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

                                   FORM 10-QSB

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


 
For Quarter Ended: February 28, 2005           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             (I.R.S. Employer Identification No.)
 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 April 18, 2005
 

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

--------------------------------------------------------------------------------
                     This document is comprised of 17 pages.
--------------------------------------------------------------------------------



                                      INDEX

                                                                            Page
                                                                            ----
                                                                      
PART 1 - FINANCIAL INFORMATION

  Item 1.  Financial Statements

  Condensed balance sheet, February 28, 2005 (unaudited)..................     3
  Condensed statements of operations, three and nine months ended             
     February 28, 2005 (unaudited) and 2004 (unaudited)...................     4
  Condensed statements of operations, nine months ended                       
     February 28, 2005 (unaudited) and 2004 (unaudited)...................     5
  Notes to condensed financial statements (unaudited).....................     6
                                                                              
  Item 2.  Management's Discussion and Analysis or Plan of Operation......    12
                                                                              
  Item 3.  Controls and Procedures........................................    15
                                                                          
PART 2 - OTHER INFORMATION

  Item 1.  Legal Proceedings..............................................    15
  Item 2.  Changes in Securities and Small Business Issuer Purchases of       
              Equity Securities...........................................    16
  Item 3.  Defaults Upon Senior Securities................................    17
  Item 4.  Submission of Matters to a Vote of Security Holders............    17
  Item 5.  Other Information..............................................    17
  Item 6.  Exhibits.......................................................    17
                                                                              
Signatures................................................................    17
                                                                              
                                                                              
                                                                              


                                       2


Part I, Item 1. Financial Statements

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

                               February 28, 2005

                                     Assets


Cash ..........................................................   $    84,948
Property and equipment, less accumulated
    depreciation of $1,211 ....................................         5,087
Deposit .......................................................           495
                                                                  -----------

                                                                  $    90,530
                                                                  ===========

                    Liabilities and Shareholders' Deficit

Liabilities:
    Accounts payable ..........................................   $   463,275
    Accrued liabilities .......................................        83,367
    Notes payable (Note 3) ....................................        85,000
    Accrued interest payable (Note 3) .........................            47
    Indebtedness to related parties (Note 2) ..................       137,979
                                                                  -----------
                  Total liabilities ...........................       769,668
                                                                  -----------

Commitments (Note 7) ..........................................          --   

Shareholders' deficit:
    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 ................................        40,942
    Accumulated deficit .......................................    (1,601,912)
    Deficit accumulated during development stage ..............    (1,034,502)
                                                                  -----------
                  Total shareholders' deficit .................      (679,138)
                                                                  -----------

                                                                  $    90,530
                                                                  ===========

            See accompanying notes to condensed financial statements

                                       3




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


                                                      Three Months Ended            Nine Months Ended
                                                         February 28,                  February 28,
                                                 --------------------------    --------------------------
                                                     2005           2004           2005           2004
                                                 -----------    -----------    -----------    -----------
                                                                                  
Operating expenses:
    General and administrative ...............   $    89,435    $   128,996    $   320,785    $   188,929
    Stock-based compensation (Note 5):       
       Financial consulting services .........          --             --           11,928           --   
    Legal fees, related party ................          --             --             --             --   
    Depreciation .............................           460           --            1,211           --   
    Research and development (Note 6) ........       362,342           --          362,342           --   
                                                 -----------    -----------    -----------    -----------
                   Total operating expenses...       452,237        128,996        696,266        188,929
                                                 -----------    -----------    -----------    -----------
                   Operating loss ............      (452,237)      (128,996)      (696,266)      (188,929)
                                            
Interest income ..............................             3             52            230             55
Interest expense .............................           (92)          (296)          (422)          (441)
                                                 -----------    -----------    -----------    -----------
                   Loss before income taxes...      (452,326)      (129,240)      (696,458)      (189,315)

Income tax provision (Note 4) ................          --             --             --             --   
                                                 -----------    -----------    -----------    -----------
                                         
                   Net loss ..................   $  (452,326)   $  (129,240)   $  (696,458)   $  (189,315)
                                                 ===========    ===========    ===========    ===========
                                         
Basic and diluted loss per share .............   $     (0.06)   $     (0.02)   $     (0.09)   $     (0.05)
                                                 ===========    ===========    ===========    ===========
                                         
Basic and diluted weighted average       
    common shares outstanding ................     8,069,307      6,674,862      8,069,307      3,909,985
                                                 ===========    ===========    ===========    ===========
                                         






            See accompanying notes to condensed financial statements

                                       4

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

                                                           Nine Months Ended
                                                              February 28,
                                                        -----------------------
                                                           2005         2004
                                                        ----------   ----------

                      Net cash used in
                         operating activities .......   $ (194,361)  $ (191,741)
                                                        ----------   ----------
                                                    
Cash flows from investing activities:               
    Property and equipment purchases ................       (3,167)      (1,722)
                                                        ----------   ----------
                      Net cash used in                                 
                         investing activities .......       (3,167)      (1,722)
                                                        ----------   ----------
                                                                       
Cash flows from financing activities:                                  
    Capital contributions by president (Note 2) .....        5,512        2,500
    Proceeds from notes payable to                                     
       related parties (Note 2) .....................        5,000       10,000
    Proceeds from notes payable to others (Note 3)...       85,000         --   
    Proceeds from the sale of common stock ..........         --        405,000
    Payment of offering costs .......................         --        (49,500)
                                                        ----------   ----------
                      Net cash provided by                             
                         financing activities .......       95,512      368,000
                                                        ----------   ----------
                                                                       
                         Net change in cash .........     (102,016)     174,537
                                                                       
Cash, beginning of period ...........................      186,964        3,238
                                                        ----------   ----------
                                                                        
Cash, end of period .................................   $   84,948   $  177,775
                                                        ==========   ==========
                                                                        
Supplemental disclosure of cash flow information:                       
    Income taxes ....................................   $     --     $     --   
                                                        ==========   ==========
    Interest ........................................   $      375   $     --   
                                                        ==========   ==========
                                                                         
                                                                           

            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 periods
ended  February  28, 2005 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 nine months ended  February 28, 2005,  the Company's  president  paid
administrative  expenses on behalf of the Company totaling $5,512.  The payments
have 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. On January 18,
2005, an officer advanced the Company an additional  $5,000 for working capital.
Management  plans to repay the notes  through  cash  payments,  issuance  of the
Company's  common  stock,  or a  combination  thereof.  The balance  owed to the
director  carries no  interest  rate and is due on demand.  The  balance  due of
$76,694 remained unpaid at February 28, 2005 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 November 30, 2004, no arrangements had been made
for the Company to repay this obligation; however, management plans to repay the
balance  through cash  payments,  issuance of the Company's  common stock,  or a
combination  thereof. 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".

Note 3:  Notes Payable

The Company's  promissory notes payable consist of the following at February 28,
2005:
 

                                       6


Note payable to an individual issued on February 24, 2005, 
     matures March 9, 2006, 5% annual interest rate,
     unsecured................................................ $    30,000
Note payable to an individual issued on February 24, 2005,          
     matures March 9, 2006, 5% annual interest rate,                
     unsecured................................................      25,000
Note payable to an individual issued on February 24, 2005,          
     matures March 8, 2006, 5% annual interest rate,                
     unsecured................................................      25,000
Note payable to an individual issued on February 24, 2005,          
     matures March 9, 2006, 5% annual interest rate,                
     unsecured................................................       5,000
                                                               -----------
                                                               $    85,000
                                                               ===========
                                                                     
Accrued interest payable on the above notes totaled $47 at February 28, 2005.

Note 4:  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 5:   Stock Awards

During the year ended May 31, 2004,  the Company  committed to grant a financial
representative  warrants  to purchase  426,000  shares of the  Company's  common
stock. The warrants carry an exercise price of $.30 per share,  vest on the date
of grant and expire after five years from the date of grant.  The warrants  were
granted on November 25, 2004 and, once exercised,  the common shares  underlying
the warrants have been registered  under the Company's SB-2 filing.  No warrants
have yet been exercised.

The Company's  common stock had no traded market value on the date of grant. The
market  value  of the  stock  was  determined  to be  $.30  per  share  base  on
contemporaneous  sales of common stock to unrelated third party  investors.  The
weighted average exercise price and weighted average fair value of these options
as of November 30, 2004 were $0.30 and $0.028, respectively.

The fair value for the options  granted during the six months ended November 30,
2004 was estimated at the date of grant using the  Black-Scholes  option-pricing
model with the following assumptions:

           Risk-free interest rate......................      2.00%  
           Dividend yield...............................      0.00%  
           Volatility factor............................      0.00%  
           Weighted average expected life...............    5 years  
           
The following schedule summarizes the changes in the Company's outstanding stock
options:



                                       7


                                                                      Weighted
                                Awards Outstanding and Exercisable     Average  
                                ----------------------------------    Exercise
                                  Number of        Exercise Price       Price
                                    Shares            Per Share       Per Share
                                -------------     ----------------   -----------
Balance at May 31, 2004........     150,000        $0.50 to $1.50    $      1.00
   Awards granted..............     426,000             $0.30        $      0.30
   Awards exercised............           -             $0.00        $         -
   Awards cancelled/expired....           -             $0.00        $         -
                                -------------                        -----------
                                                                         
Balance at February 28, 2005...     576,000        $0.30 to $1.50    $      0.48
                                =============                            
                                          
Note 6:   Research and Development

The  Company's  director,  Peggy C.  Pence,  PhD.,  is the  President  and Chief
Executive  Officer of  Symbion  Research  International,  Inc.  ("Symbion").  On
January 5, 2005,  the  Company  entered  into a buy-sell  agreement  to purchase
certain  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. This intellectual property is necessary
to obtain  approval for, and to conduct,  further FDA clinical tests of Cytolin.
Cytolin is a potential new drug being developed by the Company for the treatment
of Human Immunodeficiency Virus ("HIV") disease.

Under the terms of this agreement:

-    The Company may purchase Symbion's Phase I clinical data in connection with
     obtaining  approval from the FDA to conduct the Phase  II/Phase III studies
     for Cytolin.
-    The Company 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.
-    The Company will pay $25,000 to Symbion by February 10, 2005, 30 days after
     execution of the agreement.
-    The Company  will pay  $275,000  to Symbion  once the  Company's  secondary
     financing is received.

The Company paid Symbion  $25,000 out of loan  proceeds  received in March 2005.
Although  the payment was late,  Symbion has  accepted it and the contract is in
force.  In the event the  Company's  shareholders  do not approve the  company's
option plan by December 31, 2005, the Company will pay Symbion $62,342.

The results of the Phase II/III  studies for Cytolin  shall be the sole property
of the Company upon  Symbion's  receipt of the final payment  called for by this
agreement. If all remaining payments are not received, the property shall revert
to Symbion.

Note 7:   Commitments
 
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.

Note 8:   Financial Information - Development Stage
 
Following is the Statement of Operations for the period in which the Company has

                                       8


been in the development stage as required by SFAS No. 7.

                   October 28, 2003 Through February 28, 2005

            Operating expenses:
               General and administrative .............   $    638,465 
               Stock-based compensation:                     
                  Financial consulting services .......         11,928
               Legal fees, related party ..............         20,050
               Depreciation ...........................          1,415
               Research and development................        362,342
                                                          ------------
                   Total operating expenses ...........      1,034,200
                                                          ------------
                   Operating loss .....................     (1,034,200)
                                                             
            Interest income ...........................            573
            Interest expense ..........................           (875)
                                                          ------------
                   Loss before income taxes ...........     (1,034,502)
                                                             
            Income tax provision ......................           --
                                                          ------------

                   Net loss ...........................   $ (1,034,502)
                                                          ============
                                                           

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.









                                       9


                   October 28, 2003 Through February 28, 2005

                      Net cash used in
                       operating activities ................   $ (551,256)
                                                               ----------
       
       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 ................        5,512
         Proceeds from notes payable issued to                   
           related parties .................................      116,194
         Repayment of notes payable to related                   
           parties .........................................      (50,000)
         Proceeds from notes payable issued to others ......       85,000
         Proceeds from the sale of common stock ............      540,000
         Payment of offering costs ........ ................      (54,000)
                                                               ----------
                      Net cash provided by                       
                       financing activities ................      642,706
                                                               ----------
                                                                 
                      Net change in cash ...................       84,948
                                                                 
       Cash, beginning of period ...........................         --   
                                                               ----------
                                                                 
       Cash, end of period .................................   $   84,948
                                                               ==========
                                                                 
       Supplemental disclosure of cash flow information:         
         Income taxes ......................................   $     --   
                                                               ==========
         Interest..........................................    $      828
                                                               ==========
                                                                

Note 9:   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. 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;

                                       10


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 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

                                       11


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.

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 10: Subsequent Events

During March 2005, the Company issued  promissory  notes payable for proceeds of
$36,000. The notes carry a 5% interest rate and mature one year from the date of
the note.

During  March  2005,  the  Company  paid  Symbion  $25,000  toward its  Buy-Sell
Agreement (see Note 6).
 

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

Plan of Operation
 
During the next 12 months, our objectives are:

     o    to continue clinical trials of Cytolin;
     o    to  continue  our  efforts  to protect  our  technology  by  obtaining
          additional patents in The United Kingdom,  the 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. We believe that the data from
these trials support approval by the FDA of Phase II trials.

Projected  costs to complete  our  research  and  development  and to obtain FDA
--------------------------------------------------------------------------------
approval of a BLA:
-----------------

We have negotiated with Symbion  International  for the right to use the Phase 1
data for a total of $362,000  and to seek  approval for the Phase II trials from
the FDA.  If the Phase  II/III  study is  approved  by the FDA,  we  expect  it,
together with the pre-Phase II/III efforts,  to cost an estimated  $2,050,000 to
$3,350,000  for  Symbion  to  conduct  the  clinical   trials,   plus  estimated
manufacturing  and supply  costs of $350,000 to $400,000  and  $362,000  for the
Phase Ia/b data for a total of $2,762,000 to $4,112,000.

                                       12


Timing and anticipated completion dates for research and development.
---------------------------------------------------------------------

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 six 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 The completion
of a Phase  II/III  Pivotal  Study  would  allow the  submission  of a marketing
application  and if  approved,  would  allow us to market  Cytolin in the United
States.

Date we expect to begin benefiting from the product:
----------------------------------------------------

We expect to complete  our  research  and  development  of all Cytolin  clinical
trials  needed for  approval  of a marketing  application  if at all by December
2008.

Risks and uncertainties associated with completing development within reasonable
--------------------------------------------------------------------------------
period of time and if products are not completed on a timely basis:
------------------------------------------------------------------

Even if we are able to complete the  development  within a reasonable  period of
time our  competitors  could still come out with  something  competitive  to our
product.  Toxicity  in the  product  could go  undetected  until Phase IV Safety
Surveillance after drug approval. We may have to continue to litigate to protect
technology, or challenges to patents that have not yet expired, etc. The medical
community may lack of  acceptance  of our product.  There may be an inability to
secure  third  party  payees  such  as  if  Medicare  would  cover  costs.  Post
registration  manufacturing  problems or  downturn of economy or industry  could
also be risks.

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.

Patents

During fiscal year 2004, several European patents were granted.  The new patents
are covered by our License  Agreement  with Allen D. Allen,  our president  that
gives us the exclusive right to develop his technology worldwide.  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 if our
research  and  development  efforts  warrant  them,  but we do not have any such
potential  patents  identified at this time.  The license  acquired gives us the
right to develop Mr. Allen's worldwide patents.

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.

                                       13


Establishing a Market and Obtaining Funding

We will require  funding  during the 2005 fiscal year in order to continue  with
research and  development  efforts and to stay in business.  Additional  funding
will  have to  occur  within  the  next  twelve  months  in  order  to  continue
operations.  The amount of that  funding  is  directly  related to the  clinical
trials  we are  able  to  conduct  and the  amounts  we  will  need to  continue
operations.

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 borrowed  $121,000  from  certain  individuals  who are friends and  business
acquaintances  of the officers and  directors of the Company in March 2005.  The
company issued  promissory  notes in exchange for the borrowed funds.  The notes
carry 5% interest and are due by March 9, 2006.  In addition to operating  funds
and clinical trial funds the company will need to raise the funds to repay these
notes.

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.

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
     studies 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 by  February  10,  2005,  30 days
     after execution of the agreement.
-    CytoDyn,  Inc will pay $275,000 to Symbion once our secondary  financing is
     received.

We have paid Symbion $25,000 out of the loan proceeds we received in March 2005.
Although  the payment was late,  Symbion has  accepted it and the contract is in
force.

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  studies 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 remaining payments are not received, the property shall revert
to Symbion.

                                       14


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 will continue to staff the company as funds become available.
However,  currently,  we have no plans  for  significant  changes  in  number of
employees.
 

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.

(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.

                                       15


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.

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
anticipate  negotiating  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.

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

          No response required.

                                       16


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.


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 and six months  ended  November 30,
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:    April 18, 2005                              BY:  /s/ Allen D. Allen
                                                        ------------------------
                                                             Allen D. Allen
                                                             President and CEO



                                       17