** **

**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

 

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##### **FORM10-Q/A**

**(Amendment No. 1)**

** **
| **x**  | **QUARTERLY  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES****EXCHANGE  ACT OF 1934**  |
|--------|---------------------------------------------------------------------------------------------------|
|   |                                                                                              |
|   | **For  the quarterly period ended June 30, 2007**                                                 |
|   |                                                                                              |
|   | **OR**                                                                                            |
|   |                                                                                              |
| **o**  | **TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES****EXCHANGE  ACT OF 1934** |

 

**Commissionfile number 0-18006**

 

**ORCHESTRATHERAPEUTICS, INC.**

(Exact name of registrantas specified in its charter)

 

| **Delaware**                                                     | ** ** | **33-0255679**                        |
|------------------------------------------------------------------|------------|---------------------------------------|
| (State or other jurisdiction  of  incorporation or organization) |       | (I.R.S. Employer  Identification No.) |
| ** **                                                       | ** ** | ** **                            |
| **5931  Darwin Court**                                           | ** ** |                                  |
| **Carlsbad,  California**                                        | ** ** | **92008**                             |
| (Address of principal  executive offices)                        | ** ** | (Zip Code)                            |

 

Registrant’stelephone number, including area code:**(760)431-7080**

 

Indicate by check markwhether the registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements for thepast 90 days.

 

Yes  x                   No o

 

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, or anon-accelerated filer. See definition of “accelerated filer” and “largeaccelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer         o            Accelerated filer   o            Non-accelerated filer           x

 

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2 of theExchange Act).

 

Yes o                    Nox

 

As of  September 26, 2007, there were 11,627,678shares of our common stock outstanding.

 

 

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**ORCHESTRA THERAPEUTICS, INC.**

** **

**INDEX**

 
| PART I – FINANCIAL INFORMATION          |   |
|----------------------------------------------|--------|
| **Item 1. Financial Statements (unaudited)** |   |
| **Notes to Condensed Financial Statements**  |   |
|                                         |   |
| SIGNATURES                                   |   |

 

**EXPLANATORY NOTE**

** **

**This Amendment No. 1 on Form 10-Qamends the registrant’s Quarterly Report on Form 10-Q as filed with theSecurities and Exchange Commission on October 2, 2007, and is being filedsolely to amend the following item of the original Form 10-Q:**

** **

**In “PART 1 – FINANCIALINFORMATION, Item 1. Financial Statements (unaudited), Notes to CondensedFinancial Statements is amended to insert the following sentence at the beginning of Note 1 – The Company “Thefinancial statements included in this report on Form 10-Q have not beenreviewed by our independent registered public accountants.**

** **

**Except for the amendmentsidentified above, no other items in our Original Report are amended hereby. Exceptfor the amendment identified above, the Form 10-Q/A does not materially modifyor update disclosures in the Original Report.**

 

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**ORCHESTRATHERAPEUTICS, INC.**

**Notes toCondensed Financial Statements (unaudited)**

 

**Note 1 –The Company:**

 

**The financial statements includedin this report on Form 10-Q have not been reviewed by our independentregistered public accountants.**

 

OrchestraTherapeutics, Inc., a Delaware Corporation, is an immuno-pharmaceutical companyfocused on developing products to treat autoimmune diseases. Our leadimmune-based therapeutic product candidate is NeuroVaxTM for thetreatment of multiple sclerosis (MS). NeuroVaxTM is designed tostimulate pathogen-specific immune responses aimed at slowing or halting therate of disease progression.

 

In addition to MS,we have proprietary technology and prior clinical experience for evaluation ofpeptide-based immune therapies for rheumatoid arthritis (“RA”) and psoriasis. Weare conducting pre-clinical work with human samples with various prestigiousacademic institutions toward the development of several therapeutic vaccines totreat other autoimmune diseases including RA and psoriasis.

 

We have completedour transition to an autoimmune diseases development company from our originsas an HIV vaccine development company. Over the past five years we haveincreased our focus on our autoimmune disease program, and in particularNeuroVaxTM and MS; at the beginning of the period our focus wasalmost exclusively on HIV.

 

During the quarterthe Company scaled back operations at its King of Prussia, Pennsylvania  (KOP) facility which resulted in a reductionin its workforce and a one time severance charge of $75,000. The remaining employeeswere given a six month employment agreement and a promise of a stay bonus. Thestay bonus of $226,000 is being expensed ratably over the six month serviceperiod.

 

On August 24, 2007the Company laid off almost all of its employees and discontinued its NeuroVaxTMmultiple sclerosis PII trial which was being enrolled in Eastern Europe. TheCompany has hired a broker and is attempting to sell its HIV manufacturingassets and intellectual property. The proceeds from the sale of these assetswill be used to pay its  creditors. TheCompany is currently evaluating strategic options related to its autoimmunetechnology. Additionally, on August 24, 2007 Dr. Joseph O’Neill’s employmentwas terminated, without cause, in conjunction with the reorganization of theCompany. Dr. O’Neill’s severance per his 2005 employment agreement is beingaccrued by the Company and will be paid when the Company’s KOP facility issold.

 

The Companybelieves, based on consultations with its broker, that the net realizable valuefor the potential sale of its KOP facility equals or exceeds the net book valueof the KOP facility assets of $2,299,000 at June 30, 2007.

 

On July 23, 2007,Cheshire Associates (“Cheshire”) invested $250,000 in a bridge transaction withthe Company.. The Company issued a 15% Secured Promissory Note to Cheshire inthe principal amount of $250,000 (the “Note”). and issued 500,000 shares of theCompany’s common stock to Cheshire. The Note accrues interest at the rate of15% per annum and matures on the earlier of December 1, 2007 or immediatelybefore the closing of a financing which raises over $10,000,000 for the Company.In connection with this transaction, on July 23, 2007, the Company also enteredinto a Security Agreement with Cheshire.

 

On August 28,2007, Spencer Trask Investment Partners LLC (“STIP”) made a $150,000 investmentin the Company. In exchange STIP received a Senior Subordinated SecuredPromissory Note, due on January 1, 2008 (the “STIP Note”) in the principalamount of $450,000****as well as****600,000 shares of common stock of the Company. The STIPNote and shares of common stock were issued pursuant to a Securities PurchaseAgreement between the Company and Spencer Trask, dated August 28, 2007, and issecured by the grant of a security interest in all of the assets of the Companypursuant to the terms of a Security Agreement, dated the same date, by theCompany in favor of Spencer Trask. On August 28, 2007, the Company also enteredinto  a Registration Rights Agreementwith Spencer Trask. Pursuant to the Registration Rights Agreement, the Companyagreed to register Spencer Trask’s shares of common stock issued under theSecurities Purchase Agreement.

 

All numbers hereinhave been adjusted to reflect our 1-for-100 reverse stock split of December2006.

 

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**SIGNATURES**

** **

Pursuant to therequirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, theregistrant has duly caused this report to be signed on its behalf by theundersigned thereunto duly authorized.

 
|                   | ORCHESTRA THERAPEUTICS,  INC. |
|------------------------|-------------------------------|
|                   |                          |   |
| Date: October 12, 2007 | By:                           | /s/ Michael K. Green |   |
|                   |                          | Michael K. Green, |
|                   |                          | Chief Operating Officer  & Chief Financial Officer |

 

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