UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the quarterly period ended March 31, 2005
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT
For the transition period from ___________ to ____________.
Commission file number: 0-26807
CYTOGENIX, INC.
(Exact name of small business issuer as specified in its charter)
NEVADA 76-0484097
(State or other jurisdiction of incorporation or organization) (IRS
Employer Identification No.)
3100 Wilcrest, Suite140, Houston, Texas 77042
--------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (713) 789-0070
The number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
As of March 31, 2005, 111,347,880 shares of the issuer's common stock
was outstanding.
Transitional Small Business Disclosure Format (check one):
Yes No X
--- ---
TABLE OF CONTENTS
CYTOGENIX, INC.
FORM 10-Q
INDEX
PART I. FINANCIAL INFORMATION
---------------------
ITEM 1. Financial Statements
Balance Sheets (unaudited) as of March 31, 2005 and December 31, 2004 3
---------------------------------------------------------------------
Statements of Operations (unaudited) for the three months ended March 31, 2005 4
and 2004
Statements of Cash Flows (unaudited) for the three months ended March 31, 2005 5
and 2004
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7
-------------------------------------------------------------------------------------
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 18
ITEM 4. Controls and Procedures 18
PART II. OTHER INFORMATION
-----------------
ITEM 1. Legal Proceedings 19
ITEM 2. Changes in Securities 19
ITEM 6. Exhibits 20
SIGNATURE 21
- ----------
2
CYTOGENIX, INC.
A DEVELOPMENT STAGE COMPANY
See accompanying notes to financial statements
PART I. FINANCIAL INFORMATION
BALANCE SHEET
March 31, December 31,
2005 2004
(unaudited)
------------ ------------
ASSETS
CURRENT ASSETS:
Cash $ 299,333 $ 453,235
------------ ------------
Total current assets 299,333 453,235
------------ ------------
Property and equipment:
Research Fixtures & Equipment 104,635 114,514
Office Furniture & Fixtures 57,759 56,461
Office Equipment 54,087 45,733
------------ ------------
216,481 216,708
Less - accumulated depreciation (150,244) (151,649)
------------ ------------
66,237 65,059
Deposits 6,399 6,399
------------ ------------
Total assets $ 371,969 $ 524,693
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable $ 227,111 $ 237,833
Accrued expenses 356,558 801,920
------------ ------------
Total current liabilities
583,668 1,039,753
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT:
Common stock, $.001 par value; 300,000,000 shares authorized,
111,347,880 and 109,204,339 shares issued and outstanding
at March 31, 2005 and December 31, 2004, respectively 111,348 109,204
Additional paid-in capital 20,518,699 19,530,637
Treasury stock (629,972) (629,972)
Deficit accumulated during the development stage (20,211,774) (19,524,929)
------------ ------------
Total stockholders' deficit (211,699) (515,060)
------------ ------------
Total liabilities and stockholders' deficit 371,969 $ 524,693
============ ============
3
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2005 AND 2004 AND PERIOD
FROM FEBRUARY 10, 1995 (INCEPTION) THROUGH MARCH 31, 2005
(UNAUDTIED)
Inception
2005 2004 Through 2005
------------------ ----------------- -----------------
REVENUES $ - $ - $ 82,575
COST OF REVENUES - - 264,891
------------------ ----------------- -----------------
GROSS MARGIN - - (182,316)
COSTS AND EXPENSES:
Research and development (346,852) (89,800) (6,428,725)
General and administrative (330,780) (283,255) (12,984,438)
Depreciation and amortization (8,845) (9,385) (253,048)
Impairment expense - - (345,588)
Equity in losses of joint venture - - (10,000)
------------------ ----------------- -----------------
LOSS FROM OPERATIONS (686,477) (382,440) (20,204,115)
OTHER INCOME:
Gain on sale of security - - 881
Loss on disposal of property of equipment (368) - (10,173)
Dividend income - - 1,633
------------------ ----------------- -----------------
NET LOSS $ (686,845) $ (382,440) $ (20,211,774)
================== ================= ================
Net loss per share:
Basic and diluted net loss per share $ (.01) $ (.00)
================== =================
Weighed average shares outstanding:
Basic and diluted 109,652,754 98,926,811
================== =================
4
CYTOGENIX, INC.
A DEVELOPMENT STAGE COMPANY
Consolidated Statement of Cash Flows
THREE MONTHS ENDED MARCH 31, 2005 AND 2004 AND PERIOD
FROM FEBRUARY 10, 1995 (INCEPTION) THROUGH MARCH 31, 2005
(UNAUDTIED)
Inception
Through
2005 2004 2005
------------------ ------------------ ------------------
OPERATING ACTIVITIES:
Net loss $ (686,845) $ (382,438) $ (20,211,774)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 8,845 9,385 249,672
Impairment expense - - 345,588
Stock issued for services 11,000 34,651 7,153,477
Stock option expense - - 2,062,191
Loss on disposal of property & equipment 368 - 10,173
Equity in losses of joint venture - - 10,000
Changes in operating assets and liabilities:
Prepaid expenses - (6,029) -
Deposits - - (6,399)
Accounts payable & accrued expenses 86,041 (101,563) 1,388,888
Deposits received on stock purchases
- 162,990 -
------------------ ------------------ ------------------
Net cash used in operating activities (580,591) (283,004) (8,998,184)
------------------ ------------------ ------------------
INVESTING ACTIVITIES:
Purchase of property and equipment (10,391) (7,330) (296,670)
Issue note receivable - - (25,100)
Investment in joint venture - - (10,000)
------------------ ------------------ ------------------
Net cash used in investing activities (10,391) (7,330) (331,770)
------------------ ------------------ ------------------
FINANCING ACTIVITIES:
Proceeds from notes payable - - 250,000
Payments on notes payable - - (250,000)
Treasury shares sold - - 1,290,568
Purchase of treasury shares - - (60,000)
Buyback of Stock Warrants - - (571)
Sale of common stock, net fundraising 437,080 - 7,449,790
Sale of common stock for exercised warrants - 206,000 797,000
Contributions to capital - - 152,500
------------------ ------------------ ------------------
Net cash provided by financing activities 437,080 206,000 9,629,287
------------------ ------------------ ------------------
NET CHANGE IN CASH (153,902) (84,334) 299,333
CASH, beginning of period 453,235 236,962 -
------------------ ------------------ ------------------
CASH, end of period $ 299,333 $ 152,628 $ 299,333
================== ================== ==================
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ - $ - $ -
================== ================== ==================
Income taxes paid $ - $ - $ -
================== ================== ==================
NONCASH TRANSACTIONS:
Common stock issued for debt $ 542,126 $ - $ 805,219
Received treasury stock for note receivable - - 25,100
Common stock issued for patent - - 375,000
5
NOTES TO FINANCIAL STATEMENTS
(UNAUDTIED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of CytoGenix,
Inc. ("CytoGenix") have been prepared in accordance with accounting
principles generally accepted in the United States of America and the
rules of the Securities and Exchange Commission ("SEC"), and should be
read in conjunction with the audited financial statements and notes
thereto contained in CytoGenix's latest annual report filed with the
SEC on Form 10KSB. In the opinion of management, all adjustments,
consisting of normal recurring adjustments, necessary for a fair
presentation of financial position and the results of operations for
the interim periods presented have been reflected herein. The results
of operations for interim periods are not necessarily indicative of the
results to be expected for the full year. Notes to the financial
statements which would substantially duplicate the disclosure contained
in the audited financial statements for fiscal year ending December 31,
2004, as reported in the 10KSB, have been omitted.
NOTE 2 - COMMON STOCK
In the three months ending March 31, 2005, CytoGenix issued 47,701
shares of common stock for services valued at $11,000.
In the three months ending March 31, 2005, CytoGenix issued 729,963
shares of common stock for $542,126 of expenses that had been accrued
as of December 31, 2004.
In March 2005 $437,080 was collected for 1,365,876 shares of common
stock as part of a private placement.
NOTE 3 - LEGAL LIABILITY
WILLIAM B. WALDROFF AND APPLIED VETERINARY GENOMICS, INC. V.
CYTOGENIX, INC.
CytoGenix filed a Declaratory Judgment action in March, 2004, to obtain
a finding of nonliability with respect to two license agreements, one
for shrimp, and one for horses, originally issued in 1998 to William B.
Waldroff. Waldroff and Applied Veterinary Genomics, Inc. ("AVGI"), a
party in interest as a sublicensee of Waldroff's, counterclaimed for
damages, attorneys fees, unrelated torts, and a permanent injunction to
honor the purported licenses. A jury trial was held in February, 2005.
Both Waldroff and AVGI also sued three directors of CytoGenix for
interfering with the licenses. The jury did not assess any damages
against any of the directors or against CytoGenix. The court has
preliminarily entered a judgment ordering CytoGenix to perform
according to the licenses, and for attorney's fees in the amount of
$110,000. Post judgment motions will be filed in the trial court. Based
on the ruling issued by the court, CytoGenix has recorded a liability
of $110,000.
6
CYTOGENIX, INC.
A DEVELOPMENT STAGE COMPANY
PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
IN ACCORDANCE WITH THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995, THE COMPANY NOTES THAT CERTAIN
STATEMENTS IN THIS FORM 10-Q WHICH ARE FORWARD-LOOKING AND WHICH PROVIDE OTHER
THAN HISTORICAL INFORMATION, INVOLVE RISKS AND UNCERTAINTIES THAT MAY IMPACT THE
COMPANY'S RESULTS OF OPERATIONS. THESE FORWARD-LOOKING STATEMENTS INCLUDE, AMONG
OTHERS, STATEMENTS CONCERNING THE COMPANY'S GENERAL BUSINESS STRATEGIES,
FINANCING DECISIONS, AND EXPECTATIONS FOR FUNDING CAPITAL EXPENDITURES AND
OPERATIONS IN THE FUTURE. WHEN USED HEREIN, THE WORDS "BELIEVE," "PLAN,"
"CONTINUE," "HOPE," "ESTIMATE," "PROJECT," "INTEND," "EXPECT," AND SIMILAR
EXPRESSIONS ARE INTENDED TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS. ALTHOUGH
THE COMPANY BELIEVES THAT THE EXPECTATIONS REFLECTED IN SUCH FORWARD-LOOKING
STATEMENTS ARE BASED ON REASONABLE ASSUMPTIONS, NO STATEMENTS CONTAINED IN THIS
FORM 10-Q SHOULD BE RELIED UPON AS PREDICTIONS OF FUTURE EVENTS. SUCH STATEMENTS
ARE NECESSARILY DEPENDENT ON ASSUMPTIONS, DATA OR METHODS THAT MAY BE INCORRECT
OR IMPRECISE AND MAY BE INCAPABLE OF BEING REALIZED. THE RISKS AND UNCERTAINTIES
INHERENT IN THESE FORWARD-LOOKING STATEMENTS COULD CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THOSE EXPRESSED IN OR IMPLIED BY THESE STATEMENTS.
READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THE
FORWARD-LOOKING STATEMENTS CONTAINED HEREIN, WHICH SPEAK ONLY AS OF THE DATE
HEREOF. THE INFORMATION CONTAINED IN THIS FORM 10-Q IS BELIEVED BY THE COMPANY
TO BE ACCURATE AS OF THE DATE HEREOF. CHANGES MAY OCCUR AFTER THAT DATE, AND THE
COMPANY WILL NOT UPDATE THAT INFORMATION EXCEPT AS REQUIRED BY LAW IN THE NORMAL
COURSE OF ITS PUBLIC DISCLOSURE PRACTICES.
IMPORTANT RISK FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THE EXPECTATIONS REFLECTED IN ANY FORWARD-LOOKING STATEMENT
HEREIN INCLUDE AMONG OTHER THINGS: (1) THE ABILITY OF THE COMPANY TO QUICKLY
PENETRATE THE MARKET WITH ITS CURRENT THERAPEUTIC PRODUCTS AGAINST LARGER,
WELL-FINANCED COMPETITORS WITHIN THE MARKETPLACE; (2) THE ABILITY OF THE COMPANY
TO GENERATE REVENUES IS SUBSTANTIALLY DEPENDENT UPON CONTINUED RESEARCH AND
DEVELOPMENT FOR, AND FDA APPROVAL OF, THERAPEUTIC PRODUCTS; (3) THE ABILITY OF
THE COMPANY TO ATTRACT AND RETAIN KEY OFFICERS, KNOWLEDGEABLE SALES AND
MARKETING PERSONNEL AND HIGHLY TRAINED TECHNICAL PERSONNEL; (4) THE ABILITY OF
THE COMPANY TO OBTAIN ADDITIONAL FINANCING FROM PUBLIC AND PRIVATE EQUITY
MARKETS TO FUND OPERATIONS AND FUTURE GROWTH; AND (5) THE ABILITY OF THE COMPANY
TO GENERATE REVENUES TO COVER OPERATING LOSSES AND POSITION THE COMPANY TO
ACHIEVE POSITIVE CASH FLOW.
7
The Company has budgeted approximately $4,100,000 for operations in
fiscal year 2005, of which approximately $1,300,000 has been allocated for
general and administrative costs and $1,800,000 for research and development and
$1,000,000 for plant facilities. We will rely on equity financing to satisfy its
working capital requirements, and has as of March 31, 2005 $299,333 of cash on
hand for fiscal year 2005. Of the $1,800,000 budgeted for research and
development expenses, the Company anticipates $1,600,000 will be utilized for
pre-clinical development.
There are currently over 800 U.S. patents for Antisense molecules with
therapeutic potential, each of which is a prospective licensee for the Company.
The Company anticipates entering into licenses for revenues upon successful
completion of phase I/II FDA clinical studies of its pre-clinical product
candidates.
The Company's ability to continue operations through December 31, 2005
depends on its success in obtaining equity financing in an amount sufficient to
support its operations through that date. There is substantial doubt that the
Company will be able to generate sufficient revenues or be able to raise
adequate capital to remain a going concern through December 31, 2005. Based on
historical yearly financial requirements, operating capital of approximately
$4.1 million will be needed for each of the calendar years 2005 and 2006.
The Company expects its sources of revenue for the next several years
to consist primarily of payments under future product development joint ventures
and of licensing agreements as well as possible royalties. The process of
developing the Company's products will require significant additional research
and development, preclinical testing and clinical trials, as well as regulatory
approvals. These activities, together with the Company's general and
administrative expenses, are expected to result in operating losses for at least
two more years. The Company will not receive product revenue from therapeutic
products unless it completes clinical trials and successfully commercializes or
arranges for the commercialization of one or more products, the accomplishment
of which no assurance can be given.
CytoGenix has begun animal testing of its first DNA drug product
candidate. The topical cream to be evaluated will have applications against
genital herpes (HSV-2) and labial herpes or cold sores (HSV-1). The HSV virus is
known to be highly evolved and its genome contains instructions for several
phases of viral activity including infection, replication, production, and
latency. CytoGenix proprietary gene regulation technology is being applied to
inhibit key genes that control one or more of these functions, which are
critical for the Herpes virus survival in the body.
During the past few months, the Company has continued to refine its
course of developing applications for its core technology. Most significant is
the pre-clinical program for an anti-viral HSV topical preparation. We have
teamed-up with a group of leading herpes and STD investigators at a large
academic medical center to conduct a comprehensive cell and animal study program
designed to yield safety and efficacy data in preparation for an IND submission
planned for December 2005 and subsequent human trials.
8
The Genomics field has expanded the number of potential drug targets to
several thousand. The CytoGenix proprietary gene down-regulation system is a
powerful tool in confirming gene target function. In July 2002, we inaugurated a
service geared towards assisting pharmaceutical and biotech companies improve
drug discovery efficiency. In addition to our work on in-house targets, we are
conducting a pilot studies for several companies. For a fixed fee, we will
knockdown a gene in a cell system. This will confirm the gene's relevance to the
disease of interest. Those genes found to be highly disease-related become
targets for new drug or molecular therapies.
CytoGenix is confident about the Company's technology's ability to
inhibit these genes. This six to nine month program includes extensive
toxicology and efficacy studies in various model animals.
The Company is subject to risks common to biopharmaceutical companies,
including risks inherent in its research and development efforts and clinical
trials, reliance on collaborative partners, enforcement of patent and
proprietary rights, the need for future capital, potential competition and
uncertainty in obtaining required regulatory approval. In order for a product to
be commercialized, it will be necessary for the Company and its collaborators to
conduct pre-clinical tests and clinical trials, demonstrate efficacy and safety
of the Company's product candidates, obtain regulatory clearances and enter into
distribution and marketing arrangements either directly or through sublicenses.
From the Company's inception through the date of this document, the major role
of management has been to obtain sufficient funding for required research,
monitoring research progress and developing and licensing intellectual property.
The Company expects to incur losses for the foreseeable future due to
the ongoing activities of the Company to develop new products through research
and development and to develop joint ventures and licensing agreements with
third parties. The Company expects its existing operations to continue to result
in negative cash flow and working capital deficiencies that will require the
Company to continue to obtain additional capital. There can be no assurance that
the necessary financing will be available to the Company or, if available, that
the same will be on terms satisfactory or favorable to it. It is possible that
additional equity financing will be highly dilutive to existing shareholders.
The Company is currently operating at a loss and expects to continue to
depend on cash generated from the sale of debt and equity securities to fund its
operating deficit. There can be no assurance that the Company will be able to
generate sufficient revenues to meet its operating cash and growth needs or that
any equity or debt funding will be available or at terms acceptable to the
Company in the future to enable it to continue operating in its current form.
CytoGenix, Inc. ("CytoGenix" or "the Company") is a biopharmaceutical
company whose primary focus is the development and commercialization of its
proprietary technology for identifying and silencing disease causing genes. The
Company's technology includes gene silencing techniques applicable to genes from
pathogenic organisms or selected genes from a host to prevent the expression of
harmful proteins, thereby preventing or ameliorating disease. The Company also
has developed a novel process to produce cell free, plasmid DNA for use in its
own products and for sale to the biopharmaceutical market. The Company seeks to
generate revenues and improve the health and well-being of humans, animals and
plants by utilizing its technology to produce molecular therapies. In addition
to development and commercialization of therapeutic compounds, the Company seeks
to sell and/or license its technology to biotechnology companies seeking
determination of specific genes' function and purpose and to consumers of
plasmid DNA.
9
The Company was formed in 1995 as a biomedical research and development
company. The original name of the Company was Cryogenic Solutions, Inc., until
the Company changed its name to CytoGenix, Inc. in January 2000. Equity funding
has been the only source of operational, research and commercialization working
capital since the Company's inception. Since our inception in 1995, we have
dedicated ourselves to engineering DNA-based molecules for therapeutic and drug
target identification purposes. Our expertise in nucleic acid technology enables
us to focus on the development of new types of nucleic acid-based therapeutics
based on the ability to express single stranded DNA inside cells of living
organisms or to induce synthetic DNA mimetic constructs into target cells to
silence selected genes.
GENE EXPRESSION AND HUMAN DISEASE
Widely published scientific studies conducted over the last twenty
years by leading universities, government research laboratories such as the
National Institutes of Health and the National Cancer Institute and private
research laboratories have established that most diseases are the result of
malfunctioning genes in an organism's genome, or the activities of genes from
pathogens such as viruses, bacteria or funguses . This genetic activity causes
the production of harmful proteins that lead to the symptoms and destructive
results of disease. Examples of diseases caused by the production of such
harmful proteins include cancer, herpes, sepsis (blood poisoning) and a host of
others. To produce a protein, a cell first makes a positive copy of the DNA code
containing the information necessary to produce the protein. This messenger RNA
(mRNA) is called the "sense" molecule. This message-carrying molecule then moves
to another part of the cell where it participates in the assembly of the
biochemical components to produce proteins.
In many instances it is possible to inhibit the production of these
harmful proteins by introducing or producing small molecules of specific genetic
material into the cells themselves. Fortunately, this genetic activity can be
interrupted and controlled at three levels with the introduction of a specific
sequence of ssDNA into the cells; at the level of the genome itself, interfering
with the messenger RNA (mRNA) produced by the genome leading to the production
of the protein for which the mRNA is encoded and at the protein level where a
single strand of DNA may be made that will bind with the protein and disable it.
CytoGenix Gene Silencing Technology
CytoGenix owns patented intracellular expression system technology
(CYGXes(TM)) to produce any desired sequence-specific, ssDNA molecules (ODN) in
individual cells for the purpose of triplex, antisense, catalytic DNA, and
aptamer applications.
1. Triplex: As mRNA is transcribed and the DNA strands are still
separated, a single strand of complementary DNA is inserted into
the gap forming a triple helix (triplex) structure, thus
preventing the future production of mRNA from that segment.
10
2. Antisense: Messenger RNA is intercepted en route by a
complementary ssDNA sequence that binds to and results in the
destruction of the mRNA by enzymes within the cell, thus
preventing the mRNA from producing the protein in question.
3. Catalytic DNA: Similar to antisense, a ssDNA sequence containing
sequence regions that bind to the mRNA, but also contains a unique
sequence region that acts to cut and destroy the mRNA, thus
preventing it from producing the protein in question.
4. Aptamer: The ssDNA binds to the protein itself in the cell and
causes the protein to become inactivated or dysfunctional.
The key to success with these genetic interventions is to insure that
sufficient quantities of the ssDNA molecules ultimately are produced in targeted
cells or induced from external sources. CytoGenix has invented what functions as
a tiny biological "factory" that, after introduction into the cell, actually
produces many copies of specific ssDNA molecules in the cell. The business of
CytoGenix is to refine this technology and apply it to the delivery of various
patented DNA molecules for the development of effective therapeutic drugs.
DEVELOPMENT TO DATE (RESEARCH AND DEVELOPMENT)
The ssDNA expression vector technology originated with the work of Dr.
Charles Conrad which he developed while at InGene, Inc. This breakthrough
technology was originally protected by issued United States Patent No. 6,054,299
entitled, "Methods and Compositions for Producing Single-stranded cloned DNA in
eukaryotic cells." In 1999, CytoGenix purchased the rights to Dr. Conrad's
patent as well as other proprietary information from InGene, and has since
instituted a broad research and development program to advance this single
stranded DNA expression technology. Shortly after acquisition of the `299
patent, worldwide protection was pursued by filing two applications under the
Patent Cooperation Treaty (PCT) entitled, "Enzymatic Synthesis of ssDNA" (World
Publication No. WO00/22113), and "Production of ssDNA in vivo" (World
Publication No. WO00/22114). Applications to protect subsequent improvements and
therapeutic applications of this technology have since been filed to expand the
protection of this technology in both the US and foreign markets. In addition to
the original issued patent, Cytogenix currently holds twelve pending US
applications, and twenty-seven pending national applications stemming from six
PCT applications. This assertive approach to protection of the Company's
technology has enabled CytoGenix to expand and refine the development of
therapeutics for human, animal and agricultural use. The total of the issued
patent and pending United States and foreign applications is forty-five.
These patents are important to the Company because they help form the
basis of the technology needed for the production of the Company's technology
and other products. The technology has been proven in numerous laboratory and
animal experiments and has been widely published as set forth below.
It has been reported in the scientific literature, such as in the
Reuters Business Insight 2000 publication, Antisense Therapy: Technical Aspects
and Commercial Opportunities by Prof. Dr. K.K. Jain M.D. that other Antisense
11
molecule delivery methods have failed to provide sufficient quantities to be
therapeutically effective except in limited applications. Laboratory cell
culture studies have demonstrated that the Company's ssDNA expression vector can
adequately deliver sequence specific DNA molecules in sufficient quantities in
virtually all cell types, thereby overcoming many of the problems expressed in
the literature. The Company's technology is not limited to only antisense
applications, but can target and enzymatically cleave target mRNA using DNA
enzyme formulations. The technology can also be used to generate triplex forming
oligonucleotides that bind to specific sites in the genome itself to
down-regulate expression by the gene at that site, generate ssDNA that will bind
to specific, targeted proteins to neutralize them and competitively inhibit
genetic expression/transcription of targeted genes. The Company has extended the
results achieved in cell cultures to cells in live animals.
The Genomics field has vastly expanded the number of potential drug
targets. The Company has utilized its ssDNA expression technology to develop a
library screening technique for gene target identification and validation. The
CytoGenix proprietary gene down-regulation system is a powerful tool in
confirming gene target function. The screening library technique enables
efficient testing of multiple oligonucleotide sequences with the advantage that
when a sequence which silences a targeted gene is identified, the construct for
introducing the identified sequence in cellular and animal experiments is
readily produced. Use of the screening library has led to discovery of sequences
that have been useful in several of the Company's products under development.
The Company has developed a separate technology against bacteria using
mimetic oligonucleotides as sequences to silence targeted bacterial genes.
Targeted genes include those necessary for the bacteria's survival, ability to
reproduce and/or to express various toxins.
The Company has also developed a novel technique for producing cell
free plasmid DNA thus bypassing the fermentation process. The cell free
synthesis of plasmid DNA has numerous advantages: CytoGenix, synthetic DNA
(SynDNA(TM)) is free of the endotoxins, bacterial DNA, RNA and proteins that
must be laboriously removed in the fermentation process using live bacteria.
More importantly, synthetic DNA can be produced more rapidly and less
expensively than in the traditional fermentation method.
In July 2002, the Company inaugurated a service geared towards
assisting pharmaceutical and biotech companies improve drug discovery
efficiency. In addition to our work on in-house targets, we are conducting pilot
studies for several companies. For a fixed fee, we will knockdown a gene in a
cell system. This will confirm the gene's relevance to the disease of interest.
Those genes found to be highly disease-related become targets for new drug or
molecular therapies.
Using its expanding technological base, the Company is seeking to
develop drugs that address significant and unmet medical needs. The Company is
conducting research and/or preclinical development with product candidates in
the following areas: Infectious Disease (Anti-virals & Anti-bacterials),
Inflammation and Cancer.
PRODUCTS UNDER DEVELOPMENT INCLUDE:
INFECTIOUS DISEASE PROGRAM
CY301 (SIMPLIVIR(TM)) anti-herpes topical addresses the needs of 70
million infected Americans; today's marginally effective products have revenues
12
in excess of $1 billion. Indications include prophylactic and neonatal
applications. Our proprietary plasmid DNA sequences turn-off the HSV ICP4 and
ICP47 genes. Found in HSV-1, -2 and Herpes Zoster, the ICP4 gene is critical for
the replication of the virus in the host cell. The ICP47 gene produces a protein
that assists the virus in interfering with a host's immune system in recognizing
the virus and eliminating it. Pre-clinical in vitro studies have shown a
100-fold reduction in HSV viral load in test cells containing the company's
proprietary plasmid DNA coded with an ICP4 knockdown sequence. Mouse trials were
initiated in August, 2003 and are continuing. Pre-clinical toxicology studies
are being designed and will enable the filing of an Investigational New Drug
(IND) application with the Food & Drug Administration (FDA).
CY401 targets multi-drug resistant bacteria including
methicillin-resistant staphylococcus aureus (MRSA). Recently, MRSA strains that
had previously been confined to hospitals are now appearing in the community.
Clinicians are encountering difficulty in treating MRSA infections, and CY401 is
the lead product in a new class of antibacterial compounds. Studies conducted in
cell culture indicate that CY401 has potent killing capability even against the
most resistant bacterial pathogens such as MRSA. Animal testing has confirmed
this activity and CytoGenix is preparing to conduct the required safety and
toxicology studies to support the filing of an IND with a target filing date in
the first quarter of 2006.
CY403 specifically targets only the staphylococcus species.
INFLAMMATORY DISEASE PROGRAM
CY303 is a topical anti-inflammatory product that blocks the activity
of an adhesion molecule known as intercellular adhesion molecule or ICAM-1. The
initial indication for this topical anti-inflammatory product is for use in
moderate to severe psoriasis. Other indications where CY303 could be
therapeutically beneficial include contact dermatitis, acne, decubitus, rosacea
& joint swelling. Studies to test the ability of CY303 to inhibit the expression
of ICAM-1 are ongoing and assuming success, CY303 will be the third IND
application for CytoGenix.
CANCER PROGRAM
Investigators have used the company's ssDNA expression vector
technology to knockdown cancer genes as part of projects supported by the
National Institutes of Health SBIR program. Some of this work is now progressed
to the level of preclinical studies and success in these studies will allow
progression to clinical applications.
Aerosol Delivery of Anti Metastatic Tumors in Lungs
"Metastatic tumors in the lungs are malignancies (cancers) that
developed at other sites and spread via the blood stream to the lungs. Common
tumors that metastasize to the lungs include breast cancer, colon cancer,
prostate cancer, sarcoma, bladder cancer, neuroblastoma, and Wilm's tumor.
However, almost any cancer has the capacity to spread to the lungs." Information
from MedLinePLus at http://www.nlm.nih.gov/medlineplus/ency/article/000097.htm.
The Company has received a federal government grant from the National
Institutes of Health (the National Cancer Institute) to support the Company's
13
work with a researcher at a major medical school who is using the company's
ssDNA expression vector with a propietary aerosol delivery system against a
cancer gene common to metatastic tumor cells.
Anti- Solid Tumor Gene Therapy
The Company has entered into an agreement with scientists at a
university gene therapy center for preclinical experiments using the company's
ssDNA expression vector technology to silence a gene that has been shown to
cause malignant transformation of tumor cells.
The combination of a proprietary delivery technology and CytoGenix'
gene silencing technology has great potential for treating malignancies
particularly in breast, head, neck, and prostate tumors.
NUCLEIC ACID DELIVERY TECHNOLOGY
DNA delivery into cells is a rapidly developing area in gene therapy
and biotechnology. Viral methods of DNA delivery are well-characterized and
efficient, but little is known about the toxicity and immunogenecity of viral
vectors. As a result, the company is continuing investigation of viral vectors
but concentrating its efforts on non-viral, transfection methods of DNA
delivery.
The Company is investigating targeted delivery to using synthetic DNA
delivery systems containing histidine-rich peptides and polypeptides and
self-assembled delivery systems based on cationic lipids and polymers.
SYNTHETIC DNA PROCESS
Scientists at CytoGenix have developed a novel method for producing
large amounts of high quality therapeutic circular DNA with significant
reductions in residual contaminants compared to traditional fermentation
methods. Specifically, we have identified and optimized a method for in vitro
DNA synthesis and amplification for the production of GMP drug substances.
Cell-free amplification of c-DNA has many important benefits beginning
with the size and composition of the plasmid. Under this system, there is no
need for bacterial replication genes or selection markers such as antibiotic
resistant genes. In most cases, this will reduce the size and weight of the
therapeutic c-DNA by at least 3,000 base pairs or a molecular weight of
approximately 2,000 kilo Daltons. The total absence of bacteria and growth media
assures that there is no need to employ mechanical or chemical purification
methods to extract cell or animal proteins, RNA, genomic DNA and backbone
molecules. This feature allows the designer more control of coding for
non-specific and specific immune responses.
Greater biological activity
Our experiments have shown that the biological response to c-DNAs with
no vector backbone is approximately one and one-half times higher than
traditional plasmids. Other investigators have reported greater activity levels
of in vivo studies using "DNA mini circles". At the molecular level, 100ng of
traditional plasmid DNA is equal to 60ng of bacteria-free c-DNA. This may
explain the result of our transfection experiments and suggest that less in
14
vitro synthesized DNA may be required to generate the same biological effect as
its plasmid counterpart. In terms of cost, this would translate in substantial
savings.
Low risk, low cost and fast cycle time
Our novel process is bench-scale and requires little equipment, space
or human intervention in comparison to bioprocess manufacturing facilities. No
cell banks are needed and no yield optimization steps that can add weeks or
months to the production process. This process lends itself to liquid-handling
automation and one technician can synthesize gram quantities in a matter of days
working in custom manufacturing suites. The capital costs for physical plant and
on-going fixed and variable operating expenses are a fraction of the costs of
large-scale bioprocess methods. We believe that this synthetic process will be
more consistent, yield material of higher purity, and will enable delivery of
higher concentrations of API if needed.
Improved regulatory profile
Benefits provided by the cell-free synthesis from a Regulatory Agency
review and compliance perspective are significant. By beginning with a
well-characterized synthetic master construct, there is no need for cell bank
systems (master or working cell banks), thus reducing the risk and amount of
documentation, space and cost. Similarly, product cGMP manufacturing procedures
detailing methods for cell collection, processing and culture conditions would
no longer be necessary and would substantially reduce QA/QC and compliance
overhead costs.
Cytogenix is carrying out a multi-pronged strategy with the objective
of commercializing this technology within the next year. The following briefly
describes our plans:
o PROCESS OPTIMIZATION AND SCALE-UP, continued experimentation to
achieve yield optimization, reduced reagent usage and reduced costs.
Manufacture milligram quantities consistently, conduct several animal
studies with various plasmids to verify bioactivity equal to or
greater than plasmids produced via traditional methods. Scale-up to
produce gram quantities.
o DEVELOP REAGENT SUPPLIERS AND SOURCING, establish relationships with
manufacturers of enzymes. Develop quality parameters.
o CONSTRUCT CGMP PRODUCTION SUITE, build and equip a side-by-side
manufacturing suite for simultaneous production of batches cGMP pDNA.
o BUSINESS DEVELOPMENT, we are currently evaluating options for industry
partnership for continued development of the process including
contract manufacturing
All primary research and development at CytoGenix is conducted in the
on-site laboratory located adjacent to the executive offices at the same
address. The Company's primary research and development experiments are being
conducted in human lung cancer cells (A549 cells) and human liver cells (HepG2
cells) to determine the expression levels of single-stranded catalytic DNA and
single-stranded Antisense DNA targeting c-raf kinase mRNA transcripts, bcl-2mRNA
transcripts, and mouse double minute oncogene 2 (MDM2) MRNA transcripts
The Company is currently supporting two (2) Sponsored Research Agreements (SRA):
15
Dr. Cy Stein's lab at Albert Einstein College of Medicine is using
Cytogenix's proprietary gene silencing DNA technology against a gene
that is expressed in melanoma cells that produces a protein known to
counteract the effect of several chemotherapeutic agents in difficult
to treat cancers.
Dr. Charles Densmore's lab at Baylor College of Medicine is conducting
animal trials to determine the effect of CytoGenix's gene silencing
technology on cancer in the lungs of mice using aerosol gene delivery
system.
Other research is contemplated to explore various plasmid delivery systems.
Yin Chen, the Company's Vice President of Research and Development, was
invited to give presentation at 1) the 10th International Conference on Gene
Therapy in Cancer held from December 13 to 15, 2001 in San Diego, CA; 2) 3rd
Annual Conference: RNA in Drug Development - RNA as Tool and Target, San Diego,
CA, November 10-13, 2003 and 3) A Novel Single-Stranded DNA Expression Vector.
Louisiana at the Crossroads: Moving Biotechnology from Research to
Commercialization, Shreveport, LA, June 24, 2004.
The first phase of a Small Business Technology Transfer Program (STTR)
Grant entitled, "ssDNA Expression of Triplex-Forming Oligonucleotides" was
approved for funding by the National Institute of Child Health/Human Development
(NICHD) of the National Institutes of Health and has been completed.
The second SBIR grant entitled, "PEI aerosol delivery of ssDNA
expression vector" was awarded by the National Cancer Institute, NIH in 2004.
The Company and its cooperating university scientists have published
a number of scientific papers and presented at scientific meetings. These
publications include:
1. Tan, X. & Chen, Y., A novel genomic approach identifies bacterial
DNA-dependent RNA polymerase as the target of an antibacterial
oligodeoxynucleotide, RBL-1 Biochemistry, 2005 (in press).
2. Tan, X., Actor, J.K., & Chen, Y. PNA antisense oligomer as a
therapeutic strategy against bacterial infection: proof of principle
using mouse peritonitis model, Antimicrobial Agent and Chemotherapy,
(submitted), 2005.
3. Tan, X, & Chen, Y. Discovery of novel antibiotics using cell-based
screening (Review), Current Drug Discovery, pp. 21-23, April, 2004.
4. Tan, X., Knesha, R., Margolin, W. and Chen, Y. DNA enzyme generated by
a novel single-stranded DNA expression vector inhibits expression of
the essential bacterial cell division gene ftsZ, Biochemistry, 43:
1111-1117, 2004.
5. McMicken, H., Bates, P. and Chen, Y. Antiproliferative activity of
G-quartet-containing oligonucleotides generated by a novel
single-stranded DNA expression system, Cancer Gene Therapy,
10(12):867-869, 2003.
16
6. Chen, Y. and McMicken, H. Intracellular production of DNA enzyme by a
novel single-stranded DNA expression vector, Gene Therapy,
10:1776-1780, 2003.
7. Chen, Y. , Ji, Y., and Conrad, C. Expression of single-stranded DNA in
mammalian cells, Biotechniques, 34:167-171, 2003.
8. Chen, Y., Novel Technologies for target validation, Genetic
Engineering News, 23(11):7-9, 2003.
9. Chen, Y. A novel single-stranded DNA (ssDNA) expression vector
(Review), Expert Opinion on Biological Therapy, 2:735-740, 2002.
10. Chen, Y. Meeting highlights, 10th International conference on gene
therapy of cancer, Expert Opinion on Biological Therapy, 2:443-445,
2002.
11. Chen, Y., Growth of oligo-based drugs, Genomics & Proteomics, October,
2002.
12. Datta, H., and Glazer, P. Intracelullar generation of single-stranded
DNA for chromosomal triplex formation and induced recombination,
Nucleic Acid Research, 29:5140-5147, 2001. A marvel of biochemical
engineering means cells can produce DNA enzyme to attach cancer, New
Scientist, January, 2001.
13. Chen, Y. , Ji, Y., Roxby, R., and Conrad, C. In vivo expression of
single-stranded DNA in mammalian cells with DNA enzyme sequences
targeted to c-raf, Antisense & Nucleic Acid Drug Development, 10:
415-422, 2000.
OUR BUSINESS STRATEGY
The goal and the focus of the Company are to leverage its proprietary
technology to maximize investor value. The Company is developing skin creams
that are safer and more effective than systemic drugs (pills) for these
diseases. Upon successful completion of Phase I/II clinical trials, the Company
intends to seek distribution agreements with domestic and foreign pharmaceutical
companies.
o We intend to independently develop oligonucleotide mediated
therapeutic applications in several disease areas.
o We will pursue partnerships with other pharmaceutical or biotechnology
companies to develop DNA expression-based therapeutics.
o We will seek to maintain and expand our patent portfolio and
proprietary technology. We own twelve (12) issued or pending patents
relating to nucleic acid technology, gene identification and gene
silencing techniques. There are also thirty-three (33) foreign
counterparts. We aggressively pursue patent protection to maintain
worldwide rights relating to the development, manufacture and sale of
oligodeoxynucleotide mediated therapeutics and gene target validation.
o We intend to leverage our oligonucleotide expertise through licensing,
process development and pilot manufacturing. We believe that we have
established one of the leading nucleic acid chemistry groups that can
provide medicinal chemistry, process development and manufacturing to
others in need of this expertise. We believe that we will be able to
17
capitalize on our continuing investment in oligonucleotide and nucleic
acid technology by entering into licensing, process development and
pilot manufacturing arrangements with collaborators to generate
revenues, while retaining this capability for our own drug
development.
RESULTS OF OPERATION
Three months Ended March 31, 2005, and 2004
Research and development expenses were $347,000 for the three months
ended March 31, 2005 and $90,000 for the same period in 2004. The increase is
primarily due to the increase in research staff and the acceleration in research
and product development.
General and Administrative expenses were $331,000 for the three months
ended March 31, 2004 and $283,000 for the same period in 2004. The increase is
primarily due to increased in legal fees associated with the Waldroff legal
proceedings.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company holds no financial instruments that are sensitive to changes in
interest rates. As of March 31, 2005, we held no investments other than amounts
held in our cash operations accounts. We are not subject to any other material
market risks.
ITEM 4. CONTROLS AND PROCEEDURES
CONCLUSION REGARDING THE EFFECTIVENESS OF DISCLOSURE CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management,
including our principal executive officer and principal financial officer, we
conducted an evaluation of our disclosure controls and procedures, as such term
is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of
1934, as amended, or the Exchange Act, as of the end of the period covered by
this report. Based on this evaluation, our principal executive officer and
principal financial officer concluded that our disclosure controls and
procedures were effective as of March 31, 2005.
CHANGES IN INTERNAL CONTROLS
There has been no change in our internal control over financial
reporting during the three months ended March 31, 2005 that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
18
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
PHANUEL PURSUITS, LLC V. CYTOGENIX, INC.
Phanuel Pursuits, LLC had entered into Option Agreements pursuant to obtaining
licenses to commercialize the Company's anti-herpes product in China and India.
Phanuel withdrew from the China option. Phanuel owes unpaid sums due under the
remaining Option Agreement, including a specific payment due to purchase the
Company's data they would need for submission to the Indian authorities. Phanuel
filed suit October 8, 2004 alleging the Company withheld that data and therefore
breached the agreement. The Company believes the suit is completely without
merit.
WILLIAM B. WALDROFF AND APPLIED VETERINARY GENOMICS, INC. V. CYTOGENIX, INC.
CytoGenix filed a Declaratory Judgment action in March, 2004, to obtain a
finding of nonliability with respect to two license agreements, one for shrimp,
and one for horses, originally issued in 1998 to William B. Waldroff. Waldroff
and Applied Veterinary Genomics, Inc. ("AVGI"), a party in interest as a
sublicensee of Waldroff's, counterclaimed for damages, attorneys fees, unrelated
torts, and a permanent injunction to honor the purported licenses. A jury trial
was held in February, 2005. Both Waldroff and AVGI also sued three directors of
CytoGenix for interfering with the licenses. The jury did not assess any damages
against any of the directors or against CytoGenix. The court has preliminarily
entered a judgment ordering CytoGenix to perform according to the licenses, and
for attorney's fees in the amount of $110,000. Post judgment motions will be
filed in the trial court.
ITEM 2. CHANGES IN SECURTITIES
On January 18, 2005 the Company issued 129,963 shares of common stock. Of these
shares, 129,963 were issued to executive officers (Malcolm Skolnick-26,508
shares, Frank Vazquez- 16,567 shares, Yin Chen-15,463 shares, Lawrence
Wunderlich-17,672 shares and Kurt Berens - 15,463 shares) and employees
(Xin-Xing Tan-11,597 shares, Jennifer Valentine-Budet-6,627, Harilyn
McMicken-10,126 shares and Frederic Kendirgi - 9,940 shares) of the Company for
compensation for an aggregate price of $44,125 or an average of $0.34 per share
(based on 25% of annual gross salary period) in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933 for
transactions not involving a public offering.
On January 19, 2005, the Company issued 600,000 shares of common stock. Of these
shares 600,000 were issued to (Elizabeth Haslam-100,000 shares, Fulton Holdings
Ltd -100,000 shares, Fyjigim Inc. 10,000 shares, Kenneth Ward-1,000 shares, Ty
Okabayashi-Tyson -4,000 shares, Chasseur Corporation -100,000 shares, WHMS
Enterprises - 100,000 shares and Ron Wilson - 185,000 shares ) for services
rendered pursuant to the exemption from registration provided by Section 3(b) of
the Securities Act of 1933 and Rule 504 thereunder.
19
On March 7, 2005 the Company issued 1,365,876 shares of common stock. Of these
shares, 1,365,876 shares were sold for an aggregate cash price of $437,080 (or
$0.32 per share) in a private placement to accredited investors (Robert
D.Ryan-200,000 shares, Peter Imbert- 300,000 shares, Roseanne Bagnato - 10,000
shares, Margaret Howard - 25,000 shares, Woodrow Cromarty- 2,000 shares, John
McDonough - 61,875 shares, Robin Schmitt - 125,000 shares, Richard M. Ubert -
10,000 shares, Irene M. Guarino - 50,000 shares, Patricia O'Keefe-Siemank -
10,000 shares, Albert L. Salvatico - 50,000 shares, Loretta P. Dedomenico -
15,625 shares, Cynthia I. Tunney - 2,500 shares, Gina Mazzola - 51,250 shares,
J. Phil Knight - 31,250 shares, G.M. Pearce - 7,813 shares, L.M. Pearce - 7,813
EXHIBITS shares, AND REPORTS Marie ON FORM 8-K Garraffo - 2,000 shares, Robert
N. Petraglia - 100,000 shares, Alan Baisch - 40,000 shares, Louis Howard -
110,000 shares, Ronald Chin - 10,000 shares, Deborah Busking - 31,250 shares,
Marc White - 50,000 shares, Paloma Production - 31,250 shares, and Richard Bean
- - 31,250 shares ) pursuant to the exemption from registration provided by
Section 3(b) of the Securities Act of 1933 and Rule 504 thereunder.
On March 21, 2005 the Company issued 47,701shares of common stock. Of these
shares, 47,701 were issued to the Board of Directors (Cy Stein-8,665 shares,
John Rossi- 13,012 shares, Raymond O'Compo-13,012 shares, and Scott
Parazynski-13,0 shares) of the Company for services rendered in reliance on the
exemption from registration provided by Section 4(2) of the Securities Act of
1933 for transactions not involving a public offering.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
Exhibit Description
Number
3.1* Articles of Incorporation of Cryogenic Solutions, Inc.
3.2* Certificate of Amendment dated November 1, 1995 of Articles of
Incorporation of Cryogenic Solutions, Inc.
3.3* Bylaws of Cryogenic Solutions, Inc..
31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
32.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
32.2 Certification Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
* Incorporated by reference to such Exhibit to the 10-SB of the Company filed on
January 31, 2001.
20
(b) Financial Statement Schedules.
All schedules are omitted because they are not applicable or because
the required information is contained in the Financial Statements or the Notes
thereto.
(c) Reports on Form 8-K.
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CYTOGENIX, INC.
Date: May 20, 2005 By: /s/ Malcolm Skolnick
-------------------------
MALCOLM SKOLNICK
PRESIDENT AND CHIEF
EXECUTIVE OFFICER
21
EXHIBIT 31.1
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Lawrence Wunderlich, Chief Financial Officer certify that:
1. I have reviewed this quarterly report on Form 10-Q of CytoGenix, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 20, 2005
/s/ Lawrence Wunderlich
- -----------------------
LAWRENCE WUNDERLICH
CHIEF FINANCIAL OFFICER
22
EXHIBIT 31.2
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Malcolm Skolnick, President and Chief Executive Officer certify that:
2. I have reviewed this quarterly report on Form 10-Q of CytoGenix, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 20, 2005
/s/ Malcolm Skolnick
- --------------------
MALCOLM SKOLNICK
PRESIDENT & CEO
23
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of CytoGenix, Inc. (the
"Company") on Form 1O-Q for the period ending March 31, 2005 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Malcolm
H. Skolnick, Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of
2002, that to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.
/s/ Malcolm H. Skolnick
- ------------------------
MALCOLM H. SKOLNICK
CHIEF EXECUTIVE OFFICER
May 20, 2005
24
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of CytoGenix, Inc. (the "Company") on
Form 1O-Q for the period ending March 31, 2005 as filed with the Securities and
Exchange Commission on the date hereof' (the "Report"), I, Lawrence Wunderlich,
Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350,
as adopted pursuant to ss. 906 of the Sarbanes- Oxley Act of 2002, that to the
best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.
/s/Lawrence Wunderlich
- ------------------------
LAWRENCE WUNDERLICH
CHIEF FINANCIAL OFFICER
May 20, 2005
25