##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period Ended September 30, 2010
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number:000-52530
 Omni Bio Pharmaceutical, Inc.
  Colorado
    
    20-8097969(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 5350 South Roslyn, Suite 430, Greenwood Village, CO 80111
 (303) 867-3415
 þ o
 Yes o
No o
  Large accelerated filer o

Accelerated filer þ

Non-accelerated filer o(Do not check if a smaller reporting company)

Smaller Reporting Company o
 o þ




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##### 



OMNI BIO PHARMACEUTICAL, INC. & SUBSIDIARY
TABLE OF CONTENTS
 PagePART I: FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated Balance Sheets  September 30, 2010 and March 31, 2010 (unaudited)
    
    
    2Consolidated Statements of Operations  For the three months ended September 30, 2010
and 2009 (unaudited)
    
    
    3Consolidated Statements of Operations  For the six months ended September 30, 2010
and 2009, and February 28, 2006 (Inception) through September 30, 2010 (unaudited)
    
    
    4Consolidated Statements of Stockholders Equity  As of and for the six
months ended September 30, 2010 (unaudited)
    
    
    5Consolidated Statements of Cash Flows  For the six months ended September 30, 2010
and 2009, and February 28, 2006 (Inception) through September 30, 2010 (unaudited)
    
    
    6Notes to Consolidated Financial Statements (unaudited)
    
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    14Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    19Item 4. Controls and Procedures
    
    
    19PART II: OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    20Item 1A. Risk Factors
    
    
    20Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    21Item 3. Defaults Upon Senior Securities
    
    
    21Item 5. Other Information
    
    
    21Item 6. Exhibits
    
    
    22Signature
    
    
    23Exhibit 31.1Exhibit 31.2Exhibit 32.1




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##### Table of Contents



Part I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 OMNI BIO PHARMACEUTICAL, INC. & SUBSIDIARY
(A Development Stage Company)
 
 CONSOLIDATED BALANCE SHEETS
 (Unaudited)
 September 30, 2010
    
    
    March 31, 2010ASSETSCurrent assets:Cash and cash equivalents
    
    $
    746,226
    
    
    $
    1,802,366Prepaid clinical trial fee
    
    
    365,000
    
    
    
    Other current assets
    
    
    39,178
    
    
    
    10,049Total current assets
    
    
    1,150,404
    
    
    
    1,812,415Property and equipment, net
    
    
    
    
    
    
    848Intangible assets, net
    
    
    64,523
    
    
    
    67,115Total long-term assets
    
    
    64,523
    
    
    
    67,963TOTAL ASSETS
    
    $
    1,214,927
    
    
    $
    1,880,378LIABILITIES & STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    6,389
    
    
    $
    94,356Accrued liabilities
    
    
    66,250
    
    
    
    97,487Amounts due to related parties
    
    
    3,750
    
    
    
    4,125Notes payable  related party, net of discount of $3,000 at March 31, 2010
    
    
    
    
    
    
    22,000Total current liabilities
    
    
    76,389
    
    
    
    217,968Commitments and Contingencies (Note 3)Stockholders equity:Preferred stock, $0.10 par value, 5,000,000 shares authorized, -0- shares
issued and outstanding
    
    
    
    
    
    
    Common stock, $0.001 par value; 200,000,000 shares authorized;
28,045,496 and 27,987,018 shares issued and outstanding, respectively
    
    
    28,045
    
    
    
    27,987Additional paid-in capital
    
    
    29,499,609
    
    
    
    24,573,783Deficit accumulated during the development stage
    
    
    (28,389,116
    )
    
    
    (22,939,360
    )Total stockholders equity
    
    
    1,138,538
    
    
    
    1,662,410TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    1,214,927
    
    
    $
    1,880,378
   2




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##### Table of Contents



OMNI BIO PHARMACEUTICAL, INC. & SUBSIDIARY
(A Development Stage Company)
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited)
 For the Three Months EndedSeptember 30,2010
    
    
    2009Operating expenses:General and administrative (including share-based compensation
of $2,376,849 and $697,842, respectively)
    
    $
    2,632,820
    
    
    $
    915,522License fee  related party
    
    
    
    
    
    
    5,615,980Research and development
    
    
    82,889
    
    
    
    Total operating expenses
    
    
    2,715,709
    
    
    
    6,531,502Loss from operations
    
    
    (2,715,709
    )
    
    
    (6,531,502
    )Non-operating income (expenses):Interest income (expense), net
    
    
    1,278
    
    
    
    1,099Accretion expense on notes payable   related party
    
    
    
    
    
    
    (3,000
    )Total non-operating income (expenses)
    
    
    1,278
    
    
    
    (1,901
    )Net loss
    
    $
    (2,714,431
    )
    
    $
    (6,533,403
    )Basic and diluted net loss per share
    
    $
    (0.10
    )
    
    $
    (0.28
    )Weighted average shares outstanding  basic and diluted
    
    
    28,042,982
    
    
    
    26,589,678
  3




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##### Table of Contents



OMNI BIO PHARMACEUTICAL, INC. & SUBSIDIARY
(A Development Stage Company)
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited)
 For the Six Months Ended
    
    
    February 28, 2006September 30,
    
    
    (Inception) through2010
    
    
    2009
    
    
    September 30, 2010Operating expenses:General and administrative (including share-based
compensation of $4,850,902, $1,334,815
and $12,712,018, respectively)
    
    $
    5,367,501
    
    
    $
    1,719,148
    
    
    $
    15,701,499License fee  related party
    
    
    
    
    
    
    5,615,980
    
    
    
    5,615,980Research and development
    
    
    82,889
    
    
    
    
    
    
    
    1,215,386Charge for common stock issued pursuant to
license agreements
    
    
    
    
    
    
    
    
    
    
    763,240Total operating expenses
    
    
    5,450,390
    
    
    
    7,335,128
    
    
    
    23,296,105Loss from operations
    
    
    (5,450,390
    )
    
    
    (7,335,128
    )
    
    
    (23,296,105
    )Non-operating income (expenses):Interest income (expense), net
    
    
    3,634
    
    
    
    629
    
    
    
    (53,613
    )Accretion expense on notes payable 
related party
    
    
    (3,000
    )
    
    
    (6,000
    )
    
    
    (56,125
    )Charges for warrants issued in merger  related parties
    
    
    
    
    
    
    
    
    
    
    (1,948,237
    )Charge for warrants issued in private placement 
related parties
    
    
    
    
    
    
    
    
    
    
    (403,350
    )Charges for modifications to warrants
    
    
    
    
    
    
    
    
    
    
    (2,631,686
    )Total non-operating income (expenses)
    
    
    634
    
    
    
    (5,371
    )
    
    
    (5,093,011
    )Net loss
    
    $
    (5,449,756
    )
    
    $
    (7,340,499
    )
    
    $
    (28,389,116
    )Basic and diluted net loss per share
    
    $
    (0.19
    )
    
    $
    (0.29
    )Weighted average shares outstanding  basic and diluted
    
    
    28,022,974
    
    
    
    26,305,926
   4




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##### Table of Contents



OMNI BIO PHARMACEUTICAL, INC. & SUBSIDIARY
(A Development Stage Company)
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 (Uuaudited)
 DeficitAccumulatedAdditional
    
    
    During
    
    
    TotalPreferred Stock
    
    
    Common Stock
    
    
    Paid-in
    
    
    Development
    
    
    StockholdersShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Stage
    
    
    EquityBalances at March 31, 2010
    
    
    
    
    
    $
    
    
    
    
    27,987,018
    
    
    $
    27,987
    
    
    $
    24,573,783
    
    
    $
    (22,939,360
    )
    
    $
    1,662,410Conversion of accounts payable into common stock
(April 2010 at $2.50 per share)
    
    
    
    
    
    
    
    
    
    
    20,000
    
    
    
    20
    
    
    
    49,962
    
    
    
    
    
    
    
    49,982Conversion of note payable with related party into common
stock (June 2010 at $0.80 per share)
    
    
    
    
    
    
    
    
    
    
    31,250
    
    
    
    31
    
    
    
    24,969
    
    
    
    
    
    
    
    25,000Share-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,850,902
    
    
    
    
    
    
    
    4,850,902Common stock purchase warrants exercised cashless
at weighted average exercise price of $3.13 per share)
    
    
    
    
    
    
    
    
    
    
    7,228
    
    
    
    7
    
    
    
    (7
    )
    
    
    
    
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,449,756
    )
    
    
    (5,449,756
    )Balances at September 30, 2010
    
    
    
    
    
    $
    
    
    
    
    28,045,496
    
    
    $
    28,045
    
    
    $
    29,499,609
    
    
    $
    (28,389,116
    )
    
    $
    1,138,538
   5




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##### Table of Contents



OMNI BIO PHARMACEUTICAL, INC. & SUBSIDIARY
(A Development Stage Company)
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Unaudited)
 For the Six Months Ended
    
    
    February 28, 2006September 30,
    
    
    (Inception) Through2010
    
    
    2009
    
    
    September 30, 2010CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (5,449,756
    )
    
    $
    (7,340,499
    )
    
    $
    (28,389,116
    )Adjustments used to reconcile net loss to net cash used in
operating activities:Charge for warrant issued for purchase of license 
related party
    
    
    
    
    
    
    5,590,980
    
    
    
    5,590,980Common stock issued pursuant to license agreements
    
    
    
    
    
    
    
    
    
    
    763,240Share-based compensation
    
    
    4,850,902
    
    
    
    1,334,815
    
    
    
    12,712,018Accretion expense  related parties
    
    
    3,000
    
    
    
    6,000
    
    
    
    56,125Charge for warrants issued in merger transaction 
related parties
    
    
    
    
    
    
    
    
    
    
    1,948,237Charge for warrants issued in private placement
transaction
 related parties
    
    
    
    
    
    
    
    
    
    
    403,350Charges for modifications to warrants
    
    
    
    
    
    
    
    
    
    
    2,631,686Depreciation and amortization
    
    
    3,440
    
    
    
    3,352
    
    
    
    20,354Contributed rent
    
    
    
    
    
    
    2,520
    
    
    
    19,740Loss on disposal of equipment
    
    
    
    
    
    
    
    
    
    
    2,444Changes in operating assets and liabilities:Prepaid clinical trial fee
    
    
    (365,000
    )
    
    
    
    
    
    
    (365,000
    )Other current assets
    
    
    (29,129
    )
    
    
    (5,906
    )
    
    
    (41,277
    )Accounts payable
    
    
    (37,985
    )
    
    
    (167,803
    )
    
    
    212,566Amounts due to UCD under sponsored research
agreement
    
    
    
    
    
    
    (160,000
    )
    
    
    Accrued liabilities and accrued compensation and related
benefits and taxes
    
    
    (31,237
    )
    
    
    (212,470
    )
    
    
    (245,574
    )Amounts due to related parties
    
    
    (375
    )
    
    
    (109,136
    )
    
    
    207,632Net cash used in operating activities
    
    
    (1,056,140
    )
    
    
    (1,058,147
    )
    
    
    (4,472,595
    )CASH FLOWS FROM INVESTING ACTIVITIES:Cash proceeds from reverse merger transactions
    
    
    
    
    
    
    
    
    
    
    11,750Purchase of licenses
    
    
    
    
    
    
    
    
    
    
    (35,401
    )Purchase of property and equipment
    
    
    
    
    
    
    
    
    
    
    (7,423
    )Net cash used in investing activities
    
    
    
    
    
    
    
    
    
    
    (31,074
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from the sale of common stock
    
    
    
    
    
    
    
    
    
    
    4,285,945Proceeds from the issuance of notes payable to related
party
    
    
    
    
    
    
    
    
    
    
    825,000Proceeds from the sale of common stock warrants
    
    
    
    
    
    
    
    
    
    
    125,000Proceeds from the exercise of common stock warrants
    
    
    
    
    
    
    3,950
    
    
    
    13,950Net cash provided by financing activities
    
    
    
    
    
    
    3,950
    
    
    
    5,249,895Net increase (decrease) in cash and cash equivalents
    
    
    (1,056,140
    )
    
    
    (1,054,197
    )
    
    
    746,226Cash and cash equivalents at beginning of period
    
    
    1,802,366
    
    
    
    1,805,395
    
    
    
    Cash and cash equivalents at end of period
    
    $
    746,226
    
    
    $
    751,198
    
    
    $
    746,226
  6




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OMNI BIO PHARMACEUTICAL, INC. & SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(Unaudited)
 For the Six Months EndedSeptember 30,2010
    
    
    2009SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash paid for:Interest
    
    $
    750
    
    
    $
    1,750Income taxes
    
    $
    
    
    
    $
    SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING
AND FINANCING ACTIVITIES:Note payable  related party converted to common stock
    
    $
    25,000
    
    
    $
    132,000Issuance of common stock pursuant to cashless exercises
of warrants
    
    $
    
    
    
    $
    880Accounts payable converted to common stock
    
    $
    49,982
    
    
    $
    
   7




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##### Table of Contents



OMNI BIO PHARMACEUTICAL, INC. AND SUBSIDIARY
(A Development Stage Company)
 
 Notes to Consolidated Financial Statements (Unaudited)
 NOTE 1  OVERVIEW AND BASIS OF PRESENTATION
 Organization
   Nature of Operations
    Basis of Presentation
   8




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##### Table of Contents



OMNI BIO PHARMACEUTICAL, INC. AND SUBSIDIARY
(A Development Stage Company)
Notes to Consolidated Financial Statements (Unaudited)
 Going Concern
   Recently Issued Accounting Standard Updates
  NOTE 2  NET LOSS PER SHARE
   9




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OMNI BIO PHARMACEUTICAL, INC. AND SUBSIDIARY
(A Development Stage Company)
Notes to Consolidated Financial Statements (Unaudited)
 NOTE 3  LICENSE AGREEMENTS AND RELATED MATTERS
 Bacterial Disorders License
  Viral Disorders License
   Cellular Transplant License
  Diabetes License Agreement and Sponsored Research Agreement
    10




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OMNI BIO PHARMACEUTICAL, INC. AND SUBSIDIARY
(A Development Stage Company)
Notes to Consolidated Financial Statements (Unaudited)
 Type 1 Diabetes Clinical Trial
  TM
 NOTE 4  STOCKHOLDERS EQUITY
   NOTE 5  SHARE-BASED COMPENSATION
 Compensation  Stock Compensation
  11




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OMNI BIO PHARMACEUTICAL, INC. AND SUBSIDIARY
(A Development Stage Company)
Notes to Consolidated Financial Statements (Unaudited)
   September 30, 2009Expected life (years)
    
    
    5.0 to 7.0Expected volatility
    
    
    100
    %Risk-free interest rate
    
    
    1.86 to 3.37
    %Dividend yield
    
    
    0
    %
  Three months ended September 30,
    
    
    Six months ended September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Employees, former employees and
directors
    
    $
    1,316,970
    
    
    $
    679,878
    
    
    $
    2,731,142
    
    
    $
    1,298,887Outside consultants
    
    
    1,059,879
    
    
    
    17,964
    
    
    
    2,119,760
    
    
    
    35,928$
    2,376,849
    
    
    $
    697,842
    
    
    $
    4,850,902
    
    
    $
    1,334,815
   WeightedWeighted
    
    
    AverageAverage
    
    
    RemainingExercise
    
    
    Contractual
    
    
    AggregateShares
    
    
    Price
    
    
    Term (in years)
    
    
    Intrinsic ValueOutstanding at March 31, 2010
    
    
    3,243,000
    
    
    $
    1.96Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Forfeited/expired/cancelled
    
    
    Outstanding at September 30, 2010
    
    
    3,243,000
    
    
    $
    1.96
    
    
    
    5.1
    
    
    $
    9,516,000Vested and exercisable at September 30, 2010
    
    
    2,283,000
    
    
    $
    1.53
    
    
    
    3.6
    
    
    $
    7,896,000
  12




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OMNI BIO PHARMACEUTICAL, INC. AND SUBSIDIARY
(A Development Stage Company)
Notes to Consolidated Financial Statements (Unaudited)
  Number of Warrants
    
    
    
    
    Exercise Price935,000
    
    
    
    
    $
    0.253,890,000
    
    
    
    
    $
    0.501,877,500
    
    
    
    
    $
    1.0074,116
    
    
    
    
    $
    2.50650,000
    
    
    
    
    $
    3.00888,376
    
    
    
    
    $
    3.758,314,992
 NOTE 6   SUBSEQUENT EVENT  RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS
    13




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 FORWARD LOOKING STATEMENTS
    Restatement of Certain Financial Information
    14




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Overview
    Current Scientific Developments
 Clinical Trial on Type 1 Diabetes
 TM
 TM
   15




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Bacterial License and Associated Sponsored Research Agreement
  Viral License and Associated Viral Sponsored Research Agreement
   Cellular Transplant/Graft Rejection License and Associated Sponsored Research Agreement
  Diabetes License Agreement and Sponsored Research Agreement
   Results of Operations  For the Three Months Ended September 30, 2010 Compared to the Three Months
Ended September 30, 2009
  Net loss 
  16




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General and administrative expenses
 License fee  related party
 Non-operating income (expense)
 Results of Operations  For the Six Months Ended September 30, 2010 Compared to the Six Months
Ended September 30, 2009
  Net loss 
 General and administrative expenses
 License fee  related party
 Non-operating income (expense)
  17




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Liquidity and Capital Resources
  Cash and Cash Equivalents
  Cash Flows from Operating Activities
  Cash Flows from Investing Activities
  Cash Flows from Financing Activities
   18




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Current Liquidity and Anticipated Cash Commitments
  Critical Accounting Policies
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  
 Item 4. Controls and Procedures.
 Disclosure
Controls and Procedures
   19




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Remediation
of the Material Weakness
  Change in Internal Control over Financial Reporting
  
 PART II  OTHER INFORMATION.
 
 Item 1. Legal Proceedings.
  
 Item 1A. Risk Factors.
  If we fail to establish and maintain proper and effective internal controls, our ability to produce
accurate financial statements on a timely basis could be impaired, which would adversely affect our
operating results, financial condition and stock price.
   20




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The restatement of our financial statements and other reports filed with the SEC has subjected the
Company to additional costs and additional risks and uncertainties.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  ISSUER PURCHASES OF EQUITY SECURITIES(d) Maximum Number(c) Total Number of
    
    
    (or ApproximateShares (or Units)
    
    
    Dollar Value) ofPurchased as Part
    
    
    Shares (or Units) that(a) Total Number
    
    
    (b) Average Price
    
    
    of Publicly
    
    
    May Yet Be Purchasedof Shares (or
    
    
    Paid per Share
    
    
    Announced Plans
    
    
    Under the Plans orPeriod
    
    Units) Purchased
    
    
    (or Unit)
    
    
    or Programs
    
    
    Programs)July 1  July 31, 2010
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    August 1  August 31, 2010
    
    
    3,392
    
    
    $
    9.79
    
    
    
    
    
    
    
    September 1  September 30, 2010
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    Total
    
    
    3,392
    
    
    $
    9.79
    
    
    
    
    
    
    
    
 
 Item 3. Defaults Upon Senior Securities.
  
 Item 5. Other Information.
   21




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Item 6. Exhibits.
 EXHIBIT #
    
    DESCRIPTION3.1
    
    
    Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Registrants
Registration Statement on Form SB-2 filed on March 2, 2007)3.2
    
    
    Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the Registrants
Current Report on Form 8-K filed on January 5, 2010)3.3
    
    
    Articles of Amendment for Across America Financial Services, Inc. including Amendment to
Articles of Incorporation of Across America Financial Services, Inc. (incorporated by
reference to Exhibit 3.3 to the Registrants Current Report on Form 8-K filed on June 2, 2009)10.1
    
    
    Sponsored Research Agreement between Omni Bio Operating, Inc. and the Regents of the
University of Colorado dated August 18, 2010 (incorporated by reference to Exhibit 10.1 to the
Registrants Current Report on Form 8-K filed on August 24, 2010)10.2
    
    
    Sponsored Research Agreement between Omni Bio Operating, Inc. and the Regents of the
University of Colorado dated September 3, 2010 (incorporated by reference to Exhibit 10.1 to
the Registrants Current Report on Form 8-K filed on September 9, 2010)31.1
    
    
    Certification of Acting Chief Executive Officer Pursuant to Rule 13a-14(a) under the
Securities Exchange Act of 1934 #31.2
    
    
    Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities
Exchange Act of 1934 #32.1
    
    
    Certification of Acting Chief Executive Officer and Chief Financial Officer Pursuant to
Section 1350 of Chapter 63 of Title 18 of the United States Code #
 
 #
    
    Filed herewith  22




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##### Table of Contents



SIGNATURES
  OMNI BIO PHARMACEUTICAL, INC.November 15, 2010
    By:
    /s/   Robert C. OgdenRobert C. OgdenChief Financial Officer
(Principal Financial and Accounting Officer)  23