UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



FORM
10-K



[X]Annual report under Section 13 or 15(d) of
the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2008.



[   ]  Transition report
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the
transition period from _____ to _____.



Commission File Number 000-26181



AngioGenex, Inc.

(Exact name of small business issuer as
specified in its charter)



|                                                                                                                                                                                  |                                                   
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------
|Nevada
(State or other jurisdiction of
incorporation or organization)                                                                                                             | 86-0945116
(I.R.S. employer
identification number)
|425 Madison Ave., Suite 902, New
York, New York, 10017
(Address of principal executive
offices and zip code)

(212) 874-6008
(Registrants telephone number,
including area code)



Securities registered pursuant to Section
12(b) of the Act: NONE



Securities registered pursuant to Section
12(g) of the Act:

Common Stock, $0.001 par value



Check whether the issuer is not required to
file reports pursuant to Section 13 or 15(d) of the Exchange Act. [  ]



Check mark whether the issuer (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Exchange Act
during the past 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 [  ]



Check if there is no disclosure of
delinquent filers in response to Item 405 of Regulation S-B contained in this
form, and no disclosure will be contained, to the best of Registrants
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K.
[X]



Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
  YES [  ] NO [X]



The issuer had no revenues for its fiscal year ended
December 31, 2008.



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Aggregate market value of the
common equity held by non-affiliates of the issuer as of March 24, 2009 was
$5,687,116.



Number of shares outstanding of the issuers common stock
as of March 24, 2009: 21,302,906 shares.



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TABLE OF CONTENTS



|           |                                                                                                                            |    |     
|---------- | -------------------------------------------------------------------------------------------------------------------------- | -- | ----
|           |                                                                                                                            |    | Page
|PART I     |                                                                                                                            |    |     
|Item 1.    | Business                                                                                                                   |    | 4   
|Item 1A    | Risk
Factors                                                                                                               |    | 15  
|Item 2.    | Description of
Property                                                                                                    |    | 27  
|Item 3.    | Legal
Proceedings                                                                                                          |    | 27  
|Item 4.    | Submission of
Matters to a Vote of Security Holders                                                                        |    | 27  
|PART II    |                                                                                                                            |    | 28  
|Item 5.    | Market for
Common Equity and Related Stockholder Matters                                                                   |    | 28  
|Item 6.    | Selected
Financial Data                                                                                                    |    | 29  
|Item 7.    | Managements
Discussion and Analysis or Plan of Operation                                                                  |    | 29  
|Item 8.    | Financial
Statements                                                                                                       |    | 34  
|Item 9.    | Changes in and
Disagreements With Accountants on Accounting and Financial Disclosure                                       |    | 54  
|Item 9A.   | Controls and
Procedures                                                                                                    |    | 54  
|PART III   |                                                                                                                            |    |     
|Item 10.   | Directors,
Executive Officers, Promoters and Control Persons; Compliance with Section
16(a) of the Securities Exchange Act |    | 56  
|Item 11.   | Executive
Compensation                                                                                                     |    | 58  
|Item 12.   | Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters                             |    | 60  
|Item 13.   | Certain
Relationships and Related Transactions                                                                             |    | 62  
|Item 14.   | Principal
Accountant Fees and Services                                                                                     |    | 62  
|PART IV    |                                                                                                                            |    |     
|Item 15    | Exhibit
Index                                                                                                              |    | 63  
|SIGNATURES |                                                                                                                            | 64





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PART I



CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS



This annual report on
Form 10-K and the documents incorporated by reference include forward-looking
statements. To the extent that the information presented in this report
discusses financial projections, information or expectations about our business
plans, results of operations, products or markets, or otherwise makes statements
about future events, such statements are forward-looking. Such forward-looking
statements can be identified by the use of words such as may, will,
should, might, would, intends, anticipates, believes, estimates,
projects, forecasts, expects, plans, and proposes. Although we believe
that the expectations reflected in these forward-looking statements are based on
reasonable assumptions, there are a number of risks and uncertainties that could
cause actual results to differ materially from such forward-looking statements.
These include, among others, the cautionary statements in the Risk Factors and
Managements Discussion and Analysis and Plan of Operation sections of this
report. These cautionary statements identify important factors that could cause
actual results to differ materially from those described in the forward-looking
statements. When considering forward-looking statements in this report, you
should keep in mind the cautionary statements in the Risk Factors section
above and Managements Discussion and Analysis or Plan of Operation
section below, and other sections of this report.



The statements contained
in this Registration Statement that are not purely historical are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including,
without limitation, statements regarding our expectations, objectives,
anticipations, plans, hopes, beliefs, intentions or strategies regarding the
future.



All forward-looking
statements included in this document are based on information available to us on
the date hereof, and we assume no obligation to update any such forward-looking
statements. It is important to note that our actual results could differ
materially from those included in such forward-looking statements. For a more
detailed explanation of such risks, please see Risk Factors below. Such risks,
as well as such other risks and uncertainties as are detailed in our SEC reports
and filings for a discussion of the factors that could cause actual results to
differ materially from the forward-looking statements.



The following discussion
should be read in conjunction with the audited consolidated financial statements
and the notes included in this report on Form 10-K and the section entitled
Managements Discussion and Analysis of Financial Condition and Plan of
Operation included in this report on Form 10-K.



ITEM 1.  BUSINESS



History and Background



AngioGenex is a
development stage biopharmaceutical company focused on creating products that
are uniquely useful for the treatment, diagnosis and prognosis of cancer. Our
development programs focus on (1) the discovery and development of orally active
anti-cancer drugs that act by modulating the action of the Id (inhibitor of
differentiation) proteins, (2) the measurement of Id proteins in tumors and
blood to create products for the diagnosis and prognosis of cancer and (3)
generating proof-of-concept data in relevant preclinical models to establish
that modulation of Id genes and proteins is useful to treat non-oncologic
diseases in which a surplus or deficit in the growth of blood vessels is an
important part of the underlying pathology. Our proprietary technology is based
on the research work of Dr. Robert Benezra and his colleagues at Memorial Sloan
Kettering Cancer Center (MSKCC), who discovered the Id, or inhibitor of
differentiation genes and corresponding Id proteins and established their role
in the formation of new blood vessels (angiogenesis) required for tumor growth
and metastasis. Our intellectual property includes the rights to biotechnology
in the Id field, which we acquired under exclusive worldwide licenses from



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MSKCC, and our
own patented and proprietary technology and molecules that we have generated
while developing our Id based anti-angiogenesis anti-cancer and other
strategies.



AngioGenex, Inc. was
incorporated in the State of Nevada on April 2, 1999.



On April 3, 2000, in
exchange for $30,000 we obtained from MSKCC an exclusive worldwide license two
patent applications relating to a method for modulating tumor growth and
metastasis of tumor cells based on the Id technology and Id knockout mice useful
for testing and developing useful products for the treatment, diagnosis and
prognosis of cancer. The license agreement provides that an additional $200,000
shall be paid to MSKCC upon the submission to any regulatory authority of the
first new drug application for any licensed product and $500,000 to be paid upon
the first regulatory authority approval. In addition, the agreement also
provides for royalty payments to MSKCC ranging from 2.5% - 4% of net sales and
15% of gross revenues from sub-license fees.



We licensed our
intellectual property relating to Id related diagnostic, bio-analytical or
prognostic products to BioCheck Inc. pursuant to a Development and Marketing
Agreement entered into on December 15, 2003. AngioGenex has licensed the rights
to develop Id based prognostics and diagnostics to BioCheck in exchange for
milestones, royalties and the right to use internally, any developed technology
(such as new assays or monoclonal antibodies). BioCheck, a subsidiary of OXIS
International, Inc., is a leading producer of clinical diagnostic assays,
including high quality enzyme immunoassay research services and immunoassay kits
for cardiac and tumor markers, infectious diseases, thyroid function, steroids,
and fertility hormones designed to improve the accuracy, efficiency, and
cost-effectiveness of in vitro(outside the body) diagnostic testing in
clinical laboratories. BioCheck focuses primarily on the immunoassay segment of
the clinical diagnostics market. BioCheck offers over 40 clinical diagnostic
assays manufactured in its 15,000 square foot, U.S. Food and Drug
Administration, or FDA, certified Good Manufacturing Practices
device-manufacturing facility in Foster City, California.



AngioGenex is a
development stage company and has incurred significant losses since inception.
We had an accumulated deficit of approximately $4,510,246 as of December 31,
2008. These losses have resulted principally from costs incurred in connection
with research and development activities, license fees, patent expenses and
general and administrative expenses.



RESEARCH AND DEVELOPMENT PROGRAMS



Anti-Cancer Therapeutics



Our main focus is the
discovery and development of one or more anti-cancer drug product candidates
that act by preventing the formation of blood vessels (angiogenesis) into tumors
that act by modulating the action of the Id (inhibitor of differentiation)
proteins.



Scientific Background



Cancer is a genetic
disease resulting in deregulated cell growth. Tumor suppressor genes and
oncogenes inhibit or stimulate cell growth or proliferation and are normally in
balance. Mutations in either or both of these gene classes can lead to cancer.
Over the past 20 years, much research has focused on inhibiting the growth of
tumor cells by either altering the activity of oncogenes or tumor suppressors so
that normal cell growth properties are restored. This approach has met with
limited success for several reasons. Tumor cells can acquire mutations rapidly
and drugs designed to kill the tumor cell or alter protein activity are often
countered with further mutations leading to drug resistance. In addition, many
of the oncogenes and tumor suppressors have normal healthy counterparts that are
required for normal cell functions so that inhibiting their activity often
causes serious side effects and toxicities. Finally, the mechanisms of action of
some oncogene and tumor suppressors are poorly understood limiting the
development of more specific drug therapies. For these reasons, alternate
approaches to the management and cure for cancer have been actively pursued.



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The
Anti-Angiogenic Approach.



One anti-cancer approach
that has received much attention in recent years involves targeting the blood
supply of the tumor. If tumors are prevented from recruiting new blood vessels
for nutrients (through a process called angiogenesis) they cannot grow beyond a
very small size and cannot spread (metastasize) to other parts of the body,
rendering them essentially harmless to the patient. This approach is attractive
because unlike tumor cells, the cells that form blood vessels do not acquire
mutations at any appreciable rate and, therefore, it is unlikely that they would
acquire drug resistance. In addition, certain research indicates that the growth
of blood vessels around tumors is a different process than normal angiogenesis
in adults suggesting it is possible to develop non-toxic drug regimens for
treating cancer. Normal angiogenesis occurs in adults primarily in wound healing
and certain reproductive functions. Finally, the molecular steps that result in
angiogenesis are becoming better understood, thereby providing new targets for
anti-angiogenic drug design. Among these, the Id genes and Id proteins have been
demonstrated to play a key role in tumor angiogenesis.



The Id genes act early
in fetal development to promote the growth of cells and blood vessels but are
turned off prior to birth and are usually inactive in adult life. The Id gene is
reactivated in many tumor cells in the early stages of the disease and,
importantly, it is also expressed in the blood vessels that infiltrate tumors.
Through genetic manipulations in mice it has been shown that partial loss of Id
gene function leads to an inhibition of the growth and metastasis of tumors.
This inhibition can be attributed to the failure of the animals to develop an
intact vasculature (network of blood vessels) within the tumor mass resulting in
significant cancer cell death. Importantly, animals with reduced Id levels show
no other obvious physiological abnormalities. Thus, the Id genes and proteins
become attractive drug targets for the following reasons:

| |   |                                                                                                                                                                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The Id proteins have been shown to be
a key component for tumor angiogenesis.                                                                                                                                                                                                
| |   |                                                                                                                                                                                                                                                                              
| |  | The Id proteins are fetal specific and are only
re-expressed during tumor vascularization but not in normal adult
vasculature (with the exception of wound healing and reproductive
functions) making it possible to design drugs that are not expected to
cause side-effects
| |   |                                                                                                                                                                                                                                                                              
| |  | Only partial reduction in Id activity causes a
significant inhibition of tumor angiogenesis.                                                                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                              
| |  | The mechanism of Id action is well understood-thus
allowing high-throughput screening and rational design of drug candidates.                                                                                                                                                
| |   |                                                                                                                                                                                                                                                                              
| |  | Inactivation of Id before or after tumor formation
is effective in preventing or limiting tumor growth in animal models that
we believe is reasonably predictive of human activity.                                                                                          
| |   |                                                                                                                                                                                                                                                                              
| |  | Compounds of a known chemical class have been
identified that bind and inhibit the Id protein in a biochemical and a
cell culture screen.                                                                                                                                    



We are pursuing
strategies to inactivate either the Id genes or Id proteins to inhibit the
growth and metastasis of tumors. We are funding ongoing research concerning
their activity for the design of more potent and efficient Id protein
inhibitors.



Id-Based Oncology Therapeutics.



The discovery and
development of one or more anticancer drugs that act by preventing the formation
of blood vessels (angiogenesis) into tumors by either by blocking the action of
the Id genes or Id proteins is the primary corporate goal of AngioGenex. The
validation of the usefulness of inhibiting blood vessel formation in cancer has
been shown in man using drugs such as Avastin{trademark} whose target is
vascular endothelial growth factor. While these drugs appear to be only modestly
effective, they



- 6 -



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demonstrate the
potential value of treating cancer by this approach and suggest that a more
potent and selective agent would be an even more important addition to cancer
therapy.



There is considerable
evidence to demonstrate the effects of several Id proteins (Id1, Id2, and Id3)
on different aspects of cellular growth. The participation of Id proteins in
advanced human malignancy has been supported by the discovery that they exert
pivotal contributions to essential cellular alterations that collectively cause
malignant growth. The Id proteins support the formation of blood vessels into
tumors that results in growth and metastasis. These proteins comprise a
particularly compelling target for drug discovery because they are either absent
or present in very low concentration in normal adult tissues. They are normally
required only for wound healing and certain reproductive functions in adults. As
a result, inhibition of Id proteins would be limited to the tumor and would not
be expected to affect normal cellular functions and cause toxicity like other
anti-angiogenic drugs that are less selective. Dr. Robert Benezra of Memorial
Sloan Kettering has shown that mice that are deficient in one or more copies of
the Id proteins (Id1 and/or Id3) are unable to support the growth and metastasis
of tumors caused by the injection of several different types of cancer cells.
Negative effects of Id deletion on preformed tumors have also been demonstrated.
The evidence for the lack of growth of tumors with Id deficiency has been
extended by using genetically modified mice that harbor either activated
oncogenes or mutated tumor suppressor genes that are commonly found in human
cancers including breast and prostate. The inhibition of tumor growth in these
animals is especially important since they are the most challenging models
available and, as a result, are not often used by others to identify anti-cancer
drugs. These are compelling models that mimic the human course of the disease
because these animals are immune competent and the tumors develop spontaneously
rather than grow from tumor cells that are injected into the mouse.



We conducted research to
identify other inhibitors with superior characteristics for development as
anti-cancer drugs using a rational computational drug design approach , at a
number of contract research organizations and collaborating laboratories.
Cengent Therapeutics, Inc commenced a collaborative effort in June 2004. Part of
this effort involved the screening, using an assay developed by AngioGenex, of
both large and small libraries of small organic and naturally occurring
molecules for their ability to inhibit the Id proteins. Rational drug design was
employed using the most advanced research technology. For example, the crystal
structure of Id1 has been identified and computational analysis was used to
determine the site of binding of a known anti-Id drug with modest inhibitory
activity. The initial findings have led to the selection of approximately 350
small molecules and 12 peptides that were acquired for further winnowing through
additional screening with the objective of selecting one or more compounds for
more advanced testing. Two compounds with the desired anti-Id property were
identified and tested in established animal tumor models for their ability to
block blood vessel formation and to inhibit tumor growth, designated AGX8 and
AGX51. Based on these findings, screening results and other information that has
been accrued, we identified a number of more potent anti-Id molecules, including
AGX8 and AGX51, which were the subject of a recently filed patent application.
 We conducted further pre-clinical research with these molecules at the
Southern Research Institute, a contracting research organization the results of
which demonstrated both the retardation of tumor formation and the prevention of
metastasis.  We presented those results at a number of important scientific
conferences.



We are also pursuing the
potential in-licensing from Memorial Sloan Kettering Cancer Center of a patent
application filed in January 2008 covering a targeted peptide conjugated
anti-sense oligonucleotide compound that prevents angiogenesis by inhibiting Id
gene expression and blocks both tumor formation and metastasis in mice. Although
our licensed patent position with regard to our previous license from MSKCC
creates unique synergies, we cannot give assurance that we will be successful in
licensing this new patent application from MSKCC.



Our lead compounds AGX8
and AGX51 will be subjected to further testing in animals to obtain preliminary
knowledge of their properties including safety and then they will be subjected
to the more stringent tests required to complete the FDA requirements for an IND
(Investigational New Drug Application). Clinical studies will then be conducted
first in normal volunteers and then in cancer patients to obtain preliminary
results regarding the safety and efficacy of the drugs (Phase I & II). If
the results of both the animal and clinical studies indicate that the drugs has
potential as an anti-cancer agent, we will



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attempt to
identify a partner willing to assume financial responsibility while sharing
clinical development responsibility for completing the requirements for an NDA
(New Drug Application) and marketing.



While progress in the
identification of an anti-Id molecule is proceeding with some success, we are
acutely aware of the difficulties that are usually encountered in finding a drug
that is effective in treating cancer. The major obstacle is the heterogeneity of
tumors. That is, while cancer is thought to begin with the mutation of a single
cell, the tumors that are formed are made up of numerous cellular cousins. As a
result, drug treatment does not usually eliminate all the tumor cells
(resistance) and the recurrence and metastasis of a tumor can be fatal. A major
advantage of our technology is that it is expected to circumvent this problem;
anti-Id therapy is not aimed at the heterogeneous tumor cells but at the source
of the formation of blood vessels. The latter are necessary if a tumor is to
survive beyond the size of a pencil eraser. Elimination of the action of the Id
proteins has been shown to block tumor formation in genetically modified animals
that carry the human form of tumors with an effectiveness that is unequaled in
the scientific literature. We expect to out-license the rights to our lead
product candidates at some point prior to initiation of Phase III clinical
trials to a licensor capable of funding and efficiently executing such clinical
trials, and undertaking the manufacturing and marketing of the licensed drug
compound.



Id-Related Ocular Therapeutics.



There are other
important diseases besides cancer in which the abnormal growth of blood vessels
contributes to the underlying pathology. These include ARMD (age related macular
degeneration) and diabetic retinopathy where growth of blood vessels has been
implicated in the loss of vision and blindness. These are major diseases for
which existing treatments are unsatisfactory. Medical experts in these diseases
believe, and there is some experimental evidence to suggest, that blocking the
growth of blood vessels would be therapeutic. All research in the ocular was
conducted for us at the University of Florida in 2004 and supervised by Glenn
Stoller MD, the principal investigator and a practicing ophthalmologist and
Patricia D'Amore, PhD (Schepens Eye Institute, Harvard), an expert in
angiogenesis in the eye. Promising results were obtained in two animal models
used routinely to identify drugs useful to treat these diseases. The first model
involves subjecting very young mice to high oxygen concentrations (hyperoxia), a
procedure that causes growth of blood vessels in the eye. This model is used
routinely to screen for agents to treat ARMD. The absence of Id genes and
proteins prevented the growth of blood vessels into the eye in this animal
model. A second mouse model of ARMD that employs argon laser injury was also
used to investigate the role of the Id genes and proteins in ocular
angiogenesis. The argon laser model is the most predictive of a beneficial
action of a drug or procedure for the treatment of ARMD. As in the hyperoxia
model, Id deletion resulted in a failure of growth of new blood vessels into the
eye.



Additional research is
planned subject to available capital resources to confirm and extend these
findings and anti-Id molecules will be used in an attempt to reproduce these
results. An anti-sense molecule that is known to block blood vessel formation in
one in vivo model would be tested in the eye models and, if active, additional
investigations would be initiated to identify a chemically related compound with
more desirable properties that could be considered for development as a
therapeutic for ARMD.

After selection of a molecule suitable for
development as a drug, we plan to seek a partner in the ocular area who will
assume responsibility for completing the work to market.



We have spent
approximately $146,000 on research and development within the last two fiscal
years (2007 and 2008)



OUT-LICENSED TECHNOLOGY



BioCheck, Inc.: Id-based Products for
Diagnosis/Prognosis of Cancer.



We licensed our
intellectual property relating to Id related diagnostic, bio-analytical or
prognostic products to BioCheck Inc. pursuant to a Development and Marketing
Agreement entered into on December 15, 2003. AngioGenex licensed the rights to
develop Id based prognostics and diagnostics to BioCheck in exchange for
milestones, royalties and the right to use internally any developed technology
(such as new



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assays or
monoclonal antibodies). BioCheck, a subsidiary of OXIS International, Inc., is a
leading producer of clinical diagnostic assays including high quality enzyme
immunoassay research services and immunoassay kits for cardiac and tumor
markers, infectious diseases, thyroid function, steroids, and fertility hormones
designed to improve the accuracy, efficiency, and cost-effectiveness of in
vitro(outside the body) diagnostic testing in clinical laboratories.
BioCheck has a proven record in the field having created a number of
successfully marketed diagnostic kits including EPT  (Early Pregnancy Test).
BioCheck focuses primarily on the immunoassay segment of the clinical
diagnostics market. BioCheck offers over 40 clinical diagnostic assays
manufactured in its 15,000 square foot, U.S. Food and Drug Administration, or
FDA, certified Good Manufacturing Practices device-manufacturing facility in
Foster City, California.



License Agreement with BioCheck



We licensed our
intellectual property relating to Id related diagnostic, bio-analytical or
prognostic products to BioCheck Inc. pursuant to a Development and Marketing
Agreement entered into on December 15, 2003. AngioGenex has licensed the rights
to develop Id based prognostics and diagnostics to BioCheck in exchange for
milestones, royalties and the right to use internally, any developed technology
(such as new assays or monoclonal antibodies). BioCheck,  is a leading
producer of clinical diagnostic assays. BioCheck, in collaboration with
AngioGenex. has been investigating the Id technology for its potential for the
diagnosis and prognosis of various types of cancers. .



BioCheck and AngioGenex
have developed monoclonal antibodies for both human and mouse Id1, Id2 and Id3.
Currently, BioCheck is developing monoclonal antibodies for all four Id proteins
(Id1, Id2, Id3 and Id4) for use in standard ELISA type tests and for kits for
detection of the proteins in tumors and other tissues. These monoclonal
antibodies are critical to the development of diagnostics and other research in
the Id area. These antibodies will also be used to identify those tumors in
which Id proteins are expressed that may be amenable to anti-Id therapy.
 The monoclonal antibodies to the Id1 and Id3
proteins are the subject of a patent application jointly owned by AngioGenex and
BioCheck. Their availability is expected to provide AngioGenex multiple
opportunities to answer key questions regarding the action of the Id proteins
that could not be addressed heretofore with certainty since only polyclonal
antibodies are commercially obtainable. Their availability is expected to have a
positive impact on progress of our product development programs.



The development of a
serum test for breast cancer using a standard ELISA format is the second
diagnostic product that is under development by BioCheck. The ability to detect
the presence of breast cancer at a very early stage would allow early
intervention and a much better opportunity to treat this disease successfully.
The test would also provide early detection of reemergence of the disease
following therapy and signal the need to re-institute therapy. Pilot
measurements of serum Id proteins from patients with breast cancer suggest the
possibility of developing a highly sensitive test that will allow early
detection and the ability to monitor the progress of the disease during and
after therapy. A small number of serum samples comparing age matched normal
individuals and breast cancer patients were assayed blindly using the ELISA
assay developed at BioCheck. This diagnostic test correctly identified the
breast cancer patients and gave no false positives or false negatives.
Additional clinical testing will be conducted to confirm these findings.



Recent reports in the
scientific literature suggest that Id measurements could also be useful in the
prognosis of melanoma and cervical cancer. As testing for Id proteins progresses
in breast cancer patients, it is likely that other tumors will eventually be
made part of BioChecks efforts in the diagnostic prognostic area. The
development of highly sensitive diagnostic and prognostic tests of the ELISA
type is aided by the use of monoclonal antibodies to the Id proteins.



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COMPETITION



We believe that there is
no other company developing an Id-based therapeutic, diagnostic or prognostic
product. However, there are a large number of competitors developing cancer
therapeutics based on an anti-angiogenic approach. There are also, a significant
number of companies developing therapeutics and diagnostics based on other
technologies. The table below presents our competitors' principal
anti-angiogenic drug and biologic candidates currently in clinical trials. The
table is representative and not all-inclusive, and reflects information publicly
available in 2008.



PRINCIPAL ANTI-ANGIOGENIC DRUGS IN CLINICAL
TRIALS FOR CANCER



|                        |  |                              |  |                                         |  |                                                                                                                                                                                                                                                                                                   
|----------------------- |  | ---------------------------- |  | --------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Drug                    |  | Company                      |  | Action(s)                               |  | Clinical status                                                                                                                                                                                                                                                                                   
|Avastin                 |  | Genentech, Inc.              |  | Monoclonal                              |  | Market approval first-line or previously untreated
metastatic cancer of the antibody to VEGF colon or rectum received Q1/04
Phase III for adjuvant colorectal cancer, renal cell carcinoma, prostate
cancer, and metastatic and locally advanced pancreatic cancer                                
|                        |  |                              |  |                                         |  |                                                                                                                                                                                                                                                                                                   
|Neovastat AE-941        |  | NCI, Aeterna,
Zentaris Inc., |  | Multiple                                |  | Phase III for NSCLC mechanisms, eg inhibits MMPs,
blocks binding of
VEGF to its receptor, promotes apoptosis of
endothelial cells and increases levels of angiostatin, a naturally
occurring anti- angiogenic agent.                                                                              
|                        |  |                              |  |                                         |  |                                                                                                                                                                                                                                                                                                   
|Thalidomide             |  | Celgene                      |  | Immunomodulation                        |  | NDA submitted for multiple myeloma, Phase III for
renal cell cancer, Phase II for prostate                                                                                                                                                                                                        
|                        |  |                              |  |                                         |  |                                                                                                                                                                                                                                                                                                   
|Revlimid/Actimed        |  | Celgene                      |  | Immunomodulatory                        |  | Phase II/III for prostate thalidomide and multiple
myeloma, analogs Phase III for metastaic melanoma, Phase II for solid
tumors and MDS                                                                                                                                                           
|                        |  |                              |  |                                         |  |                                                                                                                                                                                                                                                                                                   
|Combrestatin-A4         |  | OXiGene                      |  | Directly inhibits                       |  | Phase I/II for advanced endothelial cells
colorectal cancer, Phase II for breast, Phase I for cervical, Phase I/II
for head/neck cancer, Phase II for lung cancer, Phase II for ovarian
cancer, Phase I/II prostate cancer, Phase II for advanced regional or
metastatic anaplastic thryoid cancer
|                        |  |                              |  |                                         |  |                                                                                                                                                                                                                                                                                                   
|PTK787
ZK222584         |  | Schering AG                  |  | Inhibits VEGF receptor tyrosine
kinases |  | Phase III for colorectal                                                                                                                                                                                                                                                                          
|                        |  |                              |  |                                         |  |                                                                                                                                                                                                                                                                                                   
|BMS-275291              |  | Bristol Meyers Squibb Co.    |  | MMP inhibitor                           |  | Phase III combination with Paclitaxel and
Carboplatin for for NSCL                                                                                                                                                                                                                                
|                        |  |                              |  |                                         |  |                                                                                                                                                                                                                                                                                                   
|Cilengitide
(EMD121974) |  | Merck KGaA                   |  | Integrin inhibitor                      |  | Phase I for solid tumors or lymphoma                                                                                                                                                                                                                                                              



- 10 -



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|                  |  |                                       |  |                                |  |                                                                                          
|----------------- |  | ------------------------------------- |  | ------------------------------ |  | -----------------------------------------------------------------------------------------
|                  |  |                                       |  |                                |  |                                                                                          
|Panzem            |  | EntreMed, Inc.                        |  | Steroid (2- Methoxy estradiol) |  | Phase II for various solid tumors                                                        
|                  |  |                                       |  |                                |  |                                                                                          
|LY317615          |  | Eli Lilly & Co.                       |  | Protein kinase C Inhibitor     |  | Phase II for gliomas & lymphomas                                                         
|                  |  |                                       |  |                                |  |                                                                                          
|IL-12 + IL-2      |  | NCI, Chiron, Wyeth                    |  | Multiple mechanisms            |  | Phase I for lymphoma, Phase I for neuroblastoma                                          
|                  |  |                                       |  |                                |  |                                                                                          
|IL-12             |  | Wyeth, NCI                            |  | Multiple Mechanisms            |  | Phase II for lymphoma, Phase II for ovarian, Phase
I for kidney, Phase I for solid tumors
|                  |  |                                       |  |                                |  |                                                                                          
|Fragmin           |  | Pfizer, Inc.                          |  | Blocks matrix                  |  | Phase II/III for pancreatic breakdown                                                    
|                  |  |                                       |  |                                |  |                                                                                          
|Suramin           |  | Pfizer, Inc.                          |  | Blocks matrix                  |  | Kidney Phase I/II, breast cancer Phase I/II
Phase   I for bladder breakdown              
|                  |  |                                       |  |                                |  |                                                                                          
|VEGF-Trap AVE0005 |  | Sanofi-Aventis                        |  | Blocks VEGF                    |  | Phase I for solid tumors,                                                                
|                  |  |                                       |  |                                |  |                                                                                          
|                  |  | Regeneron Pharmaceuticals Inc.        |  |                                |  | Phase I for non-Hodgkin's lymphoma                                                       
|                  |  |                                       |  |                                |  |                                                                                          
|Vitaxin           |  | Medimmune, Inc. inhibits key
integrin |  | Antibody that                  |  | Phase II for melanoma and prostate cancer                                                
|                  |  |                                       |  |                                |  |                                                                                          
|ZD6474            |  | AstraZeneca Plc                       |  | Blocks VEGF and EGF receptors  |  | Phase III for myeloma, SCLC and NSCLC, Phase II
for solid tumors                         
|                  |  |                                       |  |                                |  |                                                                                          
|PI-88             |  | Progen Industries Ltd.                |  | Mechanism not established      |  | Phase II for myeloma, liver and lung cancer                                              
|                  |  |                                       |  |                                |  |                                                                                          
|IMC-1121b         |  | Imclone                               |  | Inhibition of VEGFR-2          |  | Phase I for solid tumors                                                                 
|                  |  |                                       |  |                                |  |                                                                                          
|CDP791            |  | Imclone                               |  | Inhibition of VEGFR-2          |  | Phase II for solid tumors                                                                



Most of the drugs in the above table
are directed at biochemicals that are growth factors such as VEGF, fibroblast
growth factor, and others, or important remodeling chemicals such as integrins,
matrix metallo-proteinase inhibitors, and others.



Various efforts are being made to
deliver the growth factors noted above using gene therapy approaches.



- 11 -



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GOVERNMENT REGULATION



The Food and Drug Administration or
FDA and comparable regulatory agencies in foreign countries, as well as drug
regulators in state and local jurisdictions, impose substantial requirements
upon the clinical development, manufacture and marketing of pharmaceutical
products. These agencies and other federal, state and local entities regulate
research and development activities and the human testing, manufacture, quality
control, safety, effectiveness, labeling, storage, record keeping, approval,
advertising, and promotion of AngioGenex lead product and any other products we
may develop, acquire, or in-license).



The process required by the FDA under
the drug provisions of the United States Food, Drug, and Cosmetic Act before
AngioGenex initial products may be marketed in the U.S. generally involves the
following:



| |   |                                                                                                                                       
| | - | --------------------------------------------------------------------------------------------------------------------------------------
| | · | Preclinical laboratory and animal tests;                                                                                              
| | · | Submission of an Investigational New Drug
application or IND, which must become effective before human clinical
trials may begin;   
| | · | Adequate and well-controlled human clinical trials
to establish the safety and efficacy of the product candidate for its
intended use;
| | · | Submission to the FDA of an New Drug Application or
NDA; and                                                                        
| | · | FDA review and approval of an NDA.                                                                                                    



The testing and approval
process requires substantial time, effort, and financial resources, and we
cannot be certain that any approval will be granted on a timely basis, if at
all. Preclinical tests include laboratory evaluation of the product candidate,
its chemistry, formulation and stability, as well as animal studies to assess
the potential safety and efficacy of the product candidate. Certain preclinical
tests must be conducted in compliance with good laboratory practice regulations.
Violations of these regulations can, in some cases, lead to invalidation of the
studies, requiring such studies to be replicated. In some cases, long-term
preclinical studies are conducted while clinical studies are ongoing.



The company submits the
results of the preclinical tests, together with manufacturing information and
analytical data, to the FDA as part of an IND, which must become effective
before we may begin human clinical trials.



The IND automatically
becomes effective 30 days after receipt by the FDA, unless the FDA, within the
30-day time period, raises concerns or questions about the conduct of the trials
as outlined in the IND and imposes a clinical hold. In such a case, the IND
sponsor and the FDA must resolve any outstanding concerns before clinical trials
can begin. The submission of an IND may not result in FDA authorization to
commence clinical trials. All clinical trials must be conducted under the
supervision of a qualified investigator in accordance with good clinical
practice regulations. These regulations include the requirement that all
subjects provide informed consent.



Further, an independent
Institutional Review Board ("IRB") at each medical center proposing to conduct
the clinical trials must review and approve any clinical study. The IRB also
continues to monitor the study and must be kept aware of the study's progress,
particularly as to adverse events and changes in the research. Progress reports
detailing the results of the clinical trials must be submitted at least annually
to the FDA and more frequently if adverse events occur.



- 12 -



---

Human clinical
trials are typically conducted in three sequential phases that may overlap:



·
 Phase I: The drug is initially
introduced into healthy human subjects or patients and tested for safety, dosage
tolerance, absorption, metabolism, distribution, and excretion.



·Phase II: The
drug is studied in a limited patient population to identify possible adverse
effects and safety risks, to determine the efficacy of the product for specific
targeted diseases and to determine dosage tolerance and optimal dosage.



·Phase III: When
Phase II evaluations demonstrate that a dosage range of the drug is effective
and has an acceptable safety profile, Phase III trials are undertaken to further
evaluate dosage and clinical efficacy and to further test for safety in an
expanded patient population, often at geographically dispersed clinical study
sites.



The FDA or the
Institutional Review Board or the IND sponsor may suspend clinical trials at any
time on various grounds, including a finding that the subjects or patients are
being exposed to an unacceptable health risk.



Concurrent with clinical
trials and pre-clinical studies, the company must also develop information about
the chemistry and physical characteristics of the drug and finalize a process
for manufacturing the product in accordance with good manufacturing practice
("GMP") requirements. The manufacturing process must be capable of consistently
producing quality batches of the product, and management must develop methods
for testing the quality, purity, and potency of the final products.
Additionally, appropriate packaging must be selected and tested and chemistry
stability studies must be conducted to demonstrate that the product does not
undergo unacceptable deterioration over its shelf-life.



The results of product
development, pre-clinical studies, and clinical studies are submitted to the FDA
as part of an NDA for approval of the marketing and commercial shipment of the
product. The FDA reviews each NDA submitted and may request additional
information, rather than accepting the NDA for filing. In this event, the
application must be resubmitted with the additional information. The resubmitted
application is also subject to review before the FDA accepts it for filing. Once
the FDA accepts the NDA for filing, the agency begins an in-depth review of the
NDA. The FDA has substantial discretion in the approval process and may disagree
with AngioGenex' interpretation of the data submitted in the NDA.



The review process may
be significantly extended by FDA requests for additional information or
clarification regarding information already provided. Also, as part of this
review, the FDA may refer the application to an appropriate advisory committee,
typically a panel of clinicians, for review, evaluation and a recommendation.
The FDA is not bound by the recommendation of an advisory committee.
Manufacturing establishments often also are subject to inspections prior to NDA
approval to assure compliance with GMPs and with manufacturing commitments made
in the relevant marketing application.



Submission of an NDA
with clinical data requires payment of a fee. For fiscal year 2005, that fee was
$672,000. In return, the FDA assigns a goal often months for standard NDA
reviews from acceptance of the application to the time the agency issues its
"complete response," in which the FDA may approve the NDA, deny the NDA if the
applicable regulatory criteria are not satisfied, or require additional clinical
data. Even if these data are submitted, the FDA may ultimately decide that the
NDA does not satisfy the criteria for approval. If the FDA approves the NDA, the
product becomes available for physicians to prescribe. Even if the FDA approves
the NDA, the agency may decide later to withdraw product approval if compliance
with regulatory standards is not maintained or if safety problems occur after
the product reaches the market. The FDA may also require post-marketing studies,
also known as Phase IV studies, as a condition of approval to develop additional
information regarding the safety of a product. In addition, the FDA requires
surveillance programs to monitor approved products that have been
commercialized, and the agency has the power to require changes in labeling or
to prevent further marketing of a product based on the results of these
post-marketing programs.  The FDA regulates drug
labeling and promotion activities.



- 13 -



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The FDA has
actively enforced regulations prohibiting the marketing of products for
unapproved uses. Under the FDA Modernization Act of 1997, the FDA will permit
the promotion of a drug for an unapproved use in certain circumstances, but
subject to very stringent requirements.



Whether or not FDA
approval has been obtained, approval of a pharmaceutical product by comparable
governmental regulatory authorities in foreign countries must be obtained prior
to the commencement of clinical trials and subsequent sales and marketing
efforts in those countries. The approval procedure varies in complexity from
country to country, and the time required may be longer or shorter than that
required for FDA approval. We may incur significant costs to comply with these
laws and regulations now or in the future.



Marketing and Sales



We do not intend to
manufacture the products we may develop. We intend to license to, or enter into
strategic alliances with companies like BioCheck, Inc. and larger companies in
the pharmaceutical business which are equipped to manufacture and/or market our
products, if any, through their well developed distribution networks. We intend
to license some or all of our worldwide patent rights to more than one company
to achieve the fullest development, marketing and distribution of our products,
if any.



Patents, Trademarks, and Copyrights



We are substantially
dependent on our ability to obtain and maintain patents and proprietary rights
for our product candidates, particularly those relating to our proprietary
anti-Id compounds, and to avoid infringing the proprietary rights of others. We
have interests in three patents issued by the United States Patent and Trademark
Office. We obtained exclusive worldwide licenses to two patent applications, we
jointly own the rights to two patent applications with our licensee, BioCheck,
and we have filed a patent application which we own exclusively. We licensed our
intellectual property, including certain rights to two of the five patent
applications below, relating to Id related diagnostic, bio-analytical or
prognostic products to BioCheck. Additional patent applications may be
forthcoming from our ongoing research and development.



AngioGenex Patent Application



U. S. Patent Application
No. 60/980,296 filed October 16, 2007 entitled Chemical Inhibitors of
Inhibitors of Differentiation. Inventors: Jaideep Chaudhary and Bill Garland.



Licensed Patent Applications



U.S. Patent Application
No. 01/07379 filed September 13, 2001 entitled Method for Modulating Tumor
Growth And Metastasis of Tumor Cells.



U.S. Patent Application
No. 01/07378 filed September 13, 2001 entitled Inhibitor of Differentiation
Knockout Mammals and Methods of Use Thereof.



Jointly Owned Patent Applications



U.S. Patent Application
No. 11/453,156 filed June 13, 2006 filed 6/13/2006 entitled Novel Rabbit
Monoclonal Antibody Against Id1 Protein.



U.S. Patent Application
No. 11/657,426 filed January 23, 2007 [filed January 27, 2006??] entitled
Rabbit Monoclonal Antibody Against Mouse/Human Id3 Protein.



We have not filed for
any copyright or trademark protection to date.



- 14 -



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Employees



AngioGenex, Inc. has no
current employees. Employee-like services are provided by William Garland, Chief
Executive Officer and Chief Operating Officer, Richard Salvador, President, and
by Michael Strage, Vice President of Business Development.. Both of these
individuals devote over 30 hours a week to AngioGenex, Inc.  Martin Murray,
CFO is not paid for his CFO services rendered to AngioGenex, but his firm Murray
and Josephson, CPAs LLC , is paid for doing the accounting and tax work. All
three individuals have additional responsibilities outside of AngioGenex, Inc.
It is anticipated that all three of these individuals will become full-time
employees for AngioGenex, Inc. when sufficient capital resources are
available.



ITEM 1A.  RISK FACTORS



RISKS RELATED TO OUR BUSINESS



We operate in a rapidly
changing environment that involves a number of risks, some of which are beyond
our control. The following discussion highlights some of these risks and others
are discussed elsewhere in this report.



We will need to raise additional capital
to fund our general and administrative expenses, and if we are unable to raise
such capital, we will have to curtail or cease operations.



Our product development
programs and the potential commercialization of our product candidates require
substantial working capital, including expenses for in house and third party
testing. Our future working capital needs will depend on many factors,
including:



|  |                                                                                                                                                                                 
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|· | the progress and magnitude of our
product development programs,                                                                                                                 
|· | the scope and results of product
development testing,                                                                                                                           
|· | the costs under current and future
license agreements for our product candidates, including the costs of
obtaining and maintaining patent protection for our product candidates,
|· | the costs of acquiring any
technologies or additional product candidates,                                                                                                       
|· | the rate of technological advances,                                                                                                                                             
|· | the commercial potential of our
product candidates,                                                                                                                             
|· | the magnitude of our administrative
and legal expenses, including office and research development facilities
rent, and                                                          
|· | the amount of revenues we may
generate from our license agreement with BioCheck, Inc..                                                                                          



We have incurred
negative cash flow from operations since we incorporated and we may not generate
positive cash flow from our operations within the next several years. Therefore,
we will need additional future financings in order to carry out our plan of
operations beyond the next six months.



We may not be able to
obtain adequate financing to fund our operations and any additional financing we
obtain may be on terms that are not favorable to us. In addition, any future
financings could substantially dilute our stockholders. If adequate funds are
not available we will be required to delay, reduce or eliminate one or more of
our product development programs, to enter into new collaborative arrangements
on terms that are not favorable to us (i.e., the collaborative arrangements
could result in the transfer to third parties of rights that we consider
valuable), or to cease operations altogether.



We have no products currently available
for sale and we may never be successful in developing products suitable for
commercialization.



Some of our product
candidates are at an early stage of development and all of our product
candidates will require expensive and lengthy testing and regulatory clearances.
None of our product



- 15 -



---

candidates have
been approved by regulatory authorities. We have no products available for sale.
There can be no assurance that our research will lead to the discovery of any
commercially viable battery chargers or power generation devices. There are many
reasons that we may fail in our efforts to develop commercially viable product
candidates, including that:



We have a limited operating history. We
have a large accumulated deficit and may never become profitable.



AngioGenex is a
development stage company that has generated no revenues and a loss of
$4,510,246 from March 31, 1999 (inception) to December 31, 2008. Management
expects to incur significant operating losses for the foreseeable future.
AngioGenex may not be able to validate and market products in the future that
will generate significant revenues. In addition, any revenues that AngioGenex
may generate may be insufficient for AngioGenex to become profitable. In
particular, there are no assurances that AngioGenex can:



|  |                                                                                                                                                                        
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|· | raise sufficient capital in the
public and/or private markets;                                                                                                         
|· | obtain the regulatory approvals
necessary to commence selling its therapeutic drugs or diagnostic products
in the U.S., Europe or elsewhere;                           
|· | develop and manufacture drugs in a
manner that enables AngioGenex to be profitable and meets regulatory,
strategic partner and customer requirements;                  
|· | develop and maintain relationships
with key vendors and strategic partners that will be necessary to optimize
the market value of the drugs AngioGenex plans to develop
|· | respond effectively to competitive
pressures; or                                                                                                                       
|· | recruit and build a management team
to accomplish AngioGenex' business plan.                                                                                           



If AngioGenex is unable
to accomplish these goals, its business is unlikely to succeed.



AngioGenex has a limited product and
technology portfolio at the current time.



AngioGenex does not have
any products in clinical trials. Although its products might ultimately show
effectiveness against multiple disease states, AngioGenex has validated its
technology only in animal models.



There can be no
assurance that any of AngioGenex' other product ideas will be successfully
developed, prove to be safe and efficacious in clinical trials, meet applicable
regulatory standards, be capable of being produced in commercial quantities at
acceptable costs or be successfully marketed.



There can be no
assurance that any programs or technologies that AngioGenex might license in or
acquire in the future will be successfully developed, prove to be safe and
efficacious in clinical trials, meet applicable regulatory standards, be capable
of being produced in commercial quantities at acceptable costs or be
successfully marketed.



We must obtain governmental approval for
each of our product candidates.



The development,
production and marketing of AngioGenex' potential products are subject to
extensive regulation by government authorities in the United States and most
other developed countries. The process of obtaining approval from the Food and
Drug Administration (FDA) in the United States requires conducting extensive
pre-clinical and clinical testing.



AngioGenex has limited
experience in, and limited resources available for, regulatory activities.
Failure to comply with applicable regulations can, among other things, result in
non-approval, suspensions of regulatory approvals, fines, product seizures and
recalls, operating restrictions, injunctions and criminal prosecution.



- 16 -



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Any of the following events can occur and, if any did occur, any
one could have a material adverse effect on AngioGenex' business, financial
conditions and results of 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 or a temporary suspension or complete ban on trials of
AngioGenex' products due to adverse side effects;                                                                                                              
|· | clinical trials may not yield
sufficiently conclusive results for regulatory agencies to approve the use
of AngioGenex' lead product, other products in development, or any other
products AngioGenex may acquire or in-license;                               
|· | there can be delays, sometimes long
delays, in obtaining approval for its product candidates;                                                                                                                                                                  
|· | the rules and regulations governing
product candidates can change during the review process, which can result
in the need to spend time and money for further testing or review;                                                                               
|· | if approval for commercialization is
granted, it is possible the authorized use will be more limited than we
believe is necessary for commercial success, or that approval may be
conditioned on completion of further clinical trials or other activities;
and
|· | once granted, approval can be
withdrawn, or limited, if previously unknown problems arise with
AngioGenex human-use product or data arising from its use.                                                                                                     



These and other factors
could delay marketing approval from the FDA or cause AngioGenex to fail to
receive any approval from the FDA or other governmental authorities. Trials are
expensive, time-consuming and difficult to design and implement.



Human clinical trials
are expensive and difficult to design and implement, in part because they are
subject to rigorous regulatory requirements. Further, the medical, regulatory
and commercial environment for pharmaceutical products changes quickly and often
in ways that we may not be able to accurately predict. The clinical trial
process is also time- consuming, and we do not know whether planned clinical
trials will begin on time or whether AngioGenex will complete any of its
clinical trials on schedule or all. Significant delays may adversely affect
AngioGenex' financial results and the commercial prospects for potential
products or any other products AngioGenex may acquire or in-license, and delay
the ability to become profitable. Product development costs and collaborators
will increase if AngioGenex has delays in testing or approvals or if AngioGenex
needs to perform more or larger clinical trials than planned. Furthermore, as
failure can occur at any stage of the trials, we could encounter problems that
cause AngioGenex to abandon or repeat clinical trials. The commencement and
completion of clinical trials may be delayed by several factors, including:



|  |                                                                                                                                                                                                                                                       
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|· | changes to applicable regulatory
requirements;                                                                                                                                                                                                        
|· | unforeseen safety issues;                                                                                                                                                                                                                             
|· | determination of dosing issues;                                                                                                                                                                                                                       
|· | lack of effectiveness in the clinical
trials;                                                                                                                                                                                                         
|· | slower than expected rates of patient
recruitment;                                                                                                                                                                                                    
|· | inability to monitor patients
adequately during or after treatment;                                                                                                                                                                                   
|· | inability or unwillingness of medical
investigators to follow AngioGenex' clinical protocols;                                                                                                                                                         
|· | inability to maintain a supply of the
investigational drug in sufficient quantities to support the trials; and                                                                                                                                        
|· | suspension or termination of clinical
trials for various reasons, including noncompliance with regulatory
requirements or changes in the clinical care protocols and standards of
care within the institutions in which AngioGenex' trials take place.



In addition, AngioGenex
or the FDA may suspend the clinical trials at any time if it appears that
AngioGenex are exposing participants to unacceptable health risks or if the FDA
finds deficiencies in any Investigational New Drug Applications ("IND") or the
conduct of these trials. A number of companies in the biotechnology and drug
development industries have suffered significant setbacks in advanced clinical
trials despite promising results in earlier trials. In the end, AngioGenex may
be unable to develop marketable products.



- 17 -



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The results of our future clinical
trials may not support the product candidate claims.



Even if AngioGenex'
clinical trials are completed as planned, their results may not support the
product-candidate claims, or the FDA or government authorities may not agree
with the conclusions regarding such results. Success in preclinical testing and
early clinical trials does not ensure that will be successful, and the results
from any later clinical trials may not replicate the results of prior clinical
trials and pre- clinical testing. The clinical trial process may fail to
demonstrate that product candidates are safe for humans and effective for
indicated uses. This failure would cause us to abandon a product candidate and
may delay development of other product candidates. Any delay in, or termination
of, AngioGenex' clinical trials will delay the filing of the NDAs with the FDA
and, ultimately, AngioGenex' ability to commercialize its product candidates and
generate product revenues.



Delays in patient
enrollment for clinical trials could increase costs and delay regulatory
approvals.



The rate of completion
of AngioGenex' clinical trials will depend on the rate of patient enrollment.
There may be substantial competition to enroll patients in clinical trials for
AngioGenex' product and any other products AngioGenex may develop or in-license.
This competition has delayed the clinical trials of other biotechnology and drug
development companies in the past. In addition, recent improvements in existing
drug therapy may make it more difficult for us to enroll patients in the
clinical trials as the patient population may choose to enroll in clinical
trials sponsored by other companies or choose alternative therapies. Delays in
patient enrollment can result in increased development costs and delays in
regulatory approvals.



AngioGenex' lead product candidate
requires several additional processes before it is ready for an initial IND
filing with the FDA; we may not successfully perform such processes, or the
results from such processes may not support the filing of an IND.



The industry is highly
competitive, so, even if AngioGenex' products ultimately get approved by the
FDA, the success depends on management's ability to sustain competitive
advantages.



The pharmaceutical,
biopharmaceutical and biotechnology industries are very competitive, fast moving
and intense, and expected to be increasingly so in the future. Other larger and
well funded companies have developed and are developing drugs that, if not
similar in type to AngioGenex' drugs, are designed to address the same patient
or subject population. Therefore, AngioGenex' lead product, other products in
development, or any other products AngioGenex may acquire or in-license may not
be the best, the safest, the first to market, or the most economical to make or
use. If a competitor's product is better than AngioGenex', for whatever reason,
then AngioGenex could make less money from sales, if Angiogenex is able to
generate sales at all.



There are many reasons why a competitor
might be more successful than AngioGenex, including:



|  |                                                                                                                                                                                                                                                                                                                                                 
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|· | Most competitors have greater
financial resources and can afford more technical and development setbacks
than we can.                                                                                                                                                                                                                           
|· | Most competitors have been in the
drug-discovery and drug-development business longer than we have. They
have greater experience than us in critical areas like clinical testing,
obtaining regulatory approval, and sales and marketing. This experience
and their name recognition give them a competitive advantage over
AngioGenex.         
|· | Some competitors may have a better
patent position protecting their technology than AngioGenex has or will
have to protect its technology. If AngioGenex cannot use AngioGenex
proprietary rights to prevent others from copying AngioGenex technology
or developing similar technology, then AngioGenex competitive position
will be harmed.



- 18 -



---



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                        
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|· | Some companies with competitive
technologies may move through stages of development, approval, and
marketing faster than we do. If a competitor receives FDA approval before
AngioGenex, then it will be authorized to sell its products before
AngioGenex can sell its products. The first company "to market" often has
a significant advantage over latecomers; a second-place position could
result in less-than-anticipated sales.
|· | The recent completion of the
sequencing of the human genome may result in an acceleration of competing
products due to enhanced information about disease states and the factors
that contribute to the disease.                                                                                                                                                                                                                       



If AngioGenex is unable to establish
sales and marketing capabilities or enter into agreements with third parties to
sell and market any products we may develop, we may not be able to generate
product revenue.



We do not currently have
an organization for the sales, marketing and distribution of pharmaceutical
products. In order to market any products that may be approved by the FDA,
management must build sales, marketing, managerial and other non-technical
capabilities or make arrangements with third parties to perform these services.
In addition, our management has no experience in developing, training or
managing a sales force and will incur substantial additional expenses in doing
so. The cost of establishing and maintaining a sales force may exceed its cost
effectiveness. Furthermore, we will compete with many companies that currently
have extensive and well-funded marketing and sales operations. Our marketing and
sales efforts may be unable to compete successfully against these companies. If
our management is unable to establish adequate sales, marketing and distribution
capabilities, whether independently or with third parties, we may not be able to
generate product revenue and may not become profitable.



We do not have any
manufacturing facilities and expect to rely on one or more third-party
manufacturers to properly manufacture any products we may develop or in-license
and may not be able to quickly replace manufacturing capacity without the use of
a third party's manufacturing facilities as a result of a fire, natural disaster
(including an earthquake), equipment failure or other difficulty, or if such
facilities are deemed not in compliance with the GMP requirements, and the
noncompliance could not be rapidly rectified.



Our inability or reduced
capacity to have any products we may develop or in-license manufactured would
prevent us from successfully commercializing our proposed products. Our
dependence upon third parties for the manufacture of its proposed products may
adversely affect our profit margins and our ability to develop and deliver
proposed products on a timely and competitive basis. Any delays in formulation
and manufacturing objectives may cause a delay in our clinical program, and
could have an adverse effect on any potential sales or profits.



We could occasionally become subject to
commercial disputes that might harm our business by distracting our management
from the operation of the business, by increasing expenses and, if we do not
prevail, it is subject to potential monetary damages and other remedies.



From time to time we can
become engaged in disputes regarding its commercial transactions. These disputes
could result in monetary damages or other remedies that could adversely impact
of its financial position or operations. Even if we prevail in these disputes,
they may distract our management from operating the business and the cost of
defending these disputes would reduce operating results.



We may be subject to
product liability claims. The development, manufacture, and sale of
pharmaceutical products would expose us to the risk of significant losses
resulting from product liability claims. Although management intends to obtain
and maintain product liability insurance to offset some of this risk, we may be
unable to secure such insurance or we may not cover certain potential claims.



We may not be able to
afford to obtain product liability insurance due to rising costs in insurance
premiums in recent years. If our management is able to secure insurance
coverage, we may be faced with a successful claim in excess of our product
liability coverage that could result in a material adverse impact on our
business. If insurance coverage is too expensive or is unavailable, we may be
forced to self-insure



- 19 -



---

against
product-related claims. Without insurance coverage, a successful claim against
us and any defense costs incurred in defending us may have a material adverse
impact on operations.



As a result of our limited operating
history, we may not be able to correctly estimate the future operating expenses,
which could lead to cash shortfalls.



AngioGenex was
incorporated in 1999 and has only a limited operating history from which to
evaluate its business. We have generated only $464,688 in other income and we
have not received FDA approval for marketing any of its product candidates.
Failure to obtain FDA approval for its products would have a material adverse
effect on our ability to continue operating. Accordingly, these prospects must
be considered in light of the risks, expenses, and difficulties frequently
encountered by companies in an early stage of development. We may not be
successful in addressing such risks, and the failure to do so could have an
adverse effect on the business, operating results and financial condition.



Because of this limited
operating history and because of the emerging nature of the markets in which we
compete, the historical financial data is of limited value in estimating future
operating expenses. Our budgeted expense levels are affected based on our
expectations concerning future revenues. However, our ability to generate any
revenues beyond grants depends largely on receiving marketing approval from the
FDA. Moreover, if FDA approval is obtained, the size of any future revenues
depends on the choices and demand of individuals, which are difficult to
forecast accurately. We may be unable to adjust its operations in a timely
manner to compensate for any unexpected shortfall in revenues. Accordingly, a
significant shortfall in demand for its products could have an immediate and
material adverse effect on the business, results of operations, and financial
condition.



Our operating results
may fluctuate as a result of a number of factors, many of which are outside of
our control. For these reasons, comparing our operating results on a
period-to-period basis may not be meaningful, and no one should rely on the past
results as any indication of our future performance. Our quarterly and annual
expenses are likely to increase substantially over the next several years, and
revenues from the SBIR grants may not continue at the current levels. Our
operating results in future quarters may fall below expectations. Any of these
events could adversely impact business prospects and make it more difficult to
raise additional equity capital at an acceptable price per share. Each of the
risk factors listed in this "Risk Factors" section may affect our operating
results.



Our business and its
industry are constantly changing and evolving over time. Furthermore, we compete
in an unpredictable industry and regulatory environment. Our ability to succeed
depends on its ability to compete in this fluctuating market. As such, the
actual operating results may differ substantially from projections.



We may be unable to maintain an
effective system of internal controls and accurately report its financial
results or prevent fraud, which may cause current and potential stockholders to
lose confidence in our financial reporting and adversely impact the business and
the ability to raise additional funds in the future.



Effective internal
controls are necessary for us to provide reliable financial reports and
effectively prevent fraud, if we cannot provide reliable financial reports or
prevent fraud, its operating results and reputation could be harmed as a result,
causing stockholders and/or prospective investors to lose confidence in
management and making it more difficult for us to raise additional capital in
the future.



In-licensing of drug-development
programs could result in operating difficulties, dilution and other harmful
consequences.



We may seek to in-
license certain technologies, but have only limited experience in these types of
transactions. From time-to- time, management may engage in discussions regarding
in-licensing or certain technologies management believes critical to our
business. Any one of these transactions could have a material effect on our
financial condition and operating results.



- 20 -



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If we lose
the services of key management personnel, we may not be able to execute our
business strategy effectively.



Our future success
depends in a large part upon the continued service of key members of its senior
management team. In particular, Chairman Richard Salvador, CEO William Garland,
Ph.D., and COO and Vice President of R&D, are critical to our overall
management as well as the development of the technology, the culture and the
strategic direction for our company. All of the executive officers and key
employees are at-will employees, and we do not maintain any key-person life
insurance policies. Any loss of management or key personnel could materially
harm the business.



We rely on highly skilled personnel and,
if unable to retain or motivate key personnel or hire additional qualified
personnel, we may not be able to grow effectively.



Our performance is
largely dependent on the talents and efforts of highly skilled individuals. The
future success depends on the continuing ability to identify, hire, develop,
motivate, and retain highly skilled personnel for all areas of the organization.
Competition in the industry for qualified employees is intense and it is likely
that certain competitors will directly target some of our employees. The
continued ability to compete effectively depends on the ability to retain and
motivate existing employees.



Management may also need
to hire additional qualified personnel with expertise in preclinical testing,
clinical research and testing, government regulation, formulation and
manufacturing and sales and marketing. We compete for qualified individuals with
numerous biopharmaceutical companies and other emerging entrepreneurial
companies, as well as universities and research institutions. Competition for
such individuals is intense, and may not be able to successfully recruit or
retain such personnel. Attracting and retaining qualified personnel will be
critical to our success.



Our future profitability is uncertain.



We cannot predict our
ability to increase our revenues or achieve profitability. We may be required to
increase our research and development expenses in order to develop potential new
products. As evidenced by the substantial net losses during and 2008 and 2007,
losses and expenses may increase and fluctuate from quarter to quarter. There
can be no assurance that we will ever achieve profitable operations.



We may not successfully manage any
experienced growth.



Our success will depend
upon the expansion of its operations and the effective management of any such
growth, which will place a significant strain on management and on
administrative, operational, and financial resources. To manage any such growth,
management must expand the facilities, augment it's operational, financial and
management systems, and hire and train additional qualified personnel. If
management is unable to manage its growth effectively, its business would be
harmed.



Our drug-development programs depend
upon third-party researchers who are outside our control.



We depend upon
independent investigators and collaborators, such as universities, medical
institutions, and clinical research organizations to conduct pre-clinical and
clinical trials under agreements. These collaborators are not our employees, and
management cannot control the amount or timing of resources that they devote to
our programs. These investigators may not assign as great a priority to the
programs or pursue them as diligently as we would if it were undertaking such
programs. If outside collaborators fail to devote sufficient time and resources
to our drug-development programs, or if their performance is substandard, the
approval of our FDA applications, if any, and the introduction of new drugs, if
any, will be delayed. These collaborators may also have relationships with other
commercial entities, some of whom may compete with us. If our collaborators
assist the competitors at our expense, any competitive position would be harmed.
If conflicts arise with our collaborators, they may act in their self-interests,
which may be adverse to our interests. Conflicts may arise in our collaborations
due to one or more of the following:



- 21 -



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|  |                                                                                                                                                                                                
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|· | disputes with respect to payments
that we believe are due under a collaboration agreement;                                                                                                     
|· | disagreements with respect to
ownership of intellectual property rights;                                                                                                                       
|· | unwillingness on the part of a
collaborator to keep us informed regarding the progress of its development
and commercialization activities, or to permit public disclosure of these
activities;
|· | delay of a collaborator's development
or commercialization efforts with respect to drug candidates; or                                                                                         
|· | termination or non-renewal of the
collaboration.                                                                                                                                               



In addition, with our
collaborations, we may be required to agree not to conduct independently, or
with any third party, any research that is competitive with the research
conducted under our collaborations. Our collaborations may have the effect of
limiting the areas of research that management may pursue, either alone or with
others. Our collaborators, however, may be able to develop, either alone or with
others, products in related fields that are competitive with the products or
potential products that are the subject of these collaborations.



RISKS RELATED TO OUR INTELLECTUAL
PROPERTY



Our intellectual property rights are
valuable, and its inability to protect them could reduce the value of our
products, services and brand. Our patents, trademarks, trade secrets, copyrights
and other intellectual property rights are critically important assets.



Events outside of
management's control could jeopardize our ability to protect its intellectual
property rights. For example, effective intellectual property protection may not
be available in every country in which the products and services are
distributed. In addition, the efforts management has taken to protect its
intellectual property rights may not be sufficient or effective. Any significant
impairment of its intellectual property rights could harm its business or its
ability to compete. Protecting our intellectual property rights is costly and
time consuming, and the unauthorized use of our intellectual property could
cause these costs to rise significantly and materially affect the operating
results.



While our goal is to obtain patent
protection for its innovations, they may not be patentable or management may
choose not to protect certain innovations that later turn out to be important
for its business.



Even if we do obtain
protection for its potential innovations, the scope of protection gained may be
insufficient or a patent issued may be deemed invalid or unenforceable, as the
issuance of a patent is not conclusive as to its validity or as to the
enforceable scope of the claims of the patent. The patenting process,
enforcement of issued patents, and defense against claims of infringement are
inherently costly and risky. We may not have the financial resources to defend
its patents, thereby reducing our competitive position and its business
prospects. Specific risks associated with the patent process include the
following:



|  |                                                                                                                                                                                                                                                                                                                                                                                
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|· | The United States or foreign patent
offices may not grant patents of meaningful scope based on the
applications we have already filed and those we intend to file. If our
current patents do not adequately protect its drug molecules and the
indications for their use, then management will not be able to prevent
imitation and any product may not be commercially viable.



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|· | Some of the issued patents we now
license may be determined to be invalid. If we have to defend the validity
of its patents the costs of such defense could be substantial, and there
is no guarantee of a successful outcome. In the event any of the patents
in-licensed is found to be invalid, we may lose its competitive position
and may not be able to receive royalties for products covered in part or
whole by that patent under license agreements.



- 22 -



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|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|· | In addition, changes in or different
interpretations of patent laws in the United States and foreign countries
may permit others to use discoveries or to develop and commercialize
technology and products without providing any compensation to us. The laws
of some countries do not protect intellectual property rights to the same
extent as U.S. laws and those countries may lack adequate rules and
procedures for defending the intellectual property rights. For example,
some countries, including many in Europe, do not grant patent claims
directed to methods of treating humans, and in these countries patent
protection may not be available at all to protect



Although we try to avoid infringement,
there is the risk that patented technology owned by another person or entity
and/or that we may be sued for infringement.



For example, U.S. patent
applications are confidential while pending in the Patent and Trademark Office,
and patent offices in foreign countries often publish patent applications for
the first time six months or more after filing. Further, we may not be aware of
published or granted conflicting patent rights. Any conflicts resulting from
patent applications and patents of others could significantly reduce the
coverage of its patents and limit its ability to obtain meaningful patent
protection. In addition, defending or indemnifying a third party against a claim
of infringement can involve lengthy and costly other legal actions, and there
can be no guarantee of a successful outcome.



Our management also
seeks to maintain certain intellectual property as trade secrets. The secrecy of
this information could be compromised by third parties, or intentionally or
accidentally disclosed to others by our employees, which may cause us to lose
any competitive advantage we enjoy from maintaining these trade secrets.



We are, and may in the future be,
subject to intellectual property rights claims, which are costly to defend,
which could require us to pay damages, and which could limit our ability to use
certain technologies in the future.



Companies in the
pharmaceutical, biopharmaceutical and biotechnology industries own large numbers
of patents, copyrights, trademarks, and trade secrets and frequently enter into
litigation based on allegations of infringement or other violations by others of
intellectual property rights. As our products get closer to commercialization,
there is greater possibility that we may become subject to an infringement claim
based on use of the technology such that we would be unable to continue using
the technology without obtaining a license or settlement from third parties.



Any intellectual
property claims, whether merited or not, could be time- consuming and expensive
to litigate and could us to divert critical management and financial resources
to the resolution of such claims. We may not be able to afford the costs of
litigation. Any legal action against us or our collaborators could lead to:



|  |                                                                                                                                         
|- | ----------------------------------------------------------------------------------------------------------------------------------------
|· | payment of damages, potentially
treble damages, if we are found to have willfully infringed a party's
patent rights;                    
|· | injunctive or other equitable relief
that may effectively block the ability to further develop, commercialize
and sell products; or     
|· | we or our collaborators having to
enter into license arrangements that may not be available on commercially
acceptable terms, if at all.



Confidentiality agreements with
employees and others may not adequately prevent disclosure of our trade secrets
and other proprietary information and may not adequately protect our
intellectual property.



Because we operate in
the highly technical field of drug discovery and development, we rely in part on
trade secret protection in order to protect the proprietary technology and
processes. However, trade secrets are difficult to protect. We enter into
confidentiality and intellectual property assignment



- 23 -



---

agreements with
corporate partners, employees, consultants, outside scientific collaborators,
sponsored researchers and other advisors. These agreements generally require
that the other party keep confidential and not disclose to third parties all
confidential information developed by the party or made known to the party
during the course of the party's relationship with us. These agreements also
generally provide that inventions conceived by the party in the course of
rendering services to us will be our exclusive property. However, these
agreements may not be honored and may not effectively assign intellectual
property rights to us. Enforcing a claim that a party illegally obtained and is
using our trade secrets is difficult, expensive and time consuming and the
outcome is unpredictable. In addition, courts outside the United States may be
less willing to protect trade secrets. The failure to obtain or maintain trade
secret protection could adversely affect our competitive position.



RISKS RELATED TO
OUR COMMON STOCK



Our common stock is traded on the OTCBB,
our stock price is highly volatile, and you may not be able to sell your shares
of our common stock at a price greater than or equal to the price you paid for
such shares.



Our shares of common
stock are currently traded on the Over the Counter Bulletin Board, or OTCBB.
Stocks traded on the OTCBB generally have limited trading volume and exhibit a
wide spread between bid and ask quotations. The market price of our common stock
is extremely volatile. To demonstrate the volatility of our stock price, during
2008, our common stock traded as low as $0.05 per share and as high as $0.65 per
share. This may impact an investors decision to buy or sell our common stock.
As of December 31, 2008 there were approximately 217 holders of our common
stock. Factors affecting our stock price include:



| |   |                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------
| | · | our financial results;                                                                                                             
| | · | fluctuations in our operating results;                                                                                             
| | · | announcements of technological innovations or new
commercial health care products or therapeutic products by us or our
competitors;
| | · | government regulation;                                                                                                             
| | · | developments in patents or other intellectual
property rights;                                                                     
| | · | developments in our relationships with customers
and potential customers; and                                                      
| | · | general market conditions.                                                                                                         



Furthermore, volatility
in the stock price of other companies has often led to securities class action
litigation against those companies. Any such securities litigation against us
could result in substantial costs and divert managements attention and
resources, which could seriously harm our business and financial condition.



Our common stock may be subject to
penny stock rules which may be detrimental to investors.



Our common stock may be,
or may become, subject to the regulations promulgated by the SEC for penny
stock. SEC regulation relating to penny stock is presently evolving, and the
OTCBB may react to such evolving regulation in a way that adversely affects the
market liquidity of our common stock. Penny stock currently includes any
non-NASDAQ equity security that has a market price of less than $5.00 per share,
subject to certain exceptions. The regulations require that prior to any
non-exempt buy/sell transaction in a penny stock, a disclosure schedule set
forth by the SEC relating to the penny stock market must be delivered to the
purchaser of such penny stock. This disclosure must include the amount of
commissions payable to both the broker-dealer and the registered representative
and current price quotations for the common stock. The regulations also require
that monthly statements be sent to holders of penny stock that disclose recent
price information for the penny stock and information of the limited market for
penny stocks. These requirements may adversely affect the market liquidity of
our common stock.



- 24 -



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Sales of our
common stock may require broker-dealers to make special suitability
determinations regarding prospective purchasers.



Our common stock may be,
or may become, subject to Rule 15g-1 through 15g-9 under the Exchange Act, which
imposes certain sales practice requirements on broker-dealers which sell our
common stock to persons other than established customers and accredited
investors (generally, individuals with a net worth in excess of $1,000,000 or
an annual income exceeding $200,000 (or $300,000 together with their spouses)).
For transactions covered by this rule, a broker-dealer must make a special
suitability determination for the purchaser and have received the purchasers
written consent to the transaction prior to the sale. Applicability of this rule
would adversely affect the ability of broker-dealers to sell our common stock
and purchasers of our common stock to sell their shares of such common stock.
Accordingly, the market for our common stock may be limited and the value
negatively impacted.



Potential investors in
the Registrant's common stock are urged to obtain and read such disclosure
carefully before purchasing any shares that are deemed to be "penny stock."
Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve the
account of any investor for transactions in such stocks before selling any penny
stock to that investor. This procedure requires the broker-dealer to (i) obtain
from the investor information concerning his or her financial situation,
investment experience and investment objectives; (ii)reasonably determine, based
on that information, that transactions in penny stocks are suitable for the
investor and that the investor has sufficient knowledge and experience as to be
reasonably capable of evaluating the risks of penny stock transactions; (iii)
provide the investor with a written statement setting forth the basis on which
the broker-dealer made the determination in (ii) above; and (iv) receive a
signed and dated copy of such statement from the investor, confirming that it
accurately reflects the investor's financial situation, investment experience
and investment objectives. Compliance with these requirements may make it more
difficult for holders of the Registrant's common stock to resell their shares to
third parties or to otherwise dispose of them in the market or otherwise.



If we fail to maintain the adequacy of
our internal controls, our ability to provide accurate financial statements and
comply with the requirements of the Sarbanes-Oxley Act of 2002 could be
impaired, which could cause our stock price to decrease substantially.



We are continuing to
take measures to address and improve our financial reporting and compliance
capabilities and we are in the process of instituting changes to satisfy our
obligations in connection with being a public company. We plan to obtain
additional financial and accounting resources to support and enhance our ability
to meet the requirements of being a public company. We will need to continue to
improve our financial and managerial controls, reporting systems and procedures,
and documentation thereof. If our financial and managerial controls, reporting
systems or procedures fail, we may not be able to provide accurate financial
statements on a timely basis or comply with the Sarbanes-Oxley Act of 2002 as it
applies to us. Any failure of our internal controls or our ability to provide
accurate financial statements could cause the trading price of our common stock
to decrease substantially.



Our common shares are thinly traded and,
if you are a holder of shares, you may be unable to sell at or near ask prices
or at all if you need to convert your options, warrants or other convertible
securities into common stock and sell your shares to raise money or otherwise
desire to liquidate such shares.



We cannot predict the
extent to which an active public market for our common stock will develop or be
sustained. Our common shares have historically been sporadically or
thinly-traded on the Over-The-Counter Bulletin Board, meaning that the
number of persons interested in purchasing our common shares at or near bid
prices at any given time may be relatively small or non-existent. This situation
is attributable to a number of factors, including the fact that we are a small
company which is relatively unknown to stock analysts, stock brokers,
institutional investors and others in the investment community that generate or
influence sales volume, and that even if we came to the attention of such
persons, they tend to be risk-averse and would be reluctant to follow an
unproven company such as ours or purchase or recommend the purchase of our
shares until such time as we became more seasoned and viable. As a consequence,
there may be periods of several days or more when trading activity in our shares
is minimal



- 25 -



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or non-existent,
as compared to a seasoned issuer which has a large and steady volume of trading
activity that will generally support continuous sales without an adverse effect
on share price. We cannot give you any assurance that a broader or more active
public trading market for our common stock will develop or be sustained, or that
current trading levels will be sustained.



The market price for our
common stock is particularly volatile given our status as a relatively small
company with a small and thinly traded float and lack of current revenues that
could lead to wide fluctuations in our share price. The price at which you
convert your debentures into our common stock many be indicative of the price
that will prevail in the trading market. You may be unable to sell your common
stock at or above your purchase price if at all, which may result in substantial
losses to you.



The market for our
common shares is characterized by significant price volatility when compared to
seasoned issuers, and we expect that our share price will continue to be more
volatile than a seasoned issuer for the indefinite future. The volatility in our
share price is attributable to a number of factors. First, as noted above, our
common shares are sporadically and/or thinly traded. As a consequence of this
lack of liquidity, the trading of relatively small quantities of shares by its
shareholders may disproportionately influence the price of those shares in
either direction. The price for its shares could, for example, decline
precipitously in the event that a large number of our common shares are sold on
the market without commensurate demand, as compared to a seasoned issuer which
could better absorb those sales without adverse impact on its share price.
Secondly, an investment in us is a speculative or risky investment due to our
lack of revenues or profits to date and uncertainty of future market acceptance
for current and potential products. As a consequence of this enhanced risk, more
risk-adverse investors may, under the fear of losing all or most of their
investment in the event of negative news or lack of progress, be more inclined
to sell their shares on the market more quickly and at greater discounts than
would be the case with the stock of a seasoned issuer.



Investors should be
aware that, according to SEC Release No. 34-29093, the market for penny stocks
has suffered in recent years from patterns of fraud and abuse. Such patterns
include (1) control of the market for the security by one or a few
broker-dealers that are often related to the promoter or issuer; (2)
manipulation of prices through prearranged matching of purchases and sales and
false and misleading press releases; (3) boiler room practices involving
high-pressure sales tactics and unrealistic price projections by inexperienced
sales persons; (4) excessive and undisclosed bid-ask differential and markups by
selling broker-dealers; and (5) the wholesale dumping of the same securities by
promoters and broker-dealers after prices have been manipulated to a desired
level, along with the resulting inevitable collapse of those prices and with
consequent investor losses. Our management is aware of the abuses that have
occurred historically in the penny stock market. Although we do not expect to be
in a position to dictate the behavior of the market or of broker-dealers who
participate in the market, management will strive within the confines of
practical limitations to prevent the described patterns from being established
with respect to our securities. The occurrence of these patterns or practices
could increase the volatility of our share price.



We do not anticipate paying any cash
dividends.



We presently do not
anticipate that we will pay any dividends on any of our capital stock in the
foreseeable future. The payment of dividends, if any, would be contingent upon
our revenues and earnings, if any, capital requirements, and general financial
condition. The payment of any dividends will be within the discretion of our
board of directors. We presently intend to retain all earnings, if any, to
implement our business plan; accordingly, we do not anticipate the declaration
of any dividends in the foreseeable future.



- 26 -



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ITEM 2.  DESCRIPTION
OF PROPERTY



AngioGenex does not
presently own or lease any real property. Our executive and administrative
offices are located in New York at 425 Madison Avenue Suite 902, New York, New
York 10017, in space provided to the company by our Chief Financial Officer.
AngioGenex maintains no laboratories of its own. Our research and development
programs including drug screening, animal breeding are performed at contract
research organizations and academic facilities pursuant to contract.



ITEM 3.  LEGAL PROCEEDINGS



We are not aware of any
material pending legal proceedings to which AngioGenex is a party or of which
any of its property is subject.



To our knowledge, no
director, officer or affiliate of ours and no owner of record or beneficial
owner of more than five percent (5%) of our securities, or any associate of any
such director, officer or security holder is a party adverse to us or has a
material interest adverse to us in reference to pending litigation.



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



We held our Annual
Meeting of Stockholders on December 29, 2008.  Set forth below is a summary
of each matter voted upon at the meeting and the number of votes cast for,
against, withheld or abstained.



Proposal #1: The
election William Garland, Martin Murray, Richard Salvador and Michael Stage to
serve on the Board of Directors:



|                 |  |                              |  |                                       
|---------------- |  | ---------------------------- |  | --------------------------------------
|Nominee          |  | Total Votes For All Nominees |  | Total Votes Withheld From All Nominees
|William Garland  |  | 14,448,005                   |  | 0                                     
|Martin Murray    |  | 14,448,005                   |  | 0                                     
|Richard Salvador |  | 14,448,005                   |  | 0                                     
|Michael Strage   |  | 14,448,005                   |  | 0                                     



Proposal #2: Ratification of the appointment of Williams & Webster,
P.S. as our independent auditors for the year ending December 31, 2008:



|                |  |                     |  |          
|--------------- |  | ------------------- |  | ---------
|Total Votes For |  | Total Votes Against |  | Abstained
|14,448,005      |  | 0                   |  |          



- 27 -



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PART II



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



Our common stock began
to be traded in the Over-The-Counter Bulletin Board on May 7, 2007 under the
stock symbol AGGX.OB. It is also listed in Germany on the Frankfurt Stock
Exchange.



The market represented
by the OTCBB is limited and the price for our common stock quoted on the OTCBB
is not necessarily a reliable indication of the value of our common stock. The
following table sets forth the high and low closing prices for shares of our
common stock for the periods noted, as reported on the OTCBB. Quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may not
represent actual transactions.



|                 |  |        |                |      |   |      |  |   |      | 
|---------------- |  | ------ | -------------- | ---- | - | ---- |  | - | ---- | 
|YEAR             |  | PERIOD |                | HIGH |   | LOW  | 
|Fiscal Year 2007 |  |        | Second Quarter |      | $ | 0.54 |  | $ | 0.31 | 
|                 |  |        | Third Quarter  |      | $ | 0.85 |  | $ | 0.51 | 
|                 |  |        | Fourth Quarter |      | $ | 0.85 |  | $ | 0.65 | 
|                 |  |        |                |      |   |      |  |   |      | 
|Fiscal Year 2008 |  |        | Second Quarter |      | $ | 0.44 |  | $ | 0.40 | 
|                 |  |        | Third Quarter  |      | $ | 0.40 |  | $ | 0.20 | 
|                 |  |        | Fourth Quarter |      | $ | 0.20 |  | $ | 0.15 | 



Stockholders



As of December 31, 2008,
we had approximately 21,302,906 shares of common stock issued and outstanding
which were held by approximately 217 stockholders of record, which total does
not include stockholders who hold their shares in street name. The transfer
agent for our common stock is Nevada Agency and Trust Company.



DIVIDEND POLICY



Our board of directors
determines any payment of dividends. We utilize our assets to develop our
business and, consequently, we have never paid a dividend and do not expect to
pay dividends in the foreseeable future. Any future decision with respect to
dividends will depend on future earnings, operations, capital requirements and
availability, restrictions in future financing agreements and other business and
financial considerations.



Recent Sales of Unregistered Securities



In April 2006, we sold
an aggregate of 310,000 shares to five accredited investors in a private
placement with the shares sold at $0.25 per share for gross proceeds of $77,500.
The issuance of shares was exempt from registration pursuant to Section 4(2) of
the Securities Act of 1933, as amended.



In September 2006, we
sold 150,000 units, with each unit consisting of 2 shares of common stock and
one warrant with an exercise price of $1 per share to Kleen Capital, A.G for
gross proceeds of $100,000. The issuance of shares upon conversion of the notes
was exempt from registration pursuant to Section 4(2) of the Securities Act of
1933, as amended.



In October 2006, holders
of convertible pay in kind note converted their notes into an aggregate of
7,050,285 shares of common stock. The convertible notes were issued in March
2004 with a maturity date of December 31, 2004, later extended to December 31,
2005. Detachable warrants were also granted to the note holders exercisable at
an aggregate of 6,391,876 shares at an exercise price of $0.155 per share.



- 28 -



---

Holders included Richard Salvador, our President and CEO ($75,000 in principal),
Michael Strage, our Vice President for Business Development ($25,000 in
principal) and George Gould, our former Vice President and General Counsel
($25,000 in principal). The issuance of shares upon conversion of the notes was
exempt from registration pursuant to Section 4(2) of the Securities Act of 1933,
as amended.



In March 2007, we began
a private placement of up to 5 million units for $1.00 per unit, with each unit
consisting of two shares and one warrant to purchase a share of common stock for
$1.00 per share. In 2007 we sold 39,000 units (78,000 shares and 39,000
warrants) at $0.50 per share and 8,000 units (16,000 shares and 8,000 warrants)
at $0.65 per share for an aggregate amount of $34,690, net of expenses of
$14,710. The issuance of shares and warrants was exempt from registration
pursuant to Section 4(2) of the Securities Act of 1933, as amended.



In March and April 2007,
we issued convertible notes to seven unrelated parties for gross proceeds of
$85,000. The convertible notes began to accrue annual interest on the
outstanding principal 60 days after the date of the note at a rate of 6%, with a
maturity date of June 30, 2007. The notes were convertible into shares of common
stock at $0.35 per share. On July 5, 2007 the holders of these convertible notes
converted the notes into an aggregate of 242,859 shares of common stock. The
issuance of shares upon conversion of the notes was exempt from registration
pursuant to Section 4(2) of the Securities Act of 1933, as amended.



In December 2007, we
sold 169,262 shares at $0.50 per share in a private placement for $68,860 in
cash, net of expenses of $18,271, to two unrelated investors. The issuance of
shares was exempt from registration pursuant to Section 4(2) of the Securities
Act of 1933, as amended.



In February 2008, we
sold 19,500 shares to an unrelated third party for gross proceeds of $6,500. In
June 2008 we sold 150,000 shares of common stock at $0.333 per share with net
proceeds of $50,000. In September 2008 we sold 30,000 shares of common stock at
$0.333 per share with net proceeds of $10,000. These private placements were
exempt from registration pursuant to Section 4(2) of the Securities Act. In
October 2008, 50,000 shares were issued in exchange for reduction of note
payable from related party of $12,500.



ITEM 6.  SELECTED FINANCIAL
DATA



Not required.



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



THE FOLLOWING SECTION SHOULD BE READ IN
CONJUNCTION WITH OUR FINANCIAL STATEMENTS AND THE NOTES THERETO INCLUDED ON
PAGES F-1 THROUGH F-27 FOLLOWING THE SIGNATURE PAGES OF THIS ANNUAL REPORT. THIS
ANNUAL REPORT ON FORM 10-K CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE
MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND INVOLVE A
HIGH DEGREE OF RISK AND UNCERTAINTY. ALL STATEMENTS, OTHER THAN STATEMENTS OF
HISTORICAL FACTS, INCLUDED IN OR INCORPORATED BY REFERENCE INTO THIS FORM 10-K
ARE FORWARD-LOOKING STATEMENTS. IN ADDITION, WHEN USED IN THIS DOCUMENT, THE
WORDS ANTICIPATE, ESTIMATE, PROJECT, AND SIMILAR EXPRESSIONS ARE INTENDED
TO IDENTIFY FORWARD-LOOKING STATEMENTS. OUR ACTUAL RESULTS MAY DIFFER MATERIALLY
FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS DUE TO RISKS AND
UNCERTAINTIES THAT EXIST IN OUR OPERATIONS. THESE FORWARD-LOOKING STATEMENTS ARE
SUBJECT TO CERTAIN RISKS, UNCERTAINTIES AND ASSUMPTIONS INCLUDING AMONG OTHERS,
THE RISK THAT OUR PRODUCT DEVELOPMENT PROGRAMS WILL NOT PROVE SUCCESSFUL, THAT
WE WILL NOT BE ABLE TO OBTAIN FINANCING TO COMPLETE ANY FUTURE PRODUCT
DEVELOPMENT, THAT OUR PRODUCTS WILL NOT PROVE COMPETITVE IN THEIR MARKETS SHOULD
ONE OR MORE OF THESE RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD UNDERLYING
ASSUMPTIONS



- 29 -



---

PROVE INCORRECT,
ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE ANTICIPATED, ESTIMATED OR
PROJECTED.



ALTHOUGH WE BELIEVE THAT THE EXPECTATIONS
INCLUDED IN SUCH FORWARD-LOOKING STATEMENTS ARE REASONABLE, WE CANNOT GIVE ANY
ASSURANCES THAT THESE EXPECTATIONS WILL PROVE TO BE CORRECT. WE UNDERTAKE NO
OBLIGATION TO PUBLICLY RELEASE THE RESULT OF ANY REVISIONS TO SUCH
FORWARD-LOOKING STATEMENTS THAT MAY BE MADE TO REFLECT EVENTS OR CIRCUMSTANCES
AFTER THE DATE HEREOF OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.



The following discussion and analysis
should be read in conjunction with our financial statements and the notes
thereto appearing in Part I, Item 1.



Company Overview



AngioGenex is an early
stage biotechnology company focused on the discovery and development of
compounds useful for the diagnosis and treatment of cancer. Our proprietary
technology is based on the research work of Dr. Robert Benezra and his
colleagues at Memorial Sloan Kettering Cancer Center, who established the role
of the Id (inhibition of differentiation) genes and corresponding Id proteins in
the formation of new blood vessels (angiogenesis) required for tumor growth and
metastasis. This intellectual property includes the exclusive worldwide rights
to certain patent pending Id based anti-angiogenesis anti-cancer biotechnology
that we acquired in 2000 from the Sloan Kettering Institute for Cancer Research
and subsequently from sponsored research. In addition, our intellectual property
includes molecules that were generated as a result of in-house screening and
out-sourced contract research concerning organic molecules that appear to
inhibit the Id related process responsible for the formation of new blood
vessels and consequent tumor growth, as well as other know-how and trade
secrets which resulted from other out-sourced research.



Our therapeutic focus is
on the identification and development of orally active molecules capable of
inhibiting Id activity and preventing the formation of blood vessels that
support the growth of cancerous tumors. In addition, we have sponsored other
research on the modulation of Id genes and proteins that may be useful in the
treatment of non-oncological diseases, such as age related macular degeneration
and diabetic retinopathy, in which a surplus in the growth of blood vessels is
an important part of the underlying pathology of such diseases.



AngioGenex has
out-licensed its rights to develop Id-based prognostics and diagnostics to
BioCheck, Inc., a leading producer of clinical diagnostic assays. In June 2004
AngioGenex signed a Development and Marketing Agreement with BioCheck under
which AngioGenex assigned BioCheck the exclusive rights to develop and market
cancer prognostic and diagnostics in return for certain limited royalties and
milestone payments. Pursuant to this sub-license BioCheck has been developing
monoclonal antibodies for all four Id proteins (Id1, Id2, Id3, and Id4) for use
in standard enzyme linked immunoassay or ELISA type assay tests and for kits for
the detection of the proteins in tumors and other tissues.



Since commencement of
operations in 1999, our efforts have been principally devoted to in-licensing
our intellectual property, research and development activities, entering into
collaborative agreements, recruiting management personnel and advisors, and
raising capital.



Our current business
strategy is to concentrate our financial resources primarily on the further
development of our proprietary potential anti-cancer lead drug compounds.



Product Research and Development Plans



For the year ended
December 31, 2008 we incurred $80,787 on research and development costs as
compared to $64,834 for the year ended December 31, 2007. The increase was due
to cost of experiments and availability of working capital.



- 30 -



---

Our current plan of operation for the next 12 months primarily
involves out-sourced contract research and development activities on the design
of more potent and efficient Id protein inhibitors based on two organic
molecules which have exhibited anti-Id protein properties. Given sufficient
capital resources, we plan to continue to test these organic molecules in
established animal tumor models for their ability to block blood vessel
formation and inhibit tumor growth. This testing as well as further refinement
of the structure of active molecules is expected to result in the identification
of a lead therapeutic drug compound. The lead compound would then be subjected
to further testing in animals to obtain preliminary knowledge of its properties
including safety. After the receiving promising preliminary data on the lead
compound, it would be subjected to the more stringent tests required to complete
the FDA requirements for an IND (Investigational New Drug Application). Such
additional research and testing necessary for an IND application will require
significant capital expenditures of approximately $1.5 million and will only be
possible if we raise additional capital through equity financings.



We intend to contract
out substantially all of the research and development work on our potential
anti-cancer lead drug compounds. No employees were hired in 2008. We do not
expect to hire employees during the next twelve months unless we raise
substantial additional capital in the range of $5 million.



Our actual research and
development and related activities may vary significantly from current plans
depending on numerous factors, including changes in the costs of such activities
from current estimates, the results of our research and development programs,
technological advances, determinations as to commercial viability and the status
of competitive products. The focus and direction of our operations will also be
dependent on the establishment of our collaborative arrangements with other
companies, the availability of financing and other factors. We expect our
development costs to increase as any future lead anti-cancer
drug compound or compounds enter the later stages of development.



Liquidity and Capital Resources



Since inception, we have
financed our operations through the private placement of equity and debt
securities, as well as loans from certain of our officers and directors. During
the period ended December 31, 2008, we sold 199,500 shares  at $0.33 per
share for an aggregate amount of $65,850, net of expenses of $650  During
the fourth quarter of 2008 we issued 50,000 shares in exchange for a $12,500
reduction of note payable to related party. We received $28,500 from issuance of
notes payable from related parties.



As of December 31, 2008,
we had $3,493 in cash and cash equivalents as compared to $45,406 as of December
31, 2007. We do not have any available lines of credit. Since inception we have
financed our operations from private placements of equity securities and loans
from shareholders and officers.



Net cash used in
operating activities during the fiscal year ended December 31, 2008 was $136,263
resulting in a net loss of $400,763, after taking into account significant
non-cash charges for operating expenses during the year and other adjustments.
We pay no rent to Murray and Josephson CPAs LLC, whose principal is Martin
Murray, a director and our Chief Financial Officer, Secretary and Treasurer, for
the use of office space for file keeping and other business purposes.



Net cash from financing
activities for the fiscal year ended December 31, 2008 was $94,350.



We are pursuing
potential equity financing that may generate additional capital for us. We may
need to raise additional capital or generate additional revenue to complete our
development. We cannot assure you that we will generate sufficient additional
capital or revenues, if any, to fund our operations beyond the twelve month
period ending December 31, 2009, that any future equity financings will be
successful, or that other potential financings through bank borrowings, debt or
equity offerings, or otherwise, will be available on acceptable terms or at all.



As of December 31, 2008,
our current liabilities exceeded our current assets by $604,996. We anticipate
that our minimum cash requirements to continue as a going concern for the next
twelve months will be at least $70,000.



- 31 -



---

We plan to finance our needs principally from the following:

|  |                                                                                                                                                                                     
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|· | our existing capital resources and
interest earned on that capital;                                                                                                                 
|· | royalty income, if any, from licensed
product sales by BioCheck, Inc.;                                                                                                              
|· | annual minimum royalty payments from
BioCheck if aggregate royalty income received by AngioGenex during the
twelve months ending in the second quarter of 2009 is less than $50,000;
|· | through future private placement
financing.                                                                                                                                         



The current rate of our
cash usage raises substantial doubt about our ability to continue as a going
concern, absent any new sources of significant cash flows. We believe that we
have sufficient capital resources to finance our plan of operation for at least
the next six months. However, this is a forward-looking statement, and there may
be changes that could consume available resources before such time. Our long
term capital requirements and the adequacy of our available funds will depend on
many factors, including the eventual reporting company costs, public relations
fees, patent costs for filing, prosecuting, maintaining and defending our patent
rights, among others.



We do not currently have
sufficient capital resources to finance our plan of operation through the second
quarter of 2009. We will need to raise additional capital prior to the third
quarter of 2009 in order to fund our plan of operation through 2009. Our long
term capital requirements and the adequacy of our available funds will depend on
many factors, including our reporting company costs, patent costs for filing,
prosecuting, maintaining and defending our patent rights, among others.



We will need to raise
substantial additional capital through equity or debt financings or generate
additional revenue to complete our development of lead anti-cancer drug
compounds. We cannot assure you that we will generate sufficient additional
capital or revenues, if any, to fund our operations through 2009, that any
future equity financings will be successful, or that other potential financings
through equity offerings, or otherwise, will be available on acceptable terms or
at all. Having insufficient funds may require us to delay, scale back, or
eliminate some or all of our development programs, relinquish some or even all
rights to product candidates at an earlier stage of development, or renegotiate
less favorable terms that we would otherwise. If we are unable to raise
additional capital prior to the third quarter 2009 we may have to further
curtail or cease operations.

Critical Accounting Policies and
Estimates.



This discussion and
analysis of our financial condition and results of operations are based on our
financial statements that have been prepared under accounting principles
generally accepted in the United States of America. The preparation of financial
statements in conformity with accounting principles generally accepted in the
United States of America requires our management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could materially differ from those estimates. We have
disclosed all significant accounting policies in note 2 to the financial
statements included in our Form 10-K. Our critical accounting policies are:



Revenue recognition:Royalties will be recognized as revenue when the amounts are
contractually earned, fixed and determinable, and there is substantial
probability of collection.



Research, development
costs:Research and development costs are expensed as incurred.



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 and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.



- 32 -



---

Off Balance
Sheet Arrangements



We do not have any
off-balance sheet arrangements.



Lawsuit



In July 2006,
Comparative BioSciences Inc. (CompBio), a company that we had previously hired
to breed and house a colony of its proprietary Id-Knockout mice, sued us in
state court in California claiming approximately $200,000 in unpaid invoices. We
removed the case from state court to federal court and responded to CompBios
claims by pointing to over charges from a) keeping a colony of mice much larger
than we specifically requested, b) continuing to breed and house the mice for
several years after we had demanded that CompBio cease performing any work or
incurring any charges. Our response also included counter-claims for CompBios
breach of contract, as well as a number of business torts arising out of their
refusal to return the proprietary mice to us so that we could perform important
anti-cancer experiments as part of our drug development program and business
plan. At a hearing on December 22, 2006, the judge granted our request for
injunctive relief in the form of the return of our proprietary experimental
mice. However the judge ruled that CompBio would only be required to return our
proprietary Id-knockout mice if we first posted a bond for $200,000, which we
have not posted to date. On November 6, the parties agreed to a disposition of
the suit under a stipulated judgment and settlement agreement pursuant to which:
CompBio must return the laboratory mice and all scientific data from the
research, CompBio agrees to forego all intellectual property rights in the mice
and in the research, that it acknowledges belong to us, and we agreed to pay the
CompBio $55,000 in installments over a 5-year period. We have made $17,500
payments to CompBio pursuant to the settlement agreement.  The outstanding
balance as of December 31, 2008 is $39,906, including accrued interest.. The
stipulated judgment and settlement agreement was filed with the court on
November 15, 2007  The Company has not made the required payment for the
fourth quarter of 2008, and is in default of this settlement agreement. Under
the terms of the agreement upon receipt of written notification of default from
CompBio the Company has five days to cure. Failure by the Company to cure the
default results in an increase in the settlement amount to $75,000 plus
retroactive interest of 5% on the balance. The Company has not received any
notification of default from CompBio.



- 33 -



---

ITEM 8.
 FINANCIAL STATEMENTS





|                                                                   |  |      
|------------------------------------------------------------------ |  | -----
|ANGIOGENEX,
INC.
INDEX TO
FINANCIAL STATEMENTS                    
|Report of Independent
Registered Public Accounting Firm            |  | 35   
|Balance Sheets for December
31, 2007 and December 31, 2008         |  | 36   
|Statements of Operations
for twelve months ended December 31, 2008 |  | 37   
|Statement of Stockholders
Equity as of December 31, 2008          |  | 38-40
|Statements of Cash Flows
for twelve months ended December 31, 2008 |  | 41-42
|Notes to Financial
Statements for period ended December 31, 2008   |  | 43-53



- 34 -



---

AngioGenex,
Inc.

New York, New York



REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM





We have audited the accompanying balance
sheets of AngioGenex, Inc. as of December 31, 2008 and 2007, and the related
statements of operations, stockholders equity and cash flows for the years then
ended and for the period from March 31, 1999 (inception) through December 31,
2008.  These financial statements are the responsibility of the Companys
management.  Our responsibility is to express an opinion on these financial
statements based on our audit.



We conducted our audit in accordance with
the standards of the Public Company Accounting Oversight Board (United States).
 Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Companys internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements.  An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe
that our audit provides 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 AngioGenex, Inc. as of December 31, 2008 and 2007 and the results of
its operations, stockholders equity and its cash flows for the years then ended
and for the period from March 31, 1999 (inception) through December 31, 2008 in
conformity with accounting principles generally accepted in the United States of
America.



The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern.
 As discussed in Note 2 to the financial statements, the Company has no
revenues, limited resources and a large accumulated deficit. These factors raise
substantial doubt about the Companys ability to continue as a going concern.
Managements plans are also discussed in Note 2.  The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.









Williams & Webster, P.S.

Certified
Public Accountants

Spokane, Washington

April 9, 2009





- 35 -



---



|                                      |                               |                                                                 |                                                                       |   |             |              |   |             |              | 
|------------------------------------- | ----------------------------- | --------------------------------------------------------------- | --------------------------------------------------------------------- | - | ----------- | ------------ | - | ----------- | ------------ | 
|ANGIOGENEX, INC.                     
|(A DEVELOPMENT STAGE
ENTERPRISE)     
|BALANCE SHEETS                       
|                                      |                               |                                                                 |                                                                       |   |             | December 31, |   |             | December 31, | 
|ASSETS                                |                               |                                                                 |                                                                       |   | 2008        |              |   | 2007        |             
|                                      | CURRENT ASSETS                |                                                                 |                                                                       |   |             |              |   |            
|                                      |                               | Cash                                                            |                                                                       | $ | 3,493       |              | $ | 45,406      |             
|                                      |                               | Prepaid expenses                                                |                                                                       |   | 8,928       |              |   | 6,122       |             
|                                      |                               | Receivable                                                      |                                                                       |   | -           |              |   | 50,000      |             
|                                      |                               |                                                                 | TOTAL CURRENT ASSETS                                                  |   |             | 12,421       |   |             | 101,528      | 
|                                      | PROPERTY AND EQUIPMENT        |                                                                 |                                                                       |   |             |              |   |            
|                                      |                               |                                                                 | Equipment, net of depreciation of $7,280 and
$6,659, respectively     |   |             | 569          |   |             | 1,190        | 
|                                      |                               |                                                                 | TOTAL PROPERTY AND EQUIPMENT                                          |   |             | 569          |   |             | 1,190        | 
|                                      |                               | TOTAL ASSETS                                                    |                                                                       | $ | 12,990      |              | $ | 102,718     |             
|LIABILITIES AND STOCKHOLDERS' DEFICIT |                               |                                                                 |                                                                       |   |             |              |  
|                                      | CURRENT LIABILITIES           |                                                                 |                                                                       |   |             |              |   |            
|                                      |                               | Accrued expenses                                                |                                                                       | $ | 353,546     |              | $ | 273,442     |             
|                                      |                               | Accrued expenses - related parties                              |                                                                       |   | 218,837     |              |   | 148,793     |             
|                                      |                               | Notes payable                                                   |                                                                       |   | 11,000      |              |   | 11,000      |             
|                                      |                               | Notes payable, related parties                                  |                                                                       |   | 22,500      |              |   | 35,000      |             
|                                      |                               | Accrued interest                                                |                                                                       |   | 9,958       |              |   | 4,859       |             
|                                      |                               | Other liabilities                                               |                                                                       |   | 1,576       |              |   | -           |             
|                                      |                               |                                                                 | TOTAL CURRENT LIABILITIES                                             |   |             | 617,417      |   |             | 473,094      | 
|                                      | LONG-TERM LIABILITIES         |                                                                 |                                                                       |   |             |              |   |            
|                                      |                               | Notes payable, related parties                                  |                                                                       |   | 28,500      |              |   | -           |             
|                                      |                               | Settlement payable                                              |                                                                       |   | 25,000      |              |   | 35,000      |             
|                                      |                               |                                                                 |                                                                       |   |             | 53,500       |   |             | 35,000       | 
|                                      | COMMITMENTS AND CONTINGENCIES |                                                                 |                                                                       |   |             |              |   |            
|                                      | STOCKHOLDERS' DEFICIT         |                                                                 |                                                                       |   |             |              |   |            
|                                      |                               | Preferred stock, 5,000,000 shares authorized,
$0.001 par value; |                                                                       |   |             |              |   |             |             
|                                      |                               |                                                                 | no shares issued and outstanding                                      |   |             | -            |   |             | -            | 
|                                      |                               | Common stock, 70,000,000 shares authorized, $0.001
par value;   |                                                                       |   |             |              |   |             |             
|                                      |                               |                                                                 | 21,302,906 and 21,053,406 shares issued and
outstanding, respectively |   |             | 21,303       |   |             | 21,053       | 
|                                      |                               | Additional paid-in capital                                      |                                                                       |   | 2,848,775   |              |   | 2,770,675   |             
|                                      |                               | Stock options, warrants, and beneficial conversion
rights       |                                                                       |   | 982,241     |              |   | 912,379     |             
|                                      |                               | Accumulated deficit during development stage                    |                                                                       |   | (4,510,246) |              |   | (4,109,483) |             
|                                      |                               |                                                                 | TOTAL STOCKHOLDERS' DEFICIT                                           |   |             | (657,927)    |   |             | (405,376)    | 
|                                      |                               | TOTAL LIABILITIES AND STOCKHOLDERS'
DEFICIT                     |                                                                       | $ | 12,990      |              | $ | 102,718     |             
|                                      |                               |                                                                 |                                                                       |   |             | -            |   |             | -            | 



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



- 36 -



---



|                                 |                            |                                  |          |              |          |                |             |             
|-------------------------------- | -------------------------- | -------------------------------- | -------- | ------------ | -------- | -------------- | ----------- | ------------
|ANGIOGENEX, INC                 
|(A DEVELOPMENT STAGE
ENTERPRISE)
|STATEMENTS OF
OPERATIONS        
|                                 |                            |                                  |          |              |          |                |             | March , 1999
|                                 |                            |                                  |          | Year Ended   |          | (Inception) to
|                                 |                            |                                  |          | December 31, |          | December 31,  
|                                 |                            |                                  |          | 2008         |          | 2007           |             | 2008        
|                                 |                            |                                  |          |              |          |                |             |             
|REVENUES                         | $                          | -                                | $        | 50,000       | $        | 50,000        
|                                 |                            |                                  |          |              |          |                |             |             
|EXPENSES                         |                            |                                  |          |              |          |               
|                                 | Research and development   |                                  | 80,787   |              | 64,834   |                | 1,748,602  
|                                 | Consulting                 |                                  | -        |              | -        |                | 109,666    
|                                 | Licenses and fees          |                                  | -        |              | -        |                | 155,000    
|                                 | Professional fees          |                                  | 220,839  |              | 228,260  |                | 1,597,711  
|                                 | General and administrative |                                  | 89,142   |              | 52,836   |                | 362,013    
|                                 |                            | TOTAL OPERATING EXPENSES         |          | 390,768      |          | 345,930        |             | 3,972,992   
|                                 |                            |                                  |          |              |          |                |             |             
|LOSS FROM OPERATIONS             |                            | (390,768)                        |          | (295,930)    |          | (3,922,992)   
|                                 |                            |                                  |          |              |          |                |             | (3,922,992) 
|OTHER INCOME  (EXPENSES)         |                            |                                  |          |              |          |               
|                                 | Other income               |                                  | -        |              | -        |                | 464,688    
|                                 | Interest income            |                                  | 21       |              | -        |                | 7,257      
|                                 | Finance costs              |                                  | (10,016) |              | (68,475) |                | (1,059,199)
|                                 |                            | TOTAL OTHER INCOME (EXPENSES)    |          | (9,995)      |          | (68,475)       |             | (587,254)   
|                                 |                            |                                  |          |              |          |                |             |             
|LOSS BEFORE INCOME TAXES         |                            | (400,763)                        |          | (364,405)    |          | (4,510,246)   
|                                 |                            |                                  |          |              |          |                |             |             
|INCOME TAXES                     |                            | -                                |          | -            |          | -             
|                                 |                            |                                  |          |              |          |                |             |             
|NET LOSS                         | $                          | (400,763)                        | $        | (364,405)    | $        | (4,510,246)   
|                                 |                            |                                  |          |              |          |                |             |             
|                                 | NET LOSS PER COMMON SHARE, |                                  |          |              |          |                |            
|                                 |                            | BASIC AND DILUTED                | $        | (0.02)       | $        | (0.02)         |             |             
|                                 |                            |                                  |          |              |          |                |             |             
|                                 | WEIGHTED AVERAGE NUMBER OF |                                  |          |              |          |                |            
|                                 |                            | COMMON STOCK SHARES OUTSTANDING, |          |              |          |                |             |             
|                                 |                            | BASIC AND DILUTED                |          | 21,180,375   |          | 20,673,474     |             |             
|                                 |                            |                                  |          |              |          |                |             |             

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



- 37 -



---



|                                                          |                                                    |           |              |   |        |     |                 |                 |             |            |             |             |                  |   |           |        
|--------------------------------------------------------- | -------------------------------------------------- | --------- | ------------ | - | ------ | --- | --------------- | --------------- | ----------- | ---------- | ----------- | ----------- | ---------------- | - | --------- | -------
|ANGIOGENEX, INC.                                         
|(A DEVELOPMENT STAGE
ENTERPRISE)                         
|STATEMENT OF STOCKHOLDERS' EQUITY
(DEFICIT)              
|                                                          |                                                    |           |              |   |        |     |                 |                 |             |            |             | Deficit     |                  |   |          
|                                                          |                                                    |           | Common Stock |   |        |     |                 | Stock options / | Accumulated |            |            
|                                                          |                                                    |           |              |   |        |     |                 | Warrants /      | During      |            | Total      
|                                                          |                                                    |           | Number       |   |        |     | Additional      |                 |             | Beneficial | Development |             | Stockholders'   
|                                                          |                                                    |           | of Shares    |   | Amount |     | Paid-in Capital |                 |             | conversion | Stage       |             | Equity (Deficit)
|                                                          |                                                    |           |              |   |        |     |                 |                 |             |            |             |             |                  |   |           |        
|Issuance of founders' common stock at $0.01 per
share     |                                                    | 8,100,000 |              | $ | 8,100  | $   | 900             |                 | $           | -          | $           | -           |                  | $ | 9,000    
|                                                          |                                                    |           |              |   |        |     |                 |                 |             |            |             |             |                  |   |           |        
|Issuance of common stock at $0.17 per share               |                                                    | 729,000   |              |   | 729    |     | 120,271         |                 |             | -          |             | -           |                  |   | 121,000  
|                                                          |                                                    |           |              |   |        |     |                 |                 |             |            |             |             |                  |   |           |        
|Net Loss for the year ended March 31, 2000                |                                                    | -         |              |   | -      |     | -               |                 |             | -          |             | (104,357)   |                  |   | (104,357)
|                                                          |                                                    |           |              |   |        |     |                 |                 |             |            |             |             |                  |   |           |        
|Balance, March 31, 2000                                   |                                                    | 8,829,000 |              |   | 8,829  |     | 121,171         |                 |             | -          |             | (104,357)   |                  |   | 25,643   
|                                                          |                                                    |           |              |   |        |     |                 |                 |             |            |             |             |                  |   |           |        
|Issuance of common stock at $0.17 per share               |                                                    | 171,000   |              |   | 171    |     | 28,829          |                 |             | -          |             | -           |                  |   | 29,000   
|                                                          |                                                    |           |              |   |        |     |                 |                 |             |            |             |             |                  |   |           |        
|Issuance of common stock and warrants (net of
 cash and   |                                                    |           |              |   |        |     |                 |                 |             |            |             |             |                  |   |          
|                                                          | non cash expenses of $146,000) at $12,500 per
unit |           | 144,000      |   |        | 144 |                 | 347,856         |             |            | -           |             | -                |   |           | 348,000
|                                                          |                                                    |           |              |   |        |     |                 |                 |             |            |             |             |                  |   |           |        
|Stock options vested                                      |                                                    | -         |              |   | -      |     | -               |                 |             | 22,845     |             | -           |                  |   | 22,845   
|                                                          |                                                    |           |              |   |        |     |                 |                 |             |            |             |             |                  |   |           |        
|Net loss for the year ended March 31, 2001                |                                                    | -         |              |   | -      |     | -               |                 |             | -          |             | (181,811)   |                  |   | (181,811)
|                                                          |                                                    |           |              |   |        |     |                 |                 |             |            |             |             |                  |   |           |        
|Balance March 31, 2001                                    |                                                    | 9,144,000 |              |   | 9,144  |     | 497,856         |                 |             | 22,845     |             | (286,168)   |                  |   | 243,677  
|                                                          |                                                    |           |              |   |        |     |                 |                 |             |            |             |             |                  |   |           |        
|Issuance of common stock and warrants (net of cash
and    |                                                    |           |              |   |        |     |                 |                 |             |            |             |             |                  |   |          
|                                                          | non cash expenses of $118,000) at $12,500 per
unit |           | 62,000       |   |        | 62  |                 | 75,149          |             |            | -           |             | -                |   |           | 75,211 
|                                                          |                                                    |           |              |   |        |     |                 |                 |             |            |             |             |                  |   |           |        
|Stock options vested                                      |                                                    | -         |              |   | -      |     | -               |                 |             | 82,875     |             | -           |                  |   | 82,875   
|                                                          |                                                    |           |              |   |        |     |                 |                 |             |            |             |             |                  |   |           |        
|Net loss for the year ended March 31, 2002                |                                                    | -         |              |   | -      |     | -               |                 |             | -          |             | (482,903)   |                  |   | (482,903)
|                                                          |                                                    |           |              |   |        |     |                 |                 |             |            |             |             |                  |   |           |        
|Balance March 31, 2002                                    |                                                    | 9,206,000 |              |   | 9,206  |     | 573,005         |                 |             | 105,720    |             | (769,071)   |                  |   | (81,140) 
|                                                          |                                                    |           |              |   |        |     |                 |                 |             |            |             |             |                  |   |           |        
|Issuance of common stock for services at $0.25 per
share  |                                                    | 510,000   |              |   | 510    |     | 124,490         |                 |             | -          |             | -           |                  |   | 125,000  
|                                                          |                                                    |           |              |   |        |     |                 |                 |             |            |             |             |                  |   |           |        
|Issuance of common stock at $0.25 per share
 (net of      |                                                    |           |              |   |        |     |                 |                 |             |            |             |             |                  |   |          
|                                                          | cash and non cash expenses of $14,989)             |           | 216,000      |   |        | 216 |                 | 38,795          |             |            | -           |             | -                |   |           | 39,011 
|                                                          |                                                    |           |              |   |        |     |                 |                 |             |            |             |             |                  |   |           |        
|Stock options vested                                      |                                                    | -         |              |   | -      |     | -               |                 |             | 74,280     |             | -           |                  |   | 74,280   
|                                                          |                                                    |           |              |   |        |     |                 |                 |             |            |             |             |                  |   |           |        
|Net loss for the year ended March 31, 2003                |                                                    | -         |              |   | -      |     | -               |                 |             | -          |             | (469,897)   |                  |   | (469,897)
|                                                          |                                                    |           |              |   |        |     |                 |                 |             |            |             |             |                  |   |           |        
|Balance, March 31, 2003                                   |                                                    | 9,932,000 |              |   | 9,932  |     | 736,290         |                 |             | 180,000    |             | (1,238,968) |                  |   | (312,746)
|                                                          |                                                    |           |              |   |        |     |                 |                 |             |            |             |             |                  |   |           |        
|Issuance of common stock for services  at
$0.25 per share |                                                    | 1,255,000 |              |   | 1,255  |     | 312,495         |                 |             | -          |             | -           |                  |   | 313,750  
|                                                          |                                                    |           |              |   |        |     |                 |                 |             |            |             |             |                  |   |           |        
|Private placement costs from prior year
offering          |                                                    | -         |              |   | -      |     | (2,300)         |                 |             | -          |             | -           |                  |   | (2,300)  
|                                                          |                                                    |           |              |   |        |     |                 |                 |             |            |             |             |                  |   |           |        

- 38 -



---



|                                                           |                |            |              |      |        |           |                 |                 |             |            |             |             |                  |         |             |  
|---------------------------------------------------------- | -------------- | ---------- | ------------ | ---- | ------ | --------- | --------------- | --------------- | ----------- | ---------- | ----------- | ----------- | ---------------- | ------- | ----------- | -
|ANGIOGENEX, INC.                                          
|(A DEVELOPMENT STAGE
ENTERPRISE)                          
|STATEMENT OF STOCKHOLDERS' EQUITY
(DEFICIT) CONTINUED     
|                                                           |                |            |              |      |        |           |                 |                 |             |            |             | Deficit     |                  |         |            
|                                                           |                |            | Common Stock |      |        |           |                 | Stock options / | Accumulated |            |            
|                                                           |                |            |              |      |        |           |                 | Warrants /      | During      |            | Total      
|                                                           |                |            | Number       |      |        |           | Additional      |                 |             | Beneficial | Development |             | Stockholders'   
|                                                           |                |            | of Shares    |      | Amount |           | Paid-in Capital |                 |             | conversion | Stage       |             | Equity (Deficit)
|Stock options vested                                       |                | -          |              |      | -      |           | -               |                 |             | 35,653     |             | -           |                  |         | 35,653     
|                                                           |                |            |              |      |        |           |                 |                 |             |            |             |             |                  |         |             |  
|Issuance of warrants attached to convertible bridge
loan   |                | -          |              |      | -      |           | -               |                 |             | 586,551    |             | -           |                  |         | 586,551    
|                                                           |                |            |              |      |        |           |                 |                 |             |            |             |             |                  |         |             |  
|Beneficial conversion rights of convertible bridge
loan    |                | -          |              |      | -      |           | -               |                 |             | 288,449    |             | -           |                  |         | 288,449    
|                                                           |                |            |              |      |        |           |                 |                 |             |            |             |             |                  |         |             |  
|Net loss for the year ended March 31, 2004                 |                | -          |              |      | -      |           | -               |                 |             | -          |             | (356,061)   |                  |         | (356,061)  
|                                                           |                |            |              |      |        |           |                 |                 |             |            |             |             |                  |         |             |  
|Balance, March 31, 2004                                    |                | 11,187,000 |              |      | 11,187 |           | 1,046,485       |                 |             | 1,090,653  |             | (1,595,029) |                  |         | 553,296    
|                                                           |                |            |              |      |        |           |                 |                 |             |            |             |             |                  |         |             |  
|Stock options vested                                       |                | -          |              |      | -      |           | -               |                 |             | 21,614     |             | -           |                  |         | 21,614     
|                                                           |                |            |              |      |        |           |                 |                 |             |            |             |             |                  |         |             |  
|Net loss for the year ended March 31, 2005                 |                | -          |              |      | -      |           | -               |                 |             | -          |             | (1,396,914) |                  |         | (1,396,914)
|                                                           |                |            |              |      |        |           |                 |                 |             |            |             |             |                  |         |             |  
|Balance, March 31, 2005                                    |                | 11,187,000 |              |      | 11,187 |           | 1,046,485       |                 |             | 1,112,267  |             | (2,991,943) |                  |         | (822,004)  
|                                                           |                |            |              |      |        |           |                 |                 |             |            |             |             |                  |         |             |  
|Stock options granted for prepaid offering
costs           |                | -          |              |      | -      |           | -               |                 |             | 14,822     |             | -           |                  |         | 14,822     
|                                                           |                |            |              |      |        |           |                 |                 |             |            |             |             |                  |         |             |  
|Stock options vested                                       |                | -          |              |      | -      |           | -               |                 |             | 36,954     |             | -           |                  |         | 36,954     
|                                                           |                |            |              |      |        |           |                 |                 |             |            |             |             |                  |         |             |  
|Common stock issued in recapitalization and                |                |            |              |      |        |           |                 |                 |             |            |             |             |                  |         |            
|                                                           | reverse merger |            | 1,500,000    |      |        | 1,500     |                 | (1,500)         |             |            | -           |             | -                |         |             | -
|                                                           |                |            |              |      |        |           |                 |                 |             |            |             |             |                  |         |             |  
|Net loss for the nine months ended December 31,
2005       |                | -          |              |      | -      |           | -               |                 |             | -          |             | (409,997)   |                  |         | (409,997)  
|                                                           |                |            |              |      |        |           |                 |                 |             |            |             |             |                  |         |             |  
|Balance, December 31, 2005                                 |                | 12,687,000 |              | $    | 12,687 | $         | 1,044,985       |                 | $           | 1,164,043  | $           | (3,401,940) |                  | $       | (1,180,225)
|                                                           |                |            |              |      |        |           |                 |                 |             |            |             |             |                  |         |             |  
|Issuance of common stock at $0.25 per share                |                | 310,000    |              |      | 310    |           | 77,190          |                 |             | -          |             | -           |                  |         | 77,500     
|                                                           |                |            |              |      |        |           |                 |                 |             |            |             |             |                  |         |             |  
|Issuance of common stock at $0.33 per share                |                | 300,000    |              |      | 300    |           | 80,200          |                 |             | 19,500     |             | -           |                  |         | 100,000    
|                                                           |                |            |              |      |        |           |                 |                 |             |            |             |             |                  |         |             |  
|Stock options vested                                       |                | -          |              |      | -      |           | -               |                 |             | 514        |             | -           |                  |         | 514        
|                                                           |                |            |              |      |        |           |                 |                 |             |            |             |             |                  |         |             |  
|Shares issued in connection to conversion of notes
payable | 7,050,285      |            |              | 7050 |        | 1,246,513 |                 |                 | (288,449)   |            | -           |             |                  | 965,114
|                                                           |                |            |              |      |        |           |                 |                 |             |            |             |             |                  |         |             |  
|Net loss for the year ended December 31,
2006              |                |            |              |      |        |           |                 |                 |             |            |             | (343,138)   |                  |         | (343,138)  
|                                                           |                |            |              |      |        |           |                 |                 |             |            |             |             |                  |         |             |  
|Balance, December 31, 2006                                 |                | 20,347,285 |              |      | 20,347 |           | 2,448,888       |                 |             | 895,608    |             | (3,745,078) |                  |         | (380,235)  
|                                                           |                |            |              |      |        |           |                 |                 |             |            |             |             |                  |         |             |  
|Issuance of common stock at $0.50 per share                |                | 78,000     |              |      | 78     |           | 17,266          |                 |             | 13,086     |             | -           |                  |         | 30,430     
|                                                           |                |            |              |      |        |           |                 |                 |             |            |             |             |                  |         |             |  
|Issuance of common stock for services at $0.45 per
share   |                | 200,000    |              |      | 200    |           | 89,800          |                 |             | -          |             | -           |                  |         | 90,000     
|                                                           |                |            |              |      |        |           |                 |                 |             |            |             |             |                  |         |             |  
|Shares issued in connection to conversion of notes
payable | 242,859        |            |              | 243  |        | 145,471   |                 |                 | -           |            | -           |             |                  | 145,714



- 39 -



---



|                                                          |        |            |              |    |        |        |                 |                 |             |            |             |             |                  |        |           | 
|--------------------------------------------------------- | ------ | ---------- | ------------ | -- | ------ | ------ | --------------- | --------------- | ----------- | ---------- | ----------- | ----------- | ---------------- | ------ | --------- | 
|ANGIOGENEX, INC.                                         
|(A DEVELOPMENT STAGE
ENTERPRISE)                         
|STATEMENT OF STOCKHOLDERS' EQUITY
(DEFICIT) CONTINUED    
|                                                          |        |            |              |    |        |        |                 |                 |             |            |             | Deficit     |                  |        |          
|                                                          |        |            | Common Stock |    |        |        |                 | Stock options / | Accumulated |            |            
|                                                          |        |            |              |    |        |        |                 | Warrants /      | During      |            | Total      
|                                                          |        |            | Number       |    |        |        | Additional      |                 |             | Beneficial | Development |             | Stockholders'   
|                                                          |        |            | of Shares    |    | Amount |        | Paid-in Capital |                 |             | conversion | Stage       |             | Equity (Deficit)
|                                                          |        |            |              |    |        |        |                 |                 |             |            |             |             |                  |        |           | 
|Issuance of common stock at $0.65 per share               |        | 16,000     |              |    | 16     |        | 3,059           |                 |             | 3,685      |             | -           |                  |        | 6,760    
|                                                          |        |            |              |    |        |        |                 |                 |             |            |             |             |                  |        |           | 
|Issuance of common stock at $0.50 per share               |        | 169,262    |              |    | 169    |        | 84,191          |                 |             | -          |             |             |                  |        | 84,360   
|                                                          |        |            |              |    |        |        |                 |                 |             |            |             |             |                  |        |           | 
|Amortized private placement costs                         |        | -          |              |    | -      |        | (18,000)        |                 |             | -          |             | -           |                  |        | (18,000) 
|                                                          |        |            |              |    |        |        |                 |                 |             |            |             |             |                  |        |           | 
|Net loss for the year ended December 31,
2007             |        | -          |              |    | -      |        | -               |                 |             | -          |             | (364,405)   |                  |        | (364,405)
|                                                          |        |            |              |    |        |        |                 |                 |             |            |             |             |                  |        |           | 
|Balance, December 31, 2007                                |        | 21,053,406 |              | $  | 21,053 | $      | 2,770,675       |                 | $           | 912,379    | $           | (4,109,483) |                  | $      | (405,376)
|                                                          |        |            |              |    |        |        |                 |                 |             |            |             |             |                  |        |           | 
|Issuance of common stock at $0.33 per share               |        | 199,500    |              |    | 200    |        | 65,650          |                 |             | -          |             | -           |                  |        | 65,850   
|                                                          |        |            |              |    |        |        |                 |                 |             |            |             |             |                  |        |           | 
|Shares issued in connection to conversion of note
payable | 50,000 |            |              | 50 |        | 12,450 |                 |                 | -           |            | -           |             |                  | 12,500
|                                                          |        |            |              |    |        |        |                 |                 |             |            |             |             |                  |        |           | 
|Stock options vested                                      |        | -          |              |    | -      |        | -               |                 |             | 69,862     |             | -           |                  |        | 69,862   
|                                                          |        |            |              |    |        |        |                 |                 |             |            |             |             |                  |        |           | 
|Net loss for the year ended December 31,
2008             |        | -          |              |    | -      |        | -               |                 |             | -          |             | 0           |                  |        | -        
|                                                          |        |            |              |    |        |        |                 |                 |             |            |             |             |                  |        |           | 
|Balance, December 31, 2008                                |        | 21,302,906 |              | $  | 21,303 | $      | 2,848,775       |                 | $           | 982,241    | $           | (4,109,483) |                  | $      | (257,164)
|                                                          |        |            |              |    |        |        |                 |                 |             |            |             |             |                  |        |           | 

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



- 40 -



---



|                                      |                                           |                                                        |                                                    |          |           |           |              |           |                |       |             |             |             | 
|------------------------------------- | ----------------------------------------- | ------------------------------------------------------ | -------------------------------------------------- | -------- | --------- | --------- | ------------ | --------- | -------------- | ----- | ----------- | ----------- | ----------- | 
|ANGIOGENEX, INC.                     
|(A DEVELOPMENT STAGE
ENTERPRISE)     
|STATEMENTS OF CASH
FLOWS             
|                                      |                                           |                                                        |                                                    |          |           |           |              |           |                |       |             |             | March, 1999
|                                      |                                           |                                                        |                                                    |          |           |           | Year Ended   |           | (Inception) to
|                                      |                                           |                                                        |                                                    |          |           |           | December 31, |           | December 31,  
|                                      |                                           |                                                        |                                                    |          |           |           | 2008         |           | 2007           |       | 2008       
|                                      |                                           |                                                        |                                                    |          |           |           |              |           |                |       |             |             |             | 
|CASH FLOWS FROM OPERATING ACTIVITIES: |                                           |                                                        |                                                    |          |           |           |              |           |               
|                                      | Net loss                                  |                                                        |                                                    |          | $         | (400,763) |              | $         | (364,405)      |       | $           | (4,510,246)
|                                      | Adjustments to reconcile net loss         |                                                        |                                                    |          |           |           |              |           |                |       |            
|                                      |                                           | to net cash used by operating activities:              |                                                    |          |           |           |              |           |                |       |             |            
|                                      |                                           |                                                        | Depreciation                                       |          |           |           | 621          |           |                | 620   |             |             | 7,280      
|                                      |                                           |                                                        | Services paid by issuance of common stock          |          |           | -         |              |           | 90,000         |       |             | 526,450    
|                                      |                                           |                                                        | Services paid by issuance of common stock
options  |          |           | 69,862    |              |           | -              |       |             | 359,419    
|                                      |                                           |                                                        | Amortization of warrants and beneficial
conversion |          |           | -         |              |           | 54,429         |       |             | 948,929    
|                                      |                                           |                                                        | Non cash financing and other charges               |          |           | -         |              |           | 6,285          |       |             | 6,285      
|                                      |                                           | (Increase) decrease in prepaid expenses                |                                                    |          |           | (2,806)   |              |           | (5,383)        |       |             | (8,928)    
|                                      |                                           | (Increase) decrease in prepaid offering
costs          |                                                    |          | -         |           |              | 15,000    |                |       | -          
|                                      |                                           | (Increase) decrease in receivables                     |                                                    |          |           | 50,000    |              |           | (50,000)       |       |             | -          
|                                      |                                           | Increase (decrease) in accrued expenses                |                                                    |          | 80,104    |           |              | 37,607    |                |       | 352,124    
|                                      |                                           | Increase (decrease) in accrued expenses, related
party |                                                    |          | 70,044    |           |              | 21,087    |                |       | 220,259    
|                                      |                                           | Increase (decrease) in accrued interest                |                                                    |          |           | 5,099     |              |           | 2,230          |       |             | 100,072    
|                                      |                                           | Increase (decrease) in other liabilities               |                                                    |          |           | 1,576     |              |           | -              |       |             | 1,576      
|                                      |                                           | Increase (decrease) in settlement payable              |                                                    |          | (10,000)  |           |              | 35,000    |                |       | 25,000     
|                                      | Net cash used in operating activities     |                                                        |                                                    |          | (136,263) |           |              | (157,530) |                |       | (1,971,780)
|                                      |                                           |                                                        |                                                    |          |           |           |              |           |                |       |             |             |             | 
|CASH FLOWS FROM INVESTING ACTIVITIES: |                                           |                                                        |                                                    |          |           |           |              |           |               
|                                      | Purchase of equipment                     |                                                        |                                                    |          | -         |           |              | -         |                |       | (7,849)    
|                                      | Net cash used in investing activities     |                                                        |                                                    |          | -         |           |              | -         |                |       | (7,849)    
|                                      |                                           |                                                        |                                                    |          |           |           |              |           |                |       |             |             |             | 
|CASH FLOWS FROM FINANCING ACTIVITIES: |                                           |                                                        |                                                    |          |           |           |              |           |               
|                                      | Proceeds from bridge loan                 |                                                        |                                                    |          | -         |           |              | -         |                |       | 875,000    
|                                      | Payment of notes payable - related party  |                                                        |                                                    |          | -         |           |              | -         |                |       | (25,000)   
|                                      | Payment of notes payable                  |                                                        |                                                    |          | -         |           |              | -         |                |       | (35,000)   
|                                      | Proceeds from notes payable               |                                                        |                                                    |          | 28,500    |           |              | 95,000    |                |       | 219,500    
|                                      | Issuance of stock for cash - net          |                                                        |                                                    |          | 65,850    |           |              | 103,550   |                |       | 948,622    
|                                      | Net cash provided by financing activities |                                                        |                                                    |          | 94,350    |           |              | 198,550   |                |       | 1,983,122  
|                                      |                                           |                                                        |                                                    |          |           |           |              |           |                |       |             |             |             | 
|Net increase (decrease)  in cash      |                                           |                                                        |                                                    | (41,913) |           |           | 41,020       |           |                | 3,493
|                                      |                                           |                                                        |                                                    |          |           |           |              |           |                |       |             |             |             | 
|Cash, beginning of period             |                                           |                                                        |                                                    | 45,406   |           |           | 4,386        |           |                | -    
|                                      |                                           |                                                        |                                                    |          |           |           |              |           |                |       |             |             |             | 



- 41 -



---



|                                             |                                                  |                  |   |       |        |   |              |        |                |        |         |   |             | 
|-------------------------------------------- | ------------------------------------------------ | ---------------- | - | ----- | ------ | - | ------------ | ------ | -------------- | ------ | ------- | - | ----------- | 
|ANGIOGENEX, INC.                            
|(A DEVELOPMENT STAGE
ENTERPRISE)            
|STATEMENTS OF CASH FLOWS
CONTINUED          
|                                             |                                                  |                  |   |       |        |   |              |        |                |        |         |   | March, 1999
|                                             |                                                  |                  |   |       |        |   | Year Ended   |        | (Inception) to
|                                             |                                                  |                  |   |       |        |   | December 31, |        | December 31,  
|                                             |                                                  |                  |   |       |        |   | 2008         |        | 2007           |        | 2008   
|                                             |                                                  |                  |   |       |        |   |              |        |                |        |         |   |             | 
|Cash, end of period                          |                                                  |                  | $ | 3,493 |        | $ | 45,406       |        | $              | 3,493 
|                                             |                                                  |                  |   |       |        |   |              |        |                |        |         |   |             | 
|SUPPLEMENTAL CASH FLOW DISCLOSURES:          |                                                  |                  |   |       |        |   |              |        |               
|                                             | Cash paid for interest and income taxes:         |                  |   |       |        |   |              |        |                |        |        
|                                             |                                                  | Interest expense |   |       | $      |   |              | $      | -              |        | $       | -
|                                             |                                                  | Income taxes     |   |       | $      | - |              | $      | -              |        | $       | -
|                                             |                                                  |                  |   |       |        |   |              |        |                |        |         |   |             | 
|NON-CASH INVESTING AND FINANCING
ACTIVITIES: |                                                  |                  |   |       |        |   |              |       
|                                             | Services paid by issuance of stock               |                  |   | $     | -      |   | $            | 90,000 |                | $      | 526,450
|                                             | Services paid by issuance of stock options       |                  |   | $     | 69,862 |   | $            | -      |                | $      | 344,597
|                                             | Offering costs paid by issuance of stock
options |                  | $ | -     |        | $ | -            |        | $              | 14,822
|                                             | Conversion of debt to equity                     |                  |   | $     | 12,500 |   | $            | 85,000 |                | $      | 972,500
|                                             |                                                  |                  |   |       |        |   |              |        |                |        |         |   |             | 



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

- 42 -



---

ANGIOGENEX,
INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2008



NOTE 1  ORGANIZATION AND DESCRIPTION OF
BUSINESS



AngioGenex, Inc. (AngioGenex or the
Company) incorporated in the State of New York on March 31, 1999. The Company
is a biopharmaceutical company founded to create products that are uniquely
useful for the treatment, diagnosis and prognosis of cancer. Company programs
focus on (1) the discovery and development of orally active anti-cancer drugs
that act by modulating the action of the Id proteins, (2) the measurement of Id
proteins in tumors and blood to create products for the diagnosis and prognosis
of cancer, (3) generating proof-of-concept data in relevant preclinical models
to establish that modulation of Id proteins is useful to treat non-oncologic
diseases in which an overgrowth of blood vessels is an important part of the
underling pathology and (4) collaborating in respect to treatments of diseases
in which blood vessel proliferation is desirable. The Companys proprietary
technology is based on the research work of Dr. Robert Benezra and his
colleagues at Memorial Sloan Kettering Cancer Center (MSKCC), NYC, who
discovered the Id (inhibitor of differentiation) genes and corresponding Id
proteins and established their role in the formation of new blood vessels
(angiogenesis) required for tumor growth and metastasis.  The Companys
intellectual property includes the rights to biotechnology in the Id field,
which it acquired under exclusive worldwide licenses from MSKCC and the Albert
Einstein College of Medicine (AECOM), and its own patentable findings that it
has generated while developing its Id based anti-angiogenesis anti-cancer
strategies.



On December 30, 2005, AngioGenex merged
into eClic Acquisition, Inc., a wholly owned subsidiary of eClic, Inc.
incorporated in the state of Nevada, eClic Acquisition, Inc. then changed its
name to AngioGenex Therapeutics, Inc. and concurrently eClic, Inc, a fully
reporting shell changed its name to AngioGenex, Inc.  For accounting
purposes, the acquisition has been treated as a recapitalization of AngioGenex,
with AngioGenex as the acquirer in a reverse acquisition.  The transaction
was compliant with Rule 12g-3 of the Securities and Exchange Commission.
 The historical financial statements prior to December 30, 2005 are those
of AngioGenex while the legal structure of eClic remains in place.  eClic
had no assets or liabilities at the time of the acquisition.



The Company has been in the development
stage since inception and as of December 31, 2008 has had $50,000 of revenues
from its planned operations.  At time of the merger, the Companys year-end
changed from March 31 to December 31.



NOTE 2  SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES



This summary of significant accounting
policies of AngioGenex, Inc. is presented to assist in understanding the
Companys financial statements.  The financial statements and notes are
representations of the Companys management, which is responsible for their
integrity and objectivity.  These accounting policies conform to accounting
principles generally accepted in the United States of America, and have been
consistently applied in the preparation of the financial statements.



Accounting Method

The Company uses the accrual method of
accounting in accordance with accounting principles generally accepted in the
United States of America.



Basic and Diluted Loss Per Share

Statement of Financial Accounting Standards
No.128, Earnings Per Share (hereinafter SFAS No. 128), requires the
reporting of basic and diluted earnings/loss per share. Basic loss per share is
calculated by dividing net loss by the weighted average number of outstanding
common shares during the year. As all potential common shares are anti-dilutive,
the effects of options and warrants (totaling approximately 6,800,000 additional
shares) are not included in the calculation of diluted loss per share.



Cash and Cash Equivalents

For purposes of its statement of cash
flows, the Company considers all short-term debt securities purchased with a
maturity of three months or less to be cash equivalents.



- 43 -



---

ANGIOGENEX,
INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2008



Derivative Instruments

The Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities (hereinafter SFAS No. 133), as amended by
SFAS No. 137, Accounting for Derivative Instruments and Hedging Activities 
Deferral of the Effective Date of FASB No. 133, SFAS No. 138, Accounting for
Certain Derivative Instruments and Certain Hedging Activities, SFAS No. 149,
Amendment of Statement 133 on Derivative Instruments and Hedging Activities,
SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics
of Both Liabilities and Equity, and SFAS No. 155, Accounting for Certain
Hybrid Financial Instruments, an amendment of FASB Standards No. 133 and 140.
 These statements establish accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. They require that an entity
recognize all derivatives as either assets or liabilities in the balance sheet
and measure those instruments at fair value.



If certain conditions are met, a derivative
may be specifically designated as a hedge, the objective of which is to match
the timing of gain or loss recognition on the hedging derivative with the
recognition of (i) the changes in the fair value of the hedged asset or
liability that are attributable to the hedged risk or (ii) the earnings effect
of the hedged forecasted transaction. For a derivative not designated as a
hedging instrument, the gain or loss is recognized in income in the period of
change.



Historically, the Company has not entered
into derivatives contracts to hedge existing risks or for speculative
purposes.



At December 31, 2008 and 2007 the Company
has not engaged in any transactions that would be considered derivative
instruments or hedging activities.



Development Stage Activities

The Company is currently and has been a
development stage company as defined under Statements of Financial Accounting
Standards (FAS) No. 7 since its formation on March 31, 1999.  It is
primarily engaged in the research to develop anti-cancer strategies using the
field of antiangiogenesis.  In 2003, the Company entered into an agreement
to provide certain properties to an unrelated outside company. The Company
recognized $50,000 of royalty revenue under this agreement for the year ended
December 31, 2007, however the Company did not deem this revenue sufficient to
move the Company from development stage to a fully reporting company. See Note
4.



Equipment

Equipment is carried at cost less an
allowance for depreciation.  Depreciation is recorded using the straight-
line method over an estimated useful life of five years.  Depreciation
expense for the year ended December 31, 2008 and 2007 was $621 and $620,
respectively.



Fair Value Measurement

The Company's financial instruments as
defined by SFAS No. 107, "Disclosures about Fair Value of Financial
Instruments," include cash, accounts payable and accrued expenses and short-term
borrowings.  All instruments are accounted for on a historical cost basis,
which, due to the short maturity of these financial instruments, approximates
fair value at December 31, 2008 and 2007.



In September 2006, the FASB issued FASB
Statement No. 157, "Fair Value Measurements" ("SFAS 157"). SFAS 157 defines fair
value, establishes a framework for measuring fair value in generally accepted
accounting principles, and expands disclosures about fair value measurements.
The provisions of SFAS 157 were adopted January 1, 2008.



SFAS 157 establishes a fair value hierarchy
that prioritizes the inputs to valuation techniques used to measure fair value.
The hierarchy gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities (Level 1 measurements) and the
lowest priority to unobservable inputs (Level 3 measurements). The three levels
of the fair value hierarchy under SFAS 157 are described below:



- 44 -



---

ANGIOGENEX,
INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2008



Level 1 - Unadjusted
quoted prices in active markets that are accessible at the measurement date for
identical unrestricted assets or liabilities.

Level 2 - Quoted prices
in markets that are not active, or inputs that are observable, either directly
or indirectly, for substantially the full term of the asset or liability.

Level 3 - Prices or
valuation techniques that require inputs that are both significant to fair value
measurement and unobservable (supported by little or no market activity).



The Company's cash instruments are
classified within Level 1 of the fair value hierarchy because they are valued
using quoted market prices. The cash instruments that are valued based on quoted
market prices in active markets are primarily money market securities.



Going Concern

The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern.



As shown in the accompanying financial
statements, the Company has incurred substantial net losses since inception.
 The future of the Company is dependent upon additional financing and
revenue to fund its research and development activities and to support
operations. However, there is no assurance that the Company will be able to
obtain additional financing. Furthermore, there is no assurance that the Food
and Drug Administration will grant future approval of the Companys prospective
products or that profitable operations can be attained as a result thereof.



The Company anticipates that its principal
source of funds for the next year will be the issuance for cash of additional
equity instruments.  The financial statements do not include any
recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary in the event the Company
cannot continue in existence.  Management plans to seek additional capital
from new equity securities issuances that will provide funds needed to increase
liquidity, fund internal growth and fully implement its business plan.  The
Company anticipates that its minimum cash requirements to continue as a going
concern for the next twelve months will be at least $70,000 for administrative
costs.



Research, Development and Patent

Research and development costs, including
certain costs related to patent applications, are charged to operations as
incurred.



Stock-based Compensation

In December 2004, the Financial Accounting
Standards Board issued a revision to Statement of Financial Accounting Standards
No. 123R, Accounting for Stock Based Compensations. This statement supersedes
APB Opinion No. 25, Accounting for Stock Issued to Employees, and its related
implementation guidance. This statement establishes standards for the accounting
for transactions in which an entity exchanges its equity instruments for goods
or services. It also addresses transactions in which an entity incurs
liabilities in exchange for goods or services that are based on the fair value
of the entitys equity instruments or that may be settled by the issuance of
those equity instruments. This statement focuses primarily on accounting for
transactions in which an entity obtains employee services in share-based payment
transactions. This statement does not change the accounting guidance for share
based payment transactions with parties other than employees provided in
Statement of Financial Accounting Standards No. 123.



Statement of Financial Accounting Standards
No. 123, Accounting for Stock-Based Compensation, defines a fair value-based
method of accounting for stock options and other equity instruments. The Company
has adopted this method, which measurescompensation costs based on the estimated fair value of the award and
recognizes that cost over the service period.



Provision for Taxes

Income taxes are provided based upon the
liability method of accounting pursuant to Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes (hereinafter SFAS No. 109).
 Under this



- 45 -



---

ANGIOGENEX,
INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2008



approach, deferred income taxes are
recorded to reflect the tax consequences in future years of differences between
the tax basis of assets and liabilities and their financial reporting amounts at
each year-end.  A valuation allowance is recorded against deferred tax
assets if management does not believe the Company has met the more likely than
not standard imposed by SFAS No. 109 to allow recognition of such an asset. The
Company evaluates tax positions to determine whether the benefits of tax
positions are more likely than not of being sustained upon audit based on the
technical merits of the tax position. For tax positions that are more likely
than not of being sustained, the Company recognizes the largest amount that is
greater than 50% likely of being realized upon ultimate settlement in the
financial statements. For tax positions that are not more likely than not of
being sustained upon audit, the Company does not recognize any portion of the
benefit.



At December 31, 2008, the Company had net
deferred tax assets (calculated at an expected rate of 40%, to include local,
state and federal taxes) of approximately $1,872,000 principally arising from
net operating loss carryforwards for income tax purposes and other accumulated
temporary differences.  As management of the Company cannot determine that
it is more likely than not that the Company will realize the benefit of the net
deferred tax asset, a valuation allowance equal to the net deferred tax asset
has been established at December 31, 2008.  The significant components of
the income tax and deferred tax asset at December 31, 2008 and 2007 were as
follows:



|                                                                                          |           |                   |   |                  
|----------------------------------------------------------------------------------------- | --------- | ----------------- | - | -----------------
|                                                                                          |           | December 31,
2008 |   | December 31,
2007
|Operating Loss                                                                            | $         | 401,000           | $ | 364,000          
|                                                                                          |           |                   |   |                  
|Permanent Differences:                                                                    |           |                   |   |                  
|Nondeductible
meals and entertainment                                                     |           | 1,000             |   | 1,000            
|Temporary Differences:                                                                    |           |                   |   |                  
|Stock
options issued under a non-qualified plan:                                          |           | 70,000            |   | -                
|Financing costs                                                                           |           | -                 |   | 61,000           
|Deferred
research and development costs:                                                  |           | 18,000            |   | 9,000            
|Operating
loss after permanent and temporary differences                                  | $         |                   | $ |                  
|312,000                                                                                   | 293,000  
|                                                                                          |           |                   |   |                  
|Accumulated
Net Operating Loss Carryforward                                               | $         | 2,229,000         | $ | 1,917,000        
|Other
accumulated temporary differences                                                   | 2,237,000 | 2,149,000        
|Accumulated
net operating loss carryforward after all temporary and permanent
differences | $         |                   | $ |                  
|4,466,000                                                                                 | 4,066,000
|Research and development tax
credit                                                       | $         | 86,000            | $ | 85,000           
|                                                                                          |           |                   |   |                  
|Deferred tax asset                                                                        | $         | 1,872,000         | $ | 1,711,000        
|Deferred tax asset valuation allowance                                                    |           | (1,872,000)       |   | (1,711,000)      
|Net deferred tax
asset                                                                    | $         | -                 | $ | -                



- 46 -



---

ANGIOGENEX,
INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2008



At December 31, 2008 the Company has
estimated net operating loss carryforward and deferred charges of approximately
$4,466,000 which expire in the years 2018 through 2028. The Company also
recognized a research and development tax credit that is included in the above
calculation of deferred tax assets. The change in valuation allowance for the
year ended December 31, 2008 was $161,000.



Use of Estimates

The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that effect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reported period. Actual results could differ from those estimates.



Recent Accounting Pronouncements

FAS 163 Accounting for Financial Guarantee
Insurance Contracts is effective January 1, 2009 except for disclosures about
the risk-management activities of the insurance enterprise be effective for the
first period (including interim periods) beginning after issuance of this
Statement. Except for those disclosures, earlier application is not permitted.
FAS 163 requires that an insurance enterprise recognize a claim liability prior
to an event of default (insured event) when there is evidence that credit
deterioration has occurred in an insured financial obligation. FAS 163 also
clarifies how Statement 60 applies to financial guarantee insurance contracts,
including the recognition and measurement to be used to account for premium
revenue and claim liabilities. The effect of adoption of FAS 163 on the
Companys financial position and results of operations is not expected to be
material.



FAS 162 The Hierarchy of Generally
Accepted Accounting Principles is effective 60 days following the SECs
approval of the Public Company Accounting Oversight Board amendments to AU
Section 411, The Meaning of Present Fairly in Conformity With Generally
Accepted Accounting Principles. FAS 162 identifies the sources of accounting
principles and the framework for selecting the principles to be used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles in the
United States. The effect of adoption of FAS 162 on the Companys financial
position and results of operations is not expected to be material.



FAS 161 Disclosures about Derivative
Instruments and Hedging Activities, which is effective January 1, 2009
requires enhanced disclosures about derivative instruments and hedging
activities to allow for a better understanding of their effects on an entitys
financial position, financial performance, and cash flows. Among other things,
FAS 161 requires disclosure of the fair values of derivative instruments and
associated gains and losses in a tabular format. The adoption of FAS 161 will
not affect the Companys financial position or results of operations.



In December 2007, the SEC issued Staff
Accounting Bulletin (SAB) No. 110 regarding the use of a "simplified" method, as
discussed in SAB No. 107 (SAB 107), in developing an estimate of expected term
of "plain vanilla" share options in accordance with SFAS No. 123 (R),
Share-Based Payment.  In particular, the staff indicated in SAB 107 that it
will accept a company's election to use the simplified method, regardless of
whether the company has sufficient information to make more refined estimates of
expected term. At the time SAB 107 was issued, the staff believed that more
detailed external information about employee exercise behavior (e.g., employee
exercise patterns by industry and/or other categories of companies) would, over
time, become readily available to companies. Therefore, the staff stated in SAB
107 that it would not expect a company to use the simplified method for share
option grants after December 31, 2007. The staff understands that such detailed
information about employee exercise behavior may not be widely available by
December 31, 2007. Accordingly, the staff will continue to accept, under certain
circumstances, the use of the simplified method beyond December 31, 2007. The
Company currently uses the simplified method for plain vanilla share options
and warrants, and will assess the impact of SAB 110 for fiscal year 2009. It is
not believed that this will have an impact on the Companys financial position,
results of operations or cash flows.



- 47 -



---

ANGIOGENEX,
INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2008



Reclassification

Certain amounts from prior periods have
been reclassified to conform to the current period presentation.  This
reclassification has resulted in no changes to the Companys accumulated deficit
or net losses presented.



Revenue recognition

Royalties will be recognized as revenue
when the amounts are contractually earned, fixed and determinable, and there is
substantial probability of collection. The Company recognized $50,000 royalty
revenue at December 31, 2007.



Net Loss Per Share

In June of 1999 the Company adopted
Statement of Financial Accounting Standards Statement No. 128, Earnings Per
Share. Basic earnings (net loss) per share is computed using the weighted
average number of common shares outstanding. Diluted net loss per share for FASC
is the same as basic net loss per share, as the inclusion of the common stock
equivalents would be antidilutive.



NOTE 3  AGREEMENT WITH SLOAN-KETTERING
INSTITUTE FOR CANCER RESEARCH (SKICR)



On January 1, 2001, the Company signed a
two-year industrial research agreement with SKICR to sponsor the research to
determine if Id proteins are useful targets for antiangiogenic drug design,
which may be highly specific for the inhibition of tumor vasculature thereby
blocking the growth and/or metastasis of a majority of neoplasms with few side
effects. The research agreement provided that the Company would fund the project
on a quarterly basis. The Company was committed to pay for legal costs in
connection with related patent applications and protection. The Company paid
$308,000 to SKICR in connection with this research project.



In March of 2000, in exchange for $30,000
the Company obtained from SKICR an exclusive worldwide right and license in the
field of use, including to make, have made, use, lease, commercialize and sell
licensed products and to use licensed processes derived from the invention. The
agreement provides that an additional $200,000 shall be paid to SKICR upon the
submission to any regulatory authority of the first new drug application for any
licensed product and $500,000 to be paid upon the first regulatory authority
approval. In addition, agreement also provides for royalty payments to SKICR
ranging from 2.5% - 4% of net sales and 15% of gross revenues from sub-license
fees.



At December 31, 2008, the Company has no
products for sale that would fall under the licensing agreement, and no fees,
aside from the original license fee, has been paid or accrued.



NOTE 4  AGREEMENT WITH BIOCHECK, INC.



On December 15, 2003, the Company entered
into a development and marketing agreement with BioCheck Inc. for the
development and marketing of diagnostic, prognostic, or bio-analytical products.
 The agreement was modified as of July 21,2008. Under the agreement, the
Company will receive license fees equal to 9% of the gross revenue of the direct
sale by BioCheck, Inc. of any products and 25% of any sublicensing revenue
received by BioCheck, Inc. As of December 31, 2008 no revenues were generated.
Prior to its modification the agreement provided certain minimum annual royalty
to be paid to the Company. The provision for minimum royalty payments has been
eliminated. Therefore the receivable of $50,000 that was recognized was charged
to bad debt as in 2008.



NOTE 5  RELATED PARTY
TRANSACTIONS



An officer of the Company allows the
Company to use space in his offices for file keeping and other business
purposes.  The Company pays no rent for this space.  This same officer
also provides services to the Company in the form of bookkeeping and tax
preparation, for which the Company is billed.



- 48 -



---

ANGIOGENEX,
INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2008



At December 31, 2008 and 2007 the Company
owed the officers business $100,842 and $53,793, respectively, which is
included in accrued expenses  related parties in the financial statements.



At December 31, 2008 the Company owed an
officer $95,000 for unpaid salary pursuant to an agreement to pay $5,000 per
month through September 30, 2006.  See Note 11.



For additional related party transactions,
see Notes 6 and 11.



NOTE 6  NOTES PAYABLE



On September 1, 2005, the Company obtained
an unsecured loan in the amount of $25,000 from a corporate officer, $12,500 of
which was repaid during 2008. The agreement provides for repayment of principal
and interest accrued at 6% per annum at September 1, 2008. At December 31, 2008
the principal balance and accrued interest of $4,537 were unpaid.



On November 25, 2005, the Company obtained
an unsecured loan in the amount of $1,000 from an unrelated third party. The
agreement provides for repayment of principal and interest accrued at 6% per
annum at December 1, 2008.  At December 31, 2008 the principal balance and
accrued interest of $186 were unpaid.



On November 29, 2005, the Company obtained
an unsecured loan in the amount of $10,000 from a corporate officer. The
agreement provides for repayment of principal and interest accrued at 6% per
annum at December 1, 2008.  At December 31, 2008, the principal balance and
accrued interest of $1,854 were unpaid.



On November 19, 2007, the Company obtained
an unsecured loan in the amount of $10,000 from an unrelated third party. The
agreement provides for repayment of principal and interest accrued at 6% per
annum at November 19, 2009.  At December 31, 2008 the Company had accrued
interest of $671.



On October16, 2008, the Company obtained an
unsecured loan in the amount of $16,000 from a corporate officer. The agreement
provides for repayment of principal and interest accrued at 6% per annum at
October 16, 2011. At December 31, 2008, the Company had accrued interest of
$203.



On October 28, 2008, the Company obtained
an unsecured loan in the amount of $5,000 from a related party. The agreement
provides for repayment of principal and interest accrued at 6% per annum at
October 28, 2011.  At December 31, 2008, the Company had accrued interest
of $53.



On November 3, 2008, the Company obtained
an unsecured loan in the amount of $4,000 from a related party. The agreement
provides for repayment of principal and interest accrued at 6% per annum at
November 3, 2011.  At December 31, 2008, the Company had accrued interest
of $32.



On December 1, 2008, the Company obtained
an unsecured loan in the amount of $3,500 from a corporate officer. The
agreement provides for repayment of principal and interest accrued at 6% per
annum at December 1, 2011.  At December 31, 2008, the Company had accrued
interest of $17.



NOTE 7  CONVERTIBLE DEBT AND BENEFICIAL
CONVERSION



During 2007, the Company issued convertible
notes to unrelated parties for $85,000. According to the terms of the agreement
interest began to accrue on the outstanding principal 60 days after the date of
the note at rate of 6% annually. Full payment of principal and interest was due
June 30, 2007. The notes were convertible into shares of common stock at rate of
$0.35 per share prior to payment in full of principal balance of a note. On July
5, 2007 the holders of these notes converted notes payable into 242,859 shares
of common stock and the Company incurred additional costs of conversion of
$6,235.



- 49 -



---

ANGIOGENEX,
INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2008



In accordance with EITF 00-27, Application
of Issue No. 98-5 to Certain Convertible Instruments, the Company calculated
the value of the warrants and the beneficial conversion feature of the note and
recorded the value as a finance cost. The beneficial conversion expense was
valued and recorded at $54,429.



NOTE 8  ACQUISITION OF ECLIC,
INC.



On December 30, 2005, the Company
cancelled, as part of a plan of merger and recapitalization, approximately
10,000,000 shares of eClics outstanding common stock. This cancellation had the
effect of reducing the 11,515,000 shares of eClic common stock issued and
outstanding immediately prior to the merger to 1,500,000 shares outstanding
after the merger. After the aforementioned cancellation of shares the Company
cancelled the outstanding shares of AngioGenex, Inc. and issued 11,187,000 new
shares of common stock to AngioGenexs shareholders of record in compliance with
a transaction pursuant to Rule 12g-3 of the Securities and Exchange Commission.
 For accounting purposes, the acquisition has been treated as a
recapitalization of AngioGenex, with AngiogGenex as the acquirer (reverse
acquisition). The 1,500,000 outstanding shares of eClic that were not canceled
in the merger were accounted for as the cost of the acquisition. The historical
financial statements prior to December 30, 2005 are those of AngioGenex, while
the legal structure of eClic, Inc. remains in place.   eCLic, Inc. had
no assets or liabilities at the time of the acquisition.



NOTE 9  CAPITAL STOCK



Common Stock



The Company is authorized to issue
70,000,000 shares of $0.001 par value common stock.



During the year ended December 31, 2008 the
Company sold 199,500 shares of common stock for $65,850, net of expenses of
$650. Also the Company issued 50,000 shares of common stock in exchange for
reduction note payable from a related party of $12,500.



During the year ended December 31, 2007,
the Company sold in private placement 169,262 shares of common stock at $0.50
per share for $66,360 in cash, net of expenses of $18,271. The Company also sold
47,000 units for consisting of 2 shares of common stock and 1 warrant to
purchase common stock, for $37,190, net of expenses of $12,210. The warrants
allow the stockholder to purchase 1 share of common stock for $1.00 per share
for the next five years.



The assumptions used to value these
warrants were: risk-free rate of 4.5%; no dividends to be paid; expected life of
warrants is 5 years; and volatility of 100%. The value ascribed to the warrants
attached to the issuances was $16,771.



The Company issued 242,859 shares of common
stock in exchange for convertible notes payable of $85,000 (see Note 7).



The Company issued 200,000 shares as a
compensation for legal services rendered. The shares exchanged for these
services were valued at $0.45 per share and a charge of $90,000 is included with
professional fees expense.



Preferred Stock



The Company is authorized to issue
5,000,000 shares of $0.001 par value preferred stock.  The Company has not
issued any preferred stock.



- 50 -



---

ANGIOGENEX,
INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2008



NOTE 10  STOCK OPTIONS AND
WARRANTS



During 2001, the board of directors and the
stockholders of the Company approved a stock option plan which provides for the
granting of options to purchase up to 2,000,000 shares of common stock, pursuant
to which officers, directors, advisers and consultants are eligible to receive
incentive and/or non-statutory stock options. The options are exercisable for a
period of up to 10 years from date of grant at an exercise price which is not
less than the fair value on date of grant, except that the exercise period of
options granted to a stockholder owning more then 10% of the outstanding capital
stock may not exceed 5 years with the exercise option price not less then 110%
of the fair value of the common stock at date of grant. The options granted vest
between 2 and 5 years. At December 31, 2008, the Company had granted all
2,000,000 options permitted under this plan and of which 300,000 expired in
2008.



On July 13, 2004, the board of directors
and the stockholders of the Company approved a stock option plan which provides
for the granting of options to purchase up to 5,000,000 shares of common stock,
pursuant to which officers, directors, advisers and consultants are eligible to
receive incentive and/or non-statutory stock options. The options are
exercisable for a period of up to 10 years from date of grant at an exercise
price which is not less than the fair value on date of grant, except that the
exercise period of options granted to a stockholder owning more then 10% of the
outstanding capital stock may not exceed 5 years with the exercise option price
not less then 110% of the fair value of the common stock at date of grant. The
options granted vest between 2 and 5 years.  At December 31, 2005, the
Company has granted 90,000 options under this plan.



During the year ended December 31, 2008,
the Company granted 200,000 options to a consultant and 300,000 options to a
director. In accordance with FAS No. 123R, in the year ended December 31, 2008,
the Company recorded expense of $69,862 for vested portion of share-based
compensation relating to the issuance of these stock options.



Stock options activity under the plans is summarized as
follows:

|                             |                         |  |                                
|---------------------------- | ----------------------- |  | -------------------------------
|                             | Number of Stock Options |  | Weighted Average Exercise
Price
|                             |                         |  |                                
|Options at December 31, 2006 | 2,090,000               |  | $0.77                          
|Options issued (2004 Plan)   | -                       |  | -                              
|Options at December 31, 2007 | 2,090,000               |  | $0.77                          



|                                                                    |           |  |      
|------------------------------------------------------------------- | --------- |  | -----
|Options
exercisable at December 31, 2007                            | 2,090,000 |  | $0.77
|                                                                    |           |  |      
|Weighted
average fair value of
options
granted at December 31, 2007 |           |  | $0.25



|                             |                         |  |                                
|---------------------------- | ----------------------- |  | -------------------------------
|                             | Number of Stock Options |  | Weighted Average Exercise
Price
|                             |                         |  |                                
|Options at December 31, 2007 | 2,090,000               |  | $0.77                          
|Options issued (2004 Plan)   | 500,000                 |  | $0.20                          
|Options expired (2001 Plan)  | (300,000)               |  | $1.47                          
|Options at December 31, 2008 | 2,290,000               |  | $0.55                          



|                                                                    |           |  |      
|------------------------------------------------------------------- | --------- |  | -----
|Options
exercisable at December 31, 2008                            | 2,290,000 |  | $0.55
|                                                                    |           |  |      
|Weighted
average fair value of
options
granted at December 31, 2008 |           |  | $0.25



- 51 -



---

ANGIOGENEX,
INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2008





| |  |  | 
| |  |  | 



As of December 31, 2008 4,410,000 options
are available for future grant under 2004 Plan and 300,000 options are available
under 2001 Plan.  A summary of the options outstanding and exercisable as
of December 31, 2008 is as follows:



|                    |           |          |              
|------------------- | --------- | -------- | -------------
|                    |           |          | Weighted     
|                    |           | Weighted | Average      
|                    | Number of | Average  | Remaining    
|                    | Stock     | Exercise | Contractual  
|                    | Options   | Price    | Life in Years
|                    |           |          |              
|Options outstanding | 2,290,000 | $
0.55   | 5.2          
|Options exercisable | 2,290,000 | $
0.55   | 5.2          



The weighted average grant-date fair value
of stock options granted during the year ended December 31, 2008 was $0.14.



Following is a summary of the status of the
Company's nonvested stock options as of December 31, 2008 and the changes during
the year ended December 31, 2008:



|                               |           |           
|------------------------------ | --------- | ----------
|                               |           | Weighted  
|                               | Number of | Average   
|                               | Stock     | Grant-Date
|Nonvested Stock Options        | Options   | Fair Value
|                               |           |           
|Nonvested at January 1, 2008   | 0         | $
0.00    
|Granted                        | 500,000   | $
0.14    
|Vested                         | (500,000) | $
0.14    
|Forfeited                      | 0         | $
0.00    
|                               |           |           
|Nonvested at December 31, 2008 | 0         | $
0.00    



The fair value of each option granted was
estimated on the date of grant using the Black-Scholes option-pricing model with
the following weighted average assumptions:



|                        |        
|----------------------- | -------
|                        | 2008   
|                        |        
|Expected life (years)   | 5 years
|Risk-free interest rate | 2.98%  
|Expected dividend yield | 0%     
|Expected volatility     | 88%    



At December 31, 2008 the Company had
6,799,876 warrants outstanding



- 52 -



---

ANGIOGENEX,
INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2008



Warrants activity is summarized as follows:

|                              |                    |  |                                
|----------------------------- | ------------------ |  | -------------------------------
|                              | Number of Warrants |  | Weighted Average Exercise
Price
|                              |                    |  |                                
|Warrants at December 31, 2006 | 6,752,876          |  | $0.26                          
|Warrants granted              | 47,000             |  | $1.00                          
|Warrants at December 31, 2007 | 6,799,876          |  | $0.18                          



|                                          |           |  |      
|----------------------------------------- | --------- |  | -----
|Warrants
exercisable at December 31, 2007 | 6,799,876 |  | $0.18
|                                          |           |  |      



|                              |                         |  |                                
|----------------------------- | ----------------------- |  | -------------------------------
|                              | Number of Stock Options |  | Weighted Average Exercise
Price
|                              |                         |  |                                
|Warrants at December 31, 2007 | 6,799,876               |  | $0.18                          
|Warrants granted              | -                       |  | -                              
|Warrants at December 31, 2008 | 6,799,876               |  | $0.18                          



|                                          |           |  |      
|----------------------------------------- | --------- |  | -----
|Warrants
exercisable at December 31, 2008 | 6,799,876 |  | $0.18
|                                          |           |  |      



NOTE 11  COMMITMENTS AND
CONTINGENCIES



On August 1, 2001, the Company entered into
an agreement with William Garland, PhD. In exchange for his services as the
Companys vice president and chief operating officer, he will receive a salary
of $5,000 per month.  Additionally, he was to receive options to purchase
5,000 shares of the Companys common stock exercisable at $3.00 each per month.
 The Company granted to Mr. Garland 30,000 options on August 1, 2001 under
this agreement.  Subsequently, the Company and Mr. Garland amended this
agreement eliminating the monthly options but the Company has continued to pay
$5,000 plus expense reimbursements and has also granted to Mr. Garland 440,000
options under the 2001 stock option plan. The agreement was terminated September
30, 2006. However Mr. Garland is still providing services to the Company.



In July 2006, Comparative Biosciences Inc.
(CompBio) , a company that AngioGenex hired to breed and house a colony of its
proprietary ID-Knockout mice, sued the Company claiming approximately $200,000
in unpaid invoices. AngioGenexs response included counter-claims for CompBios
breaches of contract, as well as a number of business torts. On November 6, 2007
the parties agreed to a disposition of the suit under a stipulated judgment and
settlement agreement pursuant to which: CompBio must return the laboratory mice
and all scientific data from the research, CompBio agrees to forego all
intellectual property rights in the mice and in the research, that it
acknowledges belong to AngioGenex, and AngioGenex agreed to pay the CompBio
$55,000 in installments over a 5-year period, plus accumulated interest at 5%
per annum. The stipulated judgment and settlement agreement was filed with the
court by November 15. At December 31, 2008 the Company has made $17,500 payments
to CompBio pursuant to the settlement agreement, and had accrued interest of
$2,406. The Company has not made the required payment for the fourth quarter of
2008, and is in default of this settlement agreement. Under the terms of the
agreement upon receipt of written notification of default from CompBio the
Company has five days to cure. Failure by the Company to cure the default
results in an increase in the settlement amount to $75,000 plus retroactive
interest of 5% on the balance. The Company has not received any notification of
default from CompBio.



- 53 -



---



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



None.



ITEM 9A.  CONTROLS AND PROCEDURES



Evaluation of Disclosure Controls and
Procedures.



Our management,
including our principal executive officer and our principal financial officer,
has evaluated the effectiveness of our disclosure controls and procedures (as
such term is defined in Rules 13a-15(e) and 15d-15(e) of the United States
Securities Exchange Act of 1934, as amended), as of December 31, 2008. As
described below in the Managements Report on Internal Control over Financial
Reporting, management has reported material weaknesses in the internal control
over financial reporting as of December 31, 2008. Based on that evaluation, our
principal executive officer and our principal financial officer have concluded
that our disclosure controls and procedures were not effective as of December
31, 2008 due to the reported material weakness.



Managements Report on Internal Control
over Financial Reporting



Management is
responsible for establishing and maintaining adequate internal control over
financial reporting. Internal control over financial reporting is defined in
Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of
1934, as amended, as a process designed by, or under the supervision of, a
companys principal executive and principal financial officers and effected by a
companys board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles and includes those policies and
procedures that:



| |   |                                                                                                                                                                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | · | Pertain to the maintenance of records
that in reasonable detail accurately and fairly reflect the transactions
and dispositions of the assets of the company;                                                                                                                                                                              
| | · | Provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company;
and
| | · | Provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use
or disposition of the companys assets that could have a material effect
on the financial statements.                                                                                                                               



All internal control
systems, no matter how well designed, have inherent limitations and can provide
only reasonable, not absolute, assurance that the objectives of the control
system are met. Further, the design of a control system must reflect the fact
that there are resource constraints, and the benefits of controls must be
considered relative to their costs. Because of the inherent limitations in all
control systems, no evaluation of controls can provide absolute assurance that
all control issues and instances of fraud, if any, within our company have been
detected. Therefore, even those systems determined to be effective can provide
only reasonable assurance with respect to financial statement preparation and
presentation.



Our
management, with the participation of our Chief Executive Officer and Chief
Financial Officer, assessed the effectiveness of our internal control over
financial reporting as of December 31, 2008. In making this assessment, our
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal Control 
Integrated Framework.



A material weakness is a deficiency, or a
combination of deficiencies, in internal control over financial reporting, such
that there is a reasonable possibility that a material misstatement of our
annual or interim financial statements will not be prevented or detected on a
timely basis.



- 54 -



---



We identified a material
weakness in our internal control over financial reporting as of December 31,
2008 because fundamental elements of an effective control environment were not
present as of December 31, 2008, including a code of conduct or ethics,
independent oversight and review of financial reporting, the financial reporting
processes and procedures and internal control procedures by the Board of
Directors, as we have not established an audit committee and our full board has
not been adequately performing those functions. Other deficiencies, such as
communication breakdowns between the individuals executing transactions and the
individuals accounting for those transactions led to the identification by the
auditors of certain required material adjustments to the financial statements.
In addition, management has not established with appropriate rigor the
procedures for reconciliation between transfer agent and Company records of
shares issued and outstanding, including the actions required upon
identification of inconsistencies or reconciling items between those two sets of
records. Additionally, due to insufficient staffing and the lack of full time
personnel, it was not possible to ensure appropriate segregation of duties
between incompatible functions, and formalized monitoring procedures have not
been established or implemented.



These deficiencies
represent a material weakness in our internal control over financial reporting
given that it results in a reasonable possibility that a material misstatement
to the annual or interim financial statements would not have been prevented or
detected. Based on this assessment and the material weakness described above,
management has concluded that internal control over financial reporting was not
effective as of December 31, 2008.



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



We intend to take the
following steps as soon as practicable to remediate the material weakness we
identified as follows:



| |   |                                                                                                                                                                                                                                                                                       
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | · | We will segregate incompatible
functions using existing personnel where possible or, given sufficient
capital resources, we will hire additional personnel to perform those
functions.                                                                                                
| | · | We will increase the oversight and
review procedures of the board of directors with regard to financial
reporting, financial reporting processes and procedures and internal
control procedures.                                                                                      
| | · | To the extent we can attract outside
directors, we will nominate an audit committee to review and assist the
board with its oversight responsibilities.                                                                                                                               
| | · | We will adopt a code of conduct and
ethics                                                                                                                                                                                                                                            
| | · | We will remedy the deficiencies in
communication between those executing transactions and those who are
responsible for accounting for such transactions by adopting written
procedures and implementing a monitoring mechanism to ensure that
transactions are recorded appropriately
| | · | We will remedy the deficiencies in
reconciliation and disposition of reconciling items related to shares
issued and outstanding.                                                                                                                                                      



Changes in Internal Control Over
Financial Reporting



There has been no change
in our internal control over financial reporting that occurred during our most
recent fiscal quarter that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.



- 55 -



---

PART III



ITEM 10.  DIRECTORS, EXECUTIVE
OFFICERS , PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE
EXCHANGE ACT



The following
table sets forth certain information with respect to each of our directors and
executive officers as of March 24, 2009.



|                 |  |     |  |                                                            |  |                         
|---------------- |  | --- |  | ---------------------------------------------------------- |  | ------------------------
|Name             |  | Age |  | Principal Occupation                                       |  | Served as
Director Since
|Richard Salvador |  | 80  |  | President, Director                                        |  | 1999                    
|William Garland  |  | 62  |  | Chief Executive Officer, Chief Operating Officer,
Director |  | 2007                    
|Martin Murray    |  | 42  |  | Chief Financial Officer, Treasurer, Secretary,
Director    |  | 1999                    
|Michael Strage   |  | 49  |  | Vice President Business Development, Director              |  | 1999                    



William A. Garland, Ph.D.,  Chief Executive Officer and Chief Operating Officer.Dr.
Garland, joined AngioGenex as Chief Operating Officer in July 2001 and has
served as our Chief Executive Officer since June 2008. From 1994 to 2000, Dr.
Garland was Executive Vice President Pharmaceutical Development with Centaur
Pharmaceuticals Incorporated, a Silicon Valley development stage
biopharmaceutical company. At Centaur, he was responsible for all aspects of
pre-clinical drug testing, the design and execution of clinical studies, quality
assurance, quality control, pilot manufacturing, interactions with the FDA and
international drug regulatory authorities along with presentation of Centaurs
development efforts to potential corporate partners and investors. While at
Centaur he progressed three projects from discovery stage to Phase II clinical
testing, and helped manage the growth of Centaur from fewer than a dozen
employees to more than 100 employees in a six-year period. At Centaur, Dr.
Garland also co-invented a compound, CPI-1189, that demonstrated efficacy in two
Phase II clinical trials, and was a key participant in the successful
negotiation of an $80 million corporate alliance with Arcus, Astra ABs
neuroscience company, and the successful negotiation of a $30 million corporate
alliance with Lundbeck A/S. CPI-1189 is currently in Phase III clinical
development as REN-1654 (Renovis Inc.). Dr. Garland was with Hoffmann-La Roche,
Inc. from 1974-1994, most recently as Senior Director and U.S. Head of
International Project Management. During his 20-year tenure at Roche, he managed
groups consisting of as many as 100 scientific and administrative personnel.
Immediately prior to joining AngioGenex, he was Vice President Scientific
Affairs of Atairgin Technologies, Inc. an emerging healthcare technology
company, where he was responsible for all aspects of R&D, quality and
clinical effort associated with the Companys oncology-related diagnostic and
therapeutic efforts. Dr. Garland received a BS in chemistry from the University
of San Francisco and a Ph.D. in medicinal chemistry from the University of
Washington. He has authored or co-authored over 100 scientific publications .



Michael M. Strage, Vice President
Business Development. Mr. Strage has been our VP of Business Development
since 1999. Mr. Strage was a co-founder of Axonyx Inc., a publicly traded
biotechnology company (NASDAQ:TPTX) engaged in the development of drugs to treat
Alzheimer's disease. As a founding Officer and Director he was responsible for
all business and administrative aspects of Axonyx from its inception in 1996 to
its listing on the NASDAQ-NMS in January 2001. As Vice President and Chief
Administrative Officer of Axonyx, Mr. Strage was responsible for negotiating all
of the company's major corporate transactions including the agreements under
which Axonyx first acquired its intellectual property portfolio that includes
the commercial rights to the pre-clinical research and development programs at
New York University School of Medicine and the National Institute on Aging, and
subsequently out-licensed some of those rights through pharmaceutical joint
development agreements, including a major world-wide licensing agreement with
Serono International S.A. (NYSE:SRA) In addition, Mr. Strage directed all
aspects of the administrative operations of Axonyx including finance, where he
participated actively in each of the multiple phases of the company's capital
formation, budgeting, human resources, infrastructure, corporate communications
and investor relations. As Chairman and founder of AngioGenex, Mr. Strage
recruited and assembled the AngioGenex management team and its Scientific
Advisory Board. On the company's behalf, he acquired the exclusive rights to Dr.
Benezra's anti-



- 56 -



---



cancer work by negotiating the Company's Industrial
Research and Commercial licenses with MSKCC. Mr. Strage was responsible for
raising the seed capital used to create the company and that funded the
collaboration with Memorial Sloan Kettering Cancer Center. Prior to joining
Axonyx in 1996, Mr. Strage was an associate at the Los Angeles law firm of
Hancock, Rothert & Bunschoft and prior thereto an assistant district
attorney at the Manhattan District Attorney's office.



Richard A. Salvador, Ph.D., President,
and Cairman of the Board.Dr. Salvador was our Chief Executive Officer,
President and has been a director of our company since 1999 until June 2008 when
Dr. Salvador resigned as our Chief Executive Officer. At that time he became
Chairman of the Board and continues to serve as acting President of the company.
Dr. Salvador was with Hoffmann-La Roche, Inc. from 1970 to 1997, most recently
as Vice-President and Director of International Pre-clinical Development and
Deputy to the President, International Research and Development. The three major
departments reporting to him worldwide were Toxicology and Pathology, Drug
Metabolism, and Pharmaceutical Research and Development. In the U.S., Dr.
Salvador was responsible for approximately 350 personnel and an annual budget in
excess of $60 million. Dr. Salvador was also a member of key international
Hoffman-La Roche (ROG.VX) R&D committees. Dr. Salvador is on the Board of
Directors of Suntory Pharmaceutical Research Laboratories, Cambridge, MA, and
was a Senior Scientific Advisor to Axonyx Inc. which recently merged with
TorreyPines Therapeuitcs (NASDAQ: TPTX), New York, NY. He has served as a
consultant to the biotechnology industry in recent years. Dr. Salvador has a
Ph.D. in Pharmacology from George Washington University, Washington, DC.



Martin F. Murray, CPA, MBA, Secretary,
Chief Financial Officer, Treasurer, Director. Mr. Murray has been our
Secretary, Treasurer, CFO and Director since 1999. Mr. Murray is a founder and
managing partner of Murray and Josephson, CPAs, LLC. He previously held the
position of managing partner at the accounting firm of Leeds & Murray, and
audit manager with Eisner, LLP. His experience includes providing accounting,
auditing, tax, and consulting services for publicly-traded and privately-owned
companies, including: professional organizations, biotechnology companies,
creative artists, and manufacturing firms. Mr. Murray has appeared on television
news as a guest expert and has led a series of Continuing Professional Education
seminars. He is a member of the tax section of the American Institute of
Certified Public Accountants, and the New York State Society of Certified Public
Accountants where he served on the health care committee. He earned his MBA in
taxation from Baruch College where he also earned his BBA in Accountancy.



There are no family
relationships among any of our directors or officers.



Section 16(a) Beneficial Ownership
Reporting Compliance



The members of the Board
of Directors, our executive officers and persons who hold more than 10% of our
outstanding common stock are subject to the reporting requirements of Section
16(a) of the Securities Exchange Act of 1934, as amended, which require them to
file reports with respect to their ownership of our common stock and their
transactions in such common stock. Based solely upon the review of the Forms 3,
4 and 5 furnished to our company and certain representations made to our
company, we believe that during 2006, the following members of the Board of
Directors, our executive officers and person(s) who hold more than 10% of our
outstanding common stock failed to timely file all reports required to be filed
pursuant to Section 16(a) of the Securities Exchange Act of 1934 with respect to
transactions in equity securities of our company.  We believe that in 2008
none of the members of the Board of Directors, our executive officers and
person(s) who hold more than 10% of our outstanding common stock failed to
timely file all reports required to be filed pursuant to Section 16(a) of the
Securities Exchange Act of 1934 with respect to transactions in equity
securities of our company



Code of Ethics



We adopted a code of
ethics that applies to our President and CEO (principal executive officer), and
our Chief Financial Officer (principal accounting officer).



- 57 -



---

Audit Committee and Audit
Committee Financial Expert



We are not a listed
company under SEC rules and are therefore not required to have an audit
committee comprised of independent directors. As we are a development stage
company with minimal revenues from operations, few employees, and relatively
simple financial statements, we have not, at this stage, constituted any board
committees, including an audit committee. Consequently we do not have an audit
committee financial expert who is an outside director. As our business grows and
our financial statements become more complicated, we intend to seek an outside
director who can qualify as an audit committee financial expert.



ITEM 11.  EXECUTIVE COMPENSATION



The following table sets
forth compensation information for services rendered to us by the two
individuals who served as our chief executive officer in 2008 (collectively, our
companys Named Executive Officers) in all capacities, other than as
directors, during each of the prior two fiscal years. Other than as set forth
below, no executive officers salary and bonus exceeded $100,000 for the fiscal
year 2008. The following information includes the dollar value of base salaries,
bonus awards, the number of stock options granted and certain other
compensation, if any, whether paid or deferred. Shares issued in lieu of
compensation are listed in the year the salary was due.



SUMMARY COMPENSATION TABLE



|                                                                             |  |          |      |                |  |               |  |                      |   |                       |  |                                                |  |                                                       |   |                                 |  |               |  |  |   |  |  |   |  |  |   | 
|---------------------------------------------------------------------------- |  | -------- | ---- | -------------- |  | ------------- |  | -------------------- | - | --------------------- |  | ---------------------------------------------- |  | ----------------------------------------------------- | - | ------------------------------- |  | ------------- |  |  | - |  |  | - |  |  | - | 
|Name and
Principal
Position
(a)                                              |  | Year
(b) |      | Salary
($)
(c) |  | Bonus
($)
(d) |  | Stock
Awards
($)
(e) |   | Option Awards
($)
(f) |  | Non-Equity Incentive Plan Compensation
($)
(g) |  | Non-Qualified Deferred Compen-sation
Earnings ($)
(h) |   | All other Compen-sation
($)
(i) |  | Total
($)
(j) | 
|William Garland
CEO, COO, Dir.                                               |  |          | 2008 |                |  | 0             |  |                      | 0 |                       |  | 0                                              |  |                                                       | 0 |                                 |  | 0             |  |  | 0 |  |  | 0 |  |  | 0 | 
|                                                                             |  |          | 2007 |                |  | 0             |  |                      | 0 |                       |  | 0                                              |  |                                                       | 0 |                                 |  | 0             |  |  | 0 |  |  | 0 |  |  | 0 | 
|Richard Salvador
Pres. & former CEO, Dir. Chairman of the Board
of Directors |  |          | 2008 |                |  | 0             |  |                      | 0 |                       |  | 0                                              |  |                                                       | 0 |                                 |  | 0             |  |  | 0 |  |  | 0 |  |  | 0 | 
|                                                                             |  |          | 2007 |                |  | 0             |  |                      | 0 |                       |  | 0                                              |  |                                                       | 0 |                                 |  | 0             |  |  | 0 |  |  | 0 |  |  | 0 | 



A. Narrative Disclosure to Summary Compensation Table



The current CEO, William
Garland and the former CEO Richard Salvador have not entered into a formal
written employment agreements with AngioGenex. They are employed on an at will
basis with equity compensation at the discretion of the uninterested members of
the board of directors.



- 58 -



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B. Outstanding Equity Awards at Fiscal Year End



|         |  |  |                                                                     |  |  |                                                                       |  |  |                                                                                                |  |   |                           |  |  |                        |  |  |                                                             |  |  |                                                          |  |  |                                                                                                         |  |   |                                                                                                                        | 
|-------- |  |  | ------------------------------------------------------------------- |  |  | --------------------------------------------------------------------- |  |  | ---------------------------------------------------------------------------------------------- |  | - | ------------------------- |  |  | ---------------------- |  |  | ----------------------------------------------------------- |  |  | -------------------------------------------------------- |  |  | ------------------------------------------------------------------------------------------------------- |  | - | ---------------------------------------------------------------------------------------------------------------------- | 
|         |  |  | Option Awards                                                       |  |  | Stock Awards                                                          | 
|Name     |  |  | Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable |  |  | Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable |  |  | Equity
Incentive
Plan
Awards
Number of
Securities
Underlying
Unexer cised
Unearned
Options
(#) |  |   | Option
Exercise
Price
($) |  |  | Option
Expiration
Date |  |  | Number
of Shares
or Units of
Stock
That
Have Not
Vested
(#) |  |  | Market
Value of
Shares or
Units
That
Have Not
Vested
($) |  |  | Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested
(#) |  |   | Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares
Units or
Other
Rights
That Have
Not Vested
($) | 
|(a)      |  |  | (b)                                                                 |  |  | (c)                                                                   |  |  | (d)                                                                                            |  |   | (e)                       |  |  | (f)                    |  |  | (g)                                                         |  |  | (h)                                                      |  |  | (i)                                                                                                     |  |   | (j)                                                                                                                    | 
|Garland  |  |  | 30,000                                                              |  |  | -                                                                     |  |  | -                                                                                              |  | $ | 3.00                      |  |  | 7/31/2011              |  |  | -                                                           |  |  | -                                                        |  |  | -                                                                                                       |  | $ | -                                                                                                                      | 
|         |  |  | 200,000                                                             |  |  | -                                                                     |  |  | -                                                                                              |  | $ | 1.00                      |  |  | 12/31/2011             |  |  | -                                                           |  |  | -                                                        |  |  | -                                                                                                       |  | $ | -                                                                                                                      | 
|         |  |  | 240,000                                                             |  |  | -                                                                     |  |  | -                                                                                              |  | $ | 0.01                      |  |  | 7/30/2015              |  |  | -                                                           |  |  | -                                                        |  |  | -                                                                                                       |  | $ | -                                                                                                                      | 
|         |  |  |                                                                     |  |  |                                                                       |  |  |                                                                                                |  |   |                           |  |  |                        |  |  |                                                             |  |  |                                                          |  |  |                                                                                                         |  |   |                                                                                                                        | 
|Salvador |  |  | 90,000                                                              |  |  | -                                                                     |  |  | -                                                                                              |  | $ | 1.50                      |  |  | 5/31/2010              |  |  | -                                                           |  |  | -                                                        |  |  | -                                                                                                       |  | $ | -                                                                                                                      | 
|         |  |  | 200,000                                                             |  |  | -                                                                     |  |  | -                                                                                              |  | $ | 1.00                      |  |  | 1/1/2012               |  |  | -                                                           |  |  | -                                                        |  |  | -                                                                                                       |  | $ | -                                                                                                                      | 
|         |  |  | 120,000                                                             |  |  | -                                                                     |  |  | -                                                                                              |  | $ | 0.01                      |  |  | 7/31/2015              |  |  | -                                                           |  |  | -                                                        |  |  | -                                                                                                       |  | $ | -                                                                                                                      | 



There were no option grants to our Named
Executive Officers in 2008.



D. Compensation of Directors



We did not pay our
directors fees in 2008 and have not paid such fees in the past for attending
scheduled and special meetings of our board of directors. In the future, we may
adopt a policy of paying independent director a fee for their attendance at
board meetings. We do reimburse each director for reasonable travel expenses
related to such   director's attendance at board of directors
meetings.



|       |  |                                     |   |                  |  |                      |  |                                             |   |                                                                             |  |                               |  |           |   |  |  |   |  |  |   | 
|------ |  | ----------------------------------- | - | ---------------- |  | -------------------- |  | ------------------------------------------- | - | --------------------------------------------------------------------------- |  | ----------------------------- |  | --------- | - |  |  | - |  |  | - | 
|Name   |  | Fees Earned   or Paid in
  Cash
($) |   | Stock Awards
($) |  | Option  Awards   ($) |  | Non-Equity
incentive
Plan Com pensation
($) |   | Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($) |  | All other   Compensa tion
($) |  | Total
($) |  
|(a)    |  | (b)                                 |   | (c)              |  | (d)                  |  | (e)                                         |   | (f)                                                                         |  | (g)                           |  | (h)       |  
|Murray |  |                                     | 0 |                  |  | 0                    |  |                                             | 0 |                                                                             |  | 0                             |  |           | 0 |  |  | 0 |  |  | 0 | 
|Strage |  |                                     | 0 |                  |  | 0                    |  |                                             | 0 |                                                                             |  | 0                             |  |           | 0 |  |  | 0 |  |  | 0 | 



Employment Contracts with Executive Officers and
Termination of Employment and Change-in-Control Arrangements



AngioGenex does not have
employment contracts with its Named Executive Officers.



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ITEM 12.  SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT



The following table sets
forth certain information known by us with respect to the beneficial ownership
of our common stock as of March 24, 2009 by (i) each person who is known by us
to own beneficially more than 5% of common stock, (ii) each of our Chief
Executive Officers and our Chief Financial Officer, (iii) each of our directors
and (iv) all of our current executive officers and directors as a group. Except
as otherwise listed below, the address of each person is c/o AngioGenex, Inc.
425 Madison Avenue, Suite 902, New York NY 10017.



The percentage of shares
beneficially owned is based on 21,302,906 shares of common stock outstanding as
of March 24, 2009. Shares of common stock subject to stock options and warrants
that are currently exercisable or exercisable within 60 days of March 24, 2009
are deemed to be outstanding for the purpose of computing the percentage
ownership of that person but are not treated as outstanding for the purpose of
computing the percentage ownership of any other person. Unless indicated below,
the persons and entities named in the table have sole voting and sole investment
power with respect to all shares beneficially owned, subject to community
property laws where applicable.



Information with respect
to beneficial ownership has been furnished by each director, officer or
beneficial owner of 5% or more of our voting Common Stock. Except as noted the
persons named in the table have sole voting and investment power with respect to
all shares of common stock shown as beneficially owned by them. The number of
shares of common stock used to calculate the percentage ownership of each listed
person includes the shares of common stock underlying options or warrants.
Percentage ownership information is based on 21,302,906 shares of Common Stock
outstanding as of March 24, 2009. Percentage information for each person assumes
that no other individual will exercise any warrants and/or options. Unless
otherwise noted, we believe that all persons named in the table have sole voting
and investment power with respect to all the shares beneficially owned by them.



|                                                                                                              |  |                                       |           |                         |  |       |  
|------------------------------------------------------------------------------------------------------------- |  | ------------------------------------- | --------- | ----------------------- |  | ----- | -
|Name and, as Appropriate, Address of Beneficial
Owner (1)                                                     |  | Amount and Nature of
Beneficial Owner |           | Percent of
Common Stock | 
|Michael Strage (2)                                                                                            |  |                                       | 3,075,639 |                         |  | 14.24 | %
|Richard Salvador(3)                                                                                           |  |                                       | 2,288,364 |                         |  | 10.28 | %
|William Garland (4)                                                                                           |  |                                       | 1,265,000 |                         |  | 5.81  | %
|Martin Murray (5)                                                                                             |  |                                       | 189,000   |                         |  | *     |  
|All directors and executive officers (four persons)
as a group                                                |  |                                       |           |                         |  | 30.33 | %
|Atypical BioVentures Fund LLC (6)
c/o Aurora Capital LLC
200 Park Avenue South, Suite 1301
New York, NY 10003 |  |                                       | 3,652,505 |                         |  | 14.64 | %
|* Less than
1%.                                                                                               |  |                                       |           |                         |  |       |  



|    |                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Unless otherwise indicated, the
address of each of the listed beneficial owners identified above is c/o
425 Madison Avenue, Suite 902, New York, New York 10017 .                                                                                                                                                                                                                                               
|(2) | Michael Strage, Chairman, Vice
President. Includes 2,773,014 shares held by Mr. Strage, , 120,000 options
exercisable at $0.01 per share, and warrants to purchase 182,625 shares
exercisable at $0.15 per share.                                                                                                                                                                                               
|(3) | Richard Salvador, President,
Chairman. Includes 1,290,488 shares held by Mr. Salvador, 32,000 shares
held by his wife, a warrant to purchase 8,000 shares at $6.00 per share
held by Dick Salvadors wife, 90,000 options exercisable at $1.50 per
share, 200,000 options exercisable at $1.00 per share and 120,000 options
exercisable at $0.01 per share and 547,876 warrants exercisable at $0.15
per share.



- 60 -



---



|    |                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | William Garland, Chief Executive
Officer, Chief Operating Officer, director. Includes 795,000 shares held
by Mr. Garland, 30,000 options exercisable at $3.00 per share, 200,000
options exercisable at $1.00 per share, 240,000 exercisable at $0.01 per
share.   
|(5) | Martin Murray, Chief Financial
Officer, Secretary, Treasurer, director. Includes 129,000 shares held by
Mr. Murray, 45,000 options exercisable at $1.50 per share, 5,000 options
exercisable at $1.00 per share, and 10,000 options exercisable at $0.01
per share.
|(6) | Atypical BioVentures Fund LLC.
Includes 3,652,505 warrants exercisable at $0.15 per share.                                                                                                                                                                         



Equity Compensation Plan Information



The following table sets forth information
about the common stock available for issuance under compensatory plans and
arrangements as of December 31, 2008.



|                                                          |  |                                                                                              |           |                                                                              |   |                                                                                                                                             |  |  |           | 
|--------------------------------------------------------- |  | -------------------------------------------------------------------------------------------- | --------- | ---------------------------------------------------------------------------- | - | ------------------------------------------------------------------------------------------------------------------------------------------- |  |  | --------- | 
|                                                          |  | (a)                                                                                          |           | (b)                                                                          |   | (c)                                                                                                                                         | 
|Plan Category                                             |  | Number of securities to be issued upon
exercise of outstanding options, warrants and rights. |           | Weighted-average exercise price of
outstanding options, warrants, and rights |   | Number of securities remaining
available for future issuance under equity compensation plans (excluding
securities reflected in column (a)) | 
|Equity compensation plan approved by security
holders (1) |  |                                                                                              | 1,700,000 |                                                                              | $ | 0.65                                                                                                                                        |  |  | 300,000   | 
|Equity compensation plan approved by security
holders (2) |  |                                                                                              | 590,000   |                                                                              | $ | 0.17                                                                                                                                        |  |  | 4,410,000 | 
|Total                                                     |  |                                                                                              | 2,290,000 |                                                                              | $ | 0.55                                                                                                                                        |  |  | 4,710,000 | 



|    |                                                                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The AngioGenex 2000 Stock Option Plan had 2,000,000
shares of common stock reserved for issuance under the Plan under which
the board of directors may grant incentive or non-statutory stock options
to officers, directors, employees, consultants and advisors of AngioGenex.
|(2) | The AngioGenex 2004 Stock Option Plan has 5,000,000
shares of common stock reserved for issuance under the Plan under which
the board of directors may grant incentive or non-statutory stock options
to officers, directors, employees, consultants and advisors of AngioGenex.



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---

ITEM 13.  CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDPENDENCE



Accounting Services



Since its inception,
AngioGenex has employed Murray Josephson, CPAs, LLC to provide outside
bookkeeping, accounting and tax filing services, but not audit services. Martin
Murray, our Chief Financial Officer, Secretary and Treasurer, as well as a
member of the board of directors, is a principal of Murray Josephson, CPAs, LLC.
We owed Martin Murray approximately $101,000 for accounting services as of
December 31, 2008.



Director Independence



Our Board of Directors
has determined that none of its members are currently independent directors as
that term is defined in Rule 4200(a)(15) of the Marketplace Rules of the
National Association of Securities Dealers as all members of the board of
directors are also officers of the company.



ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES



Fees Billed to AngioGenex by Williams
& Webster, P.S. during Fiscal Year 2008.



Audit Fees.Aggregate fees billed for professional services rendered by Williams &
Webster in connection with its audit of AngioGenex financial statements as of
and for the years ended December 31, 2008, and 2007, its reviews of AngioGenex
unaudited condensed consolidated interim financial statements, and for SEC
consultations and filings were $39,480 and $33,467, respectively.



Tax Fees- We
did not pay Williams & Webster, P.S. for professional services for tax
compliance, tax advice and tax planning in 2007 or 2008.



All Other Fees-
We did not incur any other fees and expenses from Williams & Webster, P.S.
for the fiscal years 2007 and 2008 annual audits.



Audit Committee
Pre-Approval.



The Company does not
have a standing audit committee. Therefore, all services provided to the Company
by Williams & Webster, P.S. were pre-approved by the Companys board of
directors. Williams & Webster, P.S. performed all work only with their
permanent full time employees.



- 62 -



---

PART IV



ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT
SCHEDULES



|         |                        
|-------- | -----------------------
|Exhibits | Description of Document



|    |                                                                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1 | Acquisition Agreement and Plan of
Reorganization between AngioGenex, Inc. and eClic, Inc. dated December 1,
2005 (Incorporated by reference to the corresponding exhibit to the Form
8-K previously filed by AngioGenex on December 30, 2005 (File No.
000-26181))



|    |                                                                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1 | Amended Articles of Incorporation
dated December 30, 2005 (Incorporated by reference to exhibit 3.4 to the
Form 8-K previously filed by AngioGenex on December 30, 2005 (File No.
000-26181))



|     |                                                                                                                                                                                                                                                                                
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.2 | Exclusive License Agreement between
AngioGenex, Inc. and Sloan Kettering Institutes for Cancer Research, dated
April 3, 2000. (Incorporated by reference to the corresponding exhibit to
the Form 8-K/A previously filed by AngioGenex on January 9, 2006 (File No.
000-26181))



|     |                                                                  
|---- | -----------------------------------------------------------------
|31.1 | Rule 13a-14(a)/15d-14(a)
Certification of Chief Executive Officer



|     |                                                                  
|---- | -----------------------------------------------------------------
|31.2 | Rule 13a-14(a)/15d-14(a)
Certification of Chief Financial Officer



|     |                            
|---- | ---------------------------
|32.1 | Section 1350
Certifications



- 63 -



---



SIGNATURES



In accordance with
Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.



|                      |                                                        |                     
|--------------------- | ------------------------------------------------------ | --------------------
|Dated: April 10, 2009 | AngioGenex, Inc.                                      
|                      |                                                        |                     
|                      | By:                                                    | /s/ Richard Salvador
|                      | Richard Salvador
President and Chief Executive Officer



| |                                                                                  |                  
| | -------------------------------------------------------------------------------- | -----------------
| |                                                                                  |                  
| |                                                                                  | /s/ Martin Murray
| | Martin Murray
Chief Financial Officer
Principal Financial and Accounting Officer







POWER OF ATTORNEY



KNOW ALL PERSONS BY THESE PRESENTS, that
each person whose signature appears below constitutes and appoints each of
Richard Salvador and Martin Murray as his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Report on Form 10-K, and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.



In accordance with the
Exchange Act, this report has been signed below by the following directors on
behalf of the registrant.



|                     |  |                |  |                        |  |               
|-------------------- |  | -------------- |  | ---------------------- |  | --------------
|/s/ Richard Salvador |  | April 10, 2009 |  | /s/ Michael M. Strage* |  | April 10, 2009
|Richard Salvador     |  | Date           |  | Michael M. Strage      |  | Date          
|                     |  |                |  |                        |  |               
|/s/ Martin Murray    |  | April 10, 2009 |  | /s/ William Garland*   |  | April 10, 2009
|Martin Murray        |  | Date           |  | William Garland        |  | Date          



|     |                                   |  |               
|---- | --------------------------------- |  | --------------
|*By: | /s/ Martin Murray                 |  | April 10, 2009
|     | Martin Murray
As Attorney-in-Fact |  |               





- 64 -