0001607062-19-000113.txt : 20190322 0001607062-19-000113.hdr.sgml : 20190322 20190322164022 ACCESSION NUMBER: 0001607062-19-000113 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20190107 ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20190322 DATE AS OF CHANGE: 20190322 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENEREX BIOTECHNOLOGY CORP CENTRAL INDEX KEY: 0001059784 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 820490211 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-25169 FILM NUMBER: 19700365 BUSINESS ADDRESS: STREET 1: 10102 USA TODAY WAY CITY: MIRAMAR STATE: FL ZIP: 33025 BUSINESS PHONE: 416-364-2551 MAIL ADDRESS: STREET 1: 10102 USA TODAY WAY CITY: MIRAMAR STATE: FL ZIP: 33025 8-K/A 1 gnbt031219form8ka.htm FORM 8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

Amendment # 1 to

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

Date of Report (Date of earliest event reported): January 11, 2019

GENEREX BIOTECHNOLOGY CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

000-29169

98-0178636

(State or other

jurisdiction of

Incorporation)

(Commission File

Number)

(I.R.S Employer

Identification No.)

10102 USA Today Way

Miramar, Florida

33025

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (416) 364-2551

4145 North Service Rd, Suite 200, Burlington, Ontario Canada L7L 6A3

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

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

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

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

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

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

Generex Biotechnology Corporation

Form 8-K/A

Amendment to Current Report on Form 8-K dated January 11, 2019

Explanatory Note

This Amendment No. 1 to Current Report on Form 8-K is being filed by Generex Biotechnology Corporation (“Generex”) for the purpose of amending and supplementing Item 9.01 of the Current Report on Form 8-K originally filed by Generex with the Securities and Exchange Commission (“SEC”) dated January 7, 2019, filed on January 11, 2019 (the “Original Form 8-K”) in connection with the consummation of Acquisition Agreement with the equity owners of Olaregen Therapeutix, Inc. (“Olaregen”) to acquire a majority of the equity interests in Olaregen.

As indicated in the Original Form 8-K, this Amendment No. 1 to Current Report on Form 8-K is being filed to provide the information required by Item 9.01(a) and (b) of Form 8-K and Rule 3-05(b) of Regulation S-X that was not previously filed with the Original Form 8-K, as permitted by the rules of the SEC.

(a)	Financial Statements of Business Acquired

	The audited financial statements of Olaregen Therapeutix Inc for the for the period of inception (April 24, 2018) to June 30, 2018 including the report of Friedman LLP, and accompanying notes thereto, are filed as Exhibit 99.1 to this Amendment No. 1.

	The unaudited financial statements of Olaregen Therapeutix Inc for the three (3) months ended September 30, 2018, and accompanying notes thereto, are filed as Exhibit 99.2 to this Amendment No. 1.

(b)	Pro Forma Financial Information

	Unaudited pro forma combined balance sheets for the period ended October 31, 2018 and unaudited pro forma statement of operations for the year ended July 31, 2018 and the three (3) months ended October 31, 2018, and accompanying notes thereto, are filed as Exhibit 99.3 to this Amendment No. 1

(d)	Exhibits

Item No		Description
10.1		Stock Purchase Agreement between Olaregen Therapeutix Inc and Generex Biotechnology Corporation as of January 7, 2019.*
10.2		Promissory Note issued by Generex Biotechnology Corporation to Olaregen.*
10.3		Pledge and Security Agreement between Generex Biotechnology Corporation and Olaregen*
10.4		Amended and Restated Investor Rights Agreement of Olaregen.*
23.1		Consent of Friedman LLP
99.1		Audited financial statements of Olaregen Therapeutix, Inc. for the period of inception (April 24, 2018) to June 30, 2018, including the report of Friedman LLP on such audited financial statements.
99.2		Unaudited financial statements of Olaregen Therapeutix, Inc. for the three (3) months ended September 30, 2018.
99.3		Unaudited pro forma combined balance sheets for the period ended October 31, 2018 and unaudited pro forma statement of operations for the year ended July 31, 2018 and the three (3) months ended October 31, 2018.

_________

* Previously filed with the Original Reports.

SIGNATURES

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

	GENEREX BIOTECHNOLOGY CORPORATION.

Date: March 22, 2019	/s/ Joseph Moscato
	Joseph Moscato
	President and Chief Executive Officer

EX-23.1 2 ex23_1.htm EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the inclusion in this Form 8-K/A of Generex Biotechnology Corporation dated March 22, 2019, our report dated January 30, 2019, with respect to the financial statements of Olaregen Therapeutix Inc.

/s/ Friedman LLP

Marlton, NJ

March 22, 2019

EX-99.1 3 ex99_1.htm EXHIBIT 99.1

Financial Statements

OLAREGEN THERAPEUTIX INC.

Period from inception (April 24, 2018) to June 30, 2018

Report of Independent Registered Public Accounting Firm

OLAREGEN THERAPEUTIX INC

Table of Content

Report of Independent Registered Public Accounting Firm	3
Financial Statements
Balance Sheet as of June 30, 2018	4
Statement of Operations for the period from inception (April 24,2018) to June 30, 2018	5
Statement of Changes in Stockholders’ Equity for the period from inception (April 24,2018) to June 30, 2018	6
Statement of Cash Flows for the period from inception (April 24,2018) to June 30, 2018	7
Notes to Financial Statements	8

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Olaregen Therapeutix Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheet of Olaregen Therapeutix Inc. (the “Company”) as of June 30, 2018, and the related statements of operations, changes in stockholders’ equity, and cash flows for the period from inception (April 24, 2018) to June 30, 2018, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2018, and the results of its operations and its cash flows for the period from inception (April 24, 2018) to June 30, 2018, in conformity with accounting principles generally accepted in the United States of America.

Basis of Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provide a reasonable basis for our opinion.

/s/ Friedman LLP

We have served as the Company’s auditor since 2018

Marlton, New Jersey

January 30, 2019

OLAREGEN THERAPEUTIX INC
Balance Sheet
As of June 30, 2018

ASSETS
Intangible assets, net	$	225,000
TOTAL ASSETS	$	225,000

LIABILITIES & STOCKHOLDERS’ EQUITY
Current Liabilities
Accrued expense - Related Party	$	1,200
Total Current Liabilities		1,200
Commitments and contingencies
Stockholders’ Equity
Preferred Stock; $0.001 par value, 2,000,000 shares authorized;
Convertible Series A Preferred Stock: 800,000 shares Authorized, None issued or outstanding		—
Common Stock: $0.001 Par value, 10,000,000 shares authorized; 2,134,808 shares issued and outstanding		2,135
Stock subscription receivable		(1,235	)
Additional paid-in capital		224,100
Accumulated deficit		(1,200	)
Total Stockholders’ Equity		223,800
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY	$	225,000

See accompanying notes to financial statements

OLAREGEN THERAPEUTIX INC
Statement of Operations
For the period from inception (April 24, 2018) to June 30, 2018

Revenue	$	—
Expense		1,200
Net Loss before Income Taxes		(1,200	)
Income Tax		—
Net loss	$	(1,200	)

See accompanying notes to financial statements

OLAREGEN THERAPEUTIX INC.
Statement of Changes in Stockholders’ Equity
For the period from inception (April 24, 2018) to June 30, 2018

	Common
	Shares		Amount		Additional Paid-in Capital		Stock Subscription Receivable			Accumulated Deficit			Total
Beginning Balance, April 24, 2018 (Inception)		—	$	—	$	—	$	—		$	—		$	—
Common stock issued to founders		1,234,808		1,235		—		(1,235	)		—			—
Common stock Issued to purchase IP rights		900,000		900		224,100		—			—			225,000
Net loss		—		—		—		—			(1,200	)		(1,200	)
Ending Balance, June 30, 2018		2,134,808	$	2,135	$	224,100	$	(1,235	)	$	(1,200	)	$	223,800

See accompanying notes to financial statements

OLAREGEN THERAPEUTIX INC.
Statement of Cash Flows
For the period from inception (April 24, 2018) to June 30, 2018

Cash flows from operating activities:
Net Loss	$	(1,200	)
Adjustments to reconcile net loss to net cash used in operating activities:
Changes in operating assets and liabilities
Accrued expenses		1,200
Net cash used in operating activities		—

Cash and cash equivalents
Beginning of period		—
Ending of period	$	—

Supplemental cash flow disclosures
Non-cash investing and financing activities
The Company issued 900,000 shares for purchase of the rights to the Excellagen Intellectual Property value at $225,000
The Company issued 1,234,808 common shares to its founders for $1,235
The Company is owed $1,235 from the founders.

See accompanying notes to financial statements

OLAREGEN THERAPEUTIX INC

NOTES TO FINANCIAL STATEMENTS

From April 24, 2018 (inception) to June 30, 2018

1. NATURE OF OPERATIONS AND LIQUIDITY

Nature of Operations

Olaregen Therapeutix, Inc. (the “Company” or “Olaregen”) is a development stage company incorporated on April 24, 2018 under the laws of Delaware. The Company is a regenerative medicine company focused on the development, manufacturing and commercialization of products that fill unmet needs in the current wound care market. The Company aims to provide advanced healing solutions that substantially improve medical outcomes while lowering the overall cost of care. Olaregen's first product introduction, Excellagen is a topically applied product for dermal wounds and other indications. The Company is focused on advancing wound care including diabetic foot ulcers (DFU), venous leg ulcers and pressure ulcers.

Liquidity

The Company has not yet generated any revenue from the sale of products. The Company efforts have been principally devoted to identifying and acquiring the Intellectual Property, related to Excellagen. The Company has reported a net loss of $1,200 and cash flows from operating activities of $0 for the period from April 24, 2018 (inception) to June 30, 2018. Management believes that the Company has the required cash to continue as a going concern because subsequent to June 30, 2018, the Company raised approximately $1.3 million from the sale of Common stock and Convertible Preferred stock (see Note 9). In additional (as noted in Note 9) the Company received the two payments under the Generex Biotechnology Purchase of 51% of the Company outstanding shares for approximately $900,000 and expects to receive an additional $11.1 million by September 30, 2019.

2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

For the purposes of reporting cash flows, the Company considers all cash accounts, which are not subject to withdrawal restrictions or penalties, and highly liquid investments with original maturities of 90 days or less to be cash and cash equivalents. From time to time cash balances exceed federal insurance limits.

Income Taxes

Deferred tax assets and liabilities are determined based on differences between financial reporting and tax reporting bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Uncertain tax positions are evaluated and if appropriate, the amount of unrecognized tax benefits are recorded within deferred tax assets. Deferred tax assets are evaluated for realization based on a more-likely-than-not criterion in determining if a valuation allowance should be provided. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized.

The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying statements of operations. As of June 30, 2018 no accrued interest or penalties were required to be included on the related tax liability line in the balance sheet.

Intangible Assets

The Company reviews the recoverability of definite-lived intangible assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount of an intangible asset might not be recoverable. If required, the Company compares the estimated undiscounted future net cash flows to the related asset’s carrying value to determine whether there has been an impairment. If an asset is considered impaired, the asset is written down to fair value, which would be based either on discounted cash flows or appraised values in the period the impairment becomes known and estimable. The Company believes that all long-lived intangible assets are recoverable, and no impairment was deemed necessary at June 30, 2018.

Stock-based Compensation

ASC 718 "Compensation – Stock Compensation" prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, "Equity – Based Payments to Non-Employees." Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.

No stock-based compensations costs were incurred from the April 24, 2018 (inception) to June 30, 2018.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB and are adopted by the Company as of the specified effective date.

Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The effective date will be the first quarter of fiscal year 2020 with early adoption permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the impact of the pending adoption of the new standard on the Company’s financial statements.

In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718); Improvements to Nonemployee Share-Based Payment Accounting. The new guidance aligns the accounting for share-based payment awards issued to employees and nonemployees. Under the new guidance, the existing employee guidance will apply to nonemployees share-based transactions, with the exception of specific guidance related to the attribution of compensation cost. The amendments in the new guidance are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, including in interim periods, but no earlier than an entity’s adoption of ASC 606. The Company does not believe that this ASU will have a significant impact on its financial statements.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

3. INTANGIBLE ASSETS

In June 2018, the Company issued 900,000 shares of Common Stock for a deposit towards the purchase of the right to buy the license and intellectual property related to the Excellagen Product. The value of the shares was $225,000 based on the cash paid towards the initial deposit to purchase the Intellectual Property by the seller. The Company is also obligated to pay $53,000 in cash once the Company raise $2,500,000. See note 9 for additional information.

4. SUBSCRIPTION RECEIVABLE

Subscription receivable represents amount owed to the Company from the founders for the initial capitalization of the Company.

5. ACCRUED EXPENSES – RELATED PARTY

Profit Planners Management paid $1,200 for the Incorporation and Delaware Taxes for the Company. Profit Planners Management majority stockholder is the Company’s Chief Financial.

6. STOCKHOLDERS’ EQUITY

The Company has authorized 10,000,000 Common Stock and 2,000,000 Preferred Stock. See Note 8 for additional terms.

On April 24, 2018, the Company issued 1,234,808 shares of Common Stock to the founders at par, $0.001, for a total price of $1,235.

On June 20, 2018, the Company issued 900,000 shares of Common Stock as a deposit to purchase rights to buy the intellectual property related to the Excellagen Intelletual Property. The value of the deposit was $225,000.

7. INCOME TAXES

Net deferred tax assets (liabilities) as of June 30, 2018 is zero.

On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (“Tax Act”) which significantly changed the U.S. tax law. The Tax Act lowered the Company’s U.S. statutory federal income tax rate from 34% to 21% effective January 1, 2018.

The Company files tax returns as prescribed by the laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. There are currently no pending tax examinations. The Company’s tax years are still open under the statue from 2018 to present.

8. COMMITMENTS

From time to time, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of the Company’s business activities. The Company is not aware of any such legal proceedings or claims.

9. SUBSEQUENT EVENTS

Series A Convertible Preferred Stock Financing

On August 29, 2018, the Company entered into a Stock Purchase Agreement (“Agreement”) whereby the Company agreed to sell and issue to each purchaser Series A convertible preferred stock. The Company authorized the sale and issuance of 592,683 shares of Company’s Series A convertible preferred stock, par value of $0.001, for $1,000,000. If the Company’s cumulative net sales from the closing date to December 31, 2020 are less than $22,950,000, the Company will issue to each preferred stock holder a Series A warrant which will expire 10 years from the issuance date, to purchase a number of Series A convertible preferred stock equal to the Deficit Percentage Points multiplied by 1,778 multiplied by such preferred share holder’s pro rated shares.

As additional consideration for the Purchase Price, during the period commencing on the Closing Date and ending on the tenth anniversary of such date, each Preferred stock holder will be entitled to a payment equal to its Pro Rata Shares of 1% of the net sales of the Company to be calculated and paid quarterly within 30 days (With the first such payment due and payable following the quarter ending March 31, 2019 for any applicable Net Sales occurring prior to that date); provided that, after the Preferred stock holders have received royalties in the aggregate of $3,000,000 under this Royalty section, such royalty will decreased to 0.5% of the Net Sales of the Company; and provided further that the Preferred stock holders will in no event received more than of $4,000,000 in royalties in the aggregate(the “Royalties”).

Unless the holder or holders of a majority of the shares of Series A convertible preferred stock elect otherwise by written notice sent to the Company at least 10 days prior to the effective date of any such event, upon any voluntary or involuntary liquidation, dissolution or winding up of the Company, each holder of the Series A convertible preferred stock will be entitled to receive for each share of Series A convertible preferred stock, an amount in cash, or to the extent that cash is not available, property, out of the assets of the Company available for distribution to the stockholders, before any payment or distribution will be made on any Junior Securities, an amount equal to the Liquidation Value applicable to such share, plus any dividends declared.

The holders of Series A convertible preferred stock will be entitled to receive when, as and if declared by the Board, out of funds legally available therefor, a portion of any dividends declared on shares of common stock, whether payable in cash, equal to the amount of the dividend that would have been payable in respect of the shares of common stock into which all outstanding shares of Series A convertible preferred stock could have been converted on the date of the declaration of the dividend.

The common stock and the Series A convertible preferred stock will vote together as a single class. Each holder of Series A convertible preferred stock will have the number of votes equal to the number of shares of common.

At any time and from time to time, any holder of Series A convertible preferred stock may convert all or any portion of the Series A convertible preferred shares held by such holder into an equal number of shares of common stock.

If the holder or holders of at least two-thirds of the common stock that would issuable upon conversion of the Series A convertible preferred stock then outstanding will so elect, by vote or written consent, all of the outstanding Series A convertible preferred stock will automatically convert into shares of common stock upon such election, vote or consent and without any further action by the holders of such Series A convertible preferred stock and whether or not the certificates representing such shares are surrendered to the Company or its transfer agent.

If the Company has a commitment for a Public Offering of shares of common stock (a “Qualified Public Offering”) for at least $25,000,000, and the sale price per stock in such offering is not less than four times the liquidation value of the Series A convertible preferred stock, then all of the outstanding Series A convertible preferred stocks will be automatically converted into shares of common stock.

Purchase of Excellagen Intellectual Property

In September 2018, the Company paid $425,000 in cash to complete the purchase of the Excellagen Intellectual Property. The Company is committed to pay an additional $3,350,000 as a royalty in future quarters or prepaid for $2,750,000. (See Note 3)

Common Stock

The Company sold and issued approximately 156,379 shares of Common Stock from July to October 2018 at $1.69 per shares totaling approximately $264,000.

Generex Biotechology Corporation. (“Generex”) Purchase of 51% of the Company’s outstanding shares On January 3, 2019, the Company sold 3,282,632 shares of common stock. The price payable to the Company for the Purchase Shares will be $3.66 per share for an aggregate sum of $12,000,000 (the “Purchase Price”). The Company received an initial deposit of $400,000 on November 27, 2018 for the purchase of 106,666 shares of the Company’s Common Stock and received a deposit of $500,000 on January 28, 2019 and promissory note receivable of $11,100,000 from Generex Biotechnology Corporation for the remaining 3,175,966 shares. The rate of interest is 7% and the remaining payments are due by September 30, 2019 pursuant to the agreement.

Employment agreements

The Company has entered into employment agreements with its Chief Executive Officer, Chief Operating Officer, Chief Marketing Officer, and Vice President of business development effective December 15, 2018.

On December 15, 2018 the Company entered into an amended employment agreement with its Chief Marketing Officer. The CMO annual salary will be $180,000 beginning December 15, 2018. In

addition, she is eligible for a performance bonus of 40% of her annual salary. In addition, the CMO is entitled to a sign on bonus of $25,000 payable in March 2019. The CMO owns 150,000 shares of common stock that are subjected to a claw back if she leaves before thirty-six months starting June 1, 2018. If the CMO leaves before the thirty-six months, then the Company will repurchase the unvested shares at $0.001 per share.

On December 15, 2018 the Company entered into an amended employment agreement with its Vice President of Sales and Strategic Alliances. The VP of Sales and Strategic Alliances’ annual salary will be $150,000 beginning December 15, 2018. In addition, he is eligible for a performance bonus of 40% of his annual salary. The VP owns 75,000 shares of common stock that are subjected to a claw back if he leaves before thirty-six months starting June 1, 2018. If the VP leaves before the thirty-six months, then the Company will repurchase the unvested shares at $0.001 per share.

On December 15, 2018 the Company entered into an amended employment agreement with its Chief Executive Officer. The CEO annual salary will be $260,000 beginning December 15, 2018.

In addition, he is eligible for a performance bonus of 33% of his annual salary. The CEO owns 324,904 shares of common stock that are subjected to a claw back if he leaves before thirty-six months starting June 1, 2018. If the CEO leaves before the thirty-six months, then the Company will repurchase the unvested shares at $0.001 per share.

On December 15, 2018 the Company entered into an amended employment agreement with its Chief Operating Officer. The COO annual salary will be $225,000 beginning December 15, 2018. In addition, he is eligible for a performance bonus of 40% of his annual salary. In addition, the COO is entitled to a sign on bonus of $40,000 payable in February 2019. The COO owns 250,000 shares of common stock that are subjected to a clawback if he leaves before thirty-six months starting June 1, 2018. If the CEO leaves before the thirty-six months, then the Company will repurchase the unvested shares at $0.001 per share.

In August 2018, the Company issued 15,000 shares of common stock to three consultants. The shares were valued at $1.69 per share and was expensed in August 2018 when the services were performed. The Company entered into a consulting agreement with Profit Planners Inc.(“PPI”), to provide accounting services. In addition, Wesley Ramjeet, the owner of PPI is the Company’s Chief Financial Officer and Board Member. PPI monthly fee is $10,000 for the first 12 months. PPI will be entitled to a 20% bonus upon the completion of $10,000,000 capital or debt funding and will be entitled to a 10% bonus if the Company meets its annual targets as determined by the agreement.

EX-99.2 4 ex99_2.htm EXHIBIT 99.2

Financial Statements

OLAREGEN THERAPEUTIX, INC.

For the three months ended September 30, 2018

(Unaudited)

Financial Statements (Unaudited)
Balance Sheets – September 30, 2018 and June 30, 2018	3
Statement of Operations – For the three months ended September 30, 2018 and 2017	4
Statement of Changes in Stockholders’ Equity – September 30, 2018	5
Statement of Cash Flows – For the three periods ended September 30, 2018 and 2017 6	6
Notes to Financial Statements	7

OLAREGEN THERAPEUTIX, INC.

INTERIM BALANCE SHEETS

As of September 30, 2018

(Unaudited)

	September 30, 2018			June 30, 2018
ASSETS
Current Assets
Cash and Cash equivalents	$	23,462		$	—
Inventory		205,280
Intangible assets		650,000			225,000
TOTAL ASSETS		878,742			225,000

LIABILITIES & STOCKHOLDER'S EQUITY
Current Liabilities
Account payable		204,776			—
Accrued expense - Related Party		—			1,200
Total Current Liabilities		204,776			1,200
Commitments and contingencies
Stockholders' Equity
Preferred Stock ; $0.001 Par Value, 2,000,000 shares authorized;
Convertible Series A Preferred Stock : 800,000 shares Authorized, 266,272 and shares issued and outstanding		450,000			—

Common Stock ; $0.001 Par value, 10,000,000 shares authorized; 2,209,187 and 2,134,808 shares issued and outstanding		2,209			2,135
Stock Subscription		(10	)		(1,235	)
Additional paid-in capital		349,826			224,100
Accumulated deficit		(128,059	)		(1,200	)
Total Stockholders' Equity		673,966			223,800
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$	878,742		$	225,000

See accompanying notes to financial statements

OLAREGEN THERAPEUTIX, INC.

INTERIM STATEMENTS OF OPERATIONS

As of September 30, 2018

	September 30, 2018			September 30, 2017
		(Unaudited)			(Unaudited)
Revenue	$	—		$	—
Operating expenses		128,058			—
Net Loss before Income Taxes		(128,059	)		—

Income tax		—			—
Net Income	$	(128,059	)	$	—

See accompanying notes to financial statements

OLARGEN THERAPEUTIX, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

As of September 30, 2018

(Unaudited)

	Common				Convertible Series A
	Shares		Amount		Preferred Stock		Additional Paid-in Capital		Stock Subscription			Accumulated Deficit			Total
Beginning Balance, April 24, 2018 (Inception)		—	$	—			$	—	$	—		$	—		$	—
Common stock Issued to founders		1,234,808		1,235				—		(1,235	)		—			(0	)
Common stock Issued to purchase IP rights		900,000		900				224,100					—			225,000
Net loss		—		—				—					(1,200	)		(1,200	)
Ending Balance, June 30, 2018		2,134,808	$	2,135			$	224,100	$	(1,235	)	$	(1,200	)	$	223,800
Sales of Common Stock		74,379		74				125,726		1,225						127,025
Sales of Convertible Series A Preferred Stock						450,000										450,000
Net loss													(126,859	)		(126,859	)
Ending Balance, September 30, 2018		2,209,187	$	2,209	$	450,000	$	349,826	$	(10	)	$	(128,059	)	$	673,966

See accompanying notes to financial statements

OLAREGEN THERAPEUTIC, INC.

STATEMENTS OF CASH FLOWS

As of September 30, 2018

	September 30,
	2018			2017
	(Unaudited)			(Unaudited)
Cash flows from operating activities :
Net loss	$	(128,059	)	$	—
Adjustments to reconcile net loss to net cash used in operating activities :
Changes in operating assets and liabilities
Inventory		(205,280	)
Account payable and accrued expenses		204,776
Net cash used in operating activities		(128,563	)		—
Cash flows from investing activities :
Intellectual Property, net		(425,000	)		—
Net cash used in investing activities		(425,000	)		—

Cash flows from financing activities :
Sales of Common Stock		125,800
Stock Subscription		1,225
Sales of Convertible Series A Preferred Stock		450,000
Net cash provided by financing activities		577,025


Cash and cash equivalents
Beginning of period		—
Ending of period	$	23,462		$	—

Supplemental cash flow disclosures

Non-cash investing and financing activities
The Company issued 900,000 shares for purchase of the rights to the Excellagen Intellectual Property value at $225,000.
The Company issued 1,234,808 common shares to its founders for $1,235.
The Company is owed $1,235 from the founders.

See accompanying notes to financial statements

OLAREGEN THERAPEUTIX, INC.

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 - NATURE OF OPERATIONS AND LIQUIDITY

Nature of Operations

Olaregen Therapeutix, Inc. (the “Company ” or “Olaregen”) is a development stage company incorporated on April 24, 2018 under the laws of Delaware. The Company is a regenerative medicine company focused on the development, manufacturing and commercialization of products that fill unmet needs in the current wound care market. The Company aims to provide advanced healing solutions that substantially improve medical outcomes while lowering the overall cost of care. Olaregen's first product introduction, Excellagen is a topically applied product for dermal wounds and other indications. The Company is focused on advancing wound care including diabetic foot ulcers (DFU), venous leg ulcers and pressure ulcers.

Liquidity

The Company has not yet generated any revenue from the sale of products. The Company efforts have been principally devoted to identifying and acquiring the Intellectual Property, related to Excellagen. The Company has reported a net loss $128,059, cash flows from operating activities a negative $128,563, cash flows from investing activities a negative of $425,000, and cash flows from financing activities of $577,025 as of September 30, 2018. Management believes that the Company has the required cash to continue as a going concern because subsequent to September 30, 2018, the Company raised approximately $1.3 million from the sale of Common stock and Convertible Preferred stock. In additional (as noted in Note 9) the Company received the two payments under the Generex Biotechnology Purchase of 51% of the Company outstanding shares for approximately $900,000 and expects to receive an additional $11.1 million by September 30, 2019.

NOTE 2 - Significant accounting policies

Basis of Presentation

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Use of Estimates

The preparation of financial statements in accordance with U.S. GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates these estimates including those related to fair values of financial instruments, intangible assets, fair value of stock-based awards, income taxes and contingent liabilities, among others. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company’s condensed consolidated financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions, which could have a material effect on the reported amounts of the Company’s condensed consolidated financial position and results of operations.

Cash and Cash Equivalents

Income Taxes

The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying statements of operations. As of September 30, 2018 no accrued interest or penalties were required to be included on the related tax liability line in the balance sheet.

Intangible Assets

The Company reviews the recoverability of definite-lived intangible assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount of a n intangible asset might not be recoverable. If required, the Company compares the estimated undiscounted future net cash flows to the related asset’s carrying value to determine whether there has been an impairment. If an asset is considered impaired, the asset is written down to fair value, which would be based either on discounted cash flows or appraised values in the period the impairment becomes known and estimable. The Company believes that all long-lived intangible assets are recoverable, and no impairment was deemed necessary at September 30, 2018.

Stock-based Compensation

No stock-based compensations costs were incurred from the April 24, 2018 (inception) to September 30, 2018.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB and are adopted by the Company as of the specified effective date.

Accounting Pronouncements Not Yet Adopted

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

NOTE 3 - Intangible assets

In September 2018, the Company paid $425,000 in cash to complete the purchase of the Excellagen Intellectual Property . The Company is committed to pay an additional $3,350,000 as a royalty in future quarters or prepaid for $2,750,000.

NOTE 4 - Subscription receivable

Subscription receivable represents amount owed to the Company from the founders for the initial capitalization of the Company.

NOTE 5 - STOCKHOLDERS’ EQUITY

The Company has authorized 10,000,000 Common Stock and 2,000,000 Preferred Stock . See Note 8 for additional terms.

On April 24, 2018, the Company issued 1,234,808 shares of Common Stock to the founders at par, $0.001, for a total price of $1,235.

Series A Convertible Preferred Stock Financing

On August 29, 2018, the Company entered into a Stock Purchase Agreement (“Agreement”) whereby the Company agreed to sell and issue to each purchaser Series A Convertible Preferred Shares. The Company authorized the sale and issuance of 592,683 shares of Company’s Series A Convertible Preferred Stock, par value of $0.001, for $1,000,000 . If the Company’s Cumulative Net Sales from the Closing Date to December 31, 2020 are less than $22,950,000, the Company will issue to each preferred stock holder a Series A Warrant which will expire 10 years from the issuance date, to purchase a number of Series A Convertible Preferred Shares equal to the Deficit Percentage Points multiplied by 1,778 multiplied by such Preferred Stock Holder’s Pro Rated Shares.

As additional consideration for the Purchase Price, during the period commencing on the Closing Date and ending on the tenth anniversary of such date, each Preferred stock holder will be entitled to a payment equal to its Pro Rata Shares of 1% of the Net Sales of the Company to be calculated and paid quarterly within 30 days (With the first such payment due and payable following the quarter ending March 31, 2019 for any applicable Net Sales occurring prior to that date); provided that, after the Preferred stock holders have received royalties in the aggregate of $3,000,000 under this Royalty section, such royalty will decreased to 0.5% of the Net Sales of the Company; and provided further that the Preferred stock holders will in no event received more than of $4,000,000 in royalties in the aggregate(the “Royalties”).

Common Stock

The Company sold and issued approximately 171,379 shares of Common Stock from July to October 2018 at $1.69 per shares totaling approximately $289,000.

NOTE 5 - INCOME TAXES

Net deferred tax assets (liabilities) as of September 30, 2018 is zero.

NOTE 6 - COMMITMENTS

Office Lease

Effective January 21, 2019, the Company entered into a new lease for office space at 1979 Marcus Avenue Suite 210, Lake Success, New York, 11042. The term is for 6 months at a monthly rate of $5,300.

NOTE 7 - SUBSEQUENT EVENTS

Generex Biotechology Corporation. (“Generex”) Purchase of 51% of the Company’s outstanding shares

On January 7, 2019, the Company sold 3,282,632 shares of common stock. The price payable to the Company for the Purchase Shares will be an aggregate sum of $12,000,000 (the “Purchase Price”). The Company received an initial deposit of $400,000 on November 27, 2018 for the purchase of 106,666 shares of the Company’s Common Stock and received deposits totaling $1,000,000 as of March 11, 2019. The promissory note receivable of $10,600,000 from Generex Biotechnology Corporation as of March 11, 2019. The rate of interest is 7%. As of March 11, 2019, Generex has paid $1,000,000 against $1,600,000 due in January 2019. Generex had a 30 days grace period to make the $600,000 payment and has not done so as of March 11, 2019.

Employment agreements

On December 15, 2018 the Company entered into an amended employment agreement with its Chief Marketing Officer. A previous CMO annual salary was $180,000 beginning December 15, 2018, but revised to $120,000 beginning January 16, 2019. In addition, she is eligible for a performance bonus of 40% of her annual salary. In addition, the CMO is entitled to a sign on bonus of $25,000 payable in March 2019. The CMO owns 150,000 shares of common stock that are subjected to a claw back if she leaves before thirty-six months starting June 1, 2018. If the CMO leaves before the thirty-six months, then the Company will repurchase the unvested shares at $0.001 per share .

On December 15, 2018 the Company entered into an amended employment agreement with its Chief Executive Officer. The CEO annual salary will be $260,000 beginning December 15, 2018. In addition, he is eligible for a performance bonus of 33% of his annual salary. In February 2019, the CEP employment agreement was amended to increase his salary to $340,000 beginning March 2019. The CEO was also paid a bonus of $40,000 in February. The CEO owns 324,904 shares of common stock that are subjected to a claw back if he leaves before thirty-six months starting June 1, 2018. If the CEO leaves before the thirty-six months, then the Company will repurchase the unvested shares at $0.001 per share.

On December 15, 2018 the Company entered into an amended employment agreement with its Chief Operating Officer. The COO annual salary will be $225,000 beginning December 15, 2018. In addition, he is eligible for a performance bonus of 40% of his annual salary. In addition, the COO is entitled to a sign on bonus of $40,000 payable in February 2019. The COO owns 250,000 shares of common stock that are subjected to a clawback if he leaves before thirty-six months starting June 1, 2018. If the COO leaves before the thirty-six months, then the Company will repurchase the unvested shares at $0.001 per share.

The Company entered into a consulting agreement with Profit Planners Inc .(“PPI ”), to provide accounting services. In addition, Wesley Ramjeet, the owner of PPI is the Company’s Chief Financial Officer and Board Member. PPI monthly fee is $10,000 for the first 12 months. PPI will be entitled to a 20% bonus upon the completion of $10,000,000 capital or debt funding and will be entitled to a 10% bonus if the Company meets its annual targets as determined by the agreement.

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

As used herein, the terms the “Company,” “Olaregen,” “we,” “us,” or “our” refer to Olaregen Therapeutix Inc, a Delaware corporation. The following discussion and analysis by management provides information with respect to our financial condition and results of operations for the three month periods ended September 30, 2018 and 2017.

Forward-Looking Statements

The information in this report contains forward-looking statements. All statements other than statements of historical fact made in this report are forward looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. These forward-looking statements can be identified by the use of words such as “believes,” “estimates,” “could,” “possibly,” “probably,” “anticipates,” “projects,” “expects,” “may,” “will,” or “should” or other variations or similar words. No assurances can be given that the future results anticipated by the forward-looking statements will be achieved. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Our actual results may differ significantly from management’s expectations.

The following discussion and analysis should be read in conjunction with our accompanying financial statements and the notes to those financial statements included in this filing. The following discussion includes forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this filing.

Operations

We are a New York Corporation founded in April 24, 2018.

Results of Operations

Three months ended September 30, 2018 compare to three months ended September 30, 2017.

For the three months ended September 30, 2018 and 2017, we had no revenues. Selling, general and administrative expenses for the three months ended September 30, 2018 and 2017 totaled $178,759 and $0, respectively, resulting in a net loss of $178,759 and $0, respectively.

Cash flows for the Three Months ended September 30, 2018

As of September 30, 2018, we had cash of $23,462. The increase in cash resulted for the Sale of Preferred and Common Stocks totaling $577,025 less operating losses and purchase of the Excellegen Itellectual Property.

EX-99.3 5 ex99_3.htm EXHIBIT 99.3

Exhibit 99.3

Unaudited pro forma condensed combined financial information

The following unaudited pro forma condensed combined financial statements and related notes are derived from the historical condensed consolidated financial statements of Generex and Olaregen after giving effect of the acquisition.. The unaudited pro forma condensed combined balance sheet as of October 31, 2018 gives effect to the Olaregen acquisition as if it occurred on that date. The unaudited pro forma condensed combined statements of operations for the three months ended October 31, 2017 and for the year ended July 31, 2017 give effect to the Olaregen acquisition as if it occurred on August 1, 2017.

The Company accounted for the Acquisition of Olaregen as a business combination as prescribed in Accounting Standards Codification 805, Business Combinations (“ASC 805”) and ASC 820 – Fair Value Measurements and Disclosures (“ASC 820”). In accordance with ASC 805 and ASC 820, we used our best estimates and assumptions to accurately assign fair value to the tangible assets acquired, identifiable intangible assets and liabilities assumed and the related income tax impacts as of the acquisition dates. Goodwill as of the acquisition date is measured as the excess of purchase consideration over the fair value of tangible and identifiable intangible assets acquired and liabilities assumed.

The fair values assigned to Olaregen’ tangible and identifiable intangible assets acquired, and liabilities assumed are based on management’s estimates and assumptions. The estimated fair values of these assets acquired, and liabilities assumed are considered preliminary and are based on the information that was available as of the date of the acquisition. The preliminary estimated fair values of assets acquired, and liabilities assumed, and identifiable intangible assets may be subject to change as additional information is received. Thus, the provisional measurements of fair value are subject to change. We expect to finalize the valuation as soon as practicable, but not later than one year from the second closing date.

The unaudited pro forma condensed combined financial information is based upon, and should be read in conjunction with:

•

The accompanying notes to the unaudited condensed combined pro forma financial statements;

•

The Company’s audited consolidated financial statements and accompanying notes as of and for the fiscal years ended July 31, 2018 and 2017 filed with the Securities and Exchange Commission ("SEC") on October 26, 2018;

•

The Company’s unaudited consolidated financial statements and accompanying notes as of and for the three-month period ended October 31, 2018 and 2017; and

•

Olaregen audited financial statements for the period from inception (April 24, 2018) to June 30, 2018; and

•

Olaregen unaudited financial statements for the three-month period ended September 30, 2018;

Generex’s historical condensed consolidated statement of income for the year ended July 31, 2018 was derived from its audited consolidated financial statements as reported in its Annual Report on Form 10-K for the year ended July 31, 2018. Generex’s historical condensed consolidated statement of income for the three months ended October 31, 2018, and condensed consolidated balance sheet as of October 31, 2018, were derived from its unaudited interim condensed consolidated financial statements as reported in its Quarterly Report on Form 10-Q for the period ended October 31, 2018.

Olaregen’ historical fiscal year ends on June 30 and, for purposes of the unaudited pro forma condensed combined financial information, its historical results have been aligned to conform to the Company’s July 31 fiscal year end:

•

The unaudited pro forma condensed combined balance sheet as of October 31, 2018, combines the Company’s historical results as of October 31, 2018, and Olaregen’ historical results as of September 30, 2018;

•

The unaudited pro forma condensed combined statement of operations for the three-months ended October 31, 2018, combines the Company’s historical results for year ended October 31, 2018, and Olaregen’s historical results for the three-months ended September 30, 2018

•

The unaudited pro forma condensed combined statement of operations for the fiscal year ended July 31, 2018, combines the Company’s historical results for year ended July 31, 2018, and Olaregen’ historical results for the period from inception (April 24, 2018) to June 30, 2018.

The unaudited pro forma combined financial information is presented for informational purposes only and is not intended to represent the consolidated financial position or consolidated results of operations of Generex that would have been reported had the Acquisition been completed as of the dates described above, and should not be taken as indicative of any future consolidated financial position or consolidated results of operations. The historical financial information has been adjusted to give effect to estimated pro forma events that are directly attributable to the acquisition, factually supportable and, with respect to the unaudited pro forma condensed consolidated statements of income, expected to have a continuing impact on the consolidated results of operations and do not reflect any sales or cost savings from synergies that may be achieved with respect to the combined companies, or the impact of non-recurring items, including restructuring liabilities, directly related to the Acquisition.

GENEREX BIOTECHNOLOGY CORPORATION
Unaudited Proforma Combined Balance Sheet
as of October 31, 2018

	Historical
	Generex Biotechnology Corporation			Olaregen Therapeutix Inc			Pro Forma Adjustments			Notes		Pro Forma Combined
	October 31, 2018			September 30, 2018
ASSETS
Current Assets
Cash and cash equivalents	$	2,363,740		$	23,462		$	—				$	2,387,202
Restricted cash		—			—			—					—
Accounts receivable, net		2,982,229			10			—					2,982,239
Inventory, net		838,696			205,280			—					1,043,976
Prepaid expenses and other		—			—			—					—
Other current assets		193,194			—			—					193,194
Total current assets		6,377,859			228,752			—					6,606,611

Property and equipment, net		665,278			—			—					665,278
Notes receivable		1,387,763			—			—					1,387,763
Call option		756,041			—			—					756,041
Goodwill		—			—			19,078,246			(A)		18,860,228
In Process - Research & Development		—			—			3,980,000			(B)		3,980,000
Non-Compete Agreement,net		—			—			790,000			(C)		790,000
Intangible asset, net		12,133,830			650,000			(650,000	)		(D)		12,133,830
Patents, net		22,633			—			—					22,633
Other assets, net		7,824			—			—					7,824
TOTAL ASSETS	$	21,351,228		$	878,752		$	23,198,246				$	45,428,226

LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current Liabilities
Accounts payable and accrued expenses	$	13,229,881		$	204,776		$	—				$	13,434,657
Notes payable		15,854,940			—			(127,337	)		(E)		15,727,603
Loans from related parties		13,864,241			—			—					13,864,241
Other current liabilities					—			—					—
Total Current Liabilities		42,949,062			204,776			(127,337	)				47,742,272

Warrants to be issued		4,005,240			—			—					4,005,240
Notes payable - long term		—			—			—					6,884,229
Equipment lease financing					—			—					—
Contingent consideration					—			—					—
Deferred Rent					—			—					—
Total Liabilities		46,954,302			204,776			(127,337	)				47,031341

Commitments and Contingencies

Stockholders’ Deficiency
Series H Convertible Preferred Stock, $.001 par value; authorized 109,000 shares, 63,000 issued shares at October 31, 2018		3			—			—					3
Series I Convertible Preferred Stock, $.001 par value; authorized 6,000 shares, 16,590 issued shares at October 31, 2018		1			—			—					1
Common stock, $.001 par value; authorized 750,000,000 shares at October 31, 2018 and 28,427,049 issued and outstanding at October 31, 2018		28,427			—			—					28,427
Convertible Series A Preferred Sock: 800,000 shares Authorized, None issued or outstanding					450,000			(450,000	)		(F)		—
Common stock					2,209			(2,209	)		(F)		—
Common stock payable		251,617			—			—					251,617
Additional paid-in capital		370,402,796			349,826			11,650,174			(F)		382,402,796
Treasury stock					—			—					—
Accumulated deficit		(391,512,465	)		(128,059	)		128,059			(G)		(391,768,583	)
Accumulated other comprehensive income		800,048			—			—					800,048
Members' Equity		—			—			—					—
								—					—
Non-controlling interest		(5,573,501	)		—			11,999,559			(H)		6,426,058

Total Stockholders’ Deficiency		(25,603,074	)		673,976			23,325,583					(1,603,515	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY	$	21,351,228		$	878,752		$	23,198,246				$	45,428,226

GENEREX BIOTECHNOLOGY CORPORATION
Unaudited Proforma Combined Statement of Operations
For the three months ended October 31, 2018

	Historical
	Generex Biotechnology Corporation			Olaregen Therapeutix Inc			Pro Forma Adjustments			Notes		Pro Forma Combined
	3 Months Ended October 31, 2018			3 Months Ended September 30, 2018								3 Months Ended October 31, 2018
Revenue
Revenue, Net	$	1,719,148		$	—		$	—				$	1,719,148
Sales		—			—			—					—
Licensing income		—			—			—					—
Total Revenue		1,719,148			—			—					1,719,148

Cost of Goods Sold		870,621			—			—					870,621

Gross Profit		848,527			—			—					848,527

Operating expenses
Selling, general, and administrative expenses		2,272,641			128,059			65,833			(I)		2,466,533
Research and development		180,067			—			—					180,067
Total operating expenses		2,452,708			128,059			65,833					2,646,600

Operating Loss		(1,604,181	)		(128,059	)		(65,833	)				(1,798,073	)

Other Income (Expense):
Interest expense		(165,716	)		—			—					(165,716	)
Interest income		6,660			—			—					6,660
Changes in fair value of contingent purchase consideration		19,545,098			—			—					19,545,098
Other Loss (Gain)		—			—			—					—
Other Expense (Income), Net		3,886			—			—					3,886
Net Income (loss)		17,785,747			(128,059	)		—					17,657,688
Net loss attributable to noncontrolling interests		(88,256	)		—			104,066					15,810
Net Income (loss) Available to Common Stockholders	$	17,874,003		$	(128,059	)	$	(169,899	)			$	17,576,045
													—
Net Income (loss) per Common Share
Basic	$	0.78						(0.01	)			$	0.77
Diluted	$	0.33						(0.01	)				0.32

Shares Used to Compute Income (loss) per Share
Basic		22,806,777						22,806,777					22,806,777
Diluted		54,699,198						54,699,198					54,699,198

Comprehensive Income (Loss):
Net Income (Loss)	$	17,874,003		$	(128,059	)	$	(169,899	)			$	17,576,045
Change in foreign currency translation adjustments		1,626			—			—					1,626
Comprehensive Income (Loss) Available to Common Stockholders	$	17,875,629		$	(128,059	)	$	(169,899				$	17,577,671

GENEREX BIOTECHNOLOGY CORPORATION
Unaudited Proforma Combined Statement of Operations
For the year ended July 31, 2018

	Historical
	Generex Biotechnology Corporation			Olaregen Therapeutix Inc			Pro Forma Adjustments			Notes		Pro Forma Combined
	12 Months Ended July 31, 2018			Inception (April 24, 2018) June 30, 2018								12 Months Ended July 31, 2018
Revenue
Revenue, Net	$	—		$	—		$	—				$	—
Sales		3,244			—			—					3,244
Licensing income		700,000			—			—					700,000
Total Revenue		703,244			—			—					703,244

Cost of Goods Sold		—			—			—					—

Gross Profit		703,244			—			—					703,244

Operating expenses
Selling, general, and administrative expenses		2,359,706			1,200			70,703			(K)		2,431,609
Research and development		839,147			—			—					839,147
Total operating expenses		3,198,853			1,200			70,703					3,270,756

Operating Loss		(2,495,609	)		(1,200	)		—					(2,567,512	)

Other Income (Expense):
Interest expense		(583,594	)		—			—					(583,594	)
Interest income		—			—			—					—
Changes in fair value of contingent purchase consideration		39,027,901			—			—					39,027,901
Other Loss (Gain)		—			—			—					—
Other Expense (Income), Net		—			—			—					—
Net Income (loss)		35,948,698			(1,200	)		(70,703	)				35,876,795
Net loss attributable to noncontrolling interests		(385,400	)		—			243,628			(L)		(141,772	)
Net Income (loss) Available to Common Stockholders	$	36,334,098		$	(1,200	)	$	(314,332	)				36,018,566
													—
Net Income (loss) per Common Share
Basic	$	1.59						(0.01	)			$	1.58
Diluted	$	00.66						(0.01	)				0.66

Shares Used to Compute Income (loss) per Share
Basic		22,806,777						22,806,777					22,806,777
Diluted		54,699,198						54,699,198					54,699,198

Comprehensive Income (Loss):
Net Income (Loss)	$	36,334,098		$	(1,200	)	$	(314,332	)			$	36,018,566
Change in foreign currency translation adjustments		15,272			—			—					15,272
Comprehensive Income (Loss) Available to Common Stockholders	$	36,349,370		$	(1,200	)	$	(314,332	)			$	36,033,838

Generex Biotechnology Corporation and

Olaregen Therapeutix Inc

Notes to the unaudited pro forma combined financial information

1. Basis of pro forma presentation

On January 7, 2019, Olaregen Therapeutix Inc. ("Olaregen") and Generex Biotechnology Corporation (“Generex” or the “Company”) completed closing of the stock purchase agreement (the “Stock Purchase Agreement”) previously announced in a binding letter of intent (“LOI”) on November 28, 2018 wherein the Company purchased 51% of the capital stock of Olaregen (3,282,632 newly issued shares in Olaregen common stock) in exchange for total purchase price of $12,000,000 payable as follows: (i) a cash payment of $400,000; and (ii) the issuance of a promissory note in the amount of $11,600,000 and guaranteed by Generex and Company’s Chief Executive Officer, Joseph Moscato and shall bear an annual rate of seven percent (7.0%), simple interest that shall accrue daily on the basis of a 365-day year payable in one lump sum at the end of the payment term.

The financial data in the unaudited pro forma condensed consolidated financial statements are presented in U.S. dollars and has been compiled prepared in a manner consistent with the accounting policies adopted by Generex. These accounting policies are similar in most material respects to those of Olaregen, Generex is currently performing a more detailed review of Olaregen’s accounting policies. As a result of that review, differences could be identified between the accounting policies of the two companies that, when conformed, could have a material impact on the combined financial statements. including any intercompany transaction requiring elimination upon consolidation.

The historical consolidated financial information has been adjusted in the unaudited pro forma condensed consolidated financial statements to give effect to pro forma events that are (1) directly attributable to the acquisition, (2) factually supportable and (3) with respect to the unaudited pro forma condensed consolidated statements of income, are expected to have a continuing impact on the results of operations. The Unaudited Pro Forma Combined do not reflect any sales or cost savings from synergies that may be achieved with respect to the combined companies, or the impact of non-recurring items, including restructuring liabilities, directly related to the Acquisition.

The accompanying unaudited pro forma combined financial information is derived from the historical financial statements of Generex and Olaregen. The unaudited pro forma combined financial information is prepared using the purchase method of accounting, as defined by Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 805, Business Combinations, and Topic 820 – Fair Value Measurements and Disclosures with Generex treated as the acquirer.

Olaregen’s historical fiscal year ends on June 30 and, for purposes of the unaudited pro forma condensed combined financial information, its historical results have been aligned to conform to the Company’s July 31 fiscal year end:

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The unaudited pro forma condensed combined balance sheet as of October 31, 2018, combines the Company’s historical results as of October 31, 2018, and Olaregen’s historical results as of September 30, 2018.

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The unaudited pro forma combined statement of operations for the three-months ended October 31, 2018, combines the Company’s historical results for year ended October 31, 2018, and Olaregen’s historical results for the three-months ended September 30, 2018.

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The unaudited pro forma condensed combined statement of operations for the fiscal year ended July 31, 2018, combines the Company's historical results for year ended July 31, 2018, and Olaregen's historical results for period from inception (April 24, 2018) to June 30, 2018.

The unaudited pro forma condensed consolidated balance sheet as of October 31, 2018 gives effect to the Olaregen’s acquisition as if it occurred on that date. The unaudited pro forma condensed consolidated statements of income for the three months ended October 31, 2018 and for the year ended July 31, 2018 give effect to the Olaregen’s acquisition as if it occurred on August 1, 2017, using the purchase method of accounting,

2. Purchase price

The purchase price for the Acquisition was $11.9 million as follows:

	Amount		Fair Value
Purchase Price:
Cash	$	400,000	$	400,000
Future Cash Payments of Note Payable	$	11,600,000		11,472,663
Net Purchase Price			$	11,872,663

3. Preliminary Pro Forma Allocation of Purchase Price

Under the purchase acquisition method of accounting, the total purchase price is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the date of the acquisition. The residual amount of the purchase price after preliminary allocation to identifiable tangible and intangible assets acquired and liabilities assumed has been allocated to goodwill.

Generex has performed a preliminary valuation analysis of the fair market value of Olaregen assets to be acquired and liabilities to be assumed. Using the total consideration for the Acquisition, the Company has estimated the allocations to such assets and liabilities, with the assistance based on the report of an independent valuation specialist. The Company has not completed the detailed valuation studies necessary to arrive at the required fair values of Olaregen’s assets acquired and liabilities assumed. Therefore, the following allocation of the purchase price to acquired assets and assumed liabilities is based on preliminary fair value estimates and subject to final management analysis, with the assistance of third party valuation advisors.

The following table summarizes the allocation of the preliminary purchase price as of the acquisition date:

Purchase price allocation:
Net assets of Olaregen		$	641,994
Cash paid prior to the time of closing			(400,000	)
In-Process Research & Development			3,980,000
Goodwill			19,650,228
Non-controlling interest			(11,999,559	)
Total Consideration		$	11,872,663

Company Equity Valuation:
Total Purchase Price	51% Ownership	$	11,872,663
Non-controlling interest	49% Ownership		11,999,559
Value of the Company's Equity		$	23,872,222

The goodwill asset adjustment amount for the unaudited pro form combined condensed balance sheet as of September 30, 2018 is $19,078,246 different than the purchase price accounting amount recorded for the acquisition. The difference is due to the estimated change in the fair value of assets acquired and liabilities assumed from the actual acquisition date of January 7, 2017 and the pro forma financial statement date of October 31, 2018.

4. Amortization Expense

As discussed in Note 3, based on the reports of an independent valuation specialist, the Company has reflected pro forma adjustments for the estimated fair value of identifiable tangible and intangible assets, and determined the estimated useful lives for purposes of computing depreciation and amortization expense. The pro forma adjustments for amortization expense are based on the estimated fair value of the non-compete agreements determined as of the closing date. The following table presents the fair value adjustments, the estimated useful lives and the pro forma adjustments to recognize the amortization expense:

	Estimated Fair-Value Adjustments		Estimated Useful Life		Three months ended October 31, 2019		Inception to July 31, 2018
Intangible Asset Adjustments:
Non-Compete Agreements	$	790,000		3	$	65,833	$	70,703
Total	$	790,000			$	65,833	$	70,703

5. Pro Forma Adjustments

The unaudited pro forma financial information is not necessarily indicative of what the financial position actually would have been had the merger been completed at the date indicated. Such information includes adjustments that are preliminary and may be revised. Such revisions may result in material changes. The financial position shown herein is not necessarily indicative of what the past financial position of the combined companies would have been, nor necessarily indicative of the financial position of the post-merger periods.

The following describes the pro forma adjustments related to the acquisition that have been made in the accompanying unaudited pro forma condensed combined statements of operations for the three months ended October 31, 2018 and for the year ended July 31, 2018, have been prepared to reflect the acquisition of Olaregen by Generex for the net purchase price of $11,872,663 as if the acquisition was completed on August 1, 2018, and on inception of Olaregen on April 24, 2018, respectively, for Statement of Operations purposes and reflect the following pro forma adjustments:

(A)

To record the incremental goodwill as a result preliminary purchase price allocation of the excess of the purchase consideration over the fair value of assets acquired in the amount of $19,078,246.

(B)

To record the incremental in-process research and development of $3,980,000 as a result of the preliminary purchase price allocation.

(C)

To record the incremental fair value of non-compete agreements of $790.000 as a result of the preliminary purchase price allocation.

(D)

To record the elimination of the Olaregen’s intangible assets of $650,000 previously recorded as a result of the acquisition as if the Acquisition occurred on August 1, 2018.

(E)

To record the promissory note’s fair value based upon future cash payments discounted at risk free rates and the total consideration paid based on a convergence method in an Option Pricing Model using the Olaregen capital structure of 3,282,632 newly issued shares of Olaregen common stock representing 51% percent of the issued and outstanding capital stock of Olaregen.

(F)

To record the elimination of the capital stock of Olaregen as a result of the acquisition as if the Acquisition occurred on August 1, 2018.

(G)

To record the elimination of the accumulated deficit of Olaregen as a result of the acquisition as if the Acquisition occurred on August 1, 2018.

(H)

To record the non-controlling interest as a result of the Acquisition based upon the fair value of Olaregen.

(I)

To record the amortization of the non-compete agreements as a result of the Acquisition as if the Acquisition occurred on August 1, 2018.

(J)

To record the portion of the noncontrolling interests related to the accrued interest of the promissory notes issued by the Company to Olaregen as a result of the Acquisition as if the Acquisition occurred on August 1, 2018, plus the additional interest expense resulting from the amortization the fair value of the notes payable.

(K)

To record the amortization of the non-compete agreements as a result of the Acquisition as if the Acquisition occurred on Olaregen’s inception on April 24, 2018.

(L)

To record the portion of the noncontrolling interests related to the accrued interest of the promissory notes issued by the Company to Olaregen as a result of the Acquisition as if the Acquisition occurred on Olaregen’s inception on April 24, 2018, plus the additional interest expense resulting from the amortization the fair value of the notes payable.