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 March 31,
2009.




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 of incorporation or organization)
                  
                  (I.R.S.
      Employer Identification
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.  Yes x No o




Indicate
by check mark whether the Registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the Registrant
was required to submit and post such
files).    Yes   ̈    No   ̈





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). Yes oNo x




As of May
19, 2009 there were 8,814,921  shares of the issuer’s common stock
outstanding.




1
 Table of Contents




OMNIMMUNE
HOLDINGS, INC. and Subsidiaries


Quarterly
Report on Form 10-Q




TABLE OF CONTENTS




PagePART
      I - FINANCIAL INFORMATIONItem
      1.
                                                                                                                      Financial Statements
                                                                                                                      4Consolidated Balance Sheets as of March 31, 2009 and
      December 31, 2008
                                                                                                                      4Consolidated Statements of Operations for the three
      months ended March 31, 2009 and March 31, 2008
                                                                                                                      5Consolidated Statement of Stockholders’ Deficiency as
      of  March 31, 2009
                                                                                                                      5Consolidated Statements of Cash Flows for the three
      months ended March 31, 2009 and March 31, 2008
                                                                                                                      18Notes to Consolidated Financial
      Statements
                                                                                                                      20Item
      2.
                                                                                                                      Management’s Discussion and Analysis of Financial
      Condition and Results of Operations
                                                                                                                      31Item
      3.
                                                                                                                      Quantitative and Qualitative Disclosures About Market
      Risk
                                                                                                                      35Item
      4.
                                                                                                                      Controls and Procedures
                                                                                                                      35PART
      II - OTHER INFORMATIONItem
      1.
                                                                                                                      Legal Proceedings
                                                                                                                      36Item
      1A.
                                                                                                                      Risk Factors
                                                                                                                      36Item
      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
                                                                                                                      38
  2
 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




ITEM 1.
            FINANCIAL
STATEMENTS





OMNIMMUNE
HOLDINGS, INC.


(A
DEVELOPMENT STAGE ENTERPRISE)


CONSOLIDATED
BALANCE SHEETS




March
      31,
                                                December
      31,2009
                                                
                                                
                                                2008Assets
                                                
                                                (Unaudited)
                                                
                                                
                                                (Audited)Current
      assetsCash
      and cash equivalents
                                                
                                                $
                                                2,359
                                                
                                                
                                                $
                                                52,615Total
      current assets
                                                
                                                $
                                                2,359
                                                
                                                
                                                $
                                                52,615Liabilities
      and stockholders' deficiencyCurrent
      liabilitiesAccounts
      payable and accrued liabilities
                                                
                                                $
                                                722,738
                                                
                                                
                                                $
                                                471,775Line
      of credit
                                                
                                                
                                                256,568
                                                
                                                
                                                
                                                259,157Accrued
      interest
                                                
                                                
                                                186,889
                                                
                                                
                                                
                                                192,380Cash
      advance
                                                
                                                
                                                110,000
                                                
                                                
                                                
                                                100,000Notes
      payable - current portion , net
                                                
                                                
                                                437,046
                                                
                                                
                                                
                                                -Accounts
      payable and accrued liabilities-related party
                                                
                                                
                                                360,000
                                                
                                                
                                                
                                                351,748Accrued
      interest- related party
                                                
                                                
                                                477,616
                                                
                                                
                                                
                                                424,210Notes
      payable due to related parties, net
                                                
                                                
                                                -
                                                
                                                
                                                
                                                287,768Total
      current liabilities
                                                
                                                
                                                2,550,857
                                                
                                                
                                                
                                                2,087,038Long
      term portion of notes payable - net
                                                
                                                
                                                562,534
                                                
                                                
                                                
                                                709,035Long
      term portion of notes payable, due to related parties, net
                                                
                                                
                                                1,001,318
                                                
                                                
                                                
                                                1,000,864Total
      liabilities
                                                
                                                
                                                4,114,709
                                                
                                                
                                                
                                                3,796,937Commitments
      and contingencies
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -Stockholders'
      deficiencyCommon
      stock, $0.0001 par value; 50,000,000 shares authorized;8,814,921
      shares issued and outstandingfor
      both periods
                                                
                                                
                                                880
                                                
                                                
                                                
                                                880Additional
      paid-in capital
                                                
                                                
                                                15,603,198
                                                
                                                
                                                
                                                15,592,797Deficit
      Accumulated during the Development Stage
                                                
                                                
                                                (19,716,428
                                                )
                                                
                                                
                                                (19,337,999
                                                )Total
      stockholder's deficit
                                                
                                                
                                                (4,112,352
                                                )
                                                
                                                
                                                (3,744,322
                                                )$
                                                2,359
                                                
                                                
                                                $
                                                52,615




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
                                                March
      31,
                                              
                                              
                                              For
      the Three Months Ended
                                                March
      31,
                                              
                                              
                                              Cumulative
      from Inception (January 15, 1997) to March 31,2009
                                              
                                              
                                              2008
                                              
                                              
                                              2009Revenue
                                              
                                              $
                                              -
                                              
                                              
                                              $
                                              -
                                              
                                              
                                              $
                                              -Operating
      expenses:General
      and administrative expenses
                                              
                                              
                                              321,741
                                              
                                              
                                              
                                              430,126
                                              
                                              
                                              
                                              12,838,750Impairment
      of license agreement
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              1,701,936Total
      operating expenses
                                              
                                              
                                              321,741
                                              
                                              
                                              
                                              430,126
                                              
                                              
                                              
                                              14,540,686Operating
      loss
                                              
                                              
                                              (321,741
                                              )
                                              
                                              
                                              (430,126
                                              )
                                              
                                              
                                              (14,540,686
                                              )Other
      expense:Interest
      (income) expense, net
                                              
                                              
                                              56,688
                                              
                                              
                                              
                                              6,707,853
                                              
                                              
                                              
                                              11,592,891Cancellation
      of shares previously issued for license agreement
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              (842,514)Gain
      on restructuring of debt
                                              
                                              
                                              -
                                              
                                              
                                              
                                              (5,677,726
                                              )
                                              
                                              
                                              (5,574,635
                                              )Total
      other (income) expense
                                              
                                              
                                              (56,688
                                              )
                                              
                                              
                                              (1,030,127
                                              )
                                              
                                              
                                              (5,175,742
                                              )Loss
      before taxes
                                              
                                              
                                              (378,429
                                              )
                                              
                                              
                                              (1,460,253
                                              )
                                              
                                              
                                              (19,716,428
                                              )Provision
      for taxes
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -Net
      loss
                                              
                                              $
                                              (378,429
                                              )
                                              
                                              $
                                              (1,460,253
                                              )
                                              
                                              $
                                              (19,716,428
                                              )Net
      loss per share - basic and diluted
                                              
                                              $
                                              (0.04
                                              )
                                              
                                              $
                                              (0.50
                                              )Weighted
      average shares outstanding - basic and diluted
                                              
                                              
                                              8,814,926
                                              
                                              
                                              
                                              2,938,888





See notes
to consolidated financial statements.


5
 Table of Contents





OMNIMMUNE
HOLDINGS, INC.


(A
DEVELOPMENT STAGE ENTERPRISE)


CONSOLIDATED
STATEMENT OF STOCKHOLDERS' DEFICIENCY





Preferred
      Stock
                                      
                                      
                                      Common
      StockShares
                                      
                                      
                                      Value
                                      
                                      
                                      Additional
      Paid-in Capital
                                      
                                      
                                      Shares
                                      
                                      
                                      Value
                                      
                                      
                                      Additional
      Paid-in Capital
                                      
                                      
                                      Common
                                        Stock
                                        Subscribed
                                      
                                      
                                      Accumulated
                                        Deficit
                                      
                                      
                                      Total
                                        Stockholders
                                        EquityBalance
      at January 15, 1997 (date of inception)
                                      
                                      
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -Contribution
      of assets and liabilities by founder
                                      
                                      
                                      11,229
                                      
                                      
                                      
                                      112
                                      
                                      
                                      
                                      49,888
                                      
                                      
                                      
                                      1,055,507
                                      
                                      
                                      
                                      106
                                      
                                      
                                      
                                      43,466
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      43,572Beneficial
      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
                                      
                                      
                                      $
                                      106
                                      
                                      
                                      $
                                      371,166
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      (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
                                      
                                      
                                      $
                                      106
                                      
                                      
                                      $
                                      414,166
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      (1,694,834
                                      )
                                      
                                      $
                                      (1,230,562
                                      )




6
 Table of Contents


OMNIMMUNE
HOLDINGS, INC.


(A
DEVELOPMENT STAGE ENTERPRISE)


CONSOLIDATED
STATEMENT OF STOCKHOLDERS' DEFICIENCY


(Continued)




Preferred
      Stock
                          
                          
                          Common
      StockShares
                          
                          
                          Value
                          
                          
                          Additional
      Paid-in Capital
                          
                          
                          Shares
                          
                          
                          Value
                          
                          
                          Additional
      Paid-in Capital
                          
                          
                          Common
                            Stock
                            Subscribed
                          
                          
                          Accumulated
                            Deficit
                          
                          
                          Total
                            Stockholders
                            EquityIssuance
      of 55,553 shares of common stock for technology license at $1.10 per
      share
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          55,553
                          
                          
                          
                          5
                          
                          
                          
                          61,837
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          61,842Issuance
      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
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          12,000  7
 Table of Contents
  Preferred
      Stock
                                                                          
                                                                          
                                                                          Common
      StockShares
                                                                          
                                                                          
                                                                          Value
                                                                          
                                                                          
                                                                          Additional
      Paid-in Capital
                                                                          
                                                                          
                                                                          Shares
                                                                          
                                                                          
                                                                          Value
                                                                          
                                                                          
                                                                          Additional
      Paid-in Capital
                                                                          
                                                                          
                                                                          Common
                                                                              Stock
                                                                              Subscribed
                                                                          
                                                                          
                                                                          Accumulated
                                                                              Deficit
                                                                          
                                                                          
                                                                          Total
                                                                            Stockholders
                                                                            EquityLoss
      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
                                                                          
                                                                          
                                                                          $
                                                                          111
                                                                          
                                                                          
                                                                          $
                                                                          488,003
                                                                          
                                                                          
                                                                          $
                                                                          -
                                                                          
                                                                          
                                                                          $
                                                                          (2,124,526
                                                                          )
                                                                          
                                                                          $
                                                                          (1,486,412
                                                                          )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
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          6,250
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          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
                                                                          
                                                                          
                                                                          $
                                                                          111
                                                                          
                                                                          
                                                                          $
                                                                          524,555
                                                                          
                                                                          
                                                                          $
                                                                          -
                                                                          
                                                                          
                                                                          $
                                                                          (2,546,832
                                                                          )
                                                                          
                                                                          $
                                                                          (1,772,166
                                                                          )





8
 Table of Contents


OMNIMMUNE
HOLDINGS, INC.


(A
DEVELOPMENT STAGE ENTERPRISE)


CONSOLIDATED
STATEMENT OF STOCKHOLDERS' DEFICIENCY


(Continued)


Preferred
      Stock
                                                                      
                                                                      
                                                                      Common
      StockShares
                                                                      
                                                                      
                                                                      Value
                                                                      
                                                                      
                                                                      Additional
      Paid-in Capital
                                                                      
                                                                      
                                                                      Shares
                                                                      
                                                                      
                                                                      Value
                                                                      
                                                                      
                                                                      Additional
      Paid-in Capital
                                                                      
                                                                      
                                                                      Common
                                                                        Stock
                                                                        Subscribed
                                                                      
                                                                      
                                                                      Accumulated
                                                                        Deficit
                                                                      
                                                                      
                                                                      Total
                                                                        Stockholders
                                                                        EquityIssuance
      of 1,055,507 shares of common stock at $2.24 per share in exchange
      for 2,500,000 shares in InVitro technology
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      1,055,507
                                                                      
                                                                      
                                                                      
                                                                      107
                                                                      
                                                                      
                                                                      
                                                                      59,894
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      60,001Issuance
      of 2,807 shares of common stock at $2.24 per share to a consultant for
      services rendered
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      2,807
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      6,250
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      6,250Issuance
      of 2,807 shares of common stock at $2.24 per share to a consultant for
      services rendered
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      2,807
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      6,250
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      6,250Issuance
      of 2,807 shares of common stock at $2.24 per share to a consultant for
      services rendered
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      2,807
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      6,250
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      6,250Issuance
      of 2,807 shares of common stock at $2.24 per share to a consultant for
      services rendered
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      2,807
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      6,250
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      6,250Issuance
      of 2,807 shares of common stock at $2.24 per share to a consultant for
      services rendered
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      2,807
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      6,250
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      6,250Issuance
      of 2,807 shares of common stock at $2.24 per share to a consultant for
      services rendered
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      2,807
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      6,250
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      6,250Issuance
      of 2,807 shares of common stock at $2.24 per share to a consultant for
      services rendered
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      2,807
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      6,250
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      6,250Issuance
      of 2,807 shares of common stock at $2.24 per share to a consultant for
      services rendered
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      2,807
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      6,250
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      6,250  9
 Table of Contents
  Preferred
      Stock
                                                                                                                        
                                                                                                                        
                                                                                                                        Common
      StockShares
                                                                                                                        
                                                                                                                        
                                                                                                                        Value
                                                                                                                        
                                                                                                                        
                                                                                                                        Additional
      Paid-in Capital
                                                                                                                        
                                                                                                                        
                                                                                                                        Shares
                                                                                                                        
                                                                                                                        
                                                                                                                        Value
                                                                                                                        
                                                                                                                        
                                                                                                                        Additional
      Paid-in Capital
                                                                                                                        
                                                                                                                        
                                                                                                                        Common
                                                                                                                          Stock
                                                                                                                          Subscribed
                                                                                                                        
                                                                                                                        
                                                                                                                        Accumulated
                                                                                                                          Deficit
                                                                                                                        
                                                                                                                        
                                                                                                                        Total
                                                                                                                          Stockholders
                                                                                                                          EquityIssuance
      of 2,807 shares of common stock at $2.24 per share to a consultant for
      services rendered
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        2,807
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        6,250
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        6,250Issuance
      of 2,807 shares of common stock at $2.24 per share to a consultant for
      services rendered
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        2,807
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        6,250
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        6,250Issuance
      of 2,807 shares of common stock at $2.24 per share to a consultant for
      services rendered
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        2,807
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        6,250
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        6,250Issuance
      of 2,807 shares of common stock at $2.24 per share to a consultant for
      services rendered
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        2,807
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        6,250
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        6,250Issuance
      of 60,665 shares of common stock at $2.24 per share for a technology
      license
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        60,665
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        7
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        135,060
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        135,067Issuance
      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 for
      services rendered
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        7,018
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        2
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        15,624
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        15,626Value
      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
                                                                                                                        
                                                                                                                        
                                                                                                                        $
                                                                                                                        227
                                                                                                                        
                                                                                                                        
                                                                                                                        $
                                                                                                                        850,633
                                                                                                                        
                                                                                                                        
                                                                                                                        $
                                                                                                                        -
                                                                                                                        
                                                                                                                        
                                                                                                                        $
                                                                                                                        (3,506,363
                                                                                                                        )
                                                                                                                        
                                                                                                                        $
                                                                                                                        (2,355,503
                                                                                                                        )




10
 Table of Contents


OMNIMMUNE
HOLDINGS, INC.


(A
DEVELOPMENT STAGE ENTERPRISE)


CONSOLIDATED
STATEMENT OF STOCKHOLDERS' DEFICIENCY


(Continued)


Preferred
      Stock
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      Common
      StockShares
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      Value
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      Additional
      Paid-in Capital
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      Shares
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      Value
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      Additional
      Paid-in Capital
                                                                                                                                      
                                                                                                                                      Common
                                                                                                                                        Stock
                                                                                                                                        Subscribed
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      Accumulated
                                                                                                                                        Deficit
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      Total
                                                                                                                                        Stockholders
                                                                                                                                        EquityIssuance
      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
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      4
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      49,996
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      -
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      -
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      -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
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      2
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      24,998
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      -
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      -
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      -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
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      2
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      24,998
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      -
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      -
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      -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
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      1
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      24,999
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      -
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      -
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      -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
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      3
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      74,997
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      -
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      -
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      
                                                                                                                                      -
  11
 Table of Contents
 Preferred
      Stock
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    Common
      StockShares
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    Value
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    Additional
      Paid-in Capital
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    Shares
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    Value
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    Additional
      Paid-in Capital
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    Common
                                                                                                                                                                                      Stock
                                                                                                                                                                                      Subscribed
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    Accumulated
                                                                                                                                                                                      Deficit
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    Total
                                                                                                                                                                                      Stockholders
                                                                                                                                                                                      EquityConversion
      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
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    3
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    74,997
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    -
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    -
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    -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
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    1
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    24,999
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    -
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    -
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    -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
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    -
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    5,000
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    -
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    -
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    -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
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    $
                                                                                                                                                                                    243
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    $
                                                                                                                                                                                    2,330,973
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    $
                                                                                                                                                                                    -
                                                                                                                                                                                    
                                                                                                                                                                                    
                                                                                                                                                                                    $
                                                                                                                                                                                    (6,567,962
                                                                                                                                                                                    )
                                                                                                                                                                                    
                                                                                                                                                                                    $
                                                                                                                                                                                    (4,236,746
                                                                                                                                                                                    )





12
 Table of Contents





OMNIMMUNE
HOLDINGS, INC.


(A
DEVELOPMENT STAGE ENTERPRISE)


CONSOLIDATED
STATEMENT OF STOCKHOLDERS' DEFICIENCY


(Continued)




Preferred
      Stock
                              
                              
                              Common
      StockShares
                              
                              
                              Value
                              
                              
                              Additional
      Paid-in Capital
                              
                              
                              Shares
                              
                              
                              Value
                              
                              
                              Additional
      Paid-in Capital
                              
                              
                              Common
                                Stock
                                Subscribed
                              
                              
                              Accumulated
                                Deficit
                              
                              
                              Total
                                Stockholders
                                EquityBeneficial
      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
                              
                              
                              $
                              243
                              
                              
                              $
                              2,360,374
                              
                              
                              $
                              -
                              
                              
                              $
                              (7,108,948
                              )
                              
                              $
                              (4,748,331
                              )Issuance
      of 1,404 shares of common stock at $2.24 to a consultant for services
      rendered
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              1,404
                              
                              
                              
                              -
                              
                              
                              
                              3,125
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              3,125Issuance
      of 1,404 shares of common stock at $2.24 to a consultant for services
      rendered
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              1,404
                              
                              
                              
                              -
                              
                              
                              
                              3,125
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              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
                              
                              
                              $
                              243
                              
                              
                              $
                              2,476,773
                              
                              
                              $
                              -
                              
                              
                              $
                              (8,361,744
                              )
                              
                              $
                              (5,884,728
                              )Issuance
      of 134,746 shares of common stock at $2.24 for a technology
      license
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              134,746
                              
                              
                              
                              13
                              
                              
                              
                              299,987
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              300,000Issuance
      of 6,661 shares at $3.74 per share for cash
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              6,661
                              
                              
                              
                              1
                              
                              
                              
                              24,999
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              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
                              
                              
                              $
                              257
                              
                              
                              $
                              2,873,759
                              
                              
                              $
                              -
                              
                              
                              $
                              (9,503,192
                              )
                              
                              $
                              (6,629,176
                              )







13
 Table of Contents


OMNIMMUNE
HOLDINGS, INC.


(A
DEVELOPMENT STAGE ENTERPRISE)


CONSOLIDATED
STATEMENT OF STOCKHOLDERS' DEFICIENCY


(Continued)




Preferred
      Stock
                            
                            
                            Common
      StockShares
                            
                            
                            Value
                            
                            
                            Additional
      Paid-in Capital
                            
                            
                            Shares
                            
                            
                            Value
                            
                            
                            Additional
      Paid-in Capital
                            
                            
                            Common
                              Stock
                              Subscribed
                            
                            
                            Accumulated
                              Deficit
                            
                            
                            Total
      Stockholders
                              EquityIssuance
      of 4,913 pursuant to an antidilution agreement
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            4,913
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Issuance
      of 1,235 pursuant to an antidilution agreement
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            1,235
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Issuance
      of 1,235 pursuant to an antidilution agreement
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            1,235
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Issuance
      of 1,235 pursuant to an antidilution agreement
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            1,235
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Issuance
      of 3,706 pursuant to an antidilution agreement
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            3,705
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Issuance
      of 3,706 pursuant to an antidilution agreement
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            3,705
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Issuance
      of 1,235 pursuant to an antidilution agreement
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            1,235
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Issuance
      of 225 pursuant to an antidilution agreement
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            225
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -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
                            )  14
 Table of Contents
   Preferred
      Stock
                                                                                      
                                                                                      
                                                                                      Common
      StockShares
                                                                                      
                                                                                      
                                                                                      Value
                                                                                      
                                                                                      
                                                                                      Additional
      Paid-in Capital
                                                                                      
                                                                                      
                                                                                      Shares
                                                                                      
                                                                                      
                                                                                      Value
                                                                                      
                                                                                      
                                                                                      Additional
      Paid-in Capital
                                                                                      
                                                                                      
                                                                                      Common
                                                                                        Stock
                                                                                        Subscribed
                                                                                      
                                                                                      
                                                                                      Accumulated
                                                                                        Deficit
                                                                                      
                                                                                      
                                                                                      Total
      Stockholders
                                                                                        Equity
 Balance
      at December 31, 2006
                            
                            
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            
                            2,591,893
                            
                            
                            $
                            257
                            
                            
                            $
                            2,877,759
                            
                            
                            $
                            -
                            
                            
                            $
                            (10,579,458
                            )
                            
                            $
                            (7,701,442
                            )Issuance
      of 7,018 shares at $3.74 per share for services rendered
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            7,017
                            
                            
                            
                            2
                            
                            
                            
                            26,249
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            26,251Issuance
      of 25,989 shares for $3.74 per share for licensing
    agreement
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            25,988
                            
                            
                            
                            2
                            
                            
                            
                            97,204
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            97,206Issuance
      of 25,989 shares for $3.74 per share for licensing
    agreement
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            25,990
                            
                            
                            
                            2
                            
                            
                            
                            97,204
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            97,206119,053
      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
                            
                            
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            
                            2,650,888
                            
                            
                            $
                            263
                            
                            
                            $
                            9,702,846
                            
                            
                            $
                            890,610
                            
                            
                            $
                            (13,348,127
                            )
                            
                            $
                            (2,754,408
                            )Recapitalization
      upon reverse merger
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            3,000,000
                            
                            
                            
                            300
                            
                            
                            
                            (300
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Issuance
      of 119,053 shares of common stock at $0.37 per share, previously
      accrued
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            119,053
                            
                            
                            
                            12
                            
                            
                            
                            445,293
                            
                            
                            
                            (445,305
                            )
                            
                            
                            -
                            
                            
                            
                            -  15
 Table of Contents
  Preferred
      Stock
                                                                                        
                                                                                        
                                                                                        Common
      StockShares
                                                                                        
                                                                                        
                                                                                        Value
                                                                                        
                                                                                        
                                                                                        Additional
      Paid-in Capital
                                                                                        
                                                                                        
                                                                                        Shares
                                                                                        
                                                                                        
                                                                                        Value
                                                                                        
                                                                                        
                                                                                        Additional
      Paid-in Capital
                                                                                        
                                                                                        
                                                                                        Common
                                                                                          Stock
                                                                                          Subscribed
                                                                                        
                                                                                        
                                                                                        Accumulated
                                                                                          Deficit
                                                                                        
                                                                                        
                                                                                        Total
      Stockholders
                                                                                          Equity
 Issuance
      of 119,053 shares of common stock at $0.37 per share, previously
      accrued
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                119,053
                                
                                
                                
                                12
                                
                                
                                
                                445,293
                                
                                
                                
                                (445,305
                                )
                                
                                
                                -
                                
                                
                                
                                -Issuance
      of 1,055,507 shares of common stock for cash at a price of $0.011 per
      share
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                1,055,508
                                
                                
                                
                                106
                                
                                
                                
                                44,690
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                44,796Issuance
      of 100,000 shares of common stock and 20,000 warrants to purchaseadditional shares of common stock at a price of $0.05 per share as
      a discount on notes payable
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                100,000
                                
                                
                                
                                10
                                
                                
                                
                                55,991
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                56,001Issuance
      of 1,055,508 shares of common stock at a price of $0.03 per share to a
      board member for services
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                1,055,507
                                
                                
                                
                                105
                                
                                
                                
                                29,895
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                30,000Issuance
      of 150,000 shares of common stock at a price of $1.25 per share to
      officers for services
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                150,000
                                
                                
                                
                                15
                                
                                
                                
                                187,485
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                187,500Issuance
      of 137,500 shares of common stock at a price of $0.05 per share as a
      discount to notes payable
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                137,500
                                
                                
                                
                                14
                                
                                
                                
                                6,861
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                6,875
  16
 Table of Contents
  Preferred
      Stock
                                                                                        
                                                                                        
                                                                                        Common
      StockShares
                                                                                        
                                                                                        
                                                                                        Value
                                                                                        
                                                                                        
                                                                                        Additional
      Paid-in Capital
                                                                                        
                                                                                        
                                                                                        Shares
                                                                                        
                                                                                        
                                                                                        Value
                                                                                        
                                                                                        
                                                                                        Additional
      Paid-in Capital
                                                                                        
                                                                                        
                                                                                        Common
                                                                                          Stock
                                                                                          Subscribed
                                                                                        
                                                                                        
                                                                                        Accumulated
                                                                                          Deficit
                                                                                        
                                                                                        
                                                                                        Total
      Stockholders
                                                                                          Equity
 Sale
      of 707,200 shares of common stock and 707,200 warrants to purchase
      additional shares of common stock at a price of $2.50 per share for cash,
      net of costs of $359,729
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            707,200
                            
                            
                            
                            71
                            
                            
                            
                            1,408,200
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            1,408,271Cancellation
      of shares issued for technology license
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (279,788
                            )
                            
                            
                            (28
                            )
                            
                            
                            (842,486
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (842,514
                            )Value
      of options to purchase 2,250,000 shares of common stock at a price of
      $2,50 per shares issued to board member for extension of payment
      terms
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            2,811,962
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            2,811,962Value
      of warrants to purchase 75,000 shares of common stock at $2,50 per share
      issued to a board member for services
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            93,733
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            93,733Value
      of warrants to 70,180 shares of common stock at $1,78 per share issued to
      a board member for extension of credit terms
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            129,278
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            129,278Value
      of vested portion of options issued to officer
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            54,848
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            54,848Discount
      to notes payable due to beneficial conversion feature
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            1,019,208
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            1,019,208Loss
      for the year ended December 31, 2008
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (5,989,872)
                            
                            
                            
                            (5,989,872
                            )Balance
      as of December 31, 2008
                            
                            
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            
                            8,814,921
                            
                            
                            $
                            880
                            
                            
                            $
                            15,592,797
                            
                            
                            $
                            -
                            
                            
                            $
                            (19,337,999)
                            
                            
                            $
                            (3,744,322
                            )Value
      of vested portion of 100,000 options issued to officer
      (unaudited)
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            10,401
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            10,401Loss
      for the three months ended March 31, 2009 (unaudited)
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (378,429
                            )
                            
                            
                            (378,429
                            )Balance
      as of March 31, 2009 (unaudited)
                            
                            
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            
                            8,814,921
                            
                            
                            $
                            880
                            
                            
                            $
                            15,603,198
                            
                            
                            $
                            -
                            
                            
                            $
                            (19,716,428
                            )
                            
                            $
                            (4,112,350
                            )




See
notes to consolidated financial statements.


17
 Table of Contents


OMNIMMUNE HOLDINGS, INC.


(A
DEVELOPMENT STAGE ENTERPRISE)


CONSOLIDATED
STATEMENTS OF CASH FLOWS


(Unaudited)




For
      the Three Months Ended
                            March
      31,
                            2009
                          
                          
                          For
      the Three Months Ended
                            March
      31,
                            2008
                          
                          
                          Cumulative
                            from
      Inception
                            (January
      15, 1997) to March 31, 2009Cash
      flows from operating activities:Net
      loss
                          
                          $
                          (378,429
                          )
                          
                          $
                          (1,460,253
                          )
                          
                          $
                          (19,716,428
                          )Adjustments
      to reconcile net loss to netcash
      used in operating activities:Non-cash
      compensation
                          
                          
                          10,401
                          
                          
                          
                          -
                          
                          
                          
                          4,016,911Amortization
      of discount on notes payable
                          
                          
                          3,2318
                          
                          
                          
                          6,476,682
                          
                          
                          
                          8,745,650Impairment
      of technology licenses and equity securities
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          1,701,936Gain
      on restructuring of debt
                          
                          
                          -
                          
                          
                          
                          (5,677,726
                          )
                          
                          
                          (5,577,000
                          )Redemption
      of shares previously issued for license agreement
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (842,513
                          )Net
      change in operating assets and liabilities:Advances
      to related party
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (10,000
                          )Accounts
      payable and accrued liabilities
                          
                          
                          307,130
                          
                          
                          
                          358,906
                          
                          
                          
                          7,886,980Net
      cash used in operating activities
                          
                          
                          (57,667
                          )
                          
                          
                          (302,391
                          )
                          
                          
                          (3,794,464
                          )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
                          
                          
                          10,000
                          
                          
                          
                          102,000
                          
                          
                          
                          806,000Principal
      payments on cash advances
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (130,000
                          )Stock
      sold for cash, net of costs
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          1,738,271Proceeds
      from (repayments) to line of credit
                          
                          
                          (2,589
                          )
                          
                          
                          (2,320
                          )
                          
                          
                          256,571Principal
      payments on debt
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (512,993
                          )Proceeds
      from notes payable
                          
                          
                          -
                          
                          
                          
                          300,000
                          
                          
                          
                          1,644,974Net
      cash provided by financing activities
                          
                          
                          7,411
                          
                          
                          
                          399,680
                          
                          
                          
                          3,802,823Net
      increase/ (decrease) in cash and cash equivalents
                          
                          
                          (50,256
                          )
                          
                          
                          97,289
                          
                          
                          
                          2,359Cash
      and cash equivalents at beginning of period
                          
                          
                          52,615
                          
                          
                          
                          209
                          
                          
                          
                          -Cash
      and cash equivalents at end of period
                          
                          $
                          2,359
                          
                          
                          $
                          97,498
                          
                          
                          $
                          2,359




18
 Table of Contents


CONSOLIDATED
STATEMENTS OF CASH FLOWS


(continued)




For
      the Three Months Ended
                                  March
      31,
                                  2009
                                
                                
                                
                                For
      the Three Months Ended
                                  March
      31,
                                  2008
                                
                                
                                
                                Cumulative
                                  from
      Inception
                                  (January
      15, 1997) to March 31, 2009Supplemental
      disclosures of cash flow information:Cash
      paid during the period for: Interest
                                
                                $
                                3,051
                                
                                
                                $
                                4,862
                                
                                
                                $
                                67,374Income
      Taxes
                                
                                $
                                -
                                
                                
                                $
                                -
                                
                                
                                $
                                -Items
      not affecting cash flows:Beneficial
      conversion feature of notes payable
                                
                                $
                                3,238
                                
                                
                                $
                                6,476,682
                                
                                
                                $
                                14,894,478Common
      stock issued for services
                                
                                $
                                -
                                
                                
                                $
                                -
                                
                                
                                $
                                317,875Notes
      payable issued under restructure of debt
                                
                                $
                                -
                                
                                
                                $
                                -
                                
                                
                                $
                                7,284,998Value
      of warrant issued as discount on debt
                                
                                $
                                -
                                
                                
                                $
                                129,278
                                
                                
                                $
                                331,510Notes
      payable issued for accounts payable
                                
                                $
                                -
                                
                                
                                $
                                -
                                
                                
                                $
                                287,768Common
      stock issued for technology license
                                
                                $
                                -
                                
                                
                                $
                                -
                                
                                
                                $
                                751,326Common
      stock issued for the conversion of preferred stock
                                
                                $
                                -
                                
                                
                                $
                                -
                                
                                
                                $
                                355,000Notes
      payable issued for services
                                
                                $
                                -
                                
                                
                                $
                                -
                                
                                
                                $
                                3,746,971Impairment
      of technology licenses
                                
                                $
                                -
                                
                                
                                $
                                -
                                
                                
                                $
                                616,908Value
      of warrants issued for debt
                                
                                $
                                -
                                
                                
                                $
                                -
                                
                                
                                $
                                12,747Issuance
      of common stock for cash
                                
                                $
                                -
                                
                                
                                $
                                -
                                
                                
                                $
                                1,408,271Gain
      from the restructuring of debt
                                
                                $
                                -
                                
                                
                                $
                                (5,677,726
                                )
                                
                                $
                                (5,576,993
                                )Value
      of options issued for services
                                
                                $
                                10,401
                                
                                
                                $
                                -
                                
                                
                                $
                                2,877,210Common
      stock exchanged for accounts payable
                                
                                $
                                -
                                
                                
                                $
                                30,000
                                
                                
                                $
                                30,000Cash
      advance converted to notes payable
                                
                                $
                                -
                                
                                
                                $
                                -
                                
                                
                                $
                                521,200Capitalization
      of interest on debt
                                
                                $
                                -
                                
                                
                                $
                                -
                                
                                
                                $
                                33,751




See notes
to consolidated financial statements.




19
 Table of Contents


OMNIMMUNE HOLDINGS, INC.


(A
DEVELOPMENT STAGE ENTERPRISE)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS






1.
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES




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.




The
predecessor of the Company was originally incorporated on February 22, 2007, in
the State of Nevada as Roughneck Supplies, Inc. (“Roughneck”). On August 6,
2008, Roughneck merged with and into Omnimmune Holdings, Inc. On August 7, 2008,
Omnimmune Corp., a privately held Texas corporation incorporated on January 15,
1997 merged with and into Omnimmune Acquisition Corp., a Delaware corporation,
and a wholly-owned subsidiary of the Company formed for the purpose of the
merger.  As a result, (i)  Omnimmune Corp
became  a  wholly-owned subsidiary of the Company, (ii) the
shareholders of Omnimmune Corp. became the majority stockholders of the Company
and the shareholders prior to the merger were reduced to a minority ownership,
(iii) the historical management of the Company resigned, and the management of
Omnimmune Corp. became the management of the Company, (iv) the business of
Omnimmune Corp. became the business of Omnimmune and the former business of
Roughneck was eliminated, and (v) the historical financial statements of
Omnimmune Corp. became the historical financial statements of the Company.
Therefore, as a consequence of the two mergers, one on August 6, 2008 and one on
August 7, 2008, Omnimmune (formerly Roughneck) went from being a public
corporation domiciled in Nevada formerly in the business of marketing and
retailing oil and gas drilling supply products with little or no continuing
operations and a fiscal year end of May 31, to being a public company domiciled
in Delaware in the biotechnology business with a fiscal year end of December
31.  These transactions 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
$378,429 and $1,460,253 for the three months ended March 31, 2009 and 2008,
respectively; and $19,716,428 from inception (January 15, 1997) through March
31, 2009. In addition, the Company’s current liabilities exceed its current
assets by $2,548,500 as of March 31, 2009. These factors among others, including
the Company’s current cash position, which was $2,359 as of March 31, 2009, 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 funds
realized upon a debt or equity financing transaction, management believes that
the Company can meets its ongoing obligations and continue to
operate.  However, no assurance can be given that management’s actions
will result in the resolution of its liquidity problems or its eventual
emergence as a profitable company.




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 financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements, and the reported amounts of revenues and expenses
during the reported periods.  Actual results could materially differ
from those estimates.




20
 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 months ended March 31, 2009, and
2008, the Company recognized $0 impairment of long-lived
assets.  From inception to March 31, 2009 an impairment of license
agreement in the amount of $1,701,936 was recorded.




Cash and Cash
Equivalents




For the
purposes of the statement of cash flows, cash equivalents include highly liquid
debt instruments with original maturities of three months or less which are not
securing any corporate obligations.





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).  During
the three months ended March 31, 2009 and 2008, and from inception to March 31,
2009,  common stock equivalents  were
not  considered  in the  calculation  of
the weighted  average number of common shares outstanding because they
would be anti-dilutive, thereby decreasing the net loss per common
share.





At March
31, 2009, the following convertible securities were not included  in
fully-diluted loss per share because the result would have been
anti-dilutive:  Options to purchase 2,350,000 shares at $2.50 per
share; Warrants to purchase 25,265 shares at $0.10 per share, warrants to
purchase 70,180 shares at $1.78 per share, warrants to purchase 75,000 shares at
$2.50 per share, and warrants to purchase 727,200 shares at $5.00 per share;
debt convertible into 5,368,886 shares at $0.18 per share, and debt convertible
into 2,000,000 shares at $0.50 per share.





At March
31, 2008, the following convertible securities were not included  in
fully-diluted loss per share because the result would have been
anti-dilutive:  Warrants to purchase 84,216 shares at $0.10 per share,
warrants to purchase 70,180 shares at $1.78 per share, and warrants to purchase
15,000 shares at $5.00 per share; debt convertible into
5,705,776  shares at $0.18 per share, and debt convertible into
2,067,090 shares at $0.50 per share.




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 months ended March 31, 2009 and 2008, and from inception through
March 31, 2009.




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.




Comprehensive
Income




Statement
of Financial  Accounting  Standards No. 130
("SFAS  130"),  "Reporting
Comprehensive  Income,"  establishes  standards
for reporting and  displaying of
comprehensive  income,  its components and
accumulated  balances.  Comprehensive income is defined to
include all changes in equity except those  resulting  from
investments by owners and distributions to owners. Among other disclosures, SFAS
130 requires  that all items that are required to
be  recognized  under  current
accounting  standards
as  components  of  comprehensive  income
be reported in a financial  statement  that
is  displayed  with  the  same  prominence  as  other
financial  statements.  During the three months ended March
31, 2009 and 2008 there were no terms of other comprehensive
income.




21
 Table of Contents





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.





A summary
of option activity under the Plan as of March 31, 2009, and changes during the
period ended are presented below:


Options
                
                
                Weighted
      Average
                  Exercise
      PriceOutstanding
      at December 31, 2008
                
                
                2,350,000
                
                
                $
                2.50Issued
                
                
                -
                
                
                
                -Exercised
                
                
                -
                
                
                
                -Forfeited
      or expired
                
                
                -
                
                
                
                -Outstanding
      at March 31, 2009
                
                
                2,350,000
                
                
                $
                2.50Vested
      at March 31, 2009
                
                
                2,302,537
                
                
                $
                2.50Non-vested
      at March 31, 2009
                
                
                47,463
                
                
                $
                2.50




Aggregate
intrinsic value of options outstanding and exercisable at March 31, 2009 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
$0.40 as of March 31, 2009, and the exercise price multiplied by the number of
options outstanding. As of March 31, 2009, total unrecognized stock-based
compensation expense related to stock options was $58,945. The total fair value
of options vested during the three months March 31, 2009 and 2008 was $10,401
and $0, respectively.




Income
Taxes




The
Company has implemented the provisions of 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.




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.




Fair Value of Financial
Instruments




The
Company  measures its financial  assets
and  liabilities in
accordance  with  accounting  principles  generally
accepted in the United States of America.  The estimated fair values
approximate their carrying value because of the short-term maturity of
these  instruments  or the
stated  interest  rates are indicative of market interest
rates.





Reclassifications




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




22
 Table of Contents




Foreign
Currency




Aside
from one of its license agreements, which requires milestone and other payments
to be made in Euros, the Company is not involved any transactions with foreign
currency implications.





New Accounting
Pronouncements




In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities.” SFAS 159 permits entities to choose
to measure many financial instruments, and certain other items, at fair value.
SFAS 159 applies to reporting periods beginning after November 15, 2007. The
adoption of SFAS 159 is not expected to have a material impact on the Company’s
financial condition or results of operations.




2.
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES




Accounts
payable and accrued liabilities at March 31, 2009 and December 31, 2008
of  $722,738 and $471,775, respectively, consist of trade payables.
Accounts payable and accrued liabilities – related parties at March 31, 2009 and
December 31, 2008 of $360,000 and $351,748, respectively, consist of accrued
liabilities to directors for services performed.





3.
LINE OF CREDIT




The
Company has 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 the credit card
agreements  and remains jointly liable with the Company on all
outstanding amounts due for these credit card liabilities. At March 31, 2009 and
December 31, 2008, the Company had the following amounts due under its loan and
credit agreement:




March
      31, 2009
                
                
                December
      31, 2008Bank
      loan
                
                $
                149,976
                
                
                $
                149,976Credit
      cards
                
                
                106,592
                
                
                
                109,181Total
                
                $
                256,568
                
                
                $
                259,157




4.
ACCRUED INTEREST




Notes
payable and accrued interest at  March 31, 2009 and December 31, 2008
is summarized as follows:




March
      31,
                      
                      
                      December
      31,2009
                      
                      
                      2008Number
      of notes payable
                      
                      
                      16
                      
                      
                      
                      16Number
      of notes payable - related party
                      
                      
                      4
                      
                      
                      
                      5Principal
      amount - notes payable
                      
                      $
                      999,580
                      
                      
                      $
                      709,035Principal
      amount - notes payable - related party
                      
                      $
                      1,001,318
                      
                      
                      $
                      1,288,632Accrued
      interest
                      
                      $
                      186,889
                      
                      
                      $
                      192,380Accrued
      interest - related party
                      
                      $
                      477,616
                      
                      
                      $
                      424,210





Interest
expense (net) consisted of the following for the three months ended March 31,
2009 and 2008:




March
      31,2009
                        
                        
                        2008Accrued
      interest - notes payable
                        
                        $
                        46,699
                        
                        
                        $
                        18,485Accrued
      interest - notes payable – related party
                        
                        
                        1,216
                        
                        
                        
                        77,542Bank
      credit line
                        
                        
                        3,051
                        
                        
                        
                        3,353Amortization
      of discount on notes payable
                        
                        
                        3,238
                        
                        
                        
                        6,476,682Amortization
      of discount on accounts payable
                        
                        
                        -
                        
                        
                        
                        129,278Credit
      Cards
                        
                        
                        2,487
                        
                        
                        
                        2,513Interest
      (income)
                        
                        
                        (3
                        )
                        
                        
                        -Total
                        
                        $
                        56,688
                        
                        
                        $
                        6,707,853




23
 Table of Contents




5.
CASH ADVANCES


During
the three months ended March 31, 2009, the Company received $10,000 in new
non-interest bearing payable on demand, unsecured cash advances from a
shareholder.




6.
NOTES PAYABLE




At March
31, 2009, the Company had outstanding 16 notes payable in the aggregate
principal amount of $2,943,245, none  of which was in
default.




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 March 31, 2009, there are contingent 5 year
warrants issuable to purchase an aggregate of 43,000 shares  of the
Company’s common stock at a price of $5.00 per share.




The
following table summarizes amounts due under the notes payable at March 31, 2009
and December 31, 2008:




Principal
      balance:March
      31, 2009
                          
                          
                          December
      31, 2008Total
      outstanding
                          
                          $
                          2,943,245
                          
                          
                          $
                          2,943,252Less
      discount on notes payable
                          
                          
                          (942,347
                          )
                          
                          
                          (945,585
                          )Net
      Total
                          
                          
                          2,000,898
                          
                          
                          
                          1,997,667Less
      current portion
                          
                          
                          (437,046
                          )
                          
                          
                          (287,768
                          )TOTAL
                          
                          $
                          1,563,852
                          
                          
                          $
                          1,709,899




The
following table lists the notes payable at March 31, 2009 and December 31,
2008:





Principal
      balance:,March
      31, 2009
                        
                        
                        December
      31, 2008Convertible
      note payable to a related party in the amount of $2,000,000 dated June 14,
      1994. On March 3, 2007, this note was replaced with a new note in the
      amount of $3,170,188, which included accrued interest in the amount of
      $959,089, a salary payable of $106,575, and a loss of
      $104,524.  On March 1, 2008, this note was replaced with a new
      note in the amount of $500,000, the amount of $2,670,188 was forgiven by
      the note holder. The note signed on March 2, 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.  Interest in the
      amount of $0 and $37,087 was accrued on these  notes during the
      three  months ended March 31, 2009 and 2008, respectively. Total
      accrued interest at March 31, 2009 and 2008 amounted to
      $222,521.$
                        500,000
                        
                        
                        $
                        500,000Convertible
      note payable to a related party in the amount of $1,170,356 dated May 15,
      2002.  On March 3, 2007, this note was replaced with a new note
      in the amount of $1,342,127, which included accrued interest of $379,324,
      and a gain of $207,553. On March 1, 2008, this note was replaced with a
      new note in the amount of $500,000, the amount of $842,127 was forgiven by
      the debt holder. The note dated March 1, 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. Interest in the amount of $0
      and $15,701 was accrued on these notes during the three months ended March
      31, 2009 and 2008, respectively.  Total accrued interest at
      March 31, 2009 and 2008 amounted to $94,206.500,000
                        
                        
                        
                        500,000Convertible
      note payable to a related party in the amount of $25,000 dated March 10,
      2005.  On March 3, 2007, this note was replaced with a new note
      in the amount of $30,211, which includes accrued interest of $4,938 and a
      loss of $272.  On March 31, 2008, this note was replaced with a
      new note, which includes accrued interest of $3,021. The note bears
      interest at the rate of 10% per annum, and was due in full on February 28,
      2013.  This note is convertible into common stock of the Company
      at a conversion price of $0.1781 per share. A beneficial conversion
      feature in the amount of $33,232 was recorded as a discount to the note
      and is being amortized over the term of the note via the effective
      interest rate method at a rate of 8.3%. Interest in the amount of $819 and
      $779 was accrued on this note during the three months ended March 31, 2009
      and 2008, respectively. Total accrued interest at March 31, 2009 and 2008
      amounted to $3,605 and $282, respectively.33,232
                        
                        
                        
                        33,232
  24
 Table of Contents
  Principal
      balance:March
      31, 2009
                                          
                                          
                                          
                                          December
      31, 2008Convertible
      note payable to a related party in the amount of $37,000 dated February
      26, 2005.  On March 3, 2007, this note was replaced with a new
      note in the amount of $44,848, which included accrued interest of $6,418,
      and loss of $1,430. On March 1, 2008, this note was replaced with a new
      note, which includes accrued interest of $4,485.  The note bears
      interest at the rate of 10% per annum, and is due in full on February 1,
      2013. This note is convertible into common stock of the Company at a
      conversion price of $1.78 per share. A beneficial conversion feature in
      the amount of $49,333 was recorded as a discount to the note, and is being
      amortized over the term of the note via the effective interest rate method
      at a rate of 8% Interest in the amount of $1,216 and $1,156 was accrued on
      this note during the three months ended March 31, 2009 and 2008,
      respectively.  Total accrued interest at March 31, 2009 and 2008
      amounted to $5,352 and $419, respectively.49,333
                                          
                                          
                                          
                                          49,333Note
      payable in the amount of $8,110 dated December 31, 1997.  On
      March 3, 2007, this note was replaced with a new note in the amount of
      $19,442, which included accrued interest of $7,437, and loss of $3,895.
      The note bears interest at the rate of 10% per annum, and is due in full
      on February 28, 2010.  Interest in the amount of $479 and $485
      was accrued on this note during the three months ended March 31, 2009 and
      2008, respectively.  Total accrued interest at March 31, 2009
      and 2008  amounted to $4,054 and $2,109, respectively. During
      the period ended December 31, 2008, the Company exercised its right to
      extend the maturity date until February 28, 2010.19,442
                                          
                                          
                                          
                                          19,442Note
      payable in the amount of $11,932 dated December 31, 1999.  On
      March 3, 2007, this note was replaced with a new note in the amount of
      $23,641, which included accrued interest of $8,168, and a loss of $3,540.
      The note bears interest at the rate of 10% per annum, and is due in full
      on February 28, 2010.  Interest in the amount of $583 and $589
      was accrued on this note during the three months ended March 31, 2009 and
      2008.  Total accrued interest at March 31, 2009 and
      2008  amounted to $4,929 and $2,565, respectively. During the
      period ended December 31, 2008, the Company exercised its right to extend
      the maturity date until February 28, 2010.23,641
                                          
                                          
                                          
                                          23,641Note
      payable in the amount of $33,860 dated December 31, 2000.  On
      March 3, 2007, this note was replaced with a new note in the amount of
      $60,971, which included accrued interest of $20,882, and a loss of $6,228.
      The note bears interest at the rate of 10% per annum, and is due in full
      on February 28, 2010.  Interest in the amount of $1,503 and
      $1,520 was accrued on this note during the three months ended March 31,
      2009 and 2008. Total accrued interest at March 31, 2009 and
      2008  amounted to $12,712 and $6,615,
      respectively.  During the period ended December 31, 2008, the
      Company exercised its right to extend the maturity date until February 28,
      2010.60,971
                                          
                                          
                                          
                                          60,971Note
      payable in the amount of $25,000 dated February 28, 2001. On March 3,
      2007, this note was replaced with a new not in the amount of $44,355,
      which included accrued interest in the amount of $15,014, and a loss of
      $4,341. On March 1, 2008, this note was replaced with a new note in
      the amount of $127,305, which consolidated two other notes payable to this
      note holder in the amounts of $41,774, and $28,603, and accrued interest
      of $11,573.The note bears interest at the rate of 10% per annum, and is
      due in full on February 28, 2013. This note is convertible into
      shares  of common stock at a rate of $1.78 per
      share.  A beneficial conversion in the amount of $127,305 was
      recorded for this note and is being amortized over the term of the note
      via the effective interest rate method at a rate of 8.2%. Interest in
      the amount of $3,139 and $1,810 was accrued on this note during the three
      months ended March 31, 2009 and 2008. Total accrued interest at March 31,
      2009 and 2008 amounted to $13,812 and $1,081,
respectively.127,305
                                          
                                          
                                          
                                          127,305Note
      payable in the amount of $16,750 dated June 1, 2002.  On March
      3, 2007, this note was replaced with a new note in the amount of $45,224,
      which included accrued interest in the amount of $14,275, and a loss of
      $3,322. The note bears interest at the rate of 10% per annum, and is due
      in full on February 28, 2010.  Interest in the amount of $1,115
      and $1,128 was accrued on this note during the three months ended
      March 31, 2009 and 2008. Total accrued interest at March 31, 2009 and
      2008  amounted to $9,429 and $4,906, respectively. During the
      period ended December 31, 2008, the Company exercised its right to extend
      the maturity date until February 28, 2010.45,224
                                          
                                          
                                          
                                          45,224Note
      payable in the amount of $18,000 dated June 1, 2002.  On March
      3, 2007, this note was replaced wit ha new note in the amount of $28,350,
      which included accrued interest in the amount of $8,551, and a loss of
      $1,798. On March 1, 2008, a new note replaced with a new note in the
      amount of $31,185, which includes accrued interest in the amount of
      $2,835. The note bears interest at the rate of 10% per annum, and is due
      in full on February 28, 2013. This note is convertible into
      shares  of common stock at a rate of $1.78 per
      shares.  A beneficial conversion feature in the amount of
      $31,285 was recorded for this note and is being amortized over the term of
      the note via the effective interest rate method at a rate of 8.3%.
      Interest in the amount of $769 and $734 was accrued on this note during
      the three months ended March 31, 2009 and 2008. Total accrued
      interest at March 31, 2009 and 2008 amounted to $3,383 and $265,
      respectively.31,185
                                          
                                          
                                          
                                          31,185
  25
 Table of Contents
  Principal
      balance:March
      31, 2009
                                                          
                                                          
                                                          
                                                          December
      31, 2008Note
      payable in the amount of $62,019 dated July 1, 2005. On January 1, 2007,
      this note was replaced with a new note in the amount of $94,334, which
      included accrued interest of $9,328, and a loss of 422,987. On March 1,
      2008, a new note replaced this note in the amount of $91,149, which
      includes accrued interest in the amount of $2,221. The note bears interest
      at the rate of 10% per annum, and is due in full on February 28,
      2013.  This note is convertible into shares  of common
      stock at a price of $1.78 per share.  A beneficial conversion
      feature was recorded in the amount of $91,149 on the note. Interest in the
      amount of $2,173 and $2,183 was accrued on this note during the three
      months ended March 31, 2009 and 2008. Total accrued interest at March 31,
      2009 and 2008 amounted to $8,812 and $0, respectively.88,132
                                                          
                                                          
                                                          
                                                          88,139Note
      payable in the amount of $25,000 dated October 6, 2005.  On
      March 3, 2007, this note was replaced with a new note in the amount of
      $28,603, which included interest in the amount of $3,500, and a loss of
      $103. On March 1, 2008, this note was consolidated into a new note, shown
      above. Interest in the amount of $716 and $680 was accrued on this note
      during the three months ended March 31, 2009 and 2008. Total accrued
      interest at March 31, 2009 and 2008 amounted to $3,184 and $246,
      respectively.29,025
                                                          
                                                          
                                                          
                                                          29,025Note
      payable in the amount of $69,806 dated March 3, 2007. On March 1, 2008,
      this note was replaced with a new note in the amount of $76,787, which
      included accrued interest in the amount of $6,981. The note bears interest
      at a rate of 10% per annum, and is due in full on February 28,
      2013.  This note is convertible into shares (post shares) of
      common stock at a rate of $1.78 per share.  A beneficial
      conversion feature in the amount of $76,787 was recorded on the note and
      is being amortized over the term of the note via the effective interest
      rate method at a rate of 8.3%. Interest in the amount of $1,893 and $1,740
      was accrued on this note during the three months ended March 31, 2009 and
      2008.  Total accrued interest at March 31, 2009 and 2008
      amounted to $8,272 and $593, respectively.76,787
                                                          
                                                          
                                                          
                                                          76,787Note
      payable  in the amount of $550,000 dated June 24,
      2008.  The note bears interest at a rate of 10% per annum, and
      is due in full on June 24, 2010.  This note becomes convertible
      into shares  of common stock upon the closing of a qualified
      financing.  Interest in the amount of $13,562 and $0 was accrued
      during the three months ended March 31, 2009 and 2008.  Total
      accrued interest at March 31, 2009 and 2008 amounted to $42,192 and $0,
      respectively.550,000
                                                          
                                                          
                                                          
                                                          550,000Note
      payable in the amount of $521,200 dated March 1, 2008. The note bears
      interest at a rate of 10% per annum, and is due in full on February 28,
      2013. This note is convertible into common stock at a rate of $1.78 per
      share.  A beneficial conversion feature in the amount of
      $521,200 was recorded and is being amortized over the term of the note via
      the effective interest rate method at a rate of 8.3%.  Interest
      in the amount of $12,852 and $4,777 was accrued on this note during the
      three months ended March 31, 2009 and 2008.  Total accrued
      interest at March 31, 2009 and 2008 amounted to $59,724 and $4,777,
      respectively.521,200
                                                          
                                                          
                                                          
                                                          521,200Note
      payable in the amount of $287,768 dated October 31, 2008.  The
      note bears interest at a rate of 10% per annum, and is due in full on June
      30, 2009.  Interest in the amount of $7,096 and $0 was accrued
      on this note during the three months ended March 31, 2009 and
      2008.  Total accrued interest at March 31, 2009 and 2008
      amounted to $11,905 and $0, respectively.287,768
                                                          
                                                          
                                                          
                                                          287,768




Total
      outstanding
                          
                          $
                          2,943,245
                          
                          
                          $
                          2,943,252Less
      discount on notes payable
                          
                          
                          (942,347
                          )
                          
                          
                          (945,585
                          )Total
      – net of discounts
                          
                          
                          2,000,898
                          
                          
                          
                          1,997,667Less
      current portion – net of discounts
                          
                          
                          (437,046
                          )
                          
                          
                          (287,768
                          )Long-term
      portion – net of discounts
                          
                          $
                          1,563,852
                          
                          
                          $
                          1,709,899Related
      Party
                          
                          
                          1,001,318
                          
                          
                          
                          1,288,632Related
      Party – current portion
                          
                          
                          -
                          
                          
                          
                          287,768Related
      Party – long term portion
                          
                          $
                          1,001,318
                          
                          
                          $
                          1,000,864Non-related
      party
                          
                          $
                          999,580
                          
                          
                          $
                          709,035Non-related
      party – current portion
                          
                          
                          437,046
                          
                          
                          
                          -Non-related
      party – long term portion
                          
                          $
                          562,534
                          
                          
                          $
                          709,035




26
 Table of Contents




7.
EQUITY




On July
8, 2008, the Company filed an amendment to its certificate of incorporation in
the State of Delaware amending the number of authorized shares from 300,000,000
to 50,000,000 and the par value from $0.01 to $0.0001. At December 31, 2008
and December 31, 2007, the Company had issued and outstanding 8,814,921 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.




Warrants





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 March
31, 2009:




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
              
              25,265
              
              0.29
              
              $
              0.10
              
              25,265
              
              0.291.78-2.50
              
              145,180
              
              6.67
              
              
              1.78-2.50
              
              145,180
              
              6.675.00
              
              727,200
              
              4.36
              
              
              5.00
              
              727,200
              
              4.36Total
              
              897,645
              
              4.62
              
              
              
              
              897,645
              
              4.62




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, 2008:





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
              
              84,215
              
              0.21
              
              $
              0.10
              
              84,215
              
              0.211.78-2.50
              
              145,180
              
              6.92
              
              
              1.78-2.50
              
              145,180
              
              6.925.00
              
              727,200
              
              4.61
              
              
              5.00
              
              727,200
              
              4.61Total
              
              956,595
              
              4.57
              
              
              
              
              956,595
              
              4.57




Transactions
involving warrants are summarized as follows:




Number
      of Shares
                  
                  
                  Weighted
      Average
                    Price
      Per ShareOutstanding
      at December 31, 2008
                  
                  
                  956,596
                  
                  
                  $
                  4.14Granted
                  
                  
                  -
                  
                  
                  
                  -Exercised
                  
                  
                  -
                  
                  
                  
                  -Cancelled
      or expired
                  
                  
                  (58,951
                  )
                  
                  
                  0.10Outstanding
      at March 31, 2009
                  
                  
                  897,645
                  
                  
                  $
                  4.40




27
 Table of Contents




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 year ended December 31, 2008, the Company issued unvested 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 March 31, 2009, the
Company charged to operations the fair value of the vested options, or
$10,401.




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 March
31, 2009:




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
                  
                  9.02
                  
                  $
                  2.50
                  
                  2,302,537
                  
                  9.02Total
                  
                  
                  
                  2,350,000
                  
                  9.02
                  
                  
                  
                  
                  2,302,537
                  
                  9.02





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
December 31, 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
                
                9.27
                
                $
                2.50
                
                2,285,791
                
                9.27Total
                
                
                
                2,350,000
                
                9.27
                
                
                
                
                2,285,791
                
                9.27





Transactions
involving warrants are summarized as follows:




Number
      of Shares
                
                
                Weighted
      Average
                  Price
      Per ShareOutstanding
      at December 31, 2008
                
                
                2,350,000
                
                
                $
                2.50Granted
                
                
                -
                
                
                
                -Exercised
                
                
                -
                
                
                
                -Cancelled
      or expired
                
                
                -
                
                
                
                -Outstanding
      at March 31, 2009
                
                
                2,350,000
                
                
                $
                2.50Exercisable
      at March 31, 2009
                
                
                2,302,537
                
                
                $
                2.50Not
      exercisable at March 31, 2009
                
                
                47,463
                
                
                $
                2.50




28
 Table of Contents




8.
RELATED PARTIES




Amounts
due to related parties at March 31, 2009 consisted of the
following:




Convertible Notes Payable to
related parties




The
Company has a note payable outstanding to its Chief Executive Officer, in the
amount of $500,000 at March 31, 2009 and December 31, 2008. The note 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 three months ended March 31, 2009 and
2008, the Company accrued no interest on these notes.




The
Company has a convertible note payable outstanding to Dennis Lichtenstein, a
relative of the Chief Executive Officer, in the amount of $49,333 at March 31,
2009 and December 31, 2008. The note bears interest at a rate of 10% per annum.
During the three months ended March 31, 2009 and 2008, the Company accrued
interest in the amount of $1,216 and $1,156, respectively. beneficial conversion
feature in the amount of $49,333 was recorded as a discount to the note, and is
being amortized over the term of the note via the effective interest rate method
at a rate of 8%.  As of March 31, 2009 a discount in the amount of
$48,545 remained on this note.




The
Company has a note payable outstanding to Alexander Krichevsky, an officer of
the Company, in the amount of $500,000 at March 31, 2009 and December 31, 2008.
The note 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 three months
ended March 31, 2009 and 2008, the Company accrued no interest on these
notes.




The
Company has a note payable outstanding to Jennie Fay Lichtenstein, a relative of
the Chief Executive Officer, in the amount of $33,232 at March 31, 2009 and
December 31, 2008. This note bears interest at a rate of 10% per annum. During
the three months ended March 31, 2009 and 2008, the Company accrued interest in
the amount of $819 and $779, respectively. . A beneficial conversion feature in
the amount of $33,232 was recorded as a discount to the note and is being
amortized over the term of the note via the effective interest rate method at a
rate of 8.3%.  As of March 31, 2009, a discount in the amount of
$32,702 remained on this note.





Accounts Payable- related
parties




The
Company had a liability with a director for consulting fees payable in the
amount of $360,000 at March 31, 2009.





9.
COMMITMENTS AND CONTINGENCIES




Lease of office
space




The
Company leases office space in Houston, Texas under a month to month lease
calling for annual rent of $8,400 per year.




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 ASRI 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.   Thereafter, ASRI agreed to further
extend from February 1, 2009 to August 1, 2009, the license fee of
$50,000.  As of March 31, 2009, the Company has paid
$50,000  in licensing fees under this agreement.   The
Company is current in its obligations under the ASRI License Agreement, as
extended.




29
 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 year ended December 31, 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. Also during the year ended
December 31, 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





Columbia
and the Company recently agreed to a further amendment to the Columbia License
Agreement, pursuant to which the $52,500 license maintenance fee due on May 1,
2009 was split into two equal payments of $26,250, the first of which continued
to be due on May 1, 2009, and the second of which was extended to August
1,2009.    The Company has not made the required payment
of  $26,250 that was due on May 1, 2009, nor has it received a formal
extension from Columbia with respect thereto.  However, Columbia has
not, as of the date of this report, declared a default under the Columbia
License Agreement, after which we would have a contractual period in which to
make such payment and cure the default before the Columbia License Agreement
could be terminated.




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 paid $36,087 (approximately
€25,000).




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 agreed to modify the
payment schedule described above, so that the €10,000 would continue to be due
as originally scheduled (subject to issuance of an invoice by IGR), and the
license fee €50,000 otherwise due on November 1, 2008, became payable in two
equal installments of €25,000 on March 1, 2009 and June 1, 2009, respectively.
 The€10,000  license
fee was timely paid on December 1, 2008.





Thereafter,
IGR agreed to split the €25,000 payment that would otherwise have been due on
March 1, 2009, into two payments, the first of which was in the amount of
€15,000 and continued to be due in March 2009.  The second payment
of  €10,000 became due no later than June 2009.  The Company
paid to IGR  €12,000 of the  €15,000 that was due in March,
and expects to pay the balance of €3,000 in the near term.  Upon such
payment, the Company will be current with IGR under the IGR License
Agreement.  However, the Company has no formal agreement with IGR to
extend the €3,000 payment, nor does it have currently available funds with which
to pay the forthcoming payment of €25,000 due in June 2009.  However,
IGR has not, as of the date of this report, declared a default under the IGR
License Agreement, after which we would have a contractual period in which to
make such payment and cure the default before the IGR License Agreement could be
terminated.




30
 Table of Contents




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 was 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
March 31, 2009, the Company has paid $300,000 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 agreed that  $10,000 was due in
November 2008, which payment was timely made, $40,000 was due on March 1, 2009
and the balance of $50,000 would be due on June 30, 2009.  In
addition, the $50,000 license fee that would have been due on June 30, 2009 was
extended until September 30, 2009.   Interest shall accrue on all
payments not made according to the original schedule.  The Company
failed to make the payment to OSU of the $40,000 license fee that was due on
March 1, 2009.  However, OSU has not, as of the date of this report,
declared a default under the OSU License Agreement, after which we would have a
contractual period in which to make such payment and cure the default before the
OSU License Agreement could be terminated.




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.






31
 Table of Contents





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.
  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.
 
 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, and
in the 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.





The
predecessor of the Company was originally incorporated on February 22, 2007, in
the state of Nevada as Roughneck Supplies, Inc. (“Roughneck”).  On
August 6, 2008, Roughneck merged with and into Omnimmune Holdings, Inc. which
resulted in (i) Roughneck changing its domicile from Nevada to Delaware, (ii)
Roughneck changing its name from “Roughneck Supplies, Inc.” to “Omnimmune
Holdings, Inc.”, (iii) Roughneck changing its fiscal year end from May 31 to
December 31 and (iv) Roughneck’s shareholders becoming the stockholders of the
Company.




On August
7, 2008, Omnimmune Corp., a privately-held Texas corporation, merged with and
into Omnimmune Acquisition Corp., a Delaware corporation, and a wholly-owned
subsidiary of the Company formed for the purpose of the merger.  As a
result, (i) Omnimmune Corp. became a wholly-owned subsidiary of the Company,
(ii) the shareholders of Omnimmune Corp. became the majority stockholders of the
Company and the shareholders prior to the merger were reduced to a minority
ownership, (iii) the historical management of the Company resigned, and the
management of Omnimmune Corp. became the management of the Company, (iv) the
business of Omnimmune Corp. became the business of Omnimmune and the former
business of Roughneck was eliminated, and (v) the historical financial
statements of Omnimmune Corp. became the historical financial statements of the
Company.  Therefore, as a consequence of two mergers, one on August 6,
2008, and one on August 7, 2008, Omnimmune (formerly Roughneck) went from being
a public corporation domiciled in Nevada formerly in the business of marketing
and retailing oil and gas drilling supply products with little or no continuing
operations and a fiscal year end of May 31, to being a public company domiciled
in Delaware in the biotechnology business with a fiscal year end of December
31.  These transactions 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.




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 $378,429 and $1,460,253 for the three months ended
March 31, 2009 and 2008, respectively, and as of March 31, 2009, we had an
accumulated deficit of $19,716,428.




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 or 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 our ability to continue as a going concern. The
financial statements do not include any adjustments that may result from the
outcome of this uncertainty. In order to alleviate our working capital
deficiency and address our continued financing concerns, management intends to
take affirmative steps towards identifying sources of capital that will be
sufficient to fund our operations until such time as we are cash flow
positive.







32
 Table of Contents


Three
Months Ended March 31, 2009 and March 31, 2008
  Revenue
 
 As a
development stage pharmaceutical company, we produce no revenues and do not
expect to produce any revenues for the foreseeable
future.
 
 Costs and
Expenses
 
 Our
selling, general and administrative expenses decreased approximately 25% to
$321,741  in the three months ended March 31, 2009, from $430,126 in
the same period in 2008.  For the three months ended March 31, 2008,
selling, general, and administrative expenses increased primarily due to payroll
and employee benefits of $134,750; license fees of $72,496; consulting fee of
$62,850; legal and accounting fees of $30,921; non cash compensation of $10,399;
and office rent expense of $2,320. The decrease in the selling, general and
administrative expenses was the result of a reduction in legal fees, due to the
completion of the reverse merger and the financings in the prior
period.




Net Loss





For the
reasons stated above, our net loss for the three months ending March 31, 2009
was $378,429 , compared to a net loss for the three months ending March 31, 2008
of $1,460,253.  For the period since inception January 15, 1997
through March 31, 2009, our accumulated net loss is $19,716,428.





These  losses,
in addition to a lack of continuing operations, raises substantial doubt about
our ability to continue as a going concern.  Also, as of May 19, 2009,
we had less than $5,000 of cash on hand.   Accordingly, absent an
immediate infusion of new capital, we will be unable to meet our ongoing
obligations on a timely basis.  Since we do not expect to generate
significant revenues in the foreseeable future, we, in order to fund future
operations, will be completely dependent on additional debt and equity financing
arrangements to fund future operations.





Liquidity
and Capital Resources




At March
31, 2009, we had a cash balance of $2,359 and less than $5,000 as of May 19,
2009.  In the absence of substantial and immediate new funding, we
will not have sufficient cash to fund our ongoing payment obligations to our
employees, consultants, licensors, or other creditors. We have financed
ourselves primarily through cash on hand and through loans from shareholders and
investors in our bridge financings and private placement offerings. Subsequent
activities have reduced the Company’s cash to less than $5,000.




Net cash
flow used in operating activities was $57,667 for the three months ended March
31, 2009, compared to net cash flow used in operating activities of $302,391 for
the same period in 2008. From inception through March 31, 2009, cash flows used
in operating activities were $3,794,464.




Net cash
provided by financing activities was $7,411 for the three months ended March 31,
2009, compared to $399,680  for  the same period in
2008.   From inception through March 31, 2009, we have generated
$3,802,823 in cash from financing activities.  We have financed our
operations primarily through loans from shareholders and investors in our bridge
financings and private placement equity offerings.




Management
is seeking to raise additional money through private debt and equity offerings
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.




There is
no assurance that we will obtain financing sufficient to pay ongoing obligations
or to fund our working capital and other cash requirements.  No
assurance can be given that any such additional funding will be available or
that, if available, can be obtained on terms favorable to us.  If we
are unable to raise needed funds on acceptable terms, we will not be able to
develop or enhance our products, take advantage of future opportunities or
respond to competitive pressures or unanticipated requirements.  A material
shortage of capital will require us to take drastic steps such as reducing our
levels of operations, disposing of selected assets, curtailing our development
efforts or seeking an acquisition partner.  If cash is insufficient,
we may  not be able to continue operations.




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Off-Balance
Sheet Arrangements
  We have
not entered into any transactions with unconsolidated entities in which we have
financial guarantees, subordinated retained interests, derivative instruments or
other contingent arrangements that expose us to material continuing risks,
contingent liabilities or any other obligations under a variable interest in an
unconsolidated entity that provides us with financing, liquidity, market risk or
credit risk support.
 
 Critical
Accounting Policies
  The
preparation of our consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires us to
make estimates and judgments that affect our reported assets, liabilities,
revenues, and expenses, and the disclosure of contingent assets and
liabilities.
 
 We base
our estimates and judgments on historical experience and on various other
assumptions we believe to be reasonable under the circumstances. Future events,
however, may differ markedly from our current expectations and assumptions.
While there are a number of significant accounting policies affecting our
consolidated financial statements; we believe the following critical accounting
policy involves the most complex, difficult and subjective estimates and
judgments:




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.





A summary
of option activity under the Plan as of March 31, 2009, and changes during the
period ended are presented below:




Number
      of Shares
                
                
                Weighted
      Average
                  Price
      Per ShareOutstanding
      at December 31, 2008
                
                
                2,350,000
                
                
                $
                2.50Granted
                
                
                -
                
                
                
                -Exercised
                
                
                -
                
                
                
                -Cancelled
      or expired
                
                
                -
                
                
                
                -Outstanding
      at March 31, 2009
                
                
                2,350,000
                
                
                $
                2.50Exercisable
      at March 31, 2009
                
                
                2,302,537
                
                
                $
                2.50Not
      exercisable at March 31, 2009
                
                
                47,463
                
                
                $
                2.50





Aggregate
intrinsic value of options outstanding and exercisable at March 31, 2009 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
$0.40 as of March 31, 2009, and the exercise price multiplied by the number of
options outstanding. As of March 31, 2009, total unrecognized stock-based
compensation expense related to stock options was $58,945. The total fair value
of options vested during the three months March 31, 2009 and 2008 was $10,401
and $0, respectively.




Revenue
Recognition.   Our policy is to recognize revenue over the
period that we perform required activities under the terms of various
agreements.  Revenue from transactions that do not require future
performance obligations from us is recognized as contemplated in the agreements,
typically upon acceptance and when collectability is reasonably
assured.  Revenue resulting from the achievement of milestone events
stipulated in the agreements will be recognized when the milestone is
achieved.





Research and Development.
Research and development expenditures, including direct and allocated overhead
expenses, are charged to expense as incurred.





Royalties.  We are
required to remit royalty payments based on product sales to certain parties
under our license agreements.  From time to time we have been in
default under certain of our material license agreements with respect to our
payment obligations and achievement of performance milestones; however, such
license agreements are currently in good standing.





Long-Lived
Assets.  Equipment is stated at acquired cost less accumulated
depreciation.  Laboratory and office equipment are depreciated on the
straight-line basis over the estimated useful lives (three to seven
years).





Impairment
of long-lived assets is recognized when events or changes in circumstances
indicate that the carrying amount of the asset or related group of assets may
not be recoverable.  If the expected future undiscounted cash flows
are less than the carrying amount of the asset, an impairment loss is recognized
at that time.  Measurement of impairment may be based upon appraisal,
market value of similar assets or discounted cash flows.





Patent Costs and
Rights.  Patent costs and rights are expensed as
incurred.





Income Taxes.  As
of March  31, 2009, we had aggregate unused net operating loss
carryforwards of approximately $14,500,000.  These carryforwards may be
used to reduce future tax liabilities and expire at various dates through
2027.  Our use of current net operating loss carryforwards may be
substantially limited as a result of the change in ownership related to the
Merger and the Offering.




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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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.




ITEM 3.
            QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK




Not
applicable.




ITEM 4.
            CONTROLS AND
PROCEDURES




As of
March 31, 2009, we carried out an evaluation of the effectiveness of the design
and operation of our disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)).  This evaluation was carried out
under the supervision and with the participation of our Chief Executive Officer
and our Chief Financial Officer, Dr. Harris Lichtenstein. Based upon that
evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that, as of March 31, 2009 and December 31, 2008, our disclosure controls and
procedures are effective to ensure that information required to be disclosed by
us in reports that we file or submit under the Exchange Act is accumulated,
recorded, processed, summarized for management and reported within the time
periods specified in the rules and forms of the SEC.




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Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed in our reports filed or
submitted under the Exchange Act are recorded, processed, summarized and
reported, within the time periods specified in the SEC's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in our
reports filed under the Exchange Act is accumulated and communicated to
management, including our Chief Executive Officer and Chief Financial Officer,
to allow timely decisions regarding required disclosure.





Our
management does not expect that our disclosure controls and procedures or our
internal control over financial reporting will necessarily prevent all fraud and
material error. Our disclosure controls and procedures are designed to provide
reasonable assurance of achieving our objectives and our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and
procedures are effective at that reasonable assurance level.  Further,
the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within the Company have been detected. These inherent
limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
internal control. The design of any system of controls also is based in part
upon certain assumptions about the likelihood of future events, and there can be
no assurance that any design will succeed in achieving its stated goals under
all potential future conditions. Over time, control may become inadequate
because of changes in conditions, or the degree of compliance with the policies
or procedures may deteriorate.





Changes
in Internal Controls





There
have been no changes in our internal controls over financial reporting
identified in the evaluation that occurred during our first quarter of fiscal
year 2009 that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.




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




An investment in our common stock
involves a high degree of risk.  You should carefully consider the
risks and uncertainties described below and all other information contained in
this report before deciding to invest in shares of  our common
stock.  While all risks and uncertainties that we believe to be
material to our business and, therefore, the value of our common stock are
described below, it is possible that other risks and uncertainties that affect
our business will arise or become material in the future.  If we are
unable to effectively address these risks and uncertainties, our business,
financial condition or results of operations could be materially and adversely
affected.  In this event, the value of the common stock could decline
and you could lose all or a portion of your
investment.





Our
auditors have substantial doubts as to our ability to continue as a going
concern.




The
auditor’s report on our financial statements for the year ended December 31,
2008 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
March 31, 2009, we had cash and cash equivalents of approximately $2,359, and
that balance is less than $5,000 as of the date of this report.  The
Company has been unable to meet certain of its ongoing obligations, including
payments due to consultants, noteholders, licensors and other
creditors.   Absent immediate additional infusions of capital,
the Company does not have sufficient liquidity to meet its ongoing obligations
on a timely basis, and must resort to consensual extensions and hope that
creditors will refrain from pursuing default remedies with respect to delinquent
obligations of the Company.  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.




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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.





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, results of operations and prospects and our business
could fail.




We
are or soon may 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.





Given our
significant cash flow limitations and our inability to raise additional capital,
we have had difficulties making required milestone and other payments under
certain of our license agreements, and we are delinquent with respect to certain
of such payments, including OSU ($40,000 due March 2009) and IGR (€3000 due
March 2009) and we are at significant risk of additional delinquencies with
respect to forthcoming payments due under our license agreements.  Although
none of our licensors has declared a default under its respective license
agreement, there is  no certainty that such licensors will continue to
refrain from calling a default under its license agreement or that we will have
sufficient available funds with which to make such payment within the cure
period if a default were called.  If a default is called and we do not
timely cure, the affected license agreement could be terminated.




There is
also no assurance that we will be able to remain current in the payment of our
license fees 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.





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 OSU
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.





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.




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ITEM 6.
            EXHIBITS




EXHIBIT NO.
                
                NAME OF EXHIBIT2.1
                
                Agreement
      of Merger, dated as of August 6, 2008, by and between Roughneck Supplies,
      Inc. and Omnimmune Holdings, Inc. (incorporated by reference to Exhibit
      2.1 to our Current Report on Form 8-K filed on August 12,
      2008).2.2
                
                Agreement
      of Merger and Plan of Reorganization, dated as of August 7, 2008, by and
      among the Omnimmune Holdings, Inc., Omnimmune Acquisition Corp., a wholly
      owned subsidiary of the Company, and Omnimmune Corp. (incorporated by
      reference to Exhibit 2.2 to our Current Report on Form 8-K filed on August
      12, 2008).2.3
                
                Certificate
      of Merger, effective August 6, 2008, merging Roughneck Supplies, Inc. with
      and into Omnimmune Holdings, Inc. (incorporated by reference to Exhibit
      2.3 to our Current Report on Form 8-K filed on August 12,
      2008).2.4
                
                Articles
      of Merger, effective August 7, 2008, merging Omnimmune Corp. with and into
      Omnimmune Acquisition Corp. (incorporated by reference to Exhibit 2.4 to
      our Current Report on Form 8-K filed on August 12,
  2008).4.1
                
                Second Amended and Restated Convertible Demand
      Promissory Note10.1
                
                Registration
      Rights Agreement, dated as of August 7, 2008, by and among Omnimmune
      Holdings, Inc. and the stockholders of Omnimmune Holdings, Inc. parties
      thereto (incorporated by reference to Exhibit 10.15 to our Current Report
      on Form 8-K filed on August 12, 2008).10.2
                
                Form
      of Lock-Up Agreement between the Company and executive officers and
      certain stockholders (incorporated by reference to Exhibit 10.18 to our
      Current Report on Form 8-K filed on August 12, 2008).10.3
                
                Amendment
      and Pledge dated July 31, 2008, to Gift Agreement entered into as of April
      18, 2008, by and among The Ohio State University Medical Center, The Ohio
      State University Foundation and Omnimmune Corp. (incorporated by reference
      to Exhibit 10.23 to our Current Report on Form 8-K filed on August 12,
      2008).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:
      May 20, 2009
              
              /s/ HARRIS A.
      LICHTENSTEINHarris
      A. LichtensteinChief
      Executive Officer




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