U.S.
SECURITIES AND EXCHANGE COMMISSION Washington, D.C.  20549 FORM 10-K x Annual
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the fiscal year ended December 31, 2010 o Transition
Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the
transition period from _____ to _____ Commission File Number:  000-52238 CELLCYTE GENETICS CORPORATION (Name of
registrant in its charter) Nevada

86-1127046(State or other jurisdiction of incorporation or
organization)

(IRS Employer Identification No.)14205 SE 36th St. Suite 100, Bellevue,
Washington

98006(Address of principal executive offices)

(Zip Code) Registrants
telephone number, including area code:(425) 519-3755 Securities registered under Section 12(b) of the Exchange Act:
 None Securities registered under Section 12(g) of the Exchange Act: Common Stock, par value $0.001 per share  Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
rule 405 of the Securities Act.     o  Yes     x  No Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Exchange Act.  o Indicate
by check mark whether the registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.     x
 Yes            
o No  Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Website, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files.  Yes  o Nox Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405 of this chapter) 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, or a smaller reporting company.
 See the definitions of the large accelerated filer, accelerate filer,
and smaller reporting company in Rule 12b-2 of the Exchange Act.
  (Check one): Large
Accelerated Filer o Accelerated
Filer o       Non-Accelerated
Filer o Smaller
reporting company x (Do not check if a smaller reporting company)  Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).    o Yes    x No The
aggregate market value of the registrants voting and non-voting common stock
held by non-affiliates, computed by reference to the closing price of the common
stock as of June 30, 2010, the last business day of the registrants most
recently completed second fiscal quarter, was $1,610,418 based upon the closing
price of such common stock on the OTC Bulletin Board of $0.0216. State
the number of shares outstanding of each of the issuers classes of common
equity, as of the latest practicable date:  74,556,405 shares of common
stock as of April 13, 2011. __________       CELLCYTE GENETICS CORPORATION Form 10-K  __________ PART
I 2 ITEM
1. BUSINESS 2 ITEM
1A.       RISK FACTORS 7 ITEM
2. PROPERTY 12 ITEM
3. LEGAL
PROCEEDINGS 12 ITEM
4. [REMOVED
AND RESERVED] 12 PART
II 12 ITEM
5. MARKET
FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES
OF EQUITY SECURITIES 12 ITEM
6. SELECTED
FINANCIAL DATA 14 ITEM
7. MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS 14 ITEM
8. FINANCIAL
STATEMENTS 20 ITEM
9. CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE 20 ITEM
9A. CONTROLS
AND PROCEDURES 20 ITEM
9B. OTHER
INFORMATION 22 PART
III 23 ITEM
10. DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE GOVERNANCE 23 ITEM
11. EXECUTIVE
COMPENSATION 26 ITEM
12. SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS 28 ITEM
13. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 29 ITEM
14. PRINCIPAL
ACCOUNTANT FEES AND SERVICES 30 PART
IV 30 ITEM
15. EXHIBITS 30 SIGNATURES 32               FORWARD-LOOKING STATEMENTS This
Annual Report on Form 10-K for the year ended December 31, 2010 contains
forward-looking statements that involve risks and uncertainties.
 Forward-looking statements in this document include, among others,
statements regarding our capital needs, business plans and expectations.
 Such forward-looking statements involve assumptions, risks and
uncertainties regarding, among others, the success of our business plan,
availability of funds, government regulations, operating costs, our ability to
achieve significant revenues, our business model and other factors.  Any
statements contained herein that are not statements of historical fact may be
deemed to be forward-looking statements.  In some cases, you can identify
forward-looking statements by terminology such as may, will, should,
expect, plan, intend, anticipate, believe, estimate, predict,
potential or continue, the negative of such terms or other comparable
terminology.  In evaluating these statements, you should consider various
factors, including the assumptions, risks and uncertainties set forth in reports
and other documents we have filed with or furnished to the Securities and
Exchange Commission.  These factors or any of them may cause our actual
results to differ materially from any forward-looking statement made in this
document.  While these forward-looking statements, and any assumptions upon
which they are based, are made in good faith and reflect our current judgment
regarding future events, our actual results will likely vary, sometimes
materially, from any estimates, predictions, projections, assumptions or other
future performance suggested herein.  The forward-looking statements in
this document are made as of the date of this document and we do not intend or
undertake to update any of the forward-looking statements to conform these
statements to actual results, except as required by applicable law, including
the securities laws of the United States. REFERENCES As
used in this Annual Report: (i) the terms Company, our company, we, us
and our refer to CellCyte Genetics Corporation, a Nevada corporation, and its
subsidiary, unless the context requires otherwise; (ii) references to CellCyte
mean CellCyte Genetics Corporation, a Washington corporation; and (iii) all
dollar amounts refer to United States dollars unless otherwise indicated. __________    -
1 -     PART
I    ITEM
1. BUSINESS  Overview General We
were incorporated under the laws of the State of Nevada on March 9, 2004 under
the name Shepard Inc.  On February 16, 2007, Shepard Inc. was merged with
a wholly-owned subsidiary, CellCyte Genetics Corporation, a Washington
Corporation, in contemplation of the acquisition of all of the issued and
outstanding shares of CellCyte and the name of our company was changed to
CellCyte Genetics Corporation. The
CellCyte Acquisition On
March 30, 2007, we completed the acquisition of all of the issued and
outstanding shares (the Purchased Shares) of CellCyte pursuant to a Share
Exchange Agreement among CellCyte, the stockholders of CellCyte (the Vendors)
and our company dated March 14, 2007 (the Share Exchange Agreement). Accounting
Treatment The
CellCyte acquisition constituted a recapitalization of our company and has been
accounted for in accordance with principles applicable to accounting for reverse
acquisitions with CellCyte, the legal subsidiary, being treated as the
accounting parent and our company, the legal parent, being treated as the
accounting subsidiary.  Accordingly, the consolidated results of operations
and cash flows of our company set forth in this Annual Report include those of
CellCyte for all periods presented and those of our company subsequent to the
date of the CellCyte acquisition. Our
Business Overview We
are a biotechnology company involved in research and development of medical
devices for cell expansion and maintenance. We
intend to focus our efforts over the next twelve months primarily on the
development of our cell expansion technology. These efforts will consist of
entering into collaborative research agreements with well-known, established
research organizations to utilize our patented CCG-E45 Culture Chamber product
to enhance their cell production efforts. In conjunction with these research
activities, our engineers will be developing alternative culture chamber
configurations to optimize specific cell categories. Under these collaborative
agreements, we will provide our CCG-E45 Incubators and Culture Chambers, and
onsite training and oversight. Our collaboration partners will provide staffing,
space and the cells types being tested. On
September 9, 2010, we finalized a collaborative research agreement with the Fred
Hutchison Cancer Research Center in Seattle, Washington. We expect to start
joint research activities under this agreement in the second quarter of
2011.  -
2 -     Our
Device Division Cell
Expansion and Maintenance We
have purchased a cell expansion technology that was intended as a complementary
addition to our therapeutic portfolio.  The technology has two patents
issued (Cell Production Bioreactor, US Patent Number 5,622,857 and Incubation
device, US Patent Number 5,882,918) and is in the development and prototype
testing stage. One of the principle advantages of this technology is superior
control of oxygenation of cells, achieved by the separation of oxygen and
nutrient-supply into dedicated bundles of hollow semi-permeable fibers. Stem
cells, islet cells and other cells are significantly influenced by oxygen. This
technology has demonstrated superior oxygenation by allowing cells to expand and
completely fill the bioreactor with viable cells.  A three-dimensional
bioreactor chamber with a volume of 17 ml, for example, has been shown to grow
over 10 billion hybridoma cells. In contrast, more traditional methods of cell
expansion using roller bottles or spinner flasks produce significantly fewer
viable cells, while using more raw materials. In addition, the cells can grow in
a three-dimensional network, thereby emulating some of the characteristics of
cell growth in solid organs.  Prior to our acquisition of this technology,
our bioreactor had already proven successful in growing, expanding and extending
the life of 14 different cell lines, including embryonic stem cells. One
possible application of our technology is in the expansion of umbilical cord
blood-derived stem cells. There are current therapies that could be augmented by
having access to more positive matched stem cells.  The number of stem
cells that can be collected from one individuals cord blood can only be used to
treat a child or a small adult by a single administration, even though the
therapy might require repeated injections.  Once a person reaches a certain
weight, there are not enough stem cells from a single individuals cord blood
for a therapeutic intervention. As an example, leukemia patients would fall in
this category, where cord blood transplants could positively impact developing
treatments by having more viable cells available.  If we are able to expand
matching stem cells from a single donor, we may have a  breakthrough for
multiple therapeutic interventions from a single source. Another
potential application of our technology is in the treatment of multiple myeloma.
 Widespread use of stem cell treatments for multiple myeloma patients has
not been possible to date, because the stem cells required for these
interventions must be immunologically identical or at least similar enough to
avoid adverse complications.  Therapy with autologous cells is often not an
option because the patients bone marrow contains tumor cells, and beneficial
stem cells from a donor (allogeneic stem cells) are not available in significant
numbers.  We believe our technology may provide sufficient quantities of
patient-matched stem cells to be generated for therapeutic interventions. As
stated previously, our cell expansion device is believed to emulate the
three-dimensional growth of cells in human solid organs, and for that reason we
have discussed its use as an artificial pancreas for islet cells to reside in
and produce insulin with physicians in diabetes research institutions. These
applications would be a therapeutic advancement to treat diabetes, one of the
worlds most pervasive, debilitating and growing diseases. Lastly,
an additional application for our technology is seen in the expansion of stem
cells and other cells for minorities, as stem cell banks for these populations
are very limited or do not currently exist. Our
Business Model Our
current business model focuses on the demonstration and development of our
bioreactor technology in collaboration with independent research organizations
to confirm the devices efficacy in a wide range of applications and uses to
support external research, to become an integral part of the process of bringing
research to market, and then in the ultimate production of end-use therapies and
products.  We intend to  -
3 -     position
our technology as a more efficient and cost effective means of expanding a wide
range of cell types, which has the ability to accelerate research into a broad
range of therapies. We
believe this model offers the shortest pathway to begin generating revenues.
 We believe our technologies and the following strategies will make this
possible: Focus
on Synergistic Technologies We
plan on only developing and commercializing discoveries with market demand that
have undergone research with positive outcomes.  Our current product
platform was chosen because it may offer a wide range of possible commercial and
therapeutic applications, either individually or in combination with other
product candidates, either those that we develop in-house or acquire, or those
of other companies.  We believe this approach may afford us the opportunity
to quickly advance our research and broaden our intellectual property portfolio
while mitigating risks and costs of early stage clinical development. Collaboration We
intend to continue to seek collaborations with biotechnology, pharmaceutical and
research organizations that would enhance the development and speed to market of
our product candidates.  We are seeking potential product candidates from
other companies that may not yet have shown to be viable therapeutics, but which
may do so in combination with one or more of our technologies. We
also intend to collaborate with nonprofit research organizations in applying for
State and Federal research grants to help fund the development of specific
configurations and applications of our bioreactor technology. Patents,
Proprietary Rights and Licenses We
believe that protection and defense of our intellectual property is critical to
our business.  Our know-how may also provide a significant competitive
advantage, and we may continue to develop and protect our proprietary know-how.
 We may also from time to time seek to acquire licenses to important
externally developed technologies. We
have exclusive rights to certain patents related to our products and methods of
deriving and using them.  These patents and patent applications include two
issued United States patents (Cell Production Bioreactor, US Patent Number
5,622,857 and Incubation device, US Patent Number 5,882,918). We also rely upon
trade-secret protection for our confidential and proprietary information and
take active measures to control access to that information. Our
policy is to require our employees, consultants and significant scientific
collaborators and sponsored researchers to execute confidentiality agreements
upon the commencement of an employment or consulting relationship.  These
agreements generally provide that all confidential information developed or made
known to the individual by us during the course of the individuals relationship
with us is to be kept confidential and not disclosed to third parties except in
specific circumstances.  In the case of employees and consultants, the
agreements generally provide that all inventions conceived by the individual in
the course of rendering services to us shall be our exclusive property. The
patent positions of biotechnology companies, including our company, are exposed
to the same uncertainties to which all patents are confronted and thus may
involve all of the corresponding complex and evolving legal and factual
questions.  The coverage sought in a patent application can be denied or
significantly reduced before or after the patent is issued.  Consequently,
we do not know whether any future applications will result in the issuance of
patents, or if any existing or future patents will provide significant
protection or commercial advantage or will be circumvented by others.
 Since patent  -
4 -     applications
are secret until the applications are published (usually eighteen months after
the earliest effective filing date), and since publication of discoveries in the
scientific or patent literature often lags behind actual discoveries, we cannot
be certain that we were the first to make the inventions covered by each pending
patent applications or that we were the first to file patent applications for
such inventions.  There can be no assurance that patents will issue from
future patent applications or, if issued, that such patents will be of
commercial benefit to us, afford us adequate protection from competing products,
or not be challenged or declared invalid. In
the event that a third party has also filed a patent application relating to
inventions claimed in our patent applications, we may have to participate in
interference proceedings declared by the United States Patent and Trademark
Office to determine priority of invention, which could result in substantial
uncertainties and cost, even if the eventual outcome is favorable to us.
 There can be no assurance that our patents, if issued, would be held valid
by a court of competent jurisdiction. A
number of biotechnology and other companies, universities and research
institutions have filed patent applications or have been issued patents relating
to cell expansion and maintenance and other technologies potentially relevant to
or required by our expected products.  We cannot predict which, if any, of
such applications will issue as patents or the claims that might be allowed. If
third party patents or patent applications contain claims infringed by our
technology and such claims or claims in issued patents are ultimately determined
to be valid, there can be no assurance that we would be able to obtain licenses
to these patents at a reasonable cost, if at all, or be able to develop or
obtain alternative non-infringing technology.  If we are unable to obtain
such licenses or develop or obtain alternative non-infringing technology at a
reasonable cost, we may not be able to develop certain products commercially.
 There can be no assurance that we will not be obliged to defend our
company in court against allegations of infringement of third party patents.
 Patent litigation is very expensive and could consume substantial
resources and create significant uncertainties.  An adverse outcome in such
a suit could subject us to significant liabilities to third parties, require us
to seek licenses from third parties, or require us to cease using such
technology. Research
and Development During
the years ended December 31, 2010 and 2009, we incurred no direct research and
development costs. During these periods we compensated our researchers through
the issuance of stock options. As these stock options vested, the related
expense has been recorded as stock compensation expense. At December 31, 2010
and 2009, the Company had $70,002 of capitalized patents. Our
previous research and development has consisted primarily of pre-clinical
research work by our employees and consultants, development of our cell
expansion and maintenance technology, and the licensing of patents and expenses
relating to pursuing and prosecuting a range of patent claims related to stem
cell delivery and purification.  During 2010 we did not have any employees
and our consultants were primarily focused on developing modifications to our
technology, and establishing collaboration agreements with research
laboratories. Over the next twelve months we intend to focus our efforts in
expanding our proof-of-concept collaborations around the cell expansion and
maintenance technology and allowing us to bring these products to market and
generate revenues for our company. Once
we have completed products ready for commercialization, we will evaluate our
various sales and marketing alternatives, including the licensing of our
technology to other companies, manufacturing and direct sales or entering into
marketing collaborations.  -
5 -     Competition It
is expected that our cell expansion and maintenance products will have to
compete with a variety of existing products and procedures.  In addition,
new products and methods for cell expansion are continuously being developed
and/or refined. There
are a wide range of methods currently being used in cell growth and expansion.
These methods include the standard two-dimensional culture plate or vessel,
roller bottles and T flasks. There are also a wide range of more refined methods
that include spinners, culture bags, plates suspended in culture, and closed
system bioreactors. Traditionally, the culture plate, culture bags, spinner
flasks and T flasks have been used for cell expansion because of their low cost,
ease of use, and visible nature.  The challenge to these current methods
though, is their low aeration, frequent need for cleaning and sterilization, and
large footprint. We
believe that our primary competition will come from other companies that have
developed or are in the process of developing and marketing closed system
bioreactors. Our technology uses our patented dual fiber method which allows the
inner fiber set to carry nutrients and the outer fiber set to supply oxygen.
Other methods include single fiber bioreactors (FiberCell Systems, Inc. and
McGowan Institute of Regenerative Medicine), permeable membrane style
bioreactors (Synthecon, Inc.), perfusion bioreactors (AmProtein Corporation) and
wave bioreactors (GE Healthcare). Each of these differing technologies is
looking at ways to create rapid, yet viable, cellular expansion.  We
believe that our patented technology has the opportunity to be one of the
standards in this fledgling market because of its distinctive blend of
attributes. Government
Regulation Our
research and development activities and the future manufacturing and marketing
of our products are, and will continue to be, subject to regulation for safety
and efficacy by numerous governmental authorities in the United States and other
countries. In
the United States, pharmaceuticals, biologicals and medical devices are subject
to rigorous FDA regulation.  The Federal Food, Drug and Cosmetic Act, as
amended, and the Public Health Service Act, as amended, the regulations
promulgated thereunder, and other Federal and State statutes and regulations
govern, among other things, the testing, manufacture, safety, efficacy,
labeling, storage, export, record keeping, approval, marketing, advertising and
promotion of our potential products.  Product development and approval
within this regulatory framework takes a number of years and involves
significant uncertainty combined with the expenditure of substantial resources.
 In addition, the federal, state, and other jurisdictions have restrictions
on the use of fetal tissue. FDA
Manufacturing Requirements Among
the conditions for product licensure is the requirement that the prospective
manufacturers quality control and manufacturing procedures conform to the FDAs
current good manufacturing practice (cGMP) requirements.  Even after
product licensure approval, the manufacturer must comply with cGMP on a
continuing basis, and what constitutes cGMP may change as the state of the art
of manufacturing changes.  Domestic manufacturing facilities are subject to
regular FDA inspections for cGMP compliance, which are normally held at least
every two years.  Foreign manufacturing facilities are subject to periodic
FDA inspections or inspections by the foreign regulatory authorities with
reciprocal inspection agreements with the FDA.  Domestic manufacturing
facilities may also be subject to inspection by foreign authorities. Upon
commercialization of our products, we intend to contract with fully compliant
and competent providers of these critical services.  -
6 -     Other
Regulations In
addition to safety regulations enforced by the FDA, we are also subject to
regulations under the Occupational Safety and Health Act, the Environmental
Protection Act, the Toxic Substances Control Act and other present and potential
future foreign, Federal, State and local regulations.  Employees We
currently have no full time employees and are relying on contractors and unpaid
management to continue development of our bioreactor technology and to seek
financing to enable the continuation of operations.  At this time, all key
contractors and management are compensated entirely through the grants of our
stock and stock options.  Where
You Can Find More Information You
may read and copy all or any portion of this Annual Report or any other
information that we file at the SECs public reference room at One Station
Place, 100 F Street, NE, Washington, DC 20549.  You can request copies
of these documents, upon payment of a duplicating fee, by writing to the SEC.
 Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the public reference room.  Our SEC filings, including this
Annual Report, are also available to you on the SECs website at www.sec.gov.  ITEM
1A.        RISK FACTORS An
investment in our common stock involves a number of significant risks.  You
should carefully consider the following risks and uncertainties in addition to
other information in this Annual Report in evaluating our company.  Our
business, operating results and financial condition could be seriously harmed
due to any of these risks.  The risks described below are not all of the
risks facing our company.  Additional risks not presently known to us or
that we currently consider immaterial may also impair our business operations.
 You may lose all or part of your investment due to any of these
risks. Our
financial situation is precarious and, based on currently estimated operating
expenses, our existing capital resources will not be sufficient to fund our
operations beyond the next three months. We
have incurred significant operating losses and negative cash flows from
operations since inception.  We have not achieved profitability and may not
be able to realize sufficient revenues to achieve or sustain profitability in
the future. We have limited liquidity and capital resources and must obtain
significant additional capital resources in order to sustain our product
development efforts and for general and administrative expenses and other
working capital requirements.  We have relied on proceeds from the sale of
certain excess lab equipment, proceeds from equity offerings and convertible
promissory notes, as well as the issuance of common stock to fund our
operations.  If we exhaust our cash reserves and are unable to realize
adequate financing, we may be unable to meet operating obligations and be
required to initiate bankruptcy proceedings.  Our existing capital
resources may not be sufficient to fund our operations beyond the next three
months. We
have not been able to raise significant amounts of cash from either equity or
debt financings. Our consultants and contractors have agreed to continue work
for the company in exchange for the issuance of unrestricted common stock and
common stock options. We
intend to pursue opportunities to obtain additional financing through equity and
debt financings, corporate alliances, research grants and collaborative research
arrangements.  However, the source, timing and availability of any future
financing will depend principally upon market conditions, interest rates and,
more specifically, on our progress in our research and development programs.
 Funding may not be  -
7 -     available
when needed, at all, or on terms acceptable to us.  Lack of necessary funds
may require us to delay, scale back or eliminate some or all of our research and
product development programs and/or our capital expenditures or to license our
potential products or technologies to third parties. Our independent registered public accounting firms report
states that there is a substantial doubt that we will be able to continue as a
going concern. Our independent registered public accounting firm, BehlerMick PS,
state in their audit report attached to our audited consolidated financial
statements for the years ended December 31, 2010 and 2009 that, since we have
sustained operating losses since inception, have limited cash resources, have
not generated any revenues to-date, these factors raise substantial doubt about
our ability to continue as a going concern. There can be no assurance that
acceptable financing to fund our ongoing operations can be obtained on suitable
terms, if at all. If we are unable to obtain the financing necessary to support
our operations, we may be unable to continue as a going concern. In that event,
we may be forced to cease operations and our stockholders could lose their
entire investment in our Company. We
may need but fail to obtain partners to support our development efforts and to
commercialize our technology. We
are relying on potential collaboration arrangements with outside research
organizations to help us to develop and commercialize our cell expansion and
maintenance technology. We are providing our incubators and bioreactors along
with our oversight to certain research organizations to assist with further
development. There is no certainty that these organizations will continue these
collaborations or that the results of these arrangements will prove successful.
If any of our collaborators terminates their relationship with us or we fail to
perform our obligations in a timely manner, the development or commercialization
of our technology and potential products may be adversely affected. If
we are not able to continue these collaborations, or to enter into new
arrangements, we will be required to slow down or discontinue our development
efforts due to a lack of resources. We
may not be awarded any State or federal research grants. We
will apply for State and Federal grants to help pay for the development of
specific uses for our bioreactor technology. Certain of these grants may require
that the application be submitted through a nonprofit research organization.
While we are currently pursuing one such collaborative grant application with
the Fred Hutchinson Cancer Research Center in Seattle, we may not be awarded any
research grants. We
have a history of operating losses, and we may fail to obtain revenues or become
profitable. We
expect to continue to incur substantial operating losses in the future in order
to conduct our research and development activities, and, if those activities are
successful, to fund production and other expenses.  These expenses include
the cost of acquiring necessary technology, product testing, acquiring
regulatory approvals, establishing production, marketing, sales and distribution
programs and administrative expenses.  We have not earned any revenues from
sales of any product.  We expect that any revenues we may earn in the
foreseeable future will be derived from the sale of consumable bioreactors,
cooperative agreements, research grants, investments and interest on invested
capital, assuming that we are successful in raising capital.  We currently
have no bioreactor product sales or current research grants, and we may not
obtain any such grants in the future or receive any revenues from product sales.  -
8 -     If
we are unable to protect our patents and proprietary rights, our business,
financial condition and results of operations will be harmed. We
own certain patents related to our cell expansion and maintenance technology.
 Patent protection for derivative products such as those we propose to
develop is highly uncertain and involves complex and continually evolving
factual and legal questions. The
governmental authorities that consider patent applications can deny or
significantly reduce the patent coverage requested in an application before or
after issuing the patent.  Consequently, we do not know whether any of our
future applications, should they be required for any derivative products, will
result in the issuance of patents, if any existing or future patents will
provide sufficient protection or significant commercial advantage or if others
will circumvent these patents. Patents
may not be issued from our future patent applications or, if issued, may not be
of commercial benefit to us.  In addition, our patents may not afford us
adequate protection from competing products.  Third parties may challenge
our patents or governmental authorities may declare them invalid or reduce their
scope.  In the event that a third party has also filed a patent application
relating to inventions claimed in our patent applications, we may have to
participate in proceedings to determine priority of invention.  Even if a
patent issues, a court could decide that the patent was issued invalidly.
 Because patents issue for a limited term, our patents may expire before we
utilize them profitably.   Procedures of the European Patent Office,
third parties may oppose our issued European patents during the relevant
opposition period.  These proceedings and oppositions could result in
substantial uncertainties and cost for us, even if the eventual outcome is
favorable to us, and the outcome might not be favorable to us. If
we learn of third parties who infringe our patent rights, we may need to
initiate legal proceedings to enforce our patent rights.  These proceedings
may entail significant costs, we may not have the resources to initiate or
continue such proceedings, and these third parties may have significantly
greater financial resources than us.  We may not prevail in these
proceedings. Proprietary
trade secrets and unpatented know-how are also important to our research and
development activities.  We cannot be certain that others will not
independently develop the same or similar technologies on their own or gain
access to our trade secrets or disclose such technology or that we will be able
to meaningfully protect our trade secrets and unpatented know-how.  We
require our employees, consultants, and significant scientific collaborators and
sponsored researchers to execute confidentiality agreements upon the
commencement of an employment or consulting relationship with us.  These
agreements may, however, fail to provide meaningful protection or adequate
remedies for us in the event of unauthorized use, transfer or disclosure of such
information or technology. If
we are unable to obtain necessary licenses to third-party patents and other
rights, we may not be able to commercially develop our expected products. A
number of pharmaceutical, biotechnology and other companies, universities and
research institutions have filed patent applications or have received patents
relating to cell expansion and maintenance and other technologies potentially
relevant to or necessary for our expected future products.  We cannot
predict which, if any, of the applications for patents on derivative products
will issue as patents, and there may be existing patents of which we are
currently unaware which the commercialization of our product candidates would
infringe.  If third party patents or patent applications contain valid
claims that our technology infringes upon their technology, we may be prevented
from commercializing that technology unless the third party is willing to grant
a license to us.  We may be unable to obtain licenses to the relevant
patents at a reasonable cost, if at all, and may also be unable to develop or
obtain alternative non-infringing technology.  If we are unable to obtain
such licenses or develop non-infringing technology at a reasonable cost, our
revenue opportunities could be materially reduced if our collaborations reveal
that derivative products are needed to generate a sustainable market share.
 Also, any infringement lawsuits  -
9 -     commenced
against us may result in significant costs, divert our managements attention
and result in an award against us for substantial damages. We
are aware of intellectual property rights held by third parties that potentially
relate to products or technologies for which we hold patents and are currently
commercializing.   We currently believe that the commercialization of
our products as currently planned will not infringe these third party rights,
or, alternatively, that we will be able to obtain necessary licenses or
otherwise use alternate non-infringing technology.  However, third parties
may nonetheless bring suit against us claiming infringement.  If we are
unable to prove that our technology does not infringe their patents, or if we
are unable to obtain necessary licenses or otherwise use alternative
non-infringing technology, we may not be able to commercialize any products. We
compete with companies that have significant advantages over us. It
is expected that our products will face competition from a variety of
potentially similar products and procedures.  Several larger and or better
funded companies currently offer a number of cell expansion products and methods
that are competitive to ours.    We believe that our products,
when and if successfully demonstrated in actual use, will compete with these
products principally on the basis of improved and extended efficacy and safety
and provide significant economic benefit to the health care research and
development projects that require cell expansion by reducing laboratory labor,
demand on laboratory equipment, and the attendant floor space required.  We
believe that our most significant competitors will be fully integrated
pharmaceutical companies and more established biotechnology companies.
 Smaller companies may also be significant competitors, particularly
through collaborative arrangements with large pharmaceutical or biotechnology
companies.  Many of these competitors have significant products approved or
in development that could be competitive with our products. If
we develop products that receive regulatory approval, we would then have to
compete for market acceptance and market share.  For certain of our
products, an important success factor will be the timing of market introduction
of competitive products.  This is a function of the relative speed with
which we and our competitors can develop products, complete the testing and
approval processes, and supply commercial quantities of a product to market. We
are dependent on the services of key consultants and contractors. We
are highly dependent on former members of our scientific and engineering staff
that have agreed to continue working as contractors until the company is able to
obtain additional funding.  Although we have entered into contractor
agreements with some of these individuals and will pay them through the issuance
of unrestricted common stock options subject to certain vesting requirements,
they may terminate their agreements at any time.  In addition, our
operations are dependent upon our ability to attract and retain additional
qualified scientific and management personnel.  We may not be able to
attract and retain the personnel we need on acceptable terms given the
competition for experienced personnel among pharmaceutical, biotechnology and
health care companies, universities and research institutions, and our current
financial condition. Our
activities involve hazardous materials; improper handling of these materials by
our employees, contractors or agents could expose us to significant legal and
financial penalties. Our
research and development activities involve the controlled use of hazardous
chemicals.  Their use subjects us to environmental and safety laws and
regulations such as those governing laboratory procedures.  Compliance with
current or future laws and regulations may be expensive and the cost of
compliance could adversely affect us.  -
10 -     Although
we believe that our safety procedures for using, handling, storing and disposing
of hazardous and potentially hazardous materials comply with the standards
prescribed by Washington and Federal regulations, the risk of accidental
contamination or injury from these materials cannot be eliminated.  In the
event of such an accident or of any violation of these or future laws and
regulations, state or federal authorities could curtail our use of these
materials; we could be liable for any civil damages that result, the cost of
which could be substantial; and we could be subjected to substantial fines or
penalties.  In addition, any failure by us to control the use, disposal,
removal or storage, or to adequately restrict the discharge, or to assist in the
cleanup of hazardous chemicals or hazardous, infectious or toxic substances
could subject us to significant liability.  Any such liability could exceed
our resources and could have a material adverse effect on our business,
financial condition and results of operations.  Moreover, an accident could
damage our research and manufacturing facilities and operations and result in
serious adverse effects on our business. We
have been subject to legal proceedings. Since our inception we have been the subject of certain lawsuits
and other legal proceedings. While these legal matters have all been settled or
dismissed, we expended virtually all of our resources in defending ourselves. Although all outstanding legal issues as of the date of this
Annual Report have been settled or dismissed, there is no certainty that new
legal issues may not arise, or, if they do, that we will have the resources
available to defend ourselves. We are dependent upon third-party suppliers for raw
materials needed for the manufacture of our products. If any of these third
parties fail or are unable to perform in a timely manner, our ability to
manufacture and deliver will be compromised. In order to produce our bioreactors, we require certain raw
materials used in our manufacturing process. These items must be manufactured
and supplied to us in sufficient quantities and in compliance with Good
Manufacturing Practices, or GMP. To meet these requirements, we will need to
enter into supply agreements with firms that manufacture these components to GMP
standards. Our requirements for these items are expected to increase if and when
we transition to the manufacture of commercial quantities of our products. We
have limited liquidity and capital resources and may not obtain the significant
capital resources we will need to sustain our research and development efforts. We
have limited liquidity and capital resources and must obtain substantial
additional capital to support our research and development programs, for
acquisition of technology and intellectual property rights and, to the extent we
decide to undertake these activities ourselves, establishment of production
capabilities, maintaining and enforcing our intellectually property portfolio,
establishment of marketing and sales capabilities and distribution channels, and
general administrative expenses.  If we do not obtain the necessary capital
resources, we may have to delay, reduce or eliminate some or all of our research
and development programs or license our technology or any potential products to
third parties rather than commercialize them ourselves.  We intend to
pursue our needed capital resources through equity and debt financings,
corporate alliances, grants and collaborative research arrangements.  We
may fail to obtain the necessary capital resources from any such sources when
needed or on terms acceptable to us.  Our ability to complete successfully
any such arrangements will depend upon market conditions and, more specifically,
on continued progress in our research and development efforts.  -
11 -     Our
stock price will likely be highly volatile, which may negatively affect our
ability to obtain additional financing in the future. The
market price of our stock is likely to be highly volatile due to the risks and
uncertainties described in this risk factors section, as well as other factors,
including: ? potential
lawsuits; ? our
ability to develop and successfully demonstrate our technology; ? our
ability to patent or obtain licenses to necessary technology for derivative
products, should such become necessary; ? competition
in our industry; ? price
and volume fluctuations in the stock market at large that are unrelated to our
operating performance; and ? Our
failure to meet market expectations. As
a result of this volatility, an investment in our stock is subject to
substantial risk.  Furthermore, the volatility of our stock price could
negatively impact our ability to raise capital in the future.   ITEM
2. PROPERTY We
are on a month-to-month lease located at 14205 SE 36th Street, Suite
100, Bellevue, WA, 98006.        ITEM
3. LEGAL
PROCEEDINGS We are not currently a party to any legal proceedings.   ITEM
4. [REMOVED
AND RESERVED] None.   PART
II   ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market
Information Market
for our Common Stock Our
shares of common stock are quoted for trading on the OTC Bulletin Board under
the symbol CCYG.  The following table sets forth the high and low trading
prices of our shares of common stock on the OTCBB for the periods indicated.
 The source of the information is the OTCBB.  The market quotations
provided reflect inter-dealer prices, without retail mark-up, mark-down or
commissions and may not represent actual transactions. Quarter Ended
High Bid
Low BidMarch
31, 2009
0.075
0.065June
30, 2009
0.076
0.076September
30, 2009
0.070
0.052December
31, 2009
0.035
0.030March
31, 2010
0.034
0.027June
30, 2010
0.021
0.020  -
12 -      September
30, 2010
0.018
0.013December
31, 2010
0.015
0.010 On
April 13, 2011, the closing sales price of our shares of common stock on the
OTCBB was $0.017 per share. Holders
of Our Common Stock As
of the date of this report, we have 168 stockholders of record. Dividends There
are no restrictions in our Articles of Incorporation or Bylaws that restrict us
from declaring dividends.  The Nevada Revised Statutes, however, do
prohibit us from declaring dividends where, after giving effect to the
distribution of the dividend: (a) we
would not be able to pay our debts as they become due in the usual course of
business; or (b) our
total assets would be less than the sum of our total liabilities, plus the
amount that would be needed to satisfy the rights of stockholders who have
preferential rights superior to those receiving the distribution. We
have not declared any dividends.  We do not plan to declare any dividends
in the foreseeable future. Equity
Compensation Plans The
table set forth below presents information relating to our equity compensation
plans as of the date of this Annual Report: Plan Category
Number of Securities to be Issued Upon Exercise of
Outstanding Options, Warrants and Rights (a)
Weighted-Average Exercise Price of Outstanding Options,
Warrants and Rights(b)
Number of Securities Remaining Available for Future
Issuance Under Equity Compensation Plans (excluding column
(a))Equity
Compensation Plans Approved by Security Holders(1)
35,364,230
$0.107
17,005,000Equity
Compensation Plans Not Approved by Security Holders
-
-
- (1) During
the year ended December 31, 2010 we granted options to acquire 19,700,000 shares
of our common stock at prices between $0.035 and $0.018 per share pursuant to
our Revised 2009 Stock Incentive Plan for Employees and Consultants. During the
year ended December 31, 2009, we granted options to acquire 15,810,000 shares of
our common stock at exercise prices between $0.07 and $0.035 per share, pursuant
to our Revised 2009 Stock Incentive Plan for Employees and Consultants Note:
See Note 5 to the Consolidated Financial Statements for complete information on
the assumptions used in the valuation of our common stock warrants and stock
options.   -
13 -     **Outstanding Equity Awards to Our Officers at Fiscal
Year-End** Name
and Principal Position
Number of  Securities Underlying Unexercised options
that are exercisable (#) (b)
Equity  Incentive  Plan  Awards:  Number
of Securities Underlying  Unexercisable  Options (#)
 (c)
Equity Incentive Plan Awards: Number of  Securities
 Underlying  Unexercised  Unearned  Options  (#)
(d)
Option Exercise Price
($) (e)
Option  Expiration Date
($) (f)
Number of  Shares of  Stock that  have not
Vested (#) (g)
Market  Value of  Shares of   Stock that
have not Vested
($) (h)
Equity Incentive  Plan Awards:  Number of
 Unearned Shares,  Units or  Other  Rights that
 have not Vested (#) (i)
Equity Incentive  Plan Awards:  Market or
 Payout Value  of Unearned  Shares, Units  or other
 Rights that  have not  Vested
($) (j)John
M. Fluke, Jr., Principal Executive Officer
150,000
8,000,000
4,200,000
6,600,000
-
-
-
-
-
-
-
-
1.50
0.07
0.035
0.018
3/30/17
5/19/14
1/12/15
8/24/15
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-Randy
 Lieber, Principal Accounting Officer
3,000,000
4,200,000
-
-
-
-
0.07
0.035
5/19/14
1/12/15
-
-
-
-
-
-
-
-Douglas
Cerretti,
President
100,000
1,000,000
1,250,000
-
-
-
-
-
1,250,000 (1)
0.52
0.07
0.02
5/13/13
5/19/14
7/22/15
-
-
-
-
-
-
-
-
-
-
-
17,500  (1) The
remaining options for 1,250,000 shares of common stock vest upon the achievement
of certain milestones, which include the execution of targeted collaboration
agreements and the receipt of customer purchase orders.     ITEM
6. SELECTED
FINANCIAL DATA Not
applicable.  ITEM
7. MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The
following discussion of our plan of operations, results of operations and
financial condition should be read in conjunction with our audited financial
statements for the years ended December 31, 2010 and 2009 and the section of
this Annual Report entitled Description of Business. The
following discussion contains forward-looking statements that reflect our plans,
estimates and beliefs. Our actual results could differ materially from those
discussed in the forward looking statements. Factors that could cause or
contribute to such differences include, but are not limited to, those discussed
below and elsewhere in this Annual Report, particularly in the section entitled
Description of Business - Risk Factors.  -
14 -     Plan
of Operations Our operations over the next 12 months will be limited by the
amount of resources we are able to raise, and the willingness of our contractors
and consultants to work for stock and stock option compensation. Accordingly, we
have developed an Interim Operating Plan that may allow us to complete certain
limited research and development activities while we attempt to raise adequate
funding to restart our business. Our plan of operations under our Interim Operating Plan for the
next 12 months is to: (a) perform the work specified by out Interim Operating Plan under
recently executed contracts with our scientists and manufacturing
consultants.. (b) apply for State and Federal research grants to develop specific
configurations and applications of the bioreactor device. (c) support the beta testing of our bioreactor product as specified in
our agreements with independent research laboratories to maximize the
possibility that such labs will adopt our bioreactor technology to satisfy their
cell expansion needs. (d) continue small scale manufacturing of our cell expansion culture
chambers, as needed, to maintain an adequate supply of bioreactors for the
academic and institutional research organizations with which we have beta
testing collaboration agreements. (e) locate and occupy new office, lab and manufacturing space if
required to execute our Interim Operating Plan. Over the next 12 months we anticipate that we will require an
aggregate of $700,000 in cash and stock-based compensation to cover expenses and
debt service, including certain accounts payable, as follows: (a) $50,000 for facility and equipment related expenses; (b) $60,000 for debt service; (c) $120,000 for pre-clinical work, quality assurance, manufacturing
of biologic material, academic collaborations and further research
collaborations; (d) $80,000 for design and device manufacturing; (e) $150,000 for legal expenses related to general corporate matters,
accounting expenses related to quarterly reviews and annual audits; (f) $125,000 for salaries and consulting; and (g) $115,000 for general and administrative, insurance and public
relations. During
the next 12 months we anticipate that we will generate minimal non-recurring
engineering (NRE) service revenue and revenue from the sale and licensing of our
incubator and bioreactor device technology.  We had no cash and cash
equivalents and a working capital deficit of $(906,697) at December 31, 2010.
 We presently do not have sufficient cash to fund our operations, and have
curtailed substantially all activities, other than those called for by the
execution of our Interim Operating Plan. During
the period covered by our Interim Operating Plan, we expect to fund our
operations through a combination of the sale of excess laboratory equipment,
issuances of stock, including issuances of stock and stock options registered
pursuant to an S-8 registration statement, as payment in-kind to our  -
15 -     independent
contractors, consultants and other service providers, and the issuance of
convertible loans from current stockholders and other investors. However, there
is no certainty that we will be able to obtain these loans on commercially
reasonable terms or when needed, or that they will be sufficient to meet our
cash requirements. Accordingly, we anticipate that we will require additional
financing to enable us to pay our planned expenses and debt service for the next
12 months and pursue our plan of operations. At
this time, we cannot accurately estimate a date of transition from operating
under our Interim Operating Plan to a state in which our operations will be
funded by a combination of equity funding and cash provided from bioreactor and
incubator sales. Further, there is no assurance that our research, product and
device demonstration program will result in significant revenues, or that we
will obtain the cash necessary to fund the Interim Operating Plan. Subsequent
to the 12 month period following the date of this Annual Report, we will be
required to obtain additional financing in order to continue to pursue our
business plan.  We cannot accurately predict the amount of additional
capital that will be required, nor the extent to which this will consist of
equity or debt financing. We
cannot provide investors with any assurance that we will be able to raise
sufficient funding from the issuance of promissory notes or the sale of our
common stock to fund our business plan going forward.  In the absence of
such financing, our business plan will fail. Results
of Operations The
following table sets forth selected financial information relating to our
company for the periods indicated: Year Ended December 31, 2010
Year Ended December 31, 2009Revenues
$
-
$
-Operating
expensesConsulting
(500)
(37,509)General
and administrative
(177,173)
(418,290)Professional
fees
(139,591)
(405,863)Stock-based
compensation
(438,690)
(476,000)Other
expense, net
(43,278)
(91,775)Net loss
(799,232)
(1,420,437) We
have been funding our operations primarily by way of private placements of
shares of our common stock and the issuance of convertible promissory notes.
 We will require additional capital to meet our immediate and long term
operating requirements. We expect to raise additional capital through, among
other things, the sale of equity or debt securities. Year
Ended December 31, 2010 Compared to Year Ended December 31, 2009 Revenues We
have had no operating revenues since our inception on January 4, 2005, to
December 31, 2010.  We anticipate that we will not generate any significant
revenues for so long as we are a development stage company.  -
16 -     Consulting
Expenses We
had consulting expenses of $500 in the year ended December 31, 2010, compared to
$37,509 in the year ended December 31, 2009. Contractors and consultants were
compensated primarily with stock options for services in 2010 and 2009.
Accordingly, the related expense has been recorded as stock-based
compensation. General
and Administrative Expenses Our
general and administrative expenses in the year ended December 31, 2010
decreased to $177,173 from $418,290 in 2009, primarily as a result of the
reduction in rent and related operating costs. Professional
Fees In
the year ended December 31, 2010, we incurred professional fees of $139,591,
compared to $405,863 in 2009, primarily as a result of the reduction in legal
fees associated with the settlement of various legal matters. Stock-Based
Compensation In
the year ended December 31, 2010, we incurred stock-based compensation expense
of $438,690, compared to $467,000 in 2009, directly related to the use of
options to compensate our consultants and Board members for their work on our
behalf. Other
Expense, net In
the year ended December 31, 2010, other expense of $43, 278 was primarily
related to interest and finance charges, whereas other expense in 2009 consisted
of interest and finance charges, and a loss on disposal of furniture and
equipment, partially offset by a gain on extinguishment of debt. Net
Loss As
a result of the above, our net loss for the year ended December 31, 2010 was
$799,232, compared to $1,420,437 in 2009. Liquidity
and Capital Resources As
of December 31, 2010, we had no cash and a working capital deficit of
$(906,697).  Our planned expenditures over the next twelve months are
expected to amount to approximately $700,000 and will exceed our cash reserves
and working capital.  We presently do not have sufficient cash to fund our
operations and have curtailed significantly all activities. We will require
additional financing in order to pursue our plan of operations for the next
twelve months.  There can be no assurance that we will obtain any
additional financing in the amounts required or on terms favorable to us.
 If we are unable to obtain additional financing, we may have to reduce or
abandon our business activities and plan of operations. We
believe that general debt financing will not be an alternative for funding, as
we do not have tangible assets to secure any debt financing.  We anticipate
that additional funding will be in the form of convertible loans and/or equity
financing from the sale of our common stock, the sale of excess equipment, and
from State and federal research grants.  However, we cannot provide
investors with any assurance that we will be able to raise sufficient funding
from any of these sources to fund our plan of operations going forward.  In
the absence of such financing, our business plan will fail.  Even if we are
successful in obtaining financing, there is no assurance that we will obtain the
funding necessary to  -
17 -     pursue
our business plan.  If we do not continue to obtain additional financing
going forward, we will be forced to abandon our plan of operations. Cash
Used in Operating Activities Cash
used in operating activities in the year ended December 31, 2010, was
$80,227, compared to $29,240 in the year ended December 31, 2009.
 Cash used for operating activities in 2010 and 2009 was primarily limited
to debt service, month-to-month facility lease, and outside accounting
services. Cash
Provided by Investing Activities In
the year ended December 31, 2010, investing activities provided cash of
$71,240, compared to providing cash of $36,225 in the year ended
December 31, 2009. Cash was primarily provided by selling excess equipment
to help fund our operations. Cash
Provided By (Used in) Financing Activities We
have funded our business to date primarily from sales of our common stock and
the issuance of convertible debt.  In the year ended December 31,
2010, financing activities provided cash in the amount of $1,686, compared to
using cash in the amount of $5,988 in the year ended December 31, 2009. Going
Concern As
shown in the accompanying financial statements, we have incurred significant
losses since inception and have not generated any revenues to date.  The
future of our company is dependent upon our ability to obtain sufficient
financing and upon achieving future profitable operations.  These factors,
among others, raise substantial doubt about our companys ability to continue as
a going concern.  The accompanying consolidated financial statements do not
include any adjustments that might result from the outcome of this
uncertainty. Future
Financings We
anticipate continuing to rely on sales of our common stock, advances and
convertible loans from our stockholders, and the issuance of stock options to
our contractors to fund our business operations.   Issuances of
additional shares will result in dilution to our existing stockholders.
 There is no assurance that we will achieve any additional sales of our
equity securities or arrange for debt or other financing to fund our business
plan. Off-Balance
Sheet Arrangements We
have no off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that are material to investors. Material
Commitments On August 14, 2009, we finalized a lease termination agreement
with our landlord whereby we executed a promissory note in the amount of
$275,000, provided certain other concessions, and agreed to vacate our facility.
The promissory note bears interest at the annual rate of 12%, has monthly
payments of $5,000, and is collateralized by all of the remaining assets of the
Company. On August 25, 2010, we entered into a forbearance agreement with
our previous landlord whereby the landlord would forbear enforcement of its
claims and causes of actions upon the following terms:  -
18 -     1. A payment of $25,000 on or before December 21, 2010, and 2. Commencing July 1, 2011 and on the first day of each month
thereafter, for a total of six months ending December 1, 2011, a payment of
$5,000. These payments will be first applied to all accrued but unpaid
interest, with the remainder to be applied against principal of the previously
executed promissory note. In addition, each of these payments are personally
guaranteed by an officer/stockholder of the Company. Critical
Accounting Policies Our
financial statements are impacted by the accounting policies used and the
estimates and assumptions made by management during their preparation.  A
complete summary of these policies is included in Note 2 of the notes to
our financial statements.  We have identified below the accounting policies
that are of particular importance in the presentation of our financial position,
results of operations and cash flows and which require the application of
significant judgment by management. Use
of Estimates Our
financial statements and accompanying notes have been prepared in accordance
with United States generally accepted accounting principles applied on a
consistent basis and include certain estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period.  Actual results may differ from those estimates. Income
Taxes We
follow the provisions of FASB ASC 740, Income Taxes, under which deferred tax
assets and liabilities are determined based on differences between financial
reporting and tax basis of assets and liabilities. Deferred tax assets and
liabilities are measured using the enacted tax rates and laws that are expected
to be in effect when the differences are expected to reverse.  The
provisions of ASC 740 also require the recognition of future tax benefits such
as net operating loss carry-forwards, to the extent that the realization of such
benefits is more likely than not.  To the extent that it is more likely
than not that such benefits will not be received, we record a valuation
allowance against the related deferred tax asset. Intangible
Assets Our intangible assets primarily consist of patents and
intellectual property, which are carried at the purchase price and/or the legal
cost to obtain them less accumulated amortization. Patents and licenses are
being amortized over their estimated useful lives, which range from seven to
seventeen years. Annually these assets are reviewed for recoverability to
determine if the carrying amount on the balance sheet is appropriate. Research
and Development Costs Research and development costs are expensed as incurred.  The
cost of intellectual property purchased from others that is immediately
marketable or that has an alternative future use is capitalized and amortized as
intangible assets.  Capitalized costs are amortized using the straight-line
method over the estimated economic life of the related asset.  We
periodically review our capitalized intangible assets to assess recoverability
based on the projected undiscounted cash flows from operations, and impairments
are recognized in operating results when a permanent diminution in value
occurs.  -
19 -     **Stock-Based
Compensation** We
account for our stock option plan primarily under the recognition and
measurement principles of FASB ASC 718, Compensation  Stock Compensation
Accordingly, compensation cost has been recognized using the fair value method
and expected term accrual requirements as prescribed in ASC 718. We recorded
stock-based compensation expense in the amount of $438,690 during the year ended
December 31, 2010. Recent
Accounting Pronouncements      In
January 2010, the FASB issued ASU No. 2010-06, Improving Disclosures about Fair
Value Measurements (ASU 2010-06) (codified within ASC 820 Fair Value
Measurements and Disclosures). ASU 2010-06 improves disclosures originally
required under SFAS No. 157. ASU 2010-16 is effective for interim and annual
periods beginning after December 15, 2009, except for the disclosures about
purchases, sales, issuances and settlements in the roll forward of activity in
Level 3 fair value measurements. Those disclosures are effective for fiscal
years beginning after December 15, 2010, and for interim periods within those
years. We will comply with the additional disclosures required by this guidance
upon its adoption in January 2011.    ITEM
8. FINANCIAL
STATEMENTS We
have filed as part of this Annual Report our audited financial statements as of
and for the years ended December 31, 2010 and 2009, and the related notes to
these financial statements. These financial statements are set forth in this
Annual Report beginning on page F-1 below, and are incorporated by reference in
this Item 8.   ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE There
were no changes or disagreements with our accountants on accounting and
financial disclosure during the two previous fiscal years. BehlerMick
PS have not been consulted on any matter relating to the application of
accounting principles to a specific transaction, either completed or
contemplated, or the type of audit opinion that might be rendered on our
company's financial statements.   ITEM
9A. CONTROLS
AND PROCEDURES Evaluation
of Disclosure Controls and Procedures In
connection with the preparation of this annual report on Form 10-K, an
evaluation was carried out by CellCyte Genetic Corporations management, with
the participation of the Principal Executive Officer and Principal Accounting
Officer, of the effectiveness of CellCyte Genetic Corporations disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934 (Exchange Act)) as of December 31, 2010.
 Disclosure controls and procedures are designed to ensure that information
required to be disclosed in reports filed or submitted under the Exchange Act is
recorded, processed, summarized, and reported within the time periods specified
in the SEC rules and forms and that such information is accumulated and
communicated to management, including the Principal Executive Officer and the
Principal Accounting Officer, to allow timely decisions regarding required
disclosures.  -
20 -     During
the evaluation of disclosure controls and procedures as of December 31, 2010,
management identified material weaknesses in internal control over financial
reporting, which management considers an integral component of disclosure
controls and procedures. Material weaknesses identified include the lack of any
segregation of duties, lack of appropriate accounting policies, journal entry
documentation procedures and managements assessment of internal control over
financial reporting. As a result of the material weaknesses identified,
management concluded that CellCyte Genetics Corporations disclosure controls
and procedures were not effective. Notwithstanding the existence of these material weaknesses,
CellCyte Genetics Corporation believes that the consolidated financial
statements in this annual report on Form 10-K fairly present, in all material
respects, CellCyte Genetics Corporations financial condition as of December 31,
2010 and 2009, and results of its operations and cash flows for the years ended
December 31, 2010 and 2009, in conformity with United States generally accepted
accounting principles (GAAP). Managements
Report on Internal Control Over Financial Reporting Management
of CellCyte Genetic Corporation is responsible for establishing and maintaining
adequate internal control over financial reporting.  CellCyte Genetic
Corporations internal control over financial reporting is a process, under the
supervision of the Principal Executive Officer and the Principal Accounting
Officer, designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of the companys financial statements
for external purposes in accordance with United States generally accepted
accounting principles.  Internal control over financial reporting includes
those policies and procedures that:  · Pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of the companys
assets; · Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of the financial statements in accordance with
generally accepted accounting principles, and that receipts and expenditures are
being made only in accordance with authorizations of management and the Board of
Directors; and · 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. CellCyte
Genetic Corporations management conducted an assessment of the effectiveness of
the companys internal control over financial reporting as of December 31, 2010,
based on criteria established in Internal Control  Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). As a result of this assessment, management identified material
weaknesses in internal control over financial reporting. A
material weakness is a control deficiency, or a combination of deficiencies, in
internal control over financial reporting such that there is a reasonable
possibility that a material misstatement of CellCyte Genetics Corporations
annual or interim financial statements will not be prevented or detected on a
timely basis.  The material
weaknesses identified are disclosed below.   -
21 -     Ineffective Oversight of Financial Reporting.
 CellCyte Genetics Corporation has not provided an appropriate level of
oversight of the financial reporting process and has not appropriately monitored
the Companys system of internal control.  The Companys monitoring of
managements assessment of internal control over financial reporting did not
result in appropriate actions taken by management to remedy the deficiencies in
the process to assess internal control over financial reporting. The Company no
longer has an independent audit committee overseeing the financial reporting
process.  Lack
of Appropriate Accounting Policies, Procedures, and Personnel.
 Management of CellCyte Genetics Corporation has not established with
appropriate rigor the accounting policies, procedures, and documentation of
significant judgments and estimates made by management in the preparation of the
financial statements, including accounting policies related to accounting for
asset impairments. In addition, management has not appropriately assessed the
risk to reliable financial reporting related to the effects of unfilled key
financial reporting position(s). Journal
Entry Documentation and Procedures.  Journal entries are the principal
means by which CellCyte Genetics Corporations books and records are compiled
for financial reporting purposes, and management has not established a formal
policy for the processing of journal entries, including required supporting
documentation, review, and approval.  Testing of the documentation, review,
and approval of journal entries made in the accounting records of the Company
confirmed that the Company has not maintained records that, in reasonable
detail, accurately and fairly reflect the transactions of the Company.
 Documentation to support journal entries made was missing, inadequate, and
lacked any evidence of approval. As
a result of the material weaknesses in internal control over financial reporting
described above, CellCyte Genetics Corporations management has concluded that,
as of December 31, 2010, the CellCyte Genetics Corporations internal control
over financial reporting was not effective based on the criteria in Internal
Control  Integrated Framework issued by the COSO. This
annual report does not include an attestation report of the Companys
independent registered public accounting firm regarding internal control over
financial reporting.  We were not required to have, nor have we, engaged
the Companys independent registered public accounting firm to perform an audit
of internal control over financial reporting pursuant to the rules of the
Securities and Exchange Commission that permit us to provide only managements
report in this annual report. Changes
in Internal Control over Financial Reporting There
were no changes in our internal control over financial reporting (as defined in
Rule 13a-15(d) under the Exchange Act) during the year ended December 31, 2010
that may  materially affect, or is reasonably likely to materially affect,
our internal control over financial reporting. We have previously disclosed the
suspension of a significant portion of the Companys operations, and the
appointment of the Audit Committee Chairman, previously an independent director,
as the Interim Principal Executive Officer.   ITEM
9B. OTHER
INFORMATION Not
applicable. __________    -
22 -     **PART
III**   ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE
GOVERNANCE Our
directors and executive officers and their respective ages as of the end of the
fiscal year covered by this Annual Report are as follows: Name
andMunicipality of Residence
Age
Current Office withCellCyte Genetics
Corporation
Director or Officer SinceRandy A. Lieber
Issaquah, Washington,
USA
54
Principal
Accounting Officer and a director
November 24,
2008John M. Fluke,
Jr.Bellevue, Washington, U.S.A.
68
Interim Principal Executive
Officer and a director
June 1,
2007Dr. Douglas P. Cerretti,
PhDShoreline, Washington, U.S.A.
60
President
July 24,
2010 The
following is a description of the business background of the directors and
executive officers of our company: John
M. Fluke, Jr.  Interim Principal Executive Officer and a director Mr.
Fluke, age 68, is the Chairman of Fluke Capital Management, LP; the Fluke
family's investment and trust management company. He founded the company in
1976. Mr. Fluke graduated from the University of Washington in 1964, with a
Bachelor of Science Degree in Electrical Engineering, and received his Master's
Degree in Electrical Engineering from Stanford University in 1966. Mr.
Fluke joined his father's firm, John Fluke Mfg. Co., in 1966 as a design
engineer and held various engineering and general management positions. He was
elected to the board of that company in 1976, appointed Chief Executive Officer
in 1983 and Chairman from 1984. He served as CEO through 1987, Chairman through
1990 and a director of the Fluke Corp. through July 1998 when the company was
acquired by Danaher Corporation. Mr.
Fluke currently serves on the Boards of two emerging - or re-emerging -
companies: Metron Systems, Inc. (maker of precision laser scanning systems for
use in quality assurance in manufacturing) and MaestroSoft, Inc. (maker of
charitable event management software). Over the last three decades many of Mr.
Fluke's governance positions with smaller companies have required direct and
frequent interaction with management to balance the achievement (or maintenance)
of cash flow positive performance without deviating from best governance
practices. Mr.
Fluke is a director of PACCAR Inc. (since 1984), where he also serves as audit
committee financial expert and chairman of the Nominating and Governance
Committee. He also currently serves as a director of Tully's Coffee Company
(since 2005) and chairs its audit committee. Mr. Fluke is a former director and
chairman of the audit committee for PRIMUS International (2003 to 2006) and
American Seafoods Group (2003 to 2006) where he served on the audit committee.
He has also served on the boards and audit committees of Peoples National Bank
(1984 to 1993) and US Bank of Washington (1993 to 1997). Mr.
Fluke is a past Chairman of the Greater Seattle Chamber of Commerce (1993) and
continues to serve on its board and is a past Chairman of the Washington State
China Relations Council (1985 to 1987). He concurrently served as a national
board member of the American Electronics Association and the National  -
23 -     Association
of Manufacturers as well as the Executive Committees of both trade organizations
(1985 to 1990). Mr.
Fluke served as a member of the University of Washington's Engineering Visiting
Committee (1982 - 2005), the University of Washington Foster School of Business
Advisory Board (since 1987), the University of Washington Applied Physics
Laboratory Advisory Board (since 1992) and the Pacific Museum of Flight (since
1988). He also is past Chairman of the board of Junior Achievement of Washington
and was a member of the board of the Washington Policy Center. Mr. Fluke
previously served on the Stanford University Engineering Advisory Council (1985
to 1989). He is a trustee-emeritus of the University of Puget Sound (1984-2002),
a past trustee of St. Thomas School of Medina, WA (1988 to 1995) and served on
the Washington State Higher Education Coordinating Board (1987 to 2000) and the
Washington Business Roundtable and its Education Committee (1984 to 2001). Mr.
Fluke is a past President of PONCHO (1993), Seattle's oldest fund-raising
auction for the arts, a past President of the Seattle Council of the Boy Scouts
of America (1984 to 1985) and a former member of the boards of the Seattle
Symphony Orchestra (1981 to 1990), the 5th Avenue Theater Association (1985 to
1990) and the Nature Conservancy (1997 to 2001). Randy A. Lieber 
Principal Accounting Officer and a director  Mr.
Lieber, age 54, is a senior financial professional with more than 29 years of
experience working with both public and private companies. He is also the Chief
Financial Officer of Blink Interactive, Inc., a user experience, research and
design firm.  Mr.
Lieber started his professional career at Coopers &
Lybrand/PricewaterhouseCoopers (PwC) where he spent 14 years working with a wide
range of companies including software, semi-conductor, bio-technology and
Internet companies. While at PwC, he was involved in more than 10 initial and
follow-on public offerings, financial reporting to the Securities and Exchange
Commission (SEC), and provided buy-side consulting and due diligence on mergers
and acquisitions.  Subsequent to his tenure at PwC, Mr. Lieber was the Director of
Finance at a $500 million international public company, Chief Financial Officer
of an internet startup company, and more recently, as the Chief Financial
Officer of Ascentium Corporation, a technology and marketing consulting firm. He
joined Ascentium shortly after it was founded in 2001 and was instrumental in
helping it to grow to annual revenues of $75 Million with offices in seven
cities, including London. He was responsible for all finance, accounting, human
resources, and facilities.  Mr.
Lieber has BS degree in accounting from Central Washington University and became
a CPA in Alaska in 1987 and in California in 1996. He is on the Board of
Directors of the Greater Seattle USBC Youth Bowling Association and the Greater
Seattle USBC Association.  Douglas Pat
Cerretti, PhD  President  Dr. Cerretti, age 60,
is a biopharmaceutical research scientist with experience in drug development in
inflammation and cancer. From 1984 to 2002 he served with Immunex and, after
Immunex acquisition in 2002, with Amgen in positions ranging from Staff
Scientist through Scientific Director. Dr. Cerretti retired from Amgen in 2007.
He is the author or co-author of more than 100 scientific publications and has
over 40 issued US Patents to his name.  Dr.
Cerretti has worked with our Company since October 2009, initially as our Chief
Science Officer and Director of Business Development, where he helped formulate
our scientific and business strategies.  He has also worked as a senior
scientific consultant through DPC BioPharma Consulting of Seattle,  -
24 -     Washington since 2008, formulating a business plan and scientific
strategies for a potential stem cell product.  From 2002 through
2007, Dr. Cerretti served as Scientific Director and Senior Research Scientist,
Department of Cancer Biology for Amgen Corporation.  From 1984 through
2002, he served as a Senior Research Scientist for Immunex Corporation within
their departments of Vascular and Molecular Biology. Term
of Office Our
directors are appointed for a one-year term to hold office until the next annual
general meeting of our stockholders or until removed from office in accordance
with our Bylaws.  Our officers are appointed by our Board of Directors and
hold office until removed by the board. Significant
Employees As
of the date of this Annual Report, we had no paid employees. The management team
has agreed to remain involved with no guarantee of payment for these services.
In addition, certain members of our scientific and operations staff have agreed
to remain on as contractors. These members will be compensated through the
issuance of the companys unrestricted common stock. Family
Relationships None
of the directors, officers or the significant employees of our company are
related to one another. Conflicts
of Interest We
do not have any procedures in place to address conflicts of interest that may
arise between our business and our directors other business activities.
 We are not aware of any existing conflicts between us and our directors
other business activities. Audit
Committee The
sole member of our current Audit Committee is Mr. Fluke. Our
Board of Directors has determined that Mr. Fluke qualifies as a financial
expert. None of our executive officers are independent according to the
standards for independence prescribed by the American, NASDAQ or NYSE Stock
Exchanges. Involvement
in Certain Legal Proceedings None
of our directors, executive officers, significant employees or control persons
has been involved in any of the events prescribed by Item 401(f) of Regulation
S-K during the past ten years, including: 1. any
bankruptcy petition filed by or against any business of which such person was a
general partner or executive officer either at the time of the bankruptcy or
within two years prior to that time; 2. any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor offenses); 3. being
subject to any order, judgment, or decree, not subsequently reversed, suspended
or vacated, of any court of competent jurisdiction, permanently or temporarily
enjoining, barring, suspending or otherwise limiting his involvement in any type
of business, securities or banking activities; or  -
25 -     4. being
found by a court of competent jurisdiction (in a civil action), the Commission
or the Commodity Futures Trading Commission to have violated a federal or state
securities or commodities law, and the judgment has not been reversed,
suspended, or vacated. Compliance
with Section 16(a) of the Securities Exchange Act Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our
executive officers and directors, and persons who beneficially own more than ten
percent of our equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission.  Officers, directors
and greater than ten percent stockholders are required by SEC regulation to
furnish us with copies of all Section 16(a) forms they file.  Based upon
these forms, our officers, directors and ten percent stockholders were in
compliance during the fiscal year ended December 31, 2010. Code
of Ethics We
have not as yet adopted a Code of Ethics.  We plan to adopt a Code of
Ethics applicable to our directors, officers and employees in 2011 following the
resumption of operations.   ITEM
11. EXECUTIVE
COMPENSATION Summary
Compensation The
following table sets forth the compensation paid to our Principal Executive and
Accounting Officers. No other executive officer earned more than $100,000 in
2010 or 2009 (the Named Executive Officers). During 2010 all compensation was
in the form of stock grants or stock option grants. Compensation for stock
grants reflect the estimated fair value of our common stock on the date of
issuance, while the compensation for stock option awards is calculated using the
Black-Scholes model, using the assumptions discussed in the notes to our
financial statements, and recognized over the vesting period.  Summary Compensation Table Name
and Principal Position
Year
Salary($)
Bonus($)
Stock Awards($)
Option Awards ($)
Non-Equity Incentive Plan Compensation($)
Non-qualified Deferred Compensation Earnings
($)
All Other Compen-sation ($)
Total($)John
M. Fluke, Jr., Principal Executive Officer
2010
2009
-
-
-
-
-
-
163,440
245,000
-
-
-
-
-
-
163,440
245,000Randy
 Lieber, Principal Accounting Officer
2010
2009
-
-
-
-
42,450
75,461
12,500
57,500
-
-
-
-
-
-
54,950
132,961Douglas
P. Cerretti, President
2010
2009
-
N/A
-
N/A
-
N/A
23,750
N/A
-
N/A
-
N/A
-
N/A
23,750
N/A   -
26 -     Stock
Options John
M. Fluke, Jr. became our Interim Principal Executive Officer during 2008. During
2009, Mr. Fluke was granted options to purchase 9,000,000 shares of common stock
at exercise prices between $0.07 and $0.035 per share. Of these, options for
1,000,000 shares expired unexercised during 2010. During 2010, Mr. Fluke was
granted additional options to purchase 10,800,000 shares of common stock at
prices between $0.035 and $0.018 per share. Randy
A. Lieber became our Principal Accounting Officer during 2008. During 2009, Mr.
Lieber was granted options to purchase 4,000,000 shares of common stock at
exercise prices between $0.07 and $0.035 per share. Of these, options for
1,000,000 shares expired unexercised during 2010. During 2010, Mr. Lieber was
granted options to purchase 4,200,000 shares of common stock at an exercise
price of $0.035 per share. Dr.
Douglas P. Cerretti became our President during 2010. During 2009, Dr. Cerretti
was granted options to purchase 1,000,000 shares of common stock at an exercise
price of $0.07 per share. During 2010, Dr. Cerretti was granted options to
purchase 2,500,000 shares of common stock at an exercise price of $0.02 per
share. Stock
Option Plans In
connection with the CellCyte acquisition, on March 30, 2007, our Board of
Directors adopted a 2007 Stock Option/Restricted Stock Plan (the 2007 Plan).
 The following summary of the 2007 Plan is not complete and is qualified in
its entirety by reference to the 2007 Plan, a copy of which has been filed with
the SEC. The
purpose of the 2007 Plan is to attract and retain the best available personnel
for positions of substantial responsibility, to provide additional incentive to
employees and consultants and to promote the success of our companys business.
 The number of shares available for issuance under the 2007 Plan is
5,450,000 shares.  If an award under the 2007 Plan should expire or become
unexercisable for any reason and without having been exercised in full, or
surrendered pursuant to an option exchange program, then the shares that were
subject to such expiration or unexercised award shall again become available for
future grant under the 2007 Plan.  The 2007 Plan is administered by our
companys Board of Directors or a committee appointed by the Board.  The
term of the 2007 Plan is ten years from the date of its adoption by the
Board. On
January 24, 2009, our Board of Directors approved the 2009 Stock Incentive Plan
for Employees and Consultants (the 2009 Plan), the purpose of which is to
provide our employees and consultants with an increased incentive to make
significant and extraordinary contributions to the long-term performance and
growth of our company, and to facilitate attracting and retaining exceptional
employees and consultants.  Under
the 2009 Plan, we have reserved and registered 46,000,000 shares of our common
stock to be used as compensation to employees and contractors for services
rendered.  See
Note 5 to our Consolidated Financial Statements for additional information
regarding the total number of equity awards outstanding, and the significant
assumptions used in their valuation. Director
Compensation We
pay our directors for their services as directors in restricted stock grants
and/or options for unrestricted common stock.  The following table sets
forth information about compensation paid to our directors in 2010:  -
27 -     Director Compensation Table Name
Fees Earned or Paid in Cash($)
Stock Awards($)
Option Awards($)
Non-Equity Incentive Plan Compen-sation($)
Non-qualified Deferred Compen-sation Earnings
($)
All OtherCompen-sation($)
Total($)John
M. Fluke, Jr.
-
-
109,000
-
-
-
109,000Randy
A. Lieber
-
-
109,000
-
-
-
109,000 During
2010, Mr. Fluke and Mr. Lieber were each compensated for their board
representation through the grant of stock options for 4,200,000 shares of our
common stock. Compensation
for stock option awards is calculated using the Black-Scholes model, using the
assumptions discussed in the notes to our financial statements, and recognized
over the vesting period. See Note 5 to our Consolidated Financial Statements for
more complete information on the assumptions used in valuing our stock
compensation. Long-Term
Incentive Plans We
do not have any long-term incentive plans, pension plans, or similar
compensatory plans for our directors or executive officers. Potential
Payments Upon Termination or Change-in-Control Information
with respect to any payouts upon the termination of a Named Executive Officer or
a change-in-control of our company is set forth below under Employment
Agreements. Employment
Agreements We
do not currently have any employment agreements with executive officers.         ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS The
following table sets forth certain information with respect to the beneficial
ownership of our common stock by each stockholder known by us to be the
beneficial owner of more than 5% of our common stock and by each of our current
directors and executive officers. Each person has sole voting and investment
power with respect to the shares of common stock held by him, except as
otherwise indicated. As of April 13, 2011, there are 74,556,403 shares of common
stock issued and outstanding. Name
and Address of Beneficial Owner
Shares(1)
PercentNamed Executive
Officers and Directors(2)Randy A.
LieberPrincipal Accounting Officer and a director
10,507,543(4)
10.3%John M. Fluke,
Jr.Interim Principal Executive Officer and a director
19,687,989(3)
19.3%Dr. Douglas P. Cerretti,
Ph.D.
President
1,400,000(5)
1.4%  -
28 -      Directors and
Executive Officers as a Group (3 Persons)
31,595,532
30.9%Beneficial Owners of
in Excess of 5% (other than Executive Officers and
Directors)Gary A.
ReysStockholder
18,625,000
18.2%Dr. Ronald W.
Berninger, Ph.D.Stockholder
18,625,000
18.2%  (1) Under
Rule 13d-3, a beneficial owner of a security includes any person who, directly
or indirectly, through any contract, arrangement, understanding, relationship,
or otherwise has or shares: (i) voting power, which includes the power to vote,
or to direct the voting of shares; and (ii) investment power, which includes the
power to dispose or direct the disposition of shares. Certain shares may be
deemed to be beneficially owned by more than one person (if, for example,
persons share the power to vote or the power to dispose of the shares). In
addition, shares are deemed to be beneficially owned by a person if the person
has the right to acquire the shares (for example, upon exercise of an option)
within 60 days of the date as of which the information is provided. In computing
the percentage ownership of any person, the amount of shares outstanding is
deemed to include the amount of shares beneficially owned by such person (and
only such person) by reason of these acquisition rights. As a result, the
percentage of outstanding shares of any person as shown in this table does not
necessarily reflect the persons actual ownership or voting power with respect
to the number of shares of common stock actually outstanding on April 13, 2011.
As of April 13 2011, there were 74,556,405 shares issued and outstanding. In
addition, stockholders listed above hold 27,550,000 options to purchase common
stock that are included in the beneficial ownership calculation. (2) The
address of the executive officers and directors is 14205 SE 36th
Street, Suite 100, Bellevue, Washington, U.S.A., 98006. (3) Includes
vested options to acquire up to 18,950,000 shares of our common stock at
exercise prices of $0.018 to $1.50 per share. (4) Includes
vested options to acquire up to 7,200,000 shares of our common stock at exercise
prices of $0.035 to $0.07 per share. (5) Includes
vested options to acquire up to 1,250,000 shares of our common stock at an
exercise price of $0.02 per share, and a warrant to purchase up to 150,000
shares of our common stock at an exercise price of $0.035 per share.  Changes
in Control We
are unaware of any contract, or other arrangement or provision, the operation of
which may at a subsequent date result in a change of control of our
company.   ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE Related
Party Transactions Except
as disclosed below, there are no transactions, since the beginning of our
companys last fiscal year, or any currently proposed transactions, in which our
company was or is to be a participant where the amount involved exceeds the
lesser of $120,000 or one percent of the average of our companys total assets
at year-end for the last two completed fiscal years and in which any related
person had or will have a direct or indirect material interest.  Related
party includes (a) any
of our directors or officers; (b) any
person proposed as a nominee for election as a director; (c) any
person who beneficially owns, directly or indirectly, shares carrying more than
10% of the voting rights attached to our outstanding shares of common stock;
or (d) any
child, stepchild, parent, stepparent, spouse, sibling, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of
any of the foregoing persons who has the same house as any of such person.  -
29 -     On December 23, 2009, our President and Chief Science Officer
loaned our company $25,000 under a convertible promissory note. In connection
with this promissory note, we also issued him a warrant to purchase 150,000
shares of our common stock. During 2010 this officer advanced an additional
$6,142 to help cover operating costs. During
2010, our board members advanced a total of $29,328 to help cover general
operating costs. Material
Contracts None.   ITEM
14. PRINCIPAL
ACCOUNTANT FEES AND SERVICES We
engaged BehlerMick PS, Certified Public Accountants, as our independent auditors
effective April 27, 2007.  The following table provides information
relating to the fees we paid to our independent auditors for the periods
indicated:  Fiscal Year EndedDecember 31, 2010
Fiscal Year EndedDecember 31, 2009Audit
Fees
$42,500
$54,301Audit-related
Fees
-
-Tax
Fees
-
-All
other Fees
-
- Audit
fees are the aggregate fees billed by our independent auditors for the audit of
our annual financial statements, reviews of interim financial statements and
attestation services that are provided in connection with statutory and
regulatory filings or engagements. Audited-related
fees are the aggregate fees billed by our independent auditors for assurance and
related services that are reasonably related to the performance of the audit or
review of our financial statements and are not reported in the preceding
paragraph. Our
policy is to pre-approve all audit and permissible non-audit services performed
by the independent accountants.  These services may include audit services,
audit-related services, tax services and other services.  Under our audit
committees policy, pre-approval is generally provided for particular services
or categories of services, including planned services, project based services
and routine consultations.  In addition, we may also pre-approve particular
services on a case-by-case basis.  We approved all services that our
independent accountants provided to us in the past two fiscal years.  PART
IV  ITEM
15. EXHIBITS  ExhibitNumber
Description
of Exhibit3.1
Articles
of Incorporation, as amended.  Incorporated by reference to our
Registration Statement on Form SB-2 filed on May 4, 2005.3.2
Bylaws.
 Incorporated by reference to our Current Report on Form 8-K
filed May 14, 2004.  -
30 -      21.1
Subsidiaries
of the Company:Name
of Subsidiary
Jurisdiction of Incorporation
Percentage OwnershipCellCyte
Genetics Corporation
Washington
100%31.1
Section
302 Certification of Principal Executive Officer.31.2
Section
302 Certification of Principal Accounting Officer.32.1
Section
906 Certification of Principal Executive Officer.32.2
Section
906 Certification of Principal Accounting Officer.    -
31 -     **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. CELLCYTE
GENETICS CORPORATION  /s/
John M. Fluke John
M. Fluke, Jr., Interim Principal Executive Officer  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 dates indicated. /s/
John M. Fluke April
14, 2011John M. Fluke, Jr., Director Date /s/
Randy Lieber April
14, 2011Randy Lieber, Director Date   -
32 -     CELLCYTE GENETICS CORPORATION (a Development Stage Company)  Consolidated
Financial Statements  December 31, 2010   Index Consolidated
Balance Sheets Consolidated
Statements of Operations Consolidated
Statement of Stockholders Equity Consolidated
Statements of Cash Flows Notes
to Consolidated Financial Statements   F-1     **TO THE BOARD OF DIRECTORS AND STOCKHOLDERS** CELLCYTE GENETICS CORPORATION  REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM   We have audited the accompanying consolidated balance sheets of
CellCyte Genetics Corporation as of December 31, 2010 and 2009, and the related
consolidated statements of operations, stockholders equity and cash flows for
each of the years in the two-year period ended December 31, 2010 and for the
period January 4, 2005 (inception) to December 31, 2010. CellCyte Genetics
Corporations management is responsible for these financial statements. Our
responsibility is to express an opinion on these 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 audit 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 audits 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. 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, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
CellCyte Genetics Corporation as of December 31, 2010 and 2009, and the results
of its operations and its cash flows for each of the years in the two-year
period ended December 31, 2010 and for the period January 4, 2005 (inception) to
December 31, 2010, in conformity with accounting principles generally accepted
in the United States of America.  The accompanying consolidated financial statements have been
prepared assuming the Company will continue as a going concern. As discussed in
Note 2, the Company has a history of operating losses, has limited cash
resources, and its viability is dependent upon its ability to meet future
financing requirements, and the success of future operations. These factors
raise substantial doubt about the Companys ability to continue as a going
concern. Managements plans regarding those matters also are described in Note
2. The consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.   /s/ BehlerMick PS  BehlerMick PS Spokane, Washington April 14, 2011   F-2


CELLCYTE
GENETICS CORPORATION(a Development
Stage Company)CONSOLIDATED
BALANCE SHEETSDecember 31,

December 31,2010

2009ASSETSCURRENT
ASSETSCash and cash
equivalents
$
-

$
7,301Other
receivables

-


25,900Inventroy

-


-Prepaid expenses
and deposits

10,050


6,875Total Current
Assets

10,050


40,076OTHER
ASSETSFurniture and
equipment, net of depreciation and impairment

15,190


137,787Intellectual
property, net of amortization and impairment

31,226


38,732Total Other
Assets

46,416


176,519TOTAL
ASSETS
$
56,466

$
216,595LIABILITIES
AND STOCKHOLDERS' DEFICITCURRENT
LIABILITIESAccounts
payable
$
662,820

$
644,666Accrued
expenses

80,268


19,277Due to related
parties

140,704


140,704Deferred
rent

-


-Note payable -
current portion

32,955


29,848Convertible note
payable to related party

-


-Total Current
Liabilities

916,747


834,495LONG TERM
LIABILITIESConvertible
notes - related party

22,600


22,000Note payable -
long term portion

250,943


232,256Total Long Term
Liabilities

273,543


254,256COMMITMENTS AND
CONTINGENCIES

-


-STOCKHOLDERS'
DEFICITCommon stock,
$0.001 par value; 525,000,000 shares authorized,74,556,405 and
71,081,307 shares issued and outstanding, respectively

74,556


71,081Additional paid
in capital

11,490,159


10,956,070Common stock
purchase warrants

49,154


49,154Deficit
accumulated during development the stage

(12,747,693)


(11,948,461)Total
Stockholders' Deficit

(1,133,824)


(872,156)TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
$
56,466

$
216,595The
accompanying notes are an integral part of these consolidated financial
statements


F-3





CELLCYTE
GENETICS CORPORATION(a Development
Stage Company)CONSOLIDATED
STATEMENTS OF OPERATIONSFrom InceptionYear Ended

(January 4, 2005)December 31,

to
December 31,2010

2009

2010REVENUES

$
-

$
-

$
-OPERATING
EXPENSES:Consulting


500


37,509


1,678,107General and
administrative


177,173


418,290


2,460,098Professional
fees


139,591


405,863


1,746,980Research,
development and laboratory


-


-


1,296,619Salaries and
benefits


-


-


1,457,524Stock-based
compensation


438,690


467,000


2,861,976Total Operating
Expenses


755,954


1,328,662


11,501,304LOSS FROM
OPERATIONS


(755,954)


(1,328,662)


(11,501,304)OTHER INCOME
(EXPENSE)Interest
income


-


-


32,512Interest and
finance charges


(38,459)


(76,530)


(244,612)Impairment of
intellectual property


-


-


(568,913)Impairment of
tenant improvements


-


-


(383,535)Gain on
extinguishment of debt


-


53,547


53,547Loss on
disposal of furniture and equipment

(4,819)


(68,792)


(135,388)Total Other
Income (Expense)


(43,278)


(91,775)


(1,246,389)LOSS BEFORE
TAXES


(799,232)


(1,420,437)


(12,747,693)INCOME
TAXES


-


-


-NET LOSS

$
(799,232)

$
(1,420,437)

$
(12,747,693)BASIC AND
DILUTED NET LOSSPER COMMON
SHARE

$
(0.01)

$
(0.02)WEIGHTED
AVERAGE NUMBER OFSHARES
OUTSTANDING FOR BASICAND
DILUTED CALCULATION


73,697,133


66,488,444The accompanying notes are an integral part of these
consolidated financial statements


F-4


CELLCYTE
GENETICS CORPORATION(a Development
Stage Company)CONSOLIDATED
STATEMENTS OF CASH FLOWSFrom Inception(January 4, 2005)Year Ended December 31,
to
December 31,2010

2009

2010CASH FLOWS FROM
OPERATING ACTIVITIES:Net loss

$
(799,232)

$
(1,420,437)

$
(12,747,693)Adjustments to
reconcile net loss to net cash used byoperating
activitiesAmortization of
intellectual property


7,506


7,504


115,389Depreciation of
furniture and equipment


46,536


148,717


539,066Stock-based
compensation


438,690


467,000


2,861,976Non-cash
services


65,170


400,119


957,890Amortization of
discount on note


600


-


600Warrant issued
for legal services


-


46,154


46,154Accounts payable
paid with common stock


33,704


69,755


103,459Non-cash
beneficial conversion right


-


20,000


36,400Non-cash
impairment of tennant improvements


-


-


383,535Non-cash
impairment of intellectual property


-


-


568,913Expenses paid by
shareholder


-


6,465


32,755Accounts payable
reduced in lease settlement


-


520,788


520,788Gain on
extinguishment of debt


-


(53,547)


(53,547)Loss on disposal
of furniture and equipment


4,819


68,792


135,388Decrease
(increase) in assetsOther
receivables


25,900


(25,900)


-Prepaid expenses
and deposits


(3,175)


72,023


(10,050)Increase
(decrease) in liabilitiesAccounts
payable


38,264


(383,803)


573,389Deferred
rent


-


7,853


-Accrued
interest


-


-


82,088Accrued
expenses


60,991


19,277


80,268Net cash used by
operating activities


(80,227)


(29,240)


(5,773,232)CASH FLOWS FROM
INVESTING ACTIVITIES:Intellectual
property acquisition


-


-


(715,528)Cash from sales
of equipment


71,240


36,225


107,465Furniture and
equipment acquisition, net


-


-


(1,327,070)Cash acquired on
reverse acquisition


-


-


1,429Net cash
provided by investing activities


71,240


36,225


(1,933,704)CASH FLOWS FROM
FINANCING ACTIVITIES:Proceeds from
issuance of convertible notes


29,328


22,000


1,002,728Proceeds from
convertible note allocated to warrant

-


3,000


3,000Advances from
related party


6,142


2,534


112,625Payments on note
payable


(33,784)


(33,522)


(67,306)Proceeds from
sale of common stock


-


-


6,655,889Net cash
provided (used) by financing activities


1,686


(5,988)


7,706,936Net (decrease)
increase in cash and cash equivalents


(7,301)


997


-Cash and cash
equivalents, beginning of period


7,301


6,304


-Cash and cash
equivalents, end of period

$
-

$
7,301

$
-SUPPLEMENTAL
CASH FLOW DISCLOSURES:Income taxes
paid

$
-

$
-

$
-Interest
paid

$
10,883

$
10,883

$
21,766NON CASH
INVESTING AND FINANCING ACTIVITESNote payable to
related party converted to common stock
$
-


36,400

$
36,400Issuance of note
for insurance

$
26,250

$
20,625

$
46,875Issuance of note
in exchange for accounts payable

$
-

$
275,000

$
275,000The
accompanying notes are an integral part of these consolidated financial
statements  F-5


CELLCYTE
GENETICS CORPORATION(a Development
Stage Company)CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITYCommon

Deficit

TotalAdditional

Stock

Accumulated During

Stockholders'Common Stock

Paid-in

Purchase

Development

EquityShares

Amount

Capital

Warrants

Stage

(Deficit)Initial
contribution by founders

37,250,000

$
200

$
-

$
-

$
-

$
200Net loss for year
ended December 31, 2005

-


-


-


-


(315,030)


(315,030)Balance, December
31, 2005

37,250,000


200


-


-


(315,030)


(314,830)Net loss for year
ended December 31, 2006

-


-


-


-


(385,639)


(385,639)Balance, December
31, 2006

37,250,000


200


-


-


(700,669)


(700,469)Issued on
settlement of CGW debts

678,060


678


1,016,410


-


-


1,017,088Issued in
exchange for CGW share purchase warrants

205,000


205


245,795


-


-


246,000Recapitalization
adjustment

17,740,000


54,790


(538,422)


203,000


-


(280,632)Balance post
recapitalization (Note 3)

55,873,060


55,873


723,783


203,000


(700,669)


281,987Issued for
private placement

3,981,165


3,981


4,772,770


1,195,000


-


5,971,751Stock-based
compensation

-


-


1,780,000


-


-


1,780,000Net loss for year
ended December 31, 2007

-


-


-


-


(4,521,196)


(4,521,196)Balance, December
31, 2007

59,854,225


59,854


7,276,553


1,398,000


(5,221,865)


3,512,542Issued on
exercise of warrants

67,146


67


201,371


-


-


201,438Reclassification
on exercise of warrants

-


-


147,071


(147,071)


-


-Issued for
private placement

840,000


840


146,160


63,000


-


210,000Issued for
services

1,135,247


1,136


491,465


-


-


492,601Issued for
private placement

689,365


689


119,950


51,702


-


172,341Issued on
exercise of warrants

333,862


334


99,825


-


-


100,159Repricing of
warrants

-


-


(367,366)


367,366


-


-Reclassification
on expiration of warrants

-


-


1,618,295


(1,618,295)


-


-Stock-based
compensation

-


-


176,286


-


-


176,286Beneficial
conversion rights of convertible debt

-


-


16,400


-


-


16,400Net loss for year
ended December 31, 2008

-


-


-


-


(5,306,159)


(5,306,159)Balance, December
31, 2008

62,919,845


62,920


9,926,010


114,702


(10,528,024)


(424,392)Beneficial
conversion rights of convertible debt

-


-


20,000


-


-


20,000Issued for
services

-


-


-


46,154


-


46,154Issued for
services

7,161,462


7,161


392,958


-


-


400,119Warrant issued
with convertible debt

-


-


-


3,000


-


3,000Issued in
conversion of promissory note

1,000,000


1,000


35,400


-


-


36,400Stock-based
compensation

-


-


467,000


-


-


467,000Expiration of
warrants

-


-


114,702


(114,702)


-


-Net loss for year
ended December 31, 2009

-


-


-


-


(1,420,437)


(1,420,437)Balance, December
31, 2009

71,081,307

$
71,081

$
10,956,070

$
49,154

$
(11,948,461)

$
(872,156)Issued for
services

3,475,098


3,475


95,399


-


-


98,874Stock-based
compensation

-


-


438,690


-


-


438,690Net loss for year
ended December 31, 2010

-


-


-


-


(799,232)


(799,232)Balance, December
31, 2010

74,556,405

$
74,556

$
11,490,159

$
49,154

$
(12,747,693)

$
(1,133,824)The
accompanying notes are an integral part of these consolidated financial
statements  F-6


NOTE 1  DESCRIPTION OF BUSINESS AND BASIS OF
PRESENTATION CellCyte Genetics Corporation (the Company) is in the
development stage, as defined by Financial Accounting Standards Board (FASB)
ASC 915, Development Stage Entities, and its efforts have been principally
devoted to the commercialization of its cell expansion technology since it
previously discontinued the discovery and development of stem cell therapeutic
products in 2008. To date, the Company has not generated any sales revenues, has
incurred ongoing operating expenses and has sustained
losses.  Consequently, its operations are subject to all the risks
inherent in the establishment of a new business enterprise.  For the period
from inception through December 31, 2010, the Company has accumulated losses of
$12,747,693. As shown in the accompanying financial statements, the Company has
incurred significant losses since inception and has not generated any revenues
to date. In addition, effective July 1, 2008, the Company suspended
significantly all of its operations and placed all of its employees on unpaid
leave.  The future of the Company is dependent upon its ability to obtain
sufficient financing and upon achieving future profitable operations.
 These factors, among others, raise substantial doubt about the Company's
ability to continue as a going concern.  These consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty. NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies is presented to
assist in understanding the Companys financial statements.  The financial
statements and notes are representations of the Companys management, which is
responsible for their integrity and objectivity.  These accounting policies
conform to accounting principles generally accepted in the United States of
America and have been consistently applied in the preparation of the financial
statements. Basis of Consolidation These consolidated financial statements include the accounts of
CellCyte Genetics Corporation, a private Washington corporation, since its
incorporation on January 4, 2005 and its parent, CellCyte Genetics Corporation,
a Nevada corporation, since the reverse acquisition on March 14, 2007.  All
inter-company balances and transactions have been eliminated. Cash and Cash Equivalents The Company considers all highly liquid investments and short-term
debt instruments with maturities of three months or less from date of purchase
to be cash equivalents.  The Company had no cash or cash equivalents at
December 31, 2010. Loss per Share The Company computes net income (loss) per common share in
accordance with FASB ASC 260, Earnings Per Share.  Net income (loss) per
share is based upon the weighted average number of outstanding common shares and
the dilutive effect of common share equivalents, such as options and warrants to
purchase common stock, convertible preferred stock and convertible notes, if
applicable, that are outstanding each year.  Basic and diluted earnings per
share were the same at the reporting dates of the accompanying financial
statements, as including common stock equivalents in the calculation of diluted
earnings per share would have been anti-dilutive.       As of December 31, 2010, there were outstanding warrants for
919,230 shares of common stock, options for 34,445,000 shares of common stock,
and a convertible promissory note that is convertible into 714,286 shares of
common stock. Fair Value of Financial Instruments The Company's financial instruments may consist of cash and cash
equivalents, prepaid expenses and other deferred charges, accounts payable,
accrued expenses and other current liabilities.  All instruments are
accounted for on an historical cost basis, which, due to the short maturity of
these financial instruments, approximates the fair value at the reporting dates
of these financial statements. Intangible Assets The Companys intangible assets primarily consist of patents and
intellectual property, which are carried at the purchase price and/or the legal
cost to obtain them less accumulated amortization.  Patents and licenses
are being amortized over their estimated useful lives, which range from seven to
seventeen years. Going Concern The accompanying financial statements have been prepared on a
going concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. As shown in the
accompanying financial statements, the Company has incurred losses of
$12,747,693 and used $5,773,232 in cash for operating activities from
its inception through December 31, 2010. These factors among others may indicate
that the Company will be unable to continue as a going concern for a reasonable
period of time.  The
Company's existence is dependent upon management's ability to successfully raise
additional capital and to develop profitable operations. Management is devoting
substantially all of its efforts in raising capital and in developing its
products and services and there can be no assurance that the Company's
efforts will be successful. Managements efforts could be further limited by the
effects of certain ongoing investigations and litigation. The inability to raise
new capital prior to the settling of uncertainties may substantially damage any
current plans of continuing operations.The planned principal operations
have not commenced and no assurance can be given that management's actions will
result in profitable operations or the resolution of its liquidity problems. The
accompanying statements do not include any adjustments that might result should
the Company be unable to continue as a going concern.  Income
Taxes The Company follows the provisions of FASB ASC 740, Income
Taxes, under which deferred tax assets and liabilities are determined based on
differences between financial reporting and tax bases of assets and liabilities.
Deferred tax assets and liabilities are measured using the enacted tax rates and
laws that are expected to be in effect when the differences are expected to
reverse.  The provisions of ASC 740 also require the recognition of future
tax benefits such as net operating loss carry-forwards, to the extent that the
realization of such benefits is more likely than not.  To the extent that
it is more likely than not that such benefits will not be received, the Company
records a valuation allowance against the related deferred tax asset. Long-Lived Assets and Intangibles The Company examines on a periodic basis the carrying value of its
tangible and intangible assets to determine whether there are any impairment
losses.  FASB ASC 360, Property, Plant and Equipment, establishes a
single accounting model for long-lived assets to be disposed of by sale,
including       discontinued operations, and requires that these long-lived assets
be measured at the lower of carrying amount or fair value less cost to sell,
whether reported in continuing operations or discontinued operations. The
determination of any impairment would include a comparison of estimated future
cash flows anticipated to be generated during the remaining life of the assets
to the net carrying value of the assets. Property and Equipment Property and equipment are stated at cost.  Depreciation is
computed using the straight-line method over the estimated useful lives of the
assets.  Expenditures for repairs and maintenance are expensed as
incurred. Research and Development Costs Research and development costs are expensed as incurred. The cost
of intellectual property purchased from others that is immediately marketable or
that has an alternative future use is capitalized and amortized as intangible
assets. Capitalized costs are amortized using the straight-line method over the
estimated economic life of the related asset. The Company periodically reviews
its capitalized intangible assets to assess recoverability based on the
projected undiscounted cash flows from operations, and impairments are
recognized in operating results when a permanent diminution in value occurs. Recent Accounting Pronouncements  In
January 2010, the FASB issued ASU No. 2010-06, Improving Disclosures about Fair
Value Measurements (ASU 2010-06) (codified within ASC 820 Fair Value
Measurements and Disclosures). ASU 2010-06 improves disclosures originally
required under SFAS No. 157. ASU 2010-16 is effective for interim and annual
periods beginning after December 15, 2009, except for the disclosures about
purchases, sales, issuances and settlements in the roll forward of activity in
Level 3 fair value measurements. Those disclosures are effective for fiscal
years beginning after December 15, 2010, and for interim periods within those
years. The Company will comply with the additional disclosures required by this
guidance upon its adoption in January 2011.  Stock-Based Compensation  The
Company records stock-based compensation in accordance with FASB ASC 718, Stock
Compensation.  ASC 718 requires that the cost resulting from all
share-based transactions be recorded in the financial statements. It establishes
fair value as the measurement objective in accounting for share-based payment
arrangements and requires all entities to apply a fair-value-based measurement
in accounting for share-based payment transactions with employees. The Statement
also establishes fair value as the measurement objective for transactions in
which an entity acquires goods or services from non-employees in share-based
payment transactions. The
Company has recorded stock-based compensation expense of $438,690 during the
year ended December 31, 2010 and $467,000 during the year ended December 31,
2009. Use of Estimates The accompanying financial statements are prepared in conformity
with accounting principles generally accepted in the United States of America
and include certain estimates and assumptions which affect the reported amounts
of assets and liabilities at the date of the financial statements, and the
reported amounts       of revenues and expenses during the reporting period.
 Accordingly, actual results may differ from those estimates. NOTE 3  INTELLECTUAL PROPERTY AND PROPERTY AND
EQUIPMENT Intellectual Property In 2005, the Company acquired certain patents and intellectual
property from Genespan Corporation relating to its cell expansion and
maintenance technology for which it paid $70,002. The Company amortizes patents (and licenses for the use of
patents) over the remaining life of the patents, which ranges from 7 to 17
years. Intellectual property was as follows as of December 31, 2010 and
2009: 2010

2009Patents

$
70,002

$
70,002Accumulated
amortization


(31,270)


(31,270)Patents,
net

$
38,732

$
46,235  Property and Equipment Property and equipment are stated at cost and are being
depreciated using the straight-line basis over the assets estimated useful
lives, which are generally three years for computer equipment, three to five
years for office equipment, five to seven years for furniture, and five years
for laboratory equipment. Tenant improvements are capitalized and amortized over
the shorter of the lease term or their estimated useful life. Depreciation and
amortization expense for the years ended December 31, 2010 and 2009 was $46,536
and $148,717, respectively. On August 14, 2009, the Company entered into a lease termination
agreement with its landlord, whereby the Company exchanged furniture and
equipment, with a cost basis of $246,869 and a net book value of $122,244, for a
reduction in the outstanding lease liability in the amount of $122,244. During the year ended December 31, 2010, the Company sold or
disposed of furniture and equipment with a cost basis of $172,658 and a net book
value of $76,060 for total proceeds of $71,240, resulting in a loss on disposal
of $4,819. During the year ended December 31, 2009, the Company sold or
disposed of furniture and equipment with a cost basis of $221,939 and a net book
value of $128,217 for total proceeds of $60,025 ($23,800 included in other
receivables at December 31, 2009), resulting in a loss on disposal of $68,792.          Property and equipment were as follows as of December 31, 2010 and
2009: 2010

2009Laboratory
equipment

$
40,935

$
202,644Computer
and office equipment


79,810


90,760Accumulated
depreciation and amortization


(105,555)


(155,617)Property
and equipment, net

$
15,190

$
137,787  NOTE 4  COMMITMENTS AND CONTINGENCIES Operating Leases During 2009, the Company was in default on its facility lease and
had an outstanding lease liability, including operating costs, penalties and
interest in the amount of $520,788. Effective August 14, 2009, the Company
finalized a lease termination agreement with its landlord whereby the Company
executed a promissory note in the amount of $275,000 and agreed to vacate the
facility and leave certain of its furniture behind in full settlement of all
amounts owing, and after set-off of prepaid rent in the amount of $69,616. The
remaining lease liability of $53,547 was written off and has been reflected as a
gain on extinguishment of debt on the consolidated statement of operations. The
promissory note bears interest at the annual rate of 12% and has monthly
payments of $5,000 commencing January 1, 2010. On August 25, 2010, the Company entered into a forbearance
agreement with its previous landlord whereby the landlord would forbear
enforcement of its claims and causes of actions upon the following terms: 1. A payment of $25,000 on or before December 21, 2010, and 2. Commencing July 1, 2011 and on the first day of each month
thereafter, for a total of six months ending December 1, 2011, a payment of
$5,000. These payments will be first applied to all accrued but unpaid
interest, with the remainder to be applied against principal of the previously
executed promissory note. In addition, each of these payments are personally
guaranteed by an officer/stockholder of the Company. Principal payments under the promissory note are as follows: Year

Principal Payments2011
$
3,6272012

31,5132013

35,6002014

40,1152015

45,202Thereafter

98,513Total
$
254,570          NOTE 5  CAPITAL STOCK Common Stock The Company has authorized 525,000,000 shares of its common stock,
$0.001 par value. The Company had issued and outstanding 74,556,405 and
71,081,307 shares of its common stock at December 31, 2010 and December 31,
2009, respectively. During the year ended December 31, 2010, the Company issued
3,475,098 shares of common stock in exchange for services with an estimated fair
value of $98,874. Common Stock Warrants During the year ended December 31, 2009, the Company issued
769,230 common stock purchase warrants to one of its law firms as partial
payment for its services. The fair market value of these warrants of $46,154 was
calculated using the Black-Scholes option pricing model using the following
weighted-average assumptions: expected option life of 5 years; risk-free
interest rate of 2.46%; dividend yield of 0%; and expected volatility of
140%. Also during the year ended December 31, 2009, the Company issued
150,000 common stock purchase warrants as part of a convertible note
arrangement. The fair market value of the warrants of $3,000 was recorded as a
discount on the promissory note and was calculated using the Black-Scholes
option pricing model using the following weighted-average assumptions: expected
option life of 5 years; risk-free interest rate of 2.51%; dividend yield of 0%;
and expected volatility of 100%. The Companys common stock purchase warrant activity for the years
ended December 31, 2010 and December 31, 2009 is as follows:  WarrantsOutstanding

Weighted AverageExercise Price

Weighted AverageRemaining LifeBalance,
December 31, 2008
1,529,365
$
0,75

0.84 yearsWarrants
issued
919,230

0.06Warrants
exercised
-

-Warrants
expired
(1,529,365)

0.75Balance,
December 31, 2009
919,230

0.06

4.62 yearsWarrants
issued
-

-Warrants
exercised
-

-Warrants
expired
-

-Balance,
December 31, 2010
919,230
$
0.06

3.62 years          Common Stock Options Effective
March 30, 2007, the Company adopted the 2007 Stock Option/Restricted Stock Plan
(the 2007 Plan). The purpose of the 2007 Plan is to attract and retain the
best available personnel for positions of substantial responsibility, to provide
additional incentive to employees and consultants and to promote the success the
Companys business.  The number of shares available for issuance under the
2007 Plan is 5,450,000 shares.  If an award under the 2007 Plan should
expire or become unexercisable for any reason and without having been exercised
in full or surrendered pursuant to an option exchange program, then the shares
that were subject to such expiration or unexercised award shall again become
available for future grant under the 2007 Plan.  The 2007 Plan is
administered by the Companys Board of Directors or a committee appointed by the
Board.   The term of the 2007 Plan is ten years from the date of its
adoption by the Board. As of December 31, 2010, there were 1,735,000 fully vested stock
options outstanding under the 2007 Plan. On January 24, 2009, the Company approved and adopted the 2009
Stock Incentive Plan for Employees and Consultants (the 2009 Plan). The
purpose of the 2009 Plan is to provide employees and consultants of the Company
with an increased incentive to make significant and extraordinary contributions
to the long-term performance and growth of the Company, and to join the
interests of employees and consultants with the interests of the stockholders of
the Company. The number of shares available for issuance under the 2009 Plan is
46,000,000 shares (as revised on December 2, 2009), and have been registered
with the Securities and Exchange Commission pursuant to a Form S-8 Registration
Statement. During the year ended December, 31, 2010, the Company issued
3,475,098 shares of common stock and granted a total of 19,700,000 stock options
to certain officers, directors and consultants of the Company under the 2009
Plan to acquire shares of the Companys common stock at prices ranging from
$0.018 per share to $0.035 per share, exercisable for a period of 5 years.
 The fair value of the stock options granted during 2010 was estimated to
be $326,940 and was determined using the Black-Scholes option pricing model
using the following weighted average assumptions: expected option life of 5
years; risk-free interest rate of 1.99%; dividend yield of 0%; and expected
volatility of 100%. Certain of the options granted during 2010 are subject to
vesting conditions and, as of December 31, 2010, the Company has recorded
stock-based compensation of $293,190 in connection with the vesting of these
options. During the year ended December, 31, 2009, the Company issued
7,161,462 shares of common stock and granted a total of 15,810,000 stock options
to certain officers, directors and consultants of the Company under the 2009
Plan to acquire shares of the Companys common stock at prices ranging from
$0.035 per share to $0.07 per share for periods ranging from 1 to 5 years.
 The fair value of the stock options granted during 2009 was estimated to
be $702,500 and was determined using the Black-Scholes option pricing model
using the following weighted average assumptions: expected option life of 4.29
years; risk-free interest rate of 1.75%; dividend yield of 0%; and expected
volatility of 130%. During the year ended December 31, 2010, the Company
recorded stock-based compensation of $145,500 related to these options. In
addition, options for 2,800,000 shares of common stock expired unexercised
during 2010.       The Companys stock option activity under both the 2007 and 2009
Plans for the years ended December 31, 2010 and 2009 is as follows: OptionsOutstanding

Weighted AverageExercise Price

Weighted AverageRemaining LifeBalance,
December 31, 2008
1,735,000
$
1.340

5.47 yearsOptions
granted
15,810,000

0.066Options
exercised
-

-Options
cancelled and expired
-

-Balance,
December 31, 2009
17,545,000

0.190

3.81 yearsOptions
granted
19,700,000

0.026Options
exercised
-

-Options
cancelled and expired
(2,800,000)

0.049Balance,
December 31, 2010
34,445,000
$
0.109

3.95 years  NOTE 6  RELATED PARTY TRANSACTIONS During the year ended December 31, 2008, two former officers, Gary
Reys and Dr. Ronald Berninger, who were also members of the Companys board of
directors, advanced funds in the amount of $26,290 for their legal defense
related to the matters discussed in Note 8. During 2009, Dr. Berninger advanced
an additional $6,465 for his defense. Under the Companys Bylaws, the Company is
required to provide for the legal defense of its officers and directors. Convertible Promissory Notes On December 23, 2009, an officer of the Company loaned $25,000 to
the Company in exchange for a convertible promissory note and a warrant to
purchase 150,000 shares of common stock. The promissory note bears interest at
the annual rate of eight percent and all interest and principal is due on
December 22, 2014. The fair market value of the warrants of $3,000 was recorded
as a discount on the promissory note (Note 5). During the year ended December 31, 2010, a stockholder of the
Company advanced a total of $25,858 to help pay for certain operating costs. On
March 18, 2010 these advances were converted into a convertible promissory note.
The promissory note bears interest at the annual rate of eight percent and all
interest and principal is due on January 24, 2015. The promissory note and
accrued interest can be converted into common stock at any time, at the option
of the holder, at the exchange rate of $0.024 per share. During the year ended
December 31, 2010, a second stockholder of the Company advanced a total of
$3,470 to help pay for certain operating costs.  Effective August 18, 2010,
these advances were converted into a convertible promissory note. The promissory
note bears interest at the annual rate of eight percent and all interest and
principal is due on August 17, 2015. The promissory note and accrued interest
can be       converted into common
stock at any time, at the option of the holder, at the exchange rate of $0.02
per share. Stockholder Advances During the year ended December 31, 2007 a stockholder of the
Company paid various outstanding payables on behalf of the Company. As of
December 31, 2010 the Company owed this stockholder $107,949.  These
advances are unsecured, non-interest bearing with no set terms of repayment. NOTE 7  INCOME
TAXES  Income
taxes are calculated in accordance with ASC Topic 740, "Income Taxes" ("ASC
740"), which requires the use of the liability method. Deferred tax assets and
liabilities are recognized based on the difference between the financial
statement carrying amounts of assets and liabilities and their respective tax
bases. Inherent in the measurement of deferred balances are certain judgments
and interpretations of enacted tax laws and published guidance with respect to
applicability to the Company's operations.  The
Company adopted the provisions of ASC 740 related to uncertainty in income taxes
in the first quarter of fiscal year 2007. These provisions prescribe a
comprehensive model of how a company should recognize, measure, present and
disclose in its financial statements uncertain tax positions that the company
has taken or expects to take on a tax return. Under these provisions, the
Company recognizes a tax benefit when a tax position is more-likely-than-not to
be sustained upon examination, based solely on its technical merits. The Company
measures the recognized tax benefit as the largest amount of tax benefit that
has greater than a 50% likelihood of being realized upon the ultimate settlement
with a taxing authority. The Company reverses a previously recognized tax
benefit if it determines that the tax position no longer meets the
more-likely-than-not threshold of being sustained. The Company accrues interest
and penalties related to unrecognized tax benefits in income tax expense.  The
Company's deferred income taxes reflect the net tax effects of (a) temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax reporting purposes, and
(b) net operating loss carry forwards.  At
December 31, 2010 and 2009 the Company had gross deferred tax assets calculated
at an expected rate of 34% of approximately $4,326,000 and $4,0541,000,
respectively, principally arising from net operating loss carry-forwards and
stock compensation for income tax purposes.  As management of the Company
cannot determine that it is more likely than not that the Company will realize
the benefit of the net deferred tax asset, a valuation allowance of $4,326,000
and $4,054,000 has been established at December 31, 2010 and 2009,
respectively.  The
significant components of the Companys net deferred tax asset at December 31,
2010 and 2009 are as follows:  2010

2009Gross deferred tax asset:Net operating loss carry forwards

$
4,326,000

$ 4,054,000Gross deferred tax liabilities:Valuation allowance

(4,326,000)

(4,054,000)Net deferred tax asset

$
-

$
-          At
December 31, 2010 and 2009 the Company has net operating tax loss carry forwards
of approximately $12,723,000 and $11,924,000, respectively, which will expire in
the years 2025 through 2030.  The primary difference between net operating
losses for financial statement and income tax purposes are permanent differences
related to the accounting for meals and entertainment.  Although we believe that our estimates are reasonable, no
assurance can be given that the final tax outcome of these matters will not be
different than that which is reflected in our tax provisions. Ultimately, the
actual tax benefits to be realized will be based upon future taxable earnings
levels, which are very difficult to predict.