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, 2009 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. 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     - 2 -  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 voting and non-voting common stock held by
non-affiliates of the last day of the registrants most recently completed
fiscal quarter was $2,146,655 based upon the closing price of such common stock
on the OTC Bulletin Board of $0.0302. State
the number of shares outstanding of each of the issuers classes of common
equity, as of the latest practicable date:  72,337,745 shares of common
stock as of April 14, 2010. __________       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. SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS 13 PART
II 13 ITEM
5. MARKET
FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES
OF EQUITY SECURITIES 13 ITEM
6. SELECTED
FINANCIAL DATA 15 ITEM
7. MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS 15 ITEM
8. FINANCIAL
STATEMENTS 22 ITEM
9. CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE 22 ITEM
9A. CONTROLS
AND PROCEDURES 22 ITEM
9B. OTHER
INFORMATION 24 PART
III 25 ITEM
10. DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE GOVERNANCE 25 ITEM
11. EXECUTIVE
COMPENSATION 28 ITEM
12. SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS 30 ITEM
13. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 31 ITEM
14. PRINCIPAL
ACCOUNTANT FEES AND SERVICES 31 PART
IV 32 ITEM
15. EXHIBITS 32 SIGNATURES 33               FORWARD-LOOKING STATEMENTS This
Annual Report on Form 10-K for the year ended December 31, 2009 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. In
2008, we substantially changed our business plan and we became involved in
several different lawsuits and a securities investigation. During 2009 we were
primarily focused on resolving our legal issues and did not conduct any research
and development activities. 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). In
accordance with the terms of the Share Exchange Agreement, at closing, we
raised, by way of a private placement of units (the Private Placement), a
total of $5,971,000. 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 As
a result of the acquisition of CellCyte, we became a biotechnology company
involved in research and development of stem cell enabling therapeutic products
and medical devices for cell production. Through
June 30, 2008, our company was primarily focused on the development of stem cell
targeting technology licensed from the US Department of Veteran Affairs (the
VA) as well as additional development of our patented bioreactor. Based on data and representations from the VA, we had published
that, in preliminary studies conducted by government scientists, administration
of CCG-TH30, the highest known affinity ligand for liver was reported by the
investigator to result in up to 77% of intravenously injected CD34+ cells
targeting the heart of normal Nonobese Diabetes / Severe Combined
Immunodeficiency (NOD/SCID) mice. Similarly,  -
2 -     a second product candidate, CCG-TH35, was reported by the VA to
enhance delivery of mesenchymal stem cells to the heart of normal NOD/SCID
mice. In July 2008, we received new data material from the VA. We
thoroughly reviewed this data and determined that the original data that we
received from the VA was incomplete and that images of certain mice were not
included. Furthermore, we have concluded from our review that the new data does
not demonstrate that the stem cells injected after CCG-TH30 or CCG-TH35 were, in
fact, localized in the desired target organ, e.g., the heart, as
represented by the VA and the inventor, a VA employee. As a result, unless we
receive additional data from the VA that confirms the VA's claims regarding the
technology that we licensed from the VA, we believe that it will be necessary to
perform additional research to determine if stem cells injected into animals
along with CCG-TH30 or CCG-TH35 will localize in a target organ. We have elected
to discontinue all research and development activities related to this licensed
technology. If we decide to move forward with this research, we will need to
raise additional funding in order to conduct such internal testing and external
collaborations. As it relates to other aspects of our current business plan, this
data has no scientific impact on our bioreactor device business segment. Due to
events which occurred or became known in 2008, we intend to focus our efforts
over the next twelve months within the device segment. 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 major 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 times
not an option because the patients  -
3 -     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 significant 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 and 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 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 breakthrough discoveries with large
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. We may also move research forward for expansion of islet cells and
investigate their use in an implantable device.  We believe these
complementary technologies further advance and leverage our plan for early
revenues in addition to those that may also be obtained via collaborative or
development agreements with other companies. 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.  -
4 -     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
uncertain and involve 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 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  -
5 -     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, 2009 and 2008, we have incurred research and
development costs of $0 and $622,111, respectively. At December 31, 2009 and
2008, 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 2009 we did not have any employees
and our consultants were primarily focused on developing an Interim Operating
Plan. 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. We
regularly evaluate the recoverability of our intangible assets and effective
July 1, 2008, we recorded an impairment of $568,913 on our licenses and patents
pending related to the VA intellectual property. Our initial research and
testing of the VA technology did not yield the anticipated results nor support
the VAs claims regarding the technology and will require further testing to
prove otherwise. We have determined that recovery of these costs through future
net cash flows was uncertain and that it was appropriate for financial statement
purposes to record an impairment loss on our licenses and patents pending. 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. 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.  -
6 -     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. 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 bio-reactor technology and to seek
financing to enable the continuation of operations.  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  -
7 -     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 due to the legal issues pertaining to our company. Our
consultants and contractors have agreed to continue work for the company in
exchange for the issuance of unrestricted common stock. As
more fully described in ITEM 3, since we have settled our outstanding legal
issues, we intend to pursue opportunities to obtain additional financing through
equity and debt financings, corporate alliances, 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 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, 2009 and 2008 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 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  -
8 -     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
intend to 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. We
may not be able to find a nonprofit organization willing to partner with us, or
if we do partner, that we will 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 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, cooperative agreements or current research grants, and
we may not obtain any such agreements or additional grants in the future or
receive any revenues from product sales. 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 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 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.  We cannot be certain
that we were the first to discover the inventions covered by each of our pending
patent applications or that we were the first to file patent applications for
such inventions because patent applications are secret until they are published,
and because publication of discoveries in the scientific or patent literature
often lags behind actual discoveries. Patents
may not be issued from our pending or 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.  -
9 -     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 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 business could be
significantly harmed.  Also, any infringement lawsuits 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 relate to
products or technologies we are developing.    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 have to compete with a variety of 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 developed, will compete with these products principally on the
basis of improved and extended efficacy and safety and their overall economic
benefit to the health care system.  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  -
10 -     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 management and scientific staff
that have agreed to continue working as contractors until the company is able to
obtain additional funding.  Although we will enter into contractor
agreements with some of these individuals and will pay them through the issuance
of unrestricted common stock, 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 and potentially hazardous biological materials such as human and
animal tissue.  Their use subjects us to environmental and safety laws and
regulations such as those governing laboratory procedures, exposure to
blood-borne pathogens and the handling of biohazardous materials.
 Compliance with current or future laws and regulations may be expensive
and the cost of compliance could adversely affect us. 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. As more fully described in ITEM 3, we have been the subject of a
stockholder lawsuit, a lawsuit with a former employee, and an investigation by
the Securities and Exchange Commission. While these legal matters have all been
successfully 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.  -
11 -     In order to produce our bioreactors, we require certain raw of
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. 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: ? pending
or potential lawsuits; ? our
ability to develop and test our technology; ? our
ability to patent or obtain licenses to necessary technology; ? competition
in our industry; ? price
and volume fluctuations in the stock market at large that are unrelated to our
operating performance; and ? comments
by securities analysts, or 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 In January 2008, three stockholder lawsuits were filed against us
in the United States federal court for the Western District of Washington:
Armbruster v. Cellcyte Genetics Corporation, et. al,No. C08-0047,
Tolerico v. Cellcyte Genetics Corporation, et. al., No. C08-0163 and
Pruitt v. Cellcyte Genetics Corporation, et. al., No. C08-0178.  An
amended complaint consolidating the 3 lawsuits was filed and the amended
consolidated complaint alleged, inter alia, that our company and our
founding officers and directors filed misleading statements with the Securities
and Exchange Commission regarding our products, and that we posted misleading
information regarding an officer on our website.  The lawsuits  -
12 -     claimed that investors purchased our stock based on the alleged
misleading statements and seek monetary relief. On March 22, 2010 all claims against our company and our founding
officers and directors related to the stockholder lawsuits were dismissed,
without prejudice, and without an award of costs to any party. We were also engaged in a dispute with a former employee, who
voluntarily resigned in 2007.  The former employee had signed an employment
agreement with us which contains certain restrictions on their conduct after
termination of employment.  The former employee was claiming to have been
misled into signing the agreement and was seeking monetary damages for
constructive discharge and relief from the terms of the employment contract,
which we disputed. On February 3, 2010, we entered into a Mutual Release Agreement
with this former employee which settled all of our outstanding litigation
involving this former employee. Both the arbitration and the underlying lawsuit
were dismissed with prejudice, with none of the parties admitting any liability
for damages. The Mutual Release Agreement became effective on March 3, 2010
following the completion of all activities contemplated under the Agreement. In January 2008, the Securities and Exchange Commission (SEC)
notified us that it was commencing an informal non-public inquiry regarding
certain matters related to our filings. The SEC requested that we voluntarily
produce documents relating to its investigation. On May 12, 2008, we learned
that the informal inquiry commenced by the SEC had become a formal
investigation. As a result of this action, our founding officers and directors
resigned from their officer and director positions, and interim principal and
executive and accounting officers were appointed. The interim officers also
serve as our board of directors. On September 8, 2009, we entered into a consent decree with the
Enforcement Division of the SEC, neither admitting nor denying any wrongdoing. In May 2009, the landlord of our facility filed a lawsuit against
us claiming unpaid rent. On August 14, 2009, we entered into a lease termination
agreement with our landlord, whereby the landlord dropped its suit against us in
exchange for a promissory note and other concessions.   ITEM
4. SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS 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.  -
13 -      Quarter Ended
High Bid
Low BidMarch
31, 2008
7.20
0.20June
30, 2008
0.99
0.32September
30, 2008
0.49
0.20December
31, 2008
0.30
0.10March
31, 2009
0.075
0.065June
30, 2009
0.076
0.076September
30, 2009
0.070
0.052December
31, 2009
0.035
0.030 On
April 14, 2010, the closing sales price of our shares of common stock on the
OTCBB was $0.028 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)
18,464,230
$0.186
33,905,000Equity
Compensation Plans Not Approved by Security Holders
-
-
- (1) Through
December 31, 2008, we granted options to acquire 3,427,000 shares of our common
stock at exercise prices between $1.50 and $0.32 per share pursuant to the 2007
Stock Option / Restricted Stock Plan. Due to the suspension of our operations
and the termination of all of our employees on July 1, 2008, 1,692,000 of these
options expired unexercised. During the year ended December 31, 2009, we granted
options to acquire 15,810,000 shares of our common stock at  -
14 -     exercise
prices between $0.07 and $0.035 per share, pursuant to our Revised 2009 Stock
Incentive Plan for Employees and Consultants. Note:
See Note 5 to the Consolidated Financial Statements for complete information on
the assumptions used in the valuation of our common stock warrants and stock
options.  Outstanding Equity Awards to Our Officers at Fiscal
Year-End Name
and Principal Position
Number of  Securities Underlying Unexercised options
that are exercisable (#) (b)
Equity  Incentive  Plan  Awards:  Number
of Securities Underlying  Unexercisable  Options (#)
 (c)
Equity Incentive Plan Awards: Number of  Securities
 Underlying  Unexercised  Unearned  Options  (#)
(d)
Option Exercise Price
($) (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
6,000,000
1,000,000
-
-
-
-
2,000,000 (1)
-
1.50
0.07
0.05
3/30/17
5/19/14
9/16/10
-
-
-
-
-
-
-
-
-
-
60,000
-Randy
 Lieber, Principal Accounting Officer
2,250,000
1,000,000
-
-
750,000 (2)
-
0.07
0.05
5/19/14
9/16/10
-
-
-
-
-
-
22,500
-  (1) The
remaining options for 2,000,000 shares of common stock vest on January 1, 2010. (2) The
remaining options for 750,000 shares of common stock vest on January 1,
2010.     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, 2009 and 2008 and the section of
this Annual Report entitled Description of Business. On
March 30, 2007, we acquired all of the issued and outstanding shares of CellCyte
and we are now a biotechnology company focused on research and development See
Description of Business  The CellCyte Acquisition. The
CellCyte acquisition represented a change in control of our company.  For
accounting purposes, this change in control constitutes a re-capitalization of
our company, and the acquisition has been accounted for as a reverse merger
whereby we, as the legal acquirer, are treated as the acquired entity, and
CellCyte, as the legal subsidiary, is treated as the acquiring company with the
continuing operations.  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.  -
15 -     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. 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) finalize our Interim Operating Plan and formalize 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) conduct pre-clinical lab research to identify key cell lines for
expansion and optimum configurations of the bioreactor device. (d) complete the design and sourcing of components to begin small
scale manufacturing of our cell expansion device technology for use in
collaborative research with academic and institutional research
organizations. (e) initiate collaborative demonstrations of our bioreactor product
with independent research laboratories that require the expansion of cord blood
stem cells, maintenance of islet cells and production of other cell lines and
proteins. (f) locate and occupy new office, lab and manufacturing space if
required to execute our Interim Operating Plan. We anticipate that we will incur an aggregate of $1,000,000 in
expenses and debt service for the next 12 months as follows: (a) $121,000 for facility and equipment related expenses; (b) $80,000 for debt service; (c) $135,000 for pre-clinical work, quality assurance, manufacturing
of biologic material, academic collaborations and further research
collaborations; (d) $128,000 for design and device manufacturing; (e) $210,000 for legal expenses related to intellectual property
prosecution, general corporate matters and facility lease negotiation, and
accounting expenses related to quarterly reviews and annual audits; (f) $205,000 for salaries and consulting; and  -
16 -     (g) $121,000 for general and administrative, travel, conferences and
public relations. During
the next 12 months we anticipate that we will generate minimal non-recoverable
engineering (NRE) service revenue and revenue from the sale and licensing of our
incubator and bioreactor device technology.  We had cash and cash
equivalents of $7,301 and a working capital deficit of $(794,419) at December
31, 2009.  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 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 believe that conventional 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 promissory notes and equity financing from the sale of our common
stock. 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, 2009
Year Ended December 31, 2008Revenues
$
-
$
-Operating
expensesConsulting
(37,509)
(746,273)General
and administrative
(418,290)
(1,111,245)Professional
fees
(405,863)
(952,524)Research,
development and laboratory
-
(622,111)Salaries
and benefits
-
(655,907)Stock-based
compensation
(467,000)
(176,286)Net loss
(1,420,437)
(5,306,159) 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  -
17 -     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, 2009 Compared to Year Ended December 31, 2008 Revenues We
have had no operating revenues since our inception on January 14, 2005, to
December 31, 2009.  We anticipate that we will not generate any significant
revenues for so long as we are a development stage company. Consulting
Expenses We
had consulting expenses of $37,509 in the year ended December 31, 2009, compared
to $746,273 in the year ended December 31, 2008, relating to the suspension of
nearly all activities in 2009 and the last half of 2008. General
and Administrative Expenses Our
general and administrative expenses in the year ended December 31, 2009
decreased to $418,290 from $1,111,245 in 2008, primarily as a result of the
suspension of nearly all activities in 2009 and the last half of 2008. Professional
Fees In
the year ended December 31, 2009, we incurred professional fees of $405,863,
compared to $952,524 in 2008, primarily as a result of the suspension of nearly
all activities in 2009 and the last half of 2008. Research,
Development and Laboratory Expenses In
the year ended December 31, 2009, we had no research, development and laboratory
expenses, compared to $622,111 in 2008, primarily as a result of the suspension
of nearly all activities in 2009 and the last half of 2008. Salaries
and Benefits In
the year ended December 31, 2009, we paid no salaries and benefits, compared to
$655,907 in 2008, primarily as a result of the suspension of nearly all
activities in 2009 and the last half of 2008. Stock-Based
Compensation In
the year ended December 31, 2009, we incurred stock-based compensation expense
of $467,000, compared to $176,286 in 2008, directly related to the increased use
of options to compensate our consultants and Board members for their work our
behalf. Net
Loss As
a result of the above, our net loss for the year ended December 31, 2009 was
$1,420,437, compared to $5,306,159 in 2008.  -
18 -     Liquidity
and Capital Resources As
of December 31, 2009, we had cash in the amount of $7,301 and a working capital
deficit of $(794,419).  Our planned expenditures over the next twelve
months are expected to amount to approximately $1,000,000 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.  However, we cannot provide
investors with any assurance that we will be able to raise sufficient funding
from the sale of our common stock 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 equity financing, there is no assurance that
we will obtain the funding necessary to 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, 2009, was
$29,240, compared to $2,663,630 in the year ended December 31, 2008. Nearly
all of the cash used for operating activities in 2008 was incurred in the first
six months and was related to the commencement of our new plan of operations.
 Cash used for operating activities in 2009 was very limited and was
primarily limited to debt service and outside accounting services. Cash
Used In Investing Activities In
the year ended December 31, 2009, investing activities provided cash of
$36,225, compared to the use of cash of $321,861 in the year ended
December 31, 2008. During 2008 we were still purchasing equipment and
furniture for our new facility, while in 2009 we began selling some of our
excess equipment to help fund our operations. Cash
Provided By Financing Activities We
have funded our business to date primarily from sales of our common stock.
 In the year ended December 31, 2009, financing activities used cash
in the amount of $5,988, primarily for debt service, compared to providing cash
in the amount of $700,338 in the year ended December 31, 2008, primarily
from the sale of our common stock. 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.  -
19 -     Future
Financings We
anticipate continuing to rely on sales of our common shares 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%, required a payment
of $25,000 on or before December 1, 2009, has monthly payments of $5,000
commencing January 1, 2010, and is collateralized by all of the remaining assets
of the Company. The initial $25,000 payment was made on December 1, 2009.
 As of April 14, 2010 we were delinquent on our payments by $7,000. 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  -
20 -     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. 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 $467,000 during the year ended
December 31, 2009. 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. In
December 2009, the FASB issued ASU 2009-16, Transfers and Servicing (ASC 860
Accounting for Transfers of Financial Assets). ASU 2009-16 amends the
accounting for transfers of financials assets and will require more information
about transfers of financial assets, including securitizations, and where
entities have continuing exposure to the risks related to transferred financial
assets. ASU 2009-16 is effective at the start of a reporting entity's first
fiscal year beginning after November 15, 2009, with early adoption not
permitted. We will comply with the additional disclosures required by this
guidance upon its adoption in January 2010.  In
October 2009, the FASB issued ASU 2009-15, Accounting for Own-Share Lending
Arrangements in Contemplation of Convertible Debt Issuance or Other Financing.
ASU 2009-15 amends the accounting and reporting guidance for debt (and certain
preferred stock) with specific conversion features or other options. ASU 2009-15
is effective for fiscal years beginning on or after December 15, 2009. We are
currently assessing the impact of ASU 2009-13 on our consolidated financial
position, results of operations and cash flows. In October 2009, the FASB issued ASU No. 2009-13, Multiple
Deliverable Revenue Arrangements, a consensus of the FASB Emerging Issues Task
Force (ASU 2009-13) (codified within ASC Topic 605). ASU 2009-13 addresses the
accounting for multiple-deliverable arrangements to enable vendors to account
for products or services (deliverables) separately rather than as a combined
unit. ASU 2009-13 is effective prospectively for revenue arrangements entered
into or materially modified in fiscal years beginning on or after June 15, 2010,
with early adoption permitted. We are currently assessing the impact of ASU
2009-13 on our consolidated financial position, results of operations and cash
flows.  -
21 -     In June 2009, the FASB issued ASC 105, Generally
Accepted Accounting Principles. ASC 105 establishes the FASB Accounting
Standards Codification(the Codification) as the single source of
authoritative U.S. generally accepted accounting principles (U.S. GAAP)
recognized by the FASB to be applied by nongovernmental entities. Rules and
interpretive releases of the SEC under authority of federal securities laws are
also sources of authoritative U.S. GAAP for SEC registrants. ASC 105 and the
Codification are effective for financial statements issued for interim and
annual periods ending after September 15, 2009. When effective, the
Codification will supersede all existing non-SEC accounting and reporting
standards. All other non-grandfathered non-SEC accounting literature not
included in the Codification will become nonauthoritative. Following ASC 105,
the FASB will not issue new standards in the form of Statements, FASB Staff
Positions, or Emerging Issues Task Force Abstracts. Instead, the FASB will issue
Accounting Standards Updates, which will serve only to: (a) update the
Codification; (b) provide background information about the guidance; and
(c) provide the bases for conclusions on the change(s) in the
Codification. The adoption of ASC 105 as of September 30, 2009 did not have a
material impact on our consolidated financial statements. In May 2009, the FASB issued ASC 855, Subsequent Events.
This Statement establishes the accounting for and disclosure of events that
occur after the balance sheet date but before financial statements are issued or
are available to be issued. It requires that a Company disclose the date through
which subsequent events have been evaluated, as well as whether that date is the
date the financial statements were issued or the date the financial statements
were available to be issued. We adopted ASC 855 during the second quarter of
2009.  There was no material impact on the our financial statements.   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, 2009 and 2008, 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 (previously known as Williams & Webster, P.S.) 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, 2009.
 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  -
22 -     Principal
Executive Officer and the Principal Accounting Officer, to allow timely
decisions regarding required disclosures. During
the evaluation of disclosure controls and procedures as of December 31, 2009,
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 ineffective. 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,
2009 and 2008, and results of its operations and cash flows for the years ended
December 31, 2009 and 2008, 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, 2009,
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.   -
23 -     The material
weaknesses identified are disclosed below.  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, 2009, 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, 2009
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. __________    -
24 -     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
53
Principal
Accounting Officer and a director
November 24,
2008John M. Fluke,
Jr.Bellevue, Washington, U.S.A.
67
Interim Principal Executive
Officer and a director
June 1,
2007 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 67, 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
Association of Manufacturers as well as the Executive Committees of both trade
organizations (1985 to 1990).  -
25 -     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 53, is a senior financial professional with more than 29 years of
experience working with both public and private companies. He is the managing
partner of Abacube Accounting Services, which provides a full range of
accounting and tax services to small and medium sized businesses.  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 Rosetta Solutions and the Greater Seattle USBC Youth Bowling
Association. 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.  -
26 -     Family
Relationships None
of the directors, officers or the significant employee 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 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, 2009. 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 2010 following the
resumption of operations.    -
27 -     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 $100,000 in
2009 or 2008 (the Named Executive Officers). During 2009 all compensation was
in the form of stock grants or stock option grants. Compensation for stock
grants reflect the estimated fair value of our common stock on the date of
issuance, while the compensation for stock option awards is calculated using the
Black-Scholes model, using the assumptions discussed in the notes to our
financial statements, and recognized over the vesting period. . Summary Compensation Table Name
and Principal Position
Year
Salary($)
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
2009
2008
-
N/A
-
N/A
-
N/A
245,000
N/A
-
N/A
-
N/A
-
N/A
245,000
N/ARandy
 Lieber, Principal Accounting Officer
2009
2008
-
N/A
-
N/A
75,461
N/A
57,500
N/A
-
N/A
-
N/A
-
N/A
132,961
N/AGary
A. Reys,Chief Executive Officer
2009
2008
N/A
160,417
N/A
-
N/A
-
N/A
-
N/A
-
N/A
-
N/A
-
N/A
160,417  Stock
Options John
M. Fluke, Jr. became our Interim Principal Executive Officer during 2008. Mr.
Fluke was granted an option in March 2007 for 150,000 shares of our common stock
with an exercise price of $1.50 per share. During 2009, Mr. Fluke was granted
options to purchase 9,000,000 shares of common stock at exercise prices between
$0.07 and $0.05 per share. Randy
A. Lieber became our Interim 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 $0.05 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.  -
28 -     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 expiry 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 2009: 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.
-
36,750
75,000
-
-
-
111,750Randy
A. Lieber
-
-
75,000
-
-
-
75,000 During
2009, Mr. Fluke was paid director fees as specified by the CellCytes Director
Fee Schedule adopted upon Mr. Flukes appointment to our Board of Directors in
June 2007. Mr. Fluke was granted a total of 592,742 shares of our common stock
in 2009. 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. See Note 5 to
our Consolidated Financial Statements for more complete information on the
assumptions used in valuing our stock compensation.  -
29 -     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 14, 2010, there are 72,337,745 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
8,560,585(4)
9.7%John M. Fluke,
Jr.Interim Principal Executive Officer and a director
11,287,989(3)
12.8%Directors and
Executive Officers as a Group (2 Persons)
19,848,574
22.5%Beneficial Owners of
in Excess of 5% (other than Executive Officers and
Directors)Gary A.
ReysStockholder
18,625,000
21.1%Dr. Ronald W.
Berninger, Ph.D.Stockholder
18,625,000
21.1%  (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 14, 2010.
As of April 14 2010, there were 72,337,745 shares issued and outstanding. In
addition, stockholders listed above hold 15,950,000 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 10,550,000 shares of our common stock at
exercise prices of $0.05 to $1.50 per share. (4) Includes
vested options to acquire up to 5,400,000 shares of our common stock at exercise
prices of $0.05 to $0.07 per share.   -
30 -     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. On December 23, 2009, our 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. Material
Contracts None.   ITEM
14. PRINCIPAL
ACCOUNTANT FEES AND SERVICES We
engaged BehlerMick PS (formerly Williams & Webster, P.S.), 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, 2009
Fiscal Year EndedDecember 31, 2008Audit
Fees
$54,301
$82,063Audit-related
Fees
-
-Tax
Fees
-
$3,829All
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.  -
31 -     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, 2004.21.1
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.    -
32 -     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
15, 2010John M. Fluke, Jr., Director Date /s/
Randy Lieber April
15, 2010Randy Lieber, Director Date   -
33 -     CELLCYTE GENETICS CORPORATION (a Development Stage Company)  Consolidated
Financial Statements  December 31, 2009   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, 2009 and 2008, and the related
consolidated statements of operations, stockholders equity and cash flows for
the years then ended and for the period from January 14, 2005 (Inception) to
December 31, 2009. These consolidated financial statements are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these financial statements based on our audits.  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, 2009 and 2008, and the results
of its operations and its cash flows for the years then ended and for the period
from January 14, 2005 (Inception) to December 31, 2009, 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 sustained operating losses since inception, has limited
cash resources and has not generated any revenues. 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, 2010   F-2      CELLCYTE
GENETICS CORPORATION(a Development
Stage Company)CONSOLIDATED
BALANCE SHEETSDecember 31,

December 31,2009

2008ASSETSCURRENT
ASSETSCash and cash
equivalents
$
7,301

$
6,304Other
receivables

25,900


-Prepaid expenses
and deposits

6,875


78,898Total Current
Assets

40,076


85,202OTHER
ASSETSFurniture and
equipment, net of depreciation and impairment

137,787


537,945Intellectual
property, net of amortization and impairment

38,732


46,236Total Other
Assets

176,519


584,181TOTAL
ASSETS
$
216,595

$
669,383LIABILITIES
AND STOCKHOLDERS' DEFICITCURRENT
LIABILITIESAccounts
payable
$
644,666

$
935,283Accrued
expenses

19,277


-Due to related
parties

140,704


134,239Deferred
rent

-


7,853Note payable -
current portion

29,848


-Convertible note
payable to related party

-


16,400Total Current
Liabilities

834,495


1,093,775LONG TERM
LIABILITIESConvertible
notes - related party

22,000


-Note payable -
long term portion

232,256


-Total Long Term
Liabilities

254,256


-COMMITMENTS AND
CONTINGENCIES

-


-STOCKHOLDERS'
DEFICITCommon stock,
$0.001 par value; 525,000,000 shares authorized,71,081,307 and
62,919,845 shares issued and outstanding, respectively

71,081


62,920Additional paid
in capital

10,956,070


9,926,010Common stock
purchase warrants

49,154


114,702Deficit
accumulated during development the stage

(11,948,461)


(10,528,024)Total
Stockholders' Deficit

(872,156)


(424,392)TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
$
216,595

$
669,383The
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 31,2009

2008

2009REVENUES

$
-

$
-

$
-OPERATING
EXPENSES:Consulting


37,509


746,273


1,677,607General and
administrative


418,290


1,111,245


2,282,925Professional
fees


405,863


952,524


1,607,389Research,
development and laboratory


-


622,111


1,296,619Salaries and
benefits


-


655,907


1,457,524Stock-based
compensation


467,000


176,286


2,423,286Total
Operating Expenses


1,328,662


4,264,346


10,745,350LOSS FROM
OPERATIONS


(1,328,662)


(4,264,346)


(10,745,350)OTHER INCOME
(EXPENSE)Interest
income


-


19,890


32,512Interest and
finance charges


(76,530)


(47,478)


(206,153)Impairment of
intellectual property


-


(568,913)


(568,913)Impairment of
tenant improvements


-


(383,535)


(383,535)Gain on
extinguishment of debt


53,547


-


53,547Loss on disposal
of furniture and equipment

(68,792)


(61,777)


(130,569)Total Other
Income (Expense)


(91,775)


(1,041,813)


(1,203,111)LOSS BEFORE
TAXES


(1,420,437)


(5,306,159)


(11,948,461)INCOME
TAXES


-


-


-NET LOSS

$
(1,420,437)

$
(5,306,159)

$
(11,948,461)BASIC AND
DILUTED NET LOSSPER COMMON
SHARE

$
(0.02)

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


66,488,444


61,928,001The
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 31,2009

2008

2009CASH FLOWS FROM
OPERATING ACTIVITIES:Net loss

$
(1,420,437)

$
(5,306,159)

$
(11,948,461)Adjustments to
reconcile net loss to net cash used byoperating
activitiesAmortization of
intellectual property


7,504


34,339


107,883Depreciation of
furniture and equipment


148,717


301,466


492,530Stock-based
compensation


467,000


176,286


2,423,286Non-cash
services


400,119


492,601


892,720Warrant issued
for legal services


46,154


-


46,154Accounts payable
paid with common stock


69,755


-


69,755Non-cash
beneficial conversion right


20,000


16,400


36,400Non-cash
impairment of tenant improvements


-


383,535


383,535Non-cash
impairment of intellectual property


-


568,913


568,913Expenses paid by
shareholder


6,465


26,290


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


68,792


61,777


130,569Decrease
(increase) in assetsOther
receivables


(25,900)


-


(25,900)Prepaid expenses
and deposits


72,023


102,242


(6,875)Increase
(decrease) in liabilitiesAccounts
payable


(383,803)


522,446


519,419Deferred
rent


7,853


7,853


15,706Accrued
interest


-


-


82,088Accrued
expenses


19,277


(51,619)


19,277Net cash used by
operating activities


(29,240)


(2,663,630)


(5,693,005)CASH FLOWS FROM
INVESTING ACTIVITIES:Intellectual
property acquisition


-


(73,594)


(715,528)Cash from sales
of equipment


36,225


-


36,225Furniture and
equipment acquisition, net


-


(248,267)


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


-


-


1,429Net cash used by
investing activities


36,225


(321,861)


(2,004,944)CASH FLOWS FROM
FINANCING ACTIVITIES:Proceeds from
issuance of convertible notes


22,000


16,400


973,400Proceeds from
convertible note allocated to warrant

3,000


-


3,000Advances from
related party


2,534


-


106,483Payments on note
payable


(33,522)


-


(33,522)Proceeds from
sale of common stock


-


683,938


6,655,889Net cash
provided by financing activities


(5,988)


700,338


7,705,250Net increase in
cash and cash equivalents


997


(2,285,153)


7,301Cash and cash
equivalents, beginning of period


6,304


2,291,457


-Cash and cash
equivalents, end of period

$
7,301

$
6,304

$
7,301SUPPLEMENTAL
CASH FLOW DISCLOSURES:Income taxes
paid

$
-

$
-

$
-Interest
paid

$
10,883

$
8,066

$
18,949NON CASH
INVESTING AND FINANCING ACTIVITESExpenses paid by
stockholders

$
6,465

$
-

$
6,465Issuance of
common stock for accounts payable

$
69,755

$
-

$
69,755Note payable to
related party converted to common stock
$
36,400


-

$
36,400Issuance of note
for insurance

$
20,625

$
-

$
20,625Issuance 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' EQUITY DEFICITCommon

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)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 discovery and development of stem cell therapeutic products and the
development of its cell expansion technology. 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, 2009, the Company has accumulated
losses of $11,948,461. As shown in the accompanying financial statements, the Company has
incurred significant losses since inception, has not generated any revenues to
date, and is involved in certain legal matters as more fully discussed in Note
8. 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 14, 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 cash equivalents equal to $7,301
on deposit with Bank of America at December 31, 2009. Concentration of Risks The Company maintains its cash and cash equivalents in commercial
accounts at major financial institutions.  Balances in these accounts may
at times exceed the Federal Deposit Insurance Corporation limit.         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, 2009, there were outstanding warrants for
919,230 shares of common stock, options for 17,545,000 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
$11,948,461 and used $5,693,005 in cash for operating activities from
its inception through December 31, 2009. 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.  Effective July 1, 2008, the
Company recorded an impairment of $568,913 on its intellectual property (Note
3). In addition, on December 31, 2008 the Company recorded an impairment of
$383,535 against its tenant improvements (Note 3). 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. In
December 2009, the FASB issued ASU 2009-16, Transfers and Servicing (ASC 860
Accounting for Transfers of Financial Assets). ASU 2009-16 amends the
accounting for transfers of financials assets and will require more information
about transfers of financial assets, including securitizations, and where
entities have continuing exposure to the risks related to transferred financial
assets. ASU 2009-16 is effective at the start of a reporting entity's first
fiscal year beginning after November 15, 2009, with early adoption not
permitted. The Company will comply with the additional disclosures required by
this guidance upon its adoption in January 2010.        In
October 2009, the FASB issued ASU 2009-15, Accounting for Own-Share Lending
Arrangements in Contemplation of Convertible Debt Issuance or Other Financing.
ASU 2009-15 amends the accounting and reporting guidance for debt (and certain
preferred stock) with specific conversion features or other options. ASU 2009-15
is effective for fiscal years beginning on or after December 15, 2009. The
Company is currently assessing the impact of ASU 2009-13 on its consolidated
financial position, results of operations and cash flows.  In
October 2009, the FASB issued ASU No. 2009-13, Multiple Deliverable Revenue
Arrangements - a consensus of the FASB Emerging Issues Task Force (ASU 2009-13)
(codified within ASC Topic 605). ASU 2009-13 addresses the accounting for
multiple-deliverable arrangements to enable vendors to account for products or
services (deliverables) separately rather than as a combined unit. ASU 2009-13
is effective prospectively for revenue arrangements entered into or materially
modified in fiscal years beginning on or after June 15, 2010, with early
adoption permitted. The Company is currently assessing the impact of ASU 2009-13
on its consolidated financial position, results of operations and cash
flows. In June 2009, the FASB issued ASC 105, Generally Accepted
Accounting Principles. ASC 105 establishes the FASB Accounting Standards
Codification(the Codification) as the single source of authoritative
U.S. generally accepted accounting principles (U.S. GAAP) recognized by the FASB
to be applied by nongovernmental entities. Rules and interpretive releases
of the SEC under authority of federal securities laws are also sources of
authoritative U.S. GAAP for SEC registrants. ASC 105 and the Codification are
effective for financial statements issued for interim and annual periods ending
after September 15, 2009. When effective, the Codification will supersede
all existing non-SEC accounting and reporting standards. All other
non-grandfathered non-SEC accounting literature not included in the Codification
will become nonauthoritative. Following ASC 105, the FASB will not issue new
standards in the form of Statements, FASB Staff Positions, or Emerging Issues
Task Force Abstracts. Instead, the FASB will issue Accounting Standards Updates,
which will serve only to: (a) update the Codification; (b) provide
background information about the guidance; and (c) provide the bases for
conclusions on the change(s) in the Codification. The adoption of ASC 105
as of September 30, 2009 did not have a material impact on the Companys
consolidated financial statements. In May 2009, the FASB issued ASC 855, Subsequent Events.
This Statement establishes the accounting for and disclosure of events that
occur after the balance sheet date but before financial statements are issued or
are available to be issued. It requires the Company to disclose the date through
which subsequent events have been evaluated, as well as whether that date is the
date the financial statements were issued or the date the financial statements
were available to be issued. The Company adopted ASC 855 during the second
quarter of 2009.  There was no material impact on the Companys financial
statements. 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 $467,000 during the
year ended December 31, 2009 and $176,286 during the year ended December 31,
2008.       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. In 2006, the Company entered into an intellectual property
licensing agreement with the U.S. Department of Veterans Affairs (VA) for which
it paid a total of $115,000.  The license agreement relates to certain
patents pending and contains royalty payment arrangements as well as funding
guarantees.  Through June 30, 2008, the Company had incurred an additional
$528,128 in costs related to perfecting the VA patents and applying for patent
protection in several foreign jurisdictions. Effective July 1, 2008, the Company evaluated the recoverability
of its intangible assets and recorded an impairment of $568,913 on its licenses
and patents pending related to the VA intellectual property. The Companys
initial research and testing of the VA technology did not yield the anticipated
results nor support the VAs claims regarding the technology and will require
further testing to prove otherwise. The Company determined that recovery of
these costs through future net cash flows was uncertain and that it was
appropriate for financial statement purposes to record an impairment loss on its
licenses and patents pending. 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, 2009 and
2008: 2009

2008Licenses

$
-

$
115,000Patents


70,002


70,002Patents
pending


-


528,128Accumulated
amortization


(31,270)


(97,982)Impairment
loss


-


(568,913)Licenses
and 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, 2009 and 2008 was $156,221
and $227,087, 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, 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. During the year ended December 31, 2008 the Company acquired
$102,615 of computer equipment, $90,319 of laboratory equipment and $197,281 of
tenant improvements. In addition, during the same period the Company disposed of
laboratory and office equipment with an original cost of $236,906 for proceeds
of $126,599, resulting in a loss on disposal of $61,777. Effective December 31, 2008, the Company evaluated the
recoverability of the value of its tenant improvements. Due to the curtailment
of the Companys activities and the default situation under the Companys
facility lease, the Company determined that recovery of these costs through
future net cash flows was uncertain and that it was appropriate for financial
statement purposes to record an impairment loss of $383,535 on its tenant
improvements. Property and equipment were as follows as of December 31, 2009 and
2008: 2009

2008Laboratory
equipment

$
202,644

$
379,014Computer
and office equipment


90,760


383,198Tenant
improvements


-


469,900Accumulated
depreciation and amortization


(155,617)


(310,632)Impairment
loss


-


(383,535)Property
and equipment, net

$
137,787

$
537,945  NOTE 4  COMMITMENTS AND CONTINGENCIES Operating Leases On April 20, 2007 the Company entered into a 60 month lease for a
new facility in Bothell, Washington. The lease commencement date of this lease
was February 1, 2008.   Rent and utilities expense relating to the
operating lease was $208,219 for the year ended December 31, 2009.       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%, required an initial
payment of $25,000 on or before December 1, 2009, and has monthly payments of
$5,000 commencing January 1, 2010. The initial payment of $25,000 was paid on
December 1, 2009. As of April 14, 2010, the Company was delinquent in its payments
by $7,000. Principle payments under the promissory note are as follows: Year

Principle Payments2010
$
27,5092011

33,9732012

38,2112013

43,1282014

48,598Thereafter

68,346Total
$
259,764 Legal Fees As of December 31, 2009, the Company was involved in a stockholder
lawsuit and a dispute with a former employee (Note 8). These legal disputes were
either dismissed or settled subsequent to year end (Note 8) with no additional
costs to the Company. 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 71,081,307 and
62,919,845 shares of its common stock at December 31, 2009 and December 31,
2008, respectively. During the year ended December 31, 2009, the Company issued common
stock as follows: · 1,000,000 shares of common stock were issued in the conversion of
a promissory note with an estimated fair value of $36,400. · 7,161,462 shares of common stock were issued in exchange for
services with an estimated fair value of $400,119. 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%. During the year ended December 31, 2008, the Company repriced a
total of 4,592,079 warrants previously issued at an exercise price of $3.00 per
warrant, to a new exercise price of $0.30 per warrant.  The Company
recorded a charge to additional paid in capital of $367,366 representing the
estimated fair value of the warrant repricing.  Also during 2008, a
stockholder of the Company rescinded a portion of their prior investment
totaling $100,159 in gross proceeds to the Company and applied the proceeds to
exercise a total of 333,862 of the repriced warrants. The remaining 4,258,217
repriced warrants expired unexercised. The Companys common stock purchase warrant activity for the years
ended December 31, 2009 and December 31, 2008 is as follows:  WarrantsOutstanding

Weighted AverageExercise Price

Weighted AverageRemaining LifeBalance,
December 31, 2007
4,659,225
$
3.00

0.75 yearsWarrants
issued
1,529,365

0.75Warrants
exercised
(401,008)

0.75Warrants
expired
(4,258,217)

0.30Balance,
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 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. During the year ended December 31, 2008, the Company granted a
total of 1,427,000 stock options to certain employees, officers, directors and
consultants of the Company to acquire shares of the Companys common stock at
prices ranging from $0.32 per share to $0.52 per share for periods ranging from
5 to 10 years.  The fair value of the stock options granted during 2008 was
estimated to be $393,380 and was determined using the Black-Scholes option
pricing model using the following weighted average assumptions: expected option
life of 5.35 years; risk-free interest rate of 3.08%; dividend yield of 0%; and
expected volatility of 112%. Certain of these options were subject to vesting conditions and,
as of December 31, 2008, the Company had recorded stock-based compensation of
$176,286 in connection with the vesting of these options.  As a result of
the suspension of operations on July 1, 2008, all employee incentive stock
options expired unexercised on October 1, 2008. In addition, all non-qualified
stock options that had not vested as of July 1, 2008 were canceled. As of
December 31, 2009, 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, 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%. Certain of the 2009 options are subject to vesting
conditions and, as of December 31, 2009, the Company has recorded stock-based
compensation of $467,000 in connection with the vesting of these options. The Companys stock option activity under both the 2007 and 2009
Plans for the years ended December 31, 2009 and 2008 is as follows: OptionsOutstanding

Weighted AverageExercise Price

Weighted AverageRemaining LifeBalance,
December 31, 2007
2,000,000
$
1.50

7.31 yearsOptions
granted
1,427,000

0.34Options
exercised
-

-Options
cancelled and expired
(1,692,000)

0.68Balance,
December 31, 2008
1,735,000

1.34

5.47 years        Options
granted
15,810,000

0.066Options
exercised
-

-Options
cancelled and expired
-

-Balance,
December 31, 2009
17,545,000
$
0.19

3.81 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 Note On December 23, 2009, a consultant 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 principle 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). 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, 2009 the Company owed this stockholder $107,949.  These
advances are unsecured, non-interest bearing with no set terms of repayment. Stockholder Note Payable In September and October of 2008, a stockholder of the Company
advanced a total of $15,000 to help fund ongoing operations. These advances and
accrued interest in the amount of $1,400 were formalized into a convertible note
payable on November 18, 2008. The note bears interest at 1% per month, has no
set term, and can be converted into the Companys common stock at the rate of
$.05 per share upon demand. Since the conversion price of the convertible note
was below the Companys market price at the date of the Note, the Company has
estimated the value of the beneficial conversion right to be $16,400 and has
recorded this as a finance charge with an off-set to additional
paid-in-capital. On March 25, 2009, this same stockholder advanced an additional
$20,000 to help fund operations. The original note payable was increased to
$36,400 and the terms were modified to remove the monthly interest charge and to
set the entire note payable to be convertible into 1,000,000 shares of the
Companys common stock. Since the conversion price of the revised convertible
note was below the Companys market price at the date of the Note, the Company
has estimated the value of the additional beneficial conversion right to be
$20,000 and has recorded this as a finance charge with an off-set to additional
paid-in-capital. On June 26, 2009, the stockholder converted the promissory note
into 1,000,000 shares of the Companys common stock.       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, 2009 and 2008 the Company had gross deferred tax assets calculated
at an expected rate of 34% of approximately $4,054,000 and $3,571,000,
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 $4,054,000
and $3,571,000 has been established at December 31, 2009 and 2008,
respectively.  The
significant components of the Companys net deferred tax asset at December 31,
2009 and 2008 are as follows:  2009

2008Gross deferred tax asset:Net operating loss carry forwards

$
4,054,000

$ 3,571,000Gross deferred tax liabilities:Valuation allowance

(4,054,000)

(3,571,000)Net deferred tax asset

$
-

$
-  At
December 31, 2009 and 2008 the Company has net operating tax loss carry forwards
of approximately $11,924,000 and $10,503,000, respectively, which will expire in
the years 2025 through 2029.  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. NOTE 8  LEGAL DISPUTES In January 2008, three stockholder lawsuits were filed against the
Company in the United States federal court for the Western District of
Washington: Armbruster v. Cellcyte Genetics Corporation, et. al,No.
C08-0047, Tolerico v. Cellcyte Genetics Corporation, et. al., No.
C08-0163 and Pruitt v. Cellcyte Genetics Corporation, et. al., No.
C08-0178.  An amended complaint consolidating the 3 lawsuits was filed and
the amended consolidated complaint alleged, inter alia, that the Company
and its officers and directors filed misleading statements with the Securities
and Exchange Commission regarding the Companys products, and that it posted
misleading information regarding an officer on the Companys website.  The
lawsuits claimed that investors purchased the Companys stock based on the
alleged misleading statements and seek monetary relief. On March 22, 2010 all claims against the Company and its officers
and directors related to the stockholder lawsuits were dismissed, without
prejudice, and without an award of costs to any party. The Company was also engaged in a dispute with a former employee,
who voluntarily resigned in 2007.  The former employee had signed an
employment agreement with the Company which contained certain restrictions on
their conduct after termination of employment.  The former employee was
claiming to have been misled into signing the agreement and was seeking monetary
damages for constructive discharge and relief from the terms of the employment
contract, which the Company disputed. On February 3, 2010, the Company entered into a Mutual Release
Agreement with this former employee which settled all of its outstanding
litigation involving this former employee. Both the arbitration and the
underlying lawsuit were dismissed with prejudice, with none of the parties
admitting any liability for damages. The Mutual Release Agreement became
effective on March 3, 2010 following the completion of all activities
contemplated under the Agreement. In January 2008, the Securities and Exchange Commission (SEC)
notified the Company that it was commencing an informal non-public inquiry
regarding certain matters related to the Companys filings. The SEC requested
that the Company voluntarily produce documents relating to its investigation. On
May 12, 2008, the Company learned that the informal inquiry commenced by the SEC
had become a formal investigation. On September 8, 2009, the Company entered into a consent decree
with the Enforcement Division of the SEC, neither admitting nor denying any
wrongdoing. In May 2009, the landlord of the Companys facility filed a
lawsuit against the Company claiming unpaid rent. On August 14, 2009, the
Company entered into a lease termination agreement with its landlord, whereby
the landlord dropped its suit against the Company in exchange for a promissory
note and other concessions. NOTE 9  SUBSEQUENT EVENTS  On
January 11, 2010, the Company issued 1,256,438 shares of its common stock, with
a fair value of $40,080, to its consultants and contractors in exchange for
services.        On
January 13, 2010, the Company granted options to purchase 8,400,000 shares of
its common stock to its Directors for their services as Board members for 2010.
These options will vest evenly over 12 months as the services are performed. On February 3, 2010, the Company entered into a Mutual Release
Agreement with a former employee which settled all of its outstanding litigation
involving this former employee. Both the arbitration and the underlying lawsuit
were dismissed with prejudice, with none of the parties admitting any liability
for damages. The Mutual Release Agreement became effective on March 3, 2010
following the completion of all activities contemplated under the Agreement. On March 22, 2010 all claims against the Company and its officers
and directors related to the stockholder lawsuits were dismissed, without
prejudice, and without an award of costs to any party. As of April 14, 2010, the Company was delinquent in its payments
to its prior landlord in the amount of $7,000.