UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

               |X| ANNUAL REPORT UNDER SECTION 13 OR 15 (D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008

          |_| TRANSITION REPORT PURSUANT TO SECTION 13 OF 15 (D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                        FOR THE TRANSITION PERIOD FROM TO

                        COMMISSION FILE NUMBER: 000-26807

                                 CYTOGENIX, INC.
             (Exact name of registrant as specified in its charter)

           Nevada                                   76-048409
  (State or other jurisdiction            (I.R.S. Employer Identification
     of incorporation)                          or organization No.)

              3100 WILCREST, SUITE 140, HOUSTON, TEXAS    77042
              (Address of principal executive offices)  (Zip Code)


          Issuer's telephone number, including area code: 713-789-0070

      Securities registered under Section 12 (b) of the Exchange Act: NONE

         Securities registered under Section 12 (g) of the Exchange Act:
                        COMMON STOCK WITH $.001 PAR VALUE
                                (Title of Class)

Indicate  by check mark if the  Registrant  is a well known  seasoned  issuer as
defined in Rule 405 of the securities Act. Yes |_| No |X| Indicate by check mark
if Registrant is not required to file reports  pursuant to Section 13 or Section
15 (d) of the Act. Yes |_| No |X|

Indicate by check mark whether the Registrant (1) has 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. Yes |X| No |_|

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K 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. |X|

Indicate by check mark whether the Registrant is a large  accelerated  filer, an
accelerated  filer, or a  non-accelerated  filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.

Large accelerated  filer |_|                   Non-accelerated  filer | |
Accelerated  Filer |_ |                        Smaller reporting company [X]

<PAGE>


Indicate by check mark whether the  Registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes |_| No |X|

The  aggregate  market value of the voting stock held by  non-affiliates  of the
Registrant as of June 30, 2008 (the last business day of the  Registrant's  most
recently  completed  second fiscal quarter) was  approximately  $6,694,000.  The
number of outstanding shares of the Registrant's Common Stock as of the close of
business on May 14, 2009 was 169,404,590.

                       DOCUMENTS INCORPORATED BY REFERENCE

None































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                                 CYTOGENIX, INC.
                                 FORM 10-K INDEX

                                     PART I


                                      Page

Item 1.    Description of Business........................................     4

Item 1A.   Risk Factors ..................................................    13

Item 1B.   Unresolved Staff Comments  ....................................    13

Item 2.    Description of Property .......................................    14

Item 3.    Legal Proceedings .............................................    14

Item 4.    Submission of Matters to a Vote of Security Holders ...........    14

                                     PART II

Item 5.    Market for Common Equity and Related Stockholder Matters ......    15

Item 6.    Selected Financial Data  ......................................    16

Item 7.    Management's Discussion and Analysis of Financial
           Conditions and Results of Operations ..........................    16

Item 7A.   Quantitative and Qualitative Disclosures about
           Market Risk ...................................................    21

Item 8.    Financial Statements ..........................................    22

Item 9.    Changes in and Disagreements with Accountants on
           Accounting and Financial Disclosure ...........................    36

Item 9A.   Controls and Procedures  ......................................    37

Item 9B.   Other Information .............................................    38

                                    PART III

Item 10.   Directors and Executive Officers of the Registrant ............    38

Item 11.   Executive Compensation ........................................    40

Item 12.   Security Ownership of Certain Beneficial Owners
           and Management and Related Stockholder Matters ................    43

Item 13.   Certain Relationships and Related Transactions ................    44

Item 14.   Principal Accountant Fees and Services ........................    44

                                     PART IV

Item 15.   Exhibits, Financial Statement Schedules and Reports
           on Form 8-K....................................................    45

           Signatures.....................................................    46


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<PAGE>

                                     PART I


ITEM 1. DESCRIPTION OF BUSINESS

GENERAL OVERVIEW

CytoGenix,  Inc.  ("CytoGenix" or "the Company") is a biopharmaceutical  company
whose primary focus is the development and  commercialization of its proprietary
technologies  for  identifying and silencing  disease causing genes,  expressing
proteins  for  applications   such  as  vaccines  and  isolating  novel  nucleic
acid-based  anti-microbial  compounds. The Company's three technologies include:
i) gene  silencing  techniques  (ssDNA)  applicable  to  genes  from  pathogenic
organisms or selected  genes from a patient to prevent the expression of harmful
proteins,  thereby  preventing or ameliorating  disease;  ii) a novel, cell free
process to  produce  large  quantities  of DNA  (synDNA(TM))  for use in its own
products and for sale to other biopharmaceutical or life science companies;  and
iii)  a  methodology  to  isolate  and   characterize   novel   DNA-based  drugs
(Oligogenix(TM))  to which harmful bacteria have not developed  resistance.  The
Company  seeks to generate  revenues  and improve the health and  well-being  of
humans,  animals and plants by utilizing  its  technology  to produce  molecular
therapies.  In addition to  development  and  commercialization  of  therapeutic
compounds,  the Company seeks to provide the service of custom DNA manufacturing
as well as to sell and/or license its  technology to other  research  facilities
and  companies  seeking to research or regulate a specific  gene function and to
consumers of plasmid DNA.

The Company was formed in 1995 as a biomedical research and development company.
The  original  name of the  Company was  Cryogenic  Solutions,  Inc.,  until the
Company changed its name to CytoGenix,  Inc. in January 2000. Equity funding has
been the primary source of operational,  research and commercialization  working
capital since the Company's inception. The Company made a transition to research
and development of its present technologies in 1998. Since then, the Company has
dedicated  itself to engineering  DNA-based  molecules for  therapeutic and drug
target  identification   purposes.  The  Company's  expertise  in  nucleic  acid
technology  enables  it to  focus on the  development  of new  types of  nucleic
acid-based therapeutics.

GENE EXPRESSION AND HUMAN DISEASE

Widely published  scientific studies conducted over the last 20 years by leading
universities,  government research  laboratories such as the National Institutes
of Health and the National Cancer Institute,  and private research laboratories,
have established that most diseases are the result of malfunctioning genes in an
organism's  genome,  or the  activities of genes  expressed by pathogens such as
viruses,  bacteria or fungi.  This genetic  activity  causes the  production  of
harmful proteins that lead to the symptoms and destructive  results of diseases.
Examples of diseases caused by the production of such harmful  proteins  include
cancer,  herpes,  sepsis (blood  poisoning)  and a host of others.  To produce a
protein,  a cell first  makes a positive  copy  (messenger  RNA) of the DNA code
containing the information  necessary to produce the protein. This messenger RNA
(mRNA) is called the "sense" molecule. This message-carrying molecule then moves
to  another  part of the  cell  where it  participates  in the  assembly  of the
biochemical components to produce proteins.

In many  instances  it is possible to inhibit the  production  of these  harmful
proteins by  introducing  or  producing  small  molecules  of  specific  genetic
material into the cells themselves. This genetic activity can be interrupted and
controlled  at three  levels  with the  introduction  of  multiple  copies  of a
specific  sequence of single  stranded DNA ("ssDNA") into the cells at the level
of the genomic DNA itself,  interfering with the  transcription of the messenger
RNA ("mRNA") or by directly binding to a protein to disable it.



                                       4
<PAGE>

CYTOGENIX GENE SILENCING TECHNOLOGY

CytoGenix owns patented  intracellular  expression  system technology to produce
desired  sequence-specific,  ssDNA molecules in individual cells for the purpose
of triplex, antisense, catalytic DNA, and aptamer applications.

     1.   Triplex:  As  mRNA  is  transcribed  and the  DNA  strands  are  still
          separated,  a single strand of complementary  DNA is inserted into the
          gap forming a triple helix  (triplex)  structure,  thus preventing the
          future production of mRNA from that segment.
     2.   Antisense:  Messenger RNA is intercepted  en route by a  complementary
          ssDNA sequence that it binds to and results in the  destruction of the
          mRNA by  enzymes  within  the  cell,  thus  preventing  the mRNA  from
          producing the undesired protein.
     3.   Catalytic  DNA:  Similar to antisense,  an ssDNA  sequence  containing
          sequence  regions  binds  to the  mRNA,  but  also  contains  a unique
          sequence region that acts to cut and destroy the mRNA, thus preventing
          it from producing the undesired protein.
     4.   Aptamer:  The ssDNA binds to the protein itself in the cell and causes
          the undesired protein to become inactivated or dysfunctional.

The key to success with these genetic interventions is to insure that sufficient
quantities of the ssDNA  molecules  ultimately are produced in targeted cells or
induced from external sources.  CytoGenix has invented a compound that functions
as a tiny  biological  "factory"  and  after  its  introduction  into the  cell,
actually  produces many copies of specific ssDNA  molecules in the cell. A major
element of CytoGenix's business is to refine this technology and apply it to the
delivery of various  patented DNA  molecules  for the  development  of effective
therapeutic drugs.

DEVELOPMENTS TO DATE (RESEARCH AND DEVELOPMENT)

The ssDNA expression vector  technology  originated with the work of Dr. Charles
Conrad,  which he  developed  while at  InGene,  Inc.  The  original  expression
cassette  technology is protected by issued  United States Patent No.  6,054,299
entitled,  "Methods and Compositions for Producing Single-stranded cloned DNA in
eukaryotic  cells." In 1999,  CytoGenix  purchased  the  rights to Dr.  Conrad's
patent  as well as other  proprietary  information  from  InGene,  and has since
instituted a broad research and  development  program to advance single stranded
DNA expression technology.  Applications to protect subsequent  improvements and
therapeutic  applications of this technology have since been filed to expand the
protection of this technology in both the US and foreign markets. As of December
31, 2008 CytoGenix holds a patent  portfolio of  approximately  13 granted and 2
allowances  with  approximately  55  additional  foreign  or US  pending  patent
applications  claiming  methods and  materials in  connection  with our platform
technologies. This assertive approach for protection of the Company's technology
has enabled  CytoGenix to expand and refine the development of therapeutics  for
human, animal and agricultural use. The Company currently holds thirteen granted
patents  covering  the  early  ssDNA  expression  technology  in US and  foreign
markets, and one US and one foreign allowance for our Herpes therapeutic.

These patents are  important to the Company  because they help form the basis of
the  technology  needed  for  the  production  of  the  Company's  complementary
technology  and other  products.  The  technology  has been  proven in  numerous
laboratory  and animal  experiments  and has been widely  published as set forth
below.  It has  been  reported  in  scientific  literature,  such as in  Reuters
Business Insight 2000  publication,  Antisense  Therapy:  Technical  Aspects and
Commercial  Opportunities  by Prof.  Dr. K.K.  Jain,  M.D.  that other  molecule
delivery   methods  have  failed  to  provide   sufficient   quantities   to  be
therapeutically effective except in limited applications.
 Laboratory  cell culture  studies have  demonstrated  that the Company's  ssDNA
expression  vector can  adequately  deliver  sequence  specific DNA molecules in
sufficient  quantities in virtually all cell types,  thereby  overcoming many of
the challenges previously experienced.
 As described under "CytoGenix Gene Silencing  Technology"  above, the Company's
technology  is not limited to only  antisense  applications,  but can target and
enzymatically  cleave  target mRNA using DNA enzyme  formulations.  As described
above,  the  technology  can  also  be  used  to (i)  generate  triplex  forming
oligonucleotides  that bind to  specific  sites in the genome  itself to inhibit
expression by the gene at that site,  (ii) generate ssDNA that bind to specific,
targeted  proteins to neutralize  them and (iii)  competitively  inhibit genetic
expression/transcription   of  targeted  genes.  The  Company  has  successfully
extended the results achieved in cell cultures to cells in live animals.


                                       5
<PAGE>

The genomics field has vastly expanded the number of potential drug targets. The
Company  has  utilized  its ssDNA  expression  technology  to  develop a library
screening technique for gene target identification and validation. The CytoGenix
proprietary  gene  neutralization  system is a powerful tool in confirming  gene
target function.  The screening  library  technique enables efficient testing of
multiple  oligonucleotide  sequences.  When a sequence silences a targeted gene,
the construct for  introducing  the  identified  sequence in cellular and animal
experiments  is readily  produced.  Use of the screening  library has led to the
discovery  of  sequences  that have  been  useful in  several  of the  Company's
products under development.

The  Company has  developed  a novel  screening  library  technique  to identify
oligonucleotides  with specific  activity  against  bacteria in a given culture.
This technology  platform is called  Oligogenix(TM) and has been used to produce
compounds  with activity  against  bacteria  using mimetic  oligonucleotides  as
sequences to silence  targeted  bacterial  genes.  Targeted  genes include those
necessary for the bacteria's survival, reproduction and/or for the expression of
various toxins. Animal studies using these compounds have demonstrated cytotoxic
activity against  bacterial  species  including  Escherichia  coli,  methicillin
resistant and vancomycin resistant Staphylococcus aureus.

The  Company  has also  developed a novel  cell-free  large scale DNA  synthesis
technique   (synDNA(TM))  for  producing  therapeutic  DNA  which  bypasses  the
bacteria-based  fermentation process. The cell-free synthesis of DNA has various
advantages:  CytoGenix's DNA is virtually free of bacterial endotoxins,  as well
as bacterial DNA, RNA and proteins  which must be removed from DNA  manufactured
using traditional fermentation process using live bacteria.  CytoGenix's process
does not require  the use of  antibiotic  markers  and does not require  genetic
sequences  comprising  the usual  backbone of plasmid  DNA.  Elimination  of the
plasmid backbone enables  production of DNA constructs that are  approximately 3
kilobase pairs smaller than the equivalent  plasmid DNA. More  importantly,  the
synDNA(TM)  technology can produce therapeutic DNA's more rapidly and with fewer
complications than in the traditional fermentation methods.

Using its expanding  technological base, the Company is seeking to develop drugs
and vaccines that address  significant and unmet medical needs.  The Company has
conducted research and/or preclinical development with product candidates in the
following  areas:   infectious   disease   (anti-virals  and   anti-bacterials),
inflammation, cancer and vaccines.

PRODUCTS UNDER DEVELOPMENT:

INFECTIOUS DISEASE PROGRAM

ANTI-VIRAL:  Our herpes  therapeutic,  SIMPLIVIR(TM),  is an anti-herpes topical
compound  which  will  potentially  address  the  needs of 70  million  infected
Americans.  Today's marginally  effective products have revenues in excess of $1
billion.  The most  likely  methods of use  include  prophylactic  and  neonatal
applications.  The Company's  proprietary  plasmid DNA sequences are believed to
turn-off the  expression  of the HSV ICP4 and ICP47 genes.  Found in HSV-1,  -2,
Herpes Zoster,  and other viruses in that family,  the ICP4 gene is critical for
the replication of the virus in the host cell. The ICP47 gene produces a protein
that assists the virus in interfering with a host's immune system in recognizing
the virus and  eliminating  it.  Pre-clinical,  in vitro  studies  have  shown a
100-fold  reduction  in HSV viral load in test cells  containing  the  Company's
proprietary plasmid DNA coded with an ICP4 knockdown sequence.
 Mouse trials have been  conducted and  additional  studies with cotton rats are
planned.  Pre-clinical  toxicology,  absorption,  distribution,  metabolism  and
excretion  (ADME)  studies are being  designed and the Company  plans to file an
Investigational  New Drug (IND) application with the Food & Drug  Administration
(FDA) at such time as it has the funds to do so.

ANTI-MICROBIALS:  Using its proprietary technique (Oligogenix(TM)),  the Company
has developed and tested compounds against methicillin and vancomycin  resistant
Staphylococcus  aureus (MRSA and VRSA).  Additional studies to determine dosages
and  minimum  inhibitory   concentrations  are  planned.   These  anti-bacterial
compounds also require ADME studies.


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<PAGE>

DNA  VACCINES:  Using the  synDNA(TM)  process,  the Company is  developing  DNA
vaccines for use in humans and animals.

     HUMAN VACCINES:
     DNA  vaccines  against  both  seasonal  influenza  as  well  as the  highly
     pathogenic and potentially  pandemic humanized avian influenza virus (H5N1)
     are  being  developed  and  tested  in animal  models  (mice and  ferrets).
     Together with ADME and toxicology studies,  additional pre-clinical studies
     have been planned in order to analyze the immune response triggered as well
     as optimize the immunization regimen.

     ANIMAL VACCINES:
     Poultry:   Utilizing  the  knowledge  and  experience   gathered  from  the
     development of DNA vaccines against human influenza,  studies on developing
     vaccines  for use in  poultry  against  avian  flu are  under  development.
     Potential  collaborators  in both academic and industry  settings are being
     approached.

     Aquaculture: In other extramural collaborations,  the Company is developing
     DNA vaccines for use in fish.  Focus has been given to fish species of high
     economic impact such grouper,  salmon and Cobia. The Company has identified
     target viral diseases and it is determining the optimal course of action to
     generate and test various DNA constructs.

     Cattle:  Finally,  in  collaboration  with the United States  Department of
     Agriculture,  the  Company is engaged in a project to develop a  synDNA(TM)
     based  vaccine  against  brucellosis,  a zoonotic  disease  which is easily
     transmitted   from  animals  to  humans  and  is   consequently  of  global
     importance.  Tests using  various DNA vaccines  developed by the Company as
     well as various  combinatory  formulas have been  completed in a laboratory
     animal  model.  Ongoing  analysis  of  the  data  gathered  should  provide
     information as to the next course of action to be taken.

synDNA(TM) PROCESS

As briefly  noted above,  the Company has developed a novel method for producing
large amounts of high quality  therapeutic DNA  (synDNA(TM))  with reductions in
residual   contaminants   compared   to   traditional    fermentation   methods.
Specifically, the Company has identified and developed a method for in vitro DNA
synthesis  and   amplification   for  the   production  of  good   manufacturing
practice-grade (GMP) drug substances.

Cell-free  amplification of DNA sequences has many important  benefits beginning
with the size and  composition of the therapeutic  compound.  Under this system,
there is no need for bacterial  replication  genes or selection  markers such as
antibiotic  resistant  genes found on most bacterial  plasmid  vectors.  In most
cases,  this will reduce the size and weight of the  therapeutic DNA by at least
3,000 base  pairs or a  molecular  weight of  approximately  2,000 kilo  Daltons
(kDa). The Dalton is a measure of molecular weight or mass. Molecular weight has
long been recognized as a significant  factor in the uptake of DNA by cells with
smaller  being more  preferred.  The total  absence of bacteria and growth media
assures  that there is no need to employ  mechanical  or  chemical  purification
methods  to extract  cell or animal  proteins,  RNA,  genomic  DNA and  backbone
molecules.  This  feature  allows  the  designer  more  control  of  coding  for
non-specific and specific immune responses.

Robust biological activity.

The  Company's  experiments  have shown  that the  biological  response  to this
material  (devoid  of vector  backbone)  is  similar  to  traditional  plasmids.
Experiments  conducted  in several  animal  models  have  shown that  linear DNA
prepared  with the CytoGenix  synDNA(TM)  process  triggers a robust  biological
response  (immune or  physiological,  depending on the  application)  in treated
groups similar to plasmid DNA -treated animals.



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<PAGE>

Low risk, competitive cost, universal accessibility and fast cycle time.

The entire process is bench-scale and requires little equipment,  space or human
intervention in comparison to bacterial fermentation  manufacturing  facilities.
This process easily lends itself to  liquid-handling  automation,  and a skilled
technician can synthesize  multi-gram  quantities of this material  within a few
weeks, while working in a compact room-size  facility.  Unlike PCR, this process
requires only basic  laboratory  equipment  and is therefore  accessible to many
facilities around the world, especially field facilities in rural settings where
access to specialized equipment is limited and often prohibitive.

Improved regulatory profile.

The  benefits  of  using  this  cell-free  DNA   manufacturing   technology  are
significant from a regulatory agency review and compliance perspective.  Product
cGMP manufacturing procedures detailing methods for cell collection,  processing
and cell culture  conditions are no longer  necessary and therefore  reduces the
level of risk,  amount of  documentation,  amount of required  space, as well as
QA/QC and compliance costs.

CytoGenix is carrying out a multi-pronged  strategy to continue  commercializing
this technology. The following summarizes the Company's activities and plans:

     o    PROCESS   OPTIMIZATION   AND  SCALE-UP:   The  Company  has  conducted
          experimentation to achieve yield optimization,  efficiency and reduced
          costs.  The process  has  progressed  from  manufacture  of  milligram
          quantities to producing gram quantities consistently.  The Company has
          conducted animal studies comparing  synDNA(TM)  compounds with various
          plasmids  to  verify  that  the  synDNA(TM)   based   compounds  exert
          bioactivity equal to or greater than plasmids produced via traditional
          methods.  These studies have  analyzed  various  Company  produced DNA
          vaccines and compounds for expressing specific proteins.

     o    DEVELOP  REAGENT  SUPPLIERS AND SOURCING:  The Company entered into an
          Agreement with General  Electric  Healthcare  Bio-Science  Corporation
          ("GEHBC") to provide  necessary  enzymes and reagents for  large-scale
          production  of  DNA  using  the  synDNA(TM)  process  for  therapeutic
          applications.  GEHBC is the Company's  largest supplier of enzymes and
          reagents,  however  other  sources  are  available  for the  Company's
          research purposes.

     o    BUSINESS DEVELOPMENT,  the Company is currently evaluating options for
          industry   partnership  for  continued   development  of  the  process
          including contract manufacturing.

The Company is currently supporting a Sponsored Research Agreements (SRA):

         Dr.  Slobodan  Paessler at the  University of Texas  Medical  Branch at
Galveston has conducted  animal trials to test  CytoGenix's  synDNA(TM)  vaccine
against avian flu (H5N1).  Several challenge rounds have been conducted exposing
vaccinated  mice  to  lethal  doses  of the  Vietnam  strain  of  avian  flu.  A
significant  majority of vaccinated  mice survived the exposure.  All animals in
the control  groups  died.  These  experiments  were  continued  with the use of
ferrets as a second  animal  model.  The  collaboration  with Dr.  Paessler will
extended to the  development of DNA vaccines with  veterinary  applications,  at
such time as the Company has the funds to do so.



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<PAGE>

PUBLICATIONS

The Company and its cooperating university scientists have published a number of
scientific  papers and  presented at  scientific  meetings.  These  publications
include:

     1.   Kendirgi,  F., Nadezda E. Yun, N.E, Linde,  N.S.,  Zacks,  M.A, Smith,
          J.N.,  Smith,  J.K.,  McMicken,  H., Chen,  Y.*, & Paessler,  S. Novel
          linear DNA vaccines induce  protective immune responses against lethal
          infection with influenza virus type A/H5N1 (under review).
     2.   Benimetskaya, L., Ayyanar, K. Kornblum, N., Castanotto, D., Rossi, J.,
          Wu, S., Lai, J., Brown,  B., Popova,  N., Miller,  P.,  McMicken,  H.,
          Chen, Y. & Stein, C. Bcl-2 protein in 518A2 melanoma cells in vivo and
          in vitro. Clinical Cancer Research, 12:4940-4948, 2006.
     3.   Xing-Xin Tan & Yin Chen,  Discovery of Novel  Antibiotics By screening
          of  an  Oligodeoxynucleotide   Expression  Library,   (invited  review
          article,  submitted) "New Research on Antisense Elements  (Genetics)."
          Frank Columbus, Editor-in-Chief, Nova Science Publishers, Inc.
     4.   Tan, X. & Chen,  Y., A novel  genomic  approach  identifies  bacterial
          DNA-dependent  RNA  polymerase  as  the  target  of  an  antibacterial
          oligodeoxynucleotide, RBL-1 Biochemistry, 44:6708-6714, 2005.
     5.   Tan,  X.,  Actor,  J.K.,  & Chen,  Y.,  PNA  antisense  oligomer  as a
          therapeutic strategy against bacterial  infection:  proof of principle
          using mouse peritonitis model,  Antimicrobial  Agent and Chemotherapy,
          49: 3203-3207, 2005.
     6.   Tan, X., & Chen, Y., Discovery of novel  antibiotics  using cell-based
          screening (Review), Current Drug Discovery, pp. 21-23, April, 2004.
     7.   Tan, X., Knesha,  R., Margolin,  W. and Chen, Y., DNA enzyme generated
          by a novel  single-stranded  DNA expression vector inhibits expression
          of the essential  bacterial  cell  division  gene ftsZ,  Biochemistry,
          43:1111-1117, 2004.
     8.   McMicken,  H., Bates, P. and Chen, Y.,  Antiproliferative  activity of
          G-quartet-containing    oligonucleotides    generated   by   a   novel
          single-stranded   DNA   expression   system,   Cancer  Gene   Therapy,
          10(12):867-869, 2003.
     9.   Chen, Y. and McMicken, H., Intracellular production of DNA enzyme by a
          novel   single-stranded   DNA   expression   vector,   Gene   Therapy,
          10:1776-1780, 2003.
     10.  Chen, Y., Ji, Y. and Conrad, C., Expression of single-stranded  DNA in
          mammalian cells, Biotechniques, 34:167-171, 2003.
     11.  Chen,  Y.,  Novel   Technologies   for  target   validation,   Genetic
          Engineering News, 23(11):7-9, 2003.
     12.  Chen,  Y.,  A novel  single-stranded  DNA  (ssDNA)  expression  vector
          (Review), Expert Opinion on Biological Therapy, 2:735-740, 2002.
     13.  Chen, Y., Meeting  highlights,  10th International  conference on gene
          therapy of cancer,  Expert Opinion on Biological  Therapy,  2:443-445,
          2002.
     14.  Chen, Y., Growth of oligo-based drugs, Genomics & Proteomics, October,
          2002.
     15.  Datta, H. and Glazer, P., Intracellular  generation of single-stranded
          DNA for  chromosomal  triplex  formation  and  induced  recombination,
          Nucleic Acid  Research,  29:5140-5147,  2001. A marvel of  biochemical
          engineering  means cells can produce DNA enzyme to attach cancer,  New
          Scientist, January, 2001.
     16.  Chen,  Y., Ji, Y.,  Roxby,  R. and Conrad,  C., In vivo  expression of
          single-stranded  DNA in  mammalian  cells  with DNA  enzyme  sequences
          targeted  to  c-raf,   Antisense  &  Nucleic  Acid  Drug  Development,
          10:415-422, 2000.


                                       9
<PAGE>

BUSINESS STRATEGY

The goal and the focus of the Company are to leverage its proprietary technology
to  maximize  shareholder  value.  The  Company  is  developing  anti-viral  and
anti-bacterial products based on its proprietary technologies including: topical
compounds for herpes infections, DNA vaccines, and compounds against methicillin
and vancomycin  resistant  bacteria.  Upon  initiation of clinical  trials,  the
Company  intends to seek license and  distribution  agreements with domestic and
foreign pharmaceutical companies. To this end:

     o    The  Company  will  pursue   partnerships   with   pharmaceutical   or
          biotechnology companies to develop DNA expression-based therapeutics.

     o    The Company will seek to maintain and expand its patent  portfolio and
          proprietary  technology.   The  Company  aggressively  pursues  patent
          protection to maintain  worldwide  rights relating to the development,
          manufacture and sale of oligodeoxynucleotide mediated therapeutics and
          services and products  related to the  manufacture  of synDNA(TM)  and
          ssDNA.

     o    The Company intends to leverage its oligonucleotide  expertise through
          licensing,  process development and pilot  manufacturing.  The Company
          believes  that it has  established  one of the  leading  nucleic  acid
          chemistry  groups  that  can  provide  medicinal  chemistry,   process
          development and manufacturing to others in need of this expertise. The
          Company  believes that it will be able to capitalize on its continuing
          investment in oligonucleotide  and nucleic acid technology by entering
          into   licensing,   process   development   and  pilot   manufacturing
          arrangements with collaborators to generate revenues,  while retaining
          this capability for its own drug development.

     o    The Company plans to expand its customer base of non-competitors o for
          uses of  synDNA(TM)  as it advances  the ability to amplify and purify
          diverse sequences.  The sales will come from excess capacity above the
          material  the  Company  needs  for its own  product  development.  The
          Company  will seek  strategic  partners to expand the  production  and
          distribution of synDNA(TM) based products.

MARKETING STRATEGY

The Company plans to market initial products,  when developed,  and for which it
will  obtain  regulatory  approval,  through  marketing  arrangements  or  other
licensing  arrangements with  pharmaceutical  companies.  Implementation of this
strategy  will depend on many  factors,  including  the market  potential of any
products the Company develops,  and its financial resources.  To market products
that will serve a large, geographically diverse patient population, we expect to
enter into licensing, distribution, or partnering agreements with pharmaceutical
companies that have large,  established sales  organizations.  The timing of the
Company's entry into marketing arrangements or other licensing arrangements with
large pharmaceutical companies will depend on successful product development and
regulatory approval within the regulatory  framework  established by the Federal
Food,  Drug and Cosmetics Act, as amended,  and  regulations  promulgated  there
under. Although the implementation of initial aspects of the Company's marketing
strategy may be undertaken before this process is completed, the development and
approval  process  typically  is not  completed in less than three to five years
after the filing of an  Investigational  New Drug  ("IND")  application  and its
marketing strategy therefore may not be implemented for several years. See "Drug
Approval Process and Other Governmental Regulation" below.

INTELLECTUAL PROPERTY RIGHTS

The  Company has  developed  or acquired a  comprehensive  body of  intellectual
rights. The proprietary nature of, and protection for, the Company's technology,
processes  and know-how  are  important to its  business.  The Company  plans to
prosecute and aggressively  defend its patents and proprietary  technology.  Our
policy  is  to  seek  patent  protection  for  technologies,   inventions,   and
improvements  that are considered  important to the development of our business.
The  Company  also  depends  upon  trade  secrets,   know-how,   and  continuing
technological innovation to develop and maintain its competitive position.


                                       10
<PAGE>

CytoGenix  currently  holds 13 granted and 2 allowances  with  approximately  55
additional  foreign or US  pending  patent  applications  claiming  methods  and
materials in connection with these platform technologies. The Company intends to
protect its proprietary technology with additional filings as appropriate.

DRUG APPROVAL PROCESS AND OTHER GOVERNMENT REGULATION

The system of reviewing and  approving  drugs in the United States is considered
the most rigorous in the world. Estimates of the upper range of costs to bring a
single product from research  through  market  approval and launch into commerce
range from $800 million (Pharmaceutical Research and Manufacturers  Association)
to $1.7 billion in 2000  through 2002 (FDA),  with the timing to do so typically
ranging between 10 and 15 years. The  Pharmaceutical  Research and Manufacturers
Association  estimates that of every 5,000 medicines  tested,  on average,  only
five are tested in clinical trials,  and only one of those is approved for human
use.  These  estimates  may vary  depending  on the  nature  of the drug and the
mechanism by which it works.

DRUG DISCOVERY

The drug  discovery  process can take several  years.  Once a company  locates a
screening lead, or starting point for drug development, isolation and structural
determination  may begin. The development  process results in numerous  chemical
modifications  to  the  screening  lead  in  an  attempt  to  improve  its  drug
properties.  After a compound emerges from the above process, the next steps are
to conduct further  preliminary  studies on the mechanism of action,  further in
vitro (test tube) screening  against  particular  disease targets and,  finally,
some in vivo (animal) screening. If the compound passes these hurdles, the toxic
effects  of the  compound,  if  any,  are  analyzed  by  performing  preliminary
exploratory animal toxicology. If the results are positive, the compound emerges
from the basic research mode and moves into the pre-clinical phase.

Preclinical Testing

During  the  pre-clinical  testing  stage,  laboratory  and animal  studies  are
conducted  to show  biological  activity of the  compound  against the  targeted
disease,  and the compound is evaluated for safety,  stability,  biodistribution
(where  the drug goes in the body) and  genomic  integration  (where  the DNA is
incorporated in any of the body's cell's genome).

Investigational New Drug Application

During the pre-clinical testing, an Investigational New Drug Application ("IND")
is filed with the FDA to seek permission to begin human testing of the drug. The
IND  becomes  active if not  rejected  by the FDA  within 30 days.  The IND must
indicate the results of previous experiments, how, where and by whom the studies
were conducted,  the chemical structure of the compound,  the method by which it
is believed to work in the human body,  any toxic effects of the compound  found
in the animal  studies and how the compound is  manufactured.  Progress  reports
detailing the results of the clinical trials must be submitted at least annually
to the FDA.

Phase I Clinical Trials

After an IND becomes  active,  Phase I human  clinical  trials may begin.  These
tests,  involving  usually  between 20 and 80  patients  or healthy  volunteers,
typically take  approximately one year to complete and cost between $300,000 and
$500,000 per trial.  The primary goal of Phase I clinical studies are focused on
safety.  The Phase I clinical  studies  also  determine  how a drug is absorbed,
distributed,  metabolized  and  excreted  by the body,  and the  duration of its
action.  Phase I  trials  are not  normally  conducted  for  anticancer  product
candidates.  A Phase Ib study involves patients with the targeted disease cancer
and is focused on safety.


                                       11
<PAGE>

Phase II Clinical Trials

In Phase II Clinical trials,  controlled  studies are conducted on approximately
100 to 300 volunteer patients with the targeted disease. The preliminary purpose
of these tests is to evaluate  the  effectiveness  of the drug on the  volunteer
patients as well as to determine if there are any side  effects.  These  studies
generally take  approximately two years and cost between $500,000 and $4 million
per trial. In addition, Phase I/ II clinical trials may be conducted to evaluate
not  only  the  efficacy  of the drug on the  patient  population,  but also its
safety.


Phase III Clinical Trials

This phase  typically lasts about three years,  usually  involves 1,000 to 3,000
patients  and costs  between $5 million and $50  million  per trial.  During the
Phase III clinical trials, physicians monitor the patients to determine efficacy
and to observe and report any  reactions  that may result from  long-term use of
the drug.

New Drug Application

After the completion of the requisite  three phases of clinical  trials,  if the
data indicate that the drug has an acceptable  benefit to risk assessment and it
is found to be safe and effective,  a New Drug Application ("NDA") is filed with
the FDA. The  requirements  for  submitting an NDA are defined by the FDA. These
applications are comprehensive,  including all information  obtained  throughout
all clinical  trials as well as all data  pertaining  to the  manufacturing  and
testing of the product. In general,  these filings can far exceed 100,000 pages.
With the  implementation of the Prescription Drug Users Fee Act (PDUFA),  review
fees are  provided at the time of NDA filing.  In 2007,  each NDA with  clinical
data must be  accompanied  by an $896,200  review fee. If the NDA is assessed as
unacceptable in the initial 30 day review, it is returned to the submitter, with
50% of the fee. The historical  average  review time for a New Molecular  Entity
(NME) has remained constant at approximately 16 months,  however,  a new NME can
be approved in as little as six months.

Marketing Approval

If the FDA  approves  the NDA,  the drug becomes  available  for  physicians  to
prescribe. Periodic reports must be submitted to the FDA, including descriptions
of any adverse reactions reported. The FDA may request additional studies (Phase
IV) to evaluate long-term effects.

Phase IV Clinical Trials and Post Marketing Studies

In addition to studies  requested  by the FDA after  approval,  these trials and
studies are  conducted to explore new  indications.  The purpose of these trials
and studies and related  publications  is to broaden the  application and use of
the drug and its acceptance in the medical community.

COMPETITION

The  pharmaceutical  and biotechnology  industries are highly  competitive.  The
Company faces competition from biotechnology and pharmaceutical  companies using
more   traditional   approaches  to  treating  human  diseases.   The  Company's
competitors  may  develop  safer,  more  effective  or  less  costly  gene-based
therapeutics.  In  addition,  the  Company  faces  and  will  continue  to  face
competition   from   other   companies   for   corporate   collaborations   with
pharmaceutical and biotechnology companies, for establishing  relationships with
academic and research  institutions and for licenses to proprietary  technology,
including intellectual property.


                                       12
<PAGE>

Many of the Company's  competitors and potential  competitors have substantially
greater   product   development   capabilities   and   financial,    scientific,
manufacturing,  managerial and human resources than the Company. There can be no
assurance that research and  development by others will not render the Company's
products,  or the products  developed by corporate  partners  using its licensed
technologies  obsolete,  or non-competitive,  or that any product the Company or
its  corporate  partners  develop  will be  preferred  to any  existing or newly
developed  technologies.  In  addition,  there  can  be no  assurance  that  the
Company's competitors will not develop safer, more effective or less costly gene
delivery systems,  gene therapeutics,  non-gene  therapies,  or other therapies,
achieve  superior  patent  protection or obtain  regulatory  approval of product
commercialization  earlier than the Company,  any of which could have a material
adverse effect on its business, financial condition or results of operations.

RESEARCH AND DEVELOPMENT

The  Company  expensed  $770,143  and  $2,106,746  on research  and  development
activities  during the years ended  December  31,  2008 and 2007,  respectively.
Research and development (R&D) expenses include related salaries and other share
based compensation, contractor fees, materials, and utilities.

R&D expenses also consist of  independent  R&D costs and costs  associated  with
collaborative   development  arrangements  with  other  companies  and  research
institutions. Research and development costs are expensed as incurred.

EMPLOYEES

As of December 31, 2008,  the Company has 3 employees,  2 of whom hold  advanced
degrees.  The Vice  President  -Legal  Affairs,  who holds an  advanced  degree,
resigned  in  March  2009.  None  of the  Company's  employees  are  covered  by
collective bargaining  agreements,  and the Company considers relations with its
employees to be good.

HOW YOU CAN FIND ADDITIONAL INFORMATION

The  Company is a  reporting  company and files  annual,  quarterly  and current
reports,  proxy  statements  and other  information  with the SEC.  For  further
information  with  respect to the  Company,  you may read and copy its  reports,
proxy statements and other information, at the SEC public reference rooms at 100
F.  Street,  N.E.,  Washington,  D.C.  20549,  as well as at the SEC's  regional
offices at 500 West Madison  Street,  Suite 1400,  Chicago,  IL 60661 and at 233
Broadway,  New York,  NY 10279.  You can request  copies of these  documents  by
writing to the SEC and paying a fee for the copying cost. Please call the SEC at
1-800-SEC-0330  for more information about the operation of the public reference
rooms.  The  Company's  SEC filings are also  available at the SEC's web site at
http://www.sec.gov. In addition, you can read and copy the Company's SEC filings
at the office of the National Association of Securities Dealers,  Inc. at 1735 K
Street, N.W., Washington, D.C. 2006.

Copies of  CytoGenix's  Annual  Reports on Form 10K,  Quarterly  Reports on Form
10-Q,  Current  Reports on Form 8-K, and  amendments  to those  reports filed or
furnished  pursuant to Section 13(a) or 15(d) of the Securities  Exchange Act of
1934 are all  available  on its  website  (www.cytogenix.com)  or by  sending  a
request for a paper copy to: CytoGenix,  Inc. 3100 Wilcrest, Suite 140, Houston,
TX
 77042, attn. Investor Relations.

ITEM 1A. RISK FACTORS

Item 1A is not required for a smaller reporting company.


ITEM 1B. UNRESOLVED STAFF COMMENTS

None


                                       13
<PAGE>

ITEM 2. DESCRIPTION OF PROPERTY

The Company's  corporate  executive offices are located at 3100 Wilcrest,  Suite
140, Houston,  Texas 77042. The Company has occupied  approximately  6000 square
feet of executive  office and laboratory space since December 2003. The facility
is in reasonable condition and is adequate for the Company's current operations.
Rent on the  facility  averages  to be $5,622 per month with a lease term ending
December 2009.  The Company  believes it's current and contracted for facilities
are suitable and adequate  for its present and  immediately  foreseeable  future
operational requirements.

ITEM 3. LEGAL PROCEEDINGS

EMPLOYMENT ACTIONS

In  November  of 2006,  the  former  Chief  Financial  Officer  (CFO),  Lawrence
Wunderlich,  and the former  Chief  Operations  Officer  (COO),  Frank  Vazquez,
resigned from the Company.  The Company and former officers pursued  arbitration
to resolve  claims by Messrs Vazquez and  Wunderlich  and  counterclaims  by the
Company.

On June 30, 2008, CytoGenix, Inc. (the "Company"), Lawrence Wunderlich and Frank
Vazquez entered into a Settlement  Agreement and Mutual Release (the "Settlement
Agreement")  regarding arbitration No. 70 144 08333 06, styled Frank Vazquez and
Lawrence  Wunderlich  v.  CytoGenix,   Inc.,  before  the  American  Arbitration
Association in Houston,  Texas, (the "Arbitration").  Pursuant to the Settlement
Agreement, all claims of Messrs. Vazquez and Wunderlich against the Company, and
all claims of the Company  against each of Messrs.  Vazquez and Wunderlich  have
been  released,  acquitted  and forever  discharged.  The  Settlement  Agreement
obligates the Company it issue to (i) Mr. Wunderlich  warrants to acquire, on or
before June 30, 2011, 1,066,666 shares, 1,066,667 shares and 1,066,667 shares of
the  Company's  common  stock at  exercise  prices  of $0.05,  $0.10 and  $0.15,
respectively,  and (ii) Mr. Vazquez  warrants to acquire,  on or before June 30,
2011, 666,666 shares,  666,667 shares and 666,667 shares of the Company's common
stock at  exercise  prices of $0.05,  $0.10 and $0.15,  respectively.  Under the
Settlement  Agreement  the Company is also  obligated  to pay  $150,000  each to
Messrs.  Vazquez and Wunderlich in equal monthly  installments ($3,125 per month
to each) over a  four-year  period  commencing  October  1, 2008.  Copies of the
Settlement Agreement and a form of warrant were attached to a Form 8-K filing on
July 7, 2008 and are incorporated herein by reference. The foregoing description
of the terms and  provisions  thereof is a summary only, and is qualified in its
entirety by reference to the Settlement Agreement.

In a letter  from the  Department  of Labor -  Occupational  Safety  and  Health
Administration  ("OSHA") dated June 30, 2008  addressed to Lawrence  Wunderlich,
Mr. Wunderlich was informed that OSHA approved the Settlement  Agreement and was
"closing  the  investigation  of the . . .  complaint"  previously  filed by Mr.
Wunderlich  with OSHA under  Section 806 of the  Corporate  and  Criminal  Fraud
Accountability  Act,  Title VIII of the  Sarbanes-Oxley  Act of 2002,  18 U.S.C.
Section 1514A.  OSHA provided the Company a copy of this letter and it was filed
as an exhibit to the Form 8-K filed on July 7, 2008 and is  incorporated  herein
by reference.

Four former employees have filed complaints with the Texas Workforce  Commission
for unpaid wages totaling approximately $175,147, which the Company has included
as part of its accrued  compensation  liability on the December 31, 2008 balance
sheet.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no  matters  submitted  to a vote of  securities  holders  during the
fourth quarter of our fiscal year ended December 31, 2008.


                                       14
<PAGE>

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Authorized  capital stock  consists of 300,000,000  shares of common stock,  par
value $0.001 per share,  and  50,000,000  shares of preferred  stock,  par value
$0.001 per share. There were 156,071,257 shares of common stock and no shares of
preferred stock  outstanding as of March 31, 2009. The Company's common stock is
traded on the NASDAQ, OTC Bulletin Board under the ticker symbol CYGX.OB.

The high and low bid  prices for the  Company's  common  stock for each  quarter
within the last two fiscal years, as quoted by the OTC Bulletin  Board,  were as
follows.  The quotations reflect  inter-dealer  prices,  without retail mark-up,
mark-down or commission and may not represent actual transactions.

                                         High               Low
                                         ----               ---
Fiscal Year Ending December 31, 2007

Quarter 1                                $0.66             $0.37
Quarter 2                                $0.56             $0.30
Quarter 3                                $0.40             $0.23
Quarter 4                                $0.35             $0.11

Fiscal Year Ending December 31, 2008

Quarter 1                                $0.07             $0.06
Quarter 2                                $0.05             $0.05
Quarter 3                                $0.07             $0.06
Quarter 4                                $0.02             $0.02

STOCKHOLDERS

As of March 31,  2009 there were  approximately  644  shareholders  of record of
Common Stock, one of which is Cede & Co., a nominee for Depository Trust Company
(or DTC). All of the shares of Common Stock held by brokerage firms,  banks, and
other  financial  institutions  as nominees for beneficial  owners are deposited
into  participant  accounts at DTC, and are  considered  to be held of record by
Cede & Co. as one  shareholder.  The Company has not paid any  dividends  on its
Common  Stock and the Board  does not  intend to declare  any  dividends  in the
foreseeable future.

CHANGES IN SECURITIES

All of the Company's securities sold during 2008 have been reported in this 10-K
or previously reported on its Form 10-Qs and Form 8-Ks filed with the Securities
and Exchange Commission.

During the year ended December 31, 2008, the Company issued 9,761,538 restricted
shares of its common stock for cash,  services  rendered and conversion of notes
Payable as follows;

     o    156,000 shares previously issued for services were surrendered.
     o    3,115,834 shares for $201,000 cash.
     o    249,999  shares  with a value of  $40,000  for  services  rendered  to
          outside to outside  consultants (83,333 shares were issued each to TMS
          Investments, Inc., Harris Forbes, Inc., and Chasseur Corporation).
     o    750,000  shares to BioXcel  Corporation  with a value of  $45,000  for
          Services rendered.
     o    5,801.705  shares for the  conversion  of a note  payable  and accrued
          interest totaling $348,102.


                                       15
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

Item 6 is not required for a smaller reporting company.


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
        OF OPERATIONS

FORWARD-LOOKING INFORMATION

This report contains  forward-looking  statements regarding the Company's plans,
expectations, estimates and beliefs. Actual results could differ materially from
those   discussed   in,  or  implied  by,  these   forward-looking   statements.
Forward-looking   statements   are   identified  by  words  such  as  "believe,"
"anticipate,"  "expect,"  "intend,"  "plan,"  "will,"  "may," and other  similar
expressions. In addition, any statements that refer to expectations, projections
or other characterizations of future events or circumstances are forward-looking
statements.  The Company has based these  forward-looking  statements largely on
its expectations. Forward-looking statements in this report include, but are not
necessarily limited to, those relating to the Company's:

     o    intention to introduce new products,
     o    receipt  of any  required  FDA or other  regulatory  approval  for its
          products,
     o    expectations about the markets for its products,
     o    acceptance of its products, when introduced, in the marketplace,
     o    future capital needs, and
     o    success of its patent applications.

Forward-looking  statements are subject to risks and  uncertainties,  certain of
which are beyond the Company's  control.  Actual results could differ materially
from  those  anticipated  as a result  of the  factors  described  in the  "Risk
Factors" and detailed in the Company's other Securities and Exchange  Commission
filings, including among others:

     o    the effect of regulation by the FDA and other governmental agencies,
     o    delays in obtaining,  or its inability to obtain,  approval by the FDA
          or other regulatory authorities for its products,
     o    research and development efforts,  including delays in developing,  or
          the failure to develop, its products,
     o    the  development  of  competing  or more  effective  products by other
          parties,
     o    the results of pre-clinical and clinical testing,
     o    uncertainty of market of acceptance of its products,
     o    problems   that  it  may  face  in   manufacturing,   marketing,   and
          distributing its products,
     o    inability to raise additional capital when needed,
     o    delays in the  issuance  of, or the  failure  to obtain,  patents  for
          certain of its products and technologies, and
     o    problems with important suppliers and business partners.

Because  of these  risks  and  uncertainties,  the  forward-looking  events  and
circumstances  discussed in this report or  incorporated  by reference might not
transpire.  Factors that cause actual results or conditions to differ from those
anticipated  by these and other  forward-looking  statements  include those more
fully described in the "Risk Factors" section and elsewhere in this report.

OVERVIEW

From its inception in 1995,  the Company has devoted its resources  primarily to
fund its research and  development  efforts.  The Company has been  unprofitable
since  inception  and, other than limited  interest and grant  revenue,  has had
minimal  revenues  from the sale of  products  and other  sources.  The  Company
expects to continue to incur losses for the  foreseeable  future as it continues
to  expand  its  research   and   development   efforts  and  enter   additional
collaborative  efforts.  As of December  31,  2008,  the  Company's  accumulated
deficit was $41,114,663.


                                       16
<PAGE>

RESULTS OF OPERATIONS

Year Ended December 31, 2008 Compared to Year Ended December 31, 2007

For the year  ended  December  31,  2008,  the  Company  reported  a net loss of
$3,388,623,  or $0.02 per share,  and $52,348 of revenue as compared  with a net
loss of  $6,266,075,  or $0.04 per share,  and $66,043 of revenue for the twelve
months ended December 31, 2007.

Research and Development  Expenses.  Research and development expenses decreased
to $770,143 for the twelve months ended December 31, 2008 compared to $2,106,746
for the same period in 2007 primarily due to a decline of approximately $428,327
in compensation  in the research and  development  department for non-cash stock
option  compensation  expense,  a  $311,941  decrease  in payroll  for  research
employees  as the  number of these  employees  decreased  in 2008 and a $197,532
decrease in research and  development  consulting fees related to developing new
clients and construction of the abandoned new building.

General  and  Administrative  Expenses.   General  and  administrative  expenses
decreased to $2,400,741  for the twelve months ended  December 31, 2008 compared
to $2,531,807 for the same period in 2007. This decline was due primarily to the
following:  (1) an increase in personnel costs by  approximately  $156,745;  (2)
decrease of $401,489 in legal fees  primarily  due to the  settlement in 2008 of
the Company's ongoing arbitration with two of its former executive officers.

Consulting  Expenses.  Consulting  expenses  decreased to $96,398 for the twelve
months ended December 31, 2008 compared to $415,258 for the same period in 2007.
Approximately  $83,125 of this  increase  is  attributed  to the  services  of a
construction  management  firm to oversee  and manage  the  Company's  abandoned
construction project and $246,753 in financial consulting fees.

Depreciation and Amortization  Expense.  Depreciation and amortization  expenses
decreased to $61,548 for the twelve  months ended  December 31, 2008 compared to
$64,879 for the same period in 2007 primarily due to no new equipment  purchases
in 2008.

LIQUIDITY AND CAPITAL RESOURCES

The Company has financed its operations since inception primarily through equity
sales totaling approximately $18,201,000,  and from grants and contract research
funding of $200,000  from various  sources.  The Company  expects to continue to
incur losses as it expands its research and  development  activities and related
regulatory work and increases its collaborative  efforts.  For 2009, the Company
expects that its needs for operations, including its collaborative efforts to be
approximately $2 to $3 million.  The increase  compared to 2008  expenditures is
expected to result from additional production staff and expansion of preclinical
product development efforts.  However, if the total funds needed in 2009 are not
available,  the Company could reduce its expenditures  because the vast majority
of  its  costs  are  variable.  Those  estimated  expenditures  include  amounts
necessary to fulfill its obligations under various  collaborative,  research and
licensing agreements during 2009.

Because  of the  cost  (up to  $1.7  billion)  and  timeframe  (up to 15  years)
traditionally  associated  with  developing a potential  drug or  pharmaceutical
product to FDA  approval  for human sales is received,  the  Company's  business
strategy is to develop its products to initial Phase I or II clinical trials and
look for third  parties to fund  completion  of  development  of the product and
market the product through strategic  partnerships,  license agreements or other
relationships.  The  Company  also  looks for  collaborative  and other  efforts
utilizing its technology to increase  shareholder  value. The Company  currently
uses this  strategy  to limit the  potential  cost the  Company  would  incur in
developing a product.  The Company's  expected costs under our various contracts
and for various drug development  products can be estimated for the next year or
two,  but not much beyond  that due to the  uncertainty  of  clinical  trial and
research results. Because of the various factors noted above and the expectation
that, until the Company  establishes  revenue sources,  the Company will license
to, or jointly develop its prospective  products with,  strategic partners,  the
Company  reviews,  at least annually,  each research program and clinical trial,
based on results and progress  during the prior year and estimates its needs for
that  program  or trial for the coming  year,  making  adjustments  based on the
progress of the program  during the year.  The  Company  does not set  long-term
development budgets or development schedules for bringing its products to market
or track its research costs on a product basis.


                                       17
<PAGE>

Cash and cash  equivalents  were  $5,475 at December  31,  2008,  compared  with
$162,042 at December 31,  2007.  The decrease of $156,567 was due to the cost of
operations  for the year  exceeding  the  sources  of  funds.  See  "Results  of
Operations" above.

To fund operations in 2009 and beyond the Company will need to raise  additional
capital.  The Company  will  continue to look for  opportunities  to finance its
ongoing  activities and operations  through accessing  corporate partners or the
equity markets,  as the Company  currently has no credit facility,  nor does the
Company currently intend to seek one.

CONTRACTUAL PAYMENT OBLIGATIONS -- Not Applicable

NEW ACCOUNTING PRONOUNCEMENTS

Effective  January 1, 2008,  the Company  adopted  SFAS No. 159,  The Fair Value
Option for Financial Assets and Financial Liabilities, Including an amendment of
SFAS No. 115 ("SFAS 159").  SFAS 159 permits companies to choose to measure many
financial  instruments  and  certain  other  items  at fair  value.  SFAS 159 is
effective  for  financial  statements  issued for fiscal years  beginning  after
November  15, 2007.  The adoption of SFAS 159 did not have a material  impact on
the Company's consolidated financial statements.

Effective  January  1,  2008,  the  Company  adopted  SFAS No.  157,  Fair Value
Measurements  ("SFAS 157"). In February 2008, the FASB issued Staff Position No.
157-2, Effective Date of FASB Statement No. 157 ("FSP 157-2"), which delayed the
effective  date of SFAS 157 for  certain  nonfinancial  assets and  liabilities,
including  fair value  measurements  under SFAS No. 141,  Business  Combinations
("SFAS 141") and SFAS 142, to fiscal years  beginning  after  November 15, 2008.
Therefore,  the Company has adopted the  provisions  of SFAS 157 with respect to
its  financial  assets  and  liabilities  only.  SFAS 157  defines  fair  value,
establishes  a  framework  for  measuring  fair  value  in  generally   accepted
accounting  principles,  and expands  disclosures about fair value measurements.
Fair  value is  defined  under  SFAS 157 as the  exchange  price  that  would be
received  for an asset or paid to  transfer a  liability  (an exit price) in the
principal or most  advantageous  market for the asset or liability in an orderly
transaction  between market  participants  on the  measurement  date.  Valuation
techniques  used to measure  fair value under SFAS 157 must  maximize the use of
observable  inputs and minimize  the use of  unobservable  inputs.  The standard
describes a fair value  hierarchy based on the following three levels of inputs,
of which the first two are considered observable and the last unobservable, that
may be used to measure fair value:

     o    Level 1 - Quoted  prices in active  markets  for  identical  assets or
          liabilities.
     o    Level 2 -  Inputs  other  than  Level 1 that  are  observable,  either
          directly or  indirectly,  such as quoted prices for similar  assets or
          liabilities;  quoted  prices in markets that are not active;  or other
          inputs that are observable or can be corroborated by observable market
          data for substantially the full term of the assets or liabilities.
     o    Level 3 -  Unobservable  inputs  that are  supported  by  little or no
          market  activity  and that are  significant  to the fair  value of the
          assets or liabilities.

As of December 31, 2008, the Company did not hold any assets or liabilities that
are required to be measured at fair value on a recurring  basis,  and  therefore
the adoption of the respective  provisions of SFAS 157 did not have an impact on
the Company's consolidated financial statements. On January 1, 2009, the Company
will implement the previously  deferred  provisions of SFAS 157 for nonfinancial
assets and liabilities recorded at fair value, as required.  Management does not
believe  that the  remaining  provisions  will  have a  material  effect  on the
Company's consolidated financial statements when they become effective.



                                       18
<PAGE>

In May 2008,  the FASB issued SFAS No. 162, The Hierarchy of Generally  Accepted
Accounting  Principles  ("SFAS  162").  The  statement  is  intended  to improve
financial  reporting  by  identifying  a  consistent   hierarchy  for  selecting
accounting  principles  to be used in preparing  financial  statements  that are
prepared in accordance with generally  accepted  accounting  principles.  Unlike
Statement on Auditing Standards ("SAS") No. 69, The Meaning of Present Fairly in
Conformity  With  GAAP,  SFAS 162 is  directed  to the  entity  rather  than the
auditor.  The statement was effective  November 15, 2008,  after approval by the
SEC which occurred in September  2008. The application of this statement did not
have a material impact on the Company's consolidated financial statements.

In April 2008, the FASB issued FASB Staff Position No. 142-3,  Determination  of
the Useful Life of Intangible Assets ("FSP 142-3"). FSP 142-3 requires companies
estimating  the useful life of a recognized  intangible  asset to consider their
historical  experience in renewing or extending similar  arrangements or, in the
absence  of  historical   experience,   to  consider   assumptions  that  market
participants  would use about  renewal or  extension  as adjusted for SFAS 142's
entity-specific  factors. FSP 142-3 is effective for financial statements issued
for fiscal years beginning  after December 15, 2008.  Adoption of this statement
is not  expected  to  have a  material  impact  on  the  Company's  consolidated
financial statements when it becomes effective.

In December 2007, FASB issued SFAS No. 141 (revised 2007), Business Combinations
("SFAS 141R"), which is a revision of SFAS 141. SFAS 141R establishes principles
and  requirements  for how an acquirer  recognizes and measures in its financial
statements the identifiable assets acquired,  the liabilities assumed and any no
controlling  interest in the  acquiree,  recognizes  and  measures  the goodwill
acquired in the  business  combination  or a gain from a bargain  purchase,  and
determines  what  information  to  disclose  to  enable  users of the  financial
statements  to  evaluate  the  nature  and  financial  effects  of the  business
combination.  The revised  statement  will  require,  among other  things,  that
transaction costs be expensed instead of recognized as purchase price. SFAS 141R
applies prospectively to business combinations for which the acquisition date is
on or after January 1, 2009.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The discussion and analysis of the Company's  financial condition and results of
operations are based upon its financial statements,  which have been prepared in
accordance with accounting  principles  generally accepted in the United States.
The preparation of these financial  statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities,  revenues and
expenses and related  disclosure of  contingent  assets and  liabilities.  On an
ongoing basis, the Company  evaluates its estimates,  including those related to
valuation  of  investments,  long-lived  assets,  and revenue  recognition.  The
Company  bases their  estimates on  historical  experience  and on various other
assumptions.  Actual  results may differ from these  estimates  under  different
assumptions  or  conditions.   The  Company  believes  the  following   critical
accounting   policies  and  the  related  judgments  and  estimates  affect  the
preparation of its financial statements.

Cash and Cash Equivalents

Cash and cash  equivalents  include  highly liquid,  temporary cash  investments
 having original maturity dates of three months or less. For reporting purposes,
 such  cash   equivalents  are  stated  at  cost  plus  accrued  interest  which
 approximates fair value.

Accounts Receivable

The  company's  accounts  receivable  primarily  consist  of trade  receivables.
Management  reviews  accounts  receivable on a monthly basis to determine if any
receivables will potentially be uncollectible. The company includes any accounts
receivable balances that are determined to be uncollectible in its allowance for
doubtful  accounts.  As of December 31, 2008 and 2007 the allowance for doubtful
accounts is zero.



                                       19
<PAGE>

Inventory

Inventory  includes raw materials  (liquid buffers and enzyme mix) that are used
to produce  enzymatically  synthesized DNA (synDNA(TM)).  Inventory is stated at
the lower of cost or market, cost being determined using the first-in, first out
("FIFO")  method.  Reserves are established for excess or obsolete  inventories.
Inventory is included in the cost of revenue when sold.

Property and Equipment

Property and equipment is recorded at cost and  depreciation  is computed  using
the straight-line method over the useful lives of the assets. Major renewals and
improvements are capitalized;  minor  replacements,  maintenance and repairs are
charged to current operations.

Impairment of Long-lived Assets

CytoGenix  performs  reviews for the  impairment of long-lived  assets  whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable.

Statement of Financial Accounting Standards ("SFAS") No. 144, Accounting for the
Impairment of or Disposal of Long-Lived  Assets,  sets forth guidance as to when
to  recognize  an  impairment  of  long-lived  assets  and how to  measure  such
impairment.  The standards  require  certain  assets be reviewed for  impairment
whenever  events  or  circumstances  indicate  the  carrying  amount  may not be
recoverable.

Revenue Recognition

CytoGenix's  revenues are primarily derived from selling  synDNA(TM).  CytoGenix
recognizes revenue when persuasive evidence of an arrangement  exists,  delivery
has  occurred,  the  sales  price is fixed or  determinable  and  collection  is
probable.

Research and Development

Research and Development  (R&D) expenses  include  salaries,  benefits and other
headcount  costs;   outside   services   required  to  conduct  the  preclinical
development;  contract and other  outside  service  fees;  employee  stock-based
compensation  expense;  and  facilities  and  overhead  expenses.  R&D costs are
expensed as incurred.

Income Taxes

The  Company  has adopted the  provisions  of SFAS 109,  "Accounting  for Income
Taxes," which requires  recognition of deferred tax  liabilities  and assets for
the expected  future tax  consequences  of events that have been included in the
consolidated  financial statements or tax returns.  Under this method,  deferred
tax  liabilities and assets are determined  based on the difference  between the
financial  statement and tax basis of assets and  liabilities  using enacted tax
rates in effect for the year in which the  differences  are expected to reverse.
The Company  provides a valuation  allowance  to reduce  deferred  tax assets to
their net realizable value.

Income (Loss) Per Common Share

SFAS 128,  "Earnings Per Share," requires  earnings per share to be computed and
reported  as both basic EPS and diluted  EPS.  Basic EPS is computed by dividing
net income by the weighted  average number of common shares  outstanding for the
period.  Diluted EPS is computed by dividing net income by the weighted  average
number of common shares and dilutive common stock equivalents (convertible notes
and interest on the notes,  stock awards and stock options)  outstanding  during
the period.  Dilutive EPS reflects the  potential  dilution  that could occur if
options to purchase  common  stock were  exercised  for shares of common  stock.
Basic and diluted EPS are the same as the effect of our  potential  common stock
equivalents would be anti-dilutive.



                                       20
<PAGE>

Stock-Based Compensation

The Company estimates the fair value of stock option awards on the date of grant
utilizing a modified  Black-Scholes  option  pricing  model.  The  Black-Scholes
option  valuation  model was developed  for use in estimating  the fair value of
short-term  traded  options  that  have no  vesting  restrictions  and are fully
transferable. However, certain assumptions used in the Black-Scholes model, such
as expected term, can be adjusted to incorporate the unique  characteristics  of
the Company's stock option awards.  Option valuation models require the input of
somewhat  subjective  assumptions  including expected stock price volatility and
expected term.  The Company  believes it is unlikely that  materially  different
estimates for the assumptions used in estimating the fair value of stock options
granted  would be made based on the  conditions  suggested by actual  historical
experience and other data available at the time estimates were made.  Restricted
stock  awards  are  valued at the price of our  common  stock on the date of the
grant.

Off-Balance Sheet Arrangements

The Company  currently has no off-balance sheet  arrangements,  except operating
lease commitments as disclosed in Note 13, Commitments and Contingencies.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Item 7A is not required for a smaller reporting company.




















                                       21
<PAGE>


ITEM 8. FINANCIAL STATEMENTS


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders
CytoGenix, Inc.:

 We have audited the accompanying balance sheet of CytoGenix, Inc. (the Company)
as of December 31, 2008 and the related statements of operations,  stockholders'
equity  (deficit)  and cash flows for the year ended  December 31,  2008.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audit. The financial statements of the Company as of December 31, 2007, were
audited by other  auditors,  whose  report  dated  April 4, 2008,  expressed  an
unqualified opinion on those statements.

Except as  discussed  in the  following  paragraph,  we  conducted  our audit in
accordance with the standards of the Public Company  Accounting  Oversight Board
(United States).  Those standards  require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatements.  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 audit  provides a  reasonable  basis for our
opinion.

We were unable to observe  inventory  at December  31,  2008.  The nature of the
inventory  does not permit the  application of other  auditing  procedures.  The
value of the inventory as stated in the financial  statements  December 31, 2008
is $189,999.

We were not engaged to examine management's assertion about the effectiveness of
CytoGenix,  Inc.'s internal control over financial  reporting as of December 31,
2008 and, accordingly, we do not express on opinion thereon.

In our  opinion,  except for the effects of such  adjustments,  if any, as might
have been determined to be necessary had we been able to observe inventory,  the
financial statements referred to above present fairly, in all material respects,
the  financial  position of  CytoGenix,  Inc.  as of  December  31, 2008 and the
results of its operations and cash flows for the year then ended,  in conformity
with accounting principles generally accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
financial   statements,   the  Company  has  incurred  substantial  losses  from
operations of  approximately  $41,000,000  since its inception,  has experienced
negative  cash  flows  from  operations  since its  inception  and has a working
capital  deficiency of  approximately  $3,000,000  at December 31, 2008,  all of
which raise  substantial doubt about its ability to continue as a going concern.
Management's  plans in regard to these matters are also described in Note 2. The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.




/s/The Hall Group, CPAs
The Hall Group, CPAs
Dallas, Texas
May 4, 2009


                                       22
<PAGE>
<TABLE>
<CAPTION>

                                 CYTOGENIX, INC.
                                 Balance Sheets
                           December 31, 2008 and 2007


     ASSETS                                                   2008            2007
                                                          ------------    ------------
Current Assets:                                                            (Restated)
<S>                                                                        <C>

     Cash                                                 $      5,475    $    162,042

     Receivables and other current assets                        4,103          44,292

     Inventory                                                 189,999         252,144
                                                          ------------    ------------
             Total Current Assets                              199,577         458,478


Property and equipment, net                                    175,806         237,354

Deposits                                                         6,399           6,399

Long-term investments - restricted                                   0          53,402
                                                          ------------    ------------
             Total Assets                                 $    381,782    $    755,633
                                                          ============    ============

     LIABILITIES AND STOCKHOLERS' EQUITY (DEFICIT)

Current Liabilities:

     Long-term debt, current portion                      $          0    $     27,678

     Accounts payable                                          852,932         388,463

     Advances from shareholders                                104,813               0

     Accrued expenses                                        2,425,771       1,532,344
                                                          ------------    ------------
             Total Current Liabilities                       3,383,516       1,948,485

     Long-term debt, less current portion                            0          17,336
                                                          ------------    ------------
             Total Liabilities                               3,383,516       1,965,821
                                                          ------------    ------------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT):

     Preferred stock, $.001 par value; 50,000,000 share
     authorized,
             no shares issued and outstanding                        0               0

     Common stock, $.001 par value; 300,000,000 share
     authorized,
             156,071,257 and 146,309,719 share issued
             and outstanding as of December 31, 2008
             and 2007, respectively                            156,071         146,310

     Additional paid-in capital                             38,586,830      36,999,514

     Treasury stock                                           (629,972)       (629,972)

     Accumulated deficit                                   (41,114,663)    (37,726,040)
                                                          ------------    ------------
             Total Stockholders' Equity (Deficit)           (3,001,734)     (1,210,188)
                                                          ------------    ------------
             Total Liabilities and Stockholders' Equity   $    381,782    $    755,633
             (Deficit)                                    ============    ============


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

                                       22

<PAGE>

                                 CYTOGENIX, INC.
                            Statements of Operations
                 For the Years Ended December 31, 2008 and 2007




                                                  2008             2007
                                              -------------    -------------
                                                                (Restated)

REVENUES                                      $      52,348    $      66,043
COSTS OF REVENUES                                    62,357           23,539
                                              -------------    -------------
        GROSS MARGIN (DEFICIT)                      (10,009)          42,504


COSTS AND EXPENSES:

        Research and development                    770,143        2,106,746
        General and administrative                2,400,741        2,531,807
        Consulting expense                           96,398          415,258
        Depreciation and amortization                61,548           64,879
        Impairment Expenses                               0        1,201,160
                                              -------------    -------------
LOSS FROM OPERATIONS                             (3,338,839)      (6,277,346)

OTHER INCOME (EXPENSE):
        Interest income, net                            517           18,410
        Other                                       (50,301)          (7,139)
                                              -------------    -------------
NET LOSS                                      $  (3,388,623)   $  (6,266,075)
                                              =============    =============

Net loss per share:
        Basic and diluted net loss per
        share                                 $       (0.02)   $       (0.04)
                                              =============    =============
Weighted average shares outstanding:
        Basic and diluted                       150,420,815      141,452,405
                                              =============    =============



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

                                       24


<PAGE>

                                 CYTOGENIX, INC.
                  Statement of Changes in Stockholders' Equity
                 For the Years Ended December 31, 2008 and 2007

                                                                                                                   Total
                                           Common Stock            Additional                                  Stockholders'
                                   --------------------------       Paid -in         Treasury    Accumulated      Equity
                                      Shares          Amounts       Capital           Stock         Deficit      (Deficit)
                                   -----------------------------------------------------------------------------------------
Stockholders' Equity, December
31, 2006 (Restated)                140,663,961    $    140,664   $ 34,851,026   $   (629,972)   $(31,459,965)   $  2,901,753

Shares issued for cash, net
fundraising                          4,389,750           4,390        714,170           --              --           718,560

Shares issued for services           1,256,008           1,256        344,087           --              --           345,343

Stock based compensation                  --              --        1,090,231           --              --         1,090,231

Net loss                                  --              --             --             --        (6,266,075)     (6,266,075)

                                   -----------------------------------------------------------------------------------------

Stockholders' Equity (Deficit),
December 31, 2007 (Restated)       146,309,719    $    146,310   $ 36,999,514   $   (629,972)   $(37,726,040)   $ (1,210,188)

Shares issued for cash, net
fundraising                          3,115,834           3,116        197,884           --              --           201,000

Shares issued for services             843,999             844         41,316           --              --            42,160

Stock based compensation                  --              --          808,966           --              --           808,966

Warrants issued for settlement            --              --          196,849           --              --           196,849

Shares issued for debt
conversion                           5,801,705           5,801        342,301           --              --           348,102
Net loss
                                          --              --             --             --        (3,388,623)     (3,388,623)
                                   -----------------------------------------------------------------------------------------
Stockholders' Equity (Deficit),
December 31, 2008                  156,071,257    $    156,071   $ 38,586,830   $   (629,972)   $(41,114,663)   $ (3,001,734)
                                   =========================================================================================

</TABLE>




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



                                       25

<PAGE>

                                 CYTOGENIX, INC.
                            Statements of Cash Flows
                 For the Years Ended December 31, 2008 and 2007


                                                   2008            2007
                                                -----------    -----------
                                                               (Restated)
OPERATING ACTIVITIES:
    Net loss                                    $(3,388,623)   $(6,266,075)
    Adjustments to reconcile net loss to net
    cash
           used in operating activities:
           Depreciation and amortization             61,548         64,879
           Impairment Expenses                            0      1,201,160
           Stock-based compensation expenses        808,966      1,090,231
           (Gain) on disposal of property and
           equipment                                      0         (1,150)
           Loss on long-term investments
           restricted                                     0          3,991
           Warrants issued for settlement           196,849              0
           Stock issued for services                 42,160        345,343
           Stock issued for interest expense         48,102              0
           Changes in assets and liabilities:
                       Accounts receivable           40,189        (13,423)
                       Inventory                     62,145        169,813
                       Prepaid expenses                   0        (13,994)
                       Accounts payable             464,469         78,588
                       Accrued expenses             893,427        304,454
                                                -----------    -----------
Net cash (used) in operation activities            (770,768)    (3,036,183)
                                                -----------    -----------
INVESTING ACTIVITIES:
    Purchase of property and equipment                    0        (39,290)
    Deposit on building contract                          0       (425,588)
    Change in  long-term investments -               53,402        115,500
    restricted
                                                -----------    -----------
Net cash provided by (used in) investing             53,402       (349,378)
activities

FINANCING ACTIVITIES:

    Proceeds from notes payable                     300,000              0
    Proceeds from shareholder advances              104,813              0
    Payment on notes payable                        (45,014)       (25,154)
    Proceeds from sale of common stock              201,000        718,560
                                                -----------    -----------
Net cash provided by financing activities           560,799        693,406
                                                -----------    -----------
NET CHANGE IN CASH                                 (156,567)    (2,692,155)
CASH, beginning of period                           162,042      2,854,197
                                                -----------    -----------
CASH, end of period                             $     5,475    $   162,042
                                                ===========    ===========
SUPPLEMENTAL CASH FLOW INFORMATION:
    Interest paid                               $     2,198    $     5,672
                                                ===========    ===========
    Income taxes paid                           $         0    $         0
                                                ===========    ===========
NONCASH TRANSACTIONS:
    Common stock issued for debt                $   300,000    $         0
                                                ===========    ===========




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


                                       26

<PAGE>


                                 CYTOGENIX, INC.
                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 2008 and 2007


NOTE 1 - SUMMARY OF ACCOUNTING POLICIES

Nature of Business

CytoGenix,  Inc.  ("CytoGenix") was incorporated on February 10, 1995 in Nevada.
CytoGenix is a biotechnology  company focusing on controlled cellular processes.
CytoGenix has acquired the rights for  application  to a specialized  expression
vector capable of producing  single  stranded DNA (ssDNA) in both eukaryotes and
prokaryotes.

Basis of Presentation

These  financial  statements  are prepared on the accrual basis of accounting in
conformity with accounting principles generally accepted in the United States of
America.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities at the date of the balance  sheet.  Actual results could differ from
those estimates.

Cash and Cash Equivalents

Cash and cash  equivalents  include  highly liquid,  temporary cash  investments
having original maturity dates of three months or less. For reporting  purposes,
such  cash   equivalents  are  stated  at  cost  plus  accrued   interest  which
approximates fair value.

Accounts Receivable

The  Company's  accounts  receivable  primarily  consist  of trade  receivables.
Management  reviews  accounts  receivable on a monthly basis to determine if any
receivables will potentially be uncollectible. The company includes any accounts
receivable balances that are determined to be uncollectible in its allowance for
doubtful  accounts.  As of December 31, 2008 and 2007 the allowance for doubtful
accounts is zero.

Inventory

Inventory  includes raw materials  (liquid buffers and enzyme mix) that are used
to produce  enzymatically  synthesized DNA (synDNA(TM)).  Inventory is stated at
the lower of cost or market, cost being determined using the first-in, first out
("FIFO")  method.  Reserves are established for excess or obsolete  inventories.
Inventory is included in the cost of revenue when sold.

Inventory detail is as follows:

                  December 31, 2008      December 31, 2007
                  -----------------      -----------------


Inventory
Raw materials         $189,999               $241,790

Finished goods               0                 10,354
                      --------               --------
Total Inventory       $     89               $252,144
                      ========               ========


                                       27
<PAGE>

Intellectual Property Rights

The  Company has  developed  or acquired a  comprehensive  body of  intellectual
rights. The proprietary nature of, and protection for, the Company's technology,
processes  and know-how  are  important to its  business.  The Company  plans to
prosecute and aggressively  defend its patents and proprietary  technology.  Our
policy  is  to  seek  patent  protection  for  technologies,   inventions,   and
improvements  that are considered  important to the development of our business.
The  Company  also  depends  upon  trade  secrets,   know-how,   and  continuing
technological innovation to develop and maintain its competitive position.

CytoGenix  currently  holds 13 granted and 2 allowances  with  approximately  55
additional  foreign or US  pending  patent  applications  claiming  methods  and
materials in connection with these platform technologies. The Company intends to
protect its proprietary technology with additional filings as appropriate.

The Company has chosen not to apply "fair value"  valuation to its  intellectual
property assets due to the extreme uncertainty of the future cash flows that can
potentially be derived from them.

Property and Equipment

Property and equipment is recorded at cost and  depreciation  is computed  using
the straight-line method over the useful lives of the assets. Major renewals and
improvements are capitalized;  minor  replacements,  maintenance and repairs are
charged to current operations.  The cost and related accumulated depreciation of
assets sold or otherwise disposed of are removed from the accounts, and any gain
or loss is included in operations.

Impairment of Long-lived Assets

CytoGenix  performs  reviews for the  impairment of long-lived  assets  whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable.

Statement of Financial  Accounting  Standards ("SFAS") No. 144,  "Accounting for
the Impairment of or Disposal of Long-Lived  Assets",  sets forth guidance as to
when to recognize an  impairment  of  long-lived  assets and how to measure such
impairment.  The standards  require  certain  assets be reviewed for  impairment
whenever  events  or  circumstances  indicate  the  carrying  amount  may not be
recoverable.

Revenue Recognition

CytoGenix's  revenues are primarily derived from selling  synDNA(TM).  CytoGenix
recognizes revenue when persuasive evidence of an arrangement  exists,  delivery
has  occurred,  the  sales  price is fixed or  determinable  and  collection  is
probable.

Research and Development

Research and Development  (R&D) expenses  include  salaries,  benefits and other
headcount  costs;   outside   services   required  to  conduct  the  preclinical
development;  contract and other  outside  service  fees;  employee  stock-based
compensation  expense;  and  facilities  and  overhead  expenses.  R&D costs are
expensed as incurred.

Income Taxes

The  Company  has adopted the  provisions  of SFAS 109,  "Accounting  for Income
Taxes", which requires  recognition of deferred tax  liabilities  and assets for
the expected  future tax  consequences  of events that have been included in the
consolidated  financial statements or tax returns.  Under this method,  deferred
tax  liabilities and assets are determined  based on the difference  between the
financial  statement and tax basis of assets and  liabilities  using enacted tax
rates in effect for the year in which the  differences  are expected to reverse.
The Company  provides a valuation  allowance  to reduce  deferred  tax assets to
their net realizable value.

Income (Loss) Per Common Share

SFAS 128,  "Earnings Per Share", requires  earnings per share to be computed and
reported  as both basic EPS and diluted  EPS.  Basic EPS is computed by dividing
net income by the weighted  average number of common shares  outstanding for the
period.  Diluted EPS is computed by dividing net income by the weighted  average
number of common shares and dilutive common stock equivalents (convertible notes
and interest on the notes,  stock awards and stock options)  outstanding  during
the period.  Dilutive EPS reflects the  potential  dilution  that could occur if
options to purchase  common  stock were  exercised  for shares of common  stock.
Basic and diluted EPS are the same as the effect of our  potential  common stock
equivalents would be anti-dilutive.


                                       28
<PAGE>

Stock-Based Compensation

Effective  January  1,  2006,  the  Company  adopted  SFAS  No.  123  (Revised),
"Share-Based Payment" (SFAS 123(R)) utilizing the modified prospective approach.
Prior to the  adoption of SFAS 123(R) we  accounted  for stock  option  grant in
accordance with APB Opinion No. 25,  "Accounting for Stock Issued to Employees,"
and accordingly,  recognized  compensation expense for stock option grants using
the intrinsic value method.

Under the modified prospective  approach,  SFAS 123(R) applies to new awards and
to awards  that  were  outstanding  on  January  1,  2006 that are  subsequently
modified,  repurchased or cancelled.  Under the modified  prospective  approach,
compensation  cost  recognized  in the first  quarter  of fiscal  2006  includes
compensation  cost for all  share-based  payments  granted prior to, but not yet
vested as of January 1, 2006,  based on the grant-date  fair value  estimated in
accordance with the original  provisions of SFAS 123, and compensation  cost for
all  share-based  payments  granted  subsequent  to January 1, 2006 based on the
grant-date  fair value  estimated  in  accordance  with the  provisions  of SFAS
123(R).  For all quarters  after the first quarter of fiscal 2006,  compensation
costs recognized will include  compensation  costs for all share-based  payments
granted  based on the grant date fair value  estimated  in  accordance  with the
provisions of SFAS 123(R).

The Company has granted  options  and  warrants to purchase  CytoGenix's  common
stock.  These instruments have been valued using the Black-Sholes  model and are
fully detailed in Note 9.

Fair Value of Financial Instruments

The Company includes fair value information in the notes to financial statements
when the fair value of its  financial  instruments  is  different  from the book
value. When the book value approximates fair value, no additional  disclosure is
made.

Segment Reporting

The Company  operates in one  industry  segment --  biotechnology  research  and
development.  The Company  operates  in one  geographic  area,  being the United
States of America.

FASB Statement No. 131, "Disclosures about Segments of an Enterprise and Related
Information",  establishes  standards for reporting  information about operating
segments.  Operating  segments are defined as components of an enterprise  about
which separate financial information is available that is evaluated regularly by
the chief operating decision maker, or decision making group, in deciding how to
allocate resources and in assessing  performance.  The Company's chief operating
decision maker is its Chief  Executive  Officer.  The Company's  Chief Executive
Officer  reviews  financial  information  presented on a consolidated  basis for
purposes of  allocating  resources and  evaluating  financial  performance.  The
Company has one business activity and there are no segment managers who are held
accountable  for  operations,  operating  results  and  plans  for  products  or
components below the consolidated unit level.  Accordingly,  the Company reports
as a single operating segment.

Recent Accounting Pronouncements

Effective  January 1, 2008,  the Company  adopted SFAS No. 159,  "The Fair Value
Option for Financial Assets and Financial Liabilities, Including an amendment of
SFAS No. 115" ("SFAS 159"). SFAS 159 permits companies to choose to measure many
financial  instruments  and  certain  other  items  at fair  value.  SFAS 159 is
effective  for  financial  statements  issued for fiscal years  beginning  after
November  15, 2007.  The adoption of SFAS 159 did not have a material  impact on
the Company's consolidated financial statements.

Effective  January 1, 2008,  the  Company  adopted  SFAS No.  157,  "Fair  Value
Measurements" ("SFAS 157"). In February 2008, the FASB issued Staff Position No.
157-2,  "Effective Date of FASB Statement No. 157" ("FSP 157-2"),  which delayed
the effective date of SFAS 157 for certain  nonfinancial assets and liabilities,
including fair value measurements  under SFAS No. 141,  "Business  Combinations"
("SFAS 141") and SFAS 142, to fiscal years  beginning  after  November 15, 2008.
Therefore,  the Company has adopted the  provisions  of SFAS 157 with respect to
its  financial  assets  and  liabilities  only.  SFAS 157  defines  fair  value,
establishes  a  framework  for  measuring  fair  value  in  generally   accepted
accounting  principles,  and expands  disclosures about fair value measurements.
Fair  value is  defined  under  SFAS 157 as the  exchange  price  that  would be
received  for an asset or paid to  transfer a  liability  (an exit price) in the
principal or most  advantageous  market for the asset or liability in an orderly
transaction  between market  participants  on the  measurement  date.  Valuation
techniques  used to measure  fair value under SFAS 157 must  maximize the use of
observable  inputs and minimize  the use of  unobservable  inputs.  The standard
describes a fair value  hierarchy based on the following three levels of inputs,
of which the first two are considered observable and the last unobservable, that
may be used to measure fair value:


                                       29
<PAGE>

     o    Level 1 - Quoted  prices in active  markets  for  identical  assets or
          liabilities.
     o    Level 2 -  Inputs  other  than  Level 1 that  are  observable,  either
          directly or  indirectly,  such as quoted prices for similar  assets or
          liabilities;  quoted  prices in markets that are not active;  or other
          inputs that are observable or can be corroborated by observable market
          data for substantially the full term of the assets or liabilities.
     o    Level 3 -  Unobservable  inputs  that are  supported  by  little or no
          market  activity  and that are  significant  to the fair  value of the
          assets or liabilities.

As of December 31, 2008, the Company did not hold any assets or liabilities that
are required to be measured at fair value on a recurring  basis,  and  therefore
the adoption of the respective  provisions of SFAS 157 did not have an impact on
the Company's consolidated financial statements. On January 1, 2009, the Company
will implement the previously  deferred  provisions of SFAS 157 for nonfinancial
assets and liabilities recorded at fair value, as required.  Management does not
believe  that the  remaining  provisions  will  have a  material  effect  on the
Company's consolidated financial statements when they become effective.

In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally  Accepted
Accounting  Principles"  ("SFAS  162").  The  statement  is  intended to improve
financial  reporting  by  identifying  a  consistent   hierarchy  for  selecting
accounting  principles  to be used in preparing  financial  statements  that are
prepared in accordance with generally  accepted  accounting  principles.  Unlike
Statement on Auditing  Standards  ("SAS") No. 69, "The Meaning of Present Fairly
in  Conformity  With GAAP",  SFAS 162 is directed to the entity  rather than the
auditor.  The statement was effective  November 15, 2008,  after approval by the
SEC which occurred in September  2008. The application of this statement did not
have a material impact on the Company's consolidated financial statements.

In April 2008, the FASB issued FASB Staff Position No. 142-3,  "Determination of
the  Useful  Life of  Intangible  Assets"  ("FSP  142-3").  FSP  142-3  requires
companies  estimating  the  useful  life of a  recognized  intangible  asset  to
consider  their   historical   experience  in  renewing  or  extending   similar
arrangements  or,  in  the  absence  of  historical   experience,   to  consider
assumptions  that market  participants  would use about  renewal or extension as
adjusted for SFAS 142's  entity-specific  factors.  FSP 142-3 is  effective  for
financial  statements issued for fiscal years beginning after December 15, 2008.
Adoption of this  statement  is not  expected  to have a material  impact on the
Company's consolidated financial statements when it becomes effective.

In  December  2007,  FASB  issued  SFAS  No.  141  (revised   2007),   "Business
Combinations"  ("SFAS  141R"),  which  is a  revision  of SFAS  141.  SFAS  141R
establishes  principles  and  requirements  for how an acquirer  recognizes  and
measures in its financial  statements  the  identifiable  assets  acquired,  the
liabilities assumed and any noncontrolling interest in the acquiree,  recognizes
and measures the goodwill acquired in the business  combination or a gain from a
bargain purchase, and determines what information to disclose to enable users of
the financial  statements  to evaluate the nature and  financial  effects of the
business  combination.  The revised statement will require,  among other things,
that transaction costs be expensed instead of recognized as purchase price. SFAS
141R applies  prospectively  to business  combinations for which the acquisition
date is on or after January 1, 2009.

NOTE 2 - GOING CONCERN

CytoGenix has had  negligible  revenues since  inception and only  approximately
$118,000  in the last two  years.  The  Company  has  incurred  losses  totaling
$41,114,663  from  inception  through  December  31,  2008.   Because  of  these
conditions,  CytoGenix  will  require  additional  working  capital  to  develop
business  operations.  CytoGenix  intends to raise  additional  working  capital
either through private placements, public offerings and/ or bank financing.

There  are no  assurances  that  CytoGenix  will be able to  achieve  a level of
revenue  adequate to generate  sufficient  cash flow from  operations  or obtain
additional  financing through private placements,  public offerings and/ or bank
financing necessary to support CytoGenix's working capital requirements.  To the
extent that funds generated from any private  placements,  public offerings and/
or bank  financing are  insufficient,  CytoGenix  will have to raise  additional
working  capital.  No assurance can be given that  additional  financing will be
available,  or if  available,  will be on  terms  acceptable  to  CytoGenix.  If
adequate  working  capital  is not  available  CytoGenix  may not  increase  its
operations.

These conditions raise substantial  doubt about CytoGenix's  ability to continue
as a going  concern.  The financial  statements  do not include any  adjustments
relating to the  recoverability  and classification of asset carrying amounts or
the amount and  classification  of  liabilities  that might be necessary  should
CytoGenix be unable to continue as a going concern.


                                       30
<PAGE>

NOTE 3 - LONG TERM INVESTMENT - RESTRICTED

The Company  established a CD for $50,000 with Frost National bank which matured
on July 18, 2008. This CD earned interest at 4.65% and in 2008 and 2007 interest
earned was $517 and $2,345  respectively.  The CD was required by Frost National
Bank to partially secure the equipment loan discussed in Note 7.

The Company had a restricted long-term CD investment of $115,500 in 2007 for the
pending appeal of a case CytoGenix to comply with a court order.  This CD earned
interest at a rate of 3.4% annually.  This CD was maintained until a mandate was
issued by the 1st Court of  Appeals.  In 2007 the  mandate was issued and the CD
was released to the Company.

NOTE 4 - PROPERTY AND EQUIPMENT, NET

Property consisted of the following as of December 31:

                                                     2008         2007
                                                 ----------------------
Lab equipment 5-7 years                          $ 338,295    $ 338,295
Office Furniture & Fixtures 3-7 years               62,592       62,592
Office Equipment 3-7 years                          63,034       63,034
Leasehold Improvements  Lease Term                  16,804       16,804
Less: accumulated depreciation                    (304,919)    (243,371)
                                                 ---------    ---------
Net book value                                   $ 175,806    $ 237,354
                                                 =========    =========

Depreciation   expense   totaled   $61,548   and  $64,879  for  2008  and  2007,
respectively.

NOTE 5 - DEPOSITS

The Company's  deposits at December 31, 2008 and 2007 represent a deposit on the
lab facilities in the amount of $6,399.

NOTE 6 - ACCRUED EXPENSES

Accrued  expenses  consist mainly of unpaid salaries and unpaid payroll taxes on
cash compensation and stock based compensation.  Total accrued payroll taxes for
previously  issued  stock  compensation  as of  December  31,  2008 and 2007 was
$207,154.  Accrued bonus  compensation per employment  agreements as of December
31, 2008 and 2007 was $155,446 and $361,946.

NOTE 7 - DEBT

CytoGenix entered into an $80,000,  36 month promissory note with a bank on July
18, 2006 to finance the cost of equipment. The note requires monthly payments of
$2,569  including  interest at 9.51%.  Interest paid for the year ended December
31, 2008 and 2007 was $2,198 and $5,672  respectively.  The principal balance of
$45,014 outstanding at December 31, 2007 was paid during 2008.

NOTE 8 - STOCKHOLDERS' EQUITY

Common Stock

The Company is authorized to issue  300,000,000  shares of common stock at $.001
par  value.  Each share of common  stock has one  voting  right and the right to
dividends  if and when  declared  by the Board of  Dicrectors.  The  Company had
issued  156,071,257 and 146,309,710  shares outstanding at December 31, 2008 and
2007, respectively.

Preferred Stock

The Company is authorized to issue  50,000,000  shares of preferred  stock.  The
Company had issued zero shares at December 31, 2008 and 2007.

Treasury Stock

At December 31, 2008 the Company has 547,250  shares of treasury stock valued at
its cost basis of $629,972.


                                       31
<PAGE>

During the year ended December 31, 2008, the Company issued 9,761,538 restricted
shares of its common stock for cash,  services  rendered and conversion of notes
payable as follows;

     o    156,000 shares previously issued for services were surrendered.
     o    3,115,834 shares for $201,000 cash.
     o    249,999  shares  with a value of  $40,000  for  services  rendered  to
          outside to outside  consultants (83,333 shares were issued each to TMS
          Investments, Inc., Harris Forbes, Inc., and Chasseur Corporation).
     o    750,000  shares to BioXcel  Corporation  with a value of  $45,000  for
          Services rendered.
     o    5,801,705  shares for the  conversion  of a note  payable  and accrued
          interest totaling $348,102.

On November 30,  2007,  the Company  completed a private  placement of 4,491,000
shares  (4,389,750  shares  issued  as of  December  31,  2007,  101,250  issued
subsequent  to December 31, 2007) of  restricted  common stock at $.16 per share
for gross proceeds of $718,560. The difference between the selling price and the
market value on the date the shares were sold was  approximately  $.09 per share
($404,190). In 2007 the Company issued 1,256,008 shares with a value of $345,343
for services.

During 2006, the Company issued 15,882,991 shares through private placement with
net proceeds totaling  $6,314,566,  and issued 320,000 shares valued at $275,200
for services.

During 2005, the company issued 13,928,967 shares through private placement with
net proceeds totaling  $3,585,080,  and issued 647,701 shares valued at $542,126
in settlement of debt, and 679,963 shares valued at $328,500 for services.

NOTE 9 - STOCK-BASED COMPENSATION

Employee Stock-Based Compensation

At December 31, 2008, the Company had two stock-based  compensation  plans,  the
2003 stock option plan and the 2005 stock option plan. The Company  accounts for
these  plans in  accordance  with  SFAS No.  123  (revised  2004),  "Share-Based
Payment" SFAS 123 (R), which requires companies to recognize the costs of awards
of equity instruments,  such as stock options and restricted stock, based on the
fair value of those  awards at the date of grant.  The Company  adopted the SFAS
123 (R) effective January 1, 2006 using the modified prospective method.

The following  compensation expense was recorded for the year ended December 31,
2008, which includes $118,299  associated with the issuance of 2,000,000 options
in the second quarter of 2008 to Directors in exchange for the return of 156,000
shares previously issued to them as Director compensation:

Research and development                    $   24,559
General and administrative                     765,258
                                            ----------
         Stock-based compensation           $  789,817
                                            ----------

We used the Black-Scholes  option-pricing model ("Black-Scholes model") to value
our stock options with the following assumptions:

         Volatility                          116% to 250%
         Risk-Fee Interest Rate             1.86% to 4.50%
         Dividend Yield                        0.00%
         Expected Term (years)                 10.00








                                       32
<PAGE>
<TABLE>
<CAPTION>

A summary for our stock-based compensation activity for the years ended December
31, 2008 and 2007 are presented below:

                                                                         Average      Aggregated
                                                           Average        Life           Fair
                                          Options         Price (1)     (years)(2)       Value
                                        ------------    ------------   ------------   ------------
<S>                                                                                   <C>
Outstanding at December 31, 2007          24,286,000    $       0.48           6.85   $ 11,059,071

      Granted                              2,000,000            0.06           9.75        120,000
      Exercised                                 --              --             --             --
      Forfeited/expired                  (16,973,500)           0.49           --       (8,041,758)
                                        ------------    ------------   ------------   ------------

Outstanding at December 31, 2008           9,312,500    $       0.34           7.56   $  3,137,313
                                        ============    ============   ============   ============

Exercisable at December 31, 2008           8,179,167    $       0.35           9.82   $  2,861,313
                                        ============    ============   ============   ============
</TABLE>


(1)  Weighted-average  exercise  price  (2)  Weighted-average  contractual  life
remaining

WARRANTS

On November 12, 2008, the Company issued warrants to its Chief Executive Officer
to purchase  500,000 shares our its common stock with an exercise price equal to
$0.001  per  share.  These  warrants  become  vested  immediately  and expire on
November 12, 2018, if not exercised by such date. We estimated the fair value of
these options using the  Black-Scholes  method with assumptions  including:  (1)
term of ten years;  (2) a computed  volatility rate of 171%; (3) a discount rate
of 3.75% and (4) zero dividends.  The fair value of these warrants was estimated
to be $22,500 and is included in general  and  administrative  expenses  for the
year ended December 31, 2008.

On July 3, 2008, the Company issued warrants to its Vice President-Legal Counsel
to purchase 3,000,000 shares of its common stock with an exercise price equal to
$0.06 per share.  These warrants become vested immediately and expire on July 3,
2018 if not exercised by such date. We estimated the fair value of these options
using the  Black-Scholes  method  with  assumptions  including:  (1) term of ten
years; (2) a computed  volatility rate of 155%; (3) a discount rate of 3.99% and
(4) zero  dividends.  The  fair  value of these  warrants  was  estimated  to be
$177,899  and is included in general and  administrative  expenses  for the year
ended December 31, 2008.

On June 30, 2008, the Company issued  warrants to former  employees,  as part of
the settlement  agreement  discussed in Note 3, to purchase  5,200,000 shares of
our common stock with an exercise  price equal to $0.05 per share for  1,733,332
of the  warrants,  $0.10 per share for  1,733,334  of the warrants and $0.15 per
share for the remaining 1,733,334 warrants. These options vested immediately and
have a term of three years.  We estimated  the fair value of these options using
the Black-Scholes  method with assumptions  including:  (1) term of three years;
(2) a computed  volatility  rate of 152%;  (3) a discount  rate of 2.91% and (4)
zero  dividends.  The fair value of these  warrants was estimated to be $196,849
and was  included  in general  and  administrative  expenses  for the year ended
December 31, 2008.

NOTE 10 - DEFAULT NOTICE

On  March  20,  2008,  the  Company   received  notice  of  termination  of  its
construction contract with GSL Construction Contractors,  Ltd. ("GSL") under the
terms of an earnest money contract it had entered into for the construction of a
new office and lab facility.  Accordingly,  the Company's earnest money deposits
and change  order  payments  were  forfeited.  Forfeited  deposits  and payments
included $901,160 made as of December 31, 2007, as well as an additional payment
of $300,000 made in January 2008.  Based on the Company's  determination  of the
possibility  of loss and the  subsequent  notice  of  termination,  the  Company
recorded an impairment  loss of $1,201,160  associated with the contract for the
year ended December 31, 2007.


                                       33
<PAGE>

NOTE 11 - INCOME TAXES

During  the  year  ended  December  31,  2007,  the  Company  adopted  Financial
Accounting  Standards  Board  (FASB)  Interpretation  No.  48,  "Accounting  for
Uncertainty  in Income  Taxes"  ("FIN  48"),  which  supplements  SFAS No.  109,
"Accounting  for Income  Taxes",  by defining  the  confidence  level that a tax
position must meet in order to be recognized  in the financial  statements.  The
Interpretation requires that the tax effects of a position be recognized only it
if is  "more-likely-than-not"  to be  sustained  based  solely on its  technical
merits as of the reporting date. The more-likely-than-not threshold represents a
positive  assertion  by  management  that a company is entitled to the  economic
benefits   of  a  tax   position.   If  a  tax   position   is  not   considered
more-likely-than-not  to be sustained based solely on its technical  merits,  no
benefits   of  the  tax   position   are  to  be   recognized.   Moreover,   the
more-likely-than-not  threshold must continue to be met in each reporting period
to support  continued  recognition  of a benefit.  With the  adoption of FIN 48,
companies  are required to adjust  their  financial  statements  to reflect only
those tax positions that are more-likely-than-not to be sustained. Any necessary
adjustment  would be recorded  directly to retained  earnings  and reported as a
change in accounting principle.

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.  For Federal  income tax purposes,  the
Company uses the cash basis of accounting, whereas the accrual basis is used for
financial reporting purposes. In addition, certain assets are charged to expense
when  acquired  under  Section 179 of the  Internal  Revenue Code for income tax
purposes.

The Company  provided a full valuation  allowance on the net deferred tax asset,
consisting  primarily of net operating loss carry forwards,  because  management
has determined  that it is  more-likely-than-not  that the Company will not earn
income  sufficient  to realize the deferred tax assets  during the carry forward
period.

The cumulative  tax effect at the expected tax rate of 25% of significant  items
comprising  the  Company's  net deferred tax amounts as of December 31, 2008 and
2007 are as follows:

                                                12/31/08       12/31/07
  Deferred tax assets attributable to:
   Prior years                                $ 8,501,000    $ 6,775,000
   Tax benefit (liability) for current year     1,078,000      1,726,000
                                              -----------    -----------
       Total Deferred Tax Benefit             $ 9,579,000    $ 8,501,000
       Valuation Allowance                     (9,579,000)    (8,501,000)
                                              -----------    -----------

                Net Deferred Tax Benefit      $         0    $         0
                                              ===========    ===========

Components  of the  current  provision  (benefit)  for taxes on  income  for the
current year are as follows:

                                                12/31/08       12/31/07
  Income tax before extraordinary item:
    Tax (benefit) liability on
    current year operations                   $ 1,078,000    $ 1,726,000
    Valuation Reserve                          (1,078,000)    (1,726,000)
                                              -----------    -----------

    Net provision (benefit)                   $         0    $         0
                                              ===========    ===========

The  realization of deferred tax benefits is contingent upon future earnings and
is fully reserved at December 31, 2008.







                                       34
<PAGE>

NOTE 12 - CONCENTRATIONS

The Company had gross sales of $52,348 and $ 66,043 for the years ended 2008 and
2007,  respectively.  The Company had one customer that  represented 100% of the
gross  sales  for the  year  ended  December  31,  2008 and two  customers  that
represented  100% of the gross sales for the year ended  December 31, 2007.  The
Company has one supplier that  provides all the materials  necessary to generate
the sales for the years ended December 31, 2008 and 2007,  respectively.  Due to
the nature of the materials, it might be difficult to find a new supplier should
that be necessary.

The Company has cash balances in a single financial institution which, from time
to time,  exceed the  federally  insured  limit of $250,000.  As of December 31,
2008, the Company's cash balance did not exceed the federally  insured limit. No
loss has been incurred related to this concentration of cash.

NOTE 13 - COMMITMENTS AND CONTIGENCIES

Lease
-----

CytoGenix  leases  office  facilities  under an operating  lease that expires on
December  31,  2009.  Rent  expense  was $ 84,583 and $76,414 for 2008 and 2007,
respectively.  On November 25, 2008,  the Company and the landlord  executed the
First Amendment to Lease.  The Amendment  provided for a temporary  deferment of
rent and a provision for paying the delinquent  rent amount of $28,876 as of the
date of the Amendment. Per the Amendment,  annual future minimum rental payments
are $101,618 for year ended  December 31, 2009,  of which $28,876 was accrued at
December 31, 2008. The lease also provides for operating expenses reimbursements
to the  landlord.  The Company is required to pay $16,611 in  operating  expense
escrows during 2009. The actual operating  expense will be reconciled and billed
or credited  subsequent to the end of the year.  At December 31, 2008,  accounts
payable includes $37,803 due under the lease.

Rent expense is  recognized on a straight line basis over the term of the lease.
The  average  minimum  rental  payment  over the term of the lease is $5,622 per
month from December 2003 through December 2009. As of December 31, 2008 and 2007
deferred  rent was $9,323 and $18,645,  respectively  and is included in accrued
expenses.

Land & Building
---------------

On October 30, 2006, the Company entered into an earnest money contract with GSL
Constructors,  Ltd. ("GSL") for a design/build  project located in the Westchase
District of Houston for $3,796,577 and paid GSL a deposit of $474,572.  On March
20, 2008, the Company  received notice of termination of this contract due to an
alleged  default by the  Company.  GSL purports to have  terminated  the earnest
money contract pursuant to the terms of Section 11 thereof, and pursuant to that
section GSL would be entitled to the deposit and all payments previously made by
the Company as liquidated damages. The Company has paid approximately $1,201,160
under the contract. GSL has not released the Company from any of its obligations
under the contract.

Research
--------

CytoGenix  has entered into  Sponsored  Research  Agreements  (SRA) with several
universities.  The universities do research for CytoGenix related to CytoGenix's
proprietary technology.  As work progresses,  the universities invoice CytoGenix
for  reimbursement  of  expenses  related  to  the  research.   The  SRA's  have
established  budgets. As of December 31, 2008 and 2007, the company had unbilled
amounts under the SRA's totaled approximately $0 and $116,000.

Board of Directors
------------------

At  December  31,  2008,   there  were  two  outside   Directors   who  received
approximately  $58,866 and $68,866 in compensation  for the year ending December
31, 2008.

Inventory
---------

The Company has  entered an  agreement  with GE  Healthcare  Bio-Sciences  Corp.
whereas GEHC will provide the Company  with DNA  production  reagents for use in
the  manufacture  of vaccines and  therapeutic  compounds.  The Company plans to
begin the process of  negotiating  with GE for the  optional  extensions  of the
contract  for 2008 and beyond.  As of the date of this filing no  agreement  has
been finalized.


                                       35
<PAGE>

Litigation
----------

Frank Vazquez and Lawrence Wunderlich v. CytoGenix, Inc.

In  November  of 2006,  the  former  Chief  Financial  Officer  (CFO),  Lawrence
Wunderlich,  and the former  Chief  Operations  Officer  (COO),  Frank  Vazquez,
resigned from the Company.  The Company and former officers pursued  arbitration
to resolve  claims by Messrs Vazquez and  Wunderlich  and  counterclaims  by the
Company.

On June 30, 2008, CytoGenix, Inc. (the "Company"), Lawrence Wunderlich and Frank
Vazquez entered into a Settlement  Agreement and Mutual Release (the "Settlement
Agreement")  regarding arbitration No. 70 144 08333 06, styled Frank Vazquez and
Lawrence  Wunderlich  v.  CytoGenix,   Inc.,  before  the  American  Arbitration
Association in Houston,  Texas, (the "Arbitration").  Pursuant to the Settlement
Agreement, all claims of Messrs. Vazquez and Wunderlich against the Company, and
all claims of the Company  against each of Messrs.  Vazquez and Wunderlich  have
been  released,  acquitted  and forever  discharged.  The  Settlement  Agreement
obligates the Company it issue to (i) Mr. Wunderlich  warrants to acquire, on or
before June 30, 2011, 1,066,666 shares, 1,066,667 shares and 1,066,667 shares of
the  Company's  common  stock at  exercise  prices  of $0.05,  $0.10 and  $0.15,
respectively,  and (ii) Mr. Vazquez  warrants to acquire,  on or before June 30,
2011, 666,666 shares,  666,667 shares and 666,667 shares of the Company's common
stock at  exercise  prices of $0.05,  $0.10 and $0.15,  respectively.  Under the
Settlement  Agreement  the Company is also  obligated  to pay  $150,000  each to
Messrs.  Vazquez and Wunderlich in equal monthly  installments ($3,125 per month
to each) over a  four-year  period  commencing  October  1, 2008.  Copies of the
Settlement Agreement and a form of warrant were attached to a Form 8-K filing on
July 7, 2008 and are incorporated herein by reference. The foregoing description
of the terms and  provisions  thereof is a summary only, and is qualified in its
entirety by reference to the Settlement Agreement.

Four former employees have filed complaints with the Texas Workforce  Commission
for unpaid wages totaling approximately $175,147, which the Company has included
as part of its accrued  compensation  liability on the December 31, 2008 balance
sheet.

NOTE 14 -  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the year ended December 31, 2008, Capital Equity Partners,  LLC, of which
the Company's Chairman of the Board and Principal Financial Officer is a limited
partner,  advanced  the Company  approximately  $105,000 and  purchased  283,333
shares of restricted  common stock for $17,000.  The amounts advanced by Capital
Equity Partners, LLC will be repaid as cash flows allow.

In January 2008, the Company  entered into a loan agreement to borrow money from
KV  Mechanical   Construction  and  Restoration  Company,   Inc.  KV  Mechanical
Construction and Restoration Company,  Inc. is a significant  shareholder of the
Company owning  approximately  6.1% of the Company's common stock. The principal
amount of the loan is $300,000 with an annual interest rate of 24%. During 2008,
the $300,000  note plus accrued  interest of $48,102 was  converted to 5,801,705
shares of the Company's common stock.

NOTE 15 - SUBSEQUENT EVENTS

Subsequent to December 31, 2008, the Company received  approximately $200,000 in
proceeds from a private  placement  offering of 13,333,333  shares of restricted
common stock.

On April 24, 2009, the Company executed a Settlement Agreement,  Indemnification
and Mutual  Release with  Malcolm  Skolnick,  its former  Chairman of the Board,
Chief  Executive  Officer and  President for the sum $10.00 and the agreement to
enter into a consulting agreement with Mr. Skolnick. The Agreement dismisses any
and all actual and  potential  claims  that have been  raised or which  could be
raised at the time of the execution of the Agreement.

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

Effective March 2, 2009, the Company's Board of Directors approved the dismissal
of LBB Associates Ltd., LLP as the Company's independent registered accountants.
Except as described below, the audit report of LBB & Associates Ltd., LLP on the
financial  statements  of the  Company  as of and for  the  fiscal  years  ended
December 31, 2007 and 2006 did not contain an adverse opinion or a disclaimer of
opinion,  and was not  qualified  or modified  as to audit  scope or  accounting
principles.  LBB & Associates  Ltd.,  LLP's 2007 audit report  relating to LBB &
Associates Ltd.,  LLP's financial  statements for the fiscal year ended December
31, 2007 included an emphasis  paragraph  relating to an  uncertainty  as to the
Company's ability to continue as a going concern.


                                       36
<PAGE>

In  connection  with the audit of the  Company's  financial  statements  for the
fiscal year ended December 31, 2007 and through the date of this current report,
there were: (1) no disagreements  between the Company and LBB & Associates Ltd.,
LLP on any matters of accounting  principles or practices,  financial  statement
disclosure,  or  auditing  scope  or  procedures,  which  disagreements,  if not
resolved to the  satisfaction  of LBB & Associates  Ltd., LLP, would have caused
LBB &  Associates  Ltd.,  LLP to make  reference  to the  subject  matter of the
disagreement  in their reports on the Company's  financial  statements  for such
years,  and (2) no  reportable  events  within the meaning set forth in Item 304
(a)(1)(iv)(B) of Regulation S-B or Item 304 (a)(1)(v) of Regulation S-K.

The Company has provided LBB & Associates  Ltd.,  LLP a copy of the  disclosures
and LBB & Associates Ltd., LLP has furnished the Company with a letter addressed
to the Securities and Exchange  Commission  stating that LBB & Associates  Ltd.,
LLP agrees with the Company's  statement in this Item 304 (a). On March 2, 2008,
the Board of Directors of the Company  approved the engagement of The Hall Group
CPAs to assume the role of its new independent registered accountant.

During the periods ended December 31, 2007, and the subsequent  interim  periods
ended  September  30, 2008,  and through the date of the firm's  engagement  the
Registrant did not consult with The Hall Group, CPAs with regard to:

     (1)  the application of accounting  principles to a specified  transaction,
          either completed or proposed:  or the type of audit opinion that might
          be rendered on Registrant's financial statements; or
     (2)  any  matter  that  was  either  the  subject  of a  disagreement  or a
          reportable  event (as  described in Item 304(a) (1) (iv) of Regulation
          S-B.

ITEM 9A. CONTROLS AND PROCEDURES

The  Company's  management  evaluated,  with  the  participation  of  its  Chief
Executive Officer ("CEO") and Chief Financial Officer ("CFO"), the effectiveness
of the design/operation of its disclosure controls and procedures (as defined in
Rules  13a-15(e) and  15d-15(e)  under the  Securities  Exchange Act of 1934, as
amended ("Exchange Act")) as of December 31, 2008.

Disclosure  controls  and  procedures  refer to  controls  and other  procedures
designed to ensure that  information  required to be disclosed in the reports we
file or submit under the Exchange Act, is recorded,  processed,  summarized  and
reported within the time periods specified in the rules and forms of the SEC and
that  such  information  is  accumulated  and  communicated  to our  management,
including  our  chief  executive  officer  and  chief  financial   officer,   as
appropriate,  to  allow  timely  decisions  regarding  required  disclosure.  In
designing and  evaluating  our disclosure  controls and  procedures,  management
recognizes  that any controls and  procedures,  no matter how well  designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives,  and  management is required to apply its judgment in evaluating and
implementing possible controls and procedures.

Management  conducted its evaluation of disclosure controls and procedures under
the supervision of our principal  executive officer and our principal  financial
officer.  Based on that  evaluation,  management  concluded  that our  financial
disclosure controls and procedures were not effective related to the preparation
of the 10-K filing as of December 31, 2008.

Material Weaknesses Identified

We identified the following  deficiencies  which together  constitute a material
weakness  in our  assessment  of the  effectiveness  of  internal  control  over
financial reporting as of December 31, 2008:

     o    The  Company  has  inadequate  segregation  of duties  within its cash
          disbursement control design.
     o    The   Company's   physical   inventory   controls  are  not  operating
          effectively and inventory is prone to misstatement.
     o    During  the year ended  December  31,  2008,  the  company  internally
          performed all aspects of our financial  reporting process,  including,
          but not limited to, access to the  underlying  accounting  records and
          systems,   the  ability  to  post  and  record  journal   entries  and
          responsibility for the preparation of the financial statements. Due to
          the fact these duties were performed  oftentimes by the same people, a
          lack of review was created over the financial  reporting  process that
          might  result  in  a  failure  to  detect   errors  in   spreadsheets,
          calculations,  or assumptions used to compile the financial statements
          and  related   disclosures  as  filed  with  the  SEC.  These  control
          deficiencies could result in a material misstatement to our interim or
          annual financial statements that would not be prevented or detected.
     o    The Company does not have a sufficient number of independent directors
          for our  board  and  audit  committee.  We  currently  only  have  one
          independent  director on our board, which is comprised of 4 directors,
          and we do not have a functioning audit committee. As a publicly-traded
          company, we should strive to have a majority of our board of directors
          be independent.


                                       37
<PAGE>

The Company is continuing the process of remediating  its control  deficiencies.
However, the material weakness in internal control over financial reporting that
has been identified will not be remediated until numerous  internal controls are
implemented  and  operate for a period of time,  are tested,  and the Company is
able to conclude that such  internal  controls are  operating  effectively.  The
Company cannot provide  assurance  that these  procedures  will be successful in
identifying  material  errors that may exist in the  financial  statements.  The
Company cannot make  assurances  that it will not identify  additional  material
weaknesses  in its  internal  control  over  financial  reporting in the future.
Management  plans to provide future  investments in the continuing  education of
our  accounting  and  financial  professionals.  Specifically,  we  plan to seek
specific public company accounting training during 2009.

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal
control over  financial  reporting as defined in Rules  13a-15(f)  and 15d-15(f)
under the Exchange Act. Our  management is also required to assess and report on
the effectiveness of our internal control over financial reporting in accordance
with Section 404 of the Sarbanes-Oxley  Act of 2002 ("Section 404").  Management
assessed the  effectiveness of our internal control over financial  reporting as
of December 31, 2008. In making this assessment,  we used the criteria set forth
by the Committee of Sponsoring  Organizations of the Treadway  Commission (COSO)
in  Internal  Control -  Integrated  Framework.  During  our  assessment  of the
effectiveness  of internal  control over financial  reporting as of December 31,
2008.

Changes in Internal Controls over Financial Reporting

Other than the  matters  discussed  above,  during  the  period  covered by this
report,  there were no significant  changes in the Company's  internal  controls
over financial  reporting that have materially affected or are reasonably likely
to materially affect the Company's internal controls over financial reporting.

It should be noted  that any  system of  controls,  however  well  designed  and
operated,  can provide only  reasonable,  and not absolute,  assurance  that the
objectives of the system are met. In addition,  the design of any control system
is based in part upon certain assumptions about the likelihood of future events.
Because of these and other inherent  limitations of control system, there can be
no assurance  that any design will  succeed in achieving  its stated goals under
all potential future conditions, regardless of how remote.

Auditor Attestation

This  annual  report  does not include an  attestation  report of the  company's
registered  public  accounting  firm regarding  internal  control over financial
reporting.  Management's  report was not subject to attestation by the company's
registered  public  accounting  firm  pursuant  to rules of the  Securities  and
Exchange Commission that permit the company to provide only management's report.

During the most recently  completed fiscal quarter,  there has been no change in
our internal control over financial reporting that has materially affected or is
reasonably  likely to materially  affect,  our internal  control over  financial
reporting.

ITEM 9B. OTHER INFORMATION

None

                                    PART III


ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The directors and officers of the Company as of December 31, 2008, are set forth
below.  The  directors  hold  office for their  respective  term and until their
successors are duly elected and qualified. The officers serve at the will of the
Board of Directors.


                                       38
<PAGE>

DIRECTORS, EXECUTIVE OFFICERS AND OTHER KEY EMPLOYEES OF THE COMPANY.

Set forth  below are the names,  ages and  positions  of the  persons  currently
serving  as  Director,  Executive  Officers  and  Significant  Employees  of the
Company:


NAME                        AGE            TITLE
Lex M. Cowsert, Ph.D.       57             Chief Executive Officer, President
                                           and Director
                                           Term of office - at will of Board

Randy Moseley               61             Principal Financial Officer
                                           and Director
                                           Term of office - at will of Board

Cy A. Stein, M.D., Ph.D.    56             Director
                                           Term of Office: 2007-2010

John J. Rossi, Ph.D.        62             Director
                                           Term of Office: 2008-2012


DR. LEX  COWSERT  has been the Chief  Executive  Officer  and  President  of the
Company since November 17, 2008. Dr.. Cowsert has over 19 years of experience in
drug discovery and  development.  He is currently a co-founder and serves as the
Chief  Scientific  Officer of  BellairePharma,  Inc.,  founded  in 2007,  and is
co-founder and CSO of  HoustonPharma,  Inc.,  founded in 2005. From 2002 to 2006
Dr. Cowsert served as CSO of Automated Cell, Inc., an  imaging-based  technology
company engaged in drug discovery and  development.  From 2000 to 2002 he was VP
of  Functional  Genomics for  VistaGen  Therapeutics,  Inc.,  a stem  cell-based
technology company engaged in drug discovery and development. From 1989-2000 Dr.
Cowsert  held  a  series  of  positions  of  increasing  responsibility  in  the
scientific and clinical development programs at Isis  Pharmaceuticals,  Inc. Dr.
Cowsert is sole  inventor  on 19 issued US Patents  and a named  inventor on 119
issued US Patents. Dr. Cowsert received his BS in biology from the University of
Florida and earned his PhD in Molecular Biology from Georgetown University.  Dr.
Cowsert completed his post-doctoral  work at the National Cancer Institute where
he successfully competed for and was awarded an NCI Intramural Research Training
Award (1987),  National Research Service Award (1988),  and an NCI Biotechnology
Training Fellowship (1989).

Dr.   Cowsert  has  a  broad  range  of   experience   and   expertise  in  both
entrepreneurial and public company settings including:  technology  development;
drug discovery and development;  regulatory reports;  FDA interactions;  venture
capital and private equity; US and foreign patent applications;  negotiating and
managing industrial and academic  collaborations;  and identifying,  negotiating
and in-licensing  technologies for commercial  development.  He has successfully
applied for and managed SBIR and RO1 government grants.

MR. RANDY  MOSELEY was  appointed  Chief  Executive  Officer and Chairman of the
Board on August 18, 2008 and Principal  Financial Officer on September 18, 2008.
On November 17, 2008,  Mr.  Moseley  relinquished  the Chief  Executive  Officer
position  as the  Company  appointed  Dr.  Lex  Cowsert as the  Company's  Chief
Executive Officer.  Mr. Moseley is also the Chief Financial Officer and Director
( 2007 to present) for Freight Feeder Aircraft Corporation,  a manufacturer of a
freight airplane.  Mr. Moseley is also a director,  Executive Vice President and
Chief  Financial  Officer of Urban  Television  Network Corp.  (OTC BB: UATV), a
network of independent broadcast television stations and cable operators; he has
served Urban Television in various offices and as a director since 2001. In 2005
and 2006, Mr. Moseley served as Executive Vice President and the Chief Financial
Officer for The Furia Organization,  Inc. (OTC BB: FURA). From 1999 to 2001, Mr.
Moseley  served as Executive  Vice  President  and Chief  Financial  Officer for
Tensor Information  Systems,  Inc., a private Fort Worth company in the business
of developing custom software applications. From1993 to 1999, Mr. Moseley served
in the same capacity for American Independent Network Corporation,  a Fort Worth
based public company that provided generic programming to independent television
stations across the country. Mr. Moseley, a Certified Public Accountant,  earned
a BBA degree from  Southern  Methodist  University.  He is a member of the Texas
Society of CPAs and the AICPA.

CY A. STEIN, M.D., PH.D. Dr. Stein is currently  Professor of Medicine,  Urology
and Molecular Pharmacology in the Oncology Department of Albert Einstein College
of Medicine, New York. In addition to his clinical and faculty activities, he is
co-editor-in-chief of Oligonucleotides, sits on seven editorial advisory boards,
serves  on  eight  scientific  advisory  boards  and is an ad hoc  reviewer  for
numerous  peer  reviewed  journals.  He has authored 115 peer  reviewed  journal
articles. He has written 75 book chapters,  reviews and editorials, and he holds
13 patents  issued and a patent  pending.  He attended  Brown  University  (BA),
Stanford  University  (PhD in Organic  Chemistry),  Albert  Einstein  College of
Medicine (MD), and New York  Hospital-Cornell  Medical  Center  (Internship  and
Residency in Internal  Medicine).  Dr Stein was a Clinical  Associate and Senior
Staff Fellow at The National Cancer Institute, Bethesda, Maryland.


                                       39
<PAGE>

JOHN J. ROSSI, PH.D.,  Associate Director for Laboratory Research,  City of Hope
Comprehensive  Cancer Center.  Dr. Rossi began his employment  with City of Hope
(COH) in 1980 as an assistant  research scientist in the Department of Molecular
Genetics.  He was  promoted to chairman of the  Division of Biology in 1992.  In
1993,  COH bestowed  its highest  honor upon him by naming him to its Gallery of
Medical and  Scientific  Achievement  for his  pioneering  work at the molecular
level in the battle  against AIDS and other major  diseases.  In 1998, Dr. Rossi
was  appointed  as the Dean of the City of Hope  Graduate  School of  Biological
Sciences.  Dr. Rossi is an expert in ribozymes (molecular scissors).  One of his
most notable  projects is in the area of ribozyme  research in AIDS.  He led the
research team that first suggested applying ribozymes to treat HIV. His research
in molecular  genetics and  microbiology  has  resulted in eight  patents  being
granted  and has served as the basis for more than 120  scientific  papers.  Dr.
Rossi  received his  bachelor's  degree from the University of New Hampshire and
earned his doctorate at the University of  Connecticut.  Prior to his working at
COH, Dr. Rossi completed four years of post Ph.D.  training at Brown  University
in Providence, Rhode Island.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities  Exchange Act of 1934, as amended (the "Exchange
Act") requires the Company's  officers,  directors and persons who own more than
10% of the  Company's  common stock to file reports of ownership  and changes in
ownership with the SEC.

Officers, directors and greater than 10% stockholders are required by regulation
to furnish  the Company  with copies of all forms they file  pursuant to Section
16(a) of the Exchange Act.

We have reviewed the Section 16(a) filings made in connection with the Company's
stock.  We believe that all persons subject to Section 16(a) of the Exchange Act
in connection with their relationship with us have complied on a timely basis.

CORPORATE GOVERNANCE

The Company has  adopted a Code of Business  Conduct and Ethics that  applies to
all of the Company's officers, directors and employees,  including our principal
executive officer, principal financial officer and principal accounting officer.
The  Company's  Code  of  Business  Conduct  and  Ethics  covers  all  areas  of
professional  conduct  including,  but not limited to,  conflicts  of  interest,
disclosure obligations,  insider trading,  confidential information,  as well as
compliance  with all laws,  rules and  regulations  applicable  to the Company's
business.  If the Board adopts an amendment  to the  Company's  Code of Business
Conduct   and  Ethics   (other   than   technical,   administrative,   or  other
non-substantive  amendments)  that  applies  to any of the  Company's  executive
officers (including the principal executive officer, principal financial officer
and  principal  accounting  officer) or  directors,  the Company  will post such
information on its website.

A copy of the  Company's  Code of  Business  Conduct and Ethics is posted on its
website at www.cytogenix.com. To obtain a copy of the Company's Code of Business
Conduct and Ethics,  without charge,  any person may submit a written request to
the Company, c/o Corporate Secretary, CytoGenix, Inc., 3100 Wilcrest, Suite 140,
Houston, Texas 77042.

AUDIT COMMITTEE
The Company  does not have an audit  committee.  The entire  Board of  Directors
instead acts as the Company's audit committee.  Our Board does not have an audit
committee  financial  expert as defined by  Securities  and Exchange  Commission
rules.

The Company has not yet  adopted a written  procedure  for the review of Related
Party Transactions. The Board of Directors was responsible in 2007 for reviewing
transactions,  series of  transactions  or proposed  transactions  involving the
Company  and a  related  person,  which  includes  our  executive  officers  and
directors,  or any  member of his or her  immediate  family.  The CGC will begin
reviewing  such  transactions  in 2008.  Examples  of the types of  transactions
reviewed  include  payments  made by the Company  directly  to a related  person
(other  than in their  capacity as a director  or  employee)  or to an entity in
which the related person serves an officer, director, employee or owner, and any
other  transaction  where a  potential  conflict  of  interest  may  exist.  Any
transactions  identified are evaluated based on the requirements as set forth in
Item 404 of Regulation S-K of the rules of the Securities & Exchange Commission.
The Board of Directors has conducted  the review  procedure  with respect to the
year ended  December 31, 2007 and has  determined  that there are no  reportable
related party transactions.

ITEM 11. EXECUTIVE COMPENSATION

SUMMARY OF EXECUTIVE COMPENSATION FOR 2008

The following table sets forth information for the years ended December 31, 2008
and 2007  regarding  the  compensation  of the  President  and  Chief  Executive
Officer, the Chief Financial Officer, and our three next most highly compensated
executive  officers  during 2008. (As noted in the  Compensation  Discussion and
Analysis, we refer to these persons as our Named Executive Officers.)


                                       40
<PAGE>
<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------------
         Executive             Year           Base         Bonus        Stock        Options       All Other     Total
     Name and Principal                      Salary                    Awards(7)     Awards7      Compensation
                                              ($)           ($)           ($)          ($)             ($)        ($)
------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                             <C>
Malcolm Skolnick,
President, CEO and           2008(1)        227,500          -             -            -                -      227,500
Chairman to the Board        2007(2)        240,000          -             -            -                -      240,000
------------------------------------------------------------------------------------------------------------------------
Lex Cowsert, President,
CEO, Director                2008(3)         15,000          -             -            -           27,750      42,750

------------------------------------------------------------------------------------------------------------------------
Randy Moseley,
Principal Financial          2008(4)         30,000          -             -            -                -       30,000
Officer, Director
------------------------------------------------------------------------------------------------------------------------
Greg Taylor,
Vice President of Finance,   2008(5)        105,000          -             -      305,688          272,500      683,188
CFO and Treasurer            2007(6)         54,000          -    150,000(7)      439,620           52,400      696,020
------------------------------------------------------------------------------------------------------------------------
Cindee Ewell,
Vice President -Legal,       2008(8)        115,050          -             -            -          183,899      298,949
Corporate Secretary(9)
------------------------------------------------------------------------------------------------------------------------
Yin Chen,
Vice President of Research   2008(10)        78,490          -             -            -                -       78,490
and Development and CSO        2007         137,500          -             -            -                -      137,500

------------------------------------------------------------------------------------------------------------------------

(1) Of the $227,500, Dr. Skolnick has .not yet been paid $211,000 to which he is
entitled as compensation for his employment by the Company in 2008. Dr. Skolnick
resigned his position as Chairman of the Board,  President  and Chief  Executive
Officer on August 18, 2008.  On April 24, 2009 Dr.  Skolnick  executed a Release
Agreement in which he forfeited the unpaid amount.

(2) Of the $240,000,  Dr.  Skolnick has not yet been paid $64,000 to which he is
entitled as compensation for his employment by the Company in 2007. On April 24,
2009, Dr. Skolnick executed a Release Agreement in which he forfeited the unpaid
amount.

(3) Of the  $15,000,  Mr.  Cowsert has not yet been paid  $12,000 to which he is
entitled as compensation for his employment by the Company in 2008.

(4) Of the  $30,000,  Mr.  Moseley has not yet been paid  $27,000 to which he is
entitled as compensation for his employment by the Company in 2008.

(5) Of the  $105,000,  Mr.  Taylor has not yet been paid  $68,750 to which he is
entitled as compensation for his employment by the Company in 2008.

(6) Greg Taylor  became chief  financial  officer in September  2007.  All other
compensation  represents  amounts  paid to Mr.  Taylor  as a  Consultant  to the
Company prior to joining the Company.

(7) Represents the dollar value recognized in the indicated year as compensation
expense for financial  statement  reporting  purposes of  restricted  shares and
options  awarded  in that  year or  earlier.  See  Note 10 - STOCK  OPTIONS  AND
WARRANTS, to our Notes to Consolidated Financial Statements for a description of
the  assumptions  made in the  valuation of the  restricted  shares and options.
Options to acquire  3,400,000 shares of common stock were granted to Greg Taylor
on November 12, 2007 under the 2003 Stock Option Plan.  As of December 31, 2008,
approximately  two-thirds  of these  options had  vested.  The fair value of the
stock award was determined by the closing price of $0.30 per share on August 31,
2007, the date the employment agreement was executed.

 (8) Of the $115,050,  Mrs. Ewell has not yet been paid  $92,512.50 to which she
is entitled as compensation for her employment by the Company in 2008.

(9) Mrs. Ewell resigned as Vice President - Legal Affairs and Secretary on March
22, 2009.

(10) Of the  $78,490,  Mr.  Chen has not yet been  paid  $60,156  to which he is
entitled as  compensation  for his  employment by the Company in 2008.  Mr. Chen
resigned as Vice  President  of Research  and  Development  and CSO on August 7,
2008.


                                       41
<PAGE>

EXECUTIVE EMPLOYMENT AGREEMENTS

The Company uses employment agreements only in very select cases, generally when
it is  necessary  to  secure  the  services  of an  existing  or a  newly  hired
executive.  As of December  31,  2008,  the  Company  has only three  employment
agreements;  one with  President  and CEO, Lex Cowsert  which  became  effective
November 12, 2008, one with its Vice President of Finance and Administration and
CFO,  Greg Taylor,  which became  effective  September 1, 2007 and the third one
with its Vice President-Legal  Council, which became effective July 3, 2008. Ms.
Ewell resigned as Vice President  -Legal Council on March 22, 2009. The Board of
Directors  passed a  resolution  in August  2008 that  stopped  the  accrual  of
compensation for the Company's employees at that time. In September of 2008, the
Board of Directors reinstated the accrual and payment if funds are available for
its Vice  President-Legal  Council and two lab technicians.  As the date of this
Form 10-K, these three employees are no longer employed by the Company.

The Company  entered  into a six month  employment  agreement  with Dr.  Cowsert
effective  November 12, 2008 specifying:  a base salary of $10,000/month for six
months,  subject to  adjustments  with an option to convert  deferred  salary to
common  stock based on a 30 day moving  average  should the Company not have the
funds to pay his  salary;  a hiring  bonus of  500,000  shares of the  Company's
common stock at a purchase price of $0.001/share;  benefits as provided to other
officers and directors of the Company;  and a housing  allowance of $1,600/month
for six months.

On April 17, 2008,  CytoGenix,  Inc. (the  "Company")  entered into an "at will"
employment agreement ("Employment  Agreement") with its Chief Financial Officer,
Greg S.  Taylor,  as  contemplated  by the  Employment  Letter (the  "Employment
Letter")  effective  September  1,  2007.  Under  the  terms  of the  Employment
Agreement,  Mr.  Taylor's  employment  will be at-will and the employment may be
terminated  at any  time,  with or  without  cause,  by  either  Mr.  Taylor  or
CytoGenix.  The employment agreement stated that Mr. Taylor would receive (i) an
initial  annual  base  salary of  $180,000;  (ii) a  restricted  stock  grant to
purchase  500,000  shares of  CytoGenix's  common  stock at a purchase  price of
$0.001 per share;  (iii) an option to  purchase  3,400,000  shares of  CytoGenix
common stock at a price per share equal to the fair market value of  CytoGenix's
common  stock at the date of grant,  vesting  over four years with 33.3% of such
option shares vesting on the date of grant and  thereafter  33.3% of such option
shares vesting at the first and second anniversaries of the date of grant.

The  Company's  Board of Directors  has made the  determination  that Mr. Taylor
effectively  terminated his employment  agreement at the end of August 2008 when
he ceased  reporting to work and not  contributing his services in preparing and
filing of quarterly  Securities and Exchange quarterly reports and the financial
management of the Company.

OUTSTANDING GRANT AWARDS AT FISCAL YEAR-END

The following  sets forth  information  regarding the grants of stock options in
2008 to our named executives. (1)

------------------------------------------------------------------------------------------------------------
                                            All Other Stock
                                            Awards: Number     Number of                   Grant Date Fair
                                             of Shares of      Underlying     Exercise     Value of Stock
        Executive                           Stock or Units      Options        Value         and Option
    Name and Principal       Grant Date         (#)               (#)        ($/Share)        Awards ($)
------------------------------------------------------------------------------------------------------------
Lex Cowsert, President,
CEO, Director
                            Nov 17, 2008        500,000            -            $0.001         $22,500
------------------------------------------------------------------------------------------------------------
Cindee Ewell,
Vice President - Legal
Council                     July 3, 2008       3,000,000           -            $0.06         $177,899
------------------------------------------------------------------------------------------------------------

(1) These  columns  show the  restricted  stock  grants  and  warrant  awards as
described in the in the Compensation  Discussion and Analysis. The dollar amount
recognized  by us for these awards in 2008 is shown in the Summary  Compensation
Table  in  the  column  entitled  "Other   Compensation,"  and  their  valuation
assumptions are referenced in footnote 5 of that table.

OPTIONS HELD AT YEAR END

The following presents information  concerning outstanding equity awards held by
the named executive officers as of December 31, 2008.


                                       42
<PAGE>

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

-------------------------------------------------------------------------------------------------------------------
                                                                   Option Awards
-------------------------------------------------------------------------------------------------------------------
Named Executive                    Number of Securities    Number of Securities  Option Exercise       Option
                                  Underlying Unexercised      Underlying         Price ($/share)   Expiration Date
                                  Options (#) Exercisable  Unexercised Options
                                                            (#) Unexercisable
-------------------------------------------------------------------------------------------------------------------
Cindee Ewell, Vice President -            3,000,000                  -                 $0.06          07/03/18
Legal, Corporate Secretary
-------------------------------------------------------------------------------------------------------------------
Greg Taylor,
Vice President of Finance, CFO and
Treasurer                                 2,266,666              1,333,334(1)          $0.27          09/12/17
-------------------------------------------------------------------------------------------------------------------

(1) The options were granted  pursuant to the CytoGenix,  Inc. 2003 Stock Option
Plan  vesting  over a two year period,  with  one-third  of the awarded  options
vesting at the date of grant,  another one-third on the first anniversary of the
grant date and another one-third on the second anniversary of the grant date.

COMPENSATION OF DIRECTORS

The Company pays directors who are not employees annual compensation for 2008 as
set forth the following  table for attending  Board of Director  meetings  which
primarily  comprises cash compensation,  but has at times included  compensation
with stock options.  The Board of Directors may also make  discretionary  option
grants to its  non-employee  directors  under the Company's  2003 and 2005 Stock
Option Plans.

-----------------------------------------------------------------------------------------------
                                                     Compensation
-----------------------------------------------------------------------------------------------
     Named Director         Year          Cash        Stock       Options     Total Earnings
                           Earned         ($)         Awards        (1)            ($)
-----------------------------------------------------------------------------------------------
Raymond L. Ocampo Jr.       2008        $12,623         $0        $29,575         42,198
-----------------------------------------------------------------------------------------------
Scott E. Parazynski, MD     2008        $12,623          0        $29,575         42,198
-----------------------------------------------------------------------------------------------
John J. Rossi, PhD          2008        $39,291          0        $29,575         68,866
-----------------------------------------------------------------------------------------------
Cy A. Stein, MD, PhD        2008        $29,291          0        $29,575         58,866
-----------------------------------------------------------------------------------------------
</TABLE>

(1) Represents Black Sholes valuation calculation for 500,000 options granted to
Directors in 2nd quarter of 2008.


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

SECURITY OWNERSHIP OF PRINCIPAL HOLDERS

The  following  table sets forth the name and address,  as of March 28, 2009 and
the  approximate  number of shares of Common Stock of the Company owned directly
and holding more than 5% of the Company's  Common  Stock.  The amounts set forth
are based solely on the Company's record holder list as neither holder has filed
with the SEC any document  under  Section 13 of the  Securities  Exchange Act of
1934.


--------------------------------------------------------------------------------
 Name and Address of                  Number of Shares Held     Percent of Class
  Beneficial Owner
--------------------------------------------------------------------------------
KV Mechanical Construction and              12,762,208               8.2%
Restoration Company, Inc.
275 Park Avenue,
East Hartford, Connecticut 06108
--------------------------------------------------------------------------------


                                       43
<PAGE>
<TABLE>
<CAPTION>

SECURITY OWNERSHIP OF MANAGEMENT

The following  table sets forth the  beneficial  ownership of Common Stock as of
March  28,  2009,  by (i)  the  executive  officers  set  forth  in the  summary
compensation  table  below who are  employed by the Company as of March 28, 2009
(the  "Named  Executives");  (ii)  each  director  and  nominee;  and  (iii) all
directors  and  executive  officers  as a group.  All  persons  listed have sole
disposition  and voting power with  respect to the  indicated  shares  except as
otherwise noted.

---------------------------------------------------------------------------------------------------------
   Name Executive / Director (1)     Number of Shares Held   Number of Option    Percent of Class (2)
                                                                Equivalents
---------------------------------------------------------------------------------------------------------
<S>                                                                              <C>
Lex Cowsert                                                      500,000          *
---------------------------------------------------------------------------------------------------------
Randy Moseley                             485,000                      0          *
---------------------------------------------------------------------------------------------------------
Greg Taylor                               500,000              2,266,666        1.7%
---------------------------------------------------------------------------------------------------------
John Rossi                                 16,016                500,000          *
---------------------------------------------------------------------------------------------------------
Cy Stein                                   40,468                500,000          *
---------------------------------------------------------------------------------------------------------
All directors and executive             1,041,484              3,766,666         2.9%
officers as a group (total of 8
persons)
---------------------------------------------------------------------------------------------------------
</TABLE>

*Less than 1% of the 167,071,257 shares outstanding at March 28, 2009.

 (1) Beneficial ownership is determined in accordance with the rules of the SEC,
based on factors  including  voting and investment power with respect to shares.
Percentage  of  beneficial  ownership is based on the number of shares of Common
Stock outstanding as of March 28, 2009.

(2) Stock issuable upon exercise of options within 60 days after March 28, 2009,
are deemed  outstanding  for the purpose of  percentage  ownership of the person
holding  such  options,  but  are  not  deemed  outstanding  for  computing  the
percentage ownership for any other persons.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the year ended December 31, 2008, Capital Equity Partners,  LLC, of which
the Company's Chairman of the Board and Principal Financial Officer is a member,
advanced the Company  approximately  $105,000 and  purchased  283,333  shares of
restricted common stock for $17,000.

In January 2008, the Company  entered into a loan agreement to borrow money from
KV  Mechanical   Construction  and  Restoration  Company,   Inc.  KV  Mechanical
Construction and Restoration Company,  Inc. is a significant  shareholder of the
Company owning  approximately  6.1% of the Company's common stock. The principal
amount of the loan is $300,000 with an annual interest rate of 24%. During 2008,
the $300,000  note plus accrued  interest of $48,102 was  converted to 5,801,705
shares of the Company's common stock.


ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES

AUDIT FEES; CHANGES IN ACCOUNTANTS FEES AND EXPENSES OF INDEPENDENT ACCOUNTANTS

The  following  table sets forth the amount of audit fees,  audit  related  fees
billed or expected to be billed by LBB & Associates  LTD.,  LLP, our independent
auditors, for the years ended December 31, 2008 and 2007, respectively:


-------------------------------------------------------------------------
                                         2008                2007
-------------------------------------------------------------------------
Audit Fees(1)                          $99,835              $33,920
-------------------------------------------------------------------------
Audit-Related Fees                        0                    0
-------------------------------------------------------------------------
All Other Fees                            0                    0
-------------------------------------------------------------------------
TOTAL Fees                             $99,835              $33,920
-------------------------------------------------------------------------

(1) Includes the annual financial  statement audit,  review of quarterly reports
on Form 10-Q and other services  associated with the audit.  Audit fees for 2007
include  fees  incurred  for  the  audits  of  management's  assessment  of  the
effectiveness   of  internal   controls   over   financial   reporting  and  the
effectiveness of internal controls over financial reporting.


                                       44
<PAGE>

BOARD POLICY ON PRE-APPROVAL OF PERMISSIBLE NON-AUDIT SERVICES
The  Board  of  Directors   requires   management  to  seek  Board  of  Director
pre-approval for the engagement of an independent  public  accountant to perform
audit,  audit-related and non-audit  services.  The Company's Board of Directors
approved the engagement of The Hall Group, CPA's on March 2, 2009.

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS

EXHIBITS

 EXHIBIT
 NUMBER                         DESCRIPTION
 ------                         -----------

3.1    Articles of Incorporation of Cryogenic Solutions,  Inc.  (incorporated by
       reference to exhibit 3.1 to the  registrant's  registration  statement on
       Form 10-SB, as amended (File No. 000-26807),  filed with the Securities &
       Exchange  Commission  ("SEC")  initially  on July  23,  1999  the  ("Form
       10-SB").

3.2    Certificate   of  Amendment   dated  November  1,  1995  of  Articles  of
       Incorporation of Cryogenic Solutions,  Inc. (incorporated by reference to
       exhibit 3.2 of the Form 10-SB).

3.3    Certificate   of  Amendment   dated  January  13,  2000  of  Articles  of
       Incorporation  of CytoGenix,  Inc.  (incorporated by reference to exhibit
       3.3 of the Form 10-SB).

3.4    Certificate of Amendment dated March 7, 2001 of Articles of Incorporation
       of  CytoGenix,  Inc.  (incorporated  by  reference  to  Annex  II of  the
       definitive proxy statement on Schedule 14A filed with the SEC on December
       23, 2003).

3.5    Certificate of Amendment dated April 6, 2004 of Articles of Incorporation
       of  CytoGenix,  Inc.  (incorporated  by  reference  to Exhibit 3.5 to the
       registrant's  Form 10-KSB for the year ended December 31, 2003 filed with
       the SEC on April 14, 2004).

3.6    Bylaws of Cryogenic Solutions,  Inc (incorporated by reference to exhibit
       3.4 of the Form 10-SB).

3.7    Amendments to Bylaws of  CytoGenix,  Inc.  (incorporated  by reference to
       Annex I of the definitive  proxy statement on Schedule 14A filed with the
       SEC on December 23, 2003).

10.1   Employment  Agreement  dated January 1, 2005 between  CytoGenix,Inc.  and
       Malcolm H.  Skolnick  (incorporated  by  reference to exhibit 10.1 of the
       Form 10-K/A for Year ended  December  31, 2005 filed with the SEC Inc. on
       April 21, 2006).

10.2   License  Agreement dated February 3, 2000,  between  CytoGenix,  Inc. and
       PharmaGenix,  LLC. (incorporated by reference to exhibit 10.3 of the Form
       10-SB).

10.3   Technology  Transfer  Agreement  dated June 26,  1998  between  Cryogenic
       Solutions,  Inc. and InGene,  Inc.  (incorporated by reference to exhibit
       10.4 of the Form 10-SB)

10.4   Sponsored Research  Agreement between CytoGenix,  Inc. and Baylor College
       of Medicine as of March 1, 2000  (incorporated  by  reference  to exhibit
       10.7 of the Form 10-SB).

10.5   Stock  Option  Plan  (incorporated  by  reference  to  Annex  III  of the
       definitive proxy statement on schedule 14A filed with the SEC on December
       23, 2003).

10.6   Stock Option Plan (incorporated by reference to Annex I of the definitive
       proxy statement on schedule 14A filed with the SEC on June 17, 2005).

10.7   Supply  Agreement dated March 22, 2006,  between  CytoGenix,  Inc. and GE
       Healthcare Bio-Science Corporation  (incorporated by reference to Exhibit
       10 to the  registrant's  current report on Form 8-K filed with the SEC on
       March 28, 2006).

31.1*  Certifications of Principal  Executive Officer pursuant to Rule 13a-14(a)
       of the Securities Exchange Act of 1934, the "Act".

31.2*  Certifications of Principal  Financial Officer pursuant to Rule 13a-14(a)
       of the Act".


                                       45
<PAGE>

32.1*  Certifications  of  Principal  Executive  Officer  pursuant  to 18 U.S.C.
       Section 1350.

32.2*  Certifications  of  Principal  Financial  Officer  pursuant  to 18 U.S.C.
       Section 1350.

o      Filed herewith


                                   SIGNATURES

In accordance with Section 13 or 15(d) Exchange Act, the registrant  caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

                                       CYTOGENIX, INC.

                             By:       /s/ Lex Cowsert
                                       -----------------------------------------
                                       LEX COWSERT, PH.D.
                                       PRESIDENT AND CHIEF EXECUTIVE OFFICER

Date: May 15, 2009

In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  registrant and in the capacities and on the
dates indicated.

Date: May 15, 2009                  By: /s/ Lex Cowsert
                                      ------------------------------------------
                                      LEX COWSERT, PH.D.
                                      PRESIDENT AND CHIEF EXECUTIVE OFFICER
                                      (PRINCIPAL EXECUTIVE OFFICER AND DIRECTOR)

Date: May 15, 2009                  By: /s/ Randy Moseley.
                                      ------------------------------------------
                                      RANDY MOSELEY
                                      (PRINCIPAL FINANCIAL OFFICER, DIRECTOR)

Date: May 15, 2009                  By: /s/ Cy A. Stein
                                      ------------------------------------------
                                      CY A. STEIN
                                      DIRECTOR

Date: May 15, 2009                  By: /s/ John J. Rossi
                                      ------------------------------------------
                                      JOHN J. ROSSI
                                      DIRECTOR








                                       46