UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 000-52530

Omni Bio Pharmaceutical, Inc.

(Exact Name of Registrant as Specified in its Charter)

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
(Address of principal executive offices, including zip code)

303-867-3415
Registrant’s telephone number including, area code

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act:

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes o No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 þ 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 (§232.05 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 o No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.05) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Accelerated filer þ		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ

The aggregate market value of the voting and non-voting common stock held by non-affiliates as of the last business day of the registrant’s most recently completed second fiscal quarter was approximately $224 million based on the closing sale price of the registrant’s common stock on such date as reported on the Over the Counter Bulletin Board.

The number of shares outstanding of the registrant’s common stock as of June 15, 2010 was 28,007,818.

Part III incorporates certain information by reference from the registrants’ proxy statement for the 2010 annual meeting of stockholders to be filed no later than 120 days after the end of the registrant’s fiscal year ended March 31, 2010.

 

 

TABLE OF CONTENTS

PART I
Item 1. Business			3
Item 1A. Risk Factors			15
Item 1B. Unresolved Staff Comments			24
Item 2. Properties			24
Item 3. Legal Proceedings			24
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			25
Item 6. Selected Financial Data			28
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations			28
Item 7A. Quantitative and Qualitative Disclosures About Market Risk			38
Item 8. Financial Statements and Supplementary Data			38
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure			38
Item 9A. Controls and Procedures			39
Item 9B. Other Information			41
PART III
Item 10. Directors, Executive Officers and Corporate Governance			41
Item 11. Executive Compensation			41
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			41
Item 13. Certain Relationships and Related Transactions, and Director Independence			41
Item 14. Principal Accountant Fees and Services			41
PART IV
Item 15. Exhibits and Financial Statement Schedules			42
SIGNATURES			44
Exhibit 14.1
Exhibit 21
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

PART I

ITEM 1.		BUSINESS.

FORWARD LOOKING STATEMENTS

The following discussion contains forward-looking statements regarding us, our business, prospects and results of operations that are subject to certain risks and uncertainties posed by many factors and events that could cause our actual business, prospects and results of operations to differ materially from those that may be anticipated by such forward-looking statements. Factors that may affect such forward-looking statements include, without limitation: our ability to successfully develop new products and services for new markets; the impact of competition on our revenues; changes in law or regulatory requirements that adversely affect our ability to market our products; delays in the introduction of our products or services into the market; our ability to secure adequate financing for our operations; and our failure to keep pace with our competitors.

When used in this report, words such as “believes,” “anticipates,” “expects,” “intends” and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We undertake no obligation to revise any forward-looking statements in order to reflect events or circumstances that may subsequently arise. Readers are urged to carefully review and consider the various disclosures made by us in this report and other reports filed with the Securities and Exchange Commission (“SEC”) that attempt to advise interested parties of the risks and factors that may affect our business.

Except as the context otherwise requires, the terms “Company,” “we,” “our,” “us” or “Omni,” means Omni Bio Pharmaceutical, Inc. and its wholly-owned subsidiary, Omni Bio Operating, Inc.

BACKGROUND AND HISTORY

We were incorporated in Colorado under the name of Across America Financial Services, Inc. (“Across America”) on December 1, 2005 as a wholly-owned subsidiary of Across America Real Estate Corp. Across America completed a spin off from Across America Real Estate Corp. in March 2007. Across America intended to act as a mortgage broker for commercial real estate transactions; however, no revenues were generated from this business.

Prior to the formation of Omni, two separate corporations were formed for the purpose of evaluating new uses of an FDA- approved agent. One corporation, Maxcure Pharmaceutical, Inc. (“Maxcure”), was formed as a Colorado corporation on December 26, 2006. Maxcure was formed for the purpose of entering into a license agreement and research agreement with the University of Colorado Denver (“UCD”) (formerly known as the University of Colorado Health Sciences Center) to further scientific studies on an FDA-approved agent related to treatment and prevention of viral disorders. The second corporation, Apro Bio Pharmaceutical Corporation (“Apro Utah”), was formed as a Utah corporation on February 28, 2006. Apro Utah was formed for the purpose of entering into a license agreement and research agreement with UCD for advancing scientific studies on an FDA-approved agent related to treatment and prevention of bacterial disorders. Part of the motivation for formation of Apro Utah was to attain the ability to sell treatments and/or countermeasures related to the bacterial disorders to federal agencies. On March 31, 2008, Apro Utah was merged into Maxcure and the name of the merged entity was changed to Apro Bio Pharmaceutical Corporation (“Apro Bio”).

On March 31, 2009, Across America completed the acquisition of Apro Bio pursuant to the terms of the Agreement of Merger and Plan of Reorganization, as amended (the “Merger”), among Across America, Apro Bio and Across America Acquisition Corp. (“AAAC”), a Colorado corporation and a wholly-owned subsidiary of Across America. Pursuant to the terms of the Merger, AAAC was merged into Apro Bio, and Apro Bio became a wholly-owned subsidiary of Across America. The shareholders of Apro Bio were issued a total of 18,210,295 shares of Across America’s common stock in exchange for their Apro Bio shares. In addition, outstanding warrants to purchase 2,157,500 shares of the common stock of Apro Bio were automatically converted into warrants to purchase the same number of shares of Across America’s common stock, and a note, convertible into 25,000 shares of the common stock of Apro Bio, was converted into a note convertible into 25,000 shares of Across America’s common stock on the same terms and conditions as the original note. Also in connection with the Merger and as compensation for advisory services, we issued to Bathgate Capital Partners LLC, 1,750,000 warrants to purchase Across America’s common stock at an exercise price of $0.001 per share. As required by the terms of the Merger, on May 27, 2009, Across America changed its corporate name to Omni Bio Pharmaceutical, Inc.

PLAN OF OPERATION

Overall Focus

We are in pursuit of advancing existing and novel therapies that we believe have the potential to move through clinical trials quickly, shepherd them through the FDA approval processes and advance them through to commercialization. This core strategy is based on licensing issued and pending patent applications that cover new uses for an existing FDA-approved drug, Alpha-1 Antitrypsin (“AAT”), that has come off of its initial patents. AAT is currently used as a therapeutically effective treatment for a genetic deficiency and the treatment for a pulmonary disorder that is unrelated to our licensed intellectual property.

With respect to the licensed technologies, we have licensed patent applications and patents related to methods of use for AAT and novel compositions of matter and their uses from UCD. We are currently focusing on four areas: bacterial disorders, viral disorders, complications due to graft rejection and diabetes. One license agreement from UCD relates to treating transplantation rejection. Transplantation rejection includes cellular and organ transplant rejection. One focus related to cellular transplantation is islet cell transplantation for the treatment of some diabetics and the treatment of diabetes in general. A second license agreement relates to the treatment and/or prevention of bacterial disorders, including bacterial pneumonia, tuberculosis and biowarfare agents such as anthrax. The third license agreement focuses on the treatment and/or prevention of viral disorders. With this third license, we have licensed a patent, United States Patent No. 6,849,605, Titled: Inhibitors of Serine Protease Activity, Methods and Compositions for Treatment of Viral Infections, which covers treatment of HIV. This patent was filed on March 3, 2000 and expires on March 3, 2020. Additionally, we have licensed patent applications for the treatment of other viral-associated disorders such as epidemic influenza, including H1N1 related strains.

Other than the agreements with UCD, we have licensed and intend to pursue additional licenses to more thoroughly cover and commercialize a patent portfolio from Bio Holding, Inc. (“Bio Holding”), an entity affiliated with our Principal Investigator, Dr. Leland Shapiro. A component of these applications involves uses of AAT to treat a variety of indications related to the indications targeted by UCD.

Some of our product candidates include alternative uses of AAT and derivatives of AAT. Any patents originally issued to other entities claiming the composition of AAT have expired. AAT is currently prescribed for the treatment of pulmonary emphysema among individuals with genetic deficiency of AAT.

Several companies currently sell products of the FDA-approved drug, AAT, for the treatment of genetic deficiency and the treatment for a pulmonary disorder (brand name in parenthesis): (i) Baxter Biotherapeutics (Aralast NP), (ii) CSL Behring USA (Zemaira), and (iii) Talecris Biotherapeutics, Inc.( Prolastin-C (R)). The UCD and Bio Holding licensed technologies focus on alternative uses of these commercially available products, including other forms of AAT and AAT derivatives related to treatment and/or prevention of bacterial disorders, viral disorders, cell rejection/graft rejection and diabetes.

Business Efforts

To date, our business efforts have been largely dedicated in pursuing additional capital in order to fund Sponsored Research Agreements (“SRAs”) related to the licenses from UCD in effort to further research related to bacterial disorders, viral disorders, cellular transplantation/graft rejection and diabetes-related disorders, and to fund our recently approved clinical trial in Type 1 diabetes.

There are examples of drugs for which the initial use and patents have been replaced by uniquely different indications. We believe that our approach to the development of new uses for an off-patent drugs is similar to drugs such as Minoxodil (trade named Rogaine^®), which originally had been patented to treat high blood pressure. Scientists working at UCD in the 1970’s discovered that Minoxodil could be used to stimulate hair growth and the drug was subsequently marketed by Upjohn to treat baldness using a method-of-use license from the University of Colorado (“CU”). Although we believe our strategy to be sound, there is no assurance that any of our product candidates will receive FDA approval, or that any of our pending patent applications will be approved. Additionally, even if our product candidates receive FDA approval and patent protection, there is no assurance that the products will be as successful as Rogaine, or be commercially viable at all.

We intend to continue to outsource the normally capital intensive scientific research function to academic research institutions such as UCD. This can provide us with a specific scientific budget for funding each application, without the substantial cost of carrying-out basic research internally. Work contracted with UCD or other research institutions is expected to provide a contractually agreed-upon work product, generally consisting of pre-clinical testing at predetermined costs, which increases the viability of our financial forecasting. With this approach, we expect to be able to work with each project’s lead scientists, overseeing patent application projects and closely managing our corporate overhead. This should allow most of our expenses to be concentrated on research and development efforts and prosecuting the patent applications we have licensed. Future research essential for developing these strategies will be conducted in accordance with our world-wide licensing rights and our existing and expected future SRAs with UCD.

Scientific research that we consider necessary for the support of our licensed intellectual property related to treatment and prevention of bacterial disorders has been conducted by a specialized team at UCD under the supervision of Dr. Leland Shapiro. Further research and development is expected to continue through SRAs with UCD, and potentially SRAs with additional universities. We also intend to execute an additional SRA related to treatment and/or prevention of viral disorders, also under the supervision of Dr. Leland Shapiro during the fiscal year ended March 31, 2011.

We intend to initiate an SRA related to the cellular transplant and transplant rejection license agreement under the supervision of our Acting Chief Executive Officer and scientist, Dr. Charles Dinarello, also during the fiscal year ended March 31, 2011.

Beginning in the second half of 2009, our business efforts changed from focusing on commercializing a prophylactic (preventative) and therapeutic treatment for anthrax to pursuing conducting a human clinical trial for the treatment of Type 1 diabetes. This change was heavily influenced by our ability to raise capital in March 2009 specific to the treatment of immunological diseases such as Type 1 diabetes. We are continuing to investigate options for governmental funding programs for biohazards, but believe that such funding is less certain during the current economic climate in the U.S. and in Europe.

In the second half of 2009, we began our collaboration with the Barbara Davis Center for Childhood Diabetes (the “Barbara Davis Center”) to conduct a proof of principle clinical trial for the treatment of Type 1 diabetes patients. In December 2009, the Barbara Davis Center submitted an application to the FDA requesting a waiver to the Investigational New Drug Application (IND) requirements for AAT due to its historical safety record. In May 2010, the FDA advised the Barbara Davis Center that it was denying the waiver request, but was allowing the trial to commence enrollment under an IND. We anticipate that the trial will commence infusing patients with the trial drug in the third calendar quarter of 2010. See further discussion of the clinical trial below under this Item.

In this regard, and to further our intellectual property portfolio, we entered into a licensing agreement on September 28, 2009 with Bio Holding, whereby Bio Holding licensed to us the filed, but unissused patent claims it owned for the treatment of diabetes utilizing AAT. In addition to licensing the diabetes rights, we obtained a right of first refusal to any future technologies developed by Bio Holding. The Bio Holding patent claims relating to the treatment of diabetes using AAT are separate and distinct from the claims filed by CU, which we have also licensed. It is possible that CU’s and Bio Holding’s patent filings could be issued or that one or the other set of claims may be allowed to the disadvantage of the other. Alternatively, both CU’s and Bio Holding’s patent applications could be rejected, which could have an adverse material effect on our ability to develop a commercial market for AAT for the treatment of diabetes. See further discussion of our licensing arrangement with Bio Holding below under this Item.

During our fiscal year ended March 31, 2010, we continued to focus on capital raising and concluded a private placement equity offering of slightly less than $2 million (before fees and associated costs). Funds from this offering were allocated to cover operating expenses and to advance our bacterial and viral-related disorder research.

LICENSE AND SPONSORED RESEARCH AGREEMENTS

Omni is the licensee of 3 patent portfolios from UCD, which are comprised of 1 issued and 21 pending patent applications. In addition, we have received two notices of allowance related to filed applications.

Bacterial Disorders License

On May 15, 2006, we entered into our first exclusive license agreement with the Regents of the University of Colorado (“RUC”) on behalf of UCD covering patent applications directed to treatment and/or prevention of bacterial disorders. Some of these disorders include disorders due to anthrax, tuberculosis and bacterial pneumonia. Concurrently, we entered into a three year SRA with UCD for research to advance the bacterial disorders license agreement (the “Bacterial SRA”). Under the Bacterial SRA, we were required to make payments aggregating $1,097,460 over the three-year period. On January 9, 2009, we amended the agreement to extend the required payments due in the final year. The revised payment terms were for four quarterly payments due on April 1, 2009, July 1, 2009, October 1, 2009 and January 1, 2010. We made our final payment under this SRA in January 2010 and have no further obligation under this SRA. We are continuing to pursue patent rights directed to targeting bacterial disorders with the United States Patent and Trademark Office (“USPTO”) as well as international patent offices, which include Japan, Canada and Europe.

We believe that this technology and related research conducted in the protease inhibition area could provide opportunities for developing proprietary therapies to treat disorders due to other bacterial disorders. Because part of the license agreement is directed to uses for an existing FDA approved agent directed to treat and/or prevent bacterial disorders, this may provide a lead to the market for commercializing uses of the agent. In addition, we are also advancing scientific research and development in support of other intellectual property rights related to targeting bacterial disorders with novel composition of matter.

Viral Disorders License

On March 31, 2008, we entered into a license agreement with RUC covering patent applications and an issued patent directed to treatment and/or prevention of viral disorders. Some of these disorders include, but are not limited to, HIV and influenza (the “Viral License”). We are currently pursuing expanded patent rights based on our licensed technology directed to treating viral-related disorders with the USPTO. In addition, we are negotiating an SRA related to research and advancement of this licensed technology. We expect that upon execution of the SRA, our financial obligation will total approximately $440,000, payable quarterly over two years.

Cellular Transplant License

On November 12, 2008, we entered into a license agreement with RUC for technology related to the treatment of cellular transplantation and graft rejection (the “Cellular Transplant License”). We are currently pursuing expanded patent rights based on our licensed technology directed to treating cellular transplantation and graft rejection disorders with the USPTO and international patent offices, which include Canada and Europe. In addition, we are negotiating an SRA related to research and advancement of this licensed technology.

Under the Bacterial, Viral and Cellular Transplant Licenses (collectively, the “RUC Licenses”), we have exclusive, royalty-bearing licenses to certain of UCD’s patent rights (the “Patent Rights”) on a worldwide basis. In addition, any improvements to the inventions covered by the licenses from UCD claimed in the Patent Rights or to any other preexisting patent application or patent that is dominated by the Patent Rights shall be included in the terms and conditions of the respective license agreement with no additional compensation to UCD.

The RUC License Agreements further provide that in the event that Dr. Leland Shapiro, Dr. Charles Dinarello or anyone working in a laboratory under the supervision or direction of Dr. Shapiro or Dr. Dinarello makes any invention in the field of use, the practice of which would not require the practice of an invention claimed in or covered by the licensed Patent Rights (“Independent Invention”), under certain circumstances, we would have an exclusive option (“Option”) to obtain the worldwide intellectual property rights and commercial rights on terms and conditions to be negotiated in good faith by the parties following the exercise of the Option.

Bio Holding License

As previously discussed, on September 28, 2009, we entered into a license agreement with Bio Holding to obtain an exclusive license (the “Bio Holding License”) to patent applications related to the treatment of diabetes (the “Licensed Technology”). In addition, the Bio Holding License grants us a first refusal to license any other intellectual property owned by Bio Holding that is not part of the License. Dr. Leland Shapiro, who is one of our Principal Investigators and currently the beneficial owner of approximately 14% of our common stock, is the majority shareholder of Bio Holding.

In consideration for the Bio Holding License, we were obligated to pay Bio Holding within 60 days from the Effective Date a license fee of $25,000. As additional consideration, we issued to a minority shareholder of Bio Holding warrants to purchase 650,000 shares of our common stock at an exercise price of $3.00 per share. The warrants expire on September 28, 2014 and contain a cashless exercise provision. Such warrants were subject to the execution of a subscription and lock-up agreement by the minority shareholder that restricts the sale or transfer of the underlying shares until March 31, 2011. We estimated the issue date fair value of the warrants at $1,470,000, which was calculated using the Black-Scholes model. The total value ascribed to the Bio Holding License was $1,495,000.

We are obligated to pay royalties to Bio Holding of (i) four percent (4%) of the gross revenues from the sale or use of the Licensed Technology and (ii) thirty percent (30%) of the gross revenues from sublicensing of the Licensed Technology. We were also obligated to enter into an SRA with UCD for the benefit of Dr. Leland Shapiro’s laboratory related to the Bio Holding License. We are presently in discussions regarding this SRA, and expect our payments under this SRA to be approximately $88,000.

License Payments

To date, the following consideration has been paid related to the RUC Licenses and the Bio Holding License:

										Fair value of
						SRA				equity
License		License fee				payments				securities				Total
Bacterial		$	20,000			$	1,097,460			$	64,301			$	1,181,761
Viral		$	25,000			$	—			$	—			$	25,000
Cellular Transplant		$	34,736			$	—			$	698,939			$	733,675
Diabetes		$	25,000			$	—			$	1,470,000			$	1,495,000
		$	104,736			$	1,097,460			$	2,233,240			$	3,114,136

Future royalty payments under the above license agreements are summarized below:

				Minimum		Milestone		Earned		Sublicense
License Date		Field of Use		Royalties		Royalties		Royalties		Royalties
May 15, 2006		Bacterial Disorders		$25,000 per year starting		$30,000 to
				May 15, 2011		$300,000 (1)		4% of Net Sales		20% to 30%
March 30, 2008		Viral Disorders		$50,000 per year after		$100,000 to
		(including HIV)		first commercial sale		$150,000 (2)		4% of Net Sales		20% to 30%
November 12, 2008		Cellular
		Transplantation /Graft Rejection		$50,000 per year after first commercial sale		$25,000 to $200,000 (3)		3% of Net Sales		20% to 30%
September 28, 2009		Diabetes		None		None		4% of Gross Revenues (4)		30% (4)

The license agreements expire upon the expiration date of the last patent covered by the agreement and may also be terminated by either party in the event of a default by the other party.

CURRENT TARGETED MARKETS

Type 1 Diabetes

In October 2008, scientists who either were associated with the Company (Dr. Shapiro) or who would subsequently become associated with the Company (Dr. Dinarello and Eli Lewis, PHD) published in the Proceedings of the National Academy of Sciences (October 21, 2008 Volume 105, No. 42) a study titled, “Alpha 1-Antitrypsin monotherapy induces immune tolerance during islet allograft transplantation in mice.” This paper reported the success of an acceptable animal model study in support of the potential effectiveness of protecting the insulin-producing beta cells as well as during transplantation of islet cells in humans when AAT was administered to prevent organ rejection of islet cells.

Further analysis of these mouse-model results caused scientists associated with the Company to hypothesize that certain properties of AAT could result in reduced or eliminated islet damage, which is a probable cause of Type 1 diabetes. Based on this hypothesis, during the third calendar quarter of 2009, we pursued sponsoring a human clinical trial at the Barbara Davis Center to study whether administering AAT to recently diagnosed Type 1 diabetics could potentially mediate or eliminate the deterioration of humans having remaining islet cell populations.

In July 2009, the Barbara Davis Center filed with the Colorado Multiple Institutional Review Board (COMIRB) a protocol to conduct a clinical trial to determine “the effects of open label Alpha-1 antitrypsin on the progression of Type 1 diabetes in subjects with detectable C-peptide.” After a series of comment letters and responses with COMIRB, the Barbara Davis Center was notified on April 2, 2010 that the protocol had been approved.

In December 2009, the Barbara Davis Center filed with the FDA an Investigational New Drug Application (IND) for the use of AAT on Type 1 diabetes for which the Company would act as the sponsor of a clinical trial. In May 2010, the Barbara Davis Center advised us that our IND had received regulatory clearance from the FDA, and on June 7, 2010, we executed a clinical trial agreement (the “Clinical Trial’) with the Barbara Davis Center and RUC for and on behalf of UCD. We anticipate that the Clinical Trial will commence during the third quarter of 2010.

We have COMIRB approval to enroll 15 patients initially in the Clinical Trial. The enrolled patients will have staged infusion dates in part to reduce the potential impact of side effects, which are not expected. Patients will be administered AAT in weekly infusions for eight weeks. The level of C-peptide and A1C levels will be periodically measured (for a period of two years) to determine if the AAT administration is protecting insulin- producing islet cells in the subjects. The destruction of these islet cells in a subject is the cause of Type 1 diabetes that can lead to a life-time dependency on outside sources of insulin.

The Company anticipates that patients admitted into the Clinical Trial could have a variety of outcomes, some or all of which may not be successful or even partially successful. Patients may have separate and distinct outcomes from the administration of the drug. They may exhibit no change in the rate of deterioration of their islet cells, or if a reduction in the rate of deterioration is determined, the rate may be inadequate to prevent the eventual occurrence of insulin dependency. Alternatively, the administration of AAT over the eight week infusion period could cause a reduction or elimination of the deterioration of the islet cell destruction. There is also the possibility that the administration of AAT will only temporarily prevent islet cell deterioration.

In the event there is some degree of favorable outcomes in the Clinical Trial, we have approval and could choose to increase the enrollment of the patient population to as many as 50 patients, subsequent to the initial enrollment. Additional enrollment in the study would require a significant amount of capital that we currently do not have, and there is no assurance that such financial resources would be made available to us on favorable terms, if at all. In the event that we obtain favorable data from the Clinical trial, there is no assurance that we will obtain FDA approval for the use of AAT to treat Type 1 diabetes in humans. Additionally, there is no assurance that, if approved, we will have available resources to complete a Phase III clinical trial in a timely manner or at all.

The current stage of development for each of the indications using AAT discussed below is pre-clinical.

Type 2 Diabetes

We are in the preliminary stages of exploring AAT as a treatment for Type 2 diabetes. We have determined over the course of the past year that AAT may have potential as a treatment for Type 2 diabetes on patients who are failing currently available forms of therapy. In the second half of 2009, we executed an agreement with a contractual research organization (“CRO”) to explore a potential clinical trial for this indication and received a proposal from the CRO to conduct a proof of concept multiple center, placebo controlled pilot trial in India (“Pilot Trial”). We are presently evaluating the proposal and would need to obtain funding to proceed with the Pilot Trial. There are no assurances that we will be able to raise the necessary funding to conduct the Pilot Trial.

Influenza

As previously discussed, in 2008 we entered into the Viral License with RUC related to the treatment and prevention of viral disorders. Our interest in this area was based on the commercial opportunities that exist for an effective treatment for influenza that could have a broad spectrum applicability.

The 2009 outbreak of the H1N1 influenza virus caused a sudden increase in the interest of developing new vaccines and treatments for “pandemic” types of flu. Although the outbreak did not reach the extreme levels that were predicted by some, the Center for Disease Control in March 2010 estimated that there had been about 12,000 deaths in the United States alone.

The 1918 pandemic flu outbreak is the only massive recorded outbreak of deadly flu in modern history. It is estimated that in excess of 50,000,000 deaths occurred from this pandemic flu, and the outbreak resulted in a 10 year reduction in the average life expectancy of the population at its time.

Dr. Leland Shapiro has conducted limited animal studies that have evidenced that AAT could be used as a potential treatment for influenza infection. In animal studies when AAT was introduced, influenza cell production was limited by approximately 40% when compared to the control sample that had been similarly infected with influenza. In the same experiment, a larger dosage of AAT resulted in an approximate 70% reduction in the measurable amount of influenza when compared to the control. This treatment could potentially be utilized for seasonal flu, bird flu, swine flu and weaponized flu. Dr. Leland Shapiro’s laboratory findings in animal studies have determined that AAT is effective even if the influenza virus changes or mutates.

The origin of this technology dates to a discovery by UCD researchers. It was found that a human deficit in the natural human serine protease inhibitor has a significant correlation with increased incidence of influenza infection. The study reviewed patient data records of 140 patients over an approximate seven-year period. Of the 140 patients, 28 were deficient in the therapeutic, while 112 were not. Over the course of the study period, of the 28 patients with the deficiency, approximately 80% were diagnosed with the flu. It was also observed that of the 112 patients that did not have the deficiency, approximately 30% of this group were diagnosed with the flu.

In the near term, we anticipate entering into an SRA with UCD to conduct additional animal studies on the effectiveness of AAT as a treatment for influenza. We expect this agreement to be for approximately $440,000 over the two year duration of the study.

Cellular Transplantation and Graft Rejection

As previously discussed, in November 2008 we entered into the Cellular Transplant License with RUC. Researchers associated with the Company have hypothesized that AAT could be effective in reducing transplant rejection in various types of cellular and organ transplants. As reported above, a study was published in the Publications of the National Academy of Sciences in 2005 and 2008 that illustrated that AAT could be effective in treating Type 1 diabetes by, for example, reducing or eliminating transplantation rejection. One basic theory on why the therapeutic appears to be effective in the early mice studies is that it prevents or reduces an attack on the transplanted islets by the immune system or other method. Islet transplantation in Type 1 diabetes normally incurs a very high rejection (or cell death rate), and in these early studies, mice treated at a certain level with the therapeutic evidenced a 100% acceptance of the graft transplant.

Islets are cells that exist in the pancreas and are responsible for the production of insulin. Insulin is critical to the metabolism process in burning sugar and creating energy for the cells in the body. Sugar, if left unchecked by inadequate supplies of insulin, can result in weight gain, high blood pressure, cardiovascular disease, early blindness and stroke. A number of these conditions can result in early stages of death. Islet transplantation is a relatively simple one hour surgical procedure, but has been plagued with high levels of transplant rejection. This type of therapy in the human population could have a significant impact on the treatment of Type 1 diabetics. Typically, Type 1 islet transplantation occurs in very serious cases.

The high incidence of graft rejection by recipients decreases the number of islet transplant patients that can be treated due in part to the fact that a recipient who has rejected islets will likely undergo additional procedures, which causes additional drain on the supply of islet cells that can be used for transplant.

According to the Juvenile Diabetes Research Foundation International (www.jdrf.org), as many as three million Americans may have Type 1 diabetes. Each year over 15,000 children are diagnosed with diabetes in the U.S (approximately 40 children per day). We believe that AAT may arrest the loss of islets if treatment is initiated soon after diagnosis since there are residual beta cells at this early point in the disease progression.

We intend to enter into an SRA with UCD for the benefit of the laboratory of Dr. Charles Dinarello, and we estimate this agreement to be for approximately $975,000 over the expected three year duration of the study. At the present time, we believe that this SRA will focus on research for advancing and developing treatments of graft versus host disease (“GVHD”). GVHD occurs in a bone marrow transplant involving a donor and a recipient. Bone marrow transplantation is indicated for late stage cancer patients who have failed alternative therapies. Bone marrow is the soft tissue inside bones that helps form blood cells that are responsible for immune response. A donor other than an identical twin is normally a close, but not exact match to a recipient’s bone marrow. Differences between the donor and recipient’s bone marrow can cause T cells (a type of white blood cell) to attack the recipients body due to the foreign marrow being recognized as foreign substance by the T cells. Acute GVHD starts within the first three months of after transplantation, while chronic GVHD starts three months after transplantation. GVHD can last three years or longer.

Once a recipient has received a bone marrow transplant the recipient normally takes drugs that suppress the immune system, which helps reduce the severity or risk of incurring GVHD. Acute symptoms of GVHD can include abdominal pain and cramps, diarrhea, fever, jaundice, skin rash, vomiting and weight loss. Chronic symptoms can include dry eyes and mouth, hair loss, hepatitis, lung and digestive tract disorders and skin rash. Increased rates of infection due to immune system suppression can be commonplace.

Complications can include severe damage to the liver, lung or digestive tract, severe infection and severe lung disease. Some of these complications can lead to death. Mortality rates from GVHD depend on the degree of severity. Patients with no response to or progression can have mortality rates as high as 75% compared to 20-25% in those with a complete response. The overall survival rate is approximately 40-45%.

OTHER AAT INDICATIONS

Anthrax

The U.S. government in recent years has established a number of government programs including the Project Bioshield Act of 2004, which have provided funds to companies that are pursuing promising technologies for the prevention of or treatment of bio-hazard related diseases, including anthrax.

Our original plans to pursue a commercial application for an anthrax treatment utilizing AAT have been deferred due to our belief that our potential treatment for immunological diseases such as Type 1 or Type 2 diabetes or other broad spread infectious diseases, such as non-biohazard bacterial infection or viral infection, have a substantially greater opportunity of obtaining the requisite funding necessary to obtain regulatory approval. We are continuing to investigate options for governmental funding programs in the U.S. and in Europe, but have reduced our emphasis in this area commensurate with our belief that funding for biohazard programs in general has been reduced as a result of the current economic climate in both the U.S. and Europe.

Bacterial Pneumonia

Bacterial pneumonia in ICU’s is often caused by a class of organisms called gram-negative rods and account for a sizable percent of ICU-related deaths. These infections are challenging to treat because patients in the ICU are already weakened by serious underlying disease. Also, these gram-negative organisms are often resistant to the antibiotics used to treat these infections.

Our technology may be used to treat gram-negative rod pneumonias, and this approach has important advantages compared to standard antibiotic use. These advantages include the reduced possibility of bacterial mutation-induced resistance to this technology’s agents. Based in part on the mechanism of activity of this technology, we believe that a drug based on this concept would best work as a prophylactic agent that blocks the onset of pneumonia. It is less likely that this approach can be used as a treatment for bacterial pneumonia after infection has occurred. More research is needed, however, to investigate the possibility of benefit after pneumonia has occurred.

Mycobacterium Tuberculosis and Mycobacterium Avium Complex

Infection with tuberculosis (“TB”) is a global concern. According to the World Health Organization, in 2005, approximately one-third of the world population was infected with this organism and 1,600,000 worldwide deaths resulted from TB. The current antimicrobial agents used to treat TB must be administered for a prolonged period of time, in the range of 6 to 18 months. One growing concern is the detection of multi-drug resistant strains of TB that are difficult to treat with available anti-TB drugs and are on the rise. Some of these resistant strains of TB are all but incurable using currently available antibiotics. Our approach to TB treatment will be to use a different focus on alternative treatments than are currently available. It is possible that therapy based on our technology is impervious to mutated forms of TB, such as the multi-drug resistant strains of TB, because the targets that this potential technology therapy affects are part of the host and not part of the mycobacterium tuberculosis organism. Therefore, the target that the potential therapy treats does not change relative to the type of organism a patient is infected with and therapeutic effectiveness should not diminish.

Researchers at UCD have conducted numerous laboratory studies that support an anti-mycobacterial effect of this potential therapy. These studies have included investigation of the several molecules that are responsible for TB containment. The UCD researchers have demonstrated in laboratory testing that AAT blocks TB infection of human cells. This has been substantiated using at least two independent infection systems. Furthermore, the UCD researchers have replicated these successful studies using rapidly-growing mycobacteria (“RGM”) organisms that are related to TB.

Animal testing of this technology has been initiated through a study which was conducted at Colorado State University and funded by us, and these models can be used to demonstrate efficacy of a therapeutic against tuberculosis. We have used an animal model for our initial studies and these studies have had success in demonstrating efficacy of the potential therapeutic against tuberculosis. However, there is no proof that the potential therapy against TB and other mycobacterial will work in humans. Since we will not manufacture our own clinical therapeutic candidate (a drug has been utilized that is sold by a large biopharmaceutical company), it will be necessary to purchase candidate drugs from a manufacturer. Alternatively, this potential therapy could be licensed for its method of use to a manufacturer in exchange for royalties and additional compensation.

As stated earlier, there are three large pharmaceutical companies that manufacture approved AAT candidates, and at least two more AAT compositions are nearing approval in humans. An alternative isolated human form of AAT is currently under development by Kamada (Israel) and a recombinant form of AAT is under development by Arriva Pharmaceuticals, Inc. (CA). Preliminary information regarding these molecules indicates that they may lead to an improved form of AAT for potential use in our treatments of disease indications. In addition, the development of these molecules may allow for AAT to be delivered to patients by an alternative route, allow for improved dose ranges, and allow us to obtain AAT at a more favorable cost. Because TB is primarily a disease that affects the lungs, the capacity to deliver this agent in an aerosol form would permit high concentrations at the site where it is most needed.

On May 9, 2010, Kamada announced that it expects to receive FDA approval for its treatment of AAT deficiency in early July 2010.

RAW MATERIALS

We believe that raw materials and other supplies required in our business are generally available from various suppliers in quantities adequate to meet our needs. Potential suppliers of AAT include the following: Aralast NP^® from Baxter Biotherapeutics; Prolastin^® from Talecris Biotherapeutics, and Zemaira^® from CSL Behring USA, all of which are currently FDA approved and used for treatment of emphysema among individuals with genetic deficiency of AAT.

In March 2010, Omni and Baxter Healthcare Corporation (“Baxter”) executed a Material Transfer Agreement (the “Material Transfer Agreement”) whereby Baxter agreed to supply, at no cost, 1.25 kg of Aralast NP^TM, with a commercial value of $420,000 (the “Materials”), to Omni for use in the Clinical Trial described above. Omni warrants that the Clinical Trial will be conducted under either a waiver to an Investigational New Drug Application or an Investigational New Drug Application (“IND”) filed with the United States Food and Drug Administration (“FDA”) by Omni. Under the Material Transfer Agreement, Omni is responsible to maintain the IND and comply with all reporting and other obligations associated with the IND. The Material Transfer Agreement will terminate upon completion of the Clinical Trial unless Omni and Baxter mutually agree in writing to extend its term. The Material Transfer Agreement may be terminated by either party (i) upon a material breach of the Material Transfer Agreement, or (2) in the event of an Adverse Event (as defined in the Material Transfer Agreement) that warrants termination of the Clinical Trial. Omni is required to prepare for Baxter a summary of the information and results generated by the Clinical Trial upon its completion.

COMMERCIALIZATION AND COMPETITION

We plan to sub-contract to, or co-venture with companies that possess the infrastructure, expertise and large scale marketing capability to properly handle commercialization. The current exception to this plan would be to retain the direct marketing of drug products internally, where the prospective purchaser is the U.S. government or a federal agency. Marketing to the U.S. government as well as to other countries’ centralized purchasing departments would require marketing personnel.

We face intense competition from a wide range of pharmaceutical and biotechnology companies, as well as academic and research institutions and government agencies. Some of these competitors have substantially greater financial, marketing, research and development and human resources. Most large pharmaceutical companies have considerably more experience in undertaking clinical trials and in obtaining regulatory approval to market pharmaceutical products.

Principal competitive factors in our industry include:

•

the quality and breadth of an organization’s technology, research and development capabilities;

•

an organization’s intellectual property;

•

the skill of an organization’s employees and its ability to recruit and retain skilled employees;

•

an organization’s intellectual property;

•

the range of capabilities, from target identification and validation to drug discovery and development to manufacturing and marketing; and

•

the availability of substantial capital resources to fund discovery, development and commercialization activities.

We believe that the quality and breadth of our technology platform, our patent portfolio, and our capabilities for research and drug development are competitive strengths. However, many large pharmaceutical and biotechnology companies have significantly larger intellectual property portfolios, substantially more capital resources and significantly more experience than we do in preclinical and clinical development, sales, marketing, manufacturing and regulatory affairs.

We are aware of products in research or development by our competitors that address all of the diseases we are targeting, and any of these products may compete with our product candidates. Our competitors may succeed in developing their products before we do, obtaining approvals from the FDA or other regulatory agencies for their products more rapidly than we do, or developing products that are more effective than our products. These products or technologies might render our technology obsolete or noncompetitive. Competition is based primarily on product efficacy, safety, timing and scope of regulatory approvals, availability of supply, price, marketing and sales capability, reimbursement coverage and patent position.

GOVERNMENT REGULATION

Regulations in the U.S. and other countries will have a significant impact on our research, product development and manufacturing activities and will be a significant factor in the marketing of our products. All of our products will require regulatory approval prior to commercialization. In particular, our products will be subject to rigorous preclinical and clinical testing and other pre-market approval requirements by the FDA and similar regulatory authorities in other countries. Various statutes and regulations also govern or influence the manufacturing, practice, safety, labeling, storage, record keeping and marketing of our products. The lengthy process of seeking these approvals and the subsequent compliance with applicable statutes and regulations will require the expenditure of substantial resources. Any failure by us to obtain, or any delay in obtaining, regulatory approvals could materially adversely affect our ability to commercialize our products in a timely manner, or at all.

Preclinical Testing. Before a drug may be clinically tested in the U.S., it must be the subject of rigorous preclinical testing. Preclinical tests include laboratory evaluation of product chemistry and animal studies to assess the potential safety and efficacy of the product and its formulations. The results of these studies must be submitted to the FDA as part of an investigational new drug application, which is reviewed by the FDA before clinical testing in humans can begin.

Clinical Testing. Typically, clinical testing involves a three-phase process, which generally lasts four to seven years, and sometimes longer:

•

Phase 1 clinical trials are conducted with a small number of subjects to determine the early safety profile and the pattern of drug distribution and metabolism.

•

Phase 2 clinical trials are conducted with groups of patients afflicted with a specified disease in order to provide enough data to evaluate preliminary efficacy and optimal dosages statistically and to expand evidence of safety.

•

Phase 3 clinical trials are large-scale, multi-center, comparative trials, which are designed to gather additional information for proper dosage and labeling of the drug and to demonstrate its overall safety and efficacy.

The FDA monitors the progress of each phase of testing and may require the modification, suspension or termination of a trial if it is determined to present excessive risks to patients. The clinical trial process may be accompanied by substantial delay and expense, and there can be no assurance that the data generated in these studies will ultimately be sufficient for marketing approval by the FDA.

Marketing Approvals. Before a product can be marketed and sold, the results of the preclinical and clinical testing must be submitted to the FDA for approval. This submission will be either a new drug application or a biologic license application, depending on the type of drug. In responding to a new drug application or a biologic license application, the FDA may grant marketing approval, request additional information or deny the application if it determines that the application does not provide an adequate basis for approval. There can be no assurance that any approval required by the FDA will be obtained on a timely basis, or at all.

In addition, the FDA may condition marketing approval on the conduct of specific post-marketing studies to further evaluate safety and efficacy. Rigorous and extensive FDA regulation of pharmaceutical products continues after approval, particularly with respect to compliance with current good manufacturing practices, reporting of adverse effects, advertising, promotion and marketing. Discovery of previously unknown problems or failure to comply with the applicable regulatory requirements may result in restrictions on the marketing of a product or withdrawal of the product from the market as well as possible civil or criminal sanctions, any of which could materially adversely affect our business.

Foreign Regulation. We must obtain regulatory approval by governmental agencies in other countries prior to commercialization of our products in those countries. Foreign regulatory systems may be just as rigorous, costly and uncertain as in the U.S.

Possible Pricing Restrictions. The levels of revenues and profitability of biopharmaceutical companies may be affected by the continuing efforts of government and third party payers to contain or reduce the costs of health care through various means. For example, in certain foreign markets, pricing or profitability of therapeutic and other pharmaceutical products is subject to governmental control. In the U.S. there have been, and we expect that there will continue to be, a number of federal and state proposals to implement similar governmental control.

While we cannot predict whether any legislative or regulatory proposals will be adopted, the adoption of such proposals could have a material adverse effect on our business, financial condition and profitability. In addition, in the U.S. and elsewhere, sales of therapeutic and other pharmaceutical products depend in part on the availability of reimbursement to the consumer from third party payors, such as government and private insurance plans. Third party payors are increasingly challenging the prices charged for medical products and services. There can be no assurance that any of our products will be considered cost effective or that reimbursement to the consumer will be available or will be sufficient to allow us to sell our products on a competitive and profitable basis.

MANUFACTURING

All of our potential pharmaceuticals are still in preclinical development and at this time we do not have, and do not intend to establish, manufacturing facilities to produce our product candidates in the near or long-term. We have identified several possible manufacturers, but have not concluded any agreements with them.

BACKLOG

Since inception, we have not recognized any revenue and have no products for sale. Accordingly, we had no customer backlog as of March 31, 2010 and March 31, 2009.

EMPLOYEES

As of March 31, 2010, we had two employees and a consulting arrangement with our Acting Chief Executive Officer.

ENVIRONMENTAL COMPLIANCE

We do not expect environmental laws to have any material impact on us.

HOW TO OBTAIN OUR SEC FILINGS

We file annual, quarterly, and special reports, proxy statements, and other information with the SEC. Reports, proxy statements and other information filed with the SEC can be inspected and copied at the public reference facilities of the SEC at 100 F Street N.E., Washington, DC 20549. Such material may also be accessed electronically by means of the SEC’s website at www.sec.gov.

Our investor relations department can be contacted at our principal executive office located at 5350 South Roslyn, Suite 430, Greenwood Village, CO 80111. Our phone number at our headquarters is (303) 867-3415 and our website is www.omnibiopharma.com.

ITEM 1A.		RISK FACTORS.

Our short and long-term success is subject to many factors beyond our control. If any of the following risks, as well as any risks described elsewhere in this Form 10-K, actually occur, our business, financial condition or results of operations could suffer. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

FINANCIAL AND MARKET RISKS

Since inception, we have not had any revenue and have incurred operating losses, and our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern.

As a development-stage company, we have no operating history and have not commercialized any products or generated any revenue since our inception. We have incurred losses in each year since our inception. Our net losses were $5.0 million, $4.5 million and $1.8 million in the fiscal years ended March 31, 2010, 2009 and 2008, respectively, and as of March 31, 2010, we had an accumulated deficit of $12.5 million. As a result of these factors, for the fiscal years ended March 31, 2010, 2009 and 2008, our independent registered public accounting firm has issued qualified reports on our financial statements and have expressed substantial doubt about our ability to continue as a going concern. Provided that sufficient funding is available, we expect to continue to incur significant operating losses in the foreseeable future, as we continue our research activities, conduct the development of, and seek regulatory approvals for, our product candidates. The likelihood of our success must be considered in light of the expenses, difficulties and delays frequently encountered in connection with development-stage companies and the competitive environment of the biotechnology industry. There can be no assurance that we will be able to develop a revenue source or that our operations will become profitable.

To pursue our current business strategy and continue developing our products, we will need substantial additional funding in the future. If we do not obtain this funding on acceptable terms, we may not be able to continue our business and generate enough revenue to recover our investment in our product development efforts.

We have expended, and will continue to expend, substantial funds to continue our research and development programs and human studies. To date, we have financed our research and development efforts through the issuance of equity securities. We will need additional financing to fund our operating expenses and capital requirements. We may not be able to obtain additional financing on acceptable terms, or at all. If we are able to raise additional funds by issuing equity securities or equity-linked securities, the new equity securities may dilute the interests of our existing stockholders. Debt financing, if available, may involve agreements containing covenants limiting or restricting our ability to take certain actions, including incurring additional debt, making capital expenditures or declaring dividends.

Our future capital requirements will depend on many factors, including, without limitation:

•

the amount of revenue or cost sharing, if any, that we are able to obtain from others, any approved products, and the time and costs required to achieve those revenues;

•

the timing, scope and results of preclinical studies and clinical trials;

•

the size and complexity of our development programs;

•

the time and costs involved in obtaining regulatory approvals;

•

the costs of launching our products;

•

the costs of commercializing our products, including marketing, promotional, sales and distribution costs;

•

our ability to establish and maintain collaboration partnerships;

•

competing technological and market developments;

•

the costs involved in filing, prosecuting and enforcing patent claims; and

•

scientific progress in our research and development programs.

If we are unable to raise additional funds, we may, among other things:

•

delay, scale back or eliminate some or all of our research and development programs;

•

delay, scale back or eliminate some or all of our commercialization activities;

•

lose rights under existing licenses;

•

relinquish more of, or all of, our rights to product candidates on less favorable terms than we would otherwise seek; and

•

be unable to operate as a going concern.

Our business and results of operations may be negatively impacted by general economic and financial market conditions and such conditions may exacerbate the other risks that affect our business.

The world’s financial markets are currently experiencing significant turmoil, resulting in reductions in available credit, constraints in access to capital, extreme volatility in security prices, rating downgrades of investments and reduced valuations of securities generally. These economic conditions have had, and we expect will continue to have, an adverse impact on the pharmaceutical and biotechnology industries. Our business depends on our ability to raise substantial additional capital and to enter into collaborative research, development and commercialization agreements. Current market conditions could impair our ability to raise additional capital when needed for our research and development programs, or on attractive terms. Recent economic conditions may reduce the amount of discretionary investment that our prospective collaborators may have available to invest in our business. This may result in prospective collaborators electing to defer entering into collaborative agreements with us. A reduction in research and development funding, even if economic conditions improve, would significantly adversely impact our business, operating results and financial condition.

We are unable to predict the likely duration and severity of the current disruption in financial markets and adverse economic conditions in the U.S. and abroad, but the longer the duration the greater risks we face in operating our business. There can be no assurance, therefore, that current economic conditions or worsening economic conditions or a prolonged or recurring recession will not have a significant adverse impact on our operating results.

Our insurance policies are expensive and may not protect us from all business risks, which may leave us exposed to significant, uninsured liabilities.

We carry insurance based on management’s and our Board’s assessment of related risk that our business may encounter. Currently, we believe overall coverage to be adequate based on the development stage of the Company. Our lack of liquidity generally requires us to pay higher than average premiums for certain insurance coverages. In addition, such coverages contain deductibles that we consider significant to our cash available for operations. In the future, we do not know if we will be able to obtain insurance with adequate levels of coverage or, if available, able to afford the premiums. Any significant uninsured liability may require us to pay substantial amounts, which would adversely affect our cash position and results of operations.

Certain accounting judgments made by our management may prove to be incorrect.

Under accounting principles generally accepted in the United States of America (“US GAAP”), we are required to estimate the fair value of warrants granted as share-based compensation, which include warrants issued to our officers, directors and consultants. Share-based compensation is reported in our financial statements under general and administrative expenses. The Financial Accounting Standards Board’s pronouncement, ASC Topic 820 Fair Value Measurements and Disclosures (“ASC Topic 820”), defines fair value and establishes a framework for measuring fair value. Because our common stock is not actively traded as defined under ASC Topic 820, the valuation of these warrant grants requires significant judgment by our management. The SEC is currently reviewing our fair value determinations through the SEC’s comment letter process. If the SEC takes exception to our fair value determinations, we may be required to restate the share-based compensation as reported in our financial statements.

PRODUCT DEVELOPMENT AND COMMERCIALIZATION RISKS

Our product development efforts depend on the development of novel compositions and new methods of use for existing drugs, which have not been commercialized.

Our product development work depends on our development of novel compositions and new methods of use for existing drugs and on the marketability, commercialization and profitability of such products. Commercialization involves risks of failure inherent in the development of products based on innovative technologies and the risks associated with drug development generally. These risks include the following:

•

These technologies or any or all of the products based on these technologies may be ineffective or toxic, or otherwise fail to receive necessary regulatory clearances;

•

The products, even if safe and effective, may be difficult to manufacture on a large scale or uneconomical to market;

•

Proprietary rights of third parties may prevent us from exploiting technologies or marketing products; and

•

Third parties may market superior or equivalent products.

We have limited experience in developing and commercializing products.

Our ability to develop and commercialize products will depend on our ability to:

•

develop products;

•

complete laboratory testing and human studies;

•

obtain and maintain necessary intellectual property rights to our products;

•

obtain and maintain necessary regulatory approvals related to the efficacy and safety of our products;

•

enter into arrangements with third parties to manufacture our products on our behalf; and

•

deploy sales and marketing resources effectively or enter into arrangements with third parties to provide these functions.

We may not be successful in some or all of these initiatives, and as a result, fail to produce adequate or any revenues to sustain our business.

Because clinical trials for our products are expensive and protracted and their outcome is uncertain, we will have to invest substantial amounts of time and money that may not yield viable products.

Conducting clinical trials is a lengthy, time-consuming and expensive process. Before obtaining regulatory approvals for the commercial sale of any product, we must demonstrate through laboratory, animal and human studies that the product is both effective and safe for use in humans. We will incur substantial additional expense for and devote a significant amount of time to these studies.

Before a drug may be marketed in the U.S., a drug must be subject to rigorous preclinical testing. The results of these studies must be submitted to the FDA as part of an investigational new drug application, which is reviewed by the FDA before clinical testing in humans can begin. The results of preclinical studies do not predict clinical success. A number of potential drugs have shown promising results in early testing, but subsequently failed to obtain necessary regulatory approvals. Data obtained from tests is susceptible to varying interpretations, which may delay, limit or prevent regulatory approval. Regulatory authorities may refuse or delay approval as a result of many other factors, including changes in regulatory policy during the period of product development.

Completion of clinical trials may take many years. The time required varies substantially according to the type, complexity, novelty and intended use of the product candidate. The progress of clinical trials is monitored by both the FDA and independent data monitoring committees, which may require the modification, suspension or termination of a trial if it is determined to present excessive risks to patients. Our rate of commencement and completion of clinical trials may be delayed by many factors, including:

•

our inability to manufacture sufficient quantities of materials for use in clinical trials;

•

variability in the number and types of patients available for each study;

•

difficulty in maintaining contact with patients after treatment, resulting in incomplete data;

•

unforeseen safety issues or side effects;

•

poor or unanticipated effectiveness of products during the clinical trials; or

•

government or regulatory delays.

Our product development costs will also increase if we experience delays in testing or approvals. We do not know whether planned clinical trials will begin as planned, will need to be restructured or will be completed on schedule, if at all. Significant clinical trial delays also could allow our competitors to bring products to market before we do and impair our ability to commercialize our products or product candidates.

Because we will depend on third parties to conduct our human studies, we may encounter delays in, or lose some control over, our efforts to develop products.

We do not have the ability to independently conduct the clinical trials required to obtain regulatory approval for our products. We expect to contract with third-party research organizations to conduct all of our human studies. If we are unable to obtain necessary services on acceptable terms or at all, we may not complete our product development efforts in a timely manner.

Because we will rely on third parties for successful execution of our clinical trials, we will not be able to control many aspects of their activities. We will, however, remain responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan and protocols for the trial, and the FDA requires us to comply with certain standards, commonly referred to as Good Clinical Practices, for conducting and recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected. Our reliance on third parties that we do not control will not relieve us of these responsibilities and requirements. Third parties may not complete activities on schedule, or may not conduct our clinical trials in accordance with regulatory requirements or our stated protocols. The failure of these third parties to carry out their obligations could delay or prevent the development, approval and commercialization of our product candidates.

Our business and products may subject us to the risk of product liability claims.

We face an inherent risk of product liability exposure related to the testing of our product candidates in human clinical trials and will face increased risk if we commercially sell any products that we develop. There can be no assurance that any insurance coverage that we obtain with respect to product liability will be adequate to protect us from liabilities that we might incur in connection with clinical trials or the commercialization of our products. Product liability insurance is expensive and may not be available on acceptable terms, or at all. Successful product liability claims brought against us in excess of our insurance coverage would have a material adverse effect on our business. In addition, product liability claims, whether or not successful, may result in decreased demand for our products, injury to our reputation, withdrawal of clinical trial participants, defense costs and difficulty commercializing our product candidates.

We depend on, and will continue to depend on, collaboration with and licenses from third parties, and if we are not able to enter into and/or continue such collaborations or licenses, we may not be able to further develop our products without substantial additional expenditures and delays, if at all.

In addition to maintaining our collaborative relationship with UCD, our strategy for the development, clinical testing, manufacturing and commercialization of our proposed products includes entering into various collaborations with corporate partners, licensors, licensees and other third parties in the future, and is dependent on the subsequent success of these third parties in performing their responsibilities. We intend to seek to enter into additional arrangements with other collaborators, although there can be no assurance that we will be able to enter into such collaborations and licenses, or, to the extent that we do, that such collaborations will be successful. Further, there can be no assurance that any future arrangements we may enter into will lead to the development of our products with commercial potential, that we will be able to obtain proprietary rights or licenses for proprietary rights with respect to any technology developed in connection with these arrangements or that we will be able to insure the confidentiality of any proprietary rights and information developed in such collaborative arrangements or prevent the public disclosure thereof.

In general, collaborative agreements provide that they may be terminated under certain circumstances. There can be no assurance that we will be able to extend any of our product collaborative agreements on their termination or expiration, or that we will be able to enter into new collaborative agreements with existing or new partners in the future. To the extent we choose not to or are unable to establish any additional collaborative arrangements, it would require substantially greater capital to undertake research, development and marketing of our proposed products into certain markets or find that the development, manufacture or sale of our proposed products in such markets is adversely affected by the absence of such collaborative agreements.

We will depend on others to manufacture our products, and we may be unable to fully control the supply of our products to the market.

We have not yet manufactured any products for commercial use. We intend to contract with third party manufacturers to obtain manufacturing capabilities. Our ability to manufacture and supply our future products will depend on our ability to enter into and maintain acceptable collaborative arrangements with such third parties, and we will depend on those parties to comply with acceptable manufacturing practices and other regulatory requirements and to deliver materials on a timely basis. These parties may not perform satisfactorily. There can be no assurance that such parties will be able to supply our products in the required quantities, in compliance with our quality standards or at acceptable costs. Any product defects or production delays caused by such third party manufacturers may delay our development of products, the submission of the products for regulatory approval and the marketability of such products.

Because we currently have only a limited marketing capability, we may be unable to sell any of our products effectively.

Since inception, we have not marketed any products. If we develop products that can be marketed, we intend to market the products either independently or together with collaborators or strategic partners. If we decide to market any products, either independently or together with partners, we will incur significant additional expenditures and commit significant additional management resources to establish a sales force. For any products that we market together with partners, we will rely, in whole or in part, on the marketing capabilities of those parties. We may also contract with third parties to market certain of our products. Ultimately, we and our partners may not be successful in marketing our products.

The commercial success of any products that we may develop will depend upon the degree of market acceptance by physicians, patients, healthcare payors and others in the medical community.

Any products that we bring to the market may not gain market acceptance by physicians, patients, healthcare payors and others in the medical community. If these products do not achieve an adequate level of acceptance, we may not generate material product revenues and we may not become profitable. The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including:

•

the prevalence and severity of any side effects;

•

the efficacy and potential advantages of alternative treatments;

•

the prices of our product candidates;

•

the willingness of physicians to prescribe our products; and

•

sufficient third-party coverage or reimbursement.

If we are not successful in commercializing our products that have been approved for commercial sale, we may be unable to recover the large investment we have made and plan to make in research and development efforts.

INTELLECTUAL PROPERTY RISKS

If patent laws or the interpretation of patent laws change, our competitors may be able to develop and commercialize our discoveries.

Important legal issues remain to be resolved as to the extent and scope of available patent protection for biotechnology products and processes in the U.S. and other important markets outside the U.S., such as Europe and Japan. Foreign markets may not provide the same level of patent protection as provided under the U.S. patent system. We expect that litigation or administrative proceedings may be necessary to determine the validity and scope of certain of our and others’ proprietary rights. Any such litigation or proceeding may result in a significant commitment of resources in the future and could force us to do one or more of the following: cease selling or using any of our products that incorporate the challenged intellectual property, which would adversely affect our revenue; obtain a license from the holder of the intellectual property right alleged to have been infringed, which license may not be available on reasonable terms, if at all; and redesign our products to avoid infringing the intellectual property rights of third parties, which may be time-consuming or impossible to do. In addition, changes in, or different interpretations of, patent laws in the U.S. and other countries may result in patent laws that allow others to use our discoveries or develop and commercialize our products. We cannot assure you that the patents we obtain or the unpatented technology we hold will afford us significant commercial protection.

If the patent applications for which we have obtained a license do not result in issued patents, our competitors may obtain rights to and commercialize the discoveries.

The pending patent applications for which we have obtained licenses may not result in the issuance of any patents. The applications may not be sufficient to meet the statutory requirements for patentability in all cases or may be the subject of interference proceedings by the Patent and Trademark Office. These proceedings determine the priority of inventions and, thus, the right to a patent for technology in the U.S.

If others file patent applications or obtain patents similar to those we have licensed, such patents may restrict the use of our discoveries.

Universities and companies working in the biotechnology and pharmaceutical fields have filed patent applications and have been granted patents in the U.S. and in other countries that cover subject matter potentially useful or necessary to our business. Some of these patents and patent applications claim only specific products or methods of making products, while others claim more general processes or techniques useful in the discovery and manufacture of a variety of products. The risk of third parties obtaining additional patents and filing patent applications will continue to increase as the biotechnology industry expands. We cannot predict the ultimate scope and validity of existing patents and patents that may be granted to third parties, nor can we predict the extent to which we may wish or be required to obtain licenses to such patents, or the availability and cost of acquiring such licenses. To the extent that licenses are required, the owners of the patents could bring legal actions against us to claim damages or to stop our manufacturing and marketing of the affected products. We believe that there will continue to be significant litigation in our industry regarding patent and other intellectual property rights. If we become involved in litigation, it could consume a substantial portion of our resources.

Because issued patents may not fully protect our discoveries, our competitors may be able to commercialize products similar to those covered by issued patents that we have obtained a license.

Issued patents may not provide commercially meaningful protection against competitors and may not provide us with competitive advantages. Other parties may challenge the patents or design around the issued patents or develop products providing effects similar to the products for which we have obtained a license. In addition, others may discover uses for the technologies other than those uses covered by the patent rights we license, and these other uses may be separately patentable. The holder of a patent covering the use of a technology for which we have a patent claim could exclude us from selling a product for a use covered by its patent.

If we are unable to protect our trade secrets, others may be able to use our secrets to compete more effectively.

We may not be able to meaningfully protect our trade secrets. We rely on trade secret protection to protect our confidential and proprietary information. We believe we have acquired or developed proprietary procedures and materials for the production of proteins. We have not sought patent protection for these procedures. While we have entered into confidentiality agreements with employees and academic collaborators, we may not be able to prevent their disclosure of these data or materials. Others may independently develop substantially equivalent information and processes.

If we lose our right to license and use of certain critical intellectual property from UCD for any reason, our business would be in jeopardy.

If we breach or fail to perform the material conditions of, including our payment obligations under, or fail to extend the term of the agreements under which we license critical intellectual property from UCD, we may lose all or some of our rights to such intellectual property, and such loss would have a material adverse effect on our business. If we lost our rights to such intellectual property, we would need to find existing alternative, non-infringing technology, if any exists, or develop new technology ourselves. The pursuit of any such alternative would cause significant delay in the development and commercialization of our proposed products.

We may rely on patents and proprietary rights that may fail to protect our business.

Although we have obtained licenses to use the rights under certain patent applications that have been filed with the USPTO, we may not be able to obtain the protection necessary to fully cover our proposed activities. Our success will also depend on our ability to operate without infringing the proprietary rights of other parties. Legal standards relating to the validity of patents covering pharmaceutical and biotechnological inventions and the scope of claims made under these patents are still developing. There is no consistent policy regarding the breadth of claims allowed in biotechnology patents. The patent position of a biotechnology company is susceptible to uncertainty and involves complex legal and factual questions.

We are aware of three major manufacturers of AAT in the United States for other applications. It is possible that those manufacturers would attempt to sell that therapeutic agent for purposes covered by the rights licensed to us.

We may have to initiate arbitration or litigation to enforce our patent and license rights. If our competitors file patent applications that claim technology also claimed by us, we may have to participate in interference or opposition proceedings to determine the priority of invention. An adverse outcome could subject us to significant liabilities to third parties and require us to cease using the technology or to license the disputed rights from third parties. We may not be able to obtain any required licenses on commercially acceptable terms or at all.

The cost to us of any litigation or proceeding relating to patent rights, even if resolved in our favor, could be substantial. Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because of their substantially greater resources. Uncertainties resulting from the initiation and continuation of any pending patent or related litigation could have a material adverse effect on our ability to compete in the marketplace. If we are unable to obtain a license to patented technology we need, or could only obtain a license on terms we consider to be unacceptable, or if we were unable to design our products or processes to avoid infringement of such patented technology, our business would be harmed.

REGULATORY RISKS

Because we are subject to extensive changing government regulatory requirements, we may be unable to obtain government approval of our products in a timely manner or at all.

Regulations in the U.S. and other countries will have a significant impact on our research, product development and manufacturing activities and will be a significant factor in the marketing of our products. All of our products will require regulatory approval prior to commercialization. In particular, our products are subject to rigorous preclinical and clinical testing and other pre-market approval requirements by the FDA and similar regulatory authorities in other countries, such as Europe and Japan. Various statutes and regulations also govern or influence the manufacturing, safety, labeling, storage, record keeping and marketing of our products. The lengthy process of seeking these approvals, and the subsequent compliance with applicable statutes and regulations, require the expenditure of substantial resources. Changes in regulatory approval policies during the development period, changes in or the enactment of additional statutes and regulations, or changes in regulatory review for each product application may delay or prevent regulatory approval of an application. The FDA has substantial discretion in the approval process and may refuse to accept any application or may require additional preclinical, clinical or other studies. Any failure by us to obtain, or any delay in obtaining, regulatory approvals could materially adversely affect our ability to commercialize our products in a timely manner, or at all.

If we or our third-party manufacturers or suppliers fail to comply with ongoing FDA or other regulatory authority requirements, or if we experience unanticipated problems with our products, our products could be subject to restrictions or withdrawal from the market.

Rigorous and extensive regulation by the FDA and other domestic and foreign regulatory bodies continues after approval, particularly with respect to compliance with current good manufacturing practices, reporting of adverse effects, advertising, promotion and marketing. Particularly, we and our third-party manufacturers will be required to comply with the FDA’s regulations covering manufacturing, design, testing, production, control, quality assurance, labeling, packaging, storage and shipping of the products for which we obtain approval. These regulations are enforced through periodic inspections. Even if regulatory approval of a product is granted, the approval may be subject to limitations on the indicated uses for which the product may be marketed or contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the product. Discovery of previously unknown problems or failure to comply with the applicable regulatory requirements may result in restrictions on the marketing of a product or withdrawal of the product from the market as well as possible civil or criminal sanctions.

Failure to obtain regulatory approval in international jurisdictions would prevent us from marketing our products abroad.

We must obtain regulatory approval by governmental agencies in other countries prior to commercialization of our products in those countries. Foreign regulatory systems may be just as rigorous, costly and uncertain as in the U.S. and may require additional testing and review. The time required to obtain approval may be longer than that required to obtain FDA approval and may involve additional risks. Approval of our products by the FDA does not ensure approval by regulatory authorities in foreign jurisdictions, and approval by one foreign regulatory authority does not ensure approval by regulatory authorities in other foreign jurisdictions or the FDA. We may not obtain foreign regulatory approvals on a timely basis, if at all.

OTHER RISKS RELATED TO OUR BUSINESS

If we lose or are unable to attract key management or other personnel, we may experience delays in product development.

We are highly dependent on the services of our senior executive officers as well as other scientists and consultants, particularly, Dr. Charles Dinarello and Dr. Leland Shapiro. If either Dr. Dinarello or Dr. Shapiro decides to terminate his business relationship with us, this could delay the commercialization of our products or prevent us from becoming profitable. Competition for qualified individuals is intense among pharmaceutical and biotechnology companies, and the loss of qualified individuals, or an inability to attract, retain and motivate additional highly skilled individuals required for the expansion of our activities, could hinder our ability to complete human studies successfully and develop marketable products. Currently, we do not carry key-man life insurance policies on any of our key personnel.

If the health care system or reimbursement policies change, the prices of our potential products may be lower than expected and our potential sales may decline.

The levels of revenues and profitability of biopharmaceutical companies like ours may be affected by the continuing efforts of government and third party payers to contain or reduce the costs of health care through various means. For example, in certain foreign markets, pricing or profitability of therapeutic and other pharmaceutical products is subject to governmental control. In the U.S. there have been, and we expect that there will continue to be, a number of federal and state proposals to implement similar governmental control. In March 2010, President Obama signed into law the Patient Protection and Affordable Care Act. In addition, in the U.S., a number of proposals have been made to reduce the regulatory burden of follow-on biologics, which could affect the prices and sales of our products in the future. While we cannot predict whether any legislative or regulatory proposals will be adopted, the adoption of such proposals could have a material adverse effect on our business, financial condition and profitability. In addition, in the U.S. and elsewhere, sales of therapeutic and other pharmaceutical products depend in part on the availability of reimbursement to the consumer from third party payers, such as government and private insurance plans. Third party payors are increasingly challenging the prices charged for medical products and services. We cannot assure you that any of our products will be considered cost effective or that reimbursement to the consumer will be available or will be sufficient to allow us to sell our products on a competitive and profitable basis.

We may not be able to successfully compete against companies in our industry with greater resources or otherwise.

The development and commercialization of new drugs is highly competitive. We face competition with respect to our current product candidates and any products we may seek to develop or commercialize in the future from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide. Our competitors may develop products that are more effective, safer, more convenient or less costly than any that we are developing. Our competitors may also obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours.

There are approved products on the market for all of the diseases and indications for which we are developing products. In many cases, these products have well known brand names, are distributed by large pharmaceutical companies with substantial resources and have achieved widespread acceptance among physicians and patients. In addition, we are aware of product candidates of third parties that are in development, which, if approved, would compete against product candidates for which we receive marketing approval.

Many of our competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do. Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to or necessary for our programs or advantageous to our business.

Our articles of incorporation and bylaws could discourage acquisition proposals, delay a change in control or prevent other transactions.

Provisions of our articles of incorporation and bylaws, as well as provisions of the Colorado Business Corporation Act, may discourage, delay or prevent a change in control of our company or other transactions that you as a stockholder may consider favorable and may be in your best interest. Our articles of incorporation and bylaws contain provisions that:

•

authorize the issuance of up to 5,000,000 shares of “blank check” preferred stock that could be issued by our board of directors to increase the number of outstanding shares and discourage a takeover attempt; and

•

limit who may call special meetings of stockholders.

Our stock price is expected to be volatile.

The future market price of our common stock could fluctuate widely because of:

•

the minimal amount of “public float” in our stock, which is significantly affected by a substantial amount of our shares being ‘locked-up” from trading until March 31, 2011 and, in some instances, March 31, 2012;

•

our current stock transfer agent’s requirement for physical delivery of all transacted shares of our common stock, which may restrict their ability to be transferred as promptly as shares that are transacted through electronic transfer;

•

future announcements about our company or our competitors, including the results of testing; technological innovations or new commercial products;

•

negative regulatory actions with respect to our potential products or regulatory approvals with respect to our competitors’ products;

•

changes in government regulations;

•

changes in general economic conditions and in the biotechnology industry;

•

developments in our relationships with our partners;

•

developments affecting our partners;

•

announcements relating to health care reform and reimbursement levels for new drugs;

•

our failure to acquire or maintain proprietary rights to the gene sequences we discover or the products we develop;

•

litigation; and

•

public concern as to the safety of our products.

The stock market has experienced price and volume fluctuations that have particularly affected the market price for many emerging and biotechnology companies. These fluctuations have often been unrelated to the operating performance of these companies. These broad market fluctuations may cause the market price of our common stock to be lower or more volatile than otherwise expected.

The applicability of “penny stock rules” to broker-dealer sales of our common stock may have a negative effect on the liquidity and market price of our common stock.

Trading in our shares is subject to the “penny stock rules” adopted pursuant to Rule 15g-9 of the Securities and Exchange Act of 1934, as amended, which apply to companies that (i) are not listed on an exchange, (ii) may be listed in the “Pink Sheets” or the OTC Bulletin Board, (iii) have common stock priced under $5.00 per share, (iv) have a tangible net worth of less than $5,000,000 if they have been operating for less than three years or less than $2,000,000 if they have been operating for three or more years. The penny stock rules impose additional sales practice requirements on broker-dealers that sell such securities to persons other than established customers and institutional accredited investors. For transactions covered by this rule, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to sale. Broker-dealers must also comply with certain disclosure requirements prior to executing any transaction involving a penny stock. Consequently, the penny stock rules will affect the ability of broker-dealers to sell shares of our common stock and may affect the ability of shareholders to sell their shares in the secondary market, as compliance with such rules may delay and/or preclude certain trading transactions. The rules could also have an adverse effect on the market price of our common stock.

The disclosure requirements under the penny stock rules may have the effect of reducing the level of trading activity in the secondary market for our common stock. Many brokers may be unwilling to engage in transactions in our common stock because of the added disclosure requirements, thereby making it more difficult for stockholders to dispose of their shares. You will also find it difficult to obtain accurate information about, and/or quotations as to the price of our common stock.

The lack of a broker or dealer to create or maintain a market in our stock could adversely impact the price and liquidity of our securities.

We have no agreement with any broker or dealer to act as a market maker for our securities and there is no assurance that we will be successful in obtaining any market makers. The lack of a market maker for our securities could adversely influence the market for and price of our securities, as well as your ability to dispose of, or to obtain accurate information about, and/or quotations as to the price of, our securities.

ITEM 1B.		UNRESOLVED STAFF COMMENTS

As of the date hereof, we have no unresolved comments from the staff of the SEC that have been outstanding for more than 180 days. However, we are currently in the process of responding to comments from the staff of the SEC, including comments relating to the valuation of certain warrant grants to officers, directors and consultants that were made during the fiscal year ended March 31, 2010. See “Risk Factors” under “Financial and Market Risks.”

ITEM 2.		PROPERTIES.

We currently lease approximately 1,100 square feet for our corporate office. Our address is 5350 South Roslyn Street, Suite 430, Greenwood Village, CO 80111.

ITEM 3.		LEGAL PROCEEDINGS.

We are not a party to any material legal proceedings nor is our property the subject of any material legal proceedings.

PART II

ITEM 5.		MARKET FOR REGISTRANT’S COMMON EQUITY, AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Our common stock is currently traded on the Over the Counter Bulletin Board (the “OTCBB”) maintained by the Financial Industry Regulatory Authority under the symbol OMBP. Our common stock began trading on the OTCBB in December 2007. The following table sets forth the range of high and low bid quotations for our common stock during each calendar quarter beginning June 30, 2008 and ending March 31, 2010. The figures have been rounded to the nearest whole cent.

		High				Low
March 31, 2010		$	12.00			$	7.50
December 31, 2009		$	15.00			$	11.05
September 30, 2009		$	15.00			$	8.00
June 30, 2009		$	13.50			$	0.50
March 31, 2009		$	0.55			$	0.50
December 31, 2008		$	1.01			$	0.55
September 30, 2008		$	0.55			$	0.20
June 30, 2008		$	1.05			$	1.01

The above quotations reflect inter-dealer prices, without retail mark-up, mark-down, or commission and may not necessarily represent actual transactions.

Number of Shareholders of Record and Dividends

The number of shareholders of record of the Company’s issued and outstanding common stock as of June 15, 2010 was approximately 350. This number was derived from our stockholder records and does not include beneficial owners of our common stock whose shares are held in the names of various dealers, clearing agencies, banks, brokers, and other fiduciaries.

Holders of common stock are entitled to receive such dividends as may be declared by our Board of Directors. No dividends on the common stock were paid by us during the periods reported herein nor do we anticipate paying dividends in the foreseeable future.

Recent Sales of Unregistered Securities

In December 2009 and January 2010, we accepted subscription agreements related to the sale of Units in a private placement securities offering (the “Private Placement”) to accredited investors pursuant to section 4(2) of the Securities Act, as amended, and Rule 506 promulgated thereunder. Each “Private Placement Unit” was comprised of one share of our common stock and one warrant to purchase one share of our common stock for a purchase price of $2.50 per Private Placement Unit (the “Private Placement Warrants”). Each Private Placement Warrant is exercisable at $3.75 through December 29, 2014. We completed the Private Placement in multiple closings in December 2009 and January 2010 and completed the final closing on January 29, 2010 (the “Final Closing Date”). We sold 794,260 Private Placement Units and netted cash proceeds of $1,786,890, after deducting commissions and expenses paid to GVC, who served as the placement agent for the Private Placement and earned a commission of 8% plus a non-accountable expense allowance of 2% of the gross proceeds raised. In addition, we were obligated to sell for a nominal fee to GVC, as the placement agent, warrants to purchase 20% of the total number of Private Place Units sold in the Private Placement, 79,426 of which are exercisable at a price of $2.50 per share and 79,426 of which are exercisable at $3.75 per share (collectively, the “Private Placement PA Warrants”). The Private Placement PA Warrants expire five years from the Final Closing Date and are exercisable 180 days after the Final Closing Date. The sales and issuances of the securities described above were conducted pursuant to Section 4(2) of the Act and Rule 506 promulgated thereunder.

Warrant Exercises under Cashless Exercise Provisions

During the quarter ended March 31, 2010, certain investors exercised common stock purchase warrants under cashless exercise provisions. The following table represents the net shares surrendered in these cashless warrant exercises.

ISSUER PURCHASES OF EQUITY SECURITIES
														(d) Maximum Number
										(c) Total Number of				(or Approximate Dollar
										Shares (or Units)				Value) of Shares (or
		(a) Total Number				(b) Average Price				Purchased as Part of				Units) that May Yet Be
		of Shares (or Units)				Paid per Share (or				Publicly Announced				Purchased Under the
Period		Purchased				Unit)				Plans or Programs				Plans or Programs)
February 1 to February 28, 2010			7,040			$	12.50				—				—
March 1 to March 31, 2010			3,824			$	10.79				—				—
TOTAL			10,864			$	11.90				—				—

Performance Graph

The following performance graph compares the cumulative total return of our common stock with that of the NASDAQ Composite Index and the NASDAQ Biotechnology Index. Our stock was initially listed on the OTCBB on December 21, 2007, the date of formation of the Company and the date that our shares began to trade publicly. The graph assumes an investment of $100 on December 21, 2007 and reinvestments of all dividends and other distributions.

						For the Year Ended December 31,								For the Year Ended March 31,
		12/21/2007				2007				2008				3/31/09 (1)				3/31/10
Omni Bio Pharmaceutical, Inc.		$	100.00			$	100.00			$	44.00			$	40.00			$	808.00
NASDAQ Composite Index		$	100.00			$	98.52			$	58.58			$	56.78			$	89.08
NASDAQ Biotechnology Index		$	100.00			$	97.78			$	85.43			$	79.96			$	109.96

ITEM 6.		SELECTED FINANCIAL DATA.

The fiscal years ended March 31, 2010, 2009, and 2008 statements of operations data, and the fiscal years March 31, 2010 and 2009 balance sheet data, have been derived from our consolidated financial statements and notes appearing in Item 15 of this report. The statement of operations and balance sheet data for the fiscal year ended March 31, 2007 and for the period from February 28, 2006 (Inception) through March 31, 2006 have been derived from our historical financial statements for those years.

The financial statements for the fiscal years ended March 31, 2008 and 2007 and for the period from February 28, 2006 (Inception) through March 31, 2006 are those of the accounting predecessor, Apro Bio.

The following table should be read in conjunction with our consolidated financial statements and associated notes found in Item 15 of this report.

																		February 28,
																		2006 (Inception)
		Years Ended March 31,																through March
		2010				2009				2008				2007				31, 2006
Statements of Operations Data:
Net sales		$	—			$	—			$	—			$	—			$	—
Loss from operations (1)			(4,489,190	)			(1,992,983	)			(1,763,142	)			(1,095,154	)			(2,714	)
Net loss (1) (2)			(5,025,352	)			(4,544,521	)			(1,812,567	)			(1,100,674	)			(2,714	)
Net loss per share — basic and diluted			(0.19	)			(0.25	)			(0.16	)			(0.10	)			—
Balance Sheet Data:
Cash and cash equivalents			1,802,366				1,805,395				17,309				46,748				7,305
Total assets			1,880,378				1,901,717				65,702				70,446				7,305
Long-term debt			—				10,000				—				—				—

ITEM 7.		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

On March 31, 2009, Across America completed the acquisition of Apro Bio pursuant to the Merger. On May 27, 2009 Across America changed its name to Omni Bio Pharmaceutical, Inc. (“Omni”).

The Merger was accounted for as a reverse acquisition with Apro Bio being treated as the acquirer for accounting purposes. Accordingly, for all periods presented in this Report, the financial statements of Apro Bio have been adopted as the historical financial statements of Omni.

Except as the context otherwise requires, the terms “Company,” “we,” “our, “us” or “Omni,” means Omni and our wholly-owned subsidiary, Omni Bio Operating, Inc.

Overview

We are in pursuit of advancing existing and novel therapies that we believe have the potential to move through clinical trials quickly, shepherd them through the FDA approval processes and advance them through to commercialization. This core strategy is based on licensing issued and pending patent applications that cover new uses for an existing FDA-approved drug, Alpha-1 Antitrypsin (“AAT”), which has come off of its initial patents. AAT is currently used as a therapeutically effective treatment for a genetic deficiency and the treatment for a pulmonary disorder that is unrelated to our licensed intellectual property. Omni is the licensee of three patent portfolios from the University of Colorado Denver (“UCD”) (formerly known as the University of Health Sciences Center). These patent portfolios are comprised of 1 issued and 21 pending patent applications. In addition, we have received two notices of allowance related to filed applications.

With respect to the licensed technologies, we have licensed patent applications and patents related to methods of use for AAT and novel compositions of matter and their uses from UCD. We are currently focusing on four areas: bacterial disorders, viral disorders, complications due to graft rejection and diabetes. One license agreement from UCD relates to treating transplantation rejection. Transplantation rejection includes cellular and organ transplant rejection. One focus related to cellular transplantation is islet cell transplantation for the treatment of some diabetics and the treatment of diabetes in general. A second license agreement relates to the treatment and/or prevention of bacterial disorders, including bacterial pneumonia, tuberculosis and biowarfare agents such as anthrax. The third license agreement focuses on the treatment and/or prevention of viral disorders. With this third license, we have licensed a patent, United States Patent No. 6,849,605, Titled: Inhibitors of Serine Protease Activity, Methods and Compositions for Treatment of Viral Infections, which covers treatment of HIV. Additionally, we have licensed patent applications for the treatment of other viral-associated disorders such as epidemic influenza, including H1N1 related strains.

Other than the agreements with UCD, we have licensed and intend to pursue additional licenses to more thoroughly cover and commercialize a patent portfolio from Bio Holding, Inc. (“Bio Holding”), an entity affiliated with our Principal Investigator, Dr. Leland Shapiro. A component of these applications involves uses of AAT to treat a variety of indications related to the indications targeted by UCD.

Several companies currently sell products of the FDA-approved drug, AAT, for the treatment of genetic deficiency and the treatment for a pulmonary disorder (brand name in parenthesis): (i) Baxter Biotherapeutics (Aralast NP), (ii) CSL Behring USA (Zemaira), and (iii) Talecris Biotherapeutics, Inc.( Prolastin-C (R)). The UCD and Bio Holding licensed technologies focus on alternative uses of these commercially available products, including other forms of AAT and AAT derivatives related to treatment and/or prevention of bacterial disorders, viral disorders, cell rejection/graft rejection and diabetes.

To date, our business efforts have been largely dedicated in pursuing additional capital in order to fund Sponsored Research Agreements (“SRAs”) related to the licenses from UCD in effort to further research related to bacterial disorders, viral disorders and cellular transplantation/graft rejection and diabetes-related disorders, and to fund our recently approved clinical trial in Type 1 diabetes.

We intend to continue to outsource the normally capital intensive scientific research function to academic research institutions such as UCD. This can provide us with a specific scientific budget for funding each application, without the substantial cost of carrying-out basic research internally. Work contracted with UCD or other research institutions is expected to provide a contractually guaranteed work product, generally consisting of pre-clinical testing at predetermined costs, which increases the viability of our financial forecasting. With this approach, we expect to be able to work with each project’s lead scientists, overseeing patent application projects and closely managing our corporate overhead. This should allow most of our expenses to be concentrated on research and development efforts and prosecuting the patent applications we have licensed. Future research essential for developing these strategies will be conducted in accordance with our world-wide licensing rights and our existing and expected future SRAs with UCD.

Recent Developments

Clinical Trial on Type I Diabetes

In December 2009, we received the approval of a protocol related to a proposed trial of AAT on patients diagnosed with Type I diabetes from the regional Institutional Review Board (“IRB”) at a unit of UCD. Subsequent to this approval, we filed with the FDA an Investigational New Drug Application (“IND”) for the use of AAT on Type I diabetes and to sponsor a clinical trial. AAT has received prior FDA approval as a biological treatment of emphysema.

On June 7, 2010, Omni Bio Operating, Inc. (the “Sponsor”), a wholly-owned subsidiary of Omni, the Regents of the University of Colorado (the “Regents”) and The Barbara Davis Center (collectively with the Regents, the “Institution”), and Dr. Peter Gottlieb (the “Principal Investigator”) (the Institution and the Principal Investigator collectively referred to as the “Site”) entered into an Investigational Site Agreement (the “Agreement”), whereby the Institution, acting on behalf of the Sponsor, agreed to arrange, administer and manage a clinical study to evaluate Aralast NP^TM (an Alpha-1 antitrypsin product) in the treatment of patients with Type 1 diabetes (the “Clinical Trial”). The Clinical Trial is initially to include 15 patients. Base costs, which include the enrollment fee and other incidental charges, for the 15 patients will be approximately $725,000. Additional contingent costs could be as high as $100,000. Omni was required to make an initial deposit of $365,000 upon execution of the Agreement.

In March 2010, Omni and Baxter Healthcare Corporation (“Baxter”) executed a Material Transfer Agreement (the “Material Transfer Agreement”) whereby Baxter agreed to supply, at no cost, 1.25 kg of Aralast NP^TM, with a commercial value of $420,000 (the “Materials”), to Omni for use in the Clinical Trial as described above. Omni warrants that the Clinical Trial will be conducted under either a waiver to an Investigational New Drug Application or an Investigational New Drug Application (“IND”) filed with the United States Food and Drug Administration (“FDA”) by Omni. Under the Material Transfer Agreement, Omni is responsible to maintain the IND and comply with all reporting and other obligations associated with the IND. The Material Transfer Agreement will terminate upon completion of the Clinical Trial unless Omni and Baxter mutually agree in writing to extend its term. The Material Transfer Agreement may be terminated by either party (i) upon a material breach of the Material Transfer Agreement, or (2) in the event of an Adverse Event (as defined in the Material Transfer Agreement) that warrants termination of the Clinical Trial. Omni is required to prepare for Baxter a summary of the information and results generated by the Clinical Trial upon its completion.

License And Sponsored Research Agreements

Bacterial Disorders License

On May 15, 2006, we entered into our first exclusive license agreement with the Regents of the University of Colorado (“RUC”) on behalf of UCD relating to anthrax, tuberculosis and bacterial pneumonia. RUC granted us an exclusive worldwide license to use intellectual property covered by various U.S. provisional patent applications filed by UCD. At the same time, we entered into a three year SRA with UCD for research to be undertaken by UCD related to the development of the licensed technology for anthrax and bacterial pneumonia (the “Bacterial SRA”). Under the Bacterial SRA, we were required to make payments aggregating $1,097,460 over the three-year period. On January 9, 2009 we amended the agreement to extend the required payments due in the final year. The revised payment terms were for four quarterly payments due on April 1, 2009, July 1, 2009, October 1, 2009 and January 1, 2010. We made our final payment under this SRA in January 2010 and have no further obligation under this SRA. Concurrently with this work, we are continuing to pursue our patent rights on patent applications directed to targeting bacterial disorders with the United States Patent and Trademark Office (“USPTO”) as well as international offices, which include Japan, Canada and Europe.

Viral Disorders License

On March 31, 2008, we entered into a license agreement with RUC covering patent applications and an issued patent directed to treatment and/or prevention of viral disorders. Some of these disorders include, but are not limited to, HIV and influenza (the “Viral License”). We are currently pursuing expanded patent rights based on our licensed technology directed to treating viral-related disorders with the USPTO. In addition, we are negotiating an SRA related to research and advancement of this licensed technology. We expect that upon execution of the SRA, our financial obligation will total approximately $440,000, payable quarterly over two years.

Cellular Transplant License

On November 12, 2008, we entered into a license agreement with RUC for technology related to the treatment of cellular transplantation and graft rejection (the “Cellular Transplant License”). We are currently pursuing expanded patent rights based on our licensed technology directed to treating cellular transplantation and graft rejection disorders with the USPTO and international patent offices, which include Canada and Europe. In addition, we are negotiating an SRA related to research and advancement of this licensed technology. The estimate related to our financial obligation under this SRA will total approximately $975,000, payable quarterly over three years.

License Agreement with Bio Holding, Inc.

On September 28, 2009, we entered into a license agreement (the “License Agreement”) with Bio Holding pursuant to which we obtained an exclusive license to practice, perform, make, use, sell, import and offer to sell products covered by current and future patents and patent applications owned by Bio Holding for the treatment of diabetes (the “Licensed Technology”). We also agreed to enter into an SRA with UCD for the benefit of Dr. Leland Shapiro’s laboratory related to the License Agreement. We are presently in discussions regarding this SRA, and expect our payment under this SRA to be approximately $88,000.

Under the terms of the License Agreement, we may not sublicense, assign or otherwise transfer its rights in the Licensed Technology without the prior written consent of Bio Holding. In addition, we have a right of first refusal to license any intellectual property owned by Bio Holding that is not part of the license Agreement. Dr. Leland Shapiro, who is our Principal Investigator and currently the beneficial owner of approximately 14% of our common stock, is the majority shareholder of Bio Holding.

Future royalty payments under the above license agreements are summarized below:

				Minimum		Milestone		Earned		Sublicense
License Date		Field of Use		Royalties		Royalties		Royalties		Royalties
May 15, 2006		Bacterial		$25,000 per year starting May 15, 2011		$30,000 to $300,000 (1)		4% of Net Sales		20% to 30%
March 30, 2008		Viral (including HIV)		$50,000 per year after first commercial sale		$100,000 to $150,000 (2)		4% of Net Sales		20% to 30%
November 12, 2008		Cellular Transplantation /Graft Rejection		$50,000 per year after first commercial sale		$25,000 to $200,000 (3)		3% of Net Sales		20% to 30%
September 28, 2009		Diabetes		None		None		4% of Gross Revenues (4)		30% (4)

The license agreements expire upon the expiration date of the last patent covered by the agreement and may also be terminated by either party in the event of a default by the other party.

Significant Trends, Uncertainties and Challenges

We believe that the significant trends, uncertainties and challenges that directly or indirectly affect our financial performance and results of operations include, but are not limited to:

•

The continued expected growth in the biopharmaceutical sector;

•

Our ability to license key intellectual property and protect our current intellectual property relating to our development of therapies;

•

Our ability to fund and enter into SRAs and clinical trials necessary for our development of therapies;

•

Our ability to devote our resources to therapies that are the most likely to result in commercialization;

•

Our ability to shepherd potential therapies through the FDA approval process; and

•

Our ability to compete against companies in our industry with greater resources.

Results of Operations — Fiscal Year Ended March 31, 2010 Compared to Fiscal Year Ended March 31, 2009

The following discussion relates to Omni’s operations for the year ended March 31, 2010 (“fiscal year 2010”) as compared to the year ended March 31, 2009 (“fiscal year 2009”).

Net loss — For fiscal year 2010, we reported a net loss of $5,025,352 as compared to a net loss $4,544,521 for fiscal year 2009, an increase of $480,831. We have not reported any revenue since inception and it is highly likely that we will not recognize any revenue in the near term.

General and administrative expenses — General and administrative expenses for fiscal year 2010 were $2,994,190, which included $2,013,750 of share-based compensation, as compared to $1,031,911 for fiscal year 2009, which included $740,251 of share-based compensation. Management views general and administrative expenses, exclusive of share-based compensation, as an important non-GAAP measure, as we are in development stage, have not recorded any revenue since inception and closely monitor operating expenses to manage and control cash. Management also believes this measure is helpful to investors so they can better understand our cash expenditures. Accordingly, excluding share-based compensation, general and administrative expenses for fiscal year 2010 were $980,440 as compared to $291,660 for fiscal year 2009, an increase of $688,780 or approximately 236%. This increase was primarily due to public company reporting and administrative related expenses in the areas of external audit and reporting, legal, stock administration, investor relations and insurance that were incurred in fiscal year 2010 and not incurred for fiscal year 2009, as we were not an SEC reporting company until March 31, 2009. Also in fiscal year 2010, we had significant increases in legal expenses associated with patents related to our licensing arrangements and consulting and scientific advisory expenses as compared to fiscal year 2009.

Other operating expense — In fiscal year 2010, we executed the License Agreement with Bio Holding, a related party, whose majority shareholder is a significant shareholder of Omni. We paid a license fee of $25,000 and issued to the minority shareholder of Bio Holding a warrant to purchase 650,000 shares of our common stock at an exercise price of $3.00. The value of the warrant was calculated at $1,470,000 using the Black-Scholes pricing model, and this amount was recorded as a non-cash operating expense for fiscal year 2010. For fiscal year 2009, we incurred non-cash operating expenses in the amount of $719,772 associated with issuances of shares of our common stock to the University of License Equity Holdings, Inc., a beneficiary of RUC, that were required under anti-dilution provisions associated with our licenses for viral disease treatment and cellular transplantation/graft rejection.

Research and development — Research and development expenses for fiscal year 2010 were $-0- as compared to $241,300 in fiscal year 2009. The decrease was primarily attributable to having no SRAs in place with UCD in the areas of viral disease treatment and cellular transplantation and graft rejection, and no SRA executed with Bio Holding for diabetes treatment associated with the license executed with Bio Holding. We anticipate executing these three SRAs during calendar year 2010.

Other non-operating expenses — For fiscal year 2010, we recognized accretion expense on notes payable with related parties of $12,000 as compared to $41,125 for fiscal year 2009. The decrease was primarily the result of the conversion of one of the notes in conjunction with a private placement equity offering (the “PP Offering”) that was completed on March 31, 2009. All unamortized discount on this note was expensed upon the conversion of the note on March 31, 2009. For fiscal year 2009, we recorded non-cash charges for the issuances of common stock purchase warrants issuances to investors and related parties of $2,354,587 as compared to $-0- for fiscal year 2010. The decrease was a result of the warrant issuances to outside investors and related parties in conjunction with the Merger and the PP Offering that were completed on March 31, 2009. Charges for modifications to outstanding warrants for fiscal year 2010 were $528,000 as compared $152,686 for fiscal year 2009. This increase was primarily due a larger number of warrants that were modified in fiscal year 2010 as compared to fiscal year 2009.

Interest income/expense net — For fiscal year 2010, we recorded net interest income of $3,838 as compared to net interest expense of $6,140 for fiscal year 2009. The net increase in interest income for fiscal year 2010 was primarily due to interest earned on an interest-bearing cash account that had a significant balance for the majority of the fiscal year as a result of our private placement equity offering that occurred during December 2009 and January 2010 (the “Private Placement”).

Results of Operations — Fiscal Year Ended March 31, 2009 Compared to Fiscal Year Ended March 31, 2008

The following discussion relates to Omni’s operations for fiscal year 2009 as compared to the year ended March 31, 2008 (“fiscal year 2008”).

Net loss — For fiscal year 2009, we reported a net loss of $4,544,521 as compared to a net loss of $1,812,567 for fiscal year 2008, an increase of $2,741,954. This increase was primarily due to non-cash charges of $2,504,273 associated with the issuances of common stock purchase warrants (“warrants”) pursuant to the Merger as well as in the PP Offering, both of which occurred on March 31, 2009. Other significant non-cash charges were our common stock issuances to CU as required under our license agreements, which totaled approximately $720,000 in fiscal year 2009 as compared to approximately $11,000 in fiscal year 2008, and a charge recorded in fiscal year 2009 of approximately $153,000 related to modifications of certain terms of warrants held by related parties. We did not report any revenue in fiscal year 2009 or 2008 or since inception.

General and administrative expenses — General and administrative expenses for fiscal year 2009 were $1,031,911, and included $740,251 of share-based compensation, as compared to $1,366,976 in fiscal year 2008, which included $692,638 of share-based compensation. As previously disclosed, management views general and administrative expenses, exclusive of share-based compensation, as an important non-GAAP measure. Accordingly, excluding share-based compensation, general and administrative expenses in fiscal year 2009 were $291,660 as compared to $674,338 for fiscal year 2008, a decrease of $382,678 or approximately 57%. This decrease was primarily due to significantly lower employee compensation and related payroll taxes in fiscal year 2009 as a result of the departure of our CEO during the first quarter of fiscal year 2009 and our COO during the third quarter of fiscal year 2009. Further, as part of settlement agreements with both individuals, our committed pay-outs resulted in a reduction in compensation expense in fiscal year 2009 for previously accrued compensation pertaining to both fiscal years 2008 and 2009.

Research and development — Research and development expenses for fiscal year 2009 were $241,300 as compared to $385,437 in fiscal year 2008, a decrease of $144,137 or approximately 37%. The decrease was primarily attributable to our inability to continue funding of research activities at UCD due to cash availability constraints.

Other non-operating expenses — Accretion expense on notes payable with related parties for fiscal year 2009 was $41,125 for fiscal year 2009 as compared to $-0- for fiscal year 2008. During fiscal year 2009, we executed two notes payable with related parties in the aggregate amount of $100,000. Both notes were issued along with detachable warrants and were recorded at a discount based on the allocation of proceeds to both the notes and warrants as required under US GAAP. We accreted these discounts over the terms of the notes, and one of the notes was converted in conjunction with the PP Offering that was completed on March 31, 2009. All unamortized discount on this note was expensed upon the conversion of the note on March 31, 2009. Charges for the issuances of common stock purchase warrants issuances to investors and related parties for fiscal year 2009 was $2,354,587 and was attributable to the warrant issuances to outside investors and related parties in conjunction with the Merger and the PP Offering. Charges for modifications to outstanding warrants for fiscal year 2009 were $152,686 as compared to $-0- for fiscal year 2008. This increase was a result of modifications to warrants in fiscal year 2009 and no modifications to warrants in fiscal year 2008.

Interest expense — Interest expense for fiscal year 2009 was $6,140 as compared to $49,425 for fiscal year 2008, primarily due to lower debt outstanding during fiscal year 2009.

Warrant Issuances for Fiscal Year 2010

During fiscal year 2010, we granted the following warrants to officers, directors and consultants. All related expense was recorded as share-based compensation and included in general and administrative expenses. Further detail on the respective share-based compensation charges is disclosed in Note 9 to our consolidated financial statements included under Item 15 of this report.

On April 7, 2009, we granted a warrant to our acting chief executive officer to purchase 600,000 shares of our common stock at an exercise price of $0.50 per share. Shares under this warrant vest as follows: 200,000 upon issuance, 200,000 in October 2009 and 200,000 in April 2010. This warrant expires on April 7, 2016. We valued these warrants at $529,975 using the Black-Scholes model.

On April 15, 2009, we granted a warrant to our chief financial officer to purchase 50,000 shares of our common stock at an exercise price of $0.50 per share. All shares under this warrant vested upon issuance. This warrant expires on April 15, 2016. We valued this warrant at $44,165 using the Black-Scholes model.

On April 1, 2009, we granted a warrant to a medical consultant to purchase 48,000 shares of our common stock at an exercise price of $1.25 per share. All shares under this warrant vested as of September 30, 2009. This warrant expires on April 1, 2014. We valued this warrant at $35,927 using the Black-Scholes model.

On July 30, 2009 and pursuant to our compensation program for directors (whereby a director receives a grant of 100,000 warrants in the first year of service and 50,000 warrants per year for each subsequent year of service), we granted warrants to our directors (excluding our acting CEO who is a director) to purchase 275,000 shares of our common stock in exchange for director services for the fiscal year ended March 31, 2010 (the “Director Warrants”). Four of the directors received an annual grant of 50,000 warrants based on the commencement of their second year of service, which was April 1, 2009. Warrants under these grants vest on March 31, 2010 and expire on April 1, 2016. A fifth director received a grant of 25,000 warrants for the fourth quarter of his first year of service. Warrants under this grant vested April 1, 2009 and expire on April 1, 2016. A sixth director received a grant of 50,000 warrants for the third and fourth quarters of his first year of service, of which 25,000 vested April 1, 2009 and expire on April 1, 2016 and 25,000 vest on July 1, 2009 and expire on July 1, 2016. We valued these warrants at $688,908 using the Black-Scholes model.

Pursuant to Board approval on July 30, 2009, on August 6, 2009 we granted 50,000 common stock purchase warrants exercisable at $3.00 per share and expiring on August 6, 2016 to a director for a second year of service. The warrants vest on August 5, 2010 if the director has continuously served as a director of the Company through such date. We valued these warrants at $125,256 using the Black-Scholes model.

Pursuant to Board approval on July 30, 2009, on October 1, 2009, we granted 50,000 common stock purchase warrants exercisable at $3.00 per share and expiring on October 1, 2016 to a director for his second year of service. The warrants vest on September 30, 2010 if the director has continuously served as a director of the Company through such date. We valued these warrants at $124,854 using the Black-Scholes model.

On October 12, 2009, our Board appointed a new director as a result of a resignation of a Board director. All previously recorded share-based compensation related to the unvested warrants held by this director was reversed in the December 2009 quarter. Also on October 12, 2009, we granted 100,000 common stock purchase warrants exercisable at $3.00 per share and expiring on October 12, 2016 to the new director for his first year of service as a director. The warrants vest on October 11, 2010 if the director has continuously served as a director of the Company through such date. We valued these warrants at $249,709 using the Black-Scholes model.

On October 12, 2009 and as consideration for consulting service agreements that we executed with a director and a member of our scientific advisory board, we granted to these two individuals 50,000 and 100,000 common stock purchase warrants, respectively, exercisable at $3.00 per share and expiring October 12, 2014. The warrants vest on October 11, 2010 if the individual has continuously provided service to the Company through such date. We valued these warrants at $338,272 using the Black-Scholes model.

On December 16, 2009, our Board approved the grant to our acting chief executive officer of 600,000 common stock purchase warrants exercisable at $3.00 per share and expiring on November 13, 2016. The warrants vest and become exercisable in four equal installments on March 31, 2010, March 31, 2011, March 31, 2012 and March 31, 2013, subject to continuous service with the Company. We valued these warrants at $1,498,251 using the Black-Scholes model.

On December 16, 2009, our Board approved the grant to our chief financial officer of 300,000 common stock purchase warrants exercisable at $3.00 per share and expiring on November 13, 2016. The warrants vest and become exercisable as follows: 60,000 shares on November 20, 2009, 80,000 shares on September 30, 2010, 80,000 shares on September 30, 2011, and 80,000 shares on September 30, 2012, all subject to continuous service with the Company. We valued these warrants at $749,126 using the Black-Scholes model.

As of December 31, 2009, we recorded $9,999 in share-based compensation for shares of our common stock to be issued pursuant to a consulting agreement that we executed during the December 2009 quarter.

On February 4, 2010, our Board approved the grant of 100,000 common stock purchase warrants to a member of our scientific advisory board as consideration for an amendment to his consulting agreement to provide additional services to Omni. The warrants are exercisable at $3.00 per share, expire on February 4, 2015 and vest on October 11, 2010 if the individual has continuously provided service to the Company through such date. We valued these warrants at $225,723 using the Black-Scholes model.

On March 31, 2010, our Board approved the grant of 50,000 common stock purchase warrants to a medical consultant in exchange for consulting services to be provided through September 30, 2010. The warrants are exercisable at $3.00 per share, expire on March 31, 2015 and vest on September 30, 2010 if the individual has continuously provided service to the Company through such date. We valued these warrants at $112,748 using the Black-Scholes model.

For the period from July 7, 2009 through March 31, 2010, we granted warrants at an exercise price of $3.00 per share, which represented management’s estimated fair value of our common stock price as of the date of each grant and which was different than the quoted price of our common stock on the Over the Counter Bulletin Board on each of the grant dates. Our determination of estimated fair value was based on factors, including, but not limited to: 1) initial discussions with potential investors on an equity capital raise at a price of $3.00 per share and the price of Private Placement Units that were ultimately sold in the Private Placement; 2) the limited trading volume and limited public trading duration of our common stock; 3) the trading prices on private common stock sale transactions during this period; and 4) the trading lock-up requirement of two or three years on the majority of our outstanding warrants and common stock.

Liquidity and Capital Resources

Our consolidated financial statements as presented in Item 15 of this report have been prepared in conformity with US GAAP, which contemplate our continuation as a going concern. However, the report of our independent registered public accounting firm on our consolidated financial statements, as of and for the year ended March 31, 2010, contains an explanatory paragraph expressing substantial doubt as to our ability to continue as a going concern. The “going concern” qualification results from, among other things, our development-stage status, no revenue recognized since inception or likely to be recognized in the near term, and our inception to date net losses, which total approximately $12.5 million and include non-cash charges of approximately $8.4 million. Our consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary if we were unable to continue as a going concern.

Cash and Cash Equivalents

We consider all liquid investments purchased within 90 days of their original maturity to be cash equivalents. Our cash and cash equivalents were $1.8 million at March 31, 2010 and 2009.

Cash Flows from Operating Activities

For fiscal year 2010, net cash used in operations was $1,793,869. The primary uses of cash from operations were general and administrative expenses excluding share-based compensation, which totaled $980,040 and a reduction in accounts payable, amounts due under an SRA, accrued liabilities and amounts due to related parties, which totaled approximately $814,000. The significant decrease in these liabilities was a result of a significant pay-down on these liabilities during the first quarter of fiscal year 2010, which had largely been incurred during the first nine months of fiscal year 2009 because the Company had negligible cash on hand during fiscal year 2009 to settle liabilities on reasonable and, as applicable, contractual payment terms. For fiscal year 2009, net cash used in operations was $56,513. The primary uses of cash from operations were general and administrative expenses excluding share-based compensation, which totaled $291,660 and research and development expenses of $241,300. The primary source of cash from operations was the net increase in accounts payable, amounts due under an SRA, accrued liabilities and amounts due to related parties, which totaled approximately $471,000. The significant increase in these liabilities was primarily a result of a significant build-up in during the first nine months of fiscal year 2009 as the Company had negligible cash on hand during fiscal year 2009 to settle liabilities on reasonable and, as applicable, contractual payment terms.

Cash Flows from Investing Activities

For fiscal year 2010, we did not generate or expend cash from investing activities. For fiscal year 2009, our primary use of cash from investing activities was the purchase of a license related to the application of cellular transplantation and graft rejection in the amount of $35,401.

Cash Flows from Financing Activities

For fiscal year 2010, we generated $1,786,890 of cash from financing activities as a result of the Private Placement. For fiscal year 2009, we generated $1,800,000 of cash from financing activities as a result of the PP Offering.

Anticipated Cash Commitments

During the remainder of 2010, we intend to enter into three SRAs in the areas of diabetes, viral disorder treatments and cellular transplantation/graft rejection. We presently anticipate that the financial commitments for these pending SRA agreements will total approximately $1,500,000 over a three year period. Additionally, in June 2010, we became obligated for payments under the Clinical Trial, which include a base cost of approximately $725,000 plus additional estimated costs of $100,000. We currently have cash on hand to carry-out the Type 1 diabetes clinical trial based on the current patient enrollment of 15.

In December 2009 and January 2010, we generated net cash of $1,786,890 through the sale of common stock and warrants in the Private Placement. We do not expect to generate revenue during the remainder of 2010 or at any time in the foreseeable future. We expect our current cash balance, including funds raised in the Private Placement, to be sufficient to cover our planned capital and operational expenditures for the near term based on current trends and currently known factors. We will need to raise additional capital to cover our operating losses, SRAs, clinical trials and other research and development expenses. We currently are pursuing various avenues to obtain additional capital including raising money in the equity markets. There can be no assurance that additional capital will be available to us on acceptable terms or at all. Failure to obtain additional capital will have a material adverse impact on our ability to continue our research and development efforts and cover our operating expenses.

Contractual Obligations

We are committed to make payments on certain contractual obligations, and our cash payments due under contractual obligations as of March 31, 2010 were as follows:

		Less than												More than
		1 Year				1 – 3 Years				3 – 5 Years				5 Years				Total
Note payable — related party		$	25,000			$	—			$	—			$	—			$	25,000
Corporate office lease			19,078				36,393				—				—				55,471
Office equipment lease			2,300				4,596				—				—				6,896
		$	46,378			$	40,989			$	—				—			$	87,367

Critical Accounting Policies

We prepare our financial statements in accordance with US GAAP. Our significant accounting policies are disclosed in Note 2 to our consolidated financial statements contained under Item 15 in this report. The accounting policies most fundamental to the understanding our financial statements are our use of estimates, including the computation of share-based compensation and determination of fair value of our stock price used in those computations (this policy is further disclosed in Note 9 to our consolidated financial statements); capitalization of license agreements and impairment analysis of the capitalized license costs; and the valuation, classification and recording of debt and equity transactions, including those that include stock purchase warrants.

Share-based Compensation

A significant portion of our general and administrative expenses for the years ended March 31, 2010, 2009 and 2008 is comprised of share-based compensation in the amounts of $2,013,750, $740,251 and $692,638, respectively, related to warrants to purchase shares of our common stock issued to employees, consultants and directors. We have computed the share-based compensation charges using the Black-Scholes pricing model, which incorporates estimates as to a company’s stock price (when there is not readily available market as a basis), the expected term that a warrant holder will hold a warrant and the expected volatility of a company’s stock price over a specified term.

For fiscal year 2010, we recorded significant charges in the amount of $1,998,000 for warrants issued as a partial payment for a licensing fee with a related party and for a modification of an outside investor warrant. We calculated these charges also using the Black-Scholes model and assessed the appropriateness of the variables employed in the model, including an estimate of our stock price on the date of each transaction as used in the computation of share-based compensation. We are likely to issue more equity instruments, which may be in the forms of common stock sold with detachable warrants, convertible debt sold with detachable warrants and convertible preferred sold with detachable warrants. These potential types of transactions require extensive analysis to determine the proper asset, liability and/or equity classification and the application of estimates in deriving values to be assigned under the Black-Scholes model. Future issuances of these transactions may possibly result in significant expenses being recorded in our consolidated financial statements.

For the period from July 7, 2009 through March 31, 2010, we granted warrants at an exercise price of $3.00 per share, which represented management’s estimated fair value of our common stock price as of the date of each grant and which was different than the quoted price of our common stock on the Over the Counter Bulletin Board on each of the grant dates. Our determination of estimated fair value was based on factors, including, but not limited to: 1) initial discussions with potential investors on an equity capital raise at a price of $3.00 per share and the price of Private Placement Units that were ultimately sold in the Private Placement; 2) the limited trading volume and limited public trading duration of our common stock; 3) the trading prices private common stock sale transactions during this period; and 4) the trading lock-up requirement of two or three years on the majority of our outstanding warrants and common stock. We believe that these factors represent appropriate measures of fair value as outlined in US GAAP, and as a result, we concluded the principal market for Omni’s common stock was inactive. As a result, we looked to the terms and pricing of the Private Placement, which included these securities, as the most reasonable and appropriate fair value indication of our stock price.

Capitalized License Costs

Since inception, we have capitalized approximately $80,000 related to direct costs incurred to establish our ability to license potential future patents in the bio pharmaceutical areas that are associated with our licenses. We commence amortization of these costs when a patent is applied for and continue the amortization over the expected life of the patent. The assignment of an estimated life to a license is also an estimate that we must monitor as well as the net carrying value of the license. Because we are in development stage and have not generated any revenue or identified which of the licenses may potentially generate revenue, a formal impairment analysis is not practical at this time. We will continue to monitor our license agreements as to the appropriateness of definite lives in relation to patent development and formalize our potential impairment analysis as we correlate evidence as to the potential marketability of product(s) related to our license agreements.

ITEM 7A.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As of March 31, 2010, approximately 96% of our total assets were comprised of cash and cash equivalents, which were held in operating and short-term, interest bearing money market accounts. Additionally, as of March 31, 2010, we did not have any outstanding debt obligations or any credit facilities in place. As we are a development stage company and have not reported any revenue from inception, we currently utilize 100% of our cash and cash equivalents on hand to fund general operating expenses and research and development activities. We do not anticipate investing any cash or cash equivalents in any equity or debt securities in the foreseeable future and, as such, we are not subject to interest rate risk associated with debt securities or debt obligations or market risk associated with equity securities investments.

ITEM 8.		FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Financial Statements

Our consolidated financial statements are included as a separate section of this report beginning on page F-1 immediately following the signature page to this report.

Supplementary Data

Supplementary data for each quarter in our fiscal years ended March 31, 2010 and 2009 is as follows:

		For the Quarter Ended
Fiscal Year 2010		June 30				September 30				December 31				March 31
Net sales		$	—			$	—			$	—			$	—
Net loss			(659,422	)			(1,941,304	)			(1,361,456	)			(1,063,170	)
Net loss per share — basic and diluted			(0.03	)			(0.07	)			(0.05	)			(0.04	)

		For the Quarter Ended
Fiscal Year 2009		June 30				September 30				December 31				March 31
Net sales		$	—			$	—			$	—			$	—
Net loss			(422,202	)			(284,741	)			(339,959	)			(3,497,619	)
Net loss per share — basic and diluted			(0.02	)			(0.02	)			(0.02	)			(0.19	)

ITEM 9.		CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.

None.

ITEM 9A.		CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We are responsible for establishing and maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Acting Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Our management, with the participation of our Acting Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of March 31, 2010. Based on this evaluation, our Acting Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of this date.

Management’s Annual Report on Internal Control over Financial Reporting

Our management, including the Acting Chief Executive Officer and the Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended. Our internal controls were designed to provide reasonable assurance as to the reliability of its financial reporting and the preparation and presentation of the consolidated financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Management has used the framework set forth in the report entitled Internal Control — Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission to evaluate the effectiveness of the Company’s internal control over financial reporting. Management has concluded that our internal control over financial reporting was effective as of March 31, 2010.

Hein & Associates LLP, an independent registered public accounting firm, has issued an attestation report on our internal control over financial reporting, which is included herein.

Change in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting during the fourth quarter of the fiscal year ended March 31, 2010 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders
Omni Bio Pharmaceutical, Inc.

We have audited Omni Bio Pharmaceutical, Inc.’s (the “Company”) internal control over financial reporting as of March 31, 2010, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Omni Bio Pharmaceutical, Inc. maintained, in all material respects, effective internal control over financial reporting as of March 31, 2010, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements of Omni Bio Pharmaceutical, Inc. and our report dated June 25, 2010 expressed an unqualified opinion.

HEIN & ASSOCIATES LLP

Denver, Colorado
June 25, 2010

ITEM 9B.		OTHER INFORMATION.

None.

PART III

ITEM 10.		DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

The information required by Item 10 will be incorporated by reference from the registrant’s definitive Proxy Statement to be used in connection with its 2010 Annual Meeting of Shareholders or from an amendment to this Annual Report on Form 10-K.

Code of Ethics

A copy of our code of ethics is attached hereto as Exhibit 14.1.

ITEM 11.		EXECUTIVE COMPENSATION.

The information required by Item 11 will be incorporated by reference from the registrant’s definitive Proxy Statement to be used in connection with its 2010 Annual Meeting of Shareholders or from an amendment to this Annual Report on Form 10-K.

ITEM 12.		SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The information required by Item 12 will be incorporated by reference from the registrant’s definitive Proxy Statement to be used in connection with its 2010 Annual Meeting of Shareholders or from an amendment to this Annual Report on Form 10-K.

ITEM 13.		CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

The information required by Item 13 will be incorporated by reference from the registrant’s definitive Proxy Statement to be used in connection with its 2010 Annual Meeting of Shareholders or from an amendment to this Annual Report on Form 10-K.

ITEM 14.		PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The information required by Item 14 will be incorporated by reference from the registrant’s definitive Proxy Statement to be used in connection with its 2010 Annual Meeting of Shareholders or from an amendment to this Annual Report on Form 10-K.

PART IV

Item 15.		EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Consolidated Financial Statements — See Index to Consolidated Financial Statements at page F-1 of this Report.

(b) Financial Statement Schedules — Not applicable.

(c) Exhibits.

EXHIBIT #				DESCRIPTION
	2.1			Agreement of Merger and Plan of Reorganization dated November 17, 2008 (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on November 21, 2008)
	2.2			Agreement to Amend and Extend Agreement of Merger and Plan of Reorganization dated February 11, 2009 (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed on February 18, 2009)
	2.3			Second Agreement to Amend and Extend Agreement of Merger and Plan of Reorganization dated March 11, 2009 (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed on March 13, 2009)
	2.4			Third Agreement to Amend Agreement of Merger and Plan of Reorganization dated March 30, 2009 (incorporated by reference to Exhibit 2.4 to the Registrant’s Current Report on Form 8-K filed on April 6, 2009)
	2.5			Agreement and Plan of Merger between Maxcure Pharmaceutical, Inc. and Apro Bio Pharmaceutical Corporation dated March 18, 2008 (incorporated by reference to Exhibit 2.5 to the Registrant’s Annual Report on Form 10-K filed on June 29, 2009)
	3.1			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. (incorporated by reference to Exhibit 3.3 to the Registrant’s Current Report on Form 8-K filed on June 2, 2009)
	10.2			Exclusive License Agreement with the Regents of the University of Colorado dated May 15, 2006 (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed on April 6, 2009)
	10.3			Sponsored Research Agreement with the Regents of the University of Colorado dated May 15, 2006, (incorporated by reference to Exhibit 10.6 to the Registrant’s Current Report on Form 8-K filed on April 6, 2009)
	10.4			Services Agreement with The Board of Governors of the Colorado State University System dated June 18, 2007 (incorporated by reference to Exhibit 10.7 to the Registrant’s Current Report on Form 8-K filed on April 6, 2009)
	10.5			Exclusive License Agreement with the Regents of the University of Colorado dated March 31, 2008, as amended (incorporated by reference to Exhibit 10.8 to the Registrant’s Current Report on Form 8-K filed on April 6, 2009)

EXHIBIT #				DESCRIPTION
	10.6			Exclusive License Agreement with the Regents of the University of Colorado dated November 12, 2008 (incorporated by reference to Exhibit 10.9 to the Registrant’s Current Report on Form 8-K filed on April 6, 2009)
	10.7			License Agreement with Bio Holding, Inc. dated September 28, 2009 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on October 2, 2009)
	10.8			Settlement Agreement with David Olson (incorporated by reference to Exhibit 10.10 to the Registrant’s Form 8-K filed on April 6, 2009)
	10.9			Settlement Agreement with David Floor (incorporated by reference to Exhibit 10.11 to the Registrant’s Form 8-K filed on April 6, 2009)
	10.10			Form of Advisor Warrant dated March 31, 2009 (incorporated by reference to Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K filed on June 29, 2009)
	10.11			Subscription Agreement and Letter of Investment (incorporated by reference to Exhibit 10.12 to the Registrant’s Annual Report on Form 10-K filed on June 29, 2009)
	10.12			Form of Investor Warrant exercisable at $0.25 per share dated March 31, 2009 (incorporated by reference to Exhibit 10.13 to the Registrant’s Annual Report on Form 10-K filed on June 29, 2009)
	10.13			Form of Investor Warrant exercisable at $0.50 per share dated March 31, 2009 (incorporated by reference to Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K filed on June 29, 2009)
	10.14			Form of Investor Warrant exercisable at $1.00 per share dated March 31, 2009 (incorporated by reference to Exhibit 10.15 to the Registrant’s Annual Report on Form 10-K filed on June 29, 2009)
	10.15			Form of Two-Year Subscription and Lock-up Agreement (incorporated by reference to Exhibit 10.16 to the Registrant’s Annual Report on Form 10-K filed on June 29, 2009)
	10.16			Form of Three-Year Subscription and Lock-up Agreement (incorporated by reference to Exhibit 10.17 to the Registrant’s Annual Report on Form 10-K filed on June 29, 2009)
	10.17			Warrant dated December 16, 2009 issued to Charles A. Dinarello (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed December 22, 2009)
	10.18			Warrant dated December 16, 2009 issued to Robert C. Ogden (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed December 22, 2009)
	14.1			Code of Business Conduct and Ethics #
	21			Subsidiaries of the Registrant #
	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 Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code #
	32.2			Certification of Chief Financial Officer Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code #

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.

Omni Bio Pharmaceutical, Inc. and Subsidiary

Index to Financial Statements

		Page
Report of Independent Registered Public Accounting Firm			F-2
Report of Independent Registered Public Accounting Firm			F-3
Consolidated Balance Sheets as of March 31, 2010 and 2009			F-4
Consolidated Statements of Operations for the Years Ended March 31, 2010, 2009, 2008 and the period from February 28, 2006 (Inception) through March 31, 2010			F-5
Consolidated Statements of Stockholders’ Equity for the Years Ended March 31, 2010, 2009, 2008 and the period from February 28, 2006 (Inception) through March 31, 2010			F-6
Consolidated Statements of Cash Flows for the Years Ended March 31, 2010, 2009, 2008 and the period from February 28, 2006 (Inception) through March 31, 2010			F-11
Notes to Consolidated Financial Statements			F-13

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders
Omni Bio Pharmaceutical, Inc. & Subsidiary
Greenwood Village, Colorado

We have audited the accompanying consolidated balance sheets of Omni Bio Pharmaceutical, Inc. and Subsidiary (a development stage company) as of March 31, 2010 and 2009, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the years ended March 31, 2010 and 2009 and for the period from February 28, 2006 (inception) to March 31, 2010. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. The cumulative statements of operations, stockholders’ equity, and cash flows for the period February 28, 2006 (inception) to March 31, 2010 include amounts for the period from February 28, 2006 (inception) to March 31, 2008, which were audited by other auditors, and our opinion, insofar as it relates to the amounts included for the period February 28, 2006 through March 31, 2008, is based solely on the report of other auditors.

We conducted our audits in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, based on our audits and the report of other auditors, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Omni Bio Pharmaceutical, Inc. and Subsidiary (a development stage company) as of March 31, 2010 and 2009, and the consolidated results of their operations and their cash flows for the years ended March 31, 2010 and 2009 and for the period February 28, 2006 (inception) to March 31, 2010, in conformity with U.S. generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has incurred recurring losses from operations that raise substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Omni Bio Pharmaceutical, Inc. and Subsidiary’s internal control over financial reporting as of March 31, 2010, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated June 25, 2010 expressed an unqualified opinion on the effectiveness of Omni Bio Pharmaceutical, Inc. and Subsidiary’s internal control over financial reporting.

HEIN & ASSOCIATES LLP

Denver, Colorado
June 25, 2010

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders:
Omni Bio Pharmaceutical, Inc. & Subsidiary
(formerly Apro Bio Pharmaceutical Corporation)
Greenwood Village, Colorado

We have audited the accompanying consolidated balance sheet of Omni Bio Pharmaceutical, Inc. & Subsidiary (formerly Apro Bio Pharmaceutical Corporation) (A Development Stage Company) as of March 31, 2008 (not separately included herein) and the related consolidated statements of operations, shareholders’ deficit, and cash flows for the year ended March 31, 2008 and the period from February 28, 2006 (inception) through March 31, 2008. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Omni Bio Pharmaceutical, Inc. & Subsidiary (formerly Apro Bio Pharmaceutical Corporation) as of March 31, 2008 and the consolidated results of their operations and their cash flows for the year ended March 31, 2008 and the period from February 28, 2006 (inception) through March 31, 2008, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

/s/ Cordovano and Honeck LLP
Cordovano and Honeck LLP
Englewood, Colorado
February 28, 2009

OMNI BIO PHARMACEUTICAL, INC. & SUBSIDIARY
(A Development Stage Company)

		March 31,
		2010				2009
ASSETS
Current assets:
Cash and cash equivalents		$	1,802,366			$	1,805,395
Other current assets			10,049				21,772
Total current assets			1,812,415				1,827,167
Property and equipment, net			848				2,250
Intangible assets, net			67,115				72,300
Total long-term assets			67,963				74,550
TOTAL ASSETS		$	1,880,378			$	1,901,717
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	94,356			$	282,935
Amounts due to UCD under sponsored research agreement			—				321,300
Accrued liabilities			97,487				56,817
Accrued compensation and related benefits and taxes			—				211,012
Amounts due to related parties			4,125				138,261
Notes payable — related parties, net of discounts of $3,000 and $15,000, respectively			22,000				142,000
Total current liabilities			217,968				1,152,325
Commitments and Contingencies (Notes 6, 9 and 10)
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; 27,987,018 and 23,164,567 shares issued and outstanding, respectively			27,987				23,164
Additional paid-in capital			14,120,251				8,186,704
Deficit accumulated during the development stage			(12,485,828	)			(7,460,476	)
Total stockholders’ equity			1,662,410				749,392
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	1,880,378			$	1,901,717

The accompanying notes are an integral part of these consolidated financial statements.

OMNI BIO PHARMACEUTICAL, INC. & SUBSIDIARY
(A Development Stage Company)

														February 28,
														2006 (Inception)
		For the Years Ended March 31,												Through March
		2010				2009				2008				31, 2010
Operating expenses
General and administrative (including share-based compensation of $2,013,750, $740,251, $692,638 and $3,479,564, respectively)		$	2,994,190			$	1,031,911			$	1,366,976			$	5,952,446
License fee — related party			1,495,000				—				—				1,495,000
Research and development			—				241,300				385,437				1,132,497
Charge for common stock issued pursuant to license agreements			—				719,772				10,729				763,240
Total operating expenses			4,489,190				1,992,983				1,763,142				9,343,183
Loss from operations			(4,489,190	)			(1,992,983	)			(1,763,142	)			(9,343,183	)
Non-operating income (expenses)
Interest income (expense), net			3,838				(6,140	)			(49,425	)			(57,247	)
Accretion expense on notes payable — related parties			(12,000	)			(41,125	)			—				(53,125	)
Charges for warrants issued in merger — related parties			—				(1,948,237	)			—				(1,948,237	)
Charges for warrants issued in private placement — related parties			—				(403,350	)			—				(403,350	)
Charges for modifications to warrants			(528,000	)			(152,686	)			—				(680,686	)
Total non-operating expenses			(536,162	)			(2,551,538	)			(49,425	)			(3,142,645	)
Net loss		$	(5,025,352	)		$	(4,544,521	)		$	(1,812,567	)		$	(12,485,828	)
Basic and diluted net loss per share		$	(0.19	)		$	(0.25	)		$	(0.16	)
Weighted average shares outstanding — basic and diluted			26,845,209				18,254,573				11,271,993

The accompanying notes are an integral part of these consolidated financial statements.

OMNI BIO PHARMACEUTICAL, INC. & SUBSIDIARY
(A Development Stage Company)

																						Deficit
																						Accumulated
																		Additional				During				Total
		Preferred Stock								Common Stock								Paid-in				Development				Stockholders’
		Shares				Amount				Shares				Amount				Capital				Stage				Equity (Deficit)
Balances at February 28, 2006 (inception)			—			$	—				—			$	—			$	—			$	—			$	—
Common stock issued to founders and insiders (February and March 2006 at $0.001 per share)											10,000,000				10,000												10,000
Net loss																							(2,715	)			(2,715	)
Balances at March 31, 2006			—				—				10,000,000				10,000				—				(2,715	)			7,285
Common stock sold in private placement offering (April 2006 at $0.80 per share)											150,000				150				119,850								120,000
Common stock issued as additional consideration pursuant to license agreement (May 2006 at $0.001 per share)											406,000				406												406
Common stock sold in private placement offering (June through December 2006 at $1.00 per share)											340,000				340				339,660								340,000
Common stock issued in exchange for consulting services (November 2006 at $1.00 per share)											30,000				30				29,970								30,000
Common stock issued as additional consideration pursuant to license agreement (December 2006 and January 2007 at $0.001 per share)											32,333				32				32,301								32,333
Common stock purchase warrants sold to outside investors (March 2007 at $0.25 per share)																			102,500								102,500
Common stock purchase warrants sold to an employee (March 2007 at $0.25 per share)																			21,250								21,250
Common stock purchase warrants issued to an employee (March 2007 at estimated fair value of $0.12 per share)																			2,925								2,925
Net loss																							(1,100,673	)			(1,100,673	)
Balances at March 31, 2007			—			$	—				10,958,333			$	10,958			$	648,456			$	(1,103,388	)		$	(443,974	)

OMNI BIO PHARMACEUTICAL, INC. & SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued)

																						Deficit
																						Accumulated
																		Additional				During				Total
		Preferred Stock								Common Stock								Paid-in				Development				Stockholders’
		Shares				Amount				Shares				Amount				Capital				Stage				Equity (Deficit)
Common stock purchase warrants sold to an employee (April 2007 at $0.25 per share)			—			$	—				—			$	—			$	1,250			$	—			$	1,250
Common stock sold in private placement offerings (May and June 2007 at $1.00 per share)											257,500				257				231,493								231,750
Common stock issued as additional consideration pursuant to license agreement (June 2007 at $1.00 per share)											10,729				11				10,718								10,729
Common stock purchase warrants issued to a director (June 2007 at estimated fair value of $0.73 per share)																			21,915								21,915
Common stock purchase warrants issued in exchange for consulting services (June 2007 at estimated fair value of $0.98 per share)																			490,150								490,150
Common stock purchase warrants issued in exchange for consulting services (June 2007 at estimated fair value of $0.60 per share)																			18,033								18,033
Common stock purchase warrants issued to an employee (July 2007 at estimated fair value of $0.73 per share)																			109,680								109,680
Common stock purchase warrants issued in exchange for consulting services (March 2008 at estimated fair value of $0.88 per share)																			52,860								52,860
Common stock purchase warrants exercised (March 2008 at $0.02 per share)											500,000				500				9,500								10,000
Contributed rent																			10,080								10,080
Net loss																							(1,812,567	)			(1,812,567	)
Common stock issued in reverse merger (March 2008)											6,462,900				6,463				931,778								938,241
Balances at March 31, 2008			—			$	—				18,189,462			$	18,189			$	2,535,913			$	(2,915,955	)		$	(361,853	)

OMNI BIO PHARMACEUTICAL, INC. & SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued)

																						Deficit
																						Accumulated
																		Additional				During				Total
		Preferred Stock								Common Stock								Paid-in				Development				Stockholders’
		Shares				Amount				Shares				Amount				Capital				Stage				Equity (Deficit)
Common stock issued as additional consideration pursuant to license agreement (April 2008 and March 2009 at $1.00 per share)											719,772			$	720			$	719,052							$	719,772
Share-based compensation related to common stock purchase warrants issued to directors (April through October 2008 at estimated weighted-average fair value of $0.80 per share)																			550,555								550,555
Convertible note payable and common stock purchase warrants issued to a related party (May 2008 at estimated fair value of $0.50 per share)																			25,000								25,000
Note payable and common stock purchase warrants issued to a related party (October 2008 at estimated fair value of $0.31 per share)																			31,125								31,125
Modification to previously issued common stock purchase warrants to a related party (November 2008 at estimated fair value of $0.09 per share)																			1,696								1,696
Modifications to previously issued common stock purchase warrants to outside investors (January 2009 at weighted average estimated fair value of $0.28 per share)																			148,155								148,155
Share-based compensation related to modifications to previously issued common stock purchase warrants (March 2009 at estimated fair value of $0.62 per share)																			79,696								79,696
Share-based compensation related to common shares issued as part of settlement agreements with former employees (March 2009 at $1.00 per share)											110,000				110				109,890								110,000
Common stock issued in private placement offering, net of offering costs of $112,200 (March 2009 at $1.00 per unit)											1,870,000				1,870				1,755,930								1,757,800