##### 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 December 31, 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 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 5350 South Roslyn, Suite 430, Greenwood Village, CO 80111
 (303) 867-3415
 þ o
 o 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 (unaudited) December 31, 2010 and March 31, 2010
    
    
    2Consolidated Statements of Operations (unaudited)  For the three months ended
December 31, 2010 and 2009
    
    
    3Consolidated Statements of Operations (unaudited) For the nine months ended
December 31, 2010 and 2009, and February 28, 2006 (Inception) through December 31, 2010
    
    
    4Consolidated Statements of Stockholders Equity (unaudited)  As of and for the nine
months ended December 31, 2010
    
    
    5Consolidated Statements of Cash Flows (unaudited)  For the nine months ended
December 31, 2010 and 2009, and February 28, 2006 (Inception) through
December 31, 2010
    
    
    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
    
    
    20Item 4. Controls and Procedures
    
    
    20PART II: OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    20Item 1A. Risk Factors
    
    
    20Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    21Item 6. Exhibits
    
    
    21Signature
    
    
    22Exhibit 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)
 December 31, 2010
    
    
    March 31, 2010ASSETSCurrent assets:Cash and cash equivalents
    
    $
    616,101
    
    
    $
    1,802,366Prepaid clinical trial fee
    
    
    173,716
    
    
    
    Other current assets
    
    
    66,071
    
    
    
    10,049Total current assets
    
    
    855,888
    
    
    
    1,812,415Property and equipment, net
    
    
    
    
    
    
    848Intangible assets, net
    
    
    63,227
    
    
    
    67,115Total long-term assets
    
    
    63,227
    
    
    
    67,963TOTAL ASSETS
    
    $
    919,115
    
    
    $
    1,880,378LIABILITIES & STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    3,400
    
    
    $
    94,356Accrued liabilities
    
    
    113,166
    
    
    
    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
    
    
    120,316
    
    
    
    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;
28,980,496 and 27,987,018 shares issued and outstanding, respectively
    
    
    28,980
    
    
    
    27,987Additional paid-in capital
    
    
    30,499,990
    
    
    
    24,573,783Deficit accumulated during the development stage
    
    
    (29,730,171
    )
    
    
    (22,939,360
    )Total stockholders equity
    
    
    798,799
    
    
    
    1,662,410TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    919,115
    
    
    $
    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 EndedDecember 31,2010
    
    
    2009Operating expenses:General and administrative (including share-based compensation
of $779,178 and $2,317,780, respectively)
    
    $
    1,115,316
    
    
    $
    2,551,157Research and development
    
    
    226,451
    
    
    
    Total operating expenses
    
    
    1,341,767
    
    
    
    2,551,157Loss from operations
    
    
    (1,341,767
    )
    
    
    (2,551,157
    )Non-operating income (expenses):Interest income (expense), net
    
    
    712
    
    
    
    1,063Accretion expense on notes payable   related party
    
    
    
    
    
    
    (3,000
    )Charge for modification to investor warrant
    
    
    
    
    
    
    (2,479,000
    )Total non-operating income (expenses)
    
    
    712
    
    
    
    (2,480,937
    )Net loss
    
    $
    (1,341,055
    )
    
    $
    (5,032,094
    )Basic and diluted net loss per share
    
    $
    (0.05
    )
    
    $
    (0.19
    )Weighted average shares outstanding  basic and diluted
    
    
    28,310,550
    
    
    
    27,073,918
  3




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##### Table of Contents



OMNI BIO PHARMACEUTICAL, INC. & SUBSIDIARY
(A Development Stage Company)
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 February 28, 2006For the Nine Months Ended
    
    
    (Inception) throughDecember 31,
    
    
    December 31, 20102010
    
    
    2009Operating expenses:General and administrative (including share-based
compensation of $5,630,080, $3,652,595 and
$13,491,196, respectively)
    
    $
    6,482,817
    
    
    $
    4,270,305
    
    
    $
    16,816,815License fee  related party
    
    
    
    
    
    
    5,615,980
    
    
    
    5,615,980Research and development
    
    
    309,340
    
    
    
    
    
    
    
    1,441,837Charge for common stock issued pursuant to
license agreements
    
    
    
    
    
    
    
    
    
    
    763,240Total operating expenses
    
    
    6,792,157
    
    
    
    9,886,285
    
    
    
    24,637,872Loss from operations
    
    
    (6,792,157
    )
    
    
    (9,886,285
    )
    
    
    (24,637,872
    )Non-operating income (expenses):Interest income (expense), net
    
    
    4,346
    
    
    
    1,692
    
    
    
    (52,901
    )Accretion expense on notes payable 
related party
    
    
    (3,000
    )
    
    
    (9,000
    )
    
    
    (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
    
    
    
    
    
    
    (2,479,000
    )
    
    
    (2,631,686
    )Total non-operating income (expenses)
    
    
    1,346
    
    
    
    (2,486,308
    )
    
    
    (5,092,299
    )Net loss
    
    $
    (6,790,811
    )
    
    $
    (12,372,593
    )
    
    $
    (29,730,171
    )Basic and diluted net loss per share
    
    $
    (0.24
    )
    
    $
    (0.47
    )Weighted average shares outstanding  basic and
diluted
    
    
    28,119,181
    
    
    
    26,568,854
   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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,630,080
    
    
    
    
    
    
    
    5,630,080Common stock purchase warrants exercised cashless (at weighted average exercise price of
$3.13 per share)
    
    
    
    
    
    
    
    
    
    
    7,228
    
    
    
    7
    
    
    
    (7
    )
    
    
    
    
    
    
    Common stock purchase warrants exercised at exercise price of $0.25 per share, net of
placement agent fees
    
    
    
    
    
    
    
    
    
    
    935,000
    
    
    
    935
    
    
    
    221,203
    
    
    
    
    
    
    
    222,138Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,790,811
    )
    
    
    (6,790,811
    )Balances at December 31, 2010
    
    
    
    
    
    $
    
    
    
    
    28,980,496
    
    
    $
    28,980
    
    
    $
    30,499,990
    
    
    $
    (29,730,171
    )
    
    $
    798,799
   5




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##### Table of Contents



OMNI BIO PHARMACEUTICAL, INC. & SUBSIDIARY
(A Development Stage Company)
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS  (Unaudited)
 February 28, 2006For the Nine Months Ended
    
    
    (Inception) ThroughDecember 31,
    
    
    December 31, 20102010
    
    
    2009CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (6,790,811
    )
    
    $
    (12,372,593
    )
    
    $
    (29,730,171
    )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
    
    
    5,630,080
    
    
    
    3,652,595
    
    
    
    13,491,196Accretion expense  related parties
    
    
    3,000
    
    
    
    9,000
    
    
    
    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
    
    
    
    
    
    
    2,479,000
    
    
    
    2,631,686Depreciation and amortization
    
    
    4,736
    
    
    
    4,969
    
    
    
    21,650Contributed rent
    
    
    
    
    
    
    3,780
    
    
    
    19,740Loss on disposal of equipment
    
    
    
    
    
    
    
    
    
    
    2,444Changes in operating assets and liabilities:Prepaid clinical trial fee
    
    
    (173,716
    )
    
    
    
    
    
    
    (173,716
    )Other current assets
    
    
    (56,022
    )
    
    
    4,833
    
    
    
    (68,170
    )Accounts payable
    
    
    (40,974
    )
    
    
    (169,629
    )
    
    
    209,577Amounts due to UCD under sponsored research
agreement
    
    
    
    
    
    
    (241,000
    )
    
    
    Accrued liabilities and accrued compensation and related
benefits and taxes
    
    
    15,679
    
    
    
    (198,227
    )
    
    
    (198,658
    )Amounts due to related parties
    
    
    (375
    )
    
    
    (133,761
    )
    
    
    207,632Net cash used in operating activities
    
    
    (1,408,403
    )
    
    
    (1,370,053
    )
    
    
    (4,824,858
    )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
    
    
    
    
    
    
    351,000
    
    
    
    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
    
    
    222,138
    
    
    
    3,950
    
    
    
    236,088Net cash provided by financing activities
    
    
    222,138
    
    
    
    354,950
    
    
    
    5,472,033Net increase (decrease) in cash and cash equivalents
    
    
    (1,186,265
    )
    
    
    (1,015,103
    )
    
    
    616,101Cash and cash equivalents at beginning of period
    
    
    1,802,366
    
    
    
    1,805,395
    
    
    
    Cash and cash equivalents at end of period
    
    $
    616,101
    
    
    $
    790,292
    
    
    $
    616,101
  6




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##### Table of Contents



OMNI BIO PHARMACEUTICAL, INC. & SUBSIDIARY
(A Development Stage Company)
 CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(Unaudited)
 For the Nine Months EndedDecember 31,2010
    
    
    2009SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:Cash paid for:Interest
    
    $
    750
    
    
    $
    1,750Income taxes
    
    $
    
    
    
    $
    SUPPLEMENTAL DISCLOSURES OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:Notes payable  related parties converted to common
stock
    
    $
    25,000
    
    
    $
    132,000Issuance of common stock purchase warrants to related
party pursuant to private placement transaction
    
    
    7
    
    
    $
    69,962Issuance of common stock pursuant to cashless exercises
of warrants
    
    $
    
    
    
    $
    1,172Accounts 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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##### Table of Contents



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)
   December 31, 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 December 31,
    
    
    Nine months ended December 31,2010
    
    
    2009
    
    
    2010
    
    
    2009Employees, former
employees and
directors
    
    $
    779,178
    
    
    $
    1,798,270
    
    
    $
    3,510,320
    
    
    $
    3,097,157Outside consultants
    
    
    
    
    
    
    519,510
    
    
    
    2,119,760
    
    
    
    555,438$
    779,178
    
    
    $
    2,317,780
    
    
    $
    5,630,080
    
    
    $
    3,652,595
   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 December 31, 2010
    
    
    3,243,000
    
    
    $
    1.96
    
    
    
    4.8
    
    
    $
    6,423,000Vested and exercisable at December 31, 2010
    
    
    2,633,000
    
    
    $
    1.74
    
    
    
    4.2
    
    
    $
    5,863,000
  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 Price3,890,000
    
    
    
    
    $
    0.501,877,500
    
    
    
    
    $
    1.0074,116
    
    
    
    
    $
    2.50650,000
    
    
    
    
    $
    3.00888,376
    
    
    
    
    $
    3.757,379,992
  13




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##### Table of Contents



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




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Current Scientific Developments
 New patent issuances
   Clinical Trial on Type 1 Diabetes
 TM
  15




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##### Table of Contents



TM
  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
   16




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##### Table of Contents



Results of Operations  For the Three Months Ended December 31, 2010 Compared to the Three Months
Ended December 31, 2009
  Net loss 
 General and administrative expenses
 Research and development 
 Non-operating income (expense)
 Results of Operations  For the Nine Months Ended December 31, 2010 Compared to the Nine Months
Ended December 31, 2009
  Net loss 
  17




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General and administrative expenses
 Research and development 
 License fee  related party
 Non-operating income (expense)
 Liquidity and Capital Resources
   18




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Cash and Cash Equivalents
  Cash Flows from Operating Activities
  Cash Flows from Investing Activities
  Cash Flows from Financing Activities
  Anticipated Cash Commitments
  Critical Accounting Policies
   19




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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  
 Item 4. Controls and Procedures.
 Disclosure Controls and Procedures
  Change in Internal Control over Financial Reporting
   
 PART II  OTHER INFORMATION.
 
 Item 1. Legal Proceedings.
  
 Item 1A. Risk Factors.
   20




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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  
 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 (incorporated by reference to Exhibit 3.3 to the Registrants
Current Report on Form 8-K filed on June 2, 2009)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  21




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SIGNATURES
  OMNI BIO PHARMACEUTICAL, INC.January 21, 2011
    By:
    /s/   Robert C. OgdenRobert C. OgdenChief Financial Officer
(Principal Financial and Accounting Officer)  22