8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) March 11, 2010

CytoCore, Inc.

(Exact name of registrant as specified in charter)

Delaware	0-935	36-4296006
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

414 North Orleans Street, Suite 510, Chicago, Illinois	60654
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (312) 222-9550

N/A

(Former name or former address, if changed since last report.)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement

     On March 11, 2010, CytoCore, Inc., a Delaware corporation (the “Company”) announced that it had entered into an agreement with certain entities in settlement of litigation.

     In October 2007, NeoMed Innovation III L.P. (“NeoMed”) filed suit against the Company in the United State District Court, Eastern District of Illinois (Case No. 07C 5721). NeoMed alleged that the Company breached a contract with NeoMed. The alleged contract provided, among other things, that the Company would exchange two existing notes payable to NeoMed for a new note with the note balance payable at the option of the holder in the form of common stock valued at $1.50 per share (adjusted for stock splits and equity raised at lower valuations). In 2006, the Company paid to NeoMed $1,060,000 and accrued interest totaling approximately $319,000 in satisfaction of the note. Despite accepting this payment, NeoMed instituted the litigation and demanded that the Company honor the alleged contract.

     Pursuant to the terms of the Settlement Agreement with Mutual General Releases entered into by the Company and three entities — NeoMed, NeoMed Innovation III LTD and NeoMed Management (Jersey) Limited — the Company has agreed to issue 2,658,800 shares of the Company’s common stock, $.001 par value, to NeoMed subject to restrictions on transfer imposed by applicable securities laws. In addition, the Company has agreed to issue to NeoMed a warrant to purchase 217,000 shares of the common stock of the Company at $0.50 per share. Pursuant to the agreement, NeoMed is also entitled to nominate a member to the Company’s Board of Directors, subject to certain notice and other requirements. The parties also agreed to file an order dismissing the litigation with prejudice within two business days of NeoMed’s receipt of the shares; the settlement agreement also contained mutual general releases.

     A copy of the press release announcing the issuance of the shares under the settlement agreement is included herewith as Exhibit No. 99.1.

Item 3.02 Unregistered Sales of Equity Securities

     On March 11, 2010, the Company announced that it had agreed to issue to NeoMed 2,658,800 shares of restricted common stock of the Company and a warrant to purchase an additional 217,000 shares of common stock at $0.50 per share pursuant to the terms of the settlement agreement discussed above. The Company is relying on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended, and Regulation S promulgated thereunder for sales to foreign investors. No advertising or general solicitation was employed and the issuance is being made to a single accredited investor with transfer restricted in accordance with applicable law.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.		Description
	99.1	Press release dated March 11, 2010 concerning the issuance of shares and warrants in settlement of litigation

SIGNATURES

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

	CytoCore, Inc.
Dated: March 17, 2010	By:	/s/ Robert F. McCullough
		Robert F. McCullough
		Chief Executive Officer, Chief Financial Officer and Director

EX-99.1

Exhibit 99.1

CHICAGO—(BUSINESS WIRE)—CytoCore Inc. (OTCBB:CYOE — News), the developer of cost-effective products used in the practice of cytology for the detection and diagnosis of cancer and cancer related diseases, announced today that NeoMed has made an investment in CytoCore Inc.

NeoMed Management, an international investment firm, is exclusively focusing on the healthcare and life science industry. Founded in 1996, NeoMed has established four funds, with total committed capital exceeding $200 million.

NeoMed invests in young companies with outstanding growth prospects. Portfolio companies typically develop innovative products addressing inadequately served medical needs in the following industry sectors: pharmaceuticals, biotechnology drugs, diagnostics, medical devices and instruments.

In settlement of outstanding litigation related to the issuance of notes by Molecular Diagnostics Inc., the former name of CytoCore Inc. and related term sheets in 2001 and 2002, NeoMed has agreed to accept 2,658,800 restricted shares valued at $.50 per share along with 217,000 warrants with an exercise price of $.50 per share.

Robert F. McCullough Jr., CEO of CytoCore Inc., commented, “We are happy to settle all outstanding issues and reduce our liabilities by $1,329,400 related to the previously issued notes and accrued interest. We also are happy to utilize NeoMed’s network and expertise with regard to the development of young companies’ growth prospects in addressing inadequately served medical needs as we develop and implement `CytoCore Solutions’.”

Erik Amble, Managing Partner of NeoMed, added, “Since 2001, we have been intrigued by the potential of CytoCore’s innovative technologies and products and the large markets these technologies and products address.”

About CytoCore, Inc.

CytoCore develops cost-effective, highly accurate screening systems for early detection of gynecological and other cancers. Designed for easy deployment at a laboratory or at the point-of-care, the CytoCore suite of sample collection technologies assists in the detection of cervical, endometrial, and other cancers. The CytoCore Solutions System is being developed to provide medical practitioners with highly accurate, low-cost, screening systems for cervical and other cancers that can be seamlessly integrated into existing medical models. More information is available at:

http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.cytocoreinc.com%2F&esheet=6210785&lan=en_US&anchor=www.cytocoreinc.com&index=1&md5=902c8746bc732383b9ca52d95a714847.

Certain statements in this release are forward-looking. These statements are based on CytoCore’s current expectations and involve many risks and uncertainties, such as the company’s inability to obtain sufficient financing, the possibility that clinical trials will not substantiate CytoCore’s expectations with respect to the CytoCore Solutions System, and other factors set forth in reports and documents filed by CytoCore with the Securities and Exchange Commission. Actual results may differ materially from CytoCore’s current expectation depending upon a number of factors affecting the Company’s business. These factors include, among others, risks and uncertainties detailed in the Company’s periodic public filings with the Securities and Exchange Commission, including but not limited to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008. Except as expressly required by law, CytoCore undertakes no obligation to publicly update or revise any forward-looking statements contained herein.