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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 2054

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2005

o TRANSITION REPORTS PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from_________________ to ________________

COMMISSION FILE NUMBER: 0-25169
 
 
 GENEREX BIOTECHNOLOGY CORPORATION
  
 
 (Exact name of registrant as specified in its charter)
  
     
     
 Delaware
  
 98-0178636
 (State or other jurisdiction of
  
  (IRS Employer
 incorporation or organization)
  
 Identification No.)
     
 
 33 HARBOUR SQUARE, SUITE 202
  
 
 TORONTO, ONTARIO
  
 
 CANADA M5J 2G2
  
 
 (Address of principal executive offices)
  
 
 
  
     
 
 416/364-2551
  
 
 (Registrant's telephone number, including area code)
  
     
     
 
 Not applicable
  
 
 (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 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. x] Yes o No

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

APPLICABLE ONLY TO CORPORATE ISSUERS
The number of outstanding shares of the registrant's common stock, par value $.001, was 39,790,346 as of June 14, 2005.
 
GENEREX BIOTECHNOLOGY CORPORATION

INDEX
PART I: FINANCIAL INFORMATION

     
Item 1.
Consolidated Financial Statements - unaudited
 3 
     
 
Consolidated Balance Sheets -
 3 
 
April 30, 2005 and July 31, 2004
  
     
 
Consolidated Statements of Operations -- for the three and nine month
 4 
 
periods ended April 30, 2005 and 2004, and cumulative from
  
 
November 2, 1995 to April 30, 2005
  
     
 
Consolidated Statements of Cash Flows -- For the nine month
 5 
 
periods ended April 30, 2005 and 2004, and cumulative from
  
 
November 2, 1995 to April 30, 2005
  
     
 
Notes to Consolidated Financial Statements
 6 
     
Item 2.
Management's Discussion and Analysis of Financial
 19 
 
Condition and Results of Operations
  
     
Item 3.
Quantitative and Qualitative Disclosures
 40 
 
About Market Risk
  
     
Item 4.
Controls and Procedures
 40 
     
PART II: OTHER INFORMATION
  
     
Item 1.
Legal Proceedings
 41 
     
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
 41 
     
Item 3.
Defaults Upon Senior Securities
 43 
     
Item 4.
Submission of Matters to a Vote of Security Holders
 44 
     
Item 5.
Other Information
 46 
     
Item 6.
Exhibits
 47 
     
Signatures
   54 

 
2
Item 1. Consolidated Financial Statements

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES
  
(A DEVELOPMENT STAGE COMPANY)
  
CONSOLIDATED BALANCE SHEETS
  
               
               
 
    
April 30,
    
July 31,
  
     
2005
    
2004
  
ASSETS 
              
Current Assets:
              
Cash and cash equivalents
  
$
435,874
  
$
4,950,419
  
Restricted cash
    
226,179
   
206,421
 
Other current assets
    
154,089
   
870,934
 
Deferred debt issuance costs
    
233,982
   
--
 
Total Current Assets 
    
1,050,124
   
6,027,774
 
               
               
Property and Equipment, Net
    
4,049,701
   
4,291,622
 
Assets Held for Investment, Net
    
2,323,618
   
2,250,506
 
Patents, Net
    
5,580,725
   
5,696,905
 
Deposits
    
--
   
395,889
 
Due From Related Party
    
369,026
   
349,294
 
               
TOTAL ASSETS 
  
$
13,373,194
  
$
19,011,990
  
               
               
LIABILITIES AND STOCKHOLDERS’ EQUITY 
              
               
Current Liabilities:
              
Accounts payable and accrued expenses
  
$
2,725,969
  
$
1,947,399
  
Short-term advance
    
325,179
   
--
 
Current maturities of long-term debt
    
1,870,811
   
1,366,122
 
Convertible Debentures, Net of Debt Discount of $1,993,735 and
             
$-0- at April 30, 2005 and July 31, 2004, respectively
    
1,539,688
   
--
 
Total Current Liabilities 
    
6,461,647
   
3,313,521
 
               
Long-Term Debt, Less Current Maturities
    
948,982
   
858,661
 
               
Commitments and Contingencies
              
               
Series A, Preferred stock, $.001 par value; authorized
              
1,000,000 shares, stated at redemption value, -0- and 1,191
              
shares issued and outstanding at April 30, 2005 and
             
July 31, 2004
    
--
   
14,310,057
 
               
Stockholders’ Equity:
              
Special Voting Rights Preferred stock, $.001 par value;
             
authorized, issued and outstanding 1,000 shares at
              
April 30, 2005 and July 31, 2004
    
1
   
1
 
Common stock, $.001 par value; authorized 150,000,000 shares
              
at April 30, 2005 and July 31, 2004, 37,831,446 and
              
34,262,448 shares issued and outstanding at
              
April 30, 2005 and July 31, 2004, respectively
    
37,833
   
34,264
 
Additional paid-in capital
    
119,598,392
   
97,110,291
 
Notes receivable - common stock
    
--
   
(384,803
)
Deficit accumulated during the development stage
    
(114,179,253
)
  
(96,526,373
)
Accumulated other comprehensive income
    
505,592
   
296,371
 
Total Stockholders’ Equity 
    
5,962,565
   
529,751
 
               
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 
  
$
13,373,194
  
$
19,011,990
  
               
 
The Notes to Consolidated Financial Statements are an integral part of these statements.
 
3

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
                                 
 
                            
Cumulative From
  
 
                            
November 2, 1995
  
 
  
For the Three Months Ended
  
For the Nine Months Ended
    
(Date of Inception)
 
  
April 30,
  
April 30,
    
to April 30,
  
   
 2005
  
 2004
  
 2005
  
 2004
  
 2005
  
                                 
Revenues
  
$
43,750
  
$
235,129
  
$
263,250
  
$
420,693
  
$
1,890,434
  
                                 
Operating Expenses:
                                
Research and development
    
1,009,799
   
2,393,167
   
6,586,764
   
5,378,284
   
53,754,478
 
Research and development - related party
    
--
   
--
   
--
   
--
   
220,218
 
General and administrative
    
2,358,472
   
2,750,055
   
9,231,266
   
8,487,814
   
63,482,578