UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

Form 10-Q/A

(Amendment No. 1)

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period ended March 31, 2008

¨ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission file number: 000-27866

VYREX CORPORATION

(Exact name of Registrant as specified in its charter)

Delaware	88-0271109
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

21615 N. 2^nd Avenue, Phoenix, Arizona 85027

(Address of principal executive offices)

(623) 780-3321

(Registrant’s telephone number including area code)

Vyrex Corporation

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for 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.    x  Yes    ¨  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

¨  Large accelerated filer	¨  Accelerated filer
¨  Non-accelerated filer	x  Smaller reporting company

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

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of May 15, 2008, the issuer had 25,882,878 shares of common stock outstanding.

Explanatory Note

The purpose of this Amendment No. 1 on Form 10-Q/A is to respond to comments received from the U.S. Securities and Exchange Commission’s Division of Corporation Finance in its letters dated July 17, 2008, August 20, 2008 and October 8, 2008, regarding our previously filed Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2008, filed with the U.S. Securities and Exchange Commission on May 20, 2008 (“Original Form 10-Q”). This amendment amends the following:

• The financial statements and notes to unaudited condensed consolidated financial statements have been revised to reflect the merger transaction between Vyrex Corporation and PowerVerde, Inc. to be a capital transaction in substance, rather than a business combination. That is, the transaction is equivalent to the issuance of stock by the private company for the net monetary assets of the shell corporation, accompanied by a recapitalization of the private company. The accounting is identical to that resulting from a reverse acquisition, except that no goodwill or other intangibles are recorded. In addition, as a result, the historical financial statements presented for the registrant in periods following the transaction will be those of the operating entity – PowerVerde, Inc.

• We have added a statement of changes in stockholders’ equity from December 31, 2007, showing the adjustments that we recorded to reflect our recapitalization in connection with our February 2008 reverse merger.

• Our disclosure controls and procedures have been revised to state that, based upon an evaluation conducted by the Company, the Chief Executive Officer and President concluded that, as a result of the need to restate our financial statements as set forth, above, the Company’s disclosure controls and procedures were ineffective, as well as to identify steps the Company has taken to address this issue.

• The certifications filed as Exhibits 31.1 and 31.2 to the Original Form 10-Q have been revised to conform to the exact wording required by Item 601(b)(31) of Regulation S-K.

There are no changes to the original Form 10-Q other than those outlined above. Except as required to reflect the changes noted above, this Amendment No. 1 on Form 10-Q/A does not attempt to modify or update any other disclosures set forth in our Original Form 10-Q. Furthermore, this Amendment No. 1 on Form 10-Q/A does not purport to provide a general update or discussion of any other developments of the Company subsequent to the filing of the Original Form 10-Q.

PowerVerde, Inc.

Index to Form 10-Q/A

		Page
PART I	FINANCIAL INFORMATION	1
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets (As Restated)	1
	Condensed Consolidated Statements of Operations (As Restated)	2
	Condensed Consolidated Statement of Changes in Stockholders’ Equity (As Restated)	3
	Condensed Consolidated Statements of Cash Flows (As Restated)	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	16
Item 4T.	Controls and Procedures	16
PART II	OTHER INFORMATION	16
Item 1.	Legal Proceedings	16
Item 1A.	Risk Factors	17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 3.	Defaults upon Senior Securities	17
Item 4.	Submission of Matters to a Vote of Security Holders	17
Item 5.	Other Information	17
Item 6.	Exhibits	17
Exhibit 31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32.1	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
SIGNATURES		18

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

Vyrex Corporation and Subsidiary

(A Development Stage Company)

Condensed Consolidated Balance Sheets

March 31, 2008 and December 31, 2007 (As Restated)

(Unaudited)

	2008			2007
Assets
Current Assets:
Cash and cash equivalents	$	92,176		$	160,582
Accounts receivable		11,063			233,131
Total Current Assets		103,239			393,713
Property and Equipment
Property and equipment, net of accumulated depreciation of $1,574 and $914, respectively		10,826			11,487
Total Assets	$	114,065		$	405,200
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable and accrued expenses		62,660			—
Total Current Liabilities		62,660			—
Stockholders’ Equity
Common stock:
100,000,000 common shares authorized, par value $0.001 per share, 20,350,000 common shares issued and outstanding at December 31, 2007		—			20,350
100,000,000 common shares authorized, par value $0.0001 per share, 25,882,878 common shares issued and outstanding at March 31, 2008		2,589			—
Additional paid-in capital		472,344			659,252
Deficit accumulated during the development stage		(423,528	)		(274,402	)
Total Stockholders’ Equity		(51,405	)		405,200
Total Liabilities and Stockholders’ Equity	$	114,065		$	405,200

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1

Vyrex Corporation and Subsidiary

(A Development Stage Company)

Condensed Consolidated Statements of Operations

For the three months ended March 31, 2008 and

the period from March 9, 2007 (Date of Inception) to March 31, 2007 (As Restated)

(Unaudited)

	2008			2007			Cumulative from inception through March 31, 2008
Licensing and Royalty Revenue	$	11,063		$	—		$	11,063
Operating Expenses
Research and development		71,172			—			200,052
General and administrative		89,017			11,574			234,607
Total Operating Expenses		160,189			11,574			434,659
Loss from Operations		(149,126	)		(11,574	)		(423,596	)
Other Income (Expenses)
Interest income		—			—			68
Total Other Income Expense)		—			—			68
Loss before Income Taxes		(149,126	)		(11,574	)		(423,528	)
Provision for Income Taxes		—			—			—
Net Loss	$	(149,126	)	$	(11,574	)	$	(423,528	)
Net Loss per Share - Basic and Diluted	$	(0.01	)	$	(0.00	)
Weighted Average Common Shares Outstanding - Basic and Diluted		14,410,330			20,029,167

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2

Vyrex Corporation and Subsidiary

(A Development Stage Company)

Condensed Consolidated Statement of Changes in Stockholders’ Equity

For the three months ended March 31, 2008 (As Restated)

(Unaudited)

	Common Shares		Common Stock			Paid in Capital			Deficit Accumulated during the Development Stage			Total Stockholders’ Equity
Balances, December 31, 2007	20,350,000		$	20,350		$	659,252		$	(274,402	)	$	405,200
Sale of common stock at $.50 per share	50,000			50			24,950			—			25,000
Stockholder Equity of Vyrex
Corporation at merger	1,019,144			102			(479,771	)		—			(479,669	)
Recapitalization of PowerVerde stockholders’ equity	(20,400,000	)		(20,400	)		20,400			—			—
Shares issued related to forgiveness of debt and issued for services	275,000			28			249,972						250,000
Shares issued in exchange for PowerVerde shares	24,588,734			2,459			(2,459	)		—			—
Net loss for the three month period	—			—			—			(149,126	)		(149,126	)
Balances, March 31, 2008	25,882,878		$	2,589		$	472,344		$	(423,528	)	$	51,405

3

Vyrex Corporation and Subsidiary

(A Development Stage Company)

Condensed Consolidated Statements of Cash Flows

For the three months ended March 31, 2008 and the period

from March 9, 2007 (Date of Inception) to March 31, 2007 (As Restated)

(Unaudited)

	2008			2007			Cumulative from inception
Cash Flows from Operating Activities
Net loss	$	(149,126	)	$	(11,574	)	$	(523,528	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation, amortization, and impairment charges		661			—			1,575
Share based compensation		—			—			50,000
Changes in operating assets and liabilities:
Accounts receivable and other assets		(11,063	)		—			(11,063	)
Accounts payable and accrued liabilities		65,250			11,574			62,660
Cash Used in Operating Activities		(94,278	)		—			(320,356	)
Cash Flows From Investing Activities
Purchase of fixed assets		—			—			(12,401	)
Cash acquired in business acquisition		872			—			872
Cash Provided by (Used in) Investing Activities		872			—			(11,529	)
Cash Flows from Financing Activities
Net proceeds from issuance of common stock		25,000			—			700,000
Payment of stock issuance costs		—			—			(45,398	)
Payment of merger related transaction costs		—			—			(230,541	)
Cash Provided by Financing Activities		25,000			—			424,061
Net Increase (Decrease) in Cash		(68,406	)		—			92,176
Cash, at Beginning of Period		160,582			—			—
Cash, at End of Period	$	92,176		$	—		$	92,176

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

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Note 1 – Condensed Consolidated Financial Statements

The accompanying unaudited condensed consolidated financial statements prepared in accordance with instructions for Form 10-Q, include all adjustments (consisting only of normal recurring accruals) which are necessary for a fair presentation of the results for the periods presented. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the Company’s Annual Report for the year ended December 31, 2007. The results of operations for the three months ended March 31, 2008, are not necessarily indicative of the results to be expected for the full year. The consolidated financial statements include the accounts of Vyrex Corporation (the “Company”), and PowerVerde, Inc., its wholly-owned subsidiary. Intercompany balances and transactions have been eliminated in consolidation.

Note 2 – Business Acquisition

On February 11, 2008, Vyrex Corporation (“Vyrex” or the “Company”); PowerVerde, Inc. (“PowerVerde”) and Vyrex Acquisition Corporation (“VAC”), a wholly-owned subsidiary of Vyrex, all Delaware corporations, entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the terms of the Merger Agreement, on February 12, 2008, VAC merged with and into PowerVerde, with PowerVerde remaining as the surviving corporation and a wholly-owned subsidiary of Vyrex (the “Merger”). As consideration for the Merger, as of the closing of the Merger, each issued and outstanding share of common stock of PowerVerde was converted into the right to receive 1.2053301 shares of the common stock of Vyrex and each share of VAC was converted into one share of PowerVerde common stock. As a result of the Merger, the former shareholders of PowerVerde hold 24,588,734 shares, or 95%, of the common stock of Vyrex. Pursuant to the Merger Agreement, PowerVerde paid $233,000 in accounts payable and other liabilities owed by Vyrex. The total purchase price of the transaction of $401,894 includes $60,000 of transaction costs related to the Merger.

In addition, immediately prior to execution of the Merger Agreement, Vyrex paid a $200,000 promissory note through the issuance of 250,000 shares of common stock and issued an additional 25,000 shares of common stock as payment for certain consulting and administrative services.

The following is a summary of the assets acquired as of February 12, 2008:

Property and equipment, net	$	11,486
Cash and cash equivalents		157,277
Accounts receivable		233,131
	$	401,894

Note 3 – Restatement of Previously Issued Interim Financial Statements

On August 20, 2008, management and the Board of Directors of the Company determined that the Company’s financial statements for the interim period ended March 31, 2008 could no longer be relied upon because of a change in the accounting treatment of the Merger discussed in Note 2 above.

The merger transaction was originally accounted for as a reverse merger of the Company; however, in response to a recent comment letter the Company received from the U.S. Securities and Exchange Commission, the Company has treated this transaction as equivalent to the issuance of stock by PowerVerde for the net monetary assets of the Company, accompanied by a recapitalization of PowerVerde. The accounting treatment is identical to that resulting from a reverse merger, except that no goodwill or other intangibles has been recorded.

5

Under generally accepted accounting principles in the United States of America (“GAAP”), the acquisition of PowerVerde, Inc. has been reported as a reverse merger and PowerVerde, Inc. has been treated as the acquiring entity for accounting and financial reporting purposes. As a result, the historical financial statements prior to the date of the acquisition, including the development stage disclosures, are those of the accounting acquirer, PowerVerde, Inc.

The effects of these corrections on the accompanying unaudited condensed consolidated balance sheets as of March 31, 2008 and December 31, 2007, and the unaudited condensed consolidated statements of operations for the three months ended March 31, 2008 and 2007 and a discussion of the nature of the adjustments made to the balances are as follows:

Goodwill and Additional Paid-In Capital

The Company did not properly account for the acquisition of PowerVerde, Inc. in accordance with generally accepting accounting principles. The effect of the adjustment is a decrease in recorded goodwill and additional paid-in capital in the amount of $7,650,073 as of March 31, 2008.

Stockholders’ Equity

The Company did not properly account for the effect of the reverse merger in its reported stockholders’ equity. As noted above, PowerVerde, Inc. was treated as the acquiring entity for accounting and financial reporting purposes. As a result, the historical financial statements prior to the date of the acquisition should have been those of the accounting acquirer, PowerVerde, Inc. However, reported stockholders’ equity erroneously included the additional paid-in capital and deficit accumulated in the development stage of Vyrex Corporation. The effect of the adjustment is a decrease in additional paid-in capital and deficit accumulated in the development stage in the amount of $13,246,536 as of March 31, 2008.

Historical Financial Statements

The condensed consolidated balance sheet of Vyrex Corporation as of December 31, 2007, as well as the condensed consolidated statement of operations of Vyrex Corporation for the three month period ended March 31, 2007, were included in the original Form 10-Q for the quarter ended March 31, 2008. As noted above, the historical financial statements should have been those of PowerVerde, Inc. Also, the condensed consolidated statement of operations for the three month period ended March 31, 2008 did not properly report the results of operations for the Company for the period from January 1, 2008 to the merger date, February 12, 2008. Finally, the results of operations for the development stage period erroneously included the results of operations of Vyrex Corporation from the period of its inception to February 12, 2008.

6

A reconciliation of the unaudited condensed consolidated balance sheets as of March 31, 2008 and December 31, 2007 and the unaudited condensed consolidated statements of operations for the three months ended March 31, 2008 and 2007 to the previously filed financial statements is as follows:

Condensed Consolidated Balance Sheet – March 31, 2008

	As Reported			Reverse Goodwill			Reverse Additional Paid-In Capital			Reverse Vyrex Stockholders’ Equity			As Restated
Assets
Current Assets
Cash and cash equivalents	$	92,176			—			—			—		$	92,176
Accounts receivable		11,063			—			—			—			11,063
Total Current Assets		103,239											$	103,239
Property and Equipment
Property and equipment, net of accumulated depreciation		10,826			—			—			—			10,826
Other Assets
Goodwill		7,650,073			(7,650,073	)		—			—			—
Total Assets	$	7,764,138		$	(7,650,073	)	$	—		$	—		$	114,065
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable	$	62,660			—			—			—		$	62,660
Stockholders’ Equity
Common Stock		2,589			—			—			—			2,589
Additional paid-in capital		21,368,953						(7,650,073	)		(13,246,536	)		472,344
Deficit accumulated in the development stage		(13,670,064	)								13,246,536			(423,528	)
Total Stockholders’ equity		7,701,478			—			(7,650,073	)		—			51,405
Total Liabilities and Stockholders’ Equity	$	7,764,138		$	—		$	(7,650,073	)	$	—		$	114,065

7

Condensed Consolidated Balance Sheet – December 31, 2007

	As Reported			Reverse Vyrex Balance Sheet			PowerVerde, Inc. Historical Balance Sheet			As Restated
Assets
Current Assets
Cash and cash equivalents	$	4,125			(4,125	)		160,582		$	160,582
Accounts receivable		5,736			(5,736	)		233,131			233,131
Total Current Assets		9,861			(9,861	)		393,713			393,713
Property and Equipment
Property and equipment, net of accumulated depreciation		—			—			11,487			11,487
Total Assets	$	9,861		$	(9,861	)	$	405,200		$	405,200
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable	$	200,609			(200,609	)		—		$	—
Accrued expenses		106,009			(106,009	)
Note payable		200,000			(200,000	)
Total Current Liabilities		506,618			(506,618	)		—			—
Stockholders’ Equity
Common Stock		102			(102	)		20,350			20,350
Additional paid-in capital		13,129,473			(13,129,473	)		659,252			659,252
Deficit accumulated in the development stage		(13,626,332	)		13,626,332			(274,402	)		(274,402	)
Total Stockholders’ equity		(496,757	)		496,757			405,200			405,200
Total Liabilities and Stockholders’ Equity	$	9,861		$	(9,861	)	$	405,200		$	405,200

8

Condensed Consolidated Statements of Operations for the Three months ended March 31, 2008

	As Reported			Reverse Vyrex Results of Operations for the period from 01/01/08 - 02/12/08			PowerVerde, Inc. Results of Operations for the period from 01/01/08 - 02/12/08			As Restated
Licensing and Royalty Revenue	$	11,063		$	—		$	—		$	11,063
Operating Expenses
Research and Development		48,437			—			22,735			71,172
General and administrative		27,536			55,910			5,571			89,017
Total Operating Expenses		75,973			55,910			28,306			160,189
Loss from Operations		(64,910	)		(55,910	)		(28,306	)		(149,126	)
Other Income (Expenses)
Interest Income		23,480			(23,480	)		—			—
Interest Expense		(2,301	)		2,301			—			—
Total Other Income (Expenses)		21,179			(21,179	)		—			—
Loss before Income Taxes		(43,731	)		(77,089	)		(28,306	)		(149,126	)
Provision for Income Taxes		—			—			—			—
Net Loss	$	(43,731	)	$	(77,089	)	$	(28,306	)	$	(149,126	)
Net Loss per share - Basic and Diluted	$	0.00									($0.01	)

9

Condensed Consolidated Statements of Operations for the Three months ended March 31, 2007

	As Reported			Reverse Vyrex Results of Operations Three months March 31, 2007			PowerVerde, Inc. Results of Operations Three Months ended March 31, 2007			As Restated
Licensing and Royalty Revenue	$	14,465			(14,465	)	$	—		$	—
Operating Expenses
General and administrative		16,377			(16,377	)		11,574			11,574
Total Operating Expenses		16,377			(16,377	)		11,574			11,574
Loss from Operations		(1,912	)		1,912			(11,574	)		(11,574	)
Other Income (Expenses)
Interest Expense		(5,351	)		5,351			—			—
Total Other Income (Expenses)		(5,351	)		5,351			—			—
Loss before Income Taxes		(7,263	)		7,263			(11,574	)		(11,574	)
Provision for Income Taxes		—			—			—			—
Net Loss	$	(7,263	)	$	7,263		$	(11,574	)	$	(11,574	)
Net Loss per share - Basic and Diluted	$	0.00								$	0.00

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Condensed Consolidated Statements of Operations

Cumulative from Inception through March 31, 2008

	As Reported			Reverse Vyrex Results of Operations from inception through February 12, 2008			As Restated
Licensing and Royalty Revenue	$	933,193		$	(922,130	)	$	11,063
Operating Expenses
Research and Development		6,542,215			(6,342,163	)		200,052
General and administrative		7,005,026			(6,770,419	)		234,607
Total Operating Expenses		13,547,241			(13,112,582	)		434,659
Loss from Operations		(12,614,048	)		12,190,452			(423,596	)
Other Income (Expenses)
Interest Income		499,856			(499,788	)		68
Gain on sale of investment in available for sale securities		13,878			(13,878	)		—
Other income		4,434			(4,434	)		—
Change from issuance of stock options for bridge financing		(1,349,900	)		1,349,900			—
Interest Expense		(224,282	)		224,282			—
Total Other Income (Expenses)		(1,056,014	)		1,056,082			68
Loss before Income Taxes		(13,670,062	)		13,246,534			(423,528	)
Provision for Income Taxes		—			—			—
Net Loss	$	(13,670,062	)	$	13,246,534		$	(423,528	)

Note 4 – Recent Accounting Pronouncements

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — including an amendment of FASB Statement No. 115.” SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value. Unrealized gains and losses on items for which the fair value option has been elected will be recognized in earnings at each subsequent reporting date. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The adoption of this standard has not had a material effect on the consolidated financial position and results of operations of the Company.

In September 2006, the Financial Accounting Standards Board, (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measures.” SFAS No. 157 defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measures required under other accounting pronouncements, but does not change existing guidance as to whether or not an instrument is carried at fair value. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact that the adoption of SFAS No. 157 will have on its future consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141 (revised 2007) “Business Combinations” (“FASB No. 141(R)”). FASB No. 141(R) retains the fundamental requirements of the original pronouncement requiring that the purchase method be used for all business combinations. FASB No. 141(R) defines the acquirer as the entity that obtains control of one or more businesses in the business combination, establishes the acquisition date as the date that the acquirer achieves control and requires the acquirer to

11

recognize the assets acquired, liabilities assumed and any non-controlling interest at their fair values as of the acquisition date. FASB No. 141(R) also requires that acquisition-related costs be recognized separately from the acquisition. FASB No. 141(R) is effective for the Company for fiscal 2010. The Company is currently assessing the impact of FASB No. 141(R) on its consolidated financial position and results of operations.

In December 2007, the FASB issued Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51 (“FASB No. 160”)”. The objective of FASB No. 160 is to improve the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. This Statement applies to all entities that prepare consolidated financial statements, except not-for-profit organizations. FASB No. 160 amends ARB 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It also amends certain of ARB 51’s consolidation procedures for consistency with the requirements of FASB No. 141 (R). This Statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008 (that is, January 1, 2009, for entities with calendar year-ends). Earlier adoption is prohibited. The effective date of this Statement is the same as that of the related Statement 141(R). FASB No. 160 will be effective for the Company’s fiscal 2010. This Statement shall be applied prospectively as of the beginning of the fiscal year in which this Statement is initially applied, except for the presentation and disclosure requirements. The presentation and disclosure requirements shall be applied retrospectively for all periods presented.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS No. 161”). SFAS No. 161 amends and expands the disclosure requirement for FASB Statement No. 133, “Derivative Instruments and Hedging Activities” (“SFAS No. 133”). It requires enhanced disclosure about (i) how and why an entity uses derivative instruments, (ii) how derivative instruments and related hedged items are accounted for under SFAS No. 133 and its related interpretations, and (iii) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. SFAS No. 161 is effective for the Company as of January 1, 2009.

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

Forward Looking Statements

Readers are cautioned that the statements in this Report that are not descriptions of historical facts may be forward-looking statements that are subject to risks and uncertainties. This Report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are based on the beliefs of our management as well as on assumptions made by and information currently available to us as of the date of this Report. When used in this Report, the words “plan,” “will,” “may,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “project” and similar expressions are intended to identify such forward-looking statements. Although we believe these statements are reasonable, actual actions, operations and results could differ materially from those indicated by such forward-looking statements as a result of the risk factors included in our annual report on Form 10-K for the year ended December 31, 2007, or other factors. We must caution, however, that this list of factors may not be exhaustive and that these or other factors, many of which are outside of our control, could have a material adverse effect on us and our ability to achieve our objectives. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above.

The following discussion and analysis should be read in conjunction with the financial statements and notes thereto appearing elsewhere herein.

Critical Accounting Policies

Our financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these financial statements requires our management to make estimates and assumptions about future events that effect the amounts reported in the financial statements and related notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. We believe the following critical accounting policies affect its more significant judgments and estimates used in the preparation of financial statements.

Accounting for Uncertainty in Income Taxes

We adopted the provisions of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109” (“FIN 48”), on January 1, 2007. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement 109, “Accounting for Income Taxes”, and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Based on our evaluation, we have concluded that there are no significant uncertain tax positions requiring recognition in our financial statements. Our evaluation was performed for the tax years ended December 31, 2004, 2005 and 2006, the tax years which remain subject to examination by major tax jurisdictions as of December 31, 2007.

We may from time to time be assessed interest or penalties by major tax jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. In the event we have received an assessment for interest and/or penalties, it has been classified in the financial statements as selling, general and administrative expense.

Revenue Recognition

Licensing and royalty revenue from royalty agreements is recognized in accordance with the terms of the specific agreement, which generally includes a quarterly minimum payment by the licensee.

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Overview

Vyrex Corporation (“Vyrex”) was incorporated in Nevada in 1991 and operated as a development stage company seeking to discover and develop pharmaceuticals, nutraceuticals and cosmeceuticals for the treatment and prevention of respiratory, cardiovascular and neurodegenerative diseases and conditions associated with aging (the “Biotech Business”). In the most recent years, Vyrex’s research focused mainly on targeted antioxidant therapeutics and nutraceuticals. The Biotech Business was unsuccessful and, as a result, Vyrex ceased material operations relating to that business in October 2005; however, Vyrex retained its intellectual property rights and contract rights relating to that business. On October 17, 2005, Vyrex reincorporated in Delaware. Following the cessation of material Biotech Business operations in October 2005, Vyrex turned its primary focus to seeking an appropriate merger partner for its public shell.

On February 11, 2008, Vyrex; PowerVerde, Inc. (“PowerVerde”); and Vyrex Acquisition Corporation (“VAC”), a wholly-owned subsidiary of Vyrex, all Delaware corporations, entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the terms of the Merger Agreement, on February 12, 2008, VAC merged with and into PowerVerde, with PowerVerde remaining as the surviving corporation and a wholly-owned subsidiary of Vyrex (the “Merger”). As consideration for the Merger, as of the closing of the Merger, each issued and outstanding share of common stock of PowerVerde was converted into the right to receive 1.2053301 shares of the common stock of Vyrex and each share of VAC was converted into one share of PowerVerde common stock. As a result of the Merger, the former shareholders of PowerVerde hold 95% of the common stock of Vyrex. Pursuant to the Merger Agreement, PowerVerde paid $233,000 in accounts payable and other liabilities owed by Vyrex. In addition, immediately prior to execution of the Merger Agreement, Vyrex paid a $200,000 promissory note through the issuance of 250,000 shares of common stock for $50,000 in accrued and unpaid interest) and issued an additional 25,000 shares of common stock as payment for certain consulting and administrative services.

As of March 31, 2008, our accumulated deficit was approximately $13,670,000. We do not expect to receive any further material revenues from the Biotech Business. We are entitled to a minimum royalty of $7,500 per year under our Boron compound sublicense agreement; however, we must pay $7,500 per year to the licensor.

As a development stage company, we have never generated any substantial revenue from product sales and have relied primarily on equity financing, licensing revenues, and various debt instruments for our working capital. We have been unprofitable since our inception.

Results of Operations

Three Months Ended March 31, 2008 and 2007

From January 2007 to February 2008, Vyrex’s material activities consisted of seeking a merger partner. PowerVerde was incorporated in March 2007 and its material operations began in the second quarter of 2007.

Our sole revenues in the first quarter of 2008 and 2007 consisted of royalty payments under the Boron agreement. All of our research and development expenses in the second quarter of 2008 were due to PoweVerde’s activities, except for the $7,500 Boron annual licensing fee.

General and administrative expenses increased substantially in the first quarter of 2008 compared to the year earlier period due to PowerVerde’s operations. See the PowerVerde Plan of Operation set forth below.

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Liquidity and Capital Resources

We have financed our operations since inception primarily through the sale of debt and equity securities. As of March 31, 2008, we had a working capital surplus of $40,579 compared to a working capital deficit of $426,067 at March 31, 2007. The working capital deficit was reversed because, pursuant to the February 2008 Merger and related transactions, PowerVerde satisfied $433,000 of Vyrex’s liabilities ($233,00 in accounts payable owed by Vyrex and $200,000 owed pursuant to a certain promissory note issued by Vyrex) and PowerVerde had cash on hand as of the time of the Merger.

As of the date of this Report, we have enough cash to sustain operations for approximately the next two months. Consequently, we need to promptly raise substantial additional capital in order to finance our plan of operations. W intend to seek the necessary funds through private debt and/or equity transactions. There can be no assurance that we will be able to raise the necessary funds on a timely basis. If we do not, we will be forced to cease operations.

Plan of Operation

General

The following plan of operation for our ongoing PowerVerde business provides information which our management believes is relevant to an assessment and understanding of our business, operations and financial condition.

We plan to mass produce patented renewable power systems using proven techniques established by high technology manufacturing companies such as Boeing. This outsourcing process utilizes other companies to produce many of the necessary parts which save the selling company the cost of buying machinery or establishing a large manufacturing facility with the attendant costs of salaries, benefits and overhead.

We are in a unique position to utilize such a system. One of our principals, George Konrad, owns and operates a manufacturing facility, Arizona Research and Development (“ARD”), which is capable of producing all of the manufactured parts needed for the PowerVerde renewable power systems. We intend to enter into an agreement with ARD to manufacture machined parts for the PowerVerde patented motor as well as assemble the motors and Organic Rankine Cycles, all on fair market terms. ARD will also test and qualify all systems under a rigid quality control program.

ARD has been involved in the development of the PowerVerde systems and is uniquely positioned to continue on to the manufacturing process.

All machining will be done by CNC lathes and machining centers owned by ARD. As production increases it may be necessary for ARD to subcontract certain components or enlarge the present facility.

The design and tooling process of “rapid prototyping” has been employed by PowerVerde and ARD throughout the developmental program using solid modeling CAD, Stereo lithography, Finite Element Analysis, Computerized Fluid Dynamics (CFD), CAM, CNC machining and other techniques developed by the aerospace industry. This process produces products that are ready to go into mass-produced manufacturing immediately upon completion of the testing program.

PowerVerde also intends to contract to local refrigeration specialty companies the job of installing and maintaining the power systems. The companies will be contracted in each area of market penetration.

We have no employees as of the date of this Report; however, we intend to add sales and marketing staff to promote the systems as soon as beta testing is complete, which is expected to occur by the end of the third quarter of 2008. We have not yet entered into any agreements for distribution or marketing of our products, and there can be no assurance that we will ever do so.

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We intend to continue with research and development activities in order to further improve and refine our products.

Production

ARD will purchase all materials and components utilized in the PowerVerde renewable electrical generating systems and deliver the finished product to PowerVerde under the terms of the agreement to be entered into between them. ARD has been manufacturing high tech camera booms for many years and has established a working relationship with suppliers of aluminum, steel and all other parts needed for the manufacture of PowerVerde energy systems. ARD will be responsible for maintaining inventory of all parts and materials.

PowerVerde will provide to ARD all manufacturing drawings, specifications, parts lists, material requirements, assembly manuals and quality control requirements relating to the systems to be produced.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 4T. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company, under the supervision and with the participation of its management, including the Chief Executive Officer and President, evaluated the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and President concluded that, as a result of the need to restate our financial statements described in Note 3 to our unaudited financial statements set forth in Part I, above, the Company’s disclosure controls and procedures were ineffective.

As of the date of this amended report, the Company has taken the following steps to address this issue:

1. Before each report is filed, management of the Company will review the SEC’s website, www.sec.gov, along with other authoritative sources of reporting and accounting matters, in an effort to determine any recent changes in the rules affecting our disclosure obligations; and

2. As each report is prepared, we will discuss with our independent consultants who assist us in the review of the SEC reports and financial statements included within the reports whether they are aware of any recent changes in the rules affecting our disclosure obligations.

Changes in Internal Controls

There has been no change in the Company’s internal control over financial reporting during the quarter ended March 31, 2008, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II OTHER INFORMATION

Item 1. Legal Proceedings

Not applicable

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Item 1A. Risk Factors

Not applicable

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults upon Senior Securities

Not applicable

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

Not applicable

Item 5. Other Information

Not applicable

Item 6. Exhibits

(a) Exhibits

31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

In accordance with Section 13(a) or 15(d) of the Exchange Act, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 14, 2008

VYREX CORPORATION
By:	/s/ George Konrad
	George Konrad
	President and Principal Executive Officer and Principal Accounting Officer

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Exhibit Index

Exhibit No.	Description
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.