UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549

                                  FORM 10-QSB/A
                                  Amendment #2

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


For Quarter Ended: August 31, 2004              Commission File Number 000-49908
                   ---------------                                     ---------



                                  CYTODYN, INC.
                                  -------------
        (Exact name of small business issuer as specified in its charter)


             COLORADO                                        75-3056237
             --------                                        ----------
(State or other jurisdiction of No.)             (I.R.S. Employer Identification
                                                  incorporation or organization)


200 W. DeVargas Street, Suite 1, Santa Fe, New Mexico                    87501
-----------------------------------------------------                    -----
(Address of principal executive offices)                              (Zip code)

                                 (505) 988-5520
                                 --------------
              (Registrant's telephone number, including area code)


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.
                                                     Yes  X        No
                                                         ---          ---

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common equity, as of the latest practicable date.

Common stock, no par value                           8,069,307
--------------------------                           ---------
          Class                   Number of shares outstanding at March 23, 2005

Transitional Small Business Disclosure Format:       Yes           No  X
                                                         ---          ---

--------------------------------------------------------------------------------
                     This document is comprised of 11 pages.





                                      INDEX

                                                                           Page
                                                                          ------
PART 1 - FINANCIAL INFORMATION

     Item 1.  Financial Statements

     Condensed balance sheet, August 31, 2004 (unaudited).................   3  
     Condensed statements of operations, three months ended                 
        August 31, 2004 (unaudited) and 2003 (unaudited)..................   4
     Condensed statements of cash flows, three months ended                 
        August 31, 2004 (unaudited) and 2003 (unaudited)..................   5
     Notes to condensed financial statements (unaudited)..................   6
                                                                            
     Item 2.  Management's Discussion and Analysis or Plan of Operation...  11
                                                                            
     Item 3.  Controls and Procedures.....................................  13
                                                                            
PART 2 - OTHER INFORMATION                                                  

     Item 1.  Legal Proceedings...........................................  14 
     Item 2.  Changes in Securities and Small Business Issuer 
                Purchases of Equity Securities............................  15 
     Item 3.  Defaults Upon Senior Securities.............................  15  
     Item 4.  Submission of Matters to a Vote of Security Holders.........  15  
     Item 5.  Other Information...........................................  15  
     Item 6.  Exhibits....................................................  15  

Signatures................................................................  16  






                                       2

Part I, Item 1. Financial Statements

                                  CYTODYN, INC.
                          (A Development Stage Company)
                             Condensed Balance Sheet
                                   (Unaudited)

                                 August 31, 2004

                                     Assets

Current Assets:
    Cash ......................................................   $    76,435
    Prepaid expenses ..........................................         9,854
                                                                  -----------
                  Total current assets ........................        86,289

Property and equipment, less accumulated
    depreciation of $496 ......................................         6,006
Deposit .......................................................           495
                                                                  -----------

                                                                  $    92,790
                                                                  ===========

                    Liabilities and Shareholders' Deficit

Current Liabilities:
    Accounts payable ..........................................   $    70,799
    Accrued liabilities .......................................         9,327
    Indebtedness to related parties (Note 2) ..................       132,979
                                                                  -----------
                  Total current liabilities ...................       213,105
                                                                  -----------

Commitments and contingencies (Note 6) ........................          --   

Shareholders' deficit (Note 4):
    Preferred stock, no par value; 5,000,000 shares authorized,
       -0- shares issued and outstanding ......................          --   
    Common stock, no par value; 25,000,000 shares authorized,
       8,069,307 shares issued and outstanding ................     1,916,334
    Additional paid-in capital ................................        24,014
    Accumulated deficit .......................................    (1,601,912)
    Deficit accumulated during development stage ..............      (458,751)
                                                                  -----------
                  Total shareholders' deficit .................      (120,315)
                                                                  -----------

                                                                  $    92,790
                                                                  ===========



            See accompanying notes to condensed financial statements

                                       3


                                 CYTODYN, INC.
                         (A Development Stage Company)
                       Condensed Statements of Operations
                                  (Unaudited)


                                               For The Three Months Ended
                                                       August 31,
                                               --------------------------
                                                   2004          2003
                                               -----------    -----------
Operating expenses:
    General and administrative (Note 8) ....   $   120,409    $     3,935
    Depreciation ...........................           292           --   
                                               -----------    -----------
                    Total operating expenses       120,701          3,935
                                               -----------    -----------
                    Operating loss .........      (120,701)        (3,935)

Interest income ............................           176           --   
Interest expense ...........................          (182)          --   
                                               -----------    -----------
                    Loss before income taxes      (120,707)        (3,935)

Income tax provision (Note 5) ..............          --             --   
                                               -----------    -----------

                    Net loss ...............   $  (120,707)   $    (3,935)
                                               ===========    ===========

Basic and diluted loss per share ...........   $     (0.01)         (0.00)
                                               ===========    ===========

Basic and diluted weighted average
    common shares outstanding ..............     8,069,307      5,362,640
                                               ===========    ===========






            See accompanying notes to condensed financial statements

                                       4


                                 CYTODYN, INC.
                         (A Development Stage Company)
                       Condensed Statements of Cash Flows
                                  (Unaudited)
                                                     For The Three Months Ended
                                                              August 31,
                                                     --------------------------
                                                         2004           2003
                                                     -----------    -----------

                      Net cash used in
                         operating activities .....  $  (107,874)   $    (3,995)
                                                     -----------    -----------
                                                                       
Cash flows from investing activities:                                  
    Property and equipment purchases ..............       (3,167)          --   
                                                     -----------    -----------
                      Net cash used in                                 
                         investing activities .....       (3,167)          --   
                                                     -----------    -----------
                                                                       
Cash flows from financing activities:                                  
    Capital contributions by president (Note 2) ...          512           --   
    Proceeds from notes payable issued to                              
       related parties (Note 2) ...................         --            3,452
    Repayment of notes payable to related                              
       parties (Note 2) ...........................         --             --   
    Proceeds from the sale of common stock (Note 4)         --             --   
    Payment of offering costs (Note 4) ............         --             --   
                                                     -----------    -----------
                      Net cash provided by                             
                         financing activities .....          512          3,452
                                                     -----------    -----------
                                                                       
                         Net change in cash .......     (110,529)          (543)
                                                                       
Cash, beginning of period .........................      186,964          3,238
                                                     -----------    -----------
                                                                       
Cash, end of period ...............................  $    76,435    $     2,695
                                                     ===========    ===========
                                                                       
Supplemental disclosure of cash flow information:                      
    Income taxes ..................................  $      --      $      --   
                                                     ===========    ===========
    Interest ......................................  $       182    $      --   
                                                     ===========    ===========
                                                                     




            See accompanying notes to condensed financial statements

                                       5


                                  CYTODYN, INC.
                          (A Development Stage Company)

                     Notes to Condensed Financial Statements
                                   (Unaudited)

Note 1:  Basis of Presentation

The condensed  financial  statements  presented herein have been prepared by the
Company in accordance with the  instructions  for Form 10-QSB and the accounting
policies in its Form 10-KSB  filed for the year ended May 31, 2004 and should be
read in conjunction with the notes thereto.

In the opinion of management,  the accompanying  condensed financial  statements
contain all adjustments  (consisting only of normal recurring adjustments) which
are  necessary  to provide a fair  presentation  of  operating  results  for the
interim  periods  presented.  The results of operations  presented for the three
months ended August 31, 2004 are not necessarily indicative of the results to be
expected for the year.

The  Company  is in the  development  stage in  accordance  with  Statements  of
Financial  Accounting  Standards  (SFAS)  No. 7  "Accounting  and  Reporting  by
Development Stage Enterprises".

Financial data presented herein are unaudited.

Note 2:  Related Party Transactions

During the three  months ended August 31, 2004,  the  Company's  president  paid
administrative  expenses on behalf of the Company totaling $512. The payment has
been  recorded  as  contributed  capital  and is  included  in the  accompanying
condensed financial statements as "Additional paid-in capital".

As of May 31, 2004, the Company owed two officers  promissory  notes totaling of
$71,694. The notes are due on demand and carry no interest rate. The balance due
of  $71,694  remained  unpaid  at  August  31,  2004  and  is  included  in  the
accompanying condensed financial statements as Indebtedness to related parties.


As of May 31,  2004,  the Company  owed a director  $61,285  for legal  services
provided to the Company.  As of August 31, 2004, no  arrangements  had been made
for the  Company to repay this  obligation.  The  Company  anticipates  that the
director will continue to provide legal services in the future.  The balance due
of $61,285 is included in the  accompanying  condensed  financial  statements as
Indebtedness to related parties.  The loan does not carry interest and is due on
demand.


Note 3:  Income taxes

The  Company  records  its  income  taxes  in  accordance  with  SFAS  No.  109,
"Accounting for Income Taxes". The Company incurred net operating losses for all
periods presented resulting in a deferred tax asset, which was fully allowed for
by a valuation  allowance;  therefore,  the net benefit and expense  resulted in
$-0- income taxes.

Note 4:   Commitments and Contingencies


The Company entered into a noncancellable  operating lease for office space that
commenced November 14, 2003 and expired November 30, 2004. The lease has not yet
been renewed. Payments are currently being made on a month-to-month basis in the
amount of $514.80


                                       6


The  Company  has  committed  to grant a  financial  representative  warrants to
purchase  426,000 shares of the Company's  common stock. The warrants will carry
an exercise  price of $.30 per share and will  expire  after five years from the
date of grant. The warrants were  subsequently  granted on November 25, 2004 and
included in the registration  for the public offering under our SB-2 filing.  No
warrants have yet been exercised.

The Company has signed  Personal  Service  Agreements  with three  officers that
cover  the two  years  ended  May 31,  2005 and  2006.  Under  the  terms of the
agreements,  if an  officer  is  terminated  by the  Company  without  cause  or
terminates  service for good cause  within  three months of a change in control,
the  Company is  required  to pay the officer the balance of the base salary for
the term of the agreement  and for an additional 12 months after the  expiration
of the term.


Buy-Sell  Agreement with Symbion Research  International.  Effective  January 5,
2005.

Our director, Peggy C. Pence, PhD., is the President and Chief Executive Officer
of Symbion  Research  International,  Inc. On January 5, 2005, we entered into a
buy-sell  agreement  to purchase  intellectual  property  owned by Symbion.  The
agreement describes the intellectual property in detail which summarized, is the
Phase 1 clinical  data and the protocol for the Phase II study.  Under the terms
of this agreement:

-    CytoDyn,  Inc may purchase  Symbion's  Phase I clinical  data in connection
     with  obtaining  approval  from the FDA to conduct the Phase  II/Phase  III
     stud(ies) for Cytolin.
-    CytoDyn, Inc will grant 83,122 non-qualified stock options with an exercise
     price of $.75 per share that will vest  immediately and be exercisable over
     5 years.
-    CytoDyn,  Inc will pay $25,000 to Symbion  out of the  proceeds of the SB-2
     offering
-    CytoDyn,  Inc will pay $275,000 to Symbion once our secondary  financing is
     received.

In the event the  shareholders  do not  approve  the  company's  option  plan by
December 31, 2005, CytoDyn, Inc will pay Symbion $62,341.50 in U.S. dollars.

The results of the Phase II/III stud(ies) for Cytolin shall be the sole property
of CytoDyn,  Inc upon Symbion's  receipt of the final payment called for by this
agreement.  If all  payments  are not  received,  the  property  shall revert to
Symbion.


Note 5:   Financial Information - Development Stage

Following is the Statement of Operations for the period in which the Company has
been in the development stage as required by SFAS No. 7.


                                       7



                    October 28, 2003 Through August 31, 2004

          Operating expenses:
              General and administrative...............   $  438,089 
              Legal fees, related party ...............       20,050
              Depreciation ............................          496
                                                          ----------
                 Total operating expenses..............      458,635
                                                          ----------
                 Operating loss .......................     (458,635)
                                                            
          Interest income .............................          519
          Interest expense ............................         (635)
                                                          ----------
                 Loss before income taxes..............     (458,751)
                                                            
          Income tax provision (Note 5) ...............         --   
                                                          ----------
                                                           
                 Net loss .............................   $ (458,751)
                                                          ==========
                                    

Following is the Statement of Cash Flows for the period in which the Company has
been in the development stage as required by SFAS No. 7.



                                       8



                    October 28, 2003 Through August 31, 2004

                          Net cash used in
                             operating activities ...........   $(464,769)
                                                                ---------
                                                             
      Cash flows from investing activities:                  
          Equipment purchases ...............................      (6,502)
                                                                ---------
                          Net cash used in                   
                             investing activities ...........      (6,502)
                                                                ---------
                                                             
      Cash flows from financing activities:                  
          Capital contributions by president ................         512
          Proceeds from notes payable issued to              
             related parties (Note 2) .......................     111,194
          Repayment of notes payable to related              
             parties (Note 2) ...............................     (50,000)
          Proceeds from the sale of common stock (Note 4)....     540,000
          Payment of offering costs (Note 4) ................     (54,000)
                                                                ---------
                          Net cash provided by               
                             financing activities ...........     547,706
                                                                ---------
                                                             
                             Net change in cash .............      76,435
                                                             
      Cash, beginning of period .............................        --   
                                                                ---------
                                                             
      Cash, end of period ...................................   $  76,435
                                                                =========
                                                             
      Supplemental disclosure of cash flow information:      
          Income taxes ......................................   $    --   
                                                                =========
          Interest ..........................................   $     635
                                                                =========



Note 6:   Litigation

CytoDyn of New Mexico, Inc. et al., v. Amerimmune Pharmaceuticals,  Inc. et al.,
--------------------------------------------------------------------------------
Case number BC 290154,  California  Superior  Court in and for the County of Los
--------------------------------------------------------------------------------
Angeles.
--------

The First Amended and Supplemental Complaint alleged causes of action for unfair
business  competition,  inducement  of breach  of  contract,  fraud  and  unjust
enrichment, and declaratory and equitable relief. This case was dismissed due to
the attorney's lack of attention to the case. The judge stated that the evidence
was not presented in an orderly and logical fashion.

Rex H.  Lewis,  a  Defendant  and  former  director  and  C.E.O.  of  Amerimmune
Pharmaceuticals,  Inc. has filed a First Amended Cross-Complaint against CytoDyn
of New Mexico, Inc., Allen D. Allen, Corinne E. Allen, Ronald J. Tropp, Brian J.
McMahon , Daniel M.  Stickland,  M.D.  and unknown  others  designated  as "Does
101-150".

Mr. Lewis  alleges,  among other things,  misrepresentations  or failure to make
disclosures  related to Cytolin and its  development,  approval  and  marketing;
interference with Amerimmune's  attempt to complete clinical research related to
Cytolin and Mr. Lewis' actual or prospective business  relationships;  and libel
and slander of Mr. Lewis.

                                       9


Currently the Cross-Complaint  asserts causes of action for fraud,  interference
with prospective  business  interests,  libel and slander.  The requested relief
includes  damages  (alleged  to range from $3  million to $20  million or more),
punitive damages, costs and other "just and proper" relief.

The outcome of litigation is uncertain.  Management believes that an unfavorable
result is unlikely with respect to the claims raised by the Complaint,  and that
the claims raised by the  Cross-Complaint are without merit. The defendants have
retained new counsel which are the same  attorney's  that  represented us in the
following case that was decided in our favor.

Discovery is continuing.  Trial is scheduled for June 2005.

CytoDyn,  Inc.,  et al.  v.  Amerimmune,  Inc.  et al.,  Case  number  SC039250,
--------------------------------------------------------------------------------
California Superior Court in and for the County of Ventura.
-----------------------------------------------------------

The Declaratory Relief Sought and Attorneys' Fees Were Awarded.

The  action  was filed on April 21,  2004.  CytoDyn  and Allen D. Allen were the
plaintiffs.   The  defendants  were  Amerimmune  Inc.,  its  parent   Amerimmune
Pharmaceuticals, Inc., and unknown others designated as "Does 1-100".

The action concerned a Conditional  License Agreement,  dated February 24, 2000,
between Allen D. Allen and CytoDyn of New Mexico,  on one hand, and  Amerimmune,
Inc., on the other. The complaint alleged that the Conditional License Agreement
licensed  to the  defendants  technology  and  patents  related to  Cytolin  and
assigned to  defendants  an FDA approved  investigational  new drug  application
related  to  Cytolin.  Further,  it alleged  that the  defendants  breached  the
Conditional License Agreement, resulting in its termination.

The principal  relief sought was a declaration  that the license granted and the
assignment of the technology,  patents and drug application made pursuant to the
Conditional  License Agreement were terminated no later than September 12, 2001,
and  that  Allen  and  we  are  the  owners  of  the  technology,   patents  and
investigational  new drug  application,  free of any  claims of the  defendants.
Costs, attorney's fees, and other "just and proper" relief also were sought.

This case was decided in favor of the  plaintiffs,  CytoDyn and Allen October 4,
2004.

Symbion Research  International,  Inc., v. Amerimmune,  Inc. et al., Case number
--------------------------------------------------------------------------------
SC035668, California Superior Court in and for the County of Ventura.
---------------------------------------------------------------------

The complaint was filed on March 14, 2003. Symbion Research  International,  Inc
was the plaintiff.  Amerimmune,  Inc. was the remaining defendant. We were not a
party to this action,  however the action affects intellectual property which is
important to us.

A default  judgment  was entered on December 18, 2003. A judgment was entered in
favor of Symbion  Research  International  ("Symbion")  on  September  17,  2004
granting the declarative relief sought by Symbion .

The action concerned intellectual property generated in connection with services
provided by Symbion with respect to early phase FDA clinical  trials of Cytolin,
including  research data and a patent  application  filed in 2002. The complaint
alleged  that  Symbion  performed  early  phase FDA  trials  (designated  in the
Complaint as "Phase Ia" and "Phase Ib/II",  on behalf of Amerimmune  pursuant to
an oral agreement,  and that Amerimmune  failed to pay Symbion for its services,
and otherwise breached its obligations under the agreement.

                                       10


The complaint  asserted  causes of action for breach of oral  contract,  account
stated,  work and labor done, fraud, and declaratory and injunctive  relief. The
relief  sought  included  a  declaration  that  Symbion  is  the  owner  of  the
intellectual property resulting from the services provided by Symbion.

The  intellectual  property  generated in the early phase FDA clinical trials is
necessary to obtain approval for, and to conduct,  further FDA clinical tests of
Cytolin.  Because a  satisfactory  result was obtained in this  action,  we have
negotiated  an  agreement  with  Symbion  that will allow the use in  subsequent
phases of clinical test of Cytolin of the research  data  generated in the early
phases.  CytoDyn will  purchase this data from Symbion in order to apply for FDA
registration of Cytolin.


Note 8: Subsequent Events

On March 9 2005,  the Company  issued  seven  promissory  notes in exchange  for
proceeds  totaling  $121,000.  The notes carry a five percent  interest rate and
mature 12 months after the date of the note.



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

                                  CYTODYN, INC.
                          (A Development Stage Company)

Plan of Operation

During the next 12 months, our objectives are:

     o    To continue our clinical trials of Cytolin,
     o    To  continue  our  efforts  to protect  our  technology  by  obtaining
          additional patents in The United Kingdom European Union and Hong Kong.
     o    To develop an established market for our shares,
     o    To raise funds to support our research and  development  efforts,  the
          clinical   trials   relating   to   Cytolin,   and  our   general  and
          administrative expenses, and
     o    To   explore   joint   venture   arrangements   for   other   possible
          pharmaceutical products.

Continuing  Clinical  Trials.  Phase I clinical trials were conducted by Symbion
Research  International  under the sponsorship of Amerimmune,  Inc. during 2002.
Symbion  became the owners of that  clinical  data which will be purchased by us
for  $362,000  See Exhibit  10.5.2.  We believe  that the data from these trials
support  approval by the FDA of Phase II trials,  and we intend to seek approval
for the Phase II trials. We will work with Symbion International and their Phase
I trial data and we plan to submit our  application for approval of Phase II/III
pivotal studies.  If the Phase II/III study is approved,  we expect it, together
with  the  pre-Phase  II/III  efforts,  to  cost  an  estimated   $2,050,000  to
$3,350,000,  plus  estimated  manufacturing  and  supply  costs of  $350,000  to
$400,000. These trials can take anywhere from 29 to 42 months. Until we have met
with the FDA, which we plan to do within the next 6 months, we cannot be certain
what additional studies,  assuming that Phase II/III study supports the efficacy
and safety of Cytolin, will be required to receive marketing approval.

If we are unable to complete  clinical trials on a timely basis,  with favorable
results,  our  costs  will  increase  significantly  and we may not have  enough
capital to support  further  research and  development and continue in business.
Also, if we incur significant  delays in being able to market our product,  even
if we are ultimately  able to do so, we will be delayed in earning  revenues and
probably will require additional financing to continue in business.

                                       11


Patents

During fiscal year 2004,  several  European patents were granted with respect to
our technology.  The new patents are covered by our License Agreement with Allen
D. Allen,  our president.  These patents are designated  European  Patent No. 94
912826.8,  for the United Kingdom,  Germany,  France,  Switzerland,  Italy,  the
Netherlands, Portugal, Spain, and Sweden, and are the counterparts to our United
States Patent No. 5424066. Patents are pending in those same countries which, if
granted,  will be the  equivalent of our United States  Patent No.  5651970.  We
estimate the costs  associated  with these pending  patents to be  approximately
$65,000, including amounts we have already spent. We may file additional patents
during the  current  fiscal  year  including  Hong  Kong,  if our  research  and
development  efforts  warrant them. We do not have any other  potential  patents
identified at this time.

Litigation

For a thorough  discussion  of our  pending  litigation,  please see the section
entitled "Legal Proceedings." In Part 2, Item 1.

We were plaintiffs in two pending cases, CytoDyn of New Mexico, Inc. et. al., v.
Amerimmune  Pharmaceuticals,  Inc. et al., Case number BC290154 and the other in
Ventura County, in a case captioned CytoDyn, Inc., et al. v. Amerimmune, Inc. et
al., Case number SC039250., each involving our rights to the patented technology
underlying  Cytolin and any other  products we might wish to develop.  The first
case was dismissed and the second case was decided in our favor.

Establishing a Market and Obtaining Funding

We will  require  funding  during the 2005 fiscal year in order to continue  our
research and  development  efforts and to stay in  business.  The amount of that
funding is directly  related to the  clinical  trials we are able to conduct and
the amounts we will need for our company operations.

We filed a  registration  statement  on Form SB-2 on June 1, 2004,  covering the
sale of 250,000 shares of common stock at $0.75 per share, for total proceeds of
$187,500,  to be used  primarily  for general and  administrative  expense,  SEC
compliance costs, and legal and accounting fees. This registration statement has
not yet gone  effective,  and we cannot  assure  that it will or that the shares
that would be offered would sell. We intend,  if this offering does go effective
and if the shares sell, to seek an  established  market for our securities on an
established quotation system, such as the NASD over-the-counter  bulletin board,
which we hope would give us a wider base of investors.  We may not, however,  be
able to achieve our goals.


In addition to operating  funds, we will need from  approximately  $2,762,000 to
$4,112,000  for  research  and  development,   including  clinical  trials,  and
manufacturing  and supply costs,  depending  upon whether we are approved by the
FDA to conduct a Phase II/III pivotal study.


We do not have any of this funding  arranged or secured,  and we do not yet have
plans for raising the funding we require.  We  anticipate  that we will seek the
funding  through  further equity  offerings,  either by private  placement or by
registered  offering,  or by  possible  joint  venture  arrangements  with other
parties.  If we are unable to secure the necessary funding,  we will not be able
to conduct our research and development activities or to continue in business.


Joint Ventures:

Buy-Sell  Agreement with Symbion Research  International.  Effective  January 5,
2005.

                                       12


Our director, Peggy C. Pence, PhD., is the President and Chief Executive Officer
of Symbion  Research  International,  Inc. On January 5, 2005, we entered into a
buy-sell  agreement  to purchase  intellectual  property  owned by Symbion.  The
agreement describes the intellectual property in detail which summarized, is the
Phase 1 clinical  data and the protocol for the Phase II study.  Under the terms
of this agreement:

-    CytoDyn,  Inc may purchase  Symbion's  Phase I clinical  data in connection
     with  obtaining  approval  from the FDA to conduct the Phase  II/Phase  III
     stud(ies) for Cytolin.
-    CytoDyn, Inc will grant 83,122 non-qualified stock options with an exercise
     price of $.75 per share that will vest  immediately and be exercisable over
     5 years.
-    CytoDyn,  Inc will pay $25,000 to Symbion  out of the  proceeds of the SB-2
     offering
-    CytoDyn,  Inc will pay $275,000 to Symbion once our secondary  financing is
     received.

In the event the  shareholders  do not  approve  the  company's  option  plan by
December 31, 2005, CytoDyn, Inc will pay Symbion $62,341.50 in U.S. dollars.

The results of the Phase II/III stud(ies) for Cytolin shall be the sole property
of CytoDyn,  Inc upon Symbion's  receipt of the final payment called for by this
agreement.  If all  payments  are not  received,  the  property  shall revert to
Symbion.

We believe that the data from these Phase I trials  support  approval by the FDA
of Phase II trials, and we intend to seek approval for the Phase II trials .


Exploring other Joint Ventures


While we continue to pursue FDA  approval  of our Cytolin  product,  we are also
considering entering into joint ventures to develop other types of products.  We
have,  for  instance,  entered  into  a  nondisclosure  agreement  with  another
development  stage  biotech  company to  discuss  the  possibility  of the joint
development  of drugs to treat  neuropsychiatric  diseases or  disorders.  These
discussions  are in the early  stages and we do not know if we will enter into a
joint venture or other  arrangement  with this company or if any products  might
ensue from our efforts.

We may also pursue joint  ventures or other  arrangements  to obtain funding for
our Cytolin-related  endeavors,  but we have not pursued this possibility and do
not have any prospects at this time.

Other Matters

We do not expect,  in the next 12 months,  to make any significant  expenditures
for equipment.  We expect to hire additional  management once additional funding
is secured.  Otherwise we do not expect to make any  significant  changes in the
number of employees that we have. We have no off-balance sheet arrangements.

Part I.  Item 3.  Controls and Procedures
-------           -----------------------

(a)  Evaluation of disclosure controls and procedures
     ------------------------------------------------

     We maintain  controls and  procedures  designed to ensure that  information
     required to be  disclosed  in the reports  that we file or submit under the
     Securities  Exchange Act of 1934 is  recorded,  processed,  summarized  and
     reported  within the time  periods  specified in the rules and forms of the
     Securities and Exchange  Commission.  Based upon their  evaluation of those
     controls and procedures performed within 90 days of the filing date of this
     report,  our  chief  executive  officer  and the  chief  financial  officer
     concluded that our disclosure controls and procedures were adequate.

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(b)  Changes in internal controls
     ----------------------------

     There were no  significant  changes in our  internal  controls  or in other
     factors that could  significantly  affect these controls  subsequent to the
     date of the evaluation of those controls by the chief executive officer and
     chief financial officer.

Part 2.    Other Information
-------    -----------------

Item 1 -  Legal Proceedings.

CytoDyn of New Mexico, Inc. et al., v. Amerimmune Pharmaceuticals,  Inc. et al.,
Case number BC 290154,  California  Superior  Court in and for the County of Los
Angeles

The First Amended and Supplemental Complaint alleged causes of action for unfair
business  competition,  inducement  of breach  of  contract,  fraud  and  unjust
enrichment, and declaratory and equitable relief. This case was dismissed due to
the attorney's lack of attention to the case. The judge stated that the evidence
was not presented in an orderly and logical fashion. The company may appeal this
case given the costs associated with it and the relief awarded to us in the case
below.

Rex H.  Lewis,  a  Defendant  and  former  director  and  C.E.O.  of  Amerimmune
Pharmaceuticals,  Inc. has filed a First Amended Cross-Complaint against CytoDyn
of New Mexico, Inc., Allen D. Allen, Corinne E. Allen, Ronald J. Tropp, Brian J.
McMahon , Daniel M.  Stickland,  M.D.  and unknown  others  designated  as "Does
101-150".

Mr. Lewis  alleges,  among other things,  misrepresentations  or failure to make
disclosures  related to Cytolin and its  development,  approval  and  marketing;
interference with Amerimmune's  attempt to complete clinical research related to
Cytolin and Mr. Lewis' actual or prospective business  relationships;  and libel
and slander of Mr. Lewis.

Currently the Cross-Complaint  asserts causes of action for fraud,  interference
with prospective  business  interests,  libel and slander.  The requested relief
includes  damages  (alleged  to range from $3  million to $20  million or more),
punitive damages, costs and other "just and proper" relief.

The outcome of litigation is uncertain.  Management believes that an unfavorable
result is unlikely with respect to the claims raised by the Complaint,  and that
the claims raised by the  Cross-Complaint are without merit. The defendants have
retained new counsel which are the same  attorney's  that  represented us in the
following case that was decided in our favor.

Discovery is continuing.  Trial is scheduled for June 2005.

CytoDyn,  Inc.,  et al.  v.  Amerimmune,  Inc.  et al.,  Case  number  SC039250,
--------------------------------------------------------------------------------
California Superior Court in and for the County of Ventura.
-----------------------------------------------------------

The principal  relief sought was a declaration  that the license granted and the
assignment of the technology,  patents and drug application made pursuant to the
Conditional  License Agreement were terminated no later than September 12, 2001,
and  that  Allen  and  we  are  the  owners  of  the  technology,   patents  and
investigational  new drug  application,  free of any  claims of the  defendants.
Costs, attorney's fees, and other "just and proper" relief also were sought.

                                       14


This case was decided in favor of the plaintiffs,  CytoDyn and Allen, on October
4, 2004 and the  plaintiffs  were  awarded  the  declaratory  relief  sought and
attorneys' fees.

Symbion Research  International,  Inc., v. Amerimmune,  Inc. et al., Case number
SC035668,  California  Superior Court in and for the County of Ventura.  We were
not a party to this action;  however the action  affects  intellectual  property
which is important to us.
                                                                         
A default was entered against Amerimmune,  Inc. on December 18, 2003. A judgment
was entered in favor of Symbion International on September 17, 2004 granting the
declarative relief sought.


The  intellectual  property  generated in the early phase FDA clinical trials is
necessary to obtain approval for, and to conduct,  further FDA clinical tests of
Cytolin. Because a satisfactory result was obtained in this action, we were able
to  negotiate an  agreement  with Symbion that will allow the use in  subsequent
phases of clinical test of Cytolin of the research  data  generated in the early
phases.  CytoDyn will purchase this data for $362,000 as stated under a purchase
agreement,  $25,000 will paid from the SB-2 registration proceeds,  83,122 stock
options will be granted  with an exercise  price of $0.75 per share and $275,000
will be due and payable once the secondary round of financing has been received.
Please see Exhibit 10.5.2.


Item 2 - Changes in Securities  and Small  Business  Issuer  Purchases of Equity
Securities.

          No response required.

Item 3 -  Defaults Upon Senior Securities.

          No response required.

Item 4 - Submission of Matters to a Vote of Security Holders.

          No response required.

Item 5 -  Other Information.

          No response required.

Item 6 - Exhibits and Reports on Form 8-K.

          (a)     Exhibits:

                  1.     31.1:    Certification by the CEO
                  2.     31.2:    Certification by the CFO
                  3.     32.1:    Certification  Pursuant  to 18 U.S.C.  Section
                                  1350, as adopted  pursuant  to Section  906 of
                                  the Sarbanes-Oxley Act of 2002 - CEO
                  4.     32.2:    Certification  Pursuant  to 18 U.S.C.  Section
                                  1350, as adopted  pursuant  to Section  906 of
                                  the Sarbanes-Oxley Act of 2002 - CFO

          (b)     Reports on Form 8-K:

                  None.


                                       15


SIGNATURES

The  financial   information  furnished  herein  has  not  been  audited  by  an
independent accountant;  however, in the opinion of management,  all adjustments
(only consisting of normal recurring accruals) necessary for a fair presentation
of the results of  operations  for the three  months  ended August 31, 2004 have
been included.

Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.




                                           CYTODYN, INC.                  
                                           (Registrant)                   
                                                                        
                                                                        
DATE:    March 23, 2005                    BY:  /s/ Allen D. Allen        
         --------------                       -----------------------   
                                              Allen D. Allen              
                                              President and CEO           
                                                                        
                  



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