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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K/A
 Amendment No. 1
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 For the fiscal year ended December 31, 2005
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT OF
1934
 Commission File No. 0-15327
 CytRx Corporation
 (Exact name of Registrant as specified in its charter)
 Delaware
    
    58-1642740(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)11726 San Vicente Blvd, Suite 650,Los Angeles, California
    
    90049(Address of principal executive offices)
    
    (Zip Code)
 Registrants telephone number, including area code:
(310) 826-5648
 
 Securities registered pursuant to Section 12(b) of the Act:
None
 Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value per share
 o þ
 o þ
 þ o
 þ
  o o þ
 o þ




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EXPLANATORY NOTE
  Accounting
for Stock-Based Compensation
  
    
    Part II  Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    Part II  Item 8. Financial Statements and Supplementary Data
    
    Part II  Item 9A. Controls and Procedures
    
    Part IV  Item 15. Exhibits and Financial Statement Schedules
    
    Exhibit 31.1  Certification of Chief Executive Officer
    
    Exhibit 31.2  Certification of Chief Financial Officer
  2




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##### 



CYTRX CORPORATION
 2004 FORM 10-K ANNUAL REPORT
 TABLE OF CONTENTS
 PagePART IItem 1.
    
    Business
    
    5Item 1A.
    
    Risk Factors
    
    14Item 2.
    
    Properties
    
    23Item 3.
    
    Legal Proceedings
    
    23PART IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
    
    24Item 6.
    
    Selected Financial Data
    
    24Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    25Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    37Item 8.
    
    Financial Statements and Supplementary Data
    
    37Item 9A.
    
    Controls and Procedures
    
    37PART IIIItem 10.
    
    Directors and Executive Officers of the Registrant
    
    39Item 11.
    
    Executive Compensation
    
    41Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    46Item 13.
    
    Certain Relationships and Related Transactions
    
    47Item 14.
    
    Principal Accountant Fees and Services
    
    47PART IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    48Signatures
    
    56EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2
   3




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SAFE HARBOR STATEMENT UNDER THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
    4




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PART I
 
 Item 1. Business
  General
   i.e.
    5




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in vitro
  Molecular Chaperone Co-Induction Platform
 e.g.
   6




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RNAi Platform Technology
   Science
 7




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Product Development
 ALS
      8




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University of Massachusetts Medical School
    Obesity and Type 2 Diabetes
  9




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Research and Development Laboratory
   Cardiovascular Disease
  Pre-Global Genomics Merger Technologies
  Therapeutic Copolymer Program
  10




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Vaccine Enhancement and Gene Therapy
  Merck License
  Vical License
 in vitro
 Genomics Investments
  11




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Research and Development Expenditures
  Manufacturing
  Patents and Proprietary Technology
    12




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Competition
     Government Regulation
   13




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Employees
  
 Item 1A. Risk Factors
  We Have Operated at a Loss and Will Likely Continue to Operate at a Loss For the Foreseeable
Future
  We Have No Source of Significant Recurring Revenues, Which Makes Us Dependent on Financing to
Sustain Our Operations
  
    
    We are able to complete the development of and commercialize one or more of the products
that we are currently developing, which may require us to first enter into license or other
arrangements with third parties.
    
    One or more of our currently licensed products is commercialized by our licensees,
thereby generating royalty income for us.
    
    We are able to acquire products from third parties that are already being marketed or are
approved for marketing.
   Most of Our Revenues Have Been Generated by License Fees for TranzFect, Which May Not be a
Recurring Source of Revenue for Us
  14




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We Have Changed Our Business Strategy, Which Will Require Us, in Certain Cases, to Find and Rely
Upon Third Parties for the Development of Our Products and to Provide Us With Products
     Our Current Financial Resources May Limit Our Ability to Execute Certain Strategic Initiatives
  15




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If Our Products Are Not Successfully Developed and Approved by the FDA, We May Be Forced to
Reduce or Terminate Our Operations
   
    
    Difficulty in securing centers to conduct trials.
    
    Difficulty in enrolling patients in conformity with required protocols or projected timelines.
    
    Unexpected adverse reactions by patients in trials.
 16




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
    
    Difficulty in obtaining clinical supplies of the product.
    
    Changes in the FDAs requirements for our testing during the course of that testing.
    
    Inability to generate statistically significant data confirming the efficacy of the product being tested.
    
    Modification of the drug during testing.
    
    Reallocation of our limited financial and other resources to other clinical programs.
  The Approach We Are Taking to Discover and Develop Novel Therapeutics Using RNAi is Unproven and
May Never Lead to Marketable Products
  Our Planned RNAi Subsidiary May Not Be Able to Obtain Sufficient Funding, and We May Not Control
a Majority of the Planned Subsidiary if We Obtain Financing
  The Drug Candidates Acquired from Biorex May Not Obtain Regulatory Marketing Approvals
   17




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Our Obesity and Type 2 Diabetes Laboratory May Not Be Able to Develop Products
  We Will Be Reliant Upon SynthRx to Develop and Commercialize Flocor
   18




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We Are Subject to Intense Competition That Could Materially Impact Our Operating Results
   
    
    Succeed in developing competitive products sooner than us or our strategic partners or licensees.
    
    Obtain FDA and other regulatory approvals for their products before approval of any of our products.
    
    Obtain patents that block or otherwise inhibit the development and commercialization of our product candidates.
    
    Develop products that are safer or more effective than our products.
    
    Devote greater resources to marketing or selling their products.
    
    Introduce or adapt more quickly to new technologies or scientific advances.
    
    Introduce products that render our products obsolete.
    
    Withstand price competition more successfully than us or our strategic partners or licensees.
    
    Negotiate third-party strategic alliances or licensing arrangements more effectively.
    
    Take advantage of other opportunities more readily.
   19




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tm) tm)
 We Do Not Have the Ability to Manufacture Any of Our Products and Will Need to Rely upon Third
Parties for the Manufacture of Our Clinical and Commercial Product Supplies
  We May Be Unable to Protect Our Intellectual Property Rights, Which Could Adversely Affect the
Value of Our Assets
   20




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We May Incur Substantial Costs from Future Clinical Testing or Product Liability Claims
  Compliance with Requirements of Section 404 of the Sarbanes-Oxley Act of 2002 Will Increase Our
Costs and Require Additional Management Resources, and We May Not Successfully Comply
  Our Anti-Takeover Provisions May Make It More Difficult to Change Our Management or May
Discourage Others From Acquiring Us and Thereby Adversely Affect Stockholder Value
   21




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Our Outstanding Options and Warrants and the Registrations of Our Shares Issued in the Global
Genomics Merger and Our Recent Private Financings May Adversely Affect the Trading Price of Our
Common Stock
   We May Issue Preferred Stock in the Future, and the Terms of the Preferred Stock May Reduce the
Value of Our Common Stock
  Changes in Stock Option Accounting Rules May Adversely Impact Our Reported Operating Results, Our
Stock Price and Our Competitiveness in the Employee Marketplace
  22




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We May Experience Volatility in Our Stock Price, Which May Adversely Affect the Trading Price of
Our Common Stock
  
    
    Our quarterly operating results.
    
    Announcements of regulatory developments or technological innovations by us or our competitors.
    
    Government regulation of drug pricing.
    
    Developments in patent or other technology ownership rights.
    
    Public concern regarding the safety of our products.
  
 Item 2. Properties
  
 Item 3. Legal Proceedings
  23




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PART II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
  High
    
    LowFiscal Year 2006:January 1 to March 28
    
    $
    1.87
    
    
    $
    1.01Fiscal Year 2005:Fourth Quarter
    
    $
    1.13
    
    
    $
    0.85Third Quarter
    
    $
    1.22
    
    
    $
    0.76Second Quarter
    
    $
    1.44
    
    
    $
    0.75First Quarter
    
    $
    2.07
    
    
    $
    1.14Fiscal Year 2004:Fourth Quarter
    
    $
    1.75
    
    
    $
    1.10Third Quarter
    
    $
    1.80
    
    
    $
    0.94Second Quarter
    
    $
    2.10
    
    
    $
    1.06First Quarter
    
    $
    2.43
    
    
    $
    1.43
  
 Item 6. Selected Financial Data
  2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001Statement of Operations Data:RevenuesRecruiting revenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    23,000
    
    
    $
    101,000License fees
    
    
    101,000
    
    
    
    428,000
    
    
    
    94,000
    
    
    
    1,051,000
    
    
    
    3,751,000Grant income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46,000
    
    
    
    157,000Service revenues
    
    
    83,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total revenues
    
    $
    184,000
    
    
    $
    428,000
    
    
    $
    94,000
    
    
    $
    1,120,000
    
    
    $
    4,009,000Net loss
    
    $
    (15,093,000
    )
    
    $
    (16,392,000
    )
    
    $
    (17,845,000
    )
    
    $
    (6,176,000
    )
    
    $
    (931,000
    )Basic and diluted loss per common share:Net loss
    
    $
    (0.27
    )
    
    $
    (0.48
    )
    
    $
    (0.65
    )
    
    $
    (0.39
    )
    
    $
    (0.09
    )Balance Sheet Data:Total assets
    
    $
    9,939,000
    
    
    $
    5,049,000
    
    
    $
    12,324,000
    
    
    $
    9,284,000
    
    
    $
    7,611,000Total stockholders equity
    
    $
    7,208,000
    
    
    $
    1,595,000
    
    
    $
    10,193,000
    
    
    $
    7,959,000
    
    
    $
    6,583,000
  24




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Factors Affecting Comparability
     
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Restatement of Financial Statements
 Accounting for Stock-Based Compensation,
  Overview
  25




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i.e.
     26




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Research and Development
   
    
    Our ability to advance product candidates into pre-clinical and clinical trials.
    
    The scope, rate and progress of our pre-clinical trials and other research and development activities.
    
    The scope, rate of progress and cost of any clinical trials we commence.
    
    The cost of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights.
    
    Future clinical trial results.
    
    The terms and timing of any collaborative, licensing and other arrangements that we may establish.
    
    The cost and timing of regulatory approvals.
    
    The cost and timing of establishing sales, marketing and distribution capabilities.
    
    The cost of establishing clinical and commercial supplies of our product candidates and any products that we may develop.
    
    The effect of competing technological and market developments.
  Critical Accounting Policies and Estimates
  27




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Revenue Recognition
  Research and Development Expenses
  Clinical Trial Expenses
  Stock-based Compensation
 Accounting for Stock Issued to
Employees Accounting for Stock-Based Compensation
  28




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Accounting for Equity Instruments
that Are Issued to other than Employees for Acquiring, or in conjunction with Selling Goods, or
Services
 Impairment of Long-Lived Assets
  The Equity
Method of Accounting for Investments in Common Stock
 Estimated Facility Abandonment Accrual
  Quarterly Financial Data
  29




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Quarter EndedMarch 31
    
    
    June 30
    
    
    September 30
    
    
    December 31(In thousands, except per share data)2005Total revenues
    
    $
    1
    
    
    $
    
    
    
    $
    10
    
    
    $
    173Net loss
    
    
    (3,527
    )
    
    
    (4,509
    )
    
    
    (3,492
    )
    
    
    (3,565
    )Basic and diluted loss per common share:Net loss
    
    $
    (0.07
    )
    
    $
    (0.08
    )
    
    $
    (0.06
    )
    
    $
    (0.06
    )2004Total revenues
    
    $
    100
    
    
    $
    228
    
    
    $
    
    
    
    $
    100Net loss
    
    
    (3,774
    )
    
    
    (4,061
    )
    
    
    (2,796
    )
    
    
    (5,761
    )Basic and diluted loss per common share:Net loss
    
    $
    (0.11
    )
    
    $
    (0.12
    )
    
    $
    (0.08
    )
    
    $
    (0.15
    )
  Liquidity and Capital Resources
     30




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31




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Contractual Obligations
  Operating
    
    
    License
    
    
    EmploymentLeases
    
    
    Agreements
    
    
    Agreements
    
    
    Total(In thousands)2006
    
    $
    507
    
    
    $
    971
    
    
    $
    1,264
    
    
    $
    2,7422007
    
    
    389
    
    
    
    235
    
    
    
    887
    
    
    
    1,5112008
    
    
    108
    
    
    
    339
    
    
    
    590
    
    
    
    1,0372009
    
    
    1
    
    
    
    339
    
    
    
    
    
    
    
    3402010 and thereafter
    
    
    2
    
    
    
    1070
    
    
    
    
    
    
    
    1,072Total
    
    $
    1,007
    
    
    $
    2,954
    
    
    $
    2,741
    
    
    $
    6,702
  License and Collaboration Agreements
   Net Operating Loss Carryforward
  32




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Results of Operations
   33




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Research and Development
 Year Ended December 31,2005
    
    
    2004
    
    
    2003(In thousands)Research and development expense
    
    $
    8,867
    
    
    $
    4,626
    
    
    $
    1,485Non-cash research and development expense
    
    
    220
    
    
    
    1,387
    
    
    
    2,903Acquired in-process research and development expense
    
    
    
    
    
    
    3,022
    
    
    
    $
    9,087
    
    
    $
    9,035
    
    
    $
    4,388
      General and administrative expense
 Year Ended December 31,2005
    
    
    2004
    
    
    2003(In thousands)General and administrative expense
    
    $
    6,057
    
    
    $
    5,924
    
    
    $
    3,841Common stock, stock options and warrants issued for general and administrative expense
    
    
    367
    
    
    
    1,977
    
    
    
    3,148$
    6,424
    
    
    $
    7,901
    
    
    $
    6,989
 34




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Depreciation and amortization expense
  Severance and other contractual payments to officers
  Loss on facility abandonment
  Interest income
  35




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Equity Losses from Minority-Owned Entity
 Year Ended December 31,2005
    
    
    2004
    
    
    2003(In thousands)Equity losses from minority-owned entity
    
    $
    
    
    
    $
    
    
    
    $
    245Asset impairment charge
    
    
    
    
    
    
    
    
    
    
    5,869Amortization of acquired developed technology
    
    
    
    
    
    
    
    
    
    
    548$
    
    
    
    $
    
    
    
    $
    6,662
  Minority interest in losses of subsidiary
  Recently Issued Accounting Standards
    Related Party Transactions
  36




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Off-Balance Sheet Arrangements
  
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 8. Financial Statements and Supplementary Data
  
 Item 9A. Controls and Procedures
    Accounting
for Stock-Based Compensation
  Accounting
for Certain Financial Instruments With Characteristics of Both Liabilities and Equity
 37




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Accounting for
Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion
Ratios Application of 98-5 to Certain Convertible Instruments
   1.
    
    Fully implement our new software for accounting for stock options;2.
    
    Re-assign certain duties related to the input and maintenance of stock options
records; and3.
    
    Enhanced internal review of all stock-based compensation awards and other equity
transactions.
  38




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PART III
 
 Item 10. Directors and Executive Officers of the Registrant
  Class ofName
    
    Age
    
    Director(1)
    
    PositionMax Link
    
    
    65
    
    
    III
    
    Director, Chairman of the Board(2)(3)Steven A. Kriegsman
    
    
    64
    
    
    II
    
    Director, Chief Executive Officer, PresidentMarvin R. Selter
    
    
    78
    
    
    II
    
    Director, Vice Chairman of the Board(2)(3)(4)Louis Ignarro, Ph.D.
    
    
    64
    
    
    I
    
    DirectorJoseph Rubinfeld, Ph.D.
    
    
    73
    
    
    I
    
    Director(2)(4)Richard L. Wennekamp
    
    
    63
    
    
    II
    
    Director(2)(3)(4)Mark A. Tepper, Ph.D.
    
    
    48
    
    
    
    
    Senior Vice President; Drug DiscoveryMatthew Natalizio
    
    
    51
    
    
    
    
    Chief Financial Officer, TreasurerJack R. Barber, Ph.D.
    
    
    50
    
    
    
    
    Senior Vice President  Drug DevelopmentBenjamin S. Levin
    
    
    30
    
    
    
    
    General Counsel, Vice President  Legal
Affairs and Corporate Secretary
 
 (1)
    
    Our Class I directors serve until the 2007 annual meeting of stockholders, our Class II
directors serve until the 2008 annual meeting of stockholders and our Class III director
serves until the 2006 annual meeting of stockholders.(2)
    
    These directors constitute the members of our Audit Committee. Mr. Selter is the Chairman of
the Committee.(3)
    
    These directors constitute the members of our Nominating and Corporate Governance Committee.
Mr. Wennekamp is Chairman of the Committee.(4)
    
    These directors constitute the members of our Compensation Committee. Dr. Rubinfeld is
Chairman of the committee. Max Link
 Steven A. Kriegsman
 Marvin R. Selter
 39




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Louis Ignarro, Ph.D.
 Joseph Rubinfeld, Ph.D.
 Richard L. Wennekamp
 Mark A. Tepper, Ph.D.
 Matthew Natalizio
 Jack Barber, Ph.D.
 Benjamin S. Levin
 40




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Section 16(a) Beneficial Ownership Reporting Compliance
  Code of Ethics
  
 Item 11. Executive Compensation
 Summary Compensation Table
  Long-TermCompensationSecuritiesUnderlying
    
    All OtherName and Principal Position
    
    Year
    
    Salary
    
    Bonus
    
    Options (#)
    
    CompensationSteven A. Kriegsman
    
    
    2005
    
    
    $
    399,403
    
    
    $
    250,000
    
    
    
    300,000
    (1)
    
    $
    11,000
    (2)President and Chief Executive Officer
    
    
    2004
    
    
    $
    361,173
    
    
    $
    150,000
    
    
    
    
    
    
    $
    42,617
    (3)2003
    
    
    $
    313,772
    
    
    $
    150,000
    
    
    
    1,000,000
    (4)
    
    
    Jack R. Barber, Ph.D.
    
    
    2005
    
    
    $
    238,132
    
    
    $
    50,000
    
    
    
    150,000
    (1)
    
    
    Senior Vice President  Drug Development
    
    
    2004
    (5)
    
    $
    112,910
    
    
    
    
    
    
    $
    100,000
    (6)
    
    
    Mark A. Tepper, Ph.D.
    
    
    2005
    
    
    $
    214,285
    
    
    $
    50,000
    
    
    
    
    
    
    
    Senior Vice President  Drug Discovery
    
    
    2004
    
    
    $
    200,699
    
    
    $
    50,000
    
    
    
    
    
    
    
    2003
    (7)
    
    $
    58,333
    
    
    $
    
    
    
    
    400,000
    (6)
    
    
    Matthew Natalizio
    
    
    2005
    
    
    $
    184,167
    
    
    $
    50,000
    
    
    
    150,000
    (1)
    
    
    Chief Financial Officer and Treasurer
    
    
    2004
    (8)
    
    $
    82,900
    
    
    $
    
    
    
    
    100,000
    (6)
    
    
    Benjamin S. Levin
    
    
    2005
    
    
    $
    184,167
    
    
    $
    50,000
    
    
    
    150,000
    (1)
    
    
    General Counsel, Vice President  Legal
Affairs and Corporate Secretary
    
    
    2004
    (9)
    
    $
    80,881
    
    
    $
    
    
    
    
    160,000
    (6)
    
    
    
 
 (1)
    
    The options shown are subject to vesting in 36 equal monthly installments beginning on May
17, 2005, subject to the option holders remaining in our continuous employ through such
dates.(2)
    
    The amount shown includes approximately $5,000 in insurance premiums paid by us with respect
to a life insurance policy for Mr. Kriegsman with a face value of approximately $1.4 million
and under which Mr. Kriegsmans designee is the beneficiary. The amount shown also includes
approximately $6,000 of legal fees and expenses paid or reimbursed by us in accordance with
the terms of Mr. Kriegsmans employment agreement described below under Employment Agreement
with Steven A. Kriegsman. 41




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(3)
    
    The amount shown includes approximately $5,000 in insurance premiums paid by us with respect
to the life insurance policy for Mr. Kriegsman referred to in note (2) above. The amount shown
also includes approximately $37,617 of legal fees and expenses paid or reimbursed by us in
accordance with the terms of Mr. Kriegsmans employment agreement described below under
Employment Agreement with Steven A. Kriegsman.(4)
    
    250,000 of the options shown vested on each of June 20, 2003 and June 20, 2004. The remaining
500,000 of the options shown vest in twenty-four monthly installments of 1/24th each on the
20th day of each month beginning on June 20, 2004, subject to Mr. Kriegsmans remaining in our
continuous employ through such dates.(5)
    
    Dr. Barber was hired on July 6, 2004.(6)
    
    The options shown are subject to vesting in three annual installments of 1/3rd each on each
of the first three anniversaries of the named executive officers date of hire, subject to his
remaining in our continuous employ through such dates.(7)
    
    Dr. Tepper was hired on September 20, 2003.(8)
    
    Mr. Natalizio was hired on July 12, 2004.(9)
    
    Mr. Levin was hired on July 15, 2004. Option Grants in Last Fiscal Year
  Option Grants in Twelve Months Ended December 31, 2005
 Individual Grants
    
    
    
    
    
    Potential Realizeable ValueNumber of
    
    % of Total
    
    
    
    
    
    at Assumed Annual RatesShares
    
    Options
    
    
    
    
    
    of Stock PriceUnderlying
    
    Granted to
    
    
    
    
    
    Appreciation for OptionOptions
    
    Employees In
    
    Exercise
    
    Term(1)Name
    
    Granted
    
    Fiscal Year
    
    Price
    
    5%
    
    10%Steven A. Kriegsman
    
    
    300,000
    
    
    
    28.6
    %
    
    $
    0.79
    
    
    $
    266,300
    
    
    $
    564,500Jack R. Barber, Ph.D.
    
    
    150,000
    
    
    
    14.3
    %
    
    $
    0.79
    
    
    $
    133,200
    
    
    $
    282,200Mark A. Tepper, Ph.D.
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    
    
    
    $
    Matthew Natalizio
    
    
    150,000
    
    
    
    14.3
    %
    
    $
    0.79
    
    
    $
    133,200
    
    
    $
    282,200Benjamin S. Levin
    
    
    150,000
    
    
    
    14.3
    %
    
    $
    0.79
    
    
    $
    133,200
    
    
    $
    282,200
 
 (1)
    
    The potential realizable value shown in this table represents the hypothetical gain that
might be realized based on assumed 5% and 10% annual compound rates of stock price
appreciation over the full option term. These prescribed rates are not intended to forecast
possible future appreciation of the common stock. Fiscal Year-End Option Values
  Number of SecuritiesUnderlying Unexercised
    
    Value of UnexercisedOptions at
    
    In-the-Money Options atDecember 31, 2005 (#)
    
    December 31, 2005 ($)Name
    
    Exercisable
    
    Unexercisable
    
    Exercisable
    
    UnexercisableSteven A. Kriegsman
    
    
    850,000
    
    
    
    450,000
    
    
    $
    14,000
    
    
    $
    58,000Jack R. Barber, Ph.D.
    
    
    62,500
    
    
    
    187,500
    
    
    $
    7,000
    
    
    $
    29,000Mark A. Tepper, Ph.D.
    
    
    266,680
    
    
    
    133,320
    
    
    $
    
    
    
    $
    Matthew Natalizio
    
    
    62,500
    
    
    
    187,500
    
    
    $
    7,000
    
    
    $
    29,000Benjamin S. Levin
    
    
    82,495
    
    
    
    227,505
    
    
    $
    7,000
    
    
    $
    29,000
 42




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##### Table of Contents



Compensation of Directors
   Equity Compensation Plans
  (c)(a)
    
    
    
    
    
    
    Number of SecuritiesNumber of Securities
    
    
    (b)
    
    
    Remaining Availableto be Issued Upon
    
    
    Weighted-Average
    
    
    for Issuance Under EquityExercise of
    
    
    Exercise Price of
    
    
    CompensationOutstanding Options,
    
    
    Outstanding Options,
    
    
    Plans (Excluding SecuritiesPlan Category
    
    Warrants and Rights
    
    
    Warrants and Rights
    
    
    Reflected in Column (a))Equity compensation plans
approved by our stockholders:1994 Stock Option Plan
    
    
    30,834
    
    
    $
    1.00
    
    
    
    70,8501995 Stock Option Plan
    
    
    
    
    
    
    
    
    
    
    22,1071998 Long-Term Incentive Plan
    
    
    132,541
    
    
    
    1.00
    
    
    
    29,5172000 Long-Term Incentive Plan
    
    
    6,042,167
    
    
    
    1.71
    
    
    
    3,957,833Equity compensation plans not
approved by our stockholders:Outstanding warrants(1)
    
    
    5,029,822
    
    
    
    1.47
    
    
    
    Total:
    
    
    11,235,364
    
    
    $
    1.59
    
    
    
    4,080,307
 
 (1)
    
    Issued as compensation for various services and does not include warrants attached to common
stock that were sold in private placement transactions. Perquisites
  43




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##### Table of Contents



Employment Agreements; Change in Control Agreements
 Employment Agreement with Steven A. Kriegsman
       Change in Control Agreement with Steven A. Kriegsman
  44




---



##### Table of Contents



Employment Agreement with Matthew Natalizio
   Employment Agreement with Jack R. Barber, Ph.D.
   Employment Agreement with Mark A. Tepper, Ph.D.
   Employment Agreement with Benjamin S. Levin
   Compensation Committee Interlocks and Insider Participation in Compensation Decisions
  45




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##### Table of Contents



Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
   Shares ofCommon StockName of Beneficial Owner
    
    Number
    
    PercentLouis Ignarro, Ph.D.(1)
    
    
    465,583
    
    
    
    *Steven A. Kriegsman(2)
    
    
    5,050,265
    
    
    
    7.16
    %Max Link(3)
    
    
    60,417
    
    
    
    *Joseph Rubinfeld(4)
    
    
    23,667
    
    
    
    *Marvin R. Selter(5)
    
    
    369,118
    
    
    
    *Richard Wennekamp(6)
    
    
    16,667
    
    
    
    *Matthew Natalizio(7)
    
    
    79,168
    
    
    
    *Jack R. Barber(8)
    
    
    79,168
    
    
    
    *Mark A. Tepper(9)
    
    
    266,676
    
    
    
    *Benjamin S. Levin(10)
    
    
    99,168
    
    
    
    *All executive officers and directors as a group (ten persons)(11)
    
    
    6,509,897
    
    
    
    9.10
    %
 
 (1)
    
    Includes 373,667 shares subject to options or warrants.(2)
    
    Includes 1,029,165 shares subject to options or warrants. Mr. Kriegsmans address is c/o
CytRx Corporation, 11726 San Vicente Boulevard, Suite 650, Los Angeles, CA 90049.(3)
    
    Includes 31,210 shares subject to options or warrants.(4)
    
    Includes 23,667 shares subject to options or warrants.(5)
    
    The shares shown are owned, of record, by the Selter Family Trust or Selter IRA Rollover.
Includes 11,667 shares subject to options or warrants owned by Mr. Selter.(6)
    
    Includes 11,667 shares subject to options or warrants.(7)
    
    Includes 79,168 shares subject to options or warrants.(8)
    
    Includes 79,168 shares subject to options or warrants.(9)
    
    Includes 266,676 shares subject to options or warrants.(10)
    
    Includes 99,168 shares subject to options or warrants.(11)
    
    Includes 2,005,223 shares subject to options or warrants. 46




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##### Table of Contents



Item 13. Certain Relationships and Related Transactions
  
 Item 14. Principal Accountant Fees and Services
  Audit Fees
  Year:
    
    BDO2005
    
    $
    170,0002004
    
    $
    217,0002003
    
    $
    160,000
 Audit Related Fees
  Tax Fees
  All Other Fees
  47




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##### Table of Contents



PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
  Financial Statements
        Financial Statement Schedules
      48




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##### Table of Contents



CytRx Corporation
 Form 10-K Exhibit Index
 ExhibitNumber
    
    
    
    Footnote3.1
    
    Restated Certificate of Incorporation
    
    (a)3.2
    
    Restated By-Laws
    
    (b)3.3
    
    Certificate Of Amendment To Restated Certificate of Incorporation
    
    (m)3.4
    
    Corrected Restated Certificate of Incorporation
    
    (n)3.5
    
    Certificate of Amendment to Restated Certificate of Incorporation
    
    (n)3.6
    
    Certificate of Amendment to Restated Certificate of Incorporation
    
    (ll)4.1
    
    Shareholder Protection Rights Agreement dated April 16, 1997 between CytRx Corporation and American Stock Transfer &Trust Company as Rights Agent
    
    (c)4.2
    
    Amendment No. 1 to Shareholder Protection Rights Agreement
    
    (k)4.3
    
    Stock Restriction and Registration Rights Agreement
    
    (o)4.4
    
    Warrant issued on July 20, 2002 to Corporate Consulting International Group pursuant to Consulting Engagement Letter dated July 20, 2002
    
    (p)4.5
    
    Warrant issued on February 21, 2003 to Corporate Capital Group International Ltd. Inc
    
    (r)4.6
    
    Form of Common Stock Purchase Warrant between CytRx Corporation and each of the investors in the May 29, 2003 private placement
    
    (s)4.7
    
    Form of Common Stock Purchase Warrant between CytRx Corporation and each of the investors in the September 16, 2003 private placement
    
    (v)4.8
    
    Warrant issued on May 10, 2004 to MBN Consulting, LLC
    
    (aa)4.9
    
    Form of Common Stock Purchase Warrant between CytRx Corporation and each of the investors in the October 4, 2004 private placement
    
    (dd)4.10
    
    Form of Common Stock Purchase Warrant between CytRx Corporation and each of the investors in the January 2005 private placement
    
    (ee)4.11
    
    Form of Common Stock Purchase Warrant between CytRx Corporation and each of the investors in the March 2006 private placement
    
    (kk)10.1
    
    Agreement with Emory University, as amended
    
    (d)10.2
    
    Option Agreement granting PSMA Development Company option to enter into a license agreement with CytRx Corporation dated December 23, 2002
    
    (q)10.3*
    
    Amended and Restated Employment Agreement between CytRx Corporation and Jack J. Luchese
    
    (i)10.4*
    
    Amended and Restated Change of Control Employment Agreement between CytRx Corporation and Jack J. Luchese
    
    (i)10.5*
    
    Amendment No. 1 to Employment Agreement with Jack J. Luchese
    
    (k)10.6*
    
    Amendment No. 1 to Change in Control Employment Agreement with Jack J. Luchese
    
    (k)10.7*
    
    1986 Stock Option Plan, as amended and restated
    
    (f)10.8*
    
    1994 Stock Option Plan, as amended and restated
    
    (e)10.9*
    
    1995 Stock Option Plan
    
    (g)10.10*
    
    1998 Long-Term Incentive Plan
    
    (h)10.11*
    
    2000 Long-Term Incentive Plan
    
    (k)10.12*
    
    Amendment No. 1 to 2000 Long-Term Incentive Plan
    
    (m)10.13*
    
    Amendment No. 2 to 2000 Long-Term Incentive Plan
    
    (m)
 49




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##### Table of Contents



ExhibitNumber
    
    
    
    Footnote10.14*
    
    Amendment No. 3 to 2000 Long-Term Incentive Plan
    
    (x)10.15*
    
    Amendment No. 4 to 2000 Long-Term Incentive Plan
    
    (x)10.16
    
    License Agreement dated November 1, 2000 by and between CytRx Corporation and Merck & Co., Inc
    
    (j)10.17
    
    License Agreement dated February 16, 2001 by and between CytRx Corporation and Ivy Animal Health, Inc
    
    (k)10.18
    
    License Agreement dated December 7, 2001 by and between CytRx Corporation and Vical Incorporated
    
    (l)10.19*
    
    Amended and Restated Employment Agreement dated as of May 2002 between CytRx Corporation and Steven A. Kriegsman
    
    (p)10.20
    
    Extension of financial advisory agreement between CytRx Corporation and Cappello Capital Corp. dated January 1, 2002 Agreement between Kriegsman Capital Group and CytRx
Corporation dated
    
    (p)10.21
    
    February 11, 2002 regarding office space rental
    
    (p)10.22
    
    Marketing Agreement with Madison & Wall Worldwide, Inc. dated August 14, 2002
    
    (p)10.23
    
    Non-exclusive financial advisory agreement between CytRx Corporation and Sands Brothers & Co. Ltd. dated September 12, 2002
    
    (p)10.24
    
    Agreement between Kriegsman Capital Group and CytRx Corporate dated January 29, 2003 regarding office space rental and shared services
    
    (r)10.25
    
    Consulting Agreement, dated February 21, 2003 between CytRx Corporation and Corporate Capital Group International Ltd. Inc
    
    (r)10.26
    
    Securities Purchase Agreement, dated as of May 29, 2003, between CytRx Corporation and the Purchasers identified on the signatory page thereof
    
    (s)10.27
    
    Registration Rights Agreement, dated as of May 29, 2003, between CytRx Corporation and the Purchasers identified on the signature page thereof
    
    (s)10.28
    
    Non-Exclusive License Agreement dated as of April 15, 2003 between University of Massachusetts Medical School and CytRx Corporation covering RNA sequence specific mediators
of RNA interference
    
    (t)10.29
    
    Exclusive License Agreement dated as of April 15, 2003 between University of Massachusetts Medical School and CytRx Corporation covering in vivo production of small
interfering RNAs
    
    (t)10.30
    
    Exclusive License Agreement dated as of April 15, 2003 between University of Massachusetts Medical School and CytRx Corporation covering inhibitation of gene expression in
adipocytes using interference RNA
    
    (t)10.31
    
    Exclusive License Agreement dated as of April 15, 2003 between University of Massachusetts Medical School and CytRx Corporation covering RNAi targeting of viruses
    
    (t)10.32
    
    Exclusive License Agreement dated as of April 15, 2003 between University of Massachusetts Medical School and CytRx Corporation covering primary and polyvalent HIV-1
envelope glycoprotein DNA vaccines
    
    (t)10.33
    
    Exclusive License Agreement dated as of April 15, 2003 between University of Massachusetts Medical School and CytRx Corporation covering gene based therapeutics for solid
tumor treatments
    
    (t)10.34
    
    Exclusive License Agreement dated as of April 15, 2003 between University of Massachusetts
Medical School and CytRx Corporation covering selective silencing of a dominant ALS gene by
RNAi
    
    (t)10.35
    
    Investment Banking Agreement dated April 1, 2003 between Rockwell Asset Management Inc. and
CytRx Corporation
    
    (u)10.36
    
    Investment Banking Agreement dated April 3, 2003 between J.P. Turner & Company, LLC and
CytRx Corporation
    
    (u)10.37
    
    First Amendment to Investment Banking Agreement dated June 4, 2003 between J.P. Turner &
Company, LLC and CytRx Corporation
    
    (u)10.38
    
    Exclusive Financial Advisor Engagement Agreement dated May 16, 2003 between Cappello
Capital Corp. and CytRx Corporation
    
    (u)
 50




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##### Table of Contents



ExhibitNumber
    
    
    
    Footnote10.39
    
    Modification letter dated June 6, 2003 to Engagement Agreement between Cappello Capital
Corp. and CytRx Corporation
    
    (u)10.40
    
    Engagement Letter dated May 27, 2003 between Cardinal Securities, LLC and CytRx Corporation
    
    (u)10.41*
    
    Second Amended and Restated Employment Agreement dated June 10, 2003 between Steven A.
Kriegsman and CytRx Corporation
    
    (u)10.42
    
    Financial Consulting Agreement dated May 10, 2003 between James Skalko and CytRx Corporation
    
    (u)10.43
    
    Form of Securities Purchase Agreement, dated as of September 15, 2003, between CytRx
Corporation and the Purchasers identified on the signatory page thereof
    
    (v)10.44
    
    Form of Registration Rights Agreement, dated as of September 15, 2003, between CytRx
Corporation and the Purchasers identified on the signature page thereof
    
    (v)10.45
    
    Amended and Restated License Agreement dated as of September 15, 2003 between University of
Massachusetts Medical School and CytRx Corporation covering inhibition of gene expression
in adipocytes using interference RNA, certain data bases, the use of endoplasmic reticulum
stress response pathway of adipose cells to enhance whole body insulin sensitivity, and
receptor-activated reporter systems
    
    (w)10.46
    
    Second Amendment to Investment Banking Agreement dated as of August 13, 2003 between J.P.
Turner & Company, LLC and CytRx Corporation
    
    (w)10.47*
    
    Agreement dated as of July 17, 2003 between Dr. Louis J. Ignarro and CytRx Corporation
    
    (w)10.48*
    
    Employment Agreement dated as of August 1, 2003 between C. Kirk Peacock and CytRx
Corporation
    
    (w)10.49*
    
    Employment Agreement dated as of September 17, 2003 between Mark A. Tepper and Araios, Inc
    
    (w)10.50
    
    Agreement of Settlement and Release dated August 8, 2003 among Corporate Capital Group
International Ltd., Inc, Peter Simone and CytRx Corporation
    
    (w)10.51
    
    Confirming letter dated September 19, 2003 to the engagement agreement dated May 16, 2003
between Cappello Capital Corp. and CytRx Corporation
    
    (w)10.52
    
    Preferred Stock Purchase Agreement dated as of September 16, 2003 between Araios, Inc. and
CytRx Corporation
    
    (w)10.53
    
    Stockholders Agreement dated as of September 17, 2003 among Araios, Inc., Dr. Michael Czech
and CytRx Corporation
    
    (w)10.54
    
    Private Placement Agent Agreement dated September 15, 2003 between Dunwoody Brokerage
Services, Inc. and CytRx Corporation
    
    (w)10.55
    
    Private Placement Agent Agreement dated September 15, 2003 between Gilford Securities Incorporated and CytRx Corporation
    
    (w)10.56
    
    Agreement dated as of September 16, 2003 between Maxim Group, LLC and CytRx Corporation
    
    (w)10.57
    
    Amended and Restated Professional Services Agreement among CytRx Corporation, The Kriegsman Group and Kriegsman Capital Group, dated as of
July 1, 2003
    
    (x)10.58
    
    Agreement among University of Massachusetts, Advanced BioScience Laboratories, Inc and CytRx Corporation, dated as of December 3, 2003
    
    (x)10.59
    
    Amended and Restated Exclusive License Agreement among University of Massachusetts Medical School, CytRx Corporation and Advanced BioScience
Laboratories, Inc., dated as of December 22, 2003
    
    (x)10.60
    
    Collaboration Agreement among University of Massachusetts, Advanced BioScience Laboratories, Inc. and CytRx Corporation, dated as of December
22, 2003
    
    (x)10.61
    
    Sublicense Agreement between CytRx Corporation and Advanced BioScience Laboratories, Inc., dated as of December 22, 2003
    
    (x)10.62
    
    Agreement between CytRx Corporation and Dr. Robert Hunter regarding SynthRx, Inc dated October 20, 2003
    
    (x)10.63
    
    Office Lease between The Kriegsman Group and Douglas Emmett, dated April 13, 2000
    
    (x)
 51




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##### Table of Contents



ExhibitNumber
    
    
    
    Footnote10.64
    
    Assignment to CytRx Corporation effective July 1, 2003 of Office Lease between The Kriegsman Group and Douglas Emmett, dated April 13, 2000
    
    (x)10.65*
    
    Amendment dated October 18, 2003 to Agreement between Dr. Louis J. Ignarro and CytRx Corporation dated as of July 17, 2003
    
    (x)10.66
    
    Consulting Agreement dated December 1, 2003 between CytRx Corporation and MBN Consulting, LLC
    
    (x)10.67
    
    Office Lease between Araios, Inc. and Are-One Innovation Drive, LLC dated 11-19-03
    
    (x)10.68
    
    Registration Rights Agreement, dated as of January 29, 2004, by and between CytRx Corporation and Advanced BioScience Laboratories, Inc
    
    (y)10.69
    
    Consulting Agreement, dated as of February 9, 2004, between CytRx Corporation and The Investor Relations Group, Inc
    
    (y)10.70
    
    Investment Banking Agreement, dated as of February  , 2004, between CytRx Corporation and Gunn Allen Financial, Inc
    
    (y)10.71
    
    Scientific Advisory Board Agreement, effective as of March 3, 2004, by Tariq M. Rana, Ph.D., CytRx Corporation and Araios, Inc
    
    (y)10.72
    
    Scientific Advisory Board Agreement, effective as of March 3, 2004, by Craig Mello, Ph.D., CytRx Corporation and Araios, Inc
    
    (y)10.73
    
    Patent License Agreement, dated May, 2004, among CytRx Corporation, Imperial College of Science and Technology and Imperial College
Innovations Limited
    
    (z)10.74*
    
    Mutual General Release and Severance Agreement, dated May 12, 2004, between CytRx Corporation and C. Kirk Peacock
    
    (z)10.75*
    
    Mutual General Release and Severance Agreement, dated May12, 2004, between CytRx Corporation and Gregory Liberman
    
    (z)10.76
    
    Settlement and Release Agreement dated May 10, 2004, by and between MBN Consulting, LLC and CytRx Corporation
    
    (aa)10.77
    
    Registration Rights Agreement dated May 10, 2004, by and between MBN Consulting, LLC and CytRx Corporation
    
    (aa)10.78
    
    Collaboration and Invention Disclosure Agreement dated July 8, 2004, by and between the University of Massachusetts, as represented solely by the Medical School at its Worcester campus, and CytRx
Corporation
    
    (aa)10.79*
    
    Employment Agreement dated July 6, 2004, by and between Jack Barber and CytRx Corporation
    
    (aa)10.80*
    
    Employment Agreement dated July 12, 2004, by and between Matthew Natalizio and CytRx Corporation
    
    (aa)10.81*
    
    Employment Agreement dated July 15, 2004, by and between Benjamin Levin and CytRx Corporation
    
    (aa)10.82
    
    Mutual and General Release of All Claims effective as of May 29, 2004, by and between Madison & Wall Worldwide, Inc. and CytRx Corporation
    
    (aa)10.83
    
    Registration Rights Agreement dated May  , 2004, by and between Madison & Wall Worldwide, Inc. and CytRx Corporation
    
    (aa)10.84
    
    Investment Banking Agreement dated September 13, 2004, by and between CytRx Corporation and J.P. Turner & Company, LLC
    
    (bb)10.85
    
    Investment Banking Agreement dated September 30, 2004, by and between CytRx Corporation and Rodman & Renshaw, LLC
    
    (cc)10.86
    
    Asset Sale and Purchase Agreement dated October 4, 2004, by and among CytRx Corporation, Biorex Research & Development, RT and BRX Research and Development Company Ltd
    
    (dd)10.87
    
    Securities Purchase Agreement dated as of October 4, 2004 among CytRx Corporation and the Purchasers identified on the signatory page thereof
    
    (dd)
 52




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##### Table of Contents



ExhibitNumber
    
    
    
    Footnote10.88
    
    Registration Rights Agreement dated as of October 4, 2004 among CytRx Corporation and the Purchasers identified on the signatory page thereof
    
    (dd)10.89
    
    Securities Purchase Agreement, dated as of January 20, 2005, by and among CytRx Corporation and the Investors named therein
    
    (ee)10.90
    
    Registration Rights Agreement, dated as of January 20, 2005, by and among CytRx Corporation and the Investors named therein
    
    (ee)10.91
    
    Investment Banking Agreement dated January 20, 2005 between CytRx Corporation and Rodman & Renshaw, LLC
    
    (ee)10.91*
    
    Employment Agreement dated April 29, 2005 between CytRx Corporation and Dr. Scott Wieland
    
    (ff)10.92*
    
    Amended and Restated Employment Agreement dated May 17, 2005 between CytRx Corporation and Steven A. Kriegsman
    
    (gg)10.93*
    
    Amended and Restated Employment Agreement dated May 17, 2005 between CytRx Corporation and Matthew Natalizio
    
    (gg)10.94*
    
    Amended and Restated Employment Agreement dated May 17, 2005 between CytRx Corporation and Dr. Jack Barber
    
    (gg)10.95*
    
    Amended and Restated Employment Agreement dated May 17, 2005 between CytRx Corporation and Benjamin S. Levin
    
    (gg)10.96*
    
    Employment Agreement dated October 6, 2005 between CytRx Corporation and Dr. Mark A. Tepper
    
    (hh)10.97
    
    First Amendment to Office Lease dated October 14, 2005, by and between CytRx Corporation and Douglas Emmett 1993, LLC
    
    (ii)10.98*
    
    Schedule of Non-Employee Director Compensation adopted on October 24, 2005 Securities Purchase Agreement, dated as of March 2, 2006, by and among CytRx Corporation and the
    
    (jj)10.99
    
    purchasers named therein
    
    (kk)10.100
    
    Registration Rights Agreement, dated as of March 2, 2006, by and among CytRx Corporation
and the purchasers named therein.
    
    (kk)10.101
    
    Lock-Up Agreement, dated as of March 2, 2006, by and among CytRx Corporation, Steven A.
Kriegsman and American Stock Transfer & Trust Company.
    
    (kk)10.102
    
    Investment Banking Agreement dated February ___,2006 between CytRx Corporation and T.R.
Winston & Company LLC.
    
    (kk)14.1
    
    Code of Ethics
    
    (x)21.1
    
    Subsidiaries
    
    (mm)23.1
    
    Consent of BDO Seidman, LLP31.1
    
    Certification of Chief Executive Officer Pursuant to 15 U.S.C. Section 7241, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer Pursuant to 15 U.S.C. Section 7241, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    
    (mm)32.2
    
    Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    
    (mm)
 
 *
    
    Indicates a management contract or compensatory plan or arrangement.
    
    Confidential treatment has been requested or granted for certain portions which have been
blanked out in the copy of the exhibit filed with the Securities and Exchange Commission. The
omitted information has been filed separately with the Securities and Exchange Commission. 53




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##### Table of Contents



(a)
    
    Incorporated by reference to the Registrants Registration Statement on Form S-3 (File No.
333-39607) filed on November 5, 1997(b)
    
    Incorporated by reference to the Registrants Registration Statement on Form S-8 (File No.
333-37171) filed on July 21, 1997(c)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K filed on April 21,
1997(d)
    
    Incorporated by reference to the Registrants Registration Statement on Form S-l (File No.
33-8390) filed on November 5, 1986(e)
    
    Incorporated by reference to the Registrants Quarterly Report on Form 10-Q filed on November
13, 1997(f)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-K filed on March 27,
1996(g)
    
    Incorporated by reference to the Registrants Registration Statement on Form S-8 (File No.
33-93818) filed on June 22, 1995(h)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-K filed on March 30,
1998(i)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-K filed on March 30,
2000(j)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K/A filed on March 16,
2001(k)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-K filed on March 27,
2001(l)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K filed on December
21, 2001(m)
    
    Incorporated by reference to the Registrants Proxy Statement filed June 10, 2002(n)
    
    Incorporated by reference to the Registrants Form S-8 (File No. 333-91068) filed on June 24,
2002(o)
    
    Incorporated by reference to the Registrants 8-K filed on August 1, 2002(p)
    
    Incorporated by reference to the Registrants 10-Q filed on November 14, 2002(q)
    
    Incorporated by reference to the Registrants 10-K filed on March 31, 2003(r)
    
    Incorporated by reference to the Registrants 10-Q filed on May 15, 2003(s)
    
    Incorporated by reference to the Registrants 8-K filed on May 30, 2003(t)
    
    Incorporated by reference to the Registrants S-3 Amendment No. 4 (File No. 333-100947) filed
on August 5, 2003(u)
    
    Incorporated by reference to the Registrants 10-Q filed on August 14, 2003(v)
    
    Incorporated by reference to the Registrants 8-K filed on September 17, 2003(w)
    
    Incorporated by reference to the Registrants 10-Q filed on November 12, 2003(x)
    
    Incorporated by reference to the Registrants 10-K filed on May 14, 2004(y)
    
    Incorporated by reference to the Registrants 10-Q filed on May 17, 2004(z)
    
    Incorporated by reference to the Registrants Post-Effective Amendment No. 1 to Registration
Statement on Form S-1 to Form S-3 (Reg. No. 333-109708) filed on June 2, 2004(aa)
    
    Incorporated by reference to the Registrants 10-Q filed on August 16, 2004 54




---



##### Table of Contents



(bb)
    
    Incorporated by reference to the Registrants 8-K filed on September 17, 2004(cc)
    
    Incorporated by reference to the Registrants 10-Q filed on November 3, 2004(dd)
    
    Incorporated by reference to the Registrants 8-K filed on October 5, 2004(ee)
    
    Incorporated by reference to the Registrants 8-K filed on January 21, 2005(ff)
    
    Incorporated by reference to the Registrants 8-K filed on May 4, 2005(gg)
    
    Incorporated by reference to the Registrants 10-Q filed on August 15, 2005(hh)
    
    Incorporated by reference to the Registrants 8-K filed on October 7, 2005(ii)
    
    Incorporated by reference to the Registrants 8-K filed on October 20, 2005(jj)
    
    Incorporated by reference to the Registrants 10-Q filed on November 14, 2005(kk)
    
    Incorporated by reference to the Registrants 8-K filed on March 3, 2006(ll)
    
    Incorporated by reference to the Registrants Proxy Statement filed June 7, 2005(mm)
    
    Previously filed. 55




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##### Table of Contents



SIGNATURES
  CYTRX CORPORATIONBy:
    /s/ Steven A. KriegsmanSteven A. KriegsmanPresident and Chief Executive Officer  56




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##### Table of Contents



INDEX TO FINANCIAL STATEMENTS
 AND FINANCIAL STATEMENT SCHEDULE
 CytRx CorporationConsolidated Balance Sheets (restated)
    
    
    F-2Consolidated Statements of Operations
    
    
    F-3Consolidated Statements of Stockholders Equity (restated)
    
    
    F-4Consolidated Statements of Cash Flows
    
    
    F-5Notes to Consolidated Financial Statements
    
    
    F-6Report of Independent Registered Public Accounting Firm
    
    
    F-17Financial Statement Schedule Schedule II  Valuation and Qualifying Accounts
    
    
    F-18
 F-1




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##### Table of Contents



CYTRX CORPORATION
 
 CONSOLIDATED BALANCE SHEETS
 December 31,2005
    
    
    2004(restated)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    8,299,390
    
    
    $
    1,987,595Short-term investments
    
    
    
    
    
    
    1,011,814Accounts Receiveable
    
    
    172,860
    
    
    
    Prepaid compensation, current portion
    
    
    27,813
    
    
    
    604,750Prepaid and other current assets
    
    
    287,793
    
    
    
    351,396Total current assets
    
    
    8,787,856
    
    
    
    3,955,555Equipment and furnishings, net
    
    
    352,641
    
    
    
    447,579Molecular library, net
    
    
    372,973
    
    
    
    447,567Goodwill
    
    
    183,780
    
    
    
    Other assets:Prepaid and other assets
    
    
    241,660
    
    
    
    198,055Total assets
    
    $
    9,938,910
    
    
    $
    5,048,756LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    815,626
    
    
    $
    1,661,104Accrued expenses and other current liabilities
    
    
    1,639,922
    
    
    
    1,074,146Total current liabilities
    
    
    2,455,548
    
    
    
    2,735,250Accrued loss on facility abandonment
    
    
    
    
    
    
    206,833Deferred gain on sale of building
    
    
    
    
    
    
    65,910Deferred revenue
    
    
    275,000
    
    
    
    275,000Total liabilities
    
    
    2,730,548
    
    
    
    3,282,993Minority interest
    
    
    
    
    
    
    170,671Commitments and contingencies
    
    
    
    
    
    
    Stockholders equity:Preferred Stock, $.01 par value, 5,000,000
shares authorized, including 5,000 shares of
Series A Junior Participating Preferred
Stock; no shares issued and outstanding
    
    
    
    
    
    
    Common stock, $.001 par value, 125,000,000
shares authorized; 59,283,960 and 40,189,688
shares issued and outstanding at December 31,
2005 and 2004, respectively
    
    
    59,284
    
    
    
    40,190Additional paid-in capital
    
    
    131,790,932
    
    
    
    110,028,327Treasury stock, at cost (633,816 shares held,
at cost, at December 31, 2005 and 2004,
respectively)
    
    
    (2,279,238
    )
    
    
    (2,279,238
    )Accumulated deficit
    
    
    (122,362,616
    )
    
    
    (106,194,187
    )Total stockholders equity
    
    
    7,208,362
    
    
    
    1,595,092Total liabilities and stockholders equity
    
    $
    9,938,910
    
    
    $
    5,048,756
  F-2




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##### Table of Contents



CYTRX CORPORATION
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 Year Ended December 31,2005
    
    
    2004
    
    
    2003Income:Service revenues
    
    $
    82,860
    
    
    $
    
    
    
    $
    License fees
    
    
    101,500
    
    
    
    428,164
    
    
    
    94,000184,360
    
    
    
    428,164
    
    
    
    94,000Expenses:Research and development (includes non-cash stock
compensation of $219,718, $1,387,645 and
$2,902,484 in 2005, 2004, and 2003 respectively)
    
    
    9,087,270
    
    
    
    6,012,903
    
    
    
    4,387,599In-process research and development
    
    
    
    
    
    
    3,021,952
    
    
    
    Common stock, stock options and warrants issued
for general and administrative
    
    
    366,753
    
    
    
    1,977,330
    
    
    
    3,148,047General and administrative
    
    
    6,057,353
    
    
    
    5,923,910
    
    
    
    3,840,620Depreciation and amortization
    
    
    217,095
    
    
    
    103,851
    
    
    
    2,13015,728,471
    
    
    
    17,039,946
    
    
    
    11,378,396Loss before other income
    
    
    (15,544,111
    )
    
    
    (16,611,782
    )
    
    
    (11,284,396
    )Other income Gain on lease termination
    
    
    163,604
    
    
    
    
    
    
    
    Interest income
    
    
    206,195
    
    
    
    59,977
    
    
    
    82,064(15,174,312
    )
    
    
    (16,551,805
    )
    
    
    (11,202,332
    )Equity in losses from minority-owned entity
    
    
    
    
    
    
    
    
    
    
    (6,662,031
    )Minority interest in losses of subsidiary
    
    
    81,452
    
    
    
    159,616
    
    
    
    19,763Net loss
    
    $
    (15,092,860
    )
    
    $
    (16,392,189
    )
    
    $
    (17,844,600
    )Basic and diluted loss per common share
    
    $
    (0.27
    )
    
    $
    (0.48
    )
    
    $
    (0.65
    )Basic and diluted weighted average shares outstanding
    
    
    56,852,402
    
    
    
    34,325,636
    
    
    
    27,324,794
  F-3




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##### Table of Contents



CYTRX CORPORATION
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 AdditionalCommon Stock
    
    
    Paid-In
    
    
    Accumulated
    
    
    TreasuryShares Issued
    
    
    Amount
    
    
    Capital
    
    
    Deficit
    
    
    Stock
    
    
    TotalBalance at December 31, 2002
    
    
    22,143,927
    
    
    $
    22,144
    
    
    $
    82,173,839
    
    
    $
    (71,957,398
    )
    
    $
    (2,279,238
    )
    
    $
    7,959,347Issuance of common stock for research
and development
    
    
    1,828,359
    
    
    
    1,828
    
    
    
    2,550,606
    
    
    
    
    
    
    
    
    
    
    
    2,552,434Common stock and warrants issued in
connection with private placements
    
    
    7,081,025
    
    
    
    7,081
    
    
    
    12,485,543
    
    
    
    
    
    
    
    
    
    
    
    12,492,624Issuance of common stock for services
    
    
    700,000
    
    
    
    700
    
    
    
    1,534,050
    
    
    
    
    
    
    
    
    
    
    
    1,534,750Issuance of stock options/warrants
    
    
    
    
    
    
    
    
    
    
    1,613,297
    
    
    
    
    
    
    
    
    
    
    
    1,613,297Options and warrants exercised
    
    
    2,638,689
    
    
    
    2,639
    
    
    
    1,882,125
    
    
    
    
    
    
    
    
    
    
    
    1,884,764Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,844,600
    )
    
    
    
    
    
    
    (17,844,600
    )Balance at December 31, 2003
    
    
    34,392,000
    
    
    
    34,392
    
    
    
    102,239,460
    
    
    
    (89,801,998
    )
    
    
    (2,279,238
    )
    
    
    10,192,616Common stock and warrants issued in
connection with private placements
    
    
    4,100,000
    
    
    
    4,100
    
    
    
    3,899,900
    
    
    
    
    
    
    
    
    
    
    
    3,904,000Issuance of common stock for services
    
    
    800,000
    
    
    
    800
    
    
    
    1,252,950
    
    
    
    
    
    
    
    
    
    
    
    1,253,750Issuance of stock options/warrants
    
    
    
    
    
    
    
    
    
    
    2,111,225
    
    
    
    
    
    
    
    
    
    
    
    2,111,225Options and warrants exercised
    
    
    897,688
    
    
    
    898
    
    
    
    524,792
    
    
    
    
    
    
    
    
    
    
    
    525,690Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,392,189
    )
    
    
    
    
    
    
    (16,392,189
    )Balance at December 31, 2004
    
    
    40,189,688
    
    
    
    40,190
    
    
    
    110,028,327
    
    
    
    (106,194,187
    )
    
    
    (2,279,238
    )
    
    
    1,595,092Common stock and warrants issued in
connection with private placements
    
    
    18,084,494
    
    
    
    18,084
    
    
    
    19,572,362
    
    
    
    
    
    
    
    
    
    
    
    19,590,446Issuance of stock options/ warrants:For services
    
    
    
    
    
    
    
    
    
    
    586,471
    
    
    
    
    
    
    
    
    
    
    
    586,471For minority interest
    
    
    
    
    
    
    
    
    
    
    273,000
    
    
    
    
    
    
    
    
    
    
    
    273,000Options and warrants exercised
    
    
    1,009,778
    
    
    
    1,010
    
    
    
    255,203
    
    
    
    
    
    
    
    
    
    
    
    256,213Deemed dividend
    
    
    
    
    
    
    
    
    
    
    1,075,569
    
    
    
    (1,075,569
    )
    
    
    
    
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,092,860
    )
    
    
    
    
    
    
    (15,092,860
    )Balance at December 31, 2005 (restated)
    
    
    59,283,960
    
    
    $
    59,284
    
    
    $
    131,790,932
    
    
    $
    (122,362,616
    )
    
    $
    (2,279,238
    )
    
    $
    7,208,362
  F-4




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##### Table of Contents



CYTRX CORPORATION
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Years Ended December 31,2005
    
    
    2004
    
    
    2003Cash flows from operating activities:Net loss
    
    $
    (15,092,860
    )
    
    $
    (16,392,189
    )
    
    $
    (17,844,600
    )Adjustments to reconcile net loss to net cash (used in) provided by
operating activities:Depreciation and amortization
    
    
    217,095
    
    
    
    103,851
    
    
    
    2,130Equity in losses from minority-owned entity
    
    
    
    
    
    
    
    
    
    
    6,662,031Minority interest in losses of subsidiary
    
    
    (81,452
    )
    
    
    (159,616
    )
    
    
    (19,763
    )Gain on lease termination
    
    
    (163,604
    )
    
    
    
    
    
    
    Stock option and warrant expense
    
    
    366,753
    
    
    
    1,104,730
    
    
    
    1,613,297Common stock issued for services
    
    
    
    
    
    
    872,600
    
    
    
    1,534,750Non-cash research and development
    
    
    219,718
    
    
    
    1,387,645
    
    
    
    2,902,484Changes in assets and liabilities:Accounts receivable
    
    
    (172,860
    )
    
    
    
    
    
    
    Note receivable
    
    
    
    
    
    
    16,608
    
    
    
    365,249Prepaid and other assets
    
    
    596,935
    
    
    
    (768,433
    )
    
    
    14,123Accounts payable
    
    
    (845,477
    )
    
    
    922,969
    
    
    
    658,188Other liabilities
    
    
    456,637
    
    
    
    558,643
    
    
    
    (181,044
    )Total adjustments
    
    
    593,745
    
    
    
    4,038,997
    
    
    
    13,551,445Net cash used in operating activities
    
    
    (14,499,115
    )
    
    
    (12,353,192
    )
    
    
    (4,293,155
    )Cash flows from investing activities:Purchases of short-term investments
    
    
    
    
    
    
    (961,765
    )
    
    
    Redemption of short-term investments
    
    
    1,011,814
    
    
    
    
    
    
    
    1,401,358Net cash paid related to acquisition Purchases of property and equipment
    
    
    (47,563
    )
    
    
    (771,584
    )
    
    
    (228,459
    )Disposals of property and equipment, net
    
    
    
    
    
    
    
    
    
    
    Net cash (used in) provided by investing activities
    
    
    964,251
    
    
    
    (1,733,349
    )
    
    
    1,172,899Cash flows from financing activities:Net proceeds from exercise of stock options and warrants
    
    
    256,213
    
    
    
    525,690
    
    
    
    1,884,764Net proceeds from issuance of common stock
    
    
    19,590,446
    
    
    
    3,904,000
    
    
    
    12,492,624Net cash provided by financing activities
    
    
    19,846,659
    
    
    
    4,429,690
    
    
    
    14,377,388Net increase (decrease) in cash and cash equivalents
    
    
    6,311,795
    
    
    
    (9,656,851
    )
    
    
    11,257,132Cash and cash equivalents at beginning of year
    
    
    1,987,595
    
    
    
    11,644,446
    
    
    
    387,314Cash and cash equivalents at end of year
    
    $
    8,299,390
    
    
    $
    1,987,595
    
    
    $
    11,644,446Supplemental disclosures of non-cash investing and financing activities:Fair market value of options and warrants provided for goods and services
    
    $
    586,471
    
    
    $
    1,104,730
    
    
    $
    1,613,297Fair market value of common stock exchanged for minority interest in
subsidiary
    
    $
    273,000
    
    
    $
    
    
    
    $
    Non-cash
financing activities:
   F-5




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##### Table of Contents



CYTRX CORPORATION
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. Nature of Business
    2. Summary of Significant Accounting Policies
 Basis of Presentation and Principles of Consolidation
 Revenue Recognition
  F-6




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##### Table of Contents



Cash Equivalents
 Investments
 Fair Value of Financial Instruments
 Property and Equipment
 Molecular Library
 Patents and Patent Application Costs
 Basic and Diluted Loss per Common Share
 Shares Reserved for Future Issuance
 Stock-based Compensation Accounting for Stock Issued to
Employees Accounting for Stock-Based Compensation
 F-7




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##### Table of Contents



(restated)2005
    
    
    2004
    
    
    2003Net loss, as reported
    
    $
    (15,093
    )
    
    $
    (16,392
    )
    
    $
    (17,845
    )Total stock-based employee compensation
expense determined under fair value-based
method for all awards
    
    
    (1,388
    )
    
    
    (1,415
    )
    
    
    (1,084
    )Pro forma net loss
    
    $
    (16,481
    )
    
    $
    (17,807
    )
    
    $
    (18,929
    )Loss per share, as reported (basic and diluted)
    
    $
    (0.27
    )
    
    $
    (0.48
    )
    
    $
    (0.65
    )Loss per share, pro forma (basic and diluted)
    
    $
    (0.29
    )
    
    $
    (0.52
    )
    
    $
    (0.69
    )
  (restated)2005
    
    2004
    
    2003Weighted average risk free interest rate
    
    
    4.10
    %
    
    
    3.65
    %
    
    
    2.82
    %Dividend yields
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %Volatility factors of the expected market price of the Companys common stock
    
    
    109
    %
    
    
    117
    %
    
    
    99
    %Weighted average years outstanding
    
    
    4.8
    
    
    
    5.8
    
    
    
    5.1
  Research and Development Expenses
 Income Taxes
 Concentrations of Credit Risk
 Use of Estimates
 Segment Information
 Other comprehensive income/(loss)
 F-8




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##### Table of Contents



3. Recent Accounting Pronouncements
      4. Investments
  5. Restricted Assets
  F-9




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##### Table of Contents



6. Property and Equipment
  2005
    
    
    2004Equipment and furnishings
    
    $
    601
    
    
    $
    554Less  accumulated depreciation
    
    
    (248
    )
    
    
    (106
    )Equipment and furnishings, net
    
    
    353
    
    
    
    448Molecular library
    
    $
    447
    
    
    $
    447Less  accumulated amortization
    
    
    (75
    )
    
    
    Molecular library, net
    
    
    372
    
    
    
    447Property and equipment, net
    
    $
    725
    
    
    $
    895
  7. Accrued Expenses
  2005
    
    
    2004Deferred gain on sale of building (current portion)
    
    $
    
    
    
    $
    28Accrued loss on facility abandonment (current portion)
    
    
    
    
    
    
    106Professional fees
    
    
    205
    
    
    
    359Research and development costs
    
    
    911
    
    
    
    140Accrued bonuses
    
    
    163
    
    
    
    181Accrued settlement fee
    
    
    253
    
    
    
    200Other miscellaneous
    
    
    108
    
    
    
    60Total
    
    $
    1,640
    
    
    $
    1,074
 8. Termination of the Atlanta Facility Lease
  9. Commitments and Contingencies
  Operating
    
    
    License
    
    
    EmploymentLeases
    
    
    Agreements
    
    
    Agreements
    
    
    Total(In thousands)2006
    
    $
    507
    
    
    $
    971
    
    
    $
    1,264
    
    
    $
    2,7422007
    
    
    389
    
    
    
    235
    
    
    
    887
    
    
    
    1,5112008
    
    
    108
    
    
    
    339
    
    
    
    590
    
    
    
    1,0372009
    
    
    1
    
    
    
    339
    
    
    
    
    
    
    
    3402010 and thereafter
    
    
    2
    
    
    
    1,070
    
    
    
    
    
    
    
    1,072Total
    
    $
    1,007
    
    
    $
    2,954
    
    
    $
    2,741
    
    
    $
    6,702
 F-10




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##### Table of Contents



10. Private Placements of Common Stock
     F-11




---



##### Table of Contents



11. Investment in Subsidiary
  12. Merger with Global Genomics
  Equity in Losses of Blizzard.
 Impairment Test of Intangible Assets.
  Investment in minority owned entity  acquired developed technology
    
    $
    7,309,250Receivable from Blizzard
    
    
    16,640Less: Accumulated amortization
    
    
    (883,311
    )Less: Equity-method losses to date
    
    
    (574,381
    )Less: Impairment charge
    
    
    (5,868,198
    )$
    
 13. Severance Payments to Officers
  F-12




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##### Table of Contents



14. Stock Options and Warrants
  Accounting for Convertible Securities with Beneficial Conversion Features
or Contingently Adjustable Conversion Ratios Application of 98-5 to Certain
Convertible Instruments
    Weighted AverageStock Options
    
    
    Exercise Price2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003Outstanding  beginning of year
    
    
    4,741,042
    
    
    
    2,778,042
    
    
    
    1,194,038
    
    
    $
    1.93
    
    
    $
    2.08
    
    
    $
    1.10Granted
    
    
    1,516,500
    
    
    
    2,318,000
    
    
    
    2,463,000
    
    
    
    0.95
    
    
    
    1.73
    
    
    
    2.26Exercised
    
    
    (17,000
    )
    
    
    (55,000
    )
    
    
    (817,484
    )
    
    
    0.92
    
    
    
    0.89
    
    
    
    0.71Forfeited
    
    
    (38,000
    )
    
    
    (285,000
    )
    
    
    (50,000
    )
    
    
    1.52
    
    
    
    2.00
    
    
    
    1.00Expired
    
    
    
    
    
    
    (15,000
    )
    
    
    (11,512
    )
    
    
    
    
    
    
    3.16
    
    
    
    1.00Outstanding  end of year
    
    
    6,202,542
    
    
    
    4,741,042
    
    
    
    2,778,042
    
    
    
    1.69
    
    
    
    1.93
    
    
    
    2.08Exercisable at end of year
    
    
    3,438,157
    
    
    
    2,136,898
    
    
    
    650,816
    
    
    $
    1.89
    
    
    $
    1.94
    
    
    $
    1.69Weighted average fair value of
stock options granted during the
year:
    
    $
    0.95
    
    
    $
    1.73
    
    
    $
    2.26
 Weighted AverageWarrants
    
    
    Exercise Price2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003Outstanding  beginning of year
    
    
    9,735,416
    
    
    
    7,352,077
    
    
    
    5,432,787
    
    
    $
    1.64
    
    
    $
    1.61
    
    
    $
    1.10Granted
    
    
    10,267,887
    
    
    
    3,884,778
    
    
    
    5,611,917
    
    
    
    1.96
    
    
    
    1.58
    
    
    
    1.81Exercised
    
    
    (1,294,354
    )
    
    
    (976,439
    )
    
    
    (2,083,397
    )
    
    
    0.55
    
    
    
    0.74
    
    
    
    0.81Forfeited
    
    
    
    
    
    
    (500,000
    )
    
    
    (825,000
    )
    
    
    
    
    
    
    2.25
    
    
    
    0.32Expired
    
    
    (200,000
    )
    
    
    (25,000
    )
    
    
    (784,230
    )
    
    
    1.00
    
    
    
    0.80
    
    
    
    2.32Outstanding  end of year
    
    
    18,508,949
    
    
    
    9,735,416
    
    
    
    7,352,077
    
    
    
    1.94
    
    
    
    1.64
    
    
    
    1.61Exercisable at end of year
    
    
    18,508,949
    
    
    
    9,735,416
    
    
    
    6,752,070
    
    
    $
    1.94
    
    
    $
    1.58
    
    
    $
    1.57Weighted average fair value of
warrants granted during the year:
    
    $
    2.00
    
    
    $
    1.36
    
    
    $
    1.81
 F-13




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##### Table of Contents



Stock Options Outstanding
    
    Stock Options ExercisableWeighted AverageRemaining
    
    
    
    
    
    Number ofNumber of
    
    Contractual Life
    
    Weighted Average
    
    Shares
    
    Weighted AverageRange of Exercise Prices
    
    Shares
    
    (years)
    
    Exercise Price
    
    Exercisable
    
    Exercise Price$0.25 - 1.05
    
    
    1,307,043
    
    
    
    7.5
    
    
    $
    0.82
    
    
    
    401,099
    
    
    $
    0.841.06 - 1.79
    
    
    918,000
    
    
    
    6.8
    
    
    
    1.27
    
    
    
    350,868
    
    
    
    1.271.80 - 2.63
    
    
    3,980,499
    
    
    
    7.5
    
    
    
    2.08
    
    
    
    2,686,191
    
    
    
    2.116,205,542
    
    
    
    7.4
    
    
    $
    1.69
    
    
    
    3,438,158
    
    
    $
    1.88
 Warrants Outstanding
    
    Warrants
    
    ExercisableWeighted AverageRemaining
    
    
    
    
    
    Number ofNumber of
    
    Contractual Life
    
    Weighted Average
    
    Shares
    
    Weighted AverageRange of Exercise Prices
    
    Shares
    
    (years)
    
    Exercise Price
    
    Exercisable
    
    Exercise Price$0.20 - 1.05
    
    
    1,319,367
    
    
    
    3.3
    
    
    $
    0.68
    
    
    
    1,319,367
    
    
    $
    0.681.06 - 1.79
    
    
    4,341,803
    
    
    
    1.6
    
    
    
    1.57
    
    
    
    4,341,803
    
    
    
    1.571.80 - 2.67
    
    
    10,735,282
    
    
    
    2.0
    
    
    
    2.00
    
    
    
    10,735,282
    
    
    
    2.002.68 - 2.73
    
    
    2,112,497
    
    
    
    2.7
    
    
    
    2.73
    
    
    
    2,112,497
    
    
    
    2.7318,508,949
    
    
    
    2.1
    
    
    $
    1.89
    
    
    
    18,508,949
    
    
    $
    1.89
 15. Stockholder Protection Rights Plan
    16. Income Taxes
  F-14




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##### Table of Contents



December 31,2005
    
    
    2004Deferred tax assets:Net operating loss carryforward
    
    $
    35,607
    
    
    $
    30,231Tax credit carryforward
    
    
    6,443
    
    
    
    6,363Property and equipment and capital losses
    
    
    4,476
    
    
    
    4,559Total deferred tax assets
    
    
    46,526
    
    
    
    41,153Deferred tax liabilities  Depreciation and other
    
    
    (2,730
    )
    
    
    (2,665
    )Net deferred tax assets
    
    
    43,796
    
    
    
    38,488Valuation allowance
    
    
    (43,796
    )
    
    
    (38,488
    )$
    
    
    
    $
    
    December 31,2005
    
    
    2004
    
    
    2003Federal benefit at statutory rate
    
    $
    (5,128
    )
    
    $
    (5,570
    )
    
    $
    (6,066
    )State income taxes, net of Federal taxes
    
    
    (603
    )
    
    
    (655
    )
    
    
    (1,070
    )Permanent differences
    
    
    736
    
    
    
    1,103
    
    
    
    1,200Provision (benefit) related to change in valuation allowance
    
    
    5,308
    
    
    
    5,122
    
    
    
    7,414Other
    
    
    (313
    )
    
    
    
    
    
    
    (1,478
    )$
    
    
    
    $
    
    
    
    $
    
 17. License Agreements
 University of Massachusetts Medical School(UMMS)
 F-15




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##### Table of Contents



18. Quarterly Financial Data (unaudited)
  Quarter EndedMarch 31
    
    June 30
    
    September 30
    
    December 31(In thousands, except per share data)2005Total revenues
    
    $
    2
    
    
    $
    
    
    
    $
    10
    
    
    $
    173Net loss
    
    
    (3,527
    )
    
    
    (4,509
    )
    
    
    (3,492
    )
    
    
    (3,565
    )Basic and diluted loss per common share:Net loss
    
    $
    (0.07
    )
    
    $
    (0.08
    )
    
    $
    (0.06
    )
    
    $
    (0.06
    )2004Total revenues
    
    $
    100
    
    
    $
    228
    
    
    $
    
    
    
    $
    100Net loss
    
    
    (3,774
    )
    
    
    (4,061
    )
    
    
    (2,796
    )
    
    
    (5,761
    )Basic and diluted loss per common share:Net loss
    
    $
    (0.11
    )
    
    $
    (0.12
    )
    
    $
    (0.08
    )
    
    $
    (0.15
    )
  19. Related Party Transactions
  20. Subsequent Event
  F-16




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    /s/ BDO Seidman, LLPBDO Seidman, LLPLos Angeles, California 
 F-17




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##### Table of Contents



CYTRX CORPORATION
 
 SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS
For the Years Ended December 31, 2005, 2004 and 2003
 AdditionsBalance at
    
    Charged to
    
    Charged toBeginning of
    
    Costs and
    
    Other
    
    
    
    
    
    Balance atDescription
    
    Period
    
    Expenses
    
    Accounts
    
    Deductions
    
    End of PeriodReserve Deducted in the
Balance Sheet from the Asset to
Which it Applies:Allowance for Bad DebtsYear ended December 31, 2005
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Year ended December 31, 2004
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Year ended December 31, 2003
    
    
    
    
    
    
    4,939
    
    
    
    16,640
    
    
    
    21,579
    
    
    
    Allowance for Deferred Tax AssetsYear ended December 31, 2005
    
    $
    38,488,000
    
    
    $
    
    
    
    $
    5,308,000
    
    
    $
    
    
    
    $
    43,796,000Year ended December 31, 2004
    
    
    36,478,000
    
    
    $
    
    
    
    $
    2,008,000
    
    
    $
    
    
    
    $
    38,488,000Year ended December 31, 2003
    
    
    29,064,000
    
    
    
    
    
    
    
    7,414,000
    
    
    $
    
    
    
    
    36,478,000
 F-18