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

                                    FORM 10-Q

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

              TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                           THE SECURITIES ACT OF 1933

For Quarter Ended: November 30, 2008            Commission File Number 000-49908
                   -----------------                                   ---------

                                  CYTODYN, INC.
                                  -------------
             (Exact name of registrant as specified in its charter)


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


                      1511 Third Street, Santa Fe,        87505
               ---------------------------------------- ----------
               (Address of principal executive offices) (Zip code)


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

                   (Former address, changed sine last report)

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     No X
                                                             ---    ---

Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate website, if any, every Interactive Data File required to
be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405
of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files).  Yes     No
                                                                ---    ---

________________________________________________________________________________



Indicate by check mark whether the registrant is a large accelerated filer, and
an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See Definition of "accelerated filer, large accelerated filer, and smaller
reporting company" in 12(b)2 of the Exchange Act (check one)

Large Accelerated Filer                     Accelerated Filer
                        ---                                   ---

Non-accelerated Filer                       Smaller Reporting Company  X
                      ---                                             ---

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act): Yes     No X
                                    ---    ---

On June 3, 2010, there were 20,090,796 shares outstanding of the registrant's no
par common stock.







                                TABLE OF CONTENTS

                                                                           PAGE
                                                                         -------

PART I    FINANCIAL INFORMATION
          ---------------------

Item 1    Financial Statements
          --------------------

          Condensed Consolidated Balance Sheets as of November 30, 2008
           (unaudited) and May 31, 2008                                     1

          Condensed Consolidated Statement of Operations for the
           Three And Six Ended November 30, 2008 and 2007, and for the
           Period from October 28, 2003 to November 30, 2008 (unaudited)    2

          Condensed Consolidated Statement of Changes in Stockholders'
           Deficit for the Period from October 28, 2003 to November 30,
           2008 (unaudited)                                               3 - 6

          Condensed Consolidated Statement of Cash Flows for the Six
           Months Ended November 30, 2008 and 2007 and for the
           Period from October 28, 2003 to November 30, 2008 (unaudited)  7 - 8

          Notes to Condensed Consolidated Financial Statements
          (unaudited)                                                     9 - 23

Item 2    Management's Discussion and Analysis of Financial
          -------------------------------------------------
          Condition and Results of Operations.                             24
          ------------------------------------

Item 3    Quantitative and Qualitative Disclosures About Market Risk       28
          ----------------------------------------------------------

Item 4T   Controls and Procedures                                          28
          -----------------------

PART II   OTHER INFORMATION
          -----------------

Item 1    Legal Proceedings                                                29
          -----------------

Item 2    Unregistered Sales of Equity Securities and Use of Proceeds      29
          -----------------------------------------------------------

Item 3    Defaults Upon Senior Securities                                  29
          -------------------------------

Item 4    Submission of Matters to a Vote of Security Holders              29
          ---------------------------------------------------

Item 5    Other Information                                                29
          -----------------

Item 6    Exhibits                                                         29
          --------






                                     PART I

Item 1.   Financial Statements

                                  Cytodyn, Inc.
                          (A Development Stage Company)
                      Condensed Consolidated Balance Sheets

                                                                    November 30,     May 31,
                                                                       2008           2008
                                                                   (unaudited)
                                                                   -----------    -----------
                                                                            
               Assets
Current Assets:
   Cash                                                            $    40,343    $    85,435
   Prepaid insurance                                                    19,473         43,978
   Prepaid license fees                                                  7,500          7,500
                                                                   -----------    -----------
Total current assets                                                    67,316        136,913

Furniture and equipment, net                                             2,726          1,422

Intangible assets, net                                                     404            647

Other Assets                                                            33,351         37,240
                                                                   -----------    -----------

                                                                   $   103,797    $   176,222
                                                                   ===========    ===========

Liabilities and Shareholders' Deficit

Current liabilities:
   Accounts payable                                                $   357,501    $   388,459
   Accrued liabilities                                                  24,424         25,274
   Short-term portion of legal accrual                                  50,000         50,000
   Accrued interest payable                                             59,597         44,337
                                                                   -----------    -----------
Total current liabilities                                              491,522        508,070

Long Term Liabilities
   Accrued salaries - related party                                    229,500        229,500
   Notes payable                                                       138,000        145,000
   Convertible notes payable, net                                       20,927         20,927
   Indebtedness to related parties                                     538,297        572,840
   Legal accrual                                                        25,000         25,000
                                                                   -----------    -----------

Total Liabilities                                                    1,443,246      1,501,337
                                                                   -----------    -----------

Shareholders' deficit:
   Preferred stock, no par value; 5,000,000 shares authorized,
         100,000 shares issued and outstanding                         167,500        167,500
   Common stock, no par value; 25,000,000 shares authorized,
         14,540,407 and 12,546,407 shares issued and outstanding
         at November 30, 2008 and May 31, 2008, respectively         5,465,865      4,468,865
   Additional paid-in capital                                        2,818,661      2,613,257
   Accumulated deficit on unrelated dormant operations              (1,601,912)    (1,601,912)
   Deficit accumulated during development stage                     (8,189,563)    (6,972,825)
                                                                   -----------    -----------
         Total shareholders' deficit                                (1,339,449)    (1,325,115)
                                                                   -----------    -----------

                                                                   $   103,797    $   176,222
                                                                   ===========    ===========



See accompanying notes to condensed consolidated financial statements.

                                        1




                                  Cytodyn, Inc.
                          (A Development Stage Company)
                 Condensed Consolidated Statements of Operations
                                   (Unaudited)

                                                                                                      October 28,
                                                                                                         2003
                                          Three months ended,              Six months ended,            through
                                      11/30/2008      11/30/2007      11/30/2008      11/30/2007      11/30/2008
                                     ------------    ------------    ------------    ------------    ------------
                                                                                      
Operating expenses:
   General and administrative        $    402,786    $    237,004    $    660,483    $    430,768    $  5,186,032
   Amortization / depreciation              4,252             417           4,641           1,002         178,637
   Research and development               195,000             281         460,000          10,259       1,411,228
   Legal fees                              43,840           9,786          73,194         179,857         664,583
   Committments and contingencies            --              --              --          (150,000)           --
                                     ------------    ------------    ------------    ------------    ------------

        Total operating expenses          645,878         247,488       1,198,318         471,886       7,440,480
                                     ------------    ------------    ------------    ------------    ------------

        Operating loss                   (645,878)       (247,488)     (1,198,318)       (471,886)     (7,440,480)

Interest income                              --              --              --              --             1,627

Interest expense:
   Interest on convertible debt              --           (10,420)           --           (11,035)       (696,259)
   Interest on notes payable              (12,100)           (134)        (18,420)         (1,806)        (54,451)
                                     ------------    ------------    ------------    ------------    ------------
        Loss before income taxes         (657,998)       (258,042)     (1,216,738)       (484,727)     (8,189,563)

Income tax provision                         --              --              --              --              --
                                     ------------    ------------    ------------    ------------    ------------

Net loss                             $   (657,988)   $   (258,042)   $ (1,216,738)   $   (484,727)   $ (8,189,563)
                                     ============    ============    ============    ============    ============

Basic and diluted loss per share     $      (0.05)   $      (0.02)   $      (0.09)   $      (0.04)   $      (0.84)
                                     ============    ============    ============    ============    ============

Basic and diluted weighted average
    common shares outstanding          13,958,792      11,154,407      13,386,691      11,261,355       9,784,704
                                     ============    ============    ============    ============    ============



See accompanying notes to condensed consolidated financial statements

                                        2




                                                        CytoDyn, Inc.
                                               (A Development Stage Company)
                                 Consolidated Statements of Changes in Shareholders' Deficit
                                        Period October 28, 2003 through November 30, 2008


                                                                                                             Deficit
                                                                                                           Accumulated
                             Preferred Stock        Common Stock       Stock for  Additional                  During
                            -----------------  ----------------------   Prepaid     Paid-in   Accumulated  Development
                             Shares   Amount     Shares      Amount     Services    Capital     Deficit       Stage        Total
                            -------  --------  ----------  ----------  ---------  ----------  -----------  -----------  -----------
                                                                                             
Balance at October 28,
 2003, following
 recapitalization              --    $   --     6,252,640  $1,425,334  $    --    $   23,502  $(1,594,042) $      --    $  (145,206)

February through
 April 2004, sale of
 common stock less
 offering costs of
 $54,000 ($.30/share)          --        --     1,800,000     486,000       --          --           --           --        486,000

February 2004, shares
 issued to former
 officer as payment
 for working capital
 advance ($.30/share)          --        --        16,667       5,000       --          --           --           --          5,000

Net loss at year ended
 May 31, 2004                  --        --          --          --         --          --         (7,870)    (338,044)    (345,914)
                            -------  --------  ----------  ----------  ---------  ----------  -----------  -----------  -----------

Balance at May 31, 2004        --        --     8,069,307   1,916,334       --        23,502   (1,601,912)    (338,044)        (120)

July 2004, capital
 contribution by
 an officer                    --        --          --          --         --           512         --           --            512

November 2004, common
 stock warrants granted        --        --          --          --         --        11,928         --           --         11,928

February 2005, capital
 contribution by
 an officer                    --        --          --          --         --         5,000         --           --          5,000

Net loss at year ended
 May 31, 2005                  --        --          --          --         --          --           --       (777,083)    (777,083)
                            -------  --------  ----------  ----------  ---------  ----------  -----------  -----------  -----------

Balance at May 31, 2005        --        --     8,069,307   1,916,334       --        40,942   (1,601,912)  (1,115,127)    (759,763)




See accompanying notes to condensed consolidated financial statements

                                        3



                                                        CytoDyn, Inc.
                                               (A Development Stage Company)
                                 Consolidated Statements of Changes in Shareholders' Deficit
                                        Period October 28, 2003 through November 30, 2008

                                                                                                             Deficit
                                                                                                           Accumulated
                             Preferred Stock        Common Stock       Stock for  Additional                  During
                            -----------------  ----------------------   Prepaid     Paid-in   Accumulated  Development
                             Shares   Amount     Shares      Amount     Services    Capital     Deficit       Stage        Total
                            -------  --------  ----------  ----------  ---------  ----------  -----------  -----------  -----------
June through July 2005,
 sale of common stock
 less offering costs of
 $27,867 ($.75/share)          --        --       289,890     189,550       --          --           --           --        189,550

August 2005, common shares
 issued to extinguish
 promissory notes payable
 and related interest
 ($.75/share)                  --        --       160,110     120,082       --          --           --           --        120,082

May 2006, common shares
 issued to extinguish
 convertible debt              --        --       350,000     437,500       --          --           --           --        437,500

November 2005, 94,500
 warrants exercised
 ($.30/share)                  --        --        94,500      28,350       --          --           --           --         28,350

January through April
 2006, common shares
 issued for
 prepaid services              --        --       183,857     370,750   (370,750)       --           --           --           --

Amortization of prepaid
 stock services                --        --          --          --      103,690        --           --           --        103,690

January through June
 2006, warrants issued
 with convertible debt         --        --          --          --         --       274,950         --           --        274,950

January through May 2006,
 beneficial conversion
 feature of convertible
 debt                          --        --          --          --         --       234,550         --           --        234,550

March through May 2006,
 stock options granted
 to consultants                --        --          --          --         --       687,726         --           --        687,726



See accompanying notes to condensed consolidated financial statements

                                        4



                                                        CytoDyn, Inc.
                                               (A Development Stage Company)
                                 Consolidated Statements of Changes in Shareholders' Deficit
                                        Period October 28, 2003 through November 30, 2008

                                                                                                             Deficit
                                                                                                           Accumulated
                             Preferred Stock        Common Stock       Stock for  Additional                  During
                            -----------------  ----------------------   Prepaid     Paid-in   Accumulated  Development
                             Shares   Amount     Shares      Amount     Services    Capital     Deficit       Stage        Total
                            -------  --------  ----------  ----------  ---------  ----------  -----------  -----------  -----------
March 2006, stock
 options issued to
 extinguish debt               --        --          --          --         --        86,341         --           --         86,341

Net loss at year ended
 May 31, 2006                  --        --          --          --         --          --           --     (2,053,944)  (2,053,944)
                            -------  --------  ----------  ----------  ---------  ----------  -----------  -----------  -----------

Balance at May 31, 2006        --        --     9,147,664   3,062,566   (267,060)  1,324,509   (1,601,912)  (3,169,071)    (650,968)

Common stock issued
 to extinguish
 convertible debt              --        --       119,600     149,500       --          --           --           --        149,500

Convertible debt stock
 issued for
 AITI acquisition              --        --     2,000,000     934,399       --          --           --           --        934,399

Amortization of
 prepaid stock services        --        --          --          --      267,060        --           --           --        267,060

Common stock payable for
 prepaid services              --        --          --          --     (106,521)    120,000         --           --         13,479

Stock-based compensation       --        --          --          --         --       535,984         --           --        535,984

Warrants issued with
 convertible debt              --        --          --          --         --        92,500         --           --         92,500

Common stock issued for
 services                      --        --        30,000      26,400       --          --           --           --         26,400

Preferred shares
 issued AGTI                100,000   167,500        --          --         --          --           --           --        167,500

Net loss, May 31, 2007         --        --          --          --         --          --           --     (2,610,070)  (2,610,070)
                            -------  --------  ----------  ----------  ---------  ----------  -----------  -----------  -----------

Balance at May 31, 2007     100,000   167,500  11,297,264   4,172,865   (106,521)  2,072,993   (1,601,912)  (5,779,141)  (1,074,216)



See accompanying notes to condensed consolidated financial statements

                                        5



                                                        CytoDyn, Inc.
                                               (A Development Stage Company)
                                 Consolidated Statements of Changes in Shareholders' Deficit
                                        Period October 28, 2003 through November 30, 2008

                                                                                                             Deficit
                                                                                                           Accumulated
                             Preferred Stock        Common Stock       Stock for  Additional                  During
                            -----------------  ----------------------   Prepaid     Paid-in   Accumulated  Development
                             Shares   Amount     Shares      Amount     Services    Capital     Deficit       Stage        Total
                            -------  --------  ----------  ----------  ---------  ----------  -----------  -----------  -----------
Amortization of prepaid
 stock for services            --        --          --          --      106,521        --           --           --        106,521

Stock based compensation       --        --          --          --         --       461,602         --           --        461,602

Common stock issued to
 extinguish convertible
 debt                          --        --       750,000      75,000       --          --           --           --         75,000

Rescission of common
 stock issued for services     --        --      (142,857)   (100,000)      --          --           --           --       (100,000)

Original issue discount
 convertible debt with
 warrants                      --        --          --          --         --         3,662         --           --          3,662

Original issue discount
 convertible debt with
 beneficial conversion
 feature                       --        --          --          --         --        75,000         --           --         75,000

Stock issued for cash
 ($.50/share)                  --        --       642,000     321,000       --          --           --           --        321,000

Net loss                       --        --          --          --         --          --           --     (1,193,684)  (1,193,684)
                            -------  --------  ----------  ----------  ---------  ----------  -----------  -----------  -----------

Balance at May 31, 2008     100,000  $167,500  12,546,407  $4,468,865  $    --    $2,613,257  $(1,601,912) $(6,972,825) $(1,325,115)
                            =======  ========  ==========  ==========  =========  ==========  ===========  ===========  ===========


Stock issued for cash,
$.50/share (unaudited)         --        --     1,562,000     781,000       --          --           --           --        781,000

Stock issued for services
$.50/share (unaudited)         --        --       334,000     167,000       --          --           --           --        167,000

Stock-based compensation
(unaudited)                    --        --          --          --         --       205,404         --           --        205,404

Stock issued in payment
of accounts payable,
$.50/share (unaudited)         --        --        98,000      49,000       --          --           --           --         49,000

Net loss, ended
 November 30, 2008
 (unaudited)                   --        --          --          --         --          --           --     (1,216,738)  (1,216,738)
                            -------  --------  ----------  ----------  ---------  ----------  -----------  -----------  -----------
                            100,000  $167,500  14,540,407  $5,465,865       --    $2,818,661  $(1,601,912) $(8,189,563) $(1,339,449)
                            =======  ========  ==========  ==========  =========  ==========  ===========  ===========  ===========


See accompanying notes to condensed consolidated financial statements

                                        6




                                  CytoDyn, Inc.
                          (A Development Stage Company)
                      Consolidated Statements of Cash Flows
                                   (Unaudited)


                                                                                          October 28,
                                                                   6 months ended             2003
                                                            --------------------------      through
                                                             11/30/2008     11/30/2007     11/30/2008
                                                            -----------    -----------    -----------
                                                                                 
Cash flows from operating activities
   Net loss                                                 $(1,216,738)   $  (484,727)    (8,189,563)
   Adjustments to reconcile net loss to net cash
      used by operating activities:
         Amortization / depreciation                                890          1,002        174,886
         Amortization of original issue discount                   --              615        677,588
      Reversal of contingent liability                             --         (150,000)          --
      Purchased in process research and development                --             --          274,399
      Stock-based compensation                                  372,404        210,658      2,488,080
      Changes in current assets and liabilities:
         Accrued legal settlement                                  --             --           75,000
         Prepaid expenses                                        24,505         24,391         60,203
         Other assets                                             3,889           --          (33,351)
         Accounts payable, accrued
         interest and accrued liabilities                        32,452        203,480        682,846
         Deposits                                                  --              495
                                                            -----------    -----------    -----------
   Net cash used in operating activities                       (782,598)      (194,086)    (3,789,912)
                                                            -----------    -----------    -----------

Cash flows from investing activities:
   Furniture and equipment purchases                             (1,951)          --          (12,716)
                                                            -----------    -----------    -----------
   Net cash used in investing activities                         (1,951)          --          (12,716)
                                                            -----------    -----------    -----------

Cash flows from financing activities:
   Capital contributions by president                              --             --            5,512
   Proceeds from notes payable to related parties                  --            2,000        702,649
   Payments on notes payable to related parties                 (34,543)        (3,800)      (110,528)
   Proceeds from notes payable issued to individuals               --          170,000        145,000
   Payments on notes payable issued to individuals               (7,000)          --           (7,000)
   Proceeds from convertible notes payable                         --           29,000        686,000
   Proceeds from the sale of common stock                       781,000           --        1,859,417
   Payments for offering costs                                     --             --          (81,867)
   Proceeds from issuance of stock of AITI acquisition             --             --          512,200
   Proceeds from issuance of stock of AGTI acquisition             --             --          100,000
   Proceeds from exercise of warrants                              --             --           28,350
                                                            -----------    -----------    -----------
   Net cash provided by financing activities                    739,457        197,200      3,839,733
                                                            -----------    -----------    -----------

Net change in cash                                              (45,092)         3,114         37,105

Cash, beginning of period                                        85,435         16,604          3,238
                                                            -----------    -----------    -----------

Cash, end of period                                         $    40,343    $    19,718         40,343
                                                            ===========    ===========    ===========

Supplemental disclosure of cash flow information:
Cash paid during the period for:
      Income taxes                                          $      --      $      --             --
                                                            ===========    ===========    ===========
      Interest                                              $      --      $      --            3,036
                                                            ===========    ===========    ===========


                                        7



                                  CytoDyn, Inc.
                          (A Development Stage Company)
                      Consolidated Statements of Cash Flows
                                   (Unaudited)



                                                                                          October 28,
                                                                   6 months ended             2003
                                                            --------------------------      through
                                                             11/30/2008     11/30/2007     11/30/2008
                                                            -----------    -----------    -----------
Non-cash investing and financing transactions:
Net assets acquired in exchange for common stock in
 CytoDyn/Rexray business combination                               --             --            7,542
                                                            ===========    ===========    ===========
Common stock issued to former officer to repay
 working capital advance                                           --             --            5,000
                                                            ===========    ===========    ===========
Common stock issued for convertible debt                           --             --          662,000
                                                            ===========    ===========    ===========
Common stock issued for debt                                       --             --          120,082
                                                            ===========    ===========    ===========
Common stock issued on payment of accounts payable               49,000           --           49,000
                                                            ===========    ===========    ===========
Options to purchase common stock issued for debt                   --             --           62,341
                                                            ===========    ===========    ===========
Original issue discount and intrinsic value of beneficial
conversion feature related to debt issued with warrants            --           23,662        680,662
                                                            ===========    ===========    ===========






See accompanying notes to condensed consolidated financial statements


                                        8



                                  CYTODYN, INC.
                          (A DEVELOPMENT STAGE COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF November 30, 2008
                                   (UNAUDITED)


1 - Organization:

CytoDyn, Inc. (the "Company") was incorporated under the laws of Colorado on May
2, 2002 under the name Rexray Corporation ("Rexray"). In October 2003 we entered
into an Acquisition Agreement with CytoDyn of New Mexico, Inc., pursuant to
which we effected a one for two reverse split of our common stock, and amended
our articles of incorporation to change our name from Rexray Corporation to
CytoDyn, Inc. The acquisition was a accounted for as a reverse merger and
recapitalization of the Company. Pursuant to the acquisition agreement, we were
assigned the patent license agreement dated July 1, 1994 between CytoDyn of New
Mexico and Allen D. Allen covering three United States patents along with
foreign counterpart patents which describe a method for treating HIV disease
with the use of monoclonal antibodies. We also acquired the trademarks, CytoDyn
and Cytolin, and a related trademark symbol. The license acquired gives us the
worldwide, exclusive right to develop, market, sell and profit from the HIV
therapies from the patents, technology and know-how invented by Mr. Allen. The
term of the license agreement is for the life of the patents. The original
expiration dates on the issued patents are 2013 to 2016. There is an automatic
extension of the expiration date on U.S. patents equal to the number of years
the drug under the patent is being studied in clinical trials. Typically this
provides another four to five years on the earliest claims. CytoDyn's counsel
expects its patents to be extended until 2017 to 2020 depending upon the
original date of the issued patents. As consideration for the intellectual
property and trademarks we paid CytoDyn of New Mexico $10,000 in cash and issued
5,362,640 post-split shares of common stock to CytoDyn of New Mexico.

The Company entered the development stage effective October 28, 2003 upon the
reverse merger and recapitalization of the Company and follows Financial
Standard Accounting Codification No. 915, Development Stage Entities.

CytoDyn, Inc. discovered and is developing a class of therapeutic monoclonal
antibodies to address significant unmet medical needs in the areas of HIV and
AIDS.





                                        9


                                  CYTODYN, INC.
                          (A DEVELOPMENT STAGE COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF November 30, 2008
                                   (UNAUDITED)


2 - Summary of Significant Accounting Policies:

Basis of Presentation
The accompanying consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America (U.S. GAAP) and reflect all adjustments, consisting solely of normal
recurring adjustments, needed to fairly present the financial results for these
periods. The condensed consolidated financial statements and notes are presented
as permitted by Form 10-Q. Accordingly, certain information and note disclosures
normally included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been omitted.
The accompanying consolidated financial statements should be read in conjunction
with the financial statements for the years ended May 31, 2008 and 2007 and
notes thereto in the Company's annual report on Form 10-K for the year ended May
31, 2008, filed with the Securities and Exchange Commission on March 12, 2010.
Operating results for the three and six months ended November 30, 2008 and 2007
are not necessarily indicative of the results that may be expected for the
entire year. In the opinion of management, all adjustments consisting only of
normal recurring adjustments necessary for a fair statement of (a) the results
of operations for the three and six month periods ended November 30, 2008 and
2007 and the period October 28, 2003 through November 30, 2008, (b) the
financial position at November 30, 2008, and (c) cash flows for the six month
periods ended November 30, 2008 and 2007 and the period October 28, 2003 through
November 30, 2008, have been made.

Principles of Consolidation
The consolidated financials statements include the accounts of CytoDyn, Inc. and
its wholly owned subsidiaries; AITI and AIGI All intercompany transactions and
balances are eliminated in consolidation.

Going Concern
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. As shown in the accompanying
consolidated financial statements, the Company is currently in the development
stage with losses for all periods presented. As of June 3, 2010 these factors,
among others, raise substantial doubt about the Company's ability to continue as
a going concern.

The consolidated financial statements do not include any adjustments relating to
the recoverability of assets and classification of liabilities that might be
necessary should the Company be unable to continue as a going concern. The
Company's continuation as a going concern is dependent upon its ability to
obtain additional operating capital,



                                       10



                                  CYTODYN, INC.
                          (A DEVELOPMENT STAGE COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF November 30, 2008
                                   (UNAUDITED)


complete development of its medical treatment, obtain FDA approval, outsource
manufacturing of the treatment, and ultimately to attain profitability. The
Company intends to seek additional funding through equity offerings to fund its
business plan. There is no assurance that the Company will be successful in
these endeavors.

Use of Estimates
The preparation of the consolidated financial statements in accordance with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of consolidated financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.

Cash and Cash Equivalents
The Company considers all highly liquid debt instruments with original
maturities of three months or less when acquired to be cash equivalents. The
Company had no cash equivalents as of November 30, 2008 or May 31, 2008. The
Company maintains its cash in bank deposit accounts, which at times, may exceed
federally insured limits. The Company has not experienced any losses in such
accounts.

Furniture, Equipment and Depreciation
Furniture and equipment are stated at cost. Depreciation is computed using the
straight-line method over the estimated useful lives of the related assets,
generally three to seven years. Maintenance and repairs are charged to expense
as incurred and major improvements or betterments are capitalized. Gains or
losses on sales or retirements are included in the consolidated statements of
operations in the year of disposition.

Impairment of Long-Lived Assets
The Company evaluates the carrying value of any long-lived assets under U.S.
GAAP, which requires impairment losses to be recorded on long-lived assets used
in operations when indicators of impairment are present and the undiscounted
future cash flows estimated to be generated by those assets are less than the
assets' carrying amount. If such assets are impaired, the impairment to be
recognized is measured by the amount by which the carrying amount of the assets
exceeds the fair value of the assets. Assets to be disposed of are reported at
the lower of the carrying value or fair value, less costs to sell. There were no
impairment charges for the three and six months ended November 30, 2008 and
2007, and for the period October 28, 2003 through November 30, 2008.

Research and Development
Research and development costs are expensed as incurred.



                                       11



                                  CYTODYN, INC.
                          (A DEVELOPMENT STAGE COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF November 30, 2008
                                   (UNAUDITED)


Financial Instruments
At November 30, 2008 and May 31, 2008, the carrying value of the Company's
financial instruments approximate fair value due to the short-term maturity of
the instruments. The Company's notes payable have market rates of interest, and
accordingly, the carrying values of the notes approximates the fair value.

Stock-Based Compensation
U.S GAAP requires companies to measure the cost of employee services received in
exchange for the award of equity instruments based on the fair value of the
award at the date of grant. The expense is to be recognized over the period
during which an employee is required to provide services in exchange for the
award (requisite service period). U.S. GAAP provides for two transition methods.
The "modified prospective" method requires that share-based compensation expense
be recorded for any employee options granted after the adoption date and for the
unvested portion of any employee options outstanding as of the adoption date.
The "modified retrospective" method requires that, beginning upon adoption, all
prior periods presented be restated to reflect the impact of share-based
compensation expense consistent with the pro forma disclosures previously
required under U.S. GAAP. The Company adopted the modified prospective method,
and as a result, was not required to restate its financial results for prior
periods. The Company accounts for common stock options, and common stock
warrants granted based on the fair market value of the instrument using the
Black-Scholes option pricing model utilizing certain weighted average
assumptions such as expected stock price volatility, term of the options and
warrants, risk-free interest rates, and expected dividend yield at the grant
date. The risk-free interest rate assumption is based upon observed interest
rates appropriate for the expected term of the stock options. The expected
volatility is based on the historical volatility of the Company's common stock
at consistent intervals. The Company has not paid any dividends on its common
stock since its inception and does not anticipate paying dividends on its common
stock in the foreseeable future. The computation of the expected option term is
based on the "simplified method" as the Company's stock options are "plain
vanilla" options and the Company has a limited history of exercise data. For
common stock options and warrants with graded vesting, the Company recognizes
the related compensation costs associated with these options and warrants on the
straight-line basis over the requisite service period.

U.S GAAP requires forfeitures to be estimated at the time of grant and revised,
if necessary, in subsequent periods if actual forfeitures differ from those
estimates. Based on limited historical experience of forfeitures, the Company
estimated future unvested option forfeitures at 0% as of November 30, 2008 and
2007.



                                       12



                                  CYTODYN, INC.
                          (A DEVELOPMENT STAGE COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF November 30, 2008
                                   (UNAUDITED)


Stock for Services
The Company issues common stock and common stock options to consultants for
various services. Costs for these transactions are measured at the fair value of
the consideration received or the fair value of the equity instruments issued,
whichever is more reliably measurable. The value of the common stock is measured
at the earlier of (i) the date at which a firm commitment for performance by the
counterparty to earn the equity instruments is reached or (ii) the date at which
the counterparty's performance is complete.

Earnings (Loss) per Common Share
Basic earnings (loss) per share is computed by dividing the net income or loss
by the weighted average number of common shares outstanding during the period.
Diluted earnings (loss) per share is computed by dividing net income (loss) by
the weighted average common shares and potentially dilutive common share
equivalents. The effects of potential common stock equivalents are not included
in computations when their effect is antidilutive. Because of the net loss for
the three and six month periods ended November 30, 2008 and 2007, the basic and
diluted weighted average shares outstanding are the same since including the
additional shares would have an antidilutive effect on the loss per share
calculation. Common stock option and warrants to purchase 3,326,222 and
2,906,222 shares of common stock were not included in the computation of basic
and diluted weighted average common shares outstanding for the three and six
months ended November 30, 2008 and 2007, respectively. Additionally, in July
2009, 100,000 shares of convertible preferred shares converted into 2,356,142
shares of common stock (see note 10).

Reclassification
Certain prior period amounts have been reclassified to comply with current
period presentation.

3 - Recent Accounting Pronouncements:

In June 2009, the FASB issued ASC 105 Accounting Standards Codification TM and
the Hierarchy of Generally Accepted Accounting Principles. The FASB Accounting
Standards Codification TM (the "Codification") has become the source of
authoritative accounting principles recognized by the FASB to be applied by
nongovernmental entities in the preparation of financial statements in
accordance with Generally Accepted Accounting Principles ("GAAP"). All existing
accounting standard documents are superseded by the Codification and any
accounting literature not included in the Codification will not be
authoritative. Rules and interpretive releases of the SEC issued


                                       13


                                  CYTODYN, INC.
                          (A DEVELOPMENT STAGE COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF November 30, 2008
                                   (UNAUDITED)


under the authority of federal securities laws, however, will continue to be the
source of authoritative generally accepted accounting principles for SEC
registrants. Effective September 30, 2009, all references made to GAAP in our
consolidated financial statements will include references to the new
Codification. The Codification does not change or alter existing GAAP and,
therefore, will not have an impact on our financial position, results of
operations, or cash flows.

In June 2009, the FASB issued changes to the consolidation guidance applicable
to a variable interest entity (VIE). FASB ASC Topic 810, "Consolidation," amends
the guidance governing the determination of whether an enterprise is the primary
beneficiary of a VIE and is, therefore, required to consolidate an entity by
requiring a qualitative analysis rather than a quantitative analysis. The
qualitative analysis will include, among other things, consideration of who has
the power to direct the activities of the entity that most significantly impact
the entity's economic performance and who has the obligation to absorb losses or
the right to receive benefits of the VIE that could potentially be significant
to the VIE. This standard also requires continuous reassessments of whether an
enterprise is the primary beneficiary of a VIE. FASB ASC 810 also requires
enhanced disclosures about an enterprises' involvement with a VIE. Topic 810 is
effective as of the beginning of interim and annual reporting periods that begin
after November 15, 2009. This will not have an impact on the Company's financial
position, results of operations, or cash flows.

In June 2009, the FASB issued Financial Accounting Standards Codification No.
860, "Transfers and Servicing." FASB ASC No. 860 improves the relevance,
representational faithfulness, and comparability of the information that a
reporting entity provides in its financial statements about a transfer of
financial assets; the effects of a transfer on its financial position, financial
performance, and cash flows; and a transferor's continuing involvement, if any,
in transferred financial assets. FASB ASC No. 860 is effective as of the
beginning of each reporting entity's first annual reporting period that begins
after November 15, 2009, for interim periods within the first annual reporting
period, and for the interim and annual reporting periods thereafter. The Company
is evaluating the impact the adoption of FASB ASC No. 860 will have on its
financial statements.

Other recent accounting pronouncements issued by the FASB (including its EITF),
the AICPA, and the SEC did not or are not believed by management to have a
material impact on the Company's present or future consolidated financial
statements.

4 - Acquisitions:

On July 18, 2006, CytoDyn, Inc. entered into an acquisition agreement with UTEK
Corporation to purchase all 1,000 issued and outstanding shares of Advanced
Influenza Technologies, Inc. (AITI), a Florida Corporation, in exchange for
2,000,000 unregistered restricted common shares of CytoDyn, Inc. stock.


                                       14


                                  CYTODYN, INC.
                          (A DEVELOPMENT STAGE COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF November 30, 2008
                                   (UNAUDITED)


The transaction was accounted for as an asset purchase and not an acquisition of
a business as AITI had no employees, operations, or customers, and was
essentially a shell corporation that was incorporated to consummate the
purchase. Pursuant to the agreement, the Company acquired $512,200 in cash and a
prepaid sponsored research project of $162,800 from the University of
Massachusetts to further the technology associated with certain acquired
licenses. The $162,800 is being amortized into research and development expense
as the services are provided. The Company valued the assets acquired based on
the consideration received rather than the fair market value of the shares
issued as the Company believes this was more indicative of the value of the
assets acquired. In addition to the cash and the prepaid sponsored research
project, the Company acquired the worldwide nonexclusive and exclusive license
agreements from the University of Massachusetts for certain technologies. The
license agreements were recorded as research and development expense as the
patent rights or license agreements are being used in a particular research
project and have no alternative future use outside of this project. The license
agreement grants the Company the exclusive right to develop and commercialize
the licensed products associated with certain existing patents.

Milestone fees are payable to the University per licensed product and due within
30 days of the event of certain occurrences required.

The University shall also receive 4.0% royalties on net sales of the licensed
products.

AITI agreed to fund a two-year ($325,600) unrestricted project ($162,800 per
year) under the Sponsored Research Agreement, with the primary objective during
the first year to conduct lab work to provide well documented research studies.
If after one year the desired outcome is not achieved, the agreement can be
cancelled and the second year's payment is not required. The Company did not
make the second payment and, consequently, the Company has no right to the above
license agreement. Additionally, the milestone fee payable and royalties
discussed above are no longer in force.

On January 30, 2007, CytoDyn, Inc. entered into an acquisition agreement with
UTEK Corporation, to acquire 100% of the outstanding stock of Advanced Genetic
Technologies, Inc. (AGTI), a Florida Corporation, in exchange for 100,000
preferred no par value stock convertible into $1,300,000 worth of common
unregistered restricted


                                       15


                                  CYTODYN, INC.
                          (A DEVELOPMENT STAGE COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF November 30, 2008
                                   (UNAUDITED)


shares of CytoDyn, Inc. stock. The option to convert is any time after twelve
(12) months and before thirty six (36) months from the date of closing of the
agreement. The conversion option has a floor price of $.30 per share, which
limits the maximum number of shares that the Company may issue upon conversion
to 4,333,333 shares of common stock (see Note 10). There was no derivative
liability or beneficial conversion feature associated with the conversion
option.

AGTI holds the worldwide exclusive and nonexclusive license agreements from the
CBR Institute for Biomedical Research affiliated with Harvard Medical School for
certain biological materials.

The term of the licensing agreement is until the later of 20 years or the date
the last patent expires that is owned or controlled by the Licensee.

Milestone fees are payable to the University per licensed product and due within
30 days of the event of certain occurrences required.

The University shall also receive 2.0% royalties of net sales of the licensed
products up to $200 million and 3.0% royalties of net sales in excess of $200
million. In the case of a sublicense, the University would get 25% of
non-royalty sublicense income.

The transaction was accounted for as an asset purchase and not an acquisition of
a business as AGTI had no employees, operations, or customers, and was
essentially a shell corporation that was incorporated to consummate the
purchase. Pursuant to the agreement, the Company acquired $100,000 in cash and
seven years of prepaid license fees to the Center for Biological Research at
Harvard Medical School. $52,500 was recorded as prepaid license fees and $15,000
was expensed as research and development. The Company valued the assets acquired
based on the consideration received rather than the fair market value of the
shares issued as the Company believes this was more indicative of the value of
the assets acquired. In addition to the cash and the prepaid license fees, the
Company acquired the worldwide nonexclusive and exclusive license agreements
from the Center for Biological Research at Harvard Medical School for certain
biological materials. The license agreement grants the Company the exclusive
right to develop and commercialize the licensed products associated with certain
biological materials.


                                       16


                                  CYTODYN, INC.
                          (A DEVELOPMENT STAGE COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF November 30, 2008
                                   (UNAUDITED)


5 - Convertible Notes:

During the year ended May 31, 2007, the Company issued convertible notes with
74,000 detachable common stock warrants to purchase common stock in exchange for
proceeds of $92,500. The notes bear interest at 5.0% per annum. Principal and
accrued interest are payable in any combination of cash and common stock at the
option of the Company. The Company can repay principal and accrued interest with
common stock at the conversion price of $1.25. As of November 30, 2008, $77,500
of the $92,500 in convertible notes were converted into common stock. The
warrants to purchase common stock which accompanied the convertible promissory
notes are exercisable at $2.50 per share, vest immediately, and expire in
October 2010. Additionally, the Company recorded an original issue discount
based on the fair value of the warrants. To recognize the original issue
discount, the Company discounted the notes and increased additional paid-in
capital by $92,500. The Company did not record the intrinsic value for
conversion into the Company's common stock, as the discount was limited to the
debt proceeds of $92,500, which was fully discounted by the fair value of the
warrants. The discount was amortized over the life of the debt. During the three
and six month periods ended November 30, 2008 and 2007, the Company amortized
approximately $0 and $615 of this discount, respectively, which is included as a
component of interest expense. From October 28, 2003 to November 30, 2008, the
Company amortized $92,500 of discounts related to convertible notes payable.


                                       17


                                  CYTODYN, INC.
                          (A DEVELOPMENT STAGE COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF November 30, 2008
                                   (UNAUDITED)


During the year ended May 31, 2008, the Company issued a convertible promissory
note with 9,000 detachable warrants to purchase common stock at an exercise
price of $.30 in exchange for proceeds totaling $9,000. The note bears interest
at 14.0%. The warrants to purchase common stock vest immediately and expire in
2011. The Company valued the warrants utilizing the Black-Scholes option
valuation model, and the resulting fair value was recorded as a debt discount of
$3,662.

6 - Promissory Notes:

During the year ended May 31, 2007, the Company issued $125,000 in unsecured
promissory notes to third parties. The principal and interest on the notes were
originally due in six months and pay interest at 14.0% per annum. During the
year ended May 31, 2008, the Company issued an additional $20,000 in promissory
notes to third parties. The balance of the promissory notes was $138,000 as of
November 30, 2008. The notes were all due in six months and pay interest of
14.0% per annum. The parties have agreed to extend the due date in six months
increments while continuing to accrue interest. Additionally, subsequent to
November 30, 2008, the notes were amended to become convertible into common
stock (see Note 10). As a result of the extension of terms, and the conversion
of some of the promissory notes to common stock, the Company has classified all
of the notes as long-term as of November 30, 2008.

7 - Equity:

The Company has one stock-based equity plan at November 30, 2008. The 2005 Stock
Incentive Plan as amended (the "Plan") was authorized to issue options and
warrants to purchase up to 2,800,000 shares of the Company's common stock. As of
November 30, 2008 the company had 448,878 shares available for future stock
option grants under the plan.

The estimated fair value of options and warrants is determined using the
Black-Scholes option valuation model with the following weighted-average
assumption for the periods ended November 30, 2008 and 2007:

                                           2008                  2007
                                   -------------------    -------------------
     Risk free rate                   2.56% - 2.84%             3.00%
     Dividend Yield                        0.00                  0.00
     Volatility                     124.00% - 156.00%           71.00%
     Expected term                      3.00 years            5.50 years




                                       18



                                  CYTODYN, INC.
                          (A DEVELOPMENT STAGE COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              AS OF AUGUST 31, 2008
                                   (UNAUDITED)


Net cash proceeds from the exercise of stock options and warrants were $0 for
the six months ending November 30, 2008 and 2007, respectively. Compensation
expense related to stock options and warrants was approximately $85,000, and
$128,000 for the three months ended November 30, 2008 and 2007, respectively,
and $205,000 and $251,000 for the six months ended November 30, 2008 and 2007,
respectively. During the six months ended November 30, 2008 the company granted
205,000 options to employees and directors, which were valued and recorded as
compensation expense.

The grant date fair value of options vested during the six month period ended
November 30, 2008 and 2007 was approximately $201,000 and $225,000,
respectively. The weighted average grant date fair value of options and warrants
granted during the six month period ended November 30, 2008 and 2007 was $.30
and $.42, respectively. As of November 30, 2008 there was approximately $468,000
of unrecognized compensation costs related to share-based payments for unvested
options, which is expected to be recognized over a weighted average period of
1.65 years.

The following table represents stock option and warrant activity as of and for
the six months ended November 30, 2008:

                                                           Weighted
                                              Weighted     Average
                                               Average    Remaining    Aggregate
                                  Number of   Exercise   Contractual   Intrinsic
                                    Shares      Price       Life         Value
                                  ---------   --------   -----------   ---------
Options and warrants
  outstanding - May 31, 2008      3,227,222     $1.30       6.52       $ 143,000
Granted                             205,000     $0.34
Exercised                                 0
Forfeited/expired/cancelled        (106,000)    $.30
Options and warrants
  outstanding - November 30, 2008 3,326,222     $1.27       6.28       $  93,260

Outstanding exercisable
     - November 30, 2008          2,867,817     $1.32       6.09       $  77,211


During the year ended May 31, 2006, the Company issued 142,857 restricted shares
to a public relations company in accordance with an agreement to perform
services over the following year. The Company valued the shares at the market
price of the Company's common stock on the date the agreement was executed in
the amount of $250,000. On July 16, 2007, the Company cancelled the 142,857
shares of restricted common stock for non-performance. The expense associated
with the original issuance had previously been amortized as compensation expense
over the requisite life of the agreement. In conjunction with the cancellation,
the Company reduced compensation expense by $100,000 at the date of cancellation
for non-performance under the contract, which represented the fair market value
of the common stock on the date of cancellation.




                                       19



                                  CYTODYN, INC.
                          (A DEVELOPMENT STAGE COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF November 30, 2008
                                   (UNAUDITED)


During the year ended May 31, 2007, the Company issued 40,000 restricted common
shares to a consulting company in accordance with an agreement to perform
services over the following year. The Company valued the shares at the market
price of the Company's common stock on the date the agreement was executed in
the amount of $120,000. For the three and six-month periods ended November 30,
2007, the Company recognized approximately $30,000 and $60,000 of compensation
expense related to this agreement. There was no compensation expense recognized
in the corresponding 2008 periods.

During the six month period ended November 30, 2008, the Company issued 334,000
restricted shares of common stock for past consulting services. The Company
recorded $167,000 in consulting expense during the six month period ended
November 30, 2008 related to this transaction. The Company valued the shares
issued based on third-party sales of common stock issued during the same period,
as the Company believes this is the more readily determinable value for the
transaction.

8 - Commitments and Contingencies:

In 2001, the Company sued its previous licensee, Amerimmune Pharmaceuticals,
Inc. ("API") and its directors. The Company was ordered by the court to pay
$150,000 in attorney fees to the insurance company of API and recorded a
contingent liability for the amount. The Company appealed the Court's decision
and, in December 2007, the Court's decision was reversed based on the appeal.
Based on these facts and circumstances, the Company reversed the contingent
Liability during 2007.

Related to certain litigation whereby the Company was both a defendant and a
plaintiff, the Company entered into a settlement agreement in December 2008. As
part of the settlement agreement, the Company agreed to pay $50,000 in January
2009 and $25,000 on or before January 14, 2010 to the plaintiff. The Company
paid the $50,000 in January 2009. The remaining $25,000 was unsecured and
accrued interest at 10.0 percent per annum. The Company paid $27,500 in January
2010. As of November 30, 2008, the Company has accrued $75,000 related to this
settlement Agreement.

9 - Related Party Transactions:

As of November 30, 2008, the Company owed an officer promissory notes totaling
of $9,971. The notes are due on demand and carry no interest rate. Management
plans to repay the notes through cash payments, issuance of the Company's common
stock, or a combination thereof. The balance due is included in the accompanying
consolidated financial statements as "indebtedness to related parties" and is
treated as long-term as the amounts were not paid by November 30, 2010.



                                       20



                                  CYTODYN, INC.
                          (A DEVELOPMENT STAGE COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF November 30, 2008
                                   (UNAUDITED)


A director provided legal services to the Company over the past several years.
As of November 30, 2008, the Company owed the director $40,985 and it is
included in the accompanying consolidated financial statements as "indebtedness
to related parties" as of November 30, 2008. As of November 30, 2008, no
arrangements had been made for the Company to repay the balance of this
obligation. The Company anticipates that the director will continue to provide
legal services in the future. Since this has not been paid as of June 3, 2010,
it is treated as long-term in the accompanying financial statements.

A former director of the Company is owed $337,341 related to certain clinical
research data that was obtained by the former director and later purchased by
the Company. As of November 30, 2008, the liability has no payment terms and no
stated interest rate, and is included in the accompanying consolidated financial
statements as "indebtedness to related parties." Since this has not been paid as
of June 3, 2010, it is treated as long-term in the accompanying financial
statements.

In May and July 2007, the Company issued $150,000 in promissory notes with a
stated interest rate of 14%, and a maturity date of six months from the issuance
date. The notes were originally issued to an unrelated third, who subsequently
became director of the company during 2008. Accordingly, the notes are
classified as related party notes as of November 30, 2008, and have been
designated as long-term as the notes have been extended multiple times and have
no stated maturity date and has not been repaid as of June 3, 2010.

10 - Subsequent Events:

In April 2008, the Company's Board of Directors approved a Private Placement
Memorandum to sell up to 6 million shares of common stock, no par value, a
company offering. This offering was only available to accredited investors as
defined under the 1933 Securities Act ("The Act"). The offering commenced on or
about May 1, 2008 and ended June 15, 2009, the Company has sold 3,876,508
restricted common shares and 1,938,254 warrants for proceeds totaling
approximately $2,000,000. These securities were sold pursuant to an exemption
from registration under Regulation D under The Act and will not be registered
with the Securities and Exchange Commission. The warrants have an exercise price
of $1.00 per share, immediate vesting rights, and expire in April 2013.




                                       21


                                   CYTODYN, INC.
                          (A DEVELOPMENT STAGE COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF November 30, 2008
                                   (UNAUDITED)


In July 2009, the Company amended certain promissory note agreements relating to
unsecured related party promissory notes. The original terms had no conversion
feature, a stated interest rate of 14% per annum, and had an original maturity
of six months. Related to this amendment, the holders of the promissory notes
were given the right to convert the face amount of the notes and accrued
interest into shares of common stock at a fixed conversion price of $0.45 per
share. At the commitment date, the date the notes were amended, the Company
incurred a beneficial conversion feature of $50,000. The amendment to the
unsecured promissory notes, limited the amount of promissory notes and accrued
interest that could be converted to $225,000, effectively capping the number of
common shares that could be converted to 500,000. As of the date of this filing,
$146,456 of promissory notes converted into 325,459 shares of common stock.

In September 2009, the Company entered into an agreement with University of
Massachusetts General Hospital to provide financial support for the purpose of
conducting an ex-vivo study of the Company's lead drug, Cytolin. This study is
intended as a prelude to an in-vivo stuffy. Costs are estimated at approximately
$550,000 of which 50%, or $275,000, was paid to Massachusetts General Hospital
by March 2010. Subsequent to November 30, 2008, the Company agreed to provide an
additional $204,000 to Massachusetts General Hospital for the current clinical
trial of Cytolin(R). This is amount in included in the cost above. This will
enable the Principal Investigator to hire additional personnel in order to
ensure that key data from the study will be available by December 31, 2010.

In June 2009, the Company received a request from a shareholder to convert
100,000 preferred shares into 2,356,142 restricted common shares pursuant to an
Agreement dated January 2007. The common shares were to be converted at the
average price per share over the last 10 days of trading prior to the conversion
date which calculated to $.62 per share. The Agreement contained a floor price
of $.30 per share, which effectively limited the maximum number of the common
shares issued to an amount that was less than the Company's remaining authorized
shares. These shares have not been registered with the SEC and are subject to
the restrictions under Rule 144 of the Securities Act.

In February 2010, the Company negotiated a contract with Vista Biologicals
Corporation to manufacture a humanized version of the company's lead product,
Cytolin(R) at a cost of $229,500, which will be paid over twelve (12) months
beginning in March 2010.


                                       22


                                  CYTODYN, INC.
                          (A DEVELOPMENT STAGE COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              AS OF AUGUST 31, 2008
                                   (UNAUDITED)


In September 2009, the Company's Board of Directors approved a Private Placement
to sell up to 400,000 shares of the Company's Series B Convertible Preferred
Stock, no par value. This offering was only available to accredited investors as
defined under the 1933 Securities Act ("The Act"). The offering commenced on or
about September 23, 2009 and was completed on March 29, 2010. All 400,000 shares
were sold and the gross proceeds from the sale were $2,000,000. Each share of
Series B Convertible Preferred Stock will receive a 5% annual dividend and is
convertible into ten (10) shares of Common Stock.

In January 2010, the Company granted 2,155,000 stock options to employees and
consultants. The options have an exercise price of $1.95 per share, expire ten
years from grant, and vest between zero and three years. The approximate fair
value of the options was $3,225,000 at January 11, 2010 grant date. The fair
value of these options will be recognized over the three year requisite service
period.

In October 2009, the Company's Board of Directors approved a
Private Placement to Sell up to 2,000,000 shares of the Company's common stock,
no par value, at a price of $.50 per share. The offering commenced on or about
November 2009 and was completed on March 29, 2010. All 2,000,000 shares were
sold for proceeds totaling $1,000,000.

In April 2010, the Board issued 200,000 warrants to purchase the Company's
common stock to Eware and Evolution Holdings, LLC with an exercise price of
$2.00 per share. The warrants expire September 12, 2010.

In April 2010, the Board authorized the conversion of promissory notes totaling
$9,000 into common stock at $.45 per share.

On April 24, 2010 the Company's shareholders approved an amendment to the
Company's Articles of Incorporation increasing the number of authorized shares
of common stock from 25,000,000 to 100,000,000 shares effective as of April 29,
2010.

In December 2009, and May 2010, the Company repurchased 500,000 and 200,000
shares of common stock at $.32 and $.50 per share, respectively.


                                       23



Item 2.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations.

The following discussion and analysis should be read in conjunction with our
condensed consolidated financial statements and the related notes thereto
included in this Quarterly Report on Form 10-Q. The discussion and analysis
contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended (Exchange Act). These forward-looking statements are
based on our current expectations and entail various risks and uncertainties.
Our actual results could differ materially from those projected in the
forward-looking statements as a result of various factors including those set
forth in "Risk Factors" of the Company's May 31,2008 Form 10-K.

Plan of Operations

CytoDyn, Inc. discovered and is developing a class of therapeutic monoclonal
antibodies to address significant unmet medical needs in the area of HIV/AIDS.
CytoDyn, Inc. has sponsored a research grant to Massachusetts General Hospital
in Boston, Massachusetts, to design and sponsor clinical trials in addition to
conducting those trials on our lead product Cytolin(R), an immune therapy
intended to treat early HIV infection. Although CytoDyn, Inc. will retain all of
its intellectual property rights and will have access to the study data, the
data will be owned by Massachusetts General Hospital (MGH). A chief benefit for
CytoDyn, Inc. is that the Company will benefit from MGH experience in dealing
with the FDA. Moreover, the high costs and long delays associated with the FDA's
oversight of clinical trials may be significantly reduced in the case of
clinical trials designed and sponsored by a leading teaching hospital.

The FDA licenses medicinal products for sale in interstate commerce under a
particular label. Only if they receive data supporting that label and only if
some company asks them to do so. CytoDyn may or may not be the company that
requests a license to market Cytolin(R) under a label. Under our current
thinking we hope to enter into a strategic alliance after the next two studies
under which a larger pharmaceutical marketing company will seek a license from
the FDA to market Cytolin(R) and under a license from us to use our intellectual
property in that manner. However there is no guarantee that we will wind up
pursuing this strategy.


Projected costs to complete our research and development as a pre-requisite for
-------------------------------------------------------------------------------
co-development and/or out-licensing.
------------------------------------

We negotiated a contract with manufacturer Vista Biologicals Corporation to
manufacture a humanized version of the company's lead product, Cytolin(R) at a
cost of $229,500, which will be paid over twelve (12) months beginning in March
2010. Although a murine (mouse) version of Cytolin(R) was used for previous
human experience that included some 200 patients successfully treated for up to
two years, as well as an encouraging Phase I(b)/II(a) study, the Company
believes that a fully-humanized version is necessary for the clinical trial that
is expected to follow the current one.

The Company expects to have its proprietary, fully-humanized version of
Cytolin(R) ready for bulk manufacturing in Autumn 2010 in time for a possible
follow-up clinical trial.

The initial clinical trial to be conducted by Massachusetts General Hospital
will cost the Company approximately $550,000 of which $$275,000 was paid by
March 18, 2010. In March 2010, the Company agreed to provide an additional
$204,000 for the current clinical trial of Cytolin(R) which is included in the
cost above. This will enable the Principal Investigator to hire additional
personnel in order to ensure that key data from the study will be available by
December 31, 2010.


                                       24



Subsequently, CytoDyn, Inc. may fund a follow-up clinical trial at Massachusetts
General Hospital. We cannot estimate what the hospital's research grant will be
until the hospital has provided those estimates.


Timing and anticipated completion dates for research and development.
---------------------------------------------------------------------
We estimate that the initial clinical trial to be conducted by Massachusetts
General Hospital will take one year to complete. The study enrollment began
January 13, 2010. We cannot estimate when enrollment will be completed. In March
2010, the Company agreed to provide an additional $204,000 for the current
clinical trial of Cytolin(R). This will enable the Principal Investigator to
hire additional personnel in order to ensure that key data from the study will
be available by December 31, 2010.

There are many factors that can delay clinical trial benchmarks. However, the
Company hopes to receive the results and analysis of the upcoming clinical trial
during 2010.

Clinical Trials Process - Described below is the traditional drug development
track. Under the Company's current business plan, much of this initial work will
be sponsored and conducted by the MGH, eliminating the need for CytoDyn to deal
directly with the FDA. Traditionally, the Company would enter into a strategic
alliance with a larger pharmaceutical company after development has progressed
to a certain point. While there can be no guarantee that this will occur in our
case, if it does, then our larger partner would usually be responsible for
dealing with the FDA.

Phase I
Phase I includes the initial introduction of an investigational new drug or
biologic into humans. These studies are closely monitored and may be conducted
in patients, but are usually conducted in a small number of healthy volunteer
subjects. These studies are designed to determine the metabolic and
pharmacologic actions of the investigational product in humans, the side effects
associated with increasing doses, and, if possible, to gain early evidence on
effectiveness. During Phase I, sufficient information about the investigational
product's pharmacokinetics and pharmacological effects are obtained to permit
the design of well-controlled, scientifically valid, Phase II studies.

Phase II
Phase II includes the early controlled clinical studies conducted to obtain some
preliminary data on the effectiveness of the drug for a particular indication or
indications in patients with the disease or condition. This phase of testing
also helps determine the common short-term side effects and risks associated
with the drug. Phase II studies are typically well-controlled, closely
monitored, and conducted in a relatively small number of patients, usually
involving several hundred people. Depending upon need, a new drug may be
licensed for interstate marketing after Phase II if it is a "pivotal" study.


                                       25


Phase III
Phase III studies are expanded controlled clinical studies. They are performed
after preliminary evidence suggesting effectiveness of the drug has been
obtained in Phase II, and are intended to gather the additional information
about effectiveness and safety that is needed to evaluate the overall
benefit/risk relationship of the drug. Phase III studies also provide an
adequate basis for extrapolating the results to the general population and
transmitting that information in the physician labeling. Phase III studies
usually include several hundred to several thousand people.


Patents
We have a License Agreement with Allen D. Allen, our president that gives us the
exclusive right to develop, sell and profit from his technology worldwide. This
includes issued U.S. patents 5,424,066; 5,651,970 and 6,534,057, foreign
counterparts, as well as European Patents No. 94 912826.8 and 04101437.4. Hong
Kong, Australian and Canadian patents have been obtained as well. The original
expiration dates of the U.S. patents are 2013 to 2016. For U.S. method patents
applicable to drugs approved in the U.S., the Company is entitled to a term
extension of the expiration date equal to the number of years the patent was
studied in clinical trials. Typically this provides another four to five years
on the earliest claims. CytoDyn's counsel expects its patents to be extended
until 2017 to 2020 depending upon the original date of the issued patents. We
estimate the costs associated with these issued patents to be approximately
$100,000 per year. The Company expects to have its proprietary, fully-humanized
version of Cytolin(R) ready for bulk manufacturing Autumn 2010 in time for the
follow-up clinical trial. Based on the advice of its patent attorneys, the
Company believes its fully-humanized product and a related chimeric product will
be eligible for a new patent to complement and extend its existing portfolio of
intellectual property, which includes patents on the use of certain antibodies
to treat HIV/AIDS. We cannot estimate the costs of pursuing a new patent as of
the date of this filing.


Going Concern

We will require additional funding in order to continue with research and
development efforts.

The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. As shown in the accompanying
financial statements, the Company is currently in the development stage with
losses for all periods presented. As of June 3, 2010 these factors, among
others, raise substantial doubt about the Company's ability to continue as a
going concern.

The financial statements do not include any adjustments relating to the
recoverability and classification of liabilities that might be necessary should
the Company be unable to continue as a going concern. The Company's continuation
as a going concern is dependent upon its ability to obtain additional operating
capital, complete development of its medical treatments, obtain FDA approval,
outsource manufacturing of the treatments, and ultimately to attain
profitability. The Company intends to seek additional funding through equity
offerings or licensing agreements to fund its business plan. There is no
assurance that the Company will be successful in these endeavors.


                                       26



Results of Operations
---------------------

Results of Operations for the three months ended November 30, 2008 and 2007 are
as follows:

For the three months ended November 30, 2008 and 2007 the Company had no
activities that produced revenues from operations.

For the three months ended November 30, 2008, the Company had a net loss of
$(657,988) compared to a net loss of $(258,042) for the corresponding period in
2007. For the three months ended November 30, 2008, the Company incurred
operating expenses of $(645,878) consisting primarily of Research and
Development expenses, consulting, stock-based compensation, legal fees, and
salaries.

For the three months ended November 30, 2007, the Company had a net loss of
$(258,042). In the same period, the Company incurred operating expenses of
$(247,488) consisting primarily of stock-based compensation, legal fees and
salaries.

The increase in operating expenses of $398,390 from the three month period
November 30, 2008 compared to the three months ended November 30, 2007 related
primarily to an increase in Research and Development expenses offset by a
decrease in legal fees. Research and Development expense increased due to the
costs associated with the development of our lead product Cytolin (R).
Additionally, General and Administrative costs increased due primarily to
salaries and consulting expenses, offset by a decrease in stock-based
compensation.

Results of Operations for the six months ended November 30, 2008 and 2007 are as
follows:

For the six months ended November 30, 2008 and 2007 the Company had no
activities that produced revenues from operations.

For the six months ended November 30, 2008, the Company had a net loss of
$(1,216,738) compared to a net loss of $(484,727) for the corresponding period
in 2007. For the three months ended November 30, 2008, the Company incurred
operating expenses of $(1,198,318) consisting primarily of Research and
Development expenses, consulting, stock-based compensation, legal fees, and
salaries.

For the six months ended November 30, 2007, the Company had a net loss of
$(484,727). In the same period, the Company incurred operating expenses of
$(471,886) consisting primarily of stock-based compensation, legal fees and
salaries.

The increase in operating expenses of $726,432 from the six month period
November 30, 2008 compared to the six months ended November 30, 2007 related
primarily to an increase in Research and Development expenses offset by a
decrease in legal fees. Research and Development expense increased due to the
costs associated with the development of our lead product Cytolin (R).
Additionally, General and Administrative costs increased due primarily to
salaries and consulting expenses.

Liquidity and Capital Resources

As shown in the accompanying Financial Statements, for the six months ended
November 30, 2008 and 2007, and since October 28, 2003 through November 30, 2008
the Company has had net losses of $(1,216,738) and $(484,727) and $(8,189,563),
respectively. As of November 30, 2008, the Company has not emerged from the
development stage. In view of these matters, the Company's ability to continue
as a going concern is dependent upon the Company's ability to begin operations
and to achieve a level of profitability. Since inception, the Company has
financed its activities principally from the sale of public equity securities
and proceeds from notes payable. The Company intends on financing its future
development activities and its working capital needs largely from the sale of
public equity securities with some additional funding from other traditional
financing sources.


                                       27


As previously mentioned, since October 28, 2003, we have financed our operations
largely from the sale of common stock and proceeds from notes payable. From
inception through November 30, 2008 we raised cash of approximately $1,778,000
(net of offering costs) common stock financings and approximately $1,534,000
through the issuance notes payable.

Since October 28, 2003 through November 30, 2008, we have incurred $1,411,000 of
research and development costs and approximately $7,440,000 in operating
expenses.

We have incurred significant net losses and negative cash flows from operations
since our inception. As of November 30, 2008, we had an accumulated deficit of
approximately $(9,791,000) and a working capital deficit of approximately
$(424,000).

We anticipate that cash used in product development and operations, especially
in the marketing, production and sale of our products will increase
significantly in the future.

In September 2009, the Company raised $2,000,000 through a Private Placement
Offering of preferred shares. The Company amended its articles and designated
400,000 preferred shares Series B to be sold at $5.00 share. The preferred
shares are convertible into common shares at $.50 per share or 10 shares of
common for every preferred share issued.

In April 2008, the Company's Board of Directors approved a Private Placement
Memorandum to sell up to 6 million shares of common stock, no par value, a
company offering. This offering was only available to accredited investors as
defined under the 1933 Securities Act ("The Act"). The offering commenced on or
about May 1, 2008 and ended June 15, 2009, the Company has sold 3,876,508
restricted common shares and 1,938,254 warrants for proceeds totaling
approximately $2,000,000. These securities were sold pursuant to an exemption
from registration under Regulation D under The Act and will not be registered
with the Securities and Exchange Commission. The warrants have an exercise price
of $1.00 per share, immediate vesting rights, and expire in April 2013.

In October 2009, the Company's Board of Directors approved a
Private Placement to Sell up to 2,000,000 shares of the Company's common stock,
no par value, at a price of $.50 per share. The offering commenced on or about
November 2009 and was completed on March 29, 2010. All 2,000,000 shares were
sold for proceeds totaling $1,000,000.

In September 2009 the Company entered into an agreement with Massachusetts
General Hospital to provide financial support for the purpose of conducting an
ex-vivo study of the Company's lead drug, Cytolin(R). This study is intended as
a prelude to an in-vivo study. Costs are estimated at approximately $363,000 of
which 50%, or $172,000, was paid to Massachusetts General Hospital by CytoDyn by
September 2009.

Item 3.   Quantitative and Qualitative Disclosures about Market Risk

Not applicable

Item 4T.  Controls and Procedures

The Company's Chief Executive Officer and Chief Financial Officer have evaluated
the effectiveness of the Company's disclosure controls and procedures (as
defined in Rule 13a-15(e) and 15d015(e) under the Exchange Act) as of the three
month period ending November 30, 2008 covered by this quarterly report on Form
10Q. Based upon such evaluation, the Chief Executive Officer and Chief Financial
Officer have concluded that, as of the end of such period, the Company's
disclosure controls and procedures were not effective as required under Rules
13a015(e) and 15d-15(e) under the Exchange Act. This conclusion by the Company's
Chief Executive Officer and Chief Financial Officer does not relate to reporting
periods after November 30, 2008.

Changes in Control Over Financial Reporting

No change in the Company's internal control over financial reporting occurred
during the quarter ended November 30, 2008, that materially affected, or is
reasonably likely to materially affect, the Company's internal control over
financial reporting.


                                       28




                                     Part II

Item 1.  Legal Proceedings

None

Item 2.   Unregistered Sales of Equity and Use of Proceeds

In April 2008 our Board of Directors approved a Private Placement Memorandum to
sell 6 million shares of common stock, no par value, through a Placement Agent,
a company offering. This offering was only available to accredited investors as
defined under the 1933 Securities Act ("The Act").

During the three month period ended November 30, 2008, the Company sold 871,000
restricted common shares at $.50 per share. In addition, the Company issued
334,000 shares of restricted common stock to for certain consulting shares at
$.50 per share. The securities were issued pursuant to an exemption from
Registration under Regulation D under "The Act" and will not be registered with
the Securities and Exchange Commission.

The Company used the proceeds to manufacture our primary product Cytolin(R) for
use in clinical trials. The remaining amount of the proceeds will be used for
Company operating expenses, patent fees and legal fees.

Item 3.   Defaults Upon Senior Securities

None

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

None

Item 5.   Other Information

None

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


                                   SIGNATURES


                                               CYTODYN, INC.
                                               Registrant)


DATE:      June 3, 2010                        BY: /s/ Allen D. Allen
       -----------------------                     -----------------------------
                                                   Allen D. Allen
                                                   President and CEO




                                       29