Unassociated Document

Rose C. Perri. Director since September 1997. Ms. Perri has served as Treasurer of Generex since October 1997 and as Chief Operating Officer since August 1998. She served as Acting Chief Financial Officer from November 2002 until April 2005 when she was appointed Chief Financial Officer. Ms. Perri held the position of Secretary from October 1997 until September 29, 2010. She was an officer of Generex Pharmaceuticals Inc. from its formation in 1995 until its acquisition by Generex in October 1997. Along with Ms. Gluskin, Ms. Perri is one of the founders of Generex.

Gerald Bernstein, M.D. has served as Vice President Medical Affairs of Generex since October 2001. He served as a Director of Generex from October 2002 to May 2008. Dr. Bernstein acts as a key liaison for Generex on medical and scientific affairs to the medical, scientific and financial communities and consults with Generex under a consulting agreement on research and medical affairs and on development activities. Dr. Bernstein is an associate clinical professor at the Albert Einstein College of Medicine in New York and an attending physician at Beth Israel Medical Center, Lenox Hill Hospital and Montefore Medical Center, all in New York. He was president of the American Diabetes Association from 1998 to 1999. Dr. Bernstein has written and lectured extensively on various topics concerning diabetes. Dr. Bernstein holds a BA degree from Dartmouth College in biology and a medical degree from Tufts University School of Medicine.

Other Key Employees and Consultants

Stephen Fellows has served as our Vice President, Finance since June 2009. From August 2005 to December 2008, Mr. Fellows was employed by Sona Mobile Holdings Corporation, a publicly held software company which developed software applications for mobile devices, where he served as Chief Financial Officer. From September 1996 to August 2005, Mr. Fellows worked at 3Com Corporation, where he served in several positions including as the Director of Finance of the corporate accounting group in Marlborough, MA and Director of Finance & Operations of 3Com’s Canadian subsidiary. From January 1992 to August 1996, Mr. Fellows worked at Pennzoil Corporation where he spent time in the international mergers and acquisitions group in Houston, Texas, as well as four years as Controller for Pennzoil Canada. Mr. Fellows received a Bachelor of Business Administration degree from Wilfrid Laurier University in 1988 and earned his Chartered Accountants designation while articling with Arthur Andersen & Company in Toronto in 1990.

Slava Jarnitskii has been our Financial Controller since 1997. He began his employment with Generex Pharmaceuticals in September 1996 and has been in the employment of Generex since its acquisition of Generex Pharmaceuticals in October 1997. Before his employment with Generex Pharmaceuticals, Mr. Jarnitskii received a Masters of International Business Administration degree from Schulich School of Business in September 1996.

Eric von Hofe, Ph.D., is currently President of Antigen. He has extensive experience with technology development projects, including his previous position at Millennium Pharmaceuticals as Director of Programs & Operations, Discovery Research. Prior to that, Dr. von Hofe was Director, New Targets at Hybridon, Inc., where he coordinated in-house and collaborative research that critically validated gene targets for novel antisense medicines. Dr. von Hofe also held the position of Assistant Professor of Pharmacology at the University of Massachusetts Medical School, where he received a National Cancer Institute Career Development Award for defining mechanisms by which alkylating carcinogens create cancers. He received his Ph.D. from the University of Southern California in Experimental Pathology and was a postdoctoral fellow at both the University of Zurich and Harvard School of Public Health. His work has been published in forth-three articles in peer-reviewed journals, and he has been an inventor on four patents.

Dr. Minzhen Xu is Vice President - Biology of Antigen. Dr. Xu received an M.D. from Shanghai Medical University in China and a Ph.D. in immunology from University of Massachusetts Medical School. He has been with Antigen since its inception and is the company’s chief experimentalist.

William D. Abajian is a Business Development Consultant. Mr. Abajian has served in senior management and executive positions with various businesses throughout the past twenty-five years where he played pivotal roles in the development and launches of a number of pharmaceutical and device products. In 1988 he founded CPG Inc. in Lincoln Park, New Jersey where he served as Chief Executive Officer until 2002. CPG Inc. invented, manufactured and sold DNA Synthesis products, chromatography media’s and molecular biology kits to researchers in over 40 countries worldwide. This privately-held company was sold to Millipore Corporation in 2002. Prior to running his own company Mr. Abajian served as the Vice President of Sales and Marketing at Electro Nucleonics Inc. in Fairfield, New Jersey between 1981 and 1988. Electro Nucleonics Inc. invented, manufactured and sold blood chemistry systems and diagnostic kits worldwide. The company also launched the first FDA approved AIDS test. At Electro Nucleonics Mr. Abajian was responsible for procuring $50 million of hospital instrumentation sales, opened up the veterinarian market for the company and was key to brokering a deal that required all Armed Forces and The American Red Cross to purchase all HIV tests from the company. The organization included five regional managers, 45 sales representatives and 20 technical representatives. In 2004, he founded The Abajian Group LLC, a company that advises CEOs on strategic planning and assists in the commercialization of technologies and sales and marketing. He continues to serve as a trustee of Eva’s Village, a non-for-profit organization in Paterson, New Jersey, and of St. Joseph’s Hospital in Paterson, New Jersey, where he previously held the positions of Chairman of the OPEC Committee and a member of the hospital’s Finance and Pension Committee and the Executive Committee.

George Markus is Manager of Regulatory Affairs. Mr. Markus holds a B.Sc. (Honours) in theoretical chemistry from Dalhousie University and a M.Sc. in analytical chemistry from McGill University. He is an instructor at the Academy of Applied Pharmaceutical Sciences in Toronto, Canada. In his more than twenty years in the industry, he has been President & Chief Executive Officer of Consolidated Clinical Research of Canada Inc., a site management organization (SMO) that manages the coordination of clinical research sites, and has worked in Quality Assurance / Special Projects / Clinical Operations and as a Director, Regulatory Affairs for Dimethaid Research Inc. Mr. Markus has also held regulatory affairs positions with Pasteur Merieux Connaught, Biovail Corporation International, Sanofi Winthrop, Genpharm Inc. Pharmaceuticals, and Sandoz Canada Inc.

Dr. Jaime Davidson, MD, FACP, FACE was appointed a consultant Medical Director for Generex in July, 2006. Dr. Davidson is the President of Endocrine and Diabetes Associates of Texas, based at the Medical City Dallas Hospital complex, and a Clinical Associate Professor of Internal Medicine at University of Texas Southwestern Medical Center in Dallas, Texas. Dr. Davidson chaired the Diabetes Consensus Guidelines for the American College of Endocrinology and serves as Director of the Annual Intensive Diabetes, Endocrinology and Metabolic Diseases Course for the University of Southern California Keck School of Medicine. He serves as a council member for the Texas Department of Health Services, appointed by Texas Governor Rick Perry. In 2006 Dr. Davidson was distinguished by the American Association of Clinical Endocrinologists with an award for his contributions to the improvement of endocrine health for under-served populations, and by the American Diabetes Association with the Harold Rifkin MD award for his international contributions in the diabetes field. In the past, he has held positions with the National Diabetes Advisory Board, the National Institutes of Health, the Centers for Disease Control, the Institute of Medicine, and the boards of directors of the American Diabetes Association, the American Association of Clinical Endocrinologists, and the American College of Endocrinology. He served in higher education for a six year term as a Regent of Midwestern State University in Texas appointed by then Governor George W. Bush. He has also served in the President's Council for Fitness and Sports, chaired the Texas Diabetes Council of the Texas Department of Health for several years where he instituted the Texas Diabetes Algorithm, and under his guidance the Texas Diabetes Institute was established with the University of Texas Health Science Center in San Antonio, Texas. Dr. Davidson's experience in clinical pharmacology began with a Clinical Pharmacology Fellowship at Lilly Laboratories for Clinical Research and it continued with multiple clinical trials. In addition, he was an advisor to the Food and Drug Administration (FDA) on the Endocrinology and Metabolism Advisory Board. Dr. Davidson's Internal Medicine training was completed at Scott and White Hospital (now known as Texas A&M University) and his Endocrinology training at University Of Indiana.

Item 5.

Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

Our common stock has been listed on the NASDAQ Capital Market (formerly the NASDAQ SmallCap Market) since June 5, 2003. On May 5, 2010, we received a delisting determination from the staff of The NASDAQ Stock Market due to our failure to regain compliance with The NASDAQ Capital Market's minimum bid price requirement for continued listing. We appealed, and, on September 14, 2010, the NASDAQ Hearings Panel granted our further request for continued listing, subject to certain conditions. These conditions of the Hearings Panel and the proposal for a reverse stock split in a ratio sufficient to meet the $1.00 bid price requirement for continued listing to be considered by stockholders at the Special Meeting on October 15, 2010 are described in more detail under Part I, Item 1A – Risk Factors - Risks Related to the Market for Our Common Stock - Our common stock could be delisted from The NASDAQ Capital Market if we do not succeed in the appeal of the NASDAQ Staff’s May 6, 2010 delisting determination. From May 5, 2000 to June 4, 2003, our common stock was listed on the NASDAQ National Market. From February 1998 to May 2000, the "bid" and "asked" prices for our common stock were quoted on the OTC Bulletin Board operated by the National Association of Securities Dealers. Prior to February 1998, there was no public market for our common stock.

The table below also sets forth the high and low sales prices for our common stock reported on the NASDAQ Capital Market for each fiscal quarter in the prior two years ended July 31, 2010.

	Bid Prices
	High		Low

Fiscal 2009
First Quarter	$	0.80		0.26
Second Quarter	$	0.67		0.30
Third Quarter	$	0.70		0.08
Fourth Quarter	$	1.14		0.35

Fiscal 2010
First Quarter	$	1.01	$	0.51
Second Quarter	$	0.73	$	0.45
Third Quarter	$	0.70	$	0.36
Fourth Quarter	$	0.47	$	0.31

The closing trading price for our common stock reported on October 12, 2010 was $0.454.

As of October 12, 2010, there were approximately 662 holders of record of our common stock. Record holders do not include owners whose shares are held in street name by a broker or other nominee.

Dividends

We have not paid dividends on our common stock in the past and have no present intention of paying dividends in the foreseeable future.

Stock Performance Graph

The following information under this heading “Stock Performance Graph” in this Part II, Item 5 of this Annual Report on Form 10-K is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under the Exchange Act, or to the liabilities of Section 18 of the Exchange Act, and will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent we specifically incorporate it by reference into such a filing.

Set forth below is a line graph comparing the cumulative total return on Generex's common stock with cumulative total returns of the NASDAQ Composite Index and the NASDAQ Biotechnology Index for the period commencing July 31, 2005 and ending on July 31, 2010. The comparison assumes the investment of $100 on July 31, 2005 in our common stock and in each of the indices and, in each case, assumes reinvestment of all dividends. The stock price performance shown below is not necessarily indicative of future performance.

Sales of Unregistered Securities

In addition to our sales of unregistered securities disclosed in our Quarterly Reports on Form 10-Q, we have issued the securities in reliance upon Section 4(2) of the Securities Act as follows in the fiscal quarter ended July 31, 2010.

During the three months ended July 31, 2010, we issued 12,000 shares of common stock to American Capital Ventures, Inc. pursuant to an agreement with us for financial services. The sale of such shares was exempt from registration under the Securities Act in reliance upon Section 4(2) thereof. We believe that American Capital Ventures, Inc. is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D under the Securities Act. The certificates issued for the shares of common stock will include a legend to indicate that they are restricted. The sales of such securities did not involve the use of underwriters, and no commissions were paid in connection therewith.

During the three months ended July 31, 2010, we issued 37,500 shares of our restricted common stock as partial consideration for the provision of services by The Abajian Group, LLC under a consulting agreement with us. William Abajian, a Business Development Consultant to Generex, is a principal of The Abajian Group, LLC. The sale of such shares was exempt from registration under the Securities Act in reliance upon Section 4(2) thereof. We believe that The Abajian Group, LLC is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D under the Securities Act. The certificates issued for the shares of common stock will include a legend to indicate that they are restricted. The sales of such securities did not involve the use of underwriters, and no commissions were paid in connection therewith.

We have issued shares of our common stock to Forman Foresight, LLC, a consultant, pursuant to an agreement to provide us with investor relation services. During the three months ended July 31, 2010, we issued 10,000 shares of common stock to Forman Foresight, LLC pursuant to this agreement. The sale of such shares was exempt from registration under the Securities Act in reliance upon Section 4(2) thereof. We believe that Forman Foresight, LLC is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D under the Securities Act. The certificates issued for the shares of common stock included a legend to indicate that they are restricted. The sales of such securities did not involve the use of underwriters, and no commissions were paid in connection therewith.

We have issued shares of our common stock to Seahawk Capital Partners, Inc, a consultant, pursuant to an agreement to provide us with investor relation services until October 11, 2010. During the three months ended July 31, 2010, we issued 180,000 shares of common stock to Seahawk Capital Partners pursuant to this agreement. The sale of such shares was exempt from registration under the Securities Act in reliance upon Section 4(2) thereof. We believe that Seahawk Capital Partners is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D under the Securities Act. The certificates issued for the shares of common stock included a legend to indicate that they are restricted. The sales of such securities did not involve the use of underwriters, and no commissions were paid in connection therewith.

We have issued shares of our common stock to Beckerman Public Relations, a consultant, pursuant to an agreement to provide us with investor relation services. During the three months ended July 31, 2010, we issued 50,049 shares of common stock to Beckerman Public Relations. The sale of such shares was exempt from registration under the Securities Act in reliance upon Section 4(2) thereof. We believe that Beckerman Public Relations is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D under the Securities Act. The certificates issued for the shares of common stock will include a legend to indicate that they are restricted. The sales of such securities did not involve the use of underwriters, and no commissions were paid in connection therewith.

We have issued shares of our common stock to Health Management Resources, Inc., a consultant, pursuant to an agreement to provide us with consulting services until January 1, 2011. During the three months ended July 31, 2010, we issued 54,545 shares of common stock to Health Management Resources. The sale of such shares was exempt from registration under the Securities Act in reliance upon Section 4(2) thereof. We believe that Health Management Resources, Inc is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D under the Securities Act. The certificates issued for the shares of common stock will include a legend to indicate that they are restricted. The sales of such securities did not involve the use of underwriters, and no commissions were paid in connection therewith.

Issuer Purchases of Equity Securities

Neither we nor any affiliated purchaser (as defined in Section 240.10 b-18(a)(3) of the Exchange Act) purchased any of our equity securities during the fourth quarter of the fiscal year ending July 31, 2010.

Item 6.

Selected Financial Data.

The following selected financial data are derived from and should be read in conjunction with our financial statements and related notes, which appear elsewhere in this Annual Report on Form 10-K. Our financial statements for the years ended July 31, 2010, 2009 and 2008 were audited by MSCM LLP, and our financial statements for the years ended July 31, 2007 and 2006 were audited by Danziger Hochman Partners LLP (formerly known as Danziger & Hochman, Chartered Accountants which merged with MSCM LLP effective as of August 1, 2008).

In thousands (except per share data)	2010			2009			2008			2007			2006

Operating Results:
Revenue	$	1,173		$	1,118		$	125		$	180		$	175
Net Loss		(25,280	)		(45,812	)		(36,229	)		(23,505	)		(67,967	)
Net Loss Available to Common Stockholders		(25,280	)		(45,812	)		(36,229	)		(23,505	)		(67,967	)
Cash Dividends per share		—			—			—			—			—

Loss per Common Share:
Basic and Diluted Net Loss Per Common Share		(0.10	)		(0.32	)		(.33	)		(.22	)		(.90	)

Financial Positions:
Total Assets	$	24,575		$	24,814		$	38,148		$	46,404		$	64,105
Long-Term Debt	$	1,824		$	1,854		$	1,355		$	3,059		$	2,608
Convertible Debentures	$	—		$	—		$	4,719		$	—		$	161
Preferred Stock	$	—		$	—		$	—		$	—		$	—
Stockholder's Equity	$	8,971		$	14,224		$	22,647		$	36,071		$	55,464

Item 7.

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

The following discussion and analysis by management provides information with respect to our financial condition and results of operations for the fiscal years ended July 31, 2010, 2009 and 2008. This discussion should be read in conjunction with the information in the consolidated financial statements and the notes pertaining thereto contained in Item 8 - Financial Statements and Supplementary Data of this Annual Report on Form 10-K for the year ended July 31, 2010 and the information discussed in Part I, Item 1A - Risk Factors.

Overview of Business

We are engaged primarily in the research, development and commercialization of drug delivery systems and technologies. Our primary focus at the present time is our proprietary technology for the administration of formulations of large molecule drugs to the oral (buccal) cavity using a hand-held aerosol applicator. Through our wholly-owned subsidiary, Antigen, we have expanded our focus to include immunomedicines incorporating proprietary vaccine formulations.

We believe that our buccal delivery technology is a platform technology that has application to many large molecule drugs and provides a convenient, non-invasive, accurate and cost-effective way to administer such drugs. We have identified several large molecule drugs as possible candidates for development, including estrogen, heparin, monoclonal antibodies, human growth hormone and fertility hormone, but to date have focused our development efforts primarily on one pharmaceutical product, Generex Oral-lyn™, an insulin formulation administered as a fine spray into the oral cavity using our proprietary hand-held aerosol spray applicator known as RapidMist™.

To date, we have received regulatory approval in Ecuador, India, Lebanon and Algeria for the commercial marketing and sale of Generex Oral-lyn™. Per the requirements of the Indian approval, an in-country clinical study must be completed in India before commercial sales can commence. In March 2008, we initiated Phase III clinical trials for this product in the U.S. with the first patient screening for such trials at a clinical study site in Texas. The patient screening at other participating clinical sites in the U.S. and Canada is ongoing. Over 450 patients have been enrolled to date at 70 clinical sites around the world, including sites in the United States, Canada, Bulgaria, Poland, Romania, Russia and Ukraine.

In October 2009, we received approval from the FDA to charge to recover costs for the treatment use of Generex Oral-lyn™ in patients with Type 1 or Type 2 diabetes mellitus in the FDA’s Treatment Investigational New Drug (“IND”) program that provides for early access to investigational treatments for life-threatening or otherwise serious conditions. This approval allows diabetes patients who do not otherwise qualify to participate in a clinical trial or who have no other satisfactory alternative treatment for diabetes, to have access to Generex Oral-lyn™.

We received a Special Access Program (“SAP”) authorization from Health Canada for a patient-specific, physician-supervised treatment of Type-1 diabetes with Generex Oral-lyn™ in April 2008. SAP provides access to non-marketed drugs for practitioners treating patients with serious or life-threatening conditions when conventional therapies have failed, are not available or unsuitable. We received a similar authorization from health authorities in Netherlands in September 2008. We will continue to expand our SAP participation in additional countries around the world.

In November 2008 we, together with our marketing partner Shreya Life Sciences Pvt. Ltd., officially launched Generex Oral-lyn™ in India under marketing name of Oral Recosulin™. Each package of Oral Recosulin™ contains two canisters of our product along with one actuator. The product received regulatory price approval in India in January 2009, but per the requirements of the approval, an in-country clinical study must be completed in India with Oral Recosulin™ before commercial sales can commence. We have not recognized any revenue from the Indian market to this point.

In November 2008, we submitted our product dossier to the Ministry of Health in Damascus, Syria through Generex MENA, our branch office in Dubai. The dossier includes Generex Oral-lyn™. We also submitted a file to register our proprietary over-the-counter products, including Glucose RapidSpray™, 7-Day Diet Aid Spray™ (marketed as Crave-Nx™ in the United States and Canada) and BaBOOM!™ Energy Spray. The Syrian Ministry of Health has reviewed the dossier for Generex Oral-lyn™ and has approved a four month in-country clinical trial, which we plan to commence in the fourth quarter of 2010. Upon successful completion of this trial, we anticipate that regulatory approval will follow shortly thereafter. We do not anticipate significant revenues to be recognized from this approval in the 2010 calendar year.

We have also submitted regulatory dossiers for Generex Oral-lyn™ in a number of other countries including Bangladesh, Kenya, Yemen, Iraq, Iran, Libya and Sudan. While we believe these countries will ultimately approve our product for commercial sale, it could be sometime before these approvals are received and as such we do not anticipate recognizing any revenues for these jurisdictions until at least the 2011 calendar year, at the earliest.

In December 2008, we, together with our marketing partner Benta SA., received an approval to market Generex Oral-lyn™ in Lebanon. Benta SA. is currently working on a reimbursement policy for Generex Oral-lyn™. The official product launch in Lebanon took place in May 2009.

In May 2009, the Algerian health authorities granted us permission to import and sell Generex Oral-lyn™ for the treatment of diabetes in Algeria. Through the efforts of our business development team, in association with our Generex MENA office, we have entered into a marketing sub-distribution relationship with Algerian company Continental Pharm Laboratoire. The official product launch in Algeria took place in October 2009. To date we have not recognized any revenue from the sales of Generex Oral-lyn™ in Algeria.

Using our buccal delivery technology, we have also launched a line of over-the-counter glucose and energy sprays , including Glucose RapidSpray™, Crave-NX™ 7-day Diet Aid Spray, and BaBOOM!™ Energy Spray. We believe these products will complement Generex Oral-lyn™ and may provide us with an additional revenue stream prior to the commercialization of Generex Oral-lyn™ in other major jurisdictions. To date, we have received modest revenues from sales of our commercially available products, our confectionary Glucose RapidSpray™, a flavored glucose “energy” spray supplemented with vitamins, BaBOOM!™ Energy Spray, and a fat-free glucose spray to aid in dieting, Crave-NX™. All three products are available in retail stores and independent pharmacies in the United States and Canada. In addition, the products are being distributed in the Middle East through our Generex MENA office in Dubai. We expect other distribution territories for these products to include South Africa, India, South America and other jurisdictions worldwide. We are currently pursuing European registrations for these products.

In October 2008, we announced the enrollment of subjects in our bioequivalence clinical trial of MetControl™, our proprietary Metformin medicinal chewing gum product, conducted in the United States. The protocol for the study is an open-label, two-treatment, two-period, randomized, crossover study comparing MetControl™ and immediate release Metformin™ tablets in healthy volunteers. The study results that we received and analyzed in December 2008 demonstrated bioequivalence and will allow us to proceed with additional research and development initiatives and consider regulatory agency registration applications. We are compiling the data from this study and if resources permit, we expect to file with the regulatory agency in the United States in the 2011 calendar year.

Our subsidiary, Antigen Express, concentrates on developing proprietary vaccine formulations that work by stimulating the immune system to either attack offending agents (i.e., cancer cells, bacteria, and viruses) or to stop attacking benign elements (i.e., self proteins and allergens). Our immunomedicine products are based on two platform technologies and are in the early stages of development. We continue clinical development of Antigen’s synthetic peptide vaccines designed to stimulate a potent and specific immune response against tumors expressing the HER-2/neu oncogene for patients with HER-2/neu positive breast cancer in a Phase II clinical trial and patients with prostate cancer and against avian influenza in two Phase I trials. An additional Phase I trial has been initiated recently in patients with either breast or ovarian cancer. The synthetic vaccine technology has particularly advantages for pandemic or potentially pandemic viruses, such as the H5N1 avian and H1N1 swine flu. In addition to developing vaccines for pandemic influenza viruses, we have vaccine development efforts underway for seasonal influenza virus, HIV, HPV, melanoma, ovarian cancer, allergy and Type I diabetes mellitus. We have established collaborations with clinical investigators at academic centers to advance these technologies.

We face competition from other providers of alternate forms of insulin. Some of our most significant competitors, Pfizer, Eli Lilly, and Novo Nordisk, have announced that they will discontinue development and/or sale of their inhalable forms of insulin. Generex Oral-lyn™ is not an inhaled insulin; rather, it is a buccally absorbed formulation with no residual pulmonary deposition. We believe that our buccal delivery technology offers several advantages over inhaled insulin, including the avoidance of pulmonary inhalation, which requires frequent physician monitoring, ease of use and portability.

We are a development stage company. From inception through the end of the year ended July 31, 2010, we have received only limited revenues from operations. In the fiscal years ended July 31, 2010, 2009 and 2008, we received $1,172,611, $1,118,509 and $124,891 in revenue. The revenue in fiscal 2009 included $500,000 relating to an upfront license fee for the signing of a license and distribution agreement for Generex Oral-lyn™, while the remainder of the revenue in each of the fiscal periods pertained primarily to the sale of our confectionary products. These numbers do not reflect deferred sales to customers during the respective periods with the right of return.

We operate in only one segment: the research, development and commercialization of drug delivery systems and technologies for metabolic and immunological diseases.

Accounting for Research and Development Projects

Our major research and development projects are the refinement of our platform buccal delivery technology, our buccal insulin project (Generex Oral-lyn™), our buccal morphine product and Antigen’s peptide immunotherapeutic vaccines.

During the fiscal year ended July 31, 2010, we expended resources on the clinical testing and commercialization, of our buccal insulin product, Generex Oral-lyn™. In July 2007, we received no objection from the FDA to proceed with our long-term multi-center Phase III study protocol for Generex Oral-lyn™. Late-stage trials involve testing our product with a large number of patients over a significant period of time. The completion of late-stage trials in Canada and eventually the United States may require significantly greater funds than we currently have on hand.

Although we initiated regulatory approval process for our morphine and fentanyl buccal products, we did not expend resources to further this product during our last fiscal year.

During the fiscal year ended July 31, 2010, we expended resources on research and development relating to Antigen’s peptide immunotherapeutic vaccines and related technologies. One Antigen vaccine is currently in Phase II clinical trials in the United States involving patients with HER-2/neu positive breast cancer, and have completed a Phase I clinical trial for an Antigen vaccine for H5N1 avian influenza which was conducted at the Lebanese-Canadian Hospital in Beirut. Antigen’s prostate cancer vaccine based on AE37 has been tested in a completed (August 2009) Phase I clinical trial in Greece. Preliminary pre-clinical work has commenced with respect to the experimental vaccine for patients with acute myeloid leukemia at Beijing Daopei Hospital in China.

Because of various uncertainties, we cannot predict the timing of completion and commercialization of our buccal insulin or buccal morphine products or Antigen’s peptide immunotherapeutic vaccines or related technologies. These uncertainties include the success of current studies, our ability to obtain the required financing and the time required to obtain regulatory approval even if our research and development efforts are completed and successful, our ability to enter into collaborative marketing and distribution agreements with third-parties, and the success of such marketing and distribution arrangements. For the same reasons, we cannot predict when any products may begin to produce net cash inflows.

Most of our buccal delivery research and development activities to date have involved developing our platform technology for use with insulin. Insubstantial amounts have been expended on projects with other drugs, including morphine and fentanyl, and those projects involved a substantial amount of platform technology development. As a result, we have not made significant distinctions in the accounting for research and development expenses among products, as a significant portion of all research has involved improvements to the platform technology in connection with insulin, which may benefit all of our potential buccal products. During the fiscal year ended July 31, 2010, approximately 86% or $11,516,050 of our $13,361,156 in research expenses was attributable to insulin and platform technology development, and we did not have any research expenses related to morphine or other buccal projects. During the fiscal year ended July 31, 2009, approximately 84% of our $13,561,681 in research expenses was attributable to insulin and platform technology development, and we did not have any research expenses related to morphine, fentanyl or other buccal projects. During the fiscal year ended July 31, 2008, approximately 85% of our $16,359,030 in research expenses was attributable to insulin and platform technology development, and we did not have any research expenses related to morphine, fentanyl or other buccal projects.

Approximately 14% or $1,845,106 of our research and development expenses for the fiscal year ended July 31, 2010 was related to Antigen's immunomedicine products, compared to approximately 16% or $2,136,979 of our research and development expenses for the fiscal year ended July 31, 2009 and approximately 15% or $2,517,552 of our research and development expenses for the fiscal year ended July 31, 2008. Because these products are in initial phases of clinical trials or early, pre-clinical stage of development (with the exception of the Phase II clinical trials of Antigen HER-2/neu positive breast cancer vaccine that are underway), all of the expenses were accounted for as basic research and no distinctions were made as to particular products. Due to the early stage of development, we cannot predict the timing of completion of any products arising from this technology, or when products from this technology might begin producing revenues.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements which have been prepared in conformity with accounting principles generally accepted in the United States of America. It requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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.

We consider certain accounting policies related to impairment of long-lived assets, intangible assets and accrued liabilities to be critical to our business operations and the understanding of our results of operations:

Going Concern. As shown in the accompanying financial statements, we have not been profitable and have reported recurring losses from operations. These factors raise substantial doubt about our ability to continue to operate in the normal course of business. The accompanying financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.

Revenue Recognition. Net sales of Glucose RapidSpray™, BaBOOM!™ Energy Spray and Crave-NX™ are generally recognized in the period in which the products are delivered. Delivery of the products generally completes the criteria for revenue recognition for us. In the event where the customers have the right of return, sales are deferred until the right of return lapses, the product is sold to a third party or a provision for returns can be reasonably estimated based on historical experience.

Inventory. Inventories are stated at the lower of cost or market with cost determined using the first-in first-out method. Management considers such factors as the amount of inventory on hand and in the distribution channel, estimated time to sell such inventory, inventories shelf life and current market conditions when determining whether the lower cost or market is used. As appropriate, a provision is recorded to reduce inventories to their net realizable value. Inventory also includes the cost of products sold to the customers with the rights of return.

Impairment of Long-Lived Assets. Management reviews for impairment whenever events or changes in circumstances indicate that the carrying amount of property and equipment may not be recoverable under the provisions of accounting for the impairment of long-lived assets." If it is determined that an impairment loss has occurred based upon expected future cash flows, the loss is recognized in the Statement of Operations.

Intangible Assets. We have intangible assets related to patents. The determination of the related estimated useful lives and whether or not these assets are impaired involves significant judgments. In assessing the recoverability of these intangible assets, we use an estimate of undiscounted operating income and related cash flows over the remaining useful life, market conditions and other factors to determine the recoverability of the asset. If these estimates or their related assumptions change in the future, we may be required to record impairment charges against these assets.

Estimating accrued liabilities, specifically litigation accruals. Management's current estimated range of liabilities related to pending litigation is based on management's best estimate of future costs. While the final resolution of the litigation could result in amounts different than current accruals, and therefore have an impact on our consolidated financial results in a future reporting period, management believes the ultimate outcome will not have a significant effect on our consolidated results of operations, financial position or cash flows.

Share-based compensation. Management determines value of stock-based compensation to employees in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 718, Compensation – Stock Compensation. Management determines value of stock-based compensation to non-employees and consultants in accordance with and ASC 505, Equity-Based Payments to Non-Employees.

Derivative warrant liability. FASB ASC 815, Derivatives and Hedging, requires all derivatives to be recorded on the balance sheet at fair value for fiscal years beginning after December 15, 2008. As a result, certain derivative warrant liabilities (namely those with a price protection feature) are now separately valued as of August 1, 2009 and accounted for on our balance sheet, with any changes in fair value recorded in earnings. On our balance sheet as of July 31, 2010, we used the binomial lattice model to estimate the fair value of these warrants. Key assumptions of the binomial lattice option-pricing model include the market price of our stock, the exercise price of the warrants, applicable volatility rates, risk-free interest rates, expected dividends and the instrument’s remaining term. These assumptions require significant management judgment. In addition, changes in any of these variables during a period can result in material changes in the fair value (and resultant gains or losses) of this derivative instrument. Prior to the adoption of the binomial lattice method, we used the Black-Scholes option-pricing model to estimate the fair value of these warrants. The binomial lattice model was adopted as management determined that it may provide a better estimate of the fair value of these warrants. The binomial lattice model was adopted for the July 31, 2010 valuation date and is being applied on a prospective basis.

Results of Operations

Year Ended July 31, 2010 Compared to Year Ended July 31, 2009

Our net loss for the fiscal year ended July 31, 2010 (fiscal 2010) was $25,279,940 versus $45,812,228 in the fiscal year ended July 31, 2009 (fiscal 2009). The decrease in net loss in fiscal 2010 versus fiscal 2009 is primarily due to the decrease in interest expense to $210,083 from $20,114,595. The interest expense in fiscal 2009 consisted primarily of the non-cash interest expense related to the amortization of the discount on the secured convertible notes issued in March 2008 of $15,931,481. The decrease in fiscal 2010 interest expense was offset by an increase in operating expenses of $2,943,225. In addition, there was a non-cash gain of $4,125,590 in fiscal 2010 relating to the fair valuation of the derivative warrant liability as of July 31, 2010. Our operating loss for fiscal 2010 increased to $29,429,817 compared to $26,256,160 in fiscal 2009. The increase resulted primarily from an increase in selling expense to $3,709,767 from $2,120,903, an increase in general and administrative expenses to $12,719,239 from $11,164,352, offset by a slight reduction in research and development expenses to $13,361,156 from $13,561,861. Revenue increased marginally to $1,172,611 from $1,118,509, while gross profits decreased to $360,345 from $590,776. The decrease in gross profit is attributable to a non-refundable license fee relating to the signing of a licensing and distribution agreement in Korea for Generex Oral-lyn™ being included in fiscal 2009 revenues, while in fiscal 2010 revenue consisted primarily of sales of our over-the-counter confectionary products in North America, as well as the Middle East North African region.

The increase in general and administrative expenses is primarily related to the non-cash, one time stock option modification charge of $875,773 in fiscal 2010, charges of $767,373 related to the executive options granted in fiscal 2010, as well as an increase in professional expenses, including the issuance of warrants in exchange for financial services resulting in a non-cash expense of $591,000 versus fiscal 2009. The increase in selling expenses for fiscal 2010 versus fiscal 2009 is associated with increased advertising and promotion of our over-the-counter products, as well as the costs associated with our MENA sales office in Dubai. Research and development expenses remained fairly static from fiscal 2010 and fiscal 2009, as expenditures relating to the Phase III trials for our Generex Oral-lyn™ product, as well as Antigen’s early stage trials for its immunomedicine products, remained at roughly the same levels as the prior year.

Our interest income decreased to $27,045 in fiscal 2010 compared to $237,977 in fiscal 2009 primarily due to lower market interest rates. We received lower income from rental operations (net of expense) of $206,575 in fiscal 2010 compared to $320,547 in fiscal 2009.

Year Ended July 31, 2009 Compared to Year Ended July 31, 2008

Our net loss for the fiscal year ended July 31, 2009 was $45,812,228 versus $36,228,991 in the fiscal year ended July 31, 2008 (fiscal 2008). The increase in net loss in fiscal 2009 versus fiscal 2008 is primarily due to the increase in interest expense to $20,114,595 from $4,280,558 which related mainly to the non-cash interest expense related to the amortization of the discount on the secured convertible notes issued in March 2008 of $15,931,481. The increase in interest expense was offset by decreases in research and development expenses of $2,797,349 and decreases in general and administrative expenses of $4,432,696, as we opted to conserve cash during parts of the year, until such time as we could raise additional funding in the volatile equity markets. Our operating loss for fiscal 2009 decreased to $26,256,160 compared to $33,445,470 in fiscal 2008. The decrease resulted primarily from the reduction in research and development expenses and general and administrative expenses described above and an increase in revenue to $1,118,509 from $124,891, which was partially offset by an increase in selling expense to $2,120,903 from $1,562,258. The increase in net revenue is attributable to a non-refundable license fee relating to the signing of a licensing and distribution agreement in Korea for Generex Oral-lyn™ and over $460,000 in revenue generated through our Generex MENA branch office in Dubai in fiscal 2009. This compared to $124,891 of revenue related to our over-the-counter confectionary products in North America in fiscal 2008.

The decrease in research and development expenses, as well as general and administrative expenses in fiscal 2009 reflects our efforts to conserve cash during parts of the year, until we were able to successfully raise additional capital in the fourth quarter of fiscal 2009. The increase in selling expenses to $2,120,903 from $1,562,258 is primarily associated with the opening of our Generex MENA branch office in Dubai with the intent of securing product licensing for Generex Oral-lyn™ in the Middle East and North Africa, as well as Asia and Eastern Europe, and increasing the revenues from our over-the-counter confectionary products in the same regions.

Our interest income decreased to $237,977 in fiscal 2009 compared to $1,166,439 in the last fiscal year primarily due to a combination of lower cash balances and lower market interest rates. We received slightly lower income from rental operations (net of expense) of $320,547 in fiscal 2009 compared to $330,533 in fiscal 2008.

Financial Condition, Liquidity and Resources

Sources of Liquidity

As of July 31, 2010, we expect that our current cash position will not be sufficient to meet our working capital needs for the next twelve months based on the pace of our planned activities. Therefore, we will require additional funds to support our working capital requirements and any expansion or other activities, or will need to significantly reduce our clinical trials and other planned activities.

While we have financed our development stage activities to date primarily through private placements of our common stock and securities convertible into our common stock and raised over $36 million during fiscal 2010 and the fourth quarter of fiscal 2009 combined, our cash balances were very low during portions of fiscal 2009. Unforeseen problems with our clinical program, manufacturing and commercialization plans in Ecuador, India, Lebanon or Algeria, failure to regain compliance with NASDAQ Listing Rules following our appeal to the NASDAQ Hearings Panel and to remain listed on The NASDAQ Capital Market, or further negative developments in general economic conditions could interfere with our ability to raise additional equity capital as needed, or materially adversely affect the terms upon which such capital is available. Our inability to obtain required funding will have a material adverse effect on one or more of our research or development programs and curtail our commercialization efforts.

Management may seek to meet all or some of our operating cash flow requirements through financing activities, such as private placement of our common stock, preferred stock offerings and offerings of debt and convertible debt instruments as well as through merger or acquisition opportunities. On January 29, 2010, we filed a new shelf registration statement (File No. 333-164591) with the Securities and Exchange Commission (“SEC”) to renew and replace the prior shelf registration statement (File No. 333-139637), filed in December 2006, pursuant to which we registered an indeterminate number of shares of common stock and preferred stock and an indeterminate number of warrants and units with an aggregate initial offering price of up to $150,000,000. The new shelf registration statement is intended to renew and replace the prior registration statement. The new registration statement was declared effective on February 9, 2010 and covers offerings of shares of our common stock, preferred stock, warrants and/or units with a maximum aggregate offering price of $150,000,000, which includes the $116,110,920 of securities remaining unsold under the prior registration statement. In May, June, August and September 2009, we conducted offerings pursuant to the prior registration statement and raised an aggregate of $32,335,164 in net proceeds. In April, May and June 2010, we raised a further $4,499,618 in net proceeds pursuant to a common stock purchase agreement with takedowns from the new shelf registration statement as described below.

In addition, management is actively pursuing industry collaboration activities, including product licensing and specific project financing, and potential strategic partners in the consumer market for diabetes-related products.

We believe that the commencement of Phase III clinical trial trials for Oral-lyn™ in the United States and Canada represents a significant milestone event. We also anticipate that the commercial launch of Oral-lyn™ in countries where it has been approved may provide us with revenue in 2011. We believe that the successful commercial launch of Oral-lyn™ in countries where we have approval would enhance our ability to access additional sources of funding. We will continue to require substantial funds to continue research and development, including preclinical studies and clinical trials of our product candidates, and to commence sales and marketing efforts if the FDA or other regulatory approvals are obtained.

Equity Financings

Following is a summary of the equity financing activities that we completed in fiscal 2010.

On August 6, 2009, we and certain investors entered into a securities purchase agreement pursuant to which we sold an aggregate of 8,558,013 shares of our common stock and warrants exercisable for up to 2,995,305 shares of our common stock to the investors. The purchase price of each unit (comprised of one share and one warrant to purchase thirty-five percent (35%) of one share of common stock) was $0.6602, and the exercise price per share of the warrants is $0.79. The warrants are exercisable for a period of 5 years beginning 183 days after the closing date. The shares and warrants (including those issued to the placement agent) were issued pursuant to a takedown from the prior shelf registration statement described above. The net proceeds to us from the registered direct public offering, after deducting placement agent fees and our offering expenses, were approximately $5,200,000. In connection with this offering, we paid Midtown Partners & Co., LLC , as placement agent, a cash fee in the aggregate amount of $213,000. This fee represented 4% of the gross purchase price paid for the shares and warrants at the closing by certain specified investors and 2% of the gross purchase price paid for the shares and warrants at the closing by the other investors. In addition, we issued Midtown, or its permitted assigns, a five-year warrant to purchase up to 577,666 shares of our common stock (at the exercise price of $0.79 per share) representing 5% of the sum of the number of shares of common stock issued at the closing, and (ii) the number of shares of common stock issuable upon exercise of all warrants issued at the closing. The warrants provide for cashless exercise in the event there is no registration statement covering the underlying warrant shares. We also reimbursed Midtown for certain fees and legal expenses reasonably incurred in connection with this offering.

On September 14, 2009, we and certain investors entered into a securities purchase agreement pursuant to which we sold an aggregate of 15,312,500 shares of our common stock and warrants exercisable for up to 5,053,125 shares of our common stock to the investors. The purchase price of each unit (comprised of one share and one warrant to purchase thirty-three percent (33%) of one share of common stock) was $0.80, and the exercise price per share of the warrants is $1.00. The warrants are exercisable for a period of 5 years beginning 183 days after the closing date. The shares and warrants (including those issued to the placement agents) were issued pursuant to a takedown from the prior shelf registration statement described above. The net proceeds to us from the registered direct public offering, after deducting placement agent fees and our offering expenses, were approximately $11,240,000. In connection with this offering, we paid Midtown and Maxim Group LLC, as placement agents, cash fees in the aggregate amount of $245,000. The fees represented 4% of the gross purchase price paid for the shares and warrants at the closing by certain specified investors brought to the investment by each respective placement agent and 2% of the gross purchase price paid for the shares and warrants at the closing by the other investors. In addition, we issued to each of Midtown and Maxim, or their permitted assigns, a five-year warrant to purchase up to 253,571 shares of common stock (at the exercise price of $1.00 per share) representing (A) 2.5% of the sum of (i) the number of shares issued at the closing to investors introduced to the transaction by Midtown or Maxim, as the case may be, and (ii) the number of shares issuable upon exercise of all warrants issued at the closing to investors introduced to the transaction by Midtown or Maxim, as the case may be, and (B) 1.25% of the sum of (i) the number of shares issued at the closing to investors which were not introduced to the transaction by a registered broker-dealer, and (ii) the number of shares issuable upon exercise of all warrants issued at the closing to investors which were not introduced to the transaction by a registered broker-dealer. The warrants provide for cashless exercise in the event there is no registration statement covering the underlying warrant shares. We also reimbursed the placement agents for certain fees and legal expenses reasonably incurred in connection with this offering.

On April 7, 2010, we entered into a common stock purchase agreement with Seaside 88, LP relating to the offering and sale of up to 49,455,130 shares of our common stock. Under this agreement, we were obligated to issue and sell, and Seaside was required to purchase, up to 2,000,000 shares of our common stock once every two (2) weeks (except for the last closing), subject to the satisfaction of customary closing conditions and certain exceptions, beginning on April 8, 2010 and ending on or about the date forty eight (48) weeks subsequent thereto. The offering price of our common stock at each closing was calculated as an amount equal to the lower of (i) the daily volume weighted average of actual trading prices of the common stock on the trading market (the “VWAP”) for the ten consecutive trading days immediately prior to a closing date multiplied by 0.89 and (ii) the VWAP for the trading day immediately prior to a closing date multiplied by 0.95. On April 28, 2010, we and Seaside amended the agreement to modify the timing of the subsequent closings and to provide for the proportionate adjustment of the number of such shares in respect of any stock split, stock dividend, combination, recapitalization or the like. In connection with this offering, we agreed to pay Midtown, as placement agent, a cash fee representing 4% of the gross purchase price paid by Seaside for our stock at each closing. In addition, at each closing, we issued Midtown, or its permitted assigns, a five-year warrant to purchase the number of shares of common stock equal to 2.5% of the sum of the number of shares issued to Seaside at such closing. The exercise price per share for each warrant issuance was equal to the per share purchase price paid by Seaside at each respective closing, and each warrant has an expiration date of February 9, 2015. The warrants also provide for cashless exercise in the event there is no registration statement covering the underlying warrant shares. We also reimbursed Midtown for certain fees and legal expenses reasonably incurred in connection with the Seaside transaction. The shares issued to Seaside and the warrants issued to Midtown were issued pursuant to takedowns from our new shelf registration statement described above. We raised approximately $4,736,580 in gross proceeds from the sale of 12,000,000 shares related to Seaside closings in April, May and June 2010 and issued warrants to purchase an aggregate of 300,000 shares of our common stock to Midtown. On June 18, 2010, we exercised our right to terminate the agreement with Seaside.

Proceeds from Warrant Exercises

We may receive additional proceeds from the exercise of warrants issued in the registered direct offerings conducted in June, August and September 2009 and April, May and June 2010, although some of the warrants include a cashless exercise feature. In the transaction that closed on June 15, 2009, we sold shares of common stock and warrants exercisable for up to 8,600,000 shares of our common stock to investors and issued Midtown, our exclusive placement agent for the transaction, a warrant to purchase up to 244,926 shares of our common stock. In the August 6, 2009 registered direct offering, we sold shares of common stock and warrants exercisable for up to 2,995,305 shares of our common stock to investors and issued a warrant to purchase 577,666 shares of our common stock to Midtown, which acted as our exclusive placement agent for the August 2009 transaction. The warrants issued in the transactions that closed in September 2009 and April, May and June 2010 are described above under the subheading Equity Financings.

As of October 12, 2010, all of the warrants issued in the June, August and September 2009 registered direct offerings were exercisable. At October 12, 2010, outstanding warrants issued in connection with the June, August and September 2009 registered direct offerings and April, May and June 2010 sales to Seaside were as follows:

Date Issued	Aggregate No. of Shares Unexercised		Exercise Price		Expiration Date
June 15, 2009		8,844,926		0.76	December 15, 2014

August 6, 2009		3,572,971		0.79	February 4, 2015

September 14, 2009		6,022,651		1.00	March 15, 2015

April 8, 2010		50,000		0.47259	February 9, 2015

April 21, 2010		50,000		0.4258	February 9, 2015

April 30, 2010		50,000		0.415	February 9, 2015

May 14, 2010		50,000		0.3496	February 9, 2015

May 28, 2010		50,000		0.351	February 9, 2015

June 11, 2010		50,000		0.3543	February 9, 2015

In addition, we may receive additional proceeds from the exercise of warrants issued in connection with the securities purchase agreement and related documents that we entered into on March 31, 2008 with existing institutional investors relating to a private placement of 8% secured convertible notes (the “Notes”) and warrants (the “Series Warrants”) for aggregate gross proceeds to us of $20,650,000. As of June 1, 2009, the outstanding principal balance and accrued interest on the Notes were satisfied in full.

The Series Warrants issued in connection with the March 2008 securities purchase agreement included:

(i)

Series A and A-1 Warrants, which are exercisable for a period of 7 years into an aggregate of 75% of the number of shares of our common stock initially issuable upon conversion of the Notes, with the Series A Warrants being exercisable into 5,257,729 shares immediately upon issuance and the Series A-1 warrants being exercisable into 7,541,857 shares as of October 1, 2008;

(ii)

Series B Warrants, which became exercisable on October 1, 2008 into 100% of the shares of our common stock initially issuable upon conversion of the Notes (initially 17,066,166 shares) and remain exercisable for a period of 18 months after the registration statement covering the shares of common stock issuable upon conversion or exercise of the Notes and Warrants was declared effective by the SEC; and

(iii)

Series C Warrants, which are exercisable for a period of 7 years as of October 1, 2008, but only to the extent that the Series B Warrant are exercised and only in the same percentage that the Series B Warrants are exercised, up to a maximum percentage of 75% of the number of shares of our common stock initially issuable upon conversion of the Notes (initially a maximum of 12,799,580 shares).

The initial exercise price of each Series Warrant was $1.21. The Series Warrants include a cashless exercise feature. The exercise price of the Series Warrants was subsequently reduced initially to $0.50 and then to $0.33 as a result of a price protection provision triggered by our offering of stock in a private placement in May 2009. This price protection feature allows for the reduction in the exercise price of the Series Warrants in the event we subsequently issue common stock or securities convertible into or exercisable for common stock, such as options and warrants, at a price per share less than the Series Warrant exercise price then in effect. In addition, with any reduction to the Series Warrant exercise price, the number of shares of common stock that may be purchased upon exercise of each Series Warrant will be increased or decreased proportionately, so that after such adjustment the aggregate Series Warrant exercise price payable for the adjusted number of shares issuable upon exercise will be the same as the aggregate Series Warrant exercise price in effect immediately prior to such adjustment. We account for these warrants with price protection in accordance with ASC 815 as described in Note 13 to the Notes to Consolidated Financial Statements included elsewhere in this Annual Report.

As of October 12, 2010, outstanding Series Warrants were as follows:

Date Issued	Aggregate No. of Shares Unexercised		Exercise Price*		Expiration Date
March 31, 2008		13,931,027	$	0.33	March 31, 2016

March 31, 2008		2,572,313	$	0.33	September 30, 2016

*Upon issuance of securities at a price per share of common stock less than the then applicable exercise price, the warrants are subject to anti-dilution adjustment of the exercise price and to the number of shares of common stock that may be purchased upon exercise of each warrant such that the aggregate exercise price payable upon exercise of the warrant will be the same as the aggregate exercise price in effect immediately prior to such adjustment. Due to the anti-dilution adjustment provision of these warrants, they have been reclassified on Generex’s balance sheet as a liability under the caption “Derivative Warrant Liability” with any changes in fair value at each reporting period recorded in earnings in accordance with ASC 815.

At Market Issuance Sales Agreement

On October 14, 2009, we entered into an At Market Issuance Sales Agreement with Wm Smith & Co., under which we may sell an aggregate of $20,000,000 in gross proceeds of our common stock from time to time through Wm Smith, as the agent for the offer and sale of the common stock. Wm Smith may sell the common stock by any method permitted by law, including sales deemed to be an “at the market” offering as defined in Rule 415 of the Securities Act, including without limitation sales made directly on The NASDAQ Capital Market, on any other existing trading market for the common stock or to or through a market maker. Wm Smith may also sell the common stock in privately negotiated transactions, subject to our prior approval. We will pay Wm Smith a commission not to exceed 3% of the gross proceeds of the sales price of all common stock sold through it as sales agent under the agreement. The sales agreement will terminate on the earliest of (1) the sale of all of the common stock subject to the agreement, or (2) termination of the agreement by us or Wm Smith. Wm Smith may terminate the sales agreement at any time in certain circumstances, including the occurrence of a material adverse change that, in Wm Smith’s reasonable judgment, may impair its ability to sell the common stock, our failure to satisfy any condition under of the agreement or a suspension or limitation of trading of our common stock on NASDAQ. We may terminate the sales agreement at any time upon 10 days prior notice, and Wm Smith may terminate the Agreement at any time upon 10 days prior notice. We announced on October 29, 2009, that, in light of general market conditions, we will not exercise our right to issue and sell shares of our common stock under the sales agreement until further notice.

Cash Flows for the Year Ended July 31, 2010

For the fiscal 2010 year, we used $22,312,127 in cash to fund our operating activities. The use for operating activities included a net loss of $25,279,940. Cash used in operating activities decreased due to an increase of $1,878,296 related to accounts payable and accrued expenses, a decrease in other current assets of $601,115 and an increase of $252,042 in deferred revenue, which were offset by a net increase in inventory and inventory deposits of $618,401 and a $12,482 increase in accounts receivable.

The use of cash was offset by non-cash increases of approximately $780,250 related to depreciation and amortization, $1,866,383 in stock-based compensation, amortization of options and option modifications related to employees, executives and directors and $2,346,200 in stock-based compensation for services to consultants. These non-cash increase adjustments to reconcile the net loss to net cash used, were offset by a non-cash gain of $4,125,590 related to the revaluation of the derivative warrants.

We had net cash outflows from investing activities of $388,485 in fiscal 2010, primarily consisting of payments for property and equipment of $159,708 and costs incurred for patents of $228,777.

We had net cash flows from financing activities of $22,334,371 in fiscal 2010. We received net proceeds of $16,400,671 from issuances of common stock in our August and September registered direct offerings. We received $4,499,618 in net proceeds from sales of common stock to Seaside in connection with closings in April, May and June 2010. We received $1,574,062 in cash proceeds from exercises of warrants. We made payments on our capital leases and long-term debt of $139,980.

Our net working capital at July 31, 2010 increased from July 31, 2009 by $534,831 to $8,096,206, which was attributed largely to our net cash flows from our financing activities offset by our fiscal 2010 loss.

Funding Requirements

We expect to devote substantial resources to obtaining regulatory approval of Generex Oral-lyn™ in the U.S., Canada and Europe and to commercializing Generex Oral-lyn™ in India, Lebanon, Ecuador and Algeria. We also will devote resources to obtaining approval for the importation, marketing and commercialization of Generex Oral-lyn™ in other countries where we have licensed distributors.

Under the long-term agreement that we signed with sanofi-aventis in December 2009, sanofi-aventis will manufacture and supply recombinant human insulin to us in the territories specified in the agreement. Through this agreement, we will procure recombinant human insulin crystals for use in the production of Generex Oral-lyn™. The terms of the supply agreement require us to make certain minimum purchases of insulin from sanofi-aventis through the period ended December 31, 2011. Sanofi-aventis will be our exclusive supplier in certain countries and a non-exclusive supplier in some other countries. Sanofi-aventis may delete any territory from the agreement in which Generex Oral-lyn™ has not been approved for commercial sale by December 31, 2011. The prices under the supply agreement are subject to adjustment beginning after December 31, 2012.

In addition to the resources that we will dedicate to regulatory approval and commercialization of Generex Oral-lyn™, we will expend resources on further clinical development of our immunotherapeutic vaccines.

Our future funding requirements and our ability to raise additional capital will depend on factors that include:

the timing and amount of expense incurred to complete our clinical trials;

the costs and timing of the regulatory process as we seek approval of our products in development;

the advancement of our products in development;

our ability to generate new relationships with industry partners throughout the world that will provide us with regulatory assistance and long-term commercialization opportunities;

opportunities to pursue strategic partnerships through alliances or acquisitions in the consumer market for diabetes-related products;

the timing, receipt and amount of sales, if any, from Generex Oral-lyn™;

the timing, receipt and amount of sales, if any, from our over-the-counter products;

the cost of manufacturing (paid to third parties) of our licensed products, and the cost of marketing and sales activities of those products;

the costs of prosecuting, maintaining, and enforcing patent claims, if any claims are made;

our ability to maintain existing collaborative relationships and establish new relationships as we advance our products in development; and

the receptivity of the financial market to biopharmaceutical companies.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors, and we do not have any non-consolidated special purpose entities.

Contractual Obligations

The following table of contractual obligations as of July 31, 2010 includes interest obligations.

	Payments Due by Period
Contractual Obligations	Total		Less than 1 Year		1-3 years		3-5 years		More than 5 years
Long-Term Debt Obligations	$	3,465,763	$	1,314,751	$	415,012	$	1,736,000	$	-
Convertible Debt Obligations		-		-		-		-		-
Capital Lease Obligations		7,953		7,953
Operating Lease Obligations		386,822		209,515		177,307		-		-
Purchase Obligations *		-		-		-		-		-
Other Long-Term Liabilities Reflected on the Registrant's Balance Sheet under GAAP		-		-		-		-		-

Total	$	3,860,538	$	1,532,219	$	592,319	$	1,736,000	$	-

*	The long-term obligations of Generex to purchase insulin under its supply agreement with sanofi-aventis entered into on December 7, 2009 are not included in the table above because the quantities and prices relating to Generex’s obligations are subject to confidential treatment.

Certain Related Party Transactions

We utilize a management company to manage all of our real properties. The property management company is owned by Ms. Perri, Ms. Gluskin and the estate of Mark Perri, our former Chairman of the Board. In the fiscal years ended July 31, 2010, 2009 and 2008, we paid the management company approximately $55,691, $47,981 and $54,473, respectively, in management fees. We believe that the amounts paid to the management company approximate the rates that would be charged by a non-affiliated property management company.

See Part III, Item 13 – Certain Relationships and Related Transactions, and Directors Independence for further descriptions of our transactions with related parties during the last two fiscal years.

Recently Adopted Accounting Pronouncements

In November 2007, the Financial Accounting Standards Board (FASB) issued guidance related to accounting for collaborative arrangements. This guidance defines a collaborative arrangement as a contractual arrangement in which the parties are (i) active participants to the arrangement; and (ii) exposed to significant risks and rewards that depend upon the commercial success of the endeavor. It also addresses the appropriate statement of operations presentation for activities and payments between the participants in a collaborative arrangement as well as for costs incurred and revenue generated from transactions with third parties. This guidance is effective for our fiscal year beginning August 1, 2009. The adoption of this guidance did not have a significant impact on our consolidated financial statements.

In December 2007, the FASB issued an amendment to an existing accounting standard which provides guidance related to business combinations. The amendment retains the fundamental requirements that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business combination. This amendment also establishes principles and requirements for how the acquirer: a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree; b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase and c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This amendment applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. An entity may not apply it before that date. This guidance is effective for our fiscal year beginning August 1, 2009. The adoption of this guidance did not have a significant impact on our consolidated financial statements.

In April 2008, the FASB issued guidance related to determining the useful life of intangible assets. This guidance amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset. The objective of the guidance is to improve the consistency between the useful life of a recognized intangible asset and the period of expected cash flows used to measure the fair value of the asset. The adoption of this guidance did not have a significant impact on our consolidated financial statements.

In May 2008, the FASB issued guidance related to accounting for convertible debt instruments that may be settled in cash upon conversion (including partial cash settlements). This guidance requires a portion of this type of convertible debt to be recorded as equity and to record interest expense on the debt portion at a rate that would have been charged on nonconvertible debt with the same terms. The adoption of this guidance did not have a significant impact on our consolidated financial statements.

In June 2008, the FASB issued guidance related to determining whether instruments granted in share-based payment transactions are participating securities. Securities participating in dividends with common stock according to a formula are participating securities. This guidance determined that unvested shares of restricted stock and stock units with nonforfeitable rights to dividends are participating securities. Participating securities require the “two-class” method to be used to calculate basic earnings per share. This method lowers basic earnings per common share. This guidance is effective for our fiscal year beginning August 1, 2009. The adoption of this guidance did not have a significant impact on our consolidated financial statements.

In June 2008, the FASB reached a consensus regarding the determination of whether an instrument (or an embedded feature) is indexed to an entity’s own stock, which is the first part of the scope exception related to accounting for derivative instruments and hedging activities. This guidance is effective for our fiscal year beginning August 1, 2009. We determined that certain of our warrants with price protection provisions are not considered to be indexed to our own stock, do not meet the scope exception and, thus, should be accounted for as a liability. The adoption of this guidance resulted in an increase in the Company’s opening “Deficit accumulated during the development stage” of $5,981,043 at the date of adoption and the recognition of income of $4,125,590 within our consolidated statements of operations for the year ended July 31, 2010 and a net reclassification of $5,679,721 of previously reported stockholders’ equity to a liability under the caption “Derivative Warrant Liability” as of July 31, 2010.

In June 2009, the FASB issued guidance which stipulates the FASB Accounting Standards Codification (ASC) is the source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities. This guidance is effective for our fiscal year beginning August 1, 2009. The adoption of this guidance did not have a significant impact on our consolidated financial statements.

Recently Issued Accounting Pronouncements

In October 2009, the FASB issued ASU No. 2009-13, Revenue Recognition —Multiple Deliverable Revenue Arrangements (“ASU 2009-13”) (now codified within FASB ASC 605). ASU 2009-13 eliminates the residual method of allocation and requires the relative selling price method when allocating deliverables of a multiple-deliverable revenue arrangement. The determination of the selling price for each deliverable requires the use of a hierarchy designed to maximize the use of available objective evidence including, vendor specific objective evidence, third party evidence of selling price, or estimated selling price. ASU 2009-13 is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, and must be adopted in the same period using the same transition method. If adoption is elected in a period other than the beginning of a fiscal year, the amendments in these standards must be applied retrospectively to the beginning of the fiscal year. Full retrospective application of these amendments to prior fiscal years is optional. Early adoption of these standards may be elected. We are currently evaluating the impact of these new accounting standards on our consolidated financial statements.

In January 2010, the FASB issued additional guidance on fair value measurements and disclosures which requires reporting entities to provide information about movements of assets among Level 1 and 2 of the three-tier fair value hierarchy established by the existing guidance. The guidance is effective for any fiscal year that begins after December 15, 2010, and it should be used for quarterly and annual filings. We are currently evaluating the impact of this new accounting guidance on our consolidated financial statements.

Item. 7A.

Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risks associated with changes in the exchange rates between U.S. and Canadian currencies and with changes in the interest rates related to our fixed rate debt. We do not believe that any of these risks will have a material impact on our financial condition, results of operations and cash flows.

At the present time, we maintain our cash in short-term government or government guaranteed instruments, short-term commercial paper, and interest bearing bank deposits or demand bank deposits which do not earn interest. A substantial majority of these instruments and deposits are denominated in U.S. dollars, with the exception of funds denominated in Canadian dollars on deposit in Canadian banks to meet short-term operating needs in Canada. We do not presently employ any hedging or similar strategy intended to mitigate against losses that could be incurred as a result of fluctuations in the exchange rates between U.S. and Canadian currencies.

As of July 31, 2010, we had fixed rate debt totaling $2,965,932. This amount consists of the following:

Loan Amount		Interest Rate per Annum
$	1,097,575		5.91	%
	627,056		6.75	%
	668,036		6.82	%
	387,600		8.50	%
	185,665		10.00	%
$	2,965,932	Total

These debt instruments mature from June 2011 through May 2015. As our fixed rate debt instruments mature, we will likely refinance such debt at the existing market interest rates which may be more or less than interest rates on the maturing debt. Since this debt is fixed rate debt, if interest rates were to increase 100 basis points prior to maturity, there would be no impact on earnings or cash flows.

We have neither issued nor own any long-term debt instruments, or any other financial instruments, for trading purposes and as to which we would be subject to material market risks.

We have warrants outstanding with price protection provisions that allow for the reduction in the exercise price of the warrants in the event we subsequently issue common stock or securities convertible into or exercisable for common stock, such as options and warrants, at a price per share less than the warrant exercise price then in effect. In addition, with any reduction to the warrant exercise price, the number of shares of common stock that may be purchased upon exercise of each warrant will be increased proportionately, so that after such adjustment the aggregate warrant exercise price payable for the adjusted number of shares issuable upon exercise will be the same as the aggregate warrant exercise price in effect immediately prior to such adjustment. We account for the warrants with price protection in accordance with FASB ASC 815. We recognize the warrants with price protection in our consolidated balance sheet as liabilities. The warrant liability is revalued at each reporting period and changes in fair value are recognized currently in the consolidated statements of operations under the caption Change in fair value of derivative warrant liability. While the change in fair value of the derivative warrant liability has no effect on our cash flows, the gains or losses can have a significant impact on non-operating income and expenses and thus the net income or loss. As of July 31, 2010, there were 16,503,340 warrants outstanding subject to price protection provisions with an estimated fair value of $5,679,721 or $0.34 per warrant. If the estimated fair value of the warrants increases, there will be a corresponding non-operating expense equal to the change in the value of the liability. Likewise, if the estimated fair value of the warrants decreases, there will be a corresponding non-operating gain equal to the change in the value of the liability. There is a directly proportional relationship between the fair value of the warrants and the market price of the stock; therefore increases or decreases in the market price will lead to corresponding increases or decreases in the value of the warrant liability and result in losses or gains, respectively, on our consolidated statements of operations.

Item 8.

Financial Statements and Supplementary Data.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page

Report of Independent Registered Public Accounting Firm	45

Consolidated Balance Sheets
July 31, 2010 and 2009	46

Consolidated Statements of Operations
For the Years Ended July 31, 2010, 2009 and 2008
and Cumulative From November 2, 1995 (Date of Inception)
to July 31, 2010	47

Consolidated Statements of Changes in Stockholders’ Equity
For the Period November 2, 1995 (Date of Inception)
to July 31, 2010	48

Consolidated Statements of Cash Flows
For the Years Ended July 31, 2010, 2009 and 2008
and Cumulative From November 2, 1995 (Date of Inception)
to July 31, 2010	66

Notes to Consolidated Financial Statements	67

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Generex Biotechnology Corporation

(A Development Stage Company)

We have audited the accompanying consolidated balance sheets of Generex Biotechnology Corporation (a Development Stage Company) (the “Company”) as of July 31, 2010 and 2009 and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the years in the three year period ended July 31, 2010, and for the period November 2, 1995 (date of inception) to July 31, 2010. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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 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 financial position of Generex Biotechnology Corporation as of July 31, 2010 and 2009 and the results of its operations and its cash flows for each of the years in the three year period ended July 31, 2010, and for the period November 2, 1995 (date of inception) to July 31, 2010 in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1, the Company’s experience of negative cash flows from operations since inception and its dependency upon future financing raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of July 31, 2010, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated October 14, 2010 expressed an unqualified opinion thereon.

/s/ MSCM LLP

MSCM LLP

Toronto, Canada

October 14, 2010

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED BALANCE SHEETS

	July 31, 2010			July 31, 2009
ASSETS
Current Assets:
Cash and cash equivalents	$	13,880,870		$	14,197,048
Accounts receivable		70,585			57,792
Inventory (see Note 7)		1,911,883			1,271,456
Other current assets		333,456			766,741
Total Current Assets		16,196,794			16,293,037

Property and Equipment, Net (see Note 3)		1,341,408			1,444,770
Assets Held for Investment, Net (see Note 4)		3,503,110			3,373,564
Patents, Net (see Note 5)		3,533,688			3,702,386

TOTAL ASSETS	$	24,575,000		$	24,813,757

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and accrued expenses (see Note 8)	$	6,554,714		$	7,486,155
Deferred revenue		396,195			140,883
Current maturities of long-term debt (see Note 11)		1,141,861			1,060,788
Current maturities of obligations under capital lease		7,818			43,836
Total Current Liabilities		8,100,588			8,731,662

Obligations Under Capital Lease, Net		—			3,932

Long-Term Debt, Net (see Note 11)		1,824,071			1,854,421

Derivative Warrant Liability (see Note 13)		5,679,721			—

Total Liabilities		15,604,380			10,590,015

Commitments and Contingencies (see Note 9)

Stockholders’ Equity (see Note 14):
Preferred Stock, $.001 par value; authorized 1,000,000 shares at July 31, 2010 and July 31, 2009; -0- shares issued and outstanding at July 31, 2010 and July 31, 2009		—			—
Common stock, $.001 par value; authorized 750,000,000 shares at July 31, 2010 and July 31, 2009; 269,599,615 and 212,628,814 shares issued and outstanding at July 31, 2010 and July 31, 2009, respectively		269,600			212,628
Additional paid-in capital		333,219,309			307,401,016
Deficit accumulated during the development stage		(325,302,472	)		(294,041,489	)
Accumulated other comprehensive income		784,183			651,587
Total Stockholders’ Equity		8,970,620			14,223,742

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	24,575,000		$	24,813,757

The Notes to Consolidated Financial Statements are an integral part of these statements.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS

										Cumulative From
										November 2, 1995
	For the Years Ended July 31,									(Date of Inception)
	2010			2009			2008			to July 31, 2010

Revenues, net	$	1,172,611		$	1,118,509		$	124,891		$	4,790,505

Cost of Goods Sold		812,266			527,733			52,025			1,453,647

Gross profit		360,345			590,776			72,866			3,336,858

Operating Expenses:
Research and development		13,361,156			13,561,681			16,359,030			116,738,331
Research and development - related party		—			—			—			220,218
Selling and marketing		3,709,767			2,120,903			1,562,258			8,142,265
General and administrative		12,719,239			11,164,352			15,597,048			129,520,057
General and administrative - related party		—			—			—			314,328
Total Operating Expenses		29,790,162			26,846,936			33,518,336			254,935,199

Operating Loss		(29,429,817	)		(26,256,160	)		(33,445,470	)		(251,598,341	)

Other Income (Expense):
Miscellaneous income (expense)		750			3			65			197,011
Income from rental operations, net		206,575			320,547			330,533			1,778,583
Interest income		27,045			237,977			1,166,439			7,773,919
Interest expense		(210,083	)		(20,114,595	)		(4,280,558	)		(68,207,251	)
Change in fair value of derivative warrant liability		4,125,590			—			—			(1,855,453	)(1)
Loss on extinguishment of debt		—			—			—			(14,134,068	)

Net Loss Before Undernoted		(25,279,940	)		(45,812,228	)		(36,228,991	)		(326,045,600	)

Minority Interest Share of Loss		—			—			—			3,038,185

Net Loss		(25,279,940	)		(45,812,228	)		(36,228,991	)		(323,007,415	)

Preferred Stock Dividend		—			—			—			2,295,057

Net Loss Available to Common Stockholders	$	(25,279,940	)	$	(45,812,228	)	$	(36,228,991	)	$	(325,302,472	)

Basic and Diluted Net Loss Per Common Share (see Note 16)	$	(.10	)	$	(.32	)	$	(.33	)

Weighted Average Number of Shares of Common Stock Outstanding - basic and diluted (Note 16)		250,949,333			144,409,840			110,991,192

(1) -

includes $5,981,403 as adjustment related to the adoption of FASB ASC Topic 815 in "Cumulative from November 2, 1995 (Date of Inception) to July 31, 2010" column. See Note 13 - Derivative Warrant Liability.

The Notes to Consolidated Financial Statements are an integral part of these statements.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE PERIOD NOVEMBER 2, 1995 (DATE OF INCEPTION) TO JULY 31, 2010

																		Deficit
	SVR															Notes		Accumulated			Accumulated
	Preferred				Common				Treasury				Additional			Receivable -		During the			Other			Total
	Stock				Stock				Stock				Paid-In			Common		Development			Comprehensive			Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Stock		Stage			Income (Loss)			Equity

Balance November 2, 1995 (Inception)		-	$	-		-	$	-		-	$	-	$	-		$	-	$	-		$	-		$	-
Issuance of common stock for cash, February 1996, $.0254		-		-		321,429		321		-		-		7,838			-		-			-			8,159
Issuance of common stock for cash, February 1996, $.0510		-		-		35,142		35		-		-		1,757			-		-			-			1,792
Issuance of common stock for cash, February 1996, $.5099		-		-		216,428		216		-		-		110,142			-		-			-			110,358
Issuance of common stock for cash, March 1996, $10.2428		-		-		2,500		3		-		-		25,604			-		-			-			25,607
Issuance of common stock for cash, April 1996, $.0516		-		-		489,850		490		-		-		24,773			-		-			-			25,263
Issuance of common stock for cash, May 1996, $.0512		-		-		115,571		116		-		-		5,796			-		-			-			5,912
Issuance of common stock for cash, May 1996, $.5115		-		-		428,072		428		-		-		218,534			-		-			-			218,962
Issuance of common stock for cash, May 1996, $10.2302		-		-		129,818		130		-		-		1,327,934					-			-			1,328,064
Issuance of common stock for cash, July 1996, $.0051		-		-		2,606,528		2,606		-		-		10,777			-		-			-			13,383
Issuance of common stock for cash, July 1996, $.0255		-		-		142,857		143		-		-		3,494			-		-			-			3,637
Issuance of common stock for cash, July 1996, $.0513		-		-		35,714		36		-		-		1,797			-		-			-			1,833
Issuance of common stock for cash, July 1996, $10.1847		-		-		63,855		64		-		-		650,282			-		-			-			650,346
Costs related to issuance of common stock		-		-		-		-		-		-		(10,252	)		-		-			-			(10,252	)
Founders Shares transferred for services rendered		-		-		-		-		-		-		330,025			-		-			-			330,025
Comprehensive Income (Loss):
Net loss		-		-		-		-		-		-		-			-		(693,448	)		-			(693,448	)
Other comprehensive income (loss)
Currency translation adjustment		-		-		-		-		-		-		-			-		-			(4,017	)		(4,017	)
Total Comprehensive Income (Loss)																			(693,448	)		(4,017	)		(697,465	)
Balance, July 31, 1996		-	$	-		4,587,764	$	4,588		-	$	-	$	2,708,501		$	-	$	(693,448	)	$	(4,017	)	$	2,015,624

The Notes to Consolidated Financial Statements are an integral part of these statements.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE PERIOD NOVEMBER 2, 1995 (DATE OF INCEPTION) TO JULY 31, 2010

																		Deficit
	SVR															Notes		Accumulated			Accumulated
	Preferred				Common				Treasury				Additional			Receivable -		During the			Other			Total
	Stock				Stock				Stock				Paid-In			Common		Development			Comprehensive			Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Stock		Stage			Income (Loss)			Equity
Balance, August 1, 1996		-	$	-		4,587,764	$	4,588		-	$	-	$	2,708,501		$	-	$	(693,448	)	$	(4,017	)	$	2,015,624
Issuance of common stock for cash, September 1996, $.0509		-		-		2,143		2		-		-		107			-		-			-			109
Issuance of common stock for cash, December 1996, $10.2421		-		-		1,429		1		-		-		14,635			-		-			-			14,636
Issuance of common stock for cash, January 1997, $.0518		-		-		1,466		1		-		-		75			-		-			-			76
Issuance of common stock for cash, March 1997, $10.0833		-		-		12		-		-		-		121			-		-			-			121
Issuance of common stock for cash, May 1997, $.0512		-		-		4,233		4		-		-		213			-		-			-			217
Issuance of common stock for cash, May 1997, $.5060		-		-		4,285,714		4,286		-		-		2,164,127			-		-			-			2,168,413
Costs related to issuance of common stock, May 1997		-		-		-		-		-		-		(108,421	)		-		-			-			(108,421	)
Issuance of common stock for cash, May 1997, $10.1194		-		-		18,214		18		-		-		184,297			-		-			-			184,315
Issuance of common stock for cash, June 1997, $.0504		-		-		10,714		11		-		-		529			-		-			-			540
Issuance of common stock for cash, June 1997, $.5047		-		-		32,143		32		-		-		16,190			-		-			-			16,222
Issuance of common stock for cash, June 1997, $8.9810		-		-		29,579		30		-		-		265,618			-		-			-			265,648
Issuance of common stock for cash, June 1997, $10.0978		-		-		714		1		-		-		7,209			-		-			-			7,210
Issuance of common stock for cash, July 1997, $10.1214		-		-		25,993		26		-		-		263,060			-		-			-			263,086
Costs related to issuance of common stock		-		-		-		-		-		-		(26,960	)		-		-			-			(26,960	)
Founders Shares transferred for services rendered		-		-		-		-		-		-		23,481			-		-			-			23,481
Comprehensive Income (Loss):
Net loss		-		-		-		-		-		-		-			-		(1,379,024	)		-			(1,379,024	)
Other comprehensive income (loss)
Currency translation adjustment		-		-		-		-		-		-		-			-		-			3,543			3,543
Total Comprehensive Income (Loss)																			(1,379,024	)		3,543			(1,375,481	)
Balance, July 31, 1997		-	$	-		9,000,118	$	9,000		-	$	-	$	5,512,782		$	-	$	(2,072,472	)	$	(474	)	$	3,448,836

The Notes to Consolidated Financial Statements are an integral part of these statements.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE PERIOD NOVEMBER 2, 1995 (DATE OF INCEPTION) TO JULY 31, 2010

																		Deficit
	SVR															Notes		Accumulated			Accumulated
	Preferred				Common				Treasury				Additional			Receivable -		During the			Other			Total
	Stock				Stock				Stock				Paid-In			Common		Development			Comprehensive			Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Stock		Stage			Income (Loss)			Equity
Balance, August 1, 1997		-	$	-		9,000,118	$	9,000		-	$	-	$	5,512,782		$	-	$	(2,072,472	)	$	(474	)	$	3,448,836
Issuance of warrants in exchange for services rendered, October 1997, $.50		-		-		-		-		-		-		234,000			-		-			-			234,000
Issuance of common stock in exchange for services rendered, December 1997, $0.05		-		-		234,000		234		-		-		10,698			-		-			-			10,932
Issuance of SVR Preferred Stock in exchange for services rendered, January 1998, $.001		1,000		1		-		-		-		-		99			-		-			-			100
Shares issued pursuant to the January 9, 1998 reverse merger between GBC-Delaware, Inc. and Generex Biotechnology Corporation		-		-		1,105,000		1,105		-		-		(1,105	)		-		-			-			-
Issuance of common stock for cash, March 1998, $2.50		-		-		70,753		71		-		-		176,812			-		-			-			176,883
Issuance of common stock for cash, April 1998, $2.50		-		-		60,000		60		-		-		149,940			-		-			-			150,000
Issuance of common stock in exchange for services rendered, April 1998, $2.50		-		-		38,172		38		-		-		95,392			-		-			-			95,430
Issuance of common stock for cash, May 1998, $2.50		-		-		756,500		757		-		-		1,890,493			-		-			-			1,891,250
Issuance of common stock in exchange for services rendered, May 1998, $2.50		-		-		162,000		162		-		-		404,838			-		-			-			405,000
Issuance of warrants in exchange for services rendered, May 1998, $.60		-		-		-		-		-		-		300,000			-		-			-			300,000
Issuance of common stock for cash, June 1998, $2.50		-		-		286,000		286		-		-		714,714			-		-			-			715,000
Exercise of warrants for cash, June 1998, $0.0667		-		-		234,000		234		-		-		15,374			-		-			-			15,608
Issuance of common stock in exchange for services rendered, June 1998, $2.50		-		-		24,729		24		-		-		61,799			-		-			-			61,823
Comprehensive Income (Loss):
Net loss		-		-		-		-		-		-		-			-		(4,663,604	)		-			(4,663,604	)
Other comprehensive income (loss)
Currency translation adjustment		-		-		-		-		-		-		-			-		-			(198,959	)		(198,959	)
Total Comprehensive Income (Loss)																			(4,663,604	)		(198,959	)		4,862,563
Balance, July 31, 1998		1,000	$	1		11,971,272	$	11,971		-	$	-	$	9,565,836		$	-	$	(6,736,076	)	$	(199,433	)	$	2,642,299

The Notes to Consolidated Financial Statements are an integral part of these statements.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE PERIOD NOVEMBER 2, 1995 (DATE OF INCEPTION) TO JULY 31, 2010

																					Deficit
	SVR																	Notes			Accumulated			Accumulated
	Preferred				Common						Treasury				Additional			Receivable -			During the			Other			Total
	Stock				Stock						Stock				Paid-In			Common			Development			Comprehensive			Stockholders’
	Shares		Amount		Shares			Amount			Shares		Amount		Capital			Stock			Stage			Income (Loss)			Equity
Balance, August 1, 1998		1,000	$	1		11,971,272		$	11,971			-	$	-	$	9,565,836		$	-		$	(6,736,076	)	$	(199,433	)	$	2,642,299
Issuance of common stock for cash, August 1998, $3.00		-		-		100,000			100			-		-		299,900			-			-			-			300,000
Issuance of common stock for cash, August 1998, $3.50		-		-		19,482			19			-		-		68,168			-			-			-			68,187
Redemption of common stock for cash, September 1998, $7.75		-		-		(15,357	)		(15	)		-		-		(119,051	)		-			-			-			(119,066	)
Issuance of common stock for cash, September - October 1998, $3.00		-		-		220,297			220			-		-		660,671			-			-			-			660,891
Issuance of common stock for cash, August - October 1998, $4.10		-		-		210,818			211			-		-		864,142			-			-			-			864,353
Issuance of common stock in exchange for services rendered, August - October 1998, $2.50		-		-		21,439			21			-		-		53,577			-			-			-			53,598
Issuance of common stock in exchange for services rendered, August - October 1998, $4.10		-		-		18,065			18			-		-		74,048			-			-			-			74,066
Issuance of common stock in exchange for services rendered, September 1998, $4.10		-		-		180,000			180			-		-		737,820			-			-			-			738,000
Issuance of warrants in exchange for services rendered, October 1998, $.26		-		-		-			-			-		-		2,064			-			-			-			2,064
Issuance of stock options in exchange for services rendered, November 1998, $1.85		-		-		-			-			-		-		92,500			-			-			-			92,500
Issuance of warrants in exchange for services rendered, November 1998, $1.64		-		-		-			-			-		-		246,000			-			-			-			246,000
Issuance of common stock for cash, November 1998 - January 1999, $3.50		-		-		180,000			180			-		-		629,820			-			-			-			630,000
Issuance of common stock for cash, November 1998 - January 1999, $4.00		-		-		275,000			275			-		-		1,099,725			-			-			-			1,100,000
Issuance of common stock for cash, November 1998 - January 1999, $4.10		-		-		96,852			97			-		-		397,003			-			-			-			397,100
Issuance of common stock in exchange for services rendered, November 1998 - January 1999, $4.10		-		-		28,718			29			-		-		117,715			-			-			-			117,744
Issuance of common stock for cash, November 1998 - January 1999, $5.00		-		-		20,000			20			-		-		99,980			-			-			-			100,000
Issuance of common stock for cash, November 1998 - January 1999, $5.50		-		-		15,000			15			-		-		82,485			-			-			-			82,500
Issuance of common stock in exchange for services rendered, January 1999, $5.00		-		-		392			-			-		-		1,960			-			-			-			1,960
Issuance of common stock for cash, February 1999, $5.00		-		-		6,000			6			-		-		29,994			-			-			-			30,000
Issuance of common stock in exchange for services rendered, February 1999, $6.00		-		-		5,000			5			-		-		29,995			-			-			-			30,000
Issuance of common stock for cash, March 1999, $6.00		-		-		11,000			11			-		-		65,989			-			-			-			66,000
Issuance of common stock for cash, April 1999, $5.50		-		-		363,637			364			-		-		1,999,640			-			-			-			2,000,004
Issuance of warrants in exchange for services rendered, April 1999, $3.21		-		-		-			-			-		-		160,500			-			-			-			160,500
Issuance of warrants in exchange for services rendered, April 1999, $3.17		-		-		-			-			-		-		317,000			-			-			-			317,000
Issuance of warrants in exchange for services rendered, April 1999, $2.89		-		-		-			-			-		-		144,500			-			-			-			144,500
Issuance of warrants in exchange for services rendered, April 1999, $3.27		-		-		-			-							184,310			-			-			-			184,310
Stock adjustment		-		-		714			1			-		-		(1	)		-			-			-			-
Issuance of common stock for cash, May 1999, $5.50		-		-		272,728			273			-		-		1,499,731			-			-			-			1,500,004
Issuance of common stock in exchange for services rendered, May - June 1999, $5.50		-		-		60,874			61			-		-		334,746			-									334,807
Exercise of warrants for cash, June 1999, $5.50		-		-		388,375			389			-				1,941,484			-			-			-			1,941,873
Exercise of warrants in exchange for note receivable, June 1999, $5.00		-		-		94,776			95			-		-		473,787			(473,882	)		-			-			-
Exercise of warrants in exchange for services rendered, June 1999, $5.00		-		-		13,396			13			-		-		66,967			-			-			-			66,980
Reduction of note receivable in exchange for services rendered		-		-		-			-			-		-		-			38,979			-			-			38,979
Shares tendered in conjunction with warrant exercise, June 1999, $7.8125		-		-		(323,920	)		(324	)		-		-		(2,530,301	)		-			-			-			(2,530,625	)
Exercise of warrants for shares tendered, June 1999, $5.00		-		-		506,125			506			-		-		2,530,119			-			-			-			2,530,625
Cost of warrants redeemed for cash		-		-		-			-			-				(3,769	)		-			-			-			(3,769	)
Cost related to warrant redemption, June 1999		-		-		-			-			-		-		(135,431	)		-			-			-			(135,431	)
Costs related to issuance of common stock		-		-		-			-			-		-		(1,179,895	)		-			-			-			(1,179,895	)
Comprehensive Income (Loss):
Net Loss		-		-		-			-			-		-		-			-			(6,239,602	)		-			(6,239,602	)
Other comprehensive income (loss):
Currency translation adjustment		-		-		-			-			-		-		-			-			-			1,393			1,393
Total Comprehensive Income (Loss)																						(6,239,602	)		1,393			(6,238,209	)
Balance, July 31, 1999		1,000	$	1		14,740,683		$	14,741			-	$	-	$	20,903,728		$	(434,903	)	$	(12,975,678	)	$	(198,040	)	$	7,309,849

The Notes to Consolidated Financial Statements are an integral part of these statements.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE PERIOD NOVEMBER 2, 1995 (DATE OF INCEPTION) TO JULY 31, 2010

																					Deficit
	SVR																	Notes			Accumulated			Accumulated
	Preferred				Common						Treasury				Additional			Receivable -			During the			Other			Total
	Stock				Stock						Stock				Paid-In			Common			Development			Comprehensive			Stockholders’
	Shares		Amount		Shares			Amount			Shares		Amount		Capital			Stock			Stage			Income (Loss)			Equity
Balance, August 1, 1999		1,000	$	1		14,740,683		$	14,741			-	$	-	$	20,903,728		$	(434,903	)	$	(12,975,678	)	$	(198,040	)	$	7,309,849
Adjustment for exercise of warrants recorded June 1999, $5.00		-		-		(2,300	)		(2	)		-		-		2			-			-			-			-
Issuance of common stock for cash, September 1999, $6.00		-		-		2,500			2			-		-		14,998			-			-			-			15,000
Issuance of common stock for cash pursuant to private placement, January 2000, $4.25		-		-		470,590			471			-		-		1,999,537			-			-			-			2,000,008
Financing costs associated with private placement, January, 2000		-		-		-			-			-		-		(220,192	)		-			-			-			(220,192	)
Issuance of stock in exchange for services rendered, January 2000, $5.00		-		-		8,100			8			-		-		40,492			-			-			-			40,500
Granting of stock options for services rendered, January 2000		-		-		-			-			-		-		568,850			-			-			-			568,850
Granting of warrants for services rendered, January 2000		-		-		-			-			-		-		355,500			-			-			-			355,500
Exercise of warrants for cash, February 2000, $5.50		-		-		2,000			2			-		-		10,998			-			-			-			11,000
Exercise of warrants for cash, March 2000, $5.50		-		-		29,091			29			-		-		159,972			-			-			-			160,001
Exercise of warrants for cash, March 2000, $6.00		-		-		2,000			2			-		-		11,998			-			-			-			12,000
Exercise of warrants for cash, March 2000, $7.50		-		-		8,000			8			-		-		59,992			-			-			-			60,000
Issuance of common stock for cash pursuant to private placement, June 2000, $6.00		-		-		1,041,669			1,042			-		-		6,248,972			-			-			-			6,250,014
Financing costs associated with private placement, June 2000		-		-		-			-			-		-		(385,607	)		-			-			-			(385,607	)
Issuance of common stock for services, June 2000, $6.00		-		-		4,300			4			-		-		25,796			-			-			-			25,800
Exercise of warrants for cash, July 2000, $6.00		-		-		3,000			3			-		-		17,997			-			-			-			18,000
Exercise of warrants for cash, July 2000, $7.50		-		-		16,700			17			-		-		125,233			-			-			-			125,250
Granting of stock options for services rendered, July 2000		-		-		-			-			-		-		496,800			-			-			-			496,800
Reduction of note receivable in exchange for services rendered		-		-		-			-			-		-		-			384,903			-			-			384,903
Accrued interest on note receivable		-		-		-			-			-		-		-			(4,118	)		-			-			(4,118	)
Comprehensive Income (Loss):
Net Loss		-		-		-			-			-		-		-			-			(8,841,047	)		-			(8,841,047	)
Other comprehensive income (loss):
Currency translation adjustment		-		-		-			-			-		-		-			-			-			32,514			32,514
Total Comprehensive Income (Loss)																						(8,841,047	)		32,514			(8,808,533	)
Balance, July 31, 2000		1,000	$	1		16,326,333		$	16,327			-	$	-	$	30,435,066		$	(54,118	)	$	(21,816,725	)	$	(165,526	)	$	8,415,025

The Notes to Consolidated Financial Statements are an integral part of these statements.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE PERIOD NOVEMBER 2, 1995 (DATE OF INCEPTION) TO JULY 31, 2010

																			Deficit
	SVR															Notes			Accumulated			Accumulated
	Preferred				Common				Treasury				Additional			Receivable -			During the			Other			Total
	Stock				Stock				Stock				Paid-In			Common			Development			Comprehensive			Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Stock			Stage			Income (Loss)			Equity
Balance, August 1, 2000		1,000	$	1		16,326,333	$	16,327		-	$	-	$	30,435,066		$	(54,118	)	$	(21,816,725	)	$	(165,526	)	$	8,415,025
Exercise of warrants for cash, August 2000, $6.00		-		-		2,000		2		-		-		11,998			-			-			-			12,000
Issuance of common stock for services rendered August 2000		-		-		35,000		35		-		-		411,215			-			-			-			411,250
Issuance of warrants in exchange for equity line agreement, August 2000		-		-		-		-		-		-		3,406,196			-			-			-			3,406,196
Exercise of warrants for cash, August 2000, $7.50		-		-		30,300		30		-		-		227,220			-			-			-			227,250
Exercise of warrants for cash, August 2000, $8.6625		-		-		30,000		30		-		-		259,845			-			-			-			259,875
Cashless exercise of warrants, August 2000		-		-		8,600		9		-		-		(9	)		-			-			-			-
Exercise of warrants for cash, August 2000, $10.00		-		-		10,000		10		-		-		99,990			-			-			-			100,000
Exercise of warrants for cash, September 2000, $8.6625		-		-		63,335		63		-		-		548,576			-			-			-			548,639
Exercise of warrants for cash, September 2000, $5.50		-		-		16,182		16		-		-		88,986			-			-			-			89,002
Exercise of warrants for cash, September 2000, $6.00		-		-		53,087		53		-		-		318,470			-			-			-			318,523
Exercise of warrants for cash, September 2000, $10.00		-		-		9,584		10		-		-		95,830			-			-			-			95,840
Exercise of warrants for cash, September 2000, $7.50		-		-		32,416		32		-		-		243,088			-			-			-			243,120
Issuance of common stock for cash pursuant to private placement, October 2000, $11.00		-		-		2,151,093		2,151		-		-		23,659,872			-			-			-			23,662,023
Exercise of warrants for cash, Oct. 2000, $6.00		-		-		1,000		1		-		-		5,999			-			-			-			6,000
Financing costs associated with private placement, October 2000		-		-		-		-		-		-		(1,956,340	)		-			-			-			(1,956,340	)
Exercise of warrants for cash, November - December 2000, $4.25		-		-		23,528		23		-		-		99,971			-			-			-			99,994
Cashless exercise of warrants, December 2000		-		-		3,118		3		-		-		(3	)		-			-			-			-
Exercise of warrants for cash, November - December 2000, $6.00		-		-		22,913		23		-		-		137,455			-			-			-			137,478
Exercise of warrants for cash, December 2000, $7.00		-		-		8,823		9		-		-		61,752			-			-			-			61,761
Issuance of common stock as employee compensation, December 2000		-		-		8,650		8		-		-		100,548			-			-			-			100,556
Exercise of warrants for cash, January 2001, $6.00		-		-		3,000		3		-		-		17,997			-			-			-			18,000
Issuance of common stock for cash pursuant to private placement, January 2001, $14.53		-		-		344,116		344		-		-		4,999,656			-			-			-			5,000,000
Financing costs associated with private placement, January 2001		-		-		-		-		-		-		(200,000	)		-			-			-			(200,000	)
Issuance of common stock pursuant to litigation settlement, January 2001		-		-		2,832		2		-		-		21,096			-			-			-			21,098
Granting of stock options in exchange for services rendered, January 2001		-		-		-		-		-		-		745,000			-			-			-			745,000
Granting of stock options in exchange for services rendered, February 2001		-		-		-		-		-		-		129,600			-			-			-			129,600
Exercise of stock options for cash, February 2001, $5.00		-		-		50,000		50		-		-		249,950			-			-			-			250,000
Exercise of warrants for cash, March 2001, $6.00		-		-		500		1		-		-		2,999			-			-			-			3,000
Exercise of stock options in exchange for note receivable, March 2001		-		-		50,000		50		-		-		249,950			(250,000	)		-			-			-
Issuance of common stock in exchange for services rendered, March 2001, $5.50		-		-		8,000		8		-		-		43,992			-			-			-			44,000
Granting of stock options in exchange for services rendered, May 2001		-		-		-		-		-		-		592,300			-			-			-			592,300
Exercise of stock options for cash, June 2001, $5.00		-		-		75,000		75		-		-		374,925			-			-			-			375,000
Exercise of stock options for cash, June 2001, $5.50		-		-		12,500		12		-		-		68,738			-			-			-			68,750
Exercise of warrants for cash, June 2001, $6.00		-		-		4,000		4		-		-		23,996			-			-			-			24,000
Exercise of stock options for cash, July 2001, $5.00		-		-		7,500		8		-		-		37,492			-			-			-			37,500
Exercise of stock options for cash, July 2001, $5.50		-		-		2,500		3		-		-		13,747			-			-			-			13,750
Exercise of warrants for cash, July 2001, $6.00		-		-		2,000		2		-		-		11,998			-			-			-			12,000
Issuance of common stock for cash pursuant to private placement, July 2001, $9.25		-		-		1,254,053		1,254		-		-		11,598,736			-			-			-			11,599,990
Financing costs associated with private placement, July 2001		-		-		-		-		-		-		(768,599	)		-			-			-			(768,599	)
Shares issued in exchange for services rendered, July 2001, $9.25		-		-		23,784		24		-		-		219,978			-			-			-			220,002
Shares issued for Anti-Dilution Provisions, July 2001		-		-		5,779		6		-		-		53,450			-			-			-			53,456
Issuance of warrants in exchange for services rendered, July 2001		-		-		-		-		-		-		19,134			-			-			-			19,134
Accrued interest on note receivable		-		-		-		-		-		-		-			(10,182	)		-			-			(10,182	)
Comprehensive Income (Loss):
Net Loss		-		-		-		-		-		-		-			-			(27,097,210	)		-			(27,097,210	)
Other comprehensive income (loss):
Currency translation adjustment		-		-		-		-		-		-		-			-			-			(81,341	)		(81,341	)
Total Comprehensive Income (Loss)																				(27,097,210	)		(81,341	)		(27,178,551	)
Balance at July 31, 2001		1,000	$	1		20,681,526	$	20,681		-	$	-	$	76,761,860		$	(314,300	)	$	(48,913,935	)	$	(246,867	)	$	27,307,440

The Notes to Consolidated Financial Statements are an integral part of these statements.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE PERIOD NOVEMBER 2, 1995 (DATE OF INCEPTION) TO JULY 31, 2010

																				Deficit
	SVR																Notes			Accumulated			Accumulated
	Preferred				Common				Treasury						Additional		Receivable -			During the			Other			Total
	Stock				Stock				Stock						Paid-In		Common			Development			Comprehensive			Stockholders’
	Shares		Amount		Shares		Amount		Shares			Amount			Capital		Stock			Stage			Income (Loss)			Equity
Balance, August 1, 2001		1,000	$	1		20,681,526	$	20,681		-		$	-		$	76,761,860	$	(314,300	)	$	(48,913,935	)	$	(246,867	)	$	27,307,440
Exercise of stock options for cash, August 2001, $5.50		-		-		5,000		5		-			-			27,495		-			-			-			27,500
Purchase of Treasury Stock for cash October 2001, $3.915		-		-		-		-		(10,000	)		(39,150	)		-		-			-			-			(39,150	)
Issuance of stock options in exchange for services rendered, December 2001		-		-		-		-		-			-			25,000		-			-			-			25,000
Issuance of common stock as employee compensation, January 2002		-		-		10,800		11		-			-			71,161		-			-			-			71,172
Preferred stock dividend paid January 2002		-		-		-		-		-			-			-		-			(720,900	)		-			(720,900	)
Purchase of Treasury Stock for cash February 2002, $4.693		-		-		-		-		(31,400	)		(147,346	)		-		-			-			-			(147,346	)
Issuance of warrants in exchange for services rendered, March 2002		-		-		-		-		-			-			202,328		-			-			-			202,328
Purchase of Treasury Stock for cash March 2002, $4.911		-		-		-		-		(7,700	)		(37,816	)		-		-			-			-			(37,816	)
Purchase of Treasury Stock for cash April 2002, $4.025		-		-		-		-		(12,800	)		(54,516	)		-		-			-			-			(54,516	)
Issuance of stock options in exchange for services rendered, June 2002		-		-		-		-		-			-			132,387		-			-			-			132,387
Purchase of Treasury Stock for cash July 2002, $4.025		-		-		-		-		(34,600	)		(116,703	)		-		-			-			-			(116,703	)
Accrued interest on note receivable		-		-		-		-		-			-			-		(22,585	)		-			-			(22,585	)
Comprehensive Income (Loss):
Net Loss		-		-		-		-		-			-			-		-			(13,693,034	)		-			(13,693,034	)
Other comprehensive income (loss):
Currency translation adjustment		-		-		-		-		-			-			-		-			-			(71,185	)		(71,185	)
Total Comprehensive Income (Loss)																					(13,693,034	)		(71,185	)		(13,764,219	)
Balance at July 31, 2002		1,000	$	1		20,697,326	$	20,697		(96,500	)	$	(395,531	)	$	77,220,231	$	(336,885	)	$	(63,327,869	)	$	(318,052	)	$	12,862,592

The Notes to Consolidated Financial Statements are an integral part of these statements.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE PERIOD NOVEMBER 2, 1995 (DATE OF INCEPTION) TO JULY 31, 2010

																					Deficit
	SVR																	Notes			Accumulated			Accumulated
	Preferred				Common				Treasury						Additional			Receivable -			During the			Other			Total
	Stock				Stock				Stock						Paid-In			Common			Development			Comprehensive			Stockholders’
	Shares		Amount		Shares		Amount		Shares			Amount			Capital			Stock			Stage			Income (Loss)			Equity
Balance, August 1, 2002		1,000	$	1		20,697,326	$	20,697		(96,500	)	$	(395,531	)	$	77,220,231		$	(336,885	)	$	(63,327,869	)	$	(318,052	)	$	12,862,592
Receipt of restricted shares of common stock as settlement for executive loan, September 2002, $1.90		-		-		-		-		(592,716	)		(1,126,157	)		-			-			-			-			(1,126,157	)
Purchase of Treasury Stock for cash October 2002, $1.5574		-		-		-		-		(40,000	)		(62,294	)		-			-			-			-			(62,294	)
Issuance of warrants in exchange for the services rendered, November 2002, $2.50		-		-		-		-		-			-			988,550			-			-			-			988,550
Issuance of stock options in exchange for services receivable, November 2002, $2.10		-		-		-		-		-			-			171,360			-			-			-			171,360
Issuance of common stock in exchange for services rendered, November 2002, $2.10		-		-		30,000		30		-			-			62,970			-			-			-			63,000
Issuance of common stock as employee compensation, January 2003, $2.10		-		-		9,750		10		-			-			20,465			-			-			-			20,475
Purchase of Treasury Stock for cash December 2002,$2.0034		-		-		-		-		(13,000	)		(26,044	)		-			-			-			-			(26,044	)
Preferred stock dividend paid January 2003		-		-		-		-		-			-			-			-			(764,154	)		-			(764,154	)
Issuance of common stock in exchange for services rendered, March 2003, $1.00		-		-		70,000		70		-			-			69,930			-			-			-			70,000
Issuance of common stock for cash pursuant to private placement, May 2003, $1.15		-		-		2,926,301		2,926		-			-			3,362,324			-			-			-			3,365,250
Financing costs associated with private placement, May 2003		-		-		-		-		-			-			(235,568	)		-			-			-			(235,568	)
Exercise of warrants for cash, May 2003, $1.50		-		-		35,000		35		-			-			52,465			-			-			-			52,500
Issuance of common stock for cash pursuant to private placement, June 2003, $1.50		-		-		666,667		667		-			-			999,333			-			-			-			1,000,000
Issuance of common stock as employee compensation, June 2003, $2.00		-		-		100		-		-			-			200			-			-			-			200
Exercise of warrants for cash, June 2003, $1.50		-		-		1,496,001		1,496		-			-			2,242,506			-			-			-			2,244,002
Cashless exercise of warrants, June 2003		-		-		16,379		16		-			-			(16	)		-			-			-			-
Exercise of stock options for cash, June 2003, $1.59		-		-		70,000		70		-			-			111,230			-			-			-			111,300
Accrued interest on note receivable		-		-		-		-		-			-			-			(23,113	)		-			-			(23,113	)
Comprehensive Income (Loss):
Net Loss		-		-		-		-		-			-			-			-			(13,261,764	)		-			(13,261,764	)
Other comprehensive income (loss)
Currency translation adjustment		-		-		-		-		-			-			-			-			-			406,830			406,830
Total Comprehensive Income (Loss)																						(13,261,764	)		406,830			(12,854,934	)
Balance at July 31, 2003		1,000	$	1		26,017,524	$	26,017		(742,216	)	$	(1,610,026	)	$	85,065,980		$	(359,998	)	$	(77,353,787	)	$	88,778		$	5,856,965

The Notes to Consolidated Financial Statements are an integral part of these statements.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE PERIOD NOVEMBER 2, 1995 (DATE OF INCEPTION) TO JULY 31, 2010

																							Deficit
	SVR																			Notes			Accumulated			Accumulated
	Preferred				Common						Treasury						Additional			Receivable -			During the			Other		Total
	Stock				Stock						Stock						Paid-In			Common			Development			Comprehensive		Stockholders’
	Shares		Amount		Shares			Amount			Shares			Amount			Capital			Stock			Stage			Income (Loss)		Equity
Balance, August 1, 2003		1,000	$	1		26,017,524		$	26,017			(742,216	)	$	(1,610,026	)	$	85,065,980		$	(359,998	)	$	(77,353,787	)	$	88,778	$	5,856,965
Shares issued pursuant to acquisition of Antigen Express Inc., August 2003		-		-		2,779,974			2,780			-			-			4,639,777			-			-			-		4,642,557
Cost of stock options to be assumed in conjunction with merger		-		-		-			-			-			-			154,852			-			-			-		154,852
Exercise of stock options for cash, September 2003,$1.59		-		-		10,000			10			-			-			15,890			-			-			-		15,900
Exercise of stock options for cash, October 2003, $2.10		-		-		14,900			15			-			-			31,275			-			-			-		31,290
Exercise of stock options for cash, October 2003, $1.59		-		-		10,000			10			-			-			15,890			-			-			-		15,900
Exercise of stock options for cash, October 2003, $0.30		-		-		65,000			65			-			-			19,435			-			-			-		19,500
Exercise of stock options for cash, October 2003, $0.55		-		-		40,000			40			-			-			21,960			-			-			-		22,000
Issuance of common stock In exchange for services rendered, October 2003, $1.98		-		-		150,000			150			-			-			296,850			-			-			-		297,000
Issuance of common stock In exchange for services rendered, October 2003, $1.84		-		-		337,500			338			-			-			620,662			-			-			-		621,000
Issuance of warrants in exchange for the services rendered October 2003 (at $1.35)		-		-		-			-			-			-			27,000			-			-			-		27,000
Exercise of stock options for cash, November 2003,$2.10		-		-		10,500			10			-			-			22,040			-			-			-		22,050
Redemption of Treasury Stock, November 2003, $2.17		-		-		(742,216	)		(742	)		742,216			1,610,026			(1,609,284	)		-			-			-		-
Granting of stock options in exchange for services, November 2003 (at $1.71)		-		-		-			-			-			-			151,433			-			-			-		151,433
Issuance of common stock for cash pursuant to private placement, Jan 2004, $1.47		-		-		1,700,680			1,701			-			-			2,498,299			-			-			-		2,500,000
Issuance of common stock for cash pursuant to private placement, Jan 2004, $1.80		-		-		55,556			56			-			-			99,944			-			-			-		100,000
Issuance of common stock for cash pursuant to private placement, Jan 2004, $1.75		-		-		228,572			229			-			-			399,771			-			-			-		400,000
Financing costs associated with private placement, January 2004		-		-		-			-			-			-			(68,012	)		-			-			-		(68,012	)
Preferred Stock Dividend paid in January		-		-		-			-			-			-			-			-			(810,003	)		-		(810,003	)
Issuance of common stock for cash pursuant to private placement, Feb 2004, $1.60		-		-		93,750			94			-			-			149,906			-			-			-		150,000
Issuance of common stock for cash pursuant to private placement, Feb 2004, $1.66		-		-		68,675			69			-			-			113,932			-			-			-		114,001
Issuance of common stock for cash pursuant to private placement, Feb 2004, $1.50		-		-		666,667			667			-			-			999,334			-			-			-		1,000,001
Issuance of common stock as employee compensation, Feb 2004, $1.48		-		-		8,850			8			-			-			13,089			-			-			-		13,097
Issuance of common stock In exchange for services rendered, Feb 2004, $1.48		-		-		175,000			175			-			-			258,825			-			-			-		259,000
Issuance of common stock In exchange for services rendered, Feb 2004, $1.51		-		-		112,500			113			-			-			169,762			-			-			-		169,875
Issuance of common stock for cash pursuant to private placement, July 2004, $1.22		-		-		2,459,016			2,459			-			-			2,997,541			-			-			-		3,000,000
Financing costs associated with private placement, July 2004		-		-		-			-			-			-			(41,250	)		-			-			-		(41,250	)
Variable accounting non-cash compensation expense		-		-		-			-			-			-			45,390			-			-			-		45,390
Accrued interest on note receivable		-		-		-			-			-			-			-			(24,805	)		-			-		(24,805	)
Comprehensive Income (Loss):
Net Loss		-		-		-			-			-			-			-			-			(18,362,583	)		-		(18,362,583	)
Other comprehensive income (loss)
Currency translation adjustment		-		-		-			-			-			-			-			-			-			207,593		207,593
Total Comprehensive Income (Loss)																								(18,362,583	)		207,593		(18,154,990	)
Balance at July 31, 2004		1,000	$	1		34,262,448		$	34,264			-		$	-		$	97,110,291		$	(384,803	)	$	(96,526,373	)	$	296,371	$	529,751

The Notes to Consolidated Financial Statements are an integral part of these statements.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE PERIOD NOVEMBER 2, 1995 (DATE OF INCEPTION) TO JULY 31, 2010

																					Deficit
	SVR																	Notes			Accumulated			Accumulated
	Preferred				Common						Treasury				Additional			Receivable -			During the			Other		Total
	Stock				Stock						Stock				Paid-In			Common			Development			Comprehensive		Stockholders’
	Shares		Amount		Shares			Amount			Shares		Amount		Capital			Stock			Stage			Income (Loss)		Equity
Balance, August 1, 2004		1,000	$	1		34,262,448		$	34,264			-	$	-	$	97,110,291		$	(384,803	)	$	(96,526,373	)	$	296,371	$	529,751
Issuance of common stock In exchange for services rendered, Aug 2004, $1.09		-		-		620,000			620			-		-		675,180			-			-			-		675,800
Issuance of warrants in exchange for services rendered Aug 2004, $1.08		-		-		-			-			-		-		415,000			-			-			-		415,000
Granting of stock options in exchange for services ,Oct 2004, $0.94		-		-		-			-			-		-		75,600			-			-			-		75,600
Cancellation of common stock for non-performance of services, Oct 2004, $0.94		-		-		(75,000	)		(75	)		-		-		(137,925	)		-			-			-		(138,000	)
Issuance of warrants in conjunction with financing, Nov 2004, $0.91		-		-		-			-			-		-		89,900			-			-			-		89,900
Issuance of warrants in conjunction with convertible debentures, $4,000,000, Nov 2004 $0.91		-		-		-			-			-		-		1,722,222			-			-			-		1,722,222
Value of beneficial conversion feature on convertible debentures, $4,000,000, Nov 2004 $0.91		-		-		-			-			-		-		1,722,222			-			-			-		1,722,222
Issuance of common stock In exchange for services rendered, Dec 2004, $0.71		-		-		48,000			48			-		-		34,032			-			-			-		34,080
Conversion of Series A Preferred Stock, Dec 2004$25.77		-		-		534,085			534			-		-		14,309,523			-			-			-		14,310,057
Issuance of common stock In exchange for services rendered, Jan 2005, $0.85		-		-		18,000			18			-		-		15,282			-			-			-		15,300
Issuance of common stock In exchange for services rendered, Jan 2005, $0.75		-		-		40,000			40			-		-		29,960			-			-			-		30,000
Issuance of common stock In exchange for services rendered, Feb 2005, $0.69		-		-		18,000			18			-		-		12,402			-			-			-		12,420
Issuance of common stock as repayment of principal and interest due, $4,000,000, Feb 2005		-		-		250,910			251			-		-		181,262			-			-			-		181,513
Issuance of common stock In exchange for services rendered, Feb 2005, $0.68		-		-		50,000			50			-		-		33,950			-			-			-		34,000
Issuance of common stock as repayment of principal and interest due, $4,000,000, Mar 2005		-		-		265,228			265			-		-		162,197			-			-			-		162,462
Issuance of common stock as repayment of principal and interest due, $4,000,000, Apr 2005		-		-		314,732			315			-		-		162,275			-			-			-		162,590
Issuance of common stock in connection with conversion of $143,500 of $4,000,000 debenture, Apr 2005		-		-		175,316			175			-		-		143,584			-			-			-		143,759
Issuance of common stock as employee compensation, Apr 2005, $0.56		-		-		8,800			9			-		-		4,919			-			-			-		4,928
Issuance of warrants in conjunction with convertible debentures, $500,000, Apr 2005, $0.82		-		-		-			-			-		-		245,521			-			-			-		245,521
Value of beneficial conversion feature on convertible debentures, $500,000, Apr 2005, $0.82		-		-		-			-			-		-		86,984			-			-			-		86,984
Issuance of warrants in conjunction with convertible debentures, $100,000, Apr 2005, $0.82		-		-		-			-			-		-		49,104			-			-			-		49,104
Value of beneficial conversion feature on convertible debentures, $100,000, Apr 2005, $0.82		-		-		-			-			-		-		17,397			-			-			-		17,397
Issuance of warrants in exchange for services rendered Apr 2005, $0.82		-		-		-			-			-		-		40,000			-			-			-		40,000
Issuance of common stock In exchange for services rendered, Apr 2005, $0.82		-		-		350,000			350			-		-		286,650			-			-			-		287,000
Issuance of common stock in satisfaction of accounts payable, Apr 2005, $0.82		-		-		950,927			951			-		-		778,809			-			-			-		779,760
Granting of stock options in exchange for outstanding liabilities, Apr 2005, $0.001		-		-		-			-			-		-		1,332,052			-			-			-		1,332,052
Issuance of common stock as repayment of principal and interest due, $4,000,000, May 2005		-		-		482,071			482			-		-		321,877			-			-			-		322,359
Issuance of common stock in connection with conversion of $300,000 of $4,000,000 debenture, May 2005		-		-		365,914			366			-		-		299,683			-			-			-		300,049
Issuance of common stock in connection with conversion of $244,000 of $4,000,000 debenture, May 2005		-		-		297,659			298			-		-		243,783			-			-			-		244,081
Issuance of common stock in connection with conversion of $410,000 of $4,000,000 debenture, May 2005		-		-		500,000			500			-		-		409,500			-			-			-		410,000
Issuance of warrants in conjunction with 1st extension of due date of $600,000 convertible debentures, May 2005, $0.82		-		-		-			-			-		-		717,073			-			-			-		717,073
Issuance of common stock as repayment of principal and interest due, $4,000,000, June 2005		-		-		311,307			311			-		-		244,644			-			-			-		244,955
Issuance of common stock in conjunction with financing, $2,000,000, June 2005, $0.82		-		-		170,732			171			-		-		139,829			-			-			-		140,000
Issuance of warrants in conjunction with financing, $2,000,000, June 2005, $0.82		-		-		-			-			-		-		20,300			-			-			-		20,300
Issuance of warrants in conjunction with convertible debentures, $2,000,000, June 2005, $0.82		-		-		-			-			-		-		828,571			-			-			-		828,571
Value of beneficial conversion feature on convertible debentures, $2,000,000, June 2005, $0.82		-		-		-			-			-		-		1,171,429			-			-			-		1,171,429
Issuance of common stock in connection with conversion of $100,000 of $2,000,000 debenture, June 2005		-		-		166,667			167			-		-		99,833			-			-			-		100,000
Issuance of common stock in connection with conversion of $190,000 of $2,000,000 debenture, June 2005		-		-		316,927			317			-		-		189,839			-			-			-		190,156
Issuance of common stock In exchange for services rendered, June 2005, $0.60		-		-		63,207			63			-		-		37,861			-			-			-		37,924
Issuance of common stock in satisfaction of accounts payable, June 2005, $0.82		-		-		90,319			90			-		-		73,971			-			-			-		74,061
Issuance of common stock in connection with conversion of $17,000 of $2,000,000 debenture, July 2005		-		-		28,398			28			-		-		17,011			-			-			-		17,039
Issuance of common stock in connection with conversion of $75,000 of $2,000,000 debenture, July 2005		-		-		125,000			125			-		-		75,035			-			-			-		75,160
Issuance of warrants in conjunction with 2nd extension of due date of $600,000 convertible debentures, July 2005, $0.82		-		-		-			-			-		-		629,268			-			-			-		629,268
Issuance of common stock as repayment of principal and interest due, $4,000,000, July 2005		-		-		364,123			364			-		-		237,586			-			-			-		237,950
Issuance of common stock in satisfaction of accounts payable, July 2005, $0.82		-		-		820,128			820			-		-		671,685			-			-			-		672,505
Granting of stock options in exchange for services, July 2004, $0.63		-		-		-			-			-		-		17,155			-			-			-		17,155
Accrued interest on note receivable		-		-		-			-			-		-		-			(6,300	)		-			-		(6,300	)
Write-off of uncollectible notes receivable - common stock		-		-		-			-			-		-		-			391,103			-			-		391,103
Variable accounting non-cash compensation expense		-		-		-			-			-		-		-			-			-			-		-
Comprehensive Income (Loss):
Net Loss		-		-		-			-			-		-		-			-			(24,001,735	)		-		(24,001,735	)
Other comprehensive income (loss)
Currency translation adjustment		-		-		-			-			-		-		-			-			-			272,478		272,478
Total Comprehensive Income (Loss)																						(24,001,735	)		272,478		(23,729,257	)
Balance at July 31, 2005		1,000	$	1		41,933,898		$	41,935			-	$	-	$	126,044,326		$	-		$	(120,528,108	)	$	568,849	$	6,127,003

The Notes to Consolidated Financial Statements are an integral part of these statements.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE PERIOD NOVEMBER 2, 1995 (DATE OF INCEPTION) TO JULY 31, 2010

																	Deficit
	SVR														Notes		Accumulated			Accumulated
	Preferred				Common				Treasury				Additional		Receivable -		During the			Other		Total
	Stock				Stock				Stock				Paid-In		Common		Development			Comprehensive		Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Stock		Stage			Income (Loss)		Equity

Balance, August 1, 2005		1,000	$	1		41,933,898	$	41,935		-	$	-	$	126,044,326	$	-	$	(120,528,108	)	$	568,849	$	6,127,003
Issuance of common stock as repayment of monthly
amortization payments due, $4,000,000, August 2005		-		-		429,041		429		-		-		282,738		-		-			-		283,167
Issuance of common stock in exchange for the services
rendered August 2005 (at $0.61)		-		-		19,500		19		-		-		11,877		-		-			-		11,896
Issuance of common stock in exchange for the services
rendered August 2005 (at $0.59)		-		-		246,429		246		-		-		145,147		-		-			-		145,393
Issuance of common stock as repayment of monthly
amortization payments due, $4,000,000, September 2005		-		-		388,730		389		-		-		267,835		-		-			-		268,224
Issuance of common stock as repayment of monthly
amortization payments due, $2,000,000, September 2005		-		-		322,373		322		-		-		222,115		-		-			-		222,437
Issuance of common stock in connection with conversion of
$504,538 of $2,000,000 debenture, September 2005		-		-		841,309		841		-		-		503,945		-		-			-		504,786
Issuance of common stock in connection with conversion of
$286,538 of $2,000,000 debenture, September 2005		-		-		477,962		478		-		-		286,299		-		-			-		286,777
Issuance of common stock in connection with conversion of
$457,200 of 2nd $2,000,000 debenture, September 2005		-		-		762,000		762		-		-		456,739		-		-			-		457,501
Issuance of common stock in satisfaction of accounts
payable, September 2005, $0.81		-		-		162,933		163		-		-		113,442		-		-			-		113,605
Issuance of common stock in connection with conversion of
$211,538 of $2,000,000 debenture, September 2005		-		-		353,665		354		-		-		211,845		-		-			-		212,199
Issuance of common stock in connection with conversion of
$150,000 of 2nd $2,000,000 debenture, September 2005		-		-		250,000		250		-		-		149,750		-		-			-		150,000
Issuance of common stock in connection with conversion of
$457,317 of 2nd $2,000,000 debenture, September 2005		-		-		762,195		762		-		-		458,209		-		-			-		458,971
Issuance of common stock in conjunction with financing,
2nd $2,000,000, September 2005, $0.82		-		-		170,732		171		-		-		139,829		-		-			-		140,000
Issuance of warrants in conjunction with financing,
2nd $2,000,000, September 2005, $0.82		-		-		-		-		-		-		30,600		-		-			-		30,600
Issuance of warrants in conjunction with convertible
debentures, 2nd $2,000,000, September 2005 (at $0.82)		-		-		-		-		-		-		785,185		-		-			-		785,185
Value of Beneficial Conversion Feature on Convertible
Debentures, 2nd $2,000,000, September 2005 (at $0.82)		-		-		-		-		-		-		1,185,185		-		-			-		1,185,185
Issuance of common stock as repayment of monthly
amortization payments due, $4,000,000, October 2005		-		-		243,836		244		-		-		163,126		-		-			-		163,370
Issuance of common stock as repayment of monthly
amortization payments due, $2,000,000, October 2005		-		-		67,949		68		-		-		45,458		-		-			-		45,526
Issuance of common stock in connection with conversion of
$307,317 of 2nd $2,000,000 debenture, October 2005		-		-		512,195		512		-		-		306,805		-		-			-		307,317
Issuance of common stock in connection with conversion of
$300,000 of $2,000,000 debenture, October 2005		-		-		501,397		501		-		-		300,337		-		-			-		300,838
Issuance of common stock in connection with conversion of
$500,000 of $500,000 debenture, October 2005		-		-		644,003		644		-		-		527,438		-		-			-		528,082
Issuance of common stock in connection with conversion of
$113,077 of $2,000,000 debenture, October 2005		-		-		189,019		189		-		-		113,222		-		-			-		113,411
Issuance of common stock in connection with conversion of
$297,692 of $4,000,000 debenture, October 2005		-		-		364,113		364		-		-		298,209		-		-			-		298,573
Exercise of stock warrants for cash, October 2005, $0.82		-		-		8,404,876		8,405		-		-		6,883,593		-		-			-		6,891,998
Exercise of stock options for cash, October 2005, $0.63		-		-		101,500		101		-		-		63,844		-		-			-		63,945

The Notes to Consolidated Financial Statements are an integral part of these statements.

Exercise of stock options for cash, October 2005, $0.94	-	-	40,000	40	-	-	37,560	-	-	-	37,600
Issuance of common stock in connection with conversion of
$100,000 of $100,000 debenture, October 2005	-	-	128,834	129	-	-	105,515	-	-	-	105,644
Issuance of warrants in conjunction with financing,
$500,000, October 2005, $0.82	-	-	-	-	-	-	14,250	-	-	-	14,250
Issuance of warrants in conjunction with convertible
debentures, $500,000, October 2005, $0.82	-	-	-	-	-	-	270,950	-	-	-	270,950
Issuance of warrants as exercise inducement Oct 2005, $1.20	-	-	-	-	-	-	573,146	-	-	-	573,146
Issuance of warrants as exercise inducement Oct 2005, $1.25	-	-	-	-	-	-	2,501,390	-	-	-	2,501,390
Value of Beneficial Conversion Feature on Convertible
Debentures, $500,000, October 2005 (at $0.82)	-	-	-	-	-	-	229,050	-	-	-	229,050
Issuance of common stock as repayment of monthly
amortization payments due, $4,000,000, Nov 2005, $1.17	-	-	108,006	108	-	-	126,259	-	-	-	126,367
Issuance of common stock as repayment of monthly
amortization payments due, $2,000,000, Nov 2005, $1.17	-	-	16,753	17	-	-	19,584	-	-	-	19,601
Exercise of stock options for cash, November 2005, $0.94	-	-	100,000	100	-	-	93,900	-	-	-	94,000
Exercise of stock options for cash, November 2005, $0.63	-	-	1,500	2	-	-	944	-	-	-	946
Exercise of stock warrants for cash, November 2005, $0.82	-	-	3,058,536	3,058	-	-	2,504,942	-	-	-	2,508,000
Issuance of common stock in exchange for the services
rendered November 2005, $0.97	-	-	64,287	64	-	-	62,294	-	-	-	62,358
Issuance of common stock in connection with conversion of
$42,800 of 2nd $2,000,000 debenture, Nov 2005, $1.23	-	-	72,058	72	-	-	88,559	-	-	-	88,631
Issuance of common stock in exchange for the services
rendered August 2005, $0.97	-	-	19,500	19	-	-	18,897	-	-	-	18,916
Issuance of common stock in connection with conversion of
$230,769 of $4,000,000 debenture, November 2005,$0.97	-	-	282,721	283	-	-	273,957	-	-	-	274,240
Issuance of common stock as repayment of monthly
amortization payments due, $2,000,000, Dec 2005, $0.98	-	-	212,750	213	-	-	208,282	-	-	-	208,495
Issuance of common stock in connection with conversion of
$1,451,000 of $3,500,000 debenture, Dec 2005, $0.93	-	-	1,770,223	1,770	-	-	1,644,537	-	-	-	1,646,307
Issuance of common stock in connection with conversion of
$4,221 of 2nd $2,000,000 debenture, Dec 2005, $0.85	-	-	7,042	7	-	-	5,979	-	-	-	5,986
Issuance of common stock in conjunction with financing,
$3,500,000, December 2005, $0.95	-	-	224,000	224	-	-	212,576	-	-	-	212,800
Issuance of warrants in conjunction with financing,
$3,500,000, December 2005, $0.82	-	-	-	-	-	-	76,650	-	-	-	76,650
Issuance of warrants in conjunction with convertible
debentures, $3,500,000, December 2005, $0.82	-	-	-	-	-	-	1,648,387	-	-	-	1,648,387
Value of Beneficial Conversion Feature on Convertible
Debentures, $3,500,000, December 2005,$0.82	-	-	-	-	-	-	1,851,613	-	-	-	1,851,613
Issuance of warrants as exercise inducement Dec 2005, $1.25	-	-	-	-	-	-	1,115,853	-	-	-	1,115,853
Issuance of common stock in connection with conversion of
$82,000 of $3,500,000 debenture, December 2005, $0.84	-	-	100,000	100	-	-	83,900	-	-	-	84,000
Issuance of common stock as repayment of monthly
amortization payments due, 2nd $2,000,000, Jan 2006, $0.81	-	-	75,149	75	-	-	60,796	-	-	-	60,871
Issuance of common stock as repayment of monthly
amortization payments due, $500,000, Jan 2006, $0.81	-	-	53,612	54	-	-	43,372	-	-	-	43,426
Issuance of common stock in connection with conversion of
$617,000 of $3,500,000 debenture, January 2005, $0.94	-	-	757,630	758	-	-	711,415	-	-	-	712,173
Issuance of common stock in conjunction with financing,
$4,000,000, January 2006, $1.00	-	-	266,667	267	-	-	266,400	-	-	-	266,667
Issuance of warrants in conjunction with financing,
$4,000,000, January 2006, $1.05	-	-	-	-	-	-	88,800	-	-	-	88,800
Issuance of warrants in conjunction with convertible
debentures, 4,000,000, January 2006, $1.05	-	-	-	-	-	-	1,653,631	-	-	-	1,653,631
Value of Beneficial Conversion Feature on Convertible
Debentures, 4,000,000, January 2006, $1.05	-	-	-	-	-	-	1,463,155	-	-	-	1,463,155
Exercise of stock warrants for cash, January 2006, $0.82	-	-	7,317,072	7,317	-	-	5,992,682	-	-	-	5,999,999
Issuance of warrants as exercise inducement Jan 2006, $1.60	-	-	-	-	-	-	3,109,756	-	-	-	3,109,756
Exercise of stock options for cash, January 2006, $0.63	-	-	10,000	10	-	-	6,290	-	-	-	6,300
Issuance of common stock in connection with conversion of
$850,000 of $3,500,000 debenture, January 2006, $1.06	-	-	1,045,779	1,046	-	-	1,107,480	-	-	-	1,108,526
Issuance of common stock as repayment of monthly
amortization payments due, $500,000, Feb 2006, $1.23	-	-	49,812	50	-	-	61,219	-	-	-	61,269

The Notes to Consolidated Financial Statements are an integral part of these statements.

Issuance of common stock as repayment of monthly
amortization payments due, $2,000,000, Feb 2006, $1.23	-	-	67,746	68	-	-	83,260		-	-	-	83,328
Issuance of common stock as employee compensation,
December 2005, $0.90	-	-	140,115	140	-	-	125,964		-	-	-	126,104
Exercise of stock warrants for cash, February 2006, $0.82	-	-	303,902	304	-	-	248,896		-	-	-	249,200
Issuance of common stock in exchange for the services
rendered February 2006, $1.53	-	-	50,000	50	-	-	76,450		-	-	-	76,500
Exercise of stock options for cash, February 2006, $0.94	-	-	80,000	80	-	-	75,120		-	-	-	75,200
Exercise of stock options for cash, February 2006, $1.59	-	-	80,000	80	-	-	127,120		-	-	-	127,200
Exercise of stock options for cash, February 2006, $1.38	-	-	20,000	20	-	-	27,580		-	-	-	27,600
Exercise of stock warrants for cash, February 2006, $1.05	-	-	3,809,524	3,810	-	-	3,996,191		-	-	-	4,000,001
Exercise of stock warrants for cash, February 2006, $1.20	-	-	909,756	910	-	-	1,090,797		-	-	-	1,091,707
Exercise of stock warrants for cash, February 2006, $1.25	-	-	4,578,048	4,578	-	-	5,717,982		-	-	-	5,722,560
Exercise of stock warrants for cash, February 2006, $1.72	-	-	34,782	35	-	-	59,790		-	-	-	59,825
Issuance of common stock in connection with conversion of
$950,000 of Jan $4,000,000 debenture, Feb 2006, $2.38	-	-	904,762	905	-	-	2,152,429		-	-	-	2,153,334
Issuance of warrants in conjunction with convertible
debentures, 4,000,000, February 2006, $1.05	-	-	-	-	-	-	2,374,507		-	-	-	2,374,507
Value of Beneficial Conversion Feature on Convertible
Debentures, 4,000,000, February 2006, $1.05	-	-	-	-	-	-	1,625,493		-	-	-	1,625,493
Issuance of warrants as exercise inducement Feb 2006, $3.00	-	-	-	-	-	-	8,294,141		-	-	-	8,294,141
Issuance of common stock in connection with conversion of
$1,550,000 of Jan $4,000,000 debenture, Mar 2006, $2.21	-	-	1,485,349	1,485	-	-	3,281,136		-	-	-	3,282,621
Exercise of stock warrants for cash, March 2006, $1.72	-	-	347,913	348	-	-	598,062		-	-	-	598,410
Issuance of common stock as repayment of monthly
amortization payments due, $2,000,000, Mar 2006, $2.31	-	-	67,094	67	-	-	154,920		-	-	-	154,987
Issuance of common stock as repayment of monthly
amortization payments due, $500,000, March 2006, $2.31	-	-	49,312	49	-	-	113,861		-	-	-	113,910
Issuance of common stock as repayment of monthly
amortization payments due, $3,500,000, Mar 2006, $2.31	-	-	55,644	56	-	-	128,482		-	-	-	128,538
Issuance of common stock in exchange for the services
rendered March 2006, $2.31	-	-	50,000	50	-	-	115,450		-	-	-	115,500
Exercise of stock options for cash, March 2006, $0.94	-	-	300,222	300	-	-	281,909		-	-	-	282,209
Issuance of common stock in connection with conversion of
$2,350,000 of Feb $4,000,000 debenture, Mar 2006, $2.31	-	-	1,880,000	1,880	-	-	4,340,920		-	-	-	4,342,800
Exercise of stock options for cash, March 2006, $1.47	-	-	274,500	274	-	-	403,241		-	-	-	403,515
Exercise of stock warrants for cash, March 2006, $1.25	-	-	1,600,000	1,600	-	-	1,998,400		-	-	-	2,000,000
Exercise of stock warrants for cash, March 2006, $0.91	-	-	60,000	60	-	-	54,540		-	-	-	54,600
Exercise of stock options for cash, March 2006, $1.59	-	-	263,700	264	-	-	419,019		-	-	-	419,283
Issuance of common stock in connection with conversion of
$500,000 of Feb $4,000,000 debenture, Mar 2006, $2.20	-	-	400,592	401	-	-	880,902		-	-	-	881,303
Exercise of stock warrants for cash, March 2006, $0.82	-	-	48,000	48	-	-	39,312		-	-	-	39,360
Exercise of stock warrants for cash, March 2006, $1.05	-	-	46,000	46	-	-	48,254		-	-	-	48,300
Issuance of common stock in connection with conversion of
$200,000 of Jan $4,000,000 debenture, March 2006, $2.31	-	-	192,136	192	-	-	443,642		-	-	-	443,834
Exercise of stock options for cash, March 2006, $1.71	-	-	180,000	180	-	-	307,620		-	-	-	307,800
Issuance of common stock in connection with conversion of
$384,615 of $500,000 debenture, March 2006, $3.33	-	-	470,450	470	-	-	1,566,129		-	-	-	1,566,599
Exercise of stock warrants for cash, March 2006, $1.68	-	-	1,639,344	1,639	-	-	2,752,459		-	-	-	2,754,098
Cashless exercise of stock warrants, March 2006, $2.50	-	-	8,179	8	-	-	(8	)	-	-	-	-
Exercise of stock warrants for cash, March 2006, $1.25	-	-	68,000	68	-	-	84,932		-	-	-	85,000
Exercise of stock options for cash, March 2006, $2.10	-	-	175,000	175	-	-	367,325		-	-	-	367,500
Exercise of stock options for cash, March 2006, $1.10	-	-	150,000	150	-	-	164,850		-	-	-	165,000
Exercise of stock options for cash, March 2006, $1.52	-	-	150,000	150	-	-	227,850		-	-	-	228,000
Exercise of stock options for cash, March 2006, $2.19	-	-	150,000	150	-	-	328,350		-	-	-	328,500
Exercise of stock warrants for cash, March 2006, $2.15	-	-	2,000	2	-	-	4,298		-	-	-	4,300
Exercise of stock warrants for cash, March 2006, $1.88	-	-	31,000	31	-	-	58,249		-	-	-	58,280
Exercise of stock warrants for cash, March 2006, $2.02	-	-	23,438	23	-	-	47,322		-	-	-	47,345
Exercise of stock options for cash, March 2006, $0.63	-	-	120,750	121	-	-	75,952		-	-	-	76,073
Exercise of stock warrants for cash, March 2006, $1.86	-	-	170,068	170	-	-	316,156		-	-	-	316,326
Issuance of common stock in exchange for the services
rendered March 2006, $2.96	-	-	25,000	25	-	-	73,975		-	-	-	74,000
Issuance of common stock in satisfaction of accounts
payable March 2006, $3.20	-	-	2,390	2	-	-	7,646		-	-	-	7,648
Issuance of warrants as exercise inducement Mar 2006, $3.00	-	-	-	-	-	-	1,293,953		-	-	-	1,293,953

The Notes to Consolidated Financial Statements are an integral part of these statements.

Issuance of common stock as repayment of monthly
amortization payments due, $2,000,000, April 2006, $2.70	-		-	67,083		67		-		-		181,057		-		-			-		181,124
Issuance of common stock as repayment of monthly
amortization payments due, $3,500,000, April 2006, $2.70	-		-	49,812		50		-		-		134,443		-		-			-		134,493
Issuance of common stock as repayment of monthly
amortization payments due, Jan $4,000,000, Apr 2006, $2.70	-		-	167,144		167		-		-		451,122		-		-			-		451,289
Exercise of stock warrants for cash, April 2006, $1.88	-		-	29,000		29		-		-		54,491		-		-			-		54,520
Exercise of stock options for cash, April 2006, $1.47	-		-	95,500		95		-		-		140,290		-		-			-		140,385
Issuance of common stock in connection with conversion of
$307,692 of 2nd $2,000,000 debenture, April 2006, $2.63	-		-	513,158		513		-		-		1,349,092		-		-			-		1,349,605
Issuance of common stock in connection with conversion of
$423,077 of $3,500,000 debenture, April 2005, $2.63	-		-	516,291		516		-		-		1,357,329		-		-			-		1,357,845
Issuance of common stock in connection with conversion of
$923,077 of Jan $4,000,000 debenture, April 2006, $2.63	-		-	879,699		880		-		-		2,312,729		-		-			-		2,313,609
Exercise of stock options for cash, April 2006, $0.94	-		-	25,000		25		-		-		23,475		-		-			-		23,500
Exercise of stock warrants for cash, April 2006, $0.82	-		-	132,000		132		-		-		108,108		-		-			-		108,240
Exercise of stock warrants for cash, April 2006, $0.91	-		-	60,000		60		-		-		54,540		-		-			-		54,600
Exercise of stock warrants for cash, April 2006, $1.05	-		-	69,000		69		-		-		72,381		-		-			-		72,450
Issuance of common stock in satisfaction of deposit
April 2006, $1.25	-		-	204,465		204		-		-		255,377		-		-			-		255,581
Issuance of common stock in exchange for the services
rendered April 2006, $2.67	-		-	38,400		38		-		-		102,490		-		-			-		102,528
Issuance of warrants in exchange for the services rendered
April 2006, $2.66	-		-	-		-		-		-		137,200		-		-			-		137,200
Issuance of common stock as repayment of monthly
amortization payments due, Jan $4,000,000, May 2006, $3.10	-		-	74,322		74		-		-		230,324		-		-			-		230,398
Issuance of common stock as repayment of monthly
amortization payments due, Feb $4,000,000, May 2006, $3.10	-		-	172,713		173		-		-		535,238		-		-			-		535,411
Exercise of stock options for cash, May 2006, $2.10	-		-	25,000		25		-		-		52,475		-		-			-		52,500
Exercise of stock options for cash, May 2006, $1.47	-		-	10,000		10		-		-		14,690		-		-			-		14,700
Issuance of warrants in exchange for the services rendered
May 2006, $1.91	-		-	-		-		-		-		35,250		-		-			-		35,250
Issuance of common stock as employee compensation
May 2006, $1.88	-		-	755,000		755		-		-		1,418,645		-		-			-		1,419,400
Issuance of common stock in exchange for the services
rendered May 2006, $1.85	-		-	3,784		4		-		-		6,997		-		-			-		7,001
Issuance of common stock in exchange for the services
rendered May 2006, $1.88	-		-	38,000		38		-		-		71,402		-		-			-		71,440
Issuance of common stock as repayment of monthly
amortization payments due, Jan $4,000,000, Jun 2006, $1.96	-		-	73,979		74		-		-		144,925		-		-			-		144,999
Issuance of common stock as repayment of monthly
amortization payments due, Feb $4,000,000, Jun 2006, $1.96	-		-	83,911		84		-		-		164,382		-		-			-		164,466
Exercise of stock warrants for cash, June 2006, $1.25	-		-	1,327,880		1,328		-		-		1,658,522		-		-			-		1,659,850
Exercise of stock warrants for cash, June 2006, $1.60	-		-	3,036,310		3,036		-		-		4,855,060		-		-			-		4,858,096
Issuance of warrants as exercise inducement June 2006, $2.35	-		-	-		-		-		-		4,549,670		-		-			-		4,549,670
Issuance of common stock for cash pursuant to private
placement, June 2006, $2.05	-		-	3,414,636		3,415		-		-		6,996,589		-		-			-		7,000,004
Issuance of common stock in exchange for the services
rendered June 2006, $1.85	-		-	3,784		4		-		-		6,997		-		-			-		7,001
Issuance of common stock as repayment of monthly
amortization payments due, Jan $4,000,000, July 2006, $1.75	-		-	66,264		66		-		-		115,896		-		-			-		115,962
Issuance of common stock as repayment of monthly
amortization payments due, Feb $4,000,000, July 2006, $1.75	-		-	64,923		65		-		-		113,550		-		-			-		113,615
Issuance of common stock in exchange for the services
rendered July 2006, $1.40	-		-	5,000		5		-		-		6,995		-		-			-		7,000
Comprehensive Income (Loss):
Net Loss	-		-	-		-		-		-		-		-		(67,967,204	)		-		(67,967,204	)
Other comprehensive income (loss)
Currency translation adjustment	-		-	-		-		-		-		-		-		-			185,232		185,232
Total Comprehensive Income (Loss)																(67,967,204	)		185,232		(67,781,972	)
Balance at July 31, 2006	1,000	$	1	107,398,360	$	107,397	$	-	$	-	$	243,097,627	$	-	$	(188,495,312	)	$	754,081	$	55,463,794

The Notes to Consolidated Financial Statements are an integral part of these statements.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE PERIOD NOVEMBER 2, 1995 (DATE OF INCEPTION) TO JULY 31, 2010

`																						Deficit
	SVR																			Notes		Accumulated			Accumulated
	Preferred						Common						Treasury				Additional			Receivable -		During the			Other		Total
	Stock						Stock						Stock				Paid-In			Common		Development			Comprehensive		Stockholders’
	Shares			Amount			Shares			Amount			Shares		Amount		Capital			Stock		Stage			Income (Loss)		Equity

Balance, August 1, 2006		1,000		$	1			107,398,360		$	107,397		$	-	$	-	$	243,097,627		$	-	$	(188,495,312	)	$	754,081	$	55,463,794
Issuance of common stock as repayment of monthly amortization payments due, Feb $4,000,000, Aug 2006, $1.48		-			-			64,718			65			-		-		95,718			-		-			-		95,783
Issuance of common stock in exchange for the services rendered Aug 2006, $1.43		-			-			25,000			25			-		-		35,725			-		-			-		35,750
Issuance of common stock as repayment of monthly amortization payments due Feb $4,000,000, Sep 2006 $1.53		-			-			64,400			64			-		-		98,468			-		-			-		98,532
Issuance of common stock in exchange for the services rendered Oct 2006, $1.50		-			-			25,000			25			-		-		37,475			-		-			-		37,500
Issuance of common stock as repayment of monthly amortization payments due , Feb $4,000,000, Oct 2006, $1.65		-			-			64,000			64			-		-		105,536			-		-			-		105,600
Issuance of common stock in exchange for the services rendered Oct 2006, $1.83		-			-			27,262			27			-		-		49,862			-		-			-		49,889
Issuance of common stock in exchange for the services rendered Oct 2006, $1.50		-			-			25,000			25			-		-		37,475			-		-			-		37,500
Issuance of common stock as employee compensation Oct 2006, $1.83		-			-			100,000			100			-		-		182,900			-		-			-		183,000
Exercise of stock warrants for cash, Oct 2006, $1.25		-			-			100,000			100			-		-		124,900			-		-			-		125,000
Exercise of stock options for cash, Oct 2006, $1.59		-			-			90,300			90			-		-		143,487			-		-			-		143,577
Exercise of stock options for cash, Oct 2006, $1.47		-			-			6,500			6			-		-		9,549			-		-			-		9,555
Issuance of common stock as repayment of monthly amortization payments due Feb $4,000,000, Nov 2006, $2.02		-			-			63,764			64			-		-		128,740			-		-			-		128,804
Exercise of stock options for cash, Nov 2006, $1.59		-			-			15,000			15			-		-		23,835			-		-			-		23,850
Issuance of common stock in exchange for the services rendered Nov 2006, $2.15		-			-			50,000			50			-		-		107,450			-		-			-		107,500
Issuance of common stock as repayment of monthly amortization payments due, Feb $4,000,000, Dec 2006, $2.08		-			-			63,384			63			-		-		131,775			-		-			-		131,838
Issuance of common stock in exchange for the services rendered Dec 2006, $1.68		-			-			25,000			25			-		-		41,975			-		-			-		42,000
Issuance of common stock in exchange for the services rendered Jan 2007, $1.77		-			-			25,000			25			-		-		44,225			-		-			-		44,250
Issuance of common stock in connection with conversation of $52,554 of Feb $4,000,000 debenture, Jan, $1.74		-			-			42,043			42			-		-		73,113			-		-			-		73,155
Issuance of common stock in connection with conversion of 52,554 of Feb $4,000,000 debenture, Jan, $1.77		-			-			42,043			42			-		-		74,374			-		-			-		74,416
Issuance of common stock in exchange for the services rendered Feb 2007, $1.90		-			-			25,000			25			-		-		47,475			-		-			-		47,500
Issuance of common stock in exchange for the services rendered Mar 2007, $1.71		-			-			100,000			100			-		-		170,900			-		-			-		171,000
Issuance of common stock as employee compensation Mar 2007, $1.71		-			-			9,844			10			-		-		16,823			-		-			-		16,833
Issuance of warrants in exchange for the services rendered Mar 2007, $1.71		-			-									-		-		125,000			-		-			-		125,000
Issuance of common stock as employee compensation Mar 2007, $1.71		-			-			296,000			296			-		-		505,864			-		-			-		506,160
Issuance of common stock in exchange for the services rendered Mar 2007, $1.65		-			-			13,637			13			-		-		22,487			-		-			-		22,500
Issuance of common stock in exchange for the services rendered Mar 2007, $1.69		-			-			25,000			25			-		-		42,225			-		-			-		42,250
Issuance of common stock in connection with conversion of $52,554 of Feb $4,000,000 debenture, Mar 2007, $1.71		-			-			42,043			42			-		-		71,851			-		-			-		71,893
Issuance of common stock as employee compensation Mar 2007, $1.70		-			-			4,951			5			-		-		8,412			-		-			-		8,417
Issuance of common stock in exchange for the services rendered Apr 2007, $1.71		-			-			22,728			23			-		-		38,842			-		-			-		38,865
Preferred Shares Redemption, April 2007		(1,000	)		(1	)		-			-			-		-		(99	)		-		-			-		(100	)
Issuance of common stock in exchange for the services rendered Apr 2007, $1.65		-			-			13,637			14			-		-		22,486			-		-			-		22,500
Issuance of common stock in exchange for the services rendered Apr 2007, $1.69		-			-			25,000			25			-		-		42,225			-		-			-		42,250
Issuance of common stock as employee compensation Apr 2007, $1.64		-			-			5,132			5			-		-		8,411			-		-			-		8,416
Issuance of common stock in connection with conversion of $52,554 of Feb $4,000,000 debenture, Apr 2007, $1.61		-			-			42,043			42			-		-		67,647			-		-			-		67,689
Issuance of common stock in exchange for the services rendered May 2007, $1.60		-			-			22,728			23			-		-		36,342			-		-			-		36,365
Exercise of stock options for cash, May 2007, $0.63		-			-			5,000			5			-		-		3,145			-		-			-		3,150
Issuance of common stock in exchange for the services rendered May 2007, $1.47		-			-			25,000			25			-		-		36,725			-		-			-		36,750
Issuance of common stock in exchange for the services rendered May 2007, $1.47		-			-			13,637			14			-		-		20,033			-		-			-		20,047
Issuance of common stock as employee compensation May 2007, $1.45		-			-			5,805			6			-		-		8,411			-		-			-		8,417
Issuance of common stock as employee compensation May 2007, $1.45		-			-			450,000			450			-		-		652,050			-		-			-		652,500
Issuance of warrants in exchange for the services rendered May 2007, $1.45		-			-									-		-		141,400			-		-			-		141,400
Cancellation of common stock, May 2007, $1.45		-			-			(150,000	)		(150	)		-		-		150			-		-			-		-
Issuance of common stock in exchange for the services rendered Jun 2007 , $1.40		-			-			22,728			23			-		-		31,796			-		-			-		31,819
Issuance of common stock in exchange for the services rendered Jun 2007, $1.83		-			-			13,637			14			-		-		24,942			-		-			-		24,956
Issuance of common stock in exchange for services rendered Jun 2007, $1.80		-			-			25,000			25			-		-		44,975			-		-			-		45,000
Issuance of common stock as employee compensation, Jul 2007, $1.78		-			-			4,728			5			-		-		8,411			-		-			-		8,416
Issuance of common stock in exchange for the services rendered Jul 2007, $1.78		-			-			22,728			23			-		-		40,433			-		-			-		40,456
Exercise of stock options for cash, Jul 2007, $0.94		-			-			70,000			70			-		-		65,730			-		-			-		65,800
Exercise of stock options for cash, Jul 2007, $0.56		-			-			100,000			100			-		-		55,900			-		-			-		56,000
Issuance of common stock in exchange for the services rendered Jul 2007, $1.75		-			-			13,637			14			-		-		23,851			-		-			-		23,865
Issuance of common stock in exchange for the services rendered Jul 2007, $1.68		-			-			25,000			25			-		-		41,975			-		-			-		42,000
Issuance of common stock as employee compensation April 2007, $1.65		-			-			5,101			5			-		-		8,412			-		-			-		8,417
Comprehensive Income (Loss):
Net Loss		-			-			-			-			-		-		-			-		(23,504,958	)		-		(23,504,958	)
Other comprehensive income (loss)
Currency translation adjustment		-			-			-			-			-		-		-			-		-			127,726		127,726
Total Comprehensive Income (Loss)																							(23,504,958	)		127,726		(23,377,232	)
Balance at July 31, 2007		-			-			109,616,518			109,616			-		-		247,079,439			-		(212,000,270	)		881,807		36,070,592

The Notes to Consolidated Financial Statements are an integral part of these statements.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE PERIOD NOVEMBER 2, 1995 (DATE OF INCEPTION) TO JULY 31, 2010

`																				Deficit
	SVR																	Notes		Accumulated			Accumulated
	Preferred				Common						Treasury				Additional			Receivable -		During the			Other		Total
	Stock				Stock						Stock				Paid-In			Common		Development			Comprehensive		Stockholders’
	Shares		Amount		Shares			Amount			Shares		Amount		Capital			Stock		Stage			Income (Loss)		Equity

Balance, August 1, 2007		-	$	-		109,616,518		$	109,616			-	$	-	$	247,079,439		$	-	$	(212,000,270	)	$	881,807	$	36,070,592
Issuance of common stock in exchange for the services rendered August 2007, $1.57		-		-		22,728			23			-		-		35,660			-		-			-		35,683
Issuance of restricted common stock to officers as employee compensation August 2007		-		-		550,000			550			-		-		(550	)		-		-			-		-
Stock-based compensation - officers		-		-		-			-			-		-		527,909			-		-			-		527,909
Issuance of common stock as employee compensation August 2007, $1.51 (Issued under the 2006 Plan and fully vested)		-		-		100,000			100			-		-		150,900			-		-			-		151,000
Issuance of common stock as employee compensation August 2007, $1.50		-		-		5,611			6			-		-		8,411			-		-			-		8,417
Issuance of common stock in exchange for the services rendered September 2007, $1.48		-		-		22,728			22			-		-		33,615			-		-			-		33,637
Issuance of common stock in exchange for the services rendered September 2007, $1.61		-		-		8,000			8			-		-		12,872			-		-			-		12,880
Issuance of common stock in exchange for the services rendered September 2007, $1.53		-		-		50,000			50			-		-		76,450			-		-			-		76,500
Issuance of common stock as employee compensation September 2007, $1.55		-		-		5,430			5			-		-		8,411			-		-			-		8,416
Issuance of common stock in exchange for the services rendered October 2007, $1.50		-		-		22,728			23			-		-		34,069			-		-			-		34,092
Issuance of common stock as employee compensation October 2007, $1.52		-		-		446,000			446			-		-		677,474			-		-			-		677,920
Issuance of common stock in exchange for the services rendered October 2007, $1.53		-		-		8,000			8			-		-		12,232			-		-			-		12,240
Issuance of common stock in exchange for the services rendered October 2007, $1.50		-		-		37,500			38			-		-		56,213			-		-			-		56,251
Issuance of common stock as employee compensation October 2007, $1.53		-		-		5,501			6			-		-		8,411			-		-			-		8,417
Issuance of common stock in exchange for the services rendered November 2007, $1.71		-		-		22,728			23			-		-		38,842			-		-			-		38,865
Issuance of common stock in exchange for the services rendered November 2007, $1.75		-		-		8,000			8			-		-		13,992			-		-			-		14,000
Issuance of common stock as employee compensation November 2007, $1.70		-		-		4,951			5			-		-		8,412			-		-			-		8,417
Issuance of common stock in exchange for the services rendered November 2007, $1.54		-		-		228,087			228			-		-		349,771			-		-			-		349,999
Issuance of common stock in exchange for the services rendered November 2007, $1.53		-		-		98,168			98			-		-		149,903			-		-			-		150,001
Issuance of common stock in exchange for the services rendered December 2007, $1.80		-		-		22,728			23			-		-		40,888			-		-			-		40,911
Issuance of common stock in exchange for the services rendered December 2007, $1.84		-		-		8,000			8			-		-		14,712			-		-			-		14,720
Exercise of stock options for cash, December 2007, $1.59		-		-		31,000			31			-		-		49,259			-		-			-		49,290
Stock-based compensation - officers		-		-		-			-			-		-		67,242			-		-			-		67,242
Issuance of common stock in exchange for the services rendered December 2007, $1.74		-		-		50,000			50			-		-		86,950			-		-			-		87,000
Issuance of common stock as employee compensation December 2007,$1.75		-		-		4,810			5			-		-		8,413			-		-			-		8,418
Issuance of common stock in exchange for the services rendered January 2008, $1.61		-		-		22,728			23			-		-		36,569			-		-			-		36,592
Issuance of common stock in exchange for the services rendered January 2008, $1.38		-		-		8,000			8			-		-		11,032			-		-			-		11,040
Issuance of common stock in exchange for the services rendered January 2008, $1.34		-		-		37,500			37			-		-		50,213			-		-			-		50,250
Issuance of common stock as employee compensation October 2007, $1.36		-		-		6,189			6			-		-		8,411			-		-			-		8,417
Issuance of common stock in exchange for the services rendered February 2008, $1.36		-		-		22,728			23			-		-		30,887			-		-			-		30,910
Issuance of common stock in exchange for the services rendered February 2008, $1.34		-		-		8,000			8			-		-		10,712			-		-			-		10,720
Exercise of stock options for cash, February 2008, $1.00		-		-		70,000			70			-		-		69,930			-		-			-		70,000
Issuance of common stock as employee compensation February 2008, $1.32		-		-		6,376			6			-		-		8,410			-		-			-		8,416
Issuance of common stock in exchange for the services rendered March 2008, $1.00		-		-		8,000			8			-		-		7,992			-		-			-		8,000
Stock-based compensation - officers		-		-		50,000			50			-		-		67,242			-		-			-		67,292
Issuance of common stock in exchange for the services rendered March 2008, $0.95		-		-		8,093			8			-		-		47,450			-		-			-		47,458
Issuance of common stock as employee compensation March 2008, $1.04		-		-		200,000			200			-		-		8,409			-		-			-		8,609
Issuance of common stock in exchange for the services rendered March 2008, $1.14		-		-		-			-			-		-		227,800			-		-			-		227,800
Issuance of warrants in exchange for the services rendered March 2008, $3.75		-		-		-			-			-		-		52,500			-		-			-		52,500
Issuance of warrants as employee compensation March 2008, $0.94		-		-		-			-			-		-		29,500			-		-			-		29,500
Issuance of warrants in conjunction with convertible debenture, March 2008, $1.10		-		-		-			-			-		-		5,323,109			-		-			-		5,323,109
Issuance of warrants in conjunction with convertible debentures, March 2008, $1.21		-		-		-			-			-		-		5,323,109			-		-			-		5,323,109
Repurchase of common stock March 2008, $1.16		-		-		(326,255	)		(326	)		-		-		(378,130	)		-		-			-		(378,456	)
Option repricing costs March 2008		-		-		-			-			-		-		14,500			-		-			-		14,500
Value of Beneficial Conversion Feature on Convertible Debentures, March 2008, $1.21		-		-		-			-			-		-		8,768,946			-		-			-		8,768,946
Exercise of stock options for cash, April 2008, $1.00		-		-		50,000			50			-		-		49,950			-		-			-		50,000
Issuance of common stock in exchange for the services rendered April 2008, $1.19		-		-		8,000			8			-		-		9,512			-		-			-		9,520
Exercise of stock options for cash, April 2008, $0.89		-		-		250,000			250			-		-		222,250			-		-			-		222,500
Issuance of common stock in exchange for the services rendered April 2008, $1.06		-		-		37,500			37			-		-		39,713			-		-			-		39,750
Issuance of common stock as employee compensation April 2008, $1.08		-		-		7,793			8			-		-		8,409			-		-			-		8,417
Issuance of common stock in exchange for the services rendered May 2008, $1.05		-		-		8,000			8			-		-		8,392			-		-			-		8,400
Stock-based compensation - officers stock options, May 2008, $0.96		-		-		-			-			-		-		58,078			-		-			-		58,078
Issuance of common stock as employee compensation May 2008, $1.00		-		-		8,417			8			-		-		8,409			-		-			-		8,417
Stock-based compensation - officers stock		-		-		-			-			-		-		67,242			-		-			-		67,242
Issuance of common stock in exchange for the services rendered May 2008, $0.97		-		-		50,000			50			-		-		48,450			-		-			-		48,500
Issuance of common stock in exchange for the services rendered June 2008, $0.95		-		-		8,000			8			-		-		7,592			-		-			-		7,600
Issuance of common stock as employee compensation June 2008, $0.97		-		-		8,677			9			-		-		8,409			-		-			-		8,418
Issuance of common stock in exchange for the services rendered July 2008, $0.79		-		-		8,000			8			-		-		6,312			-		-			-		6,320
Issuance of common stock in exchange for the services rendered July 2008, $0.80		-		-		37,500			37			-		-		29,963			-		-			-		30,000
Issuance of common stock as employee compensation July 2008, $0.83		-		-		10,141			10			-		-		8,409			-		-			-		8,419
Comprehensive Income (Loss):
Net Loss		-		-		-			-			-		-		-			-		(36,228,991	)		-		(36,228,991	)
Other comprehensive income (loss):
Currency translation adjustment		-		-		-			-			-		-		-			-		-			32,688		32,688
Total Comprehensive Income (Loss)																					(36,228,991	)		32,688		(36,196,303	)
Balance at July 31, 2008		-	$	-		111,992,603		$	111,992			-	$	-	$	269,849,581		$	-	$	(248,229,261	)	$	914,495	$	22,646,807

The Notes to Consolidated Financial Statements are an integral part of these statements.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE PERIOD NOVEMBER 2, 1995 (DATE OF INCEPTION) TO JULY 31, 2010

	SVR															Notes		Accumulated			Accumulated
	Preferred				Common				Treasury				Additional			Receivable -		During the			Other			Total
	Stock				Stock				Stock				Paid-In			Common		Development			Comprehensive			Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Stock		Stage			Income (Loss)			Equity

Balance at August 1, 2008		-		-		111,992,603		111,992		-		-		269,849,581			-		(248,229,261	)		914,495			22,646,807
Issuance of common stock as repayment of monthly amortization payments on convertible notes Aug 2008, $0.65		-		-		2,891,182		2,891		-		-		1,873,775			-		-			-			1,876,666
Stock-based compensation - officers stock options		-		-		-		-		-		-		9,680			-		-			-			9,680
Issuance of common stock as employee compensation, Aug 2008, $0.56		-		-		11,690		12		-		-		8,405			-		-			-			8,417
Stock-based compensation - officers stock		-		-		-		-		-		-		29,885			-		-			-			29,885
Exercise of stock options for cash Aug 2008, $0.56		-		-		100,000		100		-		-		55,900			-		-			-			56,000
Issuance of common stock as repayment of monthly amortization payments on convertible notes Sept 2008, $0.52		-		-		3,597,214		3,597		-		-		1,873,069			-		-			-			1,876,666
Issuance of common stock in exchange for the services rendered Sept. 2008, $0.58		-		-		50,000		50		-		-		28,950			-		-			-			29,000
Issuance of common stock in exchange for the services rendered Sept. 2008, $0.53		-		-		4,000		4		-		-		2,116			-		-			-			2,120
Issuance of common stock as employee compensation Sept 2008, $0.56		-		-		15,030		15		-		-		8,402			-		-			-			8,417
Issuance of common stock as repayment of monthly amortization payments on convertible notes Oct 2008, $0.29		-		-		2,638,809		2,639		-		-		756,810			-		-			-			759,449
Issuance of common stock as repayment of interest on Convertible Notes, Oct 2008, $0.52		-		-		483,195		483		-		-		251,600			-		-			-			252,083
Issuance of common stock in exchange for the services rendered, Oct 2008, $0.32		-		-		4,000		4		-		-		1,276			-		-			-			1,280
Issuance of common stock in exchange for the services rendered, July 2008 $0.38		-		-		37,500		38		-		-		14,213			-		-			-			14,251
Issuance of common stock as employee compensation, Oct 2008, $0.31		-		-		27,151		27		-		-		8,390			-		-			-			8,417
Issuance of common stock as repayment of monthly amortization payments on Convertible Notes, Nov 2008, $0.29		-		-		2,144,605		2,145		-		-		615,073			-		-			-			617,218
Stock-based compensation - officers stock options		-		-		-		-		-		-		9,680			-		-			-			9,680
Issuance of common stock as employee compensation, Nov 2008, $0.35		-		-		24,048		24		-		-		8,393			-		-			-			8,417
Stock-based compensation - officers stock		-		-		-		-		-		-		22,414			-		-			-			22,414
Issuance of common stock in exchange for the services rendered, Nov 2008, $0.35		-		-		4,000		4		-		-		1,396			-		-			-			1,400
Issuance of common stock in exchange for the services rendered, Nov 2008, $0.38		-		-		25,000		25		-		-		9,475			-		-			-			9,500
Issuance of common stock in exchange for the services rendered, Dec 2008, $0.45		-		-		33,335		33		-		-		14,967			-		-			-			15,000
Issuance of common stock in exchange for the services rendered, Dec 2008, $0.47		-		-		4,000		4		-		-		1,876			-		-			-			1,880
Issuance of common stock in exchange for the services rendered, Dec 2008, $0.53		-		-		68,102		68		-		-		29,932			-		-			-			30,000
Issuance of common stock as employee compensation, Dec 2008, $0.38		-		-		22,149		22		-		-		8,394			-		-			-			8,416
Warrant modification costs, Dec 2008		-		-		-		-		-		-		1,589,988			-		-			-			1,589,988
Issuance of common stock as repayment of monthly amortization payments on Convertible Notes, Jan 2009, $0.32		-		-		4,556,989		4,557		-		-		1,372,109			-		-			-			1,376,666
Issuance of common stock in exchange for services rendered, Jan 2009, $0.34		-		-		4,000		4		-		-		1,356			-		-			-			1,360
Issuance of common stock in exchange for services rendered, Jan 2009, $0.33		-		-		37,500		38		-		-		12,338			-		-			-			12,376
Issuance of common stock in exchange for services rendered, Jan 2009, $0.33		-		-		18,182		18		-		-		5,982			-		-			-			6,000
Issuance of common stock as employee compensation, Jan 2009, $0.34		-		-		24,755		25		-		-		8,392			-		-			-			8,417
Issuance of common stock in exchange for the services rendered, Feb 2009, $0.27		-		-		22,059		22		-		-		5,978			-		-			-			6,000
Stock-based compensation - officers stock options		-		-		-		-		-		-		9,680			-		-			-			9,680
Issuance of common stock as employee compensation, Feb 2009, $0.23		-		-		36,594		37		-		-		8,380			-		-			-			8,417
Stock-based compensation - officers		-		-		-		-		-		-		22,414			-		-			-			22,414
Issuance of common stock as repayment of monthly amortization payments on Convertible Notes, Mar 2009, $0.18		-		-		10,713,359		10,713		-		-		1,916,620			-		-			-			1,927,333
Issuance of common stock as repayment of interest on Convertible Notes, Mar 2009, $0.18		-		-		773,743		774		-		-		138,423			-		-			-			139,197
Issuance of common stock in exchange for the services rendered, Feb 2009, $0.27		-		-		4,000		4		-		-		1,076			-		-			-			1,080
Issuance of common stock in exchange for the services rendered, Mar 2009, $0.29		-		-		25,000		25		-		-		7,225			-		-			-			7,250
Issuance of common stock in exchange for the services rendered, Mar 2009, $0.30		-		-		250,000		250		-		-		74,750			-		-			-			75,000
Issuance of common stock in exchange for the services rendered, Mar 2009, $0.35		-		-		4,000		4		-		-		1,396			-		-			-			1,400
Issuance fo common stock in exchange for the services rendered, Mar 2009, $0.31		-		-		20,870		21		-		-		5,979			-		-			-			6,000
Issuance of common stock as employee compensation, Mar 2009, $0.31		-		-		27,151		27		-		-		8,390			-		-			-			8,417
Issuance of common stock in exchange for the services rendered, Mar 2009, $0.29		-		-		150,000		150		-		-		43,350			-		-			-			43,500
Issuance of common stock as repayment of monthly amortization payments on Convertible Notes, Apr 2009, $0.28		-		-		6,783,997		6,784		-		-		1,920,550			-		-			-			1,927,334
Issuance of common stock in exchange for the services rendered, Apr 2009, $0.30		-		-		150,000		150		-		-		44,250			-		-			-			44,400
Issuance of common stock in exchange for the services rendered, Mar 2009, $0.30		-		-		150,000		150		-		-		44,850			-		-			-			45,000
Issuance of common stock in exchange for the services rendered, Apr 2009, $0.30		-		-		4,000		4		-		-		1,196			-		-			-			1,200
Issuance of common stock in exchange for the services rendered, Apr 2009, $0.39		-		-		150,000		150		-		-		58,350			-		-			-			58,500
Issuance of common stock in exchange for the services rendered, Apr 2009, $0.39		-		-		37,500		38		-		-		14,588			-		-			-			14,626
Issuance of common stock in exchange for the services rendered, Apr 2009, $0.33		-		-		18,254		18		-		-		5,982			-		-			-			6,000
Issuance of common stock as repayment of monthly amortization payments on Convertible Notes, Apr 2009, $0.30		-		-		7,424,242		7,424		-		-		2,194,606			-		-			-			2,202,030
Cashless exercise of stock warrants, Apr 2009, $0.50		-		-		341,000		341		-		-		(341	)		-		-			-			-
Issuance of common stock as employee compensation, Apr 2009, $0.37		-		-		22,748		23		-		-		8,394			-		-			-			8,417
Issuance of common stock in exchange for the services rendered, May 2009, $0.40		-		-		15,019		15		-		-		5,985			-		-			-			6,000
Stock-based compensation - officers stock options		-		-		-		-		-		-		5,378			-		-			-			5,378
Issuance of common stock as employee compensation, May 2009, $0.38		-		-		22,149		22		-		-		8,394			-		-			-			8,416
Stock-based compensation - officers stock		-		-		-		-		-		-		22,414			-		-			-			22,414
Issuance of common stock as repayment of monthly amortization payments on Convertible Notes, May 2009, $0.33		-		-		5,840,404		5,840		-		-		1,921,493			-		-			-			1,927,333
Issuance of common stock as repayment of interest on Convertible Notes, May 2009, $0.33		-		-		341,534		341		-		-		112,365			-		-			-			112,706
Issuance of common stock for cash pursuant to private placement, May 2009, $0.33		-		-		15,151,517		15,152		-		-		4,539,848			-		-			-			4,555,000
Issuance of common stock in exchange for the services rendered, May 2009, $0.38		-		-		4,000		4		-		-		1,516			-		-			-			1,520
Issuance of common stock in exchange for the services rendered, May 2009, $0.37		-		-		25,000		25		-		-		9,225			-		-			-			9,250
Issuance of common stock in exchange for the services rendered, May 2009, $0.38		-		-		435,000		435		-		-		164,865			-		-			-			165,300
Issuance of common stock in exchange for the services rendered, May 2009, $0.37		-		-		39,000		39		-		-		14,391			-		-			-			14,430
Issuance of common stock in exchange for the services rendered, May 2009, $0.42		-		-		150,000		150		-		-		62,850			-		-			-			63,000
Issuance of options in exchange for the services rendered, May 2009, $0.29		-		-		-		-		-		-		11,000			-		-			-			11,000
Issuance of common stock in satisfaction of accounts payable, Jun 2009, $0.36-0.65		-		-		982,382		982		-		-		437,715			-		-			-			438,697
Issuance of common stock for cash pursuant to private placement, Jun 2009, $0.64		-		-		17,200,000		17,200		-		-		10,804,964			-		-			-			10,822,164
Issuance of common stock in exchange for the services rendered, Jun 2009, $0.62		-		-		4,000		4		-		-		2,476			-		-			-			2,480
Issuance of common stock in exchange for the services rendered, Jun 2009, $0.64		-		-		9,353		9		-		-		5,991			-		-			-			6,000
Issuance of common stock as employee compensation, Jun 2009, $0.57		-		-		14,766		15		-		-		8,402			-		-			-			8,417
Issuance of common stock in exchange for the services rendered, Jun 2009, $0.42		-		-		100,000		100		-		-		35,900			-		-			-			36,000
Issuance of common stock as converstion of Convertible Notes, June 2009, $0.33		-		-		4,914,251		4,914		-		-		1,616,789			-		-			-			1,621,703
Issuance of common stock for cash pursuant to private placement, Jun 2009, $0.33		-		-		230,513		231		-		-		75,839			-		-			-			76,070
Issuance of common stock in exchange for the services rendered, Jun 2009, $0.43		-		-		150,000		150		-		-		64,350			-		-			-			64,500
Issuance of common stock in exchange for the services rendered, Jun 2009, $0.76		-		-		500,000		500		-		-		379,500			-		-			-			380,000
Issuance of common stock in exchange for the services rendered, Jun 2009, $0.58		-		-		260,000		260		-		-		150,540			-		-			-			150,800
Issuance of common stock in exchange for the services rendered, Jun 2009, $0.43		-		-		200,000		200		-		-		85,800			-		-			-			86,000
Issuance of common stock in exchange for the services rendered, Jul 2009, $0.58		-		-		4,000		4		-		-		2,332			-		-			-			2,336
Issuance of common stock in exchange for the services rendered, Jul 2009, $0.56		-		-		150,000		150		-		-		83,985			-		-			-			84,135
Issuance of common stock in exchange for the services rendered, Apr 2009, $0.65		-		-		37,500		37		-		-		24,524			-		-			-			24,561
Issuance of common stock in exchange for the services rendered, Jul 2009, $0.62		-		-		9,717		10		-		-		5,991			-		-			-			6,001
Cashless exercise of stock warrants, Jun 2009, $0.33		-		-		9,567,583		9,568		-		-		(9,568	)		-		-			-			-
Issuance of common stock as employee compensation, Jul 2009, $0.66		-		-		12,753		13		-		-		8,404			-		-			-			8,417
Exercise of stock warrants for cash, July 2009, $0.33		-		-		330,817		330		-		-		108,839			-		-			-			109,169
Warrant modification costs, July 2009		-		-		-		-		-		-		1,608,616			-		-			-			1,608,616
Net Loss		-		-		-		-		-		-		-			-		(45,812,228	)		-			(45,812,228	)
Other comprehensive income (loss)
Currency translation adjustment		-		-		-		-		-		-		-			-		-			(262,908	)		(262,908	)
Total comprehensive income (loss)																			(45,812,228	)		(262,908	)		(46,075,136	)
Balance at July 31, 2009		-	$	-		212,628,814	$	212,628		-	$	-	$	307,401,016		$	-	$	(294,041,489	)	$	651,587		$	14,223,742

The Notes to Consolidated Financial Statements are an integral part of these statements.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE PERIOD NOVEMBER 2, 1995 (DATE OF INCEPTION) TO JULY 31, 2010

	SVR															Notes		Accumulated			Accumulated
	Preferred				Common				Treasury				Additional			Receivable-		During the			Other		Total
	Stock				Stock				Stock				Paid-In			Common		Development			Comprehensive		Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Stock		Stage			Income (Loss)		Equity

Balance at August 1, 2009		-		-		212,628,814		212,628		-		-		307,401,016			-		(294,041,489	)		651,587		14,223,742
Effect of the initial adoption of accounting for down-round provision														(13,844,822	)				(5,981,043	)				(19,825,865	)
Exercise of warrants classified as derivatives														10,020,557										10,020,557
Stock-based compensation - officers stock options		-		-		-		-		-		-		3,227			-		-			-		3,227
Issuance of common stock as employee compensation Aug 2009, $0.6215		-		-		13,543		14		-		-		8,403			-		-			-		8,417
Stock-based compensation - officers stock		-		-						-		-		3,736			-		-			-		3,736
Issuance of common stock for cash pursuant to private placement, Aug 2009, $0.79		-		-		8,558,013		8,558		-		-		5,152,142			-		-			-		5,160,700
Issuance of common stock in exchange for the services rendered Aug 2009, $0.61						4,000		4						2,436										2,440
Issuance of common stock in exchange for the services rendered Aug 2009, $0.63		-		-		100,000		100		-		-		63,200			-		-			-		63,300
Issuance of options in exchange for the services rendered May 2009, $0.46														5,653										5,653
Issuance of common stock in satisfaction of accounts payable, Sep 2009, $0.55-0.77		-		-		1,582,640		1,583		-		-		1,053,877			-		-			-		1,055,459
Issuance of common stock in exchange for the services rendered Sep 2009, $0.76						4,000		4						3,036										3,040
Issuance of common stock in exchange for the services rendered Sep 2009, $0.7215		-		-		83,335		83		-		-		60,043			-		-			-		60,126
Issuance of common stock as employee compensation Sep 2009, $0.7254		-		-		11,603		12		-		-		8,405			-		-			-		8,417
Issuance of common stock for cash pursuant to private placement, Sep 2009, $0.80						15,312,500		15,313						11,224,660										11,239,973
Issuance of common stock in exchange for the services rendered Sep 2009, $0.62		-		-		200,000		200		-		-		124,400			-		-			-		124,600
Issuance of common stock in exchange for the services rendered Sep 2009, $0..76						200,000		200						151,800										152,000
Issuance of common stock in exchange for the services rendered Oct 2009, $0.68		-		-		250,000		250		-		-		169,750			-		-			-		170,000
Issuance of common stock in exchange for the services rendered Oct 2009, $0.695						4,000		4						2,776										2,780
Issuance of common stock in exchange for the services rendered Oct 2009, $0.65		-		-		15,000		15		-		-		9,735			-		-			-		9,750
Issuance of common stock in exchange for the services rendered Oct 2009, $0.525						37,500		38						19,650										19,688
Cashless exercise of stock warrants, Jan 2010, $0.33		-		-		4,466,239		4,467		-		-		(4,466	)		-		-			-		1
Issuance of common stock in exchange for the services rendered Oct 2009, $0.525		-		-		60,000		60		-		-		31,440			-		-			-		31,500
Issuance of common stock as employee compensation Oct 2009, $0.60						14,028		14						8,403										8,417
Exercise of stock warrants for cash, Sep 2009, $0.33		-		-		4,599,817		4,600		-		-		1,513,340			-		-			-		1,517,940
Option modification costs, Oct 2009		-		-						-		-		875,773			-		-			-		875,773
Stock-based compensation - officers stock options		-		-						-		-		3,227			-		-			-		3,227
Issuance of common stock as employee compensation Nov 2009, $0.50		-		-		16,833		17		-		-		8,400			-		-			-		8,417
Issuance of common stock in exchange for the services rendered Nov 2009, $0.61						39,144		39						23,961										24,000
Issuance of common stock in exchange for the services rendered Nov 2009, $0.51		-		-		4,000		4		-		-		2,036			-		-			-		2,040
Issuance of common stock in exchange for the services rendered Nov 2009, $0.45						60,000		60						26,940										27,000
Issuance of common stock in exchange for the services rendered Dec 2009, $0.50		-		-		10,000		10		-		-		5,040			-		-			-		5,050
Issuance of common stock in exchange for the services rendered Dec 2009, $0.56						39,000		39						21,957										21,996
Issuance of common stock in satisfaction of accounts payable, Dec 2009, $0.48-0.67		-		-		1,713,030		1,713		-		-		934,666										936,379
Issuance of common stock in exchange for the services rendered Dec 2009, $0.61						4,000		4						2,436										2,440
Issuance of warrants in exchange for the services rendered Dec 2009, $0.51		-		-						-		-		505,000										505,000
Issuance of options in exchange for the services rendered Dec 2009, $0.46														24,766										24,766
Issuance of common stock in exchange for the services rendered Dec 2009, $0.57		-		-		10,565		11		-		-		5,989										6,000
Issuance of common stock in exchange for the services rendered Dec 2009, $0.53		-		-		60,000		60		-		-		31,740										31,800
Issuance of common stock as employee compensation Dec 2009, $0.56		-		-		15,030		15		-		-		8,402										8,417
Issuance of common stock in exchange for the services rendered Jan 2010, $0.67						4,000		4						2,676										2,680
Issuance of common stock in exchange for the services rendered Jan 2010, $0.59		-		-		5,000		5		-		-		2,945										2,950
Issuance of common stock in exchange for the services rendered Jan 2010, $0.62						9,615		10						5,990										6,000
Issuance of common stock in exchange for the services rendered Jan 2010, $0.63		-		-		37,500		38		-		-		23,588										23,626
Cashless exercise of stock warrants, Jan 2010, $0.33						779,220		779						(779	)									-
Issuance of common stock in exchange for the services rendered Jan 2010, $0.63		-		-		60,000		60		-		-		37,740										37,800
Issuance of common stock as employee compensation Jan 2010, $0.64						13,221		13						8,403										8,416
Stock-based compensation - stock options		-		-						-		-		499,469										499,469
Issuance of common stock as employee compensation Feb 2010, $0.60		-		-		14,044		14		-		-		8,403										8,417
Issuance of common stock in exchange for the services rendered Feb 2010, $0.60						9,921		10						5,990										6,000
Issuance of common stock in exchange for the services rendered Feb 2010, $0.59		-		-		4,000		4		-		-		2,340										2,344
Issuance of warrants in exchange for the services rendered Mar 2010, $1.25		-		-						-		-		86,000										86,000
Issuance of common stock in exchange for the services rendered Feb, $0.625		-		-		60,000		60		-		-		37,440										37,500
Issuance of common stock in exchange for the services rendered Mar 2010, $0.64		-		-		10,000		10		-		-		6,430										6,440
Issuance of common stock in exchange for the services rendered Mar 2010, $0.62						483,871		484						299,516										300,000
Issuance of common stock in exchange for the services rendered Mar 2010, $0.62		-		-		300,000		300		-		-		187,200										187,500
Issuance of common stock in exchange for the services rendered Mar 2010, $0.53						200,000		200						106,360										106,560
Issuance of common stock in satisfaction of accounts payable, Mar 2010, $0.45-0.65		-		-		1,198,808		1,199		-		-		693,896										695,095
Issuance of common stock in exchange for the services rendered Mar 2010, $0.64						4,000		4						2,556										2,560
Issuance of options in exchange for the services rendered Mar 2010, $0.64		-		-						-		-		23,959										23,959
Issuance of common stock in exchange for the services rendered Mar 2010, $0.60						9,977		10						5,990										6,000
Issuance of common stock in exchange for the services rendered Mar 2010, $0.54		-		-		60,000		60		-		-		32,262										32,322
Issuance of common stock as employee compensation Mar 2010, $0.56						14,912		15						8,402										8,417
Issuance of common stock in exchange for the services rendered Apr 2010, $0.49		-		-		4,000		4		-		-		1,956										1,960
Issuance of common stock in exchange for the services rendered Apr 2010, $0.53						5,000		5						2,663										2,668
Issuance of common stock in exchange for the services rendered Apr 2010, $0.47		-		-		12,637		13		-		-		5,987										6,000
Issuance of common stock for cash pursuant to private placement, Apr 2010, $0.47						2,000,000		2,000						870,373										872,373
Issuance of common stock for cash pursuant to private placement, Apr 2010, $0.4258		-		-		2,000,000		2,000		-		-		813,036										815,036
Issuance of common stock for cash pursuant to private placement, Apr 2010, $0.42		-		-		2,000,000		2,000		-		-		792,300										794,300
Issuance of common stock in exchange for the services rendered Apr 2010, $0.45						37,500		38						16,838										16,876
Cashless exercise of stock warrants, Apr 2010, $0.33		-		-		2,390,167		2,390		-		-		(2,390	)									0
Exercise of stock warrants for cash, Apr 2010, $0.33						170,068		170						55,952										56,122
Issuance of common stock in exchange for the services rendered Apr 2010, $0.45		-		-		5,000		5		-		-		2,245										2,250
Issuance of common stock in exchange for the services rendered Apr 2010, $0.45						60,000		60						26,940										27,000
Issuance of common stock as employee compensation Apr 2010, $0.46		-		-		18,270		18		-		-		8,399										8,417
Stock-based compensation - stock options														272,206										272,206
Issuance of common stock as employee compensation May 2010, $0.38		-		-		22,211		22		-		-		8,394										8,416
Issuance of common stock in exchange for the services rendered May 2010, $0.38						15,752		16						5,984										6,000
Issuance of common stock in exchange for the services rendered May 2010, $0.33		-		-		4,000		4		-		-		1,296										1,300
Issuance of common stock in exchange for the services rendered May, $0.39						60,000		60						23,460										23,520
Issuance of common stock in exchange for the services rendered May 2010, $0.39		-		-		5,000		5		-		-		1,955										1,960
Issuance of common stock in exchange for the services rendered Jul 2010, $0.33						54,545		55						17,945										18,000
Issuance of common stock in satisfaction of accounts payable, Jun 2010, $0.33-0.37		-		-		936,895		937		-		-		324,725										325,662
Issuance of common stock in exchange for the services rendered Jun 2010, $0.35						4,000		4						1,396										1,400
Issuance of options in exchange for the services rendered Jul 2010, $0.38		-		-						-		-		28,600										28,600
Issuance of options in exchange for the services rendered Mar 2010, $0.64														24,766										24,766
Issuance of common stock in exchange for the services rendered Jun 2010, $0.35		-		-		15,385		15		-		-		5,985										6,000
Issuance of common stock in exchange for the services rendered Jun 2010, $0.32		-		-		60,000		60		-		-		19,284										19,344
Issuance of common stock as employee compensation Jun 2010, $0.33		-		-		25,209		25		-		-		8,392										8,417
Issuance of common stock in exchange for the services rendered Jul 2010, $0.35						4,000		4						1,376										1,380
Issuance of common stock in exchange for the services rendered Jun 2010, $0.32		-		-		5,000		5		-		-		1,607										1,612
Issuance of common stock in exchange for the services rendered Jun 2010, $0.35		-		-		150,000		150		-		-		52,950										53,100
Issuance of common stock in exchange for the services rendered Jul 2010, $0.35		-		-		18,912		19		-		-		5,981										6,000
Issuance of common stock for cash pursuant to private placement, May 2010, $0.35		-		-		2,000,000		2,000		-		-		666,732										668,732
Issuance of common stock for cash pursuant to private placement, May 2010, $0.35						2,000,000		2,000						669,420										671,420
Issuance of common stock for cash pursuant to private placement, Jun 2010, $0.35		-		-		2,000,000		2,000		-		-		675,756										677,756
Issuance of common stock in exchange for the services rendered Jul 2010, $0.40						37,500		38						14,963										15,001
Issuance of common stock in exchange for the services rendered Jul 2010, $0.40		-		-		60,000		60		-		-		23,940										24,000
Issuance of common stock as employee compensation July 2010, $0.35						23,841		24						8,393										8,417
Net Loss		-		-		-		-		-		-							(25,279,940	)				(25,279,940	)
Other comprehensive income (loss)																								-
Currency translation adjustment		-		-		-		-		-		-		-			-		-			132,596		132,596
Total comprehensive income (loss)																			(25,279,940	)		132,596		(25,147,344	)
Balance at July 31, 2010		-	$	-		269,599,615	$	269,600		-	$	-	$	333,219,309		$	-	$	(325,302,472	)	$	784,183	$	8,970,620

The Notes to Consolidated Financial Statements are an integral part of these statements.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS

										Cumulative From
	For the Twelve Months									November 2, 1995
	Ended July 31,									(Date of Inception)
	2010			2009			2008			to July 31 2010
Cash Flows From Operating Activities:
Net loss	$	(25,279,940	)	$	(45,812,228	)	$	(36,228,991	)	$	(323,007,415	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		780,250			805,806			1,084,919			8,552,921
Minority interest share of loss		—			—			—			(3,038,185	)
Reduction of notes receivable - common stock in exchange for services rendered		—			—			—			423,882
Write-off of uncollectible notes receivable - common stock		—			—			—			391,103
Write-off of deferred offering costs		—			—			—			3,406,196
Write-off of abandoned patents		—			—			741,690			913,196
Loss on disposal of property and equipment		—			—			—			911
Loss on extinguishment of debt		—			—			—			14,134,069
Common stock issued as employee compensation		101,002			198,128			1,187,685			3,780,395
Amortization of options and option modifications as stock compensation		1,765,381			34,418			72,578			1,872,377
Common stock issued for services rendered		1,755,200			1,536,431			1,529,882			11,817,829
Amortization of prepaid services in conjunction with common stock issuance		—			—						138,375
Non-cash compensation expense		—			—			—			45,390
Stock options and warrants issued for services rendered		591,000			11,000			82,000			7,956,723
Issuance of warrants as additional exercise right inducement		—			—			—			21,437,909
Preferred stock issued for services rendered		—			—			—			100
Treasury stock redeemed for non-performance of services		—			—			—			(138,000	)
Amortization of deferred debt issuance costs and loan origination fees		—			717,694			205,056			2,405,629
Amortization of discount on convertible debentures		—			15,931,481			3,483,684			38,345,592
Common stock issued as interest payment on convertible debentures		—			473,055						757,514
Interest on short-term advance		—			—			—			22,190
Founders’ shares transferred for services rendered		—			—			—			353,506
Fees in connection with refinancing of debt		—			—			—			113,274
Warrant repricing costs		—			3,198,604			—			3,198,604
Change in fair value of derivative warrant liability		(4,125,590	)		—			—			1,855,453	(1)
Changes in operating assets and liabilities (excluding the effects of acquisition):
Accounts receivable		(12,482	)		14,146			(30,701	)		(85,717	)
Miscellaneous receivables		—			—			—			43,812
Inventory		(618,401	)		147,591			(1,345,939	)		(1,934,251	)
Other current assets		601,115			(379,487	)		53,687			(320,065	)
Accounts payable and accrued expenses		1,878,296			462,520			762,505			14,431,436
Deferred revenue		252,042			13,325			92,481			390,879
Other, net		—			—			—			110,317
Net Cash Used in Operating Activities		(22,312,127	)		(22,647,516	)		(28,309,464	)		(191,624,051	)

Cash Flows From Investing Activities:
Purchase of property and equipment		(159,708	)		(1,385	)		(57,136	)		(4,754,640	)
Costs incurred for patents		(228,777	)		(152,148	)		(232,760	)		(2,431,287	)
Change in restricted cash		—			—			—			512,539
Proceeds from maturity of short term investments		—			8,852,214			28,307,895			195,242,918
Purchases of short-term investments		—			—			(23,148,371	)		(195,242,918	)
Cash received in conjunction with merger		—			—			—			82,232
Advances to Antigen Express, Inc.		—			—			—			(32,000	)
Increase in officers’ loans receivable		—			—			—			(1,126,157	)
Change in deposits		—			—			51,219			(652,071	)
Change in notes receivable - common stock		—			—			—			(91,103	)
Change in due from related parties		—			—			—			(2,222,390	)
Other, net		—			—			—			89,683
Net Cash (Used in) Provided By Investing Activities		(388,485	)		8,698,681			4,920,847			(10,625,194	)

Cash Flows From Financing Activities:
Proceeds from short-term advance		—			—			—			325,179
Repayment of short-term advance		—			—			—			(347,369	)
Proceeds from issuance of long-term debt		—			—			—			2,005,609
Repayment of long-term debt		(100,030	)		(82,682	)		(89,475	)		(2,124,556	)
Repayment of obligations under capital lease		(39,950	)		(35,234	)		—			(75,184	)
Change in due to related parties		—			—			—			154,541
Proceeds from exercise of warrants		1,574,062			109,170			—			45,698,281
Proceeds from exercise of stock options		—			56,000			391,790			5,001,916
Proceeds from minority interest investment		—			—			—			3,038,185
Proceeds from issuance of preferred stock		—			—			—			12,015,000
Redemption of SVR preferred stock		—			—			—			(100	)
Proceeds from issuance of convertible debentures, net		—			—			20,450,000			40,704,930
Payment of costs associated with convertible debentures		—			—			(722,750	)		(722,750	)
Repayments of convertible debentures		—			(4,506,667	)		—			(5,142,424	)
Purchase of treasury stock		—			—			—			(483,869	)
Proceeds from issuance of common stock, net		20,900,289			15,453,234			—			116,637,242
Purchase and retirement of common stock		—			—			(378,456	)		(497,522	)
Net Cash Provided by Financing Activities		22,334,371			10,993,821			19,651,109			216,187,109

Effect of Exchange Rates on Cash		50,063			(85,448	)		(51,049	)		(56,994	)

Net (Decrease) Increase in Cash and Cash Equivalents		(316,178	)		(3,040,462	)		(3,788,557	)		13,880,870

Cash and Cash Equivalents, Beginning of Period		14,197,048			17,237,510			21,026,067			—

Cash and Cash Equivalents, End of Period	$	13,880,870		$	14,197,048		$	17,237,510		$	13,880,870

(1) -

The Notes to Consolidated Financial Statements are an integral part of these statements.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Organization and Business:

Generex Biotechnology Corporation (the Company) and its wholly-owned subsidiary Generex Pharmaceuticals, Inc. are engaged in the research and development of drug delivery systems and technology. Since its inception, the Company has devoted its efforts and resources to the development of a platform technology for the oral administration of large molecule drugs, including proteins, peptides, monoclonal antibodies, hormones and vaccines, which historically have been administered by injection, either subcutaneously or intravenously. Oral–lynTM the first product based on this platform technology, is in the various stages of regulatory approval in different jurisdictions around the world.

The Company’s wholly-owned subsidiary, Antigen Express, Inc. (Antigen), is engaged in research and development of technologies and immunomedicines for the treatment of malignant, infectious, autoimmune and allergic diseases. The Company’s immunomedicine products work by stimulating the immune system to either attack offending agents (i.e., cancer cells, bacteria, and viruses) or to stop attacking benign elements (i.e., self proteins and allergens). The immunomedicine products are based on two platform technologies that were discovered by an executive officer of Antigen, the Ii-Key hybrid peptides and Ii-Suppression. These technologies are expected to greatly boost immune cell responses which diagnose and treat the ailments and conditions.

The Company has a branch office in Dubai, UAE which operates as “Generex Biotechnology Corporation MENA” (Middle East and North Africa). The primary purpose of the MENA branch is to obtain regulatory approval for Oral-lyn in the Middle East and North African countries. The MENA branch office also obtains licenses for and sells Generex’s confectionary over the counter products.

The Company is a development stage company, which has a limited history of operations and limited revenue to date. The Company currently is recognizing revenue from the sale of three of its four commercially available products. Additionally, the Company has several product candidates that are in various research or early stages of pre-clinical and clinical development. There can be no assurance that the Company will be successful in obtaining regulatory clearance for the sale of existing or any future products or that any of the Company’s products will be commercially viable.

Going Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has experienced negative cash flows from operations since inception and had an accumulated deficit at July 31, 2010 of approximately $325 million. The Company has funded its activities to date almost exclusively from debt and equity financings.

The Company will continue to require substantial funds to continue research and development, including preclinical studies and clinical trials of its product candidates, and to commence sales and marketing efforts, if the FDA or other regulatory approvals are obtained. Management’s plans in order to meet its operating cash flow requirements include financing activities such as private placements of its common stock, preferred stock offerings, issuances of debt and convertible debt instruments. Management is also actively pursuing industry collaboration activities including product licensing and specific project financing.

While the Company believes that it will be successful in obtaining the necessary financing to fund its operations, meet revenue projections and manage costs, there are no assurances that such additional funding will be achieved and that it will succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts of liabilities that might be necessary should the Company be unable to continue in existence.

Note 2 - Summary of Significant Accounting Policies:

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and all of its subsidiaries in which a controlling interest is maintained. For those consolidated subsidiaries where the Company ownership is less than 100 percent, the outside stockholders’ interests are shown as minority interests. Effective December 17, 2004, the Company’s ownership in all consolidated subsidiaries is 100 percent. All significant intercompany transactions and balances have been eliminated.

Development Stage Company

The accompanying consolidated financial statements have been prepared in accordance with the provisions of FASB ASC Topic 915, “Development Stage Entities.”

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accounts Receivable

Accounts receivable are customer obligations due under normal trade terms. The Company sells its product to various distributors and retailers. The Company performs ongoing credit evaluations of customers’ financial condition and does not require collateral.

Management reviews accounts receivable on a monthly basis to determine collectability. Balances that are determined to be uncollectible are written off to the allowance for doubtful accounts. The allowance for doubtful accounts contains a general accrual for estimated bad debts and had a balance of zero at July 31, 2010 and 2009, however, actual write-offs may exceed the allowance.

Inventory

Inventory consists of raw materials, product components and finished goods. Inventory is stated at the lower of cost or market with cost determined using the first-in first-out (“FIFO”) method. In evaluating whether inventory is stated at the lower of cost or market, management considers such factors as the amount of inventory on hand and in the distribution channel, estimated time required to sell such inventory, remaining shelf life and current and expected market conditions, including levels of competition. As appropriate, a provision is recorded to reduce inventory to its net realizable value.

Property and Equipment

Property and equipment are recorded at cost less accumulated depreciation. Depreciation is provided on the straight-line method over the estimated useful lives of the assets, which range from three to thirty years. Gains and losses on depreciable assets retired or sold are recognized in the statement of operations in the year of disposal. Repairs and maintenance expenditures are expensed as incurred.

Assets Held for Investment

Property held for investment is recorded at cost less accumulated depreciation. Depreciation is provided on the straight-line method over the estimated useful lives of the assets of thirty years. Gains and losses on depreciable assets retired or sold are recognized in the statement of operations in the year of disposal. Repairs and maintenance expenditures are expensed as incurred.

Patents

Capitalized patent costs represent legal costs incurred to establish patents and a portion of the acquisition price paid attributed to patents upon the acquisition of Antigen in August 2003. When patents reach a mature stage, any associated legal costs are comprised mostly of maintenance fees and costs of national applications and are expensed as incurred. Capitalized patent costs are amortized on a straight line basis over the remaining life of the patent. As patents are abandoned, the net book value of the patent is written off.

Impairment or Disposal of Long-Lived Assets

The Company assesses the impairment of long-lived assets under FASB ASC Topic 360 whenever events or changes in circumstances indicate that the carrying value may not be recoverable. For long-lived assets to be held and used, the Company recognizes an impairment loss only if its carrying amount is not recoverable and exceeds its fair value. The carrying amount of the long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposal of the asset. There were no impairments or disposals relating to long-lived assets in the fiscal years ended July 31, 2010, 2009 and 2008.

Derivative Warrant Liability

The Company’s derivative warrant instruments are measured at fair value using an accepted valuation model which takes into account, as of the valuation date, factors including the current exercise price, the expected life of the warrant, the current price of the underlying stock and its expected volatility, expected dividends on the stock and the risk-free interest rate for the term of the warrant. The Company recognizes all of its warrants with price protection in its consolidated balance sheet as liabilities depending on the rights or obligations under the contracts. The liability is revalued at each reporting period and changes in fair value are recognized currently in the consolidated statements of operations under the caption “Change in fair value of derivative warrant liability.” See Note 13 – Derivative Warrant Liability.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Revenue Recognition

Revenues from the sale of commercial products are recognized at the time title of goods passes to the buyer and the buyer assumes the risks and rewards of ownership. Certain product sales are made to retailers under agreements allowing for a right to return unsold products. In accordance with FASB ASC Topic 605, recognition of revenue on all sales to these retailers is deferred until the right of return expires, the product is sold to a third party or a provision for returns can be reasonably estimated based on historical experience. The cost of inventory under these sales is considered to be a consigned inventory until the revenue is recognized. Sales are reported net of estimated returns and allowances, discounts, mail-in rebate redemptions and credit card chargebacks. If actual sales returns, allowances, discounts, mail-in rebate redemptions or credit card chargebacks are greater than estimated by management, additional expense may be incurred.

Grant revenue is recognized as the Company provides the services stipulated in the underlying grant based on the time and expenditures incurred. Amounts received in advance of services provided are recorded as deferred revenue and amortized as revenue when the services are provided.

Included in miscellaneous income are fees received under licensing agreements. Nonrefundable fees received under licensing agreements are recognized as revenue when received if the Company has no continuing obligations to the other party.

Rental income is recognized as revenue in the period in which the related rental space is occupied.

Research and Development Costs

Expenditures for research and development are expensed as incurred and include, among other costs, those related to the production of experimental drugs, including payroll costs, and amounts incurred for conducting clinical trials. Amounts expected to be received from governments under research and development tax credit arrangements are offset against current research and development expense.

Income Taxes

Income taxes are accounted for under the asset and liability method prescribed by FASB ASC Topic 740. These standards require a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. Deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the tax rates expected to be in effect for the years in which the differences are expected to reverse. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax asset will not be realized. At July 31, 2010 and 2009, the Company had a full valuation allowance equal to the amount of the net deferred tax asset.

The Company adopted the FASB guidance concerning accounting for uncertainty in income taxes, which clarifies the accounting and disclosure for uncertainty in tax positions as of August 1, 2007. The guidance requires that the Company determine whether it is more likely than not that a tax position will not be sustained upon examination by the appropriate taxing authority. If a tax position does not meet the more likely than not recognition criterion, the guidance requires that the tax position be measured at the largest amount of benefit greater than 50 percent not likely of being sustained upon ultimate settlement. Based on the Company’s evaluation, management has concluded that there are no significant uncertain tax positions requiring recognition in the consolidated financial statements.

Stock-Based Compensation

The Company follows FASB ASC Topic 718 which requires that new, modified and unvested share-based payment transactions with employees, such as grants of stock options and restricted stock, be recognized in the financial statements based on their fair value at the grant date and recognized as compensation expense over their vesting periods. The Company estimates the fair value of stock options as of the date of grant using the Black-Scholes option pricing model and restricted stock based on the quoted market price. The Company also follows the guidance in FASB ASC Topic 505 for equity based payments to non-employees for equity instruments issued to consultants and other non-employees.

Net Loss per Common Share

Basic EPS is computed by dividing income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period. The computation of Diluted EPS does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings. Refer to Note 16 for methodology for determining net loss per share.

Comprehensive Loss

Other comprehensive income (loss), which includes only foreign currency translation adjustments, is shown in the Statement of Changes in Stockholders’ Equity.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Concentration of Credit Risk

The Company maintains cash balances, at times, with financial institutions in excess of amounts insured by the Canada Deposit Insurance Corporation and the U.S. Federal Deposit Insurance Corporation. Management monitors the soundness of these institutions and has not experienced any collection losses with these financial institutions.

During the fiscal year ended July 31, 2010, 41% of total net revenues were generated from two customers that individually represented over 10% of total revenue each (Customer A – 27%, Customer B – 14%). During the fiscal year ended July 31, 2009, 78% of total net revenues were generated from two different customers from above, each individually representing over 10% of total revenue (Customer C – 44%, Customer D – 34%). None of these four customers had balances owing to the Company at each of the respective fiscal year end dates.

Foreign Currency Translation

Foreign denominated assets and liabilities of the Company are translated into U.S. dollars at the prevailing exchange rates in effect at the end of the reporting period. Income statement accounts are translated at a weighted average of exchange rates which were in effect during the period. Translation adjustments that arise from translating the foreign subsidiary’s financial statements from local currency to U.S. currency are recorded in the other comprehensive loss component of stockholders’ equity.

Fair Value of Financial Instruments

Fair value is defined under FASB ASC Topic 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or the most advantageous market for an asset or liability in an orderly transaction between participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on the levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The levels are as follows:

Level 1 - Quoted prices in active markets for identical assets or liabilities

Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or corroborated by observable market data or substantially the full term of the assets or liabilities

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the value of the assets or liabilities

The Company’s financial instruments consist of cash and cash equivalents, receivables, long-term debt, accounts payable and accrued expenses, as well as derivative warrant liabilities. All of these items, except the derivative warrant liabilities were determined to be Level 1 fair value measurements. The carrying amounts of cash and cash equivalents, receivables and accounts payable and accrued expenses approximate their respective fair values because of the short maturities of these instruments. Long-term debt balances were determined to approximate their fair value as we believe the borrowing rates reflect the prevailing market rates available for similar debt instruments.

The Company has determined its derivative warrant liability to be a Level 2 fair value measurement and has used the Black-Scholes pricing model to calculate the fair value at the date of adoption and for the first, second and third quarters of the fiscal year ended July 31, 2010. In the fourth quarter ended July 31, 2010, the Company determined that due to the existence of the price protection provisions of these warrants, the binomial lattice model valuation method would likely provide a better estimate of the fair value of these warrants and adopted this method on a prospective basis. See Note 13 – Derivative Warrant Liability.

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 and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

The Company evaluates its estimates, including those related to bad debts, inventories, long lived assets (including patents) impairment valuations, debt obligations, derivatives, long-term contracts, and contingencies and litigation, on an ongoing basis. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Critical accounting estimates are reviewed and discussed with the audit committee of the board of directors. The Company considers an accounting estimate to be critical if it requires assumptions to be made that were uncertain at the time the estimate was made and changes in the estimate or different estimates that could have been selected could have a material impact on our results of operations or financial condition.

Effects of Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In November 2007, the FASB issued guidance related to accounting for collaborative arrangements. This guidance defines a collaborative arrangement as a contractual arrangement in which the parties are (i) active participants to the arrangement; and (ii) exposed to significant risks and rewards that depend upon the commercial success of the endeavor. It also addresses the appropriate statement of operations presentation for activities and payments between the participants in a collaborative arrangement as well as for costs incurred and revenue generated from transactions with third parties. This guidance is effective for the Company’s fiscal year beginning August 1, 2009. The adoption of this guidance did not have a significant impact on the Company’s consolidated financial statements.

In December 2007, the FASB issued an amendment to an existing accounting standard which provides guidance related to business combinations. The amendment retains the fundamental requirements that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business combination. This amendment also establishes principles and requirements for how the acquirer: a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree; b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase and c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This amendment applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. An entity may not apply it before that date. This guidance is effective for the Company’s fiscal year beginning August 1, 2009. The adoption of this guidance did not have a significant impact on the Company’s consolidated financial statements.

In April 2008, the FASB issued guidance related to determining the useful life of intangible assets. This guidance amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset. The objective of the guidance is to improve the consistency between the useful life of a recognized intangible asset and the period of expected cash flows used to measure the fair value of the asset. This guidance is effective for fiscal years beginning after December 15, 2008. This guidance is effective for the Company’s fiscal year beginning August 1, 2009. The adoption of this guidance did not have a significant impact on the Company’s consolidated financial statements.

In May 2008, the FASB issued guidance related to accounting for convertible debt instruments that may be settled in cash upon conversion (including partial cash settlements). This guidance requires a portion of this type of convertible debt to be recorded as equity and to record interest expense on the debt portion at a rate that would have been charged on nonconvertible debt with the same terms. This guidance is effective for the Company’s fiscal year beginning August 1, 2009. The adoption of this guidance did not have a significant impact on the Company’s consolidated financial statements.

In June 2008, the FASB issued guidance related to determining whether instruments granted in share-based payment transactions are participating securities. Securities participating in dividends with common stock according to a formula are participating securities. This guidance determined that unvested shares of restricted stock and stock units with nonforfeitable rights to dividends are participating securities. Participating securities require the “two-class” method to be used to calculate basic earnings per share. This method lowers basic earnings per common share. This guidance is effective for the Company’s fiscal year beginning August 1, 2009. The adoption of this guidance did not have a significant impact on the Company’s consolidated financial statements.

In June 2008, the FASB reached a consensus regarding the determination of whether an instrument (or an embedded feature) is indexed to an entity’s own stock, which is the first part of the scope exception related to accounting for derivative instruments and hedging activities. This guidance is effective for the Company’s fiscal year beginning August 1, 2009. The Company determined that certain of its warrants with price protection provisions are not considered to be indexed to the Company’s own stock, therefore, they do not meet the scope exception and thus should be accounted for as a liability. The adoption of this guidance resulted in the recognition of income of $4,125,590 within the Company’s consolidated statements of operations for the year ended July 31, 2010, a reduction to additional paid-in capital of $13,844,822 and an increase to accumulated deficit of $5,981,043. The net effect on additional paid-in capital and accumulated deficit represents the fair value of the derivative warrant liability as of August 1, 2009 (date of adoption) of $19,825,865 (see Note 13 – Derivative Warrant Liability).

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In June 2009, the FASB issued guidance which stipulates the FASB Accounting Standards Codification is the source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities. This guidance is effective for the Company’s fiscal year beginning August 1, 2009. The adoption of this guidance did not have a significant impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements

In October 2009, the FASB issued guidance on multiple deliverable revenue arrangements which eliminates the residual method of allocation and requires the relative selling price method when allocating deliverables of a multiple-deliverable revenue arrangement. The determination of the selling price for each deliverable requires the use of a hierarchy designed to maximize the use of available objective evidence including, vendor specific objective evidence, third party evidence of selling price, or estimated selling price. This guidance is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, and must be adopted in the same period using the same transition method. If adoption is elected in a period other than the beginning of a fiscal year, the amendments in these standards must be applied retrospectively to the beginning of the fiscal year. Full retrospective application of these amendments to prior fiscal years is optional. Early adoption of these standards may be elected. The Company is currently evaluating the impact of this new accounting guidance on its consolidated financial statements.

In January 2010, the FASB issued additional guidance on fair value measurements and disclosures which requires reporting entities to provide information about movements of assets among Level 1 and 2 of the three-tier fair value hierarchy established by the existing guidance. The guidance is effective for any fiscal year that begins after December 15, 2010, and it should be used for quarterly and annual filings. The Company is currently evaluating the impact of this new accounting guidance on its consolidated financial statements.

Note 3 - Property and Equipment:

The costs and accumulated depreciation of property and equipment are summarized as follows:

	July 31,
	2010		2009

Land	$	220,409	$	209,468
Buildings and Improvements		1,396,990		1,327,646
Furniture and Fixtures		159,739		102,603
Office Equipment		201,379		182,484
Lab Equipment		4,438,268		4,322,534

Total Property and Equipment		6,425,785		6,144,735

Less: Accumulated Depreciation		5,084,377		4,699,965

Property and Equipment, Net	$	1,341,408	$	1,444,770

Depreciation expense related to property, plant and equipment amounted to $238,253, $298,407 and $517,057 for the years ended July 31, 2010, 2009 and 2008, respectively.

Note 4 - Assets Held for Investment, Net:

The costs and accumulated depreciation of assets held for investment are summarized as follows:

	July 31,
	2010		2009

Assets Held For Investment	$	4,724,147	$	4,404,351

Less: Accumulated Depreciation		1,221,037		1,030,787

Assets Held for Investment, Net	$	3,503,110	$	3,373,564

These assets are held as collateral for long term debt (see Note 11). Depreciation expense on assets held for investment amounted to $134,251, $117,515 and $136,565 for the years ended July 31, 2010, 2009 and 2008, respectively.

The Company’s intent is to hold this property for investment purposes and collect rental income. Included in income from rental operations, net is $407,809, $497,858 and $531,757 of rental income and $201,234, $177,311 and $201,224 of rental expenses, including the depreciation expense amounts above relating to assets held for investment, for the years ended July 31, 2010, 2009 and 2008, respectively.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5 - Patents:

The costs and accumulated amortization of patents are summarized as follows:

	July 31,
	2010		2009

Patents	$	6,221,777	$	5,973,917

Less: Accumulated Amortization		2,688,089		2,271,531

Patents, Net	$	3,533,688	$	3,702,386

Weighted Average Life	11.7 years		12.2 years

Amortization expense amounted to $407,746, $390,773 and $431,297 for the years ended July 31, 2010, 2009 and 2008, respectively. Amortization expense is expected to be approximately $403,000 per year for the years ended July 31, 2011 through 2015. During the years ended July 31, 2010, 2009 and 2008, the Company wrote off $-0-, $-0- and $741,690 of net book value of patents to general and administrative expenses.

Note 6 - Income Taxes:

The Company has incurred losses since inception, which have generated net operating loss carryforwards. The net operating loss carryforwards arise from both United States and Canadian sources. Pretax losses arising from domestic operations (United States) were $18,127,536, $40,064,006 and $30,277,058 for the years ended July 31, 2010, 2009 and 2008, respectively. Pretax losses arising from foreign operations (Canada and Bermuda) were $7,152,404, $5,748,222 and $5,951,933 for the years ended July 31, 2010, 2009 and 2008, respectively. As of July 31, 2010, the Company has net operating loss carryforwards in Generex Biotechnology Corporation of approximately $185,017,000, which expire in 2018 through 2030, in Generex Pharmaceuticals Inc. of approximately $39,502,000, which expire in 2011 through 2030, and in Antigen Express, Inc. of approximately $22,442,000, which expire in 2016 through 2030. These loss carryforwards are subject to limitation due to the acquisition of Antigen and may be limited in future years due to certain structural ownership changes which have occurred over the last several years, related to the Company’s equity and convertible debenture financing transactions.

For the years ended July 31, 2010, 2009 and 2008, the Company’s effective tax rate differs from the federal statutory rate principally due to net operating losses and other temporary differences for which no benefit was recorded.

Deferred income taxes consist of the following:

	July 31,
	2010			2009
Net operating loss carryforwards	$	84,804,372		$	73,439,046
Other timing difference		929,056			3,771,660
Total Deferred Tax Assets		85,733,428			77,210,706

Valuation Allowance		(84,966,128	)		(76,273,691	)

Deferred Tax Liabilities
Intangible assets		(719,846	)		(813,672	)
Other timing difference		(47,454	)		(123,343	)
Total Deferred Tax Liabilities		(767,300	)		(937,015	)

Net Deferred Income Taxes	$	—		$	—

A reconciliation of the United States Federal Statutory rate to the Company’s effective tax rate for the years ended July 31, 2010, 2009 and 2008 is as follows:

	2010			2009			2008

Federal statutory rate		(34.0	)%		(34.0	)%		(34.0	)%

Increase (decrease) in income taxes resulting from:
Imputed interest income on intercompany receivables
from foreign subsidiaries		2.0			1.0			1.0
Nondeductible items		(6.0	)		5.0			1.0
Other timing differences		3.0			10.0			6.0
Change in valuation allowance		35.0			18.0			26.0

Effective tax rate		—	%		—	%		—	%

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of July 31, 2010, the Company had no unrecognized tax benefits, and no adjustment to its financial position, results of operations or cash flows was required. The Company does not expect that unrecognized tax benefits will increase within the next twelve months. The Company records interest and penalties related to tax matters within other expense on the accompanying Consolidated Statement of Operations. These amounts are not material to the consolidated financial statements for the periods presented. Generally, tax years 2007-2010 remain open to examination by the Internal Revenue Agency or other tax jurisdictions to which the Company is subject. The Company’s Canadian tax returns are subject to examination by federal and provincial taxing authorities in Canada. Generally, tax years 2004-2010 remain open to examination by the Canadian Customs and Revenue Agency or other tax jurisdictions to which the Company is subject.

Note 7 - Inventory:

Inventory consists of the following:

	July 31,
	2010		2009

Raw materials	$	962,035	$	838,929
Finished goods		949,848		432,527
Total	$	1,911,883	$	1,271,456

At July 31, 2010 and July 31, 2009, approximately 60% and 55%, respectively, of the inventory related to the Company’s Oral-lyn™ product, while the remainder in each year related to the Company’s over-the-counter confectionary products.

Note 8 - Accounts Payable and Accrued Expenses:

Accounts payable and accrued expenses consist of the following:

	July 31,
	2010		2009

Accounts Payable & Accruals – General and Administrative	$	3,480,340	$	2,892,552
Accounts Payable & Accruals – Research and Development		2,621,514		1,629,293
Accounts Payable & Accruals – Selling and Marketing		415,166		90,485
Executive Compensation		37,694		2,873,825
Total	$	6,554,714	$	7,486,155

Note 9 - Commitments and Contingent Liabilities:

Leases

The Company has entered into various operating lease agreements for the use of operating space, vehicles and office equipment.

Aggregate minimum annual lease commitments of the Company under non-cancelable operating leases as of July 31, 2010 are as follows:

Year	Amount

2011	$	209,515
2012		141,129
2013		32,421
2014		3,757
2015 and thereafter		—
Total Minimum Lease Payments	$	386,822

Lease expense amounted to approximately $200,000, $102,000 and $131,000 for the years ended July 31, 2010, 2009 and 2008, respectively.

The preceding data reflects existing leases and does not include replacements upon their expiration. In the normal course of business, operating leases are generally renewed or replaced by other leases.

Rental Operations

The Company sub-leases a portion of the floor that it owns in an office building located in Toronto, Canada. The following represents the approximate minimum amount of sublease income under current lease agreements to be received in years ending after July 31, 2010:

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year	Amount

2011	$	39,059
2012		40,326
2013		23,002
2014		8,029
2015 and thereafter		3,345
Total	$	113,761

Assets Held for Investment

The Company leases two commercial buildings located in Brampton and Mississauga, Canada, and units of property that it owns located in Toronto, Canada. The following represents the approximate minimum amount in lease income under current lease agreements to be received in years ending after July 31, 2010:

Year	Amount

2011	$	428,186
2012		369,547
2013		353,017
2014		275,635
2015		236,570
Thereafter		748,087
Total	$	2,411,042

Supply Agreements

On December 7, 2009, the Company entered into a long-term agreement with sanofi-aventis Deutschland GmbH (“sanofi-aventis”). Under this agreement, sanofi-aventis will manufacture and supply recombinant human insulin to the Company in the territories specified in the agreement. Through this agreement, the Company will procure recombinant human insulin crystals for use in the production of Generex Oral-lyn™. The terms of the supply agreement require the Company to make certain minimum purchases of insulin from sanofi-aventis through the period ending December 31, 2011.

The Company has a supply agreement with Presspart Manufacturing Limited (“Presspart”), whereby the Company will purchase its entire requirements for products to use in the administration of insulin through the buccal mucosa and shall not purchase the products or any metal containers competitive to the products from any other person in exchange for an exclusive non-transferable royalty-free irrevocable license to use the products. The contract shall continue for a minimum period of four contract years from the end of the first contract year in which the total quantity of products purchased by the Company from Presspart exceeds 10,000,000 units, and thereafter, shall continue until terminated by either party by giving twelve months written notice. As of July 31, 2010, the Company has not yet completed a contract year in which the total quantity has exceeded 10,000,000 units and as such the expiration date of this contract cannot be determined.

Pending Litigation

In February 2001, a former business associate of the former Vice President of Research and Development (“VP”) of the Company and an entity known as Centrum Technologies Inc. (“CTI”) commenced an action in the Ontario Superior Court of Justice against the Company and the VP seeking, among other things, damages for alleged breaches of contract and tortious acts related to a business relationship between this former associate and the VP that ceased in July 1996. The plaintiffs’ statement of claim also seeks to enjoin the use, if any, by the Company of three patents allegedly owned by CTI. The three patents are entitled Liquid Formulations for Proteinic Pharmaceuticals, Vaccine Delivery System for Immunization, Using Biodegradable Polymer Microspheres, and Controlled Releases of Drugs or Hormones in Biodegradable Polymer Microspheres. It is the Company’s position that the buccal drug delivery technologies which are the subject matter of the Company’s research, development, and commercialization efforts, including Generex Oral-lyn™ and the RapidMist™ Diabetes Management System, do not make use of, are not derivative of, do not infringe upon, and are entirely different from the intellectual property identified in the plaintiffs’ statement of claim. On July 20, 2001, the Company filed a preliminary motion to dismiss the action of CTI as a nonexistent entity or, alternatively, to stay such action on the grounds of want of authority of such entity to commence the action. The plaintiffs brought a cross motion to amend the statement of claim to substitute Centrum Biotechnologies, Inc. (“CBI”) for CTI. CBI is a corporation of which 50 percent of the shares are owned by the former business associate and the remaining 50 percent are owned by the Company. Consequently, the shareholders of CBI are in a deadlock. The court granted the Company’s motion to dismiss the action of CTI and denied the plaintiffs’ cross motion without prejudice to the former business associate to seek leave to bring a derivative action in the name of or on behalf of CBI. The former business associate subsequently filed an application with the Ontario Superior Court of Justice for an order granting him leave to file an action in the name of and on behalf of CBI against the VP and the Company. The Company opposed the application. In September 2003, the Ontario Superior Court of Justice granted the request and issued an order giving the former business associate leave to file an action in the name of and on behalf of CBI against the VP and the Company. A statement of claim was served in July 2004. The Company is not able to predict the ultimate outcome of this legal proceeding at the present time or to estimate an amount or range of potential loss, if any, from this legal proceeding.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On April 6, 2010, the Company commenced legal proceedings against TheStreet.com, Inc. and Adam Feuerstein in the Supreme Court of the State of New York (New York, NY) seeking $250,000,000 in damages for business defamation, product disparagement, and injurious falsehood. The claims arise out of articles authored by Mr. Feuerstein and published on TheStreet.com website on March 19 and March 26, 2010. In the complaint, the Company contends that the articles disseminate numerous defamatory statements about the Company, its management, and its flagship product, Generex Oral-lyn™, and that the articles put forward several ostensible statements of fact that are, in truth, misleading or outright misstatements made with malicious intent or with a reckless disregard for the truth. Defendants have filed an answer denying the claims in the complaint and have served discovery requests on the Company. The Company is not able to predict the ultimate outcome of this legal proceeding at the present time or to estimate an amount or range of potential damages recovered, if any, from this legal proceeding.

On May 11, 2010, plaintiff Colleen Solis filed a class action complaint against the Company and unidentified and unknown “Doe” defendants in Riverside County Superior Court (Riverside, California). Plaintiff is seeking to enjoin the Company from alleged misleading advertising about CraveNX™ and to obtain a refund of the purchase price she paid and restitution for the purported class. Plaintiff also seeks certification of a class of California consumers who purchased CraveNx™ in the past four years. The Company intends to file an answer to this complaint and to defend this action vigorously. The Company is not able to predict the ultimate outcome of this legal proceeding at the present time or to estimate an amount or range of potential loss, if any, from this legal proceeding.

The Company is involved in certain other legal proceedings in addition to those specifically described herein. Subject to the uncertainty inherent in all litigation, the Company does not believe at the present time that the resolution of any of these legal proceedings is likely to have a material adverse effect on the Company’s financial position, operations or cash flows.

With respect to all litigation, as additional information concerning the estimates used by the Company becomes known, the Company reassesses its position both with respect to accrued liabilities and other potential exposures.

Employment Agreements

As of July 31, 2010, the Company had an employment arrangement with an executive, whereby the Company is required to pay an annual base salary of $325,000. The term of service for this executive extended through March 16, 2008, which term had not been formally extended as of July 31, 2010. In the event the agreement is terminated, by reason other than cause, death, voluntary retirement or disability, the Company is required to pay the employee in one lump sum twelve months base salary and the average annual bonus.

As of July 31, 2010, the Company has an employment agreement with an executive expiring March 2012, whereby the Company is required to pay an annual base salary of $200,000. In the event the agreement is terminated, by reason other than cause, death, voluntary retirement or disability, the Company is required to pay the employee in one lump sum twelve months base salary and the average annual bonus.

As of July 31, 2010, the terms of employment between the Company and its then President/Chief Executive Officer expire December 2010. Under these terms, the Company is required to pay an annual base salary of $525,000 and bonuses at the discretion of the Compensation Committee of the Board of Directors. The terms of employment require six months notice of non-renewal/termination. In the event of termination of employment, by reason other than cause, death or disability or voluntary termination, the Company may be required to pay the executive the greater of five times base salary at the date of termination or $5,000,000 in a combination of cash and common stock of the Company and provide benefits for a period of twelve months following the date of termination. See Note 21 – Subsequent Events.

As of July 31, 2010, the terms of employment between the Company and its Chief Financial Officer/Chief Operating Officer expire December 2010. Under these terms, the Company is required to pay an annual base salary of $420,000 and bonuses at the discretion of the Compensation Committee of the Board of Directors. The terms of employment require six months notice of non-renewal/termination. In the event of termination of employment, by reason other than cause, death or disability or voluntary termination, the Company may be required to pay the executive the greater of five times base salary at the date of termination or $5,000,000 in a combination of cash and common stock of the Company and provide benefits for a period of twelve months following the date of termination.

As of July 31, 2010, the Company has three at will employment agreements with Antigen employees requiring the Company to pay an annual aggregate salary of $503,341 to the three employees. In the event any agreement is terminated by reason other than death, disability, a voluntary termination not for good reason (as defined in the agreement) or a termination for cause, the Company is required to pay the employee severance in accordance with the terms of the individual employment agreement.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Collaboration Agreements

The Company has a research and development agreement with Fertin Pharma A/S (Fertin) whereby the parties have established collaboration for the development of a metformin medicinal chewing gum for the treatment of Type-2 diabetes mellitus and obesity. The agreement includes certain milestone payments required of the Company upon Fertin’s completion of various development phases. The Company is required to pay all development costs related to the development of the product together with royalty payments amounting to five percent of the sale or licensing of the products. In lieu of receiving reimbursement for development costs, Fertin, at its discretion and upon written notice, may elect to receive royalty payments amounting to twenty-five percent of the sale or licensing of the products. The agreement shall remain in effect ten years from the date of market introduction and commercial sale. Either party may terminate the agreement by providing sixty days written notice. Through the fiscal year ended July 31, 2010, the Company has not paid any milestone or royalty payments relating to this agreement and has paid approximately $223,000, in the aggregate, to Fertin under the agreement for materials and development costs.

Note 10 - Related Party Transactions:

The Company uses a management company to manage all of its real estate properties. The property management company is owned by two of the Company’s directors, one of which is also a senior executive officer of the Company. For the years ended July 31, 2010, 2009 and 2008, the Company has paid the management company $55,691, $47,981 and $54,473, respectively, in management fees.

Note 11 - Long-Term Debt:

Long-term debt consists of the following:

	July 31,
	2010		2009
Mortgage payable - interest at 6.822 percent per annum, monthly principal and interest payments of $2,266, due June 2011, secured by real property located at 98 Stafford Drive, Brampton, Canada	$	255,674	$	$252,148

Mortgage payable - interest at 6.822 percent per annum, monthly principal and interest payments of $3,656, due June 2011, secured by real property located at 1740 Sismet Road, Mississauga, Canada		412,362		406,676

Mortgage payable - interest at 6.75 percent per annum, monthly payments of principal and interest of $5,851, due May 2015, secured by first mortgage over real property located at 17 Carlaw Avenue and 33 Harbour Square, Toronto, Canada		627,056		617,961

Mortgage payable - interest at 10.0 percent per annum, monthly payments of principal and interest of $2,536, due November 2013, secured by real property located at 13-14, 11 Carlaw Avenue, Toronto, Canada		185,665		187,487

Mortgage payable - interest at 8.5 percent per annum, monthly payments of interest only of $2,745, principal payment due August 2011 secured by real property located at 10-11, 11 Carlaw Avenue, Toronto, Canada		387,600		368,360

Mortgage payable - interest at 5.91 percent per annum, monthly interest payments of $8,921, principal due April 2014, secured by secondary rights to real property located at 1-8, 11 Carlaw Avenue, Toronto, Canada		1,097,575		1,082,577

Total Debt		2,965,932		2,915,209

Less Current Maturities of Long-Term Debt		1,141,861		1,060,788

Total Long-Term Debt	$	1,824,071	$	1,854,421

Aggregate maturities of long-term debt of the Company due within the next five years are as follows:

Year	Amount

2011	$	1,141,861
2012		92,115
2013		98,428
2014		1,136,530
2015		496,998
Thereafter		—
Total	$	2,965,932

For the years ended July 31, 2010, 2009 and 2008, the Company incurred $206,838, $193,351 and $232,440, respectively in interest expense on its long-term debt.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 12 - Convertible Debentures:

During the year ended July 31, 2009, the Company was contractually obligated under various convertible promissory notes (“convertible debentures”) with accredited investors. The convertible debentures were convertible into shares of the Company's common stock at a price as stipulated in each debenture, as amended.

The convertible debentures are accounted for in accordance with FASB ASC Topic 470. The following summarizes the significant terms and accounting for each convertible debenture entered into by the Company.

Date Issued	March 2008

Promissory Note Amount	$		(A)
# of Promissory Notes		6
Terms			(B)
Conversion Price	$	1.21

Gross Proceeds	$	20,650,000
Net Cash Proceeds	$	20,450,000
Warrants (“Series”) Issued to Investors (C)		42,665,274
Warrant (“Series”) Exercise Price (C)	$	0.33
Existing Warrants (“Pre-Extant”) Re-priced (D)		12,697,024
Re-priced Warrant (“Pre-Extant”) Exercise Price (D)	$	0.33
Warrant Fair Value (WFV) (includes value of re-priced warrants (“Pre-Extant”))	$	21,976,130
Warrant Relative Fair Value (WRFV)	$	10,646,218
Black-Scholes Model Assumptions			(E)
Beneficial Conversion Feature (BCF)	$	8,768,946
Costs associated with issuance classified as deferred
debt issuance costs	$	722,750

Amortization of WFV and BCF as
Non-cash Interest Expense	$	19,415,165
Principal and Interest Converted	$	—
Shares Issued Upon Conversion		—

Principal and Interest Repayments
in Shares of Common Stock	$	16,616,387
Shares Issued for Principal and
Interest Repayments		53,103,524
Principal and Interest Repayments
in Cash	$	5,380,697

(A)

$7,000,000; $5,000,000; $3,650,000; (2) $2,000,000; $1,000,000

(B)

The convertible debentures carried an 8% coupon and the initial maturity date was September 30, 2009, which was accelerated to July 1, 2009. Initially, the debentures carried an 18-month term and amortized in 15 installments commencing in the fifth month of the term. The principal and interest payments were payable in cash or, at the Company's option, in shares of the Company’s common stock subject to the satisfaction of certain conditions. If the Company elected to pay principal and interest in shares of common stock, the value of each share of common stock was calculated as equal to the lower of (i) the then applicable conversion price and (ii) the price which initially was computed as 90% of the arithmetic average of the VWAP of the common stock on each of the twenty (20) consecutive trading days immediately preceding the applicable installment date, subject to certain conditions. Each installment payment elected by the Company to be repaid in shares required the Company to deliver the number of shares estimated to satisfy the installment payment 20 trading days preceding the installment due date. The difference in the value of these shares and the installment payment on the installment date was required to be delivered to the holders by issuing additional shares. In addition, each convertible debenture contained certain “Events of Default”, including, without limitation, any default in the payment of principal or interest in respect of the convertible debentures as when they become due and payable, the Company’s failure to observe or perform any other covenant, agreement or warranty contained in the agreements relating to the convertible debentures. Upon the occurrence of the “Event of Default”, the holder could require us to redeem all or any portion of the convertible debentures upon written notice. Other conditions in the convertible debentures impeded the Company’s ability to make its monthly installment payments in shares of its common stock. Two of such conditions – the effectiveness of the registration statement for at least 30 days prior to installment notice and listing maintenance minimum bid price requirement of The NASDAQ Stock Market, were not met requiring the Company to procure waivers from the debenture holders in respect to these conditions. Additional conditions that would trigger an “Event of Default” have been disclosed below under the heading “Forbearance and Amendment Agreement.”

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(C)

The warrants issued to the holders of the convertible debentures initially were comprised of the following: Series A warrants 5,257,729; Series A-1 warrants 7,541,857; Series B warrants 17,066,108 and Series C warrants 12,799,580 (collectively, “Series Warrants”). During the year ended July 31, 2009, the Company revised the terms of these warrants to reduce the exercise price. Additionally, the expiration date of the Series A, A-1 and C warrants were extended. The accounting treatment for these warrants and further description regarding the round down price protection features of these warrants are described in Note 13 - Derivative Warrant Liability and Note 14 – Stockholders’ Equity, respectively.

The Series C warrants are exercisable contingent upon the exercise of Series B warrants. During the year ended July 31, 2009, the Series B warrants were exercised, therefore the contingency has been met. As such, the Company recorded a charge to interest expense in the amount of $1,608,616, which is comprised of the fair value of the Series C warrants at the commitment date in the amount of $1,234,836 and the fair value of the reduction of the Series C warrant exercise price in the amount of $373,780 which was the result of the Event of Default. The Company has accounted for this contingency in accordance with FASB ASC Topic 470.

(D)

The Company re-priced 12,697,024 existing warrants held by the convertible debenture holders (“Pre-Extant” warrants). The value associated with the “Pre-Extant” warrants amounted to $5,399,160 and was valued using the Black-Scholes pricing model. The value of the “Pre-Extant” warrants has been added to the value of the new warrants issued (see (C) above) and accounted for in accordance with FASB ASC Topic 470. During the year ended July 31, 2009, the Company further revised the terms of the “Pre-Extant” warrants to reduce the exercise price and extend the expiration date. The Company’s current accounting treatment for these warrants and further description of the price protection feature of these warrants are described in Note 13 - Derivative Warrant Liability and Note 14 – Stockholders’ Equity, respectively.

(E)

Black-Scholes pricing model assumptions used in valuing the “Pre-Extant” warrants were: risk free interest (2.70 percent); expected volatility (.8611); life of 1 ½ years, 7 years and 7 ½ years, respectively.

Event of Default

During the year ended July 31, 2009, one of the Equity Conditions within the convertible debentures was not satisfied in that the Company received notice from The NASDAQ Stock Market of the Company’s failure to comply with the minimum bid price requirement of Marketplace Rule 4310(c)(4) (now known as Listing Rule 5550(a)(2)) (the “Listing Maintenance Equity Condition”), which constitutes a “Breach of Condition” under each of the debentures.

In addition, during the year ended July 31, 2009 the Company was not in compliance with the Net Cash Balance Test, which constituted an “Event of Default” under each of the convertible debentures (the “Net Cash Balance Test Default”).

The Company and each of the holders of the convertible debentures entered into each of the separate agreements to address the defaults caused by non-compliance with the Listing Maintenance Equity Condition and the Net Cash Balance Test Default. Significant provisions of these agreements include the following:

Each holder agreed to waive (a) the Event of Default under Section 4(a)(xv) of the convertible debentures with respect to the Company’s failure to meet Net Cash Balance Test in respect of any and all periods prior to December 22, 2008 (the “Effective Date”), and (b) compliance by the Company with the Net Cash Balance Test for the period commencing on the Effective Date and ending on January 30, 2009.

The exercise price of each of the Series Warrants was reduced from $1.21 to $0.50.

The exercise price of each of the Pre-Extant Warrants was reduced from $1.10 to $0.50.

The Company was granted a one-time right to require each of the holders to exercise all of their then outstanding Series Warrants and Pre-Extant Warrants if the arithmetic average of the volume weighted average price of the common stock on the Principal Market for a twenty-one (21) consecutive Trading Day period is equal to or greater than $1.00. The Company agreed to issue each holder a seven-year warrant to acquire up to that number of shares of common stock that is equal to the number of shares of common stock acquired by such holder in connection with such holder’s exercise of its Series Warrants and its Pre-Extant Warrants pursuant to the exercise of such call option by the Company, at an exercise price of $1.00 per share.

The expiration date of each Series A Warrant and each Series A-1 Warrant was extended to March 31, 2016.

The expiration date of each Series C Warrant was extended to September 30, 2016.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The expiration date of each Pre-Extant Warrant was extended to March 31, 2016.

The Company honored the notices it delivered to each of the holders on December 1, 2008 in respect of the January 1, 2009 Installment Date pursuant to which the Company confirmed its intention to redeem 100% of the January 1, 2009 Installment Amounts pursuant to a Company Redemption, and the Company paid the applicable Company Redemption Amount when due.

As a result of the event of default, the Company evaluated the debt modification under the guidance of FASB ASC Topic 470. Based on conclusions drawn during the evaluation, the Company recorded a non-cash charge to the statement of operations of approximately $1,590,000 which represents the incremental fair value resulting from the modification of the warrants using the Black-Scholes pricing model.

Forbearance and Amendment Agreement

On February 27, 2009 (“Effective Date”), the Company and each of the holders of the convertible debentures entered into a separate Forbearance and Amendment Agreement (the “Forbearance Agreement”) pursuant to which the holders agreed for a 21-day period ending March 20, 2009 (the “Standstill Period”) to temporarily forbear from exercising certain rights and remedies under the convertible debentures. The Standstill Period was extended to April 3, 2009 by mutual agreement of the parties. Significant provisions of these agreements include:

The Company acknowledged the existence of certain Events of Default (see disclosure above), including, among others, the Company’s failure to procure the Control Agreements required by the Company’s December 22, 2008 agreements with the holders, to satisfy the Net Cash Balance Test under Section 13(f) of the convertible debentures, and to deliver Event of Default Notices to each holder with respect to the foregoing Events of Default (“Existing Events of Default”).

During the Standstill Period, each holder agreed not to exercise any of its rights or remedies solely with respect to any of the Existing Events of Default. Upon the expiration of the Standstill Period or upon the occurrence of any Event of Default occurring after the Effective Date (each such event a “Standstill Termination”), each holder would have the right to immediately exercise all of its rights and remedies under the convertible debentures and the related Security Agreement.

Pursuant to the Forbearance Agreement, the Company and each holder agreed to amend the terms of each convertible debenture as follows:

The Maturity Date was accelerated from August 30, 2009 to July 1, 2009, subject to extension by the holder.

The term “Installment Date” was amended to mean each of the following dates: (i) August 1, 2008, (ii) September 1, 2008, (iii) October 1, 2008, (iv) November 1, 2008, (v) December 1, 2008, (vi) January 1, 2009, (vii) February 1, 2009, (viii) March 1, 2009, (ix) April 1, 2009, (x) May 1, 2009, (xi) June 1, 2009 and (xii) the Maturity Date.

The term “Installment Amount” was amended to mean, with respect to any Installment Date occurring on or after March 1, 2009, the lesser of (A) the product of (i) $1,927,333.32, multiplied by (ii) Holder Pro Rata Amount and (B) the Principal amount under the convertible debenture as of such Installment Date, together with any accrued and unpaid Interest as of such Installment Date and accrued and unpaid Late Charges, if any, as of such Installment Date.

Section 4(a)(iii) of the convertible debentures was amended to permit the common stock to be quoted on the OTC Bulletin Board if it is suspended from trading or delisted from the NASDAQ Capital Market.

The monthly expenditure of cash by the Company together with its subsidiaries in excess of $900,000 in the aggregate in March, April or May 2009 would constitute an “Event of Default,” provided that all cash used to effect Company Redemptions under the debentures as permitted thereunder will not be deemed to be cash expended solely for purposes of this determination.

An “Event of Default” was defined to include any breach by the Company of Section 8 of the Registration Rights Agreement (including, without limitation, any failure by the Company to (i) file with the SEC any required reports under Section 13 or 15(d) of the 1934 Act such that it is not in compliance with Rule 144(c)(1), or (ii) meet any of the requirements under rule 144(i)(2)).

As of the Effective Date, the Company could only effect a Company Redemption with respect to the payment of an Installment Amount by using net proceeds received by the Company from any subsequent private placements, revenues from sales of products by the Company or licensing fees received by the Company.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company had to provide a monthly certification executed by the Company’s Chief Financial Officer stating whether an Event of Default occurred with respect to the Company’s and its subsidiaries’ cash expenditures in excess of $900,000 in the calendar month immediately preceding the date of such certification, and the Company had to publicly disclose any such Event of Default on the date of such certification.

The Company was required to enter into a Control Agreement with each holder and a financial institution to act as depositary with respect to a non-operating deposit account and deposit $3,000,000 into such account, which account and Control Agreement will be subject to the terms of the Security Agreement. In addition, the Company was obligated to use commercially reasonable efforts to obtain, by the expiration of the Standstill Period, a clean, unconditional and irrevocable letter of credit that will remain “evergreen” until each debenture is repaid in full in the aggregate amount of $3,000,000 for the ratable benefit of each holder, which letter of credit would be subject to the terms of the Forbearance Agreement.

Prior to the expiration of the Standstill Period, the Company had to issue and deliver irrevocable instructions to the Company’s transfer agent to issue certificates to each holder for shares of the Common Stock, or credit shares to the holder’s account, at the holder’s written request to provide each holder’s pro rata portion of Pre-Installment Conversion Shares for the payment of Installment Amounts under the debenture or upon the occurrence of an Event of Default after the Effective Date.

With respect to the April 1, 2009 Installment Date, the following terms applied:

March 9, 2009 was the Installment Notice Due Date.

The Pre-Installment Conversion Price was equal to the price which was computed as 90% of the arithmetic average of the VWAP of the common stock on each of the 14 consecutive Trading Days immediately preceding March 9, 2009 (to be appropriately adjusted for any stock split, stock dividend, stock combination or other similar transaction during such measuring period).

The Company Conversion Price was equal to the price which was computed as 90% of the arithmetic average of the volume weighted average price (VWAP) of the common stock on each of the 17 consecutive Trading Days immediately preceding such Installment Date (to be appropriately adjusted for any stock split, stock dividend, stock combination or other similar transaction during such measuring period).

The Company was obligated to deliver the Pre-Installment Conversion Shares (which will be equal the number of shares of common stock equal to the quotient of (i) the Installment Amount due on such Installment Date divided by (ii) the Pre-Installment Conversion Price) to the holder no later than two Trading Days after March 9, 2009.

The number of shares of common stock to be delivered pursuant to a Company Conversion on April 1, 2009 with respect to the Installment Amount due on that date was reduced by the above-mentioned number of the Pre-Installment Conversion Shares previously delivered.

Each holder agreed to waive satisfaction of the following:

the Listing Maintenance Equity Condition solely with respect to the Installment Dates of March 1, 2009, April 1, 2009, May 1, 2009, June 1, 2009 and the Maturity Date, if, (i) other Equity Conditions and all other conditions relating to a Company Conversion are satisfied and (ii) the shares of common stock continue to be listed or designated for quotation on, and trade on, the NASDAQ Capital Market, another national stock exchange or are quoted on the OTC Bulletin Board;

the Net Cash Balance Test, but only until a Standstill Termination occurs; and

all Existing Events of Default, the Net Cash Balance Test and accrual of interest at the default interest rate, but only to the extent that the Company complies with all terms of the Forbearance Agreement and no other Event of Default occurs after the Effective Date.

The Company agreed to reimburse each holder for the transactions costs relating to the Forbearance Agreement and defaults that occurred before the Effective Date, which amounts were paid in the form of shares of common stock determined pursuant to the formula specified in the Forbearance Agreement.

The Company complied with all of its covenants under the Forbearance and Amendment Agreements and there were no additional Events of Default during the Standstill Period.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In May of 2009, the Company completed a private placement of its common stock by registered direct offering of 15,151,517 shares of its common stock to a select group of accredited investors at $0.33 per share. As a result of this transaction, the conversion price of the convertible debentures and the exercise price of the related warrants were reduced to $0.33 (from $0.50) per share resulting in the warrant re-pricing cost of $1,211,494 which was recorded as share issuance cost. During the last fiscal quarter of 2009, the entire outstanding principal amount due under the convertible debentures and accrued interest thereon was converted into shares of common stock. The Company’s current accounting treatment for these warrants and further description regarding the price protection feature of these warrants are described in Note 13 - Derivative Warrant Liability and Note 14 – Stockholders’ Equity, respectively.

As of both July 31, 2010 and 2009, the net outstanding balance of convertible debentures was zero.

Note 13 - Derivative Warrant Liability:

The Company has warrants outstanding with price protection provisions that allow for the reduction in the exercise price of the warrants in the event the Company subsequently issues stock or securities convertible into stock at a price lower than the exercise price of the warrants. Simultaneously with any reduction to the exercise price, the number of shares of common stock that may be purchased upon exercise of each of these warrants shall be increased or decreased proportionately, so that after such adjustment the aggregate exercise price payable for the adjusted number of warrants shall be the same as the aggregate exercise price in effect immediately prior to such adjustment. As of August 1, 2009, the Company accounted for its warrants with price protection in accordance with FASB ASC Topic 815.

Accounting for Derivative Warrant Liability

The Company’s derivative warrant instruments have been measured at fair value at July 31, 2010 using the binomial lattice model. The Company recognizes all of its warrants with price protection in its consolidated balance sheet as liabilities. The liability is revalued at each reporting period and changes in fair value are recognized currently in the consolidated statements of operations. The initial recognition and subsequent changes in fair value of the derivative warrant liability have no effect on the Company’s cash flows.

The derivative warrants outstanding at July 31, 2010 are all currently exercisable with a weighted-average remaining life of 5.75 years.

The revaluation of the warrants at each reporting period resulted in the recognition of income of $4,125,590 within the Company’s consolidated statements of operations for the fiscal year ended July 31, 2010 under the caption “Change in fair value of derivative warrant liability”. The fair value of the warrants at July 31, 2010 is $5,679,721 which is reported on the consolidated balance sheet under the caption “Derivative Warrant Liability”. The following summarizes the changes in the value of the derivative warrant liability from the date of the Company’s adoption of the provisions of FASB ASC Topic 815 on August 1, 2009 until July 31, 2010:

Balance at August 1, 2009– Derivative warrant liability	$	19,825,865

Exercise of warrants classified as derivative warrant liabilities		(10,020,554	)

Decrease in fair value of derivative warrant liability		(4,125,590	)

Balance at July 31, 2010 – Derivative warrant liability	$	5,679,721

Fair Value Assumptions Used in Accounting for Derivative Warrant Liability

The Company has determined its derivative warrant liability to be a Level 2 fair value measurement and used the Black-Scholes pricing model to calculate the fair value at the date of adoption and for the first, second and third quarters of the fiscal year ended July 31, 2010. This model was used because of its wide acceptance by the investment community, relative simplicity and its emphasis on observable inputs. Key assumptions used in the Black-Scholes fair value calculation were as follows:

	April 30,			January 31,			October 31,			August 1,
	2010			2010			2009			2009

Expected term		5.92			6.17			6.42			6.67
Volatility		99.5	%		98.5	%		98.0	%		96.9	%
Risk-free interest rate		0.21	%		0.16	%		0.16	%		0.16	%
Dividend yield		0			0			0			0

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In the fourth quarter ended July 31, 2010, the Company determined that due to the existence of the price protection provisions, the binomial lattice model valuation method would likely provide a better estimate of the fair value of these warrants. We engaged a valuation firm to estimate the fair value of these warrants using the binomial lattice model.

The binomial lattice model requires six basic data inputs: the exercise or strike price, time to expiration, the risk free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Because the warrants contain the price protection feature, the probability that the exercise price of the warrants would decrease as the stock price decreased was incorporated into the valuation calculations. The key inputs used in the July 31, 2010 fair value calculation were as follows:

Current exercise price	$	0.33
Time to expiration	5.75 years
Risk-free interest rate		1.87	%
Estimated volatility		104	%
Dividend		-0-
Stock price on July 31, 2010	$	0.40

In accordance with the provisions of FASB ASC Topic 250 (Accounting Changes and Error Corrections) as they pertain to a change in accounting estimate due to a change in valuation technique, the binomial lattice valuation method is being applied on a prospective basis beginning in the fourth quarter of our fiscal year ended July 31, 2010.

Restatement of Prior Periods

In fiscal year 2010, the Company adopted the provisions of FASB ASC Topic 815 for accounting of its warrants with price protection. In the fourth quarter of fiscal year 2010, the Company determined that the transitional accounting guidance found in ASC 815-10-65-3d through 65-3f should have been applied in a different manner at date of adoption on August 1, 2009. The estimated fair value of these warrants at the date of adoption was $19,825,565. When the Company adopted this accounting guidance, the Company recorded an entry to reclassify the current value of the warrants at the date of adoption to “Derivative Warrant Liability”, with the offsetting amount being charged to “Additional paid-in capital”. The Company subsequently determined that the full amount of the warrant fair value at the date of adoption should not have charged to “Additional paid-in capital”. Instead, the Company should have recorded a portion of the amount to the opening balance of retained earnings (deficit), as if the accounting guidance had been in effect from the issuance date of the instruments. This resulted in an understatement of “Additional paid-in capital” of $5,981,043 and an understatement of “Deficit accumulated during the development stage” by the same amount as of the date of adoption and for each of the subsequent interim periods ended October 31, 2009, January 31, 2010 and April 30, 2010. There was no impact to “Total Stockholders’ Equity” as of the date of adoption or for any of the subsequent interim periods.

A summary of the impact on each of the previously reported interim periods is included below:

	Per Consolidated Balance Sheet at
	October 31, 2009			January 31, 2010			April 30, 2010
As previously reported
Additional paid-in capital	$	314,765,024		$	316,812,595		$	324,372,759
Deficit accumulated during the development stage	$	(299,183,874	)	$	(308,478,092	)	$	(313,045,642	)
Total Stockholders' Equity	$	16,519,711		$	9,293,859		$	12,417,600

As corrected per ASC 815-10-65-3d to 3f
Additional paid-in capital	$	320,746,067		$	322,793,638		$	330,353,802
Deficit accumulated during the development stage	$	(305,164,917	)	$	(314,459,135	)	$	(319,026,685	)
Total Stockholders' Equity*	$	16,519,711		$	9,293,859		$	12,417,600

* No change from “As previously reported”.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 14 - Stockholders’ Equity:

Warrants

As of July 31, 2010, the Company has the following warrants to purchase common stock outstanding:

Number of Shares		Warrant Exercise			Warrant
To be Purchased		Price per Share			Expiration Date

	102,232	$	1.25		April 17, 2011
	70,000	$	2.66		April 17, 2011
	25,000	$	1.91		May 29, 2011
	5,000	$	1.05		July 19, 2011
	100,000	$	1.71		March 3, 2012
	140,000	$	1.45		May 27, 2012
	365,625	$	0.33		May 31, 2012
	50,000	$	0.94		March 9, 2013
	125,000	$	3.75		March 26, 2013
	8,844,926	$	0.76		December 15, 2014
	3,572,971	$	0.79		February 4, 2015
	300,000	$	0.39	(average)	February 9, 2015
	6,022,651	$	1.00		March 15, 2015
	1,000,000	$	0.001		May 31, 2015
	200,000	$	1.25		March 7, 2015
	13,931,027	$	0.33		March 31, 2016*
	2,572,313	$	0.33		September 30, 2016*
	37,426,745

* Subject to price protection provisions as described below.

The outstanding warrants at July 31, 2010 have a weighted average exercise price of $0.61 per share and have a weighted average remaining life of 4.98 years.

The Company has 13,931,027 warrants with a current exercise price of $0.33 and an expiry date of March 31, 2016 and 2,572,313 warrants with a current exercise price of $0.33 and an expiry date of September 30, 2016 (16,503,340 warrants in total) which have price protection provisions that allow for the reduction in the current exercise price upon the occurrence of certain events, including the Company’s issuance of common stock or securities convertible into or exercisable for common stock, such as options and warrants, at a price per share less than the exercise price then in effect. For instance, if the Company issues shares of its common stock or options exercisable for or securities convertible into common stock at an effective price per share of common stock less than the exercise price then in effect, the exercise price will be reduced to the effective price of the new issuance. Simultaneously with any reduction to the exercise price, the number of shares of common stock that may be purchased upon exercise of each of these warrants shall be increased proportionately, so that after such adjustment the aggregate exercise price payable for the adjusted number of warrants shall be the same as the aggregate exercise price in effect immediately prior to such adjustment.

The Company’s issuance of certain securities will not trigger the price protection provisions of these warrants described above. These “excluded” issuances include the Company’s issuance of: (a) shares of common stock or standard options to the Company’s directors, officers, employees or consultants pursuant to a board-approved equity compensation program or other contract or arrangement (up to an aggregate amount of 5,608,926, representing 5% of the common stock issued and outstanding immediately prior to March 31, 2008); (b) shares of common stock issued upon the conversion or exercise of any security, right or other instrument convertible or exchangeable into common stock (or securities exchangeable into common stock) issued prior to March 31, 2008; (c) the Warrant Shares; and (d) shares of common stock and warrants in connection with strategic alliances, acquisitions, mergers, and strategic partnerships, the primary purpose of which is not to raise capital, and which are approved in good faith by the Company’s board of directors (up to an aggregate number of 11,217,852, representing 10% of the shares of common stock issued and outstanding immediately prior to March 31, 2008).

The Company accounts for the warrants with price protection provisions in accordance with FASB ASC Topic 815 as described in Note 13 above.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Preferred Stock

The Company has authorized 1,000,000 shares of preferred stock with a par value of one-tenth of a cent ($.001) per share. The preferred stock may be issued in various series and shall have preference as to dividends and to liquidation of the Company. The Company’s Board of Directors is authorized to establish the specific rights, preferences, voting privileges and restrictions of such preferred stock, or any series thereof. At July 31, 2010 and 2009, no shares of preferred stock were issued or outstanding.

Equity Instruments Issued for Services Rendered

During the years ended July 31, 2010, 2009 and 2008, the Company issued stock options, warrants and shares of common stock in exchange for services rendered to the Company. The fair value of each stock option and warrant was valued using the Black Scholes pricing model which takes into account as of the grant date the exercise price and expected life of the stock option or warrant, the current price of the underlying stock and its expected volatility, expected dividends on the stock and the risk free interest rate for the term of the stock option or warrant. Shares of common stock are valued at the quoted market price on the date of grant. The fair value of each grant was charged to the related expense in the statement of operations for the services received.

Note 15 – Stock-Based Compensation:

Stock Option Plans

As of July 31, 2010, the Company had three stockholder-approved stock incentive plans under which shares and options exercisable for shares of common stock have been or may be granted to employees, directors, consultants and advisors. A total of 2,000,000 shares of common stock are reserved for issuance under the 2000 Stock Option Plan (the 2000 Plan), a total of 12,000,000 shares of common stock are reserved for issuance under the 2001 Stock Option Plan (the 2001 Plan) and 30,000,000 shares of common stock are reserved for issuance under the 2006 Stock Plan (the 2006 Plan). In July 2009, the 2006 Plan was amended to increase the reserved shares from 10,000,000 to 30,000,000. Restricted shares can only be issued under the 2006 Plan. At July 31, 2010, there were 2,000,000, 4,048,490 and 18,668,245 shares of common stock reserved for future awards under the 2000 Plan, 2001 Plan and 2006 Plan, respectively. The Company issues new shares of common stock from the shares reserved under the respective Plans upon conversion or exercise of options and issuance of restricted shares.

The 2000, 2001 and 2006 Plans (the Plans) are administered by the Board of Directors (the Board). The Board is authorized to select from among eligible employees, directors, advisors and consultants those individuals to whom options are to be granted and to determine the number of shares to be subject to, and the terms and conditions of the options. The Board is also authorized to prescribe, amend and rescind terms relating to options granted under the Plans. Generally, the interpretation and construction of any provision of the Plans or any options granted hereunder is within the discretion of the Board.

The Plans provide that options may or may not be Incentive Stock Options (ISOs) within the meaning of Section 422 of the Internal Revenue Code. Only employees of the Company are eligible to receive ISOs, while employees and non-employee directors, advisors and consultants are eligible to receive options which are not ISOs, i.e. “Non-Qualified Options.” The options granted by the Board in connection with its adoption of the Plans were Non-Qualified Options. In addition, the 2006 Plan also provides for restricted stock grants.

Share-based employee compensation related to stock options for the years ended July 31, 2010, 2009 and 2008 amounted to $885,872, $45,417 and $72,578 for each year and were charged to the consolidated statements of operations. Share-based employee compensation related to common stock grants for the years ended July 31, 2010, 2009 and 2008 amounted to $104,738, $198,128 and $1,659,558, respectively, and were charged to the consolidated statements of operations.

The fair value of each option granted is estimated on grant date using the Black-Scholes option pricing model which takes into account as of the grant date the exercise price and expected life of the option, the current price of the underlying stock and its expected volatility, expected dividends on the stock and the risk-free interest rate for the term of the option. The following is the average of the data used to calculate the fair value:

	Risk-Free			Expected		Expected			Expected
	Interest Rate			Life (Years)		Volatility			Dividends

July 31, 2010		0.14	%		6.5		104	%		-0-
July 31, 2009		0.17	%		5.0		101	%		-0-
July 31, 2008		1.96	%		5.0		74	%		-0-

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following is a summary of the common stock options granted, forfeited or expired and exercised under the Plan:

				Weighted Average
				Exercise Price
	Options			per Share

Outstanding - August 1, 2007		7,962,638		$	1.12
Granted		175,000		$	0.96
Forfeited or expired		(1,490,000	)	$	2.10
Exercised		(401,000	)	$	0.98
Outstanding July 31, 2008		6,246,638		$	0.66
Granted		50,000		$	0.29
Forfeited or expired		(1,129,500	)	$	1.68
Exercised		(100,000	)	$	0.56
Outstanding - July 31, 2009		5,067,138		$	0.44
Granted		2,705,000		$	0.63
Forfeited		(270,000	)	$	0.92
Expired		(36,500	)	$	0.63
Exercised		—		$	0.00
Outstanding - July 31, 2010		7,465,638		$	0.49
Exercisable - July 31, 2010		5,443,969		$	0.43

The 7,465,638 outstanding options at July 31, 2010 had a weighted average remaining contractual term of 5.47 years.

Options typically vest over a period of two to four years and have a contractual life of five to ten years.

The following is a summary of the non-vested common stock options granted, vested and forfeited under the Plan:

				Weighted Average
				Grant Date
	Options			Fair Value

Outstanding - August 1, 2009		43,750		$	0.59
Granted		2,705,000		$	0.53
Vested		(727,081	)	$	0.54
Forfeited		—		$	—
Outstanding - July 31, 2010		2,021,669		$	0.53

As of July 31, 2010, the Company had $561,783 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of 2.3 years.

During the twelve months ended July 31, 2010, the Company modified the terms of 4,535,638 outstanding options which resulted in a charge to operations in the amount of $875,773. The fair value of modification cost is estimated as the difference of options’ fair value before and after modification date. The estimates employ the Black-Scholes option pricing model, which takes into account the exercise price ($0.001 – $0.94), expected life of the option (5 years), the current price of the underlying stock ($0.59) and its expected volatility (109.05%), expected dividends on the stock ($0) and the risk-free interest rate for the term of the option (0.11%).

In August 2007, the Company issued 550,000 shares of common stock under the 2006 Plan in the form of restricted stock awards to officers. The fair value of these shares, which was based on the quoted market price of the Company’s common stock on the dates of the issuance, was $830,500. These shares were issued as an incentive to retain key employees and officers. A portion of these shares vested immediately while the remaining portion vested over two years from the date of the grant. The following table summarizes the Company’s non-vested restricted stock activity for the twelve months ended July 31, 2010.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

				Weighted
				Average
	Number of			Grant Date
	Shares			Fair Value

Non-vested restricted stock, August 1, 2009		14,844		$	1.51
Granted		—			n/a
Vested		(14,844	)		1.51
Forfeited		—			n/a
Non-vested restricted stock, July 31, 2010		—			n/a

The following table summarizes information on stock options outstanding at July 31, 2010:

	Options Outstanding
					Weighted
	Number		Weighted		Average
	Outstanding		Average		Remaining		Aggregate
Range of	at		Exercise		Life		Intrinsic
Exercise Price	July 31, 2010		Price		(Years)		Value
$0.001 - $0.18		2,239,610	$	0.001		4.24
$0.19 - $0.56		350,000	$	0.47		4.37
$0.57 - $0.63		850,000	$	0.61		4.24
$0.64 - $0.65		2,776,250	$	0.64		7.61
$0.66 - $0.96		1,249,778	$	0.94		4.04
		7,465,638	$	0.49		5.47	$	901,504

	Options Exercisable
					Weighted
	Number		Weighted		Average
	Outstanding		Average		Remaining		Aggregate
Range of	at		Exercise		Life		Intrinsic
Exercise Price	July 31, 2010		Price		(Years)		Value
$0.001 - $0.18		2,239,610	$	0.001		4.24
$0.19 - $0.56		350,000	$	0.47		4.37
$0.57 - $0.63		850,000	$	0.61		4.24
$0.64 - $0.65		754,581	$	0.64		8.39
$0.66 - $0.96		1,249,778	$	0.94		4.04
		5,443,969	$	0.43		4.78	$	901,504

	For the Year Ended July 31,
	2010		2009		2008

Weighted Average Grant Date Fair Value of Options Granted	$	0.53	$	0.22	$	0.59
Aggregate Intrinsic Value of Options Exercised	$	—	$	15,111	$	103,850
Cash Received for Exercise of Stock Options	$	—	$	56,000	$	391,790

The intrinsic value is calculated as the difference between the market value as of July 31, 2010, 2009 and 2008 and the exercise price of the shares on the respective dates. The market values as of July 31, 2010, 2009 and 2008 were $0.40, $0.65 and $0.80, respectively as reported by the NASDAQ Stock Market.

Note 16 - Net Loss per Share:

Basic loss per share (“EPS”) and Diluted EPS for the years ended July 31, 2010, 2009 and 2008 have been computed by dividing the net loss available to common stockholders for each respective period by the weighted average shares outstanding during that period. All outstanding options, warrants, non-vested restricted stock and shares to be issued upon conversion of the outstanding convertible debentures, representing approximately 44,892,383, 51,560,258 and 80,469,695 incremental shares, have been excluded from the respective 2010, 2009 and 2008 computation of diluted EPS as they are anti-dilutive due to the losses generated.

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 17 - Supplemental Disclosure of Cash Flow Information:

	For the Years Ended July 31,
	2010		2009		2008
Cash paid during the year for:
Interest	$	210,082	$	1,075,889	$	232,440
Income taxes	$	—	$	—	$	—

Disclosure of non-cash investing and financing activities:

Year Ended July 31, 2010
Issuance of common stock in satisfaction of accounts payable and accrued expenses	$	3,012,595
Par value of common stock issued in conjunction with cashless exercise of warrants	$	7,636

Year Ended July 31, 2009
Issuance of common stock as repayment of convertible debentures	$	16,112,399
Par value of common stock issued in conjunction with cashless exercise of warrants	$	9,909
Purchase of property and equipment through the issuance of obligations under capital lease	$	83,002
Issuance of common stock as satisfaction of accounts payable and accrued expenses	$	438,697

Year Ended July 31, 2008
Issuance of common stock as satisfaction of accrued executive compensation	$	471,875
Deferred debt issuance costs deducted from the proceeds of convertible notes	$	200,000
Value of warrants issued in conjunction with issuance of convertible debentures and related beneficial conversion feature	$	19,415,164

Note 18 - Segment Information:

The Company follows FASB ASC Topic 815 which establishes standards for the way that public business enterprises report information about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in interim financial reports. This Topic also establishes standards for related disclosures about products and services, geographic areas, and major customers.

This Topic uses a management approach for determining segments. The management approach designates the internal organization that is used by management for making operating decisions and assessing performance as the source of the Company’s reportable segments. The Company’s management reporting structure provides for only one segment: the research, development and commercialization of drug delivery systems and technologies for metabolic and immunological diseases.

The regions and countries in which the Company had identifiable assets and revenues are presented in the following table. Identifiable assets are those that can be directly associated with a geographic area.

	2010		2009		2008
Identifiable Assets

Canada	$	20,966,421	$	21,491,898	$	34,529,104
United States		3,154,963		3,321,859		3,618,779
Middle East, North Africa (MENA)		453,616		—		—
Total	$	24,575,000	$	24,813,757	$	38,147,883

Revenue

Canada	$	95,252	$	49,337	$	6,198
United States		430,516		605,238		118,693
Middle East, North Africa (MENA)		646,843		463,934		—
Total	$	1,172,611	$	1,118,509	$	124,891

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 19 - Collaborative Agreements:

The Company has a research and development agreement with Fertin Pharma A/S whereby the parties have established collaboration for the development of a metformin medicinal chewing gum for the treatment of Type-2 diabetes mellitus and obesity (see Note 9).

Note 20 – Quarterly Information (Unaudited):

The following schedule sets forth certain unaudited financial data for the preceding eight quarters ending July 31, 2010 (as restated for the quarters ending October 31, 2009 and January 31, 2010). In our opinion, the unaudited information set forth below has been prepared on the same basis as the audited information and includes all adjustments necessary to present fairly the information set forth herein. The operating results for the quarter are not indicative of results for any future period.

	Q1			Q2			Q3			Q4
Fiscal Year July 31, 2010:
Revenues, net	$	97,542		$	431,344		$	327,698		$	316,027
Operating Loss	$	(8,181,433	)	$	(7,339,090	)	$	(7,361,288	)	$	6,548,006	)
Net Loss	$	(5,142,385	)	$	(9,294,218	)	$	(4,567,550	)	$	(6,275,787	)
Net Loss available to common stockholders	$	(5,142,385	)	$	(9,294,218	)	$	(4,567,550	)	$	(6,275,787	)
Net Loss per share	$	(0.02	)	$	(0.04	)	$	(0.02	)	$	(0.02	)

Fiscal Year July 31, 2009:
Revenues, net	$	538,346		$	434,636		$	45,251		$	100,276
Operating Loss	$	(7,524,646	)	$	(5,807,232	)	$	(6,086,893	)	$	(6,837,389	)
Net Loss	$	(11,697,184	)	$	(12,038,440	)	$	(11,349,015	)	$	(10,727,589	)
Net Loss available to common stockholders	$	(11,697,184	)	$	(12,038,440	)	$	(11,349,015	)	$	(10,727,589	)
Net Loss per share	$	(0.10	)	$	(0.10	)	$	(0.08	)	$	(0.06	)

Note 21 - Subsequent Events:

On September 29, 2010, the Company terminated the employment of Anna Gluskin as Chief Executive Officer and President and relieved her of the position of Chairman of the board. Ms. Gluskin’s employment had been governed by terms which are described in Note 9 - Commitments and Contingent Liabilities.

On October 8, 2010, the Company entered into a purchase agreement with Global Medical Direct, LLC, a Kansas limited liability company (“GMD”), and all of the members of GMD, pursuant to which Generex will acquire fifty-one percent (51%) of the issued and outstanding equity interests of GMD. Pursuant to the terms of the purchase agreement, Generex has agreed to pay to the members of GMD an aggregate amount of (i) $20,000,000 in cash and (ii) $5,000,000 payable in shares of restricted common stock of Generex, subject to the terms and conditions of the purchase agreement. The closing is subject to the satisfaction or waiver of certain conditions, including Generex having secured the acquisition financing, the parties agreeing upon the amended terms of an operating agreement for GMD, the parties entering into a registration rights agreement with respect to the registration of the shares of Generex common stock issued as consideration and other customary closing conditions. The purchase agreement contains certain termination rights of the parties, including the right of any party to terminate the purchase agreement if the parties cannot reach agreement on employment and consulting agreements and the amendment of the operating agreement of GMD and if the closing has not occurred by January 31, 2011 or such later date as the parties may agree upon. The transaction is expected to close in January 2011.

The Company has evaluated subsequent events occurring after the balance sheet date through the date the consolidated financial statements were issued.

Item 9.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

On July 28, 2008, we received notice of the merger of Danziger Hochman Partners LLP (“Danziger”), our independent registered public accountants, with MSCM LLP ("MSCM"), to be effective as of August 1, 2008. The merger of Danziger and MSCM did not close until the week of September 15, 2008. On September 5, 2008, the Audit Committee of our Board of Directors received an engagement letter from MSCM and approved the engagement of MSCM as Danziger’s successor to continue as our independent registered public accountant for the fiscal year ending July 31, 2008.

The reports of Danziger on our financial statements for the fiscal years ended July 31, 2007 and 2006 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles.

During our fiscal years ended July 31, 2008 and 2007 and the subsequent interim period through September 5, 2008, the date on which our Audit Committee approved the engagement of MSCM and Danziger ceased being our auditors, there were no disagreements between us and Danziger on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Danziger, would have caused Danziger to make reference to the subject matter of the disagreements in connection with its audit reports on our financial statements. During our past fiscal years ended July 31, 2009 and 2008 Danziger did not advise us of any of the matters specified in Item 304(a)(1)(v) of Regulation S-K.

We requested that Danziger deliver to us a letter addressed to the Securities and Exchange Commission stating whether Danziger agreed with the disclosures made by us in response to Item 304(a) of Regulation S-K, and if not, stating the respects in which it did not agree. Danziger's letter was filed as Exhibit 16 to our Current Report on Form 8-K/A filed with the SEC on September 19, 2008.

During our fiscal years ended July 31, 2010, 2009 and 2008, we had no consultations with MSCM regarding (a) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our consolidated financial statements as to which we received a written report or oral advice that was an important factor in reaching a decision on any accounting, auditing or financial reporting issue; (b) any matter that was the subject of a disagreement, as defined in Item 304(a)(1)(iv) of Regulation S-K, or (c) any matter that was the subject of a reportable event, as defined in Item 304(a)(1)(v) of Regulation S-K.

Item 9A - Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Prior to the filing of this Report on Form 10-K, an evaluation was performed under the supervision of and with the participation of the Company’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the Company’s disclosure controls and procedures. Based on the evaluation, the CEO and CFO have concluded that, as of July 31, 2010, the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to the Company’s management, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the fiscal quarter ended July 31, 2010, there were no changes in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of Generex Biotechnology Corporation (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that:

(i)

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(ii)

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

(iii)

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of July 31, 2010. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on management’s assessment using those criteria, management has concluded that the Company’s internal control over financial reporting was effective as of July 31, 2010. The Company’s independent registered public accounting firm, MSCM LLP, has issued an attestation report on the effectiveness of the Company’s internal control over financial reporting. This report is set forth below.

To the Board of Directors and Stockholders of

Generex Biotechnology Corporation

(A Development Stage Company)

We have audited Generex Biotechnology Corporation’s internal control over financial reporting as of July 31, 2010, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Generex Biotechnology Corporation’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Managements’ Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Generex Biotechnology Corporation maintained, in all material respects, effective internal control over financial reporting as of July 31, 2010, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the balance sheets and the related statements of income, stockholders’ equity and comprehensive income, and cash flows of Generex Biotechnology Corporation, and our report dated October 14, 2010 expressed an unqualified opinion.

/s/ MSCM LLP

MSCM LLP

Toronto, Canada

October 14, 2010

Item 9B.

Other Information.

Reference is made to the disclosure set forth under the caption Sales of Unregistered Securities in Item 5 of this Annual Report on Form 10-K, which is incorporated by reference herein.

PART III

Item 10.

Directors, Executive Officers and Corporate Governance.

The information required by this Item is incorporated by reference from the Proxy Statement, or an amendment to this Annual Report on Form 10-K, to be filed with the Commission not later than 120 days after the end of the fiscal year to which this report relates.

Information with respect to Executive Officers of the Company appears in Part I of this Annual Report on Form 10-K.

Generex has adopted a code of ethics that applies to its directors and the following executive officers: the President, Chief Executive Officer, Chief Financial Officer (principal financial/accounting officer), Chief Operating Officer, any Vice-President, Controller, Secretary, Treasurer and any other personnel performing similar functions. We also expect any consultants or advisors whom we retain to abide by this code of ethics. The Generex Code of Ethics has been posted on Generex's Internet web site - www.generex.com.

Item 11.

Executive Compensation.

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13.

Certain Relationships and Related Transactions, and Director Independence.

Item 14.

Principal Accounting Fees and Services.

PART IV

Item. 15

Exhibits and Financial Statements and Schedules.

1.	Financial Statements - See Part II - Item 8. Financial Statements and Supplementary Data hereof on page 44.

The financial statements include the following:

Consolidated Balance Sheets as of July 31, 2010 and 2009

Consolidated Statements of Operations for the Years Ended July 31, 2010, 2009 and 2008 and cumulative from Inception to July 31, 2010

Consolidated Statements of Changes in Stockholders’ Equity For the Period November 2, 1995 (Date of Inception) to July 31, 2010

Consolidated Statements of Cash Flows For the Years Ended July 31, 2010, 2009 and 2008 and Cumulative From Inception to July 31, 2010

2.	Financial Statement Schedule and Auditor’s Report

Schedule I - Condensed financial information of registrant

This schedule is not applicable.

Schedule II - Valuation and qualifying accounts

	Balance at Beginning Of Period		Additions Charged To Expenses	Other Additions		Deductions	Balance at End of Period
Year Ended July 31, 2009 Valuation Allowance on Deferred Tax Asset	$	68,133,445	-		-	8,140,246		76,273,691

Year Ended July 31, 2010 Valuation Allowance on Deferred Tax Asset	$	76,273,691	-		-	8,689,437		84,966,128

The auditors’ report of MSCM LLP with respect to the Financial Statement Schedule information for the years ended July 31, 2010 is included with its report on our financial statements located at page 45.

Exhibits

Exhibits are incorporated herein by reference or are filed with this Annual Report as set forth in the Exhibit Index beginning on page 103 hereof.

All other schedules and exhibits are omitted because they are not applicable, not required, or because the information required has been given as part of this report.

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized this 14 day of October 2010.

GENEREX BIOTECHNOLOGY CORPORATION

By:	/s/ Mark A. Fletcher
	Name: Mark A. Fletcher
	Title: Interim President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Name	Capacity in Which Signed	Date

/s/ Mark A. Fletcher	Interim President and Chief Executive Officer and General	October 14, 2010
Mark A. Fletcher	Counsel and Secretary (Principal Executive Officer)

/s/ Rose C. Perri	Chief Operating Officer, Chief Financial, Officer, Treasurer,	October 14, 2010
Rose C. Perri	Director (Principal Financial and Accounting Officer)

/s/ Brian T. McGee	Director	October 14, 2010
Brian T. McGee

/s/ John P. Barratt	Director	October 14, 2010
John P. Barratt

/s/ Nola E. Masterson	Director	October 14, 2010
Nola E. Masterson

/s/ Stephen Fellows	VP, Finance	October 14, 2010
Stephen Fellows

EXHIBIT INDEX

Exhibit Number		Description of Exhibit(1)

1.1		Placement Agency Agreement, dated May 5, 2009, by and between Generex Biotechnology Corporation and Rodman & Renshaw (incorporated by reference to Exhibit 1.1 to Generex Biotechnology Corporation’s Current Report on Form 8-K filed on May 18, 2009)

1.2		Placement Agency Agreement, dated June 8, 2009, by and between Generex Biotechnology Corporation and Midtown Partners & Co., LLC and amendments dated August 5, August 18, and September 11, 2009 (incorporated by reference to Exhibit 1.1 to Generex Biotechnology Corporation’s Current Report on Form 8-K filed on September 15, 2009)

1.3		Amendment dated as of April 7, 2010 to Placement Agent Agreement attached as Exhibit 1.2 hereto (incorporated by reference .reference to Exhibit 1.2 to Generex Biotechnology Corporation’s Current Report on Form 8-K filed on April 8, 2010)

1.4		Placement Agency Agreement dated September 11, 2009, by and between Generex Biotechnology Corporation and Maxim Group LLC. (incorporated by reference to Exhibit 1.2 to Generex Biotechnology Corporation’s Current Report on Form 8-K filed on September 15, 2009)

2		Agreement and Plan of Merger among Generex Biotechnology Corporation, Antigen Express, Inc. and AGEXP Acquisition Inc. (incorporated by reference to Exhibit 2.1 to Generex Biotechnology Corporation’s Current Report on Form 8-K filed on August 15, 2003)

3(i)		Restated Certificate of Incorporation of Generex Biotechnology Corporation (incorporated by reference to Exhibit 4.1 to Generex Biotechnology Corporation’s Post-Effective Amendment No. 1 to the Registration Statement on Form S-8 filed on October 26, 2009)

3(ii)		Amended and Restated By-Laws of Generex Biotechnology Corporation (incorporated by reference to Exhibit 3.2(ii) to Generex Biotechnology Corporation’s Report on Form 8-K filed December 5, 2007)

4.1		Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to Generex Biotechnology Corporation’s Registration Statement on Form S-1 (File No. 333-82667) filed on July 12, 1999)

4.2.1		Form of Securities Purchase Agreement entered into with Cranshire Capital, L.P.; Gryphon Partners, L.P.; Langley Partners, L.P.; Lakeshore Capital, Ltd.; LH Financial; Omicron Capital; Photon Fund, Ltd.; Howard Todd Horberg and Vertical Ventures, LLC dated May 29, 2003 (incorporated by reference to Exhibit 4.1 to Generex Biotechnology Corporation’s Report on Form 10-Q/A for the quarter ended April 30, 2003 filed on August 13, 2003)

4.2.2		Form of Registration Rights Agreement entered into with Cranshire Capital, L.P.; Gryphon Partners, L.P.; Langley Partners, L.P.; Lakeshore Capital, Ltd.; LH Financial; Omicron Capital; Photon Fund, Ltd.; Howard Todd Horberg and Vertical Ventures, LLC dated May 29, 2003 (incorporated by reference to Exhibit 4.2 to Generex Biotechnology Corporation’s Report on Form 10-Q/A for the quarter ended April 30, 2003 filed on August 13, 2003)

4.2.3		Form of Warrant granted to Cranshire Capital, L.P.; Gryphon Partners, L.P.; Langley Partners, L.P.; Lakeshore Capital, Ltd.; LH Financial; Omicron Capital; Photon Fund, Ltd.; Howard Todd Horberg and Vertical Ventures, LLC dated May 29, 2003 (incorporated by reference to Exhibit 4.3 to Generex Biotechnology Corporation’s Report on Form 10-Q/A for the quarter ended April 30, 2003 filed on August 13, 2003)

4.3		Form of replacement Warrant issued to warrant holders exercising at reduced exercise price in May and June 2003 (incorporated by reference to Exhibit 4.13.7 to Generex Biotechnology Corporation’s Report on Form 10-K for the period ended July 31, 2003 filed on October 29, 2003)

4.4.1		Securities Purchase Agreement, dated December 19, 2003, by and among Generex Biotechnology Corporation and the investors named therein (incorporated by reference to Exhibit 4.1 to Generex Biotechnology Corporation’s Report on Form 8-K/A filed on March 24, 2004)

4.4.2		Registration Rights Agreement, dated December 19, 2003, by and among Generex Biotechnology Corporation and the investors named therein (incorporated by reference to Exhibit 4.2 to Generex Biotechnology Corporation’s Report on Form 8-K/A filed on March 24, 2004)

4.4.3		Form of Warrant issued in connection with Exhibit 4.4.1 (incorporated by reference to Exhibit 4.3 to Generex Biotechnology Corporation’s Report on Form 8-K/A filed on March 24, 2004)

4.4.4		Form of Additional Investment Right issued in connection with Exhibit 4.4.1 (incorporated by reference to Exhibit 4.4 to Generex Biotechnology Corporation’s Report on Form 8-K/A filed on March 24, 2004)

4.5.1		Securities Purchase Agreement, dated January 7, 2004, by and between Generex Biotechnology Corporation and ICN Capital Limited (incorporated by reference to Exhibit 4.1 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 1, 2004)

4.5.2		Registration Rights Agreement, dated January 7, 2004, by and between Generex Biotechnology Corporation and ICN Capital Limited (incorporated by reference to Exhibit 4.2 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 1, 2004)

4.5.3		Warrant issued in connection with Exhibit 4.5.1 (incorporated by reference to Exhibit 4.3 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 1, 2004)

4.5.4		Additional Investment Right issued in connection with Exhibit 4.5.1 (incorporated by reference to Exhibit 4.4 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 1, 2004)

4.6.1		Securities Purchase Agreement, dated January 9, 2004, by and between Generex Biotechnology Corporation and Vertical Ventures, LLC (incorporated by reference to Exhibit 4.5 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 1, 2004)

4.6.2		Registration Rights Agreement, dated January 9, 2004, by and between Generex Biotechnology Corporation and Vertical Ventures, LLC (incorporated by reference to Exhibit 4.6 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 1, 2004)

4.6.3		Warrant issued in connection with Exhibit 4.6.1 (incorporated by reference to Exhibit 4.7 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 1, 2004)

4.6.4		Additional Investment Right issued in connection with Exhibit 4.6.1 (incorporated by reference to Exhibit 4.8 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 1, 2004)

4.7.1		Securities Purchase Agreement, dated February 6, 2004, by and between Generex Biotechnology Corporation and Alexandra Global Master Fund, Ltd. (incorporated by reference to Exhibit 4.9 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 1, 2004)

4.7.2		Registration Rights Agreement, dated February 6, 2004, by and between Generex Biotechnology Corporation and Alexandra Global Master Fund, Ltd. (incorporated by reference to Exhibit 4.10 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 1, 2004)

4.7.3		Warrant issued in connection with Exhibit 4.7.1 (incorporated by reference to Exhibit 4.11 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 1, 2004)

4.7.4		Additional Investment Right issued in connection with Exhibit 4.7.1 (incorporated by reference to Exhibit 4.12 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 1, 2004)

4.7.5		Escrow Agreement, dated February 26, 2004, by and among Generex Biotechnology Corporation, Eckert Seamans Cherin & Mellott, LLC and Alexandra Global Master Fund, Ltd. (incorporated by reference to Exhibit 4.13 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 1, 2004)

4.8.1		Securities Purchase Agreement, dated February 11, 2004, by and between Generex Biotechnology Corporation and Michael Sourlis (incorporated by reference to Exhibit 4.14 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 1, 2004)

4.8.2		Registration Rights Agreement, dated February 11, 2004, by and between Generex Biotechnology Corporation and Michael Sourlis (incorporated by reference to Exhibit 4.15 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 1, 2004)

4.8.3		Additional Investment Right issued in connection with Exhibit 4.8.1 (incorporated by reference to Exhibit 4.17 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 1, 2004)

4.9.1		Securities Purchase Agreement, dated February 13, 2004, by and between Generex Biotechnology Corporation and Zapfe Holdings, Inc. (incorporated by reference to Exhibit 4.18 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 1, 2004)

4.9.2		Registration Rights Agreement, dated February 13, 2004, by and between Generex Biotechnology Corporation and Zapfe Holdings, Inc. (incorporated by reference to Exhibit 4.19 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 1, 2004)

4.9.3		Warrant issued in connection with Exhibit 4.9.1 (incorporated by reference to Exhibit 4.20 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 1, 2004)

4.9.4		Additional Investment Right issued in connection with Exhibit 4.9.1 (incorporated by reference to Exhibit 4.21 Generex Biotechnology Corporation’s Report on Form 8-K filed on March 1, 2004)

4.10.1		Securities Purchase Agreement, dated June 23, 2004, by and among Generex Biotechnology Corporation and the investors named therein (incorporated by reference to Exhibit 4.1 to Generex Biotechnology Corporation’s Report on Form 8-K filed on July 14, 2004)

4.10.2		Registration Rights Agreement, dated June 23, 2004, by and among Generex Biotechnology Corporation and the investors (incorporated by reference to Exhibit 4.2 to Generex Biotechnology Corporation’s Report on Form 8-K filed on July 14, 2004)

4.10.3		Form of Warrant issued in connection with Exhibit 4.10.1 (incorporated by reference to Exhibit 4.3 to Generex Biotechnology Corporation’s Report on Form 8-K filed on July 14, 2004)

4.10.4		Form of Additional Investment Right issued in connection Exhibit 4.10.1 (incorporated by reference to Exhibit 4.4 to Generex Biotechnology Corporation’s Report on Form 8-K filed on July 14, 2004)

4.11.1		Securities Purchase Agreement, dated November 10, 2004, by and among Generex Biotechnology Corporation and the investors named therein (incorporated by reference to Exhibit 4.1 to Generex Biotechnology Corporation’s Report on Form 8-K filed on November 12, 2004)

4.11.2		Form of 6% Secured Convertible Debenture issued in connection with Exhibit 4.11.1 (incorporated by reference to Exhibit 4.2 to Generex Biotechnology Corporation’s Report on Form 8-K filed on November 12, 2004)

4.11.3		Registration Rights Agreement, dated November 10, 2004, by and among Generex Biotechnology Corporation and the investors named therein (incorporated by reference to Exhibit 4.3 to Generex Biotechnology Corporation’s Report on Form 8-K filed on November 12, 2004)

4.11.4		Form of Voting Agreement entered into in connection with Exhibit 4.11.1 (incorporated by reference to Exhibit 4.7 to Generex Biotechnology Corporation’s Report on Form 8-K filed on November 12, 2004)

4.12		Warrant issued to The Aethena Group, LLC on April 28, 2005 (incorporated by reference to Exhibit 4.20 to Generex Biotechnology Corporation’s Quarterly Report on Form 10-Q filed on June 14, 2005)

4.13.1		Amendment No. 4 to Securities Purchase Agreement and Registration Rights Agreement entered into by and between Generex Biotechnology Corporation and the Purchasers listed on the signature pages thereto on January 19, 2006 (incorporated by reference herein to Exhibit 4.1 to Generex Biotechnology Corporation’s Report on Form 8-K filed on January 20, 2006)

4.13.2		Form of Additional AIRs issued in connection with Exhibit 4.13.1 (incorporated by reference herein to Exhibit 4.4 to Generex Biotechnology Corporation’s Report on Form 8-K filed on January 20, 2006)

4.14		Form of Warrant issued by Generex Biotechnology Corporation on January 23, 2006 (incorporated by reference to Exhibit 4.2 to Generex Biotechnology Corporation’s Report on Form 8-K filed on January 24, 2006)

4.15.1		Agreement to Amend Warrants between Generex Biotechnology Corporation and Cranshire Capital L.P. dated February 27, 2006 (incorporated by reference to Exhibit 4.1 to Generex Biotechnology Corporation’s Report on Form 8-K filed on February 28, 2006).

4.15.2		Agreement to Amend Warrants between Generex Biotechnology Corporation and Omicron Master Trust dated February 27, 2006 (incorporated by reference to Exhibit 4.2 to Generex Biotechnology Corporation’s Report on Form 8-K filed on February 28, 2006)

4.15.3		Agreement to Amend Warrants between Generex Biotechnology Corporation and Iroquois Capital L.P. dated February 27, 2006 (incorporated by reference to Exhibit 4.3 to Generex Biotechnology Corporation’s Report on Form 8-K filed on February 28, 2006)

4.15.4		Agreement to Amend Warrants between Generex Biotechnology Corporation and Smithfield Fiduciary LLC dated February 27, 2006 (incorporated by reference to Exhibit 4.4 to Generex Biotechnology Corporation’s Report on Form 8-K filed on February 28, 2006)

4.15.5		Form of Warrant issued by Generex Biotechnology Corporation on February 27, 2006 (incorporated by reference to Exhibit 4.26 to Generex Biotechnology Corporation’s Report on Form 10-K filed on October 16, 2006)

4.16.1		Agreement to Amend Additional Investment Right between Generex Biotechnology Corporation and Cranshire Capital, L.P. dated February 28, 2006 (incorporated by reference to Exhibit 4.1 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 1, 2006)

4.16.2		Agreement to Amend Additional Investment Right between Generex Biotechnology Corporation and Omicron Master Trust dated February 28, 2006 (incorporated by reference to Exhibit 4.2 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 1, 2006)

4.16.3		Agreement to Amend Additional Investment Right between Generex Biotechnology Corporation and Iroquois Capital LP dated February 28, 2006 (incorporated by reference to Exhibit 4.3 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 1, 2006)

4.16.4		Agreement to Amend Additional Investment Right between Generex Biotechnology Corporation and Smithfield Fiduciary LLC dated February 28, 2006 (incorporated by reference to Exhibit 4.4 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 1, 2006)

4.16.5		Form of Additional AIR Debenture issued by Generex Biotechnology Corporation on February 28, 2006 (incorporated by reference to Exhibit 4.31 to Generex Biotechnology Corporation’s Report on Form 10-K filed on October 16, 2006)

4.16.6		Form of Additional AIR Warrant issued by Generex Biotechnology Corporation on February 28, 2006 (incorporated by reference to Exhibit 4.32 to Generex Biotechnology Corporation’s Report on Form 10-K filed on October 16, 2006)

4.17.1		Form of Agreement to Amend Warrants between Generex Biotechnology Corporation and the Investors dated March 6, 2006 (incorporated by reference to Exhibit 4.1 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 7, 2006)

4.17.2		Form of Warrant issued by Generex Biotechnology Corporation on March 6, 2006 (incorporated by reference to Exhibit 4.2 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 7, 2006)

4.18		Warrant issued by Generex Biotechnology Corporation on April 17, 2006 to Zapfe Holdings, Inc. (incorporated by reference to Exhibit 4.33 to Generex Biotechnology Corporation’s Report on Form 10-Q filed on June 14, 2006)

4.19		Form of Warrant issued by Generex Biotechnology Corporation on April 17, 2006 to certain employees (incorporated by reference to Exhibit 4.34 to Generex Biotechnology Corporation’s Report on Form 10-Q filed on June 14, 2006)

4.20.1		Securities Purchase Agreement entered into by and between Generex Biotechnology Corporation and four Investors on June 1, 2006 (incorporated by reference to Exhibit 4.1 to Generex Biotechnology Corporation’s Report on Form 8-K filed on June 2, 2006)

4.20.2		Form of Warrant issued by Generex Biotechnology Corporation on June 1, 2006 (incorporated by reference to Exhibit 4.2 to Generex Biotechnology Corporation’s Report on Form 8-K filed on June 2, 2006)

4.21.1		Form of Amendment to Outstanding Warrants (incorporated by reference to Exhibit 4.3 to Generex Biotechnology Corporation’s Report on Form 8-K filed on June 2, 2006)

4.21.2		Form of Warrant issued by Generex Biotechnology Corporation on June 1, 2006 (incorporated by reference to Exhibit 4.4 to Generex Biotechnology Corporation’s Report on Form 8-K filed on June 2, 2006)

4.22.1		Securities Purchase Agreement, dated as of March 31, 2008 among the Registrant and each of the purchasers named therein (incorporated by reference to Exhibit 4.1 to Generex Biotechnology Corporation’s Report on Form 8-K filed on April 2, 2008)

4.22.2		Form of 8% Secured Convertible Note, as amended (incorporated by reference to Exhibit 4.2 to Generex Biotechnology Corporation’s Registration Statement (333-150562) on Form S-3 filed on April 30, 2008)

4.22.3		Form of Series A Warrant, as amended (incorporated by reference to Exhibit 4.3 to Generex Biotechnology Corporation’s Registration Statement on Form S-3 (333-150562) filed on April 30, 2008)

4.22.4		Form of Series A-1 Warrant, as amended (incorporated by reference to Exhibit 4.4 to Generex Biotechnology Corporation’s Registration Statement on Form S-3 (333-150562) filed on April 30, 2008)

4.22.5		Form of Series B Warrant, as amended (incorporated by reference to Exhibit 4.5 to Generex Biotechnology Corporation’s Registration Statement on Form S-3 (333-150562) filed on April 30, 2008)

4.22.6		Form of Series C Warrant, as amended (incorporated by reference to Exhibit 4.6 to Generex Biotechnology Corporation’s Registration Statement on Form S-3 (333-150562) filed on April 30, 2008)

4.22.7		Registration Rights Agreement, dated March 31, 2008, among Registrant and each of the purchasers under Securities Purchase Agreement (incorporated by reference to Exhibit 4.7 to Generex Biotechnology Corporation’s Report on Form 8-K filed on April 2, 2008)

4.22.8		Security Agreement (incorporated by reference to Exhibit 4.8 to Generex Biotechnology Corporation’s Report on Form 8-K filed on April 2, 2008)

4.22.9		Form of Guaranty (incorporated by reference to Exhibit 4.9 to Generex Biotechnology Corporation’s Report on Form 8-K filed on April 2, 2008)

4.23		Form of Securities Purchase Agreement, date May 15, 2009, entered into between Generex Biotechnology Corporation and each investor in the offering (incorporated by reference to Exhibit 1.2 to Generex Biotechnology Corporation’s Report on Form 8-K filed on May 18, 2009)

4.24.1		Form of Securities Purchase Agreement, dated June 15, 2009, entered into between Generex Biotechnology Corporation and each investor in the offering (incorporated by reference to Exhibit 10.1 to Generex Biotechnology Corporation’s Report on Form 8-K filed on June 16, 2009)

4.24.2		Form of Warrant issued in connection with Exhibit 4.24.1 (incorporated by reference to Exhibit 4.1 to Generex Biotechnology Corporation’s Report on Form 8-K filed on June 16, 2009)

4.24.3		Form of Warrant issued to Midtown Partners & Co., LLC in connection with Exhibit 4.24.1 (incorporated by reference to Exhibit 4.2 to Generex Biotechnology Corporation’s Report on Form 8-K filed on June 16, 2009)

4.25.1		Form of Securities Purchase Agreement, dated August 6, 2009, entered into between Generex Biotechnology Corporation and each investor in the offering (incorporated by reference to Exhibit 10.1 to Generex Biotechnology Corporation’s Report on Form 8-K filed on August 6, 2009)

4.25.2		Form of Warrant issued in connection with Exhibit 4.25.1 (incorporated by reference to Exhibit 4.1 to Generex Biotechnology Corporation’s Report on Form 8-K filed on August 6, 2009)

4.25.3		Form of Warrant issued to Midtown Partners & Co., LLC in connection with Exhibit 4.25.1 (incorporated by reference to Exhibit 4.28 to Generex Biotechnology Corporation’s Report on Form 8-K filed on August 6, 2009)

4.26.1		Form of Securities Purchase Agreement, dated September 11, 2009, entered into between Generex Biotechnology Corporation and each investor in the offering (incorporated by reference to Exhibit 10.1 to Generex Biotechnology Corporation’s Report on Form 8-K filed on September 15, 2009)

4.26.2		Form of Warrant issued in connection with Exhibit 4.26.1 (incorporated by reference to Exhibit 4.1 to Generex Biotechnology Corporation’s Report on Form 8-K filed on September 15, 2009)

4.26.3		Form of Warrant issued to Midtown Partners & Co., LLC and Maxim Group LLC in connection with Exhibit 4.26.1 (incorporated by reference to Exhibit 4.2 to Generex Biotechnology Corporation’s Report on Form 8-K filed on September 15, 2009)

4.27.1		Common Stock Purchase Agreement dated April 7, 2010 by and between Generex Biotechnology Corporation and Seaside 88, LP. (incorporated by reference to Exhibit 10.1 to Generex Biotechnology Corporation’s Report on Form 8-K filed on April 8, 2010)

4.27.2		First Amendment to Common Stock Purchase Agreement dated April 28, 2010 by and between Generex Biotechnology Corporation and Seaside 88, LP. (incorporated by reference to Exhibit 10.1 to Generex Biotechnology Corporation’s Report on Form 8-K filed on April 29, 2010)

4.27.3		Form of Warrant issued to Midtown Partners & Co., LLC in connection with Exhibit 4.27.1 hereto (incorporated by reference to Exhibit 4.1 to Generex Biotechnology Corporation’s Report on Form 8-K filed on April 8, 2010)

9		Form of Voting Agreement entered into in connection with Exhibit 4.11.1 (incorporated by reference to Exhibit 4.7 to Generex Biotechnology Corporation’s Report on Form 8-K filed on November 12, 2004)

10.1		Stock Option Agreement by and between Generex Biotechnology Corporation and Peter G. Amanatides to purchase 100,000 shares of Common Stock at the exercise price of $0.56 per share (incorporated by reference to Exhibit 10.3 to Generex Biotechnology Corporation’s Quarterly Report on Form 10-Q filed on June 14, 2005)*

10.2		Stock Option Agreement by and between Generex Biotechnology Corporation and John P. Barratt to purchase 100,000 shares of Common Stock at the exercise price of $0.56 per share (incorporated by reference to Exhibit 10.4 to Generex Biotechnology Corporation’s Quarterly Report on Form 10-Q filed on June 14, 2005)*

10.3		Stock Option Agreement by and between Generex Biotechnology Corporation and Brian T. McGee to purchase 100,000 shares of Common Stock at the exercise price of $0.56 per share (incorporated by reference to Exhibit 10.5 to Generex Biotechnology Corporation’s Quarterly Report on Form 10-Q filed on June 14, 2005)*

10.4		Stock Option Agreement by and between Generex Biotechnology Corporation and John P. Barratt to purchase 35,714 shares of Common Stock at the exercise price of $0.001 per share (incorporated by reference to Exhibit 10.6 to Generex Biotechnology Corporation’s Quarterly Report on Form 10-Q filed on June 14, 2005)*

10.5		Stock Option Agreement by and between Generex Biotechnology Corporation and Brian T. McGee to purchase 35,714 shares of Common Stock at the exercise price of $0.001 per share (incorporated by reference to Exhibit 10.7 to Generex Biotechnology Corporation’s Quarterly Report on Form 10-Q filed on June 14, 2005)*

10.6		Stock Option Agreement by and between Generex Biotechnology Corporation and Gerald Bernstein, M.D. to purchase 100,000 shares of Common Stock at the exercise price of $0.61 per share (incorporated by reference to Exhibit 10.8 to Generex Biotechnology Corporation’s Quarterly Report on Form 10-Q filed on June 14, 2005)*

10.7		Stock Option Agreement by and between Generex Biotechnology Corporation and Mark Fletcher to purchase 250,000 shares of Common Stock at the exercise price of $0.61 per share (incorporated by reference to Exhibit 10.9 to Generex Biotechnology Corporation’s Quarterly Report on Form 10-Q filed on June 14, 2005)*

10.8		Stock Option Agreement by and between Generex Biotechnology Corporation and Anna E. Gluskin to purchase 250,000 shares of Common Stock at the exercise price of $0.61 per share (incorporated by reference to Exhibit 10.10 to Generex Biotechnology Corporation’s Quarterly Report on Form 10-Q filed on June 14, 2005)*

10.9		Stock Option Agreement by and between Generex Biotechnology Corporation and Rose C. Perri to purchase 250,000 shares of Common Stock at the exercise price of $0.61 per share (incorporated by reference to Exhibit 10.11 to Generex Biotechnology Corporation’s Quarterly Report on Form 10-Q filed on June 14, 2005)*

10.10		Stock Option Agreement by and between Generex Biotechnology Corporation and Mark A. Fletcher to purchase 470,726 shares of Common Stock at the exercise price of $0.001 per share (incorporated by reference to Exhibit 10.12 to Generex Biotechnology Corporation’s Quarterly Report on Form 10-Q filed on June 14, 2005)*

10.11		Stock Option Agreement by and between Generex Biotechnology Corporation and Anna E. Gluskin to purchase 1,120,704 shares of Common Stock at the exercise price of $0.001 per share (incorporated by reference to Exhibit 10.13 to Generex Biotechnology Corporation’s Quarterly Report on Form 10-Q filed on June 14, 2005)*

100

10.12		Stock Option Agreement by and between Generex Biotechnology Corporation and Rose C. Perri to purchase 576,752 shares of Common Stock at the exercise price of $0.001 per share (incorporated by reference to Exhibit 10.14 to Generex Biotechnology Corporation’s Quarterly Report on Form 10-Q filed on June 14, 2005)*

10.13		Employment Agreement by and between Generex Biotechnology Corporation and Gerald Bernstein M.D. (incorporated by reference to Exhibit 10.16 to Generex Biotechnology Corporation’s Quarterly Report on Form 10-Q filed on June 14, 2005)*

10.14		1998 Stock Option Plan (incorporated by reference to Exhibit 4.3 to Generex Biotechnology Corporation’s Registration Statement on Form S-1 (File No. 333-82667) filed on July 12, 1999)*

10.15		2000 Stock Option Plan (incorporated by reference to Exhibit 4.3.2 to Generex Biotechnology Corporation’s Annual Report on Form 10-K filed on October 30, 2000)*

10.16		Amended 2001 Stock Option Plan (incorporated by reference to Exhibit 4.1 to Generex Biotechnology Corporation’s Quarterly Report on Form 10-Q filed on December 15, 2003)*

10.17		2006 Stock Plan (incorporated by reference to Annex A to Generex Biotechnology Corporation’s Proxy Statement for the Annual Meeting of Stockholders held on May 30, 2006)*

10.18		Stockholders Agreement among Generex Biotechnology Corporation and the former holders of capital stock of Antigen Express, Inc. (incorporated by reference to Exhibit 10.4 to Generex Biotechnology Corporation’s Annual Report on Form 10-K filed on October 29, 2003)

10.19		Form of Warrant issued by Generex Biotechnology Corporation on April 17, 2006 to certain employees (incorporated by reference to Exhibit 4.34 to Generex Biotechnology Corporation’s Report on Form 10-Q filed on June 14, 2006)*

10.20		Quotation for Contract Manufacturing of Oral-lyn™ entered into between Generex Biotechnology Corporation and Cardinal Health PTS, LLC on June 20, 2006 (subject to confidential treatment) (incorporated by reference to Exhibit 10.25 to Generex Biotechnology Corporation’s Report on Form 10-K/A filed on February 14, 2007)

10.21		Quotation Amendment for Contract Manufacturing of Oral-lyn™ entered into between Generex Biotechnology Corporation and Cardinal Health PTS, LLC on August 18, 2006 (subject to confidential treatment) (incorporated by reference to Exhibit 10.26 to Generex Biotechnology Corporation’s Report on Form 10-K filed on October 16, 2006)

10.22		Clinical Supply Agreement entered into between Generex Biotechnology Corporation and Cardinal Health PTS, LLC on September 6, 2006 (subject to confidential treatment) (incorporated by reference to Exhibit 10.27 to Generex Biotechnology Corporation’s Report on Form 10-K filed on October 16, 2006)

10.23		Form of Restricted Stock Agreement for awards to executive officers of Generex Biotechnology Corporation under the Generex Biotechnology Corporation 2006 Stock Plan (incorporated by reference to Exhibit 10.1 to Generex Biotechnology Corporation’s Report on Form 8-K filed on August 23, 2007)*

10.24		Summary of Annual Base Salaries of Executive Officers of Generex Biotechnology Corporation (incorporated by reference to Exhibit 10.2 to Generex Biotechnology Corporation’s Report on Form 8-K filed on August 23, 2007)*

10.25		Summary of Compensation of the Directors of Generex Biotechnology Corporation (incorporated by reference to Exhibit 10.27 to Generex Biotechnology Corporation’s Report on Form 10-K filed on October 15, 2007)*

10.26		Summary of Employment Terms for Anna Gluskin effective as of January 1, 2006 (incorporated by reference to Exhibit 10.28 to Generex Biotechnology Corporation’s Report on Form 10-K/A filed on November 28, 2007)*

10.27		Summary of Employment Terms for Rose Perri effective as of January 1, 2006 (incorporated by reference to Exhibit 10.29 to Generex Biotechnology Corporation’s Report on Form 10-K/A filed on November 28, 2007)*

10.28		Summary of Employment Terms for Mark A. Fletcher effective as of April 21, 2003 (incorporated by reference to Exhibit 10.30 to Generex Biotechnology Corporation’s Report on Form 10-K/A filed on November 28, 2007)*

10.29		Employment Agreement between Generex Biotechnology Corporation and Gerald Bernstein, M.D., effective as of April 1, 2002 (incorporated by reference to Exhibit 10.31 to Generex Biotechnology Corporation’s Report on Form 10-K/A filed on November 28, 2007)*

101

10.30		Form of Consent and Waiver Agreement entered into with Cranshire Cranshire Capital, L.P., Portside Growth and Opportunity Fund and, Smithfield Fiduciary LLC (incorporated by reference to Exhibit 10.1 to Generex Biotechnology Corporation’s Report on Form 8-K filed on August 1, 2008)

10.31		Form of Consent and Waiver Agreement entered into with Rockmore Investment Master Fund Ltd. (incorporated by reference to Exhibit 10.2 to Generex Biotechnology Corporation’s Report on Form 8-K filed on August 1, 2008)

10.32		Form of Consent and Waiver Agreement entered into with the Iroquois Funds (incorporated by reference to Exhibit 10.3 to Generex Biotechnology Corporation’s Report on Form 8-K filed on August 1, 2008)

10.33		Form of separate Agreements entered into with each of Cranshire Capital, L.P., Portside Growth and Opportunity Fund, Rockmore Investment Master Fund Ltd., Smithfield Fiduciary LLC and Iroquois Capital Opportunity Fund, LP on December 22, 2008 (incorporated by reference to Exhibit 10.1 to Generex Biotechnology Corporation’s Report on Form 8-K filed on December 23, 2008)

10.34		Form of Agreement entered into with Iroquois Master Fund Ltd. on December 22, 2008 (incorporated by reference to Exhibit 10.2 to Generex Biotechnology Corporation’s Report on Form 8-K filed on December 23, 2008)

10.35		Form of separate Letter Agreements dated as of February 13, 2009 and entered into by and between Generex Biotechnology Corporation and each of Cranshire Capital, L.P., Portside Growth and Opportunity Fund, Rockmore Investment Master Fund Ltd., Smithfield Fiduciary LLC, Iroquois Master Fund Ltd. and Iroquois Capital Opportunity Fund, LP. (incorporated by reference to Exhibit 10.1 to Generex Biotechnology Corporation’s Report on Form 8-K filed on February 17, 2009)

10.36		Form of Forbearance and Amendment Agreement dated as of February 27, 2009 and entered into by and between Generex Biotechnology Corporation and each of Cranshire Capital, L.P., Portside Growth and Opportunity Fund, Rockmore Investment Master Fund Ltd., Smithfield Fiduciary LLC, Iroquois Master Fund Ltd. and Iroquois Capital Opportunity Fund, LP. (incorporated by reference to Exhibit 10.1 to Generex Biotechnology Corporation’s Report on Form 8-K filed on March 2, 2009)

10.37		At Market Offering Issuance Agreement dated October 14, 2009 entered into between Generex Biotechnology Corporation and Wm Smith & Co, LLC (incorporated by reference to Exhibit 10.1 to Generex Biotechnology Corporation’s Report on Form 8-K filed on October 15, 2009)

10.38		Recombinant Human Insulin Active Ingredient Manufacturing and Supply Agreement entered into on December 7, 2009 by and between Generex Biotechnology Corporation and Sanofi-Aventis Deutschland GmbH (subject to confidential treatment) (incorporated by reference to Exhibit 10.2 to Generex Biotechnology Corporation’s Quarterly Report on Form 10-Q filed on December 11, 2009)

10.39		Summary of Compensation of the Directors of Generex Biotechnology Corporation effective May 27, 2008 (incorporated by reference to Exhibit 10.34 to Generex Biotechnology Corporation’s Annual Report on Form 10-K filed on October 10, 2008)*

10.40		Summary of Compensation Arrangements with Executive Officers and Directors as of March 8, 2010 (incorporated by reference to Exhibit 10.1 to Generex Biotechnology Corporation’s Quarterly Report on Form 10-Q filed on June 11, 2010)*

10.41		Incentive Stock Option Grant Agreement dated March 9, 2010 by and between Generex Biotechnology Corporation and Anna E. Gluskin (incorporated by reference to Exhibit 10.2 to Generex Biotechnology Corporation’s Quarterly Report on Form 10-Q filed on June 11, 2010)*

10.42		Incentive Stock Option Grant Agreement dated March 9, 2010 by and between Generex Biotechnology Corporation and Rose C. Perri (incorporated by reference to Exhibit 10.3 to Generex Biotechnology Corporation’s Quarterly Report on Form 10-Q filed on June 11, 2010)*

102

10.43		Incentive Stock Option Grant Agreement dated March 9, 2010 by and between Generex Biotechnology Corporation and Mark A. Fletcher (incorporated by reference to Exhibit 10.4 to Generex Biotechnology Corporation’s Quarterly Report on Form 10-Q filed on June 11, 2010)*

10.43		Nonqualified Stock Option Grant Agreement dated March 9, 2010 by and between Generex Biotechnology Corporation and Brian McGee (incorporated by reference to Exhibit 10.5 to Generex Biotechnology Corporation’s Quarterly Report on Form 10-Q filed on June 11, 2010)*

10.44		Nonqualified Stock Option Grant Agreement dated March 9, 2010 by and between Generex Biotechnology Corporation and John P. Barratt (incorporated by reference to Exhibit 10.6 to Generex Biotechnology Corporation’s Quarterly Report on Form 10-Q filed on June 11, 2010)*

10.45		Nonqualified Stock Option Grant Agreement dated March 9, 2010 by and between Generex Biotechnology Corporation and Nola Masterson (incorporated by reference to Exhibit 10.7 to Generex Biotechnology Corporation’s Quarterly Report on Form 10-Q filed on June 11, 2010)*

10.46		Amendment to the Employment Terms for Mark A. Fletcher, dated September 29, 2010*

10.47		Limited Liability Company Ownership Interest Purchase Agreement by and among Generex Biotechnology Corporation, Global Medical Direct, LLC and Joseph Corso, Jr., Robert S. Shea and Mark Franz (incorporated by reference to Exhibit 10.1 to Generex Biotechnology Corporation’s Report on Form 8-K filed on October 12, 2010)

16		Letter of Concurrence From Danziger Hochman Partners LLP, dated September 18, 2008 (incorporated by reference to Exhibit 16 to Generex Biotechnology Corporation’s Report on Form 8-K/A filed on September 19, 2008)

21		Subsidiaries of the Registrant

23		Consent of MSCM LLP, independent registered public accounting firm

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* Management contract or management compensatory plan or arrangement.

(1)	In the case of incorporation by reference to documents filed by the Registrant under the Exchange Act, the Registrant’s file number under the Exchange Act is 000-25169.

103

Delaware		98-0178636
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

33 Harbour Square, Suite 202, Toronto, Canada		M5J 2G2
(Address of principal executive offices)		(Zip Code)

Title of each class		Name of each exchange on which registered
Common Stock, $.001 par value per share		The NASDAQ Stock Market LLC

Large accelerated filer o		Accelerated filer þ
Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

		Page
Forward-Looking Statements

Part I
Item 1.	Business.	2
Item 1A.	Risk Factors.	19
Item 1B.	Unresolved Staff Comments.	25
Item 2.	Properties.	26
Item 3.	Legal Proceedings.	26
Item 4.	Executive Officers of the Registrant	27
		27

Part II
Item 5.	Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	29
Item 6.	Selected Financial Data.	31
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	32
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 8.	Financial Statements and Supplementary Data.	44
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	90
Item 9A.	Controls and Procedures.	90
Item 9B.	Other Information.	92

Part III
Item 10.	Directors, Executive Officers and Corporate Governance.	92
Item 11.	Executive Compensation.	92
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	92
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	92
Item 14.	Principal Accountant Fees and Services.	92

Part IV
Item 15.	Exhibits and Financial Statement Schedules.	92

Signatures		94

Name	Age	Position Held with Generex

Mark A. Fletcher	45	Interim President/Chief Executive Officer, General Counsel and Secretary

Rose C. Perri	43	Chief Operating Officer, Chief Financial Officer, Treasurer and Director

Gerald Bernstein, M.D.	77	Vice President, Medical Affairs