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Amendment to Registration of Securities of a Small-Business Issuer   —   Form 10-SB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10SB12G/A   Amendment to Registration of Securities of a          33    137K 
                          Small-Business Issuer                                  

Document Table of Contents

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 UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-SB/A

 GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934 

 CytoGenix, Inc.
(Name of Small Business Issuer in its charter)

Nevada                               76-0484097   
(State or other jurisdiction of     (I.R.S. Employer Identification No.)  
incorporation or organization)                                          

9881 South Wilcrest, Houston, Texas     77099 
(Address of principal executive offices)(Zip Code)  

Issuer's telephone number, (281) 988-6118                                       

Securities to be registered under Section 12(b) of the Act:                     

Title of each class                       Name of each exchange on which        
to be so registered                       each class is to be registered        
NA                                              NA                  

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

The registrant had 28,814,442 shares of Common Stock, at $.001 par value,       
outstanding as of September 30,1999.                                            

(Title of class)                                                                

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 CYTOGENIX, INC.

FORM 10 - SB

TABLE OF CONTENTS                                                               

PART I

ITEM  1.  DESCRIPTION OF BUSINESS........................................    2  

ITEM  2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR                               
        PLAN OF OPERATION..............................................    6

ITEM  3.  DESCRIPTION OF PROPERTY........................................    8  

ITEM  4.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL                              
        OWNERS AND MANAGEMENT..........................................    8

ITEM  5.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS                              
        AND CONTROL PERSONS............................................    9

ITEM  6.  EXECUTIVE COMPENSATION.........................................   10  

ITEM  7.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................   10  

ITEM  8.  LEGAL PROCEEDINGS..............................................   10  

ITEM  9.  MARKET FOR COMMON EQUITY AND RELATED                                  
        SHAREHOLDER MATTERS............................................   10

ITEM 10.  DESCRIPTION OF SECURITIES......................................   12  

ITEM 12.  INDEMNIFICATION OF DIRECTORS AND OFFICERS......................   12  

ITEM 13.  FINANCIAL STATEMENTS...........................................   12  

PART F/S
FINANCIAL STATEMENTS OF THE REGISTRANT...................................  F-1  

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Item 1.           Description of Business                                       

CytoGenix, Inc. (the company) is a development stage biotechnology company that 
has never had any sales. The primary focus of the CytoGenix, Inc. research is   
the implementing and enabling technologies useful in the final stage of         
delivery of therapeutic DNA and RNA molecules in cells.                         

The company was formed in 1995 as a biomedical research and development         
operation. Equity funding has been the only source of operational and research  
support from the outset. Capital resources have been carefully husbanded with   
the bulk of the funding allocated directly to research with administrative      
overhead held to a minimum.                                                     

IN AN EFFORT TO EXPLAIN THE CYTOGENIX(TM) ANTISENSE MOLECULE DELIVERY TECHNOLOGY
(SSDNA INTRACELLULAR EXPRESSION VECTOR) IN EVERYDAY TERMS, SCIENTIFIC ACCURACY  
HAS NECESSARILY BEEN COMPROMISED. A FULLY ACCURATE SCIENTIFIC EXPLANATION IS    
AVAILABLE ON THE CYTOGENIX WEBSITE, WWW.CYTOGENIX.COM.                          

THE ROLE OF DNA                                                                 

The DNA sequence within a gene is what cells use to produce proteins, which     
perform the most important tasks in the body. By studying how genes work and    
understanding how they go awry, scientists expect to develop new medicines that 
attack the underlying causes of disease, not just the symptoms. Makers of the   
new gene-based drugs hope they will offer advantages over existing treatments   
and command premium prices.                                                     

ANTISENSE THERAPY                                                               

The genetic code (operating system) for the human body is made up of nucleic    
acid constructs (DNA) which naturally occurs as a double strand of four         
nucleotides arranged in various sequences that control every function of the    
body. A similar material, RNA (three of the four nucleotides are the same) is   
used to convey the information contained in the DNA to other parts of the cells 
where various biological functions are performed, like the production of amino  
acids, proteins, enzymes, hormones, etc.                                        

Most diseases are caused by incorrect or excess production of proteins in the   
cells of the body. This may be caused by a faulty gene or the activities of a   
bacteria or virus.                                                              

To produce a protein, the cell first makes a messenger RNA (mRNA) copy of the   
DNA code containing the information necessary to produce the protein. This is   
called the "sense" molecule. This message then moves to another part of the cell
where it is translated into the process to produce the protein.                 

Scientists use the information content of the mRNA nucleotide sequence to       
construct highly specific "Antisense" molecules made up of single stranded DNA  
(ssDNA) comprised of the same naturally occurring biological material (nucleic  
acid) already found in the cells. An ssDNA antisense molecule specifically binds
to and neutralizes the mRNA sequence coding for a target protein to prevent the 
cell from using that message to make that protein                               

Because of their specificity, Antisense molecules don't have the potential for  
toxicity of traditional chemical or herbal compounds. In addition, Antisense    
molecules can be designed to treat a wide range of infectious and inflammatory  
diseases, cardiovascular diseases, and cancer.                                  

A key distinction of Antisense therapy is that it intervenes earlier in the     
disease process than traditional drug therapies.                                

Biotech researchers have identified and patented over 600 of the ssDNA molecules
called oligodeoxyribonucleotides (ODNs) that are potential Antisense agents. The
impediment to developing effective therapies using the Antisense molecules has  
been the problem of "delivering" the ODNs into individual cells where they can  
bind to the offending mRNA and prevent the production of harmful proteins.      

This activity involves the design and use of a biological "vector". This use of 
the term "vector" implies is a recombinant biological construct (genetically    
engineered molecule) containing synthesized DNA sequences that may be delivered 
to a specific location by specific means with defined results.                  

The CytoGenix(TM) "ssDNA intracellular expression vector " (TroVec(TM))         
overcomes the final stage "delivery" barrier by actually synthesizing sequence  
specific ODN antisense molecules in the cell where they must be to do their job.

By way of illustration: The DNA in the cell is the communications center that   
sends instructions to the cell to produce harmful proteins. This DNA may be part
of the basic genetic structure (genome) or it could be a parasitic rogue gene,  
such as a virus, that may inhabit certain cells. RNA is the signal that carries 
the message. The antisense ODN "delivered" by the CytoGenix(TM) vector          
technology intercepts the signal and cancels the message. The harmful proteins  
are therefore not produced. The disease is arrested.                            

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ANTISENSE THERAPY vis a vis GENE THERAPY                                        

Unlike Antisense Therapy, which merely intercepts and cancels the messages that 
result in the production of disease causing proteins, Gene Therapy involves     
actually modifying the genetic code contained in the chromosomes of each cell.  
This is a much more radical procedure and has the inherent potential for        
unanticipated and unwanted results.                                             

Gene therapy is the equivalent to rewriting part of the basic code in the       
operating system of a computer. Antisense therapy is analogous to deleting a    
file from a computer.                                                           

A MORE COMPREHENSIVE SCIENTIFIC EXPLANATION OF COMPANY TECHNOLOGY               

Genetics research has discovered that it is possible to interrupt the progress  
of many diseases by interfering with the transmission of genetic information    
within the individual cells thus preventing the disease at the cellular level.  
This is called "antisense" therapy. An "antisense molecule" (ODN) must be       
introduced into the infected cells to intercept the "sense" messenger molecule  
and cancel it out. The CytoGenix, Inc. technology enables the process by        
"delivering" the antisense molecule to the targeted cells. The company intends  
to license its technology to commercial interests who own the patents for the   
various gene sequences.                                                         

The company has developed a "cassette" (Antisense molecule delivery system) that
can be inserted into a viral delivery/expression vector of choice. The cassette 
enables the vector to express any desired sequence-specific, single-stranded DNA
(ssDNA) ODN.                                                                    

Most human diseases arise from the function or dysfunction of genes within the  
body, either those of pathogens, such as viruses, or the body's own genes. New  
technological advances in molecular biology have led to the identification of   
genes associated with major human diseases and the determination of their       
genetic basis.                                                                  

Antisense oligonucleotide technology is providing a highly specific strategy for
targeting a wide range of diseases at the genetic level, by interfering with    
mRNA to inhibit production of disease associated proteins.                      

In this rapidly expanding market, the race is on to develop ODN drugs for the   
treatment of diseases such as cancer, HIV, Hepatitis B and a range of           
inflammatory conditions such as arthritis and psoriasis.                        

According to The Institute for Human Gene Therapy at the University of          
Pennsylvania research scientists believe that antisense approaches coupled with 
available genome and viral genetic information could ultimately lead to viable  
genetic medical therapies. Currently, there are two major types of antisense    
molecules used in antisense strategies. The first uses RNA to form duplexes with
cellular RNA. RNA expression vectors offer high transfection rates, cell        
targeting, and in vivo transcription of the desired RNA. However, affecting     
messenger RNA-antisense RNA duplex formation has often proved ineffective       
because of low hybridization rates to target RNA and a brief antisense RNA      
half-life due to host-cell mediated degradation.                                

The second antisense molecule types are ODN's composed of DNA or DNA analogs.   
DNA oligonucleotide mediated antisense formation with messenger RNA has proved  
effective in cell culture. Advantages of using DNA oligos are that DNA has a    
higher binding affinity for cellular RNA than does an RNA molecule and DNA has a
longer half-life than RNA. Most importantly, DNA-RNA hybrids activate RNase H,  
an enzyme which digests the target RNA in the duplex. The RNase H enzymatic     
activity permanently removes the RNA from the cell and frees the ODN to bind to 
additional RNAs. This subsequently lowers the amount of DNA ODN's required for  
RNA hybridization and lessens problems caused by toxicity. The list, of viral   
and chromosomal genes that have been successfully turned off in cell culture, by
this antisense mechanism, is fast growing and the number of patents issued on   
specific genetic sequences for antisense use is also expanding rapidly. There   
are approximately 600 such U.S. patents at this writing.                        

Heretofore, DNA and DNA analog ODN mediated antisense strategies have been      
ineffective as an antisense therapy in living organisms. In contrast to RNA     
vectors, no effective ssDNA vector has previously been designed which can bind, 
penetrate, and synthesize ssDNA in cells and tissues of living animals. The DNA 
ODN antisense approach has worked well in vitro but not in vivo because cells   
cultured in vitro, e.g., in cell cultures, can be saturated with the ODN, a     
factor that is not practical in the living organism. In fact, even with liposome
uptake enhancers and chemical modifications to the DNA backbone, which increase 
half-life, the requisite quantity of DNA oligos introduced into the organism is 
often toxic. Animal studies have shown this approach to induce hypotension,     
renal failure, coma, and death.                                                 

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The CytoGenix, Inc. proprietary technology merges the above antisense           
approaches. Our new technology allows a delivery/expression vector to bind      
cells, enter the cell, and replicate. Our cassette, when inserted into the      
desired targeting vector, will express sequence-specific ssDNA rather than RNA. 
The ssDNA (1) can be regulated to attempt expression of ssDNA at therapeutic but
subtoxic levels, (2) is sequence specific and possesses a relatively long       
half-life, (3) can be targeted to multiple sites on a target RNA or be targeted 
to multiple target RNAs, (4) provide binding sites for DNA- binding proteins,   
and (5) induce RNase H activity freeing the ssDNA to hybridize with other RNAs. 

DEVELOPMENT TO DATE                                                             

The ssDNA expression vector technology (antisense molecule delivery system) was 
developed as the direct result of an exclusive license and sponsored research   
agreement with Dr. Charles Conrad and InGene, Inc. Dr. Conrad first invented and
filed a patent on the precursor technology of expressing single strands of      
sequence specific DNA in bacteria as a research laboratory technique, not       
contemplating any therapeutic use in living organisms.                          

CytoGenix personnel became aware of the technique through a mutual patent       
attorney and negotiated the license and a continuing sponsored research         
agreement to revive the patent and to expand and refine the technology for      
possible use in human and animal therapies. Each of these developments was      
reported in detail in press releases which are available on the company website.

Beta test kits of the ssDNA vector have been provided at cost of $250.00 by     
CytoGenix to 12 universities and commercial biotech R&D companies in order to   
demonstrate and validate the CytoGenix research results through impartial third 
party testing. Additional live animal (IN VIVO) studies are budgeted for this   
year beginning with one in progress at the Southwest Foundation for Biomedical  
Research in San Antonio, Texas where CytoGenix's TroVec(TM) technology will be  
used to deliver molecules that are believed to antisense SIV (Simian Immuno     
Virus) which is the monkey version of HIV.                                      

The technology has been successfully tested by our principal research facility, 
Ingene, Inc. in various tissue samples. The company has also delivered sample   
versions of the technology to over a dozen universities for third party         
validation of the product. The costs of the studies will be funded by the       
universities. The results of these studies will be published upon their         
completion sometime in the second quarter 2000. In addition to these ongoing    
studies the company intends to publish a comprehensive manuscript describing    
these studies in concert or subsequent to the issuance of its first patent      
expected in March, 2000.                                                        

Having developed an effective technology for the delivery of therapeutic        
antisense molecules, the choice is how to most effectively get the products     
resulting from the technology into the health care marketplace.                 

The company has spent approximately $1,000,000 per year for the past two years  
on research and development activities.                                         

To date there are limited ways to deliver single stranded DNA oligonucleotides  
into cells, but they are not reliable and can only be used in limited           
applications. The company's ssDNA expression vector can be used in very broad   
applications and can be delivered safely into the cells of living animals. To   
our knowledge there is no effective competition to the company's proprietary    
technology. On December 28, 1998 the United States Patent Office (USPTO)        
notified the company that it has allowed all the claims contained in the patent 
application for the company's single stranded DNA expression vector. The Patent 
is expected to issue in March, 2000.                                            

The company has 7 full time employees.                                          

Dr. Jonathan Elliston was hired on September 1, 1999 as Director of Strategic   
Planing and Intellectual Property. Ms. Kim Totsky was hired as an Executive     
Assistant. The five Officers of the company are described in Item 5,"Directors, 
Officers, Promoters and Control Persons."                                       

Regulatory Issues                                                               

The FDA approves compounds that have been demonstrated both safe and effective  
as individual parts and in combination. The safety of our vector by itself is   
easily demonstrated since it has no efficacy by itself. The task is to prove .  
safety with a sufficient number of efficacious ODN to comfortably extrapolate   
universal safety of the vector alone.                                           

The FDA recognizes different categories of disease that deserve different       
approval standards. The most lenient is accorded to those drugs that have been  
designated "compassionate use" in that any dangers or side effects they may     
exhibit are less harmful than those inherent in the disease itself when compared
with the potential benefits.                                                    

Certain diseases have been designated as "orphan" diseases in that there are so 
few cases that the major drug companies cannot justify the expense of           
investigational development and submitting to the full approval process. Many of
the orphan diseases, although rare, are nonetheless devastating to the patients 
and their families from both a physical and financial point of view. The FDA    
therefore, has afforded less rigorous requirements for their approval.          

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Accordingly, application for approval of disease specific ODN's for "orphan"    
drugs with "compassionate use" status offer the easiest and fastest way to      
demonstrate the safety of our vector and the efficacy of the specific ODN's in  
combination.                                                                    

Although this approach does not represent enormous profit potential in the early
stages, it minimizes the expense and time involved in gaining the first set of  
approvals. Therefore, an important component of the company's regulatory        
strategy involves cycling through a number of applications to the FDA beginning 
with the simplest and easiest to win approval. The Company is now in the process
of deciding which applications should be best.                                  

Company Technology                                                              

The technology that became the ssDNA IEV was invented by an MD, Dr. Charles     
Conrad, founder of InGene, Inc and a practicing neural oncologist. The          
technology was exclusively licensed and developed under a sponsored research    
agreement by CytoGenix, Inc.. The United States Patent Office (USPTO) has       
allowed all the claims and the first ssDNA IEV patent is scheduled to be issued 
in March 2000. Patent filings including co-inventions by CytoGenix, Inc.        
scientists and Dr. Conrad are in process. The company has also initiated work on
additional technologies and is in the process of filing patents with the USPTO. 

The company has developed a "cassette" that can be inserted into a viral        
delivery/expression vector of choice. The cassette enables the vector to express
any desired sequence-specific, single-stranded DNA (ssDNA) oligonucleotide.     

Most human diseases arise from the function or dysfunction of genes within the  
body, either those of pathogens, such as viruses, or the body's own genes. New  
technological advances in molecular biology have led to the identification of   
genes associated with major human diseases and the determination of their       
genetic basis.                                                                  

Antisense oligonucleotide technology is providing a highly specific strategy for
targeting a wide range of diseases at the genetic level, by interfering with    
mRNA to inhibit production of disease associated proteins.                      

In this rapidly expanding market, the race is on to develop oligonucleotide     
drugs for the treatment of diseases such as cancer, HIV, Hepatitis B and a range
of inflammatory conditions such as arthritis and psoriasis.                     

According to The Institute for Human Gene Therapy at the University of          
Pennsylvania research scientists agree that antisense approaches coupled with   
available genome and viral genetic information will ultimately lead to viable   
genetic medical therapies. Currently, there are two major types of antisense    
molecules used in antisense strategies. The first uses RNA to form duplexes with
cellular RNA. RNA expression vectors offer high transfection rates, cell        
targeting, and in vivo transcription of the desired RNA. However, affecting     
messenger RNA-antisense RNA duplex formation has often proved ineffective       
because of low hybridization rates to target RNA and a brief antisense RNA      
half-life due to host-cell mediated degradation.                                

The second antisense molecule types are oligonucleotides composed of DNA or DNA 
analogs. DNA oligonucleotide mediated antisense formation with messenger RNA has
proved effective in cell culture. Advantages of using DNA oligos are that DNA   
has a higher binding affinity for cellular RNA than does an RNA molecule and DNA
has a longer half-life than RNA. Most importantly, DNA-RNA hybrids activate     
RNase H, an enzyme which digests the target RNA in the duplex. The RNase H      
enzymatic activity permanently removes the RNA from the cell and frees the oligo
to bind to additional RNAs. This subsequently lowers the amount of DNA oligos   
required for RNA hybridization and lessens problems caused by toxicity. The     
list, of viral and chromosomal genes that have been successfully turned off in  
cell culture, by this antisense mechanism, is fast growing and the number of    
patents issued on specific genetic sequences for antisense use is also expanding
rapidly. There are approximately 600 such U.S. patents at this writing.         

Heretofore, DNA and DNA analog oligonucleotide mediated antisense strategies    
have been ineffective as an antisense therapy in living organisms. In contrast  
to RNA vectors, no effective ssDNA vector has previously been designed which can
bind, penetrate, and synthesize ssDNA in cells and tissues of living animals.   
The DNA oligonucleotide antisense approach has worked well in vitro but not in  
vivo because cells cultured in vitro, e.g., in cell cultures, can be saturated  
with the oligonucleotide, a luxury that is not practical in the living organism.
In fact, even with liposome uptake enhancers and chemical modifications to the  
DNA backbone, which increase half-life, the requisite quantity of DNA oligos    
introduced into the organism is often toxic. Animal studies have shown this     
approach to induce hypotension, renal failure, coma, and death.                 

The CytoGenix, Inc. proprietary technology merges the above antisense           
approaches. Our new technology allows a delivery/expression vector to bind      
cells, enter the cell, and replicate. Our cassette, when inserted into the      
desired targeting vector, will express sequence-specific ssDNA rather than RNA. 
The ssDNA (1) can be regulated to attempt expression of ssDNA at therapeutic but
subtoxic levels, (2) is sequence specific and possesses a relatively long       
half-life, (3) can be targeted to multiple sites on a target RNA or be targeted 
to multiple target RNAs, (4) provide binding sites for DNA- binding proteins,   
and (5) induce RNase H activity freeing the ssDNA to hybridize with other RNAs. 

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Item 2.           Management's Discussion and Analysis or Plan of Operation     

The company has budgeted $2,000,000 for operations in fiscal year 2000. $840,000
has been allocated for General & Administrative costs. $930,000 has been        
allocated for Research & Development including 6 animal studies. The scientific 
protocols will be determined in March 2000. $230,000 will be reserved for       
contingencies. The company will rely on equity financing to attain it's working 
capital requirements.                                                           

The traditional method of developing the business aspects of this type of       
biomedical technology is through licensing the use of the technology to other   
biomedical entities (biotechs who have developed therapeutic molecules in need  
of compatible delivery methodology), or to pharmaceutical companies who will    
combine it with therapeutic molecules they have licensed from other biotechs. It
is not uncommon to form strategic alliances with larger biotech companies or    
pharmaceutical companies to collaborate on further research and development.    
Historically, it is not uncommon for smaller biotechs like CytoGenix to be      
acquired or merge with companies with compatible and complementary technology.  
CytoGenix is keeping its options open and will select the route that is most    
advantageous to the shareholders.                                               

There are currently over 600 U.S. patents for ODN's with therapeutic potential, 
each of which is a prospective license for the CytoGenix antisense molecule     
delivery technology. Our standard license calls for a $100,000 initiation fee,  
and a maintenance fee of $15,000 per year versus an 8% royalty, whichever is    
greater. We anticipate 12 to 15 licenses during the calendar year 2000. The     
first to be executed in February 2000 with PharmaGenix, LLC, an affiliated      
company in which CytoGenix is half owner.                                       

CytoGenix has formed a joint enterprise with Professional Compounding Centers of
America (PCCA) called PharmaGenix, LLC that will apply part of the nucleic acid 
technology (synthesized DNA and RNA sequences) to developing non prescription   
products for distribution through the 2,500 member compounding pharmacies that  
are affiliated with PCCA.                                                       

The objective is to generate sufficient revenue by the end of the year 2000 to  
support the company's ongoing research and overhead without depending on equity 
funding and the resultant dilution to shareholders.                             

Sometimes the alliances are more intended to match financing to innovation than 
to match complimentary technologies. Each alliance has a valuable role in the   
biotechnology arena.                                                            

Initial contact has been made by various firms that could result in a strategic 
alliance.                                                                       

CytoGenix, Inc. ability to continue operations in 2000 depends on its success in
obtaining equity financing in an amount sufficient to support its operations    
through the end of 1999, and in connection therewith, is in negotiations with   
several parties to obtain such financing.                                       

Thus far the major role of management has been to obtain the funding for the    
research, monitoring the progress, husbanding intellectual property, and        
development of the technology.                                                  

1) The decision was made early on that equity funding would be the primary      
source with an eye to grants whenever possible. Debt has not been an option.    

2) The management team has successfully kept the G&A extremely low and dedicated
the largest share of available funds for research and development.              

3) The Company has vigorously pursued prosecution of patents for both its       
licensed technology and internally developed technology. The first of such has  
been allowed and is scheduled for issue by November, 1999.                      

4) The combination of Beta Tests and RFP's assures a flow of corroborative data 
while new approaches and technologies are tested.                               

The strategy from this point forward is simple:                                 

1) Provide the ssDNA IEV Test Kits (product samples that may not be reverse     
engineered) to as many respected investigators as possible at cost so that they 
can demonstrate the efficacy of our proprietary vector by delivering their own  
patented oligos.                                                                

2) Complete primate studies being conducted at The Southwest Foundation for     
Biomedical Research, San Antonio, Texas to prove in vivo expression in          
pharmacologically significant quantities. The research is intended to turn off  
or antisense the SIV virus. Results of such studies are expected by the spring  
of 2000.                                                                        

3) Identify promising "compassionate use" therapies that qualify for fast-track 
FDA approval to demonstrate safety and efficacy in human trials.                

This strategy has been initiated and is progressing with deliberate speed. In   
addition, the company is posting Requests for Proposals (RFP) from interested   
and competent research facilities to conduct in vivo studies from a list        
suggested by the CytoGenix, Inc. Scientific Advisory Board.                     

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In Kind Stock Swap                                                              

In January 1999 rules governing Regulation D, 504 Private Placements were       
amended by the U.S. Securities and Exchange Commission whereby issuers were     
compelled to offer one year restricted stock to suitable investors. Prior to    
this amendment, issuers were permitted to offer freely transferable shares to   
investors, typically at a slight discount to market in order to secure equity   
financing. This new rule governing equity financing in the opinion of the       
company placed shareholders at a large disadvantage due to the fact that in     
order to secure funds for continued operations management would be forced to    
offer unusually large discounts to market in consideration for the one year     
restriction for sale of securities.                                             

To continue to fund future operations of the company the management of          
CytoGenix, Inc. decided to offer all current shareholders the opportunity to    
exchange their freely transferable shares for one year restricted shares at a 2 
for 1 ratio.                                                                    

On or about May 13, 1999 management decided not to attempt a Rule 504 offering  
which had previously been the company's main method of raising investor equity  
and to instead offer existing shareholders the opportunity to exchange with the 
Company one share of free trading stock held by the shareholder for two shares  
of restricted stock to be issued by the Company. The Company initially proposed 
to issue a total of 20,000,000 restricted trading shares in exchange for        
10,000,000 free trading shares. The free trading shares would then be sold in   
the market and privately by the Company which would use the funds obtained for  
general corporate purposes. Between, May 16, 1999 and August 21, 1999, a total  
of 424 existing shareholders agreed to exchange a total of 5,825,761 free       
trading shares for 11,651,522 restricted shares. The Company then in a series of
brokerage and private transactions sold a total of 2,611,572 purportedly free   
trading shares in the market realized a total of $ 1,367,813 as a result of such
activity. The Company retained a total of 3,214,189 shares which it received    
from shareholders in the treasury of the Company.                               

No Form D relating to the Exchange offering was filed with the Securities and   
Exchange Commission. The SEC has challenged that the shares sold in the market  
were exempt from registration.                                                  

The Company disputes the following assertions, but it is possible that the sale 
of the free trading shares described above may have violated securities         
registration provisions of the federal and state securities laws which could    
subject the Company to fines, penalties or other regulatory enforcement action. 
There can be no assurance that the SEC or applicable state authorities will not 
pursue any enforcement action. The Company disputes any such liability.         

Additionally, while the Company also disputes the following assertions, it is   
possible that shareholders who purchased the shares described above in market   
transactions may have the right under state and federal securities laws to      
require the Company to repurchase their shares, for the amount originally paid, 
plus interest. The Company disputes any such liability.                         

Based up on the best information available to the Company at this time, the     
Company has calculated a range of possible, but disputed, exposure that exists  
for the Company in light of the disputed civil liabilities described above.     

Accordingly, in the event these disputed civil liabilities were successfully    
asserted, the Company could be liable to certain shareholders who purchased the 
securities in market transactions in an amount of approximately $ 1,367,813 ,   
plus interest. This range of possible exposure is calculated by reference to the
average closing price for a share of the Company's common stock, weighted for   
reported daily volume, during the period May 16, 1999 to January 31, 2000; the  
number of shares possibly sold during the same period of time; and the closing  
price of one share on January 31 , 2000. The foregoing range could be adjusted  
higher or lower depending upon adjustments to any of the referenced items and as
any new information become available to the Company.                            

Shareholders were notified of the In Kind Stock Swap via public press releases, 
information contained on the Internet and through bulletins issued by the       
Depository Trust Company (DTC).                                                 

The company's transfer agency, Nevada Agency and Trust Company (NATCO) of Reno, 
Nevada acted as trustee for the exchange and was issued 20,000,000 shares to    
implement the transaction.                                                      

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The results of the completion of the In Kind Stock Swap are;                    

Number of one year restricted shares issued:                   11,651,522 shares
Number of freely transferable shares transferred to treasury:   5,825,761 shares
Number of freely transferable shares sold from treasury:        2,611,572 shares
Number of freely transferable shares remaining in treasury:     3,214,189 shares

The remaining 8,348,478 shares of the 20,000,000 issued to the trustee NATCO    
were retired back to authorized and un-issued upon completion of the exchange.  

The total number of shares outstanding as of September 27, 1999 is 28,814,442   
common.                                                                         

DIVESTITURE OF PHYSICAL THERAPY ASSOCIATES                                      

One of the early research objectives of CytoGenix was to define and develop a   
method of processing human stem cells (from bone marrow) back to the state of   
total potential (totipotency) that they had as first stage development after    
fertilization, then selectively differentiate the cells to early stage          
(pluripotent) nerve cells. These cells should then have the potential of        
regenerating and reconnecting nerve cells for treatment of brain disorders and  
nerve damage like severed spinal cords. In countries where fetal tissue research
is allowed, like Australia and most of Europe, the effectiveness of the         
totipotent tissue in nerve cell repair has been demonstrated. This new approach 
could be even more effective because it would eliminate any problem of rejection
because it would be made from the patients own cells.                           

CytoGenix purchased Physical Therapy Associates with stock for equity           
(1.5million shares) in order to acquire the technical expertise in traditional  
nerve damage therapy and to provide a platform for future clinical trials       
contemplated after the necessary molecular biology research was completed.      

This line of research was subsequently suspended when the more promising        
antisense molecule delivery (ssDNA expression vector) technology was identified.
The nerve damage repair research was indefinitely postponed because of          
insufficient resources to pursue both research objectives simultaneously.       

CytoGenix divested PTA, who repaid 1,000,000 shares but retained the balance    
(500,000 shares) as compensation for good faith services provided, and to       
reserve the option of revisiting the research when available resources allow.   

Change in Management                                                            

In May of 1999 Laurence Mealey, CEO of the company died, subsequently Mike      
Skillern assumed the position of temporary CEO and President. On September 1,   
1999 Malcolm Skolnick was appointed as CEO and President of the Company. He was 
also appointed as a director of the company beginning September 1, 1999 for a   
term of three years.                                                            

Lawrence Wunderlich, Vice President of Finance and Corporate Secretary was also 
appointed to the Board of Directors on September 1, 1999 for a term of three    
years.                                                                          

Item 3.           Description of Property.                                      

The Company's corporate executive offices are located at 1501 Winrock, #9909,   
Houston, Texas 77057. The Company has occupied this approximate 1100 square foot
unit since August 1998. The facility is in excellent condition and is adequate  
for corporate use. Rent on the facility is $775.00 per month.                   

Item 4.          Security Ownership of Certain Beneficial Owners and Management.

Principal Shareholders                                                          

The following table sets forth the name and address, as of September 30, 1999,  
and the approximate number of Shares of Common Stock of the Company owned of    
record or beneficially by each person who owned of record, or was known by the  
Company to own beneficially, more than 5% of the Company's Common Stock, and the
name and shareholdings of each Officer and Director, and all Officers and       
Directors as a group.                                                           

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Name of                            Number of                 Percent of         
Beneficial Owner                  Shares Owned              Shares Owned        
---------------------------       ------------              ------------        
Skillern Family Partnership         2,000,000                 6.9%   D,O        
2900 South Gessner #504             common                                      
Houston, Texas 77063                                                            

Dell T. Gibson                      1,150,000                 3.9%   D,O        
6524 San Felipe #388                common                                      
Houston, Texas 77057                                                            

Gibson Family Partnership           569,399                   1.9%              
6524 San Felipe #388                common                                      
Houston, Texas, 77057                                                           

Lawrence Wunderlich                 150,000                    .5%   D,O        
6524 San Felipe #388                common                                      
Houston. TX 77057                                                               

Mike Walters, L.P.T.                500,000                   1.7%    D         
1220 Blalock #220                   common                                      
Houston, Texas 77055                                                            

Malcolm Skolnick, Ph.D. J.D.        1,100,000                 3.8%     D,O      
6524 San Felipe #388                common                                      
Houston, Texas   77057                                                          

D     A Director of Company                                                     
O     An Officer of Company                                                     

Officers and Directors as a group:  5,469,399                 18.9%             
Common  

Item 5.           Directors, Executive Officers, Promoters and Control Persons. 

The following table sets forth certain information with respect to each of the  
Directors, executive Officers, key employees and control persons of the Company.

NAME                             TITLE                                          

Malcolm Skolnick           63    Chief Executive Officer, President, Director   
                       Term of Office:    9/30/99 to 9/30/02

Dell Gibson                61    Executive Vice President, Chairman of the Board
                       Term of Office:    9/10/98 to 9/10/02

Mike Skillern              32    Vice President Research & Development, Director
                      Term of Office:   9/10/98 to 9/10/01

Lawrence Wunderlich        41    Vice President, Finance, Director              
                      Term of Office    9/30/99 to 9/10/02

Michael Walters            65    Director                                       
                      Term of Office    9/10/98 to 9/10/01

None of the members of Management are related. The Company has entered into     
agreements with the officers of the Company where they are paid salary of       
$60,000 each per year. Such payment can be made in form of cash or restricted   
common stock at the prevailing ask price of the stock. The officers are given   
the option of accruing cash payments until such time as the Company can afford  
to make such payments, in the opinion of the Board of Directors. The payment of 
stock is based on the closing asked price of the Company's common stock on the  
1st and 15th of each month for the preceding pay period.                        

Malcolm Skolnick has been the Chief Executive Officer and President of the      
Company since September 1, 1999. Prior to that time and for the last 30 years   
Dr. Skolnick was a Professor in the University of Texas Health Sciences Center  
at Houston. Dr. Skolnick received a Ph.D. in physics from Cornell University and
a J.D. from the University of Houston. He is licensed to practice law in Texas  
and is a registered patent attorney.                                            

Mr. Skillern has been an officer of the company since February 1995. Prior to   
that he attended Texas Tech University before working for the State of Texas    
Senate. In 1986 Mr. Skillern worked as Vice President of Finance for Doctors'   
Insurance Exchange in Houston, Texas where he arranged credit lines and         
partnership financing exceeding $1,000,000. Mr. Skillern is the founder and     
currently serves as a Director and Vice President of Research and development   
for CytoGenix, Inc. Mr. Skillern serves as one of three general                 
partners for Skillern Family Partnership,LTD. which owns 2,000,000 common       
shares of the Company.                                                          

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Mr. Gibson has been an officer of the company since February, 1995. He          
graduated from the University of Texas in Austin and has done post graduate     
work there. After U.S. Army service in Europe, Mr. Gibson has worked in a       
wide variety of Sales, Marketing and Management positions with companies such   
as Searle Cardio Pulmonary Instruments and AMSCO Rehab. Mr. Gibson currently    
serves as Vice President and Director for CytoGenix, Inc. Mr.                   
Gibson owns  1,150,000 common shares of The Company. Mr. Gibson serves as one   
of three general partners for the Gibson Family Partnership which owns 569,399  
shares.                                                                         

Mr. Wunderlich worked as a financial consultant at the investment banking       
firm of Josephthal and Company from October 1996 until August 1998. At that     
time Mr. Wunderlich joined the management team of CytoGenix, Inc.               
as Vice President of Finance. Prior to his employment with Josephthal, Mr.      
Wunderlich co-owned The Language Loop from 1991 to 1996 and held the position   
of President. The company was a translation and interpreting service provider   
to international companies. Mr. Wunderlich is fluent in German and Russian.     
Mr. Wunderlich attended the University of Vienna and Manhattan College in       
Riverdale, New York. He owns 150,000 shares.                                    

Michael Walters, L.P.T. has been a Director since February, 1995 and is a       
Licensed Physical Therapist and has been in private practice for over 36 years. 
During this time he has been associated with the Brook Army Hospital Burn Center
in San Antonio, Texas and trained in that facility. He has also served and      
trained in the trauma ward in this same facility. Michael Walters owns 500,000  
shares of Cryogenic Solutions, Inc. common stock.                               

An equity interest in The Company will be made available, on an incentive basis,
to all employees, through an incentive and non-qualified stock option plan.     

Item 6.           Executive Compensation                                        

The Company has entered into agreements with the officers of the Company where  
they are paid salary of $60,000 each per year. Such payment can be made in form 
of cash or restricted common stock at the prevailing ask price of the stock. The
officers are given the option of accruing cash payments until such time as the  
Company can afford to make such payments, in the opinion of the Board of        
Directors. The payment of stock is based on the closing asked price of the      
Company's common stock on the 1st and 15th of each month for the preceding pay  
period.                                                                         

Item 7.           Certain Relationships and Related Transactions                

Management is unaware of any other interests of its officers and directors that 
may create a potential conflict of interest with the Company.                   

Item 8.           Legal Proceedings.                                            

The Company has no pending litigation.                                          

Item 9.           Market for Common Equity and Related Stockholder Matters.     

Principal Market                                                                

The Company's securities are traded on the NASD electronic bulletin board,      
quotations for which are under the symbol "CYGX." The market makers are:        
Herzog, Heine, Geduld, Inc                                                      
USCC Trading/A Division of Fleet Securities                                     
WM.V. Frankel & Co. Inc.                                                        
Hill Thompson Magid & Co., Inc.                                                 
Wein Securities Corp.                                                           
Sharpe Capital, Inc.                                                            
Knight Securities, Inc.                                                         
Waterhouse Securities, Inc.                                                     
Advanced Clearing, Inc.                                                         
Continental Broker-Dealer Corp.                                                 
Brown & Company Securities Corporation                                          
GVR Company                                                                     

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Bid Information                                                                 

The high and low bid price for the Company's common stock for each quarter      
within the last two fiscal years, as received from OTC Bulletin Board follows.  
The quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commission and may not represent actual transactions.                           

                          High     Low
                          ----     ---
Third Quarter Ending 09/30/99      .51      .48         
Second Quarter Ending 06/30/99     .66      .62         
First Quarter Ending 03/31/99      .94      .91         

Fiscal  Year  Ending  December 31, 1998                                         
Fourth Quarter Ending 12/31/98     .54      .51         
Third Quarter Ending 09/30/98      .59      .56         
Second Quarter Ending 06/30/98     .75      .63         
First Quarter Ending 03/31/98      .35      .34         

Fiscal   Year Ending  December 31, 1997                                         
Fourth Quarter Ending 12/31/97     .48      .43         
Third Quarter Ending 09/30/97      .20      .20         
Second Quarter Ending 06/30/97     .30      .30         
First Quarter Ending 03/31/97      .18      .18         

Stockholders                                                                    

There approximately 1260 shareholders of record for the Company as of the date  
of this submission. Dividends To date, the Company has not paid any dividends on
its Common Stock. The payment of dividends, if any, in the future, rests within 
the discretion of its Board of Directors and will depend, among other things,   
upon the Company's earnings, its capital requirements and its financial         
condition, as well as other relevant factors. The Board does not intend to      
declare any dividends in the foreseeable future, but instead intends to retain  
all earnings, if any, for use in the Company's business operations. Under Nevada
corporate law, dividends may be paid out of surplus or, in case there is no     
surplus, out of net profits for the fiscal year in which the dividend is        
declared and/or the preceding fiscal year.                                      

Item 10.    Recent Sales of Unregistered Securities.                            

The following tables outlines all securities the Company sold or issued within  
the past three years without registering the securities under the Securities    
Act, Regulation D Rule 504 (an exemption from registration).                    

Type          Number of      Number of            
Date       of Security   Securities Issued  Investors     Consideration         
--------   -----------   -----------------  ---------   ------------------      
03/25/97   Common        3,687,425          5           Received par value      
                                                 $.001 for a total
                                            of $3,687.00
                                                  to Skillern Family
                                                 Partnership, Dell
                                               Gibson, Malcolm
                                               Skolnick, Susan
                                                  Kerr, Alex Bernal.

03/11/98   Common        1,283,960           9          Received par value      
                                                 $.001 for a total
                                            of $1,283.00
                                                   to Craig Tomlinson,
                                                    Gibson Family Family
                                                    Partnership, Malcolm
                                                      Skolnick, Mark Wisner,
                                               Charles Conrad,
                                             Charles Boyd,
                                                 Harry Morgenthal,
                                                 William Waldroff,
                                               Skillern Family
                                            Partnership.

03/26/98   Common        30,000              1          Received par value      
                                                 $.001 for a total
                                                  of $30.00 to Allan
                                           Richardson.

07/16/98   Common        980,000             7          Received par value      
                                                 $.001 for a total
                                          of $980.00
                                               to InGene Inc.,
                                             Ellis Gibson,
                                                 Charles Bardwell,
                                            Dell Gibson,
                                                Laurence Mealey,
                                                Craig Tomlinson,
                                             Steven Sloat.

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Item 11.    Description of Securities                                           

General                                                                         

The holders of Common Stock are entitled to one vote for each share held of     
record on all matters to be voted on by stockholders. There is no cumulative    
voting with respect to the election of Directors, with the result that the      
holders of more than 50% of the Shares voted for the election of Directors can  
elect all of the Directors. The holders of Common Stock are entitled to receive 
dividends when, as and if declared by the Board of Directors out of funds       
legally available therefore, in the event of liquidation, dissolution or wind up
of the Company, the holders of Common Stock are entitled to share ratably in all
assets remaining available for distribution to them after payment of liabilities
and after provision has been made for each class of stock, if any, having       
preference over the Common Stock. Holders of Shares of Common Stock as such,    
have no conversion, preemptive or other subscription rights, and there are no   
redemption provisions applicable to the Common Stock. The Company has not issued
any Preferred Stock. However, the Preferred Stock if issued, may contain special
preferences as determined by the board of Directors of the Company, including,  
but not limited to, the bearing of interest and convertibility into Shares of   
Common Stock of the Company.                                                    

Item 12.    Indemnification of Directors and Officers.                          

The Company and its affiliates may not be liable to its shareholders for errors 
in judgment or other acts or omissions not amounting to intentional misconduct, 
fraud or a knowing violation of the law, since provisions have been made in the 
Articles of Incorporation and By-laws limiting such liability. The Articles of  
Incorporation and By-laws also provide for indemnification of the Officers and  
Directors of the Company in most cases for any liability suffered by them or    
arising out of their activities as Officers and Directors of the company if they
were not engaged in intentional misconduct, fraud or a knowing violation of the 
law.                                                                            

Item 13.    Financial Statements.                                               

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SIGNATURES

In accordance with Section 12 of the Securities Exchange Act of 1934, the       
registrant caused this registration statement to be signed on its behalf by the 
undersigned, thereunto duly authorized.                                         

       /s/ LAWRENCE WUNDERLICH
                                    Lawrence Wunderlich, Chief Financial Officer
                                  (Registrant)

Date_________________________   By______________________________________________
                                    (Signature)*

*Print the name and title of each signing officer under his or her signature.   

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CYTOGENIX, INC. 
(A Development Stage Company) 
BALANCE SHEET 
As of September 30, 1999 and December 31, 1998
(UNAUDITED) 

                                                                [Download Table]

                                                 SEP' 30, 1999   DEC' 31, 1998
                                                 -------------   -------------
                                                                              
ASSETS                                                                        

    CURRENT ASSETS                                                            
       CHECKING/SAVINGS                                                       
          COASTAL .............................. $   28,274.29   $  173,231.84
          DONALDSON, LUFKIN & JENRETTE -MM .....          4.81                

                                                 -------------   -------------
       TOTAL CHECKING/SAVINGS .................. $   28,279.10   $  173,231.84

       OTHER CURRENT ASSETS                                                   
          OTHER CURRENT ASSETS                                                

             FEDERAL INCOME TAX WITHHELD ....... $       18.65                
             PETTY CASH ........................        600.00   $      600.00
                                                 -------------   -------------
       TOTAL OTHER CURRENT ASSETS .............. $      618.65   $      600.00
                                                 -------------   -------------
    TOTAL CURRENT ASSETS ....................... $   28,897.75   $  173,831.84

    FIXED ASSETS                                                              

       RESEARCH AND DEVELOPMENT ASSET                                         

          COMPUTER EQUIPMENT ................... $    2,079.24   $       79.24
          CYROSTORAGE ..........................      1,457.91        1,457.91
          FREEZER ..............................        600.00        3,000.00
          PHOENIX-CENTRIFUGE/MICROSCOPE ........      2,500.00        2,500.00
          PHOENIX-MICROSCOPE ...................      1,259.91        1,259.91
          PHOENIX -1/2 CENTRIFUGE ..............      1,982.34        1,982.34
          PHOENIX EQUIPMENT-INCUBATOR ..........      4,319.08        4,319.08
          REFRIGERATOR .........................        400.00                
          SHAKER BATH ..........................      1,800.00                
          SHELVES FOR LAB ......................        291.36          291.36
          STRALIGENE-PCR MACHINE ...............      8,177.74        8,177.74
          VWR-INCUBATOR ........................      2,208.21        2,208.21
          VWR-WATER BATH/PLATFORM ..............      3,742.23        3,742.23
          ACC. DEPRECIATION ....................    (16,785.24)      -9,970.74
                                                 -------------   -------------
       TOTAL RESEARCH AND DEVELOPMENT ASSET .... $   14,032.78   $   19,047.28
    TOTAL FIXED ASSETS ......................... $   14,032.78   $   19,047.28
    OTHER ASSETS                                                              
       DEVELOPMENT STAGE EXPENSES                                             

          ACCOUNTING FEES ...................... $   22,664.62   $    8,395.00
          ADVERTISING ..........................     18,963.64       16,813.87
          AUTO ALLOWANCE .......................      3,300.00          600.00
          AUTO INSURANCE .......................      2,986.58        2,986.58

                                                Accompanying Notes to Statements

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CYTOGENIX, INC. 
(A Development Stage Company) 
 BALANCE SHEET - Continued
As of September 30, 1999 and December 31, 1998
(UNAUDITED) 

                                                   SEP' 30, 1999   DEC' 31, 1998
                                                   -------------   -------------

   AUTO MILEAGE REIMBURSEMENT ..................          227.50          227.50
   AUTO REPAIRS ................................          681.12          681.12
   AUTO-LEASE ..................................        6,244.81        1,414.52
   AUTO-MISCELLANEOUS EXPENSE ..................          192.47          120.17
   AUTO-PARKING/TOLLS ..........................          435.71          422.71
   BANK SERVICE CHARGES ........................          786.23          516.23
   CELLULAR PHONE EXP ..........................        1,266.98        1,266.98
DOMAIN REG ..................................          210.00             
   COMPUTER-RELATED EXPENSES ...................        3,685.85        1,120.28
FIXED ASSET                                                               
      COMPUTER EQUIPMENT .......................       14,261.75   $   12,668.73
      OFFICE EQUIPMENT .........................        1,491.71   $    1,210.54
      TELEPHONES, ETC ..........................          966.39          966.39
                                                   -------------   -------------
   TOTAL FIXED ASSET ...........................   $   16,719.85   $   14,845.66

   FREIGHT/DELIVERY ............................        2,775.66        2,527.21
   INVESTIGATORY EXPENSES ......................          624.83           60.83
   LEGAL FEES ..................................       84,525.84       48,620.90
   MEALS AND ENTERTAINMENT .....................        4,574.33        3,784.22
   MEDICAL INSURANCE ...........................       38,668.53        7,861.53
   MISCELLANEOUS EXP ...........................       13,765.76       12,965.93
   OFFICE SUPPLIES/EXPENSES ....................       15,932.11       12,019.22
   PAYROLL EXPENSES ............................      438,805.29      191,747.34
   PROFESSIONAL FEES ...........................      164,258.04      134,011.54
   REGISTERED AGENT'S FEE ......................          570.00          570.00
   RENTAL OF OFFICE SPACE ......................       19,950.00       12,925.00
   TELEPHONE ...................................       28,315.81       13,936.19
   TELEPHONE MESSAGE SERVICE ...................        1,084.17        1,084.17
   TRAVEL  EXPENSES ............................        8,801.59        6,620.07
   UTILITIES ...................................        1,285.42          288.23
                                                   -------------   -------------
TOTAL DEVELOPMENT STAGE EXPENSES ...............   $  902,302.74   $  498,433.00
DEPOSITS                                                                        

   OFFICE DEPOSIT ..............................   $      250.00   $      250.00
   TELEPHONE SERVICE ...........................          260.00          260.00
                                                   -------------   -------------
TOTAL DEPOSITS .................................   $      510.00   $      510.00

INVESTMENT                                                                      

QUATUM BIT INDUCTION TECHNOLOGY .............   $   10,100.00             
                                   -------------
TOTAL INVESTMENT ...............................   $   10,100.00                
ORGANIZATIONAL EXPENSES                                                         
   ACCOUNTING FEES .............................   $    2,595.00   $    2,595.00

                                                Accompanying Notes to Statements

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CYTOGENIX, INC. 
(A Development Stage Company) 
 BALANCE SHEET - Continued
As of September 30, 1999 and December 31, 1998
(UNAUDITED) 

                                                        [Enlarge/Download Table]

                                                         SEP' 30, 1999   DEC' 31, 1998
                                                         -------------   -------------
                                                                                      
          FREIGHT/DELIVERY ............................  $      249.00          249.00
          LEGAL FEES ..................................  $    3,275.00        3,275.00
          OFFICE SUPPLIES/EXPENSES ....................  $      185.29          185.29
          PROFESSIONAL FEES ...........................  $    1,250.00        1,250.00
          STATE INCORPORATION FEES ....................  $      340.00          340.00
                                                         -------------   -------------
       TOTAL ORGANIZATIONAL EXPENSES ..................  $    7,894.29   $    7,894.29
                                                         -------------   -------------
    TOTAL OTHER ASSETS ................................  $  920,807.03   $  506,837.29
                                                         -------------   -------------
TOTAL ASSETS ..........................................  $  963,737.56   $  699,716.41
                                                         =============   =============
LIABILITIES & EQUITY                                                                  
    LIABILITIES                                                                       
       CURRENT LIABILITIES                                                            

             ACCOUNTS PAYABLE .........................  $   59,377.69   $    3,747.58
             PAYROLL EXPENSE ..........................  $   11,745.99   $    5,867.56
       TOTAL CURRENT LIABILITIES ......................  $   71,123.68   $    9,615.14

       LONG-TERM LIABILITY                                                            

       COMMITMENTS AND CONTINGENCIES (NOTE 1)                                         
                                                         -------------   -------------
    TOTAL LIABILITIES .................................  $   71,123.68   $    9,615.14

    EQUITY                                                                            
       CORP. SHAREHOLDER'S EQUITY                                                     

          COMMON STOCK ................................  $   28,814.44   $   17,485.70
          PAID-IN CAPITAL .............................  $1,374,015.15      915,052.44
          TREASURY SHARES .............................  $  (60,000.00)               
          CORP. SHAREHOLDER'S EQUITY - OTHER ..........  $   25,000.00                
          LESS STOCK SUBSCRIPTIONS ....................  $   (5,825.76)      -2,215.15
       DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE  $ (469,389.95)    -240,221.72
                                                         -------------   -------------
    TOTAL EQUITY ......................................  $  892,613.88   $  690,101.27
                                                         -------------   -------------
TOTAL LIABILITIES & EQUITY ............................  $  963,737.56   $  699,716.41
                                                         =============   =============

                                                Accompanying Notes to Statements

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 CYTOGENIX, INC.
 (A Development Stage Company)
 STATEMENT OF OPERATIONS
Nine Months Ended September 30, 1999
 and
the Period from February 10, 1995 (Date of Inception) to Sep 30, 1999 
 (UNAUDITED)

                                                                   FEB. 10, 1995
                                                                  (INCEPTION) TO
                                                   SEP 30, 99     SEP 30, 99
                                                   -------------   -------------

INCOME                                                                          

   DIVIDEND INCOME .............................   $    1,401.26   $    1,659.29
                                                   -------------   -------------
TOTAL INCOME ...................................   $    1,401.26   $    1,659.29

EXPENSE                                                                         

   INTEREST PAID ...............................                   $      734.98
MISCELLANEOUS                                                             

      OTHER SPRING VALLEY EXP ..................                   $   10,012.83
      SPRING VALLEY LITIGATION EXP .............                   $    7,398.00
   RENT ........................................                   $      450.00
                                                                   -------------
   TOTAL MISCELLANEOUS .........................                   $   18,595.81

RESEARCH AND DEVELOPMENT EXPENSE                                          

      BIO RESEARCH FEES ........................   $   12,225.30   $   29,497.80
      BIOTECHNOLOGY ............................      153,575.00      288,717.13
CONSULTANTS ..............................        2,260.75          
      DEPRECIATION EXPENSE .....................        6,814.50       16,785.24
      FREIGHT/DELIVERY .........................           83.98           98.62
      PATENT ATTORNEYS' FEES/EXPENSES ..........       57,470.72       72,814.26
      PAYROLL EXPENSES .........................                       37,615.92
QUANTUM OPTICS                                              

                                                Accompanying Notes to Statements

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 CYTOGENIX, INC.
 (A Development Stage Company)
 STATEMENT OF OPERATIONS - Continued
Nine Months Ended September 30, 1999
 and
the Period from February 10, 1995 (Date of Inception) to Sep 30, 1999 
 (UNAUDITED)

                                                                [Download Table]

                                                                   FEB. 10, 1995 
                                                                   (INCEPTION) TO
                                                     SEP 30, 99      SEP 30, 99  
                                                   -------------   ------------- 
                                                                                 
             SUPPLIES ............................                        300.00 
          SUPPLIES                                                               

             LAB .................................        400.00        4,063.71 

          TRAVEL .................................                 $      300.00 
                                                   -------------   ------------- 
       Total Research and Development Expense .... $  230,569.50   $  452,453.43 
                                                   -------------   ------------- 
    TOTAL EXPENSE ................................ $  230,569.50   $  471,049.24 
                                                   -------------   ------------- 
NET DEFICIT FROM OPERATIONS ...................... $ (229,168.24)  $ (469,389.95)

Deficit Accumulated During the Development                                       

       STAGE AT THE BEGINNING OF THE PERIOD ...... $ (240,221.72)              0 
                                                   -------------   ------------- 

DEFICIT ACCUMULATED DURING THE DEVELOPMENT                                       

       STAGE AT THE END OF THE PERIOD ............ $ (469,389.96)  $ (469,389.95)
                                                   -------------   ------------- 

                                                Accompanying Notes to Statements

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 CYTOGENIX, INC.
 (A Development Stage Company)
 STATEMENT OF STOCKHOLDERS' EQUITY
Nine Months Ended September 30, 1999
 and
 the Period from February 10, 1995 (Date of Inception) to September 30, 1999
 (UNAUDITED)

                                                                 FEB. 10, 1995
                                                                  (Inception) to
                                             SEP 30, 1999      30-SEP-99
                                                -------------    -------------
STOCKHOLDERS' EQUITY: COMMON STOCK ...........   $   11,328.74    $   28,814.44 

STOCKHOLDERS' EQUITY: PAID-IN CAPITAL ........      458,962.71     1,374,015.15 

CORP. SHAREHOLDER'S EQUITY - OTHER ...........       25,000.00        25,000.00 

LESS STOCK SUBSCRIPTIONS .....................       -5,825.76        -5,825.76 

STOCKHOLDERS' EQUITY: TREASURY STOCK .........      -60,000.00       -60,000.00 
                                                -------------    -------------

   TOTAL ....................................   $  429,465.69    $1,362,003.83

DEFICIT FROM OPERATIONS ......................   $ (229,168.24)   $ (469,389.95)
                                                -------------    -------------
TOTAL STOCKHOLDERS' EQUITY....................   $  200,297.45    $  892,613.88 
                                                =============    =============

                                                Accompanying Notes to Statements

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 CYTOGENIX, INC.
 (A Development Stage Company)
 STATEMENT OF CASH FLOWS
 Nine Months Ended June 30, 1999
 and
 the Period from February 10, 1995 (Date of Inception) to September 30, 1999
 (UNAUDITED)

                                                                [Download Table]

                                                                  FEB. 10, 1995 
                                                                 (INCEPTION) TO 
                                                  Sep 30, 1999      30-SEP-99   
                                                 -------------    ------------- 
                                                                                
OPERATING ACTIVITIES                                                            
      DEFICIT FROM OPERATIONS .................. $ (229,168.24)   $ (469,389.95)

   ADJUSTMENTS:                                                                 

      DEPRECIATION EXPENSE .....................      6,814.50        16,785.24 
      PETTY CASH ...............................          0.00          -600.00 
      ACCOUNTS PAYABLE .........................     55,630.11        59,377.69 
      PAYROLL EXPENSE ..........................      5,878.43        11,745.99 
      FEDERAL INCOME TAX WITHHELD ..............        -18.65           (18.65)
                                                 -------------    ------------- 
NET CASH PROVIDED BY OPERATING ACTIVITIES ...... $ (160,863.85)   $ (382,099.68)
                                                 -------------    ------------- 
INVESTING ACTIVITIES                                                            

   RESEARCH AND DEVELOPMENT ASSET ACQUISITIONS . $   (4,800.00)   $  (33,818.02)
   DEVELOPMENT STAGE EXPENSES .................. $ (403,880.34)   $ (902,313.35)
   DEPOSITS: OFFICE DEPOSIT ....................          0.00          -510.00 
   INVESTMENT-QUANTUM BIT INDUCTION TECHNOLOGY .    -10,100.00       (10,100.00)
   ORGANIZATIONAL EXPENSES .....................          0.00        -7,894.29 
                                                 -------------    ------------- 
NET CASH PROVIDED BY INVESTING ACTIVITIES ...... $ (418,780.34)   $ (954,635.66)
                                                 -------------    ------------- 
FINANCING ACTIVITIES                                                            

   INCREASE DUE TO SALE OF COMMON STOCK ........ $   11,328.74    $   28,814.44 
   INCREASE DUE TO ADDITIONAL PAID-IN-CAPITAL ..    458,962.71     1,374,015.15 
   INCREASE DUE TO SALE OF STOCK WARRANTS ......     25,000.00        25,000.00 
   REDUCTION DUE TO STOCK SUBSCRIPTION .........                      -2,215.15 
   REDUCTION DUE TO REPURCHASE OF COMMON STOCK .    -60,000.00       -60,000.00 
                                                 -------------    ------------- 
NET CASH PROVIDED BY FINANCING ACTIVITIES ...... $  435,291.45    $1,365,614.44 
                                                 -------------    ------------- 

                                                Accompanying Notes to Statements

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 CYTOGENIX, INC.
 (A Development Stage Company)
 STATEMENT OF CASH FLOWS - Continued
 Nine Months Ended June 30, 1999
 and
 the Period from February 10, 1995 (Date of Inception) to September 30, 1999
 (UNAUDITED)

                                                   JUNE 30, '99    JUNE 30,  '99
                                                  -------------    -------------
Net cash increase for period ..................   $ (144,352.74)   $   28,879.10
CASH AT BEGINNING OF PERIOD ...................      173,231.84                0
                                                  -------------    -------------

CASH AT END OF PERIOD .........................   $   28,879.10    $   28,879.10
                                                  =============    =============

                                                Accompanying Notes to Statements

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CYTOGENIX, INC.                                                                 
(A Development Stage Company)                                                   

NOTE  1                                                                         

On or about May 13, 1999 management decided not to attempt a Rule 504 offering  
which had previously been the company's main method of raising investor equity  
and to instead offer existing shareholders the opportunity to exchange with the 
Company one share of free trading stock held by the shareholder for two shares  
of restricted stock to be issued by the Company. The Company initially proposed 
to issue a total of 20,000,000 restricted trading shares in exchange for        
10,000,000 free trading shares. The free trading shares would then be sold in   
the market by the Company which would use the funds obtained for general        
corporate purposes. Between, May 16, 1999 and August 21, 1999, a total of 424   
existing shareholders agreed to exchange a total of 5,825,761 free trading      
shares for 11,651,522 restricted shares. The Company then in a series of        
brokerage and private transactions sold a total of 2,611,572 purportedly free   
trading shares in the market realized a total of $ 1,367,813 as a result of such
activity. The Company retained a total of 3,214,189 shares which it received    
from shareholders in the treasury of the Company.                               

No Form D relating to the Exchange offering was filed with the Securities and   
Exchange Commission. The SEC has challenged that the shares sold in the market  
were exempt from registration.                                                  

The Company disputes the following assertions, but it is possible that the sale 
of the free trading shares described above may have violated securities         
registration provisions of the federal and state securities laws which could    
subject the Company to fines, penalties or other regulatory enforcement action. 
There can be no assurance that the SEC or applicable state authorities will not 
pursue any enforcement action. The Company disputes any such liability.         

Additionally, while the Company also disputes the following assertions, it is   
possible that shareholders who purchased the shares described above in market   
transactions may have the right under state and federal securities laws to      
require the Company to repurchase their shares, for the amount originally paid, 
plus interest. The Company disputes any such liability.                         

Based up on the best information available to the Company at this time, the     
Company has calculated a range of possible, but disputed, exposure that exists  
for the Company in light of the disputed civil liabilities described above.     

Accordingly, in the event theses disputed civil liabilities were successfully   
asserted, the Company could be liable to certain shareholders who purchased the 
securities in market transactions in an amount of approximately $ 1,367,813 ,   
plus interest. This range of possible exposure is calculated by reference to the
average closing price for a share of the Company's common stock, weighted for   
reported daily volume, during the period May 16, 1999 to January 31, 2000; the  
number of shares possibly sold during the same period of time; and the closing  
price of one share on January 31 , 2000. The foregoing range could be adjusted  
higher or lower depending upon adjustments to any of the referenced items and as
any new information become available to the Company.                            

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To the Board of Directors and Stockholders                                      
of Cryogenic Solutions, Inc.                                                    
6524 San Felipe, Suite 388                                                      
Houston, Texas 77057                                                            

I have audited the accompanying balance sheet of Cryogenic Solutions, Inc. (a   
Nevada corporation in the development stage) as of December 31, 1998, and the   
related statement of operations, stockholders' equity, and cash flows for the   
year then ended and for the period from February 10, 1995 (inception), to       
December 31, 1998. These financial statements are the responsibility of the     
Company's management. My responsibility is to express an opinion on these       
financial statements based on my audit.                                         

I conducted my audit in accordance with generally accepted auditing standards.  
Those standards require that I plan and perform the audit to obtain reasonable  
assurance about whether the financial statements are free of material           
misstatement. An audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial statements. An audit also includes 
assessing the accounting principles used and significant estimates made by      
management, as well as evaluating the overall financial statement presentation. 
I believe that my audit provides a reasonable basis for my opinion.             

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Cryogenic Solutions, Inc. as of    
December 31, 1998, and the results of its operations and its cash flows for the 
year then ended and for the period from February 10, 1995 (inception), to       
December 31, 1998, in conformity with generally accepted accounting principles. 

Harrie Marie Pollok Operhall,                                                   
A Professional Corporation                                                      
Houston, Texas                                                                  

November 11, 1999                                                               

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CRYOGENIC SOLUTIONS, INC. 
(A Development Stage Company) 
BALANCE SHEET 
As of December 31, 1998 

                                                                   DEC' 31, 1998
                                                                   -------------
ASSETS                                                                          

CURRENT ASSETS                                                          
CHECKING/SAVINGS                                                  

          COASTAL ..............................................   $  173,231.84
                                                                   -------------
       TOTAL CHECKING/SAVINGS ..................................   $  173,231.84
OTHER CURRENT ASSETS                                              

          PETTY CASH ...........................................   $      600.00
                                                                   -------------
       TOTAL OTHER CURRENT ASSETS ..............................   $      600.00
                                                                   -------------
    TOTAL CURRENT ASSETS .......................................   $  173,831.84
FIXED ASSETS                                                            

RESEARCH AND DEVELOPMENT ASSET                                    

          COMPUTER EQUIPMENT ...................................   $       79.24
          CYROSTORAGE ..........................................        1,457.91
          FREEZER ..............................................        3,000.00
          PHOENIX-CENTRIFUGE/MICROSCOPE ........................        2,500.00
          PHOENIX-MICROSCOPE ...................................        1,259.91
          PHOENIX -1/2 CENTRIFUGE ..............................        1,982.34
          PHOENIX EQUIPMENT-INCUBATOR ..........................        4,319.08
          SHELVES FOR LAB ......................................          291.36
          STRALIGENE-PCR MACHINE ...............................        8,177.74
          VWR-INCUBATOR ........................................        2,208.21
          VWR-WATER BATH/PLATFORM ..............................        3,742.23
          ACC. DEPRECIATION ....................................       -9,970.74
                                                                   -------------
       TOTAL RESEARCH AND DEVELOPMENT ASSET ....................   $   19,047.28
                                                                   -------------
    TOTAL FIXED ASSETS .........................................   $   19,047.28
OTHER ASSETS                                                            
DEVELOPMENT STAGE EXPENSES                                        

          ACCOUNTING FEES ......................................   $    8,395.00
          ADVERTISING ..........................................       16,813.87
          AUTO ALLOWANCE .......................................          600.00
          AUTO INSURANCE .......................................        2,986.58
          AUTO MILEAGE REIMBURSEMENT ...........................          227.50
          AUTO REPAIRS .........................................          681.12
          AUTO-LEASE ...........................................        1,414.52
          AUTO-MISCELLANEOUS EXPENSE ...........................          120.17
          AUTO-PARKING/TOLLS ...................................          422.71

SEE ACCOMPANYING FOOTNOTES                                                      

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CRYOGENIC SOLUTIONS, INC. 
(A Development Stage Company) 
 BALANCE SHEET - Continued
As of December 31, 1998 

                                                                   DEC' 31, 1998
                                                                   -------------
          Bank Service Charges ................................           516.23
          CELLULAR PHONE EXP ..................................         1,266.98
          COMPUTER-RELATED EXPENSES ...........................         1,120.28
FIXED ASSET                                                 

             COMPUTER EQUIPMENT ...............................    $   12,668.73
             OFFICE EQUIPMENT .................................    $    1,210.54
             TELEPHONES, ETC ..................................           966.39
                                                                   -------------
          TOTAL FIXED ASSET ...................................    $   14,845.66
          FREIGHT/DELIVERY ....................................         2,527.21
          INVESTIGATORY EXPENSES ..............................            60.83
          LEGAL FEES ..........................................        48,620.90
          MEALS AND ENTERTAINMENT .............................         3,784.22
          MEDICAL INSURANCE ...................................         7,861.53
          MISCELLANEOUS EXP ...................................        12,965.93
          OFFICE SUPPLIES/EXPENSES ............................        12,019.22
          PAYROLL EXPENSES ....................................       191,747.34
          PROFESSIONAL FEES ...................................       134,011.54
          REGISTERED AGENT'S FEE ..............................           570.00
          RENTAL OF OFFICE SPACE ..............................        12,925.00
          TELEPHONE ...........................................        13,936.19
          TELEPHONE MESSAGE SERVICE ...........................         1,084.17
          TRAVEL  EXPENSES ....................................         6,620.07
          UTILITIES ...........................................           288.23
                                                                   -------------
       TOTAL DEVELOPMENT STAGE EXPENSES .......................    $  498,433.00
DEPOSITS                                                          

          OFFICE DEPOSIT ......................................    $      250.00
          TELEPHONE SERVICE ...................................           260.00
                                                                   -------------
       TOTAL DEPOSITS .........................................    $      510.00
ORGANIZATIONAL EXPENSES                                           

          ACCOUNTING FEES .....................................    $    2,595.00
          FREIGHT/DELIVERY ....................................           249.00
          LEGAL FEES ..........................................         3,275.00
          OFFICE SUPPLIES/EXPENSES ............................           185.29
          PROFESSIONAL FEES ...................................         1,250.00
          STATE INCORPORATION FEES ............................           340.00
                                                                   -------------
       TOTAL ORGANIZATIONAL EXPENSES ..........................    $    7,894.29
                                                                   -------------
    TOTAL OTHER ASSETS ........................................    $  506,837.29
                                                                   -------------
TOTAL ASSETS ..................................................    $  699,716.41
                                                                   =============

SEE ACCOMPANYING FOOTNOTES                                                      

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CRYOGENIC SOLUTIONS, INC. 
(A Development Stage Company) 
 BALANCE SHEET - Continued
As of December 31, 1998 

                                                                   DEC' 31, 1998
                                                                   -------------
LIABILITIES & EQUITY                                                            
LIABILITIES                                                             
CURRENT LIABILITIES                                               

             ACCOUNTS PAYABLE ..................................   $    3,747.58
             PAYROLL EXPENSE ...................................   $    5,867.56
                                                                   -------------
       TOTAL CURRENT LIABILITIES ...............................   $    9,615.14
                                                                   -------------
    TOTAL LIABILITIES ..........................................   $    9,615.14
EQUITY                                                                  

CORP. SHAREHOLDER'S EQUITY                                        

          COMMON STOCK .........................................   $   17,485.70
          PAID-IN CAPITAL ......................................      915,052.44
          LESS STOCK SUBSCRIPTIONS .............................       -2,215.15
       DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE ........     -240,221.72
                                                                   -------------
    TOTAL EQUITY ...............................................   $  690,101.27
                                                                   -------------
TOTAL LIABILITIES & EQUITY .....................................   $  699,716.41
                                                                   =============

SEE ACCOMPANYING FOOTNOTES                                                      

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CRYOGENIC SOLUTIONS, INC. 
(A Development Stage Company) 
STATEMENT OF OPERATIONS 
Year Ended December 31, 1998 and the Period from
February 10, 1995 (Date of Inception) to December 31, 1998

                                                                   FEB. 10, 1995
                                                                  (INCEPTION) TO
                                                   Dec' 31, 1998   DEC. 31, 1998
                                                   -------------   -------------
INCOME                                                                          

   DIVIDEND INCOME .............................   $       61.08   $      258.03
                                                   -------------   -------------
TOTAL INCOME ...................................   $       61.08   $      258.03

EXPENSE                                                                         

   INTEREST PAID ...............................   $        0.90   $      734.98
MISCELLANEOUS                                                             

      OTHER SPRING VALLEY EXP ..................        2,374.32       10,013.83
      SPRING VALLEY LITIGATION EXP .............        9,475.00        7,398.00
   RENT ........................................            0.00          450.00
                                                   -------------   -------------
   TOTAL MISCELLANEOUS .........................   $   11,850.22   $   18,595.81

RESEARCH AND DEVELOPMENT EXPENSE                                          

      BIO RESEARCH FEES ........................   $    1,500.00   $   17,272.50
      BIOTECHNOLOGY ............................       78,880.79      135,142.13
      CONSULTANTS ..............................                        2,260.75
      DEPRECIATION EXPENSE .....................        5,535.92        9,970.74
      FREIGHT/DELIVERY .........................           14.64           14.65
      PATENT ATTORNEYS' FEES/EXPENSES ..........       12,343.54       15,343.54
      PAYROLL EXPENSES .........................       33,958.34       37,615.92
QUANTUM OPTICS                                                      
         SUPPLIES ..............................                          300.00
SUPPLIES                                                            

         LAB ...................................          298.00         3663.71

SEE ACCOMPANYING FOOTNOTES                                                      

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CRYOGENIC SOLUTIONS, INC. 
(A Development Stage Company) 
 STATEMENT OF OPERATIONS - Continued
Year Ended December 31, 1998 and the Period from
February 10, 1995 (Date of Inception) to December 31, 1998

                                                                 FEB. 10, 1995
                                                                (INCEPTION) TO
                                                DEC. 31, 1998    DEC. 31, 1998
                                                -------------    -------------
         TRAVEL ...............................          0.00           300.00
                                                -------------    -------------
      TOTAL RESEARCH AND DEVELOPMENT EXPENSE .. $  132,531.23    $  221,883.94
                                                -------------    -------------
   TOTAL EXPENSE .............................. $  144,381.45    $  240,030.75
                                                -------------    -------------
NET DEFICIT FROM OPERATIONS .................... $ (144,320.37)   $ (240,221.72)

Deficit Accumulated During the Development                                      

      STAGE AT THE BEGINNING OF THE PERIOD ....    -95,901.35                0
                                                -------------    -------------

Deficit Accumulated During the Development                                      

       STAGE AT THE END OF THE PERIOD .......... $ (240,221.72)   $ (240,221.72)
                                                =============    =============

SEE ACCOMPANYING FOOTNOTES                                                      

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CRYOGENIC SOLUTIONS, INC. 
(A Development Stage Company) 
 STATEMENT OF STOCKHOLDERS' EQUITY
Year Ended December 31, 1998 and the Period from
February 10, 1995 (Date of Inception) to December 31, 1998

                                                        [Enlarge/Download Table]

                                                                        FEB. 10, 1995 
                                                                       (INCEPTION) TO 
                                                       DEC. 31, 1998    DEC. 31, 1998 
                                                       -------------    ------------- 
                                                                                      
   STOCKHOLDERS' EQUITY: COMMON STOCK ...............  $    6,777.81    $   17,485.70 

   STOCKHOLDERS' EQUITY: PAID-IN CAPITAL ............     664,040.98       943,484.77 

   STOCKHOLDERS' EQUITY: STOCK EXPENSE/ ISSUANCE/SALE     -14,243.70       -28,432.33 
                                                       -------------    ------------- 

      TOTAL .........................................  $  656,575.09    $  932,538.14 

   DEFICIT FROM OPERATIONS ..........................  $ (144,320.37)     -240,221.72 
                                                       -------------    ------------- 
TOTAL STOCKHOLDERS' EQUITY ..........................  $ (512,254.72)   $ (692,316.42)
                                                       =============    ============= 

SEE ACCOMPANYING FOOTNOTES                                                      

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CRYOGENIC SOLUTIONS, INC. 
(A Development Stage Company) 
 STATEMENT OF CASH FLOWS
Year Ended December 31, 1998 and the Period from
February 10, 1995 (Date of Inception) to December 31, 1998

                                                        [Enlarge/Download Table]

                                                                          FEB. 10, 1995  
                                                                          (INCEPTION) TO 
                                                          DEC. 31, 1998    DEC. 31, 1998 
                                                          -------------    ------------- 
                                                                                         
    OPERATING ACTIVITIES                                                                 
          DEFICIT FROM OPERATIONS ......................  $ (144,320.37)   $ (240,221.72)
       ADJUSTMENTS:                                                                      

          DEPRECIATION EXPENSE .........................       5,535.92         9,970.74 
          PETTY CASH ...................................        -600.00          -600.00 
          STOCK SUBSCRIPTIONS ..........................      -2,215.15        -2,215.15 
          ACCOUNTS PAYABLE .............................       2,822.58         3,747.58 
          PAYROLL EXPENSE ..............................       5,867.56         5,867.56 
          OTHER CURRENT LIABILITY: LOAN FROM SHAREHOLDER     -56,040.00             --   
                                                          -------------    ------------- 
    NET CASH PROVIDED BY OPERATING ACTIVITIES ..........  $ (188,949.46)     (223,450.99)
    INVESTING ACTIVITIES                                                                 

       RESEARCH AND DEVELOPMENT ASSET ACQUISITIONS .....  $   (5,742.25)   $  (29,018.02)
       DEVELOPMENT STAGE EXPENSES ......................    -303,616.41      (498,433.00)
       DEPOSITS: OFFICE DEPOSIT ........................        -250.00          -510.00 
       ORGANIZATIONAL EXPENSES .........................      -3,000.00        -7,894.29 
                                                          -------------    ------------- 
    NET CASH PROVIDED BY INVESTING ACTIVITIES ..........  $ (312,608.66)   $ (535,855.31)
    FINANCING ACTIVITIES                                                                 

       REDUCTION OF SHAREHOLDER LOANS ..................  $  (15,000.00)   $        --   
       PURCHASE OF COMMON STOCK ........................       6,777.81        17,485.70 
       ADDITIONAL PAID-IN CAPITAL UPON PURCHASE OF STOCK     664,040.98       943,484.77 
       PAYMENT OF EXPENSES RELATED TO PURCHASE OF STOCK      -14,243.70       -28,432.33 
                                                          -------------    ------------- 
    NET CASH PROVIDED BY FINANCING ACTIVITIES ..........  $  641,575.09    $  932,538.14 
                                                          -------------    ------------- 
NET CASH INCREASE FOR PERIOD ...........................  $  140,016.97    $  173,231.84 
CASH AT BEGINNING OF PERIOD ............................      33,214.87             0.00 
                                                          -------------    ------------- 

CASH AT END OF PERIOD ..................................  $  173,231.84    $  173,231.84 
                                                          =============    ============= 

SEE ACCOMPANYING ACCOUNTANT'S REPORT AND FOOTNOTES                              

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CRYOGENIC SOLUTIONS, INC.                                                       
(A Development Stage Company)                                                   

NOTE A.-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                              

Nature of Operations                                                            

Cryogenic Solutions, Inc. was incorporated in Nevada on February 10, 1995. It is
a biotechnology company focusing on controlled cellular dedifferentiation and   
transdifferentiation processes. The Company has acquired the exclusive rights   
for applications to a specialized expression vector capable of producing single 
stranded DNA (ssDNA) in both eukaryotes and prokaryotes.                        

Equity funding has been the only source of operational and research support from
the outset. Capital resources have been carefully husbanded with the bulk of the
funding allocated directly to research with administrative overhead held to a   
minimum.                                                                        

Depreciation                                                                    

Currently, depreciation on the research and development equipment is computed   
using the straight-line method over the assets' expected useful life of 5 years.

Amortization                                                                    

The development stage expenses and the organization expenses are being          
capitalized for future amortization purposes, once the corporation begins its   
business operations of marketing the results of its research to the medical     
profession to cure its patients of certain ailments.                            

Income Tax                                                                      

The financial statements do not include a provision for income taxes because the
Corporation has incurred net operating losses for all periods to date. The      
"Deficit Accumulated During the Development Stage at December 31, 1998" for $   
240,221.72 reflects the net operating loss to date.                             

NOTE B-DEVELOPMENT STAGE OPERATIONS                                             

The Corporation's operations, as explained in Note A, is still devoted to       
raising capital, obtaining financing, and providing the funding for the research
described in Notes A and D.                                                     

NOTE C-PROPERTY AND EQUIPMENT                                                   

Property and equipment are individually identified on the Balance Sheet and are 
stated at cost.                                                                 

Research and Development equipment is being depreciated using the straight-line 
method over                                                                     

F-18

10SB12G/A
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CRYOGENIC SOLUTIONS, INC.                                                       
(A Development Stage Corporation)                                               

NOTE C-PROPERTY AND EQUIPMENT(Continued)                                        

the useful life of five years of the respective assets.                         

The General and Administrative equipment has been set up under the Development  
Stage Expenses and no depreciation has been calculated at this time since the   
business operations of the business has not begun.                              

NOTE D-RESEARCH AND DEVELOPMENT EXPENSES                                        

The research and the development of the technology that became known as the     
ssDNA IEV was invented by an MD, Dr. Charles Conrad, founder of InGene, Inc. and
a practicing neural oncologist. The technology was exclusively licensed and     
developed under a sponsored research agreement by the Corporation. The financial
arrangements of the contract are monitored by the Corporation's management.     

The research and development expense categories also reflect the expenses of the
patent attorneys hired to assist the Corporation in the patent filings of the   
first ssDNA IEV patent, which is scheduled to be issued in August of l999. Other
patent filings include co-inventions by a Corporation scientist and Dr. Conrad. 

NOTE E-LOANS FROM SHAREHOLDERS                                                  

When the Corporation was initially set up and prior to raising capital, the     
original officers and shareholders loaned the Corporation funds to pay its      
expenses. In addition, several of the officers were not paid for services       
rendered, these expenses were accrued at that time.                             

During this audit period, the management decided that to meet these obligations 
any and all shareholder loans were to be repaid by issuance of common stock.    

F-19

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10SB12G/A’ Filing		Date		First		Last			Other Filings
Filed on:		3/7/00
		1/31/00		8		23
		11/11/99		24
		9/30/99		9		22			10QSB
		9/27/99		9
		9/1/99		5		10
		8/21/99		8		23
		6/30/99		21		22
		5/16/99		8		23
		5/13/99		8		23
		12/31/98		12		32
		12/28/98		5
		12/31/97		12
		2/10/95		18		32
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