UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549







FORM
10-Q









x
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the quarterly period ended September 30,
2008.




OR




o
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the transition period from _________to _________.




Commission File Number: 333-145507




OMNIMMUNE
HOLDINGS, INC.


(Exact
name of registrant as specified in its charter)




Delaware
            
            26-3128407(State
      or other jurisdiction ofincorporation
      or organization)
            
            (I.R.S.
      EmployerIdentification
      No.)




4600
      Post Oak Place, Suite 352, Houston, Texas
            
            77027(Address
      of principal executive offices)
            
            (Zip
      Code)




(713)
622-8400


(Registrant’s
telephone number, including area code)




N/A


(Former
name, former address and former fiscal year, if changed since last
report)




Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section13 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.  YesxNo 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
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.




Large accelerated filer o
            Accelerated filer
      o
            Non-accelerated filer
      o
            Smaller reporting company
      x




Indicate by check mark
whether the Registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). YesoNo x




As of
November 13, 2008, there were 8,814,926 shares of the issuer’s common stock
outstanding.




Table of Contents




OMNIMMUNE HOLDINGS, INC. and Subsidiaries


Quarterly
Report on Form 10-Q


TABLE
OF CONTENTS




Item
            
            PagePART
      I - FINANCIAL INFORMATIONItem
      1.
            Financial Statements
            4Consolidated Balance Sheets as of September 30, 2008 and
      December 31, 2007
            4Consolidated Statements of Operations for the three
      months and nine months ended September 30, 2008 and September 30,
      2007
            5Consolidated Statement of Stockholders’ Deficiency for the
      nine months ended September 30, 2008 and the fiscal year ended December
      31, 2007
            5Consolidated Statements of Cash Flows for the nine months
      ended September 30, 2008 and September 30, 2007
            14Notes to Consolidated Financial
    Statements
            16Item
      2.
            Management’s Discussion and Analysis of Financial Condition
      and Results of Operations
            27Item
      3.
            Quantitative and Qualitative Disclosures About Market
      Risk
            31Item
      4T.
            Controls and Procedures
            31PART
      II - OTHER INFORMATIONItem
      1.
            Legal Proceedings
            31Item
      1A.
            Risk Factors
            31Item
      2.
            Unregistered Sales of Equity Securities and Use of
      Proceeds
            37Item
      3.
            Defaults Upon Senior Securities
            37Item
      4.
            Submission of Matters to a Vote of Security
      Holders
            37Item
      5.
            Other Information
            37Item
      6.
            Exhibits
            37




Table of Contents




EXPLANATORY
NOTE




Unless
otherwise indicated or the context otherwise requires, all references below in
this Current Report to “we,” “us,” “our” and the “Company” are to Omnimmune
Holdings, Inc., a Delaware corporation.  Omnimmune Holdings, Inc. was
originally incorporated on February 22, 2007, in the State of Nevada under the
name Roughneck Supplies, Inc., and upon a merger with and into Omnimmune
Holdings, Inc. effective August 6, 2008, the Company changed its domicile to
Delaware.  Further, on August 7, 2008, Omnimmune Corp., a Texas
corporation, merged with and into the Company’s wholly owned subsidiary and
Delaware corporation, Omnimmune Acquisition Corp., after which Omnimmune
Acquisition Corp. changed its name to Omnimmune Corp. (the
“Merger”).  Prior to the Merger, the Company was a shell company and
Omnimmune Corp. was considered the acquirer for accounting purposes in the
transaction.  As a result the historical financial statements included
in this report are those of Omnimmune Corp., the Texas
corporation.  Unless otherwise indicated, all financial and business
information contained in this Current Report relates exclusively to the business
and financial affairs of Omnimmune Holdings, Inc. and its
subsidiaries.




















3
 Table of Contents




PART
I - FINANCIAL INFORMATION




ITEM1.
            FINANCIAL
      STATEMENTS




OMNIMMUNE HOLDINGS, INC.


(A
DEVELOPMENT STAGE ENTERPRISE)


CONSOLIDATED
BALANCE SHEETS




September
      30,
              2008
              (unaudited)
            
            
            December
      31,
              2007
              (Audited)AssetsCurrent
      assetsCash
      and cash equivalents
            
            $
            288,465
            
            
            $
            209Advance
      from related party
            
            
            -
            
            
            
            10,000Total
      current assets
            
            $
            288,465
            
            
            $
            10,209Liabilities
      and stockholders' deficiencyCurrent
      liabilitiesAccounts
      payable and accrued liabilities
            
            $
            930,794
            
            
            $
            591,482Accounts
      payable and accrued liabilities-related party
            
            
            -
            
            
            
            4,300Line
      of credit
            
            
            258,716
            
            
            
            259,896Accrued
      interest
            
            
            105,416
            
            
            
            84,628Accrued
      interest- related party
            
            
            473,404
            
            
            
            350,004Cash
      advance
            
            
            100,000
            
            
            
            624,000Notes
      payable due to related parties
            
            
            500,000
            
            
            
            266,746Notes
      payable - current portion
            
            
            132,064
            
            
            
            424,053Total
      current liabilities
            
            
            2,500,394
            
            
            
            2,605,109Long
      term portion of notes payable
            
            
            555,468
            
            
            
            96,739Long
      term portion of notes payable - due to related parties
            
            
            500,505
            
            
            
            62,767Total
      liabilities
            
            
            3,556,367
            
            
            
            2,764,615Commitments
      and contingencies (note 9)
            
            
            -
            
            
            
            -Stockholders'
      deficiencyCommon
      stock, $0.01 par value; 300,000,000 shares authorized;8,814,926
      and 2,650,892 shares issued and outstandingat
      September 30, 2008 and December 31, 2007, respectively
            
            
            88,150
            
            
            
            26,509Common
      stock subscribed
            
            
            -
            
            
            
            890,610Additional
      paid-in capital
            
            
            15,491,549
            
            
            
            9,676,602Deficit
      Accumulated during the Development Stage
            
            
            (18,847,601
            )
            
            
            (13,348,127
            )Total
      stockholder's deficit
            
            
            (3,267,902
            )
            
            
            (2,754,406
            )Total
      liabilities and stockholders' deficiency
            
            $
            288,465
            
            
            $
            10,209


See notes
to  consolidated financial statements.


4
 Table of Contents




OMNIMMUNE
HOLDINGS, INC.


(A
DEVELOPMENT STAGE ENTERPRISE)
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 (unaudited)
  For
      the Three Months Ended September 30,
                
                
                For
      the Three Months Ended September 30,
                
                
                For
      the Nine Months Ended September 30,
                
                
                For
      the Nine Months Ended September 30,
                
                
                Cumulative
      from Inception (January 15, 1997) to September 30,2008
                
                
                2007
                
                
                2008
                
                
                2007
                
                
                2008Revenue
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -Operating
      expenses:Sales,
      General and administrative expenses
                
                
                885,583
                
                
                
                119,352
                
                
                
                5,044,618
                
                
                
                415,997
                
                
                
                12,085,758Impairment
      of license agreement
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                1,701,936Total
      operating expenses
                
                
                885,583
                
                
                
                119,352
                
                
                
                5,044,618
                
                
                
                415,997
                
                
                
                13,787,694Operating
      loss
                
                
                (885,583
                )
                
                
                (119,352
                )
                
                
                (5,044,618
                )
                
                
                (415,997
                )
                
                
                (13,787,694
                )Other
      expense:Interest
      (income) expense, net
                
                
                118,320
                
                
                
                188,758
                
                
                
                6,987,657
                
                
                
                467,570
                
                
                
                11,479,414Cancellation
      of shares previously issued for license agreement
                
                
                -
                
                
                
                -
                
                
                
                (842,514
                )
                
                
                -
                
                
                
                (842,514)(Gain)
      loss on restructuring of debt
                
                
                10,000
                
                
                
                -
                
                
                
                (5,690,287
                )
                
                
                113,394
                
                
                
                (5,576,993
                )Total
      other (income) expense
                
                
                (128,320
                )
                
                
                188,758
                
                
                
                (454,856
                )
                
                
                580,964
                
                
                
                (5,059,907
                )Loss
      before taxes
                
                
                (1,013,903
                )
                
                
                (308,110
                )
                
                
                (5,499,474
                )
                
                
                (996,961
                )
                
                
                (18,847,601
                )Provision
      for taxes
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Net
      loss
                
                $
                (1,013,903
                )
                
                $
                (308,110
                )
                
                $
                (5,499,474
                )
                
                $
                (996,961
                )
                
                $
                (18,847,601
                )Net
      loss per share - basic
                
                $
                (0.14
                )
                
                $
                (0.12
                )
                
                $
                (1.08
                )
                
                $
                (0.38
                )
                
                $
                (9.61
                )Weighted
      average shares outstanding - basic
                
                
                7,245,256
                
                
                
                2,650,893
                
                
                
                5,070,291
                
                
                
                2,625,411
                
                
                
                1,961,542


See notes
to consolidated financial statements.




5
 Table of Contents




OMNIMMUNE HOLDINGS, INC.
 (A
DEVELOPMENT STAGE ENTERPRISE)
 CONSOLIDATED
STATEMENT OF STOCKHOLDERS' DEFICIENCY
 (unaudited)
 
 Preferred
      Stock
              
              
              Common
      Stock
              
              
              Common
              
              
              
              
              
              TotalStock
              
              
              Accumulated
              
              
              StockholdersShares
              
              
              Value
              
              
              APIC
              
              
              Shares
              
              
              Value
              
              
              APIC
              
              
              Subscribed
              
              
              Deficit
              
              
              EquityBalance
      at January 15, 1997 (date of inception)
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              $
              -
              
              
              $
              -
              
              
              $
              -Contribution
      of assets and liabilities by founder
              
              
              11,229
              
              
              
              112
              
              
              
              49,888
              
              
              
              1,055,507
              
              
              
              10,555
              
              
              
              33,017
              
              
              -
              
              
              
              -
              
              
              
              93,572Beneficial
      conversion feature of note payable for the year ended December 31,
      1997
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              327,700
              
              
              -
              
              
              
              -
              
              
              
              327,700Loss
      for the year ended December 31, 1997
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              -
              
              
              
              (1,366,300
              )
              
              
              (1,366,300
              )Balance
      as of December 31, 1997
              
              
              11,229
              
              
              $
              112
              
              
              $
              49,888
              
              
              
              1,055,507
              
              
              $
              10,555
              
              
              $
              360,717
              
              $
              -
              
              
              $
              (1,366,300
              )
              
              $
              (945,028
              )Beneficial
      conversion feature of note payable for the year ended December 31,
      1998
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              43,000
              
              
              -
              
              
              
              -
              
              
              
              43,000Loss
      for the year ended December 31, 1998
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              -
              
              
              
              (328,534
              )
              
              
              (328,534
              )Balance
      as of December 31, 1998
              
              
              11,229
              
              
              $
              112
              
              
              $
              49,888
              
              
              
              1,055,507
              
              
              $
              10,555
              
              
              $
              403,717
              
              $
              -
              
              
              $
              (1,694,834
              )
              
              $
              (1,230,562
              )
     6
 Table of Contents
  OMNIMMUNE
HOLDINGS, INC.
 (A
DEVELOPMENT STAGE ENTERPRISE)
 CONSOLIDATED
STATEMENT OF STOCKHOLDERS' DEFICIENCY (unaudited)
 (Continued)
  Preferred
      Stock
                  
                  
                  Common
      Stock
                  
                  
                  Common
                  
                  
                  
                  
                  
                  TotalStock
                  
                  
                  Accumulated
                  
                  
                  StockholdersShares
                  
                  
                  Value
                  
                  
                  APIC
                  
                  
                  Shares
                  
                  
                  Value
                  
                  
                  APIC
                  
                  
                  Subscribed
                  
                  
                  Deficit
                  
                  
                  Equity
 Issuance
      of 55,553 shares of common stock for technology license at $1.10 per
      share
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              55,553
              
              
              
              556
              
              
              
              61,287
              
              
              -
              
              
              
              -
              
              
              
              61,843Issuance
      of 5,614 shares of convertible preferred stock at $4.45 per share to
      investors
              
              
              5,614
              
              
              
              56
              
              
              
              24,944
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              -
              
              
              
              -
              
              
              
              25,000Issuance
      of 5,614 shares of convertible preferred stock at $4.45 per share to
      investors
              
              
              5,614
              
              
              
              56
              
              
              
              24,944
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              -
              
              
              
              -
              
              
              
              25,000Issuance
      of 5,614 shares of convertible preferred stock at $4.45 per share to
      investors
              
              
              5,614
              
              
              
              56
              
              
              
              24,944
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              -
              
              
              
              -
              
              
              
              25,000Issuance
      of 5,614 shares of convertible preferred stock at $4.45 per share to
      investors
              
              
              5,614
              
              
              
              56
              
              
              
              24,944
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              -
              
              
              
              -
              
              
              
              25,000Beneficial
      conversion feature of note payable for the year ended December 31,
      1999
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              12,000
              
              
              -
              
              
              
              -
              
              
              
              12,000Loss
      for the year ended December 31, 1999
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              -
              
              
              
              (429,692
              )
              
              
              (429,692
              )Balance
      as of December 31, 1999
              
              
              33,685
              
              
              $
              336
              
              
              $
              149,664
              
              
              
              1,111,060
              
              
              $
              11,111
              
              
              $
              477,004
              
              $
              -
              
              
              $
              (2,124,526
              )
              
              $
              (1,486,411
              )Issuance
      of 5,614 shares of convertible preferred stock at $4.45 per share to
      investors
              
              
              5,614
              
              
              
              56
              
              
              
              24,944
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              -
              
              
              
              -
              
              
              
              25,000Issuance
      of 11,229 shares of convertible preferred stock at $4.45 per share to
      investors
              
              
              11,229
              
              
              
              112
              
              
              
              49,888
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              -
              
              
              
              -
              
              
              
              50,000Issuance
      of 5,614 shares of convertible preferred stock at $4.45 per share to
      investors
              
              
              5,614
              
              
              
              56
              
              
              
              24,944
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              -
              
              
              
              -
              
              
              
              25,000Issuance
      of 2,807 shares of common stock at $2.24 per share to a consultant
      for
                services
      rendered
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              2,807
              
              
              
              28
              
              
              
              6,222
              
              
              -
              
              
              
              -
              
              
              
              6,250Beneficial
      conversion feature of note payable for the year ended December 31,
      2000
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              30,302
              
              
              -
              
              
              
              -
              
              
              
              30,302Loss
      for the year ended December 31, 2000
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              -
              
              
              
              (422,306
              )
              
              
              (422,306
              )Balance
      as of December 31, 2000
              
              
              56,142
              
              
              $
              560
              
              
              $
              249,440
              
              
              
              1,113,867
              
              
              $
              11,139
              
              
              $
              513,528
              
              $
              -
              
              
              $
              (2,546,832
              )
              
              $
              (1,772,165
              )
    7
 Table of Contents
  OMNIMMUNE
HOLDINGS, INC.
 (A
DEVELOPMENT STAGE ENTERPRISE)
 CONSOLIDATED
STATEMENT OF STOCKHOLDERS' DEFICIENCY
 (unaudited)
 (Continued)
  Preferred
      Stock
                  
                  
                  Common
      Stock
                  
                  
                  Common
                  
                  
                  
                  
                  
                  TotalStock
                  
                  
                  Accumulated
                  
                  
                  StockholdersShares
                  
                  
                  Value
                  
                  
                  APIC
                  
                  
                  Shares
                  
                  
                  Value
                  
                  
                  APIC
                  
                  
                  Subscribed
                  
                  
                  Deficit
                  
                  
                  Equity
 Issuance of  1,055,507
      shares of common stock at $2.24 per share in exchange for2,500,000
      shares in InVitro technology
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,055,507
              
              
              
              10,555
              
              
              
              49,445
              
              
              -
              
              
              
              -
              
              
              
              60,000Issuance
      of 2,807 shares of common stock at $2.24 per share to a consultant forservices
      rendered
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              2,807
              
              
              
              28
              
              
              
              6,222
              
              
              -
              
              
              
              -
              
              
              
              6,250Issuance
      of 2,807 shares of common stock at $2.24 per share to a consultant forservices
      rendered
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              2,807
              
              
              
              28
              
              
              
              6,222
              
              
              -
              
              
              
              -
              
              
              
              6,250Issuance
      of 2,807 shares of common stock at $2.24 per share to a consultant forservices
      rendered
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              2,807
              
              
              
              28
              
              
              
              6,222
              
              
              -
              
              
              
              -
              
              
              
              6,250Issuance
      of 2,807 shares of common stock at $2.24 per share to a consultant forservices
      rendered
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              2,807
              
              
              
              28
              
              
              
              6,222
              
              
              -
              
              
              
              -
              
              
              
              6,250Issuance
      of 2,807 shares of common stock at $2.24 per share to a consultant forservices
      rendered
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              2,807
              
              
              
              28
              
              
              
              6,222
              
              
              -
              
              
              
              -
              
              
              
              6,250Issuance
      of 2,807 shares of common stock at $2.24 per share to a consultant forservices
      rendered
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              2,807
              
              
              
              28
              
              
              
              6,222
              
              
              -
              
              
              
              -
              
              
              
              6,250Issuance
      of 2,807 shares of common stock at $2.24 per share to a consultant forservices
      rendered
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              2,807
              
              
              
              28
              
              
              
              6,222
              
              
              -
              
              
              
              -
              
              
              
              6,250Issuance
      of 2,807 shares of common stock at $2.24 per share to a consultant forservices
      rendered
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              2,807
              
              
              
              28
              
              
              
              6,222
              
              
              -
              
              
              
              -
              
              
              
              6,250Issuance
      of 2,807 shares of common stock at $2.24 per share to a consultant forservices
      rendered
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              2,807
              
              
              
              28
              
              
              
              6,222
              
              
              -
              
              
              
              -
              
              
              
              6,250Issuance
      of 2,807 shares of common stock at $2.24 per share to a consultant forservices
      rendered
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              2,807
              
              
              
              28
              
              
              
              6,222
              
              
              -
              
              
              
              -
              
              
              
              6,250Issuance
      of 2,807 shares of common stock at $2.24 per share to a consultant forservices
      rendered
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              2,807
              
              
              
              28
              
              
              
              6,222
              
              
              -
              
              
              
              -
              
              
              
              6,250Issuance
      of 2,807 shares of common stock at $2.24 per share to a consultant forservices
      rendered
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              2,807
              
              
              
              28
              
              
              
              6,222
              
              
              -
              
              
              
              -
              
              
              
              6,250Issuance
      of 60,665 shares of common stock at $2.24 per share for a technology
      license
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              60,665
              
              
              
              607
              
              
              
              134,459
              
              
              -
              
              
              
              -
              
              
              
              135,066Issuance
      of 5,614 shares of convertible preferred stock at $4.45 per share to
      investors
              
              
              5,614
              
              
              
              56
              
              
              
              24,944
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              -
              
              
              
              -
              
              
              
              25,000Issuance
      of 5,614 shares of convertible  preferred stock at $4.45 per
      share to investors
              
              
              5,614
              
              
              
              56
              
              
              
              24,944
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              -
              
              
              
              -
              
              
              
              25,000Issuance
      of 7,018 shares of common stock at $2.24 per share to a consultant forservices
      rendered
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              7,018
              
              
              
              70
              
              
              
              15,555
              
              
              -
              
              
              
              -
              
              
              
              15,625Value
      of 14,036 warrants issued to consultants
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              15,500
              
              
              -
              
              
              
              -
              
              
              
              15,500Beneficial
      conversion feature of note payable for the year ended December 31,
      2001
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              25,000
              
              
              -
              
              
              
              -
              
              
              
              25,000Loss
      for the year ended December 31, 2001
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              -
              
              
              
              (959,531
              )
              
              
              (959,531
              )Balance
      as of December 31, 2001
              
              
              67,370
              
              
              $
              672
              
              
              $
              299,328
              
              
              
              2,270,741
              
              
              $
              22,707
              
              
              $
              828,151
              
              $
              -
              
              
              $
              (3,506,363
              )
              
              $
              (2,355,505
              )
   8
 Table of Contents
  OMNIMMUNE
HOLDINGS, INC.
 (A
DEVELOPMENT STAGE ENTERPRISE)
 CONSOLIDATED
STATEMENT OF STOCKHOLDERS' DEFICIENCY
 (unaudited)
 (Continued)
  Preferred
      Stock
                  
                  
                  Common
      Stock
                  
                  
                  Common
                  
                  
                  
                  
                  
                  TotalStock
                  
                  
                  Accumulated
                  
                  
                  StockholdersShares
                  
                  
                  Value
                  
                  
                  APIC
                  
                  
                  Shares
                  
                  
                  Value
                  
                  
                  APIC
                  
                  
                  Subscribed
                  
                  
                  Deficit
                  
                  
                  Equity
 Issuance
      of 1,123 shares of convertible preferred stock at $4.45 per share to
      investors
              
              
              1,123
              
              
              
              11
              
              
              
              4,989
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              -
              
              
              -
              
              
              5,000Conversion
      of 11,229 shares convertible preferred stock into 44,915 shares of common
      stock at $2.24 per share
              
              
              (11,229
              )
              
              
              (112
              )
              
              
              (49,888
              )
              
              44,915
              
              
              
              449
              
              
              
              49,551
              
              
              -
              
              
              -
              
              
              -Conversion
      of 5,614 shares convertible preferred stock into 11,229 shares of common
      stock at $2.22 per share
              
              
              (5,614
              )
              
              
              (56
              )
              
              
              (24,944
              )
              
              11,229
              
              
              
              112
              
              
              
              24,888
              
              
              -
              
              
              -
              
              
              -Conversion
      of 5,614 shares convertible preferred stock into 11,229 shares of common
      stock at $2.22 per share
              
              
              (5,614
              )
              
              
              (56
              )
              
              
              (24,944
              )
              
              11,229
              
              
              
              112
              
              
              
              24,888
              
              
              -
              
              
              -
              
              
              -Conversion
      of 5,614 shares convertible preferred stock into 11,229 shares of common
      stock at $2.22 per share
              
              
              (5,614
              )
              
              
              (56
              )
              
              
              (24,944
              )
              
              11,229
              
              
              
              112
              
              
              
              24,888
              
              
              -
              
              
              -
              
              
              -Conversion
      of 16,843 shares convertible preferred stock into 33,686 shares of common
      stock at $2.24 per share
              
              
              (16,843
              )
              
              
              (56
              )
              
              
              (74,832
              )
              
              33,686
              
              
              
              337
              
              
              
              74,663
              
              
              -
              
              
              -
              
              
              112Conversion
      of 16,843 shares convertible preferred stock into 33,686 shares of common
      stock at $2.24 per share
              
              
              (16,843
              )
              
              
              (168
              )
              
              
              (74,832
              )
              
              33,686
              
              
              
              337
              
              
              
              74,663
              
              
              -
              
              
              -
              
              
              -Conversion
      of 5,614 shares convertible preferred stock into 11,229 shares of common
      stock at $2.22 per share
              
              
              (5,614
              )
              
              
              (168
              )
              
              
              (24,944
              )
              
              11,229
              
              
              
              112
              
              
              
              24,888
              
              
              -
              
              
              -
              
              
              (112
              )Conversion
      of 1,123 shares convertible preferred stock into 2,246 shares of common
      stock at $2.24 per share
              
              
              (1,122
              )
              
              
              (11
              )
              
              
              (4,989
              )
              
              2,246
              
              
              
              22
              
              
              
              4,978
              
              
              -
              
              
              -
              
              
              -Beneficial
      conversion feature of note payable for the year ended December 31,
      2002
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              -
              
              
              
              -
              
              
              
              1,175,356
              
              
              -
              
              
              -
              
              
              1,175,356Loss
      for the year ended December 31, 2002
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              -
              
              
              (3,061,599
              )
              
              (3,061,599
              )Balance
      as of December 31, 2002
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              2,430,190
              
              
              $
              24,300
              
              
              $
              2,306,914
              
              $
              -
              
              $
              (6,567,962
              )
              $
              (4,236,748
              )
     9
 Table of Contents
  OMNIMMUNE
HOLDINGS, INC.
 (A
DEVELOPMENT STAGE ENTERPRISE)
 CONSOLIDATED
STATEMENT OF STOCKHOLDERS' DEFICIENCY
 (unaudited)
 (Continued)
  Preferred
      Stock
              
              
              Common
      StockShares
              
              
              Value
              
              
              
              APIC
              
              
              Shares
              
              
              
              Value
              
              
              
              APIC
              
              
              CommonStockSubscribed
              
              
              
              AccumulatedDeficit
              
              
              
              TotalStockholdersEquityBeneficial
      conversion feature of note payable for the year ended December 31,
      2003
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              29,401
              
              
              -
              
              
              
              -
              
              
              
              29,401Loss
      for the year ended December 31, 2003
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              -
              
              
              
              (540,986
              )
              
              
              (540,986
              )Balance
      as of December 31, 2003
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              
              2,430,190
              
              
              $
              24,300
              
              
              $
              2,336,315
              
              $
              -
              
              
              $
              (7,108,948
              )
              
              $
              (4,748,333
              )Issuance
      of 1,404 shares of common stock at $2.24 to a consultant for services
      rendered
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,404
              
              
              
              14
              
              
              
              3,111
              
              
              -
              
              
              
              -
              
              
              
              3,125Issuance
      of 1,404 shares of common stock at $2.24 to a consultant for services
      rendered
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,404
              
              
              
              14
              
              
              
              3,111
              
              
              -
              
              
              
              -
              
              
              
              3,125Value
      of 26,107 warrants issued to consultants
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              93,000
              
              
              -
              
              
              
              -
              
              
              
              93,000Beneficial
      conversion feature of note payable for the year ended December 31,
      2004
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              17,149
              
              
              -
              
              
              
              -
              
              
              
              17,149Loss
      for the year ended December 31, 2004
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              -
              
              
              
              (1,252,796
              )
              
              
              (1,252,796
              )Balance
      as of December 31, 2004
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              
              2,432,998
              
              
              $
              24,328
              
              
              $
              2,452,686
              
              $
              -
              
              
              $
              (8,361,744
              )
              
              $
              (5,884,730
              )Issuance
      of 134,746 shares of common stock at $2.24 for a technology
      license
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              134,746
              
              
              
              1,347
              
              
              
              298,653
              
              
              -
              
              
              
              -
              
              
              
              300,000Issuance
      of 6,661 shares at $3.74 per share for cash
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              6,661
              
              
              
              67
              
              
              
              24,933
              
              
              -
              
              
              
              -
              
              
              
              25,000Beneficial
      conversion feature of note payable for the year ended December 31,
      2005
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              72,000
              
              
              -
              
              
              
              -
              
              
              
              72,000Loss
      for the year ended December 31, 2005
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              -
              
              
              
              (1,141,448
              )
              
              
              (1,141,448
              )Balance
      as of December 31, 2005
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              
              2,574,405
              
              
              $
              25,742
              
              
              $
              2,848,272
              
              
              $
              -
              
              
              $
              (9,503,192
              )
              
              $
              (6,629,178
              )
     10
 Table of Contents
  OMNIMMUNE
HOLDINGS, INC.
 (A
DEVELOPMENT STAGE ENTERPRISE)
 CONSOLIDATED
STATEMENT OF STOCKHOLDERS' DEFICIENCY
 (unaudited)
 (Continued)
  Preferred
      Stock
                
                
                Common
    StockShares
                
                
                Value
                
                
                APIC
                
                
                Shares
                
                
                Value
                
                
                APIC
                
                
                CommonStockSubscribed
                
                
                AccumulatedDeficit
                
                
                TotalStockholders

                  EquityIssuance
      of 4,913 pursuant to an antidilution agreement
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                4,913
                
                
                
                49
                
                
                
                (49
                )
                
                
                -
                
                
                
                -
                
                
                
                -Issuance
      of 1,235 pursuant to an antidilution agreement
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                1,235
                
                
                
                12
                
                
                
                (12
                )
                
                
                -
                
                
                
                -
                
                
                
                -Issuance
      of 1,235 pursuant to an antidilution agreement
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                1,235
                
                
                
                12
                
                
                
                (12
                )
                
                
                -
                
                
                
                -
                
                
                
                -Issuance
      of 1,235 pursuant to an antidilution agreement
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                1,235
                
                
                
                12
                
                
                
                (12
                )
                
                
                -
                
                
                
                -
                
                
                
                -Issuance
      of 3,706 pursuant to an antidilution agreement
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                3,706
                
                
                
                37
                
                
                
                (37
                )
                
                
                -
                
                
                
                -
                
                
                
                -Issuance
      of 3,706 pursuant to an antidilution agreement
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                3,706
                
                
                
                37
                
                
                
                (37
                )
                
                
                -
                
                
                
                -
                
                
                
                -Issuance
      of 1,235 pursuant to an antidilution agreement
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                1,235
                
                
                
                12
                
                
                
                (12
                )
                
                
                -
                
                
                
                -
                
                
                
                -Issuance
      of 225 pursuant to an antidilution agreement
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                225
                
                
                
                2
                
                
                
                (2
                )
                
                
                -
                
                
                
                -
                
                
                
                -Beneficial
      conversion feature of note payable for the year ended
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                4,000
                
                
                
                -
                
                
                
                -
                
                
                
                4,000Loss
      for the year ended December 31, 2006
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (1,076,266
                )
                
                
                (1,076,266
                )Balance
      at December 31, 2006
                
                
                -
                
                
                $
                -
                
                
                $
                -
                
                
                
                2,591,895
                
                
                $
                25,915
                
                
                $
                2,852,099
                
                
                $
                -
                
                
                $
                (10,579,458
                )
                
                $
                (7,701,444
                )Issuance
      of 7,018 shares at $3.74 per share for services rendered
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                7,018
                
                
                
                70
                
                
                
                26,179
                
                
                
                -
                
                
                
                -
                
                
                
                26,249Issuance
      of 25,989 shares for $3.74 per share for licensing
    agreement
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                25,989
                
                
                
                262
                
                
                
                96,947
                
                
                
                -
                
                
                
                -
                
                
                
                97,209Issuance
      of 25,989 shares for $3.74 per share for licensing
    agreement
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                25,990
                
                
                
                262
                
                
                
                96,947
                
                
                
                -
                
                
                
                -
                
                
                
                97,209119,053
      shares to be issued at $0.37 per share for license
    agreement
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                445,305
                
                
                
                -
                
                
                
                445,305119,053
      shares to be issued at $0.37 per share for license
    agreement
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                445,305
                
                
                
                -
                
                
                
                445,305Beneficial
      conversion feature of note payable for the year ended December 31,
      2007
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                6,604,430
                
                
                
                -
                
                
                
                -
                
                
                
                6,604,430Loss
      for the year months ended December 31, 2007
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (2,768,669
                )
                
                
                (2,768,669
                )Balance
      at December 31, 2007
                
                
                -
                
                
                $
                -
                
                
                $
                -
                
                
                
                2,650,892
                
                
                $
                26,509
                
                
                $
                9,676,602
                
                
                $
                890,610
                
                
                $
                (13,348,127
                )
                
                $
                (2,754,406
                )
     11
 Table of Contents
  OMNIMMUNE
HOLDINGS, INC.
 (A
DEVELOPMENT STAGE ENTERPRISE)
 CONSOLIDATED
STATEMENT OF STOCKHOLDERS' DEFICIENCY
 (unaudited)
 (Continued)
 Preferred
      Stock
                
                
                
                Common
      StockShares
                
                
                Value
                
                
                APIC
                
                
                
                Shares
                
                
                
                Value
                
                
                
                APIC
                
                
                
                Common
                  Stock
                  Subscribed
                
                
                
                AccumulatedDeficit
                
                
                Total
      StockholdersEquityIssuance
      of 119,053 shares of common stock, previously accrued
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                119,053
                
                
                
                1,191
                
                
                
                444,114
                
                
                
                (445,305
                )
                
                
                -
                
                
                
                -Issuance
      of 119,053 shares of common stock, previously accrued
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                119,053
                
                
                
                1,191
                
                
                
                444,114
                
                
                
                (445,305
                )
                
                
                -
                
                
                
                -1,055,508
      shares to be issued for services, previously accrued
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                30,000
                
                
                
                -
                
                
                
                30,000Issuance
      of 1,055,507 shares of common stock for cash
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                1,055,507
                
                
                
                10,555
                
                
                
                34,255
                
                
                
                -
                
                
                
                -
                
                
                
                44,810Issuance
      of 75,000 shares of common stock for notes payable
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                75,000
                
                
                
                750
                
                
                
                3,000
                
                
                
                -
                
                
                
                -
                
                
                
                3,750Value
      of 70,180 warrants issued for discount on accounts payable during the
      three months ended March 31, 2008
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                129,278
                
                
                
                -
                
                
                
                -
                
                
                
                129,278Value
      of 15,000 warrants issued pursuant to debt agreement during the three
      months ended March 31, 2008
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                38,240
                
                
                
                -
                
                
                
                -
                
                
                
                38,240Beneficial
      conversion feature for the three months March 31, 2008
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                1,019,206
                
                
                
                -
                
                
                
                -
                
                
                
                1,019,206Income
      for the three months ended March 31, 2008
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (1,460,253)
                
                
                
                (1,460,253)Balance
      at March 31, 2008
                
                
                -
                
                
                $
                -
                
                
                $
                -
                
                
                
                4,019,505
                
                
                $
                40,196
                
                
                $
                11,788,809
                
                
                $
                30,000
                
                
                $
                (14,808,380
                )
                
                $
                (2,949,375
                )
 12
 Table of Contents
  OMNIMMUNE
HOLDINGS, INC.
 (A
DEVELOPMENT STAGE ENTERPRISE)
 CONSOLIDATED
STATEMENT OF STOCKHOLDERS' DEFICIENCY
 (unaudited)
 (Continued)
  Preferred
      Stock
                
                
                Common
      StockShares
                
                
                Value
                
                
                APIC
                
                
                Shares
                
                
                Value
                
                
                APIC
                
                
                Common
                  Stock
                  Subscribed
                
                
                AccumulatedDeficit
                
                
                
                Total
                  Stockholders
      EquityIssuance
      of 25,000 shares of common stock for notes payable
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                25,000
                
                
                
                250
                
                
                
                1,000
                
                
                
                -
                
                
                
                -
                
                
                
                1,250Issuance
      of 1,055,508 shares of common stock, previously accrued
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                1,055,508
                
                
                
                10,555
                
                
                
                19,445
                
                
                
                (30,000
                )
                
                
                -
                
                
                
                -Cancellation
      of shares issued for technology license
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (279,788
                )
                
                
                (2,798
                )
                
                
                (839,716
                )
                
                
                -
                
                
                
                -
                
                
                
                (842,514
                )Issuance
      of 150,000 shares of common stock at a price of $1.25 per share for
      services
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                150,000
                
                
                
                1,500
                
                
                
                186,000
                
                
                
                -
                
                
                
                -
                
                
                
                187,500Issuance
      of 137,500 shares of common stock for notes payable
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                137,500
                
                
                
                1,375
                
                
                
                5,500
                
                
                
                -
                
                
                
                -
                
                
                
                6,875Value
      of 2,250,000 options issued for services
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                2,811,962
                
                
                
                -
                
                
                
                -
                
                
                
                2,811,962Value
      of 5,000 warrants issued pursuant to debt agreement
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                12,747
                
                
                
                -
                
                
                
                -
                
                
                
                12,747Value
      of 75,000 warrants issued for services
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                93,733
                
                
                
                -
                
                
                
                -
                
                
                
                93,733Loss
      for the three months ended June 30, 2008
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (3,025,318
                )
                
                
                (3,025,318
                )Balance
      as of June 30, 2008
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                5,107,725
                
                
                $
                51,078
                
                
                $
                14,079,480
                
                
                $
                -
                
                
                $
                (17,833,698
                )
                
                $
                (3,703,140
                )Recapitalization
      upon reverse merger
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                3,000,000
                
                
                
                30,000
                
                
                
                (30,000
                )
                
                
                -
                
                
                
                -
                
                
                
                -Value
      of vested portion of 100,000 options issued to consultant
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                40,870
                
                
                
                -
                
                
                
                -
                
                
                
                40,870Issuance
      of shares for cash at a price of $2.50 per share, net of costs of
      $359,729
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                707,200
                
                
                
                7,072
                
                
                
                1,401,199
                
                
                
                -
                
                
                
                -
                
                
                
                1,408,271Loss
      for the three months ended September 30, 2008
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (1,013,903
                )
                
                
                (1,013,903
                )Balance
      as of September 30, 2008
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                8,814,925
                
                
                $
                88,150
                
                
                $
                15,491,549
                
                
                $
                -
                
                
                $
                (18,847,601
                )
                
                $
                (3,267,902
                )














13
 Table of Contents




OMNIMMUNE HOLDINGS, INC.


(A
DEVELOPMENT STAGE ENTERPRISE)


CONSOLIDATED
STATEMENTS OF CASH FLOWS


(unaudited)




For
      the Nine

              Months
      Ended

                  September
      30,

                    2008
            
            
            For
      the Nine

              Months
      Ended

                  September
      30,

                    2007
            
            
            Cumulative
              from
      Inception
              (January
      15, 1997) to September
      30, 2008Cash
      flows from operating activities:Net
      loss
            
            $
            (5,499,474
            )
            
            $
            (996,961
            )
            
            $
            (18,847,601
            )Adjustments
      to reconcile net loss to netcash
      used in operating activities:Non-cash
      compensation
            
            
            3,040,332
            
            
            
            96,054
            
            
            
            3,992,531Amortization
      of discount on accounts payable
            
            
            6,623,545
            
            
            
            79,516
            
            
            
            8,571,762Amortization
      of discount on AP
            
            
            223,010
            
            
            
            -
            
            
            
            223,010Impairment
      of technology licenses and equity securities
            
            
            -
            
            
            
            -
            
            
            
            1,701,936Gain
      or loss on restructuring of debt
            
            
            (5,690,287
            )
            
            
            113,287
            
            
            
            (5,577,000
            )Redemption
      of shares previously issued for license agreement
            
            
            (842,513
            )
            
            
            -
            
            
            
            (842,513
            )Net
      change in operating assets and liabilities:Advances
      to related party
            
            
            -
            
            
            
            -
            
            
            
            (10,000
            )Accounts
      payable and accrued liabilities
            
            
            545,312
            
            
            
            356,368
            
            
            
            7,361,584Net
      cash used in operating activities
            
            
            (1,600,075
            )
            
            
            (351,736
            )
            
            
            (3,426,291
            )Cash
      flows from investing activities:Cash
      portion of investment in technology license
            
            
            -
            
            
            
            -
            
            
            
            (6,000
            )Net
      cash used in investing activities
            
            
            -
            
            
            
            -
            
            
            
            (6,000
            )Cash
      flows from financing activities:Proceeds
      from cash advances
            
            
            172,000
            
            
            
            394,000
            
            
            
            796,000Principal
      payments on cash advances
            
            
            (130,000
            )
            
            
            -
            
            
            
            (130,000
            )Stock
      sold for cash, net of costs
            
            
            1,408,271
            
            
            
            -
            
            
            
            1,738,271Proceeds
      from (repayments) to line of credit
            
            
            (1,180
            )
            
            
            (25,059
            )
            
            
            258,719Principal
      payments on debt
            
            
            (510,760
            )
            
            
            (12,005
            )
            
            
            (587,208
            )Proceeds
      from notes payable
            
            
            950,000
            
            
            
            -
            
            
            
            1,644,974Net
      cash provided by financing activities
            
            
            1,888,331
            
            
            
            356,936
            
            
            
            3,720,756Net
      increase in cash and cash equivalents
            
            
            288,256
            
            
            
            5,200
            
            
            
            288,465Cash
      and cash equivalents at beginning of period
            
            
            209
            
            
            
            29,500
            
            
            
            -Cash
      and cash equivalents at end of period
            
            $
            288,465
            
            
            $
            34,700
            
            
            $
            288,465




14
 Table of Contents


CONSOLIDATED
STATEMENTS OF CASH FLOWS
 (unaudited)
 (continued)


Supplemental
      disclosures of cash flow information:Cash
      paid during the period for:Interest
            
            $
            24,309
            
            
            $
            19,869
            
            
            $
            61,205Taxes
            
            $
            -
            
            
            $
            -
            
            
            $
            -Items
      not affecting cash flowsBeneficial
      conversion feature of notes payable
            
            $
            6,623,545
            
            
            $
            79,516
            
            
            $
            15,006,455Common
      stock issued for services
            
            $
            187,500
            
            
            $
            26,249
            
            
            $
            317,875Notes
      payable issued under restructure of debt
            
            $
            -
            
            
            $
            -
            
            
            $
            -Value
      of warrant issued as discount on debt
            
            $
            129,278
            
            
            $
            -
            
            
            $
            237,778Common
      stock issued for technology license
            
            $
            -
            
            
            $
            -
            
            
            $
            751,326Common
      stock issued for the conversion of preferred stock
            
            $
            -
            
            
            $
            -
            
            
            $
            355,000Notes
      payable issued for services
            
            $
            -
            
            
            $
            69,806
            
            
            $
            3,746,971Impairment
      of technology licenses
            
            $
            -
            
            
            $
            -
            
            
            $
            616,908Value
      of warrants issued for debt
            
            $
            12,747
            
            
            $
            -
            
            
            $
            12,747Issuance
      of common stock for accrued liability
            
            $
            -
            
            
            $
            -
            
            
            $
            -Issuance
      of common stock for cash
            
            $
            1,408,271
            
            
            $
            -
            
            
            $
            1,408,271Gain
      from the restructuring of debt
            
            $
            (5,690,287
            )
            
            $
            -
            
            
            $
            (5,576,993
            )Value
      of options issued for services
            
            $
            937,321
            
            
            $
            -
            
            
            $
            937,321Value
      of warrants issued for services
            
            $
            -
            
            
            $
            -
            
            
            $
            -




See notes
to consolidated financial statements.




15
 Table of Contents




1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES




A summary
of the significant accounting policies applied in the preparation of the
accompanying consolidated financial statements follows:




Business
and Basis of Presentation




Omnimmune
Holdings, Inc. (“Omnimmune” or the “Company”) is the holding company of
Omnimmune Corp., a development-stage biotechnology company integrating
complementary cancer therapeutic, diagnostic and prognostic technologies. Our
mission is to provide a comprehensive and personalized approach to the clinical
management of cancer through improved diagnostic, prognostic and therapeutic
interventions.




The
Company’s operating subsidiary, Omnimmune Corp., is currently a development
stage company under the provisions of Statement of Financial Accounting
Standards, (“SFAS”) No 7. The Company, whose principal business is to act as a
holding company for Omnimmune Corp., is also a development-stage company. The
accounts of the Company also include those of its wholly owned subsidiary,
InVitro Technologies, Inc., an inactive company.




Merger
with Roughneck Supplies, Inc.




Omnimmune
Holdings, Inc. was originally incorporated on February 22, 2007, in the State of
Nevada under the name Roughneck Supplies, Inc. (hereinafter referred to as
“Roughneck”), and upon a merger with and into Omnimmune Holdings, Inc. effective
August 6, 2008, the Company changed its domicile to
Delaware.  Further, on August 7, 2008, Omnimmune Corp., a Texas
corporation, merged with and into the Company’s wholly owned subsidiary and
Delaware corporation, Omnimmune Acquisition Corp. (the
“Merger”).  Upon the closing of the Merger, Omnimmune Acquisition
Corp., after changing its name to “Omnimmune Corp.,” continued as a wholly-owned
subsidiary of the Company, succeeding to the business, assets and liabilities of
Omnimmune Corp., a development-stage biotechnology company integrating
complementary cancer therapeutic, diagnostic and prognostic
technologies.   Concurrent with the Merger, we changed our fiscal
year end from May 31 to December 31 and changed our domicile to
Delaware.  The various transactions that comprised the Merger, as well
as the new management, business and financial statements of the Company are
described in detail in the Company’s Form 8-K filed with the SEC on August 12,
2008, as amended on August 21, 2008, August 27, 2008 and September 5, 2008,
respectively.




Going
Concern




The
accompanying consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. As shown in the accompanying
consolidated financial statements the Company incurred losses from operations of
$1,013,903 and $308,110 for the three months ended September 30, 2008 and 2007,
respectively; and $5,499,474 and $996,961 for the nine months ended September
30, 2008 and 2007, respectively; and $19,690,115 from inception (January 15,
1997) through September 30, 2008. In addition, the Company’s current liabilities
exceed its current assets by $2,211,929 as of September 30, 2008. These factors
among others, including the Company’s current cash position, which was $288,465
as of September 30, 2008, may indicate that the Company will be unable to
continue as a going concern for a reasonable period of time absent the infusion
of substantial additional capital.




If
operations and cash flows substantially improve, including through successful
closings on debt or equity financings, management believes that the Company can
continue to operate. However, no assurance can be given that management’s
actions will result in profitable operations or the resolution of the Company’s
liquidity problems.




The
accompanying consolidated financial statements do not include any adjustments
that might result should the Company be unable to continue as a going
concern.




Use
of Estimates




The
preparation of the Company’s financial statements in conformity with generally
accepted accounting principles of the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Management makes its best estimate of the
ultimate outcome for these items based on historical trends and other
information available when the financial statements are prepared. Actual results
could differ from those estimates




16
 Table of Contents




Long-lived
Assets




In
accordance with SFAS No. 144, long-lived assets to be held and used are analyzed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. SFAS No. 144 relates to
assets that can be amortized and the life determinable. The Company evaluates at
each balance sheet date whether events and circumstances have occurred that
indicate possible impairment. If there are indications of impairment, the
Company uses future undiscounted cash flows of the related asset or asset
grouping over the remaining life in measuring whether the assets are
recoverable. In the event such cash flows are not expected to be sufficient to
recover the recorded asset values, the assets are written down to their
estimated fair value. Long-lived assets to be disposed of are reported at the
lower of carrying amount or fair value of asset less the cost to sell. During
the three and nine months ended September 30, 2008, and 2007, the Company
recognized no impairment of long-lived assets. From inception to September 30,
2008 an impairment of license agreement in the amount of $1,701,936 was
recorded.




Net
Income (Loss) Per Common Share




The
Company computes earnings per share under Financial Accounting Standard No. 128,
"Earnings Per Share" (SFAS 128). Net loss per common share is computed by
dividing net loss by the weighted average number of shares of common stock and
dilutive common stock equivalents outstanding during the year. Dilutive common
stock equivalents consist of shares issuable upon conversion of convertible
notes and the exercise of the Company's stock options and warrants (calculated
using the treasury stock method).




Research
and Development




The
Company accounts for research and development costs in accordance with the
Financial Accounting Standards Board’s Statement of Financial Accounting
Standards No. 2 ("SFAS 2"), "Accounting for Research and Development Costs."
Under SFAS 2, all research and development costs must be charged to expense as
incurred. Accordingly, internal research and development costs are expensed as
incurred. Third-party research and developments costs are expensed when the
contracted work has been performed or as milestone results have been achieved.
Company-sponsored research and development costs related to both present and
future products are expensed in the period incurred. There were no expenditures
on research and product development for the three and nine months ended
September 30, 2008, and 2007, and from inception through September 30,
2008.




Concentrations
of Credit Risk




Financial
instruments and related items, which potentially subject the Company to
concentrations of credit risk, consist primarily of cash, cash equivalents and
related party receivables. The Company places its cash and temporary cash
investments with credit quality institutions. At times, such investments may be
in excess of the FDIC insurance limit.




Stock
Based Compensation




Effective
January 1, 2006, the Company adopted SFAS No. 123 (revised), "Share-Based
Payment" (SFAS 123(R)) utilizing the modified prospective approach. Prior to the
adoption of SFAS 123(R) we accounted for stock option grant in accordance with
APB Opinion No. 25, "Accounting for Stock Issued to Employees" (the intrinsic
value method), and accordingly, recognized compensation expense for stock option
grants.




Under the
modified prospective approach, SFAS 123(R) applies to new awards and to awards
that were outstanding on January 1, 2006 that are subsequently modified,
repurchased or cancelled. Under the modified prospective approach, compensation
cost recognized in the nine months of fiscal 2006 includes compensation cost for
all share-based payments granted prior to, but not yet vested as of January 1,
2006, based on the grant-date fair value estimated in accordance with the
original provisions of SFAS 123, and compensation cost for all share-based
payments granted subsequent to January 1, 2006 based on the grant-date fair
value estimated in accordance with the provisions of SFAS 123(R). Prior periods
were not restated to reflect the impact of adopting the new
standard.




17
 Table of Contents




A summary
of option activity under the Plan as of September 30, 2008, and changes during
the period ended are presented below:


Options
            
            
            Weighted
      Average
              Exercise
      PriceOutstanding
      at December 31, 2007
            
            
            -
            
            
            $
            -Issued
            
            
            2,250,000
            
            
            
            2.50Exercised
            
            
            -
            
            
            
            -Forfeited
      or expired
            
            
            -
            
            
            
            -Outstanding
      at June 30, 2008
            
            
            2,250,000
            
            
            $
            2.50Issued
            
            
            100,000
            
            
            
            2.50Exercised
            
            
            -
            
            
            
            -Forfeited
      or expired
            
            
            -
            
            
            
            -Outstanding
      at September 30, 2008
            
            
            2,350,000
            
            
            $
            2.50Vested
      at September 30, 2008
            
            
            2,285,791
            
            
            $
            2.50Non-vested
      at September 30, 2008
            
            
            64,209
            
            
            $
            2.50




Aggregate
intrinsic value of options outstanding and exercisable at September 30, 2008 was
$0. Aggregate intrinsic value represents the difference between the Company's
closing stock price on the last trading day of the fiscal period, which was
$2.05 as of September 30, 2008, and the exercise price multiplied by the number
of options outstanding. As of September 30, 2008, total unrecognized stock-based
compensation expense related to stock options was $83,208. The total fair value
of options vested during the three and nine months ended September 30, 2008 was
$40,983 and $2,852,832, respectively.




Income
Taxes




The
Company has implemented the provisions on Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" (SFAS 109). SFAS 109 requires
that income tax accounts be computed using the liability method. Deferred taxes
are determined based upon the estimated future tax effects of differences
between the financial reporting and tax reporting bases of assets and
liabilities given the provisions of currently enacted tax laws. Since the
Company remained insolvent after the debt restructuring during the three months
ended September 30, 2008, the gain on the restructuring was not taxable to the
Company.




Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statements carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax
assets, including tax loss and credit carryforwards, and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment
date.




Deferred
income tax expense represents the change during the period in the deferred tax
assets and deferred tax liabilities. The components of the deferred tax assets
and liabilities are individually classified as current and non-current
based on their characteristics. Realization of the deferred tax asset is
dependent on generating sufficient taxable income in future years. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets
will not be realized. Due to the uncertainties as to the realization of deferred
tax assets, an allowance has been provided regarding all deferred tax assets of
the Company.




Reclassifications




Certain
reclassifications have been made in prior year's financial statements to conform
to classifications used in the current year.




Foreign
Currency




Aside
from one of its license agreements, which requires milestone and other payments
to be made in Euros, the Company is involved in no transactions with foreign
currency implications.




18
 Table of Contents




2.
ADVANCE RECEIVABLE FROM RELATED PARTY




As of
December 31, 2007, advance receivable consists of a $10,000 note due to the
Company from Intrepid Technologies, Inc., a company controlled by the Company’s
Chief Executive Officer. This advance did not bear interest. This advance was
also payable on demand.




During
the nine months ended September 30, 2008, an agreement was reach whereby the
Company released Intrepid Technologies, Inc., from the $10,000 cash advance owed
to the Company as consideration of forgiveness of the note payable owed to
Intrepid Technologies, Inc. by the Company.




3.
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES




September
      30,
              2008
            
            
            December
      31,
              2007Accounts
      payable
            
            $
            610,730
            
            
            $
            227,742Accrued
      liabilities
            
            
            320,064
            
            
            
            363,740Total
            
            $
            930,794
            
            
            $
            591,482




4.
LINE OF CREDIT




The
Company has a bank loan and credit card agreements with various
banks.  The bank loan is jointly guaranteed by two of the Company’s
shareholders. The Company’s Chief Executive Officer, Harris Lichtenstein,
co-signs on the credit card agreements and remains jointly liable with the
Company on all outstanding amounts due for these credit card liabilities. At
September 30, 2008 and December 31, 2007, the Company had the following amounts
due under its loan and credit card agreements.




September
      30, 2008
            
            
            December
      31, 2007Bank
      loan
            
            $
            149,976
            
            
            $
            149,976Credit
      cards
            
            
            108,740
            
            
            
            109,920Total
            
            $
            258,716
            
            
            $
            259,896




5.
ACCRUED INTEREST AND INTEREST EXPENSE




At
September 30, 2008 and December 31, 2007, the Company has 14 and 21 notes
payable in the aggregate amount of $2,638,262 and $7,284,998, respectively.
Notes payable to related parties aggregated $1,082,565 and $5,591,511 of these
amounts at September 30, 2008 and December 31, 2007,
respectively.  Interest accrued on these notes at rates ranging from
7% to 10%. Total interest accrued at September 30, 2008 and December 31, 2007,
was $578,820 and $434,632, respectively.




Interest
expense consisted of the following for the three and nine months ended September
30, 2008 and 2007:




For
      the three months ended September 30, 2008
            
            
            For
      the three months ended September 30, 2007
            
            
            For
      the nine months ended September 30, 2008
            
            
            For
      the nine months ended September 30, 2007Notes
      payable
            
            $
            44,687
            
            
            $
            133,121
            
            
            $
            126,944
            
            
            $
            368,961Bank
      loan
            
            
            3,119
            
            
            
            3,119
            
            
            
            9,532
            
            
            
            9,256Credit
      cards
            
            
            4,265
            
            
            
            3,413
            
            
            
            17,373
            
            
            
            9,838Amortization
      of discount on notes payable
            
            
            66,249
            
            
            
            49,105
            
            
            
            6,610,798
            
            
            
            79,515Amortization
      of discount on accounts payable
            
            
            -
            
            
            
            -
            
            
            
            223,011
            
            
            
            -Total
            
            $
            118,320
            
            
            $
            188,758
            
            
            $
            6,987,657
            
            
            $
            467,570




19
 Table of Contents




6.
CASH ADVANCES




The
Company has received non-interest bearing payable on-demand, unsecured cash
advances from related parties. During the three months ended September 20, 2008,
the Company repaid cash advances in the amount of $130,000 and at September 30,
2008, there remained outstanding cash advances in the total amount of
$100,000.




7.
NOTES PAYABLE




At
December 31, 2006, the Company had outstanding 21 notes payable and one
interest-bearing liability not yet formalized as a promissory note (the “Old
Notes”) in the aggregate principal amount of $5,002,860. At December 31, 2006, a
total of 16 of the Old Notes in the aggregate principal amount of $2,495,736
were in default.




On
January 1, 2007 and March 1, 2007, the Old Notes were cancelled and replaced by
new notes payable (the “New Notes”). The principal of the New Notes included the
principal of the Old Notes, the accrued interest on the Old Notes, certain
amounts due the investors which were in accounts payable on the Company’s
balance sheet at December 31, 2006, and an additional amount of $113,284. This
additional amount has been charged to operations as Loss on Debt Conversion
during the three months ended March 31, 2007. At March 31, 2007, the Company had
outstanding 21 notes payable in the aggregate principal amount of $7,293,481
including $5,951,511 to related parties, none of which were in
default.




On March
1, 2008, 15 of the previously issued notes were cancelled and replaced by new
notes payable. The principal of the new notes included the principal of the New
Notes and accrued interest on those notes. At September 30, 2008, the Company
had outstanding 15 notes payable in the aggregate principal amount of
$2,638,262. At September 30, 2008, a total of 3 of the notes payable in the
aggregate principal amount of $86,839 were in default.




On March
1, 2008, when the New Notes were cancelled and $5,677,726 of the old principal
was forgiven by the note holders, resulting in a gain on the financial
statements. During the period ended June 30, 2008, $20,203 of old principal was
forgiven by a note holder, resulting in an additional gain on the financial
statements.




During
the three months ended March 31, 2008, the Company also converted unsecured cash
advances in the amount of $581,200 into a convertible note payable. During the
period ended September 30, 2008, the Company determined that the amount of
unsecured cash advances contributed by the note holder was $521,000. As a
result, the original note in the amount of $581,200 was returned for
cancellation and a new note in the amount of $521,200 was issued to the note
holder.




The
Company has convertible notes payable outstanding which contain a provision for
contingent warrants that are potentially issuable. Pursuant to the convertible
notes agreements, these warrants are issuable if the note holder elects to
convert at least 25% of the principal amount of the note during the term of the
note. At September 30, 2008, there are contingent 5 year warrants issuable to
purchase an aggregate of 120,710 shares of the Company’s common stock at a price
of $1.80 per share.




The
following table summarizes amounts due under the notes payable at September 30,
2008 and December 31, 2007:




Principal
      balance:September
      30, 2008
            
            
            December
      31, 2007Total
      outstanding
            
            $
            2,638,262
            
            
            $
            7,284,998Less
      discount on notes payable
            
            
            (950,226
            )
            
            
            (6,434,693
            )Net
      Total
            
            
            1,688,036
            
            
            
            850,305Less
      current portion
            
            
            (632,063
            )
            
            
            (690,799
            )TOTAL
            
            $
            1,055,973
            
            
            $
            159,506





20
 Table of Contents




8.
EQUITY




The
Company had authorized a total of 300,000,000 shares of common stock at a par
value of $0.0001 per share. At September 30, 2008 and December 31, 2007, the
Company had issued and outstanding 8,814,925 and 2,650,892 shares of common
stock, respectively.  No shares of preferred stock are issued or
outstanding.




The
Company completed a 1-for-2.8072 split of its common stock, effective March 27,
2008. The Company completed a 10-for-1 reverse split of its common stock
effective June 9, 2008.  Each of these stock splits is accounted for
in all share numbers included in this report, unless otherwise
indicated.




Common
Stock




The
following equity transactions occurred during the nine months ended September
30, 2008:




The
Company issued 119,053 shares of common stock valued at $445,305 pursuant to a
license agreement. These shares were subscribed for as December 31, 2007. These
shares were issued during the three months ended March 31, 2008.




The
Company issued 119,053 shares of common stock valued at $445,305 pursuant to a
license agreement. These shares  were subscribed for as December 31,
2007. These shares were issued during the three months ended March 31,
2008.




The
Company issued 1,055,508 shares of common stock for cash in the amount of
$44,801 that had been previously received.




The
Company issued 75,000 shares of common stock, warrants to purchase 150,000
shares of common stock, and a note payable in the amount of $300,000 for cash of
$300,000. The fair value of these shares of $3,750 was considered a discount to
the note payable and amortized to interest expense during the three months ended
March 31, 2008.




The
Company agreed to issued 1,055,508 shares of common stock to consultants in
consideration for accrued liabilities for services performed in prior periods.
These shares have not been issued as of March 31, 2008, and appear as common
stock subscribed on the Company’s balance sheet at March 31, 2008. The Company
issued these shares during the three months ended June 30, 2008.




The
Company issued 25,000 shares of common stock, warrants to purchase 5,000 shares
of common stock, and a note payable in the amount of $100,000 for cash of
$100,000. The fair value of these shares of $1,250 was considered a discount to
the note payable and amortized to interest expense during the three months ended
June 30, 2008.




Pursuant
to an amendment to a licensing agreement, the Company cancelled 279,788 shares
of common stock with a fair value of $842,514 that had been previously issued
for a licensing agreement, during the three months ended June 30,
2008.




The
Company issued 150,000 shares of common stock to employees for services that
have been provided. The fair value of these shares of $187,500 was charged to
operations during the three months ended June 30, 2008.




The
Company issued 137,500 shares of common stock and a note payable in the amount
of $550,000 for cash of $550,000. The fair value of these shares of $6,875 was
considered a discount to the note payable and amortized to interest expense
during the three months ended June 30, 2008.




Private
Placement of Common Stock




In August
2008, the Company completed a private placement of its common stock (the
“Private Placement”) whereby the Company sold an aggregate of $1,786,000 worth
of units (each “Unit” and collectively the “Units”) to accredited investors (as
defined by Rule 501 under the Securities Act of 1933, as amended). The Company
received proceeds of $1,408,648 after costs of the issuance of $359,330. The
number of shares of common stock issued pursuant to the Private Placement was
707,200 along with warrants to purchase an additional 707,200 shares of common
stock. Pursuant to the terms of the Private Placement, each Unit was sold for
$2.50 (the “Unit Price”) and consisted of one share of Common Stock and one
warrant to purchase one shares of Common Stock for $5.00 per share.




21
 Table of Contents




Roughneck
Exchange




On August
6, 2008, through a statutory merger with the sole purpose of changing the
Company’s state of domestication from Nevada to Delaware, the shareholders of
Roughneck converted 3,000,000 shares of Roughneck outstanding common stock into
3,000,000 shares of Omnimmune common stock. On August 7, 2008, in a transaction
known as a reverse acquisition, the shareholders of Omnimmune, a publicly-traded
company, exchanged 5,107,721 shares of Omnimmune common stock for 5,107,721
shares in Omnimmune Corp, a Texas corporation, and the Company’s wholly owned
subsidiary, Omnimmune Acquisition Corp., a Delaware corporation, merged with and
into Omnimmune Corp. The shareholders of Omnimmune Corp. thus assumed control of
the Company, and the Company became the parent holding company of Omnimmune
Corp.




Warrants




During
the three months ended March 31, 2008, the Company issued warrants to purchase
70,180 shares of common stock to a service provider as a discount on accounts
payable. The fair value of these warrants of $129,278 was charged to interest
expense during the three months ended March 31, 2008.




During
the three months ended March 31, 2008, the Company issued warrants to purchase
15,000 shares of common stock to note holders pursuant to the note agreement.
The fair value of these shares of $38,240 was charged to operations during the
three months ended March 31, 2008.




During
the three months ended June 30, 2008, the Company issued warrants to purchase
75,000 additional shares of common stock to a consultant in consideration for
providing the Company with trade credit. The fair value of these warrants of
$93,733 was considered a discount to accounts payable and amortized to interest
expense during the three months ended June 30, 2008.




During
the three months ended June 30, 2008, the Company issued warrants to purchase
5,000 additional shares of common stock to note holders pursuant to the note
agreement. The fair value of these shares of $12,747 was charged to operations
during the three months ended June 30, 2008.




During
the three months ended September 30, 2008, the Company issued warrants to
purchase 707,200 additional shares of of common stock pursuant to the Private
Placement.




The
following table summarizes the changes in warrants outstanding and the related
prices for the shares of the Company’s common stock issued to non-employees of
the Company. The following table summarizes the warrants outstanding as of
September 30, 2008:




Warrants
      Outstanding
            
            Warrants
      Exercisable


Exercise
      Prices
              
              Number
      Outstanding
              
              Weighted
      Average Remaining
                Contractual
      Life (years)
              
              Weighted
      Average
                Exercise
      Price
              
              Number
      Exercisable
              
              Weighted
      Average
                Remaining
      Contractual
                Life
      (years)$
              
              
              0.10
              
              84,216
              
              0.46
              
              $
              0.10
              
              84,216
              
              0.461.78-2.50
              
              145,180
              
              7.17
              
              
              1.78-2.50
              
              145,180
              
              7.175.00
              
              727,200
              
              4.86
              
              
              5.00
              
              727,200
              
              4.86Total
              
              956,596
              
              4.82
              
              
              
              
              956,596
              
              4.82
  The
following table summarizes the changes in warrants outstanding and the related
prices for the shares of the Company’s common stock issued to non-employees of
the Company. The following table summarizes the warrants outstanding as of
December 31, 2007:
  Warrants
      Outstanding
              
              Warrants
      ExercisableExercise
      Prices
              
              Number
      Outstanding
              
              Weighted
      Average Remaining Contractual Life (years)
              
              Weighted
      Average Exercise Price
              
              Number
      Exercisable
              
              Weighted
      Average Remaining Contractual Life (years)$
              0.10
              
              
              84,216
              
              1.21
              
              $
              0.10
              
              84,216
              
              1.21Total
              
              
              84,216
              
              1.21
              
              
              
              
              84,216
              
              1.21
  22
 Table of Contents
  Transactions
involving warrants are summarized as follows:


Number
      of Shares
            
            
            Weighted
      Average
              Price
      Per ShareOutstanding
      at December 31, 2007
            
            
            84,216
            
            
            $
            0.10Granted
            
            
            85,180
            
            
            
            2.35Exercised
            
            
            -
            
            
            
            -Cancelled
      or expired
            
            
            -
            
            
            
            -Outstanding
      at March 31, 2008
            
            
            169,396
            
            
            $
            1.23Granted
            
            
            80,000
            
            
            
            2.66Exercised
            
            
            -
            
            
            
            -Cancelled
      or expired
            
            
            -
            
            
            
            -Outstanding
      at June 30, 2008
            
            
            249,396
            
            
            $
            1.69Granted
            
            
            707,200
            
            
            
            5.00Exercised
            
            
            -
            
            
            
            -Cancelled
      or expired
            
            
            -
            
            
            
            -Outstanding
      at September 30, 2008
            
            
            956,596
            
            
            $
            4.14




The
Company has convertible notes payable outstanding which contain a provision for
contingent warrants that are potentially issuable. Pursuant to the convertible
notes agreements that warrants are issuable if the notes holder elects to
convert at least 25% of the principal amount due, during the term of the note.
According to the convertible note payable agreements there are warrants issuable
to purchase 120,710 shares of common stock. Upon issuance these warrants are
exercisable for 5 years at a price of $1.80 per share.




Options




During
the three months ended June 30, 2008, the Company issued options to purchase
2,250,000 shares  of common stock at a price per share of
$2.50  to employees for services rendered. The fair value of these
options of $2,811,962 was charged to operations expense during the three months
ended June 30, 2008.




During
the three months ended September 30, 2008, the Company issued options to
purchase 100,000 shares  of common stock at a price per share of
$2.50. These options were valued at an aggregate of $124,192, and vest at the
following rate: 33,000 vested at the time of issuance, and the balance vest over
a 23 month period.  During the three months ended September 30, 2008,
the Company charged to operations the fair value of the vested options, or
$40,983.




The
following table summarizes the changes in options outstanding and the related
prices for the shares of the Company’s common stock issued to non-employees of
the Company. The following table summarizes the warrants outstanding as of
September 30, 2008:




Options
      Outstanding
            
            Options
      ExercisableExercise
      Prices
            
            
            Number
      Outstanding
            
            Weighted
      Average Remaining Contractual Life (years)
            
            Weighted
      Average Exercise Price
            
            Number
      Exercisable
            
            Weighted
      Average
              Remaining
      Contractual
              Life
      (years)$
            2.50
            
            
            
            2,350,000
            
            9.5
            
            $
            2.50
            
            2,285,791
            
            9.5Total
            
            
            
            2,350,000
            
            9.5
            
            
            
            
            2,285,791
            
            9.5




23
 Table of Contents




Transactions
involving warrants are summarized as follows:




Number
      of Shares
            
            
            Weighted
      Average
              Price
      Per ShareOutstanding
      at December 31, 2007
            
            
            -
            
            
            $
            -Granted
            
            
            2,250,000
            
            
            
            2.50Exercised
            
            
            -
            
            
            
            -Cancelled
      or expired
            
            
            -
            
            
            
            -Outstanding
      at June 30, 2008
            
            
            2,250,000
            
            
            $
            2.50Granted
            
            
            100,000
            
            
            
            2.50Exercised
            
            
            -
            
            
            
            -Cancelled
      or expired
            
            
            -
            
            
            
            -Outstanding
      at September 30, 2008
            
            
            2,235,000
            
            
            $
            2.50Exercisable
            
            
            2,285,791
            
            
            $
            2.50Not
      exercisable
            
            
            64,209
            
            
            $
            2.50




9.
GAIN FROM RESRUCTURING OF DEBT




On March
1, 2008, 15 of the New Notes were cancelled and replaced by new notes payable.
The principal of the new notes included the principal of the New Notes and
accrued interest on those notes. At September 30, 2008, the Company had
outstanding 15 notes payable in the aggregate principal amount of
$2,638,262. At September 30, 2008, a total of 3 of the notes payable in the
aggregate principal amount of $86,839 were in default.




On March
1, 2008, when the New Notes were cancelled and $5,677,726 of the old principal
was forgiven by the note holders, resulting in a gain on the financial
statements. During the period ended June 30, 2008, $20,203 of old principal was
forgiven by a note holder, resulting in an additional gain on the financial
statements. During the three months ended September 30, 2008, the Company
forgave a note receivable from Intrepid Technologies, Inc. in the amount of
$10,000.




10.
RELATED PARTIES




Amounts
due to related parties at September 30, 2008 and 2007 consisted of the
following:




Convertible
Notes Payable to related parties




The
Company has a note payable to Intrepid Technologies, Inc., a company controlled
by its Chief Executive Officer, in the amount of $0 and $801,274 at September
30, 2008 and December 31, 2007. The note bears interest at the rate of 7% per
annum. During the nine months ended September 30, 2008 and 2007, the Company
accrued interest in the amount of $9,374 and $32,679, respectively.  This
note was forgiven by the note holder in March, 2008.




The
Company has a note payable outstanding to its Chief Executive Officer, in the
amount of $500,000 and $3,170,188 at September 30, 2008 and December 31, 2007,
respectively. The March 31, 2007 note bears interest at a rate of 7% per annum,
the note that was signed during the three months ended March 31, 2008 is a non
interest bearing note, and is payable contingent upon (a) the Company’s receipt
of revenues, as defined, in which case the Company will pay 2% of such revenues,
as received, in satisfaction of this note; and/or (b) the sale of substantially
all of the Company’s assets. During the nine months ended September 30, 2008 and
2007, the Company accrued interest in the amount of $37,087 and $126,500,
respectively, on these notes.




The
Company has a second convertible note payable outstanding to its Chief Executive
Officer, in the amount of $0 and $131,722 at September 30, 2008 and December 31,
2007, respectively. This note bears interest at a rate of 7% per annum. During
the three months ended March 31, 2008, the note holder forgave this note. During
the nine months ended September 30, 2008 and 2007, the Company accrued interest
in the amount of $1,541 and $5,381, respectively.




The
Company has a convertible note payable outstanding to Dennis Lichtenstein, a
relative of the Chief Executive Officer, in the amount of $49,333 and $44,848 at
September 30, 2008 and December 31, 2007. The note bears interest at a rate of
10% per annum. During the nine months ended September 30, 2008 and 2007, the
Company accrued interest in the amount of $3,630 and $2,617,
respectively.




24
 Table of Contents




The
Company has a note payable outstanding to Alexander Krichevsky, an officer of
the Company, in the amount of $500,000 and $1,342,127 at September 30, 2008 and
December 31, 2007, respectively. The March 31, 2007 note bears interest at a
rate of 7% per annum. The note signed during the three months ended March 31,
2008 is a non interest bearing note, and is payable contingent upon (a) the
Company’s receipt of revenues, as defined, in which case the Company will pay 2%
of such revenues, as received, in satisfaction of this note; and/or (b) the sale
of substantially all of the Company’s assets.  During the nine months
ended September 30, 2008 and 2007, the Company accrued interest in the amount of
$15,701 and $54,825, respectively, on these notes.




The
Company has a note payable outstanding to Alexander Krichevsky, an officer of
the Company, in the amount of $136,815 at December 31, 2006. On March 3, 2007,
the Company replaced this note with a convertible note payable in the amount of
$189,400. As of March 31, 2008, the note holder forgave this note. During
the nine months ended September 30, 2008 and 2007, the Company accrued interest
in the amount of $2,216 and $7,737, respectively.




The
Company has a note payable outstanding to Jennie Fay Lichtenstein, a relative of
the Chief Executive Officer, in the amount of $25,000 at December 31, 2006. On
March 3, 2007, the Company replaced this note with a convertible note payable in
the amount of $30,211. As of September 30, 2008, the principal outstanding on
this convertible note payable is $33,232. This note bears interest at a rate of
10% per annum. During the nine months ended September 30, 2008 and 2007, the
Company accrued interest in the amount of $2,445 and $1,763,
respectively.




The
Company has a convertible note payable outstanding to Alexander Krichevsky, an
officer of the Company, in the amount $0 and $1,043,015 at September 30, 2008
and December 31, 2007, respectively.  Accrued salary in the amount of
$750,000 was added to the principal amount due under this note during the twelve
months ended December 31, 2007.  During the nine months ended
September 30, 2008 the note holder forgave this note. During the nine months
ended September 30, 2008 and 2007, the Company accrued interest in the amount of
$12,202 and $42,606, respectively.




Accounts
Payable- related parties




The
Company had a liability to Harris Lichtenstein for purchases made on behalf of
the Company in the amount of $0 and $4,300 at September 30, 2008, and December
31, 2007, respectively.




Note
Receivable from related party




The
Company has a note receivable in the amount of $0 and $10,000, for the nine
months ended September 30, 2008 and December 31, 2007, from Intrepid
Technologies, Inc., which is owned by the Company’s Chief Executive Officer,
Harris Lichtenstein. During the three months ended September 30, 2008, the
Company forgave a note receivable from Intrepid Technologies, inc. in the amount
of $10,000.




Options




The
Company issued 707,200 options to purchase additional shares of common stock to
executive officers of the Company in 2008.




Common
stock




The
Company issued 75,000 shares of common stock to each the Chief Executive Officer
and another officer of the Company in 2008.




11.
COMMITMENTS AND CONTINGENCIES




ASRI
License Agreement




The
Company entered into a license agreement (the “ASRI License Agreement”) with
Allegheny-Singer Research Institute (“ASRI”) on February 3, 1999, as amended.
The two parties agreed to an amended and restated agreement which became
effective February 1, 2005. ASRI granted the Company rights to develop,
manufacture, sell, rent or lease Licensed Products in the Field (each as defined
in the ASRI License Agreement). The Company agreed to pay royalties of 1-2% of
net sales of all products covered in the agreement. The ASRI License Agreement
gives the Company the right to sublicense to third parties. The Company agreed
to pay ASRI between 5-20% of the sublicense income depending on the nature of
the sublicense.




The
Company and ASRI agreed to further amend the ASRL License Agreement which
amendment became effective February 1, 2007. As part of the amendment, ASRI
granted the Company an extension on the first payment of licensing fees from the
original due date of February 1, 2007 to May 1, 2007.  During the
three months ended March 31, 2008, the Company issued 119,053 shares of common
stock previously accrued, and has issued a total of 145,042 shares of common
stock under this agreement.




The
Company and ASRI agreed to further amend the license agreement, which amendment
became effective June 30, 2008. ASRI granted the Company an extension of the
second payment of licensing fees from the original due date of February 1, 2008
to June 30, 2008.     As of September 30, 2008, the
Company has paid $100,000 in licensing fees under this agreement.




25
 Table of Contents




Columbia
License Agreement




The
Company entered into a license agreement (the “Columbia License Agreement”) with
Columbia University (“Columbia”) that was effective February 1, 2005, pursuant
to which  Columbia granted the Company rights to develop, manufacture,
sell, rent or lease Licensed Products in the Field (each as defined in the
Columbia License Agreement). Columbia received a 5% equity stake in the Company.
In addition, the Company paid a nonrefundable license fee of $30,000. The
agreement provided that  $15,000 was to be paid 60 days from the
effective date of the agreement and the other $15,000 to be paid one year from
the effective of the agreement. The Company agreed to reimburse Columbia for
past expenses of $50,000, of which $25,000 has been paid and the other $25,000
is due after sales of the licensed products amount to $1,000,000. The Company
agreed to pay royalties of 1-2% of net sales of all products covered in the
agreement. The agreement gives the Company the right to sublicense to third
parties. The Company agreed to pay Columbia between 10-20% of the sublicense
income depending on the nature of the sublicense. The Company agreed to pay
annual license maintenance fees according to the schedule below:




$10,000
during the fiscal year ended December 31, 2007




$20,000
during the fiscal year ending December 31, 2008




$35,000
during the fiscal year ending December 31, 2009




$50,000
on or before February 1, 2010; and $40,000 each year thereafter.




During
the three months ended March 31, 2008, the Company issued 119,053 shares of
common stock previously accrued, and has issued a total of 145,042 shares of
common stock under the Columbia License Agreement.




During
the nine months ended September 30, 2008, the Company entered into an amendment
to the Columbia License Agreement, pursuant to which Columbia terminated the
Stock Purchase agreement. As a result, the Company cancelled 279,788 shares of
common stock, which had been previously issued to Columbia. During the three
months ended September 30, 2008, the Company and Columbia agreed to further
amend the Columbia License Agreement which amendment became effective June 30,
2008. The annual license maintenance fees have been amended to the schedule
shown below:




$52,500 due on or before
May 1, 2009




$75,000 due on or before
May 1, 2010




$60,000 due on May 1 each
year thereafter




IGR




The
Company entered into a licensing agreement with Institut Gustave Roussy (IGR)
that was effective November 1, 2007 (the “IGR License Agreement”). IGR granted
the Company rights to use the Licensed Patents, Licensed Material and Licensed
Information (each as defined in the IGR License Agreement). The Company agreed
to pay a one time license fee of €125,000, of which €25,000 was payable on the
effective date, €50,000 was payable one year from effective date and €50,000 is
due two years from effective date. In addition, the Company agreed to pay
license maintenance fees according to the schedule below:




€10,000 during the fiscal
year ending December 31, 2008




€20,000 during the fiscal
year ending December 31, 2009




€35,000 during the fiscal
year ending December 31, 2010




€50,000 on or before
November 1, 2011 and €50,000 every year thereafter




During
the year ended December 31, 2007, the Company has paid $36,087 (approximately
€25,000).




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In
accordance with the above described schedule, on November 1, 2008, the Company
was obligated to pay a total of €60,000 to IGR in license fees and maintenance
fees, which payments were not made. The Company and IGR recently agreed to
modify the payment schedule described above, so that the €10,000 maintenance fee
that would otherwise have been due on November 1, 2008, shall now be due and
payable when invoiced by IGR, which is expected to occur
immediately.  The license fee €50,000 otherwise due on November 1,
2008, shall now be payable in two equal installments of €25,000 on March 1, 2009
and June 1, 2009, respectively.
  Ohio State Licensing
Agreement
  The
Company entered into a licensing agreement (the “OSU License Agreement”) with
Ohio State University (OSU) that was effective April 18, 2008, pursuant to
which  OSU granted the Company rights to use the Licensed Patents,
Licensed Material and Licensed Information (each as defined in the OSU License
Agreement). The Company agreed to pay a one time license fee of $300,000, of
which $5,000 was paid on execution, $45,000 was paid on the first business day
following the Phase 1 Data Review Period, $50,000 was paid three months after
first payment, $100,000 is due November 15, 2008, $50,000 is due June 30, 2009,
and $50,000 is due September 30, 2009. In addition, the Company agreed to
reimburse OSU for its patent expenses according to the schedule
below:
  $12,738
payable in eight quarterly payments beginning October 1, 2009
  As of
September 30, 2008, the Company has paid $200,000 in licensing fees under this
agreement.
  With
respect to the license fee of $100,000 that would otherwise have been due on
November 15, 2008, the parties have recently reached an agreement to pay $10,000
immediately, which payment has been made, and to pay $40,000 on March 1, 2009
and the balance of $50,000 on June 30, 2009.  In addition, the $50,000
license fee that would have been due on June 30, 2009 has now been extended
until September 30, 2009.   Interest shall accrue on all payments
not made according to the original schedule.  .
  Contingent warrants
issuable
  The
Company has convertible notes payable outstanding which contain a provision for
contingent warrants that are potentially issuable. Pursuant to the convertible
notes agreements that warrants are issuable if the notes holder elects to
convert at least 25% of the principal amount due, during the term of the note.
According to the convertible note payable agreements, there are potentially
1,207,096 warrants issuable to purchase shares of common stock. Upon issuance
these warrants are exercisable for 5 years at a price of $0.1781 per
share.


ITEM 2.
            MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS




Overview




Omnimmune
Holdings, Inc. (“Omnimmune” or the “Company”) is the holding company of
Omnimmune Corp., a development-stage biotechnology company integrating
complementary cancer therapeutic, diagnostic and prognostic
technologies.  Our mission is to provide a comprehensive and
personalized approach to the clinical management of cancer through improved
diagnostic, prognostic and therapeutic interventions.  Omnimmune has
acquired licensed rights to breakthrough platform monoclonal antibody
technologies and a multivalent cancer vaccine targeting two epitopes of HER-2,
validated tumor associated antigens.  The vaccine has completed a
Phase I NCI sponsored clinical trial.  Omnimmune plans to sponsor
Phase II and III trials and market the vaccine in collaboration with
others.  We believe the core technology utilized in the development of
this multivalent vaccine represents a platform for the development of additional
vaccines.




The
Company was originally incorporated on February 22, 2007, in the State of Nevada
under the name Roughneck Supplies, Inc. (hereinafter referred to as
“Roughneck”), and upon a merger with and into Omnimmune Holdings, Inc. effective
August 6, 2008, the Company changed its domicile to Delaware. Further, on August
7, 2008, Omnimmune Corp., a Texas corporation (“Omni Corp.”), merged with and
into the Company’s wholly owned subsidiary and Delaware corporation, Omnimmune
Acquisition Corp. (the “Merger”).  Upon the closing of the Merger,
Omnimmune Acquisition Corp., after changing its name to “Omnimmune Corp.,”
continued as a wholly-owned subsidiary of the Company, succeeding to the
business, assets and liabilities of Omni Corp.   Concurrent with
the Merger, we changed our fiscal year end from May 31 to December 31 and
changed our domicile to Delaware.  The various transactions that
comprised the Merger, as well as the new management, business and financial
statements of the Company are described in detail in the Company’s Form 8-K
filed with the SEC on August 12, 2008, as amended on August 21, 2008, August 27,
2008 and September 5, 2008, respectively.




Omnimmune
intends to play a leading role in the development of personalized cancer
treatment with the selection of prophylactic and therapeutic vaccines (active
immunization), monoclonal antibodies (passive immunization) and gene-based
products, which target a hormone called human chorionic gonadotropin
(“hCG”).  Appropriate patient-specific passive immunotherapies will be
based upon a patient’s own sequences of hCGb
(human chorionic gonadotropin beta subunit), and its gene products
(mRNA).  HCGß and its genes have been detected in a majority of
cancers studied to date, and is a well validated tumor marker.  On
this basis, hCG has enormous potential as a target for the diagnosis and
treatment of cancer patients.  The application of appropriate
patient-specific immunotherapy will be based upon the genetic expression and
translation of a patient’s own subunit marker(s), as determined by Omnimmune’s
combined immuno-genetic cancer diagnostic and prognostic systems.  An
immuno-genetic companion diagnostic trial is being planned by Omnimmune, and is
expected to take place during the 2009 calendar year, subject to the Company
obtaining sufficient financing.  Omnimmune expects that the results of
that trial will be a prelude to the development of a widely applicable
diagnostic system for the diagnosis, prognosis and determination of recurrence
of certain cancers.  Omnimmune plans to conduct a Phase I trial with
its lead candidate anti-hCGb
monoclonal antibodies based upon the results of the diagnostic
trial.




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 Table of Contents




Omnimmune
believes that this customized diagnostic-therapeutic coupling approach
represents a new paradigm for targeted therapy, and will significantly alter the
way in which cancer patients will be managed in the future.




Omnimmune’s
objective is to be a leader in the implementation (reduction to practice) of
previously discovered and characterized vaccines and monoclonal antibodies,
discovery, development and commercialization of new monoclonal antibodies for
diagnostic, prognostic and therapeutic (passive immunization) purposes, as well
as gene-based products targeting hCGb.




Omnimmune’s
unique HER-2 vaccine, hCGß and related technologies, which are protected through
an expanding intellectual property portfolio, have been developed at
institutions including The Ohio State University, Columbia University of New
York, The Allegheny-Singer Research Institute of the Allegheny General Hospital,
Pittsburgh, Pennsylvania and The Institute Gustave Roussy, Paris,
France.




Results
of Operations




As a
development stage pharmaceutical company, we produce no revenues and do not
expect to produce any revenues for the foreseeable future.  We have
incurred operating losses of $2,768,669 and $1,076,266 for the years ended
December 31, 2007 and December 31, 2006, respectively, and as of December 31,
2007, we had an accumulated deficit of $13,348,127.




Because
we produce no revenues, we rely entirely on debt and equity financing to fund
ongoing operations, and expect to continue to do so for the foreseeable
future.   Generating revenues and ultimately achieving
profitability will require the successful completion of our research and
development programs, and the subsequent commercialization of the results or of
products derived from such research and development efforts from our patents and
patents pending and those licensed from our strategic
collaborators.  No assurances can be given as to our ability to
identify sufficient sources of funding to sustain our operations, commercialize
our products or achieve profitability.   These matters raise
substantial doubt about the Company's ability to continue as a going concern.
The financial statements do not include any adjustments that may result from the
outcome of this uncertainty.




Three
Months Ended September 30, 2008 and September 30, 2007




We did
not produce any revenue during the three months ended September 30, 2008 and
September 30, 2007, respectively.  Our selling, general and
administrative expenses increased approximately 642% to $885,583 in the three
months ended September 30, 2008, from $119,352 in the same period in
2007.  For the three months ended September 30, 2008, selling,
general, and administrative expenses consisted primarily of legal and accounting
fees of $403,805; license fees of $168,416; payroll and employee benefits of
$123,149; non cash compensation of $40,893; insurance of $37,521; and office
expenses of $19,682.




For the
three months ended respectively on September 30, 2008 and September 30, 2007,
interest expense decreased by $70,438 or approximately 37%, from $188,758 during
the three months of the prior year to $118,320 during the three months ended
September 30, 2008.  The primary reason for the decrease was the lower
levels of debt maintained by the Company during the current year.




For the
reasons above, we realized a net loss of $1,013,903 during the three months
ended September 30, 2008 compared to a net loss of $308,110 during the three
months ended September 30, 2007,  an increase in the net loss of
$705,793, or approximately 229%.




Nine
Months Ended September 30, 2008 and September 30, 2007




We did
not produce any revenue during the nine months ended September 30, 2008 and
September 30, 2007, respectively.  Our selling, general and
administrative expenses increased approximately 1113% to $5,044,618 in the nine
months ended September 30, 2008, from $415,997 in the same period in
2007.  For the nine months ended September 30, 2008, selling, general,
and administrative expenses consisted primarily of non-cash compensation of
$3,040,355; legal and accounting fees of $1,014,427; license fees of $388,416;
consulting fees of $225,564; payroll and employee benefits of $163,192;
financing fees of $80,000; insurance of $37,521; and office expense of
$16,412.




For the
nine months ended September 30, 2008 compared to the same period in 2007,
interest expense increased by $6,520,087 or approximately 1394%, from $467,570
during the nine months of the prior year to $6,520,087 during the nine months
ended September 30, 2008.  The primary reason for the increase was the
amortization or write-off of the discount on convertible notes during the
current year.




During
the nine months ended September 30, 2008, we realized a gain from the
restructuring of debt in the amount of $5,690,287 compared to a loss on the
restructuring of debt of $113,394 in the corresponding prior period. During the
nine months ended September 30, 2008 we also had a gain from the cancellation of
shares of common stock previously issued pursuant to a license agreement in the
amount of $842,514; there was no corresponding gain in the prior
year.




For the
reasons above, we realized a net loss of $5,499,474 during the nine months ended
September 30, 2008, an increase of $4,502,513 or approximately 452% compared to
a loss of $996,961 during the nine months ended September 30, 2007.




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 Table of Contents




Liquidity
and Capital Resources




At
September 30, 2008, we had a cash balance of $288,465.  In the absence
of substantial and immediate new funding, we will not have sufficient cash to
fund our obligations beyond the current calendar year.  We have
financed our operations primarily through cash on hand and through loans from
shareholders and investors in our bridge financings and private placement
offerings.




Net cash
flow used in operating activities was $(1,600,075) for the nine months ended
September 30, 2008, compared to net cash flow used in operating activities of
$(351,736) for the same period in 2007, principally because of redemption of
shares previously issued for license agreement in the amount of $842,513 in
2008.  The increase was primarily attributable to an increase in net
loss, particularly due to an increase in sales, general, and administrative
expenses.




Net cash
provided by financing activities was $1,888,331 for the nine months ended
September 30, 2008, compared to $356,936 for the same period in
2007.   We have financed our operations primarily from cash on hand
and from loans from shareholders and investors in our bridge financings and
private placement offerings.




On August
7, 2008, we closed on an offering to accredited investors of 707,200 Units (each
Unit selling for $2.50 and consisting of one share of Omnimmune common stock and
a warrant to purchase one share of common stock at an exercise price of $5.00
per share) and raised aggregate gross proceeds of $1,768,000 (the “First
Offering”).  We paid the placement agent a placement fee in the amount
of $176,800 with respect to the funds raised in the First Offering (10% of the
gross proceeds), plus a non-accountable expense allowance equal to 3% of the
gross proceeds of such offering (equaling $53,040), and its reasonable
out-of-pocket expenses up to $30,000, which resulted in an aggregate payment of
$259,729.30 to the placement agent at the closing.  Upon completion of
the First Offering, our cash balance was approximately $716,500 after payments
to the placement agent, professional fees and repayment of certain loans and a
portion of the certain outstanding promissory notes for which we received
payment demands upon the closing of the offering.




The
Company is in the process of conducting a further private placement offering
(the “Second Offering”) on terms substantially similar to the First
Offering.  The maximum number of Units to be sold in the Second
Offering will be 3,200,000 Units, less the 707,200 Units sold as part of the
First Offering, for a maximum aggregate investment amount of $8 million, less
the $1,768,000 received as part of the First Offering.  Thus, if we
completed the sale of the entire 2,492,800 Units, we would receive additional
gross proceeds of $6,232,000 (subject to possible over-allotment).




Management
is seeking to raise additional money through debt and equity financing to enable
us to satisfy our cash requirements in the coming months and beyond and to fund
ongoing research and development activities.  We are not
self-supporting through internally generated capital, and rely exclusively on
our continued ability to raise additional funds through private or public debt
or equity financings to meet our ongoing cash needs.


We will
require substantial additional funding in order to meet our obligations to our
licensors, continue our research and product development programs, including
preclinical testing and clinical trials of our product candidates, and meet
ongoing operating expenses. We expect to continue to incur substantial
losses through at least the next several years and may incur losses in
subsequent periods.  The amount and timing of our future losses are
highly uncertain.  Our ability to achieve and thereafter sustain
profitability will be dependent upon, among other things, successfully
developing, commercializing and obtaining regulatory approval or clearances for
our technologies and products resulting from these technologies, which will
require substantial additional funding, the availability of which is
uncertain.




Off-Balance
Sheet Arrangements




We do not
currently have, nor have we ever had, any relationships with unconsolidated
entities or financial partnerships, such as entities often referred to as
structured finance or special purpose entities, which would have been
established for the purpose of facilitating off-balance sheet arrangements or
other contractually narrow or limited purposes. In addition, we do not engage in
trading activities involving non-exchange traded contracts. As such, we are not
materially exposed to any financing, liquidity, market or credit risk that could
arise if we had engaged in these relationships.




Critical
Accounting Policies




For a
summary of our significant accounting policies, please see Note 1 to the
consolidated unaudited financial statements included in Part I, Item 1 in this
report.




Recent
Accounting Pronouncements




For a
summary of recently issued accounting standards, please see Note 1 to the
consolidated unaudited financial statements included in Part I, Item 1 in this
report.




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 Table of Contents




Cautionary
Notice Regarding Forward Looking Statements




This
Quarterly Report on Form 10-Q contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
“Securities Act”), Section 21E of the Securities Exchange Act of 1934 (the
“Exchange Act”) and the Private Securities Litigation Reform Act of
1995.  Forward-looking statements reflect the current view about
future events and financial performance based on certain
assumptions.  They include opinions, forecasts, projections, guidance,
expectations, beliefs or other statements that are not statements of historical
fact.  In some cases, forward-looking statements can be identified by
words such as “may,” “can,” “will,” “should,” “could,” “expects,” “hopes,”
“believes,” “plans,” “anticipates,” “estimates,” “predicts,” “projects,”
“potential,” “intends,” “approximates” or the negative or other variation of
such terms and other comparable expressions.  Forward-looking
statements in this report may include statements about:




•
            future
      financial and operating results, including projections of revenues,
      income, expenditures, cash balances and other financial
    items;




•
            capital
      requirements and the need for additional
  financing;




•
            our
      ability to develop commercially viable
products;




•
            our
      intellectual property rights and similar rights of others, including
      actual or potential competitors;




•
            the
      outcome of regulatory submissions and approvals and clinical
      trials;




•
            the
      performance of our future products and their potential to generate
      revenues;




•
            our
      beliefs and opinions about the safety and efficacy of any of our future
      products and the results of our
studies;




•
            development
      of new products;




•
            growth,
      expansion and acquisition
strategies;




•
            current
      and future economic and political
conditions;




•
            overall
      industry and market performance;




•
            competition;




•
            management’s
      goals and plans for future operations;
and




•
            other
      assumptions described in this report underlying or relating to any
      forward-looking statements.




The
forward-looking statements in this report are only
predictions.  Actual results could and likely will differ materially
from these forward-looking statements for many reasons, including the risks
described under “Risk Factors” and elsewhere in this report.  No
guarantee about future results, performance or achievements can be
made.  These forward-looking statements are made only as of the date
hereof, and we undertake no obligation to update or revise the forward-looking
statements, whether as a result of new information, future events or
otherwise.  The safe harbors for forward-looking statements provided
by the Private Securities Litigation Reform Act are unavailable to issuers of
“penny stock.”  Our shares may be considered a penny stock and, as a
result, the safe harbors may not be available to us.




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 Table of Contents




ITEM 3.
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK




Not
applicable.




ITEM 4.
            CONTROLS
      AND PROCEDURES




Management
of the Company, including the Chief Executive Officer, have evaluated the
effectiveness of the Company’s disclosure controls and procedures (as defined in
Rule 13a-15(e) of the Securities Exchange Act of 1934) for the quarterly period
ended September 30, 2008. Based on this evaluation, the Chief Executive
Officer concluded that the Company’s disclosure controls and procedures are
effective to provide reasonable assurance that information required to be
disclosed by the Company in the reports that it files or submits under the
Securities Exchange Act of 1934 is (1) recorded, processed, summarized and
reported within the time periods specified by the Securities and Exchange
Commission’s rules and forms and (2) accumulated and communicated to our
management, including our Chief Executive Officer, in a manner that allows
timely decisions regarding required disclosure.




PART
II – OTHER INFORMATION




ITEM 1.
            LEGAL
      PROCEEDINGS




The
Company may be subject to lawsuits, claims and other legal matters that arise in
the ordinary course of conducting business, none of which, in management’s
opinion, would be expected to have a material adverse impact on the Company’s
financial condition, results of operations or cash flows.




ITEM 1A.
            RISK
      FACTORS




Various
risks and uncertainties could affect the Company’s business. Any of the risks
described below or elsewhere in this Quarterly Report on Form 10-Q or the
Company’s other SEC filings could have a material impact on the Company’s
business, financial condition or results of operations.




Omnimmune’s
auditors have substantial doubts as to our ability to continue as a going
concern.




The
auditor’s report on each of our financial statements for the years ended
December 31, 2005, 2006 and 2007 expresses an opinion that substantial doubt
exists as to whether Omnimmune can continue to meet its ongoing obligations and
remain in business.  Because Omnimmune has been issued an opinion by
its auditors that substantial doubt exists as to whether we can continue as a
going concern, it may be more difficult for us to attract
investors.  Our future is dependent upon our ability to obtain
financing and upon future profitable operations from the development and
commercialization of our products.  We may seek additional funds
through private placements of equity or the incurrence of additional
debt.  Our financial statements do not include any adjustments
relating to the recoverability and classification of recorded assets, or the
amounts of and classification of liabilities that might be necessary in the
event we cannot continue in existence.




We
require additional financing, and an inability to raise the necessary capital or
to do so on acceptable terms would threaten our ability to stay in
business.




As of
September 30, 2008, we had cash and cash equivalents of approximately
$288,465.   Absent immediate additional infusions of capital, the
Company does not have sufficient liquidity to meet its obligations beyond this
calendar year.  The limited amount of cash on hand jeopardizes the
Company’s ability to fund operations and satisfy its ongoing obligations in a
timely manner, including to the licensors of its core technologies.




In order
to meet our short-term working capital needs, we are continuing to conduct a
private placement of Units pursuant to the terms of the Second
Offering.  Even if we sell all of the Units (including the
over-allotment) in the Second Offering, which management does not believe is
likely to occur, we will likely need to obtain additional financing after 12
months and possibly before, to fund our development activities and meet ongoing
obligations.  When we need additional funds, we may seek to raise
additional funds through public or private equity or debt financing, licensing
and other agreements, a line of credit, asset sales or other
arrangements.  However, we cannot be sure that any additional funding,
when needed, will be available on terms favorable to us or at
all.  Furthermore, any additional equity or equity-related financing
may be dilutive to our stockholders, and debt financing, if available, may
subject us to restrictive covenants and significant interest
costs.  We may also choose to obtain funding through licensing and
other contractual arrangements.  Such agreements may require us to
relinquish our rights to certain of our technologies, products or marketing
territories.




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If we are
unable to obtain additional capital, we may then attempt to preserve our
available resources by various methods including deferring the satisfaction of
commitments, reducing expenditures on our research and development programs or
otherwise scaling back our operations. If we are unable to raise additional
capital or defer costs, that inability would have a material adverse effect on
our financial position, result of operations, prospects and our business could
fail.




We
are or soon will be past due under certain of our material license agreements
with respect to our payment obligations.  There is no assurance that
we will receive extensions of these obligations or that we will not default
under these agreements in the future; any such defaults could materially and
adversely affect our business.




Each
of our existing license agreements with third party collaborators require us to
make periodic payments to the licensors for the licensed rights, including, by
way of example, upfront and annual license maintenance fees, royalties based on
product sales utilizing the licensed technology, sublicensing royalties,
milestone payments based on certain achievements as we conduct trials on the
licensed products and progress them through the FDA approval process, and the
reimbursement or payment of costs associated with prosecuting the patents
subject to these license agreements.




Additionally,
our license agreements provide for various performance and achievement
milestones to ensure that we devote adequate personnel and financial resources
to the commercialization of the licensed patents and processes.  If we
do not achieve the milestones in our agreements with The Allegheny-Singer
Research Institute and Columbia University, the respective licensor can, with
prior notice and an opportunity to cure, elect to terminate the subject license
agreement or convert the exclusive worldwide license to a non-exclusive
license.  With respect to our license agreement with The Institute
Gustave Roussy, we have until November 1, 2010 to achieve net sales or
sublicense revenue from products developed with the licensed patents, after
which time the licensed rights will become non-exclusive; however, we can
request two one-year extensions of the exclusive license with the payment of an
additional license fee to the licensor.  Our agreement with The Ohio
State University provides that the parties can mutually agree to extend the
performance milestones so long as the delay is not a result of lack of capital
for development on our part.




From
time to time during the term of certain of our material license agreements with
third party collaborators we have been unable to timely make all of our license
fee obligations and certain performance milestones such as research and
development spending, receipt of certain levels of capital investment,
conducting clinical trials and studies or obtaining FDA approval on licensed
products.  Although we have received extensions and or waivers of
these payment obligations from these third party collaborators and amended or
modified each of our license agreements to extend our performance obligations
and payment terms in order to alleviate prior defaults, we may not be able to
obtain waivers of future defaults, were any such defaults to occur, under these
agreements and, as a result, our third party collaborators may be able to
terminate our license rights or convert our exclusive licenses to a
non-exclusive licenses.




As a
result of extensions recently granted to us by certain of our licensors with
respect to the payment of certain license fees, we are current in our
obligations to our licensors.  However, there is no assurance that we
will be able to remain current on a go-forward basis, or that the respective
licensors will cooperate in any requests for waivers or extensions.  All of
the license agreements require the licensors to give written notice of any
payment default, which would then commence a period of between 30 days and 90
days, depending on the particular license agreement, during which time the
Company could cure the default.  If we default in the payment of any
of our obligations to our licensors,  there is no assurance that we
will be in a position to cure any such defaults during the particular cure
period.  In that event, the continued existence and/or exclusivity of
the affected license could be at risk.


We
are an early stage company without commercial diagnostic and therapeutic
products, and we cannot assure you that we will develop sufficient revenues in
the future to sustain our business.




We are
subject to the uncertainties and complexities present in virtually any early
stage biotechnology company. All of our product candidates are in early stages
of development.  We will need to make significant additional
investments in research and development, preclinical testing, clinical trials,
and regulatory, and sales and marketing activities, to commercialize any future
product candidates.  Our product candidates, if successfully developed
and approved for marketing, may not generate sufficient or sustainable revenues
to enable us to be profitable.




We
anticipate losses for the immediate future and may not achieve
profitability.




We
anticipate incurring losses in the immediate future as a result of our research
and development costs and manufacturing start-up costs, including costs
associated with conducting preclinical development and clinical trials, which
will continue to be substantial and there can be no assurance that we will ever
be able to achieve or sustain profitability or positive cash flow.  We
intend to invest significantly in our product candidates prior to entering into
licensing agreements.  This will increase our need for capital and
will result in losses for at least the next several years.  We expect
that the amount of operating losses will fluctuate significantly from quarter to
quarter as a result of increases or decreases in our research and development
efforts, the execution or termination of licensing, manufacturing and other
contractual arrangements, the progress or lack of progress of product
development candidates in our collaboration with third parties, the initiation,
success or failure of clinical trials and whether any of our product candidates,
achieve commercial success.




If
we do not successfully develop products, or if we cannot achieve commercial
success, our business will be materially harmed.




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Our
development of product candidates, either alone or in conjunction with
collaborators, is subject to the risks of failure inherent in the development of
new pharmaceutical products and products based on new technologies. These risks
include:




•
            delays
      or failures in funding, product development, clinical testing or
      manufacturing;




•
            unplanned
      expenditures in product development, clinical testing or
      manufacturing;




•
            failure
      in clinical trials or failure to receive regulatory
    approvals;




•
            emergence
      of superior or equivalent product development technologies or
      products;




•
            disruption
      in the available supply of animal
colonies;




•
            inability
      to manufacture on our own, or through others, product candidates on a
      clinical or commercial scale;




•
            inability
      to market products due to third party proprietary
  rights;




•
            election
      by our customers not to pursue product
  development;




•
            failure
      by our collaborators to develop products successfully;
  and




•
            failure
      to achieve market acceptance.




Because
of these risks, our research and development efforts and those of our
collaborators may not result in any commercially viable products.  Our
failure to successfully complete a significant portion of these development
efforts, to obtain required regulatory approvals or to achieve commercial
success with any approved products would materially harm our business, financial
condition and results of operations.




Before
we commercialize and sell any of our product candidates, we must conduct
clinical trials, which are expensive and have uncertain outcomes.




Conducting
clinical trials is a lengthy, time-consuming and expensive process. Before
obtaining regulatory approvals for the commercial sale of any products, we must
demonstrate through preclinical testing and clinical trials that our product
candidates are safe and effective for use in humans.  We have incurred
and will continue to incur substantial expense for, and we have devoted and
expect to continue to devote a significant amount of time to preclinical
testing.




Completion
of clinical trials may take several years or more.  The length of time
generally varies substantially according to the type, complexity, novelty and
intended use of the product candidate.  We recently completed a Phase
I clinical trial of the multivalent HER-2 vaccine technology, which trial had as
its primary objective to test for toxicity.  Planning is now underway
for the initiation of a Phase II trial of the multivalent HER-2 vaccine
technology.  However, many factors may delay our commencement and rate
of completion of clinical trials, including:




•
            the
      number of patients that ultimately participate in the trial, which may be
      affected by the availability of competing therapeutic
      alternatives;




•
            the
      length of time required to enroll suitable
  subjects;




•
            the
      duration of patient follow-up that seems appropriate in view of the
      results;




•
            the
      number of clinical sites included in the
trials;




•
            changes
      in regulatory requirements for clinical trials or any governmental or
      regulatory delays or clinical holds requiring suspension or termination of
      the trials;




•
            delays,
      suspensions or termination of the clinical trials due to the institutional
      review board responsible for overseeing the study at a particular study
      site;




•
            regulatory
      policies regarding expedited approval
  procedures;




•
            inability
      to raise adequate funding;




•
            unforeseen
      safety issues; and




•
            inability
      to manufacture on our own, or through others, adequate supplies of the
      product candidate being tested.




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We have
limited experience in conducting and managing clinical trials. We will rely on
third parties, including our collaborators, to assist us in managing and
monitoring clinical trials.  Our reliance on these third parties may
result in delays in completing, or in failure to complete, these trials if the
third parties fail to perform under our agreements with them.




Our
ability to file IND’s, and to build diversity and scale in our product
portfolio, depends to a significant extent on our ability to identify potential
product candidates through our preclinical research and to conduct preclinical
research efficiently.  Our preclinical or clinical development efforts
may not be successfully completed, we may not file further IND’s and clinical
trials may not commence as planned.




Our
product candidates may fail to demonstrate safety or efficacy in clinical
trials.  Failures of clinical trials of any product candidate could
delay the development of other product candidates or hinder our ability to
obtain additional financing.  In addition, failures in our clinical
trials can lead to additional research and development expenses.  Any
delays in, or termination of, our clinical trials could impede our ability to
commercialize our product candidates and materially harm our business, financial
condition and results of operations.




We
rely almost entirely on third party collaborators for licenses of technology on
which we rely for the development of our products and to assist us or share in
the costs of product development.




The
antibody therapeutic products and the related technologies we are pursuing for
commercialization were developed and licensed to us by third party
collaborators, including The Ohio State University, Columbia University of New
York, The Allegheny-Singer Research Institute and The Institute Gustave Roussy,
Paris, France.  We have entered into four license agreements that
grant to us certain exclusive worldwide rights to utilize these institutions’
patented processes and products to develop our own product
portfolio.  Subject to specific termination provisions, each of these
agreements generally extend until the expiration of the patents licensed to
Omnimmune or some period after the commercialization of products using the
subject patents, whichever is later.




Our
strategy for the development and commercialization of antibody therapeutic
products depends, in part, upon the formation of collaboration agreements with
third parties.  Potential third parties include pharmaceutical and
biotechnology companies, technology companies, academic institutions and other
entities.  We will rely on these agreements to successfully develop
and commercialize product candidates, including for us to:




•
            access
      proprietary target antigens for which we can generate fully human antibody
      products;




•
            fund
      research, preclinical development, clinical trials and
      manufacturing;




•
            seek
      and obtain regulatory approvals;
and




•
            successfully
      commercialize existing and future product
  candidates.




Our
dependence on licensing, collaboration, manufacturing and other agreements with
third parties subjects us to a number of risks.  These agreements may
not be on terms that prove favorable to us, and we may afford our collaborators
significant discretion in electing whether to pursue any of the planned
activities.  Licensing and other contractual arrangements may require
us to relinquish our rights to certain of our technologies, products or
marketing territories.  To the extent we agree to work exclusively
with one collaborator in a given therapeutic area, our opportunities to
collaborate with other entities could be curtailed.




We cannot
control the amount or timing of resources our collaborators may devote to
collaboration, and collaborators may not perform their obligations as
expected.  Additionally, business combinations or significant changes
in a collaborator’s business strategy may adversely affect a collaborator’s
willingness or ability to complete its obligations under the
arrangement.  Even if we fulfill our obligations under an agreement,
our collaborators may terminate the agreement at any time following proper
written notice.  The termination or breach of agreements by our
collaborators, or the failure of our collaborators to complete their obligations
in a timely manner, could materially harm our business, financial condition and
results of operations.  If we are not able to establish further
collaboration agreements or any or all of our agreements are terminated, we may
be required to seek new collaborators or to undertake product development and
commercialization at our own expense.  Such an undertaking
may:




•
            limit
      the number of product candidates that we will be able to develop and
      reduce the likelihood of successful product
  introduction;




•
            significantly
      increase our capital requirements;
and




•
            place
      additional strain on our management’s
time.




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Potential
collaborators may pursue alternative technologies, including those of our
competitors, or enter into other transactions that could make collaboration with
us less attractive to them.  For example, if an existing collaborator
purchases a company that is one of our competitors, that company could be less
willing to continue its collaboration with us.  Moreover, disputes may
arise with respect to the ownership of rights to any technology or products
developed with any current or future collaborator.  Lengthy
negotiations with potential new collaborators or disagreements between us and
our collaborators may lead to delays in or termination of the research,
development or commercialization of product candidates or result in
time-consuming and expensive litigation or arbitration.  The decision
by our collaborators to pursue alternative technologies or the failure of our
collaborators to develop or commercialize successfully any product candidate to
which they have obtained rights from us could materially harm our business,
financial condition and results of operations.




We
may face challenges from third parties regarding the validity of our patents and
proprietary rights, or from third parties asserting that we are infringing their
patents or proprietary rights, which could result in litigation that would be
costly to defend and could deprive us of valuable rights.




Parties
have conducted research for many years in the antibody immunotherapy and cancer
vaccine fields.  This research has resulted in a substantial number of
issued patents and an even larger number of pending patent
applications.  The publication of discoveries in the scientific or
patent literature frequently occurs substantially later than the date on which
the underlying discoveries were made.  Our commercial success depends
significantly on our ability to operate without infringing the patents and other
proprietary rights of third parties.  Our technologies may
unintentionally infringe the patents or violate other proprietary rights of
third parties.  Such infringement or violation may prevent us and our
collaborators from pursuing product development or
commercialization.  Such a result could materially harm our business,
financial condition and results of operations.




Extensive
litigation regarding patents and other intellectual property rights has been
common in the biotechnology and pharmaceutical industries.  The
defense and prosecution of intellectual property suits, United States Patent and
Trademark Office interference proceedings, and related legal and administrative
proceedings in the United States and internationally involve complex legal and
factual questions.  As a result, such proceedings are costly and
time-consuming to pursue and their outcome is uncertain.  Litigation
may be necessary to:




•
            enforce
      patents that we own or license;




•
            protect
      trade secrets or know-how that we own or license;
  or




•
            determine
      the enforceability, scope and validity of the proprietary rights of
      others.




Our
involvement in any litigation, interference or other administrative proceedings
could cause us to incur substantial expense and could significantly divert the
efforts of our technical and management personnel.  An adverse
determination may subject us to loss of our proprietary position or to
significant liabilities, or require us to seek licenses that may not be
available from third parties.  An adverse determination in a judicial
or administrative proceeding, or a failure to obtain necessary licenses, may
restrict or prevent us from manufacturing and selling our products, if
any.




If
we do not comply with registration rights granted to certain holders of our
restricted securities, we may be required to pay liquidated damages to such
holders.




Under the
terms of the First Offering, we are required to file a registration statement
with the SEC covering all shares of common stock issued in connection with the
First Offering, including shares of common stock into which any warrants are
exercisable, no later than 90 days after the Termination Date of the First
Offering (i.e., 90 days after October 31, 2008).  We are also required
to have such “resale” registration statement declared effective by the SEC no
later than 180 days after the Termination Date of the First Offering, and to
maintain its effectiveness until such time as all securities registered under
the registration statement have been sold or are otherwise able to be sold under
Rule 144 of the Securities Act without regard to volume limitations, whichever
is earlier.  We cannot be certain that we will be able to timely file
and/or obtain or maintain the effectiveness of such registration statement, and
absent the infusion of substantial additional working capital, it is doubtful
that these deadlines will be met.  If the “resale” registration
statement is not timely filed or timely declared effective by the SEC, we will
be required to pay each holder liquidated damages in an amount equal to 1.0% of
the aggregate purchase price paid by each investor for each one month period
until the registration statement is either filed or declared
effective.  The liquidated damages will be payable monthly in either
cash or additional shares of common stock, as determined by the
Company.




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 Table of Contents




Our
stock price is volatile.




The
market price of our common stock is highly volatile and could fluctuate widely
in price in response to various factors, many of which are beyond our control,
including the following:




•
            changes
      in our industry;




•
            announcements
      of technological innovations and discoveries by us or its
      competitors;




•
            developments
      concerning any research and development, clinical trials, manufacturing,
      and marketing collaborations;




•
            new
      products or services that us or its competitors
  offer;




•
            the
      initiation, conduct and/or outcome of intellectual property and/or
      litigation matters;




•
            changes
      in financial estimates by securities
analysts;




•
            changes
      in the economic performance and/or market valuations of other
      biotechnology companies;




•
            our
      ability to obtain working capital
financing;




•
            additions
      or departures of key personnel;




•
            shares
      of our common stock are in the hands of a small number of persons whose
      sales or lack of sales could result in positive or negative pricing
      pressure on the market price for common
stock;




•
            sales
      of common stock;




•
            our
      ability to execute our business
plan;




•
            operating
      results that fall below
expectations;




•
            announcement
      of or loss of any strategic
relationship;




•
            regulatory
      developments in the United States and other
  countries;




•
            economic
      and other external factors; and




•
            period-to-period
      fluctuations in our financial
results.




The stock
market in general has recently experienced relatively large price and volume
fluctuations.  In particular, market prices of securities of
biotechnology companies have experienced fluctuations that often have been
unrelated or disproportionate to the operating results of these
companies.  Continued market fluctuations could result in extreme
volatility in the price of our common stock, which could cause a decline in the
value of our common stock.  Prospective investors should also be aware
that price volatility may be worse if the trading volume of our common stock is
low.  These market fluctuations may also materially and adversely
affect the market price of common stock.




Should
our common stock remain listed on the OTC Bulletin Board or be suspended from
the OTC Bulletin Board, the trading price of our common stock could suffer and
the trading market for our common stock may be less liquid and our common stock
price may be subject to increased volatility.  Furthermore, for
companies whose securities are traded in the OTC Bulletin Board, it is more
difficult (1) to obtain accurate quotations, (2) to obtain coverage for
significant news events because major wire services generally do not publish
press releases about such companies, and (3) to obtain needed
capital.




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 Table of Contents




Our
common stock may be deemed a “penny stock,” which would make it more difficult
for our investors to sell their shares.




Our
common stock may be subject to the “penny stock” rules adopted under Section
15(g) of the Exchange Act.  The penny stock rules generally apply to
companies whose common stock is not listed on The NASDAQ Stock Market or other
national securities exchange and trades at less than $5.00 per share, other than
companies that have had average revenue of at least $6,000,000 for the last
three years or that have tangible net worth of at least $5,000,000 ($2,000,000
if the company has been operating for three or more years).  These
rules require, among other things, that brokers who trade penny stock to persons
other than “established customers” complete certain documentation, make
suitability inquiries of investors and provide investors with certain
information concerning trading in the security, including a risk disclosure
document and quote information under certain circumstances.  Many
brokers have decided not to trade penny stocks because of the requirements of
the penny stock rules and, as a result, the number of broker-dealers willing to
act as market makers in such securities is limited.  If we remain
subject to the penny stock rules for any significant period, it could have an
adverse effect on the market, if any, for our securities.  If our
securities are subject to the penny stock rules, investors will find it more
difficult to dispose of our securities.




Substantial
future issuances and sales of our common stock, the exercise and sale of
our common stock underlying our warrants or options, or the conversion and sale
of our common stock underlying our convertible promissory notes could depress
our stock price.




The
market price for our common stock could decline, perhaps significantly, as a
result of issuances of a large number of shares of our common stock in the
public market or even the perception that such issuances could
occur.  Under certain registration rights agreements and a tag-along
rights agreement outstanding, certain holders of outstanding shares of our
common stock and other securities have demand and other registration rights with
respect to the common stock held or upon conversion of the underlying
security.  Sales of a substantial number of these shares of common
stock, or the perception that holders of a large number of shares intend to sell
their shares, could depress the market price of our common stock.  The
existence of such registration rights could also make it more difficult for us
to raise funds through future offerings of our equity
securities.




At
the closing of the First Offering, we issued warrants to investors to acquire
707,200 shares of common stock and warrants to the placement agent to acquire
141,440 shares of common stock, which is an aggregate of 848,640 shares of
common stock underlying such warrants that, if exercised and sold, could cause
the market price for our common stock to decline, perhaps
significantly.  Furthermore, if we close on the 2,492,800 Units being
offered as part of the Second Offering (excluding any over-allotment
subscriptions), in which we would issue warrants to investors to acquire
2,492,800 shares of common stock and warrants to the placement agent to acquire
498,560 shares of common stock, which is an aggregate of 2,991,360 additional
shares of common stock underlying such warrants.  We also have
warrants outstanding to investors to acquire an additional 307,460 shares of
common stock, which include warrants underlying certain convertible promissory
notes.  If all, or a substantial part of these warrants, were
exercised and the underlying common stock sold, then it could also cause the
market price for our common stock to decline, perhaps
significantly.




We have
granted options to purchase common stock in the aggregate amount of 2,250,000
shares.  All of these stock options are currently eligible to be
exercised, although such options are currently subject to a lock-up period of
nine months from August 7, 2008.  After the lock-up period expires, if
all or a substantial part of these stock options were exercised and the
underlying common stock sold, then it could also cause the market price for our
common stock to decline, perhaps significantly.




We have
convertible promissory notes outstanding which have the right to convert into an
aggregate amount of 859,360 shares of common stock based on certain Company
financing acceleration triggers.  If all or a substantial part of
these convertible promissory notes were triggered and then were exercised and
the underlying common stock sold, then it could also cause the market price for
our common stock to decline, perhaps significantly.




ITEM 2.
            UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS




For more
information about unregistered sales of our securities, see Item 1, Note 8 of
this report for a discussion of our sales of convertible promissory notes and
Units.




ITEM 3.
            DEFAULTS
      UPON SENIOR SECURITIES




None.




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




None.




ITEM 5.
            OTHER
      INFORMATION




None.




ITEM 6.
            EXHIBITS




31.1
            
            Chief Executive Officer Certification pursuant to
      Section 302 of the Sarbanes-Oxley Act of 2002.32.1
            
            Chief Executive Officer Certification pursuant to
      Section 906 of the Sarbanes-Oxley Act of
  2002.




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SIGNATURES




Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.




OMNIMMUNE
      HOLDINGS, INC.Dated:
      November 14, 2008
            
            /s/
      HARRIS A.
      LICHTENSTEINHarris
      A. LichtensteinChief
      Executive Officer


















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