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

                                   FORM 10-K/A
                                 AMENDMENT NO. 1

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

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005

          |_| 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                                   76-0484097
     (State or other jurisdiction of incorporation   (I.R.S. Employer
                    or organization)                   Identification 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 Securties 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|


<PAGE>

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 |_|  Accelerated Filer |_|  Non-accelerated filer  |X|

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,  2005(the last business day of the  Registrant's  most
recently completed second fiscal quarter) was approximately $113,436,970.

The number of  outstanding  shares of the  Registrant's  Common  Stock as of the
close of business on March 16, 2006 was 125,377,370.

                       DOCUMENTS INCORPORATED BY REFERENCE


Selected  portions of the definitive  Proxy Statement of CytoGenix,  Inc., which
will be filed with the Securities and Exchange  Commission within 120 days after
December 31, 2005, are incorporated by reference in Part III of this Form 10-K.




<PAGE>




                                EXPLANATORY NOTE

This  Amendment No. 1 to the Annual Report on Form 10-K of CytoGenix,  Inc. (the
"Company") for the fiscal year ended December 31, 2005 is the result of mistakes
made by the Company in converting its annual report on Form 10-K to edgar format
for filing with the Securities and Exchange Commission and not including changes
to the edgar filing version, including exhibits, the Company intended.

The Company is filing this  Amendment  No. 1 to Annual  Report on Form 10-K (the
"Amendment") to provide amend Item 1. Business,  Item 1A. Risk Factors,  Item 2.
Properties,  Item 5. Market for Registrant's Common Equity,  Related Stockholder
Matters and Issuer Purchases of Equity  Securities,  Item 6. Selected  Financial
Data, Item 7.  Management's  Discussion and Analysis of Financial  Condition and
Results of Operations,  Item 7A. Quantitative and Qualitative  Disclosures About
Market Risk, Item 8. Financial Statements, Item 9B. Other Information,  Item 10.
Directors and Executive  Officers of the  Registrant  and Item 15.  Exhibits and
Financial  Statement  Schedules  . Items 1, 1A, 2, 5, 6, 7, 7A, 8, 9B, 10 and 15
are  presented  herein in their  entirety as amended,  in  accordance  with Rule
12b-15 of the  Securities  Exchange  Act of 1934.  No other  information  in the
original  report is being  amended  by the  Amendment  and the  Company  has not
updated  disclosures  in this  Amendment to reflect any event  subsequent to the
Company's filing of the original report.

                                     PART I

ITEM 1.  BUSINESS

GENERAL OVERVIEW
CytoGenix,  Inc.  ("CytoGenix" or "the Company") is a biopharmaceutical  company
whose primary focus is the development and  commercialization of its proprietary
technology for  identifying  and silencing  disease causing genes and expressing
proteins for applications such as vaccines.  The Company's  technology  includes
gene  silencing  techniques  applicable  to genes from  pathogenic  organisms or
selected  genes  from a host to prevent  the  expression  of  harmful  proteins,
thereby  preventing or  ameliorating  disease.  The Company also has developed a
novel process to produce cell free,  plasmid DNA for use in its own products and
for sale to the biopharmaceutical market. 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 sell and/or
license its  technology to  biotechnology  companies  seeking  determination  of
specific genes' function and purpose 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 only 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  we have
dedicated ourselves to engineering  DNA-based molecules for therapeutic and drug
target identification purposes. Our expertise in nucleic acid technology enables
us to focus on the development of new types of nucleic acid-based  therapeutics.
Our  proprietary  technology  has been designed to express  single  stranded DNA
inside  target  cells of  living  organisms  to  induce  synthetic  DNA  mimetic
constructs  into the target cells and thereby either  silence  selected genes or
express proteins that can act as antigens to stimulate the immune system.

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 from pathogens such as viruses,
bacteria or funguses.  This genetic  activity  causes the  production of harmful
proteins that lead to the symptoms and destructive results of disease.  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 of the DNA code  containing  the  information
necessary  to  produce  the  protein.  This  messenger  RNA (mRNA) is called the



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"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.  Fortunately,  this genetic activity can be
interrupted  and controlled at three levels with the  introduction of a specific
sequence of ssDNA into the cells; at the level of the genome itself, interfering
with the messenger RNA (mRNA)  produced by the genome  leading to the production
of the protein  for which the mRNA is encoded  and at the protein  level where a
single strand of DNA may be made that will bind with the protein and disable it.

CYTOGENIX GENE SILENCING TECHNOLOGY

CYTOGENIX OWNS PATENTED INTRACELLULAR  EXPRESSION SYSTEM TECHNOLOGY (CYGXES(TM))
TO PRODUCE ANY DESIRED  SEQUENCE-SPECIFIC,  SSDNA(SINGLE STRANDED DNA) 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,  a 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" that, after introduction into the cell, actually
produces many copies of specific  ssDNA  molecules in the cell.  The business of
CytoGenix is to refine this  technology  and apply it to the delivery of various
patented DNA molecules for the development of effective therapeutic drugs.

DEVELOPMENT 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. This breakthrough  technology
was originally  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.  Shortly  after  acquisition  of  the  foregoing  patent,  worldwide
protection was pursued by filing two applications  under the Patent  Cooperation
Treaty (PCT)  entitled,  "Enzymatic  Synthesis of ssDNA" (World  Publication No.
WO00/22113),   and  "Production  of  ssDNA  in  vivo"  (World   Publication  No.
WO00/22114).  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.  In  addition  to the
original issued patent,  Cytogenix  currently holds a patent portfolio including
46 domestic and foreign  issued or pending  patent  applications  protecting our
technologies.  This assertive approach to protection of the Company's technology
has enabled  CytoGenix to expand and refine the development of therapeutics  for
human, animal and agricultural use.

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



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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  Antisense
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 to target mRNA using DNA enzyme  formulations.
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 will bind to  specific,  targeted
proteins  to   neutralize   them  and  (iii)   competitively   inhibit   genetic
expression/transcription of targeted genes. The Company has extended the results
achieved in cell cultures to cells in live animals.

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 separate  technology  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.

The Company has also developed a novel technique for producing cell free plasmid
DNA thus bypassing the fermentation  process. The cell free synthesis of plasmid
DNA has numerous  advantages:  CytoGenix,  synthetic DNA (SynDNA(TM)) is free of
the endotoxins, bacteriAL DNA, RNA and proteins that must be laboriously removed
in the fermentation process using live bacteria. More importantly, synthetic DNA
can be  produced  more  rapidly  and less  expensively  than in the  traditional
fermentation method.

In July  2002,  the  Company  inaugurated  a service  geared  towards  assisting
pharmaceutical  and biotech  companies  improve drug  discovery  efficiency.  In
addition to our work on in-house  targets,  we are conducting  pilot studies for
several  companies.  For a fixed fee, we will knockdown a gene in a cell system.
This will confirm the gene's  relevance to the disease of interest.  Those genes
found to be highly  disease-related  become  targets  for new drug or  molecular
therapies.

Using its expanding  technological base, the Company is seeking to develop drugs
that address  significant  and unmet  medical  needs.  The Company is conducting
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 INCLUDE:

INFECTIOUS DISEASE PROGRAM

CY301 (SIMPLIVIR(TM)) anti-herpes topical is anticipated to 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.  Our proprietary  plasmid DNA sequences
turn-off the HSV ICP4 and ICP47 genes. Found in HSV-1, -2 and Herpes Zoster, 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  were  initiated  in August,  2003 and are  continuing.



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Pre-clinical toxicology studies are being designed and will enable the filing of
an   Investigational   New  Drug  (IND)   application   with  the  Food  &  Drug
Administration (FDA) in 2008.

CY401 targets  multi-drug  resistant  bacteria  including  methicillin-resistant
staphylococcus  aureus (MRSA).  Recently,  MRSA strains that had previously been
confined  to  hospitals  are now  appearing  in the  community.  Clinicians  are
encountering difficulty in treating MRSA infections, and CY401 is anticipated to
be a  leading  product  in a  new  class  of  antibacterial  compounds.  Studies
conducted in cell culture indicate that CY401 has potent killing capability even
against the most resistant  bacterial pathogens such as MRSA. Animal testing has
confirmed  this and  CytoGenix is  preparing to conduct the required  safety and
toxicology studies to support the filing of an IND in 2008.

CY403 specifically targets only the staphylococcus species.

INFLAMMATORY DISEASE PROGRAM

CY303 is a topical  anti-inflammatory  product  that  blocks the  activity of an
adhesion  molecule  known as  intercellular  adhesion  molecule  or ICAM-1.  The
initial medical condition for this topical anti-inflammatory product is moderate
to  severe   psoriasis.   Other   medical   conditions   where  CY303  could  be
therapeutically beneficial include contact dermatitis,  acne, decubitus, rosacea
and  joint  swelling.  Studies  to test the  ability  of CY303  to  inhibit  the
expression of ICAM-1 are ongoing and assuming  success,  CY303 will be the third
IND application submitted by CytoGenix.

CANCER PROGRAM


Investigators  have used the Company's  ssDNA  expression  vector  technology to
knockdown cancer genes as part of projects supported by the National  Institutes
of Health Small Business Innovative  Research,  SBIR program.  Some of this work
has progressed to the level of preclinical studies, and success in these studies
will allow progression to clinical applications.


Aerosol Delivery of Anti Metastatic Tumors in Lungs


According        to        information         from        MedLinePLus        at
http://www.nlm.nih.gov/medlineplus/ency/article/000097.htm:  "Metastatic  tumors
in the lungs are malignancies (cancers) that developed at other sites and spread
via the blood stream to the lungs.  Common tumors that  metastasize to the lungs
include breast cancer, colon cancer, prostate cancer,  sarcoma,  bladder cancer,
neuroblastoma,  and Wilm's tumor. However, almost any cancer has the capacity to
spread to the lungs."


The Company has received a federal government grant from the National Institutes
of Health (the National  Cancer  Institute) to support the Company's work with a
researcher at a major medical school who is using the Company's ssDNA expression
vector with a propietary aerosol delivery system against a cancer gene common to
metatastic tumor cells.


Anti- Solid Tumor Gene Therapy


The Company has entered into an agreement with  scientists at a university  gene
therapy center for preclinical  experiments using the company's ssDNA expression
vector  technology  to  silence  a gene that has been  shown to cause  malignant
transformation of tumor cells.


The  combination  of a  proprietary  delivery  technology  and  CytoGenix'  gene
silencing  technology has great  potential for new  treatments of  malignancies,
particularly in breast, head, neck, and prostate tumors.





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NUCLEIC ACID DELIVERY TECHNOLOGY


DNA  delivery  into  cells is a  rapidly  developing  area in gene  therapy  and
biotechnology.   Viral  methods  of  DNA  delivery  are  well-characterized  and
efficient,  but little is known about the toxicity and  immunogenecity  of viral
vectors.  As a result, the Company is continuing  investigation of viral vectors
but  concentrating  its  efforts  on  non-viral,  transfection  methods  of  DNA
delivery.  The Company is  investigating  targeted  delivery using synthetic DNA
delivery  systems  containing   histidine-rich  peptides  and  polypeptides  and
self-assembled delivery systems based on cationic lipids and polymers.


SYNTHETIC DNA PROCESS


Scientists  at  CytoGenix  have  developed a novel  method for  producing  large
amounts of high quality therapeutic circular DNA with significant  reductions in
residual   contaminants   compared   to   traditional    fermentation   methods.
Specifically,  we have  identified  and  optimized  a method  for in  vitro  DNA
synthesis and amplification for the production of good  manufacturing  practices
(GMP) drug substances.


Cell-free  amplification of c-DNA has many important benefits beginning with the
size and  composition  of the plasmid.  Under this system,  there is no need for
bacterial  replication genes or selection  markers such as antibiotic  resistant
genes.  In most cases,  this will reduce the size and weight of the  therapeutic
c-DNA by at least 3,000 base pairs or a molecular weight of approximately  2,000
kilo Daltons.  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.

Greater biological activity

Our experiments have shown that the biological response to c-DNAs with no vector
backbone  is  approximately  one and  one-half  times  higher  than  traditional
plasmids.  Other  investigators have reported greater activity levels of in vivo
studies  using "DNA mini  circles".  At the  molecular  level,  100nano grams of
traditional  plasmid  DNA is  equal  to 60ng of  bacteria-free  c-DNA.  This may
explain the result of our  transfection  experiments  and  suggest  that less in
vitro  synthesized DNA may be required to generate the same biological effect as
its plasmid  counterpart.  In terms of cost, this would translate in substantial
savings.

Low risk, low cost and fast cycle time

Our novel process is bench-scale and requires little  equipment,  space or human
intervention in comparison to bioprocess manufacturing facilities. No cell banks
are needed and no yield  optimization  steps that can add weeks or months to the
production process. This process lends itself to liquid-handling  automation and
one  technician can  synthesize  gram  quantities in a matter of days working in
custom  manufacturing  suites. The capital costs for physical plant and on-going
fixed and variable operating expenses are a fraction of the costs of large-scale
bioprocess  methods.  We  believe  that  this  synthetic  process  will  be more
consistent,  yield material of higher purity, and will enable delivery of higher
concentrations of Active Pharmaceutical Ingredient (API) if needed.

Improved regulatory profile

Benefits provided by the cell-free synthesis from a regulatory agency review and
compliance  perspective are significant.  By beginning with a well-characterized
synthetic  master  construct,  there is no need for cell bank systems (master or
working cell banks),  thus reducing the risk and amount of documentation,  space
and cost. Similarly, product cGMP manufacturing procedures detailing methods for
cell collection,  processing and culture conditions would no longer be necessary
and would  substantially  reduce quality  assurance and quality control ( QA/QC)
and  compliance  overhead  costs.  The synthetic DNA process  yields DNA free of
endotoxins,  bacterial  genomic DNA, DNA or proteins.  As such it may  encounter
improved regulatory acceptance.




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Cytogenix  is  carrying  out a  multi-pronged  strategy  with the  objective  of
commercializing  this technology within the next year. The following  summarizes
our plans:

     o    PROCESS  OPTIMIZATION  AND  SCALE-UP,   continued  experimentation  to
          achieve yield  optimization,  reduced reagent usage and reduced costs.
          Manufacture milligram quantities consistently,  conduct several animal
          studies  with  various  plasmids  to  verify  bioactivity  equal to or
          greater than plasmids  produced via traditional  methods.  Scale-up to
          produce gram quantities.

     o    DEVELOP REAGENT SUPPLIERS AND SOURCING,  establish  relationships with
          manufacturers of enzymes. Develop quality parameters.

     o    CONSTRUCT  CGMP  PRODUCTION  SUITE,  build  and  equip a  side-by-side
          manufacturing suite for simultaneous production of batches cGMP pDNA.

     o    BUSINESS DEVELOPMENT, we are currently evaluating options for industry
          partnership  for  continued   development  of  the  process  including
          contract manufacturing

All primary  research and  development  at CytoGenix is conducted in the on-site
laboratory  located adjacent to the executive  offices at the same address.  The
Company's  primary  research and development  experiments are being conducted in
human lung cancer  cells (A549  cells) and human  liver cells  (HepG2  cells) to
determine  the   expression   levels  of   single-stranded   catalytic  DNA  and
single-stranded Antisense DNA targeting c-raf kinase mRNA transcripts, bcl-2mRNA
transcripts, and mouse double minute oncogene 2 (MDM2) MRNA transcripts

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

   1.    Dr. Cy Stein's  lab at Albert  Einstein  College of  Medicine  is using
         Cytogenix's  proprietary  gene silencing DNA technology  against a gene
         found in melanoma cells that produces a protein known to counteract the
         effect  of  several  chemotherapeutic  agents  in  difficult  to  treat
         cancers.

   2.    Dr.  Frank  Orson's lab at Baylor  College of  Medicine  is  conducting
         animal trials to determine  the effect of  CytoGenix's  gene  silencing
         technology  on cancer in the lungs of mice using  aerosol gene delivery
         system.

   3.    Dr. Jeffrey Actor's lab at University of Texas Health Science Center in
         Houston  is  conducting  animal  trials  to  determine   efficacies  of
         CytoGenix's antimicrobial ODN compounds.

   4.    Dr. David  Weiner's lab at  University  of  Pennsylvania  is conducting
         animal  trials to determine  efficacies  of  CytoGenix's  synthetic DNA
         vaccines against Smallpox and other targets.

Other research is contemplated to explore various plasmid delivery systems.

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


     1.   Tan, X. & Chen,  Y., A novel  genomic  approach  identifies  bacterial
          DNA-dependent  RNA  polymerase  as  the  target  of  an  antibacterial
          oligodeoxynucleotide, RBL-1 Biochemistry, 2005 (in press).

     2.   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,
          (submitted), 2005.

     3.   Tan, X, & Chen, Y.  Discovery of novel  antibiotics  using  cell-based
          screening (Review), Current Drug Discovery, pp. 21-23, April, 2004.

     4.   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.

     5.   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.




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<PAGE>

     6.   Chen, Y. and McMicken, H. Intracellular  production of DNA enzyme by a
          novel   single-stranded   DNA   expression   vector,   Gene   Therapy,
          10:1776-1780, 2003.

     7.   Chen, Y. , Ji, Y., and Conrad, C. Expression of single-stranded DNA in
          mammalian cells, Biotechniques, 34:167-171, 2003.

     8.   Chen,  Y.,  Novel   Technologies   for  target   validation,   Genetic
          Engineering   News,   23(11):7-9,   2003.   9.   Chen,   Y.  A   novel
          single-stranded DNA (ssDNA) expression vector (Review), Expert Opinion
          on Biological Therapy, 2:735-740, 2002.

     10.  Chen, Y. Meeting  highlights,  10th  International  conference on gene
          therapy of cancer,  Expert Opinion on Biological  Therapy,  2:443-445,
          2002.

     11.  Chen, Y., Growth of oligo-based drugs, Genomics & Proteomics, October,
          2002.

     12.  Datta, H., and Glazer, P. Intracelullar  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.

     13.  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.

OUR BUSINESS STRATEGY

The goal and the focus of the Company are to leverage its proprietary technology
to maximize investor value. The Company is developing skin creams that should be
safer and more effective than systemic  drugs (pills) for these  diseases.  Upon
successful completion of Phase I/II clinical trials, the Company intends to seek
distribution agreements with domestic and foreign pharmaceutical companies.

     o  We intend to independently develop oligonucleotide  mediated therapeutic
        applications in several disease areas.
     o  We will pursue  partnerships with other  pharmaceutical or biotechnology
        companies to develop DNA expression-based therapeutics.
     o    We  will  seek  to  maintain  and  expand  our  patent  portfolio  and
          proprietary technology.  We aggressively o pursue patent protection to
          maintain worldwide rights relating to the development, manufacture and
          sale of  oligodeoxynucleotide  mediated  therapeutics  and gene target
          validation.
     o    We intend to leverage our ligonucleotide  expertise through licensing,
          process development and pilot  manufacturing.  We believe that we have
          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.  We believe that we will be able to
          capitalize on our 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  our  own  drug
          development.

COLLABORATIVE AGREEMENTS

PARTNERSHIPS


The Company  currently has several industry and government  agency  partnerships
and is actively  seeking  out-licensing  opportunities in the application of our
core technologies to promote the development of new therapeutic  products in the
fields of  infectious  diseases,  inflammation  and  cancer.  CytoGenix  is also
seeking  partnerships  in the  development  of  products  in the areas of animal
health  and  agriculture.  Our  cell-free  method  for the  cGMP  production  of
therapeutic-grade  DNA is also  available for  licensing.  Our current  partners
include:



                                       7
<PAGE>



GE HEALTHCARE, FAST TRAK BIODEFENSE GROUP


CytoGenix has entered into an agreement with the Fast Trak  BioDefense  Group of
GE  Healthcare to  collaborate  in seeking,  securing and executing  bio-defense
related Federal contracts. GE Healthcare will provide highly qualified technical
and regulatory affairs expertise and will coordinate the application  process to
various departments within the U.S. government.


ALDEVRON, LLC.


CytoGenix  has  teamed  up with  Aldevron  LLC,  a  leader  in the  field of DNA
vaccines, to evaluate a synthetic DNA vaccine derived from a plasmid provided by
Aldevron.  The  synDNA(TM)  vaccine was  designed to produce a Hepatitis B viral
surface antigen and was evaluated in A rabbit model using Aldevron's proprietary
Genetic  Immunization  and Antibody  (GIA(TM))  technology.  The pilot study was
successful aND further testing is ongoing.


COLLABORATIONS


The Company currently has several academic and government agency  collaborations
to promote the research and development of new therapeutic products. Our current
collaborators include:


NATIONAL INSTITUTES OF HEALTH


CytoGenix was given a non-exclusive license to a HIV DNA vaccine construct to be
used as a proof of  principle  for the  synDNA  production  method.  The HIV DNA
vaccine  construct was prepared  using  CytoGenix'  proprietary  process and the
product was tested in an animal  model.  The results of this pilot study  showed
bioactivity  indicating  that the  synthetic  DNA  vaccine was able to induce an
immune response.  Further  investigations are currently being explored to expand
this collaboration.


BAYLOR COLLEGE OF MEDICINE


Several collaborative  projects are ongoing with investigators at Baylor College
of  Medicine in the Texas  Medical  Center.  A long  standing  collaboration  is
ongoing with Drs.  Sheldon Kaplan,  Ed Mason and Jesus Vallejo in the Infectious
Disease Group of the Department of Pediatrics. The focus of the project has been
to identify  clinical  candidates  for the  treatment  of  methicillin-resistant
staphylococcus aureus (MRSA).


Another collaboration is ongoing with Dr. Frank Orson to evaluate the effects of
several DNA  vaccines in  preclinical  models.  The goal of these  studies is to
identify a novel DNA vaccine for the  treatment of  influenza  in human  beings.
Preliminary  studies  have  shown that a  synDNA(TM)  influenza  vaccine  was of
greater potency than a standard  plasmid in generating an immunologic  responsE.
Research  continues to apply the  information  learned from the pilot studies to
design and  produce a  synDNA(TM)  vaccine to be used in tHE event of a pandemic
outbreak of influenza.


UNIVERSITY OF TEXAS HEALTH SCIENCE CENTER AT HOUSTON


CytoGenix has several ongoing collaborations with the University of Texas Health
Science Center at Houston.  The Company has entered into an agreement to provide
access to animal  care  facilities  to allow  CytoGenix  scientists  to  conduct
exploratory  studies for product  leads.  CytoGenix has also worked  extensively
with  Dr.  Jeffrey  Actor  to  identify  novel  product  candidates  for  use in
infectious disease applications.


UNIVERSITY OF PENNSYLVANIA


Recently  CytoGenix  added a University  of  Pennsylvania  scientist,  Dr. David
Weiner,  to the Scientific  Advisory Board. Dr. Weiner is a pioneer and is world



                                       8
<PAGE>

recognized in the field of DNA vaccines and several  collaborative  projects are
ongoing in the areas of smallpox  and  influenza.  A pilot study  conducted in a
murine model  demonstrated that a synDNA vaccine  targeting  smallpox was highly
immunogenic.

Technology - Sponsored Research

It is the  policy of the  Company to seek  outstanding  scientific  leaders  and
independent  investigators as collaborators in mutually beneficial projects. The
following projects are sponsored in part by the company:

o        DR.  JEFFERY  ACTOR,  ASSOCIATE  PROFESSOR AT THE  UNIVERSITY  OF TEXAS
         HEALTH SCIENCE CENTER  Houston,  Texas is conducting a study  entitled,
         "In  vivo  proof  of  concept   experiment   for   anti-bacterial   DNA
         preparation".


o        DR. FRANK  ORSON,  PROFESSOR  AT BAYLOR  COLLEGE OF MEDICINE,  Houston,
         Texas is conducting a study  entitled,  "PEI aerosol  delivery of ssDNA
         expression vector".


o        DRS.  LYUBA  BENIMETSKAYA  AND CY STEIN AT ALBERT  EINSTEIN  COLLEGE OF
         MEDICINE, New York are conducting a study entitled, "Down Regulate Gene
         Expression in Melanoma  Cells using  Antisense  ODNs  generated by CYGX
         ssDNA Expression Vectors".


o        DR. DAVID WEINER AT UNIVERSITY OF PENNSYLVANIA is conducting studies to
         evaluate the safety and efficacy of DNA vaccines  using several  animal
         models.

MARKETING STRATEGY

We plan to market  initial  products,  when  developed,  and for which we 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  we
develop,  and our  financial  resources.  We do not expect to establish a direct
sales capability for therapeutic  compounds for at least the next several years.
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 our 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  thereunder.  Although the implementation of initial
aspects of our  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 IND  application  and our
marketing strategy therefore may not be implemented for several years. See "Drug
Approval Process and Other Governmental Regulation."

PATENTS AND PROPRIETARY RIGHTS

We have developed or acquired a comprehensive  body of intellectual  rights. The
proprietary nature of, and protection for, our product candidates, processes and
know-how are  important to our business.  We plan to prosecute and  aggressively
defend  our  patents  and  proprietary  technology.  Our policy is to patent the
technology,  inventions,  and improvements that are considered  important to the
development of our business and that are  patentable.  We also depend upon trade
secrets,  know-how,  and  continuing  technological  innovation  to develop  and
maintain our competitive position.

A patent  portfolio  including 46 domestic and foreign  issued or pending patent
applications  protects our  technologies.  We intend to protect our  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.  Costs to bring a single  product from research



                                      9
<PAGE>

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.

Drug Discovery

In  the  initial  stages  of  drug  discovery  before  a  compound  reaches  the
laboratory,  tens of thousands of potential  compounds are randomly screened for
activity  against  an assay  assumed to be  predictive  for  particular  disease
targets.  This 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  barriers,  the
toxic effects of the compound 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.  These tests  typically take
approximately three and one-half years to complete.

Investigational New Drug Application

During the  pre-clinical  testing,  an IND is filed with the FDA to begin  human
testing of the drug. The IND becomes effective if not rejected by the FDA within
30 days. The IND must indicate the results of previous  experiments,  how, where
and by whom the new studies will be  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.  In addition,  an  Institutional  Review  Board,  comprised of
physicians  at the  hospital  or  clinic  where  the  proposed  studies  will be
conducted,  must review and  approve the IND.  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  effective,  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 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.

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, and may be conducted  concurrently  with Phase I clinical trials.  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.



                                       10
<PAGE>


Phase III Clinical Trials

This phase  typically lasts about three years,  usually  involves 1,000 to 3,000
patients and cost 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  and in
conjunction with 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 2005,  each NDA with  clinical  data must be  accompanied  by a
$672,000  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 average
review  time  for  a  New  Molecular   Entity  (NME)  has  remained   static  at
approximately  16  months,  however,  new NME can and have been  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.  We face
competition  from   biotechnology  and   pharmaceutical   companies  using  more
traditional  approaches to treating human diseases.  Our competitors may develop
safer, more effective or less costly gene-based  therapeutics.  In addition,  we
face 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.

Many of our 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 our products, or the products
developed by corporate  partners using our licensed  technologies  obsolete,  or
non-competitive,  or that any product we or our corporate  partners develop will
be preferred to any existing or newly developed technologies. In addition, there
can be no assurance that our competitors will not develop safer,  more effective
or  less  costly   cardiovascular   therapies,   gene  delivery  systems,   gene
therapeutics,  non-gene therapies,  or other therapies,  achieve superior patent
protection or obtain regulatory  approval or product  commercialization  earlier
than Company, any of which could have a material adverse effect on our business,
financial condition or results of operations.



                                       11
<PAGE>


RESEARCH AND DEVELOPMENT

The Company  expensed  $1,724,317,  and  $831,472 on  research  and  development
activities  during the years ended  December 31, 2005,  and 2004,  respectively.
Research and development  (R&D) expenses  include related  salaries,  contractor
fees,  materials,  utilities.  R&D expenses consist of independent R&D costs and
costs associated with collaborative development  arrangements.  In addition, the
Company  funded  R&D  at  other  companies  and  research   institutions   under
agreements. Research and development costs are expensed as incurred.

EMPLOYEES

As of December 31, 2005, we had  11employees,  5 of whom hold advanced  degrees.
None of our employees are covered by collective  bargaining  agreements,  and we
consider relations with our employees to be good.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We are a reporting company and file annual, quarterly and current reports, proxy
statements  and other  information  with the SEC. For further  information  with
respect to us, you may read and copy our  reports,  proxy  statements  and other
information,  at the  SEC's  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.  Our SEC
filings are also  available  at the SEC's web site at  "http://www.sec.gov."  In
addition,  you can read and copy our SEC  filings at the office of the  National
Association of Securities Dealers, Inc. at 1735 K Street, N.W., Washington, D.C.
20006.

Copies of our  Annual  Report on Form  10-K,  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 our 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

RISKS AFFECTING FUTURE OPERATING RESULTS

We do not provide  forecasts of our future financial  performance.  While we are
optimistic  about our  long-term  prospects,  the  following  factors  should be
considered in evaluating our outlook.  If the  possibilities  described as risks
below actually occur, our operating results and financial condition would likely
suffer and the  trading  price of our common  stock may fall,  causing a loss of
some or all of an investment in our common stock.

Our products are in an early stage of  development  and may not be determined to
be safe or effective.

We are only in the  early  stages  of  development  with  our  biopharmaceutical
products.  We have devoted almost all of our time to research and development of
our technology and products,  protecting our proprietary rights and establishing
strategic  alliances.  Our proposed  products are in the pre-clinical  stages of
development and will require significant further research, development, clinical
testing  and  regulatory  clearances.  Our  proposed  products  are  subject  to
development  risks.  These  risks  include  the  possibilities  that  any of the
products  could be found to be  ineffective  or toxic,  or could fail to receive
necessary regulatory  clearances.  We have not received any significant revenues
from  the  sale of  products  and we may  not  successfully  develop  marketable
products  that  will  increase  sales  and,  given  adequate  margins,  make  us
profitable.  Our  competitors  may  develop  superior  or  equivalent,  but less
expensive, products.

We have  incurred  net losses  since our  inception,  and we may not  achieve or
sustain profitability.

We incurred a net loss of approximately  $3.53 million in 2005 and approximately
$2.37 million in 2004. As of December 31, 2005, our total  shareholder's  equity
was $407,521.  Our losses have resulted  principally  from expenses  incurred in



                                       12
<PAGE>

research  and   development  of  our   technology  and  products,   general  and
administrative  expenses  that we have  incurred  while  building  our  business
infrastructure.  We expect to continue to incur significant  operating losses in
the future as we  continue  our  research  and  development  efforts and seek to
obtain regulatory approval of our products. Our ability to achieve profitability
depends on our ability to raise additional capital,  complete development of our
products,  obtain regulatory approvals and market our products.  It is uncertain
when, if ever, we will become profitable.

If we fail to  attract  significant  additional  capital,  we may be  unable  to
continue to successfully  develop our products.

Since we began operations, we have obtained operating funds primarily by selling
our company  common stock.  Based on our current  plans,  we do not believe that
current cash balances  will be  sufficient to meet our operating  needs in 2006.
Furthermore,  the actual amount of funds that we will need will be determined by
many factors,  some of which are beyond our control.  These factors  include the
success of our research and development  efforts, the status of our pre-clinical
and clinical testing,  costs relating to securing  regulatory  approvals and the
costs and timing of obtaining new patent rights, regulatory changes, competition
and  technological  developments  in the market.  We may need funds  sooner than
currently anticipated.

If necessary,  potential  sources of additional  funding could include strategic
relationships,  public or private sales of shares of our common stock or debt or
other  arrangements.  We may not obtain  additional  funding  when we need it on
terms  that will be  acceptable  to us or at all.  If we raise  funds by selling
additional shares of our common stock or securities  convertible into our common
stock, the ownership interest of our existing  shareholders will be diluted.  If
we are unable to obtain financing when needed, our business and future prospects
would be materially adversely affected.

If we fail to  receive  necessary  regulatory  approvals,  we will be  unable to
commercialize our products.

All of our  products are subject to extensive  regulation  by the United  States
Food  and Drug  Administration,  or FDA,  and by  comparable  agencies  in other
countries.  The FDA and comparable agencies require new pharmaceutical  products
to undergo lengthy and detailed clinical testing procedures and other costly and
time-consuming  compliance procedures. We do not know when or if we will be able
to submit  our  products  for  regulatory  review.  Even if we submit a new drug
application, there may be delays in obtaining regulatory approvals, if we obtain
them at all.  Sales of our  products  outside  the  United  States  will also be
subject  to  regulatory  requirements  governing  clinical  trials  and  product
approval.  These  requirements  vary from  country  to country  and could  delay
introduction of our products in those  countries.  We cannot assure you that any
of our  products  will receive  marketing  approval  from the FDA or  comparable
foreign agencies.

We  may  fail  to  compete   effectively,   particularly  against  larger,  more
established pharmaceutical companies, causing our business to suffer.

The biotechnology  industry is highly competitive.  We compete with companies in
the  United  States  and  abroad  that  are  engaged  in  the   development   of
pharmaceutical   technologies   and  products.   They  include:   biotechnology,
pharmaceutical,   chemical  and  other   companies;   academic  and   scientific
institutions;   governmental   agencies;   and  public  and   private   research
organizations.

Many of these  companies  and many of our other  competitors  have much  greater
financial and technical resources and production and marketing capabilities than
we do. Our industry is characterized  by extensive  research and development and
rapid technological  progress.  Competitors may successfully  develop and market
superior or less  expensive  products which render our products less valuable or
unmarketable.

We have limited operating experience.

We have  engaged  solely in the  development  of  biopharmaceutical  technology.
Although some members of our management  team have  experience in  biotechnology
company  operations,  we have limited  experience  in  manufacturing  or selling
biopharmaceutical  products. We also have only limited experience in negotiating



                                       13
<PAGE>

and maintaining strategic  relationships,  and in conducting clinical trials and
other  later-stage  phases  of the  regulatory  approval  process.  We  may  not
successfully engage in some or all of these activities.


We have limited manufacturing capability.

While we believe that we can produce  materials for clinical  trials and produce
products for human use at our recently completed synDNA production suite, we may
need to expand our  commercial  manufacturing  capabilities  for products in the
future if we elect not to or cannot  contract  with  others to  manufacture  our
products.  This  expansion  may occur in  stages,  each of which  would  require
regulatory  approval,  and product demand could at times exceed supply capacity.
We have not selected a site for any expanded facilities and do not know what the
construction  cost  will be for such  facilities  and  whether  we will have the
financing needed for such  construction.  We do not know if or when the FDA will
determine that such facilities  comply with Good  Manufacturing  Practices.  The
projected  location and construction of any facilities will depend on regulatory
approvals,  product development,  pharmaceutical partners and capital resources,
among  other  factors.  We  have  not  obtained  regulatory  approvals  for  any
productions  facilities  for our products,  nor can we assure  investors that we
will be able to do so.

If we lose key personnel or are unable to attract and retain additional,  highly
skilled personnel required for our activities, our business will suffer.

Competition for qualified personnel in our industry is intense,  and our success
will depend on our ability to attract and retain highly  skilled  personnel.  To
date, we have been successful in attracting and retaining key personnel.  We are
not aware of any key personnel who plan to retire or otherwise leave the Company
in the near future.

Asserting,  defending and maintaining our intellectual  property rights could be
difficult and costly,  and our failure to do so will harm our ability to compete
and the results of our operations.

Our success will depend on our existing patents and licenses, and our ability to
obtain  additional  patents  in the  future.  A patent  portfolio  including  46
domestic and foreign patents issued or pending patent applications  protects our
technologies.

We cannot assure investors that our pending patent  applications  will result in
patents being issued in the United States or foreign countries. In addition, the
patents which have been or will be issued may not afford  meaningful  protection
for our technology and products.  Competitors  may develop  products  similar to
ours which do not conflict  with our patents.  Others may  challenge our patents
and, as a result,  our patents  could be  narrowed  or  invalidated.  The patent
position of biotechnology firms generally is highly uncertain,  involves complex
legal  and  factual  questions,  and  has  recently  been  the  subject  of much
litigation.  No consistent  policy has emerged from the United States Patent and
Trademark Office (USPTO),  or the courts regarding the breadth of claims allowed
or the degree of protection afforded under  biotechnology  patents. In addition,
there is a substantial backlog of biotechnology patent applications at the USPTO
and the approval or rejection of patents may take several years.

Our success will also depend partly on our ability to operate without infringing
upon the proprietary  rights of others, as well as our ability to prevent others
from infringing on our proprietary  rights.  We may be required at times to take
legal action to protect our proprietary rights and, despite our best efforts, we
may be sued for infringing on the patent rights of others.  We have not received
any communications or other indications from owners of related patents or others
that such persons believe our products or technology may infringe their patents.
Patent litigation is costly and, even if we prevail, the cost of such litigation
could  adversely  affect  our  financial  condition.  If we do not  prevail,  in
addition  to any  damages we might have to pay, we could be required to stop the
infringing  activity  or  obtain a  license.  Any  required  license  may not be
available to us on acceptable  terms, or at all. If we fail to obtain a license,
our business might be materially adversely affected.

To help protect our proprietary  rights in unpatented trade secrets,  we require
our employees,  consultants and advisors to execute confidentiality  agreements.
However,  such  agreements  may not  provide  us  with  adequate  protection  if
confidential  information is used or disclosed improperly.  In addition, in some



                                       14
<PAGE>

situations,  these agreements may conflict with, or be subject to, the rights of
third  parties  with whom our  employees,  consultants  or  advisors  have prior
employment  or  consulting  relationships.  Further,  others  may  independently
develop  substantially  equivalent  proprietary  information and techniques,  or
otherwise gain access to our trade secrets.

If our strategic relationships are unsuccessful, our business could be harmed.

Our strategic  relationships  with GE Healthcare and others are important to our
success.  The  development,  improvement  and  marketing  of  many  of  our  key
therapeutic  products are or will be  dependent,  in part, on the efforts of our
strategic partners.  For example, under the GE Healthcare  relationship,  we may
fail to  achieve  product  development  milestones;  GE  Healthcare  may fail to
perform  its  obligations  under our  agreement,  such as  failing to produce an
adequate supply of sufficient  quality raw materials to produce synDNA ; and our
agreement with GE Healthcare  may be terminated  against our will. We may not be
commercially  successful  in our  effort to  produce  and/or  sell  synDNA.  The
transactions  contemplated by our agreements with strategic partners,  including
equity  purchases  and  cash  payments,   are  subject  to  numerous  risks  and
conditions.  The  occurrence  of any of these  events  could  severely  harm our
business.

Our  near-term  strategy  is to develop our own  products as well as  co-develop
products with  strategic  partners,  or to license the marketing  rights for our
products  to  pharmaceutical  partners  after we  complete  one or more Phase II
clinical trials. In this manner,  the extensive costs associated with late-stage
clinical  development  and marketing will be shared with, or the  responsibility
of, our strategic partners.

To  fully  realize  the  potential  of  our  products,   including  development,
production   and   marketing,   we  may  need  to  establish   other   strategic
relationships.

We  have  limited  sales   capability  and  may  not  be  able  to  successfully
commercialize our products.

We have been engaged solely in the development of biopharmaceutical  technology.
Although  some  of our  management  have  experience  in  biotechnology  company
operations,   we  have   limited   experience   in   manufacturing   or  selling
pharmaceutical products. We also have only limited experience in negotiating and
maintaining strategic relationships, and in conducting clinical trials and other
later-stage phases of the regulatory  approval process. To the extent we rely on
strategic partners to fully commercialize our products,  we will be dependent on
their efforts. We may not successfully engage in any of these activities.

We may be subject to product  liability  lawsuits and our  insurance  may not be
adequate to cover damages.

We believe we carry adequate insurance for the product  development  research we
currently conduct. In the future, when we have products available for commercial
sale and use,  the use of our  products  will  expose us to the risk of  product
liability  claims.  Although  we intend to obtain  product  liability  insurance
coverage,  product liability insurance may not continue to be available to us on
acceptable  terms and our  coverage  may not be  sufficient  to cover all claims
against us. A product  liability  claim,  even one without merit or for which we
have  substantial  coverage,  could result in  significant  legal defense costs,
thereby  increasing  our  expenses,  lowering  our  earnings  and,  depending on
revenues, potentially resulting in additional losses.

Continuing efforts of government and third party payers to contain or reduce the
costs of health care may adversely affect our revenues and future profitability.

In addition to obtaining regulatory approval,  the successful  commercialization
of our products will depend on our ability to obtain  reimbursement for the cost
of the product and treatment.  Government  authorities,  private health insurers
and  other   organizations,   such  as  health  maintenance   organizations  are
increasingly  challenging the prices charged for medical  products and services.
Also, the trend toward  managed health care in the United States,  the growth of
healthcare  organizations  such as HMOs,  and  legislative  proposals  to reform
healthcare and government  insurance programs could significantly  influence the
purchase of  healthcare  services  and  products,  resulting in lower prices and
reducing demand for our products.  The cost containment measures that healthcare
providers are instituting and any healthcare  reform could affect our ability to
sell our  products  and may have a material  adverse  effect on our  operations.
Reimbursement in the United States or foreign countries may not be available for
any of our products,  any reimbursement  granted may be reduced or discontinued,
and limits on  reimbursement  available from  third-party  payers may reduce the
demand for, or the price of, our products. The lack or inadequacy of third-party



                                       15
<PAGE>

reimbursements  for our  products  would have a material  adverse  effect on our
operations.  Additional  legislation  or regulation  relating to the  healthcare
industry or third-party  coverage and reimbursement may be enacted in the future
that adversely affects our products and our business.

If we fail to  establish  strategic  relationships  with  larger  pharmaceutical
partners, our business may suffer.

We do not  intend to  conduct  late-stage  (Phase  III)  human  clinical  trials
ourselves.  We anticipate entering into relationships with larger pharmaceutical
companies to conduct later pharmaceutical  trials and to market our products and
we also plan to continue to use contract  manufacturing  for late stage clinical
and  commercial  quantities  of our  products.  We may be unable  to enter  into
corporate  partnerships  which could impede our ability to bring our products to
market.  Any such corporate  partnerships,  if entered,  may not be on favorable
terms and may not  result in the  successful  development  or  marketing  of our
products. If we are unsuccessful in establishing  advantageous clinical testing,
manufacturing  and  marketing  relationships,  we are  not  likely  to  generate
significant revenues and become profitable.

RISKS RELATED TO SHARE OWNERSHIP

Our right to issue  preferred  stock and, our classified  Board of Directors may
delay a takeover  attempt  and  prevent or  frustrate  any attempt to replace or
remove the then current management of the Company by shareholders.

Our  authorized  capital  consists  of  300,000,000  shares of common  stock and
50,000,000  shares of  preferred  stock.  Our board of  directors,  without  any
further vote by the  shareholders,  has the authority to issue preferred  shares
and to determine  the price,  preferences,  rights and  restrictions,  including
voting and dividend rights, of these shares. The rights of the holders of shares
of common stock may be affected by the rights of holders of any preferred shares
that our board of directors may issue in the future.  For example,  our board of
directors  may allow the issuance of preferred  shares with more voting  rights,
higher dividend  payments or more favorable  rights upon  dissolution,  than the
shares of common stock or special rights to elect directors.

In addition,  we have a "classified"  board of directors,  which means that only
one-third of our directors are eligible for election  each year.  Therefore,  if
shareholders wish to change the composition of our Board of Directors,  it could
take at least two years to remove a majority of the existing  directors or three
years to change all  directors.  Having a classified  board of directors may, in
some cases,  delay mergers,  tender offers or other possible  transactions which
may be  favored  by some or a  majority  of our  shareholders  and may  delay or
frustrate  action by  shareholders to change the then current Board of Directors
and management.

Our stock price is volatile and may fluctuate due to factors beyond our control.

Historically,  the  market  price of our  stock  has  been  highly  volatile  as
reflected in the table in Part II, Item 5 of this report. The following types of
announcements  could have a significant impact on the price of our common stock:
positive or negative  results of testing and  clinical  trials by  ourselves  or
competitors;  delays in  entering  into  corporate  partnerships;  technological
innovations or commercial  product  introductions  by ourselves or  competitors;
changes in government  regulations;  developments concerning proprietary rights,
including  patents  and  litigation  matters;  public  concern  relating  to the
commercial value or safety of any of our products;  financing or other corporate
transactions; or general stock market conditions.

Further, the stock market experiences significant price and volume fluctuations.
These  fluctuations  have  particularly  affected  the  market  prices of equity
securities  of many  biopharmaceutical  companies  that are not yet  profitable.
Often,   the  effect  on  the  price  of  such   securities   is   unrelated  or
disproportionate  to the operating  performance of such  companies.  These broad
market fluctuations may adversely affect the ability of a shareholder to dispose
of his or her shares at a price  equal to or above the price at which the shares
were purchased.



                                       16
<PAGE>


The  significant  number of our shares of Common Stock  eligible for future sale
may cause the price of our common stock to fall. We have outstanding 124,460,970
shares of common  stock as of December 31, 2005 and all are or will be after the
date of  issuance  eligible  for sale  under  Rule 144 or are  otherwise  freely
tradeable.

The Board of Directors has approved for our employees, options to buy a total of
35,004,000  shares of common stock as of December 31, 2005.  These  options have
exercise prices between $0.185 to $1.01 per share. The shares of common stock to
be  issued  upon  exercise  of these  options,  have not been  registered  as of
December 31, 2005. No options have been granted as of April 17, 2006.

  We may issue options to purchase up to an additional  996,000 shares of common
stock at December 31, 2005 under our stock option plans.

Sales of  substantial  amounts of shares into the public  market could lower the
market price of our common stock.

We do not expect to pay dividends in the foreseeable future.
We have never paid  dividends on our shares of common stock and do not intend to
pay dividends in the foreseeable  future.  Therefore,  you should only invest in
our common  stock with the  expectation  of realizing a return  through  capital
appreciation  on your  investment.  You should not invest in our common stock if
you are seeking dividend income.

ITEM 2.  PROPERTIES
-------------------

The Company's  corporate  executive offices are located at 3100 Wilcrest,  Suite
140, Houston,  Texas 77042. The Company has occupied  approximately 6,000 square
feet of executive  office and laboratory space since December 2003. The facility
is in new condition and is adequate for the Company's current  operations.  Rent
on the  facility  averages  to be $5,701  per  month  with a lease  term  ending
September  2009.  We believe our  facilities  are  suitable and adequate for our
present operational requirements.

                                     PART II

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

Our authorized capital stock consists of 300,000,000 shares of common stock, par
value  $0.001 per share,  and  50,000,000  share of preferred  stock,  par value
$0.001 per share.  There were 125,377,370  share of common stock and no share of
preferred stock  outstanding as of March 16, 2006. Our common stock is traded on
the OTC Bulletin Board under the ticker symbol CYGX.

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.



                                       17
<PAGE>





                                                      HIGH               LOW

Fiscal Year Ending December 31, 2004
Quarter 1                                             $0.55              $0.94
Quarter 2                                             $0.41              $0.80
Quarter 3                                             $0.21              $0.45
Quarter 4                                             $0.22              $0.81

Fiscal Year Ending December 31, 2005
Quarter 1                                             $0.95              $0.43
Quarter 2                                             $0.79              $0.46
Quarter 3                                             $0.67              $0.34
Quarter 4                                             $1.15              $0.44


STOCKHOLDERS

As of March 27, 2006 there were  approximately 651 shareholders of record of our
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 our securities sold during 2005 have been either  previously  reported on
our Form  10-Qs  filed  with  the  Securities  and  Exchange  Commission  or are
described below.

On October  11,  2005 the  Company  issued  500,000  shares of common  stock for
financial  advisory  services  provided in the third quarter to the providers of
those  services  and their  respective  designated  affiliates  pursuant  to the
exemption  from  registration  provided by Section 4(2) of the Securities Act of
1933 for transactions not involving a public offering.

On October 11, 2005 the Company  issued  5,226,000  shares of common stock for a
cash  price  of  $1,306,500  (or  $0.25per  share)  in a  private  placement  to
accredited  investors  pursuant to the exemption from  registration  provided by
Section 4(2) of the Securities Act of 1933 and Rule 506 thereunder.

On October 11,  2005 the  Company  issued  50,000  shares of common  stock to an
employee of the Company,  Frederic  Kendirgi,  for compensation for an aggregate
price of $24,500 or an average of $0.49 per share  (based on 25% of annual gross
salary  period) in  reliance  on the  exemption  from  registration  provided by
Section 4(2) of the  Securities  Act of 1933 for  transactions  not  involving a
public offering.

The  Company  issued  5,248,000  shares  of  common  stock  for a cash  price of
$1,312,000 (or $0.25per  share) in a private  placement to accredited  investors
pursuant to the  exemption  from  registration  provided by Section  4(2) of the
Securities Act of 1933 for  transactions  not involving a public  offering.  The
compensation for this stock was received in the 4th quarter of 2005.




                                       18
<PAGE>


<TABLE>

ITEM 6. SELECTED FINANCIAL DATA


The following selected financial data should be read in conjunction with Item 7.
"Management's  Discussion  and  Analysis  or  Plan  of  Operation"  and  Item 8.
"Financial Statements."

                                                                             As of December 31,
                                            2005             2004             2003            2002           2001
<S>                                                                     <C>           <C>            <C>

Operations data:
   Gross margin                          $      --      $      --      $  (184,893)   $     1,700    $         875
   Research and development               (1,724,317)      (831,472)      (454,433)      (187,040)      (2,207,736)
   General and administrative             (1,495,454)    (1,434,893)    (1,214,023)    (1,386,218)      (1,548,509)
   Consulting expense                       (290,000)       (60,926)      (415,869)      (816,947)            --
   Depreciation                              (25,391)       (38,125)       (38,445)       (40,699)         (63,465)
   Other income/(expense)                      2,037             40         (9,562)          --           (345,588)
                                         -----------    -----------    -----------    -----------    -------------
   Net loss                               (3,533,125)    (2,365,376)    (2,317,225)    (2,429,204)      (4,164,423)

   Weighted  average  number of common
     shares outstanding
     basic and diluted                   $     (0.03)   $     (0.02)   $     (0.03)   $     (0.04)   $       (0.11)

Balance sheet data:
   Cash and cash equivalents               1,307,965        453,235        257,236           --             15,688
   Working capital                           226,930       (586,518)      (339,865)      (658,561)          72,997
   Total assets                            1,509,948        524,693        353,958        101,329          972,111
   Total liabilities                       1,102,427      1,039,753        597,202        666,755          899,814
   Shareholders' equity (deficit)            407,521       (515,060)      (243,242)      (565,426)        (541,313)

</TABLE>


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

FORWARD-LOOKING INFORMATION

This  report   contains   forward-looking   statements   regarding   our  plans,
expectations,  estimates and beliefs. Our 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.  We have  based  these  forward-looking  statements  largely  on our
expectations.  Forward-looking  statements in this report  include,  but are not
necessarily limited to, those relating to:

     o    our intention to introduce new products,

     o    receipt  of any  required  FDA or other  regulatory  approval  for our
          products,

     o    our expectations about the markets for our products,

     o    acceptance of our products, when introduced, in the marketplace,

     o    our future capital needs, and

     o    success of our patent applications.



                                       19
<PAGE>


Forward-looking  statements are subject to risks and  uncertainties,  certain of
which are beyond our control.  Actual results could differ materially from those
anticipated  as a result of the  factors  described  in the "Risk  Factors"  and
detailed in our 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 our inability to obtain,  approval by the FDA
          or other regulatory authorities for our products,

     o    research and development efforts,  including delays in developing,  or
          the failure to develop, our 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 acceptance of our products,

     o    problems   that  we  may  face  in   manufacturing,   marketing,   and
          distributing our products,

     o    our inability to raise additional capital when needed,

     o    delays in the  issuance  of, or the  failure  to obtain,  patents  for
          certain of our 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 our inception in 1995, we have devoted our resources  primarily to fund our
research and development efforts. We have been unprofitable since inception and,
other than limited interest and grant revenue,  we have had no material revenues
from the sale of products or from other sources,  and we do not expect  material
revenues for the foreseeable  future.  We expect to continue to incur losses for
the  foreseeable  future as we continue to expand our research  and  development
efforts and enter additional collaborative efforts. As of December 31, 2005, our
accumulated equity was $407,521.

RESULTS OF OPERATIONS

Year Ended December 31, 2005 Compared to Year Ended December 31, 2004

For the year ended December 31, 2005, we reported a net loss of  $3,533,125,  or
less  than  $0.03 per  share,  and no  revenue  as  compared  with a net loss of
$2,365,376,  or less than $0.02 per share,  and no revenue for the twelve months
ended December 31, 2004.

Research and Development  Expenses.  Research and development expenses increased
to  $1,724,317  for the twelve  months  ending  December  31,  2005  compared to
$831,472 for the same period in 2004  primarily due to hiring of additional  R&D
employees  and  increased  research  activity.  Approximately  $673,000  of  the
increase is a result of the  increased  staff and the  remaining  difference  of
220,000  results  from the  increased  activity  cost of  antibacterial  and DNA
vaccine research.



                                       20
<PAGE>


General  and  Administrative  Expenses.   General  and  administrative  expenses
increased to $1,495,454 for the twelve months ending  December 31, 2005 compared
to $1,434,893  for the same period in 2004.  The increase is partially due to an
increase  in legal  fees of  $244,000  of which  $199,000  is due  primarily  to
increased  patent  attorney fees and  litigation  fees for the legal  proceeding
described in Part II, Item 3 above. An increase in staff along with increases in
officer salaries  contributed to an increase of $305,000 in payroll costs. These
costs  were  offset  by  a  decrease  in  third  party  investor  relations  and
advertising fees of approximately $489,000.

Consulting  Expenses.  Consulting  expenses  increase to $290,000 for the twelve
months ending  December 31 2005 compared to $60,926 for the same period in 2004.
This increase is primarily  attributed to a one year  consulting  contract where
Cytogenix engaged a firm to consult on various financial business matters.

Depreciation and Amortization  Expenses.  Depreciation and amortization expenses
decreased to $25,391 for the twelve months ending  December 31, 2005 compared to
$38,125  for  the  same  period  in 2004  primarily  due to  office  furnishings
purchased in previous years becoming fully depreciated in 2005.

Year Ended December 31, 2004 Compared to Year Ended December 31, 2003

For the year ended December 31, 2004, we reported a net loss of  $2,365,376,  or
less  than  $0.02 per  share,  and no  revenue  as  compared  with a net loss of
$2,317,225,  or less than $0.03 per share,  and no revenue for the twelve months
ended December 31, 2003.

Research and Development  Expenses.  Research and development expenses increased
to $831,472 for the twelve months ending  December 31, 2004 compared to $454,433
for the same period in 2003 primarily due to the increased  research activity of
antibacterial and DNA vaccine research.

General  and  Administrative  Expenses.   General  and  administrative  expenses
increased to $1,434,893 for the twelve months ending  December 31, 2004 compared
to  $1,214,023  for the same period in 2003.  The  increase is due to payment of
back wages to employees from prior years.

Consulting  Expenses.  Consulting expenses decrease from $415,869 for the twelve
months ending  December 31 2003 compared to $60,926 for the same period in 2004.
This  decrease  is due the  reduction  in  third-party  investor  relations  and
advertising consulting fees.

Depreciation and Amortization  Expenses.  Depreciation and amortization expenses
decreased to $38,125 for the twelve months ending  December 31, 2004 compared to
$38,445  for  the  same  period  in 2003  primarily  due to  office  furnishings
purchased in previous years becoming fully depreciated in 2005 along with no new
acquisitions.

LIQUIDITY AND CAPITAL RESOURCES

We have financed our operations since inception  primarily  through equity sales
totaling  approximately  $11,000,000,  and from  grants  and  contract  research
funding of $200,000 from various sources.  We expect to continue to incur losses
as we continue and expand our research and  development  activities  and related
regulatory work and increase our collaborative  efforts. For 2006, we expect our
expenditures for operations,  including our collaborative  efforts,  and our GMP
facilities to be approximately $6 to $7 million.  The increase  compared to 2005
expenditures is expected to result from the purchase of additional  building for
synthetic  DNA  manufacturing  coupled  with  additional  production  staff  and
expansion of preclinical  product  development  efforts.  However, if need be in
2006,  we could reduce our  expenditures  because the vast majority of our costs
are variable.  Those estimated expenditures include amounts necessary to fulfill
our  obligations  under  our  various  collaborative,   research  and  licensing
agreements during 2006.

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 where FDA approval for human sales is received, our business strategy
is to develop our products to initial Phase III human  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



                                       21
<PAGE>

relationships.  We also look for  collaborative  and other efforts utilize other
technology  to increase  shareholder  value.  We currently  use this strategy to
limit the potential  cost we would incur in  developing a product.  Our 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  results  and  research  results.

Because of the various  factors noted above and the expectation  that,  until we
establish  revenue  sources,   we  will  license  to,  or  jointly  develop  our
prospective  products with,  strategic  partners,  we review, at least annually,
each research  program and clinical trial,  based on results and progress during
the prior year and  estimate  our needs for that program or trial for the coming
year,  making  adjustments based on the progress of the program during the year.
We do not  set  long-term  development  budgets  or  development  schedules  for
bringing our products to market or track our research  costs on a product basis.


Our cash, cash equivalents  were $1,307,965 at December 31, 2005,  compared with
$453,235 at December 31, 2004. The increase of $854,730 was due primarily to net
proceeds  from a private  placement of  6,538,000  shares of its common stock at
$.25 per share. The sale closed December 31, 2005. The securities were sold in a
private  placement  to  accredited  investors  pursuant  to the  exemption  from
registration provided by Section 4(a) of the Securities Act of 1933.

 We do not expect any material revenues in 2006 from our business activities. To
fund our operations in 2006 and beyond we will need to raise additional capital.
We will continue to look for opportunities to finance our ongoing activities and
operations through accessing corporate partners or the public equity markets, as
we currently have no credit facility, nor do we intend to seek one.

CONTRACTUAL PAYMENT OBLIGATIONS

The Company's off-balance sheet arrangements are limited to rents on its primary
facility  and the  purchase of supplies  from GE  Healthcare  beginning in 2006.
These off-balance sheet arrangements are expensed as incurred.  A summary of our
contractual commitments and obligations as of December 31, 2005 is as follows:

<TABLE>


                                                PAYMENTS DUE BY PERIOD
CONTRACTUAL                                                                     2008 AND
OBLIGATION                  TOTAL          2005         2006         2007        BEYOND
<S>                                                                            <C>

GE Healthcare Contract    $4,300,000   $      --     $  350,000   $  750,000   $3,200,000
Operating  leases         $  355,494   $ 72,158      $   74,144   $ 74,806     $  134,386
</TABLE>

Our future  expenditures and capital  requirements  depend on numerous  factors,
most of which are difficult to project beyond the short term, including, without
limitation,  the progress of our research and development programs, the progress
of our  pre-clinical  and  clinical  trials,  the time  and  costs  involved  in
obtaining regulatory approvals, the cost of filing,  prosecuting,  defending and
enforcing any patent claims and other  intellectual  property rights,  competing
technological and market  developments,  our ability to establish  collaborative
arrangements  and the terms of any such  arrangements,  and the costs associated
with  commercialization  of our products.  Our cash requirements are expected to
continue to increase each year as we expand our activities and operations. There
can be no  assurance,  however,  that we will ever be able to  generate  product
revenues or achieve or sustain profitability.

NEW ACCOUNTING PRONOUNCEMENTS

See Note 1 of Notes to Financial Statements included under Part II, Item 8.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The discussion and analysis of our financial condition and results of operations
are based upon our 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,  we evaluate our estimates,  including those related to valuation
of  investments,  long-lived  assets,  and  revenue  recognition.  We  base  our
estimates on  historical  experience  and on various other  assumptions.  Actual



                                       22
<PAGE>

results  may  differ  from  these  estimates  under  different   assumptions  or
conditions.  We believe  the  following  critical  accounting  policies  and the
related  judgments  and  estimates  affect  the  preparation  of  our  financial
statements.

Long-Lived Asset Impairment

We regularly evaluate long-lived assets and certain identified intangible assets
for impairment in accordance  with Statement of Financial  Accounting  Standards
("SFAS")  No. 144,  "Accounting  for the  Impairment  or Disposal of  Long-Lived
Assets,"  which  requires  us  to  review  our  long-lived  assets  and  certain
identifiable  intangible  assets for  impairment  whenever  events or changes in
circumstances  indicate  that  the  carrying  amount  of an asset  might  not be
recoverable and exceeds its fair value.  Recoverability is assessed utilizing an
un-discounted cash flow analysis and if less then the carrying value is compared
to the fair value for assessing  impairment.  Based on this analysis, we did not
recognize an impairment on long-lived  assets during the year ended December 31,
2005. If circumstances related to our long-lived assets change, we may record an
impairment charge in the future.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of December 31, 2005 the Company has a restricted long-term CD investment per
the litigation matter discussed in Note 8 to the financial  statements.  Pending
appeal of this case the Company has  established a long-term CD in the amount of
$115,500 to comply. This CD earns interest at a rate of 3.4% annually.









                                       23
<PAGE>





ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                          INDEX TO FINANCIAL STATEMENTS

                                                                            Page

Report of Independent Registered Public Accounting Firm                     F-2
Balance Sheets                                                              F-3
Statements of Operations                                                    F-4
Statement of Stockholders' Equity                                           F-5
Consolidated Statements of Cash Flows                                       F-7
Consolidated Notes to Financial Statements                                  F-8
















                                      F-1
<PAGE>




             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
 CytoGenix, Inc.
 A Development Stage Company
 Houston, Texas

We have  audited  the  accompanying  balance  sheets of  CytoGenix,  Inc.  as of
December  31,  2005  and  2004,  and  the  related   statements  of  operations,
stockholders'  equity  (deficit),  and cash flows for each of the three years in
the period  ended  December  31,  2005 and the period  from  February  10,  1995
(Inception)  through  December  31, 2005.  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  audits.  The  financial
statements for the period  February 10, 1995  (inception)  through  December 31,
2002,  were  audited  by other  auditors  whose  reports  expressed  unqualified
opinions on those statements.  The financial  statements for the period February
10, 1995 (inception)  through December 31, 2002,  include total revenues and net
loss of $2,575 and $14,842,328,  respectively.  Our opinion on the statements of
operations,  stockholders'  equity  (deficit),  and cash  flows  for the  period
February 10, 1995 (inception)  through December 31, 2005,  insofar as it relates
to amounts for prior periods  through  December 31, 2002, is based solely on the
report of other auditors.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of CytoGenix,  Inc. as of December
31, 2005 and 2004, and the results of its operations and its cash flows for each
of the three  years in the period  ended  December  31, 2005 and the period from
February 10, 1995  (Inception)  through  December 31, 2005, in  conformity  with
accounting principles generally accepted in the United States of America.

As discussed in Note 2 to the  financial  statements,  the  Company's  recurring
losses from  operations and the need to raise  additional  financing in order to
satisfy its  vendors and other  creditors  and execute its  business  plan raise
substantial doubt about its ability to continue as a going concern. Management's
plans  as to these  matters  are also  described  in Note 2. The 2005  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.

/s/  Lopez, Blevins, Bork & Associates, LLP
-------------------------------------------
Lopez, Blevins, Bork & Associates, LLP
Houston, Texas
March 31, 2006














                                      F-2


<PAGE>

<TABLE>

<CAPTION>

                                 CYTOGENIX, INC.
                           A DEVELOPMENT STAGE COMPANY
                                 BALANCE SHEETS

                                                                                              December 31,
                                                                                 ----------------------------------------
                                                                                         2005                 2004
                                                                                 -------------------   ------------------
<S>                                                                              <C>                   <C>

ASSETS

CURRENT ASSETS:
     Cash                                                                        $        1,307,965    $           453,235
     Prepaid expense                                                                         21,392                     -
                                                                                 -------------------   ------------------
           Total current assets                                                           1,329,357               453,235

Property and equipment, net of $166,789 and $151,649 accumulated
     depreciation for December 31, 2005 and December 31, 2004, respectively                  56,287                65,059
Deposits                                                                                      6,399                 6,399
Long-term investment - restricted                                                           117,905                     -
                                                                                 -------------------   ------------------
           Total assets                                                          $        1,509,948    $          524,693
                                                                                 ===================   ==================

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
    Accounts payable                                                             $          258,495    $         237,833
     Accrued expenses                                                                       843,932              801,920
                                                                                 -------------------   ------------------
           Total current liabilities                                                      1,102,427            1,039,753
                                                                                 -------------------   ------------------
COMMITMENTS AND CONTINGENCIES


STOCKHOLDERS' EQUITY (DEFICIT):
    Preferred stock, $.001 par value; 50,000,000 shares authorized,
       no shares issued and outstanding                                                           -                    -
    Common  stock,   $.001  par  value;   300,000,000   shares  authorized,
       124,460,970  and  109,204,339  shares issued and  outstanding  as of
       December 31, 2005 and December 31, 2004, respectively                                124,461              109,204
    Additional paid-in capital                                                           23,971,086           19,530,637
    Treasury stock                                                                         (629,972)            (629,972)
    Deficit accumulated during the development stage                                    (23,058,054)         (19,524,929)
                                                                                 -------------------   ------------------
           Total stockholders' equity (deficit)                                             407,521             (515,060)
                                                                                 -------------------   ------------------

           Total liabilities and stockholders' equity (deficit)                  $        1,509,948    $         524,693
                                                                                 ===================   ==================

</TABLE>


See  accompanying   summary  of  accounting  policies  and  notes  to  financial
statements


                                      F-3
<PAGE>

<TABLE>

<CAPTION>
                                 CYTOGENIX, INC.
                           A DEVELOPMENT STAGE COMPANY
                            STATEMENTS OF OPERATIONS



                                                                                                       February 10, 1995
                                                 YEAR ENDED           YEAR ENDED      YEAR ENDED
                                                                                                      (Inception)Through
                                                    2005               2004              2003         December 31,2005
                                             -------------------------------------------------------  --------------------
<S>                                                                            <C>                    <C>

REVENUES                                     $             -     $             -   $        80,000    $          82,575


COST OF REVENUES                                           -                   -           264,893              264,893
                                             -------------------------------------------------------  --------------------


GROSS MARGIN                                               -                   -          (184,893)            (182,318)


COSTS AND EXPENSES:
    Research and development                       1,724,317             831,472           454,433            7,806,188
    General and administrative                     1,495,454           1,434,893         1,214,023           12,920,913
    Consulting expense                               290,000              60,926           415,869            1,518,481
    Depreciation and amortization                     25,391              38,125            38,445              269,593
    Impairment expense                                     -                   -                 -              345,588
    Equity in losses of joint venture                      -                   -                 -               10,000
                                             -------------------------------------------------------  --------------------
                                                  (3,535,162)         (2,365,416)       (2,307,663)         (23,053,081)
LOSS FROM OPERATIONS

OTHER INCOME:
    Gain on sale of security                               -                   -                 -                  881
    Interest income                                    2,405                  40               243                2,686
    Loss on disposal of property of
         equipment                                      (368)                  -            (9,805)             (10,173)
    Dividend income                                        -                   -                 -                1,633
                                             -------------------------------------------------------  --------------------

NET LOSS                                      $    (3,533,125)    $    (2,365,376)  $    (2,317,225)   $    (23,058,054)

                                             =======================================================  ====================

Net loss per share:
    Basic and diluted net loss per share     $          (.03)    $          (.02)  $            (.03)
                                             =======================================================

Weighed average shares outstanding:
    Basic and diluted                            114,181,072          101,817,083         81,413,585
                                             =======================================================
</TABLE>


See  accompanying   summary  of  accounting  policies  and  notes  to  financial
statements



                                      F-4
<PAGE>

<TABLE>

<CAPTION>
                                 CYTOGENIX, INC.
                           A DEVELOPMENT STAGE COMPANY
                   STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
       PERIOD FROM FEBRUARY 10, 1995 (INCEPTION) THROUGH DECEMBER 31, 2005



                                                                       Additional                                          Total
                                                Common Stock            Paid-in       Treasury          Retained       Stockholders'
                                          Shares         Amounts        Capital         Stock             Deficit         Deficit
                                       -------------- -------------- -------------- ----------------- -------------- ---------------
<S>                                                                                 <C>               <C>            <C>


Shares issued for cash                    32,975,447  $      32,975  $   4,331,784  $              -  $           -  $    4,364,759

Shares issued for services                18,406,009         18,406      6,227,479                 -              -       6,245,885

Stock option expense                               -              -      1,797,300                 -              -       1,797,300

Contributions to capital                           -              -        152,500                 -              -         152,500

Purchase of treasury stock                         -              -              -           (60,000)             -         (60,000)

Sales of treasury stock                            -              -     (1,639,938)        2,180,506              -         540,568

Shares issued for debt                       212,780            213        135,777                 -              -         135,990

Issuance of stock into treasury           20,000,000         20,000     10,455,016       (10,475,016)             -               -

Retirement of treasury stock             (11,048,625)       (11,048)    (6,862,825)        6,873,873              -               -

Penalty on sale of treasury stock                  -              -       (125,765)          125,765              -               -

Shares issued for patent                     500,000            500        374,500                 -              -         375,000

Shares received for note receivable                -              -              -           (25,100)             -         (25,100)

Reclassify prior year treasury sales to

   additional paid in capital in 2000              -              -              -           750,000              -         750,000

Deficit accumulated in development
stage                                              -              -              -                 -    (14,842,328)    (14,842,328)
                                       -------------- -------------- -------------- ----------------- -------------- ---------------

BALANCE, December 31, 2002                61,045,611         61,046     14,845,828          (629,972)   (14,842,328)       (565,426)

Shares issued for cash, net fundraising   31,662,784         31,663      1,289,686                 -              -       1,321,349
Shares issued for services                 4,295,315          4,295        729,056                 -              -         733,351
Shares issued for debt                       121,284            121         95,693                 -              -          95,814
Shares issued for exercised warrants       1,599,999          1,600        222,400                 -              -         224,000
Share rights issuedas revenue                      -              -        264,893                 -              -         264,893
   incentive
Net loss                                           -              -              -                 -     (2,317,225)     (2,317,225)
                                       -------------- -------------- -------------- ----------------- -------------- ---------------

BALANCE, December 31, 2003                98,724,993         98,725     17,447,556          (629,972)   (17,159,553)       (243,244)

Shares issued for cash, net fundraising    8,715,191          8,715      1,542,886                 -              -       1,551,601
Shares issued for services                   482,032            482        162,760                 -              -         163,242
Shares issued for debt                        39,267             39         31,250                 -              -          31,289
Shares issued for exercised warrants       1,242,856          1,243        346,185                 -              -         347,428
Net loss                                           -              -              -                 -     (2,365,376)     (2,365,376)
                                       -------------- -------------- -------------- ----------------- -------------- ---------------


See accompanying summary of accounting policies and notes to financial statements

                                       F-5


                                 CYTOGENIX, INC.
                           A DEVELOPMENT STAGE COMPANY
                   STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
       PERIOD FROM FEBRUARY 10, 1995 (INCEPTION) THROUGH DECEMBER 31, 2005


                                                                       Additional                                          Total
                                                Common Stock            Paid-in       Treasury          Retained       Stockholders'
                                          Shares         Amounts        Capital         Stock             Deficit         Deficit
                                       -------------- -------------- -------------- ----------------- -------------- ---------------

BALANCE, December 31, 2004                 109,204,339        109,204     19,530,637       (629,972)   (19,524,929)       (515,060)

Shares issued for cash, net fundraising     13,928,967         13,929      3,571,151              -              -       3,585,080
Shares issued for debt                         647,701            648        541,478              -              -         542,126
Shares issued for services                     679,963            680       327,820               -              -         328,500
Net loss                                             -              -              -              -     (3,533,125)     (3,533,125)
                                        --------------- -------------- -------------- -------------- -------------- ----------------

BALANCE, December 31, 2005                 124,460,970  $     124,461  $  23,971,086  $    (629,972) $ (23,058,054) $      407,521
                                        =============== ============== ============== ============== ============== ================

</TABLE>






















See  accompanying   summary  of  accounting  policies  and  notes  to  financial
statements


                                      F-6
<PAGE>

<TABLE>

<CAPTION>

                                 CYTOGENIX, INC.
                           A DEVELOPMENT STAGE COMPANY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                                        February 10, 1995
                                                        YEAR ENDED      YEAR ENDED      YEAR ENDED      (Inception)Through
                                                            2005            2004            2003        December 31,2005
                                                        ------------    ------------    ------------    ------------------
<S>                                                     <C>             <C>             <C>             <C>

OPERATING ACTIVITIES:
   Net loss                                             $ (3,533,125)   $ (2,365,376)   $ (2,317,225)   $(23,058,054)
   Adjustments to reconcile net loss to net cash used
      in operating activities:
      Depreciation and amortization                           25,391          38,128          38,445         266,218
      Impairment expense                                        --              --              --           345,588
      Loss on disposal of property & equipment                   368            --             9,805          10,173
      Gain on long term investments - restricted              (2,405)           --              --            (2,405)
      Stock issued for services                              328,500         163,242         733,351       7,470,978
      Stock option expense                                      --              --           264,891       2,062,193
      Equity in losses of joint venture                         --              --              --            10,000
      Changes in operating assets and liabilities:
         Prepaid expenses                                    (21,392)         20,374         (12,160)        (21,392)
         Deposits                                               --              --            (6,399)         (6,399)
         Accounts payable & accrued expenses                 604,800         473,839          31,263       1,907,646
                                                        ------------    ------------    ------------    ------------
Net cash used in operating activities                     (2,597,863)     (1,669,793)     (1,258,029)    (11,015,454)
                                                        ------------    ------------    ------------    ------------

INVESTING ACTIVITIES:
   Purchase of property and equipment                        (16,987)        (12,964)        (45,358)       (303,266)
   Issue note receivable                                        --              --              --           (25,100)
   Investment in long-term CD                               (115,500)           --              --          (115,500)
   Investment in joint venture                                  --              --              --           (10,000)
                                                        ------------    ------------    ------------    ------------
Net cash provided by used in investing activities           (132,487)        (12,964)        (45,358)       (453,866)
                                                        ------------    ------------    ------------    ------------

FINANCING ACTIVITIES PROVIDED BY:
   Proceeds from notes payable                                  --              --              --           250,000
   Payments on notes payable                                    --              --              --          (250,000)
   Treasury shares sold                                         --              --              --         1,290,568
   Purchase of treasury shares                                  --              --              --           (60,000)
   Buyback of stock warrants                                    --              (571)           --              (571)
   Sale of common stock, net fundraising                   3,585,080       1,551,601       1,321,349      10,597,789
   Sale of common stock for exercised warrants                  --           348,000         224,000         796,999
   Loans from related parties, net                              --              --            (5,000)           --
   Contributions to capital                                     --              --              --           152,500
                                                        ------------    ------------    ------------    ------------
Net cash provided by financing activities                  3,585,080       1,899,030       1,540,349      12,777,285
                                                        ------------    ------------    ------------    ------------

NET CHANGE IN CASH                                           854,730         216,273         236,962       1,307,965

CASH, beginning of period                                    453,235         236,962            --              --
                                                        ------------    ------------    ------------    ------------
CASH, end of period                                     $  1,307,965    $    453,235    $    236,962    $  1,307,965
                                                        ============    ============    ============    ============

SUPPLEMENTAL CASH FLOW INFORMATION:
   Interest paid                                        $       --      $       --      $       --      $       --
                                                        ============    ============    ============    ============
   Income taxes paid                                    $       --      $       --      $       --      $       --
                                                        ============    ============    ============    ============
NONCASH TRANSACTIONS:
   Common stock issued for debt                         $    542,126    $     31,289    $     95,814    $    805,219
   Received treasury stock for note receivable                  --              --              --            25,100
   Common stock issued for patent                               --              --              --           375,000

</TABLE>


SEE  ACCOMPANYING   SUMMARY  OF  ACCOUNTING  POLICIES  AND  NOTES  TO  FINANCIAL
STATEMENTS

                                      F-7

<PAGE>



                                 CYTOGENIX, INC.
                           A DEVELOPMENT STATE COMPANY
                   CONSOLIDATED NOTES TO FINANCIAL STATEMENTS


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
dedifferentiation and transdifferentiation processes. CytoGenix has acquired the
rights for applications 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 in conformity with accounting principles
generally accepted in the United State 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.

Revenue Recognition

CytoGenix's  revenues, if any, are derived from selling research kits. CytoGenix
recognizes revenue when persuasive evidence of an arrangement  exists,  delivery
has occurred,  the sales price is fixed or determinable  and  collectibility  is
probable.

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.


                                      F-8
<PAGE>


Research and Development

Internal research and development  costs are expensed as incurred.  Research and
development  costs include salaries and  personnel-related  costs,  supplies and
materials,  facility  costs,  depreciation  of  facility  property,  and outside
services required to conduct the preclinical development.

Income Taxes

The  asset  and  liability  approach  is used to  account  for  income  taxes by
recognizing  deferred tax assets and  liabilities  for the  expected  future tax
consequences of temporary  differences  between the carrying amounts and the tax
bases of assets and  liabilities.  CytoGenix  records a valuation  allowance  to
reduce the  deferred tax assets to the amount that is more likely than not to be
realized.

Earnings Per Common Share

Basic and  diluted  net loss per share  excludes  dilution  and is  computed  by
dividing net loss by the weighted  average  number of common shares  outstanding
for the period presented

Stock-Based Compensation

CytoGenix  accounts for stock-based  compensation  issued to employees under the
intrinsic  value  method.   Under  this  method,   the  Company   recognizes  no
compensation  expense for stock  options  granted when the number of  underlying
shares is known and exercise price of the option is greater than or equal to the
fair  market  value of the  stock on the date of  grant.  No  options  have been
granted.

CytoGenix accounts for non-cash stock-based compensation issued to non-employees
in  accordance  with the  provisions  of SFAS No. 123.  Common  stock  issued to
non-employees  and consultants is based upon the value of the services  received
or the quoted market price, whichever value is more readily determinable.

Reclassification

Certain amounts in the 2004 and 2003 financial statements have been reclassified
to conform to the December 31, 2005 financial statement presentation.

Recent Accounting Pronouncements

In December  2004,  the FASB,  issued a revision to SFAS 123, also known as SFAS
123R, that amends existing  accounting  pronouncements  for share-based  payment
transactions in which an enterprise  receives employee and certain  non-employee
services  in  exchange  for (a)  equity  instruments  of the  enterprise  or (b)
liabilities  that  are  based  on the  fair  value  of the  enterprise's  equity
instruments  or that may be settled by the issuance of such equity  instruments.
SFAS 123R  eliminates  the  ability  to  account  for  share-based  compensation
transactions  using APB 25 and generally requires such transactions be accounted
for  using a  fair-value-based  method.  SFAS  123R's  effective  date  would be
applicable for awards that are granted,  modified,  become vested, or settled in
cash in interim or annual  periods  beginning  after  June 15,  2005.  SFAS 123R
includes three transition methods: one that provides for prospective application
and two that provide for retrospective application. The Company intends to adopt
SFAS 123R  prospectively  commencing  in the  first of the  fiscal  year  ending
December 31, 2006.  It is expected that the adoption of SFAS 123R will cause the
Company to record,  as  expense  each  quarter,  a  non-cash  accounting  charge
approximating  the fair  value of such  share  based  compensation  meeting  the
criteria outlined in the provisions of SFAS 123R.

In May 2005 the FASB issued FAS 154 which establishes retrospective applications
as the required  method for  reporting a change in  accounting  principle in the
absence  of  explicit  transition  requirements  specific  to the newly  adopted
accounting  principle.  FAS154 also provides  guidance for  determining  whether
retrospective  application of ca change in accounting principle is impracticable
and for reporting a change when retrospective application is impracticable.  FAS
154 is effective in fiscal years  beginning after December 15, 2005. The Company
does not expect the adoption of FAS 154 to  significantly  affect its  financial
condition or results of operations.


                                      F-9
<PAGE>


NOTE 2 - GOING CONCERN

CytoGenix has had negligible  revenues since  inception and none in the last two
year, has incurred losses totaling  $23,058,054 from inception  through December
31, 2005. 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
revenues  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.

NOTE 3 - PROPERTY

Property  consisted  of the  following  as of December 31, 2005 and December 31,
2004 respectively:


   Lab equipment                       5 years     $   104,632   $     114,514
   Office furniture & fixtures         3-7 years        57,759          56,461
   Office equipment                    3-7 years        57,518          45,733
   Leasehold improvements              Lease Term        3,167               -
   Less: accumulated depreciation                     (166,789)       (151,649)
                                                   ------------- --------------
   Net book value                                  $    56,287   $      65,059
                                                   ============= ==============

Depreciation  expense totaled $25,391,  $38,125, and $38,445 for 2005, 2004, and
2003 respectively.

NOTE 4 - ACCRUED EXPENSES

Accrued  expenses  consist mainly of unpaid salaries and unpaid payroll taxes on
cash compensation and stock based  compensation.  Total accrued payroll taxes as
of December 31, 2005 and 2004 was $207,154 and $207,154,  respectively.  Accrued
bonus compensation per employment  agreements was $395,946 and $0 as of December
31, 2005 and 2004, respectively.









                                      F-10
<PAGE>



NOTE 5 - COMMON STOCK ISSUANCES

CytoGenix common stock issuances since inception have been as follows:

STOCK ISSUED FOR SERVICES:
                         Year                         Shares           Amount
                         ----                   ------------      -----------
                         1995                      4,584,500       $     47,383
                         1996                        500,000            375,000
                         1997                      3,687,425            691,392
                         1998                      3,601,021          2,820,826
                         1999                        544,348            468,322
                         2000                        546,171            491,473
                         2001                      1,780,009            334,742
                         2002                      3,162,535          1,016,747
                                                ------------      -------------
                         Sub-total                18,406,009          6,245,885
                         2003                      4,295,315            733,351
                         2004                        482,032            163,242
                         2005                        679,963            328,500

STOCK ISSUED FOR CASH:
                         Year                       Shares           Amount
                         ----                   ------------       ------------
                         1995                        110,000       $     21,000
                         1997                        825,974            129,132
                         1998                      2,964,000            593,800
                         1999                        317,220            130,026
                         2000                      1,268,989            610,800
                         2001                     14,496,853          1,283,958
                         2002                     12,992,411          1,596,043
                                                ------------       ------------
                         Sub-total                32,975,447          4,364,759
                         2003                     31,662,784          1,321,349
                         2004                      8,715,191          1,551,601
                         2005                     13,928,967          3,585,080

In 2005,  restricted  common stock sold for cash was  consistently  sold through
private placement memorandums at a discount.  The difference between the selling
price and the fair market  value on the date sold was  approximately  $6,645,275
for the year.

STOCK ISSUED FOR DEBT:

In 2005, 647,701 shares were issued for debt totaling $542,126.  In 2004, 39,267
shares were issued for debt totaling $31,289.

In 1998,  212,780  shares were issued for debt  totaling  $135,990  and in 2000,
500,000 shares were issued for a patent, recorded at the fair value of the stock
issued totaling $375,000.  In 1999, 20,000,000 shares were put into treasury and
8,229,288 were retired from treasury. In 2001, 2,819,337 shares were retired. In
2003, 121,284 shares were issued for debt totaling $95,814.

NOTE 6 - STOCK OPTIONS AND WARRANTS

In 2004  CytoGenix  issued  1,242,856  warrants  as part of a private  placement
memorandum.  The warrants vested immediately and expired one year from the grant
date. The exercise price on 1,242,856 is $0.28 per share. Of the $0.28 warrants,
642,857 were not  exercised  and expired in 2005.  As of December 31, 2005 there
are no warrants outstanding.




                                      F-11
<PAGE>

NOTE 7 - INCOME TAXES

For the period from inception through December 31, 2005,  CytoGenix has incurred
net losses and,  therefore,  has no tax  liability.  The net  deferred tax asset
generated  by the loss  carry-forward  has been fully  reserved.  The  valuation
allowance increased approximately $1,205,000,  $800,000 and $450,000 for each of
the  years  ending  2005,  2004,  and 2003,  respectively.  The  cumulative  net
operating loss carry-forward is approximately  $14,000,000 at December 31, 2005,
and will expire in the years 2010 through 2025.

Deferred income taxes consist of the following at December 31, 2005 and 2004:

                                             2005                2004
                                             ----                ----
            Long-term:
               Deferred tax assets       $    4,775,000     $    3,550,000
               Valuation allowance           (4,775,000)        (3,550,000)
                                                      -                  -
                                         --------------     --------------
                                         $            -     $            -
                                         ==============     ==============


NOTE 8 - COMMITMENTS AND CONTINGENCIES

Commitments

CytoGenix  leases  office  facilities  under an operating  lease that expires on
December  31,  2009.  Rent  expense  was  $66,455 and $68,407 for 2005 and 2004,
respectively. Monthly rent payments are as follows:

                                     Period               Rent per Month
             ------------------------------------------------------------
             January 1, 2006 - September 30, 2007                 $ 6,179
             October 1, 2007 - September 30, 2009                   6,399

Over the term of the lease the rent  works out to an average of $5,701 per month
starting  December 2003 and ending  September  2009. As of December 31, 2005 and
2004 $32,656 and $38,360 of deferred rent has been recorded and is included with
accrued expenses on the financial statements.

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, 2005, unbilled amounts under the SRA's
totaled approximately $0.

Per the  employment  agreements of the CEO, COO,  CFO,  Chief  Scientist and Lab
Manager a  severance  pay  obligation  for  early  termination  "without  cause"
provides for (a) lump sum cash payment  within 10 of termination an amount equal
to the  employees  base  salary for the  balance of the year of  termination;  a
prorata  portion  of the  incentive  bonus,  if any,  earned  plus  unreimbursed
expenses accruing to the date of termination.  In addition the CEO, COO, and CFO
agreement  stipulate a lump sum cash payment equal to the employee's annual base
salary should be paid upon termination. The cash obligation at December 31, 2005
under these agreements  could result in a cash outflow of  approximately  $1.063
million.

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 has committed
under this  agreement to spending  $350,000 for the year ended December 31, 2006
with the option to for  purchase of $750,000 in 2007,  $1,200,000  in 2008,  and
$2,000,000 in 2009.



                                      F-12
<PAGE>



Beginning in 2005  non-employee  directors  were  compensated  $25,000 per year.
$100,000 was paid to non-employee  directors  during 2005. No cash  compensation
was paid to these directors during 2004 or 2003.

Litigation

Phanuel Pursuits, LLC v. CytoGenix, Inc.

Phanuel Pursuits,  LLC had entered into option agreements  pursuant to obtaining
licenses to commercialize the Company's  anti-herpes product in China and India.
The  Company  allowed  Phanuel to withdraw  from their  original  China  option,
applying the option fees towards the India  option.  Phanuel owed unpaid sums to
the Company  under the  remaining  India Option  Agreement  including a specific
payment due to purchase the Company's data they would need for submission to the
Indian authorities for approval.  Although the unpaid sums remained outstanding,
Phanuel  filed suit October 8, 2004  alleging the Company  withheld the data and
therefore breached the agreement. The suit has been dismissed on the merits from
the trial court with the Court's  granting of the  Company's  Motion for Summary
Judgment.  The Company dropped  itsCounterclaim  against Phanuel,  and Phanuel's
Motion for New Trial has been denied. Because Phanuel failed to file a Notice of
Appeal with the trial court within the permissible  time period,  this action is
final.


William B. Waldroff and Applied Veterinary Genomics, Inc. v. CytoGenix, Inc.

CytoGenix  filed a Declaratory  Judgment  action in February,  2004, to obtain a
finding of  nonliability  with respect to two old license  agreements for single
stranded DNA; one for shrimp,  and one for horses,  originally issued in 1998 to
William B. Waldroff.  Waldroff and Applied Veterinary  Genomics,  Inc. (AVGI), a
party in interest as a sublicensee  of Waldroff's,  counterclaimed  for damages,
attorneys  fees,  unrelated  torts,  and a  permanent  injunction  to honor  the
purported licenses.  A jury trial was held in February,  2005. Both Waldroff and
AVGI also sued three directors of CytoGenix for  interfering  with the licenses.
The jury did not make any findings of liability,  nor assess any damages against
any of the directors or against CytoGenix. The court has preliminarily entered a
judgment  ordering  CytoGenix  to perform  according  to the  licenses,  and for
attorney's fees in the amount of $115,500. After receiving the trial transcript,
the  Company has  appealed  the  court's  judgment  and has filed the record and
appellant's  brief in the Court of Civil Appeals.  Pending appeal  Cytogenix has
established  a long-term  CD in the amount of $115,500 to comply.  This CD earns
interest at a rate of 3.4% annually.


NOTE  9 - Unaudited Quarterly Financial Data

<TABLE>

                                ----------------    ------------------    ---------------    ------------------
                                 First Quarter       Second Quarter       Third Quarter       Fourth Quarter
                                ----------------    ------------------    ---------------    ------------------
<S>                                                                       <C>                <C>

Year Ended December 31, 2005
     Net Sales                       $        -            $        -       $          -          $          -
     Gross Profit                             -                     -                  -                     -
     Net Loss                          (686,845)             (591,514)        (1,065,266)           (1,189,500)
     Basic Loss Per Share                 (0.01)                (0.00)             (0.01)                (0.01)
Year Ended December 31, 2004
     Net Sales                       $        -            $        -       $          -          $          -
     Gross Profit                             -                     -                  -                     -
     Net Loss                          (382,440)             (461,935)          (485,044)           (1,035,957)
     Basic Loss Per Share                 (0.00)                (0.00)             (0.00)                (0.01)

</TABLE>




                                      F-13
<PAGE>





NOTE 10 - SUBSEQUENT EVENTS (UNAUDITED)

The Company issued  916,400 shares of common stock for services  provided in the
first quarter of 2006 pursuant to the exemption  from  registration  provided by
Section  4(2)  of  the  Securities  Act  of  1933  for  transactions   involving
fundraising for private offering.

During March 2006 the Board of Directors  authorized  issuance of up  $3,000,000
worth of restricted share for a private placement.

























                                      F-14
<PAGE>



                                       27
ITEM 9B. OTHER INFORMATION.

NONE.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Except for the  information  relating to Executive  Officers of the  Registrant,
which is included in Part 1, Item 4 of this Report, the information  required by
Item 10 of Form 10-K is incorporated herein by reference to the definitive proxy
statement for the Company's Annual Meeting of Shareholders to be held on May 24,
2006 (the "Proxy Statement").

The  Company  has not  adopted a Code of Ethics  that  applies to the  Company's
principal  executive officers,  the principal  financial officer,  the principal
accounting officer or the controller. No Code of Ethics has been adopted because
the Company and the board of  directors  chose to devote its working  capital to
the Company's  research and development  projects instead of reducing to writing
standards  designed to deter  wrongdoing and promote honest and ethical conduct.
The Board of  Directors  believes  that the  Company's  very  small size and the
limited number of personnel who are responsible for its operations make a formal
Code of Ethics unnecessary.

                                     PART IV

ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES


(A) (1) and (2)  Financial  Statements  and  Financial  Statement  Schedules See
"Index to Consolidated Financial Statements" on page F-1

 (A) (3) EXHIBITS
<TABLE>

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

<S>                                                                             <C>                <C>

     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  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  Securities  and Exchange  Commission  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  Securities  and
                                  Exchange Commission on April 14, 2004).

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

     10.1+                   --   Employment  Agreement dated January 1, 2005 between CytoGenix,  Inc.
                                  and Malcolm H. Skolnick.

     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+                   --   Employment  Agreement dated January 1, 2005 between CytoGenix,  Inc.
                                  and Lawrence Wunderlich.

     10.5*                   --   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).

     10.6+                        Employment  Agreement dated January 1, 2005 between CytoGenix,  Inc.
                                  and Frank Vazquez.

    10.7*+                   --   Stock Option  Plan (incorporated by reference to Annex III of the
                                  definitive proxy statement on schedule 14A filed with the
                                  Securities and Exchange Commission on December 23, 2003).

    10.8*+                   --   Stock Option Plan(incorporated by reference to Annex I of the
                                  definitive proxy statement on schedule 14A filed with the
                                  Securities and Exchange Commission on June 17, 2005).

    10.9*                    --   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
                                  Securities and Exchange Commission on March 28, 2006).

     16.1*                   --   Letter re: change in certifying accountant (incorporated by
                                  reference to exhibit 16.1 to the  registrant's
                                  Current  Report on Form  8-K/A  filed with the
                                  Securities  &  Exchange  Commission  on August
                                  31,2004).

     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

     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.
----------------------
         *Incorporated by reference as indicated.

         +Management contract or compensatory plan or arrangement

</TABLE>

<PAGE>



                                   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/ Malcolm Skolnick
                                       -------------------------------------
                                       MALCOLM SKOLNICK, PH.D.
Date: April 20, 2006                   PRESIDENT AND CHIEF EXECUTIVE OFFICER




<PAGE>





                                                                   Exhibit 10.1

                              EMPLOYMENT AGREEMENT

                  This Employment Agreement  ("Agreement") is dated this 1st day
of January, 2005 to be effective as of January 1, 2005 (the "Effective Date") by
and between Malcolm H. Skolnick (the  "Employee") and CYTOGENIX,  INC., a Nevada
corporation (the "Company").


                  1.       DUTIES AND SCOPE OF EMPLOYMENT.


                           (a) POSITION.  For the term of his  employment  under
this Agreement (the "Employment"),  the Company agrees to employ the Employee in
the position of CHAIRMAN,  PRESIDENT AND CHIEF EXECUTIVE OFFICER. Employee shall
report to the Company's  Board of Directors.  Employee  shall perform the duties
and responsibilities  customarily  associated with such position, and such other
duties and responsibilities that are assigned to him by the Board of Directors.


                           (b)   OBLIGATIONS   TO  THE   COMPANY.   During   his
Employment,  the Employee shall devote  substantially  all of his business time,
attention,  skill  and  efforts  to  the  faithful  performance  of  his  duties
hereunder.  Employee shall not embark on any business  efforts  outside of those
described herein that would be in conflict with the faithful  performance of his
duties as described herein. Any substantial  business obligations outside of the
Employee's  obligations  to the Company  shall be  disclosed in Exhibit A, which
will be  approved by the  Company's  President  and/or  Board of  Directors  and
updated and  reviewed on an annual  basis.  The  Employee  shall comply with the
Company's  policies  and rules as they may be in effect from time to time during
his Employment.


                           (c)  NO   CONFLICTING   OBLIGATIONS.   The   Employee
represents  and  warrants  to the  Company  that he is under no  obligations  or
commitments,  whether  contractual or otherwise,  that are inconsistent with his
obligations under this Agreement or that would represent a conflict of interest.
The  Employee  represents  and  warrants  that he will not use or  disclose,  in
connection  with his  employment  by the  Company,  any trade  secrets  or other
proprietary  information or  intellectual  property in which the Employee or any
other  person has any right,  title or interest and that his  employment  by the
Company as  contemplated  by this  Agreement  will not  infringe  or violate the
rights of any other person or entity.  The Employee  represents  and warrants to
the Company  that he has returned  all  property  and  confidential  information
belonging to any prior employer.


                  2.       CASH AND INCENTIVE COMPENSATION.


                           (a) SALARY.  Except as  contemplated  by Section 2(b)
below,  the Company  shall pay the Employee as  compensation  for his services a
base salary at a gross annual rate of $265,000. Such salary shall be adjusted to
$390,000  effective  January 1, 2006, and thereafter,  on an annual basis by the
Board of  Directors,  and  payable in  accordance  with the  Company's  standard
payroll procedures.  (The annual compensation  specified in this Subsection (a),
together with any increases in such compensation that the Company may grant from
time to time, is referred to in this Agreement as "Base Compensation.")


                           (b )  BONUS.  The  Employee  shall  be  eligible   to
receive a cash bonus each year during the Term hereof based upon the increase in
share price of the Company's  stock as measured by comparing the twenty  trading
day  average  for the period  ending  December  31 of the prior year  versus the
twenty day  trading  average  for the period  ending  December 31 of the year in
question,  and multiplying the percentage  increase in such share price, if any,
times the  Employee's  Base  Compensation  for the year in  question;  provided,
however,  that in no  event  shall a bonus  be  payable  unless  the  percentage
increase in share price is at least fifteen  percent (15%) from the prior year's
period.


                           (c) INSURANCE COVERAGE. The Employee will be eligible
to  participate  in  Company-sponsored  benefit  plans,  including the Company's
medical plan, in the same manner as Company and any third-party benefit provider
make such  opportunities  available to Company's  regular  full-time  employees,
subject to any such third-party  benefit provider's  determination that Employee
is eligible to  participate  in such plan.  The Company shall pay, on Employee's



<PAGE>

behalf,  or reimburse  Employee in the event the Employee paid such amount,  the
amount payable by Employee as a premium for coverage for Employee and his family
under the Company's  health insurance plan, and shall pay the premium for a life
insurance  policy for Employee,  with the proceeds  payable to a beneficiary  or
beneficiaries of his choice, in an amount not more than $ 0 per year.


                           (d) VACATION.  Employee  shall be entitled to no less
than two weeks paid vacation per year, provided
that,  in the event  Employee is unable to use all of such vacation in any given
calendar  year,  Employee  shall be able to carry up to two weeks of vacation to
the following year, but any unused vacation in excess of such two weeks shall be
forfeited.


                           (e)  401(K)  CONTRIBUTIONS.  In the  event  that  the
Company  establishes  a  401(k)  plan  for  its  employees,  and to  the  extent
permissible,  the Company shall match the Employee's contributions to the 401(k)
plan, up to a maximum of 15 percent of Employee's Base  Compensation,  or to the
maximum permitted by law, whichever is lesser.


                           (f) MEDICAL LEAVE.  In the event that the Employee is
disabled or  otherwise  unable to perform his duties  hereunder  for a period in
excess of Employee's  available vacation time and the available sick leave under
the  Company's  then-current  leave  plans,  the  Employee  shall be entitled to
continue  to receive  his full Base  Compensation  for a period of up to six (6)
months,  if necessary.  The Company shall, in addition,  use its best efforts to
obtain a long-term disability policy, at its expense, for Employee, which policy
shall provide that no less than fifty  percent (50%) of Employee's  then-current
Base Compensation  shall be payable to Employee for the remainder of his life or
until he reaches the maximum age  permissible  under such  long-term  disability
plans.


                  3.       BUSINESS  EXPENSES.  During  his  Employment,     the
Employee shall be authorized to incur  necessary and  reasonable  communication,
travel,  entertainment and other business expenses in connection with his duties
hereunder.  The Company  shall  reimburse  the Employee for such  expenses  upon
presentation of an itemized  account and appropriate  supporting  documentation,
all in accordance with the Company's generally applicable policies.


                  4.       TERM OF EMPLOYMENT.

                           (a) BASIC  RULE.  Subject  to the terms of Section 5,
the  Employee's  Employment  with the Company  shall be "at will,"  meaning that
either the Employee or the Company shall be entitled to terminate the Employee's
Employment at any time and for any reason, with or without Cause (in the case of
the Company) or Constructive Termination (in the case of Employee). Any contrary
representations  that may have been made to the Employee  shall be superseded by
this Agreement.  This Agreement shall constitute the full and complete agreement
between the Employee  and the Company on the "at will" nature of the  Employee's
Employment,  which may only be changed in an express written agreement signed by
the Employee and a duly authorized officer of the Company.


                           (b)  TERMINATION.  The  Employee,  or  subject to the
terms of Section 5, the Company, may terminate the Employee's  Employment at any
time and for any reason (or no reason),  and with or without  Cause (in the case
of the Company) or Constructive Termination (in the case of Employee), by giving
the other party notice in writing.  The Employee's  Employment  shall  terminate
automatically in the event of his death.


                           (c)  RIGHTS  UPON  TERMINATION.  Except as  expressly
provided in Section 5, upon the termination of the
Employee's  Employment  pursuant to this Section 4, the  Employee  shall only be
entitled to the compensation,  benefits and reimbursements described in Sections
2 and 3 for the period preceding the effective date of the termination.


                  5.       TERMINATION BENEFITS.


                           (a)  GENERAL  RELEASE.  Any other  provision  of this
Agreement notwithstanding,  Subsections (b) and (c) below shall not apply unless
the  Employee (i) has executed a general  release (in a form  prescribed  by the


<PAGE>

Company)  of all known and  unknown  claims  that he may then have  against  the
Company  or  persons  affiliated  with the  Company,  and (ii) has agreed not to
prosecute any legal action or other proceeding based upon any of such claims.


                           (b)  SEVERANCE  PAY.  If,  during  the  term  of this
Agreement, the Company terminates the Employee's Employment for any reason other
than Cause or  Permanent  Disability,  or if the  Employee  voluntarily  resigns
following a Constructive  Termination,  (collectively,  a "Termination  Event"),
then the Company  shall pay the Employee his Base  Compensation  for a period of
twelve  (12) months  following  the  termination  of his  Employment.  Such Base
Compensation  shall be paid at the rate in effect at the time of the termination
of Employment and in accordance with the Company's standard payroll  procedures.
In addition,  the Company  shall also  reimburse the Employee for the payment of
the  Employee's  COBRA  or  equivalent  other  replacement  medical  and  dental
insurance premiums for a period of twelve (12) months.


                           (c) CHANGE OF CONTROL.  In the event that Employee is
subject to a Termination Event within twelve (12) months of a Change in Control,
then in  addition to the payment  set forth in  subsection  (b) above,  Employee
shall also be  entitled  to receive an  additional  severance  payment  equal to
twelve (12) months' Base  Compensation at the  then-current  rate,  payable in a
lump sum on termination of employment.


                           (d)  DEFINITION  OF "CAUSE." For all  purposes  under
this Agreement, "Cause" shall mean:


                                    (i)   Any    breach   of   the    Invention,
Confidential Information and Non-Competition Agreement  dated  the  date  hereof
between the Employee and the Company, as determined by the Board of Directors of
 the Company;


                                    (ii) Conviction of, or a plea of "guilty" or
"no  contest"  to, a felony,  or a plea of "guilty" or "no  contest" to a lesser
included  offense in exchange for  withdrawal  of a felony  indictment or felony
charge by indictment,  in each case whether arising under the laws of the United
States or any state thereof;


                                    (iii) Gross  misconduct or gross  negligence
in the performance of duties  assigned to the Employee under this Agreement,  as
determined by the Board of Directors; or


                                    (iv) Employee's  repeated failure to perform
substantially  all of the duties of his  employment or to follow and comply with
the reasonable  and lawful  written  directives of the Board of Directors of the
Company  after such  Employee  has been  informed in writing of such failure and
given a period of not less than 30 days to remedy such failure.


                           (e)  DEFINITION  OF  "CHANGE  OF  CONTROL."  For  all
purposes under this Agreement, "Change of Control"
shall mean:


                                    (i)  The   consummation   of  a  merger   or
consolidation  of the Company with or into another entity or any other corporate
reorganization,  if persons who were not stockholders of the Company immediately
prior to such merger,  consolidation  or other  reorganization  own  immediately
after such  merger,  consolidation  or other  reorganization  50% or more of the
voting power of the  outstanding  securities  of each of (A) the  continuing  or
surviving  entity  and (B) any direct or  indirect  parent  corporation  of such
continuing or surviving entity;  provided,  however, that any financing in which
the  Company  shall issue and sell  shares of its  capital  stock or  securities
convertible into equity  securities of the Company shall not constitute a change
in control even if persons who were not stockholders of the Company  immediately
prior to such financing own immediately  after such financing 50% or more of the
voting power of the Company's outstanding securities; or


                                    (ii) The sale, transfer or other disposition
of all or substantially all of the Company's assets or capital stock.

<PAGE>



                           (f) DEFINITION OF "CONSTRUCTIVE TERMINATION." For all
purposes under this Agreement, Constructive Termination shall mean the voluntary
resignation of the Employee within twelve (12) months following:


                                    (i) A change in the Employee's position with
the Company without the Employee's  consent that materially reduces his level of
authority, responsibilities and duties;


                                    (ii)   A   substantial   reduction   in  the
Employee's  Base  Compensation  unless due to a lack of available  funds and the
Employee is treated similarly to all other employees; or


                                    (iii)  Receipt of notice from  Company  that
the  Employee's  principal  workplace  will be  relocated  by more than 50 miles
without his consent.


                           (g)  DEFINITION  OF "PERMANENT  DISABILITY."  For all
purposes  under  this  Agreement,  "Permanent  Disability"  shall  mean that the
Employee,  at the time notice is given,  has failed to perform his duties  under
this  Agreement  (excluding an approved  leave from work or a leave  required by
law) for a period of more than 30 business days in any 90  consecutive  days (or
such longer  period as may be  required by law) as the result of his  incapacity
due to physical or mental injury, disability or illness.


                           (6)     NON-SOLICITATION,      NON-DISCLOSURE     AND
NON-COMPETITION.  The  Employee  has  entered  into an  Invention,  Confidential
Information and Non-Competition Agreement with the Company, in the form attached
hereto as Exhibit B, which is incorporated herein by reference.

                           (7)     INSURANCE. During the term of this Agreement,
the Company will use its best efforts to maintain  liability  insurance to cover
actions of its directors and officers for an amount not less than $5 million and
will include Employee on this policy.


                  8.       SUCCESSORS.


                           (a) COMPANY'S  SUCCESSORS.  This  Agreement  shall be
binding upon any successor  (whether direct or indirect and whether by purchase,
lease, merger, consolidation,  liquidation or otherwise) to all or substantially
all of the Company's  business,  capital stock and/or  assets.  For all purposes
under this  Agreement,  the term  "Company"  shall  include any successor to the
Company's business and/or assets which becomes bound by this Agreement.


                           (b)  EMPLOYEE'S  SUCCESSORS.  This  Agreement and all
rights  of the  Employee  hereunder  shall  inure  to  the  benefit  of,  and be
enforceable  by, the Employee's  personal or legal  representatives,  executors,
administrators, successors, heirs, distributees, devisees and legatees.


                  9.       MISCELLANEOUS PROVISIONS.


                           (a)  NOTICE.  Notices  and all  other  communications
contemplated  by this Agreement  shall be in writing and shall be deemed to have
been duly given when personally  delivered or when mailed by U.S.  registered or
certified mail, return receipt requested and postage prepaid. In the case of the
Employee,  mailed notices shall be addressed to him at the home address which he
most  recently  communicated  to the  Company  in  writing.  In the  case of the
Company,  mailed notices shall be addressed to its corporate  headquarters,  and
all notices shall be directed to the attention of its Secretary.


                           (b) MODIFICATIONS  AND WAIVERS.  No provision of this
Agreement  shall be  modified,  waived or  discharged  unless the  modification,
waiver or discharge is agreed to in writing and signed by the Employee and by an
authorized officer of the Company (other than the Employee). No waiver by either
party of any breach of, or of  compliance  with,  any  condition or provision of
this  Agreement  by the other  party shall be  considered  a waiver of any other
condition or provision or of the same condition or provision at another time.

<PAGE>



                           (c)  WHOLE   AGREEMENT.   This   Agreement   and  the
Invention,  Confidential  Information and Non-Competition  Agreement contain the
entire  understanding  of the parties with respect to the subject matter hereof.
No other agreements,  representations or understandings (whether oral or written
and  whether  express  or  implied)  which are not  expressly  set forth in such
agreements  have been made or entered  into by either  party with respect to the
subject matter hereof.


                           (d) WITHHOLDING  TAXES.  All payments made under this
Agreement  shall be  subject to  reduction  to  reflect  taxes or other  charges
required to be withheld by law.


                           (e) CHOICE OF LAW AND SEVERABILITY. This Agreement is
executed  by the  parties  in the  State of Texas and  shall be  interpreted  in
accordance  with the laws of such State (except their  provisions  governing the
choice of law). If any provision of this Agreement becomes or is deemed invalid,
illegal or unenforceable  in any jurisdiction by reason of the scope,  extent or
duration of its coverage,  then such  provision  shall be deemed  amended to the
extent  necessary to conform to applicable law so as to be valid and enforceable
or, if such  provision  cannot be so amended  without  materially  altering  the
intention  of the  parties,  then  such  provision  shall  be  stricken  and the
remainder  of this  Agreement  shall  continue in full force and effect.  Should
there ever occur any conflict between any provision  contained in this Agreement
and any present or future  statute,  law,  ordinance or  regulation  contrary to
which the parties have no legal right to contract, then the latter shall prevail
but the  provision of this  Agreement  affected  thereby  shall be curtailed and
limited only to the extent necessary to bring it into compliance with applicable
law. All the other terms and provisions of this Agreement shall continue in full
force and effect without impairment or limitation.


                           (f) ARBITRATION. Any controversy or claim arising out
of or  relating  to this  Agreement  or the breach  thereof,  or the  Employee's
Employment or the termination  thereof,  shall be settled in Houston,  Texas, by
arbitration  in  accordance  with  the  National  Rules  for the  Resolution  of
Employment Disputes of the American Arbitration Association. The decision of the
arbitrator shall be final and binding on the parties,  and judgment on the award
rendered  by the  arbitrator  may be  entered in any court  having  jurisdiction
thereof.  The parties  hereby  agree that the  arbitrator  shall be empowered to
enter an equitable  decree mandating  specific  enforcement of the terms of this
Agreement.  The  Company  and the  Employee  shall  share  equally  all fees and
expenses  of  the   arbitrator.   The  Employee   hereby  consents  to  personal
jurisdiction  of the state and federal  courts located in the State of Texas for
any action or proceeding  arising from or relating to this Agreement or relating
to any arbitration in which the parties are participants.


                           (g) NO ASSIGNMENT.  This Agreement and all rights and
obligations  of the Employee  hereunder are personal to the Employee and may not
be  transferred  or assigned by the Employee at any time. The Company may assign
this  Agreement  and all of its rights  hereunder to any parent,  subsidiary  or
affiliate  of Company or to any third party in  connection  with the (i) sale or
transfer of all or  substantially  all of the assets or capital stock of Company
to such third party or (ii) merger or  consolidation  of Company with such third
party.


                           (h)  COUNTERPARTS.  This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but both of
which together shall constitute one and the same instrument.


                  [REMAINDER OF PAGE LEFT BLANK INTENTIONALLY.]


<PAGE>



         IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized  officer,  as of the day and year
first above written.

                                                     EMPLOYEE:




                                                     /s/ Malcolm Skolnick
                                                     --------------------
                                                     Malcolm H. Skolnick



                                                     COMPANY:

                                                     CYTOGENIX, INC.



                                                     By:     /s/Malcolm Skolnick
                                                          ----------------------
                                                     Name:
                                                            --------------------
                                                     Title:   Chairman
                                                             -------------------

<PAGE>



                                    EXHIBIT A
List  of any  business  obligations  of  Employee  where  professional  services
rendered:

         1. None

         2. None

         3. None

         4. None

         5. None





<PAGE>


                                    Exhibit B

    Form of Invention, Confidential Information and Non-Competition Agreement

                                 (See attached)


<PAGE>





                   CONFIDENTIALITY AND NONDISCLOSURE AGREEMENT

         This Confidentiality Agreement (AGREEMENT) is made effective this 7 day
of February,  2005,  between  CYTOGENIX,  INC. of 3100 WILCREST DRIVE,  HOUSTON,
TEXAS  77042  (HEREINAFTER  "CYGX") and  MALCOLM  SKOLNICK of HOUSTON,  TX 77077
(HEREINAFTER "EMPLOYEE")

================================================================================

         In this AGREEMENT, CYGX and EMPLOYEE each own Confidential Information.
CYGX and EMPLOYEE  (hereinafter  collectively  "THE PARTIES") desire to disclose
such Confidential Information to each other.

         CYGX is  engaged in  molecular  biology  research  and  development  of
technologies  related to gene  silencing.  EMPLOYEE has  background and training
useful in CYGX' scientific and business development. Confidential information is
being  disclosed  to  enable  productive   participation  by  EMPLOYEE  in  CYGX
activities. EMPLOYEE has represented that EMPLOYEE will protect the confidential
material and  information  which may be disclosed by CYGX to EMPLOYEE.  CYGX has
represented  that CYGX will protect the  confidential  material and  information
which may be rightfully disclosed by EMPLOYEE to CYGX.

Therefore, THE PARTIES agree as follows:

1.   CONFIDENTIAL  INFORMATION.  The term  "CONFIDENTIAL  INFORMATION" means any
     secret or proprietary  information or material  relating to CYGX' research,
     development  or business  activities,  whether or not owned or developed by
     CYGX, which is not generally known other than by THE PARTIES, and which THE
     PARTIES may obtain through any direct or indirect  contact with THE PARTIES
     or others.

a.   CONFIDENTIAL INFORMATION includes without limitation:  business records and
     plans,    financial    statements,     patents,     patent    applications,
     continuations-in-part,  continuations, divisionals, records, trade secrets,
     technical  information and reports,  products,  inventions,  meeting notes,
     laboratory  notes,  email  and  other  correspondence,  pricing  structure,
     discounts,  costs,  copyrights and other intellectual  property,  market or
     business  segment to be serviced  by THE  PARTIES,  purposes  for which THE
     PARTIES'  service is  offered,  scientific  data,  laboratory  or  clinical
     procedures, and other proprietary information.

b.   CONFIDENTIAL INFORMATION does not include: matters of public knowledge that
     result from disclosure by THE PARTIES, information disclosed by THE PARTIES
     with the prior  written  consent of THE PARTIES  and any other  information
     that THE PARTIES agree in writing is not confidential.

2.   PROTECTION  OF  CONFIDENTIAL   INFORMATION.   THE  PARTIES  understand  and
     acknowledge  that  the  CONFIDENTIAL  INFORMATION  has  been  developed  or
     obtained by THE PARTIES by the investment of significant  time,  effort and
     expense, and that the CONFIDENTIAL  INFORMATION is a valuable,  special and
     unique asset of THE PARTIES  which  provides THE PARTIES with a significant
     competitive advantage.  Therefore,  THE PARTIES agree to hold in confidence
     and to not disclose the  CONFIDENTIAL  INFORMATION  to any person or entity
     without the prior written consent of THE PARTIES.



                                  Page 1 of 3
<PAGE>


     EMPLOYEE shall not disclose to CYGX information possessed by EMPLOYEE which
     EMPLOYEE  is  required  to  maintain  confidential  because  of a  previous
     agreement  unless  EMPLOYEE has obtained  written  agreement from the other
     Party(ies) to said previous agreement related to said disclosure.  Wrongful
     disclosure  of such  confidential  information  to CYGX  may be  considered
     grounds for immediate dismissal.


     Unauthorized  Disclosure  of  Information.  If it appears that EMPLOYEE has
     disclosed  (or has  threatened  to disclose)  CONFIDENTIAL  INFORMATION  in
     violation of this  AGREEMENT,  CYGX shall be entitled to an  injunction  to
     restrain  EMPLOYEE from  disclosing,  in whole or in part, the CONFIDENTIAL
     INFORMATION.  CYGX shall not be prohibited by this  provision from pursuing
     other remedies, including a claim for losses and damages.


3.   RETURN OF  CONFIDENTIAL  INFORMATION.  Upon the  written  request  of CYGX,
     EMPLOYEE shall return to CYGX all materials  whether written,  magnetically
     stored or reduced to any other tangible medium  containing the CONFIDENTIAL
     INFORMATION.  EMPLOYEE shall also deliver to CYGX signed written statements
     signed  certifying  that all materials  have been returned  within five (5)
     days of receipt of the request.

4.   EMPLOYEE grants CYGX the right to use any  confidential  information  which
     EMPLOYEE may rightfully disclose.

5.   EMPLOYEE  agrees that any  CONFIDENTIAL  INFORMATION  developed by EMPLOYEE
     while employed by CYGX is the property of CYGX.  EMPLOYEE further agrees to
     promptly disclose said developed CONFIDENTIAL INFORMATION to CYGX.

6.   EMPLOYEE acknowledges that, as between CYGX and EMPLOYEE,  the CONFIDENTIAL
     INFORMATION and all related copyrights,  patents and all other intellectual
     property rights,  are (and at all times will be) the property of CYGX, even
     if suggestions,  comments,  and/or ideas made by EMPLOYEE are  incorporated
     into the CONFIDENTIAL INFORMATION or related materials during the period of
     this AGREEMENT.

7.   GENERAL PROVISIONS.  This AGREEMENT sets forth the entire  understanding of
     THE PARTIES  regarding  confidentiality.  Any amendments must be in writing
     and signed by both parties.  This  AGREEMENT  shall be construed  under the
     laws of the State of Texas.  This AGREEMENT shall not be assigned by either
     party,  and neither  party may delegate  its duties  under this  AGREEMENT,
     without the prior written consent of the other party.

8.   SEVERABILITY.  Should any part of this Agreement for any reason be declared
     invalid or  unenforceable,  such decision  shall not affect the validity or
     enforceability  of any remaining  portion,  which  remaining  portion shall
     remain in force and effect as if this  Agreement had been executed with the
     invalid  or  unenforceable  portion  thereof  eliminated  and it is  hereby
     declared the intention of the parties  hereto that they would have executed
     the remaining  portion of this Agreement without including therein any such
     part,  parts or portion  which may, for any reason,  be hereafter  declared
     invalid or unenforceable.  Should any material term of this Agreement be in
     conflict any laws or  regulations,  the parties shall in good faith attempt
     to negotiate a lawful  modification  of this Agreement which will preserve,
     to the greatest extent possible, the original expectation of the parties.



                                  Page 2 of 3
<PAGE>


(CYGX)



By:                                                                    2/7/05
    ---------------------------------                                  ------
      Frank Vazquez                                                    Date
      Vice President and COO


(EMPLOYEE)


By:                                                                   2/7/05
    -----------------------------------                               ------
      Malcolm Skolnick                                                 Date


<PAGE>





                                                                    Exhibit 10.4

                              EMPLOYMENT AGREEMENT


                  This Employment Agreement  ("Agreement") is dated this 1st day
of January, 2005 to be effective as of January 1, 2005 (the "Effective Date") by
and between  Lawrence M.  Wunderlich  (the  "Employee")  and CYTOGENIX,  INC., a
Nevada corporation (the "Company").

                  1.       DUTIES AND SCOPE OF EMPLOYMENT.

                           (a) POSITION.  For the term of his  employment  under
this Agreement (the "Employment"),  the Company agrees to employ the Employee in
the position of CHIEF FINANCIAL OFFICER.  Employee shall report to the Company's
President and Chief  Executive  Officer.  Employee  shall perform the duties and
responsibilities  customarily  associated  with such  position,  and such  other
duties and responsibilities  that are assigned to him by the President and Chief
Executive Officer and/or the Board of Directors.

                           (b)   OBLIGATIONS   TO  THE   COMPANY.   During   his
Employment,  the Employee shall devote  substantially  all of his business time,
attention,  skill  and  efforts  to  the  faithful  performance  of  his  duties
hereunder.  Employee shall not embark on any business  efforts  outside of those
described herein that would be in conflict with the faithful  performance of his
duties as described herein. Any substantial  business obligations outside of the
Employee's  obligations  to the Company  shall be  disclosed in Exhibit A, which
will be  approved by the  Company's  President  and/or  Board of  Directors  and
updated and  reviewed on an annual  basis.  The  Employee  shall comply with the
Company's  policies  and rules as they may be in effect from time to time during
his Employment.

                           (c)  NO   CONFLICTING   OBLIGATIONS.   The   Employee
represents  and  warrants  to the  Company  that he is under no  obligations  or
commitments,  whether  contractual or otherwise,  that are inconsistent with his
obligations under this Agreement or that would represent a conflict of interest.
The  Employee  represents  and  warrants  that he will not use or  disclose,  in
connection  with his  employment  by the  Company,  any trade  secrets  or other
proprietary  information or  intellectual  property in which the Employee or any
other  person has any right,  title or interest and that his  employment  by the
Company as  contemplated  by this  Agreement  will not  infringe  or violate the
rights of any other person or entity.  The Employee  represents  and warrants to
the Company  that he has returned  all  property  and  confidential  information
belonging to any prior employer.

                  2.       CASH AND INCENTIVE COMPENSATION.

                           (a) SALARY.  Except as  contemplated  by Section 2(b)
below,  the Company  shall pay the Employee as  compensation  for his services a
base salary at a gross annual rate of $205,000. Such salary shall be adjusted to
$250,000  effective  January 1, 2006, and thereafter,  on an annual basis by the
Board of  Directors,  and  payable in  accordance  with the  Company's  standard
payroll procedures.  (The annual compensation  specified in this Subsection (a),
together with any increases in such compensation that the Company may grant from
time to time, is referred to in this Agreement as "Base Compensation.")

                           (b) BONUS.  The Employee shall be eligible to receive
a cash bonus each year during the Term hereof  based upon the  increase in share
price of the  Company's  stock as measured by comparing  the twenty  trading day
average  for the period  ending  December 31 of the prior year versus the twenty
day trading  average for the period ending  December 31 of the year in question,
and multiplying  the percentage  increase in such share price, if any, times the
Employee's Base Compensation for the year in question;  provided,  however, that
in no event  shall a bonus be payable  unless the  percentage  increase in share
price is at least fifteen percent (15%) from the prior year's period.

                           (c) INSURANCE COVERAGE. The Employee will be eligible
to  participate  in  Company-sponsored  benefit  plans,  including the Company's
medical plan, in the same manner as Company and any third-party benefit provider
make such  opportunities  available to Company's  regular  full-time  employees,
subject to any such third-party  benefit provider's  determination that Employee
is eligible to  participate  in such plan.  The Company shall pay, on Employee's
behalf,  or reimburse  Employee in the event the Employee paid such amount,  the
amount payable by Employee as a premium for coverage for Employee and his family


<PAGE>

under the Company's  health insurance plan, and shall pay the premium for a life
insurance  policy for Employee,  with the proceeds  payable to a beneficiary  or
beneficiaries of his choice, in an amount not more than $0 per year.

                           (d) VACATION.  Employee  shall be entitled to no less

than two weeks paid vacation per year,  provided  that, in the event Employee is
unable to use all of such vacation in any given calendar year, Employee shall be
able to carry up to two weeks of vacation to the following  year, but any unused
vacation in excess of such two weeks shall be forfeited.

                           (e) 401(K)  CONTRIBUTIONS.  In the event that the
Company  establishes  a  401(k)  plan  for  its  employees,  and to  the  extent
permissible,  the Company shall match the Employee's contributions to the 401(k)
plan, up to a maximum of 15 percent of Employee's Base  Compensation,  or to the
maximum permitted by law, whichever is lesser.

                           (f) MEDICAL LEAVE.  In the event that the Employee is
disabled or  otherwise  unable to perform his duties  hereunder  for a period in
excess of Employee's  available vacation time and the available sick leave under
the  Company's  then-current  leave  plans,  the  Employee  shall be entitled to
continue  to receive  his full Base  Compensation  for a period of up to six (6)
months,  if necessary.  The Company shall, in addition,  use its best efforts to
obtain a long-term disability policy, at its expense, for Employee, which policy
shall provide that no less than fifty  percent (50%) of Employee's  then-current
Base Compensation  shall be payable to Employee for the remainder of his life or
until he reaches the maximum age  permissible  under such  long-term  disability
plans.

                  3.  BUSINESS  EXPENSES.  During his  Employment,  the Employee
shall be authorized to incur  necessary and  reasonable  communication,  travel,
entertainment  and  other  business  expenses  in  connection  with  his  duties
hereunder.  The Company  shall  reimburse  the Employee for such  expenses  upon
presentation of an itemized  account and appropriate  supporting  documentation,
all in accordance with the Company's generally applicable policies.

                  4.       TERM OF EMPLOYMENT.

                           (a) BASIC  RULE.  Subject  to the terms of Section 5,
the  Employee's  Employment  with the Company  shall be "at will,"  meaning that
either the Employee or the Company shall be entitled to terminate the Employee's
Employment at any time and for any reason, with or without Cause (in the case of
the Company) or Constructive Termination (in the case of Employee). Any contrary
representations  that may have been made to the Employee  shall be superseded by
this Agreement.  This Agreement shall constitute the full and complete agreement
between the Employee  and the Company on the "at will" nature of the  Employee's
Employment,  which may only be changed in an express written agreement signed by
the Employee and a duly authorized officer of the Company.

                           (b)  TERMINATION.  The  Employee,  or  subject to the
terms of Section 5, the Company, may terminate the Employee's  Employment at any
time and for any reason (or no reason),  and with or without  Cause (in the case
of the Company) or Constructive Termination (in the case of Employee), by giving
the other party notice in writing.  The Employee's  Employment  shall  terminate
automatically in the event of his death.

                           (c)  RIGHTS  UPON  TERMINATION.  Except as  expressly
provided  in  Section  5,  upon the  termination  of the  Employee's  Employment
pursuant  to  this  Section  4,  the  Employee  shall  only be  entitled  to the
compensation,  benefits and reimbursements described in Sections 2 and 3 for the
period preceding the effective date of the termination.

                  5.       TERMINATION BENEFITS.

                           (a)  GENERAL  RELEASE.  Any other  provision  of this
Agreement notwithstanding,  Subsections (b) and (c) below shall not apply unless
the  Employee (i) has executed a general  release (in a form  prescribed  by the
Company)  of all known and  unknown  claims  that he may then have  against  the
Company  or  persons  affiliated  with the  Company,  and (ii) has agreed not to
prosecute any legal action or other proceeding based upon any of such claims.


<PAGE>


                           (b)  SEVERANCE  PAY.  If,  during  the  term  of this
Agreement, the Company terminates the Employee's Employment for any reason other
than Cause or  Permanent  Disability,  or if the  Employee  voluntarily  resigns
following a Constructive  Termination,  (collectively,  a "Termination  Event"),
then the Company  shall pay the Employee his Base  Compensation  for a period of
twelve  (12) months  following  the  termination  of his  Employment.  Such Base
Compensation  shall be paid at the rate in effect at the time of the termination
of Employment and in accordance with the Company's standard payroll  procedures.
In addition,  the Company  shall also  reimburse the Employee for the payment of
the  Employee's  COBRA  or  equivalent  other  replacement  medical  and  dental
insurance premiums for a period of twelve (12) months.

                           (c) CHANGE OF CONTROL.  In the event that Employee is
subject to a Termination Event within twelve (12) months of a Change in Control,
then in  addition to the payment  set forth in  subsection  (b) above,  Employee
shall also be  entitled  to receive an  additional  severance  payment  equal to
twelve (12) months' Base  Compensation at the  then-current  rate,  payable in a
lump sum on termination of employment.

                           (d)  DEFINITION  OF "CAUSE." For all  purposes  under
this Agreement, "Cause" shall mean:

                                    (i)   Any    breach   of   the    Invention,
Confidential  Information  and  Non-Competition  Agreement dated the date hereof
between the Employee and the Company, as determined by the Board of Directors of
the Company;

                                    (ii) Conviction of, or a plea of "guilty" or
"no  contest"  to, a felony,  or a plea of "guilty" or "no  contest" to a lesser
included  offense in exchange for  withdrawal  of a felony  indictment or felony
charge by indictment,  in each case whether arising under the laws of the United
States or any state thereof;

                                    (iii) Gross  misconduct or gross  negligence
in the performance of duties  assigned to the Employee under this Agreement,  as
determined by the Board of Directors; or

                                    (iv) Employee's  repeated failure to perform
substantially  all of the duties of his  employment or to follow and comply with
the reasonable  and lawful  written  directives of the Board of Directors of the
Company  after such  Employee  has been  informed in writing of such failure and
given a period of not less than 30 days to remedy such failure.

                           (e)  DEFINITION  OF  "CHANGE  OF  CONTROL."  For  all
purposes under this Agreement, "Change of Control" shall mean:

                                    (i)  The   consummation   of  a  merger   or
consolidation  of the Company with or into another entity or any other corporate
reorganization,  if persons who were not stockholders of the Company immediately
prior to such merger,  consolidation  or other  reorganization  own  immediately
after such  merger,  consolidation  or other  reorganization  50% or more of the
voting power of the  outstanding  securities  of each of (A) the  continuing  or
surviving  entity  and (B) any direct or  indirect  parent  corporation  of such
continuing or surviving entity;  provided,  however, that any financing in which
the  Company  shall issue and sell  shares of its  capital  stock or  securities
convertible into equity  securities of the Company shall not constitute a change
in control even if persons who were not stockholders of the Company  immediately
prior to such financing own immediately  after such financing 50% or more of the
voting power of the Company's outstanding securities; or

                                    (ii) The sale, transfer or other disposition
of all or substantially all of the Company's assets or capital stock.

                           (f) DEFINITION OF "CONSTRUCTIVE TERMINATION." For all
purposes under this Agreement, Constructive Termination shall mean the voluntary
resignation of the Employee within twelve (12) months following:

                                    (i) A change in the Employee's position with
the Company without the Employee's  consent that materially reduces his level of
authority, responsibilities and duties;


<PAGE>


                                    (ii)   A   substantial   reduction   in  the
Employee's  Base  Compensation  unless due to a lack of available  funds and the
Employee is treated similarly to all other employees; or

                                    (iii)  Receipt of notice from  Company  that
the  Employee's  principal  workplace  will be  relocated  by more than 50 miles
without his consent.

                           (g)  DEFINITION  OF "PERMANENT  DISABILITY."  For all
purposes  under  this  Agreement,  "Permanent  Disability"  shall  mean that the
Employee,  at the time notice is given,  has failed to perform his duties  under
this  Agreement  (excluding an approved  leave from work or a leave  required by
law) for a period of more than 30 business days in any 90  consecutive  days (or
such longer  period as may be  required by law) as the result of his  incapacity
due to physical or mental injury, disability or illness.

                  6.       NON-SOLICITATION, NON-DISCLOSURE AND NON-COMPETITION.
The  Employee  has  entered  into an  Invention,  Confidential  Information  and
Non-Competition  Agreement  with the  Company,  in the form  attached  hereto as
Exhibit B, which is incorporated herein by reference.

                  7.       INSURANCE.  During the term of this Agreement,  the
Company  will use its best  efforts to  maintain  liability  insurance  to cover
actions of its directors and officers for an amount not less than $5 million and
will include Employee on this policy.

                  8.       SUCCESSORS.

                           (a) COMPANY'S  SUCCESSORS.  This  Agreement  shall be
binding upon any successor  (whether direct or indirect and whether by purchase,
lease, merger, consolidation,  liquidation or otherwise) to all or substantially
all of the Company's  business,  capital stock and/or  assets.  For all purposes
under this  Agreement,  the term  "Company"  shall  include any successor to the
Company's business and/or assets which becomes bound by this Agreement.

                           (b)  EMPLOYEE'S  SUCCESSORS.  This  Agreement and all

rights  of the  Employee  hereunder  shall  inure  to  the  benefit  of,  and be
enforceable  by, the Employee's  personal or legal  representatives,  executors,
administrators, successors, heirs, distributees, devisees and legatees.

                  9.       MISCELLANEOUS PROVISIONS.

                           (a)  NOTICE.  Notices  and all  other  communications
contemplated  by this Agreement  shall be in writing and shall be deemed to have
been duly given when personally  delivered or when mailed by U.S.  registered or
certified mail, return receipt requested and postage prepaid. In the case of the
Employee,  mailed notices shall be addressed to him at the home address which he
most  recently  communicated  to the  Company  in  writing.  In the  case of the
Company,  mailed notices shall be addressed to its corporate  headquarters,  and
all notices shall be directed to the attention of its Secretary.

                           (b) MODIFICATIONS  AND WAIVERS.  No provision of this
Agreement  shall be  modified,  waived or  discharged  unless the  modification,
waiver or discharge is agreed to in writing and signed by the Employee and by an
authorized officer of the Company (other than the Employee). No waiver by either
party of any breach of, or of  compliance  with,  any  condition or provision of
this  Agreement  by the other  party shall be  considered  a waiver of any other
condition or provision or of the same condition or provision at another time.

                           (c)  WHOLE   AGREEMENT.   This   Agreement   and  the
Invention,  Confidential  Information and Non-Competition  Agreement contain the
entire  understanding  of the parties with respect to the subject matter hereof.
No other agreements,  representations or understandings (whether oral or written
and  whether  express  or  implied)  which are not  expressly  set forth in such
agreements  have been made or entered  into by either  party with respect to the
subject matter hereof.

                           (d) WITHHOLDING  TAXES.  All payments made under this
Agreement  shall be  subject to  reduction  to  reflect  taxes or other  charges
required to be withheld by law.


<PAGE>

                           (e) CHOICE OF LAW AND SEVERABILITY. This Agreement is
executed  by the  parties  in the  State of Texas and  shall be  interpreted  in
accordance  with the laws of such State (except their  provisions  governing the
choice of law). If any provision of this Agreement becomes or is deemed invalid,
illegal or unenforceable  in any jurisdiction by reason of the scope,  extent or
duration of its coverage,  then such  provision  shall be deemed  amended to the
extent  necessary to conform to applicable law so as to be valid and enforceable
or, if such  provision  cannot be so amended  without  materially  altering  the
intention  of the  parties,  then  such  provision  shall  be  stricken  and the
remainder  of this  Agreement  shall  continue in full force and effect.  Should
there ever occur any conflict between any provision  contained in this Agreement
and any present or future  statute,  law,  ordinance or  regulation  contrary to
which the parties have no legal right to contract, then the latter shall prevail
but the  provision of this  Agreement  affected  thereby  shall be curtailed and
limited only to the extent necessary to bring it into compliance with applicable
law. All the other terms and provisions of this Agreement shall continue in full
force and effect without impairment or limitation.

                           (f) ARBITRATION. Any controversy or claim arising out
of or  relating  to this  Agreement  or the breach  thereof,  or the  Employee's
Employment or the termination  thereof,  shall be settled in Houston,  Texas, by
arbitration  in  accordance  with  the  National  Rules  for the  Resolution  of
Employment Disputes of the American Arbitration Association. The decision of the
arbitrator shall be final and binding on the parties,  and judgment on the award
rendered  by the  arbitrator  may be  entered in any court  having  jurisdiction
thereof.  The parties  hereby  agree that the  arbitrator  shall be empowered to
enter an equitable  decree mandating  specific  enforcement of the terms of this
Agreement.  The  Company  and the  Employee  shall  share  equally  all fees and
expenses  of  the   arbitrator.   The  Employee   hereby  consents  to  personal
jurisdiction  of the state and federal  courts located in the State of Texas for
any action or proceeding  arising from or relating to this Agreement or relating
to any arbitration in which the parties are participants.

                           (g) NO ASSIGNMENT.  This Agreement and all rights and
obligations  of the Employee  hereunder are personal to the Employee and may not
be  transferred  or assigned by the Employee at any time. The Company may assign
this  Agreement  and all of its rights  hereunder to any parent,  subsidiary  or
affiliate  of Company or to any third party in  connection  with the (i) sale or
transfer of all or  substantially  all of the assets or capital stock of Company
to such third party or (ii) merger or  consolidation  of Company with such third
party.

                           (h)  COUNTERPARTS.  This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but both of
which together shall constitute one and the same instrument.







                  [REMAINDER OF PAGE LEFT BLANK INTENTIONALLY.]


<PAGE>



         IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized  officer,  as of the day and year
first above written.

                                             EMPLOYEE:




                                             /s/ Lawrence M. Wunderlich
                                                 -------------------------
                                                 Lawrence M. Wunderlich


                                             COMPANY:

                                             CYTOGENIX, INC.




                                             By:      /s/ Malcolm Skolnick
                                                      ---------------------
                                             Name:
                                                      ---------------------
                                             Title:   President and CEO
                                                      ---------------------


<PAGE>



                                    EXHIBIT A



List  of any  business  obligations  of  Employee  where  professional  services
rendered:

         1. None

         2. None

         3. None

         4. None

         5. None





<PAGE>



                                    EXHIBIT B

    Form of Invention, Confidential Information and Non-Competition Agreement

                                 (See attached)



<PAGE>


                   CONFIDENTIALITY AND NONDISCLOSURE AGREEMENT

         This Confidentiality Agreement (AGREEMENT) is made effective this 7 day
of February,  2005,  between  CYTOGENIX,  INC. of 3100 WILCREST DRIVE,  HOUSTON,
TEXAS 77042 (HEREINAFTER  "CYGX") and LAWRENCE  WUNDERLICH of HOUSTON,  TX 77077
(HEREINAFTER "EMPLOYEE")

================================================================================

         In this AGREEMENT, CYGX and EMPLOYEE each own Confidential Information.
CYGX and EMPLOYEE  (hereinafter  collectively  "THE PARTIES") desire to disclose
such Confidential Information to each other.

         CYGX is  engaged in  molecular  biology  research  and  development  of
technologies  related to gene  silencing.  EMPLOYEE has  background and training
useful in CYGX' scientific and business development. Confidential information is
being  disclosed  to  enable  productive   participation  by  EMPLOYEE  in  CYGX
activities. EMPLOYEE has represented that EMPLOYEE will protect the confidential
material and  information  which may be disclosed by CYGX to EMPLOYEE.  CYGX has
represented  that CYGX will protect the  confidential  material and  information
which may be rightfully disclosed by EMPLOYEE to CYGX.

Therefore, THE PARTIES agree as follows:

1.   CONFIDENTIAL  INFORMATION.  The term  "CONFIDENTIAL  INFORMATION" means any
     secret or proprietary  information or material  relating to CYGX' research,
     development  or business  activities,  whether or not owned or developed by
     CYGX, which is not generally known other than by THE PARTIES, and which THE
     PARTIES may obtain through any direct or indirect  contact with THE PARTIES
     or others.

a.   CONFIDENTIAL INFORMATION includes without limitation:  business records and
     plans,    financial    statements,     patents,     patent    applications,
     continuations-in-part,  continuations, divisionals, records, trade secrets,
     technical  information and reports,  products,  inventions,  meeting notes,
     laboratory  notes,  email  and  other  correspondence,  pricing  structure,
     discounts,  costs,  copyrights and other intellectual  property,  market or
     business  segment to be serviced  by THE  PARTIES,  purposes  for which THE
     PARTIES'  service is  offered,  scientific  data,  laboratory  or  clinical
     procedures, and other proprietary information.

b.   CONFIDENTIAL INFORMATION does not include: matters of public knowledge that
     result from disclosure by THE PARTIES, information disclosed by THE PARTIES
     with the prior  written  consent of THE PARTIES  and any other  information
     that THE PARTIES agree in writing is not confidential.

2.   PROTECTION  OF  CONFIDENTIAL   INFORMATION.   THE  PARTIES  understand  and
     acknowledge  that  the  CONFIDENTIAL  INFORMATION  has  been  developed  or
     obtained by THE PARTIES by the investment of significant  time,  effort and
     expense, and that the CONFIDENTIAL  INFORMATION is a valuable,  special and
     unique asset of THE PARTIES  which  provides THE PARTIES with a significant
     competitive advantage.  Therefore,  THE PARTIES agree to hold in confidence
     and to not disclose the  CONFIDENTIAL  INFORMATION  to any person or entity
     without the prior written consent of THE PARTIES.



                                  Page 1 of 3
<PAGE>

     EMPLOYEE shall not disclose to CYGX information possessed by EMPLOYEE which
     EMPLOYEE  is  required  to  maintain  confidential  because  of a  previous
     agreement  unless  EMPLOYEE has obtained  written  agreement from the other
     Party(ies) to said previous agreement related to said disclosure.  Wrongful
     disclosure  of such  confidential  information  to CYGX  may be  considered
     grounds for immediate dismissal.


     Unauthorized  Disclosure  of  Information.  If it appears that EMPLOYEE has
     disclosed  (or has  threatened  to disclose)  CONFIDENTIAL  INFORMATION  in
     violation of this  AGREEMENT,  CYGX shall be entitled to an  injunction  to
     restrain  EMPLOYEE from  disclosing,  in whole or in part, the CONFIDENTIAL
     INFORMATION.  CYGX shall not be prohibited by this  provision from pursuing
     other remedies, including a claim for losses and damages.


3.   RETURN OF  CONFIDENTIAL  INFORMATION.  Upon the  written  request  of CYGX,
     EMPLOYEE shall return to CYGX all materials  whether written,  magnetically
     stored or reduced to any other tangible medium  containing the CONFIDENTIAL
     INFORMATION.  EMPLOYEE shall also deliver to CYGX signed written statements
     signed  certifying  that all materials  have been returned  within five (5)
     days of receipt of the request.

4.   EMPLOYEE grants CYGX the right to use any  confidential  information  which
     EMPLOYEE may rightfully disclose.

5.   EMPLOYEE  agrees that any  CONFIDENTIAL  INFORMATION  developed by EMPLOYEE
     while employed by CYGX is the property of CYGX.  EMPLOYEE further agrees to
     promptly disclose said developed CONFIDENTIAL INFORMATION to CYGX.

6.   EMPLOYEE acknowledges that, as between CYGX and EMPLOYEE,  the CONFIDENTIAL
     INFORMATION and all related copyrights,  patents and all other intellectual
     property rights,  are (and at all times will be) the property of CYGX, even
     if suggestions,  comments,  and/or ideas made by EMPLOYEE are  incorporated
     into the CONFIDENTIAL INFORMATION or related materials during the period of
     this AGREEMENT.

7.   GENERAL PROVISIONS.  This AGREEMENT sets forth the entire  understanding of
     THE PARTIES  regarding  confidentiality.  Any amendments must be in writing
     and signed by both parties.  This  AGREEMENT  shall be construed  under the
     laws of the State of Texas.  This AGREEMENT shall not be assigned by either
     party,  and neither  party may delegate  its duties  under this  AGREEMENT,
     without the prior written consent of the other party.

8.   SEVERABILITY.  Should any part of this Agreement for any reason be declared
     invalid or  unenforceable,  such decision  shall not affect the validity or
     enforceability  of any remaining  portion,  which  remaining  portion shall
     remain in force and effect as if this  Agreement had been executed with the
     invalid  or  unenforceable  portion  thereof  eliminated  and it is  hereby
     declared the intention of the parties  hereto that they would have executed
     the remaining  portion of this Agreement without including therein any such
     part,  parts or portion  which may, for any reason,  be hereafter  declared
     invalid or unenforceable.  Should any material term of this Agreement be in
     conflict any laws or  regulations,  the parties shall in good faith attempt
     to negotiate a lawful  modification  of this Agreement which will preserve,
     to the greatest extent possible, the original expectation of the parties.



                                  Page 2 of 3


<PAGE>

(CYGX)



By:                                                                 2/7/05
    -----------------------------------                          --------------
      Malcolm Skolnick                                                 Date
      President and CEO


(EMPLOYEE)


By:                                                                 2/7/05
    -----------------------------------                          -------------
      Lawrence Wunderlich                                              Date




                                  Page 3 of 3
<PAGE>

                                                                    Exhibit 10.6

                              EMPLOYMENT AGREEMENT


                  This Employment Agreement  ("Agreement") is dated this 1st day
of January, 2005 to be effective as of January 1, 2005 (the "Effective Date") by
and between  Frank  Vazquez  (the  "Employee")  and  CYTOGENIX,  INC.,  a Nevada
corporation (the "Company").


                  1.       DUTIES AND SCOPE OF EMPLOYMENT.


                           (a) POSITION.  For the term of his  employment  under
this Agreement (the "Employment"),  the Company agrees to employ the Employee in
the position of EXECUTIVE VICE PRESIDENT AND CHIEF OPERATING  OFFICER.  Employee
shall report to the Company's  President and Chief Executive  Officer.  Employee
shall perform the duties and responsibilities  customarily  associated with such
position, and such other duties and responsibilities that are assigned to him by
the President and Chief Executive Officer and/or the Board of Directors.


                           (b)   OBLIGATIONS   TO  THE   COMPANY.   During   his
Employment,  the Employee shall devote  substantially  all of his business time,
attention,  skill  and  efforts  to  the  faithful  performance  of  his  duties
hereunder.  Employee shall not embark on any business  efforts  outside of those
described herein that would be in conflict with the faithful  performance of his
duties as described herein. Any substantial  business obligations outside of the
Employee's  obligations  to the Company  shall be  disclosed in Exhibit A, which
will be  approved by the  Company's  President  and/or  Board of  Directors  and
updated and  reviewed on an annual  basis.  The  Employee  shall comply with the
Company's  policies  and rules as they may be in effect from time to time during
his Employment.


                           (c)  NO   CONFLICTING   OBLIGATIONS.   The   Employee
represents  and  warrants  to the  Company  that he is under no  obligations  or
commitments,  whether  contractual or otherwise,  that are inconsistent with his
obligations under this Agreement or that would represent a conflict of interest.
The  Employee  represents  and  warrants  that he will not use or  disclose,  in
connection  with his  employment  by the  Company,  any trade  secrets  or other
proprietary  information or  intellectual  property in which the Employee or any
other  person has any right,  title or interest and that his  employment  by the
Company as  contemplated  by this  Agreement  will not  infringe  or violate the
rights of any other person or entity.  The Employee  represents  and warrants to
the Company  that he has returned  all  property  and  confidential  information
belonging to any prior employer.


                  2.       CASH AND INCENTIVE COMPENSATION.


                           (a) SALARY.  Except as  contemplated  by Section 2(b)
below,  the Company  shall pay the Employee as  compensation  for his services a
base salary at a gross annual rate of $205,000. Such salary shall be adjusted to
$250,000  effective  January 1, 2006, and thereafter,  on an annual basis by the
Board of  Directors,  and  payable in  accordance  with the  Company's  standard
payroll procedures.  (The annual compensation  specified in this Subsection (a),
together with any increases in such compensation that the Company may grant from
time to time, is referred to in this Agreement as "Base Compensation.")


                           (b) BONUS.  The Employee shall be eligible to receive
a cash bonus each year during the Term hereof  based upon the  increase in share
price of the  Company's  stock as measured by comparing  the twenty  trading day
average  for the period  ending  December 31 of the prior year versus the twenty
day trading  average for the period ending  December 31 of the year in question,
and multiplying  the percentage  increase in such share price, if any, times the
Employee's Base Compensation for the year in question;  provided,  however, that
in no event  shall a bonus be payable  unless the  percentage  increase in share
price is at least fifteen percent (15%) from the prior year's period.


                           (c) INSURANCE COVERAGE. The Employee will be eligible
to  participate  in  Company-sponsored  benefit  plans,  including the Company's


<PAGE>

medical plan, in the same manner as Company and any third-party benefit provider
make such  opportunities  available to Company's  regular  full-time  employees,
subject to any such third-party  benefit provider's  determination that Employee
is eligible to  participate  in such plan.  The Company shall pay, on Employee's
behalf,  or reimburse  Employee in the event the Employee paid such amount,  the
amount payable by Employee as a premium for coverage for Employee and his family
under the Company's  health insurance plan, and shall pay the premium for a life
insurance  policy for Employee,  with the proceeds  payable to a beneficiary  or
beneficiaries of his choice, in an amount not more than $0 per year.


                           (d) VACATION.  Employee  shall be entitled to no less
than two weeks paid vacation per year,  provided  that, in the event Employee is
unable to use all of such vacation in any given calendar year, Employee shall be
able to carry up to two weeks of vacation to the following  year, but any unused
vacation in excess of such two weeks shall be forfeited.


                           (e)      401(K) CONTRIBUTIONS.  In the event that the
Company  establishes  a  401(k)  plan  for  its  employees,  and to  the  extent
permissible,  the Company shall match the Employee's contributions to the 401(k)
plan, up to a maximum of 15 percent of Employee's Base  Compensation,  or to the
maximum permitted by law, whichever is lesser.


                           (f) MEDICAL LEAVE.  In the event that the Employee is
disabled or  otherwise  unable to perform his duties  hereunder  for a period in
excess of Employee's  available vacation time and the available sick leave under
the  Company's  then-current  leave  plans,  the  Employee  shall be entitled to
continue  to receive  his full Base  Compensation  for a period of up to six (6)
months,  if necessary.  The Company shall, in addition,  use its best efforts to
obtain a long-term disability policy, at its expense, for Employee, which policy
shall provide that no less than fifty  percent (50%) of Employee's  then-current
Base Compensation  shall be payable to Employee for the remainder of his life or
until he reaches the maximum age  permissible  under such  long-term  disability
plans.

                  3.  BUSINESS  EXPENSES.  During his  Employment,  the Employee
shall be authorized to incur  necessary and  reasonable  communication,  travel,
entertainment  and  other  business  expenses  in  connection  with  his  duties
hereunder.  The Company  shall  reimburse  the Employee for such  expenses  upon
presentation of an itemized  account and appropriate  supporting  documentation,
all in accordance with the Company's generally applicable policies.


                  4.       TERM OF EMPLOYMENT.

                           (a) BASIC  RULE.  Subject  to the terms of Section 5,
the  Employee's  Employment  with the Company  shall be "at will,"  meaning that
either the Employee or the Company shall be entitled to terminate the Employee's
Employment at any time and for any reason, with or without Cause (in the case of
the Company) or Constructive Termination (in the case of Employee). Any contrary
representations  that may have been made to the Employee  shall be superseded by
this Agreement.  This Agreement shall constitute the full and complete agreement
between the Employee  and the Company on the "at will" nature of the  Employee's
Employment,  which may only be changed in an express written agreement signed by
the Employee and a duly authorized officer of the Company.


                           (b)  TERMINATION.  The  Employee,  or  subject to the
terms of Section 5, the Company, may terminate the Employee's  Employment at any
time and for any reason (or no reason),  and with or without  Cause (in the case
of the Company) or Constructive Termination (in the case of Employee), by giving
the other party notice in writing.  The Employee's  Employment  shall  terminate
automatically in the event of his death.


                           (c)  RIGHTS  UPON  TERMINATION.  Except as  expressly
provided  in  Section  5,  upon the  termination  of the  Employee's  Employment
pursuant  to  this  Section  4,  the  Employee  shall  only be  entitled  to the
compensation,  benefits and reimbursements described in Sections 2 and 3 for the
period preceding the effective date of the termination.


<PAGE>



                  5.       TERMINATION BENEFITS.


                           (a)  GENERAL  RELEASE.  Any other  provision  of this
Agreement notwithstanding,  Subsections (b) and (c) below shall not apply unless
the  Employee (i) has executed a general  release (in a form  prescribed  by the
Company)  of all known and  unknown  claims  that he may then have  against  the
Company  or  persons  affiliated  with the  Company,  and (ii) has agreed not to
prosecute any legal action or other proceeding based upon any of such claims.


                           (b)  SEVERANCE  PAY.  If,  during  the  term  of this
Agreement, the Company terminates the Employee's Employment for any reason other
than Cause or  Permanent  Disability,  or if the  Employee  voluntarily  resigns
following a Constructive  Termination,  (collectively,  a "Termination  Event"),
then the Company  shall pay the Employee his Base  Compensation  for a period of
twelve  (12) months  following  the  termination  of his  Employment.  Such Base
Compensation  shall be paid at the rate in effect at the time of the termination
of Employment and in accordance with the Company's standard payroll  procedures.
In addition,  the Company  shall also  reimburse the Employee for the payment of
the  Employee's  COBRA  or  equivalent  other  replacement  medical  and  dental
insurance premiums for a period of twelve (12) months.


                           (c) CHANGE OF CONTROL.  In the event that Employee is
subject to a Termination Event within twelve (12) months of a Change in Control,
then in  addition to the payment  set forth in  subsection  (b) above,  Employee
shall also be  entitled  to receive an  additional  severance  payment  equal to
twelve (12) months' Base  Compensation at the  then-current  rate,  payable in a
lump sum on termination of employment.


                           (d)  DEFINITION  OF "CAUSE." For all  purposes  under
this Agreement, "Cause" shall mean:


                                    (i)   Any    breach   of   the    Invention,
Confidential  Information  and  Non-Competition  Agreement dated the date hereof
between the Employee and the Company, as determined by the Board of Directors of
the Company;


                                    (ii) Conviction of, or a plea of "guilty" or
"no  contest"  to, a felony,  or a plea of "guilty" or "no  contest" to a lesser
included  offense in exchange for  withdrawal  of a felony  indictment or felony
charge by indictment,  in each case whether arising under the laws of the United
States or any state thereof;


                                    (iii) Gross  misconduct or gross  negligence
in the performance of duties  assigned to the Employee under this Agreement,  as
determined by the Board of Directors; or


                                    (iv) Employee's  repeated failure to perform
substantially  all of the duties of his  employment or to follow and comply with
the reasonable  and lawful  written  directives of the Board of Directors of the
Company  after such  Employee  has been  informed in writing of such failure and
given a period of not less than 30 days to remedy such failure.


                           (e)  DEFINITION  OF  "CHANGE  OF  CONTROL."  For  all
purposes under this Agreement, "Change of Control"
shall mean:


                                    (i)  The   consummation   of  a  merger   or
consolidation  of the Company with or into another entity or any other corporate
reorganization,  if persons who were not stockholders of the Company immediately
prior to such merger,  consolidation  or other  reorganization  own  immediately
after such  merger,  consolidation  or other  reorganization  50% or more of the
voting power of the  outstanding  securities  of each of (A) the  continuing  or
surviving  entity  and (B) any direct or  indirect  parent  corporation  of such
continuing or surviving entity;  provided,  however, that any financing in which
the  Company  shall issue and sell  shares of its  capital  stock or  securities
convertible into equity  securities of the Company shall not constitute a change
in control even if persons who were not stockholders of the Company  immediately
prior to such financing own immediately  after such financing 50% or more of the
voting power of the Company's outstanding securities; or



<PAGE>

                                    (ii) The sale, transfer or other disposition
of all or substantially all of the Company's
assets or capital stock.


                           (f) DEFINITION OF "CONSTRUCTIVE TERMINATION." For all
purposes under this Agreement, Constructive
Termination  shall mean the voluntary  resignation of the Employee within twelve
(12) months following:


                                    (i) A change in the Employee's position with
the Company without the Employee's  consent that materially reduces his level of
authority, responsibilities and duties;


                                    (ii)   A   substantial   reduction   in  the
Employee's  Base  Compensation  unless due to a lack of available  funds and the
Employee is treated similarly to all other employees; or


                                    (iii)  Receipt of notice from  Company  that
the  Employee's  principal  workplace  will be  relocated  by more than 50 miles
without his consent.


                           (g)  DEFINITION  OF "PERMANENT  DISABILITY."  For all
purposes  under  this  Agreement,  "Permanent  Disability"  shall  mean that the
Employee,  at the time notice is given,  has failed to perform his duties  under
this  Agreement  (excluding an approved  leave from work or a leave  required by
law) for a period of more than 30 business days in any 90  consecutive  days (or
such longer  period as may be  required by law) as the result of his  incapacity
due to physical or mental injury, disability or illness.


                  6. NON-SOLICITATION,  NON-DISCLOSURE AND NON-COMPETITION.  The
Employee  has  entered  into  an   Invention,   Confidential   Information   and
Non-Competition  Agreement  with the  Company,  in the form  attached  hereto as
Exhibit B, which is incorporated herein by reference.


                  7. INSURANCE.  During the term of this Agreement,  the Company
will use its best efforts to maintain  liability  insurance to cover  actions of
its  directors  and  officers  for an amount not less than $5  million  and will
include Employee on this policy.


                  8. SUCCESSORS.


                           (a) COMPANY'S  SUCCESSORS.  This  Agreement  shall be
binding upon any successor  (whether direct or indirect and whether by purchase,
lease, merger, consolidation,  liquidation or otherwise) to all or substantially
all of the Company's  business,  capital stock and/or  assets.  For all purposes
under this  Agreement,  the term  "Company"  shall  include any successor to the
Company's business and/or assets which becomes bound by this Agreement.


                           (b)  EMPLOYEE'S  SUCCESSORS.  This  Agreement and all
rights  of the  Employee  hereunder  shall  inure  to  the  benefit  of,  and be
enforceable  by, the Employee's  personal or legal  representatives,  executors,
administrators, successors, heirs, distributees, devisees and legatees.


                  9.       MISCELLANEOUS PROVISIONS.


                           (a)  NOTICE.  Notices  and all  other  communications
contemplated  by this Agreement  shall be in writing and shall be deemed to have
been duly given when personally  delivered or when mailed by U.S.  registered or
certified mail, return receipt requested and postage prepaid. In the case of the
Employee,  mailed notices shall be addressed to him at the home address which he
most  recently  communicated  to the  Company  in  writing.  In the  case of the
Company,  mailed notices shall be addressed to its corporate  headquarters,  and
all notices shall be directed to the attention of its Secretary.


                           (b) MODIFICATIONS  AND WAIVERS.  No provision of this
Agreement  shall be  modified,  waived or  discharged  unless the  modification,
waiver or discharge is agreed to in writing and signed by the Employee and by an


<PAGE>

authorized officer of the Company (other than the Employee). No waiver by either
party of any breach of, or of  compliance  with,  any  condition or provision of
this  Agreement  by the other  party shall be  considered  a waiver of any other
condition or provision or of the same condition or provision at another time.


                           (c)  WHOLE   AGREEMENT.   This   Agreement   and  the
Invention,  Confidential  Information and Non-Competition  Agreement contain the
entire  understanding  of the parties with respect to the subject matter hereof.
No other agreements,  representations or understandings (whether oral or written
and  whether  express  or  implied)  which are not  expressly  set forth in such
agreements  have been made or entered  into by either  party with respect to the
subject matter hereof.


                           (d) WITHHOLDING  TAXES.  All payments made under this
Agreement  shall be  subject to  reduction  to  reflect  taxes or other  charges
required to be withheld by law.


                           (e) CHOICE OF LAW AND SEVERABILITY. This Agreement is
executed  by the  parties  in the  State of Texas and  shall be  interpreted  in
accordance  with the laws of such State (except their  provisions  governing the
choice of law). If any provision of this Agreement becomes or is deemed invalid,
illegal or unenforceable  in any jurisdiction by reason of the scope,  extent or
duration of its coverage,  then such  provision  shall be deemed  amended to the
extent  necessary to conform to applicable law so as to be valid and enforceable
or, if such  provision  cannot be so amended  without  materially  altering  the
intention  of the  parties,  then  such  provision  shall  be  stricken  and the
remainder  of this  Agreement  shall  continue in full force and effect.  Should
there ever occur any conflict between any provision  contained in this Agreement
and any present or future  statute,  law,  ordinance or  regulation  contrary to
which the parties have no legal right to contract, then the latter shall prevail
but the  provision of this  Agreement  affected  thereby  shall be curtailed and
limited only to the extent necessary to bring it into compliance with applicable
law. All the other terms and provisions of this Agreement shall continue in full
force and effect without impairment or limitation.


                           (f) ARBITRATION. Any controversy or claim arising out
of or  relating  to this  Agreement  or the breach  thereof,  or the  Employee's
Employment or the termination  thereof,  shall be settled in Houston,  Texas, by
arbitration  in  accordance  with  the  National  Rules  for the  Resolution  of
Employment Disputes of the American Arbitration Association. The decision of the
arbitrator shall be final and binding on the parties,  and judgment on the award
rendered  by the  arbitrator  may be  entered in any court  having  jurisdiction
thereof.  The parties  hereby  agree that the  arbitrator  shall be empowered to
enter an equitable  decree mandating  specific  enforcement of the terms of this
Agreement.  The  Company  and the  Employee  shall  share  equally  all fees and
expenses  of  the   arbitrator.   The  Employee   hereby  consents  to  personal
jurisdiction  of the state and federal  courts located in the State of Texas for
any action or proceeding  arising from or relating to this Agreement or relating
to any arbitration in which the parties are participants.


                           (g) NO ASSIGNMENT.  This Agreement and all rights and
obligations  of the Employee  hereunder are personal to the Employee and may not
be  transferred  or assigned by the Employee at any time. The Company may assign
this  Agreement  and all of its rights  hereunder to any parent,  subsidiary  or
affiliate  of Company or to any third party in  connection  with the (i) sale or
transfer of all or  substantially  all of the assets or capital stock of Company
to such third party or (ii) merger or  consolidation  of Company with such third
party.


                           (h)  COUNTERPARTS.  This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but both of
which together shall constitute one and the same instrument.







                  [REMAINDER OF PAGE LEFT BLANK INTENTIONALLY.]


<PAGE>



769001v.2 43626/1
         IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized  officer,  as of the day and year
first above written.

                                                     EMPLOYEE:




                                                     /s/ Frank Vazquez
                                                     ----------------------
                                                     Frank Vazquez


                                                     COMPANY:

                                                     CYTOGENIX, INC.




                                                     By:      s/Malcolm Skolnick
                                                          ----------------------
                                                     Name:
                                                            --------------------
                                                     Title:   President and CEO
                                                             -------------------

<PAGE>




                                    EXHIBIT A

List  of any  business  obligations  of  Employee  where  professional  services
rendered:

         1. None

         2. None

         3. None

         4. None

         5. None



<PAGE>


                                    EXHIBIT B

    Form of Invention, Confidential Information and Non-Competition Agreement

                                 (See attached)


<PAGE>


                   CONFIDENTIALITY AND NONDISCLOSURE AGREEMENT

         This Confidentiality Agreement (AGREEMENT) is made effective this 7 day
of February,  2005,  between  CYTOGENIX,  INC. of 3100 WILCREST DRIVE,  HOUSTON,
TEXAS  77042  (HEREINAFTER  "CYGX")  and  FRANK  VAZQUEZ  of  HOUSTON,  TX 77077
(HEREINAFTER "EMPLOYEE")


================================================================================

         In this AGREEMENT, CYGX and EMPLOYEE each own Confidential Information.
CYGX and EMPLOYEE  (hereinafter  collectively  "THE PARTIES") desire to disclose
such Confidential Information to each other.

         CYGX is  engaged in  molecular  biology  research  and  development  of
technologies  related to gene  silencing.  EMPLOYEE has  background and training
useful in CYGX' scientific and business development. Confidential information is
being  disclosed  to  enable  productive   participation  by  EMPLOYEE  in  CYGX
activities. EMPLOYEE has represented that EMPLOYEE will protect the confidential
material and  information  which may be disclosed by CYGX to EMPLOYEE.  CYGX has
represented  that CYGX will protect the  confidential  material and  information
which may be rightfully disclosed by EMPLOYEE to CYGX.

Therefore, THE PARTIES agree as follows:

1.   CONFIDENTIAL  INFORMATION.  The term  "CONFIDENTIAL  INFORMATION" means any
     secret or proprietary  information or material  relating to CYGX' research,
     development  or business  activities,  whether or not owned or developed by
     CYGX, which is not generally known other than by THE PARTIES, and which THE
     PARTIES may obtain through any direct or indirect  contact with THE PARTIES
     or others.

a.   CONFIDENTIAL INFORMATION includes without limitation:  business records and
     plans,    financial    statements,     patents,     patent    applications,
     continuations-in-part,  continuations, divisionals, records, trade secrets,
     technical  information and reports,  products,  inventions,  meeting notes,
     laboratory  notes,  email  and  other  correspondence,  pricing  structure,
     discounts,  costs,  copyrights and other intellectual  property,  market or
     business  segment to be serviced  by THE  PARTIES,  purposes  for which THE
     PARTIES'  service is  offered,  scientific  data,  laboratory  or  clinical
     procedures, and other proprietary information.

b.   CONFIDENTIAL INFORMATION does not include: matters of public knowledge that
     result from disclosure by THE PARTIES, information disclosed by THE PARTIES
     with the prior  written  consent of THE PARTIES  and any other  information
     that THE PARTIES agree in writing is not confidential.

2.   PROTECTION  OF  CONFIDENTIAL   INFORMATION.   THE  PARTIES  understand  and
     acknowledge  that  the  CONFIDENTIAL  INFORMATION  has  been  developed  or
     obtained by THE PARTIES by the investment of significant  time,  effort and
     expense, and that the CONFIDENTIAL  INFORMATION is a valuable,  special and
     unique asset of THE PARTIES  which  provides THE PARTIES with a significant
     competitive advantage.  Therefore,  THE PARTIES agree to hold in confidence
     and to not disclose the  CONFIDENTIAL  INFORMATION  to any person or entity
     without the prior written consent of THE PARTIES.


                                  Page 1 of 3
<PAGE>


     EMPLOYEE shall not disclose to CYGX information possessed by EMPLOYEE which
     EMPLOYEE  is  required  to  maintain  confidential  because  of a  previous
     agreement  unless  EMPLOYEE has obtained  written  agreement from the other
     Party(ies) to said previous agreement related to said disclosure.  Wrongful
     disclosure  of such  confidential  information  to CYGX  may be  considered
     grounds for immediate dismissal.


     Unauthorized  Disclosure  of  Information.  If it appears that EMPLOYEE has
     disclosed  (or has  threatened  to disclose)  CONFIDENTIAL  INFORMATION  in
     violation of this  AGREEMENT,  CYGX shall be entitled to an  injunction  to
     restrain  EMPLOYEE from  disclosing,  in whole or in part, the CONFIDENTIAL
     INFORMATION.  CYGX shall not be prohibited by this  provision from pursuing
     other remedies, including a claim for losses and damages.


3.   RETURN OF  CONFIDENTIAL  INFORMATION.  Upon the  written  request  of CYGX,
     EMPLOYEE shall return to CYGX all materials  whether written,  magnetically
     stored or reduced to any other tangible medium  containing the CONFIDENTIAL
     INFORMATION.  EMPLOYEE shall also deliver to CYGX signed written statements
     signed  certifying  that all materials  have been returned  within five (5)
     days of receipt of the request.

4.   EMPLOYEE grants CYGX the right to use any  confidential  information  which
     EMPLOYEE may rightfully disclose.

5.   EMPLOYEE  agrees that any  CONFIDENTIAL  INFORMATION  developed by EMPLOYEE
     while employed by CYGX is the property of CYGX.  EMPLOYEE further agrees to
     promptly disclose said developed CONFIDENTIAL INFORMATION to CYGX.

6.   EMPLOYEE acknowledges that, as between CYGX and EMPLOYEE,  the CONFIDENTIAL
     INFORMATION and all related copyrights,  patents and all other intellectual
     property rights,  are (and at all times will be) the property of CYGX, even
     if suggestions,  comments,  and/or ideas made by EMPLOYEE are  incorporated
     into the CONFIDENTIAL INFORMATION or related materials during the period of
     this AGREEMENT.

7.   GENERAL PROVISIONS.  This AGREEMENT sets forth the entire  understanding of
     THE PARTIES  regarding  confidentiality.  Any amendments must be in writing
     and signed by both parties.  This  AGREEMENT  shall be construed  under the
     laws of the State of Texas.  This AGREEMENT shall not be assigned by either
     party,  and neither  party may delegate  its duties  under this  AGREEMENT,
     without the prior written consent of the other party.

8.   SEVERABILITY.  Should any part of this Agreement for any reason be declared
     invalid or  unenforceable,  such decision  shall not affect the validity or
     enforceability  of any remaining  portion,  which  remaining  portion shall
     remain in force and effect as if this  Agreement had been executed with the
     invalid  or  unenforceable  portion  thereof  eliminated  and it is  hereby
     declared the intention of the parties  hereto that they would have executed
     the remaining  portion of this Agreement without including therein any such
     part,  parts or portion  which may, for any reason,  be hereafter  declared
     invalid or unenforceable.  Should any material term of this Agreement be in
     conflict any laws or  regulations,  the parties shall in good faith attempt
     to negotiate a lawful  modification  of this Agreement which will preserve,
     to the greatest extent possible, the original expectation of the parties.




(CYGX)



By:                                                                   2/7/05
    ---------------------------------                                --------
      Malcolm Skolnick                                                 Date
      President and CEO


(EMPLOYEE)


By:                                                                   2/7/05
    -----------------------------------                              --------
      Frank Vazquez                                                    Date


<PAGE>



EXHIBIT 31.1

                            CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Malcolm Skolnick, President and Chief Executive Officer certify that:

1. I have reviewed this annual report on Form 10-K of CytoGenix, Inc.;

2.  Based on my  knowledge,  this  annual  report  does not  contain  any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed  such  disclosure  controls and  procedures  to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this annual report is being prepared;

b) evaluated  the  effectiveness  of the  registrant's  disclosure  controls and
procedures  as of a date  within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions  about the  effectiveness  of
the  disclosure  controls  and  procedures  based  on our  evaluation  as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant  deficiencies in the design or operation of internal controls
which  could  adversely  affect the  registrant's  ability  to record,  process,
summarize and report  financial data and have  identified  for the  registrant's
auditors any material weaknesses in internal controls; and

b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: April 20, 2006

/s/ Malcolm Skolnick
----------------------------
MALCOLM SKOLNICK
PRESIDENT & CEO
(PRINCIPAL EXECUTIVE OFFICER)



<PAGE>


EXHIBIT 31.2

                            CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Lawrence Wunderlich, Chief Financial Officer certify that:

1. I have reviewed this annual report on Form 10-K of CytoGenix, Inc.;

2.  Based on my  knowledge,  this  annual  report  does not  contain  any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed  such  disclosure  controls and  procedures  to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this annual report is being prepared;

b) evaluated  the  effectiveness  of the  registrant's  disclosure  controls and
procedures  as of a date  within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions  about the  effectiveness  of
the  disclosure  controls  and  procedures  based  on our  evaluation  as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant  deficiencies in the design or operation of internal controls
which  could  adversely  affect the  registrant's  ability  to record,  process,
summarize and report  financial data and have  identified  for the  registrant's
auditors any material weaknesses in internal controls; and

b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: April 20, 2006

/s/ Lawrence Wunderlich
-------------------------
LAWRENCE WUNDERLICH
CHIEF FINANCIAL OFFICER
(PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)



<PAGE>

EXHIBIT 32.1


                                CERTIFICATION OF
               CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
                                   PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


         In connection with the Annual Report of CytoGenix, Inc. (the "Company")
on Form 1O-K for the year ending  December 31, 2005 as filed with the Securities
and  Exchange  Commission  on the date  hereof  (the  "Report"),  I,  Malcolm H.
Skolnick, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C.
Section 1350, as adopted  pursuant to Section 906 of the  Sarbanes-Oxley  Act of
2002, that to the best of my knowledge:

(1) The  Annual  Report  of  CytoGenix,  Inc.  on form  10-K for the year  ended
December 31, 2005 fully complies with the requirements of section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and

(2) The information  contained in such Annual Report of CytoGenix,  Inc. on Form
10-K fairly  presents,  in all material  respects,  the financial  condition and
result of operations of the Company.


/s/ Malcolm H. Skolnick
-------------------------
MALCOLM H. SKOLNICK
CHIEF EXECUTIVE OFFICER
APRIL 20, 2006


<PAGE>



EXHIBIT 32.2

                                CERTIFICATION OF
               CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
                                   PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


         In connection with the Annual Report of CytoGenix, Inc. (the "Company")
on Form 1O-K for the year ending  December 31, 2005 as filed with the Securities
and  Exchange  Commission  on  the  date  hereof  (the  "Report"),  I,  Lawrence
Wunderlich,  Chief  Financial  Officer of the Company,  certify,  pursuant to 18
U.S.C.  Section 1350, as adopted  pursuant to Section 906 of the  Sarbanes-Oxley
Act of 2002, that to the best of my knowledge:

(1) The  Annual  Report  of  CytoGenix,  Inc.  on form  10-K for the year  ended
December 31, 2005 fully complies with the requirements of section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and

(2) The information  contained in such Annual Report of CytoGenix,  Inc. on form
10-K fairly  presents,  in all material  respects,  the financial  condition and
result of operations of the Company.


/s/ Lawrence Wunderlich
--------------------------
LAWRENCE WUNDERLICH
CHIEF FINANCIAL OFFICER
APRIL 20, 2006