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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2003

Commission File Number 0-13347

NEUROLOGIX, INC.

Registrant’s telephone number, including area code: (201) 592-6451

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $.001 per share

(Title of Class)

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 preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    x

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).    Yes  ¨    No  x

The aggregate market value of the voting stock held by non-affiliates of the registrant as of April 6, 2004 was $16,670,544.

The number of shares outstanding of the registrant’s Common Stock, par value $.001 per share, as of April 6, 2004 was 562,785,840.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information required in Part III of this Annual Report on Form 10-K is incorporated herein by reference to the registrant’s Proxy Statement for its 2004 Annual Meeting of Stockholders.

PART I

Item 1. Business

Recent Developments

During the year ended December 31, 2001, the Board of Directors (the “Board”) of Neurologix, Inc. (formerly known as Change Technology Partners, Inc. and referred to herein as the “Company” or the “Registrant”) voted to divest the Company of a majority of its then existing operations. On September 30, 2002, the Board adopted a plan of liquidation and dissolution in order to maximize stockholder value, and noted that if no suitable business opportunities became available to it, subject to stockholder approval, it would commence liquidation in 2003. This plan permitted the Board to amend, modify or abandon same if it determined that doing so would be in the best interests of the Company and its stockholders.

On June 30, 2003, the Company completed the sale of all of its operations when it sold Papke-Textor, Inc. d/b/a Canned Interactive (“Canned Interactive”). Canned Interactive, which designs and produces interactive media such as digital video discs (DVDs) and web sites, primarily for entertainment, consumer goods, sports and technology companies, was the Company’s sole source of operating revenues from December 2001 through June 30, 2003.

On June 18, 2003, the Company signed a letter of intent with Neurologix Research, Inc. (formerly known as “Neurologix, Inc.” and referred to herein as “NRI”) to merge a newly-formed, wholly-owned subsidiary of the Company (“CTP/N Merger Corp.”) with and into NRI, with NRI surviving as a wholly-owned subsidiary of the Company (the “Merger”). On August 13, 2003, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), with NRI and CTP/N Merger Corp. The consummation of the Merger was approved by the stockholders of the Company on February 9, 2004 and the Merger was completed on February 10, 2004.

The Company’s history and business through December 31, 2003 will be described in the first part of this Item 1 followed by a description of the business of NRI.

Definitions

As used in this Annual Report, the following terms shall have the following meanings:

“Arinco” shall mean Arinco Computer Systems Inc. (formerly known as Change Technology Partners, Inc.), a New Mexico corporation that was the predecessor to the Company.

“Board” shall mean the Board of Directors of the Company.

“Canned Interactive” shall mean Papke-Textor, Inc., a California corporation doing business as Canned Interactive.

“Change” shall mean Change Technology Partners, Inc., formerly known as Pangea Internet, Inc., a Delaware corporation, now known as Neurologix, Inc. and referred to herein as the “Company” or the “Registrant”.

“Company” shall mean Neurologix, Inc., a Delaware corporation formerly known as Change, and its predecessor, Arinco.

“CTP/N Merger Corp.” shall mean CTP/N Merger Corp., a Delaware corporation wholly-owned by the Company, which merged with and into NRI pursuant to the Merger Agreement.

“Merger” shall mean the merger which closed on February 10, 2004 pursuant to which NRI merged with and into a newly-formed, wholly-owned subsidiary of the Company.

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“Merger Agreement” shall mean the Agreement and Plan of Merger, dated August 13, 2003, by and among the Company, CTP/N Merger Corp. and NRI providing for the Merger.

“NRI” shall mean Neurologix Research, Inc., a Delaware corporation, that merged on February 10, 2004 with CTP/N Merger Corp. pursuant to the Merger Agreement and thereby became a wholly-owned subsidiary of the Company.

“Registrant” shall mean the Company.

History and Business of the Company during the year ended December 31, 2003

Arinco, the predecessor to Change, was incorporated in New Mexico on March 31, 1978, for the principal purpose of serving its subsidiary operations, which included the sale of telecommunications equipment and services and the retail sales of computers. Arinco became public in 1982. From 1985 to March 2000, Arinco had no business operations. In March 2000, an investor group acquired control of Arinco through an investment of $40,000,000 in exchange for newly issued convertible preferred stock of Arinco (which was all subsequently converted to common stock). Following this investment, in September 2000, Arinco formed Change as a new, wholly-owned subsidiary incorporated in Delaware, and merged with and into Change for the purpose of changing its state of incorporation to Delaware. All of the stockholders of Arinco became stockholders of Change, and Change commenced a new consulting business strategy focusing on internet and e-services and digital media solutions.

Until approximately July 2001, the Company provided a broad range of consulting services, including e-services and technology strategy, online branding, web architecture and design, systems integration, systems architecture and outsourcing. However, the Company was not successful with its business strategy and therefore, the Board voted to divest the Company of a majority of its then existing operations. On September 30, 2002, the Board adopted a plan of liquidation and dissolution in order to maximize stockholder value and noted that if no suitable business opportunities became available to it, subject to stockholder approval, it would commence liquidation in 2003. The Board was given authority to amend, modify or abandon the plan if it determined that doing so would be in the best interests of the Company and its stockholders.

During the period from December 2001 through June 30, 2003, Canned Interactive, which designs and produces interactive media such as digital video discs (DVDs) and web sites, primarily for entertainment, consumer goods, sports and technology companies, was the Company’s sole source of operating revenues. On June 30, 2003, the Company sold all of the issued and outstanding shares of Canned Interactive to a limited partnership of which Canned Interactive’s managing director is the general partner. As a result of this divestiture, the Company recognized a loss of $274,000. Additionally, the Company recognized an impairment charge of $1,782,000, which is included in the loss from discontinued operations for the year ended December 31, 2003, to reduce the carrying amount of the Company’s goodwill ascribed to its single reporting unit to $0 at December 31, 2003.

With the sale of Canned Interactive, the Company ceased to have any continuing operations. At December 31, 2003, the Company’s only employee was its Chief Executive Officer who served until the closing of the Merger.

For a description of the history of the Company’s investments in and loans to unconsolidated affiliates and its acquisitions and divestitures since the investor group acquired control of the Company in March 2000, see Notes 5 and 6 of the Notes to the Company’s Consolidated Financial Statements in Item 8 hereof.

Business of the Company following the Merger

On February 10, 2004, pursuant to the Merger Agreement, CTP/N Merger Corp., a wholly-owned subsidiary of the Company, merged with and into NRI, with NRI surviving as a wholly-owned subsidiary of the Company.

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General

NRI is a development stage company, involved in developing treatments for disorders of the brain and central nervous system using gene therapy and other innovative therapies. These treatments are designed as alternatives to conventional surgical and pharmacological treatments.

NRI’s scientific founders, Dr. Matthew J. During and Dr. Michael G. Kaplitt, have collaborated for more than ten years in working with central nervous system disorders. Their research spans from animal studies (for gene therapy in Parkinson’s disease) to completed Phase I human clinical trials (for Canavan’s disease, a fatal degenerative disorder).

NRI’s initial development efforts are focused on gene therapy products for treating Parkinson’s disease and epilepsy. NRI’s core gene therapy technology, which it refers to as NLX, is currently being tested in a Phase I human clinical trial, sponsored by NRI, to treat Parkinson’s disease. A Phase I clinical trial tests the safety, as opposed to efficacy, of a proposed treatment. The clinical trial is being conducted by Dr. During and Dr. Kaplitt. As part of this clinical trial, twelve patients with Parkinson’s disease will undergo surgical gene therapy at The New York Presbyterian Hospital/Weill Medical College of Cornell University. The first of these surgeries was performed in August 2003 and marks the first time that gene therapy products have been used in a human to attempt to treat Parkinson’s disease. As of February 29, 2004, the surgery has been performed on 3 additional patients and NRI expects the remaining 8 surgeries to be completed in or about mid-2005. With guidance during the approval process from the National Institutes of Health, or NIH, and the Food and Drug Administration, or FDA, Dr. During and Dr. Kaplitt designed a clinical trial aimed at minimizing complications to patients participating in the study. Subject to the successful completion of the Phase I clinical trial, NRI expects to proceed with a Phase II human clinical trial to demonstrate the efficacy of NLX in treating Parkinson’s disease.

NRI was established in 1999. Between 1999 and 2002, NRI conducted its gene therapy research through sponsorship agreements with Thomas Jefferson University, The Rockefeller University and the University of Auckland. In October 2002, NRI opened a laboratory facility in Delaware and hired a staff, with the objective of manufacturing its current gene therapy products for use in pre-clinical trials and to continue research and development of additional gene therapy products. In September 2003, NRI relocated this laboratory from Delaware to New York.

Business Strategy

NRI’s objective is to develop and commercialize long-term, cost-effective treatments for disorders of the brain and central nervous system. Key elements of NRI’s strategy are:

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Technology Overview

DNA is organized into segments called genes, with each gene representing the information necessary to make one particular protein. Occasionally, the DNA for one or more genes can be defective, resulting in the absence or improper production of a functioning protein in the cell. This improper expression can alter a cell’s normal function and can frequently result in a disease. One goal of gene therapy is to treat these diseases by delivering DNA containing the corrected gene into cells. Also, gene therapy can increase or decrease the synthesis of gene products, or introduce new genes in a cell and thus provide new functions to that cell. There are several different ways of delivering genes to cells. Each of the methods of delivery uses carriers, called “vectors,” to transport the genes into cells. Similar to the relationship between a delivery truck and its cargo, the vector (the “truck”) provides a mode of transport and the therapeutic agent (the “cargo”) provides the disease remedy. These carriers can be either man-made components or modified viruses. The use of viruses takes advantage of their natural ability to introduce DNA into cells. Gene therapy takes advantage of this property by replacing viral DNA with a specific gene. Once the vector inserts the gene into the cell, the gene acts as a blueprint directing the cell to make the therapeutic protein.

For its first-generation of products, NRI intends to exclusively utilize the adeno-associated virus (“AAV”) vector. In 1994, Dr. Michael Kaplitt and Dr. Matthew During demonstrated that AAV could be a safe and effective vehicle for gene therapy in the brain. Since that time, AAV has been used safely in a variety of clinical gene therapy trials and, to NRI’s knowledge, the virus has never been associated with any human disease.

NRI believes that the benefits of AAV vector gene therapy technology include:

Product Development

NRI’s initial focus is to develop therapeutic products to meet the needs of two classes of patients: those suffering from Parkinson’s disease and those suffering from epilepsy.

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Parkinson’s Disease

Parkinson’s disease is a neurodegenerative disorder; it arises from the gradual death of nerve cells. Parkinson’s disease is a progressive and debilitating disease that affects the control of movement and is characterized by four principal symptoms:

Physicians and patients have long recognized that this disease, or treatment complications, can cause a wide spectrum of other symptoms, including dementia, abnormal speech, sleep disturbances, swallowing problems, sexual dysfunction, and depression.

Rigidity, tremor, and bradykinesia result, primarily, from a loss of dopamine in two regions of the brain: the substantia nigra and striatum. Dopamine is a chemical, or neurotransmitter, which enhances or facilitates the flow of impulses from nerve cells (neurons) in the substantia nigra to nerve cells in the striatum. Standard therapy for Parkinson’s disease often involves use of levodopa, a drug which stimulates production of dopamine. However, over extended periods of time levodopa often declines in its effectiveness. In advanced stages of Parkinson’s disease, as the disease becomes more and more debilitating, it becomes necessary and advisable to accept a riskier and potentially more invasive medical procedure to treat the disease. It is at this juncture that surgical procedures (deep brain stimulators, lesion removal, etc.) are commonly advised. NRI believes that the glutamic acid decarboxylase, or GAD, gene can be used to selectively target gene expression and alter the neural circuitry affected in Parkinson’s disease. NRI’s technology inserts a GAD gene into the AAV based viral vector. The GAD gene is responsible for making gamma aminobutyric acid, which is released by nerve cells to inhibit or dampen activity. NRI’s gene therapy is designed to reset the overactive brain cells to inhibit electrical activity and return brain network activity to more normal levels without destroying brain tissue and without implanting hardware.

According to the National Parkinson Foundation, there are approximately 1.2 million Parkinson’s patients in the United States and Canada. While the peak onset of Parkinson’s disease is age 60 years, Parkinson’s disease is not just a disease of middle or old age: 15% of Parkinson’s disease patients are 50 years or less and 10% are 40 years or less.

Epilepsy

Epilepsy, which involves recurring seizures, is caused by periodic episodes of repetitive, abnormal electrochemical disturbance in the central nervous system, beginning in the brain. Generalized seizures happen when massive bursts of electrical energy sweep through the whole brain at once, causing loss of consciousness, falls, convulsions or intense muscle spasms. Partial seizures happen when the disturbance occurs in only one part of the brain, affecting the physical or mental activity that area of the brain controls. Seizures may also begin as partial or focal seizures and then generalize.

NRI believes that its technology can be applied to the treatment of epilepsy with advantages over the currently available treatments for epilepsy. NRI’s proposed treatment uses gene-transfer technology to deliver genes which restore the chemical balance but only in the areas in which the disease process is occurring.

According to the Epilepsy Foundation (USA), epilepsy affects approximately 2.3 million Americans of all ages and backgrounds, making it one of the most common neurological diseases in this country. Approximately 181,000 new cases of seizures and epilepsy occur each year, with 76% of epileptic Americans below age 65. Despite treatment, 44% of people with epilepsy continue to have seizures.

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Patents and Other Proprietary Rights

NRI believes that its success will depend on its ability to protect its proprietary technology. NRI is actively pursuing a policy of seeking patent protection for its proprietary products and technologies which NRI believes are patentable and where NRI believes its interests are best served by seeking patent protection. NRI has exclusive licenses to 3 issued U.S. patents, 6 pending U.S. patent applications and 6 pending foreign patent applications. NRI also owns 1 issued patent and has 3 additional U.S. pending patent applications covering gene therapy technologies and 1 non-exclusive license to an issued patent covering delivery mechanisms for gene therapy.

NRI has entered into agreements with The Rockefeller University, Auckland UniServices, Ltd., Thomas Jefferson University and University Health Network (University of Toronto) to fund gene therapy research projects at these institutions. These agreements grant NRI a right of first refusal to obtain, upon commercially reasonable terms, exclusive license rights to any intellectual property developed in the course of the sponsored research projects. NRI relies on trade secrets, technical know-how and continuing technological innovation to develop and maintain its competitive position. NRI requires all of its employees and consultants to execute confidentiality and assignment of invention agreements. These agreements typically provide that (i) all materials and confidential information developed or made known to the individual during the course of the individual’s relationship with NRI is to be kept confidential and not disclosed to third parties except in specific circumstances and (ii) all inventions arising out of the relationship with NRI shall be NRI’s exclusive property. These agreements may not provide meaningful protection for NRI’s trade secrets in the event of unauthorized use or disclosure of NRI’s confidential information.

Manufacturing

For the current Phase I trial, NRI has entered into an agreement with Auckland UniServices, Ltd. for the production of AAV in bulk. This product is shipped to NRI’s US facility, where it is purified to final product form. Both facilities operate in general accordance with FDA guidelines for good laboratory practices (GLP), with standard operating procedures approved by the FDA as defined in the active Investigational New Drug Application #9994.

Competition

Although NRI is not aware of any other company currently conducting clinical trials of gene therapy products in humans to treat Parkinson’s disease or epilepsy, NRI faces intense competition from pharmaceutical companies, biotechnology companies, universities, governmental entities and other healthcare providers developing alternative treatments for these diseases. Alternative treatments include surgery, deep brain stimulator implants and the use of pharmaceuticals. NRI may face competition from companies and institutions involved in developing gene therapy and cell therapy treatments for other diseases, whose technologies may be adapted for the treatment of central nervous system disorders. Some companies, such as Avigen, Inc., Cell Genesys, Inc., and Targeted Genetics Corporation, have significant experience in developing and using AAV vectors to deliver gene therapy products.

Many of NRI’s competitors have significantly greater research and development capabilities than NRI, as well as substantial marketing, manufacturing, financial and managerial resources. Acquisitions of, or investments in, NRI’s competitors by larger companies, as well as competitors’ entry into collaborative relationships with large pharmaceutical companies and academic institutions, could increase NRI’s competitors’ financial, marketing, manufacturing and other resources. Developments by others may render NRI’s products or technologies noncompetitive or obsolete.

Government Regulation

The production and marketing of NRI’s proposed products and research and development activities are subject to extensive regulation for safety, efficacy and quality by numerous governmental authorities in the

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United States and potentially other foreign countries. In the United States, the FDA regulates, among other things, the testing, manufacturing, safety, efficacy, labeling, storage, record keeping, advertising and promotional practices and import and export of drugs and biological products.

In addition, in the event that NRI seeks to commercialize a product embodying technology covered by a patent that was exclusively licensed to NRI by an educational or other non-profit institution in the United States, NRI may be required to manufacture such product substantially in the United States, if the technology resulted from federally funded research.

Employees

As of the closing of the Merger on February 10, 2004, NRI had three full-time employees, including two research scientists with doctoral degrees. These research scientists have expertise in virology, protein chemistry and molecular biology. In addition to its research staff, NRI’s President, Dr. Martin J. Kaplitt (who is the father of Dr. Michael G. Kaplitt, one of the Company’ scientific founders) was employed on a part-time basis and Mark S. Hoffman was serving as NRI’s Secretary-Treasurer, without any compensation. Upon the closing of the Merger, Dr. Martin Kaplitt and Mr. Hoffman assumed the same positions with the Company.

NRI’s employees are not subject to any collective bargaining agreements and it regards its relations with its employees to be good.

Scientific Advisory Board

NRI has assembled a scientific advisory board that currently consists of five members. The scientific advisory board advises NRI on the selection, implementation and prioritization of its research programs. As at the closing of the Merger, NRI’s scientific advisory board consisted of the following individuals:

Dr. Paul Greengard, Scientific Advisory Board Chairman. Dr. Greengard has been a member and chairman of NRI’s scientific advisory board since July 2003. Dr. Greengard is the Vincent Astor Professor and Chairman of the Laboratory of Molecular and Cellular Neuroscience at The Rockefeller University. Dr. Greengard was awarded the 2000 Nobel Prize in Physiology or Medicine. Dr. Greengard received a Ph.D. in biophysics from Johns Hopkins University. Prior to joining The Rockefeller University in 1983, Dr. Greengard was the director of biochemical research at the Geigy Research Laboratories and subsequently Professor of Pharmacology and Professor of Psychiatry at the Yale University School of Medicine. Dr. Greengard is an elected member of the U.S. National Academy of Sciences and its Institute of Medicine and of the American Academy of Arts and Sciences. He is also a foreign member of the Royal Swedish Academy of Sciences and a member of the Norwegian Academy of Science and Letters.

Andrew Brooks, Ph.D., Scientific Advisory Board Member. Dr. Brooks has been a member of NRI’s scientific advisory board since January 2002. Dr. Brooks is currently the Director of the Center for Functional Genomics in the Aab Institute for Biomedical Science at the University of Rochester from which he also received his Ph.D.

Matthew J. During, M.D., Scientific Consultant, Scientific Advisory Board Member. Dr. During has been a member of NRI’s scientific advisory board since October 1999. He is currently Professor of Molecular Medicine and Pathology at the University of Auckland in New Zealand where he directs neuroscience and gene therapy programs. He also served as Director of the CNS Gene Therapy Center and Professor of Neurosurgery at Jefferson Medical College from 1998 through 2002. From 1989 through 1998, Dr. During was a faculty member at Yale University where he directed a program on the molecular basis of learning and memory and headed Yale’s first gene therapy protocol. Dr. During is a graduate of the University of Auckland School of Medicine and did further postgraduate training at M.I.T. from 1985 to 1987, Harvard Medical School from 1986 to 1989 and Yale from 1988 to 1989.

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Michael G. Kaplitt, M.D., Ph.D., Scientific Consultant, Scientific Advisory Board Member. Dr. Kaplitt has been a member of NRI’s scientific advisory board since October 1999. Dr. Kaplitt is Assistant Professor of Neurosurgery, Director of Stereotactic and Functional Neurosurgery and Director of the Laboratory of Molecular Neurosurgery at Weill Medical College of Cornell University. He is also a Clinical Assistant Attending, Division of Neurosurgery, Department of Surgery at Memorial-Sloan Kettering Cancer Center, and Adjunct Faculty, Laboratory of Neurobiology and Behavior at The Rockefeller University. Dr. Kaplitt graduated magna cum laude with a bachelor’s degree in molecular biology from Princeton University. He received his M.D. from Cornell University School of Medicine in 1995, where he completed his residency in Neurosurgery and a Ph.D. in molecular neurobiology from The Rockefeller University. Dr. Michael Kaplitt is the son of Dr. Martin Kaplitt, who is President and the Chairman of the Board of NRI and, upon the closing of the Merger, became the President and the Chairman of the Board of the Company and one of its principal stockholders.

Andres M. Lozano, M.D., Ph.D., Scientific Advisory Board Member. Dr. Lozano has been a member of NRI’s scientific advisory board since April 2001. He is currently Professor of Neurosurgery and holds the Ronald Tasker Chair in Stereotactic and Functional Neurosurgery at The University of Toronto. Dr. Lozano received his M.D. from the University of Ottawa and a Ph.D. from McGill University. He completed a residency in Neurosurgery at the Montreal Neurological Institute prior to joining the staff at the University of Toronto. Dr. Lozano is currently the Secretary of both the American Society for Stereotactic and Functional Neurosurgery and the World Society for Stereotactic and Functional Neurosurgery.

Risk Factors

The following sets forth some of the business risks and challenges facing NRI as it seeks to develop its business:

•     NRI is a development stage company with a limited operating history that makes it impossible to reliably predict future growth and operating results.

•     NRI has not demonstrated that it can:

•     If the pending Phase I clinical trial for treatment of Parkinson’s disease using NLX is unsuccessful, future operations and the potential for profitability will be significantly adversely affected and the business may not succeed.

•     NRI is still in the development stage and has not generated any revenues. From inception through December 31, 2003 it has incurred net losses and negative cash flows from operating activities of

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$5,837,000 and $4,905,000, respectively. Management believes that NRI will continue to incur net losses and cash flow deficiencies from operating activities for the foreseeable future. Because it may take years to develop, test and obtain regulatory approval for a gene-based therapy product before it can be sold, NRI likely will continue to incur significant losses for the foreseeable future. Accordingly, it may never be profitable and, if it does become profitable, it may be unable to sustain profitability.

•     Since the Company’s existing resources will not be sufficient to enable NRI to obtain the regulatory approvals necessary to commercialize its current or future product candidates, it will need to raise additional funds through public or private equity offerings, debt financings or additional corporate collaboration and licensing arrangements. Availability of financing depends upon a number of factors beyond the Company’s control, including market conditions and interest rates. The Company does not know whether additional financing will be available when needed, or if available, will be on acceptable or favorable terms to it or its stockholders.

•     NRI’s future success depends, to a significant degree, on the skills, experience and efforts of NRI’s current key physicians and researchers, including Dr. Matthew J. During and Dr. Michael G. Kaplitt. If either Dr. During or Dr. Kaplitt were unable or unwilling to continue present relationships with NRI, it is likely that NRI’s business, financial condition, operating results and future prospects would be materially adversely affected.

•     The industry in which NRI competes is subject to stringent regulation by a wide range of regulatory authorities. NRI may not obtain regulatory approval for any future product candidates it develops. To market a pharmaceutical product in the United States requires rigorous preclinical testing and clinical trials of the product must be completed and an extensive regulatory approval process implemented by the Food and Drug Administration, or FDA. To date, neither the FDA nor any other regulatory agency has approved a gene therapy product for sale in the United States. Satisfaction of regulatory requirements typically takes many years, is dependent upon the type, complexity and novelty of the product and requires the expenditure of substantial resources. NRI may encounter delays or rejections in the regulatory approval process resulting from additional governmental regulation or changes in FDA policy during the period of product development, clinical trials and FDA regulatory review.

•     Failure to comply with applicable FDA or other applicable regulatory requirements may result in criminal prosecution, civil penalties, recall or seizure of products, total or partial suspension of production or injunction, as well as other regulatory action against NRI’s future product candidates or NRI itself. Outside the United States, the ability to market a product is also contingent upon receiving clearances from appropriate foreign regulatory authorities. The non-U.S. regulatory approval process includes similar risks to those associated with FDA clearance.

•     NRI will need to conduct significant additional research and animal testing, referred to as preclinical testing, before clinical trials involving other future product candidates can be conducted. It may take many years to complete preclinical testing and clinical trials and failure could occur at any stage of testing. Acceptable results in early testing or trials may not be repeated in later tests. Whether any products in preclinical testing or early stage clinical trials will become approved products is unknown. Before applications can be filed with the FDA for product approval, it must be demonstrated that a particular future product candidate is safe and effective. NRI’s failure to adequately demonstrate the safety and efficacy of future product candidates would prevent the FDA from approving them. NRI’s product development costs will increase if it experiences delays in testing or regulatory approvals or if it becomes necessary to perform more or larger clinical trials than planned. If the delays are significant, they could negatively affect NRI’s financial results, ability to raise capital and the commercial prospects for future product candidates.

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•     NRI’s future success depends upon health care administrators and providers, patients and third-party payors’ (including, without limitation, health insurance companies, Medicaid and Medicare) acceptance of its products. Market acceptance will depend on numerous factors, many of which are outside the Company’s control, including:

•     Patient complications that may occur in gene-based clinical trials conducted by NRI and other companies and the resulting publicity surrounding them, as well as any other serious adverse events in the field of gene therapy that may occur in the future, may result in greater governmental regulation of future product candidates and potential regulatory delays relating to the testing or approval of them. Even with the requisite approval, the commercial success of NRI’s product candidates will depend in part on public acceptance of the use of gene therapies for the prevention or treatment of human disease. Public attitudes may be influenced by claims that gene therapy is unsafe, and gene therapy may not gain the acceptance of the public or the medical community. Negative public reaction to gene therapy could result in greater governmental regulation, stricter clinical trial oversight and commercial product labeling requirements of gene therapies and could negatively affect demand for any products NRI may develop.

•     Unanticipated side effects, patient discomfort, defects or unfavorable publicity concerning any of NRI’s future product candidates, or any other product incorporating technology similar to that used by future product candidates, could have a material adverse effect on NRI’s ability to commercialize its products or achieve market acceptance.

•     NRI does not have any experience in manufacturing products for commercial sale and if NRI is not successful in engaging a third-party to manufacture its products, no assurance can be provided that it will be able to:

•     NRI, or third-party manufacturers that it contracts with to manufacture any future product candidate, must receive FDA approval before producing clinical material or commercial products. NRI’s future product candidates may compete with other products for access to third-party manufacturing facilities and may be subject to delays in manufacture if third party manufacturers give priority to products other than NRI’s future product candidates. NRI may be unable to manufacture commercial-scale quantities of gene-based therapy products, or any quantities at all. Failure to successfully manufacture products in commercial-scale quantities, and on a timely basis, would prevent NRI from achieving its business objectives.

•     For the current Phase I trial, NRI relies on its supply agreement with Auckland UniServices, Ltd. in New Zealand for production of AAV in bulk form. This arrangement carries risks of shipment delays as well as other uncertainties associated with overseas manufacturing.

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•     Because of the complex and difficult legal and factual questions that relate to patent positions in NRI’s industry, no assurance can be provided that its future product candidates or technologies will not be found to infringe upon the intellectual property or proprietary rights of others. Third parties may claim that future product candidates or NRI’s technologies infringe on their patents, copyrights, trademarks or other proprietary rights and demand that it cease development or marketing of those products or technology or pay license fees. NRI may not be able to avoid costly patent infringement litigation, which will divert the attention of management and cash resources away from the development of new products and the operation of its business. No assurance can be provided that NRI would prevail in any such litigation. If NRI is found to have infringed on a third party’s intellectual property rights it may be liable for money damages, encounter significant delays in bringing products to market or be precluded from manufacturing particular future product candidates or using particular technology.

•     Clinical trials of future product candidates, and any subsequent sales of products employing NRI’s technology, may involve injuries to persons using those products as a result of mislabeling, misuse or product failure. Product liability insurance is expensive. Although NRI has purchased product liability insurance to cover claims made during the expected duration of the ongoing Phase I clinical trials, there can be no assurance that this insurance will be available to NRI in the future on satisfactory terms, if at all. A successful product liability claim or series of claims brought against NRI in excess of any insurance coverage that it may obtain in the future could have a material adverse effect on its business, financial condition, results of operations and future prospects.

•     NRI’s research and development processes may involve the use of hazardous materials, including chemicals and radioactive and biological materials. The risk of accidental contamination or discharge or any resultant injury from these materials cannot be completely eliminated. Federal, state and local laws and regulations govern the use, manufacture, storage, handling and disposal of these materials. NRI could be subject to civil damages in the event of an improper or unauthorized release of, or exposure of individuals to, such hazardous materials. In addition, claimants may sue NRI for injury or contamination that results from its use or the use by third parties of these materials and NRI’s liability may exceed its total assets. Compliance with environmental laws and regulations may be expensive and current or future environmental regulations may impair NRI’s research, development or production efforts.

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FORWARD LOOKING STATEMENTS

This document includes certain statements of the Company that may constitute “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, and which are made pursuant to the Private Securities Litigation Reform Act of 1995. These forward-looking statements and other information relating to the Company are based upon the beliefs of management and assumptions made by and information currently available to the Company. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events, or performance, as well as underlying assumptions and statements that are other than statements of historical fact. When used in this document, the words “expects,” “anticipates,” “estimates,” “plans,” “intends,” “projects,” “predicts,” “believes,” “may” or “should,” and similar expressions, are intended to identify forward-looking statements. These statements reflect the current view of the Company’s management with respect to future events and are subject to numerous risks, uncertainties, and assumptions. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements, including, among other things the factors recited under “Risk Factors” starting on Page 8 hereof.

Other factors and assumptions not identified above could also cause the actual results to differ materially from those set forth in the forward-looking statements. Although the Company believes these assumptions are reasonable, no assurance can be given that they will prove correct. Accordingly, you should not rely upon forward-looking statements as a prediction of actual results. Further, the Company undertakes no obligation to update forward-looking statements after the date they are made or to conform the statements to actual results or changes in the Company’s expectations.

Item 2. Properties

As of September 30, 2003, the Company’s lease for its office space at 537 Steamboat Road, Greenwich, Connecticut expired. From that date to the closing of the Merger, under a verbal understanding with a former subtenant, it maintained this location as its mailing address.

Effective with the closing of the Merger, the Company relocated its corporate offices to One Bridge Plaza, Fort Lee, New Jersey 07024. The Company currently uses these premises on a month-to-month basis under a verbal agreement with an affiliate that does not require the payment of rent.

NRI leases approximately 2,000 square feet of laboratory space in New York, New York. This lease, which provides for an aggregate annual rental payment of $43,620, expires on August 31, 2004.

Item 3. Legal Proceedings

None.

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

No matters were submitted to a vote of security holders during the fourth quarter of the year ended December 31, 2003. However, on February 9, 2004, a special meeting of stockholders was held to consider the Merger Agreement. In connection with the approval of the Merger Agreement, the stockholders also approved and adopted a proposal to amend the Company’s certificate of incorporation to increase the number of authorized shares of the Company’s common stock from 500,000,000 shares to 750,000,000 shares, (ii) decrease the par value of the Company’s common stock from $0.01 per share to $0.001 per share, (iii) change the Company’s name to “Neurologix, Inc.” and (iv) increase the size of the Company’s board of directors and divide the Company’s Board into three classes, with staggered three-year terms for each class.

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At such meeting, the results of the vote were as follows:

While the special meeting did not involve the election of directors, as a result of the Merger, Dr. Martin J. Kaplitt, Mark S. Hoffman and Clark Johnson, directors of NRI, became directors of the Company and Austin M. Long, III and Craig J. Nickels, pre-Merger directors of the Company, continued as directors. Mr. Johnson is a Class I director and his term expires at the next Annual Meeting of Stockholders, which is expected to be held in May 2004. Dr. Kaplitt and Mr. Hoffman are Class II directors and Messrs. Long and Nickels are Class III directors. The current term of the Class II directors expires at the 2005 Annual Meeting and the current term of the Class III directors expires at the 2006 Annual Meeting.

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PART II

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters

The Company had 462 stockholders of record as of April 6, 2004. The Company did not pay cash dividends during the three year period ended December 31, 2003 and does not intend to pay any cash dividends to stockholders in the foreseeable future.

Closing Market Price of the Company’s Common Stock, par value $.01 per share,

outstanding prior to the Merger

During 2003 and until the closing of the Merger on February 10, 2004, the Company’s common stock, par value $.01 per share, was listed on the OTC Bulletin Board and traded under the symbol CTPI. Under the terms of the Merger, holders of NRI’s stock at the effective time of the Merger received 385,210,329 shares of the Company’s post-Merger common stock, par value $.001. The shares issued to former NRI stockholders were registered with the SEC on a Form S-4. Following the Merger, the Company’s common stock trades on the OTC Bulletin Board under the symbol NLGX.

Company Equity Compensation Plans

The following table sets forth information as of December 31, 2003 regarding (i) the number of securities to be issued upon exercise of outstanding options, (ii) the weighted average exercise price of such outstanding options and (iii) the number of securities remaining available for future issuance under the Company’s 2000 Stock Option Plan, which was approved by the Company’s stockholders. The Company does not have any equity compensation plan that has not been approved by the Company’s stockholders.

Item 6. Selected Financial Data

The table below presents the Company’s selected historical financial data for the fiscal years ended December 31, 2003, 2002, 2001, 2000 and 1999. The selected historical financial data for the fiscal years ended December 31, 2000 and 1999 has been derived from audited financial statements not included in this report. The selected historical financial data for the fiscal years ended December 31, 2003, 2002 and 2001 has been derived from audited financial statements included elsewhere in this report. The audit opinion to the financial statements

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for the years ended December 31, 2002, 2001 and 2000 contains an explanatory paragraph that states that the Company adopted a plan of liquidation and dissolution which raises substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of that uncertainty. The audit opinion also contains an explanatory paragraph that refers to changes in the Company’s method of accounting for goodwill and other intangibles.

On June 30, 2003, the Company sold all of the issued and outstanding shares of Canned Interactive, which had been its sole source of operating revenues since December 2001. Accordingly, the operations of Canned Interactive for all periods presented have been reclassified into a one-line presentation and are included in “Income (loss) from discontinued operations.”

In light of the sale of Canned Interactive and the Merger, the historical data presented below is not indicative of future results. You should read this information in conjunction with the audited consolidated financial statements of both the Company and NRI, including the notes to those statements (Item 8), and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of both the Company and NRI (Item 7).

NEUROLOGIX, INC. AND SUBSIDIARIES

(F/K/A CHANGE TECHNOLOGY PARTNERS, INC.)

SELECTED FINANCIAL INFORMATION

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SUMMARY SELECTED HISTORICAL FINANCIAL DATA OF NRI

The following selected historical financial data as of December 31, 2003 and 2002, and for the fiscal years ended December 31, 2003, 2002, 2001 and 2000, have been derived from the audited financial statements of NRI, which were audited by J.H. Cohn LLP, NRI’s independent auditors. The following selected historical financial data as of December 31, 1999 and for the period from February 12, 1999 (date of inception) through December 31, 1999 is unaudited and has been derived from unaudited financial statements which, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of operations. You should read this information in conjunction with the audited financial statements of both NRI and the Company, including the notes to those statements (Item 8), and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of both NRI and the Company (Item 7).

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share amounts)

The following discussion should be read in conjunction with Company’s audited consolidated financial statements and accompanying notes for the fiscal year ended December 31, 2003. The Company’s fiscal year ends on the last day of December in each year. As used in this Item 7, references to 2003, 2002 and 2001 shall mean the Company’s fiscal year ended on December 31^st of such year. Certain other terms are defined in Item 1 above.

Overview and Recent Developments

During the year ended December 31, 2001, the Board voted to divest the Company of a majority of its then existing operations. On September 30, 2002, the Board adopted a plan of liquidation and dissolution in order to maximize stockholder value and noted that if no suitable business opportunities became available to it, subject to stockholder approval, it would commence liquidation in 2003. However, the plan permitted the Board to amend, modify or abandon the plan if it determined that doing so would be in the best interests of the Company and its stockholders.

On June 30, 2003, the Company completed the sale of all of its operating activities when it sold Canned Interactive to the Textor Family Limited Partnership. Canned Interactive, which designs and produces interactive media such as digital video discs (DVDs) and web sites, primarily for entertainment, consumer goods, sports and technology companies, was the Company’s sole source of operating revenues from December 2001 through June 30, 2003.

On June 18, 2003, the Company signed a letter of intent with NRI to merge CTP/N Merger Corp., a wholly-owned subsidiary of the Company, with and into NRI, with NRI surviving as a wholly-owned subsidiary of the Company. Pursuant thereto, on August 13, 2003, the Company entered into the Merger Agreement. The Merger was consummated on February 10, 2004.

As a result of the divestiture of Canned Interactive and the acquisition of NRI pursuant to the Merger, the Company’s results for 2003 are not indicative of the results to be expected for any future periods.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share amounts)

Critical Accounting Policies

Use of Estimates

The preparation of financial statements in conformity 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, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates embedded in the consolidated financial statements for the periods presented concern the allowances for doubtful accounts, the estimates used in the percentage of completion method, the fair value of purchased intangible assets, and the estimated useful lives of purchased intangible assets.

Purchased Intangible Assets

At December 31, 2001, purchased intangible assets, comprised primarily of the customer lists and the workforce acquired in connection with the acquisition of Canned Interactive, were being amortized over a period of 3 years, the estimated period of benefit considering the underlying contractual relationships, the project oriented continuing revenue stream, and analysis of the Company’s retention efforts.

Effective June 2001, the Company adopted Financial Accounting Standards Board Statement of Accounting Standards (SFAS) 141, “Business Combinations.” Effective January 1, 2002, the Company adopted SFAS 142, “Goodwill and Intangible Assets” and SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” SFAS 141 requires that acquisitions entered into after June 30, 2001 be accounted for using the purchase method and establishes criteria to be used in determining whether acquired intangible assets are to be separated from goodwill. At January 1, 2002, the intangible assets consisted of goodwill and the subsumed workforce acquired in connection with the acquisition of Canned Interactive. With respect to the sale of the Canned Interactive reporting unit in June 2003, goodwill totaling $1,782 was charged to loss on disposal of discontinued operations.

SFAS 142 sets forth the accounting for goodwill and intangible assets already recorded. Commencing January 1, 2002, goodwill is no longer being amortized into results of operations. Management conducted valuations of its reporting units in order to test goodwill for impairment by comparing the asset’s fair value to the carrying value. This analysis did not indicate impairment as of January 1, 2002.

Results of Operations

Year Ended December 31, 2003 Compared to Year Ended December 31, 2002

Revenues and Cost of Revenues. With the divestiture of Canned Interactive, all revenues and related costs of revenues are now included in discontinued operations.

Discontinued Operations. Revenues and net income from discontinued operations for 2003 and 2002 are as follows:

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share amounts)

General and Administrative Expenses. General and administrative expenses consist primarily of compensation and related benefits, professional service fees, facilities costs, advertising and promotional costs, and in 2003, merger related costs. General and administrative expenses decreased from $3,342 in 2002 to $2,976 in 2003. This decrease was primarily a result of the decreased rent expense associated with facilities abandoned in the second quarter of 2002 and the absence in 2003 of professional services fees incurred in 2002 in connection with the termination of a proposed merger with Franklin Capital Corporation.

Equity in Losses, and the Impairment of Investments, in Unconsolidated Affiliates. Equity in losses and impairment of investments in unconsolidated affiliates decreased from ($549) in 2002 to ($180) in 2003. Equity in losses and impairment of investments in unconsolidated affiliates is a result of the Company’s minority ownership in NetPro Holdings, Inc. (“NetPro”), LiveSky, Inc. (“LiveSky”) and InSys LLC (“InSys”) that have been accounted for under the equity method of accounting, and Alacra, Inc. (“Alacra”), which has been accounted for under the cost method of accounting. Under the equity method of accounting, the Company’s proportionate share, calculated on an as-if-converted basis, of the investee’s operating losses and amortization of the Company’s net excess investment over its equity in the investee’s net assets, is included in equity in losses and impairment of investments in unconsolidated affiliates. The following table summarizes such losses:

Impairment of investments in unconsolidated affiliates is a result of the cessation of NetPro’s and LiveSky’s operations in 2002. The Company evaluated the recoverability of its investments in light of the carrying values of these investments relative to future cash flows. As a result of this analysis, in 2002, the Company recorded impairment charges of $233 and $125, respectively, that reduced the remaining NetPro and LiveSky investment balances to $0.

For a discussion of the Company’s investments in NetPro, InSys, LiveSky and Alacra, see Notes 5 and 6 of the Notes to the Consolidated Financial Statements included in Item 8 herein.

Interest, Dividend and Other Income. Interest, dividend and other income decreased from $743 in 2002 to $132 in 2003. This decrease was primarily attributable to a reduction in the Company’s notes receivable as a result of repayment. In light of the Merger described in Item 1, interest income in 2004 is expected to decline as the Company’s cash resources are used to fund NRI’s business.

Income Taxes. As of December 31, 2003, the Company had available estimated net operating loss carryforwards for income tax purposes of approximately $24,325, which expire on various dates from 2004 through 2023. A full valuation allowance was established due to the uncertainty as to whether the Company would generate sufficient taxable earnings to utilize such available net operating loss carryforwards. It should be noted that following the Merger discussed in Item 1 above, the Company’s pre-merger net operating loss carryforwards will be substantially limited, if not completely eliminated, due to a lack of continuity of business enterprise under Section 382 of the Tax Reform Act of 1986.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share amounts)

Year Ended December 31, 2002 Compared to Year Ended December 31, 2001

Revenues and Cost of Revenues. With the divestiture of Canned Interactive, all revenues and related costs of revenues are now included in discontinued operations.

Discontinued Operations. Revenues and net income (loss) from discontinued operations for 2002 and 2001 are as follows:

General and Administrative Expenses. General and administrative expenses consist primarily of compensation and related benefits, professional services fees, facilities costs, and advertising and promotional costs. General and administrative expenses decreased from $12,894 for 2001 to $3,342 for 2002. This decrease was primarily a result of decreased compensation due to the decreased number of employees, decreased professional service fees, and decreases in other costs associated with the limited scope of operations over the prior year.

Impairment Losses. As a result of the terminations and divestitures of investments during 2001 (see Item 1 above), coupled with historical and projected operating and cash flow losses, the Company evaluated the recoverability of its acquired intangible assets and goodwill by comparison of the carrying values relative to related future cash flows. As a result of this analysis, the Company recorded impairment charges totaling $7,263 and $69 in the years ended December 31, 2001 and 2002, respectively, which are included in the “Impairment losses” in the Consolidated Statement of Operations.

Severance Costs. Severance costs were incurred as a result of the aforementioned terminations in 2001 and totaled $1,326 and $0 for the years ended December 31, 2001 and 2002, respectively.

Equity in Losses and Impairment of Investments in Unconsolidated Affiliates. Equity in losses of unconsolidated affiliates results from the Company’s minority ownership in Broadstream, Inc. (“Broadstream”), NetPro and InSys which are accounted for under the equity method of accounting. Under the equity method of accounting, the Company’s proportionate share, calculated on an as-if-converted basis, of the investee’s operating losses, and amortization of the Company’s net excess investment over its equity in the investee’s net assets, is included in equity in losses of unconsolidated affiliates. Impairment of investments in unconsolidated affiliates is a result of the cessation of NetPro’s and LiveSky’s operations in 2002. The Company evaluated the recoverability of its investments in light of the carrying values relative to future cash flows. As a result of this analysis, the Company recorded impairment charges that reduced the remaining investment balances to $0. Equity in losses and impairment of investments in unconsolidated affiliates was $5,546 for the year ended December 31, 2001 and $549 for the year ended December 31, 2002.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share amounts)

The following table summarizes such losses and impairments:

Interest, Dividend and Other Income. Interest and dividend income was $859 for the year ended December 31, 2001 and $743 for the year ended December 31, 2002. The decrease in interest and dividend income is attributable to a decrease in the Company’s invested cash balance as it has funded its ongoing operations and investments, partially offset by interest income earned on notes receivable.

Income Taxes. The Company had available estimated net operating loss carryforwards for income tax purposes of approximately $22,000 through the year ended December 31, 2002, which expire on various dates from 2002 through 2022. A valuation allowance was established due to the uncertainty as to whether the Company would generate sufficient taxable earnings to utilize the available net operating loss carryforwards. As mentioned above, following the Merger discussed in Item 1 above, the Company’s pre-merger net operating loss carryforwards will be substantially limited, if not completely eliminated, due to a lack of continuity of business enterprise under Section 382 of the Tax Reform Act of 1986.

Liquidity and Capital Resources

Historical Source of Funding. On March 28, 2000, an investor group led by Pangea Internet Advisors, LLC purchased 4,000,000 shares of the Company’s Series B convertible preferred stock for net proceeds to the Company of approximately $39,450 in cash. Also, on March 28, 2000, certain other investors purchased warrants to purchase 41,250,000 shares of the Company common stock for $100.

Working Capital and Results of Operations. The Company had $5,413 in cash and cash equivalents available as of December 31, 2003, invested predominantly in instruments that are highly liquid, investment grade securities that have maturities of less than 45 days. Beginning in the third quarter of 2001, in response to continued unfavorable market conditions for its services, the Company embarked on a review of its operations with the goal of formulating a course of action to minimize near term losses, capital expenditures and reduce cash outflows. With the sale of Canned Interactive on June 30, 2003, the Company does not have any revenue generating operations and has been able to significantly reduce its fixed expenses. From June 17, 2003 to the completion of the Merger, its only employee was its Chief Executive Officer. During 2003, the Company used $1,720 in operating activities.

Funding Required for NRI’s Operations. As discussed in Item 1, as a result of the closing of the Merger on February 10, 2004, NRI has become a wholly-owned subsidiary of the Company. NRI is involved in developing treatments for disorders of the brain and central nervous system using gene therapy and other innovative therapies. These treatments are designed as alternatives to conventional surgical and pharmacological treatments.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share amounts)

NRI is still in the development stage and has not generated any revenues. As a result, it has incurred total net losses and aggregate negative cash flows from operating activities from inception to December 31, 2003 of $5,837 and $4,905, respectively.

Management believes that NRI will continue to incur net losses and cash flow deficiencies from operating activities for the foreseeable future. Since the Company’s existing resources will not be sufficient to enable it to obtain the regulatory approvals necessary to commercialize its current or future product candidates, the Company will need to raise additional funds through public or private equity offerings, debt financings or additional corporate collaboration and licensing arrangements. The Company does not know whether additional financing will be available when needed, or if available, will be on acceptable or favorable terms to it or its stockholders.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations of NRI

The following discussion should be read in conjunction with the audited financial statements and accompanying notes of NRI for the fiscal year ended December 31, 2003. NRI’s fiscal year ends on the last day of December in each year. As used in this Item 7, references to 2003, 2002 and 2001 shall mean NRI’s fiscal year ended on December 31^st of such year. Certain other terms are defined in Item 1 above.

Overview

NRI is a development stage company, involved in the development of proprietary gene therapies for the treatment of disorders of the brain and central nervous system. On February 10, 2004, pursuant to the Merger described in Item 1 above, NRI became a wholly-owned subsidiary of the Company.

As discussed in Item 1, as a result of the closing of the Merger on February 10, 2004, NRI has become a wholly-owned subsidiary of the Company. NRI is involved in developing treatments for disorders of the brain and central nervous system using gene therapy and other innovative therapies. These treatments are designed as alternatives to conventional surgical and pharmacological treatments. NRI is still in the development stage and has not generated any revenues. As a result, it has incurred total net losses and aggregate negative cash flows from operating activities from inception to December 31, 2003 of $5,837 and 4,905, respectively.

Management believes that NRI will continue to incur net losses and cash flow deficiencies from operating activities for the foreseeable future. Since the Company’s existing resources will not be sufficient to enable it to obtain the regulatory approvals necessary to commercialize its current or future product candidates, the Company will need to raise additional funds through public or private equity offerings, debt financings or additional corporate collaboration and licensing arrangements. The Company does not know whether additional financing will be available when needed, or if available, will be on acceptable or favorable terms to it or its stockholders.

Critical Accounting Policies

Use of Estimates

NRI’s preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires its management to make estimates and assumptions that affect its reported amounts of assets and liabilities, its disclosure of contingent assets and liabilities at the date of the financial statements and its reported amounts of revenues and expenses during the reporting period. NRI’s actual results could differ from those estimates.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share amounts)

Carrying Value of Fixed and Intangible Assets

NRI’s fixed assets and certain of its patents have been recorded at cost and are being amortized on a straight-line basis over the estimated useful lives of those assets. If NRI becomes aware of facts that indicate one or more of those assets may be impaired, NRI assesses whether the carrying value of such assets can be recovered through undiscounted future operating cash flows. If NRI determines that an asset is impaired, NRI measures the amount of such impairment by comparing the carrying value of the asset to the present value of the expected future cash flows associated with the use of the asset. Adverse changes to NRI’s estimates of the future cash flows to be received from a particular long-lived asset could indicate that the asset is impaired, and would require NRI to write down the asset’s carrying value at that time.

Fair Value of Equity Instruments

NRI follows Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”), which allows companies either to expense the estimated fair value of stock options or to continue to follow the intrinsic value method set forth in Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”), which requires disclosure of the pro forma effect on net income (loss) as if the fair value of options had been expensed. NRI has elected to apply APB 25 in accounting for its employee stock option incentive plan. NRI has used the minimum value method as permitted by SFAS 123 to estimate the fair value of options granted to employees for such pro forma disclosures.

In accordance with SFAS 123, all other issuances of common stock, stock options or other equity instruments issued to employees and non-employees as consideration for goods or services received by NRI are accounted for based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more readily measurable. Such fair value is measured at an appropriate date pursuant to the guidance in the consensus reached for EITF Issue No. 96-18 (generally, the earlier of the date the other party becomes committed to provide goods or services or the date the performance by the other party is complete) and capitalized or expensed as if NRI had paid cash for the goods or services.

Neurologix uses the minimum value method for purposes of determining the pro forma and historical fair values of options granted to employees and non-employees during the years ended December 31, 2003, 2002 and 2001.

Valuation of Deferred Tax Assets

NRI regularly evaluates its ability to recover the reported amount of its deferred income taxes considering several factors, including its estimate of the likelihood that it will generate sufficient taxable income in future years in which temporary differences reverse. Due to the uncertainties related to, among other things, the extent and timing of future taxable income and the potential changes in the ownership of NRI, which could subject its net operating loss carryforwards to substantial annual limitations, NRI offset its net deferred tax assets by an equivalent valuation allowance as of December 31, 2002 and 2003.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands, except share and per share amounts)

Results of Operations—NRI

Year Ended December 31, 2003 Compared to the Year Ended December 31, 2002

Revenues. NRI did not generate revenues in 2003 and 2002.

Costs and Expenses.

Research, Licensing and Scientific Consulting. Research, licensing and scientific consulting expenses were $1,270 during 2003, and $727 during 2002. The 75% increase in research, licensing and scientific consulting expenses in 2003 was attributable primarily to costs associated with Phase 1 clinical trials for Parkinson’s disease which commenced in August 2003 and compensation and related expenses paid to the three scientists NRI hired in October 2002 for its laboratory in Newark, Delaware. The remaining research, licensing and scientific consulting expenses consisted of licensing fees and royalties NRI paid under licensing agreements with academic and medical institutions as well as consulting fees NRI paid to members of its scientific advisory board.

General and Administrative. General and administrative expenses aggregated $886 in 2003, as compared to $486 in 2002. This 82% increase in 2003 was due primarily to rent associated with NRI’s establishment of a laboratory in Newark, Delaware, and associated office costs, increased travel and depreciation expense as well as professional service fees.

Interest and Dividend Income and Interest Expense. Interest and dividend income was $16 in 2003 as compared to $21 in 2002. Interest expense, primarily to related parties, was $134 in 2003 and $118 in 2002. This 14% increase in interest expense in 2003 was principally attributable to interest on NRI’s loans from the Company ($750,000 in August 2003 and $350,000 in December 2003).

Year Ended December 31, 2002 Compared to the Year Ended December 31, 2001

Revenues. NRI did not generate any revenues in 2002 or 2001.

Costs and Expenses.

Research, Licensing and Scientific Consulting. Research, licensing and scientific consulting expenses were $727 in 2002 and $529 in 2001. The 37% increase in cash expenses in 2002 compared to 2001 was primarily attributable to an increase in scientific consulting fees paid to members of the scientific advisory board, as well as compensation and related expenses that NRI incurred in hiring the three scientists in October 2002 for its laboratory in Newark, Delaware.

General and Administrative. General and administrative expenses were $486 in 2002 and $246 in 2001. This 97% increase in general and administrative expenses in 2002 was due to the rent expenses incurred as a result of NRI establishing a laboratory in Delaware in October 2002, and associated office costs, increased depreciation expenses as well as approximately $84 of additional legal and other professional fees.

Interest and Dividend Income and Interest Expense. Interest income was $21 in 2002. NRI had no interest income in 2001. This difference was due to the interest earned on the proceeds of the sale of NRI’s Series B convertible preferred stock in February and March 2002. Interest expense was $118 in 2002 and $96 in 2001. The 23% increase in interest expense during 2002 was attributable to the higher average outstanding balance of the existing NRI Note on which interest accrued during 2002 compared to 2001.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued)

(In thousands, except share and per share amounts)

Contractual Obligations

As of December 31, 2003, NRI’s material future contractual obligations were as follows:

Item 7A. Quantitative and Qualitative Disclosure About Market Risk

The Company’s primary objective in investing financial instruments is to preserve principal, pending current operational requirements, while at the same time maximizing yields without significantly increasing risk. To achieve this objective, the Company maintains a portfolio of cash, cash equivalents and money market funds. As of December 31, 2003, the Company had an investment being held to maturity of $5,250,000 which consists of a Certificate of Deposit with a maturity of 30 days. This highly liquid investment is subject to interest rate and interest income risk and will decrease in value if market interest rates increase. Because the Company has the positive intent and ability to hold this investment until maturity, it does not expect any decline in value of its investments caused by market interest rate changes. Declines in interest rates over time will, however, reduce the Company’s interest income. The Company has no derivative instruments, debt, or foreign operations. The Company does not use derivative financial instruments in its investment portfolio.

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Item 8. Financial Statements and Supplementary Data

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors and Stockholders

Neurologix, Inc.

We have audited the accompanying consolidated balance sheet of Neurologix, Inc. (formerly Change Technology Partners, Inc.) and Subsidiaries as of December 31, 2003, and the related consolidated statements of operations, stockholders’ equity and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Neurologix, Inc. (formerly Change Technology Partners, Inc.) and Subsidiaries as of December 31, 2003, and their results of operations and cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/    J. H. COHN LLP

Roseland, New Jersey

March 13, 2004

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REPORT OF KPMG LLP, INDEPENDENT ACCOUNTANTS

The Board of Directors and Stockholders of Neurologix, Inc.

We have audited the accompanying consolidated balance sheets of Neurologix, Inc. (formerly Change Technology Partners, Inc.) and subsidiaries (the “Company”) as of December 31, 2002 and the related consolidated statements of operations, stockholders’ equity and redeemable preferred stock, and cash flows for each of the years in the two-year period ended December 31, 2002. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Neurologix, Inc. (formerly Change Technology Partners, Inc.) and subsidiaries as of December 31, 2002 and the results of its operations and cash flows for each of the years in the two-year period ended December 31, 2002 in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 2 to the consolidated financial statements, in 2002 the Company changed its method of accounting for goodwill and other intangible assets.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company adopted a plan of liquidation and dissolution that raises substantial doubt about its ability to continue as a going concern. The Company’s plans with regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might arise from the outcome of this uncertainty.

KPMG LLP

New York, New York

March 27, 2003

27

NEUROLOGIX, INC. AND SUBSIDIARIES

(formerly Change Technology Partners, Inc.)

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

See accompanying notes to consolidated financial statements.

28

NEUROLOGIX, INC. AND SUBSIDIARIES

(formerly Change Technology Partners, Inc.)

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share amounts)

See accompanying notes to consolidated financial statements.

29

NEUROLOGIX, INC. AND SUBSIDIARIES

(formerly Change Technology Partners, Inc.)

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

(In thousands except share and per share amounts)