC”) reports is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control over Financial Reporting

Based on its evaluation under the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, the Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, concluded that its internal control over financial reporting were effective as of December 31, 2011.

This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, which permanently exempts non-accelerated filers from complying with Section 404(b) of the Sarbanes-Oxley Act of 2002.
 

Attached as exhibits to this Form 10-K are certifications of Mymetics’ Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), which are required in accordance with Rule 13a-14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This “Controls and Procedures” section includes information concerning the controls and controls evaluation referred to in the certifications.

Material Weakness Identified

None.

Changes in internal Control over Financial Reporting

Since the second quarter of fiscal year 2011, the Company relies on a professional and qualified consultant for complex transactions. Management believes that a corrective action has been taken during the second quarter of fiscal 2011 that has mitigated and tested the effectiveness of the material weakness related to the expertise for complex transactions as of the end of the period covered by this report.

Inherent Limitations on Effectiveness of Controls

Our management, including the CEO and CFO, does not expect that the Disclosure Controls or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within our company have been detected.
 
These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions of deterioration in the degree of compliance with policies or procedures.


None
 

PART III


Our number of directors is established at six, divided into three classes, designated as Class I, Class II and Class III. The term of the Class I directors will expire at the Company’s 2013 annual meeting of stockholders, the term of the Class II directors will expire at the 2014 annual meeting of stockholders, and the term of the Class III directors will expire at the 2012 annual meeting of stockholders. A plurality of the votes of the shares of the registrant’s common stock present in person or represented by proxy at the annual meeting and entitled to vote on the election of directors are required to elect the directors. The Board members have three year terms and in the absence of a vote at an annual meeting of stockholders, they continue for successive three year terms until they are replaced or resign.

The following table sets forth information regarding each of our current directors and executive officers:
 
             
EXPIRATION
 
             
OF TERM AS
 
NAME
 
CURRENT POSITION WITH THE COMPANY
 
AGE
   
A DIRECTOR
 
                 
Jacques-François Martin (Class II)
 
Chief Executive Officer, President and Director (appointed July 1, 2009)
    67       2012  
                     
Sylvain Fleury, Ph.D. (Class III)
 
Chief Scientific Officer (appointed November 3, 2003) and Director(appointed January 11, 2006)
    48       2012  
                     
Christian Rochet (Class II)
 
Director (appointed July 31, 2003)
    62       2014  
                     
Thomas Staehelin (Class II)
 
Director
    64       2014  
                     
Ernest M. Stern (Class II)
 
Director
    61       2014  
                     
Martine Reindle (Class II)
 
Director (appointed October 26, 2011)
    57       2014  
                     
Marc Girard, DVM, D.Sc.
 
Vice Chairman Scientific Advisory Board
    75       n/a  
                     
Ronald Kempers
 
Chief Financial Officer (appointed August 1, 2010)
    44       n/a  

JACQUES-FRANCOIS MARTIN

Mr. Martin is the Chief Executive Officer, President and a Director of Mymetics. Mr. Martin is also chairman and CEO of Parteurop, a biotech consulting company, and has a long history in biotechnology and public health. Prior to joining Mymetics in July 2009, he had been president of The Vaccine Fund, now GAVI Fund; he was CEO of Rhone-Poulenc Pharma in Hamburg, Germany before joining Institut Mérieux as vice-president of sales and marketing in 1976. He became CEO of Pasteur-Mérieux in 1998, where he was instrumental in the merger with Connaught Laboratories Ltd in Toronto. From 1996 to 1999, Mr. Martin was a member of the board of the French Institut National de la Santé et de la Recherche Médicale (INSERM). He is a past member of the GAVI Working Group and the Strategic Advisory Council of the Bill & Melinda Gates Children’s Vaccine Program and was a board member of the International AIDS Vaccine Initiative (IAVI). Mr. Martin holds an MBA from the Ecole des Hautes Etudes Commerciales, is a member of the French Academy of Technologies and an officer in the French Order of Merit.
 
 
Key Director Qualifications: Mr. Martin has extensive vaccine industry experience to assist raising the Company's credibility in the scientific community and to assist with introductions to strategic partners, including large pharmaceutical companies.
 
SYLVAIN FLEURY, Ph.D.

Dr. Fleury was appointed as our Chief Scientific Officer in November 2003 and as a Director on January 11, 2006. Following a scientific audit in 1997, Dr. Fleury was the first consultant recommending to the Swiss investors the development of the parental biotech company that became later Mymetics Corporation. Dr. Fleury has a broad knowledge in molecular and cellular Immunology and antigen design, with over 20 years of expertise in infectious diseases and HIV-1/AIDS field. Researcher at the Centre Hospitalier Universitaire Vaudois (CHUV) in Lausanne from 1997 to 2003, working on the immune regeneration in HIV-1 infected subjects and gene therapy. Dr. Fleury obtained his B.Sc. in Microbiology in 1985 from the University of Montreal (Canada), his M.Sc. in Virology in 1988 from the Institut Armand-Frappier (Laval, Canada) and his Ph.D. in Immunology in 1992 from the Clinical Research Institute of Montreal, Canada. Dr. Fleury also worked at the Columbia Hospital in New-York before doing his post-doc training from 1993 to 1996 at the National Institutes of Allergy and Infectious Diseases (NIAID/NIH) in Bethesda (Maryland, USA). Consultant for several biotechs, Dr. Fleury is a recipient of numerous awards; published in leading scientific journals with a high impact such as Science, Cell, Nature, Nature Medicine and Circulation.
 
Key Director Qualifications: Dr. Fleury has extensive scientific experience in the vaccines that the Company is developing and in the delivery system of these vaccines to maximize the effectiveness of the vaccines.

RONALD KEMPERS

Chief Operating Officer (since July 1, 2009) and was appointed Chief Financial Officer on August 1 2010. Senior business leader and entrepreneur, over 15 years of international business management, business development and finance experience with leading global corporations (Hewlett Packard, Oracle) and medical and IT start-ups. Mr. Kempers has a M.Sc. in Business Administration from the Erasmus University, Rotterdam School of Management and has continued further education with various executive courses, among which at IMD, Lausanne.

MARTINE REINDLE

Ms. Reindle was appointed as a Director on October 26, 2011. From 1983-2004, Ms. Reindle was a co-founder and President of Datasphere, an IT consulting and telecommunications software company primarily for financial institutions, that she sold in 2004 to the Fundtech Group. Since 2004 Ms. Reindle has been active as a business angel investor in eight medtech and IT companies where she provides business advice to management of those companies as a member of the board of directors or under a consulting agreement with these companies. Ms. Reindle graduated from the Institut d'Etudes Politiques in Grenoble, France where she received her degree in Economics and Finance. Mymetics expects to benefit from her business acumen and understanding the challenges of successfully growing an emerging biotech company.

CHRISTIAN ROCHET

Mr. Rochet was a former Chief Executive Officer of the Company. Prior to joining Mymetics in July 2003, he had been an independent business consultant on development and diversification strategies for over 21 years. He became a major shareholder of Mymetics’ former French subsidiary Mymetics S.A. (f.k.a. Hippocampe S.A.) in 1997, on the scientific advice of Dr. Sylvain Fleury, Ph. D., and was a director of that company between 1999 and 2001. On July 31, 2003, Mr. Rochet was elected as President and Director and appointed as Chief Executive Officer of the Company. Mr. Rochet resigned as President and CEO of Mymetics effective July 1, 2009, and as Senior Advisor to the President effective June 1, 2011.
 
 
DR. THOMAS STAEHELIN
 
Dr. Staehelin is Senior Managing Partner of Fromer, Schultheiss and Staehelin, a law firm located in Basel, Switzerland.  Dr. Staehelin focuses primarily on corporate and tax law.  Dr. Staehelin has served as a member of this law firm since 1975.  Dr. Staehelin also serves on the boards of various Swiss companies and is Chairman of the Chamber of Commerce of the Basel region.  In addition, Dr. Staehelin is Managing Director of the "Swiss Association of privately held Swiss Companies” and is a member of the Board of "economiesuisse," The Swiss Business Federation.  Dr. Staehelin received his Ph.D. degree in Law from the University of Basel.  He formerly served as a member of the cantonal parliament of Basel.
 
Key Director Qualifications: Dr. Staehelin has significant international business experience, financial expertise through his role as a lawyer and board member of many companies conducting business on a global basis and knowledge of the Swiss legal system to assist the Company with its Swiss subsidiaries.
 
ERNEST M. STERN

Ernest M. Stern was appointed as a Director in January 2008.  Mr. Stern is a partner in the law firm of Akerman Senterfitt LLP, which serves as outside U.S. counsel of Mymetics, where he specializes in securities and corporate law, representing public companies, investment banks and venture funds, and is the engagement partner for Mymetics.  Mr. Stern received his undergraduate degree from Bowdoin College (Phi Beta Kappa, summa cum laude), and his J.D and LL.M (Taxation) degrees from Georgetown University Law Center (Case and Note Editor, Law and Policy in International Business).
 
Key Director Qualifications: Mr. Stern has extensive international business experience and contacts through his representation as a U.S. lawyer of many companies engaged in international business, knowledge of state and federal laws applicable to the Company and finance knowledge.
 
MARC GIRARD, DVM, D. SC.

Professor Girard has been a Consultant to Mymetics since January 2004. Prior to joining Mymetics, Professor Girard served as Director General, Fondation Merieux, in Lyon, France between 2001 and 2003. Between 1999 and 2001, Professor Girard served as Director, European Research Center for Virology and Immunology (CERVI), Lyon, France. Professor Girard has also taught as a professor since 1966, most recently between 1984 and 1999 at the Institut Pasteur, Paris, France where he also served as the Head of Laboratory of Molecular Virology, Department of Virology, Institut Pasteur, Paris between 1980 and 1999. During his career, Professor Girard has served the medical community in a variety of capacities, including as Head, HIV Vaccine Task Force, French National Agency for AIDS Research (ANRS), Paris between 1988 and 1998, the Chairman, Department of Virology, Institut Pasteur, Paris between 1997 and 1999 and the Chairman, European Consortium for an HIV Vaccine (EuroVac), Brussels between 1999 and 2002. Professor Girard received his D.V.M. (Alfort Veterinary College) in 1960, his D. Sc. (University of Paris) in 1967 and completed a post doctoral fellow in 1966 through studies with Prof. James Darnell, MIT, then Albert Einstein College of Medicine and Prof. David Baltimore and Renato Dulbecco of the Salk Institute. Professor Girard is also the published author of several articles in his field of study.

SCIENTIFIC ADVISORY BOARD

In  2009 a member Scientific Advisory Board (SAB) was created, made up of eminent intellectuals from around the world with expertise related to the Company’s products as follows:

Chairman of the Scientific Advisory Board - Dr. Stanley Plotkin, Emeritus ProfessorWistar Institute, University of Pennsylvania, consultant to Sanofi Pasteur, developed the rubella vaccine in 1960s; worked extensively on the development and application of other vaccines including polio, rabies, varicella, rotavirus and cytomegalovirus as well as senior roles at the Epidemic Intelligence Service, U.S. Public Health Service; Aventis Pasteur (medical and scientific director); and Sanofi Pasteur (executive advisor).
Vice Chairman of the Scientific Advisory Board - Dr. Marc Girard, has over 20years of experience in the HIV-1 research field, past Director of the Mérieux Foundation and a consultant to the WHO and former Chairman of EuroVac (European Consortium for HIV vaccine).
 
 
Dr. Ruth Ruprecht, Harvard University, Dana Farber Cancer Institute, Boston USA
Dr. Ronald H. Gray, Johns Hopkins University, Baltimore, USA
Dr. Malegapuru William Makgoba, University of KwaZulu-Natal, Durban, South Africa
Dr. Souleymane Mboup, Cheikh Anta DIOP University, Dakar, Sénégal
Dr. Juliana McElrath, University of Washington, Seattle, USA
Dr. Odile Puijalon, Pasteur Institute, Paris, France
Dr. Caetano Reis e Sousa, Cancer Research UK, London, UK

AUDIT COMMITTEE

The Company’s board of directors has appointed Ernest M. Stern and Dr. Thomas Staehelin to serve as members of its Audit Committee.  The board of directors has determined that Dr. Staehelin qualifies as our "audit committee financial expert" and is independent as that term is defined under NASDAQ Rule 4200(a)(15).

CODE OF ETHICS

The registrant has adopted a Code of Ethics that applies to its executive officers, including its chief executive officer, as well as to the entire staff of the Company. A copy of the Code of Ethics is filed as an exhibit to Form 10-K annual report for the year ended December 31, 2011, hereby incorporated by reference.

MEETINGS OF THE BOARD OF DIRECTORS
 
During October 2011, the Board of Mymetics appointed Martine Reindle, one of the founders of Mymetics, to the Board of Directors to fill a current vacancy on the Board.

In 2011, our Board of Directors held ten meetings, five of which were conducted by telephone conference call, and acted by unanimous written consent three times.  All directors attended at least 75% of the total number of Board meetings.  The Board of Directors has determined that Mr. Stern is independent within the meaning of Section 10A and Rule 10A-3 of the Exchange Act. The Company does not have a formal policy regarding attendance by members of the board of directors at our annual meetings of stockholders since we did not hold an annual meeting in 2011.

Shareholders may contact our Board of Directors by mail addressed to the entire board of directors, or to one or more individual directors, at c/o Mymetics S.A., Biopole, Route de la Corniche 4, CH-1066 Epalinges, Switzerland, Attn: Secretary. All communications directed to our board of directors or individual directors in this manner will be relayed to the intended recipients.

We do not have a separate nominating committee and do not believe that such a committee is required at this time given our emphasis on research and development rather than active revenue generating business and our limited shareholder base.
 
DIRECTORS’ FEES
 
Our non-executive directors became eligible for compensation of E10,000 each for their services as directors in 2011.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities and Exchange Act of 1934, as amended, requires that executive officers, directors and persons who own more than 10% of a registered class of the Company’s equity securities to file reports of ownership and changes of ownership with the SEC within specified due dates. These persons are required by SEC regulations to furnish the Company with copies of all such reports they file. Based solely on the review of the copies of such reports furnished, we believe that, with respect to our fiscal year ended December 31, 2011, all of our executive officers, directors and 10% stockholders filed all required reports under Section 16(a) in a timely manner, except as follows: Dr Fleury due to incompatibility between the respectively Swiss and French legal procedures with the electronic filing procedure of the SEC.
 
 

Compensation Committee Report

The Compensation Committee of the Board of Directors (the “Committee”) is composed of one employee Director, Mr. Jacques-François Martin, our President and CEO, and two non-Executive directors, Mr. Ernst M. Stern and Mr. Thomas Staehelin.  The Compensation Committee does not have a charter.

The Committee met with management to review and discuss the Compensation Discussion and Analysis disclosures that follow. Based on such review and discussion, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K, and the Board has approved that recommendation.

Compensation Discussion and Analysis
 
The Committee is responsible for reviewing and approving the compensation paid to executive officers of the Company, including salaries, bonuses, stock grants and stock options. Following review and approval by the Committee, action pertaining to executive compensation for the two named executive officers, Ronald Kempers, CFO and Sylvain Fleury, CSO for 2011 is reported to the full Board of Directors for further consideration.

Compensation Philosophy
 
The Company’s compensation of executive officers and its philosophy regarding executive compensation is comprised of the following characteristics:

 
(i) 
Competitive base salary;
 
(ii) 
Granting stock awards as a portion of the total compensation, whichvest over a certain number of years; and
 
(iii)
Granting performance-based bonuses either in cash or common stock.
 
We believe our executive compensation should be designed to allow us to attract, motivate and retain executives of a high caliber to permit us to remain competitive in our industry. We desire to maintain for now a uniformity of base salary compensation in light of the contributions each of the three principal executives has either made, or is expected to make, to our ability to remain in business and achieve the level of success that we have reached in meeting scientific results, primarily to date with the HIV-AIDS vaccine. We take into account the compensation paid at similarly situated companies, both within and outside of our industry, when determining executive compensation. We believe that by granting shares of our Common Stock to our executives which vest over a certain number of years, we will be able to encourage executives to remain with us.

Additionally, individual performance of the executive is considered as a factor in determining executive compensation, as well as the overall performance of the Company, which, since we are pre-revenue and primarily involved in research and development, includes, but is not limited to, fund raising and meeting our business plan milestones on time and within budget, including  successful conclusion of strategic partner agreements and achieving the regulatory approvals to commercialize the HIV-AIDS and malaria vaccines, rather than earnings, revenue growth, cash flow and earnings per share which would be more typical for a company generating revenues and earnings. The Committee also uses subjective criteria it deems relevant in its reasonable discretion.
 
Compensation of Chief Executive Officer
 
Mr. Rochet joined the Company on July 31, 2003 as its Chief Executive Officer. Mr. Rochet was paid a base salary of E96,000 in calendar year 2004, Mr. Rochet’s salary was first increased to E120,000 in 2005, then E180,000 in 2006 and E216,000 in 2007. Mr. Rochet resigned as our President and CEO effective July 1, 2009 and became the Senior Advisor to the new President on a full-time basis with an annual salary of E108,000. Mr. Rochet resigned as Senior Advisor to the new President effective June 1, 2011. Mr. Rochet is entitled to finder’s fees of 3% on all funding amounts raised through his efforts.
 
 
Mr. Jacques-François Martin joined us on July 1, 2009 as our President and Chief Executive Officer for an annual compensation of E240,000.
 
Compensation of Chief Financial Officer and Chief Operating Officer

Mr. Kempers joined us on July 1, 2009 as Chief Operating Officer and was appointed Chief Financial Officer on August 1, 2010. Mr. Kempers was paid a base salary of CHF300,000 in calendar year 2011.
 
Compensation of Chief Scientific Officer

Dr. Fleury was the Company’s Scientific Consultant from July 31, 2003 until November 3, 2003 when he was appointed Chief Scientific Officer. Dr. Fleury was paid a base salary of E96,000 in calendar year 2004, the first full year of his employment by the Company.  The Company had very little cash and Mr. Fleury deferred a significant portion of his salary in 2004, 2005, and 2006.  As a result of Mr. Fleury’s efforts, the Company achieved important scientific goals for its HIV-AIDS vaccine that encouraged investment in the Company.  Dr. Fleury’s salary was first increased to E120,000 in 2005, then E180,000 in 2006 and E216,000 in 2007 based upon his success in the animal studies leading to the Company’s ability to commence Phase I clinical trials for its HIV-AIDS vaccine in addition to his role in the negotiations in concluding an agreement with Pevion Biotech Ltd. to acquire the malaria vaccine. As of January 1, 2010, Dr Fleury’s salary has been converted into CHF300,000, which is approximately equal to his previous salary of E216,000 at the exchange rate at that time and included also the employer’s share of social contributions. A contractual clause allowing for a 3% success fee upon sale of the Company to, or licensing of technology to, a major partner was deleted in favor of stock options.
 
 
SUMMARY COMPENSATION TABLE

The following table sets forth for the last three fiscal years information on the annual compensation earned by our directors and officers.
 
Name and Principal Position
       
Year
(E)
   
Salary
(E)
   
Bonus
(E)
   
Awards
(E)
   
Stock
Awards
(E)
   
Option Plan
(E)
   
Non-Equity
Incentive
Earnings
(E)
   
Changes in
Pension Value and
Nonqualified
Deferred
Compensation
Compensation
(E)
   
Total
Annual
Compensation
 
                                                             
Jacques-François Martin
    (1a )     2011     E 240,000 (4)     -       -       -       -       -       -     E 240,000 (4)
(PEO)             2010     E 240,000 (4)     -       -       -     E 196,427       -       -     E 436,427 (4)
              2009     E 120,000 (4)     -       -       -       -       -       -     E 120,000 (4)
                                                                                 
Christian J.-F. Rochet (PEO)
    (1b )     2011     E 45,000 (4)     -       -       -       -       -       -     E  45,000 (4)
              2010     E 108,000 (4)     -       -       -       -       -       -     E 108,000 (4)
              2009     E 180,000 (4)     -       -       -       -       -       -     E 180,000 (4)
                                                                                 
Sylvain Fleury, Ph. D.
    (2 )     2011     E 216,000 (4)     -       -       -       -       -       -     E 216,000 (4)
              2010     E 216,000 (4)     -       -       -     E  29,364       -       -     E 245,364 (4)
              2009     E 216,000 (4)     -       -       -       -       -       -     E 216,000 (4)
                                                                                 
Ronald Kempers
    (3 )     2011     E 216,000 (4)     -       -       -       -       -       -     216,000 (4)
              2010     E 216,000 (4)     -       -       -     E  92,881       -       -     E 308,881 (4)
              2009     E 108,000 (4)     -       -       -       -       -       -     E 108,000 (4)
                                                                                 
Thomas Staehelin, Dr.
    (5 )     2011     E 10,000       -       -       -       -       -       -     E  10,000 (5)
              2010     E 10,000       -       -       -       -       -       -     E  10,000 (5)
              2009     E 10,000       -       -       -       -       -       -     E  10,000 (5)
                                                                                 
Ernie Stern
    (6 )     2011     E 10,000       -       -       -       -       -       -     E  10,000 (6)
              2010     E 10,000       -       -       -       -       -       -     E  10,000 (6)
              2009     E 10,000       -       -       -       -       -       -     E  10,000 (6)
 
(1a)
Mr. Martin has been Mymetics’ President and Chief Executive Officer from July 1, 2009.

(1b)
Mr. Rochet has been Mymetics’ President and Chief Executive Officer from July 31, 2003 to July 1, 2009.

(2) 
Dr. Fleury has been appointed as Mymetics’ Chief Scientific Officer on November 3, 2003.

(3) 
Mr.Kempers has been Mymetics’ Chief Operating Officer since July 1, 2009 and was appointed Chief Financial Officeron August 1 2010.

(4) 
See below "Employment Agreements".

(5) 
Dr. Staehelin is a member of the Board of Directors and of the Audit Committee of the Company. He was elected on July 2nd, 2007as non-executive director and eligible for annual compensation of E10,000 for attendance at the Board meetings, whether in person or by telephone.

(6) 
Mr. M. Stern is a member of the Board of Directors and of the Audit Committee of the Company. He was elected on January 21st, 2008 as non-executive director and eligible for annual compensation of E10,000 for attendance at the Board meetings, whether in person or by telephone..
 
 
Thetables entitled "OPTION EXERCISES AND STOCK VESTED," "PENSION BENEFITS," "NONQUALIFIED DEFERRED COMPENSATION" and "DIRECTOR COMPENSATION" and the respective discussions related to those tables have been omitted because no compensation required to be reported in those tables was awarded to, earned by or paid to any of the named executive officers or directors in any of the covered fiscal years.

Employment Agreements
 
Under the Executive Employment Agreement for Sylvain Fleury Ph.D., he is employed as CSO for five years commencing July 1, 2006.  Dr. Fleury receives an annual salary of E216,000. During the employment period, at the discretion of the Board and the Compensation Committee and based on the company’s performance and individual achievements, The executive shall be eligible for an annual bonus to be paid in cash, stock or stock options.  If Dr. Fleury is terminated without cause or he terminates for good reason, he is entitled to a lump-sum payment equal to the greater of 24 months of his salary or the remaining term of his employment agreement. Retroactive to January 1, 2010, Dr. Fleury’s salary has been converted into CHF300,000, which is approximately equal to his previous salary of E216,000, which included also the employer’s share of social contributions.

Under the Executive Employment Agreement for Ronald Kempers, he is employed as COO for five years commencing July 1, 2009.  Mr. Kempers receives an annual salary of CHF300,000, which is approximately equal to E216,000 and is entitled to participate in the stock incentive plan.  If Mr. Kempers is terminated without cause or he terminates for good reason, he is entitled to a lump-sum payment equal to 12 months of his salary.


The following table sets forth information about the beneficial ownership of our common stock as of December 31, 2011, by: (a) each of our named executive officers; (b) each of our directors; (c) each person known to the management to be the beneficial owner of more than 5% of our outstanding voting securities; and (d) all of our current executive officers and directors as a group. The following is based solely on statements and reports filed with the Securities and Exchange Commission or other information we believe to be reliable.

There were 295,318,813 shares of our common stock outstanding on March 29, 2012. Beneficial ownership has been determined in accordance with the rules of the Securities and Exchange Commission. Except as indicated by the footnotes below, we believe, based on the information furnished, that the persons and entities named in the tables below have sole voting and investment power with respect to all shares of common stock that they beneficially own, subject to applicable community property laws.

In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options or warrants held by that person that are currently exercisable or exercisable within 60 days of March 29, 2012, are deemed outstanding. These shares of common stock, however, are not deemed outstanding for the purposes of computing the percentage ownership of any other person.
 
 
NAME AND ADDRESS OF BENEFICIAL OWNER
 
TITLE
OF CLASS
 
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
   
PERCENT OF CLASS
 
Round Enterprises Ltd. St. Peter Port, Guernsey
 
Common
    121,705,078       44.09 %
                     
Dr. Thomas Staehelin (1)  Director
 
Common
    12,479,907       4.52 %
                     
Martine Reindle (1) Director
 
Common
    9,022,653 (2)     3.27 %
                     
Dr. Sylvain Fleury (1)Chief Scientific Officer, and Director
 
Common
    6,500,000 (4)     2.35 %
                     
Christian Rochet (1) Former Chief Executive Officer, and Director
 
Common
    4,580,389 (3)     1.66 %
                     
Jacques-François Martin (1) Chief Executive Officer, President and Director
 
Common
    1,580,307       0.57 %
                     
Mr. Ernest M. Stern (1) Director and outside Counsel
 
Common
    1,500,000       0.54 %
                     
Prof. Marc Girard (1)Consultant and member of the SAB
 
Common
    500,000 (5)     0.18 %
                     
Prof. Morgane Bomsel (1)Consultant and member of the SAB
 
Common
    500,000 (6)     0.18 %
                     
Mr. Ronald Kempers (1) CFO and COO
 
Common
    100,000       0.04 %
                     
All current executive officers and directors as a group (7 persons)
 
Common
    35,763,256       12.96 %
 
 
40

 
 
(1)
Address is Mymetics Corporation, c/o Mymetics S.A., Biopole, Route de la Corniche 4, CH-1066 Epalinges (Switzerland).
 
(2)
Of which 9,022,653 acquired at the early stages of the company and prior to being elected as director.
 
(3)
Of which 1,627,009 acquired prior to being elected as director and appointed as officer, 1,000,000 acquired through conversion of unpaid salary and expenses and 6,000,000 acquired as bonus, of which 4,046,620 was sold during year 2010.
 
(4)
Of which 500,000 issued for services, 1,000,000 acquired through conversion of unpaid salary and expenses and 5,000,000 acquired as bonus.
 
(5)
Of which 500,000 issued for services and 500,000 acquired through conversion of unpaid fees and expenses. 500,000 have been sold in 2006.
 
(6)
500,000 issued for services rendered.
 

During 2011, there were no transactions, and there are currently no proposed transactions, to which we were, are or will be a party in which the amount involved exceeds $120,000 and in which any of our directors, executive officers or holders of more than 5% of our common stock, or an immediate family member of any of the foregoing, had or will have a direct or indirect interest.

Furthermore, it is our intention to ensure that all future transactions, including loans, between us and our officers, directors and principal stockholders and their affiliates are on terms no less favorable to us than those that could be obtained from unaffiliated third parties.


The following table provides information about the fees billed to us for professional services rendered by Peterson Sullivan LLP during fiscal years 2011 and 2010:

   
2011
   
2010
 
             
Audit Fees
  $ 64,876     $ 75,839  
Audit-Related Fees
    -       -  
Tax Fees
    13,409       15,905  
All Other Fees
    -       -  
                 
Total
  $ 78,285     $ 91,744  

Audit Fees. Audit fees consist of fees for the audit of our annual financial statements or services that are normally provided in connection with statutory and regulatory annual and quarterly filings or engagements.

Audit-Related Fees. Audit-related fees consist of fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported as Audit Fees. During fiscal 2011 and 2010, no services were provided in this category.
 

Tax Fees. Tax fees consist of fees for tax compliance services, tax advice and tax planning. During fiscal 2011 and 2010, the services provided in this category included assistance and advice in relation to the preparation of corporate income tax returns.

All Other Fees. Any other fees not included in Audit Fees, Audit-Related Fees or Tax Fees.

Pre-Approval Policies and Procedures.

Our audit Committee pre-approved all services to be provided by Peterson Sullivan LLP.
 
 
PART IV


 
(a)
(1)
Index to Financial Statements
       
     
Report of Independent Registered Public Accounting Firm
       
     
Consolidated Balance Sheets
       
     
Consolidated Statements of Operations and Comprehensive Loss
       
     
Consolidated Statements of Changes in Shareholders' Equity (Deficit)
       
     
Consolidated Statements of Cash Flows
       
     
Notes to Consolidated Financial Statements
       
 
(a)
(2)
ALL OTHER SCHEDULES HAVE BEEN OMITTED BECAUSE THEY ARE NOT APPLICABLE OR THE REQUIRED INFORMATION IS SHOWN IN THE FINANCIAL STATEMENTS OR NOTES THERETO.
       
 
 
(3)
 List of Exhibits
       
 
2.1
 
Share Exchange Agreement dated December 13, 2001 between the Corporation and the stockholders of Mymetics S.A. listed on the signature page thereto (1)
       
 
2.2
 
Share Exchange Agreement dated December 13, 2001 between the Company and the stockholders of Mymetics S.A. listed on the signature page thereto (1)
       
 
2.3
 
Purchase Agreement dated October 17, 1998 between the Company and the majority stockholders of Nazca Holdings Ltd. (2)
       
 
2.4
 
Amendment to the Purchase Agreement dated October 17, 1998 between the Company and the majority stockholders of Nazca Holdings Ltd. (3)
       
 
2.5
 
Revised Purchase Agreement dated July 28, 1999 between the Company and the majority stockholders of Nazca Holdings Ltd. (4)
       
 
2.6
 
Share Exchange Agreement dated July 30, 2002 between the Company and the stockholders of Mymetics S.A. listed on the signature page thereto (5)
       
 
3 (i)
 
 Articles of Incorporation of the Company (as amended through May 10, 2002) (6)
       
 
3 (ii)
 
Bylaws (7)
       
 
4.1
 
Form of Specimen Stock Certificate (8)
       
 
4.2
 
Form of letter regarding Warrant (8)
       
 
4.3
 
Form of Share Exchange Agreement (8)
       
 
9.1
 
Voting and Exchange Trust Agreement dated March 19, 2001, among the Company, 6543 Luxembourg S.A. and MFC Merchant Bank S.A. (8)
       
 
10.1
 
Services Agreement dated May 31, 2001, between the Company and MFC Merchant Bank, S.A.(7)
       
 
10.2
 
Employment Agreement dated May 3, 2001, between Pierre-Francois Serres and the Company (7)
 
 
 
10.3
 
Indemnification Agreement dated March 19, 2001, between the Company and MFC Bancorp Ltd. (7)
       
 
10.4
 
Agreement dated for reference May 15, 2000, between the Company and Maarten Reidel (7)
       
 
10.5
 
Preferred Stock Redemption and Conversion Agreement dated for reference December  21, 2000, between the Company and Sutton Park International Ltd. (10)
       
 
10.6
 
Preferred Stock Conversion Agreement dated for reference December 21, 2000, between the Company and Med Net International Ltd. (11)
       
 
10.7
 
Preferred Stock Conversion Agreement dated December 21, 2000, between the Company and Dresden Papier GmbH (11)
       
 
10.8
 
Assignment Agreement dated December 29, 2000, among the Company, Mymetics S.A. and MFC Merchant Bank S.A. (1)
       
 
10.9
 
Credit Facility Agreement dated July 27, 2000, between MFC Merchant Bank, S.A. and the Company (1)
       
 
10.10
 
Amended Credit Facility Agreement dated for reference August 13, 2001, between MFC Merchant Bank, S.A. and the Company (16)
       
 
10.11
 
Second Amended Credit Facility Agreement dated for reference February 27, 2002, between MFC Merchant Bank, S.A. and the Company (16)
       
 
10.12
 
Amended and Restated Credit Facility Agreement dated for reference February 28, 2003, among MFC Merchant Bank, S.A., MFC Bancorp Ltd., and the Company (16)
       
 
10.13
 
Guarantee dated for reference February 28, 2003, by MFC Bancorp Ltd. to MFC Merchant Bank S.A. (16)
       
 
10.14
 
Shareholder Agreement dated March 19, 2001, among theCompany, the Holders of Class B Exchangeable PreferentialNon-Voting Shares of 6543 Luxembourg S.A. signatory thereto and6543 Luxembourg S.A.(8)
       
 
10.15
 
Support Agreement dated March 19, 2001, between the Companyand 6543 Luxembourg S.A. (8)
       
 
10.16
 
1995 Qualified Incentive Stock Option Plan (12)
       
 
10.17
 
Amended 1994 Stock Option Plan (13)
       
 
10.18
 
2001 ICHOR Company Stock Option Plan (7)
       
 
10.19
 
Employment Agreement dated March 18, 2002, between the Company and Peter P. McCann (14)
       
 
10.20
 
Consulting Agreement dated August 31, 2001, between the Company and Michael K. Allio (8)
       
 
10.21
 
Amendment to Consulting Agreement dated August 21, 2002, between the Company and Michael K. Allio (16)
       
 
10.22
 
Employment Agreement dated March 18, 2002, between the Company and Dr. Joseph D. Mosca (15)
 
 
   
 
10.23
 
eparation Agreement and Release dated January 31, 2003,between the Company and Peter P. McCann (16)
       
 
10.24
 
Director and Non-Employee Stock Option Agreement dated July 19, 2001, between the Company and Robert Demers (8)
 
 
 
10.25
 
Director and Non-Employee Stock Option Agreement dated July 19, 2001, between the Company and Michael K. Allio (8)
       
 
10.26
 
Director and Non-Employee Stock Option Agreement dated July 19, 2001, between the Company and John M. Musacchio (8)
       
 
10.27
 
Director and Non-Employee Stock Option Agreement dated July 19, 2001, between the Company and Patrice Pactol (8)
       
 
10.2
 
Director and Non-Employee Stock Option Agreement dated July 19, 2001, between the Company and Pierre-Francois Serres (8)
       
 
10.29
 
Director and Non-Employee Stock Option Agreement dated July 23, 2002, between the Company and Pierre-Francois Serres (16)
       
 
10.30
 
Director and Non-Employee Stock Option Agreement dated July 23 2002, between the Company and Patrice Pactol (16)
       
 
10.31
 
Director and Non-Employee Stock Option Agreement dated July 23,2002, between the Company and Robert Demers (16)
       
 
10.32
 
Director and Non-Employee Stock Option Agreement dated July 23, 2002, between the Company and John M. Musacchio (16)
       
 
10.33
 
Director and Non-Employee Stock Option Agreement dated July 23, 2002, between the Company and Michael K. Allio (16)
       
 
10.34
 
Director and Non-Employee Stock Option Agreement dated August 21, 2002, between the Company and Michael K. Allio (16)
       
 
10.35
 
Director and Non-Employee Stock Option Agreement dated June 20, 2002, between the Company and Peter P. McCann (16)
       
 
10.36
 
Director and Non-Employee Stock Option Agreement dated July 23, 2002, between the Company and Peter P. McCann (16)
       
 
10.37
 
Director and Non-Employee Stock Option Agreement dated February 6, 2003, between the Company and Peter P. McCann (16)
       
 
10.38
 
Patent Pledge Agreement dated November __, 2002 among Mymetics S.A., Mymetics Deutschland GmbH, the Company and MFC Merchant Bank S.A. (16)
       
 
10.39
 
Third Amendment to the Credit Facility Agreement dated for Reference December 31, 2006, between MFC Merchant Bank, S.A. and the Company (17)
       
 
10.40
 
Fourth Amendment to the Credit Facility Agreement dated for Reference February 16, 2005, between MFC Merchant Bank, S.A. and the Company (17)
       
 
10.41
 
Consulting Agreement dated for reference January 1, 2004, between the Centre Hospitalier Universitaire Vaudois (CHUV), the Company and Dr. Sylvain Fleury, Ph.D. (18)
       
 
10.42
 
Consulting Agreement dated for reference January 1, 2004, between the Company and Professor Marc Girard, DVM, D.Sc. (18)
       
 
10.43
 
Cooperation and Option Agreement dated March 10, 2005, between the Company and Pevion A.G. (18)
       
 
10.44
 
Consulting Agreement dated March 23, 2005, between the Company and Northern Light International. (18)
 
 
 
10.45
 
Sixth Amended Credit Facility Agreement dated for reference December 31, 2005, between MFC Merchant Bank, S.A. and theCompany (19)
       
 
10.46
 
Employment Agreement dated July 1, 2006, between the Company and Dr. Sylvain Fleury (20)
       
 
10.47
 
Employment Agreement dated July 1, 2006, between the Company and Christian Rochet (20)
       
 
10.48
 
Employment Agreement dated July 1, 2006, between the Company and Ernst Luebke (20)
       
 
10.49
 
License Agreement dated March 1, 2007, between the Company and Pevion Biotech Ltd. (21)
       
 
10.50
 
Settlement Agreement dated March 19, 2007 between Mymetics and MFC Merchant Bank S.A. (22)
       
 
10.51
 
Co-ownership Agreement dated January 8, 2008 between the Company, INSERM and Pevion Biotech Ltd. (23)
       
 
10.52
 
Co-ownership Agreement dated January 8, 2008 between the Company and INSERM (23)
       
 
10.53
 
Exploitation Agreement dated January 8, 2008 between the Company and INSERM (23)
       
 
10.54
 
Non-Executive Director Agreement dated 21 January between the     Company and Mr Ernest M Stern.(24)
       
 
10.55
 
NGIN Material Transfer Agreement dated 11 February 2008 between the Company, Institute Cochin, Université Paris Descartes and Pevion Biotech.(25)
       
 
10.56
 
Acquisition & License Agreement dated 19 May 2008 between the  Company and Pevion Biotech Ltd. (26)
       
 
10.57
 
Extension of Convertible Note Maturity Date Agreement dated 22  August 2008 between the Company, Anglo Irish Bank and Round   Enterprises Ltd. (27)
       
 
10.58
 
Gp41 Manufacturing Technology Agreement dated 26 January 2009  between the Company and PX Therapeutics (28)
       
 
10.59
 
Share Purchase Agreement pursuant to which Mymetics purchased all issued and outstanding shares of capital stock of Bestewil Holding B.V. (“Bestewil”) from its parent, Norwood Immunology Limited (“NIL”), and all issued and outstanding shares of capital stock of Virosome Biologicals B.V. now held by Bestewil. (29)
       
 
10.60
 
Resignation of Prof Marc Girard as Head of vaccine development for reasons of personal health. (30)
       
 
10.61
 
Completion of Share Purchase Agreement pursuant to which Mymetics purchased all issued and outstanding shares of capital stock of   Bestewil Holding B.V. and Virosome Biologicals B.V. including Unregistered Sales of Equity Securities, Financial Statements and Exhibits. (31)
       
 
10.62
 
Completion of Share Purchase Agreement pursuant to which Mymetics purchased all issued and outstanding shares of capital stock of   Bestewil Holding B.V. and Virosome Biologicals B.V. including Statements and Exhibits. (32)
 
 
 
10.63
 
Election of Jacques-François Martin as a member of the Board of Directors and Chairman of the Board, resignation of Christian Rochet as President and CEO and agreement of Jacques-François    Martin to serve as President and CEO. (33)
       
 
10.64
 
Consulting Agreement dated September 1, 2009, between the Company and Mr. Christian Rochet.
       
 
10.65
 
Resignation of Ernest Luebke as Chief Finance Officer and Board member.
       
 
10.66
 
Resignation of Christian Rochet as Senior Advisor to the President.
       
 
11.1
 
Statement Regarding Calculation of Per Share Earnings.
       
   
Code of Ethics.
       
   
List of Subsidiaries
       
 
24.1
 
Powers of Attorney (included on the signature page hereto)
       
   
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14 of the Securities Exchange Act of 1934
       
   
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14 of the Securities Exchange Act of 1934
       
   
Section 1350 Certification of Chief Executive Officer and Chief Financial Officer
       
 
101.INS
 
Instance Document
       
 
101.SCH
 
XBRL Taxonomy Extension Schema Document
       
 
101.CAL
 
XBRL Taxonomy Extension Calculation Linkbase Document
       
 
101.DEF
 
XBRL Taxonomy Extension Definition Linkbase Document
       
 
101.LAB
 
XBRL Taxonomy Extension Label Linkbase Document
       
 
101.PRE
 
XBRL Taxonomy Extension Presentation Linkbase Document
 

(1)
Incorporated by reference to the Company's Schedule 14C filed with the Securities and Exchange Commission on April 26, 2001.

(2)
Incorporated by reference to the Company's report on Form 8-K filedwith the Securities and Exchange Commission on October 22, 1998.

(3)
Incorporated by reference to the Company's report on Form 8-K/A filed with the Securities and Exchange Commission on April 15, 1999.

(4)
Incorporated by reference to the Company's report on Form 8-K/A filed with the Securities and Exchange Commission on August 13, 1999.

(5)
Incorporated by reference to the Company's Amendment No. 1 to Form S-1 filed with the Securities and Exchange Commission on August 8, 2002.

(6)
Incorporated by reference to the Company's report on Form 10-Q for the quarter ended March 31, 2002, filed with the Securities and Exchange Commission on May 15, 2002.

(7)
Incorporated by reference to the Company's report on Form 10-Q for the quarter ended June 30, 2001, filed with the Securities and Exchange Commission on August 14, 2001.

(8)
Incorporated by reference to the Company’s Registration Statement onForm S-1, File No. 333-88782, filed with the Securities and Exchange Commission on May 22, 2002.

(9)
Incorporated by reference to the Company's report on Form 8-K/A filed with the Securities and Exchange Commission on August 9, 2000.

(10)
Incorporated by reference to Schedule 13D/A filed by MFC Bancorp Ltd. With the Securities and Exchange Commission on dated January 2, 2001.

(11)
Incorporated by reference to the Company's report on Form 10-K for the fiscal year ended December 31, 2000, filed with the Securities and Exchange Commission on March 14, 2001.
 
 
(12)
Incorporate by reference to the Company's Registration Statement on Form S-8, File No. 333-15831, filed with the Securities and Exchange Commission on November 8, 1996.

(13)
Incorporated by reference to the Company's Registration Statement on Form S-8, File No. 333-15829, filed with the Securities and Exchange Commission on November 8, 1996.

(14)
Incorporated by reference to the Company's report on Form 10-K for the fiscal year ended December 31, 2004, and filed with the Securities and Exchange Commission on March 29, 2002.

(15)
Incorporated by reference to the Company's report on Form 10-Q for the quarter ended March 31, 2002, filed with the Securities and Exchange Commission on May 15, 2002.

(16)
Incorporated by reference to the Company's report on Form 10-K for the fiscal year ended December 31, 2005, and filed with the Securities and Exchange Commission on March 27, 2003.

(17)
Incorporated by reference to the Company's report on Form 8-K filed with the Securities and Exchange Commission on February 18, 2005.

(18)
Incorporated by reference to the Company's report on Form 10-K for the fiscal year ended December 31, 2004, filed with the Securities and Exchange Commission on March 30, 2005.

(19)
Incorporated by reference to the Company's report on Form 10-K for the fiscal year ended December 31, 2005, filed with the Securities and Exchange Commission on April 17, 2006.

(20)
Incorporated by reference to the Company's report on Form 10-Q for the period ended June 30, 2006, and filed with the Securities and Exchange Commission on August 21, 2006.

(21)
Incorporated by reference to the Company's report on Form 10-K for the fiscal year ended December 31, 2006, filed with the Securities and Exchange Commission on April 17, 2007.

(22)
Incorporated by reference to the Company's report on Form 8-K filed with the Securities and Exchange Commission on March 21, 2007.

(23)
Incorporated by reference to the Company's report on Form 8-K filed with the Securities and Exchange Commission on January 14, 2008.

(24)
Incorporated by reference to the Company's report on Form 8-K filed with the Securities and Exchange Commission on January 25, 2008.

(25)
Incorporated by reference to the Company's report on Form 8-K filed with the Securities and Exchange Commission on February 19, 2008.

(26)
Incorporated by reference to the Company's report on Form 8-K filed with the Securities and Exchange Commission on May 19, 2008.

(27)
Incorporated by reference to the Company's report on Form 8-K filed with the Securities and Exchange Commission on June 30, 2008.

(28)
Incorporated by reference to the Company's report on Form 8-K filed with the Securities and Exchange Commission on January 30, 2009.

(29)
Incorporated by reference to the Company's report on Form 8-K filed with the Securities and Exchange Commission on March 5, 2009.

(30)
Incorporated by reference to the Company's report on Form 8-K filed with the Securities and Exchange Commission on March 9, 2009.
 
 
(31)
Incorporated by reference to the Company's report on Form 8-K filed with the Securities and Exchange Commission on June 16, 2009.

(32)
Incorporated by reference to the Company's report on Form 8-K/A filed with the Securities and Exchange Commission on June 22, 2009.

(33)
Incorporated by reference to the Company's report on Form 8-K filed with the Securities and Exchange Commission on June 23, 2009.

(34)
Incorporated by reference to the Company's Statement on Form 4, filed with the Securities and Exchange Commission on July 28, 2009.

(35)
Incorporated by reference to the Company's Statement on Form 3 filed with the Securities and Exchange Commission on July 14, 2010.

(36)
Incorporated by reference to the Company's Statement on Form 3 filed with the Securities and Exchange Commission on August 9, 2010.

(37)
Incorporated by reference to the Company's report on Form 8-K filed with the Securities and Exchange Commission on August 10, 2010.

(38)
Incorporated by reference to the Company's report on Form 8-K filed with the Securities and Exchange Commission on September 13, 2010.

(39)
Incorporated by reference to the Company's Statement on Form 4 filed with the Securities and Exchange Commission on December 2, 2010.

(40)
Incorporated by reference to the Company's Statement on Form 3 filed with the Securities and Exchange Commission on December 20, 2010.

(41)
Incorporated by reference to the Company's report on Form 8-K filed with the Securities and Exchange Commission on March 7, 2011.

(42)
Incorporated by reference to the Company's report on Form 8-K filed with the Securities and Exchange Commission on March 16, 2011.

(43)
Incorporated by reference to the Company's report on Form 8-K filed with the Securities and Exchange Commission on August 12, 2011.

(44)
Incorporated by reference to the Company's report on Form 8-K filed with the Securities and Exchange Commission on October 4, 2011.

(45)
Incorporated by reference to the Company's report on Form 8-K filed with the Securities and Exchange Commission on October 26, 2011.

(c) Financial Statements

 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders
Mymetics Corporation and Subsidiaries
Epalinges, Switzerland
 
We have audited the accompanying consolidated balance sheets of Mymetics Corporation (a development stage company) and Subsidiaries as of December 31, 2011 and 2010, and the related consolidated statements of operations and comprehensive loss, changes in shareholders' equity (deficit), and cash flows for the years ended December 31, 2011 and 2010, and for the period from May 2, 1990 (inception) to December 31, 2011.  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 the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.  Accordingly, we express no such opinion.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Mymetics Corporation (a development stage company) and Subsidiaries as of December 31, 2011 and 2010, and the results of their operations and their cash flows for the years ended December 31, 2011 and 2010, and for the period from May 2, 1990 (inception) to December 31, 2011, in conformity with accounting principles generally accepted in the United States.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.  As discussed in Note 1 to the consolidated financial statements, the Company has not developed a commercially viable product and, therefore, has not been able to generate revenue, which has resulted in significant losses.  These conditions raise substantial doubt about the Company's ability to continue as a going concern.  Management's plans regarding these matters are also described in Note 1.  These consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.
 
/S/ PETERSON SULLIVAN LLP
 
Seattle, Washington
March 29, 2012
 
 
MYMETICS CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
December 31, 2011 and 2010
 
   
2011
   
2010
 
ASSETS
           
Current Assets
           
Cash
  E  382     1,811  
Receivables officer
    -       13  
Receivables other
    61       87  
Prepaid expenses
    54       30  
                 
Total current assets
    497       1,941  
Property and equipment, net of accumulated depreciation of E239 and E212 at December 31,   2011 and 2010, respectively
    49       76  
License contract, net
    -       2,357  
In-process research and development
    2,266       2,266  
Goodwill
    6,671       6,671  
    9,483     13,311  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
               
Current Liabilities
               
Accounts payable
  1,025     1,340  
Taxes and social costs payable
    2       26  
Current portion of notes payable to related parties, net of unamortized debt discount of NIL and E600 at December 31, 2011 and 2010, respectively
    5,711       3,872  
Total current liabilities
    6,738       5,238  
Convertible notes payable to related parties, less current portion
    25,331       23,510  
Convertible notes payable - other
    -       2,718  
Acquisition-related contingent consideration
    5,753       3,212  
                 
Total liabilities
    37,822       34,678  
                 
Shareholders' Equity (Deficit)
               
                 
Common stock, U.S. $.01 par value; 495,000,000 shares authorized; issued 276,017,339 at December 31, 2011 and 213,963,166 at December 31, 2010
    2,322       1,888  
                 
Preferred stock, U.S. $.01 par value; 5,000,000 shares authorized; none issued or outstanding
    -       -  
Additional paid-in capital
    32,732       29,602  
Deficit accumulated during the development stage
    (64,057 )     (53,518 )
Accumulated other comprehensive income
    664       661  
      (28,339 )     (21,367 )
    9,483     13,311  
 
The accompanying notes are an integral part of these financial statements.
 
 
MYMETICS CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the Years Ended December 31, 2011 and 2010 and
the Period from May 2, 1990 (Inception) to December 31, 2011
(In Thousands of Euros, Except Per Share Data)
 
               
Accumulated
During
Development
Stage
(May 2, 1990 to
December 31,)
 
   
2011
   
2010
   
2011
 
Revenues
                 
Sales
   150     150     660  
Interest
    3       4       42  
Gain on extinguishment of debt
    --       --       774  
Gain on sales of equipment
    1       68       69  
Government grants
    25       4       107  
      179       226       1,652  
Expenses
                       
Research and development
    1,343       3,083       25,092  
General and administrative
    1,520       3,320       22,845  
Bank fee
    3       1       941  
Induced conversion cost
    --       807       807  
Interest
    2,759       2,834       9,627  
Change in the fair value of acquisition-related contingent consideration
    2,541       1,276       2,203  
Goodwill impairment
    --       --       209  
Depreciation
    57       115       784  
Amortization of intangibles
    144       193       481  
Impairment of license contract
    2,213       --       2,213  
Directors' fees
    28       20       364  
Other
    109       1       120  
      10,717       11,650       65,686  
Loss before income tax provision
    (10,538 )     (11,424 )     (64,034 )
Income tax provision
    (1 )     (4 )     (23 )
Net loss
    (10,539 )     (11,428 )     (64,057 )
                         
Other comprehensive income (loss) Foreign currency translation adjustment
    3       (20 )     664  
Comprehensive loss
  (10,536 )   (11,448 )   (63,393 )
Basic and diluted loss per share
  (0.05   (0.06 )        
 
The accompanying notes are an integral part of these financial statements.
 

MYMETICS CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
For the Period from May 2, 1990 (Inception) to December 31, 2011
(In Thousands of Euros)

 
Date of
Transaction
 
Number of
Shares
   
Par
Value
   
Additional
Paid-in
Capital
   
Deficit
Accumulated
During the
Development
Stage
   
Accumulated
Other
Comprehensive
Income - Foreign
Currency
Translation
Adjustment
   
Total
 
Balance at May 2, 1990
                                     
Shares issued for cash
June 1990
    33,311,361     E 119     E -     E -     E -     E 119  
Net losses to December 31, 1999
      -       -       -       (376 )     -       (376 )
Balance at December 31, 1999
      33,311,361       119       -       (376 )     -       (257 )
Bank fee
      -       -       806       -       -       806  
Net loss for the year
      -       -       -       (1,314 )     -       (1,314 )
Balance at December 31, 2000
      33,311,361       119       806       (1,690 )     -       (765 )
Effect on capital structure resulting from a business combination
March 2001
    8,165,830       354       (354 )     -       -       -  
Issuance of stock purchase warrants in connection with credit facility
March 2001
    -       -       210       -       -       210  
Issuance of shares for bank fee
March 2001
    1,800,000       21       (21 )     -       -       -  
Issuance of shares for bank fee
June 2001
    225,144       3       (3     -       -       -  
Issuance of shares for cash
June 2001
    1,333,333       15       2,109