Cdex Inc – ‘S-8’ on 5/24/05

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Registration of Securities to be Offered to Employees Pursuant to an Employee Benefit Plan   —   Form S-8
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: S-8         Registration of Securities to be Offered to           23    104K 
                          Employees Pursuant to an Employee                      
                          Benefit Plan                                           
 2: EX-5        Opinion re: Legality                                   1      7K 
 3: EX-23       Consent of Experts or Counsel                          1      6K 

S-8   —   Registration of Securities to be Offered to Employees Pursuant to an Employee Benefit Plan
Document Table of Contents

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As filed with the Securities and Exchange Commission on May 24, 2005

 Registration No. 333-________

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-8

REGISTRATION STATEMENT
 UNDER
THE SECURITIES ACT OF 1933

 CDEX Inc.
(Exact Name of Registrant as Specified in Its Charter)

      Nevada                                    52-2336836
(State or Other Jurisdiction of                  (I.R.S. Employer   
  Incorporation or Organization)                 Identification No.)

1700 Rockville Pike, Suite 400
 Rockville, Maryland 20852
(301) 881-0080
(Address, Including Zip Code, of Registrant's Principal Executive Offices)

 2002 Stock Incentive Plan
 2003 Stock Incentive Plan
(Full Title of Plan)

 Malcolm H. Philips, Jr.
1700 Rockville Pike, Suite 400
 Rockville, Maryland 20852
(301) 881-0080
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
 of Agent For Service)

Copy to:

Jeffrey A. Rinde, Esq.
 Bondy & Schloss LLP
60 East 42nd St., 37th Floor
New York, New York 10165
(212) 661-3535
 Facsimile: (212) 972-1677

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 CALCULATION OF REGISTRATION FEE

                                                        [Enlarge/Download Table]

----------------------------------------------------------------------------------------------------------------------
                                                                Proposed maximum     Proposed maximum      Amount of  
                                             Amount to be        offering price     aggregate offering   registration 
                                              registered            per share             price               fee     
----------------------------------------------------------------------------------------------------------------------
                                                                                                                      
Class A common stock, par value $.005         7,480,475 (1)          $ 1.33 (2)         $ 9,949,032         $ 1,171   
per share, issuable under the 2003                                                                                    
Stock Incentive Plan                                                                                                  
----------------------------------------------------------------------------------------------------------------------
Class A common stock, par value $.005         2,519,525 (3)          $ 1.33 (4)         $ 3,350,968         $   394   
per share, issued pursuant to 2002                                                                                    
Stock Incentive Plan                                                                                                  
----------------------------------------------------------------------------------------------------------------------
Total registration fee                                                                                      $ 1,565   
----------------------------------------------------------------------------------------------------------------------

  (1)    Represents (i) 6,034,643 shares of Class A common stock which have been
        granted under the registrant's 2003 Stock Incentive Plan, and (ii) the
         maximum number of additional shares of Class A common stock which could
  be granted under the registrant's 2003 Stock Incentive Plan, and
     includes an indeterminate number of shares which may be issuable by
    reason of a stock dividend, stock split, recapitalization or other
         similar event, in accordance with Rules 416(a) of the Securities Act of
1933, as amended.                                             

(2)    Estimated solely for the purpose of calculating the registration fee 
      pursuant to Rule 457(c) and (h) under the Securities Act of 1933, as
       amended, based upon (i) the average of the closing bid price of $1.25
      and closing asked price of $1.40 of the registrant's common stock on
       the OTC Bulletin Board on May 18, 2005 with respect to: (A) 6,034,643
  shares of Class A common stock which have been granted under the
     registrant's 2003 Stock Incentive Plan, and (B) 1,445,832 shares of
         Class A common stock which are available for grant under the 2003 Stock
  Incentive Plan, but have not been granted as of the date of this
registration statement.                                       

  (3)    Represents (i) 2,519,525 shares of Class A common stock which have been
        granted under the registrant's 2002 Stock Incentive Plan, and (ii) the
         maximum number of additional shares of Class A common stock which could
  be granted under the registrant's 2002 Stock Incentive Plan, and
     includes an indeterminate number of shares which may be issuable by
    reason of a stock dividend, stock split, recapitalization or other
         similar event, in accordance with Rules 416(a) of the Securities Act of
1933, as amended.                                             

(4)    Estimated solely for the purpose of calculating the registration fee 
      pursuant to Rule 457(c) and (h) under the Securities Act of 1933, as
       amended, based upon (i) the average of the closing bid price of $1.25
     and closing asked price of $1.40 of the registrant's Class A common
 stock on the OTC Bulletin Board on May 18, 2005 with respect to
        2,519,525 shares of Class A common stock which have been granted under
the registrant's 2002 Stock Incentive Plan.                   

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

EXPLANATORY NOTE

The purpose of this Form S-8 registration statement is to register shares of the
Class A common stock of CDEX Inc. (the "Company") issued or available for       
issuance under the Company's 2002 Stock Incentive Plan and 2003 Stock Incentive 
Plan.                                                                           

This registration statement includes a reoffer prospectus prepared in accordance
with the requirements of Instruction C to Form S-8 and Part I of Form S-3. The  
reoffer prospectus may be utilized for reoffers and resales of "restricted      
securities" or of securities acquired under the Plan by the Company's directors 
and officers deemed to be "affiliates" under Rule 405.                          

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PART I

INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

The documents containing the information specified in Part I of Form S-8 will be
sent or given to employees as specified by Rule 428(b)(1) of the Securities Act.
Such documents need not be filed with the SEC either as part of this            
registration statement or as prospectuses or prospectus supplements, pursuant to
Rule 424 of the Securities Act. These documents and the documents incorporated  
by reference in this registration statement, pursuant to Item 3 of Part II of   
this registration statement, taken together, constitute a prospectus that meets 
the requirements of Section 10(a) of the Securities Act.                        

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REOFFER PROSPECTUS                                                              

 CDEX Inc.

3,971,419 Shares of Class A Common Stock

This Prospectus relates to the reoffer and resale of up to 3,971,419 shares of  
Class A common stock, par value $.005 per share, of CDEX Inc. by officers,      
directors and other "affiliates" as defined in Rule 405, promulgated under the  
Securities Act of 1933, as amended (the "Securities Act"). These affiliates     
("Selling Shareholders") acquired the shares under the Company's 2003 Stock     
Incentive Plan (the "2003 Plan") and the Company's 2002 Stock Incentive Plan    
(the "2002 Plan") (collectively, the "Plans").                                  

The Selling Shareholders will determine when they will sell their shares, and in
all cases they will sell their shares at the then-prevailing market price or at 
prices negotiated at the time of sale. We will not receive any proceeds from    
these sales. The brokers and dealers that the Selling Shareholders may utilize  
in selling their shares may receive compensation in the form of underwriting    
discounts, concessions or commissions from the sellers or purchasers of the     
shares.                                                                         

Our stock is traded on the OTC Bulletin Board under the symbol "CEXI.OB." On May
18, 2005, the last reported sale price of our Class A common stock on the OTC   
Bulletin Board was $1.25 per share. On May 18, 2005, there were 33,177,764      
shares of our Class A common stock issued and outstanding.                      

Our principal executive offices are located at 1700 Rockville Pike, Suite 400,  
Rockville, Maryland 20852, and our telephone number is (301) 881-0080.          

Investing in the shares involves risks, which are described from time to time in
the periodic reports we file with the Securities and Exchange Commission        
("SEC"), and which we incorporate herein by reference. Also see "Risk Factors"  
beginning on page 2.                                                            

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES         
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE   
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.                                                               

The date of this prospectus is May 24, 2005.

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 TABLE OF CONTENTS

Risk Factors..................................................................3 

Cautionary Statement Regarding Forward-Looking Statements.....................9 

Business......................................................................10

Selling Shareholders..........................................................11

Plan Description..............................................................12

Plan of Distribution..........................................................13

Use of Proceeds...............................................................13

Experts.......................................................................14

Indemnification of Directors and Officers.....................................14

Legal Matters.................................................................15

Where You Can Find More Information...........................................15

Incorporation of Certain Documents by Reference...............................15

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RISK FACTORS

RISKS RELATED TO OUR BUSINESS                                                   

A history of operating losses and an accumulated deficit may affect CDEX's      
ability to survive.                                                             

We have a history of operating losses and an accumulated deficit. Since our     
principal activities to date have been limited to organizational activities,    
research and development, product development and limited marketing and sales,  
CDEX has produced only limited revenues. In addition, we have only limited      
assets. As a result, we cannot be certain that CDEX will continue to generate   
revenues or become profitable in the future. If we are unable to obtain         
customers and generate sufficient revenues to operate profitably, our business  
will not succeed.                                                               

CDEX has received a going concern opinion from its independent auditors that    
expresses uncertainty regarding its ability to continue as a going concern.     

We have received a report from our independent auditors for the fiscal year     
ended October 31, 2004 containing an explanatory paragraph that expresses       
uncertainty regarding our ability to continue as a going concern due to         
historical negative cash flow. We cannot be certain that our business plans will
be successful or what actions may become necessary to preserve our business. Any
inability to raise capital may require us to reduce operations or could cause   
our business to fail.                                                           

Our limited operating history makes our future operating results unpredictable  
rendering it difficult to assess the health of our business or its likelihood of
success. The inability to assess these factors could result in a total loss of  
an investor's investment in CDEX.                                               

In the case of an established company in an ongoing market, investors may look  
to past performance and financial condition to get an indication of the health  
of the company or its likelihood of success. Our short operating history and the
evolving nature of the explosives detection and chemical identification markets 
in which we focus make it difficult to forecast our revenues and operating      
results accurately. We expect this unpredictability to continue into the future 
due to the following factors:                                                   

o the timing of sales of our products and services, particularly in light of our
minimal sales history;                                                          

o difficulty in keeping current with changing technologies;                     

o unexpected delays in introducing new products, new product features and       
services;                                                                       

o increased expenses, whether related to sales and marketing, product           
development or administration;                                                  

o deferral of recognition of our revenue in accordance with applicable          
accounting principles due to the time required to complete projects;            

o the mix of product license and services revenue; and                          

o costs related to possible acquisitions of technologies or businesses.         

CDEX could experience operating losses or even a total loss of our business     
which, as a result of the foregoing factors, would be difficult to anticipate   
and could thus cause a total loss of capital invested in CDEX.                  

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The absence of a permanent, full-time chief financial officer and the types of  
financial controls and procedures which will be required of public companies    
leave investors in CDEX without these protections until they are remedied.      

In April 2004 we retained a qualified part-time chief financial officer on a    
consultancy basis, however, we have not retained a long-term chief financial    
officer. The responsibilities of the principal accounting and financial officer 
are currently being handled by our CEO. We have also added to our board of      
directors a qualified financial expert as described in the Sarbanes-Oxley Act.  

The Sarbanes-Oxley Act requires public companies to maintain disclosure controls
and procedures that are designed to ensure that information required to be      
disclosed in reports filed with the SEC is recorded, processed, summarized and  
reported within the time required. This includes controls and procedures to     
ensure that such information is accumulated and communicated to management,     
including the chief executive and financial officers, so as to allow timely     
decisions regarding required disclosure of such information. The Sarbanes-Oxley 
Act also requires documentation of internal control procedures, remediation as  
needed, and periodic testing of the controls. We are in the process of reviewing
our internal controls with a view toward documenting the required controls and  
procedures and adopting a testing plan. This process is in the initial stages   
beginning with the review of procurement and inventory functions. We plan on    
completing the documentation, testing and remediation as required during fiscal 
year 2006 to be compliant under Section 404 of the Sarbanes-Oxley Act.          

Lack of additional financing could prevent us from operating profitably which,  
eventually, could result in a total loss of our business.                       

Since our inception, we have funded our operations through borrowings and       
financings. Current funds available to CDEX may not be adequate for us to be    
competitive in the areas in which we intend to operate, and we have no          
arrangements or commitments for ongoing funding. If funding is insufficient at  
any time in the future, we may not be able to grow revenue, take advantage of   
business opportunities or respond to competitive pressures. The unavailability  
of funding could prevent us from producing additional revenues or ever becoming 
profitable. Our continued operations, as well as the successful implementation  
of our business plan, may therefore depend upon our ability to raise additional 
funds of approximately $2,500,000 to $4,000,000 through bank borrowings or      
equity or debt financing over the next twelve months. We continue to seek       
prospective investors who may provide some of this funding. However, such       
funding may not be available when needed or may not be available on favorable   
terms. Certain family members of our management team have advanced funds to CDEX
on an as-needed basis although there is no definitive or legally binding        
arrangement to do so. All such advances have been repaid. If we do not produce  
revenues and become profitable, eventually, we will be unable to sustain our    
business.                                                                       

CDEX shareholders will experience significant dilution if we issue additional   
equity to fund operations or acquire businesses or technologies.                

If working capital or future acquisitions are financed through the issuance of  
equity securities, CDEX shareholders will experience significant dilution. In   
addition, securities issued in connection with future financing activities or   
potential acquisitions may have rights and preferences senior to the rights and 
preferences of the currently outstanding CDEX shares of common stock. The       
conversion of future debt obligations into equity securities could also have a  
dilutive effect on our shareholders. Regardless of whether our cash assets prove
to be inadequate to meet our operational needs, we may elect to compensate      
providers of services by issuing stock in lieu of cash.                         

Our potential inability to protect the proprietary rights in CDEX's technologies
and intellectual property may hamper our ability to manufacture products which  
would prevent us from earning revenues or becoming profitable.                  

Our success and ability to compete will depend in part on the protection of our 
potential patents and other proprietary information. We currently have four     
patent applications pending for our chemical detection technologies. We rely on 
non-disclosure agreements and patent and copyright laws to protect the          
intellectual property that we have developed and plan to develop. However, such 
agreements and laws may provide insufficient protection. Moreover, other        
companies may develop products that are similar or superior to CDEX's or may    
copy or otherwise obtain and use our proprietary information without            
authorization. If a third party were to violate one or more of our patents, we  

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may not have the resources to bring suit or otherwise protect the intellectual  
property underlying the patent. In the event of such a violation or if a third  
party appropriated any of our unpatented technology, such party may develop and 
market products which we intend to develop and/or market. We would lose any     
revenues which we would otherwise have received from the sale or licensing of   
those products. This could prevent our ever making a profit on any products     
based upon the misappropriated technology.                                      

Policing unauthorized use of CDEX's proprietary and other intellectual property 
rights could entail significant expense and could be difficult or impossible. In
addition, third parties may bring claims of copyright or trademark infringement 
against CDEX or claim that certain of our processes or features violate a       
patent, that we have misappropriated their technology or formats or otherwise   
infringed upon their proprietary rights. Any claims of infringement, with or    
without merit, could be time consuming to defend, result in costly litigation,  
divert management attention, and/or require CDEX to enter into costly royalty or
licensing arrangements to prevent further infringement, any of which could      
increase our operating expenses and thus prevent us from becoming profitable.   

Our competitive position also depends upon unpatented trade secrets. Trade      
secrets are difficult to protect. Our competitors may independently develop     
proprietary information and techniques that are substantially equivalent to ours
or otherwise gain access to our trade secrets, such as through unauthorized or  
inadvertent disclosure of our trade secrets. If this occurs, our competitors may
use our processes or techniques to develop competing products and bring them to 
market ahead of us. This could prevent us from becoming profitable.             

We may rely on certain intellectual property licensed from third parties, and   
may be required to license additional products or services in the future, in    
order to move forward with our business plan. These third party licenses may be 
unavailable on acceptable terms, when needed or at all. An inability to enter   
into and maintain any of these licenses could prevent us from developing or     
marketing products based upon the underlying technology which could prevent us  
from earning revenues on these products or from becoming profitable.            

No assurance of successful manufacturing may affect our ability to survive.     

CDEX itself has no experience in manufacturing commercial quantities of         
products, and our management has had limited experience in this area. We        
presently have no plans for developing in-house manufacturing capability beyond 
aggregating off the shelf components for our initial units into a final         
assembly. Accordingly, we depend upon outside manufacturers to manufacture and  
assemble our products. In our early stages with each new product, we plan to do 
the final assembly and testing of the initial units in-house. We cannot be      
certain that the terms of such arrangement will be favorable enough to permit   
our products to compete effectively in the marketplace.                         

Dependence on outsourced manufacturing may affect ability to bring products to  
market.                                                                         

At present, we do not plan to manufacture any of our products in-house. We are  
considering different possibilities for bringing different products to market   
among them, licensing to third parties or outsourcing manufacturing. The risks  
of association with outsourced manufacturers are related to their operations,   
finances and suppliers. CDEX would have little control over an outsourced       
manufacturer and may suffer losses if any outside manufacturer fails to perform 
its obligations to manufacture and ship the manufactured product. These         
manufacturers' financial affairs may also affect our ability to obtain product  
from them in a timely fashion should they fail to continue to obtain sufficient 
financing during a period of incremental growth. Problems with outsourced       
manufacturers could damage our relationships with our clientele and cost us     
future revenues. If we are unable to contract with adequate manufacturers, and  
in the absence of licensing or other means, we may be unable to market our      
products. This would prevent us from earning revenues.                          

Lack of market acceptance may limit our ability to sell products and generate   
revenues which would prevent us from earning revenues or becoming profitable.   

We cannot be certain that any products which we successfully develop will ever  
achieve wide market acceptance. Our products, if successfully developed, may    
compete with a number of traditional products manufactured and marketed by major
technology companies, as well as new products currently under development by    
such companies and others. In the explosives detection marketplace, for example,
many airports and other facilities and agencies have already invested in and    
implemented systems that are based upon technology that is different from ours. 
While we believe our technology is superior, we will have to demonstrate its    
superiority to these potential customers in order to sell our products and      

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generate revenues. We may encounter similar obstacles in other application      
areas. The degree of market acceptance of our products will depend on a number  
of factors, including the establishment and demonstration of the efficacy of the
product candidates, their potential advantage over alternative methods and      
reimbursement policies of government and third party payors. We cannot be       
certain that the marketplace in general will accept and utilize any of our      
products. If potential customers do not accept and purchase our products, we    
will be unable to generate revenues and become profitable.                      

We intend to market our products in industries where technology changes rapidly,
and we will incur costs to keep our products current and innovative. Our failure
to do so could render our products obsolete, making our business unprofitable.  

We hope to market our products in industries characterized by rapid change due  
to the introduction of new and emerging technologies. Critical issues concerning
the governmental or commercial use of chemical detection mechanisms, including  
security, reliability, accuracy, cost, ease of use, accessibility, or potential 
tax or other government regulation, may affect the relevance and functionality  
of our products. Future technology or market changes may cause some of our      
products to become obsolete more quickly than expected. We will need to make    
research and development expenditures to create new features for our products to
enhance their effectiveness and become and remain competitive. If we are        
unsuccessful in timely assimilating development changes in the various          
environments, we may be unable to achieve or maintain profitability.            

Potential defects and product liability could result in delays in market        
acceptance, unexpected liability and costs and diminished operating results.    

Technology-based products frequently contain errors or defects, especially when 
first introduced or when new versions are released. Defects and errors could be 
found in current versions of our products, future upgrades to current products  
or newly developed and released products. These defects could result in product 
liability suits, delays in market acceptance or unexpected redevelopment costs, 
which could cause any profits we might otherwise have to decline. We anticipate 
most of our agreements with customers will contain provisions designed to limit 
our exposure to potential product liability claims. It is possible, however,    
that we will be unable to negotiate such provisions with certain customers or   
that these provisions, if negotiated, may not be valid as a result of federal,  
state, local or foreign laws or ordinances or unfavorable judicial decisions. A 
successful product liability claim could damage our business, operating results 
and financial condition. Prior to the actual licensing of our technologies for  
use in distributed products or the entry of our products made by us into the    
market, we plan to procure product liability insurance. Although we have        
researched policies for such insurance, we currently have none in place, and we 
cannot be certain that the amount or extent of coverage will be adequate once we
obtain it.                                                                      

Our potential future business and/or technology acquisitions may be             
unpredictable and may cause our business to suffer.                             

CDEX intends to expand its operations through the acquisition of additional     
technologies (either by purchasing other businesses or acquiring their          
technological assets) which it perceives to be unexploited and develop products 
based upon these technologies. We have not yet identified these specific        
technologies, and some of these technologies may be outside our current field of
operations. However, we may be unable to identify any such businesses or        
technologies. Expansion may involve a number of special risks, including        
possible adverse effects on our operating results or balance sheet (particularly
in the event of impairment of acquired intangible assets), diversion of         
management attention, inability to retain key personnel, risks associated with  
unanticipated events, any of which could prevent us from becoming profitable. In
addition, if competition for acquisition candidates or technologies were to     
increase, the cost of acquiring businesses or technologies could increase as    
well. If we are unable to implement and manage our expansion strategy           
successfully, our business may suffer or fail.                                  

Substantial competition may limit our ability to sell products and thereby our  
chances of becoming profitable.                                                 

We may experience substantial competition in our efforts to locate and attract  
customers for our products. We are aware of two significant competitors in the  
explosives detection industry which we believe have greater experience,         
resources and managerial capabilities and may be in a better position than we   
are to obtain access to and attract customers. A number of larger companies     
similarly may enter some or all of our target markets and directly compete with 
us. In the counter-terrorism arena, it is difficult to assess our competition   
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to defense and homeland security contracts and contractors. We must assume that 
the demand for the technology in this area has given rise to a corresponding    
supply of scientists and others who are developing technology similar to, or    
otherwise competitive with, ours. In the area of brand protection, many         
companies may seek to develop technology in-house to protect their own brands   
rather than contract with us for our technology. In the areas of medical and    
pharmaceutical validation and brand protection, various existing technologies   
compete with ours and already are in use in the marketplace. These include radio
frequency identification tags, tagant agents (chemical agents added to the      
target substance to serve solely as identifying tags) and bar coding. If our    
competitors are more successful in marketing their products, we may be unable to
achieve or maintain profitability.                                              

Loss of any of our current management or inability to recruit and retain quality
personnel could adversely impact our business and prospects. Our directors and  
officers exert substantial control over our business and operations.            

We are dependent on our officers, i.e., Malcolm Philips Jr. and Timothy Shriver,
our Chairman of the Board and our Senior Vice President of Technical Operations,
respectively, and our key employee. The loss of any of our key personnel could  
materially harm our business because of the cost and time necessary to retain   
and train a replacement. Such a loss would also divert management attention away
from operational issues. This would increase costs and prevent or reduce our    
profits. To minimize the effects of such loss, we have entered into employment  
contracts and non-competition agreements with our key officers and employees,   
including Messrs. Philips and Shriver.                                          

Our management lacks experience in this market.                                 

Although widely experienced in other industries, our current senior management  
team has little experience leading the development, marketing and sales of      
technology products in the chemical detection and validation marketplace. This  
lack of experience could lead to inefficiency and slow the process of marketing 
our products and prevent us from making sales or becoming profitable.           

RISKS RELATING TO THE OFFERING AND OUR COMMON STOCK                             

There has not been any significant prior trading market for our shares, and we  
cannot be certain that one will develop or that broker/dealers will make a      
market in our common stock.                                                     

Our common stock has only recently begun trading on the Over The Counter        
Bulletin Board. We cannot be certain that our shares will be actively traded or 
at what prices they will trade. If an active trading market for our common stock
does not develop, an investor may find it difficult to dispose of, or to obtain 
accurate quotations as to the market value of, our securities.                  

If CDEX is unable to maintain National Association of Securities Dealers, Inc.  
member broker/dealers as market makers, the liquidity of our common stock could 
be impaired, not only in the number of shares of common stock which could be    
bought and sold, but also through possible delays in the timing of transactions,
and lower prices for our common stock than might otherwise prevail. Furthermore,
the lack of market makers could result in CDEX shareholders being unable to buy 
or sell shares of our common stock on any secondary market. We may be unable to 
maintain such market makers.                                                    

Risk of low priced securities may affect the market value of our stock.         

Our common stock may be subject to the low-priced security or so called "penny  
stock" rules that impose additional sales practice requirements on              
broker-dealers who sell such securities. The Securities Enforcement and Penny   
Stock Reform Act of 1990 ("Reform Act") requires additional disclosure in       
connection with any trades involving a stock defined as a "penny stock"         
(generally defined as, according to recent regulations adopted by the U.S.      
Securities and Exchange Commission, any equity security that has a market price 
of less than $5.00 per share, subject to certain exceptions), including the     
delivery, prior to any penny stock transaction, of a disclosure schedule        
explaining the penny stock market and the risks associated therewith. The       
regulations governing low-priced or penny stocks sometimes may limit the ability
of broker-dealers to sell CDEX's common stock and thus, ultimately, the ability 
of the investors to sell their securities in the secondary market. Prices for   
CDEX shares will be determined in the marketplace and may be influenced by many 

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factors, including the depth and liquidity of the market for the shares, CDEX's 
results of operations, what investors think of CDEX and the chemical detection  
and validation industry, changes in economic conditions in the industry, and    
general economic and market conditions. Market fluctuations could have a        
material adverse impact on the trading price of our shares.                     

Sale of shares eligible for future sale could adversely affect the market price 
of our common stock.                                                            

3,748,777 of the 33,167,764 outstanding shares of our Class A common stock have 
been issued in reliance on a registration exemption under the Securities Act of 
1933, as amended, and are eligible for sale in the open market without          
registration in reliance upon Rule 144 under the Securities Act. In general,    
under Rule 144 a person, or persons whose shares are aggregated, who has        
beneficially owned shares acquired in a non-public transaction for at least one 
year, including persons who may be deemed "affiliates" of CDEX, as defined in   
Rule 144, would be entitled to sell within any three-month period a number of   
shares that does not exceed the greater of 1% of the then outstanding shares of 
common stock, or the average weekly reported trading volume during the four     
calendar weeks preceding such sale, provided that current public information is 
then available. In addition, a person who is not deemed to have been an         
affiliate at any time during the three (3) months preceding a sale and who has  
beneficially owned the restricted securities for the last two (2) years, is     
entitled to sell all such shares without regard to the volume limitations,      
current public information requirements, manner of sale provisions and notice   
requirements. If a substantial number of the shares owned by these shareholders 
were sold under Rule 144, the market price of our common stock could be         
adversely affected.                                                             

Distribution of shares of our common stock by a significant shareholder could   
create an overhang in the market.                                               

By order of the District Court of Travis County, Texas, Loch Harris, Inc., a    
significant CDEX shareholder, was ordered to distribute to its shareholders and 
others approximately 12,000,000 shares of CDEX common stock which it held. These
shares were originally issued to Loch Harris pursuant to an Asset Purchase      
Agreement between CDEX and Loch Harris in exchange for certain intellectual     
property rights acquired by CDEX from Loch Harris. The agreement required Loch  
Harris to distribute these shares to its shareholders. By January 2002, the     
shares had not yet been distributed. At that time, certain of Loch Harris's     
shareholders filed a class action lawsuit against it, demanding, among other    
claims, that it distribute these shares to its shareholders. As part of the     
settlement of this suit, Loch Harris was required to do so. The shares were     
distributed to approximately 37,000 Loch Harris shareholders without            
registration, pursuant to Section 3(a)(10) of the Securities Act of 1933, as    
amended, because they were issued by court order. Prior to the court's order,   
these shares were restricted and could not be sold publicly by Loch Harris.     
However, under the court order and pursuant to Section 3 of the Securities Act, 
these shares are unrestricted in the hands of the individual shareholders of    
Loch Harris. Thus, in addition to the shares offered hereby, 12,000,000 shares  
held by the shareholders of this significant shareholder are eligible for public
sale (subject to any state securities law requirements). As a result, the prices
at which our shares trade may be lower than the price that would be expected for
a fully distributed issue.                                                      

Holders of our Class B Common Stock (the majority of which is currently held by 
our executive officers) will control the election of a majority of our board of 
directors until December 11, 2006.                                              

Until December 11, 2006, the holders of shares of our Class B Common Stock are  
entitled to vote as a class to elect a majority of our directors. The majority  
of these shares are now held by our executive officers. Until that time, holders
of shares of Class A Common Stock are only entitled to vote as a class to elect 
the remainder of our directors. Following December 11, 2006, holders of Class A 
Common Stock and Class B Common Stock shall be entitled to one vote per share on
the election of directors. As a result, prior to December 11, 2006, purchasers  
of the shares in this offering will be unable to elect a majority of the        
directors of CDEX. Our executive officers hold the majority of the issued and   
outstanding shares of Class B Common Stock.                                     

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS                       

Information included in this prospectus may contain forward-looking statements. 
This information may involve known and unknown risks, uncertainties and other   
factors which may cause our actual results, performance or achievements to be   
materially different from the future results, performance or achievements       
expressed or implied by any forward- looking statements. Forward-looking        
statements, which involve assumptions and describe our future plans, strategies 
and expectations, are generally identifiable by use of the words "may,"         
"should," "expect," "anticipate," "estimate," "believe," "intend" or "project"  
or the negative of these words or other variations on these words or comparable 
terminology.                                                                    

This prospectus contains forward-looking statements, including statements       
regarding, among other things, (a) our projected sales and profitability, (b)   
our growth strategies, (c) anticipated trends in our industry, (d) our future   
financing plans, and (e) our anticipated needs for working capital. These       
statements may be found under "Management's Discussion and Analysis of Financial
Conditions and Results of Operations" and "Our Business," as well as in this    
prospectus generally. Actual events or results may differ materially from those 
discussed in forward-looking statements as a result of various factors,         
including, without limitation, the risks outlined under "Risk Factors" and      
matters described in this prospectus generally. In light of these risks and     
uncertainties, there can be no assurance that the forward-looking statements    
contained in this prospectus will in fact occur.                                

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BUSINESS

       CDEX Inc. was incorporated in the State of Nevada on July 6, 2001. We
are a technology company with a current focus on developing and marketing       
products using chemical detection and validation technologies. At present, we   
are devoting our resources to the development of products for two distinct      
markets:                                                                        

        (i) identification of substances of concern (e.g., explosives, illegal
drugs and chemical/biological weapons); and                   

         (ii) validation of substances for anti-counterfeiting, brand protection
     and quality assurance (e.g., validation of prescription medication;
        detection of counterfeit or sub-par products for brand protection; and
     quality assurance inspection of incoming raw materials and outgoing
final products).                                              

All CDEX products are based on applying the same underlying   
technologies for which we have patents pending.               

  We anticipate acquiring other technologies in the future through
partnering and investment. However, unless and until such time as we acquire    
other technology assets, we anticipate that almost all of our revenues, if any, 
will come from our chemical detection products.                                 

    Our principal office is located at 1700 Rockville Pike, Suite 400,
Rockville, MD 20852. Our telephone number is (301) 881-0080.                    

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SELLING SHAREHOLDERS

This prospectus relates to shares of Class A common stock that are being        
registered for reoffer and resale by selling shareholders who have acquired or  
may acquire shares of common stock pursuant to our 2002 and/or 2003 Stock       
Incentive Plan, and who may be deemed "affiliates" of the company. An           
"affiliate" is defined under the Securities Act as "a person that directly or   
indirectly, through one or more intermediaries, controls or is controlled by, or
is under common control with" the company. The Selling Shareholders may resell  
any or all of the shares of common stock at any time while this prospectus is   
current.                                                                        

Executive officers, directors or others who are considered to be affiliates of  
the Company who acquire Common Stock under the Plan may be added to the list of 
selling shareholders, and their number of Shares to be sold may be increased or 
decreased by the use of a prospectus supplement filed with the SEC.             

The inclusion of the shares of Common Stock in the table below does not         
constitute a commitment to sell any shares.                                     

                                                        [Enlarge/Download Table]

                                                                                Number of                         Percent of
                                                       Number of Class A     Class A Shares    Number of Class   Class Owned
                                                            Shares             Eligible         A Shares            After   
                                                         Beneficially       to be Offered by   Owned After        Completion
                                                          Owned Prior         the Selling     Completion of the     of the  
     Name                   Position                    to the Offering       Shareholders        Offering         Offering 
                                                                                                                            
Malcolm H. Philips, Jr.  CEO / President /                   2,196,000 (1)     2,196,000 (1)           --             --    
                         Chairman of the Board of                                                                           
                         Directors                                                                                          
Timothy Shriver          Sr. Vice President of               1,277,658         1,277,658               --             --    
                         Technical Operations / Director                                                                    
George Dials             Director                              180,000           180,000               --             --    
B.D. Liaw                Director                              175,000           175,000               --             --    
John A. Knubel           Director                               85,000            85,000               --             --    
Malcolm H. Philips, III  Family member                          70,000 (2)        70,000 (2)           --             --    
& Dana E. Philips                                                                                                           

    (1)  Includes shares transferred by gift to family members of Mr. Philips,
         a family limited partnership and FGW LLC, a limited liability company
over which Mr. Philips holds at least 50% voting control.   

    (2)  Shares received as a gift from Malcolm H. Philips, Jr., the father of
Malcolm H. Philips, III.                                    

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PLAN DESCRIPTION

2002 Stock Incentive Plan                                                       

On May 27, 2002, our board of directors adopted the 2002 Stock Incentive Plan,  
under which stock options and restricted stock may be granted to such of our    
officers, directors, employees or other persons providing services to CDEX as   
our board of directors, or a committee designated by them for this purpose,     
selects. The plan was approved by our stockholders on July 1, 2002.             

Stock options granted under the plan may be nonqualified stock options or       
incentive stock options, as provided in the plan. Incentive stock options are to
be issued in accordance with Section 422 of the Internal Revenue Code of 1986,  
as amended. As such, they may only be issued to employees of CDEX or any        
subsidiary of CDEX, and must have an exercise price of no less than 110% of fair
market value of the common stock on the date of the grant. The aggregate fair   
market value of the underlying shares cannot exceed $100,000 for any individual 
option holder during any calendar year. Also, incentive stock options must      
expire no later than five years from the date of grant. Non-incentive options   
are not subject to the restrictions contained in Section 422, except that       
pursuant to the plan, such options cannot be exercisable at less than 85% of    
fair market value and must expire no later than ten years from the date of      
grant. The options are non-transferable and may not be assigned except that     
non-incentive options may, in certain cases be assigned to family members of the
grantee. Upon termination of the employment (other than for cause) of a grantee 
of options under this plan, the grantee shall have 60 days following such       
termination, or one year if such termination results from the grantee's death or
disability (as defined in the plan), to exercise the vested portion of any      
option.                                                                         

Holders of options under the plan have no voting or other rights of shareholders
except and to the extent that they exercise their options and are issued the    
underlying shares. Options under the plan may be exercised by the issuance of a 
promissory note from the grantee, or on a cashless basis by the grantee         
surrendering a portion of the shares issuable thereunder, as payment of the     
exercise price in lieu of cash.                                                 

Restricted stock granted under this plan may be issued subject to any           
restrictions set by our board of directors in its discretion except that the    
vesting restrictions for restricted stock granted to individuals who are not    
officers, directors or consultants of CDEX shall lapse no less rapidly than the 
rate of 20% per year for each of the first five years from the grant date.      
However, the board of directors in its discretion may shorten or eliminate the  
restrictions. Generally, unless otherwise provided by the board of directors    
with respect to a particular grant of restricted stock, holders of restricted   
stock have the right to vote and receive dividends on their shares, including   
shares not yet vested. Also, unless otherwise so provided, any unvested shares  
are deemed forfeited by the grantee upon termination of such grantee's service  
with CDEX.                                                                      

2003 Stock Incentive Plan                                                       

On July 1, 2003, our shareholders adopted the 2003 Stock Incentive Plan, which  
has substantially the same terms as the 2002 Stock Incentive Plan. We have      
reserved 10,000,000 shares in the aggregate for issuance under both the 2002 and
2003 plans, including 3,000,000 available for the Board of Directors to allocate
to the Incentive Plan at their discretion as approved by the Shareholders at our
June 2004 Annual Meeting.                                                       

To date, we have issued 8,554,168 shares of common stock under the plans to     
certain of our officers, directors, consultants and employees, which are subject
to forfeiture in accordance with the vesting schedules set forth in the granting
agreements. No options are currently outstanding under the plans. Shares issued 
pursuant to the plans, whether underlying options or as restricted stock,       
generally may not be sold or transferred without the grantee first offering CDEX
a right of first refusal to purchase the shares sought to be sold.              

We have issued shares of restricted stock to our Directors as compensation for  
their board services. We have also issued shares of restricted stock to John    
Knubel, Director, for consulting services rendered separately from his board    
capacity.                                                                       

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PLAN OF DISTRIBUTION

Shareholders selling under this prospectus may, from time to time, sell any or  
all of their shares of common stock on any stock exchange, market or trading    
facility on which the shares are traded or in private transactions. These sales 
may be at fixed or negotiated prices. The selling shareholders may use any one  
or more of the following methods when selling shares:                           

- ordinary brokerage transactions and transactions in which the broker-dealer   
solicits purchasers;                                                            

- block trades in which the broker-dealer will attempt to sell the shares as    
agent but may position and resell a portion of the block as principal to        
facilitate the transaction;                                                     

- purchases by a broker-dealer as principal and resale by the broker-dealer for 
its account;                                                                    

- an exchange distribution in accordance with the rules of the applicable       
exchange;                                                                       

- privately negotiated transactions;                                            

- short sales;                                                                  

- broker-dealers may agree with the selling shareholders to sell a specified    
number of such shares at a stipulated price per share; - a combination of any   
such methods of sale; and                                                       

- any other method permitted pursuant to applicable law.                        

The selling shareholders may also sell shares under Rule 144 under the          
Securities Act of 1933, as amended, if available, rather than under this        
prospectus.                                                                     

The selling shareholders may also engage in short sales against the box, puts   
and calls and other transactions in our securities or derivatives of our        
securities and may sell or deliver shares in connection with these trades. The  
selling shareholders may pledge their shares to their brokers under the margin  
provisions of customer agreements. If a selling shareholder defaults on a margin
loan, the broker may, from time to time, offer and sell the pledged shares.     

Broker-dealers engaged by the selling shareholders may arrange for other        
brokers-dealers to participate in sales. Broker-dealers may receive commissions 
or discounts from the selling shareholders (or, if any broker-dealer acts as    
agent for the purchaser of shares, from the purchaser) in amounts to be         
negotiated. The selling shareholders do not expect these commissions and        
discounts to exceed what is customary in the types of transactions involved.    

The selling shareholders and any broker-dealers or agents that are involved in  
selling the shares may be deemed to be "underwriters" within the meaning of the 
Securities Act in connection with such sales. In such event, any commissions    
received by such broker-dealers or agents and any profit on the resale of the   
shares purchased by them may be deemed to be underwriting commissions or        
discounts under the Securities Act.                                             

We are required to pay all fees and expenses incident to the registration of the
shares being registered herein, including any fees and disbursements of counsel 
to the selling shareholders, which we estimate to be approximately $10,000 in   
the aggregate. We have agreed to indemnify certain of the selling shareholders  
against certain losses, claims, damages and liabilities, including liabilities  
under the Securities Act.                                                       

 USE OF PROCEEDS

The Shares are being registered for the account of the Selling Shareholders.    
Accordingly, the Company will not receive any of the proceeds from the sale of  
Shares by the Selling Shareholders.                                             

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 EXPERTS

The financial statements and schedules incorporated by reference in this        
prospectus and elsewhere in the registration statement have been audited by     
Aronson & Company, independent registered public accounting firm, as indicated  
in their reports with respect thereto, and are included herein in reliance upon 
the authority of said firm as experts in accounting and auditing.               

 INDEMNIFICATION OF DIRECTORS AND OFFICERS

Nevada corporation law provides that:                                           

1. a corporation may indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or      
proceeding, whether civil, criminal, administrative or investigative, except an 
action by or in the right of the corporation, by reason of the fact that he is  
or was a director, officer, employee or agent of the corporation, or is or was  
serving at the request of the corporation as a director, officer, employee or   
agent of another corporation, partnership, joint venture, trust or other        
enterprise, against expenses, including attorneys' fees, judgments, fines and   
amounts paid in settlement actually and reasonably incurred by him in connection
with the action, suit or proceeding if he acted in good faith and in a manner   
which he reasonably believed to be in or not opposed to the best interests of   
the corporation, and, with respect to any criminal action or proceeding, had no 
reasonable cause to believe his conduct was unlawful;                           

2. a corporation may indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or 
in the right of the corporation to procure a judgment in its favor by reason of 
the fact that he is or was a director, officer, employee or agent of the        
corporation, or is or was serving at the request of the corporation as a        
director, officer, employee or agent of another corporation, partnership, joint 
venture, trust or other enterprise against expenses, including amounts paid in  
settlement and attorneys' fees actually and reasonably incurred by him in       
connection with the defense or settlement of the action or suit if he acted in  
good faith and in a manner which he reasonably believed to be in or not opposed 
to the best interests of the corporation. Indemnification may not be made for   
any claim, issue or matter as to which such a person has been adjudged by a     
court of competent jurisdiction, after exhaustion of all appeals therefrom, to  
be liable to the corporation or for amounts paid in settlement to the           
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon       
application that in view of all the circumstances of the case, the person is    
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper; and                                                                     

3. to the extent that a director, officer, employee or agent of a corporation   
has been successful on the merits or otherwise in defense of any action, suit or
proceeding, or in defense of any claim, issue or matter therein, the corporation
shall indemnify him against expenses, including attorneys' fees, actually and   
reasonably incurred by him in connection with the defense.                      

We may make any discretionary indemnification only as authorized in the specific
case upon a determination that indemnification of the director, officer,        
employee or agent is proper in the circumstances.                               

The determination must be made:                                                 

- by our stockholders, or;                                                      

- by our board of directors by majority vote of a quorum consisting of directors
who were not parties to the action, suit or proceeding; - if a majority vote of 
a quorum consisting of directors who were not parties to the action, suit or    
proceeding so orders, by independent legal counsel in a written opinion; - if a 
quorum consisting of directors who were not parties to the action, suit or      
proceeding cannot be obtained, by independent legal counsel in a written        
opinion; or - by court order.                                                   

        Our Articles of Incorporation provide for indemnification of agents of
the Company through bylaw provisions, agreements with such agents or other      
persons, vote of stockholders or disinterested directors or otherwise, in excess
of the indemnification and advancement otherwise permitted under, and subject   

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only to the limits imposed by, Nevada law. Our Articles of Incorporation further
provide that we may purchase and maintain insurance against any liability       
asserted against an indemnified party.                                          

       However, insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "Securities Act"), may be permitted to  
directors, officers and controlling persons of the Company pursuant to the      
foregoing provisions, or otherwise, the Company has been advised that in the    
opinion of the Securities and Exchange Commission such indemnification is       
against public policy as expressed in the Securities Act and is, therefore,     
unenforceable. In the event that a claim for indemnification against such       
liabilities (other than the payment by the Company of expenses incurred or paid 
by a director, officer or controlling person of the Company in the successful   
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the   
Company will, unless in the opinion of its counsel the matter has been settled  
by controlling precedent, submit to a court of appropriate jurisdiction the     
question whether such indemnification by it is against public policy as         
expressed in the Securities Act and will be governed by the final adjudication  
of such issue.                                                                  

 LEGAL MATTERS

The validity of the Shares offered will be passed upon for us by Bondy & Schloss
LLP, New York, New York.                                                        

 WHERE YOU CAN FIND MORE INFORMATION

We are required to file annual, quarterly and special reports, proxy statements,
any amendments to those reports and other information with the SEC. You may read
and copy any documents filed by us with the SEC at the SEC's public reference   
room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at  
1-800-SEC-0330 for further information on the public reference room. Reports,   
proxy statements and information statements, any amendments to those reports and
other information filed electronically by us with the SEC are available to the  
public at the SEC's website at http://www.sec.gov.                              

 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by us with the SEC are incorporated herein by     
reference as of their respective dates of filing and shall be deemed to be a    
part hereof:                                                                    

o        Our Annual Report on Form 10-KSB for the year ended October 31, 2004,  
and any amendments thereto;                                                     

o        Our Quarterly Report on Forms 10-QSB for the quarter ended January 31, 
2005, and any amendments thereto;                                               

o       The Current Report on Form 8-K, filed with the SEC on December 16, 2004.

o       All other reports filed pursuant to Section 13(a) or 15(d) of the       
Securities Exchange Act of 1934, as amended, since October 31, 2004;            

o       The description of our common stock contained on the Form SB-2          
registration statement, filed with the SEC on February 2, 2004, as amended; and 

o       All documents filed by us pursuant to Section 13(a), 13(c), 14, or      
15(d) of the Securities Exchange Act of 1934, as amended, subsequent to the date
of this prospectus and prior to the filing of a post-effective amendment which  
indicates that all securities offered have been sold or which deregisters all   
securities then remaining unsold shall be deemed to be incorporated by reference
and a part of this Prospectus from the date such documents are filed.           

For purposes of this prospectus, any statement in a document  
incorporated or deemed incorporated by reference is modified or superseded to   
the extent that a statement in this prospectus, or in any subsequently filed    
document which is or is deemed to be incorporated by reference, modifies or     
supersedes it. Any statement so modified or superseded is not, except as so     
modified or superseded, to constitute a part of this Prospectus.                

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       Upon written or oral request, we will provide a copy of the documents
we incorporate by reference, at no cost, to any person who receives this        
Prospectus, including any beneficial owner of our Common Stock. To request a    
copy of any or all of these documents, you should write or telephone us at the  
following address and telephone number:                                         

1700 Rockville Pike, Suite 400
 Rockville, Maryland 20852
(301) 881-0080

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 PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.  Incorporation of Documents by Reference                                

The following documents filed by us with the Securities and Exchange Commission 
(the "SEC") are incorporated herein by reference as of their respective dates of
filing and shall be deemed to be a part hereof:                                 

o        Our Annual Report on Form 10-KSB for the year ended October 31, 2004,  
and any amendments thereto;                                                     

o        Our Quarterly Report on Forms 10-QSB for the quarter ended January 31, 
2005, and any amendments thereto;                                               

o        The Current Report on Forms 8-K, filed with the SEC on December 16,    
2004.                                                                           

o        All other reports filed pursuant to Section 13(a) or 15(d) of the      
Securities Exchange Act of 1934, as amended, since October 31, 2004;            

o        The description of our Common Stock contained on the Form SB-2         
registration statement, filed with the SEC on February 2, 2004, as amended; and 

All documents filed by us pursuant to Section 13(a), 13(c), 14, or 15(d) of the 
Securities Exchange Act of 1934, as amended, subsequent to the date of this     
Registration Statement and prior to the filing of a post-effective amendment    
which indicates that all securities offered have been sold or which deregisters 
all securities then remaining unsold shall be deemed to be incorporated by      
reference and a part of this prospectus from the date such documents are filed. 

For purposes of this Registration Statement, any statement in a document        
incorporated or deemed incorporated by reference is modified or superseded to   
the extent that a statement in this Registration Statement, or in any           
subsequently filed document which is or is deemed to be incorporated by         
reference, modifies or supersedes it. Any statement so modified or superseded is
not, except as so modified or superseded, to constitute a part of this          
Registration Statement.                                                         

Item 4.  Description of Securities                                              

Not applicable.                                                                 

Item 5.  Interests of Named Experts and Counsel                                 

Not applicable.                                                                 

Item 6.  Indemnification of Directors and Officers                              

Nevada corporation law provides that:                                           

1. a corporation may indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or      
proceeding, whether civil, criminal, administrative or investigative, except an 
action by or in the right of the corporation, by reason of the fact that he is  
or was a director, officer, employee or agent of the corporation, or is or was  
serving at the request of the corporation as a director, officer, employee or   
agent of another corporation, partnership, joint venture, trust or other        
enterprise, against expenses, including attorneys' fees, judgments, fines and   
amounts paid in settlement actually and reasonably incurred by him in connection
with the action, suit or proceeding if he acted in good faith and in a manner   
which he reasonably believed to be in or not opposed to the best interests of   
the corporation, and, with respect to any criminal action or proceeding, had no 
reasonable cause to believe his conduct was unlawful;                           

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2. a corporation may indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or 
in the right of the corporation to procure a judgment in its favor by reason of 
the fact that he is or was a director, officer, employee or agent of the        
corporation, or is or was serving at the request of the corporation as a        
director, officer, employee or agent of another corporation, partnership, joint 
venture, trust or other enterprise against expenses, including amounts paid in  
settlement and attorneys' fees actually and reasonably incurred by him in       
connection with the defense or settlement of the action or suit if he acted in  
good faith and in a manner which he reasonably believed to be in or not opposed 
to the best interests of the corporation. Indemnification may not be made for   
any claim, issue or matter as to which such a person has been adjudged by a     
court of competent jurisdiction, after exhaustion of all appeals therefrom, to  
be liable to the corporation or for amounts paid in settlement to the           
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon       
application that in view of all the circumstances of the case, the person is    
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper; and                                                                     

3. to the extent that a director, officer, employee or agent of a corporation   
has been successful on the merits or otherwise in defense of any action, suit or
proceeding, or in defense of any claim, issue or matter therein, the corporation
shall indemnify him against expenses, including attorneys' fees, actually and   
reasonably incurred by him in connection with the defense.                      

We may make any discretionary indemnification only as authorized in the specific
case upon a determination that indemnification of the director, officer,        
employee or agent is proper in the circumstances.                               

The determination must be made:                                                 

- by our stockholders, or;                                                      

- by our board of directors by majority vote of a quorum consisting of directors
who were not parties to the action, suit or proceeding; - if a majority vote of 
a quorum consisting of directors who were not parties to the action, suit or    
proceeding so orders, by independent legal counsel in a written opinion; - if a 
quorum consisting of directors who were not parties to the action, suit or      
proceeding cannot be obtained, by independent legal counsel in a written        
opinion; or - by court order.                                                   

        Our Articles of Incorporation provide for indemnification of agents of
the Company through bylaw provisions, agreements with such agents or other      
persons, vote of stockholders or disinterested directors or otherwise, in excess
of the indemnification and advancement otherwise permitted under, and subject   
only to the limits imposed by, Nevada law. Our Articles of Incorporation further
provide that we may purchase and maintain insurance against any liability       
asserted against an indemnified party.                                          

       However, insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "Securities Act"), may be permitted to  
directors, officers and controlling persons of the Company pursuant to the      
foregoing provisions, or otherwise, the Company has been advised that in the    
opinion of the Securities and Exchange Commission such indemnification is       
against public policy as expressed in the Securities Act and is, therefore,     
unenforceable. In the event that a claim for indemnification against such       
liabilities (other than the payment by the Company of expenses incurred or paid 
by a director, officer or controlling person of the Company in the successful   
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the   
Company will, unless in the opinion of its counsel the matter has been settled  
by controlling precedent, submit to a court of appropriate jurisdiction the     
question whether such indemnification by it is against public policy as         
expressed in the Securities Act and will be governed by the final adjudication  
of such issue.                                                                  

Item 7.  Exemption from Registration Claimed                                    

Not applicable.                                                                 

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Item 8.  Exhibits                                                               

The following exhibits are filed as part of this Registration Statement:        

Exhibit No.                Description                                          

4.1       2002 Stock Incentive Plan (incorporated by reference to Exhibit 4.2 to
the Form SB-2, filed on February 2, 2004)                   
4.2       2003 Stock Incentive Plan (incorporated by reference to Exhibit 4.3 to
the Form SB-2, filed on February 2, 2004)                   
4.3       Amended and Restated Articles of Incorporation (incorporated by       
         reference to Exhibit 3.1 to the Form SB-2, filed on February 2, 2004)
4.4       By-Laws (incorporated by reference to Exhibit 3.2 to Form SB-2, filed 
on February 2, 2004)                                        
5.1       Opinion of Bondy & Schloss LLP                                        
23.1      Consent of Aronson & Company                                          
23.2      Consent of Bondy & Schloss LLP (contained in Exhibit 5.1)             
24.1      Power of Attorney (reference is made to the signature page)           

Item 9.  Undertakings                                                           

The undersigned registrant hereby undertakes:                                   

(1) To file, during any period in which offers or sales are being made, a       
post-effective amendment to the registration statement:                         

(i)  To include any prospectus required by Section 10(a)(3) of the Securities   
Act;                                                                            

(ii) To reflect in the prospectus any facts or events arising after the         
effective date of the registration statement (or the most recent post-effective 
amendment thereof) which, individually or in the aggregate, represent a         
fundamental change in the information set forth in the registration statement.  
Notwithstanding the foregoing, any increase or decrease in volume of securities 
offered (if the total dollar value of securities offered would not exceed that  
which was registered) and any deviation from the low or high end of the         
estimated maximum offering range may be reflected in the form of prospectus     
filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in 
volume and price represent no more than 20 percent change in the maximum        
aggregate offering price set forth in the "Calculation of Registration Fee"     
table in the effective registration statement; and                              

(iii) To include any material information with respect to the plan of           
distribution not disclosed previously in the registration statement or any      
material change to such information in the registration statement; provided,    
however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the           
information required to be included in a post-effective amendment by those      
paragraphs is contained in periodic reports filed with or furnished to the SEC  
by the registrant pursuant to Sections 13 or 15(d) of the Exchange Act that are 
incorporated by reference in the registration statement.                        

(2) That, for the purpose of determining any liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new registration     
statement relating to the securities offered therein, and the offering of such  
securities at that time shall be deemed to be the initial bona fide offering    
thereof.                                                                        

(3) To remove from registration by means of a post-effective amendment any of   
the securities being registered which remain unsold at the termination of the   
offering.                                                                       

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant      
certifies that it has reasonable grounds to believe that it meets all of the    
requirements for filing on a Form S-8 and has duly caused this Registration     
Statement to be signed on its behalf by the undersigned, thereunto duly         
authorized, in the City of Rockville, State of Maryland, on May 24, 2005.       

 POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each director and officer whose signature  
appears below constitutes and appoints Malcolm H. Philips Jr., as such person's 
true and lawful attorney-in-fact and agent, with full powers of substitution and
re-substitution, for such person in name, place and stead, to sign in any and   
all amendments (including post-effective amendments) to this Registration       
Statement on Form S-8, in any and all capacities, and to file the same, with all
exhibits thereto and all other documents in connection therewith, with the      
Securities and Exchange Commission, granting unto such attorney-in-fact and     
agent, full power and authority to do and perform each and every act and thing  
requisite and necessary to be done, as fully to all intents and purposes as he  
might or could do in person, hereby ratifying and confirming all that such      
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration   
Statement has been signed by the following persons in the capacities and on the 
dates stated.                                                                   

                                                        [Enlarge/Download Table]


NAME                      TITLE                                                 DATE        
-----------------------   ----------------------------------------------------  ----        
                                                                                            

/s/ Malcolm H. Philips    CEO/President/Chairman of the Board of Directors      May 24, 2005
------------------------                                                                    
Malcolm H. Philips Jr                                                                       

/s/ Timothy Shriver       Sr. Vice President of Technical Operations/Director   May 24, 2005
------------------------                                                                    
Timothy Shriver                                                                             

/s/ George Dials          Director                                              May 24, 2005
------------------------                                                                    
George Dials                                                                                

/s/ Dr. BD Liaw           Director                                              May 24, 2005
------------------------                                                                    
Dr. BD Liaw                                                                                 

/s/ John A. Knubel        Director                                              May 24, 2005
------------------------                                                                    
John A. Knubel                                                                              


20

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘S-8’ Filing		Date		First		Last			Other Filings
		12/11/06		11
Filed on / Effective on:		5/24/05		1		23
		5/18/05		2		4
		1/31/05		18		20			10QSB
		12/16/04		18		20			424B5,  8-K
		10/31/04		6		20			10KSB
		2/2/04		18		22			SB-2
		7/1/03		15
		7/1/02		15
		5/27/02		15
		7/6/01		13
									List all Filings